Sitting of 8 December 1986

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  WALES

    Labour Statistics
    Mr. Roy Hughesasked the Secretary of State for Wales what are the latest unadjusted figures for unemployment in (a) Newport, (b) Gwent and (c) Wales; what were the equivalent figures for 1979; and what has been the percentage increase in each case.
    The Secretary of State for Wales (Mr. Nicholas Edwards): On 9 October 1986 the total numbers of unemployed claimants in the Newport travel-to-work area, Gwent and Wales were 12,833, 28,863 and 174,105 respectively. Unadjusted figures for 1979 are not available on a comparable basis.
    Mr. Hughes: Has the Welsh Office been notified that we are approaching the year of the homeless? Surely this is not the time to slash £2 million from Newport's housing budget, when there are 6,000 people on the waiting list and 3,000 families in urgent need. Why does the Secretary of State not put his back into a major housing drive which could do a lot of social good, besides taking thousands out of the dole queue? Perhaps he might then not have to fiddle the unemployment figures.
    Mr. Edwards: We have given substantially increased allocations to local authorities, and there will be a
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    substantial increase in housing expenditure in the year ahead, I have also announced several other major new initiatives in Wales which will help to create a large number of new housing projects in the Principality.
    Sir Raymond Gower: Is it not a fact that there has also been some increase in the number of notified vacancies in the areas that my right hon. Friend mentioned in his answer?
    Mr. Edwards: Not only has there been an increase in the number of notified vacancies there has been a fall during the past year in the number of people who are unemployed. Allocations of Government factories in Wales are running at about 2·25 million sq ft, which is an all-time record, and the number of jobs being provided by regional selective assistance and regional development grants is also running at record levels.
    Mr. Ray Powell: As the Secretary of State continually comes here to Welsh Questions and whines about unemployment and his inability to get it down, might I suggest that he would be well advised to advise some industrialists to get on their bikes? Some industrialists on the south-east coast might show some initiative and come to Wales and the valleys. The Secretary of State talks about the 174,105 unemployed claimants in Wales, which is the fiddled figure. The Government have taken 18 steps to reduce the unemployment figure. The true figure is nearer 250,000. Is it not time that the Government started to tell industrialists to get on their bikes and come to Wales?
    Mr. Edwards: A large number of industrialists are doing just that, which is why we have attracted 20 per cent. of all inward investment into the United Kingdom during the past three years, why I can announce today that Celatose is proceeding with an expansion project at Pontllanfraith, which will help to create an additional 190 jobs, and why there is such splendid activity by the private sector through the Ogwr partnership trust, which, through its initiative, is creating some 946 jobs in the hon. Gentleman's constituency. One could go on with a series of other examples.
    Mr. Terlezki: Does my right hon. Friend agree, and do the Opposition agree, that unemployment in Wales has

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    come down by more than 6,000 during the past few months, and that that is due to my right hon. Friend, who travels around the world, trying to bring industries to south Wales where they employ labour? Is that not a credit to my right hon. Friend and to the industries that come to Wales and provide jobs?
    Mr. Edwards: I am glad that there are signs of improvements and that the unemployment figures are about 8,500 down on the same time last year. I believe that the major series of initiatives that we have announced in recent weeks will help to accelerate that process.

    Sheep
    Mr. Harveyasked the Secretary of State for Wales if he has any plans to introduce quotas on sheep production in Wales; and if he will make a statement.
    Mr. Nicholas Edwards: There are no plans to introduce sheep meat quotas in the Community.
    The June 1986 census results record a further 2·3 per cent. increase in the sheep breeding flock in Wales, and the industry continues to benefit under the EC sheepmeat regime.
    In the last marketing year sheep producers in Wales benefited by £73 million under the two sheep premium schemes and hill livestock compensatory allowances.
    Mr. Harvey: I welcome those excellent figures, but does my right hon. Friend agree that farming faces one of its most uncertain prospects for years because of factors outside the Government's control? Will he consider introducing quotas on sheepmeat production to protect upland farmers from the lowland farmers who are going out of cereals? Will my right hon. Friend also assure us that there will be no swingeing cuts in the milk quota?
    Mr. Edwards: I can understand the great concern in the industry, and I raised the question of sheepmeat quotas in my speech to the NFU at Aberystwyth only a few weeks ago. The industry ought to be considering that matter, although the issues are complicated and we are still a long way from self-sufficiency in sheepmeat. It is right that the industry should be considering the possibilities.
    Mr. Geraint Howells: I am sure the Secretary of State will agree that his Government virtually abolished the dairy industry when the quota system was introduced. If things remain as they are, will he introduce, not a quota system for sheep, but measures to get rid of the surpluses in intervention in the Community?
    Mr. Edwards: It is all very well asking us to get rid of surpluses within the Community, but it is wrong then to pretend to the electorate that that can be done without difficulty and pain. That approach is wholly dishonest. We have listened to the ideas put forward by the hon. Gentleman's party, but they offer no solution to the problems of the industry.
    Dr. Roger Thomas: Does the right hon. Gentleman accept that unless we tackle the CAP comprehensively, other sectors of farming, such as those taken out of cereal growing, will turn to sheep and those lowland areas will have a terrific advantage over hill sheep farmers in Wales?
    Mr. Edwards: Clearly we must look at the problems of the CAP against the background that changes in any one commodity have results on others. We must be very careful to look at the knock-on effects.
    Mr. Best: Does my right hon. Friend accept that the small farmer is the backbone of agricultural life in Wales and that there needs to be positive discrimination in favour of the small farmer in any changes made in agriculture? As well as that positive discrimination in favour of the small farmer in whatever sector, we need to take a comprehensive view of agriculture, rather than each sector being viewed separately. That will overcome the uncertainty faced by agriculture.
    Mr. Edwards: The Government did favour the smaller producers when the milk quota system was introduced. However, the consequences must be fully thought through, because we must remember that there are many more small producers in Europe than in this country. The hon. Member for Brecon and Radnor (Mr. Livsey) has suggested that those producing 250,000 litres or less and those with financial difficulties should be entireley sustained in their businesses, but if we reduce production that will involve even more severe consequences for the medium-size and larger farmers. I hope that that is recognised and that people have worked out what a policy of maintaining support for smaller farmers will mean for agriculture generally.
    Mr. D. E. Thomas: In view of the relatively greater importance of the sheep industry to Wales than to other countries in the United Kingdom, why is the Secretary of State in the Chamber today and not representing Wales with British Agriculture Ministers at discussions in Brussels? Will he at last accept our criticism that he will not be taking seriously his responsibilities as the Welsh Minister of Agriculture until he goes there?
    Mr. Edwards: There is absolutely no doubt that the sheepmeat regime and the support for the sheep industry has been one of the great success stories. Indeed, the reason why my hon. Friend the Member for Clwyd, South-West (Mr. Harvey) asked the question was to express concern that if the success continues and the number of sheep increases, we shall over-produce. The hon. Gentleman should be congratulating us on the success of our sheepmeat support policies.

    Local Authority Housing
    Mr. Alex Carlileasked the Secretary of State for Wales how many new council houses he expects will be built in Wales in 1987–88.
    The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): No reliable estimates are available. Local authorities are free to determine their own priorities for housing investment within the resources available to them.
    Mr. Carlile: Does the Minister agree that the current level of council house building in Wales is abominably low? Bearing in mind that 40 per cent. of council house applicants are single people without other accommodation of a reasonable sort, will he tell us what specific measures he will take to ensure that accommodation is made available for single people and for young couples who are just embarking on their life together?
    Mr. Robinson: Local authorities are responsible for the matters that the hon. and learned Gentleman raises, but they are not the only public sector bodies responsible for housing provision. Public sector starts as a whole were 17 per cent. higher in 1985 than in 1984.
    Mr. Gwilym Jones: Does my hon. Friend accept that, from whatever Left-wing party it comes, merely throwing more taxpayers' money at the problem will never be the real answer? Is not, instead, the example of Cardiff city council, in partnership with a housing association and free enterprise finance, a classic example of the right way forward?
    Mr. Robinson: I agree entirely with my hon. Friend. Only last week I was pleased to announce an increase in provision of 22 per cent. to the Housing Corporation. In terms of throwing money at the public sector housing stock, I am pleased to say that we have increased gross provision for 1987–88 by 19 per cent., or a total of £154 million.
    Mr. Anderson: Surely the Minister must be aware that council house waiting lists are shooting up in Wales for the demographic reason that there is an increase in those in the 20 to 30-year-old group? Does he say that only housing associations should be involved? My city council, for example, will have no completions on the general list next year. Is that what the hon. Gentleman wants? Surely if he looks at the facts, he must avoid his ideological distaste for local authority housing and see a role for both local authorities and housing associations in providing general housing.
    Mr. Robinson: The question whether any local authority has any public sector housing starts in a given financial year depends on the priorities of that local authority.
    Mr. Raffan: Will my hon. Friend tell the House how many Welsh local authorities are selling land to private builders for the provision of starter homes, how many authorities are entering licensing or partnership schemes with private builders, and what the Welsh Office is doing to encourage more to do so?
    Mr. Robinson: Private sector starts rose by almost 30 per cent. in 1985, and we have seen an increase in the provision available for new housing in the Principality over the past year.
    Mr. Wigley: How on earth can the Minister expect local authorities to build houses when his Government refuse to give them the capital allocations to do that and refuse them permission to use the capital that they have from the sale of council houses? Is he not misleading the House when he says that there has been an increase of 17 per cent. in public housing—yes, up to 1,400 houses—when there were 4,000 in 1979 and 9,000 in 1975? Is that not a record to be ashamed of?
    Mr. Robinson: I do not know where the hon. Gentleman has been for the past week, because I have just given local authorities a huge increase in housing expenditure.
    Mr. Barry Jones: Is it not the case that housing allocations return the total only to 1984–85 levels and that Ministers are involved in an electoral ruse because Wales has a housing crisis for which the Government have no strategic answer whatever?
    Mr. Robinson: The hon. Gentleman forgets that in 1984–85 we made a special allocation to improve the private sector housing stock. That was a special allocation
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    for one year only. I must point out that the allocations that we have made this year are equal to the level that we had in 1984–85.

    Welsh Development Agency
    Mr. Rowlandsasked the Secretary of State for Wales when he next hopes to meet the chairman of the Welsh Development Agency to discuss the agency's budget for 1987–88.
    Mr. Nicholas Edwards: I am in regular contact with the chairman of the agency and I have already informed him that the level of resources likely to be available in 1987–88 is about £85 million, which is nearly 13 per cent. higher than the agency's estimated gross expenditure in the present financial year.
    Mr. Rowlands: Does the Secretary of State realise that the budget for the WDA next year requires a much bigger input than the one he is suggesting, especially for land reclamation and factory building? Will he tell us whether the budget makes an assumption about the sale of properties by the WDA?
    Mr. Edwards: Every year we include an assumption about the sale of properties. In the current year that has been a realistic assumption. I have no reason to think that the estimates are unreal. I announced last Friday that we were making provision to increase the WDA's land reclamation budget by £4 million, which is some 30 per cent. up on the present year. When we are considering the expenditure by the WDA, we should also be considering the sums being made available for other parallel public bodies. I have just announced that substantial provision will be made available for the new Cardiff Bay Development Corporation.
    Sir Anthony Meyer: Is my right hon. Friend aware of the feeling that the WDA could, and should, do more in the rest of Wales, such as is being done by Mid Wales Development in mid-Wales, to help the launching of small rural enterprises? That does not necessarily involve large sums of money, but it does require the sort of leadership that the WDA could give.
    Mr. Edwards: I have approved an additional £2·8 million expenditure by the agency in the present financial year. Of that sum, £1 million is tied to new activity, £500,000 for additional resources for the highly successful subsidised rural loan scheme, and £500,000 for factory building. There is no doubt that the new initiatives that the WDA is taking in that sector are being successful, and we are supporting the agency and seeing that it gets adequate provision for that.
    Mr. Livsey: Will the Secretary of State say what proportion of the WDA's budget he expects will be spent on agriculture-related projects? I am thinking particularly of food processing and the updating of abattoirs.
    Mr. Edwards: The agency has only just received the provisional indications and now, clearly, has to prepare its budget for the next year. The hon. Gentleman will be aware that the agency has been giving increased priority to the sector to which he refers. It has launched a number of initiatives in that area, such as the agri-food initiative. I have no doubt that it will make provision for that important sector.
    Mr. Best: Will my right hon. Friend report on the successful conference last Friday of the WDA's urban renewal unit in Cardiff?
    Mr. Edwards: We dealt with urban renewal throughout Wales, especially with some of the major projects being undertaken in the valleys. The conference covered the valleys initiative, the announcement of the garden festival and the work being done in north Wales. I also took the opportunity to announce the extremely exciting and important initiative for the redevelopment of south Cardiff around Cardiff bay.
    Mr. Barry Jones: The right hon. Gentleman has announced no bonanza. We know that the agency could easily spend an extra £20 million on derelict land clearance and advance factory building. Does he agree that there is a chasm between the City of London and the industrial areas of Wales, and that there is prejudice in the City against investment in the coalfields and steel areas? What is he doing to ensure that British venture capital companies provide finance for Wales? It is a fact that those venture capital companies provide only 2 per cent. in terms of the British total for Wales, yet we know that fraudsters are making a fast buck in the City. We believe that the right hon. Gentleman has failed to get venture capital for Wales.
    Mr. Edwards: As usual, the hon. Gentleman asked a series of questions. The 30 per cent. increase in land reclamation is, as it happens, exactly the figure that the hon. Gentleman requested for land reclamation in comments in the newspapers last week. There has been a substantial interest in Wales by the venture capital market in the past year or two and some very encouraging support, especially for initiatives led by the Welsh Development Agency. The venture capital market is showing that it is aware of the improved financial prospects in Wales. I believe that the initiative that I announced last Friday is by far the most substantial ever announced to encourage private investment in Wales. It opens up massive prospects for private investment in the Principality. I am astonished that the hon. Gentleman did not take the opportunity to wish that very important venture well.

    Planning Appeals
    Sir Anthony Meyerasked the Secretary of State for Wales what are the general principles guiding his decisions on appeals against refusal of planning permission by local authorities in Wales.
    Mr. Mark Robinson: It is a statutory requirement on local planning authorities, my right hon. Friend and his inspectors, to consider each case on its merits having regard to all material considerations and the provisions of the relevant development plans.
    Sir Anthony Meyer: Is my hon. Friend aware that the apparently growing tendency by Welsh Office inspectors to overturn the decisions of planning authorities is making matters difficult for local authorities, which are trying, first, to limit the seemingly inexorable spread of retirement homes and, secondly, to stop amenity land of high value being encroached upon by speculative building?
    Mr. Robinson: I assure my hon. Friend that there has been no change of policy on retirement homes. Planning
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    proposals for residential homes for the elderly are considered against the background of national and local policies. The planning authority has to demonstrate the relevance of those policies in each case and show how interests of acknowledged importance would be harmed. I am confident that inspectors consider the issues thoroughly and fairly.
    Mr. John: One such case in which the Secretary of State has overruled the local authority in respect of planning permission is the openair market at Talbot Green. Does the hon. Gentleman accept that that overruling has led to bitter and sustained local opposition? In particular, does he agree that traffic, which is already heavy, will become chaotic when the market is working? Does he agree that the matter was considered insufficiently carefully by the inspector at the appeal? Does the hon. Gentleman feel any responsibility for the dislocation caused to the lives of the inahbitants of that area by this shoddy inquiry?
    Mr. Robinson: As I am sure the hon. Gentleman is aware, I cannot comment on individual planning applications. I am not aware of any shortcomings in the procedures which were followed in this case.
    Sir Raymond Gower: Can my hon. Friend define any differences in the approaches of local councils and of my right hon. Friend the Secretary of State and his inspectors in respect of planning decisions which, when made by a local authority, tend to reflect social and other pressures which may not fall strictly within the definition of planning? Do the inspectors not have to work solely on the basis of a planning consideration?
    Mr. Robinson: Our inspectors are obliged to take account of a variety of policy considerations and circulars when considering planning appeals.
    Dr. Marek: Does the hon. Gentleman accept that there is general unease in the Principality about the number of planning permissions granted on appeal against the wishes of the planning authority originally concerned with the matter? This is not restricted to quality homes, but involves all sorts of developments by people who have no connection with the area that they seek to develop. With a view to bearing that point in mind, will the hon. Gentleman review the general principles involved and the instructions which he gives to inspectors on how they should decide appeals? Will he publish the results of any such review?
    Mr. Robinson: Inspectors are asked to take into account all relevant considerations and material planning circulars. From time to time we review individual aspects of planning law, and we shall continue to do so.
    Mr. Raffan: My question follows on from that of the hon. Member for Wrexham (Dr. Marek). Is my hon. Friend aware of the concern of many local authorities, including Delyn borough council, that the Welsh Office does not attach sufficient importance to adopted local and structure plans? Will my hon. Friend ensure in future that appeal decisions are founded on those local planning policies which represent the views of the areas that they cover?
    Mr. Robinson: I assure my hon. Friend that structure plans are one of the material factors that inspectors are obliged to take into account.
    Mr. Roy Hughes: Is it not usually better to leave the decision-making to local people in these matters? For example, in Newport there is concern about the Secretary of State's guidelines, which have been responsible for the vetoing of an enforcement order on a scrapyard near to the new leisure centre, which will have to be relocated. Why is the Welsh Office not assisting Newport borough council in its drive for tourism, especially as the royal national eisteddfod is coming to Newport in 1988?
    Mr. Robinson: I welcome the fact that the eisteddfod is coming to Newport in 1988. However, the implication of the hon. Gentleman's question is that we should change the planning laws. We do not have any proposals to do that.

    Flood Damage
    Mrs. Clwydasked the Secretary of State for Wales what response his Department intends making to assist the victims of flood damage in (a) the Cynon Valley and (b) other parts of Wales.
    Mr. Nicholas Edwards: County and district councils for the areas concerned have wide discretionary powers to alleviate the impact of emergencies such as flooding and to provide assistance to victims. I understand that the Cynon Valley borough council has already given financial aid to householders most affected by recent flooding in its area.
    Mrs. Clwyd: As the Secretary of State knows, the Cynon Valley has been identified as one of the four most deprived areas in the United Kingdom. Is he aware that householders in Cwmamam suffered severe loss through the flooding of their houses, sometimes to a depth of 6 ft? Is he further aware that some householders lost electrical equipment, furniture, carpets and personal possessions? Many of them were not insured for household contents because they were recovering from the miners' strike.
    Will the Secretary of State be more sympathetic in his attitude towards those people? The council has given only a token payment of £100 per family. That is obviously not sufficient to compensate them for their loss. Will he be as sympathetic to the people of Cynon Valley as he has, quite rightly, been to the farmers of west Wales? I am not criticising him for that. However, I would expect him to be as sympathetic to the people of Cynon Valley as he has been to the farmers, who also suffered through the flooding.
    Mr. Edwards: I have every sympathy with those who were affected by the floods of 18 November. I know that considerable damage was caused. However, the district council has wide powers to provide immediate assistance for the emergency and there are well-established procedures. If the sums involved are substantial, the council can come to the Government for assistance. Indeed, I received a letter today from the council seeking such assistance from us and from the European Community.
    The rules are clearly laid down and the responsibility for paying sums of money is within the power of the district council. In the event of a large emergency beyond its normal resources, there are well-established arrangements for the council to come to central Government for assistance.
    Mr. Rogers: The Minister referred to the wide powers of local authorities. What is the point of local authorities having powers without the resources to help? Why does he not realise that and get out of that money-grooved frame of mind? It is not money that is required, but alterations to the infrastructure so that flooding does not occur. Is he aware that during the past three years, as a result of considerable flooding in the Rhondda—and it is no good the Under-Secretary of State smirking—hundreds of people have been flooded every time it has rained? What is desperately needed—and I have asked for this time and time again—is for the Welsh Office to convene a meeting of the local authorities, the Forestry Commission and large riparian owners so that they can together solve the problem of flooding in the south Wales valleys. Why does the Secretary of State not chair a conference to deal with the problem and come up with some ideas?
    Mr. Edwards: Major work has been undertaken in the valleys since the disastrous floods in 1981, and a great deal of improvement has been achieved. I am glad that on this occasion the flooding in the Rhondda was much less severe. Indeed, the worst floods were in the Cynon Valley. On the matter of resources, the threshold for assistance for the Cynon Valley borough council amounts to about £23,000. We are not dealing with enormous sums of money before the local authority can request central Government assistance. Responsibility lies with the local authority, and it is best qualified to decide whether assistance is required in a particular flooding incident.
    Mr. Coleman: Is the Minister aware that the recent heavy rainfall in south Wales has again resulted in movement of the mountain at Godre'r-graig Ystalyfera and the demolition of houses? What assistance can the local authorities expect to receive from the Department to enable them to assist people badly affected by that phenomenon?
    Mr. Edwards: As I have said, local authorities have wide powers to provide that kind of assistance and there are well-established rules, laid down by successive Governments, to provide for central Government assistance in major incidents in which the sums involved are very large.

    Leasehold Reform
    Mr. Ron Daviesasked the Secretary of State for Wales what representations he has received concerning the Government's proposals for leasehold reform following the Nugee report, as they affect Wales.
    Mr. Mark Robinson: We have received six representations concerning these proposals.
    Mr. Davies: Perhaps I may make it seven. Does the Under-Secretary of State recall writing to me some 12 months ago saying that he and his colleagues at the Welsh Office fully understood my constituents' concern about the activities of leasehold companies such as Castle Beg and Banana Bliss? Will he confirm that there is nothing in the Government's proposed legislation to tackle the abuses suffered by my constituents and others at the hands of such companies? Why have the Government taken no further action to enfranchise leaseholders and to give people greater rights of choice in nominating their own insurance companies? Is it too late for a change of mind?
    Mr. Robinson: I am pleased to inform the hon. Gentleman that the position has not changed since 30 June, when he said that he was grateful for my reply and that it was
    "most encouraging to the people of south Wales."—[Official Report, 30 June 1986; Vol. 100, c. 682.]
    I am afraid that the hon. Gentleman will have to wait until the legislation is published. I think that he would be wise not to judge it until then.

    Young Children
    Mr. D. E. Thomasasked the Secretary of State for Wales what proportion of his Department's expenditure for 1986–87 will be devoted to the needs of children under five years of age.
    Mr. Mark Robinson: Direct provision for children under five is made only through voluntary sector grants. In the current year more than £1 million has been allocated to voluntary organisations in Wales concerned with the needs of children.
    Mr. Thomas: As the specific initiative for the under-fives through the voluntary sector in Wales was a year and a half behind that of the DHSS in England, as only £300,000 was allocated to the scheme in Wales compared with £6·5 million in England, and as the English scheme is due to taper out next March, what is the future for the Welsh funding?
    Mr. Robinson: We are only halfway through the initiative, which has a three-year term. We have allocated £300,000 to 119 projects in addition to the other moneys allocated to the under-fives. We have received no complaints that that is inadequate.
    Mr. Gareth Wardell: Will the Minister give an assurance that, in line with the recommendations to the British Paediatric Association from medical committees and other professional organisations, the standard of training in Wales for secondary care doctors in the community will be at least as high as that of hospital consultant paediatricians doing the same work?
    Mr. Robinson: That is a matter for the district health authorities concerned. They are aware of the development, which is a fairly new one, of consultant community paediatricians.

    Prisoners (Whitchurch Hospital)
    Mr. Gwilym Jonesasked the Secretary of State for Wales if he is satisfied with the arrangements for the treatment of prisoners in Whitchurch hospital, Cardiff.
    Mr. Mark Robinson: I am not aware of any reason to be dissatisfied with the medical and nursing treatment of patients at Whitchurch hospital, including prisoners. Security aspects of the treatment of prisoners are the ministerial responsibility of my right hon. Friend the Home Secretary.
    Mr. Jones: As my hon. Friend knows, I am particularly concerned about the case of Hywel Rowlands, who was sentenced 14 months ago for killing his daughter and who, more recently, is alleged to have made threatening telephone calls to his wife from the hospital. Does my hon. Friend agree that it is not good enough for the Home Office merely to tell me that when Rowlands leaves the
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    hospital during the day he is expected to say what time he will return? Will my hon. Friend, with the Home Office, increase the efforts to find a more appropriate place for Rowlands as quickly as possible?
    Mr. Robinson: I can assure my hon. Friend that my right hon. Friend the Home Secretary agrees that Rowlands should be transferred. That will be effected as soon as possible.

    Heart Surgery and Young Children
    Mr. Terlezkiasked the Secretary of State for Wales what facilities are available in south Wales for heart surgery and treatment for young children; and if he will make a statement.
    Mr. Mark Robinson: Limited facilities are available for the assessment and treatment of children at the University Hospital of Wales, and a new paediatric cardiac unit is planned. Funds have already been made available to appoint a paediatric cardiologist.
    Mr. Terlezki: Does the Minister agree that it is imperative that work starts on the paediatric unit in Cardiff to alleviate the fear, worry and concern of parents whose children require heart operation after-care? Will he please tell me where the matter starts?
    Mr. Robinson: I agree with my hon. Friend. Detailed planning is well advanced. I expect work on the site to start in the autumn of 1987, with completion about the end of the following year.

  CHURCH COMMISSIONERS

    Church Urban Fund
    Mr. Greenwayasked the hon. Member for Wokingham, as representing the Church Commissioners, what contributions the commissioners intend to make in grants or loans to the proposed church urban fund set up by the General Synod.
    The Second Church Estates Commissioner, Representing Church Commissioners (Sir William van Staubenzee): "Faith in the City" recommended that the commissioners should contribute £1 million per annum for 10 years. The commissioners are giving sympathetic consideration to this proposal. In November, at the commissioners' request, the General Synod considered and gave general approval to the necessary legislation to allow the commissioners to give loans or grants to the fund.
    Mr. Greenway: Will my hon. Friend say whether some clergy will have lower stipends and emoluments as a result of this diversion of Church Commissioners' money to the church urban fund? Bearing in mind that, according to a poll published in a newspaper yesterday, 73 per cent. of those questioned said that they believed in God but only 11 per cent. of them said that they went to church, will some of that money go into the Church's own missionary effort in the inner cities to improve on that rather low figure?
    Sir William van Straubenzee: In so far as any money that is spent by the Church Commissioners on anything other than pensions and stipends diminishes the funds available for that purpose, clearly this has that effect, but the Church Commissioners see it as a development of their

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    historic role to help the clergy, especially in the poor parishes. It could perhaps he said, although I have no responsibility for the poll, that it might have an effect in those parts of the country to which this money is directed.
    Mr. Frank Field: Do the commissioners accept that the country might pay more attention to the follow-up of "Faith in the City" if the Church moved its staff from one of the plushiest sites in the country to an inner city area?
    Sir William van Straubenzee: I would need more notice of that than a supplementary question, but it is always possible that the expense of so doing would be greater than using existing plant, especially if, in the future, it will be possible to use it even more intensively.
    Mr. Latham: Is my hon. Friend aware that the defeatist attitude of closing inner city urban churches is hardly the spirit in which the Apostles originally spread the word? Will he take it from me that if the clergy spent rather less time on inane sociology and more time on teaching the scriptures they might fill the churches again?
    Sir William van Straubenzee: If I may say so, that is one of those generalities that it is easy to make. Perhaps my hon. Friend and I should say that we laity have a real responsibility in that matter as well.

    Family Income Supplement
    Mr. Peter Bruinvelsasked the hon. Member for Wokingham, as representing the Church Commissioners, what information he has as to the number and proportion of clergy who are in receipt of family income supplement.
    Sir William van Straubenzee: The commissioners do not have that information because it is a private matter between the person concerned and the DHSS.
    Mr. Bruinvels: In paying tribute to the DHSS, which certainly looks after some of the rather poor-off members of the clergy, may I ask my hon. Friend first to compile a list of those who really are in financial difficulty? I would have thought that that should be easy to do. Secondly, will he look again at the role of expenses and the very worrying fact that many expenses are no longer being met in full by the Church Commissioners? Will he encourage the Church Commissioners to pay those expenses, because all clergymen have an onerous task? They must spend much money on hospitality and on the other duties that they perform as clergymen and they should not have to pick up the tab for it.
    Sir William van Straubenzee: Dealing first with expenses, I have already given my hon. Friend the figures in relation to incumbents. In respect of assistant curates, 16 per cent. of the expenses that they incurred overall have not been reimbursed. This is too high. This is essentially a parish matter and it is being followed vigorously by the Church Commissioners by way of precept and example, in the sense of leaflets and so on, of which I will gladly send my hon. Friend an example. On the first part of my hon. Friend's question, one hesitates to interfere in personal matters just because a man is an assistant curate. Since the greater weight and emphasis has been placed on the salaries of the lowest paid, with a 67 per cent. increase during the past five years, as opposed to a 51 per cent. increase for incumbents, it must have moved a considerable number of men out of the lower brackets in which FIS is payable.
    Mr. Frank Field: Does the hon. Gentleman accept that no one in the House is asking him to collect information or to name the individuals in the Church who are poorly paid? But since the Government collect and collate FIS data according to industrial classification, will he ask for that information in relation to the Church and publish his findings?
    Sir William van Straubenzee: Of course, I shall consider the hon. Gentleman's suggestion. The weighting given to increases for assistant curates in comparison with the better paid must mean that considerably fewer of them are eligible for FIS. He and I will welcome that trend.

  WALES

    Paddington—South Wales Line
    Mr. Colemanasked the Secretary of State for Wales whether he has had any recent discussions with British Rail concerning the electrification of the Paddington to south Wales line; and if he will make a statement.
    Mr. Andersonasked the Secretary of State for Wales when he last met the chairman of British Rail to discuss rail operations in south Wales.
    The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): My right hon. Friend last met the chairman on 25 November and discussed a number of issues with him, including electrification of the south Wales line.
    Mr. Coleman: The Minister, who is a fairly regular traveller on the Inter-City line from Paddington to south Wales, will have seen this magazine, which I have in my hand, issued by British Rail. In that magazine, he will see proposals for the electrification of the line from the north-east by the 1990s. When will we have the same for Wales?
    Mr. Roberts: British Rail takes the view—I share it, as will the hon. Gentleman and everyone else who travels on the Cardiff to Paddington line—that the present diesel-powered, high-speed trains provide a fast and effective service. Electrification would not improve line speeds. However, British Rail has planned line and stock improvements, which should reduce journey time still further.
    Mr. Anderson: Hon. Members on both sides of the House wish to ensure that the Channel tunnel does not harm Wales. If we are to gain from investment, surely that investment should be made now. I appeal to the Wwlsh Office to initiate discussions with British Rail to ensure that the potential benefits to Wales from the consruction and use of the Channel tunnel are maximised.
    Mr. Roberts: I assure the hon. Gentleman that lack of electrification of that line will not affect the use of the Channel tunnel. We expect the Channel tunnel to be of considerable benefit to us in Wales. The Welsh Office has been examining further ways of improving the connections between Wales and the tunnel. British Rail will soon hold a seminar to discuss the matter further.

    Teacher Appraisal Scheme
    Mr. Raffanasked the Secretary of State for Wales if he will make a statement on the Government's pilot teacher appraisal scheme.
    Mr. Wyn Roberts: My right hon. Friend the Secretary of State for Education and Science has invited six local education authorities in England to form a consortium to pilot teacher appraisal. The findings of the pilot project will be made available to every authority in England and Wales.
    Mr. Raffan: Why will Wales not be represented in the pilot teacher appraisal scheme? Two local education authorities, Clwyd and Dyfed, applied to be included. Is it not essential that Wales be represented in view of the unique feature of Welsh education—teaching in the Welsh medium—and so as not to halt the progress already made in Wales into researching the practices and procedures of appraisal?
    Mr. Roberts: There is no particular advantage to the Welsh authorities participating in this project, especially when we shall get the results. It would mean diverting education support grant from other uniquely Welsh purposes for the purposes of this project. When we consulted the Welsh Joint Education Committee about the use of the education support grant next year, no request for a teaching appraisal pilot project in Wales was made to us.
    Mr. Barry Jones: The Minister has given a waffling reply. Can he tell us why he failed to stand his corner?
    Mr. Roberts: I am well aware that two Welsh authorities, on a mistaken assumption, did apply to take part in this pilot project. The hon. Gentleman well knows that, because it was explained to him in a written answer on 17 November. He is well aware that the Welsh authorities would not qualify for education support grant from the Department of Education and Science.

    Farm Incomes
    Mr. Geraint Howellsasked the Secretary of State for Wales if he will make a statement on current farm incomes in Wales.
    The Secretary of State for Wales (Mr. Nicholas Edwards): Total farming income in Wales this year is expected to rise substantially from last year's level, but to remain below the level of 1984.
    Mr. Howells: I am sure that the Secretary of State is well aware that he has full responsibility for Welsh agriculture. Will he tell the House and the Welsh nation why he is not in Brussels today defending the rights of the Welsh farming community?
    Mr. Edwards: I am quite confident that the agricultural interests of this country, and they include those of Wales, are best defended by having single United Kingdom representation of agricultural interests in Europe. There are already, goodness knows, enough difficulties in arriving at sensible solutions to the problems of CAP when 12 countries are negotiating, without adding to the cacophony of voices sounding off in Brussels.

  HOUSE OF COMMONS

    Palace of Westminster (Official Tours)
    Mr. Peter Bruinvelsasked the Lord Privy Seal what information he has as to the number of official tours of the
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    Palace of Westminster by (a) school parties and (b) others in each of the last five years; and if he has any plans to review the arrangements for such tours.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I will arrange for the figures to be published in the Official Report. The arrangements for the line of route were reviewed by the Accommodation and Administration Sub-Committee in February this year and previously in June 1985, when additional measures to reduce congestion were introduced.
    Mr. Bruinvels: I look forward to receiving those figures, but I am already fully aware of the increasing number of visitors to the Palace of Westminster. Does my right hon. Friend consider that the time has now come for perhaps a charge to be levied on all foreign tourist parties? [Hon. MEMBERS: "No!"] Alternatively, because this is a place of work, can we not reduce the number of tour tickets issued? We must get on with our work and even our constituents find it difficult to get into the House during the day.
    Mr. Biffen: I think that this is something which, in the first instance, should be considered by the Accommodation and Administration Sub-Committee. I am sure my hon. Friend realises that he has raised some fairly weighty issues of principle.
    Mr. Alex Carlile: Will the Leader of the House assure us that none of those visitors have access to the logging equipment that logs hon. Members' telephone calls? Will he come to the House to make a statement about who has access to that logging equipment and in what circumstances?
    Mr. Biffen: I think that that is very wide of the question of tours, but I shall write to the hon. and learned Gentleman.
    Mr. Latham: Will my right hon. Friend confirm that this is the British Parliament, and that people are entitled to tour it, but at the moment they have great difficulty in doing so because of the very long queues? Will my right hon. Friend consider whether, for example, two sets of checking equipment can be installed to halve the time that constituents spend in queues to see around their own Parliament?
    Mr. Biffen: My hon. Friend raises a point that I know is a cause of concern in all parts of the House. The Accommodation and Administration Sub-Committee is aware of these factors and my hon. Friend's point will certainly be drawn to its attention. The figures for last year show that 130,000 people went round Parliament with their Members of Parliament. That is a considerable increase over what was true hitherto.
    Mr. Williams: Is the Leader of the House aware that most of us hope that he will ignore the ludicrous proposition put forward by his hon. Friend the Member for Leicester, East (Mr. Bruinvels), but hope that he will give serious consideration to the point made by his hon. Friend the Member for Rutland and Melton (Mr. Latham)? Many of our parties that come a long distance face great difficulties. They often start at 6.30 am and arrive before 11 am, but have to wait outside for long periods, often in the rain, because there is only one piece of screening equipment. Bearing in mind the security problems, will the Leader of the House prevail on the Committee to look at this matter yet again?
    Mr. Biffen: I would not disparage the points that have been made by my hon. Friend the Member for Leicester, East (Mr. Bruinvels). They are perfectly fair points, but I consider that they raise issues of principle. Of course the Accommodation and Administration Sub-Committee will look at this matter again. It is perfectly well aware of the difficulties and I would be misleading the House if I said that I thought there was a fairly easy way to overcome them.
    Following are the figures:

    Parties on the Line of Route

    Autumn Visits Programme organised by the Education Officer

    Estimated total number of individuals in Member's Parties

    1981

    212 tours from 125 schools

    99,917

    1982

    120 tours from 66 schools

    99,905

    1983

    271 tours from 136 schools

    108,222

    1984

    30 tours from 12 schools (No official programme due to closure of House of Lords Chamber)

    144,161

    1985

    276 Tours from 138 schools

    130,774

    Welsh Question Time
    Mr. Gwilym Jonesasked the Lord Privy Seal if he will give consideration to moving Welsh Question Time to a Wednesday for a one-hour duration on a four-weekly cycle.
    Mr. Biffen: The rota for oral questions has been agreed through the usual channels. I have no proposal to alter it during this Session.
    Mr. Jones: I think that my right hon. Friend, who was in his accustomed place earlier, might agree that today we have had a rather cramped run at Welsh Questions, which lasted for only 35 minutes. Does he accept that hon. Members from north and north-west Wales—most obviously my hon. Friend the Member for Ynys MÔn (Mr. Best)—have about the most difficult journey to get to the House for Question Time on a Monday? If he were able to accede to my suggestion, he would only be giving Welsh Question Time deserved parity with Scottish Question Time.
    Mr. Biffen: Many hon. Members who live just as far away from Westminster as is the Principality were proud to stand for election on the basis that they would come here and do a day's work on a Monday. I understand the point that my hon. Friend has just made about Welsh Question Time. It has not always been made in its present form, but it is something to be considered through the usual channels when there is an opportunity to reconsider the rota.
    Mr. Wigley: May I press the right hon. Gentleman further on extending Welsh Question Time to an hour? Today we managed to get only as far as question 14, and two questions were chopped and not dealt with properly. After all, the Secretary of State for Wales is responsible for
    18
    education, health, employment, roads and local government in Wales. Given all the issues to which I have referred, we need more than 35 minutes to deal with them adequately.
    Mr. Biffen: That is something that might fall to be considered through the usual channels when the rota is being reconsidered.
    Mr. Greenway: Before any more time is given to Welsh Questions, and bearing in mind that there are only 36 hon. Members from Wales, will my right hon. Friend note that 84 hon. Members represent London constituencies? Should there not be a London Question Time before any more time is given to Wales?
    Mr. Biffen: As the metropolis, I think that London would wish to be more evidently integrated into the United Kingdom than almost any other part of the realm.
    Mr. Dixon: As well as considering the request that has just been made, will the right hon. Gentleman also consider allocating the hour that is given to Welsh Members on a Monday to the northern group of Members, who would willingly come along to put questions about their region, which, incidentally, has as many, if not more, problems as Wales?
    Mr. Biffen: The hon. Gentleman merely underlines how wise I was to be so unforthcoming to my hon. Friend the Member for Cardiff, North (Mr. Jones)

    Car Parking
    Mr. Heathcoat-Amoryasked the Lord Privy Seal what information he has as to the use of car parking spaces marked for right hon. and hon. Members by others; and if he will make a statement.
    Mr. Biffen: I refer my hon. Friend to the reply that I gave on 17 November to his previous question. If he has any particular point in mind I will draw it to the attention of the Accommodation and Administration Sub-Committee.
    Mr. Heathcoat-Amory: I thank my right hon. Friend for his reply. Is he aware that at the Norman Shaw buildings the car parking spaces reserved for hon. Members are frequently used by an assortment of secretaries, research assistants and others and that often the cars do not even display the car parking badge? Does he not think that the white markings on the ground stating "Members only" should mean just that? If that is not the case, should not the markings be altered?
    Mr. Biffen: I shall of course draw my hon. Friend's specific points to the attention of the Accommodation and Administration Sub-Committee.
    Mr. Williams: Will the right hon. Gentleman note that only 12 places for the disabled are reserved in Star Chamber Court, although more than 30 Members of the House and its staff are disabled? Will he therefore consider whether more spaces in the court should be reserved for the disabled, and what action can appropriately be taken against those hon. Members who persistently and selfishly insist on parking in the disabled parking spaces, although they suffer from no disability?
    Mr. Biffen: I take note of what the right hon. Gentleman says. I suggest that in the first instance he

    19
    writes to the Accommodation and Administration Sub-Committee giving evidence of the inadequacy of the present arrangements for the disabled. I am sure that the Committee will wish to take that up.

    Part-time Staff
    Mr. Willie W. Hamiltonasked the Lord Privy Seal what steps he has taken to ensure that there are no personnel employed whole-time or part-time by hon. Members who are associated with terrorist organisations.
    Mr. Biffen: It is not the practice to give detailed information about security matters.
    Mr. Hamilton: Is the right hon. Gentleman aware that one of his hon. Friends, the hon. Member for Luton, North (Mr. Carlisle), employed as a research assistant in the House a Mr. Hoile, the former vice-chairman of the Federation of Conservative Students, who has reportedly been on armed patrol with the American-financed terrorists in Nicaragua? What steps does the right hon. Gentleman intend to take to ensure that there is no repetition of such disreputable practice?
    Mr. Biffen: The hon. Gentleman makes a number of comments that are quite unsubstantiated. They amount to mere innuendo. The sooner that the House moves away from argument by innuendo to argument by evidence, the better it will be for us all.

European Council (London)
3.31 pm
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I shall make a statement about the European Council held in London on 5 to 6 December. I presided over this Council and was accompanied by my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs. The conclusions of the Council have been placed in the Library of the House. There were two major themes for the Council: business and jobs, and safeguarding the open society.
On business and jobs, we noted that economic policies of member states had been steadily converging and that inflation in the Community was expected to fall to 3 per cent. in 1987, the lowest for 20 years. The Council unanimously endorsed an action programme for jobs, which stems from an initiative taken by Britain, supported by others earlier in our presidency. The programme puts emphasis on training, including up to two years' vocational education and training for school leavers and greater involvement with industry. It stresses also action to help the long-term unemployed, including schemes for job counselling.
The programme will be carried forward by Social Affairs Ministers at their Council later this week. In future, the employment programme must have priority in the use of moneys allocated by the European Community's social fund.
Linked with the need to create the conditions for a growth of jobs, the Council looked at ways of encouraging small and medium businesses—one of the main sources of new jobs. The Community has agreed to over £1 billion of loans for small businesses. This will be available, among other things, for investment in new technology.
The Council endorsed the principle of the Commission's proposal both to simplify VAT and to make it possible to lift the VAT threshold for small businesses up to about £25,000.
This is in line with our aim to take unnecessary burdens off the back of enterprise.
Completion of a large, single market in Europe has been a major priority of the British presidency. Thirty-two measures have already been adopted or agreed since July. They include: an important step towards complete freedom of capital movement within the Community; action against counterfeit goods; common testing and marketing standards for pharmaceutical products; common standards for television by satellite; and common standards for a pan-European telecommunications system using digital technology. A similar effort will be made on digital cellular radio, a market worth billions of dollars in which Europe has a technological lead. We shall continue to press for easier access to cheap air fares.
The Council recognised the crucial role of an open world trading system in achieving more growth and more jobs. We noted that the Community has already launched an action in the general agreement on tariffs and trade against Japan's barriers to trade. That action may need to be reinforced unless we see early results.
The second main theme of this meeting was concerted action to protect our citizens against terrorism, drugs, illegal immigration and abuse of asylum. Terrorism can strike anywhere, and it is vital that we act together in our common defence, as we did successfully in the case of
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Syria. We therefore agreed on a policy of no concessions under duress to terrorists or their sponsors, and on solidarity between member states in their efforts to prevent terrorist crimes and to bring the guilty to justice. Free movement for bona fide travellers within the Community must go hand in hand with better controls at the Community's external frontiers.
On drugs, the Heads of Government endorsed a seven-point plan covering: intensified co-operation between police and customs authorities; a decision that illicit drug traffickers' assets will be liable to confiscation throughout the Community; exchanges of drugs liaison officers; and exchanges of information on the treatment of drug addiction and on education about the dangers of drug abuse.
The European Council also decided to launch a sustained information campaign on the prevention, early warning and treatment of cancer and to designate 1989 as European Cancer Information Year. It asked the Council and Commission to ensure Community-wide exchange of information on AIDS, and to consider what further co-operation in research might be taken against the spread of this dreadful disease.
The President of the Commission, Mr. Delors, reported on his review of future Community financing. He will be visiting Community capitals early in 1987 in order to set out his views and discuss options covering future financing, the common agricultural policy and the structural funds. The European Council made it quite clear that in the meantime work must be carried forward and decisions taken on issues already before the Council. The Agriculture Council is now in session with the aim of reaching such decisions on the reform of the arrangements for milk and beef.
The Heads of Government discussed East-West relations and arms control. There was wide support for the points which I agreed recently with President Reagan at Camp David. We issued a statement on the Soviet occupation of Afghanistan, which is now nearing the end of its seventh year. Foreign Ministers discussed the problems of the middle east and the Iran-Iraq war and stressed the importance of maintaining contact with the Gulf states. They also discussed South Africa and Latin America.
It has been a priority of the British presidency to make the Community work better for the benefit of individual citizens. This was a practical and successful Council relevant to jobs, to our future prosperity within the Community and to the future safety of our citizens.
Mr. Roy Hattersley: I welcome and support the initiatives taken to co-ordinate policies to combat terrorism, the spread of AIDS, drug abuse, and the health information campaign. Judgment on the co-ordination of visa policy must await a statement about the rules by which the policy is to be co-ordinated. Does the Prime Minister envisage that the basis will be the generally liberal and humane policies of our European partners, or our own racially discriminatory policies?
Will the Prime Minister accept our congratulations on the support which the summit and the communiqué, although not her statement, gave to the importance of continued dialogue between EC Ministers and trade union leaders in the Community, and the support given by the communiqué, to the co-operative strategy for growth? The

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Prime Minister's attitude on both these matters is well known. We are delighted that she was either defeated or surrendered on each issue.
The proposals for reducing unemployment within the Community are a pathetic response to what even the Foreign Secretary called the "major challenge" facing the British presidency. They consist of platitudes, such as the expressed desire for lower interest rates. British interest rates are now the highest in Europe and the highest in British history. When does the Prime Minister expect that particularly pious hope of the communiqué to be fulfilled by her Government.
The Prime Minister has run away from all the crucial issues which should have been tackled during the British presidency. The failure to face, even less to attempt, to overcome either the financial crisis or the fiasco of the common agricultural policy was wholly deliberate, and the Community must hope that Belgium will behave more bravely next year.
I should like to ask the Prime Minister specific questions about each of the crises which she attempted to duck. How does she propose to deal with the £2 billion deficit which the Community will face next spring? Does she accept that a supplementary budget is now unavoidable—
Mr. Teddy Taylor: No.
Mr. Hattersley: We hear the view of the south-east coast, but perhaps the Prime Minister will tell us whether she thinks that a supplementary budget is now unavoidable as Europe is facing backruptcy. When she gives us her judgment on that point, will she tell us what possible advantage, apart from an attempt to save her own face, was gained from her refusal to act now against the financial crisis?
Does the right hon. Lady agree that there must be major reform, a reduction in surpluses and a pricing policy for the CAP which is in the interests of consumers no less than of producers? Is it not shameful that the pursuit of those objectives, which are all in the British interest, should have been sacrificed to help the German Conservatives in their election campaign?
My final question is about relations between Europe and the USA. Why was there no mention of this topic in the communiqué, why was it given so much prominence in the press conference that followed the summit, and why did the Prime Minister deal with it in such detail today? Is it because the Prime Minister no longer has "implicit faith"—her words—in the President's integrity, or is it that she remains an apologist for the deal over Iran, but could not persuade the Heads of the other European Governments to be similarly sycophantic?
The Prime Minister: I note the contempt of the right hon. Gentleman for the 11 other Heads of Government in discussing the results of this conference and his contempt for them on the common agricultural policy and the finances, because, of course, this was a conference of all Heads of Governments.
The right hon. Gentleman spoke about growth. It was noted that the Community is a main component of the engine for growth, and that the Community has been optimistic towards the end of this year and believes that there are reasonable prospects for growth next year.
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On jobs, the right hon. Gentleman argued that nothing was achieved, but the Council's approach to jobs contains four practical elements. Towards the completion of the internal market, 32 internal market measures have already been agreed or adopted since July, the most ever registered in a single presidency. They include valuable agreements which will help liberate capital markets, combat counterfeit goods, protect consumers from chemicals in meat, establish standards for direct broadcasting by satellite, and set new standards for things such as fire safety in hotels, which will benefit British holiday makers.
Completion of the internal market is going well and enables us to set standards which British business men will know and which will enable them the better to sell in the Community. It includes positive help for small firms, such as, for example, the £1 billion loan facility, and includes cutting regulatory burdens on small and medium firms and a programme for employment growth—a programme which, as the right hon. Gentleman knows, is set out in full in the Library.
The right hon. Gentleman also asked about the common agricultural policy. In the last few price fixings prices have been stablised or reduced, largely at the instance of the British delegation. The right hon. Gentleman is aware of the quotas, and today there are further discussions on milk and beef quotas. He knows full well the steps that are being taken to reduce the amount that goes to intervention.
I said in my statement that Mr. Delors is considering the report that he has to make under the Fontainebleau settlement. He has to report on three things: the convergence of policies, financial matters of the Community and the reform of the common agricultural policy. Before making his report he will visit each capital to have discussions with each Government, and will take with him a programme of options and the consequences that flow from them. It is good that he will carry out such detailed work and consult before making his report.
Europe and the United States were discussed, especially during the discussion of East-West relationships, as I said. Colleagues at the Council of Europe gave broad support to the programme at Camp David. We also realised the importance of showing solidarity ourselves, and showing the Community as a stable force for democracy, being very practical in the proposals it made, and making them apply to individuals and citizens.
Sir Brandon Rhys Williams: May I congratulate my right hon. Friend particularly warmly on the rapid progress that is now being made towards the integration of the European market for capital? Will the British Government seek to follow up this success by obtaining the co-operation of other member states in taking off the regulations and restrictions which are holding back the expansion to the continent of services, such as insurance and building societies and the Stock Exchange, and other financial facilities which are available in London and which the whole Common Market ought to share?
The Prime Minister: Yes. My hon. Friend is aware that that is one of the objectives of getting a single internal market. We are anxious that there should be freer movement of capital. My hon. Friend will be the first to say that we have had free movement of capital from Britain throughout Europe during the lifetime of this Government, but not under the Labour Government.
Dr. David Owen: While it was probably inevitable that the looming budgetary crisis would be avoided until after the German elections, will the Prime Minister tell the House whether there is any sign that the Federal Republic of Germany is now prepared to take action over surpluses in the CAP? Is it true that, at the Heads of Government discussion on East and West, great anxiety was expressed about President Reagan's decision to break out of the SALT limits? Is the Prime Minister ready to say that she deeply regrets that decision, and that if the United States wants to go ahead with airborne-launched cruise missiles above the limit it should decommission the Poseidon submarine?
The Prime Minister: As the right hon. Gentleman is aware, the 1·4 per cent. VAT limit is now enshrined in the treaty obligations. This House has ratified it, and three other countries have ratified the Single European Act. The rest have indicated their intention to ratify by the end of the year, by which time the 1·4 per cent. will be in the treaty. It can be changed only by the agreement of all Governments and all Parliaments.
As to whether Germany is really prepared to tackle surpluses, we are all prepared to tackle surpluses, but the right hon. Gentleman will be aware that it is one thing to say "tackle surpluses", and quite another to find a method to tackle them without stopping people from buying this year's crop. We feel that the two things must be tackled at the same time—we must not produce surpluses and at the same time have a programme to reduce them.
Mr. Teddy Taylor: As the House was assured that the 1·4 per cent. VAT limit would last for several years, can the Prime Minister give us an assurance that there is no way in which the Government will agree to a supplementary budget in 1987? As every reform in the CAP to date, including milk quotas, has simply resulted in more subsidies and more production, does the Prime Minister agree that the only way to solve the cash crisis and save British agriculture from inevitable disaster is to seek the repatriation of agricultural policy from the Community to member states?
How do the Heads of Government square their statement on terrorism with a directive which is being drafted today by the Commission to remove all controls on the movement of weapons across Community boundaries, which will now be determined by majority vote under the Single European Act?
The Prime Minister: As my hon. Friend knows, the 1·4 per cent. VAT limit is enshrined in treaty and cannot be changed without the agreement of the Heads of Government and of Parliaments. As for the CAP, the President of the Commission will visit capitals, and doubtless one of the things that he will bring with him is a series of options on how best to get rid of surpluses, while ensuring a policy that does not produce more. The general principle is easy to state, but it is not easy to devise a means. If my hon. Friend has any special ways, perhaps he will tell us.
As for repatriation, one has to watch the effect on the budget. It would mean that one could dispose of some of the surpluses at the expense of each individual state and not of the budget. We should need to look at that very carefully before we gave a yea or nay.
My hon. Friend mentioned terrorism and the control of weapons. I believe that there is a question on the Order
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Paper which is to be answered later today, but we make it quite clear that nothing will prevent us from applying controls to our own borders.
Dr. Jeremy Bray: Can the Prime Minister explain why more progress was not made on the framework programme of research and development in the European Community? Are the Government in favour of an increased proportion of the European budget being devoted to research and development? If so, is it not disappointing that the Government did not make better use of their chairmanship to make progress in that direction?
The Prime Minister: I think that most people are in favour of more being spent on research and development, but it is not possible to say that much more should be spent on research and development and, at the same time, suggest that the budget is already knocking against its ceiling. We cannot say the two things at the same time.
I make it perfectly clear that unless we can get down the amount spent on argiculture, particularly on the storage and disposal of surpluses, it will be very difficult to agree a much larger budget on research and development, although we should like to see one.
Mr. Hugh Dykes: Does my right hon. Friend not think it extraordinary that when the European summit has a quiet, relatively undramatic, workmanlike meeting, with many important decisions being made, the Opposition and some of our hon. Friends criticise it for lacking dramatic decisions? However, will my right hon. Friend confess to being somewhat disappointed by the slow progress being made in the Community, at all levels, on lower air fares and airline competition?
The Prime Minister: Yes, I think that the Community is split about half and half on this matter. We are very anxious to have lower air fares. We believe that they bring more travel and more jobs, and that is the experience the world over. We are on the side of lower air fares and freeing up the airlines. The initial communiqué drafting was objected to very strongly by Socialist Spain.
Sir Russell Johnston: Is the Prime Minister aware that, given our unemployment statistics, it is impossible to be other than cynical when told that the United Kingdom is taking the initiative on job creation? The Prime Minister referred to the social fund, but surely the impact that the fund can make on training will inevitably be very limited—and probably ineffective—unless we have more own resources and/or a reduction in agricultural expenditure. Having had six months in the presidency of the European Community, does the Prime Minister think that that is a long enough term to have any significant effect on anything?
The Prime Minister: I notice that the hon. Gentleman wants more own resources for the Community. I must say to him that I do not particularly want to have more own resources for the Community, and I shall strain against any increase in the 1·4 per cent. VAT ceiling until we are certain that the CAP and the question of surpluses have been resolved. After the Fontainebleau agreement, which gave us a continuing right to rebate, which we had not had before, and given the fact that we are coming to the ceiling, we now have the first chance for many a long year to try to get a true reform of the common agricultural policy.
Mr. Eric Forth: My right hon. Friend has said that she believes that the 1·4 per cent. ceiling which came out of Fontainebleau is the major influence for financial discipline in the Community, but does she not agree that to concede a supplementary budget, giving more money outside the normal budgetary procedures, would remove effective financial discipline? Can my right hon. Friend give us an undertaking that we will not agree to supplementary budgets until we are satisfied that the finances of the Community have been properly and effectively reformed?
The Prime Minister: It is not only the finances of the Community. I agree that there will be very serious difficulties towards the end of next year, particularly as agricultural surpluses are still being built up. It is possible that unless we get reductions through the Agriculture Council fairly soon the money will run out towards the end of next year. We shall strain against a supplementary budget very much indeed, for the very reason that my hon. Friend has mentioned. If one goes in for more intergovernmental arrangements, one fundamentally undermines the discipline. That explains why I replied as I did previously. The fact that we are coming up to the 1·4 per cent. VAT ceiling and that we have a good and continuing rebate system for this country give us a better chance than previously of getting a reform of the agricultural policy. Disposing of the surpluses comes on the budget and may mean a heavier demand on the resources of the budget.
Mr. Eric S. Heffer: As the free movement of capital usually means that capital goes where it can make a profit, will the Prime Minister explain to the House how the free movement of capital helps people on Merseyside, in the north-east, south Wales and other areas which are suffering from a lack of capital and investment? Can she explain how this, which is obviously in line with her philosophy, helps the British people at this moment, when they need every assistance to get employment?
The Prime Minister: The hon. Gentleman expects the free movement of capital inwards to get inward investment, and so do most of the special regions. Indeed, whether Scotland, Wales, Northern Ireland, the north east or the north-west, they tend to send people to countries which can bring investment here so the hon. Gentleman expects inward investment. The reason why he does not get more in Liverpool is the local authority there.
Mr. Ian Gow: I welcome my right hon. Friend's commitment to the free movement of goods and capital within the Community, but can she explain to the House why the VAT threshold should not be a matter for the exclusive decision of the House and the Chancellor of the Exchequer? To enlarge on that, should not excise duties on goods sole in this country be a matter exclusively for my right hon. Friend the Chancellor of the Exchequer, not for the Commission?
The Prime Minister: When we talk about tax, most of us in the Community resist any suggestion that we should be compelled to harmonise our tax rates or levels. When I speak about VAT, the option would be to inrease the threshold to £25,000. It would not be mandatory, but it would be an option. That will be important, and it will leave the decision to my right hon. Friend the Chancellor of the Exchequer. On customs and excise, it is a decision
28
for the Chancellor, as my hon. Friend knows. However, the House must bear in mind that we complain bitterly when other countries seem to put on highly selective increases on products which we would normally sell to them. That is a barrier to trade and we must take it into account when considering our action. On other matters—[HON. MEMBERS: "Answer."] I am sorry, but my hon. Friend will ask his question again if he has not received an answer.
Mr. Nigel Spearing: On VAT, will the Prime Minister tell us whether the Council discussed the Commission case against the United Kingdom, requiring us to put VAT on building construction, industrial fuels and new services? In respect of the single internal market, of which the Prime Minister seems proud, did the Council discuss the proposal to impose VAT on public transport, which is in the Cockfield package? Does the Prime Minister support that proposal?
The Prime Minister: I have already made it clear that most Heads of Government would resist strongly any approximation of taxation, and obviously, that could come about only by a unanimous vote. There would be no prospect of a unanimous vote. The case on zero rate VAT on housing, which is before the courts, is being fought strenuously on our behalf to continue the zero rate. We want to continue the zero rate VAT for housing.
Sir John Biggs-Davison: When the Prime Minister talked to Dr. Garrett FitzGerald during the conference, did they discuss ways of reducing or removing the destabilising and adverse economic effects of the Anglo-Irish Agreement.
The Prime Minister: We agreed that we were both committed to the future of the Anglo-Irish Agreement. I have nothing further to report to my hon. Friend.
Mr. Ron Leighton: May I congratulate the Prime Minister on further British triumphs? As agriculture was not mentioned, may we assume that everything in the farming garden is rosy and that all is well with the Community budget? May we assume that the Fontainebleau agreement, as she assured us at the time, is watertight, that there is really effective financial discipline and that there is absolutely no question of a further intergovernmental whip round in the coming year, when we would send even more of our money for them to waste?
The Prime Minister: As the hon. Gentleman is aware, the result of the Fontainebleau agreement was put into treaty form before the Single European Act. It is now in treaty form and cannot be raised except with the agreement of the House and all Governments at the same time. The amount spent by the Community is coming up against a ceiling. Indeed, it is said that it is already over the ceiling, or could be, according to what kind of agricultural year we have and the decisions taken this December at the Agriculture Council. One has to remember that part of the budget comes back in rebates. What has concerned us before is whether there was enough room for us to receive the rebates, or whether they would be carried forward for some considerable time.
Mr. Stephen Dorrell: Will my right hon. Friend accept that the progress towards completing the internal market will be remembered as one of the most important achievements of the British presidency? Will she

29
accept that if we are to regard Europe as a single internal market it does not make much sense for national competition policy authorities to look at individual national markets when making their decisions? Did the European Heads of Government discuss the impact of completing the internal market on national competition policies?
The Prime Minister: No, we did not do that at this meeting. I confirm what my hon. Friend said, that the completion of the large single market was, after all, one of the original objectives of the treaty of Rome, and it is sad that it has not yet been fulfilled.
Mr. Dennis Skinner: Can the Prime Minister tell us whether anybody at the summit had the nerve to say that before a communiqué was issued containing high-sounding principles about AIDS and solving terrorism, such as we have had in previous communiqués, perhaps a communiqué should be issued saying how we could resolve some things that can be resolved only within the Common Market, such as getting rid of food surpluses, getting rid of the common agricultural policy and feeding the Third world? Would it not make more sense to the British people if, after two days of dining out, spending taxpayers' money—[Interruption.] There is no doubt that it cost a small fortune and Conservative Members like the gravy trains. Surely it would make more sense to the British people if the Common Market, instead of sounding off about other things, would say specifically, "We are going to get rid of the common agricultural policy here and now. That is something that we can do."
The Prime Minister: I do not think that the hon. Gentleman would have found either myself or any of the other 11 Heads of Government, of whatever political complexion, fully on his side.
Mr. Skinner: I guessed that.
The Prime Minister: I am sure that the hon. Gentleman did. They would agree that we need to get rid of surpluses, but there is no point in getting rid of surpluses if, at the same time, more are created to go into the stores that would thus be released. One has to do two things at the same time. That is why the presidency of the Commission is coming round with proposals, because we cannot have reform of the financial position without dealing with the common agricultural policy. If, instead of just sounding off, the hon. Gentleman has some constructive suggestions on how to deal with the problem, we would be pleased to listen to him.
Mr. Tony Marlow: While it is well known that the Opposition have an open door immigration policy, is it not the case that there are millions of people throughout the poorer parts of the world who would use any means, fair or foul, to gain access to the Community? Is it not the case that that would be against the interests of the Community, and that it would be against the will of the British people to have anything other than the most stringent, effective and fair immigration laws?
The Prime Minister: Yes, particularly as I think that there has been a certain amount of abuse of the ease with which it has been possible to get into the Community through some ways. We all agree that if we are to have free
30
movement within the borders of the Community we must have strong controls at its external borders, such as airports and shipping ports.
Mr. Tony Banks: The Prime Minister said that proposals would be coming forward to deal with the common agricultural policy and, therefore, with the food mountain. When are those proposals expected? That is what the country wants to know. It is an obscenity to have such huge amounts of food going into intervention stores when people clearly want to eat that food in this country and overseas. As the Prime Minister has been very good and forthright in the past in banging her shoe on the table and forcing people to do things, why does she not start banging her shoe on the table over the common agricultural policy? We have dumps in Stratford full of beef and butter, and if she wants a constructive proposal, why does she not throw the doors open and let those on supplementary benefit, and pensioners, have that food and butter for Christmas?
The Prime Minister: We have been modifying the common agricultural policy, if the hon. Gentleman had not noticed, by such things as milk quotas and the price mechanism. Indeed, farmers have a rather lower income now than they used to have some time ago. In fact, the yields of both milk and wheat have gone up and that is why we have surpluses. If we were to throw open the doors there would be a tremendous increase on the budget, because, at the moment, the rule is that each country finances the storage of surpluses on its own soil. When those surpluses are disposed of it, it is a charge and duty on the budget. As I have already said, we have to do two things at once. If we were just to throw open the doors we would have enormous increases in storage, as people would not buy this year's crop. We have to deal with two things at the same time.
Mr. David Heathcoat-Amory: My right hon. Friend's statement that the 1987 European budget must remain within the 1·4 per cent. VAT limit is welcome. Will she confirm a slightly different point, which is that there will be no resort to loans or non-refundable advances or any other devices which might be used by others as a way of breaching that financial limit by covert means?
The Prime Minister: I do not think that the Commission has the right to raise loans to meet a budget deficit. That is why my hon. Friend referred to other devices. If we were to rule those out, I must warn my hon. Friend that it might have a bad impact on the rebates to this country, and we must consider what would be the optimum position for the interests of this country.
Mr. Allan Roberts: What did the other Heads of State think about the Prime Minister and her Government abandoning a foreign policy commitment which used to be shared by all political parties in this country — the commitment to multilateral nuclear disarmament? What did they think of her going to Camp David to persuade the President of the United States not to reach any multilateral agreement which would reduce nuclear weapons on both sides and which might make the purchase of Trident by Britain unnecessary, or at least not to do it before the next general election? Is it not true that the Prime Minister is in favour of the zero-zero option only

31
after the next election because she does not want her keep-the-bomb campaign to be jeopardised for the election campaign? Is she still committed to multilateral nuclear disarmament?
The Prime Minister: Yes. If the hon. Gentleman had been listening, he would have heard that Heads of State and Government generally endorsed the view put at Camp David, which resulted in the communiqué following.
Mr. John Watts: Is my right hon. Friend aware that her achievements during the British presidency are very much more substantial than those of the Leader of the Opposition during his humiliating tour of the United States? Is she further aware that agreement on raising the VAT threshold will be particularly welcome to very small businesses as a first step, but that it does not go far enough, and that even if a limit of £50,000 were to be introduced the loss of revenue would be minimal?
The Prime Minister: With regard to the VAT threshold, I think that ours is a turnover of about £20,000, which is higher than some other countries in the Community. If the new proposal goes through, it will give an option to be exerciseable by the Chancellor of each country to take the VAT threshold up to a turnover of £25,000. That does not mean that it will go up automatically, but it gives the Chancellor an option to do so.
Mr. Tom Clarke: In view of the tragic job losses announced in the Scottish whisky industry at the weekend, will the Prime Minister tell the House why the Council did not find it possible to consider specific proposals to reduce the appalling figure of 16 million unemployed in the Community and why the Government are resisting reflationary measures which could lead to job expansion?
The Prime Minister: If the hon. Gentleman looks at the whole programme, including, in detail, at the action programme for jobs, and takes into account what we were doing in connection with the Japanese market and with opening up the internal market, he will see that all those measures are directed towards creating more jobs to alleviate the problem of unemployment throughout the Community.
Mr. David Harris: I congratulate my right hon. Friend on the real achievements of the presidency and of the summit. During the six months that she has been in the chair, has she detected any strengthening of the political will that will be necessary to deal with reform of the CAP? Does she accept that many of us fear that as she will no longer, from the new year, be President, there may be a complete absence of that political will?
The Prime Minister: There is obviously more political will to deal with that matter, or we should never have gone through the difficulties of having milk quotas and a fairly strict price settlement on other products. As my hon. Friend knows, various other schemes are being considered, such as the set aside of certain lands, which could reduce the surpluses which are produced each year. I make no bones about it: it will be very difficult to settle this problem, because there are no easy solutions and, therefore, it will not be an easy year.
Mr. David Sumberg: In relation to the discussions on arms control and defence, did my right hon.
32
Friend find any support among her colleagues for the ditch across Europe, as proposed by the Labour party, to defend us from Russian tanks? Did the Socialist President of France say whether France would be likely to follow the barmy Labour policy of one-sided nuclear disarmament?
The Prime Minister: As I said, Heads of State and Government broadly endorsed the stance that we took at Camp David. Eleven of the 12 of us at the meeting are members of NATO. There was a NATO communiqué to that effect last week.
Mr. William Cash: Does my right hon. Friend accept that some Conservative Members resent the way in which the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) dismissed her statement as being a series of platitudes, especially as the right hon. Gentleman has been given recently to using adjectives rather than policies in his statements? Does my right hon. Friend accept that there are those of us who believe that the improvement of small businesses in the Community, combined with the policies that the Government have been following, will provide an engine of wealth—a point which Labour Members do not seem to understand at all?
The Prime Minister: I am grateful to my hon. Friend. Of course, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) had to say that because he has nothing constructive to offer.
Mr. Colin Shepherd: Did my right hon. Friend notice that, in the debate on the Loyal Address, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) made what seemed to many of us to be a constructive suggestion, in that he argued for the repatriation of the CAP? He did that as a Member who has supported membership of the Community. Is that not a suggestion which the Government should consider carefully and which we could argue forcefully in the Council?
The Prime Minister: Doubtless that will be one of the proposals put forward. Before we launch into putting it forward, or even supporting it, we should look at the considerable financial burdens that it would impose on our Exchequer. That is why I am glad that Mr. Delors is going to each capital with a series of options. The financial and other consequences should be worked out before people rush into their own methods of dealing with the problem.
Mr. Hattersley: In an answer a few minutes ago, which did not suffer from over-precision, the Prime Minister said that she did not believe in a supplementary budget. Will she tell us precisely whether that means that she hopes that there will not be a supplementary budget, or whether it means that she judges that there will not be a supplementary budget? If it means the latter, how does she think the Community can fund the £3 billion deficit which it will face by next spring?
The Prime Minister: I said that the 1·4 per cent. VAT cannot go up without the agreement of all Heads of State and Government and of all Parliaments. I was not going to rule out absolutely a supplementary budget, for the reason that I gave—it could be highly damaging to Britain. [Interruption.] So the right hon. Member for Sparkbrook wants us to do something highly damaging to Britain. I see. It might mean that we should not get our rebates or that they would be held up and carried forward. The rebates are of enormous value—they are worth

33
about £1·1 billion. The Government think that it might be worth while getting them and that we should not take a specific position on that matter right now.

Rosyth Dockyard
4.16 pm
Mr. Gordon Brown: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"decisions threatening 1,300 jobs and future naval work at the Rosyth dockyard."
The matter is specific because, on Friday, without prior consultation and without explanation or justification, the Ministry of Defence announced the transfer of refitting work on the submarine Conqueror from the royal dockyard at Rosyth, thereby depriving the site of vital programmed work and threatening the security of hundreds of jobs. The day before, with equal disregard for their obligations to consult, Ministers announced at a press conference, instead of in the House, that Babcock Thorn was to take over the private running of the Rosyth dockyard, thereby betraying a promise made on 17 November that no further decisions on privatisation would be made until the work force had been consulted.
The matter is important because these announcements, taken together, will, if implemented, unilaterally impose new working conditions on 6,000 civil servants forcibly transferred to the private sector, will threaten up to 1,300 jobs in an area of ever-increasing unemployment and will put at risk the dockyard's service to the nation. The House is entitled to know the secret details of private contracts which are being entered into to transfer work and jobs from Rosyth.
The matter is also important because decisions are being made by the Ministry of Defence which bypass the statutory consultation process imposed by the Dockyard Services Act 1986 and explicitly accepted by the Secretary of State for Defence only a few days ago, when he stated that the next stage of decision-making would not be entered until he was satisfied that consultation with the work force was complete. What sort of consultation is it that begins with the disclosure of the conclusions of that consultation and completely pre-empts it? In approaching a period of open consultation with all the prejudices of a closed mind, and without even reporting to the House, the Ministry of Defence is recklessly imposing franchise arrangements, privatising the running of our royal dockyards, which clearly subordinate the interests of national security to those of commercial gain. The Secretary of State for Defence has acted in a hasty an underhand manner to the detriment of the long-term interests of the Navy and the defence of this country. He should be forced to answer immediately in the House.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"decisions threatening 1,300 jobs and future naval work at the Rosyth dockyard."
I have listened with care to the hon. Member, but I regret that I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 20 and I cannot, therefore, submit his application to the House. However, I hope that he will have other opportunities to raise this matter before the Christmas recess.

Buchanan Bottling Plant
4.19 pm
Mr. Tom Clarke: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the closure of the Buchanan Bottling Plant at Stepps and the consequences for the whisky industry and the Scottish economy."
On Friday afternoon, 430 people in Scotland who worked in the whisky industry were given notice that they were about to lose their jobs. That came as a consequence of the Guinness takeover of Distillers Company Ltd, which includes the James Buchanan plant in my constituency, to which I referred earlier. Those of my constituents who might be made aware of the Prime Minister's reply to my question earlier will not only be profoundly disappointed at her reply but will be aware that we have a Prime Minister who does not really understand the problems of manufacturing industry in Scotland.
This morning I met men and women from that plant who had given many years of service to this industry, and they have been greatly disappointed by the decision. They know about the industry, and even in recent weeks were asked to work overtime for exports. They have been working to contribute towards orders for Venezuela and elsewhere.
Incidentally, it will come as no surprise to you, Mr. Speaker, or to the House, to learn that these men and women produce the whisky which, for many years—suitably labeled—has been sold in the Refreshment Department of the House. I, for one, have never heard any complaints about the quality of that whisky.
Like so many others, these men and women are finding themselves forced on the the scrap heap. There are a
36
number of questions that they would like me to ask and which might be raised if we were to have a full debate on the subject. We want to know the role of the Secretary of State for Scotland. Hon. Members will remember that during our debate in the Scottish Grand Committee in July, the Secretary of State encouraged his hon. Friend the Member for Eastwood (Mr. Stewart) to make a statement. The right hon. Gentleman rushed in to have discussions with Mr. Saunders on two top executive posts on the board of Guinness. If that intevention was important enough for those two senior posts, why is not the Secretary of State rushing in to save hundreds of jobs in my constituency and elsewhere in Scotland—[Interruption.] I am delighted that thee is so much agreement on Tory Benches.
My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and I have witnessed a catalogue of closures in our constituencies—Martin and Black, Ladybird, Bedley Colliery, the Gartcosh plant, Cardowan colliery and now this major closure. We must have a debate because the Scottish people in our constituencies are becoming sick and tired of the decline of our manufacturing base and they think that enough is enough.
Mr. Speaker: The hon. Member has asked leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the closure of the Buchanan Bottling Plant at Stepps in the Monklands, West constituency."
Here again I have to tell the hon. Gentleman what I told his right hon. and learned Friend the Member for Monklands, East (Mr. Smith). I listened with care to what the hon. Gentleman said, but I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 20. I cannot, therefore, submit his application to the House.

Ministerial Statements
4.23 pm
Mr. David Winnick: On a point of order, Mr. Speaker. As I understand it, you deprecate the custom of Ministers giving information outside the House before it is given here. Last Thursday, the Prime Minister stated that she could not comment about Lord Rothschild. She reminded my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), that when he was a Minister, he said:
"It is the long-established practice of this House that the Government do not comment on matters of this kind."—[Official Report, 28 July 1976; Vol. 916, c. 626.]
My point of order is that the Prime Minister refused to give information to the House on Thursday and made no statement to the House on Friday, yet a statement was issued to the press — from which we obtained our information. The Prime Minister refused to give information to a number of hon. Members, including Conservative Members, and it is wrong that she should take the opportunity the following day to make a statement outside the House. Either she should have answered on Thursday or she should have made a statement on Friday or today.
I ask you to rule, Mr. Speaker, on the practice followed by the Prime Minister, because it was against your direct wishes and you have deprecated such practices.
Mr. Speaker: I do not have the appropriate Hansard before me. My recollection is that the Prime Minister said on Thursday that she was not yet ready to give a reply.

EUROPEAN COMMUNITY DOCUMENTS
Ordered,
That European Community Document No. 11216/85 on the prevention of environmental pollution by asbestos be referred to a Standing Committee on European Community Documents.
That European Community Document No. 8034/86 on the co-ordination of procedures on the award of public supply contracts be referred to a Standing Committee on European Community Documents.—[Mr. Peter Lloyd.]

Orders of the Day

  Teachers' Pay and Conditions Bill
  Mr. Speaker: Before I call the Secretary of State for Education and Science, I must tell the House that I have selected the reasoned amendment in the name of the leader of the Liberal party.
  4.25 pm
  The Secretary of State for Education and Science (Mr. Kenneth Baker): I beg to move, That the Bill be now read a Second time.
  In what might prove to be a reasonably controversial Bill there will be some agreement at the outset on both sides of the House when I say that the education of our children is critical to the future economic and social well-being of our nation. It is equally important to the personal development of the child. It instils wonder and curiosity about the natural world, it fosters appreciation of great literature, poetry, drama, art and music and it develops a personal sense of values in things moral and ethical. It prepares young people for life in an increasingly complex world, where adaptability, co-operation and communication are vital for personal fulfilment and the progress of our society.
  Poor education or time lost to education is a great handicap. Some lost opportunities may be recovered to some extent by determination and hard work in adolescence or young adult life, but for many children an indifferent education or a blighted spell of education is an irrecoverable loss. Those school days have gone and do not return for a second chance, Alas, children have been badly affected by the recent year's discord over teachers' pay and the matching failure to deliver uninterrupted education of the right quality.
  I believe that the disruption of education and its impact on our children has been very damaging indeed. It was unjustifiable and I would hold that it was also avoidable, had there been a general willingness to move forward on any reasonable basis. Sadly, that has proved not to be the case. Instead, the machinery that should have provided resolution lurched from crisis to crisis. In the meantime, our children lost out—[Interruption.] I will come to the history of that later.
  The Government have watched all that with increasing concern, and I have been conscious of my duty to promote the education of our children and
  "to secure the effective execution by local authorities,
  under my
  "control and direction, of the national policy for providing a varied and comprehensive educational service in every area."
  That is the language of the opening section of the 1944 Education Act—the "Butler Act". The House will note that it speaks not of powers, but of a duty. This Government accepts that duty, without qualification. Today I seek the support of this House for changes that are essential to the effective delivery of school education in the months and years ahead.
  We must have resolution of the problems of our schools. We must have that resolution on terms that promise an early return to past standards of commitment and professionalism among all teachers. The terms must

  39
  be fair to teachers, many of whom will have had grave private misgivings about the events of the last few years. However, the terms must also be fair to others, to the parents, taxpayers and ratepayers who finance our schools. They will accept a generous settlement for teachers in return for an improved education service. They will not understand special treatment for teachers' pay on any other terms. Nor are the Government willing to give that.
  The Bill itself is straightforward. I must, of course, explain the history and present context and the Government's reasons for the main provisions of the Bill.
  The first clause repeals the Remuneration of Teachers Act 1965 under which the two present Burnham committees operate. One deals with school teachers' pay, the other with that of teachers in further education. Neither deals with duties and other conditions of service. It is clearly a major defect that pay and conditions of service are dealt with separately. Clearly, the friendless Burnham committees must go. New arrangements have to be introduced to settle both pay and the job for which that pay is given. A look at recent history makes it clear that the Burnham primary and secondary committee is beset with difficulties. There is a long tradition of internecine warfare amongst the teacher unions, with bitter membership rivalries getting in the way of sensible compromise. There has been a High Court action over the rights of all unions in membership of Burnham to participate fully and equally in the committee's work and there has been repeated failure to reach negotiated settlements.
  Present attempts to reform the outdated salary structure have a long and, I regret to say, undistinguished history. In 1981 a Burnham agreement established a joint working party to review the salary structure of the profession. This has been going on for five years and we are still some way from a negotiated settlement. On teachers' duties and conditions there have been genuine attempts over a still longer period by the local authority employers to make headway with the definition of teachers' duties and conditions of work. No real progress was made until this year. The teacher unions continue to claim that many aspects of the teachers' job were voluntary and that those contributions could be withdrawn at any time. We well know the effect on our schools. A High Court judgment—the Scott judgment—this summer began to clear the air. It made it clear that teachers could be required to cover for absent colleagues even though there was no such express provision in their contracts. The employers remain concerned to secure a satisfactory and enforceable contract. I welcome that. A considerable gain—and this I recognise—from the ACAS-led discussions in recent months is the emerging definition of teachers' duties and working time at the direction of the head teacher.
  The draft package also has great weaknesses. It proposes a flat and undifferentiated pay structure which provides minimal incentives and gives the biggest increases to the least experienced teachers. We must have proper differentials—to reward good classroom teaching and extra responsibility, to pay for skills in short supply and to give school management enough flexibility to attract good teachers to posts in difficult schools, perhaps in the inner cities. The structure which the employers and some
  40
  of the unions now seem to favour would cost well beyond the amount that I announced to the House on 30 October. That amount was a very generous sum—£118 million this year and £490 million next year. The excess cost of the ACAS deal would be some £85 million over these two years alone. That is not a small sum—it represents a quarter of our annual expenditure on school books and equipment and it would provide about 100 new primary schools.
  The Government therefore have two major difficulties with what is proposed. I have said, and I shall continue to say, that I am willing to discuss the position with the other parties. As regards the settlement, my door remains open. I very much hope that an improved and affordable package can be arrived at quite soon.
  I should like briefly to consider the long and rather miserable history of this. As I have said, the Burnham agreement to reform the salary structure was established in 1981, but there was no progress until July 1984 when my predecessor said that if an "affordable, acceptable and negotiable" package could be agreed between local authorities and unions he would take it to Cabinet for consideration. In November 1984, the employers unfolded a package linking pay and duties. The following month the National Union of Teachers walked out of the talks. In July 1985, the employers—Labour-controlled since the May elections—tore up the concordat. In August 1985, my predecessor affered a substantial sum—£1·25 billion over four years—for a new deal defining duties and providing for more promotions. A month later, the employers made an offer consistent with that. It was unanimously backed by all the employers and by the Government, but the teachers turned it down flat in 20 minutes.
  In January 1986, there was agreement to call in ACAS after a term of disruption. The NUT—no longer in control of the teachers panel—did not sign, but came into the ACAS-led talks. In July 1986 the Coventry negotiations led to heads of agreement signed by five unions but not by the National Association of Schoolmasters/Union of Women Teachers. That was hailed as "historic". On 30 October I made a statement setting out the Government's conditions, promising a huge amount of extra money and outlining the pay structure that we regarded as necessary to reward good teachers. Seven days of negotiations in Nottingham and London followed in November. On 21 November an agreement was signed by four unions. On this occasion, the National Association of Head Teachers as well as the NAS/UWT did not sign. Since then, the Secondary Heads Association and the Professional Association of Teachers have said that they do not support that agreement.
  The hon. Member for Durham, North (Mr. Radice) wrote to me on 17 November urging me to accept the ACAS agreement and advising me that the ACAS deal would stick. Once again, his judgment has been proved wrong. I have been told at almost every stage of the negotiations that the agreement in question was "historic". There was a "historic" agreement in July and another in November. I can only say that there seems to be a long history of historic agreements.
  Mr. Giles Radice: We might have achieved an agreement if the Secretary of State had not sought to undermine it at every stage.
  Mr. Baker: Providing an extra £600 million, an extra £2·4 billion over four years and £3·3 billion over five years, can scarcely be described as undermining. We have provided the necessary sums that should have led to an agreement.
  Mr. Tony Marlow: My right hon. Friend has said that he hopes that a new and affordable package will come forward. For the avoidance of ambiguity, will he confirm that that package must be within the financial constraints that he has set out?
  Mr. Baker: Yes, I made that clear on 30 October and again on 27 November in statements to the House and I confirm it again today. Any change must be within the cost that I have set out—some £600 million for this year and next year taken together. The teachers have never before been offered such a substantial sum and I believe that it is an entirely reasonable figure when one considers all the other demands on the public purse. General expenditure and budgets for education have been expanded by a huge amount for next year. The unprecedented size of that amount shows the importance that we attach to education and it would be unfair to go back and ask for more.
  Mr. Nigel Spearing: The Secretary of State described the long period of difficulties, but he said that the Burnham committee was not concerned with conditions. Does he deny that in 1981 and 1984 his predecessor's insistence on mixing pay increases with conditions of employment, especially assessment, caused difficulties?
  Mr. Baker: In 1981 there was a Burnham agreement to reform the salary structure. As soon as one gets into that, one gets into pay and conditions. A very substantial increase was involved for which it would be necessary to define the teachers' jobs. As I have generously recognised, that is one of the benefits to come out of the ACAS deal. It will be a tremendous help because the definition of teachers' jobs will mean that teachers will know what is expected of them and head teachers and parents will know what they can expect of the teachers. I think that there is common agreement that that is a major step forward.
  Mr. Radice: So the ACAS agreement was a step forward?
  Mr. Baker: Yes, in the matter of definition of teachers' jobs. I have said that many times.
  I shall now say what has happened since the signing of the agreement. On 27 November, I clarified the Government's position on the ACAS agreement. It was not acceptable as it stood. On 5 December, last Friday, the Secondary Heads Association council rejected it unanimously so support for the agreement was down to three unions. On 6 December, last Saturday, the Professional Association of Teachers withdrew its support. Support for the ACAS agreement is down to two unions. I am sorry that this information could not have been more accurately described in the advertisement which the NUT placed in some of the national newspapers today. The copy is rather inaccurate as it states that the settlement is acceptble to the employers, the local authorities and also to the majority of teachers' unions. The settlement is clearly not acceptable to the majority of teachers' unions. The only thing that the NUT has got right in the
  42
  advertisement is the spelling of my name. It is clear from what I have said that the employers are divided and that the unions are divided.
  The long dreary history of the negotiations and the attendant disruption to children's education mean that I cannot stand by and trust that all will come right in the end and that peace will return to our schools, as has so often been promised in recent so-called agreements. Sporadic disruption of children's schooling continues. Parents have had enough. The public rightly expect a further 16·4 per cent. on teachers' pay, making 25 per cent. in all for the 18 months to October next, to achieve stability and agreement on a workable contract which will prevent repetition of trouble in the future. Employer-union bargaining—that is effectively what we have been watching at work recently—has failed our schools. The Government are not willing to rely exclusively on that process. That is why the Bill proposes an interim advisory committee to advise me on these matters, and powers for me to act following its advice, subject, of course, to parliamentary approval.
  The House will note that the Bill does not propose that the interim advisory committee should also deal with further education matters. That is because there is not a parallel position in that sector. There has been no major disruption; a defined statement of teachers' duties already exists; and the bargaining process has been more successful in striking agreements than has been the equivalent school teachers' machinery. The Government are content that these matters should be settled between employers and unions for further education. Not so for our schools. There, early action is essential.
  Mr. Kenneth Carlisle: Is my right hon. Friend also aware that many teachers in the profession wish to do a good job and welcome his initiative to bring an end to this damaging dispute? Does he further recognise that they welcome the opportunity to have a proper professional code which they can follow and that they recognise that the money on offer is very generous?
  Mr. Baker: I can certainly confirm what my hon. Friend has said. I am sure that many teachers, irrespective of where they stand on this issue, want an end to what has been happening in schools during the past few years. Those who have been dragooned into disruption have done it often with a heavy heart. The definition of a professional code is important. As I said, that is a step forward, as is the money on the table.
  Mr. Martin Flannery: The Minister talks as though only a minority was ready to take some industrial action, but surely he knows that the NUT carried out to the letter no fewer than 17 or 18 ballots, every one of which approached 80 per cent? Therefore, the vast majority of teachers wanted to take industrial action. The Minister does less than justice to what some of us must say later about industrial action by not telling the House the truth.
  Mr. Baker: I hope that whatever else the hon. Gentleman may say about industrial action, he will utterly condemn it. I believe that he is a member of the NUT. Let me make it absolutely clear that industrial action can happen in our schools only at the direction of trade union leaders. I very much hope that as the hon. Gentleman is

  43
  a leading member of the NUT, he will lend his voice, if it should ever come to it, to condemning very strongly any further consideration of disruption.
  Many working parents in Britain, who will not see an increase of 25 per cent. in wages this year or next year, are very fed up when they see professional people walking out of the schools leaving children to go home and be looked after by their aunts or their grandmothers or their grandfathers. That is unacceptable behaviour. I dare say that if those children are looked after by their grandmothers or grandfathers, those pensioners will reflect that some teachers will receive a weekly increase in wages of £60 or £75 a week, which is higher than their pensions.
  The House will note that the Bill does not seek to establish new arrangements on a permanent basis. What should apply beyond the medium term is left for the future. The Bill proposes that the advisory committee should be established on an interim basis only — until 1990—though with powers for its life to be extended on a year-by-year basis, if Parliament then agrees.
  The Bill provides for full consultation with local authorities and teacher unions. Clause 2(4) deals with notice and invitations to both to submit evidence and representations. Clause 3(1) requires the holder of my office to consult local authorities and teacher unions before any action consequent on a report from the advisory committee is taken. The House's concern about these matters is also fully recognised. All orders are to be subject to the negative resolution procedure and any order which materially departs from the advice of the advisory committee must be approved by resolution of both Houses of Parliament.
  But the Government must act to ensure that the sort of negotiating brawl which we have all so clearly seen in the last two years is brought to a swift end. We must act to establish a new mechanism for determining these matters, on an interim basis.
  If an accommodation with all the parties can be achieved within the financial framework I have already announced and which provides for a proper career structure for all teachers, I shall be delighted to lay the necessary order before the House giving effect to that agreement. But the House must be in no doubt about the Government's determination to act to close this sorry business.
  May I come to the central issue of the powers of the Secretary of State. Since 1944, Governments have influenced the teachers' pay structure and contained pay costs. From 1965, a concordat operated in parallel with the legal provisions of the Remuneration of Teachers Act. That gave the Government a weighted vote within the management panel and a power of veto over proposed offers on grounds of total cost. Lord Stewart of Fulham, the then Secretary of State, said in Committee on 1 December 1964, during the passage of the 1965 Act:
  "I doubt whether any Government in any set of circumstances could put itself in a position where it could hand over the power on the global sum to someone other than itself."—[Official Report, Standing Committee B;1 December 1964, c. 20.]
  Mr. Andrew F. Bennett: Will the Minister give way?
  Mr. Baker: No.
  44
  Just so. But, in 1985, the Labour-led employers unilaterally scrapped the concordat—
  Mr. Bennett: Will the Minister give way on that point?
  Mr. Baker: I shall not give way. I quoted Lord Stewart of Fulham. I made the point that Lord Stewart was saying that no Government in any circumstances could resign responsibility for the total amount. I have been pressed again and again—
  Mr. Bennett: Does the Minister accept that Lord Stewart and the present Lord Chancellor, in dealing with the previous Bill, made it clear that there was the question of national interest, but both categorically stated that they would not interfere with detailed negotiations?
  Mr. Baker: That is what I was just saying. The very reason why they said that was to set up the Burnham negotiating committees. For 20 years, and specifically for the past five years, the Burnham negotiating committees have produced no resolution on this matter. They have utterly failed to deal with the details. They cannot do it. That is the tragedy facing the country in the negotiations.
  In 1985, the Labour-led employers unilaterally scrapped the concordat, leaving the Government with greatly reduced influence. The Bill re-establishes an appropriate role for the Secretary of State in the determination of teachers' pay and links that with duties and conditions. It does not seek to set a system for all time. Instead, it addresses itself to the immediate crisis facing us, which arises directly from the breakdown in the present negotiating machinery.
  I trust that the House will welcome the Bill. It reflects the Government's underlying responsibility and concern for the well-being of the school system on which our children and our future so much depend.
  4.50 pm
  Mr. Giles Radice: Speaking in the House on 27 November, the day before the Bill was introduced, I made it clear that although the labour party is in favour of reform of the Burnham machinery, we strongly oppose legislation that removes bargaining rights. We also strongly oppose any attempt by the Secretary of State to impose a settlement either now or in the future. Having had the opportunity to study the Bill and to hear what the Secretary of State has had to say about it, our worst fears have been confirmed. The so-called Teachers' pay and Conditions Bill gives the Secretary of State new and sweeping powers to impose a settlement in the period from 1 April 1986 to the end of September 1987 and after the advisory committee is set up, in the first period by negative resolution and in the second period by affirmative resolution. Equally disturbing, it removes the ability of local authorities and teachers' organisations to negotiate at all about teachers' pay and conditions.
  After two years of disruption in the schools, I hope that the whole House can agree that our objectives should be, first, an improved service for pupils, secondly, decent pay and conditions for teachers and, above all, long-term peace and stability in our schools. One argument against the Bill is that it will make those objectives far more difficult to achieve—[HON. MEMBERS: "Why?"'] Wait for it, and I will tell hon. Members.
  Ironically, the immediate background against which this potentially damaging bill is introduced is more promising that it has been for several years. First, the

  45
  general public is devoting far more attention to education. This is partly because of the teachers' dispute. Parents are desperately anxious for a long-term settlement of the issue and all of us, including the Secretary of State, have an obligation to ensure that that is achieved.
  Secondly, the Government have at last switched policy over teachers' pay. After arguing ad nauseum that the nation simply could not afford significantly improved teachers' pay-we heard that in the House for two years—the Secretary of State came to the House on 30 October and announced that, after all, resources were available. If money on that scale had been offered in the autumn of 1984—let us not have so much selective quoting of history—there would never have been a teachers' dispute. However, late though it is, the Government's new-found willingness to fund a reasonable settlement creates the possibility of settling the issue.
  The third encouraging feature is that the local authority employers and unions representing the majority of teachers have agreed on a far-reaching package covering pay and conditions. Even the Secretary of State, albeit reluctantly, has had to admit that the talks have made useful progress. That must be the understatement of the year. For the first time, there is a clear definition of teachers' duties. For the first time, a minimum number of duties days has been agreed. For the first time, a system of appraisal has been accepted. For the first time, maximum class size has been defined. For the first time, negotiating machinery which links pay and conditions has been agreed.
  The Secretary of State made much of the differences between his proposals and the package agreed between the employers and the teachers. But if he is honest with himself and with the House, he knows perfectly well that if the will was there, not least on his part, those differences would be easily surmounted. The Secretary of State talked a great deal about fundamental differences in the pay structure. It is true that the local authority package envisages only two increases above the main professional grade compared with five in the right hon. Gentleman's proposals. His more hierachical solution would appear to produce as many chiefs as it does Indians. He should remember that, as well as providing opportunities for promotion, an effective pay structure must offer career salaries to classroom teachers.
  Be that as it may, I remind the Secretary of State that the original claim by the National Union of Teachers envisaged three increments. A Secretary of State who was interested in a settlement should be able to reconcile those relatively small differences.
  Mr. Stephen Dorrell: The hon. Gentleman said that it was important that whatever came out of this dispute rewarded classroom teachers. Is he aware that the proposals of the unions and the council employers would produce a 25 per cent. reduction in the number of teachers who receive special incentives to remain on the classroom? It can be seen in the bar graph. How does his stated priority square with his support for the stance of the NUT?
  Mr. Radice: It squares because the main professional grade is sufficiently high to encourage teachers to stay in the classroom. That must be part of any effective pay structure. Different groups can argue about how many increments there should be. That is a matter for
  46
  negotiation and argument. All that I am saying is that it should not be beyond the wit of the Secretary of State and the negotiators—the local authorities and the teachers—to reconcile their positions. I hope that the hon. Gentleman agrees with that.
  Mr. Kenneth Baker: If I may refer to my bar charts, of which the hon. Gentleman has a copy—
  Mr. Andrew F. Bennett: We got them in the Vote Office.
  Mr. Kenneth Baker: Of course. I always want to spread good information.
  How can the hon. Gentleman defend the ACAS proposals, which provide only 80,000 promotion posts, when there are already 105,000 in the system? I want the number to increase to 140,000 or 145,000. The general feeling in the profession at central and local level is that we cannot run the education system with 80,000 promotion posts.
  Mr. Radice: As the Secretary of State knows, the attraction of the agreement made between the employers and unions representing the majority of the teachers is that it provides a high basic level. That is very important if we are to attract the right people into teaching. Of course, it is also important to have adequate promotion scales. All that I am saying is that it should have been possible to reconcile the two positions, because that is exactly what a proper pay structure should have.
  On cost, again there is no unbridgeable divide. I hope that the Secretary of State will not go on about that. He is well aware that a month's delay in implementation saves at least £40 million. It is not an unbridgeable gap, as the Secretary of State suggests. The truth is that if the right hon. Gentleman wants an agreed package, one is there for the asking. Our fear is that the Bill will scupper the prospect of an agreed solution and will make long-term peace in our schools far harder to achieve.
  On 27 November in a reply to my question as to whether the Bill would enable the Secretary of State to impose a settlement he answered that it would give him powers similar to those he already has. On reflection, he would, I am sure, admit that his answer was, at best, "economical with the truth."
  Under the Remuneration of Teachers Act 1965 the Secretary of State has the power not to impose a settlement but only to set an arbitration award, and then only after the affirmative resolution of both Houses of Parliament. If there is an agreement within the Burnham committee the Secretary of State must accept it. I suspect that that is one of the reasons why the Government are so anxious to rush the Bill through the House.
  Under section 89 of the Education Act 1944 Ministers could only accept or reject Burnham recommendations. What is being proposed in the Bill are powers for the Secretary of State to impose his solution, without negotiation and irrespective of what his advisory committee suggests.
  Mr. Tony Baldry rose—
  Mr. Radice: No, I will not give way. I must get on. I will give way when I want to. The Secretary of State must admit that the Bill gives him exceptional powers. He has actually said that he is taking Draconian powers.—[Interruption.] That is what the Secretary of State said in an interview. The only precedent is the Remuneration of Teachers Act 1965 when another Tory education Minister

  47
  took power to impose a settlement. That was only for a single year not for four years. Significantly, that Bill did not seek, as this Bill does, to take away negotiation rights altogether.
  Mr. Martin M. Brandon-Bravo: I put to the hon. Gentleman that the public outside will not understand a situation whereby two groups of people come to an agreement—I use his words rather than mine—that is to be paid for by a third party which is not involved in that so-called agreement. Surely, that is the nub of this problem and it is something that ought to be resolved.
  Mr. Radice: It is true that the Secretary of State pays 46 per cent. of the total amount of teachers' pay but the majority is paid for through the rates of local autorities. The hon. Gentleman ought to get his facts correct.
  I shall argue that the Secretary of State ought to have a proper position at the negotiating table but that is not a reason for taking away negotiating rights altogether. We are opposed in principle to what the Secretary of State can do under the Bill. I shall return to the issue of principle in a few moments.
  I know that the Secretary of State sees himself as a pragmatist. He justifies his legislation in terms of the exigencies of the moment. He claims he must take such powers to restore order to our schools. The truth is that there is already the outline of an agreed solution that could bring peace. The danger is that this imposed settlement could lead to renewed disruption.
  The Secretary of State will have seen the letter sent to him, on Friday, by the four main teachers' unions which expressed their total opposition to the Bill and to the imposed settlement. If he will not listen to them he should take the advice of some of his more knowledgable Back Benchers who are alarmed by the consequences of the decision, particularly in a run-up to the General Election—[HON. MEMBERS: "Who are they?"] I will not embarass the hon. Members by saying their names, but I could. Those Back Benchers are aware that a settlement, freely agreed between the education partners, is likely to lead to a long-term peace. They fear that a solution imposed unilaterally by the Secretary of State would almost certainly result in continued disruption. The Secretary of State should think again before he uses his powers.
  Mr. Patrick Thompson rose—
  Mr. Radice: No, I will not give way.
  The Bill not only gives the Secretary of State powers to impose a settlement, it takes away the long-established bargaining rights of employers and teachers. The Secretary of State's justification for this—
  Mr. Thompson rose—
  Mr. Radice: No, I will not give way. I have given way just as much as the Secretary of State.
  The Secretary of State's justification for the un-precedented removal of basic rights is that the Burnham structure has failed. If it is the case that Burnham has failed, the Government who took over two years to come up with a reasonable sum of money to meet the teachers' claim, must bear at least part of the blame. Of course, we accept that reforms are needed. Pay and conditions must
  48
  be considered together and not separately as in the past. We also believe that the Secretary of State's position at the negotiating table should be secure.
  Under this Administration central Government have contributed significantly less to education expenditure. Even so, the Departmemt still pays over 45 per cent of teachers' salaries and therefore it should be properly represented at negotiations. But it is one thing to advocate the reform of Burnham. It is a breath-taking leap in logic to go on to argue that collective bargaining should be abolished altogether and replaced by ministerial diktat.
  Mr. Thompson rose—
  Mr. Radice: Yes, I will give way.
  Mr. Thompson: The hon. Gentleman at the beginning of his speech-he has repeated it—said that he wished to reform Burnham. Why does he wish to reform it, and when would he do so?
  Mr. Radice: When we get to power we shall certainly set up a negotiating structure that considers both pay and conditions, as has the ACAS agreement. We should also want to see Government properly represented at those negotiations bearing in mind that they pay 46 per cent of teachers' salaries. The whole point of this Bill is different. I ask hon. Members to consider the impact of the Bill as we did not hear anything about it from the Secretary of State. It removes the bargaining rights of employers and teachers except in those situations where the Secretary of State determines otherwise. The advisory body, which will consider teachers' pay and conditions under the Bill, has been appointed by the Secretary of State. It will be paid by the Secretary of State and its agenda will be set by him. He can turn down or modify the advisory committee's conclusions without having to publish them. Provided that the Secretary of State wins the support of Parliament he can impose his own settlement. In short the advisory committee will be the Secretary of State's poodle. The Secretary of State can, by order,—[Interruption.] Conservative Members may not like hearing the truth, but it might pay them to listen.
  The Secretary of State can, by order, make different provisions for different areas including different provisions for different areas. That does not say much for the idea of professional salaries. The Government also have the power, by order, to oblige local authorities to impose on teachers through their contract of employment, conditions of service which the Secretary of State has unilaterally determined. [Interruption.] This is the truth.
  It is extraordinary that once the Bill comes into force 400,000 teachers will have fewer rights than any other group of public servants. [HON. MEMBERS: "Rubbish."] Just listen. Civil servants at least have the Whitley council machinery whereas teachers' unions will have no bargaining machinery. The nurses, doctors and armed forces have independent review bodies which regularly publish reports on pay, but the teachers will not have that.
  There is at least a prima facie case for saying that the Secretary of State's Bill contravenes articles 7 and 8 of ILO convention No. 151 on the rights of public employees—a convention that was ratified by the Government. It certainly contravenes article 4 of ILO convention No. 98 as well as article 6 of the European Social Charter. Are the Government really saying that they so mistrust teachers

  49
  that, uniquely, the teachers are to be deprived of bargaining rights even if to do so contravenes international and European convention law?
  I cannot understand why the Government and the Secretary of State will not accept the proposals for the reform of bargaining machinery put forward by the employers and teachers. Contrary to what the Secretary of State told the House on 27 November, these proposals are different from Burnham because, under the new machinery, pay and conditions will be discussed together and the role of the Secretary of State will also be properly recognised. The Government accept that bargaining on these lines works well for teachers in further education. Presumably that is why that arrangement will not be abolished by the Bill.
  Mr. Patrick Thompson rose—
  Mr. Radice: I am sorry, but I will not give way.
  If machinery such as that works well for teachers in further education, why should it not work equally well for teachers generally? If the Secretary of State is to carry conviction on this point, he will have to answer the question.
  Although the Secretary of State seeks to appear as broad-minded and responsive—[HON. MEMBERS: "Hear, hear."]—his track record casts very serious doubts on the image that he seeks to present. After all, he is the Minister who abolished the GLC and deprived whole communities of their democratic rights. In this Bill he is depriving teachers of bargaining rights and imposing a system of ministerial diktat. These are hardly the actions of a convinced libertarian or of someone who respects the views of others. The truth is that behind the smiling mask lurks an opportunist who is prepared to do No. 10's bidding, even if it means infringing basic human rights.
  The Opposition believe that this Bill is dangerously authoritarian. It infringes basic rights. It gives to the Secretary of State an unacceptable power that he does not have in other respects. It will also make a long-term settlement of the teachers' dispute far harder to achieve. It is a thoroughly had Bill and we shall oppose it every inch of the way.
  5.12 pm
  Mr. David Evennett: I am pleased to be able to speak in this important debate, but I am sorry that the hon. Member for Durham, North (Mr. Radice) was so vague, emotive and irrelevant about the needs of education today.
  Despite the Bill's relative shortness, its importance must not be trivialised, as it has been by the hon. Member for Durham, North. The teachers' dispute over the level and structure of teachers' remuneration has been disrupting our schools for many months. Parents have been inconvenienced, children have missed valuable time from school, and education has suffered both in general and in particular.
  My right hon. Friend the Secretary of State is to be commended for introducing the Bill. He is taking decisive action on this vital issue and has shown that he believes in putting pupils and education first. I believe that the Bill will bring about the reforms needed for a sensible settlement to be reached, and I therefore welcome it warmly. I also believe that most parents will welcome it,
  50
  not only as a means of settling the dispute, but as part of the Government's programme to improve standards in education across the board.
  As a former teacher from pre-Houghton days, when teachers really were poorly paid, I know that teachers have some long-standing grievances. As a member of the Select Committee on Education, Science and the Arts, which recently investigated achievement in primary schools, I know how impressed I and other hon. Members were with the high standard of primary school teachers. I have no doubt that in the main secondary school teachers are just as committed.
  Teachers have been undervalued within our society, and their task is difficult because it involves more than just teaching academic skills. It is about fitting our children for their future and developing every individual to the maximum of his or her ability.
  This undervaluing of teachers has been apparent in the primary sector because in the past 20 years so much of the education debate and time have been devoted to secondary education. However, from my own experience I believe that in the main teachers are responsible and dedicated professionals. I am sorry that so many have been tarred with the brush of militancy and confrontation—an image which they do not deserve and have gained unfairly, in my opinion because of the lacklustre and ostrich-like approach of many of their union leaders.
  In fact, it is probably because there are so many different unions in the teaching profession that negotiations on vital issues such as pay and conditions have been so difficult to conclude in the recent past. I was particularly disappointed by the NUT advertisement in the national press to which the Secretary of State referred. I read that advertisement in the excellent new newspaper, The Independent, over my cornflakes this morning and almost choked at the inaccuracies within it. As a former member of the NUT, I was appalled at the advertisement and at the lack of professionalism by the union in putting it in the national press. I am sure that those parents and teachers who also read it will have been distressed and disgusted.
  Teachers have been underpaid in the past, and the need to redress that situation is something which the vast majority of parents, electors and everyone else in society will accept.
  Mr. William Cash: Does my hon. Friend accept that professionalism has been overtaken by unionism? Whereas in the past one could have relied upon the fact that professions would be governed by a chartered body which upheld standards of professionalism, the problem is that under the kind of dramatic unionism which we have seen recently, which puts remuneration above all else, the standard of professionalism has declined.
  Mr. Evennett: I fully agree with my hon. Friend. Professionalism in the teaching profession has declined in certain areas. I think that, every hon. Member regrets the fact that since the unions have taken over the negotiating, professionalism has to some extent gone out of the window.
  I believe that teachers are competent and that they deserve recognition and reward. All Conservative Members want to see teachers paid a decent salary for the important job that they do, but money is not everything.

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  Of course teachers need a certain level of remuneration and a decent rate of pay for the job. They want to be appreciated for what they do. However, the current dispute is not simply about pay levels—it is also about pay differentials and long-term career structure.
  We are all aware of the profession's failure to attract new entrants of high calibre in certain key sectors—mathematics, science and computing, to name but a few. Any pay settlement and agreement on conditions of service must not only be fair and balanced, but must ensure that sufficient numbers of high-calibre individuals are recruited as teachers. We must encourage people of a good standard to become teachers, including suitably qualified candidates from industry and commerce. We must also encourage the return of those who have left teaching. We need them back in the classroom.
  For any pay settlement to have a satisfactory effect in the short term, sufficient money must be made available to make it clear that this is not simply a "jam tomorrow" exercise, because we all know that people will say, "Tomorrow may never come." I warmly welcome my right hon. Friend's offer, which is on the table, which is not only a substantial amount in percentage terms, but is a substantial amount in real terms, amounting to £600 million.
  We must never forget the taxpayers. I regret that the hon. Member for Durham, North always seems to forget them. He said that the taxpayers foot only 45 per cent. of the bill, but 45 per cent. of the teachers' salary bill is a large sum of money by anybody's standards. We must not forget that we are responsible to the taxpayer for the money that is spent.
  Mrs. Elaine Kellett-Bowman: There is also the rate support grant, and the rest.
  Mr. Evennett: My hon. Friend rightly mentions the rate support grant and the rest. The figure of 45 per cent. represents only direct money. The indirect money involved is substantially more.
  Short-term improvements will be of no avail unless long-term improvements follow. The Government's suggestion is aimed at improving and maintaining standards in our schools by rewarding good classroom teachers. All my right hon. and hon. Friends are aware that at present too many good classroom teachers leave the classroom to get more money and are promoted to administrative jobs. That is the traditional way in which teachers have gone up the pay structure. The improvement in their remuneration has been dependent upon their leaving the classroom to go into administration. Too often, good teachers are promoted out of the classroom to do a job of administration, leaving the less good teachers in the classroom. That is the reverse of what we should like to see.
  Mr. Andrew F. Bennett: Does the hon. Gentleman accept that the big attraction of the ACAS agreement is that the long and well-paid general professional scale will not only attract teachers, but will keep them in the classroom? In his constituency, teachers will move away to get promotion because they cannot afford to stay on the basic scale that the Secretary of State proposes.
  Mr. Evenett: The contrary is true. The Secretary of State's proposal will allow more teachers to remain in the
  52
  classroom because they will earn more money for good classroom teaching. I regret that the ACAS proposal will mean fewer scale posts and less money for the better teachers, and more money at the introductory stage.
  We all know that many good teachers have left the classroom to go into managerial and other posts that are outside the profession. That is because the present pay scales do not take into account our need for good classroom teachers to remain in the classroom. In my experience—as a parent, a teacher, a school governor and a member for the local education authority—there have been too many moves into the City and into other administrative jobs outside education. A wealth of talent has been lost from the schools because there has not been an adequate pay structure. Therefore, we must go back to basics, and I welcome the pay structure that is suggested by the Secretary of State. The obvious way to change the position is to increase the number of scale or incentive posts and to enhance the pay for the teacher in the classroom.
  The recent agonising deliberations by the Burnham committee on teachers' conditions of pay and service have looked like a bad soap opera script on television, unfurling every night. I regret that its proposals mean a reduction in scale posts, which is the reverse of what is needed in the classroom at present. Its proposals are ridiculous, not only because about 25 per cent. of teachers would lose a promoted post next September, but because we are really looking for a career structure, and that, would require more incentives and more scale posts.
  During my time in the House I have been a great advocate of the abolition of the Burnham committee, bcause it is a relic of the past. What might have been good in the 1920s when society, the teaching profession and education were completely different, is not relevant today. Indeed, the Remuneration of Teachers Act 1965, which my right hon. Friend the Secretary of State is seeking to repeal by the Bill, was a measure to amend the constitution and procedures of the Burnham committee following disagreements about teachers' pay in the 1960s. It appears that some things never change, but we need change, and that is why the Bill is so welcome.
  Most people recognise the need for the Bill, because it deals with a problem that has dragged on for over two years. Despite the comments of the hon. Member for Durham, North, the problem would never have been solved had the present Secretary of State not been prepared to take decisive action. I regret that already in the debate we have heard that the Burnham committee was working, that eventually it would have got there, and that it would have taken just a little longer or a little more money. That is not so. The whole idea of the Houghton award was not that it should be a one-off pay increase for teachers, but that it was a start towards reappraising all aspects of teachers' pay and, ultimately, their conditions of service. However, for 10 years nothing was forthcoming about changes in conditions of service.
  We have waited for far too long and the Burnham committee has achieved far too little. The Bill, which abolishes Burnham and looks to implement a new approach to teachers' pay and conditions, will be welcomed not only by Conservative Members but by a vast number of teachers, by the vast majority of parents, and ultimately by those who have to be educated, the children of today, who will become the adults of tomorrow.
  5.27 pm
  Mr. Gordon Oakes: I hope that the hon. Member for Erith and Crayford (Mr. Evennett) will forgive me if I do not take up his points about the general state of the teaching profession or even the recent pay negotiations. I wish instead to discuss the Bill that has been dragged before the House today.
  Like you, Mr. Deputy Speaker, I have been a member of the House for over 22 years—we came in on the same day. In all that time I have never read a Bill with such breathtakingly arrogant contents. The arrogance of its contents is matched only by the arrogance of the Government in trying to railroad the Bill from this House to another place in a few days.
  In seven short clauses the Bill seeks to overturn all existing negotiating procedures, to abolish teachers' direct representation by trade unions in relation to their pay and conditions of service, and to abolish the rights of local authorities who, after all, are the teachers' employers, to have any effective say in their pay or even conditions of service. A Bill that does that singles out the teaching profession and enslaves teachers. If a profession, an industry or any body of people has no direct representation on its own terms and conditionss and has no direct say on conditions of work with its employers, that is a condition of slavery. Corresponding to that slavery is the tyrannical way in which the Secretary of State has, in the Bill, adopted unto himself absolute powers on pay and conditions.
  Mr. Cash: The right hon. Gentleman has made allegations about the tyrannical nature of the Bill. Conservative Members entirely repudiate them. The right hon. Gentleman also said that he is referring to the contents of the Bill. He is clearly referring to clause 3 and to the relationship between the advisory committee and the consultation procedures on the one hand, and to the order-making powers of the Secretary of State on the other. Does he accept that if the Secretary of State disagrees with the advisory committee, the import of clause 3 would be to require that any such arrangements emerging from an order laid by the Secretary of State were dealt with by way of affirmative resolution of both Houses of Parliament?
  Mr. Deputy Speaker (Mr. Harold Walker): Order. I should remind the House that hon. Members seeking to take part in the debate cannot have it both ways. They cannot make long interventions and then seek to catch my eye early in the debate.
  Mr. Oakes: As often happens, Mr. Deputy Speaker, it serves me right for giving way. I assure the hon. Member for Stafford (Mr. Cash) that I challenge not only clause 3 but many of the clauses. I assure the hon. Gentleman, in my own time, in my speech, I shall seek to answer his points.
  The Bill singles out teachers. I beg other local government trade unions to support teachers in their struggle against the measure, whether it is the National Union of Public Employees, the National and Local Government Officers Association, the General, Municipal Boilermakers and Allied Trades Union or my own Transport and General Workers Union. If the measure goes through, I have no doubt that the Government will seek, in other spheres of local government, to introduce
  54
  similar measures that will deny the right of those trade unions to negotiate with the local authorities which, after all, are their employers.
  Let us look at some of the things that the Bill seeks to do. Clause 2 and schedule 1 set up what the Secretary of State calls the interim committee—the Bill refers to the advisory committee. The Secretary of State alone appoints the chairman and the deputy chairman, and every member of that committee. That is his sole discretion and choice. Where in schedule 2 or anywhere else in the Bill is there a reference to the qualifications of those people? Should they be qualified in educational matters? Should they be qualified and experienced in local government procedures? Should they be trade unionists? Should they have knowledge of trade union negotiations? Not a word about that appears in the Bill. Under the Bill, which we are being asked to approve, the Secretary of State, if he so wished, could stuff that committee with his own political cronies. He could appoint members of his private office. He could put his aunts, uncles and cousins on it.
  Mr. Guy Barnett: And pay them.
  Mr. Oakes: Indeed. Nowhere in the Bill is there any limitation on the Secretary of State's powers of appointment. Not only that let us look at the part of the Bill dealing with dismissal powers, schedule 1(4). I know that when one appoints a committee, one always has to make provision for one member going mad, another not turning up at meetings, someone being disabled, or someone going bankrupt. It is customary to see such a provision in schedules to Bills. But what do we have here? After the various conditions, the paragraph states that the Secretary of State may remove from office a member who, in his opinion,
  "is … otherwise unable or unfit to perform his duties as a member."
  If anyone is fool enough to serve on that committee and dares to disagree with the Secretary of State, be he the chairman or any other member, he can be sacked at once, just on the say so of the Secretary of State. Why was that provision added? I can understand the bankruptcy and ill-health provisions. Any fool can understand them. But why give that absolute, overriding power to the Secretary of State, unless he has sought it so that he can use it to intimidate the committee that he has appointed?
  I said that it was in the gift of the Secretary of State to put members of his private office or his relations on the committee. I am certain that the Secretary of State will say that he has no intention of doing so. Incidentally, after what has gone on in the past two weeks, I would not put it past him. However, he has no intention of doing so because he has no need. The reason is that the advisory committee is toothless. When the Secretary of State receives its recommendations, he can accept them, vary them or reject them altogether. He can accept the recommendations that he agrees with and vary the others that he does not accept. Alternatively, if he does not like any, having sacked the chairman or any member who dares to disagree with him, he can, as clause 3(1) says, make
  "such other provision … as he thinks fit."
  The right hon. Gentleman has absolute power. The House should never give such power to any Minister in any Department. I would say that whether I was in Government or Opposition.
  Clause 3(4)(a) provides that the Secretary of State may

  55
  "make different provision for different cases, including different provision for different areas".
  I thought that the Secretary of State was very good on television yesterday. I share some of his ideas on the future of education, particularly on the English language, but it is the way in which he wants to do things to which I object.
  Mr. Spearing: That has nothing to do with the Bill.
  Mr. Oakes: It has nothing to do with the Bill at all. It is a very different Secretary of State who appears in the House today from the mild, gentle pleasant man who appeared on television yesterday.
  What does
  "different provision for different cases"
  mean? Does it mean that the Secretary of State can unilaterally carry out his ideas on science or maths teachers, or another provision that he wants? Whether the right hon. Gentleman will or not, he can. We are giving him the power to do so, regardless of what the teaching professions, the local authorities or the House say.
  What is the meaning of the word "area"? It is like asking: how long is a piece of string? If, for example, the Secretary of State were seeking powers to have a different pay structure in Surrey from Cheshire, or a different pay structure in North Riding from Avon, he would use the words—
  Mr. Spearing: That is what it is about.
  Mr. Oakes: It goes further than that. I know that the right hon. Gentleman has aspirations in that direction. If that was what he was seeking to do, he would have used the words "different local education authorities". What is an area? It could mean the south-east of England compared with the north-west. It could mean an inner city area as distinct from an area outside an inner city. In geographical terms, an "area" could even differentiate between one school and another. We are giving the Secretary of State the power to say—the House should not do so—that one local education authority area containing a school that he likes and approves of, and where he approves of the teachers, will have a certain salary structure and conditions of service, but the school next door, because he does not like its practices one little bit, will have a different set of conditions, to be imposed by order. I am not saying that the Secretary of State will do that. I am saying that we should not give him the power to do so. We should not give that power to any Secretary of State.
  Mr. Barnett: Another serious difficulty and danger of the part of the Bill to which my right hon. Friend has drawn attention is that the Secretary of State could differentiate between local education authority areas according to who happened to have political control at the time.
  Mr. Oakes: I am certain that the Secretary of State will look closely at that power. Another part of the Bill says that if the Secretary of State so desires, he can negotiate with a particular local authority in addition to local authority associations.
  Therefore, we are giving unprecedented powers to a Minister. The House should not do that. We are doing so in a roughshod manner, without proper consideration.
  In his speech, the Secretary of State made great play of the fact that the Bill was a temporary measure. I noticed
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  that he continually called the advisory committee the interim advisory committee. Nowhere in the Bill is it called that. The right hon. Gentleman says that the Bill is to be in force only until 1990. But look at what we are discussing on Thursday this week. The Northern Ireland (Emergency Provisions) Act 1978 deals with terrorism. Lives are at stake. In 1978, the House was entitled to pass such a Bill in the face of bombings and people being killed—there is nothing like that in this Bill. It is being renewed year by year; it will be renewed again this year. Unless there is more comprehensive legislation—I would not put that past the Government—this Bill will be renewed after 1990. If we have the misfortune of still having the Government in power at that time, it will be renewed year by year. So today is the time to stop it if we want to do so.
  I say unequivocally that if I were on the Government Benches and if my hon. Friend the Member for Durham, North (Mr. Radice) were Secretary of State, without hesitation I would vote against a Bill such as this. In the last Labour Government, I was a Minister in the Education Department with special responsibility for teachers' pay. I had to sit on all the Cabinet committees at a particularly difficult time, and we were constantly accused by Conservative Members of being centralist and of trying to impose Moscow-like domination on the teaching profession and education. Now where are we? Where is Moscow-like domination with a centralist measure such as this Bill? If my hon. Friend the Member for Durham, North introduced a Bill that was half as centralist and half as arrogant as this, I could and would vote against it.
  I hope that those Conservative Members who have an interest in education, a local government background—like me, many of them were on councils before coming here—a care and affection for local government and an interest in democracy and in not giving any Minister too many powers, will not be spineless enough to follow the Secretary of State into the Lobby. I fear that many of them will do so. There is one hope. Thank God that there is another place where there is more concern about education and local authorities. It exists only to stop this sort of tyranny occurring in the United Kingdom. I hope that that other place does not acquiesce in the Government's railroading tactics, and that the Minister will not have his Bill at use as a pistol to the heads of teachers and the local authorities when he meets them next, on 19 December.
  5.42 pm
  Mr. Alan Haselhurst: I do not know whether, in his last few words, the right hon. Member for Halton (Mr. Oakes) was speaking with a certain longing and yearning in his voice. I agree with him that this is not a debate in which to re-run the teachers' pay dispute. we should look at the principle of the Bill, what it means and what opportunities it will create. As the right hon. Gentleman acknowledged, it is a Bill about mechanisms. I do not see the scares in it that he has put before the House. I understand that he and other Labour Members may be anxious to whip up such fears as may exist in the teaching profession about the measure, because they would like to maintain maximum hostility among the teachers to the change that this represents. The motive for that may be to put off the possibility of settlement for that much longer.

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  We are trying to get rid of the Burnham machinery, and the more that one learns about that and some of the ways in which it has performed in the past, the more one realises that it cannot long be mourned. It was inevitable that any unilateral move to end it would be branded as dictatorial, even if there was multilateral dissatisfaction about it, as there is.
  What my right hon. Friend the Secretary of State has presented today is acknowledged as an interim measure, which means that there is scope for an agreed longer-term answer. Some of my right hon. and hon. Friends have referred with disfavour to the NUT advertisement in the newspapers today. I add my voice in saying that the sentence that I found particulary offensive and misleading was that which reads:
  "The Bill will also deny teachers any opportunity to negotiate on their pay or conditions of service ever again."
  That is grossly untrue, and it is the clear intention of my right hon. Friend that some other procedure should be found. This is clearing the decks, ready to find such a procedure.
  The Bill should not make a settlement of the current dispute more difficult. We are edging towards agreement. People are changing their positions, and my right hon. Friend has been generous enough to say that his door is open and he is prepared to consider all representations. If everyone shares that spirit of give and take, a settlement can be achieved.
  I see as an ingredient in that settlement the need to find new machinery for determining teachers' pay. Teachers must have some hope about what they can expect in future. They must have some hope that they will not slip behind in the way that they did following the Houghton settlement and such arrangements in the past. Equally, in asking them to look to their future. I urge them not to try to get everthing settled at once now, as though they have a mission to get everything in education, and their pay, right to the maximum, regardless of other demands on the public purse. There has to be give and take in that sense as well.
  I hope that the Bill is seen as a watershed, after which thought might be given to the structure of the profession in a new way. Its divisions into warring factions should not be perpetuated for ever and a day. Parents simply do not understand differences between the unions. Parents do not see teachers as belonging to this or that union. The unions themselves do not seem to understand the differences between themselves.
  Parents understand that some union members who they see on television from time to time do not appear to be the personification of dedicated professionalism. They also understand that this sectionalised squabbling of the past few weeks in particular looks light years away from professionalism. Many parents cannot square the image that they have seen portrayed in the newspapers and on television of the teaching profession with the teachers whom they may meet at their children's school. One is tempted to wonder whether the mass of teachers might not wish, if it were possible, to transform themselves into a united professional body setting, maintaining and upholding their standards.
  Many practical difficulties cannot be dismissed just by wishing them away. Teachers would give a better account of themselves if they sounded as though they had a tolerance of each other's point of view and if they gave the impression of belonging to the same profession,
  58
  subscribing to common objectives. I do not imagine that this would produce a toothless champion of its members' rights. A united professional body would give added strength to the teaching profession and probably greater dignity to the cause of teachers and education.
  Teachers might reflect on what the dreadful dispute of the past one and a half years has achieved. There may be more pay for them, but I wonder whether they believe that they have conveyed to the public a better understanding of the needs and nature of education. I wonder whether they have created more sympathy for state education among the public. There seems to be evidence that pressure for private education is growing all the time. A united professional body for teachers might be able to do rather better, and I counsel teachers to think about that.
  A professional body, whatever it might be called, might attempt to seize for itself a leading role in the more permanent pay determination process that will follow what is being set by the Bill. I may be accused of a certain amount of day dreaming in reflecting upon this possibility, but I wish that it were not. I think that many parents would wish that it were not day dreaming, and I suspect that quite a lot of teachers would wish that. It is up to teachers, not my right hon. Friend the Secretary of State, because he would be accused, as he has been today, of being dictatorial if he spoke with favour of any such move or said that he would like to see a teachers council set up.
  Teachers and their representatives should not get hysterical and oppose the Bill in the way demonstrated by the NUT. They should recognise the lessons of the past and look to the opportunities that open up before them for a better way for teachers to organise themselves. If the Bill is a trigger for a serious search for that better way to begin, it is doubly welcome.
  4.49 pm
  Mr. Clement Freud: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof,
  "That this House, whilst recognizing the need to replace the Remuneration of Teachers Act 1965, declines to give a Second Reading to a Bill which makes no positive contribution to settling the current dispute on teachers' pay and conditions, removes the basic negotiating rights of 400,000 teachers, takes away the direct input of local authorities into negotiations and represents a drastic centralisation of power in the Secretary of State, rather than allowing for direct negotiations between teachers and employers on all aspects of teachers' pay and conditions within the context of a new system of pay comparability for the public services as a whole."
  I shall not follow too closely the line taken by the hon. Members for Erith and Crayford (Mr. Evennett) and for Saffron Walden (Mr. Haselhurst) who spoke from the Government side because I want to speak quite specifically to the Bill. The Bill sets out to abolish the Burnham system of negotiating teachers' pay. That system has existed for some 21 years, and the House will know that the alliance has not been enamoured of the Burnham structures, believing that they retained a false and damaging separation of two elements of teachers' employment which should logically and practically be dealt with together, namely pay and conditions. However, if the Secretary of State thinks that I propose to speak in support of his Bill, he should look at the amendment because that shows our total rejection of it.
  Even though the Bill does away with Burnham and purports to replace that creaking and outdated machinery

  59
  with what the Bill describes as an advisory committee, the Bill must be opposed. We oppose the Bill not only because, unlike the previous Secretary of State, the bite of the present incumbent is worse than his bark, but because the Bill is conceived as a murder and even then it is flawed in motive and in execution. As a piece of employment legislation it threatens to create for schoolteachers a unique and uniquely discriminatory system of settling pay and conditions.
  Other measures introduced by the Government have reduced employees' rights, and here one thinks of the abolition of the wages councils, but this Bill proposes to create a structure by which the pay of a large and important section of society will be determined without reference to the teachers' employers or to their union representatives. I can think of no other group of people to whom this applies. Even confining comparisons to other groups of local authority workers I come up against the fact that firemen negotiate, that the police put in claims which are considered and processed through negotiating machinery, and that the independent machinery for nurses is more independent than what the Bill proposes for teachers.
  The Secretary of State is not in his place, but I challenge him or the Minister of State when she replies to give the House examples of other groups of people who are treated in this way, who are subject to an advisory committee filled with the nominees of a Secretary of State who is not their employer, and with terms of reference set by the Secretary of State, which will be told what factors it may take into account and whose report may not even be made public? The findings of the advisory committee can be totally ignored by the Secretary of State, and, under the terms of the Bill, the advisory committee need not even consider things annually. Any changes in the pay and conditions of teachers which happen to get through the minefield of restrictions and reservations held in the hands of the Secretary of State are to be subject to annulment in Parliament in an order the details of which will not even form part of that order but will have to be obtained separately from Her Majesty's Stationery Office.
  The Minister of State, Department of Education and Science (Mrs. Angela Rumbold): It would be helpful to the House if the hon. Gentleman could tell us where it says in the Bill that the recommendations of the advisory committee will not be published.
  Mr. Freud: That is in clause 3(3). I am glad that the Minister will now read the Bill. The Secretary of State frequently berates teachers for not behaving as a profession. This Bill will make teachers a second-class group and will not take them out of normal industrial relations because they are a special case, like the police, and ought to be treated with extra concern and cossetting, but will punish them because they have exposed this Government's shabby treatment of education. Teachers are to be disadvantaged because their strike action in the last few years has been a factor—
  Mrs. Rumbold rose—
  Mr. Freud: I shall not give way. That strike action in the last few years was a factor that caused a Tory loss of control in many shire counties. Allowing the teachers and
  60
  their employers to reach a deal and then funding that deal would mean that the Secretary of State would not be able to take the credit for solving the problem of the teachers' dispute. Most of all, the Government know that without a deal their whole approach to education would stand exposed at the next general election.
  The Bill has nothing to do with education itself, nothing to do with the rights and wrongs of the teachers' case or with the finding of a long-term solution that will really bring peace to our schools. It has everything to do with the highly charged political question of electoral politics. The Government, having lost much of their influence at local level, are seeking to get it back, not by winning the arguments and defending their case, but by abolishing local government altogether.
  The reason why the Secretary of State is so keen on issues such as local financial management—an enlightened step that was taken by my county council in Cambridgeshire—is not because the Government see it as an enlightend step but because it undermines local education authorities.
  The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): Will the hon. Gentleman confirm that it was started by his county council when that council was under the control of the Conservative party?
  Mr. Freud: That is right. It is a united and now balanced county council. The point that I made to the Minister was quite simply that the reason why the Secretary of State was previously against it and is now for it, is because he sees it as yet another device to undermine the local education authorities. Teachers' pay accounts for about half of any shire county's budget and has simply got in the way of those ambitions. The Bill is a way, not a particularly subtle way, of removing another obstruction to a Tory monopoly of power that cannot be gained through the democratic process. He who pays the piper will thus not only call the tune but will write the score and fashion the instrument. It is a dangerous monopoly and I predict that it will backfire badly.
  Although the Bill does not repay careful study, I shall take the House through it clause by clause because only then will its true nature become apparent. It is a mixture of farce and nastiness which is uniquely depressing, even from this Government from whom one does not expect uplifting legislation. Clause 1 is the only clause in the Bill that we shall not seek to amend. I suspect it is unintentional that this clause will boost the establishment of tertiary colleges falling under FE regulations and therefore beyond the scope of the rest of the Bill. That clause is welcome.
  Clause 2 is extraordinary and one can only marvel that it comes from the man who stood up before his party and said, "I am only the Secretary of State. I have no power." In clause 2 the full monopolistic ambitions of that man are revealed. The clause says that the Secretary of State shall refer matters to the committee and will tell its members what they should consider and the constraints to which they shall subject themselves. I suspect that constraint will prove more accurate than consideration. It will be interesting to know whether the prevailing electoral position will feature publicly as one of those constraints.
  The plot thickens in clause 3, because here the Secretary of State asserts another weapon in his armoury. Not

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  content with both selecting the members of the advisory committee and the terms under which the Committee will consider teachers' pay and conditions, he reserves the right totally to ignore the findings of the Committee or to make,
  "such other provisions with respect to that matter as he thinks fit."
  He compounds the aggrandisement by insulting teachers and their employers in clause 3(4)(c). The Secretary of State cannot do what he proposes to do and then have the arrogance not only to be absent from the House but to say to the teachers—
  Mrs. Rumbold rose—
  Mr. Freud: I shall give way to the hon. Lady when I finish this sentence. He has the arrogance to say to the teachers, "I may leave a few things to you but I shall specify what they will be."
  Mrs. Rumbold: The hon. Gentleman said that clause 3(3) said that the Government and the Secretary of State would not publish the findings of the advisory committee. I do not think it says that in the Bill and I would be grateful if the hon. Gentleman could tell me where that appears, because I understand that my right hon. Friend the Secretary of State has every intention of publishing the findings.
  Mr. Andrew F. Bennett: Will the hon. Lady guarantee that?
  Mr. Freud: I am pleased to hear what the hon. Lady says and I am sorry, if she has every intention of publishing the findings, that there is no mention of that in this rotten little Bill. One normally supposes, with this ungenerous Government, that what is not in a Bill, will not come about.
  The Bill enables the Secretary of State to limit the extent of any role for negotiations involving teachers and local education authorities and to set the terms for whatever small, residual, place they are to occupy. We shall attempt to amend that in Committee.
  Mr. Cash rose—
  Mr. Freud: I shall not give way again.
  The alliance will not sit back and let the Secretary of State fashion for teachers a wholly unique unsatisfactory system for establishing pay and conditions which is operated along unsatisfactory lines of annulment. At the very least, we would want the orders to be subject to affirmative resolution procedure.
  The rest of clause 3 conjures up the unappetising spectacle of the Secretary of State putting on a rather poor imitation of John Wayne cantering in for a post meridian rescue to be in the last scene before the credits roll. Not satisfied with pre-empting discussions about negotiating machinery, clause 3(6) empowers the Secretary of State, by statutory instrument, to impose a pay structure on teachers. It resembles a "Try your Strength" competition at a fairground with a successon of more or less hapless and frustrated Secretaries of State confronting the teachers shouting, "Let me have a go at it." The methods may vary but the intention is consistent.
  As for clause 5, I ask the Secretary of State to furnish the House with other examples. There are Acts of Parliament which are subject to annual votes such as the Northern Ireland (Emergency Provisions) Act 1978, which we are to discuss on Thursday and the pools competition legislation about which I seem to speak annually and make
  62
  the same points year after year. I remain to be convinced that the Government believe that this is the best way in which to deal with important matters or indeed the best method of governing the country.
  It seems that we shall soon have so many expediencies in our legislation that everything will be exemptions rather than rules. I cannot believe that the Secretary of State wants to encourage that trend. What makes this one worse is the fact that it is to have an afterlife. Not content with erecting a system of affirmative and annulling orders, we are being given something, the provisions of which live on after the Act expires. It is like the Cheshire cat remaining in situ after the smile has gone.
  There is an even more worrying feature of clause 5. We are asked to accept that the Bill meets an emergency, that it is an expedient to get us over some temporary crisis. The precedents are not auspicious—the income tax legislation, the Defence of the Realm Acts, the Official Secrets Act 1911 and the Import, Export and Customs Powers (Defence) Act 1939 were all designed to meet a historically specific need and all were prolonged far beyond their original intention.
  In this context, I fear that the Secretary of State is being a trifle disingenuous. It is quite clear to me and my colleagues that the Bill is not the consequence of the failure of the existing machinery and that it does not represent a posture of crisis. Both claims are true only as far as they go, and both represent a partial representation of the facts. The Government are overlooking the fact that reform of the Burnham machinery is already on the agenda after Coventry. It is the existing machinery, albeit supplemented with ACAS and some fresh impetus, which has produced the Nottingham ACAS agreement.
  I will not say that the Secretary of State does not want a settlement, but whatever that settlement was, and however it was to be achieved, he wanted to change the machinery to bring total control into his own hands. The Secretary of State often says that he sees the education system as a wheel in which there should be more power at the rim and less at the hub. What he always leaves out of his attractive analogy are the spokes. One cannot run a local education system from either the hub or the rim. All parts of the wheel must work smoothly and together. The Secretary of State will not solve the teachers' dispute by eliminating from his considerations the local education authorities and the teachers' unions.
  The Secretary of State, in view of his renowned passion for the English language, should realise that an imposed settlement is a contradiction in terms. The casualties of such a step will be awesome and much of the damage irreparable. We all have reservations about the Nottingham ACAS agreement. I am not convinced that it permits good management in schools, although I appreciate the arguments about collegiality. I accept the case for incentives, but suspect that the problem is rather to reward the majority of good teachers than to produce a sharply tapered scale for the few.
  The alliance has severe reservations about Burnham. The deal that teachers and employers have struck abandons Burnham in that it involves a third party—ACAS—and deals with pay and conditions together. The right response to that is not to rubbish what has been achieved or to leap into a largely imaginary fray and rush through premature legislation which, in every respect save its deceptive appearance, is hasty and ill-considered.

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  The Government must take very seriously the point that any negotiated deal is better than any imposed deal, however technically deficient the former and however technically perfect the latter. I do not say that because the Government have no role to play, for they clearly have one; I say it because it is simply wrong to deal with teachers as the Bill proposes. The consequences will be worse than a sane Government should be prepared to countenance and I believe that what the Bill proposes will make the education system worse rather than better.
  The alliance supports the replacement of Burnham. The Secretary of State said to me the other day that he can see no difference between alliance policy and Labour party policy; we support the role of a third party in an advisory committee and taking pay and conditions together. We cannot support the timing, the details or the motivation behind the Bill.
  Mr. Jack Dormand: Or the principles.
  Mr. Freud: Indeed. Or the principles. I ask Conservative Members to stop talking about things which confuse the issue, however important they may be, and to concentrate their minds on the evils of the Bill and the singular powers that it will give a Minister without requiring the consent of this House. Like the right hon. Member for Halton (Mr. Oakes), I am very grateful for the existence of the other place, which will look at the Bill dispassionately and without feeling that it ought to be done in time for a general election.
  6.7 pm
  Mr. Tony Baldry: The speech of the hon. Member for Cambridgeshire, North-East (Mr. Freud) confirms that the alliance always wants to be all things to all people. It pursues a policy which enables it to tell parents that it supports them and that it opposes disruption in schools, and to tell teachers' unions that it supports them and opposes what the Government are trying to do. The alliance is never firm about what it wants to achieve. It simply tries to be all things to all people.
  We all want to ensure a better education for our children and a system that enables them to acquire the skills that will enable them to go forward into the 21st century with confidence. We want to enable them to continue to write history, not simply to read it.
  We have now had about two years of disruption in our schools. The existing machinery has ground on, trying to find a settlement, and Opposition spokesmen have accused the Secretary of State of dithering one day and of acting too quickly the next. They cannot have it both ways. The present machinery gives the Secretary of State, who has to foot the bill, practically no powers, but expects him to take all the responsibility. That has to change. He has to meet the lion's share of the bill, but has by far the smallest opportunity to influence what happens.
  Mr. Freud: Does the hon. Gentleman genuinely believe that passing the Bill will make for peace in the classroom?
  Mr. Baldry: I genuinely believe that hundreds of thousands of parents and thousands of teachers would be glad to see a resolution to the dispute and that they see within the Bill the seeds of such a resolution.
  The simple problem about the Burnham machinery, which was set up in 1919, is that it has outlived its
  64
  usefulness. It has become increasingly ineffective in producing agreement on teachers' pay and has no power to consider conditions of service. Furthermore, the employers, under the leadership of the Labour groups, have come to to accept a collegiate approach. It seems to be a new expression in the English dictionary, but it means eroding differentials and incentives for better teachers. The result has been a reduction in promotion prospects for teachers, which has been exacerbated by falling pupil numbers, and a prolongation of the dispute, which has been largely cost-free to teachers, because those who have been involved in industrial action over the past two years have lost little of their pay.
  There has, alas, been a decline in the regard in which teachers are held by the public. That is sad, because if we are to recruit and retain teachers it is essential that they are rewarded well and are seen to be held in high public esteem. More than any other group, the teachers themselves have undermined that esteem.
  Under the existing Burnham machinery there have been constant negotiations, which have produced no settlement, and constant disruptions of our schools. I am sure that every hon. Member believes that the children of our country are entitled to uninterrupted education.
  An improvement in the standing and quality of teachers must be a key element in ensuring better schools. There can be no disagreement in the House that ensuring that teachers are properly remunerated must be an essential prerequisite to getting good teachers. The Bill will help, because it will enable the Secretary of State to make decisions to clarify conditions of employment, provide for appraisal, reward teachers properly and create a pay structure that substantially improves career prospects.
  The agreement negotiated by the Labour-dominated employers and the teachers' unions does not provide a pay structure which improves career prospects. Fewer teacher posts would be incentive posts that are rewarded according to merit, attainment and capability. At present, about 40 per cent. of posts are incentive posts. The agreement suggested by the employers and unions would reduce that number to about one third, whereas the sensible proposals of my right hon. Friend the Secretary of State would increase the number to about 50 per cent., which reflects the position in virtually every other profession.
  It is essential that disputes about the extent of teachers' responsibilities should cease. The Bill will help teachers to know what they can be required to do, help heads and parents to know what they can reasonably expect of teachers, and ensure that local authorities can rely on teachers without constantly looking over their shoulders to see whether their decisions will be tested in the courts.
  The Bill will help because it will put responsibility on the Secretary of State, whom the whole country thinks of as having responsibility. Day after day the Secretary of State has been berated in the House for not taking powers to settle the dispute. Everyone who knows anything about the matter realises that, because of an Act of Parliament, the Secretary of State does not have those powers. By giving him power we shall allow him to concentrate wonderfully the minds of employers and teachers unions to consider the issues that must be resolved if we are to bring harmony back to our schools, to improve our schools and to compete with countries such as West Germany, the United States and Japan in the 21st century.
  Much has been achieved. The 13-point list of teachers' duties proposed by the local authorities and unions

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  matches closely the 19 points in the Government's package announced on 30 October. As the hon. Member for Durham, North (Mr. Radice) acknowledged, that is good progress, but it has largely come about only because employers and trade union representatives detected that the Secretary of State was determined to ensure that progress would be made. That progress came about as a result of the announcement that more money would be made available if an agreement on duties was reached.
  The Opposition present themselves as the friends of the teachers, but we should never forget that under the Labour Government teachers' pay fell 13 per cent. below the value of the Houghton award. That drop resulted from the combination of leapfrogging comparability awards and the high inflation which was a consequence of Labour's economic policies. Since 1979 teachers pay has been restored to, near enough, the value of Houghton, and the new Government package would take their pay 10 per cent. above Houghton by October 1987.
  The additional £600 million set aside by the Government can be released if sensible conditions are met and if a clear contract and a satisfactory pay and promotion package are produced. That extra money would provide an average rise for teachers of 16·4 per cent., giving them a pay increase of 24 per cent. over the two years up to October 1987.
  Mr. Ken Weetch: Does the hon. Gentleman agree that the Secretary of State is intervening because he wants to establish the principle of more differentials in pay in schools? Does the hon. Gentleman realise that posts of responsibility have been a divisive factor in the classroom for a very long time and have given rise to a good deal of ill feeling? Does the hon. Gentleman not agree that if we establish a main professional grade much of the fragmentation will disappear? Under the Government's proposals a teacher will say, "You have the money for the responsibility; you get on with it."
  Mr. Baldry: It is extraordinary that the Opposition try to apply to teachers norms that exist in no other profession. In every other profession good people are rewarded and have incentives to do well. We hope that there can be a similar situation in our schools, so that good teachers are paid well for teaching well. The Government and, I believe, every parent want a pay structure that rewards and motivates good classroom teachers and those who accept responsibility outside the classroom. The unions' proposals do not provide incentives for good teachers.
  Mr. Patrick Thompson: Does my hon. Friend agree that the whole purpose of the Government's proposals is to introduce more flexibility into the way in which incentive posts are introduced? That is exactly what we want. I hope my hon. Friend agrees that we want to give teachers more chance to stay on in the classrooms to get good salaries for good work.
  Mr. Baldry: My hon. Friend is absolutely right. We want to see good classroom teachers rewarded, and not a parent in the country would disagree with that.
  Mr. Andrew F. Bennett: Will the hon. Gentleman give way?
  Mr. Baldry: No. We want to encourage teachers to take on extra responsibilities, and I do not believe that any parent in the country would disagree with that. We want
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  to pay for skills that are in short supply—we are constantly berated about the lack of teachers in physics and mathematics—and I do not believe that any parent in the country would disagree with more pay for skills in short supply. We want to attract good teachers to demanding posts which may be difficult to fill, for example, in inner-city schools, and not a parent would disagree with that.
  In reality, at present there are about 105,000 promoted posts on scales 2 and 3 and the senior teachers' scale. The Government's package allows for 140,000 promoted posts, which would mean that half the profession would hold such posts and be heads or deputy heads. The local authority proposal would provide only 80,000 promoted posts, which would be enough for only one third of the profession.
  The rewards offered to teachers who take on extra responsibilities must be adequate and, clearly, the local authority and union proposals fail in that respect. Indeed, the general secretary of the National Association of Head Teachers has described them as "shooting differentials to pieces." Under them, for example, a deputy head who assumed the role of head teacher and took on his responsibilities in his absence would be paid only £5 a week more for doing that. I am not sure whether the hon. Member for Ipswich (Mr. Weetch) regards that as being divisive, but it would be lunatic to expect teachers to take on the extra responsibilities of heads and to discharge them decently for only £5 a week more. That is unrealistic. Therefore, we are keen and anxious to ensure that those who are prepared to take on proper responsibilities are properly rewarded.
  The Bill will ensure that the remuneration of Teachers Act 1965, which sets out the legislative framework for the Burnham negotiating procedures, is repealed. That Act gives no statutory role to the Government, other than to publish the orders which the Burnham committee proposes and to provide much of the resources to meet its requirements. In short, this Bill will place the responsibility where it should be—on the shoulders of the Secretary of State for Education and Science.
  The country looks to the Secretary of State for a lead and expects him to discharge his responsibilities, and he will do that under the Bill. The Bill does not remove negotiating machinery from the trade unions or the teachers, as Opposition Members have sought to suggest. The interim advisory committee, which the Secretary of State will appoint, will consider advice from all quarters, including teachers unions and local authority employers.
  That committee will not give the implied veto that the Burnham committee gave to the NUT, until its numbers on that committee were reorganised. Because the NUT had a majority on the employee side of the Burnham committee, it effectively had a veto, so for two years we made no progress because it was in the interests of the NUT that we made none. The NUT had a statutory enablement to ensure that we made no progress. Now we will make progress because we will have a committee to advise the Secretary of State. Its members will be independent, and will be seen to be independent, and their role will be to represent parents' interests, the national interest and community interest. The Secretary of State will be empowered to give effect to its recommendations by order. If he chooses materially to amend the recommendations of that independent committee, he will have to come to the House to argue his case.

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  Hon. Members are responsible to their electorates, and for two years we have been sitting impotent on the teachers' dispute because we have had no influence. Everything has been down to the Burnham committee, over which we have no influence. Parliament gave the power to the committee on which the NUT has had a majority on the employees' side. Under the Bill we shall be answerable to our electorates. If the Secretary of State introduces proposals with which we do not agree, we can tell him that we disagree. That is what will happen, because the Bill is placing responsibility on the House to ensure that teachers' pay and negotiations are properly discharged.
  Mr. Patrick Thompson: Does my hon. Friend not find it surprising that Opposition Members should oppose proposals to get rid of the Burnham negotiating procedures when, year after year, as a result of those procedures—I speak as someone who has been in the teaching profession for 23 years—we have had unsatisfactory, badly structured pay settlements? Despite that, the Opposition defend those procedures.
  Mr. Baldry: My hon. Friend is absolutely right. We have waited far too long to see a settlement of the teachers' pay dispute. No settlement has been forthcoming through the present machinery. It is high time that the House took to itself the powers to ensure a decent pay settlement which properly rewards teachers and ensures no more disruptions in our schools and that our children can compete well into the next century.
  6.25 pm
  Mr. Guy Barnett: I should like to spend some time dealing with the many inaccuracies and misunderstandings in the speech of the hon. Member for Banbury (Mr. Baldry), but as many hon. Members wish to speak there is time only to pick up some of them as I go along.
  I agree strongly with those who have already pointed out that the introduction of the Bill is an arrogant abuse of our procedures. I agree with those who point to the centralist nature of the legislation. The Government have pursued a centralist policy since they were first elected and it is in sharp contrast to what we always used to hear from the Conservative party in the 1950s, 1960s and, even, the 1970s.
  This is a constitutional outrage and I am particularly worried about the type of language used by the Secretary of State and Conservative Members about the trade union leadership in teaching.
  Mr. Baldry: Will the hon. Gentleman give way?
  Mr. Barnett: No. The hon. Gentleman spoke for long enough.
  Some of those leaders are personal friends. The trade unions have been led responsibly in the extremely difficult circumstances of the past five years—that needs to be stressed—despite provocation from the Secretary of State and his predecessor. It is not surprising that as a consequence of their behaviour there has been so much disruption in our schools.
  The hon. Member for Erith and Crayford (Mr. Evennett) made an important point when he said that the teaching profession was undervalued by society. I hope
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  that he will listen to what I am saying because I listened to what he said and I may be able to teach him some things which he does not yet understand. The hon. Gentleman said that the teaching profession was undervalued and that is the starting point. In the light of that it is exceedingly dangerous for the Secretary of State to introduce this legislation.
  When the Secretary of State was appointed I was hopeful that he would be an improvement on his predecessor and that he would try to work with local education authorities and the profession. Twice in parliamentary questions I encouraged him to do so because it seemed important that he should gain the confidence of the teaching profession. But I am afraid that one of the consequences of introducing the Bill is that he will lose the confidence of the entire profession. We need only see the letters that hon. Members have received from representatives of practically every trade union to see that there is almost complete opposition to the Bill because it removes the negotiating rights of trade unions and devalues teachers and their representative organisations. That is a bad first step for the Secretary of State to take.
  In the light of what has happened over the past few days, I can only believe that it was always the Secretary of State's intention to introduce this legislation and that he was hoping that Coventry and Nottingham would fail so that he would have an excuse to do it. He spends his time trying to point out the degree to which there is division within the teaching profession when the profession has made an earnest attempt over the past few months to reach a measure of unity. I think that they have achieved that unity to a remarkable extent. Nevertheless, the Secretary of State has done everything he can to divide the profession. Even in the speech we heard this afternoon, he was trying to point out yet again the areas of difference rather than the areas of agreement which across at Coventry and, later, at Nottingham.
  It is important to point out some of the consequences that the Secretary of State's legislation is likely to have. Many Opposition Members have been appalled by the way in which the Secretary of State and other Conservative Members refer to good teachers. If there are good teachers, the implication is that there are also bad teachers. He suggests that 50 per cent. of the profession are good teachers and the rest are moderate, indifferent or bad. That is the implication behind what Conservative Members are saying. They are saying that there are two sorts of teachers, falling roughly into two classes. They say that we should pay half of them over the odds and give them special allowances and the rest have to make do with what they get. That is the way in which it is read by teachers up and down the country.
  It is suggested that the good teachers will be given a reward for being good teachers. I want to contest that. Who chooses the good teachers? On what basis is it decided that somebody is a good teacher and somebody is not a good teacher? I have taught on the staff of several schools and, inevitably, I have had my private views about what I believe to be the capacity of other teachers. I have often been proved wrong. I have often come to the wrong conclusion about somebody. Sometimes I realised that someone was not as good as I had thought, and sometimes I discovered that someone was a much better teacher than I had realised. It is an extremely difficult judgment for anybody to make. It cannot be made by the head teachers or inspectors. Who will make the decisions? It is very

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  dangerous for anyone to attempt, as the Secretary of State's words imply, to separate the sheep from the goats in the teaching profession.
  My hon. Friend the Member for Ipswich (Mr. Weetch) intervened earlier in the debate. He pointed out that the decision to separate the teaching profession into two halves is about as divisive as one could possible get. I agree that the teaching profession has been undervalued in the past. I also agree with those who say that everything is to be gained by making the profession one profession and getting a measure of agreement. My own union, the National Union of Teachers, has long wanted to see all teachers working together in one union or one association of unions. I believe that that will one day come, but it will not come as long as attempts are made by the Secretary of State and Conservative Members to divide the profession, because that is the way in which they are proceeding.
  Mr. Oakes: I agree with my hon. Friend. One never hears the Secretary of State for Defence talking about good soldiers or bad soldiers and one never hears the Home Secretary talking about good policemen or bad policemen. It is only the Secretary of State for Education and Science who has that divisive technique.
  Mr. Barnett: I agree with my right hon. Friend. The fact that they talk in that way is indicative of the way in which Conservatives think about education. They do not talk about good doctors or bad doctors or good colonels and bad colonels but they certainly talk about good teachers and bad teachers, and I have heard enough of it. I hope that it will stop.
  In his able speech my right hon. Friend the Member for Halton (Mr. Oakes) drew attention to the reference to areas in different parts of the country. We do not know what that means. I hope that when the Minister replies to the debate she will explain what that means. The suggestion is that teachers in different parts of the country will be paid at different rates. The suggestion is that in inner cities people will be paid at different rates. There may be arguments there, I do not know. However, there are costs as well. The cost is divisiveness within the profession. Since I first joined the profession there has been pressure to try to pay teachers in subjects where there are shortages more than those in subjects where there are no shortages. The consequence of that is that teachers of computer studies, science and mathematics will get special responsibility allowances only because they are teachers of those subjects, not because they are good teachers. One of the consequences, I am afraid—I am making a general point, but I believe that there could be some truth in it—is that whenever a job is advertised in history, English, geography or one of the subjects for which a fair number of teachers are available, there is often a long list of applicants. Inevitably, the person appointed, assuming the appointment committee appoints the best person who applies, will be a fairly good teacher because he or she will have had to face a lot of competition. The consequence of that, inevitably, is that there will be many "good" teachers of arts subjects who will not get the responsibility allowance, because only 50 per cent. of teachers will get it, but that all science teachers will get it. That is another divisive consequence of the Secretary of State's proposals.
  Mr. Brandon-Bravo rose—
  Mr. Barnett: I will not give way because I want to give other right hon. and hon. Members the opportunity to speak and I do not want to go on longer than I can help.
  I want to draw attention to the effect of the divisiveness which will result from the proposals in a profession that needs to be united nationally and within schools. I can tell the House about the divisiveness that can exist within staff rooms as a consequence of allowances going to one section and not to another. I believe, as I said earlier, that appraisal of teachers is exceedingly difficult. Where special responsibility is called for, that is a different matter. Where extra duties are required, obviously those extra duties have to be paid for. However, I am doubtful about the devaluation that will take place of, the ordinary classroom teacher. In my opinion, that is the most important job done by the profession as a whole. That is why the agreement worked out between the employers and the unions was such a valuable one. It recognised the crucial value of the classroom teacher.
  The next point I want to make is about the word "incentive". We are constantly told that teachers will not teach properly or do their job properly and will feel no incentive to be better unless there is the possibility of them earning more as a consequence of some appraisal exercise that demonstrates that they are better than average or at least in the top 50 per cent. I am worried about that. Those who know the history of education will recall the method, "Teaching: payment by results". We were told earlier in the debate that there is no profession where there is not a special allowance for people who do better than others. I am not so sure. Do we have special allowances for good doctors or social workers? A profession in which we give special allowances for the quantity of work done is dentistry. The consequence of that is that the richest dental surgeons are those who fill or pull out the most teeth. Within dentistry much too little time and trouble is spent on dental education and dental health. There is a lesson there. Whatever way one tries to reward teachers or whatever incentives one tries to provide, the danger is that one will distort the job that the teacher is trying to do and that it will have unforeseen consequences. They may do certain things and neglect others in order to get that special responsibility allowance that is being offered.
  I am concerned about education. This could be a bad day for education. With my right hon. and hon. Friends, I shall fight the Bill during all its stages. It is damaging constitutionally that the Secretary of State for Education and Science should be granted these powers. The Bill is damaging to the relationship between local education authorities, the Department and the unions. Last, but not least, I believe that the Bill is divisive for the teaching profession as a whole.
  6.40 pm
  Mr. Robert Key: I have a long and happy association with the hon. Member for Greenwich (Mr. Barnett). We are parliamentary chairmen of the Council for Education in the Commonwealth. I am, therefore, unhappy to follow him in the debate when he has been so divisive in representing the union for which he is parliamentary adviser, the National Union of Teachers. I am parliamentary adviser to the Assistant Masters and Mistresses Association. This exemplifies one of the root problems that have bedevilled us for two years. There is not a united teachers' union. The hon. Member for Greenwich talked of the idea that 50 per cent. of teachers

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  were bad teachers. I have never heard my right hon. Friend the Secretary of State or any other Conservative Member suggest any such nonsense. That may be a good debating point but it bears no relation to the truth.
  Each of the four headmasters under whom I served as a teacher for 16 years encouraged his teaching staff to look outwards from the school in which they served to the community. Because we served in the independent sector, with all its privileges, it was important for us to look outward to see how the maintained sector operated. We were encouraged to become involved in the community, especially in the world of education. That helped us to realise our deficiencies and those of the maintained sector. Working as a governor for five maintained schools, including as an elected parent governor, I saw that head teachers and teachers from the primary sector onward faced great frustration. I was not uncritical of the comparatively easy conditions of employment in the maintained sector. However, I always thought that there would be nothing but trouble when the teaching profession moved down the road of defining its duties too closely. Over the years, the antics of some union leaders severely eroded the status of teachers, and this had exactly the reverse effect to what was intended, reducing the esteem—or otherwise—in which the public held them.
  The teachers' associations and the unions have so much good to offer that I am distressed that the seed of what they have contributed to education is all too easily flung away. The teaching unions can contribute a great deal to the future. The Bill is a great challenge to the teacher unions. But, of course, confusion reigns. The system does not work. If anyone was in any doubt about the issue with which my right hon. Friend the Secretary of State is grappling, he should have listened this morning to the leader of the NUT on BBC Radio's "Today". I do not recall when I last heard so much reactionary obfuscation. There was nothing positive, no suggestions and no mention of children and parents. There were just the pure forces of reaction.
  Teachers are very frustrated. I very much agree on that point with my hon. Friend the Member for Saffron Walden (Mr. Haselhurst). Many of us have received representations from a small organisation called Teachers for a Common Policy. It said:
  "We argue that just as a government is said to be the better for a strong opposition, so an education minister and department need to face a confident and co-ordinated teaching profession, if policies are to be creatively debated and effectively implemented.
  It is education's loss as well as our own that at present our six unions cannot provide their side of this equation.
  We believe the differences between teachers are insufficient to justify the lack of co-ordination, and the rivalry, between our unions."
  How true.
  Mr. Radice: I do not know whether the hon. Gentleman has seen another letter which was sent to the Secretary of State and which was signed by the general secretaries of the four major teacher unions, including the union to which the hon. Gentleman is a parliamentary consultant. That letter stated:
  "We are united in our opposition to your Bill 'Teachers' Pay and Conditions' which removes from teacher organisations the right to direct negotiations. We urge you to
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  reconsider your position and to accept the principle that any new negotiating machinery for teachers' pay and conditions of service should include direct negotiation."
  Does the hon. Gentleman agree?
  Mr. Key: I shall explain why I will support the Bill. I have told the Assistant Masters and Mistresses Association precisely why I shall do so. The NUT, which would not accept last January's ACAS agreement, now recommends boycotting the outcome of those negotiations and opposes the Baker package. The National Association of Schoolmasters/Union of Women Teachers rejects the Baker package and condemns the ACAS results, but it played a leading role in mounting the ACAS exercise. The Professional Association of Teachers called on my right hon. Friend the Secretary of State to intervene, but then voted for a package which it knew he would reject. The National Association of Head Teachers repudiated the deal, but the Secondary Heads Association supported it. The Assistant Masters and Mistresses Association is balloting members with a recommendation to accept the package.
  This bizarre scene is best summed up not by me but by a union leader writing recently in The Times Educational Supplement. He said:
  "on what terms can the unions bury their various rivalries, if only in a shallow, temporary grave? Can they ever get their act together long enough to present a common front?"
  He continued:
  "Depressingly however, the unions … may well emphasise the issues on which they say they differ irreconcilably rather than the matters on which they can, with enough will, achieve a degree of unity.
  There is a perverse sense, of course, in which the unions need to appear in sharp disagreement with each other to justify their continuing separate existences … The resulting arcane quarrels have confused teachers, disaffected the public, and given heaven-sent opportunities to those bent on slamming schools and teachers at every opportunity."
  Mr. Flannery: The hon. Gentleman has sat on committees with me. He is a teacher and he knows as well as I do that the separation of the teachers began because they taught in different sectors. It was not intense rivalry. Members of the AMMA taught in the grammar schools, which became private schools. If the hon. Gentleman would examine the other teaching sectors, he would realise the terrible task of bringing them together. Like Topsy, they grow'd in the sector of education in which they found themselves teaching.
  Mr. Key: I agree with the hon. Gentleman that the historic roots of the unions have led to many of their disagreements. I agree with the hon. Member for Greenwich that, for a long time, many people in the unions have wanted to come together. But there is more to it than that. The stances of the different organisations are important. In the past 18 months, my organisation has grown from 70,000 to 117,000. The Professional Association of Teachers, with its no-strike faith, has emerged. Teachers' representation is evolving. This means that all unions are faced with a unique opportunity.
  Despite the many strengths of the unions, they have shown themselves to be rather bad at collective bargaining. There has not been any collective bargaining under Burnham, if only because he who has partly paid the piper has not even partly called most of the tune. I understand the opposition of the leaders of the teachers' unions to the Bill. I am sure that my right hon. Friend the Secretary of State has considered their worries, especially with regard

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  to International Labour Organisation conventions, including Nos. 91, 113, 151 and 163, which contain points that must be answered. Unions such as the AMMA regard it as rather perverse that, since the NUT veto went, along with its overall majority, and since a range of issues not only have been put on the agenda but have been discussed, my right hon. Friend has, as they see it, taken an axe to the negotiating table and chopped it up. I must say to my friends in the AMMA and to all those teachers who, like me, have loathed what has happened in the past two years and who want the status and effectiveness of the profession to be enhanced, that it is common ground that the existing machinery does not work.
  The Bill is time-limited. The teaching unions have more than three years—until 31 March 1990—to get their act together and to work with their traditional partners in the education service to ensure that direct collective bargaining—real collective bargaining—with all the parties involved becomes a central feature of the successor to this Bill. That is why the Bill is time-limited and precisely why it is intended to give a breathing space. Will the unions and employers insist upon raking over the embers of the past two years and seek partisan advantage or will they accept the breathing space offered by the Bill as an opportunity to design a new future for the profession?
  6.50 pm
  Mr. Jack Dormand: All the speeches from Tory Members so far have called for the best possible education service, an end to the disruption, the best fiscal provision, and so on. I have no doubt that Tory Members sincerely believe what they have said. We are all in favour of sweetness and light and all against sin. However, Tory Members have not addressed themselves to the Bill, because many of them feel that the Bill is really atrocious and they do not support much of its contents. Perhaps they will join us in the Lobby tonight.
  My right hon. Friend the Member for Durham, North (Mr. Radice) repeated a point made by many Opposition Members, which has not been answered. It relates to the reasons for the Bill's existence. We want to know why, after 18 months or two years of being unable to get a penny out of the right hon. Member for Leeds, North-East (Sir K. Joseph), there is suddenly such generosity. The figure of £600 million for teachers' salaries has been repeated ad nauseam, and that is quite apart from any other aspect of the education budget. Had we such a response originally, we would have been saved the trouble and disruption that has been faced by parents, teachers and this House during the past 18 months or two years. I am not suggesting that everything would have been agreed immediately, but at least the major problems would have been settled.
  We are today faced with a Draconian Bill. Even considering the kind of legislation introduced over the past seven years, I find the measure quite breathtaking. Since 1979 the Government consistently proclaimed a philosophy of non-intervention in industrial matters. We must now draw the conclusion that they will intervene when it suits them. The Secretary of State's excuse, of course, is that he represents the taxpayer. To that we have to say, "What is new?". That has been the position for many years. If the Government feel that it is such a matter of principle, they should have done something soon after 1979. In fact, the Bill is only an excuse to allow the Secretary of State to adopt dictatorial power in education,
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  where negotiation is probably more important than in most other areas of industrial relations. Apart from anything else, the future of thousands of children is at stake.
  In place of negotiations, there is to be an advisory committee. It is abundantly clear that the committee will simply be the tool of the Secretary of State. It can only examine and report to him on such matters as he may refer to it. When it has reported, and there seems to be some doubt whether the reports have to be published—perhaps the Minister can clarify this when he replies—the Secretary of State does not have to accept its recommendations. It is difficult to imagine a more useless body.
  The reasons that the Secretary of State has given for opposing the negotiated agreement are a façade—nothing more, nothing less. He may not agree with the cost or structure proposals in the agreement, but his objection is that an agreement has been reached at all and that a new negotiating machinery has been established.
  The Bill requires that the Government should consult local authorities and the teachers organisations. Given the provisions, and indeed the philosophy, of the measure—I cannot place too much stress on that—does the Secretary of State really think that anyone will believe it is genuine consultation? It will be token consultation, a mere going through the motions. That has already been said not only by union leaders, but by the rank and file members.
  One of the most depressing aspects of the present position is that the Secretary of State simply does not appreciate how far the teachers have moved by reaching agreement with the local authorities. They are now accepting proposals which two or three years ago they would not even have discussed. They are doing that, not because they are entirely convinced of the measures, but because they are genuinely determined to bring about a framework for stability and progress in the education of our children. By failing to recognise that, the Government are sowing the seeds for further disruption.
  Mr. Harry Greenway: I am always interested to hear the hon. Gentleman's comments on education, as he has a long and very real experience in this area. However, does he not think that there is room for further negotiation? Although he is strongly backing the local government and ACAS agreement, does he not think that there should be further discussion on some points? On the question of the 13 points—it is admirable that the unions have accepted some of them, and there is no reason why they should not—does he not accept that they have been the basis of the professional lives of most teachers for many years?
  Mr. Dormand: I am not sure that I understand the hon. Gentleman's question. However, he referred to consultation, and that was one of the points that I was making. The provisions of the Bill do not permit genuine consultation. That is where the Government will come a cropper.
  Mr. Cash: Will the hon. Gentleman give way?
  Mr. Dormand: No.
  The hon. Member for Ealing, North (Mr. Greenway) referred to my experience in education. For seven years before I came to this place I was a chief education officer. We should not overlook chief education officers when we

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  are talking about the merits of classroom teachers. I had my share of problems with teachers—two strikes and so on—but throughout that period there was always a trust between the education committee, the teachers and the Government. I warn the Government that that trust is rapidly disappearing. Indeed, some would say that it has already gone. That is the most important point that I have to make. The Bill could scarcely be better designed to destroy the trust that is crucial for an effective education service.
  I am concerned about a matter on which some agreement has been reached by the Government, unions and local authorities. As I believe that on previous occasions I was the only Member to refer to this, I was glad to hear my hon. Friend the Member for Greenwich (Mr. Barnett) mention it today, and I echo much of what he said. I refer, of course, to the appraisal of teachers—a matter of considerable importance, not least because the Secretary of State constantly refers to the need to recognise good teachers in monetary terms and, presumably, in promotion terms.
  Who is to determine whether a person is a good teacher? Will it be the head teacher, the local education authority adviser or Her Majesty's inspectorate? Or will it be a team of qualified people whose sole function will be to visit schools to appraise teachers ability? I have been associated with all those systems, and there are grave difficulties with all of them. Perhaps I shall be able to dwell at length on that aspect in a later debate this week. I know that there has been agreement by all concerned on six pilot projects, but it is vital that the results of those pilot schemes be scrutinised with the utmost care. I predict that there will be no clear-cut answer, which means that there will be serious problems with the Government's repeated assertions about rewarding what the Secretary of State describes as good teachers.
  The Government are not being fair in not recognising how far local authorities and teachers have compromised to reach agreement. I shall identify five new areas which show that free negotiations work. First, a system of appraisal is introduced for the first time. Secondly, there is a detailed agreement on conditions of service where none existed before. Thirdly, new negotiating machinery is established to replace the Burnham system. Conservative Members cannot have been reading their briefs very carefully, as at least two of them seemed not to realise that the unions had agreed that Burnham must go. Fourthly, a new salary structure is created for the profession. I know that there is still disagreement, but that is a move forward. Fifthly, salary levels are increased to reward effective teaching.
  I have expressed slight reservations about some parts of that agreement, but they are of little importance compared with the steamrollering that will occur if the Government insist on pushing through the provisions of this pernicious Bill. Removing collective bargaining and telling local education authorities and teachers that they will no longer have the right to negotiate is a step so momentous that it goes far wider even than the important sphere of education. I am sure that the whole trade union movement will have seen the immense danger in it. I urge the Government to make substantial changes when we reach later stages of the Bill on Wednesday.
  7.3 pm
  Mr. J. F. Pawsey: The hon. Member for Easington (Mr. Dormand) was somewhat critical of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), but my right hon. Friend obtained substantial sums from the Treasury for teachers. Those sums have now been exceeded by my right hon. Friend the present Secretary of State, showing clearly how greatly the present Administration value teachers and appreciate their worth. I remind the hon. Member for Easington that Houghton was eroded under the Labour Government when inflation reached 27·5 per cent., so the hon. Gentleman is in no position to castigate the Conservative party for what happened in the past.
  If justification is needed for the present legislation. It is to be found in recent statements by union leaders following the ACAS talks in Nottingham. Four out of six unions, representing between a third and half of the profession, have now come out against last month's deal. It seems that only the National Union of Teachers and the Assistant Masters and Mistresses Association remain in favour of that agreement. With the unions in such disarray, there is no possibility of agreement being reached among the unions, let alone between them and the employers or between that lot and my right hon. Friend the Secretary of State. If progress is to be made on pay and conditions for teachers, and if we are to avoid the disruption that has occurred in the past 18 months to two years, it is necessary for legislation to be in place.
  The Bill repeals the Remuneration of Teachers Act 1965 and sets up an interim committee to advise the Secretary of State on pay and conditions of service. It seems to me in the wake of the Nottingham fiasco, that Burnham has clearly outlived any usefulness that it might once have had, and it is time for a change. The Burnham system has become an unwieldy, ineffective instrument, blunted by long abuse. Its principal function now seems to be to highlight differences between the various teacher unions and between them and the employers and my right hon. Friend the Secretary of State. What most Conservative Members find extraordinary is that the Burnham system has survived for so long. It is a dinosaur. It is clearly outdated and must go.
  The setting up of an advisory committee on teachers' pay is an interim measure. It will ensure that real consultations take place with teachers unions as well as with local education authorities. Those bodies will clearly have the opportunity to make a considerable input into the deliberations of the Secretary of State. I believe that the repeal of the Burnham machinery will make it easier for future negotiations on pay and conditions to be truly constructive. Certainly no one wants a re-run of the past year or so of disruption in schools with so much damage to children's education. Paradoxically, however, some schools in my constituency have achieved the best examination results ever and I congratulate the majority of teachers in my constituency on putting the interests of their pupils first. They are to be commended for that.
  Most reasonable people recognise that a teacher's job involves a great deal more than long holidays and free periods, and it is only right that their worth be recognised by adequate remuneration. I very much hope that my right hon. Friend's offer, which amounts to a 25 per cent. increase over 18 months, will be accepted. My right hon. Friend's proposals reflect the fact that teachers' pay had

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  slipped back and they redress the situation. It is significant that the cry, "Back to Houghton," has been conspicuous by its absence lately. That is because my right hon. Friend's offer increases teachers' pay a fraction beyond Houghton in money terms.
  Mr. Weetch: No.
  Mr. Pawsey: I appreciate that it does not restore the situation in terms of compatability with other groups, but 25 per cent. over 18 months is a substantial increase and the Government are putting their money where their mouth is. Anyone who doubts that the Burnham system is overdue for dismantling needs only to reflect upon recent events. No one—trade unions, teacher or Minister—has said a word in its favour, and no one argues for its retention. The one thing on which everyone agrees it that Burnham should go, and that it should go speedily.
  It has been said that this legislation will not of itself guarantee peace in our schools. My right hon. Friend and Secretary of State has been urged for a considerable period to move closer to the teachers' position as expressed at Nottingham. It is fair to remind the House that although my right hon. Friend is being urged to move closer to the Nottingham position, especially on scales, no reciprocal move has so far been made by the unions. Even if my right hon. Friend were to accept the Nottingham agreement, it would not change matters, since the majority of unions have repudiated that agreement. The unions have abandoned the Nottingham position, so there can be no virtue in my right hon. Friend moving in that direction.
  What is now needed to bring peace to our schools is a fair and reasonable contract. If, sadly, the unions cannot agree among themselves on what constitutes a fair and reasonable contract, clearly, in the interests of the nation's children, it is right that my right hon. Friend should take powers to ensure that such an agreement can, if necessary, be imposed.
  The principal difference between the Government's offer and that of Nottingham is that the Government believe that a pay structure must be in place which adequately rewards teachers for added responsibility and ensures that they are well motivated towards better teaching. The Government's structure proposes additional incentive posts, which would be available for about half of all teachers. My right hon. Friend proposes five scales, which will provide the appropriate financial motivation to encourage the development and expertise of the effective teacher.
  The effective teacher recognised by a fair system of appraisal will do much to improve the quality and standard of education in schools. That must be the principal aim of any education legislation introduced into the House. It is significant that, although Opposition Members have developed various themes, we have not heard much from them on the importance of education to the children of our country. They seem to regard education merely as a vehicle for teachers. Although I acknowledge the importance of the teaching profession, equally they should acknowledge the need to ensure that our children have adequate education. It should be remembered that Nottingham exceeded the Government's package by £85 million, and although the hon. Member for Durham, North (Mr. Radice) sought to denigrate the amount of
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  that increase, none the less it still amounts to more than £80 million. That is substantial funding in anyone's language.
  For too long it has been said that our schools have not adequately prepared children for the world of work. It is significant that a discussion paper produced by the "Think British" campaign referred to what it described as "the illiterate generation". It posed the question:
  "Is our education and training system failing British industry and, by failing industry, failing the nation?"
  Sir John Egan, chairman and chief executive of Jaguar plc, has said that there are evident weaknesses in applicants' abilities, which range from basic mathematics to verbal and written communication.
  Even more interestingly, British Rail said:
  "The country cannot be getting value for money from the education system when the present number of youngsters leave school ill-equipped to enter the world of work, with low standards of literacy and numeracy, few if any other skills and no qualifications, leaving employers and further education to pick up the pieces. Too many are totally disenchanted with school. The truancy rate is high and they cannot wait to leave. This suggests that the present system is unsuitable and irrelevant."
  British Rail is not alone in that opinion. Bass plc—here we reach the nub of the argument—said:
  "The quality of education provided depends more on the quality and dedication of the teachers than on the system itself. Regrettably, this quality is variable and the current level of teachers' pay does not encourage the most able applicants. Any improvements in this direction should be related to merit."
  We can almost hear the voice of my hon. Friends on the Treasury Bench making that point, which has been made so well and so often by them during this and earlier debates. That is the voice of practical experience. The argument which is being so clearly advanced is that more must be done to improve the quality and standard of teachers so that, in turn, they may improve the quality and standards of school leavers.
  I have said before in the House that the overwhelming majority of teachers are dedicated to their profession. They do a splendid job, almost despite the pay, but that is now being remedied and Government should be applauded for the action being taken. This Government have given teachers what they have long asked for—remuneration which adequately reflects their responsibility and their ability.
  It is entirely right and just to argue the case for good and effective teachers getting more money. It seems that the only way in which society recognises a professional's worth is by improving the size of the pay packet. If that is a mercenary attitude, it is none the less true. The funds obtained by my right hon. Friend are substantial and will improve teachers' pay by a massive 25 per cent. over 18 months. That can only be described as a hefty increase in anyone's language. Very few of our constituents can claim a similar increase in basic pay over such a short period.
  Like most hon. Members, I am under no illusions about the problems that face teachers in many of our schools today. In my view, a good or effective teacher will earn every penny that he will receive under the new proposals on the table. I hope that the interim committee being set up by my right hon. Friend will include representatives of industry, for it is important that we get practical advice from people who are at the sharp end of wealth generation, as shown by my earlier references to Bass plc, Jaguar plc and British Rail. If our young people are not motivated,

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  trained and educated in the basic skills of literacy and numeracy, British industry will always be at a disadvantage vis-à-vis our competitors.
  It is significant that the "Think British" campaign has argued that the management role of the head teacher is inescapable, and that since his appointment is the key to a school's success it should be subject to the approval of parent representatives. The campaign also argues that a massive expansion of parent power is necessary and that the present monopoly inherent in our education system must be broken. Those are all points which have been taken on board, certainly by Conservative Members. That is why we have supported the Education Act 1986, which gives parents representation on governing bodies equal to that of the local education authority.
  The "Think British" campaign argues a cogent case for more involvement of parents and industry in education. Note the wording which I choose to use. I say "industry" as distinct from "industrialists". It is most important that schools recognise the value of increasingly gearing education to what takes place in factories and offices. Although it may be useful to know about peace studies and sociology, and although history has undoubted attractions, emphasis should be placed in our education system on those subjects which will benefit the pupil when he reaches British Rail, Jaguar plc, Bass plc and all those other companies which exist outside.
  I welcome the Bill. It will restore teachers' pay to a reasonable level and ensure good pay for effective teaching.
  7.19 pm
  Mr. Derek Fatchett: It is always a pleasure to follow the hon. Member for Rugby and Kenilworth (Mr. Pawsey). His debating style reminds me of a football team which likes to have a few shots at the opposition's goal but which is often weak in defence. The hon. Gentleman committed such a defensive error when he said that he had heard no Opposition Member talk about education—
  Mr. Pawsey: About children.
  Mr. Fatchett: Children and education. I remind the hon. Gentleman that the debate about standards, about the amount of money spent on books and about the amount of money spent on school buildings has been led by Opposition Members. When the hon. Gentleman associates himself with that campaign it will be for the first time.
  The hon. Gentleman slipped into making an error that was common among Government Members during the debate. They tried to talk around the current negotiations and to forget the fundamental nature of the Bill. I do not wish to fall into that trap, but I cannot resist making a few comments about the current round of negotiations and about what the Secretary of State said earlier in the debate. Although hon. Members have not mentioned it, I wonder whether it is appropriate for the House to set itself the task of discussing in detail pay salaries, structures and scales and points for individual teachers. We have almost reached the stage where some hon. Members are setting themselves up as experts on matters which are not appropriate for the House. That should be the job of others. It may be the local authority employers or civil
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  servants from the Department of Education and Science. It will certainly be trade union negotiators and teachers, but it should not be Members of Parliament. We are going down a dangerous road by setting ourselves the task of examining individual pay and scales.
  The Secretary of State and some of his colleagues seem to have derived much pleasure from the fact that some of the unions which signed the original ACAS agreement no longer support it. I fear that the Secretary of State, remarkably smugly, is deluding himself about the support for his proposals. He is making a simple mistake. He believes that if people move away from the Nottingham and London agreements, they will move towards his agreement. He seems to derive pleasure from the negative, but he cannot offer a positive in part exchange for it. The Secretary of State is in great danger of running into difficulties, because he is obsessed with undermining an agreement that has been reached voluntarily with the unions.
  I can illustrate that point by mentioning a case in my surgery on Saturday. A group of teachers—members of the Assistant Masters and Mistresses Association—told me that, at no stage during the dispute, were they prepared to take industrial action. However, on Saturday they said something different. They said clearly and determinedly that if the Secretary of State imposed his settlement,they would for the first time in their teaching lives, consider taking industrial action. There was a seriousness and a determination about those teachers that the Government should recognise. The Secretary of State should think about negotiation and conciliation, not about imposition. He said that the door was still open and that he would still have talks. How far is that logically consistent with the powers that underpin the Bill? The Bill would make talking obsolete and would take the powers into the office of the Secretary of State. I have doubts about his purpose in offering those talks.
  I make three points about the abolition of the Burnham machinery. My right hon. Friend the Member for Halton (Mr. Oakes) spoke in great detail and with great conviction about our anxiety over increasing the powers of the Secretary of State. I need not add to that because the point was made with such force and conviction. I simply repeat what my right hon. Friend said: If Conservative Members are worried about centralisation in our state, they should consider the powers that the Secretary of State will assume to himself through the Bill. I hope that at least some of them would have the decency and respect for our constitution not to support the concept of a Secretary of State having such powers and to vote against the Bill.
  The Bill, whether it is only for an interim period or whether it is characteristic of most interim legislation and will become almost permanent, will abolish collective bargaining. I have a simple view: That it is a pre-requisite in a pluralistic democracy that people should have a right to belong to a trade union. An essential characteristic of trade union organisation is the right to bargain with an employer over pay and conditions of employment. In other countries, that right has been recognised in legislation — [Interruption.] If the hon. Member for Leicester, East (Mr. Bruinvels) wishes to show his knowledge of comparative industrial relations, I am perfectly willing to listen to him.
  Mr. Peter Bruinvels: The hon. Gentleman is correct to say that there is a right to belong to a trade union, but there is also an inherent right not to belong to a trade union.
  Mr. Fatchett: Indeed. I had looked forward to greater knowledge than that. However, in view of the hon. Gentleman's record, perhaps my hopes were too high. An obvious corollary of the right to belong to a trade union is the right not to belong to a trade union, and in many industrial relations practices that has been observed. Had the hon. Gentleman listened to my argument, he would have known that my point was that integral to the right to belong to a trade union is the associated right to bargain collectively with an employer. The Bill will remove that right and, in that respect, is a fundamental attack upon democratic rights in a pluralist state.
  Mr. Bruinvels indicated dissent.
  Mr. Fatchett: The hon. Gentleman shakes his head, but he should recognise the reality of that statement. He must also recognise that the rhetoric from the Conservative Benches points in only one direction—to the abolition of collective bargaining for teachers.
  My third point is that the Bill changes, at a stroke, the relationship between central and local government. At a stroke, the Secretary of State assumes to himself the power to determine the pay and conditions of many local government employees. The local government employers will not be involved directly in the process. They will be told by central Government how much they should pay teachers and the conditions under which they should employ them, and they will not have a direct say. That is a damaging and worrying change from the traditional relationships between central and local government. If we believe that local government is an institution which must be respected, we must oppose this power. Conservative Members were elected on a mandate of decentralisation. This is a centralising power that will further weaken local autonomy and democracy.
  We have three fundamental changes: the power of the Secretary of State, the abolition of the democratic right of collective bargaining and the change in the relationship between central and local government. How have those changes been justified? At no stage during the debate have we heard a valid argument to justify those changes. Quite the opposite. We have had one smokescreen after another. No hon. Member, nor the Secretary of State, has tackled the fundamental question in the debate. Let us consider some of their arguments.
  One of the Secretary of State's arguments is that the Burnham machinery creates inter-union rivalry, therefore, we should abolish it and abolish all those fundamental rights. The right hon. Gentleman's knowledge of industrial relations in Britain is none too great if he believes that teachers' pay and teachers' negotiations are the only areas in which inter-union rivalry exists. If we extended his argument it could cover local government, all the Health Service and many other areas. The right of collective bargaining could be taken away from them because of the existence of competing trade unions. That is a specious, weak argument. I am sure that the right hon. Gentleman will come to regret that argument when he considers the way it can be extended into other sectors.
  The second argument which has been put forward today is that Burnham is messy. It is argued that it causes
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  delays and that therefore what we need to do is to abolish fundamental rights. There can be no argument in a democratic society for saying that simply because one piece of machinery is imperfect and inconvenient we should, at a stroke, take away human rights that are an important part of our democracy. There is no justification simply on the basis of bureaucratic inefficiency. There must be another argument.
  The third argument is that concerning the taxpayer; the taxpayer funds the bill and therefore the taxpayer should be the person who controls any negotiation through the Secretary of State.
  Mr. Eric Forth: Quite right.
  Mr. Fatchett: The hon. Gentleman in his new trappist position as parliamentary private secretary—a role for which he is characteristically unsuited—said, "Quite right." I would be happy to give way to him because his contributions are always of great value. Is the hon. Gentleman suggesting that that principle is appropriate for other sectors of local government where the taxpayer pays less than 50 per cent., or, for example, the Health Service, which receives all its money from the taxpayer? Does the hon. Gentleman wish this principle to be extended to other sectors? I will happily give way to him because I realise that he probably does not speak on behalf of the Government and is clearly a maverick voice.
  All the arguments put forward, including the sedentary contribution from the hon. Member for Mid-Worcestershire, do not carry a logical conviction. The Government have not come forward with a case to justify the Draconian powers in the Bill.
  Other aspects of the Bill can be criticised. I criticise the regional variation and the different treatment that will exist between those working in further education and those working in primary and secondary school education. My fundamental criticism though is that this Bill is an attack upon teachers' basic rights and an attack upon democracy in our society.
  I hope that some Conservative Members will support us in our opposition to the Bill not just because the imposition of the current proposals put forward by the Secretary of State are dangerous and risky to the security of education in our society but because the Bill is so damaging and has important consequencies in many other respects.
  We used to say that we looked forward to the day when the previous incumbent in the position as Secretary of State for Education would retire. We used to criticise the right hon. Member for Leeds, North-East (Sir K. Joseph) but I believe that there are some of us who may start a campaign to bring him back. At least one could say of the right hon. Member for Leeds, North-East that he was sensitive to education and sensitive to the nation's constitution. That cannot be said of the present incumbent. That is why we shall vote against the Bill, and I hope that some Conservative Members will join us in the Lobby tonight.
  7.33 pm
  Mr. Peter Bruinvels: I was not disappointed by the remarks made by the hon. Member for Leeds, Central (Mr. Fatchett). He has always specialised in attacking the Government. That is his role as a Back-Bench Member of Parliament. Perhaps he

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  aspires to be a private parliamentary secretary to one of the Ministers for Education. Perhaps the hon. Gentleman would like to be a trappist. I do not know.
  I do not need a lecture on industrial relations because I worked for a former Labour Member of Parliament, Mr. Robert Maxwell, for two and a half years, in charge of personnel. One quickly realised that those people in the union got far better jobs and far better treatment than those who were not. Unless one voted Labour one did not have a cat in hell's chance of keeping a job in the printing industry. I do not need a lecture on that subject.
  I cannot understand the surprise which has been expressed on the Opposition Benches regarding this Bill. Hon. Members heard the Loyal Address that made clear that my right hon. Friend would bring in such a Bill. It also made it clear that the provisions of the Bill were temporary. I would have thought that even those hon. Members on the other side who perhaps, unlike myself, did not benefit from a good grammar school education, would understand what was meant by an interim provision. In fact, two public schools are represented on the Opposition Front Bench but I do not need to name the hon. Members as they are known.
  Recently, I attended the annual prize-giving at Tiffin boys school in Kingston. I listened to the annual report of the headmaster, John Roberts, who stated that, in the past 18 months, there had been no industrial dispute at the school. That is a great credit to the pupils and teachers of Tiffin school. I also attended St. John's in Leatherhead, which is a public school, and that too had not suffered from any industrial dispute. That does show that there are some caring teachers. I do not understand why hon. Members should say that we have cast aspersions on the profession and that we consider that 50 per cent. of teachers are bad. I do not know where that claim came from and it is certainly not my view nor the view of any other Conservative Members.
  We must consider the Bill with some sadness because it was not of our making that the Bill was brought here today. The Bill has been brought here because of inter-union wrangling especially between the assistant Secretaries of the NUT and the NAS/UWT. They were desperate to control the financial and inter-union arrangements. If the unions could have resolved their differences this Bill would not be necessary.
  This is not a draconian measure and I am fully confident that my right hon. Friend is a good Secretary of State. He has shown great dedication and in the short time that he has held this position he has taken up the subject lock, stock and barrel. He does not deserve the criticism levelled at him by the Opposition regarding his mental capabilities.
  With regard to the financial arrangements, my right hon. Friend has proposed a package that all sides of the unions should accept—£3 billion package over 20 months which will give a 25 per cent. pay rise between April 1986 and September 1987.
  It is depressing that , in the meantime, instead of a clear and calm atmosphere, it seems that some schools are still union battlegrounds. That is worrying. What is also worrying is the front page of the Teacher. There is an article dated 8 December which states:
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  "Union members must, by their votes, make it politically embarrassing for the Government to use this legislation to impose its own settlement and to take away negotiated rights from teachers."
  Is such extra-parliamentary activity encouraged by the other side? Some Opposition spokesmen are connected with the NUT and that is significant and worrying.
  What of the provisions of the Bill, which will expire on 31 March 1990? There are different rates for inner city teachers and that is to be welcomed. There are difficulties, for instance, in the city of Leicester, where we need more teachers. Why not pay more to get the best quality? What is wrong with that?
  If hon. Members value the professional standing of teachers they should welcome better pay for good teachers. One should pay a teacher for doing a good job. We should welcome the five incentive posts which, in our proposals, are available for half of the teachers. Why should we not promote our teachers? It is perfectly correct for local schools to decide for themselves with regard to teacher recruitment. My right hon. Friend has been blamed for everything with regard to the teachers and everything that goes wrong in the schools and perhaps is it right that such problems should now be referred back to him.
  In my view the Nottingham talks and those with ACAS have done nothing but foster unrest and produce poor promotional prospects whereby very few people will be rewarded. It is all very well for the NUT to go on about secondary schools, but a number of NUT members in primary schools with whom I have spoken do not see how genuine career development is possible under the proposals that the NUT is propagating at present. We must therefore arrive at a solution that benefits all teachers.
  I agree with the view that too many unions are involved in the teaching profession. That has made it terribly difficult to negotiate in the way that the Government have been trying to do. An issue of principle is involved, in that we must reward the profession well enough to keep teachers in these important roles well into the 21st century.
  If we were to accept the unions' case, more than 25,000 teachers would immediately lose their scale payments. I want all teachers to be guaranteed proper promotion and incentive prospects, and I look forward to the day when the Opposition accept that incentive posts for all teachers should be encouraged. We must therefore pay good teachers more, even though the unions want more for the good, the bad and the ugly. That is nonsense.
  We must look at all the various promotion posts that are available—
  Mr. Andrew F. Bennett: Will the hon. Gentleman give way?
  Mr. Bruinvels: I know that Opposition Members are worried that the Bill will be enacted at once, but it has no possibility of coming to fruition until February-March of next year at the earliest. Until then we must pay for the existing conditions that have been well negotiated.
  The 13 points that have been agreed in the appendix should be particularly encouraged. There is nothing wrong with such an arrangement. Boyle had it in mind in 1963, and we can look at the pilot projects as they come forward and encourage them.
  The Bill will repeal the Remuneration of Teachers Act. That makes a lot of sense, bearing in mind that the

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  Burnham machinery for negotiating school teachers' pay had to be replaced. It was not working well, had become outdated and, indeed, had been in operation since 1919.
  We want to see an interim advisory committee, and that must look at teachers' pay and conditions of service. All hon. Members must be concerned at the way in which teachers are fulfilling their roles. Most of them do extremely well indeed, but even the Opposition have said that Burnham has outlived its usefulness and has become ineffective because it cannot reach agreement as, up to now, the NUT has always had a majority vote. As a result, there have been no genuine agreements.
  We must look to better promotion prospects for all teachers. I appreciate that with falling rolls it will be more difficult as classes will get smaller and some teachers may be surplus to requirements. Some teachers will have to go, anyway, but those coming into the profession want to be paid for the resuls that they achieve. They have agreed to be appraised and that should be encouraged.
  The dispute that has now gone on for two years has cost a lot of time, and disruption has been the ultimate result. However, as I have said, there have been excellent results in many schools in spite of the dispute. Most teachers do not reflect the views of the extreme parts of the NUT or the NAS-UWT because they really care about the children. We must talk more about the children and encourage them to get the best possible tuition.
  There is no doubt that events over the past two years have led to a drop in teacher esteem among the public. The profession has been brought into disrepute by its petty squabbling and its refusal to undertake certain obligations that some of us want to see encouraged. It is only right to clarify teachers' conditions of employment, given that they will get a very good salary. The appraisal that has been agreed must be carried out, as I am convinced that under it all teachers will be rewarded most generously.
  As my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) said, it is remarkable how the Secretary of State has been able to raid the Treasury funds to make so many extra millions of pounds available. That will obviously affect what happens in the next Budget. After all, we are talking about £3 billion.
  On looking further at the pay structure, it will be seen that all good classroom teachers will be rewarded. We shall encourage teachers to take on extra responsibility, for which they will be paid. We must also pay extra for maths and science teachers, as at present there is difficulty in recruiting them. We must pay for such skills, because there is no doubt that teachers of that ilk are in short supply.
  Burnham will be abolished under the Bill and the interim advisory committee on teachers' pay and conditions of service will be set up. My right hon. Friend the Secretary of State will have the power by regulation, if necessary—I hope that he will not need it—to determine pay and conditions. Therefore, the Remuneration of Teachers Act 1965 will go.
  The interim advisory committee will not be a negotiating committee but will consider advice given from all quarters, including the teachers' unions. I hope that senior Opposition Members, who have great knowledge from their days as teachers, will also advise on what they see as being wrong with the teaching profession. I should like the Opposition to criticise far more often some of the power-crazy leaders of the NUT, such as Mr. McAvoy, and the NAS-UWT, such as Mr. de Gruchy, who are desperately waiting in the wings to take over from two
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  seasoned politicians with whom I do not always agree as they are not of the same party as me. I want the Opposition to take on real responsibility. I want pay to be determined properly. I look forward very much to the day when we have a happy teaching profession, and as well as the rewarding of good classroom teachers I want to see better results coming from our schools.
  My right hon. Friend has made provision for the replacement of Burnham, and that will give him the power to legislate on both pay and conditions through the statutory instrument procedure. It might be necessary for my right hon. Friend to move fast, but I hope that he will not have to do so.
  It looks as if between five and nine people will sit on this new committee, and they will make recommendations in the light of financial and other constraints. I sincerely hope that they will not encourage the payment of additional funds over and above those that have already been allocated, which I believe to be the most generous ever. Incidentally, it is clear that my right hon. Friend will be under no obligation to accept that committee's advice. We are therefore looking for peace in place of disharmony in our schools.
  As The Times Educational Supplement said, the question mark is how long all the participants can be allowed to continue to sort out their own agreement before my right hon. Friend the Secretary of State makes his final decision and takes on these "draconian powers". I do not think that they are draconian. I know that the Burnham structure has been proved to be ineffective. I also know that the Bill will ensure that our children are taught in a far better way, and that the teachers will be paid for good and improved results and will be rewarded by genuine promotion opportunities. There must also be flexibility.
  The situation at present is ridiculous, as there are no real differentials on promotion. The 140,000 teachers must be encouraged and should be allowed to get on to a good promotion scale. Promotion prospects will be enhanced and flexibility will be assured. Teachers will be paid according to results. There is nothing wrong with the Bill.
  Without giving any secrets away, Conservative Members have not even been subjected to a three-line Whip because this darn good legislation is needed as the best way to solve the problem. We very much hope that the teachers' unions will come to a speedy solution and that all children will be remembered and put first. We should never forget the children, and we must have happy people teaching them. Teachers need a professional role and good money for the job. Once that is established, they should never be let down.
  7.50 pm
  Mr. Sean Hughes: I am sure that all Opposition Members share the fears that were expressed by my right hon. Friend the Member for Halton (Mr. Oakes), who was worried that the Bill was taking us another step down a dangerous road.
  I appreciate that hon. Members on both sides of the House have said that we should concentrate on the Bill and not on the industrial dispute that has preceded it, but they all spent some time discussing the dispute.
  The Bill should be seen within the timetable and the atmosphere of the recent industrial dispute in our schools. The Government carried out a persistent attack on the integrity of the teachers and on the local education authorities with which they disagreed. That did not work,

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  so they fiddled with the Burnham committee. That did not work, so the Government tried to undermine the negotiations between the teachers and the local education authorities, and that did not work. When the teachers and the local authorities agreed to a package, the Secretary of State announced that he wanted to renegotiate it and that he would wait until mid-February before acting. In the Bill, he is now asking for powers to take away teachers' negotiating rights altogether.
  We should not be surprised, because, as my hon. Friend the Member for Durham, North (Mr. Radice) reminded us, the Secretary of State learnt his tricks at the Department of the Environment, which abolished a whole tier of local government because it had the temerity to disagree with the Government.
  I should like to mention the role, or rather the non-role, of the local education authorities in the Bill. We have become accustomed to the contempt with which the Government view local democracy. The party that now forms the Government—and this has done so for the past seven and a half years—is the party which has paraded itself as the defender of local democracy. Hon. Members will recall the outrage that it expressed when the House debated a national system of comprehensive education.
  In the debate on 4 February 1976 there was a veritable howl of protest by Conservative Members in favour of local democracy. The hon. Member for Brent, North (Dr. Boyson), who is now the Minister for Local Government, spoke from his heart when he said:
  "Education needs a healing armistice so that people can come together and see what the problems are. Instead, we have this highwayman's gun demanding unconditional surrender."—[Official Report, 4 February 1976; Vol. 904, c. 1322.]
  I never thought that I would live to see the day when the present Secretary of State would make the hon. Member for Brent, North appear a wet. However, if we are looking for fairly damp statements from unlikely sources, I refer the House to the Second Reading of the Education Bill on 12 February 1970. Referring to the role of local authorities and central Government, the then Opposition spokesman for education, now the Prime Minister, declared that both local and central Government
  "are elected bodies, both finance the education system, both should have a say in the decision-making process."—[Official Report, 12 February 1970; Vol. 795, c. 1474.]
  The right hon. Lady went further and decried the fact that the word "impose" had figured several times in the Bill. However, she now has a taste for imposition, and everybody is to blame except the Government.
  The Government justify the Bill by referring to the teachers' dispute. They use the most inflammatory language against the teachers. We have had a taste of that from the Secretary of State today. Part of his speech seemed to come from that which he made to his party conference in October.
  Everybody accepts how damaging the dispute in our schools has been, but the blame should be put where it belongs—on the Government's shoulders. At the beginning of the dispute, which, it should be remembered, was concerned with an annual pay award, the Government introduced the issue of teacher appraisal. They tried to pretend that while they were concerned with the quality of education, all that the teachers were interested in was filthy
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  lucre. The fact that the largest teachers union had already committed itself to appraisal was, of course, conveniently ignored.
  Even after my hon. Friend the Member for Easington (Mr. Dormand) had pointed that out, Conservative Members still persisted in not seeming to recognise that the teachers and the LEAs had already agreed that the Burnham Committee should be replaced. The teachers accept that because the Secretary of State picks up about 46 per cent. of the bill, he should have a powerful role. Section 7(1) of the agreement between the teachers and the LEAs provided for a national joint council in which to carry out those negotiations. However, macho politics demand that there must be victory, and above all the Government demand that the teachers must be vanquished.
  The Government's conduct of the dispute has proved that they have been involved in a financial rather than an educational exercise. The Prime Minister's paranoia with the public sector borrowing requirement has been the core of the problem. The gaff was blown earlier this year when the former Minister of State, the hon. Member for Bath (Mr. Patten) argued in a television programme on 2 March that if there was greater demand for more public spending on education, the money would be found. So, the former Minister of State—whose brief tenure of that office was meant to add style to the Government's case—said that there was more money if only people would demand it. However, the previous Secretary of State for Education and Science, the right hon. Member for Leeds, North-East (Sir K. Joseph), spent the whole of the teachers' dispute telling us that there was no more money, so it did not matter who demanded it. The present Secretary of State has conveniently found more money.
  One of the most insidious aspects of the Bill is the power to allow the Secretary of State to impose what could be a regional, area or even a school-based settlement. That idea was trailed earlier this year in the Audit Commission report. It stated on page 67 that what might be appropriate in, say, Huddersfield as an inducement to mathematics teachers would be inadequate in Newbury, where computer software skills are in particular demand. Depending on the subject, the market price in Newbury might, by the same token, be excessive in Penzance. Hence the fears that have been expressed on that point by my right hon. and hon. Friends. Those comments—not the Government's much-paraded belief in quality—form the truth of the matter.
  The greatest travesty of the Bill and, indeed, of the whole education debate during the lifetime of the Government, has been the assertion that the Government are concerned with quality in education. In this country we have always had one of the most divisive and unequal education systems in the Western world. The education system in Britain today is based on postal districts, and the Secretary of State's proposals, including the Bill, will exacerbate that. The effect will be exactly the opposite to that predicted by the Secretary of State.
  I have never held that Government should interfere in our every breathing moment, but I do believe that the Government set the tone for society. This Government have certainly done that. They have not shown any urgency in putting right the glaring wrongs in our education system, but they moved quickly enough—with indecent haste—over the Bill, which was published last week, has its Second reading today and its remaining

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  stages on Wednesday. The Government's arrogance has been breathtaking. The Secretary of State may exude the arrogance of some of his colleagues, but he cannot legislate for good will, and he cannot impose a spirit of co-operation on our schools.
  Mr. Flannery: I see the Secretary of State sitting there, and I wonder out loud whether the idea is not merely to rush the Bill through the House of Commons and get it through the House of Lords quickly, but to get Royal Assent by 19 December so that the right hon. Gentleman can go to the meeting and say that it is accomplished. Can the Secretary of State tell us whether that is his plot?
  Mr. Hughes: I shall give way if the Secretary of State wishes to reply to my hon. Friend.
  The fear expressed by my hon. Friend and by others of my right hon. and hon. Friends is that the Bill represents a sinister move towards the central control that the House should never allow. As my hon. Friends have said, I hope that some Conservative Members will join us in the Division Lobby in voting against the Bill.
  8 pm
  Mr. William Cash: The need for the Bill has become increasingly apparent over the past few years. The recent activities and attempted settlements in Nottingham, Coventry and London have added fuel to the argument that something needed to be done. I commend the Secretary of State and his team on having grasped this extremely difficult nettle.
  I have great respect and admiration for the teaching profession. I was a governor of one school for nine years and of another for about four years, and I was always conscious of the difficult role that the teacher had to play. I am also aware of the fact that although much criticism is heaped upon teachers because sometimes people say that they have long holidays and they do not really have to do as much as others in similar occupations, the reality is that the teaching profession has been through a difficult time. That is symptomatic of a much deeper problem that is affecting society.
  As with other areas of professional activity, in the teaching profession, self-regulation, the manner in which people respond to their professional duties, and the need to put the public interest first—by which I mean the interests of the children and society as a whole—is something that has been increasingly lost in the welter of argument about pay and remuneration.
  I was on the Committee that considered the Financial Services Bill last year and I am just about to go on the Committee dealing with the Banking Bill. I was also on the Committee that considered the Administration of Justice Bill, which dealt with similar matters. I argued consistently and vigorously for tougher and more responsible self-regulation in the City. In the medical and legal professions, in journalism and, indeed, the BBC if one is allowed to mention it, self-regulation—the extent to which the balance is struck between power and responsibility, and the extent to which people regulate the activities of colleagues in the public as well as the private interest—has become increasingly a matter of concern in modern society. I have given several good illustrations of that. It is symptomatic of what is happening today, in a time of significant change. Emphasis must be placed upon what is really being done by the professions in question and what
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  is being given by those providing services in the City, in law, or in journalism. They must understand that the object of what they are doing is every bit as important as the activity in which they are engaged.
  As a legal adviser to the College of Preceptors for many years I have been made aware of the intense importance placed by many teachers on the qualifications and standards of excellence that the teaching profession seeks to achieve. This is the point of an intervention that I made earlier. Unfortunately, unlike the chartered bodies, which made quality, excellence and objectives their first priority, the invasion of pure unionism into teachers' activities has meant that the profession has been edged out by the unions. It is particularly interesting to note the increase in the numbers in the Professional Association of Teachers. I repeat that I have the highest regard for many teachers. I have them in my constituency, and I know how dedicated they are. I shall not be told either by Labour Members or even by my hon. Friends that that is not so. They work immensely hard and have a difficult role to play. On the other hand, it is becoming increasingly evident that some teachers are disturbed by what is going on in their own area of activity. Much of that is directed at the activity of the caucus of the teaching profession that has gained control of the unions.
  I have to say to the hon. Member for Durham, North (Mr. Radice), whom I know to be an honourable man, and who is fair-minded, that he knows perfectly well that underneath the welter of confusion and of economy with the truth with which his speech was spattered, the responsibility that his party bears for the fact that we have difficulties today should not be underestimated.
  Mr. Radice: An outrageous remark.
  Mr. Dunn: Does my hon. Friend accept that the problem is not so much the caucus within the union organisation but sometimes the caucus within the caucus? When one examines the role of the Inner London Teachers Association, in particular, within the National Union of Teachers, it is not surprising to note the developments in Brent, Haringey and other such boroughs.
  Mr. Cash: Absolutely. I entirely agree with my hon. Friend. He has had the greatest possible experience of teaching and education.
  I participated in the passage of the Education Bill when we came back after the summer recess. I voted on sex education. I made no apology for it then, and I make no apology for it now. I believed that it was essential that Parliament should protect parents and children from the activities, not of teachers as a whole, for obvious reasons, but of the perverse, loony Left to which my right hon. Friend—
  Mr. Dunn: Honourable Friend.
  Mr. Cash: I retract that. My hon. Friend referred to that. It is the caucus within the caucus, that part of the clockwork orange, with which we are primarily concerned, and a rotten orange it is too.
  I had the misfortune to take part in a phone-in on local radio a few years ago with Mr. Doug McAvoy, and he and I discussed questions that are germane to the matters raised in the Bill. I was deeply concerned about his attitude and the question that arises—
  Mr. Radice: What connection has this with the Bill?
  Mr. Cash: I am coming to that point. The need for the Bill has been demonstrated amply by the disarray within which that caucus within a caucus has operated in the past two years. It has done a disservice to education and to teachers as well as to parents and children. Labour Members are misleading themselves if they underestimate the extent to which parents are deeply worried about the way in which this exercise has been conducted by the unions over the past few years.
  The criticisms levelled at the Bill by most Labour Members have been tinged with a certain air of unreality, and have been without a sufficient sense of proportion. The Bill provides a window of opportunity for the teaching profession to get its act together in the remaining months before the next general election. We heard much about the imposition of draconian powers and controls by my right hon. Friend the Secretary of State through the Bill. However, Labour Members, including the hon. Member for Sheffield, Hillsborough (Mr. Flannery) have not read the Bill. This came out over and over again as I listened to one version of the Bill after another, from the Opposition Front Bench spokesman, from the Opposition Back Bench Members and from the now, as all too often, absent alliance Members. They come and go, as Bacon once said, like bats that fly in the night.
  The Bill provides an opportunity for a negotiated settlement on a sensible basis, building upon the very discussions that have already taken place. The hon. Member for Durham, North is laughing. He must be laughing up his sleeve. He remarked about the good that took place during the course of the discussions, which he must know were a good basis to build upon. Instead, he carps and criticises.
  The Bill is a cautionary and provisional measure. It is permissive only. It provides an opportunity for my right hon. Friend the Secretary of State and the unions to come together at this late hour and ensure that there is a reasonable settlement before these powers need to be put into effect. Clause 3 says that where the advisory committee has reported to the Secretary of State on any matter "he may, after consulting". It is worth bearing in mind that the word "may" has not been substituted by the word "shall", which means that the provision is not draconian and does not impose controls. It is permissive only.
  Mr. Radice: Come off it.
  Mr. Cash: The hon. Gentleman gave us the benefit of his thoughts earlier. I am reading from the Bill. He was reading from the recesses of the prejudiced mind that he has on this subject.
  Mr. Flannery: Says the unprejudiced speaker.
  Mr. Cash: The hon. Member for Hillsborough pays me a compliment. He is right to say that I am an unprejudiced speaker. He and I both come from Sheffield and he knows that there are no prejudiced people in that part of the world.
  The Bill says that the Secretary of State "may, after consultation". The hon. Member for Easington (Mr. Dormand) insisted that there would be no consultation and that any reference to consultation was derisory and amounted to nothing. I sought to intervene in his speech, but he decided to leave me to make my own remarks later
  92
  on, for which I thank him. Consultation is governed by well-understood legal principles, which show that there is a significant difference between "may" and "shall". The Bill does not say "after they may have consulted" but "after consultation" which means after they shall have consulted. Where there is a requirement to consult, there is an obligation to listen, within a judicial and proper framework, to the representations made by the people who are engaged in the consultation. It is not just "take it or leave it." We have to listen to what people say and take it into account. It does not mean that we have to do what the person has said. Therefore, I commend the provision because it will ensure that the views of those who wish to be heard will be heard.
  It has been suggested that the advisory committee is a strange body, which will be put together by the Secretary of State simply to get the views that he wants from the committee. I remind Labour Members of what happened in the case of the BBC recently when we appointed Mr. Hussey to the position of Chairman.
  Mr. Weetch: We!
  Mr. Cash: I should say that whoever was responsible appointed Mr. Hussey. When an appointment is made to a body, be it the BBC, the advisory committee, or, to go back to my earlier reference, to the City, under the Financial Service Act or the Banking Bill, those persons are appointed to what is effectively a statutory body, and they acquire significant independence by virtue of that appointment. Another important point, which I ask hon. Members to remember, is that these people are subject to review, so it follows that what they do acquires independence by virtue of their appointment.
  It would be a great mistake for Labour Members to imagine that the members of the advisory committee would be nodding automata. They would be nothing of the kind. They would be significant persons with independence and an opportunity to speak on behalf of the main interests that were represented on the body, including in particular the public interest and the national interest.
  The point that I wanted to make earlier, at the beginning of my speech, concerns the vacuum between power and responsibility, which is the consequence of present negotiating machinery. There is the Department of the Environment on the one side, with its connecting links with local education authorities, and the Department of Education and Science on the other, and the unions on the one side and the profession on the other. This has created a vaccuum within which trust has gone out of the window. The Bill and the mechanism that it provides, and the advisory committee that will be set up, will provide an opportunity for that trust to be reintroduced in the teaching profession. That would be a tremendous advance and would provide the mechanism by which this Bill should and could operate.
  One of the problems of the procedural arrangements for negotiating teachers' pay was that in the Wilson era there was a breakdown in the concordat between the teaching profession, the Department of Education and Science and the negotiating bodies. This Bill fills the gap created by the breakdown of that concordat. It would be an enormous mistake if the Opposition or people in the teaching profession imagined that there is a draconian objective in the Bill. The Bill is justified precisely because the existing arrangements have broken down.

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  There is no doubt that the pay offer made to the teaching profession is reasonable. Under the previous Administration, teachers' average pay had fallen in value by 13 per cent. from the level set by the Houghton award. Since 1979—this is directly germane to teachers' pay—it has been restored to the value set by Houghton, and the Government package would take pay 10 per cent. above Houghton by October 1987—if we assume a rate of inflation rising no higher than 3·5 per cent. It is precisely because the negotiating machinery has broken down, even though this extremely good offer has been made, that we need to have the kind of fallback position that the Bill provides.
  I should now like to turn to the conditions of contract. I have discussed with the Minister of State the matter of competitive sport. Many things need to be included in the conditions of contract. I hope that they will include not only the need to ensure that there is proper coverage for absent colleagues, that essays are properly marked and that parents have an opportunity to meet the teachers—basic things like that—but also that competitive sport will be covered.
  Education is the mainspring of the nation's future and just as in past centuries its importance was recognised, so today, in this modern and complex society when we are going through a time of massive change, it is essential for teachers and the teaching profession to be able to assess themselves by using the appraisal system so that there is a proper relationship between headmasters and the other members of the teaching staff and a proper balance between administrative and teaching staff. That needs to be done on a proper and well-paid basis and the negotiations have not so far provided for that. However, the Government's offer provides it, and that will ensure that we have a good and effective education system, not simply for the benefit of teachers or the Government but for the benefit of the nation as a whole. It must be for the benefit of our children because they are the trustees of the future. They must be given the opportunity to ensure that Britain becomes as great as it was in the past.
  The Bill is a good mechanism for ensuring that education and the opportunities it provides for the benefit of the nation will not be destroyed by selfish disputes between caucuses within caucuses—the clockwork orange of which I spoke earlier—in unions that are more interested in remuneration than in the public interest.
  8.25 pm
  Mr. Martin Flannery: As a backcloth to the Bill it is necessary to say something about the beginning of the teachers' struggle. The most charitable thing that I can say about the Bill is not that Conservative Members have not read it, because I think they have, but that they do not understand exactly what it is. Its impact will be tremendous, and Conservative Members do not know that. However, they will learn.
  The Minister spoke in his usual unctious, glib manner and had his permanent smile on his face as if he was not doing anything wrong. That made me think that Conservative Members have long forgotten how the dispute began. Almost two years ago the Government made an offer of 4 per cent. to teachers. That was approximately 3 per cent. below the rate of inflation. Of course, the teachers did not accept it, because not only had they lost everything that had ever been awarded by
  94
  Houghton, but they were desperate. Well-heeled Conservative Members talk about the teachers as though they are greedy. Bearing in mind the money and the shares held by Government Members, it is nauseating to hear them hurl endless abuse at the teachers who, with pitiful wages, were honourably trying to do the best they could to teach our children. That abuse had the effect of driving teachers more deeply into their struggle.
  The unseemly and indecent haste with which the Government are pushing the Bill through is a measure of their desperation. When the Minister came in for a few minutes a short time ago and smiled across at us, I utilised the opportunity to make an intervention during the speech of one of my hon. Friends to try to make the Minister say that we were debating the Bill on two days this week and that by 19 December the Bill would receive Royal Assent. The Minister could then go to the powers that be among the teachers and say that he had got it.
  The only time that I can remember when such unseemly haste appeared to be somewhat seemly was when war was imminent and the Government had to rush through a Bill. Other instances that come to mind are when the Birmingham bombings took place. When terrorism intervened, the Government had to rush a Bill though and, prior to that, when the outbreak of violence in Northern Ireland called for something quick to be done, if I remember rightly a bill was pushed through within a day to enable us to send troops to Northern Ireland. This time there is no need for such haste; it is simply that the Government are frightened.
  By a vote of 84 per cent., on a turn out of 89 per cent., the Scottish teachers decided that they were still opposed to the offer. I went out this evening for a short time hoping that I would be called about 8 o'clock, but then there was a long speech from the hon. Member for Stafford (Mr. Cash), who seems to have disappeared from the Chamber. When I was out, I saw the headline "Victory" in a newspaper. The story was about Mr. Chirac, who introduced a draconian bill in France. As a result, he and his Government have suffered a major defeat, even though their Bill was not as draconian as this one.
  Anybody who does not believe that does not have to accept my opinion. The latest edition of the journal Education states:
  "New Bill gives Mr. Baker an awsome armoury of powers. Tyrannical powers, unprecedented in peacetime, are bestowed on the Secretary of State for Education and Science in the Bill which was given its first reading in the Commons last Friday."
  The Bill came out last week and had its First, so-called, Reading on Friday. It is being debated today and again on Wednesday, and we are all supposed to be quiet about the Draconian powers that it provides. The only charitable thing that I can say is that Conservative Members do not know what they are doing. The Bill will unite the teaching profession, no matter how disparate it appears to be now. There will be serious trouble as a result.
  The whole trades union and Labour movement is watching the Bill with great care, because all unions will be in serious trouble if it goes through. Mr. Willis has said:
  "We deplore the attempt of Kenneth Baker, the Education Secretary, to remove teachers' collective bargaining rights … Have he and his colleagues really learned nothing from GCHQ? … I am sure that they"—
  the Trades Union Congress general council—
  "will share my view that unless the Government scrap this ill-conceived legislation, they are risking further industrial unrest in schools, damage to children's education and another major rift with this country's trade union Movement."

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  Far more people than the sparse audience in the Chamber today are watching what happens.
  I hear attacks on Burnham, but the Government made it impossible for it to continue to do its work so, finally, everybody had to agree that it must go, but what will the Government put in its place? The Burnham committee was democratically elected. In its place we are to have an advisory council, the members of which are handpicked and appointed by the Secretary of State. He will also appoint the chairman and deputy chairman and lay down what the committee has to do. If that is democracy, I can only say that the Government are drunk with power and dizzy with success. The Bill abandons negotiation. That is why the unions are watching it with great care. It renders unions unnecessary except as groups of people who have discussions but no power. That is why Mr. Willis says that the unions are watching.
  The Bill is the most important concerning education since 1944 as it will change the face of British education unless it is thrown out. We should consider what powers the Secretary of State is taking. Clause 3(1) says:
  "Where the Advisory Committee has reported to the Secretary of State on any matter, he may, after consulting—

  (a) such associations of local education authorities as appear to him to be concerned and any local education authority with whom consultation appears to him to be desirable, and

  (b) such organisations representing school teachers as appear to him to be concerned."

  Subsection (6) says:
  "The Secretary of State may by order made by statutory instrument coming into force before 1st October 1987, without any report of the Advisory Committee but after consulting—

  (a) such associations of local education authorities as appear to him to be concerned and any local education authority with whom consultation appears to him to be desirable, and

  (b) such organisations representing school teachers as appear to him to be concerned".

  The right hon. Gentleman's power reeks. The Bill is so Draconian that if it goes through it will change everything. The schedule empowers the Secretary of State to put in position those whom he wants to put in position.
  The secondary school heads have said that they will not put up with a Bill which does not give them the democratic right to be on a committee which discusses their affairs. That is true of all of the unions which are fighting. What the Bill implies for education is quite unbelievable. As I said recently to the Secretary of State, if he had planned disruption in the classroom he could not have done it more brilliantly. It is undoubted that there will be disruption. No matter how provoked we are, the Opposition hope that we can get through this struggle without the disruption which we fear is inevitable.
  The Bill abolishes the right of teachers to negotiate on pay and conditions. In place of negotiations, it establishes an appointed advisory committee with an appointed chairman and deputy chairman. The committee would report only on matters which were referred to it by the Secretary of State. Local education authorities, after conducting consultations, would be compelled to implement the Secretay of State's conditions. Different salaries would be paid in different areas if the Secretary of State wanted that. That would produce absolute chaos, but no Conservative Member seems to understand it, no matter how high or low he is.
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  The Government's approach, and that of the Minister, is one of diktat. It will unleash a new struggle which I believe will unite the teaching profession as never before. It will have Draconian legislation imposed upon it. We talk about the teachers being in loco parentis. The Minister is here in loco Draconis. He is imposing on teachers a situation which they have not experienced before. Conservative Members may smile, but we should face reality. There has been a two-year struggle and we have the Bill because the Government can see no way out by negotiation. They can see a way out only by imposing their will.
  The Secretary of State does not seem to have a scintilla of a glimmer of an understanding of what he is unleashing. He and the Government must think again. It is time for wiser counsels, not peremptory diktats, and I hope that the Government will think about the matter more before the Bill goes through.
  8.37 pm
  Mr. Patrick Thompson: I am pleased to have an opportunity to speak in support of the Bill. I am also pleased to speak after the hon. Member for Sheffield, Hillsborough (Mr. Flannery), who was for many years a member of the teaching profession before becoming a Member of Parliament. I also was for many years a member of the profession before becoming a Member of Parliament. That proves, if anything, that no one teacher can stand up and say that he speaks for all members of the teaching profession. I know from my constituency that there are as many views about the Bill and about education as there are teachers. I am sure that the hon. Member for Hillsborough will not disagree if I say that he cannot claim to speak for the whole teaching profession any more than I can.
  It has been the habit of the Opposition to try to give the impression that they carry the torch for the entire teaching profession. They represent the views of many teachers, I know, but they do not represent the views of all teachers. The Opposition have tended today to put the view of only the NUT. That is fair enough, but we must not regard that as the general view of the teaching profession.
  There is no doubt that the Bill is about the way in which education is run, and it is wrong for anyone to say that it is just a little Bill which will not last long. I am sure that all hon. Members recognise that it is a highly significant measure which sends out signals for the future of education which we should debate thoroughly. Education is too important to be submerged in a bitter political conflict. We must get it right. I support the Bill, but I agree that we must consider its implications outside the immediate party political controversy.
  I joined the teaching profession in 1960 after a short spell in engineering. I taught physics in Manchester and my wife was also a teacher. She became a senior mistress in Manchester and between us we have long experience of education in various parts of the system.
  I remember my first impressions on joining the profession. I found dedication among teachers and, certainly, low pay, because pay was not good then, just as it is not as good as some would like now. I found a divided profession, because as now, there was a multiplicity of unions. There is no point in teachers pretending that they are united; I know that they are not. It is a sad fact, though

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  some of the reasons for that state of affairs are good historical reasons. The Government must take that fact into account when arriving at their important decisions.
  As a new teacher, I found that there was not enough emphasis on in-service training for new teachers. That is probably still true. I found that there was not enough incentive, leadership or emphasis on career development. As a result, many square pegs ended up in round holes, and that may still be true.
  Teaching is a vocation and I agree with what my hon. Friend the Member for Stafford (Mr. Cash) said when he waxed eloquently about the importance of professional standards in teaching. Teaching is more than just another job. It is a vocation and teachers usually choose to go into teaching because of their enthusiasm to help children. Like many hon. Members, I pay tribute to the good work done by teachers, especially in my constituency. That is all part of the good side of what is happening in our schools.
  The hon. Member for Greenwich (Mr. Barnett) talked of misunderstandings about incentives, but I felt that he misunderstood the Government's aims in the Bill. I agree with him that it is not the slightest good introducing incentives that involve payments by exam results. That sort of thing is superficial nonsense and should be rejected at the outset, but I see nothing of that sort in the Government's proposals. If I did, I should speak against them.
  However, the fact that one speaks against ill-advised incentives does not mean that one is against incentives and motivation generally. I was sad to find during my time as a teacher that there was a lack of motivation and incentives. We must find the right motivation, the right incentives and the right leadership to get the best out of our teachers.
  Mr. George Park: When the hon. Gentleman and his wife were teachers would they have been content to be told by a Minister, of whatever political colour, what their salary levels were to be and that they could not negotiate through their chosen representatives?
  Mr. Thompson: I never took any part in the political activities of teachers' unions and I concentrated entirely on education in the classroom. My impression at the time was that various results of the Burnham procedure were imposed on me. I had no complaints about that, because I did not spend all my time wondering about what the next salary increase would be. The hon. Gentleman misunderstands the Bill.
  Mr. Weetch: My hon. Friend understands it very well.
  Mr. Thompson: Well, the hon. Gentleman's understanding is different from mine and I do not see the dangers that he sees.
  Judging by the results and the effects on the teaching profession, the local education authorities and the Burnham procedures have failed to address the various problems that I have mentioned. We have to find a new way. That is why I support what my hon. Friend the Member for Salisbury (Mr. Key) said about the Bill being a challenge rather than a threat. The Bill introduces a radical change and can be seen as a threat or a challenge. I believe that hon. Members and members of all the teaching unions, whether or not they are involved in union matters, should see the Bill as a challenge and an
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  opportunity for the future. I know that that is the spirit in which the Secretary of State has made his proposals. To suggest otherwise is to do a grave disservice to the serious thought that has gone into the Bill.
  The hon. Member for Durham, North (Mr. Radice) did not explain why, when or how he would reform Burnham.
  Mr. Radice: Of course I did. The hon. Gentleman was not listening.
  Mr. Thompson: At least the hon. Gentleman concedes that there is a need for change. I favour the abolition of the Burnham procedures.
  I think that all hon. Members would agree that if the current negotiations could proceed to a conclusion that was acceptable to the Government and to Parliament, that would be the best outcome. I have heard no one suggest that an imposed settlement would be the best way forward. However, we cannot afford month after month of the sort of uncertainty that our schools have had to put up with during the past few months.
  Mrs. Elaine Kellett-Bowman: I was at the University of Lancaster on Friday evening and I spoke to various new undergraduates. Several said that their prospects had been seriously damaged by the strike and that some of their friends had had to repeat a year. They felt strongly that a conclusion should be reached, and they were very much behind the Government.
  Mr. Thompson: I welcome that intervention, because I am trying to make the point that the Government have the responsibility for ensuring that the uncertainty of previous years, and particularly of the past year, comes to an end. I know that the vast majority of professional teachers, who have no axe to grind, will be thankful if the uncertainty and continual wrangling over pay comes to an end. Although the most desirable solution would be a negotiated pay settlement that everyone was happy about, the Secretary of State cannot allow the uncertainty to continue.
  The most important point is that pupils suffer from the strikes. As an ex-teacher who would not have thought it right to go on strike in any circumstances, I am sure that we all hope that such action will never take place in our schools again. It has had a deplorable effect on the schools and on the children, and there is nothing good to be said for it.
  I am striving for a better teaching profession with a better pay structure and more money, which is already on the table, available. That is not helped when industrial action occurs in our schools. Throughout the country that has reduced respect for teachers and as an ex-teacher I take that seriously.
  I look to a future where decision-making is pushed more into the schools. Therefore, I do not see the danger of centralisation, to which Opposition Members have referred. I see an end to too much bureaucracy and too much intervention by the Secretary of State. I see decision-making being moved more towards head teachers. That is Government policy and something which we are keen on. I also see increasing flexibility over pay.
  I should like to see head teachers having more influence than they have over the way in which pay is distributed within a school. That is why I agree with the hon. Member for Ipswich (Mr. Weetch) that it is unsatisfactory to have an over-rigid pay structure. I went along 100 per cent. with

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  part of what he said. It is not good for the teaching profession to have scales 1, 2, 3 and 4, as we have had for many years. We need a more flexible system. However, I could not agree with the hon. Gentleman's attack on the Government's proposals. He failed to realise that they would be more flexible on promotion posts than the present system.
  I look forward to an era when education is free from the political differences and activism which we have seen recently.
  Mr. John Powley: Does my hon. Friend agree that we should view the Bill, not in isolation, but together with the Education Act 1986? The advantages of this Bill should be taken in conjunction with the great responsibilities given to parents, governors, and teachers properly to manage their affairs and the curriculum within a school.
  Mr. Thompson: I agree with those remarks. We are looking for responsibility to be taken within schools by school governors and head teachers and for less devolvement to bureaucrats. I support that.
  I speak out strongly against the type of political involvement that we have had in schools recently. Would it not be good to turn on the television set, and watch a news programme where those who spoke about education were, not politicians and trade union leaders, but teachers and head teachers? I would not care what their political views were, but it would be good to see educators talking about education. I look forward to that era.
  The Bill gives an opportunity for a fresh start. With good will—and there should be good will from all sides of the House because this is too important a matter for party political bickering—it can lead to a brighter future. Indeed, it will lead to a brighter future for our schools, teachers and pupils. Therefore, I hope that everyone will tackle the Bill in that spirit. I support it with enthusiasm.
  8.53 pm
  Mr. Ken Weetch: In opposing the Bill I must first say that the Government have been completely disingenuous. They have said that the Burnham machinery is defective, but that does not lead logically to the complete demolition of the negotiating machinery. Over the years the teachers' bargaining machinery has certainly creaked at the joints from time to time, but that in no way justifies sweeping aside the whole machinery. That does not follow logically, nor is it justified.
  Secondly, if the Government could have chosen one issue which would provide a recipe for continuing discontent in the teaching profession, it is this issue. What group of workers from whatever occupation will stand aside and see their negotiating machinery destroyed? In a democracy, part of one's dignity, wherever one works, is to have a just say in the negotiation of one's conditions of work and salary. By sweeping that aside, the Government have ensured that there will be not stability in our schools.
  The Government were right to emphasise the need for stability for the good of education. Unfortunately, in the Bill they have provided the conditions that will determine that the reverse will happen. The Bill effectively tramples across the negotiating machinery for determining teachers' conditions and salaries. It is ill advised and autocratic. It
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  is based on petulance—the Secretary of State has been unable to get his way over the distribution of the money available, so he has taken his football home and dug up the pitch.
  The House should vote against the Bill for several reasons. It is dictatorial and contrary to the principles of free collective bargaining. Earlier it was pointed out that teachers have been singled out for tyranical treatment. Indeed, the word "tyranical" was quoted from one of the teachers' employers—the Association of County Councils.
  Pay bargaining in the public sector involves a collection of methods, and when one looks at other groups of workers in the public sector one can see a variety of them. It serves large parts of the Civil Service, The National Health Service and many people employed in local government. In some areas there are review bodies and in others there is indexation. But this Bill subverts the collective bargaining machine of one particular group of public service workers.
  When the Secretary of State opened the debate I listened carefully because I was waiting for him to say what, if the collective bargaining machinery represented by the Burnham committee had proven defective over the years, he proposed to put in its place. I am glad that he is here to listen because he made no proposals either to identify the weaknesses in the Burnham machinery or for its reform. There was very little that was constructive about collective bargaining in the Secretary of State's speech. It was merely a presentation of the Bill which sweeps the current bargaining machinery aside. That is dictatorial and it is the first reason why the Opposition will vote against the Bill.
  The Bill is part of what I would call a sinister syndrome—entralisation. Centralisation is a pretty odd thing to come from a Conservative Government whose political philosophy, I thought, was based on devolved power. It is an odd political argument to be coming from the Conservative Benches. It is not the first example of centralisation that we have had from the Government. We have had it in local authority finance and the proposals for the new technical colleges that the Secretary of State is proposing. The whole approach to local government is now moving towards a quite and increasing power at the centre. That trend is a pretty sorry one for British education because the tradition of British education has been completely different. It has been based on local participation, free collective bargaining and on flexible responses to conditions in localities. In fact, British education's great strength has been the devolved responsibility to the localities. We are now seeing a substantial transfer of power to the centre, and it is sinister.
  Let us take one step back from the argument about the machinery and look at the Secretary of State's motion for bringing the Bill before the House. One of the motives is that he has the view that there should be more pay differentials in the structure of teachers' salaries in schools. The argument is not from the point of view of two extremes. It is not an argument about no differentials or a great number of differentials. It is a matter of more or less. My argument is that we should need fewer differentials, not more, in the structure of salaries. I say that for a number of reasons. The editorial of The Times on 26 November effectively sums up the argument. It says:

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  "But whereas the ACAS deal gives most to those who do least well, extending the rewards for grade one and two teachers, the Government wants to introduce incentive posts for good teachers".
  Who told the Government that all the good teachers hold posts of responsibility? There are a great many teachers up and down this country who do not hold posts of responsibility and never will because they wish to stay in the classroom where there is a real relationship with the children.
  Mr. Kenneth Baker: My proposals provide for them.
  Mr. Weetch: The Secretary of State should listen because I am making a fair point.
  I have been a teacher on the basic scale in my time and I have held posts of responsibility. I can tell the Secretary of State that some posts of responsibility are given for some weird and wonderful things. They have caused more division within the teaching profession over the years than anything else. If there are more of those differentials the teachers who remain on the main professional grade, on the basic scale, will say to the people who hold responsibility, "You get the money, you do it."
  The Minister of State, Department of Education and Science (Mrs. Angela Rumbold): That is extraordinary.
  Mr. Weetch: It is not extraordinary, it is the truth. In fact, we should say that there is a main professional grade which is well paid and then there would be an integration of responsibility, not fragmentation.
  Mrs. Rumbold: It is a most remarkable statement to say that professional people will tell others who have responsibilities that it is their job and that they should get on with it and that they will not be teaching in a classroom and doing the job they are employed to do. That is a most extraordinary view of teachers.
  Mr. Weetch: I did not say that. I said that if a main professional grade was established which was well-paid, teachers in any school would work together in a co-operative spirit. Once one starts singling out one from another, especially on doubtful criteria of responsibility, the fragmentation will start from then on. I do not know if it is a question of "ought"—whether it ought to be so—but that is precisely what will happen and, indeed, has already happened in many schools.
  Even though the results of the negotiations were not quite what the Secretary of State wanted, it would have been far better to let recommendations emerge from the teachers rather than have them imposed from outside. Although the Secretary of State might get away with that in the short run, he is providing a formula for long-term discontent. I appeal to him. Taking away the right of teachers to bargain collectively in a manner than they are entitled to expect in a democracy will send morale even lower.
  The Secretary of State has put forward no long-term proposals for collective bargaining reform. I understand that the advisory committee is a temporary expedient. In education, provisions begin by being temporary but end up by being permanent. I am afraid that, having found this new advisory machinery convenient—because it does not answer back—there will be a great temptation to stick to it. Temporary expedients have a way of lasting a very long time. The Government do not understand the
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  psychology of the nation's schools. The Bill, which is mistaken in its purpose and content, is a step down the road of that misunderstanding.
  9.7 pm
  Mr. Andrew F. Bennett: I wonder whether the Secretary of State is finding it a little ironic that, while all his colleagues are seeking to denationalise everything in sight, he is setting out to nationalise our education service. With the Bill and his announcements at the weekend of his curriculum proposals, he seems to be setting out to abolish all local control over education. I should have thought that he would realise that this is a major kick in the teeth for local government and local democracy—increasingly taking away their powers over the curriculum and their powers to work out teachers' pay and conditions. I should have thought that, if the right hon. Gentleman were not concerned for local democracy as a whole, he would have some concern for those loyal servants of his party who for so long have run the education service in many of the shire counties.
  I realise that the Secretary of State wants to be the next Conservative Prime Minister, but the Bill suggests that he is increasingly power mad.
  Mr. Kenneth Baker indicated dissent.
  Mr. Bennett: You are not only taking power from local government and making it merely a rubber stamp in education matters, but you are abolishing the concept of collective bargaining. You are riding roughshod over the ILO conventions. Your government signed—
  Mr. Deputy Speaker: Order. I do not have a Government.
  Mr. Bennett: I am sorry, Mr. Deputy Speaker. The Government signed those conventions. The Secretary of State should have listened to the debate. My right hon. Friend the Member for Halton (Mr. Oakes)—one of my milder colleagues—had some pretty hard things to say about the way in which the Government were enslaving teachers by their tyranical proposals, taking away teachers' rights to collective bargaining, and that point was repeated by many of my colleagues.
  The Government and the Secretary of State will claim that the person who pays the piper should call the tune. I agree. However, it is not the Government, but the taxpayers and ratepayers, who pay the piper and pay for teachers' salaries. The taxpayers and ratepayers have as much right to be represented in the negotiations by the local authorities as they have to be represented by the Government. The tradition is that education is a locally provided service. Until the Government receive a mandate for a nationally provided education service, they should leave the negotiations in the hands of the locally elected representatives. In fact, at the last elction the Conservative party manifesto contained references to returning power to local authorities. The Government have no mandate for imposing on local authorities the pay and conditions of the people whom they employ.
  It is also ironic that during the three years of negotiations the Secretary of State's predecessor made it clear that the negotiations had nothing to do with him—he washed his hands of the dispute. Time and time again, from the Dispatch Box, he argued that it was for the local authorities and teachers to negotiate a settlement.

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  Now, just as a settlement is within grasp, the Secretary of State decides to intercede in the negotiations. He appears to be following his predecessor's practice in that every time there is a chance of the negotiations reaching a successful conclusion, he makes a statement that wrecks the proposals.
  We have a unique opportunity—a window of opportunity—to achieve a pay deal that will satisfy the teachers and local government and produce peace in our schools for the next five years. We need just a little more negotiating and patience and there will be an agreement.
  I do not suppose that the agreement will greatly please the teachers. The Secretary of State ought to be aware that in all the discussions over the past two or three weeks some concern has been expressed by the teachers about the ACAS proposals, but there has been absolute, total and united rejection of the Secretary of State's proposal to impose a settlement. The Secretary of State has an opportunity, and if he allowed people to return to negotiations there could be a settlement that would produce co-operation and good will from the teachers. It may be possible to impose a settlement, but it is impossible to impose good will on our schools. That is the real problem facing the Secretary of State.
  At present, it appears as though the Secretary of State will delay any settlement by at least a month so that the teachers will not receive their money in January. That will save the Government about £40 million. The Secretary of State may delay it by two months, and thus save £80 million. The longer the Government can delay, the less they will have to put forward. We are really very close to producing a solution, and it is very sad that the Government—
  Mr. Kenneth Baker: I thank the hon. Gentleman for giving way. He is implying that in the process of further negotiations it is possible that teachers will not get the money payable to them from 1 January. I want to make it clear that the Government's proposal is that the 16·4 per cent. should be spread in two installments—the first on 1 January, and the other on 1 October. That is still our intention. Whether the teachers can be paid from that particular date depends on the progress of the legislation. I want to make it absolutely clear that it is not our intention to defer entitlement to that beyond 1 January.
  Mr. Bennett: I am grateful for that statement. I suggest that the Secretary of State is still making some savings because if the money is put down later, the local authorities will save a considerable amount in interest. If the money is paid a little later, there will obviously be a little more money to put into the proposals.
  If the Secretary of State wishes peace to return to our schools, he must achieve that through negotiation. If he achieves it by negotiation, he should not be using this legislation to blackmail the teachers. Blackmailing the teachers will have two results:—the Secretary of State will either gain their sullen acquiescence, which is the best for which he can hope, or the conflict will be continued. Neither will produce high quality education.
  The Government seem determined to throw over the ACAS agreement, but what is the real sticking point? It seems to be that the Secretary of State feels that the agreement will pay teachers too much. The Government
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  want to insert an extra scale to stop some teachers getting so much money. That is why the Secretary of State says that the agreement is too expensive.
  I agree that bad teachers should not be paid as much as good teachers, but I do not want bad teachers in the schools at all. That is the problem that the Secretary of State must face. When he talks about allowing only 50 per cent. of teachers to reach the higher rates, he implies either that 50 per cent. of teachers are not good enough, or that some good teachers will be underpaid. When pressed as to how many bad teachers there are, most Conservative Members suggest about 2, 3 or 4 per cent. Yet the Government's proposals mean that a substantial number of good quality teachers will never get off the basic scale. The Secretary of State should consider carefully the basic scale proposals in the ACAS agreement, which offer rewards for first-class teachers who never have the chance to advance beyond the basic scale.
  If the Secretary of State wishes to weed out the very small number of bad teachers, he should consider two aspects. He should ensure that people who fail the basic probationary year are given a way out of teaching so that they do not have to try to cover their incomptence and continue. He should also continue the provision in the ACAS agreement which makes it clear that if the local auhority is not satisfied with the quality of service in the preceding 12 months there is no need to pay the increment to the teacher concerned. Although that mechanism has rarely been used, it is nevertheless available, harnessed to the appraisal system, to deal with the very small number of bad teachers.
  In effect, the Government are proposing a quality bar. Under their proposals, certain teachers will be paid more because they are good teachers. That brings an entirely new concept to the management of schools and will involve considerable difficulty for head teachers and others who have to allocate resources. At present, teachers are paid extra for extra responsibility. Primary schools often have to parallel reception classes and parents may be keen for their child to go into one of those classes because the teacher has a good reputation. At present, the head teacher can point out that both teachers are paid equally and recognised as good class teachers. Under the Secretary of State's proposals, one may have a special allowance for being a good teacher.
  The head teacher will need considerable management skill to persuade parents that their child has to go into the class run by the teacher who is recognised to be less good. I should certainly be very resentful if my youngster were pushed into the less good teacher's class. The more one formalises this, the greater the problems caused. The same applies in secondary schools. Under the Secretary of State's proposals, one fourth-year English set may be taught by a teacher recognised as deserving extra pay due to the quality of his or her teaching. Despite the limits on class size, parents will legitimately want their children to be in that teacher's class.
  There will also be problems of allocating posts to schools, but there is even worse to come. The Secretary of State is too young to remember the 1920s, but people who worked in the education service in the 1920s and 1930s, member the chaos and resentment caused by different rates of pay in different areas.
  Mr. Forth: What about London weighting?
  Mr. Bennett: I accept that there is the question of London weighting, and I shall come on to it. Once there is a proliferation of extra scales, a major problem is produced. It is bad enough that the Government are busily creating two or three nations—those parts in the south which are reasonably affluent, and some pretty depressed parts in the north. It is far worse if they start to institutionalise that divide into the rates of pay offered within schools.
  Mr. Cash: Will the hon. Gentleman give way?
  Mr. Bennett: No, I shall certainly not give way to the hon. Gentleman after his discourtesy in walking out of the Chamber as soon as he had made his speech. There is a concept in the House that hon. Members remain and listen to other people's speeches.
  There are considerable problems with the way in which one introduces extra rates of pay. Let us take, for example, a teacher to whom I spoke recently close to the House of Commons. At 55, he considers that the rates of pay that he receives are perfectly reasonable because he bought his house 25 years ago and his extra costs of living in London are very small. He has tremendous sympathy for a teacher in the 25 to 30 age group who wants to try to buy a house in the south of England and to take up a teaching post in that area. He told me that in a short time he can sell his house and retire to a low-cost part of the country. He will take with him a nice capital gain on his house and an enhanced pension because of London weighting. He can see good reasons why there should be some extra assistance for the young teacher in the London area who has housing problems, but he cannot see why there should be a difference in pension because of the London weighting because he will no longer be living in the London area and he will have made a substantial capital gain on a house move. Yet someone else in a different part of the country will not have had problems with house buying.
  If the Government are worried about housing costs, there is a simple solution. One solution is to ensure that enough housing is built in areas such as London where it is needed for teachers. The other alternative is to encourage local authorities to come up with housing to solve the problems of young teachers in those areas.
  Pay differentials between areas would not be a solution. The Secretary of State talked glibly about paying physics teachers or mathematics teachers extra, but there are considerable practical problems in doing that. Does one pay the physics teacher extra, or the teacher who is teaching physics extra? That is a considerable problem in many schools. It would be difficult to decide whether to pay the first deputy head in a school extra because his degree was in physics and because when he taught in the classroom he taught physics often, or the other deputy head, on the same grade, who was not teaching physics—
  Mr. Patrick Thompson: Will the hon. Gentleman give way?
  Mr. Bennett: No, not at this point. Would the Secretary of State give the person who is qualified in physics the extra money, or would he give it to the person who is teaching physics? Of course, the problem would then arise of the qualified teacher of physics and the unqualified person who is doing his best to teach it. There are
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  considerable problems in paying out different sums of money to people with different qualifications or who give a proportion of their timetable to subjects were there is a shortage of teachers. There is no easy solution. So far, I have seen no practical proposals.
  That brings me to the problems mentioned by my hon. Friend the Member for Leeds, Central (Mr. Fatchett). He said that the House of Commons and the Secretary of State are not in a position to carry out these detailed negotiations. Nor, especially, is an advisory body with a handful of people on it. The people with the expertise in these matters are those in local government who employ teachers and have the day-to-day practical problems and the teacher unions that understand the practical problems. It would be extremely dangerous to take powers in this legislation to pay different rates in different parts of the country and different rates for different subjects.
  The Government's proposals for the amount of money that they are putting up are for the gross amount. It is nothing like as much as they say. The Secretary of State knows only too well that a good proportion of the money that the Government are putting up will find its way straight back to the Treasury in national insurance, tax and VAT payments. The Government should spend some time considering the matter.
  The Minister of State more or less promised that the advisory committee's reports would be published. I hope that when the hon. Lady replies she will give a categorical assurance that those reports will be published and that, in Committee, she will accept an amendment to place that provision in the legislation. I hope that she will also tell us how she envisages collective bargaining working under the Bill.
  We should have an explanation of why further education is not included in the Bill. The Secretary of State said that he was pleased with the conduct of further education negotiations. The only trouble is that, in further education, salaries are slipping behind the Houghton agreement even faster than are teachers' salaries. The Government are satisfied with the proposals in further education because, so far, lecturers have been unable to obtain the same amount of money from the Government, but there will be major problems if lecturers in tertiary colleges and further education colleges generally are paid substantially less than teachers. The Government must find the money to provide a decent settlement in further education.
  I hope that the Minister will tell us what is happening with school meals. We are extremely anxious to get peace in our schools, but as the Government would not accept a national rate of pay for school meals supervision, there appears to be simmering unrest in local authorities. Different schemes apply in different areas, and many head teachers are extremely worried about the proposals for lunchtime supervision. If the Government want to return peace to the schools, it is time that they produced a national scheme for midday supervision. I hope that the Minister will tell us whether the Government are satisfied with what is happening on the ground.
  Finally, why are the Government trying to rush through the legislation? History shows us that legislation that is rushed through the House is always bad legislation. It is not well discussed in Parliament or outside. All the evidence shows that if we take our time with legislation there is a proper debate in the country and, from that proper debate, Parliament becomes well-informed of the

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  advantages and disadvantages of the legislation. My hon. Friends have quoted many examples of unsatisfactory legislation that has been rushed through the House.
  Several of my hon. Friends hope that the other place will slow down the legislation. I hope that it will, but the Government have an alternative. The Secretary of State does not need the legislation. He could obtain a successfully negotiated settlement. The best way to do that is to demonstrate to the teacher unions and the local authorities that he comes to them with good will, not with the blackmail of this legislation. If the Minister announced tonight, or the Secretary of State announced in Committee, that he will delay completion of the parliamentary stages of the Bill to have one last go at negotiations, there would be a good chance—
  Mr. Kenneth Baker: It has been five years.
  Mr. Bennett: The Secretary of State knows perfectly well that it has not been five years. For three of those years the Government refused even to contemplate providing any money. During the past two years negotiations have progressed each time the Government have shown their willingness to produce some money. The Secretary of State should try to make the negotiations work.
  Mrs. Kellett-Bowman: The hon. Gentleman is speaking for a third of the unions.
  Mr. Deputy Speaker: Order. I will not allow sedentary interventions.
  Mr. Bennett: The hon. Lady should consider what is happening in the schools. From the evidence that I have, I would suggest—
  Mrs. Kellett-Bowman rose—
  Mr. Bennett: No, I shall not give way. I have already taken up the hon. Lady's comment from a sedentary position about a third of the unions. [HON MEMBERS: "Give way."] Go on then.
  Mrs. Kellett-Bowman: Will the hon. Gentleman accept that the majority of teachers in my area prefer the Secretary of State's proposals to the other proposals? They want the incentive posts that are being offered. They are dismayed that the one overweening union that has dominated for so long should want to reduce the incentive posts, and they consider that that is wrong. That is what the vast majority of first-class teachers want.
  Mr. Bennett: I notice that the hon. Lady qualified her question with final words "first-class teachers". I am sure that that is an insult to a large number of teachers in her area. The hon. Lady should look at the NUT ballot results in her area. She should recognise that the vast majority of teachers in the NAS/UWT are totally opposed to the Secretary of State's proposals and that there are a large number of teachers who are dissatisfied with the Government's proposals.
  There is an opportunity for the Government to come up with a small amount of extra money, and a small amount of further negotiation, which will produce a settlement.
  Mrs. Kellett-Bowman: What about incentive posts?
  Mr. Bennett: The incentive is not there for 50 per cent. of teachers who cannot get above the basic scale. The big
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  attraction of the ACAS proposals was that they offered a career grade for those teachers which would go up to £15,000 as opposed to the £12,500 proposed by the Secretary of State. That is very attractive to the first-class teachers, who want recognition for the first-class job that they are doing in the schools.
  If hon. Members vote for the Bill, they are saying that they have no confidence in the negotiating abilities of the Secretary of State. The right hon. Gentleman should think carefully about that. If the right hon. Gentleman believes that he has negotiating skills, he should delay the introduction of the Bill and say firmly that he is prepared to go out and negotiate. Anybody who is not prepared to negotiate is frightened, and that suggests the Minister's weakness.
  9.32 pm
  The Minister of State, Department of Education and Science (Mrs. Angela Rumbold): This has been an important debate and I have listened with great interest. I listened with the interest of someone who sat on the Burnham committee for four years. Thus, some of the stories that I have heard about the way in which the Burnham committee operates have been interesting, if not accurate.
  I listened carefully to the speech of the hon. Member for Cambridgeshire, North-East (Mr. Freud) who moved the amendment to the Bill. Unfortunately and sadly for him, the hon. Gentleman was not very well supported by the other signatories to the amendment. Indeed, I do not think that any of them bothered to enter the Chamber.
  Mr. Clement Freud: Will the Minister accept that, whereas 390 of her supporters were not in the House when I spoke, only 25 of my hon. Friends were not in the House when I spoke.
  Mrs. Rumbold: It would be tempting for me to say that I could understand why there were so few hon. Members present when the hon. Gentleman spoke but that would not be gallant of me and I have no wish to be ungallant. It is rather a pity that so few of his party were bothered to support him. That is such a shame because the hon. Gentleman made a rather good speech although it was somewhat inaccurate.
  The hon. Member for Denton and Reddish (Mr. Bennett) said two things of particular interest. He said that my right hon. Friend could settle this dispute—it would be simple for him to do so. After all, all that was asked of him was to spend a few more pounds, another £85 million. That extra money could be easily added to the Bill. That is rather a lot of money—a considerable amount—on top of what is already on offer to the teachers. We have put £600 million on the table—a significant sum. Simply to add more just for the convenience of what may or may not be a settlement with the teachers unions—
  Mr. Andrew F. Bennett: For good will?
  Mrs. Rumbold: We have been waiting for that for a very long time.
  It was said that the disruption within the teaching profession had lasted for only two years, but I remember the first moves towards trying to get the teacher unions to discuss conditions of service. That was seen by the local authorities—which we are all so keen to support and help—as being absolutely vital so that they could tell the teachers whom they employ that there was something

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  in their contracts for which they were being paid. That would have solved the problem of telling the teachers, "Here we have a contract for £X but we are not sure what we are paying for." At long last they were trying to negotiate the conditions of service, and it is perfectly true that that is what has emerged from the recent negotiations.
  But the Bill is concerned with the pay and conditions of service of teachers—a large and vitally important group of people. We have heard a lot about them from hon. Members on both sides of the House who themselves were former teachers. My hon. Friend the Member for Erith and Crayford (Mr. Evennett), among others, made an excellent speech in support of the honourable profession of which he was a part.
  The standards and quality of education in our schools to a large extent depend on the teachers. They are very important people, not only in respect of the quality of their pupils but for the future development of our political and social life. They are also important for the economic development of the country. We are talking about 400,000 highly qualified people and a total pay bill of £5 billion.
  It is essential that we recruit and retain suitable people for this service. We must provide for professional development throughout their careers and promote their optimum deployment among the 100 or so local authorities that are responsible for 25,000 schools. It is to this end that the Government have taken appropriate steps to plan and improve the quality of initial teacher training and to strengthen the arrangements for in-service training, underpinned by the systematic appraisal of teachers and their performance.
  Teachers' pay levels, pay structure and conditions of service must be set within that context for the maintained sector of education. It is inevitable that there will be strains in trying to meet the aspirations of all the teacher unions. We must try to staff all our schools satisfactorily across the range of local authorities, bearing in mind the number of subjects that have to be taught, and all this must be done within the limits of what can be afforded.
  It has become increasingly clear, as some of my hon. Friends, including my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) have said, that in recent years the Burnham framework has not been satisfactory. As I have already explained, my own personal experience is that we tried hard within the Burnham machinery to make it work, but we did not succeed. That is why the Bill is needed, that is why we must have some interim arrangements for involving an advisory committee, and that is why the Bill provides for consultation with the local authorities and the unions and why the Government's conclusion should be referred to Parliament.
  One of the points raised by the hon. Member for Durham, North (Mr. Radice) concerned the ILO convention. I do not accept that we shall be breaking ILO convention No. 151. That convention provides that representatives of public employees should participate in the determination of terms and conditions of employment, but that does not have to be by direct negotiation, and the teacher unions will continue to participate. They will submit evidence and representations to the advisory committee, and my right hon. Friend the Secretary of State will certainly be consulting them.
  Mr. Andrew F. Bennett: Will the hon. Lady give way?
  Mrs. Rumbold: No.
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  Article 6(2) of the European Social Charter is framed in general terms, requesting Governments to promote voluntary collective bargaining where necessary and appropriate.
  The article—
  Mr. Andrew F. Bennett: Will the hon. Lady give way?
  Mrs. Rumbold: No.
  The article clearly recognises—
  Mr. Bennett rose—
  Mrs. Rumbold: I shall not give way at the moment.
  The article clearly recognises that circumstances can occur in which voluntary negotiations are not appropriate. That has happened in the case of Burnham, which has failed to promote settlements that are acceptable to all parties and are achieved without unacceptable disruption. In those circumstances, it would be inappropriate to maintain existing negotiating machinery if it does not work.
  Some, indeed, many, Opposition Members said persistently in the debate that we are moving too quickly, but most people have agreed—significantly—that the Burnham machinery must go. They agreed that because it has been agreed by all parties, including the unions, the Burnham machinery must go. It would have been impossible for them to deny that. The final settlement at the end of this long-running saga has always been just around the corner. The hon. Member for Denton and Reddish said, "Wait a little longer. It will be all right at the end of the day. It will happen soon."
  Mr. Pawsey: Jam tomorrow, never jam today.
  Mrs. Rumbold: Exactly.
  Other hon. Members have said that, but we must begin to put in place new machinery that will allow the dispute finally to be brought to a close. I can see no point in perpetuating a negotiating process which has produced never-ending talks, but which, even now, after so long, falls short of delivering a sensible final agreement.
  Opposition Members have made other points to us. They have said, "Why doesn't the Secretary of State move towards the unions' point of view and the ACAS point of view?" May I ask another question of the House? Is it possible that the people who negotiated the Nottingham ACAS agreement could move slightly towards my right hon. Friend the Secretary of State? [Interruption.] Is there not a possibility that he may be right?
  Mr. Barnett: That is what negotiating is.
  Mrs Rumbold: Indeed. We are amazed to see that we have not had any sort of movement towards my right hon. Friend the Secretary of State. He has been eminently reasonable. Teachers and parents throughout the country and many ordinary professional people have said how right the Secretary of State's proposals are as a structure for a decent profession. It would be impossible for us to do otherwise than continue on this road. It would be most imprudent of my right hon. Friend—or any Government—mindful of the course of the dispute, to sit on his hands.
  The Secretary of State, as he reminded the House in his opening remarks, has a final responsibility for the education service. My hon. Friend the Member for Rugby and Kenilworth reminded us that the Secretary of State has a duty to ensure that there is a decent public education

  111
  service. The Government cannot stand idly by. My right hon. Friend the Secretary of State has made it clear to all the parties that his door remains open, and he is shortly to have meetings with the local authorities, the Secondary Heads Association and the Professional Association of Teachers. But there remains a large gulf of principle and philosophy on the shape of the pay structure. It is our belief that the importance of an efficient management structure is the cornerstone for the effective development of education in our schools. Burnham clearly failed to come up with that.
  We cannot risk another period of wrangling, stalemate and disruption. Our children deserve better than that. The parents deserve better than that. The future generations deserve better than that. We must have a machinery that will work for the future, hence this short but important Bill.
  Mr. Radice: Is this the peroration?
  Mrs. Rumbold: No, it is not. The hon. Gentleman must wait for my peroration.
  The Government have been accused by the hon. Member for Leeds, Central (Mr. Fatchett) of removing the negotiating rights of teachers' unions. Much of the debate centred round that.
  The Government have not denied that the teachers' unions have a role in pay determination. I assure the House that there will be no shortage of consultation. Under the Bill, the advisory committee will be required to notify the relevant associations, local education authorities and teacher organisations, of matters being considered by the Committee and will have to give such bodies a reasonable opportunity to submit evidence and representations. When my right hon. Friend has received a report, he will be required to consult the relevant associations, local education authorities and teacher organisations before making an order giving effect to or modifying the recommendations. This process of consultation will be taken seriously.
  Mr. Marlow: Would this be a proper stage in my hon. Friend's speech for her to emphasise the generosity of the award that has been made? Perhaps she could make a comparison between, say, a senior teacher and a senior social worker? Is not a senior teacher being offered some £3,000 more than a senior social worker? This happens through all the other professions. It happens in medicine, in hospitals and in a series of other jobs. What the teachers are being offered is real wealth compared to what an awful lot of other people are getting.
  Mrs. Rumbold: My hon. Friend is making a valid point. No other group has received such a large pay increase as 25 per cent. within 18 months. Tell the pensioners that that is a miserly amount and see what response one gets. Tell the parents, many of whom will not have had a wage increase of 25 per cent., that that is a miserly amount. My hon. Friend is right, and I thank him.
  Why are the Government talking about a new framework for the teachers? We are not confronting a normal situation. I do not know of any history of collective bargaining such as the one we have seen in recent years. I remind Labour Members that my right hon.
  112
  Friend has a responsibility for the well-being of our schools that goes far beyond the responsibilities of Government for the generosity of local authorities.
  Mr. Radice: The hon. Lady has been making a good case for reforming the Burnham committee. She has not been making a case for getting rid of collective bargaining, and that is what she will have to do.
  Mrs. Rumbold: If the hon. Gentleman will be patient I shall come to that.
  The opening section of the Butler Act has stood for 40 years, and the Government will not shirk their responsibility for fulfilling their duty to education. We had no realistic choice other than to bring forward the proposals in the Bill. What the hon. Member for Leeds, Central has described as a fundamental attack on democratic rights is far from that. It is a measure to restore to children the right to an uninterrupted education.
  Over the past few years many negotiating efforts have been made, and I recognise that some have been real. There was the traditional Burnham committee with the concordat, which allowed the Secretary of State to have some say in the total amount of money being discussed. Then we had the traditional Burnham committee without the concordat, which ruled out the Secretary of State having any say in the total amount of money. There have been collective bargaining working parties with local authority, union and Government representatives dealing with both pay and conditions and collective bargaining aided and chaired by ACAS. Not one of these processes has been successful in producing an answer to the problem of teachers' pay. That is why, for an interim period, we need an advisory committee to take evidence from all concerned and to offer advice to my hon. Friend the Secretary of State, who will then need Parliament's agreement to his conclusions.
  I can assure the House that there will be no shortage of consultation. The advisory committee will be required to notify the relevant associations and all those bodies will have plenty of opportunity to look carefully at the representations made to my right hon. Friend. When the Secretary of State receives the report he will again consult. There will be endless consultation on these negotiations before he makes any sort of recommendation to the House.
  We are told that this Bill is the end of democracy. Whatever the Secretary of State recommends, even if he decides not to make any modification, will be subject to a negative resolution of the House. That is a democratic process because all hon. Members will be able to vote on it. If my right hon. Friend, or the holder of his post, modifies the recommendations, that will be subject to the affirmative resolution of both Houses. What can be more democratic than that? As elected representatives we shall vote on those proposals and that must be the ultimate in democracy. It is not the denial, as we have been told, of democratic processes, nor is it the end of civilisation for the teachers and it is quite ridiculous to suggest that it is.
  Mr. Peter Bruinvels: Does my hon. Friend accept that many members of the NUT, the people at the chalk face, want good jobs and do not feel that the NUT genuinely represents their wishes? They look forward to the additional promotion posts that my right hon. Friend is

  113
  offering. That is surely the way forward because it will ensure that the best teachers are those who are devoted to their pupils.
  Mrs. Rumbold: That is true. My right hon. Friend is anxious to see that all those within the teaching profession are keen to serve the schools and the pupils to the best of their ability. We shall look at the results of the ballot to see how the teachers have voted. We shall see whether they vote in favour of the teachers' unions or for my right hon. Friend's proposals.
  Let us be clear about the proposals that the Opposition advocate. Whether they like it or not, the teachers' unions are in disarray. One of the biggest unions, the NAS/UWT, was not prepared seriously to contemplate signing the ACAS agreement. The National Association of Head Teachers dismissed the ACAS agreement by saying that the differentials were shot to pieces and this meant that it would be impossible for head teachers to run their schools effectively and efficiently on the basis of the proposals in the ACAS agreement.
  This so-called agreement originally covered four of the six unions. Five of them signed the so-called Coventry heads of agreement in July. On Friday, the council of the Secondary Heads Association unanimously voted to reject the agreement, which meant that the six had suddenly become three. On Saturday, the Professional Association of Teachers made it clear that it rejected the so-called ACAS agreement. The six had shrunk to two. The Assistant Masters and Mistresses Association ballot result will be known towards the end of this week and it remains to be seen which way that vote will go.
  Mr. Barnett: The hon. Lady is doing much damage.
  Mrs. Rumbold: The hon. Gentleman says that I am doing damage.
  Mr. Barnett: Will the hon. Lady give way?
  Mrs. Rumbold: No, I will not. He makes a serious mistake in suggesting that those of us who stand for the profession of teachers working in the classrooms are causing damage. My hon. Friend the Member for Norwich, North (Mr. Thompson) made a telling point when he spoke about the experiences of himself and his wife. He was invited by the hon. Member for Ipswich (Mr. Weetch) to say what would have happened if he had disagreed with Burnham. My hon. Friend said what most teachers are saying, that they were glad when conditions of service and pay were improved, but were not concerned about the mechanism by which that was done. They were anxious to deliver good education in the classrooms. That was their major preoccupation.
  It is quite obvious that the NUT is rapidly becoming isolated. Its full-page advertisement in today's national press was alarmist and unhelpful. Its headline talks about the agreement made with ACAS but two teachers' unions withdrew from that agreement over the weekend. It was dangerously inaccurate. The so-called agreement is falling apart before our eyes. The NUT advertisement says that the Bill will give my right hon. Friend the right to scrap the ACAS deal and to deny teachers any opportunity to negotiate on their pay and conditions of service ever again. What absolute nonsense. It says nothing of the sort, as anybody who reads the Bill knows.
  The chaos of the past few weeks is evidence enough that the Government have to take a firm lead. I am afraid that
  114
  it is the NUT which has been persistently inflexible. For years, local authority associations have tried to negotiate on conditions of service with teacher unions, and for years the NUT has dismissed serious discussions abour linking pay and conditions. In the early 1980s, I tried to chair a committee with teacher unions about conditions of service. Progress has been painfully slow.
  Mr. Radice: But you have got it now.
  Mrs. Rumbold: We have got absolutely nothing.
  Mr. Radice: Not enough?
  Mrs. Rumbold: Indeed. It is not enough. In the autumn of last year, proposals which linked pay and conditions were put to the teachers and they walked out.
  Mr. Andrew F. Bennett: It is in the agreement.
  Mrs. Rumbold: The teachers' unions walked out of those discussions in 1985. It is true that, this year, there has been an ACAS agreement which puts together pay and conditions of service. My right hon. Friend has said that that is progress, and he is quite right. I have to remind Opposition Members, however, that the ACAS agreement also asks for a further £85 million. It is tremendously convenient to them to forget that.
  We should consider just what Opposition Members have said. They have said that the Government are taking away the negotiating rights of unions and giving themselves carte blanche to impose a settlement. We have already said, clearly and categorically, that that is not the case. There will be plenty of adequate consultation. A greater nonsense would be the proposition that teacher unions and local authorities could sit down without the Government and decide the size of the pay bill without reference to the Government, or those who must pay the remaining 46·4 per cent. of the pay bill. It is very easy to discuss pay when one does not have to find the money. The Government do not intend to do that, and I am convinced that no Government in their right mind would be prepared to accept a pay bill that had been decided by parties other than themselves.
  Opposition Members say that there is a possibility of my right hon. Friend being represented in some way under the ACAS agreement, but they have not been specific. My right hon. Friend is accused of being a tyrant and of taking unprecedented powers to tell teacher unions and local education authorities what teachers should be paid and how the money should be distributed. That is rubbish. He has already said that he will consult at all stages. Nobody seems to want to talk about how Opposition Members imagine that my right hon. Friend can discard his duty to provide education for our children while unions and local authorities continue to argue and wrangle.
  Opposition Members have said that we should settle on this agreement and it will all be over. They have said that peace will return to our schools. My reply is "Until the next time they decide to have a wrangle." No thank you, Mr. Speaker, we do not want that. My right hon. Friend has a duty to the children of this country, to parents, to the nation's future and to our most precious asset. What other country in the world would allow its education system to be disrupted in this way? Is anyone really suggesting that we should take seriously the proposals of some of the unions to cede the power that they have

  115
  wielded over our public education system in the past weeks? I ask the House to reject the amendment and to pass the Bill.
  Question put, That the amendment be made:—
  The House divided: Ayes 193, Noes 251.

  Division No. 22]

  [10 pm

  AYES

  Abse, Leo

  Fisher, Mark

  Adams, Allen (Paisley N)

  Flannery, Martin

  Anderson, Donald

  Foot, Rt Hon Michael

  Archer, Rt Hon Peter

  Foster, Derek

  Ashley, Rt Hon Jack

  Foulkes, George

  Ashton, Joe

  Fraser, J. (Norwood)

  Atkinson, N. (Tottenham)

  Freeson, Rt Hon Reginald

  Bagier, Gordon A. T.

  Freud, Clement

  Banks, Tony (Newham NW)

  Garrett, W. E.

  Barnett, Guy

  Godman, Dr Norman

  Barron, Kevin

  Golding, Mrs Llin

  Beckett, Mrs Margaret

  Gould, Bryan

  Beith, A. J.

  Gourlay, Harry

  Bell, Stuart

  Hamilton, James (M'well N)

  Benn, Rt Hon Tony

  Hamilton, W. W. (Fife Central)

  Bennett, A. (Dent'n & Red'sh)

  Hancock, Michael

  Bermingham, Gerald

  Hardy, Peter

  Bidwell, Sydney

  Harman, Ms Harriet

  Blair, Anthony

  Harrison, Rt Hon Walter

  Boothroyd, Miss Betty

  Hart, Rt Hon Dame Judith

  Boyes, Roland

  Hattersley, Rt Hon Roy

  Bray, Dr Jeremy

  Haynes, Frank

  Brown, Gordon (D'f'mline E)

  Healey, Rt Hon Denis

  Brown, Hugh D. (Provan)

  Heffer, Eric S.

  Brown, N. (N'c'tle-u-Tyne E)

  Hogg, N. (C'nauld & Kilsyth)

  Brown, Ron (E'burgh, Leith)

  Holland, Stuart (Vauxhall)

  Buchan, Norman

  Home Robertson, John

  Caborn, Richard

  Howarth, George (Knowsley, N)

  Callaghan, Jim (Heyw'd & M)

  Howell, Rt Hon D. (S'heath)

  Campbell, Ian

  Howells, Geraint

  Campbell-Savours, Dale

  Hoyle, Douglas

  Carlile, Alexander (Montg'y)

  Hughes, Robert (Aberdeen N)

  Carter-Jones, Lewis

  Hughes, Roy (Newport East)

  Clark, Dr David (S Shields)

  Hughes, Sean (Knowsley S)

  Clarke, Thomas

  Hughes, Simon (Southwark)

  Clay, Robert

  Janner, Hon Greville

  Clelland, David Gordon

  John, Brynmor

  Clwyd, Mrs Ann

  Johnston, Sir Russell

  Cocks, Rt Hon M. (Bristol S)

  Jones, Barry (Alyn & Deeside)

  Cohen, Harry

  Kirkwood, Archy

  Conlan, Bernard

  Leadbitter, Ted

  Cook, Frank (Stockton North)

  Leighton, Ronald

  Cook, Robin F. (Livingston)

  Lewis, Ron (Carlisle)

  Corbett, Robin

  Lewis, Terence (Worsley)

  Corbyn, Jeremy

  Litherland, Robert

  Cox, Thomas (Tooting)

  Livsey, Richard

  Craigen, J. M.

  Lloyd, Tony (Stretford)

  Crowther, Stan

  Lofthouse, Geoffrey

  Cunliffe, Lawrence

  McCartney, Hugh

  Cunningham, Dr John

  McDonald, Dr Oonagh

  Dalyell, Tam

  McGuire, Michael

  Davies, Rt Hon Denzil (L'lli)

  McKay, Allen (Penistone)

  Davies, Ronald (Caerphilly)

  McKelvey, William

  Davis, Terry (B'ham, H'ge H'l)

  MacKenzie, Rt Hon Gregor

  Dewar, Donald

  Maclennan, Robert

  Dixon, Donald

  McTaggart, Robert

  Dobson, Frank

  Madden, Max

  Dormand, Jack

  Marek, Dr John

  Dubs, Alfred

  Marshall, David (Shettleston)

  Duffy, A. E. P.

  Martin, Michael

  Dunwoody, Hon Mrs G.

  Maxton, John

  Eadie, Alex

  Meacher, Michael

  Eastham, Ken

  Michie, William

  Edwards, Bob (W'h'mpt'n SE)

  Mikardo, Ian

  Evans, John (St. Helens N)

  Millan, Rt Hon Bruce

  Fatchett, Derek

  Miller, Dr M. S. (E Kilbride)

  Field, Frank (Birkenhead)

  Mitchell, Austin (G't Grimsby)

  Fields, T. (L'pool Broad Gn)

  Morris, Rt Hon A. (W'shawe)

  116

  Morris, Rt Hon J. (Aberavon)

  Shore, Rt Hon Peter

  Nellist, David

  Short, Ms Clare (Ladywood)

  Oakes, Rt Hon Gordon

  Skinner, Dennis

  O'Brien, William

  Smith, C.(Isl'ton S & F'bury)

  O'Neill, Martin

  Smith, Rt Hon J. (M'ds E)

  Orme, Rt Hon Stanley

  Snape, Peter

  Owen, Rt Hon Dr David

  Soley, Clive

  Park, George

  Spearing, Nigel

  Parry, Robert

  Steel, Rt Hon David

  Pavitt, Laurie

  Stott, Roger

  Pendry, Tom

  Strang, Gavin

  Penhaligon, David

  Thomas, Dafydd (Merioneth)

  Pike, Peter

  Thomas, Dr R. (Carmarthen)

  Powell, Rt Hon J. E.

  Thompson, J. (Wansbeck)

  Powell, Raymond (Ogmore)

  Thorne, Stan (Preston)

  Prescott, John

  Tinn, James

  Radice, Giles

  Torney, Tom

  Raynsford, Nick

  Wardell, Gareth (Gower)

  Rees, Rt Hon M. (Leeds S)

  Wareing, Robert

  Richardson, Ms Jo

  Weetch, Ken

  Roberts, Allan (Bootle)

  White, James

  Roberts, Ernest (Hackney N)

  Wigley, Dafydd

  Robertson, George

  Williams, Rt Hon A.

  Robinson, G. (Coventry NW)

  Winnick, David

  Rogers, Allan

  Wrigglesworth, Ian

  Rooker, J. W.

  Young, David (Bolton SE)

  Ross, Ernest (Dundee W)

  Ross, Stephen (Isle of Wight)

  Tellers for the Ayes:

  Rowlands, Ted

  Mr. David Alton and

  Sheldon, Rt Hon R.

  Mr. John Cartwright.

  Shields, Mrs Elizabeth

  NOES

  Adley, Robert

  Clark, Sir W. (Croydon S)

  Aitken, Jonathan

  Clarke, Rt Hon K. (Rushcliffe)

  Alexander, Richard

  Cockeram, Eric

  Amess, David

  Conway, Derek

  Ancram, Michael

  Coombs, Simon

  Arnold, Tom

  Cope, John

  Ashby, David

  Cormack, Patrick

  Atkins, Robert (South Ribble)

  Corrie, John

  Baker, Rt Hon K. (Mole Vall'y)

  Couchman, James

  Baker, Nicholas (Dorset N)

  Critchley, Julian

  Baldry, Tony

  Crouch, David

  Batiste, Spencer

  Currie, Mrs Edwina

  Beaumont-Dark, Anthony

  Dicks, Terry

  Bendall, Vivian

  Dorrell, Stephen

  Benyon, William

  Douglas-Hamilton, Lord J.

  Best, Keith

  Dover, Den

  Bevan, David Gilroy

  du Cann, Rt Hon Sir Edward

  Biffen, Rt Hon John

  Dunn, Robert

  Biggs-Davison, Sir John

  Durant, Tony

  Blackburn, John

  Dykes, Hugh

  Blaker, Rt Hon Sir Peter

  Edwards, Rt Hon N. (P'broke)

  Body, Sir Richard

  Eggar, Tim

  Boscawen, Hon Robert

  Evennett, David

  Bottomley, Peter

  Eyre, Sir Reginald

  Bowden, A. (Brighton K'to'n)

  Fairbairn, Nicholas

  Bowden, Gerald (Dulwich)

  Farr, Sir John

  Braine, Rt Hon Sir Bernard

  Favell, Anthony

  Brandon-Bravo, Martin

  Fletcher, Alexander

  Bright, Graham

  Fookes, Miss Janet

  Brinton, Tim

  Forman, Nigel

  Brittan, Rt Hon Leon

  Forsyth, Michael (Stirling)

  Brown, M. (Brigg & Cl'thpes)

  Forth, Eric

  Browne, John

  Franks, Cecil

  Bruinvels, Peter

  Gardiner, George (Reigate)

  Buchanan-Smith, Rt Hon A.

  Garel-Jones, Tristan

  Buck, Sir Antony

  Gilmour, Rt Hon Sir Ian

  Bulmer, Esmond

  Glyn, Dr Alan

  Burt, Alistair

  Goodhart, Sir Philip

  Butcher, John

  Gorst, John

  Butler, Rt Hon Sir Adam

  Gower, Sir Raymond

  Butterfill, John

  Grant, Sir Anthony

  Carlisle, Kenneth (Lincoln)

  Greenway, Harry

  Carttiss, Michael

  Gregory, Conal

  Cash, William

  Grist, Ian

  Channon, Rt Hon Paul

  Grylls, Michael

  Clark, Hon A. (Plym'th S'n)

  Hamilton, Hon A. (Epsom)

  Clark, Dr Michael (Rochford)

  Hamilton, Neil (Tatton)

  117

  Hanley, Jeremy

  Patten, Christopher (Bath)

  Harris, David

  Pawsey, James

  Haselhurst, Alan

  Peacock, Mrs Elizabeth

  Hayward, Robert

  Percival, Rt Hon Sir Ian

  Henderson, Barry

  Pollock, Alexander

  Hicks, Robert

  Porter, Barry

  Higgins, Rt Hon Terence L.

  Portillo, Michael

  Hill, James

  Powell, William (Corby)

  Hogg, Hon Douglas (Gr'th'm)

  Powley, John

  Holland, Sir Philip (Gedling)

  Prentice, Rt Hon Reg

  Holt, Richard

  Price, Sir David

  Howarth, Gerald (Cannock)

  Proctor, K. Harvey

  Howell, Rt Hon D. (G'ldlord)

  Raffan, Keith

  Hunt, David (Wirral W)

  Raison, Rt Hon Timothy

  Hunter, Andrew

  Rees, Rt Hon Peter (Dover)

  Irving, Charles

  Rhodes James, Robert

  Jones, Robert (Herts W)

  Rhys Williams, Sir Brandon

  Kellett-Bowman, Mrs Elaine

  Ridsdale, Sir Julian

  Key, Robert

  Rippon, Rt Hon Geoffrey

  Knight, Dame Jill (Edgbaston)

  Roberts, Wyn (Conwy)

  Knowles, Michael

  Robinson, Mark (N'port W)

  Lawson, Rt Hon Nigel

  Roe, Mrs Marion

  Lee, John (Pendle)

  Rowe, Andrew

  Lennox-Boyd, Hon Mark

  Rumbold, Mrs Angela

  Lewis, Sir Kenneth (Stamf'd)

  Sainsbury, Hon Timothy

  Lightbown, David

  St. John-Stevas, Rt Hon N.

  Lilley, Peter

  Sayeed, Jonathan

  Lloyd, Sir Ian (Havant)

  Shaw, Giles (Pudsey)

  Lloyd, Peter (Fareham)

  Shaw, Sir Michael (Scarb')

  Lord, Michael

  Shelton, William (Streatham)

  Luce, Rt Hon Richard

  Shepherd, Colin (Hereford)

  Lyell, Nicholas

  Shersby, Michael

  McCrindle, Robert

  Silvester, Fred

  McCurley, Mrs Anna

  Sims, Roger

  Macfarlane, Neil

  Smith, Tim (Beaconsfield)

  MacGregor, Rt Hon John

  Soames, Hon Nicholas

  MacKay, John (Argyll & Bute)

  Speller, Tony

  Maclean, David John

  Spencer, Derek

  McLoughlin, Patrick

  Spicer, Jim (Dorset W)

  McNair-Wilson, M. (N'bury)

  Spicer, Michael (S Worcs)

  McNair-Wilson, P. (New F'st)

  Squire, Robin

  McQuarrie, Albert

  Stanbrook, Ivor

  Madel, David

  Steen, Anthony

  Major, John

  Stern, Michael

  Malins, Humfrey

  Stevens, Lewis (Nuneaton)

  Malone, Gerald

  Stewart, Allan (Eastwood)

  Maples, John

  Stewart, Andrew (Sherwood)

  Marland, Paul

  Stradling Thomas, Sir John

  Marlow, Antony

  Sumberg, David

  Mather, Carol

  Tebbit, Rt Hon Norman

  Mawhinney, Dr Brian

  Temple-Morris, Peter

  Maxwell-Hyslop, Robin

  Terlezki, Stefan

  Meyer, Sir Anthony

  Thompson, Patrick (N'ich N)

  Mills, Iain (Meriden)

  Thornton, Malcolm

  Mills, Sir Peter (West Devon)

  Thurnham, Peter

  Miscampbell, Norman

  Townend, John (Bridlington)

  Mitchell, David (Hants NW)

  Townsend, Cyril D. (B'heath)

  Moate, Roger

  Tracey, Richard

  Monro, Sir Hector

  Twinn, Dr Ian

  Montgomery, Sir Fergus

  Vaughan, Sir Gerard

  Moore, Rt Hon John

  Wakeham, Rt Hon John

  Morris, M. (N'hampton S)

  Waldegrave, Hon William

  Morrison, Hon C. (Devizes)

  Walker, Rt Hon P. (W'cester)

  Morrison, Hon P. (Chester)

  Wall, Sir Patrick

  Moynihan, Hon C.

  Waller, Gary

  Mudd, David

  Ward, John

  Neale, Gerrard

  Warren, Kenneth

  Newton, Tony

  Watson, John

  Nicholls, Patrick

  Watts, John

  Norris, Steven

  Wells, Bowen (Hertford)

  Onslow, Cranley

  Wells, Sir John (Maidstone)

  Oppenheim, Phillip

  Wheeler, John

  Oppenheim, Rt Hon Mrs S.

  Whitfield, John

  Osborn, Sir John

  Wiggin, Jerry

  Ottaway, Richard

  Wilkinson, John

  Page, Sir John (Harrow W)

  Wolfson, Mark

  Page, Richard (Herts SW)

  Wood, Timothy

  Parkinson, Rt Hon Cecil

  Woodcock, Michael

  118

  Young, Sir George (Acton)

  Mr. Michael Neubert and

  Mr. Francis Maude.

  Tellers for the Noes:

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 60 (Amendment on Second or Third Reading):
  The House divided: Ayes 250, Noes 195.

  Division No. 23]

  [10.15 pm

  AYES

  Adley, Robert

  Evennett, David

  Aitken, Jonathan

  Eyre, Sir Reginald

  Alexander, Richard

  Fairbairn, Nicholas

  Amess, David

  Farr, Sir John

  Ancram, Michael

  Favell, Anthony

  Arnold, Tom

  Fletcher, Alexander

  Ashby, David

  Fookes, Miss Janet

  Atkins, Robert (South Ribble)

  Forman, Nigel

  Baker, Rt Hon K. (Mole Vall'y)

  Forsyth, Michael (Stirling)

  Baker, Nicholas (Dorset N)

  Forth, Eric

  Baldry, Tony

  Franks, Cecil

  Batiste, Spencer

  Gardiner, George (Reigate)

  Beaumont-Dark, Anthony

  Garel-Jones, Tristan

  Bendall, Vivian

  Glyn, Dr Alan

  Benyon, William

  Goodhart, Sir Philip

  Best, Keith

  Gorst, John

  Bevan, David Gilroy

  Gower, Sir Raymond

  Biffen, Rt Hon John

  Grant, Sir Anthony

  Biggs-Davison, Sir John

  Greenway, Harry

  Blackburn, John

  Gregory, Conal

  Blaker, Rt Hon Sir Peter

  Grist, Ian

  Body, Sir Richard

  Grylls, Michael

  Boscawen, Hon Robert

  Hamilton, Hon A. (Epsom)

  Bottomley, Peter

  Hamilton, Neil (Tatton)

  Bowden, A. (Brighton K'to'n)

  Hanley, Jeremy

  Bowden, Gerald (Dulwich)

  Harris, David

  Braine, Rt Hon Sir Bernard

  Haselhurst, Alan

  Brandon-Bravo, Martin

  Hayward, Robert

  Bright, Graham

  Henderson, Barry

  Brinton, Tim

  Hicks, Robert

  Brittan, Rt Hon Leon

  Higgins, Rt Hon Terence L.

  Brown, M. (Brigg & Cl'thpes)

  Hill, James

  Browne, John

  Hogg, Hon Douglas (Gr'th'm)

  Bruinvels, Peter

  Holland, Sir Philip (Gedling)

  Buchanan-Smith, Rt Hon A.

  Holt, Richard

  Buck, Sir Antony

  Howarth, Gerald (Cannock)

  Bulmer, Esmond

  Howell, Rt Hon D. (G'ldford)

  Burt, Alistair

  Hunt, David (Wirral W)

  Butcher, John

  Hunter, Andrew

  Butler, Rt Hon Sir Adam

  Irving, Charles

  Butterfill, John

  Jones, Robert (Herts W)

  Carlisle, Kenneth (Lincoln)

  Kellett-Bowman, Mrs Elaine

  Carttiss, Michael

  Key, Robert

  Cash, William

  Knight, Dame Jill (Edgbaston)

  Channon, Rt Hon Paul

  Knowles, Michael

  Clark, Hon A. (Plym'th S'n)

  Lawson, Rt Hon Nigel

  Clark, Dr Michael (Rochford)

  Lee, John (Pendle)

  Clark, Sir W. (Croydon S)

  Lennox-Boyd, Hon Mark

  Clarke, Rt Hon K. (Rushcliffe)

  Lewis, Sir Kenneth (Stamf'd)

  Cockeram, Eric

  Lightbown, David

  Conway, Derek

  Lilley, Peter

  Coombs, Simon

  Lloyd, Sir Ian (Havant)

  Cope, John

  Lord, Michael

  Cormack, Patrick

  Luce, Rt Hon Richard

  Corrie, John

  Lyell, Nicholas

  Couchman, James

  McCrindle, Robert

  Critchley, Julian

  McCurley, Mrs Anna

  Crouch, David

  Macfarlane, Neil

  Currie, Mrs Edwina

  MacGregor, Rt Hon John

  Dicks, Terry

  MacKay, John (Argyll & Bute)

  Dorrell, Stephen

  Maclean, David John

  Douglas-Hamilton, Lord J.

  McLoughlin, Patrick

  Dover, Den

  McNair-Wilson, M. (N'bury)

  du Cann, Rt Hon Sir Edward

  McNair-Wilson, P. (New F'st)

  Dunn, Robert

  McQuarrie, Albert

  Dykes, Hugh

  Madel, David

  Edwards, Rt Hon N. (P'broke)

  Major, John

  Eggar, Tim

  Malins, Humfrey

  119

  Malone, Gerald

  Sainsbury, Hon Timothy

  Maples, John

  St. John-Stevas, Rt Hon N.

  Marland, Paul

  Sayeed, Jonathan

  Marlow, Antony

  Shaw, Giles (Pudsey)

  Mather, Carol

  Shaw, Sir Michael (Scarb')

  Maude, Hon Francis

  Shelton, William (Streatham)

  Mawhinney, Dr Brian

  Shepherd, Colin (Hereford)

  Maxwell-Hyslop, Robin

  Shersby, Michael

  Meyer, Sir Anthony

  Silvester, Fred

  Mills, Iain (Meriden)

  Sims, Roger

  Mills, Sir Peter (West Devon)

  Smith, Tim (Beaconsfield)

  Miscampbell, Norman

  Soames, Hon Nicholas

  Mitchell, David (Hants NW)

  Speller, Tony

  Moate, Roger

  Spencer, Derek

  Monro, Sir Hector

  Spicer, Jim (Dorset W)

  Montgomery, Sir Fergus

  Spicer, Michael (S Worcs)

  Moore, Rt Hon John

  Squire, Robin

  Morris, M. (N'hampton S)

  Stanbrook, Ivor

  Morrison, Hon C. (Devizes)

  Steen, Anthony

  Morrison, Hon P. (Chester)

  Stern, Michael

  Moynihan, Hon C.

  Stevens, Lewis (Nuneaton)

  Mudd, David

  Stewart, Allan (Eastwood)

  Neale, Gerrard

  Stewart, Andrew (Sherwood)

  Neubert, Michael

  Stradling Thomas, Sir John

  Newton, Tony

  Sumberg, David

  Nicholls, Patrick

  Taylor, Teddy (S'end E)

  Norris, Steven

  Tebbit, Rt Hon Norman

  Onslow, Cranley

  Temple-Morris, Peter

  Oppenheim, Phillip

  Terlezki, Stefan

  Oppenheim, Rt Hon Mrs S.

  Thompson, Patrick (N'ich N)

  Osborn, Sir John

  Thornton, Malcolm

  Ottaway, Richard

  Thurnham, Peter

  Page, Sir John (Harrow W)

  Townend, John (Bridlington)

  Page, Richard (Herts SW)

  Townsend, Cyril D. (B'heath)

  Parkinson, Rt Hon Cecil

  Tracey, Richard

  Patten, Christopher (Bath)

  Twinn, Dr Ian

  Pawsey, James

  Vaughan, Sir Gerard

  Peacock, Mrs Elizabeth

  Wakeham, Rt Hon John

  Percival, Rt Hon Sir Ian

  Waldegrave, Hon William

  Pollock, Alexander

  Wall, Sir Patrick

  Porter, Barry

  Waller, Gary

  Portillo, Michael

  Ward, John

  Powell, William (Corby)

  Warren, Kenneth

  Powley, John

  Watson, John

  Prentice, Rt Hon Reg

  Watts, John

  Price, Sir David

  Wells, Bowen (Hertford)

  Proctor, K. Harvey

  Wells, Sir John (Maidstone)

  Raffan, Keith

  Wheeler, John

  Raison, Rt Hon Timothy

  Whitfield, John

  Rees, Rt Hon Peter (Dover)

  Wiggin, Jerry

  Rhodes James, Robert

  Wilkinson, John

  Rhys Williams, Sir Brandon

  Wolfson, Mark

  Ridsdale, Sir Julian

  Wood, Timothy

  Rippon, Rt Hon Geoffrey

  Woodcock, Michael

  Roberts, Wyn (Conwy)

  Young, Sir George (Acton)

  Robinson, Mark (N'port W)

  Roe, Mrs Marion

  Tellers for the Ayes:

  Rowe, Andrew

  Mr. Tony Durant and

  Rumbold, Mrs Angela

  Mr. Peter Lloyd.

  NOES

  Abse, Leo

  Blair, Anthony

  Adams, Allen (Paisley N)

  Boothroyd, Miss Betty

  Alton, David

  Boyes, Roland

  Anderson, Donald

  Brown, Gordon (D'f'mline E)

  Archer, Rt Hon Peter

  Brown, Hugh D. (Provan)

  Ashley, Rt Hon Jack

  Brown, N. (N'c'tle-u-Tyne E)

  Ashton, Joe

  Brown, Ron (E'burgh, Leith)

  Atkinson, N. (Tottenham)

  Buchan, Norman

  Bagier, Gordon A. T.

  Caborn, Richard

  Banks, Tony (Newham NW)

  Callaghan, Jim (Heyw'd & M)

  Barnett, Guy

  Campbell, Ian

  Barron, Kevin

  Campbell-Savours, Dale

  Beckett, Mrs Margaret

  Carlile, Alexander (Montg'y)

  Beith, A. J.

  Carter-Jones, Lewis

  Bell, Stuart

  Cartwright, John

  Benn, Rt Hon Tony

  Clark, Dr David (S Shields)

  Bennett, A. (Dent'n & Red'sh)

  Clarke, Thomas

  Bermingham, Gerald

  Clay, Robert

  Bidwell, Sydney

  Clelland, David Gordon

  120

  Clwyd, Mrs Ann

  McCartney, Hugh

  Cocks, Rt Hon M. (Bristol S)

  McDonald, Dr Oonagh

  Cohen, Harry

  McGuire, Michael

  Coleman, Donald

  McKay, Allen (Penistone)

  Conlan, Bernard

  McKelvey, William

  Cook, Frank (Stockton North)

  MacKenzie, Rt Hon Gregor

  Cook, Robin F. (Livingston)

  Maclennan, Robert

  Corbett, Robin

  McTaggart, Robert

  Corbyn, Jeremy

  Madden, Max

  Cox, Thomas (Tooting)

  Marek, Dr John

  Craigen, J. M.

  Marshall, David (Shettleston)

  Crowther, Stan

  Martin, Michael

  Cunliffe, Lawrence

  Maxton, John

  Cunningham, Dr John

  Meacher, Michael

  Dalyell, Tam

  Michie, William

  Davies, Rt Hon Denzil (L'lli)

  Mikardo, Ian

  Davis, Terry (B'ham, H'ge H'l)

  Millan, Rt Hon Bruce

  Dewar, Donald

  Miller, Dr M. S. (E Kilbride)

  Dixon, Donald

  Mitchell, Austin (G't Grimsby)

  Dobson, Frank

  Morris, Rt Hon A. (W'shawe)

  Dormand, Jack

  Morris, Rt Hon J. (Aberavon)

  Dubs, Alfred

  Nellist, David

  Duffy, A. E. P.

  Oakes. Rt Hon Gordon

  Dunwoody, Hon Mrs G.

  O'Brien, William

  Eadie, Alex

  O'Neill, Martin

  Eastham, Ken

  Orme, Rt Hon Stanley

  Edwards, Bob (W'h'mpt'n SE)

  Owen, Rt Hon Dr David

  Evans, John (St. Helens N)

  Park, George

  Field, Frank (Birkenhead)

  Parry, Robert

  Fields, T. (L'pool Broad Gn)

  Pavitt, Laurie

  Fisher, Mark

  Pendry, Tom

  Flannery, Martin

  Penhaligon, David

  Foot, Rt Hon Michael

  Pike, Peter

  Foster, Derek

  Powell, Rt Hon J. E.

  Foulkes, George

  Powell, Raymond (Ogmore)

  Fraser, J. (Norwood)

  Prescott, John

  Freeson, Rt Hon Reginald

  Radice, Giles

  Freud, Clement

  Raynsford, Nick

  Garrett, W. E.

  Redmond, Martin

  Godman, Dr Norman

  Rees, Rt Hon M. (Leeds S)

  Golding, Mrs Llin

  Richardson, Ms Jo

  Gould, Bryan

  Roberts, Allan (Bootle)

  Gourlay, Harry

  Roberts, Ernest (Hackney N)

  Hamilton, James (M'well N)

  Robertson, George

  Hamilton, W. W. (Fife Central)

  Robinson, G. (Coventry NW)

  Hancock, Michael

  Rogers, Allan

  Hardy, Peter

  Rooker, J. W.

  Harman, Ms Harriet

  Ross, Ernest (Dundee W)

  Harrison, Rt Hon Walter

  Ross, Stephen (Isle of Wight)

  Hart, Rt Hon Dame Judith

  Rowlands, Ted

  Hattersley, Rt Hon Roy

  Sheldon, Rt Hon R.

  Haynes, Frank

  Shields, Mrs Elizabeth

  Healey, Rt Hon Denis

  Shore, Rt Hon Peter

  Heffer, Eric S.

  Short, Ms Clare (Ladywood)

  Hogg, N. (C'nauld & Kilsyth)

  Silkin, Rt Hon J.

  Holland, Stuart (Vauxhall)

  Skinner, Dennis

  Home Robertson, John

  Smith, C.(Isl'ton S & F'bury)

  Howarth, George (Knowsley, N)

  Smith, Rt Hon J. (M'ds E)

  Howell, Rt Hon D. (S'heath)

  Snape, Peter

  Howells, Geraint

  Soley, Clive

  Hoyle, Douglas

  Spearing, Nigel

  Hughes, Robert (Aberdeen N)

  Steel, Rt Hon David

  Hughes, Roy (Newport East)

  Stott, Roger

  Hughes, Sean (Knowsley S)

  Strang, Gavin

  Hughes, Simon (Southwark)

  Thomas, Dafydd (Merioneth)

  Janner, Hon Greville

  Thomas, Dr R. (Carmarthen)

  John, Brynmor

  Thompson, J. (Wansbeck)

  Johnston, Sir Russell

  Thorne, Stan (Preston)

  Jones, Barry (Alyn & Deeside)

  Tinn, James

  Kirkwood, Archy

  Torney, Tom

  Leadbitter, Ted

  Wardell, Gareth (Gower)

  Leighton, Ronald

  Wareing, Robert

  Lewis, Ron (Carlisle)

  Weetch, Ken

  Lewis, Terence (Worsley)

  White, James

  Litherland, Robert

  Wigley, Dafydd

  Livsey, Richard

  Williams, Rt Hon A.

  Lloyd, Tony (Stretford)

  Winnick, David

  Lofthouse, Geoffrey

  Wrigglesworth, Ian

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  Young, David (Bolton SE)

  Mr. Derek Fatchett and

  Mr. Ron Davies.

  Tellers for the Noes:

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Portillo.]
  Committee tomorrow.

  TEACHERS' PAY AND CONDITIONS BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Teachers' Pay and Conditions Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenses of the Secretary of State under the Act and any increase attributable to the Act in the sums so payable under any other Act.—[Mr. Portillo.]

  Shipbuilding (European Community Directive)
  Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Leader of the Opposition.
  10.28 pm
  The Minister of State, Department of Trade and Industry (Mr. Giles Shaw): I beg to move,
  That this House takes note of European Community Documents Nos. 9470/86 and 9470/1/86 on aid to shipbuilding, and supports the Government's intention to press for early adoption of the Directive in a form which will provide a fairer and more transparent aid regime in Europe and enhance the ability of European yards to compete in world markets.
  I am conscious of the fact that this is the first occasion on which I have had the responsibility of addressing the House on shipbuilding matters; and it is only reasonable for me to say with some humility that the position, the problems and the world scene for shipbuilding make the context of this debate a truly traumatic and difficult one.
  In 1986, the rate of new ordering for merchant ships has continued to decline. Order intake in 1985 world trade was 10·3 million compensated gross tonnes, but only 4·4 million in the first half of 1986. World building capacity is about 18 million CGT, and too much capacity chasing limited new orders keeps ship prices depressed. There was a flurry of interest in crude oil carriers in the early autumn which produced some orders for South Korea and Yugoslavia, although it seems that some of those orders are by no means secure. Owners are already cancelling as the demand for crude oil is falling again. The Japanese industry now depends heavily on domestic orders, because the appreciation of the yen against the dollar is pricing Japan out of the world market. All the major Japanese yards have announced, and in some cases begun to implement, substantial restructuring with a view to cutting capacity by about 30 per cent. Japan has more than 40 per cent. of the world market, so cuts of that size are substantial.
  The Koreans are not cutting capacity. They have about 15 per cent. of the world market. The European Community yards combined are about as significant in the world market as is South Korea, and the United Kingdom alone has less than 1 per cent. of the world market.
  The problems were made no easier by the recent fall in the price of oil. There has been some activity, but it has been short-lived. Meanwhile, there remains substantial spare capacity in many sorts of shipping, with second-hand vessels available at low prices. That has had the effect of narrowing the range of available orders to specialised markets. In short, circumstances are no easier, and may even be worse, than when the House previously debated such matters, which was not very long ago.
  Before I discuss the directive, may I say how helpful it is to be able to consult the House at this stage when the negotiations on the directive are sufficiently advanced for us to have a strong sense of its final shape but when there is still plenty of scope for improvement. As the House will recall from the memorandum that I circulated on 10 October, the present fifth directive runs out at the end of this year. The new draft directive has been discussed at
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  Industry Councils on 20 October and 18 November, and substantial progress has been made. I very much hope that it will be possible to achieve agreement on the new directive at a further Council, now arranged for 22 December, so that the new arrangements can be in place at the end of the year.
  That is especially important because the Commission has made it clear that, in the absence of agreement on a new directive, it will use its existing powers under articles 92 and 93 of the treaty as though the directive was in force, exactly as it had proposed it without any of the advantages which we and others might have hoped to achieve in the current negotiations. As the House will know, help for shipbuilding is a matter essentially for the Governments of each member state in the Community, within a framework set down in the current EC directive on state assistance. The member states provide the money; none of it comes from the EC. Therefore, the aid regime in each member state is notified to and authorised by the Commission within the framework of the Council directive.
  The approach in the draft sixth directive is in many ways a considerable improvement on that of the fifth directive and its predecessors. There are two fundamental improvements. First, the fifth directive concentrates on direct production aids and does not adequately bring under control indirect aids to shipowners and ship investors, who also affect decisions to build new ships. I am glad to tell the House that we have successfully persuaded the Commission to change this approach so that all subventions that affect shipbuilding decisions will be brought out into the open and treated together on a common basis under the new system. The House will be pleased to know that, on 18 November, the Industry Council affirmed its commitment to such a regime which, backed by thorough policing, which the Commission has proposed and which we support, will ensure that there is fair competition between Community yards. No member state can bend the rules in its favour.
  I see this as a considerable advance over the present position. It will have an important bearing on the ability of our yards to compete.
  The second fundamental improvement is that the new approach aims to allow yards to compete in a period when all ship prices are distorted, particularly because of aggressive price leadership from the far east. The Commission has decided to set a common maximum ceiling—I quote the draft directive—
  "with reference to the prevailing difference between the cost structures of the most competitive Community yards and the prices charged by its main international competitors with particular regard to the market segments in which the Community yards remain the most competitive."
  The advantage of this is not only the setting of a market-related ceiling because, under the fifth directive, subventions in support of production could be given only if the industry was being adapted—in other words, slimming down. Under the sixth directive, restructuring will no longer be required in return for direct contract support. Under the new proposals, the Commission will be interested in restructuring only where investment is being supported, or support is being given to reduce capacity itself.
  As for the level of the ceiling, against the background of a consultant's report on comparative costs and prices in the second quarter of this year, the Commission has

  125
  proposed a support ceiling set at 26 per cent. of what it calls contract value before aid, which is 26 per cent. of cost. This is to be applied both under article 4 in the draft directive to individual orders, and under article 5 to the total amount of operating support made available to shipyards each year in relation to their turnover on a cost-and-sale basis.
  Although the Government strongly maintain that that proposed ceiling is too low to satisfy the declared objective on the draft directive, the House will wish to be aware that even a level of 26 per cent. of cost is considerably higher than what is permitted under the existing fifth directive. Though the arithmetic is somewhat bewildering, the present limit on intervention fund and shipbuilders' relief is normally 22·5 per cent. of the subsidised contract price, or 18·4 per cent. of the cost of building a ship attracting the maximum level of aid.
  As a result of negotiations we already have a cost limit of 26 per cent. This will surely help our yards—
  Mr. Gordon Brown: Will the Minister tell us how the 26 per cent. proposal is better than the existing system after taking account of losses suffered by British Shipbuilders, under-utilisation, indirect subsidies and everything else? Will he tell us what British Shipbuilders told him would be the effect of imposing a 26 per cent. ceiling?
  Mr. Shaw: The hon. Gentleman knows full well that British Shipbuilders is far from happy with the 26 per cent. ceiling, and I am far from happy with it. He will know also that the recent meeting of the European Shipbuilders Association has made it clear that it would prefer to see a higher ceiling. There will be substantial pressure—there is reasonable time between now and 22 December—brought to bear on lifting the ceiling. I pledge to the House that through the United Kingdom's representative we shall do our utmost to ensure that we lift the 26 per cent. ceiling substantially.
  On the arithmetic in question, the two comparatives that the hon. Gentleman is seeking turn on the fact that 18·4 per cent. of the cost is under the present regime, whereas it will be 26 per cent. That is a significant lift. That has to be borne in mind as an improvement in relation to the directive.
  Mr. Gordon Brown: Will the Minister take into account under-utilisation, the losses suffered by British Shipbuilders and indirect subsidies, and will he help the British case by ceasing to say that the present system is worse than the system that will be imposed by the Commission if it gets its way?
  Mr. Shaw: There is no question of a system being imposed by the Commission if it gets its way. I hope sincerely that that will not happen. I trust that a system will be endorsed by the Council on the understanding that it represents member states' interests. The system that is proposed in the directive will be significantly better than the present one, which is 18·4 per cent. on cost. Where the system differs is in relation to what the ceiling contains. There is the question of over-capacity, and there are other conditions as well. Even on that basis, the view is that the proposed regime would be a better one than that which currently prevails. We must negotiate further improvements to the conditions by which the ceiling will operate.
  We firmly believe that the limit is too low. Indeed, so does the Committee of European Shipbuilders, on which
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  British Shipbuilders represents the United Kingdom, which saw Commissioner Sutherland last week, as reported in the Financial Times today. The Committee said then that the level that would meet the Commission's objectives was at least 30 per cent., which it based on the same report as the Commission had used in drawing up its own figure.
  The Committee had recognised that in types of ships in which European yards might specialise, the consultants had pointed to a gap of some 36 per cent. between European costs and Far East prices last spring, but the shipbuilders also took note of a hardening of ship prices since and of the effect of non-price factors, particularly quality, which in its experience influenced owners towards European yards. Nevertheless, I give the assurance that I gave a moment ago that we shall press hard for a significant rise above the 26 per cent. level currently proposed.
  Our position on aid domestically is that the amount of aid given should remain the minimum that is necessary to secure the contract within the rules laid down by the directive. We will need to examine the details of our own aid regime to see whether changes are necessary in the light of the final negotiations, but, at whatever level it is eventually set, the ceiling on subventions in total will be most relevant to the yards competing worldwide. It should not be taken for granted that the maximum level will be available for all yards, especially those concentrating on small ships where competition from the far east is weakest.
  There are still, of course, a number of aspects of the draft directive to be agreed by Council other than the level of the common aid ceiling. That said, I am sure that it will be helpful in the final negotiations in Brussels later this month to know that the House will support the efforts to get the Commission to agree to set a higher aid ceiling than the 26 per cent. of cost which it has proposed.
  We face a position in which the market for new ships remains very tight. We have the prospect of a new regime which will allow our yards a better opportunity to compete. As we believe it can be agreed at the next Council, the new directive will allow our builders to compete more fairly, and to do so with an overall level of subvention that is significantly greater than present arrangements permit. There is still much work to be done, especially on the ceiling, but good reason to be pleased with what has been achieved so far, and I commend the motion to the House.
  10.42 pm
  Mr. Gordon Brown: I beg to move, to leave out from "shipbuilding" to the end of the Question and to add instead thereof,
  "but calls for the Government to increase its efforts in Europe to secure the maximum support possible for the shipbuilding industry in line with the conclusions of the independent report prepared for the European Economic Community.".
  I welcome the Minister to his first shipbuilding debate, particularly as his appointment to the Department of Trade and Industry appears to break the recent pattern of recruitment to that Department. As I understand it, the hon. Member for Pudsey (Mr. Shaw) is unique because he is one of the few Ministers who is not a millionaire, at least by inheritance, and he has no ambition, unlike the right hon. Member for Chingford (Mr. Tebbit) and the hon. Member for City of Chester (Mr. Morrison), to use his period in that Department as a stepping stone to a position in the Conservative party hierarchy.

  127
  I also welcome the Minister because he is not the Parliamentary Under-Secretary, the hon. Member for Coventry, South-West (Mr. Butcher), who began the negotiations in Europe on the intervention fund and the new directive—which must lead to a far better subsidy for Britain—by pronouncing that he wanted to see an end to the nonsense of worldwide subsidies. It is remarkable that a Minister should start negotiations—where only the highest support scheme can stave off further redundancies in the British shipbuilding industry—by objecting in principle to the one European lifeline that is available to the industry. That is typical of some Ministers, who prefer experimenting with monetarist theory to trying to save the shipbuilding industry and the jobs within it.
  If there was one central concern missing from the Minister's speech, it was recognition of the scale of the measures that are needed, the urgency of the action that is required, the severity of the crisis facing the industry and the immediacy of the response that Ministers need to make.
  Already, British Shipbuilders, which employed more than 80,000 workers in 1977, now employs fewer than 8,000 as we enter 1987. Already, 50,000 jobs have been lost in the shipbuilding and ship repair industries since 1979. Already, about 25,000 jobs have gone or are to go in the merchant shipbuilding industry. Already, as the Minister readily conceded, our share of world orders has fallen substantially from 25 per cent. 30 years ago to just over 1 per cent. today. Already, many famous shipbuilding yards have disappeared for good. Yards such as Smith's of Middlesbrough will go in the next few weeks. By the end of the debate the Minister must give us an unconditional assurance that he will take whatever measures are necessary to protect the jobs, to save the yards and to win orders so that we can stave off the collapse of the merchant shipbuilding industry. I hope that he will be able to tell us before the end of the debate that when we have European intervention fund support and other measures, no other country in the world will be allowed to undercut us in the packages that we can offer to secure the orders that we need.
  Govan had a work force of more than 5,000 in 1979, and now has only just over 2,000 workers. It will have only 1,850 workers in April next year, but it has no orders to take it beyond that date, as things stand. We are having to fight also for orders for North-East Shipbuilders, which had more than 7,000 workers in 1979 and today has only 2,800. My colleague the hon. Member for Sunderland, North (Mr. Clay) will speak on that matter. The yard faces the prospect of only 2,000 jobs in April 1987, with only the Danish orders to take it beyond 1987, and even then just until 1989.
  The Minister will be aware not only of the report that has been put before the House tonight by the European Commission, but of a later one by the Commission on the prospect for jobs in the shipbuilding industry throughout Europe in 1987 and beyond. He will be aware that that report said that the European industry as a whole, having lost nearly 50,000 jobs in the past seven years, faces the loss of another 35,000 jobs in the next two years. It faces a 30 per cent. cut in capacity in the next two years and an even
  128
  bigger cut in the work force. Perhaps most frightening of all in the report is the fact that the Commission expects that 30,000 jobs will be at risk in 1987 alone.
  I have to tell the Minister that his negotiations in Europe for Britain must not lead to any further rationalisation or reductions by Britain, and that he must repeat to Europe that we must end the situation where this country, with most to lose, has done most in making sacrifices in our industry, while other countries with the least to lose have made the fewest sacrifices over the past seven years. He must remind Europe of the yards that have closed in the past 10 years throughout Europe, almost half in Britain, and say that we cannot tolerate any further closures. He must also remind Europe that almost half the 50,000 jobs that have been lost in the merchant shipbuilding industry in Europe have been lost in Britain, with more jobs to be lost before April 1987.
  Other countries may have lost 30, 40, or 50 per cent. of their work force in the past seven years, but we have suffered a 300 per cent. cut in our merchant yards and cannot be expected to make any further sacrifices in any European rationalisation. Denmark has lost about 3,000 jobs in the past seven years, Belgium about 4,000, the Netherlands about 5,000, Germany about 6,000, Italy about 7,000 and France about 8,000, but we alone of the shipbuilding nations of Europe, and we the largest island nation in Europe, have lost more than 20,000 jobs in our merchant shipbuilding yards. We will have lost 26,000 in total by April next year.
  In the past few weeks the Germans have taken extraordinary measures, using money from the defence and regional funds to secure the American President line orders with subsidies amounting to 42 per cent. of costs. The Danes, as we have found in the last few weeks, have increased their packages on offer, with the result that they have not only increased their share of world orders but are seeing a rise in orders while the world market is declining. If these countries can take extraordinary measures, and if France can offer three times as much subsidy per worker as Britain does, we must take the necessary measures, with or without the support of the intervention fund.
  We find it difficult to understand a number of aspects of the new directive, and we hope that the Minister will push for changes when he is at the meeting on 22 December. We do not accept the fatalism and defeatism that is explicit in the document. While we accept that there is a shortage of world orders, the Minister must bear in mind that if the industry is to benefit from the increase in world orders that is expected at the end of the 1980s and in the early 1990s, our shipbuilding industry must survive.
  We do not accept the failure in the document to recognise the strategic importance of the shipbuilding industry to individual countries and to Europe. This country, with the merchant fleet as our fourth arm of defence, has more to gain than most from emphasising the strategic importance of the industry and the necessity to support it. We do not accept the omission from the directive and the document of the recognition of the need for the Government, in cases of emergency, when regional issues and requirements are at stake, to step in to give special support to the industry.
  Most of all, we do not accept, as I understand from the Minister that he does not accept, the Commission's proposal that the ceiling of aid should be set at 26 per cent. As the Minister said, an independent report was prepared for the Commission by Appledore, which told us that the

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  gap between European and far eastern prices is 36 per cent. of cost, which is 50 per cent. of price. That is the level of support that is necessary for us to be able to compete fairly with far eastern countries, especially Korea, whose prices are being set at 20 per cent. below the prices of raw materials.
  The Commission suggests that the cost margin for tankers is up to 41 per cent., for bulk carriers, 38 per cent., and for container ships as high as 46 per cent. Even in those sectors where we might expect to do best, in the higher technology and specialised vessels, the report's conclusions are that the gap is about 35 to 36 per cent. The report has the support of British Shipbuilders, and has been endorsed as a method of proceeding by the European shipbuilding companies. It has the enthusiastic support of at least one other European shipbuilding nation, but for reasons which the Labour party does not properly understand, the Commission has started its negotiations by proposing a support system, not at the required level of 36 per cent., recommended by the report that it commissioned, but at 26 per cent. Even Britain, which has most to gain from the new system, and most to lose if it is not enforced, does not appear to be fighting for the full 36 per cent.
  What will be the effect on our industry if only 26 per cent. is achieved? I understand from comments in the press over the past few weeks that British Shipbuilders has told the Minister that Govan, under a regime of 26 per cent., would not be able to find orders and would be closed, that North-East Shipbuilders could not be expected to survive under a 26 per cent. regime, and that all the large shipbuilding yards in British Shipbuilders would be forced to close. The best hope that British Shipbuilders would be able to offer the Government under a 26 per cent. regime is that it might be able to retain in being Ferguson and Appledore, the two small yards, at work force levels of around 500. Did British Shipbuilders tell the Minister that the work force would be cut from 8,000 to about 800 if these proposals went ahead in their present form, or that our merchant shipbuilding industry would collapse if the Commission's proposals went ahead?
  The Secretary of State kindly wrote to me a few days ago about negotiations taking place in Europe. He went a long way towards accepting my suggestion that a 26 per cent. regime would be wholly unsatisfactory, but he said, and the Minister has repeated it tonight, that the 26 per cent. of cost of building a ship is already a considerable improvement on the present position.
  The present regime is cumulatively about 22·5 per cent. of price—about 17 per cent. of cost. Loss financing was about £40 million last year for British Shipbuilders, and under-utilisation was costed at about £40 million. When these factors are taken into account—they form about 12 to 13 per cent. of price—and when we take into account British credit terms, OECD credit terms and all the other indirect supports available to the shipbuilding industry, we find that the present level of support must, by definition, be higher than the level of support proposed by the Commission. I shall be happy to give way to the Minister if he is able to clarify that matter. We understand from the information available to us that the present regime is superior to the regime put forward by the Commission. This is an additional reason why the Minister should be able to say in Brussels to the Commission that its proposals are wholly unacceptable.
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  If, of course, the Government's objective is simply to save money, the Minister will make the ceiling as low as possible and will know that no money need be paid out because no orders will be won and nobody will need to draw upon the intervention fund. If the Government want to save the industry, they must go for the highest possible ceiling in the intervention fund. I should like an assurance from the Minister that he will fight for the 36 per cent. and will try his best to achieve it. Certainly at the end of the day no other country should be allowed to beat Britain in the fight for orders on the world market.
  We are the biggest island trading nation in Europe. We live by our seagoing trade, and 90 per cent. of our imports and exports arrive and depart by sea. As I have said, our merchant fleet is the fourth arm of our defences. We have made more sacrifices in our shipbuilding capacity than any other European country, yet we have most to gain from a strong shipbuilding industry and a strong regime of support. Shipbuilding in Britain is a traditional inudstry, but it is now also a high technology industry. It is an old industry, but it is no longer old-fashioned. The work force has made every sarifice demanded of it by the Government and in the last few weeks has concluded an agreement which guarantees that our shipbuilding industry can survive if only the Government will take the measures that will enable it to do so.
  To fail to fight for the industry, to betray the communities in the shipbuilding areas, or to abuse the efforts made by the work force would be quite incomprehensible. The Government must fight, not only for the new regime for which they say they are fighting, but for the highest possible level of support. They must build on that, not only by enabling us to have the best packages on offer in the world to save the industry, but by taking the measures which the Opposition have been suggesting for months. They must form a task force within the Department of Trade and Industry and advance public sector orders so that our yards can stay at work. They must persuade British ship owners and ensure that they buy British. These measures will save the industry. We support the industry, and I hope the Government will say that they will support it to the hilt.
  10.59 pm
  Mr. Hugh Dykes: So difficult is the situation in the industry that one is bound to have some sympathy with the Opposition spokesman and the rather dramatised way in which he set out the Opposition's demands and described the continuing parlous state of the industry. I shall be brief because, as a Member of Parliament from a southern constituency, I run the risk of annoying hon. Members on both sides of the House if I go on too long, especially as there are several experts present.
  I should like to say something about the directive and to exhort my hon. Friend the Minister to press for a sensible outcome to the Council of Ministers meeting on 22 December. It was disappointing to hear the hon. Member for Dunfermline, East (Mr. Brown) when he referred to a European Community-wide problem which needs Community-wide solutions. He described a built-in them and us conflict and spoke of Britain and Europe. We are part of Europe and the European Community. The only solution must be one based on a Community-wide approach.

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  The smaller EC nations have made greater sacrifices in percentage terms than Britain. We must remember that all states have made considerable sacrifices. Our industry was larger than others, so the decline has been that much more painful, but we are in this together. One can imagine what would have happened if member states had tried to undercut each other rather than make a concerted effort. Italy, France and Germany are shipbuilders of size.
  The malaise in Europe is special. As the memorandum to the directive says, this is not just a prolonged cyclical weakness, which has gone on much longer than we expected, but a major structural problem, combined with manifestly unfair competition from the far east. Only by acting in concert can the EC compete. Even then it will find life difficult. Only as one body, negotiating correct conditions in the general agreement on tariffs and trade, can the EC compete against the unfair hidden subsidies which are to be found in Korea and elsewhere. Doing that on our own would be constitutionally impossible as the Commission is responsible for such matters. It would also render us vulnerable.
  I welcome the directive, which is a substantial improvement on the previous one. I welcome the recognition of reality, which is that the European approach, and therefore the British one, must be to continue the trend to build specialised high-tech vessels on a bespoke basis rather than production line type ships. We cannot hope to compete with the far east in the latter category, but we can offer the much more sophisticated ships of the future. They may be smaller in number, but they will be significant in terms of tonnage. There is at least a glimmer of hope that, by the end of the decade, as the figures in the consultancy report suggest, matters will be much better. The outlook could be better still if the world economy enjoys a stronger upturn than is expected by most economic commentators.
  It is ridiculous of the Opposition to ask for an absolute guarantee against all undercutting on whatever orders might be presented to British yards. No Government can give such an undertaking. Nevertheless, if the ceiling of support can be increased on 22 December, there will be much support for that. It may be too late, but if such agreement can be reached, the Commission might be prepared to reconsider. I wholeheartedly support this improved directive.
  11.4 pm
  Mr. Bruce Milian: The hon. Member for Harrow, East (Mr. Dykes) mentioned the dramatic way in which my hon. Friend the Member for Dunfermiline, East (Mr. Brown) opened the debate for the Opposition. Unfortunately, it is impossible to overdramatise the condition of our shipbuilding industry because we are in danger of witnessing the extinction of the merchant industry as we have known it. We face a critical situation.
  My hon. Friend the Member for Dunfermline, East dealt comprehensively with various matters and I do not intend to repeat what he said. He asked a number of pertinent questions which I hope that the Minister will answer. I was particularly interested in what he said about the comparison between the 18·4 per cent. of costs which the Minister said was the present level of subsidy and the 26 per cent. that is under discussion in the Community. My
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  hon. Friend suggested that that was not a direct comparison and that the present level of subsidy is higher, for one reason or another, so that 26 per cent. would be a reduction.
  The industry has been bedevilled for years by the fact that intervention fund money has ostensibly been made available, but the support has not enabled British shipbuilders to obtain the orders that were available. We have had the worst of all worlds; money has apparently been available, but it has not been enough to allow orders to be obtained. It is no use having support available, at whatever level, unless orders can be obtained at that level. I am glad to hear that the Government share our doubts about whether the 26 per cent. would produce any significant orders for us or other countries in the Community facing similar critical problems.
  The Minister said that the 26 per cent. was not enough, but he did not say what he thought that the level should be. My hon. Friend the Member for Dunfermline, East mentioned the study commissioned by the Community and conducted by Appledore and Deloittes. That suggests that the subsidy ought to be considerably higher than 26 per cent. I hope that the Minister will tell us what is in the Government's mind. The next ministerial discussions take place a fortnight today and there must be agreement then or there will be no new regime in force on 1 January 1987. There is no reason, in terms of the Government's negotiating position, for the Minister to be coy about telling us what is in the Government's mind. Unless the subsidy is substantially higher than 26 per cent. we shall not get a new directive that will be of benefit to British shipbuilding.
  The Minister said that the Government were thinking about having more than one ceiling or common maximum. He said that in certain circumstances the common maximum would not apply. As the directive is drafted that is certainly true, because it is a common maximum. We are not talking about 26 per cent. which will apply across the board. That is the maximum that would apply. I hope that the Government are not thinking of having a second ceiling which would be less than 26 per cent. because that would be even worse than the Commission's proposals.
  We know from recent ministerial answers that certain member states want more than one ceiling, and at least two ceilings, to be applicable. We are entitled to know what the Government think about that. That passage in the Minister's speech was obscure and I am not clear what the Government have in mind for the further negotiations.
  Apart from the directive and the possible level of subsidy, we need to approach the problems of merchant shipbuilding in the United Kingdom with a much wider perspective. For example we need to get British shipowners to place orders in British yards. That does not happen here as it does in Japan and elsewhere. It is rather ironic that in the directive there are special derogations for Spain and Portugal when the latest figures I have seen show that Spain has a larger shipbuilding industry than the United Kingdom. It certainly employs far more people and has a much healthier order book.
  There may be reasons for making that derogation in favour of Spain, but Spain has built up its shipbuilding industry in recent years. For a long time we have seen, not merely a gradual, but a catastrophic decline in our merchant shipbuilding industry. Therefore, we need a wider approach and provisions which will ensure that British shipowners place orders with British yards and we

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  need to reconsider fiscal incentives for a scrap and build programme. In particular, we should like to see the orders in the direct gift of the Government being brought forward as soon as possible.
  Govan Shipbuilders is acknowledged to be one of the best yards in the United Kingdom. It is technically efficient and builds advanced technological ships. Indeed, at present it is building a P and O ferry. But that is all it is building. The ship has been launched and is due for delivery in the spring and there is nothing to follow.
  At present Govan Shipbuilders is attempting to obtain a further order from Brittany Ferries and is actively involved in trying to obtain orders from China for container ships. Negotiations are continuing and the orders are difficult to achieve in the present circumstances, but I am confident that if Govan obtains the orders, it will do as excellent a job, as it has done on all the recent ships built there.
  The order for the replacement of the ferry to St. Helena would be particularly helpful. The Minister for Overseas Development announced that on 21 May 1986, but the details of the order have not yet been put out to prospective tenderers. They may come from the private sector as well as British Shipbuilders. It is now six months since the decision was made to place that order. It is a substantial ship and it would be of considerable advantage, if the order came to Govan, as I am confident it will because Govan can put in the best tender for it.
  I wrote to the Minister for Overseas Development in October about this and on 22 October I received a letter in which he acknowledged that the Government hope to be in a position to make a decision shortly. I know that the Minister acknowledged at that time that it was important that the decision should be reached as quickly as possible and the order should be placed as quickly as possible. I repeat that this has gone on from May to December and nothing has happened so far.
  If there is a critical situation in the industry, which there is, one would have though that the first thing any caring Government would have done would have been to place the orders, which do not depend on what happens in other parts of the world such as Japan, South Korea and so on. I am talking about orders that can be placed directly by the Government.
  The Minister for Overseas Development was present earlier in the debate. I thought, optimistically, that his presence might have meant that the Minister of State was going to announce that the order was to be placed very soon. However, the Minister for Overseas Development has since disappeared and the Minister of State did not mention the order in his opening speech. I ask the Minister to deal with that question in his closing remarks. The order is very important. It can be placed soon. It is in the direct gift of the Government. That sort of action would demonstrate some, commitment on the part of the Government towards this important industry. That is a commitment which, unfortunately, has been all too lacking in many circumstances over the past seven years.
  11.16 pm
  Mr. Jonathan Sayeed: No one who believes that there is a strategic need to keep shipyards operating in this country, both merchant and warship yards, could have anything but considerable sympathy for the speeches made by the right hon. Member for Glasgow, Govan (Mr. Milan) and the hon. Member for
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  Dunfermline, East (Mr. Brown). However, I was rather disappointed that, although both of them complained about the level of the intervention fund, neither of them seemed to discuss the scale of the problem. The problem is fairly obvious. In most classes and types of merchant ship there are nearly twice as many modern ships as one needs to carry the current amount of goods around the world.
  Mr. Michael Hancock: A substantial proportion of that number are falling apart at the seams and need to be replaced.
  Mr. Sayeed: The hon. Gentleman is wrong. He will see that if he looks at the books of reference. I was talking about the types of modern ships. In most classes and types of merchant ship there are twice as many as are necessary.
  The other problem is that, sometimes assisted by this country, Korea has managed to dump ships on the market at costs that are far less than even the steel cost. I find it extraordinary that the European Community is unable to effect an anti-dumping policy for ships. The European Community and its members are having to pay out of their own coffers to subsidise a shipbuilding industry that is competing unfairly with far eastern yards. The European Community seems incapable of stopping far eastern ships from coming to European ports and being operated by owners whose ship cost is far less than that of any ship owner who builds his ships in this country or elsewhere in Europe. I regret that we in Europe have done nothing about that.
  Having said that, I am particularly delighted that there will be much greater transparency in the types of subsidy being given. Like other hon. Members, I regret the fact that the upper limit that has been agreed so far is only 26 per cent. It should certainly be closer to 35 or 36 per cent., in order to win orders. We would all like to have a perfectly fair industry worldwide which meant that there was no need for subsidy. However, subsidy is essential if we are to keep our yards open, and we certainly need a higher subsidy than 26 per cent.
  I should like the Minister to let me know one thing that has been worrying me, having read the papers. Will the directive stop all speculative building? [Interruption.] I am thinking about the speculative building of warships in this country. If hon. Members will wait, they will understand what I am saying. There is still the possibility of merchant shipbuilding yards being able to build simple warships for sale abroad. I wonder whether the directive will stop those yards from being able to put forward plans for the building of simple offshore patrol vessels, including, in certain cases, an enlarged OPV, which would be almost frigate size, which could be of interest to other countries. Those ships could be leased to the Royal Navy on a purely cost basis. The Navy would operate and demonstrate them around the world.
  Those simple ships can be built not just by warship yards but by merchant shipyards. Because Britain's warship yard building industry is far too sophisticated for most countries' requirements, there may be an opportunity for merchant and warship yards in Britain to build hulls and machinery which other countries may be interested in purchasing. Will that be permitted under this directive?
  The Government's proposal is a step in the right direction. I regret the fact that the Opposition have not at times recognised the scale of the problem. They have not

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  stated that the level of subsidy per employee is one of the highest in the industry. I am delighted that we have had this opportunity to remind my hon. Friend the Minister—he has accepted this—that the level of subsidy necessary to keep the shipyards open in this country is higher than the 26 per cent. proposed.
  11.21 pm
  Mr. Michael Hancock: This afternoon, I came from a meeting in Portsmouth where I was party to a decision to deal with what happens when a shipyard closes. The shipyard in my constituency at Vosper Thornycroft closed some six months ago and I was party to the decision on what would replace it. Every day what I see in my constituency bears witness to the fact that there is a major decline in the shipbuilding industry. I fully understand the size of the problem. Every week, people who have worked all their lives in the shipyards in my area come to see me. They know only too well the price that they have had to pay and the size of the problem.
  We have to welcome at least the Minister's statement that the level of subsidy is hopelessly inadequate. Several hon. Members from both sides of the House have expressed concern about the future limit of subsidy. I feel that there is a common belief in the House that a subsidy of less than 30 per cent. is ludicrous and that a more realistic figure of about 36 per cent. would give hope that the problems that our shipyards face not only in Europe but elsewhere will be redressed. The announcement is a major step forward. At long last, there is general recognition of the problem.
  The hon. Member for Dunfermline, East (Mr. Brown) talked about the number of people who have been put on the scrap heap. In the past 10 years, 61 yards in Europe have closed, 25 of them in the United Kingdom, including two in my area. Already shipbuilders are trying to find ways around the problem—not by the speculative building about which the hon. Member for Bristol, East (Mr. Sayeed) talked but by putting deals together. They are paying interest over a long period so that the customer picks up the final tab rather than the initial costs. Companies in my area are pushing that idea.
  The directive recognises that we must increase subsidies even to the efficient yards in the EEC if they are ever to compete with the far east. I hope that, at long last, the Commission has recognised that, if Europe is to have a future as a shipbuilding entity, there must be a greater subsidy and the industry must be made more productive and made more effective at selling.
  The Government must take a decision about what kind of future they want for the shipbuilding industry. Do they want to follow the example set in Sweden where, of all nations, Sweden has been forced to the conclusion that there is no foreseeable return to viability for the Swedish merchant yards and it has allowed those yards to shut down without any assistance from national resources? Alternatively, will the Government adopt the line taken by Italy and Germany who have decided to go against market logic and, through direct and indirect incentives and by transparent and other means, have managed to keep a substantial industry on its feet?
  We have already heard about the achievements made by Denmark over the past two years. Denmark has turned its industry around and is, for the first time in a decade,
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  witnessing growth in the industry. The United Kingdom and the Government are, I fear, following a similar track to that taken by Sweden. The Government have fought shy of a policy that would force the industry to extinction. They have adopted a far worse policy. They are keeping the industry hanging on and are dangling it over an abyss without taking the decision as to whether they want a viable shipbuilding industry or whether they should let it decline in the way it has declined in Sweden.
  The Government must make a decision and come clean. They owe that much to the many people whose livelihoods depend on the industry. They must decide whether they want the long term survival of the shipbuilding industry in this country or whether they would be happy to see the decline increase.
  We must recognise what is happening elsewhere. Anyone who would try to deny what is happening in the far east would be a fool. We know that ships are being built in Korea below the cost of the raw materials. That is a ludicrous position for us to compete with. It is also nonsense that we and the rest of Europe do not encourage each other by buying from each other and so try to maintain the stability of the industry in one area.
  I would like to speak for a few minutes about—
  Dr. Norman A. Godman: For a few minutes.
  Mr. Hancock: I am aware that other hon. Members wish to speak and I will bear that in mind. However, I have a distinct constituency interest in the matter—
  Dr. Godman: So have I.
  Mr. Hancock: More than 2,000 jobs in my constituency depend directly on shipbuilding, but there will be only 1,000 if the Government do not come off the fence over a specific deal that involves Vosper Thornycroft. Vospers has put a proposition to the Government over the building of a single purpose mine hunter. In doing so, it has calculated that if it has to remove 1,000 people from its work force, that will cost the company about £2 million in redundancy payments. The company is prepared to pay the interest on that ship for the Royal Navy, is prepared to build it in the coming 12 months, and accept payment in 1989 if necessary. All that the company needs to keep 1,000 people in work over the next 18 months is an order from the Government. Once again the carrot has been dangled before the company and that has been pulled away so often during the past 12 months that the company is in grave danger now of having to start laying people off early in the new year. That would be an absolute disgrace. If the company does not receive the order, undoubtedly by this time next year, there will be another 1,000 workers in south Hampshire signing on for unemployment benefit.
  There is a need for the Government to recognise the specific crisis faced in certain yards. As we have heard in relation to the replacement ship for St. Helena, the Government have the power to save some of the yards from going further and further adrift. Europe must join forces with the United States in forcing cuts on far eastern yards as has been suggested by hon. Members this evening and as is suggested in the documents. We should find a way of funding shipowners to get rid of old ships. The hon. Member for Bristol, East (Mr. Sayeed) said that I did not recognise the need. I saw ships in the harbour in Portsmouth today which had brought fruit from the

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  middle east and which were literally falling apart at the seams. Those ships need replacing. Many of them fly the flags of European countries and they should be replaced urgently.
  Many of the coasters that ply around our shores need urgent replacement; they literally stagger from port to port. They undergo major repairs and maintenance after dropping off their cargoes especially at the south coast ports. They can be replaced only if there is a greater will to give subsidies to the yards, and we must do that.
  The Government must be more vigorous in selling our ships, our shipbuilding capacity, our technology and our skills abroad. We must not fall into the trap, as we have in the past, of losing ships. There is only one way to save the shipbuilding industry—to build ships. It needs new orders and we must find ways to provide them. I regret that that will not happen.
  It is ironic that we are in danger of losing that expertise. One hon. Member mentioned a new ferry for Brittany Ferries. In my harbour are ferries that ply back and forth to Ryde on the Isle of Wight, a distance of four miles. Where were the two replacement ferries for Sealink bought? It was not at Vosper Thornycroft, not at a British yard, not at a European yard. They were not built in Korea or Japan—they were built in Australia. It was cheaper for Sealink to sail those ships from Australia, taking almost two months, so that they could then ply a four-mile strip of water. We could not obtain the orders. It is a disgrace that more was not done to encourage British companies to buy British ships. We must recognise that the British shipbuilding industry is on its last legs.
  I shall support the Opposition amendment because it undoubtedly recognises that more has to be done. Words are no longer enough. Nice things said in this House about what we have done and what we might be able to do, do not offer hope to those whom I represent. They want orders and a vigorous, robust attack by the Government on the world shipbuilding industry, and the British shipbuilding industry will undoubtedly respond.
  11.32 pm
  Dr. Norman A. Godman: The proposed directive is an improvement on the current directive, but it should be altered in one important respect. My hon. Friends have referred to the 26 per cent. regime, which is far too low and must be set at a higher level. If the Government are genuinely concerned about retaining a shipbuilding capability, that is the argument that the Minister must put forward in Brussels.
  As the Minister knows, Scott Lithgow in my constituency just a few days ago announced 1,500 redundancies. The male unemployment rate in my constituency already stands at 25 per cent. These redundancies will take it above 30 per cent. I suspect that there are few Tory Members who have that sort of social and economic problem in their constituencies.
  I am pleased to note that conversion work is to be treated in the same way as shipbuilding. I would have thought that the recent contract signed by Scott Lithgow with ACL falls directly within the definition of ship conversion work in article 1 of the proposed directive. Where does Scott Lithgow stand? Will the Minister abide by a designation made several years ago when that yard was still owned by British Shipbuilders? Or is it the case that yards privatised by this Government are to be denied EEC support? That, to say the least, would be a savage
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  irony. Or will a shipyard—either privatised or still part of British Shipbuilders—be considered eligible if the criteria outlined in article 1 are met?
  Perhaps the Minister will also tell us why there is no mention of marine engine builders in the document. Clark Kincaid, for example, is well able to work positively and closely with, say, Govan and yards in the north-east of England. Why is marine engineering not included?
  Finally, I sincerely hope that assistance to shipbuilding communities such as mine will emerge under the provisions regarding aid for closures. Article 7 refers to
  "payment to workers for vocational retraining"
  and to
  "expenditure incurred for the redevelopment of the yard, its buildings, installations and infrastructure for industrial use other than that specified in article 1"
  In my constituency there is a belief that highly skilled welders and other shipyard workers will end up as rope catchers for yachtsmen coming into marinas on the Clyde.
  I should like to know how the Government intend to define yards eligible for assistance and specifically whether Scott Lithgow and other privatised yards will be encouraged to seek that kind of support from the directive.
  11.36 pm
  Mr. Bob Clay: I was disturbed at the Minister's complacent introduction. He seemed not to appreciate the effect of a 26 per cent. limit under the sixth directive, which includes various things not covered by the present limit and the fifth directive. There seems to be some muddle on the Government's part. In the past when we argued that more should be done than straight intervention the Government claimed that that was not possible because of the fifth directive. We are now told that those things were not excluded by the fifth directive but that they may be excluded by the sixth directive.
  It has already been made clear that what is left of British merchant shipbuilding will simply disappear unless the Minister makes it plain that we cannot accept the kind of limit envisaged. Authoritative sources in British Shipbuilders have suggested that the present level of subsidy, with all the things that may now be costed into the proposed new regime, is around 42 per cent. and that is hardly enough to keep us afloat. It is vital, therefore, that the Minister should be far more dynamic in making it clear that we cannot accept the limit proposed.
  Like my right hon. Friend the Member for Glasgow, Govan (Mr. Millan),. I was also disturbed at the Minister's reference to a possible differential with lower limits for small ships. How would he define that? The Danish ferry order on which North-East Shipbuilders Ltd., in my constituency is working is a large order, but it is for a large number of small ships. Had there been a differential and an even lower level of assistance than is now proposed, would that have affected an order which saved shipyards in my constituency from extinction but attracted only the basic intervention money with no other Government help whatever?
  With one exception, to which I shall return, the points made by the Minister were sadly familiar. We heard all about the depressing state of affairs throughout the world and the crisis in the shipbuilding industry without any recognition that the decline in capacity and in the merchant fleet has been twice as had here as it has been even for European neighbours such as Italy and West Germany. There was no recognition of the fact that that

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  has happened because other countries, even in this recession, have taken measures which the Government were not prepared to take.
  All that we need do is to consider the point made by my right hon. Friend the Member for Govan about the order for St. Helena. We could argue about all the other things that the Government could do, but that ship is in their gift. We have been talking about the order for St. Helena for about two years. I recall the Secretary of State being reported as saying in May that an order would be placed by the end of the year. The order could have been announced tonight. It would have brought some relief to some hon. Members. Yet the Government have nothing to say about it. The distinctive feature of the Minister's speech tonight, as compared with previous ones, is that there was no discussion of any chance of orders. Usually, there would be a quick rundown of orders. Earlier this year, we were told that orders for China and Cuba might be in place by June or September, but nothing definite has happened.
  I am highly suspicious that, if the Government have not given up altogether on merchant shipbuilding, they seem to be deliberately encouraging or allowing British Shipbuilders to run down the work force and to continue the programme of redundancies until it reaches the point where most people in British Shipbuilders, and most people who understand the industry will believe that it can no longer be viable. It is disgraceful that, in my constituency, we have what is effectively a lock-out. At Austin and Pickersgill, the management claim that there is a labour surplus of 450. So there is a shortfall on the 925 redundancies that British Shipbuilders wants. Nevertheless, 50 men were taken off the clock for refusing to work overtime, at a time when 450 men are facing compulsory redundancy and when management is bringing sub-contractors into the yard and putting them into departments in which they claim they have a labour surplus. They have taken people off pay, thereby provoking an all-out strike, in blatant breach of all agreements with the trade unions. That looks like deliberate pre-Christmas provocation to try to sicken even more people and force more into redundancy. Presumably, the company will then blame the work force, if it dares, for the fact that no more orders are on the horizon.
  I hope that the Minister will take note of my remarks and will tell British Shipbuilders that this behaviour is disgraceful. The company should be making more effort to obtain the few orders that are around. It should be asking itself why there should be the order for the American President line, when earlier in the year we were told that there were no orders to be had anywhere in the world. By 1990, Bangladesh will have ordered 30 ships, and it has already placed a contract in China for a substantial multi-purpose carrier.
  There are other examples of orders this year. After all, last year, Japan managed to get 2·8 million gross tonnes of orders from foreign owners. Why could not British Shipbuilders attempt to obtain at least one tenth of that? With the number of orders that Japan obtains from overseas in one month, British Shipbuilders could not only withdraw the redundancy notices but could begin to take back people with skills. My constituency has 27 per cent. unemployment, according to the Unemployment Unit and based on the non-fiddled figures. That will increase to
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  more than 30 per cent. if the redundancy programme continues. My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) made that point about his constituency. Goodness knows what level it will be if the yards close completely.
  It is time for the Minister to say that he will fight for a better deal than is suggested in the sixth directive. He should make it clear that, whatever the other members of the EEC say, we shall not allow our membership of the EEC to sound the final death knell of British shipbuilding and that we will subsidise the industry to the level that is required to save it, whether the EEC likes it or not. With that sort of fighting talk, he might get some sense out of the other members.
  11.44 pm
  Mr. Don Dixon: I agree with my hon. Friend the Member for Sunderland, North (Mr. Clay). Unfortunately, the management at Austin Pickersgill is typical of the management in the shipbuilding industry. After years of co-operation from the work force, management is definitely provoking the men.
  The Minister said that the new regime would be an improvement on the present one. That would not be difficult, because the fifth directive was a disaster for British shipbuilding. Indeed, until now, the Government have never fought the corner of British shipbuilding. Instead of giving support during a period of decline in world shipbuilding, the Government have merely used their energy on privatisation. My right hon. Friend the Member for Glasgow, Govan (Mr. Millan) mentioned scrap and build, but there is nothing in this document about that.
  Everyone knows—the hon. Member for Bristol, East (Mr. Sayeed) has mentioned this on several occasions—that our merchant fleet is fast disappearing. Not only has there been a decline in the size and tonnage of the British merchant fleet, but it has also aged. In fact, 42·7 per cent. of the fleet is more than 10 years old, 13.7 per cent. is more than 15 years old and 5·1 per cent. is more than 20 years old.
  That point was made in a letter by Jim McFaull, chairman of the shipbuilding negotiating committee, to the Secretary of State on 4 December, in which he said:
  "Fiscal incentives must be given to shipowners to scrap old ships and replace them with new ships. This will not add to overcapacity in shipping, but will upgrade the fleet."
  That is urgently needed. What has happened to merchant shipbuilding in the years since nationalisation is well illustrated by British Shipbuilders' own corporate plan, which states:
  "In July 1977, British Shipbuilders had 38,700 employees engaged in merchant shipbuilding. By mid-1985 this had been reduced to 8,349, a reduction of 79 per cent.,"
  and more redundancies are to come, as has been pointed out by my hon. Friend the Member for Dunfermline, East (Mr. Brown). It is almost as though prizes were being given to those who could run the British shipbuilding industry down faster than any other industry. That may be so, because the salary of the chairman of the corporation increased from £36,447 in 1981 to £101,298 in 1985—the smaller the industry became, the higher the salary of the chairman.
  The north-east has been devastated by redundancies and yard closures. In 1977 British Shipbuilders' subsidiaries employed more than 30,000 men in the north-east. That is now well below 10,000. For the first time in

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  living memory no ships are being built on the south side of the River Tyne. Indeed, one of the most modern fabrication sheds, Palmers Hebburn, will be used for the storage of surplus EEC grain. Instead of building ships to take that grain to the starving millions of Africa, this Government are now storing it in modern fabrication sheds which were originally meant to build ships.
  What happens to the money designated by the EEC. Article 7 refers to
  "payment to workers for vocational retraining … expenditure incurred for the redevelopment of the yard, its buildings, installations and infrastructure for industrial use other than that specified in article 1 (a)".
  I wrote to the Secretary of State on 17 November and said:
  "I was alarmed to read that the EC Commissioners acting on a report of the Court of Auditors 'Official Journal C262 20 October 1986' had stopped the part of the Non Quota Section of the European Development Fund which was designated for Shipbuilding Areas because the United Kingdom Government had not spent the money allocated in the correct manner".
  Not only have areas such as ours been run down and devastated by shipyard closures, but money that has been allocated under the EEC non-quota section has been misappropriated by the Government. Instead of going to the areas to which it was designated, it has been used elswhere for other purposes.
  I hope that the Minister will respond to the issues which have been raised by my hon. Friends, those which were set out in a letter to him from the chairman of the SNC about the intervention fund, or subsidy, and a co-ordinated policy to bring forward orders for public sector corporations. Trade and aid provisions should be orchestrated to allow Third world countries to acquire much needed ferries and barges for their inland waterway transport systems. The trade unions have referred a number of matters to the Secretary of State, and I hope that they will be taken on board.
  11.50 pm
  Mr. Giles Shaw: With the leave of the House, Mr. Deputy Speaker, I shall reply.
  First, in response to the hon. Member for Jarrow (Mr. Dixon), I have received Mr. McFaull's letter, and there will be a full response. I shall examine his constituency interest about a stoppage of the intervention fund and write to him.
  I shall refer briefly to some of the major issues which have been raised, while recognising that time may not permit a full response. The hon. Member for Dunfermline, East (Mr. Brown), who spoke from the Opposition Front Bench, talked about the benefits of the 26 per cent. regime that is proposed by the Commission as against those of the existing regime. There is much difficulty in relating the two regimes, because they measure different things. On the plus side, all aids come within an aid ceiling now. That was not the position hitherto. The House will recall that British Shipbuilders and others have long complained that aids go to other European shipyards that are not available to them and that they are declaring more for the benefit of the intervention fund while other European yards are declaring less. That anomaly has been removed under the new proposals and the benefit will be unquantifiable.
  There are problems about loss financing. It is a mistake to believe that we enjoy a free ride with the loss financing of British Shipbuilders. Under the fifth directive that was
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  related to restructuring. The sixth directive is not so related. That is a major benefit that is presently unquantifiable.
  I omitted to stress previously that the new regime under the sixth directive is not the same as that of the fifth, which is that intervention funds are available only where restructuring has taken place. Hon. Members have rightly said that the British yards have suffered more than their fair share of construction, and that is a view that I fully accept. With the prospect of being able to win more orders, with the benefits that we hope will accrue by the end of the negotiations, we hope that we shall not be in the same position as that in which other countries may find themselves—engaging in substantial restructuring in the light of the proposed directive.
  The right hon. Member for Glasgow, Govan (Mr. Millan) spoke about the shipyard in his constituency and the problems that it faces. I shall respond to him in proper manner. The Government have decided what type of ship to recommend to the Government of St. Helena. As soon as that Government's agreement has been received, the ODA will set in motion the competitive tendering arrangements for design and construction of the new vessel in a United Kingdom yard. That is what the right hon. Gentleman wants to see done, and I am happy to make this announcement in response to his speech this evening.
  Opposition Members have spoken about ordering, and it is right that there are some prospective orders. So far this year British Shipbuilders has secured orders for 27 ships. The large majority comprises ferries that will be built in the north-east. There are 25 ferries to be built there. There are also the ferry for Caledonian MacBrayne at Ferguson and the dredging vessel that is being built at Appledore. There are prospective orders, and the container ship for China is one of them. The hon. Member for Greenock and Port Glasgow (Dr. Godman) will know that a Chinese delegation visited the United Kingdom recently and that I saw it before it travelled to Scotland. The Government are making a major effort through British Shipbuilders to try to secure that order. There are some important orders available and some important prospects, but the general climate is one in which there is infinitely more capacity than demand for new ships.
  I heard the point made by the hon. Member for Portsmouth, South (Mr. Hancock) about Vosper Thornycroft. That is essentially a matter for the Ministry of Defence, and not for me, but I shall draw the attention of my right hon. Friend the Secretary of State to it.
  The hon. Member for Greenock and Port Glasgow asked me specifically about the intervention fund being made available to help Scott Lithgow. I explained to him the other day that the intervention fund was not available to Scott Lithgow because that yard was designated as an oil rig builder, and only merchant ships benefit from the intervention fund arrangements. I made it clear to him that the home credit scheme was still available and loan guarantees would be available to that yard.
  Dr. Godman: I do not deny that that designation took place, but Scott Lithgow at this very moment has an order for a ship conversion, to the Atlantic Conveyor, which means that it is not specifically an offshore oil structure building yard. It is, in every sense of the word, a shipyard.
  Mr. Shaw: But, as I explained to the hon. Gentleman the other day, the yard was so designated when it was

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  privatised as part of the restructuring of British Shipbuilders. That designation remains in relation to the position of the yard under the intervention fund. Conversion costs relate to the sixth directive, which is not in force. So the position is not as easy as the hon. Gentleman wishes. I agreed with him that I would examine what else can be done within the area in which it is located, to see whether assistance can be brought.
  The hon. Member for Sunderland, North (Mr. Clay) rightly was concerned about the Danish ferries. It is suggested that there might be a difficulty with small ships primarily because of the 26 per cent. ceiling. I trust that a higher ceiling will be negotiated. I am not prepared to disclose what the objective might be, but I take note of the fact that the shipbuilders in Europe are committed to a requirement of 30 per cent. or more. At least that is a firm statement. Now 35 per cent. appears to have dropped out of the shipbuilders' view as a desirable objective.
  With regard to small ships versus large, the real comparison to be made is with the larger ships in the international market, which is why the ceiling has been placed at at least 25 per cent., and we hope that it will be higher. The possibility of that applying to all ships at all stages and all sizes still has to be debated in the Council. There have been some discussions—the right hon. Member for Govan might know of them—of a twin ceiling arrangement. Certain member states would prefer it that way. I would prefer to see a single ceiling at a level that would be conducive to the future development of British Shipbuilders. I am sure that that is the right thing to propose.
  Those are the views that I take from the House. I am grateful for the comments that hon. Members have made, and I trust that they will approve the motion—
  Mr. Gordon Brown: Does the Minister accept that the Committee of European Shipbuilders said that the support should be at least 30 per cent.? It did not set the limit at 30 per cent. in the discussions this weekend. Will the hon. Gentleman answer the central point of the debate? If the independent report recommended 36 per cent. of cost support and Britain has most to gain from that, why are we not pushing 36 per cent. in Europe?
  Mr. Shaw: On the latter question, the hon. Gentleman will see that the report uses a selective method of comparing certain types of vessel with certain prices and costs. He will know that the market for ships in the United Kingdom is orientated much more towards the high quality sophisticated merchant vessel. So it is not entirely fair to say that the figure in the report is relevant for the United Kingdom. What is relevant is that we should obtain a ceiling for the sixth directive that will allow us to compete effectively internationally as well as within Europe. We mean to achieve that because the new directive is much more precise as to what aids must be included in the aid ceiling, and it will be monitored to ensure that that takes place. That gives advantage to our yards and more confidence to British Shipbuilders in its competitive tendering overseas. I accept the view expressed by Opposition Members, and indeed, by my hon. Friends, that we must do our utmost to see that we lift that 26 per cent. ceiling significantly in the negotiations on 22 December. I intend to do just that.
  Amendment negatived.
  Resolved,
  That this House takes note of European Community Documents Nos. 9470/86 and 9470/1/86 on aid to shipbuilding, and supports the Government's intention to press for early adoption of the Directive in a form which will provide a fairer and more transparent aid regime in Europe and enhance the ability of European yards to compete in world markets.

  British Shipbuilders (Borrowing Powers)
  11.59 pm
  The Minister of State, Department of Trade and Industry (Mr. Giles Shaw): I beg to move,
  That the draft British Shipbuilders Borrowing Powers (Increase of Limit) Order 1986, which was laid before this House on 21st November, be approved.
  The order concerns British Shipbuilders' borrowing limit. This is the statutory ceiling on the funds which the corporation may acquire in the form of public dividend capital from the Government, and loans from the commercial market. The limit presently stands at £1,300 million, as a result of the British Shipbuilders (Borrowing Powers) Act, which received the Royal Assent as recently as June of this year. The terms of the 1986 Act enable the limit to be raised by a further £100 million to £1,400 million, subject to affirmative resolution of this House. I now propose that the borrowing limit should be so raised to £1,400 million. The order, of course, merely gives BS the power to receive the money. It will always be for the House to decide what should actually be made available through the Estimates procedure.
  When my hon. Friend the former Minister of State introduced the British Shipbuilders (Borrowing Powers) Bill earlier this year, he spoke at length about the severe difficulties facing the shipbuilding industry from which none of the shipbuilding nations had been immune. We have just gone over that ground. Notwithstanding the problems of the market, when the House debated the borrowing powers Bill no one anticipated that the corporation's finances would deteriorate as rapidly as they have. The most important single event which has put pressure on the corporation's borrowing position is the receivership of International Transport Management (Offshore) Ltd. British Shipbuilders had almost finished building a most sophisticated craneship—the "Challenger"—at Sunderland Shipbuilders, when the company fell into the hands of the receiver. At the time of the receivership, ITM had paid only a small deposit on the vessel, with the result that British Shipbuilders has been obliged to finance construction costs totalling not just millions but tens of millions of pounds. Indeed, almost half the increase in borrowing that the House sanctioned in May has been required to cover, at least temporarily, the costs of this vessel. However, BS advises me that it expects to be able to recover some of these costs in due course to minimise the cost of the receivership.
  Another significant source of pressure on the Corporation's cash position results from difficulties in delays it has experienced in securing new orders. Nevertheless, it has had some significant successes and is continuing to make major efforts to improve its efficiency in support of its marketing strategy. This is already beginning to pay off. North-East Shipbuilders on the Wear won an important order for 24 Danish ferries this summer, which will provide work for the yard until the end of 1989. A few days ago as the hon. Member for Sunderland, North (Mr. Clay) will know, it won a further order from the same source worth £4 million for a 25th ferry. The yard won the order because the Danes judged the offer from British Shipbuilders to be a better bargain compared with the alternatives that their own yards could offer. I am sure the hon. Gentleman and the House would agree this is a most encouraging development.
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  In total so far this year, BS has won around 90,000 compensated gross tonnes of orders—over three times the level won last year. The Danish order predominates, but each of the smaller yards has also won a contract: Appledore has a further dredger, and Ferguson on the Clyde has the Caledonian MacBrayne ferry. BS is also actively pursuing a number of other orders, but for reasons outside its control, each of them is taking longer to secure than had been hoped. This has had an adverse effect on cash flow and thus on borrowing, and it can no longer remain within its external financing limit for reasons outside its control. My right hon. Friend the Chief Secretary and I are, however, determined to ensure that there should be an effective limit on areas that it can control. The EFL will be revised formally once we are clearer about how some of the major uncertainties arising from the corporation's clients, notably ITM, are to be resolved. The amounts involved are peculiarly large for an organisation of that size, and are clearly outside BS's capacity to control. In the meantime, we have introduced a firm limit of £155 million on the financing needs of the continuing businesses within BS.
  To help the Corporation's cash position, which has unavoidably deteriorated in recent months, we need to proceed with this measure to raise British Shipbuilders' borrowing limit by £100 million. I commend the Order to the House.
  12.4 am
  Mr. Nicholas Brown: The Minister may be new to these debates, but I can assure him that I and my hon. Friends on the Opposition Benches are not. In July 1983 I and my hon. Friend the Member for Sunderland, North (Mr. Clay) made our maiden speeches on the British Shipbuilders Borrowing Powers (Increase of Limit) Order 1983. At that time we both condemned the Government's callous indifference to Britain's shipbuilding industry and here we are, several British Shipbuilders Borrowing Powers (Increase of Limit) Orders later—because there has been a succession of these things since I have been in the House—again condemning the Government's callous indifference to Britain's shipbuilding industry.
  In my latest contribution to these ongoing debates, I welcome the opportunity to update my list of grievances and the grievances of those who live in shipbuilding communities. All Opposition Members who sought to speak represent shipbuilding constituencies and we have seen privatisation, appeasement of European interests and surrender to unfair far eastern competition, smash and ruin the lives of thousands of our constituents. The increase in borrowing powers that we are discussing is not to keep the industry going, to help the industry keep a share of an admittedly declining world market or to sustain the livelihoods of the people in those communities which rely upon the industry. It is to help the Government make a measured retreat from their commitments to the shipbuilding industry and its communities. In short, it is not to prop up the industry, but to close it down.
  The Euro-frauds that we have been discussing give the game away. The preamble to the document says:
  "Whereas, the recovery in demand envisaged in the Fifth Directive has not taken place,"
  I do not think Britain even put up a fight. All hon. Members could list orders that were obtainable for our shipbuilding industry but which were not obtained

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  because our Government would not fight for them. I should like to quote an example from the yard in my constituency, Swan Hunter. I have a letter from the Minister's predecessor. I shall not read it all, but it concludes:
  "I can see no prospect of Intervention Fund being made available either to Swan Hunter or to any other UK yard."
  That is in the context of the Santa Rosa vessel. The letter goes on:
  "I will certainly ensure that my officials watch very carefully to see where the order is placed. If another Community country is involved I will ensure that the terms of any government assistance are examined very carefully to see that it is playing by the rules."
  It will please redundant shipyard workers on Tyneside and Wearside to know that, if somebody else has cheated and has gone against the rules to get a ship that we might otherwise have been able to build, our Government will rap that country's European knuckles for not playing cricket "like what we are".
  It is not just the Santa Rosa, because the nuclear fuel vessel which was wholly under Government control, because the Government were the majority shareholder among those who placed the order, is being built in Japan. What do our Government say about that? They say, "We think there might have been foul play, and we will sue them in the courts." That is not much good to the people who could have been building that ship in Britain.
  In case any hon. Member thinks that these are isolated instances, we had the scandal of the Trinity House vessel. Again, that vessel was wholly in the Government's gift and they had the say about where the order would be placed, but it was not placed in a British yard because it was cheaper to place the order abroad. That is not a commitment to British industry and British shipyards. That is not a recognition of world trading conditions and the need to intervene to protect domestic industry. It is a surrender to the practices of other nations, practices that we are not prepared to go along with. The Government would rather see the industry go down and not be a drain on the public purse than sustain it as an essential part of our industrial infrastructure.
  Mr. Jonathan Sayeed: Can the hon. Gentleman say how the Trinity House vessel was totally in the Government's gift? I am quite mystified by that statement.
  Mr. Brown: The hon. Gentleman should find out who is paying for it because he who pays the piper normally calls the tune. That is why it was in the Government's gift. The Government are indirectly paying for it. I think that is an ample and sufficient answer. All that is left of British Shipbuilders on Tyneside is the headquarters building in my constituency. The last bit of British Shipbuilders to go was Kincaid. I share the engine works with my hon. Friend the Member for Wallsend (Mr. Garrett). The convenor, Mr. Sam Lee, who is my constituent, had written to me to voice his fears and concerns, which are shared by the work force, about recent developments. He put some questions to me which I should like to put to the Minister. He asked:
  "Why did BS prefer the bidder chosen rather than the management team who also bid? Management appeared to have the interests of the works at heart and would have attempted to re-employ a large number of ex-workers, the management proposals being to keep the works intact and to try and build up business.
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  The preferred bidders appear to offer no direct jobs other than the small number already employed. The only other prospect appears to be an attempt to let off parts of the factory to interested parties.
  On the facts given up till the present it is inconceivable that British Shipbuilders have preferred this bid rather than the one from management, especially in view of the government's alleged preference for managements in Nationalised Industries to be given the chance to run their own business. The only thing that the preferred bidder offered was more money. Some questions arise:

  1. How much was the final bid?

  2. What are the details of the proposals in the bid?

  3. On what basis was the sale agreed? i.e. was there anything which could be construed as unfair practice, such as a guarantee by BS to buy back certain parts of the Plant such as Machine Tools?"

  The questions that my constituent asks reflect the genuine concerns of the work force, and especially the former work force, at Kincaid and show recognition of the fact that the Government are rapidly abandoning any commitment to an independent marine engineering industry in the country. Perhaps most of all, those questions reflect bitterness, and a willingness to doubt the Government's integrity in these matters, which is prevalent in all shipbuilding communities.
  Dr. Norman A. Godman: Clark-Kincaid is to be found in my constituency. It is a first-class marine engine builder which is desperately short of orders. Worries such as have been expressed to my hon. Friend have been expressed to me by members of the work force at Clark-Kincaid—the last marine engine builder on the Clyde.
  Mr. Brown: The last engine builder in the country. My hon. Friend the Member for Sunderland, North could tell of the retreat from Sunderland to consolidate on Tyneside, and then the closure on Tyneside to consolidate in Scotland. The history of the industrial sector has been one of contraction, consolidation, reassurances to the work force, further redundancies and closures. I hope that the industry survives, as do all Labour Members, but without commitment and support from the Government, it will not. The precedents are pretty ominous.
  The blow to the community on Tyneside has been bitter, and the Government offer no hope. Few people on Tyneside doubt that the Government intend to collapse the shipbuilding industry further. With the privatisation of the warship building yards, curtailment of the naval programme and these proposals, the industry face an impossible future.
  Not all yards are to be treated the same. Mainland Britain's merchant yards are to be starved of funds and the warship yards are to be starved of work, but the Northern Ireland Office is to be free to underwrite Harland and Wolff's costs with vast subventions that are provided by the British taxpayer. If Harland and Wolff had been on mainland Britain, it would have been closed by now, but because it is in Northern Ireland it will not be.
  The latest report of the Committee of Public Accounts, "Assistance to British Shipbuilders", contains an interesting passage on page 7 paragraph 9. It says:
  "The NAO found that on 16 contracts with a combined turnover of £209 million, losses of £89 million had been incurred after support of £40 million. DTI accountants had reviewed the original estimates and had expressed reservations in some cases, particularly as to the reasonableness of productivity assumptions. The Department did not consider that they had sufficient expertise to challenge the estimates in

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  depth but reviewed the completed orders and found that the losses were mainly due to overruns on labour costs and associated overheads."
  That explanation does not sit well with the intention of keeping Harland and Wolff on a tight financial rein on the AOR contract, which was stolen from Swan Hunter in one of the most unfair and deceitful bits of Government chicanery that it has been my misfortune to witness. A cynic might say that the Public Accounts Committee backs up Swan Hunter's fears that the only effective monitoring of the contract will be after the event, when all the costs are in and judgment can be made whether the productivity assumptions were valid. That fits in with what has happened in merchant shipbuilding. After the event the Government have been able to say, "Gosh, we were wrong. Oh dear, some of you chaps have lost your jobs." They have shed crocodile tears and brought forward futher statutory instruments which we debate late at night. The Opposition voice their grievances and the Government say, "It is a difficult time internationally, but we are trying to stabilise the situation and there is some hope on the horizon." We have had that year after year, but the industry has contracted and contracted and is probably below the viability level in some areas. The number of employees is very small. Many of us who take an interest in these matters fear that the order is designed to put the final boot in, rather than to help to sustain and help the fightback of a vital national interest.
  On the subject of vital national interests, merchant ships taken up from trade to supplement the Royal Navy's role are an important part of our requirements, yet our capacity to build the ships, to sail them under the British flag and to crew them with British seamen has been fatally undermined by the Government.
  I hope that I have adequately reflected our latest list of grievances and that they will be added to all our previous lists of grievances, but I am certain that there is one feeling that I have not conveyed. Given that I am in employment and have a job that I enjoy, I do not think that I could ever properly convey the bitterness and sense of grievance in the community that I represent and in all the shipbuilding communities in the north of England.
  12.17 am
  Mr. Gordon Brown: If the Minister thought in the previous debate that we were ungenerous in our support of his efforts in Europe, I assure him that we support the order and will not divide the House.
  While we did not anticipate the financial problems that arose from the ITM deal, we predicted in the last borrowing powers debate that Ministers would have to come back to the House at an early stage. We pointed out that the policy of privatising the warship yards, which depended on the more profitable public sector orders, was bound to increase pressure on British Shipbuilders, and that is exactly what happened.
  These debates have traditionally been opportunities for wide-ranging discussions on a number of issues. My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) put a number of points to the Minister. I hope that the hon. Gentleman will be able to answer some tonight, and he may wish to write to my hon. Friend on other matters.
  I wish to ask a number of questions about expenditure that has been, and is being, authorised. I hope that the Minister will not fall into the trap, into which other
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  Ministers and Government spokesmen have fallen, of suggesting that the Government have supported the merchant shipbuilding industry to the tune of £1·4 billion. I hope that the Minister will agree that much of the money that has gone into BS has been spent on capital expenditure in the warship yards which are now in private hands, on losses sustained by companies which have been moved into the private sector, on redundancy costs, which, as my hon. Friend the Member for Newcastle upon Tyne, East pointed out, are funds which are being used, not to increase employment in the industry, but to secure a reduction in employment, and on substantial restructuring costs paid out for businesses of BS which are no longer in existence. Therefore, I hope that the Minister will answer this evening, or will write to me, about the genuine level of the Government's commitment to the merchant shipbuilding industry.
  Is it not the case that new investment in the merchant shipbuilding yards during the Government's period of office has totalled £69 million, that the losses sustained by the merchant shipbuilding yards have been about £500 million since 1977, and that if we take on top of that the intervention fund support of about £235 million, we find that the maximum provided by the Government is probably less than half the sum that is covered in the order?
  I hope that the Minister will accept those figures. If he does not, I hope that he will at least agree to write to me. It is important that the people know the level of support and are not deluded by a figure produced by Ministers, as happened to me in a television interview last weekend, when the Minister responsible for Scottish industry insisted that £1…4 billion had been spent on the merchant yards.
  I also hope that the Minister will take on board the concerns expressed by my hon. Friend, which reflect the views of all my colleagues, about the continuing loss of jobs in the shipbuilding communities, the demoralisation resulting from that process and the sense that much of what is happening is avoidable and can be averted by the Government pursuing proper policies.
  The shipbuilding industry in the merchant yards is at the point of collapse, and urgent measures are necessary. I hope that the Minister can answer our questions, not only on the St. Helena and Chinese orders, but on the Cuban orders, which the industry is seeking, and that he can give some indication of public sector orders which his and others Departments could advance to the merchant shipbuilding yards.
  Dr. Godman: May I give another example of public sector orders which could be advanced? Recently, I suggested to both the Prime Minister and the Minister that if the Government seriously intended to police effectively the Falkland Islands fisheries protection zone they would have to acknowledge that the aging stone trawlers that are being sent to the south Atlantic would prove inadequate, despite the excellence of their crews. What is needed are three custom-built fisheries protection vessels. Naturally, I asked that if such an order was placed, or was even envisaged, it should be placed in my constituency, at Ferguson-Ailsa.
  Mr. Brown: I am grateful to my hon. Friend for pointing out an area where public sector orders should be considered and may be advanced. He makes the case for

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  what we have suggested to the Government over several months, which is that a task force with the powers to scour the various Departments, including the Ministry of Agriculture, Fisheries and Food and the Ministry of Defence, should be appointed by the Department of Trade and Industry. That would be one way of averting the crisis in the industry.
  The Transport Select Committee is now looking at the future of the merchant shipping industry, and again there are means by which orders can be secured from British shipowners as well as from abroad, which could help to secure the future of the industry.
  At the end of this debate, and having heard the previous debate, the Minister should be aware of the concern felt by Opposition Members and, I believe, by hon. Members on both sides of the House, about the state of the merchant shipbuilding industry. He should be aware that the past chairman of British Shipbuilders, Mr. Graham Day, said that there was a real danger that the industry could go the same way as the motor cycle industry and that merchant shipbuilding was fighting a bare knuckle battle for survival. He should also be aware that the previous chairman of British Shipbuilders, Sir Robert Atkinson, said that the industry was being brought to the point of destruction. Perhaps he has also noticed that the retiring directors of Smiths of Middlesborough has said that in his view British Shipbuilders is already too small to survive.
  I hope that the Minister will take on board what has been said in this debate and what has been said by some of the employees of British Shipbuilders. We have had the possibility of a new European directive and we will have a new intervention. Tonight we have a new borrowing limit. What the shipbuilding industry needs is new orders, and I hope that the Minister will make it his business to get them for the industry before it is too late.
  12.26 am
  Mr. Giles Shaw: I shall first comment on the admirable speech by the hon. Member for Newcastle upon Tyne, East (Mr. Brown), who took a wide-ranging review and gripped his opportunity with both hands. I thought that he was just a little bit sceptical about the activities of British Shipbuilders in seeking to promote the sale and construction of merchant ships. That is its task and it has no other.
  I will not quote £1·4 billion to the hon. Member for Dunfermline, East (Mr. Brown), but I am prepared to quote £1·575 billion. It has gone up since he spoke about it last. That is the figure that British Shipbuilders has had out of public funds since 1979. It breaks down in many ways, as the hon. Gentleman knows. There is £1·2 billion of public dividend capital there, £191 million of redundancy pay and £186 million in the home credit scheme. All those things are part of the total expenditure of British Shipbuilders. I shall certainly write to the hon. Gentleman to set out the record in relation to how the money is spent and how it goes into the yards and so on. The fact remains that British Shipbuilders is the oganisation which seeks to obtain and place orders within British yards. That was the crucial point to which the hon. Gentleman referred.
  In relation to the question posed to the hon. Member for Dunfermline, East rather than to me by the hon. Member for Greenock and Port Glasgow (Dr. Godman),
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  I take note of his view that the fisheries protection zone in the Falkland Islands may require to be protected by vessels built in the United Kingdom. I guarantee that I shall endeavour to find an answer on that point.
  The hon. Member for Newcastle upon Tyne, East also raised the question of Clark Kincaid. British Shipbuilders made a careful assessment of the employment and commercial aspects of the bids before it made its decision. It made its decision in favour of the bid to which the hon. Gentleman drew the attention of the House. It gave my right hon. Friend the Secretary of State the opportunity to comment on the assessment but he was not responsible for the assessment it had made. He concurred with British Shipbuilders judgment. The bid has been assessed and agreed by British Shipbuilders in relation to the commercial aspects and the assessment of employment opportunities.
  Let me make it clear that, although this is my first debate on shipbuilding, I do understand the extremely severe consequences of the major restructuring that has gone on in past years. In many cases yards in the north and in Scotland have borne the brunt of the consequences. I fully understand the trauma that that brings to communities in that part of the world. The fact remains that British Shipbuilders, should the House approve the borrowing powers extension, will continue to do everything in its power to achieve more orders for the yards in the United Kingdom. Certainly, as I said in the previous debate, a number of orders have been won. In relation to public service orders, I mentioned the vessel for Tuvalu. I expect an announcement on the award of that contract shortly. As the hon. Member for Greenock and Port Glasgow would know, the Caledonian MacBrayne order was one that my right hon. and learned Friend the Secretary of State for Scotland brought forward for Ferguson-Ailsa. A fisheries protection vessel has also been brought forward.
  I have to inform the House that the order for Cuba has changed in quantity and in specification. Virtually an entirely new bid would have to be made if British Shipbuilders was to seek to compete for it. That is certainly no longer in the forefront of its mind.
  Everything possible is being done in relation to the China order Delegations have been to China two or three times and a Chinese delegation has been to Britain.
  Mr. Bob Clay: Before the hon. Gentleman leaves the Cuban order, he should elaborate on it. The people left in the merchant shipbuilding industry in Sunderland have been anxious to learn about the order. They and many journalists have asked questions about it. This is the first time that anyone has been told that, apparently, the requirements have changed. As I understand it, the Minister just said that if British Shipbuilders was still interested it would have to submit a different tender. Will there be a different tender? Is British Shipbuilders still interested?
  Not that long ago, the Secretary of State for Trade and Industry and the chairman of British Shipbuilders told deputations from Sunderland and other parts of the north-east that that order was the great hope for the salvation of those yards. From the sound of it, if the Danish order had not come out of the blue, the comments that were being made in the summer that the British Government were not doing enough and the illusions that were being spread would have proved to be accurate. The Minister

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  owes the House, and especially shipbuilding workers on Wearside and those who have been made redundant at Smith's dock, a much better explanation of what is happening with the Cuban order than the one that we have just heard.
  Mr. Shaw: The hon. Gentleman should be somewhat gratified that a statement was made about the order at all. Negotiations on these matters are for British Shipbuilders and its potential purchasers and customers. I was asked about the orders for Cuba. It will be some months before they take new shape, because a completely different specification is required. I assure the hon. Gentleman that British Shipbuilders will still he extremely keen to try to obtain the orders, but it is not on the same time scale now as it may have been some months ago.
  I assure the House that maximum effort is being applied in relation to the China order. There have been British delegations to China and Chinese delegations to this country. British Shipbuilders will certainly do everything possible to follow up the prospects discussed in the debate.
  Mr. Gordon Brown: On the Cuban order, will the hon. Gentleman explain what he means by saying that the specifications have changed? Is it anything to do with the financial packages that could be put on offer? Will he explain at what point British Shipbuilders and the Government became aware that the Cuban order and its specifications had changed?
  Mr. Shaw: No, I shall not give the hon. Gentleman any further detail on those matters. That is information which he can obtain from British Shipbuilders in due course, as it will no doubt be able to discuss the matter with him.
  We are asking the House to agree to vote an additional £100 million in the borrowing order to enable British Shipbuilders to continue not only to run the enterprises for which it is responsible but to seek to obtain new orders for British yards for the year ahead.
  Resolved,
  That the draft British Shipbuilders Borrowing Powers (Increase of Limit) Order 1986, which was laid before this House on 21st November, be approved.

STATUTORY INSTRUMENTS, &c.

  RESTRICTIVE TRADE PRACTICES
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.)
  That the draft Restrictive Trade Practices (Services) (Amendment) Order 1986, which was laid before this House on 18th November, be approved.—[Mr. Lightbown.]
  Question agreed to.

  REPRESENTATION OF THE PEOPLE
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.)
  That the draft European Assembly Elections (Northern Ireland) Regulations 1986, which were laid before this House on 19th November, be approved.—[Mr. Lightbown.]
  Question agreed to.

  Human Organs (Transplants)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.]
  12.33 am
  Mr. Michael McNair-Wilson: I think that everyone is aware of the incredible strides that have been made in recent years by medical science with the transplantation of human organs. Today, heart, lungs, kidneys, livers and corneas are regularly taken from donor bodies and used as replacement organs for defective ones in living people. As the science develops, so the success rate improves, in terms of successful transplants and in the length of time that the transplant continues to function effectively. I should like to stress those last words, because I think that many people imagine that a transplant is a once-and-for-all operation whereas, in fact, it is usually for a limited time, depending on the effectiveness of the means used to prevent rejection. Leaving aside cornea grafting, of all the transplants that are carried out kidney transplants far outnumber the rest and show the highest success rate. Currently in this country nearly 6,000 people are enjoying the benefits of transplanted kidneys. That puts the United Kingdom at the top of the transplant league in western Europe and makes up for some of our shortcomings in dialysis.
  I would like to outline some suggestions for making the transplant programme still more effective. However, before I do that, I must comment upon some of the reports that appeared in a Sunday newspaper and in some national daily newspapers to the effect that organs are being taken from brain dead people when those people cannot be described as dead. In effect, it is claimed that their lives are being shortened by the removal of their organs. I do not know how such an allegation can be sustained against the criteria for brain death agreed by the medical profession five or six years ago, and re-examined earlier this year by the General Medical Council, not just on the basis of potential transplant donors, but designed to cover the time when a medical team can switch off a ventilator or some other life support equipment.
  If Dr. Evans who made the allegations has some new evidence, we must ask whether he has made that available to the General Medical Council. He must know that his allegations are bound to create doubts in the minds of those who will be asked to allow the organs of a brain dead relation to be taken for transplantation, to the detriment of the whole transplant programme. It behoves Dr. Evans and the General Medical Council to clarify the position as a matter of utmost urgency. If, as I am led to believe, his allegations will not be sustained, the question arises: how can more organs be made available from brain dead donors than is currently the case to meet the real demand?
  At one time I think that we all believed that the kidney donor card was the right approach. It was a small, easily carried card that stated the wishes of its owners about the use of his or her kidneys in the event of death. Although the idea and implementation appeared simple, the fact is that it has had a negligible impact on the provision of organs. There is no one reason for that. In a letter to me in March, Mr. Michael Bewick, the consultant renal surgeon at Dulwich hospital said:
  "Over the last 5–6 years, 20 per cent. of the population have carried donor cards, yet surveys show that 75–80 per cent. wish their organs to be used. Thus, the donor card scheme has outlived its usefulness. The reason why the card

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  scheme has not been more effective is because it relies on the hospital authorities finding the card either on admission or soon after. As these patients are so desperately ill, the responsibility of the medical and nursing staff is to get the patient better, not to find out what should happen if they die. Thus, no effort is made to look for the donor card and the patient's belongings have been returned to the next of kin and they by now have left the hospital."
  Mr. Bewick's comments were supported in a letter written by the chief medical officer at the Department of Health and Social Security, Sir Donald Acheson, to a member of the renal transplant unit at the Charing Cross hospital in May 1985. Sir Donald wrote:
  "It is now just over a year since the Government launched its campaign to promote the organ donor card scheme, and the number of kidney transplant operations performed in the UK, according to the UKTS provisional figures, has risen to 1,415, for the year March 1984 to February 1985, an encouraging increase of 30 per cent over the previous 12 month period.
  However, more needs to be done to improve the availability of donor organs yet further. The evidence suggests that about three quarters of the population are willing for their organs to be used for transplantation, and that about 4,000 people die each year in circumstances where organ donation is possible. This implies that about 6,000 donor kidneys should become available annually, which is more than enough to meet estimated needs. It would seem, however, that one of the constraints on increasing the actual supply is the reluctance of some doctors in, for example, intensive therapy units and neurology departments, to initiate organ donation procedures."
  I shall enlarge on the last words of that passage later.
  One of the problems faced by those involved in obtaining organs is gaining the consent of next of kin to remove them. The kidney donor card should have overcome that problem because the Human Tissue Act 1961 makes it clear that no second consent is required. However, as Professor Peter Morris, the distinguished renal transplant surgeon in Oxford told me,
  "Most of us feel that there must be permission from the relatives if the relatives are available."
  I recognise the humanity of that statement, but I wonder whether the emotionalism of the moment may discourage some hospitals from asking relatives for the right to transplant. If so, what can be done to encourage the supply of organs? At this time there are about 26 transplant units in the United Kingdom, about 3,500 people requiring kidneys and an unspecified number needing hearts, lungs, livers and corneas. In terms of kidneys, the present demand could be satisfied by 2,000 donors, as each donor provides two kidneys and only one is transplanted into a patient. Two successful transplants not only give a renewed normality to the recipients but free two dialysis machines for two more kidney sufferers. Thus one donor assists four people.
  As I have said, the kidney donor card does not appear to be the best way of obtaining the additional organs, although I admit that it does keep the subject of transplants alive. Where parents carry them, I think that they are making a statement about themselves and their families' willingness to become donors.
  More publicity could be given to the whole subject. I suggest that transplanting be written into more television drama—such as East Enders or serials relating to hospitals, which would acclimatise people to the idea that transplants are a natural part of modern living.
  When all that has been said, however, the fact remains that there is a shortfall in the number of donors needed.
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  It is estimated that 4,000 donors could become available every year—people of between 20 and 65 years of age with absolutely healthy organs which would more than satisfy the current demand, but we are not obtaining that supply.
  In the October-November edition of "Economic Affairs", an article by Mr. Marvin Brams of the university of Delaware suggests that one way to obtain that supply would be to allow people to sell organs. I must say that I do not like the idea. The gift of an organ is an act of altruism. As one who may benefit from a transplant at some future date, I would like to believe that the organ I received was given by someone who wished to give it, not that it had been bought.
  The financial argument does have some validity in a different context. When a donor's organs are to be removed, an operating theatre has to be made available, as well as ancillary services, at the hospital where the operation is to be carried out. Currently hospitals providing both the donor and the facilities benefit not at all from the trouble to which they have gone to make the donor's presence known to the local transplant unit. It does not seem unreasonable to me to suggest that the hospitals might be much more willing to help if they were to receive some remuneration for the facilities that they provide.
  In simple financial terms, every kidney patient on dialysis costs the Health Service £10,000 a year, while a transplant operation costs about £7,000. If it is successful, the patient costs the Health Service virtually nothing while the transplant works. Clearly, the financial saving to the Health Service of a successfully transplanted kidney is quite enormous.
  If financial remuneration of the kind that I have outlined seems difficult to introduce, I believe that we should consider legislation, or perhaps a ruling from the General Medical Council, to produce the necessary effect and make hospitals more forthcoming about potential donors. Such an approach can be encapsulated in the phrase, "required request". It would place a statutory responsibility on every hospital where there is a potential donor—that is, someone suffering from brain death—to request the relatives' permission to remove the organs and when permission is forthcoming to inform the nearest transplant unit that a donor exists. The beauty of required request is that the hospital would be obliged to ask for the organs and would not have to apologise for doing so.
  Whether we choose required request or whether we consider financial remuneration, both suggestions seem worthy of careful consideration. Neither forces a potential donor's relatives to do anything against their principles or beliefs and each seems to offer the possibility of a better supply of organs for those whose lives can be restored to normality only through a transplant. I commend both suggestions to my hon. Friend the Minister and look forward to her comments.
  12.45 am
  The Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I congratulate my hon. Friend the Member for Newbury (Mr. McNair-Wilson) on his success in the Speaker's ballot and on raising once again this important subject on which I have heard him speak in the House before. I acknowledge his personal interest in the subject as a dialysis patient, although I know that he is not currently awaiting an organ transplant. He

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  is continuing his important campaign with the distinction, courtesy and detail that he has shown previously and thus, I am sure, helping many people.
  I assure my hon. Friend of the Government's commitment to the transplant programmes and we share his objective in seeking to increase the supply of donor organs. Perhaps I could just challenge him slightly on one or two points. As he probably knows, the survival rates of grafted kidneys have improved dramatically in recent times. The cadaver kidney will be alive and kicking in 62 per cent. of patients after one year compared with a best rate, achieved with a sibling live donor, of 81 per cent. That is a 10-year average. The current rate for anyone receiving a cadaver kidney this year is likely to be much better, as the rates are improving all the time and offer real and genuine hope to patients. In other words, the transplant programme is no longer experimental but is a standard procedure and a genuine life saver for those concerned.
  I agree with my hon. Friend that the factor limiting the expansion of the programme is the supply of suitable kidneys. The supply of cadaver kidneys has been expanding steadily, from 842 in 1979 to 1,334 last year. For the first 10 months of this year the figure was already 1,363—more than in the whole of last year—suggesting that we are on course for a record total of more than 1,600 and a 22 per cent. improvement on last year. That is hardly a negligible improvement. My hon. Friend will also realise that many of the thousands of kidneys that may become available might not be suitable in the particular circumstances. There is therefore a limit, although I believe that the figures in the chief medical officer's letter are important and should be more widely known.
  More kidney transplants are carried out in this country than in any other Europan country. The figures that I have given compare with about 300 in the Netherlands, 140 in Finland and less than 300 in Belgium. Our closest rivals are West Germany, with about 1,200, and France with about 1,100, so we are well ahead in terms of numbers, although in terms of rate per million population some of the Scandinavian countries are a little ahead. Those figures include live and cadaver donor transplants, so they are slightly higher than the figures that I gave earlier.
  We have also seen a welcome increase in multi-organ donation, which has enabled the supply of donor hearts and livers to keep pace with the expansion of the heart and liver transplant proggramme. Here we have some real success stories to tell, especially—I do not wish to make a party political point—under this Government. In 1979 there were only three heart transplants, last year there were 169. In 1979 there were 12 liver transplants, last year there were 88. The figures for this year show that more than 200 heart transplants and more than 100 liver transplants will be carried out. The shortage of donor organs is a serious problem only in paediatric cases, where very close matching is needed. Perhaps I may add the least glamorous of all transplantations—that of corneas. In 1983 there were only 33, in 1985 there were 530. So far this year there have been nearly 600, which gives us an annual rate of nearly 800. The fact that the sight of 800 people has been saved is an amazing statistic, and I congratulate all the staff concerned.
  As my hon. Friend said, the waiting list for a kidney transplant is currently more than 3,000. It is estimated that once the list has been cleared about 2,500 donor kidneys will be needed each year, so we are talking about
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  thousands of people and their families. It is not a minority interest, in any sense. As the heart and liver transplant programmes convince us of their success and are expanded, a shortage of those organs could become more of a problem than it is at present.
  What have we done? My hon. Friend referred to one or two items. In 1984 the Government launched a major campaign to increase public awareness of the benefits of organ transplantation and to promote the donor card scheme. The results were very encouraging and public opinion polls taken at the time showed that more than 70 per cent. of the population had switched to become in favour of organ donation. That was a major achievement. The campaign coincided with the publicity being given on the "That's Life" programme to the story of Ben Hardwick and his liver transplant. I acknowledge the importance of media coverage in this area, and pay special tribute to the very positive contribution made by Esther Rantzen and all the team involved in "That's Life".
  Since 1984 we have encouraged and supported many local initiatives, and I thank all the companies, groups and individuals who put much effort into encouraging people to carry the card. We have taken several initiatives centrally, for example, through the Confederation of British Industry and the Institute of Directors. Some examples of the national initiatives being taken to promote the donor card include Esso agreeing to distribute cards at filling stations. Barclaycard agreeing to send out cards with its bills, the clearing banks and major building societies agreeing to dispense cards and the National Union of Students agreeing to include a card in the welcome package for each student. I have written to the Post Office about getting a set of commemorative stamps, which might serve to remind millions of people using the Post Office of the importance of this service.
  I strongly agree with my hon. Friend about the dangers of the sale of organs. I do not think that that is on, either now or later, in the United Kingdom. I listened carefully to and took note of his point about financial encouragement to the hospitals. The fact that, as his figures showed, the cost to the hospital drops dramatically as soon as the patient has a successful transplant should in itself be an encouragement. We take into account the points that he made when deciding on funding for kidney units and, increasingly, on the other units, which are currently supra-regional for livers and hearts.
  My hon. Friend mentioned the required request legislation that was recently introduced in several American states. He may know that in March this year my predecessor, my hon. Friend the Member for Wycombe (Mr. Whitney), visited New York—one of the first states to introduce such a law—and found that the arrangements were working well. The Department's chief medical officer wrote to the medical profession's representative bodies about required requests earlier this year, and the replies were very encouraging. I am pleased to say that the Royal College of Physicians is setting up a working party to examine how the medical profession can contribute to increasing the supply of donor organs. It will be meeting in January, and we look forward to hearing its recommendations and conclusions. I hope that it will look carefully at required requests and will consider whether they can make a useful contribution and, if so, whether the better results could come from a voluntary code of practice or from a change in the law.

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  We have seen the establishment of computerised registers in Glasgow and Manchester, and this year Lifeline Wales was launched, which aims to cover the entire Welsh population. The idea of some of these schemes is that the names of all those who are willing to be organ donors should be recorded on a computer and that all intensive care units should have access to it, so that whenever a potential organ donor dies, doctors can ascertain whether his or her name is on the register. I am sure my hon. Friend will recognise that such a system is expensive to initiate and maintain. We are being kept informed of how the Welsh scheme is progressing, which is more comprehensive than the others. If the increase in donations is significant, we would consider extending the scheme to cover the whole of England. We would need to be sure, however, that there was a genuine improvement in the number of donor kidneys coming forward, or we would be spending money and not improving the service.
  We have taken some initiatives with the Health Service professions. The Government are supporting a study which is now in the pilot stage and which aims to improve our understanding of the numbers of those who die in circumstances which make them suitable as organ donors and of the reasons why a number of potential donations are missed. Refusal of consent by bereaved relatives is only one possible reason among many and this is an issue which the royal college is considering for us and on which it will be advising us.
  I turn to the important and serious issues which my hon. Friend raised about the articles which appeared in yesterday's newspapers and in today's, which seemed to cast doubt on the concept of brain death. I have discussed these articles and the issues which they have been raising with the Department's medical advisers and with Professor Sir Raymond Hoffenberg, president of the Royal College of Physicians, and chairman of the conference of the medical royal colleges and their faculties, whom I know from many years during my time at Birmingham. Sir Raymond has long been associated with the Queen Elizabeth hospital, Birmingham.
  I am able to confirm yet again that the conference of medical royal colleges remains completely satisfied with the concept of brain death and with the criteria for establishing it. My hon. Friend may know that the criteria are set out in the code of practice on the removal of cadaveric organs for transplantation drawn up by a working party chaired by Lord Smith of Marlow and circulated to all hospital doctors in 1980. This code of practice requires that tests to establish death are carried out by two doctors, not one, who are both independent of
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  the transplant team—they have nothing to do with that team. Tests are carried out on two separate occasions even if the first results appear to be conclusive. The tests include checking for pupil reaction to light, for corneal reflex and eye movement, for motor responses in the cranial nerve distribution in response to stimulation of the face and limbs, for gag reflex and cough reflex, and for respiratory movement.
  The idea of including EEG testing, as Dr. Evans has suggested in the past, and again yesterday, as requirement has been considered on several occasions and rejected as superfluous and on occasion unreliable. Apparently the machine will "jump" if someone walks past the bed. It would seem that it might produce the wrong results entirely. There is nothing to stop doctors from carrying out EEG tests, however, in addition to all the other tests if they so choose.
  Professor Hoffenberg told me this evening that no case of recovery by a patient in whom brain death had been established, using these criteria, has ever been recorded.
  I shall put that another way. There is no evidence that anyone showing brain scan death, according to the criteria, has ever survived. That is the position throughout the world. Dr. Evans was challenged to produce some evidence of his case five years ago and he has failed totally to do so.
  Perhaps I may add—I am sure that my hon. Friend will agree—that we deplore the emotional and unfounded remarks that are reported in yesterday's press, medical and otherwise, of those who have been attacking the transplant programme. They have been challenged repeatedly to produce evidence and they have failed repeatedly to do so. If they wish, they are entitled to challenge transplantation, especially of hearts, on other grounds, such as ethical grounds or religious objections. They are entitled to raise difficult questions, especially when the work first starts and so many failures occur. They are entitled also to challenge us, if they wish, on the allocation of resources. I can quite understand a cardiologist disapproving of a transplant programme in his own hospital which is costly and which may drain funds from his own work. That is quite legitimate, but we do not accept the remarks of someone who is flying in the face of the overwhelming body of medical opinion, which has considered his representations over and over again, including several times this year. I am therefore satisfied that what we are doing is not evil or reprehensible—indeed, far from it. This is good work that saves lives, and it is worth pursuing. I am grateful to my hon. Friend for giving me this opportunity to say so.
  Question put and agreed to.
  Adjourned accordingly at one minute to One o'clock.

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  Community Paediatricians
  Community Paediatricians
  Psychiatric Services
  Psychiatric Services
  Cervical Cytology
  Cervical Cytology
  Trunk Roads
  Trunk Roads
  Local Authority Housing
  Local Authority Housing
  Beef
  Beef
  Labour Statistics
  Labour Statistics
  Valuation Panels
  Valuation Panels
  Paediatric Cardiac
  Paediatric Cardiac
  Paediatric Cardiologists
  Paediatric Cardiologists
  Private Health Care
  Private Health Care
  Acute, Chronic and Geriatric Beds
  Acute, Chronic and Geriatric Beds
  Welsh Language
  Welsh Language
  Homelessness
  Homelessness
  M1 (Repairs)
  M1 (Repairs)
  Bristol Channel (Rescue Facilities)
  Bristol Channel (Rescue Facilities)
TRANSPORT
  M1 (Accident)
  M1 (Accident)
  M1 (Contra-flow Systems)
  M1 (Contra-flow Systems)
  Vehicles (Owner Identification)
  Vehicles (Owner Identification)
  Racal-Decca Navigator (Financing)
  Racal-Decca Navigator (Financing)
  Thames Crossing
  Thames Crossing
  Channel Tunnel
  Channel Tunnel
  Level Crossing Barriers
  Level Crossing Barriers
  Buses
  Buses
  London Regional Transport
  London Regional Transport
  Road Studies
  Road Studies
  London Underground
  London Underground
  Transport Policies, London
  Transport Policies, London
  Public Transport, London
  Public Transport, London
  London Coach Terminals
  London Coach Terminals
  Shipping (Lights and Navigational Aids)
  Shipping (Lights and Navigational Aids)
  A19 (Crash Barriers)
  A19 (Crash Barriers)
  Drink-driving
  Drink-driving
EDUCATION AND SCIENCE
  School Closures
  School Closures
  Leeds LEA
  Leeds LEA
  GCSE
  GCSE
  Student Grants
  Student Grants
  Western Infirmary
  Western Infirmary
  Medical Research Council
  Medical Research Council
  AIDS
  AIDS
  Teachers (Pay)
  Teachers (Pay)
  Higher Education
  Higher Education
  School Meals
  School Meals
  Assisted Places Scheme
  Assisted Places Scheme
NORTHERN IRELAND
  Hospital Beds
  Hospital Beds
  Weapons (EEC Directive)
  Weapons (EEC Directive)
SOCIAL SERVICES
  Residential Care
  Residential Care
  Statutory Sick Pay
  Statutory Sick Pay
  Industrial Death Benefit
  Industrial Death Benefit
  Member's Correspondence
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  Inner Cities
  Inner Cities
  Health Education Council
  Health Education Council
  Agency Nurses
  Agency Nurses
  Hospital Closures
  Hospital Closures
  Health Authorities (Resources)
  Health Authorities (Resources)
  Severe Weather Payments
  Severe Weather Payments
  Cervical Cancer
  Cervical Cancer
  Derriford Hospital, Plymouth
  Derriford Hospital, Plymouth
  Local Office Staff, Hornchurch
  Local Office Staff, Hornchurch
  Hospital Beds
  Hospital Beds
  Health Authorities (Expenditure)
  Health Authorities (Expenditure)
  NHS (Waiting Lists)
  NHS (Waiting Lists)
  Invalid Care Allowance
  Invalid Care Allowance
  Tobacco Advertising
  Tobacco Advertising
  Family Practitioner Committee Administrators
  Family Practitioner Committee Administrators
  Hepatitis B
  Hepatitis B
  NHS (Speech Therapists)
  NHS (Speech Therapists)
  Hospital and Community Health Services
  Hospital and Community Health Services
  Drugs (Transfer Pricing)
  Drugs (Transfer Pricing)
  Consultants (Waiting Times)
  Consultants (Waiting Times)
  AIDS
  AIDS
  Low-income Families
  Low-income Families
  Wessex RHA (Computer Contract)
  Wessex RHA (Computer Contract)
  Sickle Cell Anaemia
  Sickle Cell Anaemia
  Junior Hospital Staff
  Junior Hospital Staff
HOME DEPARTMENT
  Coaches
  Coaches
  Breath Tests
  Breath Tests
  Leicestershire Constabulary
  Leicestershire Constabulary
  Police (Public Houses)
  Police (Public Houses)
  Fire Brigades (Recruitment)
  Fire Brigades (Recruitment)
  London Fire Brigade
  London Fire Brigade
  Fire Stations (Closure)
  Fire Stations (Closure)
  Wheel Clamping
  Wheel Clamping
  Unclaimed Vehicles
  Unclaimed Vehicles
  News International Plant, Wapping
  News International Plant, Wapping
  999 Calls
  999 Calls
  Burglar Alarms
  Burglar Alarms
  Metropolitan Police (Accounting Methods)
  Metropolitan Police (Accounting Methods)
  Criminals (Exchange Controls)
  Criminals (Exchange Controls)
  Weapons (Sale)
  Weapons (Sale)
  Football Grounds (Police Deployment)
  Football Grounds (Police Deployment)
  Offenders (Maintenance Costs)
  Offenders (Maintenance Costs)
  Prison Sentences
  Prison Sentences
  Motorists (Prosecutions)
  Motorists (Prosecutions)
  London (Barrier Flood Plan)
  London (Barrier Flood Plan)
  London (Emergency Procedures)
  London (Emergency Procedures)
  Prisoners (AIDS)
  Prisoners (AIDS)
  Football Grounds (Alcohol)
  Football Grounds (Alcohol)
  Greiss Test
  Greiss Test
  Cigarette Sales (Prosecutions)
  Cigarette Sales (Prosecutions)
CIVIL SERVICE
  "Public Bodies 1986"
  "Public Bodies 1986"
THE ARTS
  National Portrait Gallery
  National Portrait Gallery
  News International
  News International
NATIONAL FINANCE
  Taxation
  Taxation
  Public Spending
  Public Spending
  Value Added Tax
  Value Added Tax
  Money Transactions
  Money Transactions
  Bank of England Notes
  Bank of England Notes
  Johnson Matthey Bankers
  Johnson Matthey Bankers
  Personal Debt
  Personal Debt
  Friendly Societies
  Friendly Societies
  Mortgage Tax Relief
  Mortgage Tax Relief
  Investment Depreciation
  Investment Depreciation
DEFENCE
  Crown Proceedings Act 1947
  Crown Proceedings Act 1947
  Radar Systems
  Radar Systems
  Procurement Contracts
  Procurement Contracts
  Nuclear Weapons
  Nuclear Weapons
  Mounted Service Personnel (Headgear)
  Mounted Service Personnel (Headgear)
  Russian Submarine (Radiation Leaks)
  Russian Submarine (Radiation Leaks)
  Tucano Aircraft
  Tucano Aircraft
  Belize
  Belize

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR CM the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.

Tachographs: Non-Passenger Buses
Lord Aylestone: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why a recent directive requires old passenger buses preserved as mobile museum exhibits, occasionally used for display at village fetes and rallies and no longer carrying passengers, to have modern tachographs fitted in the cabs.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, there is no requirement to fit a tachograph on a vehicle which never carries passengers. We have put to the European Commission proposals designed to remove the doubts arising from the requirement to fit tachographs on vehicles normally used for carrying passengers in so far as they may apply to historic passenger vehicles.
Lord Aylestone: My Lords, I am grateful to the Minister for that reply and to the Government for their obvious interest. Can the Minister say whether there is likely to be a derogation of the directive, which does require a tachograph on vehicles which are not 25 years old?
Lord Brabazon of Tara: My Lords, we have proposed that in the United Kingdom vehicles first manufactured before 1st January 1947 should not have to carry tachographs. We are also seeking to extend this to all vehicles that become 25 years old if they do not carry more than nine people and are not used commercially. We are preparing a statutory instrument which will be put to Brussels for approval.
Lord Aylestone: My Lords, may I ask the noble Lord once again whether he has any idea of the date when this derogation of the directive will take place?
Lord Brabazon of Tara: My Lords, I cannot give an answer as to the date, but we hope that it will not be too far away.

Disarmament and Security: Consultations
2.39 p.m.
Lord Kennet: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether there is any progress in putting into effect the "closer co-
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ordination of views between the Federal Republic of Germany, France and the United Kingdom on the pending questions of disarmament and security" which Chancellor Helmut Kohl referred to in the Bundestag on 6th November.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, the United Kingdom welcomes continuing close consultation with European allies on security and arms control matters which contributes to strengthening the alliance. Bilateral and multilateral meetings are frequent.
Lord Kennet: My Lords, the House will thank the Minister for that very general statement. However, has she nothing more to say about the quite concrete announcement made two or three weeks ago by Chancellor Kohl in the Bundestag to the effect that Germany would be seeking an increased German-French-British contact on these matters? Have they done so and is that to come about? Subsidiary to that, will the Government agree that the present inevitable disarray in Washington is a reason for more collaboration between the European NATO countries rather than less?
Baroness Young: My Lords, of course major European states consult closely and it is sensible that they should do so. For example, WEU member countries recently agreed procedures to increase consultation on security and disarmament issues in order to strengthen the European contribution to the alliance. There is no question of a formalised inner group.
On the other point which the noble Lord raised, Europeans are committed to maintaining the solidarity of the Atlantic alliance. Exchanging views on matters of direct concern to Europe improves discussion within the alliance and strengthens the transatlantic bond.
Lord Cledwyn of Penrhos: My Lords, we welcome what the noble Baroness says about frequent meetings. Will she not agree that there is a general feeling in Europe that instead of formulating policy we appear to be reacting to events? Is there not a case for a more formalised arrangement in which NATO and Western European countries meet regularly to discuss these matters in the form, perhaps, of some kind of standing committee? It would create confidence if we felt there was a more formalised discussion of policy rather than the haphazard meetings which presently take place.
Baroness Young: My Lords, I note the point made by the noble Lord, Lord Cledwyn. I do not believe that I can add to the supplementary answer which I gave to the noble Lord, Lord Kennet. We do consult European states regularly and closely. As I indicated, the WEU recently agreed procedures to increase consultation on security and disarmament issues, which strengthens the European contribution to the alliance.
Lord Cledwyn of Penrhos: My Lords, can the Minister say how these meetings are arranged? There is no great security or intelligence point involved.

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What prompts such meetings to be held? Why are they not held on a certain day at a certain time every month? Is there not a strong argument for that since it would make the people of this country feel safer if they thought that policy was being so formulated? We all realise that if a crisis takes place, meetings are called very quickly indeed as a reaction to the crisis. Would not meetings to decide permanent policy tend to create greater stability?
Baroness Young: My Lords, I note the point that the noble Lord makes. There is a difference between regular consultations between all the European partners of the NATO alliance and a triumvirate of three countries, which I believe lies behind the Question of the noble Lord, Lord Kennet. In answering the Question, I sought to deal with the specific point that he raised. However, I can assure the noble Lord, Lord Cledwyn, that there is regular and frequent consultation between the European partners of the alliance, as I indicated earlier.
Lord Nugent of Guildford: My Lords, perhaps I may ask my noble friend the Minister, as regards what influence European powers have upon the scene, whether or not the recent intervention by our own Prime Minister in meeting the President of the United States following the Reykjavik meeting did not undoubtedly restore the balance in retaining a sufficiency of nuclear weapons in order to keep the necessary balance against the Iron Curtain powers over and above the conventional weapons. Was that not entirely due to the Prime Minister's intervention, and is not a voice from Europe very effective indeed?
Baroness Young: My Lords, I am grateful to my noble friend for that point. My right honourable friend the Prime Minister and President Reagan agreed at Camp David on the way forward in arms control, identified as priorities an INF agreement, 50 per cent. strategic cuts and a ban on chemical weapons, and confirmed that the alliance strategy would continue to require effective nuclear deterrence. Reductions in nuclear weapons will increase the importance of eliminating disparities in conventional forces. Our main European allies have since told us of their full support for the outcome of the discussion between my right honourable friend the Prime Minister and President Reagan.
Lord Cledwyn of Penrhos: My Lords, I apologise for intervening again. Is it not the case that it was the lack of a clear, formulated European policy on this issue that led the Prime Minister to do the precise thing that I have been criticising and go to the United States after Reykjavik?
Baroness Young: No, my Lords, I cannot accept that interpretation of the events. As I have indicated to my noble friend, it was very valuable that my right honourable friend the Prime Minister had this opportunity to discuss with President Reagan the way forward on arms control; one of a number of meetings that she has held.
Baroness Seear: My Lords, does the noble Baroness agree that the alliance would be greatly strengthened by a stronger European pillar but that such a European pillar for defence needs to be preceded by a well organised European foreign policy? Does she also agree that this enthusiasm for the European contribution coming from the Labour Front Bench, though somewhat unexpected, is very much to be welcomed?
Baroness Young: My Lords, again, I think I have answered the point that the noble Baroness raises. The Europeans are committed to maintaining the solidarity of the Atlantic alliance. There are regular exchanges of views between the European members, as there are between the European members and the United States. We believe that these exchanges improve discussion in the alliance and strengthen the transatlantic bond.
Lord Beloff: My Lords, can my noble friend the Minister say whether the Government would wish to comment in this connection on the recent speech by Prime Minister Chirac before the Western European Assembly?
Baroness Young: My Lords, we share many of the concerns that have been expressed by Monsieur Chirac. We welcome his support for the text which my right honourable friend the Prime Minister agreed last month with President Reagan at Camp David, and we concur wholeheartedly in his emphasis on the importance of nuclear deterrence and the role of the British and French nuclear forces. We welcome in particular his assertion that,
"deterrence in Europe requires a strategic linkage between the two sides of the Atlantic. This in turn requires the presence of American conventional and nuclear forces on our continent".
Lord Beswick: My Lords, when the Prime Minister made her statement after meeting the President of the United States and expressed complete confidence in the integrity of President Reagan, was she aware at that point that American arms were being sold to the terrorist government in Iran and that the profits from those sales were going to aid the terrorists who were fighting against Nicaragua?
Baroness Young: My Lords, I can hardly blame the noble Lord for trailing his coat in that way but he would agree that his question is quite wide of the Question on the Order Paper.
Lord Morris: My Lords, arising out of questions asked by the noble Lord the Leader of Her Majesty's Opposition in this House, would my noble friend agree that it is absolutely right and proper that any government should respond properly to events and not try to influence them—
Noble Lords: Oh!
Lord Morris:—as events invariably control governments rather than the other way round?
Baroness Young: My Lords, I really do not think that I can accept that statement from my noble friend, particularly in view of the answers that I have given. We would all agree that my right honourable friend the Prime Minister and my right honourable and learned friend the Foreign Secretary in discussions—in the case of my right honourable friend the Prime Minister, with President Reagan; and in the case of my right honourable and learned friend, in many fora around the world—have effectively put both British and European policy and have had the effect of influencing the outcome of the discussions which have taken place.
Lord Chalfont: My Lords, does the Minister agree that it might be wise to remember that in matters of disarmament and security the interests of the three countries mentioned in the Question are not always identical? Can she give an assurance that even when we are co-ordinating our views with those other two countries, we will bear our own special interests—disarmament and security—inside the Western alliance very much in mind?
Baroness Young: Yes, my Lords, I take the point of the noble Lord, Lord Chalfont. One of the considerations is our own security and the importance of our own independent nuclear deterrent.
Lord Kennet: My Lords, given that the fact remains that Chancellor Kohl told his Parliament that he would be seeking improved, extended (or whatever it was) contacts with Britain and France on disarmament and on military matters, can the Government state whether any approach has been received from Germany in this sense? If so, what answer has been made to it? If not, is it the Government's opinion that Chancellor Kohl was simply speaking empty words for the fun of it to his own Parliament?
Baroness Young: My Lords, in my answer to the noble Lord's first supplementary question, I made it clear that there was no question of any formalised inner group.

Far East Air Routes: Overfly of USSR
2.50 p.m.
The Earl of Kinnoull:: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress is being made towards enabling British civil airliners to overfly Russian territory on the new routes to the Far East.
Lord Brabazon of Tara:: My Lords, our existing arrangements with the Soviet Union provide for them to consider sympathetically requests from British Airways, British Caledonian Airways and Cathay Pacific Airways to overfly Soviet territory while operating services routed over north India between London and/or points in central Europe on the one hand, and Delhi and/or Bangkok and/or Hong Kong on the other hand. We are now seeking arrangements
982
under which British Airways and British Caledonian Airways may be able to overfly USSR territory on their proposed non-stop London-Tokyo services on the Siberian route.
The Earl of Kinnoull: My Lords, while thanking my noble friend for that helpful and encouraging reply, may I ask whether he will say how the negotiations with Japan are progressing? What is the likely timetable for the London direct flight to Tokyo to come into force? Finally, how many hours will be saved on the present route via Anchorage?
Lord Brabazon of Tara: My Lords, as regards the Japanese, further negotiations will be necessary fairly soon, so they have not been drawn to a conclusion. However, provided they are soon brought to a satisfactory conclusion, my right honourable friend the Secretary of State for Transport hopes that the arrangements will be made sufficiently soon to enable British Airways and British Caledonian each to commence non-stop London to Tokyo services on 1st April 1987, as they planned. If the service comes into effect it will reduce the travelling time by up to six hours compared with the London-Anchorage-Tokyo route.
Lord Underhill: My Lords, are we to understand from the Minister's reply that no approaches have yet been made to the Soviet authorities? If not, is it proposed to do this before the new routes commence?
Lord Brabazon of Tara: Yes, my Lords, we have approached the Soviet authorities. It is not possible to be precise on the matter since agreement requires the consent of two parties, and I can only speak for one of them. I hope we shall reach mutually acceptable arrangements with the USSR within the next few weeks.

Wheelclamps: Possible Wider Use
2.52 p.m.
Lord Campbell of Croy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider introducing legislation to authorise the police to clamp motor vehicles exhibiting a tax licence disc that is more than four weeks out of date, or none.
Lord Brabazon of Tara: My Lords, the possible wider use of wheelclamps is currently being examined by the committee chaired by Dr. Peter North which is reviewing road traffic law. The Government will consider the findings and recommendations of that committee in due course.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that helpful reply. Is he aware that the present procedure is slow, that the fines are derisory and that it is difficult to make the worst offenders pay the fines? Does not my noble friend agree that many of these vehicles are overdue for the

983
MoT test and are not insured? In short, they are a menace to everyone using the roads.
Lord Brabazon of Tara: My Lords, I certainly agree with the latter remarks of my noble friend. Regarding the level of fines, the courts have a responsibility to consider the circumstances of each case and, when passing sentence, the means of the offender. However, we agree that the present average of £47 for using or keeping an unlicensed vehicle on the road is inadequate as a punishment and a deterrent. Those views have been made plain on a number of occasions to the Magistrates' Association and the other court representative bodies. In addition to a fine, a convicted offender is required to pay any back duty found to be owing. However, we are currently considering whether further measures are needed to strengthen the penalties against evasion.
Lord Somers: My Lords, does not the noble Lord agree that the absence of an up-to-date licence may not be the fault of the owner of the car? With postal and other delays, such as occur with office work, it is quite possible that the owner may be entirely innocent. Therefore, is it not a little hard that the owner should be victimised in this way?
Lord Brabazon of Tara: My Lords, I am sure that the point made by the noble Lord, Lord Somers, is one of the aspects that Dr. North will be examining in committee. As I said, at the moment it is not the case that a car which is unlicensed would be clamped just for that reason.
The Earl of Halsbury: My Lords, is not clamping an over-heavy handed approach to these problems? It is a penalty against which, by its very nature, there can be no appeal. I have in mind a person who, the day before he ought to take out a licence, is suddenly removed to hospital with appendicitis and arrives home a fortnight later to find his vehicle clamped, without having received any notification that it has taken place. Will the noble Lord think very carefully as to whether clamping may not be too heavy handed a way of dealing with this particular complaint?
Lord Brabazon of Tara: My Lords, my right honourable friend will certainly take the noble Earl's views into account when we receive the report of the committee chaired by Dr. North. We have, of course, not yet received it.
Lord Campbell of Croy: My Lords, is my noble friend aware that it is for the kind of reason spoken of in the last two supplementary questions that I inserted the reference to "four weeks" in my original Question? That time can be extended if necessary. However, in the cardinal interests of safety, will the Government endeavour to adopt a realistic deterrent, because at present there is none?
Lord Brabazon of Tara: My Lords, I would not say that there is no deterrent for people driving cars which are unlicensed. Over the past few years we have put a great deal of effort into improving enforcement in this regard. For example, last year revenue from enforce
984
ment exceeded £21 million, which is double the figure for 1982. This year an additional 75 posts have been deployed on enforcement. A record number of intensive campaigns have been arranged with the police, and new technology is being introduced further to improve efficiency and speed up action on enforcement; so this is certainly a matter which we take extremely seriously.
Lord Mishcon: My Lords, will the noble Lord be good enough to ask his right honourable friend to consider also the point of view that where the public is in danger and safety is at stake it is right to have a penalty, possibly like clamping, for obstruction, and so on? However, if the Government start using methods of that kind for collecting revenue, where do we stop?
Lord Brabazon of Tara: My Lords, I can only say that I will draw my right honourable friend's attention to the noble Lord's comments. As I have said, a review is currently taking place, but we have not yet received the recommendations in a report.
Lord Underhill: My Lords, there is widespread concern on this matter. Can the Minister give the House some indication as to when the committee is to report? Are we likely to have legislation in this Session? If not, is this not one important item which ought to be dealt with independently?
Lord Brabazon of Tara: My Lords, the North Committee has just issued the consultation document soliciting views and, after considering these the committee hopes to report in the spring of 1987.

Business
2.57 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is being made in another place on the European Council meeting in London on 5th and 6th December.

County of Cleveland Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Reverter of Sites Bill [H.L.]
2.58 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I rise to move that this Bill be now read a second time. It is the last in the series of four law reform Bills which I have now brought before the House prior to the Recess.
The Bill remedies problems arising under various nineteenth century statutes allowing individuals to donate land for charitable purposes on the basis that, if the land ever ceased to be used for the stated purpose, it would revert to the donor or his successors.

985
The technical name for this is "reverter". Hence the short title of the Bill. The problems arise when, once reverter occurs, the donor or his successors cannot be found or identified. I am happy to say that, according to the information available to me, the Bill enjoys general support from the legal profession and the Churches.
The statute that has most frequently given rise to problems is the School Sites Act 1841. Before the provision of universal compulsory education (dating from the Elementary Education Act 1870) schools were endowed mainly from private sources, sometimes with assistance from public funds. Many parts of the country had been miserably provided with schools. Organisations such as the National Society for Promoting the Education of the Poor in the Principles of the Established Church throughout England and Wales (now generally known by its short title the "National Society") encouraged and assisted in the provision of sites for schools for the poor throughout the country. My own grandfather and the grandfather of my noble friend the present Lord Kinnaird and that great friend of the friendless in the nineteenth century the seventh Earl of Shaftesbury all co-operated in the ragged school movements. There were legal obstacles of a largely technical nature to be overcome. Accordingly, the National Society pressed for the legislation which resulted in the School Sites Act 1841. The Act established a procedure whereby landowners could convey sites to be used for schools, with the conveyance containing a proviso that, if the land ever ceased to be used for that purpose, it should automatically revert to the original landowner or his estate.
After the School Sites Act 1841 came other statutes with broadly similar provisions for reverter. These statutes included not only other School Sites Acts but also Acts dealing with the provision of sites for libraries and museums (the Literary and Scientific Institutions Act 1854) supported, I believe, by my ill used and much maligned predecessor Lord Brougham, and the provision of sites for churches and chapels (the Places of Worship Sites Act 1873). As the reverter provisions contained in those statutes were modelled on the 1841 Act, the difficulties created by those provisions are common to conveyances of land made under all these Acts.
Reverter provisions of this class create difficulties only if the school or other building erected on the site ceases to be used for the particular purpose for which the site was granted. But over the last 50 years a number of factors have contributed to the closure of many such schools and churches. In particular, the Education Act 1944 resulted in the closure (or transfer to new sites) of many voluntary schools. Once the school or other building ceases to be used for its particular purpose, according to the statutes the land ought to revert automatically to the owner or his successors in title. But in that case two problems arise. The first and principal problem is that, since many of these grants were made a long time ago, it has become either difficult or impossible to identify the owner or his successors in title. The second difficulty (which arises from the first) is that, after reverter, if they remain in possession, the grantees or their successors no longer have any powers to dispose of the land.
986
Thus, they cannot sell it and they cannot use it to raise money to pay bills. In such cases the building inevitably deteriorates and may be left derelict or in a dangerous condition.
In 1977 representations were made to the Law Commission and others to the effect that the reverter provisions in question were giving rise to insoluble practical difficulties. A working party was therefore established under the Law Commission to examine the problem. In 1981 the working party reported and later that year the Law Commission published the report under the title Rights of Reverter (Law Commission Report No. 111). That report contained a number of detailed recommendations to deal with the problem of the untraceable owner. The principal recommendation was that within three years owners should register their claims to ownership of the land, and, if they did not do so, their rights would be extinguished. However, this solution was felt by some to be unduly draconian and almost to amount to expropriation, and the report was accordingly not adopted.
Accordingly, the Bill proposes to face the problems by another route. When land ceases to be used for its original purpose, the trustees holding the land are to be given the right to manage it and keep it in repair. If the beneficial owner cannot in fact be identified, the Bill enables the land to be sold and the proceeds of sale to be put into a charitable trust.
By Clause 1, once the land ceases to be used for its original purpose, grantees will be given the status of trustees for sale. As such they will have power to manage the land and sell it with a good title. They then hold the land or, as the case may be, the proceeds of sale on trust for the true owner, that is, the reversioner. The status of trustee for sale is conferred even where reverter occurred before the legislation takes effect, so that trustees can deal in the future with land that has reverted in the past. But to prevent true retrospectivity—if that is a proper word—provision is made to protect the existing rights of the reversioner. Provision is also made to prevent the revival of rights that have already become statute barred.
The question then arises as to what is to be done if there are no legitimate beneficial claimants. In that case Clauses 2, 3 and 4 provide for the Charity Commissioners to establish charitable schemes, so that the property held by the trustees as trustees for sale under Clause 1 may be put into charitable trusts. The charitable purposes allowed will be as similar in character as the Charity Commissioners think practicable to the original purpose for which the land was held. However, before applying to the Charity Commissioners for a charitable scheme, unless the reverter occurred more than 12 years ago (when of course it is already statute barred), the trustees must take steps to trace the true owner if they can. These steps include advertising in two national newspapers and a local newspaper, and posting a notice on the relevant land. If, after three months, the owner has still not claimed the land, the Charity Commissioners may then establish their scheme. Once this has been established, the rights of the owner will be extinguished. Nevertheless, his rights of property are still protected. He becomes entitled to compensation if he lodges a claim within the next five years. The

987
charitable schemes are to be publicised, and there is provision for appeals against them. After the expiry of five years the rights of the reversioner to compensation are extinguished or lapse.
Under Section 2 of the Education Act 1973, the Secretary of State has powers to make educational schemes. These powers may at present be exercised in cases where reverter under the School Sites Act 1841 has not yet occurred. Clause 5 of the Bill extends these powers to include cases where a reverter has already occurred. Provision is made to ensure that the powers are not exercised to extinguish rights of ownership without the Secretary of State first being satisfied that all reasonably practicable steps have been taken to trace any persons lawfully entitled.
Clause 6 contains provisions clarifying the existing law. In particular, these provisions resolve obscurities relating to powers of sale conferred by Section 14 of the School Sites Act 1841.
Clause 7 is interpretation. It specifies the nineteenth century statutes to which the Bill relates. Clause 8 deals with consequential amendments, repeals and savings. In particular, it clarifies a power of the Secretary of State under the Education Act 1946.
This Bill represents a useful and, I hope and believe, uncontroversial measure of law reform which has attracted the support of the legal profession and the Church authorities. I accordingly ask this House to give it a Second Reading. I beg to move.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
3.10 p.m.
Lord Elwyn-Jones: My Lords, despite the transport difficulties which the noble and learned Lord has to confront, being in charge of the Bill and presiding from the Woolsack—a task with which I am not unfamiliar—we are most grateful for his account of this important Bill. I venture to congratulate the noble and learned Lord on introducing the fourth of a series of law reform measures. We must also pay tribute to the Law Commission, and in this particular case to the working party to which I shall refer in a moment.
As the noble and learned Lord has so clearly explained, the need for the Bill arises from various nineteenth century Acts of Parliament containing provisions under which ownership of land granted for schools, churches and other charitable purposes reverts to the owner of the land when the land ceases to be used for those purposes.
As long ago as 1977, representations were made to the Law Commission by the Churches Main committee and other bodies—sit may be that the right reverend Prelate will have a little to say about this—to the effect that these reverter provisions contain defects and anomalies giving rise to serious practical problems. In particular, the difficulty of identifying those entitled under the reverter provision was resulting in the sterilisation of valuable areas of land.
The working party set up in 1978—I cannot claim any personal responsibility for it—was obviously a good thing. It was chaired by Mr. O'Brien of the Law Commission and included representatives of various
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bodies with a direct interest—Church Commissioners, the Baptist Union, the Church of Wales, and, of course, the Charity Commissioners.
The working party report is a fascinating picture of this country's social and educational history. It is an appalling reflection that for centuries most of our children could neither read nor write. Our culture was communicated by the spoken word. Thank goodness! How marvellous it was in the language of Shakespeare. Everyone could understand, but they could neither write nor read. One thinks of the loss to this country when generations were denied the opportunity of education. But it was, I suppose, a common feature in most of the civilised world at the time.
However, there came the Elementary Education Act 1870 from which incidentally my own father benefited. He was able to go to school until the age of 14 which was a great achievement. He made up for that fact by becoming superintendent of the Tabernacle Sunday School for 60 years thereafter. I am sorry that the Leader of the Opposition is not here, because Wales was fortunate to have the energy and commitment of the chapels and their schools under the leadership of the Reverend Griffith Jones of Llanddowror and, by origin, I am happy to say, of the Reverend Thomas Charles, of Jesus College, Oxford. I do not know why I am particularly happy but he derived his roots from there.
Wales had the benefit of Sunday Schools which, in those days, were regularly attended by most children, including, a little later, myself. It was, if I may make a public confession, rather an ordeal. We had Sunday service in the morning where it was one's duty to recite a part of the Bible, Sunday school in the afternoon, and chapel at night. There was often a rehearsal of "Messiah" in the chapel—performed each year. It was a cultural background from which we were lucky to profit and benefit.
England, too, has had its commitment from the churches. I have no doubt that the right reverend Prelate will say something about the work that was done by such bodies as the National Society for promoting the education of the poor in the principles of the established Church throughout England and Wales. It is interesting to note how the matter was put in those days. I have no doubt that it served a useful purpose in its time.
As the noble and learned Lord the Lord Chancellor has indicated, the passage of time has increased the difficulty and costs of interpreting and carrying into effect the reverter provisions contained in those nineteenth century Acts. The problem arises only if and when the building, erected on the affected site, ceases to be a school, chapel or whatever the particular institution may be. I assume that the provision in regard to churches and chapels also applies to land provided for libraries and museums. I see an affirmative nod denoting that that is so.
It is not only the community of churches and chapels that is affected, but a wider range of public concern and importance. As the noble and learned Lord has said, since the 1914–18 war, a number of factors (some beneficial) such as the Education Act 1944, in particular, have led to the closure, or the transfer to new sites, of voluntary schools, creating the

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problem that we now face. What has been saddening to see is the extent of the closure of churches and chapels in many places throughout the country. In our villages chapels of considerable architectural merit and worth are now garages or places of that kind. However, attempts have been made by various bodies to maintain the buildings of the churches and chapels of cultural value.
It may be of interest to learn from the noble and learned Lord—although the statistic may not be available—how many sites are likely to be affected by what is proposed. It may be difficult to give an estimate, but it probably runs to many hundreds. Therefore, the Bill is an important one to place upon the statute book.
No Bill has been subject to so much consultation. If one looks at the Law Commission report it would seem that a vast number of government departments, local authorities, ecclesiastical authorities, legal societies and individuals have been consulted. Therefore, it is perhaps no wonder that it took three years for the working party to produce its excellent report and send it to the Lord Chancellor's office in 1981. A further five years of gestation have produced this Bill. There is no doubt that the Bill has had to deal with all the complexities and contingencies that may arise. However, here it is at last.
Clearly, much of the responsibility for carrying out what is intended in the Bill will fall upon the Charity Commissioners. We are indeed fortunate that they exist and are capable of coping with the problems that are likely to arise. There are provisions for appeal to the High Court against any order made by the Charity Commissioners establishing a scheme extinguishing the rights of beneficiaries under trusts. No doubt that is a desirable provision.
I notice from the date of commencement provision that the Act is to come into force,
"on such day as the Lord Chancellor may by order made by statutory instrument appoint".
I wonder whether the noble and learned Lord can give us some hint of or guess at—it probably cannot be much more—the state of preparedness of that statutory instrument. Time has passed. We have waited for these provisions for years, and until the Act comes into force we must continue to wait.
Incidentally, I note that the Bill applies only to England and Wales. I wonder whether there is any provision for Scotland; or is Scotland free of the blight or benefit of the reverters—I do not know how to put it? Perhaps wearing his Great Britain-wide hat the noble and learned Lord will give us some guidance. I am sorry; I see the noble and learned Lord the Lord Advocate. He can no doubt answer my question if the opportunity arises.
This is obviously a good Bill. We and those we have consulted have in mind nothing specific by way of amendment that we presently want to propose, but clearly the Bill will have to be considered with care. We welcome it strongly.
3.22 p.m.
The Lord Bishop of London:: My Lords, I too am happy to welcome the Bill on behalf of those who sit on these Benches. The noble and learned Lord the
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Lord Chancellor will not be surprised to hear me say that, because I have been writing to him at intervals over the past few years urging that the Bill should come before your Lordships. I am glad that we are now considering it. I should like to say how grateful I am to him for his generous and, as usual, lucid exposition of the Bill.
I am sorry that the Bill had not been passed in 1955 when I first became a diocesan director of education, and in 1958 when I became general secretary of the National Society. It would have saved me a great deal of time and effort, but I suspect that it would also have meant that many in the legal profession would have lost considerable fees. It is good to have the Bill now and I am glad to welcome it, I am grateful to the noble and learned Lords the Lord Chancellor and Lord Elwyn-Jones for the generous manner in which they have recognised the pioneering way taken by the Church in education in this country. That is often forgotten these days.
From time to time people say some rather harsh things about the clergy. When I was general secretary of the National Society, I made it my business to look back in the records to see the accounts of many of those early schools founded under the Schools Sites Act 1841. They showed the costs of the schools which were mostly taken up by the costs of the teachers' stipends. When I looked at how that was met, I saw that a good contribution was made by the local landowner and there were certain local subscriptions. Again and again at the bottom I saw:
"Balance found by the vicar".
We underestimate the extent to which the early days of our education system were not only encouraged and pioneered by the clergy but were supported by them, often at considerable cost to themselves.
One of the great joys of being general secretary of the National Society—I say this in the light of what the noble and learned Lord, Lord Elwyn-Jones, said—is that the National Society, unlike the official bodies of the Church of England, extends into Wales. It was then that I began to make regular excursions into the Principality. I remember that on my first visit people were concerned to impress on me how they had been in the van of education long before we in England had ever begun to think about it. I remember being told that a school down at Llantwit Major was the oldest Church school anywhere in these islands. Their claims became more and more extravagant. Finally, I had to tell them that if they made it out as starting any earlier it would be a Church school founded in the days that we call "before BC". I appreciate the part played by Wales in our education system.
Lord Cledwyn of Penrhos: My Lords, it may be of interest that it is a historical fact that Saint David was educated at the school in Llantwit Major, known in Welsh of course as Llanilltyd Fawr. The school has good grounds for being called the oldest school in Britain.
The Lord Bishop of London: My Lords, I am most obliged to the noble Lord for what he has said. As one who has been Bishop of Cornwall, I do not need much encouragement to think highly of the part played by our Celtic forebears in our Christian civilisation.

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As the noble and learned Lord the Lord Chancellor made clear, we have never sought to remove the rights of reversioners. Our concern has always been for those schools where the reversioner cannot be found. It may be that the noble and learned Lord has other information, but I have been told that there are as many as 1,500 schools with reverters on the whole or part of the site. Those are the figures with which we shall have to deal. In only a few of those cases can the reversioner be traced. Such reversioners as can be traced are usually Members of this House or their descendants. There is usually not much difficulty in tracing them. They are not the problem. The problem occurs when the estate has been broken up, and so forth, and with the great number of benefactors in Victorian times who purchased a piece of land and gave it to the Church under the Acts mentioned in the Bill, and whose descendants cannot now be found. The Bill is directed towards remedying that problem and it is much to be welcomed.
We are concerned that the Bill should be as workable as possible to remedy the difficulties which we face under earlier legislation. I hope it will not be taken as in any way minimising my strong welcome for the Bill if I mention one or two points to which I hope attention can be given. The first is that we are a little worried about the five-year period which, in terms of the financing of the transferred schools, may present some problems. I hope that some thought will be given to whether that five-year period before the proceeds can be made available to the Church or the local authority, for example, with controlled schools can be looked at again. We hope that the procedure for sale, which greatly improves that under Section 44 of the Schools Sites Act, covers the point. We have some reservations about that.
There is one other point on which I should like to ask for some assurance. As the noble and learned Lord the Lord Chancellor has made clear, in the case of schools where the reversioner cannot be found, the Bill enables the Secretary of State to act so that the estate can be available for church schools. That is discretionary. We should like some assurance that it will be the Secretary of State who will do that, as we believe it is proper for him to do so and not for it to be left to the Charity Commission. That is not guaranteed under the Bill as it stands. It may be that it will be possible to provide that, if it is an education charity, it is the Secretary of State who would normally act under the Bill.
With those modest reservations—and I note that they are being looked at by those concerned—I should like to express a welcome to the Bill on behalf of those of us on these Benches and, indeed, I know that the Bill is warmly welcomed by the Churches Main Committee, on which all denominations are represented and of which I am chairman. It is also very much welcomed by the Church of England Board of Education and by the National Society. I very much hope that it will have your Lordships' warm agreement as it goes through the House.
3.30 p.m.
Lord Denning: My Lords, I should like to welcome the Bill on behalf of my native town of Whitchurch in
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Hampshire and on behalf of the school to which I went 80 years ago. That school is built of the materials of 1845, mainly of flint laced with brick, and there, in bold figures on the top, is the year 1845. From 1845 for the next 120 years it was used for the education of children of Whitchurch, including me and my brothers. But then, in about 1966, the education authority built a fine big school half a mile away on the other side of the town and the children no longer went to our old school.
What was to be done with it? The answer is that no one knew to whom it belonged. No one could say what was to be done with it. If we look at the 1841 Act, it says, as regards the owner who granted that land for use as a church school, that, if it ceased to be used as a church school, it would revert to him and his successors. But no one could find him; no one knew anything about him. To whom was it to revert? What was to be done with it? No one knew.
What happened in our little town was that someone applied to Hampshire County Council or to the local education authority. The place was used temporarily as an ambulance station, and after that as a creche, because no one knows who is the owner of it, who is to deal with it or who has the control of it. That is the problem facing the Law Commission and the 1,500 to 2,000 other places like us—what is to be done. I am glad that the Law Commission proposal of a Commons Register has gone because that would take much too long.
There is only one query on the Bill. Clause 1 says that is to have effect as if it was to be vested in the persons in whom it was vested immediately before 1966. The Bill does not tell us who are the persons in whom it was vested immediately before the censer of use. I hope that that will be cleared up in Committee or at some stage because I should like to know—we should all like to know—in whom this land is vested now. The rest of the Bill is simple. There are to be trustees, if you please. What then is to be done with it? The Charity Commissioners are to fund a scheme. That is a very good thing. But what is it to be for? Is it for education any more, as originally granted? Hardly that, because the education authority deals with all those purposes.
In a later provision in the Bill it is stated that the commissioners, in determining the character of the purposes, to use it for those purposes as far as they can,
"may give greater weight to the persons or locality benefited by the purposes than to the nature of the benefit".
They do not go to the nature of education so much in aiming at a scheme—that has gone by the board. They have to go to the persons or locality; that is, to the people and to the church in our locality. That is what the scheme is to be, a charity, so to speak, for us. What a good thing, because this site, which has been left unoccupied and unused for 20 years, is now of great possible development value. I hope that when the scheme is arranged by the Charity Commissioners they will give due weight to the benefit of our people and our children in the future.
I greatly welcome the Bill for clearing up all these ambiguities, but with this one reservation: please make it clear who are to be the trustees.
3.37 p. m
The Lord Chancellor: My Lords, I am very grateful to the right reverend Prelate and to all noble Lords who have taken part in the debate. I am also grateful for the general welcome which I think I can claim the Bill has now received. I noted what the noble and learned Lord, Lord Elwyn-Jones, said, and what the right reverend Prelate said, about Wales. I love the English, but I have hardly a drop of English blood in my veins, and only one great grandmother out of all my great-grandparents could claim to be English. My loyalties and culture are English, but I have always thought the English rather funny. I have thought that one reason that they are rather funny is that, despite what was said by the noble and learned Lord on the Cross Benches, in the main the English think that brains are wicked and that the stupid are good. This I regard as an amusing heresy which I do not altogether share.
The noble and learned Lord, Lord Elwyn-Jones, asked me how many sites are affected. The right reverend Prelate gave some figures, but the working party established that a total number of about 5,000 sites, of which 2,000 or more are school sites, the others being churches, libraries and so on, may be affected.
One of the many difficulties of giving figures is, first, that we do not know in many cases where these places have been closed whether it is really true that the owners cannot be found; and, in a number of cases, if reverter has taken place more than 12 years ago, the true owners, even if found, would find themselves to their misfortune statute-barred before the Bill becomes law. Therefore, it is difficult to be accurate. I hope that if I turn out to be inaccurate I shall be excused any charge of deceiving the House.
The noble and learned Lord asked also about commencement. We hope that the Bill will come into force about six months after Royal Assent. This is because under the Bill I shall need time to make rules about appeals to the High Court before it can be effective.
The position about Scotland—one noble and learned Lord spoke on this, for which I am grateful—is set out at paragraph 119 of the Law Commission Report, to which reference has been made. In Part V under the heading "Concluding Remarks"—like mine—the commission said:
"We feel that we ought to mention that the contents of this report may be of some (but perhaps only passing) interest in Scotland and Northern Ireland. While the Places of Worship Sites Act 1873 operates only in England and Wales, the School Sites Act 1841 extended to Scotland and the Literary and Scientific Institutions Act 1854 to Ireland (but not, it appears, to Scotland). Nevertheless, we doubt whether there is any real need to extend the legislative repairs recommended in this report beyond England and Wales. In the first place the problems deriving from the Law of Property Act 1925 (which have become urgent because of the conflict between Re Ingleton Charity and Re Clayton's Deed Poll) are naturally confined to England and Wales. Secondly, we gather that the School Sites Act was very little resorted to in Scotland and potential problems in relation to cases left behind by the repeal of the Act there may be too few to warrant legislative attention at this stage. The same may well be thought to apply to the Literary and Scientific Institutions Act so far as Northern Ireland is concerned".
That dealt with the excellent speech of the noble and learned Lord.
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The right reverend Prelate quite rightly took pride in the part which the Churches, and particularly my own and his denomination, have played in the work of education in the early years before the state took it on. It is worth saying that it was the Church, not only in the field of education but in all the so-called corporate works of charity, that initiated these matters. For instance, when Florence Nightingale wanted to re-discover the art of nursing, where did she go? She went to a group of Roman Catholic nuns who had kept the art alive, and developed it. The same is true about relief of the poor. It was the Churches, and the medieval Church in particular, which thought of these matters long before the welfare state was a blush on Lord Beveridge's cheek. This country is still a Christian country, it is important to emphasise that. It is still a Christian country because much of the heritage which we derived from the Christian religion is now enacted in the law of the land.
The right reverend Prelate went on to ask me two questions. I do not think his point about the five-year period is necessarily well conceived. The five-year period is the period beyond which the reversioner's claim ultimately expires, but it has no relevance at all to the trustees obtaining access to the funds. They are, as trustees for sale, in possession of them as from the date of sale. The right reverend Prelate also suggested that there is need for the Bill to contain further provisions to enable the Secretary of State to return school sites to the educational system. In particular he thought that the Charity Commissioners simply have a discretion to do so. In fact it is true, as he rightly has seen from his perusal of the Bill, that the Charity Commissioners have a discretion. However, the Secretary of State has adequate powers under Clause 5 and Clause 8(1) of the Bill. I think that is the answer.
I was very grateful to the noble and learned Lord, Lord Denning. The school would now belong beneficially to the owner, whoever he may be, but the existing persons who have operated the school would be trustees for sale on the terms which I sought to explain in my opening speech.
That said, I think that I have exhausted the subject unless there is any further question which noble Lords wish to ask me. I therefore beg to move that this Bill be now read a second time.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

European Council Meeting, 5th-6th December
3.46 p.m.
The Lord President of the Council (Viscount Whitelaw): My Lords, with the leave of the House I shall now read a Statement made by my right honourable friend the Prime Minister on the European Council held in London on 5th to 6th December.
"With permission, Mr. Speaker, I shall make a Statement about the European Council held in London on 5th to 6th December. I presided over this Council and was accompanied by my right honourable and learned friend the Foreign and Commonwealth Secretary. The conclusions of the

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council have been placed in the Library of the House.
"There were two major themes for this Council: business and jobs, and safeguarding the open society. We noted that economic policies of member states had been steadily converging and that inflation in the Community was expected to fall to 3 per cent. in 1987, the lowest level for 20 years. The Council unanimously endorsed an action programme for jobs, which stems from an initiative taken by Britain supported by others earlier in our presidency.
"The programme puts emphasis on training, including up to two years' vocational education and training for school leavers and greater involvement with industry. It stresses also action to help the long-term unemployed, including schemes for job counselling. The programme will be carried forward by social affairs Ministers at their Council later this week. In future the employment programme must have priority in the use of moneys allocated by the European Community's Social Fund.
"Linked with the need to create the conditions for a growth of jobs, the Council looked at ways of encouraging small and medium businesses—one of the main sources of new jobs. The Community has agreed to over £1 billion of loans for small businesses. This will be available among other things for investment in new technology.
"The Council endorsed the principle of the Commission's proposal both to simplify VAT and to make it possible to lift the VAT threshold for small businesses up to about £25,000. This is in line with our aim to take unnecessary burdens off the back of enterprise.
"Completion of a large, single market in Europe has been a major priority of the British presidency. Thirty-two measures have already been adopted or agreed since July. These include an important step towards complete freedom of capital movement within the Community; action against counterfeit goods; common testing and marketing standards for pharmaceutical products; common standards for television by satellite; and common standards for a pan-European telecommunications system using digital technology.
"A similar effort will be made on digital cellular radio, a market worth billions of dollars in which Europe has a technological lead. We shall continue to press for easier access to cheap air fares.
"The Council recognised the crucial role of an open world trading system in achieving more growth and more jobs. We noted that the Community has already launched an action in the GATT against Japan's barriers to trade. That action may need to be reinforced unless we see early results.
"The second main theme of this meeting was concerted action to protect our citizens against terrorism, drugs, illegal immigration and abuse of asylum. Terrorism can strike anywhere, and it is vital that we act together in our common defence, as we did successfully in the case of Syria. We therefore
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agreed on a policy of no concessions under duress to terrorists or their sponsors; and on solidarity between member states in their efforts to present terrorist crimes and to bring the guilty to justice. Free movement for bona fide travellers within the Community must go hand in hand with better controls at the Community's external frontiers.
"On drugs, the Heads of Government endorsed a seven-point plan covering intensified co-operation between police and Customs authorities; a decision that illicit drug traffickers' assets will be liable to confiscation throughout the Community; exchanges of drugs liaison officers; and exchanges of information on the treatment of drug addiction and on education about the dangers of drug abuse.
"The European Council also decided to launch a sustained information campaign on the prevention, early warning and treatment of cancer; and to designate 1989 as European Cancer Information Year. It asked the Council and Commission to ensure Community-wide exchange of information on AIDS, and to consider what further co-operation in research might be taken against the spread of this dreadful disease.
"The President of the Commission, M. Delors, reported on his review of future Community financing. He will be visiting Community capitals early in 1987 in order to set out his views and discuss options, covering future financing, the common agricultural policy and the structural funds.
"The European Council made quite clear that in the meantime work must be carried forward and decisions taken on issues already before the Council. The Agricultural Council is now in session with the aim of reaching such decisions on the reform of the arrangements for milk and beef.
"The Heads of Government discussed East-West relations and arms control. There was wide support for the points which I agreed recently with President Reagan at Camp David. We issued a statement on the Soviet occupation of Afghanistan which is now nearing the end of its seventh year.
"Foreign Ministers discussed the problems of the Middle East and the Iran-Iraq war and stressed the importance of maintaining contact with the Gulf states. They also discussed South Africa and Latin America.
"It has been a priority of the British presidency to make the Community work better for the benefit of individual citizens. This was a practical and successful Council relevant to jobs, to our future prosperity within the Community and to the future safety of our citizens."
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Viscount for repeating this long Statement. No one would seek to argue that this was a great reforming summit meeting. We welcome the agreements reached on a number of subjects and the specific measures agreed on terrorism, AIDS, the fight against cancer and the traffic in drugs. We hope that the steps agreed to be taken will be effective and show quick results.

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We are glad to know that Community health ministers are to meet later to consider further possible action on AIDS. I hope that the noble Viscount will confirm that funds will be available, if necessary, to deal with any recommendations made by the ministers.
Would not the noble Viscount agree that the big internal problems of the Community were swept under the carpet at this summit meeting? It would be unfair to blame the Government entirely for this. But it would equally be wrong for the House to ignore the facts as they are. For example, agriculture was not dealt with, in spite of the Community's unmanageable food mountain: 16·5 million tonnes of grain; 1·38 million tonnes of butter; 1 million tonnes of milk powder; and over half a million tonnes of beef.
What is to be done with all this food? Is it to be dumped on the world market at subsidised prices? Is the noble Viscount able to tell us whether we can afford the subsidies at the present time? Is butter to be sold to the Soviet Union at cut prices?
Do the Government believe that the CAP should be reformed? Alternatively—to put it another way—will the noble Viscount say whether there is any real prospect that the leaders of the Community nations are proposing to take practical steps to reform the CAP?
There is reference in the Statement to greater competition between airlines. What about steps to reduce the fares? There is a passing reference to this as something that may be done in the future. The fact is that travellers within the Community are waiting for lower fares and I should be grateful if the noble Lord would give some realistic assessment of the likelihood of that. There is a term in the Statement which speaks of easier access to air fares. What does that mean? What is the practical machinery which will enable easier access to air fares to be achieved?
Another major problem is the Community's budget crisis about which everyone is aware. No real action was taken at this summit. The deficit, at the moment, is £2 billion. Will the noble Viscount give an indication of what steps are proposed to deal with this deficit? We are told annually at this time that the Community is about to go bust. Somehow or other, when the time comes, it avoids going bust. All of us are delighted that the big bang does not take place.
However, it would be useful to know whether new machinery is being discussed to avoid this fearful moment in the Community's history when everyone says that the worst is about to take place, and that bankruptcy is around the corner.
We were glad that the leaders discussed employment seriously. It appeared to me however that there was some disagreement as to the methods to be used. On the whole it was the British recipe that was accepted. While we welcome the expenditure of £1 billion on small businesses in the Commuity, it would help if the noble Viscount would tell us what is to be the United Kingdom share of that sum.
One feels that there was no unity of purpose and no unity or major policy for dealing with the problem of unemployment. I do not blame the Government, but I must say, after listening to the noble Viscount reading the Statement, that I find it a depressing
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document against the background of the Community's immense problems.
Baroness Seear: My Lords, we on these Benches would also wish to thank the noble Viscount the Leader of the House for repeating the Statement. I realise it is conventional practice to make polite remarks about Statements but on this occasion I find it very difficult to conform to that practice.
We have been told that this is a practical and successful Council. Practical and successful by what standards? Of course we are glad that there is some progress towards the internal market. That is of the greatest economic importance and we on these Benches give it our absolute, wholehearted support. On worthy matters—with which it is very difficult to disagree—such as fighting terrorists, AIDS, and cancer, we are glad to see that there was agreement. I should like to ask the noble Viscount whether the Government's devotion to fighting cancer runs to increasing funds available of cervical smears, for which we have asked on a great many occasions in your Lordship' House.
Having said that, perhaps I may say that this report is evidence of an occasion on which the Government, albeit strained, have managed to swallow what, to use the Prime Minister's favourite adjective, was a teeny-weeny gnat and choked completely on the camel. The fact is that the Community is in crisis and we have a summit which we have called practical and successful. It has not tackled the CAP, which we know is a mammoth problem and a mammoth obstacle in the way of development along the lines which the Government themselves wish to see. How can the Government talk glibly about increased support for employment from the social fund when it is so well understood that the social fund is limited for cash because over 60 per cent. of the money is going into the CAP? Until that is tackled there is—not to mince matters—a considerable degree of humbug in pretending that we are doing anything of substance.
As the noble Lord, Lord Cledwyn, said, the financial position of the Community is serious in the extreme. M. Delors has said so and he is anxious that something should be done, as well he might be. However, that matter does not even figure in the summit. It seems that in order to have a successful summit the Government have excluded from discussion all those matters which are controversial. However, unfortunately those matters are the matters which are important.
Will the Government give a real lead in dealing with the CAP? Until we stand up to the vested interests which prevent change, we shall get nowhere. We on these Benches, who supported the European idea before Members on either of the other two Benches were interested in it, are deeply concerned that so little progress has been made.
4 p.m.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord, Lord Cledwyn, for his reception of the Statement. I do not know whether I should be grateful to the noble Baroness, Lady Seear, because she did not want me to be grateful. I should certainly be grateful to the noble Baroness if she wanted me to be grateful, but

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as she did not want me to be grateful I do not think that I should be ungracious in not being particularly grateful.
The noble Lord, Lord Cledwyn, referred to the meeting as a great reforming summit meeting. In effect, the noble Baroness, Lady Seear, said that it had not done anything at all. When I come to deal with the remarks of the noble Baroness I shall point out a good many matters that the summit achieved. It was somewhat unfair to leave on one side those matters which were done and to concentrate on those matters which certainly were not done this time but which certainly will be tackled.
The noble Lord, Lord Cledwyn, welcomed the agreement on terrorism; the action against terrorism, cancer and drugs; and the action in respect of research. The noble Lord also asked about the funds to tackle AIDS. I am in a position to say that the Government have already provided considerable funds to tackle AIDS. Indeed, I do not think that funds will be the problem. The problem will be deciding on what is the best action and the success of research into some form of antidote which will be effective. That matter will certainly be pursued very actively, as is stated in the Statement. We must all deeply hope that such research work will lead to productive results.
The noble Lord also referred to the question of employment. He welcomed the £1 billion and asked what would be our share. I cannot give the noble Lord a direct answer today because it obviously will depend upon the projects which are put forward. I should have thought that this was a matter which would be very widely welcomed. It will be up to the British Government to put forward the projects as quickly as possible and to get the maximum share that they clearly can. I can assure the noble Lord that we shall do that.
The noble Lord also raised a question about air fares. No one can say that the British Government have not tried extremely hard, as the communiquée points out, to achieve cheaper air fares, and they have taken a considerable initiative on that particular front. That we have not been successful so far is certainly not to be laid at the door of the British Government, but we hope that progress will be made on what I accept at once from the noble Lord is an extremely important matter.
The noble Lord said that internal problems had been swept under the carpet. I am glad that, having made the point, he then came back to the question of jobs and welcomed what was said on that matter, because I think that after the last summit it was the Leader of the Opposition, Mr. Kinnock, in another place who blamed the Government for doing nothing about jobs and for taking no initiative on them. Therefore it can be said that this time that criticism would certainly in no way be justified under the British presidency. Indeed, a considerable effort was made. I should have hoped that that particular initiative would be welcomed by the noble Baroness, Lady Seear. In a way it was welcomed by the noble Baroness, though she did not quite say so. The noble Baroness has given a great deal of support to training of all kinds, and that is one of the initiatives that was taken at this time together with the other measures on employment.
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Therefore I am sure that she would welcome those initiatives even though perhaps on this occasion she did not bring herself to say so.
The noble Baroness equally suggested that, against the background of the problems of the CAP, action on terrorism, AIDS and cancer was of little account. So far as concerns individual citizens in the Community, I should have thought that all those matters were of very considerable account and would be seen to be so.
Against that background I turn, in answer to both the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, to those problems that were not solved; for example, the problem of the CAP. That matter is being pursued by the Agricultural Council and by M. Delors in his discussions with the countries concerned and in the Commission. The Agriculture Council is meeting this week and, as the communiquée says, it is seeking to make progress on the problems of both milk and beef. No one can pretend that they are easy problems either for this country or for the other countries of the Community, but it is certainly the case that they are being tackled.
The noble Baroness, Lady Seear, said that M. Delors was neglected altogether by the meeting. That really is not so because it says clearly on the future financing that M. Delors reported first, is visiting the Community capitals and is pursuing the very great need as regards finances. It may be said that he did not get the results at the conference, and I am not arguing about that. However, to say that he was totally neglected does not quite accord with the facts of what the communiqué says about his efforts.
We then come to the question of financing, which is a very serious matter. Perhaps in answer to both questions I should say what the position is at present. The 1.4 per cent. VAT ceiling cannot be changed except by unanimity and with the agreement of the national parliaments. It is also right for us to point out that the United Kingdom abatement system agreed at Fontainebleau can only be changed by unanimity. As the noble Lord, Lord Cledwyn, said, it is true that too big a proportion of the Community budget is devoted to storage and disposal of agricultural surpluses. Next year, after the Commission has reported on future financing and agriculture and the Agricultural Council achieves results, as one hopes it will, there will be an opportunity for the Community as a whole. to look more fundamentally at the whole question of agricultural spending. I agree profoundly with the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, that that is an extremely important priority.
Lord Taylor of Gryfe:: My Lords, I very much welcome the references in the Statement to dealing with the problem of unemployment in respect of job counselling, training and so on. However, I regret that there is no reference to any discussion of high interest rates which are certainly impeding investment which must be the basis of stimulating new industrial development. I wonder whether any consideration was given at the summit to the question of securing reductions in interest rates, as we in this country are suffering from the highest interest rates in any of the EC countries?
I should like also to ask about the availability of money allocated from the European Community

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Social Fund which will be directed towards relieving unemployment. In these new moneys being distributed from the Community to areas of high unemployment in the United Kingdom, I should like to know whether there will be a reduction in regional aid funds from the Government under the additionality provisions or whether any new funds which are allocated from the Community to areas of high unemployment in this country will be in addition to the regional entitlement.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord, Lord Taylor, for the welcome which he has given to the job counselling proposals and some of the other measures on unemployment. I agree very strongly with the noble Lord when he stresses the importance of interest rates. No doubt interest rates were discussed, but as I was not present I cannot tell the noble Lord exactly what was said. I can only tell the noble Lord what was in the communiqué. However, it is all part of the Heads of Governments' consideration of the various proposals for growth of new jobs and recognises the measures which have already been taken.
As to the noble Lord's other more technical point about the allocations from the Social Fund and how they will work in the areas of high unemployment, I fully appreciate the particular interest the noble Lord has in this matter. I cannot give him an answer this afternoon. I am not sure that I shall be able to give him an answer even when I check with those concerned who were at the meeting, but I shall certainly do my best and, if I can, I shall write to the noble Lord.
Lord Auckland: My Lords, the Statement laid emphasis on cancer research. Can my noble friend the Leader of the House say whether there were discussions with the various medical experts within the Community? Can he expand on these measures to combat cancer? Bearing in mind that a breakthrough is now more and more on the cards, can he say what methods are being used to get to grips with this terrible problem?
Viscount Whitelaw: My Lords, in answer to my noble friend Lord Auckland, clearly this was a general discussion that took place, and the Heads of Government naturally left it to the medical people concerned, to follow up what had been said in general terms in the more detailed proposals which would certainly be necessary. But of course they referred to a sustained information campaign on prevention and early warning in treatment, and those are clearly vitally important matters. They designated 1989 as the European Cancer Information Year. It will of course be for the medical experts to take considerable advantage of the lead given by the Heads of Government on this occasion.
Baroness Burton of Coventry: My Lords, I too had noticed in the Statement:
"We shall continue to press for easier access to cheap air fares".
I wonder whether I might take this up with the Lord President. Does he recall that on Saturday the Prime Minister stated that this summit meeting had demonstrated the relevance of the Common Market to
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the ordinary people in Europe? I want to ask the Lord President: would he agree that the liberalisation of civil aviation with cheaper air fares is indeed of relevance to the millions of ordinary people in Europe travelling both on business and on pleasure?
I raise this matter because I think that the Government have tried, but I wonder whether the Lord President would agree with me that continuing "to press for easier access" is going to get us exactly nowhere. Nowhere at all. I wonder whether the House would agree with me that to get anywhere on this matter we need somebody like the Prime Minister with her energy, single-mindedness, and her consistency to press for these matters. I ask the Lord President whether, occupied though she is, he could bring this matter to the attention of the Prime Minister. I am convinced that we need her help. We shall get nowhere without it. I should be most grateful if the noble Viscount could do that.
Viscount Whitelaw: My Lords, perhaps I should say to the noble Baroness, Lady Burton, that I should have been very surprised indeed if she had not raised that point on cheaper air fares, in view of the many Questions she has properly asked on this subject in the past. I think I can only take note of what she has said about the need—which I know my right honourable friend the Prime Minister certainly recognises—to do everything we can to make progress on this particular front. I can assure the noble Baroness that my right honourable friend is disappointed that we have not made greater progress so far. I shall certainly pass on to her the remarks of the noble Baroness.
I think I forgot to answer the noble Lord, Lord Cledwyn, when he asked me what "easier access to cheap air fares" meant. I am bound to say that I am as puzzled as he is. Easier access to cheaper air fares can only mean getting cheaper air fares so far as I am concerned. I do not think that there can be any other way of putting it.
Lord Ezra: My Lords, the noble Viscount mentioned in the Statement the continued determination of Her Majesty's Government to work for a single market within the Community. He indicated various steps that had been taken with that in mind. Would the noble Viscount inform us whether he thinks that progress so far made will mean that the objective of creating a real and effective single market within the European Community will be achieved within the timespan laid down?
Viscount Whitelaw: My Lords, I think that the noble Lord has properly recognised some of the 32 measures which have already been agreed and adopted since July on this matter. This is a considerable tribute to those of my right honourable friends who have been engaged in many Councils. I can say that because I have not been engaged in any of them. Those who have been have done a considerable amount to make progress on this important front. But of course I could not give an answer to the noble Lord's question.
Earl De La Warr: My Lords, my noble friend, when talking about agricultural produce, mentioned milk and beef, but so far as I can remember he did not

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mention cereals. As there are, I think, 16½ million tonnes of cereal in surplus stock I wondered whether that was an omission. Before I sit down I should perhaps declare that I am a dairy farmer.
Viscount Whitelaw: My Lords, it was not an omission, because as I understand it the Statement said:
"The Agricultural Council is now in session with the aim of reaching such decisions on the reform of the arrangements for milk and beef."
Therefore, in my remarks I stuck carefully to what had clearly been considered in the Agricultural Council. I cannot therefore help my noble friend Lord De La Warr any further, except to say that I think it would be clear—this is not in any of the briefs that I have, this is just in my personal knowledge—that in fact a good deal of cereal in a comparatively good harvest this year has been sold, and much less has been stored this year than in some previous years which must be a good thing so far as it goes.

Consumer Protection Bill [H.L.]
4.16 p.m.
The Lord Advocate (Lord Cameron of Lochbroom): My Lords, I beg to move that the Bill be now read a second time. The purpose of this important Bill is to improve consumer protection. The best protection for consumers lies in a free and fair market. Such a market offers choice and sufficient information for consumers to decide what for them offers the best value for money.
Some practices distort fair markets. Unsafe goods cause death and injury. Their suppliers gain an unfair advantage over reputable businesses who incur the cost of ensuring their goods are safe. Similarly, misleading price indications give traders who use them an unfair advantage. They prevent consumers obtaining the best value for their money. The Bill makes markets fairer and improves consumer protection by addressing these two vital issues; that is, the safety of goods and misleading price indications.
Turning to the Bill itself, Part I implements the EC directive on liability for defective products. I say "implements" advisedly: the Bill does no more and no less. Noble Lords will recall that this matter has been under discussion for some time. The Pearson Commission examined the law on civil liability and compensation for personal injury and reported to Parliament in 1978. Your Lordships debated the report on 28th November 1979. Both the Law Commission and the Scottish Law Commission also examined the law on loss or damage caused by defective products. All three commissions recommended that manufacturers should be strictly liable for death or personal injury arising from a defect in their product, subject always to certain defences, irrespective of whether the manufacturer had been negligent.
Consideration in the European Community took place over a period of some ten years and has been closely followed by the House. It was the subject of two
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reports by the Select Committee on the European Communities. The second was debated on the Floor of the House. The directive was finally adopted in July 1985.
My Lords, this protracted consideration allowed exceptionally thorough consultation to take place. All three commissions invited evidence, and full public consultation took place in the United Kingdom both before and after the adoption of the directive. Last year, some 5,000 copies of a consultative document were distributed and over 200 replies were received.
As noble Lords will be aware, compensation for damage caused by defective products can at present be obtained by two main routes, contract and the law of negligence. Under contract law, compensation for injury caused by a defective product is only available to the purchaser from his immediate supplier. If somebody other than the purchaser is injured he can only obtain compensation if he can show that someone in the chain of supply was negligent.
Part I of the Bill is intended to overcome these gaps in the law by making manufacturers strictly liable for injury arising from a defect in their products; that is to say, any person, purchaser or not, who can show that he has sustained injury as a result of a defect in a product will be able to sue the producer directly and there will be no need to prove negligence. The word "defect" in this context has a particular meaning; namely, failure to provide the safety people can reasonably expect. Liability arises only if the defective product causes injury or death or damage to private property.
Consumers will benefit from certainty in this area of law and that throughout the European Community, and in particular from the ability to claim compensation without having to prove negligence. Retailers will benefit because the Bill channels liability towards the manufacturer who made the defective product, or, if appropriate, its importer into the Community. While the aim of the directive is harmonisation, there are three areas in which member states may derogate from its core provisions. We do not intend to take up any of these derogations. First, the directive and this Bill exclude liability for primary agricultural products. Although member states may derogate from this provision, to my knowledge no member state intends to do so. I think it right that we follow suit.
Secondly, the Bill retains the development risks defence. Thus a producer will not be liable if, but only if, he proves that the state of scientific and technical knowledge at the time of supply was such that he could not have discovered the defect. We believe that without the development risks defence, innovation would be stifled. That would not be in the interests of either industry or consumers. The third derogation allows us to limit the total liability incurred by a manufacturer, as a result of a particular defect, to around £40 million. We are not pursuing this derogation because it might lead to injustices where there are multiple claims, and to delays in payment where there is a possibility of further claims in respect of the same product.
Part I provides for the compensation of those injured by defective products. Part II, which

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complements it, aims to prevent defective consumer goods reaching the market at all. Noble Lords will be aware that there is already legislation which makes the supply of certain types of unsafe goods a criminal offence. The difficulty is that each type of product must be tackled by a separate statutory instrument. Inevitably, some dangerous products are not subject to any regulations. The Government announced their policy on these matters in a White Paper, The Safety of Goods, in July 1984. The proposals for extending enforcement powers have already been given effect by the Consumer Safety (Amendment) Act 1986. They are consolidated in Parts II and IV of this Bill.
Part II introduces the general safety requirement. This will make it a criminal offence to supply any unsafe consumer goods. It will be a defence to show that the goods conform with an approved safety standard or otherwise meet the same level of safety. We intend to approve a comprehensive regime of standards for this purpose. This will be a useful reminder to manufacturers and their customers of the importance of standards in achieving high levels of safety and quality. Unlike Part I, Part II applies throughout the chain of supply. Retailers, however, cannot be expected always to have specialised knowledge about the manufacture of goods. They will therefore have a defence if they can show that they neither knew nor had reasonable grounds for believing that their goods contravened the general safety requirement.
Part III of the Bill deals with misleading price indications. These are at present covered by Section 11 of the Trade Descriptions Act 1968 and the Price Marking (Bargain Offers) Order 1979. This legislation has been widely criticised. The provisions are far from comprehensive. They do not cover the full range of goods, services, accommodation and facilities. They proceed by prohibiting particular practices. Also, the Trade Descriptions Act allows traders not to comply with some provisions if they make that fact clear. The result is to leave gaps which permit rogue traders to mislead consumers, and so gain an unfair advantage over more scrupulous competitors. Furthermore, the bargain offers order is also extremely complex, poorly understood and difficult to enforce.
As a result of the criticism, the Government asked the Director General of Fair Trading to review the bargain offers order. He recommended strengthening it and, in the longer term, legislating with greater precision and flexibility. Following further consultation, a working party of officials undertook a general review of the legislation on price indications. They reported in February 1984, and their proposals were widely welcomed. As in the case of safety, we propose a general requirement. Clause 20 therefore creates an offence of giving a misleading price indication in relation to goods, services, accommodation or facilities.
Traders clearly need guidance on interpreting such a general offence. The Bill therefore makes provision for a code of practice. Noble Lords may recall that in January this year we debated the status of codes of practice. At that time I wound up for the Government. Three main points emerged from that debate. The first was that the status of a code of practice should be made clear in primary legislation. Clause 20(4) gives
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the code evidential status. Clause 24(1) provides traders with a defence if they have complied with relevant requirements of the code. This status is essential to enable traders to know when they are acting within the law. It will not be an offence to contravene the code. The second point which was made in the debate was that codes should be subject to an appropriate parliamentary procedure. Clause 25 provides for this code to be approved by an order subject to negative resolution procedure.
Finally, a number of noble Lords said that codes should be available before legislation receives Royal Assent. The latest draft of the price indications code—which takes account of the many helpful comments we have received during public consultations—was placed in the Library of the House when the Bill was introduced.
Clause 26 enables the Secretary of State to make regulations to prohibit or prescribe particular price marking practices. We intend to use the power to retain the prohibition under the bargain offers order on comparison with recommended retail prices in particular sectors. We also intend to require landlords who resell gas or electricity to provide their tenants with itemised bills. Part III will therefore provide more comprehensive and effective protection to consumers than the legislation it replaces, while also making life simpler for traders.
Part IV provides for the enforcement of Parts II and III. It consolidates, with minor amendments, the relevant provisions in the current legislation. Part V amends the Health and Safety at Work Act 1974. That Act is intended to ensure that safety considerations are properly taken into account before goods for use at work are supplied. The amendments will improve the working of the Act. The general duty is also to be extended to fairground equipment.
The remainder of Part V makes miscellaneous provisions, including a defence of due diligence for many of the offences contained in the Bill and civil liability for contravention of safety regulations. Part V also repeals the Trade Descriptions Act 1972, which requires origin marking of imported goods bearing certain kinds of marks in order to prevent consumers being misled into believing they are of United Kingdom origin.
The 1972 Act has been formally challenged by the European Commission. It is clear from the recent jurisprudence that the United Kingdom could not expect successfully to defend a European Court case against the Act. We are consulting interested parties on the scope—consistent with Community law—for a successor arrangement. Most British manufacturers will doubtless wish to continue to draw attention to the fact that their goods are made in Britain. The repeal of the 1972 Act will not prevent that.
My Lords, I am sure that the House will agree that this Bill offers real gains for business and consumers. Both will benefit from the more effective operation of the market mechanism. Supplying unsafe goods and giving misleading price indications are clearly harmful to consumers. They are also a way of getting an unfair competitive advantage over honest businesses. This Bill will do much to prevent both mischiefs.
Accordingly, I commend the Bill to your Lordships' House. I beg to move.
Moved, that the Bill be now read a second time—(Lord Cameron of Lochbroom.)
4.31 p.m.
Lord Williams of Elvel: My Lords, we are grateful to the noble and learned Lord the Lord Advocate for taking us through the Bill now before your Lordships' House with his usual clarity and attention to detail. In return, I wish to make it clear on behalf of the Opposition that we welcome this Bill and, while we reserve our right to scrutinise it as it completes its passage through your Lordships' House, we shall do so without causing undue delay. We have criticisms of some of its measures, indeed, of some of the gaps in it. These I shall come to later. But we are wholly in favour of the general principles and will be constructive in our debates in Committee. Where we disagree with the Government on a number of points, as I fear we may, we shall be expeditious in our arguments.
Having said that, I hope that the noble and learned Lord will forgive me if I make one or two general comments which he may find unduly carping. First, I cannot help noting that consumer protection measures seem to come forward rather late in the life of a Parliament. Of course, it would be quite unworthy of me to suggest that this pattern is due to the electoral cycle, but it does seem to indicate that consumer protection is not really very high on the list of government priorities and that anything that is to be done had better be done nearer the general election rather than at a distant date so that voters will still remember rather than forget what has happened.
The example of the Fair Trading Act 1973, which some of us remember, comes to mind in this respect. To be charitable to the noble and learned Lord—and I am always charitable to him—there is, of course, another reason why such Bills come forward late in a Parliament. Consumer protection measures clearly cause considerable difficulty since inevitably they have to strike a balance between the legitimate interests of producers and the interests of consumers. And governments are always criticised by producers for going too far and by consumer organisations for not going far enough.
I accept that a balance has to be struck. This must be much more difficult in these circumstances for the Department of Trade and Industry which over the past year, has found itself in a sort of crossfire in many respects—indeed, some people would say "stranded on the barbed wire". It must be difficult for them to bring forward a Bill of this nature where the crossfire is going to occur again. But so far as the Opposition are concerned, with one or two reservations, I think the balance of the Bill is about right, or nearly right, and the Government are to be commended for that.
Of course, the CBI have complained. They would, would they not? And, since the CBI, as far as I can see, at their last conference, has declared some sort of war against the Labour Party, I am afraid that they are not going to get a great deal of sympathy from us. Indeed, I might remark in passing that had the CBI's appeal for help from us on the Financial Services Act come after
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rather than before the CBI conference, they would have received a very dusty answer indeed; and, as far as I am concerned, in future my telephone will be off the hook to that particular body.
We have had to wait a very long time for this Bill. The noble and learned Lord the Lord Advocate took us through the consultation that had taken place about the principle of product liability. After all, as he said, the Royal Commission on personal injury compensation reported as long ago as 1978; the report was debated in 1979 and the views of the Law Commission for England and Wales, the Law Commission for Scotland, the Council of Europe, the Law Society and the TUC have all been known for some time. Why has it taken so long to bring forward legislation?
Do we really need to be pushed by a Community directive in order to legislate on these important matters?—because the problem with delay in such legislation has been notably shown up in the problem of toy safety. The toy safety problem is still with us and, despite the Consumer Safety (Amendment) Act 1986 and some of the slightly feeble efforts on enforcement, there are still toys in the shops today which, if the Bill were now enacted, would be illegal and could be dealt with.
This question is linked with a further question. Since we have got a consumer protection measure, why cannot the Bill go just a little bit further? For instance, consumer credit has been in discussion for seven years with the European Community Consumer Affairs Council, and in the light of the current consumer credit boom—on which only today the DTI produced statistics—one would have thought that the issues are pretty clear and need dealing with. There is certainly a consumer protection element there which this Bill, in my view, could easily have covered. Nevertheless, we must be grateful for what we have and I shall now abandon the role of Scrooge and revert to the Bill which we have before us.
Part I, as the noble and learned Lord has explained to us, deals with product liability. We warmly support the main thrust of these proposals. The Government in our view are right to reject the view—as the Community were right to reject the view—that the imposition of strict product liability would give rise to the sort of problems that have been encountered in the United States which in some circles have been summarised in the phrase, "the liability crisis". The United States has quite a different approach to these matters, not least in the jury trial system in class actions, which give rise to punitive damage awards of a quite exaggerated nature.
I doubt whether the present proposals will give rise to these problems and I agree with the Government, although I am somewhat less sanguine than others—and I have to say this—on their ability to prevent the contingent-fee system, under which entrepreneurial lawyers seek business on the basis of a success fee, from encroaching here. Although the Law Societies are very anxious to prevent it, in my view there may be problems in the future on that matter.
On the third derogation that the noble and learned Lord mentioned, the Government are also right in our view, to resist the introduction of a financial limit to a

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producer's total liability, given the problems raised by multiple claims, interpretation of phrases such as "identical product" and "same defect" and so on. We endorse the Government's view on that.
At this point I am afraid that I must part company with the Government, because we differ from them in their attitude to the other two options which are allowed in the directive, both of which have aroused considerable controversy which we must recognise. First, perhaps I may speak to what is known as the "development risk" or "state of the art" defence which, in very brief terms, as the noble and learned Lord has explained, provides that the producer shall have a defence against a claim for damages if the state of scientific and technical knowledge was such that any defect could not reasonably have been detectable.
I recognise that this is a difficult area and any noble Lord who thinks that it is an easy problem really is missing the point. Nevertheless, the thalidomide tragedy and the Chinook helicopter disaster are fresh enough in all your Lordships' minds to make us believe that we must pause seriously before adopting the Government's position. I must state quite frankly that the Opposition take a different view from the Government on this issue. We believe, with the Pearson Commission, that to exclude development risk from a regime of strict liability would be to leave a gap in the compensation cover through which, for example, the victims of another thalidomide disaster might easily slip. It is quite clear that a dangerous design defect has a greater potential than a manufacturing defect for widespread injury caused by a defective product range—as witness, for example, the series of accidents that overtook the McDonnell Douglas DC.10 as a result of a design fault in the tail assembly.
There are further problems with the Government's position. The directive seeks to harmonise the rules for strict liability throughout the Community. France already has such liability and, I understand, will not be seeking to avail itself of the derogation offered by the directive. Germany has strict liability for pharmaceuticals. Belgium has indicated that it, too, will not be seeking to give producers the development risk protection. In short, not only has no other member state announced its intention of exercising the option to introduce the development risks defence, but also, were some of them to do so—and I cite Germany, France and Belgium—this would involve repealing existing legislation which has widespread public support and therefore, in my view, would be politically impossible.
If we accept the Bill as it stands, Britain would inevitably become the testing ground for untried products which, if shown to have no defects, could then be marketed in the rest of the Community. I cannot believe that the British people will gladly submit to being guinea pigs. They have never done so, and, in my view, never will. The opposition will do all in its power to prevent it.
To those who argue that our attitude would "stifle innovation" in this country—that was, I believe the expression used by the noble and learned Lord—I would reply by asking them to specify precisely in what respect innovation has been stifled generally in the United States and France and specifically in
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Germany in the pharmaceutical industry. To those who claim that insurance for development risk will be more difficult, I would reply that all the evidence is that such insurance would still be available but at higher premiums. Those higher premiums, when passed on to the consumer, are a price (and we accept this) that the consumer should pay and would gladly pay for the extra protection available.
We disagree also with the Government's position on the third option, the agricultural product option. I have no intention at the moment of embarking on a debate on the meaning of the expression "industrial process". I simply note that almost all food bought in shops has undergone some form of processing. Milk has been pasteurised; grain has been milled; meat has been slaughtered and butchered; and even the innocent cabbage has been sprayed with a pesticide or an insecticide. I confess frankly that I do not understand what "industrial process" really means. Nor do I understand—I draw the attention of the noble and learned Lord to the words of the directive—what "initial processing" means. Then again, if I may quote from the preamble of the directive, I do not understand the meaning of,
"processing of an industrial nature which could cause a defect in these products".
Until somebody can explain these matters in very much greater depth and clarity, we on this side are bound to take the view that the Government have taken the wrong decision on the matter, and we will seek to reverse it.
Part II of the Bill deals with the general duty on manufacturers, importers and retailers to supply safe goods. We welcome this part particularly, although, again, with some reservations on detail. As my noble friend Lady Nicol will be dealing with this matter later, I do not intend to detain your Lordships for long. I would simply say in response to what the noble and learned Lord, the Lord Advocate, said, that the status of a series of standards to which he referred and the relation between them and the general duty is something that we shall have to probe—noting, as I do, that the general safety requirement is qualified by the expression in the Bill,
"having regard to all the circumstances".
I can see a few rocks ahead there, my Lords.
Part III of the Bill deals with misleading price indications. Here, I must confess to your Lordships that I have a strong sense of déejàa vu. When I was chairman of the Price Commission in the late 1970s everybody was much exercised by the problem of price indication: bargain offers, 2p off the recommended retail price, and so on. A great deal of fun was had by all, including the then Director General of Fair Trading. We all know, as the noble and learned Lord said, that the Price Marking (Bargain Offers) Order 1979 has not exactly worked to everybody's satisfaction. So people can no doubt enjoy themselves a lot more in dealing with a order problem that is exceptionally difficult to handle.
If the Government have a proper formula, and one which is right and reasonable, we on our side will give it a strong and warm welcome. Nevertheless, I have to enter one important caveat. It concerns, of course, the code of practice, compliance with which, under Clause

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24 of the Bill, would be an absolute defence to the charge of misleading pricing. As the noble and learned Lord pointed out, your Lordships debated in January of this year the whole status of codes of practice and the propriety of conferring rights in such codes unless those codes themselves are contained in secondary legislation.
What we seem to have here, according to the noble and learned Lord, is a situation where an order may be made bringing into effect a code of practice, the text of which is not open to parliamentary scrutiny. This seems to us to have the effect of elevating a code of practice beyond the role of guidance to the role of secondary legislation. Furthermore, there is not necessarily to be one code of practice. As the Bill specifies, there can be two, three or more, which the Secretary of State may approve. Compliance with those codes constitutes the same absolute defence against the charge of misleading pricing. We shall be probing this matter carefully in Committee, bearing in mind the constitutional implications of the treatment of codes of practice over which Parliament has no control.
Parts IV and V deal with enforcement and supplementary provisions; and I have only two comments to make on them. First, none of this legislation is any good unless it is enforced, and to enforce it the authorities must be given proper powers and proper finance. There are provisions under Clause 14 which lay burdens on enforcement authorities. Yet the ground is cut from under their feet in Clause 34, which allows only 48 hours for customs officers to detain imported goods to enable enforcement officers to test whether they comply with the law. This simply cannot be right.
Secondly, the Bill provides for weights and measures authorities throughout Great Britain to enforce the safety provisions and the misleading pricing provisions. These duties will certainly involve extra burdens on local authorities and their trading standards officers. Yet, in the Explanatory and Financial Memorandum, it is stated that there are not expected to be any implications for public expenditure or public service manpower. We are getting a bit tired of central government—particularly this central government—imposing obligations on local authorities, not footing the Bill and then attacking them for wasting ratepayers' money. It really will not do.
I have dealt with the main points of principle in the Bill. I cannot pretend that the Bill is free from controversy. And, no doubt, some of that controversy will be quite lively. However, I should be wrong not to reiterate what I said at the beginning of my speech about the welcome we give to this Bill. We shall ensure that the Bill passes through your Lordships' House in an expeditious manner. The noble Lord, Lord Lucas of Chilworth, who is to reply, knows how unnaturally it comes to me to say that the Government have produced a generally good Bill. However, I must in all honesty do so while continuing to insist that we shall try, during Committee stage, to make the Bill even better.
4.53 p.m.
Baroness Burton of Coventry: My Lords, I should like to thank the noble and learned Lord the Lord Advocate for taking us so clearly and concisely through the Bill. In my remarks I shall be dealing with some of the points he made. As the noble Lord would expect, we on these Benches agree with some of those points and disagree with others; we shall take that further in Committee.
Having listened to the noble Lord, Lord Williams of Elvel, it seems that this side of the House is in agreement concerning the points we accept and those which we wish to change. However, I hope that in this Bill it will not be party divisions which surface but divisions from all sides of the House on matters which are not party matters but which concern consumers.
This Consumer Protection Bill is brought forward with the goodwill of us all, as the noble Lord, Lord Williams, has said. However, it leaves me with the query as to how many consumer protection measures we have had, at least during my 35 years' interest in consumer affairs. I am sure that the noble Baroness, Lady Elliot of Harwood, will agree with me that we seem to have had them in succession, one after the other. While welcoming, during all this time, what various governments have said they were trying to do, those of us with a considerable interest in and knowledge of these matters never felt that these measures went far enough, whatever the political party in power. I accept that that is probably a natural feeling on the part of anyone who feels strongly on any particular matter.
It has always seemed to me—and my mind now is running in the same direction as that of the noble Lord, Lord Williams—that consumers are always popular when elections loom. I am not at all sure in my own mind how popular basically—and I wish to emphasise the word "basically"—consumers are today. Ministers may give us praise and assurances of consideration. But what chance have any of those assurances of outweighing Treasury considerations? We have only to recall what happened over gas, water and electricity charges, and what is threatened concerning water today. I ask the House how much effect consideration for the consumer had in these matters.
The House may also recall Treasury proposals to the chairmen of the nationalised industries on 20th December 1984 which were fiercely opposed by those chairmen because they feared that those proposals would greatly increase the power of the Treasury over their industries. As a matter of fact, those consultative proposals were kept very quiet and were slipped through on 20th December by means of a Written Answer in another place. Although those proposals concerned Consumer Council matters, and although the chairmen were asked for their opinions on them, nothing went to the people concerned (the chairmen of the consumer councils) until, by accident, they learned that such proposals were in existence. Upon demand the Treasury proposals were then sent to them. I think that is a slight on consumers. Surely the proposals should have gone to the chairmen of the consumer councils to begin with. However, there was such a storm over all this that the proposed legislation was

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withdrawn in another place on 9th May 1985, as indicated in a Written Answer at col. 474 of Hansard of another place.
I want to mention a third example of Government consideration for the consumer. This concerns delay. How well we know the interminable delay and procrastination when progress is undesirable, however urgent the needs of the consumer. These things must be said. Where did interest for the consumer rank on the age-long procedure of guidelines for the nationalised industry consumer councils? The patience of this House allowed me to pursue the Minister by means of Questions from 23rd October 1983 until 17th October 1985. Even then, we were not finished. A month later, and in despair, I asked the Minister whether the Government proposed any action, legislative or otherwise, arising from those matters; or were we to drift along for another two years engulfed in bureaucracy?
I believe the Department of Trade and Industry would have liked, and in fact actually wished, to proceed with legislation along the lines of the Bill we are discussing today. But what chance had a mere department--never mind the consumer—when the Treasury once more entered the scene? It was decided that the privatisation of British Gas was all-important. I repeat to the House, what chance had any other legislation—never mind any consideration for the consumer—when competing against the Treasury and a measure involving a stock issue of £5½4 billion? We all know the answer to that one.
These remarks may seem to the Minister, and indeed to the House, an odd introduction to wishing a Bill well. However, I believe that nobody doubts my concern for the consumer, and I feel that the Government should realise that I, and certainly we on these Benches, want to be sure what is really being offered to the consumer. Whether the leopard has changed his spots permanently is another matter entirely, and I shall leave that matter there.
The Bill we are discussing today deals with three main points, as the Minister has explained. It deals with product liability, with general safety requirements and with misleading price indications. We shall be looking at all these matters in Committee, so I propose to be very brief today. However, I should like to say a few words on product liability. This has been referred to by the noble and learned Lord the Lord Advocate. Noble Lords will recall that on 30th July last year we extracted a statement in this House—"extracted" being the correct word. On page i of the Consumer Protection Bill which we are looking at today, we have the Explanatory and Financial Memorandum. In Part I headed "Product Liability" is the sentence:
"Part I of the Bill implements the EC Directive on product liability … which was adopted by the Council on 25 July 1985".
At col. 162 of the Official Report of 25th July 1985, I said that we on these Benches thought it important that when deliberations had been going on for ten years the House should know of any decisons reached before adjourning for the Summer Recess. I think it is correct that we, the House and the Minister would much have preferred a completely harmonised regime throughout the European Community. The years of disagreement referred to made it quite clear that a
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common regime on the lines we suggested would never be agreed. It seemed that the package accepted by the Council of Ministers should at last allow real progress to be made. I personally was of the opinion that the only alternative to accepting the compromise was to continue for another decade or more without reaching agreement. I supported the action taken by the Government and expressed appreciation of the efforts made towards harmonisation of European law in this field, from which I believe both the consumer and industry will benefit. But today, some 18 months on, there is considerable discussion about what should now be done on this matter of product liability.
I believe that a major flaw in the Bill is what is termed the "development risks defence". Many of us in this House and outside believe that the Government have bowed to pressure from industry by including this in the Bill. At present, France, Belgium and Luxembourg are not prepared to accept such pressure; and neither is Germany in the matter of pharmaceuticals. I hope that noble Lords on all sides of the House will bring about the necessary changes during the Committee stage, and I imagine that everybody is looking forward to hearing the noble Lord, Lord Allen of Abbeydale, who I, and I think the House, regard as the expert on product liability.
On the general safety requirement and under the present safety laws the Government can make detailed safety regulations for particular categories of goods. The Government also have the power to take immediate action against anything which is shown to be unsafe by making prohibition orders forbidding its supply. But in practice an order will be made only when such goods are already on sale, and probably after some have been sold. According to the Consumers' Association, to which I am indebted for this information, the powers are not often used and there is no requirement on traders to supply safe goods. In fact the Consumers' Association says that during the past two or three years there have been a number of cases of dangerous products which cause harm to individuals continuing to be sold. I expect that we shall want to look hard at this aspect. In the meantime, when the Minister comes to reply will he confirm my understanding that the introduction of the general safety requirement will mean that all new consumer goods will be subject to the law and must comply with sound, modern standards of safety?
Over the years many of us in this House have taken part in discussions on misleading price indications, and I am sure that we shall do so again. The noble Lord, Lord Williams, went back to the late 1970s, and I seem to go back to the 1960s on these matters. I liked the summary given by the Department of Trade and Industry when it declared that Part III of the Bill has at its centre a general offence, which is,
"The offence of giving to consumers a misleading price indication about any goods, services, accommodation or facilities".
I warn the Government that we shall want to look carefully at the actual status of the code of practice and at such old problems as the 28-day rule to compare prices.
Before concluding, and although the noble and learned Lord the Lord Advocate, mentioned this, the House will understand that I must put on the record what was told to me during the debate on the Queen's

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Speech. At col. 222 of the Official Report of Tuesday 18th November, the noble Lord, Lord Skelmersdale, said:
"We [the Government] intend to make regulations under Part III of the Consumer Protection Bill to require landlords who resell gas and electricity to give itemised bills to their tenants stating the number of units consumed and the statutory maximum price. These regulations will be made as soon as possible after the Bill receives Royal Assent".
We on these Benches wish the Bill well. We hope that it will reach the statute book swiftly. I believe that we have an ally in the noble Lord, Lord Lucas of Chilworth, and I trust that this entirely non-party measure will signal a new departure in consumer affairs.
5.4 p.m.
Lord Allen of Abbeydale: My Lords, I should like to add my welcome to this Bill, with perhaps a special word of appreciation at the outset for the general safety requirement in Clause 12. The clause may be open to criticism on points of detail but the general approach is one that I hope will mark a path to be followed by all our trading partners in the EC, extending possibly to goods for export as well as to those for home consumption.
Having said that, I propose to limit my remarks to the provisions about product liability, though I would certainly make no claim to live up to the advance billing kindly provided by the noble Baroness who has just spoken. It seems a quite long time ago since we were arguing about this directive, in a much earlier draft form, when I was a member of the Royal Commission on Civil Liability and Compensation for Personal Injury, the Pearson Commission. I realise that I am the only member of that commission now sitting in either House. It came as a very great relief last year, when one had almost given up hope, that at long last agreement was reached on the directive.
Perhaps I ought to give warning that the successful outcome here has made me think about having another go at some of the other Pearson recommendations which have been so sadly neglected, notwithstanding the somewhat perfunctory and inconclusive debate to which the noble and learned Lord the Lord Advocate referred; but that is by the way. At any rate, we have before us today these clauses dealing with product liability, and very welcome they are. But alas, we live in an imperfect world; and as the noble Lord, Lord Williams of Elvel, has already said so fluently, in two important respects what is proposed falls short of giving complete satisfaction.
The first of these points relates to the provision in Clause 2(4), to which the noble Lord, Lord Williams, referred, which says in effect that the new provisions about the applicant not having to prove fault do not apply in respect of any defect in game or agricultural produce which has not undergone an industrial process. This exemption is permitted under the directive, though I notice that the Bill does not quite follow the wording of the directive itself. For example, the directive, unlike the Bill, refers to primary agricultural products. I noticed that the noble and learned Lord the Lord Advocate used that phrase, addressing himself, as I saw it, to the directive and not to the Bill before us.
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The draftsman has also introduced a new complication by referring in Clause 1(2)(c) in the context of agricultural produce to "an industrial or other process". None of this perhaps matters very greatly, though it is a little mysterious; but what matters is that neither the directive nor the Bill tells us what is meant by "an industrial process". I go along with the noble Lord, Lord Williams, in thinking that this opens up scope for considerable argument.
I do not want to go into a great deal of detail today, but as an example let us take meat. Is it intended that, say, sirloin of beef and lamb chops should be in, but that mince and hamburgers should be out? Or do slaughtering and butchering of themselves constitute an industrial process, so that meat in general can never be covered by the exemption? Milk, which as I understand it is always treated, must always—and I agree with the noble Lord, Lord Williams—fall outside the exception, as I suppose must also frozen chickens at the supermarket. But what about fruit and vegetables? If one watches the enormous pea-viners at work they look a good deal more like sophisticated industrial machinery than much of what is to be seen in the factories. But as the peas are frozen anyway, they are presumably outside the exemption.
It seems to be assumed by many people who write about this matter that fruit such as apples will be within the exemption. But does not the large-scale use of pesticides—some of which I note had to be banned only last week—and fertilisers constitute an industrial process in which it can occasionally happen that the wrong concentrations are used or the wrong target sprayed? If all that is not an industrial process, what is it? One could go on and on, but I think enough has been said to suggest that the Bill conjures up a delightful prospect for the lawyers in the somewhat unromantic wonderland of fruit and veg; and a gloomy, somewhat expensive prospect of uncertainty for the poor citizen who actually suffers.
There is a simple way of avoiding all this ambiguity and doubt, and that is just to drop the provision. On the merits, anyway, that is what I think ought to be done. Can it really be justifiable to make it impossible for the citizen to enjoy the new rights conferred by this Bill when it comes to what he eats and drinks? The Pearson Commission thought not; and neither did the Law Commission for England and Wales.
Take fish, for example, which is an agricultural product for this purpose. Japanese consumers could testify to the terrible consequences of the contamination of fish by mercury; and it is not altogether unknown for shellfish in this country to cause harm. As the Law Commission put it, an individual who is made ill by eating poisonous fish should be able to look to the person who put the product into the stream of commerce. Article 15 of the directive allows a member state to derogate from this exemption for agricultural products. I think we ought to do just that.
My second point relates to the defence of development risks, to which previous speakers have referred. Here too the drafting of the Bill does not quite fit in with what is in the directive. Incidentally, I am advised that it is slightly more accurate to talk about development risks than the state of the art defence. Article 15 of the directive again permits any member

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state to leave this defence out of its domestic legislation. The Government have chosen not to do so. It is a decision which, like previous speakers, I regret and which as the Bill proceeds may possibly be reversed.
The Pearson Commission thought that this defence should not be allowed, as did the two Law Commissions and the Council of Europe. The West Germans, it has been pointed out, do not allow it for drugs; and I cannot help recalling that the circumstance surrounding the appointment of the Pearson Commission was the thalidomide tragedy. Your Lordships will recall that no United Kingdom court ever ruled that there was any legal liability on the producers or manufacturers of that drug. I am well aware that since then the safeguards against dangerous drugs have been strengthened. I appreciate too that under the Bill the burden of proof would fall squarely on the producer who advances the defence and that it would not be at all easy for him to discharge that burden.
Nevertheless, in the last resort it would still be possible for the individual citizen who had suffered harm to be left with the impossible task of proving fault or negligence; and no one could assert without reservation that another thalidomide-type tragedy could never happen. I think that the issue would arise very rarely; though to judge from the fuss made by some manufacturers your Lordships would think it had come up every other day. However, the very possibility ought to be ruled out altogether; and I fear that if it is not the Pearson Commission will have failed in one of its most deeply-held conclusions.
We hear a lot about the cost of insurance and the stifling of research and innovation. The noble and learned Lord the Lord Advocate touched on the second point in his interesting speech. Second Reading is not the occasion to go into that in great detail and today I shall say only that the insurance problem has been very greatly exaggerated—so it seems to me—and that I too am not aware that the West German drug manufacturers or the industrialists in France have found any crippling financial burden or any noticeable check to their innovation and inventiveness. It seems to be a point the validity of which I simply do not recognise, and without wishing to appear offensive I think it can only be described as parochial.
Pharmaceuticals and aerospace are the two industries where the sums at issue can be very considerable; but do not let us be led astray by the court findings in California. We copy the Americans in many ways—some of them good and some of them, like muzak, not so good. However, this is an area where I think there is not much risk of following their example, even, I hope, in the matter on which the noble Lord, Lord Williams, touched. I should be sorry indeed to see that happening. It reminds me, however, of the point that whatever the arguments about insurance here may be, our exporters somehow have to cover themselves for California and for the many countries where the development risk defence is not allowed and is not going to be allowed.
In conclusion, I say just this. The Bill very properly enshrines the principle that it is unjust for consumers who buy products in the expectation of reasonable safety to have to bear the consequences of the injuries
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caused by those products if they prove to be defective. To my mind, that principle should apply equally to defects which are discovered during the use of a product.
Article 15 of the directive provides for a review of the operation of this defence in 10 years' time and for a decision then on whether the relevant article in the directive should be repealed. Clause 8 of the Bill, as I read it, would allow for Clause 4(1)(c) to be repealed by subordinate instrument if the EC decision goes that way. I feel sure that it will. Why not bow to the inevitable and leave it out now?
5.18 p.m.
Earl De La Warr: My Lords, I too start by congratulating my noble and learned friend on the helpful and extremely lucid way in which he introduced this Bill. I shall confine myself largely to Part I, which I fully support, and then say a little about Part II to conclude. I am in fact rather glad that I decided not to talk about Part III, because I did so without knowing that the noble Lord, Lord Williams, was going to lead for the Opposition. He will recall that many years ago when he was running the Prices and Incomes Board—
Lord Graham of Edmonton: My Lords, the Price Commission.
Earl De La Warr: I am sorry, my Lords; the Price Commission. I was running a national television rental business, and the noble Lord chased me all round the houses in making a report on the industry. I am happy to say that by a hairsbreadth he failed to catch me; but I fear I would not be so lucky another time.
I am speaking today as someone who has spent most of his business life in making products and selling them—in some cases selling them direct to the public as a retailer—but I claim no special knowledge of product liability. All I know is that when it reaches the courts it is an extremely complex matter and better left to the experts. It may be worth while repeating the definition of "defect" in Part I:
"there is a defect in a product … if the safety of the product is not such as persons generally are entitled to expect".
I shall only comment that for commercial lawyers that must mean champagne and oysters.
As a manufacturer I have learnt a few simple lessons, and sometimes the hard way. The first one is that economic laws govern a man's commercial behaviour far more than the laws that are made by men in Parliament. The economic laws do not change with governments or with fashion, and in many ways they are immutable. Secondly, I have learnt that if I make something that the customers—I use the word "customers" advisedly and not the word "consumers"—judge to be of bad value, in the first place they will not buy it and, secondly, it will be of bad value just because they say so, for they are the judge and jury.
I make these rather simplistic points merely to set the scene and to insist that this is not a Bill to change commercial behaviour. As I see it, it is a Bill to help the customers and to guide the courts in the tiny fraction of the billions of transactions that finally end up before a magistrate or a judge.

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The Government's press statement which launched the Bill had this to say:
"It will be a major gain for consumers and a real opportunity for British industry".
The part about the opportunity for industry quite frankly is rubbish. Industry has gone along with this legislation and in many cases welcomes it, but I do not think we can say that it is a real opportunity. I think that even the first part about the major gain for consumers errs somewhat on the side of hyperbole, for we know that consumer organisations have been very active during the preparation of this Bill. The only danger that I can foresee is that it will be oversold to the public, who will be led to expect a new order of things—some new Jerusalem—and that from now on manufacturers will be exposed as the baddies on whom vengeance can be wreaked. I hope—and so far I am pleased with the result—that noble Lords on the Benches opposite by their rhetoric will not encourage any such misconception.
Strict liability, which Part I of this Bill introduces, will of course make it easier for an unhappy customer to obtain redress when he does not have to prove negligence, but I think we should remember that during the past few years the courts have been moving toward inferring negligence on the part of the supplier, who has had to rebut this accusation when circumstances seemed to point to a lack of care. I want to put it to your Lordships that as it is being used today the law has already moved a quite long way toward strict liability. That is why I insist that Part I of this Bill is not a step change but a thoroughly sensible advance along a path that is already familiar. I share the Government's view and, I am happy to say, the view of the Opposition and the Community that it is manufacturers who are in the best position to carry the cost of defective goods. They can and do insure their risk.
From time to time it has been suggested, though I think not today in this House, that premiums on risk business will be in danger of multiplying so that smaller companies will be unable to afford them. My information from the insurance profession is that this is not likely to be so. Premiums have already increased enormously for two reasons, neither of which is connected with this Bill. The first is because two years ago risk insurance had a very bad year and it will take some time to recover. In the meantime reinsurance is extremely difficult to obtain, though not impossible. The second reason has already been referred to and concerns what is happening in the United States, where fantastic sums are being awarded by the courts and where there is this awful business of lawyers who are prepared to take a share in the boodle when they win and take nothing when they do not. I hope that the legal profession will create its own police force to see that such practices do not take root in this country. We do not want them.
That leads me to my last point on Part I. I am confident that in no circumstances will the Government allow themselves to be driven off the inclusion of the crucial Clause 4(1)(e); namely, the development risk defence. Abandonment of that clause would result in premiums becoming prohibitively high, and with respect I think this point
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has not been mentioned enough yet on the other side of the House. That is the information that I have received, and no doubt we shall be discussing this matter further. In my opinion—and I believe I can assure the House that I am speaking for the whole of manufacturing industry—such a situation could put much of this legislation in jeopardy and I beg the Government not to budge.
I have said that I fully support Part I of this Bill, but I have to admit to my noble friend that I am somewhat less happy about Part II. I do not oppose it but I am puzzled by it in certain ways. I am aware that in the White Paper the Government said they wanted to introduce a general duty on all suppliers to ensure that the goods they supply are safe in accordance with modern standards of safety. That is admirable, but does it have to follow that failure to stick to that general duty automatically makes it a crime, because the duty is laid upon them by the Government? I do not know. I am no lawyer; I merely ask for help from my noble friend, from the noble and learned Lords who will be speaking later as well as from the noble Baroness, Lady Nicol, with whom I have worked closely in a Select Committee. I am sorry to have to say that she has now left us to go to agriculture because she became bored with sewage sludge! I ask the Minister to help me because among other things it seems to me that to put a new crime in Part II on to a new tort in Part I is a little like piling Pelion upon Ossa. I understand that as my noble friend Lord Beaverbrook was the last of us to leave school, he will deal with that question.
The Bill states:
"goods fail to comply with the general safety requirement if they are not reasonably safe having regard to all the circumstances".
As I am not a lawyer, I ask my noble friend whether or not he is able to give an assurance that with that instruction the courts will be able to turn the word "safety" into an absolute to enable them, if necessary, to send a man to gaol.
I have in mind also the case of a BMW motor car which has an anti-skid device fitted as standard. A BMW is in the medium to expensive range of cars. This device is not yet standard in a cheaper and smaller family car because it could not be fitted for the price. Given that the BMW is therefore safer, is it possible sometimes that safety is not absolute but is relative to price? Does that mean that sometimes a judge would have to find that a product was not safe enough considering its price? Would that not make it a relative thing?
My noble friend will readily perceive that I need more than a little help in order to support him 100 per cent. on Part II of the Bill. If my noble friend can point me on the straight and narrow path that leads to full support of the Government (and therefore to righteousness) I shall be forever in his debt.
5.32 p.m.
Lord Gallacher: My Lords, I should like to speak principally to Part III of the Bill entitled "Misleading Price Indications", which, in the vernacular of the trade, can be reduced to "bargain offers". This is an important part of the Bill. I am glad that it has already been welcomed on all sides of the House because,

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undoubtedly, the law is at present little understood and even less, enforced. Anything that abolishes that unhappy situation must be welcomed by traders and consumers alike. It is also a necessary field of action because bargain offers are now a permanent part of the retail scene.
Sales, with bargain offers, are no longer confined to two a year when retailers display previous buying errors in their windows for all the world to see. Price reductions are available in most shops all year round. Consumers look and even wait for price reductions. They know that if they wait until after the first month to buy a garment in a certain fashion store the price will be anything from £2 to £10 less. The public are aware that such bargains are available.
Given the growth of the merchandising technique, it is important that consumers should not be deceived. This is dealt with in Part III of the Bill. It must also be urged upon the Government that controls, whatever form they finally take, must be practicable. We cannot have trading standards officers journeying to the head offices of multiple retailers to check their buying-in prices of merchandise. Examination of invoices is the last thing that any retailer will normally allow to anyone, even members of his own family. The markup in retailing is the most jealously guarded secret of all. It is right and proper that it should continue to be so.
Consumers, retailers and local authorities have given guarded approval to Part III of the Bill as it stands. All three groups have reservations about the code of practice in Clause 25 which in some ways is at the heart of Part III. Consumers want its defence capability toned down. Retailers profess unhappiness despite three drafts. The local authorities, are concerned about the cost of enforcing the code.
Reference has already been made to the discussion in your Lordships' House some time ago about codes in general. We can draw a distinction between codes that have been drawn up by trade associations and those that have the imprimatur of government or the Director General of Fair Trading upon them.
Trade association codes suffer from the defect that in order to be effective one would need a closed shop of employers. This will never be achieved for two main reasons. Many traders would not wish to join their trade association and, equally, many people in the association would not wish to have them as members. The trade code will not therefore be observed by a large section of the trade from the outset. In addition, many traders of high repute take the view that their name is what matters. Consequently they are against codes as such.
However, a code of the type envisaged in Part III of the Bill can be given a general welcome. In view of its importance, there may be merit, even at this late stage, in the Government considering a working party to attempt an agreed draft (or at least the highest common factor of agreement) before the Secretary of State reaches a definite decision upon the code. I envisage this working party being pitched at not too high a level and one in which practical experience of retailing is the main qualification for participation.
As regards retailers, at least four representatives would be needed; one from textiles or clothing; one
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from furniture, bedding and floor coverings; one from footwear; and one able to speak on behalf of radio, television and electrical products, to include both brown and white goods. I should like to see at least three practical consumers with experience of the problem, and two trading standards officers serving on the working party. A civil servant might chair it but I enter the caveat here that the Civil Service contribution to the working party should be minimal, attempting to assess what can be agreed rather than indicating the difficulties being experienced with particular drafts. Perhaps the Minister would give consideration to that possibility, obviously not this evening, but as this Bill progresses through your Lordships' House.
Will the Minister tell us who, other than the Secretary of State, can issue a code to which reference is made in Clause 25(1)? This is a matter of some concern. In the main, codes issued by the Secretary of State or the Director General of Fair Trading are acceptable. However, if the ability to issue codes is to go wider, we should like some indication of those persons to be so empowered.
I do not believe that many tears will be shed over the demise of Section 11 of the 1968 Trade Descriptions Act. Its demise is understandable in the light of what is now proposed in Part III. The 1968 Act, as a whole, is still a valuable consumer protection measure and deserves to be recognised as such. No one will be sad about the disappearance of the Price Marking (Bargain Offers) Order 1979. It was little understood, and more honoured by disclaimers than observers.
We are grateful to the noble and learned Lord, the Lord Advocate, for the assurances he gave us about what will happen following the repeal of the Trade Descriptions Act 1972. The possibility of being able to continue to make it clear that goods are made in Britain is welcome. That assurance will go some way towards helping retailers and British manufacturers.
I should like to ask the Minister what the import of Clause 27(2)(a) is. In what circumstances might the Secretary of State, wholly or partly, transfer any duty of a weights and measures authority to another person? What other person is contemplated here?
I should also like to ask to what extent, in the Government's judgment, Parts II and III of the Bill are in accordance with EC proposals, either definitive or formative. I raise that point because should your Lordships' House and the other place pass this measure, we should seek to avoid too soon thereafter having to amend it at the behest of the EC. If we are to see how the Bill works in practice, a number of years must pass before it is changed.
There is no reference in the Bill or the code to the use of coupons to reduce prices, mainly in the food trade. That is a device increasingly used by manufacturers of branded goods to counter the success of own brands promoted by large retailers. As we are well aware, own brands are often made by manufacturers of brand leaders which, in an attempt to retain public patronage for the brand leader, sometimes offer coupons which give the consumer something off the price. The exercise is an unexpected spin-off from the abolition of retail price maintenance.

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Coupons are disliked by consumers' organisations and by retailers, for different reasons. Consumers would prefer to see the manufacturers' recommended price or the recommended retail price of branded goods made known and then reduced rather than the use of the device of coupons. At present, consumers have no means of knowing what that price is. It does not appear on the pack, although it may appear on the shelf. In the days of RPM, packs carried the price and consumers knew what the prices were.
Retailers dislike handling coupons for a number of reasons, not least the delays they cause at check-outs even if short-run sales increase as a result. It also disturbs special promotion schemes which retailers frequently run these days.
The effect of coupons on sales of products in the long term is unknown. Consumers do not know whether prices have been advanced to take account of coupon discounts. The coupon sometimes relates to a future purchase or to a size of the goods larger than the consumer wants; so to that extent, it inhibits choice. Is the Minister prepared to say anything about coupon trading tonight or at some later stage, and whether it will be covered in the code, if not in the Bill?
A general welcome has been given to the Bill. That must be a source of great gratification to the Government. I am, however, always wary of the short agenda. I am equally wary of too great a measure of accord on any issue. Nevertheless, I hope that the Bill will pass speedily without too much discord. I am glad that the noble Lord leading for Her Majesty's Opposition, gave the assurance that he did because I think that it was fully merited.
5.43 p.m.
Lord Airedale: My Lords, I did not know that the Government Chief Whip was going to invite me to take part in this debate. However, I should not like to refuse his kind invitation. In the circumstances, I shall not trespass long upon your Lordships' time. I am grateful to my noble friend Lady Burton for saying that she hoped that we would discuss this matter not upon party lines but always bearing in mind the consumers' interest. I take comfort from that. It makes it easier for me to make the few remarks upon which I now propose to embark.
Strict liability must be contrary to natural justice. I do not see how anyone could argue otherwise. That matter was put much better than I could put it by Lord Chief Justice Goddard when he said that the idea seemed to be gaining ground that when anybody gets injured somebody else has to be found and made to pay for it. But that, he said, was no part of the law of England. Of course, in his time it was not.
I can see that there is an element of rough justice here. A vast multinational corporation manufacturing motor cars can well afford to compensate the odd person who is injured by a defective car. At the end of the year, it will not notice the item in its annual accounts. If it starts to become embarrassed by such claims, it is perhaps a good piece of rough justice that it should pay without people having to prove negligence every time. But we are not just thinking about multinational corporations; we are thinking
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about the village carpenter and the small firm. When we consider their position under the Bill, justice looks rather more rough.
It is said that they can insure. I should like to join the noble Earl, Lord De La Warr, in his misgivings about insurance. The Bill makes no provision for any limited liability on claims. I make a plea to the Government: before the Committee stage, send a broker around Lloyd's to see whether he can obtain any insurance cover for unlimited liability. I shall be rather surprised if the answer is "Yes". Whether that be true or not, the one thing we may be sure of is that, if he can obtain it, the producer will pass on insurance costs to the consumer in the price of the goods.
The consumer is also a contributor to national insurance. I do not believe that at the end of the year it will make much difference to the consumer whether he pays a small contribution to the victims of a pure accident through increased prices for the goods or through a small increase in his national insurance contributions. I have no doubt that in a civilised, sophisticated society, the proper place for the injured person to look for his compensation is to national insurance.
Why am I not going to vote against the Second Reading of this Bill? I recognise that we belong to a good club. It has sent us a directive which I do not like, but one does not resign from a good club just because one does not like one of the rules. I presume that one does not resign from the Athenaeum merely because it does not serve kippers for breakfast. I do not propose to vote against the Second Reading, but your Lordships will realise that, like Gallio when St. Paul came before him, I care for none of these things.
5.48 p.m.
Lord Stanley of Alderley: My Lords, it will not have escaped your Lordships' notice that according to Clause 2(4) agricultural products are excluded from the Bill. Indeed, my noble and learned friend the Lord Advocate said that no other member state has made agricultural produce liable. It is important that farmers in this country are not unfairly dealt with visá-vis their continental competitors, and they are competitors.
The noble Lord, Lord Williams, did not approve of that exception. In my opinion, he took a strange view in opposing the "state of the art" derogation by saying that if your Lordships did not amend the provision, we should be almost alone in the Community by not so doing. Something about "what is sauce for the goose" comes to my mind, because the approach to the problem by the noble Lord, Lord Williams, is not consistent. If the noble Lord wants the United Kingdom to be in line with other members of the Community in regard to the "state of the art" derogation, then surely we must be in line with other members of the Community in regard to agricultural produce, because they all take the same view as the United Kingdom Government.
I will not at this stage bore your Lordships with the many reasons why I happen to believe this particular decision to be right—and I can hear your Lordships saying, "He would, wouldn't he"—but I would warn your Lordships that, if you feel that this is unjust and farmer feather-bedding, there are no fewer than 19

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Acts of Parliament that control and regulate agricultural produce. I sincerely hope that your Lordships will not force me to go into detail at Committee stage on all these Acts of Parliament, otherwise I can see a repeat of the Wildlife and Countryside Act 1981.
However, I would ask the noble Lord, Lord Allen, who was worried about this provision, to look up two meaures. He mentioned milk. Perhaps he would like to look up the Milk and Dairy Regulations 1959. He was also worried about apples. Perhaps he would like to look up the Grading of Horticultural Produce (Amendment) Regulations 1973, just as a start.
I would ask your Lordships before Committee stage to look in particular at the Sale of Goods Act 1979, which demands that produce should be of marketable quality. Not only does the Bill demand that but, as my noble friend Lord De La Warr said, the customer will not buy it unless one actually conforms to the legislation.
Also, if anyone is still concerned about residues, particularly chemical ones in crops—I think the noble Lord, Lord Williams, was, and I am not sure that the noble Lord, Lord Allen, was not—may I ask noble Lords to refer to the Food and Environmental Protection Act 1985, which was discussed in considerable detail in your Lordships' House with, I think, a good deal of merit.
I shall say no more, and hope only that your Lordships will not force me to delay the House when, in Committee, defending Clause 2(4), for, like other Members of your Lordships' House, I wish the Bill a speedy passage on to the statute book.
5.52 p.m.
Baroness Fisher of Rednal: My Lords, under existing legislation, consumer rights in relation to defective products can be exercised only against the seller of the goods. There is no right of action at present against the manufacturer or importer unless negligence can be shown. We therefore welcome the provisions of the Bill, which I think are a significant step forward in that consumers will have the right of action against the manufacturer or the importer. However, this will be of little substance and little assistance if the manufacturer or importer is himself of no substance; in other words, if he has no money.
It should not be assumed, as the noble Lord, Lord Airedale, said, that all manufacturers or importers are multinational organisations. Indeed, it is true to say that the Government are doing their very best to encourage free enterprise and small businesses. It could happen that, in the process of setting up a small business, on occasion one fails perhaps to provide all the safety that is necessary in the product that one is manufacturing. Therefore I think that the insurance aspect of the Bill has to be considered very seriously. I am not convinced in my own mind that the noble Earl was entirely correct in saying that the premiums would be so massive that they would put people out of business. I do not think that would be the case.
Earl De La Warr: My Lords, I made the point that it would put small people out of business.
Baroness Fisher of Rednal: My Lords, I think that small businesses will be making a small amount of
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produce, and therefore their chances of reliability will be smaller. We all have to agree, if we drive motor cars, that whether or not we can afford to pay the insurance we have to pay it to keep within the law. Perhaps one can draw a parallel at that level. I suppose that is why some people drive Minis and some people drive Rolls-Royces.
I understand that certain problems regarding the existing legislation have arisen with trading standards officers when a breach of the law has been suspected. It seems not very clear even from this legislation whether a trading standards officer has any jurisdiction outside his own local authority. Perhaps I may give an example. It has been discovered in the Birmingham area that allegedly dangerous remould tyres have been put on sale in Birmingham. Trading standards officers have acted at that level and the tyres have been removed from sale in Birmingham. Here there is no problem because they have now been withdrawn.
However, the manufacturer of the tyres has a registered office in Cambridge, and the tyres are manufactured in Lincoln. Therefore who can take action in relation to the registered office and the production? Indeed, does every other local authority need to take individual action when one local authority finds there is a breach? We may have to look at this a little more seriously as we go through the Bill. As my noble friend Lord Williams said, the effective enforcement of the safety measures in the Bill obviously is of the most crucial importance. There is no use talking about them unless we act on them.
As to misleading prices, I always find that it is a great game to discover what is the best offer if I look in the evening Standard. There are all kinds of shops that sell electrical goods, televisions and tape recorders. Although there may be five pages of advertising one never finds in those five pages an advertisement for one shop selling something that another shop is selling, so one cannot compare the prices. One cannot think: "I will go to so-and-so because it is cheaper than so-and-so, and is a better offer." Although they are all selling the same kind of goods, they are not selling goods made by the same manufacturer, so one cannot make the comparison just by buying an evening paper. One has to trail round the shops to do that.
It would appear from what other noble Lords have said that the new code of practice will be as unworkable as the previous one. If there is to be a code of practice that is vague and complicated, obviously it will make things more difficult for the consumer but it might also lead to massive abuse by disreputable traders. Perhaps I may refer to the introduction of the general safety requirement. That will mean that all new—and I emphasise "new"—consumer goods will be subject to the law and must comply with modern safety standards.
I am never very clear how far we have gone with legislation. I should like to raise a point regarding the seating that is provided in coaches and aircraft. Obviously, that does not concern new consumer goods, and it is not an individual consumer protection; but it is a joint consumer protection for all the people who travel in coaches and aircraft. I am not very sure how far we have progressed in that legislation and whether it would come under what we call new consumer goods.

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I understand the fire regulations regarding the materials used in furniture manufacture. There is no need for the noble Lord to reply to this point tonight. He can let me know the answer at a later date. I do not know whether I am completely off course and the point is already catered for. I think that the law we have at the present moment gives ample scope to the unscrupulous trader. I say this very advisedly. I hope this matter will be sorted out in the legislation because many of the unscrupulous traders are dealing with shipments from far seas and bringing in what we call imported novelties or toys. At this time of the year our attention is drawn to the danger of toys. Only last week I saw an example of these toys. It was some kind of a weird snake. As it was pressed, it moved along. Somebody said to me that it was filled with Taiwan water. I do not know how safe Taiwan water is but no doubt it had been imported into this country—or perhaps crawled into this country would be a better expression. I hope that these articles will not be imported in the future.
There is a duty to supply safe goods. That duty should rest with the first supplier, and that must be the manufacturer or the importer if the products are entering this country. There should be much stricter safety requirements at the import level. We know that many toys which are dangerous can be found in many car boot sales, and so on. Very often it is difficult for trading standards officials to track them down. Therefore there must be stricter controls at the port of entry. The 48-hour rule is not at all satisfactory. If it were 48 hours in the working week that would have some advantage, but 48 hours just baldly is not satisfactory, especially with imported goods.
I was a Member of the European Parliament. I was a representative from the South. I took part in the proceedings on the Consumer Safety Bill when I was there in 1976. I was a Member until direct elections. I argued then and I argue today that I cannot see that it is morally right that we permit goods of lower safety standards to be manufactured in the EC and then sold abroad. If it is not good enough for the safety standards of the people of the EC, why should we accept that it is good enough for other people outside? I never understood it, and I argued it when we were dealing with this matter at the European Parliament. I may be wrong, and I may not have read the Bill correctly; but I think that is still enshrined in it.
I think I ought to refer to two other very small points. The National Pharmaceutical Association raised a particular difficulty regarding the dispensing pharmacist. Now, under the new medical regulations, they have to put their name on the product. The pharmacist's name must be on the article with the directions for use. It is not a correct interpretation to say that they are responsible because they have put their name on the product, and have held themselves out as the producer. It would be possible quite easily to identify the true manufacturer of the product. Several noble Lords have spoken about the exclusion of primary game and agricultural products. I come from that famous city called Birmingham, and there is a truly garden suburb in Birmingham which is called Cadbury Brothers. They are involved in the manufacture of dairy product chocolates. Along with
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other people who are involved in the production of products that take in agricultural ingredients, they are also concerned that the processor of the products may be liable. I understand that the food and drink industries in Germany, Belgium, the Netherlands and Denmark all take the view that the exemption for primary agricultural products should be withdrawn.
In conclusion, because I belong to the Buy British campaign, or because I feel so concerned about British manufacturing, I feel that the consumer should have available to him information relating to the place of manufacture of the goods. If we want to support home manufacture, we should be enabled to do so. I sincerely hope that nothing in this Bill will prevent us from being able to do that.
6.7 p.m.
Lord Sainsbury: My Lords, my maiden speech on the 14th November 1962 was on the subject of consumer protection. I declared an interest then as I was chairman of the family firm bearing my name. With the passage of time I am no longer chairman and the firm is no longer a family one but a plc; but I still declare an interest, though a rather more remote one. On that occasion we were discussing the Molony Committee Report. A leading article in the Financial Times at that time, commenting on the report, stated:
"It is plainly right to stress continually that the consumers' hand cannot be held all the time and the world cannot be legislated to perfection".
However, that does not mean that I do not welcome the Bill before your Lordships' House today as a considerable improvement on the unwieldy existing legislation. I also believe there is need to ensure greater consumer safety. The Consumers Association says:
"Hardly a week goes by without some warning about products which have been found to be dangerous, sometimes lethal. Toys, tools, novelties and furniture are just a few of the wide range of goods which have been involved in recent safety scares".
The Bill provides a general safety requirement. It applies to all consumer goods. It makes it an offence to sell goods that do not comply with the general safety requirement. This, in my opinion, is a progressive move.
On product liability, I recall the debate we had some six years ago, in which I participated. Since then, at long last, some progress has been made by the adoption in July last year of the EC Directive on Product Liability. The directive, however, gives member states of the EC certain discretion in its implementation.
The Government have included in the Bill a development risk defence for manufacturers. This may protect them from having to pay out, in future, compensation for thalidomide-type tragedies. This decision has not pleased the consumer organisations but no doubt it has been welcomed by the CBI.
The food and drinks industries in the United Kingdom are very concerned that the proposed legislation on product liability does not include primary agricultural products. For example, canners and freezers feel that they might be held responsible for the presence of pesticide residues in manufactured foods, when they have no control over the prime producers who may misuse pesticides, either accidentally, negligently or wilfully.

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The Department of Trade and Industry has been told in strong terms that the situation would lead to much uncertainty, illogicality and unfairness. As derogation is permitted under the directive the position could he easily rectified. In fact the food and drink industries in Germany, Belgium, the Netherlands and Denmark all take the view that the exemption for primary agricultural products should be withdrawn. The noble Lord, Lord Mottistone, would have stated the case on behalf of the industries concerned but, unfortunately, he is unable to be present this afternoon.
Lord Stanley of Alderley: My Lords, will the noble Lord give way before he leaves that point? I hope that before we come to the Committee stage the noble Lord will make particular reference to the Food and Environment Protection Act and all the other Acts that I quoted in my speech because he will find that the point he mentioned about chemical residues is covered.
Lord Sainsbury: My Lords, I am sure that the noble Lord will read Hansard tomorrow and pick up the point.
I turn now to Part III of the Bill, "Misleading Price Indications" and the proposed code of practice. I should like to preface my remarks by stating quite clearly that responsible retailers welcome and support the general duty not to give misleading price indications. There are bound to be some difficulties in applying this duty. However, I am sure that it will in time provide a more flexible and coherent basis on which to control this matter.
My difficulties lie with the code of practice. This in part perpetuates the approach adopted through the bargain offers order of regulating price indications in detail. The bargain offers order has shown how difficult it is to intervene in this area. In 1981 the Director of Fair Trading found the order to be complex and ambiguous. In 1984 an interdepartmental working party concluded that despite its merits the order had,
"not worked adequately and has in fact led to new problems".
As an alternative the working party proposed a general prohibition on false and misleading price claims, supported by a code of practice.
The new proposals were included in the White Paper Lifting the Burden, presumably on the basis that they offered a simplification of the existing legislation. There is a nice irony here. Section 11 of the Trade Descriptions Act 1968, consists of three subsections. The bargain offers order consists of seven articles. They are to be replaced by Part III of the Consumer Protection Bill which contains seven clauses, consisting of 32 subsections. There is also to be, in addition, a 22-page code of practice, consisting of four parts, 57 sub-clauses and two appendices. This hardly seems a process of simplification or deregulation.
Despite the frequent revisions, retailers, and I believe enforcement authorities and consumers, remain concerned that the draft code is unworkable. It contains a mixture of specific requirements, or "rules" and rather vague guidance. Moreover, each redraft—and this is now the third revision—has
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contained new anomalies, ambiguities and artificialities.
It certainly does not meet the criteria set by the noble Lord, Lord Lucas of Chilworth, in answer to a Parliamentary Question in February 1985, that:
"A sufficiently clear and precise code of practice",
should be established before the details of the primary legislation are finalised.
I cannot see why it is not possible to support the general duty by a few specific requirements which are thought necessary to control real abuses. These could be included in the Bill and in regulations. The code could then stand as true guidance, worked out in conjunction with retail organisations, as the contemporary understanding of the spirit of the general duty. If this approach did not work the Bill contains ample power—some might think too ample—for the Secretary of State to issue new regulations and to change the code.
In conclusion, I wish the main provisions of the Bill well, but I hope that the Bill will be improved in the course of its passage through your Lordships' House.
6.20 p.m.
Baroness Elliot of Harwood: My Lords, I too should like to congratulate the Government, and in particular the Minister for the way in which he has presented this Bill to us, and for the fact that it is a Bill which we can all support. Different points of view have been expressed in this debate and various changes and alterations have been suggested. However, on the whole all those who have spoken—and I add my support—think that the Bill is an important one, a good one, and we must ensure that it gets through this House.
My interest is quite a special one as I was the first chairman of the first Consumer Council set up more than 20 years ago—I cannot remember the exact date—by the then Macmillan Government. That is when I first became involved; but that does not bear comparison to the influence and effect that the noble Baroness, Lady Burton, has had on consumer affairs. No one has worked harder and done more than she has to bring this matter before the whole country. I feel she must be congratulated for having done more than anyone to try to get consumer affairs right into the heart of our parliamentary system.
Twenty or more years ago the Consumers Association was a very small affair. It has now grown to enormous proportions, having more than 800,000 members. It is vitally important, and I think we should be advised very often by what the Consumers Association puts out in its admirable publications.
I agree with the three main principles behind this Bill. First, product liability, making the producer liable for the damage caused by any defect in the product. Secondly, the great importance of safety requirements, making it an offence to supply unsafe goods. Thirdly, giving misleading descriptions and price indications.
The producer of goods on sale is generally the manufacturer or importer who is now made responsible for goods sold. Considering that importers come from all over the world, not only Europe, the

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importer is responsible and must see to the safety and the accuracy of the description of the imported article. I think that our regulations should be the same as those of other European countries like France, Belgium, Luxembourg or Germany.
I should like to raise one or two queries about the regulations, which other people have also mentioned, and which I am sure the Minister can answer. I had queried in my mind why agricultural produce was left out of the compensatory regulations, but the noble Lord, Lord Stanley, has given me the answer: namely, that it is already covered by a great number of Bills. It is an important point. There was also reference to industrial processing. What exactly does that mean? Does it include pre-packed food as well as fresh food? "Any foodstuffs" is a very wide term. What happens if food is contaminated by outside events, as mentioned by the noble Lord, Lord Allen, when he spoke of the thalidomide and Chernobyl disasters? These matters are vitally important and I think we must face up to them.
I agree that the question of pesticides used in agriculture should be carefully monitored. I believe that only yesterday a certain number of pesticides were forbidden, and I am sure for a very good reason.
Under the Bill safety is stressed, quite rightly, as regards obvious items like children's toys and equipment. However, secondhand goods seem to be excluded. What about expensive secondhand goods like cookers, electric fitments or motor cars? From the safety angle, these should be included, otherwise they should not be sold.
The law enforcement officers, who will be responsible to the consumers and county council associations under which they operate, are asked to see, inspect and test goods. This will mean much more work and need many more people. Will the county councils be helped to provide more trained inspectors? That is a query which, I am sure, will be raised by many county councils.
It seems that the code of practice, which many noble Lords have mentioned, should be universal and have the same status today in our country as the Highway Code. The code of practice is enormously important, and many of your Lordships who have spoken know much more about it than I do. I should like to support Lord Gallacher's suggestion: that there should be a committee formed, or very careful consideration given to the many interests involved in the code of practice. I think the matter should be very carefully considered, not only by ourselves but by the experts who are working in the field where the code of practice is applicable.
The Retail Consortium, from which I am sure many of your Lordships have received letters, considers that the present arrangements are not clear enough and are not understood by the ordinary person. It is extremely important that we should get that right, because the code of practice is of tremendous importance in the Bill and in the protection of the consumer.
The question of misleading price indications is also extremely important. That arises in most of our lives almost every time we engage in large buying. One is always making comparisons between prices. I think
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that it is very important and I am therefore all in favour of a ban on misleading prices. The present law of 28 days for covering price offers should remain, unless it can be improved upon.
I am sure that we have all received a great deal of information from many organisations and that many people will be asking the Minister these questions. The Bill is badly needed. In Committee amendments will be put forward and, like many other speakers this afternoon, I hope the Government will treat the Bill not as a party political matter but as one which affects us all. We all want it to be a success. It is not a party Bill; it is a Bill which we all wish to succeed, and I support it.
6.28 p.m.
Lord Graham of Edmonton: My Lords, I begin, like every speaker in this debate, by thanking the Minister most sincerely for the very clear manner in which he outlined what we are about in this Second Reading and later stages of the Bill. I follow the noble Baroness, Lady Elliot who has a high reputation in these matters.
I recently attended the annual conference of the Association of British Travel Agents. The House will be sorry to learn that the association passed almost overwhelmingly a resolution that consumerism has gone far enough. Certainly, in this context, travel agents would be out on a limb. We are almost unanimous in this House, on both sides and from all sections, in believing that however far consumerism has gone there are always other improvements that can be made.
The noble Baroness, Lady Burton, reminded us of how many times moves have been made—in 1962, in 1972 and in 1982. But, always, there has been the slight regret that matters have not gone far enough. When the Bill is on the statute book, those of us who support it will say that it is a pity that we did not get a little more out of it. The Bill certainly has the support of the Government and the Opposition parties.
Those Members of your Lordships' House who, like myself, are interested in these matters, will have received briefs from a range of organisations—for example, the Retail Consortium, the enforcing authorities, the National Consumer Council, the Consumers Association and, only this morning, the Pharmaceutical Society of Great Britain and the Association of British Insurers—and will know that all of them welcome the Bill but wish to enter caveats and reservations about certain parts of it.
As is often the case in matters of this kind, I declare a direct interest and association with the Co-operative movement. The Co-operative movement can speak with some experience and authority on consumer matters, for it has expanded not only horizontally, but also vertically. We are the largest farmers in the country. We are also very much involved in the manufacturing and processing aspects. More than £5 billion is taken over the counters of Co-operative shops every year. Therefore, the Co-operative movement has an interest in many parts of the Bill. The movement has been interested in, and grateful for, clarification on certain matters prior to the Bill reaching this stage.

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One concern is product liability. We understand that a retail co-operative society will not be taken as the producer of a product which is clearly marked as having been produced by the Co-operative Wholesale Society. That is a very important point. Clause 2(3)(a) provides that a subsequent supplier, such as a retailer, can absolve himself of liability by identifying the producer of a product—the "own brander" or the Community importer—whether or not that producer is still in existence. That is a great relief, I imagine, to retailers. It is a major clarification that we welcome.
As has already been said, Second Reading is not the Committee stage. We shall be able to speak at length on the detailed ways in which we want to improve various aspects of the Bill. However, as has been made clear, we need to note that in any interpretation of Article 3.3 by the Department, the retailer may be deemed to be the producer where the manufacturer, supplier or importer, cannot be identified by virtue of the fact that he is no longer in business. I should like the Minister to take that point on board, and if he is unable to deal with it when he winds up ask him at least to bear in mind that we shall come back to it in Committee.
I ask that either tonight or later we have some clarification as regards the situation where the primary importer of a product is outside the United Kingdom but within the EC. In those circumstances, a retailer selling such a product in the United Kingdom might take the least line of resistance for the initiation of legal action if the producer—that is, the importer—is, for instance, in France. In those circumstances retailers may be subjected to civil actions taken as the first step in order to reach the producer. We shall want clarification from the Minister in respect of that point.
Comments have been made about what is meant by processing. As regards the exemption for primary agricultural products, I noted very carefully the defence of the Bill by the noble Lord, Lord Stanley. However, other noble Lords have raised the recent indication of the Government's concern about this matter, because only last week in another place the junior Minister for Agriculture, Mr. Donald Thompson, announced a pesticide ban following similar steps in the United States. At this stage I simply raise the point. I am sure that the Minister will understand that in Committee we shall need to be satisfied that the exemption is satisfactory so far as the consumer is concerned.
Reference has been made to the manner in which enforcement can be carried through. The House will understand that the Explanatory and Financial Memorandum to the Bill indicates that there will not be any implications for public expenditure or public service manpower. The Association of County Councils tells me that this is, at best, misleading, and that it would prefer to say that it is simply not true. One has only to look at current staffing levels, not in a particular council department, but in any council department, to realise that there is no fat available at all. Every council department is under severe strain. Indeed, that is how the Government want it; they want the situation to be very tight.
The Minister must tell us in his reply that he believes that no more work will be laid upon local councils, that there will be no need for more enforcement
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officers and that the existing enforcement officers will not need to do any more work. If, however, they are to do more work in some directions, the Minister should identify those of their present duties that will have to be neglected. In my view, the Association of County Councils has understood the situation correctly. It anticipates a considerable demand for advice, not only to the consumer but also to the trader. The trader needs to understand the rights of the consumer. The consumer advice services and the enforcement officers will need a great deal of support as regards that aspect.
Points have been made concerning the inclusion of the state of the art defence. I shook my head when the noble Earl, Lord De La Warr, said that this would be an enormous cost. I am not arguing whether or not it should be included, but the noble Earl should be aware that the Association of British Insurers tells me that, in the longer term, insurance premium rating levels will depend to some extent upon whether the introduction of strict liability leads to improved product quality and presentation and hence to fewer accidents caused by unsafe products. It goes on to say that, in its view, insurance companies are confident that insurance cover for liability under the new legislation will be available for current limits of indemnity at premium levels which will have only a marginal effect on the cost of production. I shall give way to the noble Earl.
Earl De La Warr: My Lords, I am much obliged to the noble Lord. Did not the association also express that view on the assumption that the Bill would remain as it is, with this particular defence still included?
Lord Graham of Edmonton: No, my Lords, with respect, it is arguing that if the defence were taken out and one then had to seek insurance cover for the liability, it does not see that as a punitive on-cost. My noble friend Lord Williams pointed out that it was an increase but said that if it was an additional cost which had to be borne by the consumer, then so be it.
I do not intend to pursue many of the other points which I have noted except to reinforce that made by my noble friend Lady Fisher concerning the position of local authorities. We have the situation under consumer safety, and we have the situation under Clause 14. However, there is the question of compensation. My noble friend pointed out that in that area it is likely to be almost impossible for local authorities to carry out their responsibilities. In fact, it may well lead to a number of local authorities deciding not to be good enforcing officers if, by taking an action which is subsequently proven to be injurious to the importer, they themselves are going to be liable for compensation.
I conclude, as many have, by giving the Ministers who will be taking the Bill through the House our assurance that it will not be delayed. But the points that I and others have raised indicate that we shall have an interesting and, I hope, fruitful and successful Committee stage.
6.40 p.m.
Lord Young of Dartington: My Lords, I should like to join in the congratulations that have been given to the Government for introducing this Bill. I particularly

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subscribe to what has already been said by the noble Baroness Lady Burton, and the noble Lord, Lord Sainsbury, sitting directly in front of me. The Consumers Association, of which I have the honour to be the president, has been compaigning for many years in large part for just such a reform as this. That association is delighted that the Bill has been introduced, although of course it has reservations on points of detail, which have probably already been drawn to the attention of many noble Lords and will be so again before this Bill reaches the statute book. I was also chairman of the National Consumer Council, and that body has likewise been campaigning for the very reforms contained in this Bill.
I was pleased that the noble Baroness, Lady Elliot, spoke as she did about the Consumers Association and about the Bill itself. The noble Baroness has been a doughty champion of the consumer over many years since the first Consumer Council was set up. Unfortunately it had a very short life, but it was a distinguished life under her guidance and that of other people who stand high in the regard of people now in the councils of the Consumers Association and other bodies.
It is somewhat remarkable that almost the only objection that has been levelled against this Bill has been on a matter of rather high principle. There was a reference to natural justice. The noble and learned Lord who is to speak after me may have something to say on that subject. He is certainly a great deal more expert than I am. In so far as I understand it, there are many different opinions about what natural justice consists of. Perhaps I may say from my possibly simple-minded viewpoint that it is not in accord with natural justice, and could not be, if manufacturers of products, when presenting those products for consumption on the market, do not assure themselves and consumers that the products for which they are responsible are safe. If they are not safe and do injury to people because of a lack of safety, or a faulty design, then it seems to me that it is naturally just that the manufacturers should be responsible.
There is a further question about what defences should be available, but at least I hope we would all agree that there should be a presumption in these cases that manufacturers ought to be responsible for the quality (so far as safety is concerned and in other respects) of the products they put on the market. That apart, I think that remarkably there has been a general agreement that this Bill is what the public interest requires.
As for criticisms more of detail, there have been many, and I shall not go over them again. The Government will already know as well as anyone in this Chamber that a major debate is going to be at a later stage of this Bill about the good old state of the art defence—the development risks defence. I hope, although I fear that it is going to be in vain, that the Government may come to a different opinion about this and be prepared to give way when the amendments are produced, as they will be on this vital matter. I believe that if the Government continue to press the state of the art defence, a hole will be driven into the Bill which could be serious once it becomes law.
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The legalities have been touched on already, and will be in the debates that follow. I should like just to mention another point which has not been referred to so far, and that is about the consequences for consumers facing actions arising out of the Bill if this defence is retained in it. It is almost inevitable that this particular defence is one which will produce considerable costs. It is almost impossible for a manufacturer to make out this defence in full and convincing detail without a parade of expert witnesses and expert evidence of one kind or another, which is bound to be highly expensive to get.
The very fact that it is so expensive will be an ace—or could often be—not up the sleeve of a manufacturer but out on the table. Many consumers who might think that they have a proper right of action would be deterred because they know what the costs would be. One of the worst things that could happen to this Bill once it becomes an Act—as I hope it will speedily—is that there will be another thalidomide case. God forbid, but there might be. If there were, and the consumers took action and sued the manufacturers concerned and the case was rather long drawn-out—with public opinion firmly in favour of the victims, as in the thalidomide case—and then the action had to be settled because the consumers ran out of money and could not pursue it any further, that would be the worst possible advertisement for the Act. If it became a famous case it would almost certainly lead to the need for yet further legislation, and an undermining of all the good work that in this House and elsewhere in other places has been done on behalf of this Bill.
The only other point I want to make is about Part III, the part which deals with misleading information. This again is much to be welcomed in general, but again it is the question of defence which is the most cardinal question which needs to be raised, and will be raised later. Much is made in this part—and rightly up to a point—of the need for codes of practice, and the question is whether the right role is given to the proposed codes of practice. I fear that it definitely is not.
The example I want to try to put before your Lordships may make the point clearer. It comes from British Telecom and the considerable debate that there now is in some circles about what are called M-rates. Not all noble Lords may know what an M-rate is. That is one of the troubles because consumers do not know either. As many will know, what has happened is that British Telecom has found an important new source of revenue in premium calls. It is possible for contractors to provide information, and for the proceeds to be shared 50:50 between the contractor and British Telecom. Quite large numbers of contractors have been enrolled in that capacity, and all sorts of information services have been provided as a consequence. There has been much criticism. The major criticism has perhaps been that so many of the suppliers appear to have been offering pornographic services of one kind or another, and there does not appear to have been a decent control over the kind of people offering this sort of service.
Another criticism has been about the pricing provision. The premium calls are charged at the same rate as calls from the Republic of Ireland into the

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United Kingdom. That is the highest rate possible for any call in the British Isles. It is possible for the charged rate to be as much as 40p per minute in peak hours. When some of the services were first inaugurated they were advertised without any indication what the prices were and others were advertised as being at M-rates. I do not know what "M" stands for but it means what I said when I was speaking about the Republic of Ireland rates.
As a result of discussion and criticism, a code of practice has been drawn up in conjunction with the newly-formed trade association which has been set up to cover what are called "providers of telephone information and entertainment". The code of practice provides that the contractors should advertise the fact that their charges are at this very high rate, M-rate, but what has happened is that many contractors advertising the services have put in in very small type alongside their often quite attractive advertisements that these are the rates, but without explaining what the rates are and what they mean in concrete terms so that ordinary people can understand. In this case, the code of practice does not appear to have gone far enough and particularly has not provided that the contractors should, at the beginning of any call, explain what the charges will be so that people will know before they begin that if they stay long with a call their charges may be £11 or £15 for the single call they are making.
It is clear from this example that codes of practice could be drawn up. Even though they were under the supervision of the Government, it might be possible that what was required on the part of the contractor was not quite clear and in changing conditions in the market the code of practice could quickly go out of date. On a subject such as this it is difficult to lay down what a proper code of practice should be. In my submission it would be far better if the codes of practice were welcomed as guidelines, but the courts could go behind the codes of practice if that was the right thing to do to secure justice. The courts ought to be able to take account of the whole Act and the general intent of the legislation and not be bound, as provided in Part III, by the absolute defence given to contractors who abide by a code of practice that has been drawn up on their behalf but approved by the Government. This example I hope will make it clear how difficult it will be to rely as fully as the Government appear to be doing on codes of practice drawn up in conjunction with industrial interests.
I return to where I started. I join heartily with all those who have spoken on behalf of this Bill. Perhaps we are so strongly in its favour that some of us feel what a great pity it is that the Bill is not stronger in certain important respects. We hope that during the course of the debates the Government will, in responding to the warm all-party spirit that has been shown here today, show themselves to be reasonable in the concessions and changes they are prepared to accept.
6.54 p.m.
Lord Denning: My Lords, I, too, welcome this Bill and thank my noble and learned friend the Lord Advocate for the way he has introduced it. I sketch just for a moment how the law has developed in this field
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of product liability. In the last century, right up to the year 1932, the manufacturer who sent out goods for sale to all his customers was not liable for his negligence. Negligence had not then developed as a tort. The person who had been damaged by the defective article had to sue the seller of it by contract. He could not sue the manufacturer in negligence.
That was all altered by a case coming from the United States and developed judicially in this House in 1932, when a manufacturer of ginger beer bottles issued them throughout the country through the shops. One was bought in a shop in Scotland and handed to a friend who drank the ginger beer. Inside the bottle there was a snail. The lady who drank the ginger beer was rendered ill. According to the law as it then stood, the manufacturers were not liable even for their negligence. Two Law Lords said that was still the law, but the majority in a celebrated judgment developed this tort of negligence and manufacturers were made liable for negligence in sending out defective products. That is how the law developed and is the primary rule that the producer shall be liable for damage caused by a defect in his product. From 1932 onwards we had this law. In nearly every case the injured person succeeded against the manufacturer because if there was a defect prima facie the manufacturer was negligent and therefore liable.
Then there were the thalidomide cases: ladies took thalidomide to have a rest during pregnancy. They had deformed children. They sued the German or Swiss manufacturers through the courts here because this was a defective product which was made and distributed. They said: "But we were not negligent. We had been testing this beforehand on rats, mice and even on some ladies and there was never any trouble. As soon as we found any trouble we withdrew it".
There was a similar case later in the courts involving a product called Primados. It was the same sort of thing. The manufacturers had tested it as much as they could, they put it on the market and claimed that they were not negligent. If those cases had succeeded in negativing negligence they would have got away with it. The cases would have taken months and the expense would have been enormous in both of them. Thalidomide was settled; the defence was never proved; and the Primados case was settled as well.
Therefore we have this position, that in law, if the defendant can show he was not negligent, he gets away with it. It is that state of the law which should be altered. When a manufacturer sends out a defective product that injures people it is right that he should be liable and should not get away with it by saying "We were not negligent". The manufacturers should warrant the safety of the product they send out. That is what the Royal Commission of Lord Pearson over four of five years recommended—strict liability on the manufacturer.
That brings me to the directive. One can tell by the framing of it, and your Lordships will know, that it was statutorily approved unanimously by the representatives in Brussels when the directive was suggested. There was obviously no agreement between the Nine, nor perhaps when there were Twelve member states, about what the law should be. So they had this compromise, that they allowed each member state to decide for itself. Let me read the provisions of the

1039
directive that apply to both the points, both the agricultural point and the other point of the development risk. This quotation concerns the agricultural point:
"Whereas, since the exclusion of primary agricultural products and game from the scope of this Directive may be felt, in certain Member States, in view of what is expected for the protection of consumers, to restrict unduly such protection, it should be possible for a Member State to extend liability to such products;"
So that they say that member states can extend them to these agricultural products and fisheries, if they like. That is one point: to leave it to the member states to decide.
The other point about the defence I had better read in full from the directive:
"Whereas, for similar reasons, the possibility offered to a producer to free himself from liability if he proves that the state of scientific and technical knowledge at the time when he put the produce into circulation was not such as to enable the existence of a defect to be discovered may be felt in certain Member States to restrict unduly the protection of the consumer, whereas it should therefore be possible for a Member State to maintain in its legislation or to provide by new legislation that this exonerating circumstance is not admitted"—
and so forth. It can be done.
In each case it is quite clear that there was a difference of opinion between the member states as to what the law should be on this matter and they said that each member state, in a way, could decide for itself. We could decide for ourselves whether or no agricultural products and fisheries are to be exempt or whether this defence should be allowed to manufacturers. So each member state can decide for itself.
No doubt that will be subject to much discussion in this House at Committee stage. Let me just say that we get mention of fisheries in our own provisions, where it says:
"in respect of any defect in any game or agricultural produce if the only supply of the game or produce by that person to another was at a time when it had not undergone an industrial process".
If that kind of provision remains, it would give infinite scope for litigation and argument all the way through. It is difficult enough to know about agricultural produce but what is an industrial process? One of the strongest arguments about putting that in is that it is so vague and uncertain that it will give rise to all sorts of litigation. It would be better to have it out altogether.
Then, about this defence. There it is, the difference of opinion between member states. Are we to allow this defence of development risk which then will lead to all such arguments as did, and will, arise in the case of thalidomide and in Primados. Better get rid of all those arguments; better to have the strict liability if there is a defect which is proved to cause damage in the consumer or the customer.
Insurance is taking care of far more difficult positions than this. We need not trouble about the Americans with their exorbitant damages and the like. They have gone haywire about it with their contingency fees, their damages settled by juries and so forth. We need not worry about them. I do not think that Lord Pearson's commission worried, and I do not think that we should worry. The insurance market is well able to cover a risk of this kind. So, subject to those qualifications, I would welcome this Bill and
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look forward to the discussions which we shall have later on in Committee.
7.5 p.m.
Lord Clitheroe: My Lords, I have great hesitation in speaking after so many wise and learned noble Lords have spoken already this evening. The Bill before the House is a very important piece of legislation, and if and when enacted will affect many areas in a far-reaching way, not least the chemical industry, which is of particular interest to me. Indeed, I should declare an interest as a director of a company with substantial international chemical interests and activities.
I seem to be slightly lonely today beause there has been a great deal of talk, as one might say, on the issues of the consumer. Indeed, it is the consumer who is being attended to in this Bill today. But the general effect of this legislation will impose new and very heavy liabilities on manufacturers; and while it would be wrong to argue that there is no need for further protection for the consumer their is always a risk that in redressing a balance it is easy to over-compensate and to create another imbalance which is even more undesirable than the first.
I shall not burden your Lordships with a long dissertation on the situation in the United States, of which I have considerable experience. However, I can say that the scene there is now chaotic and heavily loaded aganst the producers; that insurance capacity is limited; that in some areas there is no capacity in existence and that the distortions—fortunately we do not have these distortions in this country—of their legal system are so great that their imbalance will just have to be corrected before long.
The effective cost to the consumer in that country is now apalling and the only gainer is the ambulance—chasing attorney. I do not suggest to your Lordships that the current Bill will have this effect but there are certain aspects of it which require careful scrutiny to ensure that the Bill achieves its objectives wihout creating undesirable effects. It is a very complicated Bill and is not made easier by the interrelation with the implementation of the European Community's directive.
For instance, it is implicit in the Bill that the product liability provisions extend to cover accidents in the workplace caused by defective products. That is not required by the directive and moreover would create unnecessary confusion due to the overlapping requirements of two pieces of primary UK legislation. In dealing with specific issues, I am afraid that foremost we come again to the importance of the legal defence concerning the state of the art of scientific and technical knowledge or the development risk defence, as it has now apparently become.
That is covered, as we know, in Clause 4(1)(e), and although the drafting of this simple paragraph is complex it is a vital part of the Bill if British industry is not to be inhibited from producing and marketing new and innovative products. Developing a new product inevitably carries a large number of commercial risks for the producer. If, in addition to those risks, he has to face unquantifiable liabilities and law suits arising from problems which could not have been foreseen at the time the product was sold, he will be unwilling to invest in research and development in the future.

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I can tell your Lordships that that is now happening in the United States. Our industries will suffer and the consumer will suffer, as indeed will the nation as a whole. Looked at in another way, if, after this legislation is enacted, the producer were not able to use the development risk defence, would he not be subject to the same kind of unreasonable liability that anyone suffers when retrospective legislation is introduced? There is always in your Lordships' House a deep and legitimate suspicion of retrospective legislation, where one cannot defend oneself by demonstrating that at the time an action was taken there was no reason to think it unlawful. If one cannot argue that defence, the situation seems to me intolerable. I cannot emphasise too strongly that the state of the art defence is absolutely essential and I am glad that the Bill includes that provision.
A second issue relates to the financial limits on liability. I have already touched on the circumstances with which industry is faced at the moment. Even with the inclusion of the state of the art defence, there will be many cases where the producer has no position from which he can defend his case. The increasing problems he is already faced with in obtaining insurance are growing rather than receding, and industry will face not only excessive premiums but also a serious shortage of capacity.
I know that runs contrary to what some of your Lordships have said today in talking about the insurance world; but I can only say from experience that the problem of running short of insurance capacity from a producer's point of view is horrendous. You cannot get it, no matter what premium you pay, and if you find the position is going to be one where you cannot get insurance the consumer will not be happy with that in any way at all. I suggest that adequate cover is not available even now, and that is before insurers have concerned themselves with the increased risks of strict product liability. I recognise there are practical difficulties, but some of those difficulties should perhaps be overcome and have been overcome in other countries.
I do not wish to extend the time I am taking, but I should like to touch on one further point; that is, that the Bill perhaps does not satisfactorily cover the concept of reasonableness. That is crucial to the viability of the Bill.
Lord Williams of Elvel: My Lords, I am sorry to interrupt the noble Lord, but did I hear him aright when he said that insurance cover was not available even under the present system?
Lord Clitheroe: My Lords, I think I said—certainly I intended to say—that adequate cover is not available even now. I repeat, "adequate cover"; and by that I mean cover that carries all the various steps. I am not an insurance expert, but you take various stages of risk and adequate coverage, I am told, is not available.
Perhaps I may refer to one other point. We do not know when the Bill is going to be implemented, but I would suggest that both industry and the insurance world need adequate time in which to get their act together. Documentation and recording systems, changes of terms of procurement and sales contracts are some of the things that have to be done by producers. Insurers must have time to prepare terms
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and conditions to address the new product liability regime in an orderly manner. It is difficult to believe that that can be achieved in under 12 months. Furthermore, if we implement this legislation substantially earlier than other member states of the Community we shall be putting ourselves in an undesirable competitive position. Would it be possible to time the implementation of at least Part I of this Bill to coincide with the requirements of the directive?
Finally, arising from the complexity of the Bill, I think it would be helpful, in view of the different effect it has on different industries, if Ministers would see fit to entertain further consultation during the further progress of the Bill through this House.
7.15 p.m.
Lord Morton of Shuna: My Lords, as I am one of an increasing number of those who welcome this Bill, my contribution is not going to be to say how much I welcome the Bill but to raise a series of questions. I have no doubt that the noble Lord who is to reply for the Government will have the answers at some time or other, even if not necessarily this evening.
First, the question of the level of awards of damages in America has been raised. This question appears, to a Scottish lawyer, to relate very much to the fact that awards for damages in America seem to relate not to the loss or damage actually suffered but to the defender's ability to pay and also to the contingency fees. My noble friend Lord Williams of Elvel suggested that this might be coming into Britain. I can assure him that, so far as Scotland is concerned, if that is liable to arise we have not heard of it yet and we shall resist it with all endeavours possible.
On the Bill itself, Part I is intended to give effect to the directive. Would it not be convenient for the consumers who have to deal with this Bill to print the directive as a schedule to the Bill, say, so that one gets the two documents together? In the directive, as I read it, we start off with the Council of the European Communities; then we have four articles to which they have regard. Then there are 19 paragraphs, which start off with the word "Whereas" and then after that beginning it says "has adopted this directive". And what follows is the directive.
When one considers the agricultural provision, what the directive talks of in Article 2, quite apart from what is in the paragraph that has already been referred to, among others by the noble and learned Lord, Lord Denning, are not industrial processes at all. It says,
" 'Primary agricultural products' means the products of the soil, of stock-farming and of fisheries, excluding products which have undergone initial processing".
Would it not be better for the Bill to use the same words as the directive, or do the Government seriously consider that "initial" and "industrial" mean the same thing? Surely it is the articles of the directive that have to be complied with rather than the preamble.
The second point of conflict is rather more fundamental. In Clause 5(2) of the Bill we read:
"A person shall not be liable under section 2 above in respect of any defect in a product for the loss of or any damage to the product itself"—
so far so good—
"or for the loss of or any damage to the whole or any part of any product which has been supplied with the product in question comprised in it".

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That appears to me to mean that, if I buy a car battery and it causes damage, I cannot get compensation for the loss of the battery iself but for what the battery has done-unless I buy a car which has a defective battery in it. Then if the battery causes the car to be destroyed, according to Clause 5(2) I do not get any compensation for the car either.
If one turns to Article 9(b), that seems to be completely different. It says:
"'damage' means:… damage to, or destruction of, any item of property other than the defective product itself, with a lower threshold of 500 ecu".
There is nothing there about what the product is built into and I should be interested to know why the last three lines of Clause 5(2) are there. They seem to be slightly contrary to the directive and to take away a lot of the protection the directive is designed to secure.
The next question I have is one of jurisdiction. If a person in Britain suffers damage due to a defective product which was produced in or imported into another member state first, can the person who suffers damage sue in Britain or is that person required to go to Greece or Portugal in order to sue? It is obviously grossly inconvenient if I, with my defective battery, must raise the action in Portugal or in Greece. The producer or the importer is presumably insured for product liability, so it will be much more convenient if the consumer can sue in the country where the harm happens.
That raises the question of whether product liability under Part I of the Bill is a tort, a delict or a quasi delict. As far as I can see, that is the only way in which there would be jurisdiction under the Civil Jurisdiction and Judgments Act 1982, which adopted the 1968 EEC Convention and which states:
"A person domiciled in a contracting state may in another contracting state be sued in matters relating to tort, delict or quasi delict in the courts of the place where the harmful event occurred".
Is the liability a tort, a delict or a quasi delict? As a Scot, I am very much happier with a delict or a quasi delict. However, by the look of the noble Lord, Lord Lucas, he is much happier with a tort!
The directive and the Bill impose a liability for a defective product. However, there is no question of fault or a duty to take care. The preamble to the directive makes it clear that this is liability without fault. Until recently, the whole history of tort, delict and quasi delict in English and Scottish law has been tidied up with fault, wrongs, breaches of duty and the need to prove a breach of duty. For example, the Factories Act provides that machinery shall be securely fenced and lays the duty of doing so upon the occupier. There is no duty laid on the producer of any product not to produce a defective product. There is only a liability if he does so.
One need only look at Clause 6 of the Bill to see how it deals with other wrongdoers. The Fatal Accidents Act refers to "the wrongful act, neglect or default". The Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 makes the contribution of "joint wrongdoers" and refers to "negligent or wrongful acts or omissions" and not, as printed in Clause 6(1)(b), to "act or omission".
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We then proceed to the Congenital Disabilities (Civil Liability) Act, which, in its Long Title, deals with children who are born disabled as a consequence of some person's fault. We also have the Law Reform (Contributory Negligence) Act, which speaks of fault. Is this supposed to be fault or not? As the Government know, the civil jurisdiction Act is supposed to refer to the report of Professor Schlosser on jurisdiction. His passage dealing with tort, delict or quasi delict begins at paragraph 134 by stating:
"It presupposed that the wrongful act has already been committed".
Is this, in the Government's view, a tort, delict or quasi delict? Such an animal could be defined as a liability to pay damage for a loss which arises from law and not from private agreement. The difficulty would be solved. That definition would fit with the Damages (Scotland) Act 1976, which speaks of,
"an act or omission giving rise to liability to pay damages",
and does not mention fault or wrong at all. It would also fit in with the statement of the noble and learned Lord, Lord Denning, who said in 1949:
"The criterion of liability in tort is not so much culpability but on whom the risk should fall".
I would suggest that is the modern approach which should be used in the law of delict. However, that is not the way that all judges and all lawyers will approach the problem. Ought the Bill not to provide that liability under Part I is a tort, delict or quasi delict?
There are several Scottish problems about the proscription and limitation provisions in Part I which I do not propose to deal with now. I hope, as the directive imposes a 10-year limitation and a three-year limitation onto the already existing limitations of other periods, that the Law Commissions in both Scotland and England will be given an opportunity to look at them and to perhaps drop the other periods of limitation and go for the three-year and 10-year periods.
The next question I have concerns whether or not the Government think that Part II of the Bill really fits in with Part I. Clause 10(4)(b) gives the retailer a defence which I believe the noble and learned Lord the Lord Advocate has already read out to us. That defence concerns having no reasonable grounds for believing that the goods failed to comply with a safety requirement. This defence is open to no one other than a retailer. If I buy my battery from a retailer and he says' "I knew nothing about it", and then tells me who the wholesaler was, the wholesaler has no defence. That does not seem to fit in with the view of product liability which says that one returns to the producer of the product.
Why is it necessary in Part II of the Bill to have a definition of consumer goods which is different from the definition of product in Part I? What is the purpose of the forfeiture provisions outlined in Clauses 15, 16 and 17 where forfeiture takes place without any prosecution? In what circumstances is this power intended to be used? To take the Scottish example, how is the sheriff to be satisfied that the goods have to be forfeited? Is the criterion to be proof beyond reasonable doubt?

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I suggest that there may well be a case for a power to seize and retain goods pending a prosecution. But it seems strange that we are adopting what is almost a mediaeval process, in which we seize goods, do not prosecute anyone who owns or possesses the goods and then destroy the goods. That seems to be the power which is referred to. It seems rather odd to me that we are simply destroying goods without punishing anyone.
In Clause 15 regarding a court and suspension notice, there is a right of appeal. That appeal is to the Crown Court in England and to the County Court in Northern Ireland. Why is there no provision for a right of appeal for a dissatisfied person in Scotland? It would seem appropriate that there should be such a right of appeal, as it seems to have been omitted.
Clause 39 provides a due diligence defence. Would it not be simpler, looking at Clause 12(4), simply to say that a person who makes a false statement is committing an offence but that the due diligence defence is open to him? It would avoid the terrible minefield of "recklessly" and "material particulars". What is the point of changing the approach to this?
Lastly, perhaps I may raise the question of the offences. Clause 38 provides, among other things, that an enforcement officer who obtains trade secrets and who gives them away can be sent to prison for up to two years. That seems quite appropriate. However, if someone pretends to be an enforcement officer, whatever he does and even if he obtains the trade secrets (which may be why he has pretended to be an enforcement officer), he faces a maximum penalty under Clause 38 of a fine on level 5. It seems to me that he should possibly be punished more than the other.
I have spoken for too long. The Bill is very much to be welcomed; but, as a last point, is it really necessary that the House should approve the wording of Clause 2(6), which says:
"This section shall be without prejudice to any liability arising apart from by virtue of this Part"?
That seems to have been written by a scriptwriter for "Yes, Prime Minister". Surely there is some method of putting it into simpler English that can be understood; but otherwise I give the Bill a great welcome.
7.30 p.m.
Viscount Hanworth: My Lords, before discussing the provisions of product liability in this Bill I should like to take a rather wider and philosophical view of the problem. This is because we ought to consider the longer term implications and try to decide how and to what extent consumer protection and compensation should be extended in the future.
There can surely be no doubt that the present system is anomalous and, to say the least, very unfair in many areas. The classic example is that if a person is seriously injured in a car crash nothing can be claimed unless the driver can be proved to have been negligent. Yet in industry, even if the worker is largely to blame, say, by removing safety guards from a machine, some compensation is payable.
Such problems were highlighted in a very emotional atmosphere about brain damage from whooping
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cough inoculation. If a child gets brain damage as a result of inoculation there is now compensation, but for those who are not inoculated the chances of contracting whooping cough and as a result getting brain damage are equally likely, and the effects just as devastating. For them there is no compensation. I know that in the past there was considerable pressure for inoculation, partly on the grounds of national good, but this argument is very thin and does not justify ignoring the sufferings of those for whom no compensation is payable.
Again, in the medical field it must be recognised that any useful drug will have an unfortunate effect on a small number of people allergic to it. Even aspirin can cause serious internal bleeding and other side effects. Do we accept that if a drug is passed as safe by the "drugs committee" no compensation is payable? Are we going to allow a host of vexatious cases against physicians who administered a strong drug, allegedly without adequate supervision? We shall have to face these questions at some time in the future.
This leads on to another point. It is idle to suppose that everyone can obtain his rights by litigation. The delays in so doing are very great. For the rich and the poor this may be possible; the latter because of legal aid. For me and for many others this is not so. In America solicitors can take on a case free, say, for 50 per cent. of the damages if they win. In England this would be maintenance and champerty—and I am not quite sure which of those two it is. The American system leads to almost vexatious litigation.
We must be quite clear that no fault compensation is an insurance policy for which someone has to pay, and who does so is a vital point. In the case of this Bill the consumer will pay in the increased price of goods, but it will greatly sharpen up the manufacturer's control. Moreover, it has often been impossible in the past to prove a manufacturer's negligence. I entirely support the provisions of the Bill.
I very much hope that your Lordships will agree that if, as I think likely, we move in the direction of no fault compensation, perhaps even for non-attributable accidents in the home, we shall do so with our eyes open and always consider the side effects and the cost of doing so. Of one thing I am certain—we do not want to allow the situation which has developed in America where, for example, damages are so substantial that 30 per cent. or more of doctors' fees are due to the cost of their insurance policy. Even for agricultural machinery Massey-Ferguson estimates that the cost of insurance represents 7 per cent. of the sales price of its farm equipment.
If noble Lords have followed my argument and agree that in many cases compensation is an unfair lottery, and if noble Lords want to extend compensation to people in need, then I am sure that in fairness to everybody there must be a limit to the compensation awarded. Such a limit is envisaged in the EC legislation, and although it is new to our law most insurance companies put an upper limit on all sorts of claims. I suggest that in part and based on negligence we are in danger of becoming prisoners to our legal system which to some extent, because of new developments, is becoming out of date. We need to rethink this. To those interested, the Pearson Royal Commission of 1978 provides a very good analysis of

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the situation—but pigeonholed like so many other excellent reports.
At last I return to the provisions of the Bill. One very important issue is whether we allow the provision of new developments being a defence for the manufacturer. As has been said this evening, such a defence gravely undermines the ability of an injured person to claim compensation. Having read the consumer council brief and understood that several other European countries have thought that this loophole should be closed, on balance I now agree that the provision should not be in the Bill. In parenthesis, it always appears to me rather strange that we seem to pay so little attention to the experience of others in Europe and do not listen to what they have to say about the various issues that confront us today.
7.37 p.m.
Lord Auckland: My Lords, the great and late Sir Harry Lauder once wrote a song, "Keep Right On to the End of the Road". In consumer legislation we have been seeking to do this for many years, and here, I think, is a Bill which gives the ultimate challenge.
Since taking my seat in your Lordships' House about 28 years ago there have been some 10 Consumer Protection Bills which have become Acts. This is the most challenging of them all because it poses to a great extent the dilemma between the consumer and the manufacturer. Like many of your Lordships, I have one or two small interests to declare, all of a non-financial nature. I am an honorary vice-president of the Royal Society for the Prevention of Accidents. The society has a considerable interest in this Bill, in particular, as has been mentioned, in regard to toys and other products and mechanical instruments which will be covered in certain clauses.
I am also president of the Institute of Insurance Consultants and I have spent on and off some 30 years of my working life in the insurance industry. I was especially interested in what was said about product liability, because I seem to remember that even in the late 1940s insurance against product liability was not an easy matter, particularly of course in the United States of America. Even there malpractice and workers' compensation legislation and other offshoots of product liability resulted in the most enormous claims. However, not being a lawyer, I certainly do not propose to chase that hare at this time of the evening.
The great challenge that this Bill will present undoubtedly concerns the enforcement procedures. When we look at product liability and the thalidomide and Debendox cases—to name just two from the pharmaceutical industry—there is, on the one hand, the fact that no manufacturer can ever guarantee perfection on the testing of a product. On the other hand, the mother or father of a child who has been brain damaged, or otherwise damaged by thalidomide, Debendox, or any other product, must also be considered because, of course, no compensation, however much, can make up for the hurtful loss of a young life.
As regards retailing, there is the question of the small trader and the supermarket. The small trader has a great deal on his plate when it comes to studying
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the law and what is required under the Bill regarding products. The supermarket or the large trader may well have the time and staff to devote to studying the legal implications. I hope that aspect can be considered very carefully as the Bill goes through Parliament.
Then there are the existing situations. I refer, for example, to labelling. Under recent legislation the requirement to label products properly has become a reality. In a case arising from a defective product where the labelling has been adequate, will we find that the manufacturer or producer is guilty?
Obviously, the most important people to be considered are children and old people. In consumer legislation in the past various Acts have covered this point. Mention was made of toys, particularly by the noble Lord, Lord Williams of Elvel. So far as I can make out, this proposed legislation seems to neglect that aspect. Toys can cause a great deal of damage. There are still a number of toys—teddy bears, and so on—where the eyes are not properly secured. Here, it seems to me, is a really comprehensive Bill which could deal with that dilemma.
Finally, the Bill itself suffers from the defect of so many Bills in that it is somewhat over-long. I refer, for example, to Schedule 3, paragraph 1(10) which deals with the Health and Safety at Work etc. Act 1974. For the words "properly used" there is a new subsection consisting of 140 words. Is that really necessary? After all, those who have to study this Bill and those who are going to be affected by it, whether manufacturers, retailers or consumers, do not want too much verbosity.
I mention this only because, apart from that, I believe this is a workmanlike Bill. In its various stages through your Lordships' House—and I believe there is much tidying up work to be done in Committee—one of the aspects we must look at is the drafting, particularly in the schedules. In order that this very wordy Bill can be made to work properly it must, in some parts at least, be in a comprehensible form.
7.45 p.m.
Lord Ezra: My Lords, we have now reached the closing stage of this debate on the Consumer Protection Bill. I believe that two issues have clearly emerged. The first is the virtually unanimous support for the objectives and the purposes of the Bill. The second is I think an equal degree of agreement on the particular issues which still require attention; on not all of which are we of the same opinion. What the debate does portend is a very important Committee stage, for which I hope we shall be given sufficient time.
I should like to mention some of the particular issues raised during the course of this afternoon's debate which accord with my own view as to what are the important issues. I start with product liability, on which so much has rightly been said. The question of the development risk defence was expected to be raised; indeed, it achieved a great deal of consideration. The fact is, as we have been advised and and as we know, that most of the countries in the European Community which have applied the directive so far have not given this exclusion. Certainly

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that is the case in France, Belgium and Luxembourg, and in West Germany it has not been allowed for pharmaceuticals.
It has been argued that the insurance liability arising from not allowing this defence would be substantial and could even be stunting; but among the many briefs which we have all received is one from the Association of British Insurers which gives a somewhat different view of the situation and which has already been referred to in previous speeches.
In effect, what it says is that if this defence were not allowed, and therefore had to be insured against, the impact, for the most part, would be minimal. In some cases it could be more extensive but with a very few industries, and I am quoting their words, which have a heavy development risk, such as pharmaceuticals and aerospace, the difference could be critical and the amount of capacity would be reduced. Therefore here the insurers, at any rate, are putting this matter into perspective. What emerges is that two, or possibly three, major sectors where there are considerable risks attached to development could be seriously affected. I wonder whether we would be justified, because of that, in having a total exclusion in allowing this defence to be applied.
In passing, I should like to draw attention to the Accident Compensation Law of 1974 introduced in New Zealand, which in a rather unique manner covers these problems. In sectors where the risk is very large and where it would be unfair to put it either on the consumer or on the manufacturer—for aspects could not be envisaged at the time of manufacture—could not some other way be found, funded in a suitable and generalised manner, to cover these risks? That seems to me to be one possibility that is worthy of consideration in this difficult issue.
The other aspect of Part I of the Bill concerns the question of the exclusion of agricultural products. As the noble Lord, Lord Morton of Shuna, has pointed out, in the Bill the basis for the exclusion is worded differently from that in the directive. The Bill refers to products which have "not undergone an industrial process" and the EC directive refers to "initial processing". Whichever way it is described, it is quite clear from the remarks of the noble and learned Lord, Lord Denning, that a great deal of confusion will arise in the courts. It is very difficult for anybody to envisage that any natural product now reaching the market has not gone through some form of initial processing, if I may use the EC term. Indeed, so far everybody has benefited from it.
I am most impressed with the increased quality of the foodstuffs that we buy in stores such as those presided over a few years ago by my noble friend Lord Sainsbury and his competitors, and this has all been to our advantage. There has been an application of new technology to achieve this improved quality, but it would be very difficult to argue that there has not been some degree of processing, which is what we are discussing. I believe that the Government should explain a little more clearly how they see this problem being coped with and whether in all these circumstances this exclusion is desirable.
We have heard it said that there is already a great deal of legislation affecting agricultural products. If the
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effect of all that legislation (the 19 Bills referred to by the noble Lord, Lord Stanley of Alderley) is precisely as though these products were not excluded, I think we all ought to know. In any event, I think it is wrong in a Bill of this importance for that point not to be clearly brought out. This Bill is meant to be one of the most important pieces of legislation for consumer protection. The way in which it is worded suggests that these products will be excluded from all forms of legislative control, whereas the facts are different, as we have been informed. So I suggest that that point also should be looked at.
When we come to Part III there are also some interesting points that have been raised which require further clarification. This section introduces a general duty on manufacturers, importers and retailers to supply safe goods, which is a wholly desirable statement of intention. However, it raises the question of standards of safety. It is not entirely clear which standards would be applied in which cases. It raises the question of who is responsible for testing to see whether the standards have been achieved.
I have received advice from the Trading Standards Association, of which I am a vice-president, to the effect that it believes that the impact of the wording of this part of the Bill would be to leave the onus of proof on the trading standards officers; namely, that it would be for them to prove that the goods were unsafe rather than for the trader or manufacturer to prove that they were safe. If this is the case perhaps we ought to be advised. However, it seems to me that standards and the question of where the responsibility lies for testing in order to ensure that these standards are achieved must be clearly identified.
Then there is the question of second-hand goods, which have been excluded. Consumer bodies have expressed much concern about this matter. The fact is that here too there is other legislation which lays down rules about certain types of second-hand goods; namely, electrical goods. I should have thought that further clarification was required here. I believe that those who sell second-hand goods which are potentially capable of causing harm or injury should carry some liability and therefore they should see to it that those goods are unlikely to cause difficulties.
As the noble Baroness, Lady Fisher, pointed out in her contribution to the debate, it is a little surprising to see that exports have been excluded; all the more so as that seems to conflict with the Government's recent paper on quality standards and international competitiveness. To me it seems odd that while apparently we proclaim that the British public should have goods which are safe, we do not really mind about the standards of safety of the goods that we export to our friends, say, in the EC. I should have thought that at least we ought to include the other countries of the Community and apply there the same degree of attention to safety that we apparently want to be applied to goods sold in this country.
Turning now to Part III, here again it is wholly desirable to make the indication of misleading prices a general offence; but it has been represented to me that the wording of this part of the Bill is complicated and questions have been raised by many noble Lords about the problem of the code of practice. Indeed, there is a

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basic anomaly about this code of practice because apparently it is intended that compliance with the code will provide an absolute defence but that non-compliance will only be taken into account. Surely it would be proper to reconsider the whole issue of the code of practice in relation to the legislation.
I believe that it was suggested by the noble Lord, Lord Gallacher, that perhaps this question should be examined in more depth to see which parts of the code of practice could be introduced into the legislation, and therefore be mandatory, and which parts could be left in the code of practice and have the same impact, as the noble Baroness, Lady Elliot, said, as the Highway Code; namely, to be taken into account.
The other aspect of the code of practice which has aroused concern and to which reference has been made is that the Secretary of State may be authorised to agree other codes of practice. It seems to me that this introduces a major element of confusion. What will be the validity of these other codes of practice? Will they have the same validity as the code of practice issued by the Government—that is, to provide an absolute defence—or will they be of a more voluntary nature? It seems to me that such a provision weakens the impact of that part of the Bill.
In regard to Part IV, I believe that it is absolutely right that the enforcement of these important regulations should be placed on the shoulders of the weights and measures authorities in Great Britain and the district councils in Northern Ireland. However, as the noble Baroness, Lady Fisher, pointed out, here again there is an element of confusion because it is stated in Clause 27(2)(a) that the Secretary of State can transfer responsibilities for enforcement to third parties. How will this transfer be effected? Who are these third parties? How will they stand in relation to the weights and measures inspectorate and the local authorities? I think that these are very obscure matters which no doubt the noble Lord, Lord Lucas, will clarify when he winds up the debate; or perhaps they will be clarified when we come to the next stage of the Bill.
Finally, I turn to the question of resources, to which other noble Lords have also referred. I must say that I was a little surprised to read in this Bill that:
"There are not expected to be any implications for public expenditure or public service manpower".
I fail to see how that can be so. We are extending the scope of consumer protection. That is the whole purpose of the Bill. We are extending the obligation for the safety of goods produced in this country way beyond the scope of present legislation. A large number of manufacturers and traders will need advice and they will turn to the weights and measures inspectorate.
In conclusion, I should like to say that this Bill, which has excellent intentions, could be much improved by reconsideration of some of the matters that have been raised during this debate. Above all, do not let us attempt to bring the Bill into effect on the cheap.
8 p.m.
Baroness Nicol: My Lords, as the noble Baroness Lady Elliot, said, this is not a political Bill and I hope that it will not be turned into one as we go through its various stages. As the debate has shown, all of us, with the single, notable exception of the noble Lord, Lord Airedale, who wants none of it, support the Bill. I am sure that the noble Lord has good reasons.
I do not propose to go over Part I of the Bill. In the words of the song, I think,
"we have gone about as far as we can on that"
for a Second Reading. It will be discussed in Committee. I am sorry to disappoint the noble Lord, Lord Stanley. It is obvious that he will have to come armed with full details of his pieces of legislation and fight his case there.
We welcome especially, as almost everyone has today, the general safety requirement. We feel that it should lead to improved standards at all levels. The noble Earl, Lord De La Wan, disappointed me by saying at the beginning of his contribution that this was not a Bill to change commercial behaviour. I should have thought that it was just such a Bill. If it does not do that, then it has failed miserably. I hope he did not mean what I thought he meant. His fears that public expectation will be too high are surely unfounded. Public expectation has every right to be high. The Government are fully behind this Bill, so that the public can be better protected. If their expectations are high it will not be the result of Opposition rhetoric as he feared, but of the plain facts put before them by the Government.
The question concerning the BMW anti-skid device is covered by Clause 10(2)(b). If the noble Earl cares to read that clause, he will find it meets his question about increased costs.
Earl De La Warr: My Lords, is that the end of my pounding?
Baroness Nicol: My Lords, I am sorry, but the noble Earl did rather give me a pounding on sewage sludge, so I felt I owed him that.
We particularly welcome the general safety requirement at Christmas time. A number of noble Lords have mentioned toys. The noble Lord, Lord Auckland was concerned about this matter. A number of unsafe toys are still about. I am indebted to the Consumers Association for telling me about quartz chippings coated with explosive, wrapped in paper. When snapped in the fingers, they explode. I understand that the force is great enough to blind a child close enough to it.
Perhaps I can mention also the matter of the Mexican ovens which are lethal toys. They were first sold on Epsom racecourse, I understand, although I make no special point about that. Many of these toys are still about. There is also the Jack-in-the-Box which, when released, has sufficient force to knock a child out. Such items need to be controlled. We show, by this Bill, that we care about the situation.
The welcome given to the Bill by the Consumers Association and by the National Consumer Council is significant. Both have been working for improvements

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of this kind for some years. It must be some consolation to them to see what is happening now.
I am trying to avoid ground that has been thoroughly covered. I must, however, mention standards again. In his opening speech, the Lord Advocate drew particular attention to the role that standards would play in this Bill. It is true that the success of the new Act, as it will be, will depend to a large extent on the quality of the standards which are set. We must question them as did the noble Lord, Lord Ezra, and ask, "Who sets the standards, and who approves them?" This is not clear from the Bill. It seems that almost anyone can set a standard which then becomes an important defence. It becomes one of the circumstances to which traders must have regard in abiding by the general duty. Therefore, it is of the utmost importance that the standards should be credible. Should the Minister be unable to answer that now, perhaps he can write to us before Committee, as I think it will affect some of the amendments which we may wish to bring forward. Can he also clarify the relationship between standards and regulations, which again is not clear?
Goods for export have been mentioned by the noble Baroness, Lady Fisher and by the noble Lord, Lord Ezra. Both stated eloquently the view that we, on this Front Bench, hold. We are opposed to the exclusion of goods for export from the general safety requirement. We reiterate that goods which are not considered safe for the United Kingdom should not be exported, or re-exported, without the knowledge and consent of the appropriate authority in the receiving country. This is known as prior informed consent. It is a principle which we tried to introduce into the pesticides legislation and failed. I hope that we will not fail to get it introduced into this Bill. It seems morally dubious to take the attitude that has been adopted towards exclusion. In the long term, it cannot be good for the image of the United Kingdom. The Association of County Councils and the Consumers Association have put forward this view. We hope to persuade the Government to take a fresh look.
The noble Baroness, Lady Elliot, expressed concern, as did the noble Lord. Lord Ezra about second-hand goods. We are concerned that second-hand transactions are excluded from the general safety requirement. We understand that it may be difficult to include sales between private individuals. However, there seems no reason to exclude second-hand business sales. A great deal of potentially dangerous material—for instance second-hand gas cookers—is sold, as mentioned by the noble Baroness, Lady Elliot. Gas showrooms often have them on display. Are we to say that they are not subject to the same safety requirements as new cookers? An unsafe product, sold to one customer but then returned and accepted back by the trader, can be resold to another customer as second-hand. The trader would thereby escape the safety provisions. This cannot be the Government's intention. We shall be seeking to change that in Committee.
The Consumers Association reminds us that the existing regulations under the Consumer Safety Act 1978 (which I understand is to be repealed) prohibits the supply, new or second-hand, of goods that do not meet the safety requirements of the regulations. I
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understand that these regulations will fall with the repeal of the Act. Are the Government suggesting that we go back from a safeguard that existed in those regulations? Much has been said about codes of practice which I do not propose to reiterate. However, I should like to add one point made by the National Consumer Council which I think has not been made in these terms by any other speaker. The document states that if the code is granted formal status, it will assume the importance of delegated legislation but Parliament will not have had the opportunity to discuss in detail what behaviour should, or should not, be lawful in this area. That is an important point, and one against which the Minister will have to argue if he wants to pursue the present provisions in the Bill for codes of practice. We need to have his comments on that point before Committee.
I come now to the power of Customs to detain goods, contained in Clause 31, which I do not think has been mentioned today. The enforcement authorities are still of the view, held since the spring of this year when the amending legislation was brought in, that 48 hours is insufficient time for full inquiries to be made in complicated cases or when action has to be taken at week-ends or holiday periods. During the passage of the 1986 Bill, the Government could not produce any evidence in support of their insistence on the 48-hour period. Is that still the case? Can the Government now produce the evidence that they thought they had at the time? If the Government have it, will the Minister produce it for us before Committee? If not, we shall also be arguing that point.
I think that perhaps enough has been said about compensation. But we should be careful not to make enforcement officers feel that they must draw back when they have a legitimate suspicion because of fear of difficulties if they have suspended the sale of goods for which they are then held responsible.
Finally, a fair amount has been said on the financial and manpower implications. I wish to add, as strongly as I can, some further points. The Association of County Councils, which is a reasonable body not noted for its Left-wing views, challenges the statement in the preamble, as the noble Lord, Lord Ezra said, that the Bill has no financial or manpower implications. Although Part I provides a civil liability and will not be enforced by local authorities, it will lead to increased demand for consumer advice, which can be time-consuming and which trading standards authorities must provide.
Parts II and III will cause extra work and expenditure. The classes of goods covered are widened to cover any goods intended for private use or consumption. That means that many more goods must be inspected and tested by trading standards authorities. It is not reasonable to expect them to take that up in what is, as the noble Lord, Lord Graham, so eloquently said, an already overstrained service.
Part III will also require more advice to be given to traders. It obviously means more work for trading standards officers. When the Government threw in that little statement in the preamble, did they take fully into account the increased load which would be put on trading standards authorities, or are they saying that we are willing to accept a reduced standard from our enforcement authorities? The Bill's success will, in

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the long run, depend on enforcement. If the manpower is not there, we may as well not bother. The Government show themselves to be so callous and indifferent to the loads and worries of local authorities that we have reached a stage where, on this Bill, we must be reassured that the Government understand the load that they are imposing. I look forward to hearing about that from the Minister.
Other items need to be discussed but most of them are Committee matters of detail. We propose to raise them then. We wish the Bill well. We want it to go through quickly. We hope that we will receive the right answers tonight so that the Committee stage can be even shorter than it should be.
8.14 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, your Lordships will accept from me that 11 major issues and some 60 points have been raised in this most fascinating and interesting debate. I shall do my best to answer as many as I can. I should like, on behalf of my noble and learned friend the Lord Advocate, to thank all noble Lords who have spoken.
I do not think that I have ever stood before your Lordships as heartened as I am tonight by the general welcome that has been given to the Bill. Many noble Lords have raised specific points, and I shall come to them in due course. I do not recall that anyone has not given a welcome to the general principles of each of the three major parts of the Bill. I am most grateful to noble Lords for that.
Most of the points that have caused concern are in Part I of the Bill. Before going into that in detail, I should remind noble Lords that the purpose of Part I is to implement the European directive; no more and no less. There are a few areas where member states can make choices, but it is right that we should debate them. Noble Lords have mentioned two of them—the development risks defence and the position of primary agricultural products. In other respects, it is not our policy to go beyond the directive. The policy is merely to implement the directive in Part I of the Bill. On Part II, however, where we propose new offences of supplying unsafe goods, and Part III which contains a new offence of giving misleading price indications, we are free to legislate as we choose, having due regard to everything that has been said.
Having made those general remarks, I shall turn to some of the points that have been raised. I shall start with my noble friend Lord Auckland, who as a vice-president of RoSPA takes a good deal of interest in general safety measures. I want to dispel the idea that I think was perhaps lying in his head that the Bill does not deal with toy safety. It does, under the general duties provisions.
I think that it was the noble Baroness, Lady Nicol, who spoke about the toy water snake. That was dealt with by order in 1983 (SI 1366). We had the Expanding Novelty Safety Order (SI 1791) and the Scented Erasers Order (SI 83). Those three matters were briefly touched upon by noble Lords and the noble Baroness, Lady Fisher of Rednal. A good deal of
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legislation is in place already. We take what steps we can as soon as we can. The Bill will give enforcement officers a much better chance of stopping such toys reaching the market place.
I warmly welcome the general acceptance of the Bill given by the noble Lord, Lord Williams of Elvel. He made some interesting points. He asked about toy safety. He asked why we had to wait for the EC directive. He suggested that he would not be friendly towards the CBI. I am sorry about that. I do not know whose loss that will be. It will probably be a loss to both parties. He then went on to some points which I liked rather better. He accepted the approach of the Government and the Community to product liability. We shall be talking about the development risks defence in much greater detail. I shall have a little to say about that later.
The noble Lord, Lord Williams, also spoke about primary agricultural products. He asked me about the industrial process and the initial process. On that point I shall reply at the same time to the noble Lord, Lord Morton of Shuna. I say this in the friendliest way. In putting the directive into United Kingdom law, we must take account of the directive's intentions. The intentions were made clear in the preamble, where industrial processing is mentioned. I am sure that we shall return to that point later. The noble Lord made other points to which I shall come in due course.
It may be as well if I deal with the development risks defence straight away to give an idea of our thinking. The noble Lords, Lord Williams and Lord Allen of Abbeydale, and most other noble Lords had something to say on that point. It will be for the producer of the defective product to prove that the state of scientific and technical knowledge at the time he supplied that product was such that no producer of products of that type might have been expected to have discovered that defect. This will not be easy to prove. It will not be sufficient for the producer to point to any testing difficulties he might have encountered, or even that he had complied with national standards or followed procedures adopted by other manufacturers. He will have to prove to the court that he took all the steps that he might reasonably have been expected to take and that the state of scientific and technical knowledge would have allowed him to take. Anything less will not be a defence.
I hope then that this House will accept that, although this subject has attracted controversy, it will not be easy for a producer successfully to plead this defence and that it is not, as some have called it, a significant loophole in this important advance in consumer protection.
A number of your Lordships have mentioned the tragic thalidomide incident; but much has changed since then. Scientific knowledge has increased, and there have been significant changes in the circumstances in which drugs are tested or marketed since the late 1950s. There is, of course, a much wider exchange of information about testing and experiences in the use of drugs. The Medicines Act 1968 now provides for a comprehensive system of licensing under which it is unlawful for a medicinal product to be manufactured, sold, supplied or imported into the country except in accordance with the appropriate licences and clinical trial certificates as to the safety and quality of that product.

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The noble Lord, Lord Williams, suggested that, with the inclusion of this defence, the United Kingdom might well become the guinea pig of Europe. I do not believe that this is so. The latest information I have is that most member states will be taking the same decision as us on the development risk defence. We cannot, of course, be certain until all other member states have brought their legislation into force. I understand that only Belgium, Luxembourg and France, where strict liability already exists, may dispense with the development risk defence entirely, and Germany will dispense with it only in relation to pharmaceuticals. It is more likely that, without the defence, British manufacturers would be at a disadvantage in most of Europe.
A number of noble Lords, including the noble Lord, Lord Williams, the noble Baroness, Lady Fisher, and the noble Baroness, Lady Nicol, mentioned the 48-hour detention period.
Lord Allen of Abbeydale: My Lords, I do not want to break the thread of the noble Lord but, if he is leaving that point, is he trying to say that in no conceivable circumstances could we have another tragedy comparable with the thalidomide tragedy?
Lord Lucas of Chilworth: My Lords, I am quite sure that I did not say that, nor would I dare say that. Although I do not believe that that is a probability, one can never rule out anything.
The noble Baroness, Lady Nicol, said that she would be coming back to the 48-hour detention period. All I would say at this moment is that the detention power is intended to allow enforcement authorities time to make preliminary inquiries about any imports detained. Further action follows from there.
The noble Baroness, Lady Burton of Coventry, whose remarkable tenacity on all consumer matters is the admiration of the House—my noble friend Lady Elliot of Harwood and others paid tribute to it, as I do again this evening—asked me a number of questions. I can confirm that the general safety requirement means that all new consumer goods will be safe to modern standards. I confirm that, so far as the resale of gas and electricity is concerned, we shall be doing something in this direction.
She also suggested that the directive does not fully harmonise the laws of member states. In saying that, of course, she is quite right. However, in the course of the negotiations it became evident that such a system could not be negotiated. The system imposed by the directive is more harmonised than the individual liability systems that currently exist in each member state. The noble Baroness will of course recall that a review is to be undertaken 10 years after the date of notification of the directive, that is, by July 1995.
I referred to the resale of electricity. We intend making regulations, and Part III of the Bill gives us the opportunity of so doing.
If I may return to the noble Lord, Lord Allen of Abbeydale, whom we recall was a distinguished member of the Pearson Commission, I am glad that he gave a general welcome to the Bill. I think that I have said enough about the industrial process and, for the time being anyway, on the development risk. I was
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rather glad to have the noble Lord's welcome, so far as insurance is concerned, in support of our position. I hope to return to that matter shortly.
The exclusion of primary agricultural products was brought up by a number of noble Lords, the noble Lord, Lord Williams, the noble Lord, Lord Allen of Abbeydale, the noble Lord, Lord Sainsbury, my noble friend Lord Stanley of Alderley and my noble friend Lady Elliot of Harwood. At the risk of some repetition, the directive excludes liability for primary agricultural products, and the Government are implementing the directive in this respect.
As has been pointed out, some member states may derogate from this provision. The Government, however, have decided not to use it for several reasons. The first is that we know of no other member state that has indicated that it will include liability for primary agricultural products. For us to do so I think would not only fly in the face of our aim of eventual harmonisation, but most certainly would place United Kingdom farmers at a grave disadvantage throughout the Community. There are other reasons. I suspect that we shall come back to this matter later, and it would perhaps be better if I went into detail at that later stage.
My noble friend Lord De La Warr raised a number of points, most of which were answered by the noble Baroness, Lady Nicol. I thank her very much for that. My noble friend asked whether price should be relevant in deciding the safety of a product. The cost of making a product safer is certainly one of the factors that manufacturers might well take into account. I urge my noble friend not to confuse "safe" and "safer" with safety. There is a general duty to ensure that no unsafe goods come to the market. Those who like to go further, of course, can do so.
Let me touch quickly on insurance because the noble Lord, Lord Airedale, the noble Viscount, Lord Hanworth, my noble friend Lord Clitheroe, the noble Lord, Lord Williams, and my noble friend Lord De La Warr also brought it up. I can only say this. Contrary to what my noble friend Lord Clitheroe had to say, all the information that we have on the cost of insurance is confirmed by the recent statement of the Association of British Insurers. That suggests that there will be no excessive rise in the cost of insurance as a direct result of the directive being implemented. This is about the most authoritative statement that we have had on the subject.
We should not confuse our future legislation with the current difficulties of obtaining product liability insurance for manufacturers of products for sale in the United States. We believe that these are caused by the particular vagaries of the American legal system, such as contingency fees, damages, excessive awards and so on. All these factors have driven up the cost of product liability insurance in the United States, but none of these factors applies to the United Kingdom judicial system.
I was rather sorry that the noble Lord, Lord Airedale, at the end of his speech said that he really did not like very much of it at all. I hope that, as he comes to study it in greater detail, he will come to like some of it a little better anyway. I shall seek so to persuade him.

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The noble Lord, Lord Gallacher, raised a number of points. I will attempt to answer as many of them as I can. He spoke about Clause 27(2)(a) on enforcement activities, as did a number of other noble Lords. This subsection is in fact in the existing 1978 Consumer Safety Act. It allows the Secretary of State to transfer enforcement responsibilities for specific regulations to other bodies such as the Health and Safety Executive. This would be more effective, for example, for goods largely used at work. However I assure him that there is no intention of removing mainstream enforcement responsibilities from trading standards officers.
The noble Lord spoke interestingly about food coupons, and I should have thought that coupons offering money off the recommended retail price amounted to a price indication and, as such, would be subject to the general prohibition on misleading price indications in Clause 20. I think that is probably the point that he raised in so far as bargains were concerned as distinct from misleading price indications.
He asked, as did a number of other noble Lords, who else other than the Secretary of State can issue a code of practice. While it is possible for someone other than the Secretary of State to prepare a code, it must be approved by the Secretary of State by means of an order and subject to the consultation procedures which are laid down in Clause 25 of this Bill. We see our department writing a code of practice and it being agreed by all the parties to it.
I ought to say something on the code on misleading prices since the noble Lord, Lord Ezra, raised it, as did a number of other speakers. The attempt to include provisions dealing with all potentially misleading price indications would have led to some disadvantage, complexity, incomplete coverage, and so on; also the legislation would have to be extremely detailed if it was to be effective. The code, which has statutory backing as set out in the Bill, will give us the flexibility we need and also allow traders some room to manoeuvre in terms of their understanding.
I would just draw noble Lords' attention to what my noble and learned friend the Lord Advocate said in his opening remarks with regard to codes of practice. I do not think I will repeat them now, since time is so short. There is provision in the Bill for Parliament to have a say in those matters. I think I have answered my noble friend Lord Stanley of Alderley on the question of agricultural products. The noble Baroness, Lady Fisher, indicated to me that she might not be able to stay to the end of the debate. She is, unhappily, not well and has suggested that I should write to her. I will of course copy my letter to the other noble Lords concerned.
I am glad that the noble Lord, Lord Sainsbury, raised a number of most interesting points, particularly welcoming the improvement on the existing legislation. He spoke about the code, as did my noble friend Lady Elliot of Harwood. The code is long, and it is long because it is written in really very simple language, and we believe that it being written that way will help retailers by telling them what they can do to avoid prosecution. It deals specifically with many types of retailer. So far as secondhand goods are concerned, we have first to recall that they were
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first-hand at one time. There are particular types of secondhand goods which present real dangers, such as electrical appliances. They are already covered by specific regulations, and where there are particular problems the Government will not hesitate to introduce similar regulations for other types of products—notably gas cookers, to which the noble Baroness referred.
Baroness Nicol: My Lords, I am sorry to interrupt the Minister. Is he referring to regulations which will disappear with the 1978 Act?
Lord Lucas of Chilworth: My Lords, I was in fact thinking of specific regulations which are now in force, and I should say that the repeal of the 1978 Act—and there is provision in the Bill—will not come about until substitute procedures are in place to ensure that the regulations to which I refer can be made if it is found to be necessary. Perhaps the noble Baroness, and the noble Lord, Lord Williams, would like me to spell it out quite directly, in which case I will write to them.
The noble Lord, Lord Graham of Edmonton, and others, spoke about enforcement. This is a matter on which local authorities should decide their priorities. There are different elements of support which need to be applied in different areas of the country, and it would be wrong for us to apply a blanket imposition. I would remind the House that £68·5 million was spent in 1984–85, and some £71 million in 1985–86. We expect some £77·.5 million to be spent this financial year. Therefore, there is adequate money. The Bill certainly will make the work of the enforcement officers a lot easier, and we believe that there will be better consumer protection even from existing resources.
Lord Graham of Edmonton: My Lords, would the Minister spell out what he has just said? He says that the Bill will make the work of enforcement officers easier. The Association of County Councils and others have pointed out the additional workload that will fall upon those same officers. Is there to be no consideration of this factor to be taken into account when the rate support grant is struck? Is the Minister really saying that local authorities must determine their own priorities and that in effect they will be faced with either making this Act work or not pursuing other aspects of their responsibilities?
Lord Lucas of Chilworth: My Lords, I do not believe that is so. Local authorities have the responsibility of directing their energies to enforcement as to other of their responsibilities as they see fit. This has always been so. What effort they put into the enforcement of trading standards is their business. It varies up and down the country, and it would be quite wrong for me to suggest that any particular level of expenditure should be made out of the total rate support grant or other funding. My right honourable friend will take that into account in fixing the grant.
The noble Lord, Lord Young of Dartington, another distinguished consumer advocate, asked me particularly about the code of practice as regards British Telecom services charged at the M-rate. As I have suggested, the flexibility of the code that we are

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proposing will enable us to respond to any new practices that may arise in this direction.
The noble and learned Lord, Lord Denning, gave us an interesting history of product liability, and he suggested that compromise, development risk defence and the agricultural/industrial process is vague. It might well lead to argument. He said that he would be pleased to come back to this point at a later stage.
I turn to the point which the noble Lord, Lord Williams, made in so far as the general safety requirement is concerned, where the noble Lord said that he foresaw some rocks ahead. Those were points which the noble Baroness, Lady Burton, and my noble friend Lord De La Warr also made. That is in Part II of the Bill.
I ought to remind the House of the important differences between Part II and Part I of the Bill. The purpose of Part II is preventive. Its aim is to stop unsafe goods being sold in the first place. Accordingly, it is backed by criminal penalties enforced by local authorities' trading standards departments. On the other hand, the purpose of Part I is to provide compensation.
My noble friend Lord Clitheroe suggested that industry would need a good deal of time to appreciate what was in mind in the Bill. We have made clear that we shall not bring Part I into force for at least six months after Royal Assent. Since the Commission's proposals have been around for some 10 years, there should be no surprises in store for industry.
I turn to the noble Lord, Lord Morton of Shuna, feeling somewhat like a first-year student at his tutorial. A number of questions were asked, and if I come up with the right answers I can move on to term two. The noble Lord raised a number of legalistic points. He knows full well that I have no intention of answering them, even were I totally capable of answering all of them. That is why I look with confidence to my noble and learned friend the Lord Advocate, who will pick up those points and have them dealt with in correspondence between now and when we come to the next stage. However, I should perhaps say to the noble Lord that the question of forfeiture is now part of the Consumer Safety (Amendment) Act 1986. That is consolidated in this Bill.
With regard to the noble Lord's battery, I can tell him that if he bought his motor car in Portugal with a battery, and if the battery caused the car to be defective and the injured person claims against the supplier of the car, then the car is the defective product and Article 9(b) excludes recovery of that cost. Thus the component parts of that product are excluded.
The noble Viscount, Lord Hanworth, raised a number of points, particularly on the financial limit. We believe that setting a financial limit could lead to injustices where there are multiple claims, and to delays in the payment of compensation where there is a possibility of further claims in respect of the same product. Moreover, a financial limit set at the high level required by the directive—something approaching £40 million sterling—would, we believe, have a negligible effect on the cost of insurance for the vast majority of firms. It might even encourage some firms to insure to unnecessarily high levels for their type of business.
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I have covered all the 11 issues to which I referred, and a large number of the points that were raised. I shall look very carefully to see what I have left undone that should not have been left undone. I shall write to noble Lords and will ensure that a copy of the letters is placed in the Library.
In conclusion, I should say how grateful I am to noble Lords in all parts of the House who have contributed to our deliberations. I knew that the debate would be interesting and that there would be a good response to the discussion, which has been wide ranging. As my noble friend Lord Auckland said, consumer protection is an ongoing process. However, the Bill is important to industry as well as to users of their products and services. I believe it is right that we should take time to consider its implications in full.
I very much welcome what the noble Lord, Lord Williams of Elvel, said in his remarks. He promised to give an expeditious passage to the Bill but reminded us of our duties as a revising Chamber. I accept that. I look forward to taking up the discussions again when we come to the Committee stage, which I believe is scheduled for the new year. We should therefore come back fairly well charged for the task that lies before us when we come to the Committee stage. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Advance Petroleum Revenue Tax Bill
8.45 p.m.
Brought from the Commons endorsed with the certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read a first time, and to be printed.

Maximum Number of Judges (Scotland) Order 1986
8.46 p.m.
Lord Cameron of Lochbroom: My Lords, I rise to move that the Motion standing in my name on the Order Paper, the Maximum Number of Judges (Scotland) Order 1986, which was laid before the House on 12th November this year, be approved.
Your Lordships will recall that I moved a similar Motion on 17th July last year which then sought to increase the maximum number of judges for the Court of Session from 22 to 23 and which your Lordships subsequently approved. The additional judge was appointed in September 1985. In view of the relatively recent discussion of the position of the Supreme Courts in Scotland your Lordships will wish to know why a further increase in judicial strength is now being sought.
I should begin by saying something about the report of the review body on the use of judicial time in the superior courts in Scotland which was published on 18th July this year. This provides an authoritative and up-to-date assessment of the position in the Supreme Courts. Your Lordships will recall that it was in the course of my speech on the last draft order that I announced that with the agreement of the Lord President of the Court of Session the review body was

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being set up under the chairmanship of a Court of Session judge. Its purpose was to investigate means by which judicial time in the Supreme Courts might be organised more effectively in order to secure earlier disposal of cases sent to the appropriate rolls of the Court of Session for proof, debate and appellate court hearings and to report with recommendations. The distinguished judge, the honourable Lord Maxwell, kindly accepted an invitation to act as chairman, and it is to his credit, and that of the principal clerk of session and justiciary and the then deputy director of Scottish courts administration who also acted as members of the review body, that within a very short period of time they were able to produce a comprehen—sive and thorough report. I would also take the opportunity to say that the report would not have been so valuable without the wholehearted co-operation of the judges of the Court of Session in the exercise. I commend the report to your Lordships.
The main conclusions reached by the review body were that the judges of the Court of Session contribute to their judicial duties an amount of time which the review body considered to be fully acceptable but that there was some scope for making better use of in-court judicial time allocated for civil business. A substantial number of detailed recommendations were made in the report to this end concerning procedural and organisational matters falling within the responsibilities of the Lord President. The review body also identified a number of possible legislative reforms which they considered worthy of examination and which, if implemented, might offer some reduction of the work in the High Court or a further improvement of the use made of judicial time. These were the establishment of a single judge sift of summary and criminal appeals, a two-judge bench for certain appeals, an increase in sheriffs' sentencing powers in solemn procedure and the use of temporary judges.
Following receipt of the report my right honourable friend the Secretary of State and I discussed the recommendations with the Lord President. As a result, the Lord President invited a small group of practising advocates and solicitors to examine with court officials the recommendations which he had accepted in principle and to submit to him detailed proposals—including where appropriate draft rules of court, practice directions and so forth—so that the reforms recommended could be brought into effect early in 1987. I understand that the implementation group has completed its work, and its report is expected to be in the Lord President's hands very shortly. The practical effect of these alterations in releasing judicial resources cannot be precisely forecast. The review body itself noted the difficulties in doing so. But it is clear that they will make a worthwhile contribution, and will build on work instigated by the Lord President over a number of years to improve, simplify or bring up-to-date the procedures and practices of the Supreme Courts in the interests of improving efficiency and the service offered by them. The review body report catalogues what it calls this "substantial measure of self-examination" and noble Lords would, I am sure, wish me to express our appreciation and thanks to the Lord President for all that has been done, and is continuing to be done,
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under his hand to ensure the effective administration of the Supreme Courts.
Turning to possible legislative reforms arising from the review body report, the review body itself was unable in the limited time at its disposal to pursue these. Indeed they involved matters of some fundamental importance and it was only right therefore that these should be subjected to more detached examination. My right honourable and learned friend the Secretary of State decided therefore to consult interested bodies and organisations on them, and noble Lords may not be suprised to learn that no consensus has emerged from the consultations. In view of this we are giving very careful consideration to the opinions expressed before announcing decisions on this group of proposals.
The changes arising from the review body report may prove valuable. However, there is an immediate need for additional resources to cope with the volume of business with which the Supreme Courts in Scotland are faced. In last year's debate I referred to criminal business requiring 1,205 judge days in 1984. The comparable figure for 1985 was 1,540 judge days, and all the indications are that this figure will be exceeded in 1986. These figures show well the increasing demands which such business makes on judicial time and the correspondingly serious constraints on time for judges to deal with civil matters. This is instanced by the continuing difficulty in dealing as expeditiously as parties have the right to expect with civil work after the close of the record in such cases. My right honourable and learned friend the Secretary of State has decided therefore that a further additional judge should be appointed.
In commending the draft order to your Lordships I believe that what we are proposing is wholly consistent with what I said in July last year, when I mentioned that should the expected increase in criminal business outstrip the savings secured elsewhere it might be necessary to seek an increase at some future date. In view of the developments I have described to your Lordships taking place, to ensure the most effective use of judicial time, it is my hope that the further addition which is now being sought need not have a similar caveat attached to it. However, this will depend on how the workload coming before the Supreme Court develops in future. My Lords, I beg to move.
Moved, That the draft order laid before the House on 12th November be approved. [1st Report from the Joint Committee.]—(Lord Cameron of Lochbroom.)
Lord Morton of Shuna: My Lords, I too remember July 1985, and I am in the happy position to be able to say, "I told you so". In both June 1985, as regards the miscellaneous provisions Bill, and in the debate on last year's order, I suggested that one judge was not nearly sufficient. That still remains the position.
I would join with the noble and learned Lord the Lord Advocate in paying tribute to the work of Lord Maxwell. It adds to the very considerable debt which every member of the legal profession in Scotland owes to him as a result of his work in the Law Commission. However, I would add a caveat: it is no use having judges if you have nowhere to put them. As the noble and learned Lord the Lord Advocate has pointed out, we are seeing a considerable increase in the number of

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criminal cases going into the High Court. When I ceased to prosecute in the High Court in November 1979, the High Court in Glasgow was overstretched and required the use of at least four courts. There is now a proposal that the High Court building should be altered so that there will be four courts. Four courts will not be nearly enough and there is no point in building four courts if we shall need six. I trust that this matter, and the shortage of space in the Court of Session, will also be looked at. Otherwise, I would give a warm welcome to this order.
On Question, Motion agreed to.
House adjourned at six minutes before nine o'clock.

  THE ROYAL DOCKYARDS
  THE ROYAL DOCKYARDS
  HEDGEROW DESTRUCTION
  HEDGEROW DESTRUCTION
  FISHERIES MINISTERS' COUNCIL MEETING, 3rd-4th DECEMBER
  FISHERIES MINISTERS' COUNCIL MEETING, 3rd-4th DECEMBER