Sitting of 15 January 1986

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

    Financial Services
    Mr. Michieasked the Secretary of State for Trade and Industry when he next proposes to meet the Confederation of British Industry to discuss the regulation of financial services.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Leon Brittan): I am always interested to hear the views of the Confederation of British Industry, but I have no plans for a specific meeting in the near future.
    Mr. Michie: Why did the Financial Services Bill not make it clear that we ought to have statutory bodies independent of the people whom they are supposed to be reviewing? That is successfully done in most of the financial markets in the rest of the Western world. Why cannot we have completely independent statutory bodies?
    Mr. Brittan: The independence of the Securities and Investments Board or its successor is unquestioned, but there is a real advantage in having regulatory bodies consisting of people who themselves are practitioners close to the market. That will lead to tighter rather than looser regulation.
    Sir Anthony Grant: Is my right hon. and learned Friend aware that many of us who are keenly interested in the subject of financial services sought to pose a number of questions to the Government in yesterday's debate, but we could not get an answer from my hon. and learned Friend the Under-Secretary of State because he was subjected to a most disgraceful muckraking campaign by the Opposition, with the result that serious points could not be answered? Will he find an opportunity to answer some of those questions in the near future?
    Mr. Brittan: I am sure that I or my hon. and learned Friend the Under-Secretary of State will wish to take the opportunity to put on the record the points that my hon. and learned Friend was unable to deal with yesterday. One is always suspicious of circumstances in which a Minister has answers to give but the Opposition seem reluctant to hear them.
    Mr. Ashdown: The Secretary of State might accept that while the personal reputation of the hon. and learned Member for Folkestone and Hythe (Mr. Howard) is
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    beyond question, it nevertheless remains the fact that Lloyd's is a major issue in the Bill, and to have a member of Lloyd's, of whatever status, pilot the Bill through the House of Commons is bound to be misunderstood—
    Mr. Speaker: Order. The question is concerned with the CBI.
    Mr. Ashdown: Does the Secretary of State recognise that the CBI and others are bound to misunderstand that, and that it is bound to undermine the standing of the Bill and, indeed, the probity of the Government? Will the right hon. and learned Gentleman reconsider the matter and, if the hon. and learned Member for Folkestone and Hythe cannot divest himself of his interest in Lloyd's, will he think of giving another colleague—
    Mr. Speaker: Order. That has nothing to do with it.
    Mr. Brittan: The CBI has made no representations to that effect.
    Mr. Gould: Given that one of the major objects of the Financial Services Bill, with which the CBI and everyone else is concerned, is the avoidance of conflicts of interest in the City, is it not odd that the Minister responsible for the Bill is himself involved in a conflict of interest'? Is the Secretary of State aware—
    Mr. Speaker: Order. The same principles apply to the Front Bench. The question must concern meetings with the CBI.
    Mr. Gould: This is a question relating to the regulation of financial services, which is the subject of the question on the Order Paper. Has the Secretary of State had his attention drawn to the Churchill-Butler statement on these issues, which has been endorsed by a line of successive Prime Ministers, the first paragraph of which reads: "It is a principle"—
    Mr. Speaker: Order. That does not relate in any way to discussions with the CBI. The shadow Minister must relate his question to that aspect.
    Mr. Gould: Nevertheless, this is a matter with which the CBI and everybody else in the City will be concerned. Will the Secretary of State ensure that if the Minister is unable for any reason to divest himself of the interest which he holds in Lloyd's, he will—
    Mr. Speaker: Order. That is quite out of order.

    Privatisation
    Mr. Nellistasked the Secretary of State for Trade and Industry if it is his intention to bring forward measures for the privatisation of all the publicly owned enterprises listed in the answer of 27 November, Official Report, column 870, within the lifetime of the current Parliament; and if he will make a statement.
    The Minister of State, Department of Trade and Industry (Mr. Peter Morrison): No. It is not expected that all the businesses mentioned in the previous answer can be wholly returned to the private sector during the current Parliament.
    Mr. Nellist: Before the Secretary of State departs the Front Bench, will the hon. Gentleman ask him whether he is aware that privatisation so far has cost working people in Britain over £1·4 billion as a result of the Government

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    under-pricing the assets that they have sold off, has given the mates of the Secretary of State in City institutions £300 million in fees and expenses, and has resulted in worse services and higher prices to working people?
    Rather than have further privatisation of publicly owned assets such as Rolls-Royce, which is in my constituency, why does the Minister not ask the Secretary of State to bring forward a one-day Bill, as did the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in respect of that company, to nationalise Westland plc and guarantee the jobs of the workers in Yeovil and the Isle of Wight?
    Mr. Morrison rose
    Mr. Speaker: Order. This is Question Time, not an Adjournment debate.
    Mr. Morrison: I can assure the hon. Member for Coventry, South-East (Mr. Nellist) that I put all those questions, precisely as he would have wished me to do, to my right hon. and learned Friend the Secretary of State. My right hon. and learned Friend agrees with me that all the hon. Gentleman's propositions are wrong.
    Mr. Kenneth Carlisle: Does my hon. Friend agree that denationalisation has been a good policy for this country? Have those businesses concerned not done better and begun to make profits? Above all, do not 90 per cent. of their employees now own shares in their own companies.
    Mr. Morrison: I agree with my hon. Friend, and must emphasise that the vast majority of employees now feel the benefits of privatisation.
    Mr. James Hamilton: Will the Minister confirm that the Government have given the British Steel Corporation a mandate to accelerate the company towards privatisation, with special emphasis on the tube-producing section? Will he confirm that that is Government policy?
    Mr. Morrison: I can certainly confirm that our policy, and that of the BSC, is directed towards a competitive and profitable industry.

    EC-USA Steel Arrangement
    Mr. Hayesasked the Secretary of State for Trade and Industry if he will make a statement on the EEC-USA steel agreement.
    Mr. Peter Morrison: The new EC-USA steel arrangement, ratified by the Council of Ministers on 10 December, is generally acceptable to the United Kingdom. The United Kingdom delayed ratification for several weeks, during which assurances were obtained from the United States authorities on adequate access for BSC exports of semi-finished steel to Tuscaloosa Steel of Alabama under an existing long-term contract.
    Mr. Hayes: I congratulate my hon. Friend on achieving what appears to be a satisfactory settlement to a very thorny problem. Does he accept that that was done through painstaking negotiation?
    Mr. Morrison: I assure my hon. Friend that the negotiations were long, complicated and difficult. However, it was essential for the steel corporation that we hung out for what we obtained.
    Dr. Bray: Does the Minister acknowledge that the level of exports of slabs to the United States, permitted by the United States, is nowhere near adequate to maintain Ravenscraig without Gartcosh?
    Mr. Morrison: I do not acknowledge that. As the hon. Gentleman is aware, by and large the deal that we obtained, with the exception of that part relating to Tuscaloosa, was based on current exports.

    Exporters (Assistance)
    Mr. Robert Atkinsasked the Secretary of State for Trade and Industry if he is satisfied with the financial and other support given to exporters by his Department.
    The Minister for Trade (Mr. Paul Channon): I am confident that support given to exporters by my Department is effective, but I am, of course, always looking for ways to improve it.
    Mr. Atkins: Is my right hon. Friend aware that many of us are extremely grateful to him for his work concerning exports? However, is he further aware of the criticisms of exporters and companies in various constituencies about the ECGD? They think of it as an umbrella available when the sun is shining, rather than when the need arises.
    Is my right hon. Friend aware that with many countries, such as Thailand and Mauritius a policy of soft loans would be beneficial to exporters in seeking to achieve success in those markets?
    Mr. Channon: I am grateful to my hon. Friend for his remarks.
    The ECGD has two duties, to provide an efficient support to exports and to break even, and that is difficult in view of the present economic conditions throughout the world.
    I shall consider my hon. Friend's point about Thailand and Mauritius. As he knows, I am still doing my best to help him and his constituents with the famous Bangkok bus project.
    Mr. Jim Spicer: Will my right hon. Friend take note that in this context the opportunities available to our exporters in Turkey are valuable, and will he pay particular attention to those opportunities?
    Mr. Channon: Of course I shall. I take note of my hon. Friend's view about opportunities in Turkey.
    Mr. Skinner: Does the Minister recall negotiations with a couple of firms which are trying to sell refuse collection vehicles to Ecuador but which are running into some trouble?—[Laughter.]— I know that this is different from normal practice, but that is what the game is about. Is the Minister aware that his Department has been holding up arranging export credit guarantees which would enable workers to build the refuse collection vehicles in the midlands and north-east Derbyshire? Is he further aware that more than 50 jobs are on the line? Why is the Minister causing all these difficulties by stopping the export credit guarantee arrangement? Will he deal with the matter, because if it is not finalised this week the jobs will go and the balance of payments will be the loser?
    Mr. Channon: I shall, of course, look at the matter. Ecuador has been a recipient of the DX facility from the ECGD. I do not know about the specific case that the hon.

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    Gentleman has in mind, but it is likely that it involves a case for which I have just agreed there should be export credits.
    Mr. Thurnham: Does my right hon. Friend agree that the purpose of exporting is to make us wealthier, rather than poorer?
    Mr. Channon: Yes, Sir.
    Mr. Maclennan: Is the Minister prepared to consider whether the financial duties requiring ECGD to break even are too tight and so defeat the purpose of existing exports?
    Mr. Channon: I shall certainly look at that, but I should be surprised if any rational man could come to that conclusion. The ECGD's cash flow problems are well known and serious. That is not surprising in a period of great economic difficulties throughout the world.

    Cars (UK Content)
    Mr. Woodasked the Secretary of State for Trade and Industry what steps he is currently taking to seek to persuade car manufacturers based in the United Kingdom to increase the United Kingdom content of their cars sold in the United Kingdom.
    Mr. Peter Morrison: My right hon. and learned Friend, I and officials meet senior management of the United Kingdom car manufacturers regularly to discuss this and similar matters, with encouraging results. For example, after a recent meeting with my right hon. and learned Friend, Vauxhall's chairman and managing director announced the company's plan to increase the United Kingdom content of the vehicles that it builds here from about 50 per cent. in the past year to about 60 per cent. by the end of this year.
    Mr. Wood: I thank my hon. Friend for that reply. Concern is caused when individuals are encouraged to buy British and some manufacturers, although based in this country, use a large imported content in their vehicles. Does my hon. Friend agree that good component manufacturers operate in Britain and that they should be encouraged by further purchases from firms such as Vauxhall?
    Mr. Morrison: I agree with my hon. Friend. As I said in my original answer, my right hon. Friend and I, and others in the Department, do everything that we possibly can to encourage purchases from home-based component manufacturers.
    Dr. Marek: Is the Minister aware that one of the steps that he can take is to ensure that we have a continuing supply of competitively priced and efficiently produced engineering steel in Britain? Will the Minister do everything in his power, if the United Engineering Steels company wishes, to ensure that a concast is installed at Brymbo steelworks?
    Mr. Morrison: The hon. Gentleman makes a particular and specific point. I agree that the component parts are important. I am happy to take his point on board and to look at the matter carefully. I can say no more than that at this stage.
    Mr. Roger King: Does my hon. Friend agree that there is a contrast between our open attitude in ensuring as free
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    a market as possible for the manufacture of cars in Britain and the attitude of other countries, notably Spain, which is conducting a blockade of our components?
    Mr. Morrison: Yes, but as my hon. Friend will be aware, negotiations are proceeding. We hope that they will be brought to a successful conclusion.
    Mr. Williams: As nearly all the increased import penetration in the car market since the late 1920s has arisen from the tied imports of Ford and Vauxhall—of course, we welcome the recent modest announcement—does the Minister agree that Vauxhall., with its massive trade deficit on vehicles, must make a far more substantial investment in major components, such as engines and transmissions, made in Britain, and possibly restore a design capability? Have not the Government made such investment more difficult with their record of five years of abnormally high interest rates? Interest rates are almost double what firms would have to pay if they went to Germany.
    Mr. Morrison: I would not describe the recent announcement as modest. It represents a significant increase. I agree with the hon. Gentleman that the more our domestic component manufacturers sell, the better. His wider question is a matter for my right hon. Friend the Chancellor of the Exchequer.
    Mr. Hanley: While recognising my right hon. and hon. Friends' considerable efforts in increasing the United Kingdom content of cars made in the United Kingdom, may I also ask that they recognise the tremendous contribution made by United Kingdom car component manufacturers to the content of cars made abroad? Will they encourage foreign buyers to buy even more components from the United Kingdom?
    Mr. Morrison: I entirely agree with my hon. Friend. The more that United Kingdom car manufacturers buy domestically, the more it will encourage foreign manufacturers to buy products made by British component manufacturers.

    Multi-fibre Arrangement
    Mr. Gouldasked the Secretary of State for Trade and Industry what progress has been made in preparing for the negotiations for the renewal of the multi-fibre arrangement.
    Mr. Lawlerasked the Secretary of State for Trade and Industry if he will make a statement on the current position regarding negotiations concerned with renewal of the multi-fibre arrangement.
    Mr. Channon: The Council of Ministers will be considering the Community's negotiating mandate at its meeting on 27 and 28 January. I announced the policy of the Government in the House on 9 May last year. I am meeting representatives of the industry and other interested parties next week.
    Mr. Gould: Is the Minister aware of the anxiety felt in all parts of the industry at the strong and persistent report that, despite his stated commitment to the effective renewal of the multi-fibre arrangement, British officials are in the van of those in Brussels who are pressing for a weakening of the import regime? Does he recognise that a substantial dilution of the MFA will cause immense

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    damage to the British industry, and will he assure the House that henceforth his officials will work religiously towards the achievement of an effective renewal?
    Mr. Channon: I assure the hon. Gentleman that the British officials in the negotiations are working under instructions from me and are following the Government's policy. I am surprised that the hon. Gentleman, with his experience in this area, should imagine anything else.
    Mr. Lawler: There is some anxiety and confusion in the industry about whether the Government believe that this should be the last such arrangement. Will my right hon. Friend clarify the position?
    Mr. Channon: We have never said that this should be the last MFA. A new MFA is likely to last for four or five years. The longer-term future of the MFA should be decided in the context of the proposed new GATT round of international trading talks.
    Mr. Torney: Is the Minister aware that the textile industry in Bradford has suffered for many years because of the importation of goods produced by competitors who use cheap labour? Is he further aware that if the multi-fibre arrangement is not renewed, or if it is weakened, it will create chaos in the woollen textile industry in Bradford and bring more unemployment to an area which already has above national average unemployment?
    Mr. Channon: The hon. Gentleman knows that it is the Government's policy that the MFA should be renewed. He will be pleased to know that during the first 10 months of 1985 wool textile exports increased by 14 per cent. to a record £518 million.
    Mr. Meadowcroft: Is it not true that many companies have coped and will cope with the diminution in the MFA, and that even within companies, some sections—for instance, spinning—will benefit from imports, whereas other sections, such as finished products, will suffer? Will the Minister remember that in any renegotiation we must be aware of that distinction and assist British companies to cope with the genuine free market at which they are aiming rather than protect them artificially?
    Mr. Channon: In general I agree with the hon. Gentleman. I am meeting representatives of the industry next week, and no doubt all those points will be considered in great detail.
    Mr. Sims: In the discussions, will my right hon. Friend take particular account of the views of the Hong Kong Government? Is he aware that although the present agreement is supposed to benefit underdeveloped countries the benefit has been very small and it has been to the disadvantage of Hong Kong? Will he ensure that the future agreement, if it does not help Hong Kong, at least does not penalise it?
    Mr. Channon: It is not for the British Government alone to decide the contents of the agreement, but we certainly take the view that it should give favourable treatment to the poorest developing countries and to developing countries with very low barriers to British exports, which includes Hong Kong.
    Mr. James Lamond: Is the right hon. Gentleman aware that import penetration in textiles is six times what it was 10 years ago and that unemployment is again increasing in the north-west, including my constituency,
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    which still depends heavily on the textile industry? Will he check again with his civil servants on the point made by my hon. Friend the Member for Dagenham (Mr. Gould), because authoritative sources on the employers' side suggest that British civil servants are taking a leading part in pressing for a much more liberal multi-fibre arrangement?
    Mr. Channon: I assure the hon. Gentleman, as I assured his hon. Friend, that the civil servants negotiating in Brussels do so with my express authority, and I keep a close control on and watch every detail of the negotiations. What the hon. Gentleman said is correct to a certain extent. That is one reason why we are seeking a renewal of the multi-fibre arrangement, which I believe met with the general agreement of the House last May.
    Mr. Madden: Is the right hon. Gentleman aware that workers in the textile industry suspect that Ministers at the Department of Trade and Industry are more interested in protecting their own political careers than in protecting the British textile industry? Does he accept that although there is no doubt that the Government are committed to renewal of the MFA, there is considerable doubt as to the extent to which the Government want a major relaxation of the controls? Will he now give a firm undertaking that the British Government do not favour or support any major relaxation of the MFA controls?
    Mr. Channon: The first part of the question says more about the hon. Gentleman than about Ministers at the Department. Any renewed MFA is bound to be more liberal than the present arrangement. I think that that is generally understood. As I have said, it should provide favourable treatment for the poorest developing countries and those with low barriers to British exports, and it should also help in relation to children's clothing. I am anxious to see a more liberal MFA, but one which does not damage the textile and clothing industry. The industry understands that very well, and I shall be discussing the matter in great detail with the industry next week.

    USSR
    Mr. Tom Coxasked the Secretary of State for Trade and Industry what was the total amount of trade between the Union of Soviet Socialist Republics and the United Kingdom for the year 1985.
    Mr. Channon: The full year's figures are not yet available, but the total amount of trade between the United Kingdom and the Soviet Union in the first 11 months of 1985 was £1,150 million.
    Mr. Cox: Is the right hon. Gentleman aware that as relationships between the Soviet Union and the rest of the world improve, so do opportunities for trade? Is he further aware that the United States has already sent major trade delegations to the Soviet Union to try to build up the United States' share of that trade? What help is the Department giving businesses in this country to do likewise? In particular, what special financial help is available to get contracts under way initially?
    Mr. Channon: The hon. Gentleman is quite right. Following Mr. Gorbachev's visit to this country, I believe that there are considerable prospects for increasing trade between Britain and the Soviet Union. In the short term that increase has not yet materialised, but at the annual

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    meeting of the British-Russian Joint Trade Commission on 6 and 7 February we shall be making a major effort to increase trade. Very good facilities are available for business men to trade with the Soviet Union, and they receive normal help from the Department. If the hon. Gentleman has any specific case in mind, perhaps he will get in touch with me.
    Mr. Terlezki: Is it conceivable that some of our industrial technology is being sold to the Soviet Union and may be used in the further development of Soviet star wars plans, nuclear weapons or, indeed, any type of weapon?
    Mr. Channon: I hope that that is not possible. My hon. Friend will be aware that there are controls under the COCOM arrangements to stop such exports.
    Mr. Tom Clarke: Is the Minister aware that the Gartcosh plant exports considerable orders to the Soviet Union as well as to other countries? Can he say when his Department will respond to the overwhelming recommendation of the Scottish Select Committee? If not, can he whisper to his right hon. and learned Friend and give the House the information?
    Mr. Channon: I admire the hon. Gentleman's ingenuity, but that is not a matter with which I have been dealing. However, my right hon. and learned Friend has heard what the hon. Gentleman has said.

    Northern Region
    Mr. Merchantasked the Secretary of State for Trade and Industry how much in regional grant aid has been made available to the northern region since 1979.
    Mr. Peter Morrison: A total of £913 million in regional grant aid has been made available to the northern region during the period I May 1979 to 30 November 1985.
    Mr. Merchant: Will my hon. Friend take this opportunity to reaffirm his personal commitment to beneficial regional aid? Does he agree that his answer gives the lie to those who claim maliciously that the Government have ignored and not helped the northern region? Will he confirm that the Government have given more than £1 billion to the northern region, including inner city aid?
    Mr. Morrison: I entirely agree with my hon. Friend. The northern region benefits more than any other part of the country from our regional policy, and rightly so. Some 97 per cent. of the working population are covered. My hon. Friend's sentiments are correct, whatever anyone else might say.
    Mr. Nicholas Brown: Does the Minister agree that, since 1979, 125,000 industrial jobs have been lost in the northern region and that the level of unemployment on Tyneside is among the highest in the country? Can he at least give us the assurance that aid from his Department to the northern region will not be reduced in the next three years?
    Mr. Morrison: As I said in reply to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant), the difficulties that the northern region is passing through are onerous, burdensome and personally unappetising to many families and people. That is why our regional policy is directed more towards the northern region than to any other part of Great Britain.
    Mr. Fallon: Does my hon. Friend agree that an the 1970s the northern region suffered from indiscriminate regional aid? Can he confirm that the new policy is working well and providing more jobs with the money used?
    Mr. Morrison: I agree. When my right hon. Friend the previous Secretary of State announced the new regional policy, it was directed towards job creation. That has to be the right way in which to target considerable sums of money.
    Mr. Campbell-Savours: Will the Minister confirm that in real terms there has been a reduction in regional assistance to the northern region since 1979, although there has been an explosion in unemployment? Will he answer the question yes or no? We do not want a flannel answer?
    Mr. Morrison: I shall answer yes, but I hope that the hon. Gentleman will allow me to qualify my answer to the extent that the money, which is still considerable, is now being targeted much more towards job creation.
    Mr. Beith: Did the Minister note the remarks of the retiring regional director of his own Department on unemployment? He expressed disquiet over the point that, in London, it seemed that if there were no riots in an area, there were no problems. Did the Minister agree with the emphasis that the regional director put on the need for public sector spending in the north-east? Does he fear that if something is not done we shall merely store up trouble for the future?
    Mr. Morrison: I did not see Mr. Atkinson's remarks, but I do not agree with them precisely, as presented by the hon. Gentleman. The northern region gets more regional aid than other parts of the country, in some of which there have been riots.
    Mr. Holt: In view of the failure of the Ministry of Agriculture, Fisheries and Food to locate Cleveland on the map, and in view of the failure of the Department of the Environment to decide how big the county of Cleveland is, and despite the Government's generosity so far in the northern region, will my hon. Friend confirm that, as the question relates to the availability of money, if any schemes from Cleveland are put forward the Government will not be ungenerous but will consider them sympathetically?
    Mr. Morrison: Regardless of what my hon. Friend says about Cleveland, he can rest assured that the county of Cleveland is well put on the map, by himself, constantly. The level of money given out depends on the number of applications. I shall be delighted to consider as many applications as I can.
    Mr. Ryman: The Minister has not been in the Department for very long, so he may not be fully briefed. Does he not appreciate that the origin of the trouble is that in 1979 the then Conservative Secretary of State for Trade abolished the special development area status of Blyth Valley, which includes Blyth and Cramlington. so wrongly earmarking regional aid? Consequently unemployment in Blyth Valley has risen astronomically as a direct result of the asinine regional policy of the Conservative Government.
    Mr. Morrison: I am well aware that the hon. Gentleman puts forward the case of his constituents assiduously. I know Cramlington, Blyth and Blyth Valley.

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    Unless I am gravely mistaken—and the hon. Gentleman will correct me immediately if I am—he will be aware that his part of the country gets regional aid to the greatest extent that is still possible.
    Mr. Neil Hamilton: Is my hon. Friend aware that in the recent review of regional policy his constituency was included in the map for selective assistance and mine was excluded—
    Mr. Speaker: Order. Is the hon. Gentleman's constituency in the north?
    Mr. Hamilton: Yes. Can my hon. Friend tell me what advantage might accrue from increasing unemployment in my constituency so as to reduce it in his own?
    Mr. Morrison: I am aware of the situation that my hon. Friend mentions because he and I have constituencies at either end of Cheshire. As he will be aware, the decisions were taken quite a substantial time before I became Minister of State.
    Mr. O'Neill: Does the Minister agree that the year to year figures for regional aid prove that the real value of regional aid has not just been cut in the northern region since 1979 but has been halved, as it has in every other depressed region? When will the Minister of State bring to the House the review proposals on regional aid that were promised by the Secretary of State for Trade and Industry? When will the Government start increasing regional aid instead of continuing over the next three years their policy of making cuts?
    Mr. Morrison: As I have said to other hon. Members, regional aid policy is now directed specifically towards job creation. As to when the review will be brought to the House, the answer is that it will be conducted during the year. The policy has been in existence for only 12 months. I cannot tell the hon. Member precisely when the review results will be ready. I hope that it will be towards the end of the year, but I cannot be held to that at this stage.
    Mr. Wrigglesworth: As the figure given by the Minister earlier contains a concealed dramatic decline in support for the northern region during the Government's term of office at a time when there has been an equally dramatic increase in unemployment, and as the number of grants depends upon the number of applications, can the Minister tell us what his Department proposes to do to increase the number of applications from the northern region and to increase the number of new businesses created there?
    Mr. Morrison: The hon. Gentleman will be aware that my right hon. and learned Friend the Secretary of State has made a particular issue of regional aid. He has made it abundantly clear to all and sundry that he is keen that there should be as many applications as possible. That is the message that has gone out to all regional offices, including the northern region.

    Books (Piracy)
    Mr. Baldryasked the Secretary of State for Trade and Industry what steps Her Majesty's Government are taking to curtail overseas piracy of books published in Britain; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): The
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    Government take every opportunity they can to press upon countries where piracy of British books is permitted to flourish the need for comprehensive and enforceable copyright law. We are in contact with several such countries on this issue at the present time and the European Community is in the process of detailed consideration of the link between intellectual property and trade policy as part of the Community's preparation for a new GATT round.
    Mr. Baldry: I thank my hon. and learned Friend for his reply. The Governments of South Korea and Signapore are at present actively considering fresh copyright legislation. What steps are the Government taking to ensure that such legislation adequately protects the interests of British publishers?
    Mr. Howard: We have recently written to the Government of Singapore suggesting some modifications to the first draft of the new copyright law that authorities have produced in that country. We are monitoring developments in South Korea and we shall make representations if it seems that that will be useful.

    Semi-finished Steel Products
    Mr. Cashasked the Secretary of State for Trade and Industry what are the prospects for exports of semifinished steel products; and if he will make a statement.
    Mr. Peter Morrison: United Kingdom steel producers export semi-finished products to many countries, and prospects in most of them remain broadly unchanged. However, I am pleased to say that exports to the United States should increase substantially under the British Steel Corporation's contract with the Tuscaloosa Steel Corporation of Alabama.
    Mr. Cash: Does my hon. Friend accept that, arising out of the minutes that have just been placed in the Library of a meeting with Sir Raymond Lygo, it is a matter of first importance, as my right and learned Friend the Secretary of State is reported as having said, to ensure that in relations with the United States, especially when dealing with semi-finished steel products, we avoid anti-British protection sentiments in the United States of America?
    Mr. Morrison: As I said in reply to an earlier question, when I think my hon. Friend was in his place, the negotiations on the deal with the United States Government over the Tuscaloosa Steel Corporation were extremely difficult. As my hon. Friend is aware, there is a protectionist wave that is evident throughout the United States. All such negotiations have to be handled carefully. Anti-American sentiments can endanger them.

    Johnson Matthey Bankers
    Mr. Dalyellasked the Secretary of State for Trade and Industry when the most recent annual return and accounts of Johnson Matthey Bankers Limited were received at Companies House.
    Mr. Howard: Accounts for the period ending 30 June 1985 were delivered to the registrar on 20 December 1985, and an annual return for 1985 was delivered on 31 December 1985.
    Mr. Dalyell: Following the experience of the Johnson Matthey affair, what have Trade Ministers learnt about the operational efficiency of the supervisory authority?
    Mr. Howard: My right hon. Friend the Chancellor has announced a review of banking supervision, which it is hoped will remedy the deficiencies that were revealed by the events at Johnson Matthey.
    Mr. Skinner: Is the Minister happy about the developments that are taking place in the Johnson Matthey business that relate to the accounts? What steps are the Government taking to ensure that the accounts are in a much healthier state, by dealing with people such as Mr. Sipra, who is in India and who owes Johnson Matthey about £70 million? Will he be brought back to this country so that he can repay some of that money? What steps are the Government taking? If they took steps to bring Mr. Sipra and others back to Britain, they might recover some of the money.
    Mr. Howard: The House will be aware that the Johnson Matthey matters are under investigation by the police. The fraud investigation group has been established. As for compliance with the law on the submission of accounts, there has been a substantial improvement over the position in recent years.

    Lloyd's (Regulation)
    Mr. Fatchettasked the Secretary of State for Trade and Industry if he will make a statement on the regulation of Lloyd's.
    Mr. Brittan: My hon. and learned Friend, the Parliamentary Under-Secretary of State with responsibility for corporate and consumer affairs, and I dealt with this matter yesterday during the debate on the Second Reading of the Financial Services Bill. I have nothing to add now.
    Mr. Fatchett: In the context of the inquiry that the Secretary of State established last week, will he assure the House that the inquiry will be completed before the Financial Services Bill completes its passage through the House? If any recommendations are made by those who carry out the inquiry, will the Committee that considers the Financial Services Bill, or the House, have sufficient time to act upon them and to implement them if necessary?
    Mr. Brittan: I cannot give that assurance. That is a matter for Sir Patrick Neill. He has suggested that he would hope to complete the inquiry in the summer. My hon. and learned Friend has said clearly that we do not think that it is at all likely that the Financial Services Bill would be a proper vehicle for statutory intervention, even if Sir Patrick came to the conclusion that further statutory intervention would be appropriate.
    Mr. Gould: As the Minister responsible for the Financial Services Bill and for the decision whether Lloyd's should be included within it—the Under-Secretary of State for Trade and Industry, the hon. and learned Member for Folkestone and Hythe (Mr. Howard)—is involved in a clear conflict of interest in this respect, may I ask whether the Secretary of State's attention has been drawn to the Churchill-Butler statement on these matters—a statement of principle that has been endorsed by a long line of Prime Ministers—which reads as follows:
    "It is a principle of public life that Ministers must"—
    Mr. Speaker: Order. The hon. Member must paraphrase, not quote.
    Mr. Gould: Very well, I will paraphrase the statement of principle, to the effect that where there is a conflict between a Minister's private interests and public responsibilities he must divest himself of those private interests. Given that the Parliamentary Under-Secretary is able to divest himself of his membership of Lloyd's, as I am advised, will the Secretary of State ensure that he either does that or passes the responsibility for the Bill to another Minister?
    Mr. Brittan: We have looked into this matter and explained it, and I am perfectly satisfied that my hon. arid learned Friend is well able to discharge his responsibilities with complete propriety.

    Ravenscraig Steelworks
    Mr. Wallaceasked the Secretary of State for Trade and Industry what representations he has received concerning Ravenscraig steelworks; and if he will make a statement.
    Mr. Peter Morrison: My right hon. and learned Friend and I have received a number of written and oral representations about Ravenscraig steelworks in the context of BSC's decision to close the Gartcosh works. Earlier today I replied on behalf of the Government, to the recommendations of the Select Committee on Scottish Affairs relating to Gartcosh. In that reply I stated that, having examined closely the recommendations and evidence, I remained of the opinion that the Government should not interfere with BSC's decision to close Gartcosh.
    Mr. Wallace: Will the Minister accept, as the overwhelming majority of Scottish opinion accepts, that the future of Ravenscraig is inextricably bound up with that of Gartcosh, and that any long-term guarantee to Ravenscraig would be meaningful and worthwhile only if it were extended to the Gartcosh plant? Notwithstanding the reply that he gave to the Select Committee on Scottish Affairs this morning, may I ask him to look at the figures now produced by the Scottish Trades Union Congress on recent trends and figures for markets for the steel produced there and to reconsider his decision, which is very damaging to Scotland and its industry, in the light of this new evidence?
    Mr. Morrison: I can, of course, appreciate what the hon. Gentleman says. There is very significant feeling in Scotland about Gartcosh and Ravenscraig. That is why we looked carefully indeed at all the evidence put to us. Having done so, we came to the conclusion that the decision of the British Steel Corporation on its future strategy, which was endorsed by the Government in August, should not be undermined.
    Mr. Ewing: How can the Minister honestly say that he has considered all the evidence and has come to the conclusion that he has reached when the evidence is all against his determination to bring about the closure of Gartcosh? How can the Minister condone a situation where the Government are prepared to spend nearly £10 million a year to keep Scottish workers unemployed when they could be investing that kind of money in the steel industry, not only of Scotland, but of the whole of the United Kingdom?
    Mr. Morrison: It is not for me to publish my reply' to the Select Committee in which I gave the reasons for the

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    Government's decision not to intervene in this particular matter, although I am sure that the hon. Member will understand them when he sees it. I perfectly understand that there is very strong feeling in Scotland about Gartcosh, but the hon. Member will be aware that there is overcapacity in the kinds of products made by Gartcosh. He will also be aware of the argument which says that Gartcosh and Ravenscraig are not inextricably connected.
    Mr. Hickmet: Does my hon. Friend agree that, in its attempts to survive, the British Steel Corporation, for the past three or four years, has had to take very difficult decisions involving the redundancy of many thousands of men? Now, when the corporation is profitable, excess capacity is being removed and, for the first time for many years, the corporation finds itself the most competitive steel producer in Europe, is it fair that the steel workers in Scotland should be exempted from some of the very difficult decisions that have had to be taken throughout the country, including in my own constituency, where 11,000 men have lost their jobs in two years?
    Mr. Morrison: I certainly agree that enormous progress has been made by BSC management and the trade unions within the corporation to make it into the most efficient steel corporation in Europe. I differ a little from my hon. Friend. I fully appreciated the fact that, in the short term at least, closure brings a bleak future for the 800 or so employees at Gartcosh and their families. It was in that context that I took my decision. I do not welcome taking such decisions.
    Mr. Strang: Is the hon. Gentleman aware that there is a lobby in the House of Commons today, representative of all walks of life in Scotland, to meet representatives from all parties in the House? Is he further aware that that lobby is clearly saying that the future of Gartcosh is crucial to the future of Ravenscraig, and that the future of Ravenscraig is vital to Scotland's future as an industrial nation? Will the hon. Gentleman recognise that Gartcosh is Scotland's industrial El Alamein and that it must stay open, even if that means driving every Tory out of Scotland?
    Mr. Morrison: Of course I realise that there is a lobby in the House today. Of course I realise also that there has been a consistent campaign. I am aware also that several representatives of the work force walked the whole way from Gartcosh to London. The hon. Gentleman should be aware that the very same representatives have had an opportunity to see me, which they requested, since the middle of October. That invitation has been extended, further extended and further extended again, and they did not decide to put their case. I wonder why.
    Mr. John Smith: Did the hon. Gentleman advise the Prime Minister to see the delegation that had walked all the way from Gartcosh? Why did she snub those representatives by refusing even to meet them when the request was put? Is the hon. Gentleman aware that there have been few issues in recent times on which majority opinion has been rallied more successfully than in the campaign to save Gartcosh? Why do the Government intervene in the Ravenscraig matter on an explicit political basis and claim credit for it, yet seem totally unable to intervene in the Gartcosh matter?
    Mr. Morrison: I made it quite clear to my right hon. Friend the Prime Minister that my door was open to see
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    the representatives of the work force, as it had been for more than three months. It seemed unusual, to put it mildly, that they did not take advantage of that. My door remained open. The right hon. and learned Gentleman is well aware of the fundamental difference between Gartcosh and Ravenscraig—[Interruption]—in terms of BSC's strategy.
    Mr. Speaker: Order. I fully understand and appreciate that there is an important debate to follow Question Time, but Question Time is important to those hon. Members with questions on the Order Paper.

    European Community
    Mr. Brightasked the Secretary of State for Trade and Industry what further progress has been made in opening up the internal market of the European Community.
    The Minister for Information Technology (Mr. Geoffrey Pattie): During the last six months the Council has agreed a number of measures which should facilitate the free movement of goods and services within the Community. The Internal Market Council of 12 December endorsed a detailed programme of action for the Netherlands and United Kingdom Presidencies with the aim of securing the adoption of a large number of further measures in 1986. A copy of this programme is in the Library of the House.
    Mr. Bright: In what respects does my hon. Friend think that the most progress will be made to the benefit of the United Kingdom, especially with respect to small businesses, which still find that some of the obstacles put in their way when exporting to Europe are difficult to overcome?
    Mr. Pattie: The Council has adopted a directive liberalising the marketing of unit trusts, co-ordinating national customs, computer developments and reducing clearance times at internal frontiers. My right hon. Friend the Prime Minister has taken an initiative that will ensure that all new proposals emanating from the Commission will be scrutinised with respect to the burdens that they will place on small businesses.
    Mr. Nellist: Does the opening of the internal market of the European Community include consortiums for the production of helicopters? If so, will the hon. Gentleman advise workers at Westland not to accept job guarantees from the leaders of such a consortium, especially as Lord Weinstock, the leader of GEC, axed 1,000 jobs in Coventry, South-East just before Christmas? Will the hon. Gentleman advise them that they cannot believe the truth of such a spokesman for a European consortium?
    Mr. Pattie: The hon. Gentleman should be aware that defence procurement measures, which are largely what are involved in the Westland case, do not come within the purview of the Commission.
    Sir Brandon Rhys Williams: Does the Department recognise that for Londoners and the whole British economy the most important aspect of this process is the achievement of a fully integrated European market for capital over the whole range of financial services, with London playing its proper pre-eminent part?
    Mr. Pattie: Yes.

    W. G. Allen (Tipton) Ltd.
    Mr. John Mark Taylorasked the Secretary of State for Trade and Industry what representations he has received about the conduct of the liquidator of W. G. Allen (Tipton) Ltd.
    Mr. Howard: I understand that my hon. Friend is referring to W. G. Allen & Sons (Tipton) plc. which is in receivership, not in liquidation. My hon. Friend has drawn my attention in the last few days to a number of points. I am considering them to see whether exercise of my Department's investigative powers is warranted.
    Mr. Taylor: In thanking my hon. and learned Friend for that reply and noting that he is to look into the matter, may I ask him to pay due attention to shareholder concern about inaccuracies in letters from the stock exchange, and the fact that a statement of affairs is still awaited? This company failed within three months of having a clean auditor's report. There seems to be some conflict of interest. Will my hon. and learned Friend bear those things in mind?
    Mr. Howard: I shall take all those matters into account.

    China
    Mr. William Powellasked the Secretary of State for Trade and Industry if he will make a statement on trading prospects with China.
    Mr. Channon: There are good prospects for steady growth in our trade with China, which has substantially increased in the last two years.
    Mr. Powell: Will my right hon. Friend confirm that China will be able to benefit from the substantial increases in the soft loan facilities which the Secretary of State should be able to announce? When does he expect that such loans will become available for China?
    Mr. Channon: We have already told the Chinese Government that in principle we are prepared to offer soft loans for project business. We had preliminary talks with them, and it will not be long before some of them come to fruition.

    Services (Trade Liberalisation)
    Mr. Hanleyasked the Secretary of State for Trade and Industry what progress is being make in his talks on liberalising international trade in services.
    Mr. Channon: The GATT contracting parties agreed at their meeting in November to set up the preparatory process for a new round in which the British Government think it essential that all relevant topics, including trade in services, should be included. Meanwhile, the United Kingdom continues to press for completion of the Community's internal market in services as in goods.
    Mr. Hanley: I had always understood that one of the main objectives of the European Community was freedom of trade by the removal of restrictive trade practices. Will my right hon. Friend give me some idea of when the current dispute over the German insurance market might be resolved and the possible prospects for the British insurance market when that has occurred?
    Mr. Channon: It will, of course, depend upon the decision of the court. I hope that the court decision in the
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    German case will be made in the not too distant future, and that it will be in favour of the position that we have adopted. Before long that would lead to substantial progress being made in this area.

    South Africa
    Mr. Flanneryasked the Secretary of State for Trade and Industry what volume of trade in cash terms was conducted with South Africa in 1983, 1984 and 1985, respectively (a) in imports and (b) in exports.
    Mr. Channon: The value of United Kingdom imports from South Africa were £765 million in 1983, £726 million in 1984 and £914 million in the first 11 months of 1985. The corresponding figures for exports were £1,111 million £1,204 million and £933 million respectively.
    Mr. Flannery: Is that not a comment on the political efforts of this Government at a time when apartheid in South Africa is grinding the whole of southern Africa into confusion? People are being shot down daily — [Interruption.]—murdered all over the place, because they are asking for some kind of equality. Why do we not take a leaf out of the American book and exert some pressure on that Government and make it clear to them that we are not willing to flourish while people are held in such miserable subjection in that country?
    Mr. Channon: I disagree with the hon. Gentleman's analysis of events. No one dislikes apartheid more than do my hon. Friends and myself. One of the major forces for reform in South Africa has been the activities of industry, and in particular British industry, in improving conditions for black workers in South Africa and protecting jobs both here and there over the past few years.
    Mr. Hill: Does my right hon. Friend agree that more publicity should be given to the number of jobs that rely on South African trade—in particular, the work that we do in the port of Southampton—and to the fact that many workers take the realistic view that South African trade provides their livelihood? Is it not the case that any way in which we can expand trade with South Africa would be good for this country's work force?
    Mr. Channon: My hon. Friend is right to point that out. There are probably hundreds of thousands of jobs in this country that depend upon trade with South Africa, and many thousands of jobs—including many among the black workers—in South Africa.
    Mr. Nellist rose—
    Mr. Madden rose—
    Mr. Speaker: Order. I shall take points of order arising directly out of questions.
    Mr. Madden: On a point of order, Mr. Speaker.
    Mr. Speaker: Arising directly out of questions?
    Mr. Madden: Indeed, Mr. Speaker. I ask you to reflect on your ruling about question 1 today. It involved the CBI and the regulation of financial services. You will recollect that you asked my hon. Friend the Member for Dagenham (Mr. Gould) and other hon. Members who wanted to ask questions about Lloyd's to desist. If your ruling stands, it would seem that in future you are prepared to accept questions about Lloyd's only if the question refers to

    1075
    Lloyd's, such as question 14. As it is an important matter, I ask whether you would reflect on the matter and give the House your advice.
    Mr. Speaker: Order. I can say to the hon. Member straight away that I reflected when the question was first put. I knew perfectly well that question 14 on the Order Paper was the question on which these matters should properly be raised.
    Mr. Nellist: On a point of order arising out of Question Time, Mr. Speaker. Would you consider later today expressing your sympathy, on behalf of the Opposition, with the Secretary of State for Trade and Industry for the fact that, following his loss of his memory yesterday, he has lost his voice this afternoon? He answered only two questions.
    Mr. Speaker: Order. I have lost my voice as well.

Solicitor-General (Letter)
3.32 pm
Mr. Tam Dalyell: On a point of order, Mr. Speaker. May I ask your help with a matter, about which I gave you notice this morning, relating to documents for the coming debate? It may be within the recollection of the House that on 6 January the Law Officers wrote a letter to the right hon. Member for Henley (Mr. Heseltine). It was partly and selectively leaked. For the purposes of greater accuracy, I went to the Library this morning to ask for the complete letter so that one could look at it in full and not selectively. The Library, with its normal efficiency and courtesy, found that it did not have the letter. The Library then rang the Law Officers' Department, which said that higher authority would have to be consulted before it could give me the letter. When higher authority was consulted, lo and behold, the letter was not forthcoming. The House does not have the full text of that letter. It is extremely unsatisfactory to make decisions or speeches on the basis of selectively leaked letters. I wonder whether there is any way in which you can manage to get before the House the full text of the letter written by the Law Officers and sent to the former Secretary of State for Defence.
Mr. Speaker: Order. I cannot help the hon. Member. Whether the Government choose to put a letter before the House is entirely a matter for them. I believe that the Leader of the House wishes to say something.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): So that we may keep these matters in perspective, may I say that in no sense do I represent higher authority. The House will appreciate that there are conventions relating to advice from the Law Officers. I can inform the House that the Solicitor-General has authorised publication of his letter of 6 January to the then Secretary of State for Defence, and arrangements are being made for it to be made available to the House later this afternoon.

Cruelty to Animals (Amendment)
3.34 pm
Mr. Harry Cohen (Leyton): I beg to move,
That leave be given to bring in a Bill to prohibit all tests of cosmetics, tobacco and alcohol and similar experiments on animals; to prohibit the draize eye irritancy test and the I.D50 poisoning test; to prohibit behavioural and psychological experiments on animals; to prevent use of animals in warfare trials or experiments; to abolish the practices of hare coursing, and fox and stag hunting; to prohibit the use of domestic animals in animal experiments; to increase the penalties for convictions of causing, procuring or assisting at the fighting or baiting of dogs, cats or other domestic animals; to ban the import and sale of bull terriers and the advertising of fighting dogs for sale, including the advertising of qualities related to fighting; to regulate laboratories in which animals are bred; to reconstitute the Advisory Committee on Animal Experiments; and to promote alternatives to animal experiments.
I stress that there is no connection between this matter and the next item of House of Commons business. [Interruption.]
Mr. Speaker: Order. The hon. Member has every right to be heard.
Mr. Cohen: I am pleased, Mr. Speaker, that this large gathering today is concerned with animal rights. The British enjoy a reputation as animal lovers. That reputation, I fear, exists more in the hearts and minds of decent British people than in the practices that are embodied in the law of the land.
The shameful reality is that 110 years have passed without improvements to the Cruelty to Animals Act 1876. My Bill seeks to bring the law closer to public perceptions of our humanitarian protection towards animals, and to distance future legislation as far as possible from the barbaric brutality allowed at present. In so doing, my proposals run counter to the Conservative Government's legislative intentions on this matter, which are to afford less protection to animals while employing a deft legislative "newspeak" to hoodwink and placate public opinion.
The Government are too squeamish to use the word "experiment" and have substituted the word "procedure" to ensure that public sensitivities are not offended while appalling cruelty to animals will actually be allowed to increase. This is a betrayal of the public's heartfelt wish to provide proper rights for animals, to see an end to barbaric blood sports and to end unnecessary animal experiments.
My Bill puts a stop to the obscenity of killing animals in the name of sport by abolishing the practices of hare coursing, fox and stag hunting. This is a Labour party policy which I should like to see enacted immediately. To their shame, the Conservative Government have twice overruled the Northern Ireland Assembly's unanimous votes to outlaw hare coursing. Perhaps this tendency to override public and parliamentary opinion will diminish somewhat when the Government are reminded that a recent poll of Conservative voters showed a majority opposed to all forms of hunting. The measure that I propose not only puts a stop to the rights of sadists to enjoy the fun of the kill while devastating our countryside but also sorts out their less well heeled blood brothers who support dog fighting. In line with RSPCA policy, my Bill would substantially increase penalties for convictions for causing, procuring, assisting or aiding and abetting at the fighting or baiting of dogs, cats and other domestic

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animals. It would also ban the import and sale of pit bull terriers and the advertising of fighting dogs for sale, including qualities related to fighting.
There should be stiff prison sentences for those indulging in dog fighting. The traffic in domestic animals for animal experiments must be halted. This shady enterprise is such big business in residential areas that pet shop owners in my constituency display notices warning animal owners to keep their pets under constant surveillance. What are we to make of the standing of scientific establishments which apparently fail to notice that their stock of animals for experiments consists of every breed under the sun, obviously tamed for domestic life and pining for human contact? Such establishments should have their licences withdrawn instantaneously and permanently. My Bill ensures that laboratories may obtain animals of specified breeds only from licensed breeders who can produce proper evidence of the legitimate origin of these animals. In addition, breeding establishments will be subject to regular and spot inspection and the export of animals will be banned.
The obscenity of current animal experimentation in which over 67,000 animals are killed every week is tackled in my Bill. My objective is to see animal experiments phased out within a decade. However, the overwhelming majority of tests could be abolished immediately, starting with a ban on all animal tests for cosmetics, tobacco and alcohol. The Bill would also immediately end the Draize eye test where irritants are administered without pain relief until the animal's eye bursts. The LD50 test, whereby animals are painfully poisoned until 50 per cent. of them die, would also go. In line with the Labour parliamentary campaign group for animal rights, there would be a prohibition on the use of animals in warfare trials in which they are deliberately shot at, irradiated and subjected to germ and chemical warfare. Behavioural and psychological tests on animals in which they are deliberately driven to madness for so-called "insights" into human psychosis will also cease.
At present, the Government employ 15 inspectors to check on the 21,000 vivisectionists who cut up three million animals each year. That ludicrous situation will be transformed under my Bill as a result of greater powers for the Home Office advisory committee. At present the committee is packed with either licensed experimenters or pro-vivisectionists, including Dr. Coid, the doctor responsible for designing the primate cages which featured so infamously in the recent prosecution of the Royal College of Surgeons. It is essential that the independence of the committee should be firmly established, with membership consisting of persons with a knowledge of the subject but no vested interest whatsoever by way of monetary gain or job dependency. The primary function of the committee will be the responsibility for securing a continuing and sizeable decrease annually in animal usage in laboratories.
1080
The new independent composition of the advisory committee will also free its decision-making processes from the undue influences of the drug companies. As the Sunday People so accurately observed:
"The name of the game is profit and to hell with animal suffering".
Research into disease prevention has been passed up because drug companies prefer animal experiments for their latest wonder cures. Thus, animals suffer in their millions as drug companies race to develop so-called "new" products, most of which are simple recombinations of other brands, an increasing number dangerous to humans—such as Thalidomide, Eraldin and Opren. Tackling causes and the prevention of illness are not as profitable as "cures", even if the latter means countless unnecessary human and animal deaths in the process. Yet, the Research Defence Committee, a pro-vivisection group funded by the drug and cosmetic multinationals, confidently assesses the Conservative Government's new legislation with the comment:
"I cannot think of a single experiment allowed now that will not be allowed in future."
Medical research which is so bound up with the fortunes of drug companies lacks any incentive to develop alternative research. The Conservative Government, as the political voice of big business, ensure that the purse strings of state research remain controlled by the vivisectionists. They have allocated a derisory £200,000 over three years for the consideration of alternatives to animal experiments. In this scenario, human life is indeed held cheap, while animal protection counts for nothing. In conclusion, my Bill forces the parliamentary, scientific and commercial establishment to face up to the failure of their endless experiments on animals, to take account of the horrendous issue of assessing the pain and suffering endured by animals, while at the same time insisting upon medical research to follow a more civilised and effective path by using non-animal alternatives. My proposals, not the Government's, are more in tune with what the public want.
This Bill, not the Government's, recognises and responds with genuine measures to meet the growing public disquiet about animal experimentation and barbaric sports. My Bill is a Socialist measure aimed to uphold the value of human life, to free sport from a sordid blood lust and provide protection and rights for animals. It is an essential element towards the achievement of a safe and healthy environment for all living creatures in a civilised society. As Labour's programme says:
"We are partners on this planet with animals, not their masters."
Question put and agreed to.
Bill ordered to be brought in by Mr. Harry Cohen, Mr. Tony Banks, Mr. Jeremy Corbyn, Mr. Brian Sedgemore, Mr. Roland Boyes, Ms. Jo Richardson, Mr. Doug Hoyle, Mr. Allan Rogers, Mr. James Lamond, Miss Joan Maynard, Mr. Martin Flannery and Mr. Robert N. Wareing.

CRUELTY TO ANIMALS (AMENDMENT)
Mr. Harry Cohen accordingly presented a Bill to prohibit all tests of cosmetics, tobacco and alcohol and similar experiments on animals; to prohibit the draize eye irritancy test and the LD50 poisoning test; to prohibit behavioural and psychological experiments on animals; to prevent use of animals in warfare trials or experiments; to abolish the practices of hare coursing, and fox and stag hunting; to prohibit the use of domestic animals in animal experiments; to increase the penalties for convictions of causing, procuring or assisting at the fighting or baiting of dogs, cats or other domestic animals; to ban the import and sale of bull terriers and the advertising of fighting dogs for sale, including the advertising of qualities related to fighting; to regulate laboratories in which animals are bred; to reconstitute the Advisory Committee on Animal Experiments; and to promote alternatives to animal experiments: And the same was read the First time; and ordered to be read a Second time upon Friday 7 February and to be printed. [Bill 58.]
Opposition Day
[3RD ALLOTTED DAY]
Opposition Day

  Westland plc
  Mr. Speaker: Before we embark upon this important debate I must announce to the House that I have selected the amendment in the name of the Prime Minister.
  3.45 pm
  Mr. Neil Kinnock: I beg to move,
  That this House, noting the serious allegations made in public by the former Secretary of State for Defence, the Right honourable Member for Henley, about the conduct of the Government in respect of Westland plc, and aware of the major implications for defence procurement, manufacturing industry, technology and employment, calls on Her Majesty's Government to make arrangements to set up a Committee of the House to consider the issues raised by the matter, ensuring that such a Committee would be provided with all the relevant documents and letters, many of which have been publicly referred to but not yet published, in order to establish for the nation a truthful record of the events relating to the present and future position of Westland plc.
  This debate is about helicopter manufacture and the industries related to it. It is about technology and certainly about employment. It is, a debate about defence procurement policies and about European co-operation. Indeed, it has now apparently become an issue which affects the stability of interest rates.
  The debate on Westland plc is about all those things, but most of all it is about something even more elementary, even more basic in our political life. For I consider that the debate most of all is about the truth; that is why, despite her reluctance to come to the House to make a statement, it was essential that we secured the presence of the Prime Minister to speak in the debate today. It is not just because of the complete collision of testimony about Government conduct in relation to the affairs of Westland plc, nor indeed because the right hon. Lady has ultimate responsibility for all the activities of Government; it is mainly because of the right hon. Lady's particular system of rule and her particular involvement in the issue of Westland plc.
  That the Prime Minister is domineering is not a matter of contention or doubt. The whole country knows that. Indeed, there is a growing entertainment industry based entirely upon that fact. What is less obvious and much more serious is that that domineering attitude in a system of Cabinet government in a democratic country has enormous effects on the whole course and style of the way in which our country is governed.
  In such a system of Cabinet government it is simply not possible to dominate absolutely and continually on the merits of argument because there are always other good arguments in fair contention. Nor is it possible to dominate always by patronage or even by petulance. To dominate absolutely it is necessary for the domineering to employ other techniques, and plainly they include tactics which go well beyond the bounds of clever politics and become systematic connivance against Cabinet colleagues for the purpose of achieving a particular end.
  When those people who will not concede to domination or bullying or will not back down, really make up their minds they must be undermined, isolated or bypassed. The

  1083
  right hon. Lady has had some success with the system of rule by overrule because she has taken the precaution, generally speaking, of surrounding herself with some jelloid Ministers. But sooner or later someone was bound to resist, even to the point of resignation, and that day arrived last Thursday.
  In the course of that resignation the right hon. Member for Henley (Mr. Heseltine) made some serious charges about the conduct and course of the Government. His charges relate mainly to the events on 4 and 18 October; 4, 5, and 9 December; 11 and 12 December; 30 and 31 December; 6 January, when the Solicitor-General entered the fray; and the 8 January meeting between the Secretary of State for Trade and Industry and Sir Raymond Lygo, chief executive of British Aerospace.
  Those charges made by the right hon. Gentleman must be answered in detail by the Prime Minister today. Some of them should be easy to deal with if they are false or at all misleading. For instance, the right hon. Lady can determine the veracity of the right hon. Gentleman about the minutes of meetings on 4 and 18 October, to which she has continually referred, by publishing those minutes, including all the details of the meetings that took place and the consideration that took place. It would not be a great leap out of security or secrecy for her to do so.
  Before Christmas, sections of the minutes of the 4 October meeting were freely discussed and quoted in the press. Last Monday night, on "Panorama", the minutes of the 18 October meeting were quoted in part. Indeed, The Times on 14 January reported that the Government
  "took the unprecedented step of quoting from the minutes of two ad hoc meetings of ministers held on December 4 and 5 in an attempt to undermine Mr. Heseltine's resignation statement."
  Therefore, it cannot be too much to ask that the same treatment is given to the minutes of other ad hoc meetings in October.
  In his resignation statement, the right hon. Member for Henley alleged that, after his efforts in November—undertaken at least with the acquiesence of the Government—to secure a recommendation from the European national armament directors to extend the 1978 declaration on helicopter procurement, he encountered unexpected and strong opposition to his views at an ad hoc ministerial meeting on 4 December, and then at another on 5 December. He encountered further strong resistance at the Economic Committee meeting on 9 December, so he tells us, and that opposition came not from the Secretary of State for Trade and Industry but from the Prime Minister. It appears that that opposition was based on the right hon. Lady's efforts to set aside the recommendation of the national armaments directors that the right hon. Gentleman had painstakingly accumulated in the days at the end of November.
  I must ask the Prime Minister why she took that course at those meetings and why she has pursued that course so avidly. I must ask her the question that The Times put yesterday, about
  "why, and in what circumstances, the decision of the national armaments directors in favour of European helicopter procurement was set aside."
  The Times continued:
  "Was it merely not endorsed, as Downing Street would have us believe, or deliberately shelved, as Mr. Heseltine argues? If it was shelved why was it shelved? Mrs. Thatcher has to give the House the clearest possible answer on this point. It is naive to think that there is something as simple as non-intervention in
  1084
  matters of this kind, particularly where the Government is so important a customer of the company concerned. But it is evenhandedness that is the Government's claim in the Westland affair. Mrs. Thatcher needs to explain exactly how her administration's practice matched its rhetoric."
  There are three crucial questions. First, why was the policy adopted? Was it through the persuasiveness of Sir John Cuckney, with all the great weight of his experience and expertise? Was it, as has been alleged, to do with the strategic defence initiative, or with an anti-European sentiment or for some other reason? We need to know that, and this House and the country deserve to know that.
  Secondly, how was the policy adopted without the benefit of collective decision by the Cabinet, which plainly was the case?
  Thirdly, how does practice in the privacy of Government match the public declarations to this House and to the country about the Government's policy? The right hon. Member for Henley says that there is no match; he says that there is no connection between private machinations and public declarations. Someone, he plainly implies, has been telling the truth; someone has not been telling the truth.
  The right hon. Gentleman says that there was an even-handed policy for public display and a private policy of favouritism for actual use. That is a very grave allegation, but like so many others it could be easily disproved if it were false or even inaccurate. It would be supreme folly for the right hon. Gentleman to make such charges if they could not be substantiated. So I ask the Prime Minister whether the circumstances of 4 and 18 October and of 4, 5 and 9 December were as the right hon. Gentleman has alleged. She can tell us. She can prove or disprove what he said and she must do one or the other.
  Much the same applies to the E Committee meeting of 9 December. There are two versions of events. From the right hon. Member for Henley we hear that it was an inconclusive meeting that did not resolve policy and which decided that there should be a further meeting on 13 December. From the Secretary of State for Trade and Industry we hear, in answer to my colleagues, my hon. Friends the Members for Monklands, West (Mr. Clarke) and for Birmingham, Perry Barr (Mr. Rooker), that the 9 December meeting was a conclusive meeting which resolved policy and set a deadline of 13 December for the European submission.
  These are the two versions. They are in stark conflict and collision, one with another. All that we have to rely on to make up our minds at this stage is the circumstantial evidence as to which version is correct. The circumstantial evidence is that, some time before the Cabinet meeting of 12 December—probably on 11 December—the relevant Deparments were notified by the Cabinet Office that the meeting on Friday was cancelled. One can cancel a meeting only if it has been proposed.
  Another meeting was fixed for 13 December. We want to know the truth about that, because that is a fulcrum date. This is a crucial set of circumstances. There is essential testimony in public by both right hon. Gentlemen, and the House must decide, because by that decision we shall be deciding what course the Government really have been undertaking and whether there was one course for private use and another for public consumption.
  The Prime Minister can prove or disprove these sets of circumstances and she must do one or the other. We have the word of two right hon. Members. This is an honourable

  1085
  House which accepts honourable words. What are we to do when there is such an exact conflict in the description of the circumstances, the status and even the existence of the meeting—the alleged meeting—of 13 December?
  The choice is invidious for us. The conclusions can be reached only by the calling of witnesses. The witnesses are not all hon. Members elected to the House. Fortunately, however, the House has, over the years and in its wisdom, developed a procedure which permits witnesses to give evidence. That is why we consider that it is sensible for all the parties concerned—in the Government, in the public service and elsewhere—who have been witnesses to the various events to appear before a Committee of the House so that a proper assessment can be make and so that they can develop and demonstrate their version and the veracity of their version of events.
  Mr. Eric Forth (Mid-Worcestershire): I am grateful to the right hon. Gentleman. He has been seeking to lecture the House on the workings of Cabinet government. Can the right hon. Gentleman explain the basis of his insight into the workings of Cabinet government? Can he tell us to whom among his colleagues he has spoken about the workings of Cabinet government or what his other sources of information or authority are?
  Mr. Kinnock: The issue at stake is much more basic. I can tell the difference between a truth and an untruth. I know a stink when I smell one.
  The Committee that we seek, which could be convened and which would be of such utility to all involved, would not just consider the veracity of two right hon. Members. The Committee would inevitably consider why a policy change was favoured and why that policy was so rigorously followed by the Prime Minister from 3 December—so enthusiastically as to inspire the grave allegations that she was ill-tempered and, more seriously, that a meeting was cancelled. There were even implications that a Cabinet minute did not carry an account that had been insisted upon by a member of that Cabinet.
  Following the E Committee meeting of 9 December, events marched on. On 13 December, without benefit of further Government consideration of the options, the Westland board met and dismissed the European consortium proposals. In the wake of that, on 16 December, the Secretary of State for Trade and Industry was able to provide the House with what ha must have considered to be a fait accompli that would quieten the issue. He was unsuccessful and the conflict continued. The rival camps exchanged propaganda barrages, to such an extent that, when the Cabinet met on 19 December, we are told that it was decided, presumably collectively, that the lobbying had to stop. However, it did not stop and the contest continued. The allegation is that, far from allowing collective decision-taking to work through the Cabinet and through departmental responsibility, the Prime Minister became even more deeply involved. It is said that she did not direct Sir John Cuckney's letter of 30 December to the appropriate defence procurement department, but to the Department of Trade and Industry, and that she accompanied that directed missile—[Interruption.] I should have said missive, but missile will do. She accompanied it with guidance that the then Secretary of State for Defence considered to be materially misleading.
  The Prime Minister then set the Law Officers on the right hon. Member for Henley when he decided to
  1086
  communicate directly with Lloyds merchant bank. someone made sure that the Solicitor-General's letter became public knowledge by leaking extracts.
  The activities following 16 December ranged from the extremely unconventional in Government to the highly disreputable in Government. In the Sunday Telegraph this week Mr. Ian Waller, on behalf of many others, stated:
  "This Government has been ruthless in persecuting journalists and civil servants for trivial breaches of the Official Secrets Act, yet Whitehall has been like a sieve in recent weeks—including Heseltine's ministry, which unsuccessfully prosecuted Ponting and had a clerk, Miss Tisdall, jailed. The most flagrant breach of all was the leak of a letter from the Solicitor-General damaging to Heseltine's case. Again it stretches credulity to believe this was an accident and not authorised at a high level."
  Mr. Waller asked the question that we all ask:
  "Will Mrs. Thatcher act against the culprit—or does she have one rule for top people and another rule for clerks?"
  We seek an explanation of why a Government who were so sensitive on Monday of this week about the British Aerospace letter were apparently so insecure on Monday 6 January. Did the leak of the Solicitor-General's letter come about by misfortune—as Oscar Wilde might put it —by carelessness, or as a result of something much more devious than either of those possibilities? The Prime Minister is in a position to tell us the answer, and she must tell us. Was that occurrence inadvertent or was it simply a further episode in the efforts to ensure that the arguments for one option were muted so as to elevate the attractiveness of the other option' that faces Westland?
  On the matter of muting, we come to last Wednesday's meeting between Sir Raymond Lygo and the Secretary of State for Trade and Industry. On Monday, my right hon. and learned Friend the Member for Monklands, East asked the Secretary of State for Trade and Industry why the Secretary of State had decided to speak to Sir Raymond Lygo at all on 8 December. The Secretary of State for Trade and Industry quaintly replied that since Sir Raymond happened to be in the Department of Industry building,
  "it would have been wholly artificial if I did no: see Sir Raymond."
  What was wholly artificial was the version of events provided by the Secretary of State for Trade and Industry.
  We have the private and confidential letter in our possession and the records of the House to demonstrate that point more than adequately. The Secretary of State for Trade and Industry said:
  "Let me make it clear that it is untrue to say that in the course of the meeting I made any suggestion that British Aerospace should withdraw from the European consortium or that its participation was contrary to the national interest."—[Official Report, 13 January 1986; Vol. 89, c. 781.]
  He said that it was untrue. The Prime Minister's letter to British Aerospace, which was published this morning, backs what she describes as his recollection, shared by others present at the meeting that took place at about 5 o'clock last Thursday evening.
  Let us examine Sir Austin Pearce's letter. He states:
  "Sir Raymond returned directly to a special Board Meeting of British Aerospace which was in progress and made a 1·1111 report of his conversation to the Board. He also wrote down all the salient points that had been made to him. His report stated that the following points were specifically covered by the Secretary of State."
  For brevity I shall move on to point 6:
  "that what we were doing was not in the National Interest
  7. That we should withdraw."

  1087
  Can anyone imagine a plausible reason why Admiral Sir Raymond Lygo should fabricate those details of the conversation?
  Sir Paul Bryan (Boothferry): Read No. 4.
  Mr. Kinnock: The hon. Gentleman calls for No. 4. The letter is now a matter of public record. I invite the whole country to read all the points in the letter. But that does not move one inch from the fact that the Secretary of State for Trade and Industry said on Monday that it was untrue that he had said during the meeting that British Aerospace was acting against the national interest and that it should withdraw. That point is not negatived, offset, reduced or diluted.
  Sir Paul Bryan: Read No. 4.
  Mr. Kinnock: Can anyone imagine that a man of Sir Raymond's character—a chief executive of a corporation that sells 80 per cent. of its products to the Government—would leave the Department of Trade and Industry and minutes later, half a mile away in Pall Mall, bear false witness to the assembled board of British Aerospace? Can anyone seriously believe that? The Secretary of State for Trade and Industry said that it was untrue. The implications for Sir Raymond Lygo are obvious, and extremely serious.
  There is perhaps only one inaccuracy in the proceedings described by Sir Austin Pearce in his letter and by Sir Raymond Lygo in his report. The views of Sir Raymond Lygo and Sir Austin Pearce acknowlege the fact that they are not men given to exaggeration or over-reaction. The letter that we have all now read probably understates the atmosphere and the nature of the pressure of the Department of Trade and Industry meeting.
  The House can hear directly from the Secretary of State for Trade and Industry, but it cannot hear from Sir Raymond Lygo, despite the gravity of the problems that he faces as a consequence of the Secretary of State's statements. The House owes Sir Raymond Lygo the opportunity to present his full testimony and full record to a Committee of the House. Far be it for me to save the Secretary of State for Trade and Industry by calling for his resignation, but I cannot see how he can bring himself to stay in his present position.
  Only one question remains in my mind about the Secretary of State for Trade and Industry: is he a culprit, or a victim, in this matter? The Prime Minister sits next to him today, as she did on Monday. Is he her agent, or has he been acting on his own? That is the question which the Prime Minister must answer. She must answer it, clearly and honestly, now.
  4.10 pm
  Mr. Tam Dalyell: On a point of order, Mr. Speaker. It is in the recollection of the House that, very courteously, the Leader of the House said that the Law Officer's letter had been made available. I went to the Library where, equally courteously, I was told that the letter is embargoed, "until the Prime Minister has sat down".
  Mr. Speaker: That is not a matter for the Chair.
  4.11 pm
  The Prime Minister (Mrs. Margaret Thatcher): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
  "endorses the Government's consistent objective of supporting Westland plc in its efforts to achieve a financial reconstruction, of supporting United Kingdom participation in collaboration with North Atlantic Treaty Organisation allies and of safeguarding the interests of the company, its employees and its shareholders, recognises the efforts of the Government to ensure that the Westland board had more than one option to secure that objective; affirms that it will be for the company to determine its future course of action; and further recognises the competence of departmental Select Committees of the House of Commons to consider the issues raised by these developments."
  I do not think that there is a great deal to answer in what the right hon. Member for Islwyn (Mr. Kinnock) said. He seems to have made certain conclusions long before the debate started. In so far as he asked me questions, I will try to answer them during the course of my comments.
  At the outset, I wish to refer to the correspondence between Sir Austin Pearce and me, which has been published today, to which the right hon. Gentleman referred, dealing with the meeting on 8 January between my right hon. Friend the Secretary of State for Trade and Industry and Sir Raymond Lygo. My right hon. Friend the Secretary of State has given the House his account of that meeting, and the record of the meeting taken by the Department of Trade and Industry has been published today in full—every single word has been published today in full. I fully accept that the record taken by the Department of Trade and Industry is an accurate and fair account of what was said. I very much regret that there is a different recollection in some respects of what was said, but I believe that when the House has had an opportunity to study the record of the meeting right hon. and hon. Members will see that the Secretary of State for Trade and Industry said that he had no view on the merits of the two offers, that it was for the shareholders of Westland to make a decision, and that it was not in the national interest for the present uncertainty to drag on. There are many in the House who will agree with that sentiment.
  I have today received a further letter from Sir Austin Pearce, which has also been published. In it he expresses the hope that we shall now be able to concentrate on the important issues concerning the future of Westland. I agree. It seemed to me that the right hon. Member for Islwyn did very little of that.
  This afternoon, therefore, I shall first set out the approach taken by the Government towards Westland during its period of difficulty. I shall then deal with the charges—
  Mr. John Gorst: Before my right hon. Friend leaves the Civil Service minute, may I ask whether she believes, considering the important matters that were discussed on that occasion, and the fact that the civil servants' record was dated two days later, that that record is remarkably skimpy and short? Is she certain that it was not a belated and hindsighted record?
  The Prime Minister: No. Ministers and civil servants will have occasion deeply to resent what my hon. Friend has said. The record was taken contemporaneously and was dictated two days later. There were several people present who confirmed that the record is accurate. I do not find it sparse. It is a full account of what happened, and is very much fuller than the alternative which is available in the other letter.
  Mr. David Steel: The official record of that matter need not be in doubt, because what is important is the sentence near the bottom of page 3 of Sir Austin's letter, where he says:
  "Whatever the words used were meant to convey, the message was perfectly clear."
  The Prime Minister: That is why it was absolutely vital to get out the full record of the meeting at the Department of Trade and Industry, unusual though it was. The meeting was attended by several people who confirmed that that is a correct record of the meeting.
  I shall set out the approach taken by the Government towards Westland during its period of difficulty and then deal with the charges that have been made against the Government and against me personally. My right hon. Friend the Member for Henley (Mr. Heseltine), who served in the Cabinet for more than six and a half years, has now made accusations about what he considers to be the breakdown of constitutional government. The House will therefore expect me to answer that charge.
  It may help the House if I begin by setting out the developments in relation to the Westland company during the past 18 months. I do this to demonstrate to the House: first, that the company and the Government's approach to it have been the subject of the most thorough collective consideration by Ministers; secondly, that during this period the Government have been aware of the company's precarious financial position and of the particular legal obligations that that imposes on the board of directors; thirdly, that the Government wished the board of Westland to explore fully all possibilities for minority shareholdings in the company, including what has become known as the European option. It is important that the company should take the course which it judges to be the best safeguard for the future of the work force and the shareholders. Fourthly, I shall show that the defence implications of the company's future were given full weight in our discussion, which took account of the need to ensure that our armed services are given the best equipment to meet their operational requirements. I will then come to the circumstances surrounding the resignation of my right hon. Friend the Member for Henley on 9 January.
  Mr. Dave Nellist: Given the large-scale movements in shares of Westland during the past four to five days, and the possibility—some would say likelihood — of Friday's meeting blocking both offers to Westland, and since the Prime Minister's fourth item said that defence was the highest priority for the Government, have the Government considered following the example of the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in 1971, and pushing an Act through the House in one sitting to secure the public ownership of Westland so that the jobs of the workers in Yeovil and the Isle of Wight can be properly guaranteed? Any surplus capacity could go to civilian use, such as making helicopters for air-sea rescue and food transport in Africa.
  The Prime Minister: I shall deal with that point later. Clearly the Opposition line is that the whole lot should be nationalised at the taxpayers' expense.
  The fact that Westland faced a difficult situation was first brought to the Government's attention late in 1984. We were told that the company's problems stemmed partly from a decline in the market for civil helicopters, including
  1090
  delays on the prospective Indian order for 21 W30, helicopters and partly from the lack, in the short term, of large orders from the British armed services.
  The Government remained in close contact with the firm in the latter part of 1984 and early in 1985. Westland's difficulties were the subject of discussion at both ministerial and official levels between the Department of Trade and Industry and the Ministry of Defence. Careful consideration was given to what action might be open to the Government to help Westland—in particular, whether the services' helicopter requirements could be met by the purchase of the Westland W30. The Government concluded that we could not justify giving Westland orders for helicopters for which our armed forces had no operational requirement. It was judged that there was no defence interest that called for a rescue operation by the public sector. Instead, Westland should be encouraged to seek a market solution to its difficulties that would involve an injection of private sector capital. That was and remains the Government's position.
  It was against that background that the Bristow Rotorcraft company announced an offer for Westland in April 1985. As the scale of Westland's problems became apparent to him, Mr. Bristow asked the Government a number of questions, including whether we would procure the W30 helicopter. I took the chair at meetings of Ministers on 18 and 19 June to settle the Government's response, which was in accordance with what I have already said. We also agreed that, if Bristow Rotorcraft withdrew its offer, the Bank of England should be encouraged to bring together the main creditors to develop a recovery strategy. Bristow Rotorcraft did withdraw its bid and on 26 June Sir John Cuckney became chairman of Westland. At the beginning of July, Defence Ministers were told that the United Technologies Corporation, the parent company of Sikorsky, were interested in the possiblity of some form of participation in Westland. On 8 July 1985, as hon. Members will recall, the future of Westland was raised on the Adjournment of the House. My hon. Friend the Minister for Information Technology made clear in replying to that debate that it was not for the Government to seek to intervene in the management of the company or to seek to influence the form the company's future should take.
  Throughout the summer, Ministers and officials at both the Departments of Trade and Industry and the Ministry of Defence kept in close touch with Sir John Cuckney. On 24 September, Sir John showed the Government reports on the company's financial position that had been prepared by Price Waterhouse. He told us his plans for the financial reconstruction of Westland, involving the introduction of a new industrial partner. He revealed that he was having discussions with a number of companies of which those with Sikorsky of America, a part of United Technologies—with whom Westland had a longstanding relationship dating back to 1947—were the most promising. The company had also been in touch with MBB of Germany, Aerospatiale of France and Agusta of Italy. Sir John also stressed the urgency of reaching a solution before Westland had to finalise their accounts later in the year.
  At a meeting of Ministers on 16 October, it was decided to encourage Westland to explore further the possibilities of co-operation with the European companies which were partners or potential partners of Westland in a number of collaborative projects. That view was communicated to Sir John Cuckney by the Secretary of State for Trade and

  1091
  Industry on 17 October. Sir John said that he had made it clear to the European companies that he would consider any reasonable proposition. He again emphasised Westland's need for a rapid conclusion to its plans for a financial reconstruction.
  It was apparent that, unless such a reconstruction was clearly in prospect before the 1984–85 results were announced, the company could be legally obliged to go into receivership. A number of contacts subsequently took place with European companies and Governments and it became known that Fiat of Italy was associated with United Technologies' proposals. But as late as the last week of November, by which time negotiations between Westland and United Technologies-Fiat were in their final stages, no formal proposals had appeared from European helicopter companies for participation in a reconstruction.
  It was at this stage, on 29 November, that the national armaments directors, who are senior defence officials, of the United Kingdom, France, West Germany and Italy met in London at the request of their respective defence Ministers. The national armaments directors recommended that the four Governments should cover their main helicopter needs in future solely by helicopters designed and built in Europe. This would have represented an exclusive commitment to buy only helicopters which qualified as European in this special sense, that they were not only built but designed in Europe. That would have gone far beyond the 1978 declaration of principles to which we still adhere.
  On 2 December Sir John Cuckney wrote to the Secretary of State for Trade and Industry to urge that the recommendation should not be accepted by the Government. He stressed that, if the recommendation was approved, the board felt that it would not be able to recommend to the company's shareholders any reconstruction proposals involving Sikorsky and Fiat. He added that, while Westland had received indications of interest from the European companies, they did not mark any commercial advance over earlier proposals which had been rejected as inadequate. In consequence there was a serious risk that there would be no effective reconstruction proposals in place within the urgent timescale to which the company had to adhere.
  In the light of these developments Ministers met under my chairmanship on 5 and again on 6 December to consider their response. In doing so they were very conscious of the approaching deadline for publishing the Westland accounts—with losses publicly predicted to be of the order of £100 million—in fact they were about £98 million attributable to shareholders—and the need therefore for the company to have a financial reconstruction package clearly in prospect by then if it was to avoid going into receivership.
  The issues before us were, first, whether to agree to write off the launch aid of nearly £40 million for the W30 project if it were subsequently terminated. It was evident that that was now a condition for any successful financial reconstruction which would allow the company to continue in business. The second issue was how to respond to the recommendation of the national armaments directors. The groups of Ministers to which I have referred considered those two issues at the meetings I have mentioned.
  Mr. Jeff Rooker: Will the right hon. Lady give way?
  The Prime Minister: I shall not give way as I should like to complete these very tightly argued points.
  At the end of the second meeting on 6 December it was clear that a majority of the Ministers present were ready to decide that the Government should reject the recommendation from the national armaments directors, thus leaving Westland free to reach its own decision. But because a minority of Ministers—including my right hon. Friend the Member for Henley—felt very strongly about the matter, I decided that a further discussion must be held in Cabinet Committee, namely in the Economic Sub-Committee, for which a full paper should be prepared.
  The Economic Sub-Committee of the Cabinet therefore met on Monday, 9 December. Sir John Cuckney and his advisers were invited to attend for part of the time to report on their company's position and to answer questions. After considerable discussion, it was concluded, first, that repayment of launch aid for the W30 would be waived if that project were terminated, and, secondly, that, unless a viable European package which the board of Westland could recommend to its shareholders was in place by 4 pm on 13 December—Friday of that week—the Government would make clear that the country would not be bound by the recommendation of the national armaments directors. That deadline was set in order to allow reasonable time for more specific European proposals to be put together without running up against the deadline imposed by Westland's need to have a financial reconstruction package in place by the time its accounts were published. At the end of the meeting, Sir John Cuckney was informed in confidence of the conclusions so that he knew where the company stood. I repeat that if the national armaments directors' recommendation had remained he could not have brought forward the Sikorsky-Fiat bid. The fact that the Government were not bound by that recommendation enabled there to be a choice of two options eventually—Sikorsky-Fiat and the alternative European option which developed.
  The conclusions of the meeting of the Economic Sub-Committee of the Cabinet on 9 December laid down a clear line of policy and made it unnecessary to hold a further meeting. It was recognised in discussion that the timetable would allow for another meeting of Ministers before 4 pm on 13 December if unforeseen developments required one, but no decision to hold such a meeting was taken or recorded. The conclusion was clear, the events happened and the decision took effect. No meeting was agreed, so there was no meeting to cancel.
  A firm proposal from the European consortium, which by that stage included British Aerospace, was received by the board on 13 December. The proposal took into account a provisional agreement reached between defence Ministers of the four countries based on the recommendation of the national armaments directors.
  The European consortium's proposal was not acceptable to the board. Accordingly, as decided at the meeting on 9 December, the Government were not bound by the NADs' recommendation. In the light of the decisions taken on 9 December, there was no further issue to discuss, though the matter was raised in Cabinet on 12 December.

  1093
  The position was fully reported to the House in a statement by my right hon. and learned Friend the Secretary of State for Trade and Industry on 16 December, including the decision about the national armaments directors' recommendation and the Government not being bound by it. I answered questions on 17 December. On 19 December, as I told the House the same afternoon, Cabinet reaffirmed the Government's view that it was for Westland to decide what was the best course to follow in the interests of the company and its employees.
  Westland subsequently put proposals to its shareholders on 21 December to effect a capital reconstruction involving United Technologies and Fiat. Those proposals, and those of the European consortium, which in this period was joined by GEC, were subsequently improved in various respects, but that did not affect our fundamental policy that it was for the company and not for the Government to decide between them.
  On 30 December, Sir John Cuckney asked me to confirm that Westland would still be considered a European company by the Government if the UTC-Fiat consortium took a minority shareholding. In replying on 1 January I told him that, as long as Westland continued to carry on business in the United Kingdom, the Government would continue to regard it as a British and therefore a European company and that we would support it in pursuing British interests in Europe. I also said that, whichever of the two proposals currently under consideration the company chose to accept, the Government would continue to support Westland's wish to participate in European collaborative projects and would resist to the best of their ability attempts by others to discriminate against Westland.
  Cabinet on 9 January confirmed unanimously the Government's conclusions of 19 December and agreed that to avoid any possible prejudice to the sensitive commercial negotiations then in train all statements by Ministers should be cleared interdepartmentally through the Cabinet Office to ensure that all answers given by the Government were consistent with Government policy. Every member of Cabinet agreed except my right hon. Friend the Member for Henley. He then left the Cabinet. I shall return to that point in a moment.
  I have given the House this full account because I think it is important to set the developments of the past month in the wider context of the Government's clear policy and the company's difficulties over a period of a year and a half, the attempts made to find a solution to them and the urgency in the closing weeks of last year of finding a solution which would allow the company to continue trading.
  Mr. Jack Straw: The Prime Minister has now passed 6 January in her account, but she has omitted all reference to the leak of the Solicitor-General's letter which I believe took place on that date. Is she satisfied that neither the Secretary of State for Trade and Industry nor any of his officials had anything whatever to do with that leak?
  The Prime Minister: I answered written questions either yesterday or this morning making it quite clear that an internal inquiry had been instituted. The hon. Gentleman asks me about a particular leak, but if I had to answer every' question raised in the newspapers we should have a very long task.
  1094
  The Government's approach throughout has been guided by a number of important considerations.
  First, the Government concluded that no national interest considerations required the mounting of a public sector rescue bid. It followed that we could not dictate a solution to the company's problems. Responsibility for its future had to remain in the hands of its directors and shareholders—where it ought to be. Had the Government pressed the board of Westland to favour or adopt a particular solution it might have been taken to imply that we were ready to use public funds to underwrite the company's finances. We were not and are not prepared to accept any such liability.
  Secondly, and in line with our active support for greater co-operation in European defence procurement, we were ready throughout to encourage the possibility of a European solution, while affirming that it was for the board and the shareholders to decide what was best for the company.
  Thirdly, we wished to ensure that our armed forces would have and would continue to have access to the most cost-effective equipment which fully meets our military needs.
  I believe that the House will agree that the record shows that the Government have acted consistently with those principles throughout.
  There have been suggestions that the Government did not discuss the issues in sufficient depth or in a timely way. The account that I have given shows that such an allegation is absurd. There have been innumerable discussions of Westland's affairs between Departments and with the company over a period of 15 months. The company's future was the subject of collective discussion between Ministers on 18 June, 19 June, 16 October, 5 December, 6 December, 9 December, 12 December, 19 December and 9 January.
  There can be no doubt that the problems have been considered properly and responsibly. Colleagues in the Government, particularly those most closely concerned, were given ample opportunity to express their views, and did so, and ample opportunity to seek to persuade other colleagues before the policy was decided.
  I have dealt in considerable detail with the points concerning the Government's approach to Westland. I should like to emphasise one particular point in that account. Unanimous agreement was reached at the full Cabinet on 19 December. I repeat—unanimous. On 9 January Cabinet confirmed the identical policy and once again the policy was agreed unanimously. It was vital from that day forward that we should give strict practical effect to the policy as the crucial time for the company's decision was approaching. This was not a technicality. It was essential for the effective discharge of collective responsibility.
  The whole of the rest of the Cabinet agreed the procedure that we should adopt—with the sole exception of my right hon. Friend the Member for Henley. He was prepared to acknowledge the advantages of collective responsibility without being prepared to accept the disciplines that it requires. That the rest of the Cabinet could not accept. It would be a denial of the collective responsibility on which our system of constitutional government depends. Cabinet heard his decision with great regret. They recognised his services to Government over six and a half years in office. But the decision was his, and his alone.

  1095
  It follows from what I have said that the Government have conducted themselves properly and responsibly throughout and that there is no cause for an inquiry. The amendment in my name and those of my right hon. and right hon. and learned Friends recognises the important role of the departmental Select Committees in matters such as this. The Government's concern is to see a financial reconstruction of Westland as soon as possible which maintains a British helicopter design, development and manufacturing capability, supports United Kingdom participation in collaboration with NATO allies, and safeguards the interests of the company, its employees and its shareholders.
  I believe both sets of proposals put to the company could achieve these objectives; I hope that the shareholders will be able to take their final decision very shortly.
  I commend to the House the amendment which endorses the Government's consistent policy.
  4.41 pm
  Mr. David Steel: The most brazen part of the amendment moved by the Prime Minister is that which asks the House to endorse
  "the Government's consistent objective of supporting Westland … and of safeguarding the interests of the company, its employees and its shareholders".
  My basic disagreement with the Government is that, as the Prime Minister has just shown adequately, the Government's consistent attitude has been to say that it is nothing to do with them, that it is entirely up to the company.
  My hon. Friends the Member for Yeovil (Mr. Ashdown) and for Isle of Wight (Mr. Ross), who, between them, represent the bulk of the work force of the company, had a total of six meetings last year with Ministers in the Ministry of Defence and the Department of Trade and Industry. All were designed to stir the interest of the Government to try to secure the stability of Westland and the continued employment of its work force in its helicopter, hovercraft and other divisions. No doubt the records of those meetings could be added to the plethora of paper that we already have.
  In each case, the Government steadfastly and consistently refused to assist. They said that these matters were for normal commercial consideration. The Prime Minister quoted to the House a section of the speech made by the Minister for Information Technology on 8 July. He said:
  "It is not for the Government … to seek to influence the form its future should take."—[Official Report, 8 July 1985; Vol. 82, c. 881.]
  There, of course, lies the basic division across the Floor of the House. Most of us on the Opposition side of the House believe that it should be possible for any Government, especially where defence interests are at stake, to have at hand some means of securing the interests of companies that get into temporary difficulties. If the Government still had the National Enterprise Board it would have been perfectly possible to have public participation for a necessary temporary period in which the company could get back on its feet and not necessary to have a nationalisation solution. We believe that, given the state of the company last summer, the proper course would have been for the Government to consider taking a 21 per
  1096
  cent. shareholding and thus actively put together some kind of European consortium under the 1978 helicopter agreement. The right hon. Member for Henley (Mr. Heseltine) subsequently did this in the last two months of 1985.
  The truth is that the Prime Minister and the whole Government continued, throughout most of last year, to operate a free-market theory in a world where the free market no longer exists. Every other country, whether it be the United States or our European partners, gives far more support and active assistance in various forms, including public participation, to their defence industries than this Government are prepared to do. That is our basic quarrel with the Government's attitude to Westland throughout last year.
  Later in the summer, the new chairman and the new board took their places. At this point Members of Parliament, the Sikorsky company, Sir John Cuckney and British Aerospace were all told that the Government would not get involved. The strong impression among Westland personnel was that the Government would not be surprised if, although they did not necessarily hope that, the company went into receivership. Various other companies would then pick up the pieces. This is where the Government are consistent in their non-industrial strategy. It does not matter if we do not have a helicopter manufacturing capacity, it does not matter if we do not have a pulp-making mill capacity or a steel rolling mill —such has been the Government's strategy all along. The result of this strategy since the Government came to office has been a reduction by about one fifth in the manufacturing capacity of this country. The result has been that 1983 was the first year when, excluding oil, our imports exceeded exports. This is the record, and into it the Westland saga fits with total consistency. We cannot support such an attitude, partly because if Westland had gone into receivership I am told that about 90 other supply companies could also have gone into receivership. But the Government allowed that threat to continue throughout last summer.
  Mrs. Edwina Currie: The right hon. Gentleman says that the Liberal party does not support the Government's attitude. Recently the right hon. Gentleman was reported in the press as saying that the European possibility should be pursued. However, in recent days, other Liberal Members have backed Sikorsky. Does the Liberal party have an attitude at all or is it sitting on the fence?
  Mr. Steel: If the hon. Lady will be kind enough to let me make my speech she will know my attitude. I shall make it perfectly clear. I have already said what should have been done last summer. I am taking the matter in sequence and I shall now move on to what happened last autumn.
  The Cabinet, including the former Secretary of State for Defence, must accept responsibility for the united attitude that it took towards the Westland company throughout the summer of last year. It was not an attitude that we supported.
  The Government have also lacked a defence procurement strategy. I am one of those who stand firmly behind the twin-pillar concept of the NATO Alliance. That concept cannot operate if one of the pillars gradually acquires the bulk of the technology and manufacturing

  1097
  capacity for our defence equipment. Surely that was the reason behind the 1978 helicopter agreement. It was also behind a number of other collaborative ventures that Britain has entered with our European partners.
  It is not anti-American to say that there ought to be greater common manufacturing efforts among NATO's European partners. That is why the Government should have followed this concept in the middle of 1985 when Westland was in trouble, but they did not. In September, the new Westland board, as the Prime Minister described accurately, had to put into effect a rescue package by mid-December — a short time — to avoid going into receivership after the accounts were published in mid-December.
  Mr. Nicholas Baker rose—
  Mr. Steel: The Prime Minister rightly says that the Sikorsky-Fiat deal was built on a long record of collaboration between Westland and Sikorsky. Therefore, in the tail end of last year, the board recommended to its shareholders a bird in the hand rather than any number of birds in the bush. It is not surprising that the bid has been supported by the shareholders, the employees and the board. They have supported it because it is the only available deal to come forward of its own accord and therefore it deserves support. The company has been perfectly right to be irritated at the manipulation by Government throughout November and December, having been told earlier that it was all up to the company.
  Mr. Tony Marlow: The right hon. Gentleman knows that both his hon. Friends the Members for Yeovil (Mr. Ashdown) and for Isle of Wight (Mr. Ross) now support the Sikorsky deal. Does he agree? Is that now Liberal party policy?
  Mr. Steel: I thought that I had just made that point clear.
  One of the more interesting points in the correspondence to which much attention has been given lies in a comparison between the official record of the minute and Sir Austin Pearce's letter. According to Sir Austin Pearce, Sir Raymond Lygo
  "found reference to the national interest confusing".
  In the official minute, however, Sir Raymond
  "questioned what was the national interest".
  It is no wonder that industrialists found the national interest confusing. It appeared to be whatever the latest Cabinet Minister said it was when they met. There has been no clear direction of national interest in this matter. The Prime Minister more or less glories in the fact that the Government saw no national interest in this issue at any time last year. On both manufacturing and defence grounds, we dissent from that view.
  As for the constitutional issues raised by the resignation of the Secretary of State for Defence, when last did a Government have so many ex-Cabinet colleagues out on their ears, not through old age or incompetence but for deviation from the given line? A Cabinet room which increasingly becomes converted to an echo chamber for one person's views is a danger to democratic government. The long-term lessons of this affair are that the Government have been industrially incompetent and that the morale of government has been undermined by a failure to conduct the processes of government on the basis of collective decision-making.
  1098
  I agree with the leader of the Labour party—the Prime Minister did not answer one point yesterday. The relationship between the Prime Minister's reaction to leaks by Ministers and ex-Ministers as compared to the alleged offences of civil servants under section 2 of the Official Secrets Act 1911 is obscure. Can there be one law for the rulers and ex-rulers and another for the ruled? The Prime Minister must now declare that section 2 is formally dead and buried unless she intends to mount prosecutions.
  The Prime Minister has manipulated the processes of government unacceptably. Most serious of all, she has been cavalier with Britain's long-term manufacturing interests. It has been a discreditable episode in the life of an increasingly discredited Government.
  4.52 pm
  Mr. Michael Heseltine: May I begin with art apology to the House? Much of what I have to say I would have preferred to say to the House first, but circumstances did not make that possible and I apologise for that.
  Much of what has been said so far shows that there are two issues at the heart of the matter—the relationship of Britain with its European and American allies in the Atlantic Alliance and the role, if any, that the Government should play in their relationship with industrial companies in seeking to enhance and protect the defence industrial base of the country.
  I hope that I do not need to say to the House, and certainly not to my party, that I am as committed to the concept of the NATO Alliance as anyone in our party. I hope that I have played a role in selling the advantages of the NATO Alliance. I am wholly dedicated to the concepts and advantages that have come from it. I know of no other credible way in which to protect and defend the freedoms that we cherish. The issue, however, is the relationship and whether it should be one of partnership.
  The political processes would be uncontrollable if, on either side of the Atlantic, tensions developed so that either side felt unfairly disadvantaged by the processes of the Alliance. We have one great thing in common—a common enemy—but the scale of the resources presents great problems. The United States of America spends some $280 billion a year on its defence requirements. That undoubtedly gives it and us enormous defence and deterrence, but it also provides an enormous industrial dilemma. That vast resource flows into the technology frontiers and creates huge production runs. It is spent largely within one market, which is perhaps the most protected market in the Alliance, by technology transfer regulations, by "buy American" protection laws and by extra-territorial controls.
  This scale of taxpayers' resource is irresistible and it is co-ordinated through the vast buying machinery of the Pentagon. It is also protected by the immensely zealous interest of Congress. It is channelled into the largest and richest companies on earth. It is irresistible and if unchecked it will, in the legitimate pursuit of American corporate ambitions, buy its way through sector after sector of the world's advanced technologies.
  Two consequences flow from that. The bigger and richer the companies become, the more they centralise their design and high technology facilities, and the more the flow of brains and talent is drawn to the western sun belts and the more the resentment will grow in Europe. The slower we are to react, the less effective we become as industrial partners to the United States. The more

  1099
  Europe is criticised for failing to play its part in sharing the burden of the defence of the free world, the more the resentments will grow in the United States.
  So, for the strength of the Alliance and to preserve the conviction of partnership upon which it must politically depend, the more we in Europe must recognise that it is in our interests—and in America's—to strengthen and co-ordinate our industrial base.
  Should we try to influence our companies? Are there any arguments about our defence interests, about our aspirations as a European partner or about our commitment to the preservation of the high technology base in Britain? At the end of the road, are there even any arguments about the maintenance of jobs in Britain when large sums of taxpayers' money are being paid out? Since Government is far and away the largest customer, should it not expect to play some role in influencing the destiny of our defence contractors?
  Mr. Paddy Ashdown: Will the right hon. Gentleman give way?
  Mr. Heseltine: Forgive me.
  I have absolutely no doubt that the answer to all those questions has to be yes. In the starkest case, our companies, with few exceptions, are too small to survive individually as genuine partners with American companies. There is no point at which the process of acquisition would stop if Government believed that a market place flickering at the margin of the taxpayers' resource would lead anywhere except American domination, company by company, sector by sector.
  My position has been consistent ever since I had the privilege to help establish the European Space Agency in 1973. The background is for me clear. So is Government policy on this critical matter. The Government White Paper of 1985 made clear that we were committed to a major drive forward in the co-ordination of the defence industrial base in Europe. The helicopter agreement of 1978 made it clear that we were committed to seeking the co-ordination of the European helicopter requirements. So could there be—should there be—an exception in the case of Westland? Should Britain dine a la carte in Europe, going for the airbus, supporting Tornado and the European fighter aircraft, but opting out of helicopters? Such a theory has its attractions. Often one gets a better choice a la carte, but it is usually more expensive and one's companions tend to copy one's example.
  The longer that we in Britain go on preserving an uncoordinated, fragmented European industrial base, cowering behind our frustrations every time somebody else wins, or tries harder than we do, or gets up just that little bit earlier than we do, the longer our relative decline compared with the United States of America will continue.
  Let us come to that small helicopter company in the west of England. My position has always been that if in the end there was only one way to save Westland on reasonable terms I would back Sikorsky. My own belief is that at the critical moment the Government had a clear preference for Europe and that, for reasons that I fail to understand, Sir John Cuckney set his face against any reasonable exposure of that European preference to his shareholders. I fail to understand his statement yesterday
  1100
  that, come what may, he will not put the firm, financially better, technologically more advanced, British-European offer to his shareholders.
  I do not believe that even the most laissez-faire of my colleagues would have intended that leaving the choice to the Westland company would result in unidentified and unidentifiable financial groups slogging it out behind the closed doors of City institutions, as is witnessed, as though we were selling one of Britain's defence contractors in job lots to the highest bidder.
  Mr. John Wilkinson: I am most grateful to my right hon. Friend. We have all been listening with rapt attention to his grandiloquent statement and we are impressed with the idealism behind his observations about European collaboration. But is it not simplistic to paint a picture of an entirely one-way street, seeing that British industry has most successfully, to our advantage, collaborated with the Americans on the Harrier 2 and on the Hawk for the United States navy? We are also providing the Rapier to defend United States air bases in this country. Europe has provided the spacelab to go in the shuttle and is to collaborate with the National Aeronautics and Space Administration on a space station for the 1990s. Is my right hon. Friend not being simplistic about these matters?
  Mr. Heseltine: There are examples on both sides of export successes to the continent of Europe, to the Third world and to the United States. We are not talking about co-operative success; we are talking about the simple question whether the United States would allow a significant defence contractor to be owned or effectively controlled by an overseas country. The answer is a categorical no. I do not understand why we should have a different answer in this country. It is well known—I have made no secret of it and never will—that I hope the shareholders of Westland will recover some sense of national pride when they meet on Friday.
  I must elaborate on the two specific points that I have just made. First, at the critical moment the Government had a clear preference for Europe in the rescue of Westland. Throughout 1985, as the Prime Minister has fairly said, every option was canvassed. There are virtually no opinions that are not represented on the files on the matter, but my preference clearly follows the European co-operative sentiment in the White Paper which my Department was responsible for publishing last year.
  Of course, throughout the early months, when the Prime Minister rightly said that there were considerable interdepartmental discussions and even meetings, the scale of the Westland crisis was hardly perceived. The first serious solution was the Bristow takeover bid. So none of the anxieties about effective foreign control were on the agenda in a practical sense at that time. It was only with the withdrawal of that bid—I remind the House that that took place only in June of last year—that we had the disclosure of the financial crisis which many of the existing board who were there then seem hardly to have perceived. It was only when that crisis broke in June that Sir John Cuckney took over.
  It often appeared as though there was no way through for the company. The only way through might have been an extremely expensive public rescue. Every option, including a Sikorsky rescue, had to be preserved and encouraged. Every one of us would have been guilty if we

  1101
  had blocked off such options. The Department of Trade and Industry and the Ministry of Defence worked through the options. As events unfolded I had no cause originally for concern that my European preference would not receive consideration. Of course, the DTI was the sponsoring Department but at that time it was faithfully maintaining the European option.
  By October — this is the point at which the difficulties which have led to my resignation from the Government began to develop—the preservation of that choice had become a clear preference. I must say to the Prime Minister that her description of the account in the two letters of 4 and 18 October does not tally with my reading of those letters. I have a very full understanding of what is in them. If the Government can publish Sir Austin Pearce's letter and now the Law Officer's letters, I cannot understand why they cannot make available the letters of 4 and 18 October.
  Those letters would show that Sir John Cuckney recognised a European preference and that the Secretary of State for Trade and Industry declared a European preference. I have to say that about that time Sir John Cuckney was beginning to advise the Government that there was no realistic European option. It was only then that my anxiety began to grow. It was at that time that the willingness that I had had until that moment to support the sponsoring Department turned to an anxiety that the preference for Europe was being choked off.
  During August, as the House knows, I had concluded on behalf of this country the European fighter aircraft agreement. If I dare say so, perhaps more than any other Minister I have deep experience of how Europe works. I told my colleagues privately in mid-October that Sir John Cuckney had the wrong experience to give him an insight into how European collaboration works. It is not his fault. It is an unusual experience to have, but nevertheless it remains a fact. Collaboration in Europe, where companies—even in this country—are in practice close to their Governments, is actually led by Governments and not by companies.
  I obtained, therefore, my colleagues' agreement to see whether I could help to counter the increasingly certain view of Sir John that there was no European option. I met Sir John—as the House knows, I was abroad in early November—on 26 November. He said that he welcomed help. He explained that he had not the staff to process the work himself because he was so involved with the Sikorsky negotiations and that it would be good for the company to have a choice. So I began my negotiations with the full support of my right hon. and learned Friend the Secretary of State for Trade and Industry and with that of Sir John.
  It has been suggested that I was indifferent to Westland's future. I shall say something about that, because nothing could be further from the truth. My Department's responsibility for Westland was to ensure that the industrial capability, which is a critical defence interest, was maintained. I always made it clear that I would insist on the maintenance of that defence capability. Secondly, it was its responsibility to secure the best, or at least reasonable, value for money for the defence budget. It was not the responsibility of the Ministry of Defence to take over the sponsoring role of the Department of Trade and Industry or to use defence money for company rescue plans, unless the cost of so doing could be extremely
  1102
  limited. It is for the Department of Trade and Industry to propose in such matters, and it made it clear on 4 October that it would not use DTI money for rescue purposes.
  I stated clearly that receivership would be the best solution in certain circumstances. I said that most clearly on 25 September when I became so concerned about what was happening that I instructed officials in my Department that no options other than receivership were to be discussed further without my express authority. Why did I react so strongly? I did so because, on that day, I received a submission from my Department which said that, although no costed options for Westland yet existed, there was a plan. The Government were to fund £120 million for underwriting sales of 45 W30-160s, a civil helicopter, write off £40 million of launch aid on civil projects and provide perhaps another £25 million of further cash for redundancy. As my officials said at the time, to maintain the supply of spares and other Ministry of Defence requirements would cost Her Majesty's Government, on current information from the company, about £120 million to £165 million in cash and £40 million in written-off launch aid. It might have seemed just a small helicopter company in the west country, but my perspective had changed dramatically.
  The military advice to me on the value to the Ministry of Defence of the helicopter order was that it would not be justified on military procurement grounds even as a gift. It will be seen clearly that by 3 October I am recorded as saying that I was not in favour of a receivership option.
  Mr. Bill Walker: My right hon. Friend will be aware that on 21 September I had a meeting with him in his office with principal officials from Sikorsky. Would he care to tell the House what he told them at the meeting?
  Mr. Heseltine: Yes. I told them exactly what I have already told the House. I told them that we had to preserve all options. It would have been unthinkable, not knowing whether there was a European option, to reject one option that was sitting in my office at that time. I should add that my hon. Friend behaved properly on all occasions and that I believe that I have answered his question as honestly as I can.
  It has been suggested that I withheld £6 million from the company. It was my accounting officer who withheld £6 million on what he believed to be grounds of commercial prudence. I instructed that I was to be kept in touch immediately, even when out of the country, with the attitudes of Westland's bankers on this matter.
  In June, I put forward a limited form of Ministry of Defence guarantee to help with the uncertainties over the Indian order. My colleagues felt unable to accept it and I think that their reasons for refusing to do so were perfectly proper. I formally directed my accounting officer to pay the £6 million to Westland in October and, therefore, I took upon my own personal political shoulders the responsibility for making a payment of that large sum of taxpayers' money, which my accounting officer would not make. I remind the House that I was the Minister who was deputed to talk to Mr. Gandhi about the W30 order from India when he was in Britain.
  In the end, whatever else I may have done, the Westland shareholders have a choice, and substantially better terms than those negotiated by the Westland board. The original Sikorsky offer, which the board firmly

  1103
  supported, argued that the only practical offer was for up to 40 per cent. of the shares in the company and 30 per cent. to 40 per cent. of the work to go the United States of America. Sikorsky is saying now that it will perhaps accept the transfer of only half that shareholding and only half that amount of work to the United States of America. So much for the company that, as we were told on 5, 6 and 9 December, might go away if we did not sign up without more ado. No one knows now who is buying what shares from whom in the stampede by an American multinational company to break into the European markets.
  I wholly reject the suggestion that I have been indifferent to Westland's interests, but I plead guilty to the charge that I have intervened in what I believe to the legitimate interests of Britiain's industrial defence base. I delivered a deal from the British and European sources to rescue Westland. On Friday 13 December, the bid, deal or offer was rejected by the Westland board in what I calculate to have been about 40 minutes. There was not a phone call and there were no meetings. There was a simple no.
  I had been empowered by my colleagues in the British Cabinet to pursue the possibility of a British-European rescue for Westland, but I was given no chance to report back my proposals to the Cabinet Committee which authorised me, or to the full Cabinet I was required instead to report them to the board of a private company. Virtually every Fleet street commentator said that the proposals were better. Even Sir John Cuckney's remarks indicated something of the same flavour. It was so much better as a deal that Sikorsky had to improve its offer in every material respect. Of course, no meeting took place in Government after my deal had been made available. There were meetings before but no meeting took place after the British-European deal had taken a form in which it could be discussed sensibly.
  On Friday 20 December a full, as I am advised, legal offer was submitted to the Westland board by the European consortium. On Saturday 21 December, Westland proceeded to circulate to its shareholders the Sikorsky-Fiat proposals, which offered the company less money, less work and less technology and involved scrapping an existing agreement to produce Black Hawk helicopters, which is still in existence, to the best of my knowledge, with Short Brothers of Belfast.
  Much of what has happened since is in the public domain. In the absence of any collective judgment, which I continued to ask for as late as 23 December, I continued publicly to answer quetions, as I was, I think, properly' entitled to do as the Secretary of State for Defence. I felt that I owed that at least to those who had responded so quickly and generously to the approaches which my colleagues in government had authorised me to make.
  I must now come to the closing chapter of this extraordinary affair. I have explained that Sir John Cuckney, in discussions with me on 26 November, said that he would welcome a choice but had not the staff to process it. I fixed a meeting, after consulting the Defence Minister of the Federal Republic of Germany, for 29 November, consisting of four national armaments directors and representatives of three companies. I met the national armaments directors and the companies and explained the urgency of the matter. I then left to speak
  1104
  for my hon. Friend the Member for Rochford (Dr. M. Clark). By the time I returned, agreement had been reached.
  Even before the meeting had taken place, Sir John Cuckney telephoned the permanent secretary of my Department, saying that he had learned of its existence in the Financial Times. He said that he was expecting a telex in hours from Sikorsky and that as soon as it came he would convene a board meeting which would confirm the Westland-Sikorsky deal. So much for the man who, only a few days earlier, had said that he would welcome a choice. I am at a loss to understand how Sir John could on 26 November encourage a Minister of the Crown in the belief that choice would be welcome and three days later threaten to stifle it at birth.
  Mr. Gerald Howarth rose—
  Mr. Heseltine: I have a limited knowledge of company law. That is a matter for the Department of Trade and Industry. [Laughter.] I am, however, under the impression that it is the duty of a board of directors to seek the best deal for its shareholders. The only excuse could be that even the knowledge of such an alternative deal would frighten Sikorsky off. That would have to be a miscalculation of historic proportions.
  The House knows the background to the deal that I was trying to negotiate. In 1978, the four countries had signed an agreement to use their best endeavours to produce helicopters in Europe. The four, including the United Kingdom, had continued with that policy. At the meeting that I called, the national armaments directors agreed on the rationalisation of European requirements for helicopters for the rest of this century—the EH101, the NH90 and a merged version of the PAH2 and Al29. That was the culmination of what had been embarked upon in 1978, the opportunity for Europe to keep within Europe all the design, all the technology, all the jobs, and to standardise, with no competition from any of the countries concerned, on three helicopter requirements.
  At that meeting, therefore, the national armaments directors took the 1978 agreement a stage further. They said that they would in future not simply try to co-ordinate but would purchase helicopters designed and developed solely in Europe. They had decided on helicopter requirements for the rest of the century.
  I must make it clear that I took no part in that decision. I was in Southend. The proposals were awaiting my return from Rochford. They were contingent on the European offer being accepted for Westland. With the national armaments directors' constraint, of course, Sikorsky would be ruled out in terms of its Black Hawk helicopter; and Sir John Cuckney asked the Secretary of State for Trade and Industry to lift this proviso of the national armaments directors at once. I refused to agree until a proper choice was presented between Sikorsky and the European offers.
  The purpose of the meetings on 5, 6 and 9 December was to persuade colleagues to support the Secretary of State for Trade and Industry in his request to lift this provision. I have to say to the Prime Minister that I do not agree with her sense of urgency about this matter. There was no need to lift the national armaments directors' directive to allow the negotiations with Sikorsky to continue. It would have been necessary to lift the directive

  1105
  only if the agreement with Sikorsky was to be signed. Sikorsky could have been told about it and that the directive would not be implemented if its preference was exercised. During the negotiation of that preference, there was no need for it to be lifted.
  Mr. Wilkinson: My right hon. Friend the former Secretary of State has throughout his tenure of office taken great pride in the fact that, under his stewardship, competition has been maximised and, with the help of Mr. Levene, the Chief of Defence Procurement, alias the national armaments director, great savings in cost have accrued to our taxpayers. How come that my right hon. Friend was so pleased that his national armaments director should announce to him a provisional agreement which would specifically preclude competition in the very important area of armaments where over the years a great deal of public money has been expended?
  Mr. Heseltine: I wonder whether my hon. Friend has really thought through where the competition options would be in Westland if it were effectively owned by an American company which had already designed the helicopters for the United States forces, which were then to be available under licence to this country on work-sharing agreements. The House must understand that in all the procurement policies of the advanced world Governments actually buy the helicopters that suit the countries in which those companies are situated. If there is an effective American control of one of our major defence suppliers, I do not believe that there would ever be a really competitive choice to buy from Europe.
  I accept, therefore, that there are limitations on the concept of competition. I have discussed it very fully with my colleague, the Federal German Minister. The way in which we will do it, if we see the Europeans advance in this way, is to ensure that the competitive pressures are arranged within Europe precisely as the Ministry of Defence is making arrangements now for competitive pressures to be exercised within Britain. It is no accident, because I share my hon. Friend's view that the percentage of new contracts to the Ministry of Defence subject to competition has risen in the past 18 months from 45 per cent. to 70 per cent.
  Mr. Ashdown rose—
  Mr. Heseltine: No. [Interruption.]
  Mr. Speaker: Order.
  Mr. Heseltine: I come to the two meetings of 5 and 6 December. I do not think that any of my colleagues would dispute that they are not of constitutional significance because they were ad hoc meetings. It is a perfectly legitimate way of conducting the business of government to gather together the immediately interested Ministers to dispatch uncontroversial or relatively uncontroversial business. There were, however, sufficient numbers—not a majority, but sufficient numbers—of Ministers at those meetings on 5 and 6 December to ensure that a properly constituted Cabinet Committee should meet to resolve the matter. That meeting took place on 9 December. It was, of course, a meeting of the Economic Committee of the Cabinet. Sir John Cuckney was invited —I think helpfully—to put his views about the urgency of the Sikorsky situation and about the European option to all my colleagues on that Committee. He stressed, of
  1106
  course, how essential it was to lift the national armaments directors' directive. A significant number of my colleagues came new to the arguments.
  At that meeting I put forward a totally different proposal. I asked for just five days, until Friday 13 December, to ensure that the European proposals, which now included British Aerospace, were proved or not. I made it absolutely clear that if I failed I would back Sikorsky. After hearing all the arguments and after listening to Sir John Cuckney, a clear majority of my colleagues supported my proposals. The meeting ended with a clear statement that we would meet again on Friday at 3 pm, when the Stock Exchange closed. The officials of the Cabinet Office recorded the words. They are not in the minutes but I believe them to be in the notebooks from which the minutes are prepared. [HON. MEMBERS "Oh!"]
  It was no surprise to me when, therefore, the Cabinet Office arranged the meeting for Friday at 3 o'clock. It was a devastating surprise when it subsequently cancelled the meeting. I was content with the outcome of that meeting on 9 December because my colleagues had given me time, and I had another meeting at which colleagues could take whatever steps they felt then appropriate if they wished to give advice to Westland's board. That was the very least that the Government could do in common courtesy to the Ministers of other allied countries who had already made and still had to make such efforts to consolidate the offers for the rescue of Westland.
  It is now well known that that meeting on Friday never took place. The board of Westland threw out the British Aerospace-European proposals as though they were a mere public relations handout. Collective judgment had been frustrated. I had no doubt where my duties lay. I had been entrusted by my Cabinet colleagues to seek a European deal. I had been entrusted by my European colleagues with the advocacy of their case. I therefore circulated details to my colleagues in Cabinet and sought a collective decision. That was denied me. I was told not to raise the matter in Cabinet. I refused to be silent. I protested about the cancelled meeting in Cabinet on 12 December. The Cabinet minutes did not record my protest.
  At the next Cabinet meeting, on Thursday 19 December, it was stated that we should show no preference. I explained that events would shortly unfold that would cause us to rethink that position. The next day, British Aerospace, the General Electric Co. and the Europeans put forward a full proposal. I again asked for collective judgment. It was again denied me.
  I explained that I would have to answer questions on defence procurement policies or the resulting uncertainty about the European proposals would be fatally darnaging. This was not challenged in Cabinet; but otherwise the public controversy was to be cooled and there were to be no ministerial public statements. That night, the Secretary of State for Trade and Industry implied that I was holding a pistol to Sikorsky's head. I did not respond to those words. On Sunday, he spoke on radio and recorded a broadcast for "The World This Weekend". The BBC informed me, and I agreed to respond only if I was convinced that he had broadcast. I heard the broadcast by the Secretary of State and agreed to go ahead. Efforts were made to stop the programme—[HON. MEMBERS: "Oh."]—but I was told that, whatever the Secretary of State for Trade and Industry did, I was not to appear. I could not accept such one-sided treatment.

  1107
  I withdraw not one word of my account of the Prime Minister's reply to Sir John Cuckney on new year's eve. Sir John wrote to the Prime Minister, in my view, to get answers that were perhaps different from those he had got from the Secretary of State for Defence. There was a draft of an indicated reply. It was sent to the Department of Trade and Industry and not the Ministry of Defence. There was an intervention by the Law Officers which materially changed the sense of the proposed reply.
  I do not think that there is any point in delaying the House with more details of the events as they unfolded. I say at once that I would not support the form of inquiry suggested by the official Opposition, because I believe that there is ample precedent in the instruments of the House, which I did all in within my power to support when they were brought into existence to make any full exploration of the circumstances that the House may consider necessary, but, if there is to be an inquiry, I would expect to be called to account for everything that I have said and my role to be fully and carefully examined in detail.
  Suffice it to say that the culmination of events came in the Cabinet on 9 January. We were supposed to be evenhanded, leaving the matter to the shareholders, standing back. At that late stage, there was perhaps, realistically, nothing else to do once the board had made its final, and in my view ill-judged, recommendation. There were then selective leaks from the Law Officers' letters, which were used, wrongly, to damage my credibility. The Foreign Office instructed the British ambassador in Rome to ask the Italian Government to send no more messages of support for the European consortium. [HON. MEMBERS: "It is a scandal."]
  The Secretary of State for Trade and Industry urged the managing director of the leading company in the British consortium to withdraw in the national interest. I reported that incident at once on Wednesday night to No. 10 Downing street. The next morning, in Cabinet, it was suggested that all answers to questions on Westland should be submitted to the Cabinet Office before release.
  Mr. Hugh Dykes: Will my right hon. Friend give way?
  Mr. Heseltine: No.
  This included answers to questions which already publicly carried my name. I had no confidence, in the light of what had already happened, that such a constraint would be used fairly or without prejudice to the interests of the British-European offer. What I had said with confidence one week would be at the mercy of the most trivial form of interdepartmental squabbling over words. The board of Westland could have been forgiven for seeking to exploit those uncertainties.
  I was with great pride Secretary of State for Defence in Her Majesty's Government. There are special responsibilities in that job, and one of them is a conviction in one's capacity to do whatever one believes to be right and against all pressures. With great regret, but no doubt, I left the Government.
  5.38 pm
  Mr. James Callaghan: I have listened over a long period to many great speeches. I do not think that I have ever heard a resignation speech in which the position of the resigner has been so firmly
  1108
  founded as the one we have heard today. It is inconceivable that the Prime Minister and the Government should refuse some form of inquiry into the allegations of the right hon. Member for Henley (Mr. Heseltine). He has made statements that directly contradict points made by the Prime Minister and others of her Ministers. There can be no confidence in the Government until this matter is cleared up. I say to the right hon. Lady that in the interests of good government she has a responsibility to see that the right hon. Gentleman's points are fully examined independently and that the truth is asserted and delivered to the House.
  The decision to resign is not an easy one to make. It means parting with friends and colleagues. It means that whispers and slanders and untruths will be told about the person who has resigned. When a person resigns he will be told that he has weakened the party, and it will undoubtedly be said that he is fulfilling some long-range ambition. I am sure that it is an agonising decision. Sometimes resignations do not take place on great issues. They are sometimes the culmination of a long series of frustrations which eventually explode and boil over.
  I listened to the right hon. Gentleman outlining the framework, the philosophy, against which he was taking these decisions and carrying out, up to a certain point, what he believed to be Government policy, and I contrasted his speech with the turbid recital of dates that we had from the Prime Minister. I have no doubt who has so far had the better of this argument. I salute the right hon. Gentleman for his courage in resigning. He will have a difficult path ahead of him. I do not believe he planned it, nor do I believe the Prime Minister wanted to push him out. It is one of those inevitable consequences of two stubborn people meeting and neither being willing to give way. When stubborn temperaments clash, we may well ask what the rest of the Cabinet was doing to try to prevent—[Interruption.] If my hon. Friends are interested I will return to this point a little later.
  We are not dealing just with a clash of two strong personalities, as has been brought out by the right hon. Gentleman, because there are important public issues at stake that the House should address. The first issue is the future of this insolvent company. Can it be given a prosperous future? As we have been told by the Prime Minister and the right hon. Gentleman, the background is fairly straightforward. When it first fell into trouble both the Secretary of State for Trade and Industry and the right hon. Gentleman were in favour of and ready to adopt a European solution, taking along with them, perhaps, a rather unenthusiastic Prime Minister.
  Before such a European solution could be adopted, it was necessary for the Government to put some work into Westland and, as has been made clear to us, they were not ready or able at that stage to do so. The future for the company was grim, and I have no doubt that it was with thankfulness that the Prime Minister and the other Ministers involved learnt that Sikorsky was ready in July to offer both finance and work so that the company could carry on. In its weak position the company eagerly grasped that, as there seemed to be no other future. Much later this prompted the European Governments and companies to come forward with a proposal for collaboration.
  Criticism may be made of the European consortium in that it did not come forward earlier in view of the 1978 agreement for which my Government were responsible. But it did come forward, and the Government have not yet

  1109
  explained to my satisfaction and to the satisfaction of many others why they did not examine the European option as fully as they should have done. It is at this stage that the first criticism of the Government must be made, and so far the right hon. Gentleman has made the case that there was inadequate consideration.
  The Prime Minister's defence this afternoon was that the company had to produce its accounts by the end of the year and would have shown a loss of £100 million, and that without any financial reconstruction in sight it would have had to go into receivership. There was a great deal to be said for that solution and I understand that at certain stages the right hon. Gentleman put forward that solution.
  What is the position of this company today? We are told that the shareholders will take a decision. But that decision will not be in the hands of the shareholders if the banks choose to exercise their powers. If the National Westminster bank and Barclays bank were to say tomorrow that they refused to cover the borrowings of this company any further, the company would immediately go into receivership. The shares that are now changing hands at £1·25 each are worthless—pretty well worthless; I exaggerated slightly but not by much. On Friday the shareholders will take decisions on shares which have little value and those decisions will be on matters of supreme national interest. I want to demonstrate why this is so.
  Westland is not a unique company, especially in the defence field. As the right hon. Gentleman said, to some extent the company depends on collaboration with others and on foreign technology in its work. That illustrates the important and central issue with which he started his speech, that for many years Britain, like other medium-sized countries, has not been capable of meeting its arms requirements from its own arsenals. The question of what policy we should adopt in purchasing arms from other countries or in co-operating with other manufacturers in joint production is not a new issue.
  The House is aware that there is much history and there are many precedents on policy decisions to assist a Government confronted with a problem such as Westland. The Government were faced with the two options and the Prime Minister seems to have conducted the discussions, especially in the last two or three weeks, with all the restraint and rationality of a Saturday late night pub dispute after the pub has closed and people emerge with black eyes. The Secretary of State walks out of the Cabinet and the Leader of the House has an uncomfortable half hour on television. The Solicitor-General has his letter leaked without his knowledge, the poor pathetic Secretary of State for Trade and Industry has to weave his way around half truths and evasions and then has to come back and confess. It has been a miserable week for the lot of them on the Government side. [Interruption.] The hon. Gentleman is not yet on the Front Bench but I am sure he will be one day if this lot go on as they are.
  The work force has spoken out strongly in favour of Sikorsky and the opinion of the work force should be respected—[Interruption.] I will not give way —[Interruption.] I am told that the hon. Gentleman has Barbara Castle's diaries. I have not read them, so I shall not give way as I would not be able to answer his question. If the House will allow me I would like to make a serious speech. The work force has said strongly that it wants the Sikorsky solution and we must respect its opinion. It believes that the Sikorsky solution will give it the best chance of retaining its skills. None of us can give the
  1110
  workers a clear assurance that if the Sikorsky solution is adopted it will give them a future, and that is by virtue of some of the reasons given by the right hon. Member for Henley.
  Mr. Ashdown: Or from the other solution either.
  Mr. Callaghan: There is, for example, one company that would certainly have a future. I am sure many people will echo what the right hon. Gentleman had to say about the disgraceful way in which huge blocks of shares are being bought and sold by faceless individuals who will then throw the shares into the scales on Friday. This kind of predatory company acquisition has nothing to do with the efficiency of the market place about which Conservative Members are always regaling us. It has nothing to do with the productivity of the work force, and the defenders of unbridled capitalism will be hard put to it to argue that what is happening in the City of London this week is the best way to safeguard the future of one of our defence industries.
  He would be a bold man who would reassure Westland that its future was secure. After all, Sikorsky, as has been pointed out this afternoon, is not the principal in the matter. It is one of the divisions of United Technologies, a vast American corporation, to whom the investment of a few million pounds in Westland is no more than the office petty cash.
  I shall forecast one likely pattern of development. Sikorsky, despite its 10 per cent., will dominate the future of Westland and its policy. It will use Westland as a useful tool to attack the rest of the European helicopter industry. In which case, Aerospatiale will survive because France will determine that it survives, unlike this Government's attitude. Fiat, already linked with Sikorsky, will make a bid for Agusta and the Americans will secure a dominant position in Italy. That is not the way to conduct American-European defence procurement—in their interests or ours.
  We need a basis of equality in our relationships, and the helicopter agreement, to which the right hon. Member for Henley referred in his statement of resignation, was intended to secure that basis of equality between Europe and America. That is not anti-Americanism. It springs from the understanding that a true partnership requires equality between the partners. If one partner can do without the other, there is no real partnership.
  I speak today because there is history to guide us on these matters which the Government have neglected. Eight years ago—the House will have noted the date 1978—the Boeing aircraft company was on the prowl in Europe, dangling offers of joint production in front of British aircraft firms as well as those in Italy and France.
  At that time, British Aerospace was a nationalised company and the Labour Government were brought into discussions with Boeing at an early stage. I had become Prime Minister and I made it my business to meet the leaders of Boeing and the other American aircraft companies in Washington. After a long series of discussions, my advisers and I came to the conclusion that, despite the offer that Boeing was making of an apparently equal partnership with British Aerospace, the consequences, whatever its intentions at the time, would have been different. Boeing's long-term aim was to choke the infant Airbus, to suck the technology out of British Aerospace and to reduce its role to that of a sub-contractor.

  1111
  The principal officials of British Aerospace were of the same mind as my colleagues in the Cabinet. We authorised fresh vigour to be imparted into our negotiations with France and Germany with a view to a joint European production of the Airbus. It was a difficult negotiation. At one stage it involved President Giscard and Chancellor Schmidt before the three countries could reach an agreement. But we did, and the results today—this surely has a moral for helicopter production—is that Europe has an independent aircraft industry; that British Aerospace is renowed as one of the foremost manufacturers of wings in the world; and even American airlines are buying the European Airbus.
  If only the Government had shown the same enthusiasm, had overruled some of Sir John Cuckney's proposals and had secured his enthusiastic co-operation, and if the right hon. Gentleman had been allowed to pursue the line that he was following, the result might have been different.
  We had other problems in 1978 with the Americans over the financing of Rolls-Royce engines. We got the Export Credits Guarantee Department, on what I believe was a good piece of financing, to support the sale of Rolls-Royce engines to American companies. The Americans accused us of unfair competition. They went to Congress. The matter was taken up by President Carter. I was in Washington again. We had a talk about the matter with the American Secretary to the Treasury, and I say in fairness to the Secretary of State for Trade and Industry that he would have been on a fair point if he had limited his conversation with Sir Raymond Lygo to pointing out the dangers that British Aerospace was running, and of anti-American sentiment. I must say, however, in view of the present position of the Airbus and its American relationship, that it would have been rather like teaching his grandfather to suck eggs.
  Our experience was that, although we had a rough passage with the Carter Administration for several months, which needed a great deal of smoothing over, in the end, the President and I recognised that the Americans were fighting their corner and that we were fighting ours. We both made a calculation of where our national interests lay. Surely the moral is that the Secretary of State for Trade and Industry should not have been so timorous as to pressurise British Aerospace to withdraw because he was afraid of American displeasure. [Interruption.] I am not sure what the right hon. and learned Gentleman is saying, but if he wishes to interrupt I shall gladly give way.
  The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Leon Brittan): I am simply repeating what I said to the House and what is confirmed by the official record, which is corroborated by three senior officials who worked, I imagine, for the right hon. Gentleman's Government and whose integrity was not questioned, and by my hon. Friend the Minister of State. At no stage did I ask British Aerospace to withdraw.
  Mr. Callaghan: It is extraordinary, is it not, that when there is a difference of opinion between the Prime Minister and the right hon. Member for Henley, it is the Prime Minister who is correct. When there is a difference between the Secretary of State for Trade and Industry and Sir Raymond Lygo, it is the Secretary of State who is
  1112
  correct. The Secretary of State is still muttering. Despite his vehemence, I cannot say which version is the truth. I say to the right hon. and learned Gentleman and to the Prime Minister, how does she think that the Government can keep any respect when there is a direct contradiction between the letters that we hold in our hands and what the Secretary of State has just said?
  The European Nations—the Secretary of State is not worth wasting time over—decided on the helicopter declaration agreement for three reasons. First, we were fearful that the United States in its vigour, appetite and size would swallow us one by one. Secondly, in those technologically advanced sectors, the need to invest huge resources in research and development forces even market leaders into collaborative deals with their competitors, leading to common sourcing of components and much else. The third consideration was the failure of the two-way street, an arrangement under which America undertook to purchase part of its defence requirements from Europe to offset the huge flow of American equipment purchased by Europe. Both sides were to purchase from each other.
  I heard what the right hon. Member for Henley said about some of the traffic that had gone the other way. If the right hon. Gentleman were to draw up a balance sheet of the two—if I may continue my metaphor of the two-way street—all the American vehicles were pouring down the track towards us, but we had nothing but a rather broken down cycle for the return journey.
  Those important policy considerations do not seem to have been taken fully into account. I have mentioned three factors—the fact that we were going to be demolished by the Americans, one by one, the need for technological collaboration and the failure of the two-way street—which do not seem to have been given the consideration that they should have been given.
  I come to the Prime Minister's conduct. The right hon. Member for Henley claims that it amounts to a constitutional outrage. With respect, I believe that that is overegging the pudding. Every Prime Minister has his or her style of conducting Government. It is up to the Cabinet whether it puts up with it or not. That lot will put up with almost anything. There is the well-known example of Attlee's strong rebuke to Churchill over conduct of the wartime Cabinet. We have since been told that Mrs. Churchill apparently agreed with Attlee. She told Winston so, and then he tried to mend his ways. I wonder whether there is a role here for some other sensible spouse? The right hon. Gentleman let the cat out of the bag by publicly blowing the gaff on what his less courageous colleagues have long whispered behind their hands: that they find the Prime Minister's method of conducting business objectionable. I think that the House can understand what they are getting at.
  But what were Ministers doing during this period of growing controversy between the Secretary of State for Defence and the Prime Minister? Was the Chancellor of the Exchequer doing his best to calm things down? I suppose that the Foreign Secretary was off on one of his foreign travels and that he was not available to help. But what about the ebullient tones of the Leader of the House? Where was the Chief Whip? What were all these Ministers doing while this issue was boiling up? I can only say to them all that if they behave like mice they must expect to be chased and that if they act like doormats they must expect the Prime Minister to trample all over them. I am

  1113
  bound to say to the Ministers who are sitting on the Treasury Bench today that, with one or two exceptions, the present Cabinet has less spirit and contains fewer men of talent than any Conservative Government since the war. Most of them are sitting outside it. I wonder whether the Prime Minister ever considers whether the fault is that the tallest tree in the forest will not allow any substantial growth in her shade?
  However, all is not lost. If the Ministers play their cards properly, the resignation of the right hon. Member for Henley has given them another chance. He is the sacrificial lamb, although he will be a pretty tough lamb to digest. They can now, if they choose, re-establish Cabinet authority, because the Prime Minister dare not risk another resignation on the same grounds. If the Ministers care to do so, they can now rein in these authoritarian instincts that they tell us they find so objectionable.—[HON. MEMBERS: "They would not dare."] If they do not dare to do so, then it is a job for the Back Benchers. And if the Back Benchers do not, in due course the electorate will.
  The right hon. Member for Henley told us that just before he left the Cabinet meeting there was not a single member of the Cabinet who supported him. He should not worry overmuch about that. There is a precedent. When Anthony Eden left the Conservative Government in 1938 in disgust at Neville Chamberlain's willingness to treat with Mussolini behind Eden's back he could not find a single supporter to speak for him in the Cabinet, but two years later Eden was back and Chamberlain was out. In case the thought has ever crossed the right hon. Gentleman's mind—although I do not suppose that it has—let me remind him that Eden went on to become Prime Minister.
  As for the Secretary of State for Trade and Industry, I have been screwing myself up to try to find something favourable to say about him and to try to show some understanding for his position. I fear that the trouble is that the decent instincts that I am sure he possesses have, somewhere, become atrophied behind that lawyer's mask. I say to him in all seriousness that on Monday he failed to understand or to weigh properly his responsibilities to the House on the one hand and to British Aerospace on the other. The House is aware that commercial matters have always been given special confidentiality by the Department of Trade and by Government generally in the conduct of Government business, for obvious reasons. The fact that a letter was marked "Private and Strictly Confidential" should certainly have led him to refuse to divulge its contents but never to deny its existence.
  Last Monday the Secretary of State should have let his instincts guide him. Then he would not have had to weave and shuffle as he did and eventually be forced to come back to the House and confess. He has had an awful lesson, but by his demeanour since I wonder whether he has learnt that lesson and whether he really understands the House of Commons. If he does not, the sooner he goes back to the Bar and makes his reputation there the better.
  My right hon. Friend the Leader of the Opposition has called for an inquiry. I repeat to the Prime Minister that, whether or not she accepts this form of inquiry, it is now absolutely imperative that these matters should be inquired into if confidence is to be restored in the Government's position and integrity. The inquiry should, I suggest, go a little wider. It should also review some of the policy questions raised by the right hon. Member for Henley—
  1114
  and I hope by me, too—about how to carry further European defence procurement co-operation and how to integrate this with the Atlantic Alliance.
  The Prime Minister cannot be very proud of the way that she and her colleagues have handled the future of Westland. If the Sikorsky offer is accepted, it will be the wrong decision: wrong for this country, wrong for European co-operation and wrong for European-American relations. What has happened shows, I regret, a readiness to ignore the lessons of the past, a refusal to examine seriously the European option, an attempt to deceive by saying one thing in public and doing another thing in private. Most dangerous of all, it shows a lack of understanding by the Prime Minister of the way to handle her colleagues in order to get them to work as a team. For her, the verdict must be that it is getting very late.
  6.6 pm
  Mr. Jim Spicer: I have an almost impossible task in following the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), the Father of the House. I shall not attempt to follow the broad-brush approach that he has used during the last half hour. However, at one point he said that he intended to speak about the workers at Westland. I hope that at this point, as I speak about the workers at Westland, the right hon. Gentleman will pay some slight attention. Three or four hon. Members have a constituency interest in Westland. We form a strange alliance. I refer to the hon. Members for Yeovil (Mr. Ashdown) and for Isle of Wight (Mr. Ross), my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) myself and one or two other hon. Members. Over the years we have followed Westland's fortunes and we speak from experience of that company. When the tumult and the shouting has died away and when all the politicans have departed, having had their say about the dates of various meetings and their outcome, the problems of Westland and companies like it will not have disappeared. Therefore, we should address ourselves briefly this afternoon to Westland's problems and I will not go very far away from that main point.
  All hon. Members who fall into this category knew quite well that in the spring of 1985 Westland was in deep and dire trouble. There was the possibility of a cancellation of the Indian order and there was a lack of orders for the W30. My right hon. Friend the Prime Minister mentioned that a year or 18 months ago the storm clouds began to grow over Westland. We were made well aware of that fact by management and also by the trade unions and workers at Westland. It was against the background of a worsening situation that Sir John Cuckney took up the incredibly difficult task of chairmanship of the company. When he was appointed I did not hear one word of criticism from the Government or the House of his appointment or of the board. He had an almost impossible task to perform and he set about it with vigour.
  In the interests of the board, the shareholders and the workers of Westland, there are three simple questions that I believe must be answered during this debate. As is often the case during some debates, the answer is known before the question is put but I ask my right hon. Friend the Member for Henley (Mr. Heseltine) when Sir John Cuckney first went to the Ministry of Defence to ask for help, to explain the problems facing the company and to point out the obvious future if that help did not arrive.
  Mr. Heseltine: Sir John Cuckney rightly went to the Ministry of Defence very early on. I had to refer him to the Department of Trade and Industry, which is responsible for taking decisions about how rescue operations should be handled.
  Mr. Spicer: I accept that. This first meeting took place on 17 July. I fully accept that the Ministry of Defence was not the sponsoring Department. However, my right hon. Friend the Member for Henley has made it clear during the debate how vital that Department's interests are and how important it was for there to be continuity of supplies from Westland to the Ministry of Defence.
  My understanding is that when Sir John Cuckney went to the Ministry of Defence on 17 July he did not receive any promise of direct support from the Minister either in trying to get together a European consortium or any direct intervention from the Government because my right hon. Friend the then Secretary of State made it clear that he would be against any direct intervention at that stage. Therefore, the possibility of bankruptcy loomed large.
  My second question is: what would have happened to Westland if Sikorsky had not come forward with its offer? I emphasise that the offer did not just appear at the end of September or October. At the end of July Sikorsky, as a friend of Westland, was beginning to talk, even in Washington, about the problems of Westland and saying that it had worked with Westland for a long time and it wondered whether it could help in any way. That news must have filtered back, if not in July then early in August, and it was quite clear that there would be a move by the Americans at an early stage.
  What would have happened if Sikorsky had not come forward? The chairman of Westland, having spoken to the Secretary of State for Defence and the Secretary of State for Trade and Industry, went round to speak to British Aerospace, the General Electric Company, Aerospatiale, Agusta and Messerschmitt. All of those companies said that it was bad luck and that they were sorry. However, we all know that, with the exception of Agusta, which was genuinely concerned because of its collaboration with Westland, they were all hoping that when Westland went into bankruptcy they would pick up the pieces. Some were happy that a company which might have been a future contender was going out of business. Those were the problems that Sir John Cuckney faced in July and August.
  British Aerospace is leading the European consortium. Firm guarantees should have been given to British Aerospace from all the partners in the European consortium that they will be willing and able to live up to their commitment of providing genuine work for Westland over the next three or four years. My right hon. Friend the Member for Henley took part in the "Panorama" programme on Monday and he knows the reaction of the Westland workers as they listened to that debate. There must be no mistake: Agusta and Aerospatiale are not in good shape at the moment.
  Also, the memories of the workers at Westland are long and they do not need to be reminded of the agreement made in 1968 between Aerospatiale and Westland, which was to be a splendid example of collaboration. With the connivance of Aerospatiale the French Government broke that agreement almost immediately and halved their order for Lynx helicopters from Westland. One cannot blame the workers or management of Westland if they remember that occasion and if they fear that it might be repeated.
  Mr. Stephen Ross: Does the hon. Gentleman agree that the managing director of Westland has been telling the work force that he has attended at least three meetings with the French and the Italians in recent months and has had little support from them?
  Mr. Spicer: I made that point earlier on. It was in July and August that the exchanges took place and there was no support and no clear-cut commitment. The tragedy of the resignation of the right hon. Member for Henley is that he has been a leading and respected figure in bringing the European concept together. With his support behind it, a future European consortium for helicopters would have carried more weight and conviction. Now that he has resigned I have less sense of conviction about the way in which that cobbled-together European commitment will hold up under the stresses and strains that will come about over the next few months and in the years ahead.
  Mr. Dalyell: I visited Westland on 21 November as the company's guest. That was when the problems were starting. It was my impression, as a visitor—I cannot put it higher—that the workers were deeply worried because they had not been told what the various options and possibilities were. They were worried about the constant changes in management and in decision-making. Can the hon. Gentleman tell us whether the European option as it is now put forward has been fully spelt out? I do not know.
  Mr. Spicer: I thank the hon. Gentleman for that comment, because it serves to illustrate my point. There is not a single person, including Sir John Cuckney and Members of the House, who in July or August would not have welcomed the sight of two contenders emerging at the same time. We would then have had a race, and the winner would have been fleetest of foot and the one that was prepared to offer the most to the Westland workers and shareholders. The fact that that did not happen is an indictment of what happened during the period from July until September. In my view, the European offer was too little too late.
  Mr. Ashdown: I will try to assist the hon. Gentleman in answering the previous question. I am aware of the criticisms mentioned by the hon. Member for Linlithgow (Mr. Dalyell) about the deficiencies in the spread of information to the work force of Westland. It may be helpful to the hon. Gentleman to know that the members of the work force that I have consulted, from the trade unions to the shop floor, feel that over the past two or three weeks they have been provided with a magnificent service of briefing by the management and are now well aware of the full details.
  Mr. Spicer: The hon. Gentleman is well qualified to speak on that. His work at Westland is well known and respected.
  If the European offer had been made two or three months earlier there would not have been the same confusion in November or December. That is the nub of the problem. It is no wonder that the work force, the shareholders and the board of Westland look upon Sikorsky as a friend in need.
  There comes a time in all walks of life when one has to stand by someone who has helped one out before. Half of the problem about the way in which this whole affair has been dealt with by the board is that it did not have a

  1117
  convincing offer early enough. It knows in its heart of hearts that all those great European companies wanted to see Westland go into liquidation, and that cannot be a welcome thought.
  Mr. Nicholas Baker: I am grateful to my hon. Friend for giving way; one neighbour cannot possibly refuse another. I am interested in what he said because a number of my constituents work for Westland. No one could fail to understand why the work force, given the direction of the board and the view that it takes in this matter, is now of the view that it is. But it is hard to understand from the account that we have heard this afternoon, however late the British-European consortium deal has come along, the apparent inadequacy of the consideration given to that proposal — not previous proposals but that proposal which my right hon. Friend the Member for Henley said is something that could only be Minister-led — by the Westland board of directors for the benefit of the company.
  Mr. Spicer: My hon. Friend makes a point, but I can only say that the board of Westland has lived for the past three months with the nightmare of liquidation hanging over it. There comes a time when one no longer has the opportunity or the time and decisions are made in haste. It is a tragedy that such a situation has been allowed to come about. I would say only that those of our constituents who work there have a much better future now than seemed possible six months ago. For that we have to thank the Government, my right hon. Friends the Prime Minister, the former Secretary of State for Defence and the Secretary of State for Trade and Industry.
  6.22 pm
  Mr. Ken Eastham: The House has been concentrating its attention on the activities of the Cabinet during the past two or three weeks. I shall not dwell on that because it has been more than adequately dealt with by my right hon. Friends the Leader of the Opposition and the Member for Cardiff, South and Penarth (Mr. Callaghan).
  It should be recognised that the crisis has lasted now for well over a year. Deplorable activities have taken place with regard to the personal conduct of members of the Cabinet but I want to put on record some of the facts of the unfortunate situation in which the company finds itself.
  The hon. Member for Dorset, West (Mr. Spicer) said that he had a constituency interest and referred to one or two alliance Members. I also have an interest, being an engineer by training and a member of the Amalgamated Union of Engineering Workers. We have a great interest in the fact that 7,000 workers are involved. For that reason I and my hon. Friends have during the past year continually asked questions during Question Time on defence matters and made representations which have evidently fallen on deaf ears.
  Numerous deputations have come to the House of Commons to meet Labour Members. There have been deputations from management and trade unions. I remember one meeting a few months ago when the management briefed Labour Members. They came along with slides and advised us in great detail just how critical their position was. At the same time, they also pointed out the problems of suppliers in the helicopter industry. We should remind ourselves that suppliers in other parts of the
  1118
  country are involved with the engines, electrics, instruments, metals and several other major components, and they are desperately interested in maintaining their companies and the jobs in them.
  The last meeting that we had with the trade union group from Westland took place on 12 December. Its members said that they did not want to be treated as political footballs. Understandably, we had a great deal of sympathy with them. That is exactly how Labour Members felt the workers had been treated. It is all right being concerned about the shareholders and the stock exchange, but there has been little comment during the debate on the livelihoods of so many families who are dependent on the contracts. Et is not due to any failings on the part of this group of skilled workers that they find themselves in a difficult position.
  On 12 December the members of the engineering union told us that on numerous occasions the management had encouraged them to come to Westminster to lobby Members on behalf of the company. Suddenly, a directive was issued by the company forbidding trade union members from doing that. 1 was rather suspicious about such a trend.
  Numerous deputations went to the Ministry of Defence and I joined one or two. We met the Minister with responsibility for defence procurement when we made special pleadings, explaining the desperate situation that the company was in. The Minister sat rather stony faced and gave us no encouragement whatever. We pleaded with him to tell the company what was required. We asked him, if he did not know the specification, to turn to his expert advisers to find out what kind of helicopter he wished the company to tender for. The reply from the Minister and his civil servants was to advise us that they did not know what specification the armed services required. I can understand that, but it is like constantly moving the goalposts. The management do the tendering and say what can be done and suddenly the civil servants change the specification. I remember pointing out to the Minister that it was not good enough for the company to be at the whim of the Ministry which, in six months, would provide such a specification.
  Sir Adam Butler: I think that the hon. Gentleman is referring to one or more occasions when he came to see me about AST 404. He must not distort the record. He knows that there was no question of the civil servants changing the goalposts; it was the Army, which, in the light of experience on various manoevres, decided that it did not want the smaller helicopter. It had to go back to the drawing board and see what was needed. That is what I told the House and his delegation when he came to see me.
  Mr. Eastham: I am not in any way distorting the facts; I am but stating the simple fact that the company was given no indication of the required specifications. At that meeting, I told the Minister that it was unrealistic to expect a company to continue to meet a wage bill when it was not obtaining the necessary contracts essential to its survival. Other hon. Members were present at that meeting—
  Mr. George Park: The delegations to which my hon. Friend referred met successive procurement Ministers, not only the right hon. Member for Bosworth (Sir A. Butler). The problem was not only one of the Army making up its mind about what

  1119
  it required — it continually added requirements for further equipment until it reached the point where the aircraft virtually required a new engine. The Army could not make up its mind about how many troops the planes should carry, so the orders could not be placed with Rolls-Royce and negotiations broke down.
  Mr. Eastham: My hon. Friend was present at the meeting to which I referred, and his comments are accurate. It was nothing but a can of worms. The MOD would not help the company by telling it what it really required.
  Although the MOD consistently said that it was unsure of its requirements, shortly before the House rose in December the Minister said that his Department was placing an immediate order for six helicopters. How could the MOD suddenly know what it needed? How was it able to place an immediate order for six Westland helicopters? I have not been given adequate answers to those questions.
  The debate during the last few weeks has centred on the shareholders, so it is especially interesting that the company is now wooing its work force and asking it which company it would like to succeed. I am not making a case about which firm should own Westland, but perhaps in future takeover bids for other companies the managements and shareholders will follow the precedent being set by Westland and consult their work forces. However, I doubt that that will happen. Workers should beware of Greeks bearing gifts. If Sikorsky takes over Westland, they can be sure that it will be the last time that they are consulted. They will certainly not be consulted about any slimming down of the work force and the consequent redundancies.
  Mr. Ashdown: The hon. Gentleman persists in carrying on the misunderstanding widely perpetrated by the former Secretary of State for Defence that Westland will fall under effective American control if the Sikorsky bid succeeds. Can the hon. Gentleman explain how a partnership shareholding of less than 20 per cent. is effective control?
  Mr. Eastham: I do not want to become involved in share ownership. My prime interest lies in ensuring that the skilled engineers retain the jobs to which they are entitled. I believe that to be a legitimate point.
  Much has been said about the American proposal, and the trade unions have studied it with great interest. A meeting in Brussels last Monday with the vice president of the Commission, Mr. Narjes, was attended by Mr. Jack Whyman of the AUEW, who is chairman for the trade unions, assisted by Mr. Chris Darke of AUEW-TASS. There were also three representatives from France, one from Germany and three from Italy. They said in their written account of the meeting:
  "Following a full and frank discussion, we all agreed on the need for European co-operation in Aerospace and the following statement was issued to the Trade Unions.
  On behalf of the EMF Bureau, a delegation composed of representation of EMF affiliated organisation in the UK, Germany, France and Italy met with Mr. Karl-Heinz Narjes, Vice President of the European Commission, whose responsibilities include industrial policy, on Monday 13th January, 1986 in order to discuss the future of Westland.
  The EMF delegation re-affirmed its support of European co-operation in the aeronautics field and hence chooses the European Consortium option whilst expressing the wish that this does not exclude other groups stressed that this sector, and
  1120
  especially the helicopter sector, is of strategic importance and that European manufacturers are fully capable of meeting demand."
  They also called for a debate within the European Parliament and asked the Commission to make its position known as quickly as possible. They intend to follow up the employment problems arising from whichever option is chosen.
  Usually, we do not hear any mention of trade union interests, yet they have a vital interest. The buying and selling of shares is not the only factor—jobs are on the line, and that is often forgotten.
  I always put a question mark over guarantees that companies might give their workers. Has Sikorsky given any clear guarantee about design and technology work? Are we certain that that will be retained in Britain? Are there guarantees about the manufacturing content of the helicopters—or will there be a system of sub-assembly, with the helicopters arriving in Britain in large cases and the workers getting out their screwdrivers and assembling Sikorsky-brand helicopters made in America? Is it simply a matter of Sikorsky wanting to secure the order book? Is it another example of asset stripping? We all know the consequences of asset stripping—the casualties are the thousands of workers made redundant. Those workers have done nothing wrong; they are the victims of wheeler-dealers.
  The Government should remember that a considerable amount of taxpayers' money has been invested in Westland. Members of Parliament who represent the engineering industry believe that the workers are entitled to job security. The Cabinet has hardly distinguished itself during this affair, and we have all suffered half truths and statements that are supposed to be truths. It is nothing but a can of worms, so I am cautious about Cabinet proposals. A cooling off period is needed so that we can make a proper assessment. The decision is not just for Westland, nor is it for America. It is a decision for Britain and it involves 7,000 jobs.
  Several Hon. Members rose ߞ
  Mr. Deputy Speaker (Sir Paul Dean): Order. Many hon. Members wish to speak in the debate, so I appeal for short contributions.
  6.40 pm
  Mr. Cranley Onslow: I have no wish to detain the House long. I realise that many of my colleagues wish to intervene.
  I must declare that I have no interest in these matters. Although for many years I had a connection with the helicopter industry, none of the events which concern Westland involves anyone with whom I am connected in a professional sense. I know many of the personalities. I do not conceal that from the House. I have known them for many years and I know something about the background.
  I might help the House by mentioning some of the personality involvements which I have had in the affairs of Westland and with the aerospace industry, with my right hon. Friend the Member for Henley (Mr. Heseltine), with whom I served as a junior Minister in the Department of Trade and Industry between 1972 and 1974.
  I regret the course of events that led to my right hon. Friend's resignation, as do most of his colleagues.

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  However, not all of us—not even a minority of us—think that his action was right or that his resignation was for the right reasons.
  If my right hon. Friend the Member for Henley were here, I am sure that he would not deny that between 1972 and 1974 he was an interventionist Minister in an interventionist Government. The Government actually managed the affairs of Rolls-Royce (1971). That Government sought to make the board of the newly constituted British Airways get on with bringing BOAC and BEA together. That Government were deeply concerned about the future of the British Aircraft Corporation, Hawker Siddeley and GEC. The Government sought to influence those companies. That never came to anything, but the Government were interventionists in a positive and thought-through way. My right hon. Friend mentioned the European Space Agency, and there was Concorde and all the European collaboration which that project involved.
  I hope that my right hon. Friend will not mind my saying that he was an interventionist in that term in office and that he showed in his comments today that he is still an interventionist. But he has been an interventionist in a different Government—in a Government who are not committed to intervention. In that fact the House can find the root causes of much of what has happened.
  It is also clear from what my right hon. Friend said that, in the particular case of Westland, the Cabinet had taken a conscious decision that it should not intervene. It is possible to disagree about the reasons for that decision and the merits of the issue. We have heard differing views this evening from hon. Members who have an acquaintance with Westland matters.
  It is important to get one issue straight in the minds of the House and of the public. Westland is not a big company. It is not involved in the highest areas of technology. The company is not crucial to our defence effort. Those facts were no doubt in the mind of the Cabinet when it approached the Westland problems, which have been well known to the House for a year or more.
  Westland is unlike Rolls-Royce. That was a large company in enormous trouble. It had enormous commitments to our national defence efort, to the defence efforts of our friends and allies and to great companies in the United States and elsewhere which could not be allowed to fall. Rolls-Royce could not be allowed to go bankrupt and be bought up—as I said at the time—by the Kamikaze Aircraft Corporation. We could not let Rolls-Royce go. A decision recognising that Westland today is different from Rolls-Royce then is not unreasonable. That decision should not have come as a surprise to my right hon. Friend.
  If there ever was a time when Westland could have been taken into public ownership, it was when the Labour Government were in power. The employees at Westland persuaded Ministers of the day not to nationalise the company. If I had been asked at the time, I should have said that that was probably the only company in the aerospace industry that should have been nationalised. It could have been restructured and been given different management. That could have solved the problems. That opportunity was missed by a Labour Government, not a Conservative Government.
  In its approach to the difficult problem the Cabinet might also have been persuaded, rightly, by the type of arguments deployed by my right hon. Friend the Secretary
  1122
  of State for Transport on one of those almost continuous television chat shows about Westland's problems after Christmas. He argued that unless the Government were prepared to use public funds to bring the company into public ownership they could not force the company to carry out Government policy.
  My right hon. Friend the Member for Henley should have recognised that. He should have seen earlier that his authority must come under severe constraint. It was clear that the majority of the Cabinet, having considered these matters on various occasions, did not think that the disadvantages of whatever solution the Westland board recommended to shareholders were serious enough to warrant intervention by the Government, using public funds. The disadvantages must have included the fact that the company was caught—as we are sometimes—in the crossfire between the Americans and the French.
  We are talking about an industry in which, apart from the American capability—which is considerable—the French are the leading helicopter manufacturers and have the greatest guarantee of support from Government. Some who study such matters would say that the French motives in this affair have simply been to use Westland as a blocking tactic to keep the Americans out of Europe. The French probably have no intention of furthering or fostering the company's capability, of maintaining its design staff or of giving it work which can be relied upon. I pass no judgment, but I think it is right to make that point in answer to the crude, anti-American sentiments voiced by the Opposition.
  Having heard what my right hon. Friend the Member for Henley said about the Alliance and the American defence capability, it seems to me, and to others who also study the subject, that the United States Government's commitment to NATO somewhat exceeds the French Government's commitment. That is to our advantage, not disadvantage.
  The Americans understand the politics, the logistics and the procurement problems of the Alliance. They know that if there is to be a genuine commitment by the United Kingdom to the continuance of the Alliance it must pay off in terms of worthwhile jobs. There is a good case for saying that it is more probable that the Americans will genuinely and positively seek to solve the difficulties of a company such as Westland more than will Aerospatiale. Those are matters about which it is possible to have different opinions. It is reasonable to say that the Government may not agree, but they agree at least that there is no need to intervene and that, without detriment to the national interest, the decision should be left to the shareholders. The more options that the company has before them, the better.
  My right hon. Friend the Member for Henley should have seen the position sooner — certainly before October. He should have realised that, whatever may have been said to him, he was not authorised to strike a deal with Europe, to pledge the Government's credit or to go beyond the influence that his former Department possesses.
  The Prime Minister was entitled to put an end to disagreement between her Ministers. I say to her with diffidence that when the historians compile their analysis of these events there will be some who will write how remarkably patient and long suffering my right hon. Friend the Prime Minister was during the disagreement. The House knows that I say that not to curry favour with the

  1123
  Prime Minister, but because I believe it to be so. Sometimes hon. Members say things because they believe them to be so.
  In his account of the course of events that led to his resignation—on television and on the radio—my right hon. Friend the Member for Henley complained of a constitutional outrage. In a perceptive article in The Guardian Mr. Hugo Young said that that was hyperbole—exaggeration carried beyond any reasonable point—and I agree with him. Mr. Young gave some examples about what he believed to be constitutional outrage.
  During the Christmas recess I read the diaries of Sir John Colville dealing with his experiences as private secretary to Sir Winston Churchill at Downing street. He relates the time when the Prime Minister had just had a stroke and told his private secretary, "Do not let my Cabinet colleagues know about this. Carry on the Government as if I were in full control." Mr. Colville and Mr. Christopher Soames, as they then were, had the opportunity, if they had wished to take advantage of it, to do just that. Sir John Colville states that to do that would have been a constitutional outrage and he is right. To cancel a Cabinet Committee or to make provisional arrangements for a Cabinet Committee and then not to hold it is not a constitutional outrage. Indeed, I suspect it may have happened before.
  Mr. David Winnick: Will the hon. Member give way?
  Mr. Onslow: I am sorry. There are other hon. Members whom the House may wish to hear, but the hon. Gentleman is not one of them.
  Some of those who have commented on the Westland affair have called it a trauma, which shows the depth to which our education system has descended. I think that they may have meant a drama, which is what it could be called. My main complaint about the coverage of the affair is that it has been made into a melodrama. Much has been magnified, developed and distorted out of all proportion.
  Mr. John Hannam: That is nothing new.
  Mr. Onslow: No, it is nothing new, especially when Parliament is in recess and the media can have a field day. It is standard practice. If the "Today" programme, which is dedicated singlehandedly to getting the nation out of bed on the wrong side every morning, and the rest of the media are allowed a clear run, they will take advantage of it. I do not complain, but I think I am entitled to make the observation.
  I am glad that Parliament is back and that parliamentary matters of great importance can be debated and considered in their proper place, which is in Parliament rather than on the television screen. I am pleased that we have had this debate and I welcome the Government's amendment. I believe that in his speech my right hon. Friend the Member for Henley supported the proposition of a Select Committee process to show its capacity for investigation rather than the type of inquiry suggested by the Opposition.
  Matters must be investigated. Challenges and assertions have been made, which no hon. Member should allow to be lightly brushed aside, such as the unlikely charge by my right hon. Friend about the Foreign Office, which I do not
  1124
  find credible. Things have been said about Sir John Cuckney and Sir Raymond Lygo and even about Sikorsky and civil servants. There are many other cases about which it is important to establish the facts and not simply to hear partial accounts bound by the limitations of a one-day debate.
  It would be interesting and valuable for the House to have from Sir John Cuckney, as chairman called in to rescue the company, an account of the way in which he believed it to be his duty to carry out that function. It is important for Parliament that there should be no prejudging and no leaping to conclusions just because something has been said and an opportunity to deny it has not yet come along. I hope that the House will avoid that temptation from now on.
  The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) mentioned in his speech the affairs of the British Aerospace letter about which we had such a storm in a teacup on Monday night—when the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) came shuffling in from behind his green baize door like a sort of geriatric Jeeves to do all the mischief that he could.
  My right hon. and learned Friend the Secretary of State for Trade and Industry — with with hindsight — could have done better. He should have known from the fact that my right hon. Friend the Member for Henley asked about a letter that he presumed that such a letter existed. It could be assumed that the letter's existence was likely to become public knowledge. However, the contents of the letter were the burden of the matter. Even the right hon. and learned Member for Monklands, East (Mr. Smith), who is so adept at whipping up a parliamentary storm, will concede that this is not the most serious of matters that have engaged the attention of the House. There are serious issues, but that matter need not detain us.
  With due diffidence, Mr. Speaker, if the debate is to be a credit to Parliament, as it should be, it is vital that it should proceed to its conclusion with the House being able to give a fair hearing to both sides. I would say to the Opposition Front Bench that we have recently had the unhappy experience of a type of trial by decibel. I do not believe that the House or the country wish to have that repeated tonight. Nothing is more important than that my right hon. and learned Friend the Secretary of State for Trade and Industry, whom we on this side of the House know and admire, should have an absolutely fair hearing during his reply.
  6.59 pm
  Mr. John Morris: The hon. Member for Woking (Mr. Onslow) described Monday's events as a storm in a teacup. Those events do not deserve that description.
  I do not wish to pursue the apology that the Secretary of State for Trade and Industry made on Monday about the non-disclosure of his awareness of the British Aerospace letter in his reply to my hon. Friends the Members for Bolsover (Mr. Skinner) and for Newcastle upon Tyne, North (Mr. Brown). I wish to query two aspects of the Solicitor-General's letter.
  The House will know how the Law Officers Department generally operates. It is briefed by other Departments, which provide the basic information. It would be extremely unusual if the Law Officers were suddenly to act of their own accord without being requested, briefed or instructed by the Department. The

  1125
  Law Officers are the Government's legal advisers; they do not act on their own. Therefore, one wonders who instructed the Solicitor-General. Who inspired him? Who advised him? How did he come to write his letter? Was it part of the black information campaign being run by No. 10 to denigrate the then Secretary of State for Defence?
  Mr. Winnick: The hon. Member for Woking (Mr. Onslow), who is the chairman of the 1922 Committee, came to the defence of the Prime Minister in a rather shoddy speech. Is my right hon. and learned Friend aware that the deputy chairman of the 1922 Committee is quoted in The London Standard as saying this:
  "The skids are under Leon."
  The London Standard states that the deputy chairman
  "said that Mr. Brittan's job was now in serious jeopardy, Mr. Fox added, 'What we have got to get clear is that there are not two standards, one for one Cabinet Minister and one for another.'"
  Therefore, what the chairman of the 1922 Committee said was contradicted by the vice-chairman.
  Mr. Morris: I am grateful to my hon. Friend, who will be able to develop his point later. But I do not wish to be detracted from the questions to which I seek answers from the Government. Who inspired the Solicitor-General to write his letter? If we get nothing else from the debate, the House deserves and demands an answer to my question about who motivated him to put pen to paper.
  The Solicitor-General states in his letter that he writes on the basis of Cabinet papers, and, he adds,
  "on the basis of the information contained in the documents"—
  those are Cabinet papers and what he has read in The Times—
  "which I emphasise are all that I have seen."
  That is a somewhat unusual phrase for the Solicitor-General to have used, unless he wished to protect himself against a future suggestion that he was inspired to write by someone else. If that is true, who was it and what was the state of knowledge of the Secretary of State for Trade and Industry? Was he full and frank with the House on Monday in reply to my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), who asked:
  "Was the correcting letter from the Law Officers to the Secretary of State for Defence seen by the right hon. and learned Gentleman or his Department before it was sent to the Ministry of Defence?"
  The reply was:
  "I saw the letter after it was sent."—[Official Report, 13 January 1986; Vol. 89, c. 783.]
  That completely ignored the other part of my right hon. Friend's question as to whether the Department had seen it.
  Against that background, I have asked—I want a reply tonight because we cannot wait until tomorrow or Friday when it would normally be given—whether the Secretary of State for Trade and Industry or anyone in his Department saw the Solicitor-General's letter in draft before it was sent. All that he says in his answer is that he saw it after it was sent. Did he see a draft, did he see the material upon which the letter was based, or was he consulted about the contents of the letter before it was sent?
  The purpose of my asking that is this: it is all very well for the Secretary of State during questioning to confine himself narrowly, as he did on the British Aerospace letter, to a precise answer on exactly what he did or saw at any one time. Although he ignored my right hon. Friend's invitation to reply for his Department, he was answering not only for himself, as he said earlier, but for the entire
  1126
  Government. It may be true that he saw the letter only after it was sent, but we know from our experience that letters are prepared in draft. On such a matter, a letter would go to No. 10, come back again and be seen by several people in several Departments, such as the Foreign Office. Although the Secretary of State may be accurate in saying that he saw the letter sent only after the event, can we be sure that he did not see the basis for the letter? In this instance, too, was he less than frank with the House?
  Mr. Dalyell: Does my right hon. and learned Friend believe that it is all the work of an over-zealous civil servant? Would not any civil servant, understandably mindful of his career, be extremely careful to get political instruction before doing any such thing? Would not those exceedingly careful men at the Law Officers Department take infinite trouble in contacting the Departments concerned before they wrote any such letter?
  Mr. Morris: I find it inconceivable—the House will respect my view on this, if on nothing else—that the Law Officers would have sent such a letter without consulting and obtaining the fullest possible instruction from the primary source, which is the Department concerned. In this instance, where the Solicitor-General was writing to correct another hon. Member he would have got full clearance from No. 10, too. That is my experience, and I doubt whether anyone who has served in Government would come to a contrary view. If I am wrong, I am happy to be corrected, but I want a precise answer, not another evasive answer that will cause the Secretary of State for Trade and Industry to return to the House to apologise once again for a half-truth.
  How did the Solicitor-General's letter come to be disclosed in part? Prima facie, such a disclosure is contrary to section 2 of the Official Secrets Act. Who would have authorised that? It would not be in the interests of the Secretary of State for Defence to do so. Indeed, he adopts a high moral tone on disclosures by civil servants or anyone else. He sends for the chief constable of the Ministry of Defence. He consults the Director of Public Prosecutions and the Solicitor-General, who then telephones the Attorney-General in the south of France, or does whatever is necessary to obtain the fullest possible clearance.
  Since the Secretary of State for Defence would not have disclosed the contents of the letter, who would have done so? We are left with the Secretary of State for Trade and Industry or No. 10 Downing street. Only those two parties would have an interest in disclosing the letter and, in all probability, the necessary material on which the letter was based. The Secretary of State agrees that he saw the letter after it was sent. I believe that a couple of hours elapsed before it was leaked from somewhere. Since the Prime Minister has agreed that an internal inquiry procedure has been set up, if evidence is forthcoming during that inquiry — we have had important although not always successful prosecutions under the Official Secrets Act during the past few years—what will happen to the perpetrator of the leak if he is discovered?
  On Monday I asked the Solicitor-General whether, in this context, he considered equality under the law as an important principle. I found some difficulty in phrasing my question and Mr. Speaker in his wisdom eventually agreed to my asking whether other inquiries had been inhibited because of the handling of that matter. In the

  1127
  course of his reply, the Solicitor-General assured me that in the discharge of all their functions, Law Officers exercise an independent and impartial judgment. The assurance I want tonight is whether that independent and impartial judgment will be given if, in the course of the internal inquiries, sufficient material is obtained to refer the matter to those who are responsible for prosecuting. I trust that whoever is responsible for the leak will be dealt with in the normal way—equality under the law—and that the Secretary of State for Trade and Industry can claim tonight that the leak did not come either from him or from his Department. Such an assurance would lift that cloud from his head.
  7.11 pm
  Sir Adam Butler: I will not follow the points made by the right hon. and learned Member for Aberavon (Mr. Morris), although I agree that he has made an important point that needs to be answered. That point, however, is a fairly narrow aspect of the problem.
  I had hoped that my right hon. and hon. Friends would approach the debate with some slight trepidation as to the outcome. Any anxiety that we might have had on that score frankly disappeared when we heard the very weak attack mounted by the Leader of the Opposition. The right hon. Member for Islwyn (Mr. Kinnock) claimed that he intended to talk about the substantive aspects, the importance of high technology, procurement policy and the relationship within NATO. Instead, he dealt solely in innuendo and allegation that were unsubstantiated.
  I would not be surprised if the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) is making a comeback. The right hon. Gentleman entertained us with his considerable wit on matters in which, as I shall show, he is somewhat out of date, not least concerning the factual matters about the two-way street.
  I should like to refer to the exchange of letters and in particular to the recollections of what took place at that now famous meeting between the chief executive of British Aerospace and my right hon. and learned Friend the Secretary of State for Trade and Industry. It does not do individual hon. Members, or the House as a whole, any good to imply, because one accepts completely what one party to the meeting says took place, that the other side is lying. I confess that frequently my recollections of meetings can, although made in good faith, be quite different in detail from those of other people who attended those meetings. In the case of the British Aerospace meeting we have the recollections of four or five people against the recollections of Sir Raymond Lygo.
  I know Sir Raymond Lygo well. He is an honourable man, and he is also a wilful man. Sometimes in such circumstances people hear what they wish to hear. The leader of the Liberal party opened our eyes to that fact and drew the attention of the House to the letter from Sir Austin Pearce that used the phrase:
  "Whatever the words used were meant to convey, the message was perfectly clear."
  In other words, it was not the meaning of the words that was important, but the interpretation that was put upon them. I prefer to accept that there was a misunderstanding on this matter which occurred in good faith and that in no
  1128
  way has my right hon. and learned Friend the Secretary of State for Trade and Industry misled or sought to mislead the House on that issue.
  I agree with my hon. Friend the Member for Woking (Mr. Onslow) in his comments about my right hon. Friend the Member for Henley (Mr. Heseltine), the former Secretary of State for Defence, and his departure from the Cabinet. It is a great pity that my right hon. Friend cannot continue in Government. The Cabinet and the Government need a range of views and men of different experience and outlook and one feature of the Conservative party is that we have accommodated such views. Equally, I believe that it was largely my right hon. Friend's own fault that he was forced to resign.
  We do not yet know the full story and we may never know what actually happened in my right hon. Friend's mind, though we have a better understanding now than we had before. My right hon. Friend's espousal of the European consortium bid, his organising of that bid and his paternalistic approach to that matter — he talked about "my deal that should have been considered by Cabinet"—were factors in his resignation. I told my right hon. Friend that I intended to be critical of him tonight and I am sorry that he is not present. I believe that it was his over-association with that bid that caused him finally to take the step that he did. That was a great pity.
  Mr. Tony Marlow: At some stage in his speech did not my right hon. Friend the Member for Henley (Mr. Heseltine) say that what he wanted was for the Cabinet to give a strong recommendation to the shareholders and management of Westland that they should go for a particular deal? Is that not a peculiar thing for a Conservative Cabinet to do?
  Sir Adam Butler: Does my hon. Friend the Member for Northampton, North (Mr. Marlow) mean peculiar for the Cabinet or peculiar for an individual Minister? I believe that in either case that would be completely wrong.
  My right hon. Friend the Member for Henley was piqued because the consortium's deal was not discussed after Friday 13 December by the Cabinet. Surely the party that should have discussed that was the Westland board and it did so. In the event, it would have been wiser politically, if not better, if the board had been prepared to put both options to the shareholders with a full explanation. It may be that the time pressures about which we have heard were such as to make that impossible.
  My right hon. Friend has earned credit in ensuring that the European consortium bid was firmly on the table. One must ask whether his intervention was necessary. He believes that Governments must be involved when defence collaborative deals are being formulated. I have had some experience of that. My hon. Friend the Member for Dorset, West (Mr. Spicer) drew attention to the long time scale during which bids could have been forthcoming. Bids could have come from GEC which could have bought Westland out of its petty cash. Bids could have been forthcoming from British Aerospace and I believe that the European bid could have been put together earlier. That did not happen, and Westland was under enormous financial pressure and up against its legal responsibilities in regard to continuing trading. Faced with that reality, Westland had to press on with the one genuine possibility that presented itself.
  My right hon. Friend the Member for Henley deserves great credit for his work in connection with defence

  1129
  collaboration in Europe and I gave my right hon. Friend my full support in that matter. The European defence industry will become fully competitive only if it collaborates and will be able to compete with the Americans only if it works together and produces long production runs and if the European NATO allies work to that end.
  The trading position with America is not, as the right hon. Member for Cardiff, South and Penarth described it, a shambles and a virtual one-way street. A few years ago the ratio would have been 4: 1. The proportion may have improved since I left the Government, but the position then was of the order 2: 1. However, the position in Europe as a whole was 6: 1 against Europe.
  My first point with regard to collaboration is a qualification of the need for and importance of such collaboration within European NATO. The Americans must accept that it is in the interests of the Western Alliance that the European pillar of NATO should be strengthened. That will require considerable maturity of response and resistance to the easy pressures for protectionism which may result. That view has friends in Congress and people such as Senator Nunn have chided Europe for its weakness in that respect, but the Americans cannot have it both ways. The Alliance as a whole and the Americans' interest as a whole, internationally and in security terms, will benefit from a stronger Europe.
  Mr. William Cash: Following the points made by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), does my hon. Friend agree that a successful arrangement with Sikorsky does not mean that it will automatically take over and effectively destroy the entire Westland exercise but that, on the contrary, a proper engagement with Westland through Sikorsky may enhance rather than damage the European pillar?
  Sir Adam Butler: I decided to avoid, if possible, advising Westland shareholders which way to vote, so I hesitate to answer that question. As I read what Sir John Cuckney has said in print and through advertisements, I believe that he sees the consequences of the Sikorsky deal as a stronger Westland than otherwise would be the case, and there is some support for the view that a stronger Westland will make for a stronger European helicopter industry than if the collaborative arrangement on the production side had taken place.
  Secondly, although the object of defence collaboration in Europe is excellent, it cannot and must not be exclusive. We have heard how much co-operation already takes place between ourselves and the Americans. That will and should continue, but it should not be exclusive. The same applies to Anglo-Canadian, Anglo-Australian and Anglo-New Zealand co-operation. European defence collaboration is perfect as an ideal, but it must not become an obsession.
  Thirdly, and highly relevant to the decision by the Westland board and shareholders, collaboration will be strongest if it is based on partnerships initiated by industry and on links seen to be of mutual advantage by the companies involved and where there is industrial compatability. Partnerships imposed by Ministers and politicians run the risk of suffering the same fate as the house that was built on sand.
  In response to the question half put by my hon. Friend the Member for Stafford (Mr. Cash), I believe not only
  1130
  that Westland may be stronger in the hands of Sikorsky but that collaboration on important projects such as the EH 101 and the A129 light attack helicopter will not be prejudiced if Agusta faces the situation, a matter on which there have been varying reports in the press. I believe that that collaboration will continue as planned.
  With regard to criticism of the Government's handling of the case, although with hindsight certain slips would not have been made, I believe that in general the Government have behaved very properly. Having decided against the nationalisation route—it is interesting to note that the Leader of the Opposition never even suggested that and had to be reminded of it as an option by one of his Left-wing friends—and having rejected the NEB approach of the Liberal party, the solution had to come from the private sector. As I have said before, as a Minister I considered very carefully the possibility of placing orders with the company, what we should buy if we were to rescue the company in that way and whether we could fill the two to four years' gap in production and thus produce the necessary cash flow to finance the new projects, but the models available to us were either not wanted or wholly unsuitable. As has been pointed out, the Army did not want the W30 even as a gift. However, we supported the company strongly in relation to overseas sales at all levels and especially in relation to India.
  The role of Government as sponsor and purchaser is extremely important and extremely delicate. Government must be even handed and I believe that in this case the Government must state clearly what their procurement policy is likely to be and their views with regard to international relationships. The letter from my right hon. Friend the Prime Minister to Sir John Cuckney spelled that out. In my view, however, the Government cannot say to shareholders, "The national interest is this, so we want: you to forgo what is in your best interests." Government cannot do that in a takeover situation and they cannot do it in this situation. It is for the board to fulfil its legal responsibility to run the company having regard to the interests of the shareholders and of the employees. My private Member's Bill imposing the obligation to have regard to the interests of employees was thrown out by the Labour Government but that requirement is now law. Boards have to run companies with that in mind and that is what the Westland board has been doing.
  I cannot say whether the Westland board is right or wrong, but I believe that it has a better chance of being right than the large number of people who sit on the sidelines and comment from partial knowledge. It is paramount that the shareholders make the right decision when they eventually vote and one must be concerned that their judgment should not be clouded by the political smokescreen that has arisen about certain very important matters. One must be concerned, too, that the Opposition, especially, have regarded this as an opportunity to damage the Government but may well merely damage the prospects of the company.
  Mr. Dalyell: On a point of order, Mr. Deputy Speaker. Can the Secretary of State for Trade and Industry confirm or deny the report on the 7 o'clock news that it was a senior official from the Department of Trade and Industry who leaked the letter from the Law Officers' Department?
  Mr. Deputy Speaker (Mr. Harold Walker): Perhaps the right hon. and learned Gentleman will seek to catch my eye later in the evening.
  7.29 pm
  Mr. Paddy Ashdown: I commence by declaring an interest—I have shares in Westland plc. For fear that people may think that I hold such a large amount that it will sway my judgment, may I explain that, even at their present elevated price, they are worth less than 10. I bought the shares in 1976 in order to attend the annual general meetings of the company and I will be there on Friday.
  If the Government are reaping the whirlwind over the Westland affair, that, frankly, is no more than they deserve. Over the past 15 months, I and other hon. Members from all parties have repeatedly warned the Government of the impending crisis at Westland helicopters. We were joined in this by the trade unions, to which I pay tribute, and the members of the work force. My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) mentioned that in detail in his speech.
  On 8 July 1985, I initiated an Adjournment debate in which I was supported by Conservative and Labour Members. We received scant reply from the Minister for Information Technology, and indeed the Prime Minister referred to this in her speech. This is not the first time that the Government have totally failed to see a major crisis in the making, despite ample warning. I understand that the Prime Minister is reported—contrary to the tone of her speech from which one would assume that Westland has occupied her every waking moment for the past five or six months—in last Sunday's newspapers as complaining at a recent Cabinet meeting that members of the Cabinet had spent three hours discussing an
  "insignificant little company in the South West".
  The Prime Minister is reported as saying:
  "What is the world coming to".
  The world has swiftly descended around her ears.
  It will be remembered that the Prime Minister showed an equivalent disregard for warnings she had received over the apparently insignificant little islands in the south Atlantic some years ago. The word being leaked by the Government is that the judgment of the former Secretary of State for Defence can no longer be trusted. I think we are entitled to be concerned about the judgment of the Prime Minister in failing to identify the importance of these matters and to take action to prevent them from damaging British interests.
  I listened with great care and with admiration to the speech of the former Secretary of State for Defence. Everyone present will remember that speech as a parliamentary occasion until their dying day. The speech was delivered with great sincerity and with considerable ability. I believe that the reasons given by the right hon. Member for Henley (Mr. Heseltine) for resignation were powerfully expressed and could not fail to find sympathy with every hon. Member who heard them. Those matters will go on rumbling.
  The point at which I part company with the right hon. Member for Henley is over some of the details that he provided of his part in the Westland affair. I must say that I was disappointed that, throughout his speech, although I made interventions to him on three occasions—
  Mr. Gerald Howarth: And I did.
  Mr. Ashdown—and although he accepted interventions from all other places in the House, he refused, for
  1132
  reasons of time. I note now that he is not in his place to hear what I have to say as the constituency Member. I find that quite remarkable. One or two people will draw the conclusion from this that some of the facts which the right hon. Gentleman related concerning Westland are shaky, to say the least.
  May I put the record straight concerning the view of Yeovil on the Westland affair? Westland first approached the former Secretary of State for Defence in October 1984—not, as the right hon. Gentleman said, last year. Westland mentioned the possibility of collaboration with the Europeans, but the right hon. Gentleman declined to show any interest. After Sir John Cuckney took over the company in July, he also approached the right hon. Gentleman about the company's problems. He was told that Westland was a private firm which should seek a private solution to its problems.
  I compare this to the noble sentiments that were stated by the right hon. Gentleman in his speech. There was no suggestion at that time of a desire to intervene to help the company. In fact, the right hon. Gentleman candidly admitted in his speech that one of his suggestions was that the company should not survive at all but pass into receivership. Westland also approached members of the consortium which the former Secretary of State for Defence claims to have set up — in his speech he referred to "my deal"—all of whom, in the summer and autumn of last year, turned their backs on Westland.
  GEC and British Aerospace said that they were not interested and privately suggested that they would welcome the company going into receivership so that they could pick up the pieces. The chairman of British Aerospace is even reported to have said that the production line for the new Anglo-Italian helicopter, the EH101, the world-beater that Westland was relying on, should be removed from Yeovil and taken to Brough. How is that for asset stripping? Then the role of those who now seem so eager to join Westland was that of undertaker, not partner. The right hon. Gentleman did absolutely nothing to stop them.
  Mr. Stephen Ross: Will my hon. Friend consider what would have happened to Westland's work force of 1,500 on the Isle of Wight if the company had gone into receivership? Would any European or British company be willing to pick up the pieces of Westland Aerospace in the Isle of Wight?
  Mr. Ashdown: Indeed not. My hon. Friend has made this point powerfully and capably, and I respect him for having done so.
  Westland then approached European aerospace firms for assistance. Again, in every case, they were shown the door. With over-capacity in Europe, all the continental manufacturers, each of which would have been in a similar position to Westland were it not for nationalisation, considered that the easiest way to solve over-capacity was to see Westland go under. This has privately been the primary commercial aim of Aerospatiale for many years. The House is entitled to know, now that European collaboration is so important, why they were not interested six months ago.
  Mr. Cash: Will the hon. Gentleman explain whether he has been entirely consistent — he has berated

  1133
  everyone else in Europe and in this House—in his own attitude to Westland, its shareholders and its employees from the beginning?
  Mr. Ashdown: I thank the hon. Gentleman for his intervention, but for reasons of time this is the last one that I shall accept. I shall come to his point later.
  It was only when Westland had been shown the door by everyone else that it turned to Sikorsky. Let me disabuse the House of some of the propaganda that has been put about concerning Sikorsky. Sikorsky is not, as it has been carefully portrayed, an American bloodsucker waiting to feed off a British firm. That may suit Labour party mythology, but it is at varience with the facts. Sikorsky has been Westland's old and reliable partner for more than 38 years. People in Yeovil trust Sikorsky. The relationship which has stretched over a generation has been warm, even-handed and profitable for both sides. That is why, at a recent meeting, when the two offers were put to the work force, Westland workers voted 1,500 to one in favour of Sikorsky.
  I find it odd to hear from the Labour party that somehow or other the workers are being hoodwinked and duped. What a demeaning view of the work force!
  Ms. Clare Short: Who said that?
  Mr. Austin Mitchell rose—
  Mr. Ashdown: I apologise to the hon. Gentleman, but for reasons of time I will not give way. He may study the record tomorrow and he will see that the record backs me up.
  The vast majority of the small shareholders, in common with the work force, support this deal. It is only the large financial institutions of the City of London which are opposed. It is interesting to note that it is an opinion which the Labour party supports. The shareholders and the work force support this deal because they know that every successful helicopter that Westland has built since the war, with the exception of the Lynx helicopter, has been built under licence from a Sikorsky design. That is precisely what is proposed.
  Far from merely resembling a United States kit, Westland has added its expertise to Sikorsky aircraft to make them world beaters. We have used the aircraft and even Sikorsky admits that they are better than its own. They can sell in places where Sikorsky cannot sell.
  I am sorry to say that, by contrast, Westland's relationship with Aerospatiale has been very different. It has been strained, difficult and infected with perfidy. Only when it became apparent that, because of interest shown by Sikorsky, Westland would not go to the receiver, as many hoped, the ex-Secretary of State for Defence and his present partners decided to act.
  A report in today's Financial Times shows that the ex-Secretary of State's chief official, Sir Clive Whitmore, did not even approach British Aerospace or GEC until a mere seven weeks ago in late November. It is no surprise that we believe that the ex-Secretary of State's consortium is hastily cobbled together and ill-founded. Nor is it without significance that each member of the consortium, which the ex-Secretary of State is lobbying so hard to force down Westland's throat, a few short months ago expressed their preference that the company should go into receivership.
  1134
  Is it any wonder that a constituent recently told me that they feel that they are being offered a poisoned cup from the hand of the poisoner himself?
  The right hon. Member for Henley expressed the view, which also is supported by the Labour party, that Sikorsky is about to own Westlands. Quite the contrary—it will own less than 20 per cent. In terms of finance and work, there is little to chose between the two offers. A recent parliamentary answer to me revealed that the six Sea Kings which are so tantalisingly dangled before Westland's eyes by the ex-Secretary of State if his consortium's proposals are accepted will come to Westland whichever offer it chooses. That offer reduces by 300,000 hours the work offered by the European consortium.
  Even if the offers were equal in quantity, they are not equal in quality. Contrary to the propaganda that is being put about, the Sikorsky-Fiat offer gives more high technology, not less, and provides work in the late 1980s when Westland needs it, not in the early 1990s when it does not. It offers as a partner a firm that Westland has worked with for 37 years, not those who so recently said that they would like the firm to go into the hands of the receiver.
  Perhaps most important of all is the fact that the offer gives Westland two firms to deal with rather than five and one new director on the board, not four. The ex-Secretary of State's proposals would mean Westland having three representatives of foreign Governments because every other European manufacturer is nationalised. It would put on Westland's board directors who represent its chief competitors. Westland is competing against the French in India. It is not difficult to imagine what the role of the Aerospatiale director on the Westland board would be.
  I am a fervent supporter of European collaboration, especially in defence matters. I have long said that, all other things being equal, I would prefer a European deal. I hope that that answers the hon. Member for Stafford (Mr. Cash). Throughout, I have said that I would keep an open mind, that I thought that Sikorsky had the edge but that I would wait and see what happened. Only last week when matters were finalised did I come down in favour of Sikorsky. All other things being equal, I should have preferred a European deal, but all other things were not equal.
  It would be ludicrous to ask Westland to accept any deal simply because it has "Europe" stamped on the outside. Europe is a good thing, but not if the price is increasing the risk to a great firm that has served Britain's defence interests magnificently and to thousands of jobs. The paradox is that the ex-Secretary of State for Defence has hastily cobbled together an inadequately founded deal and has thus damaged the very cause that he would espouse—European collaboration. The ex-Secretary of State claims to have espoused that cause as a matter of principle. He told us that all that he has done has been done as a matter of principle. I have to tell him that we in Yeovil see things somewhat differently. We cannot understand how he can make a principle out of a firm that he was prepared to see go into the hands of the receiver only a few months ago. We do not understand how the man who insists on giving £10 billion to the United States for Trident without British industry getting so much as a look-in should now be concerned about the continuation of a 38-year-old liaison that has profited Britain considerably. We are bewildered that the person who brought cruise missiles to Britain without giving the British people a say in their

  1135
  firing should now be worried about the United States taking over the country. We cannot see how the person who signed a star wars deal with the American President only a few weeks ago to act as a siphon for Britain's real high technology should now be worried about technology leakage from Westland. The ex-Secretary of State might claim all this as a matter of principle, but we see things differently.
  It is essential that Westland's problems be resolved as quickly as possible. Further delay must mean greater risk to it. The management must be allowed to get back to running the company in these delicate circumstances and those who work there must be able to get back to their jobs. The Government must ultimately recognise that, because of their ineptitude—the ex-Secretary of State plays a part in this—the future of a great company that has served Britain magnificently and the security of thousands of jobs and the prosperity of my area is now in the hands of manipulators in the City of London and politicians whose concerns include their reputations rather than exclusively what is good for Westland.
  When this ridiculous farrago, this circus, has moved on, and Westland is merely a mark in the political history books, we shall have to get on with the job of earning our living and serving Britain's defence interests by making the best helicopters. We will expect the Government to provide the support that they have so signally failed to provide throughout this sorry saga.
  7.47 pm
  Mr. Jerry Wiggin: The House knows that I share a deep interest in the employees of Westland helicopters — 1,400 of them work in my constituency. The next biggest employer employs half that number. The company's future is therefore a matter of great concern to me and my constituents. The wealth that Westland puts into Weston-super-Mare is crucial to its economy.
  I also want to express the anxiety that is felt by my constituents and those of the hon. Member for Yeovil (Mr. Ashdown). I am not convinced that some of that anxiety is as serious as is made out by some union leaders for their own purposes. In July, it looked as though the company was going into receivership, but it now has a good hand with two bids on the table.
  The hon. Member for Yeovil is right to draw attention to why the management and work force feel comfortable with Sikorsky. As engineers, they have had a very good relationship with the company. They have found its designs good, although improvable, for a long time. With Aerospatiale, however, Westland has experienced the difficulties that were also experienced in the joint project to build Concorde, with three helicopters. The French are not easy people to deal with and their method of doing business is alien to our people. In both cases, however, substantial—
  Mr. John Smith: Concorde.
  Mr. Wiggin: I remind the right hon. and learned Gentleman that I came to the House when Concorde was being built. There was a daily flight of engineers and technicians between Filton and Toulouse to deal with that project. The stories about differences of opinion were
  1136
  multitude. I do not want to exaggerate that; I simply make the point to explain the lack of enthusiasm within Westland for a European consortium.
  In every conversation that I have with my constituents on the subject, the importance of urgency is raised. They believe that for peace of mind, for the credibility of the company and, very importantly, for the planning of the future work promised by both consortia there should be an urgent decision to resolve uncertainty. Nothing is as unsettling as uncertainty.
  How did we get into this mess? As early as 1982, it was clear that there was a gap in the military procurement of helicopters by the Ministry of Defence from Westland. In an open and discussed manoeuvre, Westland went into the civilian market just before the over-capacity of helicopter production worldwide and the collapse in the oil price led to a catastrophic diminution in the market. I do not exempt the unions from blame. The productivity of Westland factories has not been as good as it should have been. Indeed, in Weston-super-Mare there was a disastrous strike not so many months ago.
  Everyone, including the Government, has to accept some of the blame. The Government made a serious misjudgment in not appreciating the deep national interest that people have in the country's single helicopter manufacturer. Small though the company may be, it has managed to run up large liabilities. The concept that receivership would in some way solve the problems of Westland is mind-boggling. I was sorry to hear my right hon. Friend the former Secretary of State say that he seriously considered that option. It would have been damaging to the name of Westland. It took Rolls-Royce years to recover from what happened in 1972. It was ridiculous to contemplate that option for Westland.
  Sir John Cuckney was told by the Government to solve his own problems. When he came back with Sikorsky in tow, the European helicopter manufacturers took fright. It was that more than anything else that enabled the European consortium to be put together.
  I am sorry that my right hon. Friend the Member for Henley (Mr. Heseltine) resigned from the Ministry of Defence. I had the privilege of working for him for a few weeks. I believe that he started to breach many of the impenetrable barriers that had been left by Secretary of State after Secretary of State. The creation of a central staff, which I considered to be one of the greatest achievements of his period of office, will be to the benefit of that Department for many years.
  The industrial might of the United States leads one inevitably to the conclusion that any item of armaments can be bought more cheaply across the Atlantic. I remember seeing more Chinooks on one airfield than we have in the whole Royal Air Force. I remember seeing on one airfield a line-up of fighters that contained twice as many as we have in our Air Force. It is such capacity that makes every item, from a simple bullet to the most sophisticated aircraft, cheaper across the Atlantic. That is what the Ministry of Defence must resist. I hope my hon. Friend the Minister of State is listening, because he and I have recently fallen out on the very point of price and whether it is better to buy cheaply across the Atlantic or to support our own industry.
  On the other hand, one has to accept that, if the united states of Europe, which is what I believed I was voting for when I supported our entry into the EEC, is to mean anything, it must be able to produce helicopters. So the

  1137
  concept of an international consortium based within Europe to manufacture helicopters must be right. The Falklands war taught us many lessons. We must have within the shores of the United Kingdom basic indigenous suppliers of armaments materials. Could we have obtained the very quick assistance that was given at Yeovil and Weston-super-Mare during the Falklands war if parts had had to come from the United States? Would the United States have felt able politically to assist us in that unforeseen circumstance? Whatever happens, and in whatever partnership, we must maintain our capacity within the United Kingdom.
  The basic problem is that we do not have enough helicopters in our armed forces. The sooner we tackle that serious problem the sooner we will get over the difficulty that is facing us today. The United States has 14 helicopters per 1,000 men in the armed services; the United Kingdom has 2·7. The United States has 800 helicopters per division; we have 180.
  When I was in the Ministry of Defence, I found it difficult as a layman to persuade the military to consider the movement of men and materials by helicopter. There are 100 good reasons why it cannot be done and the military knew them all. There are 1,000 reasons why it can be done, and they did not know one of them. If a senior military officer is hung up on the movement of infantry in armoured vehicles, he will not allow his staff to argue to the contrary. I should remind the House that the Ministry of Defence is spending just under £500 million on the MCV80. I have long held the view that at least half that money should have gone into helicopters, not for constituency reasons, but because that is how modern battles will be fought. That is what the Americans found in Vietnam and what we found in the Falklands. It will be the same if we are unfortunate enough to be engaged in a war in future.
  I am sad that the affairs of Westland have caused such division within the ranks of the Cabinet. One of the greatest evils that affect Government today is the propensity for leakage of documents. How many documents have been leaked already in this unfortunate saga? It is impossible to run a Government or a business unless proper secrecy and confidentiality are observed. When documents are leaked indiscriminately or deliberately there is blood on the carpet and damage all round.
  I hope that within the next few days the Government will put their mind to drawing this unhappy affair to a conclusion. If the European consortium means business, it can for a modest sum make a bid for the company and buy out existing interests. If it does not mean business, let is say so and let the Americans get on with it. Between them, let the matter be resolved as soon as possible.
  7.58 pm
  Mr. Willie W. Hamilton: Anyone who attended the early part of the debate must have noticed the striking contrast between the narrow, low-key speech of the Prime Minister and the statesmanlike speeches of the ex-Secretary of State for Defence and of my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan). They both saw the great danger which exists not only for this country but for Europe if there is American domination in defence and in the commercial sphere. It is not anti-American, as the Secretary of State
  1138
  for Trade and Industry has asserted, to say that we are entitled to defend our national interests as we see them as strongly as the Americans defend theirs.
  By any standards, this has been a devastating week in parliamentary politics. It has been strewn with nuggets of gold for students of the British constitution. It has echoed with accusations from all sides of bad faith, retractions, character assassination, half-truths and downright lies. As if that were not enough, there has been, as the hon. Member for Weston-super-Mare (Mr. Wiggin) reminded us, a veritable flood of infringements of that sick joke, the Official Secrets Act 1911, by a succession of Ministers, ex-Ministers and others.
  In all this furore it seems that the least important matter at issue is the future of Westland. I have no reason for going into that and, indeed, I am not capable of making an educated assessment of the company's position. However, that is rather disturbing, or should be, for a Government who claim to be patriotic. A decision is being made by the unseemly scramble of unknown and faceless men and women for shares in the City. Does anyone really think that that scramble is being motivated by a defence of the national interest? Is it merely an example of squalid greed that is motivating those concerned?
  A Conservative Member said yesterday that, if a vital defence concern is implicated, the Government cannot stand back and say, "Leave this to a group of shareholders of whatever size the company might be." Whatever the future of Westland, and long after that is decided, the political and constitutional consequences will be enduring and dramatic, not least for the future of the Prime Minister.
  The right hon. Lady's speech this afternoon was deliberately low-key and irrelevant to the issues that we are debating. She, above all Ministers and ex-Ministers, comes out of the shambles with the most egg on her face. From the outset, her fumbling and deviousness have allowed a relatively minor pimple to grow into an angry and ugly boil, which finally burst with the Cabinet walkout last Thursday of her Secretary of State for Defence.
  The former Secretary of State for Defence was clearly fed up. The Cabinet meeting last Thursday was the climax of a general disillusionment with the way in which the Prime Minister runs the Government. Since 1979, the right hon. Lady has shown a ruthless penchant for kicking out of office a gaggle of Ministers who have dared to disagree with her. Never until now has she had one who has had the guts and the courage to walk out on her. That is the crux of the constitutional issue that is now before the House.
  Unlike the rest, the right hon. Gentleman does not intend to go quietly. We shall encourage him to follow the course on which he has embarked. The right hon. Gentleman has gone with an extremely big bang. My right hon. and hon. Friends and I do not regard him as any sort of martyr, but having listened to him this afternoon and to the Prime Minister, any objective observer and listener must be convinced that he was telling the truth rather than the Prime Minister.
  Almost immediately after the right hon. Gentleman had walked out of the Cabinet meeting, he became the villain of the piece. He had been the favourite of Tory party conferences and the favourite within the Cabinet. He was the favourite at the 1983 general election to attack the CND. Immediately after he walked out, there was initiated a carefully orchestrated process of character assassination by No. 10. That was not initiated by the Prime Minister.

  1139
  The right hon. Lady delegated the task to other Ministers who are prepared to tow the line, not least her mincing lackey, the Secretary of State for Trade and Industry. By God, what a pathetic figure he is! Most of the charges that he made have been renounced by successive Ministers, including the Foreign Secretary, the Home Secretary, the chairman of the Tory party, the Chancellor of the Exchequer, the Law Officers and various loud-trumpeting Tory Back Benchers. Over the past week liars and dissemblers have been strewn around like dossers at midnight underneath Waterloo bridge.
  The Government, who presume to be an Administration of law and order, have engaged in more infringements of the Official Secrets Act in the past week than have taken place previously over the past decade. The former Secretary of State for Defence may be included. There is the Solicitor-General and a person un-named, and my hon. Friend the Member for Linlithgow (Mr. Dalyell) probably has the name of that person by now. The list includes the Secretary of State for Trade and Industry. I wonder how many prosecutions will result as a direct consequence of the infringements.
  We know that Mr. Ponting and Sarah Tisdall were prosecuted, but we shall see whether that is the fate of the Solicitor-General, the Secretary of State for Trade and Industry and of the right hon. Member for Henley (Mr. Heseltine). I forecast that there will not be one prosecution as a direct result of the revelations. The unvarnished truth of this squalid story must be exposed in the national interest. I hope that the Government will give unequivocal undertakings that all papers will be available to any committee which seeks to investigate this matter and that all Ministers will give an unequivocal undertaking that they will give oral evidence to any such committee. If they are searchers after the truth, as they try to convince us they are, nothing less will suffice.
  When the future of Westland is decided, whichever way it goes—I hope that it goes the European way—the constitutional issues will remain. They will plague the Government until the truth, the whole truth and nothing but the truth, is disclosed.
  8.7 pm
  Mr. John Wilkinson: After today's debate, there may be as many different views on why my right hon. Friend the Member for Henley (Mr. Heseltine), the former Secretary of State for Defence, resigned as there are Members who heard him speak this afternoon. I have my own opinion, for what it is worth, and I shall share it with the House. To be candid, I think that my right hon. Friend was rumbled. I found his stewardship of the Ministry of Defence deficient in terms of a helicopter strategy. Many of us were warning the Ministry for many a long month of that deficiency. The aviation committee, of which I was the then chairman, visited Westland at Yeovil in November 1984, and ever since that date it was warning the Ministry, and especially my right hon. Friend, that something urgent had to be done about Westland if the company was to be saved.
  My right hon. Friend rationalised his resignation. He did so with the invocation of grandiose ideas about the European-American relationship, the two-way, or, as he would describe it, the one-way street, and the difficulty which our manufacturers face in selling their products into
  1140
  the American market. As so often with my right hon. Friend, he overstated his case. He suggested, for example, that it was virtually impossible to sell into the American market and yet Normalair Garrett, which is an important part of Westland, has a significant system in the Rockwell B1 supersonic bomber. It has another system on the F18 fighter aircraft. Normalair Garrett is a 50–50 company, half Garrett and half Westland, half American and half British. So the fact that that section of Westland has been in part American has in no way detracted—rather the contrary—from its ability to sell into the American market.
  Furthermore, one of the great difficulties that Aerospatiale, the big white hope of my right hon. Friend the former Secretary of State for Defence, has faced in selling its products into the United States has been its lack of an American partner to assist it in that process. One of the causes of the substantial losses incurred by Aerospatiale in its helicopter division has been its failure to sell helicopters, particularly the Dauphin, into the United States of America.
  It is my belief that the relationship with Sikorsky, if endorsed by the shareholders on Friday, will enable the Westland company to sell the EH101 into the United States market. It would not have such a good chance of doing so were the Sikorsky-Fiat rescue package to be turned down. I say that because Sikorsky does not have an aeroplane in the 15-tonne class, the EH101 class, so it looks to the acquisition of the possibility of helping to sell the EH101 in the USA as something significant.
  My right hon. Friend also adduced all sorts of grandiose arguments about burden-sharing. Here, too, his arguments were deficient because if burden-sharing means anything to me—and I wrote a paper for the Western European Union on this subject only two years ago—it means an equitable sharing of the financial burdens of defence.
  Mr. Peter Hardy: The hon. Member is quite right to remind the House that he wrote a report for the WEU two years ago, but he will recall that on 5 December he presented a report on the European fighter aircraft. It seems to me—and the hon. Member will recall that I spoke in the debate and supported his paper, which also had the support of Opposition Members—that the basis of his argument as recently as last month was that we had to co-operate in Europe, as with the European fighter aircraft that he has so consistently supported.
  Mr. Wilkinson: I am grateful to the hon. Gentleman, who leads the Labour delegation with distinction, but I shall show him that there is no mutual incompatability between these two propositions. If burden-sharing is to mean anything, we have to put our money behind our strong sentiments in favour of the Alliance, and this my right hon. Friend was signally unable to do. If he had been able to put money forward for some short-term helicopter procurement, while a longer-term rescue package was put into place, the position of the Westland company would not have become so critical.
  In particular, he could have ordered some more commando versions of Sea King for the Royal Marines to replace their existing Wessex; he could have ordered more Sea Kings to replace the existing Wessex for the Royal Air Force for air-sea rescue; he could have retained the Wessex thus freed for service with the Royal Auxiliary Air Force in the light support role; he could have given a clear

  1141
  confirmation that the Royal Navy would actually order the EH101 — an order has not yet been placed for that aeroplane. To have done so would perhaps have facilitated borrowing from the banks for Westland.
  He could also have concerted a requirement with the Italian army for the mark 2 version of the Agusta 129. This he failed to do. Last, but not least, the Royal Navy could have procured the hovercraft, if only in an experimental role, for mine-hunting. My hon. Friend the Member for Leeds, North-West (Dr. Hampson) laughs, but it has considerable merit for minesweeping in inshore waters.
  Sir Kenneth Lewis: I do not dispute what my hon. Friend says because he speaks from a knowledge of these things, but I would like to ask him whether finance might not have been a difficulty for the Ministry of Defence when it came to ordering a large increase in its hardware at a time when the Treasury was bearing down heavily on its budget.
  Mr. Wilkinson: It certainly was a difficulty but the difficulty at that stage was not a lack of funding because of the Treasury. That will happen. The former Secretary of State for Defence continues to insist that there will be no need for a defence review when we know that there will have to be a defence review because of the relative price effect, whereby the cost of weapons goes up faster than inflation.
  The point that I would like to make is that the overspending on the Nimrod mark 3 programme was so severe that it impinged adversely on the budget for the procurement of aircraft. This was the main reason for the inability of the services to acquire helicopters and, above all, the inability of the services to fulfil air staff target 404 for a light support helicopter to be flown by the Royal Air Force in support of the Army.
  The Army has identified the need for such an aeroplane since the early 1970s. The actual air staff target was not written until 1978. The target for a 13-seat aeroplane was written round the Black Hawk because at that time it was the only aeroplane that could fulfil the role because the military version of, the W30, was not developed. Yet, because of the funding problems that I have mentioned, AST 404 fell by the wayside—and more is the pity as far as Westland is concerned.
  I believe that this judgment is inherently correct, that there will be a need for such an aeroplane and that this need of our armed forces will have to be fulfilled.
  Dr. Keith Hampson: Will my hon. Friend give way?
  Mr. Wilkinson: No, I am trying to reply to the hon. Gentleman. He referred to my report on the European fighter aircraft. I was going on to say that the former Secretary of State for Defence, was wrong to suggest that Government should always lead the collaborative process and that, unless that happened, collaboration was bound to fail. There are many instances where successful collaboration is industry-led. The hon. Gentleman will remember the 1981 seminar in Lancaster house, under the auspices of the WEU, on aeronautical consortia in Europe, for which I was general rapporteur. There was the STAR communications satellite consortium, the MESH consortium in space business, the Euromissile Dynamics Group. These consortia, industry-based, prove that in many
  1142
  instances there are good industrial grounds for collaboration. As my right hon. Friend the former Minister of State for Defence Procurement, the Member for Bosworth (Sir A. Butler), said in an excellent speech, from all his experience that, in his judgment of Government, is the case.
  Dr. Hampson rose—
  Mr. Wilkinson: May I please finish the argument? I think that my hon. Friend has only just come in and I am trying to make an important point.
  My right hon. Friend the former Secretary of State for Defence tried throughout the summer to reconcile the irreconcilable by trying to get the French into the European fighter aircraft project. That we all knew to be impossible because there were essentially two requirements. The French air force requirement, which is optimised for air-to-ground, is different from that of the other four air forces, which is essentially optimised for the air-to-air role. Nevertheless, my right hon. Friend insisted on spending time and nervous energy on this problem. Eventually the Germans called the French bluff, the Luftwaffe insisted that its operational requirements must be met in full. To his credit, the German Defence Minister, Manfred Wörner, who is a good friend of mine, stuck by the German air staff's decision and the former Secretary of State for Defence had to accept the reality.
  Dr. Hampson: Will my hon. Friend give way?
  Mr. Wilkinson: No. Please let me finish my sentence.
  The other side to this was that so much time had been expended over EFA on the part of the former Secretary of State for Defence, when it was quite clear that the PANAVIA structure was the right one and should be built upon, that he failed to spend sufficient time on the problems of Westland.
  Dr. Hampson: Will my hon. Friend give way, because this is a monstrous, grotesque distortion of the truth?
  Mr. Wilkinson: I give way.
  Dr. Hampson: My hon. Friend well knows that my right hon. Friend the former Secretary of State for Defence spent all that time convincing all the Europeans of his and this country's total commitment to European collaboration. That was fundamental to having the Germans on our side so that they would not go with the French. I was a party to the lobbying efforts by officers of the Committee. As my hon. Friend well knows, we were trying to get the Ministry of Defence to buy the W30 rather than this extraordinary package, which my hon. Friend has now conceived out of his own expertise. He knows full well that the problems faced in getting the air staff target accepted had nothing to do with my right hon. Friend the former Secretary of State for Defence. There were long-standing problems concerning the financing of, for example, Nimrod and the Army's attitude which preceded the period in office of my right hon. Friend, for whom my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) used to work.
  Mr. Wilkinson: I regret allowing that intemperate intervention by my hon. Friend the Member for Leeds, North-West. I worked with the project management team on the prototype of the Jaguar. I have been associated with the Tornado. I believe that European industries have

  1143
  worked well together for a much longer period than my hon. Friend the Member for Leeds, North-West has had experience in these matters. I shall leave it at that.
  The trouble is that my right hon. Friend the former Secretary of State for Defence did not put concrete proposals on how work would be provided to fill the hole in Westland's order book. All the projects in the so-called European package are paper aeroplanes for the 1990s. My right hon. Friend said that somehow we shall "merge"—whatever that means—the PAH2 of the French and Germans with the Agusta 129 of the Italians. The general staffs of the French and Germans have found it hard enough to concert their requirements around that single aeroplane. The British and the Italian armies have not agreed the specification of the joint aeroplane, so I do not know how that merger will take place. It does not provide work for Westland. The NH90 is also a paper aeroplane, in which five partners are involved. It is a nine-tonne aircraft with a configuration similar to that of the Black Hawk. It will come into service in the late 1990s. The Black Hawk is available and, with the new Franco-British RTM322 engine, which will operate shortly, its lift capability will be augmented by 25 per cent. That cost-effective option for our armed forces will sell exceedingly well on export markets, for which Westland's sale territories have already been designated. The EH101 is not incompatible with the existing Sikorsky programmes.
  I regret to admit that I think that my right hon. Friend the former Secretary of State for Defence was rumbled. It was only when Sir John Cuckney had a rescue package in place that Mr. Levene, the national armaments director, was told to meet his European counterparts—
  Dr. Hampson: It was not Levene. My hon. Friend has an obsession with Levene.
  Mr. Wilkinson: I do not have an obsession with Mr. Levene. That was when Mr. Levene was told to come up with an alternative strategy. That strategy does not provide the work needed. If implemented, it will be detrimental to the competition needed in the defence procurement business to secure the most cost-effective equipment for our armed forces.
  8.23 pm
  Mr. David Winnick: Clearly, if there had been no interest in the two groups that have bid for Westland, the Government would have been quite willing to let Westland go to the wall. The Prime Minister made that position clear this afternoon. That point should not be overlooked by the work force in Yeovil or those employed by other firms dependent upon Westland. Many other firms—not least in the west midlands—have collapsed because of Government policy during the past six years.
  Like my colleagues, I listened with much interest to the right hon. Member for Henley (Mr. Heseltine) when he spoke of the need for a substantial industrial base in Britain. How right he was. That industrial base has been constantly undermined and eroded by the policies of the Government of which the right hon. Gentleman was a member. He must take some responsibility for what has been happening in industry since 1979.
  As for the exchange of letters between the chairman of British Aerospace and the Prime Minister, one can see that there is a considerable difference between the accounts of
  1144
  the meeting held on 8 January. The only point on which the two sides seem to have agreed was that there was a meeting on that date. This matter must be pursued.
  Paragraphs 6 and 7 are the crucial points in the chairman's letter to the Prime Minister referring to the meeting on Wednesday with the Secretary of State for Trade and Industry. On 13 January the Press Association's news agency quoted a source close to the board, who said:
  "I was astonished to receive a phone call on Wednesday night from an equally astonished and somewhat shaken chief executive saying that he had been subjected to a naked threat in Mr. Brittan's office."
  He said that he
  "felt so strongly about the manner in which the threat had been made that he felt he had to report it to his board that night."
  I wish to ask this question, especially because the Secretary of State for Trade and Industry is in his place—why should the chief executive of British Aerospace say that he was told by the Secretary of State that the company's actions were not in the national interest and that it should withdraw from the European consortium unless that were true? What would be the chief executive's motives in going to his chairman and making up a story? Does the chief executive bear a grudge, or is he conducting a vendetta against the Secretary of State? Is it suggested that the chief executive is in the pocket or the pay of the right hon. Member for Henley?
  If the chief executive of BAe has told the truth, as outlined in the letter from the chairman to the Prime Minister, the Secretary of State for Trade and Industry has clearly not been doing so. One thing is certain—both cannot be right. The accounts differ substantially. We must therefore conclude that, if the chief executive is right, the Secretary of State has not been telling the House the truth.
  The Secretary of State for Trade and Industry must realise that this matter will not go away. Despite the forthcoming vote, which obviously will show a substantial Government majority, most of the right hon. and learned Gentleman's colleagues believe that he should go.
  The London Standard tonight quotes the hon. Member for Shipley (Mr. Fox), stating:
  "Mr. Marcus Fox, the deputy chairman of the powerful 1922 Committee … declared: 'The skids are under Leon.'"
  The article continued:
  "Mr. Fox said that Mr. Brittan's job was now in serious jeopardy. And he added: 'What we have to get clear is that there are not two standards, one for one Cabinet Minister and another for another.'"
  The Minister of State for Defence Procurement (Mr. Norman Lamont): Where is the relevance in this?
  Mr. Winnick: The hon. Gentleman should know the relevance of this—we do not believe the Secretary of State for Trade and Industry. We believe, as do the majority of Tory Members, that the right hon. and learned Gentleman should, in duty and honour, resign from his position.
  I also want to comment about the way in which the Prime Minister goes about her job. In an effective speech my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) spoke about that. What has emerged from all that the right hon. Gentleman the Member for Henley said when he resigned from his position confirms the strong impression of what The Economist last week described as the Prime Minister's "increasingly catankerous leadership". That journal also said,

  1145
  "Her treatment of senior colleagues has landed her with a needless load of trouble."
  It is interesting to note that since the Prime Minister first formed her Administration in 1979, 14 members of the Cabinet have been dismissed, and now the right hon. Member for Henley has resigned. We should not be surprised at that style, because before she went to Downing street the right hon. Lady publicly and frankly stated that if she became Prime Minister she would have no time in the Cabinet for arguments. That is one election promise she has undoubtedly kept.
  Cabinet Ministers who hold or have held different views from hers—and there were quite a number of them—were simply removed from office. In the main what the right hon. Lady wanted was a Cabinet of people who were not willing to stand up to her or to argue with her. What we now have is a Cabinet of such people, with the exception of the Secretary of State for Energy who once a year is allowed to make a speech, usually out of London, showing how wet he remains. On the basis that he makes such a speech only once a year, he is allowed to remain in the Cabinet. I am afraid that the rest of the members of the Cabinet know well that if they were to speak out or argue with the right hon. Lady or insist on matters in the way that the right hon. Member for Henley has done, they would be dismissed.
  An increasing number of people realise the right hon. Lady's domineering and intolerant attitude and deeply resent it. What we have learnt from the right hon. Member for Henley confirms our strong impression about what has been going on in the Cabinet in the past six years. The attitude of the British people in resenting the Prime Minister's style, attitude and domineering ways will shortly be shown in Fulham and certainly at the next general election.
  Mr. Speaker: Before I call the next speaker, I should say that I understand that the Front Benches would like to commence the winding-up speeches at 9 o'clock. A large number of hon. Members still wish to take part in the debate.
  8.33 pm
  Mr. Alan Haselhurst: Before this debate began, I nursed the fear that there was a danger that Westland might become almost incidental to the debate. Fortunately, that has not generally been the case. The hon. Member for Walsall, North (Mr. Winnick) rather fanned the flames of my suspicion once again. At the heart of this debate is the survival of Westland and that must be our first priority. We are concerned with Westland, its expertise and its skilled work force because we should have a helicopter manufacturing capability in this country.
  A long-term interest has to be faced as well. The short-term survival of Westland is not the only issue, but surely it is one of the dominant thoughts in our minds at present. As my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) reminded us, it has been a worry for some time. I do not wish to go back into the past as he chose to do, because almost a whole evening could be devoted to what happened in the past. We should address ourselves to the present situation and look at it from the point where the Government became sufficiently worried about what was happening to Westland that they galvanised themselves and decided that they were going to try to ensure that a choice was placed before the shareholders.
  1146
  It would be churlish of the House not to recognise the efforts of the Government in that respect. I hope that I am not delving into controversy if I say that the Government appeared united in their view that the shareholders should be the final determiners of what was to happen. In my mind, it follows that if the shareholders were to be placed in that situation, some of them at least might find it relevant to think about exactly what view the Government might have about the future of our helicopter capability. The shareholders might have wanted some guidance on the national interest. I do not believe that they could have been left to guess what the national interest might be and they could only look to the Government for some clue about that.
  The national interest is not an easy thing to determine. As Sir Raymond Lygo made clear in his conversation with my right hon. Friend the Secretary of State for Trade and Industry—I am reading from the authorised version—that point was discussed between them. It seems mildly surprising that the Government did not have a more positive view which looked beyond the mere immediate survival of Westland, vital though that is. It seems that there was a defence aspect as to whether or not Westland survived, and in partnership with whom it survived. There might be an aerospace aspect to the matter, bearing in mind our commitment and involvement in developing collaborative ventures in Europe with fixed-wing aeroplanes. We might have a parallel interest in helicopters.
  It is certainly inconceivable that the Government do not have a view about whether what happened to Westland would have an effect upon our aerospace dealings, because it is clear from the Civil Service accounts of my right hon. Friend's meeting with Sir Raymond Lygo that the Government are greatly concerned about what our aerospace export potential should be.
  Then there is the European aspect. I make no apology to the House for expressing my enthusiasm for collaborative deals with Europe. Where possible, this is a right and necessary priority for the United Kingdom. I do not want to say anything which will impede the rescue of Westland and I am certainly not in any sense anti-American. There is a great deal of aerospace trade traffic between the United States and Europe and that is right and proper.
  The British aerospace industry should not have just one single pattern of involvement. It is healthy for customers, be they Governments or private companies throughout the world, that there should be more than one major supplier in the aerospace business. It is healthier for the competitive environment if there can be at least two major players in the aerospace game. I hope that we can get within Europe some counterweight to the American aerospace industry. That hope falls a long way short of obsession, the term used by my hon. Friend the Member for Bosworth (Sir A. Butler).
  It is a heavy responsibility for anyone speaking in the debate to try to guess what the Westland board in this anxious time will decide to do. It is easy to point the finger of scorn at either of the deals on offer. One can make fun of what Sikorsky might wish to do in future when it has its grip tightened upon Westland. It is equally possible to make fun of Aerospatiale and say that it too is hoping that in the end there will be damage to Britain. We are trying to pursue collaborative deals in Europe in the aerospace

  1147
  business with fixed-wing aircraft, and when we are doing that it does not sit too easily to make snide remarks about our partners in those enterprises.
  The vehemence of the Westland board against the European consortium has to be taken as significant, even if at the same time it constitutes a most singular aspect of this whole affair. I am worried that there is now a tainted atmosphere which might yet have a damaging effect on Britain's overall position in future aerospace business. I hope that that is not so. At the end of the day we can only try to determine what we believe Britain's national interest to be. Each of us in this House can only make his own interpretation of that, but blending short and long-term considerations it seems to be a pity that the opportunity to try to take one closer step towards integration of the European aerospace interests has not yet been grasped. I hope that we shall not rue that day.
  8.39 pm
  Mr. Gavin Strang: The hon. Member for Saffron Walden (Mr. Haselhurst) said that at the heart of this debate was the future of Westland. Opposition Members are truly committed to the future of Westland, but at the heart of this debate is the motion and the amendment. The motion speaks about the need to secure a truthful record of what has transpired. To some extent, the debate has been inevitably dominated by the speech of the Prime Minister in attempting to answer the serious allegations made by the right hon. Member for Henley (Mr. Heseltine) in his resignation statement and also the further serious allegations made by the right hon. Gentleman.
  I wish to concentrate on the role of the Secretary of State for Trade and Industry, because he is still a member of the Government. There are two matters to which I wish to refer. The first is what he said, on behalf of the Government, to British Aerospace. When that point was raised by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the Secretary of State replied:
  "Let me make it clear that it is untrue to say that in the course of the meeting I made any suggestion that British Aerospace should withdraw from the European consortium or that its participation was contrary to the national interest."
  When I put it to him that the House was not satisfied with his reply, he said:
  "The account that I have given of the meeting is accurate. I do not think that to warn people of the consequences of pursuing matters in a particular way, which they had accepted, and of which they had had word from their subsidiary— I am not accusing a particular person, but certain things had been said involving anti-Americanism which were likely to damage their interests—is the same as expressing a preference for the deal."—[Official Report, 13 January 1986; Vol. 89, c. 782–5.]
  The Secretary of State is directly refuted by the letter which Sir Austin Pearce sent to the Prime Minister on behalf of British Aerospace. Sir Austin Pearce says that the Secretary of State said
  "that the decision should be left to the shareholders alone".
  He also said
  "that what we were doing was not in the National Interest"
  and
  "that we should withdraw".
  I trust that, even if the Opposition's motion is not carried tonight, the Government's amendment means that the Select Committee on Defence at least—that is not what the
  1148
  Opposition want—will be enabled—no pressure will be put on Conservative members of the Committee to prevent it—to secure a full and open record of what happened.
  My second point is more damning. It is that the right hon. and learned Gentleman deliberately misled the House as to whether—
  Mr. Speaker: Order. No right hon. Member, or even hon. Member, deliberately misleads the House.
  Mr. Strang: The right hon. and learned Gentleman misled the House about the letter. He knew that the Government had received a letter. If we read the Hansard report of Monday's exchanges — which is a most damning document—it is clear that he was anxious to conceal that fact. It is one thing to refuse to answer a question. We are all at liberty to do that. We can say, "I am not prepared to answer that on behalf of the Government". There may be uproar, but at least we know where we stand. One can also give a truthful answer which evades the point. But what one cannot do is deliberately—I withdraw that, Mr. Speaker—to do what he did.
  When the right hon. and learned Gentleman was asked by the former Secretary of State for Defence about the letter, the right hon. and learned Gentleman said:
  "I have not received any such letter."
  Later, when he was challenged by his hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), he said:
  "I can only speak for myself."
  He was then asked by my hon. Friend the Member for Bolsover (Mr. Skinner)
  "whether the Government had received a letter from"
  (See columns 1215 and 1241.)
  Sir Austin Pearce. The right hon. and learned Gentleman replied:
  "If it helps the hon. Gentleman, I am not aware of any letter from Sir Raymond Lygo to anyone else either."—[Official Report, 13 January 1986; Vol. 89, c. 782–6.]
  He ducked the question. If that is not deliberate evasion, I do not know what is. We can then see what he said to my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Brown). Having done that, can the right hon. and learned Gentleman then come here at 10 pm and apologise? Is that acceptable? I say that it is unacceptable.
  The right hon. and learned Gentleman perhaps did not know what was going to happen at Downing street. No one knows that. Downing street let it be known that a letter had been received, I presume, at about 3·30 pm that Monday afternoon. If that had not been done by Downing street, did the right hon. and learned Gentleman think that it might be possible to keep the matter concealed and for it not to leak from British Aerospace? Did he think that the existence of the letter would not be discovered?
  The suspicion is such that the right hon. and learned Gentleman must go. I feel no malice towards him. No one suggests that what he has done is such that his career should be damned for ever more, but if parliamentary democracy means anything, it means that right hon. Gentlemen do not give such answers when they have the type of information that we know he had. The Government must be prepared to face up to this matter. The Secretary of State has to be sacrificed to maintain a principle that is fundamental to parliamentary democracy.
  8.44 pm
  Mr. Kenneth Warren: I declare an interest as an aeronautical engineer, but I have no part

  1149
  in the present Westland negotiations. I am Chairman of the Select Committee on Trade and Industry. That Committee today decided that next Wednesday it would consider whether it was right and proper for it to examine the Westland problem.
  May I draw the attention of the House to the fact that this is a debate about Westland plc. I am worried that the turmoil and trouble at Westland has been diverted into a political issue which prejudices the working lives of many hundreds of Westland's workers, and the tens of thousands of workers in other parts of the aerospace and aero-engine industries which support that company. Westland is not up for grabs. It is not up for sale. It is trying to stay in business. Both sides of the House should try to place Westland once again in the forefront of helicopter design and manufacture, which is where it should be.
  Westland is a vital United Kingdom engineering resource. It contains a helicopter technology which is unequalled in western Europe. I am worried that in the discussions which have taken place with Her Majesty's Government no consultations appear to have taken place with those who supply Westland. For every one person working at Westland two others work in the aerospace industry supporting Westland—the Racals, the Ferrantis, the Smiths, the Lucases, the Dowtys and the GECs. None of those people has been consulted. It has been suggested that the company should go up for auction to the highest bidder.
  I am sorry that my right hon. Friend the Member for Henley (Mr. Heseltine) is not here, because I am extremely worried by the fact that the man who had some part and interest in the activities of Mr. Clive Ponting clearly breached the Official Secrets Act when he stated what were in Cabinet minutes and what had taken place in Cabinet discussions. I speak as a former chairman of the parliamentary campaign for freedom of information. It is unfair that there should be two standards of official secrets.
  Mr. Dick Douglas: As Chairman of the Select Committee, the hon. Gentleman should not be intervening in the debate.
  Mr. Warren: I wish to return to the letters—
  Mr. Douglas: I have a great respect for the hon. Gentleman. I am a member of the Select Committee on Defence. If his Committee is to undertake or consider an investigation, he is on thin ice when he intervenes in the way that he is doing. That is my considered view.
  Mr. Warren: So much for the hon. Gentleman's considered view. I am speaking as a Back Bencher. I believe that the House has freedom of speech and that it is the prerogative of hon. Members on both sides.
  I shall continue to speak about freedom of information. I am worried about the letter from the Prime Minister which has today been sent to Sir Austin Pearce, the second paragraph of which states that she understands that Sir Austin Pearce, the chairman of British Aerospace, is not prepared to release a copy of Sir Raymond Lygo's account of the proceedings. That is ridiculous. When the whole of the correspondence has been published, there can be nothing wrong in allowing Sir Raymond to publish his account of the proceedings.
  I have known Sir Raymond well for a number of years and I believe that there was a misunderstanding about what was said between him and my right hon. and learned
  1150
  Friend the Secretary of State for Trade and Industry. I recommend that those two gentlemen should get together tonight or at least tomorrow morning to try to resolve the differences in what each thinks the other said. Westland is surely more important than who is right or who is wrong in a political issue.
  The next matter about which I should like to talk is anti-Americanism. I am worried that my right hon. Friend the Member for Henley should talk about anti-Americanism, because he negotiated the SDI agreement a little while ago. British Aerospace is using United Technologies to promote its activities in the United States. Good luck to it. Let us consider the other partners in the so-called European consortium. Aerospatiale is under contract to Sikorsky for helicopter work. Messerschmitt-Bolkow-Blohm is part owned by Boeing, which is a competitor of Sikorsky, Aerospatiale and Westland. The simplicity with which people are classified as Europeans or anti-Europeans is unacceptable. Fiat is all right when it is supplying engines for the Tornado but apparently it is not all right when it is trying to help our helicopter industry. Last year, Agusta— a nationalised Italian company—tried to put up money to save Westland. Now it is no longer acceptable because it is on the European side. I am trying to be fair. The over-simplification of the issues that have been put before us has left in doubt the credibility with which my right hon. Friend the Member for Henley (Mr. Helsetine) tackled this problem. I am sorry that have to say that.
  Ten days ago I was invited by Westland to meet its directors and those of Sikorsky and Fiat. I explored with them what is meant by man-hours. I adopted a technical approach because it is not the man-hours that matter but who is the design authority: who gives design leadership in helicopter manufacture and who decides what engines and what systems should be used. The information that I obtained on both that and other occasions when this issue was discussed was that the design authority option is not available to Westland in the case of the European bid but that this option remains available to Westland if it follows the Sikorsky-Fiat route. I hope that they will choose Sikorsky as their partners.
  I have received information that there is a bid before the Ministry of Defence for a new sighting system for the Army's helicopters. British Aerospace has put in a commendable bid to update the equipment that they are currently supplying. A Swedish-American-British group called Heliton has also put in a bid. It amounts to approximately the same value, on a fixed price basis, as that which has been put up by British Aerospace—£70 million. For reasons that nobody understands, the Ministry of Defence has said that although it may be a fixed price it will make the price £100 million, thereby wiping out that bid. The only problem is that the Royal Swedish Air Board has said that it is willing to buy between 20 and 30 Westland W30 helicopters and some Sea King helicopters.
  In the cause of freedom of information, why has that information not been put before the House? Why has the House not been told the facts about defence contracts and of their value to Westland's resurgence? It is time that the attention of this House was turned to the restoration of Westland as a leading aerospace company and to the maintenance of the technology of its supporting companies. We must not waste the skills of the men and women at Westland. It is time that we looked after these people.
  8.53 pm
  Mr. Tam Dalyell: The House will acquit me of being uninterested in Westland per se. I went to Yeovil in mid-November. I was taken round the plant by unions and management. I was also a member of an ASTMS delegation that was most courteously received by the Minister for Trade on the Indian order.
  I wish to use the time available to me to return to the speech of my right hon. and learned Friend the Member for Aberavon (Mr. Morris). Since my right hon. and learned Friend made his speech a senior civil servant in the Department of Trade and Industry has been identified, according to the news on Channel 4, by the inquiry as the source of the leak of the Law Officer's letter. This is the letter that I made such a fuss about at 3·30 this afternoon.
  If the news report is true—and apparently it is—upon whose instructions was a senior civil servant at the DTI asked to leak a letter from the Law Officers? Are we to believe that an over-zealous senior civil servant took it upon himself to do this?—[HON. MEMBERS: "Why not?"] I have some experience of the Old Bailey. I know what civil servants can go through. If anybody looks at what Clive Ponting went through and how he was treated by some of the Ministers who have spoken today, any civil servant would by very careful not to leak anything without ministerial authority.
  My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) asked a key question. He said:
  "Was the correcting letter from the Law Officers to the Secretary of State for Defence seen by the right hon. and learned Gentleman or his Department before it was sent to the Ministry of Defence?"
  The Secretary of State for Trade and Industry replied:
  "I saw the letter after it was sent."—[Official Report, 13 January 1986; Vol 89, c. 783.]
  The question was whether he had been consulted, whether he had been told about the letter and whether he had been given any idea of its contents. Was the answer that was given to my right hon. Friend the whole truth?
  Mr. Merlyn Rees: That is a matter for the Secretary of State for Trade and Industry. My hon. Friend and I got involved with Mr. Ponting because our view was that he should have been dealt with not under the Official Secrets Act 1911 but by the disciplinary procedures of the Civil Service. I hope that this case will not be dealt with under the Official Secrets Act.
  Mr. Dalyell: We need to know whether the answers given to my right hon. Friends the Members for Morley and Leeds, South and for Blaenau Gwent (Mr. Foot), who went back on Monday to this exact point, are the whole truth. Having read that Law Officer's letter, I now understand how reluctant Her Majesty's Government were to place it in the Library of the House of Commons. For a careful lawyer's letter, it contains an extraordinary paragraph. The penultimate paragraph says:
  "On the basis of the information contained in the documents to which I have referred, which I emphasise are all that I have seen, the sentence in your letter to Mr. Horne does, in my opinion, contain material inaccuracies in the respects I have mentioned, and I therefore must advise you that you should write again to Mr. Horne correcting the inaccuracies."
  What are we to think? Are we to think that on that Saturday the Solicitor-General was suddenly reading The Times and, equally suddenly, without any prompting, he said, "I must write a most serious and damaging letter against one
  1152
  of my senior colleagues"? Is that how the Government work? Is it a likely scenario? I ask my right hon. and hon. Friends to consider whether this bears any relationship to reality.
  The paragraph is really saying, "If what you are reported as saying is accurate, then it seems to me that it might not be legal. Are you sure?" It seems to me that the Legal Officers were asking the Secretary of State for Defence whether what he had said was accurate.
  There is a great contrast between the full letter and what Mr. Anthony Bevins quite properly, from the point of view of a journalist, wrote in The Times. Mr. Bevins referred to the trumped-up earlier leaks with a partial text of the Solicitor-General's letter. Who was it, and for what reason, who leaked a partial text? That is the question that the Secretary of State for Trade and Industry will have to address when he winds up the debate.
  My right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) raised many questions. I wish to repeat just one of them. I refer to the notes of the meeting on 13 December. Are they as the Prime Minister would have them, or are they as the right hon. Member for Henley (Mr. Heseltine) would have them? If we are told that the notes are difficult to find, I ask my right hon. and hon. Friends whether they have gone the way of the log book of the Conqueror. Is that what has happened to them? In such a situation notes taken by civil servants are sacrosanct. Is there not some condition that notes of Ministers' contributions taken by civil servants may not record things that are against Government policy? Is that not in the guidelines?
  Mr. Merlyn Rees: I do not think that civil servants are enjoined not to make a note of things that are against Government policy.
  Mr. Dalyell: I have the permission of my right hon. and learned Friend the Member for Aberavon to repeat two of his questions that should be answered tonight. My right hon. and learned Friend the Member for Aberavon asks the Secretary of State for Trade and Industry, pursuant to his reply to the right hon. Member for Morley and Leeds, South on 13 January, whether he or anyone in his Department saw the Solicitor-General's letter in draft or material upon which the letter was based before it was sent and whether he was consulted about the contents of the letter or its sending before it was sent. My right hon. and learned Friend asks the Attorney-General whether he will refer any apparent breach of security involved in the disclosure of the contents of the recent letter from the Solicitor-General to the right hon. Member for Henley to the Director of Public Prosecutions for his consideration and advice as to whether a decision to prosecute under section 2 of the Official Secrets Act 1911 is to be taken. Those questions should be answered between 9.30 and 10 o'clock tonight.
  9 pm
  Mr. John Smith: The Prime Minister must now be wishing that she had responded to the call by the Leader of the Opposition on Monday to come to the House and make a statement on behalf of the Administration that she heads to answer the serious questions of public concern that were revealed during the recess and have doubled since Parliament reassembled.
  One of the reasons why the right hon. Lady would have been wiser to make a statement is that it would have

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  reinforced her reputation for forthrightness and boldness, which are said to be her leading characteristics. In addition, it would have had the tactical advantage that the Secretary of State for Trade and Industry would not have had to respond on Monday on behalf of the Government. That is where the really damaging series of events start from. When the Leader of the Opposition put the case for an inquiry he reminded us of the considerable history of the matter. The right hon. Member for Henley (Mr. Heseltine) also reminded us of that in his capable account of the way in which the Cabinet and Ministers addressed themselves to those issues.
  There are two clear periods in this event. There is the warring period, when the Secretaries of State fought each other not just in the Cabinet Committees but in the columns of the press to the extent, as Sir Austin Pearce pointed out, that Sir Raymond Lygo was told by one Secretary of State what the national interest was and was given an opposite explanation of the nation's interest by another Secretary of State.
  Since the resignation of the right hon. Member for Henley, there has been a period of post-resignation depth charges. Those depth charges let loose underneath the ship of Government have shaken the whole fabric to its foundations. It has been a most revealing time because it is not often that the veil of Government is parted and we are privileged to see what happens behind that curtain. It has long been the suspicion, well beyond the view of the Opposition, that many funny things happen behind the curtains that conceal the inner activities of the Thatcher Government from the nation. That suspicion has been amply justified.
  There is a wider concern than the affairs of Westland, although we must be careful not to forget that that is at the heart of the debate.
  Mr. Peter Thurnham rose—
  Mr. Smith: There is concern about the way in which the Government have sought to manipulate some aspects of the matter. We know what the previous Secretary of State for Defence has had to put up with. We know how he has been cut down from behind, that he has had to face stories and gossip, and we know the way in which he has been prevented from putting his case. He mentioned a matter today which is of serious public concern, although it is not directly related to the details of the Westland story. He referred to a telephone call made from 10 Downing street to the BBC about a programme in which he was involved.
  My next comment is a responsible one and I should like the Secretary of State for Trade and Industry to give a specific answer to it in his reply. I also hope that the Prime Minister will feel obliged to reply to it.
  On Sunday 5 January the radio programme "The World this Weekend" set out to cover these matters. In the morning of Sunday 5 January the Secretary of State for Trade and Industry recorded an interview for "The World this Weekend". Later in that morning a telephone call was made from No. 10 Downing street to the producers of the BBC programme informing them that No. 10 was withdrawing permission for the interview to be used. The BBC informed No. 10, greatly to its credit, that it would not co-operate in such—I will start again for the benefit of the Prime Minister who has just arrived because it is important that she hears what I have to say.
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  On Sunday 5 January, the Secretary of State for Trade and Industry recorded an interview. Later that morning No. 10 called the BBC withdrawing the so-called permission for the interview to be used. The BBC refused to co-operate, but offered the Secretary of State for Trade and Industry a chance to do the interview all over again—one might think an act of considerable generosity in the circumstances.
  Meanwhile, down in Oxford, the former Secretary of State for Defence had left his garden for long enough to go into the local studio of the BBC in Oxford, no doubt fitting it carefully in between pre-arranged photocalls with half the world's press who went to visit his garden. Sitting in the studio in Oxford, the Secretary of State for Defence was ready to take part live in that very edition of "The World this Weekend".
  I am informed that while the former Secretary of State for Defence was in the studio waiting to start the interview, another telephone call came from No. 10 to the BBC saying that he had no permission to give any interview. I suppose that the very best that can be said about that is that it is even-handed in some respects—both are to be gagged. Neither Secretary of State can be trusted to appear on the same programme.
  However, that is not all about manipulation. It is fortunate that the Secretary of State for Foreign and Commonwealth Affairs has arrived in the Chamber because he may be able to tell us whether it was on his instructions or those of the Prime Minister that the British ambassador in Rome was asked to go to the Italian Government and tell them to stop sending any telegrams to the Secretary of State for Defence for the United Kingdom. If that is true, and there has been no denial of it—the Secretary of State for Trade and Industry is not directly responsible for the Foreign Office but he is replying to the debate on behalf of the Government—we need to know why.
  What a curious Government when a British ambassador is sent to tell a foreign Government not to communicate with a member of that very Government. What kind of impression do we create upon our allies? It is bad enough when they do not know which Secretary of State to communicate with because they both have different conceptions of the national interest, but how much worse when our foreign and diplomatic service is used for purposes of personal manipulation by the Prime Minister against her own Government.
  Then there is the affair of the Solicitor-General's letter. Those of us who have had the opportunity in the past hour or two of reading that letter will wonder why it was sent at all. A more cavilling document it is hard to find. But, as my hon. Friend the Member for Linlithgow (Mr. Dalyell) and my right hon. and learned Friend the Member for Aberavon (Mr. Morris) said, one of the crucial questions here is how the Solicitor-General came to write the letter in the first place. He starts off:
  "Dear Michael, I saw in the 'The Times' on Saturday the text of a letter you are reported to have sent to the Managing Director of Lloyd's Merchant Bank."
  I suppose that there are a number of explanations. He could have been sitting down on Saturday and picked up The Times and said, "Oh my goodness"—remembering all the telegrams that were passing and are all detailed here—"I had better write to my old friend Michael and tell him that he has got things slightly wrong." That would be a very innocent view of the whole matter. As my right hon.

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  and learned Friend the Member for Aberavon said, Law Officers usually do not disturb themselves to write letters to anybody unless there is a special inducement or instruction to do so. It has crossed some of our minds that someone in the Government spoke to the Solicitor-General—
  Mr. Brittan indicated assent.—
  Mr. Smith: Now we know the answer to that point. One mystery has been resolved after only 11 minutes of my speech—the Secretary of State put the Solicitor-General up to it. I quite accept that the Secretary of State might want to consult a Law Officer during these matters. The point is: who asked the Solicitor-General to send that letter to the Secretary of State for Defence? No doubt the Secretary of State for Trade and Industry will tell us precisely what his role was in that matter and how the letter came to be written.
  Another matter is the leak of that letter. While the first matter is important, the second is sinister. If it is the case that one Department of this Government deliberately organised a leak to frustrate a Minister in the same Government, that is not only dirty tricks but a habit that is inimical to the practice of good government in this country. An investigation was called for by Opposition Members as soon as the information was revealed, and I understand that that has now taken place.
  The rumour is—and I do not know whether it is true—that an official in the Department of Trade and Industry has been identified as the culprit. I hope that the Secretary of State will tell us whether it was on the instruction of any senior official or Minister in his Department that that leak took place. Secondly, if it is true that the leak came from an official in the Department of Trade and Industry, has he or will he recommend to the Law Officers that that person be prosecuted, as has happened previously?
  I move directly to some of the more central events of the drama. We have watched, almost as astonished bystanders, as the former Secretary of State for Defence, beginning with his very careful resignation statement, revealed each chapter of this affair. He has spoken in a way that no one has been able to speak for years because he has been at the heart of the Thatcher Government for six and a half years. He speaks as a witness of knowledge and credit because he was entrusted with very high responsibility in a number of different offices of state.
  To some extent, Opposition Members have had to watch the drama because we have not been possessors of information. In our system of government, information is uniquely locked within the people who run the Administration at the time. It is only accidentally and by a series of curious events that the veil has been parted.
  Those charges will have to be answered by the Secretary of State for Trade and Industry on behalf of the Government. I propose to say little or no more about them other than that the Prime Minister—who must have known what the charges were, although she spoke before the former Secretary of State for Defence—chose to ignore them. The Prime Minister's hope is that this will all go away and that she can turn her back on this affair and get on to something else. I have to tell the Prime Minister that it will not go away. The tactic of refusing to make a statement on Monday led to a full-scale debate on
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  Wednesday. The failure to give answers on Wednesday means that the debate will continue in the House and throughout the country.
  I want to discuss the Secretary of State for Trade and Industry's involvement. It is fair that before he replies he knows what the Opposition expect him to answer. I begin with one of the minor matters but on which the former Secretary of State for Defence laid importance. Why does he not agree to publish the documents of 4 and 18 October which, it is said, show that he had a strong preference for the European solution? If he is prohibited from publishing by instruction from the Prime Minister, will he tell us whether it is true that the former Secretary of State is correct in saying that he supported the pro-European solution?
  The most important question that the Secretary of State for Trade and Industry must answer is about the so-called British Aerospace affair—the meeting in his Department the day before the Secretary of State for Defence resigned. The right hon. Gentleman knows—he must have known since Monday—the importance of that letter. Looking back, most of us did not realise how truly significant it was. It figures in our deliberations as a result of a question by the former Secretary of State for Defence. I have thought ever since then that if the former Secretary of State for Defence had not asked that question we should still be in ignorance about the existence and content of that letter.
  The important question, as the Secretary of State for Trade and Industry knows, is about what transpired at that meeting in two important respects. The Secretary of State was asked on Monday about what he said to Sir Raymond Lygo. The Secretary of State said that there was no truth in the suggestion that he said that British Aerospace was acting against the national interest or that it should withdraw from the European consortium.
  There are two pieces of evidence before us. The Prime Minister has chosen to reveal the departmental minute and we have a letter from Sir Austin Pearce. The information is not yet complete because Sir Austin Pearce in his letter says that a full transcript of Sir Raymond's account of proceedings is available. I understand that that was attached to the letter to the Prime Minister. The Secretary of State for Trade and Industry must have read it.
  The line is that Sir Austin Pearce objects to that being published. I regret that but I understand that the Government have no objection to it being published because otherwise it would be foolish to refer to it in that way. The sooner that we have the full text of that memorandum the better, in the interests of the Secretary of State for Trade and Industry and of everyone else. It should be published at an early date.
  The Secretary of State relies upon the minute to bolster his account of the meeting. The minute is called the official record. In fact, it is the note taken by the Secretary of State's private secretary, to be sent to the private secretary of the Minister of State responsible for the aerospace industry. The deficiencies in the document are serious. First, the minutes are not meant to be a verbatim account of what happens at a meeting. They are meant to be an official record for future action.
  Mr. Alfred Dubs: Many years ago I was in the Civil Service. I remember being told that notes taken at meetings were to be a creative process. It would be most

  1157
  unusual, if not unheard of, for a civil servant making a note of a meeting to put into his Minister's mouth words which were at variance with the Minister's stated policy.
  Mr. Smith: I wondered what instructions had been given to civil servants when I was a Minister. I am sure that my hon. Friend the Member for Battersea (Mr. Dubs) is right and I take account of his experience.
  The important point is that the record was not meant to be verbatim. However, the most important difficulty about relying on the record arises from the sequence of events. The controversial meeting took place at 5 o'clock on Thursday 8 January in the office of the Secretary of State for Trade and Industry. The allegation that the Secretary of State said that British Aerospace was acting against the national interest and that it should withdraw from the consortium was contained in the resignation statement on
  9 January of the former Secretary of State for Defence, the right hon. Member for Henley. The so-called minute is dated 10 January. It was prepared long after the controversiality of the conversation was known and when the sensitivity of the conversation was well understood.
  The letter from Sir Austin Pearce is most important. It is highly relevant and it is fortunate that it has become available. I shall mention some matters that are slightly at the margin, but just as important. Sir Austin Pearce's letter states:
  "The meeting took place immediately following a discussion Sir Raymond was having with Mr. Pattie on Airbus Industrie's proposals for a new programme."
  The Secretary of State for Trade and Industry said that it would have been "wholly artificial" if he did not see Sir Raymond Lygo, but apparently a message was sent to the meeting that the Secretary of State wished to see him and the Minister of State took Sir Raymond to the Secretary of State's presence.
  One aspect that Sir Austin Pearce is worried about is the connection with the Airbus proposals. He states:
  "The connection is worrying to say the least."
  The chairman of British Aerospace is worried that a connection is being made between Airbus—the future of his company—and the Westland affair. That must cause the Prime Minister deep concern. That is not a matter of credibility, but a matter about the way in which the Government behave and project themselves.
  In his letter, Sir Austin Pearce states that,
  "Sir Raymond returned directly,"
  after the meeting with the Secretary of State,
  "to a special Board meeting of British Aerospace which was in progress and made a full report of his conversation to the Board. He also wrote down all the salient points that had been made to him. His report stated that the following points were specifically covered by the Secretary of State."
  I shall refer to some of the points. He said that the Secretary of State

  "1. expressed a view that as the DTI were our sponsoring Dept we should have consulted with his Dept before we entered the Consortium.

  2. … whether we had fully considered the effect our actions might have on our American business.

  3. his concern at the Consortium leadership role we appeared to be adopting."

  The following point is fair to the Secretary of State:
  "4. that the decision should be left to the shareholders alone".
  Sir Raymond Lygo makes that claim also. The report continues:
  "5. That the agreement of the National Armaments Directors had never been endorsed by Government."
  The Secretary of State was correct on that point, as history has shown.
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  "6. that what we were doing was not in the National Interest.
  7. that we should withdraw."
  That matter could hardly be more clear from the testimony of Sir Raymond Lygo. The Secretary of State muttered that it is not true. If it is not true, what is the Secretary of State's position on Sir Raymond Lygo? He must tell us in his reply. Is he telling us that Sir Raymond Lygo invented the conversation or that he had a brainstorm? Is he telling us that Sir Raymond repeated the conversation in front of the board of British Aerospace and wrote it down at the time because his brains had deserted him suddenly and his imagination had taken over? We know perfectly well that neither Sir Raymond Lygo nor Sir Austin Pearce had the faintest idea that this would be a matter of public argument or that it would figure in debates on the Floor of the House.
  If there is any doubt about Sir Raymond Lygo, let me draw attention to the fourth paragraph on page 3 of the letter to the Prime Minister, where Sir Austin Pearce says:
  "I have no doubt that Sir Raymond's account of the events so fresh in his memory and recounted to the Board so soon after the event with the assistance of notes made immediately after that meeting was substantially correct and"—
  this is significant
  "are borne out by much other information that is coming to light. So far we have refused to make any public comment."
  That speaks volumes.
  I should tell the Secretary of State for Trade and Industry that if anyone would benefit from a committee of inquiry into the matter it is him, because if he is telling the truth, he has nothing to fear from an inquiry that would consider the matter fully and at which he would be given a full opportunity to exonerate himself. He must decide what to do. I make no calls for action by him before an inquiry is constituted, because I do not wish to prejudice the outcome of an inquiry. The Secretary of State should submit himself to the verdict of that inquiry.
  The debate is not simply about the political fate of one Secretary of State for Defence or the political future of a Secretary of State for Trade and Industry, let alone a Prime Minister. It is not simply about the contents of this letter, although circumstances force us to consider it carefully. It is not just about the relationship between Government and private industry, although that gives some cause for concern. It is not just about the ultimate destination of the control and ownership of one of Britain's important defence contractors, important though that is. The importance of this debate is that the Westland affair provides us with the clearest possible, most graphically illustrated, most thoroughly documented demonstration of how the Government have sacrificed, and continue to sacrifice, public interest to their ideological obsession with market forces.
  In addition, when the Government know that their obsession with market forces collides with the public interest and would be revealed, they engage in a course of deception to keep it concealed from the public eye. That is why, throughout the affair, the Government have shown a public face of even-handedness and of leaving it to the shareholders and the market to decide, but, as each step in the process has revealed, all the while, Ministers—especially the Prime Minister and the Secretary of State for Trade and Industry—have been working to achieve one solution. They have worked to obstruct one solution being put and have promoted another, but they knew that they could not be caught doing that, so they kept up the facade that they were even-handed.

  1159
  That is what has led them into this difficulty. That is what puts Ministers into the awkward position of having to decide between observing confidentiality and giving honest answers to the House of Commons. That is why we have had so many meetings of the Cabinet and the Government. Although Governments have many controversial and difficult things to do, the open and clear course is to call a meeting of the Cabinet, allow the two protagonists to put their cases, reach a decision, say that that is Government policy and get on with it. But that has not happened yet. There have been selective meetings of Ministers and manipulation of Cabinet minutes. No. 10 Downing street has practised a course of deception on one of the principal members of the Government. The former Secretary of State for Defence has many genuine complaints about the way in which he was personally treated by the head of the Government.
  However, the Government are obsessed with market forces, even when £750 million worth of Ministry of Defence work has gone to that company during the years, and only recently another £40 million was committed. The cost of the public sector orders far exceeds the past or future value of the company. Its share capital is insignificant compared with the size of the public sector orders that are given. Therefore, it is a legitimate matter of public concern and should, from the beginning, have engaged the full attention of Government from the top down. Cases should have been argued—no doubt passionately and carefully—in the national interest and, decisions having been taken, they should have been implemented openly and fearlessly. The opposite has happened and this discreditable Government with their discreditable Prime Minister and discreditable Ministers have finally been found out.
  9.30 pm
  The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Leon Brittan): I would like to start by referring once again to the statement that I made on Monday in which I sought to apologise to the House for any misleading impression that I may have given in my statement that afternoon. From some of the comments made during the course of today's debate, it has been suggested that I view the charge of misleading the House as being something less than of the utmost gravity. I assure the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) that that is most certainly not the case. I welcome the opportunity of reiterating the apology I made on Monday.
  Since Monday, permission has been given for the letter from Sir Austin Pearce to be published. That account of the meeting which took place between myself and Sir Raymond Lygo is, of course, substantially different from that given by the minutes taken by my officials and confirmed by my recollection and the recollection of others.
  Although a close scrutiny of the document will show that there is great similarity in the accounts, there are material points which are different. [Interruption.] On the two material points in Sir Austin Pearce's letter to which exception has been taken, points 6 and 7 — the suggestion that I told Sir Raymond Lygo that what British Aerospace was doing was not in the national interest and
  1160
  the suggestion that British Aerospace should withdraw from the consortium—I made it quite clear to the House on Monday that I said no such thing.
  Ms. Clare Short: Will the right hon. and learned Gentleman give way?
  Mr. Brittan: No, I shall not give way. A number of accusations have been made against me and I think that the House would wish me to have the opportunity to reply.
  I said no such thing at that meeting and I have made that absolutely clear. Since Monday's debate, I have looked at the records supplied by Sir Austin Pearce and I repeat once again that at no time during that meeting did I say that what British Aerospace was doing was not in the national interest. Nor did I say that British Aerospace should withdraw from the European consortium. I would be perfectly happy to give an account of that meeting to a Select Committee of the House and I have no objections to doing that.
  I would tell those hon. Members who would challenge my account of that meeting that fortunately I was not alone at the meeting. There were six people present in that room. Apart from myself, there were three civil servants, including my private secretary. Of course, Sir Raymond Lygo was present, as was my hon. Friend the Minister of State. It is useless for the right hon. and learned Member for Monklands, East (Mr. Smith) to say, in his attempt to deal with these matters, that the practice of the Civil Service is not to record the whole of what we say. We all know perfectly well that that is the practice. Quite apart from what was said in the note which corroborates my account to the House on Monday of what I said, all persons present at that meeting other than Sir Raymond Lygo—that is to say, three senior civil servants who have served Governments of different political persuasions, my hon. Friend the Minister of State and myself — have all confirmed our recollection as well as the note. I repeat that at no stage did I say that what British Aerospace was doing was not in the national interest. Nor did I say that British Aerospace should withdraw from the consortium.
  Mr. Winnick: Will the Minister give way?
  Mr. Brittan: No, I will give way as often as the right hon. and learned Member for Monklands, East gave way. It is I who am under attack, and I am entitled to defend myself.
  Anyone who challenges what I have given as an accurate account of what occurred on that occasion and suggests that I am telling a lie, not to put too fine a point on it, is saying the same about not one but five people, including three distinguished public servants.
  With regard to the conflict of recollection, on the matter of the national interest I can understand how Sir Raymond Lygo could have misunderstood what I said. The record of the meeting, which accords with the recollection of all those present other than Sir Raymond Lygo, shows that I said that I believed that it was not in the national interest that the uncertainty about Westland should carry on much longer. I should have thought that that view would commend itself to the House.
  If we are talking about probabilities—I do not rest my case on probabilities because I was there and I know what I said, as the right hon. and learned Member for Monklands, East well knows — it would have been absurd for me to say that the participation of British

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  Aerospace was against the national interest and even more absurd for me to say it at that meeting. Sir Austin Pearce correctly recalls that I had a meeting with him on 13 December — a day on which, to put it mildly, the controversy was running pretty hotly because by then the Government's endorsement of the national armaments director's recommendation was due to expire unless an offer was received from the European consortium which was acceptable to the Westland board. Had I believed that the participation of British Aerospace was against the national interest, I had ample opportunity to say so on that occasion. I did not say it then and I did not say it on 8 January. I very much regret that Sir Raymond Lygo had a different understanding, although I note that he is not prepared to have his own account made public. I have no objection to saying to a Select Committee what I have said to the House. Similarly, I have no objection to Sir Raymond Lygo disclosing whatever record he took at the time.
  Mr. Dykes: Will my right hon. and learned Friend give way?
  Mr. Brittan: I would rather not give way, as I wish to deal with some of the more general matters that have been raised, particularly some of the serious questions about industrial, commercial, economic and European policy.
  The Prime Minister has already set out in her speech the policy of the Government and the reasons behind that policy. On occasions such as this, it is natural for opinion between parties and within parties to polarise, and to polarise in opposite directions. The matter is presented as a controversy between a European solution to problems and a transatlantic solution to problems. There is a tendency to polarise the issue as a belief either in an interventionist policy in industry or a hands-off policy in industry. I do not see the issue in such a simple way.
  With regard to the contrast between the European and transatlantic solution to problems, I recognise that there is a great deal to be said for an independent European source of industrial activity not only in defence but in other areas. It does not follow, however, that its advantage is supreme in every case. It is a gross over-simplification of a serious issue to pretend to present such a clear-cut choice. With regard to the aircraft industry, and especially fighter aircraft, there is a powerful case for European co-operation. I am happy to pay tribute to my right hon. Friend the former Secretary of State for Defence for the work that he did in helping to bring that about. I part company with my right hon. Friend, as I suspect others will, because, although it is right to have European co-operation on fighter aircraft, it does not necessarily follow that that must be the only solution at which the Government should arrive with regard to helicopters.
  There are of course advantages in European co-operation even in the case of helicopters. I am not denigrating that solution. There are disadvantages, however, and one is entitled to draw attention to them—disadvantages from the point of view of competition policy, value for money and choice. One of the more unconvincing passages of my right hon. Friend's speech was where he tried to say that in the European defence arrangements it was still possible—even when there was only one source of defence procurement—to prevent monopolistic pressures and the country paying more than necessary for its defence.
  Dr. Hampson rose—
  Mr. Brittan: There are advantages and disadvantages in European co-operation over helicopters. It is unrealistic to present, as some uninformed people have done, a caricature of the choice facing a British company which has fallen on hard times as between a European or American solution. It is unrealistic and an over-simplification, because reference has been made by those hon. Gentlemen who have constituency or other personal connections with Westland, such as the hon. Member for Yeovil (Mr. Ashdown) and my hon. Friend the Member for Dorset, West (Mr. Spicer), to the fact that Westland has had, for 38 years, the closest possible connection with Sikorsky. Sikorsky is not a newcomer to Westland. In the successful days of Westland, that success was achieved by building planes initially designed in the United States—such as the Sea King and the Wessex — and then developing them with their expertise for other and specialist markets.
  That is the experience of Westland. It is not conclusive—it does not follow from that or from the fact that the work force virtually unanimously favours one solution—[Interruption.] It does not follow that that is the solution or the only solution, but it follows from the account that I have given of the advantages and disadvantages of the European route and of the American route that it is entirely reasonable for the central policy of the Government to be to leave the choice to the company through its shareholders.
  Mr. Mark Fisher: Will the right hon. and learned Gentleman give way?
  Mr. Brittan: No.
  That will always be the right policy. When it comes to Government intervention, I am not taking an absolutist stance. I am not taking a stance that there are no circumstances in which it would be right for Government to have a policy or a view about which route was the preferred one. Nor am I saying that there are no circumstances in which it would be right for the Government to intervene financially as well as by expressing a preference.
  My view in these matters is that it is perfectly legitimate for a Government to sponsor and assist British industry in certain cases by, for example, giving launch aid of some £250 million for the Airbus, the protection of which launch aid was a perfectly legitimate reason for me to warn Sir Raymond Lygo—[HON. MEMBERS: "Warn?"]—not against being a member of a consortium but of the danger presented to the consortium by talking about the issue in a way which stimulated protectionist attitudes in the United States.
  Let me remind the House—
  Mr. Dykes: Will my right hon. and learned Friend give way?
  Mr. Brittan: No, I shall not give way.
  Mr. Dykes rose—
  Mr. Speaker: Order. The hon. Gentleman has seen that the Secretary of State is not giving way.
  Mr. Brittan: I remind the House that, on this important point, the record of the meeting which, as I understand it, the right hon. and learned Member for Monklands, East

  1163
  was at least good enough not to dispute as being inaccurate but rather challenged as being incomplete makes it quite clear that Sir Raymond Lygo understood—
  Mr. John Smith: I did not say that.
  Mr. Brittan: Sir Raymond Lygo—
  Mr. Smith: Can I make this clear?
  Mr. Brittan: Yes, certainly.
  Mr. Smith: The Secretary of State's recollection is incomplete. I made no such distinction. I drew attention to considerable differences between the two documents. I said that there were deficiencies in it because it was done after the issue became controversial. I am not to be taken as assenting to the proposition that the Secretary of State has pronounced.
  Mr. Brittan: The right hon. and learned Gentleman is perfectly well aware that, although indeed the minute was written up on 10 January, the notes from which it was taken were made—
  Mr. Fisher rose—
  Mr. Straw rose—
  Mr. Brittan: I shall not give way. The notes from which it was taken were made contemporaneously and accord fully with the minute of the meeting. The right hon. and learned Gentleman may not find it comfortable to be reminded—
  Mr. Dykes: Will my right hon. and learned Friend give way?
  Mr. Brittan: No.
  Mr. Dykes rose —
  Mr. Speaker: Order. The hon. Gentleman has been here long enough to know that if the Secretary of State does not give way he must sit down.
  Mr. Brittan: The right hon. and learned Gentleman may find it uncomfortable to be reminded of the point, but it is indeed the case that Sir Raymond returned to the question of anti-American sentiment.
  In case anyone thinks that that is a pretext or excuse, let me remind hon. Members of what Sir Raymond Lygo himself said about it. He said that British Aerospace Incorporated, the United States subsidiary of British Aerospace, had expressed great concern about its United States business being harmed. So that was not a fantasy in my mind but a subject of serious concern. The right hon. and learned Gentleman might also like to know that the record of the meeting showed that I responded by saying that I was ready in that case to act immediately in defending British Aerospace's interest.
  Those who regard as unreal the prospect of America taking action against British Aerospace should know that it is only within a very recent period that I had to write to the United States trade representative, Mr. Clayton Yeutter, about that very matter. The position of the United States Government is that they do not like the success of the Airbus. [Interruption.] These are serious matters and they are highly material to what was said and done in relation to Westland. The United States Government do not like the fact that the Airbus is doing increasingly well.
  1164
  It is not just that they do not like it; they are actually threatening to take action against it. That action is on the basis of protectionism in the United States. What they say is that the support that we are giving to the Airbus in Europe entitles them to take protectionist action against it.
  Mr. Stuart Bell rose—
  Mr. Brittan: I am not giving way.
  It is to that sort of pressure that one is responding. The anxieties that Sir Raymond Lygo and I share are very real. It is for that reason that I say that we were not as a Government, and I was not as an individual, taking any kind of absolutist position either in relation to Britain and Europe or Britain and America, nor were we taking any absolutist position with regard to intervention in industry.
  Mr. D. N. Campbell-Savours: Tell us about Rome and the ambassador.
  Mr. Brittan: My right hon. Friend the former Secretary of State for Defence suggested that on 4 October I indicated that I had a preference for a European solution. Why that should be regarded in the eyes of my right hon. Friend as such a devilish thing to have escapes me, but it so happens that that is not the case. On 4 October I stated that the prospect of a European solution being developed within the time scale did not seem to be good, but I wanted to get a better assessment of those prospects before responding to Westland's proposals for Government underwriting of W30 sales. At that stage the proposition being put forward by Westland in concert with Sikorsky was that, if the reconstruction went through, the Government should underwrite W30 sales. So I recommended that Westland should be encouraged to pursue discussions urgently with European partners. However, I did not express a preference on that occasion for any particular solution that might be developed by Westland. [Interruption.] I believe that I am entitled to deal with the matters which were raised by my right hon. Friend the Member for Henley. I shall not have the agenda for my defence dictated by Opposition Members.
  Mr. Fisher rose—
  Mr. Brittan: I shall not accept interventions.
  Mr. Fisher rose—
  Mr. Brittan: The hon. Gentleman cannot seek to intervene all the time on the one hand and expect me to deal with all the matters which have been raised on the other. [HON. MEMBERS: "Give way."] Are Opposition Members being honest in saying that they want to hear my answers or do they want merely to shout me down? The other matter—[Interruption.]
  Mr. Speaker: Order. The debate has proceeded in good order so far. Other right hon. and hon. Members have been given a fair and quiet hearing and the House should afford that also to the Secretary of State.
  Mr. Brittan: Opposition Members are muttering from a sedentary position that I am not answering the debate. I am answering a point which was made by my right hon. Friend the Member for Henley, the ex-Secretary of State for Defence.
  Mr. Fisher rose—
  Mr. Ted Leadbitter: On a point of order, Mr. Speaker. As I understand it, when Ministers reply,

  1165
  they are presumed, as Front Bench spokesmen, to take up the issues which have been raised during the debate. I ask you, Mr. Speaker, whether there is any procedural manner in which you can ask the Secretary of State to respond to the charges made by the right hon. Member for Henley (Mr. Heseltine).
  Mr. Speaker: I think that that is exactly what the Secretary of State is doing.
  Mr. Brittan: For the convenience of the House, I shall explain what matters I am proposing to deal with in the time left available to me. They are exactly the ones that I had in mind to respond to if I was allowed to proceed uninterrupted. I was going to deal with the meeting of 17 October, with the Foreign Office telegram and with the Law Officer's letter.
  I shall deal first with the meeting of 17 October, to which my right hon. Friend the ex-Secretary of State for Defence has drawn attention. At that meeting, Sir John Cuckney referred to what he described as the Government's preference for a European minority shareholder in Westland. I said that a European minority shareholder was in both the commercial and political interests of the Government. However, that was against the background that in the board's view at that time a reconstruction involving Sikorsky seemed likely to require an element of Government underwriting. I therefore urged Sir John, as I had done previously, to explore thoroughly the possibility of a European minority shareholder. What I did not do, and have never done, was to suggest that the Government would make any attempt to influence the eventual decisions of the board or the company's shareholders. I remind the House that at that time Fiat had not joined Sikorsky.
  Mr. Heseltine: I think that I heard my right hon. and learned Friend say for the first time that at the meeting of 17 October he indicated that a European minority shareholding was in the commercial and industrial interests of Westland. That, I think, is a preference.
  Mr. Brittan: What I said was perfectly simple and straightforward. I said that a European minority shareholder was in both the commercial and political interests of the Government—I shall move on quickly because I know that the House wants to hear about other matters. I said that in the context of a Sikorsky bid, which at that stage seemed likely to require an element of Government underwriting. A European minority shareholder emerged later, and that was Fiat.
  When my right hon. Friend the Member for Henley wrote to Lloyds bank on 3 January, the House will recall that he wrote in answer to Mr. Horne, who had written to him that day. The Westland directors noticed that the terms of his letter were in certain respects different from the terms used in the Prime Minister's letter, and raised the matter with the DTI as the sponsoring Department, and there has been no doubt about that. I, in turn, consulted the Law Officer, as I said in an intervention earlier in the debate, who had not been sent a copy of my right hon. Friend's letter of 3 January. The Law Officer subsequently wrote the letter which has been the subject of controversy. I did not see it before it was written and I did not ask him in any way to write the letter to my right hon. Friend the then Secretary of State.
  Finally, let me deal with the other matter that has been raised.
  Mr. Derek Foster rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question accordingly put, That the original words stand part of the Question:—
  The House divided: Ayes 217, Noes 370.

  Division No. 37

  10 pm

  AYES

  Abse, Leo

  Evans, John (St. Helens N)

  Adams, Allen (Paisley N)

  Ewing, Harry

  Alton, David

  Fatchett, Derek

  Anderson, Donald

  Faulds, Andrew

  Archer, Rt Hon Peter

  Field, Frank (Birkenhead)

  Ashdown, Paddy

  Fields, T. (L'pool Broad Gn)

  Ashley, Rt Hon Jack

  Flannery, Martin

  Ashton, Joe

  Foot, Rt Hon Michael

  Atkinson, N. (Tottenham)

  Forrester, John

  Bagier, Gordon A. T.

  Foster, Derek

  Banks, Tony (Newham NW)

  Foulkes, George

  Barnett, Guy

  Fraser, J. (Norwood)

  Barron, Kevin

  Freeson, Rt Hon Reginald

  Beith, A. J.

  Freud, Clement

  Bell, Stuart

  Garrett, W. E.

  Benn, Rt Hon Tony

  George, Bruce

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

  Gilbert, Rt Hon Dr John

  Bermingham, Gerald

  Godman, Dr Norman

  Bidwell, Sydney

  Golding, John

  Blair, Anthony

  Gould, Bryan

  Boyes, Roland

  Gourlay, Harry

  Bray, Dr Jeremy

  Hamilton, James (M'well N)

  Brown, Gordon (D'f'mline E)

  Hamilton, W. W. (Fife Central)

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

  Hancock, Mr. Michael

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

  Hardy, Peter

  Brown, Ron (E'burgh, Leith)

  Harman, Ms Harriet

  Bruce, Malcolm

  Harrison, Rt Hon Walter

  Buchan, Norman

  Hart, Rt Hon Dame Judith

  Caborn, Richard

  Hattersley, Rt Hon Roy

  Callaghan, Rt Hon J.

  Haynes, Frank

  Callaghan, Jim (Heyw'd & M)

  Healey, Rt Hon Denis

  Campbell-Savours, Dale

  Heffer, Eric S.

  Canavan, Dennis

  Hogg, N. (C'nauld & Kilsyth)

  Carlile, Alexander (Montg'y)

  Holland, Stuart (Vauxhall)

  Cartwright, John

  Home Robertson, John

  Clark, Dr David (S Shields)

  Howell, Rt Hon D. (S'heath)

  Clarke, Thomas

  Hoyle, Douglas

  Clay, Robert

  Hughes, Robert (Aberdeen N)

  Clelland, David Gordon

  Hughes, Roy (Newport East)

  Clwyd, Mrs Ann

  Hughes, Sean (Knowsley S)

  Cocks, Rt Hon M. (Bristol S.)

  Hughes, Simon (Southwark)

  Cohen, Harry

  Janner, Hon Greville

  Coleman, Donald

  Jenkins, Rt Hon Roy (Hillh'd)

  Concannon, Rt Hon J. D.

  John, Brynmor

  Conlan, Bernard

  Johnston, Sir Russell

  Cook, Frank (Stockton North)

  Jones, Barry (Alyn & Deeside)

  Cook, Robin F. (Livingston)

  Kaufman, Rt Hon Gerald

  Corbett, Robin

  Kennedy, Charles

  Cox, Thomas (Tooting)

  Kilroy-Silk, Robert

  Craigen, J. M.

  Kinnock, Rt Hon Neil

  Crowther, Stan

  Kirkwood, Archy

  Cunliffe, Lawrence

  Lambie, David

  Cunningham, Dr John

  Lamond, James

  Dalyell, Tam

  Leadbitter, Ted

  Davies, Rt Hon Denzil (L'lli)

  Leighton, Ronald

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

  Lewis, Ron (Carlisle)

  Deakins, Eric

  Lewis, Terence (Worsley)

  Dewar, Donald

  Litherland, Robert

  Dixon, Donald

  Livsey, Richard

  Dobson, Frank

  Lloyd, Tony (Stretford)

  Dormand, Jack

  Lofthouse, Geoffrey

  Douglas, Dick

  Loyden, Edward

  Dubs, Alfred

  McCartney, Hugh

  Dunwoody, Hon Mrs G.

  McDonald, Dr Oonagh

  Eadie, Alex

  McGuire, Michael

  Eastham, Ken

  McKay, Allen (Penistone)

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

  MacKenzie, Rt Hon Gregor

  Ellis, Raymond

  Maclennan, Robert

  1167

  McNamara, Kevin

  Ross, Stephen (Isle of Wight)

  McTaggart, Robert

  Rowlands, Ted

  McWilliam, John

  Ryman, John

  Madden, Max

  Sedgemore, Brian

  Marek, Dr John

  Sheerman, Barry

  Marshall, David (Shettleston)

  Sheldon, Rt Hon R.

  Martin, Michael

  Shore, Rt Hon Peter

  Mason, Rt Hon Roy

  Short, Ms Clare (Ladywood)

  Maxton, John

  Silkin, Rt Hon J.

  Maynard, Miss Joan

  Skinner, Dennis

  Meacher, Michael

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

  Meadowcroft, Michael

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

  Michie, William

  Snape, Peter

  Mikardo, Ian

  Soley, Clive

  Millan, Rt Hon Bruce

  Spearing, Nigel

  Miller, Dr M. S. (E Kilbride)

  Steel, Rt Hon David

  Mitchell, Austin (G't Grimsby)

  Stewart, Rt Hon D. (W Isles)

  Morris, Rt Hon A. (W'shawe)

  Stott, Roger

  Morris, Rt Hon J. (Aberavon)

  Strang, Gavin

  Nellist, David

  Straw, Jack

  Oakes, Rt Hon Gordon

  Thomas, Dafydd (Merioneth)

  O'Brien, William

  Thomas, Dr R. (Carmarthen)

  O'Neill, Martin

  Thompson, J. (Wansbeck)

  Orme, Rt Hon Stanley

  Thorne, Stan (Preston)

  Park, George

  Torney, Tom

  Parry, Robert

  Wallace, James

  Patchett, Terry

  Wardell, Gareth (Gower)

  Pendry, Tom

  Wareing, Robert

  Penhaligon, David

  Weetch, Ken

  Pike, Peter

  Welsh, Michael

  Powell, Raymond (Ogmore)

  White, James

  Prescott, John

  Wigley, Dafydd

  Radice, Giles

  Williams, Rt Hon A.

  Randall, Stuart

  Wilson, Gordon

  Redmond, M.

  Winnick, David

  Rees, Rt Hon M. (Leeds S)

  Woodall, Alec

  Richardson, Ms Jo

  Wrigglesworth, Ian

  Roberts, Allan (Bootle)

  Young, David (Bolton SE)

  Roberts, Ernest (Hackney N)

  Robertson, George

  Tellers for the Ayes:

  Robinson, G. (Coventry NW)

  Mr. Mark Fisher and

  Rogers, Allan

  Mr. Ron Davies.

  Rooker, J. W.

  NOES

  Adley, Robert

  Brandon-Bravo, Martin

  Aitken, Jonathan

  Bright, Graham

  Alexander, Richard

  Brinton, Tim

  Alison, Rt Hon Michael

  Brittan, Rt Hon Leon

  Amess, David

  Brooke, Hon Peter

  Ancram, Michael

  Brown, M. (Brigg & Cl'thpes)

  Arnold, Tom

  Browne, John

  Ashby, David

  Bruinvels, Peter

  Aspinwall, Jack

  Bryan, Sir Paul

  Atkins, Rt Hon Sir H.

  Buchanan-Smith, Rt Hon A.

  Atkins, Robert (South Ribble)

  Buck, Sir Antony

  Atkinson, David (B'm'th E)

  Budgen, Nick

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

  Bulmer, Esmond

  Baker, Nicholas (Dorset N)

  Burt, Alistair

  Baldry, Tony

  Butcher, John

  Banks, Robert (Harrogate)

  Butler, Rt Hon Sir Adam

  Batiste, Spencer

  Butterfill, John

  Beaumont-Dark, Anthony

  Carlisle, John (Luton N)

  Bellingham, Henry

  Carlisle, Kenneth (Lincoln)

  Bendall, Vivian

  Carlisle, Rt Hon M. (W'ton S)

  Benyon, William

  Carttiss, Michael

  Best, Keith

  Cash, William

  Bevan, David Gilroy

  Chalker, Mrs Lynda

  Biffen, Rt Hon John

  Channon, Rt Hon Paul

  Biggs-Davison, Sir John

  Chapman, Sydney

  Blackburn, John

  Chope, Christopher

  Blaker, Rt Hon Sir Peter

  Churchill, W. S.

  Body, Sir Richard

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

  Bonsor, Sir Nicholas

  Clark, Dr Michael (Rochford)

  Bottomley, Peter

  Clark, Sir W. (Croydon S)

  Bottomley, Mrs Virginia

  Clarke, Rt Hon K. (Rushcliffe)

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

  Clegg, Sir Walter

  Bowden, Gerald (Dulwich)

  Cockeram, Eric

  Boyson, Dr Rhodes

  Colvin, Michael

  Braine, Rt Hon Sir Bernard

  Conway, Derek

  1168

  Coombs, Simon

  Hogg, Hon Douglas (Gr'th'm)

  Cope, John

  Holland, Sir Philip (Gedling)

  Cormack, Patrick

  Holt, Richard

  Corrie, John

  Hordern, Sir Peter

  Couchman, James

  Howard, Michael

  Cranborne, Viscount

  Howarth, Alan (Stratf'd-on-A)

  Crouch, David

  Howarth, Gerald (Cannock)

  Currie, Mrs Edwina

  Howe, Rt Hon Sir Geoffrey

  Dickens, Geoffrey

  Howell, Rt Hon D. (G'ldford)

  Dicks, Terry

  Howell, Ralph (Norfolk, N)

  Dorrell, Stephen

  Hubbard-Miles, Peter

  Dover, Den

  Hunt, David (Wirral)

  Dunn, Robert

  Hunt, John (Ravensbourne)

  Durant, Tony

  Hunter, Andrew

  Dykes, Hugh

  Hurd, Rt Hon Douglas

  Edwards, Rt Hon N. (P'broke)

  Irving, Charles

  Evennett, David

  Jackson, Robert

  Eyre, Sir Reginald

  Jenkin, Rt Hon Patrick

  Fallon, Michael

  Jessel, Toby

  Farr, Sir John

  Johnson Smith, Sir Geoffrey

  Favell, Anthony

  Jones, Gwilym (Cardiff N)

  Fenner, Mrs Peggy

  Jones, Robert (Herts W)

  Finsberg, Sir Geoffrey

  Jopling, Rt Hon Michael

  Fletcher, Alexander

  Joseph, Rt Hon Sir Keith

  Fookes, Miss Janet

  Kellett-Bowman, Mrs Elaine

  Forman, Nigel

  Key, Robert

  Forsyth, Michael (Stirling)

  King, Roger (B'ham N'field)

  Forth, Eric

  King, Rt Hon Tom

  Fowler, Rt Hon Norman

  Knight, Greg (Derby N)

  Fox, Marcus

  Knight, Dame Jill (Edgbaston)

  Franks, Cecil

  Knowles, Michael

  Fraser, Peter (Angus East)

  Knox, David

  Freeman, Roger

  Lamont, Norman

  Gale, Roger

  Lang, Ian

  Galley, Roy

  Latham, Michael

  Gardiner, George (Reigate)

  Lawler, Geoffrey

  Gardner, Sir Edward (Fylde)

  Lawrence, Ivan

  Garel-Jones, Tristan

  Lawson, Rt Hon Nigel

  Gilmour, Rt Hon Sir Ian

  Lee, John (Pendle)

  Glyn, Dr Alan

  Leigh, Edward (Gainsbor'gh)

  Goodhart, Sir Philip

  Lennox-Boyd, Hon Mark

  Goodlad, Alastair

  Lester, Jim

  Gorst, John

  Lewis, Sir Kenneth (Stamf'd)

  Gow, Ian

  Lightbown, David

  Gower, Sir Raymond

  Lilley, Peter

  Grant, Sir Anthony

  Lloyd, Ian (Havant)

  Greenway, Harry

  Lloyd, Peter, (Fareham)

  Gregory, Conal

  Lord, Michael

  Griffiths, Peter (Portsm'th N)

  Luce, Rt Hon Richard

  Grist, Ian

  Lyell, Nicholas

  Ground, Patrick

  McCrindle, Robert

  Grylls, Michael

  McCurley, Mrs Anna

  Gummer, Rt Hon John S

  Macfarlane, Neil

  Hamilton, Hon A. (Epsom)

  MacGregor, Rt Hon John

  Hamilton, Neil (Tatton)

  MacKay, Andrew (Berkshire)

  Hampson, Dr Keith

  MacKay, John (Argyll & Bute)

  Hanley, Jeremy

  Maclean, David John

  Hannam, John

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

  Hargreaves, Kenneth

  McQuarrie, Albert

  Harris, David

  Madel, David

  Harvey, Robert

  Major, John

  Haselhurst, Alan

  Malins, Humfrey

  Havers, Rt Hon Sir Michael

  Malone, Gerald

  Hawkins, C. (High Peak)

  Maples, John

  Hawkins, Sir Paul (N'folk SW)

  Marland, Paul

  Hawksley, Warren

  Marlow, Antony

  Hayes, J.

  Marshall, Michael (Arundel)

  Hayhoe, Rt Hon Barney

  Mates, Michael

  Hayward, Robert

  Maude, Hon Francis

  Heath, Rt Hon Edward

  Mawhinney, Dr Brian

  Heathcoat-Amory, David

  Maxwell-Hyslop, Robin

  Heddle, John

  Mayhew, Sir Patrick

  Henderson, Barry

  Mellor, David

  Heseltine, Rt Hon Michael

  Merchant, Piers

  Hickmet, Richard

  Meyer, Sir Anthony

  Hicks, Robert

  Miller, Hal (B'grove)

  Higgins, Rt Hon Terence L.

  Mills, Iain (Meriden)

  Hill, James

  Miscampbell, Norman

  Hind, Kenneth

  Mitchell, David (Hants NW)

  Hirst, Michael

  Moate, Roger

  1169

  Monro, Sir Hector

  Soames, Hon Nicholas

  Montgomery, Sir Fergus

  Speed, Keith

  Moore, Rt Hon John

  Speller, Tony

  Morrison, Hon C. (Devizes)

  Spence, John

  Morrison, Hon P. (Chester)

  Spencer, Derek

  Moynihan, Hon C.

  Spicer, Jim (Dorset W)

  Mudd, David

  Spicer, Michael (S Worcs)

  Murphy, Christopher

  Squire, Robin

  Neale, Gerrard

  Stanbrook, Ivor

  Needham, Richard

  Stanley, Rt Hon John

  Nelson, Anthony

  Steen, Anthony

  Neubert, Michael

  Stern, Michael

  Newton, Tony

  Stevens, Lewis (Nuneaton)

  Nicholls, Patrick

  Stewart, Allan (Eastwood)

  Normanton, Tom

  Stewart, Andrew (Sherwood)

  Norris, Steven

  Stewart, Ian (Hertf'dshire N)

  Onslow, Cranley

  Stokes, John

  Oppenheim, Phillip

  Stradling Thomas, Sir John

  Oppenheim, Rt Hon Mrs S.

  Sumberg, David

  Osborn, Sir John

  Tapsell, Sir Peter

  Ottaway, Richard

  Taylor, John (Solihull)

  Page, Sir John (Harrow W)

  Taylor, Teddy (S'end E)

  Page, Richard (Herts SW)

  Temple-Morris, Peter

  Parkinson, Rt Hon Cecil

  Terlezki, Stefan

  Parris, Matthew

  Thatcher, Rt Hon Mrs M.

  Patten, Christopher (Bath)

  Thomas, Rt Hon Peter

  Patten, J. (Oxf W & Abdgn)

  Thompson, Donald (Calder V)

  Pattie, Geoffrey

  Thompson, Patrick (N'ich N)

  Pawsey, James

  Thorne, Neil (Ilford S)

  Peacock, Mrs Elizabeth

  Thornton, Malcolm

  Pollock, Alexander

  Thurnham, Peter

  Porter, Barry

  Townend, John (Bridlington)

  Portillo, Michael

  Townsend, Cyril D, (B'heath)

  Powell, William (Corby)

  Tracey, Richard

  Powley, John

  Trippier, David

  Prentice, Rt Hon Reg

  Trotter, Neville

  Price, Sir David

  Twinn, Dr Ian

  Prior, Rt Hon James

  van Straubenzee, Sir W.

  Proctor, K. Harvey

  Vaughan, Sir Gerard

  Pym, Rt Hon Francis

  Viggers, Peter

  Raffan, Keith

  Waddington, David

  Raison, Rt Hon Timothy

  Wakeham, Rt Hon John

  Rathbone, Tim

  Waldegrave, Hon William

  Renton, Tim

  Walden, George

  Rhodes James, Robert

  Walker, Bill (T'side N)

  Rhys Williams, Sir Brandon

  Walker, Rt Hon P. (W'cester)

  Ridley, Rt Hon Nicholas

  Waller, Gary

  Ridsdale, Sir Julian

  Walters, Dennis

  Rifkind, Rt Hon Malcolm

  Ward, John

  Roberts, Wyn (Conwy)

  Wardle, C. (Bexhill)

  Robinson, Mark (N'port W)

  Warren, Kenneth

  Roe, Mrs Marion

  Watson, John

  Rossi, Sir Hugh

  Watts, John

  Rost, Peter

  Wells, Bowen (Hertford)

  Rowe, Andrew

  Wells, Sir John (Maidstone)

  Rumbold, Mrs Angela

  Wheeler, John

  Ryder, Richard

  Whitfield, John

  Sackville, Hon Thomas

  Whitney, Raymond

  Sainsbury, Hon Timothy

  Wiggin, Jerry

  St. John-Stevas, Rt Hon N.

  Wilkinson, John

  Sayeed, Jonathan

  Winterton, Mrs Ann

  Shaw, Giles (Pudsey)

  Winterton, Nicholas

  Shaw, Sir Michael (Scarb')

  Wolfson, Mark

  Shelton, William (Streatham)

  Wood, Timothy

  Shepherd, Colin (Hereford)

  Woodcock, Michael

  Shepherd, Richard (Aldridge)

  Yeo, Tim

  Shersby, Michael

  Young, Sir George (Acton)

  Silvester, Fred

  Younger, Rt Hon George

  Sims, Roger

  Skeet, Sir Trevor

  Tellers for the Noes:

  Smith, Sir Dudley (Warwick)

  Mr. Carol Mather and

  Smith, Tim (Beaconsfield)

  Mr. Robert Boscawen.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments):—
  The House divided: Ayes 367, Noes 217

  Division No. 38]

  10.14 pm

  AYES

  Aitken, Jonathan

  Dorrell, Stephen

  Alexander, Richard

  Dover, Den

  Alison, Rt Hon Michael

  Dunn, Robert

  Amess, David

  Durant, Tony

  Ancram, Michael

  Dykes, Hugh

  Arnold, Tom

  Edwards, Rt Hon N. (P'broke)

  Ashby, David

  Evennett, David

  Aspinwall, Jack

  Eyre, Sir Reginald

  Atkins, Rt Hon Sir H.

  Fallon, Michael

  Atkins, Robert (South Ribble)

  Farr, Sir John

  Atkinson, David (B'm'th E)

  Favell, Anthony

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

  Fenner, Mrs Peggy

  Baker, Nicholas (Dorset N)

  Finsberg, Sir Geoffrey

  Baldry, Tony

  Fletcher, Alexander

  Banks, Robert (Harrogate)

  Fookes, Miss Janet

  Batiste, Spencer

  Forman, Nigel

  Beaumont-Dark, Anthony

  Forsyth, Michael (Stirling)

  Bellingham, Henry

  Forth, Eric

  Bendall, Vivian

  Fowler, Rt Hon Norman

  Benyon, William

  Fox, Marcus

  Best, Keith

  Franks, Cecil

  Bevan, David Gilroy

  Fraser, Peter (Angus East)

  Biffen, Rt Hon John

  Freeman, Roger

  Biggs-Davison, Sir John

  Gale, Roger

  Blackburn, John

  Galley, Roy

  Blaker, Rt Hon Sir Peter

  Gardiner, George (Reigate)

  Body, Sir Richard

  Gardner, Sir Edward (Fylde)

  Bonsor, Sir Nicholas

  Garel-Jones, Tristan

  Bottomley, Peter

  Gilmour, Rt Hon Sir Ian

  Bottomley, Mrs Virginia

  Glyn, Dr Alan

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

  Goodhart, Sir Philip

  Bowden, Gerald (Dulwich)

  Goodlad, Alastair

  Boyson, Dr Rhodes

  Gorst, John

  Braine, Rt Hon Sir Bernard

  Gow, Ian

  Brandon-Bravo, Martin

  Gower, Sir Raymond

  Bright, Graham

  Grant, Sir Anthony

  Brinton, Tim

  Greenway, Harry

  Brittan, Rt Hon Leon

  Gregory, Conal

  Brooke, Hon Peter

  Griffiths, Peter (Portsm'th N)

  Brown, M. (Brigg & Cl'thpes)

  Grist, Ian

  Browne, John

  Ground, Patrick

  Bruinvels, Peter

  Grylls, Michael

  Bryan, Sir Paul

  Gummer, Rt Hon John S

  Buchanan-Smith, Rt Hon A.

  Hamilton, Hon A. (Epsom)

  Buck, Sir Antony

  Hamilton, Neil (Tatton)

  Budgen, Nick

  Hampson, Dr Keith

  Bulmer, Esmond

  Hanley, Jeremy

  Burt, Alistair

  Hannam, John

  Butcher, John

  Hargreaves, Kenneth

  Butler, Rt Hon Sir Adam

  Harris, David

  Butterfill, John

  Harvey, Robert

  Carlisle, John (Luton N)

  Haselhurst, Alan

  Carlisle, Kenneth (Lincoln)

  Havers, Rt Hon Sir Michael

  Carlisle, Rt Hon M. (W'ton S)

  Hawkins, C. (High Peak)

  Carttiss, Michael

  Hawkins, Sir Paul (N'folk SW)

  Cash, William

  Hawksley, Warren

  Chalker, Mrs Lynda

  Hayes, J.

  Channon, Rt Hon Paul

  Hayhoe, Rt Hon Barney

  Chapman, Sydney

  Hayward, Robert

  Chope, Christopher

  Heath, Rt Hon Edward

  Churchill, W. S.

  Heathcoat-Amory, David

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

  Heddle, John

  Clark, Dr Michael (Rochford)

  Henderson, Barry

  Clark, Sir W. (Croydon S)

  Heseltine, Rt Hon Michael

  Clarke, Rt Hon K. (Rushcliffe)

  Hickmet, Richard

  Clegg, Sir Walter

  Higgins, Rt Hon Terence L.

  Cockeram, Eric

  Hill, James

  Colvin, Michael

  Hind, Kenneth

  Conway, Derek

  Hirst, Michael

  Coombs, Simon

  Hogg, Hon Douglas (Gr'th'm)

  Cope, John

  Holland, Sir Philip (Gedling)

  Corrie, John

  Holt, Richard

  Couchman, James

  Hordern, Sir Peter

  Cranborne, Viscount

  Howard, Michael

  Crouch, David

  Howarth, Alan (Stratf'd-on-A)

  Currie, Mrs Edwina

  Howarth, Gerald (Cannock)

  Dickens, Geoffrey

  Howe, Rt Hon Sir Geoffrey

  Dicks, Terry

  Howell, Rt Hon D. (G'ldford)

  1171

  Howell, Ralph (Norfolk, N)

  Needham, Richard

  Hubbard-Miles, Peter

  Nelson, Anthony

  Hunt, David (Wirral)

  Neubert, Michael

  Hunt, John (Ravensbourne)

  Newton, Tony

  Hunter, Andrew

  Nicholls, Patrick

  Hurd, Rt Hon Douglas

  Normanton, Tom

  Irving, Charles

  Norris, Steven

  Jackson, Robert

  Onslow, Cranley

  Jenkin, Rt Hon Patrick

  Oppenheim, Phillip

  Jessel, Toby

  Oppenheim, Rt Hon Mrs S.

  Johnson Smith, Sir Geoffrey

  Osborn, Sir John

  Jones, Gwilym (Cardiff N)

  Ottaway, Richard

  Jones, Robert (Herts W)

  Page, Sir John (Harrow W)

  Jopling, Rt Hon Michael

  Page, Richard (Herts SW)

  Joseph, Rt Hon Sir Keith

  Parkinson, Rt Hon Cecil

  Kellett-Bowman, Mrs Elaine

  Parris, Matthew

  Key, Robert

  Patten, Christopher (Bath)

  King, Roger (B'ham N'field)

  Patten, J. (Oxf W & Abdgn)

  King, Rt Hon Tom

  Pattie, Geoffrey

  Knight, Greg (Derby N)

  Pawsey, James

  Knight, Dame Jill (Edgbaston)

  Peacock, Mrs Elizabeth

  Knowles, Michael

  Pollock, Alexander

  Knox, David

  Porter, Barry

  Lamont, Norman

  Portillo, Michael

  Lang, Ian

  Powell, William (Corby)

  Latham, Michael

  Powley, John

  Lawler, Geoffrey

  Prentice, Rt Hon Reg

  Lawrence, Ivan

  Price, Sir David

  Lawson, Rt Hon Nigel

  Prior, Rt Hon James

  Lee, John (Pendle)

  Proctor, K. Harvey

  Leigh, Edward (Gainsbor'gh)

  Pym, Rt Hon Francis

  Lennox-Boyd, Hon Mark

  Raffan, Keith

  Lester, Jim

  Raison, Rt Hon Timothy

  Lewis, Sir Kenneth (Stamf'd)

  Rathbone, Tim

  Lightbown, David

  Renton, Tim

  Lilley, Peter

  Rhodes James, Robert

  Lloyd, Ian (Havant)

  Rhys Williams, Sir Brandon

  Lloyd, Peter, (Fareham)

  Ridley, Rt Hon Nicholas

  Lord, Michael

  Ridsdale, Sir Julian

  Luce, Rt Hon Richard

  Rifkind, Rt Hon Malcolm

  Lyell, Nicholas

  Roberts, Wyn (Conwy)

  McCrindle, Robert

  Robinson, Mark (N'port W)

  McCurley, Mrs Anna

  Roe, Mrs Marion

  Macfarlane, Neil

  Rossi, Sir Hugh

  MacGregor, Rt Hon John

  Rost, Peter

  MacKay, Andrew (Berkshire)

  Rowe, Andrew

  MacKay, John (Argyll & Bute)

  Rumbold, Mrs Angela

  Maclean, David John

  Ryder, Richard

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

  Sackville, Hon Thomas

  McQuarrie, Albert

  Sainsbury, Hon Timothy

  Madel, David

  St. John-Stevas, Rt Hon N.

  Major, John

  Sayeed, Jonathan

  Malins, Humfrey

  Shaw, Giles (Pudsey)

  Malone, Gerald

  Shaw, Sir Michael (Scarb')

  Maples, John

  Shelton, William (Streatham)

  Marland, Paul

  Shepherd, Colin (Hereford)

  Marlow, Antony

  Shepherd, Richard (Aldridge)

  Marshall, Michael (Arundel)

  Shersby, Michael

  Mates, Michael

  Silvester, Fred

  Maude, Hon Francis

  Sims, Roger

  Mawhinney, Dr Brian

  Skeet, Sir Trevor

  Maxwell-Hyslop, Robin

  Smith, Sir Dudley (Warwick)

  Mayhew, Sir Patrick

  Smith, Tim (Beaconsfield)

  Mellor, David

  Soames, Hon Nicholas

  Merchant, Piers

  Speed, Keith

  Meyer, Sir Anthony

  Speller, Tony

  Miller, Hal (B'grove)

  Spence, John

  Mills, Iain (Meriden)

  Spencer, Derek

  Miscampbell, Norman

  Spicer, Jim (Dorset W)

  Mitchell, David (Hants NW)

  Spicer, Michael (S Worcs)

  Moate, Roger

  Squire, Robin

  Monro, Sir Hector

  Stanbrook, Ivor

  Montgomery, Sir Fergus

  Stanley, John

  Moore, Rt Hon John

  Steen, Anthony

  Morrison, Hon C. (Devizes)

  Stern, Michael

  Morrison, Hon P. (Chester)

  Stevens, Lewis (Nuneaton)

  Moynihan, Hon C.

  Stewart, Allan (Eastwood)

  Mudd, David

  Stewart, Andrew (Sherwood)

  Murphy, Christopher

  Stewart, Ian (Hertf'dshire N)

  Neale, Gerrard

  Stokes, John

  1172

  Stradling Thomas, Sir John

  Walker, Bill (T'side N)

  Sumberg, David

  Walker, Rt Hon P. (W'cester)

  Tapsell, Sir Peter

  Waller, Gary

  Taylor, John (Solihull)

  Walters, Dennis

  Taylor, Teddy (S'end E)

  Ward, John

  Temple-Morris, Peter

  Wardle, C. (Bexhill)

  Terlezki, Stefan

  Warren, Kenneth

  Thatcher, Rt Hon Mrs M.

  Watson, John

  Thomas, Rt Hon Peter

  Watts, John

  Thompson, Donald (Calder V)

  Wells, Bowen (Hertford)

  Thompson, Patrick (N'ich N)

  Wells, Sir John (Maidstone)

  Thorne, Neil (Ilford S)

  Wheeler, John

  Thornton, Malcolm

  Whitfield, John

  Thurnham, Peter

  Whitney, Raymond

  Townend, John (Bridlington)

  Wiggin, Jerry

  Townsend, Cyril D. (B'heath)

  Wilkinson, John

  Tracey, Richard

  Winterton, Mrs Ann

  Trippier, David

  Wolfson, Mark

  Trotter, Neville

  Wood, Timothy

  Twinn, Dr Ian

  Woodcock, Michael

  van Straubenzee, Sir W.

  Yeo, Tim

  Vaughan, Sir Gerard

  Young, Sir George (Acton)

  Viggers, Peter

  Younger, Rt Hon George

  Waddington, David

  Wakeham, Rt Hon John

  Tellers for the Ayes:

  Waldegrave, Hon William

  Mr. Carol Mather and

  Walden, George

  Mr. Robert Boscawen.

  NOES

  Abse, Leo

  Cunliffe, Lawrence

  Adams, Allen (Paisley N)

  Cunningham, Dr John

  Alton, David

  Dalyell, Tam

  Anderson, Donald

  Davies, Rt Hon Denzil (L'lli)

  Archer, Rt Hon Peter

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

  Ashdown, Paddy

  Deakins, Eric

  Ashley, Rt Hon Jack

  Dewar, Donald

  Ashton, Joe

  Dixon, Donald

  Atkinson, N. (Tottenham)

  Dobson, Frank

  Bagier, Gordon A. T.

  Dormand, Jack

  Banks, Tony (Newham NW)

  Douglas, Dick

  Barnett, Guy

  Dubs, Alfred

  Barron, Kevin

  Dunwoody, Hon Mrs G.

  Beith, A. J.

  Eadie, Alex

  Bell, Stuart

  Eastham, Ken

  Benn, Rt Hon Tony

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

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

  Ellis, Raymond

  Bermingham, Gerald

  Evans, John (St. Helens N)

  Bidwell, Sydney

  Ewing, Harry

  Blair, Anthony

  Fatchett, Derek

  Boyes, Roland

  Faulds, Andrew

  Bray, Dr Jeremy

  Field, Frank (Birkenhead)

  Brown, Gordon (D'f'mline E)

  Fields, T. (L'pool Broad Gn)

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

  Flannery, Martin

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

  Foot, Rt Hon Michael

  Brown, Ron (E'burgh, Leith)

  Forrester, John

  Bruce, Malcolm

  Foster, Derek

  Buchan, Norman

  Foulkes, George

  Caborn, Richard

  Fraser, J. (Norwood)

  Callaghan, Rt Hon J.

  Freeson, Rt Hon Reginald

  Callaghan, Jim (Heyw'd & M)

  Freud, Clement

  Campbell-Savours, Dale

  Garrett, W. E.

  Canavan, Dennis

  George, Bruce

  Carlile, Alexander (Montg'y)

  Gilbert, Rt Hon Dr John

  Cartwright, John

  Godman, Dr Norman

  Clark, Dr David (S Shields)

  Golding, John

  Clarke, Thomas

  Gould, Bryan

  Clay, Robert

  Gourlay, Harry

  Clelland, David Gordon

  Hamilton, James (M'well N)

  Clwyd, Mrs Ann

  Hamilton, W. W. (Fife Central)

  Cocks, Rt Hon M. (Bristol S.)

  Hancock, Mr. Michael

  Cohen, Harry

  Hardy, Peter

  Coleman, Donald

  Harman, Ms Harriet

  Concannon, Rt Hon J. D.

  Harrison, Rt Hon Walter

  Conlan, Bernard

  Hart, Rt Hon Dame Judith

  Cook, Frank (Stockton North)

  Hattersley, Rt Hon Roy

  Cook, Robin F. (Livingston)

  Haynes, Frank

  Corbett, Robin

  Healey, Rt Hon Denis

  Cox, Thomas (Tooting)

  Heffer, Eric S.

  Craigen, J. M.

  Hogg, N. (C'nauld & Kilsyth)

  Crowther, Stan

  Holland, Stuart (Vauxhall)

  1173

  Home Robertson, John

  Martin, Michael

  Howell, Rt Hon D. (S'heath)

  Mason, Rt Hon Roy

  Hoyle, Douglas

  Maxton, John

  Hughes, Robert (Aberdeen N)

  Maynard, Miss Joan

  Hughes, Roy (Newport East)

  Meacher, Michael

  Hughes, Sean (Knowsley S)

  Meadowcroft, Michael

  Hughes, Simon (Southwark)

  Michie, William

  Janner, Hon Greville

  Mikardo, Ian

  Jenkins, Rt Hon Roy (Hillh'd)

  Millan, Rt Hon Bruce

  John, Brynmor

  Miller, Dr M. S. (E Kilbride)

  Johnston, Sir Russell

  Mitchell, Austin (G't Grimsby)

  Jones, Barry (Alyn & Deeside)

  Morris, Rt Hon A. (W'shawe)

  Kaufman, Rt Hon Gerald

  Morris, Rt Hon J. (Aberavon)

  Kennedy, Charles

  Nellist, David

  Kilroy-Silk, Robert

  Oakes, Rt Hon Gordon

  Kinnock, Rt Hon Neil

  O'Brien, William

  Kirkwood, Archy

  O'Neill, Martin

  Lambie, David

  Orme, Rt Hon Stanley

  Lamond, James

  Park, George

  Leadbitter, Ted

  Parry, Robert

  Leighton, Ronald

  Patchett, Terry

  Lewis, Ron (Carlisle)

  Pendry, Tom

  Lewis, Terence (Worsley)

  Penhaligon, David

  Litherland, Robert

  Pike, Peter

  Livsey, Richard

  Powell, Raymond (Ogmore)

  Lloyd, Tony (Stretford)

  Prescott, John

  Lofthouse, Geoffrey

  Radice, Giles

  Loyden, Edward

  Randall, Stuart

  McCartney, Hugh

  Redmond, M.

  McDonald, Dr Oonagh

  Rees, Rt Hon M. (Leeds S)

  McGuire, Michael

  Richardson, Ms Jo

  McKay, Allen (Penistone)

  Roberts, Allan (Bootle)

  MacKenzie, Rt Hon Gregor

  Roberts, Ernest (Hackney N)

  Maclennan, Robert

  Robertson, George

  McNamara, Kevin

  Robinson, G. (Coventry NW)

  McTaggart, Robert

  Rogers, Allan

  McWilliam, John

  Rooker, J. W.

  Madden, Max

  Ross, Stephen (Isle of Wight)

  Marek, Dr John

  Rowlands, Ted

  Marshall, David (Shettleston)

  Ryman, John

  1174

  Sedgemore, Brian

  Thorne, Stan (Preston)

  Sheerman, Barry

  Torney, Tom

  Sheldon, Rt Hon R.

  Wallace, James

  Shore, Rt Hon Peter

  Wardell, Gareth (Gower)

  Short, Ms Clare (Ladywood)

  Wareing, Robert

  Silkin, Rt Hon J.

  Weetch, Ken

  Skinner, Dennis

  Welsh, Michael

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

  White, James

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

  Wigley, Dafydd

  Snape, Peter

  Williams, Rt Hon A.

  Soley, Clive

  Wilson, Gordon

  Spearing, Nigel

  Winnick, David

  Steel, Rt Hon David

  Woodall, Alec

  Stewart, Rt Hon D. (W Isles)

  Wrigglesworth, Ian

  Stott, Roger

  Young, David (Bolton SE)

  Strang, Gavin

  Straw, Jack

  Tellers for the Noes:

  Thomas, Dafydd (Merioneth)

  Mr. Mark Fisher and

  Thomas, Dr R. (Carmarthen)

  Mr. Ron Davies.

  Thompson, J. (Wansbeck)

  Question accordingly agreed to.
  Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House endorses the Government's consistent objective of supporting Westland plc in its efforts to achieve a financial reconstruction, of supporting United Kingdom participation in collaboration with North Atlantic Treaty Organisation allies and of safeguarding the interests of the company, its employees and its shareholders, recognises the efforts of the Government to ensure that the Westland Board had more than one option to secure that objective; affirms that it will be for the company to determine its future course of action; and further recognises the competence of departmental Select Committees of the House of Commons to consider the issues raised by these developments.

Statutory Sick Pay
10.28 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): I beg to move,
That the draft Statutory Sick Pay Up-rating Order 1985, which was laid before this House on 17th December, be approved.
The purpose of the order is to increase the rates of statutory sick pay and the bands of earnings which determine the rate payable. My right hon. Friend the Secretary of State has carried out his annual review of those amounts as he is required to do by the Social Security and Housing Benefits Acts 1982. The uprating of the bands, and consequently the rates, is reviewed in relation to changes in the general level of prices which, in the 12 months to October 1985, rose by 5–4 per cent. as measured by the index of retail prices. The draft order accordingly provides for an equivalent increase in the SSP rates and earnings levels to apply from 6 April 1986.
As hon. Members will know, there are three rates of SSP. As usual, in working out the new rates we have followed established practice and rounded them to the nearest 5p. The new upper and middle thresholds have been rounded down to the next 50p. Rounding down in that fashion is beneficial to employees as it enables more to qualify for the higher and middle rates of SSP than would otherwise be the case. The lower earnings threshold—below which no SSP is payable—is not subject to uprating by the order. That is set automatically by the Act at the lower earnings limit for class 1 contributions, which will be £38 from 6 April 1986.
The result of these calculations is that from next April employees with average earnings of £74·50 or more per week will qualify for SSP at the new standard weekly rate of £46·75. Those who earn between £55·50 and £74·49 will be entitled to the new middle rate of £39·20. And those who earn between £38 and £55·49 will receive the new lower rate of £31·60. These new rates represent increases of £2·40, £2 and £1·60 per week respectively.
The draft order makes the usual transitional provision for those employees who have current entitlement to SSP at the time the uprating takes effect. Whichever level of SSP an employee is receiving at the time the uprating takes place, whether standard, middle or lower, he will, from 6 April receive the new amount of SSP relevant to that level for as long as his period of entitlement lasts. This is so even if his average earnings—which are, of course, calculated at the start of his sickness—would put him in a different earnings band. Without this beneficial provision some employees could face a significant reduction in the SSP payable to them at the uprating date and I am sure hon. Members will welcome the fact that this will not occur. [HON. MEMBERS: "Hear, hear."] I acknowledge support from whatever quarter it comes.
April 1986, will, of course, see other changes in SSP that lie outside the main provisions of the order. The House will recall that under legislation passed in the Social Security Act 1985, an employer's maximum liability for paying his employees SSP when sick will increase from eight weeks to 28 weeks. Full reimbursement of the costs of this extended period will continue to be available with employers deducting their costs from their national
1176
insurance liability. Some other changes in the present rules and procedures will also take place consequent on the increased maximum duration. These were developed following consultation and discussion with employers and others earlier last year. I am pleased to say that a completely revised employer's guide to statutory sick pay, incorporating these changes, was issued to all employers last October to enable them to make the necessary preparation for these changes. The new rates covered in the order before us will thus be the first ones to apply to the extended scheme.
It remains the Government's intention to review SSP rates and earnings bands annually, with increases taking effect from the following April. By 1987 social security benefits will also have moved to an April uprating date, We intend, therefore, that in future the Secretary of State will review SSP rates at the same time as other social security benefit rates.
Details of the new SSP rates and earnings bands will be notified to employers shortly in a leaflet issued with the new national insurance contribution rate tables, which will also come into operation in April. The new SSP rates will also be publicised in leaflets available generally from the Department of Health and Social Security.
Finally, I should perhaps remind the House that the rates of SSP are statutory minima. Many employees—in fact, the great majority—receive occupational sick pay from their employers and a number continue to get full pay when sick. We have no evidence to suggest that the current rates of SSP have resulted in hardship or difficulties for employees. Indeed there are clear indications that most employees prefer SSP to the sickness benefit it replaces because it is so much simpler for them to receive their money when sick from the same source as when working. Neither is there evidence to suggest that the rates have affected employers' and employees' flexibility for negotiating levels of occupational sick pay.
The draft order provides for the SSP rates to keep pace with the rise in the general level of prices. I commend it to the House.
10.33 pm
Mr. Michael Meacher: First let me make it clear that the uprating principle underlying the order is not in contention, but I wish briefly to use the debate to highlight two main issues where the Opposition remain distinctly critical. One is the experience of statutory sick pay as it has developed, especially in the light of its extension to 28 weeks from 6 April next, and the other is the proposed privatisation of other benefits where the example of statutory sick pay is being used as a model.
Our main objection is that the extension of statutory sick pay represents not only the abolition of state sickness benefit but the prolongation over a much longer period of all the disadvantages clearly manifest in this act of privatisation.
First, unlike sickness benefit—and we take a view of it different from the over-generous picture for employees given by the Minister—statutory sick pay is taxable and subject to deductions for national insurance contributions. Therefore, for many employees, especially those on low earnings, SSP means less money when they are unable to work because of sickness or disability. Indeed, for those on very low incomes, about £50 a week, the loss can be as hefty as £14 or £15 a week.

1177
Nor is it any defence to say, as Ministers do—although the Minister did not do so tonight—that the low level of SSP is compensated for by supplementary benefit. Recent figures show that one third of sick or disabled people do not claim the supplementary benefit to which they are entitled. Perhaps that is the best indication of the inadequacy of SSP. Means-tested supplementary benefit should never be regarded as a satisfactory substitute for an adequate benefit as of right when people cannot work.
Ministers also like to evade the unsatisfactory nature of SSP by referring—as the Minister did tonight—to the number of occupational sick pay schemes. Of course, a few do exist, but many employees are not covered by them because they are generally run on a discretionary basis. In particular, part-time workers and others in low-paid jobs are frequently excluded.
A sign of the amount of loss of benefit from the extension of SSP is provided by the Government's estimate of the so-called savings that will accrue in the next financial year—of the order of £200 million. Those savings are being made purely at the expense of the sick and disabled who are already having to cope with the extra costs of disability. It is surely wrong and unfair that employees will be paying out more in tax and national insurance contributions because of the extension of SSP, while employers will not be expected to pay any national insurance contribution for SSP payments.
Another matter for concern is that—
The Minister for Social Security (Mr. Tony Newton): The hon. Gentleman plainly has not understood the financial basis of SSP. The saving of £200 million is a saving to public expenditure, but it is almost precisely counterbalanced by the revenue forgone from the national insurance fund in compensation for the payments by employers to employees. The notion that either the original introduction of SSP or its extension entail losses to beneficiaries of the sort suggested by the hon. Gentleman is, quite simply, wrong.
Mr. Meacher: The figures are not so very different from what I have suggested. The Minister is right to say that there is an offset, and I wholly accept that. But there are substantial disadvantages to employees. The figure that I am quoting is the public expenditure figure that appears in the Government's public expenditure papers.
Does the Minister deny that, if employees are to pay substantially more in tax and national insurance contributions, there will be a significant disadvantage for them? Does he deny that as a result of the scheme, many on the lowest levels of income—about £40, £50 or £60 a week—are suffering substantial losses that can be as much as £14 or £15 a week?
Another matter for concern is that the rate of unemployment is already higher among the disabled than among the work force as a whole. An extension of SSP, with the additional administrative burden on employers, is all too likely to lead to discrimination against workers with poor health records.
Indeed, there are other disadvantages to SSP. It has involved a much harsher linking than that applying to sickness benefit, although that is now to be changed.
Moreover, because it is administered by employers—that is not to be changed—and not by the DHSS, there are no powers, short of taking the employer to court, to
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enforce payment of statutory sick pay by employers. If an adjudication officer, social security appeal tribunal or a social security commissioner issues a formal decision that a person is entitled to statutory sick pay, the DHSS cannot force a recalcitrant employer to pay the correct amount to the employee. Employees in unorganised workplaces, particularly part-time workers or those in low-paid jobs, are vulnerable to harassment by employers in relation to absence through sickness, given the leeway that the DHSS has now given to employers.
There is no protection for employees who are dismissed by their employers so that the latter can avoid paying them statutory sick pay. Extending statutory sick pay in April will increase the employee's exposure to unscrupulous manoeuvres by some employers.
For those reasons, we contend that statutory sick pay, which was introduced almost without warning and with perfunctory consultation, has worked to the detriment of employees in a variety of ways.
There are good grounds for the fear that the introduction of statutory sick pay will be used as a wedge in the door of further moves to hive off state responsibility for social security benefits. Evidence of further intended privatisation by the Government emerged on 19 December when the DHSS issued a consultation paper on statutory maternity allowance. That proposed that responsibility for paying maternity allowance—
Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman is straying wide of the order. I have given him a lot of rope, but he must not discuss maternity pay.
Mr. Meacher: I am not seeking to introduce a debate on maternity allowance, but I am making the valid point that the introduction of statutory sick pay is being used as a model for further extending the privatisation of social security benefits. I wish to make one or two other brief comments related to that, but I do not seek to discuss that argument in depth because it is to be discussed in another place.
Mr. Deputy Speaker: That can be left to another place because the order is about uprating statutory sick pay, not the principle, which the House has already decided.
Mr. Meacher: I accept that, but it is important that this is being used as a model for further privatisation. It suggests that statutory maternity allowance should be paid at the lowest rate of statutory sick pay—£31·60 a week in April 1986 terms—regardless of earnings. Statutory maternity allowance and statutory sick pay should not in general link to the same period of interruption in work. A further act of privatisation is now to be carried out on the model of statutory sick pay, despite all its drawbacks, but in this case it will be on even meaner terms with only one level of benefit instead of three, and that will be the lowest statutory sick pay level.
We do not dispute the uprating basis in the order, but we want to place firmly on record our strong condemnation, not only of the principle of the privatisation of social security benefits, but of the manifest disadvantages for the employee that this has been shown to involve. We oppose the extension of the principle, with its disadvantages to other benefits such as statutory maternity allowance.

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If the Government do not take note of our objections, I give notice that when we come to power we shall deal with them rapidly.
10.44 pm
Mr. Charles Kennedy: The speech of the hon. Member for Oldham, West (Mr. Meacher) was reasonably credible, and I agreed with much of what he said until his closing sentiments—perhaps that does not surprise him. It will certainly not surprise those sitting on the Treasury Bench. A return of the Labour party to power would greatly surprise the British people.
My hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and I welcome the fact that, on this occasion, the DHSS is staying within and upholding the law of the land, and will uprate accordingly. We have no argument with that. It was sensible of the DHSS to bring the uprating procedure into line as from 1987. My noble Friend Lord Banks and others have argued for that, and we welcome it.
My basic point on the uprating order relates to the impact that statutory sick pay has on small businesses. The Minister will recall that my hon. Friend and I have moved amendments and made speeches, in Committee and in the House, on the effect of the statutory sick pay scheme in this respect. That is why we welcome the reference in the explanatory details that accompanied the order to the DHSS consultation paper on the reduction of burdens on business. It would be helpful if the Minister would say briefly how matters are progressing in that respect—by which I mean the suggestion that employers should be allowed to opt out of SSP, provided that they pay wages to their sick employees at least as good as their SSP entitlement.
The Government will recall that the announcement of an extension of the SSP scheme was met with horror by, among others, the National Federation of Self Employed and Small Businesses. I agree with the hon. Member for Oldham, West that the bureaucracy of the SSP scheme and the extension which has been announced would discriminate against the employment potential of small businesses, and encourage more part-time employment rather than full-time employment. The Government said during SSP debates that they were conscious of the difficulty, and made some concessions in terms of bridging the gap.
You have been tolerant of my similarly lateral interpretation of the order, Mr. Deputy Speaker. May I end by saying that we welcome the fact that the uprating will go ahead, and especially the fact that the SSP uprating will be brought into line with other benefits. Any comments which the Minister can make on these broader points, based on the principle that we are debating this evening, would be helpful to my hon. Friend and myself.
10.48 pm
Mr. Major: This has been a modest debate—[Interruption.] I make no complaint about that. As is often the case on such occasions, the debate has ranged rather more widely than the strict terms of the order. The hon. Member for Oldham, West (Mr. Meacher) went substantially more widely, and the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) greatly tested your
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traditional good nature and patience, Mr. Deputy Speaker. Being a more timorous soul, I have no intention of tempting your good nature to that extent.
I am grateful to the hon. Member for Oldham, West for welcoming the principle of the uprating, although I was a little alarmed that he seemed to see plots and difficulties where none exists.
The hon. Gentleman also spoke a little scornfully of what he described as the privatisation of social security benefits. That seems an odd way to put it. The introduction and subsequent extension of the SSP principle leads to a closer and better relationship between employers and employees. I believe that the ability to make SSP payments in the way that now obtains makes for a sound basis for relationships between employers and employees. It has generally been welcomed, it has proved fairly successful and I am sorry that the hon. Gentleman made that rather ideological point.
The hon. Gentleman also touched in passing on occupational sick pay schemes. The two issues are not unrelated. A very substantial number of employees now benefit from such schemes. Precise up-to-date figures are not available, but the latest firm information is that about 80 per cent. of employees are covered. That figure is based on a survey in 1977 and, although I cannot state this as a firm fact, there is every reason to believe that the number of employees so covered has continued to grow since then. In my view, that makes out the case for the rationalisation of SSP in the way in which it has been introduced in recent years. I hope that in due course the hon. Member for Oldham, West will entirely welcome the changes that have been made.
The hon. Gentleman referred also to the forthcoming extension of SSP liability from eight to 28 weeks. In terms of the number of weeks that is a considerable extension, but on further examination it proves not to be so great a change as it might appear at first glance. Under the existing eight week scheme employers already deal with the bulk of short sickness spells. Only about 10 per cent. of sickness spells last longer than eight weeks and of those about half last no longer than 13 weeks. We estimate, therefore, that under the current eight-week scheme employers deal with about 5 million spells of sickness per year. The extension will mean that 700,000 of those cases will not be transferred to state sickness benefit but will continue to be paid SSP by employers until the sickness ends or there is a transfer to invalidity benefit at the commencement of the 29th week.
We all know that my hon. Friend the Minister for Social Security is one of the most tolerant Members to represent any party in the House in recent years, but even his traditional tolerance started to snap—I felt him quiver at my side like a greyhound ready to leave the trap—when the hon. Member for Oldham, West referred to the saving of £200 million on the extension of SSP as a loss to sick employees. My hon. Friend intervened to make it quite clear that that is not so. The £200 million saving in public expenditure certainly represents sickness benefit that is not paid out, but it is replaced by £285 million paid out in statutory sick pay and recovered by the employer from the national insurance fund through deductions from the national insurance contributions that would otherwise be paid into the fund. Therefore, although I understand the hon. Gentleman's point, I think that it had no substance and that in view of the clear comments of my hon. Friend the Minister I need not labour the matter any further.
Mr. Meacher: Perhaps I may press the matter a little further. It is true that contribution income to the national insurance fund will be reduced by £285 million in a full year as a result of the Government's decision to relieve employers of paying national insurance contributions on employees' SSP, but that is offset to some extent by increases in revenue from tax and national insurance contributions from employees on their statutory sick pay. There is a reversal in the burden of payment which is very much in favour of employers and against employees. The Minister must take that firmly on board.
Mr. Major: I understand the hon. Gentleman's point. He should bear in mind, in the context of the state's capacity to pay, the fact that this change has meant a substantial saving as so few sickness benefit claims are now made through the normal social security system. I do not have the figures here, but that substantial administrative cost saving has meant funds are available for other uses in the social security system. We must consider the broad principle. The scheme has been successful and, with the exception of some of the unharmonious comments of the hon. Member for Oldham, West, it has been broadly welcomed.
Mr. Meacher: The Minister tries to make something out of the savings on administrative costs. He says that he does not have the figures, but I understood the savings to be only £3 million to £4 million. It in no way derogates from my main point.
Mr. Major: I did not find the hon. Gentleman's main point very attractive. Nor do I think that it weighs heavily in the scales against the convenience, principally to the employee, of receiving statutory sick pay in lieu of state sickness benefit from the same source as he receives his salary. It is an administrative convenience of some significance to him, too. I know that the hon. Gentleman is anxious about the beneficiaries of any type of social security benefit. I should have thought that he would regard this as a significant advance. That is our view and I believe that it would be shared by most beneficiaries.
In the midst of his other comments, the hon. Member gave the impression that the extension of statutory sick pay would lead to discrimination against the chronically sick and disabled. I hope that he does not believe that. We have no evidence to that effect. There is no reason to suppose that the scheme will have that effect. In general, disabled people do not have bad attendance records. Indeed, they tend to be very good. Successive Governments have tried to increase awareness that a disabled employee is a good employee whose attendance record, on the evidence available to us, is likely to be better than average.
Some employers might try to avoid employing people likely to have poor attendance records, but I do not believe that statutory sick pay has aggravated that. Employers are more likely to be worried about problems with production
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and with the employment of temporary staff which frequent absences of their regular employees can result in. As employers are fully compensated for the statutory sick pay that they pay out and, as the hon. Gentleman said, the cost of making that payment, there is no realistic reason for fearing that the extension of the scheme will mean additional discrimination against the chronically sick and disabled. That is the thrust of much that we have tried to do and will do in the Bill that will shortly be presented to the House to ensure that the sick and disabled are treated as well as possible. That is an important priority.
The hon. Gentleman considered other matters beyond the scope of the order. I hope that he will understand that, in your presence, Mr. Deputy Speaker, I have no intention of pursuing them. The hon. Member for Ross, Cromarty and Skye made several interesting points. I am grateful to him for welcoming the alignment of uprating and the support that he offered. It is a logical extension and, in the absence of the hon. Member for Oldham. West mentioning it, we can conclude that we have his support on that count.
The hon. Member for Ross, Cromarty and Skye asked about the "Burden on Business" consultation document issued by my hon. Friend the Parliamentary Under-Secretary of State for Health and Social Security. The consultation period has ended. We are considering the responses. I hope that we shall soon be in a position to reach conclusions on that matter. It was a useful exercise to have the consultation. We have had a number of worthwhile responses.
The hon. Member for Oldham, West welcomed the general principle. Despite some of his comments, the statutory sick pay scheme has been running smoothly and successfully. I should like to take the opportunity to congratulate employers on the way in which they have taken the scheme on board. When it was mooted I think they had reason to be concerned, and many of them expressed concern. Their experience in running the scheme has shown that their concerns were largely unrealised. I am confident that they will equally take in their stride the extension of the period from eight to 28 weeks, not least because it will not lead to anything like a proportionate increase in payments, as might be supposed.
The order proposes an increase in the rates of statutory sick pay so as to keep them in line with the general rise in prices since the rates were last reviewed. Despite some equivocation, I detect no opposition to the order. I hope that the House will feel inclined to approve it without dissent.
Question put and agreed to.
Resolved,
That the draft Statutory Sick Pay Up-rating Order 1985, which was laid before this House on 17th December, be approved.

Southend Hospital (Radiotherapy Unit)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]
11.1 pm
Dr. Michael Clark: I wish to discuss an issue of great importance to south-east Essex. I start by expressing appreciation to the local press, which has shown a great interest in the matter, and to the senior surgeon of Southend hospital, who has done the same.
Southend health authority includes Rochford in my constituency and is under North-East Thames regional health authority, as is Oldchurch, the hospital that my hon. Friend the Member for Hornchurch (Mr. Squire) talked about on Monday evening. So far during 1986 two thirds of the Adjournment debates have been on this one subject. It is significant that North-East Thames regional health authority has come under so much criticism.
At the beginning of my speech I should like to thank my hon. Friend the Member for Southend, East (Mr. Taylor) for his support this evening. I know I speak for him in many of the things I have to say. Southend health authority is gravely underfunded to the tune of about £6 million a year. Yet it is in a region that is overfunded. That is causing much concern in Southend. How can we manage when we are £6 million short per annum?
To give a little background to the North-East Thames regional health authority, it has five medical schools, more than any other region. Because of boundary changes in 1974 and 1982, the Middlesex hospital, University College hospital and the Royal Free came into that health region. As a result, we have nine radiotherapy units and we have had many staffing problems with senior registrars. It is the London end of the region, not the Essex end and not Southend in particular, that needs sorting out. It is totally wrong that, through an accident of history and boundary changes, Essex should suffer and London should not be sorted out. Essex comprises half the population of the North-East Thames health authority and south-east Essex comprises half the population of Essex.
I referred earlier to the underfunding at Southend. That is due to the region's inability to tackle the problems in London. It is now ironic in the extreme that the region, in trying to rationalise, rather than closing hospitals in London, is proposing to remove the radiotherapy unit from Southend. I know that my right hon. Friend the Member for Southend, West (Mr. Channon), the Minister for Trade, will agree with my comments. I am delighted that he is present this evening. I realise fully that his ministerial office precludes him from speaking on the issue this evening. However, I believe that I shall be saying many of the things that he would wish to say.
With nine centres for radiotherapy treatment, six of them lie in a four-mile radius on the western edge of the region. The two that lie to the east are Southend and Colchester. It is clear that these locations are not ideal, but the North-East Thames regional health authority proposes to keep four out of six of the London radiotherapy centres and to close both the Essex centres. It is proposed to open a new one at Broomfield near Chelmsford. Perhaps we need to have a radiotherapy centre in the middle of Essex, and perhaps at Broomfield, but not at the expense of Southend.
The four units that will be left in London provide treatment for patients in the North-East Thames region and
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for patients in the three other Thames regions that join with it. I understand that 75 per cent. of the Middlesex hospital's patients come from outside the region. Perhaps it would be fair to conclude that the underfunding that the Southend health authority has to endure is caused to a large extent by the fact that on the western edge of the region we are treating patients from other regions and not receiving any recompense for so doing.
What is the solution to the problem? I believe that it is to have a full cancer treatment unit at Southend. However, it appears from the report that the Southend option has not been evaluated fully, despite the fact that the team points out that the least expensive option would be to maintain and improve a centre outside London.
The centres that it is recommended should remain open are the ones which involve patients having to travel a long way to receive their treatment. Patients have to travel 61 minutes on average to receive treatment at the Middlesex hospital. The average travelling times for patients receiving treatment at the London hospital, St. Bartholomew's and the Royal Free are 55 minutes, 47 minutes and 37 minutes respectively. Yet the North Middlesex hospital, where the patients in the catchment area have to travel only 33 minutes, will be closed. At the Southend hospital, with patient travelling time of only 35 minutes, the radiotherapy centre is also proposed for closure.
It is proposed in the report that the patients from Southend should be transferred to Broomfield or to London. It is acknowledged that such transfers will involve long journeys because it is proposed in the report that hostels should be provided for those who have to travel these long distances.
It is also mentioned in the report that if the centre were at Southend it would be difficult for half the people in the catchment area to reach the hospital. The converse is that half of those in the catchment area find it very convenient to travel to the Southend hospital. The proposals will merely reverse the two halves of the catchment area.
The report has been described by the medical consultants at the Southend hospital as a waste of £80,000 of public money. It is riddled with errors. There are pages of errata and I can still find some factual and numerical errors that are not listed. It is said that the exercise is not a cost-saving one. If it is not, goodness only knows what its advantages are.
When the team set about reviewing therapy treatment in the North-East Thames region, no consultant surgeons were on the review team, nor a consultant haematologist, despite the fact that both groups of medical experts provide a considerable proportion of the cancer treatment in Southend and elsewhere. It is not surprising that the report was rejected unanimously by the medical staff at Southend hospital.
There has been no consideration given, as it appears in the report, to cancer treatment overall in London. As I have said, in London four regional health authorities come together. It would surely be sensible to consider the London provision in total rather than a quarter at a time. Yet we learn that the same team from Coopers and Lybrand will be undertaking another survey for North-West Thames, again in grand isolation. One performance index that is used in the report is the number of radiotherapy courses that each hospital provides, and conclusions are drawn from that. However, no account is taken of the fact that each hospital has a different number

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of linear accelerators. If we consider the number of courses per linear accelerator, we find that Colchester, which is to be closed, is top of the list. Southend is third or fourth. St. Bartholomew's and Middlesex, which are to be kept open, are at the very bottom. St. Bartholomew's has a usage of its linear accelerator of only 37 per cent. of the usage of all the other hospitals, when averaged out. It is clearly the wrong decision to keep these four London units open and to close Southend.
It is also assumed that we can have a regional cancer unit only where there is a CT scanner and so Broomfield is chosen, but that CT scanner is fully loaded and a new one will be needed soon. By the time the transfer takes place in 1991, it is thought that the CT scanner will be obsolete and that nuclearmagnetic resonance scanners will be used instead. So why can Southend not make a bid for one of those and keep the unit at Southend?
The report also assumes that 97 per cent. of Southend's patients will go to Broomfield and that 3 per cent. will travel to London, and yet all the communications in Essex are east-west, or from mid-Essex are radial into London. It is not practical to have communications between Chelmsford and Southend. For example, at present only 4·5 per cent. of patients from mid-Essex come into the Southend area for treatment.
The report ignores the fact that withdrawal of radiotherapy from Southend will have a detrimental effect on acute services at Southend hospital, indeed rendering some of them non-viable. Those of us who take an interest in Southend hospital are very worried that a loss of centres of excellence will mean that Southend hospital will no longer attract top consultants, not only in radiotherapy but in other medical specialties too.
There are no plans in this report to have gynaecology or ear, nose and throat units at Broomfield, but the report does say that the impetus which the regional cancer unit will provide should lead to fresh evaluation of these plans, meaning, presumably, that gynaecology and ear, nose and throat units will be provided at Broomfield in due course, again, perhaps, at the expense of Southend.
The report also says that the unit to be established at Broomfield will be of such a size that it will be twice as big as the units established in London. The Broomfield unit will, in fact, be as large as St. Bartholomew's and the Royal Free put together—far too large and impersonal.
So what conclusions do we reach? What should we do? I am certain that we should have a unit at Southend. We should obtain this by perhaps closing the radiotherapy unit at St. Bartholomew's or at the Middlesex hospital. By all means let us have a radiotherapy unit at Broomfield, but let it be the same size as the units that will exist in London: in other words, half the size proposed in the report. We can then retain the radiotherapy unit at Southend where we already have ear, nose and throat, gynaecology and haematology specialties.
Paragraph 33 of the report draws together criteria on which the location of the cancer treatment unit should be based. It says that there should be
"sufficient patient throughput";
"an adequate range of services including radiotherapy and medical oncology";
"modern machinery";
it should be on the site of a district general hospital; it should
"avoid excessive travel for patients";
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it should be on a site where clinical trials, teaching and training go on. Southend meets every one of these criteria. The report is not acceptable, and should not be accepted.
I would like to read a few extracts from a letter that I received only yesterday. I have received many letters on this subject, as have, I am sure, my hon. Friend the Member for Southend, East and my right hon. Friend the Member for Southend, West. Many have come from old people; many have come from those who have assisted others to travel for radiotherapy treatment but this letter is from a young mother of 31. I shall quote extracts from the letter of this cancer sufferer who attends Southend general hospital. She says:
"I am 31 years old and have two children … The proposed move of the Southend Radiotherapy Department to Broomfield has just added to the stress and anxiety that I and fellow patients have had to endure. I live five miles from the hospital and am fortunate to be able to drive myself to and from daily treatment. The total travel time is approximately thirty minutes which is endurable. I could never have coped with the ninety minute journey to Broomfield each day. I also have to arrange for my children to be cared for in my absence. I can only manage this with the kindness and goodwill of friends, as I have no relations living nearby."
She implies that, if she were away from home longer, she might not be able to find people to look after her children.
She says:
"I have received excellent service at Southend General from a very caring team of professionals … To have to stay in a hostel, as is proposed for Broomfield, away from those I needed most, would have considerably increased the anguish and distress I suffered … The travelling time for already very ill and distressed patients would be increased, bringing misery and hardship. I feel that the level of patient care would fall dramatically due to the size of the new unit. This will surely outweigh any financial benefits that a centralised unit would offset … I have not read one press report or spoken to any individual to date who is in favour of the scheme of moving cancer treatment miles away from the most heavily populated area of Essex."
Neither have I. I have not come across a constituent,
medical specialist, Member of Parliament, press reporter or anyone else who thinks that this is a good idea. I call upon my hon. Friend the Under-Secretary of State to reject the report, to think again, to leave the unit at Southend and to boost it.
11.16 pm
Mr. Teddy Taylor rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Member needs the, consent of the hon. Member for Rochford (Dr. Clark) and the Under-Secretary of State to intervene. If it is given, the hon. Member may proceed.
Mr. Taylor: I congratulate my hon. Friend the Member for Rochford (Dr. Clark) on raising this important issue. I assure the House that all hon. Members who are covered by the Southend health authority agree absolutely with everthing said by my hon. Friend.
I appreciate that this is a matter for the region. I am sure, however, that the region will bear very much in mind the views of my hon. Friend the Under-Secretary of State. I hope that he will confirm that the Government believe that health care is an exercise not just in accountancy but in the care of people. I hope also that my hon. Friend the Under-Secretary of State is aware of the profound resentment over many years about underfunding. That resentment will increase if this proposal is accepted.
I thank my hon. Friend the Under-Secretary of State for giving me a minute to say those words.
11.17 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): I am happy to have the opportunity to reply to the powerful points put by my hon. Friend the Member for Rochford (Dr. Clark) and the effective points graciously and briefly put by my hon. Friend the Member for Southend, East (Mr. Taylor). I am grateful to my right hon. Friend the Member for Southend, West (Mr. Channon) for being here tonight. I recognise the vows of silence and virtues that his position requires of him.
My hon. Friend the Member for Rochford pointed out that two thirds of the Adjournment debates so far this year have focused on the backwash of the review of cancer treatment services that has been commissioned by the north-east Thames region. Had I not been aware of that concern before, I certainly would be by now. I ask my right hon. and hon. Friends to pass on my assurance to their constituents that their concern is recognised and to pass on also my points about the situation, as I understand it, on the basis of a review called for by the region. I should like to correct a number of misconceptions.
It is important to understand why this review was put in hand. My hon. Friend the Member for Southend, East in his succinct remarks made reference to the financial issues. I hope it is accepted that the idea that the review was instigated simply to save money is not correct. The basis for the review was to look at the way in which the services, including radiotherapy, for people suffering from cancer are currently provided within the region's area, and to see whether those services could be improved. I take the point made by both my hon. Friends about the quality of service to their constituents being the point at issue. This is why the review was launched, and the review and then the region must achieve the best solution.
At this stage it is not for me to say whether the report has got it right. I am well aware that some people hold the view that the report has not got it right. I am bound to say I am not too impressed by the fact that my hon. Friend the Member for Rochford suggested that one or one or two press reporters said the review had got it wrong. I am not impressed by their opinion, but I am impressed by the worries expressed by my hon. Friends and their constituents and it is important for that to be taken into account.
Dr. Michael Clark: And the medical profession.
Mr. Whitney: I will certainly come to that: that must be taken into account. I have no doubt that our proceedings tonight and on Monday will be taken into account by the regional health authority. The need for a review of the service was clearly set out in the regional strategic plan published in July 1984. I hope my hon. Friends will agree that this approach as a principle must be right.
We are looking for a continually improving Health Service and that is why we continue, in real terms, to put more of the nation's resources into the Health Service. Since 1979, 20 per cent. more in real terms has been devoted to the Health Service, and the projection for the next financial year is that our increase will probably be 2 per cent. above the rate of inflation. Our commitment to devoting an increasing amount of resources to the Health Service is clear, but we must also look at the way those resources are used, or the service will stagnate. This often means that changes are required and, of course, changes
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are unsettling and sometimes difficult. I hope that none of us will feel that the Health Service has no right to debate such issues. That must be what a sensible service is about. This review was to look at exactly the sort of service that is needed.
The report argues the medical case for concentrating the specialised cancer services. I suggest to my hon. Friends that it is important to accept that concentration of specialised services, including radiotherapy, into specialised centres. The report believes that would improve the quality of care and the service to patients. That is the first issue to be debated: is the report right about that?
It may be that some of my hon. Friend's medical consultants and specialists in Southend did not agree with the conclusions. I would certainly not say they are wrong, but it is fair to recognise that the medical chairman of the review team, Professor Whitehouse, is a distinguished specialist in the field. He is the professor of medical oncology at Southampton university. His conclusion and the conclusion of his team was that there should be five specialised centres, compared with the existing nine radiotherapy units. Should there be five? I am not saying whether there should be or not, but if so, where should they be?
That leads us to yet another difficult issue. There are special cases which have the problems of accessibility to which my hon. Friend the Member for Rochford referred tonight and to which my hon. Friend the Member for Hornchurch (Mr. Squire) referred on Monday night. That matter will be taken into account when the regional health authority considers the results of its working party.
Many of the services needed by cancer patients can and should be provided in every district. The report is clear about that. My hon. Friend the Member for Rochford read a letter from his lady constituent. I do not know the details of her case, but to reassure her I ask him to tell her that this is not a matter of the elimination of a service.
We are talking about specialised services, and by definition, they cannot be everywhere. It is not a matter of resources. It makes no more medical than economic sense to provide the degree of specialisation about which we are talking. Services such as radiotherapy must be established to serve a relatively large population to attract sufficient patients to enable clinicians to sustain and develop their expertise. Too wide a dispersal of facilities and staff, and such expertise is not developed and the increasingly high standard of patient care for which we are looking is not achieved. That is one of the problems that must be tackled by the RHA. It is one with which the review team sought to deal, but clearly not to everyone's satisfaction.
I hope that my hon. Friends accept that a valid exercise was conducted. A balance must be struck between poorer access with greater travel problems and a better service. This is not merely a matter of finance.
It is not for me or my right hon. Friend to make a judgment on this case. My hon. Friends will recognise the process. The report was put out to public consultation in September 1985 and the period for comments finished at the end of the year. The health authority's working party has been established and the health authority will consider its findings in the spring.
If the RHA agrees to changes—those recommended or others arising from the full consultation and the debate, of which this is part—then in the usual way there will

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be local consultation on any changes to local services or closures. Again, in the usual way, if any of the proposals are opposed by any of the relevant community health councils then the matter will be referred, via the RHA, to my right hon. Friend the Secretary of State for a decision. In those circumstances, I am sure that my hon. Friends understand that it would not be appropriate for me to comment in detail on the proposals at this stage.
It must be right that regions can launch reviews and examine better ways of producing a higher standard of specialised patient care in any faculty.
My hon. Friends the Members for Rochford and for Southend, East referred specifically to Southend's financial position. In resource allocation working party terms, Southend is an underfunded district in an overfunded region. My hon. Friend the Member for Rochford referred to £6 million. I understand that that figure is the amount by which it is estimated that Southend is below its target. In other words, it is 17 per cent. below its target. The latest revision shows that Southend is about 5 per cent. below its target, or £2 million below it on an
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allocation of £40 million. Be that as it may, the region is firmly committed to the policy of securing a fairer distribution of resources between its districts. I understand that in the financial year 1985–86 the region has allocated extra funds—about £500,000—to Southend. I hope that that is accepted.
My hon. Friend the Member for Rochford referred to London needing to be sorted out. Perhaps it does need that. The movement of RAWP towards ensuring that there will be greater equality in terms of services and provision is recognised and accepted, but it has to be brought about at a measured and tolerable pace, otherwise the consequences, even within an expanding budget, given the increase in the number of doctors and nurses and the increase in pay levels, in real terms, that we are achieving—
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-nine minutes to Twelve o'clock.

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

Courts: Deaf and Dumb Defendants
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 what means are available in courts to enable deaf and dumb defendants to communicate.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, in the magistrates' courts, it is for the court to ensure that it can communicate adequately with deaf and dumb persons appearing before it. Where a deaf and dumb defendant does not himself arrange for the services of an interpreter, magistrates' courts make use of interpreters provided through the agency of local directors of social services and voluntary bodies such as the Royal National Institute for the Deaf.
In the crown court, interpreters must be provided by the parties.
Provided the court staff are given sufficient warning of the needs of a party or a witness who is so disabled, arrangements can generally be made to ensure that that person is able to sit as close as possible to, and with an unobstructed view of, the judge and the witness box.
Lord Campbell of Croy: My Lords, I am very grateful to my noble and learned friend for that full reply. Is it the clear intention that persons should be enabled to follow immediately proceedings on charges against them in a court if they are suffering from this kind of handicap? Is my noble and learned friend aware that if that is so, and if that is achieved, this would be achieving one of the aims of the International Year of Disabled People 1981, with which a number of Members of this House were closely involved?
The Lord Chancellor: My Lords, I am not absolutely sure that I fully understood my noble friend's question. It is of course absolutely vital that if a party or a witness is suffering from a disability the court should be made aware of it by whomsoever has the duty of seeing to such things. In the case of the crown courts, I should think it would be the legal aid representatives, solicitors and counsel representing the afflicted party or the party wishing to call the witness. This is absolutely vital. I had not considered this matter as involving our international obligations, but I shall certainly consider what my noble friend says. It is particularly unfortunate in some cases where the disability is such that the person afflicted is not able to plead. There was one particularly distressing case recently which my noble friend may have had in mind.
Lord Elwyn-Jones: My Lords, is it not the case that, in practice, zealous care is taken to try to meet the situation and position of handicapped persons such as the deaf and dumb? That has been the practice in the courts certainly throughout my career at the Bar, and indeed before that. One got the impression that broadly speaking the arrangements were satisfactory. As to whether any of the new techniques in regard to assisting the deaf might be attempted in the courts if they prove effective, no doubt that could be done and there could be a trial process. But, generally speaking, is not the situation on the whole satisfactory as it now stands?
The Lord Chancellor: My Lords, the noble and learned Lord's question used the words "on the whole", and to that I think I can give an unqualified affirmative reply. But the appalling thing which actually happened in the case which I have in mind (and it happened in the course of the past few weeks) was that two questions arose on plea. The first was whether, to use the technical language, the defendant was mute of malice or mute of the visitation of God. That is the phrase. It was found that he was mute of the visitation of God.
The question then arose whether his disability was so severe as to render him unable, even with an interpreter, to understand the nature of the proceedings as they went along. The jury found that he was unfit to plead for that reason. The judge thereupon had no option but to send him to a hospital under the section of the Act, but there was no place available. It then followed that under a section of a separate Act he had no option but to send the poor fellow to prison, where he spent at least 24 hours. The judge remedied that as soon as he could. He incurred from the press and others a great deal of unjustified criticism, because he was simply obeying and applying the law. I think that the distress of the public and Members of Parliament was fully justified, and so did the judge. On the second occasion when the defendant appeared before him the judge described his situation as intolerable, and I think it was.
The first thing that happened when I had these letters coming in from another place was that I copied the correspondence to the Home Secretary, and I am sure that he will look into the matter. In this particular case, although I agree that the arrangements are usually satisfactory, this obviously went grievously wrong. The man was charged with a relatively trivial offence and he went to prison, which would never have happened if he had not been suffering from a grievous disability.
Lord Campbell of Croy: My Lords, is my noble and learned friend aware that I was of course conversant with that case, which had been brought to my notice, although I did not try to go into it in detail? Is he also aware that, as regards the question raised by the noble and learned Lord, Lord Elwyn-Jones, sign language with an interpreter is normally quite adequate? However, it is of course essential that enough notice be given beforehand by legal advisers or helpers.
The Lord Chancellor: My Lords, I absolutely agree that if the only disability from which the deaf and dumb person is suffering is being deaf and dumb,

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communication can be set up by means of an interpreter, with proper notice, and that is perfectly adequate for the conduct of a trial. However, if the effect of the disability is such that even with an interpreter the person concerned will be unable to understand the nature of the proceedings, then fitness to plead enters into the question. It was at that stage that things began to go wrong.

Wage and Salary Increases: Policy
2.45 p.m.
Lord Grimond: 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 their policy that wage and salary increases should remain below the rate of inflation applies to the salaries of chairmen and directors of companies, top management, and the higher grades of the Civil Service and in the nationalised industries.
Lord Brabazon of Tara: My Lords, pay for everyone, including these groups, should depend on what their employers can afford and what is necessary to recruit, retain and motivate staff of the right calibre to do the work effectively.
Lord Grimond: My Lords, does the noble Lord the Minister not agree that there were very clear statements from the Government that various settlements should remain below the rate of inflation? May I ask the Minister directly whether the Government intend to apply that policy to those people for whom they are themselves responsible? If the Government are expecting the lower paid to show restraint, surely it is for the well paid to show an example.
Lord Brabazon of Tara: My Lords, what we are interested in is not low pay but low unit costs. Therefore, if a company or employees of that company can justify salary increases through increased productivity and profitability, that is all well and good. As regards the workers for whom the Government are responsible, the Top Salaries Review Board reported and its recommendations have been taken into account in stages. The Top Salary Review Board was started in 1971 and it has been the policy of successive governments since that time to apply its recommendations.
Lord McCarthy: My Lords, does the noble Lord not agree that there is a basic inconsistency in what the Government are saying? In general terms they say that real wage improvements destroy jobs—that is what the Chancellor is saying all the time—but in particular cases the Government give increases which are far above increases in the cost of living. Very significant real wage increases are given to people at the top of the scale and then we are told that it does not destroy jobs. Where is the consistency, and how can the Government reconcile the inconsistency?
Lord Brabazon of Tara: My Lords, real wage increases will destroy jobs and real improvements in productivity will increase jobs. A 1 per cent. change in the average level of real earnings will, the Treasury estimates, in time make a difference of up to 1 per cent. in the number employed. As regards the people whom the Government employ, obviously, as I said in my original Answer, we must take into account what is necessary to recruit, retain and motivate those staff.
Lord Walston: My Lords, does the noble Lord consider that the Government are at the moment able to recruit, retain and motivate the teachers in their present jobs? Is he satisfied that the Government's policy is achieving their objectives in this respect?
Lord Brabazon of Tara: My Lords, I think the teachers' dispute is somewhat outside the terms of the Question on the Order Paper and it is certainly not something into which at the present time, while the two sides are at ACAS, I would wish to be drawn.
Lord Nugent of Guildford: My Lords, is my noble friend aware that the Government have a problem and they cannot get out of it by just quoting what they do for their own employees? Is he aware that very big salary or remuneration increases given to some of the heads of industry—sometimes 20 per cent., 30 per cent, or 40 per cent, increases in a year—really do shake public opinion, especially the opinion of their own employees?
Is my noble friend further aware that we all understand that there is an international market for this top talent, and that unless top people are paid in accordance with that then they may go abroad to America, Germany, or elsewhere? Is my noble friend also aware that, unless the Government take a view of this in talking to the heads of industry and ask them to restrain the very big increases that come from tune to time, they are undermining their policy of trying to keep wage claims at a lower level?
Lord Brabazon of Tara: My Lords, I tend to agree with my noble friend in much of what he says. Of course, many of these increases are as a result of links to the profitability of the companies involved. In those cases I should have thought that it is the shareholders of those companies who must decide whether their managements are being properly rewarded.
On the other hand, management must take into account that increases which they receive themselves, if they are of that order, will be taken into account when their own workforce puts in its pay claim.
Baroness Seear: My Lords, does the Minister agree that in fact it is not so much the payments in industry, high though they are in some cases, but quite extraordinarily high salaries that are being paid, often to very young people—relatively young people, at any rate—in the City of London, which are having an extremely disruptive effect on higher levels of pay throughout the Civil Service and industry?
Lord Brabazon of Tara: My Lords, the noble Baroness is quite right when she mentions the very high salaries which are being paid at the moment in the City of London. I think that this could be covered

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by what I said in my original Answer, which concerns the need to recruit, retain and motivate staff in that field. Whether, after all the changes that are due to take place in the City of London in the next year or so, all those salaries will continue to be affordable is anybody's guess.
Lord Williams of Elvel: My Lords, may I perhaps help the noble Lord by putting some figures on the categories that the noble Lord, Lord Grimond, has mentioned in his original Question? Inflation is at 5.5 per cent.; chairmen and directors, according to the Institute of Directors, up 11.1 per cent.; top management up, depending on whether you believe Charterhouse. Inbucon or Hay-MSL, between 11.5 per cent. and 15.6 per cent.; and the Top Salaries Review Board up 12.2 per cent. in the light of these figures, can the noble Lord perhaps give a more considered reply to some of the questions that have been raised in this House this afternoon; or are we to be told again that the top people can have their bread but the peasants are invited to eat cake?
Lord Brabazon of Tara: My Lords, that is not what I have tried to say in my replies at all. I have made it quite clear that the Government would like to see lower unit costs throughout industry, and through that an increase in profitability and productivity, and through that an increase in jobs. As I have said, it is the responsibility of the companies themselves to decide whether it is worth giving their top employees large salary increases and what effect it will have upon the rest of their workforce.
Lord Boyd-Carpenter: My Lords, are not the figures given by the noble Lord on the Front Bench opposite a trifle misleading, inasmuch as they ignore the fact that in the case of the people concerned at least 60 per cent. of these increases are then taken away in taxation?
Lord Brabazon of Tara: My Lords, my noble friend is quite right. I would also say, as I said to my noble friend Lord Nugent, that a lot of these increases are of course linked directly to the profitability of the companies concerned.
Lord Mackie of Benshie: My Lords, can the Minister say, in view of his desire for lower unit costs, what the Government are doing to motivate the workers who can promote lower unit costs and what measures they are taking to spread the profit-sharing schemes which have had such a big effect in improving efficiency in so many companies?
Lord Brabazon of Tara: My Lords, this Government's record in encouraging profit-sharing schemes and employee share ownership is second to none. I believe that at the time when we came into office in 1979 there were about 30 companies with employee share ownership schemes; and I think I am right in saying that there are now about 1,000.
Lord Grimond: My Lords, since wage and salary restraint is said by the Government to be absolutely central to their economic policy, will they consider giving rather more positive advice to these people in
1072
industry who are taking increases of anything up to 100 per cent.? Can they give a rather more definite indication of what they themselves intend to do for the salaries for which they are directly responsible? Are they to be limited to inflation or are they not?
Lord Brabazon of Tara: My Lords, I think I have already made clear what the Government's views are on this matter. As regards the salaries for which the Government are responsible, they must of course be limited to what the taxpayer can afford, and if one pays more than the rate of inflation then inflation will continue to go up.

Westminster: Experimental Bus Lanes
2.55 p.m.
Lord Orr-Ewing: 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 are satisfied that the GLC's recent road restrictions outside Parliament which reduce traffic from Millbank from three lanes to one are in the public interest.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, the GLC is solely and entirely responsible for these experimental bus lanes, which are not yet in operation. I understand that the GLC considered that the benefits to London from the scheme would be considerable. We do not necessarily agree.
Lord Orr-Ewing: My Lords, is my noble friend aware that on returning to Parliament after the Recess we observe that white lines have been scattered all along the roadway? We get the impression that these were painted by the GLC particularly to snarl up traffic approaching Parliament Square along the Embankment. Were the police consulted about this scheme? If so, what were the findings of the police, and have these been incorporated in the scheme which has been devised?
The Earl of Caithness: My Lords, it is a duty of the GLC to consult the police, but I think that in this instance it did not take the police's advice. The police expressed the view that the lanes would cause congestion for general traffic and make it difficult for them to ensure free access to Parliament, and the GLC thought differently. As to whether this was a deliberate attempt to snarl up traffic, I think we are all entitled to our own opinion on that.
Lord Underhill: My Lords, does the Minister agree that it is very unfortunate that on yet another occasion we have Questions in this House on road traffic schemes before there has been an opportunity for them to be experimented upon and judged? We have had that sort of criticism before about schemes which eventually have proved to be highly beneficial to all the people in London. Is it not a fact that the bus lanes in this case follow strictly the guidelines laid down by the Department of Transport? Is it not also the case

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that some 10 per cent. of London Transport's bus fleet goes round Parliament Square and that there is vast congestion which needs to be looked at? Are these not important questions? Is there not also the question—
Lord Denham: My Lords—
Lord Underhill: My Lords, I beg the Chief Whip's pardon. The Chief Whip should not endeavour to interrupt when noble Lords have not quite finished their speeches. Is it not also the case that the Government believe in cost-effectiveness and that previous bus priority schemes have been cost-effective to London Regional Transport?
The Earl of Caithness: My Lords, as to whether it is unfortunate to have Questions, that is not in my hands. Noble Lords are entitled to put down any Question, and we shall do our best to answer them. As to whether this will relieve congestion, one of the reasons we do not think that it is necessarily a good idea is that Westminster City Council has recently announced a comprehensive review of traffic and environmental conditions in the Parliament Square area which my department is jointly sponsoring, and it would be better to await the outcome of this before proceeding.
Baroness Gardner of Parkes: My Lords, can my noble friend confirm that Westminster council is actually opposed to these present markings which have been placed on the road?
The Earl of Caithness: My Lords, that is my understanding, and we look forward to 1st April when Westminster City Council takes on this responsibility.
Baroness Macleod of Borve: My Lords, may I ask my noble friend the Minister whether he said that these particular signs were temporary? If they are temporary, how long does he expect them to last?
The Earl of Caithness: My Lords, on 1st April these bus lanes and these signs—in fact, they should be covered up, but apparently the wind has taken the blacking-out markings off the signs—will be the responsibility of Westminster City Council, and I hope that it will make a decision fairly speedily.
Lord Orr-Ewing: My Lords, can anything be done during the death throes of the GLC to stop it initiating schemes which are considerable in terms of expenditure, at the expense of the hard-pressed ratepayers? What can be done to stop it carrying out expensive schemes of this kind, which in fact are devised to snarl up the traffic? Is it not true that there is no need to have an experiment? Less traffic will travel down one lane than travels down three lanes, and that is very obvious from looking at the layout of the white lines which are now in front of Parliament.
The Earl of Caithness: My Lords, there is a restriction on what the GLC can do. Parliament agreed that the limit of any scheme should be £15,000, and that if it were above £15,000 the permission of my right honourable friend the Secretary of State for the Environment would have to be sought.
Lord Wallace of Coslany: My Lords, is the noble Lord possibly aware that some of the white lines might be an overflow of whitewash from No. 10 Downing Street?

Public Expenditure
2.59 p.m.
Lord Wolfson: 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 state the total amount of capital investment they plan for the year 1985–86 and indicate the proportion being financed by public borrowing, surplus asset sales, privatisation issues, and taxation receipts from capital transactions.
Lord Brabazon of Tara: My Lords, the last public expenditure White Paper showed total public sector capital spending of £22 billion in the plans for 1985–86. The estimated outturn for the year will be shown in the public expenditure White Paper to be published later today. It is not possible to link particular forms of public spending, such as capital investment, directly with particular forms of finance.
Lord Wolfson: My Lords, I thank the noble Lord for his reply, which helps to put in some perspective the intriguing matter of the family silver! It is normal business practice to produce a balance sheet and to separate capital transactions from revenue items. That is governed by company law and tax statute. Should not the same relevant information be provided to the public in the annual Budget Statement?
Lord Brabazon of Tara: My Lords, it has been the policy of successive governments, for as long as history goes back perhaps, not to hypothecate capital and current expenditure. However, if one looks through the Budget Statement one can quickly see the total amounts of money which have been raised from the various items about which the noble Lord asks in his Question.
Lord Morris: My Lords, is my noble friend aware that he is absolutely right? This has been the custom since the days of William Pitt. But does he think that it is relevant in 1986?
Lord Brabazon of Tara: My Lords, I am most grateful to my noble friend for giving me the date when this started.
Lord Williams of Elvel: My Lords, is the noble Lord aware that in his Answer he has given support to the Labour Party position, which is that we should have a national balance sheet, as I think the noble Lord, Lord Wolfson, implied, and the public sector borrowing requirement should be projected in the function of that balance sheet? Is he also aware that we in our party are grateful to him for his support for that concept? I hope very much that the Government will pay attention to what the noble Lord said and that he will be able to give us those assurances.
Lord Brabazon of Tara: My Lords, in case in my original Answer I gave support to the party of the noble Lord opposite, I shall have to read carefully what I said and perhaps correct myself.
Lord Taylor of Gryfe: My Lords, can the Minister tell us whether the advice of the noble Lord, Lord Wolfson, will be observed in making a clear distinction between using the receipts of the sale of surplus assets and their being distributed in some form of taxation relief? Will he commend any public company which sells capital assets in order to realise the payment of dividends?
Lord Brabazon of Tara: My Lords, as I said, we have to look at the Budget as a whole. If the noble Lord wishes to do that, over the years since this party has been in office, he will find that the amount of fixed public capital investment has exceeded the receipts of privatisation some 20 times.
Lord Ezra: My Lords, can the noble Lord say how the quantum of public investment that he has indicated for the United Kingdom compares with that of the major countries in the European Community?
Lord Brabazon of Tara: Not without notice, my Lords.

Business
Lord Denham: My Lords, with the leave of the House, I should like, as usual, to say a word about the two short debates this afternoon standing in the names of my noble friend Lord Campbell of Alloway and the noble Lord, Lord Jacques. It is customary in short debates that the mover is allowed approximately 15 minutes, that the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate and that I should advise the House as to the maximum time that should be applied to each other speech so as to avoid the risk of depriving others. That is not really necessary in either debate this afternoon, as such maximum would be 14 minutes in each case, and I know that the House would appreciate it if speeches were kept to a brevity in keeping with the spirit of these short debates.

Codes of Practice and Legislation
3.4 p.m.
Lord Campbell of Alloway Lord Campbell of Alloway rose to call attention to codes of practice as affecting the incidence of legislation; and to move for Papers.
The noble Lord said: My Lords, this Motion calls attention to a situation whereby as a matter of practice, maybe on grounds of administrative convenience, Royal Assent is given to a Bill authorising the Executive to introduce a code of practice before the proposed provisions of that code of practice have been tabled; and so consideration may not be given in either House to which provisions should be embodied in which of the various types of code, the disparate incidence of which has been settled by the judiciary and settled by reference to the construction of the trigger clauses which introduce
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such codes. In that, the legislative role of Parliament is slighted, and indeed spent, by the time the code is laid for approval or for activation by statutory instrument.
The revisory role of your Lordships' House is hobbled and inhibited. The judiciary, fully conscious that administrative convenience and justice are often not on speaking terms, cannot usurp the role of Parliament even if that role has been pre-empted. A constitutional, a procedural and a legal problem for the certitude of law is infected with incipient erosion, because it is the terms of the trigger clause and not the provisions of the code which are determinative of legal effect. So any assumption that the codes are enforceable, save in the rare, exceptional cases that I shall deal with—save in those cases where the form of the trigger clause so provides—is wholly illusory. Apparent rights either lack legal significance or are subject to unchallengeable discretion.
That state of affairs is a matter of current concern to the Statute Law Society, to my noble friend Lord Renton, its president, and to another distinguished member of that society, that éminence grise of all matters procedural in your Lordships' House, the noble Lord, Lord Henderson of Brompton, at whose suggestion this Motion was tabled. What is to be done about it? Ought there to be some revision of procedures? Ought there to be some form of scrutiny at the drafting stage of Bills; or ought there to be perhaps a committee set up under the authority of the Lord Chancellor of the day which could look at the proposed revisions and the form of the trigger clause proposed and perhaps make recommendations to both Houses of Parliament?
It is upon such questions as those that the noble and learned Lord, Lord Elwyn-Jones, raised the curtain. That was in the debate on the code under the Police and Criminal Evidence Act. The noble and learned Lord was of course primarily directing his mind to Section 67(11) of the Act, a common form and type of trigger clause in current usage. But his observations, which were of great importance and authority, were also of general application. The noble and learned Lord, as one would expect, went straight to the heart of the problem. He contrasted the authority of codes with that of statutes. He questioned the efficacy of remedies available to individual citizens, and he reminded us that reliance upon these codes was representative of a modern and unhealthy trend towards rules of indeterminate status.
There are, so far as I can judge—there are no books on this—five main types of trigger clause with disparate effect, two of which give rise to particular concern. The first which gives rise to concern is the "shall have regard to" type of clause directed to local authorities in the realms of public administrative law. An example of this is the Child Care Act 1980 where the authorities must give consideration to the claims of the wider family, the natural parents, of a child in care. That has been judicially interpreted by no less an authority than the Appellate Committee of your Lordships' House, and therefore, inevitably, is right, as meaning that such persons have no right whatever to be heard and that
"the code lacks any legal significance".
That is the noble and learned Lord, Lord Scarman's, opinion.
Similar considerations arise with the code under the Housing (Homeless Persons) Act; and a similar conclusion was reached by the Court of Appeal. That case is at present under consideration by the Appellate Committee of your Lordships' House. Similar considerations arise in the context of the code that is to be issued by the Mental Health Act Commission. Why do I say "similar"? Because if you compare the trigger clauses, Section 12 of the Act of 1980 and Section 18 of the 1983 Mental Health Act, they marry in the conclusion that the codes lack legal significance. We shall have the great advantage of hearing my noble friend Lord Colville of Culross as to the situation of the code under the Mental Health Act. I shall not seek to pre-empt anything that he might say.
But can it be right, on any law, that measures designed for the protection of the disadvantaged should lack legal significance? Can it be right that the only man in the field of enforcement shall be the longstop of judicial review on grounds of perversity? Ought we not, perhaps, even by analogy with the immigration regime, to enlarge the scope of judicial review? Section 3 of the Immigration Act 1971 does give the rules legal effect. By analogy, some form of new trigger clause might be devised to deal with the situation.
The second type that gives rise to concern is the type with which the noble and learned Lord was dealing—the common form in current usage. That type is admissible in civil and criminal proceedings. Indeed, if it appears to the court or tribunal to be relevant to any question, it is provided that it shall be taken into account in determining that question. I say "common form". Some examples of codes are the five codes in employment law under the Act of 1975 and the Act of 1980, others under the Sex Discrimination Act and another under the Race Relations Act. There are many of them. The judicial approach to this type of code means, in one phrase, that rights are subject to unchallengeable discretion. Although it is accepted that the codes should be regarded as an integral part of legislation, it is said judicially that they form no principles of law and only provide what are standards of good practice and behaviour. No appeal may be entered on the ground that the court or tribunal failed,
"to take into account the provisions of the code".
Only in cases of perversity, where the decision flies in the face of commonly accepted standards of fairness, will the decision be quashed on judicial review.
True, much of that judicial approach was a result of what was said by the Vice-Chancellor in a case concerned with the code applicable to dismissal on grounds of redundancy which was introduced under paragraph 46 of the code and which, in turn, was introduced by Section 6 of the Employment Protection Act 1975. But to this type of code in common usage the reasoning is of general application.
There are, in contrast, two other types of code both of which give legal effect, one in civil proceedings and the other in criminal proceedings. The third type, the one in civil proceedings, may be relied upon in civil proceedings as tending to negative or establish liability. The sole example that I have been able to find is the Highway Code, introduced by the trigger of Section 35(5) of the Act of 1972. This enabled the
1078
noble and learned Lord, Lord Denning, to elevate that code into principles of law of general application in the field of contributory negligence in road accident cases. But it is the rare case, the exceptional case, and, so far as I know, the only example.
In criminal law, which is the fourth type, there is the code where breach constitutes an offence. It is in a sense full-blooded subordinate legislation. It gives rise to no cause for concern. Examples are the Health and Safety at Work Act 1974, clothing and equipment, or the Radioactive Substances Act 1948, transport, and handling of these substances. A breach of those codes is a criminal offence.
The fifth type is the type of code where there is no legal effect at all, such as that proposed, for example, under Clause 21(2) of the Animals (Scientific Procedures) Bill, or such as has been implemented for the convenience of the disabled under the Transport Act 1985. Within this type one has various sub-categories of consumer codes with which there is not time for me to deal. There are also codes which have no statutory derivation. Inevitably certain questions arise. There is not the time in introducing this debate to deal with them.
In conclusion I would only wish to say that the problems under discussion in this debate arose in a most acute form at the Committee stage in your Lordships' House during the Animals (Scientific Procedures) Bill and induced a veritable miasma of confusion. Hansard shows that the hope was expressed that today's debate in your Lordships' House might serve as some measure of clarification as the Report stage of that Bill is tomorrow. Such is the spirit in which I beg to move. My Lords, I beg to move for Papers.
3.22 p.m.
Lord Denning: My Lords, I should like to thank my noble friend Lord Campbell of Alloway for introducing this subject, which is important constitutionally and legislatively. I gather that this was at the suggestion of the noble Lord, Lord Henderson of Brompton, whom we all regard so highly in this field. However, I should just like to say a word on my experience in dealing with codes of practice. The first one which comes to mind is the first in date, the Highway Code. That came into being in 1930 by the first Road Traffic Act. Then it was proclaimed and left to the Secretary of State to be able to issue directions for the guidance of road users. He did it by virtue of the Highway Code which all your Lordships will have seen.
When I was sitting trying these cases I had the Highway Code on the desk before me and was always looking to see whether the man ought to have held out his hand as a signal or not. This question always arose, for instance, whether it was a case of a man driving without due care and attention, or whether it was one of negligence in driving. The statute could not deal with all the details which would arise in the ordinary case of road users and therefore Parliament—and I think rightly—issued a code of practice, a Highway Code, for the guidance of individuals using the road. That was not a statute which was imperative and for which one could be punished for disobeying, but was

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for guidance. It could be taken into account by a magistrate or judge trying a civil or criminal case. It could be taken into account and is therefore not without legal significance. It is an important element in deciding the case. That was the function of the code and, so far as my experience is concerned, I should have thought that worked admirably.
Similarly with the industrial relations code, going back to 1971. Other parts of that Act were repealed, but this part, the industrial relations code, was excellent. The statute could not provide details as to how management was to deal with men, but it authorised the Secretary of State to issue a code for the guidance of management and men. For instance, if a man complained of wrongful dismissal one could look at the code to see whether the employer ought to have had a word with him beforehand or not. The industrial relations code governed the details of the matter which could not be dealt with in the statute. It was for guidance, and was therefore of relevance. It was of legal significance, but on the other hand it was not a statute itself.
That is my experience as a judge of these codes of practice. The present and latest one is in the Police and Criminal Evidence Act, which we discussed a little while ago. Again, the right was given to a constable to search people whom he thought he ought to search. Again, the statute could not go into details about that. Guidance was given by a code of practice, which was issued after much consultation all round.
The important thing is that these codes give guidance in simple, intelligible language—which they ought to do because the layman has to read them—not in the somewhat stilted or obscure language of a statute. From my practical experience, I would say that so far as that type of code is concerned, this is a good legislative device for helping the courts to come to a just decision in the cases before them.
My noble friend Lord Campbell of Alloway has referred to the other point. There are the series of statutes which give not only guidance but say that the body of magistrates or the council—whatever body it may be—shall have regard to this, that or the other. My noble friend suggests that those have no legal significance at all. However, I would say—and I can cite dozens of cases on this—that if an administrative body of that kind does not have regard to the matters to which by statute or by code it ought to have regard, then that is a ground for interfering with that body. I should have thought that that was not without legal significance. It is of legal significance—they shall have regard to that.
I need not go further because the whole question is as to whether or not this is a proper legislative device to deal with the practical problem when one has to deal with masses of detail. One cannot deal with them in a statute. One cannot even deal with them in a regulation.
Finally—I know that my noble friend Lord Campbell of Alloway knows all about this—let us take our planning legislation. A planning committee has to decide whether or not there is a material change of use. One will not find any help in the statute. The planning department has issued dozens of circulars to give guidance; and it gives guidance to the planning
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committees. Those circulars have no legal significance whatsoever but they are most useful to those in the planning committees who have to deal with them. In other words, there is a whole field in which guidance can be properly given, I suggest, by way of codes of practice and the like. Therefore, although I warmly welcome this discussion, for myself I think that the legislature is not doing at all badly at the moment.
3.29 p.m.
Lord Airedale: My Lords, following as I do the noble and learned Lord, Lord Denning, I am reminded that after the Lord Mayor's Show follows the dustcart. But I can at least safely join with the noble and learned Lord in congratulating the noble Lords, Lord Campbell and Lord Henderson, on providing for us this interesting topic for debate this afternoon.
My particular interest in this subject at this time is that it was I who ventured, during the Committee stage of the Animals (Scientific Procedures) Bill shortly before the Christmas Recess, to put forward an amendment to incorporate verbatim into that Bill the "trigger clause", as it is called, of the Police and Criminal Evidence Act. Your Lordships will remember that that is the clause which makes the codes of practice, wherever relevant, admissible as evidence in court in either civil or criminal proceedings. That seemed a fair and reasonable position to take. It can operate either in favour or against either party to a dispute. On the one hand, it can be said to the person accused, "You had the codes of practice before you. You chose to disregard them. You took that risk and you must face the consequences". On the other hand, the accused person may be able to say, "I faithfully observed the codes of practice which I was required to observe. What more could you expect me to do in the circumstances?"
I received a good deal of sympathy from the Minister, the noble Lord, Lord Glenarthur, for the amendment which I was seeking to introduce. However, the noble Lord has since written me a very detailed letter in which he sets out the reasons why he thinks that a trigger clause of this kind is not appropriate to the animals Bill. Having explained his reasons—and I shall not trouble the House with those reasons—we come to the sentence which says:
"It would therefore be inappropriate to insert in the Bill a reference of the sort proposed in your amendment. In addition it is in any case unnecessary since there is nothing in the Bill which bars the admission of codes of practice [as] evidence in civil or criminal proceedings, and if they are relevant to an issue arising during proceedings they could be taken in evidence."
If that is a statement that it is a general principle that codes of practice, where relevant, can be used in evidence in court, then one wonders why we insert a trigger clause in a particular statute at all. Is one not therefore going to mislead people who will say, "Well, there is no trigger clause in the animals Bill and therefore the codes of practice under that Bill are probably not admissible in evidence because if they were to be admissible Parliament would have inserted a trigger clause"? Therefore, I believe that we are in rather a muddle about this point. Let us either have a general principle which is widely accepted and understood or else, if we are to have trigger clauses, let them be put into every Bill in which they ought to be put.

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Let us suppose that the code of practice comes before the court. It is rather questionable as to whether or not it will be of much assistance to the court. At this point I am indebted to Messrs. Baldwin and Houghton of Brunel University for drawing my attention to part of the judgment of Mr. Justice Streatfeild in a case reported in The Times Law Reports of 1949. The case was called Patchett v. Leatham and it concerned various Home Office circulars. In the course of his judgment, Mr. Justice Streatfeild said:
"Whereas ordinary legislation, by passing through both Houses of Parliament or, at least, lying on the table of both Houses, is thus twice blessed, this type of so-called legislation is at least four times cursed. First, it has seen neither House of Parliament; secondly, it is unpublished and is inaccessible even to those whose valuable rights of property may be affected; thirdly, it is a jumble of provisions, legislative, administrative or directive in character, and sometimes difficult to disentangle one from the other; and, fourthly, it is expressed not in the precise language of an Act of Parliament or an Order in Council but in the more colloquial language of correspondence, which is not always susceptible of the ordinary canons of construction".
That seems to be a rather scathing indictment of some codes of practice.
It is perhaps not surprising that in those circumstances the courts show a disinclination to interfere in these cases short of finding a breach of natural justice or something as grave as that, in the same way as the courts are disinclined to interfere in cases of subordinate legislation where a Minister is given discretion. In that type of case the court will never substitute its own opinion for the opinion of the Minister, but will only interfere if it considers that the Minister has acted not far short of perversity—to borrow a word from the speech of the noble Lord, Lord Campbell.
We are beset by codes of practice on every side. There are procedural rules, like the prison rules; there are instructions to officials as to how they should perform their tasks, such as departmental circulars; there are voluntary codes of self-regulation exercised by financial institutions, professional bodies and sporting bodies, and some of them have the most swingeing powers. For example, a dentist or a jockey may have his very livelihood taken away and will have to submit to the particular disciplinary body which governs the affairs with which he is concerned. There are also the rules of practice, such as the extra-statutory rules applied, for instance, by the Inland Revenue in arriving at their decisions. There are many other instances of codes of practice.
If codes of practice generally can be said to be working more or less satisfactorily, in my view it is only because they rely to a large extent upon goodwill. Without goodwill any code of practice is liable to be very exposed, naked and defenceless. For instance, a departmental code of practice about picketing is not likely to survive unscathed a situation like the miners' strike of 1984.
I suppose that any good speech should arrive at some discernible conclusion. Judged by that criterion, I fear that I have failed this afternoon. I think that all that I have managed to do is to contribute one or two random thoughts to what is a very interesting topic.
3.40 p.m.
Viscount Colville of Culross: My Lords, I too am grateful to my noble friend Lord Campbell of Alloway for giving us an opportunity to discuss this question. As he accurately forecast, I should like to confine myself to one code of practice which is required to be prepared under Section 118 of what is now the Mental Health Act 1983. Let me just tell you Lordships what has to be done. The Secretary of State is told to,
"prepare, and from time to time revise, a code of practice"
which, in summary, is to guide all the relevant professional people,
"in relation to the admission of patients",
suffering from mental disorder,
"to hospitals and mental nursing homes",
and for their treatment while they are there.
Before the code is published there is a requirement to consult widely, and there is then a procedure which in fact was introduced in another place (which was the second House when this legislation was going through Parliament) on Report stage, right at the end of the parliamentary process, which requires copies of the code and any revision to be laid before Parliament under the equivalent of the negative resolution procedure, which is then spelt out because it does not have the benefit of the statutory provision. After that has been done, and provided that Parliament does not want it altered, the Secretary of State publishes the code as it is for the time being in force.
The Secretary of State, by statutory instrument, delegated the preparation of the draft to the Mental Health Act Commission; and for two years we have been struggling with this and I am sorry to say that this is what we have produced. It is written on a word processor, which makes it a little larger than might otherwise be the case, but it is 209 pages long and there are 25 pages of index by way of mitigation. It has been a formidable task, and I therefore come to this House fresh from the positive exercise of having to prepare a code of practice in response to the requirement of Parliament and the Secretary of State. Indeed, I wrote some of it myself. I do not know what will happen to that bit.
There are two things I should like to say about this. I take the point made by the noble Lord, Lord Airedale, that we ought to try to reach a conclusion. The first is the positive side of it. There was a tremendous amount of interest in the mental health legislation when it was going through both Houses in 1981–82, and there were a large number of matters suggested by noble Lords and right honourable and honourable Members of another place for inclusion in the legislation. We all know the pressures to put things in the Act. A great deal of this was resisted, and the legislation itself was kept much more simple than might otherwise have been the case by the idea of incorporating a great number of these matters in a code of practice which would be prepared.
Then of course there is the point to which the noble Lord, Lord Airedale, referred in the judgment of Mr. Justice Streatfeild, about the way in which this code should be expressed. I have never found that the statutory language that we use in this country is particularly easy to interpret, and it is particularly

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difficult to interpret if you have to use strict rules of interpretation. It is certainly not a matter that professionals, say, in the mental health field would wish to do battle with. Therefore, I suggest to the House that there is a great deal to be said for putting this sort of material into easily understood, everyday language, and particularly of course if you can change it from time to time and bring it up to date. Therefore, from that point of view the code of practice also is a great advantage. I grant that it may turn out to be too long, but at least it is tolerably easy to understand.
With those advantages one is then drawn up to a halt by the provisions in this section about the parliamentary approval of the code. What on earth is this supposed to achieve? It is not a statutory instrument, but it is, in some shape or form, blessed by Parliament. I put this to a test for myself. I attempted to write a draft introduction to this code of practice to suggest to those who might in due course come to use it what ought to be done with the thing. The noble Lord, Lord Renton, will look in vain in the beginning of it for any such insertion, because it was immediately taken out by the department; and very wisely so too.
However, it points to the issue—and particularly to those who are actually told to prepare a code of practice of this sort—for what purpose is it to be prepared, who is to use it, and how? The real message that I should like to bring to this short debate is that if Parliament is going to do this sort of thing—and I have suggested two good reasons why it should—then it must at the same time apply its mind to saying, in terms, what is to be the effect of the code when it is prepared.
I can envisage all sorts of problems arising. I do not wish to suggest what the courts are going to do because that is a matter that no doubt will have to be adjudicated upon in due course, but I can see two areas where this code might well be used, or be sought to be used. One is in individual actions for some sort of mistreatment, or negligence, or something of that sort by any one of the numerous sorts of professionals who are engaged in looking after mentally disordered persons.
Happily, these cases do not very often come before the courts, but I hope that we do not follow the American pattern and make this a great source of litigation. It could be that people could pick upon various passages in the code and suggest that if they had not been followed this is something which might give rise to a claim in negligence or some other fault. That would be, I fancy, the opposite of what Parliament had in mind when it required the creation of this code.
The other thing for which it could be used—and again the noble Lord, Lord Airedale, referred to this type of proceeding—is the internal professional disciplinary procedures whereby any one of the multifarious disciplines involved in the mental health field might find themselves up against their own disciplinary procedures for failure to take account of, or to act upon, the precepts of the code of practice.
In those circumstances—and I would think in those alone, at any rate in this context—one might get into the realm of judicial review, because it could well be
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that a court would look at the proceedings of the disciplinary body and say that they perhaps ought not to have taken into account the code of practice as being evidence of what is good practice in that particular professional field. All those matters are at large. Therefore, I think that there are good reasons to say that even if it is a good plan to have codes of practice for various complicated things put into statutes, Parliament must say what is to be done with them.
3.48 p.m.
Lord Rochester: My Lords, I hope that the House will bear with me if I deal only with the one aspect of the question that the noble Lord, Lord Campbell of Alloway, has raised this afternoon on which I feel at least qualified to speak; namely, its application to industrial relations. In that field I should like to take this opportunity briefly to illustrate how codes of practice might, in my view, prove to be useful as preludes to possible legislation subsequently.
When, nearly five years ago, the noble Lord, Lord Renton, introduced a debate in your Lordships' House on the Government's consultative document on trade union immunities I said that the strongest case for altering the law in that respect seemed to me to reside in the removal of immunities from industrial action taken in breach of collective agreements. However, it was plain from the Green Paper that that question was inextricably bound up with the further problem of whether it was feasible to make collective agreements legally enforceable contracts. I shared the view expressed in the consultative document that a great deal of education would be needed before negotiators were sufficiently convinced of the desirability of such arrangements for them to become workable.
I went on to ask whether, as a first step, the Government would consider in their consultation at that time the possibility of introducing a code of practice additional to those on picketing and on the closed shop which followed the Employment Act 1980. The code that I had in mind was to deal with negotiating procedures.
Among other things, it might draw attention to the clear distinction which is already made in western Europe between disputes of right involving the terms or interpretation of agreements already entered into and disputes of interest. In disputes of interest there is for example in western Germany an obligation not to resort to industrial action before referring the issue to a court of law or to arbitration. Almost invariably the parties to the dispute abide by that independent decision. Disputes of interest, on the other hand, arise out of bargaining situations; and, typically, when an existing agreement affecting pay expires and a new one is negotiated, both parties retain their freedom until a new agreement is reached. In that interval, if they cannot agree on the terms of a new agreement then a dispute of interest arises and both parties are free to use industrial action if they wish; that is, the union side may call a strike and the employers could operate a lock-out.
However, even in disputes of interest although industrial action is considered entirely legitimate, great efforts are always made to avoid it. The code of practice that I had in mind was to be based on the proposition that negotiating procedures should be

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introduced in which both management and employees had sufficient confidence to see that they were observed. It was to have as its aim that in all disputes concerning the terms of interpretation of agreements already entered into, whether they affected individuals or groups, there should in the last resort be recourse to arbitration which both management and employees would abide by.
The provisions of such a code, like those others stemming from the 1980 Act, could then be made admissible in evidence and taken into account in proceedings before a court, an industrial tribunal or the Central Arbitration Committee. In that way I felt that we might gradually and with a sufficient degree of consent reach a position where the organisers of industrial action taken in breach of collective agreement would no longer have legal immunity and could be sued for damages.
In replying to that debate, the noble Earl, Lord Gowrie, said that he found that an interesting proposal, and he said that serious consideration would be given to it. Since then however I have heard no more from the Government on the matter, despite one or two reminders. I appreciate that the noble and learned Lord, Lord Cameron of Lochbroom, when he replies to this debate may not be in a position without notice to give a considered response. But I should like at least an assurance from him that the Government still have a proposal of this kind in mind as a means of extending the use of codes of practice prior to possible legislation. I suggest that it has special relevance to instances of industrial action that have sometimes taken place in essential services.
More generally in political terms the present position in the industrial relations field appears to me to be very fluid. There is talk of positive rights for trade union members replacing immunities from legal action. We have examples of no-strike agreements being entered into with provision for pendulum arbitration when negotiations result in a failure to agree. There are also calls for more legislation to limit still further the power of trade unions to inflict damage on third parties, specifically in essential services.
For my part, I suggest that the Government would be wise to think carefully before introducing any immediate additional legislative measures concerning the conduct of industrial disputes. On the other hand, it seems to me that two great merits of seeking to extend the use of codes of practice in the industrial relations field are as follows. First, that before they are introduced there must of necessity be consultation with interested parties and recognition of the need (mentioned already by my noble friend Lord Airedale) to obtain the widest possible measure of agreement as to the terms of the particular code that is contemplated. Secondly, codes of practice in this field can operate over a period which affords time for their provisions to be tested in such a way as to establish whether in practice they are sufficiently acceptable to the employers on the one hand and to the general body of employees on the other to warrant their eventual translation into legislation.
In conclusion, I simply welcome the imaginative initiative that the noble Lord, Lord Campbell of
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Alloway, has taken in raising this afternoon a question which has such wide-ranging applications.
3.58 p.m.
Lord Renton: My Lords, although I share his interest and concern with regard to trade union law, I hope that the noble Lord, Lord Rochester, will forgive me if I am not so rash as to express an instant opinion about his suggestion that there should be a code of practice for negotiations between employers and the employed. That is a very big question. I want also to refer to more general matters and give some other examples.
I, too, should like to congratulate my noble friend Lord Campbell of Alloway not only upon his initiative but on the helpful way in which he introduced this debate. This question of codes of practice is of undoubted and growing importance. It is a practice which has increased enormously in the last ten years. It is already clear from the speeches that we have heard from some noble Lords that the time has come for Parliament and the Government to consider where the practice is leading us: how legislation is affected, how it affects legislation and what should be done to achieve some consistency and order of principle and practice when codes of practice are being prepared in future. Indeed, I venture to suggest that the time has come for us to have an approved code of practice for preparing codes of practice.
I hope that it may help if I try to put this matter into a bit of historical perspective—because I think we need to do so—in order to see where we are going, and so fast. Perhaps I may start by mentioning that I have several times been asked by noble friends on both sides of the House why this matter was not considered by the Committee on the Preparation of Legislation of which I had the honour to be chairman. The two-fold answer is that, first, it was not in our terms of reference and, secondly, it did not need to be; because in 1973 when we started our deliberations there were only two well-known codes of practice, the Judges' Rules and the Highway Code. There were, however, half a dozen minor and obscure codes of practice under six different statutes between 1967 and 1971. But, with the help of the excellent staff in the Library who, in turn were helped by the Lexis system of retrieval from computer, I found that since 1973 the habit has grown so much that there are now 25 statutes in force under which no fewer than 48 codes of practice may be made.
Of course, all of them have not yet been issued, but all these under the more recent legislation of the last 10 years are more important than those earlier minor ones that I mentioned. They are more important because they are of wide application to the citizens of this country and more far-reaching in their effects. Most of these codes of practice—but I am sorry to say not all—made under statute require parliamentary approval. That is obtained, as your Lordships well know, by a Minister laying the code in draft, supported by a statutory instrument which names the code, refers to it and prescribes a date when it shall come into force.
May I say in passing that, unfortunately, it is difficult to get hold of these codes of practice. They are not readily available in the Printed Paper Office, but

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they can be obtained after some delay. Alas, they are not all available in your Lordships' Library. But may I say that, like the noble and learned Lord, Lord Denning, and others who have spoken, I am broadly in favour of codes of practice so long as we get them right and, above all, so long as Parliament is given an opportunity to approve or reject them. I think these codes of practice, if they are properly done, are far more satisfactory than some of the departmental circulars that we have to put up with. If I may give a recent example, under the Transport Act 1985 the Department of Transport is issuing a circular to tell local authorities how to carry out their functions under the Act. Parliament did not require to be consulted about those circulars but the contents of them may be very influential. The department puts forward its own interpretation of the Act, and that interpretation might not always be acceptable to Parliament. So, as I say, codes of practice are right if they are approved by Parliament. I think that we must accept that the system has come to stay and that therefore we should make the best of it.
Clearly, we cannot expect complete uniformity of style and content so far as codes of practice are concerned because, as my noble friend Lord Colville of Culross mentioned, they necessarily have different purposes. One code of practice may have several different purposes, as he has so clearly illustrated with regard to the code of practice on which he has been working under the Mental Health Act, and I shall have something more to say about that in a moment. But I suggest that we should and could avoid some of the present confusion and the uncertainty as to the status of the terms of these codes of practice.
May I give two more examples? I have been told in a letter which came to me out of the blue from a representative of the chemical industry that they are worried because of the Health and Safety Commission's so-called approved code of practice. I do not think that it is approved by Parliament; it is approved by the Health and Safety Commission. Their codes of practice are not mandatory but they reveal a growing tendency towards a quasi-legislative status or pretension of status. This quasi-legislative status is being extended to non-statutory material, clearly non-statutory material, which goes under the heading of the "Health and Safety Commission's Guidance Notes". I am told that this is having a distorting effect in the chemical industry on its efforts at self regulation as proposed by the Robens report. Therefore, the chemical industry seeks clarification. If I may repeat an expression used with regard to the Police and Criminal Evidence Bill on the police codes, they have a three-tier system: regulations, codes of practice and guidance notes.
Lord Elwyn-Jones: My Lords, the term is "Notes of Guidance".
Lord Renton: My Lords, I am much obliged. So much for the chemical industry. My other main example is from the Police and Criminal Evidence Act. I agree with those who spoke at the time, that they are good in substance but I must point out to your Lordships that parts of those codes may repeat or paraphrase provisions of the Act without any
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attribution whatsoever; so that when you read those codes you do not know whether, in fact, they are a repetition of laws which have been passed by Parliament or are commentary, no doubt valuable and helpful commentary, but commentary by the Home Office. I think that the courts and the people appearing before them and their advisers have a right to know the true status of each of the provisions of the codes of practice.
As to the status of the codes under that Act, it has already been pointed out that in police discipline proceedings every word of those codes has full legal effect; and a policeman can have his whole career affected by something in the codes which may not be precise, statutory provision. Therefore we find that these provisions, many of which but not all of which are really penal provisions in a sense, and some of them have never been considered in detail by Parliament, could not be amended by Parliament when we approved them before Christmas and, as I say, they are additional to the statute. But in all other proceedings these codes are merely of persuasive value—as the noble and learned Lord, Lord Denning, said, helping the courts to reach decisions, but of course without binding legal effect.
My noble friend Lord Colville of Culross has set a very good example, if I may say so, because after some difficulty I did manage to get hold of his not-yet-published code of over 200 pages. I should like to congratulate him upon the industry which has gone into it, which must be something terrific. I am sure that those of us who are involved—like the noble and learned Lord, Lord Elwyn-Jones, is, with the mentally ill, and the mentally handicapped, as I am—will be grateful for the painstaking way in which it has been done. But the great thing about that code is that it specifies the sections of the Mental Health Act to which each part of it refers. That is a great advantage.
It has another advantage too, which I think is worth the Government bearing in mind always in the future preparation of codes of practice. It is expressly a consultative document. One assumes that it will not be presented to Parliament for approval until there has been a period of consultation so that Ministers can take note of the representations made with regard to it. That is a great advantage.
May I take now the Highway Code? Really, after all these years we ought to have learned how to do this better. In half a dozen lines of very small print you manage to find that it has got a statutory origin, but when you read it—and we are nearly all motorists, are we not?—you have no idea that the advice that it contains and the instructions that it gives are based upon statutory provisions or have come out of the fertile mind of a member of the staff of the Department of Transport. Possibly you will think it is right that there should be a difference, and that at any rate when there is a statutory foundation there might be a little marginal note saying that it refers to section so-and-so of such-and-such an Act. To do this would not be a great problem and it would clarify the legal position. So the first principle in drafting codes of practice must be to indicate their statutory sources and to clarify their legal effect. Other principles will no doubt emerge from your Lordships' debate, but I must now sit down.
4.13 p.m.
Lord Mottistone: My Lords, I too should like to congratulate my noble friend Lord Campbell of Alloway on introducing this debate. I have been concerned for some time, and I was particularly interested in what my noble friend Lord Renton had to say, about the way in which the practice of having codes of practice has increased so tremendously in the past 12 years or so. That has been more and more obvious and one has become more and more concerned that somehow these codes of practice were growing like Topsy and not growing in any orderly way.
There are not only codes of practice. There are guidelines, which creep into some legislation, and I do not know how the status of a guideline compares with that of a code of practice. Then we are told about guidance notes; and so it goes on. In the same area, there was the licence for British Telecom, which, thanks to quite a lot of pressure, my noble friend Lord Cockfield managed to arrange to have presented for parliamentary consideration before it was brought into force by special machinery through using the statutory instrument which controlled it. But that had to come as a result of parliamentary pressure. It would not have happened in the normal course.
We are then left with the fact that with these codes of practice and other documents of the same sort, when you do get a chance to look at them you cannot amend them. They have the same failing, if one can put it in that way, as has the statutory instrument: you have either to take it or leave it. I remember very well the code of practice that my noble friend Lord Colville has been telling us about, when we were being asked as the Mental Health (Amendment) Bill went through Parliament whether we would agree to a code of practice. A lot of us were very concerned about that because we were not at all sure that the Department of Health's policy at that stage was really quite straightforward and that we would get the right sort of code of practice. I am very pleased indeed that my noble friend has had the privilege of putting it together instead of that being done by the department, because I think one can trust him a great deal more.
The great point about all this—I do not want to labour it, because other people have said it—is that it is untidy and that when Parliament does get a look, it does not get a chance to amend it. I believe that in some cases these kinds of things do not require amending and it is proper from the point of view of getting the business through that we should not waste our time in trying to amend them; but I should like to suggest to your Lordships that there are two things which might make this more controllable.
One is the suggestion of my noble friend Lord Campbell of Alloway that there might perhaps be a special scrutiny committee which scrutinises these things on behalf of your Lordships. I do not say that is necessarily the right answer, but I should very much like my noble and learned friend the Lord Advocate not to discount that idea but to bear it in mind as something which might be introduced in order to give Parliament a sense of satisfaction that it has a proper measure of control of these obviously necessary new types of semi-legislation, which it does not seem to have at the moment.
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There is another possibility which I floated in your Lordships' House from the Opposition Benches. I got very short shrift for it—it might even have come from the noble and learned Lord, Lord Elwyn-Jones, although I do not think I was grand enough for that from the Lord Chancellor of those days. It seems to me that we have now got negative orders and affirmative orders, neither of which can be amended. I should have thought that for special cases we might have—I am not by any means saying for all cases—a third category, which could be amended like a Bill. It would mean extra parliamentary time and therefore one would obviously have to have relatively few of them; but I think there is room for that. I think that some of these codes of practice could usefully fall into that category. Perhaps we might have both that new type of order/code of practice and a scrutiny committee.
Above all, I think it is unsatisfactory if we are not confident that we have proper control of what is going to affect the citizen, because that is what we are here for; and I think we must have a greater degree of control in this sort of area.
4.18 p. m.
Lord Henderson of Brompton: My Lords, after the opening of this debate by the noble Lord, Lord Campbell of Alloway, for which we are all extremely grateful, and the impressive speeches which have followed, it seems to me that it must be clear to the noble and learned Lord the Lord Advocate by now that the whole question of the use, the status and the categories of codes of practice ought to be examined officially.
I think it was the noble Lord, Lord Airedale, who said that a good speech should end with a conclusion. I am starting my speech with a conclusion, but I hope that does not mean that it will be considered a bad speech. Having listened to the noble Lord, Lord Campbell of Alloway, and others, right down to the last speech by the noble Lord, Lord Mottistone, with his interesting suggestion that there might be a scrutiny committee, perhaps of both Houses, my conclusion is, that all the speeches really have indicated that something needs to be done and that the growth of the use of codes of practice has been Topsy-like, just as the growth of statutory instruments was Topsy-like, and that the time has now come for it to be properly looked at and properly regulated. So that is my conclusion at the outset of my speech.
Having reached that conclusion, perhaps one ought to say what one thinks would be the appropriate body to perform this task. The Government might think that a Government committee or a departmental committee might be the answer. Possibly, it might be a select committee or a joint committee of both Houses. But, for myself, I think that the Law Commissions provide the most convenient body for examining this very important development. I was going to say this legislative or semi-legislative development. I do not myself know, because I have not looked up the Law Commissions Act, whether they can act on their own motion or whether they need a reference by the Lord Chancellor. But I very much hope that the Government might see fit to present this to the Law Commissions as a possible, and indeed an urgent, subject for discussion and for a report by them.

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I think that the noble Lord, Lord Campbell of Alloway, has done a service by exposing some of these problems posed by the use of codes of practice, and he has given an opportunity to noble Lords who have given in great detail from their own experience—not least the noble Viscount, Lord Colville of Culross—examples of where it would be to the immense advantage of the general public at large, such as those who have to operate the Mental Health Act, and to those affected, that there should be imported some certainty into the application of these codes.
I think it would not be impertinent of the Law Commissions to undertake a study of this sort. I have in mind that they did at one time, many years ago, make proposals on the interpretation of statutes. They fully recognised the constitutional position of the judiciary, as one would expect, in these words:
"Under our constitutional arrangements it is the function of an independent judiciary to interpret the law and no proposals which we make can or should undermine the freedom which this function requires."
But they nevertheless went on to say that a certain degree of statutory intervention was necessary or desirable and they formulated a set of draft clauses. So there is a precedent for the Commissions to undertake such a task.
As to statutory intervention, of course the interpretation Act is the most prominent example, I suppose. There was also the Rules Publication Act 1893 which was overtaken and incorporated—not before time—by the Statutory Instruments Act 1946. It seems to me that Parliament requires that an Act equivalent to the Statutory Instruments Act 1946 should be placed on the statute book in respect of codes of practice, not least so that Members of both Houses know the precise effect of what they are doing. One of the foremost principles of the Renton Committee was to promote certainty in the statute law, and an inquiry of this nature by the Law Commissions followed by a statute would, in my view, import certainty where there is doubt now.
When I read the report of the debate—which I unfortunately could not attend—of 9th December on the police codes, I found what seemed to me a distinct difference of opinion on the legal effect of those codes. The undisputed fact that breach of the codes by the police can give rise to a disciplinary offence does not mean that there is any redress before the courts or anywhere else for a breach—and that seems to me a very serious thing to say, but it has been said most clearly by the noble Lord, Lord Campbell of Alloway—except in the very rare cases of perversity or breach of the ordinary accepted rules of fairness. The difference of opinion on 9th December was remarkable, in view of the fact that the codes of practice in the Police and Criminal Evidence Act had been freely debated in both Houses during the passage of the Bill. So that alone, to my mind, is an index of the need to codify the use of codes of practice.
But I grant that this is not an easy matter. Like the noble Lord, Lord Renton, I have looked at the statutes incorporating codes of practice over the last 20 years or so. Not only were they few and far between until quite recently—say, 10 years ago—but they were also of a different character on the whole. Leaving aside the best known code, the Highway Code, they tended to be
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of an administrative or executive character, a typical example, which has already been referred to, being the codes under the Health and Safety at Work etc. Act 1974, in which codes of practice for the purposes of that Act are defined. It is slightly unusual for codes to be defined, so I should like to quote, as an example of an early kind of code, what that Act contained. This is the definition:
"a standard, a specification and any other documentary form of practical guidance".
That is what we used to think of as the proper material for which a code should be formulated. It is reasonably precise and you know exactly where you are with it.
Codes of practice have now grown and have been applied to extremely sensitive areas—areas which concern human liberty. As the noble Viscount has pointed out, there is detention under the Mental Health Act and, of course, under the police codes; the exercise by the police of powers to stop and search or on searching of premises; on detention and questioning of persons and on identification of persons by the police. These are quite a different order of subject for codes of practice than the codes which were defined in the Health and Safety at Work etc. Act 1974. They are of such a different kind and character that that alone is a justification for the use of codes to be examined officially. I think that justifies the House spending two hours or so on this subject, and it justifies the noble Lord, Lord Campbell of Alloway, in asking us to do so.
I would just conclude by saying that this is something which is quite clearly with us for the near future and, indeed, for the foreseeable future. We have all heard how this has grown and there have been so many examples recently before us that they are fresh in our minds. But I am looking forward to, perhaps, the next Session or the Session after that. We have had a social security White Paper and that White Paper envisages guidelines for the administration of the social fund. In the old days, or indeed now, one would expect a ministerial circular which would be largely of an administrative character, because the area of discretion is small for the social workers who have to operate the social security system, but under the White Paper things will change dramatically.
The Act which follows the White Paper will be important. It says very clearly in the White Paper that instead of operating by the book or by rule of thumb a great deal of discretion will be given to the social workers as to the individual circumstances of those with whom they are dealing. It was said in the White Paper, or by a Minister introducing it, that there would clearly have to be guidelines for social workers who are going to administer the social funds and that these should be something less than rules or regulations and, I suppose, something more than a ministerial circular. I can only suppose that half way between rules and regulations and a departmental circular comes code of practice. That, I very much hope, will come about when social security legislation is before us. I leave your Lordships with the thought that this is not a question that will go away. It is with us now, and it will be with us for the foreseeable future.
4.30 p.m.
Lord Elwyn-Jones: My Lords, I join noble Lords who have already spoken in congratulating the noble

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Lord, Lord Campbell of Alloway, on putting down this Motion and on introducing and explaining it so clearly. It was a somewhat discouraging Motion on the face of it, but it has given rise to a most vigorous and interesting debate. It has concluded with increasing pressure upon the Minister for a commitment that, in the light of the doubts and questions of an important character that have been raised in different parts of the House on this matter, it may be the time for consideration by a high-powered committee, and ad hoc committee, or the Law Commission. For the moment I cannot think of a better head to it than the noble Lord, Lord Renton. I do not suppose he will forgive me for that unfriendly suggestion. At any rate, there is room for reviewing this matter in the light of the enormous increase in the practice of the user of codes of practice.
We considered some of the implications on the criminal side in the debate on the codes of practice issued by the Secretary of State in compliance with the Police and Criminal Evidence Act. Half a century ago Lord Chief Justice Hewart fulminated against delegated legislation in his famous book The New Despotism, which was a ferocious attack on the civil servants. I confess that I myself thought it was somewhat exaggerated. Indeed, the effect of the exaggeration was such that it was rumoured at the time that all civil servants in Whitehall had a notice on their desks saying, "Power is delightful; absolute power absolutely delightful", I do not know whether there was any single instance of that being done in practice. But in the light of what has been said by noble Lords and from one's own experience, I submit that we are in the face of a new danger of uncertainty—uncertainty in legislation, in the effect of legislation and in the effect of rules governing whole ranges and aspects of the life of the community. My emphasis in my observations will be on the dangerous impact of the use of codes of practice in the criminal field. In the civil field, I see the value of codes of practice in the ways that have been indicated but subject to the changes and reforms that have been called for.
In the criminal field, uncertainty is indeed the enemy of the law, particularly of statutory law. The main charge which can be levelled in general against codes of practice is that they create a considerable area of greyness and uncertainty. It is important to bear in mind that in so far as these criticisms are justified—and I think they are; and they have been given a good deal of authority by notable speeches today—there is taking place what Mr. Baldwin and Mr. Houghton of Brunel in their valuable piece of writing on this matter have described as,
"a retreat from primary legislation in favour of government by informal rules of indeterminate status".
It is a sinister development and one which needs to be very carefully considered. It takes place when two other factors are operating upon our law. First, there is the steady and relentless growth of delegated legislation which grows apace from year to year. Then there is the vast mass of European legislation imported into our law by Section 2 of the European Communities Act 1972. Those rules and the European legislation cover a very wide range of subject matter from various and sometimes not clearly identifiable sources.
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It has been fascinating to hear from noble Lords, particularly in regard to the detail given by the noble Lord, Lord Renton, about the extent of the increase in user of codes of practice. This has been done by varying administrations. I cannot put on a cloak of virtue or innocence in this matter. I have no doubt that the administration in which I took part had a hand in this exercise. I shall not say "careless exercise", because that would be too much criticism. Successive administrations have used the codes but largely and principally in civil law situations. There, of course, they could well have use and value. The planning field has been mentioned.
I have been delighted to hear from the noble Viscount, Lord Colville of Culross, that there has fallen upon his shoulders the task, which must have been an appallingly difficult one, of preparing for a code of practice in the mental health field. I am sure that we are all most grateful to him. Those of us who are involved and work in that field will be waiting with anxiety to see what Parliament makes of it in due course. As the noble Viscount has said and as has been indicated, his draft is not burdened with the intention of finality but is intended for further discussion. Therefore, there is clearly room in the civil field for the addition to legislation of codes of practice so long as they are done effectively and clearly and with proper authority.
In the civil field, in the common law system there is room for what one might call shadowy fringes in its development, but there should not be room for such latitude and uncertainty in the criminal field. The Police and Criminal Evidence Act was perhaps the first express and major incursion of codes of practice into the criminal field. As the noble Lord, Lord Renton, has indicated, in the highway code and in other places there have been incidental consequences that can result in criminal proceedings arising. But here in the Police and Criminal Evidence Act we had to consider a code which had immensely important potential significance, first, for the police themselves and for the nature and extent of their powers and the guidance in how they should be exercised.
Then there is the individual citizen and the protection that should be accorded to him in the course of legislation deliberately intended, in view of the threat or challenge of crime, to increase and enlarge the powers of the police.
The mischief—if I may put the matter as strongly as that—of the uncertainty of the code of practice under Section 67 derived in part from the trigger mechanism provided, to use the language of the noble Lord, Lord Renton, and provisions of Section 67(11) of the Act itself. The words have already been referred to:
"In all criminal and civil proceedings any such code shall be admissible in evidence; and if any provision of such a code appears to the court or tribunal conducting the proceedings to be relevant to any question arising in the proceedings it shall be taken into account in determining that question."
My Lords, what does that mean? What help is given to the judge? He has to take it into account. He has to read it. Does he have to pay attention to it? What weight has he to give to it or any part of it? Here is an important criminal provision and it will not do. It leaves the matter in a state of total uncertainty. It does

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not indicate, for instance, that if a breach of the provisions of the code in the course of taking statements from a potential witness by the police is established that that should automatically or generally result in the exclusion of the evidence. There is no such commitment or suggestion. It is left totally at large. As has been said by the noble Lord, Lord Henderson of Brompton—and we discussed this in some detail when considering the Police and Criminal Evidence Bill—there is no remedy provided for the injured citizen should he suffer from the abuse of power and abuse by the police of the provisions of the code, should such arise. The matter is left uncertain and completely in mid-air.
Therefore, I venture to submit that it is indeed timeous for this matter to be carefully and fully reviewed afresh. The Statute Law Revision Committee performed a great service. It became a watershed in the attitude towards legislation. I think that it is time now for a fresh look at the codes of practice, especially in the context of the parallel developments which I have ventured to describe as taking place.
There should be greater precision as to the exact intention of Parliament itself in relation to the codes of practice. That was so well expressed, if I may say so, by the noble Viscount, Lord Colville. At least we should know what is the intention and purpose and where we go from there. I venture to submit that there should be in any code, especially one affecting the criminal law, a clear enunciation of the intention of Parliament so far as concerns the status of the particular code and it should be spelt out in the clearest detail in the enabling section; in the triggering mechanism which the noble Lord, Lord Campbell, so clearly and helpfully identified. That is absolutely crucial.
Then, where codes enshrine fundamental human rights, the rights of civil liberty, the sanctions in relation to a breach of the codes, and particularly in the field of admissibility of evidence, must be stated and must be potentially severe and effective if those fundamental rights are not to be eroded. As I have submitted, words like "shall be taken into account" should be rejected as wholly inadequate and be replaced by precise and specific provisions.
I now mention one further matter which I think should be taken immediately into account; namely, that wherever possible the code which it is intended to bring into existence after the passing of an Act should be available in fairly final form when the relevant legislation is passing through Parliament in so far as that is possible. It may not always be possible, but at any rate there should be some attempt. Far too many codes are sanctioned more or less as blank cheques. We have already been reminded of the limits for parliamentary action which in any event exist. I share the plea that the codes should be more readily available. It took an excessive time in our brilliantly efficient Library for me to lay hands on one or two of the codes which it is useful to study.
What sounded like—and I say this without offence to the noble Lord who initiated the debate—a mere academic exercise which on the face of it was perhaps more suited to a symposium at a university, has turned
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out in the event to raise very important constitutional, legal and parliamentary questions. We await with impatience the answer from the noble and learned Lord who is to reply to the debate.
4.46 p.m.
The Lord Advocate (Lord Cameron of Lochbroom): My Lords, perhaps I may begin by thanking my noble friend Lord Campbell of Alloway for tabling this Motion with the encouragement of the noble Lord, Lord Henderson of Brompton. It has been a great pleasure to hear him also speaking on the Motion before the House today. It has given us an opportunity to debate a subject which noble Lords have clearly indicated is of considerable importance in modern legislation. The debate has, I suggest, been a useful, constructive and wide-ranging one. Indeed, our thanks are due to my noble friend Lord Campbell of Alloway for the clarity with which he analysed the issues in his opening speech and allowed the debate to concentrate on the important issues.
In what I say I shall endeavour, so far as I can, to cover the points made by noble Lords during the debate, but your Lordships will perhaps forgive me if I am not able to cover them all. I am bound to say that I come as a novice to the legislative process. I have come in on the act, as it were, very shortly before rising to speak, but I recognise that today we are concerned with codes of practice which have some statutory basis. There are many voluntary non-statutory codes setting out standards of practice or behaviour in various fields; but I suggest that the problems which my noble friend perceived do not arise in connection with such codes.
Perhaps in parenthesis I may say that the noble Lord, Lord Airedale, made reference to the case of Patchett. I am subject to correction, but I have a suspicion that the case related to departmental circulars rather than the statutory codes of practice with which we are concerned today. Therefore, while I accept the twice blessed and four times cursed comment of Lord Justice Streatfeild about the circulars, I think that we are dealing with something which may be called into being by statute and then becomes twice blessed or twice cursed according to how you like to look at it in consequence thereof.
So far as I can judge from your Lordships' speeches, there appears to be general agreement that there is a place for codes of practice with statutory authority. Statements of what constitute good practice may be very technical and detailed; they may be too imprecise to be readily expressed as legal duties and in such cases a code of practice authorised by a statutory provision will provide the necessary guidance in a form which does not clutter up the statute book and is sufficiently flexible to be altered in the light of developments in the area to which it relates.
In regard to its terms, it depends on, first of all, to whom it is addressed, and, secondly, the purpose for which it is intended. I entirely agree with the noble and learned Lord, Lord Denning, about the requirement for simple language—one cry which I think found an echo in the hearts and indeed the voices of other noble Lords today, not least my noble friend Lord Colville of Culross—and I entirely accept that point, though I

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suggest that perhaps my noble friend might now have even more sympathy for the task of a parliamentary draftsman than he did before.
I suggest that the matters which concerned my noble friend in opening this debate are in broad terms these: first, whether the variation in the statutory provisions introducing such codes and in the legal effect which such codes may have is capable of causing confusion and uncertainty on the part of those affected by the codes; and, secondly, whether the use of codes of practice rather than primary or secondary legislation is restricting the legislative role of Parliament. As a Scots lawyer, I am bound to say that I find a great attraction in the point which was made by my noble friend Lord Renton and echoed by the noble Lord, Lord Henderson of Brompton, that there is a need to get back to first principles in considering these questions.
As regards the first question, I think there were identified a number of different forms of what were termed "trigger clauses" according to the legal consequences which flowed from them. There is of course a category of provisions which are silent as to the legal effect of the code they introduce. I think that both my noble friend Lord Campbell of Alloway and my noble friend Lord Renton made reference to the code which related to the convenience of the disabled in using public transport vehicles, provision for which was made in the Transport Act 1985. In such cases the code is nothing more than what it appears to be; namely, a statement of what constitutes good practice in the area to which it relates.
The code is not intended to have any legal effect but is simply to provide guidance, and I think that in that case my noble friend Lord Renton is correct in saying that there was in fact no requirement that the code should be submitted to Parliament when it was drawn up. While one may of course argue that the subject matter of the code is sufficiently important to justify primary or secondary legislation—and I shall return to this point in a moment—the legal status of this type of code is fairly clear.
Then there is the category of codes introduced by a clause which does contemplate possible legal proceedings against a person and provides that breach of the code does not of itself give rise to civil or criminal liability. In such a case the clause provides that the code is admissible in evidence in a court or a tribunal and that the court or tribunal shall, if it considers provisions of the code to be relevant, take them into account—and this, I think, is now much the most common type of code.
Again, the legal effect of such a code is really limited. For example, if there were an action in which it was maintained that loss had been caused by the defender's method of carrying out some duty, it would be relevant to the outcome of the action to prove to the court what was the generally accepted way of carrying out the duty. For instance, the pursuer might call an expert witness to explain the matter to the court, and I am sure that the noble and learned Lord sitting opposite, Lord Elwyn-Jones, has frequently experienced these kinds of cases. If, however, there were a code of practice relating to the question in dispute, I would suggest that it seems perfectly
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reasonable in determining the issue of liability that the court should take the code into account to the extent that it is relevant.
As I have said, the code is a statement of accepted good practice and I suggest then that it is appropriate that the court should take it into account. A provision of this nature does not of course prevent either party to an action from showing that the matter in dispute has been dealt with satisfactorily in a way other than that stated in the code, and therefore the code does not of itself by virtue of breach of it give rise to either civil or criminal liability.
There were, I think, other codes to which reference was made—and which my noble friend in opening suggested gave cause for some concern on the ground that they do have some legal effect in civil or criminal proceedings. The highway code is an example of a code which, as has been said, has effect as tending to establish or negative liability in civil or criminal proceedings; and the noble Lord mentioned codes under the Health and Safety at Work Act as having effect in criminal proceedings. Certainly it is true, as the noble Lord, Lord Renton, pointed out, that these codes are not subject to parliamentary scrutiny.
I suggest that these codes are very much the exception rather than the rule. Subject to what I have to say about the role of Parliament in relation to such codes, it is however surely right that the existence of a code of practice governing conduct which may be an issue in legal proceedings should be acknowledged. If a code represents generally accepted standards of practice in relation to a particular matter, surely it is reasonable to say to a party in legal proceedings: "These are the accepted standards. What you have done does not conform to them. It is therefore up to you to show that your way of doing things is equally satisfactory".
Failure to observe the provisions of the code does not thus in itself render a person liable to any civil or criminal proceedings. What it does—and I instance the case where a code such as the highway code is relied upon by a party to the proceedings as tending to establish the liability which is in question—is to place on the other person the burden of proving that that conduct, which was not in accordance with the code, was nevertheless in compliance with, or not in breach of, his legal duties, whether they be statutory or common law.
In addition to the examples mentioned by noble Lords, there are of course cases in which compliance with the provisions of a code may constitute a defence to a particular charge. The Control of Pollution Act 1974 contains examples of such cases. Where, for instance, Section 31 creates an offence of polluting streams or controlled waters, there is a defence if an accused person can show that the entry of the pollutant into the water was in accordance with good agricultural practice. The section goes on to provide that any practice recommended in a code approved for the purpose by the agriculture Ministers shall be deemed to be good agricultural practice.
A similar provision is to be found in the case of a person accused of contravening a noise reduction order in terms of Section 66, where there is a defence if he proves that he used the best practicable means to

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prevent the noise or minimise its consequences. Under Section 71 of the Act the Secretary of State may issue codes of practice on appropriate methods of noise reduction or may approve codes issued by others.
Thus the references to best practicable means are to be interpreted having regard to such codes. I would say in answer to the noble and learned Lord, Lord Elwyn-Jones, that there is a use of codes in criminal law where the shadowy fringe or the uncertainty which appears in the legislation itself is in fact made stark and clear by the codes. So with very great respect to what the noble and learned Lord has said, I suggest that codes of practice still have a part to play in certain of our criminal laws.
All these cases, I submit to your Lordships, are examples of the general proposition that where a code of practice exists, it is right and proper that it should be taken into account in any proceedings which raise issues to which the code of practice is relevant. The provisions in the primary legislation—the trigger clauses—regarding the weight which courts are to give to such codes do not create or confer enforceable rights; they are simply part of the rules of evidence. They give rise to what I think the noble and learned Lord, Lord Denning, in the course of his speech to this House in the case Brown v. Rolls-Royce Limited, once called the provisional burden of proof upon a party. I apologise for mentioning a Scots appeal but it is one which has become fairly well-known to me in the course of my experience as a lawyer.
Lord Elwyn-Jones: And it is good authority, my Lords.
Lord Cameron of Lochbroom: Indeed, my Lords, it is authority in Scotland and of undoubtedly persuasive value even south of the Border and in Wales.
There are a few instances, such as the provisions which introduce the Highway Code, where compliance or non-compliance with the code may have an important bearing on the outcome of civil or criminal proceedings, but these instances are, I think, exceptional and represent the extreme end of the spectrum of legal effect. Any obligation, breach of which would result in civil or criminal liability, I suggest, should be in the primary or secondary legislation: and it is breach of that obligation, and not breach of any code relating to the obligation, which results in civil or criminal liability.
That leads me on to the second issue which I see as arising in this debate; that is, the issue of parliamentary control of codes of practice. I think that it was suggested in the consideration given by my noble friend in opening that there was, as indeed there is, a distinction among primary legislation, secondary legislation and codes of practice. As I rather understood what he said, he was suggesting that codes of practice might be restricted simply to matters of exhortation or guidance, having no legal effect. I suggest that that may be more easily said than done.
Much of what is contained in codes of practice is extremely detailed and technical, and does not seek to impose legal duties. To include it in subordinate legislation would create a substantial increase in the already large volume of statutory instruments without any corresponding benefit in terms of legal certainty as
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to the status of the code. I readily accept that a provision, breach of which creates civil or criminal liability, ought to be in primary or secondary legislation; but, as I indicated earlier, most of the codes which we have considered contain an express provision to the effect that breach of their provisions does not create such liability, and in those circumstances I am unable to see what benefit there would be in including such codes in subordinate legislation.
Another factor to bear in mind is that codes which have a statutory basis are not always issued by the Government; in a number of cases the Secretary of State or Minister is given power to approve or recommend a code prepared by an outside body, such as ACAS or the Equal Opportunities Commission. It would be at the very least anomalous if the Secretary of State, when he received a draft code from ACAS for his approval, had to prepare a statutory instrument to which the draft code would be annexed, the only legal effect of the whole exercise being that the code could be used in proceedings before an industrial tribunal, a fact which would already be stated in the original primary legislation.
I suggest to your Lordships that the important point is not so much whether a particular matter is dealt with in a code of practice or in subordinate legislation, but rather the extent to which Parliament has control over the contents of a code which may be relevant to the rights of individuals in legal proceedings. I think that throughout the debate in a sense that has been the touchstone—the point to which noble Lords kept coming back frequently.
If the provisions of a code are capable of being introduced into and affecting the outcome of legal proceedings, even if only as to which party has to discharge the burden of proof, I consider that in principle it is right and proper that the trigger clause should provide for the code to be laid before Parliament and for your Lordships' House and another place to have an opportunity to consider the terms of the code and to express a view on it through a form of negative or affirmative resolution procedure, according to the importance of the subject-matter. That means that Parliament at the outset has to consider the statutory basis from which the code of practice takes birth. It also, I suggest, enables Parliament at that stage to deal with the kind of question which, for instance, my noble friend Lord Colville of Culross raised, of what is to be done with them, because that of course can be set out in the legislation itself, so that there can be no dubiety.
The noble Lord, Lord Rochester, made reference to employment law and in particular to a discussion which took place in a previous debate on the matter of a code of practice as affecting it. He will forgive me if perhaps in this debate I make no response to that. Obviously, the views expressed by the noble Lord, and indeed by all noble Lords today, will be considered by myself and my colleagues, as to whether there is need to take the matter further, as was referred to.
Certainly, as I say, such being the situation, then it seems to me that that point also to some extent answers the criticism which my noble friend Lord Renton made as to the uncertainty of the status of a code of practice. It would provide, if need be, for the

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form of consultation which is to be gone through; and indeed one knows that that is sometimes provided for. That seems to me something which arises at the first stage.
As I say, it is accordingly open to Parliament even now to achieve the result which I think that noble Lords have been suggesting would be appropriate. In considering a Bill which contains a provision for codes of practice it will be relevant to consider what sort of topics the code will deal with. If the topics set out in that provision are likely to give rise to the use of the code in legal proceedings, it is open to Parliament to ensure that the code cannot be issued without coming before Parliament and being approved either expressly or by acquiescence.
Certain suggestions were made as to the powers to amend a code in the course of such consideration. I think, indeed, that it was my noble friend Lord Mottistone who made reference to that. I do not think that I can venture any views on that, because that seems to me to be a matter for the House to determine as regulating its own procedure; and as it is something which involves the other place, it would require, I assume, consideration by both Houses before a solution could be achieved.
Be that as it may, I would simply say this in response to a criticism. I think that it was my noble friend Lord Campbell of Alloway who used the phrase "the slighting of Parliament". There is no slighting of Parliament if Parliament has, as it has, the opportunity to consider the primary legislation, and the terms of it, which give rise to the code of practice.
Of course, as I have said already, the majority of existing statutory provisions regarding codes of practice already provide for parliamentary control of the very sort that I have just mentioned. This applies equally to codes issued by the Government and to codes emanating from outside bodies and being approved, under statutory authority, by the Government. I suggest that that does not amount to hobbling, which I think was another phrase used.
It seems to me, too, that in the discussion of the code of practice, there is then an opportunity always for your Lordships to make clear, as you have done today, the importance of the kind of language that is used in a code. I would simply make this qualification. It has been recognised today that a code of practice cannot be placed within a particular straitjacket or skeleton because it is intended to cover such a wide variety of circumstances—for guidance and the like. The idea that it should become formalised is not one, I would suggest, that runs well with the concept behind codes of practice as they are. Indeed, the instance of the code that has been prepared under the Mental Health Act 1983 seems to establish that very point.
My noble friend Lord Campbell of Alloway suggested a possible system for scrutinising draft provisions in Bills which would permit codes of practice. Certain of your Lordships, especially my noble friend Lord Mottistone, went slightly further in this regard. I think, perhaps, that my noble friend himself appreciated some of the practical and constitutional difficulties that would arise in any proposal to scrutinise a draft Bill before it had been introduced into your Lordships' House or another
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place. I appreciate that it is helpful to have sight of a draft code when considering a trigger clause. The noble and learned Lord, Lord Elwyn-Jones, drew attention to that fact, as did certain other noble Lords. Indeed, it is helpful to see draft regulations—for instance, when considering a regulation-making power. But it is not always possible. The example under the Mental Health Act is again pertinent. It may take some time to draw up a code. There may have to be discussions and consultations with interested bodies. It may be that the power to issue a code is not intended to be exercised immediately. But the absence of a text of a draft code should not cause undue difficulty. I suggest, as I did earlier, that the primary legislation, the trigger clause, will specify what topics the code may cover, and it should be possible to judge from that provision how important the code is likely to be and what controls, if any, might be appropriate.
Reference was made to the code of practice under the Police and Criminal Evidence Act. Your Lordships will perhaps forgive me, since there was a debate on that code a short time ago, if I do not deal further with that particular matter. It was that debate, as my noble friend indicated at the outset, that gave rise—
Lord Elwyn-Jones: Triggered!
Lord Cameron of Lochbroom:—along with the encouragement he had elsewhere, to this debate today. Indeed, as I am suitably reminded, this was the trigger for the debate.
Mention was also made of the Animals (Scientific Procedures) Bill that is, of course, before your Lordships' House tomorrow. Again, perhaps your Lordships will forgive me if I do not anticipate anything that takes place tomorrow, nor that I comment upon the terms of the letter that the noble Lord, Lord Airedale, received from my noble friend the Minister.
The use of codes of practice has grown up over the past 15 or 20 years as a means of providing guidance in a clear and, it is intended, helpful way, and in a form that is sufficiently flexible and allows for the inclusion of detail and of material that it would not be appropriate to put in primary or secondary legislation. Where it is envisaged that such codes should have any form of legal effect in relation to individuals, the Government accept that Parliament should have similar powers to those that it has in relation to subordinate legislation. Beyond that, I would not be prepared to go today. At the end of the day, and particularly in the light of what has been said and focused upon in today's debate, it is clear that your Lordships will now look at codes of practice with a very much more practised eye than has perhaps been used previously.
Today's debate has very helpfully focused attention on the issues that arise when considering statutory codes of practice and the provisions introducing them. I suggest that the debate will be a useful one for many to consider in the discussions that this House and another place may have on codes of practice in the future. I would simply say at this stage that I am not persuaded that there is any reason to take certain of the lines, proposed, for instance, by the noble Lord, Lord

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Henderson of Brompton, and others, in establishing further skilled consideration of the whole topic of codes of practice. This is, I suggest, something that the House itself is fully capable of dealing with in its own deliberations where the occasion arises.
Lord Renton: My Lords, before my noble and learned friend sits down, would he care to comment on the suggestion made by myself and other noble Lords that where a code of practice contains a repetition of statutory provisions there should be an indication of what those provisions are?
Lord Cameron of Lochbroom: My Lords, again, I would simply say this. That has the merit of concentrating the attention of the reader as to where the provision is drawn from. It would appear from what has been said that a draft code is already in existence where that form is followed. Obviously, as I have said already, my colleagues and myself will pay particular attention to the criticisms that have been made about codes of practice in the past. That seems to me a suggestion that is eminently sensible for those who will be responsible for drawing up codes of practice in the future.
5.17 p.m.
Lord Campbell of Alloway: My Lords, this is no trite acknowledgement. I am really most grateful to all noble Lords who have spoken in the debate. Having listened with close attention to what they have had to say, I am at last beginning to think that I understand a little about the subject. It really has been for me an education to listen to your Lordships. I should also like to thank my noble and learned friend the Lord Advocate for his contribution.
It seems to be the general sense of the House that there ought to be parliamentary control and that, where possible without too much rigidity, the draft proposed code should be laid with the trigger clause so that both Houses of Parliament can understand what they are doing. Some means should be devised to try to ensure this. Various means have been suggested. It seems also to be the sense of the House that the present situation is not at all satisfactory. This is not really anyone's fault. It has simply arisen over the last few years and has produced a situation that no one has really got round to dealing with. In those circumstances, I am sure that all your Lordships will be grateful to my noble and learned friend the Lord Advocate for having said that he will consult with his colleagues as to what may be done about it.
I have to express my gratitude to the Executive, the departments of state—the Home Office, the Department of Transport and the Department of Employment—who have provided me with the inaccessible material without which I should not have been able to open the matter. However, this is an aspect that has been touched upon.
There is only one matter which, with your Lordships' leave, I would wish to commend to my noble and learned friend when he consults with his colleagues. It is on the question of what should be primary legislation, what should be secondary legislation, and what should be embodied in a code of practice. As far as what should be embodied in
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primary legislation and is not, an example is the provision of Item 31 of the Employment Act code about picketing, which limits pickets to six. That is a simple matter which goes straight to individual rights in a quite categorical situation. Surely that should not be in the commmon form code, which is subject to unchallengeable discretion, but should be there by the will of Parliament on the face of a statute.
I would ask my noble and learned friend whether, when consulting with his colleagues, he could make that point to them. I renew my thanks to all your Lordships and I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Employment Policy
5.21 p.m.
Lord Jacques Lord Jacques rose to call attention to the importance to the nation of full employment and to the case for an annual employment budget which, inter alia, analyses unemployment and indicates what the Government are doing about it and what co-operation they need from both sides of industry; and to move for Papers.
The noble Lord said: My Lords, I rise to move the Motion standing in my name on the Order Paper. I am one who has always taken the view that one of the greatest needs of our country is full employment. I regard the demoralisation associated with unemployment as inconsistent with a civilised society. It is a special problem and one which ought to have special attention because of its importance.
In addition unemployment is a terrific waste. That was shown in the first 25 years after the last war. We had full employment; and we had the greatest increase in our standard of living in our history. That shows the amount of waste there would have been had we had a good deal of our resources lying idle. By employing the whole of our resources we were able not only to increase our standard of living to the highest in our history, but we were also able to initiate the welfare state. We initiated the welfare state during full employment because then people were paying taxes instead of drawing benefits. It is advisable that we should bear in mind that the welfare state has only existed under two sets of conditions: first, under full employment; and, secondly, under great subsidy from North Sea oil. Unless we take steps to get back to full employment—or something like full employment—before the oil runs out, we shall have the very greatest difficulty in maintaining a welfare state.
Because of the importance of the problem I have suggested that there should be an annual employment budget—an annual budget on employment policy. I have used the term "budget" because I want not only a review of what has happened in the previous year, but I want a project of what the Government intend in the subsequent year. For that reason I have used the term "budget"; but I should not mind if the term "report" were used, provided I got what I wanted.
I would expect such a report or budget to analyse employment and unemployment in various ways, according to the nature of the goods and services

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produced, and according to the region of the country in which they were produced. I would expect the analysis to be for the preceding and succeeding year. I would expect it to deal specifically with changes in structure which were giving rise to employment; and associated with that, to say what the Government had done in retraining and what they intended to do in the subsequent year.
That brings me to the whole question of training. I would expect such a budget or report to have a very important section dealing with training. The fact is that all research shows that so far as our leading competitors are concerned they are well ahead of us in training, and that it is one of the principal reasons why their productivity is greater.
I should like to see a long-term, very definite scheme of training at a very high level. I think that it should be the first priority of every polytechnic to encourage the exercise of the skills which are required in industry, especially in local industry, and to prepare the students for examination on a national basis. I do not want training which does not have the discipline of an examination. I want an examination and a national certificate which are acceptable to employers and for which employers are prepared to pay a premium when they employ the person concerned. Unless that is done in this definite way the training will not be as good as it ought to be.
We want training not only in the skills associated with industry, but training in management. I would say that every one of our universities in an industrial area should offer a postgraduate diploma in management, even if it is only a one-year course. I would say that a number of selected universities—probably half a dozen throughout the United Kingdom—should offer a three-year degree course in management. We have to get down to management, which is not as good as it should be. We have to take steps to make our management better.
After a section dealing with training I should like to see one dealing with industrial relations. We know as a fact that some of our competitors are able to have far better industrial relations than we have. Rather than confrontation we have to seek co-operation between the two sides of industry. There has to be partnership. An annual budget or an annual report on employment would tell us what progress had been made during the past year in improving industrial relations and what was expected in the coming year. For example, it would tell us what progress has been made in getting consultation between the two sides of industry in each of the firms; what kind of machinery we are setting up. Nothing would be laid down in statute. Let them do this in their own way, as long as they do it.
Arising out of that position, the report would tell us what progress has been made regarding flexibility of labour. Flexibility of labour is of exceptional importance in management. It would tell us what progress has been made in conciliation, where the parties do not agree and ultimately adopt arbitration rather than industrial action. We can get these matters through partnership. It is the duty of every Government to foster partnership in industry.
Next, I should like to see a section of the report dealing with new ideas to meet new problems that have arisen. For example, in a period of unemployment the workers seek reductions in hours. The employer very often resists reductions in hours because such reductions will increase his costs. Both have a very reasonable point of view. However, what is sometimes overlooked by both sides is that reduced hours will facilitate a two-shift system. If we have a two-shift system working on the same plant, we can save more than it costs to have the reduced hours. In other words, we must look for ways and means of employing more labour in relation to the same amount of capital.
Next, I would expect there to be a paragraph on rates of interest and the way in which rates of interest during the previous year have affected employment. I would want to know what action the Government have taken to try and get control of the rate of interest if it were causing unemployment, and what they expect the rate of interest to be during the next year and its effect upon employment. I would also expect a section dealing with the planned maintenance of the infrastructure of our country; how that will affect employment in the following year; and how it has affected employment in the past year.
Moreover, I would expect a section in the budget or report dealing with the exchange rate and the way in which in the past year the exchange rate has affected our imports and exports and, therefore, affected employment, and what the prospects are for the subsequent year. I would expect that analysis to deal with imports and exports in respect of each of the important nations with which we trade.
Finally, I would expect another section dealing with the inhibitions which are necessary in connection with international trade. In the last analysis we shall achieve full employment in the Western world only in so far as we are able adequately to control economic forces. We shall never achieve full employment if we allow economic forces to have full rein. There must be some control. It is best that that control should be on an international basis with international agreement. However, in so far as it cannot be by international agreement, it is sometimes necessary for sovereign states to take action in protection of the employment of their people.
I believe that the time will come when we shall have to take more action than we are taking now to protect the employment of our people. I accept immediately that once we start restricting international trade and reducing competition, we increase our costs. However, I also point out that if we are using the whole of our resources, we reduce our costs. Consequently, one compensates for the other. At present, for example, by agreement with other states we limit their imports to us of such things as textiles and motor cars. I should like to see a section in the report or budget dealing with what happened in the past year and what will happen in the future—in the next year—in relation to those agreements which protect the employment of our people.
In conclusion, I would say that this subject is of such great importance that it deserves an occasion once a year when the attention of Parliament and the media

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is focused upon it—indeed, when the attention of the whole nation is focused upon it—until we are able to resolve it to a far greater extent than we have up to now. My Lords, I beg to move for Papers.
5.34 p.m.
Lord Rochester: My Lords, I am sure that the whole House will wish me to congratulate the noble Lord, Lord Jacques, on having introduced the Motion. We have had many debates on employment and unemployment, but the noble Lord's rather novel approach—if I may put it that way—to the subject is most welcome and, as always, we admire the forthright way in which the noble Lord always speaks.
As I understand it, the basic concept underlying the Motion of the noble Lord, Lord Jacques, is that it is desirable to return to as full a state of employment as is compatible with a viable economy, and that the Government should be prepared periodically to indicate in a businesslike manner the various ways in which they are making progress towards that goal. I am happy to subscribe to that general principle.
In his speech, the noble Lord referred specifically to training as a means of improving employment prospects, and I should like to develop that theme. In a recent report which was commissioned jointly by the Manpower Services Commission and the National Economic Development Office, the authors wrote:
"We formed the impression that training managers themselves tended not to view their activities as being the cutting edge of the competitiveness of their firm—and nor do senior executives".
Furthermore, to judge from this report, training is often not seen as an investment leading to identifiable income. Indeed, many companies are apparently not even aware of the volume of their expenditure on training. To quote again from the report:
"More than a few of the training managers and personnel directors we interviewed told us that it was better that the full costs of their firm's training should not be made known to the board, because if it were, the board might wish to reduce it".
The authors put forward a number of proposals aimed at stimulating investment in training, including improved tax incentives for both companies and individuals, and a statutory requirement that companies should disclose in their annual reports how much they were spending on training.
The report concluded that there must be a positive will to change and that this would require clear leadership both from senior members of the business community and from government at the highest levels. If such leadership were not forthcoming, the authors saw no alternative to legislation to give statutory backing to some of the components of the strategy which they advocated. As regards this matter I do not think that we can afford to wait that long.
Ever since under the Education and Training Act 1981 the number of industrial training boards was reduced from 24 to, I think, seven, leaving training arrangements to be organised on a voluntary basis, I have been troubled by the absence of adequate national training standards. In my view the problem will not be solved without the imposition on companies of a training levy, remission of the levy to
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employers being made conditional on training conforming to certain specified criteria which should be framed so as to encourage an approach to training of an organic, problem-solving kind which focuses on objectives and on achievements. I do not, for my part, see how, without some such arrangement, we can as a nation either remain internationally competitive or achieve a substantial improvement in the employment position.
The noble Lord, Lord Young, may not agree with me but I feel entitled to ask him to say, when he replies to the debate, whether the Government are themselves satisfied with the current state of industrial training, particularly for adults, in updating their skills and knowledge to keep pace with new technology and, as the noble Lord, Lord Jacques, suggested, in the management of people and of change. If the Government are not so satisfied—and I am not here thinking of projects such as those with which the noble Lord, Lord Young, has been associated in such a distinguished way; I am not thinking of projects such as the Youth Training Scheme or the Community Programme, which mainly affect young people—I would ask what additional action, if the Government are not satisfied with the position in the area of adult training, they propose to take to remedy the situation.
Another matter which is highly relevant to this debate is the relationship between employment levels and pay determination. Here, too, I should like to refer to a report published last year by the Institute of Personnel Management, entitled, Pay and Unemployment. It has special relevance to that part of the Motion of the noble Lord, Lord Jacques, which calls for an indication of what co-operation the Government need from both sides of industry in tackling the problem of unemployment.
The view of the IPM is that the National Economic Development Council, whose meetings are attended by representatives of government, employers and trade unions, could promote a greater awareness among all sectors of the economy of the effects which reduced labour costs and increased productivity could have on job creation. The institute considers that if the movement out of recession is to be anything other than fragile, then employers and employees must agree effective output-related productivity deals, but the benefits of improved productivity should not be used solely to raise the real earnings of those in work. As the report of the institute puts it:
"Rather they should be shared between increased profits, dividends, wages and capital investment on the one hand, and the reduction of unit costs and prices on the other, with the specific aim of contributing to job creation."
The Government are rightly concerned that currently increases in pay are greatly in excess of the rate of inflation, yet they give no indication that the National Economic Development Council has an educative role to play in spreading, however informally, knowledge and understanding of the Government's own attitude towards pay and the implications of pay levels for employment.
One does not have to be a supporter of formalised incomes policies—the Institute of Personnel Management is not—to recognise the contribution which a national pay forum of this kind could make in

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seeking to promote realistic expectations regarding increases in pay and helping to avoid, in the words of the institute,
"The worst excesses of high unemployment, inflation, and uncompetitive costs."
Again I would ask the noble Lord, Lord Young, when he comes to reply, to comment specifically on this proposal as a means of withstanding political and economic change by maintaining continuity of policy, and in the long term increasing job opportunities and—a point rightly stressed by the noble Lord, Lord Jacques—also improving industrial relations in this country.
There is one other matter which I should briefly mention as a potential long-term contributor to the creation of more jobs because of the effect that it would have in improving this country's industrial performance. It is that companies should do more than they now appear to be doing to promote employee involvement. Because I have tabled an Unstarred Question on this subject so that it can be debated adequately, I shall say no more now than that, to judge from the latest relevant analysis, and indeed from statements recently made, as the noble Lord, Lord Young, will know, by the responsible Minister, the situation in this regard is, to say the least, disappointing.
I do not wish to end on a despondent note. It is only through co-operation between government, employers and employees that this complex problem of unemployment will be alleviated. In conclusion, therefore, I express the hope that in his reply the noble Lord the Secretary of State will respond as constructively as he can to the Motion before us.
5.47 p.m.
Lord Dean of Beswick: My Lords, may I also first congratulate my noble friend and colleague on this side of the House for introducing this subject for debate. It is well realised that it is the most important social problem that the country is facing at present. I was interested to hear some of my noble friend's proposals regarding measures for training on a mandatory basis, and that type of thing. I agree with the previous speaker too that it was a false economy for the Government to have butchered the original list of training boards, as they did, on the so-called premise of cutting public expenditure.
While I am all in favour of the Government's training schemes, and I think they are absolutely necessary, I do not think they will very much alter the present situation. Specialised training is needed more in certain industries today than a broad-based, two-year training programme, which could in some respects, if there was an upswing, produce an imbalance of youngsters available.
I should like to put a specific point to the Secretary of State regarding training at present and in the future, and concerning some persistent rumours. The disappointing unemployment figures are showing little, if any, decrease, and I think in a statement that the noble Lord, Lord Young, issued on 9th January, he ended by saying:
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"Next month will see the usual January seasonal increase, but overall in the last six months there has been little change in the level of unemployment and it still appears that the trend is broadly flat".
Those words do not accord with what the Chancellor of the Exchequer keeps saying. He keeps saying that things are improving so profoundly that we are on the way to a substantial recovery, but once again there has had to be an intervention and an increase in the bank rate with the adverse effect that that will have on industry. The Chancellor of the Exchequer appears to be wrong almost as persistently and as regularly as some of the weather men in their predictions.
People are getting a little sick and tired of hearing the Chancellor of the Exchequer and the Secretary of State for Industry when the report of a Select Committee of noble Lords was rubbished before anybody had a chance to have a look at it. People are getting a little tired of that type of behaviour and are asking for objective answers to some of these problems.
There are rumours persisting. One of the Cabinet Ministers was asked the other night whether it was true, because of the appalling and persistent unemployment trends, that the Government are considering doubling places on the Government training schemes. If that is true I hope it is not being done just as a cosmetic exercise to prepare the electorate for the forthcoming general election. If that was the reason—and after the election the same Government were in office and the present policies were pursued—it would mean that a tremendous number of people from the most disadvantaged groups (some of whom are the long-term unemployed, the size of which group is growing menacingly all the time) would be kidded and deceived disgracefully by the Government. This is worse than anything I have known in my lifetime, if that is the objective of that exercise. I ask Lord Young: Do the Government have this in mind and, if so, will he give us adequate reasons for doing it and assure us that it is not just an election gimmick?
This is the second debate that my noble friend Lord Jacques has initiated on this subject of unemployment during my short period in this House. The same points are being put persistently by some of us, that the Government's policies are wrong, that they have to change tack and that public money will have to be used. But the Government keep saying "no". Without going into detail I see that the CBI, which one could class as an organisation which supports the Government, was calling not for tax cuts yesterday (if there is any money available when the Budget is presented) but to plough the money back into industry and job creation. The CBI talked in terms of £1,000 million immediately. Some of us have held that view for a long time. Unemployment debates here and in another place become rather repetitive, because all that alters are the figures and they are still dangerously edging upwards.
Many noble Lords will remember, and I am sure the Secretary of State does, that just before Christmas a number of questions were raised regarding manufacturing industry. The Government were asked what percentage of new jobs—which the Government were, I am sure, entitled to announce and draw some comfort from—were in manufacturing industries. I

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believe the question was put by my noble colleague Lord Hatch. The figures were given by the Minister; I believe it was the noble Lord, Lord Trefgarne. Of the 628,000 jobs he quoted, just over 600,000 created no wealth because most of them were in the service industries and others were self employed. The total over that period in what I might call real jobs in manufacturing industries was just over 20,000. I submit that that is not a performance from which the Government can draw any comfort if they are talking about us once again becoming a wealth-producing nation.
The Government have the solution in their hands. I listened carefully to what my noble friend Lord Jacques said and I agreed with most of the proposals he made. But if they were implemented they would have no immediate effect on unemployment. He outlined a good strategy, but there is urgency about this. I find it odd because there could be substantial reductions in unemployment without using Government money, by letting some people use their own money that the Government are holding for them. I have a Question down for next week, asking the Government how much money they are now holding in capital receipts for local authorities from the sale of their own capital assets. The last time this was quoted the figure was £6 billion. The Chancellor of the Exchequer is so interested in cutting unemployment that he reduced the figure that was allowed to be drawn from the totals, and the interest of 40 per cent. was halved to 20 per cent. That only serves to exacerbate unemployment in building. Not only that; I understand that the figures are considerably more. They have grown because of the interest and the sales.
I read in one of the more responsible papers—and it was stated quite definitely—that there were strong rumours that while the Chancellor of the Exchequer was drawing together his autumn Statement he wanted to reduce still further that 20 per cent. to 15 per cent. but he was told by the new Secretary of State for the Environment, Mr. Kenneth Baker, that he would not support that and that it would be a nonsense.
That is a huge sum of money available that could be put into an industry that would take people off the dole queue quicker than could be done by any other industry. I am referring to the building industry. This debate is not about building, but that is the industry that successive governments have used as a regulator when they have wanted to cut public expenditure. They have just turned the tap down a bit, but the first people to feel the draught are always the building industry workers. However, they would be the first to feel the benefit and would start to train more apprentices.
I was discussing last night in this building with the chairman of one of our largest building companies what a realistic figure might be and what he considered the industry could cope with if money was made available. He said that within a month or two he thought we could increase this figure by a 2 per cent. load, then build on it and aggregate it. He is not suggesting, nor am I suggesting, that we should suddenly make up to £6 billion available and push it into the building industry because that would have a
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disastrous effect of overheating. If the Government were serious about reducing unemployment and discussed with the representatives of local authorities and the building industry what could realistically be done, I believe that a substantial number of those half a million building trade workers could quickly be taken off the dole and put back into necessary work. This would not only get unemployment down, but it would form an investment for the nation.
There is to be a debate shortly in your Lordships' House on the Duke of Edinburgh's commission on housing. I do not want to impinge on that debate or to pre-empt it, but the report only underlines all the other reports on the nation's stock of housing and public buildings and what has been said by other people. In total almost all the groups are non-politically motivated and they say that this is a necessary investment required for the health and the future of the nation. I suggest that if the Government are serious in their intention of getting unemployment down in real terms, they should enter into those discussions, put some money in and, I am sure, achieve the results.
It is sad to see what this nation has come to in manufacturing terms—I was a shop floor engineer. It led the world in the Industrial Revolution and just before and just after the war. In my own industry of general engineering there have been more jobs lost than in mining and steelworking put together. I believe I am right in thinking that the intake of apprentices to become skilled engineers in general engineering, which was always the biggest employer of apprentices, is down to one-fifth of what it was some 10 or 15 years ago. If that is not getting rid your seed corn in the worst possible way, I do not know what is.
I close in this way. I believe that the Secretary of State is sincere and serious about wanting to see those figures reduced. Will he have a little talk with his colleague in the Cabinet, the Chancellor of the Exchequer, and tell him to start giving some realistic prediction based on facts and come down from cloud-cuckooland?
6.1 p.m.
Lord Mellish: My Lords, this is the second time that I have the privilege of speaking in this House, and it is on a matter in which I am very interested and concerned. I am obliged to my noble friend Lord Jacques for raising it. What he said about full employment strikes at the hearts of all of us, at the heart of any man or woman in this country who is dissatisfied with the present level of unemployment. It cannot be allowed to continue. It is a disgrace; it is a slur to humanity. Let us be quite frank. There are no simple solutions. I wish there were. If there were simple solutions, the previous Labour Government would have found them, this Government would have found them—must have found them. One question that has to be asked—and we must try to answer it—is: what has caused the situation? What has created the position where even today a figure of something like 3 million unemployed is almost taken for granted in certain circles. Why should this be so?
I have lived on this earth for three score years and ten and I have seen some dramatic changes. I lived through the recession of the 1930s, not understanding much about that because I was a bit too young. Half

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my life has been spent in the political world and the other half has been spent in the trade union world; so I know a bit about industrial relations and I know a bit about politics. And then, of course, towards the end of the 1930s we saw the complete revolution of demand due to the coming war with Hitler and his cronies, and all that flowed from that. After the effects of the war, we saw this tremendous situation of consumer demand and full employment. We just did not have enough people.
That was the position right up to the early 1960s. What has happened since then? There has been a dramatic change in my whole existence. I never dreamt that I would see it. Take the dock industry, where I was born and lived. In the whole of the inner London area, the dock industry, with its thousands and thousands of decent men, is no longer there. It has been shut down. Why? I gave the reasons in my maiden speech. It was, of course, due to the economic factors, to the demand, to pressures from abroad, changes in work, changes in methods of loading and discharging ships. The truth is that London was completely uneconomic and unviable. We could not compete and therefore it was shut down.
I have been reading about this nonsense that is going on in the other place these days. I remember that throughout the whole period of the docks nobody ever discussed the industry. I was the only one who kept getting up and arguing about how it was that this great industry had shut down. However, there it was; it did shut down. This is relevant to part of what my noble friend Lord Jacques has said. What I am worried about—and I am proud of what is being done in the community, on youth, on the youth training scheme and the rest—is this. Does anybody care about ex-dockers? They did not leave that industry because they wanted to do so. It was taken away from them for the economic reasons I have given, and not because of bad management. Let me say at once that it was not because of bad management. It just was not a viable proposition, and thousands lost their jobs.
I want to ask the Employment Secretary what we are doing to train those who were dock workers and who knew how to load and discharge ships but who do not have the slightest idea of what is supposed to be done inside a factory, if there are any factories. What are we doing about adult training, for example? I get worried about that.
It is appropriate, in view of today's debate, that there was published this morning a number of reports. One of them, I noticed, is from Prince Philip. Some people regard his intervention in the world of industry and politics and what-have-you as an impertinence. I am not one of those who believe that to be so. I think it shows him to be highly intelligent and, whether or not one agrees with his views, at least one can admire the guts he has to say some of the things that he has said. One of the things he said was:
"Industry had suffered from an old-fashioned view that it was a rat race and involved working on a production line and living and working in uncomfortable surroundings".
That is the impression that people outside get, particularly of manufacturing industries. It is one which in my view is among the most important aspects of the
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challenge to industry to provide more employment. This important aspect is the conditions under which people work.
If one looks back, it seems only yesteryear that it was taken for granted that in the leather industry men worked in the cold, in the wet and in dirt. I had a great knowledge of the leather industry in my own constituency. One could not believe it. They worked in nearly a foot of water. It was incredible. Conditions of employment must be changed.
Prince Philip also said—and it is right:
"We're also suffering to an extent from an unintentional fall-out of Marxism which blames all the world's ills on capitalism. Capitalism is represented by industry, so industry is seen as being antisocial".
That is what the Prince said. And how right he is! This is the impression that has got about. If you work in a dirty job, somehow you are rather different; you are a bit menial. I can only ask the Government—and I do not know what future plans they have, if there are such things as plans for resolving problems of this kind—to take seriously the fact that Prince Philip has, I think, put his finger on it. The presentation of the case, the argument of manufacturing industry, in particular, as to how to attract people is conditioned on the way in which conditions of work are put over.
The CBI (and my noble friend Lord Dean referred to them) issued their report this morning. It is intriguing what they have said. They have asked that the Government should provide £1 billion for job creation measures and at least the same amount from the private sector. That is what they said. They said that this should create up to 330,000 jobs within two years. That brings me on to what I think is a fundamental point. Let us get this straight. Let us cut out all the party political jargon. We live in a mixed economy. We live in a society where a vast part of industry is private enterprise, and you have got to get private enterprise to work, to improve conditions and to provide the jobs. What can the Government do? I do not suggest they should pour in money, throw in money and say, "There it is". That is not the answer. We have to ask ourselves what we can do to ensure that private enterprise picks it up and spends its own money, as well as Government money, in providing jobs.
To be modest—although I have never been modest, for I found years ago that if I was not my own PR man nobody else would be—I like to think we can look back and say that we have an example here. I do not know why borough councils have not been brought in where you have derelict land. Why not encourage the purchase of that land and then make it available for development to private enterprise? We have done it on a vast scale. The Government—let us be fair and pay tribute here; we have had this argument before, but I had better get away from party politics—to their credit found £42 million in one year for us to buy land that was derelict. The moment we got that money and got the whole of that derelict land, we changed it. Today, we have a situation where in the Millwall docks, for example, where at the height of the dock industry there were 1,700 people working, there are now nearly 7,000. Not one part of it belongs to the Government. It belongs to private enterprise; because once it saw the land was available, once it saw that road access was

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there, once it saw that there was a possibility and a potential there, private enterprise was shrewd enough to see it as a good investment and it stepped in with its own money.
If we can do it in that small way, why cannot it be done on a much larger scale? For example, why can we not ensure some action over those local authorities which have acres and acres of land which are derelict? If I go into a diatribe about local authorities and their inactivity I really could take up a lot of the time of the House. However, the truth of it is that people are crying out for leverage to be given for these sorts of people to do a job of work. In the docks, for example, I understand a public inquiry is going on and so I must be careful what I say. The inquiry will decide on the compulsory purchase of all the land in the Royal group of docks.
Perhaps I may say that I am so impressed by what is now being said and done, because from the moment compulsory purchase order procedures were applied for, the PLA (they owned the land) said, "All right, we will sell." So they have sold two-thirds of the land as a result of the CPO procedure. That is very good and I am delighted to hear it. Let me say to the Minister that you can never, never regenerate unless you own. You must in the first instance own the land and provide the facilities—the roads, the sewers, the drains and everything possible on access. You must make certain that everything in the whole area is ready for this development, and then—and only then—will private enterprise come in.
I see that the corporation's director of operations was asking for land at Becton, Canning Town, George V Dock, and the Royal Albert Dock. He went on to say that the corporation has the ability to prepare land for development and make it available for private sector investment within an acceptable timescale. He added:
"The only effective way in which this regeneration can be brought about in dockland is by bringing forward cleared, accessed and serviced parcels of land so that private investment can be attracted."
That is the key, my Lords, and I am saying to the noble Lord, Lord Jacques, who raised this matter, that I am obliged to him for giving us the opportunity to discuss it; but let us all be realists. As I said at the beginning of my speech, there are no simple solutions: if there were, we would have found them. If people really believe that by pouring money into certain things they will find a solution, I am afraid they are wrong. It might work for a short time but we have to change the image of our nation and in particular we have to change the image of what is now called the "manufacturing industry outlook".
Conditions of work have to be improved. The noble Lord referred to industrial relations. I am all for sending management on courses but I think the time has well come when we might send some trade union officials there too. It only seems yesterday that I was appointed at the ripe old age of 21 to be a union official by Ernest Bevin, and I remember him talking to a very large crowd of trade union officials. He said things then that I wish Mr. Arthur Scargill could hear me saying now. I remember him saying some simple things. For example:
"Never pull men out on strike: any fool can do that. It is getting them back to work that matters."
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Another thing he said, which is to me very elementary and very simple, was this:
"Don't ever negotiate with a firm unless you know what the financial position of the firm is."
How right that is! If you are going to go in and argue with the firm and they have no money, you are wasting your time. I care about public relations and industrial relations. First of all, find out if they have any money, and if they have a few bob go in and "do 'em". But if they have not—for goodness sake!—that is another matter. And of course with state-owned industry this brings special problems because in many cases the boards are not answerable and they have to go back to the Government to get the final decision. So I would ask your Lordships not to raise the subject of state-owned industry.
However, may I say again to the noble Lord, Lord Jacques, first of all, "Thank you for raising the matter." It is a very important one and I hope very much we shall see what I call the realistic approach to this matter. I hope that the Minister will have something more to say when he comes to reply, as the noble Lord, Lord Rochester, pointed out quite rightly. I support every part of youth training. We are living today in an entirely different world from the one in which I have lived for the past 70 years. It is entirely different, and different demands are made. Adults today have to be trained in a different way. There has to be a different approach; and the idea that somehow Government itself, of its own volition, by pumping in money can provide work is not on.
What the Government have to do is to pump in money and make sure that private enterprise pick it up and also spend their own money in going ahead, because if you do not have that you have got to have an entirely different system. You have to abolish capitalism and bring in something else. But, my Lords, nobody here is advancing that theory—or are they? If they are, then let them say so. If you have a capitalist system you have to try and make it work, and the only way you make it work is by incentives.
6.15 p.m.
Lord Oram: My Lords, we are all grateful to my noble friend Lord Jacques for raising this subject and for doing so in that crisp, no nonsense style with which we are familiar and which we appreciate so much from him.
As the noble Lord, Lord Rochester, reminded the House, we have had a number of opportunities recently of discussing the problem of unemployment, whether at Question Time or in debate. The case of the Government, such as it is, is now well known and we shall no doubt hear it again this evening. The policies of the Opposition parties are also well known. What distinguishes my noble friend's Motion and his speech is the freshness and originality of what he had to say, together with the wording of his Motion, asking for an employment budget and subsequent Government action based upon the budget.
I hope that I may claim some credit for prompting this debate because it may have arisen in my noble friend's mind following some correspondence which I had with him a few months ago about the writings on employment policy of an American economist, John

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Pierson, whose ideas are claiming increasing attention in the United States.
The essence of John Pierson's proposal is that the starting point should be, as in the case of my noble friend's Motion, an annual commitment by the President of the United States and by Congress to the provision of jobs for all those able and willing to work, and that there should be a previously agreed series of economic and fiscal regulators which would automatically come into effect in the event that consumer expenditure either proved to be too little or excessively large to achieve that level and that pattern of employment which was proposed in the budget statement.
As I understand my noble friend, he has basically that same idea in mind although of course he speaks, as we all do, within the context of the British machinery of government rather than the American. But my noble friend, it seems to me, is saying in effect that the Government's approach to the unemployment problem is exactly the wrong way round; and I entirely agree with him in that proposition. The Government set themselves the wrong targets and the wrong priorities. They place their concern for levels of employment at the wrong end of the continuum of economic policy. They concern themselves primarily with inflation and, as a consequence of that, with money supply, taxation, the level of wages and the balance of payments.
All these things are of immense importance and quite rightly they are the concern of the Government. However, the level of employment—full employment or otherwise—is not regarded as an objective, as the other elements of economic policy are so regarded. It is regarded as the residual consequence of all the other elements. Therefore employment or unemployment is something with which the Government cannot directly concern themselves except at the edges of the problem, as with the youth training scheme or the community programme. I echo what has been said by the noble Lord, Lord Rochester, and by my noble friend Lord Dean of Beswick about those schemes.
That approach of the Government, to my mind, is putting the cart before the horse. The level of employment should not be the residual consequence of other factors: it should be the driving force and the motivator of economic policy, as well as being the raison d'être of the other elements of economic policy.
There are strong economic and social reasons for the pursuit of full employment, as my noble friends Lord Jacques and Lord Mellish have so clearly indicated. However, that should be pursued as the main objective and not merely as a by-product of what happens in the pursuit of other things.
Without full employment, there is what the economists are now calling the output gap which, as I understand it, means the difference between what is being produced in present conditions, in the conditions of mass unemployment, and what could, and should, be produced if all were productively employed. The gap between what is being done and what it is possible to do represents an enormous waste of resources. It is a waste of resources which partly causes, and certainly prevents us from curing, many of
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the economic and social evils which plague our society today: inflation itself; unbalanced budgets; high interest rates; industrial unrest; balance of payments problems; and not least—a subject of so much debate these days—social deprivation on a major scale; the erosion of the man-made infrastructure of society and of the natural environment in the countryside.
How then, if we follow my noble friend's reasoning about an employment budget, could it be implemented? As I see it, there would in effect be two budgets. There would be the manpower budget, or as the great Ernest Bevin once called it the human budget, and the normal financial budget; and that financial budget should be geared to the requirements of the manpower budget. The Department of Employment and the Employment Minister would be a force in the machinery of government as powerful as the Treasury and the Chancellor of the Exchequer. That may appeal to the noble Lord when he replies to the debate.
The manpower budget would be as detailed and as fully prepared as the financial budget is today. It would, as my noble friend Lord Jacques explained, take into review all the skilled and unskilled labour available throughout the economy and would compare it with the industrial and commercial needs of society. There would be identified gaps between the two and mismatches; and the manpower budget would indicate the changes in the pattern of labour deployment that needed to be brought about.
There would in my judgment be an annual Employment Bill which would be subject to as much parliamentary scrutiny and argument as the present Finance Bill, and the two would form an integrated whole with fiscal measures appropriate for the achievement of the manpower objectives. For this purpose, the Chancellor should have at his disposal an armoury of previously agreed regulators, including public works, which could be called into action in response to signals from the employment situation as it develops over the ensuing year.
That as I see it is a sketch of the role of government as envisaged by my noble friend. But, quite rightly, he goes on in his Motion to point to the need for co-operation from both sides of industry. On that theme, we do not need reminding that one of the root problems affecting the economy today is, and has been for all too long, the frequent confrontation between employees and employers. The cause of that confrontation, with increasing frequency, is not so much wage demands and disputes over wages, but the determination by the workforce to protect their jobs, and that is a very understandable determination. We saw it last year on a very large scale in the mining industry, and we see it today on a lesser but vital scale in the Gartcosh dispute.
It is the protection of jobs which is in the workers' minds. All the time that unemployment is at its present intolerable level, fear of life on the dole will be a major cause of restrictive practices and of strikes, and that will constantly stand in the way of that increased efficiency and competitiveness for which Ministers are for ever asking and for which they are quite right to ask.
But if the Government were seen to be giving priority to the proposition of jobs for all as their

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primary objective, I believe that it would remove one of the chief obstacles to harmony in industry and to moderation in wage demands. But more important, it would, I believe, restore to those millions of our citizens who are at present wasting in the dole queues one of what I regard as the most basic of human rights—the right to have a job in which to express yourself and to earn your living.
6.16 p.m.
Lord Roberthall: My Lords, like all the other speakers we have heard so far, I think we should welcome the initiative of the noble Lord, Lord Jacques, in introducing another debate on unemployment. We have had a good many, and we shall have a good many more. That is because it is the most important and difficult subject that we have before us.
When I first read the Motion before us tonight, I did not realise how ambitious the noble Lord was being. It seemed to me that to produce the kind of budget that he has in mind you would need another enormous Government department. We saw that once when the noble Lord, Lord Wilson of Rievaulx, set up the Ministry of Production, and we know what happened to that. But I also thought that this was not really a question of the machinery of government, which I at first thought was what the noble Lord was advocating. The structure for having an employment budget is in existence already. We enjoyed it, or suffered from it, in this country, if you like to put it in that way, over the whole period from 1947 to 1975–76.
That was because the Government were pledged in the 1944 White Paper to the policy that they accepted responsibility for maintaining a high and stable level of employment. For many years, governments honoured that pledge, maybe because in those days it was thought that it would be political suicide to let unemployment rise. But I also think that there was a sort of agreement on both sides in the country that that was the most important economic objective at which to aim.
The Budgets that Chancellors of the Exchequer introduced during that period were the sort of employment Budgets which the noble Lord has in mind today. The state of the economy was examined and the constraints on it provided by the balance of payments and, to some extent, increasingly as time went on, by inflation, were set against the target of maintaining the level of employment. That is what the Chancellor set out to do, and for a number of years I had the honour of helping to write the speeches on that subject.
What has changed is not that the machinery has gone to pieces but that the objectives have gone to pieces. The noble Lord, Lord Oram, has already said in the course of his remarks the kind of things that I was going to say on the subject, but I should like to say a little more on it. It is very difficult to know what is the Government's economic policy at present, because they have changed it a number of times. It used to concentrate on sterling M3. Then it concentrated on the public sector borrowing requirement. Now, as I understand it, it concentrates on exchange rates. It is certainly said a good deal at present that what we really require is a reduction in the real wage rates. One can
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understand this being put forward by a Government who are so keen on the market, because it is said that if there is a surplus of anything one can always clear the market by reducing its price.
When I was a young economist in about 1930 the argument among economists was on this very point. That very remedy was being put forward by a group of economists centred mainly at the London School of Economics. Other economists, of whom I was one, were accepting the views put forward by Lord Keynes. From then onwards the views of Lord Keynes were more generally accepted and took shape in the form of the 1944 White Paper which governments endeavoured to follow for the period which have I mentioned.
We had a Budget which was a review of the economy, but it was considered from the point of view of the target of maintaining the level of employment. As we all know, that led gradually but with an accelerating rate to the growth of inflation at a rate that became alarming. This Government then came in pledged to put the control of inflation at the head of their policy. They had some success for a while. They have brought the inflation rate down to about 5 per cent., and as long as the exchange rate is high inflation may even go a little below that. The trouble is that we have shifted our priorities. We are looking at the matter primarily from the point of view of inflation.
I should like to mention what I think is the view now that it ought to be by a lowering of the price of wages that we solve the problem. As I said, this was a controversial view but was accepted. Lord Keynes said that what applies to a single commodity in the market does not apply to the whole number of commodities which constitute the national income. There, the condition for full employment is that all who receive incomes will spend them either on consumption or on investment. If they change what economists call their liquidity preference—their desire to hold money rather than buy goods—there will be a deficiency of demand. That led to the policy which was adopted by so many governments of using the Budget as a kind of balancing force. If there was a deficiency of demand, you inserted some; if there was too much and you were having a boom, you took some out.
We are back now to this controversy of the 1930s which for a long time we thought had been solved by Keynes. The difficulty now is that the country is divided on the question of putting some kind of stimulus into the economy, which could not do very much at first. This is one of the policies on which the Alliance and the Labour Party tend to agree. One needs to put some stimulus into the economy, because while there is a real deficiency of demand the problem will not be solved. This is very important, and it is very important to the noble Lord, Lord Young, who is to reply to the debate tonight. We have a great respect for the noble Lord, Lord Young—if he does not mind that being said from this side. Anybody who knows anything about him would not say that his heart is not in his job and that he does not feel very much for unemployment. Whatever tears may come from other places, the tears of the noble Lord are never crocodile tears. If what is wrong is a deficiency of demand and not high wages, his labours will come to nothing.

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We admire very much his concern for the long-term unemployed. The noble Lord is in a very difficult position, because there never were long-term unemployed in the period to which I have referred. All school-leavers could get a job quite easily. If there is a heavy load of unemployment which is going to hang around our necks, whatever the noble Lord does he will be dragged back. The noble Lord trains them (and it is an admirable thing to train them) but if there are not jobs for them all when they come to look for jobs they will feed into the pool of the long-term unemployed, which, as I say, we never had before—the 1,400,000 who have been out of work—and he will not be able to get them back into work so long as the underlying conditions are so serious. The pool will not stabilise until those coming on to the labour market and not getting jobs every year equal in number the ones who are leaving at the other end.
It is important that we should be able to make up our minds between these two alternative views. Needless to say, I believe that there is a deficiency of demand and I believe that the methods that were adopted in the period to which I referred were basically the right ones. There are great difficulties, of which the principal one, the one which caused the collapse of the old policy, was the accelerating rate of inflation. This was due in my opinion to the failure of the incomes policies. We ought now to look at it in terms of never having full employment again until we succeed in conquering the problem of incomes policy. The result is that the country is now deeply divided in a way it never was before. Both Conservative and Labour governments at one time were agreed on the importance of a high level of employment. If they were not agreed on it, the country was agreed on it and so they had to conceal it. What we ought to be addressing our minds to is how to give a stimulus without getting back to inflationary conditions. The Government are not telling us how to do that. They are not offering any hope to anyone. They are saying, "You will get lower wages and perhaps you will get full employment".
My time is up. I shall leave it at that except to say that these divisions in the country are doing a lot of harm and it must be a bleak outlook if we have a period where there is one fundamental economic policy from a government who, in the end, are turned out by the electorate, so that we get another fundamentally different policy—with each preparing a much more difficult situation for the one who follows.
6.40 p.m.
Baroness Lockwood: My Lords, I, too, should like to thank my noble friend Lord Jacques for introducing this debate and for the way in which he introduced it.
I think that whatever may be our differences on policy and on methods there can be little disagreement among us about the importance to the nation of improving the unemployment situation. Both my noble friends Lord Jacques and Lord Oram referred to the enormous waste of human resources when we have such a high level of unemployment. My noble friend Lord Jacques referred to the demoralisation of those involved—those who are unemployed—and the lack of confidence and self-respect which becomes a feature of unemployment. On those matters I think we are all agreed and are all concerned.
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My noble friend went on to call for an annual employment budget which could analyse employment and unemployment trends, examine the action of the Government and look at the co-operation that would be needed from the two sides of industry. He listed a number of very pertinent components to this budget. My noble friend Lord Oram expanded on the advantages of having such a budget. I support this because I think it would enable us to have an overall view of the problems and be able to monitor progress and what needs to be done.
This evening, however, I should like to deal with two aspects of the problem as I see it. First, I should like to look at some of the features of the employment and unemployment situations and, secondly, I should like to consider in, I hope, a positive way some of the possible remedies. If we look at the Government's approach to employment policies, a cornerstone of that policy is to encourage more flexibility in the labour market. I think it would be true to say that nobody is more keen on this than the noble Lord the Secretary of State. Consequently, he takes some pride in telling us of the number of jobs that have been created.
According to the November issue of the Department of Employment Gazette about 670,000 more people were in employment in March last than in the March of the previous year. I think we need to look a little more carefully at the problems behind this and at the situation here. This growth has come in the service industries—solely in the service industries. I would not complain about that if there was not a decline in employment in other industries; for instance, that same Department of Employment Gazette tells us that there has been a decline in employment in the manufacturing sector and in the construction industry. The construction industry is very important, as my noble friend Lord Dean said.
The increase is, of course, almost wholly in part-time work. In the statistics a part-time worker equals a whole employment unit. The increase is largely among women. In fact, between June 1984 and June 1985 there was a decline in male employment. Again, I do not complain about the increase in the number of women in the labour market, nor about the fact that they are involved in part-time employment. I do not complain about that on principle because, like the Minister, I see a need for a more flexible labour market.
Having said that, my agreement with the Minister ends. I think his concept of a flexible labour market and his reasons for wanting a flexible labour market are quite different from mine. I suspect that the Minister's concern is to reduce labour costs. He finds that this is difficult to do through an almost entirely full-time labour market and that it is easier to work through part-time workers. The fact that it is easier to work through part-timers is perhaps a cause for reflection and one that should be an incentive to my trade union friends to do more recruiting among part-time workers.
However, my reason for supporting flexibility is to assist those who need part-time work—parents, women in particular, who should be enabled to combine parental responsibility with an outside job in the labour market. My concept of a flexible labour

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market combines full-time and part-time employment and includes job sharing. It also includes the same pro rata rate of pay for the job: in other words, both full and part-time workers would receive the same rates of pay. Often that does not happen, and there is evidence to prove this. It would include pro rata holiday and sick pay entitlement. It would include pro rata entitlement to entry into a pension scheme and it would include the same opportunities for training and for promotion. In other words, the part-time employee would be fully integrated into the labour market.
The present situation is entirely different. There was a recent review of part-time workers, which only gives the position in 1982 (and since then the number of part-time workers has increased considerably) but the report indicated that at that time 35 per cent. of part-time women employees had earnings too low to require national insurance contributions. This means that there is no security for them if they become unemployed and that there is no eligibility for them to enter a community scheme. Very often there is no eligibility for entering a pension scheme and certainly no career prospects. Therefore, the growth of flexibility and position of part-time employment in this country is entirely different from the way in which I should like to see it develop. I think that it is an unacceptable trend. An annual employment budget would, I hope, be capable of exposing some of those problems and pointing to possible remedies.
I move now to my second concern, which follows on from my first concern—that is, having an expanding and a more efficient labour market. This means more investment, both by Government organisations and by private organisations, in new technological processes in both the service and the manufacturing sectors.
Like most of the speakers so far, I think it is important for the Government to help stimulate this process of expansion, and, like the noble Lord, Lord Rochester, I accept what has been done under the YTS scheme, under the Community Programme Scheme, and under the various schemes to assist and encourage the growth of small firms. All these might be good so far as they go, but they are no substitute for the kind of approach about which the noble Lord, Lord Oram, was talking, or, if I may say so, the kind of approach that the CBI were recommending in the report which was published this morning. The CBI list three priorities, and the first and overriding priority that they have is a package of measures to reduce unemployment and to stimulate more employment. What the CBI have said in their report today is what they have been saying on a number of occasions in the past and what other organisations have been saying. One hopes that, having had this said time and again, the Government will begin to take note of it and give some priority to being much more positive in their approach.
However, I think there is also another problem which is related to this. Nineteen eighty-six is Industry Year, which is encouraging us to become more industry-oriented in this country. It might have been better if we had called it "British Industry Year" and become more oriented not only toward the culture of industry but toward buying the products of British industry. If your Lordships will forgive me, I think we might start here in this House—or at least in your
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Lordships' car park, where, if we look round carefully—and it is no better in another place—we shall see that it pays no tribute to British industry. Neither is it an indication of our loyalty and our faith in British industry. I think that both the manufacturing and the service sectors need to do something about the growing trend away from British goods: manufacturing industry by improving the quality control within the manufacturing process, and service industry by providing the services that consumers require.
I can give a very vivid, personal illustration of this situation. Over the Christmas period, which is one of goodwill, gifts and so on, we decided to have a new kitchen in our home. We looked round for a British firm that could provide us with the kitchen units and fortunately we found one or two—and very good units they were providing, too—but when we looked more closely, we found that all the companies which we considered were providing electrical equipment which came from abroad. Not one of them, apart from the electricity board, was putting forward British electrical goods.
I think that that is absolutely outrageous. It is just not good enough. When we asked the firms, "Why are you not providing British equipment and suggesting British equipment?" they replied, "Well, the quality is not as good and the servicing is not as good." So, if one could perhaps use the phraseology of an impeccable source: it really is time that we got our finger out.
Only last night I received the latest information sheet from the Think British Campaign, which indicated the number of areas where imports were overtaking British goods. It indicated that, if all the 20,000 million or so households in the United Kingdom switched £3 per week in their expenditure from imported to British goods, thereby reducing the average weekly expenditure on imports from £28 to £25 per household per week, 350,000 jobs could be created in two years. I think that we ought to take issues like this very seriously indeed. It is a threefold responsibility: for all of us in our capacity as consumers and for those of us who also have a capacity as managers or as employees. I think that this problem falls very squarely within the terms of the debate this evening.
6.55 p.m.
Lord Kagan: My Lords, my noble friend Lord Jacques called for a budget and an analysis. It is a timely call and we do require a fundamental analysis, but it is also a fact that the number of jobs that we are seeking for full employment are not there and that they are not going to be there. In 1964 Britain still had 14 million manual workers. In 1973 the number in manufacturing industry had been reduced to 7½ million workers; in 1980 it was 6½ million; and in 1985 it was 5·35 million. Yet this declining number of people produced approximately the same quantity of goods right through those years. In fact, in 1985, with a labour force which was 20 per cent. less, we produced 4 per cent. more in quantity than we did in 1980.
This trend is consistent, relentless and accelerating. No political dogma or theology and no manifesto resolutions will change that. One has to be careful not

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to dodge that essential fact. The answer to unemployment is not the dole; but it is not jobs as we are discussing them. The answer to unemployment is activity—useful activity. This can only be created by an economy such as the Japanese, the Swiss or the German economy. We must not say that it cannot be done. They have done it. The Japanese have done it, though they have no coal and no oil. The Swiss have done it, though they have no raw materials whatsoever. So it is in our power to do it if we want to. And we must not want to squander our resources on disagreeing with each other rather than getting on with the job. I was very much impressed with the courage of my noble friend Lord Mellish who made that point, and who has the stature to do it.
The future worker, the future wealth creator and the future taxpayer will be the robot and the computer. We cannot avoid it, and it is not a bad thing, because if that creates the wealth, then we can promote the social services and undertake other activities such as the complete renewal of the infrastructure, new roads and new sewers. But this cannot come from an impoverished economy and from an artificial finding of jobs.
In my own town of Huddersfield I can point to a factory which is now making 18 per cent. more goods with 22 per cent. of the labour force that they had five years ago. This is fact, and this we have to face.
In order to achieve the kind of economy that will give us the wealth to create the jobs that we are talking about we need to be advanced in technology and in science. That is where the great opportunity and danger is. Although once upon a time we had the lead, we are slipping back slowly. A great deal depends on education, and education has to be encouraged and funded on as high a priority as defence. In the long term that is where the impetus will lie. There is no market in the world for second rate technology or for science which is not up to date. In this field only four-minute milers will do, not four-minute-and-10-second milers.
We live and survive by exports, and we have to encourage them. It has been suggested that restrictions on imports may help. Trade barriers are not an option open to England any more than air-conditioning is an option open to a hotel with open windows. We live by buying and selling.
I can only repeat that we do not need to search for the means to do this. We should take a look at the Swiss, the Japanese and the Germans to see what they have done. If we fail to do that, perhaps noble Lords on both sides of the House should buy Gibbon's Decline and Fall of the Roman Empire and console themselves by reading it.
7.2 p.m.
Lord McCarthy: My Lords, the task of somebody on this side of the House in replying to a debate of this kind, I suppose, should be discharged in three ways. The first is to thank the proposer of the Motion, which I do most heartily, and I congratulate the noble Lord, Lord Jacques, as my noble friend Lord Oram said, on putting the case in his usual crisp, no-nonsense way. The second is to summarise, as I see it, the nub of the case that has been put from this side of the House; and
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I shall do that in a moment. The third is to reply to those who have opposed the Motion—and here I am in a difficulty because nobody has actually opposed it.
I agree with what the noble Lord, Lord Rochester, said about the relationship between pay and employment. I agree with what my noble friend Lord Dean said about the need for urgent action; with what the noble Lord, Lord Mellish, said about the need for a realistic partnership between private industry and the state; and with what my noble friend Lord Oram said as he developed and explained the original idea of the noble Lord, Lord Jacques. I agree with the noble Lord, Lord Roberthall, that once upon a time we had an early de facto version of an incomes policy. I agree with the noble Baroness, Lady Lockwood, that there is a case for more flexibility and more protection, particularly for part-time workers; and I agree with the last speaker that everybody is much better off for reading Gibbon's Decline and Fall of the Roman Empire. But none of them opposed the Motion. Therefore I have to imagine what the opposition to the Motion will be.
Of course there may be no opposition. The noble Lord who speaks for the Department of Employment may get up in a little while and tell us that the Government will have a national employment budget and do all the things that the noble Lord, Lord Jacques, wants done. But I am not sure, and I have to try to anticipate. First of all, what is the central focus of what is being said? It is that there should be an annual employment budget; that it would have three central advantages; and that it would focus the minds of everybody (Ministers, civil servants, trade unionists and employers) on the importance of the employment objective and put it back into the centre of politics. Secondly, it would enable us to spell out a series of targets to measure our progress towards that objective. Thirdly—and I thought that these were the most interesting aspects which the noble Lord, Lord Jacques, did not have enough time to develop—it would emphasise the link between employment and other policies; between employment and training, which the noble Lord mentioned, management education, industrial democracy, partnership in industry, and even such things as the rate of interest and the rate of sterling.
What can be said against all that? It seems to me that there are only two things, and to some extent they have been said in other places by Government spokesmen. The first is that it has never been done, despite what the noble Lord, Lord Roberthall, says, in the way suggested by the noble Lord, Lord Jacques, and it certainly has not been done in any way for some time. It was not even done, it might be said—and indeed it has been said from the other side from time to time—by the last Labour Government.
Secondly—and I suppose that in a way this relates to the first point—it could not be done now because employment is such an imprecise thing. It is such a difficult thing to anticipate. It depends on so many other things that to issue targets of the sort that the noble Lord, Lord Jacques, suggests, is a waste of time. That was the view put forward in the Government's blue paper, Employment: The Challenge to the Nation, on page 4, when the Treasury said that employment levels are not pre-ordained. They depend upon:

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"our enterprise, our adaptability, our control of inflation, our productivity, our wage moderation, our competitiveness".
I do not think that either of those arguments stands up. On the first, it is true that the Labour Government of 1974 to 1979 did not offer systematic overall estimates of the kind that would be involved in the acceptance of this Motion, but they gave estimates from time to time. They also stressed their determination to avoid using unemployment as a central instrument of policy. Because they declared this intention, and because they acted upon it, they had to have another policy—and here one goes back to what the noble Lord, Lord Roberthall, was saying—for dealing with the problem of inflation. That policy was an incomes policy. It was an incomes policy, rather than an unemployment policy, that was used by the previous Government to reduce the rate of price and wage increases in the years between 1975 and 1978, and they were successful.
Because they were successful in doing that, they were able as a deliberate act of policy in 1977 to see a reduction in the rate of unemployment (an increase in the level of employment) which was repeated in broad terms in 1978. It may be said by the other side that that policy ran into difficulties in 1979. I do not deny that. What I am saying is that the policy of the late Labour Government was not to use unemployment as an instrument of policy to reduce inflation. The central difference between us, and the central issue which the Government would have to accept if they accepted the Motion of the noble Lord tonight, is that unemployment should not be used as an instrument of policy. It is because this Government have used unemployment as an instrument of policy that, while the level of inflation has gone down significantly in the past two years, the level of unemployment has inexorably risen and is likely to remain, if not above, at least at the present level for the next two years.
The second difference that is directly relevant to this debate is that from time to time a Labour Government did give estimates of where they thought the level of employment would be—not only estimates of the level of employment, such as the ones that Mr. Healey gave in his Budget Statements in 1975 and 1977, but also estimates of the impact or likely impact of the measures that the Government themselves took. This is where the noble Lord, Lord Young, could help us tonight. Even if he says that he cannot agree to an employment Budget of the kind that my noble friend Lord Jacques suggests because unemployment is an imprecise thing, surely, the Government could do much more than they do to tell us the anticipated consequences of their own measures.
I realise that the Government do something to tell us about the consequences of some of their measures. In particular, they tell us what they think is going to be the employment effect of the job creation programme and the youth training scheme. That is fine. But they do not say what they consider to be the employment consequences of the Budget changes. The Chancellor did not tell us in the last Budget what he thought would be the employment consequences of the change in national insurance contributions. All kinds of unofficial organisations speculated on what would be
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the consequences of those changes. But the Government left us in the dark. We do not really know what the Government expect to be the likely consequences of those changes of policy relating to national insurance contributions and others introduced in the Budget. I believe that the Government could go some way in meeting the measures and the ideas that have received considerable support in the House this evening if they were prepared to do so.
The Government could also tell us what they think about the general feeling among all independent forecasters—for example, the London Business School, the National Institute, the Institute of Fiscal Studies and the CBI—about the fact that tax cuts are about one-fifth or one-sixth as job creative as public expenditure and that they have less effect on the retail price index and less effect on the balance of payments. Do the Government think that this is so? Or do the Government maintain that tax cuts of the kind that the Chancellor is toying with are every bit as job creative as selective public expenditure? If they think so, then what are the likely employment consequences of cuts in public expenditure as against cuts in taxation from the Government's point of view? We have not been given authoritative responses and arguments about these things.
Finally, there were two questions that I asked the Leader of the House on the last ocasion that the subject of unemployment was discussed in this House to which we have not received any answers. It is inherent in the kind of approach that my noble friend Lord Jacques has made today that we should expect to get answers of that sort. I should like therefore to put those questions once more back again at the Secretary of State. The House will know that it is part of the Government's policy to argue—this has been mentioned by speakers from the other side tonight—that what we have to do is to get the level of wages down. It is sometimes not clear whether what we have to get down is the level of real wages or the rate of increase in money wages. The rate of increase in money wages has been coming down for a long time, and the rate of increase in employment has been going up for a long time. The Government therefore tend to fall back on the argument about real wages.
I asked the Leader of the House, at col. 283 of the Official Report for 13th November:
"Suppose the Government still believe that if we can get the level of wages down we can get the level of employment up. Suppose they do not dispute my assertion that the level of wages was falling until the last two years, and that it is almost certainly going to rise next year".
This is the crux of the question that I should like to put to the Secretary of State. I quote again:
"In his opinion, what is the level of pay increases that the Government would like to see in the next two years if the level of employment is, first, to be stabilised or, secondly, reduced?"
What is the relationship that the Government consider exists between the level of wages and the level of employment? If there were an employment Budget, that would have to be stated. Even without an employment Budget, it could be stated to us tonight.
Or let us take the last set of measures which the Chancellor of the Exchequer gave in his Autumn Statement on 12th November. Once again, we were

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not told what the employment consequences of those measures were. Once again, there were many speculations by unofficial organisations about whether the Autumn Statement was inflationary or deflationary, whether it created employment or whether it did not.
In an effort to find out, at col. 281 of the Official Report for the same day, I asked the Leader of the House. I quote again:
"I should like the Leader of the House to tell me: what is the net job worth of the additions in public expenditure which were announced last night?"
—that is to say, in the Autumn Statement.
"I hope the Leader of the House can tell us that. This £4.5 billion increase seems to be not an increase on last year, but an increase in previously announced targets".
I was saying that we did not really know which it was. I added:
"Half of it seems to be going either in social security payments because inflation was wrongly forecast or because the Government underestimated the cost of the miners' strike. But, never mind, let us not worry about the details".
My noble friend Lord Jacques would say, of course, that we should worry. I said:
"Can the Government tell us whether there will be a single additional worker employed in the National Health Service or in local government or in repairing houses as a result of the increases in previously announced targets which the Government announced yesterday?".
This is the essence of what is being suggested. What my noble friend Lord Jacques is asking for, in a sense, is another bit of open government. What he is asking for is an end to subterfuge, an end to pretence, an end to talking about employment rather than unemployment, an end to stressing the number of new jobs rather than the old, abandoned long-term unemployed, a return to an attempt on the part of the Government to take responsibility for the level of employment and to spell out what are the consequences of their own policies on the level of employment. It was King John, Shakespeare tells us, who said:
"How oft the sight of means to do ill deeds makes ill deeds done".
What we are suggesting here is that the converse is true in politics, that the realisation that there is a means to do both good deeds and bad deeds, spelt out and quantified, so far as this can be done, may help to change both policies and attitudes, even the policies and attitudes of those who say, "There is no alternative".
The Duke of Norfolk: My Lords, before the noble Lords sits down, if it is in order I would very much like to ask if he really believes that it is the policy of the Government to try to get wages down. I would suggest that it is the policy of the Government to try to get costs down. I took the greatest exception when the noble Lord said earlier in his speech that the Government were using unemployment as a means of dealing with inflation. I have often heard the noble Lord speak. I cannot make a speech now. I have not been able to be here. I really believe, however, that it is quite wrong to suggest that the Government wish to get wages down. The Government want to get costs down. The need for this is illustrated in our country by the way in which Jimmy Reid caused the Clyde
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shipping to go wrong and by the way Jack Dash transferred the docks to Rotterdam by trying to perpetuate out-of-date means of employment.
Lord McCarthy: My Lords, the noble Duke asks me these questions, and I must therefore be allowed to answer them as briefly as I can. If the noble Duke will look at a review by Treasury officials on the relationship between employment and wages which was published by the Government he will see that there the Chancellor argues that there is a relationship between the rate of increase in money wages and real wages and the rate of increase in employment. Also, the noble Duke will find that quite recently. In another place, the Minister of State for Employment said that if only the level of wages had not risen as fast as it did over the last few years we could now have a million more people in employment. This is what the Government said. It is not so much a cut in wages that is asked for as a reduction in the rate of increase in wages and in particular a reduction in real wages. That is Government policy.
7.21 p.m.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, before I address the subject of this debate today may I join my noble friend in saying that I reject utterly any statement that this Government would use unemployment as an instrument of policy. Nothing could be further from the thought of any member of the Government, nor I believe in any Government of a civilised society.
The noble Lord, Lord McCarthy, quoted from a Treasury report. That report—on which I shall comment later—makes a very real but utterly different point from that of the noble Lord. It is simply that the more those of us in employment pay ourselves above the rate of inflation, or whatever, without unit costs going down, the more we shall encourage the increase in the number of those who are unemployed.
But apart from that one single point I very much welcome this debate. There is no issue in our land today more important than the creation of jobs. There is no problem more urgent than that of unemployment. But whatever our differences as to means, the objective of achieving the highest possible level of employment has been common ground between all political parties and all economic philosophies for 40 years or more. Perhaps I could say to the noble Lord, Lord Roberthall, it is common ground today that where we differ—and I suspect differ fundamentally—is the means under which we can achieve the highest possible level of employment.
I take that phrase because it is part of and included in Lord Beveridge's 1944 White Paper on employment policy. I chose those words deliberately because I should like to quote two further sentences from the same Paper:
"Employment cannot be created by Act of Parliament or by Government action alone. Without a rising standard of industrial efficiency we cannot achieve a high level of employment combined with a rising standard of living".
There could be no clearer statement of the link between employment and competitiveness. The message of the 1944 White Paper is every bit as relevant now as it was then. Lord Beveridge was

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writing about an economy weakened and distorted by five years of war. In the 1980s we face the problems of an economy weakened and distorted by decades of inflation and high wage settlements but low productivity.
We have suffered precisely because of our failure to heed the simple message that Lord Beveridge spelled out in his White paper. We have paid the price. The price, as Lord Beveridge predicted, was paid in unemployment. It is all there in those two sentences. We cannot remind ourselves too often of that simple truth. That is why I welcome this debate. It has not been a long debate but it has ranged widely and, as befits the subject, it has been both thoughtful and thought provoking.
I am grateful to the noble Lord, Lord Jacques, for his Motion, but I hope that he will not think me discourteous if I say that, as I read his Motion, I had a sinking feeling when I came to the words "annual employment budget". The noble Lord, Lord Oram, said that the Government get things back to front. The more I heard from the noble Lord, and the more I too began to think back—and as your Lordships may know I try to avoid nostalgia; indeed, I believe it to be one of the most debilitating features of our national character—the words "annual employment budget" remind me irresistibly of the 1960s, the heyday of centralised economic planning, and the attempt to achieve economic growth by Government decree and artificial consensus.
That was the era of the 1965 National Plan. What memories that brings back. I remind the noble Lord, Lord Roberthall, not of the noble Lord, Lord Wilson, but of the late Lord George-Brown, of the Department of Economic Affairs. That plan embraced every detail of economic life but was rendered meaningless by the tide of economic events before the printers' ink was dry. Some of your Lordships will recall that the National Plan identified a gap of 200,000 people between the demand for and a likely supply of labour; in other words, a shortage of 200,000 people. In the 18 months between the middle of 1965 and January 1967 unemployment rose by more than 300,000 and the manpower gap was quickly forgotten.
No one, except possibly the noble Lord, Lord McCarthy, seriously imagines that we could return to that brave old world. The proposal of the noble Lord, Lord Jacques, is, I understand, much more modest. The noble Lord rightly emphasised the need for training; and I agree with him. I hope that the youth training scheme and the work that we are doing throughout the field of training shows how much the Government agree with him.
The noble Lord rightly emphasised the need for partnership. I agree again because that very self-same youth training scheme was designed by the unions and the employers together. The noble Lord rightly emphasised the need for good industrial relations. Once again I need hardly remind the noble Lord and your Lordships' House that in the first 11 months of 1985 we experienced the lowest number of industrial disputes in any year since 1936. That shows that there is a new spirit spreading throughout the land.
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The noble Lord, Lord Rochester, referred to the report financed partly by and authored partly by the Manpower Services Commission and by Neddy on competence and composition, and the difficulty we have in making employers accept the sheer economic sense of training. The noble Lord asked me whether I was satisfied with the current level of adult training. I am not, and neither are the Government. What we must do is find the best way and the best method of increasing it.
The noble Lord, Lord Mellish, shared in that concern, and quite rightly so. But I suspect that one of the areas which needs most attention is the validating bodies themselves. I live in considerable hope that before many months are out we shall be doing more towards bringing in a consensus and reorganisation in all the vocational qualifications in this country which will give employers a standard of acceptance of the ability of individuals and which will bring order out of what has been a slightly unordered system. I hope that through that and through Industry Year and many other measures which the Government are trying, we shall begin to see a more professional attitude adopted.
In his proposal the noble Lord, Lord Jacques, uses the word "budget". I can only take that, in the employment field, to be a plan. I simply want to make the point that economic and employment growth depends upon the enterprise and the energy of individuals. Jobs are simply not created by Government but by people.
The noble Lord, Lord Kagan, said that we should look at the Swiss, the Japanese or the Germans. I would rather look at the United States of America and in particular at the State of Massachusetts which contained many of the so-called "sunset industries". I met some of their legislators only this week and they have brought their rate of unemployment down from 11 per cent. to 3.6 per cent. They brought it down by policies which relied on enterprise and the ability of individuals to go out and create the wealth which the nation requires.
If the 'sixties and the 'seventies taught us nothing else, they surely taught us the folly of the economic philosophy once memorably summarised in the phrase, "the man in Whitehall knows best". I must say to the noble Lord, Lord Jacques, that I fear that he may be making the same mistake which the governments of the 'sixties and 'seventies made. What the economy needs is not more planning or more bureaucracy, but freedom from the constraints of unnecessary regulations and controls. That is the way in which to create jobs. I am not suggesting—far from it—that the Government have no role to play. Indeed, there is already in one sense an employment budget, and that is my own department's expenditure on measures to help the unemployed and to improve the operation of the labour market.
We shall be spending more than £2 billion this year on employment and training measures. Across the whole range of our programmes we are currently helping a total of 670,000 people. I can assure the noble Lord, Lord Jacques, that no one is more convinced than I of the importance of ensuring that we have a trained and educated workforce. That is why we are spending the best part of £1 billion next year on the youth training scheme.

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However, more than that, we are promoting other initiatives through local schools and colleges and through employers. The technical and vocational education initiative will cover more than 100,000 young people in projects to improve their preparation for the world of work and their motivation at school at a cost of some £250 million. One very clear benefit of the initiative has now become apparent. It has encouraged young people to stay on at school. In 12 of the 14 projects which began in 1983 the staying-on rate has been far higher than average—in some cases considerably higher.
Finally, the Manpower Services Commission is working with local education authorities to ensure that non-advanced further education is more responsive to employers' needs. Of course it is also the Government's responsibility to stimulate enterprise and initiative by removing the obstacles to the growth of business and employment—obstacles which I must confess have only been created by Governments themselves over the decades. We shall shortly be introducing a Bill in another place to reform the wages council system so that young people are no longer priced out of jobs by statutory wage fixing. Our drive to reduce the burden of regulations and controls which discourage new businesses and sap entrepreneurial energies will he continued in a second White Paper which I hope will be published during the first half of this year.
However, more than that, we are taking steps directly to encourage the creation of jobs where there is the greatest scope for employment growth: in small firms and in self-employment. In particular, we are spending some £111 million in this financial year in helping up to 65,000 people—all of them unemployed—to create their own jobs through the enterprise allowance scheme. In the next financial year that figure should rise to some 80,000.
Finally, we are directly helping those who are likely to find it hardest to get back into work—those who have been unemployed for 12 months or more. By June of this year we will have expanded the community programme to provide temporary jobs which will benefit some 300,000 people a year at an annual cost of about £1 billion.
I am grateful this evening for the knowledge that the noble Lord, Lord Dean of Beswick, is an avid reader of my press releases. I would suggest to the noble Lord that he sticks to them and does not listen to Members of the Opposition who tell us that the Government are about to double this particular programme or that particular programme. It is very tempting to listen to Members of the Opposition advising the Government as to what the future Budget should cover.
As regards considering and helping those who have been out of work for a long time, we started only at the beginning of last week a series of pilot schemes to give an entirely new form of help to the long-term unemployed. We are inviting those who have been out of work for a year or more to come into their Jobcentre for an in-depth counselling interview to assess their potential and to identify jobs or training opportunities from which they might benefit. Above all else, we must ensure that those who have been out of work for a long time do not lose touch with the world of work
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altogether. What we are saying is, "To us you are not a statistic. You are a person with needs. You are a person with ambitions. Let us see what we can do to help". Our experience with jobclubs shows what can be achieved if unemployed people are given just the opportunity, just the chance, to regain a belief in their own capabilities.
We are experimenting with an entirely new job start allowance of £20 a week for the long-term unemployed to take jobs with gross earnings of less than £80 a week. The aim is to give unemployed people, particularly those with a high benefit entitlement, a financial incentive to take some of the job vacancies which are already available. We have had some of the drearily predictable responses from some quarters that this is forcing people into low paid jobs. Perhaps the critics should explain to the long-term unemployed why life on the dole is so much better than a foothold on the employment ladder.
In looking at the whole matter, it is clear that the Government's primary responsibility is to create the economic climate in which enterprise can flourish and new jobs can be created. That means, above all else, controlling inflation. Average inflation in 1983 and 1984 was under 5 per cent. At the end of next year it should be below 4 per cent. As a result of our success in keeping inflation under control, we are now set to enter a sixth year of continuous economic growth at an average rate so far of 3 per cent. per annum.
The growth in GDP has been matched by growth in employment. It is no good the noble Lord. Lord McCarthy, saying that we should not talk about employment. The only way in which to reduce unemployment is to get employment up. The latest figures show—and they were released this morning—that the employed labour force of this country increased by 31,000 in the third quarter of 1985. That was a slightly lower increase than in the previous quarter. However, the employed labour force now stands at over 23·7 million, the highest since the summer of 1981. Since the spring of 1983, the number of people in work has increased more than in the rest of the European Community in the same period.
There are now some 709,000 more jobs than there were in the spring of 1983. There are more people working in services than ever before: over half a million new service jobs have been created since 1983. Of course, there are fewer people employed in manufacturing. However, as I hope I made clear to your Lordships' House when we debated before Christmas the report of the Select Committee, the health of the economy cannot be judged only by the number of people who work in what we classify as manufacturing industries. Employment in manufacturing has been falling in this country since 1966 and has decreased in all Western industrialised nations.
I believe that the majority of people in employment in the service industries would not appreciate the remarks this evening of the noble Lord, Lord Dean of Beswick, that their jobs are not real and that their jobs do not create wealth. As some noble Lords have pointed out, there are indeed more people working part-time. Surely that should not be a cause for complaint. There is nothing wrong with part-time jobs

1135
particularly if the alternative is no job at all. There are many people who welcome the chance to work part-time.
Perhaps I may assure the noble Baroness, Lady Lockwood, who was such an eminent chairman (or should I say "chairwoman"?) of the Equal Opportunities Commission, that a recently published survey showed that only 11 per cent. of women employed part-time—I stress, only 11 per cent., my Lords—would have preferred longer hours, and indeed 31 per cent. of full timers would have preferred shorter hours. For new forms of employment call for new patterns of working. Clocking on at eight in the morning and off at five in the evening five days a week may seem inevitable and natural to those who grew up in the post-war decades, but, as the traditional smokestack industries decline, as office work is revolutionised by new technology, as the service sector itself expands, the nature of work is bound to change.
I should like to quote one more set of statistics. The number of people in the labour force has grown rapidly since we came to office. It rose by over half a million in 1984 alone—the largest rise in a single year since figures began to be collected. This has added to the challenge we all face as a nation. Over the next few years there will be more growth, but we expect it to be at the slower rate of abut 150,000 a year up to the end of the decade.
The prospects for employment are nothing like as gloomy as some noble Lords have suggested. The OECD project the United Kingdom to have the highest employment growth among European countries in 1986. The CBI forecasts imply that by the end of this year one million new jobs will have been created since the spring of 1983. And the growth in jobs seems now to be having a positive effect on the level of unemployment. Unemployment rose in December and will rise again in January, as it does each year, but it fell in the preceding three months and there is every reason to hope that the upward trend in the seasonally-adjusted level of unemployment has now been halted.
The noble Lord, Lord McCarthy, spoke about forecasts. In this country it is more akin to going to a lawyer for the opinion you want. You can go to the forecasting authority and get almost any forecast you want. Indeed, in the first annual report that was issued during my time as Chairman of the Manpower Services Commission we even produced an average of forecasts. Cambridge showed unemployment being enormously high; Liverpool showed it being extremely low; all the others were in the middle. If you averaged them through you got somewhere.
However, I do not believe that any of these forecasts are particularly valid. I recall that the Manpower Services Commission, when it was in the business of making forecasts, made one in 1978 and saw the level of forecasts up to the early 1980s as varying between 900,000 and 1.3 million. The world changes faster than the forecasters. Even if we got those forecasts, it seemed to me that we would be in danger if we actually acted on them.
The noble Lord, Lord Jacques, spoke of co-operation from both sides of industry. Here we
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approach the heart of the matter. Competitiveness depends above all on the attitudes and the efforts of employers and the attitudes and efforts of employees. It depends on a willingness to abandon restrictive practices and to root out inefficient working methods. It depends on the acceptance of new technology and a willingness to learn new ways of working.
It depends upon producing the right goods and services at the right time and at the right price. It depends upon maintaining standards of quality. That is where we will, "Buy British". It depends also on employers investing in training on the same scale as their competitors overseas. And it depends on trade unions showing the same realism and farsightedness as their counterparts in other countries.
Above all, my Lords, it depends upon controlling costs. Not, as the noble Lord, Lord Roberthall, or the noble Lord, Lord McCarthy, opposite say we wish to do, by reducing real wages, but by reducing real unit costs. It is unit labour costs in this country which rose by 6½ per cent. in the year to June 1985. That was 6½ per cent.; well above the rate of inflation. But in the United States of America unit labour costs rose by 1¼ per cent., well beneath the rate of inflation, and in West Germany and Japan unit labour costs actually fell.
The price of this is inflation. The price of this increase is paid by the unemployed. The most valuable thing employers and trade unions could do to help the unemployed would be to give them a seat at the bargaining table, metaphorically speaking, and that they should help to reduce the level of pay settlements.
That is the co-operation the unemployed need. That is the "employment budget" they need—not a return to the bureaucratic devices which have failed us in the past, which the noble Lord, Lord Rochester, advocates in different forms through industrial training boards and others. Above all they need the rest of us—employers and employed, the unions, the CBI and the Government—to learn and to apply the lessons set out so clearly by Lord Beveridge 40 years ago: the lesson that jobs are created in only one way—by competing successfully in the world market for goods and services.
Lord McCarthy: My Lords, before the noble Lord sits down, I have asked him two questions for the second time. Will he tell me when he is going to answer those questions? Maybe he could answer now the third question. In the light of the intervention from the noble Duke, the Duke of Norfolk, is it not true that it is Government policy to bring about a reduction in unit costs by a fall in real wages?
Lord Young of Graffham: No, my Lords, it most certainly is not. It is the Government who are pointing out time and time again that unless we reduce unit costs we shall not maintain employment in this country and generate the wealth of this nation. We can reduce unit costs in a number of ways. One is by increasing efficiency, by competitiveness, and by ensuring that we do not give ourselves unnecessary wage increases.
If we are talking of employment, that is the one lesson which the Government wish to bring home. Far from reducing real wages, in the last four years wages

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have consistently gone up at about 2½ per cent. over the rate of inflation. The employed each year get better, better, and better off. It is the unemployed who increase.
7.47 p.m.
Lord Jacques: My Lords, I should first like to thank everybody who has taken part in the debate. It has been a worthwhile debate, although I am disappointed with the reply of the Minister. We do not get anywhere. We are getting the same kind of reply as we always get.
I would make only two points. Research in comparing productivity in this country with our competitors does not show that our wages are too high. It shows that our management is not good enough and that our training is totally inadequate. They are the things to be looked at, not wages.
The second point I would make is that the Minister accused me of going back to the 1960s. If, by doing that, I got the same measure of full employment as we had in 1960, I should be an extremely happy man. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Public Order (Northern Ireland) Order 1981 (Incitement to Hatred) (Amendment) Bill [H.L.]
7.49 p.m.
Lord Dunleath: My Lords, I beg to move that this Bill be now read a second time. In effect this is really a tidying up amendment to bring the law as it applies to Northern Ireland into line with that which obtains in Great Britain. But for all that, it has some significant implications. Perhaps it would be helpful if I were to give your Lordships some background to this. I hope that I may be forgiven if I read portions of my speech on this because, for the sake of the official record and the fact that there are various titles, dates, and quotations involved, I would wish to be accurate.
The background is that the offence of inciting to hatred on the grounds of religious belief, colour, race or ethnic or national origin was introduced in Northern Ireland for the first time in the Prevention of Incitement to Hatred (Northern Ireland) Act 1970. That Act was one of the results of a meeting between the Westminster and Stormont Governments in August 1969. The communique from that meeting stated that it had been agreed that:
"effective action in the following fields is fundamental to the creation of confidence",
and in subsection (2) it said:
"protection against the incitement to hatred against any citizen on the grounds of religious belief".
In the event the Act has proved to be almost useless in terms of preventing incitement to hatred. There has been only one prosecution under that Act, in 1971, and the defendant was acquitted on the basis that he did not actually intend to stir up hatred.
Then, in 1981, when a new public order order was introduced for Northern Ireland, the opportunity was used to repeal the 1970 Act and instead include its
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provisions in the new order. Therefore the present offence relating to incitement to hatred is to be found in Article 13 of the Public Order Order 1981.
The law in England and Wales has no equivalent to the incitement to hatred offence in Northern Ireland; but in 1965, when the Race Relations Act was first introduced, Section 6 of that Act dealt with incitement to race hatred and was broadly similar in terms to the Incitement to Hatred (Northern Ireland) Act 1970. It perhaps goes without saying that there is a difference in emphasis here, in that the Race Relations Act in Great Britain is concerned more with the ethnic minority, whereas the equivalent legislation in Northern Ireland is more concerned with the religious and differences of loyalty about which state someone considers he belongs to.
As in Northern Ireland, the need to prove a subjective intention on the part of the accused to stir up hatred has stultified prosecutions in this country. The same requirement had a similar effect under the Race Relations Act in England. The fact that in England the law on incitement to race hatred was not achieving its attendant purpose was recognised by the noble and learned Lord, Lord Scarman, and in the course of his report in 1974 on the Red Lion Square disorders he stated in paragraph 125:
"Section 6 is merely an embarrassment to the police. Hedged about with restrictions it is useless to the policeman on the street, the section needs radical amendment to make it an effective sanction, particularly … in relation to its formulation of the intent to be proved before an offence can be established".
Similarly the right honourable Member Mr. Roy Jenkins in another place, when introducing the Race Relations Act in 1976 said,
"The prosecuting authorities believe that the need to prove a deliberate intention as well as the other ingredients of the offence have made it unlikely that prosecutions will succeed except in the most blatant and extreme cases".
The concerns of the noble and learned Lord, Lord Scarman, thus expressed led directly, I am told, to an important reshaping of the incitment to race hatred offence in England and Wales. His concerns were echoed by the Standing Advisory Commission on Human Rights in Northern Ireland, and indeed by spokesmen for my own party, the Alliance Party in Northern Ireland.
The present situation in England and Wales in this regard is set out in Section 70 of the Race Relations Act 1976 where the offence of inciting race hatred is stated to be committed where a person,
"publishes or distributes written matter which is threatening, abusive or insulting … uses in any public place or at any public meeting words which are threatening, abusive or insulting, in a case where, having regard to all the circumstances, hatred is likely"—
that is the important word, "likely"—
"to be stirred up against any racial group … by the matter or words in question".
Therefore it can be seen that in the British context the race hatred offence of 1976 removes the need subjectively to show that the accused intended to stir up race hatred and replaces that requirement with one on the prosecutor objectively to show that
"hatred is likely"—
again the important word—
"to be stirred up … by the matter or words in question".

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Since the Northern Ireland Alliance Party's private parliamentary draftsmen drew up this Bill it has come to our notice that the Public Order Bill which was printed on 5th December contains slightly different wording. I believe that this Bill was read a second time in another place just yesterday. The relevant wording, as opposed to "likely" which I have just quoted, is:
"for anyone to use threatening, abusive or insulting words which are, or behaviour which is, intended or likely either to provoke immediate violence or to cause another to believe that immediate violence will be used".
Therefore it is not just "likely" or "intend" but "either." This is a drafting point in regard to the Bill which I am now advocating before your Lordships' House, and it may be felt it should be subject to amendment for that reason.
There is another difference, in that "hatred" is not actually used here in the Public Order Bill, and in the Bill which I am presenting to your Lordships we have a number of words which perhaps ought to be amended. I am entirely open to suggestion on that. We say:
"to stir up hatred, violence, contempt or hostility".
There is a drafting difference between this Bill and the Public Order Bill, and I should be flexible on the wording of that.
But in Northern Ireland it is a relatively straightforward matter to change our incitement to hatred law in the same manner so that it would become irrelevant to know what the accused intended. The question is really, having regard to all the circumstances, whether his words or any other matter have the likely effect, not necessarily the intended effect, of hatred being stirred up against any section of the population.
As I said, this would bring the legislation more or less into line. The fact that the Attorney-General would have to be consulted before any prosecution were brought would ensure against there being any trivial or frivolous prosecution, as is the case on this side of the water. I can think of examples. For instance, shortly after the 1971 measure was passed in Northern Ireland a member of the Opposition in the original Stormont Parliament asked whether the writing on a gable wall in the militantly Protestant Shankhill Road of Belfast, where there appeared the words "No Pope here", was an incitement to hatred or violence. The answer came from the Front Bench at that time, "No, sir. It is not an incitement to hatred or violence. It is a plain statement of fact whose accuracy cannot be disputed. Inquiries have revealed that His Holiness was not in the Shankhill Road on that particular Saturday evening. Instead, he was in the Vatican minding his own business".
Well, the writing of a slogan like that in the Shankhill Road may not be an incitement to hatred, but written in other circumstances it could be. Individuals have been subjected to harassment through having slogans written on the walls of their houses. An isolated Protestant in a mainly Roman Catholic area can have a considerable degree of intimidation inflicted on him by having, "No Pope here!" written on his house. Similarly, an isolated Roman Catholic in a mainly Protestant area can suffer intimidation by having "Up the IRA!" written on his house. Indeed, on my own wall which surrounds my house at the
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moment I have a slogan written by an anonymous contributor, "Ulster says No!". I was tempted to write underneath it, "But the man from Delmonte says, `Yes'!—and he is an Orangeman". But I desisted from so doing because I did not want to start a mural correspondence column which might be acceptable in Peking but would hardly add to the attractiveness of the Northern Ireland countryside.
Nevertheless, there are certain speeches, certain actions and certain writings of slogans and certain graffiti which can lead to dire consequences. There is the self-fulfilling prophecy, the warning to Her Majesty's Government that, "If Her Majesty's Government do not do so-and-so, I cannot guarantee that the people whom I represent will not take to the streets, will not take up arms, will not resort to violence". And the speaker or writer may claim that he or she has no intention of stirring up violence. But we know well that that can be a provocative statement. We know well that the prisons in Northern Ireland are bulging with people serving long sentences and that in many cases they are young people easily swayed who, like me, are not possessed of the mental capacity of the late Dr. Einstein, who are persuaded by these speeches and who think that in conducting whatever activity they have been persuaded to conduct—an act of violence, probably—they are striking a blow for freedom of one sort or another.
They are now, many of them, languishing in gaol serving long terms for crimes very often as serious as murder; yet those who have incited them to it, whether they be politicians or not, are free and indeed basking in the publicity that they have gained from the statements that they have made, and do not appear to have all that much concern for the gullible people who acted as a result of their statements and actions and who have had to pay the penalty therefor.
While, as I say, the purpose of this amendment is to aim for conformity between the law as it stands in England and Wales and the law as it would stand in Northern Ireland, there are significant implications to it. Therefore, I would respectfully submit to your Lordships that this Bill be read a second time. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Dunleath.)
8.5 p.m.
Lord Hampton: My Lords, the noble Lord, Lord Dunleath, is once again to be congratulated on introducing a Bill designed to help in the battle for sanity and calmer times in Northern Ireland affairs. Our task tonight is to consider whether this Bill, introduced with the most honourable intentions, will help to that end. As has been made clear, the aim is to check the spread of hatred by making incitement to hatred an offence without having to prove that the accused consciously intended this. It is worth re-emphasising that this will do no more than bring the law in Northern Ireland into conformity with the similar law in Great Britain on incitement to race hatred as contained in the Race Relations Act 1976.
Hatred is an ugly attitude of mind and I imagine that there is probably no Member of your Lordships' House and none present this evening who does not

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consider it an unmitigated evil. Without hatred in the first person, there would be no desire to incite hatred in a second person. The disease, as perhaps I may term it, lies in the initiator; and that is what really needs to be cured. It is nonetheless important to stop it spreading.
There are those who hold that freedom of speech is of paramount importance and must in no way be checked. In an ideal society that would be so but, when we read of bitter men stirring up mob violence in the strife of the Province, I cannot believe that all restraints should be abandoned. It is a loss of personal freedom not to be able to say exactly what one thinks. But if by so doing one causes mental or physical suffering to another, the privilege has been taken too far.
The noble Lord, Lord Fitt, my good friend, kindly drew my attention to the debate on the Prevention of Incitement to Hatred Bill in the Northern Ireland House of Commons on 30th June 1970 and the noble Lord. Lord Dunleath, referred to this. The noble Lord, Lord Fitt, has been over much of this ground already and I note that he has not put down his name to speak tonight. He said then that the great difficulty lies in proving the intent to stir up hatred. That, of course, will no longer be necessary. He accepted that that Bill was bristling with difficulties and I think that we also may well question the effect for good that the present Bill may have. The Public Order Bill introduced by the Government yesterday, I think, will need careful perusal.
I should like to ask the noble Lord, Lord Dunleath, two questions when he comes to wind up in the debate. First, I would ask about graffiti and writing on the walls. He has referred to this. Many vicious messages are spread in this way. Does he not think that the task of preventing it may be almost impossible and failure counterproductive? Secondly, can the people of Ulster be assured that incitement to hatred will be punished quite impartially from whatever quarter it arrives?
It seems to me important to keep things in proportion, to face the unpalatable fact that there is much hatred in Northern Ireland today. Free the Province of hatred and of fear and you will have solved its problems. That may sound simplistic and it is certainly immensely difficult to achieve, but it remains the truth. While we concentrate on the negative influence of hatred, let us not forget the many positives in the Province today.
Only recently, many of us received a news sheet from Lagan College, proud of its splendid progress in the field of integrated education of excellence. Let us salute the courage and determination of those beavering away to spread goodwill and break down the divide between the two communities. I pay tribute to the noble Lord, Lord Dunleath, again for his work in this field. I believe that in the long run we need to find a better way than the way of legislation to tap the powers that can change the human heart and make the ideal we all cherish of a happy and united Northern Ireland a practical possibility. But in the meantime, while regretting this necessity, we on these Benches support the aims and intentions of this Bill.
8.10 p.m.
Lord Hylton: My Lords, I should like to thank my noble friend Lord Dunleath and congratulate him on introducing and explaining this Bill tonight. My noble friend, I would say, has a very enviable record when it comes to legislation. Seven or eight years ago he piloted through the House a measure to do with schools which has made it possible for shared, integrated Christian schools to be accepted into the system of public education in Northern Ireland. That is of very great benefit, in my view, in enabling children to grow up mixing freely with each other and learning to appreciate the good and constructive points of their respective traditions. Lagan College has already been mentioned this evening. It was the first of these schools and has by now proved the point beyond question. Last term, Lagan was joined by the two Hazelwood schools in North Belfast and by the Forge Primary School in South Belfast: three new, integrated, shared schools opening in one term.
The Bill promoted by the noble Lord was an enabling one. Tonight's measure I would describe as a preventive one. Its purpose is to diminish, if not eliminate, the flow of incendiary language. When I use those words, I think I should point out that we have seen and heard some language which very precisely and literally was of an incendiary nature. Such language is bound to disturb people's emotions and I fear it is all too likely to create fears and mistrust. As the noble Lord pointed out in his opening speech, it can be an incentive to intimidation when it is not in itself an act of intimidation.
It is for these reasons that I personally welcome the changeover in the onus of proof from the question of intention to the more provable matter of likely effect. If we look back over the last few years and perhaps go back as far as 1969, it can be seen, I think, that successive governments have laboured hard and honourably to change the institutions of Northern Ireland. Perhaps the classic example was the creation of the Housing Executive, which has done—I think it is widely acknowledged—some very good work.
This process of changing institutions has been tried not only in the executive sphere but also in the judicial and legislative spheres and has culminated, one might say, in the recent Anglo-Irish Agreement. That is desirable and it may be necessary in many ways, but, alas, it has not had the effect yet of changing deep-seated attitudes. I would submit that a great deal more work is going to be called for in modifying, changing and improving attitudes—for it is attitudes that are to a large extent the cause of the troubles we experience, as they are the cause of threats and of language used which is likely to provoke hatred and disturbance.
The underlying attitudes in many ways are still much as they were, and I should like to suggest tonight that the attitudes of people, both in Britain and in the Republic of Ireland, have a strong bearing on the situation in the North of Ireland. In Britain, alas, too many people look upon Northern Ireland as a remote and incomprehensible place. Really, to put it briefly, too many people do not want to know about it. Others in Britain take the line that we ourselves are not too

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closely involved and can therefore be considered to be neutral, to be arbitrators of a kind and peace-keepers of a kind.
That, I would suggest, is an insufficient attitude. We need to be a great deal more constructive and creative than that. Some of these attitudes apply in the Republic of Ireland but I think one should point out that in that country there has traditionally been, and still is, a greater commitment to one particular cause. And that cause, of course, has been the cause of the nationalist community in the North. But one has only to think of the very great financial burdens that fall as a result both on Britain and on the Republic of Ireland to see how desirable it is that our own attitudes should change and thereby help attitudes in Northern Ireland to change. It seems that on a rough calculation it is costing the inhabitants of Great Britain something like £1,000 a year per head of the Northern Irish population. The Forum for a New Ireland did some work on quantifying the cost to the Republic of Ireland, particularly the security costs, the loss of revenue from tourism and the loss of investment from outside the country.
To come back to the internal attitudes of people inside Northern Ireland, the events of 1981 and of the last year, 1985, have shown how relatively little change there has been and how very easily fears, emotions and prejudices can be stirred up. I think that probably all we can do at present, and certainly this evening, is to urge and encourage bodies such as churches, trade unions and the very numerous voluntary organisations of Northern Ireland to keep up the good work which has been started on changing some of those fundamental internal attitudes.
In conclusion, I would say it is becoming clear that there are regular and frequent elections of all kinds in the North of Ireland but that there is very little representative democracy, as we know it, in this country. I say that because there are no parish councils or town councils. District councils have very limited powers, and indeed at the present time a considerable proportion of them are unfortunately adjourned by their own act. The elected Assembly remains consultative, and of course at the level of the House of Commons, even when there are no by-elections pending, the small number of elected Members are unlikely, in the nature of things, to be able to change the policy of any determined Government sitting in London.
It is because of this lack of representative democracy in a situation of direct rule that the question of human rights becomes so important, in my view. Here is the opportunity for government action; and once again I should like to urge the Government to take steps to legislate so that the European Convention on Human Rights is written into the law of Northern Ireland. This, in a simple and direct way, would make it possible for human rights issues to be heard in the courts of Northern Ireland, thus eliminating the extremely long delays which happen whenever an aggrieved individual wishes to take his case through the European Commission and on to the European Court of Human Rights.
I again urge the Government to consider bringing together into one human rights commission the
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somewhat numerous pieces of machinery and advisory bodies—ombudsmen and so on—which at the present time deal with human rights locally in the North of Ireland. I hope that I have not strayed too far from the original Bill, but I should like to support it and I consider that it is a timely measure.
8.20 p.m.
Lord Fitt: My Lords, I fully support this Bill and I fervently hope that the Government will assist it in its passage through this House. Any attempt to bring about legislation which will dissipate some of the passions and allay some of the fears and suspicions that are in Northern Ireland is to be welcomed. I have vivid memories, which have already been referred to by my noble friend Lord Hampton, of 3.45 p.m. on 30th June 1970 in the Northern Ireland Commons, when the Government introduced the Prevention of Incitement to Hatred (Northern Ireland) Bill. Within the space of five or six hours, it had passed all its stages.
The Bill was regarded with such urgency at that time that there were only two dissenting voices in the Northern Ireland Parliament, which had 52 Members. One of them was then the honourable Member for Bannside in Northern Ireland, who is now the honourable Member for North Antrim, and the other was his colleague, who was then the honourable Member for South Antrim and is now in the Northern Ireland Assembly as well. There were a number of Divisions on amendments put down by those two gentlemen, but at the end of the day the Bill was passed almost unanimously, with the exception of those two honourable Members.
I remember speaking on a number of occasions during the course of that debate in June 1970. The troubles had broken out in Northern Ireland after the Civil Rights march in Derry in 1968. In 1970, the deaths that had been brought about by the violence were still in double figures at less than 100. I remember thinking, and fervently hoping, that the legislation which we were enacting would do something to ensure that no further deaths would occur. Now, 16 years after, I read the reports of the speeches which I made during that debate, as well as the other speeches. There have now been 2,000 more deaths in Northern Ireland, with all the terrible things that have happened and we find that legislation such as that brought forward by my noble friend Lord Dunleath is still more necessary.
Since 1970, we have had four Westminster Governments. We had the two Labour Governments of 1968 and 1974 and the two Conservative Governments of 1979 and 1983, and there have been no Northern Ireland Parliaments since 1972. A succession of British Governments and of Secretaries of State must be only too well aware how necessary it is to have legislation of this type on the statute book, to see whether it will prevent any further erosion of humanity and civilisation in Northern Ireland.
It is well-known that some of the greatest legal luminaries in the land, the most eminent legal brains that can be found in this country, sit in this House, and we have had the experience of the Northern Ireland Act, which, as was rightly said by my noble friend Lord Dunleath, was totally ineffective. Many of us had

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reservations when it was going through Parliament. We found that only one case was taken and the person was acquitted, because it could not be found that he had the intention of creating insulting behaviour, harassment and intimidation.
As was said in that earlier debate, it all depends on what is meant by "insulting" and what is meant by "abusive language". I am quite certain that the Minister who is here tonight will be in no doubt as to what is abuse and insulting language, and the Secretary of State will have his opinions after what happened to him at the City Hall in Belfast and what happened yesterday afternoon to the Minister of State, Dr. Boyson. So they themselves could be protected by the provisions of this Bill.
We have to remember as well, as regards intimidation and harassment, which are in the wording of this Bill and were in the wording of the Northern Ireland Act of 1970, that it was taken that Protestants or Unionists could be harassing or intimidating Republicans, or the other way round. But in Northern Ireland there has been such a breakdown in community relations since then that it is now not uncommon for Protestants to be intimidating Protestants because they do not agree with the political stance which the others are taking.
One can only recall the Unionists, Loyalists and Protestants, and the intimidation and harassment of members of the RUC which took place in August last year because the RUC had insisted on rerouting Loyalist demonstrators in Portadown. It was not Catholics or Nationalists, it was not Unionists, Republicans or Loyalists who intimidated or attempted to intimidate me for so many years in Northern Ireland. It was not Unionists or Loyalists who burnt my home to the ground. So one can see that intimidation can be used within the two communities in Northern Ireland.
I should not like to think that this House will tonight give approval to the Second Reading of this Bill and then just say, "We have expressed our good wishes, but nothing will happen." I appeal to the Government to do everything they possibly can to ensure that this Bill passes through the House and that it is taken seriously in another place.
As I said, 16 years have elapsed since the first introduction of the Prevention of Incitement to Hatred (Northern Ireland) Bill in Northern Ireland. I am quite certain that the legal brains in this House can give advice and that my noble friend Lord Dunleath will be quite happy to accept that advice if it will put on to the statute book a law which will afford some protection to those people within both communities in Northern Ireland who have been so intimidated, harassed and victimised over so many years. Anyone with any knowledge of events and history as they have been seen unfolding in Northern Ireland should be only too happy to be in a position where he can encourage this Bill on to the statute book. So many people in Northern Ireland will want to see it become an Act, rather than remain a Bill.
8.28 p.m.
Lord Prys-Davies: My Lords, I, too, should like to join in thanking the noble Lord, Lord Dunleath, for
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his contribution in sponsoring the Bill and for intoducing it to the House this evening. We see clearly that the Bill introduces into the law of Northern Ireland the main provision of Section 70 of the Race Relations Act 1976. Indeed, it follows the wording of that section, except that it also covers hatred stirred up on grounds of religious belief. But the main change is clear. As the noble Lord, Lord Dunleath, has explained, it is the abandonment of the requirement of intent to stir up hatred.
The Bill if enacted would close a gap in the law which applies in Northern Ireland. But interestingly the general argument advanced tonight by the noble Lord, Lord Dunleath, is the argument heard in your Lordships' House 10 years ago when the Race Relations Bill, and in particular Section 70, was before the House. On that occasion, the House followed the lead of the noble and learned Lord, Lord Hailsham, and came down heavily on the side of freedom of speech. The noble Lord, Lord Hampton, has touched upon the significance of the freedom of speech in this context. In the result, 10 years ago in the context of England and Wales the House supported an amendment that the intent to incite hatred should remain an essential element of the offence. But—we think fortunately—the House of Commons took a different view. It decided that the offence would be committed if the words complained of were likely to stir up hatred.
I am grateful again to the noble Lord, Lord Dunleath, for giving us the history of this legislation in Northern Ireland. I was puzzled on reading the Bill to discover that Northern Ireland had been left outside the scope of Section 70 of the 1976 Act. It seemed very odd and anomalous that Section 70 did not apply to Northern Ireland, a part of the United Kingdom where, as every noble Lord has mentioned this evening, there is so much serious social disharmony and deep rooted religious division. Why should that be so? Why was Northern Ireland left outside the scope of the Act? I now know why it had been excluded. It had been excluded at the request of Stormont because Stormont saw the problem in Northern Ireland not as being racial but as being religious.
I should like to know from the noble Lord, Lord Lyell, to what extent Section 70 has been successful in practice in the 10 years which have passed since its enactment. Has it helped to make speakers and writers tone down and modify their language? Is there any comfortable evidence available? Is there any firm evidence to show that it has helped to prevent discrimination and intolerance? Is there any comfort from the Great Britain statistics? Has it been any more successful than the Prevention of Incitement to Hatred Act 1970? I ask these few questions because there are people who believe that there is no short cut to solve deep rooted problems of hatred within our society. Nevertheless, if there is just a possibility that this Bill will help to prevent hatred and intolerance, if there is just the possibility that it could have some practical value, it is sound and worthy of our support.
That may not be quite the end of the matter in terms of new legislation because we find that Section 70 is in fact an amendment to Section 5 of the Public Order Act 1936. Indeed, it is regarded as Section 5A of the 1936 Act. That is right and proper because there is a

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close link between this offence and the preservation of public order.
Therefore I wish to ask the Government this question. When the Public Order Bill comes before Parliament, is it intended that Clause 17 will apply in the Northern Ireland situation? Is there an intention on the part of the Government to look at the Public Order (Northern Ireland) Order with a view to reviewing it in its entirety and not merely concentrating on the one section? With those few questions to the Minister, we give our support to the Bill introduced by the noble Lord, Lord Dunleath, and we look forward anxiously to the Government's response.
8.35 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell): My Lords, I should like to thank the noble Lord, Lord Dunleath, for raising this most interesting subject before your Lordships this evening and, as I am sure all noble Lords will agree, for making such a fair and reasoned case for his Bill in his traditional forthright and succinct manner.
I should like to look at Article 13 of the Public Order (Northern Ireland) Order 1981 as it stands at present and comment on how we think it would be changed by the Bill which has been put forward this evening by the noble Lord, Lord Dunleath. Article 13 makes it an offence for a person to publish written or other matter or to use publicly words likely to stir up hatred against, or arouse fear of, any section of the public in Northern Ireland on grounds of religious belief, colour, race or ethnic or national origins. It also states that for this to be an offence, such a person must intend that his words or actions should have these consequences.
As I understand it, the noble Lord's Bill goes a little further. It would remove the intent provision, by providing—with certain limited exceptions such as court reporting, and the reporting of proceedings in your Lordships' House and perhaps in another place—that a person disseminating matter or words likely, having regard to all the circumstances, to stir up hatred, violence, contempt or hostility against, or arouse fear of, any section of the public in Northern Ireland should be guilty of an offence. I think the noble Lord will agree that in the case of his Bill it would not be necessary to prove that his actions or his words were intended to have that effect.
As I am sure the noble Lord will agree, this aspect would bring the public order law in Northern Ireland into line with the similar law in England and Wales on incitement to racial hatred. It would have the second effect of making it easier to mount prosecutions against those extremists on both sides of the community in Northern Ireland who, as we have heard from the noble Lord, Lord Fitt, may from time to time make statements which are likely to stir up hatred there.
But the noble Lord, Lord Dunleath, places the Government in some difficulty. Your Lordships will know—the noble Lord pointed it out, as did the noble Lord, Lord Prys-Davies—that the Public Order Bill, as distinct from the Public Order (Northern Ireland) Order which we have been discussing this evening, is
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currently being considered in another place and received its Second Reading earlier this week. That Bill, which with certain exceptions applies to England and Wales, already contains proposals which, if they meet with the approval of another place, and of course your Lordships, would revise the Great Britain legislation into the line where the noble Lord, Lord Dunleath, is seeking to bring Northern Ireland this evening with his Bill. Of course, we look forward to considering the Public Order Bill on your Lordships' House in due course.
It is certainly not my task this evening to pre-empt any view which will be taken on that Bill in another place and certainly not in your Lordships' House. I ask your Lordships' indulgence to look at the relevant clauses. Under the Public Order Bill as it stands at present your Lordships will see that Section 5A of the Public Order Act 1936, which was inserted by the Race Relations Act 1976—this was mentioned by the noble Lord, Lord Prys-Davies—is to be re-enacted and revised. It will be an offence for anyone to publish or to distribute, or indeed possess, with a view to publication, written matter which is threatening, abusive or insulting and intended, or is likely, to stir up racial hatred. It will also be an offence to use in a public place or at a public meeting words or gestures which are threatening, abusive or insulting and which are intended, or likely, to stir up racial hatred.
These provisions of the Public Order Bill, if both another place and your Lordships' House adopt them, will place English and Welsh law on incitement somewhat in advance of, and different from, Northern Ireland law as it would be if the noble Lord's Bill were to amend the law in Northern Ireland. I want to stress that my right honourable friend the Secretary of State for Northern Ireland is looking very closely at the proposals for England and Wales contained in the Public Order Bill. In the light of whatever is finally approved in another place and by your Lordships' House, my right honourable friend will consider amending Northern Ireland legislation on similar lines.
This last point that I have thrown into the discussion this evening is where the dilemma lies for your Lordships' House and for the Government. I ask your Lordships to consider with me the question of what we should do. Should we go ahead and amend Northern Ireland legislation on the lines so eloquently proposed by the noble Lord this evening? Or should we take the defensive line and wait to see how your Lordships and another place react to the Public Order Bill? I think that the noble Lord, Lord Prys-Davies, touched on one element of this consideration.
I have to say that the Government would prefer to adopt the latter course of seeing how the Public Order Bill rubs down and how it finishes its passage in another place and here. In the light of this, I ask the noble Lord, Lord Dunleath, to be patient enough to await the passage of the Public Order Bill, especially when it comes to your Lordships' House, and then see whether my right honourable friend the Secretary of State is able to bring proposals which meet his concerns. We are more than grateful to the noble Lord for allowing this matter, of which the noble Lord, Lord Fitt, has such experience, to be raised with your Lordships this evening. However, I think that the

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noble Lord will understand that we have one or two doubts on how we want to achieve what he wishes to achieve.
I shall now answer one or two of the points raised this evening. We are very grateful for the forthright comments of the noble Lord, Lord Hampton. We hope that the Bill of the noble Lord, Lord Dunleath, will be of considerable assistance to my right honourable friend in his consideration of the Public Order Bill. The comments that have been made this evening by the noble Lord, Lord Dunleath, and by all noble Lords, will be of considerable value to my right honourable friend.
The noble Lord, Lord Hylton, raised one or two queries. I stress to the noble Lord that so far as concerns human rights, tonight's Bill is just one item in the vast area of human rights. I am sure that he will accept my replies tonight in that light. I stress to him, and to your Lordships, that the Government are committed to the protection of human rights in Northern Ireland. However, we are not entirely certain that the incorporation of the European Convention on Human Rights is immediately the best way of ensuring that.
I want to pay tribute, and the Government's tribute, to the work of the Standing Advisory Commission on Human Rights and to the work of other human rights bodies in Northern Ireland. They are, of course, independent bodies and we shall have to look with particular care at any proposals to amalgamate them.
We were very grateful for the brief and forthright comments of the noble Lord, Lord Fitt. He referred to the Royal Ulster Constabulary. I am sure the noble Lord, and all noble Lords, will wish me to pay our wholehearted tributes to that body. Indeed, those of us who have anything to do with Northern Ireland, let alone those of us who live and work there, pay wholehearted tribute to the officers of the Royal Ulster Constabulary who enforce the law fairly and impartially for every member of the community in Northern Ireland.
The noble Lord, Lord Fitt, also said that abusive words had been flowing around. The noble Lord is very gracious and I shall certainly see that his good wishes are passed to my honourable and right honourable friends who, the noble Lord feels, may have been the unfair victims of those abusive comments. When I read what is said about me in the newspapers I often think that it is just the Ulster way of expressing things, and I reflect that possibly I deserve about half of the comments directed to me. The other half of the comments are, of course, aimed in the direction of the Almighty since most of them concern the atrocious weather of 1985. Of course, abusive, violent and intemperate language causes a great deal of distress, fear and alarm in Northern Ireland. Possibly noble Lords and my honourable and right honourable friends in another place ought to develop slightly thicker skins; but it is no excuse for the use of intemperate language and actions. We are grateful for the tributes paid this evening by the noble Lord. Lord Fitt.
The noble Lord, Lord Prys-Davies, asked about Section 70 of the 1976 Act. I am sure he agrees that
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there are problems with it. We can see how these problems are covered in paragraphs 6.5 and 6.9 in the White Paper which was issued by my right honourable friend the Secretary of State. That is why the Government are introducing legislation in another place. Of course there are difficulties but I hope that the noble Lord will accept that we should try to keep the difficulties of Section 70 in perspective and, above all, on a Northern Ireland plane.
My Lords, I conclude my remarks by saying that we are most grateful to the noble Lord, Lord Dunleath, for raising this very important matter so well in your Lordships' House this evening. He seeks with his Bill to bring Northern Ireland legislation into line with the law in England and Wales. This, as I have spelled out to your Lordships, is in process of revision starting off in another place, and very soon we shall have our chance to add our thoughts to that as well.
The Government will certainly not oppose the noble Lord's Bill this evening, but I should just like your Lordships, and indeed the noble Lord, Lord Dunleath, to know of the reservations which I raised earlier in the course of my remarks. I pay tribute to the noble Lord, Lord Dunleath, and I want to thank everyone who has spoken this evening, since it has provided much valuable material for us.
8.50 p.m.
Lord Dunleath: My Lords, I should like to thank the noble Lords who have so kindly contributed to this short debate for their very helpful and constructive comments. The noble Lord, Lord Hampton, referred to the problem of graffiti. I understand only too well the difficulty that this presents, because unfortunately, as I said in my opening remarks, they are normally the work of anonymous contributors. They do not sign their literary efforts, which they write on walls, any more than did the person who wrote "Ulster says No" and accompanied it by a very attractive Union Jack. Therefore it is very difficult to see how the provisions of the Bill which I am proposing could be brought to bear on that. However, as I also tried to bring out, graffiti are not all that much of a worry except under certain circumstances. There are many more things to be worried about, as the noble Lord, Lord Fitt, said during his speech.
The noble Lord, Lord Hampton, also wondered whether it would be possible to administer the provisions of this Bill in an impartial manner. I sincerely hope so, because incitement to hatred and violence can come from any section. On the one hand, you have Sinn Fein who speak in glowing terms about the cutting edge of the IRA as being the element which will produce progress; on the other hand you have the inflammatory statements of so-called Loyalist spokesmen. Incidentally, I should add that when this Bill was drafted we did not know that the Anglo-Irish agreement was going to be signed at Hillsborough on the date that it was and we did not know that there would be an "Ulster says No" campaign. But this is a sensitive period and I should hope that, if the provisions of this Bill were in force (and of course I cannot expect them to be in force in the very near future), then it would discourage certain Loyalist leaders from making statements which could result in

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the sort of violence which took place outside the gates of Maryfield at the end of the march just after Christmas.
Incidentally, I am not saying that the Loyalist leaders who were on that march incited violence. In fact they were responsible for appealing to their followers that there should not be violence. But there were others whose statements, public or otherwise, obviously incited some people to take certain most regrettable action, with the result that over 30 policemen were injured on that occasion. So, in answer to the noble Lord, Lord Hampton, I sincerely hope and am confident that the provisions of this Bill would be implemented in a totally even-handed manner.
I was grateful for the support of the noble Lord, as I was grateful for that of the noble Lord, Lord Hylton. Both noble Lords made mention of Lagan college, and in that connection I would remark that although the 1978 Education Act (which I proposed to your Lordships and which your Lordships' House was good enough to agree to, as was another place) may have been slow off the mark, in fact integrated education in Northern Ireland seems to be really taking off now and I think we shall see more and more results from it. I am grateful to the noble Lord for having mentioned that point.
I was also glad to hear what the noble Lord, Lord Fitt, had to say. I entirely agree with him that we have a weight of legal expertise in this House which I would greatly welcome if we come to the point of trying to get this measure which I am proposing on to the statute book. I certainly freely acknowledge that I am no legal expert and would welcome any guidance at all which can be obtained.
The noble Lord, Lord Prys-Davies, made reference to the Lord Chancellor's point about freedom of
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speech. I would merely draw attention to the fact that, as I said in my opening remarks, we should be quite happy with the wording of the new Public Order Bill, which I understand had its Second Reading yesterday in another place, where it says, "intended or likely". Either covers it perfectly well, I think. We should be quite happy about that and I hope that there would be no question of infringing freedom of speech in that respect.
I am grateful to the noble Lord, Lord Lyell, for his reply on behalf of Her Majesty's Government. I take his point that the new Public Order Bill is in process in another place. I should not like to withdraw at this stage but I am just wondering what the procedure would be if the Bill were allowed to lie in abeyance, perhaps for a short while, until we see how the Public Order Bill progresses in another place. Perhaps that might make it more relevant.
If the noble Lord would like me to give way, he would be very welcome to reply to that point. I should be happy enough to allow the Bill to lie in abeyance for a while—but I prefer not to withdraw, if your Lordships are in agreement, because I should not like us to lose sight of it. I think it is important and I would like to see it followed through without too much delay. So long as there is an assurance that the other Bill is being processed in another place, I should be happy enough not to press for a Committee stage in the immediate future.
In conclusion, I should like to thank those noble Lords who have participated in the debate. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
House adjourned at two minutes before nine o'clock.

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