Sitting of 22 January 1986

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

    Coventry (Housing Expenditure)
    Mr. Nellistasked the Secretary of State for the Environment what has been his Department's allocation to Coventry city council for housing expenditure each year since 1979; and if he will make a statement.
    The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): The housing investment programme allocations made to Coventry city council each year, beginning with 1978–79, have been £13·3 million, £13·7 million, £10·5 million, £7·7 million, £12·2 million, £8·1 million, £8·9 million, £7·7 million and for 1986–87, £7·3 million. Comparisons between years can be misleading, because since 1981–82 local authorities have been able to add to their spending power through the use of the prescribed proportion of their capital receipts.
    Mr. Nellist: Is the Minister aware that identifiable modernisations, repairs and renovations for Coventry now total about £150 million and that the Government's drip feed of £7·25 million means that many urgently needed repairs will not be completed until well into the next century? There is male unemployment of between 20 and 50 per cent. in the wards of Coventry, South-East, and not many of my constituents can afford £400,000 Barratt retirement homes in Dulwich.
    Mr. Patten: That question was put by the hon. Gentleman with characteristic moderation. First, the hon. Gentleman should explain to his constituents that the Government's allocation of housing money is but one part of the resources that are available to the city council. Another substantial source of funds can be from the councils own accumulated capital receipts, and I understand that it is planning to make use of them.
    Secondly, and lastly, I hope that the hon. Gentleman will encourage Coventry city council to do what I am advised it is already considering enthusiastically, namely, co-operating with private sector interests to bring more much-needed money into Coventry. We shall do all that we can to help the council through the urban housing renewal unit.
    Mr. Marlow: In the words of Opposition Members, are not some of the feudal estates that are run by some municipal authorities, including Coventry, among the great environmental disasters of the century? If we want
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    to help the constituents of the hon. Member for Coventry, South-East (Mr. Nellist), as we do, the sooner and the more we get the private sector into the management of public housing, the better.
    Mr. Patten: My hon. Friend is right. Some Labour authorities, to do them justice, do care and are trying extremely hard to bring all the private resources that are available to bear and into use. The Oldham and Salford authorities are two examples. Unfortunately, Labour-controlled city councils in other areas seem unable sometimes to manage their own housing stock properly. Yesterday—[Interruption.]—in Stoke-on-Trent, Central —the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) is not in his place—I saw an 80-year-old widow who had been left in the most awful conditions.
    Mr. Park: Those who are waiting to have their houses made habitable in Coventry or to gain accommodation for the first time—there are several thousands of them—will not be comforted by the Minister's reply to my hon. Friend the Member for Coventry, South-East (Mr. Nellist). In an earlier debate, the Minister may know that I spelt out the time that it would take to complete some of the schemes on which Coventry is already engaged—
    Mr. Speaker: Order.
    Mr. Park: I appreciate that you are calling me to order, Mr. Speaker, but you allowed the Minister to continue with his reply.
    Mr. Speaker: I was worried that the hon. Member for Coventry, North-East (Mr. Park) might continue to recount a previous debate.
    Mr. Park: I am sorry, Mr. Speaker.
    Will the Minister take into account the fact that the figures that he has produced show a steady deterioration? Is he aware that Coventry city council negotiated with private builders to refurbish some of the high-rise blocks of flats that need revamping, including the installation of central heating? After months of negotiations they backed out, and the city council has had to start all over again.
    Mr. Patten: I apologise for taking so long over my previous answer. I hope that the hon. Gentleman wi,1 not attempt to inhibit the delicate negotiations between the city council and a number of potential developers, which are aimed at bringing much needed private money into Coventry. It is that money, with perhaps the 'help of my Department and the urban housing renewal unit, that can lead to the solution of many of the problems to which he referred.

    Exchequer Grant (Local Authorities)
    Mr. Simon Hughesasked the Secretary of State for the Environment what percentage of the aggregate Exchequer grant settled on local authorities in England for 1986–87 will be paid to (a) local authorities in London, (b) Liverpool and (c) Leeds; and what difference this is from the percentage of the same three areas for 1985–86.
    The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): The amount of grant to be paid to the authorities will depend on their own decisions on spending in 1986–87.
    Mr. Hughes: No one can thank the Minister for that most unhelpful answer. I shall now ask her a

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    supplementary question which I hope she will answer. First, will she give the lie to the fact that the Government's rate support grant settlement has resulted in a reduction in the moneys given to the metropolitan districts outside London? The Library document confirms that fact. Secondly, will she confirm that Leeds will be £40 million short on the Government's own estimate of need, and that if Liverpool imposes the rate-capped settlement it will be unable to do other than cut services? The money has gone, not to the inner cities as a whole, but only to those where there are to be elections next May.
    Mrs. Rumbold: It is incontrovertible, from the document that is available in the Library, that such money as has been diverted has been diverted to the cities. I am sure that many of my right hon. and hon. Friends will confirm that fact.
    The hon. Gentleman asked for figures relating to Liverpool and Leeds. Last year, Leeds city council received a block grant of £111·9 million. This year it is expected to receive £124·5 million. Last year, Liverpool city council received £119·4 million. this year it will receive £137·6 million.
    Several Hon. Members rose—
    Mr. Speaker: Order. We have not got off to a very good start today. I ask for brief questions.
    Dr. Hampson: When my hon. Friend made that response, I am sure that she was not trying to mislead the House. Does she agree that as Leeds has inherited many of the county council's functions, about 2·5 per cent. less than last year is coming to Leeds from Government resources? Although some cities have benefited—and we believe that that is right — many cities under Conservative control have not.
    Mrs. Rumbold: The inner city problems that face Leeds are already taken into account in its grant-related expenditure assessment. It loses grant-related expenditure overall in its 1986–87 settlement because of the technical improvements that we have made to the education and personal social services grant-related expenditure. However,the resulting grant loss is more than balanced by the grant gains to Leeds as a result of the abolition of targets and the consequent changes in the block grant mechanism.
    Mr. Fatchett: Will the Minister confirm that the amount of money that the Government are making available to Leeds does not adequately take into account the transfer of services from the West Yorkshire metropolitan county council? Will the Minister confirm the when that is taken into account, Leeds will be facing a cut?
    Mrs. Rumbold: I repeat that the resulting grant loss which I analysed for my hon. Friend the Member for Leeds, North-West (Dr. Hampson) is more than balanced by the grant gains which go to Leeds as a result of the abolition of targets and the consequent changes in the block grant mechanism. The money that has been allocated to Leeds will more than adequately take up the effects of abolition.
    Mr. Forman: I welcome my hon. Friend to her new appointment. Is she aware that many of my right hon. and hon. Friends and I are very grateful for the measures that were taken to make some important concessions to the
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    outer London boroughs in connection with the London arrangements after the demise of the Greater London council?
    Mrs. Rumbold: I thank my hon. Friend for his kind words. The aim of my right hon. Friend the Secretary of State for the Environment was to ensure that the financial effect of abolition per se was as neutral as possible on all successor authorities. Therefore, the successor authorities have received block grant support for their spending through the reattributed grant-related expenditure that comes from the metropolitan authorities and the Greater London council, which are to be abolished.

    Rates
    Mr. David Atkinsonasked the Secretary of State for the Environment if he is yet in a position to say when he plans to publish his Green Paper on rate reform.
    The Secretary of State for the Environment (Mr. Kenneth Baker): I hope to do so next week.
    Mr. Atkinson: As the rate support grant system is utterly discreditable and incomprehensible and this year continues to penalise the thrifty, will my right hon. Friend use the opportunity offered by his Green Paper to abolish it lock, stock and barrel and to replace it with a system of local government financing which will hold councillors more accountable to their electorates and broaden councils' scope to raise expenditure?
    Mr. Baker: I completely agree with my hon. Friend that the purpose of any change should be to improve local accountability and to bring home to local electors the consequences of their councils' spending.
    Mr. Cartwright: Does the Secretary of State recall the view of the Layfield committee, that local income tax offers the only realistic way in which to provide a new source of revenue for local government and to increase local accountability? If so, why is he going for a flat-rate system that will bear most harshly on those most in need?
    Mr. Baker: I must ask the hon. Gentleman, who speaks for the Social Democratic party on these matters, to await my Green Paper. I understand from what he said that the SDP is now in favour of local income tax, but I think he will find that it has certain unattractive features which might become more evident the more it is examined.
    Mr. Heddle: Reverting to the last question, does my right hon. Friend agree—
    Mr. Speaker: Order. We cannot do that. We are on this question.
    Mr. Heddle: Does my right hon. Friend agree that abolishing the rating system in its present form root and branch and replacing it with local income tax would increase the standard rate of tax by at least 13p in the pound? Would that not be a total disincentive to every person in the country to work?
    Mr. Baker: Those are the questions that the SDP will have to answer when it formulates its proposals for reforming local government financing.
    Mr. Freeson: Reverting to the first supplementary question, may I ask whether the Secretary of State intends

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    or expects to bring forward legislation on this major reform, for which we have waited 10 years, during this Parliament?
    Mr. Baker: That depends on when the next election will be. I intend to consult widely during the coming months. We will then be able, I should think at about this time next year, to present a White Paper setting out the Government's proposals clearly so that, by the time of the next general election, all parties will be able to set out the attractions of their proposals to the electorate.
    Mr. Robert B. Jones: Can my right hon. Friend assure me that any proposals in his Green Paper concerning the rate support grant system will be fairer to counties such as Hertfordshire? What possible morality can there be in the average rate support grant being 46 per cent., when rate support grant for a country that keeps its expenditure under control is only 13 per cent.?
    Mr. Baker: My hon. Friend, who is knowledgeable about local government finance, has put his finger on the point. One of the elements of local government finance is the system known as resource equalisation, which means that there is a substantial transfer of resources from more prosperous areas to less prosperous ones. It has been endemic in the system since 1929. My hon. Friend will find that in the Green Paper I quantify it, set out the pros and cons about whether it should remain, whether it should be reduced and over how long it should be phased out, if it should be phased out.
    Mr. James Lamond: What is the point of the Government trying to improve local accountability when they have so far introduced 12 local government Bills, most of which restrict local councillors' ability to carry out the mandates on which they were elected?
    Mr. Baker: The hon. Gentleman goes to the heart of the problem. When the Green Paper comes out next week, he will see that there is a clear choice, not only for the House, but for the country, as to whether there should be more central control of local government or more local accountability. In essence, this is a constitutional question.
    Mr. Ward: When my right hon. Friend brings his proposals for reforming the rating system before the House, will he bear in mind that, while many of us accept the need for some redistribution, there is great resentment in the shire counties because money is being transferred to areas where there is no local accountability and large sums are squandered on hare-brained schemes?
    Mr. Baker: I agree. The whole thrust of my proposals, as my hon. Friend will see, is to give local authorities greater responsibility for making their own spending decisions so that they can say to their electors, if they want to support proposals, that it will cost them so much. At the moment, when a local elector goes into the polling booth and makes a judgment on his council, he finds it exceedingly difficult to judge whether the council is efficient or inefficient and whether it is thrifty or not, because of the complicated grant system.

    Rate Support Grant
    Mr. Pikeasked the Secretary of State for the Environment what representations he has received following the recent announcement on rate support grant settlements.
    The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): I think it is fair to say that my right hon. Friend and I have both received numerous representations.
    Mr. Pike: The Secretary of State will have received representations regarding section 137, which many local authorities principally use to attract industry, to keep jobs in their areas and to assist voluntary organisations. Because of the way that the RSG is being changed, many councils will have insufficient money to maintain those important services. Will the Minister give me an assurance that until the Widdicombe committee has reported on these aspects he will guarantee that councils can maintain those important programmes?
    Mr. Waldegrave: The hon. Gentleman refers to a real problem, which my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) has met the Association of Metropolitan authorities to discuss. I cannot yet give the assurances that the hon. Gentleman seeks. We are still gathering facts about the matter, but I recognise the problem.
    Mr. Adley: Is my hon. Friend aware that supporting the Government on this issue is hazardous in the extreme? After nearly 16 years as a Member of this House I find myself in the extraordinary position of being criticised by the Christchurch and East Dorset Conservative Association for voting in favour of the rating proposals which were passed on Monday. Will he make it quite clear that, the Government having made their proposals known in Dorset, it is up to the Dorset county council to decide whether to introduce a large, medium or small rate increase this year?
    Mr. Waldegrave: My hon. Friend is right. The most crucial decision is the spending level of the council, and that is up to the local authority. I confirm what he said.
    Mr. Meadowcroft: Will the Minister confirm that he has had representations from Leeds city council pointing out that not only will the net amount that it will receive go down on comparable terms this year, but that in comparison with the other metropolitan districts it has been treated particularly badly? Will he explain to the council when it comes to see him and his colleagues on 3 February why it has lost so much money compared with other local authorities?
    Mr. Waldegrave: I am not sure that the situation in Leeds is quite as bad as the hon. Gentleman sets out, but I have no doubt that when the council meets my right hon. Friend the Secretary of State, or any other Minister, it will have the matter properly explained to it.
    Mr. Powley: I draw the attention of my hon. Friend to a statement made in my constituency on Friday last by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who said publicly that were a Labour Government to be brought back into office after the next general election they would immediately pay back to the shire counties the sum of £13 billion, which the Labour party allegs has been shifted from them by the Government? Is that not a most irresponsible statement? Is it not made even more irresponsible in the light of the fact that under the regression analysis basis the Labour Government shifted vast resources from the shire counties to the inner cities?
    Mr. Waldegrave: My hon. Friend's question confirms what I have long suspected to be the truth—that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) is anxious not to find himself part of a future Labour Government who would be an embarrassment to him. Therefore, he is making a number of irresponsible comments to ensure that there is no danger of that.
    Mr. Allan Roberts: Has the Minister received representations from the leader of Sefton council, a Conservative council which is a paragon of underspending virtue? The leader of the council, Mr. Ron Watson, supported rate capping on the basis that when the over-spending councils were dealt with there would be more money available for low-spending councils, such as Sefton. He is wondering where that money is. The rate support grant settlement will mean a 20 per cent. rate increase in an authority which has already cut services to the bone.
    Mr. Waldegrave: I am sure the hon. Gentleman welcomes the fact that inner city authorities have gained from the settlement. There are still problems for all authorities, because we are still seeking economies, even from reasonably low spenders. However, this year's settlement has brought more help than the previous system, even to authorities such as Sefton.
    Mr. Straw rose—
    Mr. Speaker: Mr. Colvin.
    Dr. Cunningham: On a point of order, Mr. Speaker—
    Mr. Speaker: Order.
    Dr. Cunningham: On the previous question to the Secretary of State, my hon. Friend the Member for Blackburn (Mr. Straw) and I expressed a wish to be called.
    Mr. Speaker: It was my fault. I did not see the signals. I apologise.
    Mr. Straw: I refer to the stunt performed by the Secretary of State on Monday, when he published the grant recycling 1986–87 paper in which he tried unsuccessfully to persuade his hon. Friends about the amounts that would be received under grant recycling. Will the Minister answer the question that he dodged on Monday? What assumption about increases in local authority spending were included in that document? Was it 9 per cent.? If not, what was the percentage?
    Mr. Waldegrave: I dodged no question and no answer. There was an assumption as to what would be the effect of a pool of £400 million.

    Waste Management (Report)
    Mr. Colvinasked the Secretary of State for the Environment if he will make a statement on the recommendations of the document produced by the Commission on Environmental Pollution entitled "Managing Waste—the Duty of Care".
    Mr. Waldegrave: My right hon. Friend announced on 10 December last a number of measures which the Government propose to take to tighten up control over waste disposal. Some of those respond directly to recommendations in the latest report of the Royal
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    Commission on environmental pollution. The Government are considering the other recommendations and will be responding fully later this year.
    Mr. Colvin: Is my hon. Friend aware that the report, on page 160, suggests that the regulatory authorities should be more ready to communicate the findings of their investigations to the public in an open-minded way? Does he agree with the recommendation that waste companies should be more ready to make the results of monitoring of waste plants public, in order to allay anxiety that can arise from the veil of secrecy which at present overrides the monitoring results?
    Mr. Waldegrave: My hon. Friend has become an expert on such matters as a result of events in his constituency. His comments are correct. The Government intend to try to achieve further openness in these matters. A working group is trying to find ways to do that without loading intolerable burdens on industry. I accept the policy direction in which my hon. Friend wishes to move.
    Mr. Heffer: Does the hon. Gentleman agree that the Government's failure to deal with pollution of the environment has been absolute? Over the years they have done nothing to carry out the proposals in the reports of commissions. Is it not time that they faced the problem of pollution? Unless we are careful, the entire nation will be dying stage by stage, because the Government have not begun to deal with the problems of pollution.
    Mr. Waldegrave: I think the hon. Gentleman has shot himself in what the late Fats Waller called one of his pedal extremities. The Government moved quickly to accept many of the recommendations of the most recent Royal Commission on environmental pollution. For over 10 years the previous Labour Government—of which the hon. Gentleman was a member for a time—failed to introduce part II of the Control of Pollution Act 1974, which we have now moved to implement.
    Dr. David Clark: May I draw to the Minister's attention paragraphs 5.28 and 5.29 of the Royal Commission's report, which refer to the experiments and small-scale developments in two of the most illustrious universities in the country—Manchester and Salford—which have been so greviously hit by the Government? They are developing a plan of extracting oil from domestic refuse. Will the Minister pay heed to those paragraphs, and not wait for a wider response? Will he encourage those two universities to escalate those experiments to a pilot scheme?
    Mr. Waldegrave: I shall look into what the hon. Gentleman says. I cannot respond to him off the cuff now, but I listened with sympathy to what he said.

    Parish and Town Councils (Rates)
    Mr. Holtasked the Secretary of State for the Environmet how many parish or town councils raised a rate of 3p or more in the last year for which records are available; and if he will make a statement.
    Mrs. Rumbold: About 1,900 in 1985–86.
    Mr. Holt: I am grateful to my hon. Friend for her answer. Do she and the rest of the Government appreciate that there is no control whatsoever of parish or town council precepts? They can raise any rate they like, rate

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    capping or not, and the district councils have to bill for that. Unless the Government take some form of action shortly, every town and parish council in the country is liable to fall into the hands of a Bernie Grant, a Hatton or a Livingstone, and thereby create absolute mayhem for the Government.
    Mrs. Rumbold: I understand my hon. Friend's concern about the potential expenditure of parish councils. I believe that that matter is under discussion and will be part of my right hon. Friend's Green Paper.
    Mr. Boyes: Further to the question asked by the hon. Member for Langbaurgh (Mr. Holt), may I ask what proposals the Government have for ensuring that district councils are not penalised for such expenditure by parish councils, for example those in my area, where the parish councils might spend a total of over £1 million? In future years, will the Minister consider informing district councils of the amount allowed in GREA for parish council precepts?
    Mrs. Rumbold: The most effective way of ensuring that parish councils keep down their expenditure can be drawn to the attention of the electorate at the time of an election. I suggest that the ballot box is the most effective way of controlling that expenditure.
    Mr. John Mark Taylor: Will my hon. Friend acknowledge that she is aware of the great weight of responsible opinion in my suburban constituency that is hostile to having a framework of parish councils imposed upon it?
    Mrs. Rumbold: I note what my hon. Friend has said.

    Sports Council
    Mr. Pendryasked the Secretary of State for the Environment when he next expects to meet the chairman of the Sports Council to discuss the future development of sports funded by the council.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): I meet regularly the chairman of the Sports Council to discuss issues relating to the development of sports. We last met one week ago.
    Mr. Pendry: When the Minister next meets the chairman of the Sports Council, will he discuss the considerable financial loss to sport when the Greater London council and metropolitan counties are abolished? How will he attempt to explain to the chairman how the miserly £5 million grant from the Government to the Sports Council can meet the requirements of sporting projects currently financed by those authorities, especially when the Sports Council estimates a shortfall of £8 million, plus 23 staff, and the Central Council of Physical Recreation estimates a shortfall of as much as £30 million?
    Mr. Tracey: The hon. Gentleman and the House will be aware that recently the Sports Council grant was increased to £37 million from £30·6 million, which is the biggest increase that has ever been given to the Sports Council. It represents an increase of 150 per cent. since the Government came into power. The money that the Sports Council holds is in its hands to disburse. I remind the hon. Gentleman that district and borough councils make the greatest contribution to sport, not the Sports Council.
    Mr. John Carlisle: When my hon. Friend next meets the chairman of the Sports Council, will he make it clear that the visit to South Africa by 12 women cricketers on holiday was in no way on the instruction of the Women's Cricket Association, so the Women's Cricket Association was wrong to ban—
    Mr. Speaker: Order. The hon. Gentleman will see that the question is about sports funded by the Sports Council.
    Mr. Carlisle: Thank you, Mr. Speaker. The threat that is now being made, that the Sports Council's grant may be withdrawn from the Women's Cricket Association because of that visit is spurious and should not have been made, because the grant will still go ahead despite the
    Mr. Tracey: My hon. Friend said that the ladies were in South Africa on holiday. If they happen to play cricket while they are there I have no control over that, nor does the Sports Council. The Government entirely support the Gleneagles agreement and all governing bodies are well aware of that.
    Mr. Evans: Is the Minister aware of the growing anger of Members of Parliament from rugby league playing areas about the attitude of the rugby union authorities to amateur rugby league players? Will he make it clear to the chairman of the Sports Council that no further taxpayers' money will be made available to the rugby union authorities unless they drop the particularly obnoxious form of apartheid that they practice?
    Mr. Tracey: The hon. Gentleman will be pleased to hear that the Sports Council is doing all it can to bring about conciliation between the British Amateur Rugby League Association and the Rugby Football Union. I have no locus in the matter. It is entirely a matter for the Sports Council, as it is also entirely a matter for the Sports Council as to how it distributes its funds.
    Sir Paul Hawkins: Rather than pay an increased grant to the Sports Council, would it not be better to give that money to the shire counties and let them spend it on what they wish?
    Mr. Tracey: The money that local authorities get for sports purposes is included within the local environmental services grant. Expenditure on sport and recreation in local authorities is running at over £700 million a year. The Sports Council grant is for specific purposes. I have no hesitation in saying that both the Sports Council and local authorities are disbursing their funds correctly.
    Mr. Merlyn Rees: So that the Sports Council may be clear about how it is to spend the extra money, will the Minister confirm that the Government regard the British Amateur Rugby League Association—many young men in my constituency play that game—as a bona fide amateur organisation?
    Mr. Tracey: I am sure that the British Amateur Rugby League Association is an amateur body.
    Mr. Tony Banks: Like the Government Front Bench.

    Tillingham Hall Development (Inquiry)
    Mr. Proctorasked the Secretary of State for the Environment when he expects the public inquiry with regard to the proposed Tillingham Hall development to commence; and if he will make a statement.
    Mr. Tracey: The public inquiry is due to start on 18 March. As the case is currently before the Secretary of State, it would not be appropriate for me to make a statement at present.
    Mr. Proctor: In view of the widespread interest in the proposed Tillingham Hall development in the green belt at Maldon in my constituency, and the widespread opposition to it throughout the constituency, will my hon. Friend give an assurance that the delay between the end of the public inquiry and the ministerial decision on the appeal will be kept to a minimum?
    Mr. Tracey: Yes, Sir.
    Dr. Cunningham: Is the Minister aware that the Government appear to be creating the impression that they do not care about the maintenance of the green belt? Do the Government support developers' proposals for a ring of private enterprise new towns around London in the green belt? Does not the Government's White Paper, published last year, reinforce the view that they want to see an erosion of the green belt by proposing that simplified planning zone powers should be given to private developers? May I make it clear to the Minister, the Department and the House that the Labour party is totally opposed to the creeping erosion of green belt policy?
    Mr. Tracey: This is the first time that we have heard from the hon. Gentleman this afternoon, but I was not aware that he had been asleep for the last few months. My right hon. Friend the Secretary of State made it clear in a speech to the House-Builders Federation that the Government are firmly committed to the green belt and the conservation of the countryside. In an Adjournment debate in the House on 19 December I also made it clear that the Government are committed to that policy. I cannot pass judgment on individual applications until there is an application or an appeal.

    Voluntary and Charitable Organisations (Funding)
    Mr. Allan Robertsasked the Secretary of State for the Environment how many representations he has received since his appointment as Secretary of State about funding of those voluntary and charitable organisations which are presently supported by the metropolitan councils.
    The Parliamentary Under-Secretary of State for the Environment (Sir George Young): At least 23.
    Mr. Roberts: Is the Minister aware that the chaos which the Opposition predicted would follow the abolition proposals for the metropolitan counties is now beginning to develop, especially in the voluntary sector? Why have the Government changed their policy? Why are they now refusing to allow transitional grants to be given to voluntary organisations which operate wholly or for the most part in one district area? Lots of voluntary organisations are not being funded, they cannot get funds from district councils, and their future is threatened.
    Sir George Young; There has been no change of policy. We have always made it clear that transitional grant was aimed at local schemes funded by the metropolitan counties, and not countywide schemes. Under section 48 we have given local authorities powers to set up countywide schemes, and it is for them to decide whether such schemes are needed.
    Mr. Favell: Does my hon. Friend agree that far too many voluntary bodies funded by the metropolitan counties depended not on voluntary giving but on money from rates and taxes? Will he encourage local authorities and the Government, if it is within his right so to do, to look carefully at bodies that receive money from ratepayers and taxpayers to see how many people doing voluntary work are paid for it?
    Sir George Young: Many of my right hon. and hon. Friends will agree with what my hon. Friend says. We have made it clear that transitional grant will not be available for certain voluntary organisations currently funded by the metropolitan counties. If local councils wish to go ahead and fund with ratepayers' money, they must be held accountable for that at the next election.
    Mr. John Fraser: Is the Minister aware that many local, voluntary and charitable groups face sudden and tragic extinction as a result of the abolition of the metropolitan counties and the GLC? In the GLC area only a quarter of the money that was available from the GLC is now available by way of transitional grant. The problem is illustrated by that mecca of municipal meanness, Wandsworth, which even if it wanted to help all the voluntary and charitable groups in its area, now finds itself overspent under section 137. Will the Minister take the opportunity presented by the Local Government Bill to amend the law to do some justice to voluntary and charitable organisations?
    Sir George Young: In an earlier exchange my hon. Friend the Minister for the Environment, Countryside and Local Government dealt with the issue in section 137. We are discussing it with the Association of Metropolitan Authorities and it is under review. It is not the case that transitional grant was ever meant to cover the totality of GLC giving. It is extra governmental assistance on top of the resources of London, which are still available after abolition. I am sure that the hon. Gentleman will share my pleasure at the fact that there is now progress towards a collective scheme in London that will involve a substantial sum of money.

    Sites of Special Scientific Interest
    Mr. Wainwrightasked the Secretary of State for the Environment how many sites of special scientific interest or sites about to be so designated have been damaged or destroyed since the introduction of the Wildlife and Countryside Act.
    Mr. Kenneth Baker: The Nature Conservancy Council has advised me that since the Act was introduced just over 500 sites have been damaged. In most cases the damage was relatively minor and short-term. That can be compared to more than 5,000 sites of special scientific interest which the Nature Conservancy Council has identified.
    Mr. Wainwright: Is the Secretary of State aware that some of the worse cases of organised vandalism against scientific knowledge have been perpetrated by public statutory bodies? Will he now review the working of this part of the Wildlife and Countryside Act in order more effectively to restrain public bodies from their destructive intentions?
    Mr. Baker: If the hon. Gentleman will give me details of specific cases I shall personally investigate them, because I am as concerned as he is about the loss of and damage to these sites.
    Mr. Kenneth Carlisle: Does my right hon. Friend agree that sites of special scientific interest will continue to be under threat until notification is completed? Although the Nature Conservancy Council has been greatly helped by the substantial extra funds provided by the Government, will my right hon. Friend tell us when notification will be completed?
    Mr. Baker: My hon. Friend is on to a good point. The chairman has said in his report that he hopes that the process of notification of the sites to all owners will be completed this year. He will be helped in that by the considerable extra funding that we have provided for the NCC this year — an extra £9·4 million. That is a substantial increase, which follows a 25 per cent. increase last year, and is money well spent.
    Mr. Hardy: Does the right hon. Gentleman share our hopes that the loss of such valuable sites, which are extremely important parts of our natural heritage, will soon end? If that is achieved, will it not be largely due to the amending legislation introduced by my hon. Friend the Member for South Shields (Dr. Clark)? Is it not rather a pity that the Government sought to take all the credit for that advance?
    Mr. Baker: I would not give the hon. Member for South Shields (Dr. Clark) all the credit, but the amendment that he helped to put on the statute book last year certainly helped. However, the essence of this is the resources which the Government will make available. It is the resources which will save the sites. We have put our money where our environmental mouth is.

    Home Ownership
    Mr. Spencerasked the Secretary of State for the Environment what initiatives he is taking to promote owner-occupation in the inner cities.
    Mr. John Patten: A lot. Let me give some examples. We are assisting new private house building in inner cities through the urban development grant. We are financing housing association development for home ownership, with an exphasis on the inner cities. We are urging local authorities to sell their empty housing for home ownership, perhaps after renovation. We are bringing more wasted urban land into use by giving derelict land grant for land reclamation and pressing the sale of vacant public land. My Department's urban housing renewal unit is helping authorities to bring run down council housing back into use for owner-occupiers.
    Mr. Spencer: Does my hon. Friend agree that we cannot promote the welfare of the inner cities unless we promote owner-occupation there? Does he agree that city councils such as Leicester, which makes no provision for local home ownership, and which this year sold only enough land to the private sector to build four houses, are not showing much faith in the inner cities?
    Mr. Patten: Yes, I agree entirely with my hon. and learned Friend. It is critical for a good social mix in the inner cities for there to be a mixed set of tenures, including owner-occupation. It is sad that councils such as Leicester should take the negative attitude that they are doing.
    Mr. Chris Smith: Does the Minister agree that the greatest deterrent to home ownership in the inner cities is the extremely high level of mortgage interest rates, which are currently at risk of going even higher? What representation has he made to his right hon. Friends the Chancellor of the Exchequer and the Prime Minister about the impact of any increase in the level of general interest rates on mortgages?
    Mr. Patten: I do not agree with the hon. Gentleman at all. The reason why so little owner-occupation is being promoted in so many inner city areas is the stupid intransigence of so many Labour authorities which refuse to make use of the opportunities available to them and refuse to co-operate, in the way that good Labour authorities such as Salford and Oldham do, with the private sector and the Government.
    Mr. Steen: Will my hon. Friend consider using some of the additional money that he has made available for the inner cities to reduce the number of houses in public ownership? Does he agree that one of the best ways of doing that would be by switching the weekly rental payments for houses, maisonettes and flats to a mortgage repayment? In that way, public ownership could be switched to private ownership at a stroke.
    Mr. Patten: Yes, that is an interesting idea and we shall consider it.
    Mr. Tony Banks: It is all very well for well-heeled Tory Ministers to talk about owner-occupation, but what advice can be offered to the people of Newham, for example, in public sector housing, 90 per cent. of whom cannot afford a deposit for a mortgage, while the London Docklands Development Corporation is building luxury houses and flats at £50,000 and £60,000 a go? What good are they to the people of Newham?
    Mr. Patten: The Department's urban housing renewal unit now has a budget of £50 million for the coming financial year to make it possible for councils such as Newham to co-operate in bringing mixed forms of tenure back into the inner cities. There is a need to promote sensible debate about the need for a better social mix in the inner city, which partly, but not wholly, involves the introduction of owner-occupation. I believe that Labour and Liberal Members of Parliament agree with that.
    Mr. Lyell: Bearing in mind the large amount of empty property in the ownership of local authorities over years and years, is it not clear now that urging is not enough? Will my hon. Friend seriously consider bringing in legislation to require local authorities, whose domestic property has been empty for more than one year, to put it immediately upon the open market?
    Mr. Patten: It is a scandal. My hon. and learned Friend is right. If we look at the areas where there is the highest homelessness and the most rate rebates, we find them in councils controlled by the Labour party in London. We may have to take radical action. Last July we distributed a circular giving councils the opportunity to do more to bring back into use empty property in their ownership. If they do not do that, we shall have to think again.
    Mr. Alton: Given that high unemployment makes it virtually impossible for many people in the inner cities to become owner-occupiers, does the Minister agree that

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    housing co-operatives are a good way of promoting more ownership in inner cities? If so, what extra funds and personnel will be made available to pursue that objective?
    Mr. Patten: Yes, I think that the hon. Gentleman is right. The housing co-operative movement is important. It is a tragedy that councils have sometimes put barriers in the way of housing co-operatives getting going in various city areas. I hope that when we debate the Housing and Planning Bill we shall have a chance to talk about such ideas.
    Mr. Peter Bruinvels: Is my hon. Friend aware that only 4,500 council houses and, surprisingly, seven council flats have been sold in the city of Leicester? Will he promote and speed the sale of all council houses and make it clear that the new arrangements for the sale of council flats should be distributed to all tenants? Is he further aware that there are now about 10,000 empty properties in the county of Leicestershire?
    Mr. Patten: My hon. Friend will not have long to wait, I hope, for the publication of the Housing and Planning Bill, which will contain our proposals for increasing the rate of sale of flats. I am appalled to learn from him of the substantial number of empty properties in Leicestershire. I am equally appalled by the substantial land holdings that so many inner city authorities have which could be used to bring housing back into the inner cities and lead to a housing-led regeneration of some of our inner city areas.
    Mr. Janner: Is the Minister aware that the Government's policies have ravaged the housing and construction programmes of the city of Leicester in the public and private sectors? Is he further aware that there is no point in having land available for building if no one has the money to buy houses and if the people who have bought them are unemployed and cannot pay the mortgage? Why is he not doing anything to help the owner-occupiers of Smith houses in my constituency, who cannot have them put right because, to no small extent, of the two Tory MPs who represent the city?
    Mr. Patten: I am rather confused. It was only a few weeks ago that the hon. and learned Gentleman was praising me for the action that I had taken over Smith houses in Leicester. I am sorry that he seems to have changed his tune. The trouble with city councils such as Leicester is that they do not seem to have the imagination to promote a multiplicity of forms of tenure—home ownership, housing associations, housing co-operatives and building for special needs.
    Mr. John Fraser: If the Minister wants to help poorer owner-occupiers, why has his Government brought about a position where virtually every city authority, Labour and Conservative-controlled, has had to cut repair and improvement grants, which are the best way to help the rotting privately owned housing stock in our cities?
    Mr. Patten: During the life of this Parliament we have already spent about £2·5 billion on improvement grants. We are spending about £500 million a year. That expenditure helps to diversify tenure in the inner cities. If one talks to tenants as my hon. Friend the Under-Secretary of State for the Environment the hon. Member for Ealing, Acton (Sir. G. Young) did today on the Doddington estate in the constituency of the hon. Member for Battersea (Mr. Dubbs), one finds that tenants wish to see their estates privatised and home ownership brought into those areas.

    Urban Housing Renewal Unit
    Mr. Galleyasked the Secretary of State for the Environment what progress has been made by the urban housing renewal unit; and if he will make a statement.
    Sir George Young: The urban housing renewal unit is making excellent progress in helping local authorities implement a range of imaginative solutions to the problems of their rundown estates. The unit is concentrating its efforts on the 69 authorities with the worst problems, and has already visited 43 of those, offering detailed advice and assistance tailored to individual estates. A further 19 visits are planned over the next three months.
    Mr. Galley: I am grateful to my hon. Friend for that helpful reply. The principles underlying the urban housing renewal unit are excellent. He will be aware, no doubt, of the delicate negotiations that are often necessary to establish a partnership between the public and private sectors to assist priority estates, such as the Abbey park estate in my constituency. Can he assure the House that early decisions will be taken, so that private developers will not be discouraged by bureaucratic delay or inadequate public sector contributions to the overall scheme, and so that the tenants at Abbey park and elsewhere can benefit sooner rather than later?
    Sir George Young: As my hon. Friend knows, I have written to him in response to his recent letter. I am very keen for the sort of initiative that has been described to go ahead. I hope to be able to make an announcement shortly about the council's application for a community refurbishment scheme on the Abbey park estate.
    Mr. Rooker: Can the Minister tell us whether the renewal unit will be giving help and advice to the landlords who have the biggest percentage of their housing stock empty, central Government, at 6.·8 per cent?
    Sir George Young: As the hon. Member knows perfectly well, the urban housing renewal unit is aimed at helping local authorities. There is a separate range of intitiatives taking place in central Government to reduce the number of vacancies in central Government stocks.

    Local Authorities (Planning)
    Mr. Adleyasked the Secretary of State for the Environment if he will take action to reinforce the ability of local authorities to control the planning environment in their own areas.
    Mr. Tracey: In general, local authorities have, under the planning Acts, adequate powers to control and influence development where it is necessary in the public interest.
    Mr. Adley: Would that were so. Is my hon. Friend aware that both Christchurch and Wimbourne district councils in my constituency are near despair at their inability to control the planning environment in their own areas and that the Department's presumption in favour of the big developers, often outsiders, whose protestations of the public interest are greeted with hollow laughter in my constituency, is strongly opposed? Is he aware that in the south-east of the county the face of Dorset is being changed, quite contrary to the wishes of the people there and of the elected councils?
    Mr. Tracey: We are very well aware of the strong feelings of my hon. Friend. I seek to reassure him by telling him that only one in 25 planning applications is the subject of an appeal, and that, of appeals only about one third are successful. In determining appeals the Secretary of State is required, as is the planning authority at application stage, to have regard to the development plan, together with other material considerations.

    Local Authority Public Services
    Mr. Phillip Oppenheimasked the Secretary of State for the Environment if he will make a statement on the progress of privatisation of local authority public services.
    Mrs. Rumbold: The Government remain disappointed that so few authorities have seen fit to expose their services to competition. Opportunities for increased efficiency, and savings for ratepayers, are clearly being lost.
    Mr. Oppenheim: Does my hon. Friend agree that Labour's opposition to the privatisation of services is a reflection of its attitude that the public are there, not to be served, but as an endless source of cash for local authority workers?
    Mrs. Rumbold: I agree with my hon. Friend that it is sad that more Labour-controlled authorities have not taken the opportunity, on behalf of their ratepayers, to contract out their services, since there would be undoubted savings for their ratepayers by so doing.

    Capital Applications
    Mr. Freesonasked the Secretary of State for the Environment what representations he has received from local authorities concerning the level of capital applications made for 1986–87.
    Mr. Waldegrave: I have received a number of letters about those capital allocations for which my right hon. Friend's Department is responsible.
    Mr. Freeson: Does the Minister recall that during the past six years there has been a reduction of gross capital expenditure—which includes capital receipts—from just over £5,000 million to a current figure of about £2,500 million a year, a reduction of 50 per cent. in gross capital expenditure available? Is he further aware that in the past two years alone there has been a reduction of £1,000 million in real terms? How is it possible for local authorities to undertake repair, construction and other capital schemes, by themselves or jointly with the private sector, if there is a constant reduction in the capital available to them for housing purposes?
    Mr. Waldegrave: The Government have to judge the balance between public and private investment. The restraint on public investment, which of course causes problems for those public authorities, is part of the picture that has led us to have overall record investment, including public and private, in the economy at present.

    Home Ownership
    Mr. Thurnhamasked the Secretary of State for the Environment what are the objectives of his Department's home ownership policy; how is he monitoring its effectiveness; and if he will make a statement.
    Sir George Young: The objective of my Department's home ownership policy is to enable more people to own their own homes, as the overwhelming majority wish. The measure of its effectiveness is the increase of more than two million in the number of owner-occupied homes in Britain since we took office in 1979. In that time, Government policies have directly achieved the sale of more than 800,000 public sector dwellings to sitting tenants.
    Mr. Thurnham: If home ownership is brought within the reach of more people, does that not enable local authorities to concentrate resources on those in greatest need?
    Sir George Young: My hon. Friend is quite right. If we can bring home ownership within the reach of those on the waiting list or those who are already local authority tenants, local authorities can concentrate their resources on those in need whom the private sector cannot help.
    Mr. Dubs: What about the people on the waiting list who cannot afford to buy their own homes? Will the Minister comment on the policies of local authorities, including Wandsworth council, which are selling off many empty council properties to people who are not on the waiting list, thus saying to people who are homeless, badly housed, overcrowded and living in tower blocks "You have no chance of better housing in your lifetime"?
    Sir George Young: I spent the morning in the hon. Member's constituency of Battersea. The threat to security of tenure is not to the tenant, but to the hon. Gentleman, as a result of the imaginative policies pursued by the local authority. When estates are privatised and flats are sold, they are offered in the first instance to those on the waiting list or to those who are already in local authority accommodation, who have the benefit of discounts. In general, those are the people who buy privatised property.

Standing Committee (Casting Vote)
3.31 pm
Mr. Simon Hughes: On a point of order, Mr. Speaker. I seek your guidance on a matter that arose in Standing Committee this morning. The Fourth Standing Committee on Statutory Instruments sat this morning to consider the Local Government Reorganisation (Transitional Provisions) Order 1985, which deals with transitional powers as a result of the abolition of the Greater London council at the end of March.
At the end of the debate, when the Question was put that the instrument be considered by the Committee, there was a tie of seven votes for the Government and seven votes for the Opposition. The Chairman of the Committee cast his casting vote with the Government. A perusal of "Erskine May" does not appear to reveal any precedent to suggest that it is appropriate for a casting vote to be used in that way. I make no criticism of the Chairman. However, I understand from the advice that I have taken since then, that such a case is extremely rare. I ask your guidance about whether it would be appropriate in future cases of a tie to follow the precedent that allows the matter, if the Government permit, to be raised again on the Floor of the House, rather than to be defeated by the casting vote, which precludes further debate.
Mr. Speaker: I have no responsibility for what goes on in Standing Committees. That is not a matter for me.
Dr. David Owen: On a point of order—
Mr. Dennis Skinner: Further to the point of order, Mr. Speaker. I was on the Committee—
Mr. Speaker: Order. I did not call the hon. Member for Bolsover (Mr. Skinner).
Mr. Skinner: But this is on the same point of order—
Mr. Speaker: Order. I do not care. I did not call the hon. Member.

Cabinet Minutes
3.33 pm
Dr. David Owen: On a point of order, Mr. Speaker. The country is agog as speculation continues in newspapers and on the radio about the naming of civil servants. Will the Leader of the House make a statement about how the Government intend to handle the matter, which is causing grave concern? It should not be possible for civil servants to be named in such a way, and for no discussion to take place in the House on the crucial matter of the Cabinet Secretary's inquiry in to the leak.
Several Hon. Members rose—
Mr. Speaker: Order. I have had no notification from the Government that they intend to make a statement on the matter today.
3.34 pm
Mr. Tam Dalyell: Arising out of column 1153 of Hansard of 15 January 1986, could we have some explanation whether Miss Colette Bowe consulted the Solicitor-General or the people in the Royal Courts of Justice before giving information to the Press Association?
Mr. Speaker: I know nothing about that matter. I have not had a chance to look up column 1153, but I do not think that the matter is for me.
Mr. David Winnick: On a point of order, Mr. Speaker. Is there no way that the procedures of the House can accommodate the present position? It is being widely reported that a senior civil servant in the Department of Trade and Industry has been given immunity from prosecution. That was reported last night on the radio, and was the first news item today. Yet no statement is to be made to the House by either the Prime Minister or the Attorney-General. With respect, it is an abuse that when such matters take place and are widely reported Ministers give the House no information of any sort about them. Therefore, some arrangement should be made so that we can have a statement later today. We should not have to wait until tomorrow. We should have a statement later today, either from the Prime Minister or the Attorney-General.
Mr. Neil Kinnock: Further to that point of order, Mr. Speaker. I know that you have agreed that it is part of the duty of the House to protect people who are in the Government service and who, by virtue of their office, cannot speak for themselves publicly. You will also be aware, not least from the proceedings that we have just heard, that strong rumours are circulating about the identity of a person who may or may not have been responsible for leaking the letter from the Solicitor-General's office. Because of the duty, which we must in all honour discharge, it is important that we have a conclusive statement from that Government. If the rumours are inaccurate, unjust and irreparable damage may be done to that person's career. On the other hand, if those rumours are accurate, there will plainly be implications relating to the orders given to such an individual which will have wide application for the conduct of the order of the House. I hope that you can prevail on the authorities concerned so that we have a full and frank statement to clarify the matter.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Further to that point of order, Mr. Speaker. I am advised that all the procedures associated with the inquiry concerning the leak of the Solicitor-General's letter have not been completed. Meanwhile, I suggest that the question of a Government statement should be discussed through the usual channels.
Mr. Winnick: For today.
Mr. Dennis Skinner rose—
Mr. Speaker: I will hear the hon. Member.
Mr. Skinner: You will recall, Mr. Speaker, that last week we made many requests for statements on the Westland affair. The Tory Front Bench told us that there was nothing to worry about and that everything was in order. As a result of that, my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) had to demand that the Secretary of State for Trade and Industry come to the House later. We are going through the same routine again this week. Today we have almost a replica of what happened then. Because some hon. Members accused the Government of a cover-up, we managed, belatedly, to get the Secretary of State for Trade and Industry to come to the Dispatch Box and, finally, to have a debate. At the weekend there was another cover-up, when Mr. Lygo and the rest of them were bought off.
Mr. Speaker: Order. What is the point of order for me?
Mr. Skinner: You are placed in an invidious position, Mr. Speaker, because the Government are refusing to make a proper statement. As a result, we are asking for a private notice question so that we can draw some truth from the Government. Apparently that is not to be granted, so we are back to square one. We shall demand the truth from this tawdry Government because they have covered it up from the beginning, and the truth will out.
Mr. Speaker: Order. I am deeply grateful for what the hon. Gentleman said about my position, and I feel it strongly.
Mr. Kinnock: On a further point of order, Mr. Speaker. The House has heard what the Leader of the House had to say. He and I and the House are at one in respecting the efficiency of the usual channels. However, I hope that the Leader of the House will acknowledge that, of its very nature, this matter will not, and cannot, be resolved through the usual channels, and that there must be an agreement on the procedure for dealing with it. Ultimately, this is a matter that must be settled in the House of Commons by a statement detailing the Government's views and actions.
Dr. Owen: Further to the point of order, Mr. Speaker. Would it not be reasonable for the Leader of the House to say that a statement will be made to the House today? We want to hear that statement today, not tomorrow.
Mr. Campbell-Savours: On a point of order, Mr. Speaker.
Mr. Speaker: Is it a different point of order?
Mr. D. N. Campbell-Savours: Yes, Mr. Speaker. The day before yesterday, I raised a point of order, on which you ruled yesterday. You ruled in my absence because I was, unfortunately, in a Select Committee.
308
In your ruling, you said that the passage in question in the Cabinet minutes, which I did not bring to the Chamber on that occasion, described what happened at a meeting on 17 October last between the Secretary of State— [Interruption.]
Mr. Speaker: Order. I hope that the hon. Member is not now going to challenge my ruling.
Mr. Campbell-Savours: Your ruling, Mr. Speaker, was most reasonably based on all the facts and information that were placed before you by those whom you consulted. I put it you, Mr. Speaker, that there is one document which you did not see and which you were not allowed. to see, and that is the document that I have here. It is that section of the Cabinet minutes that precisely concerns the point of order.
I have not been given the opportunity to —[Interruption.] The minute says:
"Sir John said that he was well aware of the Government's preference for a European minority shareholding in Westland, and attached weight to that preference".
The minute continues:
"The Secretary of State noted what Sir John said. He said a European minority shareholding would invoke the commercial and political interests of the Government".
The quote by the Secretary of State for Trade and Industry at the Dispatch Box was from that minute. I have underlined on the minute that passage from which he quoted. The right hon. and learned Gentleman referred to
"the Government's preference for a European minority shareholding in Westland."
He then
"said that a European minority shareholding was in both the commercial and political interests of the Government."
We therefore have a direct quote. We do not have a paraphrase.
In light of the fact that I have this document in my possession, I ask, Mr. Speaker, whether you would once again look at your ruling yesterday, because you did not have this information available to you at that time. If you did so, you would know the implications if a full statement and the minute were made available to the House. The eyes of hon. Members would be opened in a way that the Select Committee has not been able to do.
Mr. Speaker: I ruled against the background of the information that the hon. Member for Workington (Mr. Campbell-Savours) brought to my attention. I have no authority to send for the Cabinet minutes, and I have no knowledge of them. My ruling stands.
Mr. David Steel: May I refer to the previous point of order, which we have not satisfactorily resolved? Another hon. Member referred, I think improperly, to matters concerning private notice questions. What the Leader of the House said a few minutes ago is what we have all been advised privately—that the inquiries are not yet complete. Surely the Leader of the House should be made to say that, if these inquiries are completed today, they should be reported to the House today. It would be intolerable if we read in tomorrow's papers leaks of a leaks inquiry.
Later—
Mr. John Morris: Further to the point of order of my hon. Friend the Member for Workington (Mr. Campbell-Savours), Mr. Speaker. I seek your guidance. We are aware of the precedent that, if a Minister quotes from a document, the whole document should be placed

309
before the House, If, however, a Minister paraphrases a document, the same considerations do not apply. How can you, and hon. Members, reach conclusions on these matters unless the original quotation is before us? How do you reach your conclusions, while taking account of the precedent that the whole document should be laid before the House?
New considerations now arise. As I understand it—I may be wrong—the quotation is now in the possession of my hon. Friend the Member for Workington. It would appear that it is on exactly the same lines as the material—
Mr. Campbell-Savours: Word for word.
Mr. Morris: I stand corrected—it agrees word for word with the words that the Secretary of State used in the House. It seems that the right hon. and learned Gentleman was quoting from a document. That is unanswerable. I find it difficult in those circumstances to understand how a different conclusion could be reached.
Mr. Speaker: I hope that the House will not seek to draw the Chair into what is, after all, a political argument. I ruled yesterday on the evidence that was brought before me by the hon. Member for Workington (Mr. Campbell-Savours)—
Mr. John Morris rose—
Mr. Skinner rose—
Mr. Speaker: Order. I have no authority to send for Cabinet documents. That is not within my responsibility. I ruled on the matter yesterday and I reaffirm that that ruling stands.
Mr. John Morris: Further to that point of order, Mr. Speaker. With respect to you, Mr. Speaker—the last thing that I would wish would be to draw you into any conflict involving this matter—I think that the House is entitled to know whether the rule still stands. If a Minister quotes, inadvertently or deliberately, from a Cabinet paper, Cabinet minute or any other paper, does the rule still stand? That is the point that I seek to make.
Mr. Speaker: The rule was repeated by the hon. Member for Workington yesterday when he read it out in full. I can also read it out in full, if the Clerk finds it in time. The rule is perfectly plain. If there is a direct quotation, it is necessary to lay the document; if there is a paraphrase, that is not necessary. I ruled yesterday on the evidence before me that there was a paraphrase, and that ruling stands.
Mr. Kinnock: On a point of order, Mr. Speaker. You may recall, Mr. Speaker, that last Thursday some confusion was caused because of an inadvertent misunderstanding that could have arisen in response to the matter as it was then raised by the right hon. Member for Henley (Mr. Heseltine). The Chair can be placed in an invidious position because a Minister can quote from an official document to render authority to a particular statement, and in between the time that it is used in the House and it finds itself in Hansard, the Minister, for political reasons, can change the status of the quotation simply by removing the quotation marks and saying that it is a paraphrase of what took place.
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It will be obvious to you, Mr. Speaker, that a problem arises when you are in the position of ruling that a document is not an official document that has been precisely quoted to the House when in fact it is, and that has not been made obvious to you by the decision of a Minister to ensure that you are not acquainted with that fact.
We are not seeking your involvement, Mr. Speaker, in political contention between the two sides of the House. We wish to remove the possibility of your involvement in that contention by ensuring that, where there is an exact match of words between an official document and the words used in the House by a Minister, the normal rule is followed and the document becomes the property of the House.
Several Hon. Members rose—
Mr. Speaker: Order. I do not think that I can say any more than I have. I have no knowledge of what goes on in Cabinet and I have no knowledge of Cabinet minutes. I always understood that Cabinet minutes were entirely secret. It is not possible for me to know whether Ministers are quoting from Cabinet minutes. I could not possibly know that.
Dr. Owen: Further to that point of order, Mr. Speaker. The hon. Member for Workington (Mr. Campbell-Savours) has made a serious statement and he now has documentary proof of a Cabinet Sub-Committee. If the hon. Gentleman gives the document to you, Mr. Speaker, and you find that he is accurate in what he said and that the words do coincide, surely you are then entitled to ask the Government whether it is an official document. If it is an official document, surely the normal rules of the House should apply and it should be placed in the Library.
Mr. John Morris: Further to that point of order, Mr. Speaker. The short point is this. If this is a direct quotation, should not the Government table the document?
Mr. Speaker: It would be up to the Government to decide whether to do that. There is no point in my keeping on repeating that I am not party to what goes on in Cabinet. I have no idea whether the Secretary of State was using words in a Cabinet minute and my judgment, on the evidence placed before me, was that his words were a paraphrase.
Mr. Kevin McNamara: Further to that point of order, Mr. Speaker. I am sure that the whole House understands the reason for your ruling yesterday. It was made, to use your own phrase, on the "basis of the evidence laid before me". My hon. Friend the Member for Workington (Mr. Campbell-Savours) is now laying fresh evidence before you. On the basis of the evidence that was laid before you yesterday, your original ruling could stand, but on the basis of the fresh evidence you are in a position to make a fresh ruling.
Mr. Speaker: That is perfectly reasonable. If the hon. Member for Workington were to submit that to me, I should have an opportunity to look into it, but I am not prepared to rule on it now.
Mr. Skinner rose—
Mr. Benn rose—
Mr. Campbell-Savours: May I put it to you, Mr. Speaker, that I shall give you a copy.
Mr. Skinner: That is right.
Mr. Campbell-Savours: I shall also lay it on the Table. You say, Mr. Speaker, that you took the decision on the evidence that was placed before you. However, prior to that, you also said that you were unable to consult the Cabinet minutes. I am wondering what evidence has been placed before you that allows you to arrive at that decision.
Mr. Speaker: The evidence that the hon. Gentleman gave me.
Mr. Benn: On a point of order, Mr. Speaker. May I, with great respect, suggest that the issue is not a matter between the Government and the Opposition. It is a matter as to whether there are two classes of Members: those who are subject to the rules that are laid down by the Government and every other hon. Member. When you were elected Speaker you laid claim to the ancient privileges of the House, one of which is that the most favourable construction should be put upon all our proceedings. If it is clear that the Government are operating under different rules which exempt them from the rules of the House, that is a matter for the House and for you. It is not a matter of inter-party controversy.
Mr. Speaker: The point I was seeking to make was that I am fully aware that this is a matter of high political controversy. What is disturbing is that Mr. Speaker is being drawn into some of these arguments. [HON. MEMBERS: "No."] Order. I am perfectly prepared, and it is absolutely right that I should be, to discharge my duties fully and fearlessly, and I shall so do, but I hope that the House will not draw me into what is, after all, a political argument.
Mr. John Morris: This is not a political argument. This is a matter for the House of Commons as a whole. According to "Erskine May", the rule on page 433 says:
"A Minister of the Crown may not read or quote from a despatch or other state paper not before the House, unless he is prepared to lay it upon the Table."
There are two considerations. First, we wish to have your guidance, Mr. Speaker, upon how this rule may be put into effect. Secondly, my hon. Friend the Member for Workington (Mr. Campbell-Savours) has handed you a document that purports to be the source of the quotation, and in exactly the same terms. Will you now be good enough to give us guidance on giving effect to the rule? Since the matter may need further time for consideration, perhaps you could do so later today or tomorrow.
Mr. Speaker: I have already said that. The right hon. and learned Gentleman's key point purports to he that I shall need to look into this matter.
Mr. Skinner: Further to that point of order, Mr. Speaker.
Mr. Speaker: Well, is it helpful?
Mr. Skinner: Yes, exceptionally helpful, as far as you are concerned. You are well aware that, from the very beginning, this has been a matter between the Opposition and the Government. You have been caught in the middle. It has been revealed today that what purports to be a Cabinet document has been referred to and laid on the Table. If it is valid, the whole of that Cabinet document must be laid on the Table. There is a problem, which you spotted earlier: how do we manage to find out whether the document of my hon. Friend the Member for Workington (Mr. Campbell-Savours) is correct? I put it to you that it would not be the first time that the House has set up a Committee to examine the validity of a document. When you consider this matter today in order to report back to the House, I suggest that you must consider setting up a Committee to test the validity of my hon. Friend's document so that the whole of the Cabinet document may be laid on the Table, when more of the truth will emerge. I put it to you that that would be the sensible way forward. It would ensure that you are not caught in the middle of a politically charged argument between an Opposition and a Government who are trying to evade the truth and their responsibilities.
Mr. Speaker: I am very grateful to the hon. Gentleman. Perhaps one day he will be in a position to exercise the heavy responsibilities that I have.
Dr. Keith Hampson: I do believe that you have been somewhat misled, Mr. Speaker. In this exchange, everybody, including yourself, has referred to the document being a Cabinet minute. However. it is clear, even from the remarks of the Secretary of State for Trade and Industry, that this is not a Cabinet minute. It is a minute by his private secretary about a meeting the Secretary of State held with the industrialist Sir John Cuckney. It is exactly the same as the minute which has already been released by the Government about a meeting the Secretary of State had with Sir Raymond Lygo.
Mr. Speaker: I do not think that there is much profit in continuing this, as I do not know, and I shall have to look into it.

Privilege
Mr. Tony Benn: On a point of order, Mr. Speaker. Yesterday, I asked your advice on a matter relating to your authority. I asked whether you would agree to place in the Library the document "Questions of Procedure"—
Mr. Speaker: Order. Before the right hon. Member proceeds too far, may I say that I do not think he has yet received my letter on this matter.
Mr. Benn: I have received it.
Mr. Speaker: As the right hon. Member knows, the document involves a matter of privilege. I dealt with it in the normal way. It would not be in order for the right hon. Member to refer to it.
Mr. Benn: In that case, may I refer to what you said yesterday, Mr. Speaker? You said to me that advice was available elsewhere on the document's status and on the coverage for privilege afforded to the document and to me.
I have now sought that advice. I have decided that, in view of the restrictions listed in the document by successive Prime Ministers, which place other Members of the House who are or who have ever been Ministers, under restriction, it is in the interests of the House that all hon. Members should have access to it and that it should not be restricted to those hon. Members who now serve on the Select Committee on Treasury and Civil Service. I am therefore ready to supply a copy of the document to any hon. Member who wishes to have it. I hereby formally claim privilege both for the document and for myself in providing it to other hon. Members as a proceeding in Parliament. I have not and shall not supply copies to any person who is not a Member.
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I have sought advice also on the situation that would arise if, this afternoon, the Sub-Committee decides at any stage to go into secret session during my evidence. If that occurs, I shall, for the same reason, ask leave to withdraw forthwith.
Mr. Speaker: Any action that the right hon. Member takes will be entirely on his own responsibility. As the right hon. Member has raised this matter, I say to him that I have no authority to permit any private Member to place any document in the Library.
Mr. Eric S. Heller: Further to the point of order, Mr. Speaker. I was one of those who received this document, and I read it carefully. On one occasion, I was informed from Moscow that I could not appear on a television programme. I was informed also that I could not write my weekly column for the Walton Times. Incidentally, I ignored that advice. May I ask why you, Mr. Speaker, as the custodian of the interests of hon. Members, cannot ask for such a document to be brought before the House? This would enable hon. Members who could be Ministers in the future and able to obtain such documents to be acquainted with the sort of information they are expected to swallow by the Government of the time, whether they like it or not, even though those hon. Members are elected by the people. I ask you to consider your decision on this matter.
Mr. Speaker: I do not need to consider my decision. The principle is that the Speaker cannot authorise the laying of any document in the Library. If he did so, the document would be under the protection of the Speaker. That is not my responsibility. Right hon. and hon. Members must do what they think fit. This is a matter for them, not me.

Standing Charges (Abolition)
4.1 pm
Mr. Michael Welsh: I beg to move,
That leave be given to bring in a Bill to abolish standing charges for gas, electricity, water and telephone services for pensioners and persons in receipt of certain state benefits.
Many attempts have been made to bring to the attention of the House the need to help the poorest in Britain who are wrongly charged by the utilities by the imposition of standing charges on their accounts. My hon. Friend the Member for Islington, North (Mr. Corbyn) has brought forward a number of Bills on this issue and many right hon. and hon. Members have tried to bring relief to the poorer sections of our community by abolishing standing charges. The purpose of the Bill is to ensure that standing charges which are imposed by the utilities should not be imposed on the accounts of pensioners or other unfortunate persons in receipt of certain state benefits.
Standing charges are imposed on people like a straightforward tax. The poor pay the same as the rich, but this cannot be right. Why should a pensioner in my constituency, living in a house similar to my own, pay the same standing charge? It is wrong, and immoral. I am sure that all hon. Members can see the wrong in this. If we study the percentages of income paid out in standing charges, it is only a small percentage in my case but an unacceptable percentage for a pensioner. In a country that is proud of the fact that the rich look after their more unfortunate brothers and sisters and carry a heavier burden of tax, it is right that those in a position to shoulder the heavier burden should do so. Standing charges and other fixed charges should not be imposed on those people who suffer hardship.
There are many examples of this unjust method of charging. Let me give an example. A pensioner aged 80, who received a low-user rebate which has now been discontinued, had two meters. One meter was for the outside lights so that he could see the ground in the dark. In September 1985 he used one unit on the outside meter at a cost of 5·32p. His fixed charge was £6·65, but for the total of one unit this old-age pensioner had to pay £6·70. He also had to pay another fixed charge for the meter inside the house. Thus we have a pensioner, living at one address, having to pay two fixed charges. This is intolerable and wrong. The average bill for a house is about £60, yet the standing charge is the same as that of the pensioner. No one can justify this imposition of charges on the poor.
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Standing charges have not always been with us. There was no standing charge for water in general before:1976. State utilities can manage without standing charges. All the Bill seeks to do is to relieve the poorer sections of our community of this burden. There are two area water authorities that do not have standing charges—Severn -Trent and Wessex water authorities.
There has been a large increase in some standing charges. In 1979 standing charges for gas in the Severn region were levelled at £2·16p. They are now £9·90p. That is a 300 per cent. increase since 1979. An old-age pensioner whose account is £30 has a standing charge of 30 per cent. but an ordinary householder who uses more gas, has plenty of money and whose account is £100 has a standing charge of only 10 per cent. It cannot be right to ask old people to pay a higher percentage than the rich person who lives down the road.
A great deal of revenue is received from standing charges. The amount of revenue from the standing charges paid by pensioners is as follows: gas in Great Britain as a whole, £150 million; electricity in England and Wales, £135 million; water in England and Wales, £65 million. I do not say that the utilities do not need this money— although some do not. However, they are taking it from the poorest in the nation. That is the crime. If this House means to look after its citizens, it should do a Robin Hood and give to the poor, not take away.
The purpose of the Bill is to help those in need and to relieve them of a financial burden so as to enable those who form the poorer sections of our nation to lead better and fuller lives. If life is in pursuit of felicity, let us accept the Bill and bring some happiness into the lives of others. I hope that the Bill will receive the unanimous support of the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Michael Welsh, Mr. Martin Redmond, Mr. Jack Ashley, Mr. Bill Michie, Mr. Allen McKay, Mr. Terry Patchett, Mr. Kevin Barron, Mr. Jeremy Corbyn, Mr. Tom Clarke, Mr. Dennis Canavan, Mr. Alec Woodall and Mr. Roy Mason.

Standing Charges (Abolition)
  STANDING CHARGES (ABOLITION)
  Mr. Michael Welsh accordingly presented a Bill to abolish standing charges for gas, electricity, water and telephone services for pensioners and persons in receipt of certain state benefits: And the same was read the First time; and ordered to be read a Second time upon Friday 14 February and to be printed. [Bill 62.]
Orders of the Day
  Local Government Bill
  As amended (in the Standing Committee), considered.
  Local Government Bill
    New Clause 1

      LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985
      'Nothing in this Act shall prevent the publication of material or any other action, by a local authority in exercise of its functions under the Local Government (Access to Information) Act 1985'—.[Mr. Straw.]
      Brought up, and read the First time.
      4.10 pm
      Mr. Allan Roberts: I beg to move, That the clause be read a Second time.
      I hope that the new clause is not controversial and that it will be supported even by Liberal and Social Democratic party Members. They voted in support of the Bill receiving a Second Reading, although the Association of Liberal Councillors opposes it. There is some division there and we are not sure what they will do this evening. I hope that they are able to support the new clause and that the Minister will. It would enable the Local Government (Access to Information) Act 1985 to take precedence in law over this Bill if it is enacted.
      The Access to Information Bill was introduced by the hon. Member for Hornchurch (Mr. Squire) and had all-party support. It started life in 1980 when we considered the Local Government, Planning and Land Bill, to which I tabled amendments, which enshrined most of what the access to information Act provided. This is probably the first time—
      Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I am sorry to interrupt the hon. Gentleman, but I understand that his name is not attached to the new clause. Perhaps the hon. Member for Blackburn (Mr. Straw) would move the motion formally.
      Mr. Jack Straw: Yes, Mr. Deputy Speaker. I beg to move, That the clause be read a Second time.
      Mr. Roberts: I shall not start again, Mr. Deputy Speaker. As I was saying, it was in those debates in 1980 that the words, "Ken Livingstone" were probably first uttered in the Chamber. He was then a mere opposition councillor on the GLC and we were opposing the excesses of the Conservative-controlled GLC, under the leadership of Sir Horace Cutler, which was trying to keep information secret.
      Opposition Members from London and I were able to reveal accusations of fraud in the GLC which had been covered up, but which could not have been covered up if the access to information Act had been in place. Indeed, I believe that the Act is so significant that it would probably have prevented the web of corruption surrounding the Poulson affair.
      We now have this rather nasty little Bill which might destroy at a stroke all the good work done by the hon. Member for Hornchurch and others. It defines publicity as
      "any communication, in whatever form, addressed to the public at large or to a section of the public".
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      That definition will include an enormous amount of material. Making documents available, as required by the access to information Act, would probably constitute publication as defined in the Bill. It seems clear that that is what the Government intend.
      4.15 pm
      In Committee the Government published an outline of a code of practice to be issued under clause 4, which included a distinction between paid and unpaid publicity. Included among the latter were council and committee reports, consultation documents, press releases, press conference statements and media interviews. If the Bill is not amended, the intentions of the access to information Act will be frustrated. The Bill will take precedence over that Act and a council will not be able to make committee reports and background papers available if they appear "to be designed to affect, or can reasonably be regarded as likely to affect, public support for—
      (a) a political party".
      A secretive council could use the Bill as a loophole to get around the access to information Act and refuse to release documents, on the ground that they are or might be political. The council would make subjective decisions about what was political, and it could suppress information to which Parliament rightly wanted the public and the press to have access. An open and conscientious council could face serious problems. If it is to fulfil the requirements of the access to information Act to release minutes, reports and papers, it will have to censor them to avoid falling foul of the Bill. This is a censorship Bill of the worst kind.
      The problem extends to background papers and research documents. If a research exercise shows that Government policy has increased homelessness—any research into homelessness is bound to prove that as an academic fact rather than as a political opinion—or if increased home ownership is shown to be the result of Government policy, which is probably unlikely, it could be interpreted as capable of reasonably being regarded as likely to affect public support for a political party. The fact that the research was properly conducted, honest, true, informative rather than persuasive, and conducted by people who are not necessarily members of a political party would not matter—it would still fall foul of the Bill. The council would then be faced with a choice between refusing to make the paper available to the public, which would fly in the face of the access to information Act and leave the press and the public without the underpinning of a policy, and censoring the research to make it acceptable, which cannot be acceptable in a democracy.
      The new clause would subordinate the Bill to the access to information Act, thus preserving the openness and accountability of local government. I could quote the hon. Member for Hornchurch when he introduced his Bill, but I shall not do so. Rather, I shall appeal to right hon. and hon. Members on both sides of the House to support the new clause as a means of ensuring that an Act of Parliament that has all-party support is not destroyed or undermined by a censorship Bill which, far from extending and developing freedom of information and getting the public involved, will control, constrain and censor local government.
      Mr. Robin Squire: It is expected of me to say something about the new clause. The hon. Member

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      for Bootle (Mr. Roberts) and I dealt with aspects of this matter at various stages of what became the Local Government (Access to Information) Act 1985. I have tabled an amendment, which we are to consider later, which addresses itself to issues similar to those discussed by the hon. Member for Bootle, so I shall not detain the House for long now.
      I hope that my hon. Friend the Minister will make it quite clear why the Government propose to resist the new clause, if they do. If the Government do not accept the new clause, many people of all parties will be worried by the possibility even of the release of agenda items and minutes which are thought to be freely and openly available under the access to information Act being restricted by the Bill. In fairness, I know from correspondence with my hon. Friend the Minister of State that the Government do not intend that. I am sure that my hon. Friend will underline that view, just as I am sure he accepts that our anxiety is legitimate. The access to information Act is important. It was a small step along a route to which we shall, I hope, join other Acts. I do not wish to see its effects watered down.
      Mr. Dennis Skinner: I suppose one of the reasons why the Government have come out with the code of conduct in the Bill is that for the past five years they have been getting away with blue murder. They have overreached themselves. The Prime Minister has run the Cabinet and dominated it in an autocratic fashion, and got her own way, so that if anybody murmured anything to her that she did not like she kicked him out and replaced him with somebody suitably wet—wet in the sense that he will bend the knee to her. As a result of that background and environment, the right hon. Lady felt pretty safe in saying that she would go one step further and tell local councillors to keep their mouths shut. She does not want people spending money to speak against the Government, and she feels that if she can control the Cabinet, she will ensure that she can control County hall.
      Mr. Tony Banks: I agree entirely with my hon. Friend. In the case of the Greater London council, the Prime Minister shut its mouth by chopping off its head.
      Mr. Skinner: That is all part of the scenario that led up to the Bill. My hon. Friend is right. Getting rid of the GLC and the metropolitan councils was all part of the right hon. Lady's strategy of chopping away a little bit more from the freedom of the country and the individual. This is yet more trampling on civil liberties. With each year that has gone by the Prime Minister, with her toadying Ministers, has been able to encroach a little further on individual freedoms in local government.
      Is there any wonder that in the autumn and winter of 1985 the same Prime Minister has been able to tell another toady that she has put into the Department of the Environment, "This time you will stop them from opening their mouths. I am fed up with having anti-Tory propaganda from the local authorities." It has been suggested that all this is being done to curb local government expenditure, but that is nonsense. The Government use that principle to kid the public. It is a scandal that, following a cut in rate support grant from 62 to 46 per cent. this financial year, local authorities are being threatened and have been stopped from objecting to
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      such cuts. The domineering Prime Minister is carrying out what almost seem like Fascist tendencies to stop her opponents from telling the truth.
      The real scandal is that when the Bill received a Second Reading only a few weeks ago we saw the appalling sight of the Liberals—the so-called defenders of freedom and liberty —walk into the Tory Government Lobby and vote to curb the natural desires of local authorities, and Liberal councillors, to say their party piece. What a black day that was for the Liberals and the SDP. I sit on this Bench and hear all the stories, and I know that the truth was that the Liberals' so-called friends in the SDP told them what to do. [Interruption.] This tame Liberal—the hon. Member for Southwark and Bermondsey (Mr. Hughes)—who is trying to heckle—
      Mr. Simon Hughes (Southwark and Bermordsey): I am not tame.
      Mr. Skinner:—did what he was told to do and, like Manuel, followed Basil into the Lobby. They should be ashamed of themselves. There is another one here, the hon. Member for Leeds, West (Mr. Meadowcroft), trying to heckle me. They are supposed to be quiet, yet they accuse me of heckling.
      Mr. Michael Meadowcroft: Get on with it.
      Mr. Skinner: They went to Hebden bridge last week and told these fairy stories.
      Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will return to the subject of the new clause.
      Mr. Skinner: It is about freedom, Mr. Deputy Speaker. I will tell you another thing. If the Prime Minister was in power for long enough, she would shut your mouth as well. That is how far she would be prepared to go. Some people are laughing in the Strangers' Gallery—to which we should not refer. Instead, I tell hon. Members that the Prime Minister knows no bounds when it comes to getting her own way. If ever there was an example of where this Tory Government have gone a little too far, it is in saying to local authorities, "We shall stop your from speaking out." All the surveys have shown that on this issue the Government have gone too far.
      Some people from a local authority came to see me today because they were concerned about the Bill. I told them that if the so-called code of conduct went through, when it had the force of law they would not be able to speak about this matter. Some other people from Derbyshire county council spoke to me at 2.30 pm in Committee Room 9. They had come down to complain about poverty in Derbyshire. I told them that when the Bill becomes law, the Prime Minister will have gagged councils. I gave them some advice in the name of freedom and civil liberty. I told them to arrange another meeting on poverty and the disabled, and that if they came down we would meet them. I told them that it was their duty to ignore the code of conduct and dare to challenge the Tory Government, because they should not be allowed to get away with it. I hope that every local authority member will not take a blind bit of notice of what happens today. They have a duty to speak up for all those old people and the disabled for whom they are trying to provide services.
      What has happened today is not much different from what happened on the days last week when we discussed Westland plc. The principle is autocracy and a

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      domineering Prime Minister gagging people and trying to shut up opponents. The Tory Government have been doing it for six years, and I hope that sufficient Tory Members will walk into the Lobby against the Bill.
      I know that the Liberals have changed their minds. They have been told in no uncertain terms what to do today by the Liberal councillors. I hope that everybody who values freedom, including the hon. Member for Hornchurch (Mr. Squire), who introduced the access to information Bill, will stop this vile process of trying to prevent local authorities from speaking out on behalf of the people who gave them a mandate to speak.
      Mr. Simon Hughes: Obviously, my alliance colleagues are doing quite well to merit such a large section of the speech made by the hon. Member for Bolsover (Mr. Skinner). We can always tell how well we are doing, because the better we do, the longer the hon. Gentleman goes on about us.
      I shall speak specifically about the new clause, which is more than the hon. Member for Bolsover did. I do so as the third of the triumvirate that helped to get the Local Government (Access to Information) Act on the statute book. The other two are the hon. Member for Bootle (Mr. Roberts), who tried three years ago, and the hon. Member for Hornchurch (Mr. Squire), who succeeded a year ago after my attempt two years before. The massive effort and support put into that Act by local authorities to make town halls accountable—something that the Government always seek to make councils do—would be thwarted if in any way the Act's provisions, even in the smallest particular, were counteracted by the Bill.
      The Government should unequivocally say that they entirely accept the new clause. They must accept that they may have been ambiguous at best—if it were worse, they would not admit it—in making it appear that there would be a conflict and that the Bill would restrict publicity of documents and the like and might be contrary to that Act.
      Access to information will be extended to local authorities on 1 April. The Government intend the Bill to be on the statute book before that because there are other clauses of the Bill that relate to that date. It is vital that the Minister who is to reply to the debate should clearly say that the Government will accept a new clause and that there will be overriding support in favour of public access to information on what takes place in town halls, irrespective of any other clauses in the Bill.
      4.30 pm
      Mr. Tony Banks: It is ironic that the first Bill introduced to the House by the Prime Minister when she was a private Member was a Bill to increase access by the press to local authority meetings. It seems that power genuinely corrupts because the Prime Minister is now anxious to restrict access to information being put out by local authorities to the people they represent. One can assume that it is the holding of office that has caused the enormous change in her attitude.
      My hon. Friend the Member for Bolsover (Mr. Skinner) was correct in his analysis of the Government's feeling and philosophy about the Bill. I wish he had been on the Committee because he could have enlivened some of the sittings. My hon. Friend might be interested to know that
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      the Minister for Environment, Countryside and Local Government, who is sitting languidly at the Dispatch Box, had difficulty with his own party on a number of issues. All the extreme elements of the Conservative Back Benches in Committee were trying to make this draconian Bill worse than it already is.
      Mr. Michael Forsyth rose—
      Mr. Banks: One of those Back Benchers is rising now. The Minister's problems came from the hostile and ugly Right wing that now occupies many ranks in the Conservative party. I shall give way to the hostile and ugly Member.
      Mr. Forsyth: The hon. Gentleman is posing as the champion of freedom of access to information. Will he tell us how often he spoke against the practices of the Greater London council where the Labour group is driving more and more decision-making behind closed doors and into private sub-committees dominated by the Labour party?
      Mr. Banks: The hon. Gentleman must know that all decisions in local government are subject to the scrutiny of a full council meeting. Therefore, there is complete openness in local government.
      Mr. Richard Holt rose—
      Mr. Banks: There is far more openness in local government than in central Government. We have just seen an example of the way in which Ministers can keep things quiet and deny information to the House when the House actually needs that information. That is the sort of Government we are dealing with. The Government want to be secretive all the time. They want to fiddle the books and cook the figures. We are dealing with a Government of petty crooks.
      Mr. Holt: I realise that the hon. Gentleman has limited experience in local government. If he had as much experience as I have, he would know that the GLC and many other local authorities delegate full powers to subcommittees and even lower bodies to spend vast sums of money. None of the decisions is subsequently ratified and such decisions are often taken on the word of a chairman.
      Mr. Banks: I agree that the hon. Gentleman is older than I am. I do not know how many years he has been in local government, but it is conceivably longer than I have been.
      Mr. Holt: Twenty-one years.
      Mr. Banks: Congratulations. I have spent 16 years in local government, and I am the chairman of the GLC. I can modestly claim to know a little about what goes on in local government. I suspect I know more than the hon. Gentleman.
      Mr. Skinner: Is my hon. Friend the Member for Newham, North-West (Mr. Banks) aware that the hon. Member for Langbaurgh (Mr. Holt) does not have much time for local government because he runs a local bookmakers?
      Sir Kenneth Lewis: On a point of order, Mr. Deputy Speaker. I do not want something to appear in Hansard that should not be there. I though I heard the hon. Member for Newham, North-West (Mr. Banks) say that he is dealing with a Government of petty crooks. I realise that he has some

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      experience in that area—he must have with the GLC—but I do not think that it is right to use such terms in the House to describe my right hon. and hon. Friends on the Front Bench, even though we may criticise them from time to time.
      Mr. Deputy Speaker: I deprecate extravagant language, but a general accusation of that sort is just in order.
      Mr. Holt: On a point of order, Mr. Deputy Speaker, I am sure that the hon. Member for Bolsover (Mr. Skinner), with his constant interruptions and lecturing to the Chair, is the last person who would seek to mislead the House or tell lies. However, before he makes statements about what I do, he should check, because I do not run any betting shops.
      Mr. Deputy Speaker: Order. We have had a perfect illustration of the fact that we should return to the subject of the new clause.
      Mr. Banks: The hon. Member for Langbaurgh (Mr. Holt) has got the wrong odds.
      The Bill defines publicity as
      "any communication, in whatever form, addressed to the public at large or to a section of the public".
      An enormous amount of material is included under that definition. It seems unbelievable that council and committee reports, consultation documents, press releases, press conference statements, media interviews, and so on, should be caught up in the codes of practice. I cannot believe that that is really what the Minister wants to happen. If he does, it is an absolute disgrace that the Government, having put local government in an economic straitjacket, now want to stuff a gag in its mouth.
      We in local government have great pride in the openness of the system. No other system is subject to so much public and press scrutiny. I must add that no other system is subject to so much vile abuse from Tory Back Benchers and Ministers. The GLC has been subject to a great deal of vile abuse from the media hacks of Fleet street and the neanderthals on the Back Benches of the Conservative party. There is an example of that in the Daily Express today. The quotation refers to the full GLC meeting, which I chaired:
      "Red Ken Livingstone was slammed last night for planning to give away more than £100 million to 'loony Left' groups before the Greater London Council is scrapped."
      That is an outrageous lie. I do not know the pervert who wrote that. All I can say is that he was either stupid or drunk. Conceivably, he was both. That is the sort of thing that local councils, particularly the GLC, have to put up with. We are open in everything that we do and have no reason to feel guilty or concerned about accusations made by the Conservative party that we are secretive. All matters decided in the GLC eventually go to a full council
      meeting. That is where they can be challenged and voted on.
      I cannot believe that the Minister is not prepared to accept this new clause. If he does not accept it, he will have struck a blow against accountability and democracy in local government.
      Mr. Meadowcroft: I want to comment on some of the remarks made by the hon. Member for Bootle (Mr. Roberts) when my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) was unavoidably out of the Chamber. The hon. Member for Bootle drew the attention
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      of the House to the question whether I and my colleagues would vote in a particular way on Report and Third Reading. It is perfectly proper to give a Bill a Second Reading on the basis that one would want it to go to Committee to be examined clause by clause and line by line to see if one can support it on Third Reading. If the hon. Member for Bootle looks at the Committee record, I do not think he will find a single Division in which I and my hon. Friends were not in the same Lobby as the Labour Members. We were entirely consistent in our voting in Committee.
      In Committee, it was interesting to see whether the Government would be found in the same Lobby as us when they were opposing their own rebels, which happened on several occasions. I am glad to see the hon. Member for Stirling (Mr. Forsyth) here. He is the only one of those rebels who fought throughout the Committee who is here. Those Conservative Members made legitimate points about the Bill. One might have expected to see the hon. Member for Gainsborough and Horncastle (Mr. Leigh) here to continue that fight today.
      Mr. Straw: In one respect, the Bill is being marginally improved. Having voted for the Bill on Second Reading on the basis that they would judge whether the Bill was improved, now that the Bill has been improved, will the Liberals vote for or against the Bill on Third Reading?
      Mr. Meadowcroft: That is a very good question. There are many other good questions—[HON. MEMBERS: "What is the answer?] Wait a minute. The House is so impatient to hear that it often does not get the answer.
      The answer is that many other improvements to the Bill were proposed in Committee, which we tried to get through. However, we failed. There are also various amendments on the Amendments Paper for discussion on Report. All of us take these matters seriously, and at the end of the Report stage we shall all consider whether the Bill should be given a Third Reading.
      I should like to deal with the substance of the new clause. The issue is important, and reflects the dilemma posed by the Bill. On the one hand, we have the permanent purple patch oration of the hon. Member for Bolsover (Mr. Skinner), who went into a diatribe about the attacks on local government perpetrated by the Government. The fact is that this restrictive Bill is now before the House and has been fought through Committee precisely because of the abuses in local government. Every accusation that the hon. Member for Bolsover brings against the Government for their actions towards local government one could level at Labour-controlled local authorities because of their actions in restricting free speech and manipulating and abusing the systems of local government, against the wishes of the minorities on those councils.
      Mr. Allan Roberts: The hon. Gentleman said that., after he and his colleagues had heard the debates on Report, they would make up their mind whether to support the Bill on Third Reading. Is he speaking for Liberal Members here in the Chamber or for the alliance? Will they tell Social Democratic party Members what they intend to do, or are they making up their own minds?
      Mr. Meadowcroft: The demands made on Second Reading by representatives of the alliance were set out

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      carefully, and can be read in Hansard. We shall consult our colleagues in both parties, and there is no secret about that.
      Let me return to the substance of the new clause, which is crucial to the debate. We have a particular difficulty, because we are outside the dogfight. Liberal Members and those in the Liberal party throughout the country wish to enhance the powers of local government, but we do not want to see the abuses that we have seen in local government in recent years. Those abuses are getting worse, more devious and more manipulative. Therefore, one wants to try to curb such abuses. When we look at the Bill and the amendments on Report, we must ask whether those abuses will carry on. We must ask: can the Bill fulfil its intention? Will the abuses that the Bill wants to attack be prevented? Will the things that the Government do not intend to stop be stopped by the Bill? That is the dilemma. The new clause illustrates that dilemma.
      The hon. Member for Hornchurch (Mr. Squire) got his Local Government (Access to Information) Bill through Parliament. Labour members in local authorities who want to abuse their position and the control that they have will be able to get round the Bill simply by putting into council documents, which may be subject to the Local Government (Access to Information) Act, things that they want to put out as propaganda. Therefore, the Government are in a dilemma. They can see that there is a loophole if they make the Bill subservient to the access to information Act. The Government have never referred to that point. They have not said whether the things that they want to stop will be stopped by the Bill, or whether the things that they do not want to stop will be allowed.
      4.45 pm
      I hope that the Minister will try to deal with the problem of whether it is possible to get around the intentions of the Bill by things becoming available through the access to information Act which otherwise would not have been available.
      Mr. Gavin Strang: It is important that a comment is made after the speech by the hon. Member for Leeds, West (Mr. Meadowcroft). He must recognise that when such a Bill is before the House, one must vote against it. Even after all the Committee sittings, I do not think that the hon. Gentleman has fully appreciated that the Bill suppresses fundamental liberties, as has been said by many hon. Members. I apologise for not being here at the beginning of the debate, but I heard my hon. Friend the Member for Bolsover (Mr. Skinner). The Bill suppresses the right of elected councils to communicate legitimately with their electorate.
      There may be the odd abuse, but no abuses have been brought to my attention yet. There has never been any question of the Labour party being in favour of councils using money to support Labour party candidates or promote Labour party issues. The evidence of the Labour party to the Widdicombe report is clear—
      Mr. Simon Hughes: Except that the report is in favour of the proposal.
      Mr. Strang: I do not think that the hon. Gentleman read the evidence. The Widdicombe report was opposed by the Labour party, and the Bill goes further than that
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      report. I am referring to the Labour party's original official evidence. I do not want to go over the matter again, because we went over it time and again in Committee.
      Mr. Meadowcroft: I take seriously what the hon. Gentleman says about the Bill striking at people's fundamental freedoms. If those freedoms and the conventions that sustain them have been abused time and again by those who are supposed to protect them in local government, it poses a great problem to the legislative Chamber, which must consider whether it should try to tighten up on those freedoms to avoid such abuses. The question is whether the Bill does that. Does the new clause help? The hon. Gentleman does not help his case by suggesting that all is sweetness and light in Labour local authorities, because it is not.
      Mr. Strang: I should like to think that all Labour authorities were perfect, but I would not claim it. I do not want to be drawn again on the matter. Legislation is already on the statute book which has a bearing on these matters. It limits the right of local councils to spend money on what they want.
      I am glad to see the Under-Secretary for Scotland, the hon. Member for Edinburgh, South (Mr. Ancram), in the Chamber because there was no Minister from the Scottish Office in Committee. For that reason, there was a tendency for many people in Scotland, certainly the media, to overlook the significance of the Bill for Scottish people and elected Scottish councils. The Convention of Scottish Local Authorities and the councils all made representations.
      Major rights that have been taken for granted by the councils are now to be removed. I shall give two examples. The Under-Secretary's regional council, which is controlled by the Conservative party, supported by its allies in the alliance, put through every door in Edinburgh a leaflet explaining the implications of the Government's Transport Act and saying what damage it would do to our local bus services. Such actions will be suppressed under the Bill.
      We have a major campaign in the north of Scotland about Dounreay. My view is clear, but whatever view one takes on the development of civil nuclear power in Dounreay, it is of enormous importance to the people. Surely, in a pluralist democracy the councils should be allowed legitimately to communicate with their electors and with the wider Scottish community to express their attitude to that development.
      The island councils must be allowed to campaign on issues that are important to them. One tends to think of Shetland and Orkney as being part of Scotland, but they have a different history and culture. Shetland has its own legislation governing the development of oil and the Shetland island council must be able to put to its people its views on important matters.
      The new clause takes us into a new area. It is all about the availability of information to the people. I have been speaking about Scotland because I was conscious of the fact that I was the only Scottish Opposition Member on the Committee but, of course, the Bill applies to the whole of the United Kingdom. We have always taken it for granted that councils should be able to communicate freely and to campaign on issues such as poverty and unemployment.
      We know what the Government are doing. Government documents are becoming more and more biased. It makes

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      me sad when I see some of the documents that are produced by civil servants in the name of the Government. I quoted a civil defence document in Committee and will not quote it again; it was about civil defence and the farmer—a grotesque political statement which had nothing to do with an objective view of the issue.
      Such use of the Government machine for propaganda purposes is likely to increase under our authoritarian Prime Minister in the run-up to the election. At the same time, the Greater London council produced an excellent document outlining the implications of a nuclear attack on London. It was an objective statement produced by objective scientists. It was not a peace movement document. [Interruption.] I am sorry that the hon. Member for Stirling (Mr. Forsyth) is laughing about it. I think he will find that even the Home Office and the experts from whom the Government seek advice recognise that that was simply a print of a speech made by a Home Office civil servant, which the council made more widely available to the people of London.
      Mr. Tony Banks: My hon. Friend is correct. The document to which he paid credit was based entirely on Government publications and statements, and nothing else.
      Mr. Strang: That is why the Bill is such an outrage. Later, we may go into the details which were referred to in Committee.
      Mr. Michael Forsyth rose—
      Mr. Strang: I said I would give way once, and I am not giving way again.
      Mr. Meadowcroft: The hon. Member gave way twice.
      Mr. Strang: I gave way to my hon. Friend the Member for Newham, North-West (Mr. Banks) because I was referring specifically to London and he is a GLC member. That was the exception.
      There can be no fudging about the Bill. It is a brutal, authoritarian measure which will suppress the fundamental rights of elected councils to communicate legitimately with their electorate, with the Government and with the wider community.
      Mr. Ted Garrett: I was not on the Committee, but we have to consider the fact that many councils in areas of high unemployment have a difficult task in putting to the people problems arising from the activities of central Government, whether it be a Tory Government or a Labour Government. Like many other hon. Members, I served on a local authority for many years. A long time ago we issued leaflets and communicated with the press; councils employed press officers to help in that task. That policy was not challenged until recently.
      If a council is under Socialist control—I am not talking about the far left or the right but just about a council controlled by the Labour party—invariably it faces a hostile local press similar to the national press, which leans towards the establishment, of which the Conservative party is part. Therefore, it is important that a reasonable case should be presented to the electorate; I emphasise that it should be a reasonable case.
      In the north-east, a reasonable case has been presented on shipbuilding, on transport, on the rights to claim social security benefit and on the way to claim rent rebate or rates allowance. All that will cease if the Bill has its full impact.
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      Any reasonable person—I hope the Under-Secretary of State will be reasonable—who reads the Bill will recognise that we will be subjected to a form of tyranny because the public will not be told the facts about the problems they face, as seen by their elected representatives. That is why I feel so strongly about the Bill.
      The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): I think I understand why the new clause has been tabled. I am less certain that I understand some of the more colourful contributions in its support. I shall try to deal with some of the points that have been raised.
      I think the new clause has been put down because there is general concern that material that is published by local authorities to do with the workings of their committees and of their members might unwittingly be caught by the Bill. It is my clear understanding that what the Bill is attempting to do, and I hope will do, is to prevent local authorities from publishing any material in whole or in part which appears to be designed to affect, or can reasonably be regarded as likely to affect, public support for a political party.
      We are talking here about something slightly different in the context of the Local Government (Access to Information) Act 1985 that was so aptly and eloquently introduced by my hon. Friend the Member for Hornchurch (Mr. Squire) last year. Many hon. Members will know that not only was it welcomed by the House as a whole but that I played a small but interested part in supporting it. So there is no possibility that I could stand at the Dispatch Box and not understand the fears that are encapsulated in the new clause.
      I do not believe that the Bill says what Opposition Members believe it says. Perhaps a misunderstanding has arisen because of the wording of an outline code of practice which is available to hon. Members in the Library but which was also circulated before Christmas to all hon. Members who were serving on the Committee. It included a paragraph about unpaid publicity, including council and committee reports, consultation documents, etcetera. It went on to include press releases, press conference statements and media interviews. This outline of the code of practice was intended to be no more than an outline. and it will be subjected to a considerable amount of consultation, much of which is already being undertaken.
      Within the existing document there are some phrases which could quite rightly be caught by clause 2 of the Local Government Bill which I trust will shortly become an Act. They may well fall into the category of being reasonably regarded as likely to affect public support: for a political party—the sort of thing described by my hon. Friends where some council leaders and chairmen of committees have gone out following a meeting and have issued overtly political press releases. That sort of thing is undesirable and is not part and parcel of the proper workings of local government.
      Mr. Tony Banks: I find it strange that the Minister should be surprised that people in local government, elected councillors, act politically. Politics are not confined to this House. Is the Minister's mind open to the removal from that outline or draft code of the reference to council committee reports, consultation documents, press releases and press conference statements?
      Mrs. Rumbold: My mind is always open to reasonable suggestions from any hon. Member.
      Mr. A. J. Beith rose—
      Mrs. Rumbold: I should like to continue.
      When we are talking about this section of the code of practice, I am certain that we are talking about matters which came within the provisions of the Local Government (Access to Information) Act 1985. These provide for public access to council meetings and to meetings of committees and sub-committees. There is a definite move towards openness in local government. These provisions allow public access to the agendas, reports and minutes of all meetings—publications which fall well outside the remit of this Bill.
      The 1985 Act will open to public inspection background papers on reports of council meetings, sub-committee and committee meetings, and all those papers which, in the opinion of the officers of any local authority, it would be right to disclose as matters of interest to the general public who require such papers to ascertain whether certain matters of interest to them are being dealt with openly and freely by their local council. I hope that that goes a long way to reassure my hon. Friend the Member for Hornchurch.
      I should like to pick up a point made by the hon. Member for Leeds, West (Mr. Meadowcroft). There must be a clear understanding about the provisions of the Bill that relate to the public availability of agendas and the general proceedings of a local authority. All matters that relate to the functions of local government and which are proper processes for local government are put on paper and will be available to the general public.
      As the hon. Member for Newham, North-West (Mr. Banks) said, many local authority members are quite clearly associated with political parties. It is a different matter if a member or leader of a local authority deliberately uses money from his authority to make political points and if he issues press releases that are of an overt political nature. That would rightly be caught by the provisions of the Bill, and that is the purpose for which the Bill has been brought forward.
      Mr. Skinner: Is the Minister aware that the ordinary man and woman in the street, on reading an account of what she has said, will ask why it is that a Minister of this Government can be transported free of charge from one oak panelled room to the next to make overtly political speeches on behalf of the Conservative party? Ministers of the Crown do that every day in this country and abroad, but an elected representative of a local authority, who just happens to be a member of the Labour party, cannot speak up for his constituents and make a political speech. There are double standards—one standard for a Minister of the Crown and one for the local authority representative. It is a scandal.
      Mrs. Rumbold: The hon. Member would be better advised to stick—
      Mr. Skinner: The hon. Lady does not like it, does she?
      Mrs. Rumbold: I love it. The hon. Gentleman would be better advised to stick to his accounts of Fawlty Towers and John Cleese and Basil Fawlty than to try to pick me up on something about which it is clear he knows absolutely nothing.
      Mr. Beith: Does the Minister not realise that a press release or council document which might be circulated to a large number of people is the sort of document which a parish council would circulate in pursuance of its contention that the closure of a railway station, or a DHSS office, or something of that kind, would be detrimental to its area? It is difficult to avoid the fear that such a publication might be construed as tending to reduce support for a political party, the one that happens to be in power, whether it is the Conservative party, the Labour party or the alliance, or whatever. There is real anxiety at that level of local government, where party politics plays a very small part. A purely local campaign conducted by a parish council on behalf of its residents might be caught by these definitions.
      Mrs. Rumbold: The matters to which the hon. Gentleman refers will come up for discussion when we debate functions. He will find some responses to which he will be interested to listen.
      There has been a suggestion that there is such a thing as unpaid publicity; that is, where a local authority can find ways to say that publicity that was coming out from it had not incurred the direct transfer of cash, but that funds had been provided seemingly indirectly. That would also be caught by the Bill if it were information coming from the local authority itself, because the local authority would either directly or indirectly be funding that publicity.
      I reiterate that it is only overtly political publicity that will be caught by the provisions of the Bill. All truly straightforward publicity on matters that are dealt with legitimately by local authorities, and all the papers that relate to local authorities, to which access by the public is available and which are not anything other than straightforwardly informative, will be outside the provisions of the Bill.
      Mr. Garrett: The Minister is quite properly reciting what shall and what shall not be. If she believes in the fundamental liberties, does she not see that there is now a move for the first time towards some form of censorship, something that we have not had since the 1939–45 war? Some faceless person will decide how that form of censorship will operate within the guidelines that the Minister is suggesting. Is it not a dangerous step to suppress a fundamental liberty? It is that which is causing me concern, and I hope that it is causing the Government concern.
      Mrs. Rumbold: I understand what the hon. Gentleman is saying, although I am not sure whether I agree with his fears. There are no words in the Bill which will prevent proper and honest information being given by a local authority to its electorate, provided that it is not of an overtly political nature. There is no reason why such an authority should be overtly political, and there is no reason why any information should not be couched in perfectly reasonable terms and accepted as such by the general public.
      Mr. Tony Banks: The Minister is more capable than most of expressing extreme policies in the most reasonable language. As a Chelsea supporter, I must say that there is much about her that commends itself to me. She probably learnt her language down at the shed end. In view of what she has just said, would the GLC's welfare benefit project, which produced 150,000 responses and about £11.5

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      million of unclaimed benefit out of the £100 million that the Government estimate is lost in London alone each year, be caught by the Bill?
      Mrs. Rumbold: That would depend on the way in which the GLC's benefit fund was set up, and on the way in which those provisions were related to the public. I am not sure that it would, but it is possible. It would depend on how those provisions were couched.
      It would be far fetched for the House to assume that the new clause is necessary. The Bill is worded clearly enough, and I therefore ask the House to resist the new clause.
      Mr. Allan Roberts: I should like to seek the leave of the House to respond briefly. We are not happy with the Minister's explanation. She said that the new clause is unnecessary but she did not say that it would do any harm. We think that it is necessary, so perhaps it should be included just to make sure that the assurances that we have been given are enacted. There are many examples of assurances given by Ministers, but things often turn out differently, which is what we fear in this legislation.
      My hon. Friend the Member for Newham, North-West (Mr. Banks) asked whether the GLC's welfare rights campaign would be caught by the legislation. The Bill says that if something is not the function of a local authority, that authority cannot campaign on it. It does not have to be political, overtly or otherwise. If it is not an authority's function, even though it is to the benefit of the people whom the authority serves as an elected body, it cannot campaign on the issue.
      There is nothing overtly political in monitoring the police, but only a police authority can spend money on monitoring the police. In the same way, money cannot be spent on welfare rights if that is the function of another body. Therefore, matters that are not overtly political are caught by the legislation.
      What is overtly political in the minds of one group of people is not overtly political in the minds of another. I do not think that campaigning on peace and nuclear-free zones is overtly political; it is reasonable common sense. But there are hon. Members who think that it is overtly political. However, to recruit unemployed people in my constituency to the Territorial Army, as the Sefton council does, is overtly political. But that might not be caught by this legislation because it is all a matter of subjectivity.
      Once we start legislating for censorship and trying to define what is and what is not political, what someone can and cannot say or can and cannot publish, one is on the slippery slope towards making local democracy and local government in Britain operate in the way that it had to operate in Franco's Fascist Spain and the way that it is forced to operate today in Jaruzelski's Poland.
      Mr. Holt: Is what is important not whether the hon. Gentleman and his party campaign on something but who pays for that campaigning and whether the money comes out of public funds?
      5.15 pm
      Mr. Roberts: The ratepayers of Sefton pay for the recruitment campaign for the Territorial Army. The ratepayers of Sefton and other local authority areas pay for the Conservative council's campaigns in favour of the sale of council houses. They are overtly political campaigns. I always remember the Prime Minister's maiden speech in 1960, when she said:
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      "The public has the right, in the first instance, to know what its elected representatives are doing." —[Official Report, 5 February 1960; Vol. 616, c. 1350.]
      That means publicity and expenditure.
      The Liberals have not made it clear whether they are in favour of the legislation. The truth is that they are against it but the Social Democratic party is in favour of it. That is because they are hooked on the same prejudices as the Tory party. What are now radical Left-wing Labour councils were previously controlled by Right-wing Social Democrats. We have thrown them all out in places such as Islington. In Liverpool the Liberals are in alliance with a group of people who were on the right of the Labour party whom they are supposed to have fought for years. It is those Social Democrats, who ran councils such as Islington, Manchester, Liverpool and elsewhere—Rightwing Labour people—with whom the Liberals are now in alliance. They do not like the new policies of the new radical Labour councils. I remember the Liberals criticising junketing in Manchester—one lot boozes while the other pays—and now that the council has got rid of all the junketing, it is being criticised for getting rid of the traditions of Manchester.
      The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): I was under the impression that the Opposition Front Bench did not much care for the policies of the Liverpool council either.
      Mr. Roberts: I have not mentioned the policies of the Liverpool council. I mentioned—
      Mr. Deputy Speaker: Order. We are straying a long way from the new clause.
      Mr. Roberts: The Opposition regret that the Government have not accepted the new clause. We regret the Government's policy of local government cuts and their enforcement. We regret their privatisation policies. If democratically elected councils do not want privatisation, it is enforced. Then the Government chose to abolish those councils that happen to be strong and Labour—the metropolitan county councils and the GLC. Now we have a policy of censorship in local government—the policy of telling democratically elected local councils, whether Labour, Conservative or Liberal, how they can and cannot spend the revenue that they raise locally, what they can and cannot say and can and cannot campaign on. In other words, honest debate and opposition have no place in the elective dictatorship of the Prime Minister's Government.
      Question put and negatived.

    Clause 2

      PROHIBITION OF POLITICAL PUBLICITY
      Mr. Straw: I beg to move amendment No. 1, in page 2, line 15, leave out 'publish' and insert
      'incur expenditure on the publication of.'
      Mr. Deputy Speaker: With this it will be convenient to discuss also the following amendments: No. 17, in clause 4, page 3, line 24, leave out 'local authority publicity' and insert
      'the incurring of expenditure on publicity by local authorities'.
      No. 22, in clause 6, page 4, line 30, after 'to', insert
      'the incurring of expenditure on.'
      Mr. Straw: The hon. Member for Langbaurgh (Mr. Holt) said that the crucial issue in the Bill was, who pays? The question whether ratepayers' money should be used to pay for political propaganda is a foil for the good intentions of the Bill.
      The Bill does not just seek to control so-called political propaganda on the rates. It also seeks to control, as can be seen clearly from the outline draft code, what councillors may say and think in committees when no cost is imposed upon ratepayers.
      The amendments are intended to give the Government an opportunity to bring the Bill into line with what they say is its purpose. An examination of previous debates on the Bill will show that the hon. Lady the Under-Secretary put forward what was, in a sense, a pioneering ten-minute rule Bill before the measure. She said on 16 May 1984:
      "The only restraint that I wish to impose on the section is on using money raised through taxes and rates for party political purposes."—[Official Report, 16 May 1984; Vol. 60, c. 370.]
      That was the mischief that the hon. Lady was aiming at, and she has acknowledged it.
      The Prime Minister used similar words during the debate on the Loyal Address on 6 November 1985:
      "We are therefore introducing this Session a Bill along the lines proposed by the independent Widdicombe Committee to ban the use of ratepayers' money to finance political propaganda."—[Official Report, 6 November 1985; Vol. 86, c. 23-4.]
      When the Secretary of State moved the Second Reading of the Bill on 18 November 1985, he said:
      "The Widdicombe inquiry recognised that it was implicit in the present law that local authorities should not spend public money on party political matters, but it recommended that that implicit prohibition should be given statutory effect. The Government agree with that view." —[Official Report, 18 November 1985; Vol. 87, c. 42.]
      If the Bill only gave effect to what Ministers have said it should, there would not be much argument between the parties. As my hon. Friend the Member for Edinburgh, East (Mr. Strang) said, in its evidence to the Widdicombe inquiry the Labour party, no more and no less than any other political party, believed that party political propaganda should not be paid for out of ratepayers' money.
      The Bill goes wider than that. The crucial trigger to enable the Government to use the Bill to censor and gag opponents is contained within clause 2, the first line of which states:
      "A local authority shall not publish any material".
      That reveals the true intentions of the Government. The Opposition amendment seeks to delete "publish" and insert words which mean that local authorities should not incur any expenditure in publishing material. According to the Government, that is the mischief that they are seeking to deal with.
      It is time that the Government faced up to the massive oposition which the Bill, as presently drafted, has run into from members of Conservative groups. The Association of District Councils, which is Conservative-dominated, opposes the Bill in exactly the same terms as the Association of Metropolitan Authorities and the Association of County Councils.
      Mr. James Hill: The chief officers.
      Mr. Straw: The hon. Member has mentioned chief officers, but I am talking about councillors such as Councillor John Morgan, who is a Conservative councillor
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      and who opposes the Bill. Councillor Tony Hart, the Conservative leader of Kent county council, wrote to the Secretary of State on 30 December to say that he was very worried about the contents of the Bill. Mr. Hart kindly sent us a copy of the letter in which he states:
      "It is imperative that the Bill as drawn up should be amended in order to avoid new controls which would be imprecise and possibly raise major problems of definition."
      Mr. Hart went on to say that the council appreciates that the task of finding words that will stop abuse but permit ordinary good practice to continue would not be easy.
      In Mr. Hart's judgment, all good practice would be banned by the Bill. Those careful words from Conservative councillors show the deepest misgivings, which are made worse by the publication of the draft code of practice. The Society of Local Authority Chief Executives, which is not political, believes that the Bill as drafted is unacceptable and will, in its words,
      "prove a recipe for extensive litigation."
      There has already been considerable discussion about double standards. As long as the Bill remains in its present form, with a restriction on publishing rather than on incurring expenditure, the Government will not only be charged with, but will be guilty of, double standards.
      I wrote to the Prime Minister on 7 January to ask her how she had the gall to allow a draft code of practice to be published which seeks to gag councillors not when they incur expenditure but gratuitously when they speak. I asked how the Prime Minister could do that, when the Cabinet Office's own code of guidance for Ministers and Government press officers, while it deals with so-called unpaid written publicity—we accept that it is bound to incur some expenditure when it is written—in no sense deals with what Ministers and Government press officers say at press conferences. It is now notorious that if the code was in operation and the Government injunctions on local authorities applied to central Government, Mr. Bernard Ingham, the Prime Minster's chief press officer, and many other press officers would have been contravening the code daily.
      Mr. Tony Banks: Paid for by the taxpayer.
      Mr. Straw: As my hon. Friend rightly says, paid for by the taxpayer.
      The code prohibits comments that are not objective. Comments should not be over-simplified or personalised, should at no stage be seen as politically controversial and should not directly attack the policies or opinions of other political parties or groups.
      It would seem that these days Government press officers are not particularly bothered about attacking other political parties, but they are interested in attacking other political groups—their so-called ministerial colleagues. Not a day does by without one ministerial press officer—at the behest of a Minister, as the press officers do not act on their own account—using the lobby system and their freedom under central Government conventions to attack another Minister. That happens not merely on the subject of Westland, but on other matters.
      I am grateful to my hon. Friend the Member for Bradford, West (Mr. Madden) for drawing my attention to a matter which exposes the Government's double standards. Bradford city council has written to all the Labour and Conservative Members who represent that great city to express its deep anxiety about the Bill's implications on the council's day-to-day work of

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      representing the electorate. That representation has the support of councillors from all parts of the political spectrum. Councillors are worried that their day-to-day work will be affected. They mention representations about poor railway services. If they raise that matter to the level of controversy, the councillors would be inhibited by the code.
      My hon. Friend the Member for Bradford, West has also drawn my attention to the intentions of the local authority in the Under-Secretary's constituency. The Government are seeking to gag political opponents. Right-wing Conservative councils, such as Merton council in the Under-Secretary's constituency, are seeking to gag their staff. I have, courtesy of my hon. Friend the Member for Bradford, West, a copy of an extraordinary code of conduct about communications with the media by which not only are council chief officers to be gagged but cleaners, caretakers and teachers.
      Mr. Deputy Speaker: Order. I am anxous to hear the debate. The hon. Gentleman should address the House and not turn his back on the Chair.
      Mr. Straw: I apologise, Mr. Deputy Speaker. I caught it from the Secretary of State for the Environment the other night.
      Mr. Tony Banks: My hon. Friend does not have to worry about his back.
      5.30 pm
      Mr. Straw: That is right.
      The code of conduct says:
      "No person employed by the Authority in any capacity or for any period should make to the media any communication in which there is an indication that he or she is an employee of the Authority without explicit written permission from the individual's Chief Officer."
      That is just for starters. The Under-Secretary sheds crocodile tears in her anxiety about free speech, so let us see what she has done to oppose her authority which is gagging its employees.
      The Government, no more and no less, seek to snuff out opposition. The Bill is not about controlling expenditure. Were it so, the Government would accept the amendments.
      I come now to the interesting matter of the Liberals, and their squirming and worming as they decide during the debate—as if its outcome were not plain—how they will vote.
      It is important to remind the House how the Liberal Members sought to vote in favour of the Bill when it came before the House on 18 November 1985. The reasons that the hon. Member for Southwark and Bermondsey (Mr. Hughes) gave should go down in the history books. He was explaining to the House why Liberal Members would vote in favour of the Bill. They were going to vote in favour of the Bill—I quote directly—because clauses 2(1)(b) and 3(1) and 4 are appalling and extreme. They would vote in favour of the Bill because clause 4 is horrendous and because it is arbitrary. They would vote in favour of the Bill because clause 2(3)—
      Mr. Beith: The hon. Gentleman is not quoting. That is a paraphrase.
      Mr. Straw: It is not a paraphrase. The deputy leader of the Liberal party says that it is a paraphrase. It is not.
      Mr. Simon Hughes: The House spends an increasing amount of time referring to documents and arguing
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      whether the words used are a quotation or a paraphrase. If we are assiduous, we will all have the relevant columns of Hansard. I hope that the hon. Gentleman will not mislead the House by suggesting that those were expressed as the reasons why we would vote in favour of the Brill on Second Reading. On the contrary, those were our objections to the Bill which we wanted dealt with during the Bill's passage if we were to sustain our support for it. Elsewhere, as I shall quote if the hon. Gentleman does not, we gave our reasons for supporting the Bill on Second Reading. It is elsewhere. It is not in that part of Hansard.
      Mr. Straw: Was I paraphrasing or making it up? Would I make up what is patent on the face of the Official Report?
      I have searched for any positive reasons why the Liberals are in favour of the Bill. If one takes the view that a Bill is appalling, extreme, horrendous, arbitrary and dangerous, then the brain's normal processes might lead one to vote against the Bill, but I am not a Liberal and I do not know how they work.
      My hon. Friend the Member for Bootle (Mr. Roberts) said, rather generously, that the matter arose because the Liberals were on one side and the members of the SDP were on the other. That is not true. Part of the parliamentary Liberal party voted in favour of the Bill, but those Members are opposed by all the Liberal councillors in the Association of County Councils who have been in the van in opposing the Bill. Councillor Tony Greaves, of Hebden Bridge, who runs the bunker at Hebden Bridge—[Interruption.] We know more about Councillor Tony Greaves than the hon. Member for Southwark and Bermondsey (Mrs. Hughes) does. Councillor Greaves agrees with us more often than he agrees with the hon. Member for Southwark and Bermondsey. Councillor Greaves is on Lancashire county council and we keep track of his voting record.
      In a Lancashire county council debate, Councillor Tony Greaves, the leading Liberal councillor—it does not lie in the mouths of any Liberal Members who are worried about their reselection to deny this—backed the Labour group's resolution not just against what the Government are doing but against the more moderate recommendations contained in the majority Widdicombe report.
      There was one revealing passage in the speech of the hon. Member for Southwark and Bermondsey, if I can turn it up.
      Mr. Simon Hughes: The hon. Gentleman has not prepared his speech.
      Mr. Straw: The hon. Gentleman says that I have not prepared my speech. I have, but I have inadvertently pulled out the flag that I had marking the pearls that came from the hon. Gentleman.
      Mr. Hughes: It might give the hon. Gentleman a moment to find his place if I were to remind him about the unanimity that there appeared to be and that he admitted in Committee on 10 December when I asked him whether the Labour party was then taking a view consistent with the evidence that it gave to the Widdicombe inquiry. He said:
      "Pity about the question, but the answer is yes. M) hon. Friend the Member for Houghton and Washington (Mr. Boyes) seems worried, but there is no need. In its evidence, which was approved by its national executive committee, the Labour party stated that it had always agreed that ratepayers' money should

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      not be used for explicit party political purposes, for example, in support of named candidates or in support of a Labour group or of a Conservative group. Information money should properly be used to support and explain the policy of the authority as a whole". —[Official Report, Standing Committee A, 10 December 1985; c. 157.]
      That view and the alliance view were consistent. The Labour party, however, did not vote consistently when the matter came to the House, whereas the alliance did.
      Mr. Deputy Speaker: Order. The intervention had little, if anything, to do with the amendment.
      Mr. Straw: To return to the amendment, it relates to the fact that the Bill goes much wider than the Widdicombe report.
      Mr. Simon Hughes: Yes.
      Mr. Straw: The hon. Gentleman said, "Yes." We opposed the Bill on Second Reading because it goes much wider than even the majority Widdicombe report. I am glad that the hon. Gentleman has given me the opportunity to find the other things that he said in Committee. He said: "Without stretching your patience too far, Miss Fookes, I shall say for the record"—
      the hon. Gentleman did not stretch only the Chairman's patience, but that is by the way—
      "I shall say for the record that the parliamentary parties here"—
      that is, the Liberals and the SDP—
      "believe that party political advertising on the rates should be prohibited, as Widdicombe suggested. That view is not shared by our council group, which is an autonomous body within the party." —[Official Report, Standing Committee A, 10 December 1985; c. 159.]
      Liberal councillors apparently believe that it is OK to spend ratepayers' money on party political propaganda, because those are the words that the hon. Member for Southwark and Bermondsey used. We know that the Liberals are—I was going to say fair-minded, but that would be too generous—
      Mr. Meadowcroft: Electorally progressive.
      Mr. Waldegrave: The hon. Gentleman has now confused me. As he has proved that the Liberal party is in favour of propaganda on the rates, which I remember him saying he was against, my conclusion is that he should vote with us in the Lobby tonight.
      Mr. Straw: No, the answer is that the Minister must vote with us in the Lobby.
      Mr. Hill: Let us all go into the same Lobby.
      Mr. Straw: That may happen. This group of amendments is intended to bring the Bill into line with the recommendations of the Widdicombe report and with what Ministers said was its main purpose.
      Mr. Tony Banks: I support the amendment moved by my hon. Friend the Member for Blackburn (Mr. Straw). As he said, if the Government seriously want to do what they say they want to do, they will accept these amendments.
      The amendments give me the opportunity of drawing to the attention of the House once again the total hypocrisy of the Government's position on publicity and information. If it is put out by the Conservative party in government, by definition it is information. If it is put out by Labour-controlled local authorities, it is, according to
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      the Government, propaganda. That is the attitude of the Government to all matters—one of hypocrisy and double standards.
      Let us take as an example the enormous amount of taxpayers' money spent by the Government on putting out their propaganda through various Government Departments, which the Government describe as information. Some of the press and publicity departments are enormous and their budgets are going up all the time. My hon. Friend the Member for Bradford, West (Mr. Madden) tells me that the Government now spend £23 million on publicity. We would call it propaganda, for that is what it is. It is pushing the policies which the Government espouse. Labour Members find those policies objectionable, divisive and clearly aimed at trying to sustain the Conservative party in power.
      If a local authority tries to tell the truth about central Government policies, that is branded as propaganda. All I can say is that when the Government stop telling lies about local government, local government will stop telling the truth about the impact of the policies of central Government.
      The questions that I put down recently to various Ministers about the money spent in their Departments on press publicity show that the amount spent by the Government doubled between 1984–85 and 1985–86. It is difficult to get the complete figure, which is running at over £10 million in 1985–86—this is Government propaganda paid for by the taxpayer—because, despite my asking the Minister of Defence on 6 December to state the amount of money spent by his Department on propaganda, I am still awaiting a reply, although it has been promised to me in frequent telephone conversations with the Minister's office. I can only assume that once again it is trying to cook the books, as we know the Secretary of State for Defence has been so ready to do.
      Let us look at some of the percentage increases in Government Departments over the period 1984–85 to 1985–86. They show that the Department of Employment's publicity budget increased by no less than 300 per cent. in that period, while the Welsh Office increased its spending by over 250 per cent. in twelve months.
      All this, we maintain, is propaganda put out by the Government and paid for by the taxpayer. If the Government aim to restrict the local authorities' ability to start telling the truth, they should do something to limit their own capacity to tell lies at the expense of the taxpayer.
      Mr. Meadowcroft: This amendment is not particularly significant, despite the efforts of the hon. Member for Blackburn (Mr. Straw) to make it so. It seeks to temper the Bill, and to that extent it is valuable, but it seems to us to pose a quite arbitrary and unsustainable distinction between the work of a local authority and that which can be divided out as separate expenditure. If an attempt were made to separate out the particular expenditure, that in itself would introduce a dangerous element into the whole debate, because it would mean that a local authority which was seeking to undermine the conventions and to abuse its rights as a local authority could have a separate fund and say, "Ah well, because it did not come out of that it is part of the generality of local government and so does not fall foul of the Act."

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      There is no part of local government on which expenditure is not incurred. If staff are employed on a particular part of local government work, expenditure is clearly incurred. No work is carried out without staff time. The amendment, therefore, seems to impose a highly artificial and arbitrary distinction between paying for and being part of the generality of local authority work. I hope that the amendment will be withdrawn.
      5.45 pm
      Mrs. Rumbold: Amendment No. 1 seeks to substitute the words
      "incur expenditure on the publication of"
      for the word "publish" in the first line of clause 2(1). As the hon. Member for Leeds, West (Mr. Meadowcroft) has just said, the substitution would to some extent be rather spurious for the intention of the Bill and, indeed, for its actual operation. It would muddy the waters.
      I know that the hon. Member for Blackburn (Mr. Straw) has written to the Prime Minister, and I also know that a letter is on its way to him, which I am sure he will read with immense interest.
      Mr. Straw: Has the hon. Lady a copy of it?
      Mrs. Rumbold: I am afraid not. I am sure that it will be published immediately.
      To support his arguments for this particular amendment, the hon. Member for Blackburn lined up nearly everybody of whom he could think—all the local authority leaders of all political persuasions. He told the House that nearly everybody on the Government Benches and on the Opposition Benches would be persuaded to support not the Bill, but the amendment. He said that these people had written in large numbers. It is perfectly true, because we have all had letters from local authority associations and others expressing concern.
      I suspect that much of the concern has been expressed partly because of the contents of the outline of a code of practice which said that publicity would include
      "paid publicity, including paid advertising in the press, on radio and television, leaflets, campaigns, exhibitions, etc."
      Much of the alarm has been aroused by local authority members who have perhaps been advised by their officers that this would be exceedingly difficult for local authorities to carry out and might entail a great deal of expenditure, and many other things that are somewhat alarmist.
      I remember the Local Government (Access to Information) Bill which, we now assert firmly, has wide support throughout the country. I have to tell the House that the wide support consisted of an absolute barrage of letters from local authorities, and especially from their officers, telling me and, I am sure, all my colleagues that the Bill would be exceedingly detrimental and would incur such massive expenditure that local authorities would need a greatly increased block grant from the Government in order to cope with it. Yet, now that it is on the statute book, it appears widely accepted as a splendid piece of legislation, which it is.
      I must refute the hon. Gentleman's argument that, simply because there appears at the moment to be opposition, that is a good reason for the Government to accept his amendment. His amendment adds nothing to the sense of the Bill. I feel that, were it to be accepted, it would be nothing—
      Mr. Straw: The hon. Lady says that she objects not to what councillors say, but to councils spending ratepayers' money on party political propaganda. Why, then, is the Bill not addressing itself to that and that alone?
      Mrs. Rumbold: That is exactly what the Bill addresses itself to. Publishing will incur expenditure of ratepayers' money. Publishing in any form is likely to incur some expenditure, however indirectly, of ratepayers' money. For that reason, I believe that the Bill is perfectly adequate. I especially support the Bill. As the hon. Member for Blackburn pointed out, I introduced a modest ten-minute Bill on the matter, which suggests that I anticipated that the Government would ultimately, and sensibly, introduce a Bill of this type. I ask the House to reject the amendment.
      Amendment negatived.
      Mr. Straw: I beg to move amendment No. 2, in page 2, line 16, leave out
      'can reasonably be regarded as likely to'
      and insert 'it is probable will'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 6, in page 2, line 28, leave out 'can reasonably be regarded as'
      and insert
      'it is probable that it is'.
      Mr. Straw: In one sense this is a technical matter. but it is also important. Clause 2(1) is the trigger for the rest of the Bill. The tests established in the clause are the key
      tests of the Bill. Clause 2(1) states:
      "A local authority shall not publish any material which, in whole or in part, appears to be designed to affect, or can reasonably be regarded as likely to affect, public support for—
      (a) a political party".
      There are two legs to the test. We have argued about the principle of the Bill, but within the context of the principle I understand why the Government have introduced the test whether material
      "appears to be designed to affect … public support".
      That test is objective, but from a relatively objective test we move to one that is worrying and potentially wide-ranging in its scope. The test whether material
      "can reasonably be regarded as likely to affect, public support for—
      (a) a political party"
      could open a Pandora's box. Anything that a local authority does could be classed as being
      "reasonably … likely to affect, public support for … a political party".
      Yesterday I went to Southampton to launch the Labour party's higher education charter. I was in the foyer of the city hall of that great city when I noticed that the council had shown great initiative. The council is seeking to do something about potholes, holes in the road, and broken lamp posts. The council has issued postcards, which are plain business reply postcards on one side with "oops" on the other side. The postcard states:
      "A Post Card from you means action from us. Please fill in using BLOCK CAPITALS."
      It asks for details of the repairs that are needed, such as for potholes in footpaths, missing road nameplates and broken street lights. That is sensible action for a local authority to take. I am sure that the Minister acknowledges that there is no party political intent. Authorities must have a system of recording complaints, and it is better to receive them in that form rather than on scraps of paper resulting

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      in dissatisfied ratepayers. That action has been taken by a Labour-controlled council, but it was not designed for political purposes. If the campaign is successful, it could be taken as being
      "reasonably … likely to affect, public support for … a political party".
      If a council does something good, that is likely to affect public support for the party. If the council does something bad, that could equally be
      "reasonably regarded as likely to affect, public support for … a political party".
      I am grateful to the Minister for answering my correspondence in detail about how the courts would seek to interprete the test. In his letter, the Minister states:
      "In essence it is a test of remoteness just as in negligence liability lies in respect of all damage which is reasonably foreseeable."
      That took me back 20 years to the endless hours that I spent in my tort lectures. However, I am not reassured. Many of us who are lawyers are not reassured by the Minister's assertion that the test is one of remoteness. I do not believe that remoteness would be an issue. Of course, local authorities could do something that could be so remote from political support that the action would be out of court. But, in the case of the Southampton postcard, the question of remoteness does not arise. The council is directly responsible for the postcard. If the council does well out of the campaign, it will gain political support, so remoteness is not an issue.
      The man on the Clapham omnibus could reasonably believe that, although the council did not intend to affect political support, its action could reasonably be regarded as likely to affect political support. In this context, reasonableness is a wider-ranging test and is not of the Wednesbury type, which, in administrative law, is a test of unreasonableness where public authorities are allowed a wide discretion to be reasonable and the courts intervene only when they have been unreasonable.
      We seek to substitute the test with one of probability, which is a concept well known to the courts. Although it does not depart from what the Government wish to achieve, it provides a more objective and fairer test than that in the Bill.
      We understand the problems of drafting legislation, but it is the duty of the House to improve legislation when we violently object to its purpose. I hope that the Minister will accept the amendment in that light.
      Mr. Simon Hughes: As the hon. Member for Blackburn (Mr. Straw) said, in Committee we had a substantial debate on terminology. The debate had a political layer and a legal layer. The Committee accepted that the wording in the Bill implies a reasonableness test. That allows for the maximum possible interpretation by the courts of what they could interfere with or intervene in.
      The reasonableness test has been established in many cases following the Wednesbury case, to which the hon. Member for Blackburn referred. The Wednesbury case asserted that reasonableness could be tested by whether someone could reasonably act in a certain way. It is not a balancing exercise, but an evaluation of an action, giving the benefit of the doubt to the person making the decision to act.
      In Committee we considered that the test in the Bill would extend a principle of administrative law to a new
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      area, which could involve an enormous amount of litigation. Local authorities would be uncertain about the practical reality of what would appear to be a catch-all phrase. Because of the opinion expressed in Committee, the Minister said that he would ask his officials to reconsider the phrase.
      Clearly, no Government amendment suggests a better definition. The Minister accepted that definition was difficult. Several amendments were tabled, of which two have been selected, in an attempt to give effect specifically to the Widdicombe committee's recommendations. Paragraph 229 of its report states:
      "An express prohibition of expenditure calculated to advance the interests of a political party could well have a moderating effect on the scale and style of campaigns."
      That wording is not legalistic.
      6 pm
      If the Government are unwilling to accept the amendment, one of the problems will be that, instead of there being on the face of the literature a sign of its likely effect, there will be a much wider definition. The Widdicombe committee intends that we put into statute what possibly already exists in the common law. I hope the House will accept that that will not happen if the clause passes into legislation unamended.
      The danger is that this is the sort of argument that can detain people in the High Court for hours, if not days, because it revolves around substantive and important traditional matters of legal definition. I hope that the Government will reconsider the matter, because of its practical implications. Even if they have not yet found a precise substitute which is closer to Widdicombe's recommendations, they have the benefit of advice which they did not have in Committee.
      All hon. Members will have received a joint statement by the three local authority associations—the county, district and metropolitan councils—which specifically comments on the present state of play. It states:
      "Widdicombe appreciated the difficulties of translating this statutory prohibition into legislation. The question is what is the best test of whether publicity is 'party political'? Clause 2 seeks to apply tests of intent … and effect. We believe this is fundamentally wrong, unworkable in practice and would lead to prohibitions well beyond the Widdicombe recommendation."
      The paragraph entitled "A Lawyer's Paradise" states:
      "Widdicombe … stated that 'We wish to avoid new controls that will be imprecise, or raise major definitional problems, and are aware that it is easier to identify a problem than to encapsulate that problem in a legislative formula."
      The councils' response to that Widdicombe quotation was:
      "Clause 2 is so imprecise, with so many words and expressions needing subjective evaluation, that it looks like a charter for extensive litigation."
      The amendments seek to replace the test of reasonableness, as the county councils' objective assessment has evaluated it, with a test of probability. Will the Government admit that they have not yet done what they said they intended to do when they began legislating, which is to implement the Widdicombe recommendations?
      Although there has been much mirth periodically at the expense of this position, I must repeat that from the outset we in the alliance have stood full square behind the Widdicombe majority report. We said that we thought it right to legislate for Widdicombe's recommended prohibition. We also said that we needed a definition that would go that far and no further. When the legal and political opinion of groups representing all political

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      parties, all groupings of political parties, and all the major
      groupings and societies of officers in local government, with all their years of experience, is that the clause, if it is unamended, will result in uncertainty, excessively wide interpretation of its original intention, and endless litigation, it must still be unacceptable.
      I hope the Minister will say that, although he could not get his officials to come up with a satisfactory amendment, he recognises, as he did previously, that it is necessary to re-amend the clause, and that the selected amendments, at least one of which was tabled by my hon. Friends and myself, are at least a better stab at the objectives of Widdicombe than is the Government's definition. It is a matter of both political and legal judgment, and of the Government's honesty with the electorate in doing what they said they would do. I hope that the Government will concede that right and that justice, and that the best solution to the difficult legal problems is on the side of the amendments. I hope that the Minister will accept them and say that they are better than what we started with.
      Mr. Tony Banks: It is interesting to hear a lawyer warning the Government about the dangers wihin the Bill rather than licking his lips at the thought of the fat fees that he and his colleagues in the legal profession will undoubtedly demand from local authorities and others if the Bill is enacted without amendment.
      The Widdicombe inquiry, which was aware of the advantages of local authority publicity, recommended that
      "there should be an express statutory prohibition of local authority publicity of a party political nature."
      All hon. Members will agree with that statement because it is unexceptionable. It does not propose a new restriction on local government, because at present the publication of party political material would contradict central principles of administrative law. It would be either improper or irrelevant, so there is no need for this further strengthening.
      We accept that the Government intend to improve the Bill by proposing an amendment which deletes the reference to
      "a body, cause or campaign identified with, or likely to be … identified with, a political party."
      However, there is no real change to the heart of clause 2(1) or the Bill. The crucial phrase refers to banning
      "material which … can reasonably be regarded as likely to affect, public support for—
      (a) a political party".
      That inflicts a test of such severity that it goes well beyond a statutory declaration of existing law.
      The amendments that we have tabled seek to redress the balance in clause 2(1) and (2)(b), so that material would be banned only if it were probable that it would affect political support. Even if the amendments are accepted, the Bill will represent a lawyers' paradise.
      The existing tests will almost certainly prevent local authorities from issuing publicity about proposed Government legislation, provided that the legislation has been the subject of political disagreement between any two parties. It is extremely difficult to think of recent legislation which has not been extremely controversial.
      The type of publicity that local authorities have circulated, which draws attention to the impact of Government legislation on their local communities, was explicitly defended in the Widdicombe report as a proper and fitting use of public money. The Government's motive
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      for introducing the clause in its present form could well be to avoid the effects of having an informed public, which is what we have said throughout.
      The Government are out to gag local authorities to prevent them from telling the truth about the impact of Government policy. The Government say that we live in a free society where information is available, but I do not accept that. Our society is relatively free compared with many others, but if our democracy is based on the freedom of soft pornographers, such as Murdoch, to print the trash, filth and daily lies in The Sun and, increasingly, in The Times, and the sort of stuff that we read in the Daily Star and Daily Express, it is extremely shallowly based. We do not live in a society where access to information is unhindered and free. This is one of the most closed societies in Europe. We live in a society where information is filtered through either the Government or their agents in Fleet street—the puppet Tory press of Fleet street—so local authorities are attempting to redress the information imbalance.
      The Bill will prohibit an authority from publicising a rates cut, or a decrease or an increase—if that were ever to happen—in its HIP allocation. The effects of these policies on Labour local authority services would be open to challenge, as would a Conservative council that issued information to promote council house sales or selective education.
      As long as I am a Member, I shall refer to the Greater London council as it exists and when it has passed on, temporarily. The GLC is involved in a range of publicity campaigns drawing attention to certain benefits aimed at improving the environment or the lot of Londoners. There have been campaigns aimed also at drawing the attention of Londoners to the effects of Government policies. The "Fares Fair" policy, which was so popular with Londoners, would not be allowed to operate under the Bill because it was controversial. A Conservative group need only object to the policies and the GLC, once again, would be dragged into the courts.
      The welfare benefits project would be banned because the Greater London council is not a welfare social services authority. The GLC would be prevented from mounting a campaign drawing to the attention of tens of thousands of Londoners the social security benefits that they are entitled to claim, but are not claiming. The Government have told us that about £100 million a year goes unclaimed in benefits in London. The GLC's welfare benefits project has each year enabled about £11·5 million of that unclaimed money to be put into the hands of some of the poorest people in our community who so desperately need it.
      Streetwise Kids, civil defence, advertising of concerts and the cultural activities at the Royal Festival hall and programmes drawing attention to the evils of pavement parking and the need for strategic planning are all campaigns with an element of controversy, because they are opposed by the Government or by the opposition within the council. These campaigns would fall foul of the Bill, particularly this clause. The hon. Member for Southwark and Bermondsey (Mr. Hughes), who, I understand, has given up his legal practice, has warned us it will be a bonanza for lawyers. In his profession, many people are waiting to ring up the pound signs on the tills. This will mean a real killing for lawyers at the expense of

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      taxpayers and ratepayers. If the Minister is serious about ensuring that the Bill does not provide a lawyers' paradise, he should accept the amendments.
      Mr. Beith: I should like to address to the Minister the question that I addressed to him in the context of the words that the amendment seeks to alter. The clause refers to
      "material which … appears to be designed to affect, or can reasonably be regarded as likely to affect, public support for—
      (a) a political party".
      How can the normal activities of any parish council not be so regarded? It is in the nature of the activities of parish councils to write letters, publicise grievances and circulate material, all of which is designed to affect the activities of other bodies, because they have so few powers and responsibilities of their own. Therefore, they criticise what other people do. The consequence of that is not so much the fear of other parts of the Bill and of other amendments, but the anxiety that they will become attached to a cause that is identified with a particular political party. Often, the cause will be supported by several political parties. They appear to be staunch critics of the Government of the day or perhaps of the political party that controls another local authority in whose area they are situated. It may be a Conservative county council—if there are any left in future years—or the party in power at Westminster that is criticised. One way or another, they will finish up criticising a political party which is in power merely because of the grievance they raise.
      If the Alnwick town council raises, as it has done on several occasions in the past two years, the subject of the inadequate number of police on the beat in the town and the rise in crime, it will appear to some reasonable people to be casting doubt on the effectiveness of the Government's declared policy on law and order and crime reduction. I consider myself to be a reasonable man, and I do not think it is an unreasonable conclusion that that might affect the political support for the party that forms the Government.
      6.15 pm
      Another parish council may complain about the reduction in railway services from Chathill or Widdington, or some other station in my constituency. It may be regarded by a reasonable person as casting doubt on the commitment of the Government of the day to our railway system, which other people rightly question.
      It seems to me almost impossible for parish councils to carry out their normal activity of speaking up for the needs of their areas without appearing to be acting in a way that may reasonably be regarded as likely to affect public support for the political party that forms the Government of the day, or controls the local authority that provides the services about which they are speaking. It is in that context that I am worried about the words in the Bill. I am sympathetic to the idea that they might be amended. I hope that, although the same issue comes up in other areas, the Minister will discuss its relevance in this context as well.
      Mr. Stan Thorne: I am in some difficulty, Mr. Deputy Speaker. I appreciate the context in which my hon. Friend the Member for Blackburn (Mr. Straw) moved the amendment, but I can foresee problems over the situation that is already portrayed on television—an advertisement by Preston designed to attract additional investment into the Preston area. That is a very good thing,
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      of course, because investment is likely to attract more jobs and make various other improvements in the local economy.
      When one looks at that advertisement, and at advertisements of the kind that other authorities might put out, it seems to me that they will have, and I certainly will have, some difficulty. This is probably purely a matter for lawyers to debate, and the rest of us might as well keep silent. The clause states:
      "A local authority shall not publish any material which, in whole or in part, appears to be designed to affect, or can reasonably be regarded as likely to affect, public support".
      If the amendment were accepted, the clause would read:
      "A local authority shall not publish any material which, in whole or in part, appears to be designed to affect, or it is probable will affect, public support".
      I accept that my hon. Friend, a highly intelligent barrister, must know the difference between those two sentences, but I am damned if I understand the difference between them. I am anxious to ensure that local authorities are not deprived of the opportunity to disseminate informative material to the people in their areas, because in my view that is a fundamental responsibility of local authorities.
      We have argued about education, as I said in Committee. We have sought to inform people about education in our areas. The amendment will not help a local authority to decide, because it will not be able to publish any material that "it is probable will" rather than that it
      "can reasonably be regarded as likely to"
      affect public support.
      Mr. Simon Hughes rose—
      Mr. Thorne: I understand that I am to receive the advice of a legal expert.
      Mr. Hughes: I can only suggest what I think is the agreed answer. There is concern about the clause as it stands because only one or two people need to take that view and the material will be outlawed. With the probability test, the general view of as many people as one would wish to consider must be assessed. Therefore, the view of one or two people could be enough to force what we are talking about into the category of illegality. If the measure is changed, the general view of the population will have to be weighed up. I think that that will have a much safer outcome.
      Mr. Thorne: Having heard that, all I can say is, God protect us from the lawyers. The clause does not suggest in any form that, on the one hand, we are selecting the views of a minority of people, and, on the other hand, that a majority might make their wishes clear on particular issues. I do not know how a lawyer can reach that conclusion. Are we talking purely about semantics?
      Something in these words baffles a mere Back Bencher like me. The clause states:
      "A local authority shall not publish any material which, in whole or in part, appears to be designed to affect, or can reasonably be regarded as likely to affect, public support".
      Can you help, Mr. Speaker? Where does the clause refer to the opinion of a few people rather than to that of a large number of people? You, too, are baffled, and I am not surprised. However, we have the legal experts with us, and they have found a remedy. I hope that the Government can provide a more sensible solution—I say this with due respect to my hon. Friend the Member for Blackburn—than I have heard so far.
      Mr. Waldegrave: The debate began in its usual way with the alarmist tendency of the Labour party led, on this occasion, by the hon. Member for Bolsover (Mr. Skinner), who made a moderate and understated speech. He said that democracy in local government and civilisation, and so on, were at an end—a speech familiar to all those who participate in these debates. I face the slightly deflating task of saying that I fear that nothing so exciting is afoot. I want to tread rather quietly, because I may get into trouble with some of my hon. Friends if I say too much.
      The Government have to steer a middle course. They have to outlaw the worst abuses, although they know that certain actions, of which many Conservative Members disapprove, will still be legal under the Bill's definitions. I shall briefly go a little wider than the amendment, which is the heart of the Bill.
      The hon. Member for Blackburn (Mr. Straw) gave an example of something that he claimed might be excluded. By no sensible construction of the Bill would that be excluded. I want to give a slightly more major example of something which I believe will be totally legal under the Bill. Bristol has the misfortune to have a Labour council. At most weekends I work to rectify that by trying to remove that council. Not many hon. Members would describe Bristol city council as a very Right-wing Labour council. It includes some pretty radical members. The council has produced an annual report which some of my colleagues in Bristol, who are working to get rid of the council, would say was glossy and unnecessarily expensive. They would like its presentation to be different and for different policies to be presented. I can find nothing in that report that the Bill would prohibit. It is a perfectly good account by a council trying to take various measures for its area and people. Of course, it does refer to some of the wrong things—in my party's view—that the council wants to do.
      The report was produced by Mr. Robertson. He did not describe himself as the "Labour leader of Socialist Bristol" or similar nonsense—he described himself properly as the leader of Bristol city council. Mr. Robertson described the various measures that he would have liked to undertake had the Government not prevented him from doing so. For example, he would have liked to spend more capital, but Government restrictions on capital expenditure, which I have defended in the House, stopped him from doing so.
      I find nothing in the document that would be outlawed by the Bill or would in any way be unacceptable under its provisions. It is well within the traditions of the type of local government supported by all hon. Members who support local government. That is not to say that I do not want to get rid of the city council as soon as possible and replace it with a proper Conservative council. This would save ratepayers' money. It would result in a different balance of policies. I must make it clear that we are not in the business of trying to prevent the type of activity described by the hon. Member for Preston (Mr. Thorne)—for example, where a sensible council is trying to attract inward investment. Of course we are not trying to prevent that, and the Bill does not do so.
      The annual report could have done what the Militant Tendency council did in Liverpool — use banner headlines saying, "Socialist council in Liverpool", and make party political attacks on the Liberal party, and party political attacks on the Conservative party. That would rightly be put in jeopardy by the Bill.
      Mr. Beith: In so far as the document refers to the disappointment of the leader of Bristol city council at the various things that he has not been able to do because of Government constraints, might it not lead—however objective and calm its tone—a reasonable Bristol citizen away from supporting the Conservative party, which is the Government to whom reference is made in that very objective way?
      Mr. Waldegrave: I shall come to the legal argument why that is wholly fanciful. I think that someone who did not know the politics of the area would not know the council's policy after reading the document all the way through. I have no doubt that that would cause great offence to some of the wild boys in the Labour party. They would think, "What a waste. This fellow Robertson has put out an objective document which has not infuriated the opposition parties and shown what a splendid Socialist he is."
      I shall not go too far in praising Mr. Robertson, because I am trying to get him out of office as soon as I can. Indeed, I pay tribute to Mr. Robertson and his senior officers, who are exceedingly good and responsible persons. Those officers have advised Mr. Robertson how to put his case fairly without coming within 100 miles of the jeopardy of the Bill or of breaking the traditional conventions.
      Mr. Max Madden: The Under-Secretary of State has received a letter from Bradford city council, where the Conservatives are the largest group, but are not in control. That council has passed a resolution against the principles of the Bill. The letter was prepared after extensive consultation. It cites a number of campaigns conducted by the council in the past year or so which it claims would be within the terms of the Bill. Will the hon. Gentleman give a specific assurance that the campaigns to which the letter refers would not come within the Bill's provisions? Will he give a clear and categorical assurance to Conservative councillors and others in Bradford who are extremely worried about the Bill's provisions?
      6.30 pm
      Mr. Waldegrave: I have received letters from a number of Conservative councils, including the Royal borough of Kensington and Chelsea, to which I pay rates, as I do in Bristol. I have received letters from Bradford and other authorities. It would be wrong for me to try to become even more of an amateur lawyer than the ex-lawyer from the Liberal party, the hon. Member for Southwark and Bermondsey (Mr. Hughes), and to give free counsel's opinion on particular campaigns. I have brought with me one example of the sort of material that will be perfectly all right on any sensible interpretation of the Bill.
      The hon. Member for Berwick-upon-Tweed (Mr. Beith) seeks on every clause to raise the issue of parishes. In due course we shall come to the appropriate clause and be able to deal with the issue. I hope that I shall be encouraging to some extent when we do so.
      I shall explain why I do not think that the amendments are right, in as steady and clear a way as I can. I shall start with the Liberal amendment, No. 25, which reads:
      "or calculated to advance the interests of".
      That is unclear and seriously defective in two respects. In the first instance—I thought that I had persuaded even

      349
      some Opposition Members to accept this argument in Committee—it is no good merely inserting the words "advance the interests of a political party". Some of the most damaging party political material that is put out by a council might be knocking copy that is directed to another party.
      The modern advertising industry is becoming better and better at producing knocking copy. Many Members will remember the excellent advertisement for the deux chevaux Citroen, which claimed that it was faster than a Porsche. We were told that a deux chevaux travelling at 60 mph could overtake a Porsche being driven at 55 mph. Given that the advertising industry is becoming better and better at producing knocking copy, "advance" would be an inappropriate word. I suggest that "calculated" is an intention word. It is a word which draws in the assessment or intention of the council in a complicated and obscure way involving words that are not familiar to the law. I do not think that that amendment is worth considering.
      I turn to the amendments of the hon. Member for Blackburn (Mr. Straw), Nos. 2 and 6. First, let us remind ourselves of what we are doing. It makes me nervous in one sense, but encouraged in another, to see that my hon. Friend the Member for Grantham (Mr. Hogg) has entered the Chamber at a time when I am talking about the law. I shall be nervous to do so in front of him, but—
      Mr. Stan Thorne: On a point of order, Mr. Speaker. I understand that the Minister has told the House that he is replying to the Liberal amendment. We are not discussing a Liberal amendment. Instead, we are discussing amendments Nos. 2 and 6, neither of which has been submitted by the Liberal party.
      Mr. Speaker: That is correct.
      Mr. Waldegrave: I beg the pardon of the House. I thought that before responding to the two amendments of the hon. Member for Blackburn I would take up some other aspects of the issues that they raise. This is an important debate and I think that it would be unfair to the Liberal party if I were not to mention the amendment that it has put before us.
      Mr. Thorne: Further to my point of order, Mr. Speaker. The Minister is saying that he does not want to be unfair to the Liberal party. In fact, he is being unfair to you, Mr. Speaker, as you have selected amendments Nos. 2 and 6 in this instance and no others.
      Mr. Speaker: That is correct. The Minister, like everyone else, must address himself to the amendments. It is reasonable, however, for him to answer the questions that have been asked by Liberal Members during the course of the debate.
      Mr. Waldegrave: I am grateful to you, Mr. Speaker. I shall address myself to the amendments of the hon. Member for Blackburn in everything that I have to say from now on.
      Clause 2(1) prohibits a local authority from publishing any material which
      "in whole or in part appears to be designed to affect, or can reasonably be regarded as likely to affect, public support for—(a) a political party".
      This test is applied to the nature of the material that is published, and that factor must be central to our approach. The test should not be applied to the motive of the local
      350
      authority. The test is not whether the authority intended to affect public support; nor is it the effect of the material which is the consideration of whether it does affect public support. Nothing has been said this afternoon that has caused me to think that we were wrong in our judgment. It would be impossible to introduce a test that involved the measuring of motive and effect. A local authority might have a number of different motives and intentions. It is often impossible to prove effect, although great books have been written on why it is that certain shifts in voting patterns have occurred in particular elections.
      The tests that are set out in clause 2(1)(a) and (b) are objective tests that are justiciable. The courts will have to form a judgment on the nature of the material, in the light of all the circumstances of the case. The test in paragraph (a) is directed to the nature of the material to determine whether it was intended to have an effect on public support. That test has been at the centre of our approach. In other words, it is whether it can be inferred from the nature of the material that it was produced for a party political purpose. The words that are at the centre of the amendment—
      Mr. Beith: The Minister has imported into his paraphrase of the words in the clause the very concept of intention which he said previously was inappropriate and could not be worked into the clause. He has used the words "intended to" in his description of the contents of the clause. It is clear that intention is not featured in the clause.
      Mr. Waldegrave: The hon. Gentleman misunderstands me. The court would have to judge and estimate whether the material could reasonably be regarded as likely to affect public support. It would not be necessary to consider the intention of the council at the moment that the material was produced. It is the material itself that will have to be judged. I think that that test provides the only hope of going forward.
      The next crucial passage is:
      "can reasonably be regarded as likely to affect, public support".
      The policy is that local authorities should be responsible for the ordinary consequences of their actions, especially when they produce publicity. It is a difficult and important area. The test remains an objective one that is addressed to the nature of the material, and that is considered in the light of its likely consequences. I apologise to the hon. Member for Blackburn for going through the argument slowly, but it is important to have it set out clearly on the record.
      The hon. Member for Blackburn suggests that we substitute
      "it is probable that it is"
      for
      "can reasonably be regarded as",
      and that is still an objective test. I am grateful to the hon. Gentleman for the way in which he introduced the amendment. It is not a wrecking amendment or a stupid amendment. He is trying genuinely to improve the Bill, and I am trying to argue why the amendment should not succeed. Amendment No. 6 provides an objective test that is based on the nature of the material, but turns on probable consequences rather than on likely consequences.
      It is at this point that we part company. We part on the intention behind what we are trying to do, and not on the law. It is clear that the hon. Gentleman's test is a narrower one than that which has been put forward by the

      351
      Government. We are debating whether it is probable that less material will be caught on the basis of its probable consequences than is likely to be caught on the basis of its likely consequences. There is a dispute between us about the width of the coverage and the capacity to win a case in court. We have considered whether the proposed narrowing would be in order, and we do not believe that it would.
      The hon. Member for Blackburn is right about reasonableness — a concept which I introduced in Committee in the wrong place. The administrative law concept has no direct relevance in determining whether material can reasonably be regarded as likely to affect public support. The purpose behind the "can reasonably be regarded" qualification is to prevent a contravention, as the hon. Gentleman rightly said, when the possibility of its affecting public support is too fanciful or too remote. The hon. Member for Preston and others have been trying to alarm us on that ground. They have chosen rightly to test what we are doing. In effect, they have asked, "What if one or two people produce a story that something is bound to have an effect on support for a political party?"
      That would not be sufficient in court. That level of remoteness will not do.
      The question whether material can "reasonably be regarded" is one which local authorities will have no difficulty in answering. I do not make that assertion lightly, because such judgments are made every day. Every day local authorities use the power in section 111 of the Local Government Act 1972, which is headed
      "Subsidiary powers of local authorities".
      That power gives statutory force to the common law doctrine of ultra vires. The courts have held that a corporation does things for which there is express or implied authority and whatever is reasonably incidental to them. That is using exactly the same sense of "reasonable" as that which is used in the Bill. It is a concept of reasonableness with which the law is very familiar and I do not believe that it will have any difficulty in applying it. During this debate and subsequently it may be sensible to make absolutely clear the sort of legal judgments on which the Bill has been based to still some of the anxieties that have been expressed.
      I hope that I have given reassurance on the legal meaning of the provisions in the clause, although I must acknowledge that, like the hon. Member for Preston, I am not a lawyer. I hope that I have been able to reassure my hon. Friends that we shall not narrow the test in the way that the hon. Member for Blackburn suggests. That would involve too much narrowing, and on that ground there is a dispute between us on policy. If the amendments are pressed to a Division, I shall have to ask my right hon. and hon. Friends to oppose them.
      Mr. Simon Hughes rose—
      Mr. Speaker: As this is the Report stage, hon. Members can make only one speech. The hon. Member therefore cannot speak again.
      Mr. Hughes: An hon. Member can speak again if he has the leave of the House.
      Mr. Speaker: Does the hon. Member have the leave of the House?
      Hon. Members: No.
      Question put, That the amendment be made:—
      The House divided: Ayes 192, Noes 255.

      Division No. 43]

      [6.40 pm

      AYES

      Adams, Allen (Paisley N)

      Freud, Clement

      Alton, David

      Garrett, W. E.

      Anderson, Donald

      Godman, Dr Norman

      Archer, Rt Hon Peter

      Gould, Bryan

      Ashdown, Paddy

      Gourlay, Harry

      Ashley, Rt Hon Jack

      Hamilton, James (M'we1l N)

      Ashton, Joe

      Hamilton, W. W. (Fife Central)

      Bagier, Gordon A. T.

      Hardy, Peter

      Banks, Tony (Newham NW)

      Harman, Ms Harriet

      Barnett, Guy

      Harrison, Rt Hon Walter

      Barron, Kevin

      Hart, Rt Hon Dame Judith

      Beckett, Mrs Margaret

      Hattersley, Rt Hon Roy

      Beith, A. J.

      Haynes, Frank

      Bell, Stuart

      Heffer, Eric S.

      Benn, Rt Hon Tony

      Hogg, N. (C'nauld & Kilsyth)

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

      Holland, Stuart (Vauxhall)

      Bermingham, Gerald

      Home Robertson, John

      Bidwell, Sydney

      Hughes, Dr Mark (Durham)

      Blair, Anthony

      Hughes, Robert (Aberdeen N)

      Boothroyd, Miss Betty

      Hughes, Roy (Newport East)

      Boyes, Roland

      Hughes, Simon (Southwark)

      Bray, Dr Jeremy

      Janner, Hon Greville

      Brown, Gordon (D'f'mline E)

      Jenkins, Rt Hon Roy (Hillh'd)

      Brown, Hugh D. (Provan)

      John, Brynmor

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

      Johnston, Sir Russell

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

      Jones, Barry (Alyn & Deeside)

      Brown, Ron (E'burgh, Leith)

      Kaufman, Rt Hon Gerald

      Bruce, Malcolm

      Kennedy, Charles

      Buchan, Norman

      Kinnock, Rt Hon Neil

      Caborn, Richard

      Kirkwood, Archy

      Callaghan, Rt Hon J.

      Lambie, David

      Callaghan, Jim (Heyw'd & M)

      Leighton, Ronald

      Campbell, Ian

      Lewis, Ron (Carlisle)

      Campbell-Savours, Dale

      Litherland, Robert

      Canavan, Dennis

      Livsey, Richard

      Carlile, Alexander (Montg'y)

      Lloyd, Tony (Stretford)

      Cartwright, John

      Loyden, Edward

      Clark, Dr David (S Shields)

      McCartney, Hugh

      Clarke, Thomas

      McKay, Allen (Penistone)

      Clay, Robert

      MacKenzie, Rt Hon Gregor

      Clelland, David Gordon

      Maclennan, Robert

      Clwyd, Mrs Ann

      McNamara, Kevin

      Cocks, Rt Hon M. (Bristol S.)

      McTaggart, Robert

      Cohen, Harry

      McWilliam, John

      Coleman, Donald

      Madden, Max

      Conlan, Bernard

      Marek, Dr John

      Cook, Frank (Stockton North)

      Marshall, David (Shettleston)

      Cook, Robin F. (Livingston)

      Martin, Michael

      Corbett, Robin

      Mason, Rt Hon Roy

      Cox, Thomas (Tooting)

      Maxton, John

      Craigen, J. M.

      Maynard, Miss Joan

      Crowther, Stan

      Meacher, Michael

      Cunningham, Dr John

      Meadowcroft, Michael

      Dalyell, Tam

      Michie, William

      Davies, Ronald (Caerphilly)

      Mikardo, Ian

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

      Millen, Rt Hon Bruce

      Deakins, Eric

      Miller, Dr M. S. (E Kilbride)

      Dewar, Donald

      Mitchell, Austin (G't Grimsby)

      Dixon, Donald

      Morris, Rt Hon A. (W'shawe)

      Dobson, Frank

      Morris, Rt Hon J. (Aberavon)

      Dormand, Jack

      Nellist, David

      Dubs, Alfred

      Oakes, Rt Hon Gordon

      Dunwoody, Hon Mrs G.

      O'Brien, William

      Eadie, Alex

      O'Neill, Martin

      Eastham, Ken

      Orme, Rt Hon Stanley

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

      Owen, Rt Hon Dr David

      Evans, John (St. Helens N)

      Park, George

      Fatchett, Derek

      Parry, Robert

      Faulds, Andrew

      Patchett, Terry

      Field, Frank (Birkenhead)

      Pavitt, Laurie

      Fields, T. (L'pool Broad Gn)

      Pendry, Tom

      Flannery, Martin

      Penhaligon, David

      Foot, Rt Hon Michael

      Pike, Peter

      Forrester, John

      Powell, Raymond (Ogmore)

      Foster, Derek

      Prescott, John

      Foulkes, George

      Radice, Giles

      Fraser, J. (Norwood)

      Randall, Stuart

      Freeson, Rt Hon Reginald

      Redmond, Martin.

      353

      Rees, Rt Hon M. (Leeds S)

      Straw, Jack

      Richardson, Ms Jo

      Thomas, Dafydd (Merioneth)

      Roberts, Allan (Bootle)

      Thompson, J. (Wansbeck)

      Robertson, George

      Thorne, Stan (Preston)

      Rogers, Allan

      Tinn, James

      Ross, Stephen (Isle of Wight)

      Torney, Tom

      Rowlands, Ted

      Wainwright, R.

      Ryman, John

      Wallace, James

      Sedgemore, Brian

      Wareing, Robert

      Sheerman, Barry

      Weetch, Ken

      Sheldon, Rt Hon R.

      Welsh, Michael

      Shore, Rt Hon Peter

      White, James

      Short, Ms Clare (Ladywood)

      Williams, Rt Hon A.

      Short, Mrs R.(W'hampt'n NE)

      Winnick, David

      Silkin, Rt Hon J.

      Woodall, Alec

      Skinner, Dennis

      Wrigglesworth, Ian

      Soley, Clive

      Steel, Rt Hon David

      Tellers for the Ayes:

      Stott, Roger

      Mr. Lawrence Cunliffe and

      Strang, Gavin

      Mr. Mark Fisher.

      NOES

      Adley, Robert

      Cormack, Patrick

      Aitken, Jonathan

      Cranborne, Viscount

      Alexander, Richard

      Crouch, David

      Amess, David

      Currie, Mrs Edwina

      Ancram, Michael

      Dicks, Terry

      Arnold, Tom

      Dorrell, Stephen

      Ashby, David

      Douglas-Hamilton, Lord J.

      Aspinwall, Jack

      Dover, Den

      Atkins, Rt Hon Sir H.

      du Cann, Rt Hon Sir Edward

      Atkins, Robert (South Ribble)

      Dykes, Hugh

      Atkinson, David (B'm'th E)

      Emery, Sir Peter

      Baker, Nicholas (Dorset N)

      Evennett, David

      Baldry, Tony

      Eyre, Sir Reginald

      Banks, Robert (Harrogate)

      Fallon, Michael

      Bellingham, Henry

      Favell, Anthony

      Bendall, Vivian

      Fenner, Mrs Peggy

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

      Fletcher, Alexander

      Benyon, William

      Forman, Nigel

      Best, Keith

      Forsyth, Michael (Stirling)

      Bevan, David Gilroy

      Forth, Eric

      Biffen, Rt Hon John

      Fowler, Rt Hon Norman

      Biggs-Davison, Sir John

      Franks, Cecil

      Body, Sir Richard

      Fraser, Peter (Angus East)

      Bonsor, Sir Nicholas

      Freeman, Roger

      Boscawen, Hon Robert

      Fry, Peter

      Bottomley, Mrs Virginia

      Gale, Roger

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

      Galley, Roy

      Bowden, Gerald (Dulwich)

      Gardiner, George (Reigate)

      Braine, Rt Hon Sir Bernard

      Gardner, Sir Edward (Fylde)

      Bright, Graham

      Garel-Jones, Tristan

      Brinton, Tim

      Goodlad, Alastair

      Brooke, Hon Peter

      Gow, Ian

      Brown, M. (Brigg & Cl'thpes)

      Gower, Sir Raymond

      Bruinvels, Peter

      Grant, Sir Anthony

      Bryan, Sir Paul

      Gregory, Conal

      Buchanan-Smith, Rt Hon A.

      Griffiths, Sir Eldon

      Buck, Sir Antony

      Griffiths, Peter (Portsm'th N)

      Bulmer, Esmond

      Grist, Ian

      Burt, Alistair

      Ground, Patrick

      Butcher, John

      Grylls, Michael

      Butler, Rt Hon Sir Adam

      Hamilton, Hon A. (Epsom)

      Carlisle, John (Luton N)

      Hamilton, Neil (Tatton)

      Carlisle, Kenneth (Lincoln)

      Hampson, Dr Keith

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

      Hanley, Jeremy

      Carttiss, Michael

      Hannam, John

      Cash, William

      Harris, David

      Chalker, Mrs Lynda

      Harvey, Robert

      Channon, Rt Hon Paul

      Haselhurst, Alan

      Chapman, Sydney

      Hawkins, C. (High Peak)

      Chope, Christopher

      Hawkins, Sir Paul (N'folk SW)

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

      Hayes, J.

      Clark, Sir W. (Croydon S)

      Hayhoe, Rt Hon Barney

      Clarke, Rt Hon K. (Rushcliffe)

      Hayward, Robert

      Cockeram, Eric

      Heathcoat-Amory, David

      Colvin, Michael

      Henderson, Barry

      Conway, Derek

      Heseltine, Rt Hon Michael

      Coombs, Simon

      Hickmet, Richard

      Cope, John

      Hicks, Robert

      354

      Higgins, Rt Hon Terence L.

      Needham, Richard

      Hill, James

      Newton, Tony

      Hogg, Hon Douglas (Gr'th'm)

      Nicholls, Patrick

      Holland, Sir Philip (Gedling)

      Norris, Steven

      Holt, Richard

      Oppenheim, Phillip

      Hordern, Sir Peter

      Osborn, Sir John

      Howard, Michael

      Ottaway, Richard

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

      Page, Sir John (Harrow W)

      Howarth, Gerald (Cannock)

      Page, Richard (Herts SW)

      Howell, Rt Hon D. (G'ldford)

      Parkinson, Rt Hon Cecil

      Howell, Ralph (Norfolk, N)

      Parris, Matthew

      Hubbard-Miles, Peter

      Patten, Christopher (Bath)

      Hunt, David (Wirral, W)

      Patten, J. (Oxf W & Abdgn)

      Hunt, John (Ravensbourne)

      Pawsey, James

      Irving, Charles

      Peacock, Mrs Elizabeth

      Jessel, Toby

      Pollock, Alexander

      Jones, Robert (Herts W)

      Porter, Barry

      Jopling, Rt Hon Michael

      Powell, William (Corby)

      Joseph, Rt Hon Sir Keith

      Powley, John

      Kellett-Bowman, Mrs Elaine

      Prentice, Rt Hon Reg

      Kershaw, Sir Anthony

      Proctor, K. Harvey

      Key, Robert

      Pym, Rt Hon Francis

      King, Roger (B'ham N'field)

      Rathbone, Tim

      King, Rt Hon Tom

      Rees, Rt Hon Peter (Dover)

      Knight, Greg (Derby N)

      Rhodes James, Robert

      Knight, Dame Jill (Edgbaston)

      Rhys Williams, Sir Brandon

      Knowles, Michael

      Ridley, Rt Hon Nicholas

      Knox, David

      Ridsdale, Sir Julian

      Lamont, Norman

      Rifkind, Rt Hon Malcolm

      Lang, Ian

      Roe, Mrs Marion

      Lawler, Geoffrey

      Rossi, Sir Hugh

      Lawrence, Ivan

      Rowe, Andrew

      Lee, John (Pendle)

      Rumbold, Mrs Angela

      Leigh, Edward (Gainsbor'gh)

      Ryder, Richard

      Lennox-Boyd, Hon Mark

      Sainsbury, Hon Timothy

      Lester, Jim

      Sayeed, Jonathan

      Lewis, Sir Kenneth (Stamf'd)

      Shaw, Giles (Pudsey)

      Lightbown, David

      Shepherd, Colin (Hereford)

      Lloyd, Peter (Fareham)

      Sims, Roger

      Lord, Michael

      Skeet, Sir Trevor

      Luce, Rt Hon Richard

      Smith, Sir Dudley (Warwick)

      Lyell, Nicholas

      Soames, Hon Nicholas

      McCrindle, Robert

      Spence, John

      McCurley, Mrs Anna

      Spencer, Derek

      Macfarlane, Neil

      Squire, Robin

      MacGregor, Rt Hon John

      Stanbrook, Ivor

      MacKay, Andrew (Berkshire)

      Steen, Anthony

      MacKay, John (Argyll & Bute)

      Stern, Michael

      Maclean, David John

      Stevens, Lewis (Nuneaton)

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

      Stokes, John

      Madel, David

      Taylor, John (Solihull)

      Major, John

      Thompson, Donald (Calder V)

      Malins, Humfrey

      Thurnham, Peter

      Malone, Gerald

      Townend, John (Bridlington)

      Maples, John

      Townsend, Cyril D. (B'heath)

      Marland, Paul

      Twinn, Dr Ian

      Marlow, Antony

      Viggers, Peter

      Marshall, Michael (Arundel)

      Wakeham, Rt Hon John

      Mather, Carol

      Waldegrave, Hon William

      Maude, Hon Francis

      Walker, Bill (T'side N)

      Mawhinney, Dr Brian

      Warren, Kenneth

      Maxwell-Hyslop, Robin

      Watson, John

      Meyer, Sir Anthony

      Watts, John

      Miller, Hal (B'grove)

      Wiggin, Jerry

      Mills, Iain (Meriden)

      Winterton, Nicholas

      Mitchell, David (Hants NW)

      Wood, Timothy

      Monro, Sir Hector

      Yeo, Tim

      Montgomery, Sir Fergus

      Morris, M. (N'hampton, S)

      Tellers for the Noes:

      Moynihan, Hon C.

      Mr. Tony Durant and

      Mudd, David

      Mr. Michael Neubert.

      Neale, Gerrard

      Question accordingly negatived.
      Mr. David Winnick: On a point of order, Mr. Speaker.
      I am sorry to raise this matter again, but I have just been notified—I do not know whether the information is

      355
      correct but I am told that it is—the Prime Minister is giving an extensive briefing to the Lobby regarding the matter on which we asked for a statement today. I know that you, Mr. Speaker, hold no responsibility for statements, but is it right that, when we have asked for a statement to be given to the House regarding the Westland affair which has been widely reported in the press, the Prime Minister should give a briefing to the Lobby at 7.15? The House has not been given any information. If the argument from No. 10 is that there will be a statement from the Prime Minister—which is likely to be the case—it will mean that we shall have a statement after the Lobby has been notified at 7.15 today. The briefing will be widely reported on radio and television and it will appear in tomorrow morning's newspapers. That is quite wrong. The Prime Minister is yet again showing her contempt for this House.
      Mr. Speaker: The hon. Gentleman must not seek an opinion from me on these matters other than to say, and I repeat yet again, that I believe it is always right that this House should have first information on these matters.
      Mr. Winnick: On a further point of order. Is it possible for you at least to let No. 10 know what you have just said? The briefing is due to take place in 20 minutes. I ask that the Prime Minister should come to the House before she briefs the Lobby.
      Mr. Speaker: That is not my function. I cannot do that, but perhaps there are others who can.
      Mr. Stuart Bell: Further to that point of order, Mr. Speaker.
      It may or may not be that the Prime Minister is briefing the press. The truth is that there is to be a briefing at No. 10 on these important issues. The point that my hon. Friend has raised, with which you have agreed, is that this House is being treated rather shabbily. Things are happening behind our backs. We are all anxious to have clarification and certainty on these matters. We are not being given that opportunity; others are.
      Mr. Douglas Hogg: There has been much criticism of an impending briefing. That criticism might be wholly misplaced because the briefing may be a background briefing. Opposition Members may laugh, but they are not entitled to make assumptions about the nature of the briefing. If the briefing is simply a background briefing, there can be nothing objectionable about it.
      Mr. Speaker: The hon. Gentleman is quite right. Briefings go on every day. I have no knowledge what the briefing is about.
      Mr. Alan Williams: On a point of order, Mr. Speaker.
      In view of what the hon. Member for Grantham (Mr. Hogg) has just said, I am more alarmed than I was before. Earlier today we pressed the Leader of the House for a statement, if possible, this evening. As you will know, the House is abuzz with rumours—that the Secretary of State for Trade and Industry has been to see the Prime Minister, and that the Law Officers have issued an ultimatum concerning their own position unless certain actions are taken by the Prime Minister. In the circumstances, I do not think we can wait until tomorrow. We need a statement tonight.
      Mr. Speaker: I know nothing of these matters.
      Mr. Beith: Mr. Speaker, now that the Leader of the House is present—he came in while the exchanges were taking place—is it possible to give him an opportunity to clarify the situation? It cannot be satisfactory to you or to Members of the House that the intimation that a statement is to be made tomorrow by the Prime Minister should be gained from tapes or Ceefax, which is how I gained the information a few moments ago. In the circumstances, it would be better if the Leader of the House could tell us whether, in view of the information that is to be given to the press, the statement might be brought forward and made later tonight.
      The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Earlier this afternoon I said that the question of a statement would be a matter for consideration through the usual channels. That is exactly how the matter stands, and I have nothing to add to what I said this afternoon.
      Mr. Waldegrave: I beg to move amendment No. 4, in page 2, line 18, leave out from 'party' to end of line 20.
      Mr. Speaker: With this it will be convenient to take amendment No. 33, in page 2, leave out lines 19 and 20 and insert—
      '(b) a body whose purpose is to promote a political party'.
      Those who were in Committee on the Bill will know that one of the principal debates was on the worries of some voluntary organisations. These worries were outlined to me when I met Mr. Peter Jay of the National Council for Voluntary Organisations and some of his officials. They respected the Government's right to seek to undertake a policy of limiting the use of ratepayers' money for party political purposes. They argued that, inadvertently, we might have made great difficulties for some of the voluntary organisations which by tradition have had some support from some local authorities. This is a serious matter, and I acknowledged this in Committee.
      We have given a commitment to try to meet this problem. It is difficult to differentiate between the legitimate anxieties of the legitimate voluntary organisations and the way some local authorities have sought to set up bogus or front organisations through which to carry cut party political activities at the expense of the ratepayer.
      After discussions with the NCVO and others and having reconsidered the matter internally, we changed the original wording of clause 2(1)(b) so that it read:
      "a body whose purpose is to promote a political party".
      That was to make it quite explicit that we were not trying to prevent organisations that might occasionally put forward views that coincided with the interests of a political party, but that we were concerned with those involved with party political campaigning. That original amendment was welcomed as a step in the right direction by some others who were worried, including, to some extent, the hon. Member for Blackburn (Mr. Straw). The amendment was welcomed, for example, by the National Association of Local Councils, which wrote on 8 January to an official in my Department. I shall of course make the letter available to anybody who is interested to see it. It said:
      "The undertaking given by Mr. Waldegrave in his speech to the Standing Committee to look again at Clause 2(1)(b) of the Bill meets this Association's points on Clause 2 of the Bill. If the Bill were amended in some such way as the form of words indicated by Mr. Waldegrave I believe that the difficulties we foresaw for parish and community councils on Clause 2 of the Bill would disappear."

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      I have thought about this matter further. It is never wise to stand too firmly on the drafting ideas that one produces quickly in Committee to try to meet an anxiety—these matters should be considered coolly. I have concluded that it would be better law, clearer and would in no way diminish the real purpose of the law if we removed clause 2(1)(b) altogether. We have here a Morton's fork. Either clause 2(1)(b) has substance, in which case I am advised that the courts will be likely to construe it as delimiting rather than widening the effect of clause 2(1)(a), or it has not. It is possible that clause 2(1) would be construed in such a way as to give some effect to clause 2(1)(b) but there is a danger that, to give effect to clause 2(1)(a), they would have to take a narrower view of clause 2(1)(a) if real meaning is attached to clause 2(1)(b). If, however, clause 2(1)(b) does not bite, it does not bite and the legislation would be cleaner without it.
      After thinking about the matter very carefully, I have concluded that it helps some of the anxieties and makes cleaner and clearer law to delete clause 2(1)(b). I shall ignore the argument about the rubric of clause 2(1), for which I had hoped to persuade some that we had a strong case, but without clause 2(1)(b), it would read:
      "A local authority shall not publish any material which, in whole or in part, appears to be designated to affect, or can reasonably be regarded as likely to affect, public support for—
      (a) a political party".
      I know that some of my hon. Friends are worried about front organisations. I draw their attention to clause 2(3), which states clearly that local authorities cannot do party political things or fund anyone else to do what they cannot do themselves. I have had legal advice which I greatly respect on this matter and I am assured that the intention that we are carrying through here is carried through by the combination of the new clause 2(1) with 2(3).
      I am grateful to my hon. Friends for their support of my newly formulated 2(1)(b), in one sense because I drafted it, but the danger is that we shall thereby narrow the Bill as there will be tremendous arguments in the courts about what the purpose of a body is. It is much clearer to leave the intention of the Bill on the face of the Bill by deleting clause 2(1)(b), the result of which is to remove any hint of narrowing such as I have mentioned. Clause 2(1)(a) will then have its full and natural scope. We are left with a clear statement of general principle, which I argue is better law.
      Mr. Michael Forsyth: I am grateful for this opportunity to speak to amendment No. 33, which another eight of my hon. Friends who were members of the Committee support. I was also grateful to my hon. Friend the Minister for explaining the change with regard to clause 2(1)(b), but I am still puzzled. In Committee, on 12 December, he said:
      "The definition in clause 2(1)(b) goes too wide although it was not intended to do so. I do not have an amendment to put to the Committee, I have only a form of words."
      The form of words is that which appears as amendment No. 33. In justification to the original clause 2(1)(b)—
      "a body whose purpose is to promote a political party"—
      my hon. Friend the Minister said:
      "That aims more directly and with a more effective shaft at the front organisation, which although it may be disguised as a general research committee for housing in the wider world or whatever, is an organisation for the promotion of the Liberal party, the Labour party or the Conservative party. It is an
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      important matter to get right and I hope that some of the worries that were voiced this evening have been dissolved."—[Official Report, Standing Committee A, 12 December 1985; c. 275-76.]
      I agree that it is extremely important that we get this right. There is a danger that, far from the clause being weakened by the inclusion of an alternative clause 2(1)(b), which is what amendment No. 33 would be, it would be weakened by not having anything at all. If, for example, a housing organisation called the Stirling housing action group was set up in my constituency, funded by the local authority, established by the chairman and officers of the local Labour party and explicitly determined to promote the policies of the Labour party and to highlight what they believed to be the deficiencies of Government policy, I would find it much easier to argue in court that their literature was designed to affect, or could reasonably be regarded as likely to affect, public support for a body whose purpose was to promote a political party than I would find it to argue that such a body could be reasonably regarded as likely to affect public support for a political party.
      In the former case I have only to demonstrate the act of putting leaflets through letter boxes or campaigning, as it can reasonably be regarded as likely to affect support for that organisation, the aim of which is to promote a political party. I would find it much more difficult to argue that putting leaflets through letter boxes could reasonably be regarded as affecting support for the Conservative party because support for the Conservative party would be determined by a range of issues—perhaps divisions in the party or other issues that have nothing whatever to do with housing. Support for the organisation, however, can be readily determined and measured.
      My hon. Friend the Minister said that there was a safety net in the form of clause 2(3) which says that a local authority cannot fund organisations that would produce such material, so we have no worries in that respect. I freely confess that I am no lawyer. Clause 2(3) says:
      "A local authority shall not give financial or other assistance to a person for the publication of material which the authority are prohibited by this section from publishing themselves."
      By removing clause 2(1)(b), we remove the prohibition on local authorities from supporting material that is published by such bodies and organisations. Should it not be the other way round? Does not removal of paragraph (b) make it easier for the local authority to fund such an organisation, by allowing the local authority to argue that the Stirling housing action group is publishing material that is designed to better the conditions of housing in Stirling? It is not publishing material that
      "can reasonably be regarded as likely to affect, public support for—
      (a) a political party"
      because that is a much wider argument. Therefore, the council could argue that it was entitled to give financial or other assistance.
      Is there not at least an argument—I appreciate that one could equally argue in the opposite direction—that without clause 2(1)(b) it will be easier for local authorities to fund such organisations and, with only clause 2(1)(a), it will be harder to stop these front organisations from campaigning in the way with which we are familiar?
      I followed the Committee proceedings carefully and I understand the difficulties of framing such legislation. However, it seems rather odd that we should have started with the view that it was essential to have clause 2(1)(b) as it was drafted, although rightly the Committee

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      recognised that it might have caught one or two others, and that my hon. Friend the Minister should have suggested to the Committee an alternative to clause 2(1)(b), but we now find that it was not necessary to have any clause 2(1)(b). That is a remarkable change in position.
      My hon. Friend the Minister told the House that voluntary bodies and other organisations gave some support to the alternative to clause 2(1)(b), which forms the text of my amendment No. 33. I can understand why, because it meets most of the points made by those voluntary organisations. My hon. Friend said that the hon. Member for Blackburn (Mr. Straw) had expressed some support. I do not have the Official Report of the Committee, but no doubt the hon. Member for Blackburn can answer for himself. However, I seem to recall him arguing in Committee that the alternative suggestion on clause 2(1)(b) was better but not good enough and that it would still limit activity.
      I use the hon. Member for Blackburn as my supporter because, if he thought that clause 2(1)(b) as it was redrafted and as it now forms the text of my amendment would have an effect, that makes my case more eloquently than I can. My hon. Friend argued that he had the support of the Opposition, but, on my recollection of the debate, that is not correct.
      I appreciate the considerable worries about the way in which the modern Labour party, the new Left, will use every conceivable loophole and breach every conceivable convention in local government to further its political ends. Therefore, it is essential that we do not operate on the basis of good faith from the Labour party in local government, but recognise it as a reason for closing every avenue. For the life of me, Morton's fork and the legal arguments notwithstanding, I cannot see that amendment No. 33 would weaken the effect of clause 2(1)(a).
      Mr. Simon Hughes: Of the two options, I welcome the Minister's rather than that of the hon. Member for Stirling (Mr. Forsyth). The House will recollect that, as has been correctly said, the Minister's first stab at redrafting in the heat of the debate is what has now appeared in amendment No. 33. The view expressed by my colleague and me on behalf of the Liberal party, by the hon. Member for Blackburn (Mr. Straw), the voluntary sections and others was that clause 2(1)(b) was one of the most dangerous and most undesirable parts of the Bill.
      7.15 pm
      I applaud the Minister for confirming that it is better not to have clause 2(1)(b) than to have a variety of it. That improves the Bill. The Minister has received representations about this, although the amendment was tabled only yesterday, and organisations have had only 24 hours in which to respond. Therefore, he will be aware that the amendment does not meet all the concerns of the voluntary bodies but it is a move in the right direction. It takes out one of my four major concerns about the Bill and returns us to the principle that we are dealing with party political influence and not with the influence of organisations around the periphery of political and electoral processes.
      I hope, as thousands outside do, that this will be the first of several such important steps to get the Bill right before it becomes law. I fear that it may not be.
      Mr. Michael Brown: I support my hon. Friend the Member for Stirling (Mr. Forsyth). We have taken as our reference point in tabling
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      the amendment the proceedings in Committee and the speech of my hon. Friend the Minister there. I am referring to the seventh sitting of the Committee on Thursday. 12 December, part I, cols. 275 and 276. The Committee acknowledged that the Minister was in some difficulty with regard to the scope of the original wording of the clause, and there was discussion from both sides of the Committee. I take the point made by my hon. Friend the Minister both in Committee and today that he felt that he was not bound by the words that he was drafting on the spot. Nevertheless, he went on to say that whatever happened, although he was not committed to the words of the amendment exactly, he would not move away from their "intent or common-sense meaning". He was referring to the words of amendment No. 33.
      My hon. Friend went on to say that he felt that the amendment which he had drafted on his feet, or perhaps with some legal advice beforehand—and which we have picked up in amendment No. 33—
      "aims more directly and with a more effective shaft at the front organisation, which although it may be disguised as a general research committee for housing in the wider world or whatever, is an organisation for the promotion of the Liberal party, the Labour party or the Conservative party. It is an important matter to get right and I hope that some of the worries that were voiced this evening have been dissolved."
      Conservative Members were anxious about the whole series of debates about the amendments before my hon. Friend the Minister made his speech. He dissolved our worries by his alternative suggestion, and he said that he hoped that the Opposition would withdraw their series of amendments
      "on the assurance of the form of words that I have given today".—[Official Report, Standing Committee A, 12 December 1985; c. 275-6.]
      That form of words has now been withdrawn completely. Somewhere along the line my hon. Friend—I impute to him the best of motives—has considered, with his legal advisers, whether, whatever the form of improved words for clause 2(1)(b), the effect would be better if it were taken out altogether. He has concluded that we would still be able to trap the organisations about which we are all concerned if that happened.
      I asked the Minister to go back to the original Bill as drafted. Some legal adviser wrote clause 2(1)(a), but decided that it would not capture some of the front organisations that the Government and the Minister are concerned about and that we needed the additional form of words for clause 2(1)(b).
      Mr. Robert Wareing: How does the hon. Gentleman know that that is what was said?
      Mr. Brown: I think that it is unlikely that words are thrown into a Bill for the sake of it. Someone considers the policy objective of the Government. Parliamentary draftsmen recognise that the Government want to deal with local authorities using public funds and ratepayers' money to promote political parties as well as with front organisations that also support political parties. One presumes that the legal advisers, having that policy objective before them, considered clause 2(1)(a) and decided that it was not strong enough, and that there must be an extra form of words. In Committee the Minister recognised the arguments from hon. Members and in letters from outside bodies, saying that clause 2(1)(b) was too wide and was trapping organisations that he did not

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      intend to trap. After taking legal advice, he returned to the drawing board and considered an alternative form of words, which I find acceptable.
      Mr. Wareing: I know that the Government are not known for conceding to outside opinion, but could it not be that on this occasion, because of the agitation of voluntary organisations which considered that clause to be too sweeping, the Minister responded positively to that pressure? That could be the reason why he wants to withdraw the subsection.
      Mr. Brown: Yes, of course. In Committee my hon. Friend talked about a campaign which his wife was associated with. He said:
      "It would be odd if the Bill's provisions meant that if her campaign was successful she would have to desist from any further activity. I doubt whether she could convince the Labour party or the Liberal party on such a sensible matter and if she convinced only the Government she might be in danger".
      The definition of clause 2(1)(b) is too wide, although that was not intended. The Minister accepted the point of the hon. Member for Liverpool, West Derby (Mr. Wareing) and the representations that were made at the time of the Committee. He then said:
      "I do not have an amendment to put to the Committee. I have only a form of words. Although I have discussed it with my legal advisers, I want to make sure that it is correct. I am not committed to these words exactly."
      That implies that some form of words would be brought before us, not a complete removal of the words. The Minister went on to say:
      "I will not move away from their intent or common-sense meaning." — [Official Report, Standing Committee A, 12 December 1985, c. 275.]
      A complete withdrawal of clause 2(1)(b) without an alternative form of words means that the Minister is moving away from their common-sense meaning. For those reasons, I support the amendment.
      Mr. Christopher Chope: I also support amendment No. 33, and I thank you, Mr. Deputy Speaker, for selecting it, notwithstanding the fact that it is starred. In Committee, on 12 December 1985, the Minister clearly analysed the problems with which the Committee had to deal. He said:
      "I shall recap the tripartite structure of the argument against the abuses that we believe exist. First, we had to stop local authorities publishing material that might affect a political party—clause 2(1)(a). Secondly—clause 2(3)—we had to stop local authorities giving money to other bodies to do what the councils were not allowed to do themselves. Thirdly, we had to prevent an intermediate phenomenon: a publication in support of—or, presumably to damage—what might be called in common sense language a front organisation that may dress itself up as a campaigning organisation, but is not one. Such an organisation may trade on the high prestige of a great voluntary organisation, but is not one itself."
      By supporting the removal of clause 2(1)(b) the Government are going back on dealing with two of the three problems. We shall not deal effectively with the problem of the front organisations, which everybody has agreed must be dealt with. I do not think anyone is in any doubt about how far Socialist-controlled local authorities are prepared to go to bend the law and avoid the legal consequences, but perhaps I can quote from the Southern Evening Echo regarding what happened in Southampton city council:
      "Southampton city council is to spend £200"—
      Mr. Bill Michie: £200?
      Mr. Chope: Every penny counts in Southampton.
      "Southampton city council is to spend £200 on publicising the fact that it wants to raise £200."
      The council is banned from directly donating money to the War on Want Women in Nicaragua Appeal. The article states that
      "it may only incur expenses for people living in its own area. It had wanted the £200 to buy recycled paper for the appeal.
      Now it has found a way round the ban. £200 will instead be spent on publicising the fact that a container is to be sited in the Civic Centre entrance hall for the collection of writing materials to send to the impoverished Latin American country."
      That is an example of the way in which local authorities under Socialist control will go to any lengths to spend ratepayers' money on their particular pet causes instead of leaving ratepayers to decide whether they want to make donations to such causes.
      When dealing with some of the other concerns expressed in Committee, the Minister, in column 290, said that the
      "proxy, indirect organisations such as those so cleverly advised by Lord Gifford, are dealt with in the Bill."
      He also said:
      "Any conference designed for party political ends, however indirectly supported by the local authority, is covered by the Bill."—[Official Report, Standing Committee A 12 December 1985; c. 274-90.]
      I hope that the Minister will assure us that those two areas will still be covered by the Bill.
      I should like to cite one example. If Southampton Now, which is a monthly magazine published at ratepayers' expense in Southampton publicising the work of the city council, was to include a full page—not an advertisement—setting out something about Militant or CND, it would not be a party political advertisement in the sense mentioned in clause 2(1)(a). In my opinion, it would be an advertisement that would be
      "likely to affect public support for … a body, cause or campaign … likely to be … identified with, a political party."
      Mr. Michie: Which one is CND identified with?
      Mr. Chope: Most people would identify CND with the Labour party and the Communist party. I know of no Conservative Member who supports CND.
      Mr. Roland Boyes: There is only one Member of Parliament on the national council of CND, to my knowledge, and he is a member of the Liberal party.
      Mr. Chope: I am prepared to discuss whether the Liberal party supports CND outside the Chamber but I shall confine my assertions to the Labour party and the Communist party.
      Mr. Michie: I want to ensure that the hon. Gentleman gets it all in perspective. I take part in CND marches and, although I try to avoid it, I occasionally see a Tory group against the bomb. I assume that is not part of the Labour party.
      Mr. Chope: In these issues it is very dangerous to believe all the slogans that one sees. Perhaps members of the Labour party or of the Communist party will carry banners saying that they are members of the Conservative party campaigning against nuclear disarmament. That has happened in the past.
      I ask my hon. Friend the Minister to assure us that the front organisations will be dealt with as effectively by the Government amendment as they would have been before.
      7.30 pm
      Mr. Straw: Coming from Wandsworth, I think that the hon. Member for Southampton, Itchen (Mr. Chope) is the last person in the House who is entitled to lecture Labour authorities on their conduct. Having looked carefully at the publicity by Southampton city council and compared it with the stuff that Wandsworth puts out at ratepayers' expense, I believe that Southampton is closer to established convention than ever Wandsworth is. The hon. Gentleman and Ministers know that Conservative Wandsworth daily breaks the conventions, using ratepayers' money. The hon. Gentleman has not once had the decency to acknowledge that that has been going on or to criticise his local authority. If ever a man practised double standards, it is the hon. Gentleman.
      The hon. Gentleman gave ludicrous examples, such as what he said about Militant. It defies imagination, particularly in view of what has happened in Southampton, but if Militant were to take space in Southampton Now, of course that would come within the ambit of clause 2, as amended.
      As for CND, as my hon. Friend the Member for Houghton and Washington (Mr. Boyes) said, it is not associated with a political party. Its members are drawn from people in a number of political parties, and from people in no political party. Whether or not the hon. Gentleman agrees with CND, it is a gross slur on that organisation to suggest that it is a party political body.
      I should like to deal with the point raised by the hon. Member for Stirling (Mr. Forsyth) because, unusually, he prayed in aid what I said in Committee. Serious concern was expressed by many voluntary organisations about the likely effect of clause 2(1)(b), which they believed was unintended and gratuitous, and arose from the concern of Ministers to hit front organisations. I do not necessarily agree with that, but I accept that that is a legitimate concern in the context of the Bill. The wording that was used went much wider than that.
      I remind the hon. Member for Stirling that the National Council for Voluntary Organisations can hardly be held up as a front organisation for anybody. Its patron is Her Majesty the Queen, its president is Sir John Hedley Greenborough KBE, its chairman is Peter Jay and its honorary treasurer is Randal Haigh. It represents a wide range of voluntary organisations, almost all of which—not even covertly—have no party political association.
      Those of us who were members of the Committee know what happened. Many people, including Conservatives and the NCVO, made representations. I am not so vain as to believe that it was hon. Members' representations that made the difference—it was the representations of voluntary organisations outside. The Minister finally accepted that the Bill was likely to have an unintended effect.
      The hon. Member for Stirling said that we regarded the wording originally proposed by the Minister in Committee as better than the wording in the Bill. That is true. Like the Minister and other hon. Members, we needed time to look at the Bill. Everybody made that point in Committee. The National Council for Voluntary Organisations wrote to me on 21 January, saying:
      "our legal advice is that the form of amendment proposed by William Waldegrave before Christmas in Committee would not be sufficient to overcome our concerns."
      The NCVO said that, having looked carefully at the effect of the clause.
      Mr. Michael Forsyth: I remind the hon. Gentleman of what he said in Committee when my hon. Friend the Minister proposed as his alternative to clause 2(1)(b) the text that is now amendment No. 33:
      "I am grateful to the Minister for taking on board the representations from the NCVO and for being so concerned about the matter. In the light of what the Minister has said, I beg to ask leave to withdraw amendment No. 17".—[Official Report, Standing Committee A, 12 December 1985; c. 275.]
      The hon. Gentleman was satisfied with the amendment as it then was and prayed in aid the NVCO. Why is he now changing his position? If my hon. Friend the Minister is right—he argues that amendment No. 33 would weaken the Bill—why is the hon. Gentleman, as a Member of the Opposition, not supporting my amendment, as his purpose in Committee was to try to weaken the Bill?
      Mr. Straw: If the hon. Gentleman survives in his seat, one day he will be in opposition. I wish him all the best when he achieves that happy position. There are many benefits of opposition, not unalloyed. When the hon. Gentleman is in opposition, he will appreciate the tactics that any Opposition have to adopt. There is no great secret. He has only to compare our amendments with the Minister's. We considered the Minister's amendment to be an improvement, but it did not meet our objections. I do not think that there is an enormous difference between what the Minister said he was thinking of in Committee and what he has now proposed. I am surprised that the matter has caused so much argument. I believe that it is better to leave the subsection out altogether because it will remove the dubiety.
      I reassure the hon. Member for Stirling, if he still has any worries, that we still regard the Bill as wholly objectionable. We have been trying to explain our objections. The clause covers anything that is published instead of expenditure, and includes words such as
      "or can reasonably be regarded as likely to affect".
      The clause will severely and gratuitously affect local authorities, which is why Conservative authorities, not the madmen in Wandsworth but decent Conservative leaders—
      Mr. Chope: One of my regrets is that I could not fulfil the obligation of representing my constituents in Southampton, Itchen as well as continuing to look after my council ward in Wandsworth. I have not been a councillor in Wandsworth for the best part of three years, but I stiff pay my rates there as I do in Southampton. I regard Wandsworth council as one of the very best in the country.
      Mr. Straw: I wish I had not given way. I have not learnt anything. I thought that the hon. Gentleman was going to complain about my description of Wandsworth councillors as madmen, but he did not demur from that at all.
      This is a thoroughly objectionable Bill. It will put decent Conservative authorities, such as Kent, led by councillor Tony Hart, in a straitjacket, whether clause 2(1)(b) is included or not. We shall continue to object to it. Conservative Members express genuine concern about front organisations. If they read subsection (3), they will. see that there is no possibility of a front organisation getting away with funding by the back door to do things that the local authority is prohibited from doing. Under the Bill local authorities will be prohibited from carrying out a great deal of publicity. No front organisation or even bona fide voluntary organisation will be allowed to do anything.
      Mr. Michael Forsyth: Does the hon. Gentleman accept the argument which has been put forward, that if the Government were to accept amendment No. 33, which I tabled, it would seriously weaken the Bill? If he accepts that, why does he not support it? Or does he, like me, think that if amendment No. 33 were accepted it would strengthen the Bill?
      Mr. Straw: Faced with that choice, we prefer amendment No. 4. In Committee we were faced with a different choice.
      Mr. Waldegrave: If we had introduced the doubt which, on having taken further advice, I believe our proposed amendment produced, it might in some circumstances have strengthened the Bill, but I was advised that in other circumstances it might have weakened it. That was the nature of the doubt. It would have meant much more complex legal arguments. I was advised that some real and imaginary cases might be construed as weakening the Bill. It was for the removal of doubt both ways that we took this course.
      Mr. Straw: I accept entirely the point the Minister is making. Our view in Committee was that the amendment, which is now amendment No. 33, would modify the Bill and bring it closer to its original purpose. Having been presented with the choice today, our view is that the effect of amendment No. 4 is to bring the Bill much closer to its original stated purpose. Since there is also legal doubt about the effect of amendment No. 33, it seems sensible, when faced with that choice—in politics one has to choose—that our choice should be amendment No. 4.
      Mr. Edward Leigh: I apologise for not being present at the beginning of the debate, but I was at a meeting of the Select Committee on Defence, which is conducting a very important inquiry.
      I support the amendment tabled by my hon. Friend the Member for Stirling (Mr. Forsyth). The Bill, if amended as my hon. Friend the Minister suggests, will not stop political publicity by local authorities, which is its purpose as set out in the long title. The Bill will merely ban councils from publishing material which is
      "designed to affect … public support for … a political party".
      Therefore, publicity which is not designed "to affect … support" will not be stopped. What constitutes a political party is undefined by the Bill. Would a single-issue campaign fighting an election, for instance, the Campaign to Abolish the GLC, which has fought GLC elections in the past, be regarded as a political party?
      Even unamended by the Minister, the Bill is too weak. It merely bans councils from publishing material which is
      "designed to affect … public support for … a political party".
      Groups like CND, whose campaign claims not to support a political party, could still receive money. The Minister's amendment will ensure that the Bill will not prevent councils giving grants to bodies which conduct campaigns and publish propaganda, even though within the terms of clause 2(1) they may not be political parties as such.
      Mr. Robert B. Jones: Can my hon. Friend give me guidance on whether a group such as Broad Left, which by its very nature comprises the adherence of a number of political parties, such as the
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      Communist party, the International Marxist Workers' League, the Labour party and so on, could be given money by a local authority and get away with it?
      7.45 pm
      Mr. Leigh: My hon. Friend has made a fair point, which leads me straight on to my next point. Of course the Broad Left may be supported.
      I have today obtained a leaked document from the GLC. You will be glad to hear, Mr. Deputy Speaker, that the GLC leaks even more than do certain Government Departments. The note is headed:
      "Note of the Voluntary Sector Forward Funding Sub-Group held on Friday 10 January 1986 at 2.30 pm in Room 136."
      Ms. Valerie Wise was in the chair. The minutes, which I am willing to show to other hon. Members, detail the GLC's plan to spend millions of pounds of public money which should rightfully be returned to ratepayers on abolition of the GLC. The minutes show that the money will be given to "umbrella" groups. We learn that there are to be 400 arts grants, 150 ethnic minority committee grants, 53 women's committee grants, and 11 extra staff are to be drafted into the arts department to write reports. Those are all Left-wing groups.
      Mr. Tony Banks: The hon. Gentleman has experience, limited though it may be, of the GLC, because he was a member at one time. It is not worthy of him to dismiss that device as a means of funding Left-wing groups. The fact is that after the abolition of the GLC a large number of arts groups and voluntary organisations, many of which he would support, will go to the wall because they will not have money to fund them. This is a practical way of trying to preserve them. It is not to propagate the views of the Labour party.
      Mr. Deputy Speaker (Sir Paul Dean): Order. The debate is getting a little wide. Remarks must be related to political parties.
      Mr. Leigh: I am grateful for the intervention of the hon. Member for Newham, North-West (Mr. Banks). I shall deal with his remarks in a moment.
      The minutes to which I was referring explain how the wording of reports is to be fiddled to bring the section 137 element of the grants down below the limit at which the Secretary of State needs to be consulted. How much is involved? My information is that it is about £70 million, although Valerie Wise says that it will be £25 million. A senior GLC officer, questioned by the Campaign Against Council Corruption, was unable to deny that the higher figure was incorrect. All we know is that the GLC has £200 million splashing about and that it intends to spend all of it before abolition.
      What has that to do with clause 2(2)(b)? Many of the groups to be funded under the operation exist purely as propaganda fronts for the purpose of promoting political parties of the Left. I do not say that of all of them, but of many of them. The hon. Member for Newham, North-West said that the money is to go to respectable organisations to tide them over after abolition. Doubtless that is the case in some instances—
      Mr. Tony Banks: In most.
      Mr. Leigh:—but what of the others? What will the Institute of Race Relations, as one of the umbrella groups, do with the cash that it receives? To which other groups will it pass the money? I see that Tony Bunyon sits on the

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      GLC sub-group which is masterminding this massive handout. He is also a member of the editorial committee of the Institute of Race Relations, a Marxist think-tank linked to the Transnational Institute, itself an acolyte of the Soviet propaganda machine.
      Millions of pounds are to be handed by the GLC to Left-wing campaigning or propaganda organisations. What is to prevent those organisations, for years after abolition, from using the cash for political publicity purposes whose only real aim is to support the political parties of the Left? Only the provisions of this slim Bill stand between the British public and the onslaught of a multi-million pound publicity blitz. I believe that the Bill will fail in its task. It should not be weakened. It should be strengthened.
      Mr. Gerald Bowden: In an intervention, my hon. Friend the Minister said that amendment No. 33 would in some ways strengthen the Bill, but in other ways weaken it. I hope that he will take the opportunity to amplify what he meant by that remark and perhaps give examples of where the Bill will be strengthened and where it will be weakened. It is not beyond the wit of parliamentary draftsmen to ensure that the weaknesses are obliterated and the strengths left isolated.
      I fear that by not enacting something in the terms of amendment No. 33 the Bill will be seriously weakened. It will leave a great gap in the law, which will allow all sorts of improper propaganda vehicles to be driven through it. My local authority, Southwark, will take every advantage of the freeway. Therefore, I add my voice briefly to urge the Minister to reconsider amendment No. 33. If the amendment is not passed, the Bill will be weakened and the ratepayers who might have expected some benefit from the Bill will he disappointed.
      Mr. David Amess: I support the views expressed by my hon. Friends. I am still not entirely clear about the Government's explanation of the amendment. Perhaps I might put to my hon. Friend the Minister a question that arises out of a speech made by my hon. Friend the Member for Stirling (Mr. Forsyth) at our Committee's 10th sitting, at column 397. In his speech my hon. Friend revealed some quite incredible matters about my constituency. My hon. Friend told us that, following the good endeavours of the Campaign Against Council Corruption, Basildon district council responded to an advertisement in Marxism Today and decided to employ a PR company called Union Communications, at a cost to the ratepayers of £150,000. The Campaign Against Council Corruption wrote to the PR company and received the following response:
      "You ask about Union Communications. Basically we are a small team of professional journalists, PR and design people who have come together to offer to trade unions and Labour local authorities a communications service that beats anything the Tories can lay their hands on. We believe we are succeeding. We have not worked as yet with any CLP's though we would be happy to do so except in so far as when we work for a local authority we invariably get involved with the CLP and help their own PR work. We have shown Basildon council, for instance, how to put 10 per cent. on the Labour vote. Inevitably the CLP was involved and we had to show them what to do."
      What I and my constituents in Basildon are worried about, following the opening remarks of the Minister, is whether the Government amendment—
      Mr. Michael Forsyth: I had forgotten about this organisation. Perhaps I could update the House on its latest antics. One of its directors was responsible for the
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      advertisement that appeared in the Daily Telegraph, calling for 70 patriotic Scots to subscribe £1,000 to the Save Gartcosh Campaign. Obviously, Union Communications is helping the Labour party in Scotland rather than in Basildon now.
      Mr. Amess: I am grateful to my hon. Friend for those remarks. Hon. Members will be aware that it was Union Communications that took those scurrilous advertisements in The House Magazine last year and printed letters by the previous Secretary of State for the Environment which were totally inaccurate. When the Minister is summing up, perhaps he would tell me whether the Government amendment will stop the sort of nonsense that my constituents in Basildon have to put up with.
      Mr. Robert B. Jones: I apologise for not being here at the beginning of the debate. Like my hon. Friend. I was in the meeting of the Select Committee on the Environment. — [AN HON. MEMBER: "About Westland?"] Many subjects are covered in the Select Committee on the Environment, but fortunately Westland is not yet one of them.
      My hon. Friend the Minister should take note of what has been said by my hon. Friend the Member for Basildon (Mr. Amess) because he talked about precisely the situation that I would expect from the well organised network of Labour councils that exchange information and techniques. The Minister need only go back to our experience following the passage of the Local Government, Planning and Land Act 1980, to the direct Labour provisions, and to the convention called together by the various Socialist authorities opposed to that legislation. He should read the remarks made at the opening of that convention. I planned to obstruct the law in every possible way, and it set its finest legal minds the task of finding loopholes in the legislation. That is precisely what happened, and the Minister and his colleagues on the Front Bench had to come back to the House on two occasions to tighten up that legislation.
      We will now experience precisely the same thing in terms of propaganda. Money will be handed out to front organisations and used for advertising to promote Left-wing causes. Various bodies, such as multi-party organisations of the Broad Left, will find a loophole in the legislation. As it stands, the legislation is far too weak to achieve the purposes which the Minister intends, and he will have to come back to the House to present more legislation. In the meantime, millions of pounds of ratepayers' money will be squandered in propping up the Labour party.
      Mr. Waldegrave: The views of my hon. Friends, and in particular of my hon. Friends from the county constituencies, must be heard with respect, because they are largely in the front line of a lot of the abuses about which the House has been hearing.
      My hon. Friend the Member for Southampton, Itchen (Mr. Chope) said that Wandsworth council came into this matter. I think that it was George III who, when told that General Wolfe was mad, said, "I wish he would bite some of my other generals". If the councillors in Wandsworth are mad, I wish that they would bite some of our other councillors. If they did so, we would not need to spend a considerable amount of time arguing about savings in low-spending councils. I should like to see what would happen

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      if the Wandsworth regime were to be imposed on some of the other allegedly low-spending councils, but I must not get into that argument.
      The nature of the tightrope that we are walking has been made evident. My hon. Friend the Member for Basildon (Mr. Amess) has to deal with an extremely odd council, a naively party political organisation in the way in which it presents itself. I suspect that a ratepayer could take it to court under the existing law in a case as blatant as that. Under the law that we are passing—[Interruption.] The matter of access to the courts worries my hon. Friends. We debated that in Committee. How the civil law works is a matter of real concern, but it is not a matter for this Bill.
      I say to my hon. Friend the Member for Dulwich (Mr. Bowden) that if we pass legislation that is inherently doubtful and has a phrase in it which legal advisers say could be construed in several different ways, it might well be construed by a court to have a certain meaning. The courts are not allowed to read our debates; they have to look at the words in front of them. They may decide that Parliament must have meant, by putting in certain words, that there was some limitation on clause 2(a). When I originally drafted the Bill, I did not believe that that is what those words meant, but I have been advised that in certain circumstances the words could mean that. In certain circumstances, they could have another meaning.
      Inherently doubtful law is bad law, and we should avoid it. As we all know, in Committee and on Report, where one is trying to put a frontier in this new area, there are bound to be difficulties. It is difficult to write law in this matter. All the front organisations referred to by my hon. Friends the Members for Hertfordshire, West (Mr. Jones) and for Stirling (Mr. Forsyth), who opened the debate, will be more straightforwardly caught by clause 2(3), which says:
      "A local authority shall not give financial or other assistance to a person"—
      a person means a body or convention, a legal person—
      "for the publication of material which the authority are prohibited by this section from publishing themselves."
      The CND point is more difficult. Let us for a moment put aside CND. There are certainly Conservative pacifists. I do not want to get into an argument about CND, which in its leadership seems to be an organisation of the Left. It is possible to imagine a group of Conservative Quakers, for example, with pacifist views. If such an organisation, or one that was wholly non-party political, put forward views about defence, it would be wrong if it were funded by local authorities.
      That is a matter of limiting the funding under the functions and comes later in the Bill, where we limit the spending. We have had some argument about this. We do not want to stop the poor little parish councils doing some sensible things, but it will limit the area of discretion of their spending on publicity to bring it much more closely into line with their functions. It would be wrong if a Labour Government came into power and abolished the nuclear deterrent. Such a Government would not do that, because the Labour party at that point would have changed its attitude about the matter. If at that time a Conservative council like Wandsworth mounted a campaign for the reintroduction of Trident, that would be wrong. It would be a wrong use of local government resources, by
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      Conservatives or anybody else. That seems to be met, not so much in this part of the Bill, but by saying that that is stepping outside the proper functions of local authorities.
      8 pm
      My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) said, not in an unpleasant way, that I had said that I would not depart from the words in the Bill, yet I had now abolished them. I defend myself by saying that the hon. Member for Blackburn (Mr. Straw) and my hon. Friend the Member for Brigg and Cleethorpes know what was going on at that moment in Committee. I had shown a willingness to make a change, which caused the hon. Member for Blackburn to withdraw various amendments. I want to put it clearly on the record that I in no way intended to trick the hon. Gentleman into withdrawing his amendments and then return with a measure which went back to the original intention. That would have been dishonourable. I did not take that as meaning that if we could achieve the objective of removing the NCVO and still get the front organisations—which I am advised we have done—I would not find other ways of doing that.
      My hon. Friend did not accuse me unkindly, but I can assure the House that I am aware that my hon. Friends would like me to go a great deal further in many respects. We cannot go a great deal further without catching all sorts of organisations that we do not want to catch, so we must find a compromise. I believe that we have found it, and I urge hon. Members to accept the amendment.
      Amendment agreed to.
      Mr. Boyes: I beg to move amendment No. 5, in page 2, line 25, after 'party', insert
      'save where such a person is a member of the authority publishing the material'.
      This is a squalid Bill or, as my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) said:
      "In almost every respect, this is a wretched Bill."
      —[Official Report, 18 November; Vol. 87, c. 57.]
      It is also an unnecessary Bill produced by a nervous but calculating and bitter group of people. The Government's policies have been exposed for what they are—cynical and destructive.
      The Bill has been produced simply because local authorities have used legal, well established and acceptable means to defend themselves and the people whom they represent. They have scored important victories in convincing people of the merit of their arguments. Local authorities have done no more than explain to their electorate the consequences to their services of the Government's actions. Major campaigns have been mounted against rate capping and the abolition of the GLC and the metropolitan counties.
      In paragraph 221, Widdicombe says:
      "Local Government has an important and well established voice on matters affecting its responsibilities. It is important at all times, but perhaps particularly in times of wide political differences, that our political system should accommodate the free expression of opposing views, and we have said that it is right for local authorities to be able to explain their view on controversial matters affecting them. In the recent context that includes issuing information about abolition and rate-capping."
      In paragraph 235 Widdicombe says:
      "Under its conventions, the government of the day is entitled to provide information about its proposed legislation and its likely effect; it seems to us only equitable that bodies affected, in this case local authorities, should have the right to provide information in reply. That way the public can be sure of being fully informed."

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      The Bill is particularly contemptible for a number of reasons but I shall mention two in particular. Local authorities have done no more than the Government do —in fact, the Government are often extremely party politically oriented in some of their publicity—except that the Government appear to have an unlimited budget for their spending on advertising.
      The Government asked Mr. Widdicombe to chair an inquiry into local authority publicity and, after he had received a substantial amount of both written and oral evidence, spent hours of deliberation and analysis and produced an interim report. In another act of political spite and vindictiveness, the Department of the Environment has ignored many of his findings and gone way beyond them in the Bill. The Widdicombe report was clearly a big disappointment for the Government, but having given the inquiry team a task to carry out, it is a disgrace to go so far beyond its findings. I shall illustrate that most vividly.
      Clause 2 identifies two points to which local authorities, and ultimately the courts, have to have special regard in deciding the legality of any publicity material. The first of those, subsubsection (2)(a), states:
      "particular regard shall be had to whether the material refers to a political party or to persons identified with a political party".
      I emphasise the words
      "or to persons identified with a political party".
      I want to examine what that means in reality and consider the difficulties that it will raise for both members and officers of local authorities.
      I have served on two tiers of local government and I have been a senior officer on a third tier. I am quite aware that certain councillors are viewed as being particularly important both by their colleagues and by the citizens that they represent. For example, the mayor of Sunderland will be invited to literally hundreds of functions during his year in office. He will make an almost equal number of speeches, and because he is the proud holder of his position and representative of the council, he will want to praise its achievements and mention its problems. But, according to the Government, he had better not be quoted in a council publication. What nonsense.
      What if the mayor is simply photographed outside a building—a house or a small factory unit—built by the local authority for the benefit of some of its electorate and then the photograph is reproduced in the local authority newsletter, magazine or whatever? That in itself will be an offence, yet I would argue that it is correct that such pictures should be published.
      Other councillors, as well as mayors, play an important part on local authorities, either by the force of their personality or their position—for example, the leader of a council or the chairman of a major committee. When I was an assistant director of social services my department would be responsible for the building of a new resource. Under this Government building new resources, even essential ones, has become an historic event for many local authorities due to the cuts and penalties imposed on local authorities, but let us assume that a local authority has built a new resource and then got either a local councillor or the chairman of the social services committee to open it. Under the Bill it would be an offence to publish any picture of the building and the councillor opening it in the regular council publication. Having been elected by the electorate upon a Labour party ticket, such a councillor would be identified with a political party. But the electorate, as we
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      all well know, would much prefer a picture with people on it than a building alone. If anyone doubts that such pictures are much more interesting to the electorate, they need only examine the pictures in any newspaper.
      How would the courts deal with such a matter, particularly when another factor has to be taken into consideration? A person identified with a political party might be interpreted in the courts as someone so identified in the minds of the electorate. An example could be a councillor who gets substantial media coverage for his political views. What happens when that councillor gets publicity in his role as a councillor?
      There is also the case of the hard-working, efficient councillor who has no inclination for publicity, who makes his points in such a way that they are not attractive to the press. Could that councillor carry out the odd official function and have his picture in the council newsletter without that being an offence? That shows how ludicrous and ridiculous the Bill is.
      What will the position be on official reports and in particular the annual accounts of a local authority? Often the leader or appropriate chairperson will sign a foreword or an introduction to a report. That adds interest for the electorate and shows that that publication does not come from the bureaucrats but from the elected representatives. If David Blunkett from Sheffield council were to sign a report, would that be different from a report signed by the leader of a smaller council which did not make national headlines?
      Many local authorities will face these contradictions and problems. That is why the lawyers are rubbing their hands with glee. So many cases will have to be tested in the courts. The Opposition amendment will clearly exclude references to council members while retaining the ban on knocking copy against national figures. We believe that Widdicombe intended that.
      Mrs. Rumbold: First, rather cheekily for someone who has so recently come to the Dispatch Box, I congratulate the hon. Member for Houghton and Washington (Mr. Boyes) on his first appearance there.
      The Bill in no sense tries to stifle the right and proper work done by local or national politicians. It does not ignore the fact that local government has politicians in the same sense as Parliament. Therefore, when the Government examined the provisions, we took particular care on the nature of publicity and how and whether publicity should be prohibited. We examined the definitions of how and whether that would occur. We also looked at the content of the Bill. As I said earlier, the content of the publicity is the acid test of whether or not it will come within the Bill.
      The examples mentioned by the hon. Member for Houghton and Washington were effectively countered by my hon. Friend the Minister for Environment, Countryside and Local Government when he showed how the Labour-controlled authority in his constituency could produce an annual report signed by the leader of Bristol city council. That report contained references to what the city council had achieved and mentioned in the accounts that the city council could not, because of Government contraints, carry out the policies that it would have preferred. My hon. Friend was not saying that those were not proper and sensible references to the local authority's work and its function.

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      I can say without fear or favour that it is acceptable that a member of a local authority should have his name on a document —as the leader of Bristol council had —provided that he is not publishing material which could be interpreted under the Bill as designed to canvas support for a political party.
      In the same way, I do not believe that, under the Bill, politicians in local government or in Parliament, when speaking on their own behalf, can be caught under the Bill. An individual member of a local authority might be caught under the Bill if he was speaking on behalf of the local authority in a material sense and was likely to be reported in published material making points that could be interpreted as politically persuasive.
      On every test that can fairly be used on the Bill, the amendment is unnecessary. I therefore ask the House to reject it.
      Amendment negatived.
      8.15 pm
      Mr. Squire: I beg to move amendment No. 7, in page 2, line 32, at end insert—
      '(4) Nothing in this Act shall prohibit a local authority from publicising any provision service or facility made by the authority provided that—

      (a) any such publicity shall refer only to the relevant provision service or facility as being policies of the authority itself and shall not describe them as the policies of any group or party that may make up the authority wholly or partly and,

      (b) the authority takes all reasonable steps to ensure that any such publicity is presented in such a way as to promote the authority itself and not any political party. (5) Subject to the provisos in subsection (4) above a local authority may publicise any provision service or facility made by any other authority responsible for its area and the provisos in subsection (4) shall be construed accordingly.'.

      We happy but small band of brothers and one sister have been sitting here for nearly five hours and have heard a succession of amendments whose starting point is the belief that the Bill as currently drawn is not sufficiently clear and will provide a veritable lawyers' paradise. As hon. Members know, the joint submission from the three local authority associations specifically says that clause 2
      "is so imprecise, with so many words and expressions needing subjective evaluation, that it looks like a charter for extensive litigation."
      I share those fears and the purpose of the amendment is to try to clarify the clause.
      We will all be aware now that the overall aim of clause 2 is to stop councils spending ratepayers' money on party political propaganda, either directly or by front organisations. I fear that, as drafted, the clause will stop a number of other activities which hon. Members would want to continue.
      For the benefit of my many hon. Friends present, I give the example of a Conservative council which may wish to encourage tenants to buy their houses under section 41 of the Housing Act 1980. Under that Act, councils are obliged to publish information explaining the right to buy in simple terms. The Bill would not prohibit that, but a council may decide upon an active policy of encouraging tenants to exercise their right to buy. Obviously such a policy could be effective only if it was publicised as a policy to encourage tenants to buy. Such a policy would be pointless if the tenants did not know about it. The
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      council would have to publicise the policy and the publicity for the benefits of the right to buy or of owner-occupation might
      "be regarded as likely to affect, public support for—

      (a) a political party".

      That might happen under clause 2(1). The opposition might therefore be able to prevent publication of that policy.
      If a Labour council adopted an extensive community grant giving policy—whether one agrees with that or not—that would be the policy of the council and the people's redress would, as ever, be via the ballot box. As long as the policy was in operation, the council might be prevented from publicising it. Yet as long as that was council policy, it is clearly preferable that it is publicised as such. It is preferable because the more the electorate know about such a policy, the better can they hold councillors accountable at the next election. If the policy is not publicised, that can only benefit those in the know. The only beneficiaries will be those organisations connected with the council or councillors. The public will not know of such a policy and will be unable to take advantage of it by applying for grant.
      The Bill will have the opposite effect to what the Government intend. The front organisations, so to speak, will be aware of the policy, whereas the public will not. If a council has a policy, it is desirable that the public should be aware of it.
      I give a further example—hon. Members will rapidly understand why I suggest it. Local government elections in London are due in May. A party—it does not matter which—may decide that if it wins the election it will promote an open government public participation policy which goes beyond the requirements of my Local Government (Access to Information) Act 1985. For example, it may wish to extend the Act to working parties or adopt Leeds standing order 65 which grants access to any document, not just agenda items, and it may wish to grant the public speaking and questioning rights. If the opposing party disagrees strongly, the issue becomes an election issue. If the party that wants to introduce such policies wins the election, it could introduce the policies, but could it publish them? If the Bill, as drafted, becomes law, I doubt it.
      Clause 2(1)(a) prohibits the publication of any material which
      "can reasonably be regarded as likely to affect, public support for—

      (a) a political party".

      The council would have an open government public participation policy that it could not publicise.
      I have given those three examples. I shall not give more, although I am sure that other hon. Members could give further examples. The Bill catches things that it should not catch, and, I suspect, was never designed to catch.
      The amendment would avoid that difficulty and allow councils to publicise their services and amenities without mentioning any political party. The publicity could say, for example, "Bromley council urges all tenants to take up their right to buy for the following reasons," or, "Lewisham council has a community grant scheme which we urge all local organisations to read carefully to see whether they are eligible." The council could use ratepayers' money to publicise only its policy. It would be up to the parties to use their time and money to point out

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      that those policies were the policies of a Labour or a Conservative-controlled council. That is the reasonable split for which we should be aiming in the legislation.
      I shall deal briefly with my proposed new subsection (5). Anxiety has been expressed that a further consequence of the Bill as drafted is that it would prevent local authorities corporately, or their members individually, from com menting upon matters of legitimate public interest or promoting new methods on matters where the authority is not the responsible authority. Alcohol and drug abuse are examples that spring to mind. I can well understand that many local authorities might wish to play a considerable part in any campaign on those matters, to issue public comment and to assist the county council's policy. It is the county council which is responsible for health matters. The campaign would fail if district authorities were unable to take part in any such campaign.
      Similarly, it might be difficult, under the Bill's present wording, for local authorities to promote crime prevention measures because responsibility for such matters does not lie with them. My hon. Friend the Under-Secretary has spoken to me on these subjects and I know that we agree about much of the Bill. If there is some drafting error in my amendment—like all hon. Members, I stand to have my drafting corrected—I hope that my hon. Friend will none the less accept the thrust of what I say and agree that it will be possible to pursue the matter in another place.
      Mr. Straw: I beg to move, as an amendment to the proposed amendment, at end add—
      '(6) Subsections (4) and (5) above apply to publicity material issued by a voluntary organisation where the publicity is issued—

      (a) with the use of financial or other assistance given to the voluntary organisation by a local authority; and

      (b) the publicity is issued in pursuance of the aims and objectives of the voluntary organisation.'.

      The Opposition agree with almost everything that the hon. Member for Hornchurch (Mr. Squire) said. I hope that that does not undermine a fine career. He has always spoken up for local authorities and for freedom of speech. We congratulate him on the freedom award that he won recently. The hon. Gentleman made an important point. I hope that the Minister will treat it with the seriousness that it deserves, notwithstanding the fact that we support it.
      The amendment brings voluntary organisations within the ambit of clause 2(4) and (5). We have spent considerable time discussing voluntary organisations, and I do not need to stress again their importance to local communities. They are legitimately funded by local authorities. We believe that local authorities should not be prohibited from publicising their services and that voluntary organisations should be included in that provision.
      I hope that the Minister will treat the matter seriously and not say that the amendment is unnecessary. Ministers should realise that anxieties are felt on both sides of the political divide about the operation of the Bill as drafted. If the amendment were accepted, it would go a long way to removing those anxieties. If the Minister cannot accept the amendment, will she consider and raise the matter in another place?
      Sir Kenneth Lewis: I am interested in the Bill and I support the amendment moved by my hon. Friend the Member for Hornchurch (Mr. Squire). I do not know what my hon. Friend the Under-Secretary will say. I hope that
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      she will make some sympathetic noises in favour of the amendment. As with all amendments that come from the Back Benches, it is easy for Ministers to say that an amendment is not properly drafted. I have no doubt that my hon. Friend the Member for Hornchurch accepts that that possibility exists. If that is the case, my hon. Friend could obtain some help and perhaps have the matter dealt with in another place.
      I favour the amendment because I believe that local government must publicise what it does, whichever party is in office, because if it is doing something good it is worth telling the public. One party may publicise an activity that it supports. I see no point in that support being hidden under a cloak. It is as well to tell the electorate about it. I also believe that it is fair to those who work on a programme that the electorate should know about it. If the activity is opposed by the other party, the fact that it has been publicised will mean that the opposition will also obtain some publicity.
      I should hate to see anything in the Bill which would put a blanket over the ability of local authorities to inform electors and others in an area who are affected by local services. The Bill would then result in overkill.
      Some people—not perhaps my hon. Friends on the Front Bench—might say that the trouble is that what we are out to stop is the publicising of the most crazy things that happen in local government from time to time and that have happened rather more frequently in the past year or two, where those in charge of councils go berserk, spend money on things that the public would never support, and do so without giving any advance notice of their intentions. To me, that is all the more reason why these plans should be publicised.
      8.30 pm
      I do not believe that publicity for crazy programmes of one sort or another is of benefit to whichever political party indulges in it. I have an idea that had we not done away with the GLC, the electors would have done away with it, simply because they were fed up with the publicising of so many crazy activities which had cost them money. They would have refused to support such nonsense any longer.
      Even if the amendment is not exactly word perfect, we ought to accept the spirit of it. I hope that my hon. Friend will be able to make sympathetic noises in favour of it.
      Mrs. Rumbold: I understand and appreciate the concern that led my hon. Friend the Member for Hornchurch (Mr. Squire) to put down the amendment. I would do him no injustice if I said that his concern sprang from a very real knowledge, acquired over many years, of work in local government and so arose from his practical experience and his anxiety to ensure that in bringing the Bill before the House we draw up legislation which does not inadvertently act contrary to good practice in local government. His intentions are good.
      In moving the amendment, my hon. Friend gave a number of examples with which I should like to deal. He asked us to suppose that it was Government policy, as indeed it is, to allow council tenants to purchase their houses. How, he asked, would a local authority tell its electors that such a policy existed? What about the efforts made by the council to inform the electorate of tenants' rights to purchase council-owned property under a Government policy which the council itself had adopted? Provided that the information is couched in terms which are straightforwardly advisory and informative, setting out

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      clearly the rights of individual tenants as dictated by Government policy and adopted by the local authority, and provided that that information contains nothing that is offensive under the Bill, it is absolutely right that those people should be informed of their rights. It would not be contrary to the intention of the Bill for the local authority to make available in libraries or elsewhere such information as part of its policy, and to use this way of informing the electorate of the rights of council tenants.
      Mr. Squire: I am grateful for what my hon. Friend has just said. My concern is that what she has said so far implies a whole series of decisions which will require a council ultimately to guess whether court action will follow. My amendment tries to lay down that, in broad terms, provided the authority makes no mention—in the particular example about housing — of being a Conservative authority, it ought to be able to proceed in the knowledge that it will not, in all probability, face that charge.
      Mrs. Rumbold: I think I understand what my hon. Friend says. I do not believe that at present a local authority officer, when composing a notice giving tenants information about their rights, would do more than advise councillors that the best way of proceeding would be to give strictly factual information. At the present time, were a responsible local authority in charge, it is most unlikely that a responsible officer would do other than advise his council that it would be best to give such information in a strictly factual way and not embroider it with political adjectives or slogans.
      It is only because some authorities litter such information with flowery political messages that the Bill has been introduced. I do not believe that, even under present local government legislation, we would have had to introduce this Bill if it were not that some authorities have taken liberties to the extent that we have seen.
      Some time and care will have to be spent on preparing such information. Authorities which try to push information into the sphere of political propaganda will certainly and properly be advised by their officers that such action would be covered by this Bill when it is finally enacted, in the same way as officers have to advise councillors of their duty under the law in many other respects when they are taking decisions.
      Another of my hon. Friend's examples related to local authority members campaigning in an election. One party may say that it intends to have open government within the authority, if it is elected, and that there will be freedom of access for the public. Members may make that part of their campaign. Perhaps the opposition has been foolish enough to tell the electors that if opposition councillors are elected they will do exactly the opposite—that there will be no freedom of access, that everything will be done in secret and that the electorate will have no further opportunity to say a word about policy. I put that in terms of the ridiculous.
      Were the party which had campaigned on the freedom of access ticket to be subsequently elected, it would put that particular policy through the council. Its elected members would vote on it as council policy. Once it had been adopted as council policy, the council would have every right to put out information to its electorate, telling people that they were welcome to observe council
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      meetings or to attend committee meetings on such and such a date, and if they wished to inform themselves about certain matters on the council's agenda, and so on, that information could be made available. These provisions already exist in the Local Government (Access to Information) Act 1985. People can purchase council minutes if they so wish or copies of any publications put out by the council. I do not believe that there is anything in the Bill to prevent those activities from being carried out. I hope that my hon. Friend the Member for Hornchurch will accept my reassurances.
      Subsection (5) of the amendment could extend local authority publicity powers and allow local authorities to produce persuasive or informative publicity about any service or facility provided by the local authority or, as my hon. Friend pointed out, if it were a district authority, by the county council authority. My hon. Friend gave the example of publicity about a campaign mounted by a county council's social services authority, giving information about how to counter drug abuse.
      He asked whether it would be possible for the district council to assist with the distribution of such material. I believe that the material must be considered in the context of the way in which it is published, and my hon. Friend accepts that point. We would not wish to impose unreasonable restrictions on a local authority's information processes. There is a case for considering the scope of section 142, to see whether something could be done to accommodate the fear that is expressed in subsection (5) of the amendment. If that is possible, we will undertake to do so, but I would prefer not to accept the wording of my hon. Friend's amendment.
      Having spoken at some length on that part of the amendment, I should like to welcome the support of my hon. Friend the Member for Stamford and Spalding (Sir K. Lewis) for the thrust of the Bill.
      The hon. Member for Blackburn (Mr. Straw) asked us to consider the amendment to the amendment. We have discussed at length the ability of voluntary organisations to publish material which is issued in pursuance of their aims and objectives. If such material is prohibited under clause 2, it should not be published at the ratepayers' expense. I do not believe that the amendment would enhance the Bill. I ask the House not to accept the amendment.
      Mr. Squire: It is not my intention to delay the House long. There are many amendments ahead of us.
      I am grateful to my hon. Friend the Minister for her latter comments. I am glad that she will consider whether the thrust of my amendment could be introduced elsewhere. As her statement on the first part of the amendment could hardly been more clear cut, I can scarcely press for an opening there. I urge my hon. Friend to bear in mind that there are voices shouting alarm. I should be grateful if she would reconsider the matter.
      Mrs. Rumbold indicated assent.
      Mr. Squire: I am glad to see my hon. Friend nodding assent. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      8.45 pm
      Mr. Boyes: I beg to move amendment No 12, in page 2, line 35 at end insert—
      '(aa) in subsection (1) delete the words "on application".'.
      Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 32, in page 3, line 4 leave out
      'the authority' and insert
      'local government and matters affecting an authority's services within its area'.
      Mr. Boyes: I hope to detain the House only briefly. I am aware that there is an important debate to follow.
      Section 142 of the Local Government Act 1972 has basically two powers—a general publicity power, and the power on which I wish to concentrate my remarks, which is a more specific power under subsection (1). The amendment seeks to delete the words "on application" from subsection (1). Section 142(1) states:
      "the services available within the area of the authority provided either by the authority or by other authorities or by government departments or by charities and other voluntary organisations, and other information as to local government matters affecting the area."
      People must have access to such information "on application."
      The Government are making a vital and fundamental change to section 142. Local authorities' general publicity is to be restricted to
      "information relating to the functions of the authority"
      instead of
      "information on matters relating to local government."
      This vital change will have serious repercussions for local authorities, which are attempting to carry out serious policies on behalf of the people they represent. I shall give two or three relevant examples of the services carried out by local authorities which would probably be curtailed by the change.
      The clause is totally unacceptable. To invent a "Colemanballs", it is miles outside the intention of the Widdicombe report, which recommended that section 142 should be unchanged so that a local authority could continue to provide information on matters related to local government. By restricting publicity, clause 3 is directly opposed to the Widdicombe recommendations.
      The Government's proposals are not only opposed by the Opposition and the local authorities, but they are contrary to the spirit of the Widdicombe report, paragraph 134 of which states that the role of local authorities
      "goes further than the simple delivery of specific statutory services. Certainly we would not wish to take a narrow view. Local authorities can make a valuable contribution to the welfare of their area and to the development of national policies that are of direct consequence to their responsibilities."
      Paragraph 221, which I have already quoted this evening, states:
      "local government has an important and well established voice on matters affecting its responsibilities."
      Publicity campaigns, including issuing press releases against Government policies, on important issues of grave concern to local authorities and to the welfare of inhabitants would be stopped by clause 3(1).
      My constituency has very high unemployment. One person in three is out of work, and the local authority wants to encourage investment and the creation of jobs. However, as one of the functions of a local authority may not be to deal direct with economic development initiatives, there are genuine doubts whether publicity aimed at attracting industry and commerce to the area would be permitted.
      Sunderland, Seaburn and Roker and other parts have important tourist attractions. One of my greatest pleasures is to get on a train on a Thursday night or Friday morning to get out of this place and back up to a more civilised,
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      beautiful area. My colleagues in local authorities want to expand and extend their tourist industry. If it cannot be demonstrated that that is one of the authority's functions, what will be the consequences for it following the changes to section 142?
      Dover district council opposes the Channel tunnel. Clearly that is not one of its functions, but I would defend its right to explain the environmental consequences of the tunnel for the area. Indeed, I would go further. The building of the Channel tunnel will have serious repercussions for industry in my area. An area of high unemployment may become one of even higher unemployment. The consequences of the change will mean that if authorities provide information, they will contravene the Bill when it becomes law.
      Widdicombe made it clear that he wanted section 142 to be left unchanged. The Government, having asked him to consider publicity in local authorities, have found his report unacceptable, and have introduced a series of clauses well outside the spirit of the Widdicombe report.
      Dr. Keith Hampson: My amendment is related to a long discussion that we lad in Committee. It raises some important aspects with which we never got to grips. In Committee Conservative colleagues and I argued whether the word "conscience" was effective. We were worried that Campaign for Nuclear Disarmament literature and the Leeds booklet on nuclear-free zones would still be permissible under the council's provisions for an emergency planning committee, which is now renamed the peace and emergency planning committee. There is also a unit to go with it. Assuming that my hon. Friend the Minister is right in saying that such publicity would be prevented under the Bill, the clause, if it is not amended, could be too restrictive in many important ways. They have been brought to my attention by councils and the Chartered Institute of Public Finance and Accountancy.
      Regarding
      "information relating to the functions of the authority",
      what is the position of a district council that wishes to publish information, for example, on drugs? As the majority of our cities are in shire districts, could they publish information on matters such as homelessness, vandalism in the city, drug dependency, and alcohol abuse, which are not functions for non-metropolitan district councils? Fire hazards and safety matters are county matters. Could cities such as Leicester, Nottingham, Portsmouth and Southampton advertise anything about education or social services, which are county matters? So long as the words relate
      "to the functions of the authority"
      there is grave doubt whether such councils could proceed with some of their valuable campaigns.
      I would not claim that my amendment was perfect, and my hon. Friend may say that it goes back too far to the original wording. If genuine local government functions are county functions by definition but operative at district level, the local government body concerned should be able to activate campaigns and publish information about those functions. The previous wording was
      "local government matters affecting the area."
      That is broad brush, and includes almost anything that we consider in the House. I have tried to make my amendment more specific about matters that are operative within a district's area.
      My amendment refers to

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      "matters affecting an authority's services within its area."
      In Committee we did not discuss private legislation. Many councils have extended their functions by bringing to the House local private Acts. That needs to be examined. I hope that my hon. Friend can make the position clear regarding authorities that have powers under such Acts which enable them to provide services not covered by the general law—in other words, not within the scope of their normal functions.
      Although I have always argued for the wording to be tough and tight to prevent publicity on CND matters and nuclear-free zones, I have become convinced that the clause may exclude some areas where services are involved which are not at present among the functions laid down by general legislation.
      Mr. Simon HughesI ask the Minister to look positively at both amendments. They deal with a substantial criticism of one of the new elements introduced by the Government. The points have been put simply, and I wish to reaffirm the strength of the view of those affected that there is no need to tamper with section 142 of the 1972 Act.
      Amendment No. 12 provides the only method left to us to ensure that section 142 remains as close as possible to what it had been. As the hon. Member for Leeds, North-West (Dr. Hampson) said, the purpose of section 142 is to make sure that publicity can be given to matters that are relevant to the administration of local government in any particular area. A good example is the statement on the Channel fixed link. Clearly, the Bill will have nothing to do with the powers of local district councils or the Kent county council, but there is substantial interest in it because it will affect the functions of all the county councils. What happens will affect transport and housing functions, and the like. I respect the honest intent behind both the amendments to find a way to meet some of the Government's concerns. I share the concern about section 142. I want to ensure that we allow publicity on matters affecting Government services.
      It is ludicrous to imagine that local authorities exist only to perform a limited set function and to say nothing about anything else. They are there as the sole responsible elected agencies and authorities to speak for local interests, the local area and local needs.
      Mr. Madden: That is why the Government do not like them.
      Mr. Hughes: Often, when Government do not take sufficient account of local needs, local authorities have to make more noise. The more the Government ignore them, the more noise is made. It is only now that the Government have decided that they cannot any longer tolerate this series of criticisms. That says nothing about local authorities, which vary in political colour and control. It says something about the deafness of central Government to local authorities.
      I ask the Government to stick with Widdicombe, to stand by the result of the interim report and to wait for the later, fuller report, if they want to go further, but certainly not substantially to restrict the effect of the good and well-functioning section 142, about which there is no substantial complaint. Both amendments should be accepted by the Government.
      Mr. Roy Galley: My hon. Friend the Member for Leeds, North-West (Dr. Hampson) made some valid points, and I should like to support him, perhaps from a slightly different standpoint. Substitution of "services" for "functions" and the other parts of his amendment may assist in the interpretation of the Bill. It may well cut both ways, but substitution of that word may alleviate fears on both sides of the House.
      We need to go a little further. Will the use of the word "functions" in this part of the Bill clearly prevent local authorities from diverting public money to the Campaign for Nuclear Disarmament and other such bodies? My hon. Friend the Minister of State said in the debate on clause 2(1)(b) that we must make clear law. He suggested that the concerns raised earlier during that debate would be dealt with when we consider those parts of the Bill relating to "functions."
      It is clear from the Bill as it stands that use of the word "functions" will prohibit expenditure by local authorities on foreign affairs, on defence matters and on support for one-sided nuclear disarmament and for strikes. Sheffield city council doled out considerable amounts of money to support striking miners. The Bill as it stands might not prohibit local authorities from giving money to particular unions to support strikes, and I would be grateful if my hon. Friend the Minister would give me some information about the legal advice that he has been given.
      Mr. Michie: The hon. Gentleman's comments are like a red rag to a bull, and red is the right colour. Sheffield city council did not support the strike financially. Obviously, in principle it supported the strike, but finance went to families in need. That makes a lot of difference.
      9 pm
      Mr. Galley: That is a matter for interpretation. The use to which that money was put is still a matter of interpretation. Some of ratepayers' money was diverted to a particular cause with political overtones.
      Social security is not a matter for a local authority. Will this Bill as it stands prohibit the use of ratepayers' money if a local authority publishes a tendentious and biased information leaflet on social security? These are still matters about which Conservative Members are properly concerned. If this wording is to remain, we need to be more clear about what are "functions". I think that the word "services" would be better, because it would relate to the actions of a local authority in providing services in its area under the terms of amendment No. 32.
      Clause 4 refers to the code of practice. It may be possible to define fairly closely what are and what are not the functions and/or services of a local authority. This would achieve greater clarity.
      Obviously, the Bill as it stands will result in contentious litigation and a vast amount of argument. I hope that it is possible to make the legislation clearer.
      Mr. Waldegrave: I shall try to be brief, as I always want to co-operate with hon. Members.
      The worries expressed have been reasonable. We must take care to ensure that we have not got ourselves into difficulties. We have not gone so far in the Bill as to worry the hon. Member for Houghton and Washington (Mr. Boyes) in the way that he purported to be worried. Local authorities have a specific power under section 144 of the Local Government Act 1972 to attract tourism. They have

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      a "function", which they can publicise. Any planning authority in the area of the end of the proposed Channel tunnel must be concerned with the legislation. Many of the matters which at first sight might be expected to cause problems need not worry us.
      The amendment widens the clause too far. We understand that there is a policy dispute between the Government and the Opposition. This clever amendment is the reverse of our intention, which is to make expenditure on information relate more closely to what local authorities actually provide for their citizens.
      There is a fundamental, interesting and ancient argument between the Government and the Opposition over whether local authorities are like little sovereign governments, or whether they are providers of services. I am glad that the hon. Member for Berwick-upon-Tweed (Mr. Beith) is in the Chamber, because I was brought up to believe that Berwick-upon-Tweed remained, until recently—perhaps it still does—in a state of war with Napoleon.
      Mr. Beith: With the Russians.
      Mr. Waldegrave: I beg the hon. Gentleman's pardon. That was tolerable as one of those ancient, antique and enjoyable anomalies that we have in the United Kingdom. However, we are moving too near to using that precedent on more serious matters. We are nearly "at separate peaces declared" because of local authorities' actions. This does not damage the United Kingdom in any way, but it brings the concept of local government into disrepute and ridicule. Sometimes, it unfairly impinges on national party political matters.
      I know that there would be a tremendous uproar from the other side if there were a Labour Government who had a different defence policy and if, by the swing of the pendulum, there were Conservative local authorities everywhere, as there usually are in those circumstances, which began campaigning with huge posters all around London for the reintroduction of Trident, and so on. I have no doubt that there would be the most frightful caterwauling from the other side. Our principle is that information must be brought back to some relationship with local authority functions, because local authorities have no functions other than those in the statute.
      To some extent, my hon. Friends the Members for Leeds, North-West (Dr. Hampson) and for Halifax (Mr. Galley) were putting both sides of this case and pointing out the tightrope. My hon. Friend the Member for Leeds, North-West rightly said, "Let us not open up such a loophole that we have major problems again." My hon. Friend the Member for Halifax was worried about CND.
      There is a worry at the back of our minds—it was brought to our attention by my hon. Friend the Member for Leeds, North-West—about what parish councils can do in relation to the services of other local authorities. We shall look again at this aspect. It is a difficult matter. I assure my hon. Friends that we shall not open up too wide a loophole, and that we shall consider this and perhaps introduce an amendment in another place to meet the legitimate concerns that have been put to the House.
      Amendment negatived.
      Mr. Boyes: I beg to move amendment No. 13, in page 3, line 5, at end insert—
      '(1A) In the said sections 142, after subsection (2) insert—
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      "(2A) It is hereby declared for the avoidance of doubt that for the purposes of this Act, section 137 of this Act is a function of a local authority."
      (1B) In the said section 88, after subsection (2) insert—
      "(2A) It is hereby declared for the avoidance of doubt that for the purposes of this Act, section 137 of this Act is a function of a local
      authority.".'.
      The purpose of the amendment is to put into statute what is already established in case law. As presently drafted, the Local Government Act 1972 enables local authorities to publish information on matters relating to local government under section 142(1) and 2(a), and the Bill would limit section 142 information to the functions of the individual local authority. A district council has no social services function, and accordingly it would not be able under section 142 to publish information on, for example, advice for the disabled.
      Many of us are concerned about limiting the ability of local authorities to explain to the people their rights to receive the services and materials which a social services department has to offer. I was an assistant director of a social services department, and I was aware of the full array of services and materials that it had to disburse. The department's concern was that it could not always deliver the services and provisions to the increasing number of individuals who wanted and needed them. That department would not have objected to any other tier of the local authority in its area, or to any voluntary organisation, explaining its functions.
      If section 137 is itself a function of the authority, as we propose in the amendment, the authority will spend money under that section on information on social services, for example, and will incur further expenditure on the provision of that information under section 142. The statute has already been agreed upon in a number of cases that have come before the courts, most recently in R. v. District Auditor for Leicester Ex Parte Leicester City Council, in September 1985.
      I look to my hon. Friend the Member for Preston (Mr. Thorne), who this afternoon showed himself to be extremely interested in the legal process. I have read his qualifications in "Dod's Parliamentary Companion" and I am sure that with his previous interests and those which he has now he will be able to explain to me fully what my last sentence means. I confess that I read it from a brief. If he is unable to do so, I am sure that the Minister for Environment, Countryside and Local Government. with all his disciplines, will be able to do so.
      The purpose of the amendment is to achieve something quite simple. We wish to put on the statute book that which has already been determined in case law. As section 137 has been subject to legal scrutiny in a number of instances, it would appear appropriate to take the opportunity of clarifying its status in the Bill. This would help both the courts and the district auditor. It should be stressed that the amendment does not seek to change the law. Its purpose is to give it the merit of being enshrined in statute. The amendment to section 88 of the Local Government (Scotland) Act 1973 would serve to make Scottish law consistent with English law.
      Mrs. Rumbold: As I understand it, the amendment would provide for an explicit declaration that, for the purposes of the Local Government Act 1972, section 137 would be a function of the local authority. The amendment would cause an equivalent amendment to be made to the Local Government (Scotland) Act 1973.

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      It was made clear in Committee that the Government's view is that section 137 is a function for the purposes of section 142. Looking at the matter from that perspective, we do not consider that the amendment is necessary. If a local authority undertakes some form of economic development, or any other development that is authorised by section 137, it can produce information about it under the amended section 142, because that relates to the functions of a local authority. I accept, however, that this may need to be examined. We must ensure that there is no difficulty about the interpretation of the Bill. If, therefore, it is thought that this matter ought to be examined further, it will be looked at again in another place.
      9.15 pm
      Mr. Simon Hughes: I speak only to encourage the Minister to do what she has hinted she will do. The Widdicombe report said that the roles of various sections of local government law could usefully be clarified. We must ensure, for example, that section 137 is not seen as allowing publicity, but we must ensure that it is seen to be an important right for local authorities to spend money upon what they choose. It must also be confirmed as a function of local authorities. I hope that when the Bill reaches another place the Minister will allow an amendment of this kind to be incorporated in the Bill. That would be helpful. I believe that the Widdicombe committee would wish that to be done. I urge the Minister to continue along this path until a proper end is reached that incorporates words similar to these.
      Amendment negatived.

    Clause 4

      CODES OF RECOMMENDED PRACTICE AS REGARDS PUBLICITY
      Mr. Strang: I beg to move amendment No. 20, in page 3, line 31, leave out subsection (4).
      Mr. Speaker: With this it will be convenient to discuss the following amendments: No. 29, in page 3, line 31, after 'section', insert
      'or any alterations to a code'.
      No. 21, in page 3, line 33, leave out 'the House of Commons' and insert 'each House of Parliament'.
      Mr. Strang: This group of three amendments relates to the code of practice, an outline of which the Minister kindly circulated to the Standing Committee before Christmas. Our intention is to take this opportunity to emphasise further our concern about its contents. Some aspects of it confirm our worst fears about the Government's intentions. A number of the references in the code of practice confirm our view that it is vague and that it will be difficult for local authorities to know precisely what they are allowed to communicate to their electors.
      Amendment No. 20 would remove the requirement that the code of practice should come before the House of Commons for approval. Amendment No. 29 stands in the name of the hon. Member for Leeds, North-West (Dr. Hampson). I am not certain whether his amendment is necessary. However, as it clarifies the position, there
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      might be some advantage in accepting it. We do not want the code to be altered without it first coming before the House of Commons.
      It may seem ironic that amendment No. 21 requires the code of practice to come before both Houses of Parliament for approval. I say "ironic" because of the Labour party's policy on the House of Lords. However, as long as there is a House of Lords, it is sensible to stick to the normal convention that a code of practice of this nature should require a resolution of each House of Parliament. That does not, of course, apply to financial resolutions. For that reason, we believe that it would be sensible if amendment No. 21 were accepted in order fully to regularise the position.
      The Minister will recall that when the Bill was in Committee there was no requirement for a code of practice to come before either House. The Minister in his speech suggested flexibility on that matter. Therefore, I think he should agree to accept amendment No. 21, and perhaps also amendment No. 29, which regularises the position.
      Mr. Simon Hughes: It is important that the Government should realise how much opposition there is to the present code of practice and the lack of control over it. The overwhelming view of those who studied the code of practice produced by the Government in December is that, in the words of the local government press, it is "outrageous" and that it is well on the way to the Ministry of Truth.
      The problem facing the Government in December was that they had suddenly to produce a code of practice. To show that there was something on which to peg clause 4, they produced the first code that they could lay their hands on. That is a generous interpretation. The Government know that what they have produced as an example of a code of practice for local government would encompass all sorts of unpaid publicity. It has a dubious statutory basis and would have to come to this House for approval.
      The amendment gives the House and local government a guarantee of proper scrutiny of whatever code sees the light of day. I hope that the Minister will tell us that the proper scrutiny is required, but, above all, that there will be nothing as horrendous as the present code of practice, which is the only example the Government have given us.
      Dr. Hampson: I think that the meaning of amendment No. 29 is perfectly obvious. In Committee, the Minister stressed how the amendment would provide flexibility and the freedom to revise and alter as the circumstances warrant. That is sensible, and it is eminently attractive to have different codes to meet the needs of different authorities.
      If we require the code to be laid before the House, it is necessary that any alterations to it should come before the House. This may be something of a deterrent, for it would make it more difficult for such things to be jiggled with.
      If I may extrapolate on this, there is, as the hon. Member for Southwark and Bermondsey (Mr. Hughes) said, deep concern within local authorities over the draft. It is important to recognise that it is a draft, put together rapidly by the Minister to help the Committee to see what areas might be included in the code. The House should make clear to the Minister that some aspects in his code will lead to severe problems. The code, or any alterations to it, should apply strictly to corporate decisions of a

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      council or the ruling group on a council. The present draft covers not only press releases—there has been tremendous abuse of press releases by council leaders, involving not just the logo on top of the press release—but also interviews.
      I question whether a code can ban the leader of a council from being party political in interviews. That would be stretching the code. The code should be concerned with corporate decisions—matters concerned with the council as a whole or on behalf of an authority.
      The draft code also refers to officers' reports to a council and to committees of a council. That is stretching the code into territory where I foresee enormous problems. Such reports may well refer to exising policies which have long been pursued, yet the code may now inhibit how the council handles them. The code, which will be a fundamental part of the Act, must not encourage mischievous litigation, but, as we said in Committee, some parts of the legislation might well do that. Above all, the code must not inhibit or add to the cost of and make more difficult the day-to-day administration of councils, but, as drafted, the code would affect such day-to-day administration.
      Mr. Waldegrave: The subject of these amendments represented my finest hour in Committee when I was defeated by my hon. Friend the Member for Halifax (Mr. Galley). The Galley amendment—rather like the Rooker-Wise amendment—will go down in history as very important, and so it should. We accept that codes of practice should be put before Parliament.
      I was a little confused by the Opposition's strategy on these amendments as, if we accept amendment No. 20, we could not accept amendment No. 21. The other place recently debated codes of practice in general and I know that it takes an interest in these matters. It might be right for the code to be debated in both Houses. I am sure that my hon. Friend the Member for Halifax would not want to defend his successful amendment to the point of resisting that addition to it.
      Mr. Galley: May I confirm that it was purely as a result of a technical procedural point that the words "House of Commons" were originally put into the amendment?
      Mr. Waldegrave: I am grateful to my hon. Friend.
      My hon. Friend the Member for Leeds, North-West (Dr. Hampson) mentioned flexibility. It works both ways. We do not want to make it so cumbersome to make minor changes that we get stuck with provisions that get further and further out of date, but I take his point about not tinkering for the sake of tinkering. I am afraid that I am genuinely open-minded about whether every change has to go through the full procedure. I can see pretty strong arguments for not doing that. We accept the principle of scrutiny by Parliament and we shall table amendments in another place to give effect to that.
      Amendment negatived.
      Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Lang.]
      9.27 pm
      Mr. Simon Hughes: The Bill started out with a variety of criticisms from all sides, although it was agreed that something had to be done about certain abuses in local authorities, and the Widdicombe committee confirmed that. The interim report's principal conclusion was that
      388
      statute should prevent publicity for party political purposes at the ratepayers' expense. On that principle, and that principle alone, my colleagues and I unanimously agreed that we should support the Bill.
      On behalf of my colleagues, I put four serious criticisms which we wanted the Government to consider, and none of which was recommended by Widdicombe. The first was that clause 2(1)(b) should be deleted, as it went far beyond party political campaigns and dealt with publicity for bodies outside the body politic. The Government have conceded that, and the paragraph has gone.
      The second was that clause 2(3) should go. It prohibits the financing of other bodies for publicity purposes. The voluntary sector was horrified by it and many, if not most, members of local authorities of all political parties were horrified. The Government have not amended clause 2(3), so they are threatening the activities of the voluntary sector and those who depend on local government for funding.
      The third criticism was that there should be no tampering with section 142 of the Local Government Act 1972. The Government have not moved on that. They have hinted that there may be movement, but they are still trying to restrict what local authorities can do under section 142 to talking about the functions of the authority, not matters relating to the area. There has not beer a concession on that.
      Lastly, the Government have allowed the code of practice provision set out in clause 4 to remain, and that is universally found to be unacceptable. I make that one gain for the Opposition, and the Government resisting three substantive attacks. The conclusion is obvious: if the Government are willing to amend the Bill before it finishes its proceedings, they might have our continuing support. We wanted to have something on the statute book but we did not want the Government to ignore the committee that they set up and go far beyond its recommendations. As they have done so, we cannot continue to support them.
      Our support was always conditional and always open to the Government backing down in the light of the opposition in the country. If the House were proportionately represented, it would not pass the Bill. Sadly, the minority Government still have a majority of seats so they may be able to succeed tonight. We shall oppose them and continue to oppose them unless they make other concessions that they could and should make because they have over-reacted to something that was not of our making, and arguably not of theirs.
      The Labour party often abused the processes of local government. In my constituency and those of many of my hon. Friends—Greenwich, Liverpool, Leeds—it has acted in a way that has brought the Bill before the House. It has caused the Government to legislate in this way. The Government have over-reacted—that is their fault—but let nobody believe that there is not blame to be attached to the Labour party as well. We shall not allow the Labour party to get away with its excesses, but, on the other hand, we shall not allow the Government to abuse the processes of local government in their turn. We are willing to fight for local government to continue to represent the reponsible voice of ratepayers and citizens in Britain. Perhaps that is why we are doing rather better than the other two parties.
      9.32 pm
      Mr. Michie: One often talks about the tail wagging the dog, but the speech by the hon. Member for Southwark and Bermondsey (Mr. Hughes) was extraordinary.
      I have been asked not to speak tonight, but I do so mainly because I think that the Bill leaves much to be desired. We are pleased that the Minister conceded various points in the Committee of which I was a member. They are small, but we should be grateful for them.
      However, the Bill is unnecessary. There are ways and means of controlling the abuses about which the Government worry. Therefore, I ask them not to continue with the Bill, but to throw it into the dustbin so that we do not have further problems and further amendments throughout the next stages.
      9.33 pm
      Dr. Hampson: The speech by the hon. Member for Southwark and Bermondsey (Mr. Hughes) was a joke. In Committee we noticed that, having given a blessing to the Bill on Second Reading, the hon. Member progressively distanced the alliance from it, and never agreed with any point in the Bill. Now he says that he agrees entirely with what the Government are doing in principle but denies the worth of the Bill, which is extraordinary.
      The Bill follows Widdicombe in all but one sense. It expressly prohibits literature of a party political nature. There has been talk about the partisan nature of the tone and scale of some local authority publicity. The Widdicombe committee did not go far enough in its recommendations to meet the problem. It said that the local authorities' powers should be concentrated under section 142 of the Local Government Act 1948, but on section 137 of the Local Government (Financial Provisions) Act 1963, it said that it should be made clear that the powers could not be used for "publicity". The Bill meets the principles of the Widdicombe report except on section 142. In the past two years we have all seen, including the hon. Member for Leeds, West (Mr. Meadowcroft), a growing abuse by Labour councils of the way in which they are using ratepayers' money for direct party political advantage or indirectly to support causes related to the Labour party.
      Mr. Meadowcroft: The hon. Member for Leeds, North-West (Dr. Hampson) and I share the problem of the same city council and its abuses. The problem is that the abuses I detailed in the evidence I brought to the Committee will not be stopped by the Bill. Activities that should be allowed to carry on in local government will be stopped by the Bill. The amendments of the hon. Member for Leeds, North-West, which showed that, have not got through.
      Dr. Hampson: That is my main point. I was misled by the outrageous condemnation by the hon. Member for Southwark and Bermondsey.
      I believe that the Government have had to tread a delicate line and, on balance, they have managed to do it well, because the Bill stops the worst abuses. However, it may not stop some of the more sophisticated abuses by the more devious Labour councillors. The hon. Member for Leeds, West and I have to live with them. They do not go over the parapet and try to become martyrs as they do in Liverpool, but they are insidiously working away all the time. Also, there are many sensitive areas that the Bill may not properly deal with because it goes too far.
      390
      The Widdicombe report drew a distinction between publicity of information on the functions of the council to help the residents of the area and party political information, which is propaganda and campaigning literature. I should like a third distinction in the Bill, dealing with the material produced in the normal course of running a local authority. In many areas —particularly through the code—if we are not careful we will try to stop or control normal administrative routines such as council minutes, circulars and officers' reports. That seems to be unnecessary.
      Clause 3(2) defines publicity, and in many ways is at the heart of the Bill. We need to look at such definitions to decide whether the terminology is right. We must decide whether the phrase
      "any communication, in whatever form, addressed to the public at large"
      is too sweeping and whether we should use phrases such as "primarily intended for the public at large." We should consider whether we are stretching into a third category of information—that essential to the day-to-day running of the council. That is no one's intention.
      9.37 pm
      Mr. Madden: Last night the noble Lord Stockton in another place delivered a blistering attack on the modern Conservative party. He said that it is now the vehicle for extremist elements who are completely alien to traditional Conservative values. I do not know what the noble Lord thinks of the Bill, but I am sure that he thinks it is shabby, sinister, undemocratic and unwanted. There has been no clamour for the Bill from the public. Postmen have not been rushing to the Department of the Environment in Marsham street with bulging postbags full of letters from the public demanding that the Bill be enacted as a matter of urgency.
      The people of Britain are worried about jobs, housing, the National Health Service and schools, where the teachers' dispute has been running for more than a year. The Bill will not create a single job, except a few for lawyers; it will be a paradise for them. They will crawl all over the Bill, seeking to clarify, advise and define. They will tell councillors that they should not do this, that they will be running great risks if they do that. That is the purpose of the Bill— to instil fear, anxiety and uncertainty.
      The Bill has come about because the Government are authoritarian and highly centralised, and are dominated by the most authoritarian Prime Minister in living memory. We are told that, when anyone is suggested to her, her first question is, "Is he one of us?" Such an attitude runs through the Government's thinking.
      The Prime Minister and the modern Conservative party no longer seek to work with local government. Confrontation is their strategy, and it has been ever since 1979. Now Labour councils are being confronted with cuts, penalties, rate capping, district auditors, surcharges, bankruptcy and disqualification. We have a Government who detest local government. They have abolished councils that they do not like and they are now stopping councillors telling the ratepayers the truth about Government policies. We have a Government who do not like law centres, so they shut them down; a Government who do not like centres for the unemployed, so they seek to shut them down; a Government who do not like

      391
      community advice centres, so they seek to shut them down; a Government who do not like voluntary organisations, so they seek to starve them of money.
      Those are the organisations that have sought to give the people confidence to fight the cuts in their services, and to campaign for what they want in their local communities. That is why the Government do not like them. That is why the Government are introducing the Bill. It is unwanted and undemocratic. I am sure that they will live to regret it, because the people know that the Government are seeking to move the goal posts. They are trying to silence people whom they do not like, who are giving the people a message that they do not like.
      This sinister, shabby, nasty little Bill deserves the contempt that the House will show it tonight. The emptiness of the Chamber while this nasty legislation has been discussed today shows that it is wholly irrelevant to the problems, priorities and anxieties of the people whom we seek to serve.
      9.42 pm
      Mr. Straw: This is a serious Bill which will do great damage to local authorities and their relationship with Government. While it is a serious matter, we have been vastly entertained today by the continual contortions and twisting and turning of Liberal Members as they seek to explain why they voted for the Bill on Second Reading yet, now that it has been improved, will vote against it on Third Reading.
      For hon. Members who are not fully apprised of the situation, it is worthwhile repeating some of the reasons mentioned by the hon. Member for Southwark and Bermondsey (Mr. Hughes) for voting for the Bill on Second Reading, when he used words such as "horrendous", "appalling and extreme", "arbitrary" and "dangerous". That is why the Liberals voted for the Bill on Second Reading. Today, people have to decide why they are voting against it on Third Reading.
      I did not mention what the Social Democratic party has been saying, because its members have been absent from the debate. A representative of the SDP, the hon. Member for Woolwich (Mr. Cartwright), has just turned up. It will be interesting and entertaining to see what SDP Members do.
      The reason why the Liberals in Parliament have changed their minds has nothing to do with whether the merits of the Bill have changed, but everything to do with the enormous pressure under which the Liberal party in Parliament has come from Liberal councillors and Liberal News, which said earlier in the parliamentary Session:
      "How disappointing and inexplicable it was to find Liberal Members trooping in to vote for this deplorable Local Government Bill on Second Reading."
      Mr. Wareing: Does my hon. Friend not agree that that is in line with the usual hypocrisy that one finds on the alliance Benches? Has he studied the early-day motions, which include one in the name of the hon. Member for Liverpool, Mossley Hill (Mr. Alton) criticising the Government for not funding the arts on Merseyside when he himself was one of the Members who voted for the abolition of Merseyside county council?
      Mr. Straw: I am grateful to my hon. Friend. The Liberals have turned turtle because of the pressure they have been under. They have appreciated the utter inconsistency of their position not only in the House but within their own movement.
      392
      In the debate on the rate support grant two days ago, the hon. Member for Devizes (Mr. Morrison) said:
      "The Government seem to forget that local government exists to provide services. It does not exist simply as a minor or even a major irritant instituted to interrupt and interfere in the otherwise smooth running of the mind of my right hon Friend the Chancellor of the Exchequer. He appears to forget that, even if local government did not exist, the services would still have to be provided".—[Official Report, 20 January 1986; Vol. 90, c. 88]
      That is a damning statement from a widely respected Conservative Member about the attitude of his Government towards local government.
      The Bill also typifies the contempt for local government which, I am sorry to say, Ministers in the Department of the Environment continue to show. They say that their concern is about ratepayers' money not being used for party political purposes. As I have said repeatedly during the debates on the Bill, if that was so, we could agree. Those were exactly the words that were used by the national executive committee of the Labour party in its evidence to Widdicombe.
      The Bill goes far wider. It is not just about controlling the use of ratepayers' money for party political purposes. It is about denying local government the right to challenge decisions of central Government and the right to say that what central Government intend to do to local services is wrong. It is about denying Lancashire county council the right to say that it believed that the Transport Act 1985 would do terrible damage to bus services in Lancashire. When Lancashire said that, it had the support of most Conservative councils as well as Labour councils.
      Most insidious of all, the Bill is about censorship. The true motives of the Government were exposed when the outline of a code of practice was published which sought not only to control publicity that was paid for but also publicity that came free out of people's mouths: press conference statements and media interviews are to be controlled. The Bill is about gagging opposition. It is about an authoritarian Government led by one woman who seeks to crush opposition, whether it comes from within her own party or from outside it. The number of Conservative Cabinet Ministers who have been kicked out for opposing the Prime Minister is testament to the truth of what we are saying.
      We oppose the Bill in this place, we shall oppose it in the other place and we hope to see it defeated.
      9.48 pm
      Mr. Waldegrave: The Bill does several other things as well as regulating local authority publicity. On Third Reading it is worth remembering that. It lays down a date by which local authorities must set a rate, which is important and which has been widely welcomed. It deals with the transfer of local authority mortgages over the heads of the holders of the mortgages; that is important and right.
      The central part of the Bill is about publicity. I have been astonished by the arguments from all the Opposition parties. The Labour party's opposition to the Bill has been based on the proposition that there are no abuses and that the existing law would control abuses if there were any. On the other hand, it says that the limitations inherent in this Bill bring to an end freedom of speech in local government. As happens quite often, something in the propositions put by the Opposition is a little awry: the Bill either does something or it does not. We know it limits the

      393
      abuses that have grown up in recent years in local authorities, and we know that the existing law has not been capable of doing that. The tricky argument by the Labour party is flawed and wrong.
      The sort of abuses we have seen in the last few years would not have been tolerated for one moment by the Labour party. Hon. Members will remember that most awful of all modern British Governments under the present Lord Wilson of Rievaulx. He went off to Washington with the union jack hanging upside down over his head, and Lyndon Johnson said he was the greatest Englishman since Churchill while he praised the American stance in Vietnam. If the GLC, which I think was controlled at that time by the Tories, had covered London with posters caricaturing Wilson and ridiculing his policy, which deserved to be ridiculed, would not the Opposition have thought that that was a misuse of the publicity powers of the GLC? We know perfectly well that if the boot was on the other foot, there would be a lot of caterwauling from the Labour party.
      One thing more craven than the Labour party's opposition to this Bill has been the performance of the alliance. It has not been hot, it has not been cold; it has not said yes, it has not said no. The Liberal and Social Democratic parties have been timid. They have wrung their hands and said there are dreadful abuses, but they have taken no practical steps to allow us to introduce legislation to limit those abuses. They have opposed every practical proposition, and I have come to the conclusion that so endemic in them is the spirit of opposition that they do not want action; they prefer to be in a position to complain. If somebody were to put an end to their complaints they would be terrified. They are in the position of the Spartans at the battle of Marathon who prolonged their debate about sending aid to the Athenians for so long that the battle, thankfully for Sparta, was over by the time their soldiers arrived. As usual with the alliance, it is never there on the day when the real battle is being fought.
      This Bill is necessary. We would prefer it not to be necessary. We would prefer the old conventions to remain as they do in many parts of the country. Many Labour and Conservative authorities have nothing to fear from this Bill, because they have maintained those conventions. Those authorities which have not do have something to fear and it is right that they should. I commend the Bill to the House.
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 260, Noes 192.

      Division No. 44]

      [9.52 pm

      AYES

      Adley, Robert

      Baldry, Tony

      Aitken, Jonathan

      Banks, Robert (Harrogate)

      Alexander, Richard

      Beaumont-Dark, Anthony

      Alison, Rt Hon Michael

      Bellingham, Henry

      Amess, David

      Bendall, Vivian

      Ancram, Michael

      Benyon, William

      Arnold, Tom

      Bevan, David Gilroy

      Ashby, David

      Biffen, Rt Hon John

      Aspinwall, Jack

      Biggs-Davison, Sir John

      Atkins, Robert (South Ribble)

      Blaker, Rt Hon Sir Peter

      Atkinson, David (B'm'th E)

      Body, Sir Richard

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

      Bonsor, Sir Nicholas

      Baker, Nicholas (Dorset N)

      Boscawen, Hon Robert

      394

      Bottomley, Peter

      Hamilton, Neil (Tatton)

      Bottomley, Mrs Virginia

      Hampson, Dr Keith

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

      Hanley, Jeremy

      Bowden, Gerald (Dulwich)

      Hannam, John

      Braine, Rt Hon Sir Bernard

      Harris, David

      Brandon-Bravo, Martin

      Harvey, Robert

      Bright, Graham

      Haselhurst, Alan

      Brinton, Tim

      Hawkins, C. (High Peak)

      Brooke, Hon Peter

      Hawkins, Sir Paul (N'folk SW)

      Brown, M. (Brigg & Cl'thpes)

      Hawksley, Warren

      Browne, John

      Hayes, J.

      Bruinvels, Peter

      Hayhoe, Rt Hon Barney

      Bryan, Sir Paul

      Hayward, Robert

      Buchanan-Smith, Rt Hon A.

      Heathcoat-Amory, David

      Buck, Sir Antony

      Henderson, Barry

      Budgen, Nick

      Heseltine, Rt Hon Michael

      Bulmer, Esmond

      Hickmet, Richard

      Burt, Alistair

      Hicks, Robert

      Butcher, John

      Higgins, Rt Hon Terence L.

      Butler, Rt Hon Sir Adam

      Hogg, Hon Douglas (Gr'th'm)

      Carlisle, Kenneth (Lincoln)

      Holland, Sir Philip (Gedling)

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

      Holt, Richard

      Carttiss, Michael

      Howard, Michael

      Cash, William

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

      Chalker, Mrs Lynda

      Howarth, Gerald (Cannock)

      Chapman, Sydney

      Howell, Rt Hon D. (G'ldford)

      Chope, Christopher

      Howell, Ralph (Norfolk, N)

      Churchill, W. S.

      Hubbard-Miles, Peter

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

      Hunt, David (Wirral, W)

      Clark, Sir W. (Croydon S)

      Hunter, Andrew

      Clarke, Rt Hon K. (Rushcliffe)

      Irving, Charles

      Cockeram, Eric

      Jackson, Robert

      Colvin, Michael

      Jessel, Toby

      Conway, Derek

      Jones, Robert (Herts W)

      Coombs, Simon

      Jopling, Rt Hon Michael

      Cope, John

      Kellett-Bowman, Mrs Elaine

      Cormack, Patrick

      Kershaw, Sir Anthony

      Cranborne, Viscount

      Key, Robert

      Crouch, David

      King, Roger (B'ham N'field)

      Currie, Mrs Edwina

      Knight, Greg (Derby N)

      Dicks, Terry

      Knight, Dame Jill (Edgbaston)

      Dorrell, Stephen

      Knowles, Michael

      Douglas-Hamilton, Lord J.

      Knox, David

      Dover, Den

      Lamont, Norman

      Dunn, Robert

      Lang, Ian

      Dykes, Hugh

      Lawler, Geoffrey

      Eggar, Tim

      Lee, John (Pendle)

      Emery, Sir Peter

      Leigh, Edward (Gainsbor'gh)

      Evennett, David

      Lester, Jim

      Eyre, Sir Reginald

      Lewis, Sir Kenneth (Stamf'd)

      Fallon, Michael

      Lightbown, David

      Favell, Anthony

      Lilley, Peter

      Fenner, Mrs Peggy

      Lloyd, Peter (Fareham)

      Finsberg, Sir Geoffrey

      Lord, Michael

      Fletcher, Alexander

      Luce, Rt Hon Richard

      Forman, Nigel

      Lyell, Nicholas

      Forsyth, Michael (Stirling)

      McCrindle, Robert

      Forth, Eric

      McCurley, Mrs Anna

      Fox, Marcus

      Macfarlane, Neil

      Franks, Cecil

      MacGregor, Rt Hon John

      Fraser, Peter (Angus East)

      MacKay, Andrew (Berkshire)

      Freeman, Roger

      MacKay, John (Argyll & Bute)

      Fry, Peter

      Maclean, David John

      Gale, Roger

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

      Galley, Roy

      McQuarrie, Albert

      Gardner, Sir Edward (Fylde)

      Madel, David

      Garel-Jones, Tristan

      Major, John

      Goodlad, Alastair

      Malins, Humfrey

      Gow, Ian

      Malone, Gerald

      Gower, Sir Raymond

      Maples, John

      Grant, Sir Anthony

      Marland, Paul

      Greenway, Harry

      Marlow, Antony

      Gregory, Conal

      Marshall, Michael (Arundel)

      Griffiths, Sir Eldon

      Mather, Carol

      Griffiths, Peter (Portsm'th N)

      Maude, Hon Francis

      Grist, Ian

      Mawhinney, Dr Brian

      Ground, Patrick

      Maxwell-Hyslop, Robin

      Grylls, Michael

      Mayhew, Sir Patrick

      Gummer, Rt Hon John S

      Meyer, Sir Anthony

      Hamilton, Hon A. (Epsom)

      Miller, Hal (B'grove)

      395

      Mills, Iain (Meriden)

      Ridley, Rt Hon Nicholas

      Mitchell, David (Hants NW)

      Ridsdale, Sir Julian

      Moate, Roger

      Rifkind, Rt Hon Malcolm

      Monro, Sir Hector

      Rossi, Sir Hugh

      Montgomery, Sir Fergus

      Rowe, Andrew

      Morris, M. (N'hampton, S)

      Rumbold, Mrs Angela

      Morrison, Hon C. (Devizes)

      Sainsbury, Hon Timothy

      Moynihan, Hon C.

      Sayeed, Jonathan

      Mudd, David

      Scott, Nicholas

      Neale, Gerrard

      Shaw, Giles (Pudsey)

      Needham, Richard

      Silvester, Fred

      Nelson, Anthony

      Skeet, Sir Trevor

      Neubert, Michael

      Speed, Keith

      Newton, Tony

      Spence, John

      Nicholls, Patrick

      Stern, Michael

      Norris, Steven

      Stevens, Lewis (Nuneaton)

      Oppenheim, Phillip

      Stokes, John

      Oppenheim, Rt Hon Mrs S.

      Tapsell, Sir Peter

      Osborn, Sir John

      Taylor, John (Solihull)

      Ottaway, Richard

      Thompson, Donald (Calder V)

      Page, Richard (Herts SW)

      Thorne, Neil (Ilford S)

      Parris, Matthew

      Thurnham, Peter

      Patten, Christopher (Bath)

      Townend, John (Bridlington)

      Patten, J. (Oxf W & Abdgn)

      Townsend, Cyril D. (B'heath)

      Pattie, Geoffrey

      Twinn, Dr Ian

      Pawsey, James

      Viggers, Peter

      Peacock, Mrs Elizabeth

      Wakeham, Rt Hon John

      Percival, Rt Hon Sir Ian

      Waldegrave, Hon William

      Pollock, Alexander

      Walker, Bill (T'side N)

      Porter, Barry

      Warren, Kenneth

      Powell, William (Corby)

      Watson, John

      Powley, John

      Wheeler, John

      Prentice, Rt Hon Reg

      Wiggin, Jerry

      Proctor, K. Harvey

      Wood, Timothy

      Pym, Rt Hon Francis

      Yeo, Tim

      Rathbone, Tim

      Rees, Rt Hon Peter (Dover)

      Tellers for the Ayes:

      Rhodes James, Robert

      Mr. Tony Durant and

      Rhys Williams, Sir Brandon

      Mr. Mark Lennox-Boyd.

      NOES

      Adams, Allen (Paisley N)

      Campbell, Ian

      Alton, David

      Campbell-Savours, Dale

      Anderson, Donald

      Canavan, Dennis

      Archer, Rt Hon Peter

      Carlile, Alexander (Montg'y)

      Ashdown, Paddy

      Cartwright, John

      Ashley, Rt Hon Jack

      Clark, Dr David (S Shields)

      Ashton, Joe

      Clarke, Thomas

      Bagier, Gordon A. T.

      Clay, Robert

      Barnett, Guy

      Clelland, David Gordon

      Barron, Kevin

      Clwyd, Mrs Ann

      Beckett, Mrs Margaret

      Cocks, Rt Hon M. (Bristol S.)

      Beith, A. J.

      Cohen, Harry

      Bell, Stuart

      Coleman, Donald

      Benn, Rt Hon Tony

      Conlan, Bernard

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

      Cook, Frank (Stockton North)

      Bermingham, Gerald

      Cook, Robin F. (Livingston)

      Bidwell, Sydney

      Cox, Thomas (Tooting)

      Blair, Anthony

      Craigen, J. M.

      Boothroyd, Miss Betty

      Crowther, Stan

      Boyes, Roland

      Cunliffe, Lawrence

      Bray, Dr Jeremy

      Cunningham, Dr John

      Brown, Gordon (D'f'mline E)

      Davies, Rt Hon Denzil (L'lli)

      Brown, Hugh D. (Provan)

      Davies, Ronald (Caerphilly)

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

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

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

      Deakins, Eric

      Brown, Ron (E'burgh, Leith)

      Dewar, Donald

      Bruce, Malcolm

      Dormand, Jack

      Buchan, Norman

      Douglas, Dick

      Caborn, Richard

      Dubs, Alfred

      Callaghan, Rt Hon J.

      Dunwoody, Hon Mrs G.

      Callaghan, Jim (Heyw'd & M)

      Eadie, Alex

      396

      Eastham, Ken

      Meadowcroft, Michael

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

      Michie, William

      Evans, John (St. Helens N)

      Mikardo, Ian

      Fatchett, Derek

      Millan, Rt Hon Bruce

      Faulds, Andrew

      Miller, Dr M. S. (E Kilbride)

      Field, Frank (Birkenhead)

      Mitchell, Austin (G't Grimsby')

      Fields, T. (L'pool Broad Gn)

      Morris, Rt Hon A. (W'shawe)

      Fisher, Mark

      Morris, Rt Hon J. (Aberavon)

      Flannery, Martin

      Nellist, David

      Foot, Rt Hon Michael

      Oakes, Rt Hon Gordon

      Forrester, John

      O'Brien, William

      Foster, Derek

      O'Neill, Martin

      Foulkes, George

      Orme, Rt Hon Stanley

      Fraser, J. (Norwood)

      Owen, Rt Hon Dr David

      Freeson, Rt Hon Reginald

      Park, George

      Freud, Clement

      Parry, Robert

      Garrett, W. E.

      Patchett, Terry

      George, Bruce

      Pavitt, Laurie

      Gilbert, Rt Hon Dr John

      Pendry, Tom

      Godman, Dr Norman

      Penhaligon, David

      Gould, Bryan

      Pike, Peter

      Hamilton, James (M'well N)

      Powell, Raymond (Ogmore)

      Hamilton, W. W. (Fife Central)

      Prescott, John

      Hancock, Michael

      Radice, Giles

      Hardy, Peter

      Randall, Stuart

      Harman, Ms Harriet

      Redmond, Martin.

      Harrison, Rt Hon Walter

      Rees, Rt Hon M. (Leeds S)

      Hart, Rt Hon Dame Judith

      Richardson, Ms Jo

      Hattersley, Rt Hon Roy

      Roberts, Allan (Bootle)

      Heffer, Eric S.

      Roberts, Ernest (Hackney N)

      Hogg, N. (C'nauld & Kilsyth)

      Robertson, George

      Holland, Stuart (Vauxhall)

      Rogers, Allan

      Home Robertson, John

      Rooker, J. W.

      Hughes, Robert (Aberdeen N)

      Rowlands, Ted

      Hughes, Roy (Newport East)

      Sedgemore, Brian

      Hughes, Simon (Southwark)

      Sheerman, Barry

      Jenkins, Rt Hon Roy (Hillh'd)

      Sheldon, Rt Hon R.

      John, Brynmor

      Shore, Rt Hon Peter

      Johnston, Sir Russell

      Short, Ms Clare (Ladywood)

      Jones, Barry (Alyn & Deeside)

      Short, Mrs R.(W'hampt'n NE)

      Kaufman, Rt Hon Gerald

      Silkin, Rt Hon J.

      Kennedy, Charles

      Skinner, Dennis

      Kilroy-Silk, Robert

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

      Kinnock, Rt Hon Neil

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

      Kirkwood, Archy

      Soley, Clive

      Lambie, David

      Spearing, Nigel

      Leighton, Ronald

      Steel, Rt Hon David

      Lewis, Ron (Carlisle)

      Stott, Roger

      Litherland, Robert

      Strang, Gavin

      Livsey, Richard

      Straw, Jack

      Lloyd, Tony (Stretford)

      Thomas, Dafydd (Merioneth)

      Loyden, Edward

      Thompson, J. (Wansbeck)

      McCartney, Hugh

      Thorne, Stan (Preston)

      McKay, Allen (Penistone)

      Tinn, James

      MacKenzie, Rt Hon Gregor

      Torney, Tom

      Maclennan, Robert

      Wallace, James

      McNamara, Kevin

      Wareing, Robert

      McTaggart, Robert

      Welsh, Michael

      McWilliam, John

      White, James

      Madden, Max

      Williams, Rt Hon A.

      Marek, Dr John

      Winnick, David

      Marshall, David (Shettleston)

      Woodall, Alec

      Martin, Michael

      Wrigglesworth, Ian

      Mason, Rt Hon Roy

      Maxton, John

      Tellers for the Noes:

      Maynard, Miss Joan

      Mr. Frank Haynes and

      Meacher, Michael

      Mr. Don Dixon.

      Question accordingly agreed to.
      Bill read the Third time, and passed.

  Rate Support Grant (Scotland)
  10.5 pm
  The Secretary of State for Scotland (Mr. Malcolm Rifkind): I beg to move,
  That the Rate Support Grant (Scotland) (No. 4) Order 1985, dated 18th December 1985, which was laid before this House on 19th December, be approved.
  It might be for the convenience of the House if we were to debate at the same time the second motion,
  That the draft Revaluation Rate Rebates (Scotland) (No. 2) Order 1985, dated 18th December 1985, which was laid before this House on 19th December, be approved.
  Mr. Speaker: Is that with the leave of the House?
  Hon. Members: Yes.
  Mr. Rifkind: We have before us two orders. One is the main rate support grant order, which we debate each year at about this time. The other is the order continuing the scheme of revaluation rate rebates which my predecessor introduced last year to provide a welcome relief to those most affected by revaluation, since there is clearly a close connection between these two orders.
  As the House knows, it is this Government's objective to reduce local authority expenditure. Since coming to office we have asked authorities to co-operate in that objective. Some have done so, but increasingly the Government have been forced to bring pressure to bear on authorities, through the level of grant, and in some cases by means of selective action, to achieve those objectives. We still have not achieved a reduction in volume terms in what local authorities are spending. Local authorities in 1985–86 were still planning to spend 1·8 per cent. more in volume terms than they spent in 1978–79. It is worth examining the figures in more detail because of the claims of unacceptable cuts which are frequently made by local authorities.
  The main component of local authority expenditure is education. It accounts for 45 per cent. of relevant expenditure, and of course the main part of that —almost 90 per cent. —is school education. For demographic reasons the school population is falling. Between 1978–79 and 1984–85 primary pupil numbers fell by 23 per cent. and secondary numbers by 8 per cent. With the demand for a major component of expenditure falling significantly one would expect expenditure to fall, and to say that one expects that is not to ask for unreasonable cuts.
  There have indeed been reductions in education, but only 3 per cent. in volume terms over that period. Without these savings on education, local authority expenditure would not be 1·8 per cent. above its 1978–79 level, but 8 per cent. above it. This is the real measure of the extent to which local authority expenditure has in fact increased from its 1978–79 level, despite all that the Opposition and the authorities claim about unacceptable cuts. The volume of local authority expenditure expressed in real terms is still significantly higher than it was when the Government came into office. The claim that there have been unacceptable cuts is difficult to believe.
  Mr. Jim Craigen: How many teaching posts would have to disappear to conform with the Secretary of State's guidance?
  Mr. Rifkind: The important point that I emphasise is that, even if the local authorities met the Scottish Office's
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  Red Book requirements, the pupil-teacher ratio would still be extremely healthy. As the hon. Gentleman will be aware, it is better than it has ever been in the history of Scottish education. That is despite the so-called unacceptable cuts to which he has referred.
  Putting aside the relatively minor reduction in educational spending, which is far less than the demographic changes would have implied, the actual volume of other expenditure of local authorities has increased, not by 1·8 per cent. but by 8 per cent., over the past six or seven years. That is very significant.
  Thus, the financial background to this order is one of local authority expenditure still above its 1978–79 level, despite demographic factors which make possible expenditure reductions without unreasonable cuts in services. This being so, there remains the need to apply pressure to authorities to spend in line with the Government's plans.
  There are, I am glad to note, signs that local authorities are making greater efforts to bring their spending into line with these plans. In 1984–85, 15 authorities budgeted in line with guidelines. In 1985–86 the number doubled from 15 to 30, including over half the regional and island authorities. Clearly this was in part a response to the much more severe grant penalties for 1985–86, of which authorities were given ample warning. The effect of these penalties has also been to force authorities still above guidelines to look closely at their budgets in order to find savings. One region plans to halve its planned overspend. Others are looking closely at ways of reducing or eliminating their overspends. This is good news for ratepayers, in two ways. There are savings in expenditure, and there will be refunds of grant penalty as authorities bring their expenditure nearer guideline at outturn. Authorities can calculate what grant refund they will get, and, together with the expenditure reductions, this should help to keep rates down.
  Mr. Dennis Canavan: Does the Secretary of State agree with the Convention of Scottish Local Authorities that, if all the rate support grant which the Government have cut from local authorities over the past five years were to be restored, ratepayers in Scotland could have a year completely free of any rate payments? Instead of that, because of the further cuts contained in this order, domestic ratepayers face an average increase of 10 per cent. in 1986–87. Does this not prove to the Secretary of State that his Government are largely responsible, not just for cuts in local authority services, but for rates increases?
  Mr. Rifkind: I disagree entirely with that, for one very good reason. The implication of what the hon. Gentleman says is that if central Government kept their contribution to local authority expenditure stable that would somehow help the ratepayers. The evidence does not support that view. For four years the rate support grant contribution from central Government was kept at 68·5 per cent. No change was made, yet during that period local authorities in Scotland increased their expenditure in real terms by no less than £240 million. That is what happened when central Government did not apply pressure through the rate support grant system. When the Government apply pressure, we begin to get results. It may be very sad indeed that it should require that sort of pressure to bring about

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  the results that we seek, but the hon. Gentleman, and indeed the convention, cannot deny that that is historical fact, and it is something that they should bear in mind.
  Sir Russell Johnston: I am sorry to pursue this point, but what the hon. Member for Falkirk, West (Mr. Canavan) has just said is what we on this Bench were assured by the COSLA representatives today was the case. They said quite specifically, and in terms, that if the amount of the rate support grant in 1981, which at that time was £1,775 million in present terms, was restored, it would be the equivalent of having a rate-free year for every local authority in Scotland. Is the Minister flatly saying that COSLA is deceiving us?
  Mr. Rifkind: Yes, it is deceiving the House, for this simple reason. The implication is that if these funds were available the expenditure plans of local authorities would not be changed. If the expenditure plans of local authorities were not changed, it goes without saying that any increased central Government grant would go towards reducing rates. Of course that is right, it has to be true, but from all our experience—and the hon. Gentleman is a fair man—we know perfectly well that when central Government give more in grants to local authorities the increase is rarely passed on to the ratepayer. What happens is that those local authorities which wish to increase their expenditure feel that they can do so quite happily without putting an increased burden on the ratepayer, but at a cost to the taxpayer.
  That is not theory, but what has happened in those years when the rate support grant has not been reduced as a percentage. That is the point that I made earlier, and it is a sad fact of life. All that COSLA is saying is that, if all other things are equal, the more central Government pay, the better it is for the ratepayer. Obviously, that is true, but it is not very good for the taxpayer, and it is not a remarkable observation.
  My predecessor issued expenditure guidelines for 1986–87 to authorities at the beginning of October. These included an increase of £59 million over the provision originally made in the White Paper. After taking account of the completion of the transfer of two colleges to central institution status, the provision for 1986–87 is 4·3 per cent. ahead of that made for 1985–86. As in each year since 1982–83, guidelines were based on the client group method of needs assessment, but with limits on how far authorities were expected to change their expenditure in one year. My predecessor had particular regard to the problems of authorities with guidelines below assessed need and to the performance of authorities in relation to their present guideline and assessed need. Authorities whose assessed need was higher than their 1985–86 budget were allowed guidelines up to 7 per cent. above what they budgeted to spend this year.
  Mr. Tom Clarke: The hon. Member for Strathkelvin and Bearsden (Mr. Hirst), who is indisposed and unable to be present, asked me to raise a point with the Secretary of State. Perhaps in another debate he will be able to speak for himself. Strathkelvin district council now has new headquarters—Tom Johnston House. Within the guidelines, no allowance has been made for that district council, which means that ratepayers, including my constituents and those of the
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  Secretary of State's hon. Friend, will be faced with a higher bill. Will the right hon. and learned Gentleman bear that in mind?
  Mr. Rifkind: I have not yet received direct representations from my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst). I appreciate the fact that the hon. Member for Monklands, West (Mr. Clarke) is speaking on his own and on my hon. Friend's behalf. There is no doubt that this is a matter that can properly be considered. The administrative costs of a local authority would not normally result in a change in the guidelines, which are based on assessed need. However, the matter will be considered to see what is appropriate.
  Every authority that kept within guideline or assessed need this year received a cash increase of at least 0·5 per cent., and no authority was set a guideline more than 1·8 per cent. below this year's budget. There will again be severe penalties for ovespending in 1986–87, but the guidelines are not unreasonable, and I urge authorities to spend in line with guidelines, in the interests of their ratepayers. Failure to spend at guidelines will again lead to severe penalties.
  Turning to the rate support grant order, aggregate Exchequer grant for 1986–87 will be £2,008·65 million, including an addition of £3·65 million to take into account the transfer of financial responsibility for list D schools, the grant figure is £100 million more than the figure that my predecessor first announced for 1985–86.
  Mr. Michael Forsyth: On the matter of additional resources for list D schools, is my right hon. and learned Friend aware that some authorities, such as central regional council in my constituency, having received the money, are shutting the door in the face of the list D schools? They are not providing the support that they should be providing but are saying that it is a problem for central Government?
  Mr. Rifkind: We are watching with careful interest the discussions that are taking place between regional authorities and the list D schools. Most of the discussions have not yet been completed. I hope that there will be a sensible resolution of the matter to ensure that the needs that are at present met by the list D schools will be accommodated. The Government are making reasonable provision for financial applications. The onus is on the regional councils to obtain a satisfactory outcome in the interests of those who need the provisions of the schools.
  I mentioned that the grant figure is £100 million more than the figure that my predecessor first announced for 1985–86. It is £43 million more than the final grant figure for 1985–86 once account is taken of the generous increases in grant made to increase domestic rate relief and offset the effects of revaluation. The 1986–87 grant figure is 56·1 per cent. of relevant expenditure. This is a reduction on the grant percentage in the current year, and it is in order to put further pressure on authorities to bring their spending into line. Authorities claim that cuts in grant merely increase rates, but where reductions in spending can be made, there is no reason why that should be the case. The historical examples that I mentioned earlier prove that point. If all authorities spent in line with the Government's plans in 1986–87, the overall level of rates should fall. There should be no overall increase.
  Aggregate Exchequer grant consists of rate support grants and specific grants. The Convention of Scottish

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  Local Authorities generally prefers money to be allocated to rate support grants rather than to specific grants. This reduces administration costs and gives authorities greater freedom to decide on priorities between services. The existing specific grants were reviewed with the convention, and it was agreed that five grants—list D schools, planning development, town development, sewerage and open space—should be discontinued. The resulting increase in needs element has been distributed in such a way that changes in total grant income for individual authorities are minimised. My predecessor, also with the agreement of the convention, introduced a new specific grant to promote Gaelic. This is part of the implementation of my response to the Montgomery report on the functions and powers of Islands councils. The amount allocated to this specific grant for the first year is £250,000, and I hope that it will provide useful assistance for the Gaelic language.
  Rate support grants comprise three elements: domestic element, resources element, and needs element. Domestic element reduces the rate poundage for domestic ratepayers compared with other ratepayers. It was increased massively in 1985–86 from 1p in the pound to 8p, to offset the effects of revaluation. The cost was increased from £14 million to £102 million, largely by the extra grant that my predecessor made available. It is now proposed to reduce domestic element by a small amount from 8p to 7p, reducing the costs to £91 million. This is still a substantial amount. Since domestic element is found from within aggregate Exchequer grant, this means that more grant will be available to help all ratepayers, without any serious effect on the domestic ratepayer.
  Resources element compensates authorities which have less than a standard amount of rating resources per head. Resources and needs element have been in the ratio 1:7 for some years. However, since resources element distribution is based on actual rate poundages, it is possible for high-spending authorities to attract more grant by high spending. It is now proposed to reduce the amount of resources element available by reducing the ratio to 1:8. This results in a resources element of £185·2 million.
  The largest component of rate support grant is the needs element. The amount payable to each authority is shown in schedule 2 to the order, and appendix E to the report sets out details of the calculation.
  The client group method of needs assessment continues to be the basis of distribution of needs element. Full implementation of the method would, however, mean substantial gains and losses for individual authorities. It is, therefore, proposed to set limits on the maximum grant gains and losses for any authority. These limits are 15 per cent. on gains and 7 per cent. on losses. The limits are symmetrical around the 4 per cent. increase in needs element generally. —[AN HON. MEMBER: "Does the Secretary of State know what that means?"]—I shall be happy to explain that, if it would be helpful to the House. I could not have explained it last week, but I can happily explain it tonight.
  A number of authorities, mainly small rural districts, are worried that full implementation of the client group method would mean their using all their entitlement to needs element. For that reason, a minimum grant entitlement of £11 per head has been set, subject to the limit on gains that I have mentioned. I understand that this
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  has been the subject of some criticism, but I would point out that the arrangement applies to district councils only, and that the £11 minimum is a modest amount when one considers that other district councils receive grant of up to £55 a head. As in previous years, Orkney and Shetland have been treated as special cases because of their extremely high rating resources. They have been given the average grant increase over what they received this year.
  I mentioned earlier that the order included changes to grant for back years. Rate support grant for 1985–86 is increased by £19·6 million to compensate for interest rate changes and £239,000 as a consequence of the latest police pay award.
  Mr. David Lambie: Will the right hon. and learned Gentleman give us information on the level of interest rates that the Government are looking for in the next financial year?
  Mr. Rifkind: This is a debate on the rate support grant, and I do not think it would be relevant to have a discussion on the normal national level of interest rates. The hon. Gentleman will be aware that local authorities are compensated for any changes that come about as a result of changes in interest rates, and that local authorities do not suffer if there is a change in interest rates. The Government compensate them for that, and that is right and proper.
  Grant penalties for 1984–85 were revised in July this year, restoring £29 million in grant to local authorities because provisional expenditure returns were below budget. The penalties were revised again when final figures were available, and it was hoped that this would show a further reduction in expenditure. Final outturns were above provisional outturns for many authorities, with grant penalties overall standing to be increased by £1·1 million, although some authorities such as Lothian region, had further reductions in expenditure and in penalties.
  Sir Russell Johnston: The right hon. and learned Member rightly said that this is a highly complex matter. Will he confirm that his civil servants, in making the final determination in these matters, are alleged, if there are discrepancies, to apply the "Athine" formula—"Ach, to hell is near enough"!
  Mr. Rifkind: I appreciate the hon. Gentleman's intervention. The final decisions are made not, by civil servants, but by Ministers. The hon. Gentleman's final observation is near enough to be correct.
  Mr. Barry Henderson: Does my right hon. and learned Friend recall the words of the distinguished civil servant who gave evidence to the Select Committee on Scottish Affairs in explaining the rate support grant system to Scottish Members of Parliament? When it was put to him that these were subjective judgments, he pointed out that these were objective criteria which, on occasion, might be applied subjectively.
  Mr. Rifkind: No doubt the distinguished officials who serve the Scottish Office will apply the most acceptable criteria when they give advice to Ministers. Ministers always accept their advice if it is sufficiently convincing as to the merits of the case.
  The Revaluation Rate Rebates (Scotland) (No. 2) Order 1985 is I am relieved to say, a much simpler document. The recent revaluation increased the rateable values of some domestic and commercial subjects by considerably

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  more than the average change. To mitigate the effects of this, my predecessor introduced special relief under the Rating (Revaluation Rebates) (Scotland) Act 1985 for domestic and commercial ratepayers whose new rateable value was over three times more than their old one. Those receiving relief would face large increases in their rate Bills if it were ended next year. My predecessor therefore announced on 3 December that the relief would continue for 1986–87, but at a rate of 75 per cent. The maximum relief on any one property will be £7,500. This order gives effect to that decision. The cost of the relief in 1986–87 will be about £20 million, compared with £26 million this year. I consider this to be a generous continuation of the assistance to the ratepayers most affected by revaluation. While obviously they would have preferred continuation of 100 per cent. relief, I am sure that they will welcome its continuation at 75 per cent. I believe that the Opposition will recognise that as viable assistance to Scottish ratepayers.
  Taken together, I consider that these two orders constitute a very reasonable basis for local authority expenditure and rates in 1986–87. If local authorities spend sensibly, there is every reason why rate increases should be low. If they spend in line with guidelines, there will be no grant penalties and the overall level of rates will come down. On behalf of ratepayers, I strongly urge local authorities to follow this course. If they do not, it is the ratepayers who will suffer. I commend both these orders to the House.
  10.30 pm
  Mr. Donald Dewar: I extend my congratulations yet again to the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) on his appointment to the Scottish Office. I extend also my condolences, as I see that he is still having some trouble with his notes. No doubt, his reading will improve with time.
  The speech by the Secretary of State shows that someone who has understood the subtleties of city government in the root of his previous job cannot necessarily be expected to understand the Scottish rate support grant settlement. I understand that the right hon. and learned Gentleman is suffering from some difficulties.
  A rate support grant debate is not a place for civilised pleasantries. I hope that the Secretary of State will merely accept that we wish him well in his new job. He has taken the post of the right hon. Member for Ayr (Mr. Younger), and I notice that he has taken over his speeches as well. I am not sure that that bodes well for the future.
  The bare facts are there for every hon. Member to see. The relevant expenditure has increased, I believe, by 3·9 per cent., but I accept that there may be some pleading on the margins. However, I suspect that it has still fallen short of the rate of inflation. It is undeniably true, when one looks at the relevant expenditure in conjunction with the reduction in RSG percentage, that we are left with an unsatisfactory position.
  Th RSG has decreased by 1·6 per cent. As that is on the basis of last year's 57·7 per cent., that is a decrease of about 3 per cent. The result is a total cash settlement up by only 2·2 per cent., according to my calculations. It is therefore down substantially in real terms. The only defence for that is that it is perhaps not as dramatically as bad a settlement as in some previous years. It cannot be taken in isolation. We must look at the inheritance of the
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  Secretary of State—what has happened in the past four or five years. The rate of Exchequer support for local services has been reduced below the danger point, and we are reducing it even further in the order. The House should not accept this in any sense. I very much regret that the Government are railroading through a totally inadequate RSG settlement.
  My hon. Friend the Member for Falkirk, West (Mr. Canavan) has referred to the RSG settlement. If the 1980–81 percentage is applied to the relevant expenditure in each year, we can assume that between £1·5 billion and £1·7 billion cumulatively would have been available to local government in Scotland. If one applies the 1980–81 percentage to this year, there would have been an additional £433 million.
  It is interesting that the Secretary of State made the perfectly valid point that it is perhaps unfair to assume that all that money would have gone to reduce the rates. I accept that a balance would have been struck—no doubt, a varying balance from authority to authority—between improving services and protecting the ratepayer.
  The Secretary of State did not for a moment dispute the arithmetic. Undoubtedly, those funds would have been available had it not been for the predatory raid by the Treasury, which has been repeated every autumn in the past five years. The total of this rate support grant is miserably inadequate. A look at the way in which the RSG has been divided shows something that amounts to chaos and confusion.
  I was interested to note the Secretary of State's delicate descriptive reference to what happened to the rural resources element. The ratio has been reduced from 1:7 to 1:8. I know that it has happened, but I am not sure why. COSLA certainly did not want it. I understand that the working party on local government finance, which is a joint official working party did not recommend it. It may be a somewhat simplistic approach, but I assume that there is a reason behind the changes. It might be helpful for the Government to tell us what it is.
  There have been some strange happenings with the needs distribution formula and something nasty has been happening at St. Andrew's house. The regions have some cause for complaint. I recognise that there will always he difficulties, but the regions seem to have come out of this year's distribution rather badly. The Minister will know that Strathclyde has seen an increase of 1·8 per cent. while the Central region and Lothian have had increases of 0·6 and 0·5 per cent., respectively. Those are small increases when we consider the services that the regions have to support and the impact of inflation.
  The districts have come out of the distribution rather better than the regions, but it is interesting to note how the client group approach has been applied. The Scottish Office has done its sums and taken the client group approach, which is supposed to be an equitable and fair method of deciding on need, but it has not liked the results. There have been unintended consequences. The Secretary of State has told us that, when the needs of certain small district councils were assessed, it was decided that they would get nothing from the needs element provision. It has been decided arbitrarily that there should be provision of £11 per head. That has been of enormous help, and I do not complain about any authority receiving help to provide its services. The provision has helped Banff and Buchan, Wigton, Inverness, Moray, Badenoch and Strathspey. A number of small and largely rural authorities have been

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  helped, and I think that they will be the first to say that it is unfortunate that that has happened at the expense of many of the urban authorities.
  If the client group approach is applied, authorities such as Glasgow, Renfrew and Edinburgh emerge with high settlements only to be cut back by the imposition of the 15 per cent. cut-off point. The Minister will probably tell me that such authorities have done very well because they have received 15 per cent., but, on the basis of need and the client group approach, they would have received considerably more. For example, Glasgow would have received £49·5 million, and it has been given only £40·7 million. In that sense, the client group approach has been manipulated to take out the peaks and troughs, but that has led to a redistribution through the formula, which the Government have endorsed, which has gone against the large urban authorities.
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): During the rate support grant debate that took place last year, the hon. Gentleman complained about the cuts in RSG for district authorities. Is he seriously suggesting that a 15 per cent. increase in the needs element is paltry.
  Mr. Dewar: I am saying that if we take the Government's client group approach—presumably the Minister has read the memorandum which has been published to accompany the order—and follow it through, we find that the large urban authorities are receiving less than the undiluted client group approach would give them.
  The moral of the story is that the Government do not want to apply the client group approach because they realise that if it is implemented simpliciter there will be unfairness. Why is it impossible to have the client group approach in its entirety in the distribution of the needs element when there is no holding back of guidelines, which are basically the client group approach? The guidelines—
  Mr. Rifkind rose—
  Mr. Dewar: I shall allow the right hon. and learned Gentleman to intervene in a moment, so that he may receive a briefing from the Under-Secretary of State.
  The guidelines are the basis on which the penalties are enforced. The refusal fully to implement the client group approach in operating the distribution formula serves to underline the way in which the section 5 machinery and the general abatement has been adminstered in the past year or two.
  Mr. Rifkind: It seems that the hon. Gentleman was not listening to my speech with his customary care. If he had, he would have heard me say explicitly that limits have been placed on the extent to which the client group approach will apply to guidelines. There is a maximum increase of 7 per cent. and a maximum reduction of 1·8 per cent.
  Mr. Dewar: I thought that the right hon. and learned Gentleman was referring to the 15 and 17 per cent. peak and trough in the distribution of the needs element. I shall look at that point, but I believe that my general point holds good. We shall have an opportunity to argue it later. I leave it on record.
  Mr. Ancram: The hon. Gentleman is wrong.
  Mr. Dewar: If I am wrong, many others are wrong, too. I believe in precedent. When I am told by the Parliamentary Under-Secretary of State for Scotland that I am wrong, I tend to think that I must be right.
  As for the Secretary of State for Scotland's point about the education expenditure guidelines, I accept that school rolls have dropped. However, every education authority in Scotland overspent its guidelines in 1984–85. Whether they were loyal Tory authorities or, from he Secretary of State's point of view, unsatisfactory Labour authorities, none of them could meet the guidelines. We have not yet received the outturn figures for 1985–86, but it looks as though exactly the same will happen again. I am told that Grampian will probably overspend by 4 per cent., even though it has remained within the guidelines. That is only one example. I could give others.
  Therefore, it can be demonstrated that the education guidelines cannot be attained. The education service, unsatisfactorily funded though it is, is surviving, despite ministerial advice, because it is being financed at the expense of other services in the regions. I understand that if the regions were to meet the 1986–87 guidelines, it would mean a 6·6 per cent. cut, in cash terms, on 1985–86 —a cut of over £78 million. If the Secretary of State believes that such a policy should be implemented, he has scant respect for the crisis in the schools and the crisis of morale that is facing teachers.
  Mr. Michael Forsyth: Will the hon. Gentleman give way?
  Mr. Dewar: No. I am very conscious of the time, and I want to make progress.
  It is important to get across the point that we are referring not to money that may or may not be made available for settling the pay dispute but to the general budget for education. We are facing very substantial cuts. Any teacher would say that there are overwhelming problems over the implementation of the 16 to 18-year-old action plan because of the lack of resources.
  The Secretary of State often comes forward as the ratepayers' champion. That is a very doubtful claim. We have referred to the cuts that have been made in rate support grant settlements in the past few years. Even a reduction of 1p in the domestic element is, I am told, the equivalent of 2 per cent. on the rates. It will have that impact.
  The second order is another example of the hypocrisy of the claim that the Tories are the champions of Scottish ratepayers. The order is designed to provide special help for those who are particularly hurt by revaluation in the domestic sector. The Secretary of State for Scotland was no doubt a horrified spectator when his predecessor shot himself in both feet last year and got into a terrible, panic-stricken muddle. The Opposition remember clearly that in order to defuse the revaluation crisis the right hon. Member for Ayr produced £50 million out of the hat, paraded it, flaunted it and was widely believed to have provided that measure of help for the domestic ratepayer. Then the scheme was unveiled. It provides 100 per cent. relief, but it relates merely to that proportion of the rates that is represented by the excess over an increase of 300 per cent. in rateable value. It was a fraud. The Scottish

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  Office became the patron saint of poster sites and lock-up garages. As the figures are beginning to show, they are the major beneficiaries.
  Whatever rubbish may or may not be spoken tonight, the Secretary of State will agree with me about one fact: that the £50 million turned out to be £25 million or £26 million. The reduction of 100 per cent. relief to 75 per cent. relief means that that figure is further reduced to £20 million. In effect, therefore, the Government are getting two years for the price of one. That should not be a cause for congratulation. I hope that the Secretary of State will look into the causes of the initial concern in his ranks. For example, I remember that the Solicitor-General for Scotland, who has left the Chamber, went public in his constituency and said that there must have been some mistake. The Minister said that it could not possibly be £50 million; that only £25 million or £26 million could be paid out. The Solicitor-General said that he would use his influence, reported the Dundee Courier, to ensure that the whole £50 million was disbursed. We heard nothing more about the Solicitor-General's influence. The Minister should make available the money that the Government advertised.
  I should like to raise two small but important matters. First, I understand that the administrative cost of the scheme in the first year was £500,000. As far as I know, no reimbursement was made and there is no intention of making any in the coming year. That is a charge that falls directly on the ratepayers, and it should not.
  Secondly, reimbursement for the money paid out has been made retrospectively at the end of the financial year.
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  Why should it not be done at the beginning, or at least in staged payments? That might be planned. Perhaps the Minister could say something about it.
  The consumer is interested in rates and services and the combination of the two. There is no doubt about what has happened to rates under this Administration. They have gone up and up. In 1981, the average domestic rate bill in Scotland was £199. This year it was £329—an increase of 97 per cent. Services have crumbled. Despite the Government's claims about profligacy and extravagance, expenditure has remained largely static, certainly in volume terms.
  The inescapable conclusion is that the main determining, and by far the most significant, factor has been the cut in the rate support grant, which has had the cumulative effect that can now be seen in every part of Scotland.
  I understand that the Secretary of State will unveil his rating reform package next week. We are deeply sceptical whether the reports are in any way correct. He knows that we regard a poll tax as utterly unacceptable. No doubt we shall carry on that debate when the time comes.
  Whatever the reform package might be, until present trends are reversed, until the Exchequer contribution is adequate for the needs of the services that it has to support and until the oppressive legislation that has been put on the statute book is scrapped, the situation will continue to deteriorate. Our objection to the order is that it gives no hope of that reversal and shows no sign of a reprieve. It shows that, apparently, no lessons have been learnt. That is why we shall vote against this settlement.
  10.47 pm
  Sir Hector Monro: I warmly congratulate my right hon. and learned Friend on his first speech in his new capacity. He has given us a first-class lead and presented a very good rate support grant.
  It seems to be my misfortune, as night follows day, to follow the hon. Member for Glasgow, Garscadden (Mr. Dewar).
  Mr. Canavan: Day follows night.
  Sir Hector Monro: I can also see the dawn. The hon. Gentleman's speech reminded me of that old Irish saying, that the man who is not confused simply is not well informed. The hon. Gentleman was even more off the rails than he usually is on the rate support grant.
  Tonight is good news night for Dumfries and Galloway. My right hon. and learned Friend announced today the new Dumfries bypass. I am glad that my hon. Friend the Member for Edinburgh, South (Mr. Ancram) has been so involved and that he followed the recommendation of the regional council and of myself. We therefore had the right line. It is warmly welcomed in my constituency.
  The rate support grant settlement is good news too. I hope that we shall consider the housing orders next week, or the week after. Rural areas have at last received fair treatment in the housing revenue account and capital allocations. I hope that in the future we can look forward to relatively low rent increase and further housing developments.
  Tonight we are discussing the rate support grant order. [HON. MEMBERS: "Ah."] Opposition Members do not understand that, in real terms, local authorities are spending more than ever before on providing the services that ratepayers require. There is continual talk of cuts, but the cuts are on the budgets that local authorities would like to have if there were unlimited spending. Hon. Members must recognise that if we had unlimited spending we would be back with the roaring inflation that was bequeathed to us by the Labour Government in 1979. It is because local authorities have that inclination that Governments have to restrict the amount of money available for the rate support grant.
  For years I have said, on the record, that I have felt that the formula for the rate support grant—although we are now using the client group method—was unfavourable to the rural areas. Tonight I can say that the trend has at last been substantially reversed. I am grateful to my hon. Friend the Member for Edinburgh, South, who has been much involved in these negotiations. I am glad to see from the statistics that the region that I represent, along with my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang), has had a 15 per cent. increase in its need grant. That is particularly welcome. The four districts in Dumfries and Galloway have all had an increase. Annandale and Eskdale are up by 13·5 per cent., Nithsdale by 13·2 per cent., Stewartry by 13·1 per cent. and Wigtown by 13·3 per cent. That is good news for rural areas, and all hon. Members should be glad that at last the trend towards substantial increases in the central belt of Scotland has moved further away, to where the money will be welcome.
  Mr. Dewar: The hon. Gentleman no doubt accepts that the overall cash settlement is up by only 2·2 per cent.,
  410
  which in real terms is a substantial cut. If these small rural authorities have done so well, is it not clear that it is at the expense of someone else?
  Sir Hector Monro: Yes, and it is about time, too. For a long time I have been saying that we want the rural areas to get fair treatment, and now at last we have it. That is why I congratulate the Government on accepting the argument that I and my hon. Friends have been making for years. With good housekeeping and authorities that are prepared to be careful in public expenditure, there should be no need for an increase in rates. Councils should have enough income to increase their expenditure and still keep the rates down to the level of inflation. Nithsdale has already said that the rates must be up a ha'penny, or 7 per cent. Good housekeeping and a little pruning would mean that they could keep the rate increase to the rate of inflation, or even to nothing.
  The relationship between guidelines and needs assessment is moving in the right direction. I am glad to know that my right hon. and learned Friend the Secretary of State has been able to keep 75 per cent. of the increase that was obtained last year for ratepayers following the substantial revaluation. That is important, as is the domestic relief at 7p. A year ago it was standing at 1p, it increased to 5p and then to 8p, so my right hon. and learned Friend has done well to keep a domestic relief rate of 7p this year. When councils are careful, they should be nearer to a nil increase than in past years.
  There is much criticism from the Opposition about the rate support grant, but they tend to forget that the settlement of 56·1 per cent. is substantially better than the settlement of 47 per cent. in England and Wales. They should also remember that there is a substantial increase in the Scottish settlement, whereas in England and Wales there was a nil increase, or a standstill, for rate support grant.
  I hope that this will be the penultimate rate support grant order under the present system. I am glad to know that my right hon. and learned Friend will be presenting new proposals later this month. I am sure that they will be widely welcomed by the public, who will at last see that the Government are determined to sort out te nonsense of rates which has existed since they were introduced many years ago. The sooner my right hon. and learned Friend can introduce the changes, the greater the welcome they will receive.
  10.56 pm
  Mr. Donald Stewart: Local authorities in Scotland are at their wits' end to maintain essential services. To anyone who is aware of the problems they have had to face for the past two years, the idea that it could be improved, as the hon. Member for Dumfries (Sir H. Monro) suggests, by good housekeeping and a little pruning makes one wonder what country he has been living in.
  This year's rate support grant makes up only 56 per cent. of the Scottish local authorities' relevant expenditure. In 1976 it amounted to 76 per cent. of relevant expenditure and over 10 years there has been a decrease of 20 per cent. Since the Government took office, control over the action of local authorities has amounted to a virtual strangehold. They have taken powers to claw back rate support grant, to determine rate levels and to determine council house rent increases. We all know that

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  the Government's formula for determining what is reasonable expenditure is weird and wonderful. I do not wish to cover that ground again. I want to deal with the Government's actions and the effect they are having.
  The levels of rate support grant in recent years have not been sufficient to keep up with inflation. In 1984–85, the increase was only 3·1 per cent. In this financial year, the increase is 4·9 per cent. The amount offered for next year represents an increase of only 3·9 per cent. Every year, the level of grant is being cut in real terms.
  I have already said that grant has been steadily reduced as a percentage of relevant expenditure. Scottish Office Ministers often say that local government expenditure is in some way excessive and out of control. That is nonsense. In this financial year the local authority budget, after adjustment for clawback, is only marginally larger than it was in 1978–79. The increase has been in the region of 0·5 per cent. When one considers the level of inflation in the past six or seven years, it is clear that local authorities cannot possibly be expected to maintain services at a reasonable level unless they inflict large rate and rent increases upon the population. That is what has happened. It is because of the vindictiveness of the Government that Scottish ratepayers are having a hard time. It is not because of what local authorities are doing. The fault lies with the Government.
  On the subject of overall expenditure, it is worth noting that, if all the Scottish local authorities kept within the guideline figures set by the Government for this year, expenditure in volume terms would be 2 per cent. lower than in 1978–79. Is that a realistic proposition? The Government expect the local authorities to bear the brunt of their attempt to keep public spending down, although the Government's spending in certain areas has rocketed. I shall give some examples.
  Because of the failure of the Government's economic policies, spending on social security will increase by 25 per cent. between 1983–84 and 1987–88. Over the same period, defence spending will increase by 22 per cent. and spending on law and order by 21 per cent. Taking all Departments into account, the Government's expenditure will increase by 18 per cent. over that period.
  The fact is that local government is doing a good job in keeping its spending under control, and the Government are in no position to point the finger at it in that regard. However, because of the Government's policies, local government is being made the scapegoat.
  On a different but equally serious point, the level of grant for this year does not show that education authorities in Scotland will be in a better position next year than at present to make an offer to settle the teachers' dispute. It has been said that not one local authority can meet the education guidelines. What has the Secretary of State to say about that? It is very worrying, because none of us wants the dispute to carry on into 1986–87. If the Government have any intention to make extra cash available, we should be told. Otherwise, the prospect is not good.
  The Secretary of State referred to the £26 million for the relief of rates. The figure announced at the Tory conference was £50 million for one year. That was the implication. but then the figure was apparently cut in half.
  I wish to comment upon one interesting aspect of rate support grant clawback. Apparently clawback money in Scotland goes straight back to the Treasury. In England any such money is redistributed among other local
  412
  authorities. Perhaps the Secretary of State can verify or deny that. If that is so, it is pathetic. Not only does the right hon. and learned Gentleman have to carry out the orders of the Prime Minister, but, having done so, he is not allowed to keep any of the spoils.
  The previous Secretary of State has now been rewarded for his faithful, lackey-like service by being promoted out of the political graveyard that is the Scottish Office. The new Secretary of State has demonstrated in the past—over the devolution issue for one thing—that he is capable of making up his own mind. However, if he continues to allow Scottish local authorities and the Scottish people to suffer as much as at present, he will be no better than his predecessor.
  11.2 pm
  Mr. Barry Henderson: The right hon. Member for Western Isles (Mr. Stewart) said that local authorities are at their wits' end to maintain services. I wonder whether that stands up to examination. When the Labour Government were in power, both manpower levels and spending were lower than they are now. During this Government's period of office, local authorities have increased their spending in real terms, and most particularly and unarguably, have increased their manpower levels at a time when the number of pupils has been falling and education is the largest consumer of manpower. That is a measure of the extent to which the local authorities seem not to be at their wits' end.
  I shall take Fife regional council as an example, as I know more about it than other local authorities. It is trying to ram a brand new swimming pool down the throat of Kirkcaldy district council, which does not want it. Fife regional council has no business doing that— [HON. MEMBERS: "What?"] In case hon. Members are not aware, recreation and leisure are the responsibility of district councils nowadays. The regional council is taking on 100 more social workers. One can see the advertisements in any appropriate newspaper. Although there are fewer pupils and fewer teachers it has increased substantially the education directorate. It is also expanding the strategic planning department. Those are the kind of things that Fife regional council is doing. When the right hon. Gentleman says that councils are at their wits' end to know how to continue services, it does not add up.
  I welcome the rate support grant settlement. I was glad to read in a local newspaper that North-East Fife district council was pleasantly surprised at its allocation for next year. I understand that the district council has calculated that the saving to the ratepayer will be 1·7p in the pound because the district council will benefit in the needs element by the addition of 7·1 per cent. compared with what it had last year.
  As that high-spending Labour authority, Fife regional council, has said nothing about the settlement, I can only assume that it is content, because it is always quick to complain when something does not suit it. I understand that it will benefit by an increase of about 6·1 per cent. in the needs element. That is perhaps why it has not said anything about the rate support grant settlement this year.
  According to the figures I have worked out on the back of an envelope—my hon. Friend will correct me if I am wrong—if the expenditure of both North-East Fife district council and Fife regional council is at or anywhere near the guidelines, it should result in a rate reduction for

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  the ratepayers in my part of the world. I hope we will get that. I am sure that neither of those local authorities will give any credit to a Tory Government if that is the result.
  I hope that Fife regional council, at least in this election year, will try to do something to curb its outrageous demands upon the ratepayer and perhaps just for once seek to make a reduction in rates. None of us will complain if the council takes the credit for itself, where it least belongs. It was only last year that it increased the ratepayer's burden by 10p in the pound. In the last 10 years it has moved from being the lowest to the highest spending local authority in Scotland. I welcome warmly the thrust of what my right hon. and learned Friend has done in the rate support grant settlement.
  On the whole business of the client group formula, I recognise the desire of everyone to achieve a more objective way of determining the distribution of rate support grant. The client group formula is a useful tool to that end. As the formula has been increasingly used to determine needs and guidelines, and as the guidelines have become increasingly important in determining the distribution of rate support grant, they come close to being a cash limit. It puts a spotlight on the formula, which its perfections may not be able to deal with.
  There are dangers in blindly following a mathematical formula. That is recognised by what my right hon. and learned Friend has done in the settlement. [Interruption.] I am sorry that some hon. Gentlemen do not understand that the client group formula is important in the determination of rate support grant. Given the fact that the Government have recognised the need to limit the effect of the mathematical purity of the formula to be fair to authorities such as North-East Fife and Fife region, I hope that my right hon. and learned Friend will consider other ways in which the formula can be improved for the future.
  One other problem for local authorities as they approach their budgets for the coming financial year is that, in the wake of the revaluation, I understand they will find it difficult to be certain of the exact product of a penny rate. In general that is a problem, but in Fife it will be a particular problem, given the uncertainty about the valuation to be placed on Moss Morran, which is a large, single rateable property. The relationship between the exact product of a penny rate and what I understand is the national average penny rate can have substantial effects on the way local authority finance is determined in the coming year. I hope my hon. Friend will pay attention to that when he is looking at the budgets put forward by local authorities. I thank him for what he has done in making a more just settlement this year than we have seen in recent years.
  11.12 pm
  Mr. David Lambie: This has not been a happy year for Scottish ratepayers and next year will be even worse if this rate support grant order is passed. That is why I will vote against it tonight, as I have voted against every rate support grant order, irrespective of the party in power. I have made that speech before, but there is nothing better than repeating a good speech and showing that some hon. Members vote according to their consciences and not according to a party line.
  Local authority independence has been eroded by continual attacks. This order is a continuation of that
  414
  attack. During the period of office of this Government, the rate support grant has gone down by 12 per cent. That is a direct attack on the ratepayers of Scotland. My local authority, Cunninghame district council, has managed to control its expenditure on its own services. It is budgeting for an increase next year of only 1·8 per cent., at a time when the rate of inflation is around 5 or 6 per cent. That local authority has done its best to contain expenditure, but it has not been able to control the cost of money.
  When fixing its budget last year, the Labour authority in Cunninghame believed in the statement by the Prime Minister and the Chancellor of the Exchequer that economic policies were succeeding and that interest rates would gradually go down. Cunninghame district council estimated in last year's budget that rates of interest would go down. Now it finds, when balancing the books at the end of the half year, that it is £1·5 million out, not because of any extra expenditure by the council, but because the Government's economic policy is a shambles and in ruins, and local authorities have been asked to pick up the tab.
  Not only is the council £1·5 million out—that was the figure I was given last week—but with the increase in rate of interest over the last two days and the increase that will come tomorrow, the authority will face an even greater deficit at the end of the financial year. I asked the Secretary of State what allowance for interest the Government made this year in the rate support grant. He told me that that did not really matter because local authorities would be compensated. I hope his hon. Friend will tell me what allowance within the rate support grant formula was made for rates of interest for the next financial year.
  Mr. Ancram: I am glad to give the hon. Gentleman the answer to his question. An interest rate of 11 per cent. has been applied. As in past years, as my right hon. and learned Friend pointed out, the aggregate of rate support grant will be revised when actual interest rates are known.
  Mr. Lambie: I am grateful for that information. It shows that the Government are estimating that during the next financial year interest rates will average about 11 per cent., yet we know that if the Government carry on with their present policies we shall have another year of high interest rates, and local authorities going to the open market will need to borrow at the rate of 15 per cent. or 16 per cent. There will be another deficit next year when we start to balance the books again. Will the Secretary of State make greater allowances for the increasing rates of interest on all local authorities in Scotland?
  Not only has the Secretary of State reduced the percentage of the present rate support grant; he has also dealt with the rate fund contribution to the housing account. Not only will the ratepayers in Cunninghame be faced with substantial increases in rates; according to the figures given for the rate fund contribution of just over £2 million, we are facing rent increases of £2·62 per week. That applies not only in the local authority area but in the Scottish special housing association area which has rent increases of 11·28 per cent. at a time when the rate of inflation is about 5 per cent. At a time when the people who stay in the new towns, especially in Irvine new town, are facing unemployment on a scale that we have never known before, the development corporation has also increased rents, but this time by only 6·5 per cent.
  If the hon. Member for Dumfries (Sir H. Monro) is happy about how his ratepayers will be affected, my

  415
  ratepayers and my constituents are not. They will face substantial increases of over £5 a week in rents and rates because of the Government's policies.
  I was surprised to hear the hon. Member for Dumfries say that he was happy that the Government were going to reform the rating system and introduce a poll tax. I remember that a year ago the hon. Gentleman told us that we did not need to worry about the effects of revaluation because the Government would introduce help in order to do away with the effects of revaluation in Scotland. We know that that has not come about.
  When we were dealing with the differential between the valuation in Scotland compared with that in England, the hon. Gentleman said that that would be changed and that Scottish ratepayers would be allowed to make direct comparisons with similar properties in England and Wales. Again, the Government conned us. Now I am receiving letters and representations from the Scottish Rugby Union. a deputation came down yesterday from Kirkcaldy rugby club complaining about the fact that they were conned two years ago, not only by the hon. Member for Dumfries but by the Government.
  The former Secretary of State caught himself on a hook. In order to overcome the uproar in Scotland following revaluation last year, he said that he would reform the rating system. The new Secretary of State was not party to that and I hope that he will look at it. In the past, whenever Scotland has gone it alone on local government matters and valuation we have always suffered. We have carried out revaluation nearly every five years in Scotland since 1973 and England and Wales has the sense to stop it in 1973. We know the ratepayers who are paying for that and who are feeling the effects of this continual revaluation of property in Scotland when there was a standstill in England. We know what those effects are.
  If rate reform for Scotland is so good, why are they not having it in England and Wales? Why does it take the Cabinet only 20 minutes to decide that it will reform the rating system in Scotland by introducing a new poll tax? All that will happen is that when the Scottish people pay more under the new system, English ratepayers will be walking to the banks to bank their money.
  Mrs. Anna McCurley: Scotland, for once, may be in the van of innovation, but that is something that the hon. Gentleman seems to resent.
  Mr. Lambie: I do not mind being in front when dealing with public investment, reductions in unemployment and extra expenditure on better facilities for education, but I object to being in front if it means that Scotland will be paying more and the English will be paying less. That is the point that I am making. We were conned last year by the Tory Government over revaluation, and we shall be conned again this year if they reform the rating system. The new Secretary of State has a chance to make his name and he should make it by scrapping the proposed system. If the Government are going to make changes, they should do so by giving 100 per cent. Government grant. That is the only way to reform the rating system. The Government should leave local democracy and allow local authorities to decide their priorities locally, and they should not interfere with the amount of money that they give.
  11.22 pm
  Mrs. Anna McCurley: As the report from COSLA said, last year was not a happy one for Scottish ratepayers. This year looks a good bit better. I am pleased that the Government are retaining relief for domestic ratepayers, irrespective of the fact that it is lower at 75 per cent. We were promised £50 million. We spent £26 million last year. We shall spend £20 million this year. Does that mean that we will have two years for the price of one? Is that a good form of accounting?
  I was pleased that this year I did not receive the same volume of protests about the rate support grant as I received last year. I appreciate the way in which my right hon. and learned Friend has been influenced by the vigorous representations that he has received from my district councils. I hope that those vigorous representations included mine. It seems to have paid off for the Renfrew and Inverclyde district councils because my right hon. and learned Friend and the Government have done nicely by us with the needs element, as both councils have achieved the maximum gains available. I notice that they are moving much closer to the guidelines, which must mean that they are indulging in better housekeeping.
  The COSLA document this year was much more restrained than last year. That is a welcome change. There is a curiously worded passage in the document. It exhorts us to recognise local government's achievements, as if local government were an endangered species, instead of a greedy and burgeoning one.
  A covering letter to the report states that the Government should not interfere in local government, as if we were in the process of disturbing the balance of nature by doing so. At the same time, it asks for our support in force-feeding funds to local government which seems to me a curious paradox. It is time that local government in Scotland accepted the need to abide by its creator's plans, though it may be a matter of regret to it.
  I have said in the past that the Government have been a bit tough on local government, but I have never disputed the need for tighter controls of public expenditure, principally because there was too great a degree of uncertainty in the annual round of financial adjustments which, I believe, caused unnecessary friction between the parties concerned. Co-operation between the two layers of government is very desirable, and is something at which each in turn should aim. It has, however, always been a sad feature of the existing system that the public duty to call local government to account has had to be assumed by central Government, to the detriment of local government, despite its support for the ratepayer.
  We are all extremely anxious to know what will happen next Tuesday with the advent of the Green Paper. I do not believe that it will necessarily lead to a restoration of bygone levels of rate support grant, but I think I can safely assume that the basis of calculation will be linked with a wider and more equitable spread of financing from the public. I hope that the new-look ratepayer will be freed from what is tantamount to an élite status. Ratepaying has become a hallmark of material success, or, rather, mythological material success. This is clearly nonsense for those on fixed incomes.
  In thanking my right hon. and learned Friend tonight for what he has done at district level, I am conscious of the fact that there are some critics who will never be satisfied, but I am putting on record the fact that our

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  Conservative Government have acknowledged the needs of my constituents, at any rate, even within the bounds of restraint.
  11.27 pm
  Mr. Charles Kennedy: Listening to the contributions from the three Tory Back Benchers, and to the tenor and substance of the orders that the Secretary of State seeks to have passed by the House tonight, I find it very sad that these demoralised troops have at their head a new general, who has apparently decided that it is in the best interests of both the Scottish Office and Scotland as a whole for the war of attrition with local government to continue. I think that the right hon. and learned Gentleman will find, in many of his other policies as well as these, that the recent indications of public opinion in Scotland, showing the alliance in second place and the Conservatives languishing at the bottom of the poll, will be reflected in the ballot box at the next general election.
  Turning to what the new Secretary of State is proposing tonight, on the issue of the guidelines, it is apparent—[Interruption.] I am sure that the hon. Member for Grantham (Mr. Hogg) is an absolute expert on Scottish politics; he is geographically well placed to be so.
  The first difference that distinguishes these ventures, as indeed the Opposition generally, from the Government is that—[Interruption.] I think that there would be more respect for the hon. Gentleman had he bothered to be here during the debate—the assessment of needs locally is surely a fundamental priority and principle of local government. The way in which the guidelines have been administered by the Scottish Office has done much to erode that principle and, therefore, to erode local government in practice.
  On revaluation, the £50 million relief package announced last year by the Scottish Secretary has, as the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) pointed out, been shown to be nothing more than £25 million in two lots, spread over two years. The effect of that, when we add the clawback by the Scottish Office from local authorities of £126 million last year, makes it an exercise in fraud for Scottish Office Ministers to try to pose as friends of Scottish ratepayers.
  The Green Paper, which we expect shortly, gives the Secretary of State an opportunity to break new ground. He may feel that his predecessor has handed him a poisoned chalice in that respect. If he is to break new ground and go it alone without England and Wales, he would be well advised to take advantage of the computerised Inland Revenue system, and restore accountability to local authorities by coupling both greater financial autonomy through local income tax with reform of the electoral system through proportional representation. That is what he should do, if he wants to be radical and innovative. If he does that, he will have our support. The Saatchi and Saatchi so-called community charge, which is a poll tax under another name, is something that we would not support. In the same way, we shall not support the orders tonight.
  11.30 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): We are all interested
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  to hear the alliance when it produces its policies, and, although it took only 10 seconds to deliver, we heard something purporting to be a policy tonight. I found it difficult to hear, but I thought I heard the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) say that the alliance would take second place in Ross, Cromarty and Skye. We shall look forward to that.
  Owing to the shortage of time, I hope that hon. Members will forgive me if I do not answer the debate in detail. I am grateful to my hon. Friends the Members for Dumfries (Sir H. Monro) for Renfrew, West and Inverclyde (Mrs. McCurley) and for Fife, North-East (Mr. Henderson) for their welcome to this year's settlement. Hon. Members may remember that last year there was a great deal of anxiety on conservative Back Benches. Obviously, this time the settlement has operated more fairly in respect of the district councils about which my hon. Friends were worried last year.
  What fascinated me about the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar) was that last year he asked us to give help to the authorities that have received help under this settlement. Last year he was critical of the scale of grant movements, and he told us that we were moving too fast towards the client group approach on grant distribution. One year later, when suddenly he finds that his strictures, if not listened to, have been applied in the new settlement, he changes his tune. He now accuses us of political bias. Those who have gained by the maximum limit of 15 per cent. are headed by Midlothian, Edinburgh and Glasgow, which are not Conservative administrations as far as I know. As the hon. Gentleman represents a Glasgow constituency, I am surprised to hear him complaining that a 15 per cent. increase in rate support grant is insufficient.
  More interesting, the logic of the hon. Gentleman's argument was that we should apply the client group approach for grants because it would give Glasgow more. It would have other interesting effects. Looking at the list of authorities still well above the client group approach, this year Cumnock and Doon district council lost 7 per cent. on its needs element, but it is still 159 per cent. above its client group for grant purposes. Following the hon. Gentleman's argument, he would expect that grant to be reduced by that amount in future. Other councils will be interested to hear his argument. Stirling is 127 per cent. above client group for grant, Aberdeen 105 per cent. and East Lothian 112 per cent. All those authorities and West Lothian would lose a considerable amount of grant if we adopted the hon. Gentleman's strictures. It was precisely because we have tried to avoid such reductions and variations that we have fixed the limitations, which the hon. Gentleman criticised.
  As the hon. Gentleman knows, the rate relief order is based on a formula, and its cost is calculated on the basis of those who qualify under it. He asked about the payments that were made. They were staged this year, and will be staged again in future.
  The hon. Member for Garscadden will have to wait until next week to find out about the rate reform suggestions. It is clear from what we have heard that if there is one part in the Chamber that has no intention of reforming the rates in any way. it is the Labour party. That is because the existing rating system suits high-spending Labour councils. It will never be in the interests of the hon. Member for Garscadden to reform the rates.
  Question put:—
  The House divided: Ayes 221, Noes 180.

  Division No. 45]

  [11.35 pm

  AYES

  Aitken, Jonathan

  Forth, Eric

  Alexander, Richard

  Franks, Cecil

  Alison, Rt Hon Michael

  Fraser, Peter (Angus East)

  Amess, David

  Freeman, Roger

  Ancram, Michael

  Fry, Peter

  Arnold, Tom

  Gale, Roger

  Ashby, David

  Galley, Roy

  Aspinwall, Jack

  Gardner, Sir Edward (Fylde)

  Atkins, Robert (South Ribble)

  Garel-Jones, Tristan

  Atkinson, David (B'm'th E)

  Goodlad, Alastair

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

  Gow, Ian

  Baker, Nicholas (Dorset N)

  Grant, Sir Anthony

  Baldry, Tony

  Greenway, Harry

  Banks, Robert (Harrogate)

  Gregory, Conal

  Beaumont-Dark, Anthony

  Griffiths, Sir Eldon

  Bellingham, Henry

  Griffiths, Peter (Portsm'th N)

  Bendall, Vivian

  Grist, Ian

  Bevan, David Gilroy

  Ground, Patrick

  Biffen, Rt Hon John

  Grylls, Michael

  Biggs-Davison, Sir John

  Gummer, Rt Hon John S

  Blaker, Rt Hon Sir Peter

  Hamilton, Hon A. (Epsom)

  Body, Sir Richard

  Hamilton, Neil (Tatton)

  Bonsor, Sir Nicholas

  Hampson, Dr Keith

  Boscawen, Hon Robert

  Hanley, Jeremy

  Bottomley, Peter

  Hannam, John

  Bottomley, Mrs Virginia

  Harris, David

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

  Harvey, Robert

  Bowden, Gerald (Dulwich)

  Hawkins, Sir Paul (N'folk SW)

  Bright, Graham

  Hawksley, Warren

  Brinton, Tim

  Hayes, J.

  Brooke, Hon Peter

  Hayward, Robert

  Brown, M. (Brigg & Cl'thpes)

  Heathcoat-Amory, David

  Browne, John

  Henderson, Barry

  Bruinvels, Peter

  Hickmet, Richard

  Bryan, Sir Paul

  Higgins, Rt Hon Terence L.

  Buck, Sir Antony

  Hogg, Hon Douglas (Gr'th'm)

  Budgen, Nick

  Holland, Sir Philip (Gedling)

  Bulmer, Esmond

  Holt, Richard

  Burt, Alistair

  Howard, Michael

  Butcher, John

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

  Butler, Rt Hon Sir Adam

  Howarth, Gerald (Cannock)

  Carlisle, Kenneth (Lincoln)

  Howell, Ralph (Norfolk, N)

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

  Hubbard-Miles, Peter

  Carttiss, Michael

  Hunt, David (Wirral, W)

  Cash, William

  Hunter, Andrew

  Chalker, Mrs Lynda

  Jackson, Robert

  Chapman, Sydney

  Jessel, Toby

  Chope, Christopher

  Jones, Robert (Herts W)

  Churchill, W. S.

  Jopling, Rt Hon Michael

  Clark, Sir W. (Croydon S)

  Kellett-Bowman, Mrs Elaine

  Clarke, Rt Hon K. (Rushcliffe)

  Kershaw, Sir Anthony

  Cockeram, Eric

  Key, Robert

  Colvin, Michael

  King, Roger (B'ham N'field)

  Conway, Derek

  Knight, Greg (Derby N)

  Coombs, Simon

  Knowles, Michael

  Cope, John

  Knox, David

  Cranborne, Viscount

  Lamont, Norman

  Crouch, David

  Lawler, Geoffrey

  Currie, Mrs Edwina

  Lawrence, Ivan

  Dorrell, Stephen

  Lee, John (Pendle)

  Douglas-Hamilton, Lord J.

  Leigh, Edward (Gainsbor'gh)

  Dover, Den

  Lennox-Boyd, Hon Mark

  du Cann, Rt Hon Sir Edward

  Lester, Jim

  Dunn, Robert

  Lewis, Sir Kenneth (Stamf'd)

  Durant, Tony

  Lightbown, David

  Dykes, Hugh

  Lilley, Peter

  Eggar, Tim

  Lloyd, Peter (Fareham)

  Evennett, David

  Lord, Michael

  Fallon, Michael

  McCurley, Mrs Anna

  Favell, Anthony

  MacGregor, Rt Hon John

  Fenner, Mrs Peggy

  MacKay, Andrew (Berkshire)

  Finsberg, Sir Geoffrey

  MacKay, John (Argyll & Bute)

  Fletcher, Alexander

  Maclean, David John

  Fookes, Miss Janet

  Major, John

  Forman, Nigel

  Malins, Humfrey

  Forsyth, Michael (Stirling)

  Malone, Gerald

  420

  Maples, John

  Powley, John

  Marland, Paul

  Proctor, K. Harvey

  Marlow, Antony

  Rathbone, Tim

  Marshall, Michael (Arundel)

  Rees, Rt Hon Peter (Dover)

  Mates, Michael

  Rhodes James, Robert

  Mather, Carol

  Rhys Williams, Sir Brandon

  Maude, Hon Francis

  Ridley, Rt Hon Nicholas

  Mawhinney, Dr Brian

  Rifkind, Rt Hon Malcolm

  Meyer, Sir Anthony

  Roe, Mrs Marion

  Miller, Hal (B'grove)

  Rossi, Sir Hugh

  Mills, Iain (Meriden)

  Rowe, Andrew

  Mitchell, David (Hants NW)

  Sainsbury, Hon Timothy

  Moate, Roger

  Sayeed, Jonathan

  Monro, Sir Hector

  Shaw, Giles (Pudsey)

  Montgomery, Sir Fergus

  Silvester, Fred

  Morris, M. (N'hampton, S)

  Speed, Keith

  Moynihan, Hon C.

  Stern, Michael

  Mudd, David

  Stevens, Lewis (Nuneaton)

  Neale, Gerrard

  Stokes, John

  Needham, Richard

  Taylor, John (Solihull)

  Nicholls, Patrick

  Thompson, Donald (Calder V)

  Norris, Steven

  Thompson, Patrick (N'ich N)

  Oppenheim, Phillip

  Thurnham, Peter

  Oppenheim, Rt Hon Mrs S.

  Townend, John (Bridlington)

  Osborn, Sir John

  Twinn, Dr Ian

  Ottaway, Richard

  Viggers, Peter

  Page, Richard (Herts SW)

  Wakeham, Rt Hon John

  Parkinson, Rt Hon Cecil

  Walker, Bill (T'side N)

  Parris, Matthew

  Wardle, C. (Bexhill)

  Patten, Christopher (Bath)

  Warren, Kenneth

  Patten, J. (Oxf W & Abdgn)

  Watson, John

  Pawsey, James

  Yeo, Tim

  Peacock, Mrs Elizabeth

  Percival, Rt Hon Sir Ian

  Tellers for the Ayes:

  Pollock, Alexander

  Mr. Michael Neubert and

  Porter, Barry

  Mr. Ian Lane.

  Powell, William (Corby)

  NOES

  Adams, Allen (Paisley N)

  Coleman, Donald

  Alton, David

  Conlan, Bernard

  Anderson, Donald

  Cook, Frank (Stockton North)

  Archer, Rt Hon Peter

  Cook, Robin F. (Livingston)

  Ashdown, Paddy

  Cox, Thomas (Tooting)

  Ashton, Joe

  Craigen, J. M.

  Atkinson, N. (Tottenham)

  Crowther, Stan

  Bagier, Gordon A. T.

  Cunliffe, Lawrence

  Banks, Tony (Newham NW)

  Cunningham, Dr John

  Barnett, Guy

  Dalyell, Tam

  Barron, Kevin

  Davies, Rt Hon Denzil (L'lli)

  Beckett, Mrs Margaret

  Davies, Ronald (Caerphilly)

  Beith, A. J.

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

  Bell, Stuart

  Deakins, Eric

  Benn, Rt Hon Tony

  Dewar, Donald

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

  Dobson, Frank

  Bermingham, Gerald

  Dormand, Jack

  Bidwell, Sydney

  Douglas, Dick

  Blair, Anthony

  Dubs, Alfred

  Boothroyd, Miss Betty

  Dunwoody, Hon Mrs G.

  Boyes, Roland

  Eadie, Alex

  Bray, Dr Jeremy

  Eastham, Ken

  Brown, Gordon (D'f'mline E)

  Evans, John (St. Helens N)

  Brown, Hugh D. (Provan)

  Fatchett, Derek

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

  Faulds, Andrew

  Brown, Ron (E'burgh, Leith)

  Field, Frank (Birkenhead)

  Bruce, Malcolm

  Fields, T. (L'pool Broad Gn)

  Buchan, Norman

  Fisher, Mark

  Caborn, Richard

  Flannery, Martin

  Callaghan, Jim (Heyw'd & M)

  Foot, Rt Hon Michael

  Campbell, Ian

  Forrester, John

  Campbell-Savours, Dale

  Foster, Derek

  Canavan, Dennis

  Foulkes, George

  Carlile, Alexander (Montg'y)

  Fraser, J. (Norwood)

  Clark, Dr David (S Shields)

  Freeson, Rt Hon Reginald

  Clarke, Thomas

  Garrett, W. E.

  Clay, Robert

  George, Bruce

  Clelland, David Gordon

  Gilbert, Rt Hon Dr John

  Clwyd, Mrs Ann

  Godman, Dr Norman

  Cocks, Rt Hon M. (Bristol S.)

  Gould, Bryan

  Cohen, Harry

  Hamilton, James (M'well N)

  421

  Hamilton, W. W. (Fife Central)

  Morris, Rt Hon A. (W'shawe)

  Hardy, Peter

  Morris, Rt Hon J. (Aberavon)

  Harman, Ms Harriet

  Nellist, David

  Harrison, Rt Hon Walter

  O'Brien, William

  Hart, Rt Hon Dame Judith

  O'Neill, Martin

  Heffer, Eric S.

  Park, George

  Hogg, N. (C'nauld & Kilsyth)

  Parry, Robert

  Holland, Stuart (Vauxhall)

  Patchett, Terry

  Home Robertson, John

  Pavitt, Laurie

  Hughes, Robert (Aberdeen N)

  Pendry, Tom

  Hughes, Roy (Newport East)

  Penhaligon, David

  Hughes, Simon (Southwark)

  Pike, Peter

  Jenkins, Rt Hon Roy (Hillh'd)

  Powell, Raymond (Ogmore)

  John, Brynmor

  Prescott, John

  Johnston, Sir Russell

  Randall, Stuart

  Jones, Barry (Alyn & Deeside)

  Redmond, Martin.

  Kaufman, Rt Hon Gerald

  Rees, Rt Hon M. (Leeds S)

  Kennedy, Charles

  Richardson, Ms Jo

  Kilroy-Silk, Robert

  Robertson, George

  Kirkwood, Archy

  Rogers, Allan

  Lambie, David

  Rooker, J. W.

  Lamond, James

  Ross, Stephen (Isle of Wight)

  Leighton, Ronald

  Rowlands, Ted

  Lewis, Ron (Carlisle)

  Ryman, John

  Litherland, Robert

  Sedgemore, Brian

  Lloyd, Tony (Stretford)

  Sheerman, Barry

  Loyden, Edward

  Sheldon, Rt Hon R.

  McKay, Allen (Penistone)

  Shore, Rt Hon Peter

  MacKenzie, Rt Hon Gregor

  Short, Ms Clare (Ladywood)

  Maclennan, Robert

  Silkin, Rt Hon J.

  McNamara, Kevin

  Skinner, Dennis

  McTaggart, Robert

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

  McWilliam, John

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

  Madden, Max

  Soley, Clive

  Marek, Dr John

  Spearing, Nigel

  Marshall, David (Shettleston)

  Steel, Rt Hon David

  Martin, Michael

  Stewart, Rt Hon D. (W Isles)

  Maxton, John

  Stott, Roger

  Maynard, Miss Joan

  Strang, Gavin

  Meacher, Michael

  Straw, Jack

  Michie, William

  Thomas, Dafydd (Merioneth)

  Mikardo, Ian

  Thompson, J. (Wansbeck)

  Millan, Rt Hon Bruce

  Thorne, Stan (Preston)

  Miller, Dr M. S. (E Kilbride)

  Tinn, James

  Mitchell, Austin (G't Grimsby)

  Torney, Tom

  422

  Wallace, James

  Winnick, David

  Wareing, Robert

  Woodall, Alec

  Welsh, Michael

  White, James

  Tellers for the Noes:

  Williams, Rt Hon A.

  Mr. Don Dixon and

  Wilson, Gordon

  Mr. Frank Haynes.

  Question accordingly agreed to.
  Resolved,
  That the Rate Support Grant (Scotland) (No. 4) Order 1985, dated 18th December 1985, which was laid before this House on 19th December, be approved.

  Rate Support Grant (Scotland)

    RATE SUPPORT GRANT (SCOTLAND)
    Resolved,
    That the draft Revaluation Rate Rebates (Scotland) (No. 2) Order 1985, dated 18th December 1985, which was laid before this House on 19th December, be approved.—[Mr. Rifkind.]

  STATUTORY INSTRUMENTS, &c.

    REPRESENTATION OF THE PEOPLE
    Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committee on Statutory Instruments, &c.)
    That the Representation of the People (Northern Ireland) (Amendment) Regulations 1985, dated 22nd November 1985, a copy of which was laid before this House on 28th November, be approved.
    That the Representation of the People (Amendment) Regulations 1985, dated 20th November 1985, a copy of which was laid before this House on 28th November, be approved.
    That the Representation of the People (Scotland) (Amendment) Regulations 1985, dated 29th November 1985, a copy of which was laid before this House on 4th December, be approved.—[Mr. Maude.]
    Question agreed to.

  Merchant Service
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Maude.]
  11.47 pm
  Mr. Dick Douglas: Before dealing with the subject of this Adjournment debate, may I say that I understand that the Minister who is to reply to the debate has been elevated to Minister of State. I hope that that augurs well for the quality of the reply that I shall receive.
  I propose to raise the subject of the implications for the United Kingdom merchant service of the decision by British Petroleum Shipping to end direct employment of its seagoing personnel. This is the latest and one of the highest profile issues to affect the viability of the United Kingdom's merchant shipping capacity. The issues involved affect the Government's role as a shareholder of the parent company. Despite their tendency to privatise, the Government still have a 31·7 per cent. holding in British Petroleum. However, they show an apparent lack of concern for strategic and conventional merchant shipping and for the need to maintain highly skilled seafarers. They also show a lack of concern for the maintenance of good industrial relations.
  The White Paper, "The Falklands Campaign: The Lessons", referred to the crucial role of the Merchant Navy. Eight of the ships owned by British Petroleum went to the Falklands. I understand that two others were involved but did not go to the Falklands.
  The Defence Select Committee, of which I am a member, examined these issues and reported in May 1985. We were anxious about the availability of merchant shipping to meet possible defence needs. I shall not detain the House by quoting the report extensively, but paragraphs 15 to 17 are crucial and concern registration. Paragraph 15 says:
  "In our view potential legal and political difficulties may make it unwise to rely on the total which the Department of Transport believes to be available for requisition."
  We drew attention to the disparity between what the Department thought was available in times of emergency and shipping strictly under the United Kingdom flag.
  Since 1975, there has been a continued diminution in the size of the United Kingdom flag fleet. I am relying not on statistics made available to the Select Committee but on the General Council of British Shipping review of 1985. In December 1975, there were 1,614 United Kingdom-owned and registered ships of 500 gross registered tonnes and over, and deadweight tonnage of 50 million. In December 1980, that had fallen to 1,141 ships or 35·6 million tonnes deadweight. It fell again to 647 ships or 16·6 million tonnes deadweight, by June 1985. That is a dramatic decrease which should worry us all.
  In their wisdom, the Government commissioned a report from the Seagroup—part of Lloyd's of London Press Ltd. —which gave projections of the United Kingdom flag fleet from 15984 to 1992. I shall not bore the House with the statistics. I simply want to know whether the 30 BP ships that are to be manned out to three agencies in particular are in the Seagroup report? If they are, BP Shipping's action undermines the report's view about the availability of ships in times of emergency.
  Training suitable manpower also worries us, but I shall now consider good industrial relations. I appreciate that
  424
  there is some merit in the company's view. It makes the claim, in a press release, that, by opting for agency manning and taking other actions, it will be able to match more closely the competition of independent operators However, this decision, announced to the press on 8 January, was not one that had had a long period of gestation and consultation with the trade unions. I am reliably informed that the trade unions received this information by letter just minutes before it was announced to the press. That is not the behaviour that I would expect from any industrial company of any magnitude, and certainly not one in which the Government are a major shareholder.
  I am not negotiating for the National Union of Seamen or the National Union of Marine, Aviation and Shipping Transport Officers. However, I am sure that the unions, having taken cognisance of the fact that the company had lost £160 million in the past five years, would have been alive to the company's difficulties and only too ready to sit round the table to try to reach a mutually advantageous arrangement.
  It is surprising that the company has gone for manning agencies. It has produced some figures showing the difference in cost. I quote from table 10, in a report issued by the International Transport Federation, but with figures issued by BP itself. It shows that there can be considerable cost saving from United Kingdom officers and ratings, including pension and social security payments. The cost per 225,000 tonnes dead weight tanker would be £790,000 a year.
  The report also gives some agency manning figures, which are worth examining. A Filipino company would cost £450,000 per ship. One United Kingdom manning company would cost £423,000, another United Kingdom company £470,000, and yet another £554,000. Therefore, if BP wants to go for manning companies, why does it not discuss with the unions the possibility of going for United Kingdom companies? Why is BP going for the company on which it has decided? I severely disapprove of BP Shipping's decision. I believe that it has gone to manning companies so that it can directly attack the trade unions.
  I quote from a document issued by Dorchester Maritime Ltd., one of the companies suggested by BP. Clause 8, on industrial relations, says:
  "The Seafarer undertakes not to involve any industrial organisation in any dispute arising from the terms of this contract or arising from any practices on the vessels without first consulting the Company either by telex, telegram or letter and allowing the Company 30 days in which to give written replies. Further should any vessel be boycotted through any action by an industrial organisation or any of their affiliates, the Seafarer shall not assist or recognise such industrial organisation as having any authority or control over the Company, the vessels or the crew onboard and will act accordingly."
  That strenuous provision effectively prevents a trade union from operating on behalf of its members. I am reliably advised that that clause is against the spirit and intention of convention 98 of the International Labour Organisation, to which I understand the United Kingdom Government are a signatory.
  Dorchester Maritime Ltd. also states that the seafarer has to agree
  "to provide his services to the Company on any nominated vessel trading on a worldwide basis. The Company has the right at any time to assign and/or transfer the Seafarer from one vessel to another."
  The intention is that, although British Petroleum Shipping will continuing to own the vessel and it may be

  425
  under the United Kingdom and/or British flag—there are important strategic, defence and other distinctions—there is nothing to prevent such a seafarer from being transferred to vessels flagged by foreign Governments or companies. There are severe implications for the control of manpower in the future.
  The legal basis of the document is extremely questionable. It says:
  "This agreement shall, in all respects, be governed and construed in accordance with the laws of Bermuda and in the event of any dispute between the parties howsoever arising the Bermuda court shall have exclusive jurisdiction."
  I am reliably told that in other agreements, where the parent company is registered in Switzerland, the law applying will be that of Switzerland.
  The Minister has some severe points to answer in the debate. We know what has happened to the British flag. We know what has happened in terms of manpower and training. We see from the evidence given to the Select Committee by the British Maritime League that since 1974 there has been a loss of 100 vessels and 5,000 seafarers per year. Those are dramatic declines. We are concerned about the availability not just of manpower but of highly skilled and trained manpower. It is not sufficient just to man the ships, because, as we all know, ships are getting more complicated and the training of cadets and others must be taken into consideration.
  Were the Government informed prior to the actions of BP Shipping? If so, what was the Government's response? Did they give any view of the strategic implications or the implications for manpower? What is the effect of those changes in terms of flag, management and crews on the Sea group report? What are the training implications of the decision? What are the Government going to do about British shipping? Are they bringing in proposals or are they leaning on the Chancellor of the Exchequer, in the interval between now and the Budget, to correct some of the damage that the Government's fiscal policy has done to British merchant shipping? What views do the Government express on the abrogation of convention 98 of a vital United Nations organisation, the ILO? If the Minister checks, he will see that seven of those ships went to the Falklands. Those ships were manned by British seafarers—all good men and true. A little over three years ago, the ships and the men went to the Falklands in what the Government considered to be the national interest. Are the Government content to ask those seafarers to sign such an odious, despicable agreement? The National Union of Seamen and the other unions require an answer tonight. That is vital. I earnestly await the Minister's reply.
  12.5 am
  Mr. Roger Stott rose—
  Mr. Deputy Speaker (Sir Paul Dean): Does the hon. Gentleman have the agreement of the hon. Member for Dunfermline, West (Mr. Douglas) and of the Minister to intervene?
  Mr. StottYes, Mr. Deputy Speaker.
  I am grateful to my hon. Friend the Member for Dunfermline, West (Mr. Douglas) for allowing me to intervene briefly in this important debate.
  Notwithstanding the tremendous contribution that my hon. Friend has made to the debate, I am sure that he and
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  I, and my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), agree that this is an unsatisfactory way of dealing with a major issue concerning our British merchant fleet. It is a tragedy that my hon. Friend the Member for Dunfermline, West has had to raise such an important issue on the Adjournment of the House. It is an indictment upon us that we are debating it in a quarter of an hour, in a Back Bencher's time on the Adjournment.
  All that I wish to say in my brief intervention from the Opposition Front Bench is that we are wholly dissatisfied about the way in which the matter has been dealt with. My hon. Friend has raised many important questions, which the Minister will have about 10 minutes to answer. That is not his fault; it is the fault of the procedures of the House.
  The Secretary of State for Transport (Mr. Nicholas Ridley): It is the hon. Gentleman's fault.
  Mr. Stott: It is not my fault. We are discussing an important issue in an unsatisfactory way.
  My hon. Friend the Member for Dunfermline, West told the Minister of State that he is in possession of a document provided by one of the management agencies that presumably will take over one of our major fleets—British Petroleum Shipping, in which the Government have a major shareholding. It is wholly unsatisfactory in terms of industrial relations and manning agreements and in regard to the law. If British seamen have any dispute with the company, their only recourse to justice is by going to a court in Geneva. If the newly appointed Minister of State tells me that he is satisfied with that way of conducting our business—asking seafarers of this great maritime nation of ours to seek recourse in the courts of Switzerland—we have come to a pretty poor pass.
  I am grateful to my hon. Friend for raising the matter. I give notice to the Government that we shall find a more appropriate opportunity to return to the subject.
  12.8 am
  The Minister of State, Department of Transport (Mr. David Mitchell): The hon. Member for Wigan (Mr. Stott) deplored the fact that this matter was not given more than half an hour in which to be debated. There is ample opportunity, if the Opposition wish, to use some of the time at their disposal for this purpose. If they genuinely feel as strongly about it as the hon. Gentleman suggests, no doubt he will make an opportunity to follow up the matter in that way. In any case, he has shortened the amount of time for me to respond to the debate.
  It is perhaps unusual for a Minister to welcome the opportunity of a debate on a commercial decision by a private company, but the issues raised by the present case are of national interest, and it is appropriate that the hon. Member for Dunfermline, West (Mr. Douglas) should bring them to the attention of the House.
  First, let me clear out of the way the red herring of British Petroleum being a company with a large Government shareholding. It has been the policy of successive Governments, of all parties, not to use their rights as ordinary shareholders to intervene in the company's commercial decisions. We have made no change at all in that.
  British Petroleum Shipping gave prior notice to the Government, at separate meetings with the Department of Transport, the Ministry of Defence and the Department of

  427
  Energy, of the announcement about its future operations, which it made on 8 January. My understanding of the situation is that after losses of £20 million in each of the last two years, and as much as £160 million over the last five years, BP Shipping is to hand over the responsibility for manning its bulk fleet of 30 vessels—13 crude carriers, 16 product carriers and one LPG carrier—to three international agencies, but the vessels will remain under the management and operational control of BP Shipping.
  It is also expected that many of the vessels currently United Kingdom registered will gradually be transferred to Bermudan registry, that is, they will continue to fly the British flag. [Interruption.] BP's specialist fleet of offshore support vessels will remain under United Kingdom registration, with manning in the hands of a United Kingdom agency. [Interruption.] If the hon. Member for Kingston upon Hull, East (Mr. Prescott) will stop interrupting from a sedentary position, he will find that I shall deal with the points if I have time.
  BP Shipping's 1,690 seagoing staff will be given early retirement and redundancy terms but will be offered jobs by the manning agencies. Apart from those who choose to leave the sea, it is expected that most seafarers will continue to serve in BP's fleet. BP Shipping's reason for taking these steps is the simple one of survival. Despite reductions of more than 50 per cent. in ships and staff since 1980, it has continued to make losses at the rate of £20 million per year in the last two years. It has found the operation of the two non-BP-crewed vessels that it has had on the Bahamian registry to be satisfactory, and £350,000 per ship per year cheaper. With such savings, it has a chance of matching the competition of independent operators more closely and operating profitably in the long run. Without them, it does not. The hon. Member for Dunfermline, West must recognise that the fundamental choice is between having vessels crewed in a way of which he does not approve and having no vessels at all.
  The differences in operating costs arise because for its own crews BP has to pay national insurance contributions, train cadets, make contributions towards pension schemes and, because of substantial leave entitlements, employ considerably more seafarers than are actually at sea at any one time. Manning agencies outside the United Kingdom are likely to have to make much smaller welfare payments to the state, they incur no training or pension costs, and directly at least they do not pay for leave. [Interruption.] If the hon. Member for Kingston upon Hull, East would stop interrupting from a sedentary position, I should be able to reply more clearly to his hon. Friend.
  The move to agency manning will not itself affect BP Shipping's plans for the growth of its offshore support operations. The continued existence of a pool of BP marine expertise will also allow the expansion of the management and maintenance services which BP Shipping offers other shipowners and shore-based industries.
  Of course, there are some aspects of the move that are of considerable concern. The loss of vessels from the United Kingdom register—even to a dependent territory register—is a matter of some regret. The ships remain no less an asset in time of war—and I shall revert to this—but the decline of our registered tonnage tends in time to reduce our influence in the conduct of maritime affairs. To the seafarers themselves it is, of course, a matter of real significance. They are faced with the loss of a range of benefits carefully negotiated in happier days,
  428
  but the alternative for most will be no employment at all at sea, and I understand that the overall remuneration package that will be offered to them is viewed by many of them as attractive.
  What other problems does the change involve? There is one aspect that gives us cause for special concern—the implications for the future training of United Kingdom merchant seamen and officers. BP Shipping has over the years made an outstanding contribution to the maintenance of the corps of United Kingdom seafarers, but it is not realistic to expect any commercial company to carry the burden of training on behalf of wider interests.—[Interruption.]
  Perhaps the hon. Gentleman would allow me to continue. He will not accept yes for an answer. I agree with the point that he made earlier about the problems of training. The closure of BP Shipping's training facilities comes at a time of increasing anxiety over the future supply of men for the United Kingdom merchant marine. Management agencies may be able to meet today's demands for United Kingdom officers and men, but they are not themselves engaged in training, and we have to ask ourselves whether they will necessarily be able to find British replacements as ex-BP seafarers come up to the age of retirement. [Interruption.] Perhaps the hon. Gentleman will allow me to continue, I have just two minutes left and I want to answer the questions that he asked.
  In the longer term, this is an issue of significance for the defence of the country and as well as for standards in the industry generally. My Department, together with the Ministry of Defence and the General Council of British Shipping, has begun to look into the availability and training of seafarers, and this decision by BP Shipping means that particular attention will read to be given to training.
  I should like the House to be quite clear that the fact that over a period BP Shipping will be transferring bulk carriers to the Bermuda registry has in itself no direct implications for defence. These vessels will remain under the ownership and control of BP and will be available for requisition in time of tension or war by use of the Royal prerogative as readily as if they had remained on the United Kingdom register. These vessels will be on the Bermuda register, but will continue to fly the United Kingdom flag.
  The company has made it clear that no change in the pattern of its trading operations is contemplated. It will continue to operate in the north-west Europe area, and will remain available for defence purposes should the need arise. Bermuda-registered vessels are required to have United Kingdom citizens as senior officers and, as we know, BP Shipping hopes that sufficient other members of the crews will accept the new employment terms to ensure that British crews continue to man these vessels as at present.
  Mr. John Prescott: The hon. Gentleman is reading a press release.
  Mr. Mitchell: It is all very well for the hon. Gentleman to say that I am reading from a press release. His constant interruptions are causing me to have difficulty in reading my own writing.
  The hon. Gentleman asked whether the Seagroup report included these BP vessels. The answer is yes, but of course the vessels will remain fully available in the circumstances

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  covered by the Seagroup report. The hon. Gentleman rightly points out that the vessels will fall into a category which has been identified as likely to be in relatively short supply for defence support purposes. The Ministry of Defence—
  The Question having been proposed after Ten o'clock on Wednesday evening 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 seventeen minutes past Twelve o'clock.

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Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Derby.

Inflation: Price Indices
Lord Hatch of Lusby: 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 have been the comparative rates of inflation over the past 10 years for families on the lowest and highest incomes.
Lord Brabazon of Tara: My Lords, official price indices for these groups are not available.
Lord Hatch of Lusby: My Lords, I know that the Minister has consulted, as I have, the article in Fiscal Studies of last November. We were talking about it yesterday. Do the Government agree with the general findings of that article and the analysis of the retail price indices that the burden of inflation on the goods generally bought by the poorer section of the community is heavier than that on those bought by the top decile of our earners?
Lord Brabazon of Tara: My Lords, I have indeed seen the IFS study; not the full study, but a résumé of it. The Government are guided in these matters by the independent Retail Prices Index Advisory Committee, which is a body independent of the Government. That committee has said in the past that no indices for any other special social or income groups should be published. However, I have no doubt that the study has been noted by the committee. As to whether the burden of inflation is greater on the lower decile of income earners, I must point out that the study showed in fact that the difference was very small—only in the region of about one-third of 1 per cent. a year.
Lord Harmar-Nicholls: My Lords, may I ask my noble friend how you can possibly split the nation into segments when talking about whether inflation is good or bad? Inflation is either good for the nation or bad for the nation. If it is bad for the nation, it is bad for all segments in it. To try, for any reason, to suggest—
Noble Lords: Question!
Lord Harmar-Nicholls:—that one segment is against another, is against the best interests of the nation.
Lord Brabazon of Tara: My Lords, I quite agree with my noble friend that inflation is bad for the nation. Whether it impinges more heavily on one group or another is, as I have said, very marginal, and it has been the recommendation of the prices index advisory committee that we should only publish the main RPI
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index in addition to the RPI index that we publish for pensioners.
Lord Bruce of Donington: My Lords, is the noble Lord aware that he has already admitted to the House that he has studied the results put out by the Institute of Fiscal Studies on this matter? Will he therefore not agree that the burden of inflation on the lower income groups in the United Kingdom has been significantly greater than that upon the higher income groups? Will he say, when he considers that the difference is only marginal, how small it is, and that even small differences make a very great difference indeed to the poorer sections of our community?
Lord Brabazon of Tara: My Lords, no, I would not agree that the burden of inflation has been significantly greater. I have already given the figure quoted in the study, and that works out at one-third of 1 per cent. per year. I do not consider that to be very much.
Lord Boyd-Carpenter: My Lords, if the noble Lord, Lord Bruce of Donington, is right, does not that confirm the wisdom of Her Majety's Government in giving first place to combating inflation?
Lord Brabazon of Tara: My Lords, my noble friend is absolutley right. I would go on to say that regarding the up-rating of pensions, in the past year alone pensions have risen by 2 per cent. more than inflation.
Lord Paget of Northampton: My Lords, is this not really a matter which is more affected by differences in diet than differences in income?
Lord Brabazon of Tara: My Lords, the noble Lord is quite right. The main differences are for those people who smoke heavily and drink heavily.
Lord Hatch of Lusby: My Lords, the noble Lord the Minister is apparently trying to minimise the difference in the effect of RPI on different sections of the community. Is he aware that according to this study, when the Government claim that the state old-age pension has been increased by 23 per cent., the real figure, if this is weighted by the impact of inflation on pensioners, is 18 per cent? Does this not display a disparity that is a serious social menace? Is he further aware that in this analysis it is proposed in a quite friendly way that the Government might very well monitor the effect of inflation on different sections of the community when determining their social security and pension rates?
Lord Brabazon of Tara: My Lords, I think that I have already answered the second part of the question. I have said that the matter is one for the independent advisory committee and they will no doubt have noted this study. If they make any recommendations to the Government as a result of that we shall of course take them into account. With regard to the increase in pensions—I do not have at hand the figures which the noble Lord, Lord Hatch, has quoted—I quote my own figures of a 2 per cent. real increase in the past 12 months. That is based on the retail price index specifically for pensioners. As I said earlier, an index for pensioners is calculated.
Lord Diamond: My Lords, does not the pensioners index indicate that there is quite a difference in the effect of inflation on those pensioners who are also by definition within the lowest decile of the figures? Is it not the case that not only does the rate of inflation add a burden onto the lowest income earners or income recipients but also that by the very nature of their reduced means they are not able to avail themselves of the best possible purchasing power as those at the top decile do?
Lord Brabazon of Tara: My Lords, the pensioners' index at the moment is running slightly lower than the ordinary RPI. Whether they can or cannot avail themselves of some of the benefits of the higher decile of earnings is not really a matter in the calculation of the index.

Smoking and Children: Deterrence
2.45. p.m.
Baroness Lane-Fox: 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 initiatives are being taken to dissuade children from starting to smoke.
Baroness Hooper: My Lords, this a priority area for the Government. The Health Education Council recently began a major new initiative directed at all secondary schools. The Government are funding a £1 million pilot advertising campaign to influence teenagers against the habit, and additional measures are under consideration and review.
Baroness Lane-Fox: My Lords, in thanking my noble friend for her enlightening reply, may I ask whether teachers and youth leaders are made aware of the effect of their example to children on smoking, as well as the example of parents who must also realise the close connection between pocket money and early smoking, since this is said to account for £70 million to £90 million worth of cigarette smoking?
Baroness Hooper: My Lords, yes, the latter figure that my noble friend quotes of between £70 million and £90 million being spent by children on smoking is a very disturbing one. The Government are focusing very much on that area. That is why the Health Education Council's special project, the Family Smoking Education Project, represents the major effort. The project is aimed especially at 11 to 14-year-olds, and material, including a special teachers' guide and a leaflet for parents, tells about what they can do to deter their children from smoking. These are being distributed free to all secondary schools.
Lord Shinwell: My Lords, may I ask the noble Baroness whether it would be appropriate to define what is meant by the term "smoke"? We are told to believe—but I cannot endorse the belief—that pipe smoking is less dangerous than cigarette smoking, and that cigar smoking is even worse; but naturally cigar
232
smoking is not so common because of the cost. But much also depends on the kind of tobacco that is smoked. If it is good tobacco in one's pipe, that can constitute no danger to the individual concerned. What has happened at the present time is that parents who have the responsibility do not care two hoots about what their children do. The man takes a cigarette out of his pocket or he gets one from his wife; she has one in her mouth also. They smoke cigarettes. What do you expect the child to do? It follows the parents; it is a natural thing. That is the kind of thing which should be curtailed to a large extent; and it can be done by defining the word "smoke". What does it mean? Why destroy the smoking of a pipe? Very often that is an enjoyment, provided that one gets the right pipe and the right brand of tobacco.
Baroness Hooper: My Lords, from all accounts the noble Lord is himself a great expert in this area—and I feel sure that his experience extends for much longer than my own.
In attempting to define "smoke" or "smoking" I feel that I must confine myself to the question raised by my noble friend Lady Lane-Fox in relation to tobacco smoking. Figures suggest that cigarette smoking is more harmful than pipe smoking. Nevertheless, I think that our aim is to discourage children from starting the habit of any form of tobacco smoking.
The Earl of Lauderdale: My Lords, could my noble friend say whether the literature on this subject includes advice to people as to how to give up smoking? Might it contain a reference to the hideous experience of smoking herbal tobacco, which kills the habit stone dead very quickly?
Baroness Hooper: My Lords, the Health Education Council's various projects contain advice on many methods of giving up the habit of smoking. In this Question we are directing our attention to preventing children from starting smoking, but no doubt herbal remedies might well be considered in part of the literature issued by the Government.
Lord Ennals: My Lords, bearing in mind the department's own statement that cigarette smoking—I think not pipe smoking—among children is increasing at the present time, and bearing in mind another DHSS survey which showed that in Northern Ireland some 65 per cent. of the 11 to 15 year-olds thought that they had seen cigarette advertising on television, is it not clear that sports sponsorship by tobacco companies has become a very powerful weapon used by the cigarette manufacturers to get at young people, the main participants in sport? Is it not time that the Government intervened to stop this damaging and needless encouragement to children to take up this deadly habit?
Baroness Hooper: My Lords, I believe that the noble Lord is referring to research conducted by Dr. Ledwith of Manchester University into this area which suggested that televised sponsored events are regarded by children as advertising. Both advertising and sports sponsorship are already strictly controlled by means of voluntary agreements with the tobacco industry, and

233
in essence they seek to ensure that children are not encouraged to smoke as a result of advertising and sponsorship.
Lord Renton: My Lords, is my noble friend aware that retail tobacconists have an important part to play here and could often dissuade children from buying cigarettes, even when they pretend that they are buying them for their parents?
Baroness Hooper: My Lords, my noble friend is correct. In recent years a number of measures have been taken to discourage illegal sales to children, including the issue of guidelines to retailers. Fines for this offence have also been increased, and we are considering what further measures might be taken.
Baroness Masham of Ilion: My Lords, is the Minister aware that the highest number of smokers seems to be in the young female group? Will she consider some initiatives being taken by the Government—for instance, holding essay competitions in schools on the dangers of smoking, with the winners perhaps having a holiday of their choice, such as a ski-ing holiday? Would that not mean more to them than just reading in school an advertisement which they sometimes challenge? They may challenge society, such as parents and teachers, and do the opposite. Is the noble Baroness aware that many children progress from smoking cigarettes to taking other drugs, such as heroin and cocaine?
Baroness Hooper: My Lords, yes, this is a difficult area, and that is why current initiatives to prevent smoking include the "My Body" project to improve knowledge of the effect of smoking on health, and the "Pace-setters Don't Smoke" campaign, which involves sporting and other personalities who are likely to appeal to youth and to set them an example.
Lord Mellish: My Lords, will the noble Baroness recognise that in a democracy there is a limit as to how far one can go in stopping something from happening? We can do all we can through education, and I believe that that is being done; but there is a limit to what we can do. Perhaps I may point out, in relation to my noble friend Lord Shinwell rising and intervening in this matter, that he is over 100 years old and has been smoking all his life, which proves that some of these research wallahs are absolute idiots.
Baroness Hooper: My Lords, it is true that we need not be totally despondent about this matter. After all, the figures on which we are basing all this detail were provided for the first time on a national basis only in 1982. The survey was repeated in 1984, and it is on these fairly short-term figures that we are basing our analysis. Therefore, we shall try not to despair.

International Terrorism and Economic Sanctions
2.54 p.m.
Lord Chalfont: 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 outline their policy towards the imposition of economic sanctions on states which are known to harbour or sponsor international terrorists.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, our experience is that economic sanctions are not effective. We do not consider them the right response to states that are alleged to be harbouring or sponsoring international terrorists.
Lord Chalfont: My Lords, I thank the noble Baroness the Minister for that reply. Given the constant increase in the rate of terrorism and the effects of it, will she not agree that it will be very little use defending ourselves against acts of terrorism unless we do something about those nations which sponsor and harbour international terrorists, and which are proved to have done so? This is not a question of alleged sponsors; this has been demonstrated and it has been proved that they are sponsors. If the noble Baroness thinks that economic sanctions are not effective—and I have seen no clear evidence of that in other contexts—what measures does she suggest that we should bring to bear on states which sponsor international terrorism in order to prevent them from doing so?
Baroness Young: My Lords, I should like to make it quite clear that we have condemned all acts of terrorism from whatever quarter and will continue to work with other like-minded countries to bring both political and diplomatic pressure to bear on states which support terrorists. As the noble Lord will be aware, we have tightened security, and there are now armed police at Heathrow, which I think indicates the seriousness with which we view the problem. We also encourage a full exchange of information and intelligence with others on terrorist activities, and we also monitor the movement and actions of would-be terrorists and those who support them.
Lord Cledwyn of Penhros: My Lords, with regard to the position in South Africa, and following the decision taken at the Commonwealth Conference in the Bahamas, can the noble Baroness say whether Her Majesty's Government have now reached a conclusion as to the action they will take if all the Commonwealth partners decide to take economic sanctions against South Africa?
Baroness Young: My Lords, I think that at this stage that is a hypothetical question. The Government's position on the question of sanctions against South Africa is well known.
Lord Orr-Ewing: My Lords, in the face of the first supplementary question by the noble Lord, Lord Chalfont, will my noble friend not consider whether we should be doing something more positive to discourage not only those who harbour but those who actually train terrorists and who proudly boast that they are doing exactly that? If we cannot bring about effective general sanctions, can we not bring oil sanctions to bear particularly on countries like Libya?

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Would not that be particularly appropriate at the present time when the oil supplies for the whole world are pretty buoyant and therefore there is no abject need to crawl to Libya and buy their supplies of oil?
Baroness Young: My Lords, to answer my noble friend, we have taken a number of actions against Libya. Following the shooting of the policewoman in St. James's Square in 1984, we broke off diplomatic relations; we prohibited the export of defence equipment; we denied ECGD cover for medium and long-term credit and we imposed severe restrictions on Libyan immigration into Britain.
I should also like to make it clear that we shall continue to work actively with the United States and other like-minded countries to bring pressure to bear on those countries which support terrorism. My right honourable and learned friend the Foreign and Commonwealth Secretary has made that clear, as I did when I was in Washington 10 days ago.
Lord Glenamara: My Lords, would the noble Baroness care to express a view on the effectiveness of the recent economic sanctions imposed by South Africa on Lesotho?
Baroness Young: My Lords, I think that that question is quite wide of the Question on the Order Paper.
Lord Grimond: My Lords, does not the attitude of the Americans themselves show that this is not a very easy question, and would it not greatly help in the laudable aim of containing terrorism if the Americans would cease to harbour IRA terrorists and would take steps to prevent the raising of large sums of money in America for the support of the IRA?
Baroness Young: My Lords, I think we all agree that this is a very serious matter indeed, but I must make plain that the opposition of the United States Administration to the PIRA is well known and it is not policy to harbour IRA terrorists. Indeed, a supplementary extradition treaty has been concluded with the United States Administration which, if approved by the Senate, will prevent fugitive terrorists from avoiding extradition by claiming that their alleged offences were political.
Lord Molloy: My Lords, is the noble Baroness aware of the grave consternation expressed in British newspapers and in newspapers of the United States of America about the behavour of the CIA (which is an official part of American policy) in Nicaragua and other parts of southern America, which is also a form of terrorism? Should we not make representations about that as well as making representations about what has been happening to our people in this country as a result of IRA activities?
Baroness Young: My Lords, I think that the noble Lord's question is quite wide of the orginal Question on the Order Paper, but let me make it quite plain that the United States Administration have not asked us to join with them in imposing sanctions on Nicaragua.
Lord Elystan-Morgan: My Lords, will the noble Baroness not agree that in the long term there is a very strong case for a deep concept of collective security in this realm, in that any act of terrorism should be seen as an attack not just upon the victim country but upon all the law-abiding and peace-abiding countries of the world?
Baroness Young: My Lords, I accept what lies behind the noble Lord's question, as I entirely accept the concern expressed in the orginal Question by the noble Lord, Lord Chalfont. Indeed, the Foreign Ministers of the European Community will be meeting next week, and one of the subjects on their agenda will be terrorism, and it underlines our belief that is must be tackled by like-minded states working together.
Lord Hatch of Lusby: My Lords, does the noble Baroness agree that the actions of the South African Government in invading and killing nationals of the neighbouring states of South Africa, including those within the Commonwealth, is indeed international terrorism? If so, will her Government impose the same kind of sanctions on the South African Government that she has listed to the House this afternoon have been imposed on the government of Libya?
Baroness Young: My Lords, the noble Lord, Lord Hatch, is well aware of the steps that Her Majesty's Government have taken towards South Africa and the agreements that we have reached with our Community partners and indeed with our colleagues in the Commonwealth. We still believe that sanctions in that situation would be counter-productive, and we prefer positive measures such as the Commonwealth Eminent Persons' Group.
Lord Chalfont: My Lords, I wonder whether it would be in order to return to the Question on the Order Paper? Would the Minister agree that the danger of further massive acts of terrorism, possibly directed against the people of this country, is very real? The trend shows that this is likely to recur and become more severe in nature. In the light of that, will the Minister assure us that the Government will keep an open mind about any kind of riposte which is made against states which sponsor, harbour and train terrorists, and that they will not be too rigid in their attitude towards economic sanctions?
Baroness Young: My Lords, I should like to make it clear that wherever there is evidence of support for terrorists by a foreign government we do not hesitate to make clear our condemnation and take the necessary steps to deter and, if possible, stop such support. I have already indicated the firm measures that we took after the shooting in St. James's Square, and we believe that it is quite unacceptable for other countries to export violence to the United Kingdom or to other countries.

Nuclear Test Ban Treaty Proposal
3.3 p.m.
Lord Brockway: 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 were the votes at the First Committee of the United Nations on resolutions (1) recommending urgent consideration of the conversions of the Partial Nuclear Test Ban Treaty into a comprehensive nuclear test ban treaty, and (2) and (3) deciding to include in the agenda of the 41st session of the General Assembly an item for the cessation of all nuclear tests; and which nations voted against in each case.
Baroness Young: My Lords, the First Committee of the 40th United Nations General Assembly considered one resolution recommending consideration of the conversion of the Partial Test Ban Treaty into a comprehensive test ban. It was adopted by 108 votes to three, with 26 abstentions. There were three further resolutions calling for a comprehensive test ban and for the inclusion on the agenda of the 41st General Assembly of an item on the need for the cessation of tests. Of these, one put forward by Australia and New Zealand was adopted by 103 votes to three, with 32 abstentions; one proposed by Hungary was adopted by 107 votes to three, with 26 abstentions; and that sponsored by Mexico was accepted by 111 votes to two, with 25 abstentions.
In all cases the United Kingdom and the USA opposed the resolutions. France voted against all but the last resolution in the First Committee. In plenary, France joined the United Kingdom and USA in voting against that resolution.
Lord Brockway: My Lords, I thank the Minister for that full reply. May I ask her whether she does not agree that the overwhelming vote of over 100 against three indicates the strength of world opinion in favour of ending all nuclear weapons tests? May I ask her whether the attitude of the United States, Great Britain and France does not provide some basis for the feeling which the Prime Minister found at the Commonwealth Conference that the Western nuclear powers are preventing an advance to peace? Lastly, may I ask the noble Baroness whether the British Government will use their influence in the summit talks between the United States of America and the Soviet Union at last to get the abolition of all nuclear weapon tests?
Baroness Young: My Lords, I should like to make the position of our Government quite clear. We voted against the resolutions tabled because they did not meet our criteria. The Government continue to believe that outstanding problems of verification must be solved before negotiations can be started on a comprehensive test ban. Nor indeed would I accept that the record of the Western powers is in any way preventing the peace process. On the contrary, the peace process is more likely to be taken forward if we start our negotiations from a position of strength.
Lord Mayhew: My Lords, while I appreciate the difficulty of her position, may I ask whether the noble Baroness is aware that it is now clear to everybody that the reason why the American and British Governments refuse to negotiate about a comprehen-
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sive test ban treaty is not the problem of verification but the fact that they wish to have more tests, that that is perfectly plain to everyone and that the two Governments would do much better to come clean and admit it?
Baroness Young: My Lords, I am not prepared to accept that statement made by the noble Lord, Lord Mayhew, which he has of course made on a number of previous occasions. We have made our position quite plain on this matter. As I have already indicated in the answer that I gave to the supplementary question of the noble Lord, Lord Brockway, we are committed to seeking progress towards a comprehensive test ban treaty, and our own nuclear tests are conducted to maintain the effectiveness of our nuclear capabilities.
Lord Mackie of Benshie: My Lords, does the noble Baroness maintain that verification is not possible in view of the scientific evidence—
Several Noble Lords: Order!
Lord Jenkins of Putney: My Lords, it is my turn. Is the noble Baroness not aware that the position now is that the nuclear nations of the West are against the rest of the world? Is this not an unhappy situation, and will she not do something about it?
Baroness Young: My Lords, I am not prepared to accept that the United Kingdom is isolated. We voted in these debates with the United States and with France, and most of our NATO partners abstained.
Lord Mackie of Benshie: My Lords, would the noble Baroness maintain her position that verification is why the United States and Britain are against it, when in fact the evidence is clearly that with the new scientific methods they can verify whether nuclear tests have taken place anywhere in the world?
Baroness Young: My Lords, I am not quite sure to which scientific evidence the noble Lord is referring. If he is referring to the Norwegian seismic array experiment, we hope of course that this experiment will provide a solution to some of the outstanding technical problems. But claims for the efficiency of high frequency seismic stations can be exaggerated, and we do not have much data on them. Nor are there any reliable discriminants applicable to high frequency signals.
Lord Molloy: My Lords, I believe that verification always has been a difficult stumbling block. However, there has now been a positive contribution from Mr. Gorbachev that he recognises the problems of verification, and he is asking for full consultation and examination of the proposals that he has adumbrated, which are lengthy and complicated but which he believes will satisfy all the major powers involved with any form of nuclear weapons, testing them, or even developing them in future. Therefore, ought not the Government to take notice of this, and perhaps ask the United States to call a conference with the Soviet Union on this whole subject of verification and testing?
Baroness Young: My Lords, we have received the latest proposals sent by Mr. Gorbachev in his message to my right honourable friend the Prime Minister. Many elements are a repetition of existing Soviet ideas, but the proposals are wide ranging; they contain new elements and they will require full and careful study.
On the noble Lord's other point, about our voting in the United Nations, perhaps I could say that we are not in the business in the United Nations of supporting declaratory and unbalanced resolutions which do not further the cause of balanced, practical and verifiable arms control and disarmament.
Lord Chalfont: My Lords, does the Minister agree that there are two nations which possess nuclear weapons which do not take part in any of the discussions on nuclear arms control and would be unlikely to take any notice of a comprehensive test ban anyway?
Secondly, would the Minister not agree that seismic detection is still not sophisticated enough to distinguish in all cases between nuclear explosions and natural seismic events, and that this is a much more complicated subject than some people would like to suggest that it is?
Finally, does she not agree that the whole problem of verification would be solved if the Soviet Union would accept verification on site, as Western nations have been prepared to do for 25 years?
Baroness Young: My Lords, I thank the noble Lord, Lord Chalfont, for his questions. It is true that there are other nations who would be involved in a comprehensive test ban treaty, and we agree that the scientific evidence available is not sufficiently advanced to be sure that we can rely on getting the verification that we require for a test ban treaty. I further agree that the United States proposed an exchange of test site observers and in July invited Soviet observers to visit a United States test site. This would go to the heart of the key issue, which is verification on the ground. It is a matter for regret that the Soviet response has so far been dismissive.
Lord Denham: My Lords, we have now been 35 minutes on these four Questions, and nine minutes on this Question. I think the House may feel that it would be better to go on to the next business.

Business
3.12 p.m.
Lord Denham: My Lords, with the leave of the House, I should like to say a word about the two short debates standing in the names of the noble Lords, Lord Irving of Dartford and Lord Gallacher. The mover of each debate is, by custom, allowed 15 minutes and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate.
In the case of the debate in the name of the noble Lord, Lord Irving of Dartford, this means that all other speeches should be limited to a maximum of 10 minutes and in that of the noble Lord, Lord Gallacher,
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to 12 minutes. If any noble Lord should speak at greater length it would be at the expense of subsequent speakers in the debate.

Schools and their Problems
3.13 p.m.
Lord Irving of Dartford Lord Irving of Dartford rose to call attention to the problems facing the nation's schools; and to move for Papers.
The noble Lord said: My Lords, in May last year Mr. John Clare, the BBC's education correspondent, wrote an article which was published in The Listener entitled "Turmoil in Education". It is this turmoil, its causes, its consequences and its remedies which I should like to discuss this afternoon. Mr. Clare summed it up very neatly and effectively when he said: said:
"Britain's schools have never been more embattled. Since the beginning of the year, millions of pupils have had their education disrupted by teachers in an entirely just but hopeless claim. The disruption, unprecedented in scale, coincides with a drive by the most innovative Secretary of State for a generation to push through an elaborate plan to boost school standards".
There can be no doubt about the concern felt throughout the country about this damaging dispute or the earnest wish of parents, teachers and all others that it be drawn to an early conclusion. The question is, how?
Referring to Sir Keith's plans, Mr.Clare said:
"It is a plan that depends absolutely on the goodwill and commitment of teachers. Such things have never been in shorter supply, nor has teacher morale ever been lower".
In case anyone thinks Mr. Clare to be exaggerating, let me tell the House what Dr. Harry Judge, the director of the Department of Educational Studies at Oxford since 1973, said in an article in The Times Educational Supplement in September:
"The morale and confidence of the education service are now at a desperately low point. Unless and until the fact of crisis is acknowledged, and its nature agreed upon, nothing can be improved. The present mood is without precedent, certainly within the working life of the older among us, and arguably at any time over the past century".
Those are strong words.
A similar view was expressed in an article by Mr. Bernard Barker, headmaster of Stanground School, Peterborough, published in The Times Educational Supplement in November when he said:
"Trust has been destroyed over a 2 year period so that there is no chance of negotiations leading to a just and lasting settlement. Without trust it is impossible to achieve a changed pay and promotion structure, earnestly desired by the teachers themselves".
Without agreeing with everything that the teachers have said and done, I believe that the Secretary of State, Sir Keith Joseph, has to accept a large share of the blame for this sorry state of affairs. As Mr. Barker concluded:
"What kind of psychology is it that expects the profession to accept radical changes in conditions and methods in return for a rise slightly below the cost of living?"
Pay is clearly at the heart of the problem. What is the "just claim" referred to by Mr. Clare? It is that teachers' salaries are now worth only two-thirds of what they were 10 years ago. This is not propaganda: it is a fact established by the Burnham pay data

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working party early last year. It is also true that over the same period they have fallen behind every remotely comparable group of employees. The problem is that teachers are unwilling to accept the promise of jam tomorrow in the form of what many feel could be an improved package of professional reforms, in the face of the dramatic and real erosion of their pay which has taken place since the Houghton Committee reported 10 years ago. Pay has declined when demands on teachers have increased.
The Burnham pay data working party last year selected eight occupations for comparison. In 1974 the weekly difference between teachers and the average of the eight was 82p. By 1984 teachers' pay had gone up by £129 a week, but the average for the others had gone up by £172.50. In other words, the difference had gone from 82p to £43.50 a week. Whereas the total for all teachers was £188.63, including heads and deputy heads, for gasfitters it was £182.50, crane drivers £193.20, seagoing deckhands £187 and printing machine minders £190.
More than a quarter of a million or 61 per cent. of the 414,000 primary and secondary schoolteachers in England and Wales are stuck in the two lower pay scales and can only earn a maximum of £9,597 a year. To restore the purchasing power of teachers' pay they need an average of over £1,750 a year. Is it surprising that teachers are filled with anger and frustration? Whatever Sir Keith Joseph says, it is clear that we undervalue and underpay our teachers in terms of both comparable jobs and what is paid in other countries. The teachers are not asking for the immediate restoration of this loss, but that the loss will be made good in a planned way over a period of time. The failure in this respect will, in my view, involve a price, but I shall talk about that later.
Sir Keith has claimed over and over that he is willing to provide an extra £1½ billion over the next four years. But, such is the distrust of Sir Keith, the unions do not believe that this really means £1½ billion; but that what it means is £450 million, which is only allowing the local education authorities to raise their expenditure to £200 million a year out of which only 47 per cent., the rate support grant element, will be paid directly by the Government.
The plain truth in this respect, which is mentioned in an article in The Guardian today, is that no one knows exactly what will be spent on school education in the current financial year, or in the next year for that matter. The system of local government finance is so complex that estimates cannot be made, even by the DES. The 1984–85 document on Government expenditure plans, for example, reflects not what will actually be spent on education in schools, but is:
"the Government's view of the appropriate distribution of local authority expenditure on education".
The main long standing problem is that individual local authorities do not necessarily spend the amount that has been assessed as their need: some spend more and some spend less. With their pay eroded by 33 per cent. teachers are affronted by the fact that they are having to fight for a bare 6·9 per cent. when senior civil servants received 12·2 per cent., the judiciary 15·3 per cent., senior military officers 17·6 per cent., admirals 31·9 per cent. and the head of the Civil Service 46·3
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per cent., without any proof that they were having difficulty in actually filling any of those appointments.
I think that parents now are taking a hand and demanding a proper professional salary for teachers. A Gallup poll in July showed that the majority of the public were in favour of the teachers' demand in this respect. Before I am interrupted by someone telling me that the National Confederation of Parent Teacher Associations has changed its mind, I ought to say that in my view this is an indication of the turmoil going on in many parents' minds about the damage being done. But most parents believe that pressuring teachers to go back without a just settlement would not provide the peace required to get the kind of calm, relaxed consideration of the improvements that Sir Keith and others, including the teachers themselves, would like to see.
Nor will the Government's hard line of taking them to court or stopping pay work either. Indeed, the difference between the unions is not all that remarkable. The NUT and the NAS/UWT are both in favour of strikes. It is a question of tactics. And the NAS/UWT general secretary has said that when this income pay award is over—and he means when this year's settlement is over—they will start the next campaign for pay increases immediately. I think that the dispute must be brought to an end before further damage is done.
I have tried to demonstrate the impossibility because of the anger and frustration of teachers in getting a settlement of making progress in respect of re-structuring, appraisal and curricular reform on terms set out by the Government. To achieve these things will require the co-operation of teachers. Even if some unions did seek to go ahead I believe that it would be very difficult to get all the LEAs to act together. The dispute, apart from the other damage that it is doing, is already affecting recruitment into the profession. It is clear in my view that the only way to resolve the strike is for teachers to accept an interim settlement in return for an independent inquiry which will take into account both the erosion of teachers pay and the new duties and standards that Sir Keith wants to apply. In this way, teachers would secure a real assessment of their worth in the context of these responsibilities. I believe that an independent inquiry does not just have the support of the official Opposition; it has the support of many Members on the Conservative side in another place, and indeed also of The Times in its leader of 4th January.
Although pay is the main point of controversy, there was crisis in our schools before the pay dispute. In a paper, The Next Ten Years, Public Expenditure and Taxation into the 1990s, the Government argue that education expenditure in real terms has increased by I per cent. since 1978–79. With a school population fall of 12 per cent., LEAs, according to the Government, should be in clover. Of course, the LEAs claim that falling rolls do not provide such economy, that the same number of courses offered to fewer pupils when funds are allocated per capita is more expensive and where staff numbers have been reduced there have been redundancy and compensation payments.
Now, Sir Keith's own inspectorate have stepped in and added their weight. They say in their report, The State of Schools in England and Wales:

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"The present picture is of an under-resourced service with poor maintenance and buildings, inadequate provision of basic equipment, and materials. Teachers are struggling to cope in schools in which resource provision is well below standard".
But of course the parents themselves are taking a hand. The National Confederation of Parent Teacher Associations has just produced its own report with contributions from a large number of secondary and primary schools throughout the country in 83 areas. They conclude:
"Classes are increasing in size while the curriculum is narrowing and staff are under more and more stress".
They say:
"Parental funding is forming a sharply increasing part of school funding leading to disadvantage for pupils from less affluent areas".
Deteriorating buildings are reported in 58 per cent. of primary schools and 72 per cent. of secondary schools. The confederation urge that funding be increased to deal with what they have indicated as the specific deterioration that they have outlined. They also call on the Prime Minister, Ministers and Members of Parliament to get out and see the problems for themselves.
Funding from parental sources is estimated to be £40 million a year. When Sir Keith was presented with this, he said, "Of course, if that is the way that parents want to spend their money, they are perfectly entitled to do so". The generosity and money-raising activities by parent teacher associations have been features of our educational system for generations but this is the first time in history that many schools have had to rely on parents to supply the basic tools of education. The fact is that in poor areas the pupils will not be able to get the same help as children in middle-class areas.
Sir Keith was invited to go to Sheffield because the Sheffield committee believed that they wanted £8 million to bring their schools up to standard for the next 10 years. He had the good grace to say that they had rubbed his nose in some pretty depressing, leaking and obsolete buildings. Sir Keith was reported as saying "Of course, you can survive crummy schools. I myself had some expensive and prolonged education in some crummy physical conditions". The chairman of the Sheffield Education Committee replied, however, that "crummy" was an understatement of the conditions. But perhaps Sir Keith ought not to have been surprised when Mr. Brewer added:
"Many kids in Sheffield go to crummy schools; their home environment is crummy. Their prospects for the future are crummy and they can't go back to a rich and privileged environment as Sir Keith could".
When the NEDC looked at public sector investment early this year, it concluded that the present practice of school building maintenance "flies in the face of good management". Finally, there is a substantial minority of schools, mainly older ones, with extensive and often severe deficiencies in amenities by today's standards. Despite what Sir Keith had to say, I do not believe that Harrow or any of the schools that Sir Keith attended was ever like this.
The bill to bring all schools up to standard was in 1977, the last time the DES surveyed this, £1.5 billion. In my view, it must be at least £3 billion now. But the question is this. Does the shortage of books or deteriorating buildings affect the real quality of education?
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Professor Brian Cox, Professor of English at Manchester University, in an article in the Sunday Times only last month said:
"According to the Bullock Report, approximately 1 million adults in England and Wales have a reading age of nine, although to read the simplest newspaper requires a reading age of 13."
He said that the problems highlighted in this respect show the immense folly of the present Government in allowing spending on school and public libraries to fall dramatically.
As to buildings, clearly if a school has no technology workshop or computer facilities then the education is limited, but arguably not reduced in quality. But so far as the general state of dilapidations in schools is concerned, the HMI report was unambiguous:
"In some schools the conditions in which teaching takes place adversely affect the quality of pupils' work".
Sue Nicholas of the National Association of Head Teachers, said:
"There is no doubt that dilapidation is both dangerous and disruptive. Broken windows, damaged playgrounds, broken locks are a danger to pupils and teachers. The security of the school is often affected and vandalism is encouraged."
Head teachers report that vandalism gets worse as buildings deteriorate. It appears that children's reactions in terms of poor decoration is this: if no one else wants to take care of it, why should we?
Of course there are other problems, some of them even more potentially dangerous for the future. Mr. Kenneth Reid, Reader in Education at the Glamorgan Institute of Education, has recently published a book, Truancy and School Absenteeism. He says that there are worrying signs that absenteeism in our schools is increasing and that its nature is changing. Overall, one in 10 secondary school pupils fail to attend school daily and the rate is worse in some regions. Truants used to be regarded as isolated cases from unfavourable deprived backgrounds. Recent evidence shows that group truancy is, however, more common. Rather than staying home and whiling away the time in monotonous inactivity, some absentees deliberately (to use Mr. Reid's word) "mitch" together in groups. They then participate in organised, often deviant, activities which pose an increasing threat to society. There seems little doubt that the rise in group truancy is related to the increase in juvenile crime, especially shoplifting and vandalism. Police experiments with truancy patrols in both the United States and Britain regularly produce substantial decreases in juvenile crime.
The tendency for truants to form menacing groups in major conurbations and unemployment black spots is of particular significance. It is probable that truants have played a part in every city and inter-racial conflict, in drug trafficking and in vandalism. Schools in Britain are beginning to lose credibility among a large section of lower and middle ability pupils. Mr. Reid says that teachers are finding it harder to motivate disillusioned youngsters who, with the decline of unskilled employment opportunities, face a hard struggle throughout their lives. The teaching profession is not the only victim of low morale. Adolescents are losing their youthful optimism. Hope, says Mr. Reid, is being replaced by fear, worry, envy, bitterness and a sense of despair. It is in this atmosphere that highly-charged groups will take their own form of collective action.
All the matters I have discussed today are related. There are very severe and disturbing social consequences for all of us if we fail to invest adequately in our school system. Sir Keith has asked where the money is to come from. My answer to Sir Keith is that the cost of not finding the money could be infinitely greater, as the results could only be measured in the irreparable damage to the quality of life for all of us. We cannot afford to fail, but the time is getting very late.
Viscount Massereene and Ferrard: My Lords, before the noble Lord sits down, may I ask him one question? With regard to teachers' pay, has he taken into consideration the very long holidays that teachers enjoy?
Lord Irving of Dartford: My Lords, it is quite clear that the noble Viscount has never worked in a school. In many schools most teachers are engaged in many activities in the evenings and in the summer recess; and schools would not be as good as they have been in the past if it had not been for that devotion. My Lords, I beg to move for Papers.
3.32 p.m.
Lord Ritchie of Dundee: My Lords, I should like first to acknowledge our gratitude to the noble Lord, Lord Irving of Dartford, for having inaugurated this very important debate on the subject of schools. He has painted a sympathetic picture of the teachers' situation and a dark picture of the situation in our schools. I thought I was going to do the same, but I found when I began to ask some questions of certain teachers that I had some encouraging replies from them; so I hope to cheer you up a little, my Lords.
I think it would be true to say that there is no section of society on whom the pressure of the social upheavals of the last decade has borne more heavily than our teachers. The problems of racism, sexism, multi-racial culture, language differences, the new technology, unemployment, social deprivation and single parenthood have all affected our schools vitally, crucially and traumatically. At the same time, schools have had to face cuts in resources; and teachers, who hear the burden, as the noble Lord, Lord Irving, has said, have been undervalued and, I would add, also threatened. I think they have minded being told that they are not good enough just as much as they have minded being underpaid.
The problems facing our schools are indeed so many and so great that one does not know where to begin thinking about them or talking about them. I thought I would confine myself to saying a little about two London schools whose head teachers I happen to know. The popular image of an inner city school is of the "blackboard jungle" variety: vandalism, anarchy in the classroom, the victimisation of some children by others, stealing, smoking, drugs—you name it. I suppose that in the background of my mind that is what I expected to be recounting to your Lordships today, but when I began to ask questions of my two head teachers a very different picture began to emerge and I realised that I should be talking less about the problems than about the solutions that those two teachers in particular have been finding.
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My first school is a primary school in Deptford. To tell your Lordships a little bit about the problems, and adding to what the noble Lord, Lord Irving, has said, seven years ago there were 700 children in that school, all white. Now there are 200. Two-thirds of those children come from minority ethnic groups. Thirteen languages are spoken. I will not tell your Lordships what they are; you can use your imagination. The school is expected not only to teach English to those children, whose English is in some cases very inadequate, but also to maintain their own mother tongues. The school has to absorb children with special education needs, in accordance with the Warnock recommendations and the 1981 Act.
This particular school has in the nursery section a child with cystic fibrosis; there is another case of Down's syndrome. A third child who has now reached the age of 10 has such a low IQ all round that it is impossible to integrate her into any class, but her mother refuses to allow her to be sent to a special school. Fifty per cent. of the children come from one-parent families and 40 per cent. of the parents are unemployed. The head teacher, who is actually a friend and an ex-pupil of mine, has parents begging him to keep the children from 8 a.m. until 8 p.m. so that they can earn enough money to make both ends meet. I must tell you here of a remark made by an eight-year-old girl. She is not in fact from this school, but I am telling you of this remark because it is indicative. She said, "I'm not going to do any work. It's not worth it if you are going to be unemployed at the end". This from an eight-year-old, my Lords!
There is always this shortage of resources. I am digressing briefly here to add to what the noble Lord, Lord Irving, was saying about parental help. In another school the parents have had to repaint the building themselves. The LEA supplied the paint but it did not supply the labour. The parents in this school are themselves buying some of the ancillary help. They have even been considering paying the salary of an additional teacher. The school I am briefly digressing about is in a well-to-do commuter area. You cannot imagine things of this sort being done in an inner city area, where parents are so much less likely to have either the ability or the willingness to make contributions of this sort.
To return to my London primary school, I must tell you that, despite all these problems, this school is a showpiece and visitors come in numbers from this country and from abroad to see how the challenge of a multi-racial culture has been responded to. The showpiece in the school is called a resource centre for multi-ethnic artifacts or, to put it into plain English, an exhibition of works of art from all the children's mother countries.
The other school I want to tell your Lordships about is a girls' comprehensive in the same area of South London. It numbers 800 girls, with 100 in the sixth form. A sixth-form consortium exists with three neighbouring schools—one boys' school and two others; I am not quite sure what they are—offering altogether 25 A-level courses between them. A wide variety of subjects is offered throughout the school, including four languages (apart from English)—French, German, Italian and Russian—for 11-year-olds up to 18- or 19-year-olds.

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That school also has to absorb children with special educational needs. The school has a team which offers not only specialist teaching, often in a one-to-one situation, but also pastoral care for these children. A number of children with special educational needs enter at sixth-form level, having had to leave some other school at the end of their fifth year. I believe they make remarkable progress. So that is another example of the successful implementation of the Warnock recommendation about the integration into mainstream education of children who have special educational needs.
This school has 23 per cent. black Africans, 15 Tamil refugees, five Boat people and many other ethnic minorities, with 27 languages spoken in all. Yet I can vouch for the fact that there are no racist feelings in this school. To me, it was a most interesting example of how ideas are conveyed to children by adults. Ideas are infectious and they travel with the speed of light. If you convey to children the idea that there is something wrong with another child whose skin is a different colour, they will pick it up instantly. But, if you convey no such idea, they remain completely innocent of it. I have seen this happening in this school.
The teaching of English to the ethnic minorities, which is a theoretical obligation, is of course a problem, and how they manage to solve it I do not know. But I was delighted to learn that one sixth-form girl, who is a Jamaican, has the specific task of teaching conversational English to some of the first-year girls. She is not the only one. There are several members of the sixth form who are given the task of talking to some of the younger girls in order to improve their oral English. This same Jamaican girl is a fully fledged member of the governing body, attending all meetings. She is the elected representative of the sixth form and has to submit a report on sixth-form activities to the governing body.
The girls of this school are very active in community work. They look after the old people of their neighbourhood; they organise a party for them every Christmas; they wheel them there in their wheelchairs; they give them presents; they provide all the fare for the party and they provide a pantomine—not, alas, this year, because of the teachers' dispute. All this makes one feel that, although the problems in our schools are great, the ability to overcome them if you have the right teachers may be greater. But this can be achieved only by teachers—not ultimately the buildings, resources, curricula, schemes, directives or Acts of Parliament, but the teachers. And they must be accorded their true worth in money terms and in recognition, in appreciation and in honour.
3.43 p.m.
Baroness Cox: My Lords, we must all be grateful to the noble Lord, Lord Irving, for giving us this opportunity to discuss the problems facing our nation's schools. My contribution will focus on two kinds of problems which are not caused by cuts or by the dispute over salaries. The first is a result of policy, and the second of the political attitudes and commitments of some teachers.
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My first concern is the effect of the massive switch to comprehensive schools, which now contain about 90 per cent. of our secondary school pupils. Let me hasten to say that I am not prejudiced against comprehensive schools. I know that there are many very good comprehensives, and my own three children all went to a comprehensive school in the London Borough of Brent. But there is a growing body of evidence which shows that a comprehensive system leads to lower overall levels of achievement than a system with different kinds of schools for pupils of different aptitudes and enthusiasms. It is morally incumbent on us to take this evidence seriously. It was a socialist, writing on the development of comprehensive schooling, who said that it is an
"experiment with the life chances of millions of children".
I agree. But the essence of an experiment is to see if it works; if it does not, then one must think again. Not to do so is evidence of dogmatism.
Time permits mention of only two examples of such evidence. The first comes from the DES itself. Statistical Bulletin 13/84 shows that pupils from a selective system of grammar and secondary modern schools achieve significantly better exam results than those from comprehensives. Of course, there is more to education than exams, but exams matter—as passports for pupils to their careers, and as an external independent assessment of the quality of teaching. So consistent under-achievement in examinations should be taken seriously if we care about pupils' welfare, especially as it is pupils from working-class homes who seem to be being most adversely affected. For example, there has been a disturbing decline in the proportion of these pupils going on to higher education.
The second example of evidence refers to the comparison of examination results between England and Northern Ireland. This shows that as England's schools became comprehensive, proportions of pupils achieving GCE 0 and A-levels began to level out, despite DES predictions that they would rise. In Ulster, however, despite all the troubles, the proportions continued to rise steadily, so now there is a massive gap between England and Northern Ireland, with Ulster's selective system out-performing England's comprehensive system. There, 50 per cent. more leave school with one or more A-levels and 40 per cent. more with at least five O-levels. Of course there may be other factors at work, but these have not been identified.
I am not suggesting putting the clock back to our former system of selective schools, although I should like an assurance from my noble friend the Minister that the Government will think very carefully before closing any more good grammar and secondary modern schools, especially as it is not only grammar school pupils who benefit from a selective system; secondary modern pupils often do better than their counterparts in comprehensives.
But we must also be prepared to think about improvements to the present comprehensive system, especially in the inner city areas. One way forward might be to consider a solution adopted in the United States. I refer to magnet schools, which provide high quality education around a particular theme. We could surely consider developing specialist

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comprehensives offering first-rate facilities in subject areas such as maths, science and computing, languages, technical subjects, music, art and drama—even PE. Such schools could have a more flexible age of transfer than grammar schools and accept pupils on the basis of enthusiasm as well as ability. They would help to solve problems of shortages of specialist teachers and declining sixth forms, and would also develop as centres of excellence in the state system in inner city areas where positive initiatives are so desperately needed, as the noble Lord, Lord Irving, rightly pointed out.
I now turn to my second concern: the politicisation of education. As there is to be a debate on this subject on 5th February, I will merely touch on it briefly today. But it seemed wrong to have today's debate on the problems facing our nation's schools without any reference to some of the disturbing developments associated with the politicisation of teaching and the attitudes and behaviour of some teachers. I must stress that I refer only to some teachers. I recognise that there are many dedicated and conscientious teachers to whom my comments will not apply and who are worthy of our complete admiration.
It used to be a cherished principle that we kept partisan and party politics out of the classroom, but in recent years there has been a sea change. New subjects like "peace studies" or "world studies" are highly political. They are characteristically anti-Government. anti-NATO, anti-Western and often stridently anti-American. One book called Pieces for Peace, funded by the ILEA and the GLC's Women's Collective, shows two pictures on the front: one of a demonstration of solidarity with SWAPO; the other with placards saying "US murderers get out of Grenada". Its recommended reading is typical of peace studies material in its anti-Western bias and its complete lack of reference to Soviet military and political strategy or the realities of life on the other side of the Iron Curtain. The effect of this is to undermine our younger generation's political will for defence, because they are led to believe that we have nothing worth defending and that there is nothing to deter.
Other developments, which are highly politicised and appear designed to destabilise our society, take place under the rubric of so-called anti-racism or anti-sexism. One example must suffice. A book by the Institute of Race Relations, which is funded by the GLC, called How Racism Came To Britain was written for children aged 10 years and upwards. Cartoons allege the iniquities of Britain's racism, which is illustrated, to give one example, by a caricature of our legal system which shows a judge proclaiming:
"I s'pose you're innocent until proved guilty … As long as you're white, that is! If you are white and wear a blue uniform however, well, then as we all know … you're innocent even when proven guilty! Got it?".
That quotation illustrates another disturbing development: the growth of anti-police propaganda. The GLC has produced posters, booklets and a video for schools and youth clubs, showing our police as racist, incompetent and callous. The video, which cost £35,000 in this time of scarce resources, finishes with a reggae singer in a night club urging "Communities must rebel". The first of the credits in the video is the
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Communist Party newspaper, the Morning Star. At present we do not know how much of this material reaches the classroom. It is highly probable that some does, because, for example, the anti-police video is prepared for schools; and the teachers' group All London Teachers Against Racism and Fascism recommend in glowing terms that hook How Racism Came to Britain.
This raises the issue of the political commitments and concerns of some teachers. The Times Educational Supplement recently exposed the extent to which far Left teachers have a grip on teaching in ILEA. The Inner London Teachers' Association has about 13,500 members—over half the capital's teachers. It is dominated by the Socialist Teachers' Alliance, which includes Trotskyists, Anarchists and Communists. In a leader article, The Times Educational Supplement points out that ILEA has been ineffective in curbing their militant activities. I quote:
"By condoning breaches of the rules by teachers striking in sympathy with the miners and health service workers—and freezing disciplinary procedures against them as a supposed gesture of goodwill—ILEA attempted to keep credit with the Left".
As I draw to a conclusion perhaps I may mention just one other indication that many teachers seem more concerned with political than professional issues. That can be seen from the list of motions put forward for the annual conference of the largest of the teachers' unions—the 216,000 strong National Union of Teachers. These motions include a national boycott on exams, a partial ban on homework, indefinite strikes in schools in marginal Tory constituencies, support for pro-Soviet and anti-American positions and for more peace studies. For example, Hull welcomes Soviet peace initiatives but condemns the United States, while Coventry wants to affiliate to CND and urges the widest possible dissemination of peace studies.
I leave further discussion for 5th February. But I hope I have indicated that there are serious problems facing our nation's schools which reflect changes in the attitudes and political commitments of many teachers and local education authorities. The noble Lord, Lord Houghton of Sowerby, in his commendable report some years ago, made an important link between salary increases and professional standards, a link which some teachers appear to have forgotten.
I conclude by suggesting that there is no greater problem facing our nation's schools than that of encouraging those teachers who put politics before professionalism to reverse their priorities and commit themselves first and foremost to the wellbeing of the pupils for whom they are professionally responsible. Until and unless they do this, no increase in resources or salaries will give our nation's schoolchildren the education which they deserve and which it is in our nation's interest for them to receive.
3.54 p.m.
The Lord Bishop of Derby: My Lords, my remarks this afternoon do not arise out of any party political standpoint nor out of any narrow interest in Church schools but because of visits to schools of various kinds and discussion with teachers in different situations.

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There remains a heavy irony in the fact that the Government White Paper, published when the present Prime Minister was Secretary of State for Education and Science, was entitled, Framework for Expansion. It heralded a long-drawn-out period of cutback and contraction. One hopes fervently that the same sort of fate will not overtake the latest White Paper on education, Better Schools, though the signs over the past year since its publication have not been very encouraging. At the moment, maintained schools are certainly worse places to be in than at the time when the White Paper was being prepared. This is partly due to the general social environment which creates unusual pressures on teachers, examples of which we have heard already, but also to the teachers' own feeling of neglect by authority.
The intentions of Better Schools were undoubtedly good, and the intentions behind subsequent Government action have presumably been equally good. It is the present effects of that action which create deep concern. The White Paper was right to claim that,
"there is widespread acceptance of the need to improve the standards achieved by pupils",
and that the necessary improvement involved action in the four areas of curriculum, examinations, teaching and school government. The paper was also right to close with the reminder that,
"in these initiatives, as elsewhere, the Government cannot act alone. Their success depends on the ready co-operation and mutual support of all the partners in education and of the customers of the schools".
These partners were identified as being:
"the local education authorities (LEAs), the churches and other voluntary bodies, governing bodies, and teachers".
It is therefore tragic that the current dispute has brought the Government into direct conflict with both the LEAs (as employers) and, of course, the teachers. This has more than cancelled out the benefits of the progress made in the other areas, such as the technical and vocational education initiative, the introduction of the GCSE, the larger role given to parents and teachers on governing bodies and the highlighting of the needs of the bottom 40 per cent. among the pupils. These are all real advances, with potentially high benefits, but despite these our schools will not be better schools if the Government do not recognise that improved performance requires better provision of resources.
Sir Keith Joseph is now saying that the teachers have won their argument that the profession is currently underpaid, though he adds the rider that the current members of the profession need to show themselves to be worthy of a professional's level of remuneration. What also needs to be guaranteed by the Government is that if they are prepared to increase the teachers' salaries this will not be at the cost of depriving the educational system in other ways. The figures of the Department of Education and Science show that expenditure on buildings has fallen from a 6 per cent. share in the overall educational budget in 1979–80 to a 4 per cent. share in 1983–84. The results are there for all to see, in poorly maintained buildings on which even greater expense will be needed in years to come in
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order to make up for the underexpenditure of the past few years. This is not good housekeeping.
The blame for it cannot be laid at the door of the local education authorities and the Churches, who between them own and are responsible for the maintenance of the buildings. Spending limits are laid down centrally. It is only fair to recognise the importance of the Government's policy of reducing public expenditure and the force of their belief that this will contribute to the ultimate improvement of the country's economic position. But one does not improve any system's effectiveness (nor its efficiency) by underinvesting in it. It is not only a question of needing to put even more money into the system at a later date, to compensate for neglect. It is a question of the real danger of the system collapsing completely within itself. When a system is starved of resources it needs remarkably high morale on the part of those who run it to defend it against such a collapse.
Over the past 12 months or so, the morale of all the partners in the educational system, but particularly that of the teachers and of the local authorities, has plummeted, and continues to plummet. Unfortunately, the teachers themselves have not succeeded in producing understanding of the causes of their unease: the strain of disorder and violence and the lack of hope for the future of so many of their pupils. The nation as a whole has been unappreciative of the problems and largely unwilling to grasp the realities of the situation.
The present industrial dispute is part of a vicious circle in which the Government must carry their share of the blame. At the North of England education conference earlier this month, Professor John Tomlinson, previously chief education officer for the Cheshire local authority, argued that,
"national policy has undermined the self-esteem of those expected to carry out many of the key tasks".
He pointed out that, on the one hand,
"the teachers have been subjected to accusations of having 'failed the nation' and that, as part of the public service, they are nonproductive and parasitic",
while, on the other hand, their employers have been
"subject to the tightest of controls, which have wrested from them their capacity to pay what they may deem necessary and therefore their credibility in the eyes of those they are supposed to manage".
Like the buildings, but even more significantly, the damage done to morale will take a long time to put right. Barry Taylor, the chief education officer of Somerset, wrote only last week in The Times Educational Supplement, that any settlement of the dispute this year will be only "an armed truce".
In such a situation, the Church is deeply concerned about the future. It is concerned in general terms because here would appear to be yet another situation in which groups within society are being set at odds with one another. Any government must see as one of their functions the need to hold society together—not to force it into a complex of warring factions. Certainly the Christian gospel must urge people to seek reconciliation one with another, to pursue the ways not only of justice but also of peace.
The Church must urge such reconciliation, not as a distant observer of the scene but as an active participator in it. Many of the teachers in the nation's schools are members of the Christian church. So are

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many of the administrators in both local and national government. So, most significantly, are many of the parents whose children's future lives are being put in jeopardy as the dispute drags on.
The Churches are also involved institutionally through the many governing bodies of aided schools, as employers and direct partners of the local authorities in the running of those schools. It was mainly in that capacity that last July the General Synod,
"reaffirmed the Church of England's concern for the well being of the whole of the maintained system of education in this country and its expectation that it will continue to play a significant role as a national partner within that system".
We therefore look to the Government to make a similar reaffirmation.
To quote again from Professor Tomlinson's address to the North of England education conference, delivered less than three weeks ago,
"The public education system is at a turning point. Either we confirm that it is one important means by which the public good is engendered or we grant it only the status the market allows. Either it is a force for coherence and community as well as for individual fulfilment, or it is the route by which the less advantaged are inducted—no doubt largely against their will—into a divided society".
The more advantaged pupils are those whose parents are able to afford the independent sector of educational provision. Yet in this situation of crisis—this moment of crucial decisions—the Government, as Professor Tomlinson notes, appear ambivalent. Their talk of,
"releasing the spirit of enterprise and the opening of opportunity to all for a greater say in their own lives,"
is contradicted by actions that restrict the opportunities available to the majority by eroding the effectiveness of the system that provides for their needs.
Even more significantly, the danger of allowing market forces free rein in the realm of education arises from the renunciation that that implies of a clear sense of responsibility on the part of the Government for maintaining the national education system as
"a force for coherence and community"
engendering the public good. That is the unifying vision we hope that the Government will hold before the nation. It must be supported by their partners; the LEAs, the Churches, the teachers, the parents and governors. Only that vision will produce "better schools". A system in which the morale of those who run it is at an appallingly low ebb is unable to produce "coherence and community". By contrast, a clear commitment to that vision on the part of those who have the chief leadership would be a vital first step to the restoration of morale.
4.6 p.m.
Lord Parry: My Lords, I too am grateful to my noble friend Lord Irving of Dartford for introducing this debate at this time. He and I belong to a movement whose pioneers used to say that one must educate, educate, educate before one can legislate, legislate, legislate. It is in that mood that I wish to address the House this afternoon. I am equally grateful that the contribution of the right reverend Prelate came between mine and that of the noble Baroness.
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Lady Cox, and the great bay of approval for her tallyho gallop and Red hunting through the schools of this country that marred what was otherwise a contribution to this debate that I deeply respected.
There is no evidence from what we have heard so far, and from the reaction to it in this House, that we have reached a point of crisis in education in Great Britain today unlike any other that we have known in this country since the introduction of general education. Those of your Lordships who have shared in the past 10 or 11 years with me in this House will know that my credentials for speaking in this debate are that for 32 years I served in the classrooms and staff rooms of Great Britain. When I came here 11 years ago, I was one of only three serving teachers in this House. It is therefore essential for me to repeat again today that every report on British education that has been published during my lifetime of service to education has always pointed out that the single most important influence in the education of children—my Lords, your children and grandchildren and mine—is the attitude of the parent to the school in which their child is educated.
The second most important element is obviously the teacher, who becomes the parent when the parent inevitably has to surrender care of his child to people more competent in certain abilities to teach that child than the parent admits to being. So if the parents are worried about the future of British education, and if the teachers in the classrooms, regardless of their politics, are in conflict with the Government of the day, as they have over the past 15 years been in conflict with successive governments, then we must take far greater interest in this debate than the House appears to be taking, judging by the Benches this afternoon and by the reaction to what has been said.
When one begins to set up the comprehensive schools that are now a major part of our public education service, and when one analyses their performance, one must analyse also their composition. I wonder what is the relative composition of the schools in Northern Ireland with their success and that of the comprehensive schools of Great Britain, because the third element affecting the education of the child is the size of the class in which that child is educated. While I have taken a fairly ambivalent attitude to comprehensivisation I have always been bitterly opposed to centralisation which I consider to be the real enemy of the age.
The noble Baroness knows—and she and I can talk about this at leisure—that when our schools went comprehensive they did so not for the educational and social reasons that were argued for comprehend-sivisation in the first place but because it was discovered by the Treasury along the way that you can put more heads under one centralised school for a smaller expenditure of money than if you keep them in the diverse grammar schools and the small schools in which once we were educated.
As a teacher I happen to believe that if a school gets above 800 pupils in a rural district it is out Of keeping with that rural district; but if a school gets above 1,000 in a city the teachers do not have a chance of knowing one another let alone knowing their children and their problems. Therefore, do not let us detract from the purpose of this debate by galloping our prejudices

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when we should be seeking to isolate the principles upon which all education is founded. It was Ralph Waldo Emerson who said that education is two people sitting on a log. I believe that prejudice will come into even that situation. It is in that kind of situation that you can best have two minds size up one another. But what are the chances of someone who gets 35 minutes of time and 42 people's share of the time of a young teacher in West Wales, or Northern Ireland or in Central London? My own daughter has just left school and is teaching in a special centre for the multiple handicapped and socially deprived. She has a privilege that I did not have when I was teaching either at primary or at secondary level in the public system in Great Britain. I was never in a class in the whole of my education that was fewer than 35 in number. When I was at college the group in which I was taught was sometimes 95 and always 75 in number.
What parents who send their children to public schools—the great public education system which is private—are trying to achieve is a better relationship than that when they commit what they have to spare to the education of their children. I am proud, as I stand here as a Welshman in the Welsh education service with leaders of the education services of Wales around, that when the people of my country have been asked to choose they have always chosen—as have the people of Ireland, England and Scotland—to spend more of their resources on education than on other things. I am proud that the University of Wales was founded on the pennies of the miners who paid from their wage packets to educate not their own children but others. They made that voluntay contribution.
Facing us in Great Britain today, then, is the disillusion of the parents with the system and with some of the schools that we have set up. We are faced with the disillusion of the teachers and, added to that, the disillusion of the pupils themselves. Remember that Hegel, who set running many of the philosophies upon which are based the systems which many noble Lords bitterly oppose—and so do I—said:
"All down the pages of history the society begins to collapse when disillusionment finds its place in the heart of the people who live in it."
The foundation myth of our society is that the grocer can take his daughter to his local school knowing, as now we know, that even his daughter might become the Prime Minister of Great Britain; that an industrial chemist can get his son to stand outside No. 10 Downing Street and, as now we know, he can emerge as the Prime Minister of Great Britain, properly educated. I do not know that the grocer at the corner of the street is there any longer in our society; but, I wonder, whether such a shopkeeper could be so confident now that the education achievable in the towns of Great Britain is one that will prepare someone, somewhere, to become the Prime Minster of this country in due course. I do now know.
However, I know that Hegel said that disillusion leads inevitably to decadence, that decadence leads to disintegration, that disintegration leads to the collapse of the existing order and out of the collapse of that society there comes the emergence of a new faith which is almost always the antithesis of the faith that it replaces. If we care about democracy, as I know we
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do, and if we care about education, and I am certain that we do, do not let us follow this into the blind alleys of prejudice, but let us isolate the real causes.
If the education of Northern Ireland is beginning to perk up, let us analyse the fact that Northen Ireland has had invested in it of late an incredible share of the British budget. I know that there are things in Northern Ireland that they would never have had if they were not balancing in some way the appalling difficulties under which they have had to live; and I would vote for that. But when we apply the results, do not let us forget that if one-quarter of the money that ran in blood and down the drains and gutters of Belfast had been applied to improving the educational system—and we can all agree with this—then we, too, would be able to provide results in ratios of teachers to children.
May I, in the last minute I have available to speak today, point out that all of our schools, whatever they were, have always had within them bands of underprivileged. Their very plight has attracted the best teachers. The most handicapped have attracted the best teacher ratios, and at every level—and indeed in every form—there have been those who have missed out because they started as under-assessed, and their contribution and their ability to contribute had not been properly accounted. I always used to worry about the fact that when I was teaching in a secondary modern school and they decided to go in for competitive examinations, they gave me a smaller class than the rest. That was introducing a new band of privilege and a new band of under-privileged among the generally able people.
I want to end by saying this. There is also one terrible thing which is happening in the schools. I am 60 years of age—I do not know the age of the Secretary of State for Education—and went into teaching in 1945, straight out of college at 19 years of age. I had to go back to university in order to requalify myself later. But every one of my generation has taken early retirement and has gone. We are leaving the staff rooms of Great Britain to those who are in the menopause; 52 years of age and no one older. What about that band of people from 52 years of age to 65 who were once the strength of the great schools of Britain? What about those men and women who were sufficiently encouraged in their career prospects and opportunities and in their love of their job to stay on until they were 65? All right, we have cut their retirement age to 60 and offered them a handshake; but what kind of handshake is it, I wonder.
I understand that there is now even a proposition that we might try to get them out for less money, four years earlier, and have them leave the schools at the age of 48. I would not want my children, or my grandchildren if I have any, to go into a school in which there is a narrow age band of disillusioned people who believe they are not now assessed by society to be as important as once they believed themselves to be. They are in crowded conditions knowing that in this debate this afternoon the emphasis fell upon those who happened to be communists. There are communists in every aspect of society because they choose to believe that and because democracy gives them the right to believe it. There are people who are

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conservatives and others who are socialists but when talking about teachers let us talk about education.
5.19 p.m.
Baroness Faithfull: My Lords, I, too, wish to add my thanks to the noble Lord, Lord Irving of Dartford, for initiating this debate.
I seek to speak this afternoon on the serious problem of truancy and, arising out of the subject, the relationship of education to the other professions; in particular, to the social services and the health service. I contend that truants from schools are often the most vulnerable in our society. There is, as many of your Lordships will know, a draft circular issued by the Secretary of State for Education and Science headed, School Attendance and Education Welfare Services. In the light of the serious truancy problem throughout the country, this draft circular, which proves that the problem is recognised by the Secretary of State, must receive a warm welcome. We applaud the philosophy of the circular, which is to help children achieve their education potential.
Having said that, one is bound to ask whether the methods by which this is to be achieved, as laid out in the circular, are wise methods or whether they are not out of line with the many reports on education that this country has received: the Plowden Report, the Ralphs Report, the Seebohm Report and, more lately, the House of Commons Social Services Committee of Inquiry. This subject is touched on in paragraph 59.
It is interesting that the circular is headed: "Education Welfare," whereas the two biggest associations in the education welfare field are the Association of Chief Education Social Workers and the National Association of Social Workers in Education. May I ask my noble friend the Minister what is meant by "early resort to court action", which is advised in this circular? Under the Education Act 1944, parents can be taken to court for their children's non-attendance at school, and I think that the circular enjoins education welfare officers to take swift action. But is this always the right way to act? Magistrates find such cases frustrating, because under this section of the Act the only course open to magistrates is to fine the parents, and very often those parents have low incomes and are also drawing supplementary benefit. Equally, of course, a child can be taken to court for non-attendance at school and a care order can be made, but this is drastic action.
Turning to the circular, may I ask my noble friend the Minister why the circular is so narrow in laying down the duties of the education welfare officers? Is not the circular going backwards and forming a body of people called the "school board men and the attendance officers"? If education welfare officers are to confine their duties to just this narrow issue of truancy dealt with in this way, what is to happen, for instance, to the children who want to work and must receive permission? What is to happen to the children who are in the entertainment field and must be looked after? What is to happen to handicapped children, for whom the education welfare officers have to make provision if they cannot remain in their schools, as I, and I understand the noble Lord, Lord Ritchie, hope that they can. What is to happen to the children of the
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travelling families for whom the education welfare officers often make such good arrangements?
It seems to me that children who truant fall into three categories. First, there is the child who fails to fit into a particular school, and the failure of a school to meet the needs of a particular child; secondly, there is the child who suffers from a lack of control on the part of parents, who do not co-operate with the school. Thirdly—and I suggest that this is the biggest and most important segment—there are those children who are faced with family problems arising from social conditions, emotional and psychological problems or ill-health within the family.
I have been a civil servant in two government departments and I maintain that in these particular areas of the child at home, the child in society and the child at school, there must be co-operation between the different Ministries. With humility and a certain amount of diffidence, I suggest that perhaps there is not always understanding between the Department of Education and Science, the Department of Health and Social Security and often the Home Office. If there is not co-operation at Ministry level, there will riot be co-operation and understanding at local level between the directors of social services, education officers and the community doctors of the health service. If there is not co-operation there, there will not be co-operation between the teachers in the classroom, the social workers on the ground and the health visitors, who are most important, in the health centre and the health service.
I come back to the circular. If the vulnerable children who are today truanting in our country are not helped by all these services, we shall get nowhere. I ask my noble friend the Minister whether he will ask his right honourable friend the Secretary of State to consider a joint circular coming from all three departments, so that there can be co-operation between all the departments to deal with the truanting children of our country. "No man is an island unto himself", and never was that statement more true than in this sector.
4.26 p.m.
Lord Taylor of Blackburn: My Lords, I too am grateful to my noble friend Lord Irving of Dartford for initiating this short debate on the problems facing the nation's schools. I come from a region which in the past could boast of its schools, its standards and the progress which had been made in all the different branches of education. The North-West in general, and Lancashire in particular, were the forerunners of the industrial revolution which gave so much to make Britain great. Side by side with all the achievements in industry went the development of our education and schools, which took the form of a partnership between government, the local authority and the Churches. The North-West is perhaps different from many other regions in the country because around 50 per cent. of the schools are Church schools of one kind or another: aided, voluntary aided or controlled.
This relationship between Church and state, both locally and nationally, has worked well but the rapid growth of the population in the middle of the last century has meant that we have inherited many old and dilapidated schools which should have been

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demolished and replaced years ago; but because of the lack of finance, and in some cases the reluctance of national government, this has not been done. We are now facing extremely high maintenance bills which are proving too large for the local authority to ask its ratepayers to support.
Lancashire Education Authority has recently produced a booklet on the problems it is facing in school maintenance and replacement. I shall gladly pass on copies of this booklet to your Lordships if required. I should also like the noble Lord the Minister and the representatives of the department to avail themselves of this very useful document concerning the state of the schools in Lancashire.
For over 30 years I have been privileged to serve on education committees, both locally and nationally. Like other speakers before me this afternoon, I too have never known so much despondency and so much lack of enthusiasm in all spheres. I look back at the statistics in Lancashire and I know that we were proud of the fact that in the days before the reorganisation of local government, the shire counties, the county boroughs, were in the top 10 of the league table in every field, including student ratios, books, capitation allowances and maintenance. We were willing in those days, and are still willing today, given the resources, to participate in pilot schemes of one sort of another. Our teachers and our administrators did, and still do, a first-class job in spite of the difficulties. But many of them feel very depressed with the way in which central Government are failing to listen to, or to understand, the pleas.
We feel that we are being forgotten. The days of our prosperity have gone. The days of our giving so much to the nation have been forgotten. We have been sent perhaps to a geriatric ward, but we shall still go forward. I used the illustration some time ago in your Lordships' House, in trying to make the point that education has been neglected in so many ways, that once we looked upon education as being the major jewel in the crown of this country. I went on to say that it had now got down to the form of a cheap diamond in a small engagement ring.
It must be recognised that we have to get our priorities right by setting the right standards in schools in all spheres—from the building to teachers and to salaries. Education is very much like a running stream. It is constantly moving, flowing from the hills to the rivers and to the seas—from the village school, to the town comprehensive, to the city college and to the university. Unfortunately, at this time there seems to be a dam being built to stop the flow of progress. But the dam must burst. I hope that this short debate will assist this to happen soon and that it will make the Government aware of the many problems that we have to face.
Let us go forward. Let us try to make sure that we use everything that we possibly can to help our children. We have so much to invest in our children. It used to be said that every pound invested in education produced two pounds. Investment in education has so many repercussions. The benefits can be so advantageous to the country. Unfortunately, our investment now is nil. I despair therefore of what
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awaits future generations. They will not have the advantages that so many of us have had in the past. I plead with the Government to take notice of what is being said by all sections of the community.
4.33 p.m.
Baroness Phillips: My Lords, I should like to thank my noble friend for taking the opportunity to raise this important question. There is perhaps not much more that I need to say following the eloquence of the right reverend Prelate, my noble friend, and so many contributors to the debate. I am, however, an ex-teacher, the mother of a teacher, and the mother-in-law of a teacher. I have always been greatly concerned with the teaching profession and latterly, especially, with the Church schools.
In the last few months, I have attended the last occasion on which a school would convene together. I hasten to say that these were all Church schools. It was a very sad occasion. One knows that when a hospital closes or a school closes, it never re-opens again in the form that prevailed before it closed. So it was a very sad occasion. I suppose that it would be easy to say that each of these schools has had a very bad record. But that would be totally untrue. The teachers were dedicated.
I welcome this opportunity to say something in favour of teachers. Teachers are expected to pick up every evil in our society. I blame the parents. I lay the blame very stongly at the door of parents. Even this afternoon we have heard the noble Baroness suggest that it was the fact that teachers smoked that caused children to smoke. Even when I was teaching, one was not allowed to smoke except in the staff room. I cannot think that the rule has been changed very much.
A picture is conjured up of people sloping about the school corridors, smoking, drinking and taking drugs and, in the meantime, implanting propaganda in the children. Nothing could be further from the truth. The teachers are struggling in appalling premises. Their dedication has to be seen to be believed. If animals were housed in the same conditions, there would be numerous pressure groups telling us that it was a disgrace and that it should be dealt with tomorrow. What we offer our children is something that all of us should feel thoroughly ashamed of. Teachers have to cope not only with teaching but with every kind of social work. My little daughter-in-law said to me the other day: "I don't mind doing this, but I didn't train to be a social worker. I trained to be a teacher, but I have to spend so much time picking up from the children problems that should never have been brought to school". They are, however, brought to school because, willy-nilly, there is nowhere else to take them.
We have falling rolls. We have, in other words, fewer children in the schools. I recall that when I was teaching there was always held out the great carrot that one day we would actually have small classes where, as has been rightly pointed out, one can do justice to the children. I remember having 44 children in a class for a 30-minute period. That was less than a minute per child. And it included giving out the pencils and the books and taking them back again. We never had a one-to-one situation. There were all levels of intelligence. To me, it is remarkable that our schools

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should have turned out the quality of people that they have in past years. I do not share the surprise that there are not more of them.
Because of falling rolls, there are school closures and amalgamations. This means fewer opportunities for promotion. And teachers now are wandering around lost, and looking for work. Many ex-head teachers are being maintained on relatively high salaries with nothing to go to. What a colossal waste of talent, energy and everything else! I am sorry that things must always be brought back and placed before the Government. However, if you are the Government, you must accept responsibility for education and for many other things. Rate-capping and similar measures are having their effect on schools. The moment that there are cutbacks, people cut back on what they think is irrelevant. I saw the other day one of my grandson's books from which he was supposed to learn Greek. It was appalling. It was practically unreadable. And he shared it with three other boys. Yet this is 1986. Dickens could have written up with every truth what is going on in our schools.
There is an increasing proportion of very difficult and disturbed children. Teachers are blamed for what they are supposed to be doing, or not doing, in the schools. They are never praised for their handling of this increasing proportion of very difficult children and what they do to contain disruptive pupils. Very few sanctions remain to enable them to deal with these children. Teachers are constantly assaulted; other children are assaulted. One judge, I recall, actually told a teacher that she must expect to be assaulted six times in her working life. That is another, typical example of some of the foolishness shown by these judges to whom we have given a pay award.
Extra demands are being made all the time by the Department of Education and Science and local education authorities. There is increased interference. No profession has been interfered with to a greater extent by people who do not know the job than the teaching profession.
Baroness Faithfull: My Lords, would the noble Baroness not say the same about social workers?
Baroness Phillips: My Lords, yes, I would. I give the noble Baroness that one, particularly as I am very fond of her. It is so easy to solve a problem round a table or in this Chamber. It is only by standing at the sharp end of the job that you know what you have to contend with.
Finally, we have the suggestion from the Department of Education and from the Secretary of State that there must be assessment of teachers. I notice that they did not want the cameras in the other place—they did not want to be assessed on their performance. But they are very happy to assess the teachers. How can one assess a teacher? I taught dull and backward children—as they were then called—for two years. At the end of that period very few of them could read. They did not have the necessary grey matter in the first place. I do not know what I did for them; I hope that I made life a little fuller and happier. I suspect that it would be very difficult to assess, but I know—with all the conviction that one has when blowing one's own trumpet—that I was a good
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teacher. However, I would challenge Sir Keith to come and say how he will assess a teacher. It is virtually impossible to do. It is like talking about prevention; one never knows what one prevents.
At the moment we are having new courses introduced into schools. One has the gorgeous name of the Sixteen-Plus Certificate in Pre-vocational Education. We are hearing new words every day. I was intrigued by the one we had in Question Time. What was it—"demile"?
A noble Lord: My Lords, it was "decile".
Baroness Phillips: My Lords, "decile" is not a new word. I taught English but I have to look up words every day.
This system has been introduced without any proper financing or back up. It has been thrust once again on the teachers. Morale is at an all-time low. Let the Government make no mistake about that. This is a traditionally moderate group of people. We are not talking about some "hotheads", despite what the noble Baroness said. I am happy to tell her that that is quite unique in the London schools. One will always have a few, I am afraid, who will do such things. I say that because I go to a large number of London schools. The moderate groups are taking industrial action. I am sure that the Government will be pleased to know that they have taken up all the legislation which the Government have imposed on ballots, and each time they have a ballot within the union they get a higher vote still to have industrial action. And these are moderate people.
The authorities are obsessed with change; our society is obsessed with change. When they want to carry out a reform for financial reasons they all say that it is being done for educational reasons. I make no apology for quoting again what the famous Roman said. He died in AD 65 so he cannot contradict me. He said that they were always training but they were always being reorganised. He said:
"I was to learn that we tend to meet every new situation by reorganising and a wonderful method it can be for creating the illusion of progress whilst promoting confusion, inefficiency and demoralisation".
Once again nothing has changed very much. The Romans had an expression for nearly everything.
It is not without significance that The Times Educational Supplement—not, I hasten to say, anything from ILEA or from the Communist Party—has a headline in this edition saying, "Pay Deadlock Triggers Independence Boom". The independent schools are booming. Parents are trying to get their children into these schools. Why?—because they are so concerned, because they are not happy with what is happening in the schools; they feel impotent and are not sure how to deal with it. But perhaps that is what the Government want. The Government like market forces. They like to bring in contract labour; they like to have private health schemes encouraged; they like to have private education encouraged.
I would not say that this has been a conscious move. But I make an appeal. We must first have some kind of action in this deadlock on pay. I would emphasise that when one talks to teachers it is not the actual cash

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terms about which they worry; it is their status in the eyes of their pupils and in the eyes of society. This is what always concerns people. I do not believe that strikes emanate half so often from the question of pay, as we are led to believe. They emanate from people's feelings of frustration that they are not accepted for their worth in society.
I am very grateful to my noble friend for introducing this debate. I hope that we shall get something from it. May I leave with the Government a plea that this is desperately urgent and needs a solution.
4.46 p.m.
Baroness Carnegy of Lour: My Lords, I agree absolutely with the noble Baroness, Lady Phillips. The evidence is that the current preoccupation of teachers is not just with salaries and the funding of schools but also with what they see as a very real lack of appreciation by the public at the present time of their work, its difficulty, and its importance to the nation.
I myself have a good deal of sympathy with this. I am a farmer and most of us farmers also feel at the moment that our contribution to the common weal is being somewhat unfairly denigrated. I also have sympathy with teachers who resent the constant oversimplification of the issues and the mindless unresearched criticism by people who seldom enter a school. I agree with them that the public has not fully grasped the enormous changes which are taking place in the demands made upon teachers and the increased and changed workload that those changes represent.
That having been said, I have very little sympathy with the way that teachers are seeking to remedy the situation. It has always seemed likely to prove counterproductive in the short term. Now it is looking massively counterproductive, I believe, in the longer term as well.
After 15 years on a local authority education committee in Scotland I hope that I shall be forgiven if I speak of Scotland; and in particular of my own local authority of Tayside. Our teachers' unions freely admit that their action at the moment is designed to cause the maximum disruption at schools, the maximum impoverishment of children's education, the maximum hold-up of plans for the future which teachers can achieve without themselves breaking the law, breaking their contract or causing authorities to break the law, and at minimum cost to themselves.
Everybody knows in Scotland—and teachers know best of all—that among the most crucial aspects of a child's preparation for the modern world are the following: close and frequent contact between teachers and parents—as the noble Lord, Lord Parry, has so eloquently reminded us; close contact between schools and local industry; widespread supervision and influence by teachers—necessary to maintain good behaviour—and the implementation of a well-worked out curriculum and examination system to make school more relevant to the needs of young people in the world of work and life in general. New and agreed plans of this kind should now be well under way in Scotland.
Everybody knows that new methods of teaching using the new technology are very important, that
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extra-curricular activities of many kinds are crucial, and that to achieve a high professional standard teachers need considerable in-service training and need to spend a considerable amount of time in reading, planning and preparation. Yet these are the many aspects of their work to which teachers in Scotland have found it necessary to call a halt. And at what cost to themselves!
In Tayside in 1984–1985 out of a total of £45 million which would have been paid in teachers' salaries the teachers lost only £175,000, or 0.39 per cent. Up to December in the current year they lost £341,000. The sacrifice has not so far in the main been financial. It has been a sacrifice by teachers of modern participative management of schools, because, increasingly, the unions have been consulted about decisions within schools and their withdrawal is spoiling the whole management system. It has been a sacrifice of the present pupils' life chances and of parents' understanding of and faith in their schools, and it is increasingly a sacrifice of the life chances of the schoolchildren of the future.
The only schools in Scotland where the new curriculum and exams are being fully implemented and where teachers are fully involved in school decisions are in the private sector. I must tell the noble Baroness, Lady Phillips, that, although the private sector in Scotland is fairly small, I think that is why parents are taking their children away from the state system and putting them into the private sector. The teachers there accepted an increase in pay of 4 to 5 per cent. on account and have been working normally throughout the strike.
However, what matters is not yesterday but today and tomorrow. What must happen? I speak again of Scotland and, although the Scottish press is full of news on the subject today, I think that I am still up to date. We have a new Secretary of State. It seems that this should be regarded as a time for new initiatives.
First, it appears to me that the Government, the local authorities and the profession should now combine in a great drive right across the country to explain clearly and simply to parents and the public just what is planned for the education of our children and what the benefits will be; how the plans for the 10 to 14-year-olds will work; how the new courses and exam system for 14 to 16-year-olds, which should now be under way, will work; how the modular courses of the 16-plus will work; and how these will dovetail with the youth training scheme, with community education, with further education and training and with higher education. The public needs to understand these matters if the political will to implement them is to be found.
Secondly, a package must be negotiated and agreed forthwith with the teachers whereby it is acknowledged that teachers now have a different workload from that which prevailed even five years ago, different demands upon their time and energy, and that they require a new professionalism for which as yet few have been properly trained. It has to be acknowledged that co-operation with parents, co-operation with local industry and extra-curricular activities are no longer frills to be undertaken voluntarily by teachers as the spirit moves them, but are an essential part of the job. Agreement that these matters should be acknowledged should not be difficult as there already exists a

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survey on teachers' normal duties today which was produced by the joint negotiating committee and agreed by both sides.
The package must include a modern-style flexible definition of teachers' duties. It must include a commitment to re-examine the existing criteria in Scotland for staffing levels in schools, because these are probably no longer the most satisfactory or cost-effective way of deploying staff. Reflecting all this, the package must include new promotion and salary structures—structures which will allow skill and commitment to be rewarded, the best teachers to achieve promotion without having to leave the classroom and take to administration, and pay levels which compare favourably with other professionals in the local government service.
Funding such a package cannot be easy for the local ratepayers because teachers' salaries are such a large part of the total expenditure. In Tayside, which has a net budget of over £100 million, 51 per cent. of that budget is spent on education and 46 per cent. of the education budget goes on school staff costs. The teachers continue to say that in Scotland they want an independent pay review. But it must surely be a properly negotiated, agreed and realistic package. Human nature being what it is, if the money comes first it could take long enough for the rest of the urgently needed changes to happen. We have previous experience of Houghton and Clegg, when very large pay rises were awarded, the cost of which was the straw that broke the back of local government funding in 1979, and out-of-date practices continued virtually as before.
The skeleton round which such a package could be constructed is already on the table. It was put there by the local authority employment side of the joint negotiation committee last August, and the Secretary of State for Scotland has indicated that £10 million of new taxpayers' money could be available over four years to aid implementation. It seems to me that it is of the greatest importance to the life chances of our young people and to the career prospects of teachers—indeed, to the very continuance of the state education system as we know it in Scotland—that a campaign to help people understand what is proposed should be implemented, that an up-to-date package should be agreed forthwith and that we should be able thereafter to get the most important of all our services on the move again.
4.56 p.m.
Lord Stewart of Fulham: My Lords, we are all indebted to my noble friend Lord Irving of Dartford for initiating this debate on the problems of the nation's schools. There cannot be any doubt that of those problems at present the most pressing is the dispute with teachers and the fact that teachers are taking industrial action, with the inevitable damage that follows from that to the children and the education system as a whole.
I agree with my noble friend Lord Irving that what is needed is, first, an interim award of some kind. With that the Government must make it clear that it is their intention within a reasonable time to enable the teachers to recover the ground that they have lost since
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the Houghton award of about a decade ago. If the Government can create that situation, I think we may have the degree of trust which will make it possible to go on and bring in the other items: the nature of teachers' duties and the delicate question of the appraisal of teachers. The profession has not shown itself unwilling to discuss appraisal, but it will not agree either to that or to arguments about what teachers' duties should be unless the Government first make clear their attitude on the question of pay.
With the question of pay goes the question of the respect in which teachers are held. It is a fact that their salaries have been allowed to drop in comparison with almost everybody else's, which gives the real gravamen to their charge that the Government are neglecting them and treating them unfairly. I am sorry that the noble Lord who referred to teachers' holidays is no longer present; it is a rather ancient argument, and anyone who has done teaching for a little while will possibly understand why teachers need rather longer holidays than people who pursue other professions. However, in any case this reproach could have been thrown at teachers a decade, two decades, or half a century ago. It is not a reason why their salaries should have been allowed to slide back during the last decade in the way that they have.
The noble Lord, Lord Ritchie of Dundee, gave striking examples of the excellent work done by teachers in the most difficult material conditions. It is of course true that of all the things that affect the quality of education it is the human factors—the attitude of the parents towards their children's education and the gifts of the teacher—that matter most. However, sometimes that is used as an argument for excusing governments which do not spend enough on the material surroundings of the school—the buildings and the equipment. One must remember that children are not fools. If they observe that when a public house gets dilapidated beyond a certain point steps are promptly taken to improve it, but that nothing like that happens with schools, they will come to the conclusion that what their elders are always telling them about the importance of education is so much humbug.
We cannot expect teachers, however devoted, to go on giving of their very best in desperately unsuitable surroundings, with no prospect of having them put right. What we have noticed—and this was brought out most strikingly in the powerful speech of the right reverend Prelate the Bishop of Derby—is the way the Government have neglected the material surroundings of education; that work has had to be done in surroundings which made it clear that the community as a whole did not put a great value on education.
If we are to solve the problems of the nation's schools the Government will have to spend more money both on teachers' salaries and on educational provision of all kinds. I am afraid that this is a topic to which I refer whatever subject I start with. I usually end up by saying that the Government must be prepared to realise that they must raise the necessary taxation to meet necessary public services, whether those are defence, education, social services, or what you will.
We do not get inflation by increasing public expenditure; we get inflation if we increase public

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expenditure and have not the nerve to raise the necessary taxation to meet it. That has been the danger into which governments have constantly fallen. We had better stop talking about the possibilities of tax cuts until we have met some of the most pressing needs of the country, and a proper provision of the material surroundings of the education system is one of those essential things.
If we could do that, I hope that we could then avoid being led away from this essential problem of, are we, as a nation, ready to spend more on education? I believe that the number of people in the country at all levels of income who are prepared to see more money spent even out of their own pockets in order to have decent public services is steadily increasing. If the Government imagine that the country is full of people quite prepared to vote "Yes" for tax cuts, without bothering about what happens on any of the important public services, they are mistaken. At any rate, I hope they are.
We must keep in mind the need to spend more on education, on teachers and on buildings, and not be led off into the agreeable irrelevancies to which the noble Baroness, Lady Cox, tried to shift the debate. I hope that we are not going to have the comprehensive issue brought up again and be invited to try again with something like the 11 plus. That is to say, to commit ourselves to the notion that we can decide a child's capacities at the age of 11, and do so by—
Baroness Cox: My Lords, if the noble Lord had perhaps been able to hear what I said he would have heard that I had no intention of suggesting putting the clock back. I was arguing for a way of looking forward which avoided precisely that problem.
Lord Stewart of Fulham: My Lords, the trouble was that the noble Baroness objected to comprehensive education. That must have meant that she was in favour of some form of selective education.
Baroness Cox: My Lords, I am sorry, but, just for the record, I was arguing for something called magnet schools, or specialist comprehensives, which combine the best of both worlds.
Lord Stewart of Fulham: My Lords, I think that the noble Baroness is trying to have it both ways. She is trying to arrange some means of selecting children for one school rather than another. We have tried that. It produced the most remarkable nonsense. If anyone wants to study it they should read the reports of the Conservative women's conference in the 1950s, which displayed most devastatingly the muddles into which one got if one tried to proceed on any kind of selective system of education.
I have no doubt that there are some silly pamphlets written about political education. I must say that I was staggered when I heard the noble Baroness say that it has always been a cherished principle of ours that there should never be party politics in education. I can remember when I was in an infants school run by the London Country Council, as it then was, under Conservative control. We always had a special lesson about Disraeli on Primrose Day. It does not always
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seem to produce the effects that were hoped, and I do not think they do it now because I doubt whether anyone remembers which day is Primrose Day.
This is an abuse which can always occur, but I do not believe that it is a serious matter. If it were we should hear a great deal more about it from parents in London. If the Government imagine that parents in London are bitterly dissatisfied with the education they get from ILEA at the present time, then they are out of touch with what parents really feel. Let us not be led away from the real and pressing necessity to have a better educational system. Better and more satisfied teachers, better buildings and equipment for them to work in, and let us not be led astray by these comparative irrelevancies.
I wanted to add something about the nature of the buildings and equipment that schools have. It is staggering that we are now reading the extent to which parents are contributing to those things, buildings and equipment, which ought to be an esential part of the nation's own provision. We had produced from the Front Bench the other day statistics to show how increasingly prosperous this country is getting—apart from the number of people who have the misfortune to be unemployed. If we are getting so much more prosperous, why are we constantly being told that we cannot afford certain essential improvements in the public services? We must get back to the plain fact that we are not spending enough on education, that we had better get down to spending more; then we may get a little nearer to solving the problems to which my noble friend has helped to draw our attention this afternoon.
5.7 p.m.
Lord McIntosh of Haringey: My Lords, my noble friend Lord Irving has richly deserved the thanks that have been showered on him by all speakers for his foresight in introducing this Motion today. In addition to the thanks he must have the satisfaction of knowing that he has drawn into the debate a number of people with excellent personal understanding of the issues. If ever there were a subject before this House on which the emphasis must be on people—on what happens in the classroom—rather than on institutions, education in our schools is that subject.
We have been well served by the expert and wise words of many noble Lords this afternoon. I am particularly grateful to those who have referred to particular parts of the country and their problems and opportunities. The noble Lord, Lord Ritchie, referred to schools in London; my noble friend Lord Parry, to Wales; the noble Baroness, Lady Carnegy, to Scotland; my noble friend Lord Taylor spoke about the North-West. All of these have been real and valuable contributions.
There have been many other worthwhile things said to which a minute or two ought to be devoted. The noble Lord, Lord Ritchie, drew two relevant conclusions from his, if I may so as a survey researcher, rather small sample of schools. The two points that he was making which were particularly valuable were, first, that one element of the discouragement, disappointment and sometimes despair in our schools is the knowledge, both among teachers and pupils, that a high proportion of those leaving school

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are not going to find jobs. This must inevitably have a deadening and discouraging effect on the schools; the effect, in particular, of truancy which was referred to by a number of noble Lords.
He also made the point that the fact that a school is multiracial is not a disadvantage. On the contrary it is a real advantage. One of the most remarkable changes in our society in the last 30 years, one which has been almost entirely a beneficial change, has been the opportunity of our people to mix with those of other races.
One must be grateful to the noble Baroness, Lady Cox, for giving us a trailer for the debate which she will introduce on 5th February. At least she has given us an opportunity to sharpen our weapons, of which I assure her there are plenty, by exposing her arguments in advance. My noble friends Lord Parry and Lord Stewart, who both went a good way to answering the issue (particularly the recollection by my noble friend Lord Stewart of his own indoctrination) must strike a spark in many people's memories. I remember vividly being taught in economics that the climax of the organisation of human kind was the capitalist system. There was in the penultimate lecture a small piece on the economics of socialism in which it was pointed out how wicked and reactionary and incapable of achievement socialist economics would be—
Lord Boyd-Carpenter: Hear, hear, my Lords!
Lord McIntosh of Haringey: My Lords, that, I am sure, is acceptable to the noble Lord, Lord Boyd-Carpenter; but if he had heard his noble friend he might not be so keen on generalised accusations about indoctrination.
I was also interested in the comments made by the noble Baroness about the achievement of comprehensive schools. It is incumbent on us all to find an opportunity to debate this issue at greater length. I shall seek to do so. My recollection from the statistics of school leavers issued by the Department of Education and Science—I have only the 1982 edition to hand—is that the number of school leavers who had no qualifications at all declined from 20 per cent. of all school leavers in 1984 to 10 per cent. in 1982. There may be other figures than those which have been quoted by the noble Baroness, and the debate which might take place on this matter might be less one-sided than we are led to believe from the figures we have heard so far.
The right reverend Prelate made some extremely valuable points about the partnership, which is an essential part of our educational system, among the parents, the teachers, the governors and the community at large. It is one of the worst aspects of the current pay dispute that that partnership has been put at risk and that contact between teachers and the other partners in the education system has been cut off so brutally.
I thought that the noble Baroness, Lady Carnegy, made particularly relevant comments about the curriculum and the relationship between education and training. I know she referred particularly to Scotland, but the problem of the gap between school and work, or school and life after school if there is no
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work, requires much greater attention than it has been given. There are people in the education and training worlds who are anxious to see that gap reduced or broken.
I feel that we should be considering more deeply not just a two-year youth training scheme after pupils leave school, but some greater integration of training with education, probably from an earlier age of 14 to 19 years, with spells of work experience intermingled with spells of education, out of which the results could be not only examination results, which should always be available, but also the credits to which the noble Baroness referred.
I have said that it is people not institutions who matter in our schools, but speaking from this Dispatch Box I have an obligation to speak to some extent about institutions and about the balance sheets. There are things that I have to say about public expenditure on education, the relationship between governments and local education authorities and, finally, about the pay dispute. The figures for public expenditure on education are contained in this year's public expenditure White Paper, and very discouraging reading they make for everybody concerned with education and for the improvement of it. The plans going up to 1988–89 (I realise that these are planning totals and planning totals are not adhered to in practice, but they are the only things that we have to go on) envisage a cut in real terms in education expenditure of approximately 10 per cent. by 1988–89. The total public expenditure on education is proposed to go below the total of 10 per cent. of all public expenditure for the first time in many years. Expenditure on education was higher than expenditure on defence for many years until recently. By 1988–89, if the plans in the White Paper are achieved, expenditure on education will be only 80 per cent. of that planned for defence. If we consider this in terms of the shortfall from the real level of expenditure the situation is equally grave. By 1988–89 expenditure on the under-fives will have declined in real terms by 8·7 per cent., expenditure on primary schools by 7·3 per cent., expenditure on secondary schools by 10·2 per cent.
If the noble Earl thinks that he can say that the Government are behaving fairly and proposing to behave fairly by our schools in the light of those projections by his own Government, he is either much cleverer than I am in the interpretation of statistics or he is keeping the compartments in his mind very successfully apart.
The second issue which has to be raised is that of government intervention in the spending of resources for education. The noble Earl chided me last night for suggesting that the Government might impose minimum standards on midday supervision in schools, but we see a report in The Guardian today that the Government will be proposing in their Green Paper on the rates extending specific grants into new areas and particularly into education. The figure under discussion under the Education (Amendment) Bill instead of being 1 per cent. of total expenditure, 10 to 15 per cent. of educational spending or £1 billion to £1½ billion of the £10 billion total would be directly applied in specific grants by the Government as opposed to the block grant system which now obtains.

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The timing is such that the noble Earl has a golden opportunitiy categorically to deny those allegations which are presumably based on leaks, although I do not know from which department. He has the opportunity to say that these allegations are totally untrue and that the Green Paper will not contain any such proposals. If he fails to do that the House and the nation will draw their own conclusions on that matter.
Finally, there is the question of the pay dispute. It behoves all of us, while negotiations at ACAS are still going on, to be extremeley cautious in what we say, because nothing we say ought to put at risk the possibility of agreement between, unfortunately, the two groups of teachers and the local authorities. But the fundamental problem which cannot be solved either by the local authority employers or by the teachers' unions is that, whatever the opposite of tertius gaudens is, the absent partner in these negotiations (the partner who is determined to remain absent and who has played no significant or helpful part at any stage in this dispute) is the Government. It is the Government which control the expenditure of local authorities either, in some places, by rate-capping or by the penalties which they impose for under-spending. It is the Government which deny the local authorities the resources to reach a meaningful agreement with the teachers; it is the Government which have consistently made it impossible for agreement to be reached at a much earlier and much less damaging stage. I am not simply referring to the extraordinary maladroitness of the announcement of the top people's salary review immediately after the first rapprochement between the employers and the teachers last summer.
The fact is that there is so much wrong with teachers' pay that it cannot be dealt with on a single, 12-months' basis. It will take a much longer time for justice to be done to the teachers and to all of us as parents and members of the community who depend on a loyal and happy teaching service. In the period since 1974, in the period after the Houghton Report, teachers' salaries were roughly comparable to those of accountants, systems programmers and analysts, civil engineers, surveyors, production managers, office managers, local government administrators and so on. At that time, as I say, teachers were within 4 per cent. of the average salaries for those groups of people.
Now, teachers are paid 45 per cent. less than accountants, 51 per cent. less than systems analysts and programmers, 43 per cent. less than chemical scientists, 45 per cent. less than civil engineers, 13 per cent. less than surveyors—and I have not heard about a surveyors' strike yet—and 72 per cent. less than office managers and so on. The situation of teachers perhaps living in the same streets as these people, or living in the same community as these people, is desperate. There cannot be any justification for that continuing decline in relative standards for a group of people who, with very minor exceptions from a small number of people, are generally held to deserve the trust and support of our people.
It must be the case that, whatever happens at ACAS, there should be an independent public inquiry funded by the Government to look not only at this year's
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settlement but at the settlement over a period of years. This inquiry should be in the spirit of the Houghton inquiry and should look again with complete independence at the whole issue of comparabilities.
In the meantime, we must all hope that the ACAS discussions and negotiations meet with success in the very next few days, and that we end up from that at least with a conclusion to the extraordinary difficulties which have faced our schools since 6th February last year, and the Scottish schools for much longer. The debate this afternoon has shown that there are many more long-standing problems which we have to tackle; but they can only be tackled when this immediate problem has been overcome.
5.26 p.m.
The Earl of Swinton: My Lords, the noble Lord, Lord Irving, has given us an opportunity this afternoon for a thoughtful debate about the nation's schools. I could have wished that the terms of his Motion had allowed us to fix our attention as much on the strengths of our schools as on their problems, but perhaps in the present circumstances the emphasis he has chosen is inevitable. Nonetheless, I should like to begin my own remarks with the clear statement that the Government believe that our school system has made notable advances over the past 30 years, and that there is an enormous amount of dedicated, imaginative and well-focused work going on in our schools today. No criticism should be allowed to obscure that fact. In fact, I believe that in some respects standards have improved in recent years.
But I also believe that in some respects they have not, or anyway not fast enough to keep pace with the demands of the modern world. The Government described some of the areas where improvement is particularly needed in the White Paper, Better Schools. I shall not rehearse those comments here. I propose instead to talk mainly about the action being taken by the Government to improve standards in three crucial areas—the curriculum, examinations and teachers—referring as I do so to points made by noble Lords in the course of this debate.
The curriculum is at the heart of what the schools do. The Government have succeeded, I think, in getting very wide agreement with the proposition that for all pupils the curriculum should be broad, balanced, relevant and differentiated. What the education service now has to do is to work out those principles in practice: to ensure that every boy and girl really received a broad education in science; that all study one or more of the humanities to the age of 16; that all continue with a practical subject to the same age; that as many pupils as possible successfully learn a foreign language; that all subjects are taught in a practical and relevant way; that all pupils are able to progress as far and as fast as their abilities will allow. I could go on much longer.
Simply to state some of the requirements is to understand why they present schools with a formidable range of problems. Many schools no doubt are already meeting some of these requirements effectively; but very few can claim that they are doing so in every respect. Yet that has to be our goal. That is why the Government are seeking broad national agreement on the objectives of the curriculum. This

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requires a great deal of the teachers. They may have to rethink the structure of the curriculum as a whole, of option systems, of individual courses. They may have to rethink the ways in which they tackle the job in the classroom. For the upper years of compulsory schooling, the TVEI and other projects are exploring what can be done. HMI papers particularly those in the Curriculum Matters series, and policy statements from the Government, as well as the curriculum policies of each LEA, will help schools to think about the issues involved. And the governing body has an important role in this, too. But in the last resort it is the teacher in the classroom who has to make the necessary changes.
Of course, one of the most significant changes facing teachers throughout most of the United Kingdom is in the field of examinations. My right honourable friend, the Secretary of State for Education and Science announced on 20th June 1984 that the present system of GCE O-levels, CSE and joint 16-plus examinations would be replaced by a new single system of examinations, the GCSE. The first courses start in September 1986 and the first examinations will be held in the summer of 1988. This announcement followed a long period of debate and was widely welcomed both within and outside the educational world.
The timetable for the introduction of the new examination courses is demanding. The main task of preparation naturally falls to teachers. To assist them in that task, the GCSE examining groups, the LEAs, and the Secondary Examination Council, which is providing preparatory teachers' guides and videos, have collaborated in a special programme of in-service support for all teachers of the GCSE. The Government are contributing substantially towards the cost.
Noble Lords will be aware that some teachers' associations have instructed their members not to cooperate with the introduction of the GCSE as part of the action resulting from the present dispute. Specifically, they have asked their members not to turn up to the preparatory seminars organised under the training programme. I hope that teachers will think seriously before taking this course. These important reforms brought by the GCSE have long been advocated by many teachers and their associations. Many teachers have worked long and hard in the development of the new courses. By taking such action, teachers will only be making it more difficult for themselves to implement the new examinations, examinations which are desired as much by them as by the Government.
All preparations for the introduction of the new examinations are well on course. I am glad to be able to say that there have been no reports of significant disruption of these preparations so far; but of course the majority of teachers are only just beginning to become directly involved in the training programme. My right honourable friend takes the reported threats of non-co-operation with the GCSE seriously and will wish to monitor the position closely. However, the Government believe that the new examinations can be brought in according to the timetable which my right honourable friend set in June 1984. I hope that teachers will think seriously before taking any action
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which will damage their pupils' educational experiences and chances of examination success.
So far I have been speaking about the academic side of the work of our schools. But the Government, and society as a whole, look to schools to promote high standards not only of achievement but also of behaviour. A school's ethos can be a powerful determinant—though it is far from being the only one—of young people's attitudes and sense of responsiblity towards others. One aspect of that ethos is the way in which discipline is exercised. The Government's views on discipline in schools have been clearly set out in Better Schools. Schools need discipline for their own immediate purposes, so that they can get on with their main task of educating children, but they also recognise that the task itself extends to fostering the high standards of personal conduct which society expects from its adults. Most schools do in fact impose and maintain good discipline, not only by means of rewards and punishments, but through the examples teachers set through their every day relationships with pupils and parents and through curriculum subjects such as moral and social education. At the same time, I know that there is widespread anxiety about the minority of schools where standards are unacceptable, and we have called on them and the local education authorities concerned to tackle their problems urgently.
My noble friend Lady Faithfull raised the question of truancy. Prolonged absence from school without an acceptable reason is a matter for concern, whatever the reason and whether or not parents condone it. Unless firm action is taken, and taken promptly, it is likely to continue and become chronic and thus seriously affect a child's education and future prospects. This requires close co-operation between the schools and the education and welfare services in identifying absentees, discovering the underlying reason behind the absenteeism and finding and applying the appropriate solution. Then it means making it clear to the parents and pupils what will happen if the absenteeism continues. Finally, if all else fails, it means ensuring that the offence (because it is an offence) is brought promptly to the attention of the courts. The thrust of the circular is to concentrate the efforts of the education and welfare service on its primary task of ensuring attendance and to ask local education authorities to ensure that the service is effectively organised to do so.
My noble friend asked me a number of questions, but in view of the fact that time is running out I really think that I shall have to write to her about them. For the same reason, I shall not go into any of the points raised by my noble friend Lady Cox. She has given fair warning and she will have a chance to debate the subject further on 5th February. Perhaps I should say, on the specific question she asked about my right honourable friend thinking carefully before he closes any more grammar schools, that he considers very carefully all proposals brought before him by local education authorities for school reorganisations.
Her Majesty's inspectors of schools will be carrying out a review of good practice in schools as regards relationships, behaviour, attitudes to work and discipline, and this should provide valuable guidance

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for schools on these important aspects of their work. A report will be published by the end of the year. But schools cannot do everything on their own, and I was very grateful for the remarks made by the noble Baroness, Lady Phillips, and the noble Lord, Lord Parry. I know that the noble Baroness is not very good about staying, but I thought that she might perhaps have stayed for the end of this debate since it is a short debate. However, I am sure she has a very good excuse.
We look to parents during the pre-school years to equip their children with at least a basic idea of right and wrong and of how to behave considerately towards others. But we must also look to parents, once their children have started school, to support and complement what the schools do, and we are encouraging parent outreach schemes which help the parents understand how their role as educators fits in with classroom education. A survey of parent outreach schemes is therefore being commissioned by the Department of Education and Science to provide information on the critical factors that bear on parental involvement and on the types of scheme which could be encouraged on a wide scale. Finally, to reflect the fact that schools are rooted in the community at large, we are proposing to broaden the membership of governing bodies of county, controlled and maintained special schools, and we shall expect governing bodies, with head teachers, to take responsibility for promoting a suitable ethos in their school.
Perhaps I may say a little more about this. For a school to be successful in all its tasks, it needs to have an identity and clear sense of purpose of its own. At present, too few maintained schools have these attributes in sufficient degree. The Government see the governing body of each school as the focus for the necessary developments on this front. As announced in the gracious Speech, a Bill will shortly be introduced for the reconstitution of school governing bodies in England and Wales. Parents and the wider community served by the school would, as indicated in the White Paper Better Schools, have stronger voices and no one interest would be predominant.
The Government recognise the problems of education in the inner cities and are tackling them across a broad front. Inner city schools will benefit from our national initiatives to improve the quality of schools throughout the country. Furthermore, a great deal of money is already being directed towards the special needs of inner city schools. These needs are under continuous review—a process which, naturally, continues in the light of recent events.
The special needs of ethnic minorities are also being tackled, and I was very interested to hear what was said on this subject by the noble Lord, Lord Ritchie of Dundee. Financial assistance is available to local education authorities through the Home Office, under Section 11 of the Local Government Act 1966, to provide additional staff in support of the educational needs of commonwealth immigrants. Educational expenditure of about £75 million a year is supported under Section 11. In addition, education support grant is being used to support pilot projects to meet ethnic monority needs, to promote harmony between
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different racial groups and to prepare pupils and students for life in a multi-ethnic society.
Other measures are in hand too. For example, the new criteria for the approval of teacher training courses require students to be prepared for teaching in a multi-ethnic society. The in-service teacher training grants scheme will be extended from 1986–87 to include training to equip serving teachers to respond to ethnic diversity. The department has issued a consultation paper, inviting views on possible reasons for the apparent under-representation of ethnic minorities in the teaching force and of ways of increasing recruitment. Responses are now being considered.
The Government have recognised that their policies for better schools cannot be given proper effect without sufficient, suitable schoolteachers in post. They have consulted their partners about the numbers of schoolteachers required and have acknowledged that some further limited improvement in the overall pupil-teacher ratio for England and Wales may be needed, even though this is now at its best-ever level. The Government have made clear that the extent and pace of this improvement must depend on future public expenditure plans and changes in the cost of employing staff. It is also most important that any improvement should be used in support of the Government's curricular policies, and that this should be coupled with efforts to secure a more efficient deployment of the teaching force across and within individual local authorities. The Government and their partners are now considering the way forward.
A steady improvement has taken place in pupil-teacher ratios over many years. In response to a concern often voiced by parents as well as teachers, this improvement has been commonly used to reduced the size of regular classes. There may still be some classes around the country which are too large to allow adequate attention to individual needs, but on the whole the Government believe that it is now more important to use further improvements in staffing levels to focus on the celivery of the curriculum rather than on a general reduction in class size as a goal in itself. For example—and my noble friend Lady Carnegy of Lour said this—teachers may need more time away from regular classes for in-service training and curriculum review and may benefit from more flexible patterns of teaching, which can be more closely attuned to pupils' abilities and needs.
Improvements of this kind are important if we are to retain and motivate teachers of good quality, and I am glad to say that the profession is continuing to attract large numbers into training, despite the current dispute. Yet there is no denying that supply has become worse in certain subjects where there have always been difficulties because of direct competition for recruits with industry and commerce. I am thinking in particular of mathematics, physics and craft, design and technology. That is why the Government are keen to see a reform of the teachers' pay structure so that local authorities are given greater flexibility to recruit, retain and motivate people of the right quality, including people whose specialist qualifications are in short supply. We also believe that new graduates in maths, physics and CDT may require some extra financial incentive to spend a year on a

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PGCE course rather than accept immediate employment—which is why students on such courses in colleges in England and Wales will now be eligible for tax-free bursaries worth £1,200 a year, alongside mature students on specially-designed CDT training courses.
It is a matter of great concern and regret to the Government that the teachers' dispute should have gone on for so long—for almost 12 months in England and Wales and for nearly 18 months in Scotland. Like the noble Lord, Lord McIntosh, I very much hope that the talks under the auspices of ACAS—which were adjourned yesterday and are reconvening on Friday—will help the two sides to find a satisfactory way of settling this damaging dispute. The Government, like parents, want to see an early end to the disruption of children's education. Let us hope that the unions—all the unions—adopt the same objective. It is impossible to see what useful purpose can be served by intensifying the action directed against children. They have suffered enough.
With this damage being done, it should go without saying that the Government want the earliest possible end to this dispute. Yet it has been suggested that the Government are not doing enough. I really must refute that criticism. Our first concern must be for the children. We must be able to hold out to them the promise of good quality and uninterrupted education. This is why we need not only an early end to the current pay dispute but also a lasting settlement covering teachers' pay, their career and promotion structure, their duties and their conditions of service.
There is at present no formal statement of teachers' duties and responsibilities. That is no longer an acceptable position. When it suits them—during the current dispute, for example—teachers claim that many of the tasks they have regularly carried out in the past are voluntary and cannot be required of them. Examples are taking classes in place of absent colleagues, attending staff meetings and parents' meetings, and taking part in in-service training and other schemes of staff development. In times of dispute, some teachers—and I fully accept that this applies only to a minority—refuse to carry out some or all of such tasks and thus severely disrupt children's education at little or no cost to themselves, because employing authorities hesitate to impose penalties in the absence of any formal statement of teachers' duties.
Lord Parry: My Lords, will the noble Earl give way?
The Earl of Swinton: My Lords, I will not, I am afraid. I am very short of time. I have quite a lot to say and I think I am entitled to my 20 minutes. It has become essential to establish such a formal statement so that both teachers and employers know clearly where they stand.
The teachers' pay and career structure does not meet today's needs. Two specific problems are the limited promotion prospects for good teachers now that pupil numbers are declining, and the limited extent to which the pay structure enables employers to offer pay which takes sufficient account of the relative difficulty of filling particular teaching posts with
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appropriately qualified, trained and experienced teachers.
The Government recognise that the amount spent on teachers' pay needs to be increased in real terms if enough teachers are to be recruited, retained and motivated. The Government have offered additional resources, totalling £1,250 million over the four years 1986–87 to 1989–90, above what would normally be provided in the course of annual public expenditure planning and pay negotiations. Quite deliberately and properly, this was not a no-strings pay offer. This substantial additional investment was made conditional on sufficient progress being made towards a clear definition of the range of teachers' duties linked to their contracts of employment, and a pay structure which will offer more promotion opportunities, provide better rewards for leadership responsibilities, and attract skills currently in short supply.
I think that I can very quickly contradict the view held by I believe a lot of noble Lords today, that the blame for all that is wrong in our schools can be laid at the foot of the Government's expenditure policies. The facts simply do not bear this out. The resources which taxpayers and ratepayers put into the education of each child have increased under this Government. Record amounts of money are now being spent on the education of the nation's children. The noble Lord, Lord Taylor of Blackburn, who I think I can say is a friend of mine, though I cannot say my noble friend, said that the expenditure was nil. But 16 per cent. more per pupil in real terms is now being spent than in 1979. I acknowledge that falling pupil numbers have helped. But this still represents an enormous opportunity for good.
There is, as I said earlier, real improvement, too, in overall pupil-teacher ratios. These show that in January 1979 there were 18·9 pupils to every teacher in England. By January 1985 the measure was 17·8 pupils to every teacher—the best ever level. And last week's public expenditure White Paper confirmed the Government's plans for a further modest improvement to 17·7:1 in January 1986. The allocations for education capital expenditure in England in the financial year 1986–87, announced in December 1985, should enable LEAs to meet all basic needs for new school places arising from local population growth, and to carry out in full their plans for cost-effective rationalisation of school accommodation by the removal of surplus places.
I think that my time is running out. In conclusion, I have to acknowledge the considerable but legitimate demands that are placed on the education service by the need to improve standards to match the requirements of the modern world. The Government will continue to do all that they can not only to resolve the current dispute, but also to help the education service make the changes necessary if schools are to equip our young people properly for the world of the 21st century.
5.43 p.m.
Lord Irving of Dartford: My Lords, I hope that this debate has helped to emphasise the seriousness of the situation in our schools. I would just note—
The Deputy Speaker (Lord Aylestone): My Lords, the time allotted to this debate has elapsed. Does the noble Lord wish to withdraw the Motion?
Lord Irving of Dartford: My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Monopolies and Mergers Policy
5.44 p.m.
Lord Gallacher Lord Gallacher rose to call attention to the case for a coherent policy on monopolies and mergers which safeguards the interests of consumers, shareholders and workers; and to move for Papers.
The noble Lord said: My Lords, it would be unrealistic not to acknowledge that the background to this Motion has been heavily influenced by recent contested and rival bids for companies of such size and standing as to occasion concern and queries as to the ground rules; for example, which bids are referred to the Monopolies and Mergers Commission and which are not. In addition, it may be asked whether the Monopolies and Mergers Commission, as now constituted, has the capacity to cope with inquiries of such magnitude within the time scale normally allowed for references. We may also ask: who is bidding for what and why? Is it expansion, diversification, acquisition of assets cheaply?
What are the intentions if the bids are successful? Is an established firm to be split up and sold off? What will be the competition situation after the bid, as well as the track record of bidders in general and in the particular business for which a bid has been made? In these days, we also have the phenomenon of David seeking to buy out Goliath, and in that context I think people are asking: what is being used to finance such bids? Is it all own resources or is finance being jointly provided? If it is being jointly provided, who are the joint providers and why? Finally, there is the technical but important question of what will be the debt ratio if such bids are successful?
The legal basis for all this can be quickly filled in. The Fair Trading Act 1973 restyled the Monopolies and Mergers Commission and established the Office of Fair Trading, giving its Director General duties and powers as regards monopolies and mergers. The Competition Act 1980, one of the first legislative measures of this Government, abolished the Price Commission and the Act was said to be based on legislation in the United States of America. It gave reference powers to the Monopolies and Mergers Commission on anti-competitive practices and questions of efficiency, costs, service and possible abuse of monopolies in the public sector.
In addition, the Restrictive Trade Practices Act 1976 consolidated legislation relating to the supply of goods or services in the United Kingdom or part of the United Kingdom. More recently, the Telecommunications Act 1984 provides for references by the Director General of Telecommunications to the Monopolies and Mergers Commission covering possible monopoly situations in connection with British Telecom and possible anti-competitive
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practices. The Office of Fair Trading, itself a creation of the Fair Trading Act, has responsibility for consumer affairs, monopolies and mergers, restraints of trade and anti-competitive practices. The Office of Fair Trading is a Government department, so relations between it and the Department of Trade and Industry are crucial, yet in the opinion of many people are somewhat vague. Lastly, there is the Treaty of Rome which has various clauses dealing with competition, supported by directives and regulations, as well as decisions by the court, together with a competition directorate as part of the Commission's staff.
Sparing use has been made of monopolies and mergers references under the Fair Trading Act 1973. Taking the six years 1980–85, there have been 12 monthly references and 40 merger references. Even less use has been made of the Competition Act during the same period. Of anti-competitive references, there have been five only and, even allowing for undertakings to desist, obviating the necessity for a reference, this seems a very small number. But of Section 11 references under the Competition Act—that is, of public bodies—there have been 20 out of a fairly limited total of statutory public monopolies.
Reports by the Monopolies and Mergers Commission on public bodies have not been unduly critical and are little different from what any firm of management consultants would find in any large organisation not previously investigated. I find it ironic that the solution to statutory public monopolies is the establishment of statutory private monopolies and even with the protection of Oftel, and similar proposals for British Gas users, the fundamental problem remains; that is, that it is the duty of any company to maximise profits to its shareholders and yet, if it is a monopoly at the same time, there is to be a restraint imposed upon it as regards abuse of market power.
Price restraints, as devised for Telecom and as proposed for British Gas, are not in my opinion the answer. If the assets are sold in the first place to the public on privatisation at a low price to ensure a political success for privatisation as such, then the subsequent public company can comply with retail price index restraints and still either overcharge or at least be arbitrary in prices, either to ward off future competition or as between different categories of user. In this connection, noble Lords will be aware that the Director General of Oftel is already making noises about British Telecom as regards its pricing policy between commercial and private subscribers.
Consumers are not over-consulted in monopoly and merger situations. Consumer bodies are more concerned with complaints than with the ownership of assets. Yet, for example, consumers may be disadvantaged in areas where market dominance is just short of a national or local monopoly, defined as 25 per cent. of the supply of goods or services. The two examples that come to mind are retail food chains and breweries. The Monopolies and Mergers Commission and more recently the Office of Fair Trading gave large retail food operators clearance over the way in which the discounts they obtained from suppliers, and which were unrelated to quantities, were reflected in their retail price structures.
The Monopolies and Mergers Commission found no market detriment in the position at the time of investigation although they recognised the power which large retailers had over manufacturers and dominance over smaller competitors. The Monopolies and Mergers Commission warned against further concentrations of power in food retailing by way of more takeovers. Yet they ignored growth by way of undue success in gaining planning consents from local authorities, which is now the growth route of large food retailers which favour out of town locations. The Department of the Environment is not willing to look at this because of the sovereignty of local authorities in planning matters and the ultimate judicial role of the Secretary of State for the Environment in planning appeals.
Brewing mergers can also reduce both consumer choice and competition by means of acquisition which gives regional dominance via tied houses and the planning machine. The rationalisation of breweries creates redundancy. The European Economic Commission is interested in competitive aspects of this part because of restrictions on consumer choice. What consideration might be given to strengthen the position of the consumer? Where consumer interest in quasi or fully monopoly situations continues, the Monopolies and Mergers Commission should consider attaching conditions before granting consent for bids to go ahead and should also recommend the continuance of ongoing surveillance of the merger by the Office of Fair Trading, possibly by way of a revival of the Consumer Protection Advisory Committee, which was first established under the Fair Trading Act and subsequently disappeared.
I turn now to the concern of shareholders. I am particularly interested in those people who are indirect shareholders—those who hold life assurance policies or are interested in pension fund investments. The duties on trustees under the Trustee Investments Act 1961 as regards investment are minimal, while the reasons for decisions on mergers and takeovers by those who act for policyholders and pension funds are totally unknown. What criteria do they use before the acceptance of a bid? To whom to trustees turn for advice? Upon what basis is such advice given? Does the attraction of an untaxed capital gain and its beneficial result on superannuation fund valuations take precedence over the long-term interests of the company involved? Is consideration given to the possible effects on employees of the firm for which the bid is made? Transparency in such affairs is of vital importance. Pension fund finance is crucial to capital investment, as the Wilson Committee on Financial Institutions revealed. Improvements in the participation basis for the joint operation of pension funds is overdue and must include some say as regards investment policy.
Do shareholders generally rely on views given by company advisers in contested mergers and takeovers? If so, the role of these advisers (mainly merchant banks) needs clarification. In such contests nowadays advice of the most partisan kind is backed by heavy advertising. Should one not look for greater neutrality and objectivity among those entitled to call themselves bankers? Is national advertising of blatantly knocking copy, conducted for reward, the best basis for reasoned
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judgment by shareholders? Is the Takeover Panel, as now operated, strong enough to control the situation at present? Of 139 bids launched last year, there were only nine cases where the defending company successfully maintained its independence. This was good for business for merchant banks, especially those acting for bidders.
I turn now to the position of workers. They are the least protected of all in merger situations, whether or not the mergers are opposed. Yet jobs and/or promotion prospects may be on the line depending on the intentions and attitude of the successful bidder. The possibility of redundancy in the private sector is a grim one in today's economic climate involving also a diminution of pension rights. The continuity of legal obligations to workers on change of company ownership arose from our membership of the EC, yet Her Majesty's Government have consistently opposed EC proposals for worker information and participation, whatever form these proposals took. Our Community partners are surprised by this, as they are by the confrontation in United Kingdom industrial relations.
Her Majesty's Government place reliance on voluntary participation and information agreements between management and workers. This reliance is plainly not successful in the United Kingdom despite the modest provisions included in company law obliging firms with more than 200 workers to report to shareholders annually on labour relations. Even this had to be won from Her Majesty's Government by amendments in Parliament and falls well short of standard practice in other member states of the EC. The attitude of the CBI in all this is mysterious. The CBI favours participation with the TUC in the National Economic Development Council yet it appears timid in extending this to member firms. Employee shareholders have increased in number in recent years but not, as yet, in influence. Do trustees acting for employee shareholders consult them when deciding whether or not to accept bids? How is this process of consultation carried out? With regard to management buy-outs, and in particular their effect on non-participating workers, we have as yet a totally unknown quantity. The whole area of the effect of mergers on workers needs examination, and especially the consequences for employment.
What conclusions can we draw from this brief summary of the present situation? The basis on which references of mergers are made to the Monopolies and Mergers Commission, or not made, by the Secretary of State for Trade and Industry needs greater clarity. So, too, does the relationship in this and kindred matters between the Office of Fair Trading and the Department of Trade and Industry. The proven inability of companies to resist bids should either cause greater use to be made of references to the Monopolies and Mergers Commission or control of the role of merchant banks in such contests.
The Monopolies and Mergers Commission should be enjoined to report specifically on possible effects on consumers and workers when allowing bids and, if deemed necessary, to recommend specific safeguards for both categories and follow-ups for these. Information to workers about company policy, including investment, should be ongoing and in accordance with

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our EC partners. This year's review of competition policy promised by the Secretary of State for Trade and Industry should not be internal but wide ranging, with major bodies representing consumers, shareholders, employers, pension funds and workers, plus the Monopolies and Mergers Commission and the Office of Fair Trading, being invited to contribute so that direct interest and practical experience can be given full weight.
These are matters of great moment perhaps not appreciated by the man in the street. It is my hope that in moving this Motion today a heightened appreciation will come to him. My Lords, I beg to move for Papers.
5.58 p.m.
Earl Ferrers: My Lords, the House will be grateful to the noble Lord, Lord Gallacher, for introducing this Motion at a most opportune time and for the way in which he opened the debate. The questions of public and private monopoly are being discussed at the moment and there are the prospects of takeovers. They are all very much matters of importance at the moment. I have never quite understood how it is that when takeovers are in the air they become infectious. One company starts to take over another company, despite the fact that hundreds and sometimes thousands of millions of pounds are involved. But that seems to be the pattern at present.
I wish to make only one point in what is a very large, specialised and technical subject, in which I do not pretend to have any great expertise. Takeovers are not of themselves wrong. They sometimes strengthen businesses; they sometimes create opportunities; they sometimes save businesses. As a result, people sometimes make money and at other times they lose money. Sometimes jobs are created and sometimes jobs are lost. One thing is certain; it is that takeovers wake everyone up, although they frequently create uncertainty and apprehension in so doing.
Takeovers are and should be an inevitable and respectable part of the industrial and financial scene, provided that the rules are fair and right. If a company can afford to buy another company then, subject to various criteria, that is not wrong. Often the company may have to borrow money to achieve a takeover, and that is not wrong. But there is a new practice coming onto the scene that is undesirable, and it is one to which the noble Lord, Lord Gallacher, referred. That practice is when one company wishes to buy another company, borrows all the money to do so from a bank or from a number of banks, and then uses the company that is the subject of the bid as collateral with the banks for the money which the company has borrowed. This can only mean that the company that has been purchased then has to be broken up in order to pay off the banks. I believe that practice is quite wrong.
As an example of that practice I cite the current proposed takeover by an Australian company of Allied-Lyons. The bidder is Elders/IXL, 51 per cent. of which is owned by two people who live in Monaco. The bid is backed by a number of foreign banks; an
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American bank, a Hong Kong bank, an Austrian bank and a French bank. They have all gathered together as a consortium and have agreed to put up the money to enable an Australian company to bid for Allied-Lyons.
What is the collateral for that vast borrowing? It is Allied-Lyons when purchased. That company is valued at some £2,000 million. It has substantial interests overseas and employs 70,000 people. If the bid is successful, then it will have to be broken up in order to pay off the banks. Indeed, the prospective purchasers are engaging in the unseemly task of travelling round the world offering for sale parts of a company that they do not even own in order to establish how they can best raise the capital to pay off their borrowings, should those borrowings materialise and their bid be successful. That is a pretty disagreeable sight. It is highly speculative. I believe that it is asset-stripping of the worst kind.
Such a takeover is undertaken without any consideration of whether it is in the British national interests, in the company's interests, or in the employees' interests. It is done, as the Americans would say, just in order to make a fast buck. There is nothing at present in the rules to stop that practice. I ask the Government this question: should there not be? Other countries have protection in order to defend themselves against such (as one might call it) extraterritorial marauding.
In the case that I have chosen, the company that is the subject of the bid, which is over four times the size of the prospective purchaser, cannot make a counter-bid because Australian law prevents that. But our laws do not. It is true that we have the Office of Fair Trading and the Monopolies and Mergers Commission, to which this particular bid has been referred; and it is being regarded as a test case. If that takeover is permitted, the green light will be given for other takeovers to go ahead on a similar basis of wholly borrowed money. I ask my noble friend on the Front Bench to say, when he comes to reply, whether he considers that such is sufficient protection to afford companies, and whether it is sufficient protection to allow the Monopolies and Mergers Commission and the Office of Fair Trading to be the sole arbiters. Is that protection sufficient even though it permits the offers to be made and permits people to try to see if they can get away with such a takeover?
I would not dissent from the Government's general philosophy of allowing market forces to operate, but the game must be fair and the rules must be clear. One cannot permit outside speculators to come and play skittles with our companies and so enable others to break up at a stroke, and for their own personal benefit, companies that have been built up over the years by sound and prudent management, and by so doing put at risk the employment of those involved in the company.
I hope that my noble friend will be able to give the assurance, so far as he can—and I realise that there may be difficulties for him—that the Government are seized of the highly damaging nature of that kind of takeover and will be taking active steps to see whether it is possible to prevent that form of financial business taking place in the future.
6.6 p.m.
Lord Grimond: My Lords, like the noble Earl I am very conscious of the timeliness of this Motion, which has been so ably moved by the noble Lord, Lord Gallacher. His Motion asks for a coherent policy on both monopolies and mergers, and it goes on to ask for safeguards for three classes of people: consumers, shareholders, and workers. To my mind, the best protection for the consumer is competition, and there is no real substitute for that. If monopoly is inevitable then in my view the least bad method of dealing with it is to make the monopoly directly responsible to a Minister of the Crown and through him to Parliament. That is my view on monopolies.
When it comes to mergers, the matter is much more difficult. In regard to small shareholders, in many cases mergers have proved very much to their advantage. In fact, were it not for takeover bids it is rather difficult to see what sanction small shareholders would have against self-satisfied or complacent boards that ignore their interests. They have very little say in appointing directors and certainly no say in sacking them. If the Financial Times figures for January 1985 are still relevant, the small investors in the Stock Exchange have done pretty badly over the past 20 years.
I myself am a small shareholder in the Distillers Company. I am very conscious of the fact that I owe Mr. Gulliver a luncheon—and a very good luncheon at that. Up until now, the Distillers' directors have shown remarkable complacency, if not incompetence. They have been content to put up their own salaries, but their dividends have hardly kept pace with what one would expect of an extremely good property. Never before has a kick in the pants had such direct and galvanising results. Now the newspapers are full of advertisements from the Distillers Company saying what wonderful things it is going to do or even has done. To my mind, those advertisements are faintly ludicrous—apart from being rather expensive, which I imagine is also down to the shareholders. So although shareholders may suffer from some takeovers and mergers, on the whole they have probably gained.
I am not so sure about consumers or workers. Consumers have certainly not gained where takeovers and mergers have led to monopolies or semi-monopolies, but in many cases they have improved the competence of the companies and their output. In that respect consumers have gained, and it may well be that in many cases mergers have been to the advantage of the workers. However, it must be remembered that although there was a fashion for conglomerates—and the noble Earl mentioned how these things tend to come in cycles and fashions—for some 20 or 30 years, some of those conglomerates have not proved so very successful. In fact, some of them have now been broken up or are subject to takeover bids.
Most of what I say applies to the past. Even in the past there is one section of the community which is not mentioned in the noble Lord's Motion: I refer to the public at large. The effect of mergers, certainly on Scotland and the North of England, has been to remove head offices and decision-making in many industries to London. This has drained Scotland and other parts of the kingdom of their best brains and of all that makes a viable community with effective control over its own economic decisions.
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That is a very important aspect and it is one of the aspects which to my mind has led to the demand for Scottish self-government. But now the position seems to be changing, and it is changing for the worse. So far as I can see, the main power in investment now lies in the pension funds. Their interests do not always seem to be the same as the long-term interests of the companies which they now virtually control. Recent mergers appear to have been carried out, or suggested, purely for financial reasons, manipulation and gain, and not always in the best interests of the workers or indeed the consumers.
Furthermore, the noble Lord mentioned this habit—if that is the right word—of making bids on borrowed money. I wholly agree that this must be a very dangerous development. I trust that he will get an answer from the Government to the questions he put on this subject. It also seems to me that we shall need to take certain other measures first to broaden the powers of the various commissions—the Monopolies and Mergers Commission, the Office of Fair Trading, and so on—so that they can take into account the results for the community, for the workers and for the consumers. Here I very much agree with what the noble Lord, Lord Gallacher, suggested.
Secondly, I think we must now recognise the rights and interests of the workers in the conduct of their companies. It is no good any longer pretending that companies belong solely to the shareholders. As I have pointed out, even that is something of a farce. They now belong to directors and, at second hand, to the pension funds, and so forth. In Germany, the workers, through the workers consultation law and the co-determination law, have absolute rights to be consulted on decisions such as those which arise when mergers are carried out. No one can pretend that German industry is inefficient. I believe there are now some troubles arising in Germany between the trades unions and management, but on the whole the German laws have been a success.
We need somehow to recognise that the workers have rights stemming from either property in the company or possibly from some form of certificate, as suggested by Professor Meade, which will allow them to have their say and influence in cases where the company is to be taken over. It is unrealistic to suppose that workers have no long-term interest in their companies. They probably now have greater long-term interests than either pension funds or other institutional investors. Therefore, I hope that as a result of this debate the Government will not only look into the question of the bids made based on credit which is then secured upon assets which at the time of the bid they do not hold, but will also consider the position of the various bodies which can deal with monopolies and mergers and, in particular, with the rights of workers who, by their livelihood, make the greatest contribution to their companies.
6.14 p.m.
The Earl of Halsbury: My Lords, I too express my gratitude to the noble Lord, Lord Gallacher, for giving me an opportunity to ventilate some of the matters that are on my mind at the moment. I shall not talk about the Distillers/Guinness merger, because I am a shareholder in both companies. I shall have something

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to say about the General Electric/Plessey proposed merger, and I am shareholder in neither. What I want to talk about are the questions which I feel the Monopolies and Mergers Commission should ask itself in addition to questions about malpractices, and so on. I shall not repeat what the noble Earl said about that. Manageability and structure is what interests me. Is the result going to be more or less manageable than the components were beforehand? Will it result in a structure directed towards, rather than away from, whatever consensus ideal the Monopolies Commission can identify?
May I say something first about manageability and unmanageability? Horizontality is always manageable, however large an organisation may be, if everybody is doing the same thing and all are trained in the same way—possibly a divisional structure. Let us suppose a departmental manager goes soft on you and exhibits inefficiency. It is easy to promote an assistant manager from department A to department B, because they are both trained in the same way. There are plenty of examples. In the high street one sees Marks and Spencer, Woolworth, and British Home Stores, which are all horizontal organisations, each one doing its own thing. There are chains of breweries throughout the country and there are distilleries. Some of these have grown by accretion and merger and others simply by expansion. Marks and Spencer has grown by expansion. The House of Fraser has grown by accretion.
To do anything well in this world you must concentrate on one thing and try to do it well. The cobbler should stick to his last, and so must the butcher, the baker and the candlestick-maker stick to theirs. But when it comes to candles as opposed to candlesticks, there is more than one way of looking at it. In my view, the specialist must take the broadest possible view of his specialisation and follow where it leads. One is not just a candlemaker but an illuminant manufacturer. If you think of yourself as an illuminant manufacturer, that generalised view of your own speciality will lead you from candles to gas mantles and electric lamp bulbs. If you fail to take the broad view and take the narrow view, it will lead to a dead end. That is what happened to Prices Patent Candle Company, which said that people will always want candles. So they do. I have in my home a box of 10 candles which I purchased 20 years ago in case of blackouts, and I have used one of them in 20 years.
Verticality tends to be unmanageable. The Kynoch dream of autarky and self-sufficiency never can be realised. Kynoch made sporting cartridges for shot-guns. What are they made of? They are made of cardboard. To make cardboard you must have a forest, a pulp mill and a board mill. Next, they contain lead shot, so you must have a lead mine, a lead smelter and a shot tower. Then of course there must be a propellant and a detonator, so you must have an explosives factory. Finally, the cartridge case is sealed off with a brass cap, so you must have a copper mine, a zinc mine, a smelter, a rolling mill and forming machinery. Kynoch tried to do it, but it is impossible to keep all those things permanently in balance, on the one hand, or efficiently trade off surpluses or buy in shortfalls, on the other. The dream was shattered when
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Kynoch died. No one could run that business and it disappeared. Management succession in a vertical organisation is extremely difficult. You cannot bring an efficient assistant manager from a rolling mill and put him into a pulp mill. He does not have the experience of the work, and so on. Conglomerates based on finance are in very much the same position. There are the usual difficulties of management succession.
I now come to structure, and I should like to illustrate this with the structure of the chemical industry, which is a three-component structure. First, there are the operators—people like ICI, Monsanto, Du Pont, and so on. There are the components and plant suppliers—pressure vessels, pipes, plates, and so on. In between are the architects and engineers—the turnkey contractors who design the details of the plant specified by the chemical manufacturer. If their design is accepted they take a turnkey contract and place it with whatever components supplier they think will be in the best interests of their client, to whom they stand in a fiduciary arrangement. When they have erected the whole thing they turn the key in the front door, present it to the client and say, "Enter into your property. Here is my bill for my fees".
Now that is a three-component structure which is well understood. It is traditional, it has been tested in time, it has not been interfered with and of course the conditions are very simple. The architects must not own and control the equipment suppliers and the operators must not own and control the architects, or the fiduciary relation between them is destroyed. Of course, they can have their own in-house engineering facility, which is another matter, for building pilot plants and testing new processes being developed and so on. The architects—in this country for example, Davy International, Simon-Carves, Humphreys and Glasgow, and in the United States the Kellogg Corporation and McKee—all operate independently.
We tried to bring this structure into existence for nuclear power engineering and five consortia came into being. The first of them was a consortium, financed by boilermakers, turbo-generator manufacturers and civil engineers, which had an extremely able managing director who was deeply grounded in the kind of architectural engineering of the chemical industry. He was Sel Ghalib, a British subject, albeit born a Cypriot-Turk, and a graduate of the university in this country. Needless to say his mother tongue was English. Consortia two, three and four followed.
The first one was brought into being by the genius of the noble Lord, Lord McAlpine, who I am sorry is not in his place, and Sir Claude Gibb of Parsons, who, alas, died; and then there were a group of North-East Coast heavy engineers and boilermakers who financed the first of these consortia. The managing director was given absolute freedom to place orders for his client who was of course in those days the predecessor of the Central Electricity Generating Board and not necessarily with the shareholders. Others came into being.
The second one eventually merged with the first and that was based simply on personal friendship between the late Lord Chandos, and the noble Lord, Lord McAlpine. That was at a time when there were great

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difficulties in getting enough orders. Things were not going as fast as had been hoped. The whole thing was shattered, so to speak, when General Electric proceeded to merge with English Electric and AEI, because it cut right across the whole structure. Number five went out of existence and numbers three and four merged. Finally, the Government took a shareholding in the lot, and it now stands as the National Nuclear Corporation and endeavours to conform to the model about which I have been talking. I do not really know whether it does so successfully. With the wisdom of hindsight, I believe that the merger of the turbo generators in consortia two, three and four confused rather than helped the sorting-out operation.
Left to themselves, I think that consortia numbers one and two would have survived and numbers three and four would have been knocked out, leaving one strong consortium with power to place contracts, not with its shareholders but with the industry as a whole. The principal difficulty from the start, of course, has been in having a monopoly customer which has wild fluctuations in its notions of its future needs.
Now I turn to the Plessey/GEC merger. I am not a shareholder in either company and not emotionally involved with any of the personnel involved. My question merely is this: should the MMC guide the parties to a three-component structure in the telecommunications field? This is a good question. Should we have a three-component structure as in the chemical industry, with component manufacturers in one big group, systems engineers in a second big group dealing with the customers, who would be BT of course, and similar organisations overseas, and then the various products that appear in the High Street. These are good questions, and I am not here to answer them; I am here to ask them.
It is for the MMC to provide the answer. I hope that their terms of reference permit them to answer it. I hope that their terms of reference permit me to give evidence to them in more detail than I can hope to do in addressing your Lordships' House this evening, and thereby guide the parties to a solution and what I believe would be a great contribution to British communications engineering, in the hands of the noble Lord, Lord Weinstock, who has done so much to reconstruct British electrical engineering and give it a new impetus.
6.25 p.m.
Lord Mottistone: My Lords, I, too, should like very much to thank the noble Lord, Lord Gallacher, for introducing this most interesting and timely debate. I must apologise to your Lordships, and in particular to the noble Lord, Lord Gallacher, and to my noble friend on the Front Bench who will wind up, because I have a long-standing engagement and may have to go a little early—but as we are getting on so fast, perhaps it will not be necessary.
My noble friend Lord Ferrers covered much of the ground that I was intending to cover, but as he did it so much better than I could have done, I do not grudge it him. My speech therefore will be relatively short and more in the nature of underpinning one or two points which he did not make but which I think are worth making.
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He talked specifically about the Allied-Lyons and Elders saga. I should like to talk rather more generally about the threats from what I call "overseas predators" to the food and drink processing companies generally. For some reason there are several of them which seem to be rather more under threat from this sort of attack than are other types of company. I think it is understandable, but particularly unfortunate because food and drink manufacturers have been among the most successful of British companies during the past 40 years, both at modernising themselves and in providing their customers with wholesome but inexpensive products of great variety to suit all tastes.
Some three and a half years ago, in negotiating to obtain a substantial tariff reduction for biscuits and chocolates in Japan, I was able to point out that food and drink processing as a whole was the second largest British manufacturing industry and needed to be treated on a par with major Japanese manufacturing industries and not, as they were tending to treat it, as a mere offshoot of agriculture, which was the way they treated their own food manufacturers who have not developed so well or so fast. One of the things which has happened since World War II, is that most of the bigger companies in these industries have rationalised themselves as fully as they could before attaining a monopoly position in their own United Kingdom market, and this is important in view of the threats that they are facing from overseas.
My noble friend Lord Ferrers has spoken about the Elders situation and he pointed out how the raising of money in the form of loans from international banks had landed Elders in the position that, if they were to win the bid, having been allowed to do so, they would then have to use the money that they had obtained from selling off parts of Allied-Lyons in order to repay their bank loans. If such a disposal of the assets of Allied-Lyons were to take effect, there remains the fact that I have just referred to, that many of the larger food and drink manufacturing companies, who would have been the ones who would be able to pay for the Allied-Lyons assets, have reached the limit of their share of the market.
Accordingly, it is almost certain that many of the Allied-Lyons businesses would be unsellable and therefore would have to be shut down, with the consequences about which my noble friend has told us, and with disastrous results for all the individuals whose safeguarding is the subject of this debate. It would mean customers losing choice, shareholders losing money and workers losing jobs.
It seems to me therefore—and here I thoroughly endorse what my noble friend has said—that if our highly efficient and profitable food and drink manufacturing companies are themselves to be safeguarded, then we must introduce overseas investment restraints similar to those in Australia. I understand that Germany and Japan also have such safeguards and that the United States has this subject under consideration at the present time. Therefore it would not be an unreasonable or exceptional restraint on trade if we were to introduce such safeguards here. Indeed, the extra safety from foreign predators might well improve trade, by freeing United Kingdom companies to concentrate more on their main business of selling at home and abroad.

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The Government, I hope, will not say that there is a safeguard in the shape of being able to refer the matter to the Monopolies and Mergers Commission, which they have, in fact, done in this case. That has all sorts of side-effects that are not beneficial. The fact that the matter might be referred is no deterrent to the overseas predator, whereas if there was a strict limit on the amount of shares that he could hold in a particular British company, without seeking approval, he would not start the action in the first place. But directly he starts the action and, furthermore, when it gets referred to the Monopolies and Mergers Commission, a large amount of the more important effort in the company is diverted into preparing the necessary reports for this event and for fighting off the attack when it comes in the first instance.
There is a great deal of wastage of effort, particularly of very senior staff of the company, which prevents them from getting on with their main business of selling their product at home and overseas. It is therefore very important, I suggest, that we should have some means of protecting our companies, of all kinds, from this sort of attack which, as my noble friend Lord Ferrers explained so ably, is particularly unpleasant and undesirable and which, indeed, is not conducive to good trading. For that is what the matter is all about. I hope that my noble friend on the Front Bench will be able to say something, if only that he will make sure that the Secretary of State takes particular note of this and gets on with it as fast as he possibly can before any more trouble occurs.
6.32 p.m.
Lord Hatch of Lusby: My Lords, the noble Earl, Lord Ferrers, put his finger right on the spot of this debate when he said that it was timely. It could hardly be more timely when we see the whole relationship between Government and industry in this country as a complete shambles. It is, in these circumstances, that one welcomes the Motion put forward by my noble friend Lord Gallacher. Just last week this Government fell from farce into panic. After weeks of unseemly public wrangling between Ministers, the curtain was suddenly and brusquely torn away from the window of the Cabinet room. And by whom? By one of the mistress of Number 10's own retainers.
When that window had been bared and members of all parties, the public and the international media were able to see what was going on inside the room, they were appalled—and rightly appalled. They were appalled because they saw that the gulf between the Government's public pronouncements and their actions when facing the real world could hardly have been wider.
There was also a certain amount of irony in the fact that, after a period in which there must have been more breaches of the Official Secrets Act than in any similar period in our history, the Secretary of State who resigned was the very Secretary of State who had been instrumental in the prosecution of civil servants when they were accused (one was acquitted) of breaching that same Act. The end of that was the sordid sight which some of us saw a week ago, of a Secretary of State sitting on the Front Bench in another place, next to the Prime Minister, misleading the House, as he
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himself had to admit later the same day, with the knowledge of the Prime Minister, and the Prime Minister sitting silent beside him.
What is the meaning of what we see behind this now clear window? Surely, it is that, when the Government talk in public for public consumption and electoral consumption about their belief in market forces, in rolling back the state and in leaving it to the shareholders, there is a stark contrast between their rhetoric and dogma and the actions and intervention, as they have been seen to intervene, in the activities of great companies in this country.
What this leads us to conclude, referring directly to the words of the Motion, is that the Government have no coherent policy so far as industry is concerned and no agreed policy, as has now become evident, on how they interpret the national interest. This whole sorry and sordid episode in the government of this country, which is by no means at an end as those who have been over the other side this afternoon have witnessed, began from the difficulties of the helicopter company, Westland, in Yeovil.
Let me go back to a few weeks before those difficulties became apparent. At that time the Secretary of State for Foreign and Commonwealth Affairs was saying at the EUREKA meetings in Paris and Hanover that only European co-operation in high technology could preserve the high technology of this country and of other European countries against the pressure exerted by the great weight of the United States and Japan. No doubt he had in mind the computer industry and the number of software houses in this country that had been absorbed by the great American conglomerates on the other side of the Atlantic. That was the declared policy of the Government at that time.
What happened when Westland turned to the Government? As in the original case of the computer companies, the Government turned their back and were not interested in saving the Westland company. Indeed, if the Government had pursued their consistent policy and observed market forces, we know that Westland would have gone into receivership. That would have been the effect of the market forces. But, in the meantime, there comes, first, the proposal from the United States. It is known as the Sikorsky proposal. But anyone who knows what Sikorsky is knows that Sikorsky is just a small dot in the great empire of United Technologies. United Technologies, perhaps significantly, are involved in President Reagan's Star Wars organisation of the future. So this was an interest from one of the great American combines.
Later, a European consortium was set up or was organised, so we had two alternatives. What then happened? First, it is now clear—it has been very clearly established in the other place just this afternoon—that the Secretary of State for Trade and Industry was originally a supporter of the European consortium. That is now documented. He changed his mind. He has a perfect right to do so, but I wonder why. He appears to me to have changed his mind because of some arm-twisting that was clearly related to the sale of the British Aerospace Airbus—the European consortium's airbus—in the United States. He was supported by the Prime Minister. Why? We

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know—and I think noble Lords opposite would agree on this—that the Prime Minister has always been instinctively hostile to Europe, and instinctively sympathetic and friendly to association with the United States. Nevertheless, the Secretary of State changed his mind.
On the other hand, the Secretary of State for Defence, in the same Cabinet made no bones about his open and public support for the European consortium. In the speech which some of us heard him make last week there was a suggestion that one of the main reasons for his support of the European consortium was his fear that, if Europe did not hold to the line that had been laid down by the Secretary of State for Foreign Affairs, Sir Geoffrey Howe, a year ago, this country would lose its high technology capability between now and the end of the century. If that is the main reason, I say that it is an honourable one. He may not have acted at all consistently so far as official secrets are concerned. Nevertheless, if that is his argument—as it appeared to be last week—then I would say that that is a perfectly honourable stand to take.
What happens now? This Government who are pledged to market forces, to rolling back the state, to non-intervention, to allowing industry and business to get on with its own affairs untouched by Government, now start to do—what? They put pressure to bear on one of our great industries, British Aerospace, which only a few months ago they sold from public ownership into private ownership.
Whatever the interpretation of the notorious meeting which took place between the Secretary of State and Sir Raymond Lygo, it was quite clear that the Secretary of State was making his position and that of his department very plain to British Aerospace. We now know that he also did so to GEC. Are these market forces? Is this rolling back the state? Is this keeping the Government out of industrial affairs? No. When it comes to what the Government interpret as their own interest they can intervene much more roughly and brusquely than any Labour Government have ever done. We therefore get this whole sorry story of the public wrangle, of the leaked letters, of the minutes that were not minutes and how and when they were written. Is this the way to run a government and the relations between that government and industry in this country? Then, at the end, the meeting of the Westland shareholders was postponed from Tuesday to Friday. Why was that postponed?—because the Connaught Rooms are not big enough. They will only hold 1,800 people. The meeting was moved to the Albert Hall, which will hold four to five thousand people. How many turn up?-450. When they turn up, are they given the choice between the American and the European alternatives? Are these the circumstances in which the shareholders are to make their decision? They have never been given this choice. They were given one choice only to vote on, with no alternative other than to turn it down. I do not see this as fitting in with the claim of the Government that it must be the shareholders who determine the matter. Surely this is not the way for government to conduct its relations with the organisation and development of industry in this country.
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This Government do not know whether they believe in market forces or in intervention. When they talk about the shareholders they like to think of the shareholders as lots of little people around the country—widows and so on. What we saw last week was the casino economy. It was the kind of British equivalent of a combination of Dynasty and Dallas. Do noble Lords ever go and hear what is said in the public houses in mining villages, in the textile or steel areas on nights when the television has been showing the way blocks of shares are being bought and sold for the purpose only of gaining power for the future over the industry of this country?
Lord Taylor of Gryfe: My Lords, I am sorry to interrupt the noble Lord, Lord Hatch of Lusby, but I understood that there was a certain discipline about timekeeping in a short debate and that those of us who were proposing to speak in this debate were allocated 12 minutes. The noble Lord has spoken for 14 minutes. This may affect subsequent speakers. I do not know who is responsible in this House for these matters, but I raise this as a point of order.
The Earl of Hals bury: My Lords, may I follow what has been said by remarking that, when the noble Lord, Lord Hatch of Lusby, rose to speak, on the 12 minutes apiece allocation of time we had 16 minutes in hand. Is the noble Lord, Lord Hatch of Lusby, going to hog the whole of that 16 minutes for himself, or will he give a fair share of it to the noble Lords, Lord BruceGardyne, Lord Vinson, Lord Taylor of Gryfe, Lord Williams and Lord Gallacher, for winding up?
Lord Hatch of Lusby: My Lords, I am perfectly happy to divide the extra time gained because of the shorter speeches earlier between all the subsequent speakers. In any case those two interventions have now taken an extra minute which could have been used for speeches.
The conclusion of the whole description of the events of the last few weeks which I have made illustrates the stark fact that this Government have neither an agreed policy on national interest nor any industrial policy whatever. The people of this country are being offered neither security nor the prospect of a prosperous economic future.
Two days ago the leader of my party, Mr. Kinnock, made his first contribution to the development of a party policy regarding the relations between Government and industry—the relations between government, shareholders, workers and management. I suggest that that is a coherent policy. I ask the Minister who is to wind up tonight to tell this House what the Government mean by market forces, when they believe in relying on market forces and when they believe in interfering with those market forces. We are entitled to know where the Government stand according to their own words, and their own words in relation to the disastrous events of the past three weeks.
6.49 p.m.
Lord Bruce-Gardyne: My Lords, I hope that the noble Lord who has just sat down, and indeed your Lordships, will forgive me if, after that interesting

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diversion, I revert briefly to the subject of the debate before us this evening.
I should like to join with other noble Lords who have congratulated the noble Lord, Lord Gallacher, on introducing such a remarkably timely subject for our discussion tonight and, if I may say so for my part, for introducing it with comments with which many of us would have found it difficult to find much to disagree.
I have to begin with a confession because I have to admit to being what my noble friend Lord Stockton apparently describes as a devotee of this new doctrine of liberalism. By that I mean that in general, although I think that the markets make very foolish mistakes, they do not make nearly as large mistakes as the politicians. However, I have also always believed that if we are to have an effective open market, effective and coherent policies for mergers and monopolies are not just in contra-distinction to the requirements of an effective open market; they are actually fundamental to it.
I listened with great interest to the historical analysis which the noble Lord, Lord Gallacher, gave us at the beginning of this debate. As he said, it seems that there have been several phases in merger policy. There was a period in the 1960s when biggest was best and we had the Industrial Reorganisation Corporation putting together anything that moved, with somewhat disastrous results. We then went through a phase in the 1970s when small suddenly became beautiful, and references were made to the Monopolies and Mergers Commission on the ground of sheer size. I think that it has to be conceded that some of the judgments which the commission produced struck some of us as being a little weird.
Then in 1981 my right honourable friend the present chairman of the Conservative Party, who was then Secretary of State for Trade and Industry, somewhat switched track, because he suggested that the primary reason for reference to the Monopolies Commission would be the issue of market share resulting from a merger. On the whole that was a change which was much welcomed in the City and extensively welcomed in Fleet Street. One pretty soon saw why—because the floodgates certainly opened; and we now rapidly find that we are living in an environment where we have bids of £1 billion almost once a week. It must be said that the pickings are very remarkable.
The other day I read that in the present interesting contest, to which reference has already been made, between Guinness and Distillers, if Guinness wins its bid for Distillers, the distinguished merchant banking house of Morgan Grenfell, with which the noble Lord, Lord Taylor of Gryfe, is connected, stands to benefit to the tune of £20 million, and if Guinness should not be lucky, the distinguished merchant banking house stands to benefit to the tune of £14 million. Apparently the brokers to Guinness stand to gain £4 million if Guinness is successful and £2 million if it is not. What precisely is being done by all these great people to warrant these spectacular fees I am less than wholly clear.
I must also say—and I agree with some of the other comments that have been made—that in relation to
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these full page advertisements which are doing marvels for the advertising revenues of the City pages, in which I am much interested, and which are badly needed, one sometimes wonders about this business of legal, honest, decent and truthful. Are they really all those things? Sometimes one has had grounds to wonder.
I share the concerns which have been expressed tonight, and I share them for several reasons, some of which have been referred to, one or two of which perhaps have not. In the first place, it seems to me to be indisputable that the emergence of a condition where the management of any public company, however large, knows that it is liable to be the object of a predator concentrates the minds of the board of management on very short-term objectives. The noble Lord, Lord Grimond, said that the shareholders have done pretty well out of the wave of takeovers, and I would not altogether dispute that. However, whether United Kingdom PLC has done pretty well is I think more doubtful.
The fact is that if a large public company today which has £10 million to invest invests it in a new home-grown product with great market potential, it takes that cost directly on the bottom line and the predators are encouraged. If instead it goes out and buys another company with that £10 million, its assets base has expanded and it may reasonably hope to reach a size where the predator cannot swallow it. I am not at all clear that that necessarily produces the best environment in which management can function.
I very much agree with the remarks of my noble friends Lord Ferrers and Lord Mottistone about some of the rather remarkable leverage bids that we have begun to see in this country, following the pattern of the United States. For my part, I would not go so far as they would seem to suggest (particularly my noble friend Lord Mottistone) in effectively barring external bids for British industry. We are no mean slouches at making bids overseas ourselves. Some perhaps are regretted at leisure; but, nevertheless, we do it a good deal.
However, I think that there are genuine grounds for anxiety about the financing of some of those bids. One sometimes wonders whether the leverage bids of the 1980s will not be the equivalent of the sovereign borrowing of the later 1970s and the property markets of the early 1970s. Bankers sometimes seem to find rather weird ways to make a turn in the market place, and I think that that is an aspect which we need to watch closely.
I also agree with what my noble friends Lord Ferrers and Lord Mottistone said about the way in which we do not always face an evenhanded situation here. There have been references to the fact that Allied could not bid for Elders, though Elders could bid for Allied. It is equally true that Allianz could bid for Eagle Star, but Eagle Star could not bid for Allianz. I must suggest that that is hardly a very appropriate area for the Monopolies Commission to become involved in. These are political considerations. I would suggest—and it is the one concrete suggestion that I want to make tonight—that it is rather odd that the Government have a power of override when the commission recommends that a bid should be blocked, but no power of override when the commission recommends that a bid should go

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through. I believe that the override should work both ways because I think that such political considerations as to whether it is appropriate that a German insurance company can bid for a British insurance company but not the other way round are matters essentially for Government consideration.
Finally, I want to make what I suppose I admit is a good deal more sweeping suggestion on the remit of the Monopolies Commission itself. I suggest that we should look carefully at the case for switching the whole onus of proof. At present the prey in a takeover situation has the obligation to demonstrate that his acquisition by the predator would not be in the public interest. I think that we have swung the balance too far in that direction. I believe it would be desirable that we should think hard about the case for switching over and putting the onus of proof on the predator to show that there will be material benefit to the public interest by his acquisition of his prey.
I readily accept that this would be a much more fundamental barrier to many acquisitions, and I readily accept that it might make it easier for some sleepy managements to sleep more peacefully in their beds. However, I have a nasty suspicion—and I detect that it is widely shared round your Lordships' House tonight—that if we go on in the way that we are going with the cumulative spread of bigger and bigger bids, we are liable to find that it might end in tears.
6.59 p.m.
Lord Vinson: My Lords, we are indeed grateful to the noble Lord, Lord Gallacher, for introducing this Motion, because the structure of industry affects the lives of every one of us. I have a particular interest in that for a number of years I have been both chairman and president of the Industrial Participation Association, a body which for the past 100 years has been striving to create a sense of common purpose at work. I am deeply perturbed by the current wave of merger mania, because I think it does nothing in the long run for industrial relations and precious little for industry.
There is an argument which says that we should leave everything to free markets, and for most of my life I have been a dedicated marketeer. But markets need a framework, and they need regulation. Indeed, there is no shortage of that both through company law and the application of patents, and a dozen other ways. I am not suggesting tonight that any one of us in this debate partly on monopolies has a monopoly of wisdom, but I feel that the law desperately needs to be strengthened to stop what is happening at the moment, which is personal megalgmania masquerading as corporate efficiency.
I do not think that this is just a legal question. It is a deeply philosophical question. It is a question about our free society. I happen to believe that the basis of our free society in the Western world is diffused economic power, disseminated economic power giving multiple patronage and the maximum sources of initiative, inventiveness and enterprise. If we as a society, in the name of leaving things free to the market, concentrate that power quite unnecessarily, we do so to our long-term peril.
I am not suggesting that all takeovers are bad. Neither are all takeovers good. But the record of
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massive conglomerate amalgamation is extremely poor. As one dinosaur gorges on another, eventually there is nothing left to gorge on and even dinosaurs die off finally; and we are seeing plenty of examples of that. We see too; as has been well mentioned tonight, that the whole business of business is turned upside down. We see short-term profit maximisation at the expense of long-term product development, and it is ultimately on product development that we all depend.
What is the solution? The law should be framed so that there is an automatic presumption against size and the aggregation of power. It is a happy coincidence to follow the noble Lord, Lord Bruce-Gardyne, and I wholly support his suggestion that there should be automatic referral of bids over a certain size, and the onus of proof that an amalgamation would be desirable should be put on the bidder. Noble Lords may have noticed that in this last fortnight Canada has begun to introduce a new trust law which will automatically refer all bids over £250 million. Others in other countries are thinking along the same lines.
This is just a brief contribution to say that in our society we desperately need to spread ownership to maintain a free society. We must introduce legislation to prevent the unnecessary aggregation of power. I hope that the Government will bear in mind the great unanimity that there appears to be in this Chamber tonight that something needs to be done.
7.3 p.m.
Lord Taylor of Gryfe: My Lords, I thank the noble Lord, Lord Bruce-Gardyne, for his kindly references to the distinguished merchant bank with which I am associated. May I assure him and the House that I am not speaking on behalf of that bank, which is heavily engaged in a number of merger activities at the moment? Neither do I propose to explain, or justify, the fees that have been quoted. This can be done very well, but perhaps not in this forum.
Perhaps my experience in this field may contribute something to the subject which was so well introduced by the noble Lord, Lord Gallacher. We are living in a period of feverish takeover activity, and it is right that we should sit back and assess the impact of all these mergers and acquisitions on the structure of our economy, their effect on consumers, and their impact on employees. Perhaps I may say from these Benches that we are committed to an effective competition policy. We are opposed to mergers for mergers' sake, or for greed, or for aggrandisement, but we support those mergers which contribute to increased efficiency and innovation. We believe that monopolies are bad, whether they are state monopolies promoted by the Labour Party or private monopolies resulting from the privatisation exercises of the present Government as seen in the examples of Telecom and gas.
Having stated these objectives, we now discuss the appropriate machinery for achieving this kind of policy. Like the noble Lord, Lord Bruce-Gardyne, and the noble Lord, Lord Gallacher, I too dipped into the experience of the 1960s in this regard. Unfortunately, studies of the impact of mergers have not been brought up to date. The latest document I could find was Command Paper 7198, dated 1978. It revealed the interesting situation that while the share of the 100

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large manufacturing enterprises in the United Kingdom net output of the total manufacturing business in the United Kingdom was 27 per cent. in 1953, in 1972 it had gone to 41 per cent. and represented 36 per cent. of the total employment in manufacturing industry.
The concentration in the manufacturing industry was much greater in the United Kingdom than in Japan and in Germany, but it did not have the results anticipated. The great merger mania of the time did not result in a greater proportion of our domestic market being captured by the newly-merged companies. Indeed, the opposite took place. The return on net assets following these exercises was not any greater than before. Indeed, more than 50 per cent. of all the newly-merged companies showed a reduced return on net assets compared with before.
This would suggest that there is no automatic advantage from greater mergers. But we are living in different circumstances today, and I am not sure that the experience of the 1960s—the great period of Jim Slater, the hero of free enterprise; the classic asset stripper—is the same kind of situation as exists at the present time. I believe that the pressure of possible takeover is a continual stimulus to performance and to management.
If your company is lazy, if your company does not perform well, it immediately becomes vulnerable. May I quote one or two cases which come readily to mind. The Dixons' takeover of Currys results have just been published; the results of Woolworth, which has been resurrected as a result of a takeover situation, and the BTR takeover of Dunlop are evidences of the injection of new management, new direction and rationalisation which have improved the performance of these companies to the advantage, I suspect, of consumers and shareholders.
It is interesting that the debate tonight was introduced by the noble Lord, Lord Gallacher, whose association all his life has been with the Co-operative movement. I am sure that the noble Lord, Lord Gallacher, would be the first to say that the mergers which have taken place in that organisation have been necessary, and have been compelled upon the Cooperative movement by the economic circumstances of the time. We are living in an environment where there is an inevitable need to create bigger organisations in some industries. There is a pressure to achieve greater efficiency. Some might say, "What about the employees in the event of these mergers?" I can only say that if any industry is suffering from bad management and overmanning the future of the employees is less secure in these situations than when they are taken over by efficient and well-organised management.
It is also suggested that the vulnerability of some companies inhibits long-term investment because the evidences of long-term investment are not immediately reflected in the balance sheet. I would say to these companies if they are afraid of this that they have a greater responsibility to communicate their plans and their strategy to the shareholders. American companies are much more responsible in this regard. They tell shareholders what is happening.
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We cannot argue simply that mergers as such are bad. Many mergers have great advantages. It can be a different situation from the asset-stripping of the 1960s. Let us be clear about the advantages of the United Kingdom competition policy. It is not a bad system, although some helpful criticisms have been offered in this debate which might improve it. It has flexibility. The phrase "coherent policy" is introduced in the Motion before us. "Coherent" suggests consistency in policy. However, all of these takeovers and mergers are entirely different. They are in different industries; they are made up of different groups with different interests. It would be a retrograde step to try to impose some kind of consistent uniform policy on all these various exercises.
The British policy has evolved over the years since 1948 and it has been a bipartisan policy. Apart from the fact that the questions arising out of references to the Monopolies and Mergers Commission arrive ultimately on the desk of the Minister, the Office of Fair Trading and the Monopolies and Mergers Commission have lifted this debate out of politics and have examined these matters quite objectively. There is flexibility in the British system. It has been extended over the years not only to bring in manufactured products but to include services and the professions.
This is good. It can cope with changing circumstances: for example, the impact of international competition. There is a proposal in the United States that United States companies should be exempt from their legislation if they are subject to foreign competition. But our system in the United Kingdom takes care of such changing circumstances and the international situation in which we operate. It can also deal with public interest issues such as the implications of the leverage buyout of the Elders Allied-Lyons bid, which has been referred to the Monopolies and Mergers Commission. These developments are worrying the Americans today because of the extent of the leverage buyouts in their country.
There are substantial advantages in the British system. There may be some criticisms about the inconsistency in the decisions of the Monopolies and Mergers Commission. This is inevitable, because these matters are widely debated and dressed up by the financial journalists. They become matters of winners and losers and inevitable public comment. However, as it exists the system works and the Monopolies and Mergers Commission and its procedures are reasonably well understood. However, it makes some decisions which baffle me. I could not recognise any monopoly situation in the recent bid for Sothebys, for example, and it is extremely difficult sometimes to understand decisions of that type where no monopoly arises.
When we are considering alternatives to the British system, I refer your Lordships to an article in the Financial Times this week by Sir Gordon White, who has some experience in handling these matters on behalf of the Hanson Trust in the United States. He said that takeover patterns in the United States are a form of street fighting; private detectives and smear campaigns are all part of the game. Private lives, business ethics, litigation lasting five months are not necessarily in the interests of shareholders. They have

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devised a new language with scorched-earth policies; poison pills and golden parachutes are all part of the game. A United States company can dismember itself or gear itself up to the eyeballs in debt without consulting the shareholders. In Britain, the moment a tender is out the clock stops. The only method of fighting someone off is to argue on the basis of the value of the company.
Sir Gordon, with his experience in the United States on a recent takeover, acting on behalf of the Hanson group, described how he had to present 3,000 pages of deposition, 2,500 pages of courtroom testimony and 140 exhibits. I do not believe that we should get too legalistic in the application of our monopolies and mergers policy; otherwise we may easily find outselves in the kind of difficulties Sir Gordon has described. This has been a useful debate. Helpful suggestions have been made. I look forward to the Minister's reply.
7.17 p.m.
Lord Williams of Elvel: My Lords, I, too, am particularly grateful to my noble friend Lord Gallacher for tabling this Motion for short debate. It has been welcome to see how on all sides of the House he has had support for some of his propositions and, indeed, what degree of unanimity there is on all sides of the House about what needs to be done. Debates on competition policy are few and far between, partly because the subject matter tends to be rather dry and technical, and partly because the issues of controversy that exist do not necessarily cause great political collisions and therefore are not an object of political controversy, but they are, none the less, controversial.
As many noble Lords have said, we are in a period when controversy is very much in vogue because we are, as we are told, in the days of the mega-bid. Indeed, I think it is because we have had this tremendous wave of mergers and bids in the last few months that it is apposite that this Motion has come before us today. It is opportune to reflect, as my noble friend Lord Gallacher has, on whether the institutions and the legislation that we have and the conduct of those institutions are adequate to keep pace with the fast development in the market. For this reason I suppose I must welcome the announcement from the Government that they are to make a review of competition policy this year. I am afraid it is a rather grudging welcome and I hope the Minister will not object to this, as the Government have been singularly dilatory in acting on the previous review, to which I am glad to hear the noble Lord, Lord Taylor of Gryfe, drew attention. That review was conducted in 1978 by a committee of officials under the chairmanship of Mr. Hans Liesner, the results of which were set out in two Green Papers: one in 1978, on monopolies and mergers policy, and the second in 1979, on restrictive practices policy.
The review conducted by the Liesner Committee was extensive and extremely thorough. A number of recommendations were made. These were supported by detailed argument and analysis; yet apart from the Competition Act 1980, which, the noble Lord will forgive me, was a rather half-hearted measure and dealt only with a small part of the problem, and apart from a few bland ministerial statements about competition policy, nothing much has happened
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except—this is an important exception to which I shall return—the privatisation of one major natural monopoly, with another on its way.
I am not aware that the Liesner analysis, to which the noble Lord, Lord Taylor, referred, has radically changed anything in any manner. No new evidence has emerged, so far as I am aware, to invalidate the conclusions that that committee came to. For instance, there is no new evidence to invalidate the conclusion that at least half the mergers by large, quoted companies are unprofitable; that the main reason for merger—and here I refer to a remark by the noble Lord, Lord Bruce-Gardyne—was to increase market share; that the defence of an existing position was the second main reason, and in the minds of managers, at any rate—and I quote from the Green Paper—
"Consideration of market power rather than economies of scale at the level of the firm were the main motive for a merger. The evidence"—
said the Liesner Committee—
"is more consistent with the assumption of growth maximisation than profit maximisation".
I think that this is a point which the noble Lord, Lord Vinson, made very convincingly when he spoke.
Indeed, if anything, these conclusions have been strengthened by the current merger wave. The noble Lord, Lord Grimond, mentioned the Distillers/Guinness merger. Was it deep conviction that led the Distillers' board suddenly to welcome a merger approach from Guinness; or is it that they did not fancy Mr. Gulliver? Was the proposed merger between the Imperial Group and United Biscuits the result of a rationally-conducted, economic and industrial exercise; or was it just cobbled together because both companies felt that they were vulnerable and they rather liked each other's conversation at lunch?
This analysis has not changed; nothing has changed. The Liesner analysis has not changed, the policy has not changed. Now it is regarded as something of a lottery whether there is a reference to the Monopolies and Mergers Commission or not. I think the market is confused, industry is confused, the City is confused. It really is time that we moved on; and for that reason I gave the grudging welcome that I did to the Government's review.
We in the Labour Party, in fact, see no fundamental reason for a review at all. On the contrary, we see every merit in acting on the recommendations of the Liesner Committee and then allowing a period of time to elapse for a further review of the new arrangements when they are put in place. Perhaps I may take up some of your Lordships' time to set out my party's current view of the direction of policy that we should be taking. I will deal with monopolies and mergers first and then turn to anti-competitive practices; and finally return, if I may, to the matter of competition institutions and, more particularly, the recent and current creations.
Our point of departure is the Green Paper of 1978. There is one suggestion that we should like to see put into effect immediately. At present, the Director-General of Fair Trading has the statutory duty to find out about all mergers that fall within his remit. This works well in the case of companies making a bid on

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the open market because they normally make their bids conditional upon there being no reference to the Monopolies and Mergers Commission. In the case of unlisted companies, it does not work so well. We should like to see introduced a provision for the pre-notification of mergers in the category in which the director-general is concerned. The Hart-Scott-Rodino legislation in the United States would be a good model to study. In our case, the director-general would be notified, would have a period of time—let us say, 30 days—to decide whether to recommend a reference to the Secretary of State; and the Secretary of State in the same period of time would make his decision about whether there would be a reference or not.
This procedure would not only help companies proposing mergers since at the moment there is no time limit on the director-general; but it would put a time limit on the reference procedure. It would make sure that no private company slips through the net, as is possible at the moment; and, above all, it would provide a very clear cooling-off period of 30 days during which the two parties concerned would know they were blocked and could think again about whether they really wanted to do the deal in the first place.
This period of 30 days which a statutory pre-notification would provide is all the more important when we come to the next proposal that I should like implemented. We follow the Liesner Committee in shifting from the present policy—the policy which noble Lords have summed up, quite rightly, as being the onus of proof on the authorities to show that a particular merger is not in the public interest and which, in fact, tends to operate in favour of mergers rather than against them—to a neutral stance as recommended by the Liesner Committee. We would not like to go as far as the noble Lords, Lord BruceGardyne and Lord Vinson, who, I think, both would like to see the onus of proof placed fairly and squarely on the merger proposal, which is the applicant company.
We believe that it would be perfectly possible, within the present institutional framework, to adopt a neutral policy by means, first of all, of a ministerial statement setting out to the director-general and the Mergers and Monopolies Commission that that is what we feel; but, secondly, and probably more importantly, by amendment of Section 84 of the Fair Trading Act 1973 to take into account—and I use the Liesner Committee's words—
"the desirability of minimising the detriments of reduced competition and increased concentration".
In one respect, however, we should like to go further than the Liesner Committee and identify three categories of merger which would provoke an automatic reference to the commission and on which guidelines issued to the commission would state that the onus of proof would be firmly on the company proposing the merger. They would have to persuade the commission that after all the proposed merger was in the public interest. Unless the company could persuade the commission of this, then the commission would take the view, and recommend so to the Secretary of State, that the merger should not take place.
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The three categories that I have in mind are these. First, a merger where there is a significant defence interest. I do not need to refer to the speech of my noble friend Lord Hatch of Lusby when I can say that this is a rather topical point at the moment and it seems to us essential that defence interests should have special treatment. Secondly—and I come to what the noble Earl, Lord Ferrers, has said, as also the noble Lord, Lord Mottistone, and the noble Earl, Lord Halsbury, who drew our attention to it, and, too, the noble Lord, Lord Bruce-Gardyne—I refer to mergers constructed in ways which clearly make them largely financial transactions rather than proper commercial or industrial transactions. Clearly, there is a definitional problem here but, basically, I think we are getting at the point to which the noble Earl, Lord Ferrers, referred, that, with purely financial transactions of this nature, we really ought to have a presumption against them that they are against the public interest.
And, thirdly, since it is going to be the main policy of the Labour Party to achieve a substantial reduction in unemployment, we would like to oppose mergers whose likely outcome would be a significant reduction in employment. This is going to be extremely important, and I come back to what my noble friend Lord Gallacher said about a coherent policy which includes the workers.
I accept that there will be definitional problems in setting up these categories which have to be solved eventually. The Director-General of Fair Trading will have to be given clear guidelines; for it will be he who will take a view on whether a proposed merger falls into one or more of these categories. But I am not going to tackle those definitional problems now.
Our third proposal on monopolies and merger policy again goes further than the 1978 Green Paper. It concerns the follow-up procedures when a merger is allowed through. In our view, the commission should be allowed to recommend, and the Secretary of State to impose, a reporting procedure even when a merged company is allowed through and there is no blockage from the Secretary of State. Even under those circumstances, the commission should be allowed to recommend a reporting procedure by which, from time to time and as appropriate, the newly-merged company will report to the Monopolies and Mergers Commission and describe what has happened since the merger.
Lord Bruce-Gardyne: My Lords, I apologise for interrupting the noble Lord. Surely, in fact, the Monopolies Commission has the power to do precisely that, and has done it on several occasions in recent years; but it cannot be said that it has worked very successfully.
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord for his intervention. It is true that the Monopolies and Mergers Commission can recommend to the Secretary of State and the Secretary of State can make an order on companies where the Monopolies and Mergers Commission find something wrong. It is extremely rare in my experience: in fact I cannot cite any cases when the Monopolies and Mergers Commission have cleared a merger and, even

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so, the Secretary of State makes an order for a follow-up reporting procedure. I may be wrong and I would certainly welcome any advice, but I think I am right in saying that once a merger is cleared it is cleared for good.
If the Monopolies and Mergers Commission have these powers they can do something which, I am bound to say—If I may digress for a moment—that when I was in the Price Commission I longed to do, because this really comes back to what the noble Lord was saying. When Tate and Lyle took over Manbré and Garton, in a very famous merger in the 1970s, they put in their offer document that, as a result of the merger, there would be a decrease in unit costs, general benefits all round, no price increase, increases in profits, and so on. Much to our astonishment, six months later what should happen but a pre-notification of a sugar price increase from Tate and Lyle.
What I badly wanted to do, as chairman of the Price Commission which received this pre-notification, was to look at the framework of the merger that Tate and Lyle had put before the Government—because it was not referred to the Monopolies and Mergers Commission—and look at the figures the chairman of the company had put in the offer document to shareholders. I wanted to ask: were these figures genuine? If they were, were they right? If they were right, clearly there should be no price increase. If they were wrong, what was the explanation? That was something, unfortunately, we failed to do because it came very early in our career and we had not really set ourselves up to take this particular form of action.
It has always been in my mind that when a company makes a submission to the Monopolies and Mergers Commission it does so as a "still photograph" at a particular point in time. All its objectives may be perfectly praiseworthy and all its figures perfectly proper. The proof of the pudding comes in the eating; and it is only six, nine, 12, 18 months later that you see whether the merger has been a success or whether it has been one of the 50 per cent. which has been rather a failure—or indeed, whether a company has moved its headquarters down from Scotland to London, in response to the noble Lord, Lord Grimond's point.
These three proposals, in our view, would make for a sensible and coherent merger policy—one which catered for proper commercial and industrial reconstruction, and yet was much tougher on the kind of mid-winter madness which seems to grip the City from time to time, frequently (as perhaps at present) in the closing stages of a bull market. Nevertheless, they do not form a complete policy because there will always he uncompetitive practices by companies who have been able to establish a dominating position in the market.
I should like now to turn to these and tell your Lordships as briefly as I can what we have in mind here. Again, our starting point is the Liesner Committee, in this case the 1979 Green Paper on restrictive practices. Their recommendation was that power should be taken to prohibit certain practices. They mention tie-in sales and full-line forcing—rather complicated expressions. But essentially they were saying that certain uncompetitive practices are capable of definition legally, like resale price
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maintenance, and can be legislated against. We believe that power should be taken by the Government and that the practices, in so far as they can be defined in what makes legal sense, should be defined by Secretary-of-State order rather than by recourse to primary legislation each time, as in the case of the resale price maintenance legislation.
However, again we would go rather further than the 1979 Green Paper, and we would wish to see provision made for standing references to the Monopolies and Mergers Commission on certain prima facie uncompetitive practices which cannot be defined precisely in terms of legislation but can be properly interpreted by the courts, and where there are certain grey areas which are uncompetitive prima facie, and need looking at on a continuing basis. The particular type of practice I have in mind, which has caused many problems over the years and has been studied by all sorts of bodies such as the Food Manufacturers' Federation, the Monopolies and Mergers Commission and so on, is the question of discounts forced by big retailers on food manufacturers. That was dealt with by the Robinson-Patman Act in the United States.
Legislation in this case is not a sensible way of dealing with it, in my view. We want to have a procedure for the Monopolies and Mergers Commission to continue monitoring these kinds of practices if we are going to be able to say at any given time that the balance in this particular grey area has moved against one particular type of business and in favour of a monopolistic enterprise.
As a corollary of that, we would say we think that the Monopolies and Mergers Commission should use the powers that it has to impose price pre-notification on monopolistic and oligopolistic suppliers where a reference—either a one-off or a standing reference such as I have described—has shown up a potential or actual case of monopoly pricing.
This brings me to the question of institutions. The question was raised by the noble Lord, Lord Campbell of Alloway, not very long ago at Question Time, and the thrust of his Question was really quite simple: is there not a profusion of institutions in this field of competition? We had the Office of Fair Trading, the Monopolies and Mergers Commission, the Restrictive Practices Court, the High Court (in certain cases), the Treaty of Rome and GD4 in the European Commission and the European Court. Now we have Oftel; we are about to get Ofgas and presumably Ofwater (if the water authorities are privatised)—and also Ofair, in the form of the Civil Aviation Authority (if the British Airports Authority is privatised as well). Who knows?—in the future we might be getting Ofelectricity and Ofanything else that the Government decide to privatise.
I was given to understand, when the Conservatives came to power in 1979, that their ambition was to cut down on the number of institutions—"quangos" they were called at the time. As I remember, they were very keen on abolishing them and in fact an honourable gentleman in another place kept a score of quangos abolished, rather in the same way as certain noble Lords opposite no doubt keep a tally of the birds they shoot in an autumn afternoon—another brace gone here; another one gone there.

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We now seem to have a complete reversal of this policy and quangos of this kind are being created every time there is a privatised monopoly: here, newly-forged is a new competition institution. It will astonish your Lordships to know—and I have put down a Question for Written Answer to confirm the figures—that Oftel which started off with 50 people, has now grown to 80 people and is about to grow to 100 people. If you have 100 people in Oftel, 100 people in Ofgas and in Ofwater and so on, you really are creating a new model army which we could do without.
So the proper object of a review, if that is what the Government are contemplating, is to look at these institutions and ask: is there not really a case for merging these institutions into the net we have got? There are, after all, three quite separate types of functions. There is the granting of licences, which is the proper function of Government; there is the question of trading practices, which is a proper function of the Director-General of Fair Trading; there is the question of pricing, which is the proper function of the Monopolies and Mergers Commission.
I have taken up far too much of your Lordships' time and I must come to a close, but there are two general points that I would like to make. The Government have decided upon a review. So be it. We will return to what it says and react accordingly when the review is out. What I have said today is based, and can only be based, on the position that we have at the moment. Nevertheless, we on our side maintain as a matter of principle that we need a tougher policy on monopolies and mergers. To illustrate this, I cannot do better than to quote from the public interest provisions of the Monopolies and Restrictive Practices (Inquiry and Control) Act 1948, which was introduced and put on the statute book by a Labour Government. The Act instructs the commission that,
"all matters which appear in the particular circumstances to be relevant shall be taken into account and, amongst other things, regard shall be had to the need, consistently with the general economic position of the United Kingdom, to achieve:

(a) the production, treatment and distribution by the most efficient and economical means of goods of such types and qualities, and in such volume and such prices as will best meet the requirements of home and overseas markets;

(b) the organisation of industry and trade in such a way that their efficiency is progressively increased and new enterprise is encouraged;

(c) the fullest use and best distribution of men, materials and industrial capacity in the United Kingdom; and

(d) the development of technical improvements and the expansion of existing markets and the opening up of new markets."

That was our position in 1948, and that is our position today.
7.40 p.m.
Lord Brabazon of Tara: My Lords, we are all grateful to the noble Lord, Lord Gallacher, for having raised this important matter in debate today, and I am most grateful to be given the opportunity to discuss a subject which is so central to the Government's policies—that of competition. At the basis of our policy on monopolies and mergers is the conviction that free competition in the market place is the most effective way to keep prices down, to satisfy the consumer and to promote efficiency in production and
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distribution. We know, however, that the market does not always function perfectly. Distortions may be created when extensive market power is concentrated in the hands of a small number of companies. We have essentially two weapons at our disposal in attacking these distortions.
First, we can act—where they exist—against the monopolistic practices of companies already in a dominant position in the market, and against the anticompetitive practices of companies who seek to reduce or eliminate competition, and thereby to dominate the market. Our legal weapons in this sphere are the monopoly provisions of the Fair Trading Act 1973, and the anti-competitive practices provisions of the Competition Act 1980. Both of these provide both the scope for an in-depth investigation of such practices by the Monopolies and Mergers Commission and the basis for action to remedy such practices if they are found to operate against the public interest.
Secondly, we can intervene—in cases of particular economic significance—to control the structure or size of firms which threaten to dominate a market or markets through acquisition. Our weapon here is the mergers provisions of the Fair Trading Act. I should like to use this opportunity to discuss this aspect of policy more thoroughly. In particular, I wish to consider suggestions that our policy on mergers has no consistency or coherence, or that it is ill-equipped to deal with recent developments in the market. Such allegations have no basis in fact.
I should like to begin by reminding this House that a review of policy towards mergers was conducted by the Department of Trade and Industry as recently as 1983–84. It resulted in the Statement by my right honourable friend, the then Secretary of State for Trade and Industry on mergers policy in July 1984. I should like to remind noble Lords of what my right honourable friend said on that occasion. He said:
"I regard mergers policy as an important part of the Government's general policy of promoting competition within the economy in the interests of the customer and of efficiency and hence of growth and jobs. Accordingly my policy has been and will continue to be to make references [to the Monopolies and Mergers Commission] primarily on competition grounds. In evaluating the competitive situation in individual cases I shall have regard to the international context: to the extent of competition in the home market from non-United Kingdom sources, and to the competitive position of United Kingdom companies in overseas markets."—[Official Report, Commons, 5/7/84; col 213]
I hope to illustrate in what I have to say today that both the policy and the institutional framework within which Government decisions about mergers are taken are as well-adapted and relevant to the current situation as they were when my right honourable friend the then Secretary of State made that statement some 18 months ago.
We are undoubtedly experiencing a peak of merger activity at the present time. Some have even gone so far as to describe the country as in the throes of an attack of "merger mania". Cries such as this are easily aroused. However, I would be the last to deny that the increase in merger activity since the middle of 1983 has been substantial. Whereas the total assets of companies acquired in 1983 were some £2.3 billion, this had increased to £5.5 billion in 1984 and to £6.1 billion in the first three quarters of 1985 alone. A feature of this particular wave of mergers is the size of

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some of the bids involved—the so-called "megamergers"—which would affect the deployment of millions of pounds' worth of assets and have an impact on large numbers of employees. Acquisitions valued at over £25 million accounted for 73 per cent. of total expenditure on acquisitions in 1984. Another feature which some commentators have addressed is the advent—which has been particularly marked in the USA—of the so-called "leveraged takeover", or the takeover financed largely by debt, to which the noble Lord, Lord Gallacher, referred as David taking over Goliath. I shall return to this a little later.
We must, however, keep this activity in perspective. History has shown that merger activity tends to be cyclical. There was a mergers boom as recently as 1972—which, incidentally, has not yet been matched by the current peak, either in terms of the number of takeovers, or the volume of assets which have changed hands. There were over twice as many company takeovers in 1972 as in 1984; and the volume of assets of companies acquired in 1972 was almost double that of companies acquired in 1984 (using constant prices). And there are undoubtedly some specific once-and-for-all features of the present situation. The statistics include the many current acquisitions of stakes in our brokers, jobbers and financial services institutions in preparation for the Big Bang in the City. Such acquisitions—given the large asset base of many of these institutions—tend to inflate the figures disproportionately.
It is our belief that—despite the heightened level of merger activity which we are undoubtedly experiencing currently—our present policy provides a framework which is flexible and capable of adaptation to all the different types of case which may arise. At the same time, it provides a degree of predictability and consistency in the treatment of mergers which is—I believe—welcomed both by the City and industry in general.
Perhaps I should not set the policy in its institutional and legislative context. Our procedures for examining mergers operate with a light touch. My right honourable friend's intention—in announcing in July, 1984, that the assets test for mergers qualifying for investigation under the Fair Trading Act 1973 was being raised to £30 million—was to ensure that only mergers of considerable economic significance came within the scope of the legislation. In 1984, only five of the 259 mergers qualifying for investigation under the assets and market share tests were preferred to the Monopolies and Mergers Commission for further investigation. In 1985, the figure was five out of 191. Moreover, it is only in the case of an adverse public interest finding by the MMC that Ministers are able to take steps to prevent or impose conditions on a merger; or for that matter to break a monopoly, where that is the subject of the reference.
Another aspect of our arrangements in this country which confers particular strength and adaptability is the three-tier procedure, involving two organisations independent of government: the Office of Fair Training and the Monopolies and Mergers Commission. The Director General of Fair Trading has a statutory duty to keep himself informed about merger situations and to advise the Secretary of State
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on whether a reference to the MMC would be appropriate in a particular case. But the decision on a merger reference is made by the Secretary of State and not by the director general. In the case of a monopoly reference of course the director general is also empowered to make reference and it is normally he who makes them. In the case of merger references, it is the practice to state publicly if the Secretary of State goes against the director general's advice. Finally, there is the involvement of the MMC in those cases which are considered to raise potential public interest issues. The MMC is a body with a wide spectrum of skills and experience: and in assessing the input of a merger proposal on the public interest, they have a far-ranging statutory duty to take into account all matters which they consider to be relevant in the circumstances.
Let us turn now from the procedures and institutions to the way these operate in practice. In July, 1984, my right honourable friend the then Secretary of State for Trade and Industry announced that references to the MMC would continue to be made primarily on grounds of competition. This policy has been endorsed and restated recently by my honourable friend the Parliamentary Under-Secretary of State for Corporate and Consumer Affairs in his speech on 29th October last to the conference on International Mergers and Acquisitions.
As its basis is our belief that market forces and competition are generally the most efficient means of allocating resources, stimulating growth in the economy and hence creating viable jobs. We believe that decisions about the future of a commercial enterprise are in general best taken by the shareholders themselves. And we must remember that by no means every takeover bid succeeds, although in some instances the mere threat of a takeover can be a stimulus to better performance by the target company, a point which several noble Lords have mentioned. What we do not believe is that mergers policy should second guess the market or protect target companies against unwanted bids.
However, in stating that reference decisions would be made primarily on competition grounds, my right honourable friend did not say that factors others than competition would never be taken as grounds for a reference. We look at each case on its merits and from all angles. In advising the Secretary of State, the director general considers all the relevant aspects of a bid, all the arguments put forward by the parties to a merger proposal. And—as I remarked earlier—the MMC is not merely able, but is required to take account of all the relevant issues in assessing the public interest impact of a merger. A recent example of a case where my right honourable friend the Secretary of State for Trade and Industry decided to make a reference on grounds other than those of competition is the Elders IXL bid for Allied-Lyons, where he announced that the financing of the bid raised issues which deserved further investigation by the commission. And there will doubtless be other cases, with their own particular features, which will be referred to the MMC in the future. We believe that each case must be examined on its merits in the light of the specific circumstances.
Lord Williams of Elvel: My Lords, I am sorry to interrupt the noble Lord. Will he kindly tell us whether the director general looked at the Westland case, which after all fell within his remit as a partial merger? Did he make any recommendations to the Secretary of State on that subject? If so, what did the Secretary of State do with those recommendations?
Lord Brabazon of Tara: Certainly, my Lords. I have a note on the Westland situation and I shall reply to the noble Lord before I come to the end of my speech.
Any attempt to impose rigid general rules would quickly run up against a special case which the rules did not fit. The flexibility of our policy is one of its greatest strengths. I think the noble Lord, Lord Taylor of Gryfe, supported us on that.
I can indeed sympathise with my noble friend Lord Ferrers and other noble Lords with their concern about the appearance of so-called leveraged takeovers financed largely by debt. These are not as yet a common feature of the scene here in the United Kingdom but I am aware that the new financing devices used in the United States have been hitting the headlines recently. The appearance of such new financing techniques does not in our view undermine the validity of our procedures for examining mergers. Because they are considered by the Office of Fair Trading and by my right honourable friend the Secretary of State for Trade and Industry on a case by case basis, this allows the specific features of a bid to be fully evaluated in assessing whether it should be referred to the Monopolies and Mergers Commission for further investigation.
The MMC can look at all aspects of a merger referred to it which they consider to be relevant, including reciprocal arrangements for takeover bids in the bidder's country of origin if they consider these to be relevant. It will of course be for the MMC to consider whether reciprocity is a relevant factor in the Elders bid for Allied-Lyons. That is so far as I can go on that subject at this stage.
In our view therefore the Government's policy of making references primarily on competition grounds has admirably stood the test of experience. We are conscious that merger activity is at a high level: indeed, this was already the case when my right honourable friend's 1984 Statement was made. The approach we have adopted—and will continue to adopt—has regard to industry's wish for stability and predictability, while at the same time being both practical and flexible.
Noble Lords have raised a number of specific points. The noble Earl, Lord Halsbury, asked me whether he could give evidence to the MMC in the case of the GEC/Plessey merger. I am sure that the commission would be happy to receive any representations which the noble Earl might wish to make to them.
The noble Lord, Lord Williams of Elvel, has just asked me about the position regarding Westland minority shareholdings. It has been announced that my right honourable friend the Secretary of State for Trade and Industry has decided, in accordance with the recommendations of the Director General of Fair Trading, that neither the proposed acquisition of shares by UTC Fiat recommended by the board of Westland nor the consortium proposals by five British,
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French, Italian and German firms would be referred to the Monopolies and Mergers Commission under the provisions of the fair trading Act. If any other proposals were to emerge these would be considered in the normal way by the Director General of Fair Trading who would subsequently advise the Secretary of State for Trade and Industry on whether a reference to the MMC was appropriate.
In conclusion, the noble Lord, Lord Gallacher, and other noble Lords have expressed interest in the review of competition policy which has been announced by my honourable friend the Parliamentary Under-Secretary of State for Corporate and Consumer Affairs. Final decisions have not yet been made on the scope of the review which is to begin this year, but I can assure noble Lords that my right honourable friend will take careful note of today's most interesting and useful debate when deciding on the scope of the review. I also listened carefully to the speech of the noble Lord, Lord Williams of Elvel, about Labour Party policy in this matter. The Government have been accused twice in recent months of reacting too hastily to statements such as that, and I do not intend to fall into that trap this evening. However, I can assure the noble Lord that my colleagues will read what he has said with great interest.
Mergers policy, as an important part of the Government's general policy of promoting competition within the economy, will naturally be considered in the context of this review. But we do not consider that the current high level of merger activity alters radically the issues which the review will need to consider. Overall, we believe that the policy towards references which we have been pursuing and will continue to pursue has stood up very well to the demands which have been placed upon it.
7.57 p.m.
Lord Gallacher: My Lords, I should like first of all to thank all those speakers who have taken part in what I think has been a useful debate and one which I hope we shall be able to study in Hansard so that some of the more detailed points can be absorbed at leisure. I am particularly grateful to my noble friend Lord Williams of Elvel for putting my "rude mechanicals" in the framework of Labour Party policy and Labour Party aspirations. I am sure that he will be as disappointed as I am that the Minister rejected his blandishments to take them over here and now. Nevertheless, we had an assurance from the Minister that in the review of competition policy which is now in hand consideration will be given to some of the submissions made by us and other speakers in the debate.
I should also like to say to the Minister that his case was factually explicit and courteously delivered. In so far as he sought to console me, my only reflection was that, if there is so much coherence attached to the ministerial statements of 1983–84, why indeed was there so much concern behind him in the debate this evening? Having said that, I beg leave to withdraw the Motion in order that we should not be detained from the Unstarred Question on telephone bingo.
Motion for Papers, by leave, withdrawn.

Telephone Bingo
7.59 p.m.
Lord Allen of Abbeydale Lord Allen of Abbeydale rose to ask Her Majesty's Government whether they have received the advice of the Gaming Board on "telephone bingo" and whether they are now prepared to express a view about the desirability of this experiment by British Telecom.
The noble Lord said: My Lords, lurking behind this somewhat deceptively simple Question are some troublesome social issues. I make no apology for asking your Lordships to spend just a little time considering them. I am most grateful to the other noble Lords who have agreed to take part in this short discussion. Perhaps I can say a special word of welcome to the noble Viscount, Lord Davidson, on this exploration of one of the multifarious functions of the Home Office.
Licensed bingo has been losing in attendances for some years for many reasons, including the risk of being mugged on the way home and the disappearance of public transport. Even so there are something like 5 million regular players and every day more than 300,000 people attend licensed bingo clubs. Although bingo is a form of gambling, and although a housewife can lose more than she can reasonably afford, nevertheless it provides something of a social service and offers to a large number of people living in pretty humble and often lonely surroundings the chance of meeting other people, entertainment, refreshment, light and heat.
Bingo is surely in a quite different category from casino gaming—which, oddly enough, we shall be discussing in your Lordships' House tomorrow. But, just like casinos, licensed bingo is very closely controlled under the Gaming Act 1968. For example, it is subject to restrictions on licensing and certification, opening hours, admission to take part in the gaming, and on advertising.
The 1968 Act recognised the existence as well of bingo in members' clubs and miners' welfare institutes. In recent years we have also seen the growth of so-called newspaper bingo quite outside the 1968 Act. That is a form of bingo with what might be charitably described as managed prizes, far greater in amount than anything that the bingo industry itself has ever contemplated and with no restrictions whatsoever on advertising. The organisers have hoped to stay within the law by arranging that there is no requirement to buy a newspaper to enter, but the normal expectation is that one will do so.
We now have an experiment by British Telecom for telephone bingo, which I shall describe in a moment. This is an example of straightforward gambling. There is no question of one enjoying any side benefit—for example, in the way of a newspaper to read. Nor is that the end of it. Various types of bingo are already being used by a number of commercial companies to promote their businesses. We know that the technology now exists to play a game of participative bingo by way of one's own TV set and that proposals for just such a game are now being hawked around by the promoters. I do not know what view the IBA is likely to take if such a proposal goes to it, but what with the prospect of satellite TV and all the rest of it,
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the pressure for some form of TV gambling is only too likely to increase.
The British Telecom experiment is only one example. I am bound to ask whether the Government are content just to sit back as the scope for gambling grows ever wider and wider, or whether they consider that the time is coming where the line should be drawn somewhere. If they do not, then how do they justify retaining strict statutory limitations on the one form of activity that offers a real social contribution in addition to the opportunity for modest gambling?
As this Question concerns British Telecom bingo, I had better talk about that form of bingo in a little more detail. A 12-week experiment in the Midlands has just finished. The idea was that if it succeeded the arrangements should be spread across the whole country. I am glad to be able to say that British Telecom have told me this week that they have decided to abandon the whole attempt as from Sunday last. They tell me that that decision was taken on commercial grounds. Satisfactory though that conclusion is to me, it does not dispose of the questions to which that experiment has given rise and about which I am speaking this evening.
Another experiment in Southampton on rather different lines ran, I believe, into troubles of its own, but under the Midlands scheme cards with numbers printed on them were distributed to households in the area. Anyone who wanted to take part could then ring up a British Telecom number to check off the bingo numbers given for that day against those on the card. At the end of the week, a score of 15 entitled the holder to claim a substantial prize for a full house—a phrase no doubt familiar to your Lordships.
The claim could be made on a Freefone number, but all the calls in the week were ordinary telephone calls that had to be paid for. In the fond belief that all of that could be kept within the law, the week's numbers were announced on a local radio station on the Sunday evening an hour or two before the final claim had to be made, so that in theory at any rate one could enter without spending anything.
On 12th November, as reported at col. 137 of Hansard, I asked whether the Government thought that that experiment was in accordance with the public interest. The noble Lord, Lord Glenarthur, who replied on that occasion, is not present in your Lordships' House this evening. When I told him that I might have to make some remarks that could be construed as being mildly critical, he assured me that that was a prospect he could face with equanimity. In any event, the noble Lord made no attempt to answer my original Question. He simply replied that the decision was a matter for the commercial judgment of British Telecom.
That hardly came as a blinding revelation. What I had actually asked was whether the Government held any views about that decision. So I tried again. I asked:
"Is it not deplorable that this great undertaking … should go in for action which may not be strictly illegal—although I would not be too sure about that—but is certainly plainly contrary to the spirit of the Gaming Act 1968?".—[col. 138.]
I also mentioned:
"With newspaper bingo you at least get something to read for your money".

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To that supplementary question the noble Lord, Lord Glenarthur, replied:
"I do not think that the noble Lord is necessarily right. He referred to newspaper bingo, and as with telephone bingo it is not essential to make a payment to take part, and the courts have not found newspaper bingo illegal".
The noble Lord did agree in subsequent correspondence that he had not attempted to say either that the courts had held newspaper bingo to be legal. The fact is that this issue has never been directly tested in the courts on a specifically argued case.
Anyway. I was talking about telephone bingo. Although I am no lawyer, I am sure that I am not alone in believing that there is, to put it at its lowest, an argument that that particular activity in all probability strayed onto the wrong side of the law. Whatever the legal position, the arguments of policy remain. In those exchanges on 12th November, the noble Lord, Lord Glenarthur, stated that,
"The gaming board will be discussing telephone bingo shortly".
The board has a statutory duty to watch the development of all forms of gaming and I hope that the noble Viscount, when he comes to reply, will feel able to tell the House what views the board expressed. Telephone bingo as such is evidently finished, but there will undoubtedly be other experiments and the views of the board will be of lasting interest.
There is one other quite separate point. When we were devoting so much time in this House to the privatisation of British Telecom I cannot recall that we ever had any explanation that one of the consequences might be that this great corporation would feel free to do its bit to try to turn us into a nation of gamblers without apparent regard to the social considerations involved—any more than we were told about another of its rather bizarre experiments whereby one could telephone the topless page 3 model of the day and chat to her about her love of animals or about swimming pools!
However, with my eye on the clock I realise I have said enough, but I should like to end by summarising the questions which emerge from what I have been saying. First, what advice have the Government had from the Gaming Board? Did the Government or the board make representations to British Telecom? Are the Government now prepared to express in public a view about the policy implications of this apparently unsuccessful experiment?
Secondly, have the Government received advice about the actual legality of the experiment, and do they have views which they are prepared to disclose about the legality of other comparable activities? Thirdly, do the Government contemplate trying to draw the line somewhere to stop this spread of gambling opportunities? If not, and if there is to be a free-for-all for newspapers, TV promoters, and whoever else climbs on to the bandwagon, do they contemplate relaxing the very tight restrictions on licensed bingo, which is the one form of bingo with a social benefit? If not, why not?
Finally, are the Government content, now this great public enterprise is privatised, to wash their hands of it altogether and to refrain from commenting on its activities, however socially undesirable they may be? I
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think that I was not overstating the case at the beginning of my speech when I said that there were social issues of some consequence here.
8.12 p.m.
Lord Harmar-Nicholls: My Lords, I declare an interest, having been chairman of a quite significant leisure company which had bingo as one of its products. I have continued that interest, particularly in relation to the legislation affecting bingo. I look upon this contact as a slight advantage when such matters are being discussed as it enables me to know first-hand how genuine are the protests and criticisms from the operators' side.
The noble Lord, Lord Allen of Abbeydale, is similarly placed with regard to having some knowledge of the real make-up of this subject, but he comes from the controllers' side; so we have the operators with the day-to-day knowledge of how it affects the actual operation and we have the controlling side with the special knowledge of how it affects the nation and the general way that it fits in. But tonight from both sides of the coin we bring identical messages.
What is this message that we both bring? It is that the bona fide bingo establishments have proved that properly run it is a harmless pastime which provides a real social service to the lonely and the aged; and now that the bona fide clubs have established that status there is a risk that outside organisations such as newspapers, television, and cable companies, as the noble Lord said, will produce pseudo games and call them bingo purely for their own sales purposes. I do not object to that, but I agree with the noble Lord, Lord Allen, that it is someone's responsibility to see that the way they do it is within the law as it now stands.
They are likely to be a great problem to what I call the bona fide operators, because they are free from any of the legislative constraints which the bona fide clubs must have. If they are allowed to develop without those constraints they will submerge and, I suggest to my noble friend who is to reply, it may well be that they will annihilate the genuine article which has passed the test of coming within the law as set out in the 1968 Act and the way it has been operated.
I do not think that there can be any doubt about that and I should like my noble friend, when replying, to bear in mind this fact: that since the newspapers' pseudo bingo started about three years ago the genuine article has seen the number of clubs reduced from 1,400 to 1,200; that is, a reduction of about 14 per cent. Admissions to the various clubs over that period have fallen by 20 per cent. I do not for one moment suggest that that very clear indication that the clubs have been proved to be both desirable and helpful in a social service way was totally due to the newspapers, but I am saying that this quite significant fall has been during the period when the pseudo bingo newspaper efforts have been in operation.
A part of the message that I think we both bring is that elementary fairness insists that both the bona fide and the new participants should be under the same legal constraints. To leave it that one is free and the other is in a straitjacket of restraint simply is not fair. I do not believe that Parliament would be doing its

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duty by leaving the legislation with that sort of advantage being given, particularly when it could result in the bona fide games being pushed out of existence. Therefore, the Government must either do that or—and I emphasise this, because it is within the power of the Government to do so—the original bingo halls which have pioneered both the popularity and the status of the game should be freed from the straitjacket of not being permitted to advertise and other such constraints that are put upon them under the 1968 Act. All operators of either genuine bingo or pseudo bingo should compete on the same terms.
I believe that that is, briefly, the message that the noble Lord, Lord Allen, and I both bring in this Unstarred Question tonight. I want to emphasise to my noble friend who is to reply that this Unstarred Question is very significant. It is significant, in my view, because of the standing and experience of the noble Lord who introduced it. I do not believe that we ought to ignore the significance of the noble Lord's tabling of this Unstarred Question and the message that he gave.
I attach a lot of importance to that, because those who understand the significance of Unstarred Questions know that usually they are taken as a way of putting on record some point of view, often without there being much hope of it ever being carried forward, or of it incurring subsequent legislation. This Unstarred Question is different. It emphasises an unfairness brought about because of legislation in one part of industry and it must be dealt with. I have declared my interest and how I have been chairman of a company which has bingo as one of its products. If I or anyone connected with the industry had asked this Question, it would have had just the same basis in terms of the truthfulness of the message; but in its acceptance by everybody it might have been suspect, genuine though the message seemed, as to how much self-interest was involved in it.
When such a matter is raised by the noble Lord, Lord Allen of Abbeydale, who has spent almost a lifetime from 1934 as one of our senior civil servants with the responsibility of important offices of state (the Home Office, the Ministry of Housing, the Treasury itself) and who was ultimately made chairman of the Gaming Board, that adds special significance to this Unstarred Question and the noble Lord who is asking it tonight. In his capacity as chairman of the Gaming Board, the noble Lord had access to the inspectors' reports. He saw the reports which had to be given to him under the Act and he had the services of a virtual army of people to investigate the situation and see whether the law was being properly upheld. He comes here with a knowledge which is almost unequalled by anyone else who is likely to take part in this debate. His main strength is his very career. He himself shows that he is being objective. There is no quesion at all of any self-interest in the message that he brings to us.
I suggest therefore that the Government, through my noble friend, would be very well advised not to treat this as just another Unstarred Question, where members are letting off steam in the hope that it may do some good somewhere. It is the beginning of a genuine attempt to right an unfairness. It is an unfairness which has been recognised everywhere. Indeed, there are not only the arguments which have
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been put by the noble Lord and myself from our respective positions on both sides of this industry, but there is also the report of the Royal Commission in 1978, which admitted that bingo clubs, as they were operated under the present Act, were serving a social purpose, and they ought to be relieved of some of the constraints which would make it impossible for them to continue to exist.
I hope that my noble friend and other noble Lords who are taking part in this debate tonight will put this Question out of the realm of the normal Unstarred Question, where it is just a matter of putting a point of view on the record. It discloses an unfairness which it is possible for the Government to put right, and they ought to put it right. It is a message which comes from people placed, as I am, who have seen it in day-to-day operation, and it has been seen from the point of view of the noble Lord who has been one of the pioneers of the legislation which has brought this about.
I hope that the message which the noble Lords will give will be either that they will ensure that the unfair competition and freedom from constraints that certain groups possess will be changed, and the situation will be legally adhered to, or that they will remove the unnecessary constraints on those who already operate and who have proved how genuine and desirable they are, so that they can carry on and carry out what was intended when the 1968 Gaming Act brought bingo under the aegis of the law.
8.25 p.m.
Lord Bancroft: My Lords, with the demise of telephone bingo, I rise, not for the first time, in the presence of a shot fox; but the existence of the corpse in no way invalidates the single point that I want to make, nor the very important points and questions which have been raised by the two noble Lords who have spoken before me. I am afraid I cannot match their eloquence but, like the noble Lord, Lord Harmar-Nicholls, I must declare a modest interest. Among other activities, I am a director of the Bass group of companies and also a director of two of their wholly-owned subsidiaries, one of which, Coral Social Clubs, is a leading operator of bingo clubs.
My brief intervention is not primarily designed to complain about competition from newspaper bingo, or the now defunct telephone bingo which I believe is called "Ringo"; but like other noble Lords I cannot help but ruminate on the political and economic philosophers who set the mountains of privatisation in labour. Did they envisage the production by British Telecom of such a rum and doubtfully legitimate mouse as "Ringo"? I think its only qualification for being remembered is that it makes a good alliterative chum for Roland Rat. I am glad that British Telecom has put it out of its misery.
Despite the paucity of Peers present here tonight, I want to re-emphasise the points that have been made about the vast number of people whom bingo touches. In their singularly scholarly study called Women, Leisure and Bingo, Dixey and Talbot found that for many of our fellow countrymen and even more of our fellow countrywomen, bingo is one of the very few acceptable sources of entertainment outside the home. Specifically, they found:
"Women, more than men, and the older age groups rather than

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the younger, regard bingo as their main entertainment outside the home. There is little variation by region".
Adding flesh to the figures that we have already been given, in 1984 an average of 340,000 people a day played bingo and a total of 124 million people participated during that year. I repeat therefore that we are concerned with a lot of people, and since the duty collected from the clubs amounted to £49 million, we are talking about quite a lot of money too.
I repeat that my main and indeed my only point is one made by both the noble Lords, Lord Harmar-Nicholls and Lord Allen of Abbeydale, and also in a singularly wise speech by the successor of Lord Allen as chairman of the Gaming Board, Sir Anthony Rawlinson. It concerns the restrictions placed on bingo clubs as compared with bingo promotions in newspapers and elsewhere. Referring to the 1968 Gaming Act, which, as has been remarked, in many ways treats bingo played in clubs as if it were hard gaming played in casinos (which it certainly is not) Sir Anthony is reported as saying:
"Were the legislation being rewritten in respect of advertising restrictions, I think a case could be made for distinguishing licensed bingo premises from licensed casino premises".
He added that:
"With an eye to the future it would be useful if bingo operators were to come forward with coherent and specific proposals for reforming Section 42 in a way which they would regard as sensible".
I say both "hurrah" and "amen" to that.
All research and experience has shown that it is the social facilities of the bingo clubs which form a large part of their attraction to their patrons, who are mainly women with very few other places to go and socialise. It is therefore difficult—I echo points already made—to justify placing quite ferocious restrictions on advertising on those bingo promotions that serve a useful social purpose and none at all on those that are solely gaming. The ferocity of the restrictions is real. Any noble Lord who wishes to glance at Section 42, subsections (1), (6) and (8), for example, will understand what I mean. Other businesses can freely use the bingo industry's product to stimulate their own enterprises without any restraints or any of the costs, such as the duty, that are attached to licensed clubs. Sooner or later, as the noble Lord, Lord Allen said, a line needs to be drawn to stop the indiscriminate spread of gambling.
In the interests of fairer competition and the fairer interplay of market forces—this should appeal to the Government—I hope very much that the noble Viscount who will be responding for the Government will undertake that sympathetic—I repeat, sympathetic—consideration will be given to legislation that removes some of the restrictions on the clubs, in particular their freedom to advertise. I conclude by thanking my noble friend Lord Allen of Abbeydale for introducing the debate with all the authority that the noble Lord, Lord Harmar-Nicholls, has described.
8.31 p.m.
Baroness Ewart-Biggs: My Lords, I should like to add my voice in welcoming this Unstarred Question, presented by the noble Lord, Lord Allen, with great clarity and great feeling and also, I believe, with great
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conviction. The noble Lord says that it is now certain that this particular experiment has come to an end. Indeed, even I had heard this on the grapevine. It would therefore seem that those of us who are contributing to the debate are left with examining whether such an experiment was, in the first place, desirable, in view of other experiments that might be set up to follow in its place. The noble Lord, Lord Harmar-Nicholls, spoke with great force about the unfairness of the law as it affects part of the leisure industry with which he is concerned. What the noble Lord said bore great conviction. The noble Lord also spoke of the great contribution that bingo halls make to the public enjoyment generally.
I was glad that the noble Lord, Lord Bancroft, made clear that the bingo hall is a place that older women feel they are able to enter alone. There are still in this extremely male dominated society in which we live many places that the older woman certainly would feel uncomfortable entering alone. There can be no doubt that she needs as much, if not more than most (because she is confined a great deal to the home), some place for social entertaining. These are strong arguments in favour of all the support that can possibly be given to the traditional bingo hall as we have known it.
As the noble Lord, Lord Bancroft, said—and it is my view, too—there seems little doubt about there being something very disturbing about a big undertaking such as British Telecom producing this so-called service, as they described it, immediately after privatisation—a service that could be described by many as somewhat distasteful. It can also be said that there was certainly no mention of the possibility of introducing such an experiment when the Telecommunications Bill was going through this House. Speaking for myself, I viewed the experiment in two lights—first, as to where it stood in the law, about which we still do not know, although perhaps the Minister will tell us, and, secondly, whether it was a practice of benefit to people generally and one about which we all felt good.
I understand that the concerns of the Bingo Association of Great Britain were mainly commercial. The association feared particularly that telephone bingo could lead to television bingo, so keeping people indoors and away from the bingo halls and the social setting that they offer. However, with a new link-up jackpot of £50,000 starting next week, the Bingo Association would seem to have acquired a fairly convincing safeguard against this happening. It is something that they have produced themselves. Furthermore, I understand that Screensport, a cable television company who have been operating a TV bingo game nationally for 80,000 subscribers, with a weekly £1,000 prize, are about to drop it after four months' trial although it was legally cleared. This seems to me, therefore, to be another experiment that has failed. Again, this draws attention to the fact that such experiments are not perhaps desirable at all.
However, the Bingo Association still voices fears about the likely method of a typical TV bingo operation and the product sponsorship that would naturally occur. It is a chilling thought that the selling of game cards at supermarkets and the presentation of nightly numbers between commercial breaks would

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inevitably involve advertising bias. It would, of course, be a powerfully effective method of retaining an audience throughout the evening to hear successive numbers being read out. So, although, as the noble Lord, Lord Bancroft, says, we are talking about a corpse, one can nevertheless put one's views. Those are the practical and commercial aspects of the experiment put on by telecommunications.
I believe, however, that one should perhaps consider one further matter—namely, whether this practice did seem morally justifiable. Although the noble Lord, Lord Allen, did not use the word "morally", this did, I believe, run very much through his excellent speech. It is important to consider whether this practice would have been compatible or incompatible with other forms of gambling. One can only draw on one's own attitude. For my part, I must admit that I view telephone bingo with a great deal of distaste. Although I should not allow my general aversion to structured gambling to pervade my argument—or at least I should try not to—my reason for opposing it is that one of the few justifications for gambling is that it is part of a social gathering. On the racecourse, it brings racegoers together. Even the casino, amusement arcades and, mainly, the traditional bingo hall achieve the same purpose. The thought of such a practice as telephone bingo conjures up a picture of such heartbreaking loneliness of the solitary person with his telephone that it seems to me highly distasteful. Although recognising that my children will immediately say that I am sounding self-righteous and glib, I would say that I find it morally repugnant.
I should like to conclude by asking two questions of the Minister. I am sure that he will answer both of them. The noble Lord, Lord Allen, has mentioned his own Question of 12th November when he asked the Minister whether this practice was not contrary to the spirit of the 1968 Gaming Act. I hope very much that the Minister will answer that Question this evening. I hope, secondly, that he will assure the House that, considering the ease with which British Telecom started up telephone bingo, an equivalent game could not be broadcast on network television until a thoroughgoing inquiry had been carried out into the likely effects on the public and on individuals and families generally.
I should like to reiterate what the noble Lord, Lord Harmar-Nicholls, said. This Unstarred Question, put down by the noble Lord, Lord Allen, really does present a very clear principle and a clear fear about how such a scheme as this, although it is now finished, could lead to others. I think that there is very great agreement between the speakers on the three Benches who have spoken this evening that they would find a continuation of such a practice very undesirable indeed.
8.41 p.m.
Viscount Davidson: My Lords, the House will be grateful to the noble Lord, Lord Allen of Abbeydale, for asking this Unstarred Question on telephone bingo. I am particularly grateful to have been given the opportunity to set out the Government's views on this telephone game which—as the noble Lord, Lord Bancroft, has told us—has been given the rather catchy name of "Ringo".
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I am particularly conscious of the vast experience of the noble Lord, Lord Allen of Abbeydale, which is so well detailed by my noble friend Lord Harmar-Nicholls. I am also conscious of my equal lack of experience at the other end of the scale. I can therefore assure noble Lords that I take this Unstarred Question extremely seriously. I only hope that I can allay some of the fears and concerns which have been expressed and reassure those who have spoken as to the Government's views and intentions. I shall also do my best to try to answer the various points which have been raised.
As the noble Lord, Lord Allen, has said, it appears that British Telecom, after running the game on an experimental basis over three months, have decided not to continue with it. That deals with the immediate point of his Question. But as he and other noble Lords have said, there are a number of wider issues upon which I should like to take this opportunity of expressing the Government's views.
First let me deal with the concern which has been expressed about the proliferation of gambling in the form of "Ringo" and the other sorts of sales promotion with which we are familiar, such as newspaper bingo. The Government's view is that the present law on activities like this—which are a sort of lottery—is substantially right in distinguishing between cases where a person has to pay to take part and cases where he does not. If a person has to pay to enter a lottery then it is subject to the controls in the gambling legislation. The underlying reasoning is that if a person has to pay there is a risk that he will get himself into financial trouble, there is scope for cheating the public out of their money and it can serve as a magnet for attracting criminals into the activity.
If a person does not have to pay then the controls on lotteries do not apply. It is not part of our aim to prevent the sort of sales promotion with which we are all familiar, in which people are given a free chance in a draw. "Ringo" and newspaper bingo go further because, although it is not essential to make a telephone call or to buy a newspaper to take part, the intention is to encourage people to do that. These sorts of activity press the distinction in the law to its limits, and in our view "Ringo" is on the borderline of what is acceptable under the present law and what is not. However, it would be for the courts to decide if it were over the line, not for the Home Office.
I think that I have said enough to indicate the difficulties which would arise if the Government were to try to reformulate the law to bring sales promotions like newspaper bingo within the controls on gambling. There would be problems of choice and definition. We are not convinced that the end result would be better than the present law and we have no plans to make any change in this area.
Noble Lords who have spoken have rightly drawn attention to the controls which apply to bingo. The Government recognise the social value of bingo and that recognition lay behind the Government's support for the Bill last session which relaxed the law to allow a national bingo game offering prizes of up to £50,000. The industry has set a lot of store by the new game and it is hoped that it will be in operation by the summer. We know the industry would like to see the controls on advertising relaxed, but it has been the policy of

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successive governments to maintain these controls to avoid the stimulation of gambling. The advertising of newspaper bingo and other sales promotions, does not pose quite the same problems because it is possible to play without having to pay. I understand the resentment felt by the bingo industry but I cannot at this stage offer any hope of a relaxation on advertising.
The noble Lord, Lord Bancroft, hoped that I could be sympathetic on this point. All I can say is that if the bingo industry comes forward with coherent proposals on advertising, then of course the board and the Home Office will consider them. But it needs to be said that, as the noble Lord, Lord Allen, said, licensed bingo is gambling and, as I would repeat, we must avoid the stimulation of gambling.
I am aware that bingo attendances have been falling since at least the early 'seventies and are continuing to fall. My noble friend Lord Harmar-Nicholls has given us statistics to prove it. But we are not aware that there is evidence that this decline can be directly attributed to the introduction of newspaper bingo and other similar games. I appreciate that my noble friend Lord Harmar-Nicholls may have reached a different conclusion on this point. In that case I would suggest that this could be an area for further research and I would certainly be willing to consider representations from the industry as to what extent, if any, the attendance at bingo clubs has been affected by these promotions. As I have already said, the new law on multiple bingo shows that the Government are not unsympathetic to the bingo industry.
My Lords, I have been asked about the Government's attitude to industries like British Telecom which have been privatised. It has been suggested that "Ringo" demonstrates the need for the Government to retain some controls over them. It has always been this Government's policy to give the nationalised industries the maximum possible freedom to reach their own decisions on commercial and operational matters. If that was appropriate then, it is all the more so now that British Telecom is in the private sector. The operations of British Telecom, like those of any large organisation, are rightly of interest to a wide range of people, but the Government mean what they said in the prospectus for the offer for sale of British Telecom. We said that we did not intend to use our shareholding to intervene in the commercial decisions of the company. As a private sector company British Telecom must be free to exercise their own commercial judgment, subject always of course to their acting within the law. They have exercised their commercial judgment in deciding not to continue with "Ringo".
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Finally, the noble Lord, Lord Allen, inquired about the Gaming Board's attitude to "Ringo". It has not been customary to disclose the board's advice. Suffice it to say that the board and the Government are at one in finding "Ringo" to be on the borderline of what is permissible under the present law. We and the Gaming Board therefore welcome the decision by British Telecom not to introduce it.
The noble Baroness, Lady Ewart-Biggs, asked me a question about bingo on television. I understand that this would be a matter for the IBA. That is all I can say at this moment.
I am aware that my reply tonight may not wholly satisfy noble Lords. However, I hope that at any rate tonight's discussion will have taken this matter one stage further towards a solution. I should again like to thank the noble Lord, Lord Allen of Abbeydale, for initiating this Unstarred Question.
Lord Allen of Abbeydale: My Lords, before the noble Viscount sits down, may I ask about his reference to the IBA. As I explained, there is a game of participative bingo being hawked around. Is the noble Viscount saying that this is to be left entirely to the IBA, without any hint of what the Government might think?
Viscount Davidson: My Lords, I cannot give the noble Lord an answer at this moment; but I shall write to him on the subject and perhaps we may have a correspondence about it.
Baroness Ewart-Biggs: Would the noble Viscount forward a copy of that letter to me, too?
Viscount Davidson: My Lords, most certainly.

Poole Borough Council Bill [H.L.]
The Commons amendments considered and agreed to.

Agricultural Holdings Bill [H.L.]
Reported from the Joint Committee without amendment, and recommitted to a Committee of the Whole House.
House adjourned at eleven minutes before nine o'clock.

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  MILK IMPORTS 1983–85
  MILK IMPORTS 1983–85