Sitting of 27 January 1986

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

    NCB (Productivity)
    Mr. Andy Stewartasked the Secretary of State for Energy if he will make a statement about the latest productivity figures for the National Coal Board.
    Mr. Hickmetasked the Secretary of State for Energy if he will make a statement about current levels of productivity in the pits.
    Mr. Macleanasked the Secretary of State for Energy what improvements in productivity are currently being achieved by the National Coal Board; and if he will make a statement.
    The Secretary of State for Energy (Mr. Peter Walker): The NCB has recently, for the first time in its history, achieved average deep-mined productivity of 3 tonnes per man shift. This major improvement since the ending of the strike is a clear demonstration of what can be achieved with determined effort by all those in the industry.
    Mr. Stewart: I thank my right hon. Friend for that reply. The 30 per cent. increase in productivity is extraordinary. If my right hon. Friend had suggested that 12 months ago, he would have been accused of living in a dream world. Now that that is a reality and there is a total commitment from those in the industry, will my right hon. Friend give the Government's commitment to the industry and its secure future?
    Mr. Walker: As we have maintained throughout, there is no doubt that, with the best coal reserves in western Europe, and with immense skills in mining and mining engineering equipment, the industry has a considerable future, provided that it applies the abilities and talents that are available to it. Therefore, we rejoice at the achievements that are currently taking place and look forward with confidence to the industry's future.
    Mr. Hickmet: Are not those excellent figures a triumph of the Government's policy in relation to the coal industry? Will that not release more taxpayers' money for the National Health Service and for pensioners, enable NCB (Enterprise) Ltd. to be adequately financed, and provide the prospect for finally removing the burden of the coal industry from the rest of British industry?
    Mr. Walker: I know that my hon. Friend has industries in his constituency which depend upon the availability of coal at competitive prices. There is no doubt that the
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    achievements that are taking place, and the greater achievements that will be available in future, give a great prospect not only to those who make possible such achievements. My hon. Friend said that the credit for this was due to the Government's policy, but in fact the credit is due to those who work in the industry and produce those figures.
    Mr. Mason: Is the Secretary of State aware that I thought that pit survival was based on profit per tonne, but now gigajoules have been introduced into that calculation? The NCB now states that individual pits have to cut their output costs to 165p per gigajoule. If the right hon. Gentleman knows anything about gigajoules, will he explain the relationship between output costs and gigajoules for the benefit of myself and my miners?
    Mr. Walker: No, Sir, but I should explain that "Plan for Coal", in which the right hon. Gentleman played such a positive part, envisaged that productivity would increase by 4 per cent. per annum, but that, alas, as he knows, as a member of the Labour Government during the five years that they were in power, output declined from 2·28 tonnes per man shift to 2·24 tonnes per man shift. I am delighted that some of the ambitions of "Plan for Coal" are now being achieved by this Government.
    Mr. Benn: Will the right hon. Gentleman tell the House whether he has held any formal or informal discussions about the privatisation of all or some of the pits now operated by the NCB?
    Mr. Walker: None, Sir. All I can say is that had I been Secretary of State during the declining production of the right hon. Gentleman's period in office, I probably would have done.
    Mr. Michael Morris: Do not those figures clearly show what a change good leadership makes? However, is my right hon. Friend aware that there is a shadow on the horizon in relation to opencast coal—the rate at which planning permissions are being given? Will my right hon. Friend look at that problem?
    Mr. Walker: Planning permission for opencast coal is now a matter for my right hon. Friend the Secretary of State for the Environment. I think that he is concerned, as we all are, about delays in the granting of planning permission, which leads to delays in improved productivity and other activities.
    Mr. O'Brien: In view of the Secretary of State's reply and reports that pits are breaking all output records, has he any information about NCB policies to increase the sale of coal and to improve exports so that we can ensure that no pits close because of overproduction?
    Mr. Walker: As the hon. Gentleman knows from his great interest in this subject, the Government have extended the coal conversion scheme, and in all the energy efficiency programmes that we are pursuing throughout the country we are putting forward the advantages of that scheme. Research is being done on other uses for coal, and the present management of the NCB is more interested in marketing than was any previous management.
    Sir Raymond Gower: Is my right hon. Friend aware that against the background of this significant achievement, some areas, including south Wales, have suffered a disproportionate loss of jobs because of the age and

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    exhaustion of their pits? Will he discuss with the NCB the possibility of sympathetic consideration being given to early approval of the new pit at Margam?
    Mr. Walker: I shall certainly convey my hon. Friend's views to the NCB management. The exhibition in the Palace of Westminster last week of the activities of the enterprise company showed that in that sphere, too, much activity is taking place in the interests of the mining communities.
    Mr. Hardy: Does the Secretary of State accept that this significant advance has been achieved at high cost, especially to the coalfield communities? Does not the logic of the situation suggest to him that there should be further NCB and Government endeavour to enhance the sales of British coal in the industrial market?
    Will the right hon. Gentleman also take care to ensure that future achievements are not imperilled by high accident rates, and will he look at the situation in certain coalfields, notably Nottinghamshire?
    Mr. Walker: I agree that the maximum safety standards must be retained at all times, and they are being retained. The hon. Gentleman has an immense interest in this subject, and I suggest that he must ask why, for so many years, after all that was predicted in "Plan for Coal", the improvement in productivity did not take place, despite a massive injection of investment. We are, thank heaven, at last getting a return on that massive investment, and that will be to the benefit of the whole industry.
    Dr. Michael Clark: Is my right hon. Friend aware that the Select Committee on Energy visited the south Wales coalfield last week and saw at first hand the increasing productivity in that area? Is he also aware that many pits in south Wales are becoming profitable for the first time since the 1950s and that that achievement is bringing about a welcome increase in morale among everyone associated with those coalfields?
    Mr. Walker: It is astounding that some pits which it was argued could never make a profit under the previous criteria are now achieving production levels that make them profitable.
    Mr. Eadie: We should be pleased about the increases in productivity, but does the Secretary of State not realise that we must translate that into another avenue? For example, the miners want to know what the consumption of coal will be this year. The CEGB and the NCB have been spreading doom and gloom in the past year, so what will the 1986 figures be? In addition, why are imports so disgracefully high?
    Mr. Walker: Nobody has done more to bring doom and gloom to the prospects of the industry than Mr. Arthur Scargill.

    Natural Gas
    Mr. Portilloasked the Secretary of State for Energy when he expects to make an announcement of his policy on the import and export of natural gas to and from the United Kingdom.
    The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): My right hon. Friend hopes to make an announcement as soon as possible.
    Mr. Portillo: I thank my right hon. Friend for that reply. Has he had an opportunity to study the Select
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    Committee report which recommends the liberalisation of imports and exports? Does my right hon. Friend recognise that it would be helpful to the Standing Committee on the Gas Bill if the Secretary of State's statement could be made while the Committee is still sitting?
    Mr. Buchanan-Smith: I have looked at the Select Committee report, and it is significant that the report says that a number of United Kingdom gas producers have reservations about unfettered imports and acknowledges that other interests see problems in regard to exports. Given that it is a comlex problem, about which there are conflicting views, we should give this important matter much consideration.
    Mr. Wilson: In view of the question mark that hangs over the self-sufficiency of gas supplies in the 1990s, will the Minister consider taking advantage of the drop in world oil prices and the link with gas prices to renegotiate a deal with Norway to bring in imports?
    Mr. Buchanan-Smith: If the hon. Gentleman had followed the matter more closely, he would realise that the gap predicted for the 1990s—if there is a gap—is infinitely smaller than the total amount of gas that would have been available under the Sleipner deal. If that deal had gone ahead, it would have jeopardised the development of our own resources in the North sea. Neither I nor the Government wanted that.
    Sir Trevor Skeet: Is my right hon. Friend aware that a gas pipeline to Europe is well overdue and that that is probably the only way to deal with price flexibility in the long term?
    Mr. Buchanan-Smith: Yes, Sir. The Government are equally responsible for ensuring that our resources in the North sea are developed properly without abuse. That weighs strongly with me.
    Mr. Douglas: Does the Minister accept that imports and exports of natural gas cannot be divorced from imports and exports of oil? What view does he take of our self-sufficiency, since the price of North sea crude has been almost halved in a month?
    Mr. Buchanan-Smith: Oil and gas are different. Oil is tradeable in the world market, whereas gas is not. Although they are related, one must look at them in different lights.

    Energy Efficiency
    Mr. Greg Knightasked the Secretary of State for Energy if he will make a statement about the progress being made by industry and commerce to reduce their energy bills.
    Mr. Peter Walker: There has been an enormous upsurge of interest, which is now leading to action. Membership of energy management groups has increased by 70 per cent. and the number of firms appointing an energy manager has more than doubled. Savings of £160 million a year have been identified in 5,000 surveys conducted under the energy efficiency survey scheme, and I expect the monitoring and targeting programme to lead to savings of £100 million a year. The energy efficiency office's demonstration scheme has also exceeded its target.
    Mr. Knight: I welcome that reply. Does my right hon. Friend agree that much could and should be done? Do not

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    some estimates indicate that up to £7 billion could be saved by commerce and industry through increased energy efficiency? Are not the potential dividends enormous?
    Mr. Walker: Yes, Sir. There is no doubt that this is only the beginning. I can think of no other sphere in the British economy where there is more potential to improve our performance than in energy efficiency. The potential saving involved in improving energy efficiency is about £7 billion a year.
    Mr. Evans: Is the Secretary of State aware that effective insulation can play a substantial part in reducing energy costs and that major producers, such as Pilkingtons in St. Helens, require a long-term, Government-backed programme if they are to achieve a proper return on their capital and provide full employment for their workers?
    Mr. Walker: I agree that that is of immense importance. Firms such as Pilkingtons are delighted with our energetic campaign. I am also delighted at the considerable expansion of voluntary organisations helping to provide insulation in the homes of lower-income families.
    Mr. Neil Hamilton: Does my right hon. Friend agree that one of the best ways for industry and commerce to reduce energy costs is to encourage more competition in coal production and to press the National Coal Board to keep its costs in line? Does he also agree that the best way to do that is to raise the limits on opencast production by licensed operators?
    Mr. Walker: Opencast operators produce a substantial volume of coal. The delays which adversely affect them are caused by planning procedures rather than by anything else. That is a matter for my right hon. Friend the Secretary of State for the Environment.
    Mr. Orme: Does the Secretary of State support the view that the dramatic fall in oil prices is good for Britain, particularly the energy bills affecting British industry and commerce? Is that the message that he will convey at the meeting he is to have with Sheikh Yamani in the near future?
    Mr. Walker: I have no meeting planned with Sheikh Yamani in the near future. The question of oil prices is complicated and is certainly not dealt with under this question.

    Anthracite and South Wales Steam Coal
    Mrs. Clwydasked the Secretary of State for Energy if, when he next meets the chairman of the National Coal Board, he will raise with him the current situation regarding the availability of anthracite and south Wales steam coal.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): At my right hon. Friend's meetings with the chairman of the NCB all aspects of the coal industry are discussed, including the availability of various types of coal.
    Mrs. Clwyd: Does the hon. Gentleman agree that bad planning by the NCB has meant massive stockpiling of power station coal and serious shortages of specialist coal, such as that produced in Durham and south Wales? Why was a pit in my constituency which produced dry
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    smokeless fuel shut, yet, two months later, a plant needing dry smokeless fuel had to lay off men because it could not get that fuel?
    Mr. Hunt: The hon. Lady should check her facts. The supply of domestic smokeless fuel, including anthracite, is better than it has been for many years. That was one of the markets most affected by the tragic strike. I wish that the hon. Lady would join the fight to regain those important markets instead of cribbing in the way she does?
    Mr. Rowlands: Does the hon. Gentleman accept that we are still importing a large amount of anthracite? There was supposed to be an exciting new investment programme in anthracite, but we have seen nothing of it. There was supposed to be an exciting investment programme in coking coal in south Wales, but we have seen nothing of it. When will the Government and the NCB address themselves to those issues?
    Mr. Hunt: Stocks of anthracite in south Wales are more than sufficient to meet expected demand in the coming months. The hon. Gentleman must realise that the tragic strike in the industry did a great deal of damage, no more so than in south Wales.

    Nuclear Generation
    Mr. Sternasked the Secretary of State for Energy what are the projected figures for nuclear generated electricity for 1986 and 1996.
    The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): No precise projection is possible. The proportions of electricity supplied by the public supply system in the United Kingdom from nuclear power stations could rise to about 25 per cent. when the nuclear stations presently under construction or commissioning are fully operational around the end of the decade. The figures for later years will depend on a number of factors, including the outcome of the Sizewell inquiry.
    Mr. Stern: Does my hon. Friend agree that in any advanced society the need for the cheapest possible source of electric power is paramount and that, therefore the result of the Sizewell inquiry will have a major bearing on the future of cheap electricity and of the industry on which it is based?
    Mr. Goodlad: Yes, Sir.
    Mr. D. E. Thomas: Do the Government accept the recent independent forecast on European nuclear capacity, which was published in the Financial Times, that only one new station would be commissioned and working by the end of the century? Is the Minister aware that 1,000 jobs in the Meirionnydd constituency depend on whether Magnox stations will be replaced?
    Mr. Goodlad: I note the hon. Gentleman's comment on his constituency. I shall look at the article to which he referred.
    Mr. Kenneth Carlisle: If we doubled the supply of electricity generated from nuclear power, how much cheaper would electricity be for industry?
    Mr. Goodlad: The Central Electricity Generating Board estimates the cost of possible new stations to be as follows: Sizewell B, 2·94p per kilowatt hour; a new AGR,

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    3·67p per kilowatt hour; and a new coal station, 4·29p per kilowatt hour. Those figures assume a 5 per cent. discount rate and costs relating to the lifetime of the plants at March 1984 prices. On the basis of that information, my hon. Friend will be able to make the necessary calculation.
    Mr. Orme: As the outcome of the Sizewell inquiry will be important to the calculations of the Under-Secretary of State, when will we receive that report?
    Mr. Goodlad: The timing of the report is a matter for the inspector. He has informed my right hon. Friend the Secretary of State that, following a recent review of progress, he does not now expect to be able to deliver his main recommendations until the spring.

    Association for the Conservation of Energy
    Mr. Bruceasked the Secretary of State for Energy when he last met the Association for the Conservation of Energy; and what subjects were discussed.
    Mr. David Hunt: My right hon. Friend regularly meets officers and members of the Association for the Conservation of Energy in his campaign for greater energy efficiency.
    Mr. Bruce: In the light of the Government's rather odd decision to cut home insulation grants by more than £4·5 million a year, will the Minister consult the Department of the Environment about extending the scheme to cover other worthwhile energy saving measures, such as thermostats and wall insulation, rather than cut the scheme at the start of Energy Efficiency Year?
    Mr. Hunt: The 1986–87 homes insulation grant allocation is expected fully to meet total demand. My right hon. Friend the Secretary of State for the Environment has said that he realises the significancce of Energy Efficiency Year 1986 and will bear it in mind when he considers applications from authorities for additional allocations.
    Mr. Gerald Howarth: Will my hon. Friend continue his negotiations with the Association for the Conservation of Energy, because it is doing excellent work in an important activity, where a great deal of public money can be saved?
    Mr. Hunt: I am delighted that my hon. Friend should give me the opportunity to welcome the magnificent way in which the chairmen and chief executives of the major companies involved in energy efficiency industries have come together in that association and, in particular, their initiatives in organising "Monergy" talks and promotional seminars.
    Mr. Bermingham: Referring to the question asked by the hon. Member for Gordon (Mr. Bruce), may I ask whether the Minister will support an application from the local authority in St. Helens, where, incidentally, most glazing products are made, for an increase in his £40,000 allocation for the current year, which is wholly insufficient to meet the needs of the properties in the area?
    Mr. Hunt: I have already answered the hon. Gentleman's question. I made it clear that it is the view of my right hon. Friend the Secretary of State for the Environment that the allocations will meet total demand, but there will be an opportunity for authorities to seek additional allocations.
    Mr. Speller: Does my hon. Friend accept that while energy conservation is valuable in saving energy, it is also a great creator of jobs, especially in the construction industry and in small businesses?
    Mr. Hunt: Absolutely. The Association for the Conservation of Energy and my Department have a mutual interest in promoting energy efficiency measures, because an energy efficient nation means more business for those in the energy efficiency industries.
    Mr. Robert Sheldon: Is the Minister aware that last year's Public Accounts Committee report showed that up to £100 million a year could be obtained by energy savings within the National Health Service—savings which are not being realised at present? Will he take the matter up with the Secretary of State for Social Services?
    Mr. Hunt: I agree with the right hon. Gentleman. Only a few weeks ago my hon. Friend the Member for Wycombe (Mr. Whitney) and I wrote a joint letter to all regional chairmen. That is now being followed up with individual health authorities.
    Mr. Rost: Does my hon. Friend support the argument adduced by the Association for the Conservation of Energy and the Select Committee on Energy that the rate of return on new energy investment within the public sector should be compared directly with the return on energy investment conservation, or the Government cannot assess their priorities and decide which produces a better rate of return?
    Mr. Hunt: Those of us in the public sector are determined to do just as well as, if not better than, those in the private sector in promoting energy efficiency.
    Mr. Rowlands: I refer to the point made by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). Is it not the case that massive savings in the National Health Service were identified a considerable time ago and that no action was taken or follow up made? Why should we believe that there will be any more effective action or follow up now?
    Mr. Hunt: Because I shall make available to the hon. Gentleman an energy efficiency publication known as ENCODE which is now going out to all operatives in the National Health Service and which demonstrates not just the need for but the ways in which greater energy efficiency can be achieved.
    Mr. Holt: Does my hon. Friend agree that there would be far more energy savings if the iniquitous 15 per cent. VAT on double glazing imposed by his right hon. Friend the Chancellor of the Exchequer were removed?
    Mr. Hunt: It is not just on financial grounds that we urge people to install double glazing, but on a number of other grounds, including comfort and energy efficiency.

    Polkemmet Bing
    Mr. Dalyellasked the Secretary of State for Energy what further action he is taking in relation to the fire in the Polkemmet bing.
    Mr. David Hunt: I am in regular contact with the National Coal Board in Scotland and am continuing to take a close interest in the matter.
    Mr. Dalyell: What is the time scale?
    Mr. Hunt: I readily understand the wish of local residents and the hon. Gentleman to know the time scale involved. I am satisfied that the Coal Board is doing everything that it can to minimise the nuisance. Work is progressing as quickly as possible to clear the bing as effectively as possible. I am aware that it is important to keep residents informed, and therefore I was pleased to hear from the area director this morning that he is making arrangements for a public meeting to be held as soon as possible, when experts will be in attendance to answer detailed questions.

    Employment (Scotland)
    Mr. Douglasasked the Secretary of State for Energy if he will make a statement on the current level of employment in the coal industry in Scotland.
    Mr. David Hunt: At the end of December the Scottish area of the NCB had approximately 8,500 men on colliery books.
    Mr. Douglas: Will the Minister accept that that figure would be enhanced by at least 160 if the Coal Board would accept the decisions of industrial tribunals that have gone against it? Will he acknowledge that I have written to the Leader of the House and his right hon. Friend the Secretary of State giving him detailed evidence of a meeting at Comrie colliery, which was taped? When my constituent, Mr. Robert Young, went before an industrial tribunal the National Coal Board endeavoured to fabricate evidence that would defame that man for life. Will the hon. Gentleman use his good office to conduct an inquiry into the methods and approach of the Coal Board in Scotland in dealing with dismissed miners, with a view to getting them back to work and getting decisions of the industrial tribunal agreed to by the board?
    Mr. Hunt: No, and I reject much of the intemperate language used by the hon. Gentleman. He must realise that the dismissal and re-employment of employees must be a matter for the management of the Scottish area of the National Coal Board. I know that the area director has carefully considered each case, and I am sure that all the available evidence will have been scrutinised before any decision was made.
    Mr. Bill Walker: Does my hon. Friend agree that the level of employment in the Scottish coalfields depends vitally on productivity from that coalfield, and that one sure way to make certain that there will be employment in the future is to continue with the progress that has been made recently?
    Mr. Hunt: I am pleased that my hon. Friend has given me this opportunity to pay tribute to men and management in Scotland, where productivity has now increased by 40 per cent. since the end of the strike. That is a marvellous recovery by men and management.
    Mr. Eadie: Surely the Minister is not trying to defend the decision of the National Coal Board in relation to dismissed miners who went before a tribunal and were found to have been unfairly dismissed. The tribunal recommended that the coal board give them back their jobs. The hon. Gentleman knows that the song that he and his hon. Friends sang to the House was that the way out for dismissed miners was that they had to go before an
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    industrial tribunal. Is the hon. Gentleman defending the attitude of the National Coal Board, which at present is indefensible?
    Mr. Hunt: The careful consideration that each case has received is emphasised by the fact that out of 206 men dismissed for strike-related offences in Scotland, 75 have been reinstated. I have said that there was a revolution in the Scottish coalfields. It is not the sort of revolution that the hon. Gentleman's friend, Mr. Scargill, wanted. It is a quiet revolution in productivity, and it is about time Opposition Members recognised and paid tribute to that fact. [HON. MEMBERS: "Cheat."]
    Mr. Donald Stewart: Will the Minister accept the view expressed—[HON. MEMBERS: "Withdraw."]
    Mr. Speaker: Order.
    Mr. Stewart: Will the Minister accept that the view of the hon. Member for Dunfermline, West (Mr. Douglas) is widely supported in Scotland, not least by many people who did not support the coal strike? They see the action of the coal board as simply spiteful discrimination against the miners who have been cleared by industrial tribunals. Will he bear in mind Churchill's dictum of magnanimity once the battle is over and restore the men to their jobs?
    Mr. Robert Atkins: On a point of order, Mr. Speaker. I distinctly heard Opposition Members describe someone as a "cheat". Is that a parliamentary expression?
    Mr. Speaker: Order. There was a great deal of noise, and I did not hear anybody using an unparliamentary expression, but if it was used, I ask the hon. Member concerned to withdraw the word.
    Mr. Ashton: I was one of the hon. Members who said, "cheat". Is it not a fact that the National Coal Board—[Interruption.]
    Mr. Speaker: Order. The hon. Gentleman knows that the use of intemperate language here, particularly unparliamentary language, is not a part of our conventions. I ask the hon. Gentleman to withdraw that word, although I had not called him to speak.
    Mr. Eadie: I was one of the hon. Members who used the word "cheat". I was provoked by the Minister who was answering the question. I withdraw that word, on your ruling, Mr. Speaker.
    Mr. Ashton: If you insist, Mr. Speaker, I shall withdraw that word too.
    Mr. Hunt: All that I shall say in answer to the question asked by the right hon. Member for Western Isles (Mr. Stewart) is that appeals are now being considered, and it would not be appropriate to comment further on specific cases.

    NCB (Membership)
    Mr. Pikeasked the Secretary of State for Energy whether he now proposes to make any changes in the membership of the board of the National Coal Board.
    Mr. Peter Walker: I intend to make a number of full-time appointments to the board in the next few months. Sir Robert Haslam will take up his appointment as chairman on 1 September.
    Mr. Pike: While the Secretary of State is making changes to the NCB membership, will he recognise that

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    most people are appalled at the industrial relations record of members of the NCB, typified by the way in which they have dealt with the reinstatement of miners? Will he therefore appoint people to the NCB who will have a better industrial relations record than the present members?
    Mr. Walker: I hope that the National Union of Mineworkers will appoint people to the presidency who have a better industrial relations record than the present president.
    Mr. Orme: Will the Secretary of State comment on the interview that Mr. MacGregor gave yesterday in the Sunday Express, when he talked about leaving his job early? Will he retire before 1 September?
    Mr. Walker: No, Sir. I am delighted to say that, as far as I know, Mr. MacGregor will continue until 1 September, when Sir Robert Haslam will take over.

    Coal Industry (Employment)
    Mr. Strangasked the Secretary of State for Energy if he has any plans to meet the chairman of the National Coal Board to discuss employment issues in the industry.
    Mr. Peter Walker: I meet the chairman regularly to discuss all aspects of the coal industry.
    Mr. Strang: Following the disgraceful answers by his hon. Friend the Parliamentary Under-Secretary, will the Secretary of State face the fact that there were 206 victimised miners in Scotland, that 76 have been reinstated, but that there are 11 men who have gone before industrial tribunals which have recommended reinstatement yet the NCB has refused point blank to reinstate them? Is the Secretary of State defending that?
    Mr. Walker: I only wish that the hon. Gentleman had taken more interest in those who suffered from the violence during the dispute, and in the miners who were unreasonably treated because they went to work. All that I can say is that that is a matter for the management. The hon. Gentleman referred to some specific cases, and appeals will be taking place.
    Mr. Batiste: At his next meeting with the chairman, will my right hon. Friend congratulate him on the extraordinary success of NCB (Enterprise) Ltd. in creating jobs in mining areas? Is he aware that that success will encourage many further applicants to come forward? Will he confirm that the Government will make available to the company all the money that it can usefully use?
    Mr. Walker: I can confirm that with present progress, because NCB (Enterprise) Ltd. is attracting about £6 for every £1 that it is investing, it looks as if, even under the present allocation, about £120 million of investment will go into new enterprises in coal mining areas where closures have had to take place. That is a stark contrast to the record of Governments in the past, when massive closure took place and there was no such thing as an enterprise company.
    Mr. Wrigglesworth: Does the Secretary of State agree that, despite the very good record of NCB (Enterprise) Ltd., many miners who have been made redundant are still not finding new employment? Will he speak to the chairman and make it clear that if NCB (Enterprise) Ltd. requires more resources it will receive them?
    Mr. Walker: There is no need to speak to the chairman, because I have already made that clear in the House of Commons. The chairman agrees with that policy, and the coal board is very eager for it to succeed. Hon. Members who saw the exhibition upstairs last week will know how enthusiastic it is.
    Mr. Gerald Howarth: When my right hon. Friend next meets the chairman, will he ask whether the board can confirm that it will be able to fulfil its targets for financial break-even?
    Mr. Walker: Clearly a number of factors are involved, but present progress is exceedingly good.

    Coal Liquefaction
    Mr. Dormandasked the Secretary of State for Energy if he will make a statement on the progress being made on the liquefaction of coal.
    Mr. David Hunt: I understand that work is proceeding on the Point of Ayr project in accordance with the plans of the National Coal Board and the pilot plant is expected to be completed in 1987.
    Mr. Dormand: Is the Minister aware that the delay in establishing the plant at Point of Ayr is a disgrace and shows the Government's lack of interest in this important project? As commercial exploitation is due to start in the 1990s, which is not so far away, is not the £35 million being invested far too little? Will he confirm that future development will not be held up because of lack of private capital? Does he agree that this is essentially a matter for public capital and public investment?
    Mr. Hunt: As the hon. Gentleman knows, the project is not being constrained by lack of direct Government financial support, but process problems have led to the plans being reconsidered. The present 2·5 tonnes per day unit has a much greater flexibility of operation and will enable a better process to be developed.

  HOUSE OF COMMONS

    Anglo-Irish Parliamentary Tier
    Mr. Dubsasked the Lord Privy Seal what representations he has received about the setting up of an Anglo-Irish parliamentary tier.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): A number of right hon. and hon. Members have made their views known to me as to the best way forward in this matter. Consideration of the issue is continuing.
    Mr. Dubs: Does the Leader of the House agree that the recent by-elections in Northern Ireland, especially the victory of Mr. Seamus Mallon, who will be introduced to the House shortly, have shown public support for the Anglo-Irish agreement? Does he agree that it is now time for him to make it possible for us to move towards the other aspect of the agreement—the setting up of the parliamentary tier?
    Mr. Biffen: I certainly agree that the by-elections have been a very important development on this scene. Now that they are over, it is the more important to consider setting up the parliamentary aspect.
    Sir John Biggs-Davison: Does my right hon. Friend accept that the Unionist anti-treaty vote has increased?

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    Quite apart from that, is he aware that many of us who are against the Hillsborough agreement as an unequal treaty would nevertheless support the setting up of an Anglo-Irish parliamentary tier provided that it was between the two sovereign Parliaments?
    Mr. Biffen: My hon. Friend will understand that I do not feel under a requirement to engage in any psephological analysis of what happened in the by-elections, but I am certain that he is right in believing that now that they have been concluded there is a possibility of giving renewed consideration to the idea of a parliamentary tier.
    Mr. Shore: The Leader of the House has had a number of representations, and he has time to think about them. Does he favour the proposal in the early-day motion to set up a Select Committee?
    Mr. Biffen: That is one of several proposals to which I have given consideration. My mind is thoroughly open on the matter.
    Mr. Stanbrook: Would it not be better, before pursuing the objective of a joint committee or meetings of any kind, for a Select Committee of this House, including Members representing Northern Ireland constituencies, to go into the whole question of relations with other countries?
    Mr. Biffen: Of course, at the end of the day it will be a matter for this House to authorise. I am certainly prepared to consider my hon. Friend's proposal, along with those of many others.
    Mr. Beith: The right hon. Gentleman will note that there is support within the alliance and in other parts of the House for progress with the parliamentary tier, but is not total abstention from the activities of this House as proposed by some Unionists the total negation of what unionism is supposed to be about?
    Mr. Biffen: That is quite a separate consideration from the parliamentary tier, but doubtless if the parliamentary tier were established it would be beneficial if it were the subject of as much widespread commitment as possible. [Interruption.]
    Mr. Speaker: Order. These are very important questions.

    Palace of Westminster (Register of Interests)
    Mr. Adleyasked the Lord Privy Seal if he will make a statement on the implementation of the resolution of the House of 17 December 1985, in so far as it relates to his responsibility, concerning the establishment of new registers of interest by people working at the Palace of Westminster.
    Mr. Biffen: The main responsibility for the implementation of the resolutions passed on 17 December rests with the Select Committee on Members' Interests, under the chairmanship of my hon. Friend, the Member for Wealden (Sir G. Johnson Smith). I understand that that Committee is already considering the necessary administrative arrangements for the operation of the new registers and its proposals will be made known to the House as soon as possible.
    Mr. Adley: As a member of that Select Committee, may I thank my right hon. Friend for his reply? Is he aware
    640
    that there appear to be an increasing number of secretaries and research assistants of right hon. and hon. Members who to have been engaged in the services of outside so-called parliamentary consultants? Is my right hon. Friend further aware that the arrangements between secretaries and other hon. Members' secretaries are not always known? Will he please give an assurance on behalf of the Government that, when the Select Committee reports, its reports will be acted upon by the House at the earliest opportunity?
    Mr. Biffen: I shall most certainly try to arrange that the House has an early opportunity to confirm the Select Committee's proposals, if that is required before they can be implemented.
    Mr. Meadowcroft: Has the Leader of the House yet had representations from representatives of secretaries and research assistants who feel genuinely offended that they are to be asked to sign a declaration that goes into more detail than that which hon. Members are asked to sign?
    Mr. Biffen: If that feeling is widespread, it must be communicated to the Select Committee concerned, as it is the relevant body to receive such views.

    Palace of Westminster (Souvenir Kiosk)
    Mr. Greenwayasked the Lord Privy Seal what were the takings at the souvenir kiosk in (a) the final four weeks to Christmas 1985 and (b) the latest 12 months period; and if he will make a statement.
    Mr. Biffen: The takings of the Refreshment Department's souvenir kiosk in the four-week period and the 12-month period to 20 December 1985 were £148,482 and £446,340 respectively. These figures include value added tax of 15 per cent.
    Mr. Greenway: Will my right hon. Friend give some rough idea of the profit in those figures? If profits are regular, will there be price reductions in the next few months? Will he assure the House that there are no plans to expand the activities of the kiosk by building a bigger office elsewhere in the Palace, and that there is no plan to move on to gondola-type trips up the Thames from Mr. Speaker's Steps?
    Mr. Biffen: My hon. Friend has other things to consider this afternoon besides the possibility of gondola journeys from Mr. Speaker's premises. The gross profit for the financial year 1984–85 was £113,000. It will be best if I refer my hon. Friend's other questions to the Services Committee, which is responsible for the kiosk.
    Mr. Dormand: Does the Leader of the House agree that the price of some articles is exorbitant? As he is a believer in market forces, does he agree that, if some prices were reduced, sales might be even greater?
    Mr. Biffen: I shall refer that point to the Services Committee:
    Sir Kenneth Lewis: Does my right hon. Friend realise that the kiosk is more profitable than Westland? Can we consider a takeover bid?
    Mr. Biffen: One little difficulty at a time.
    Mr. Haynes: Is the right hon. Gentleman aware that the price increases of goods at the kiosk are way above

    641
    anything else in the land? Is he further aware that Members of Parliament and our constituents are taken for a ride when they go to that shop?
    Mr. Biffen: I am so glad that we have found a real issue. As I have already said, I shall refer the points that have been raised about prices to the relevant Committee.

    Palace of Westminster (Divisions)
    Mr. Peter Bruinvelsasked the Lord Privy Seal if he is satisfied with the current access arrangements throughout the Palace of Westminster for Divisions of the House.
    Mr. Biffen: Yes, Sir.
    Mr. Bruinvels: Is my right hon. Friend aware that the GLC. as a last spiteful act before abolition, has introduced bus lanes between Lambeth bridge and Parliament square, which, when operating between 7am and 7pm cause hon. Members difficulty getting into the House for Divisions? Is that not disgraceful? Do not hon. Members have enough trouble crossing the road between Divisions as it is? As he well knows, I was knocked down on 16 May.
    Mr. Biffen: The Patronage Secretary expects every man to do his duty this afternoon and not to be an erstwhile jay-walker. I shall look into the wider difficulty that my hon. Friend has mentioned and will be in touch with him.

  ENERGY

    Combined Heat and Power
    Mr. Rostasked the Secretary of State for Energy if he will report progress on the city combined heat and power district heating schemes which his Department is supporting.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): The work programmes of the Belfast, Edinburgh and Leicester consortia began in April 1985. The Leicester consortium expects to complete its work programme by this middle of the year; Belfast and Edinburgh consortia early next year.
    Mr. Rost: Is my hon. Friend aware that prospective combined heat and power city consortia are threatened with rates assessments that are several times out of line with the rates that the public sector electricity boards have to pay for their power station utilities? Is that not an unfair practice against the private sector competing against the nationalised industries, and will he do something about it?
    Mr. Hunt: At present there are no uniformly applied bases for rating systems, and propositions appear to be very high. However, one of the objectives of the study is to identify this sort of problem—[Interruption.]
    Mr. Speaker: Order. We have a further 10 minutes of questions before we reach this afternoon's main debate.

  CIVIL SERVICE

    Soil Research (Redundancies)
    Mr. Dalyellasked the Minister for the Civil Service what representations he has had in relation to redundancy for civil servants working in soil research.
    The Minister of State, Privy Council Office (Mr. Richard Luce): None, Sir.
    Mr. Dalyell: What scientific or financial sense does it make to close the MacAulay Institute for Soil Research at Aberdeen against the public wishes of the right hon. Member for Kincardine and Deeside (Mr. Buchanan-Smith), a former Agriculture Minister and a local Member of Parliament who knows something about this matter?
    Mr. Luce: I must point out that these are matters for my right hon. and learned Friend the Secretary of State for Scotland. Moreover, the people employed at the two institutions are not strictly civil servants.
    Mr. Malone: In that case, will my right hon. Friend convey to the Secretary of State for Scotland the deep feeling that exists in Aberdeen against this move, simply because it is not based on any logic at all?
    Mr. Luce: I shall certainly do just that.
    Mr. Pavitt: Will the right hon. Gentleman ensure that he and the Secretary of State for Scotland discuss this whole question with the research bodies connected with soil research?
    Mr. Luce: I must again point out that the whole question of soil research is a matter either for my right hon. and learned Friend the Secretary of State for Scotland or my right hon. Friend the Minister of Agriculture, Fisheries and Food.
    Mr. Pollock: Is the right hon. Gentleman aware that there is deep disquiet throughout north-east Scotland about the possible removal of this institute with its consequential loss of expertise and personnel? Will he give an assurance that no final decision will be taken until there has been the fullest possible consultation with all those likely to be affected?
    Mr. Luce: I must again stress that this is not my responsibility. It is the responsibility of my right hon. and learned Friend the Secretary of State for Scotland.
    Mr. Bruce: Does the right hon. Gentleman recognise that if this closure goes ahead he will receive representations from many people involved in soil science? Does he also recognise that the feasability study that has been set up is biased in favour of removal, in spite of the fact that all the evidence and all the representations are against the undermining of this excellent institute by its removal from Aberdeen?
    Mr. Luce: I am sure that my right hon. and learned Friend the Secretary of State for Scotland has noted what the hon. Gentleman has said.
    Dr. McDonald: Is the right hon. Gentleman aware that 27 civil servants have been axed from the Soil Survey of England and Wales? Will he discuss this issue with his right hon. Friend the Minister of Agriculture, Fisheries and Food to ensure that Government resources are put into this important area of research, particularly at the present time?
    Mr. Luce: Although that is mainly a question for my right hon. Friend the Minister of Agriculture, Fisheries and Food, and although, strictly speaking, soil researchers are not civil servants, I assure the hon. Lady that all the staff involved in soil work at the laboratories to be closed are being offered transfers to other locations.

  ENERGY

    Leicester (Ministerial Visit)
    Mr. Peter Bruinvelsasked the Secretary of State for Energy if he will report on his visit to Leicester on Wednesday 15 January, when he met senior officials of the Leicester combined heat and power consortium.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I visited Leicester on 15 January at the invitation of the Leicester combined heat and power consortium. I was most impressed with progress to date and the enthusiasm of the consortium. I was pleased to hear that the consortium is hoping to complete its work programme by the middle of this year.
    Mr. Bruinvels: I agree with my hon. Friend. Does he agree that the way in which the consortium has been put together is an excellent example of both long and lasting co-operation between the public and private sectors, bringing about genuine savings in energy, which are of great benefit to the citizens of Leicestershire?
    Mr. Hunt: In paying tribute to my hon. Friend the Member for Leicester, East (Mr. Bruinvels) and my hon. and learned Friend the Member for Leicester, South (Mr. Spencer) for their support of the consortium, I agree that the consortium indeed demonstrates the public-private sector collaboration, that is needed if the consortia are to be successful.

    Energy Efficiency Year
    Mr. Ron Daviesasked the Secretary of State for Energy what part he intends the coal industry to play in his plans to promote Energy Efficiency Year.
    Mr. David Hunt: The NCB already promotes new energy-efficient technology and will continue to do so and to participate in relevant initiatives during Energy Efficiency Year. In common with the other major fuel industries, the NCB has agreed to make widespread use of the "Monergy" logo in its advertising, and is already doing so.
    Mr. Davies: What is the Minister's response to the European Community's plans to increase dependency on coal imported from outside the Community? Does he not recognise that an increasing dependency on high-cost, low-quality coal will inevitably mean a lower level of efficiency than would be achieved by using higher quality home-produced coal?
    Mr. Hunt: The hon. Gentleman forgets that under this Government we have moved from being a net importer of coal to a net exporter. Sadly, much time and effort was lost by the tragic strike that occurred in the industry. It is about time that the hon. Gentleman remembered that.
    Mr. Jessel: If we want to save energy in Energy Efficiency Year, is it not time that we all stopped wasting energy with endless arguments about who knew what and when?
    Mr. Hunt: Yes, Sir.

    NCB (Enterprise) Ltd.
    Mr. Boyesasked the Secretary of State for Energy if he has any plans to increase the cash available to NCB (Enterprise) Ltd.; and if he will make a statement.
    Mr. Peter Walker: The £20 million already allocated to NCB (Enterprise) Ltd. remains sufficient for the company's needs, but I am pleased to say that on present calculations it will attract £120 million of investment. To the end of December 1985 the, company had committed £5·5 million to assist projects, creating some 3,700 new jobs.
    Mr. Boyes: Is the Secretary of State aware that a vital meeting took place in Durham on Friday between representatives of Sunderland borough council, Easington district council and Durham county council to consider a series of projects for the regeneration of the area following many pit closures? Outside the meeting, when I suggested that £20 million was a pittance an official of NCB (Enterprise) said that any sum could be made available if a case could be made out with relevant projects. As the programme of projects will cost £60 million, will the Secretary of State consider it sympathetically, particularly in view of the high level of unemployment in my area?
    Mr. Walker: The company is considering all sensible proposals being made to it. Under the present proposals about £120 million is likely to be invested in the coming period. We welcome any sensible suggestions made to that company.

    Nuclear Power Stations
    Mr. John Mark Taylorasked the Secretary of State for Energy if he will make a statement on the latest performance against planned output of nuclear power stations in the United Kingdom.
    Mr. Goodlad: I am advised by the chairman of the CEGB that the board's fully commissioned nuclear stations are performing as planned and making a major contribution to the country's electricity supply. The AGRs at Dungeness B, Hartlepool and Heysham I have all provided valuable commercial output, but there are still problems to overcome before they are fully commissioned. Power stations in Scotland are a matter for my right hon. and learned Friend the Secretary of State for Scotland.
    Mr. Taylor: I thank my hon. Friend for his reply. Does he agree that as the nation has reached the point of buying cheap nuclear-generated electricity from France it is time that our nuclear industry made progress and went faster?
    Mr. Goodlad: My hon. Friend is right. Nuclear power has the potential to produce electricity more cheaply than other types of fuel, provided that our nuclear power stations can be built to time and cost. The Government continue to attach great importance to the safe and economic development of nuclear power.
    Mr. Evans: Does the Minister expect the PWR at Sizewell to be on stream by 1996? Is he aware of the widespread opposition of the staff and work force of the United Kingdom Atomic Energy Authority to the PWR programme? Why does he not stick to AGR?
    Mr. Goodlad: That matter is the subject of the inspector's report on the Sizewell inquiry, which we are still awaiting. It would not be appropriate for me to comment on it.

NEW MEMBER
The following Member made the Affirmation required by law:
Seamus Mallon, Esq., for Newry and Armagh.

Teachers (Dispute)
3.32 pm
Mr. Clement Freud: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the latest developments in the teachers' dispute."
The matter is urgent because the Secretary of State's weekend statement about not being able to find the money to pay for the ACAS-inspired agreement will cause further disruption and irrevocable damage to the education of children. It is specific because those seeking agreement have gone a long way down a flexible negotiating path, while the Secretary of State has remained obdurate. He has compounded his obduracy by undermining the ACAS deal before it has been ratified. The position has developed since Thursday's debate.
The matter is important because local authorities and parents now feel abandoned and deceived by the Government. A short period of calm after the 1985 settlement was needed, so that all could work towards a lasting solution. That is now threatened. Unlike Secretaries of State, who come and go, children are children and we are failing them.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the latest developments in the teachers' dispute."
I have listened with care to what the hon. Gentleman said. He knows that my sole duty in considering an application under Standing Order No. 10 is to decide whether it should be given priority over the business already set down for this evening or for tomorrow. I regret that the matter that he has raised does not meet the criteria laid down in the Standing Order; I cannot, therefore, submit his application to the House.

Westland plc
3.35 pm
Mr. Neil Kinnock: I beg to move, That this House do now Adjourn.
Leave having been given on Thursday 23 January under Standing Order No. 10 to discuss:
The circumstances surrounding the publication of classified information relating to the future of Westland plc.
Mr. Kinnock: For all of the people in the Westland company, the affairs of that company are obviously vital. For most of us outside the company, the affairs of the company have become increasingly important in recent months. But no one inside or outside the Westland company would have considered four weeks ago that this matter could become one of such current critical significance.
As the Prime Minister said yesterday, it was a comparatively small thing. Now it is palpably a very big thing. It has grown in size because of the actions and the attitudes of the right hon. Lady and Members of her Administration. Of course, the Prime Minister says that it would never have assumed this proportion but for the fact that one member of the team was not playing like a member of the team. It is plainly true that we and the country would not have known what we know now but for the fact that the right hon. Member for Henley (Mr. Heseltine) kicked over the bucket of worms by resigning earlier this month. All the dishonesty, duplicity, conniving and manoeuvring would still have been taking place. We would not have known about it quite so quickly and quite so clearly.
Evasions, manoeuvrings and deceits nurtured this comparatively small thing until it became a very big thing. It was turned from an issue into a crisis by the dishonesty of people in this Administration. That dishonesty infected the Government's whole approach to the affairs of Westland plc. There was a basic duplicity of their public dispassion about the affairs of that company and their private partisanship in the bids that were being made for Heseltine—[Laughter.]—for Westland. I think that may be the last occasion on which Conservative Members of Parliament have cause to be amused in this debate. Clearly, they hold a cavalier attitude towards dishonesty, which may explain the attitude of many of them—
Mr. Tony Marlow: On a point of order, Mr. Speaker. Is it in order for the Leader of the Opposition to accuse hon. Members of this House of dishonesty?
Mr. Speaker: I think the Leader of the Opposition would wish to withdraw any allegation of dishonesty against Members of this House.
Mr. Kinnock: I only withdraw allegations if the cap does not fit—[Interruption.]
Mr. Speaker: Order. This is a debate in which the House is taking a great interest. I ask the House to keep it on a level which is in keeping with our conventions. I am sure that the Leader of the Opposition, at the beginning of his speech, would wish to get us off to a good start.
Mr. Kinnock: You have that guarantee, Mr. Speaker, and it will continue like that—
Hon. Members: Withdraw.
Mr. Speaker: Order. I would ask the right hon. Gentleman to withdraw any allegations of dishonesty.
Mr. Kinnock: I said that hon. Members opposite have a cavalier attitude towards dishonesty. [HON. MEMBERS: "Withdraw."] On the point of order, Mr. Speaker. On the basis of the view that you take of affairs, I will certainly withdraw what I said earlier. I said that the Government's attitude was one of public dispassion and private partisanship. There are also the standing charges that still exist about moved meetings and minutes that were incomplete, and now we have the differing versions still existing of the meeting between Sir Raymond Lygo and the then Secretary of State for Trade and Industry. We know enough of the truth about the connivings of 6 January to understand that the dishonesty has run right through this whole episode. [Interruption.]
All dishonesty has to stop. We have had two dress rehearsals from the Prime Minister full of half-truths and concealments. Today the Prime Minister must come clean. That is not only my view; it is the view expressed throughout the country and expressed by the Home Secretary in the course of his interview yesterday. Today, the Prime Minister must answer the questions that she signally and significantly failed to answer six times last Thursday.
First, when did the Prime Minister find out about the decision to leak, how it was to be done and who was to do it? Secondly, how can the Prime Minister explain her claim that she did not know what action was being taken? Thirdly, did the Prime Minister establish an inquiry in response to the justifiable outrage of two Law Officers who felt that their integrity was being abused and compromised—
Mr. Churchill rose—
Mr. Kinnock: —or was there an additional reason for that? After seven days delay, did the Prime Minister establish an inquiry whose conclusions would not in the normal course of events be published, simply because she knew that demands for such an investigation would most certainly be made? Was that inquiry established for detection or was it established for deception? Was it set up to obscure the issues and to provide an excuse for silence? Was it set up by a Prime Minister who knew very well who had leaked, why they had leaked, when they leaked and what they did it for?
The Prime Minister must give clear and truthful answers to all of these questions. She must make no mistake. Today the Prime Minister is on trial. [HON. MEMBERS: "Rubbish."] The main testimony against the Prime Minister is provided by herself. It is provided by her own words to this House last Thursday, and testimony is further provided by the whole nature of her style of governing. How could it be that a Prime Minister who prides herself so earnestly on her involvement in detail; who prides herself so much on her knowledge of the minutiae of her Government; who has such a deep engagement historically in the Westland affair did not know of a supremely important decision, taken by those so very close to her, to manipulate events on 6 January?
How can it be—
Mr. Churchill: I am much obliged to the right hon. Gentleman for giving way, but before he accuses others
648
of deceit, will he explain whether it was deceit that led him to falsify his age when he first put himself forward for political candidature or did he just forget how old he was?
Hon. Members: Oh, no.
Mr. Kinnock: I think that that may be the best that Conservative Members will be able to do in the course of this afternoon. That was certainly the last time that I inadvertently added a year to my age.
On the testimony against the Prime Minister, provided by herself, we have to ask how it could be that seven days could pass before she recognised that the issue of the leak was so important that it warranted an inquiry. Who would expect us or the country to believe that 16 days could pass between the corrupt practice of that leak and the Prime Minister's discovery of the details when the plotters were her closest confidants—her most frequent companions?
Who would expect the House or the country to accept that in all that time the Prime Minister never asked her associates to venture even a guess about the identity of those involved in the leak? Who can expect us to believe that in all those endless hours of contact, through all those days of discussion and debate and questions, and statements in the House and in the even closer quarters of No. 10 Downing street, the Prime Minister was really blundering around in blissful ignorance of the actions of 2 January? Who would expect us to believe any of that?
Well, obviously the Prime Minister expects us to believe that. It is clear that the Prime Minister expects the House, her party and her fellow citizens to suspend all normal standards of belief and to accept that it is strange but true. "Truth," she said on television yesterday, "is often stranger than fiction." When we heard that, as when we heard her last Thursday, many of us wondered whether the Prime Minister had lost the ability to tell the difference between truth and fiction.
We want to know truthfully now exactly when the Prime Minister first knew of the decision to send the Solicitor-General's letter. We want to know truthfully now exactly when she first knew of the decision to leak the Solicitor-General's letter. We want to know now exactly when she first knew of the involvement of the then Secretary of State for Trade and Industry and her office in the conspiracy. When did she first know that he had given his authority, as she put it, and when they had given their cover, as she put it, to act in good faith—act in good faith by making a furtive phone call to the Press Association for the specific and carefully contrived purpose of discrediting another member of her Cabinet?
We know that the right hon. Lady has not answered those questions. She has admitted that herself. Any statement, she said yesterday, is almost always a basis for further questions. That may be the understatement of the Prime Minister's lifetime. [Interruption.] But all we have had so far are excuses for the omissions and evasions of last week—no apologies for not answering questions with meticulous accuracy; just attempted excuses. All we have had is the propaganda about "toughing it out"—a phrase, Mr. Speaker, which you will recall first entered the British vocabulary when it came out of Richard Nixon's office.
We are told that last Thursday the Prime Minister was sheltering the Secretary of State for Trade and Industry. The Home Secretary told Mr. Brian Walden yesterday—[Interruption.] They are going to hear it all, Mr.

649
Speaker—that he could feel the courage going through the Prime Minister when she made her statement, as the Home Secretary put it, "protecting Mr. Leon Brittan". That excuse has palpably gone because the late Secretary of State for Trade and Industry has gone, although, interestingly, he went not without resistance. Even when the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) wanted to do the right honourable thing and resign, the Prime Minister tried to talk him out of it and even invited him to apply for the next vacancy for "high office", as she put it.
But what of the Prime Minister's excuses for the omissions from last Thursday's statement and questions? [Interruption.] The Prime Minister said that the majority of the inquiry report—[Interruption.] Even the deliberate efforts, that will be heard by the nation, by Conservative Members to interrupt the House and to prevent someone from getting a fair hearing, will not stop the truth being heard. [Interruption.]
The Prime Minister said that the majority of the inquiry report was new to her. She said that, until the report was available, she did not have the full facts—what she called an "enormous number" of facts. As I listened to her then and to the Home Secretary yesterday, saying how much they wanted to be able to give the full facts, I began to think that it was the Government, not the Opposition, who had got the emergency debate today. [Interruption.]
The protest that there were just too many facts to be absorbed does not carry any weight at all. Of course, it is handy to have the full details for the historians—the dates, the times, the places, the footnotes. But only one fact was absolutely essential for the Prime Minister; one fact really mattered, and that was the fact that the Secretary of State for Trade and Industry and her office had conceived, organised and executed the leak. That was the fact which mattered and it was the fact which the right hon. Lady was forced to admit last Thursday. It was also the fact—the single salient fact—that the right hon. Lady was denied for over a fortnight.
Who were these people who decided to keep the right hon. Lady in the dark? Who were these merciless people who made the Prime Minister, in her innocent ignorance, go through the charade of the inquiry into the leak? [Interruption.]
Mr. George Foulkes: Do something about the giggling schoolgirls opposite.
Mr. Speaker: Order. I did not see anything going on.
Mr. Kinnock: Whatever anyone sees, the whole country will be able to hear what has been going on. Once again, Conservative Back Benchers have decided that, because they cannot take the truth, they will try to bury it. [Interruption.]
We want to know who were the people who prevented the Prime Minister from being able to gain access to the single fact about the involvement of the Secretary of State for Trade and Industry and her office in the decision to leak. Who were the cynics who let the Prime Minister be in the dark for 16 days? Who let her come here to tell truths so partial, so incomplete, that they began to look like untruths and who let her come to make a whole speech in this House on 15 January without telling her that they
650
knew who had leaked, how they had leaked and why they had leaked? Who were these callous people who caused the Prime Minister so many problems over the weeks?
Why, they were the Prime Minister's own Secretary of State for Trade and Industry and, strangest of all, her own office—the Prime Minister's very own office, her closest, most senior staff; her office which, in her own words, did not seek her agreement; her office, which, in her words,
"considered—and they were right—that I should agree with my right hon. Friend the Secretary of State for Trade and Industry".—[Official Report, 23 January 1986; Vol. 90, c. 450.]
That begs the question. If her office did not tell the Prime Minister, why did her office not tell the Prime Minister? There can be only two reasons. It was either because they did not want to tell the Prime Minister or because they did not think that there was a need to tell the Prime Minister. If they did not want her to be involved, that could be for only one reason—the simple, straightforward reason that they were doing wrong, that they knew that they were doing wrong and that they did not want the Prime Minister to be contaminated by the guilt.
Of course, it may be that they thought that the Prime Minister did not need to know about what was going on. They might have said to themselves, "There is no need to tell the Prime Minister. We know what her attitude is to Westland. We know her attitude to the turbulent Secretary of State for Defence. We know what her attitude is to his campaign and we know what her attitude would be to us using dirty tricks to defame and undermine the Secretary of State for Defence."
Were the people in the Prime Minister's office actually right about that? Do they really know the Prime Minister? Either they do know the Prime Minister and they think of her as a woman who would stoop to conquer, no matter how low, or they are totally mistaken and she is not the woman that they think.
From the Prime Minister's statement last Thursday it appears that they do not know the Prime Minister. We have the Prime Minister's own word for it. She told us that her office did know her well enough to guess accurately that she would agree to the attitude taken by the Secretary of State for Trade and Industry and that she did not and would not have consented, if she had been consulted, because she felt that there was a different way, a better way, to make the relevant details known.
Despite their years of close proximity and despite the deep mutual trust that has to exist between the Prime Minister and her office, it appears that they did not know the Prime Minister at all. There they were taking important decisions in her name—[Interruption.]
Hon. Members: Order.
Mr. Speaker: Order. May I say to the House that backchat does no credit to the House.
Hon. Members: It is deliberate.
Mr. Kinnock: Either they knew the Prime Minister or they did not know the Prime Minister. She says that they knew her well enough to understand that she agreed with the Secretary of State for Trade and Industry, but that, had she been consulted, she would have told them that there was a different way and a better way that must be found to make the relevant facts known.

651
That is all despite those years of close proximity and all that close contact. Despite all of that, there they were, taking important decisions for the Prime Minister as she busied herself yards away in Downing street.
They did not tell the Prime Minister, so we are told. All the time, they were outrageously miscalculating the Prime Minister's attitude towards the correct method of putting matters into the public domain. Having made that miscalculation, they then apparently compounded the fault by allowing her to set up an inquiry into a leak which they themselves had perpetrated.
They must have been wrong—practically wrong and terribly wrong; too wrong to enable them to endure in their present positions. At least that is what we would think. How can they continue to carry out the immense responsibilities and be the object of the Prime Minister's trust when they could be so terribly wrong, so we are told, about her attitude towards the way in which that information should be released.
If they are so wrong, why have they not gone? They have not gone, and they are not going. They are not going because the Prime Minister says that she has complete confidence in them. Why has she that confidence in them? Is it because the Prime Minister, who has the reputation for. being ruthless with those who fail her, has suddenly gone soft? It cannot be that. It must not be because of charity. Can it be because of complicity by the Prime Minister? Can it possibly be that the Prime Minister is not innocent but that she is implicated and involved?
For the moment, we withhold our judgment while we wait for the Prime Minister to give her account. Last Thursday, in reply to my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), the Prime Minister said that she hoped that we would have the decency to accept her version of events. We have the decency; what we lack is the gullibility to accept the Prime Minister's version of events.
We want the facts. We want them now. We want only the one version that will be believed—the truth, the whole truth and absolutely nothing but the truth. If the Prime Minister cannot tell that truth, she cannot stay. If she will not tell that truth, she must go.
4 pm
The Prime Minister (Mrs. Margaret Thatcher): Before I come to the wider aspects of this debate, let us recall one thing clearly: the background is the future of Westland and its work force. We have to remember that that future still hangs in the balance. The Government's position throughout has been that it is for the company itself to take decisions about the course to follow in the interests of the shareholders and the employees, but the Government are a major customer of the company and the Government's policies and intentions in that capacity are very relevant to the decisions that the company has to take.
It is therefore of the first importance that any pronouncements by the Government that might affect the company's decisions are accurate, consistent and in no way misleading. It is largely because one member of the Cabinet could not accept arrangements designed to secure the accuracy and consistency of Government statements that we are debating the whole matter today.
I propose to deal at once with some questions that have arisen since my statement of 23 January. I shall do so under three headings: first, the circumstances leading up
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to the letter of 6 January by my hon. and learned Friend the Solicitor-General; secondly, the reasons for having an inquiry; and, thirdly, the outcome of the inquiry.
First, I shall deal with the circumstances leading up to the Solicitor-General's letter. The House will recall that I had cleared my own letter of Wednesday 1 January to Sir John Cuckney with the Departments concerned and with my hon. and learned Friend the Solicitor-General, for the reasons I have already given.
On Friday 3 January, there was an exchange of letters between Mr. Horne of Lloyds merchant bank, representing the European consortium, and my right hon. Friend the then Secretary of State for Defence. In his letter, Mr. Horne asked for amplification of a statement in my letter to Sir John Cuckney. As the House knows, my right hon. Friend went into considerable detail in his reply. His letter had not been discussed with my office before it was sent, even though it dealt with points arisng from my letter to Sir John Cuckney.
On the following day, Saturday 4 January, I saw copies of the exchange of letters. In view of the very careful steps that I had taken to clear my letter to Sir John Cuckney with the Departments concerned and with the Solicitor-General, I made inquiries to find out whether the Defence Secretary's letter had been cleared in the same way with the Department of Trade and Industry and with the Law Officers. It had not. In view of the continuing need for accuracy and consistency in Government statements on this subject, I asked that a message be sent to my right hon. and learned Friend the then Secretary of State for Trade and Industry, as the sponsoring Minister for Westland, to suggest that he should ask the Solicitor-General to consider—[HON. MEMBERS: "Ah."]
Mr. Speaker: Order.
The Prime Minister: —the Defence Secretary's letter and give his opinion on whether it was accurate, and consistent with my own letter to Sir John Cuckney.
The Solicitor-General, on the basis of the evidence available to him, formed the provisional opinion that the Defence Secretary's letter contained material inaccuracies which needed to be corrected. This view was reported to me. The matter clearly could not be left there. I therefore, through my office, asked him to consider writing to the Defence Secretary to draw that opinion to his attention. I learned subsequently from the Solicitor-General that he spoke to the then Defence Secretary on the telephone that same evening and told him his provisional opinion about the letter and warned him that he would probably write to him on Monday 6 January, when he had checked the documents, and advise him to correct the inaccuracy.
The Solicitor-General further considered the documents on the morning of Monday 6 January. They confirmed him in his opinion. He therefore wrote to the Defence Secretary, advising him to write again to Mr. Home correcting the inaccuracies. My right hon. Friend the Member for Henley (Mr. Heseltine) has asked for the further exchanges between himself and the Law Officers to be published. I have arranged for copies of the correspondence to be placed in the Library of the House.
It has been said that the letter to Mr. Horne has not been corrected. So far as the Government are concerned, we made it clear to the company—in the letter to Sir John Cuckney of 13 January from the permanent secretary to the

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Ministry of Defence, a copy of which has also been placed in the Library of the House—that there was nothing to add to my letter to the company of 1 January.
Perhaps more to the point, my hon. Friend, the Minister of State for Defence Procurement made it clear, in his answer to the hon. Member for Yeovil (Mr. Ashdown) on 13 January, that the order for six additional Sea Kings would be placed if the plans for the five-nation battlefield helicopter project were approved, whichever reconstruction proposal Westland shareholders approved, and not—as my right hon. Friend had said—only if the European consortium proposals were accepted.
I explained to the House on 23 January how extracts from the Solicitor-General's letter were disclosed to the media on 6 January. I repeat that I deeply regret that this was done without reference to the Solicitor-General. Indeed, with hindsight, it is clear that this was one, and doubtless there were others, of a number of matters that could have been handled better, and that, too, I regret.
As I said to the House in 23 January, the company was informed also. There have been reports in the newspapers to the effect that that statement was wrong, and the company had not been informed. I understand that Sir John Cuckney's office has now confirmed that he did receive a call from the Department of Trade and Industry in the early part of that afternoon. The official in the Department of Trade and Industry concerned has again clearly confirmed that he made such a call, as he told the head of the Civil Service in his evidence to the inquiry.
As the full details of the disclosure only became known as a result of the inquiry which was subsequently instituted, I propose to deal next with the question why it was decided to hold such an inquiry.
Mr. Dennis Skinner: Will the Prime Minister give way?
The Prime Minister: I shall deal with these matters under the three headings I have given. On Tuesday 7 January—
Mr. Skinner: Will the Prime Minister give way?
Mr. Speaker: Order. The Prime Minister is not giving way.
The Prime Minister: On Tuesday 7 January, the day after the Solicitor-General's letter was disclosed, my right hon. and learned Friend the Attorney-General sought the view of the head of the Civil Service as to whether it would be appropriate for the Law Officers to seek a formal inquiry.
After discussions between the Attorney-General and the head of the Civil Service, my right hon. and learned Friend made clear his view that there should be an inquiry. The head of the Civil Service minuted me formally on Friday 10 January seeking my authority for the institution of such an inquiry. I readily gave him that authority. In fairness to everyone, it was essential to have a full and objective report on what had happened, and it was clearly desirable that all the officials concerned should be able to give their own full accounts of their part in what had occurred.
My authority was conveyed to the head of the Civil Service on Monday 13 January. The following day, I informed the House that an inquiry had been instituted. I had been asked by the Law Officers to institute such an
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inquiry. I was formally advised by the head of the Civil Service to do so. I had no doubt that it was right to set up the inquiry.
Indeed, on 7 January the hon. Member for Swansea, West (Mr. Williams) an Opposition Front Bench spokesman—
Mr. Mark Fisher rose—
The Prime Minister—wrote to me to ask that an inquiry should be set up so that—I quote:
"the full facts can be established".
Even so, some hon. Members opposite have subsequently criticised the decision to hold an inquiry.
Mr. Alan Williams: The Prime Minister said that she received a letter from me the day following the leak. Why on earth has she not told the House whether she knew the facts of the leak at the time that she received my letter?
The Prime Minister: I am dealing with the setting up of the inquiry—[HON. MEMBERS: "Answer."]—and I shall deal then with the outcome of the inquiry and what I did know and what I did not. I have in fact done it in what I believe is the best order.
If I had rejected the advice that I had received, if I had refused to hold a formal inquiry, the parties opposite would have had just cause to criticise me. I have no doubt that they would have done so. To be criticised when I agreed to an Opposition request to hold an inquiry is, to say the least, an unusual experience. The inquiry reported to me on 22 January.
In my statement to the House the following day, I set out the steps by which the Solicitor-General's letter of 6 January was made public, as this emerged both from the accounts of officials as reported by the inquiry and also from my subsequent discussions with the then Secretary of State for Trade and Industry, whom I should like in this House to thank for his years of devoted service.
Mr. Tam Dalyell rose—
The Prime Minister: I am not giving way. I am going on because I have a long speech to make, and I must get through it.
Mr. Dalyell: Will the Prime Minister give way?
The Prime Minister: It was the common purpose of all concerned that, at a time when difficult commercial judgments and decisions had to be made by the company, it was important that all pronouncements by the Government should be accurate, in no way misleading, and consistent with each other. [Interruption.]
Mr. Speaker: Order.
The Prime Minister: It followed from that that, if a statement was made which appeared to be inaccurate or misleading or inconsistent with other Government statements, then it was the duty of the Government to make sure that the record was corrected as soon as possible.
When the Solicitor-General's letter was brought to his attention, the Secretary of State for Trade and Industry took very much that view of the matter. He was clear that it was desirable to bring into the public domain as soon as possible the fact that the Solicitor-General had written to the then Defence Secretary, and the opinion he had expressed. The Secretary of State made it clear to his

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officials that, subject to the agreement of my office, he was giving authority for the disclosure to be made by his Department, if it was not made, as he said he would prefer, from 10 Downing street. That I indicated in my statement last week.
Mr. Dalyell: Will the Prime Minister give way?
The Prime Minister: This is a very tightly drafted argument and I should prefer to go on. I will give way later. Officials in the Department of Trade and Industry—
Mr. Dalyell rose—
Mr. Speaker: Order. I think that the Prime Minister said that she would give way later.
The Prime Minister: Officials in the Department of Trade and Industry—
Mr. Dalyell rose—
The Prime Minister: I shall give way to the hon. Gentleman later. I wish to continue this section.
Officials in the Department of Trade and Industry approached officials in my office, who made it clear that it was not intended to disclose the Solicitor-General's letter from 10 Downing street; but, being told that the Secretary of State for Trade and Industry had authorised the disclosure, they accepted that the Department of Trade and Industry should make it and they accepted the means by which it was proposed that the disclosure should be made.
My officials made it clear to the inquiry that they did not seek my agreement. They told the inquiry that they did not believe that they were being asked to give my authority, and they did not do so.
Mr. Bryan Gould rose—
Hon. Members: Who?
Mr. Speaker: Order.
The Prime Minister: If they had believed—
Mr. Dalyell rose—
The Prime Minister: If they had believed my authority was being sought, they would certainly have consulted me.
Mr. Dalyell rose—
The Prime Minister: No, not at the moment. This is very important. [HON. MEMBERS: "Hear, hear."]
Officials of the Department of Trade and Industry told the inquiry that they regarded the purpose of their approach to my officials as being to seek agreement to the disclosure as well as to the method. They believed that they had the agreement of my office, and acted in good faith, in the knowledge that they had authority from their Secretary of State and cover from my office.
Mr. Dalyell: Will the Prime Minister allow me?
Mr. Kinnock rose—
The Prime Minister: No, I must go on at this moment. This is vitally important.
Although, clearly, neither side realised it at the time, there was a genuine difference in understanding between officials as to exactly what was being sought and what was being given. [Interruption.]
Mr. Dalyell rose—
The Prime Minister: I have given the House the view of what officials on each side told the inquiry. That is one reason why it was vital to set up the inquiry.
Mr. Dalyell rose—
The Prime Minister: As I indicated, officials too had the right to put their view of their part of what had occurred. I deeply resent any attacks upon them.
Mr. Dalyell rose—
Mr. Speaker: Order.
Mr. Dalyell: Will the Prime Minister—
Mr. Speaker: No. The hon. Member knows that the Prime Minister said that she would give way later. He must not keep on rising.
The Prime Minister: But it is common ground. as I told the House on 23 January—it was accepted—that the Department of Trade and Industry should disclose the fact that the then Defence Secretary's letter of 3 January was thought by the Solicitor-General to contain material inaccuracies which needed to be corrected, and that, in view of the urgency of the matter, the disclosure should be made in the way that it was. I have given the House this account—
Mr. Dalyell rose—
The Prime Minister—of the accounts which were given to the inquiry.
Mr. Dalyell rose—
Mr. Kinnock rose—
The Prime Minister: I give way to the hon. Gentleman who has been rising, and to whom I promised to give way.
Mr. Dalyell: What are we to derive from the right hon. Lady's answer to the friendly intervention of her hon. Friend the Member for Woking (Mr. Onslow), the chairman of the 1922 Committee, in relation to putting it in the public domain, when she said:
"I gave my consent." —[Official Report, 23 January 1986; Vol. 90, c. 455.]
What interpretation is to be put on that?
The Prime Minister: I gave my consent to an inquiry, I co-operated with it and I set out the facts as fully as possible, in that statement. I noticed that I had said that. at that particular time. I did not give my consent to the disclosure. It was not sought and I have indicated that I deeply regret the manner in which it was made.
Mr. Stuart Bell rose—
Mr. Tony Banks rose—
Mr. Kinnock: I am grateful to the Prime Minister. Will she tell us what conceivable misunderstanding between the Department of Trade and Industry and her office could permit them to breach the Official Secrets Act and, in the words of the Solicitor-General, "immediately and flagrantly" to violate an important rule without any form of consultation with her as head of the Government. Will she now tell us when she knew?
The Prime Minister: I have just set out —[HON. MEMBERS: "No."] I have just in fact set out what my officials believed and what the Department of Trade and industry's officials believed. The right hon. Gentleman

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will not accept that there was a genuine difference of understanding, which is something that happens almost every day in normal life, and he tries to deny it. Officials, too, have the right to be heard and not automatically be castigated by the other side. In answer to the question which I think hon. Members will be asking, I did not myself know about the disclosure of the Solicitor-General's letter until some hours after it had occurred. [Interruption.] Right hon. and hon. Gentlemen have been asking for the facts, and I am giving them. I have taken immense trouble to have them checked. I discussed the matter with my office the following day, when I also learned of the Law Officers' concern. I was told that the Solicitor-General's advice had not been disclosed by my office.
Mr. Skinner: Why have an inquiry then?
The Prime Minister: I was also told, in general terms, that there had been contacts between my office and the Department of Trade and Industry. I did not know about the then Secretary of State for Trade and Industry's own role in the matter of the disclosure until the inquiry had reported. [Interruption.]
Mr. Michael Foot rose—
Mr. Speaker: Order.
The Prime Minister: Hon. Gentlemen have asked me for the facts.
Mr. Speaker: Order. The Prime Minister is not giving way.
The Prime Minister: Let me finish this section and them I will give way.
The difference of understanding between officials in my office and those in the Department of Trade and Industry only emerged after the inquiry had started.
Mr. Foot: Is the Prime Minister telling us that, from the day after the leak, on 6 or 7 January, right up until after the inquiry had reported, her right hon. and learned Friend the then Secretary of State for Trade and Industry did not make any effort whatsoever to tell her how he had authorised the inquiry—[HON. MEMBERS: "Leak."]—authorised the leak? If so, does she think that such a Member is fit to be in any Cabinet, let alone hers?
The Prime Minister: I have indicated what the facts are and I have indicated the high regard in which I hold my right hon. and learned Friend the then Secretary of State for Trade and Industry. [Interruption.]
Mr. Speaker: Order.
The Prime Minister: I have given the answers after strenuous efforts to check them with the officials concerned and with the Departments concerned.
The Government's policy throughout has been to help Westland to seek the solution which would enable the company to continue in business as a private sector concern. It is this Government who fought to help it get the Indian order; it is this Government who undertook to write off nearly £40 million of launch aid if the W30 project was terminated; it is this Government who ensured that the board of Westland had a choice of options; and it is this Government who have pledged themselves to
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resist discrimination against Westland in Europe, whichever option for its future it chooses. This was, and is, the right policy.
But from the Opposition we have heard nothing constructive. Oh yes, in the debate on 15 January, they offered the company their own two options. But what were they—nationalisation, or receivership.
The fact is that the Opposition parties, with the exceptions of the hon. Members for Yeovil and for Isle of Wight (Mr. Ross) are exploiting Westland and its employees, exploiting them for nothing more than their own narrow political advantage. It was the right hon. Gentleman the leader of the Labour party who told his party conference, and I quote:
"you cannot play politics with people's jobs … they have no time for such posturing".
[Interruption.] Yet that is precisely what he has been doing and has done again today.
Mr. Kinnock rose—
Hon. Members: Give way.
The Prime Minister: Let me tell hon. Members the real reason for this debate. It is not because of the Opposition's concern for Westland and its employees; until today they have said precious little about them. It is not because of their passionate belief in the defence of the realm; their policies would leave us defenceless.
Mr. Kinnock: Let me remind the right hon. Lady of the "real reason" as she put it, for the debate. It is to find out the truth. The House is not satisfied, and the country will not be satisfied, that she has given us the full details. I ask the right hon. Lady again—when, truly, did she know? Can she expect us to believe that her office did not tell her when it knew? Can she expect us to believe that she was neither told by the Secretary of State for Trade and Industry nor did she ask the Secretary of State for Trade and Industry exactly what was going on?
The Prime Minister: What the right hon. Gentleman cannot stand is that I have given him the facts and he does not like them.
Hon. Members: No.
Hon. Members: Yes.
The Prime Minister: The Opposition have deliberately blown up this issue out of all proportion. This debate is part of a massive diversionary tactic by the Opposition. They would like first to divert public attention from the growing extremism of their own party—as we have all seen so unmistakably in Liverpool, Lambeth and Tottenham—and secondly, to divert us from vigorously pursuing our policies and plans for our country's future.
We are not going to be diverted from the tasks we were elected to carry out. We shall gather with renewed strength—[Interruption.]—to extend freedom and ownership, to give power back to the people and to keep our country strong and secure.
4.28 pm
Dr. David Owen: I believe that the Prime Minister, in retrospect, will wish that she had not made the latter part of her speech, because, whatever the House wants to hear today, it does not want a party political—[Interruption.] What the House

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wanted from the Prime Minister—and, wherever the jeers come from, what both sides of the House wanted—was the truth from the Prime Minister.
Some new facts have been disclosed, which are of considerable importance. The Prime Minister told the House that she drew the attention of the then Secretary of State for Trade and Industry to the letter that had been written by the then Secretary of State for Defence and suggested that he should ask the Solicitor-General to see whether there were any inaccuracies. She told us that she did that on 4 January. She has further told us that she knew on 4 January, before the Solicitor-General rang up the then Secretary of State for Defence, that there were, on a provisional look at the documents, material inaccuracies, but that the hon. and learned Gentleman would write to the then Secretary of State for Defence on 6 January. So the Prime Minister, on Saturday, Sunday and Monday before 1.30, when the letter from the Solicitor-General arrived at her office, knew that it was highly probable that there would be material inaccuracies, in the view of the Solicitor-General, in the letter of the then Secretary of State for Defence.
The question that the Prime Minister has not answered is what conversations took place with her private office between her and Mr. Ingham and her principal private secretary, Mr. Powell, about what should be done if those material inaccuracies, provisionally thought by the Solicitor-General to have occurred, were confirmed in the letter that she was warned would be distributed on the Monday. I must say to the Prime Minister that it is not unreasonable to believe that she would have discussed that with those two individuals or at least one individual. It is a reasonable assumption that it was in the knowledge of how she reacted to the whole series of events that they felt confident to give the cover that she herself claimed in her statement—[Interruption.] I do not know. I am merely pointing out a major gap in the Prime Minister's account.
I ask the Prime Minister now to clear that up and to tell the House. Did the right hon. Lady discuss the issue with Mr. Ingham and Mr. Powell on the Saturday evening, the Sunday or the Monday morning? Did you, Prime Minister? [HON. MEMBERS: "Order."] That is the question that we are entitled to ask. I do not believe that it will be understandable to those who have worked in the Government machine that those two senior officials could have given the cover when asked by the Secretary of State for Trade and Industry.
The decision to leak a document written by a Law Officer is a very serious decision. There is a strict understanding within the Government that the advice of the Law Officers is never referred to. It is only ever disclosed in very exceptional circumstances by the Law Officers themselves. The last occasion was when the Attorney-General released his opinion in 1982 on the Greater London council. A further issue arose when Attorney-General and Solicitors-General in successive Governments issued their views on the Simonstown agreement. It is a strict convention, which would have been known by Mr. Powell, and ought to have been known by Mr. Ingham, that under no circumstances did anyone, certainly not those senior officials, reveal the Law Officers' advice. This is not some minor leak. This is not a question of inter-party strife. It is not an argument between the Prime Minister and her then Secretary of State
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for Defence. It goes to the core of the Government and their integrity in relation to the position of the Law Officers.
I must say to the Prime Minister that I find it very hard to believe that Mr. Powell, who was a diplomat and who is now on secondment to No. 10 Downing street, a person of outstanding integrity, would have agreed to the Department of Trade and Industry disclosing that information unless he had a pretty clear view of how the Prime Minister wanted the matter to be dealt with. The Prime Minister owes it to the country to say what discussions she had with Mr. Ingham and/or Mr. Powell.
I gather from the Prime Minister's silence that she will not tell us. If she winds up the debate, as I hope she will, I hope that she will answer that question. If she does not do so, the question will remain. If she does not do so, if she allows it to be assumed that those officials made that decision on 6 January without reference to her, there is no question what has to happen now. It is not just that the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) resigned because he obviously felt that he had lost the confidence of his colleagues. As a lawyer, he must have understood the significance of the decision that he took to authorise his Department to allow the Solicitor-General's letter to be partially leaked.
But it must be the case that both Mr. Ingham and Mr. Powell will certainly be now subjected to the normal disciplinary procedures that cover civil servants and members of the diplomatic service. It is inconceivable that they can continue to advise the Prime Minister. That demand must be made. Mr. Ingham is paid as a civil servant. Mr. Powell is a diplomat. They are governed by rules and regulations that cover all officials of all Governments. At the core of this issue is an issue that has been causing concern for some time—the integrity of the Civil Service. There is one person who is responsible for that now. That person is the Cabinet Secretary.
I refer to the Solicitor-General's letter. The Prime Minister said that it was essential that the full facts were given. The Solicitor-General's letter, written on 7 January and now in the Library, reveals that the letter of the Secretary of State for Defence did not contain the material. inaccuracies that he had originally thought. He says:
"The additional evidential material on which you rely, and in particular the conversations with your European colleagues to which you have referred, is identified to me in your letter in terms too general for me to be able personally to assess whether the accuracy test is fulfilled. I quite understand why this may be unavoidable, particularly in the case of the conversations with your European colleagues, but it means that the judgment as to whether that test is satisfied must remain your own responsibility."
Therefore, at the end of the day, the Solicitor-General's interference has not made any material difference to the Defence Secretary's case.
However, I should like to quote the most damning part of the Solicitor-General's letter:
"I want to express my dismay that a letter containing confidential legal advice from a Law Officer to one of his colleagues should have been leaked, and apparently leaked moreover in a highly selective way. Quite apart from the breach of confidentiality that is involved, the rule is very clearly established that even the fact that the Law Officers have tendered advice in a particular case may not be disclosed without their consent, let alone the content of such advice. It is plain that in this instance this important rule was immediately and flagrantly violated."
What does that say for the competence of the Prime Minister, and the competence of the Government?

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The fact of the matter is that the issue now rests on the Prime Minister's competence and the competence of her private office, and the degree of trust and honour in her private office. It is not often realised that the Prime Minister's principal private secretary has his desk as close to the Prime Minister sitting in No. 10 in the Cabinet Room as you are to me, Mr. Speaker. It is extraordinary that throughout this period, from the moment when the Prime Minister admits that she talked to her officials on 7 January, she did not ask them point blank what the view of the right hon. and learned Member for Richmond, Yorks was. The Prime Minister tells us that she did not know about the view taken by the right hon. and learned Member for Richmond, Yorks over this disclosure until she read the Cabinet Secretary's report.
That says a lot for the Prime Minister's diligence and attention to detail. It is inconceivable that the Prime Minister did not ask what the right hon. and learned Gentleman's attitude was. It is almost as inconceivable that he did not tell her what his attitude was.
It is extraordinary that we are asked to believe that there was a difference of opinion between the Department of Trade and Industry officials and Mr. Bernard Ingham as to whether or not this should be considered to be an authorisation from No. 10. Mr. Bernard Ingham has ruled the Government's press information with a rod of iron for nearly seven years. His role is more dominant in the Government's information service than that of any Prime Minister's press secretary this century. It is extraordinary that the lady concerned in the Department of Trade and Industry, when going to Mr. Ingham, should now be told that he was not giving her No. 10's authority. Frankly, no one who has seen the way that Mr. Ingham has operated or the way the lobby system has been manipulated and twisted over the past few years can possibly believe that this mild, insignificant, modest, quiet and unassuming Yorkshireman did not give his authority to that lady in the Department of Trade and Industry.
The Prime Minister has achieved what I think in retrospect she may most regret. She does not regret the passing of the Secretary of State for Defence, although I believe that she genuinely regrets the passing of the right hon. and learned Member for Richmond, Yorks. By not admitting that she, by her general demeanour and general standing, gave a steer and guidance to Mr. Ingham and Mr. Powell, she has left those two men with no alternative other than to resign. It is a sad commentary upon the Prime Minister's integrity that the only way that the integrity of the Civil Service can be maintained is for those men to take the honourable course and resign.
The Prime Minister must have hoped that this debate would end this whole affair. I fear, Mr. Speaker, that it will not. The Prime Minister has revealed both today and in former days that she is not worthy to hold the high office that she does.
4.42 pm
Mr. Michael Heseltine: I had not originally intended to take part in this further debate, and I shall not keep the House for more than a few moments. There are only one or two aspects on which perhaps I may be allowed to comment.
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I should like to place it on record that I believe that from start to finish in this entire matter the behaviour of my hon. and learned Friend the Solicitor-General was exemplary.
I listened with great care, as did all my right hon. and hon. Friends, to what my right hon. Friend the Prime Minister had to say. The House will realise that for me, as well as for many right hon. and hon. Members, my right hon. Friend's speech filled in a great deal of the background that we could not have known about before. I heard the Prime Minister clearly say that she deeply regretted the fact that the letter from my hon. and learned Friend the Solicitor-General had been leaked. She went on to say that a number of other matters could have been better handled, and she regretted that, too. I think that that is a difficult and a very brave thing for a Prime Minister to say in such circumstances. I could not have asked for words other than those that my right hon. Friend the Prime Minister used.
For my part, I would say that in the circumstances, where colleagues in a Government feel strongly, as undoubtedly my right hon. Friend the Prime Minister and my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) did—I know that they will respect my position and feelings just as strongly, though perhaps from a different point of view—it is understandable that sometimes the atmosphere and decisions are not always all as we would wish them to be. I have no doubt that things that I did are open to criticism, and I accept a responsibility for that.
There are two issues on the substance of the Westland affair. The first concerns the future of the company and its effective control. As the House knows, I hold very strong views about our strategic defence interests, and I argue that Westland should remain part of the British and European Community industrial base. I shall seek to do everything that I personally can do to ensure that that is maintained.
The other issue concerns the politics of the matter. I believe that what the Prime Minister has said today brings the politics of this matter to an end and that any further questions that are to be asked will properly be asked by the all-party Select Committee.
Mr. Skinner: Who is after votes now?
Mr. Heseltine: I can answer that question, characteristically delivered from a sedentary position. The reason why the Tory party is after votes is because we have heard the speech of the Leader of the Opposition. If there are men born for whom the highest attainment is to remain Leader of her Majesty's Opposition, the Leader of the Opposition is such a man. I do not believe that the House has listened in a decade to a worse parliamentary performance than the one we heard today. Of course it is the constitutional duty of the Opposition to exploit a Government's difficulties, but they cannot even make a decent job of that.
In what has been a difficult and stressful experience for the Conservative party, let us understand clearly where we stand tonight. We shall be in the Lobby together with one purpose —to maintain a Tory party in power in this country and to keep the Labour party out.
4.48 pm
Mr. Michael Foot: After the intervention of the right hon. Member for Henley (Mr.

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Heseltine) I had a momentary twinge of sympathy for the Cabinet and what they might have suffered, but the twinge passed. As the right hon. Gentleman spoke, I was reminded of a comment made by a far greater figure, as I am sure that the right hon. Gentleman will agree—Sir Winston Churchill, who did change parties occasionally—who said, "It's all right to rat, but you can't re-rat."
Sir Peter Tapsell: The point about Sir Winston Churchill is that he did re-rat.
Mr. Foot: I accept the correction. I will watch the future career of the right hon. Member for Henley with that in mind. At present, however, we have far more important matters to consider than the right hon. Gentleman's future.
I listened to the Prime Minister's speech with great care, as it was an extremely important speech in the history of this Parliament and of her own life, but I must say that she did not answer many of the questions that had been put. Those questions will continue to be put until we get answers to them.
This debate and the events to which it relates turn on questions of confidentiality or, as the Prime Minister insisted in yesterday's interview—and I agree with her—collective Cabinet responsibility and its implications.
Let us go back, first, to 14 January—the Tuesday after the House came back from the recess—when the right hon. Lady referred to these matters in her replies. We were then discussing the letter from the head of British Aerospace. On that occasion, the right hon. Lady was extremely insistent on a very important matter. She said:
"As the hon. Gentleman is aware from answers that have been given many times by me, it is my practice not to publish exchanges with third parties, nor to reveal them if they are marked 'Private and strictly confidential.'"
In later emphasis on the matter, she said:
"With respect, I think that I have probably answered this question several times, but let me repeat the reply. The letter was marked 'Private and strictly confidential.' It is my invariable practice not to reveal publicly such correspondence without the permission of its author."—[Official Report, 14 January 1986; Vol. 89, c. 920-22.]
We are therefore partly examining how that invariable practice came to be varied in this instance.
The then Secretary of State for Trade and Industry also emphasised this matter in his replies the previous day. He said:
"As for saying that the letter was marked 'Strictly private and confidential', the right hon. and learned Gentleman should be well aware that in matters of this kind it is the existence of the letter as much as its contents that is strictly private and confidential and that the confidentiality is one imparted by the author of the letter and no one else."—[Official Report, 13 January 1986; Vol. 89, c. 873.]
I agree with both those statements. Leaving aside the part of the Prime Minister, the Secretary of State for Trade and Industry made that statement to the House on 13 January. Yet on 6 January he had authorised the leakage of a confidential document without any reference to the author and, as has already been stressed, in circumstances of particular embarrassment and difficulty — even constitutional difficulty—because it was a letter from the Law Officers. It is barely credible that a Minister who could make that statement to the House on the afternnon of 13 January should have been guilty only a few days previously of such a departure from the "invariable practice" described by the Prime Minister. It is equally incredible that, after such conduct and after the Prime Minister had insisted on the strength of her commitment to that doctrine, the right hon. Lady should be so eager to
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keep in her Cabinet a Minister guilty of such behaviour, especially in the light of the few revelations that she has made today.
The Prime Minister has contributed something today, in that she has stressed how much she knew about this on the previous Friday and Saturday, which makes the admission of her finding out on the Monday or the Tuesday all the more remarkable. Even more remarkable is the failure of her own Cabinet Minister to tell her on that Monday or Tuesday.
I shall come in a moment to the confusion—if that is the correct word—in the Prime Minister's own office. What is the situation that the country is asked to believe? Is it that from the Monday or Tuesday of the leakage right up to the time when the Prime Minister received the report — a period when many Opposition Members were putting pertinent questions to the Secretary of State and others and receiving evasive answers — the Prime Minister with all her determination to settle these matters did not even inquire what had happened?
Why was the Prime Minister so reticent? She is not normally guilty of that. I am not talking about civil servants, but about relations within the Cabinet. Why did she not ask the Secretary of State for Trade and Industry to come along and tell her? He was quite an obedient member of the Cabinet and I dare say that if asked politely he would have been good enough to come along and explain. Was the Prime Minister not even curious, let alone probing? Did she not want to discover what had happened? Or was she so obsessed with all these other questions that she did not even trouble to ask what had happened?
When she eventually set up the inquiry—it was a bit late and some of us had assumed that it would be set up straight away — did the Prime Minister have no discussions with the Minister concerned? Is she really asking us to believe that she set up the inquiry without troubling to ask the Minister concerned what he thought about any part of it? She was treating the Minister as the Minister was treating the Law Officers, and we cannot have that. It is an extraordinary tale. For the Prime Minister's own peace of mind, I wish that she had been able to say a little more than that, because that gap will remain. I thought that she would try to answer it today, but she has not done so. She has merely said that she would have been in difficulties if she had not agreed to an inquiry.
Mr. D. N. Campbell-Savours: Mayhew knows the truth. He was used.
Mr. Foot: If only the Prime Minister had talked to the Secretary of State for Trade and Industry and got the truth from him—assuming that that honourable Minister was prepared to tell her—she could have come to the House and told us. She could have said that the honourable Minister whom she always wished to keep in her Cabinet and whom she would always wish to have back in her Cabinet would never mislead her and had told her what had happened. In fact, he kept his mouth shut, or she kept her ears shut, all through that period.
That is an intolerable way for the Prime Minister to treat the House. She should have spoken to us much earlier. She should have been here on 13 January and on other occasions when the music was going against her. Had she done so, she might have avoided the terrible catastrophe that has befallen her and the Government.

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The right hon. Member for Henley said the other day that there was a constitutional crisis—a breach in the constitution—although he seems to have got over that pretty quickly. I never thought that it was a breach of the constitution. To me, it is a matter of common decency and plain speaking. It is a matter of coming to the House of Commons and telling the House the truth. It is a matter of coming to this House of Commons and telling the truth.
Mr. Campbell-Savours: Mayhew knows the truth.
Mr. Foot: It is a matter of the proper and essential relationship between the Prime Minster and the House of Commons, and through this House of Commons with the country at large. The right hon. Lady has gravely injured this. The reason for this is the atmosphere that is spread throughout her Government and her Cabinet. That atmosphere helps to determine the way decisions are made. It is a strange atmosphere. It is an atmosphere where, to take a practical example, the right hon. Members for Cambridgeshire, South-East (Mr. Pym), for Chelmsford (Mr. St. John-Stevas), for Chesham and Amersham (Sir I. Gilmour) and for Waveney (Mr. Prior) and other hon. and right hon. Gentlemen are choked and stifled.
The other day, the chairman of the Conservative Party gave his advice on this matter; he has been brought forward to purify the atmosphere. Nothing like this would have happened had he been here—he would have eaten the two ex-Cabinet Ministers for breakfast to satisfy his appetite for lowering the standard of politics.
The reason why the Prime Minister is quite prepared to apply one rule of confidentiality to one lot and another rule of confidentiality to another lot — even though it includes her own Law Officers—is because she works on the principle, "Is he one of us?" She operates with those who are "one of us" and that is the way that this Government has been run and this country has been debased.
Mr. Robert Atkins: Absolute humbug.
Mr. Foot: I heard the Prime Minister yesterday, as others did. The right hon. Lady talked of the time when she would depart. When she departs—I would prefer it, of course, if the decision was made by this House or the country, as it eventually will be made—what will be written on the right hon. Lady's heart but the shabby prevarications and the collective deceits of these past few weeks?
5.2 pm
Sir Peter Hordern: I do not think that I have ever heard three more miserable speeches from the Opposition on a major occasion such as this. During the speech of the right hon. Gentleman the Member for Islwyn (Mr. Kinnock) one could notice the dismay of his supporters at the performance that he gave.
I never thought that the right hon. Member for Blaenau Gwent (Mr. Foot) would sound like a pedantic lawyer.
The right hon. Member for Plymouth, Devonport (Dr. Owen) said on television yesterday that my right hon. Friend the Prime Minister had lied, but now, having heard the full explanation, he is forced to say that she did not attend sufficiently to detail with her customary diligence.
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What a climb down that is. It is as though 300 people had turned up for a works outing to the circus, only to find that the circus had moved on to the next town.
The truth is that this whole affair has been an enormous fuss about very little. There should never have been the excitement that has been generated, and I hope that excitement will die down. I am sure it will.
The sad thing is that two of my right hon. Friends for whom I have a high regard are no longer in the Cabinet. I much regret that my right hon. Friend the Member for Henley (Mr. Heseltine) is no longer in the Cabinet, especially after the performance that he gave today. I also especially regret that my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) is no longer in the Cabinet. Although I do not know him well, I think he is one of the most brilliant members of our party; and I hope and trust that it will not be long before he is returned to high office. I do not think that he has every gift in politics. It must be said that he is somewhat deficient in the art—perhaps it should be described as the craft—of political skulduggery. Launching my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) as a missile, at one stage in this business, to appear on the Robin Day programme was not an ideal choice for that occasion.
I hope that the Opposition are not trying to pretend that leaks are solely the property of this Government. Nobody leaked as much as the previous Labour Government. On one occasion, according to Mrs. Castle, Lord Wilson—who constantly complained about the number of leaks occurring—was told by Tony Crosland:
"But I must point out that there is evidence that these leaks are coming from the most senior members of the Cabinet."
The criticism of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) is especially rich, as Mrs. Castle continues:
"Harold will not have Hattersley because he is said to have made three disloyal remarks recently. Dick and I agree that this is absurd because, although we do not think that Hattersley is a particularly nice man, we know he will make disloyal remarks about anyone, including Roy Jenkins."
It is my no means unique for Cabinet Ministers to make disobliging remarks about each other. I only wish there were not so many people ready and willing to take these remarks down. This weekend I read that there were no fewer than 1,000 information officers in Whitehall. What do those ladies and gentleman do? I believe I am right that in the days when Lord Attlee was Prime Minister, he only had one information officer and he was placed in a dark room with no means of communication whatever. That is a system which appeals to me far more than the present one of countless information officers giving information to anyone who will listen. It breeds leaks, and eventually it breeds disrespect for the Government.
Mr. Simon Hughes: The hon. Gentleman has tried to excuse leaks. Does he or does he not agree with his hon. and learned Friend the Solicitor-General that the leak of a Law Officer's private and confidential advice to the Government is in quite a different category and inexcusable?
Sir Peter Hordern: My position is that I am against all leaks, whether they come from the Solicitor-General's letter or not.
Something must be done about this system of information officers and leaks. I know that successive Governments have wished to do this for a long time. It

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would be worth considering placing Mr. Ingham in a somewhat different position so that he may make attributable statements on the record. This is the system in the United States where Mr. Larry Speaks is the President's spokesman. I also believe that we should look again at section 2 of the Official Secrets Act.
Mr. Harry Greenway rose—
Sir Peter Hordern: If my hon. Friend will forgive me, I wish to be brief.
What was all this fuss about? It was about a small company the size of a moderate London hotel. We are asked to believe that Sikorsky, the vanguard of American technology, was about to destroy and take over all technology in western Europe. That is no new charge. It is one which Servan-Schreiber made many years ago. In White Papers it has been a constant theme that we ought to have more co-operation between our defence companies within western Europe. Yet, year after year, very little is accomplished. It is true that my right hon. Friend the Member for Henley succeeded with the European fighter aircraft. However, it remains the case that there are large overlaps in guns, tanks and electronics in western Europe.
Examination of Government expenditure on research and development reveals how much goes on defence rather than on other forms of science and technology. Bearing in mind the orders that are placed, we must ask whether defence expenditure is geared too much to help defence contractors, such as Marconi and Aerospatiale, and sometimes to great waste. I need remind the House only of Nimrod in that context. It resulted in vast over-expenditure compared with the original proposals.
However, it must be the first duty of any Secretary of State for Defence to buy the best equipment for our forces. In many cases, such equipment is American. If we concentrate our purchasing power more on western European firms, we must ask whether those firms have the desired capacity. Too often the Americans have the only available technology.
Westland was in great difficulty as long ago as last July. I understand that Sir John Cuckney saw my right hon. Friend the Member for Henley last September and asked for help. I believe that my right hon. Friend said that there would be no public money, and certainly not from his Department, and that Westland would have to help itself if it could, and that it might even be preferable if it went into receivership. There was not much enthusiasm last September for the European option. My right hon. Friend might have shown his enthusiasm a little earlier. If he had, we should not have got ourselves into the present trouble.
Substantial questions about Westland remain. Of course the European option must be considered seriously, but Westland knows that two of the helicopter companies involved are loss-making. Agusta's losses are larger than its turnover, which is quite an achievement. The interests of Westland workers are extremely important. They must be allowed to express a preference for the Sikorsky deal, which would give them access to wider technology and other developments. It has looked too often recently as though the efforts of the European consortium have been designed to block the Sikorsky—Fiat rescue bid.
As for Cabinet responsibility, I suppose that my right hon. Friend the Prime Minister could have sacked my right hon. Friend the Member for Henley earlier. Perhaps she
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did not think that the Westland affair warranted such action, but it was clear that my right hon. Friend the Member for Henley thought that the Westland affair warranted action. I think that my right hon. Friend the Prime Minister has been far too kind. Indeed, I believe that she does not get her way nearly enough. We have a broadly based Cabinet, and I do not think that she gets her way nearly as much as she would like.
It is right for the Cabinet to be broadly based and to take in representatives from each section of the party. I am sure that the same has been true of other Cabinets. They include the Right and Left of a party—although they are now called wet and dry. Half of the Cabinet are most charming and likeable people who are economically illiterate and the other half are economically literate. That structure explains the leaks and counter-leaks. It is no good blaming my right hon. Friend the Prime Minister for them. The issue was not important, and it is not important now. We all have very much better things to do.
It is extraordinary for the Opposition to pretend to great moral indignation. The Labour party has developed leaks into an art form. Under Labour we had something more akin to waterfalls than leaks, of every variety. Those who enjoy the fraternal bonds of Socialism show that they like nothing more than hating each other's guts. I am reminded of Lord Wilson's kitchen cabinet. I miss those leaks. Where now the stories of lavender writing paper or glasses of wine thrown over the right hon. Member for Manchester, Gorton (Mr. Kaufman)?
There were not just leaks. The Labour party went in for something much worse. My right hon. Friend the Member for Henley is said to be impulsive on occasion. I remember when once he went so far as to pick up the Mace. The House might not remember what occasioned his picking up the Mace. I remember it well. It was in May 1976. The House debated the Aircraft and Shipbuilding Industries Bill, and the Labour Government lost the Division. The next Division was called and the Labour party either sent somebody through the Division Lobby twice or allowed somebody who had been paired to vote. [HON. MEMBERS: "They cheated."] I shall not go so far as to say that they cheated, as that is an unparliamentary expression, but I have described what happened. There was none of this trifling business about leaks and counter-leaks, for the Labour party went in for something much rougher.
In 1969, the Labour party thought that it might get another 30 seats by holding up the Boundary Commission recommendations. The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) laid the orders in the House—he was then Home Secretary—and tried to get his party to vote them down.
Mr. James Callaghan: With respect, I did not try. I succeeded in getting them voted down.
Sir Peter Hordern: The right hon. Gentleman is correct. He laid the orders and got the vote. Mrs. Castle had something to say about that. That was the Attorney-General's advice at the time. The Home Secretary had merely to lay the orders, not to approve them. Mrs. Castle said:
"Everyone seemed to think this was a very ingenious solution though I am unhappy at the political morality of it. Not that I have any qualms at all about our holding up the redistribution."
So much for morality.
Sir John Biggs-Davison: I am not sure that my hon. Friend is quite right. He said that the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) held up the recommendations. The right hon. Gentleman was selective; he did not hold them all up.
Sir Peter Hordern: I am sure that that is right.
Mr. James Wallace: On a point of Order, Mr. Speaker. Is it in order to debate the Boundary Commission's recommendations for 1969 during a debate on Westland plc?
Mr. Speaker: The hon. Gentleman knows that this is a debate on the Adjournment. There is however a specific definite subject and I think that the hon. Member for Horsham (Sir P. Hordern) is making a comparison.
Sir Peter Hordern: The Opposition do not have a leg to stand on. It beats me how they can have the nerve to come here and preach to us about morality. There are great issues to be dealt with. The price of oil is falling, there is strain on sterling, the level of unemployment is serious and the teachers' dispute continues. The Opposition have a heaven-sent opportunity to conceal the divisions in their ranks. I do not believe that people are such fools as to think other than that this petty, ridiculous issue has had a long enough run. It is time to get back to the serious business of running the country.
5.19 pm
Mr. Nigel Spearing: This debate might be called, "No, Prime Minister", because it is about the relationship between those who hold high office and those who act on their behalf. On occasions, we are very amused by the scene of servants becoming the master.
I have had some previous experience of the mind of the Prime Minister, and I pray in aid two examples. The first concerns a statement made by her Government on 23 April 1982. It was for international consumption and was not given to this House or put in the Library until three weeks later. Reference is made to that in paragraph 3.28 of House of Commons paper 11/84.
The second example relates to a question that I put to the Prime Minister on 17 July 1984 — column 168 of Hansard—about the implementation of the Education Act 1944. Subsequent correspondence is in the Library, to which hon. Members can refer.
The question today is who gave authority for the release of the selected parts of the text of this important letter. Last Thursday, the House heard with enormous surprise—perhaps oiled by previous revelations in the press—that it was the former Secretary of State for Trade and Industry himself who gave that permission. He is a lawyer, as we were reminded earlier today, and he gave permission to reveal in public the confidential advice of a Law Officer of the Crown. We now want to know whether the Prime Minister absolutely, tacitly or in effect shared in that decision, and we must not forget that she is also a lawyer.
The phrase "cover from No. 10" has been used, and in last Thursday's debate I asked the right hon. Lady specifically in column 459 of Hansard to whom Mr. Ingham was accountable and who decided his standing orders. Instead of saying what almost everyone would have expected her to say — indeed, the nation might have expected her to say—the Prime Minister did not
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say, "To me." She talked about something that gave a clue to what was in her mind, which I shall not repeat now, but she did not admit that accountability.
I found that extremely strange, and perhaps this can be dealt with in the wind-up. On that very day, the Prime Minister had used the phrase "cover from No. 10". We all have people who help us—people to whom we give standing instructions, such as, "If they ring, tell them this," or, "If they ask that, refer them to me." Such instructions are very clear, but in this instance, when the Prime Minister's office was approached by the DTI, her officials were either so sure of what was in her mind that they could give clearance, or they vastly exceeded the authority that she had given them. It cannot be anything else—it must be either one or the other.
The Prime Minister has not claimed today that they exceeded their authority, but she said that they did not consult her on that day. That suggests the other possibility, that they knew what her mind was on some previous day, and the Prime Minister has also told us today that, on the Saturday, there had been a lot of discussion in No. 10 about these letters. That opens up the possibility that the officials acted on her authority, having known from a previous occasion precisely what the Prime Minister had in mind.
The Prime Minister also told us today that there had been a misunderstanding. I am confused, because last Thursday she made it absolutely clear—crystal clear, as Mr. Brian Walden might say—when she said:
"My office were accordingly approached. They did not seek my agreement: they considered—and they were right—that I should agree with my right hon. Friend the Secretary of State for Trade and Industry that the fact that the then Defence Secretary's letter of 3 January was thought by the Solicitor-General to contain material inaccuracies which needed to be corrected should become public knowledge". — [Official Report, 23 January 1986; Vol. 90, c. 450.]
Therefore, on Thursday, the Prime Minister told us that she would have agreed, and she concurred with the cover that was given by her office, whereas today as I understand it—it was not easy to follow—she said that there had been some misunderstanding and that cover was not given.
Sir John Page: Will the hon. Gentleman give way?
Mr. Spearing: I am sorry, but I cannot give way.
Sir John Page: Why not?
Mr. Spearing: The answer can come from the Dispatch Box. The hon. Gentleman is not entitled to intervene.
These anomalies must be cleared up, because the authority clearly given by the former Secretary of State for Trade and Industry was, according to the Prime Minister on Thursday, accepted, and the right hon. and learned Gentleman lost the confidence of his colleagues as that was known to be true. The House wants to know—we have heard nothing at all to the contrary—whether the Prime Minister, by implication of her office, was also involved clearly and explicitly with that decision. In nothing she has said today has she in any way dissociated herself from it. In fact, the additional evidence relating to the implication of her office on the Saturday brings her closer to it rather than separating her from it.
When they vote tonight and think of the call for loyalty, Conservative Members should ask themselves, "Loyalty to what?" Is it loyalty to a person, to the party or to the

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supremacy of Parliament? I suggest that their loyalty to the last two vastly exceeds any loyalty they have left to the former.
5.28 pm
Mr. Leon Brittan: The House will know why I came to the conclusion that I should no longer remain a member of the Cabinet. I want to place on record my appreciation of what a privilege it has been to serve in the Government of my right hon. Friend the Prime Minister. The unhappy circumstances of the last few weeks will not detract from their achievements. I shall support the Government's policies as strongly outside the Cabinet as I have within it.
My right hon. Friend the Prime Minister has set out the facts relating to what has been called the "Westland saga", and particularly the circumstances relating to the disclosure of information contained in a letter of my hon and learned Friend the Solicitor-General. She has done so in great detail. Some of the facts only she can know about whereas in other events I myself was closely involved. I can and do confirm that with regard to the facts within my knowledge, the account of my right hon. Friend the Prime Minister is correct.
As my right hon. Friend said in her statement to the House last Thursday, I made it clear to my officials at the Department of Trade and Industry that—subject to the agreement of No. 10—I was giving authority for the disclosure of the Solicitor-General's letter to be made. I therefore accept full responsibility for the fact and the form of that disclosure.
The House knows of the extraordinary, perhaps unprecedented, circumstances in which we were working —the circumstances of the persistent campaigning of my right hon. Friend the former Secretary of State for Defence and the urgency of the need to ensure that the contents of the Solicitor-General's letter should become known. But for all that, and in retrospect, I must make it clear to the House that I accept that the disclosure of that information—urgent and important as it was—should not have taken place in that way, and I profoundly regret that it happened.
I must also make it clear that at all times the Department of Trade and Industry officials acted in accordance with my wishes and instructions. What they did was with my full authority. They are not to be blamed. Indeed, they gave me good and loyal service throughout my time as Secretary of State for Trade and Industry.
There is one further point—and one further point only—that I would make. I remain firmly of the view that the Government's agreed policy of letting the board and shareholders of Westland make up their minds about the company's future without political pressure was and is right. Let us hope that now—
Mr. Alex Carlile: Will the right hon. and learned Gentleman give way?
Hon. Members: No.
Mr. Brittan: Let us hope that the future of the company can now be decided in that way.
5.29 pm
Mr. Merlyn Rees: The right hon. and learned Member for Richmond, Yorks (Mr. Brittan), the former Secretary of State for Trade and Industry, resigned because of his responsibility for the
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disclosure to the Press Association of legal advice in a letter supplied by the Solicitor-General. He was right to do so. His resignation is honourable, but he should have resigned earlier. However, it was not only the Secretary of State who was involved in that disclosure, which is the major reason for the anxiety about the happenings of the past four weeks. The Prime Minister was also involved.
For four weeks we have been trying to get information from the Government in a variety of ways, including today's Standing Order No. 10 debate. We have received some information from the Government, but it has taken a long time. We have not yet got it all, and, unless we get more this evening, the matter will continue.
I wish to raise two issues. The first relates to the role of the Law Officers, and the second to the private office. I disagree with the right hon. Member for Plymouth, Devonport (Dr. Owen) that civil servants in the private office should resign, and I shall argue that case shortly.
I first realised the peculiar nature of Law Officers during the Franks inquiry of 1972, so by the time I became a Minister I was not surprised by the way that they operated. It should not have surprised the former Secretary of State for Trade and Industry, who has one great advantage over me—he is a lawyer. Indeed, it is said, properly, that he has aspirations in the political sphere, and so he should. It is an honourable task and peculiar to this country.
The Franks report states:
"The Attorney-General administers the criminal law in the interests of the community as a whole, and he must disregard the interests of his party, and those of the Government as such."
The Solicitor-General and Attorney-General have done that consistently throughout the Westland affair. I do not seek to get at them. I am mentioning their role for other purposes.
Not only is the role of Law Officers different from other Government activities. Last week, it was drawn to my notice that if the Government were to fall next week, all the information in the documents, papers and Cabinet subcommittees would not be made available to the succeeding Government, but the Law Officers' information would. It is unto itself, and above politics. I do not understand how the Prime Minister and the former Secretary of State for Trade and Industry, knowing that, could use the advice given by the Solicitor-General on that Saturday and then on Monday as they did. That is one of the most important issues to emerge during the past month.
Mr. William Cash: Does the right hon. Gentleman agree that if there were material inaccuracies in correspondence, they should emerge?
Mr. Rees: Of course they should, but there should be a public statement. The inaccuracies should not have emerged in that way. That is the whole point of our argument.
I shall remind the House of what happened. The Government made a decision within one and a half hours. They moved more quickly than my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) and his Cabinet did on such issues. The Government knew what to do within one and a half hours. I bet that the matter had been discussed before, and that the civil servants knew what was in the minds of their lords and masters; otherwise, they would not have acted as they did. One does not leak a little bit of a letter to an honourable member of the press. I am coming to the conclusion that the Government were

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not interested in informing Sir John Cuckney. As far as I know, he never found out. Apparently, he said that he did not find out. I am told that he thought that it was politicians playing games.
Mr. John Wilkinson: Is not the importance of the matter the fact that in the part of the letter that was not released, but which was communicated to the then Secretary of State for Defence, our posts in Europe were reporting a different view about the future potential for Westland collaboration in European projects from that which was being purveyed by the then Secretary of State for Defence in his open communication to the chairman of Lloyds merchant bank, which was acting for the European consortium?
Mr. Rees: That may be, but the Government must deal with that through their machinery. The letter should not have been leaked in the way that it was. The way in which the letter was leaked is important. During the past month the Law Officers' method of operating has been compromised by the Government.
Mr. Wilkinson: In the extraordinary circumstances that prevailed, would it not have been appropriate to draw attention to what are normally classified messages coming from abroad? Was not the important fact that the former Secretary of State for Defence was being misleading?
Mr. Michael Mates: He was not.
Mr. Wilkinson: Does the right hon. Gentleman agree that that was the point that had to be got across quickly?
Mr. Rees: It was up to the Government how they handled that. I am worried about the way in which the Government dealt with advice from the Law Officers. They dealt with it badly, and both the Prime Minister and the former Secretary of State for Trade and Industry were implicated in that.
I wonder when the Solicitor-General knew of the leak. Eventually, the Prime Minister set up a leak inquiry, which has two stages. First, the Cabinet Secretary is asked to set up a leak inquiry, which is carried out within a Department through the permanent under-secretary concerned. If the inquiry comes within the provisions of section 2 of the Official Secrets Act, the matter goes to the police. This matter never went to the police. Did the Solicitor-General know, when he and the Attorney-General asked for the leak inquiry to be set up, that the others involved knew that they had authorised the leak? The Law Officers would not have asked for an inquiry if they had known who had authorised the leak.
It was a charade, brought about because of the demands in the House for an inquiry. The Prime Minister could have stopped it. She could have come to the House and said, "I have to tell the House that on Monday we made a mistake. There is no need for an inquiry. We authorised the leak." That is what worries me most about what has been happening. I have already said that the Prime Minister's office knew, if not directly, what the Prime Minister and her Ministers wanted. The Cabinet Office staff are loyal and of a high calibre. They may have been high fliers, but inexperienced in the ways of politics. In my view, this should not be a matter for disciplining those people. Whether they come from the diplomatic service, the Treasury or wherever, I believe that they acted with
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the connivance of the Prime Minister. It is not good enough to expect civil servants to act as fall guys. To some extent, during the past week, the former Secretary of State for Trade and Industry has acted honourably in following that premise.
Other allegations are being made and more allegations will be made in the weeks ahead. They will not go away. It is being alleged — I mention this now so that the Leader of the House can deny it—not only that was the Solicitor-General's letter leaked, but that the Prime Minister's office subsequently, because it was told to do so, acted in a peremptory and cavalier way by contacting the Law Officers and asking them if there was a way of pushing all this under the carpet.
The Solicitor-General (Sir Patrick Mayhew): I am grateful to the right hon. Gentleman for giving way. He will not be surprised that I require him to do so. The allegation is not true.
Mr. Rees: I accept that immediately. It is better that I should raise the matter on the Floor of the House than that the story should fester in the papers.
The Solicitor-General is an honourable man. The only complaint of the Law Officers was the way in which the Solicitor-General's letter was dealt with. I am sure that the Solicitor-General would have corrected me if that were not the case.
Mr. Bell:The question for the Solicitor-General is not only why the inquiry was held, but why immunity from prosecution was given to a specific person before the event. Why was the Cabinet Secretary given authority to grant immunity from prosecution to those who assisted in the inquiry?
Mr. Rees: What was the point of getting at the civil servants when it had been discovered that Ministers had authorised the leak?
The hon. Member for Horsham (Sir P. Hordern) referred to the press office. It is time that we considered the way in which the press office at No. 10 carries on. It has become more important than Prime Ministers themselves, with morning briefings and the releasing of innuendo. It is time that some other method was found, even if that involved another Minister to work with the Prime Minister and to look after the press office. That occurs in other Departments. In the Home Office, someone looks after police information and produces documents and press statements. However, I am concerned about the political side, which is mainly at No. 10.
The Westland episode has gone well beyond the problem of a small company. It is not only a matter of morality or integrity. When I read about the way in which the Cabinet had carried on, I had a good look at the Franks inquiry report on the Falklands war. The last paragraph, which I willingly signed, states that it was not the Government's fault. Paragraph 339 states:
"Against this background we have pointed out in this Chapter where different decisions might have been taken, where fuller consideration of alternative courses of action might, in our opinion, have been advantageous, and where the machinery of Government could have been better used."
I have heard this story unfold and nothing has changed. The only difference is that there will be no war to wipe out that paragraph.
Several Hon. Members rose—
Mr. Speaker: It may assist the House if I say that the Front Bench spokesmen will seek to rise at 6.5 pm. I ask for brief contributions. In fairness, I must respect the rights of Back-Bench Members as well as those of Privy Councillors.
5.45 pm
Mr. Michael Mates: With the right hon. Member for Ebbw Vale (Mr. Foot), I believe that it is impossible not to feel a slight twinge of sympathy for the Leader of the Opposition this afternoon. He had to address the House without knowing the story that my right hon. Friend the Prime Minister would tell. He had nothing much to say, except to repeat the questions that have been asked in the Sunday newspapers, which he did. He then tried to give a lecture on responsibility, but at that moment he lost the attention of the House to the extent that you, Mr. Speaker, had to plead with us to listen. It is rather difficult for us to listen to a lecture on responsibility from someone who has never held it; and to hear from the Leader of the Opposition how the Government have failed in their responsibility when he has yet to exercise authority of any sort was more than we could take.
That task might have been difficult for the Leader of the Opposition, but the leader of the Social Democratic party was under no such disadvantage. His position requires no sympathy, because by the time he made his speech, my right hon. Friend the Prime Minister had answered all the questions. She told us the full, unfortunate regrettable story with an honesty and candour that all of us received with great relief and sympathy because it is not easy for the leader of a Government to have to say that some things happened that should not have done. Instead of the right hon. Member for Plymouth, Devonport, (Dr. Owen) having the decency to say, "Now that we have heard the story—although it is not a good story—we will accept it," he got on his moral high horse and lectured us about the honesty and decency of office.
I would prefer to say this to the right hon. Gentleman's face, but he is probably appearing on television at the moment. He was a member of a Government who were hardly the model of Cabinet collective responsibility. He took the decision about Chevaline. He reached high office and, unlike the Leader of the Opposition, he knows what is involved in it. He knew that that decision had been taken and that it had been kept from all but a select few. The right hon. Member for Chesterfield (Mr. Benn) might have a word or two to say about that. He sat in that Cabinet for five years yet he did not know that his colleagues had taken that decision. The right hon. Member for Devonport dared to lecture us about open government and about the way in which we conduct government. We need no lessons in morality from him.
Mr. Robert Adley: Is my hon. Friend aware that, on television, the right hon. Member for Plymouth, Devonport (Dr. Owen) lectured us about patronage? When I asked him if he could name the relationship of the Prime Minister of the day with the man that he had appointed as ambassador to Washington, the right hon. Gentleman walked out of the studio.
Mr. Mates: My hon. Friend relates an interesting tale.
We are 45 minutes away from the end of what has been a sad incident in the Government's life, but it is only an incident. What we have heard today from the Prime
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Minister, from my right hon. Friend the Member for Henley (Mr. Heseltine) and last, but not least, from my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) has shown that at least if we made mistakes we are prepared to admit them —[Interruption.] I have no doubt that most Opposition Members find that funny, because a little modesty and honesty would come ill from their lips.
Things have gone wrong in this affair, and no one denies it. From the outset, because I happened to be involved in the issue, I said that this was the row that should never have happened. What has been said by the Prime Minister and by the two former Secretaries of State vindicates that statement. It is most unfortunate that it became a personal battle of wills, and we have all suffered as a result of it. But it is equally clear that, now that all of them have been as open, frank and honest as they have been today, we can put this affair behind us. It is just a minor incident when one thinks of the great matters that this Government have decided and must decide in the future.
I know that I speak for every Conservative Member when I say to the Prime Minister that, having cleared this matter, she should get on with more important issues. not least a consideration of the way in which we now discuss what happens to Westland. As she reminded us in her speech today, that has not gone away. I hope that we can define the national interest in this matter without interfering with the rights of the shareholders and the board to make up their minds at the end of the day. There is a national interest in the matter and it is for us to try to define it because, after all, that is the job of Government. I hope that the Select Committee on Defence, which is considering the matter, will take evidence from all parts of industry and politics to try to come to a united conclusion as to where that national interest lies.
It is always unfortunate when mistakes are made. It is always best to come clean about them. My right hon. Friend has done that in full measure today. The Government may have suffered because of what has happened during the past two or three weeks, but it is a temporary setback. We must pick ourselves up and dust ourselves down, because there is a job to be done. I know that we shall be united behind our Cabinet in doing that job.
5.52 pm
Mr. Tony Benn: No one will know what happened until the memoirs are written, but Bernard Ingham was my press officer for some time and I know a little bit about him. He is a very tough customer, but he would never dare to agree to betray a Cabinet Minister without the authority of the Prime Minister. I do not believe for one moment the account given by the Prime Minister that Bernard Ingham and Mr. Powell assented to the wishes of the Secretary of State for Trade and Industry — [Interruption.] I do not believe for one moment the account that has been given. What happened was that the Prime Minister used some powerful words—"who will rid me of this turbulent priest?"—and the rest was done by the civil servants to rid her of the Secretary of State for Defence.
I have found it hard to believe the Prime Minister since my hon. Friend the Member for Linlithgow (Mr. Dalyell) raised the Belgrano question, so today is not the first time

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that doubts about her trustworthiness have crossed my mind. But the debate will be wasted if we do not understand the lessons that may be drawn from it.
First, why did the Government lose two senior Cabinet Ministers over this matter? We are at least entitled to know that. The answer is that when Westland got into difficulty, in pursuit of their policy of non-intervention, the Government said, "We do not care what happens to Westland." They said the same about the steel, mining and manufacturing industries, so there was no surprise about it.
However—this is why the matter became a central political question —the vultures from Washington and Brussels moved in. As Minister with responsibility for aviation, I used to deal with Westland and I know of its long link with Sikorsky.
Sikorsky wanted to use Westland to expand its arms sales in Europe. The Prime Minister could not ignore that view because she was close to President Reagan and she wanted contracts for star wars. However—this is why it is a big issue, not a little issue —there is a growing feeling among western European industrialists that American domination must end. Therefore, the Prime Minister tried to withdraw from a major international industrial matter by pretending that the decision should be left to the shareholders. Of course, her idea of democracy is to hold ballots to elect trade union executives, but if employees want to ensure their future employment, they must buy their votes and become shareholders. We saw the disgusting slave market of the Albert hall, with people such as Mr. Bristow and Lord Hanson buying shares to trade the future of Westland workers. So much for the workers at Westland having any rights.
The matter became more complicated because one Minister supported the American bid and another supported the European bid. The Prime Minister deliberately used the mechanisms open only to a Prime Minister, first, to encourage legal advice and, secondly, to release that advice to destroy the Secretary of State for Defence, who left the Government. Thereafter, she had to sacrifice her Secretary of State for Trade and Industry by saying that he, alone among Ministers, had authorised the leak. That is what happened. That is what people outside know to have happened. It was not simply a matter of who telephoned whom on what occasion. This was, and still is, a major industrial conflict between Europe and the United States, with Ministers taking different sides and the Prime Minister using her powers, first, to undermine one Minister and, secondly, to get another Minister—very close to her—to take the blame so that he felt he had to resign.
It was good to see those two Ministers go. The former Secretary of State for Defence led the Army against the Quakers at Molesworth, so I am pleased that he has gone. The former Secretary of State for Trade and Industry, when he was responsible for the Home Department, told the police to batter the miners at Orgreave and now he has gone. The loss of those two Ministers is a plus, and it must have delighted the National Union of Mineworkers and the Campaign for Nuclear Disarmament.
However, the House must discuss other matters. The first is the Official Secrets Act. Some months ago, Sarah Tisdall, from a sense of principle, released to The Guardian, which did not protect her — it might be
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remembered that Bernard Ingham came from The Guardian—details of something that had happened, and she was put in prison for six months. No doubt the Prime Minister, who believes in law and order, endorsed that sentence. Clive Ponting of the Ministry of Defence was charged under the Official Secrets Act. Yet the Prime Minister retrospectively authorised — today she takes responsibility for what she pretends she did not know—a leak to undermine a colleague. There is no doubt that the purpose of the leak was to undermine the Secretary of State for Defence. That is her idea of law and order and official secrecy.
What she should have done, if the Minister had made a mistake, was to issue a public statement saying, "We have reconsidered the letter from the Secretary of State for Defence, and in some respects we believe it to be in error." She could have sent it with a motor cycle messenger to the place where the shareholders were meeting—it has been done previously—so that the shareholders would know the position. But she chose to do something different.
The incident also throws light on the lobby system and all those people sitting there in the Press Gallery —[Interruption.] If I am not allowed to refer to them, Mr. Speaker, that is another absurdity added to many. There are people in this Palace who go twice a day to No. 10 and get from Bernard Ingham an account of what the Prime Minister wants them to know about Government business. Then people appear on television saying, "Our political correspondent understands," but they never tell us from where the information comes. They do not understand it. That is because they got it 10 minutes before from Bernard Ingham on the instructions of the Prime Minister.
When the briefing gets a bit touchy, they appear on television or write in the papers about a grave constitutional crisis. The lobby correspondents are involved in secret arrangements with Ministers of all parties. I hope I will not be accused of being a leaker when I say publicly what has to be said. I do not leak through the Lobby. That is a vicious system, because it creates a sort of cosy conspiracy between Ministers, Shadow Ministers, civil servants and the lobby correspondents.
The third thing that the Prime Minister did was to blow up the questions of procedure that she sent to her own Ministers in 1979. I have a copy sent to me by my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) in 1976. The procedure is identical from year to year. It says about consultation with the Law Officers, in paragraph 25:
"It is essential that Law Officers should be consulted in good time before the Government are committed to critical decisions involving legal considerations. The categories of cases in which it would normally be appropriate to consult the Law Officers include the following:
(1). Cases in which the legal consequences of intended action by Government might have important repercussions either in the foreign or the domestic field."
The classic case for consulting the Law Officers is contained in that paragraph.
Paragraph 23 of these instructions to Ministers reads,
"It is important to avoid giving any indication of the manner in which the Minister has consulted his colleagues before any decision is announced."
The Prime Minister broke her own rules. [Interruption.] My right hon. Friend says they are his rules, but they disappeared along with him and the Prime Minister issued

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her own. As the Cabinet Secretary was my right hon. Friend's Cabinet Secretary or Lord Wilson's Cabinet Secretary, the same rules apply.
The main reason we are debating this matter is, first, because it is a major constitutional question. Because of the Official Secrets Act and the way in which the right hon. Lady treated her Cabinet but because the Government misled Parliament and the public we have had to have this debate. We are told that parliamentary democracy is what we uphold but we cannot have parliamentary democracy if Ministers do not tell the House of Commons what is happening and have to be hauled up under Standing Order No. 10.
This is an important debate. It goes well beyond whether the Prime Minister talked to Bernard Ingham, which I am sure she did. I know that other people who know Bernard Ingham will agree that he would not have so acted if he had not had the clearest instructions so to do. The debate is important because of Westland and all the other matters. The Prime Minister must be wondering why what she sees as such a small issue should have been exploded to the point where it appears to the minds of some correspondents to threaten the premiership.
The reason is that Thatcherism, which the right hon. Lady created and believes in, was a myth. People are asking whether that myth is capable of leading the Conservative party to victory at the next election. The Conservative party is looking for a new leader. Members on the Government side will go into the Lobby tonight and the resigned Secretaries of State will be rubbing shoulders with the Prime Minister. The reality of the matter is that they are looking for a new—[Interruption.]—leader.
Mr. Speaker: Order.
Mr. Benn: If British politics moves sharply to the Right, the right hon. Member for Plymouth, Devonport (Dr. Owen) would be the obvious candidate. This style of Government, the approach to industry that says it does not matter whether our helicopter company continues any more than it matters whether we have a steel industry or an engineering industry, combined with a contempt for Cabinet government, parliamentary government and truth, has brought the Prime Minister to the point where her days are numbered. If the Conservative party does not deal with the matter, the electorate will put my right hon. Friends in charge.
6.5 pm
Sir Ian Percival: That is one of the most disgraceful speeches that I have ever heard, even from the right hon. Member for Chesterfield (Mr. Benn). In addition, the right hon. Gentleman has spoken for so long, despite your injunction, Mr. Speaker, that I have had to cast aside a point a minute and shall confine myself to two aspects about which I must say a word.
This House must deplore and condemn the cowardly attempts that have been made to implicate the Solicitor-General in any—[Interruption.] I was glad that the right hon. Gentleman ultimately accepted the assurance given to him, and I hope that other hon. Members will do the same. The House must realise how fiercely proud of our impartiality are all of us who have held that great office, and how important that is to the life of our Parliament. There is not the least trace of impropriety or breach of those standards by the present holder of that office.
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We have heard from the Leader and the deputy Leader of the Opposition a torrent of cant and hyprocisy. Only marginally less nauseating was the contribution on behalf of the alliance. But it was all counter-productive because what must now be as clear as a pikestaff is that my right hon. Friend the Prime Minister stands head and shoulders above all of her critics in courage, loyalty and integrity. If those critics believe that in this way they are going to drive her and us out of office, they have sadly misjudged the lady, her Back-Bench supporters and the great majority of people in the country.
Now can we not get on with the job? Speaking both for myself and for all those who would have liked to have the chance to say it in this debate, may I say to the Prime Minister, "Thank you for your courage, loyalty and integrity with which you set the lead for us all." [Interruption.] Of course the Opposition do not like to hear that. With that lead we can and we will beat not only the Opposition but the other, and real, problems that beset the country we love.
6.7 pm
Mr. John Smith: The word will be going out from those who conduct press affairs for the Government that matters have been answered and cleared up today, and that the House of Commons and the British public can put this matter safely behind them in the confident reassurance that, perhaps at long last, the Prime Minister has come clean with the House and with the public. Let us examine what the Prime Minister told us today. It was not a great deal. First of all, she told us that the first she discovered of the Secretary of State for Trade and Industry's behaviour in the matter was at the end of the inquiry. Secondly, she told us that some hours after the leak she was told in general terms of her office's involvement. Thirdly, she told us how the inquiry came to be instituted.
I cannot see how the addition of these small pieces of information, interesting though they are, changes the situation from last Thursday, when the Prime Minister was floundering in her inability to answer these questions. Now, suddenly, we are told that it has all been cleared up. It has not all been cleared up and the question that will be asked again and again is a very simple one. It is: before the Prime Minister decided to institute the bogus inquiry into the leak—bogus is what we now know it was—did she know about any of the involvement of her Ministers and her officials?
I have to concede that we have received a partial answer to one leg of that question, because she said that she did not know about the involvement of the Secretary of State for Trade and Industry. That is a little curious, because he says, and the Prime Minister said when she made a statement about this matter the other day, that he telephoned her or caused his officials to communicate with No. 10 on the basis that, subject to the agreement of No. 10, certain action was to be taken. It is odd that that was there and signalled from the beginning apparently, yet the Prime Minister says that she did not know of his involvement until after this laborious inquiry had been completed.
But let that matter stand. What we do not know is whether the right hon. Lady knew from her officials of their involvement in the leak before the setting up of the inquiry. That question simply has not been answered. It will be asked, and it will be asked, and it will be asked

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again until it is answered. The question is not an idle one. It is not one of a small matter of the mismanagement of government; an unfortunate leak, a slip, something that arose out of an unfortunate, but genuine, misunderstanding, as we are told.
Let me remind the House what the Solicitor-General wrote to the former Secretary of State for Defence in the letter which has become available only today, having been declassified and put in the Library before the debate started. In the penultimate paragraph, the Solicitor-General, writing to the former Secretary of State for Defence the day after the leak occurred, said:
"On a different aspect of this matter. I want to express my dismay that a letter containing confidential legal advice from a Law Officer to one of his colleagues should have been leaked, and apparently leaked moreover in a highly selective way. Quite apart from the breach of confidentiality that is involved, the rule is very clearly established that even the fact that the Law Officers have tendered advice in a particular case may not be disclosed without their consent, let alone the content of such advice. It is plain that in this instance this important rule was immediately and flagrantly violated."
So let us get to the situation on 7 January, when the Solicitor-General knows that a flagrant violation has occurred. This is the time when the Prime Minister has been told in general terms of her office's involvement. She certainly must have known that there was a leak. It was on the front page of The Times, The Sun, the Daily Mail and I think that it got into The London Standard on that very day. In lurid headlines, the Daily Mail says:
"The great Cabinet shambles. Open war as Ministers attack Heseltine".
The Times said:
"Heseltine told by law chief: Stick to the facts".
The article goes on in that vein. The Sun, true to form, had a simple headline:
"You liar".
That was all happening on 7 January.
The Solicitor-General tells us that it is quite clear that a flagrant violation has occurred. I assume that the Prime Minister knew of the rule about Law Officers. But what was her reaction to that? Did she have people in and say, "A flagrant violation has occurred. I am not putting up with it in this Government which I run and I want to find out what went on."?
Nothing happened from the Prime Minister until the Attorney-General stirred himself, realising that a flagrant violation had occurred. He did not go to the Prime Minister apparently, which is very strange, but to the head of the Civil Service. Perhaps he thought that he would get a more sympathetic response there than going to the Prime Minister, and be able to get his complaint out before he received his letter of dismissal perhaps. However, he goes to the head of the Civil Service and within minutes the Prime Minister—three days later—on 10 January says, "I readily admit that I gave my authority for an inquiry to commence." The question must be: why did it take the Attorney-General and the head of the Civil Service to remind the Prime Minister of her constitutional responsibility? Why did she remain inactive? That is charge number one.
Charge number two is: is it really true that the Prime Minister knew nothing about the activities of her civil servants in No. 10? In that regard, Mr. Speaker, let me remind you of something which happened this very afternoon. My hon. Friend the Member for Linlithgow
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(Mr. Dalyell) rose in his place and put a question to the Prime Minister. He referred to a question at column 455 of Hansard of 23 January put by the chairman of the 1922 Committee, the hon. Member for Woking, (Mr. Onslow), to the Prime Minister. I hope that the House will forgive me if I quote the question and answer, because it is of profound importance.
The hon. Gentleman said:
"My right hon. Friend will be aware that many right hon. and hon. Members on the Opposition Benches, like the right hon. Member for Plymouth, Devonport (Dr. Owen), are not really interested in listening to the facts of the full account given by my right hon. Friend. What view does my right hon. Friend think that the House might have taken of any Minister in any Government placed in such an invidious situation by the action of a colleague who had failed in his duty to ensure that correct information was made public as soon as possible?"
That is clearly referring to the conveying of the information suggesting that it was necessary for a Minister to make sure that that information was communicated. There can hardly be any doubt about that. Nor was there any doubt apparently in the Prime Minister's mind as to the meaning of the question, because she replied:
"Yes, Mr. Speaker, it would have been much easier, as the facts were commercially sensitive, if the relevant letters had been cleared as mine was with the Solicitor-General. It was vital to have accurate information in the pubic domain because we knew that judgments might be founded upon that and that the Government could be liable if wrong judgments were made as a result of misleading information. It was to get that accurate information to the public domain that I gave my consent"— [Official Report, 23 January 1986; Vol. 90, c. 455.]
Why did the Prime Minister tell us last Thursday that she gave her consent to the leaking of the letter into the public domain? [HON. MEMBERS: "Answer."]
The Prime Minister: I shall gladly reply to the right hon. and learned Gentleman. I was quite content that I had given a whole account in the statement, cleared in every single detail, and the account in the statement was absolutely accurate.
Mr. Smith: I know that the Prime Minister's statement was gone over with a toothcomb. The one she read out here is full of all the weasel words such as "it became accepted as a matter of duty" and "cover" instead of "authority" —all those curious words that have been fashioned and honed after many hours of consultation to get them right.
The Prime Minister was OK when she was on the statement, but the question took her slightly outwith the range of the statement. The question could not have been clearer and she said, "I gave my consent." Today, when she was asked about it by my hon. Friend the Member for Linlithgow, we all heard her say: "When I said consent, I meant consent to the inquiry." I must say that I felt something had gone wrong there, and I immediately checked in Hansard. It is obvious for everyone to see that the Prime Minister did not mean that. So she either gave us the wrong answer then or a wrong answer today. Which one was it? On the record in Hansard the Prime Minister admits that she gave her consent to the leaking of the information. Until she publicly corrects that account and answers the particular allegation that I have made, the question will remain unanswered.
The Prime Minister: I did not give my consent to the leaking of the information. May I make that quite, quite clear?
Mr. Smith: If we are to accept the Prime Minister's statement that she did not give her consent, she was

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remarkably foolish to say so when she answered the question to the House. It takes me back to my days in the criminal courts. When some people gave unfortunate answers when required to do so about their activities they did not always get such an understanding response. "I made a mistake," said the Prime Minister. Did the Prime Minister make a mistake? That is one of the unanswered questions, and there are more.
What is worrying people who care about good government in Britain is that this is typical of this Administration. I am sorry to say that there is no surprise throughout Britain at the evasions, denials and all the wrong goings-on of recent weeks and months. There is no surprise that things should happen in this way, because the standards of good government in Britain have been steadily deteriorating under the Prime Minister and her Ministers. That is why it appears to be enough to come to the House of Commons and get cheers from the ruling party for saying that matters should have been handled in a different way. Handled? Why cannot the Prime Minister say, "It was wrong. It should not have happened and I am taking steps to make sure that it does not happen again."? No, it is all a matter of handling. It is a matter of manipulation and presentation.
I hope that the time will come soon in this House of Commons when Ministers, including the Prime Minister, when asked straight questions will give honest answers; when we will have a Government in whose competence, as well as in whose integrity, we can have confidence.
The problem is this: if we accept the explanation that has been given to us, it is a sorry tale of woeful incompetence. If we cannot accept it, the whole integrity of this Administration is suspect.
This matter, I am sorry to tell the Government, simply will not go away, despite the attempts by Conservative Members, carefully planned throughout this day and carefully planned in advance, to disrupt the speech of my right hon. Friend the Leader of the Opposition. The Conservative party's tenacious defence of power is ruthless and absolute. Unfortunately for them, they have been found out and are being found out daily by the public.
6.20 pm
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): The knowledge that a debate is to arise on a motion for the Adjournment is frequently a matter for regret and some disparagement, but this afternoon has demonstrated that a debate on the motion for the Adjournment, shot through with passion and arguments of principle, can put the House in the best possible light.
I say that in respect of the whole range of speeches, including that by the right hon. and learned Member for Monklands, East (Mr. Smith). It is not difficult to flatter the right hon. and learned Gentleman; it is more difficult to flatter some of those sitting behind him.
The House has very properly considered the matter in the forum of this Chamber, but my hon. Friend the Member for Hamphsire, East (Mr. Mates) has reminded us that departmental Select Committees are also investigating the wide range of issues that have been debated and which, I have no doubt, will continue to be matters of parliamentary interest.
I want to draw the attention of my hon. Friend and of the House to three aspects of this afternoon's debate. One concerns, in a very real sense, tragedy; another is the
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major lesson for Parliament and for the Treasury Bench; and finally I shall draw the attention of my right hon. and hon. Friends to a dire political warning implicit in what is now being argued.
First, as far as the point of tragedy is concerned, the Leader of the Opposition and my right hon. Friend the Prime Minister have drawn attention to the continuing shadows over the future of Westland—a future which cannot be assisted by the current political difficulties and a future which we must all hope will shortly be resolved.
It is particularly in terms of tragedy that I and many of my colleagues feel deeply the loss of two colleagues over this issue — my right hon. Friend the Member for Henley (Mr. Heseltine) and my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan). My hon. Friend the Member for Horsham (Sir P. Hordern) paid a very warm tribute to my right hon. and learned Friend the Member for Richmond, Yorks, which I thoroughly underline. My right hon. Friend the Member for Henley has given the clearest possible indication that he returns — [Interruption.] — to the fray with tremendous enthusiasm. [Interruption.] The nervous laughter on the Opposition Benches shows how much they will be frustrated in their hope that they were to see some form of civil war within the Tory party over this matter. My right hon. Friend's speech this afternoon indicates that for the Government Benches and the Conservative party, this is no parliamentary Dunkirk, but rather a parliamentary Alamein. [Interruption.]
Mr. Skinner: Where are the Desert Rats?
Mr. Biffen: When I look at the hamster from Bolsover —[Interruption.]
I turn to the most central and serious issue of this whole unhappy business —the need for effective collective responsibility. The situation outlined by my right hon. and noble Friend Lord Whitelaw in another place on 23 January was an accurate and perceptive description of recent months. I would judge that it is the hallmark of good government that it should be defined and realistic in its ambition, but effective in its operation.
The doctrine of collective responsibility has been followed by successive Administrations, with the cumulative wisdoms that come over the ages and over the Parliaments, because of the necessity for strong and secure Government to operate within that discipline. Hence, despite what may be a certain amount of modish criticism —[Interruption.]. Oh, yes. If hon. Members wish to dispute what I am going to say, we shall be happy to have their dissent on record. For I want to assert that the operation of the 30-year rule and the operation of strict confidentiality applied to Government papers are integral to the operation of collective responsibility [Interruption.] So central has this been to good government that, when Governments have from time to time been obliged to digress from the doctrine of collective responsibility, it has been done on a formal basis and on terms where the breach was acknowledged to cover but a limited period.
I have particularly in mind—I say this for the benefit of the Opposition Benches below the Gangway — the Liberals who sat in the Government of 1932 and were allowed licensed dissent on the issue of free trade and, more within the recollection of the House, the European Community referendum arrangements of which the right.

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hon. Member for Chesterfield (Mr. Benn) took advantage when seven Cabinet Ministers were entitled to argue their dissent within licence.
Mr. Benn: The right hon. Gentleman made a special reference to reasserting the 30-year rule—after we have seen the 30-second rule applied. Is he actually laying claim to a reassertion by the Government, after what has happened, that these matters cannot be properly examined for 30 years? In particular, is he denying the right of privilege to expose them? I quoted from that procedure and laid it on the Table. It is now in the public domain, and I want that to be clear.
Mr. Biffen: The right hon. Gentleman has got his publicity. I was asserting the desirability of the 30-year rule in the light of a great deal of opposition that there now is to the effectiveness of the 30-year rule. I was saying that a 30-year rule or something very much like it is important for the maintenance of the doctrine of collective responsibility.
Finally, the informal breach of collective responsibility is that which gives rise to the greatest difficulty for contemporary Governments. No one is a better demonstration of that than the right hon. Member for Chesterfield who, in the mid-1970s, pursued a highly individualistic form of existence within a Government and, in my belief, weakened that Government, subverted loyalty to his colleagues and, on the whole, was a gift to his opponents.
As politics is or should be, at least in part, about learning from experience, I say that this Treasury Bench has learnt from the bruising experiences of the past weeks. If Opposition Members were at all wise, they would also learn.
Mr. Campbell-Savours rose—
Mr. John Morris rose—
Mr. Biffen: No. I am going to proceed to the third point that I wish to make, which is a warning to my right hon. and hon. Friends about the nature of this afternoon's debate and what I believe it implies in political terms.
It has been a major political assault. It has not been an assault designed as a relentless search for truth. The disclosure of the Solicitor-General's letter, which certainly is an incident which contains errors enough, has been mentioned from the Government Benches, not least by my right hon. Friend the Prime Minister, but nonetheless it has been subject to critical comment elevated out of all proportion. [Interruption.] My right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) properly assessed the situation in his intervention at Question Time on 23 January when he referred to "hypocrisy", "humbug" and "cant."
First, on the issue of the disclosure. The disclosure was undertaken in terms which my right hon. Friend the Prime Minister has deprecated. We all admit that we judge that matters could have gone better, but to turn this into some kind of moral crusade is simply to totally disregard what happens in the world about us.
If we want to know we need only look to the right hon. Member for Chesterfield, without whose existence this speech would be the sadder, when he wrote "Arguments
686
for Socialism," in which he set out in a fair way the operation of disclosure. He repeated some of it for us this afternoon.
Mr. John Morris: Give way.
Hon. Members: Give way.
Mr. Speaker: Order. The Lord Privy Seal is not giving way.
Mr. Biffen: Both the Crossman and Castle diaries are textbooks of the practice, and that has been referred to again and again by my hon. Friends. [Interruption.] I can tell the right hon. and learned Member for Aberaven (Mr. Morris)—
Mr. John Morris: May I ask the Leader of the House two simple questions? Did the Prime Minister canvass her advisers or any Minister before she requested through her office the Solicitor-General to write his letter or to put that letter into the public domain? Secondly, when she set up the inquiry, did she know that it was an official leak? Did she know the salient facts?
Mr. Biffen: Those points have been dealt with by the Prime Minister. [HON. MEMBERS: "No."] The fact that they are being put again and again shows the prejudiced approach by the Opposition. It is an approach symbolised in the language of the Leader of the Opposition in his speech this afternoon, when he said that the Prime Minister was on trial. That is the language of someone whose idea of a trial in the House of Commons is the ethics of the kangaroo court.
My right hon. Friend the Prime Minister has made a reasoned exposition both in the circumstances of the Solicitor-General's letter and of the leak inquiry. It is an exposition which appeals to any fair-minded judgment in the House. We have gone through an episode implying sadness and regret. There is certainly no question whatsoever of implying any shame. The Opposition now show an opportunism possessed only by those hungry for office. Such an appetite bodes ill for the nation and I ask my hon. Friends to reject the argument and the votes of the Opposition.
Question put, That this House do now adjourn:
The House divided: Ayes 219, Noes 379.

Division No. 50]

[6.34 pm

AYES

Adams, Allen (Paisley N)

Bruce, Malcolm

Alton, David

Buchan, Norman

Archer, Rt Hon Peter

Caborn, Richard

Ashley, Rt Hon Jack

Callaghan, Rt Hon J.

Ashton, Joe

Callaghan, Jim (Heyw'd & M)

Atkinson, N. (Tottenham)

Campbell, Ian

Bagier, Gordon A. T.

Campbell-Savours, Dale

Banks, Tony (Newham NW)

Canavan, Dennis

Barnett, Guy

Carlile, Alexander (Montg'y)

Barron, Kevin

Cartwright, John

Beckett, Mrs Margaret

Clark, Dr David (S Shields)

Bell, Stuart

Clarke, Thomas

Benn, Rt Hon Tony

Clay, Robert

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

Clelland, David Gordon

Bermingham, Gerald

Clwyd, Mrs Ann

Blair, Anthony

Cocks, Rt Hon M. (Bristol S.)

Boothroyd, Miss Betty

Cohen, Harry

Boyes, Roland

Coleman, Donald

Bray, Dr Jeremy

Concannon, Rt Hon J. D.

Brown, Gordon (D'f'mline E)

Conlan, Bernard

Brown, Hugh D. (Provan)

Cook, Frank (Stockton North)

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

Cook, Robin F. (Livingston)

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

Corbyn, Jeremy

Brown, Ron (E'burgh, Leith)

Cox, Thomas (Tooting)

687

Craigen, J. M.

McCartney, Hugh

Crowther, Stan

McDonald, Dr Oonagh

Cunliffe, Lawrence

McGuire, Michael

Cunningham, Dr John

McKay, Allen (Penistone)

Dalyell, Tam

McKelvey, William

Davies, Rt Hon Denzil (L'lli)

MacKenzie, Rt Hon Gregor

Davies, Ronald (Caerphilly)

McNamara, Kevin

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

McTaggart, Robert

Deakins, Eric

Madden, Max

Dewar, Donald

Marek, Dr John

Dixon, Donald

Marshall, David (Shettleston)

Dobson, Frank

Martin, Michael

Dormand, Jack

Mason, Rt Hon Roy

Douglas, Dick

Maxton, John

Dubs, Alfred

Maynard, Miss Joan

Dunwoody, Hon Mrs G.

Meacher, Michael

Eadie, Alex

Meadowcroft, Michael

Eastham, Ken

Michie, William

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

Mikardo, Ian

Ellis, Raymond

Millan, Rt Hon Bruce

Evans, John (St. Helens N)

Miller, Dr M. S. (E Kilbride)

Fatchett, Derek

Mitchell, Austin (G't Grimsby)

Field, Frank (Birkenhead)

Morris, Rt Hon A. (W'shawe)

Fields, T. (L'pool Broad Gn)

Morris, Rt Hon J. (Aberavon)

Fisher, Mark

Nellist, David

Flannery, Martin

Oakes, Rt Hon Gordon

Foot, Rt Hon Michael

O'Brien, William

Forrester, John

O'Neill, Martin

Foster, Derek

Orme, Rt Hon Stanley

Foulkes, George

Owen, Rt Hon Dr David

Fraser, J. (Norwood)

Park, George

Freeson, Rt Hon Reginald

Parry, Robert

Freud, Clement

Patchett, Terry

Garrett, W. E.

Pavitt, Laurie

George, Bruce

Pendry, Tom

Gilbert, Rt Hon Dr John

Penhaligon, David

Godman, Dr Norman

Pike, Peter

Golding, John

Prescott, John

Gould, Bryan

Radice, Giles

Gourlay, Harry

Randall, Stuart

Hamilton, James (M'well N)

Redmond, Martin.

Hamilton, W. W. (Fife Central)

Rees, Rt Hon M. (Leeds S)

Hancock, Michael

Richardson, Ms Jo

Hardy, Peter

Roberts, Allan (Bootle)

Harman, Ms Harriet

Roberts, Ernest (Hackney N)

Harrison, Rt Hon Walter

Robertson, George

Hart, Rt Hon Dame Judith

Robinson, G. (Coventry NW)

Hattersley, Rt Hon Roy

Rogers, Allan

Haynes, Frank

Rooker, J. W.

Healey, Rt Hon Denis

Ross, Ernest (Dundee W)

Heffer, Eric S.

Rowlands, Ted

Hogg, N. (C'nauld & Kilsyth)

Ryman, John

Holland, Stuart (Vauxhall)

Sedgemore, Brian

Home Robertson, John

Sheerman, Barry

Howells, Geraint

Sheldon, Rt Hon R.

Hoyle, Douglas

Shore, Rt Hon Peter

Hughes, Dr Mark (Durham)

Short, Ms Clare (Ladywood)

Hughes, Robert (Aberdeen N)

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

Hughes, Roy (Newport East)

Silkin, Rt Hon J.

Hughes, Sean (Knowsley S)

Skinner, Dennis

Hughes, Simon (Southwark)

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

Jenkins, Rt Hon Roy (Hillh'd)

Smith, Cyril (Rochdale)

John, Brynmor

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

Johnston, Sir Russell

Snape, Peter

Jones, Barry (Alyn & Deeside)

Soley, Clive

Kaufman, Rt Hon Gerald

Spearing, Nigel

Kennedy, Charles

Steel, Rt Hon David

Kilroy-Silk, Robert

Stewart, Rt Hon D. (W Isles)

Kinnock, Rt Hon Neil

Stott, Roger

Kirkwood, Archy

Strang, Gavin

Lambie, David

Straw, Jack

Lamond, James

Thomas, Dafydd (Merioneth)

Leadbitter, Ted

Thomas, Dr R. (Carmarthen)

Leighton, Ronald

Thompson, J. (Wansbeck)

Lewis, Ron (Carlisle)

Thorne, Stan (Preston)

Lewis, Terence (Worsley)

Tinn, James

Litherland, Robert

Torney, Tom

Lloyd, Tony (Stretford)

Wainwright, R.

Lofthouse, Geoffrey

Wallace, James

Loyden, Edward

Wardell, Gareth (Gower)

688

Wareing, Robert

Woodall, Alec

Weetch, Ken

Wrigglesworth, Ian

Welsh, Michael

Young, David (Bolton SE)

White, James

Wigley, Dafydd

Tellers for the Ayes:

Williams, Rt Hon A.

Mr. John McWilliam and

Wilson, Gordon

Mr. Ray Powell.

Winnick, David

NOES

Adley, Robert

Cope, John

Aitken, Jonathan

Cormack, Patrick

Alexander, Richard

Corrie, John

Alison, Rt Hon Michael

Couchman, James

Amery, Rt Hon Julian

Cranborne, Viscount

Amess, David

Critchley, Julian

Ancram, Michael

Crouch, David

Arnold, Tom

Currie, Mrs Edwina

Ashby, David

Dickens, Geoffrey

Aspinwall, Jack

Dicks, Terry

Atkins, Rt Hon Sir H.

Dorrell, Stephen

Atkins, Robert (South Ribble)

Douglas-Hamilton, Lord J.

Atkinson, David (B'm'th E)

Dover, Den

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

du Cann, Rt Hon Sir Edward

Baker, Nicholas (Dorset N)

Dunn, Robert

Baldry, Tony

Durant, Tony

Banks, Robert (Harrogate)

Dykes, Hugh

Batiste, Spencer

Edwards, Rt Hon N. (P'broke)

Beaumont-Dark, Anthony

Emery, Sir Peter

Bendall, Vivian

Evennett, David

Bennett, Rt Hon Sir Frederic

Eyre, Sir Reginald

Benyon, William

Fairbairn, Nicholas

Best, Keith

Fallon, Michael

Bevan, David Gilroy

Farr, Sir John

Biffen, Rt Hon John

Favell, Anthony

Biggs-Davison, Sir John

Fenner, Mrs Peggy

Blackburn, John

Finsberg, Sir Geoffrey

Blaker, Rt Hon Sir Peter

Fletcher, Alexander

Body, Sir Richard

Fookes, Miss Janet

Bonsor, Sir Nicholas

Forman, Nigel

Bottomley, Peter

Forsyth, Michael (Stirling)

Bottomley, Mrs Virginia

Forth, Eric

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

Fowler, Rt Hon Norman

Bowden, Gerald (Dulwich)

Fox, Marcus

Boyson, Dr Rhodes

Franks, Cecil

Braine, Rt Hon Sir Bernard

Fraser, Peter (Angus East)

Brandon-Bravo, Martin

Freeman, Roger

Bright, Graham

Fry, Peter

Brinton, Tim

Gale, Roger

Brittan, Rt Hon Leon

Galley, Roy

Brooke, Hon Peter

Gardiner, George (Reigate)

Brown, M. (Brigg & Cl'thpes)

Gardner, Sir Edward (Fylde)

Browne, John

Garel-Jones, Tristan

Bruinvels, Peter

Gilmour, Rt Hon Sir Ian

Bryan, Sir Paul

Glyn, Dr Alan

Buchanan-Smith, Rt Hon A.

Goodhart, Sir Philip

Buck, Sir Antony

Goodlad, Alastair

Budgen, Nick

Gorst, John

Bulmer, Esmond

Gow, Ian

Burt, Alistair

Gower, Sir Raymond

Butler, Rt Hon Sir Adam

Grant, Sir Anthony

Butterfill, John

Greenway, Harry

Carlisle, John (Luton N)

Gregory, Conal

Carlisle, Kenneth (Lincoln)

Griffiths, Sir Eldon

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

Griffiths, Peter (Portsm'th N)

Carttiss, Michael

Grist, Ian

Cash, William

Ground, Patrick

Channon, Rt Hon Paul

Grylls, Michael

Chapman, Sydney

Gummer, Rt Hon John S

Chope, Christopher

Hamilton, Hon A. (Epsom)

Churchill, W. S.

Hamilton, Neil (Tatton)

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

Hampson, Dr Keith

Clark, Dr Michael (Rochford)

Hanley, Jeremy

Clark, Sir W. (Croydon S)

Hannam, John

Clarke, Rt Hon K. (Rushcliffe)

Hargreaves, Kenneth

Clegg, Sir Walter

Harris, David

Cockeram, Eric

Harvey, Robert

Colvin, Michael

Haselhurst, Alan

Conway, Derek

Havers, Rt Hon Sir Michael

Coombs, Simon

Hawkins, C. (High Peak)

689

Hawkins, Sir Paul (N'folk SW)

Luce, Rt Hon Richard

Hawksley, Warren

Lyell, Nicholas

Hayes, J.

McCrindle, Robert

Hayhoe, Rt Hon Barney

McCurley, Mrs Anna

Hayward, Robert

Macfarlane, Neil

Heath, Rt Hon Edward

MacGregor, Rt Hon John

Heathcoat-Amory, David

MacKay, Andrew (Berkshire)

Heddle, John

MacKay, John (Argyll & Bute)

Henderson, Barry

Maclean, David John

Heseltine, Rt Hon Michael

McNair-Wilson, M. (N'bury)

Hickmet, Richard

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

Hicks, Robert

McQuarrie, Albert

Higgins, Rt Hon Terence L.

Madel, David

Hill, James

Major, John

Hind, Kenneth

Malins, Humfrey

Hirst, Michael

Malone, Gerald

Hogg, Hon Douglas (Gr'th'm)

Maples, John

Holland, Sir Philip (Gedling)

Marland, Paul

Holt, Richard

Marlow, Antony

Hordern, Sir Peter

Marshall, Michael (Arundel)

Howard, Michael

Mates, Michael

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

Maude, Hon Francis

Howarth, Gerald (Cannock)

Mawhinney, Dr Brian

Howe, Rt Hon Sir Geoffrey

Maxwell-Hyslop, Robin

Howell, Rt Hon D. (G'ldford)

Mayhew, Sir Patrick

Howell, Ralph (Norfolk, N)

Mellor, David

Hubbard-Miles, Peter

Merchant, Piers

Hunt, David (Wirral, W)

Meyer, Sir Anthony

Hunt, John (Ravensbourne)

Miller, Hal (B'grove)

Hunter, Andrew

Mills, Iain (Meriden)

Hurd, Rt Hon Douglas

Mills, Sir Peter (West Devon)

Irving, Charles

Miscampbell, Norman

Jackson, Robert

Mitchell, David (Hants NW)

Jenkin, Rt Hon Patrick

Moate, Roger

Jessel, Toby

Monro, Sir Hector

Jones, Gwilym (Cardiff N)

Montgomery, Sir Fergus

Jones, Robert (Herts W)

Moore, Rt Hon John

Jopling, Rt Hon Michael

Morris, M. (N'hampton, S)

Joseph, Rt Hon Sir Keith

Morrison, Hon C. (Devizes)

Kellett-Bowman, Mrs Elaine

Morrison, Hon P. (Chester)

Kershaw, Sir Anthony

Moynihan, Hon C.

Key, Robert

Mudd, David

King, Roger (B'ham N'field)

Murphy, Christopher

King, Rt Hon Tom

Neale, Gerrard

Knight, Greg (Derby N)

Needham, Richard

Knight, Dame Jill (Edgbaston)

Nelson, Anthony

Knowles, Michael

Neubert, Michael

Knox, David

Newton, Tony

Lamont, Norman

Nicholls, Patrick

Lang, Ian

Norris, Steven

Latham, Michael

Onslow, Cranley

Lawler, Geoffrey

Oppenheim, Phillip

Lawson, Rt Hon Nigel

Oppenheim, Rt Hon Mrs S.

Lee, John (Pendle)

Osborn, Sir John

Leigh, Edward (Gainsbor'gh)

Ottaway, Richard

Lennox-Boyd, Hon Mark

Page, Sir John (Harrow W)

Lester, Jim

Page, Richard (Herts SW)

Lewis, Sir Kenneth (Stamf'd)

Parkinson, Rt Hon Cecil

Lightbown, David

Parris, Matthew

Lilley, Peter

Patten, Christopher (Bath)

Lloyd, Ian (Havant)

Patten, J. (Oxf W & Abdgn)

Lloyd, Peter (Fareham)

Pattie, Geoffrey

Lord, Michael

Pawsey, James

690

Peacock, Mrs Elizabeth

Stewart, Andrew (Sherwood)

Percival, Rt Hon Sir Ian

Stewart, Ian (Hertf'dshire N)

Pollock, Alexander

Stokes, John

Porter, Barry

Stradling Thomas, Sir John

Portillo, Michael

Sumberg, David

Powell, William (Corby)

Tapsell, Sir Peter

Powley, John

Taylor, John (Solihull)

Prentice, Rt Hon Reg

Taylor, Teddy (S'end E)

Price, Sir David

Temple-Morris, Peter

Prior, Rt Hon James

Terlezki, Stefan

Proctor, K. Harvey

Thatcher, Rt Hon Mrs M.

Pym, Rt Hon Francis

Thomas, Rt Hon Peter

Raffan, Keith

Thompson, Donald (Calder V)

Rathbone, Tim

Thompson, Patrick (N'ich N)

Rees, Rt Hon Peter (Dover)

Thorne, Neil (Ilford S)

Rhodes James, Robert

Thornton, Malcolm

Rhys Williams, Sir Brandon

Thurnham, Peter

Ridley, Rt Hon Nicholas

Townend, John (Bridlington)

Ridsdale, Sir Julian

Townsend, Cyril D. (B'heath)

Rifkind, Rt Hon Malcolm

Tracey, Richard

Rippon, Rt Hon Geoffrey

Trippier, David

Roberts, Wyn (Conwy)

Trotter, Neville

Robinson, Mark (N'port W)

Twinn, Dr Ian

Roe, Mrs Marion

van Straubenzee, Sir W.

Rossi, Sir Hugh

Vaughan, Sir Gerard

Rost, Peter

Viggers, Peter

Rowe, Andrew

Waddington, David

Rumbold, Mrs Angela

Wakeham, Rt Hon John

Ryder, Richard

Waldegrave, Hon William

Sackville, Hon Thomas

Walden, George

Sainsbury, Hon Timothy

Walker, Bill (T'side N)

St. John-Stevas, Rt Hon N.

Walker, Rt Hon P. (W'cester)

Sayeed, Jonathan

Waller, Gary

Scott, Nicholas

Walters, Dennis

Shaw, Giles (Pudsey)

Ward, John

Shaw, Sir Michael (Scarb')

Wardle, C. (Bexhill)

Shelton, William (Streatham)

Warren, Kenneth

Shepherd, Colin (Hereford)

Watson, John

Shepherd, Richard (Aldridge)

Watts, John

Shersby, Michael

Wells, Bowen (Hertford)

Silvester, Fred

Wells, Sir John (Maidstone)

Sims, Roger

Wheeler, John

Skeet, Sir Trevor

Whitfield, John

Smith, Sir Dudley (Warwick)

Whitney, Raymond

Smith, Tim (Beaconsfield)

Wiggin, Jerry

Soames, Hon Nicholas

Wilkinson, John

Speed, Keith

Winterton, Mrs Ann

Speller, Tony

Winterton, Nicholas

Spence, John

Wolfson, Mark

Spencer, Derek

Wood, Timothy

Spicer, Jim (Dorset W)

Woodcock, Michael

Spicer, Michael (S Worcs)

Yeo, Tim

Squire, Robin

Young, Sir George (Acton)

Stanbrook, Ivor

Younger, Rt Hon George

Stanley, Rt Hon John

Steen, Anthony

Tellers for the Noes:

Stern, Michael

Mr. Carol Mather and

Stevens, Lewis (Nuneaton)

Mr. Robert Boscawen.

Stewart, Allan (Eastwood)

Question accordingly negatived.

Orders of the Day

  Airports Bill
  Order for Second Reading read.
  Mr. Speaker Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the leader of the Liberal party.
  6.47 pm
  The Secretary of State for Transport (Mr. Nicholas Ridley): I beg to move, That the Bill be now read a Second time.
  The Bill fulfils the commitment to legislate that we made in the airports policy White Paper which was published last June and which the House then welcomed. It establishes a framework for the structure, ownership, operation and regulation of the United Kingdom's airports for the rest of this century and beyond.
  The structure and ownership of airports has changed and evolved as necessary to meet the demands of the civil air transport industry which, over the past 50 years, has grown rapidly and become one of the most successful and dynamic sectors of the economy. I shall not go into the history of airports; I shall start with the 1961 White Paper "Civil Aerodromes and Air Navigational Services" which proposed the decentralisation of airport ownership. The principal airports serving London and Scotland —Heathrow, Gatwick, Stansted and Prestwick— were to be transferred to an airports authority while local ownership and control were to be further extended to a number of airports primarily serving local needs. Glasgow, Edinburgh and Aberdeen airports were later added to the four originally transferred to the British Airports Authority. Apart from this, the White Paper set the pattern of ownership that has existed to the present day.
  The airports industry is now a mature and, in many cases, expanding and highly profitable sector of the economy. It is high time that we changed the regime under which it operates to liberate management from the constraints of public ownership. Our objective must be to remove the burden of political interference and state control so that airports, airlines and their customers can reap the benefits. The record of the 20 or so companies privatised since 1979 has proven the advantages of private ownership beyond doubt. We intend to add airports to that success story.
  Part I of the Bill provides the powers to enable the privatisation of the British Airports Authority; it vests the industry's assets in a successor company as the first step towards privatisation. Clause I provides powers to require the BAA to be restructured while it is still a nationalised industry and before its assets are transferred to a successor company. The Bill does not specify how the BAA is to be restructured and offered for sale, but I want to tell the House what our intentions are in that respect.
  We intend to privatise the BAA as a whole. Some of my hon. Friends think that each of the BAA's seven airports should be privatised separately. I, too, found that idea initially attractive. I believe in maximum competition. That, indeed, is one of the serious criticisms under which I labour. But I examined the structure of the airports industry in detail and I was forced to conclude that splitting up the airports would bring no real advantages
  692
  since it would be impossible to see any practical way to create effective competition between the individuial BAA airports in a system.
  Not only would it be impossible to create competition, but there would be some important disadvantages. The Select Committee on Transport in its report on July 1984 and the Select Committee on Scottish Affairs in its subsequent report on airports in January 1985, took the same view. Where we have more than one airport in a system serving one area, they cannot effectively compete on price. Airlines will always seek to maximise their revenue by concentrating services at the most favoured airport. The economic benefits to airlines of such concentration are far greater than any direct competition between airports on airport charges could hope to match. Airport charges are, on average, only 3·5 per cent. of an international scheduled airline's costs. Our international obligations prevent airlines from raising charges to a level which would reflect the true value of access to the most favoured airports and thus preclude effective price competition.
  Airports within a system cannot compete effectively on the facilities they offer—particularly in the south-east, where Heathrow and Gatwick are nearing the limits of their capacity and the scope for further development is strictly limited. If the airports were privatised separately, so that the BAA could not use Stansted to take the overflow front Heathrow and Gatwick and to enable new services to develop, the consequences for airline passengers and for airline competition would be disastrous. The tendency of any airport with little scope for expansion would be to maximise the profitability of the capacity it had, by encouraging more profitable traffic in the form of larger aircraft, and squeezing out airlines using smaller aircraft —in particular, domestic ad feeder services.
  To correct this, the Government would have to take a strongly interventionist role to direct traffic to which airport it could use, thus effectively holding in their hands the prospects of profitability or otherwise of each airport That entirely frustrates the concept of equal, fair competing units. It makes the case for privatisation of the BAA as a whole. I am sure it is right to restructure the BAA into seven separate subsidiary companies under a holding company.
  Mr. Bowen Wells: The other side of the argument surely is that if the airports were denationalised separately, the most successful airport would expand to its full capacity, whereas, under the present arrangements, and if the BAA is denationalised as a whole, that incentive to maximise the efficiency and productivity of one unit will be sacrificed.
  Mr. Ridley: First, Heathrow and Gatwick are close to their capacity. In a few years' time, I do not believe there will be room for any more services into those airports.
  Secondly, the effect of privatising Heathrow and Gatwick separately would be that the managers of the airport would seek to exclude all the less profitable traffic. We should find that domestic and feeder routes were being excluded from the airport which Londoners believe is the one nearest to them and the one to which people from other parts of the country feel that they should have access when they visit London. Those would be undesirable results.
  Dr. Alan Glyn: My right hon. Friend mentioned the expansion of Heathrow. When

  693
  the airport is privatised, will there be anything to prevent it from being enlarged and the number of flights increased? Will the Secretary of State have any control over the number of flights? What will happen about Perry Oaks?
  Mr. Ridley: I hope that my hon. Friend will forgive me if I do not go into the subject of Perry Oaks at length. It hardly arises under the Bill. The problems of Perry Oaks and whether it can be moved are being studied by the Thames water authority and the BAA. If there is a report, it will be made available. The problems there are great.
  Mr. Toby Jessel rose—
  Mr. Ridley: May I just finish my answer to my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn)?
  My hon. Friend asked about powers to control flights into Heathrow. The number of flights is limited by its physical capacity. We have no intention of allowing greatly different hours during the day or night. Moreover, if in the future it is felt desirable—I am not proposing this—the Bill contains powers which would enable an air transport movement limit to be imposed on Heathrow. I repeat that I have no present plans to do that.
  Mr. Jessel: My hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) raised a serious point. People in many constituencies around Heathrow are worried about the environment and protection from aircraft noise. Can my right hon. Friend confirm that the Government's policy to protect the environment remains as stated in his White Paper last June? In particular, will he confirm that the Government do not intend to do anything which will increase the number of night flights allowed?
  Mr. Ridley: I confirm that the section in the White Paper on the environment still applies. The points do not feature in the Bill because environmental considerations are taken care of in the Civil Aviation Act 1982. Arrangements for banning night flights are contained in that Act. The powers will remain. My hon. Friend is probably aware that a review of present night flight restrictions is taking place. When I receive the report from the consultants, it will be made public, and he may submit any views that he has on that report. That activity is taking place separately; it has nothing to do with the Bill.
  Mr. Robert C. Brown: The Secretary of State justifies denationalisation as a whole on the ground that it would be better and would prevent the owner of, for example, Heathrow freezing out less profitable flights. Whichever way the denationalisation is carried out, surely there is the shrine called market forces at which, I understand, the right hon. Gentleman worships. Market forces being what they are, is there not a grave danger that the present flights from Newcastle into Heathrow could be squeezed out to Stansted or Gatwick?
  Mr. Ridley: The hon. Gentleman should listen to what I say. I said that it was important that we should not allow that to happen. That was one of the main reasons why it would not make good sense to privatise the airports separately, if the House, as I believe it does, wishes to have some control over traffic movement at the various airports. He will find that that philosophy is firmly advanced in the White Paper, the Bill and what I am
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  saying. I do not know why he thinks that I should worship at the shrine of free market forces when we are discussing which aircraft should land at which airport. A public interest is involved, which I intend to maintain.
  Mr. Anthony Steen: As the Secretary of State knows, I am a great supporter of the Bill and would like to assist him if I can. Does he agree that we should get the most out of the existing system and that the national air traffic control services may well have more capacity than is presently being heard about? Is he aware that the Ministry of Defence is holding 30 per cent. of the air transport movements in and out of Gatwick and Heathrow and that that is preventing the natural expansion of more and quieter planes into Heathrow and Gatwick? The Secretary of State need not assume more centralised control of the movement of planes if he managed to have an inquiry into the operation of NATCS and how the Ministry of Defence is preventing the natural growth of Heathrow and Gatwick.
  Mr. Ridley: I must leave such technical considerations to the responsibility of the Civil Aviation Authority because safety is involved. I am adamant that safety shall be the responsibility of the CAA and shall be paramount in the matter. I would not suggest that the House would wish to go beyond what the CAA believes to be the maximum technical number of flights landing at any airport at the present time.
  I understand that the BAA may suggest an intermediate Scottish holding company to co-ordinate the management of the Scottish airports. Privatisation will open the door to a new future which will provide incentives for management in an increasingly commercial and competitive world. It will innovate, increase efficiency and provide the services that the customers want, at the right price and of the right quality. The offer of shares to employees will give them real involvement in their airport's performance and a stake in its future. I am confident that this is the way to provide better services for the airlines and for their customers. I am confident, having read the Leader of the Opposition's views on this, and despite what the hon. Member for Aberdeen, North (Mr. Hughes) is presumably about to say, that the Opposition really agree and that this will not be a matter to which they will wish to return if ever they had the opportunity to do so.
  I recognise that the BAA will continue to have a near-monopoly position in the private sector. But customer preference is such that, even if the airports were privatised separately, Heathrow would enjoy a near-monopoly position. Accordingly, the Bill provides for a tough regulatory system that will protect airlines and their passengers and airport competitors from abuses of any airport's monopoly position. I shall come to that later.
  Those thoughts apply equally to the major local authority airports. Over the past few years, traffic at regional airports has grown at similar rates, and at some airports at higher rates than the BAA's airports. The main regional airports are substantial businesses and they, too, should operate in a proper commercial environment. Part II of the Bill provides for the major local authority airports to be released into the commercial world in which they belong.
  The Bill will enable me to require major local authority airports—those with a turnover of over £1 million—to

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  be reconstituted as public limited companies. They will continue to be wholly owned by the relevant local authorities. Clauses 12, 13 and 14 of the Bill provide the necessary powers. I would like to see local authorities introduce private capital into their airport companies, but I do not intend to oblige them to do so. I know that that disappoints some of my hon. Friends, particularly those from the north-west; but I ask them whether it would be right to compel local authorities to privatise. I hesitate to suggest support from the Labour party on this. It would create a dangerous precedent.
  I hope instead that local authorities will come to see the advantages of privatisation. The Bill makes that possible, and clause 24 will prevent local authorities from placing restrictions on the disposal of shares.
  The Bill also ensures that there is a proper arms length relationship between the new airport companies and their parent authorities so that airport companies will have proper commercial freedom. It provides for the boards of the airport companies to include full-time airport executives, and not simply to consist of local councillors. It limits the services that local authorities can provide to airport companies, and such services as may be provided will have to be at commercial rates. The Government believe that airport companies should be free to buy in services by competition in the best interests of the company. The directors of the airport company will have a duty under the Companies Acts to act in the best interests of the company, which may not necessarily coincide with the interests of their own local authority. I think that that is an important change which will lead to greater efficiency.
  Mr. Tony Favell: Does my right hon. Friend consider that a municipal airport controlled by a local authority and subject to political control will be able to operate and compete fairly with the privatised airports of the south-east?
  Mr. Ridley: I think that is doubtful. I agree with my hon. Friend, but it seems that that extremely pertinent and thrusting question should be addressed to local authorities rather than to me. I was in Luton today and made the same suggestion to the council there. I am sure that it is right to convince them of that rather than to use powers to force them.
  Mr. John Carlisle: We were pleased to see the Secretary of State in Luton today. Will he confirm that any councillors who might be elected to any privatised board will still be able to carry out their full council duties and be able to report on their activities to the council?
  Mr. Ridley: Yes. I am not an expert on local authority rules, but I am sure that a councillor can be a director of an airport company. It might be, if there were some planning application from the airport, that the councillor would not be able to vote or be present on a matter where there is an inter-reaction between the two. However, in principle my hon. Friend is right.
  Mr. David Ashby: Does my right hon. Friend consider that, since the ownership of the company is with the shareholders, the substitution of the local authority as shareholders for the present public ownership is no privatisation at all? It will give little satisfaction to people such as those in my area in the east midlands, who would like to see their airport privatised.
  Mr. Ridley: I absolutely agree. I made it clear that we are not privatising local authority airports. We are making it easy for them to privatise if they see the advantages —as my hon. Friends the Members for Luton, North (Mr. Carlisle) and for Leicestershire, North-West (Mr. Ashby) and I clearly do.
  Mr. Robert Hughes: In answer to the hon. Member for Luton, North (Mr. Carlisle), is it not the case that the Bill makes it clear that no paid director or any employee of the plc can be a member of or elected to the local authority? Does it also not make it clear that an unpaid director may be a member of the local authority but may not speak or vote in any of the proceedings relating to the airport, except by committing a criminal offence?
  Mr. Ridley: That is right. However, my hon. Friend the Member for Luton, North asked whether a councillor could be a director of a privatised airport. That would be totally different.
  Mr. Peter Snape: The Secretary of State says he is not privatising.
  Mr. Ridley: We are not privatising. The hon. Gentleman is thicker than usual tonight. Let me explain it for the benefit of the extremely thick hon. Gentleman.
  The Bill allows for airports to be made into plcs. If they remain in the public sector, owned by the local authority, what the hon. Member for Aberdeen, North said applies. If a local authority sells its shares, the airport becomes privately owned. Even the hon. Member for West Bromwich, East (Mr. Snape) must understand that. In that case, when the airport is privatised, my answer to my hon. Friend the Member for Luton, North applies.
  Mr. Robert Hughes: Over 51 per cent.
  Mr. Ridley: Over 51 per cent.
  As companies, major local authority airports will be required to produce and publish Companies Act accounts — a discipline which in itself will foster a more commercial and businesslike approach. The Bill also extends that businesslike approach to investment. Investments financed from an airport's undistributed surplus will no longer come within the capital control system and will no longer need Government approval. Investment financed from external sources will, of course, remain subject to the Government's capital expenditure controls whilst the company remains within the public sector. If, however, the local authority concerned chooses to privatise an airport, the investment will be free of those controls.
  Mr. Alfred Morris: Following his extraordinary reply to the hon. Member for Stockport (Mr. Favell) about airports under local authority control, may I ask whether the Secretary of State is aware that Manchester international airport has always been under local authority control? Is he further aware that it has competed with great success against other airports, not least subsidised Stansted?
  Mr. Ridley: The right hon. Gentleman must also consider whether the airport might have done better if it had been under private enterprise management. Those airport companies are now major concerns and the interests of the companies must take precedence over the interests of the council. That is a matter to be determined

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  locally, in each case, but the advantages of going into the private sector are clear. The disadvantages are beginning to come out from what I have been saying, including the point about capital control, which the right hon. Gentleman may have noticed.
  The major airports, as near-monopolies, will be regulated in the future. Part IV of the Bill gives the Civil Aviation Authority powers to regulate airport charges and trading practices.
  Mr. Robert McCrindle: Before my right hon. Friend floats on to part IV, may I ask whether he has anything to say about part III? Many promises have been given about the consultation with airlines and airport authorities that my right hon. Friend envisages. Is there any possibility of the creation of a more formal consultation procedure? Many people are worried that, with all the offers of informal consultation, there seems to be no end point. Will my right hon. Friend take that matter on board? Can we reconsider the matter in Committee and create a more formal consultation procedure under part III?
  Mr. Ridley: I have to disappoint my hon. Friend. I shall come to part III at the end of my speech. I do not believe that the difference between formal and informal consultations is as important as the consultations themselves. However, if my hon. Friend has a problem with that, I shall be only too happy to see whether we can meet him in Committee or in any other manner.
  Part IV of the Bill gives the CAA powers to regulate airport charges and trading practices. That is a natural extension of its existing role as regulator of civil air transport and airports for safety purposes. All airport activities will be subject to normal competition law. The CAA will exercise more specific regulatory functions over airport charges and core airport activities that are essential for the use of an airport for air transport, such as operating runways, aircraft servicing facilities and passenger and baggage handling facilities. Clauses 34 and 35 require operators of airports to obtain and retain the CAA's permission to levy airport charges, and the CAA will be able to attach conditions to any permission.
  There will be two tiers of regulation. Airports with a turnover of over £1 million will automatically be subject to the first tier. The second tier will apply to the largest airports that enjoy a substantial amount of national or local monopoly. Those second-tier airports will be designated by order. At all airports, the CAA will have the power to impose the conditions described in clause 38—to require proper and separate accounts, to prevent or remedy any discriminatory charges or trading practices or abuse of a monopoly position, and to prevent predatory pricing. Clause 37 makes special additional provision for designated second-tier airports.
  Mr. Favell: On this very important point, will my right hon. Friend state whether Stansted comes under the first or second tier? If my right hon. Friend remembers the debate on Stansted, he will realise that it is immensely important for regional airports to know whether Stansted will be subject to maximum supervision. Will he give an assurance tonight that Stansted will be subject to the maximum supervision?
  Mr. Ridley: Yes, indeed. Stansted will be in the second tier and will be subject to further measures that I shall come to later.
  No firm decisions have yet been taken, but it is my intention to designate at least the BAA's south-east airports, which include Stansted, and Manchester. At those airports, the CAA will have a duty to regulate airport charges through a price formula and to require transparency of accounts. Every five years, the Monopolies and Mergers Commission will carry out an investigation of a designated airport's business. It will make recommendations on any practices found to be against the public interest and also recommend what limit should apply to airport charges over the following five years.
  We are the first country to privatise airports and therefore the first to set up a regulatory regime. I believe that it strikes the right balance between the need to ensure that airport companies can flourish within the private sector and the need for a fair deal for the customer. The CAA's new duties in clause 36 reflect that balance.
  The Bill makes provision in part III for the regulation of airport use. We have to accept that airlines and airports do not operate in an entirely free market. International services are governed by international agreements between Governments within the framework of international conventions. The powers of direction in clause 27 are needed primarily to ensure that airports comply with the United Kingdom's international obligations — for example, in respect of landing charges. The other three provisions of part III deal respectively with traffic distribution rules, limits on air transport movements and slot allocation schemes. They recognise the limitations on airport capacity and merely acknowledge the Government's responsibility to ensure that powers exist for using that limited capacity in the most effective way.
  Mr. Fred Silvester: My right hon. Friend said that the reason why he could not privatise the BAA as separate airports was to safeguard access from regional airports. Why can he not impose the necessary regulation under the powers that he is now describing, to protect regional airports, while privatising the BAA as separate airports?
  Mr. Ridley: The traffic distribution powers, to which I shall refer, would not enable a positive policy to be applied, which I believe to be important in relation to domestic flights. We would be able to suggest a negative policy for containing excess demand. That is the point of all three measures. When Heathrow and Gatwick reach capacity, something must be done about that. One cannot just have more aircraft—[HON. MEMBERS: "That is the market."] If the market is allowed to do that, the domestic flights will have to go elsewhere.
  Mr. Terry Dicks: The logic of my right hon. Friend's argument is clear. In those circumstances, the market will dictate what happens. If airlines find that they cannot get the slot or the access to Heathrow, of their own volition they will move to Gatwick or Stansted. The Government are imposing something that takes the market away from its natural method.
  Mr. Ridley: It is not a natural market, because Heathrow is the most attractive and is close to London, Gatwick is next and Stansted is third. The attraction of

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  Heathrow is so enormous that the pressures to get into it have always been the dominant factor. We have to take powers to ensure that there is public control over that.
  Mr. Gerald Howarth: Like my right hon. Friend, I am a friend of the market. On what basis have the Government formed the view that a privately controlled Heathrow would seek to keep out the feeder services? They must realise that it is, in part, the feeder services that provide the strength of the interlining operations.
  Mr. Ridley: Not only a privatised but a publicly owned Heathrow had those itchings in the past, and it has been necessary to frustrate them. That bears out what I said.
  Mr. Roger Gale: My right hon. Friend referred to the free market. How free a market does he intend to permit in airport services? How heavy a hand is the Monopolies and Mergers Commission likely to apply to the relationship between the development of those services and what appears to be the hidden subsidy of landing fees?
  Mr. Ridley: My hon. Friend will know that that is a complex matter and that there are international agreements about precisely what revenue from non-aviation enterprises may be devoted to the reduction of airport charges. Those are constrained by international obligation.
  Within the aviation services, the runway, the baggage handling and the various services mentioned by my hon. Friend, the CAA will have the role of ensuring that the services are not used discriminatingly against the interests of any particular airline by charging twice as much for baggage handling for airline A as it charges for airline B. That is a necessary protection and the Monopolies and Mergers Commission can ensure that such services are provided efficiently. It would obviously be desirable for a privatised airport company to contract out such services in order to gain the maximum efficiency in performance.
  First, clause 28 allows the Government to make traffic distribution rules that will set the strategic aims for the operations of airport systems within which those airports may develop. Rules may be made only after I have consulted and received advice from the CAA, which will be required to consult airport and airline operators that have an interest. I have already asked the CAA to review and advise on the current rules for traffic distribution in the London system. The CAA has undertaken a wide consultation exercise, involving airports, airlines and a range of other bodies. I expect to receive its final advice in the spring.
  Secondly, clause 29 empowers me to set limits on air transport movements at airports, after consultation with the CAA, the airport operator and the airlines affected. This is not a power that can or should be used lightly, as we discovered last year. It is a tool intended to ensure that the development of our airports strikes the right balance between traffic growth and its effects on the surrounding area. I undertook last summer that in approving the development of Stansted to an eventual capacity of 15 million passengers per annum, I would seek the approval of the House to set an ATM limit which will enable the first phase of development to be limited to 7 million to 8 million passengers per annum. Thereafter, increases in the ATM limit and, therefore, decisions on the appropriate
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  rate of traffic growth at Stansted will be for Parliament to determine. I have no present intention to set ATM limits at any other airports.
  Thirdly, clause 30 allows me to require the CAA to prepare schemes for allocating slots at individual airports again, in consultation with relevant airport and airline interests. I envisage no immediate need for this power to be used. The scheduling committee system is working well, but is undoubtedly coming under pressure. As airports such as Heathrow and Gatwick reach their full capacity, with demand still rising, the pressure upon slots continues to grow. There may well come a time when voluntary agreements among airlines cannot cope or begin to work in a way which is contrary to the national interest. I want this power to be in place to insure against that eventuality, but it is very much a reserve power.
  The White Paper set out clearly our policy objectives for the future for the aviation industry as a whole and for airports in particular. This Bill provides for the implementation of that policy. It takes a radical step forward—one which other airports around the world are watching keenly. The Bill propels the ownership and structure of airports into a commercial and entrepreneurial future, while still providing the right degree of protection for airlines and passengers. It will bring profound and lasting benefits to airports, their customers and to the eĊonomy as a whole, thus ensuring that the United Kingdom remains a world leader in aviation. I commend it to the House.
  7.26 pm
  Mr. Robert Hughes: I begin by paying a tribute to all those involved in the British Airports Authority, management and employees alike. It was distinctly uncivil of the Secretary of State to leave that out of his speech. A fulsome tribute ought to be paid to those people who have made a contribution to providing an efficient service catering for the transport needs of the airlines and the millions of customers who pass through the airports during the year.
  Not for the first time, the Secretary of State for Transport is presenting to the House a Bill that is totally irrelevant to his departmental responsibilities. The Bill cannot be justified by any transport criteria, and indeed none has been advanced today. No criticism has been made of the British Airports Authority on the grounds of efficiency, however narrowly defined, because we all know that the BAA has been consistently profitable for a number of years. The BAA has not been criticised for its failure to meet its responsibilities to the airlines or to the travelling public. The only criticism that has been made of the BAA, not today but a couple of years ago, concerned the steep increase in landing charges that took place in 1979–80. That took place purely, simply and directly as a result of the Government setting very stiff financial controls.
  No international experience is being prayed in aid; in fact, the Secretary of State made a virtue of the fact that no other country in the world has proceeded along the lines he is following in relation to privatising an airport system. No other country with a comparable number of airports of such strategic importance is proceeding in the way suggested by the Secretary of State.
  Although it may be a contradiction in terms, the Secretary of State is driven both by sheer naked dogma and by expediency. The dogma is that private enterprise must

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  be given the chance to get its hands on the profits at the expense of the nation. I was surprised that the Secretary of State did not mention in his speech that he is writing off about £43 million of capital debt before the company is sold. That is a nice tidy sum and a nice tidy sweetener to the prospective new owners simply to write off £43 million.
  That is, of course, in keeping with the character of the Government. Almost every privatisation project has allowed for massive sums of money to be written off. That is profligacy with the public purse, as it is the taxpayer's money that is being misused. The Secretary of State should be thoroughly ashamed of himself. Of course we know that he is not. He is the archetypal example of his master's voice. The Prime Minister tells him what to do and he does it. The Prime Minister has told him that it is expedient to raise as much cash as possible for the Treasury, to build up a kitty that can be used to give tax cuts to the Prime Minister's friends. Even if the Prime Minister were to succeed in doing that — and Treasury Ministers are busily back-pedalling as fast as they can about the promised tax cuts—she will not save the Government from defeat at the next election.
  The Secretary of State said a lot in his speech but on the other hand he also left a great deal out. He did not say anything about how much money he expects to realise from the sale. That is a significant omission. We know that the fixed assets have been valued precisely at £1,179·2 million and that does not translate exactly into what might be raised from the sale. How much is the Secretary of State expecting to raise — £500 million or £700 million or some other figure? We have a right to know.
  We also have a right to know how much the Secretary of State's agents will get from the sale. If there are any sure winners in the privatisation process, it is the agents who handle the sale.
  There are many questions that still require an answer from the Secretary of State. He sought to give some answers but none of these were very satisfactory. He has the power under clause 1 to direct the British Airports Authority to submit proposals for the organisation of the new company. He has the power to agree these with or without modification. If he wishes to modify them he can secure modifications, in the words of the Bill, as "he thinks fit".
  The Secretary of State has told us that he wishes to keep the British Airports Authority together. He said that there was some proposition that the Scottish airports would be under a separate holding company. It looks as though there will be a holding company for the British airports, a subsidiary holding company for Scottish airports and seven airports all as separate subsidiaries. That raises many questions. For example, how will the Secretary of State maintain the integrity of the whole system after privatisation?
  Mr. Peter Fry: Why should the hon. Gentleman's constituents in Aberdeen pay ticket prices based on landing charges at Prestwick, thus subsidising an enormous loss-maker? Is it not time to change the organisation of the Scottish airports so that the future viability of Prestwick and whether it should be kept as an airport can be assessed?
  Mr. Hughes: No doubt the hon. Gentleman's information is reliable and put forward in good faith, but I am advised that Prestwick is not a monumental loss-maker and that its problems are not a severe drain on BAA funds. I believe that the problems of Prestwick have been grossly exaggerated. No doubt my hon. Friend the Member for Cunninghame, South (Mr. Lambie) will wish to go into that in greater detail.
  Mr. David Marshall: Does my hon. Friend agree that for many years Prestwick subsidised the other Scottish airports until they were built up and able to make a profit?
  Mr. Hughes: I accept that. We shall have to look very closely in Committee at the process of cross-subsidisation, and questions such as who is to pay for the development of Stansted will have to be asked.
  Two matters relating to the conditions of sale are not mentioned at all in the Bill. First, as the Bill is drafted there is nothing to prevent shares being purchased by foreign interests which might seek to influence air traffic policy. I hope that no one will take this example as gospel, but the French have problems with Charles de Gaulle and Orly airports and might wish to take a substantial stake in the new British Airports Authority to exercise an influence and affect traffic movements. The Secretary of State will doubtless argue that under clause 27 he has powers of direction in the interests of national security and the discharging of international obligations, but I believe that it would be far better to write these matters into the Bill so that we know where we stand.
  Secondly, nothing in the Bill inhibits airlines from buying a controlling share in the BAA and exercising an influence to protect their operations to the detriment of their competitors. The Secretary of State, who is taking remarkably little interest in what is going on, may be relying on references to the Monopolies and Megers Commission, but anyone who has had dealings with that machinery knows that it is extremely cumbersome and slow to react. Again, I believe that it would be much better to write this into the Bill, although I appreciate that there may be difficulties in defining an airport owner, as there may be all kinds of subsidiaries. Nevertheless, we must get this right and it should be done in the Bill.
  Mr. Patrick Ground: What kind of limitation on shareholding does the hon. Gentleman propose? Would it be by numbers of shares or by reference to the identity of the shareholder, or would it be some other form of control?
  Mr. Hughes: I much prefer to have no foreign ownership at all and no airline shareholdings in the BAA. The latter point could be solved by limiting the proportion of shares held by airlines to below that number that would allow them to nominate a director. I give notice that we shall wish to pursue those questions in detail in Committee.
  Questions of accounting will also have to be probed in detail, especially the way in which the Government intend the transparency of accounting by subsidiaries to operate. If the Secretary of State is worried about cross-subsidisation, we need a much clearer idea both from him and in the Bill as to how the accounting procedures will operate.
  A year ago the Secretary of State tried to introduce a Bill giving him powers over aircraft traffic movements,

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  without explaining his general policy. That Bill received a Second Reading and went into a Standing Committee which, in effect, threw it out. He has now come back with another Bill which, in essence, amounts to the same thing. We have been told no more and no less than we were told 12 months ago. The Secretary of State should write his policy clearly into the Bill and tell us exactly how much parliamentary scrutiny there will be.
  Since I first read the Bill I have been asking why we need it at all. Sheer dogma has been the only believable explanation so far. The Secretary of State and others who wish to pursue privatisation say that it will achieve two things. First, it will remove the financial constraints exercised through the external financing limit. Secondly, it will allow the BAA to expand its business horizons. For example, the BAA could go in for hotel and recreational developments. It is not long since the Secretary of State's predecessor compelled British Rail to sell its hotels because they were not central to its operations, so there is inconsistency and hypocrisy, if nothing else, in the present proposal.
  The objectives of access to external finance and wider business horizons could both have been achieved within the public sector. I have long believed that public industry has been unnecessarily constrained and restricted in its opportunities to compete with private enterprise. The solution proposed by the Secretary of State has nothing to do with the health and competitiveness of the industry and everything to do with dogma.
  The same applies to the local authority airports. For 40 years the local authorities have shown dedication and far-sightedness in developing their airports policy. They have taken wise investment decisions and the benefits to our airports system should be welcomed. Now that they are beginning to see the fruits of their endeavours they find that the millions of pounds of investment are being set up for private companies to reap the profit. The Secretary of State can be motivated only by the Government's paranoid dislike for local democracy because the private companies that the Secretary of State seeks to establish for the local authority aiports will not be treated on all fours with the BAA. If the Secretary of State wishes the local airport authorities to become private limited companies, why has he so strongly and constantly resisted the proposals of Manchester council to do just that?
  The plcs set up for the local authority airports will not receive equal treatment with the BAA. Their debts will not be written off before they go into the private sector and they will not be free to operate in the same way as the BAA in relation to finance. The Secretary of State has stated that so long as majority control in terms of share ownership is with the local authority the company and the local authority will be subject to tight financial constraints and will need the Secretary of State's permission for capital spending. All this is designed to compel them to privatise their shares. The Secretary of State says that his friends will be disappointed that the authorities are not being compelled to sell their shares, but he is trying to achieve that result by subterfuge because he and his colleagues in the Government will so operate the financial aspects as to stop or stultify developments so that authorities are compelled to sell their shares.
  Why has the Secretary of State chosen £1 million as the threshold for bringing airports into economic regulation and forcing the formation of plcs by local authorities? What is magic about that figure? The Secretary of State
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  is taking powers in the Bill to revalue that figure as time goes by. Leaving aside the cost of inflation, the £1 million can change in relative importance simply by the passage of time, and even if the airports do not develop. It would have been more sensible to choose a figure based on the number of passengers using the airports. If that had been done it would have been a clear measure of how the airports were developing and whether it was necessary to bring them within the controls of the Bill. I have the impression that the Secretary of State has simply decided which authorities he wishes to deal with and has picked a number out of thin air to justify it. It is all arbitrary and we need an explanation.
  The Secretary of State is not allowing the new plcs to expand their business horizons in the same way as the new British Airports Authority. What local authorities are not allowed to do now the plcs will not be able to do either. If it is good enough for private enterprise to expand into non-essential airport activities such as hotels, why is it not good enough for the plcs, with a local authority base? The Secretary of State has presented himself in the guise of a swashbuckling knight of free enterprise who will liberate public industry from the chains of state bureaucracy. [HON. MEMBERS: "Hear, hear."] But as is so often the case — the hon. Members who make baying noises will realise this if they read the Bill—the reality is nothing like the fictional account.
  In parts III and IV of the Bill the Secretary of State, clearly and without equivocation, has said that private industry cannot be trusted to run an enterprise which is vital for the transport needs of the nation. I wholly agree with him on this. In clauses 26 to 48 the Secretary of State has resurrected and imposed a labyrinthine system of controls — controls on the total volume of traffic, the type of traffic, the distribution of traffic between airports, the power effectively to control landing charges and the power, which he has retained, to control investment policy through planning procedures. There is not much room for competition and free enterprise.
  Mr. Matthew Parris rose—
  Mr. McCrindle rose—
  Mr. Hughes: I will not give way. If a Labour Government had produced legislation with such detailed control of private enterprise we would be attacked on the grounds of the tentacles of state bureaucracy reaching into every nook and cranny of the industry. Clause 58 would be cited in evidence.
  Mr. McCrindle: Does it not occur to the hon. Gentleman that one of the reasons for requiring the continuation of the regulations which he effectively derides is that we are committed by international obligations to require them?
  Mr. Hughes: Well, if that is the case why has the Secretary of State come before the House and pretended that he is freeing the industry from state bureaucracy? The Secretary of State has said that the Bill will liberate the British Airports Authority from the constraint of a public industry and let it loose in the private sector.
  Clause 58 is an example of the control, and for greater clarity I will read it in full. Clause 58 states:
  " .—(1) The Secretary of State may, in the case of any airport—

  (a) give the airport operator a direction requiring him to make available for the exclusive use of designated

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  persons using the airport such special accommodation and any associated facilities as may be specified in the direction;

  (b) where it appears to the Secretary of State that the airport lacks special accommodation and associated facilities suitable for being made so available, give the airport operator a direction requiring him to take such steps as may be specified in the direction for the purpose of, or in connection with, securing the provision at the airport of such accommodation and facilities.

  (2) In subsection (1) 'designated persons', in relation to an airport, means such persons, or classes of persons, as may from time to time be notified to the airport operator by the Secretary of State for the purposes of this section."
  I shall not read any further because I can see the embarrassment of the Government. What conclusions can we draw from this? I am tempted, having read clause 58, to reach the conclusion that the Government have surreptitiously privatised the parliamentary draftsman's department and contracted Frank Muir and Dennis Norden to write the script.
  We all know what lies behind clause 58. It is a quarrel between the BAA and the Foreign Office about the cost of VIP facilities. To deal with such a situation in legislation with a catch-all clause is the height of absurdity and the Secretary of State knows this.
  With regard to accountability, we can see all the details of the powers exercised directly by the Secretary of State, indirectly by the Secretary of State through the CAA and also through the Monopolies and Mergers Commission. I am not satisfied with the amount of parliamentary control and accountability which is in the Bill. It is especially inappropriate since the Secretary of State has not spelled out in detail his policy that we should not have detailed parliamentary control. We know that this Government hold Parliament in contempt. Our earlier debate confirms that. The whole of the Westland saga reinforces the need for parliamentary accountability and I give notice that we shall press hard for this in Committee.
  Will this policy be a success? I am not sure that the Secretary of State will succeed in his aim of privatising British airports or, in the long term, privatising local authority airports. The tightness of the controls of the BAA does not make it an attractive proposition for investors. I do not think that there are big killings to be made in this area. There is no will within the local authorities to sell majority shareholdings of the local authority airports in the new plcs. Minority shareholdings will not be attractive because of the public expenditure constraints on capital development. In the case of British airports there is an external complication of which the Secretary of State has made no mention in his plans for privatisation. I call it the "Laker factor".
  The privatisation of British airports has to be viewed in the context of other Government privatisation schemes —it cannot be viewed in isolation. The Government are intent on privatising the gas industry and proceeding with the flotation of British Airways. British Airways has been up and down the country, not of course selling shares—it is not empowered to do this — but making presentations in all sorts of places on British Airways. British Airways is preparing the climate for selling shares and there is nothing improper in that.
  The Government hope that shares in British Airways will be floated in June or July this year. That is the date
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  that would-be investors should bear in mind. Frankly I cannot see that being achieved. Lawsuits are currently in progress in the United States on behalf of former Laker employees. It is hoped that these may be disposed of in the courts in March of this year. Beyond this there is a further threat of litigation by the travel agents and tour operators in the United States. As long as there is a threat of further litigation—even where cases have not yet been launched — British Airways' shares cannot be attractive to investors because no one will wish to buy shares in a company when potentially large damages have to be paid. This will push the programme back.
  We have the prospect of the flotation of British Airways, British Gas and British airports at a time when the availability of finance is at a premium. If they all occur at about the same time it will cause a problem with the money that is available in the market. We also know—the Government cannot avoid this in their considerations—that when British Telecom shares were sold there was a severe drain on the resources of building societies. All these things will have to be taken into account when the Government decide on the flotation process.
  It is quite possible that there will be only a partial flotation of those three companies. As shadow spokesman, I am interested only in British Airways and British airports. If I am right—only time will tell—the Labour Government, when it is returned to power, will still own a substantial proportion of those companies. That will give us greater freedom to achieve our overall objectives in transport policy. We shall ensure that British airports are publicly accountable and that they meet the needs of the economy, consumers and the workings of the industry. That will be achieved in a way consistent with our economic and democratic aims and priorities.
  British airports are the subject of the Government's eighth privatisation measure. Some privatisation measures have been completed and some are only partially completed. We shall have to determine our priorities on terms of public acquisition, on terms of compensation and the rate of public ownership once the picture is clear when we are in Government. Above all else, we are determined that public assets transferred to the private sector on a beneficial prospectus should not be ruthlessly exploited by financiers and against the interests of the nation. In any case, we will not allow the privatisation of British airports to stand in the way of our civil aviation policy.
  Mr. Ridley: I can only interpret what the hon. Gentleman is saying as meaning that he will not renationalise the airports. Shall I go and see the shadow Patronage Secretary and stand down the Whip for tonight, as it appears that the hon. Gentleman is not opposing the Bill?
  Mr. Hughes: Having failed to listen to the debate, the Secretary of State has failed to listen to what I have said. I made it clear that our acquisition policy will be determined by what we find when we are returned to office. I do not believe that we need bother, as the airports will still be in public ownership then. I have made our pledge quite clear and we intend to keep it.
  We oppose the Bill root and branch because it does nothing for the industry. It is pure dogma. I am not like those in the Liberal party or the Social Democratic party who have tabled an amendment. I know where I stand. I

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  oppose the Bill. They do not and are using weasel words to cover the fact. I shall not support their amendment and I invite my right hon. and hon. Friends to oppose the Bill.
  7.52 pm
  Sir Fergus Montgomery: The hon. Member for Aberdeen, North (Mr. Hughes) seems confident that we shall have a Labour Government. I do not share his confidence. Indeed, it is likely that most of us will be dead before another Labour Government is elected. To judge by the performances of Opposition Members today, they do not deserve to form a Government.
  I shall try to be brief, as I realise that many of my hon. Friends wish to speak and there is nothing more frustrating than sitting in the Chamber all day without getting a chance to speak. I support the Bill in principle, because it follows the June 1985 White Paper. When we debated the White Paper, I paid tribute to the help that the Government have given regional airports, especially Manchester international airport. They have done a great deal to help us. One of their main objectives in airports policy has been
  "to encourage the use and development of the regional airports so that they can meet the maximum demand they can attract".
  What worries me most is the development of Manchester's role as the United Kingdom's second hub. Air service licensing policy is a vital ingredient. I am pleased with the progress so far, especially with the recent granting of an operating permit to American Airlines for its Chicago-to-Manchester service. I am aware that there were great difficulties. Some Jeremiahs in the Manchester area said that it would never go through. I am delighted that the difficulties were overcome and that the route will soon come into operation as it will be a boost to the north of England.
  All we are asking for in the north is that any legislation sets a framework of fair competition between our regional airports, including the Manchester gateway, and those in the south. One of the things that has worried us in Manchester is the fact that the British Airports Authority has been able to subsidise landing rights at Stansted from profits at Heathrow. That was undoubtedly to the disadvantage of Manchester international airport.
  Paragraph 9.8 of the White Paper says that BAA airports would be structured as a holding company with seven individual airport companies, each producing separate accounts. Perhaps my hon. Friend the Minister can explain why that seems to have been omitted from the Bill. I cannot understand that it should be left to the BAA, albeit with the Secretary of State's veto, to put forward its own scheme for organisational structure. The BAA has never made any secret of its philosophy that the London airports should operate as a system. I cannot accept that that is in the national interest.
  By offering inducements to airports to operate services, initially from Gatwick and now from Stansted, the BAA has artificially deterred airlines from offering services from regional points to meet the true demand. The use of profits from Heathrow to that end has inhibited the development of a balanced national network of airports and air services.
  I accepted limited development at Stansted on the basis that those discriminatory activities would stop and that, as a result, Stansted's charges would have to rise to commercial levels. Instead, there seems to be a view that
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  decisions are being taken prematurely about the development of Stansted and even about its rail connection. Any commitment to expenditure on Stansted's development would pre-empt the judgment of the successor company's board. There have even been rumours, which I hope will be denied, that there will be capacity for 15 million passengers a year at Stansted rather than the 8 million promised at the time. These issues must be debated publicly before any decisions are made and while the BAA remains in public ownership.
  I am also worried about part IV, which empowers the CAA to regulate airport charges. There appear to be no safeguards to prevent cross-subsidies. Airport operators will be required to disclose subsidies to the CAA in the process of regulation of charges, but nothing in the procedures here outlined renders such subsidies illegal. The Bill merely provides for the CAA to set an upper limit on charges, taking subsidy into account. I am sorry to labour my argument about cross-subsidisation but it is vital to the future of Manchester international airport. The problems must be tackled.
  I have already said that I am unhappy about how the Bill will deal with the control of the BAA's charging activities. I am also unhappy that the regulations are to be applied to local authority airports, as there is no evidence that local authority airports have acted outside the public interest, so safeguards involving maximum charging levels will be unnecessary.
  I am also unhappy about part III, which allows the Secretary of State to control types of traffic using any airport. Such provisions could be used forcibly to transfer traffic to Stansted rather than to allow airlines freedom of choice between all United Kingdom airports.
  As the White Paper made clear, there must be maximum reliance on market forces. That would lead to an increase in services from Manchester and other regional airports if they are allowed to operate unhindered by licensing restrictions. By further encouraging the development of direct regional services, a significant proportion of London's capacity problems could be solved.
  My right hon. Friend the Secretary of State has apparently asked the CAA to advise him on the mechanics of traffic allocation to be adopted between airports.
  The Bill says that we should consider the roles of two or more airports serving the same area in the United Kingdom. I draw attention to the fact that there is a substantial overlap of catchment areas between the London and Manchester hubs. At present a considerable number of northern passengers are, through lack of services at Manchester, forced to use London for scheduled international services. Any decisions relating to the London area will have substantial implications for the Manchester hub.
  It is essential that traffic distribution policy should take on a national dimension. In particular, a policy that arbitrarily transfers traffic between airports regardless of the needs of the market must be rejected. I make no secret of the fact that my main concern is for Manchester international airport. It is the largest employer in my constituency, and the more prosperous that airport becomes, the better it will be for the north of England.
  For the last few years it has been run perfectly amicably on a 50:50 basis between Manchester city and Greater Manchester. With the demise of the Greater Manchester council, a new formula will have to be devised. Again I

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  make no secret of the fact that I would favour a plc comprising Manchester city, the nine district councils comprising the rest of Greater Manchester and private capital, all three having a 33·3 per cent. stake. I am not in favour of Manchester city controlling the airport, and I therefore welcome clause 14 which empowers the Secretary of State to reject any scheme.
  Manchester international airport is the largest asset in the north-west of England and it would be an act of unforgiveable folly to put it in the hands of the people who at present control Manchester city council.
  I also welcome clause 19, which provides for setting up an employees' share scheme. That would give those who work at the airport a chance to share in the profits of the airport, and that would be an incentive.
  Mr. Tony Lloyd: Does the hon. Gentleman also welcome and support clause 20, which will truncate the development of Manchester, as the ability to raise capital and finance will be subject to the strictures of local government financing? Indeed, the hon. Gentleman has said some unkind things about the Government's views on local government spending. Can we expect that on this issue he will at least join the Opposition to ensure that that does not prevent the further development of Manchester airport?
  Sir Fergus Montgomery: The situation remains as it is now. I thought that the hon. Gentleman would interrupt me because of what I said about Manchester city council. He feels that the ratepayers of Trafford will not get a fair deal. I am also a Trafford ratepayer, and it is because I want to ensure that Trafford gets a fair deal that I want — [Interruption.] If only the hon. Member for Manchester, Central (Mr. Litherland) would shut up for a moment, I shall come on to the point that his hon. Friend made. I am surprised that not one Labour Member from the Manchester area has challenged me on that point. The hon. Member for Manchester, Central was a member of Manchester city council. Would he like to see the lion's share of this airport handed over to the people who are at present controlling the city council?
  Mr. Robert Litherland: The hon. Gentleman did not even answer the question asked by my hon. Friend the Member for Stretford (Mr. Lloyd). As a member of Manchester city council, I took a great pride in the airport. If the hon. Gentleman read the history of Manchester he would discover that when Alderman Tommy Regan cut the first sod he needed police protection because the Conservatives did not want the airport. There was a tremendous fight for the airport against the likes of the Tory party, but now that it is a success, the Conservatives again want to get their sticky fingers in the till. The argument about present control of the city council is merely an excuse. The Labour party will not always be in control, and the Conservatives or even the Liberals may take over. The hon. Gentleman's argument is nonsense. He is merely appeasing his conscience because he wants privatisation.
  Sir Fergus Montgomery: I make no bones about the fact that I would like privatisation, but the hon. Gentleman's defence of those people now in control of the city council was not very convincing. Of course I hope that
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  they do not remain in control for much longer. I hope that they will be swept out in May, if not by the Conservatives and the Liberals, at least by the moderates in the Labour party for whom I have respect.
  As to clause 20, there has always been control over local authorities by this Government and previous Governments. I therefore do not see the relevance of the point made by the hon. Member for Stretford (Mr. Lloyd).
  Mr. Litherland: The hon. Gentleman did not understand it.
  Sir Fergus Montgomery: If that is so, there is no doubt about what the hon. Gentleman thought, because he seems to understand nothing at all. He gave a very unprepossessing defence of the people whom he is supposed to support.
  Mr. Michael Meadowcroft: Perhaps I can assist. The argument is that, if the private sector companies have freer access to the market for capital, that will be unfair competition for those companies that are still in the hands of local government via shareholding in successor corporations, especially if they are still limited by the provisions of clause 20. The argument was that they would have a different basis for obtaining capital in the future.
  Sir Fergus Montgomery: That is the point. Local government expenditure has always been controlled by this and previous Governments. If private capital is introduced, the situation will alter.
  Perhaps I can finish—[Interruption.] I am glad that the hon. Member for West Bromwich, East (Mr. Snape) is much happier with his new sparring partner—
  Mr. Snape: I need no encouragement from the hon. Gentleman about my relationship with my sparring partners. Will he address himself to the point put to him by the hon. Member for Leeds, West (Mr. Meadowcroft) and my hon. Friend the Member for Stretford (Mr. Lloyd)? Why discriminate against a public limited company created under the Bill in the way that clause 20 obviously does? Did not Trafford council originally second the proposal that the future of Manchester airport should lie in the direction that the Opposition have recommended? For what reason did Trafford council change its mind? Was it nobbled by the Secretary of State, who has not even bothered to listen to the hon. Gentleman's contribution?
  Sir Fergus Montgomery: I come back to my point that local authority expenditure has always been controlled, and it always will be controlled. The leader of Trafford council is entitled to his opinion. I disagreed with him on this issue, as have many other people, because under the proposals Manchester city council would have 55 per cent. of the shareholding.
  Mr. Favell: There is, of course, an argument between Manchester city council and the other councils that form part of Greater Manchester. Manchester city council behaves as if the only people who contribute towards the airport as those who come from Manchester city. This is a regional asset. It does not belong purely to Manchester city. Therefore, should not it be regarded as a regional asset and privatised if possible?
  Sir Fergus Montgomery: I agree with my hon. Friend.
  The Bill is good in parts, but there are other parts of it
  about which I have doubts. As it stands, it lacks the clarity

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  of purpose needed to implement the policies enshrined in the White Paper. By the time the Bill comes out of Committee, I hope that the principles embodied in the White Paper will have been enacted in the total national interest.
  8.8 pm
  Mr. Michael Meadowcroft: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House declines to give a Second Reading to a Bill which, by requiring the profitable British Airports Authority to be sold outright, fails to appreciate the virtues of partnership between the public and private sectors, including the introduction of private capital into publicly owned companies, and which seeks to stifle municipal enterprise, which was responsible for the successful development of regional airports such as Manchester, Birmingham, Leeds/Bradford, Newcastle and Luton."
  I first apologise for the absence of my hon. Friend the Member for Isle of Wight (Mr. Ross). He would normally be speaking on this subject and has a greater experience of it than I have, but because of the re-arranged time for the debate, my hon. Friend is unable to be present as he is attending the Council of Europe on parliamentary business.
  We have tabled this reasoned amendment because in our view it sums up the three key reasons why the Bill as it stands is unsupportable. The amendment first refers to the ridiculous aim of trying to privatise the BAA, which at present is a highly profitable body. That is to be sold outright, yet it is a virtual monopoly. In our opinion, if it is to be a monopoly, it should be in the public sector rather than the private sector.
  Indeed, paragraph 30 of the Select Committee report stated:
  "We have noted that the Secretary of State has 'virtually' decided that, in the event of privatisation, the BAA's three South East airports will not be put under separate ownership but we are not convinced that privatising a monopoly, irrespective of safeguards, is in the best interests of the user."
  That Select Committee has an in-built Conservative majority, and it is interesting that it put the emphasis on those sentences at the end of the paragraph.
  Secondly, the partnership between the public and private sectors, which could be enhanced by changes in the structure and management of airports, will be obviated by the Bill. There is no reason why there should not be public corporations with private finance, or why publicly owned bodies should not attract private capital. That is done elsewhere and in other spheres, and there is no reason why it should not be done in the United Kingdom. Yet the Government have turned their face against that for the airports.
  Thirdly, the reasoned amendment refers to the strange desire to stifle municipal enterprise. I am always puzzled that Conservative Members believe that civic pride and municipal enterprise are bad. Our tremendous achievements throughout the centuries have not all been accomplished by national Government and private enterprise. Everywhere in our great cities one sees the results of municipal enterprise and civic pride, and rightly so. Indeed, we are arguing for spending public resources on infrastructure. The public sphere is belatedly trying to continue the work carried out with immense foresight 100 or more years ago. It is ridiculous to suggest that municipal enterprise in relation to the airports should be done away with.
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  As the hon. Member for Aberdeen, North (Mr. Hughes) said, the limit of £1 million turnover, which decides whether an airport should be taken into the restrictions of the Bill, could easily be lifted. There is a power to do so by order, no doubt intended simply to keep pace with inflation. If the sum were raised to £5 million many of the smaller civic airports would be excluded. That would be a small token act.
  The Government's attitude to the management of airports shows yet again the triumph of ideology over reason. It is misguided and cynical to force the takeover of all but a handful of our smallest airports, whether or not they have genuine local accountability, and have been effectively developed and managed. The Leeds-Bradford airport is situated where it is because, at the beginning of the 1930s, Bradford city council made a strong plea that the airport should be put between the two cities, although the site was not the best available. The experts advised a site to the east of Leeds. Nevertheless, Bradford city council insisted that if the airport was to serve its city, it should he placed between the two cities. The council wanted to have some share, commitment and understanding of the problems that would arise.
  It is important to recognise that what has happened in Leeds and Bradford is typical of other areas. Although in the past I have criticised the membership of the Leeds-Bradford airport committee and its lack of political balance—I shall continue to voice those criticisms—that is a local question and must be dealt with locally. If the airport is taken out of the hands of local government, it will certainly not help to bring wider local accountability.
  Mr. Bill Walker: I am interested in what the hon. Gentleman says about the location of Yeadon airport. Will he confirm that it was put there by the Royal Air Force?
  Mr. Meadowcroft: Yeadon airport existed as a private aerodrome long before it was opened as a public airport. The adviser recommended a site at Whinmoor, which would have been more suitable, especially in terms of altitude, but the airport was placed where it was because two cities were involved.
  For many years, despite the efforts of the local authorities, Leeds-Bradford airport lost money, and those losses were met by local ratepayers. Recently, more than £20 million has been expended on extending the runway, and again local ratepayers bear the revenue implications. During the past few years the airport has been making a profit. Is it not right that that profit should be returned to the ratepayers? Why privatise the airport now, when it is making money? In any case no one knows how long that will continue. The extended runway is predicated on a high forecast of passengers coming through on package tours. It seems monstrous that the losses of the past should not be compensated by present, and possibly future, profits.
  As municipal airports with a turnover of more than £1 million a year will be forced to become public limited companies, they may decide to take up all the shares. The provisions of clauses 20 and 59 show that consent for loan sanction and even for expenditure could be withheld by the Secretary of State. I agree with the hon. Member for Altrincham and Sale (Sir F. Montgomery) that there have been capital controls in the past, but then the airports were endeavouring to compete on the same basis. They had the

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  same restrictions because they were in the public sector. When they become plcs they will be able to look to the market to raise funds. However, airports whose shares are held by local authorities will not enjoy the same freedom, but will be constrained by the Secretary of State as if they were local authorities. They will have the worst of all worlds. Not only will they not be in the public sector, but they will not have the supposed benefit of freedom of access to the market by being in the private sector.
  Sir Fergus Montgomery: Can the hon. Gentleman cite any aspect of local authority expenditure that is free from control? One facet of local authority expenditure cannot have complete freedom while all the others are controlled.
  Mr. Meadowcroft: The hon. Gentleman still misunderstands the point. Under the Bill the airports will cease to be local authority airports. They will be plcs. As plcs why should they not, like other plcs, have access to capital funding? They will not be able to compete on equal terms.
  Mr. Parris: The answer is that if Derbyshire county council decides to set up a social services department of the county council as Derbyshire social services plc, which is paid for entirely by a subvention from Derbyshire county council, it could not, by so doing, free its social services department from local authority control.
  Mr. Meadowcroft: We now have an even more powerful argument against the Bill. It is now being suggested that if airports were allowed freedom by turning themselves into plcs, Derbyshire social services might do the same. That is nonsense. Local authorities do not want the Bill, or their municipal airports turned into plcs. They want to retain accountability and the present membership. They do not want the restrictions contained in the Bill. I hope that hon. Members will accept that the pride that has gone into the formation and development of the airports should be allowed to continue in future.
  In reply to an intervention by the hon. Member for Luton, North (Mr. Carlisle) the Secretary of State suggested that the same possibilities of reporting back would exist as hitherto, but clause 62 suggests that that is not the case. It contains severe restrictions about the disclosure of information. Where the matter has arisen previously, for example over the new passenger transport authorities, a specific disclaimer has been inserted to avoid preventing local authority members from being permitted to report back to the constituent authorities. Clause 62 will prevent local authority councillors from reporting back to the bodies that put them in a position of authority. It is bad enough having delegated powers and indirect elections to the bodies, but then to say that the members should be prevented from reporting back to their constituent local authorities is ridiculous.
  Mr. Patrick Thompson: Does the hon. Gentleman agree that if he checked on the matter as I have done, and found that the consultative committees that existed prior to the Bill could continue under the Bill, he would be satisfied that the Bill will not create the problems that he suggests and could be good from that point of view?
  Mr. Meadowcroft: My experience of consultative committees is hardly as encouraging as the hon.
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  Gentleman suggests. I am not arguing for them, but for local councils to be able to have a report from the members that they put on the board of the new public limited companies. I am not arguing for a local consultative committee. Although that is a good thing, it does not have the teeth, the power and the forum of debate of the local authority. That is like saying that one supports the community health councils. They are of benefit, but they are no substitute for the proper accountability of the Health Service to locally elected members. They can snap at the heels of the authority like other consultative committees can, but they cannot bite. That is the difference. There must be accountability or the matter becomes staid and introverted. That is another difficulty in the Bill.
  Other strange things suggest that the Bill does not deserve support. Clause 58 mentions the exclusive use of accommodation. Does that mean VIP accommodation or security accommodation or what? It is strange to include the power to direct an operator to provide the exclusive use of accommodation. Under clause 27 the Secretary of State is given the power to direct security. There is no suggestion in the Bill that there will be any public contribution towards the cost of any security. It is unfair that an airport could be told to provide X number of police with machine guns, but the state would be under no obligation to pay for them.
  Regarding the writing-off of debts, there is different treatment of bodies under the Bill from that in other legislation. When the PTAs were set up, the accumulated losses of the bus authorities that were being taken into the PTAs were not written off. The ratepayers and bus passengers had to pay for them. It is unfair that, because ideology rules, losses and accumulated debts will be written off.
  Employee share ownership was mentioned earlier. That applies to only part of the Bill. There is no suggestion that employee share ownership will apply to the body that will become the BAA plc, despite the fact that airlines will be able to participate. It will be a strange position when the airlines will be able to participate in the BAA plc, but not its own employees.
  Not only do we have the triumph of ideology over reason, but reason is so curtailed as to be almost ridiculous. The Bill purports to place those bodies in the private sector and it suddenly allows them freedom—a freedom that does not occur anywhere else in the world. The United States of America is the land of the free, to which we are told to look for enterprise, job creation and buoyancy in the economy. From the Select Committee report, we see that there is no privately owned airport in the United States. That does not stop private funding coming in, but the corporations are publicly owned and able to raise bonds in the market.
  Mr. Graham Bright: The hon. Gentleman mentioned the United States. While I follow his argument, may I ask whether he would agree that in the United States the terminals, hangars and most of the facilities are funded and operated by private concerns?
  Mr. Meadowcroft: I am grateful for the hon. Gentleman's support. That is exactly my point. Why cannot a public body contract out if it wishes? I believe that that would be of benefit. Anyone who has compared terminal 3 at Heathrow with American airports will see the benefit of that.

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  However, the Bill is in place of a public body being able to contract out and bring capital in. To do so, the body must be private. The Bill gives a long list of restrictions and immense controls over personnel, security, capital and revenue. In the end, the Bill hedges the proposed companies about with so many controls that the bodies might as well be nationalised. I do not believe that the Bill deserves support.
  8.24 pm
  Mr. Richard Page: In view of the tremendous interest and the numbers who wish to speak in the debate, I shall be brief.
  The House will not be surprised that I enthusiastically support the Bill. I wish that it had been introduced earlier. I believe that it will be of more general benefit to the country the quicker it comes into operation.
  The Bill covers several airports, but it deals mainly with how the British Airports Authority will be brought into the market. An interesting facet of the Government's privatisation programme is the ingenuity with which they produce some form of regulation on monopoly powers and introduce some form of competition into the market place. Inevitably, we make comparisons with British Telecom, which was the first to go down the privatisation chute. I do not dismiss the effectiveness or the splendid work of Mercury, but it takes only 2 per cent. of the market while British Telecom takes 98 per cent. Those who served on the Committee will remember that there was a great deal of discussion about the setting up of the regulatory body to ensure that Oftel would be independent, would have enough expertise and finance and would not be subject to agency capture. To date, that has not happened. In the case of the privatisation of the British Airports Authority, we are fortunate to have the CAA already in existence. It has a splendid independence and a well-known and proven record on matters such as safety control.
  However, why is it necessary for the CAA to refer everything to the Monopolies and Mergers Commission every five years? That does not happen in other privately owned operations, so why should it happen in this case? I realise that this matter can be explored in Committee, but, on the face of it, the impression is left that the CAA will not have sufficient powers. That implies that it will not be able to do the job properly. Referring matters every five years will produce the tendency to say, "Look, there is a problem. We should hang on and wait for the commission to deal with it." A problem that could be tackled much sooner may be shoved into the background.
  My hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) made some valid points about the ability to deal with cross-subsidisation of charges. It is important that we do not differentiate between charters and scheduled airlines. The Bill must be seen to cover all the airports. It cannot be hybrid. The House knows what happens when we run into the problems of a hybrid Bill.
  Mr. Bright: My hon. Friend has mentioned cross-subsidisation in relation to the point made by my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery). Does he agree that it is more important that the question of cross-subsidisation should be completely nullified and that we should have clear and transparent accounts, especially in an airport such as Luton? Luton will be the only independent airport in the London region. The rest are owned by BAA. If we are to have competition,
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  it is important that Luton is free to have genuine competition, unlike the position at the moment with the effects of cross-subsidisation and the effect that Stansted has had on Luton's traffic.
  Mr. Page: My hon. Friend makes the case for Luton very powerfully and he has made the position quite clear. Any rules of support finance must be clear, understood and above board. I do not believe that we can countenance any covert, under-the-counter, operations.
  It is important that a balance should be struck between presenting the British Airports Authority to the market as attractively as possible in commercial terms and ensuring that there is fair play and no discrimination against smaller operators. That is why I support the proposal to make the BAA the holding company and to make each airport underneath it a separate subsidiary company. To quote the jargon of the day, it will provide financial transparency and show that fair play exists.
  My right hon. Friend the Secretary of State mentioned fair play in reply to an intervention by my hon. Friend the Member for Hertford and Stortford (Mr. Wells). That definition will be expanded and debated in Committee.
  The balance to which I referred earlier must be maintained, because the British Airports Authority must remain the world's most successful international airports system.
  Mr. Dicks: Why must we leave it to the BAA to maintain and keep the British airports system in the lead? Could not independent companies — Heathrow Ltd., Gatwick Ltd., and, God forbid, Stansted Ltd.—do this equally well?
  Mr. Page: I have no doubt that those fortunate enough to serve on the Committee will argue that point as they debate the Bill's 72 clauses and five schedules. I believe that the central expertise of BAA would benefit each operating company. Some services could be provided from the centre while each airport gets on with operating as a separate company. There should be no duplication of central costs.
  An important factor in the success of an airport is why an airline and its customers choose to go there. There are many reasons, but the cost of landing fees is a major factor. Some might say that it creates the natural, but short-sighted, temptation to use the exceedingly strong market position of the monopoly, especially in the south, to advantage. I know that the BAA and its directors are far too careful to fall into that temptation. However, some regulation is necessary. When the formula of control is produced, I hope that it will be similar to the British Telecom formula. In the end, it might be an exotic formula, but essentially it should be the RPI minus x as the control, not a cost-plus exercise. The former would give benefits to customers, shareholders and employees, whereas the second would produce an atmosphere of complacency and no advantage to anyone.
  We have all read the figures of passengers going through British airports—2 million in 1950, 67 million in 1984 and the various figures that are extrapolated into the 1990s. Whichever figure one takes, there will be a huge growth in the market and a tremendous opportunity. If we are to continue that growth, we must have the powerful stimulus of privatisation. It will bring efficiency and responsibility to customers' views, and management, especially in the British Airports Authority, will be

  717
  motivated. I hope that we shall create the opportunity for employees to have shareholdings, as we did with British Telecom, the National Freight Corporation and Jaguar. I welcome the Bill and wish it a speedy passage through the House.
  8.33 pm
  Mr. Alfred Morris: As the House knows, I have two interests to declare in the debate. The first is that Manchester international airport, which is in my constituency, is much the biggest employer there. It employs more than 6,000 people and more than 20,000 others owe their livelihoods, wholly or in part, to the airport's existence. My second interest is that I have worked, in an honorary capacity since its inception, in close liaison with the North of England Regional Consortium, which speaks for local authorities all over the north on some of the most important issues to which the Bill is addressed.
  When the House debated the airports White Paper in July last year, I warned that the Government's bold promises to support the regional airports sounded fine, but that there would be an early test of their sincerity. That warning is now fully vindicated. Since our debate last July, we have had the Civil Aviation Authority's consultation document on traffic distribution which, in the view of the North of England Regional Consortium, is primarily geared to forcing traffic to use the subsidised Stansted airport.
  On 9 January, County Councillor John Gunnell of West Yorkshire, who is well regarded by hon. Members on both sides of the House, spoke for the consortium about the CAA's consultation document. He said:
  "The Government in its White Paper … finally acknowledged that regional airports should be encouraged to realise their full potential … At the first test, the conspiracy of the London-based establishment has sought to ignore the major principles behind the White Paper, as though they did not exist. Every effort must be made to encourage the CAA to think again."
  Before the debate ends, I hope to hear how the Minister responds to that statement.
  Since the publication of the White Paper, we have also had the Secretary of State's disputed decision not to publish the financing proposals put to him by the British Airports Authority and British Rail for Stansted's expansion and the provision of a rail link to that airport. Even more seriously, we now have this Bill, of which the Joint Airports Committee of Local Authorities says:
  "As drafted, the Airports Bill will do little to assist and, indeed, is likely to hinder the development of Regional Airports."
  The Secretary of State's press statement on the day when the Bill was published said that it represented a new and enterprising deal for the airports industry. How can that possibly be said of a Bill that seeks to arm the Government with powers forcibly to distribute traffic and to regulate the pricing of airport services; that selectively denies the regional airports access to the open market; that provides for the effective "nationalisation" of the regional airports and for continuing and detailed central Government control over their funding; that proposes to write off the BAA's capital debts and therefore, effectively, provide a state subsidy for a capital programme which includes the expansion of Stansted; and
  718
  that fails to give details of the proposals for restructuring the London airports, thus adding to our concern that Stansted will, in practice, continue to be heavily subsidised?
  Far from being an enterprising new deal for the airports industry, this Bill is an attempt to force most airports into a financial straitjacket. The Bill is basically about manipulation. It vividly demonstrates the Government's prejudices and their overt influence on the development of air transport policy. Yet even in the Government's own terms the Bill is a shambles. If parts I, II and III are allowed to stand in their present form, the dominance of the London airports will become absolute. Unfair competition between Stansted and other airports will continue.
  The Secretary of State must be made to understand that making a subsidy transparent is not the same as securing its elimination. Equally, he must be made to understand that providing the CAA with powers forcibly to distribute traffic within the London airports system does nothing to encourage the meeting of demand for air travel in the region of its origin. That is the only effective way to ease congestion in London. The north's case against the southeast's dominance is strongly endorsed by the recent report of the Select Committee on Trade and Industry. Referring to the scope for a dispersal of tourist traffic, which now almost exclusively uses the London airports, the report states:
  "We are concerned that it is too easily taken for granted that demand in the South East cannot be transferred elsewhere."
  The Select Committee report also says:
  "The growth of Manchester Airport in particular provides perhaps the major way in which the tourist industry in the North of England will be stimulated."
  Right hon. and hon. Members from all parts of the House worked long and hard, entirely without party animus, to establish the case of our regional airports. We worked in close co-operation also to ensure that the subsidising of Stansted would cease. If that objective is now to be achieved, and the interests of the regional airports are to be adequately protected, substantial changes will have to be made to the Bill. For that to happen, all supporters of the regional airports must continue to work together.
  I turn now, in particular, to part II of the Bill, which relates solely to the regional airports. Its proposals do not provide for companies of the kind indicated in the White Paper. They impose on the regional airports the Minister's own wholy political perception of a company. If the Minister is anxious to see airport companies at arm's length from their local authority owners, he would allow them to operate in the open market irrespective of who owns a majority shareholding in the company.
  The fact that open market facilities are to be denied to companies if they are controlled by local authorities amply demonstrates the Government's total distaste for our democratically accountable system of local government in this country. What other interpretation can there be of the Government's approach? Part I of the Bill specifically allows the successor company to BAA, which initially at least will be wholly owned by the Government, to operate in the open market, and clause 34(4)(a) in part IV specifically excludes such a company from the economic regulation controls to be imposed on other airports.
  Notwithstanding what the right hon. Gentleman said in opening the debate, many people will believe that the practical effect of the Bill will be to impose a privatised

  719
  framework on airports such as Manchester at the earliest opportunity. More than one way of achieving this is provided for in the Bill. The extensive powers that the Secretary of State will have to control the level of external and internal resources required for their development will give him more than ample scope to starve the regional airports of the resources they need if they resist private sector equity. It may be said that such action would be unreasonable, but I remind the House that it would be no worse than the Government's action in pressurising a Conservative-controlled local authority in Greater Manchester to back down from the agreement it assisted in writing to secure the early restructuring of Manchester international airport.
  The Secretary of State must recognise that the people of Manchester will not simply lie down and allow their most valuable public asset to be handed over to asset strippers and profiteers. Manchester international airport enjoys its present status because of the commitment of the people of Manchester first to develop the airport and then to support its growth over a period spanning more than 50 years. After Heathrow, our airport is easily the most profitable in Britain. With over 6 million passengers last year, it is by a considerable margin Britain's third airport. In terms of quality of service, it is Britain's best.
  There were many years when our airport did not make a profit. Only in recent years have the city and county taken a return on their ratepayers' investment. Moreover, all the return has been ploughed back into the regional economy. If by the enactment of the Bill the Government's wishes are met, there can be no guarantee whatever that the airport's profits will stay in the north-west. Nor is it likely that the airport will develop at a pace consistent with the needs of the region.
  Now that the major risks have been taken by Manchester's ratepayers and an increasingly successful future for the airport beckons, the Government want to poach the north-west's premier public asset for private profit. That is why there is so much resentment in Manchester about the Government's approach and why there is such strong determination to keep the snouts of private speculators out of the trough.
  Manchester international airport is the only growth point in a region devastated by unemployment and by both economic and social decline. It is by any standards already highly efficient. If anyone doubts that, let him name the private companies in the north-west that will show a profit of £16 million this year. It is one of the few institutions that gives us any cause for optimism for the future and is as important to the north-west today as the Manchester ship canal itself was earlier this century.
  No other airport is promoted more vigorously than Manchester, and no organisation is more committed to its future success than Manchester city council. I know of no major issue affecting the airport which has created any conflict along party lines within Manchester town hall since I first had the privilege of representing my constituency 21 years ago. That is the definitive answer to the hon. Member for Altrincham and Sale (Sir F. Montgomery).
  What Manchester international airport needs now is positive support from the Government. We seek support not in terms of handouts, but in the way airports policy is shaped and pursued. What we do not want is absolute authority for the Government to control the airport's activities. We not only question the Government's
  720
  motives, but are far from certain that they even understand the needs of the airport and the role it plays in the regional economy.
  At the Stansted public inquiry, the Civil Service was totally dismissive of Manchester's case and that of the regional airports. Acting together on both sides of the House, it took us four years to persuade the Government publicly to acknowledge their role in the national airports system. Part II of the Bill is, at best, totally irrelevant to Manchester international airport's needs and the aspirations of both its work force and the people of the north-west region. At worst it could be positively damaging, and I urge the House to show its understanding of our grave anxieties about the Bill by rejecting it in the Lobby tonight.
  8.49 pm
  Mr. Iain Mills: I support the Bill enthusiastically. Birmingham international airport, one of our most important regional airports, is in my constituency.
  I should first like to talk about the part of the Bill that deals with the British Airports Authority. I ask my right hon. Friend to consider in his reply and in discussions with those of us who are fortunate enough to be chosen to serve on the Standing Committee, the continuing possible unfairness created by the cross-subsidy for Stansted airport. That worry has been voiced by a number of my hon. Friends and I do not intend to go into it in more detail.
  Speaking on behalf of one of the municipal airports, I have to say that the cross-subsidy for Stansted and the write-off of the BAA debts must give rise to some anxiety among those who are also worried about regional airports. Is this fair to municipal airports?
  I am puzzled about the need to provide for certain facilities at airports through legislation. I have talked to the British Airports Authority about this. I am surprised to find that in the Bill, and perhaps the Minister could outline why it was important to include it. If there is a good reason, as suggested by hon. Members, I should be interested to hear it, because it seems a slightly unusual precedent.
  I shall also be grateful if my hon. Friend will comment on the need for protection against foreign ownership on privatisation of BAA in the way that has been proposed, which I fully support, and perhaps discuss whether the golden share solution would be one way in which that could be done. That was certainly the answer for Jaguar, which is also an important local employer of my constituents and a most successful company privatised by the Government in exactly the same way as the airports will be privatised by the Government with yet more benefits being offered. [Interruption.] I am sure that the hon. Member for West Bromwich, East (Mr. Snape) will have a full opportunity to make his views known in a way in which only he can.
  I also urge my hon. Friend to do everything possible to ensure that wider share ownership, on which the Government have achieved so much, should be included for airports. I know that my hon. Friend is concerned about that. [Laughter.] I find it strange that Labour Members laugh when it is suggested that baggage handlers, pilots and people working in airport canteens could be offered shares in the place in which they work. It is a most important fundamental part of democracy that employees should have a share in their industry.
  Mr. Snape: Labour Members invariably laugh at the suggestion that those who work in an industry should be given shares in it because, as we have seen recently in Westland—and it happens in every other company in Britain — the views of private shareholders count for naught when it comes to their future. More often than not the bulk of the shares, particularly under this Government, land up in foreign hands. That is why we laugh. It is an alternative to crying.
  Mr. Mills: On a day like today, when we have heard my right hon. Friend the Prime Minister talk so well about her concern with that affair, it would be like taking the hon. Gentleman's helicopter up in an uncontrollable spin if I were distracted from the main point of the benefits of the privatisation of BAA. I urge the hon. Gentleman to watch his television set. He might emulate that gentleman who seems to have a most magical helicopter. It might help him and the Leader of the Opposition. They seem to need something to help them.
  I do not understand the ideological reluctance of Labour Members when the privatisation of BAA is discussed. They talk of ideology as being the Government's reason for that, but the fact is that the Government have been successful in privatising so many concerns to the benefit of their employees and customers. British Telecom has been mentioned as one of the many examples. I am sure that those working in BAA will welcome the freedom and involvement that the measure will bring.
  I said that I have Birmingham international airport in my constituency. That is a most important matter, but it is also a mixed blessing on which I must touch this evening. The economic activity and the jobs that it provides have to be balanced with the needs of those who live within hundreds of yards of the taxiways and landing ways with the noise and other effects of the airport. A clear role for Birmingham international airport in the region is to supply the region with what it needs—the facilities for Birmingham-based people and those who wish to come to Birmingham. The suggestion that there should be some sort of forced shift of passengers from the south-east to regional airports such as Birmingham is not music to my ears.
  Birmingham has a role to play, and it is playing it. It has a new terminal. But to force people who wish to land in London or to leave from London to use the provincial airports would be singularly inappropriate for the Government. I am not sure whether Labour Members would wish to force more aeroplanes and more noise on the people of Biggin Hill, Marston Green and elsewhere. It might be interesting to ask them if we have the opportunity.
  In privatising not just BAA but municipal airports, which I welcome, I hope that my hon. Friend will have a word with his right hon. and hon. Friends in the Treasury and the Home Office to ensure that our airports have facilities which are more customer friendly. I am thinking in terms of customs and excise and immigration. That is a most important matter. It will aid those privatised airports to be yet more successful in providing the friendly facilities that will encourage our tourist trade.
  My hon. Friend knows from the discussions that we have had about my concern for the future of Birmingham international airport. It is most important that municipal airports which become plcs should truly become private enterprises. I know that my right hon. Friend is concerned
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  about the precedent. [Interruption.] I understand his concern about that when I see the hon. Member for West Bromwich, East. He is a man of great innovatory skill and talent. To give him a precedent to use would not be wise.
  However, I urge my hon. Friend to consider amendments that may be proposed in Committee to ensure that the shareholdings in municipal airports are truly available to baggage handlers, canteen workers, pilots and others in the enterprise as well as a wider base in order to encourage the maximum investment of private capital to make the airports successful.
  8.55 pm
  Mr. David Lambie: Like all my right hon. and hon. Friends I oppose the principles and aims of the Bill, which seeks to privatise a public asset and that is why I shall vote against it. Airports should be owned and controlled by public bodies—either in Government or local authorities.
  First I want to deal with part III, which deals with the regulation and use of airports. That enables the Secretary of State to give general directions to airports in the interests of national security and international relations.
  On 16 January 1985 the Select Committee on Scottish Affairs, of which I am Chairman, carried out an inquiry into the impact of airport privatisation on the Scottish lowlands airports policy. At the end of that inquiry we produced a very nearly unanimous report which made a series of recommendations, two of which I want to deal with tonight.
  The Select Committee said:
  "We therefore conclude that no change should be made to the existing policy in advance of privatisation, should privatisation eventually take place".
  The existing policy that we were talking about was the Scottish lowlands airports policy. We said that the BAA Scottish airports should be retained and privatised, if that were the Government's policy, as a single group. That was why I was glad to hear tonight the Secretary of State say that BAA plc would have a Scottish holding company dealing with the four Scottish airports. The Scottish lowlands airports policy regards Prestwick as an international gateway for north Atlantic traffic and long-haul services and considers that Glasgow and Edinburgh should cater for domestic and short-haul European services.
  If we were starting afresh on a green field site, no one in Scotland would build three airports so close together, serving the same population area. However, we have Prestwick, Glasgow and Edinburgh airports and, as most speakers have said, airports are growth points, irrespective of their size. They are centres of activity and employment.
  There is a large pool of unemployed people in central Scotland; every third man in my constituency is unemployed. Therefore, we must retain the airports and try to make them profitable, so that we maintain employment prospects.
  That is why I am glad that, if BAA is privatised, there will be a Scottish holding company for the three lowlands airports in Scotland, plus Aberdeen airport.
  Mr. Bill Walker: Will the hon. Gentleman confirm that when the Select Committee examined the lowlands airports, there was no disagreement about what the outcome of the report should be?
  Mr. Lambie: I said earlier that the report was almost unanimous. I was glad that my hon. Friend the Member

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  for Glasgow, Shettleston (Mr. Marshall) pointed out in an intervention that the members of the Select Committee who represented all four airports were unanimous in supporting the Committee's recommendations.
  Our second recommendation was:
  "We agree with BAA that their London and Scottish airports should be privatised as two separate statutory undertakings wholly owned by a single holding company; this holding company would be publicly-quoted and provide the sole vehicle for private investment."
  We were saying that the Scottish lowlands airports should be privatised within the BAA. We believe that our future lies in tying ourselves not to Manchester, but to the London airports. In all friendliness to my colleagues from the north-west, I say that we object to those who speak on behalf of Manchester airport saying that that is the airport for north Britain. If they claim that that is the gateway to Scotland, they are proposing that Manchester should be built up at the expense of Prestwick, Glasgow and Edinburgh. Scottish Members cannot accept that.
  As a Scottish Member and a member of the Select Committee, I see the future of the Scottish airports being aligned to that of the London airports. Some say that we should stop development in London to divert traffic to
  regional airports. From my experience and from my talks with those on the international airports scene, I know that we would divert traffic not to regional airports but to European airports. Instead of building up the British airline industry, we would be helping to build up the European industry.
  No matter how the airports in the United Kingdom are organised, the fact that half the population of Britain lives in the south-east means that that region must be the centre of activity. All that we in Scotland are asking for is a share of that prosperity and that Scottish airports should be tied in with the London airports.
  Mr. Robert C. Brown: I accept that the London airports must be the feeders for the north of England and Scotland. I would not worry too much about the utterances of Manchester Members. They are talking about the possibility of a transatlantic service, but Newcastle airport has had a transatlantic airport to Canada for the past three or four years. That is a help to Scotland, because Newcastle has a big catchment area and it is handy for Edinburgh and Glasgow.
  Mr. Lambie: I take that point. My hon. Friend's argument about Newcastle is the same sort of argument that I am making about the Scottish airports. My hon. Friend is interested in the future of one airport and I am interested in the future of the three lowland, airports in Scotland.
  Mr. Bowen Wells: When referring to London airports, does the hon. Member for Cunninghame, South (Mr. Lambie) include Stansted? Does he want Scottish traffic to be developed in relation to Stansted or to Heathrow and Gatwick?
  Mr. Lambie: I see Scottish traffic relating only to Gatwick and Heathrow. I hope that the Scottish holding company will be able to negotiate slots at Gatwick and Heathrow. We should not consider Stansted. I am sure that that problem will be discussed in full in Committee.
  I was disappointed when a Government Member said that Aberdeen airport should not be held back because of subsidies to help losses at Prestwick airport. It is bad
  724
  enough that Scottish Members should criticise one another about Scottish airports but I take exception to English Members interfering in the fight. We have enough problems without the enemy increasing them. That is why I was glad when I heard my hon. Friend the Member for Shettleston say that the profits from Prestwick had been used to develop other Scottish airports.
  Prestwick, unlike most other airports, is fortunate. All developments there are completed. Its terminal building will see us into the next century without further capital expenditure. The airport is ready to take international, long-haul planes without further expenditure on runways. All that we need now is one scheduled service to fly from Prestwick and the airport will make a profit. If Randall Fields is successful in its highland express venture and is permitted to fly from Prestwick to north America the airport will become profit-making.
  Major airports such as Gatwick and Heathrow could experience severe financial problems if the European Commission suddenly decides to abolish duty-free facilities. I should like to see the balance sheets for Heathrow and Gatwick without the income from duty-free sales. In two or three years Heathrow and Gatwick might have to rely on the profits from Scottish airports to help them to develop their own facilities and to develop Stansted.
  As a Scottish Member I travel by air most of the time and so use airports. Most Scottish Members arrive at the House wearing a bright tie because every time that they go through an airport they buy a tie. There are shirt factories and ice cream parlours. The emphasis is on capitalising and making money. The passengers who want to catch the aeroplanes and the airline companies that are paid to get passengers and luggage on the aeroplanes as quickly as possible are hemmed in by these concession facilities. Instead of airports being for the benefit of passengers and airlines, they are becoming commercial ventures to maximise profits. If the European Commission stops the sale of duty-free goods in most of the airports in south-east England, the airports will face tremendous difficulties.
  Sir Russell Johnston: Does the hon. Gentleman agree that most of the so-called duty-free facilities are rip-offs?
  Mr. Lambie: I do not want to go into that matter. It is another issue.
  I hope that, even at this late stage, the Government will reconsider their policy of privatising airports. Airports are a national asset, which should he owned by the nation.
  9.10 pm
  Mr. Terry Dicks: I approve in general terms of the Government's approach to the Bill although I share, almost completely, the doubts of my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery). I do not believe that a London system, as outlined by my right hon. Friend the Secretary of State, is needed. I am worried about Government powers to regulate and constrain airline operations. I am worried also about the lack of consultation with concessionaires at airports and the lack of protection given to them in the Bill.
  I must declare an interest because my wife works for one of the concessionaires at Heathrow. Although I see none of that income, I am told that it could be suggested that I benefit financially.

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  I am, as always, angry about the retention of the BAA's monopoly powers. My views on that organisation and those who run it, as distinct from those who work for it, are on the record. I think that almost everyone who is interested in airports policy knows how I feel.
  The London system can only be justified—contrary to what my right hon. Friend the Secretary of State said —if we seek to protect Stansted. There can be no other reason for having a holding company covering Heathrow, Gatwick and Stansted unless it is to protect the loss-maker of Stansted and to continue the BAA's policy of developing that airport, contrary to commercial practice and the requirements of the people in the area. Switching resources between the airports also means putting money into Stansted.
  We know that the holding company can invest in any of the three airports. It has to offer a competitive interest rate when lending money. I cannot for a minute envisage money from the holding company going into Heathrow, but I can imagine the holding company taking some of the profits from Heathrow and Gatwick and ploughing it into Stansted, even though its aim should be to get a reasonable rate of return. Heathrow profits will not necessarily go back to Heathrow. Those who create the profits at Heathrow will receive no benefit.
  The Secretary of State has the power to set air traffic movement limits, to allocate slots at airports and to distribute traffic between London's airports. If it is decided that enough traffic is using Heathrow, the market will not be able to dictate, as it should and would do if it were allowed to operate properly. Because of aeroplane landing arrangements between countries, British Airways is the only airline to which the Secretary of State can say, "You must use Gatwick or Stansted." That power concerns me and Britain's — nay, the world's — leading airline. We must watch this aspect carefully if and when the Secretary of State uses his powers.
  The Secretary of State can intervene in an airline's operations by redirecting it. He can affect the free market —that market that I thought my right hon. Friend so firmly advocated. I am worried about these powers to interfere. My right hon. Friend has said that he will use the powers if he sees a need, but I have great doubts about that. I am certain that there will come a time when either my right hon. Friend or his successor will use the powers to intervene in the market as they see fit.
  Mr. Anthony Steen: Does my hon. Friend agree that the scheduling committees which have been at work at Heathrow and Gatwick for many years have done sterling work, that the airlines should be allowed to sort out the slots as they have done so successfully, and that central Government should not interfere with the process?
  Mr. Dicks: I agree with my hon. Friend. There is nothing that I can add because, on this occasion, his words are mine.
  The total income from concessionaires to the BAA in 1984–85 was £178 million. The net contribution was £123 million. That amounts to almost 33 per cent. of the BAA's income. The BAA had a net profit on commercial services in that year of £98 million. However, those concessionaires were not consulted about one dot or comma of what is contained in the Bill. I find it incredible that
  726
  civil servants and Ministers should decide to bring the Bill before us and say, "Despite earning 33 per cent. of the BAA's profit, we felt it completely unnecessary to consult concessionaires to see what they felt about what was going on and how they felt the Bill would interfere with their operations." I find that amazing.
  It has been suggested that clause 33 might have an effect on concessionaires, but when one studies it one finds that the concessionaires are excluded from the operation of that clause.
  It has been claimed that clause 39(2)(a)(ii) gives the Civil Aviation Authority power to refer the airport operator to the Monopolies and Mergers Commission when its conduct may be against the public interest. It has been suggested that concessionaires will be covered by the clause, but the BAA is clever. It would not push concessionaires to the point where the CAA would have to interfere. The fair trading legislation would not be contravened by the BAA, because it is far too subtle.
  I shall give an example of the way that the BAA behaves. Until last year, a concessionaire had a concession from which the BAA took 10 per cent. of its turnover for five years. That concession came up for renewal and the BAA told the concessionaire that if he applied again it would take 12 per cent. of the turnover and for three years only. The concessionaire, reasonably, asked why. He was told, "Mind your own business. We do not have to tell you why. We will not tell you why. If you do not like the general terms, you can push off and go somewhere else." That is the BAA's attitude. It comes from the top, from Sir Norman Payne downwards.
  Mr. Tony Lloyd: I am genuinely fascinated by this little exchange. The hon. Gentleman has been making what he would regard as a strong case in favour of allowing market mechanisms to operate, but when — I agree, completely ridiculously—the BAA allows that mechanism to operate, the hon. Gentleman complains bitterly about it. Which does he want? Does he want the free market mechanism or something that is rigged? He wants something that is rigged.
  Mr. Dicks: The hon. Gentleman has missed the point. In a free market, there is some protection. Fair trading is generally carefully watched by the people within the organisations involved. They know what is going on.
  I wish to give a further example of what I was describing. The same company was in the process of negotiating the concession and the MMC had started to look into the BAA. The company had made a planning application. The BAA's officers said to the concessionaire, "Get that MP"—that is, me—"off our backs while the MMC is studying us and we will push on with your planning application."
  Understandably, the concessionaire thought that that was reasonable. He just wanted good will, to obtain the concession fairly and to succeed with the planning application. The minute that I backed off and the MMC finished with the BAA, what happened? The planning application has been delayed and pushed back.
  Clause 39(2)(a)(ii) does not cover such circumstances. The BAA is too subtle to break the fair trading legislation or the provisions of that clause. I want a guarantee that the word "concessionaire" will be included in the Bill and that there will be adequate powers to ensure that the bullying monopoly tactics used by the BAA cannot continue.

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  The terms of reference include the public interest but they should also include power to consider the private interest of individuals and companies which depend on airports for their livelihood. That is an important aspect. We hear about public interest all the time, quite rightly, but some of the activities of the concessionaires have a private interest which is different from the public interest. An example is car hire. Most of the concessionaires on the airport have a monopoly position, whether it be a tea shop or the shirt and tie shop that we have heard about. The car hire companies of an airport have to compete with each other. There is not a monopoly. The BAA deliberately fails to recognise the difference between one concessionaire and another.
  We must look carefully at the monopoly power of the BAA. I appeal to the Secretary of State not to have a holding company—let there be Heathrow Ltd., Gatwick Ltd. and Stansted Ltd. We know that Heathrow will make a fortune if it is sold, Gatwick will just about break even and nobody in his right mind will want to buy Stansted at the moment.
  Therefore, I agree with the general approach. I accept the concerns expressed by my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery). I beg the Secretary of State to ensure that he protects the concessionaires on the airport and looks carefully at the powers to regulate airline operation, because I fear that he will interfere with market forces and the way in which the airports operate.
  9.21 pm
  Mr. Frank Cook: I will detain the House only briefly because I know that the 72 clauses and five schedules and the nuts and bolts therein will be subjected to the flogging spanner and the swenchwrench of Committee. I must declare an interest in that, as a ratepayer of Cleveland, I hold a minor involvement in the affairs of one airport—Teesside. The Cleveland county authority controls its function together with Durham county council, so the remarks which follow are essentially based on that perspective.
  Bearing that in mind, I suppose I must thank the Secretary of State on Teesside's behalf for effectively removing the somewhat artifical categorisation of airports which had previously condemned Teesside — quite wrongly in my opinion—to third-rate status, denying it access to the substantial financial support on offer to other regional airports.
  Teesside airport can and does justifiably lay claim to be the regional airport at the centre of the north-east of England, with all the facilities, operational resources and expertise needed for its further development in terms of industrial investment, North sea gas and oil logistics, continental communication and holiday tour operations, and, allied to all of these, the job creation which is so desperately needed in an area which can, sadly, boast the highest levels of unemployment in the United Kingdom.
  Given the new equality of status among regional airports, I ask the Minister whether he will ensure that future Teesside operations will receive the same level of financial support as has been accorded to other regional airports. Furthermore, will the Minister fully acknowledge the previous handicap experienced by Teesside and make some provision to ensure that ground lost in the past is recovered, and recovered quickly?
  728
  I have noted with interest the proposals in clause 3 to extinguish the accumulated debts of the British Airports Authority — an undisclosed sum, but one which doubtless runs into many millions of pounds. I am sure that that action will prove a great attraction to cronies of the Secretary of State—the vultures of the City—when they are finally allowed to prey upon another vibrant and vital piece of public enterprise.
  A similarly juicy morsel is presently on offer, I understand, in the writing off of British Airways' financial liabilities. Is it intended to make provision for the extinguishing of all the debts of local authority airports, in similar fashion? Does the Secretary of State intend to write off the debt of Teesside airport and those moneys already committed for the next two years to provide for the latest updated radar equipment?
  Furthermore, clause 13, in part II, restricts the Secretary of State's powers of compulsion on local authorities to privatise to those operating airports with an annual turnover exceeding £1 million. It empowers the Secretary of State to raise that level by order. Surely the Minister agrees that such a low figure is of such little significance as to be positively footling, and if the Bill were to be enacted, it must be re-examined.
  I remind the Secretary of State that at the joint council meeting of the Joint Airports Committee of Local Authorities and the Airport Owners Association, held at Gatwick on 28 November, it was moved by Mr. Ian Crann of Cardiff and seconded by Mr. John Dyson, chairman of Teesside's airport committee, that that arbitrary annual. turnover trigger be raised from £l million to £10 million. That joint council represents every operational civil airport in the United Kingdom. All are represented on it and all. were present. There was no dissent to the motion that I outlined. It was carried nem con. Will the Secretary of State acknowledge that he should heed the formal and collective voice of that council, and as testimony to that acknowledgement, will he state his intention to amend that figure accordingly upwards to £10 million?
  I note that, in part III of the Bill, clauses 28 and 29, already referred to by several right hon. and hon. Members, would empower the Secretary of State to make rules governing the distribution of air traffic among airports and to impose limits on numbers of aircraft using airports within a given period. So much for the Government's public pronouncements against state intervention and in support of freedom. As on so many issues, they say one thing and mean the opposite. They abuse the English language and defy sound logic.
  Finally, I refer to the Minister's statement to the Joint Airports Committee of Local Authorities on 4 November, when he expressed support for the view that an airport system should be sufficiently mature to stand on its own feet and make its contribution to taxation. Is that what the Government have in mind following the enactment of the Bill, and if so, will the Minister say so tonight?
  9.28 pm
  Mr. Graham Bright: I welcome and support the Airports Bill, particularly the creation of public companies, open to external investment, to run the airports now run by local authorities.
  I disagree with the Bill on one point — the privatisation of the BAA in the London region. The Secretary of State knows only too well that I should have liked those airports to be treated separately, in the interests

  729
  of fair competition. I say that against the background of my constituency interest. The airport in my constituency will be the only independent airport in the London region.
  The Bill contains essential measures for loosening the direct control of central Government and local authorities over Britain's airports. The proposals are also a vindication, in part at least, of the arguments that I and my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) have been putting forward for the past five years. I have no doubt that they will make our airports more responsive to passengers' needs and to airlines' requirements, as well as freeing them from some of the constraints of public finance.
  I am conscious that my right hon. Friend the Secretary of State for Transport has had to frame the Bill with a number of considerations in mind. These go well beyond the provision of extra passenger capacity in the London area, the regions and Scotland. Problems connected with the role of Heathrow as the dominant airport at the centre of a network of international airline routes, the issue of air traffic distribution, the regulation of landing charges and the daunting problems of safety and security have inevitably had to be faced. The transfer of the BAA and local authority airports from direct public control also poses complex financial questions.
  The strategic decision to place our major commercial airports in private ownership is clearly right. Passenger traffic at Heathrow and the other London airports has consistently grown more rapidly than the economy since 1960. There is no doubt that this growth was by itself more than sufficient to attract the investment needed to expand those airports.
  With the greatest respect to Opposition Members, the record of the BAA in generating profits and providing new facilities since 1965 is irrelevant. Given the nature of the BAA's monopoly and the strength of passenger demand, it would have been amazing if the BAA had not done as well as it has. The profits and facilities would have been forthcoming anyway. There was never any justification for state ownership, and I am delighted that the Government have recognised the force of that argument and decided to act.
  Mr. Snape: Can the hon. Gentleman tell the House why, in view of what he has said about the BAA's profit record since 1965, he would rather see those profits in the private sector than in the public sector?
  Mr. Bright: The point is that there has been a belief that the BAA was necessary to provide these airports. I believe that with its monopoly it was the easiest thing in the world to produce the sort of growth that has taken place. If there had been private operations, there would now be a much slimmer and fitter organisation.
  Mr. Steen: Does my hon. Friend agree that the principal reason for privatising airports is to provide a wider share ownership so that everybody in the community can benefit from the success of the airports?
  Mr. Bright: I could not agree more with my hon. Friend. I shall deal with that later in my speech.
  The form that privatisation takes will be crucial. Until the BAA comes forward with its proposals to the Secretary of State, it will not be possible to judge precisely how that
  730
  is likely to operate. I am sure that my hon. Friends will wish to know in detail about the relationship between the holding company that has been envisaged and its seven airport subsidiaries.
  It is vital that transactions, particularly lending, between the holding company and its subsidiaries are transparent and on commercial terms. The problems that cross-subsidisation has caused to airports such as Luton, that are outside the BAA's empire, should not be allowed to recur and the damage that that has done in the past should not be under-estimated. Care must also be taken to ensure that no under-provision of capacity arises.
  The Minister will be aware of these two technical points and they are capable of resolution in Committee. The sale of the BAA will provide a unique investment opportunity. There is nothing new about private investment in airport terminals and hangars or even in commercial concessions. They are common in the United States and even at some local authority airports in Britain. That is certainly the case at Luton where Monarch Airways, Britannia Airways, McAlpine and many others privide facilities at the airport. The transfer of an entire group of airports to the private sector will provide those who work at the airports and those who live near them with the opportunity to acquire shares in those airports. In my view, those people ought to be given generous preference in whatever scheme is decided upon.
  There is no better barrier to the Opposition's threat of renationalisation than having public ownership by real people with a real stake in the success of these airports. There is also no better incentive to the work force than having a real stake in the airport at which they work, and that is often reflected in the service received by the public.
  I appreciate that the sale will have features which make it rather different from previous disposals. It is entirely right that matters of security and safety should remain with the Secretary of State. Given the bilateral arrangements between Governments about international air routes, it is also inevitable that the licensing and control of air traffic distribution should remain with the Secretary of State. I see no realistic alternative to the regulation of charging policy and trading practices which might exploit airport users. If the CAA and the Monopolies and Mergers Commission did not exist, we should have to invent them or to devise substitutes for them.
  The efforts of successive Governments to define airport policy have been complicated by the contrast between the shortage of passenger capacity in the London area and the evident surplus in the regions and in Scotland. The latter, I believe, is largely the result of over-optimistic assumptions by local authorities about traffic growth, and the consequent misinvestment has in many, although not all, cases been behind the pleas for forced redistribution of air traffic. I am glad that the Government have resisted those pressures and decided to open the way to much more commercial operation of local authority airports. The formation of public companies for municipal airports is a very welcome step forward.
  I appreciate the reluctance of local authorities to give up part of their empires, especially when they have been responsible for the airports for many years, but I do not believe that the ownership and control of airports is the essential function of local government. If it were, there would be even more under-used airports. It would be especially unfortunate if attempts were made to frustrate

  731
  the purposes of the Bill in that area, and I am glad that my right hon. Friend the Secretary of State is taking powers to forestall such manoeuvres.
  This aspect of the Bill directly affects my constituents as Luton airport is one of the town's two major employers and the only part of the London system not under the control of the BAA. We have had to compete against unfair subsidies paid to Stansted from the profits of Heathrow and Gatwick with the object of weaning away our traffic. Despite that, local airlines, with the support of the local council, have built up the passenger capacity to just under 2 million per year. We are aiming for 3·5 million as the next step, with an ultimate target of 5 million.
  I know from conversations with constituents and with workers at the airport that there is a widespread desire to have the opportunity of a direct and personal stake in the airport. That is no reflection on the council, which has run the airport until now. It is a positive response to the success of the Government's privatisation programme. If the people of Luton can buy their council houses and shares in British Telecom, there is no reason why they should be denied the chance to own shares in the local airport.
  Mr. Litherland: As a ratepayer to Manchester city council, I already have a share in Manchester airport. What good will issuing shares to other people do me?
  Mr. Bright: In that sense, I am a shareholder in Luton airport as a ratepayer in Luton, but I know very well that if we had private capital in the airport and if I were a private shareholder there would be far more accountability. I believe that it would also be much more efficient.
  Mr. Litherland: Where will the money come from?
  Mr. Bright: If the local authority sells 51 per cent. of the shares in the airport, the local authority will benefit from the sale. It will have that cash to invest or spend as it wishes in the future, so no one is losing anything.
  Mr. Robert Hughes: The money will go to the Treasury.
  Mr. Bright: I see no reason why a scheme cannot be devised to enable a substantial proportion of the equity to pass into the hands of airport employees and local residents. It is very important to consider schemes of that kind while leaving the council with a sizeable stake. If the council retains 49 per cent., that is a sizeable stake and, to all intents and purposes, a major control in the airport. The proceeds of the sale would be available for other purposes in the town. Luton airport used to make £1 million a year, which helped to subsidise the rates. Unfortunately, at the moment the airport is not making money and it is forecasting a loss for next year.
  If the council sold a 51 per cent. stake in the airport, that would probably raise enough money to make £1 million a year to subsidise the rates, yet the council would still have a 49 per cent. stake in the future profits of the airport.
  For all those reasons, the Airports Bill is the most positive step forward in airport policy in the past 20 years. It removes unfair cross-subsidisation and exposes the airports to clear accounting procedures. Ownership by private investors and institutions will provide a more commercial approach to meet the requirements of the growing passenger demand. The commercial approach will also enable local authority airports, which are big
  732
  business—Luton is the second largest business in my constituency—to pay management at the going rate. At the moment the airport director is limited in his earnings by what the town clerk earns. A corporation of the size of Luton airport needs the right sort of person to run it, and one must go out to the market to find the right person and pay the right sum. This opportunity to acquire commercial management experienced in aviation will help to make local authority airports much more competitive than in the past. I congratulate my right hon. Friend on taking this step, and I look forward to the progressive evolution o airport policy once the Bill has passed into law.
  9.41 pm
  Mr. Robert C. Brown: It seems to me that we have had this Second Reading before. We have a number of major public assets, in the main making money for the taxpayer and ratepayer after huge investments of taxpayers' and ratepayers' money over a period of time. Why is this?
  Tory doctrine holds that any publicly owned body which makes a profit is an evil concept and should not be allowed to continue other than in the private sector. Thai is the purpose of the Bill. I have never heard it suggested that all our loss-making pits should be sold to private enterprise or that rail services that lose money heavily but which are kept going because of social necessity, should be taken over by private entrepreneurs.
  Clause 2 provides a lot of gravy for the private purchaser of BAA. From the appointed day all properties, rights and liabilities will belong to the new company while any debts owed to the state will be written off. That is not a bad deal—all the goodies, all the gravy but none of the debts. I would not mind getting into that sort of act myself.
  Mr. Steen: Buy the shares.
  Mr. Brown: I have never bought a share in my life and I will not start now.
  My hon. Friend the Member for Stockton, North (Mr. Cook) was right to refer to clauses 12 and 13 as he did. In the debate on airports policy last June I asked why the ratepayers of Northumberland, Durham, North Tyneside, South Tyneside and Sunderland should be threatened with the privatisation of their airport. As ratepayers, they have poured many millions of pounds into the development of a first-class international airport at Newcastle. During the past three or four years, it has paid profits of £2 million or £3 million a year. Now we are told that it has to be privatised.
  Mr. Steen: No.
  Mr. Brown: It has to be made into a plc. [HON. MEMBERS: "Ah!"]. I shall not be confused as I was on 17 June, When the Under-Secretary of State said:
  "I suspect that there is a little confusion in the hon. Gentleman's mind."
  I must concede that there was. He continued:
  "The distinction involves passing legislation to form plcs. My right hon. Friend the Secretary of State said that we would not force those plcs to be privatised."—[Official Report, 17 June 1985; Vol. 87, c. 70.]
  Everything hangs on the Secretary of State's word. With the best will in the world, I would not buy a second-hand car from the Secretary of State. We must be fair and honest. His treatment of Tyne and Wear's integrated

  733
  transport system does not fill me with any confidence that his word will stay good even for the lifetime of this Government.
  Mr. Ridley: The hon. Gentleman says that he does not trust my word about whether local authorities will be forced to sell their airports. If he examines the Bill, he will find that there are no powers there to make them sell their shares in airports.
  Mr. Steen: Shame.
  Mr. Ridley: My hon. Friend the Member for South Hams (Mr. Steen) says, "Shame," but the hon. Member for Newcastle upon Tyne, North (Mr. Brown) might at least acknowledge the truth and tell his authorities about that.
  Mr. Brown: I am willing to concede the right hon. Gentleman's point, but it would not take long to introduce a simple amending Bill after this Bill has been on the statute book for 12 months or so.
  I want to be as generous as possible, as I was last June. I thanked the Minister then for lifting the limitation on air transport movements at Heathrow, and I do so again today. I hope that he will give me the assurance for which I asked last June and never got—that there will be no question of aircraft movements from Newcastle to Heathrow being shunted off to Gatwick or, worse, to that other place, Stansted. I should dearly like that assurance. I back everything that my hon. Friend the Member for Cunninghame, South (Mr. Lambie) said about that.
  During last June's debate, I asked the Under-Secretary of State whether he would give us that right to spend our own money on further improvements at Newcastle airport. He was unable to give any such assurance, but, surprise, surprise, shortly after that debate, Newcastle airport had its 50th anniversary celebrations and the Under-Secretary of State was the guest of honour. I was pleased to see him there and had a very good lunch with him. When he gets one of these plums, he likes to be able to say something. I was more than delighted when he was able to announce that he was giving the airport committee the right to bring forward to the current financial year improvements for next year. I pay tribute to the right hon. Gentleman and the Minister for giving us the year-early deal.
  If I were a suspicious man I would have asked, "Why have they done this? Is it to make it more attractive for private investment?" However, I do not lay that suggestion at the door of the right hon. Gentleman as I am well aware that that would be unworthy. He knows that so long as the present consortium runs that airport, there is precious little danger of private capital being involved.
  An article in this week's Airline World stated:
  "Government plans to privatise UK regional airports have met with bitter condemnation—branded as 'draconian', 'illogical', 'devious' and 'lunatic'."
  I would not go that far. Nevertheless, the strongest reaction came from the North East Regional Airport Committee, whose spokesman said:
  "Although the Airports Bill does not order local authorities to privatise their airports, NERAC claims the Government is 'using back door tactics' to pressurise councils into privatisation".
  I am sure that none of my hon. Friends would disagree with that. The article continues:
  734
  "Department of Transport demands for two sets of accounts to be produced by April—as a prelude to the conversion of airports into public limited companies — were described as 'quite horrific'."
  Whether or not it is horrific, it is a bit off that, before the Bill becomes law, the airport committee in the north-east is being dictated to by Department of Transport civil servants about how it should do its accounting.
  The Association of District Councils, whose chairman is Jim Swanwick, said this week:
  "Although there are aspects of national airports policy which would benefit from some of the proposals in the Bill, there is no evidence that any district council controlled airport, ranging from the smallest grass field to international centres such as Luton, has behaved in a way to inhibit competition or damage passengers' interests".
  No hon. Member who is reasonable could dissent from that. Mr. Swanwick adds:
  "There is no reason for them to be shackled by this Draconian legislation. Our airports have always been open to. and have welcomed, investment by the private sector."
  But there has been no rush by private investors to invest in Newcastle airport. He rightly adds:
  "Ministers must listen to reason on this occasion".
  I have news for Mr. Swanwick— he has far more optimism than I have. I do not believe that any Ministers in this Government will listen to reason. I commend to the Secretary of State the article by Bob Papworth on page 4 of Airline World. I doubt whether the right hon. Gentleman will sleep so well after he has read it, but it will do him good.
  9.53 pm
  Mr. Matthew Parris: My right hon. Friend the Secretary of State would not describe himself as either a wet or timid man, but this is a remarkably cautious Bill. I imagine that the Opposition Front Bench must have tossed a coin before the debate to decide whether to castigate my right hon. Friend for his ambition or to mock him for his timidity.
  Mr. Snape: There was no need. We were prepared to do both.
  Mr. Parris: I am not surprised that the hon. Gentleman is prepared to do both. I could compliment him on his fine head of hair and sympathise with his baldness, but there would be an inconsistency in doing so.
  My right hon. Friend was almost too cautious in the claims that he made for the Bill. He said quite correctly that there were severe limits to the amount of competition that one could envisage taking place between the southeastern airports. That is true. There is a limit to the extent that airports can compete. However, I would not say that there was no scope for competition. There are three British Airports Authority airports - Gatwick, Heathrow and Stansted. There is already a measure of competition between Gatwick and Heathrow. Moreover, airports compete not merely for the total number of air transport movements, but for business with passengers who are attracted by the range of facilities on offer. They can compete for particular types of business and categories of passenger. Therefore, there is scope for competition.
  No one has a kind word to say for Stansted, and I can understand why. However, sooner or later Gatwick and Heathrow will reach an absolute limit of ATMs, and there will be still more people who wish to fly to and from London. They will have to go somewhere. My right hon.

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  Friend the Secretary of State described modest plans for the expansion of business at Stansted. They must be modest, but there must also be expansion.
  It is true that in the short term there is an element of cross-subsidy. The cost of developing Stansted is met from the profits from Heathrow and Gatwick. When International Stores opened a supermarket in Ashbourne, it probably took years for it to recoup the cost. Nevertheless, it opened that store because in the long term the supermarket could make a profit. In the long term Stansted could make a modest profit and be a helpful contribution to ATMs in the south-east.
  The North of England Regional Consortium seemed to dither between two inconsistent arguments. It objects to forcing passengers to move around from one south-eastern airport to another by the subsidy of the latter at the expense of the former. Whether it objects to the idea of persuading, cajoling or bribing passengers to go to the northern airports is less clear. It is not right that passengers who may not wish to go to northern airports should be obliged or bribed to do so by Government or CAA policy.
  Mr. Silvester: My hon. Friend should be clear that the North of England Regional Consortium has never suggested any form of bribery or cajoling to persuade anybody to go anywhere. Its policy is to ensure that the development of Stansted is done on a commercial basis, and that it competes fairly with other airports.
  Mr. Parris: That is true. The consortium has probably been careful in its statements, but many of its supporters have been less careful. If the Bill becomes law, it will make it easier and more transparent for us to see how much Stansted is being subsidised, and to say whether it can be commercially justified. It would be difficult to do that at present.
  One does not necessarily criticise the management of the BAA or local authority airports when one says that they would be better run in the private sector or, in the case of local authority airports, as plcs. On the whole, the BAA does a good job. The one local authority airport that I know is the East Midlands airport, which does an extremely good job. I do not necessarily criticise the councillors, who do a splendid job, nor the airport authority which runs an efficient little airport, when I say that the airport could be run even better, if it were organised as a plc, as I hope it will be.
  I hope that some points relating to the Bill will be dealt with in Committee. Clause 27 gives the Secretary of State a power to issue directions of a general character where it is
  "necessary or expedient in the interests of national security or of relations with a country or territory outside the United Kingdom".
  I remember from my days in the Foreign Office that foreign Governments would often bring pressure to bear on the British Government to arrange for a flight to be allowed in or a terminal to be made available. In the Foreign Office we had the convenient excuse that we did not control the British Airports Authority in that day-to-day sense. We could pass on representations. The clause will give the Government the right to make such things available, which could put the Government in a difficult position. There should be some mechanism whereby—
  It being Ten o'clock, MR. SPEAKER interrupted the Business.

  Airports Bill

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Airports Bill may be proceeded with, though opposed, until any hour.—[Mr. Archie Hamilton.]
    Mr. Parris: There should be some method whereby the British Airports Authority could be compensated when, against its will, something that would not be in its commercial interest is forced upon it by the Government.
    Mr. William Cash: Does my hon. Friend agree that the Bill includes the directions to be given by the Secretary of State in relation to facilities that he believes should be made available to passengers? That could involve the British Airports Authority in extremely onerous tasks and expense, for which it would have no redress.
    Mr. Parris: That is contained in clause 58. As my hon. Friend has raised the matter, there is no need for me to repeat the point. However, in clause 27(b) (2)(c) the Secretary of State can make directions when he believes it is necessary to facilitate the discharge of any international obligation. I am not sure who defines an international obligation, whether it has a strictly legal meaning or whether the Foreign Office can say what it believes the international obligation to be. I hope that that point will be teased out further in Committee.
    Clause 39 is also worrying. It provides for the regular review every five years by the Monopolies and Mergers Commission of surprisingly detailed aspects of management of the BAA. We are not surprised to hear that landing charges will be subject to review, but I was surprised to read in subsection 2(2)(ii) that it applies to other activities of the BAA. The revenues and costs of those activities are taken into account by the authority in fixing charges. Given that landing charges make up a part of the total revenue of the authority I would have supposed that anything that costs the authority money or brings it revenue can be said to contribute towards the fixing of landing charges. The clause gives the Monopolies and Mergers Commission considerable powers to monitor and oversee the authority, which is inconsistent with the need to allow the BAA to manage.
    I have no doubt that the Treasury will complain that that practice will reduce the asking price that the Government can quote for the authority, because it implies strict control of profits. However, I do not complain about that, because that is not the purpose of selling the British Airports Authority. The clause interferes with the freedom of the management to manage. The Office of Fair Trading. which can consider such matters, would have been sufficient to do the job.
    There has been much discussion about whether local. authorities should be forced to "company-ise" their airports. Will the Minister consider the case where a local. authority is prepared to franchise the management of its airport and put the management out to tender so that a private company can manage the airport? In such a case there might be no need to oblige the airport to adopt the company structure, because it is franchising the airport to another company with a profitable company structure.

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    That should not be written into the Bill, but I would appreciate my right hon. Friend's thoughts on the matter at a later stage.
    One argument against the Bill is that Britain is the first country to think of doing this. It was one of the first countries to develop flying machines and the first to develop a commercial jet aeroplane. The claims for this Bill are much more modest than the advances recognised by those two inventions, but it has its merits and the fact that Britain was the first to recognise them is a cause for pride rather than shame.
    10.5 pm
    Mr. Tony Lloyd: If a Ridleyism was defined as locking oneself into an ideological trap and then writing a Bill with so many escape routes as to provoke the anger even of one's hon. Friends, this Bill is full of Ridleyisms. The Secretary of State has listened to a series of hon. Members telling him that, although they support the overall principle, they have many doubts about individual clauses and the Bill's implementation. In his opening speech, the Secretary of State failed completely to give satisfactory reasons for the inclusion of those ideological hiccups.
    However, it is not my brief to cover up for the Secretary of State. The Bill is shot through with nonsense. Indeed, many of its provisions are not only nonsense but would actively damage our airport system. What do we make of a Secretary of State who, in response to a question from one of his hon. Friends as to whether local authority airports would be at a competitive disadvantage were they not privatised, shrugged his shoulders and said, "Yes, but it is for the local authorities to do something about it."?
    The Secretary of State should not need reminding of the fact that he is charged with the nation's airport policy, and if he believes that those airports would be better if they were privatised, he should tell the House the truth, and tell us when he intends to privatise them, since the provisions of the Bill give him the power and the ability to do so. Although he became a little upset by the earlier suggestion that the power to privatise was explicit in the Bill, he cannot deny that the power is already implictly defined in many clauses.
    Although the Bill has caused great anguish in Manchester, it causes anxiety to many other local authority airports. In recent months in Manchester, the dirty tricks brigade, working from Conservative party head office downwards, has put heavy pressure on local councillors and attempted to sabotage agreements that were nearly reached in the Greater Manchester area. We saw the unedifying spectacle of the Conservative leader of Trafford borough council, who had proposed a plc structure for Manchester airport, being reprimanded by some ideological backwoodsmen and put under great pressure from local Members of Parliament, thus forcing him to break his word, given with the agreement of his group on the council, that a plc would be set up.
    Interestingly, the Conservative groups in most of the districts of Greater Manchester were happy with the agreement. There was no split among the bulk of greater Manchester authorities, but one highly ideological group in one area managed to sabotage an agreement that would have been in the interests of the entire area. The Secretary of State, who encouraged that—I am fully aware of the
    738
    exchanges between his Department and the local authorities—now takes to himself powers under clauses 14 and 20 to strangle a local authority airport if its performance does not conform to his desires. He could strangle it very easily under clause 14 should that local authority not come forward with a company structure that suits the demands of the Secretary of State.
    The Bill would allow the Secretary of State to impose an insistence that shares be sold off, that in effect the company should be privatised. Do I detect a sign of life? Is the Secretary of State shaking his head at that? Does he want to argue this point on clause 14 about whether or not he has such powers? If he could give us a reply to that, it would be reassuring to the people in areas with local authority airports.
    What is more sinister and worrying is that the Secretary of State has taken powers under clause 20 to guarantee that local authority airports will not have access to the capital market. The hon. Member for Altrincham and Sale (Sir F. Montgomery) when I questioned him about this, seemed to be either indifferent or not aware that that was the case. The hon. Gentleman dismissed the point by saying, "This is how local authorities always operate." If Manchester airport is to develop, it must have access(to finance on an equivalent basis to other airports.
    If this Conservative Government of ours are adamant that competition is the right way to go, why do they not allow Manchester airport to compete on equal terms? If the Government are insistent upon the efficiency of free market mechanisms, why do they not allow the free market financiers to decide whether investment in Manchester airport would be efficient or not? Surely that is the test, the attitude of would-be investors, and not an insistence by the Secretary of State to truncate development with what can only be one aim in mind—to force privatisation on local authorities, of whatever political complexion, which will be reluctant to have it.
    The right hon. Gentleman knows Greater Manchester will be reluctant, and particularly the city of Manchester, because it took the risk and played the entrepreneurial role. We hear a lot of talk about that on the Government side. Manchester did that, and the Government are now saying that Manchester airport and the authority will not be allowed to take advantage of the profits that their risk in the past have brought to fruition. That is the dishonesty about the whole operation. It is dishonest because the Secretary of State and his hon. Friends do not believe this nonsense about a wider share of ownership for all the people, because we already have that share. We already own the asset of Manchester airport through our capacity as ratepayers. He and his hon. Friends want rich pickings for their rich friends and nothing for the rest of us.
    Mr. Cash: Will the hon. Gentleman admit that the matter at issue here is prosperity for the consumer in relation to airport policy? Everything he says is based on a Socialist doctrine, but what matters to the consumer is the value he gets for his money. This Bill provides an opportunity for people at local authority and airports authority level to get something that represents value for money.
    Mr. Lloyd: That is an interesting idea, but it is not in keeping with what the Secretary of State has said. He said that the interests of the company should take precedence over the interests of councils. There was no mention there

    739
    of the consumer or the regional interests. If the hon. Gentleman is interested in the needs of our airports, he should bear in mind that an airport is increasingly a vital part of our national economy and should not be divided for the advantage of individual consumers.
    The single-minded doctrinaire approach of Government Members is fundamentally damaging to the future of an airports policy. If the hon. Gentleman is worried about the interests of the consumer perhaps he could explain why the Secretary of State proposes to sell off as a monopoly the British Airports Authority, which many hon. Gentlemen opposite have complained about. In many senses they have complained rightly, because there are inherent dangers for the consumer in that sort of structure.
    Mr. Cash: The laws of competition apply equally to an airports policy as they apply to anything else, and that is as a result of the treaty of Rome. If the hon. Gentleman does not know that, he has not studied the Bill or its implications.
    Mr. Lloyd: If we had a system in which competition was incapable of working, the hon. Gentleman would still wish to pursue his ideological claptrap in such a way as to prove that it is a completely imperfect situation for all concerned. That surely is the case.
    I move on, conveniently prompted by the hon. Gentlman, to the BAA.
    Mr. Ted Leadbitter: My hon. Friend should bear in mind that when an intervention comes his way which is a pearl in its own setting, he should be able to reply to the word "competition" by asking who the competitor is to BAA. It will be a private monopoly. We have not yet heard whether any competitor exists.
    Mr. Lloyd: If I had the experience of my hon. Friend, I am sure that I would have answered the intervention in that way. However, whoever replies to the hon. Gentleman is still replying to an argument shot through with nonsense and many ideological non sequiturs.
    Mr. Litherland: Will my hon. Friend advise the hon. Member for Stafford (Mr. Cash) of the initiative of our forefathers in bringing about the airport, the ship canal, the clean air legislation and the water authority? Where will such initiatives come from when enterprises are likely to be privatised at a later date by Conservatives?
    Mr. Lloyd: My hon. Friend is right. Such legislation is not only galling but disgusting. No recognition is given
    740
    to our entrepreneurial ability and to those who took the risks and provided the risk capital. Conservative Members are not interested in that side of the theories. They are simply interested in the snouts in the trough, the rich pickings for their rich friends, and, no doubt, the rich pickings for some of the hon. Members who take part in our debates. That is what the public in Manchester and many other places will recognise.
    The position of the BAA has already been strongly criticised by Conservative Members. Some have justified the system of cross-subsidisation under which Stansted will be allowed to continue as a necessary initial investment. That is an interesting idea, but it shows that, however little that airport is needed at present, however that issue was thought to have been resolved in the House a year ago, all that will now be ripped up by the Secretary of State. The Secretary of State has now sabotaged all the assurances that people thought had been given in the early debates on Stansted, and which we thought we had on the possibility of the development of regional airports, whether in Scotland or the north of England. The Secretary of State says that he will reply on transparency to prevent cross-subsidisation. He kids nobody but himself if he really belives that.
    Perhaps the final and most ridiculous ideological non sequitur in the Bill is that the Secretary of State—who claims, but timidly, to be an apostle of the free market —arrogates to himself such tremendous powers in the Bill that almost any aspect of airport policy can be overriden by the diktat of the Secretary of State. That is the Government revealed in their true colours. The Government mouth the language, and sometimes practise the obscenities, of private entreprise and the free market economy, but when it comes to the final reality they grab themselves powers more dictatorial than those possessed by many Governments of nations which we would describe as centralist and which are not prepared to let local initiative thrive. Those powers kill and attempt to snuff local initiatives and the achievements of local government and have not been replaced by a more democratic private sector, even if that were philosophically possible. That has been replaced by the diktat of the Secretary of State.
    The fact that many Conservative Members who represent or claim to represent contituencies in the northwest of England will tonight march through the Lobby in support of the Secretary of State will not go unremarked in their area when they betray the investment of their communities over many years.

  Airports Bill
  10.19 pm
  Mr. Alan Haselhurst: I welcome the Bill for two reasons. First, it encompasses the privatisation of the British Airports Authority and, secondly, it produces, through clause 29, the means of limiting the amount of activity at Stansted airport.
  Those purposes should receive little challenge from the Conservative Benches. We will encourage the Government in the direction in which they wish to go, and the points that we take up will be without prejudice to the Bill's objectives.
  I start with a number of general comments. This is a very regulatory Bill, which is a contrast to the liberalisation that characterises many other aspects of the Government's civil aviation policy. It seems weak on competition, and the interests of the customer could have been made a little more apparent.
  Hon. Members know my constituency interest in Stansted, but I hope that, as on previous occasions, I will not speak in a narrow, parochial way. My colleagues often inquire how my constituents have taken the decision to expand the airport. The BAA and its pollsters have been hard at work again and we are told that there is a 5:1 majority in favour of the expansion. However, when one reads the small print, one discovers that three quarters of those polled live in East Hertfordshire, Epping Forest and Harlow.
  There is still some resentment in my constituency about what has been done. The extent of that resentment is hard to measure; there has been some reluctant acquiescence. I should tell my right hon. Friend the Secretary of State that the atmosphere might be helped if some matters were clarified fairly soon. We should like to know a little more about the finances of the proposed rail link so that we are satisfied that it is being done in an open and above-board way.
  We are anxious to know about the disposal of safeguarded land that the BAA is to disgorge and we are anxious that the Government should back up their words about constraints on planning and development in the area. I know that that is not a matter for my right hon. Friend, but we are keen to ensure that there will be proper protection for the environment.
  Hon. Members will recognise that there is some irony in the nature of the safeguard that those around Stansted have been offered in respect of the limit of 7 million to 8 million passengers per annum. We are being asked to endorse a power that was first brought before the House in the ill-fated Civil Aviation Bill of the previous Session. I note that my right hon. Friend did not chance his luck by calling this measure the Civil Aviation Bill. He obviously hopes that the change of name will improve the fortunes of this measure.
  The protection to which I referred is the only one on offer, and it is better than nothing. I do not mean to be grudging, but I cannot fail to be aware of the innate clumsiness of that instrument. It is viewed with suspicion in professional quarters, and the Heathrow scheduling committee responded to the Government's consultations by saying that expressions of capacity of an airport over a period of a year are meaningless, would be difficult to
  742
  administer and cannot be related definitively to physical capacity. We shall certainly wish to examine that matter carefully in Committee.
  I assure the House and my right hon. Friend that I am not trying to fight yesterday's battle. The House has endorsed the Government's airports policy and I do not seek to undermine the House's decision by weasel, backdoor means. I emphasise that because there are some, maybe outside the House, who are all too ready to believe that I will use any opportunity to try to frustrate the will of the House. That is simply not so, especially in connection with the points that I wish to make about privatisation.
  It seems extraordinary for me to have to complain—I am not considered the purest of all in my competitive free market instincts—that the Bill does not seem to meet the full spirit of competition as I was brought up to understand it. That reservation has been expressed in other places about Biritish Telecom and British Gas. I am inclined to give the Government the benefit of the doubt in those cases. But the BAA? Handing all the London airports over to it is a profound worry.
  Even Her Majesty's Government concede that the BAA has not enjoyed the best possible reputation with users. What confidence can we have that, when given a lucrative monopoly in London, the leopard will change its spots? The BAA's influence is written large on the Government's proposals. Yet, the BAA itself is said to be worried at the volume of regulatory controls proposed.
  I am not convinced that the controls will be used in ways that will seriously discomfort it. In the main essential it will be left to mine the seam of gold which Heathrow represents, knowing that that airport can be filled without problem. There is also the seam of silver at Gatwick. When both those profit centres have used up their capacity, everyone will be told to go to Stansted, which will make that airport profitable. It will not require much effort or ingenuity to make money in such circumstances.
  What incentive will there be for the British Airports Authority to improve its airports? How responsive will it be to the airlines, its customers? The discipline of the international market will apply. Some business might be lost to Schiphol and Charles de Gaulle, but the tourist who wants to come to London because he wants to see London and because the value of the pound makes it particularly advantageous to come to Britain, will want to come to London. He will not go to Paris or Amsterdam. Similarly, the business man who has business in London will not satisfy his need by flying to Frankfurt. He will still want to come to London.
  The cash registers will continue to ring at Heathrow and Gatwick, house full signs will be erected, and latecomers will be directed down the road to Stansted. It is a cosy little formula, but it is a formula for inefficiency and lower customer standards.
  We shall want to test the argument that my right hon. Friend's way is the only way to privatise the British Airports Authority. My right hon. Friend intends to regulate closely. That will ensure that some of the disadvantages which he fears from the separate privatisation of London's airports will be avoided. It is hard to understand why the same regulations cannot apply equally to airports under separate ownership.
  Heathrow, as the real money spinner, will raise a good price on its own. There is no question of that. The system for allocating slots at Heathrow could continue to serve its

  743
  purpose irrespective of ownership. After all, if the airport is full, planes will have to go elsewhere. So what is the difference? If the owners of Heathrow plc face the prospect of business going from them to airports not in their ownership, they might become a little more determined to extract the maximum possible use out of Heathrow and to invest more to maintain their primacy in the system. To be more specific, they would have to have more interest in the Perry Oaks site than any multiple owner.
  Those of my hon. Friends who represent Heathrow interests might take fright at that reference, but it is essential that Perry Oaks be brought into the boundary of Heathrow airport, whatever is done with it. It is a marvellous opportunity to redesign and redevelop Heathrow 40 years after it was conceived. It could be put into the best possible shape for dealing with the civil aviation demands of the next century.
  Stansted could operate profitably at a 2 million to 3 million passengers per annum level as other airports have demonstrated, especially if its development costs are written off before the facilities are open. The owners of a Stansted plc would be out to sell the attractiveness of their modern airport. That would be a competitive element.
  I do not see how separate privatisation makes a prospectus more difficult to write. The future is always uncertain. People would still have a shrewd idea of what they were being asked to buy. I do not believe that a blind man could be deceived by a prospectus on the sale of Heathrow. Heathrow will be red-hot property. I am sure that the public purse will in no way suffer. However, knocking down the lot to the BAA in its present shape becomes even more worrying when one realises that the runways will go as well. What hope then of any competitive force being given access to those runways?
  Another concern is the prospect that the BAA, so strong to begin with, can become the eventual purchaser of regional airports. It already has management arrangements with three other airports outside the London and Scottish system, so on what possible philosophical grounds can the Government oppose the BAA takeover of Manchester or Birmingham if they have at the outset cast their blessing on the biggest monopoly of the lot in London?
  The fervour with which the Government seem to be arguing against competition is disturbing. It should sound a warning to the Conservative Benches that the proposals, however welcome in general—I shall vote for them—should be subjected to friendly but minute scrutiny. If only because the legislation will have a massive effect on the direction of civil aviation for several decades, that is what must surely happen.
  10.31 pm
  Mr. David Marshall: I should declare an interest as a sponsored member of the Transport and General Workers Union. I am delighted that my hon. Friend the Member for Aberdeen, North (Mr. Hughes) began his remarks by placing on record his appreciation of the excellent job done by the 7,000 BAA staff and other airport staff in the United Kingdom. I am sure that we are all grateful to those workers who keep the airports and aircraft operating all year round in all but the most harsh weather conditions. Yet what is to be their reward for their loyal and devoted service? Like the bus workers, as a result of the Transport Act 1985, the airport staff may find that their pension arrangements, let alone their future
  744
  wages and conditions, will be undermined. Yet again, the work force is most likely to pay the price for Tory party ideology. Tory party ideology is being put first. The Government's obsession with private enterprise and privatisation is taking precedence over what is in the best interests of air transport and Britain.
  The real reason for the Bill is not to do with transportation but the wish to provide another £500 million worth of assets for stripping. My hon. Friend the Member for Aberdeen, North suggested that the true value of the BAA may be more than £1 billion. In an article entitled "Airports Going Private" in the January/February 1986 edition of "Airport", Mike Costello, a senior analyst at Grieveson Grant and Co., stated:
  "Will the BAA be another Telecom? Its smaller size will inevitably lower the profile. In some other respects, however, the BAA can be compared with BT: it is essentially a growth business which has enjoyed a good measure of success, and it is in the public eye. Its enviable record of profits growth in all but three years since 1965 does not tally with conventional perceptions of a nationalised industry … The BAA last year reported profits after interest, but before tax, of £63·9m—up 39 per cent. on 1983/4… The reported profits of £63·9m have to be carefully considered when compared with most commercial enterprises. The BAA revalues its assets on a replacement cost basis and depreciates them accordingly. This approach does mean that profits are more conservatively stated than in many other companies … At this stage any valuation must be approximate. However, we see the BAA achieving a realistic value in the range of £450m to £520m."
  Yet the BAA could be worth well over £1·2 billion. That is what the Bill is about—another sale of the century, another scandal of £500 million of public assets—out assets — being given away to the get-rich-quick merchants in the City.
  As a Scottish Member, I am worried about the future, not only of our airports but of our service patterns. I fear that, although the BAA may be privatised into one company and may even have a separate holding company for its Scottish airports, there is nothing to prevent that privatised BAA from deciding subsequently to build up Glasgow airport and sell Prestwick, which would, in effect, be its death knell. The hon. Member for Wellingborough (Mr. Fry) more or less suggested that in his intervention.
  As a Glasgow Member, I, of course, want to see Glasgow airport built up substantially, and although there is spare capacity at Glasgow at the moment, if future demand begins to approach the traffic forecasts of the Department of Transport there will be a need for additional facilities at Glasgow and for Prestwick.
  Prestwick needs a breathing space. My hon. Friend the Member for Cunninghame, South (Mr. Lambie) put the case for Prestwick extremely well. He was correct to draw our attention to the agreed all-party report of the Select Committee on Scottish Affairs which he so admirably chairs.
  In Scotland, Prestwick like Ravenscraig is an emotive issue. Its wartime role may have something to do with that. However, there are good practical reasons for supporting a future for Prestwick, apart from giving the Secretary of State for Defence a seat in the House. Instead of arguing about Prestwick's future, we should be consolidating it.
  It is irksome for us to see the almost unlimited resources provided to improve links between London and Heathrow, London and Gatwick and London and Stanstead, and the billions of pounds of private money made available for a Channel tunnel when nothing is done to improve the links

  745
  between Prestwick and the rest of Scotland. Prestwick can and must be given a role in the future of aviation and it is up to the Government to do all that they can to help achieve that.
  On the future of Anglo-Scottish services, may I quote from the CAA consultative document on air traffic distribution in the London area, published in October. Under the heading "Displacement—Domestic Scheduled Services" paragraph 3.23 states:
  "Another possibility would be to split the domestic trunk route services which now operate into Heathrow, for example by frequency capping. (This technique could be applied to other routes too.) While Glasgow and Edinburgh both contribute a large number of interline passengers to Heathrow, the proportion of total route passengers who are transfer passengers is relatively low. If terminal passengers on the Glasgow and Edinburgh routes are, all other things being equal, indifferent between the four London airports there might be a case for transferring say a third of these services away from Heathrow. The operators on the route would have every incentive to try to ensure that those who travelled on the route into Heathrow were interlining passengers."
  That is completely unacceptable to airline passengers in Scotland. It would create confusion and treat us as second or third-rate travellers.
  The Bill will not help air transport or airports in the United Kingdom. I shall join my hon. Friends in the Lobby against the Bill.
  10.37 pm
  Mr. Patrick Thompson: Like my hon. Friend the Member for Saffron Walden (Mr.
  Haselhurst), I welcome the change in the name and nature of the Bill. I welcome and support the Bill's main purpose, although some of the detail will require deep examination and discussion in Committee.
  As I understand it. the Bill's purpose is to ensure and secure the efficient and profitable operation of the airports. It will provide the airports with the opportunity to meet the challenges of the future.
  I wish to speak only about the matters which affect the local authority regional airports. I declare an interest because Norwich airport is in my constituency. Its turnover is somewhat in excess of £1 million a year. and that airport will be affected by the Bill.
  I must refer to Norwich airport's history to make the points that I want to get across. Surface communications in the Norwich area are poor. My right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary will be aware of the continual lobbying that they receive from Norwich and East Anglian Members about the roads—the All and the A47—and the rail network. I should like to take the opportunity to pay tribute to my hon.
  Friend the Minister of State, Foreign and Commonwealth Office, the former Minister of State, Department of Transport, because we appreciate the work that she did to promote and help with the improvement of the road network in Norfolk. We shall be continuing with the pressure to improve communications in Norfolk and in East Anglia.
  Twenty years ago a decision was made to establish Norwich airport under joint control between Norwich city council and Norfolk county council. Since then, thanks to North sea oil and other business activity in the area, the airport has developed steadily and now 90 per cent. of the traffic in the Norwich airport is business-related. Recently
  746
  the Department of Transport granted special capital allocation to Norwich airport for the building of a new terminal at a cost of about £4·5 million. That will hopefully be completed towards the end of 1987.
  At the moment there appears to be, and I hope it will continue, a general consensus in Norwich that the aim of the Bill — to encourage that airport and other local authority airports to become Companies Act companies —is and should be supported. I welcome the decision which is now being taken by the Joint Airports Committee of Local Authorities and the local councils to separate the industrial estate from Norwich airport so that the element of cross-subsidy will cease and the airport will be able to stand on its own two feet in the future. I know that that is what my right hon. and hon. Friends want.
  There is a general consensus in Norwich and the surrounding area that the survival of Norwich airport is paramount. That must continue to develop for the benefit of commerce and jobs in Norwich. I should like to take this opportunity to pay tribute to the staff and management of Norwich airport for the good work that they have done, particularly in recent years.
  I see from local newspaper reports that local union leaders in Norwich are expressing fears for the future, but I do not see any evidence to support those fears. The Bill is broadly acceptable locally and is acceptable to JACOLA and to business and commerce. I am confident that the Bill will provide opportunity for Norwich and for those employees at the airport. Because of the commitment to the new terminal by the local authority and by JACOLA, it will be some 10 years before Norwich airport, standing on its own, will move into profit. although I see encouraging reports of significant improvement in the past year.
  There are two factors in the Bill which could affect the survival of Norwich airport—firstly, the timing under which it will move over to become a plc, a Companies Act company; and, secondly, the power of local councils to support and make loans to that associated company whenever it is formed. I hope that my hon. Friend the Under-Secretary of State for Transport will answer or clarify my questions when he replies. I understand that, under clause 12, the Secretary of State may give direction to the airport or to the authorities for the airport to become a Companies Act company. I understand that to mean that there will be a discretion or an ability to negotiate between the Secretary of State and the appropriate authorities in Norfolk as to exactly what the timing will be and when the airport will become a Companies Act company. I hope that my hon. Friend will answer that for me. Under clause 23, the council will have the power to make loans to the new Companies Act company. Again, I ask the Under-Secretary whether the authorities will or will not require the Secretary of State's permission to make those loans. My understanding is that they will not, but it is important that we have the answers to those questions.
  In their recent letter and press report, the union leaders asked the local Members of Parliament to make a stand to safeguard the operations of Norwich airport. Certainly, the local Members of Parliament want to make a stand to provide the best future for Norwich airport and jobs in the area. It is essential that there is a gradual transition so that the local government commitment remains, because it is now committed to substantial investment in the airport. Therefore, I support the Bill as it now stands. I am delighted that the Government are bringing it forward.

  747
  Norwich airport, is, perhaps more than many others, in the middle of a residential area in my constituency. In particular, the residents of Old Catton and Hellesdon are deeply interested in what will happen to the airport in future. Therefore, I intervened during the speech of the hon. Member for Leeds, West (Mr. Meadowcroft), when he talked about accountability and the teeth that the local council will have in the new arrangements, enabling it to bring forward constituents' views. I was interested in the hon. Gentleman's point, and I shall be interested to hear the remarks of my hon. Friend the Under-Secretary about how consultative committees and the local council will operate, so that local residents will have their say about the future of the airport in which they are all interested, for various reasons.
  Financial control under the new arrangements, as well as public spending controls, have been mentioned tonight. I have become a little uncertain about that, and I hope that my hon. Friend will clarify it. A letter that I received from the administration department of Norwich city council, quotes my hon. Friend the Under-Secretary, who was reported in the Financial Times of 17 January as saying:
  "Local authority airports will no longer be subject to public spending controls'."
  That is not quite what we have heard tonight. I am not giving a view or judgment on that, but it would be helpful to me and the local authorities in Norwich and Norfolk if we could have a little clarification of exactly what the position is.
  Norwich airport can and will benefit from the opportunities provided by the Bill, for increased passenger traffic, increased commercial activity and increased offshore activity. I hope that the questions that I have posed can be clarified, either now or in Committee. I welcome and support the Bill, which will help towards more effective management of local and regional airports such as Norwich.
  10.47 pm
  Mr. Ted Leadbitter: Experience in the House of Commons shows that Governments often make the great mistake of allowing their philosophies to become obsessions, whatever subject they touch. This is such a case. We have not yet been convinced in the House by debate or argument from the Secretary of State, today or on any previous occasion, that the Bill merits support. Indeed, there is sufficient cause for concern in that Conservative Members with special interests and experience, and representing their views in a most balanced way, have conveyed serious reservations to the Secretary of State.
  In such a situation, we are bound to ask: what are the benefits of the Bill for which the Secretary of State is seeking a Second Reading? Let us put aside for a moment—not too far away—the loyalties to party, and ask: are we convinced that there are any real benefits to the nation from the Bill? We have a public monopoly. Of our 140 airports, the BAA has control over the major seven—Heathrow, Gatwick and Stansted, and the four airports in Scotland. That is 80 per cent. of the passenger traffic, so we are dealing with a very powerful authority. The Secretary of State has made it clear that the BAA is not to be sold off in parcels with the possibility of some competition and the injection of entrepreneurial expertise. It is to go, lock, stock and barrel, as it is. When the Bill
  748
  has passed through Standing Committee, Third Reading and the other stages and is enacted, we shall still have the present chairman and board with the present personalities.
  The second question then arises. By what test shall we say that these honourable men of professional standing have lapsed in running the public undertaking to justify its becoming a private monopoly? That is a very important and interesting question. If we have to have the notion and semblance of competition, there has to be a competitor. At least when British Telecom was sold off there were powerful competitors to make the running. Here there will be none.
  Conservative Members have adequately expressed the concern arising from those two simple questions. Nevertheless, the sale is to take place. To what extent will the nation benefit? As I understand it, there are four main reasons for the Bill.
  First, it will reduce the size of the public sector. That may or may not be desirable, but it is not a sufficient argument to support a particular private enterprise exercise —unless it is agreed that the reduction of the public sector is of paramount importance. I suggest that that cannot be argued in this case.
  Secondly, we are told that it will widen share ownership. One can be pedantic about that. As was pointed out earlier, there is already public share ownership.
  Thirdly, it is argued that it will increase employee involvement by allowing employees to buy shares. It is within the qualifications of the present legislation and within the powers of the House, the Secretary of State and the BAA to involve all the employees in profit sharing. What is the difference? The Company has 17 years of profits. I am sure that the employees would be just as happy with a profit-sharing involvement as with buying shares.
  Fourthly, it is said that there will be greater freedom for management. Yet when the chairman and board approached the Secretary of State not long ago with an idea for managerial flexibility and initiative to bring private interests into play in setting up hotels in British airports, the Secretary of State was not satisfied with that competition and rejected the proposal.
  All those reasons having been set aside, we still do not have adequate evidence to support the need to translate a public monopoly into a private monopoly. I suggest that investors will have a hybrid form of investment. It is clear from the information that most of us have that operations involving BAA administration, including terminals, runways and other plant are running at a loss. The profit is solely in the retailing done at airports. For all the regulation envisaged by the White Paper and the Bill, there is no evidence to suggest that the retailing element will not burst out and have an impact on retailing business around airports. If the profit arises from duty-free goods, that is another cause for concern—will someone say, "Stop the duty free."? Where will the retailing end of the business go then? There is bound to be some uncertainty, even for investors.
  Before the Secretary of State's obsession is enacted, he should prepare himself for a Committee stage in which we shall want to satisfy ourselves that there is adequate protection for the airport user, the customer and the investor. More than that, we must ensure that the exercise does not deny the national interest.
  Mr. Eddie Loyden: Can my hon. Friend say with conviction that privatisation has benefited the consumer? For example, it is clear that some parts of British Telecom which used to be efficient are not so any longer, so the consumer is suffering.
  Mr. Leadbitter: I agree. There has been much comment on the investments and investors in BT.
  More important than privatisation, competition and value for money is the national interest. It is important to consider local authorities in areas such as mine. We on Teesside felt that it was of fundamental importance to have an airport to improve our communications with the rest of Britain and the continent. We had the most dire problems—the highest level of unemployment in the United Kingdom and rapidly declining heavy industries. We had to bring in new, active and lively industries.
  Cleveland county council, and its supporting districts, and Durham county council made a judgment. We did not have profit in mind when we developed Teesside airport. We can now pursue profit, however, because the airport generates new activity. It was essential to improve our communications so that we had a chance of bringing new industries to the area. To that extent we have had some success.
  Clauses 12 and 13 provide the qualifications under which a commercial undertaking can be set up as a company, and the Secretary of State saywns that in commercial practice we must work at arm's length. That might conceivably be correct in relation to buses—where they were competitors—but how does one work at arm's length when there is no competitor and when we cannot have the support of the county councils? In those circumstances, the Cleveland and Durham county councils, the north-eastern region and the airport at Teeside are placed in danger.
  The Secretary of State should take account of the pleas that have been made on behalf of the local authorities. In particular, he should take account of my special plea on behalf of a very special area that has a very special problem.
  11.1 pm
  Mr. Bill Walker: Unlike many of our debates, this one is about the present and the future rather than the past. We often talk about the past and are concerned about the loss of jobs. In this debate we are dealing with the present and the future, when jobs will exist and when more jobs will be created if we do things properly.
  I must at the outset declare an interest. I am a director of two aviation companies. Therefore, I approach the Bill with some knowledge of the problems that must be faced.
  The fortunes of the airlines and the airports are inextricably linked. The airlines depend on the provision of facilities by airport authorities that are fundamentlly important to airline operating standards, prices and services. The adequacy of an airline's facilities and prices and charges can have a profound effect on its commercial results, and that is the basis on which the airlines are looking at the Bill.
  In the short time at my disposal I shall touch on only one or two points, but I hope to have the opportunity in Committee of raising many of the matters that are causing concern to the airlines and to myself. I am one of the rare volunteers who occasionally emerge in the House.
  750
  I place on record my welcome for the Bill. It is long overdue. It was necessary to do something about the problems facing our airports. For more than 40 years various Governments have in different ways attempted to deal with those problems. The result is what we have today, and none of us can claim that we are happy with it.
  I understand the problems faced by the Government in trying to privatise anything, because that requires the cooperation of management and, as far as possible, of unions. I understand that that can inhibit some of the things that the Government wish to do.
  I remind the Government—as my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) did so well — that competition is an important element in our philosophy. We should not apologise for that, because the customer benefits. Anyone who thinks differently need only travel regularly between Glasgow, Edinburgh and London to realise what competition has done for the travellers on those routes. Therefore, competition pays.
  The Bill deals with airports, but we should remember that airports are merely runways with facilities to get aircraft and people in and out. We should remember that if someone else comes along later and wishes to invest his capital in a facility and to compete, he should, as of right, have access to the runways and taxiways. Unless that is so, we shall not open up opportunities for competition as the Government would wish. At the end of the day competition will give customers the best service.
  Since 1945 a major political issue has been: who determines the need for additional airport capacity, principally in the south-east? Recently, it has fallen to the BAA to make planning applications which are subject to extensive public inquiries. The Bill is almost silent on that. I must point out to my hon. Friend the Minister that the BAA does not own the Perry Oaks site. If an enterprising group of people puts up capital, as in the Channel tunnel project, and says, "We should like to provide an airport facility here" — as my hon. Friend the Member for Saffron Walden said, one would not build a palais de dance there—"but we cannot get access to the taxiways, runways and other facilities as of right", there is no future. I hope that that point will be considered.
  There is no provision for competition in the supply of aviation fuel to the airlines. We should consider that carefully, because fuel prices are far higher than they need be, certainly compared with the other side of the Atlantic. There is inadequate competition.
  As I am the only Scottish Conservative Member called to speak, it will not surprise hon. Members that I wish to put forward our views on Scottish airports. As far as I am aware, there is complete agreement about the future of Prestwick airport, and we welcome anything that will ensure the development and future of that fine airport. We are also pleased to note that Scots will decide on the appointment of the directors to the Scottish end of the BAA. I hope that is correct. It is important that decisions affecting Scottish airports are made by people who understand the Scottish dimension. Lest anyone should think there is no such thing, I remind the House of the problems that this Parliament has suffered because of a failure to understand it.
  The Highlands and Islands airports are an important part of the Scottish transport infrastructure. It is right to set up a private limited company for them and to examine the real costs in detail.
  Mr. Robert Hughes: When the Government tried to sell the Highlands division, they could not even find a buyer, so what is the point of setting up a plc?
  Mr. Walker: I am not trying to sell the airports. I never thought that that was a viable proposition. However, we can know exactly what it costs to operate those airports. If their overheads include a substantial part of the CAA's overheads, we should not be surprised if the figures are distorted. I have never believed that the figures published for those airports were accurate. They were distorted by other factors. There is scope, certainly in the CAA airports, to privatise the management of the Scottish airports, provided it can be shown that the privatised management can make savings in the deficiency that is made up by the Scottish Office. If we can show that savings can be made to the benefit of the airports and consumers, that should be done. I look forward to seeing something in the Bill to provide scope for that.
  Mr. Loyden: Evidence of the tragedies that have taken place at airports shows that in the view of all reasonable minds more regulations are required in airports rather than a relaxation. The tragedies that have occurred in Britain and throughout the world show that airports require greater constraints on their activities, not the removal of them.
  Mr. Walker: I am sorry that I allowed the hon. Gentleman to intervene. He has made no attempt to study what I am trying to say. Nothing that I have said suggests that the safety aspect should be diluted. I have spent my life flying in and out of airports. The last thing that I want is an airport that is unsafe. Obviously one wants safe airports, but safety is not necessarily achieved by extra costs and expense. That has not been my experience. We want airports to be run more effectively and efficiently.
  I wish to consider slot allocations and air traffic control. The Bill should provide for appeals against decisions of the national air traffic control services. That was mentioned earlier in the debate. I believe that is a weakness in the structure of the arrangements. Ministers are in a better position to consider appeals. I should like a formalised procedure, as there is with planning applications, for appeals against the national air traffic control services if its decisions—taken for whatever good reason—have an adverse affect on others using the area.
  The airlines believe that the slot allocation, as operated by the scheduling committee, is sensible because it does not attempt to achieve artificial figures. It is involved in the art of the possible. The airlines make arrangements between themselves. I repeat what my hon. Friend the Member for Saffron Waldon said. To publish annual aircraft movement figures is nonsense. Those figures are hourly and daily and can vary from time to time. The airlines are the best equipped to determine them.
  I ask my right hon. and hon. Friends on the Front Bench to remember that airlines are the customers of airports. Airlines and airports exist to provide a service to air passengers. They do not exist for any other reason. Competition provides the best deal for the customer. I remind those who doubt that to travel regularly between Glasgow, London and Edinburgh to see what competition has done on those routes.
  11.13 pm
  Mr. Gerald Howarth: I warmly welcome the withdrawal of the Secretary of
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  State's earlier Bill. That demonstrates the flexibility shown by the Government in so many areas where things do not command the approval of the House. They have seen the light.
  I welcome the fact that my right hon. Friend has no plans to introduce an air transport movement limit on Heathrow and Gatwick. That is a welcome sign, but I have reservations about the fact that he is taking powers to impose limits. I understand the need to impose limits on Stansted, because that is part of the agreed deal that my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) was able to extract. However, I fear that if we were unfortunate enough to have a Labour Government, they would be keen to exercise those powers at airports other than Stansted. Of course, that prospect has receded after the performance of the Leader of the Opposition this afternoon.
  My second point relates to the London airport system and traffic distribution. I still disagree with the desire of my right hon. Friend to privatise the three London airports en bloc. [HON. MEMBERS: "Hear, hear".] I hear what my hon. Friends say. It is interesting to note that, about a year ago, few people were calling for the privatisation of the three airports separately. However, as time has gone by, the argument has become more and more persuasive that those three airports could and should be privatised separately. A measure of the complexity that has resulted from our not doing this is the fact that one third of the Bill deals with economic regulation designed to even out the problems that will be caused by privatising the BAA in its present form.
  My right hon. Friend rejects our proposal on the ground that it might result in the smaller airlines being squeezed out of Heathrow. But, in reply to an intervention from me, he said that the British Airports Authority already squeezes people out as part of its plan riot to allow traffic to flow naturally into Stansted, but to squeeze it into Stansted. That process would continue under British Airports Authority plc.
  I cannot believe that the entrepreneurial future which my right hon. Friend envisages will be as entrepreneurial as he or I would wish. If and when Heathrow is full, the company which operates that airport will have no real incentive to maximise Heathrow as the jewel in the crown. There will be no incentive to develop terminal 5, as my hon. Friend the Member for Saffron Walden rightly said, as the key to taking out the centre of Heathrow, which is an old-fashioned airport system, and making it into a modern system, at the same time increasing airport capacity. There will be no incentive to build a STOL runway between the A4 and the M4. There will be no incentive to put airport terminal management out to franchise to another operator. Therefore, when BAA plc decides arbitrarily—as the BAA quango now does—that Heathrow is full, it will direct to Stansted that traffic which it no longer wishes to take at Heathrow.
  What would happen if the three airports were run separately? The present position with the slots at Heathrow and Gatwick is clear. There are a few slots le ft at Heathrow, and Gatwick is pretty full. If we had been having this debate 10 or 15 years ago, it could have been argued that Stansted was a white elephant. But the fact that Gatwick is almost full and that Heathrow is getting that way means that Stansted cannot be regarded as a white

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  elephant. I believe that someone would be willing to buy Stansted as it is, with the prospect that it would take some of that overflow traffic.
  I shall quote some remarks from the Heathrow scheduling committee and point out to my right hon. Friend that that committee schedules movements for no fewer than 86 airports. Its submission states that there is no need for further distribution rules, and continues:
  "It should be stated that the current Scheduling Committee System for the allocation of scarce airport resources has operated successfully for many years and is far more robust than is generally thought by those outside the industry. Every carrier is acutely aware of the increasing risk that it will not achieve its desired slots and that decisions will have to be made on how best to cope with this situation when it arises. The options include acceptance of sub-optimal timings, a rearrangement of historic and the sub-optimal timings offered to achieve a satisfactory compromise, the acceptance of more optimal slots at an alternative airport and the use of higher capacity aircraft. As pointed out in our submission to the Department Transport, carriers prefer to order their own destinies by making their own decisions when faced with such problems. Government interference in such matters through the promulgation of sweeping artificial rules destroys freedom of choice by the carriers, normally motivated by the wishes of their customers and the closely associated profit motive. It is a paradox for government to advocate deregulation of air transport and at the same time introduce new regulation, punitive for some carriers, in order to enable it to happen."
  Upon that I rest my case on scheduling.
  Birmingham is the airport serving my constituency, and a number of points have been raised on it. I should like my hon. Friend the Minister to comment upon those if he can. One is the requirement for the CAA to grant permission to levy airport charges and impose conditions in that respect. As the Birmingham airport people point out, in the White Paper this control did not apply to all airports. They see this as representing an extension of the provisions in the White Paper. They and I would like to hear the Minister's comments on that.
  They also looked at the provisions in the Bill about the privatisation of the British Airports Authority and compared them to the changes in local authority ownership, which they see as being
  "extremely difficult as the majority of powers in relation to the conversion of the BAA rest with the Secretary of State."
  One good point they make is:
  "It is proposed to extinguish all the BAA debts to the Secretary of State. This can hardly be seen fair to Local Authorities who are very unlikely to be able to do likewise and it is possible that some of the early Stansted development expenditure will be written off in this way prior to privatisation, thus improving Stansted's financial position."
  I certainly do not want to see anything done at Stansted that would involve the writing off of taxpayers' money at the expense of Heathrow.
  I support the Bill, despite my reservations. It will help the employees of the British Airports Authority. At least they will have a stake in their business. A lot of detail still has to be worked out. I hope that my right hon. Friend will agree, as with the Transport Bill dealing with buses, to seek to fashion a better Bill in Committee.
  11.23 pm
  Mr. Patrick Ground: I welcome the Bill and the opportunities it brings to employees to buy shares. I hope that those opportunities will be at least as generous as the ones made available to employees in British Telecom. I am glad this Bill is
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  coming after the main decisions have been taken on the expansion of the London airports system. The right decision has been made to privatise that system as a whole. I accept the need for the regulation of traffic, and I accept that for the reasons that have been given by the Secretary of State.
  I represent a constituency near Heathrow and I welcome the relief afforded to Heathrow and Gatwick by expansion at Stansted. The methods that have achieved success for Gatwick could equally well be applied for the success of Stansted. I agree with my hon. Friend the Member for Derbyshire, West (Mr. Parris) who said that there is no reason why Stansted cannot be a success in the way that Gatwick has been a success. During the debate, some hon. Members have said that Stansted is likely to be unsuccessful, but that was also said about Gatwick in its early stages.
  I should like to make two comments about parts of this Bill. First, in relation to part III and clause 29, I should like to see specific provisions for consultation with bodies other than and in addition to those inside the air transport industry. That process of consultation could usefully be widened.
  Secondly, I am concerned about the limitation of ownership of shares. I am attracted by the solution put forward by my hon. Friend the Member for Meriden (Mr. Mills) of a golden share provision. It would also be worth looking at the possibility of limiting the percentage holding of any individual shareholder because there are plain dangers if the airport system comes under the control of either a single airline or group of airlines or foreign interests, against the public interest of this country. Therefore, I urge my right hon. Friend the Secretary of State to look carefully at the limitation of shareholdings in that way. I ask him to bear in mind that this is the first measure for the privatisation of airports and caution in that regard is worth considering.
  The Bill is none the worse for the element of caution in other regards which has been criticised by some hon. Members because the Bill recognises the particular difficulties of privatising the airport system. Therefore, I commend it to the House.
  11.26 pm
  Mr. Fred Silvester: I want to concentrate on one aspect. It is fascinating that my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary of State have, between them, probably been the most effective and successful Ministers in aviation policy for a long time. They have done a great deal for regional airports and for freeing air transport for passengers and they have tackled some of the thorny problems, including the Stansted decision.
  Therefore, it is odd that the Bill comes not quite right. It is in the process of spoiling their achievement. Let me describe what I think my right hon. Friend is seeking to do and say why the Bill slightly misses out. As I understood it, the object of the exercise is to create an airport structure in Britain which is as responsive as possible to consumer demands. My right hon. Friend has to do that in the context of a highly regulated international system and in the context of heavy demands in some airports which are rather greater than the supply at the moment.
  My right hon. Friend grasped the nettle on that point by giving planning permission for Stansted up to between

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  7 million and 8 million passengers a year or so ago. That decision was crucial because it made available at Stansted additional capacity for the London system. In the Bill my right hon. Friend has added to that a curious superstructure which I must confess mystifies me.
  I am told that my right hon. Friend has set his heart on privatising BAA in one lump. My hon. Friend the Member for Saffron Walden (Mr. Haselhurst) and others have made powerful arguments as to why it should be done in separate airports. I have no doubt that that could be done in separate airports if my right hon. Friend wished. When we had discussions about the matter before, my right hon. Friend went to some lengths to secure fair competition between airports and he spoke, for example, of commercial rates of interest between the holding company and Stansted and also of the transparency of accounts.
  I gave considerable thought to his propositions in those respects but I have come to the conclusion that neither are adequate for the purpose that he set himself. I do not believe that the two measures he proposes provide adequate competition between airports.
  It is difficult to determine what is a commercial rate of interest when one is being underwritten by a holding company that has the booze at Heathrow at its back. Secondly, the transparency of accounts depends on the attitude of the management, and we know that the BAA wishes to develop the system around London as one airport. It will use its powers to direct, entice, bribe or in other ways ensure that airlines go to Stansted.
  My hon. and learned Friend the Member for Feltham and Heston (Mr. Ground) was talking about whether Stansted will be successful. I have no doubt that it will be successful. My right hon. Friend's decision on planning has ensured that the airport will grow. However, in the past 12 years, Stansted has been unprofitable. The BAA has run it unprofitably, largely because it has overinvested and sought to make Stansted's capacity greater than its requirements. Nothing in the Bill will prevent that system from continuing. If Stansted were a separate airport, the requirement to develop at a proper speed would be much more firmly placed on its board.
  I will not go into greater detail, but it is a pity that the Bill misses the opportunity to create a structure under which all the airports—BAA and local authority airports — would operate competitively as best they could. I noted that my right hon. Friend said that one reason why he could not privatise airports separately was that there was no practical way of producing competition between BAA airports. That is not the point. The point is that there should be competition between all airports — local authority and BAA airports. We are concerned with the whole airport structure.
  I can understand why clause 20 is in the Bill. It reflects the current state of local authority airports, but if they become public limited companies, they will be subject to corporation tax. If we are to make them subject to private restraint in one sense, we cannot make them subject to public restraint in another.
  My right hon. Friend has a wonderful opportunity to set all the airports on the same competitive basis, able to operate in response to market forces, subject only to international control. I ask my right hon. Friend to think again, as he pilots the Bill through the House, about the central issue of whether the BAA should be disinvested in one lump.
  11.33 pm
  Mr. Peter Snape: In many ways, this has been one of the strangest debates that I have heard in the 12 years that I have been an hon. Member.
  It appears that the Conservative party favours privatisation and generally supports the Bill, but, without exception, every Conservative Member who has spoken has qualified his view that this is a good Bill, and those hon. Members have hedged their bets on the effect of the Bill on their local or regional airports and, in the case of Scottish Members, on the impact of the Bill on Scotland's airports.
  Listening to most Conservative Members, one would have thought that there was little that was good about our airports and the way in which they are run. I am sorry that, with the exception of the hon. Member for Norwich, North (Mr. Thompson), no Conservative Member could find the time to praise those at all grades and levels in our airports who, largely through their own efforts, have made the British airports industry a comparative success in recent years.
  My hon. Friend the Member for Hartlepool (Mr. Leadbitter) and others asked the key questions: what is in the Bill for Britain? What impact will the Bill have on cur aviation industry? Will the Bill be good for this country? Answers have been sadly lacking from the Government.
  Those who have made representations about the Bill—to hon. Members on both sides, I am sure—are many and varied. Their collective view is that the Bill will not be beneficial to British aviation or to the airports industry in the United Kingdom. Even the British Airports Authority, which appears from the first parts of the Bill to be a beneficiary, is less than wholehearted in its support. Like management in any walk of life, it would rather not be under Government control but make its decisions in the commercial market.
  The BAA is repelled, as are some Government Members, by the amount of central control that will be in the Secretary of State's hands. I understand the reluctance of Government Members to place too much responsibility in the hands of the Secretary of State because he is a reckless soul. One would not give him any greater task than boiling a breakfast egg because he would probably make a mess of it. I understnd the reluctance throughout the aviation industry and among Government Members to give the right hon. Gentleman the central role envisaged in the Bill.
  Concern about the Bill's impact has been expressed by the users of British airports and by hon. Members on both sides of the House. British and foreign airlines have voiced their concern. In a letter dated 23 January, the British Caledonian head of government and industry affairs says:
  "Generally our main criticism is that nowhere in the Bill is the BAA actually charged with responsibility for providing adequate facilities and services at airports for users. We are also unhappy about provisions for consultation and the limited provisions for users"—
  that is, the airlines—
  "to refer matters, particularly those relating to charges, to the Monopolies and Mergers Commission."
  I am sure that the hon. Member for Brentwood and Ongar (Mr. McCrindle) will be delighted that I have put that on the record, because a successful, privately owned airline is expressing in no uncertain terms its reservations about the Bill.

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  Not only British airlines have expressed strong reservations. In a joint submission, Pan American and TWA express their deep concern about the Bill. They say:
  "The deficiencies in the proposals are as follows: As a proposal for regulation the Bill is seriously deficient … The main defects are that there is no duty on the BAA to provide any services or facilities or meet any proven demand … The CAA has insufficient power to regulate directly the level of charges. The interposition of the Monopolies and Mergers Commission makes the procedures laborious and ineffective … The charging standards to be applied are not laid down in the legislation."
  They detail another four fundamental objections which foreign airlines have about the flaws in the Bill.
  The views of another group have never been sought, yet I am sure that if they were it would say that there was no need for this doctrinaire nonsense. No one has bothered to ask passenger and freight customers whether they are satisfied. No one has bothered to solicit the views of those who use our airlines to send cargoes all over the world. The Government, in their habitual burst of blind ideology, believe that the privatisation process, by one method or another—in this case, by the back door—is necessary to bring about a better service, but no one else believes that. Such a belief has never been properly amplified in this debate.
  Given the lack of time, I regret that I am not able to comment in detail on all the views expressed by hon. Members. I shall refer to just a few. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) gave his usual effective defence of Manchester international airport. Basing his comments on his knowledge and constituency involvement, he referred to the belief of all the grades of people who work at Manchester airport that the Bill's proposals will not be good for the future of the work force or of the airport. Like many other hon. Members, my right hon. Friend the Member for Wythenshawe referred to the lack of assurances on the abolition of the Stansted subsidy and the effects on Manchester and other airports if that subsidy is not removed.
  The hon. Member for Meriden (Mr. Mills) rightly pointed out the unfairness of writing off the BAA's debts yet leaving local authority plcs saddled with the debts which they have, for good reason, incurred over the years. He rather stood reality on its head by saying that there was no need to force passengers to use airports such as Birmingham. The reality is that passengers from the Birmingham area—the constituency of the hon. Member for Meriden—are forced to use airports in the south of England because of the impact of existing policies on regional airports. I regret that the hon. Member for Meriden has not yet shed his illusions as successfully as he has shed the pounds in recent months.
  My hon. Friend the Member for Cunninghame, South (Mr. Lambie) made his usual able defence of Scottish airports, especially in relation to Prestwick's future.
  The hon. Member for Altrincham and Sale (Sir F. Montgomery) demonstrated a number of illusions dear to his heart. Obviously, he failed to understand the difference between a local authority and a Companies Act company. When asked by my hon. Friend the Member for Stretford (Mr. Lloyd) why a BAA successor company should be afforded the facility of open market funding when a similar facility was denied to a plc under the control of a local
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  authority, the hon. Member for Altrincham and Sale gave no answer. We are entitled to ask: why is there an inherent unfairness in treatment? Why should the BAA be allowed access to the open market and local authority plcs?
  We saw a typical example of the blinkered ideology of the Secretary of State. He fails to understand that the employment of private capital is not necessarily tied in with share capital. Surely, private interests invest in undertakings when they can secure a proper return on their capital. It might surprise some Conservative Members—it will surprise the Secretary of State because he knows nothing about these matters—that millions of pounds of private capital are already tied up in airports such as Manchester international airport. Private capital—I pay tribute to it — put up £10 million to build a cargo terminal at Manchester airport. Private capital would not have put up such an amount if it had any fears about the way in which Manchester airport was operating or would operate in future. Private capital invested to show its confidence in Manchester airport's public ownership. That is a truism that the right hon. Gentleman fails to understand.
  I return, as have other hon. Members, to the subject of the restructuring of the airports in the London area. No fewer than 10 hon. Members on both sides of the House have expressed their desire to see the ending of the subsidy to Stansted airport. There is a big difference between eliminating that subsidy and showing it in Stansted's accounts. Until and unless we receive that assurance, the reservations that I have expressed will bother hon. Members on both sides of the House. I hope that they will continue to exercise hon. Members' minds in Committee.
  It would be remiss of me if I did not refer to the hon. Member for Saffron Walden (Mr. Haselhurst). He rightly reminded the House of the shambles that the right hon. Gentleman made of his Civil Aviation Bill. I am not the one to remind him of that, because when I asked him about his back-door privatisation a few hours ago he told me that I would not understand because I was thick. I will take that from many Conservative Members, but I have some difficulty in accepting it from the right hon. Gentleman. I might not have gone to the same school as he did, and I might have left school a good few years before he did, but I have not been in court three times in the past two years, and it has not been said about me by a High Court that I have acted illegally, irrationally and improperly, as has been said about the right hon. Gentleman on no fewer than three occasions.
  We need no lectures from the likes of the right hon. Gentleman on who in the House is and who is not thick. I hope that we shall see him at least fleetingly in Committee, because if he does not know much about the Bill, he knows how to make us laugh. We might need a few laughs in Committee. When the Committee deals with the ideological rubbish that is before the House we shall need people with some knowledge of aviation from both sides of the House. Despite what has been said by the hon. Members for Saffron Walden and for Manchester, Withington (Mr. Silvester)— I normally disagree with him, but I pay tribute to his interest in these matters—I hope that they will be on the Committee to give the right hon. Gentleman the benefit of their knowledge of these matters.
  I even hope that we shall see the hon. Member for South Ribble (Mr. Atkins) on the Committee because he is always good for a bit of chuckle if he does not know much

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  about the subject. I hope the right hon Gentleman does not exclude those of his right hon. Friends who helped the Opposition humiliate him on the Civil Aviation Bill, because if anyone needs humiliating it is the right hon. Gentleman. The Bill is not even accepted by most of his hon. Friends.
  That is a nice set of molars that the right hon. Gentleman has and I appreciate the view. If the Bill is not improved drastically in Committee, he will be doing a great deal of yawning.
  11.49 pm
  Mr. Bowen Wells: I feel that I must speak on behalf of my constituents, because over 12,000 housing applications have been made to the East Herts district council since my right hon. Friend the Secretary of State announced his decision to expand Stansted airport. According to the report on Stansted, 12,000 houses are required for the expansion of that airport to take 15 million passengers per annum. Those 12,000 were in Bishops Stortford alone.
  I shall speak in note form, in view of the time. I very much welcome the Bill because it will prise the British Airports Authority away from the dead hands of the Department of Transport and the Treasury and enable it to operate more rationally and competitively. I am sorry, as are my hon. Friends the Members for Saffron Walden (Mr. Haselhurst), for Manchester, Withington (Mr. Silvester) and for Cannock and Burntwood (Mr. Howarth), that the competition element of the Bill is seriously limited. We will end up with a series of plcs, mostly owned by local authorities, plus the British Airports Authority owning the whole of the London system and the Scottish system. The London system will not be properly competitive unless the airports are denationalised separately. I hope that my hon. Friends will join me in Committee in persuading the Secretary of State to accept a amendment to denationalise them separately.
  I agree that Heathrow cannot possibly be redeveloped as is necessary, because it is now reckoned to be not just a second-rate airport but a third-rate airport. Many travellers from the United States of America and friends of mine say that it is the worst airport in the world for tourists to travel to. What a reputation.
  It is the British Airports Authority, which runs Heathrow, to which the Secretary of State is going to give the monopoly to develop the whole of the London system. It will be a disincentive to the development of London airport not to take in the Perry Oaks site and the land to the M25; the whole airport needs a total redevelopment and I hope that it happens quickly.
  I do not believe that the air traffic movements limitation in the development of Stansted which my right hon. friend the Secretary of State has used to try to redeem his pledge to restrict the number of passengers to 8 million per annum, can possibly be effective. Any measures taken by the Government to limit airline access to the airport that they want to go to will have serious international repercussions which my right hon. Friend, the Foreign Office and the Government will be unable to withstand. Therefore, I do not believe that we can implement the limitation at Stansted and I do not believe that my right hon. Friend can direct airlines and refuse it. Nonetheless, as a cosmetic measure, I suppose we will have to be satisfied with it. It would be much better if my right hon. Friend allowed proper competition between the airlines.
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  I hope that my right hon. Friend will make clear to the House what he means by the financial write-off which has been described. If he means writing off the development expenditure at Stansted airport, he is going back on his pledge that Stansted would not be cross-subsidised from other airports belonging to the British Airports Authority. I am grateful for the limited time that I have been given to speak on the matter and urge my right hon. Friend to accept amendments in the way I have suggested.
  Mr. Deputy Speaker (Sir Paul Dean): Mr. Anthony Steen.
  Mr. Snape: On a point of order, Mr. Deputy Speaker. It is customary in such matters for agreement to be reached between the usual channels about what time the wind-up speeches start. If I had known that two hon. Members would be called after me, I would not have considerably truncated what I have to say on the matter. We know that there is little honour in the party opposite these days because we saw that—
  Mr. Deputy Speaker: I understand the hon. Gentleman's point. I am sure that he realises that the Chair has no knowledge of the usual channels. However, I know that the House decided at 10 o'clock to exempt the business.
  Mr. Loyden: On a point of order, Mr. Deputy Speaker. I represent a constitutency in which there is an airport. I have been on my feet on four occasions and have not been called, but hon. Members from the Conservative party have been called.
  11.53 pm
  Mr. Anthony Steen: The hon. Member for West Bromwich, East (Mr. Snape) is not the only one who has had to make a truncated speech, and he is not the only one who has waited through the evening to speak. I hope that I can make a short contribution to the debate.
  Mr. Loyden: On a point of order, Mr. Deputy Speaker. I have sought to catch your eye on at least five occasions. I represent a constituency in which there is an airport. I think that it is reasonable to argue that in those circumstances a Labour Member should have been called. I support the views of my hon. Friend the Member for West Bromwich, East (Mr. Snape) who takes exception to the fact that four or five Members have been called from the Conservative Benches and not one Labour Member has been called.
  Mr. Deputy Speaker: The hon. Gentleman has made two or three interventions, but I have not seen him rising.
  Mr. Steen: Because of the late hour, I propose to confine my remarks to two issues. The Bill, which I wholeheartedly support, has two principal omissions. The first is that restrictive practices exist in the British Airports Authority. The Bill is silent on those practices. They exist at both trade union and management level.
  I take provincial airports as an example. At East Midlands airport only one oil company provides oil for all the airlines that land at the airport. That does not lead to competition. Leeds is also a local authority airport., and there is only one caterer there permitted to put in bids. The same goes for Belfast, where Trusthouse Forte has a monopoly catering for all airlines that land at Belfast.
  I suggest to the Secretary of State that in the provincial airports and the BAA airports, such monopolies should not

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  be allowed and the Bill should spell that out. That is also true of ramp handling at Heathrow and airport servicing at Gatwick. I should declare an interest in one airline, British Midland, which flies out of Heathrow, and is prevented from doing ramp handling of its own.
  Secondly, the principal shortcoming in the Bill is in clauses 28 and 29, which provide centralised control for the Secretary of State in the shape of air transport limits, if and when they are reached. Those limits have not been reached. Rather than look at the scheduling committee, the Government should look at the national air traffic control services, which is riddled with bureaucracy and has a strong bias towards the military. It refuses to allow London traffic to grow as fast as it should. Yet the inspector at the terminal 4 inquiry permitted air transport limits at 240,000 and the Secretary of State allowed them to grow to 275,000. The CAA has now said that they can grow to 325,000. I believe there is more capacity, and this needs to be utilised.
  Therefore, I ask the Secretary of State not to penalise the airlines but to allow natural growth to occur. However, the NATCS should be investigated to see what spare capacity there is. We believe for this reason that as much as 30 per cent. of airport capacity is left at both Heathrow and Gatwick.
  This is clearly not the time to cover all the points that I would like to make. I was going to mention noise and other issues. The hon. Member for Liverpool, Garston (Mr. Loydon) is not the only one to feel aggrieved. Some of my hon. Friends feel equally aggrieved. Perhaps we can debate this issue in Committee.
  11.58 pm
  Mr. Eddie Loyden: I support the view expressed by hon. Members from the northern region, who argued that there has been a shift in the balance of airports towards the south, which is a serious and important economic factor. I say that in passing because I do not want to deal with that matter. The case has been well argued in the House by hon. Members representing Manchester and other constituencies.
  I wish to refer to the apparent disregard of regional airports in the Bill. The airport in my constituency provides important services, particularly to the Isle of Man and Ireland, but those services are totally disregarded by the Secretary of State in his consideration of regional airports. I should have thought that it was generally accepted that air traffic of that kind is part of modern life and that the development of airports should be encouraged wherever they are proved to be enhancing the industrial life of the area. The Secretary of State has left those airports in grave doubt about their future, as the concern being expressed by the local authorities shows.
  The regional airports are not only an important part of the development of internal air traffic throughout the United Kingdom, to which I hope that we all subscribe, but certain airports have special interests which must be considered. At present, the Isle of Man and Irish trade is mainly served by Liverpool Speke airport, but its future is now in doubt. When the Bill goes into Committee, proper consideration must be given to the regional airports and the service that they provide to the economy generally and to the regional economies particularly.
  762
  If the Bill deprives us of those services it will create a further downward spiral in areas such as Merseyside. The Secretary of State must not disregard the shift in the centre of gravity of the airports industry from the north and to the south and he must give proper consideration to the special interests of Liverpool when considering future airport development generally.
  12.2 am
  The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): The hon. Member for Aberdeen, North (Mr. Hughes) accused the Government of electioneering. Presumably he meant that the Bill would be very popular. I assume that that is why he lapsed into less than total coherence when my right hon. Friend the Secretary of State asked whether the Labour party would renationalise the BAA if it ever returned to office.
  As I suspect that the House wishes to reach a fairly rapid decision, I shall pick up just one or two of the major points raised in this informative and closely argued debate and leave the points of detail for consideration in the Standing Committee, as has been suggested.
  The hon. Member for Liverpool, Garston (Mr. Loyden) accused the Government — certainly he was accusing somebody—of not paying enough attention to regional airports. I suspect that no Government in the history of this country have done more for regional airports than we have, both in the traffic rights that we have obtained for airlines and in capital allocations to those airports. Therefore, I completely and utterly dismiss that charge straight away.
  Mr. Favell: What will happen to the regional airports will be what has happened before. Liverpool has been under the dead hand of municipal Socialism for years. That is why the airport has failed. The Bill will leave airports, such as Liverpool, to town hall incompetence. That danger also faces Manchester airport. Will my hon. Friend please reconsider allowing the privatisation of Manchester airport? The London airports will undoubtedly be a great success, but the regional airports must not be jeopardised by leaving them in the hands of municipal authorities.
  Mr. Spicer: Perhaps I might consider Manchester airport and its future immediately as it was a major consideration in the speeches of the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery). I understand that there was a failure to agree on the immediate future ownership of the airport at a meeting of the Greater Manchester district councils last Friday.
  The Bill is clear about the airport's future. As it has a turnover of more than £1 million, its local authority owners will be required to submit a scheme for approval to the Secretary of State by which the airport will become a plc. The uncertainties about the airport are to do with its immediate future. Manchester city council refused to meet the terms of Trafford district council that the airport should be turned into a plc, subject to conditions outlined in the Bill.
  The Government have already made their stance clear in a parliamentary answer that I gave my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) on Friday 6 December. We are dissatisfied with certain aspects of the scheme for the formation of a plc proposed

  763
  by Manchester city council. If the council secured the unanimous agreement of the district councils and went ahead with its scheme, we would not be able to prevent that, but we would reverse those parts of the city scheme of which we disapprove once we had the powers to do so after the Bill had been enacted.
  I am going into some detail as what I am saying is of general application to local authority airports. We dislike the idea that the airport company should look exclusively to Manchester city council for the supply of specialist services. The speech of my hon. Friend the Member for Manchester, Withington (Mr. Silvester) was also truncated, but I know that he is worried about this. We say that the airport should at least have the choice of looking elsewhere for its services.
  We also believe that, under the Manchester city council scheme, airport management would be less than adequately represented on the board of directors. We reject any condition imposing a tight restriction on the sale of shares in the airport to the private sector, and we dislike the proposal that would enable Manchester city council to strip the airport of all of its physical assets, which it would lease back to the airport company. We have made it quite clear that all of these proposals would undermine our objective of turning Manchester airport and other local authority-owned airports into businesses operating at arm's length from their owners.
  Under the Local Government Act 1985, if the districts of the Greater Manchester county council do not unanimously agree to the arrangements for the allocation of the county council's present interest and for the operation of the airport, the Secretary of State will consider tranferring the county council's interests to the passenger transport authority. As the new structure must be in place by 31 March and as orders giving effect to the new structure must be put before Parliament at least 21 days before 31 March, I see little practical alternative now to the PTA solution for Manchester airport, given that all of the parties—we must all agree on this at least—especially the management, must be given time to prepare themselves for the new structure.
  The other major theme of the debate has been the privatisation of BAA airports, and it has been mentioned by my hon. Friends the Members for Luton, South (Mr. Bright), for Saffron Walden (Mr. Haselhurst), for Meriden (Mr. Mills), for Cannock and Burntwood (Mr. Howarth), for Withington, and for Hertford and Stortford (Mr. Wells). The Government considered such a proposal seriously. We eventually came down against it for the reasons that I shall now give. Like my hon. Friend the Member for Derbyshire, West (Mr. Parris) and my hon. and learned Friend the Member for Feltham and Heston (Mr. Ground), we were unconvinced that the three London airports could be set in genuine competition with each other.
  I take the point made by my hon. Friend the Member for Withington. As Heathrow would be so overwhelmingly the preferred choice of airlines into the foreseeable future because of the benefits of interlining that it offers, the distribution of traffic between the airports would not be so much the product of competitive pressures as of regulations and traffic distribution policies that we would have to lay down.
  Secondly, we are concerned to maintain the rights of independent domestic airlines to serve Heathrow airport. This policy of providing competition among British
  764
  carriers would be much more difficult to sustain if Heathrow were privatised independently, when the overwhelming pressure on the airport owner would be to maximise the use by large international carriers. Put a different way, it is much easier for us to ensure that Heathrow does not discriminate against smaller carriers if we have given the airport owner sufficient scope and capacity elsewhere within his own system.
  Thirdly, with Heathrow and Gatwick already about full at peak times—I accept that it is only at peak times—and with a forecast annual increase in traffic of about 4 per cent. per year to 1995, we believe that there is an immediate need for extra capacity to be provided within the London system. We debated that at length last summer. A separately privatised Stansted might not provide sufficient capacity in time to meet the need. I readily acknowledge that this is one reason why those who do not wish to see the expansion of Stansted favour the separate privatisation of that airport.
  Fourthly, the problems of selling the airports separately would doubtless delay the process and benefits of privatisation. That argument will appeal to my hon. Friends if not to the Opposition.
  All this having been said, we very much agree with the views expressed by several of my hon. Friends that there should be firm safeguards against potential monopolistic abuse by the BAA company. With this in mind, we have built some quite specific controls into the Bill.
  For a start, each of the seven BAA airports will be formed into individual companies with separate and totally transparent accounts. Any transactions between the parent company and the subsidiaries will be completely open. Loans by the parent company to the subsidiaries wP11 be made at market rates of interest. Above all, the CAA will be given direct powers to prevent the imposition of predatory charges by any one of the airports.
  In direct answer to my hon. Friends who asked about cross subsidies, loans at market rates will be allowed arid perhaps even a measure of equity financing. Cross investment will also be allowed, but cross subsidy will not. Every five years the Monopolies and Mergers Commission will make a complete review of all the business activities of the airport, including commercial activities such as car parking and car hire concessions. If the commission finds any activity that it considers against the public interest, it must report these to the CAA. The CAA then has the duty under the Bill to impose conditions on the airport owner to remedy the practice. I hope that in some way that will meet the points raised by my hon. Friend the Member for Hayes and Harlington (Mr. Dicks).
  I listened carefully to the arguments of my hon. Friends the Members for Cannock and Burntwood and for Tayside, North (Mr. Walker). As they know, we have asked the CAA, after consulting the industry, to make recommendations to us about traffic distribution. I hope to receive shortly at least an indication of these recommendations.
  The Government have laid down certain conditions that they will wish to see maintained in any arrangements that are made for traffic distribution. The most significant of these are that competition between airlines must be maintained to the benefit of the user and that satisfactory access to Heathrow and Gatwick must be provided for domestic airlines. We must also maintain London's position as the world's most important centre of international air travel, with Heathrow remaining

  765
  London's main scheduled international airport and Gatwick its second hub. We must also avoid undue dislocation to the airlines using the airports.
  I am, of course, deeply conscious of the anxieties of the airlines about traffic rules. If we make new rules—and it is by no means inevitable that we shall—we shall have a very strong regard for the views of the airlines and, indeed, for the way in which existing voluntary arrangements have worked through the operation of the scheduling committee.
  If passed by the House, the Bill will unashamedly play its part in reversing the ratchet effect of Socialism which in the 1960s and 1970s some people had begun to believe represented the natural course of history. The energies, resources and discipline of the private sector will be harnessed directly to the development of the London and Scottish airport systems. The right of ownership will be spread to employees and to local residents.
  The local authority airports will be given the opportunity to follow in the footsteps of the BAA. At the very least, those airports will be given the commercial framework and greater autonomy, but also the greater level of accountability, which will flow from being turned into public limited companies. That has enabled us to give to local authority airports the right to reinvest their profits freely without requiring the permission of central Government.
  If the opportunity is grasped by the local authorities to sell a majority of the shares in their airports to the public, the development of the airports will be free from all capital controls. Subject to planning controls, they will be free to expand at a pace determined by Market demand. They will also be able to attract private resources to help them to do so.
  Ten of the 16 local authority airports which are relevant to the Bill make losses. The experience of Southend airport and, indeed, Southampton suggests that with private sector involvement, more robust marketing, more imaginative development and more determined cost control, many of them would stop making losses.
  Unashamedly in the Bill we are setting a new pace. We are giving the opportunity to the public, employees, local residents and travellers to participate directly in the ownership of one of Britain's most dynamic industries. It is a fact that Britain is at the crossroads of international travel. Heathrow and Gatwick are the first and fourth busiest international airports in the world, and Manchester is one of the most successful in Europe.
  The Bill accepts that the airport business no longer needs the protection and capital controls which exist in the public sector. We wish to liberate the energies and the talents of the industry to the economic benefit of those who participate in it and the nation as a whole.
  Amendment negatived.
  Question put, That the Bill be now read a Second time:
  The House divided: Ayes 257, Noes 180.

  Division No. 51]

  [12.17 am

  AYES

  Aitken, Jonathan

  Aspinwall, Jack

  Alexander, Richard

  Atkins, Rt Hon Sir H.

  Amess, David

  Atkins, Robert (South Ribble)

  Ancram, Michael

  Atkinson, David (B'm'th E)

  Arnold, Tom

  Baker, Nicholas (Dorset N)

  Ashby, David

  Baldry, Tony

  766

  Banks, Robert (Harrogate)

  Goodlad, Alastair

  Batiste, Spencer

  Gow, Ian

  Beaumont-Dark, Anthony

  Gower, Sir Raymond

  Bellingham, Henry

  Gregory, Conal

  Bendall, Vivian

  Griffiths, Peter (Portsm'th N)

  Biffen, Rt Hon John

  Grist, Ian

  Biggs-Davison, Sir John

  Ground, Patrick

  Blackburn, John

  Grylls, Michael

  Blaker, Rt Hon Sir Peter

  Gummer, Rt Hon John S

  Body, Sir Richard

  Hamilton, Neil (Tatton)

  Boscawen, Hon Robert

  Hampson, Dr Keith

  Bottomley, Peter

  Hanley, Jeremy

  Bottomley, Mrs Virginia

  Hannam, John

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

  Harris, David

  Bowden, Gerald (Dulwich)

  Harvey, Robert

  Boyson, Dr Rhodes

  Haselhurst, Alan

  Brandon-Bravo, Martin

  Hawkins, C. (High Peak)

  Bright, Graham

  Hawksley, Warren

  Brinton, Tim

  Hayes, J.

  Brooke, Hon Peter

  Hayhoe, Rt Hon Barney

  Brown, M. (Brigg & Cl'thpes)

  Hayward, Robert

  Browne, John

  Heddle, John

  Bruinvels, Peter

  Hickmet, Richard

  Buck, Sir Antony

  Hicks, Robert

  Budgen, Nick

  Higgins, Rt Hon Terence L.

  Bulmer, Esmond

  Hind, Kenneth

  Burt, Alistair

  Hirst, Michael

  Butler, Rt Hon Sir Adam

  Hogg, Hon Douglas (Gr'th'm)

  Butterfill, John

  Holland, Sir Philip (Gedling)

  Carlisle, John (Luton N)

  Holt, Richard

  Carlisle, Kenneth (Lincoln)

  Hordern, Sir Peter

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

  Howard, Michael

  Carttiss, Michael

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

  Cash, William

  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, Dr Michael (Rochford)

  Hunt, John (Ravensbourne)

  Clark, Sir W. (Croydon S)

  Hurd, Rt Hon Douglas

  Cockeram, Eric

  Jenkin, Rt Hon Patrick

  Colvin, Michael

  Jones, Gwilym (Cardiff N)

  Conway, Derek

  Jones, Robert (Herts W)

  Coombs, Simon

  Jopling, Rt Hon Michael

  Cope, John

  Kellett-Bowman, Mrs Elaine

  Couchman, James

  Kershaw, Sir Anthony

  Cranborne, Viscount

  Key, Robert

  Currie, Mrs Edwina

  King, Roger (B'ham N'field)

  Dickens, Geoffrey

  Knight, Greg (Derby N)

  Dicks, Terry

  Knowles, Michael

  Dorrell, Stephen

  Knox, David

  Douglas-Hamilton, Lord J.

  Lamont, Norman

  Dover, Den

  Lang, Ian

  Dunn, Robert

  Latham, Michael

  Durant, Tony

  Lawler, Geoffrey

  Dykes, Hugh

  Lee, John (Pendle)

  Edwards, Rt Hon N. (P'broke)

  Leigh, Edward (Gainsbor'gh)

  Emery, Sir Peter

  Lennox-Boyd, Hon Mark

  Evennett, David

  Lester, Jim

  Eyre, Sir Reginald

  Lilley, Peter

  Fairbairn, Nicholas

  Lloyd, Ian (Havant)

  Fallon, Michael

  Lord, Michael

  Farr, Sir John

  Lyell, Nicholas

  Favell, Anthony

  McCrindle, Robert

  Fenner, Mrs Peggy

  McCurley, Mrs Anna

  Fletcher, Alexander

  Major, John

  Fookes, Miss Janet

  Mather, Carol

  Forman, Nigel

  Maude, Hon Francis

  Forsyth, Michael (Stirling)

  Merchant, Piers

  Forth, Eric

  Mills, Iain (Meriden)

  Fowler, Rt Hon Norman

  Monro, Sir Hector

  Fox, Marcus

  Montgomery, Sir Fergus

  Franks, Cecil

  Morrison, Hon P. (Chester)

  Fraser, Peter (Angus East)

  Moynihan, Hon C.

  Freeman, Roger

  Neale, Gerrard

  Fry, Peter

  Neubert, Michael

  Gale, Roger

  Newton, Tony

  Galley, Roy

  Norris, Steven

  Gardiner, George (Reigate)

  Ottaway, Richard

  Garel-Jones, Tristan

  Page, Richard (Herts SW)

  767

  Parkinson, Rt Hon Cecil

  Temple-Morris, Peter

  Parris, Matthew

  Terlezki, Stefan

  Pattie, Geoffrey

  Thomas, Rt Hon Peter

  Pawsey, James

  Thompson, Donald (Calder V)

  Porter, Barry

  Thompson, Patrick (N'ich N)

  Rhodes James, Robert

  Thorne, Neil (Ilford S)

  Ridley, Rt Hon Nicholas

  Thornton, Malcolm

  Rifkind, Rt Hon Malcolm

  Thurnham, Peter

  Roberts, Wyn (Conwy)

  Townend, John (Bridlington)

  Robinson, Mark (N'port W)

  Townsend, Cyril D. (B'heath)

  Roe, Mrs Marion

  Tracey, Richard

  Rossi, Sir Hugh

  Trippier, David

  Rost, Peter

  Trotter, Neville

  Rumbold, Mrs Angela

  Twinn, Dr Ian

  Ryder, Richard

  van Straubenzee, Sir W.

  Sackville, Hon Thomas

  Viggers, Peter

  Sainsbury, Hon Timothy

  Waddington, David

  Sayeed, Jonathan

  Wakeham, Rt Hon John

  Shaw, Giles (Pudsey)

  Waldegrave, Hon William

  Shaw, Sir Michael (Scarb')

  Walden, George

  Shelton, William (Streatham)

  Walker, Bill (T'side N)

  Shepherd, Colin (Hereford)

  Waller, Gary

  Shersby, Michael

  Ward, John

  Silvester, Fred

  Wardle, C. (Bexhill)

  Sims, Roger

  Warren, Kenneth

  Skeet, Sir Trevor

  Watson, John

  Smith, Tim (Beaconsfield)

  Watts, John

  Soames, Hon Nicholas

  Wells, Bowen (Hertford)

  Speed, Keith

  Wheeler, John

  Speller, Tony

  Whitfield, John

  Spencer, Derek

  Whitney, Raymond

  Spicer, Jim (Dorset W)

  Wilkinson, John

  Spicer, Michael (S Worcs)

  Winterton, Mrs Ann

  Squire, Robin

  Winterton, Nicholas

  Stanley, Rt Hon John

  Wolfson, Mark

  Steen, Anthony

  Wood, Timothy

  Stern, Michael

  Woodcock, Michael

  Stevens, Lewis (Nuneaton)

  Yeo, Tim

  Stewart, Allan (Eastwood)

  Young, Sir George (Acton)

  Stewart, Andrew (Sherwood)

  Younger, Rt Hon George

  Stewart, Ian (Hertf'dshire N)

  Stradling Thomas, Sir John

  Tellers for the Ayes:

  Sumberg, David

  Mr. Archie Hamilton and

  Taylor, John (Solihull)

  Mr. Peter Lloyd.

  Taylor, Teddy (S'end E)

  NOES

  Adams, Allen (Paisley N)

  Clarke, Thomas

  Alton, David

  Clay, Robert

  Archer, Rt Hon Peter

  Clelland, David Gordon

  Ashton, Joe

  Clwyd, Mrs Ann

  Atkinson, N. (Tottenham)

  Cocks, Rt Hon M. (Bristol S.)

  Bagier, Gordon A. T.

  Cohen, Harry

  Banks, Tony (Newham NW)

  Conlan, Bernard

  Barnett, Guy

  Cook, Frank (Stockton North)

  Barron, Kevin

  Cook, Robin F. (Livingston)

  Beckett, Mrs Margaret

  Corbett, Robin

  Bell, Stuart

  Corbyn, Jeremy

  Benn, Rt Hon Tony

  Craigen, J. M.

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

  Crowther, Stan

  Bermingham, Gerald

  Cunliffe, Lawrence

  Blair, Anthony

  Cunningham, Dr John

  Boothroyd, Miss Betty

  Dalyell, Tam

  Boyes, Roland

  Davies, Rt Hon Denzil (L'lli)

  Bray, Dr Jeremy

  Davies, Ronald (Caerphilly)

  Brown, Gordon (D'f'mline E)

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

  Brown, Hugh D. (Provan)

  Deakins, Eric

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

  Dewar, Donald

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

  Dobson, Frank

  Brown, Ron (E'burgh, Leith)

  Dormand, Jack

  Bruce, Malcolm

  Douglas, Dick

  Buchan, Norman

  Dubs, Alfred

  Caborn, Richard

  Dunwoody, Hon Mrs G.

  Callaghan, Jim (Heyw'd & M)

  Eadie, Alex

  Campbell, Ian

  Eastham, Ken

  Campbell-Savours, Dale

  Evans, John (St. Helens N)

  Canavan, Dennis

  Fatchett, Derek

  Carlile, Alexander (Montg'y)

  Field, Frank (Birkenhead)

  Cartwright, John

  Fields, T. (L'pool Broad Gn)

  Clark, Dr David (S Shields)

  Fisher, Mark

  768

  Flannery, Martin

  Morris, Rt Hon A. (W'shawe)

  Foot, Rt Hon Michael

  Morris, Rt Hon J. (Aberavon)

  Forrester, John

  Oakes, Rt Hon Gordon

  Foster, Derek

  O'Brien, William

  Foulkes, George

  O'Neill, Martin

  George, Bruce

  Orme, Rt Hon Stanley

  Gilbert, Rt Hon Dr John

  Park, George

  Godman, Dr Norman

  Patchett, Terry

  Golding, John

  Pavitt, Laurie

  Gould, Bryan

  Pendry, Tom

  Hamilton, James (M'well N)

  Pike, Peter

  Harman, Ms Harriet

  Powell, Raymond (Ogmore)

  Harrison, Rt Hon Walter

  Prescott, John

  Hart, Rt Hon Dame Judith

  Radice, Giles

  Hattersley, Rt Hon Roy

  Randall, Stuart

  Heffer, Eric S.

  Redmond, Martin.

  Hogg, N. (C'nauld & Kilsyth)

  Rees, Rt Hon M. (Leeds S)

  Holland, Stuart (Vauxhall)

  Richardson, Ms Jo

  Home Robertson, John

  Roberts, Ernest (Hackney N)

  Hoyle, Douglas

  Robertson, George

  Hughes, Robert (Aberdeen N)

  Robinson, G. (Coventry NW)

  Hughes, Roy (Newport East)

  Rogers, Allan

  Hughes, Sean (Knowsley S)

  Rooker, J. W.

  John, Brynmor

  Ross, Ernest (Dundee W)

  Johnston, Sir Russell

  Rowlands, Ted

  Jones, Barry (Alyn & Deeside)

  Ryman, John

  Kaufman, Rt Hon Gerald

  Sedgemore, Brian

  Kennedy, Charles

  Sheerman, Barry

  Kilroy-Silk, Robert

  Sheldon, Rt Hon R.

  Kirkwood, Archy

  Shore, Rt Hon Peter

  Lambie, David

  Short, Ms Clare (Ladywood)

  Lamond, James

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

  Leadbitter, Ted

  Silkin, Rt Hon J.

  Leighton, Ronald

  Skinner, Dennis

  Lewis, Ron (Carlisle)

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

  Lewis, Terence (Worsley)

  Snape, Peter

  Litherland, Robert

  Soley, Clive

  Lloyd, Tony (Stretford)

  Spearing, Nigel

  Lofthouse, Geoffrey

  Steel, Rt Hon David

  Loyden, Edward

  Stott, Roger

  McCartney, Hugh

  Strang, Gavin

  McDonald, Dr Oonagh

  Straw, Jack

  McKay, Allen (Penistone)

  Thomas, Dr R. (Carmarthen)

  McKelvey, William

  Thompson, J. (Wansbeck)

  MacKenzie, Rt Hon Gregor

  Thorne, Stan (Preston)

  McNamara, Kevin

  Tinn, James

  McTaggart, Robert

  Wardell, Gareth (Gower)

  McWilliam, John

  Wareing, Robert

  Madden, Max

  Weetch, Ken

  Marek, Dr John

  Welsh, Michael

  Marshall, David (Shettleston)

  White, James

  Martin, Michael

  Williams, Rt Hon A.

  Maxton, John

  Winnick, David

  Maynard, Miss Joan

  Wrigglesworth, Ian

  Meacher, Michael

  Young, David (Bolton SE)

  Meadowcroft, Michael

  Michie, William

  Tellers for the Noes:

  Millan, Rt Hon Bruce

  Mr. Don Dixon and

  Mitchell, Austin (G't Grimsby)

  Mr. Frank Haynes.

  Question accordingly agreed to.
  Bill read a Second time and committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

  AIRPORTS BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Airports Bill, it is expedient to authorise—
  (1) the payment out of money provided by Parliament of the following, namely—

  (a) any expenses incurred by the Treasury or the Secretary of State in acquiring securities of the successor company (within the meaning of that Act) or rights to subscribe for any such securities;

  769

  (b) any administrative expenses incurred by the Secretary of State in consequence of the provisions of that Act;

  (c) any increase attributable to that Act in the sums payable out of money so provided under any other Act;

  (2) the extinguishment of the liabilities of the British Airports Authority to the Secretary of State (other than accrued liabilities) in respect of—

  (a) the Authority's commencing capital debt; and

  (b) loans to the Authority made, or having effect as if made, under section 6 of the Airports Authority Act 1975;

  (3) the payment of any sums into the Consolidated Fund.—[Mr. Lennox-Boyd.]

  DISABLED PERSONS (SERVICES, CONSULTATION AND REPRESENTATION) BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Disabled Persons (Services, Consultation and Representation) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to that Act in the sums payable out of money so provided under any other Act.—[Mr. Lennox-Boyd.]

  Erith Hospital
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]
  12.29 pm
  Mr. David Evennett: I am grateful for the opportunity to raise on this Adjournment debate a subject that concerns not only my constituents, but many of the constituents of my hon. Friend the Member for Bexleyheath (Mr. Townsend)—the future of Erith and district hospital. Although I do not wish to indulge, at this late hour, in a history lesson, extolling the good work that the hospital has done and the great service that it has given to the community in the past, at the outset I wish to place on record my determination to see the hospital developed and expanded, and to consider the recent events that have brought it to its present position.
  Erith and district hospital has been serving the community in my constituency since the day it was opened in 1924. It was built by public subscription and even today it continues to depend heavily on support from its league of friends who give funds, organise events and take a great interest in the hospital and its patients. It the early days it was known as the Erith cottage hospital, and, though the name has changed, the atmosphere is still that of a cottage hospital providing a much needed service to the local community.
  My constituency forms the northern part of the Bexley health district. Like many other outer London areas the public transport routes run from east to west, that is, into the centre of London. Unfortunately for my constituents, the sole district general hospital, Queen Mary's, lies in the south of the borough in Sidcup and is difficult to reach by bus. Queen Mary's is a first-class hospital, but it too is experiencing difficult days because of shortage of finance. Consequently, my constituents rely heavily on the Erith and district hospital and, to a lesser extent, on hospitals that are outside the health district but to the east or the west and therefore within easier reach. One of these is St. Nicholas hospital in Plumstead which my right hon. Friend the Minister for Health advised me recently will shortly be closed.
  For a district in the supposedly affluent south-east of the country, Bexley is severely under provisioned and underfunded. We have one district general hospital and one small local hospital where facilities are being constantly reduced, that is, the Erith and district hospital. The underprovision dates back to the break-up of the larger area health authorities, in our case Greenwich and Bexley area health authorities. Regrettably for my constituents, when the area authority was split up, the majority of hospitals and services were on the Greenwich side of the divide. This problem has become even greater now that district self-sufficiency is the order of the day. That is one of the reasons why the facilities of the Erith and district hospital are so important to me and to my constituents.
  Erith hospital has two wards open and a third ward, Hawkins ward, permanently closed. As my hon. Friend will agree, it is sad to see any ward closed. At present, minor surgery is provided together with some geriatric care, and altogether around 475 inpatients are cared for each year by the Erith and district hospital. In addition, 14 weekly outpatient clinics are held covering a wide range of specialties and caring for some 12,500 patients a year. There is also an excellent physiotherapy unit and a surgical

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  fitting facility that brings the total number of outpatients dealt with up to nearly 32,000 a year. There is a great deal of work to be done and the potential to do a lot more in this small hospital.
  The other facility of particular importance is the accident and emergency department. It can best be described as a walking wounded facility. It cannot and does not attempt to deal with ambulance cases. But it provides an important local service, particularly to local industry. It is, of course, in my constituency that the boroughs industry is concentrated and so its importance to industry will not be missed by my hon. Friend. Last year the accident and emergency department dealt with almost 7,000 cases.
  I have not quoted to my hon. Friend the number of patients cared for without a real purpose in mind. What concerns me is that, despite all the efforts of staff within both Erith and Queen Mary's hospitals, the number of patients on the district waiting list has increased in 18 months from 1,077 to 1,399, an increase which should concern us all, particularly in Bexley. This is at a time when the national trend is downward, a my right hon. Friend the Secretary of State and his colleagues have regularly informed the House.
  In my constituency we are endeavouring to replace the old and dying industries with new and dynamic ones in order to create jobs that are so vital in the economy today. We have the industrial sites in Thamesmead, Belvedere and Erith itself. We urge industry to locate in our area where there is a skilled work force, plenty of space, and, thanks to the efficiency of Bexley council, low rates. Yet despite all those advantages, and others such as a good location with motorways nearby, we are hampered by a lack of local hospital faciltiies for both industry and the families that boosting local industry brings.
  The value of Erith hospital is known to local people and to Bexley health authority alike. The chairman of our district health authority has long championed the cause of Erith hospital and is in the forefront of the campaign to improve services in the area, services which regrettably have been allowed to decline for decades. The decline of Erith and district hospital in the 1960s, 1970s and early 1980s has been allowed to go on for far too long. I want to arrest that decline and begin the long haul back to prosperity and better services in Erith. Erith hospital is important to our quest to renovate and revitalise our local area.
  Obviously there is a great need for the kind of facilities that only a large hospital, such as Queen Mary's, can provide and I am the first to acknowledge, having recently been round that hospital, the first-class facilities provided there in Sidcup. But there is also a need for better local health care at Erith hospital. At the moment it provides a good local service but a better service is needed by the local community. That the authority recognised, and it published proposals for the upgrading of Erith hospital to be effected in the mid to late 1980s.
  That scheme was widely welcomed locally as being positive, progressive and practical. The changes proposed would have cost just over £2 million and would have increased running costs by about £800,000 per annum. But for that sum, which is not a great deal of money, even for a badly underfunded district like Bexley, a whole host of new services would have been provided. Those would include new day surgery facilities; the reopening of Hawkins ward for the provision of general practitioner
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  beds, a facility much in demand in an area such as Erith town ward where the population is stable, aging and close knit; the establishment of a geriatric rehabilitation unit and an elderly, severely mentally impaired day care facility.
  Those changes would have provided much-needed facilities in the north of our district and made the district self-sufficient in terms of geriatric care — of great importance to us and, I believe, to the Government. But I regret to have to advise my hon. Friend this evening that in November last year, as a result of the district's cash crisis, those plans were put on ice, to be shelved until 1993. In my mind and in the minds of many local people associated with the hospital, both as staff and as patients, that means for ever.
  Regrettably, I also have to advise my hon. Friend the Minister that even abandoning the scheme has not solved the financial problems of the district and it is unlikely that the money will ever be found to carry out the development unless additional funds are forthcoming—from, I hope, the regional health authority.
  It seems that the bubble has burst and that my constituents, who live in an area with an increasing population and expanding industry, will not get the facilities that they want and which I believe that they need. It seemed almost beyond belief when the Bexley health authority said that this modest scheme had to be shelved. Yet the worst was still to come. A few weeks ago, Bexley health authority announced that it had overspent by a further £100,000 and that more savings were being sought. One proposal put forward by the authority was that all surgery and inpatient care at the Erith hospital should be terminated.
  At a meeting of the authority a few weeks ago, members refused to vote in favour of such a proposal. They believed — correctly, in my view — that ending such facilities at Erith hospital would mean an end to its viability and, therefore, bring about its closure by default. They clearly saw the true effect of the proposal and refused to implement a cut which would have been fatal to the future of Erith hospital. The decision has been referred to the regional health authority to obtain its agreement to an overspend. The decision of the regional authority is awaited.
  I wrote to Sir Peter Baldwin, the regional chairman, and was interested in his reply, as it contained an important admission. Sir Peter admitted that Bexley district health authority is underfunded, getting only 89 per cent. of its funding needs at present. We in Erith and Cray ford already knew that—we witness it at first hand—but it was nice to have it confirmed by the experts.
  How such a situation can occur in a part of greater London, an area where health care provision is supposedly so much better than elsewhere, is beyond my comprehension, yet I know that health care facilities in my constituency and in Bexley district health authority are poor and that unless drastic action is taken they will get a great deal worse. Despite that evidence of the problems, we are a RAWP-losing area—a fact which is hard to believe, let alone understand.
  I ask the Minister what can be done. I believe that the crisis faced by the Erith and district hospital and by Bexley health authority could have been avoided if a more realistic approach to funding the district had been taken by the South-East Thames regional health authority in the recent past.

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  Of course, the historic legacy of the area having been divided into districts has left Greenwich with twice as many hospitals as Bexley and, as surrounding districts have reduced services and, thus, limited out-district care, the demand in Bexley district has increased. Combined with the underfunding and underprovision, there is the reduction caused by RAWP. Urgent action is needed.
  The lack of funds and facilities has stretched the district to breaking point and the weakest link in the chain—the one that I fear will break—is Erith hospital. If facilities have to be cut at one of the two hospitals in Bexley, the main general hospital will be protected. That must be right, because it is the principal hospital in the district. However, that means that Erith hospital will have to suffer and that I cannot swallow.
  Unless action is taken, the much-needed local facilities at Erith will be lost for ever. Sacrificing services, as my hon. Friend will agree, has nothing to do with good health care. I hope that the chairman of the regional health authority and my hon. Friend will take note of that. A campaign to save an improved Erith hospital is being conducted. It is not partisan. It is a cry from the local community.
  I accept that this Government, who have my total support, have done much to aid the National Health Service. We have seen many improvements and much has been done for health care. But in Bexley the evidence seems to be to the contrary. We seem to be at the suffering end, through no fault of our own.
  I urge my hon. Friend to visit Bexley to see at first hand the area, its two hospitals and the many problems. A delegation from the community health council will shortly visit the Minister to discuss the problems. Such an opportunity to exchange views is always welcome. Action is required, not words.
  This is a cry from the heart from myself and my constituents. It comes particularly from the elderly and those who have elderly relatives in the area. We hear so much about the need for geriatric care. We have evidence to support that need and a scheme to meet it. We have an opportunity in Erith and district hospital to do much more beyond that. We now need support. I urge my hon. Friend to do whatever he can to assist and support us and so ensure a good future for Erith hospital.
  12.47 pm
  The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): I am grateful for the opportunity to discuss the problems outlined tonight. I pay tribute to the diligence with which my hon. Friend the Member for Erith and Crayford (Mr. Evennett) pursues this, as he does all issues within his constituency.
  First, I shall set the issue in the national context. By doing that I hope to set at rest some of the forebodings about the future of the Erith hospital. It is important to recognise, as my hon. Friend said, the Government's record nationally. It is important that the transfer of resources in real terms is felt throughout the country, not least in my hon. Friend's constituency.
  Since 1979 we have increased spending on the NHS more than any other Government. We are talking about 20 per cent. in real terms. The announcements for next year —1986–87—will represent an increase of 6·7 per cent.
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  or over 2 per cent. more than the currently forecast inflation. Within that will be the effects of the cost improvement programme which is planned to total £150 million during the year. Capital spending is also being increased each year. So the general national picture is good and belies the impression which is given in the House, by the media and by interests whose objectives are to paint unnecessarily black and bleak pictures of what is happening in the National Health Service.
  We are sadly familiar with the acronym RAWP—the policy of redistributing resources between different parts of the country. That policy has been followed for about 10 years. We are set to continue this policy. The aim is that regions that have historically received less than their fair share of resources or have rapidly growing populations will receive the largest increases.
  The decision on the 1986–87 allocation reaffirms our commitment to redistribute resources more fairly. Substantial progress has been made since the arrangements recommended by RAWP and, as regions move closer to their targets, it becomes increasingly important that the targets are a reasonably accurate measure of need. That is why, in December, my right hon. Friend the Secretary of State asked the NHS management board to review the operation of the RAWP formula, particularly the ways in which relative needs in different parts of the country are measured, taking account of such factors as the patterns of illness across the country and the special problems of the inner cities. We are certainly not insensitive to the impact of the RAWP formula on the London regions.
  The south-east Thames region is a RAWP loser, but that is not the case with the Bexley health district. The south-east Thames region was 13 per cent. above target when RAWP was introduced in 1977–78. In 1985–86, it is 5·6 per cent. above target. Long-term revenue plans have assumed annual reductions of just 0·3 per cent., which is equal to a reduction of 2·86 per cent. by 1993–94. Following last December's statement, the position of the four Thames regions and the special health authorities is marginally better than originally assumed. South-east Thames region will receive an increase of 5·8 per cent. compared with forecast inflation of 4·5 per cent.
  In addition, the Thames regions, with their higher unit costs, have been achieving higher levels of cost improvements than other regions. They are expected to continue to do so. I hope that my hon. Friend will recognise that we have understood the region's problems and that, within the natural constraints of general financial policy, which my hon. Friend supports, we are moving towards meeting them.
  I well understand the points that my hon. Friend made about the origins of the Bexley health authority and the issues it has created for Bexley. Bexley is a RAWP gainer. My hon. Friend referred to Sir Peter Baldwin, the chairman of the regional health authority, who suggested that Bexley's revenue funding is 89·6 per cent. of its RAWP target. It is planned to increase that to 95 per cent. by 1993–94. This means that there will be a small but steady gain in the district's revenue allocation until 1993–94.
  It is true that Bexley faces a somewhat difficult financial position caused by the overspending which has been gradually building up over the past three years without being tackled. This financial year it is projected to total £400,000 out of a total budget of £28 million. This is creating a challenge for the district—there can be no

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  doubt about that. The new district general manager, who was appointed in July 1985, has accepted a priority task to develop a financial strategy over the next three years with the aim of ensuring that any early measures to restrict spending do not further restrict the district's long-term RAWP manoeuvre. I hope that its achievements will solve the problem.
  We are looking for cost improvements. The region has proved to be one where significant cost improvements have been recorded. The district's cost improvement performance has been disappointing. In 1984–85 cost improvements amounted to 1·1 per cent. which is well below the regional performance of 1·88 per cent. The proposed district target for 1985–86 was less than 1 per cent. and the district has been asked by the region to consider raising that figure to the 1·5 per cent. average which is set for all the districts in the region.
  That is the financial background against which the current matter is proceeding. I recognise the history, which my hon. Friend explained, of the plans that were in hand for the Erith hospital. The decision rests with the district and then the regional health authority. It is not yet with the DHSS.
  At the authority's meeting on 15 January, the district general manager put forward a suggested package of measures for effecting savings, a major part of which was the closure of in-patient facilities at Erith. Those
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  suggestions were rejected by the authority and a decision was taken to continue to try to provide the present level of services at Queen Mary's and Erith hospitals.
  On 6 February, there is to be a further meeting. The district general manager and the treasurer will meet their regional counterparts to discuss the financial position in Bexley and explore ways in which regional bridging finance might be made available to meet revenue commitments to enable present services to continue.
  No further proposals for Erith hospital will be made or formulated until after that meeting, but the district general manager has been asked to present other revenue savings options at the next authority meeting.
  I hope that my hon. Friend recognises that there is some sensitivity about the future of Erith hospital. I take careful note of the support that he has shown and that Erith hospital clearly enjoys in the local community. I am certain that what my hon. Friend has said, and the support the hospital enjoys, will be noted by the district and regional health authorities. I assure him that, before any further decisions are taken, that point will be taken into account. Should any decisions come to the Department —we are a long way from that stage—we should also take careful note of what my hon. Friend has said.
  Question put and agreed to.
  Adjourned accordingly at two minutes to One o'clock.

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

China: Trade with United Kingdom
Lord Gridley: 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 are the possibilities of the United Kingdom increasing its share of China's rapidly expanding foreign trade.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, China offers great opportunities for British companies which have technology relevant to China's economic needs. As an example, the companies who came on my first mission to China in March 1985 have since then concluded business agreements worth almost £500 million; but to achieve these successes has taken years of patient negotiation. I am sure that further opportunities which were identified during my March and my subsequent December missions will lead to substantial additional business in due course.
Lord Gridley: My Lords, while thanking my noble friend the Minister for that Answer, may I ask him whether he has seen the report from The Times Peking correspondent dated 18th December 1985, which is complimentary to the achievements of his mission? However, with reference to a statement in that report, where it is agreed that experts should go out to China during the construction that will take place there, and in view of the excellent relations that exist between our country and China in various parts of the world of which I have personal knowledge—I was in the Far East in November—may I ask whether before our experts go there, it might be useful for them to have been apprised with some knowledge of the customs and culture of the Chinese people?
Lord Young of Graffham: My Lords, comments flattering to the activities of Ministers of this Government are sufficiently rare to always come to notice. I was well aware of that notice in The Times. I hope very much that the contribution made by technology of this country is something which is contributing towards the needs of China.
So far as I am aware, our people who go out to China are fully apprised of Chinese customs and culture; and indeed the increasing amount of business that we are doing there bears testimony to that.
Lord Rhodes: My Lords, would the Minister care to comment on what impact the newly appointed consul general in Shanghai has had? If the appointment has been a success, would he consider establishing another consul general in one of the large cities in Western China?
Lord Young of Graffham: My Lords, yes. The establishment of the consul general in Shanghai was paralleled by the establishment of a consul general of the Chinese Government in Manchester. Shanghai is an important area for trade and is doing great work. I hope that in the fullness of time we shall see other activities, and other consul generals, established in China. It is important to realise at the moment that we have perhaps 2 per cent. of China's foreign trade. I hope very much that one day we shall have 5 per cent.—which is the figure we had in the early 'seventies. I think that then the Foreign Office will no doubt consider expanding our representation in China.
Lord MacLehose of Beoch: My Lords, would the Minister comment on the role of the United Kingdom trade commission in Hong Kong in furthering this trade, particularly with the special economic zones of South China? Would the Minister say whether he is satisfied that the China section of their commission is sufficiently staffed to meet its expanding requirements?
Lord Young of Graffham: My Lords, there can be little doubt that in Hong Kong there exists a substantial body of people who know both the United Kingdom and China. Indeed, I have continually advised all those companies wishing to go to China that they should contemplate using Hong Kong as the gateway into China. In doing so, the activity of our trade commissioner in China is to be commended. It is—alas!—not for me to say whether the commission is adequately staffed; but for those who work there and those in this country who endeavour to trade there, I can say that up to now I have heard few complaints about the standard of service provided in Hong Kong and only causes for congratulation.
Lord Morris: My Lords, may I ask my noble friend whether he would be good enough to let his right honourable friends know how helpful, in the absence of a British consul general in Canton, the American consul general's office in Canton is to British interests?
Lord Young of Graffham: My Lords, I am afraid that I have no personal knowledge of the activities of the American consul general in Canton. In relative terms, Canton is not that far away from Hong Kong and many people from Hong Kong travel there and back continually. I hope that we shall indeed see a continuing expansion of our trade throughout all the 14 seaports of China which are now open to foreign trade, and through the many provinces of China.
Lord Bottomley: My Lords, is the noble Minister satisfied that we give as much time and attention to encouraging trade with China as we do in the case of Japan?
Lord Young of Graffham: My Lords, in fact I suspect that we have vested more time in China than we have in Japan. Indeed, it is not for the Government to pick those areas of the world in which we should spend our time; it is for British industry and British commerce. The Government's job is to facilitate their inquiries. That, I am told by those in the know, the Government

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have done; and I pay tribute to the activities of our embassy in Peking for that reason.
Lord Mellish: My Lords, is the Minister aware that in fact the Chinese, too, are showing great interest from their point of view in expanding trade with us? Is the Minister further aware that they intend taking over the whole of Poplar Dock—what was Poplar Dock in other days—and making it a trade centre for China, and that this is very much welcomed by those of us who have any idea of the importance of links with such a country?
Lord Young of Graffham: My Lords, what we have all noticed since the historic accord on the future of Hong Kong, which was signed not that long ago, is the increasingly strong links between the most populous nation in the world and the United Kingdom. They are links which I hope will bode well for the economies of both our countries. Certainly on behalf of the Government we are doing all we can to propagate them.
Lord Kennet: My Lords, did the Minister really mean that British businessmen who go to China are fully apprised of Chinese customs and culture? If so, how do they have time to be businessmen?
Lord Young of Graffham: My Lords, of course not. I just hope that British businessmen who go to China will make the effort, and I am sure they all do, to learn at least enough about the customs and the habits of our friends in China to ensure that they undertake successful business.
Lord Bruce of Donington: My Lords, is the noble Lord aware that we on this side of the House are appreciative of the more welcome future that he envisages for our trade with China, and will he also take on board our appreciation of his recent part in endeavouring to extend that trade? Will he give the House an assurance that Her Majesty's Government will, at all times, take steps to ensure that the aid given to our foreign competitors in China by their own governments is at least matched by our own.
Lord Young of Graffham: My Lords, I am indeed grateful for the expressions made by those opposite. So far as the second point is concerned, I am sure that the Government will do all that is necessary to ensure that we remain competitive. Indeed, as we see developments unfold over the months to come I am sure that even my friends opposite will be satisfied.
Lord Taylor of Blackburn: My Lords, can the Minister tell us how many British firms have been assisted in the way of soft loans in doing trade with China?
Lord Young of Graffham: My Lords, the facility for soft loans has been agreed with the Government of China. Very shortly, detailed discussions are to take place under which those who will benefit from this facility will be agreed by both governments. Until that happens, of course, no actual companies have benefited under soft loans agreements.

Smoking-related Diseases: BMA Paper
2.45 p.m.
Viscount Hanworth: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that the British Medical Association has published a paper estimating the cost to the National Health Service of diseases arising several decades ago said to have arisen from cigarette smoking, and whether they agree that the costs are unlikely to be very different from the costs of caring for patients suffering from other diseases, and that professional bodies such as the British Medical Association have special obligations to give a balanced picture.
Baroness Hooper: My Lords, there is no doubt that smoking is by far the greatest avoidable cause of illness and premature death, an issue of deep concern to the medical profession and to the Government alike. We welcome the publicity from The Big Kill, the report issued by the British Medical Association and the Health Education Council. By focusing attention on the scale of smoking-related deaths and disease and the health costs they incur, we believe that a proper emphasis has been given to the problem.
Viscount Hanworth: My Lords, I thank the noble Baroness for that reply. Would she not agree that the statistics, as they stand, are alarmist, misleading and unethical, certainly as coming from a body of the stature of the BMA? Would she further agree that their effect is not to do what we would all like to do, which is to stop young people taking up smoking, but to lead to the harassment of those who, despite knowing the facts, decide to continue to smoke?
Baroness Hooper: My Lords, the report estimates that over 200 people die every single day from a smoking-related cause. That is indeed an alarming figure, but not misleading. I am sure that the noble Viscount would agree that it is desirable that these facts are fully publicised so that people know the risks that they may run from smoking, and can make informed choices. This must be particularly so as far as the discouragement of young people from taking up smoking is concerned.
Lord Ennals: My Lords, will the noble Baroness accept my gratitude and, I am certain, that of noble Lords on all sides of the House, for the reply that she has given? In fairness to the BMA, would she confirm that there is no evidence at all that the document that she and I have read, and that the noble Viscount must also have read, provides inaccurate statistics? May I also ask whether she would dissociate the Government from the view expressed to the BMA by the noble Viscount, that early death saves the state from pensions and other consequences of longevity?
Baroness Hooper: My Lords, in reply to the first part of the noble Lord's question, I would say that certainly the report known as The Big Kill is supported by other reports, and particularly by the Royal College of

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Physicians' report entitled Health or Smoking? which in fact puts some of the figures at higher levels. So far as the assessment of the cost of smoking is concerned, health is of course not simply a question of economics and the Government's aim must be to reduce preventable illness and unnecessary loss of life.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that most of us think that the BMA has done a considerable public service by bringing out so vividly the danger of smoking, and that their report is not, as the noble Viscount opposite said, alarmist, but just alarming?
Baroness Hooper: My Lords, I agree.
Baroness Masham of Ilton: My Lords, may I ask the Minister whether she is aware that many other organisations, such as the Royal College of Surgeons, also are working hard on health protection? Only last Thursday they had a meeting to discuss methods of preventing spinal injuries. Would she not agree that all these initiatives need encouragement and should be welcomed, but that some, such as cigarette smoking, are easier to cope with than others?
Baroness Hooper: My Lords, preventive methods of health care are receiving a great deal of consideration. Certainly the Government's policy, which is a voluntary policy on smoking, is greatly aided by the maximum publicity on the risks involved.

Pound Coin
2.50 p.m.
Lord Gainford: 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 how many pound coins have been minted and how many of this total are Scottish and Welsh.
Lord Brabazon of Tara: My Lords, at 15th January 1986, 725 million £1 coins had been issued. Of these, 110 million featured a Scottish design and 178 million a Welsh design.
Lord Gainford: My Lords,I thank my noble friend for that Answer. As regards the nationalistic element in British currency, will the same number of £2 coins be issued, which it is rumoured will be circulated soon? Is there any truth in the rumour that such a coin will be circulated?
Lord Brabazon of Tara: My Lords, there is to be issued in commemoration of the Commonwealth Games to be held in Edinburgh this year a £2 coin which will be a commemorative piece. The Government have no intention of issuing a £2 coin for general circulation.
Lord Strabolgi: My Lords, is the noble Lord aware that many members of the public are finding it difficult to distinguish between the £1 coin and the 5p coin? Are the Government asking the relevant committee to consider redesigning the 5p coin? Are all these coins
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considered in relation to each other, or are they considered separately?
Lord Brabazon of Tara: My Lords, I think all coins are considered together when changes are made. So far as I know, there is no consideration to redesign the 5p coin at the moment. It should not be that easy to confuse it with the £1 coin because the £1 coin is probably nearly twice as thick as the 5p coin. Also, of course, it is of a different colour.
Lord Williams of Elvel: My Lords, can the noble Lord tell us whether there has been any change in the velocity of circulation as a result of the issuance of the new coins as opposed to the old £1 note, and whether any such change has had an effect on the Government's favourite monetary variable, Mo?
Lord Brabazon of Tara: My Lords, I am afraid I do not have an answer to the noble Lord's question. Whether or not such a figure is in fact kept I shall endeavour to find out, and perhaps, if I may, I will write to the noble Lord.
Lord Rodney: My Lords, is any consideration being given to the issuing of a £2 note?
Lord Brabazon of Tara: Not so far as I know at the moment, my Lords.
Baroness Faithfull: My Lords, is my noble friend aware that a number of voluntary organisations have lost money because people with a small income will put a £1 note in an envelope, or a £2 note, but they cannot put in coins? This is having, not a huge effect on voluntary subscriptions but quite a sizeable one.
Lord Brabazon of Tara: My Lords, I am aware that this could have caused a problem, but on the other side of the coin, if I may so put it, as far as street collections for charity are concerned, I think people are more likely to put a £1 coin into the box than they would have been to have put a £1 note in.

Council Dwellings: Right to Buy Exemptions
2.55 p.m.
Lord Dean of Beswick: 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 how many applications have been received from local authorities for exemption orders from the right to buy provisions for elderly persons' dwellings; how many orders have been granted; how many refused; and what criteria have been applied.
Lord Skelmersdale: My Lords, since the right to buy was introduced in 1980, the Government have received 3,075 applications for the exemption of elderly persons' dwellings. Of these, 281 have been granted, 1,695 have been refused and 178 are still under consideration. Following consultations with the local authority associations, the Institute of Housing, Age Concern and other interested bodies, a new

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circular (DoE 21/84) was issued on 15th August last, which sets out the criteria used by the Secretary of State when judging these matters. Since then, 32 per cent. of applications have been allowed, compared with only 11 per cent. under the old system.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that reply, but may I ask him whether he is aware that I have information from the Institute of Housing which shows that 80 per cent. of the applications that have been dealt with have been refused and 16 per cent. have been granted? It is taking five months for decisions to be made. Does the Minister consider, in view of the 80 per cent. refusal, that the professional officers misunderstood the criteria?
Lord Skelmersdale: My Lords, I am aware of the remarks of the Institute of Housing and of the article in a recent edition of Inside Housing which reflects them. But in his approach to these applications the Secretary of State is guided by the wording of paragraph 5 of Schedule 1 to the Housing Act 1980, as amended, which obliges him to look for evidence of particular suitability for the elderly and not just suitability as under the Housing Act 1980. This he is doing. It takes a considerable time, because detailed questions have to be answered. Under the new rules it should be very much easier for local authorities to make a proper application. As I said, the results are encouraging in that the success rate (if I may put it like that) for local authorities under the new rules is 32 per cent., whereas under the old rules it was 11 per cent.
Lord Dean of Beswick: But, my Lords, is it not a fact, even with the new figures, that the refusals are at an unacceptable high percentage having regard to what was said in this Chamber by Ministers at the Dispatch Box opposite when these amendments were going through the House and were voted upon? There is a strong feeling among the professional people involved in this matter that the Government have broken their word on it.
Lord Skelmersdale: No, my Lords, I do not accept that. I believe that the new appproach, which addresses the particular suitability of the dwelling for the elderly in its present state and the circumstances at the present letting, is much more rational and satisfactory. Obviously such tests could well be met by older dwellings if they have been brought up to present-day standards. This was proposed in another place and accepted in your Lordships' House without a Division. If I may, I shall quote the words of the noble Baroness, Lady Birk, at the time, who was leading for the Opposition in the Housing and Building Control Bill:
"The criteria are much more clearly spelled out, they are wider and there is less doubt".

Science and Technology in Local Government: Select Committee Report
2.57 p.m.
The Earl of Cranbrook The Earl of Cranbrook rose to move, That this House takes note of the report of the Select Committee
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on Science and Technology on Science and Technology in Local Government (1st Report, 1985–86, H.L. 11).
The noble Earl said: My Lords, in the six years of its existence there has been a conscious progress in the choice of topics for inquiry by your Lordships' Select Committee on Science and Technology. In 1981, the committee undertook a study of the provision and co-ordination of scientific advice to central government. An inquiry into the scientific and technical capacity of local government was a natural successor. This inquiry was undertaken mainly during the past Session. In context the term "local government" was taken to include all tiers of local authority; that is to say, the Scottish regions, the shire counties of England and Wales, the island councils, the Greater London Council and the metropolitan counties, the London boroughs, the City of London and districts of all kinds within the larger tiers.
The main focus of interest of the Select Committee in the course of this inquiry is stated in paragraphs 1.3 and 1.4 of the first volume of the two-volume report. These were, first, to evaluate the quality of science and technological support available to the local authorities in-house or through outside specialists; secondly, to discover how improvements and innovations arise within the system and, thirdly, to assess the capacity of local authorities to respond to new demands and new problems in the areas of science and technology.
For this inquiry the committee was strengthened by the co-option of additional members with special expertise in local government. I should like to express my thanks for their assistance to the noble Baronesses, Lady Faithfull and Lady Stedman, and to the noble Lord, Lord Irving of Dartford. We were advised by three specialists whom also I should like to thank on behalf of the Select Committee, Mr. L. Davey, Professor A. D. May, and Mr. K. M. Spencer, and, as always, we were ably serviced by the Clerks to this House, Mr. Hayter and Mr. Wells.
I should also like to express the gratitude of the committee to the many local authorities who responded to our invitation to submit evidence: to the local authority associations, to the associations of professional officers and other scientific and professional bodies who also provided us with evidence; commercial organisations; and individuals who submitted voluminous written evidence and in some cases assisted us at oral sessions.
On one occasion the committee met in April 1985, in Edinburgh—the first time, I believe, that the Science and Technology Committee had sat in Scotland. I am grateful to the Scottish Office for the use of the Crown Office buildings on that occasion. Mrs. Lynda Chalker, at that time Minister of State at the Department of Transport, kindly joined officials of the department in giving oral evidence to the committee in March.
Dealing with a subject so vast and with local authorities that are so numerous, the committee was forced to place a self-imposed limit on the scope of its review. The committee therefore chose for special but, I should emphasise, not exclusive, attention the following subjects: highways and traffic management; environmental health; information technology and, as an example of a novel function that had been imposed

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by recent legislation, the subject of the licensing and inspecting of zoos.
A questionnaire, which your Lordships will find in Volume I on pages 77 to 78, was sent out to 100 local authorities. This was a selected sample but it included the Greater London Council, all metropolitan counties, representative regions and shire counties, and districts of all kinds within these upper tier authorities. The responses of these 100 local authorities subjected to the questionnaire were reviewed and summarised by our specialist advisers and are reported on pages 79 to 125 of the first volume.
This report, in its first volume, consists of a short introduction followed by three main sections. Section 2 lists some of the many important requirements for science and technology among the local authorities and the nature of their provision. We called it the "Factual Background", and I hope that it will be useful as such. The third section represents the views of witnesses on the main matters of interest to the committee. The headings again illustrate the topics over which our inquiry ranged. These were strengths and weaknesses, organisation, funding, staff, research, innovation and the dissemination of information. Section 4 outlines the opinion of the committee. Finally, in Section 5, there is a summary of the main conclusions and a collation of the recommendations. I should like to emphasise that the recommendations there are not aimed only at Her Majesty's Government: we also make specific recommendations of which we feel it would be advantageous if the local authorities, the local authority associations and others connected with the local authorities would take note.
The factual background on pages 11 to 25 of Volume 1 emphasises the pervasiveness of science and technology throughout local government. Science and technology provide the underpinning of civilised existence as we expect it in this country. For instance, your Lordships' daily travels, whether you take a long or a short journey, will be immensely influenced by engineering and by road design, layout and construction, and the safe and unpolluting disposal of the various wastes that are engendered by our society involves sophisticated chemistry and engineering, and the protection of the consumer depends on a wide range of physical and chemical testings.
In respect of these fundamental services, the citizen of this United Kingdom, wherever he or she may reside, ought to be confident of an acceptable and dependable level of performance. The committee took notice of the long-standing traditions of diversity in local government, which were often stressed by witnesses. Clearly, there are areas of activity where local needs are different and local views on priorities legitimately diverge. However, there has to be a balance and this question is discussed in paragraph 1.5 and again in Chapter 4.3–4 and summarised in Chapter 5.2.
In discussing this balance, the committee also noticed that the work and the reports of the audit commission tend to press for national standards of uniformity in the area of the commission's concern which overlaps with the Select Committee's interests. The committee were concerned that excessive
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championing of diversity may impede inter-authority co-operation, may risk under-provision on the one hand and, on the other hand, unnecessary duplication of resources.
In the course of the inquiry, the Committee noticed that there is variation between like authorities in the fields of science and technology. There are differences between one authority and another, differences in the administrative structure of the services, differences in the development of capacity and in the provision of technical equipment, whether in-house or through consultants, and there are also striking differences in the perceived priorities between one authority and another.
This leads to the first recommendation which I should like to emphasise, Recommendation 5.4 on Page 66 of the first volume. The committee believe that central government are at present not as well-informed as they could be about the details of local authority science and technological services. Indeed, in evidence, published in Volume II, page 114, paragraph 2, the Department of the Environment positively disclaimed a direct role,
"in ensuring the adequacy of whatever scientific and technical services are provided by, or are available to, individual local authorities".
Yet, as the same evidence continues—and I paraphrase it—there is at the same time a duty upon each major department of state that is responsible for some aspect of the local authorities' functions to make judgments about the general adequacy of scientific and technical services. A large proportion of the funding of these services comes from national resources, as is appropriate, because, at the same time, in very many fields, the job of executing national policies falls upon local authorities.
New legislation, as we were told, can place unfamiliar demands on local authority services, and it is clear that any new facility that is thereby required ought sensibly to be in place before new laws come into force.
In order to promote efficiency and to limit friction between different administrative tiers of local authority government, it is vital that the central government should possess a detailed knowledge of local functions in their actual performance. At present manpower levels, I find it hard to see how this can be so. For instance, on the subject of contaminated land, which is a major problem in some of the old industrial towns of central and northern England, the Department of the Environment staff consists of one, plus supervision in London, and two to three at the Building Research Establishment, plus research effort elsewhere, as we were told. The committee doubts that the general obligation to understand and to be closely familiar with the functioning of science and technological services in local authorities can safely be jeopardised simply on the grounds of economy.
In the course of this inquiry, by concentrating on science and technology, we obtained, in my view, a new and useful insight into the local government functions and services. It appeared to members of the committee that this particular standpoint was unfamiliar to the local authority associations. The members of these associations, both councillors and officers, the committee believe, would benefit from a

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continuing review on similar lines to those that the committee pursued. The report therefore proposes in Section 4.20 on page 47, that these associations should themselves establish standing committees on science and technology.
The internal organisation of the local authority associations broadly mirrors that of member authorities, both in numbers and in terms of reference of the committees. This is one reason for the recommendation 5.5 that all local authorities should set up science sub-committees. However, the argument is deeper than this. The committee notes that familiarity with the powers and potential of science and technology, particularly in new and innovative procedures, is thinly spread among elected members and not necessarily universal among senior officers. There is no single route to innovation in local authority affairs. As a generalisation, it arises from a fruitful interaction between one or two officers and one or two elected members. This we saw in council after council.
There is a danger that potentially important initiatives can be stifled. A forum is needed to ensure that a committed group of members, plus officers, continually reviews the exisiting science and technology and explores potential improvements. The proposed sub-committee of the local authorities would provide this forum. The appropriate senior officers to attend this proposed sub-committee will depend upon the tier of local government. At the county regional level, it will be the public analyst plus surveyor or engineer; at the district level, it will be the chief environmental health officer and the chief technical officer.
In the opinion of the committee it is essential that there should be a specialist chemist's view obtainable at all times to the local authority administration. The committee's discussions with public analysts and visits to local authority-maintained laboratories and consultants' laboratories were rewarding and enlightening. The relative contribution of public and private sector public analysts is illustrated on page 18 in the table and in the maps on pages 19 to 20. The present situation is that in England and Wales about half the population are served by private laboratories and about half by publicly-maintained laboratories. In Scotland, the local authority-maintained sector dominates at about 5 to 1 in the number of laboratories and 10 to 1 in the number of people served.
Many authorities, including regions and counties and some London boroughs, are served by a laboratory which is located outside the administrative area of that authority—in some cases at a considerable distance. The committee believe that in addition to his statutory duties, the qualifications and experience of the public analyst can be of value to local government in a much wider field. In some authorities this role is recognised and the public analyst holds the post of scientific adviser; but this is not universal. The committee recommend that it should be so; that at least the scientific adviser should have direct access to the management team with the status of chief officer. The committee recognise that there may be contractual or logistical complications in cases where the public analyst is a private consultant or where his laboratory is located at a distance from the authority
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that he serves. I hope that my noble friend on the Front Bench will say that the Government are able to support the committee in encouraging the Association of Public Analysts, the Association of County Councils, the Association of Metropolitan Authorities and the Scottish Association of Local Authorities to enter into negotiations to achieve this objective.
There are numerous recommendations which are laid out in our report in some detail and summarised in Chapter 5. It would be otiose for me to repeat these at length but I feel that they are useful and valuable reading. Where laboratories are concerned, you will see that the committee feels that a degree of regionalisation is desirable. The load must be spread more widely than it is now and the evidence of the Government Chief Chemist and the Association of Public Analysts clearly pointed in this direction. Again, I would be very grateful for remarks from my noble friend on the Front Bench on the view of the Government in promoting further regionalisation of public analyst laboratories.
The problem of research needs of local authorities was one which was discussed at some length. The role of central government in promoting research for and on behalf of local authorities was somewhat contentious. If your Lordships read the evidence closely, you will see conflicting views. But it is clear to the committee that central government have a proxy role and that central government should make an effort to identify issues which are widely seen by the local authorities as being of common concern and should promote research in these fields. One of the major problems is that of funding and accountancy. In the GRE (grant related expenditure) calculations, there is no place for research or for science, as such. This seemed to the committee to create a difficult and anomalous situation and it is one which needs steps to remedy and to recognise more forcefully the value of research to local authorities.
Other areas of concern lie in the field of waste disposal, a subject that has been pursued by the Select Committee for a considerable time. In the view of the committee, there are grounds for anxiety over hazardous waste disposal in Scotland, as outlined in paragraph 4.71, and in Wales we understood at the time of the inquiry that there was review in hand. I should be very grateful to my noble friend if he is able to report to me the result of this review on the role of the district councils versus the county authorities on waste disposal in Wales.
The problem of noise is one which many people count high in the list of nuisances. There is the need for a review of standards for the assessment of environmental noise as a nuisance. Where the Zoo Act was concerned, the main technical problem lies in the provision of veterinarians with experience in the care of non-domestic animals. This is one which seems to be soluble in time; and, for the time being, the committee suggest that the list of veterinarians available to local authorities should be allowed to carry duplications with the Secretary of State's list.
I should like to emphasise on behalf of the committee what we say very firmly in paragraph 4.4 of our report:
"The overall level of expertise and dedication in local government is good and in some authorities it is excellent."

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There are weaknesses identified in Chapter 3 of the report but none of these calls for urgent remedies. On the other hand, I am covinced that the committee's recommendations are valuable, are worthwhile and, if implemented, will lead to a long-term improvement in the state of science and technology in the local authorities.
I must beg your Lordships' indulgence for a few moments to refer to the issue which I suppose I can encapsulate by calling it "the abolition issue". This is one which came up during the inquiry of the Select Committee and one which I cannot avoid; although I do not want to dwell on it for very long. We recognised very quickly the importance of the English metropolitan counties' and the Greater London Council's scientific services branch as a centre of excellence. The committee expressed their anxieties—I think fairly adequately—in the preliminary report and during the last Session's debates on the Bill as it progressed. But there are areas of concern that remain and I should like to ask my noble friend two specific questions. The first pertains to London. I understand that it has quite recently been decided that all—and I emphasise "all"—the staff of the scientific services branch of the Greater London Council will be transferred to the London residuary body on 1st April and that this will provide the opportunity for decisions about their long-term future. I wonder whether my noble friend can say if this is true or not?
The second question which concerns me deals with the issues of traffic. There is outstanding concern about the arrangements for reporting, analysing and surveying in a productive fashion the traffic accidents on a county-wide basis in the metropolitan counties (or some of them) and on a London-wide basis in London. I should be grateful to know from my noble friend what arrangements have been made to safeguard the existing system in these cases. It is a fat report. It contains a great deal of meat. I beg to move that this House should take note of it.
Moved, That this House takes note of the Report of the Select Committee on Science and Technology on Science and Technology in Local Government (1st Report, 1985–86, H.L. 11).—(The Earl of Cranbrook.)
3.19 p.m.
Baroness Lockwood: My Lords, I should like to thank the noble Earl, Lord Cranbrook, for the very comprehensive way in which he has introduced this report. As a member of the committee, I should also like to thank him for his chairmanship. I think that his lead in the way we approached this very wide and difficult subject was invaluable as were his penetrating analyses of some of the problems that we were facing.
As he indicated, this was a quite unique and novel approach to local government. As a result of our report and inquiry, a number of people (both elected and officers) began to think in quite a different way about the relevance of science and technology to local government services. Science and technology is really a subject which cuts across the present committee structure of local government, and all of us on the committee feel confident that if our recommendation
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(which was referred to by the noble Earl) that local authorities should set up a science and technology sub-committee of their Policy and Resources Committee, were accepted, it could only lead to the benefit of local government services.
We see such a sub-committee as being responsible for looking ahead and assessing the authorities' need for scientific and technical services as well as having the function of procuring science and technological advice and support across the board, including, as we say, those areas which do not come within the competence of an individual department. This can perhaps be more readily illustrated by the field of computer technology. All departments have a need of the use of computer services to some extent, and it is important that the full scope of computer technology is fully appreciated by all the departments and that it is not allowed to develop in an ad hoc way, perhaps at the whim of the head of one particular department, but to be co-ordinated for the sake of both efficiency and economy. Hence, in this particular area there is a further recommendation that each local authority which is developing computer or information technology capability should devise a strategy as a first step.
A number of the conclusions and recommendations which the committee came to really provide a broad strategy for local government in the whole area of science and technology. As the noble Earl has said, we concluded that we were impressed by the overall expertise in local government, which is good generally and, as he said, in some areas excellent. But we also felt that the scale of the operation was important, particularly in relation to both the quality of the service and to economy, and therefore that this should lead to an increase in co-operation and combined operations between authorities—in our view, preferably on a joint committee basis, where the expense involved in both capital expenditure and expensive equipment could be spread.
Our concern was that despite the value of local initiative and diversity, of which local government and the representatives of it reminded us from time to time with great pride, there is the problem of the conflict between local activity and the need to have a comprehensive service. We indicate in the report that we saw danger signals, particularly with the financial constraints which are now affecting local government and which inevitably are going to impinge on the scientific and technological services.
In paragraph 4.5 of the report we list a number of areas where this is happening. For instance, we fear the limitations on an authority's financial capability to innovate; financial restraint could push training and research even further down the list of priorities; we see that financial constraint could hinder the introduction or extension of information technology, and we feel that recruitment problems and greater immobility could result because of the difficulties of staff now transferring from one local government authority to another because local authorities are not recruiting new staff. So these financial constraints we saw as danger signals which could impede the further development of science and technology. Yet we had to add to that a further difficulty which we saw: that was the abolition issue which has been referred to already.

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If we pause for a moment and think of the interim report which this committee produced earlier last year, the committee saw the metropolitan counties and the GLC as centres of excellence and we referred to their impressive innovative spirit. In paragraph 35 of that interim report we also referred to the excellent scientific and technical staff the metropolitan counties and the GLC had recruited because they were able to offer a career prospect—not just to the employees of those particular authorities, but to the whole of local government.
In a further paragraph of that report we again refer to the contributions those larger authorities had made to initial training and to in-service re-training and up-grading. The demise of these authorities is going to leave an enormous gap in the whole area of science and technology which the individual authorities, the smaller authorities, are going to find difficult to fill. Therefore, we recommend, as a committee, and we say in paragraph 4.34, I think, that there should be no automatic presumption in favour of self-sufficiency within an individual authority. In other words, we are saying that in the current situation no individual authority should automatically feel it can provide all the services that it needs on its own.
Nevertheless, the committee also recognises, and again it says, that it does not believe that voluntary joint groupings will have the same dynamism as individual authorities. We are contrasting the metropolitan counties with the joint committees that we are recommending. That fact seems to be borne out by the tortuous discussions which have been taking place between the different metropolitan district councils pending the disappearance of the metropolitan counties. I understand that the position in West Yorkshire is better than in most metropolitan county areas. Certainly it is better than the position in South Yorkshire, where I understand that only one county-wide service is to survive the abolition, and that is urban traffic control. All the other services, including, I understand, accident and traffic data, to which the noble Earl referred, will be split between the different authorities, with all the problems that that is leaving for the staff involved.
In West Yorkshire, the position is rather better, although all the scientific and technological teams are by no means remaining intact. Highways, engineering and technical services are to be a single unit providing a county-wide service, but it is to be serviced by some 700 staff compared with a staff of 3,500 engaged under the metropolitan counties. Incidentally, the three top executives—the county engineer and his two deputies, one of whom is responsible for engineering services and the other for urban traffic control—will not be remaining with the unit. So, again, we have an indication of the way in which the teams are breaking up.
There are also a number of difficulties about maintaining an adequate joint committee system. Again using the example of West Yorkshire, I understand that the agreements range from one-year contracts to seven-year contracts. In the field of engineering and traffic control, the contract is for a period of five years. Again, this presents a degree of uncertainty to staff who might feel that they are secure for one, two, three or five years, but beyond that there
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is no security that the joint service will continue, which inevitably leads to problems affecting the timescale of projects as well as problems affecting the staff.
The Select Committee recommended local authorities who had been innovative in the field of science and techonology to patent their innovations; and, in the case of West Yorkshire, we saw three examples of innovation on which the authority had taken out a patent. These innovations are now under the control of a private company which the county set up because, first, under the local government law it was not itself entitled to sell its services beyond local government; and, secondly, it wanted to preserve some continuity in these fields. But the question arises: to whom is this private company now accountable? There is no county authority, there is no joint committee, and I understand that there is even some doubt as to whether it will be permissible for the company to continue. I should like to ask the Minister what he sees as the future for such organisations.
So those are very real problems which joint committees responsible for joint services within a county area are coming up against. The committee felt that in the absence of a more formal structure, which could, perhaps, deal more effectively with some of these problems, the impetus of the development of science and technology would bring local authorities closer together and cause them to co-operate more—to co-operate in the provision of technical services, to co-operate in the provision of research, to which the noble Earl has again referred, and to co-operate in the area of training, particularly mid-career training, which will be essential if local government is to continue to provide a worthwhile career. The whole thrust of the report has been not only to look at the achievements of local government in the field of science and technology, but to try to assess the way forward in the light of the difficulties that were experienced by the reorganisation of local government last year.
3.36 p.m.
Baroness Stedman: My Lords, perhaps I may join the noble Baroness, Lady Lockwood, in expressing my thanks to our chairman for the very able way in which he introduced our report today, and also for his very wise guidance throughout the many sittings of the committee. I certainly appreciated the opportunity given to me to serve on that committee and of meeting the witnesses and visiting local authorities. But as our chairman has said, the local authority associations did not appear to see it as their duty to disseminate information. That appeared to be left more to the officers' societies and, at the time, your Select Committee felt that the individual authorities and associations ought to be setting up these special sub-committees for science and technology, which have already been referred to.
I have been talking to some of my friends in the shire counties and I have to say that, on reflection, they feel that so many support service interests are involved that they would prefer something more like our Select Committee being set up—perhaps a non-executive review committee—which would carry out a full review, would report and would then disband, because they feel that this method would perhaps enable more

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radical ideas to be discussed, that some of the service committees might see it as rather less threatening and that the authorities themselves would not then be cluttered up with sub-committees on every topic that from time to time became of interest to the authority. But no doubt this is a contrary view to that of our committee which will be put to the appropriate places in due course.
Another point on which I should like to touch is that their authorities are finding that they are running up against limitations of the law in trying to exploit and sell their services. They believe that our recommendation needs a lot more consideration and a lot more work doing on it, because they feel that perhaps the law may have to be amended or even eased before they can do those things that we want. Cambridgeshire, my own county, is particularly concerned about this. The noble Baroness, Lady David, has much more up-to-date information on it than I have and I am sure will be giving it to the House this afternoon.
We also in the course of our deliberations interviewed LAMSAC, who reminded us of the change in their funding over the past two years. Only one-third of their income now comes from the local authorities and two-thirds of it comes from consultancy fees, from the sale of software, from organising seminars, and so on and they are taking a much more commercial approach towards the whole business. They believe that the different circumstances have not detracted from the level of service which they offer to the local authorities.
The ADC suggested that the service provided was good, but there appeared to be mixed views among the larger shire counties, and the metropolitan areas; and the Scottish local authority associations have withdrawn their financial support from LAMSAC. But it was the opinion of your committee that, in present circumstances, LAMSAC is now unable to meet its original aims of assisting local government clients. On the other hand, your committee wholeheartedly approved of the Department of Trade and Industry office automation experiment and we should like to see this extended by the Government who could seize the opportunity to speed up the introduction of information technology by demonstration projects and by pump priming for software development and for similar initiatives. As we talked to witnesses and went around the country, there were obvious problems with the compatibility of computer systems, though my impression was that most of the authorities were interested in establishing and extending information technology. But the training of users has been and is a problem in that local government salary scales cannot compete with industry and good, trained computer operators are in great demand.
I believe there is a move towards collaboration between authorities on the growth of powerful microcomputers and small main-frame computers together with more packaged software, which means that each authority can now consider having its own computing capability. But that makes it even more essential that they should have compatibility of equipment within a wider county area to enable the proper interchange of data. We did have a serious
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complaint from the Association of County Councils on the dissemination of information about research documents coming from Government departments. The Government decide which shall be published and then they are usually sent to Her Majesty's Stationery Office. If they in turn put too high a price tag on the publication, the authorities, these days, cannot afford to buy it. Mr. Robinson, who was one of the witnesses of the Association of County Councils, told us that once upon a time Government used to say, "This piece of research has been done. You will get a free copy and the rest you will buy". He went on to say rather wistfully that this does not happen so much now because there is a fairly strong edict that circulars are a waste of money. That is why the dissemination of research now goes to the county authorities via their officers' societies.
The evidence of the Royal Institute of British Architects also expressed a concern, which was shared by members of your committee, that the present and future levels of joint services and collaboration on research between local authorities should have been very pertinent to the consideration of the abolition of the metropolitan counties and the GLC. The RIBA and the members of your committee believe that the various units providing the scientific and technical services within the metropolitan counties and the GLC ought to have been retained intact. Your committee also believe that fragmentation and dispersal of the accumulated experience and data within these units would cause a loss which could take several decades to make good. We considered that it would be uneconomical and wasteful of both financial and manpower resources to allow these teams to disappear completely. The services could only be impaired and the effectiveness reduced if smaller units were established within every borough and district council.
The scientific advice units in the metropolitan counties and the GLC and the land survey and reclamation units are in the same position. Will the boroughs and districts really be able to carry out this work effectively as it has been done in the past, without the expertise and the financial support of the metropolitan counties? Under the Local Government Bill 1985 some of the service responsibilities passed to the residuary bodies which will be wound up in five years' time. Can I ask the Minister what provision has been made so far by those residuary bodies, and what is going to happen in five years' time? How are the residuary bodies dealing with the matters, and what can the Minister tell us about their proposals to date? As the noble Baroness has said, your committee were asked to prepare an interim report before the Local Government Bill was before the House and to make our considerations. We made recommendations but unfortunately this did not change the stance of the Government. In just nine weeks before abolition I believe that we have a right—if not a duty—to satisfy ourselves as to what looks like happening in those areas of our concern.
It seems to me that the Government are standing idly by and there is little knowledge of what the residuary bodies are doing to smooth the transition from the metropolitan authorities and the GLC to the boroughs. We argued for hours and days and even weeks on the 1985 Bill. We argued that it had been

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hastily conceived and that much of it would be impracticable. I believe that in many areas of science and technology—in the scientific and technical services, in a strategic role for transport, in highways and traffic control, in waste management and disposal, in land reclamation and countryside projects and in information and research—too little has been achieved, and in some fields I regret to say that I think the changeover is going to be quite chaotic and can only be to the detriment of the ratepayers. In all the uncertainty of what the future holds it is a tribute to the staff that their loyalty and morale has held up and I hope that this House will be among those who will recognise it.
I want to look at the fate of these specialist teams of the kind which interested your Select Committee, and I want to draw the attention of the Minister and the House to the very worrying state of affairs. I am going to use illustrations from the metropolitan counties, and from Greater Manchester in particular since that seems, like West Yorkshire, to be one of the areas that have been trying to make arrangements for their specialist teams. But even the Greater Manchester arrangements fall lamentably short of what is needed to maintain the forward looking and innovative work that they have been doing. Consider the scientific and technological services allied to countryside planning, to the reclamation of derelict land, to research and information, to mineral extraction and to waste disposal.
I have already tabled a Question for Written Answer on how the Secretary of State sees Section 7(2) of the 1985 Act progressing and asking when we may expect that report, so I shall not enlarge on that this afternoon. The countryside units in Greater Manchester have used to the full the scientific services that have been available to them. Now that work passes to the districts, and in this, as with obligations, co-operation to one lead district is not working. I am not "knocking" the districts for taking a parsimonious view of their future responsibilities because they are concerned about the future revenue and capital funding of these services and the financial consequences to them. The rate support grant has yet again demonstrated that the grant system is a lottery with violent and arbitrary changes in grant for the district councils. Your committee commented that resources are short and are unlikely to improve. The Association of District Councils believes that funding in the field of research and development is going to be even more difficult unless some government can devise a simpler and more stable distribution for the future.
There is also a growing realisation that the reclamation of derelict land and the promoting of countryside projects will now have to take their place in the queue for resources for housing, social services, and so on. The relevant scientific and technical expertise of the metropolitan counties' countryside projects is going to be lost without positive co-operation on the part of the district councils which now inherit those functions. In all the metropolitan counties, if the districts do not take over this work, we are going to lose the expertise and the experience that has been put together during the past decade.
Your committee were satisfied, from their visits to West Yorkshire and to Greater Manchester, that there
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was a case for the continuation of specialist teams on land reclamation and similar projects within the metropolitan areas. We were all impressed by the very substantial inroads that had been made into the wastelands left by the coal mining and industrial decline, but at this moment it looks as if that work is going to be a total casualty. In Greater Manchester the districts have dispensed with the services of the joint reclamation team, resulting in a major dislocation to their programme of work and a loss of the wider perspective of the area of substantial expertise and experience. In the West Midlands, South Yorkshire and Mersyside there were no proposals to keep the skill teams together. It is sad to see major areas of important work collapsing and irreplaceable expertise being just pushed aside.
In our report we considered the scale of services to be provided. We looked at research and information and we agreed (I quote from paragraph 4.23) that:
"The scale of services has to be appropriate to present-day needs… The increasing complexity and range of science and technology make large scale operations more necessary".
Section 88 of the 1985 Act allows metropolitan district councils to do that if two-thirds of them agree that the funding can come from all the districts in the area according to population. That could lead to research and information units being maintained. Alas! it is not so. In Greater Manchester the co-ordinating committee will maintain such a unit but at less than half the size of the present metropolitan team, and therefore they are unable to maintain the current level of service.
Information could continue to be collected for formulation of policy, not only by district councils but also for central Government and other governmental and private sector bodies. But the proposed unit will be split away from the formulation of policy and will have nothing to do with advising on policy and with the best way to deliver the services that local government needs. Information technology will be separated from those who are reliant and dependent upon it. That runs totally counter to the advice given by your Lordships' committee.
Research and information extends not only to town planning but also to transport modelling, to urban traffic control, to highway design, to refuse disposal, and so on. In Greater Manchester there now seems little chance that those extremely desirable connections will be maintained. That means that instead there will be collection of inconsistent data, potential duplication of work, and above all a paucity of policy development. That must be so, with only a partial view of the wider issues of the area.
In the other metropolitan areas the situation appears even worse, with Merseyside hoping that the residuary body will do something about it. There is nothing happening in South Yorkshire. Possibly there will be a very small Tyne and Wear team based on Newcastle, while in the West Midlands there may be a planning and transport data team under Solihull Council but that team will be forbidden to stray into policy; indeed, its very existence depends on the current rate support grant allocation.
The same problems apply to minerals and waste planning. The wide markets for mineral and the wide

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catchments for waste disposal sites demand more than a local approach. Greater Manchester has made modest progress with a small unit being maintained centrally under Salford Council, but there is worry in Greater Manchester about the adoption of the minerals local plan for the next decade.
A very great deal of technical work has gone into that plan, which will be on deposit by the end of March. This morning, I asked the Minister's office if it might be possible for him to tell the House at the end of this debate—or if not, by correspondence later—that that work will not be wasted and that the plan is likely to be approved very soon.
In the other metropolitan counties the outlook is bleak. In South Yorkshire there is a joint committee but no joint team to advise it. In West Yorkshire the picture looks equally depressing. There are no joint arrangements within Merseyside. There is just a glimmer of hope in the West Midlands that a limited role might be adopted by Walsall. The emerging picture overall is one of indecision, of late decision, or of a determination to go it alone—thus fragmenting the whole effectiveness of that very vital work.
Your Lordships' Select Committee was rightly worried about the short period available for transferring the vital services from the metropolitan counties to the districts. With the transfer only nine weeks away, the emerging picture is one of chaos, of hastily-made and ill-considered decisions, and of a complete inability to sort matters out in the time that is now left. Local councils are fearful of the consequences of making specialised arrangements. The rate support grant formula has a negative influence on the retention and development of specialised work, and the financial restraints on local government are biting hard.
Lord Sandford: My Lords, if I may interrupt the noble Baroness while she is speaking on the subject of the rate support grant, it is not clear to me from reading the report whether or not the committee was aware, when it reported, of the impending change from target to grant related expenditure assessment as the main means of controlling local government expenditure. Can the noble Baroness say what the committee's view was of that matter while it was deliberating?
Baroness Stedman: My Lords, so far as I know, there was no discussion on the rate support grant, and the committee did not know of the proposed changes.
The very fear of those financial consequences is bound to lead to a restrictive view of the work to be adopted and a shying away from any innovative or non-statutory task. In our report, we comment that innovation is not cheap and that the present circumstances were likely to stifle it altogether. I see a very real danger that collective decisions on the future of the services will be dealt with in the same way as current decisions on how to run the service after 1st April—which seems to be a case of reducing everything to the lowest common denominator, entailing a complete lack of vision or perspective, and an inability to seize the opportunities that present themselves.
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If we are to have policies then they must be well grounded, and the information collected should and must be relevant to the needs of the policymakers. Yet we find ourselves on the brink of losing so much expertise and experience, leading to a very real cut in the level of service in terms of both quality and quantity. We cannot ignore value for money in the quality and quantity of service provided. Your Lordships' committee recognised that and recommended an extension of assessment methods to functions that make major demands on scientific services.
In the current situation it seems to me that the residuary bodies should not be taking such a passive role as they appear to be. I understand that some have not yet appointed any staff although there are only nine weeks to go. In Merseyside, where the residuary body did start to show an interest and became involved, the chairman was removed by the Secretary of State. I could be uncharitable and speculate on whether the activity and the sacking are linked. There must be a moral there somewhere, but I have not sorted it out.
I commend the report of the Select Committee as a fine and serious in-depth study of some of the problems in local government scientific and technological services across a very wide spectrum. If they are given the right help, encouragement and leadership from central government then our local authorities could have the capacity to react to future demands. I will conclude by quoting from our earlier interim report:
"Economic, efficient and forward looking services demand excellence, integration and continuity. The existing services should be improved, not by being dismembered but by being encouraged to progress. Centres of excellence are slow to develop but easy to destroy".
3.58 p.m.
The Earl of HalsburyMy Lords, in addressing your Lordships' House this afternoon I must first thank the noble Earl, Lord Cranbrook, and his colleagues—many of whom are taking part in this debate—for the hard work and integrity that they have put into writing the report. Secondly, I thank the noble Earl himself for bringing the report to our attention this afternoon and for giving me, among others, an opportunity to comment upon its conclusions. Thirdly, I must declare an interest. It is not a commercial or financial interest but a professional interest in this matter, as a member of the Royal Society of Chemistry's parliamentary and legal committee.
I will say just a few words about the Royal Society of Chemistry. When I was a young man there were a number of learned societies—the Chemical Society, the Faraday Society, and so on—that were simply concerned with the study of the subject and with publishing journals in which new results were circulated to the world at large. There was also a professional body—the Institute of Chemistry—which was not a learned society but a professional institution concerned with educational standards and professional behaviour.
I served on the council of that institute for some time, having registered as a student in it 52 years ago, which is quite a long time in a professional career. It set the standards. In those days you could not be

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considered as having the credentials for a public analyst, for example, and to carry out his functions unless you were the possessor of an Institute of Chemistry diploma in chemistry, food and drugs. Of course, everything evolves with time and the credentials are perhaps not exactly the same as they were when I was young.
Some years ago all these bodies came together to form one body—the Royal Society of Chemistry—so the chemical profession now follows the standard pattern of the engineering institutions—the Institution of Mechanical Engineers, the civil engineers, nuclear engineers, all of them—which from time immemorial have done the combined work of a learned society and a professional institution. I used to sit on the public relations committee of the Chemical Society, and I am now on the parliamentary and legal committee of the Royal Society of Chemistry.
The question of whether I speak in my own name or as an advocate for their views is academic because we speak with one voice certainly in welcoming this report, and also in regretting that the local authority scientific units have been thrust into the political arena. Politics—with which, on these Cross-Benches, I am not concerned—tends to be preoccupied, in part at least, with the relations between employers and employees; with capital and labour, and so on; how society is organised in this respect as opposed to how it ought to be organised, and similar matters. However, professional men do not quite see it that way. As a professional chemist I think of my relationship as that of consultant to client, just as a doctor would think of his relationship to his patient as a relationship between consultant and client, and as an advocate in the courts would think of himself as an advocate in relation to his client.
It is wrong to think of professional men as superior kinds of being. They are not. They are simply different kinds of being. They ought not to be flying around between Front Benches armed with battledores and being treated as shuttlecocks. Therefore, I first plead that local authority science must be given a settled environment. Without it, it cannot work adequately. We must not be made the shuttlecocks in between the rival battledores. Scientists, like other people, need a reasonable allowance of security of employment and funding in order to carry out their work. From this point of view we all welcome the news which came through last Friday that the London residuary body is to take over the GLC scientific services for a period. This will give people time to make arrangements with successor authorities. However, in regarding it as a deliverance and a breathing space, I have to add that it is not yet, from the professional man's point of view, a victory. I ask the Government whether there is any more information available about the future than was released on Friday.
Corresponding to that we are concerned, and I am concerned, that the future of the Merseyside county analyst is still uncertain. I understand that an arrangement had been made which fell through. It is very unfortunate that this should turn the future of local authority science into a highly political issue, which none of us wants.
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Centralisation gives the advantages of economies of scale, of opportunities for inter-disciplinary work and better career prospects for the staff. Decentralisation can lead to under-funding, inadequate resources and isolation and elimination of the career structure offered by a local authority service to the public. Scientists in local authority employment want to think of themselves as public servants, giving a public service. Local authority science is an area in which science comes very close to the public, and let that always be so. It is important that scientists in this area should be made aware of the public interest, because that is how they themselves are regarded and look on it with pride.
On the question of scale, and its economies, everything has an optimum size. Some scientific experiments entail very expensive apparatus indeed. Unless it is going to be used regularly its installation would represent an uneconomic investment. There is no reason why consultants who possess these expensive facilities should not be engaged in order to render an economic service to local government. For example, there may be electro microscopes installed in universities where the professor of physics or chemistry who is in charge of such a faculty could add his services to those provided as a consultant, in return for a suitable fee.
I remember, back in my own career as a chemist, in one branch of chemistry I had the immeasurable support of colleagues in other branches of chemistry to that in which I was working. I was in a steelworks and my terms of reference were to try and produce an alloy steel which would stand up inside a gas turbine for not less than one hour at 900 degrees centigrade. That was a far higher temperature than was contemplated in those days. I had the services, all run by equally well-qualified colleagues, of a melting shop, where new ingots could be made; a forge where they could be forged; heat treatment shops where I could get them heat treated; machine shops where I could machine test pieces; the creep laboratory was under m} own control; the chemical laboratory would extract the intermetallics from the matrix in which they were embedded to give them their creep-resistant properties; and the metallographic laboratory which examined the internal structure of ingots with the assistance of the X-ray department.
That is how one works professionally inside an environment with the support of one's colleagues. It is right that local government science should be organised in such a way that scientists have the support of their colleagues. I regret that it was necessary in the first instance to compile this report, because of the crisis which led to it, but it is an excellent report and the thanks of this House and of my profession are due to the noble Earl, Lord Cranbrook, and his colleagues for the work they have done.
4.7 p.m.
The Earl of Bessborough: My Lords, I join with the noble Earl, Lord Halsbury, in thanking my noble friend Lord Cranbrook on his most comprehensive report: 125 pages in the first volume and 510 pages of oral and written evidence, in close print, in the second. It is certainly an impressive and stimulating study for, as we all know, local government touches directly the

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lives of everyone in many different ways. Indeed, a very wide variety of applied science and technology makes vital contributions to the provision of local services. In my view, the tradition in this country of taking independent initiatives at the forefront of technological advance must be maintained.
I congratulate my noble friend and the committee for identifying key issues. My congratulations can be even warmer because I was not myself a member of my noble friend's sub-committee; therefore, I am not in any sense partially congratulating myself! However, I was a member for several years of the main Select Committee and of a number of its other sub-committees as well as of European Community sub-committees of the same kind; including, for example, that on information technology which is now an important service in local government.
The key issues identified in the report are, as I see it, the need to ensure maintenance of high calibre staff specialist services; the need for each authority to keep constantly under review its application of science and technology; the importance of local authorities collaborating to secure greater efficiency, and the essential role of organisations representing local government as a whole.
Many important recommendations are made in this very valuable report covering, as my noble friend has said, highways and traffic management, different aspects of environmental health, hazardous waste disposal, the licensing and inspection of zoos, information technology and computing services, as well as research, innovation and the dissemination of information.
However, I must confess to a certain sense of unease—not too deep an unease, but a certain sense of unease—at the thrust of some suggestions in the report. While one can readily appreciate—and I personally would warmly support—the eminently reasonable motives lying behind recommendations such as the creation of special sub-committees and increased involvement by government departments in this particular area of local government, I only wonder whether we should not think very carefully about the general implications of such developments. I think we need to be cautious about too ready assumptions that central subvention and institutional tinkering are appropriate answers in a field where local initiatives and rapid adaptability must remain essential requirements.
I hope my noble friend Lord Skelmersdale will confirm that our main concern must be that the increased role proposed for central government will undoubtedly increase the number of civil servants and lead to increased form-filling, and indeed annoy local government which does not like or readily accept central government departments meddling in its work.
I think that the most important point to recognise is that authorities do provide efficient, appropriate and cost-efficient services for their local communities. It is they who know how to do that best, and it is they who should be accountable locally for their decisions. In my view, and I feel it would be the view of my noble friend Lord Skelmersdale, it could well be counter-
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productive to increase central government scrutiny and intervention.
Lord Tordoff: My Lords, if the noble Earl would allow me to intervene, I certainly feel great sympathy with what he is saying, but I am not quite sure at which particular part of the report he is pointing his finger when he talks about greater central government intervention. It seems to me that it does not really point in that direction very much.
The Earl of Bessborough: My Lords, as I see it, it is fairly precise. If one looks at particular passages, i.e., paragraphs 4(5) to (7), there is certainly there a reference to the alleged fall of direct concern by central government. At any rate, as regards those danger signals which were referred to by the noble Baronesses, Lady Lockwood and Lady Stedman, and indeed to a certain extent by the noble Earl, Lord Halsbury, that is to say matters concerning financial constraints, the abolition of the GLC and the metropolitan counties, and the alleged fall of direct concern by central government, I think I should recall that of course the Government's abolition policy was well known before the Select Committee settled on this question. The Government emphasised throughout the abolition debates that their objective was that decisions should devolve to successors, and they set up a framework for them to do this either individually or collectively, wherever necessary through co-ordinating committees in London and in each of the metropolitan counties. Indeed, it was in your Lordships' House that an amendment was agreed to strengthen the role of the residuary bodies.
I believe that successors have generally given very serious consideration to the specialist services run by the county councils, and I am personally satisfied—certainly it is the case in my part of the country—that after initial difficulties the co-ordinating committees have been effective in carrying out their responsibilities.
Concerning the loss of career prospects in local government, I cannot accept that they will be seriously affected by abolition. Local government services are there to meet the needs of the authority and the ratepayers. It is for them to decide their staffing according to those needs. There are, of course, clear links with the future of county-wide facilities, and I understand that a number of metroplitan county laboratories are being retained on a county-wide basis. If there are economies of scale then these should be preserved, but in my view the decision on retention or otherwise must be for the successor bodies.
As regards the future of the GLC's scientific branch, I understand that the London Co-ordinating Committee at its meeting last December agreed that a central scientific unit should be retained under the wing of the London Fire and Civil Defence Authority. I hope that my noble friend Lord Skelmersdale can confirm this.
In regard to government funding after abolition, I believe that the Government have stuck to their undertaking that successor authorities receive all—and like my noble friend Lord Cranbrook, I emphasise

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"all"—the block grant that the abolition authorities would have received had they continued to exist and spent at the same level. Successors, therefore, are in no worse a position than the abolition authorities to support scientific and specialist services, and indeed the rate support grant settlement provides for a significant flow of grant into London.
Finally, in so far as staffing is concerned, I am sure that my noble friend will agree that it is a matter for successors to decide whether to take on all the existing staff of any of the specialist services which are being retained. Perhaps my noble friend can amplify this point.
Whatever implied criticism may have been contained in my few remarks, I should again like to congratulate most warmly my noble friend Lord Cranbrook and his committee on a tremendously useful and valuable report and recommendations, which draw attention to local government services which do not perhaps always receive the recognition and honour which is their due.
In the current issue of Link- Up, the magazine of the British Association for the Advancement of Science, the association's vice-president and general secretary, Professor Douglas Everett, a Fellow of the Royal Society, draws attention to the importance of enhancing the public's awareness of the part that science and technology play in improving the quality of life in the whole community. As a recent report by the Royal Society stressed:
"everybody needs some understanding of science, its accomplishments and its limitations."
The Select Committee's report is certainly a most important contribution to increasing this public understanding.
4.19 p.m.
Baroness Fisher of Rednal: My Lords, I also pay tribute to the noble Earl, Lord Cranbrook, and the team that he had round him. He has produced a report of vital importance not only to technology and science but also to the workings of local government. The Select Committee report shows that local government services in science and technology are good and in some cases excellent. That has also been said by noble Lords who have spoken this afternoon, so I hope that the Minister will add his tribute to the work that the local authorities have done when he replies to the debate. As the noble Earl, Lord Bessborough, said, local authorities do not always get credit for the work that they do, and this is an occasion when the Government should add their tribute to them.
I agree with other noble Lords who have spoken that the tight financial targets within which local authorities will have to operate in the future may slacken the pace of innovation. We must recognise clearly that science and technology have constantly to adopt innovation. That is what they are all about: progress through innovation. With the formation of the GLC and metropolitan counties, those young authorities quickly moved into the new technologies. Many of them have created leading centres of excellence. Unfortunately in April they are all to be
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dissipated. As the noble Earl, Lord Halsbury, said, it is most unfortunate that because of government reorganisation science and technology are being made a political football. That is not the way for them to prosper. But there are a few weeks to go before abolition. There may still be government rethinking about those centres. As has been said, there is still considerable uncertainty about future arrangements.
It is also perfectly clear that some of the major scientific and technical units are in jeopardy, and the people who work in them know that full well. I wish to dwell on only one service. I want to draw attention to a matter that I raised during the debate on the abolition Bill, and that is accident prevention and the accident analysis teams. On page 45 of the report it says that what may have been sufficient for the provision of services 20 years ago is no longer adequate. That applies particularly to accident investigation. That is a very different operation from sticking pins into a map on an office wall, which was the practice before 1944. It is now a scientific procedure.
I think that all noble Lords will agree that road accidents which involve people, and which are often fatal and in many cases serious, cause much personal grief and suffering. Besides that, which is perhaps the worst aspect of a road accident, there are the economic costs, which are well known to the Department of Transport. Those costs are astronomical. To lessen that personal tragedy and the increasing amount spent on hospitalisation, general medical care and insurance, it is necessary to prevent as many accidents as possible.
In the West Midlands, which is perhaps the area that I know best, I understand that the county team is a multi-disciplinary team consisting of eight people. They maintain an efficient accident analysis service which is nationally recognised. That small team is often called on by the Government to analyse many matters, including the effect of wearing seat belts. That analysis forms the basis of remedial action, whether by education or by engineering solutions.
The noble Baroness, Lady Stedman, gave information on the reorganisation in the West Midlands. As she rightly said, the central team, which is to be known as the Joint Planning and Transportation Data Team—"deita" or "dahta," whichever one says: has been set up in the Solihull district. It is the co-ordinating authority for planning and highway matters. But, as the noble Baroness said, its terms of reference limit the team essentially to holding the databank, running the transportation model and maintaining traffic volume and accident databanks, the accident figures being provided by the police in the West Midlands. But the collection and detailed analysis of the data will be carried out by the individual districts in the West Midlands. Each will recruit its own little organisation, and that will lead to a multiplicity of teams and a dispersal of expertise and development interest.
I am led to understand that only what is called the trend analysis will be carried out in the future, which really means the collection of annual accident totals and comparing them with those of the previous years.

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That will do nothing to prevent accidents. The existing county team in the West Midlands will be split up. I understand that the joint data team will include four of its members. The future of the people engaged in accident analysis and possible solutions is undecided.
We need data on the whole picture of road accidents in order to carry out the development work and use site studies to try to obviate accidents, and it is, therefore, important to have complete interaction with a computer. The multi-discipline team needs to work together and with the available technology, with cross-fertilisation of ideas, in order to decide what preventive measures to take to cut down the number of road accidents. It is important, if the problem of accident analysis is to be properly examined, that the data to be analysed are sufficient to be useful. The West Midlands, a completely built-up urban area with motorway intersections, is able to provide a sample of traffic and pedestrian movement of sufficient size. This is essential if one is to produce any worthwhile scientific results.
I have used the West Midlands as one example while other noble Lords have spoken about other areas. The splitting up of a very small team will obviously destroy its effectiveness. It will make for inefficiency. But the worst result, perhaps, is that the use of technology in accident prevention is nullified. That must cause all of us serious concern.
4.31 p.m.
Lord Hunter of Newington: My Lords, I should like to add my thanks to the noble Earl, Lord Cranbrook, for the manner in which he presented the case to the House. The Select Committee recommended, as already stated, that all local authorities should set up a science and technology sub-committee and each association of authorities, also, a science and technology committee with functions related to the information of elected members, the identification of research needs and application, and the improvement of scientific and technical performances. The dilemma of many of the very good scientific and technological services of the metropolitan counties and the GLC is that they have not been the focus of anyone's serious attention. The Select Committee's work has shown this to be evident.
There is considerable danger that many highly skilled scientific and technical teams, with extremely high reputations, will be dissipated—this at a time when the world of local government needs to be pressing further into science and technology for the improvement and more efficient delivery of its services and, incidentally, to cut costs. Local authorities have often lacked the proper management and political structures to succeed in placing greater emphasis on the enhancement of the role of new technology. They have mainly had traditional departmental and committee structures. That has been the backcloth against which the services have been developed in the last decade.
However, some local authorities are beginning to challenge this in relation to new technological developments. The Select Committee report draws
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attention to the need for local authorities to have a clear strategy and a policy towards new developments as well as the encouragement of new structures within local government and their three associations. So a new updated structure is really necessary to stimulate development of services. Fortunately, the world of local government management is not static. It is changing, probably at a more rapid pace than at any time in the recent past. Innovations in management are being developed; new attitudes and values are also developing. This can be supported by several developments, and I shall mention some of them.
There is a growing emphasis on management skills rather than purely professional skills in relation to appointments to senior posts in many local authorities. A number of chief executive posts have been advertised in the last few years in which the emphasis has been on changed management and where posts have been open to the private sector and other candidates from the non-public sector. Such appointments, it is true, have usually resulted in those with public service backgrounds being appointed in open competition. But the point, I emphasise, is the seeking out by such local authorities of those with strong managerial skills.
The recent publication on 16th January of the document, Good Management in Local Government: Successful Practice and Action, produced by the Audit Commission, the Local Government Training Board and the Institute of Local Government Studies at the University of Birmingham, is important. This details some of the ways in which approaches to management in local government are changing for the better and gives a wide range of examples of good management practice within local authorities. This is the necessary ingredient for the development of scientific services.
The search for innovation by a number of authorities in terms of different forms of service delivery was noted by the Select Committee. Local authorities in Britain have tended to follow the pattern of self-sufficiency in service provision. By that, I mean that, where a statutory duty is placed on a local authority to carry out a service, it generally provides this by direct in-house staffing and resources. This picture is changing in a number of ways, including contracting out services which are insufficiently provided for by in-house services, developing more joint public-private sector ventures, extending forms of collaboration with other local authorities and other public agencies, creating private companies to carry out work previously undertaken by local government, or as a means of marketing services, and joint ventures involving the creation of packaged programmes of action based on the contributions of a range of bodies and sectors.
This summary portrays a more experimental and innovative style of local government. This development has taken place against a very traditional self-sufficiency type of service dominance. But, unfortunately, the abolition of metropolitan government has produced a reaction that has again brought out a strong individual local authority self-sufficiency model—a reassertion of, perhaps through a feeling of insecurity, and a tendency to return to, the old type. Change this, my Lords, and the way is clear!

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Undoubtedly, the main concern in this period of reaction is the limited scope of formal co-operation and joint working arrangements for the services. In particular, the districts are determined to keep as little as possible working centrally. Secondly, there is no long-term certainty that co-ordination arrangements will continue. Thirdly, there is a strong likelihood of disagreement in future between the districts over maintenance and central teams. Fourthly, and tragically, the general tendency of the co-ordination arrangements is to produce the lowest common denominator in decisions. In fact, these decisions have to be consensus decisions.
There are signs that the central Government possibly wish to place greater emphasis on local services delivered through appointed panels or administered by quango-type management. The joint boards for police, fire and transport, as successors in the running of three of the services presently run by the metropolitan counties, reflect this approach.
Undoubtedly, the main concern is the specialist services which have to be provided at county level for them to function at all. Unfortunately, as I have said, the district councils take a similar view to that of the Government—that as little as possible of the county council should survive. They do not seem to be heeding the views spelt out loud and clear by your Lordships' Select Committee that in the development and application of scientific services flexibility is required to produce the main solutions which meet a particular situation. Flexibility means good management.
Although central services like the analyst's laboratory and the hazardous waste disposal units will be maintained as single teams, major initiatives in derelict land reclamation and the use of highway design and traffic engineering are very much at risk. It could be that the residents of the metropolitan areas will have a lower level and a lower standard of service than that enjoyed elsewhere in the country. In the West Midlands there have been particular difficulties in the police joint board. This joint board was not within the remit of the Select Committee report. But the fact that disagreement can take place on a statutory body augurs badly for informal co-ordination arrangements.
I mentioned earlier the lowest common denominator of consensus decisions. This has a familiar ring. If one reads the arguments produced by this Government that general managers are required in the health service to manage services—arguing against their previous decision of the early 1970s of consensus management teams and indicating that consensus management teams have been a failure in the National Health Service—it seems that the prospect of consensus arrangements for services in local government may face a similar fate, although, as I have said, there are definite signs of reorganisation of management and a departure from local government's traditional attitudes.
It seems that the reorganisation of local government, although it may have been very desirable for many important political reasons, is, in regard to provision of modern scientific services for the people of the metropolitan counties, in danger of destroying
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the substantial progress which has been made in the development of these services in the last decade.
4.42 p.m.
Baroness Nicol: My Lords, I, too, should like to congratulate the committee on its excellent informative report, and the noble Earl, Lord Cranbrook, on the way in which he presented it. I want to confine my own remarks to the matter of waste disposal, which is something that has not been discussed a great deal today and is something about which I am very concerned because of its environmental impact.
The establishment of waste disposal authorities in 1974 has brought improvement overall. However, as the committee said in several places in the report, there is still considerable diversity of standards between areas and between different parts of the country. This is particularly significant when dealing with hazardous waste. Speaker after speaker has said that it is essential that authorities should be large enough to support the expertise necessary for their various functions. This, of course, is even more so in the case of waste disposal, particularly hazardous waste.
I do not propose again to go over the evils of abolition, because that has been covered by a fair number of speakers today. However, I should like to make two points. One is about a letter which I received only this morning. I should like to have an answer from the Minister on this; or at least a comment. The letter tells me that the new London Waste Regulatory Authority has not been given planning powers over waste disposal sites. This is a power which is enjoyed by the counties at the moment, and certainly is still enjoyed by the GLC. As the letter goes on to say:
"This could lead to problems as individual boroughs, while persuaded of the need for new sites (whether actual landfill sites or, more likely, transfer stations …) refuse to allow permission for the development in their area".
Can the Minister tell me whether that is so? Is planning power not given to the waste regulatory authority? If that is so, what on earth is the thinking behind it?—because it seems a very strange decision.
The other brief reference to the abolition problems relates to the regulations which came out on 5th December and which set out to deal with the waste regulation and disposal authorities which did not come to voluntary agreements in the metropolitan areas before the appointed day for so doing. It seems to me on, I admit, not yet a very thorough look at the regulations, that they are very little better than the proposals made by the Government during the progress of the abolition Bill, which were condemned on all sides in this House. I do not know whether the Minister would like to comment on that today, or whether he wants to leave that for another day when we can probably give him the opportunity by other means. However, it seems to me that they are a very poor answer indeed to all the arguments which were made here.
Returning to the need for expertise in waste disposal authorities, it is obvious that they should have adequate numbers of inspectors to enforce licence and planning site conditions. Poor quality waste disposal

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operators are still flourishing, and, because these poor operators can make low disposal charges, responsible operators are being squeezed and therefore standards generally are being lowered. Central Government could help by changes in legislation. For example, the Act on the control of pollution could be strengthened to make breaches of licensed conditions offences in their own right, which I understand they are not at the moment. Waste disposal authorities should be able to consider an applicant's qualifications and previous conduct when determining site licence applications, which again I understand they cannot do at the moment.
The Hazardous Waste Inspectorate, in its first report in June 1985, drew attention to many deficiencies in the operation of the present system and mentioned in particular the need for enforcement of site licensing conditions and the difficulties caused by the weakness of Section 6 of the Control of Pollution Act. I have not seen any Government comment on that report. I wonder whether the Minister can say whether any action has been taken on the many points which were raised by the Hazardous Waste Inspectorate; and, if so, where one can find it if the Minister cannot give it to me today?
It is also worth mentioning at this point the need to end Crown immunity in National Health Service establishments in regard to waste disposal. The noxious waste disposed of by National Health Service establishments is equally as hazardous as much industrial waste. Considerable problems are caused by unsatisfactory disposal. I wonder whether the Minister feels that there is a case for ending Crown immunity in these establishments on the question of waste disposal even if we cannot apparently unseat it in any other respect in Crown establishments. It is becoming an outdated system that is falling into disrepute week by week. There seems to me no reason why National Health Service establishments should not be subject to the same control as any other waste producer.
Consistency of controls between waste producers should be matched by consistency of standards between authorities. The hazardous waste inspectorate was disturbed by the wide enforcement disparity between different areas. The Select Committee was concerned to allow for local discretion in some areas of local authorities' responsibilities—and here the noble Earl, Lord Bessborough, was quite eloquent. However, I feel that this should not be extended to the disposal of hazardous waste. The less scrupulous operator to whom I have referred earlier can too easily transfer his activities across the boundary to a more congenial disposal point. Disposal sites' costs must be low enough to ensure that licensed sites are used and yet high enough to provide an incentive for producers to reduce their waste output and also to cover the costs of adequate site standards.
I am greatly indebted to Mr. Mike Tassel, who is the engineer in charge of waste disposal in Cambridgeshire County Council and who has done an excellent job and can produce many excellent finished projects as examples if your Lordships ever want to see how waste disposal can be managed with benefit to the community.
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He writes:
"All industries, especially those producing liquid wastes, should be encouraged to reduce their production of wastes".
He points out that waste disposal authorities can offer advice to producers on how to do this. But he adds:
"However, because decisions will be taken on a purely commercial basis, it is unlikely that an industry could be persuaded to reduce a waste stream if this would increase costs unless some form of enforcement or incentive could be introduced".
I wonder whether the Government have ever considered the idea of some sort of incentive for persuading waste producers to reduce their waste output, because this is how we shall have to tackle in future the ever-increasing amount of waste—hazardous and non-hazardous—with which we all have to deal. Again I should like to point out that in the planning stages of new developments and of the production of new products, the waste disposal authorities can give confidential advice and are very willing to do so.
We return to the role of central Government and the need for minimum standards to be set, backed by appropriate legislation. Central Government must also ensure that adequate financial provision is made for waste disposal, because hard-pressed local authorities could well see this service as one of low priority. It is not appealing in itself, and public awareness of the importance of proper control is only just emerging.
Waste disposal authorities already consult with neighbouring areas, with water authorities, and with waste producers. There are also national bodies for the various skills exercised in the authorities. It should therefore be possible to use this network to achieve agreement on a national standard. Unless we can achieve a national standard for waste disposal and the kind of mixture of controls and inducements which will make sure that waste disposal, especially hazardous waste disposal, is dealt with properly and in the interests of the community as a whole, we really shall not know what we are handing on to our children and our grandchildren.
The standards we apply today we think are good in the best cases. We have applied all the science we have at our disposal, and we are doing the best we can in the light of their findings. It is important, as the noble Earl, Lord Halsbury, said, that scientific teams should continue, and that they should continue in such a way that they are able to develop among themselves an initiative towards what they are doing, but that will not come if they are broken down into small units. The importance of the team in scientific research cannot be too highly emphasised.
Only through this approach will we be able to ensure that what we now take as good practice in fact remains good practice, and that we keep up to date with new developments in the kind of wastes we are having to deal with and in the kind of disposal that is necessary for them. I look forward to the answers from the Minister. If he does not have the answers today, may I ask that he will give them to me when he can?
4.52 p.m.
Lord Butterworth: My Lords, I was not a member of this committee, and I should therefore like to thank

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and congratulate my noble friend Lord Cranbrook upon an excellent report; a report which makes a valuable contribution in its analysis of, and exploration of, the importance of the scientific services of local authorities. My discussions with people in the shires and the districts have led me to think that some of the specific proposals of the report as to how local government should act in the future to develop these services may give rise to some division of view.
For example, the report sets considerable importance upon the influence of the larger authorities, and we have heard much this afternoon about the abolition of the metropolitan county councils. It is perhaps unfortunate that the report had to come out at the moment of time when the abolition was due to occur, for the abolition is bound to provoke a period of hesitation and uncertainty. It may be that the report, in its recommendations, has been adjusted for a situation which will turn out to be ephemeral and which will be corrected.
It seemed to me that there was a question of principle which lay behind that section of the report. Ideally how would we define what were the best boundaries that could be devised for a local authority? I had the impression from time to time that, because the report was caught at this moment of transition, it came very near to suggesting that the tail of the scientific services should wag the dog of the local authorities. Clearly when one is drawing the boundaries of local authorities ideally one should have an area which is a coherent area; an area, or conurbation, where people live and work. The services that will be provided will be more efficient and more cohesive if they are made available to an area of that kind where people live and work.
Perhaps I may for one moment not concentrate on the scientific services but think of the ordinary services of the local authority. As many of your Lordships will know I was the vice-chancellor of the University of Warwick in the West Midlands. When the chemist friends of the noble Earl, Lord Halsbury, succeeded in blowing up the chemistry laboratory, the rules forbade that we should ring up the fire station which was just down the road. We had to ring up Birmingham, who then made another call to the local fire station to release the fire services. The same with the ambulance. An ambulance was needed; Birmingham had to be telephoned, and the excellent person at the end of the telephone would frequently not know the name of the street that was being referred to, and frequently not know the district in Coventry.
Therefore, the general principle clearly ought to be that the boundaries of a local authority should be drawn up so that there is a coherence in the services providing for where people live and work. But having said that, the scientific services must be seen as an exception to that principle; for many of them, by their nature, must draw, if they are to be efficient, on an area larger than that of any single local authority.
Indeed, different scientific services may well need different areas if they are to be efficient. Some of the scientific services, if they are to be really efficient may well in the future need areas which may be larger than the existing metropolitan county council areas,
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although of course in this respect I would admit that London is a clear exception. I do not think that we should be pessimistic about the ability of individual authorities to combine and produce the areas which are needed for the scientific services after the disappearance of the metropolitan authorities. Many local authorities are indeed beginning now to combine, where necessary, to produce the efficient set of services.
Perhaps I may quote again from the West Midlands. The Garrett's Green Laboratories are at present organised and run by the West Midlands county council, and it has recently been agreed that these laboratories will be taken over by the Birmingham district council and run by them on behalf of all the present district councils in the West Midlands. For those laboratories plans are well ahead to expand the services which the laboratories now provide. In addition to providing the statutory type of service for local authorities, the laboratories are planning to expand the service to industry and, no doubt, the industry-based services by increasing the total volume of business will ultimately improve the quality of service that will be offered to the local authorities.
If I may, I should like to deal with the question of the science and technology sub-committee which has been recommended. It is important that the scientific services should not be seen as an end in themselves. They exist to support the whole range of functions and responsibilities which the local authorities discharge. Science and technology are fundamental to that whole range of scientific services and therefore the science and technology should be seen to permeate the whole approach of officers and members to the provision of their different services. It is for this reason, I suspect, that many of those authorities may consider it to be unnecessary to set up a science and technology committee because this might be taken to imply that science and technology are for the local authorities an end in themselves rather than that the scientific services are an integral element in the main services which it is the function of local authorities to provide.
It may however be that there is one important exception. That is in the area of information technology. There may be a useful role for a specialist committee or sub-committee in that area. Computer services have often been seen as being primarily the responsibility of the treasurer for it was his office that originally derived the major benefit from the first installation of a computer. Now information technology has become all-pervasive in the organisation and it is necessary, or it may be necessary, to have some machinery to supervise the collection of information which comes from all sides in a local authority and some authorities have found it convenient to set up a committee to supervise their information systems. No longer is finance the principal beneficiary; but the possibility of sophisticated supervision and control in so many areas of local authority activity through the operation of information technology is now proving so promising that a sub-committee, if it has the terms of reference confined to the supervision and control which information technology can confer upon the local authority, may be the most helpful way of tackling the problem.
5.5 p.m.
Lord Tordoff: My Lords, we now come to the wind-up, but I do not intend to make a conventional wind-up speech today. Apart from anything else, it would be impossible! I leave that to the noble Lord the Minister on the Government Front Bench. In any case, this is not that sort of a debate.
The Committee was faced with an absolutely impossible task. The brief that it was given was totally incapable of being met in full and therefore we were only able to succeed by, first, focusing our activities on a small part of science and technology in local government. We were also only able to succeed by leaving our political hats outside the door, particularly during the earlier stages of our discussions, when the abolition Bill was before this House. I believe that we succeeded, although the Government Front Bench may not always have felt so. But there was within the committee, to anybody who observed it from outside, very little difference of view on any of the matters relating to the abolition Bill and we tried to leave party politics outside. The major reason that we succeeded, as so many people have said already, is because of the excellent chairmanship of the noble Earl, Lord Cranbrook, because of the work of our Clerks and the work of the specialist advisers, without any of whom this report would not have seen the light of day.
Many of the speeches today have dealt with the committee's contribution to the abolition debate. I do not want to expand on that any more. I think I can save about 10 minutes out of my speech by forgetting the abolition Bill, save only to take up a point made by the noble Earl, Lord Bessborough, to the GLC. He was correct in saying that until last Friday it was anticipated that the science functions of the GLC were to be taken over by the London Fire and Civil Defence authority. Indeed, I had a considerable briefing to ask questions of the Minister as to the restrictions they were placing on the taking over of that authority in relation to the costs of the boroughs and so on. But I now understand that on Friday last it was decided that the London residuary body would take over these services. I cannot help looking back to those debates that we had on abolition and saying "We told you so!"
Members of the Committee from all sides of the House endeavoured to persuade the Government that the proper place, at least in the short term, to put those services was the residuary body. We were all accused, regardless of from which part of your Lordships' House we came, of trying to set up a new GLC. We said that we were not, but that is what we were accused of doing. Now, at the end of the day, and very late in the day, if I may say so, that seems to be where it is going. What a pity that the people in the scientific services in the GLC were not put in that position three months ago and given the security of tenure that they now have, even if it is limited only to five years. I hope the Minister will explain what the position is now, in case it has changed again, because it is absolutely crucial that we end the uncertainty for those people. There has been an enormous amount of discussion this afternoon on the need for keeping teams together and nowhere more so is that true than in Greater London. I hope that this means that the team of experts will be kept together and that some certainty can come from what the Government say this afternoon.
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Let me now turn to the recommendations in this report rather than discussing any further the earlier report. First, the conclusions, and recommendation 5.1 is the umbrella under which everything else should be considered. Any hesitancies that we have, any conclusions that we come to, are covered by the umbrella of saying that,
"The overall level of scientific and technical expertise in local government is good and in some authorities it is excellent."
I had no idea when I first started oh this committee how much science and technology there was in local government and of what a high standard it was. If no other message goes out from this report it should be a message of confidence that your Lordships' House and the Select Committee have in the competence and expertise of those people working in the scientific branches of local government.
The next recommendation 5.2, that
"There is a potential conflict between the case for diversity, emphasised by local government, and the citizen's right to uniform basic standards of service"
—is also self-evident. But this apparently is not self-evident to the Association of County Councillors. Noble Lords on the committee probably, like myself, will have received a letter from the Association of County Councillors, in which says:
"The conclusions and recommendations … have not yet been considered by the Association's Policy Committee, but are being discussed at present with those who advise the Association. I attach a note which sets out some initial reactions to the recommendations".
I recognise that they have had only two months in which to read this report and therefore it will take them a little longer, However, I have to say that some of the remarks that were made in this are quite remarkable. In response to paragraph 5.2, the conflict between diversity and local government and the citizen's right to a uniform basic standard of service, they say,
"Why should the citizen have the right to a uniform basic standard of service?"
I accept that the illustrations that they give, which is that in urban areas it may be necessary to cleanse the footways and in rural areas not, is valid. However, frankly, that is not what we are talking about. We are talking about the standards of scientific service in environmental health, in waste disposal,and in a whole range of matters which have little or nothing to do with the example that is put in this initial response. I do not want to be unduly harsh on the Association of County Councils but I fear that this underlines part of the problem that we are facing. There is a lack of recognition in local government at many levels, particularly among elected members, of the degree of scientific involvement which exists in their own services.
I think it was clear to many of us when we took evidence from the Association of County Councils, and indeed also from the Association of District Councils, that there was no cohesive view as to scientific services in local government. Individual members had their own individual experiences but there was no cohesive view across the association. I believe that this is a weakness, and it is a weakness that we have highlighted in some of our recommendations. We have highlighted ways in which the weaknesses can be overcome.

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It seems to me that at the moment far too much is left to the professional associations. Far too much of the information exchange depends upon local government officials actually getting together, either formally or informally, and exchanging information among themselves. That is an important facet and something that should not be disturbed, and indeed should be encouraged. It seems to me that there is also a need for awareness among elected members of local councils to be trained in knowledge of scientific method if they are to be able to understand what their officials are about. If their officials are to get proper recognition from their local authorities, then there is a need for local councillors to have a greater awareness of what is going on in the offices, laboratories and workshops of their own professionals.
On the question of the setting up of science and technology sub-committees, to which the noble Lord, Lord Butterworth, has referred, he is echoing words again from the Association of County Councils. They say:
"It is quite unnecessary for all local authorities to set up Science and Technology Sub-Committees, and inappropriate: science and technology are of fundamental importance to a whole range of services, and should be seen to permeate the approach of officers and members to service provision".
Precisely: we absolutely agree that it should be seen to permeate the approach. The fact is that at the moment it does not—not across the whole piece. Of course, there are people in local government who, because of outside interests and background, have a scientific training and they play their part, but it cannot be said to permeate the whole piece. The reason why we would want to see these committees set up is that we believe that it should permeate the whole piece, and this is a mechanism for so doing. If people can think of better mechanisms for so doing, then of course we certainly would not stand in their way.
One of the problems that professional staff find is that there is a lack of understanding of the need for additional training, particularly in mid-career, among elected members of local government. Until the awareness of the role which is played by science and technology in their own authorities is better understood, then I am afraid that the officials receive a rather raw deal.
I believe we have had a more encouraging response, certainly on an informal basis, from contacts with the public analysts. The noble Earl, Lord Halsbury, referred to the Royal Society of Chemistry and the work that they do in maintaining the standards. It is through the public analysts that this impacts on local governments at the sharp end. I certainly have been extremely impressed by the competence and the high standards of excellence which exist in that group of people, who really are at the focal point of the chemistry and associated sciences relating to local government. I believe that in some cases, perhaps in many, it can be said that their methodology is better than that of the universities, that their methods of analysis, their ability to carry out those methods of analysis on a day-to-day basis probably are of a higher standard than the work that goes on at universities today, because of course it is different from the day-to-day work that many universities have to do. However,
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again, I do not believe that the public and indeed, many councillors recognise how high that standard is.
There are one or two matters in the sections relating to the public analysts to which I should just like to draw attention. The question of regionalisation has already been mentioned. I think the committee was widely of the opinion that regionalisation should take place, if at all possible, but again this is a matter that can best be left to the local authorities with a prop from us to deal with the situation in their own local areas. However, there is no doubt that the matter of scale is important in producing the most effective services.
At paragraph 5.17 I believe, from what I have recently heard, that we are perhaps slightly wide of the mark. We say that local authorities should use water authority data in relation to public water supplies and normally rely on such data. I do not think that anybody would disagree in relation to public water supplies. However, there are a number of private water supplies for which the public analysts are still responsible, and I think that to suggest that the public analysts should completely back out of the provision, or the testing of water, and leave it to the water authorities, is going too far and is perhaps not what we had in mind.
On the question of accreditation, I think the public analysts would agree that there needs to be a greater emphasis. Again, I think we would not wish it to be thought that we were being critical of their ability and competence in these areas. It has been said to me that the difficulty they face is that they can be judged only by their failures, which are few and far between and therefore perhaps people do not recognise how high their standards are. When we make recommendations of the kind we have made, I do not think that it should at any stage be thought that we are suggesting that they are in general falling below standards that are required. Certainly, there can be few people in the country with higher standards.
The question of information technology has already been touched on. All I should say there is that I, personally, and from the evidence that I heard, felt that LAMSAC was an organisation that needed looking at very carefully; that it did not appear to be offering in its entirety the service that local government required, and that certainly at the larger local authority level people were finding that they were having to do their own software or go outside to get software. That seems to me to be a pity. How far it is due to the problems to which the noble Baroness, Lady Lockwood, was referring earlier, in terms of funding, I do not know. However, certainly LAMSAC has a very wide acceptance among local authorities, and it certainly is not a substitute for local authorities' science and technology sub-committees, which was suggested in one of the submissions I heard.
Although one could take many other aspects of this report, and deal with them in detail, I think it would be wrong to do so at this stage. I believe that this report makes a useful contribution even if it only awakens in the minds of local authorities, local authority associations and the Government the fact that science and technology is an important part of their function: that hidden away in nooks and crannies of their buildings they will find people doing remarkably good

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jobs on behalf of the local population, looking after our health and safety, looking after noise pollution, looking after air pollution, saving us from the troubles of asbestos in our buildings. If this report does nothing else but heighten that awareness, then I believe it will have done a good job.
5.21 p.m.
Baroness David: My Lords, I, too, should like to thank the noble Earl for his very clear and able explanation of the report. The subject of science and technology in local government assumes greater and greater importance and I am very glad that the Select Committee chose to investigate it. Like the noble Lord, Lord Tordoff, I hope that this debate will help to obtain some publicity for the report. It deals with many matters very important to the individual citizen—health, welfare and comfort; environmental matters like noise, air and water pollution and waste disposal. The general public is not very aware of the scientific and technical functions statutorily performed by local authorities.
There seem to me to be two areas of responsibility. There is the public health side which is looked after by the environmental health officers and the public and agricultural analysts, and the very rapidly developing information technology which influences, and can be made use of by, every service that local authorities provide and which need highly qualified and professional staff. The questions that the committee had to ask were these. How can these services be best delivered? How can the best use be made of the expertise that undoubtedly exists? How can well qualified and trained staff be retained and re-trained? How can innovations and techniques discovered be best exploited for the benefit of the consumer and the ratepayer? What should be the relationship between central and local government in these matters?
The committee has made a large number of recommendations, with most of which I would agree; but I shall have some comments to make on others. One of the most important decisions that the committee had to arrive at was the size of the organisation that can best deliver the fast-changing scientific and technical services. Should it be central, regional or local? Can a central or regional provision be responsive enough to local needs which can be very difficult in, say, a rural coastal area like Cornwall and a big city like Birmingham.
The committee came down in favour of large-scale operations, no doubt influenced in part by their knowledge of the GLC's scientific services renowned nationally and internationally, and used by authorities and organisations all over the country. These were dealt with in the interim report but, as that is referred to in paragraph 1.8 of the present report and as the reports really have to be taken together, I think it is in order to mention it today, as others have. I must admit that I found that the interim report had a good deal more punch and impact than the present one. This may have been because of the need to make a forceful case immediately.
What emerged in that report was the excellence and effectiveness of the services provided by large scale
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operations which could be delivered by councils of the size of the GLC and the Mets. and the difficulties likely to be encountered if these are broken up. Alas! The committee's efforts during the passage of the Local Government Bill were only very marginally successful and we are now—just two months before abolition—hearing of the disasters (not, I think, too strong a word) which are happening to those services and the almost total unpreparedness of the succeeding bodies inheriting them. The London residuary body, to be wound up in three years rather than the five allowed in the Act, has appeared somewhat unenthusiastic about its responsibilities under Schedule 13, paragraph 8, to the Act. This requires the residuary bodies to review the services presently provided by the GLC and the Mets. It seems to be a bit odd, to say the least, that recently the review of the GLC has been conducted by officers seconded to the LRB from the GLC for the purpose. This really seems a rather an Alice-in-Wonderland situation.
I, too, have been able to cut out a large part of my speech because I heard only this morning—others evidently heard on Friday; and there are only two months to go—that the LRB will take on the scientific branch of the GLC; but, it would appear, only for a matter of months. This is very much a temporary respite and leaves the future still very uncertain, as the noble Earl, Lord Halsbury, has said. Perhaps the Minister can enlarge on this when he comes to reply.
The LRB which, as I have said, is to last for only three years is taking on the central computer services of the GLC and, because of the uncertainty and doubts about the survival of some of the central computer services' customers, staff are leaving the service. The fear is that the service will eventually be split up and/or privatised. The Select Committee chose, naturally, not to return too explicitly to criticism of the abolition of the GLC and the Mets; but their attitude is clearly set out in paragraph 4.8 on page 45 of the report which, because of its length, I will not read out. But it contains fears for the loss of talented people from the local government service, as some of the best job opportunities will be gone. The paragraph ends:
"The Committee consider the issue of career prospects to be important, and note the comment of the Fellowship of Engineering that 'a career in local government at any level is not generally perceived within the engineering profession as highly desirable'."
I think that is a pity.
I have spoken of what is to happen to GLC services in the life after abolition. I should also like to refer to the environmental services following the abolition of the Merseyside County Council. My noble friend Lady White handed me a letter sent to her by Professor Bradshaw, the chairman of the Merseyside Environment Trust, enclosing a copy of a letter he had written to Mr. Kenneth Baker on 17th January expressing his very serious concern at the inability of district councils to make satisfactory arrangements for the maintenance of crucial environmental services from 1st April; land reclamation, environmental improvement, nature conservation, countryside recreation and education, and waste disposal. The Merseyside County Council's invaluable information resource on all these subjects, and more, is in danger of being dissipated or, indeed, thrown away.

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It seems that the district councils are unable to agree any course of action, either individually or jointly; nor are they willing to co-operate with the residuary body which could provide a temporary home for specialist staff. Professor Bradshaw asks the Secretary of State to take some initiative to resolve this unhappy situation relating to these services. I hope that the Minister can tell us something about this when he replies because I have given him warning of my query.
I return now to the present report and authorities not affected by the Local Government Act 1985. What is going to be the best arrangement for satisfactory provision of all their services? Certainly large scale. There will not be enough expert scientists/analysts willing to serve in small laboratories. It is more interesting, more exciting, to be in larger groups where suggestions can be tested and ideas sparked off. There is, of course, a potential conflict between the case for diversity and the citizen's right to uniform, basic standards of service; but I would agree with the committee that large-scale operations are preferable provided there is some in-house expertise to enable the right questions to be asked. There would then be higher overall quality of staff and greater efficiency at any level of cost.
It would seem sensible for county councils to work in close co-operation with their constituent district councils, or, better still, several county councils and their districts. This has been successfully done with Avon, Somerset, Gloucestershire and their districts. I am aware of the Durham experiment where two councils and one Met. council got together to form the North-East region analytical service. But the service was not successful. It broke down—and I quote:
"due, it is claimed, to misconceptions as to the nature of the service and its true necessity and cost, an unwieldy system of local political control and unsatisfactory arrangements for the fair apportionment of costs".
I know how difficult people can be, but I should have thought that where some councils and districts have managed to work together, a pattern for funding and so on could be worked out.
I have had brief comments on the report from the ACC, the AMA and the ADC. The ADC endorses the recommendation for increased co-operation between authorities and for the provision of services jointly or in collaboration with other authorities, as does the AMA. The ACC, commenting on recommendations 5.11 to 5.17, which are those dealing with joint or co-operative provision, said:
"These recommendations are generally acceptable as a set of principles, but it would not be appropriate to make them compulsory through legislation".
I myself had doubts, as had other speakers, about the value of setting up a special science and technology committee in every local authority and I was interested to see that the ACC felt the same. I was going to quote the piece that the noble Lord, Lord Tordoff, has quoted, but I have no need to do that now. I am more inclined to agree with the ACC because the end is not science and technology but the service, whatever that may require, and I just feel I would not be so dismissive of their opinion.
Similarly, I do not see the need for the public or agricultural analyst in the authorities that have them
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to be given chief officer status. The recent tendency has been to reduce the number of committees and chief officers as a means of getting a more streamlined, efficient and economical service. But the analyst, of course, should have access to the management team and perhaps prepare an annual report for members, for means must be found to widen the scientific and technical awareness of elected members, as they do not have the professional associations that the analysts have. As the ACC says, the local authority associations are only as good as their members and would not themselves have the expertise to do the education job.
It just might be useful, as the noble Earl said, for the associations to have a science and technology committee to deal with functions relating to the information of members, the improvement of scientific and technical performance of member authorities. That is, of course, important because there are some backward authorities and it might stimulate them. I should have thought that use could be made of the higher and further education colleges, which have all the facilities needed, though of course they would have to be paid. The Open University has done a very good job in the training of governors and, I am sure, could do an equally good job in training councillors in this field.
I turn from the training of members to the training of local authority personnel working in this area. Many of them will be graduates with professional qualifications when they enter local authority service. Apparently, so far, there is little evidence of problems of recruitment except in computer applications, and here some good staff are being lost to the private sector, as I said was happening with the staff of the Central Computer Services for the GLC. The Association of Trading Officers, however, complain of a nationwide shortage of officers and not enough trainees. It is important, as recommendation 5.26 says, that there should be opportunities for mid-career training and updating in such a very fast moving subject. One or two larger authorities may possibly be able to provide some training programmes as can, of course, the Local Government Training Board; but central Government and the MSC should take a hand as well as the professional associations. Greater dependence is being placed on the professional associations, according to the Institute of Environmental Health Officers. They believe there is increasing need for post-qualification training. Again, local universities, higher education colleges and the Open University could be made use of; but central Government—and that means the DoE—must make funds available.
There is a good deal of implicit criticism of the DoE in the report, and the speech of the noble Earl at the beginning of the debate supports this. Recommendations 5.3, 5.4 and 5.37 show that not nearly enough support, financial and other, is given to help with training and research which local authorities, in their present straits, are not going to be able to fund themselves. The IEHO is strong on this and I quote from one of their submissions:
"For the department to reject the idea that it has any responsibility for local authority research is wrong: they obtain benefit and could play much more of a role in co-ordinating activity and directing efforts. This could avoid wasting scarce resources."

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In parenthesis, it is odd that there is no environmental health officer presence within the DoE and that they receive no support from local government.
A further criticism made by the IEHO is that results from relevant Government-sponsored research and indeed academic research, are not made available to local authorities soon, or clearly enough, even if at all. Central Government should encourage staff to have exchanges with Government-funded research establishments. The lack of skilled manpower is going to be one of the problems of the future, and everything should be done to make trained staff want to stay in the public service. Those who are now highly trained will otherwise do as some of the staff of the CCS of the GLC have done, and use their experience as a springboard into higher paid jobs in the private sector or set up as consultants or join private consultancy firms. Do the Government realise the disaster it is that teams of experts, built up over the years, doing wonderful work, could well be scattered and their services lost? Many other speakers have made this point.
I should like to raise a specific point on Recommendation 5.23 in the section headed "Innovation", which recommends that the marketing of innovative techniques or expertise should be by means of private companies set up for the purpose. I have given the Minister warning of my question, which is: Is it legal for local authorities to set up private companies? The noble Baronesses, Lady Lockwood and Lady Stedman, also expressed anxieties about this. One local authority I know took leading counsel's opinion on this, and counsel's advice was that it would be illegal. Sections 111 and 137 of the Local Government Act 1972 were not considered to give the necessary authority, although Section 38 of the Local Government (Miscellaneous Provisions) Act 1976 does empower a local authority to sell spare capacity on its computer on a commercial basis.
It is encouraging that a lot of good, competitive work is being done. For example, I heard of the invention of a camera which can do road surveying and find out the cracks in fantastic time—far sooner than many human surveyors could. It is quite natural that if an authority has spent considerable sums on equipment and invented new techniques or new methods, it should want to get back some of the original cost. I am reminded that we had a small further education Bill last Session, particularly aimed at legalising the setting up of companies by higher and further education colleges to market their expertise and their inventions. Were they in a different position from the local authority themselves?
There is the associated question of how members of staff who are innovative can be rewarded. The committee recommend taking out patents. Is it correct that many local authorities are moving towards bonus payments for their more talented employees? I look forward to the Minister's response on this.
What finally comes out of this report are the enormous possibilities for local government to make itself much more efficient and adaptable and to give to
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the ordinary citizen a much better service and a more attractive way of life. But if central Government—the DoE—do not see the dangers in cutting back on resources and giving adequate support, staff and expertise could well be lost and services built up over the years dissipated or destroyed. Speaker after speaker has emphasised that. I hope the Minister will have an encouraging answer to give to the committee this afternoon after the hard work its chairman and members have put into this very excellent report.
5.40 p.m.
Lord Skelmersdale: My Lords, I am particularly grateful for the opportunity to respond to this debate this evening on behalf of the Government, not only because I have been privileged to respond to such reports before, but because I have followed the deliberations of the committee with close interest. Further-more, the department for which I normally speak has a direct interest in the matter in hand. Indeed, it has submitted oral or written evidence on no fewer than five occasions. This was not all. Eight other Government departments responded.
Looking now at the full weight of the evidence in Volume II, one cannot but be impressed by the thorough and wide-ranging nature of the inquiry. I agree with every noble Lord who has spoken on this. Although, inevitably, the Government will not ultimately be able to subscribe to each and every recommendation, taken as a whole this is an important set of proposals. They deserve very careful consideration by all the bodies concerned, and I can assure the House that they will get just that. However, my response this evening is the Government's interim response to the report. The full one will, of course, have to wait until the early summer or thereabouts.
I find the report's conclusion on the general high quality of local scientific and technical services to be reassuring. It certainly squares with our experience, and I agree with all noble Lords who have pointed to the expertise and the excellence of these local government services. One is always impressed that most local authorities, in discharging a range of duties, are able to meet such diverse scientific and technical requirements so effectively. Confirmation that no major or urgent action is needed to remedy weaknesses is, therefore, to be welcomed and is a justified vote of confidence in the expertise and dedication of specialist staff in local government.
The Government support many of the major themes in the report, such as the importance of scientific and technical services in ensuring the effective provision of services and the execution of legislation at local level. In passing, I would comment that they are perhaps too often an unsung area of endeavour in local government. Then there is the crucial importance of maintaining the contribution of scientific and technical officers at its present high level, so as to enable elected members to discharge their responsibilities to their ratepayers. Not only this, there is the essential role of information technology both in increasing efficiency, at a time of necessary restraint in the use of resources; the need to recognise the essential

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diversity of local government and, with it, the scope for innovation; and yet, at the same time, the corresponding need to ensure the effective distribution and cost-effective results of innovation.
In agreeing with those points, we must never forget the need for value for money in the pursuit of greater efficiency and cost-effectiveness. I know that I will have an ally here in the noble Baroness, Lady Fisher, who left me in no doubt about that during the housing investment and homeless debate in your Lordships' House on 24th April last. These are themes which it is essential for local authorities and local government as a whole to develop in meeting changing needs and technological developments. Understandably, the majority of the recommendations by the Select Committee are addressed to local government itself. Like your Lordships, I will be watching developments with the utmost interest and the Government will be consulting with the local authority associations on the recommendations of mutual concern.
Other recommendations, though, are addressed to central Government, as have been many of the questions posed this afternoon, and warrant the fullest consideration by the departments concerned. The House will not therefore, at this early stage, expect me to react in detail to each of them. However, I wish to remark on the central issue of the degree of government intervention in the provision of scientific and technical services in local government.
The department's evidence to the committee outlined the general relationship between central and local government. It stressed that each local authority has considerable autonomy within overall financial limits in arranging for the discharge of its duties and responsibilities. Each authority is answerable to its own electorate and not to Ministers or their departments. We must maintain and strengthen those essential conditions of local responsibility and accountability.
It follows from this that it is not, in our view, for central Government for the most part to determine or influence the detailed nature of scientific and technical services provided by local government. There are, of course, notable exceptions to that principle, as the report states, in the case of the police and fire services. But the principle none the less remains, and I agree with my noble friend Lord Bessborough that, if central Government were to get much more involved than it is, the costs for the taxpayer would inevitably rise. Such fundamental matters, therefore, as the number and type of specialists employed at a given local authority and their training and deployment, are essentially ones for local decision. So is the question of what external sources of expertise should be drawn upon. That was the general theme of our evidence. It applies not least to abolition.
In my family, we have an expression which is used for when we do not particularly want to go somewhere again. It is, "Been there, Gran". This applies today in view of the abolition aspect of the report. Nevertheless, I would be doing the committee less than justice if I did not briefly comment upon it. I note that the myths are already growing. My noble friend Lord Cranbrook said that abolition stole up on the Select Committee.
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My noble friend Lord Bessborough dealt firmly with that. The noble Baroness, Lady Stedman, said that the committee was asked to publish an interim report. Who by, my Lords? Certainly not by Her Majesty's Government or, so far as I can recall, by the House. The noble Baroness, Lady Fisher, said that all centres of excellence will go. That simply is not so, as I shall explain.
The Government have emphasised throughout the abolition debate that our objective is that decisions should devolve to successors. We have set the framework for them to do this either individually or collectively, wherever necessary, through the co-ordinating committees in London and in each of the metropolitan counties. Following the various useful debates during the passage of the Local Government Act that followed the publication of the interim report of your Lordships' Committee, we added in this House an amendment to strengthen the roles of the residuary bodies. This was designed to ensure that no worthwhile services were lost simply through transitional difficulties. But the bodies' role is still to facilitate decisions by the boroughs and districts and other successors. It is not to take decisions for them, still less to thrust the Government's decisions upon successors whether they like them or not.
My noble friend Lord Cranbrook asked about the future of the research and intelligence function and the London accident analysis unit. These are being discussed between the London residuary body and the boroughs. A paper is being taken by Wednesday's meeting of the London co-ordinating committee. We consider it sensible for the accident data to be considered with the research and intelligence function, and we hope that the boroughs will reach agreement on arrangements for the establishment of a unit to carry out the function.
As to the metropolitan counties, arrangements differ between them. I make no apology for that. The important thing is that the districts have considered this question. The Government stand by the assurances given during the passage of the Local Government Act to safeguard the collection and analysis of accident data. The Secretary of State for Transport is keeping closely in touch with the discussions proceeding between the boroughs and the London residuary body and stands ready to offer any appropriate assistance.
The noble Baroness, Lady Lockwood, mentioned "tortuous discussions". I do not accept that phrase at all. Successors have generally given very serious consideration to the specialist services run by the county councils. Lead district arrangements have been agreed upon for a good many services. Elsewhere, successors are recruiting individual county staff into their existing departments. I am satisfied that, although there have been initial difficulties, the co-ordinating committees are being generally effective in carrying out their responsibilities.
The noble Baroness, Lady Stedman, led us into residuary bodies. The residuary bodies have made progress in carrying out their responsibility to review specialist teams. I must emphasise, since the noble Baroness seems to be labouring under a misapprehension, that residuary bodies are not taking

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over functions from the GLC or the MCCs. They are there to help the permanent successors—boroughs, districts and others—to set up arrangements during the transitional period, if those successors so wish. Generally the bodies' relationship with both the abolition authorities and the successors has been fruitful in bringing individual services and expertise to the attention of the successors and in promoting discussion over future arrangements. In many cases, the successors have said that they do not wish to make use of the residuary bodies as temporary homes, but the Government have made clear that they are ready to transfer staff to the bodies whenever successors ask them to take on specialist teams for which a permanent home is in prospect and are prepared to pay for them. I do not know where the noble Baroness, Lady David, got the idea that the London residuary body is to be wound up after three years, as I think she said. I very much doubt if three years would give it enough time to fulfil the role that I have outlined.
My noble friend Lord Cranbrook and the noble Earl, Lord Halsbury, both, not surprisingly, mentioned the GLC scientific branch. As for the future of this, my noble friend Lord Bessborough is quite right: the London Co-ordinating Committee agreed at its meeting last December that a central scientific unit should be retained under the wing of the London Fire and Civil Defence Authority. Detailed arrangements are due to be discussed at the committee's meeting later this week. It will be for the fire authority, if the general proposals are approved, to decide how many staff to take on and whether to do so by recruitment or by transfer under which the staff would retain exactly their existing terms and conditions.
I should like to warn the noble Lord, Lord Tordoff, that he has also very nearly produced another myth. It is not true to say that the London residuary body is taking over. Should arrangements not be finalised in time, then, and only then, will it be possible for the London residuary body to take on the staff temporarily, provided the boroughs and other successor authorities so request. But it is not at this present moment going lock, stock and barrel to the London residuary body.
Lord Tordoff: My Lords, I am most grateful to the noble Lord for this explanation. I am not sure that it does not leave us all rather more confused and perhaps the employees even more confused than that. My understanding this morning was that on Friday a decision had been made that the staff were not now going to the Fire and Civil Defence Authority but were in fact going to the residuary body. The noble Lord the Minister is now telling me that that is not the case and that in fact there is still no decision as to where those staff are going.
Lord Skelmersdale: My Lords, I am saying that that is not so. I said that it is expected that the fire authority will take over the staff but failing that, for an interim period, the residuary body will take it over. That is only if arrangements cannot be made in time. Therefore I can give the staff the reassurance that the noble Lord has asked me to give them.
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The noble Earl, Lord Halsbury, also referred to the shuttlecocks of national politics. I take his point but I disagree with the noble Baroness, Lady Stedman, and others, who have suggested that almost by definition teams should stay in being as they have been set up by the GLC or the MCCs. I agree with my noble friend Lord Butterworth that this is for the successors to decide after they have assessed their own needs. I repeat that the Government do not propose to second guess their decisions.
Perhaps I could reinforce some of the evidence that I referred to earlier as being given by my department and other Government departments by touching on some general trends in government policy that have adjusted the relationship between central and local government. First, detailed controls. In 1979 a White Paper announced the determination to reduce substantially the number of detailed bureaucratic controls exercised by Government over local authority activities. As a result, more than 250 minor controls have been removed. There is the flow of information from local to central Government mentioned by my noble friend Lord Cranbrook. Positive action has been taken to reduce the burdens imposed on local government by requests for statistical information. For example, my department has reduced by more than a half since 1980 the number of statistical forms sent to local authorities.
Finally, I would note the changes in controls, as did my noble friend Lord Sandford, over local authority capital expenditure introduced in 1981. This gave authorities the freedom to determine for themselves how available resources should be used as between a variety of services and as between projects within those services. All these measures devolve more choice, flexibility and accountability to the local level. It is against this background that the Government must set the Select Committee's recommendations on their future role on local scientific and technical services. The proposals are that central Government should adopt a more interventionist stance in relation to local scientific and technical services; that departments should conduct detailed monitoring of functional performance by local authorities; and that they should also take on an expanded role on local government research and development. While I would not wish to underplay in any, way the collaborative role which exists in many areas of science and technology between central and local government, I cannot at present accept that such far-reaching recommendations would be beneficial either for central or, more importantly, for local government. I do, however, recognise, as I said at the outset, that they rest on an incisive and balanced review of the field.
I turn to the various points that have been raised this afternoon by your Lordships. Perhaps I can go through them one by one as much as I have time for and respond in writing to those that I fall by the wayside upon—if that is the phrase. The noble Baroness, Lady David, mentioned the Merseyside environmental services. As ever—and this is a point that I have made before—it is for the districts on Merseyside to decide how they will wish to provide environmental services. I understand that St. Helens has put forward a proposal to take on specialist teams for environmental improvement including derelict land reclamation. It is

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for them to agree with the other districts whether any or all of them wish to make use of the team, and if so on what terms.
Baroness David: My Lords, I understand that the districts were not agreeing and were not taking on the services. What will happen if by 1st April nothing has been arranged?
Lord Skelmersdale: My Lords, the boroughs and districts have to make a positive decision that they do not want something. If they do not want it, to the best of my knowledge and belief that particular something will lapse.
As I was saying, it is for them to agree with the other districts whether any or all of them wish to make use of the team, and if so on what terms. The noble Baroness, Lady Stedman, agreed with paragraph 5.39 of the report that local government should set up a technical information service. This is a matter for local government itself to consider especially through the local authority associations. LAMSAC already has a role here and this recommendation might be borne in mind when considering the future development of such central and local government bodies. Academic institutions and units such as the inelegantly named LGORU—the Local Government Operational Research Unit—at the University of Reading may also have a role, but local government itself is best equipped to decide how a dissemination service would be organised, co-ordinated and serviced.
The noble Baronesses, Lady David and Lady Lockwood, and, I think, the noble Lord, Lord Hunter, referred to a recommendation that local authorities should be encouraged to market innovative techniques or expertise as long as this does not detract from the service provided to ratepayers. Marketing should be by means of private companies set up for the purpose. The Government most certainly agree, and I agree equally with the noble Lord, Lord Hunter, who reminded us that it was a highlight of the Audit Commission's report on good management in local government.
Baroness David: My Lords, may I intervene again? My question was whether this was legal, and I gave warning of it.
Lord Skelmersdale: My Lords, we will get there with a little patience, if you please, from the House. As the House will know, local authorities have for a number of years set up private companies for a number of purposes. They do so using their discretionary powers under Section 111 and 137 of the Local Government Act 1972. I understand, as does the noble Baroness, Lady David, that legal doubts have been introduced. I am advised that these concern particular types of company in particular circumstances. The precise purpose of a given company and its relationship with its sponsoring authority may, in the opinion of counsel, create problems. Other legal views exist. This is fairly muddy ground and it is still being churned over. I am neither able nor qualified to offer a definitive legal view on the issues involved. I can, however, assure the noble Baroness that the Government are watching developments closely and
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the Widdicombe Inquiry on the conduct of local government business is expected to offer a general view on companies when it publishes its final report in April. So the point is well noted and we are looking at it.
The concern of the noble Baroness, Lady Lockwood, about the future, following the abolition of a company set up by West Yorkshire County Council to market products of technological innovation, is completely new to me. I shall have inquiries made and will write to the noble Baroness on the results of my research.
Several noble Lords, including my noble friend Lord Cranbrook, mentioned Recommendation 5.5 concerning local authority organisation and science and technology sub-committees. Like the noble Baroness, Lady David, the Government warmly welcome the intention of the proposal to pool scientific and technical expertise in local authorities, and so increase awareness of the authorities' need for scientific and technical services and improve precision in the execution of local functions requiring science and technology support.
I agree with what was said by my noble friend Lord Butterworth on this subject, and also with the noble Lord, Lord Tordoff, and the noble Baroness Lady David, on the need for the education of elected members; even though I am not an elected Member, I have been highly educated since I arrived in this House some few years ago.
The recommendation that the public analyst service should move towards regionalisation of laboratories provided that accessibility to local authorities is maintained was mentioned by my noble friend Lord Cranbrook. Yet again, it is for local government to take the initiative as it sees fit on any reorganisation of the public analyst service. I would say that that recommendation is a departure from our current policy and that it will require a lot of inter-departmental discussion and consultation with the local authority associations before we can accede to that particular recommendation.
The Earl of Halsbury: My Lords, before the Minister leaves that subject, does he have any words of comfort for me about the in-fighting in respect of the appointment of the Merseyside county analyst?
Lord Skelmersdale: My Lords, not at this moment, but I will write to the noble Earl.
Lord Tordoff: My Lords, I am sorry to interrupt the Minister but I thought I heard him say that this will be a matter for local authorities but that the Government will stop them if they think fit.
Lord Skelmersdale: My Lords, I am trying to get through in a reasonable amount of time, and I am attempting to cover as many points as I can. If I am indistinct then I hope that I shall not be so indistinct when the noble Lord comes to read the Official Report.
To the noble Baroness, Lady Stedman, I would say that local government does not disseminate its research in a comprehensive and co-ordinated way. LAMSAC and the associations play a role in that, and I note the criticisms of LAMSAC that have been made

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by several noble Lords. There are initiatives by academics in local government to produce registers, and the department is part-funding one such initiative by Cambridgeshire County Council.
The noble Baroness, Lady Stedman, asked about the future of the minerals plan produced by the Greater Manchester council. I am afraid that in the time available it has not been possible to establish the position fully. I will write to the noble Baroness, but meanwhile I can say that Salford has been nominated as lead district with responsibility for future minerals planning.
I do not believe that it would be right at this moment to go into the details of rate support grant as it applies to the report. The suggestion that scientific and technical needs and capabilities ought to be separately recognised in the grant-related expenditure element is somewhat misconceived. Grant-related assessments are need assessments; they do not prescribe how much an authority should spend on a particular function. Block grant is paid in support of an authority's services generally, so, even if a separate grant-related expenditure were established, the authority would continue to have full discretion to determine the priority that it gave to expenditure on scientific and technical services.
I have managed to get myself in a slight muddle and out of order. However, a few minutes ago I was speaking on the subject of waste. The noble Baroness, Lady Nicol, based her speech entirely on that subject. Some of the answers to her questions are encompassed by what I have already said, but I shall take the opportunity of writing to the noble Baroness on what I may call her non-report points.
There are a couple of other points also that, in the interests of this House, I shall not go into now. I shall conclude by saying that the Select Committee's report does of course touch on the interests of a number of government departments. I find it particularly useful, therefore, to hear the views of the House as a whole on this matter. We shall take careful note of everything that has been said here today when framing the formal response to the committee.
6.5 p.m.
The Earl of Cranbrook: My Lords, despite the kind words that have been said, I found it extremely difficult to introduce this large report, and I was not able to do so fully to my own satisfaction. I was therefore grateful to those fellow members of the committee and also to those noble Lords—which term of course includes noble Baronesses—who picked up issues upon which I should have liked to have an opportunity myself to enlarge had there been time. I should also like to give my warmest congratulations to my noble friend Lord Skelmersdale, with his difficult job on the Front Bench, for the way he so ably attempted to field the very large battery of questions that were thrown at him.
I should like to take a brief moment to lay a potential myth that my noble friend the Minister has himself brought up. I did not use the words "stole up"; the abolition Bill did not steal up on me. I went into the Select Committee with my eyes open, knowing that it would not be a particularly easy job. What did
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come up, not as an unexpected surprise but as an entirely open eventuality, was whether or not we should be forced by the issues to produce an interim report. That was an absolutely open question when we started our inquiry, and in my view circumstances justified our action in so doing. However, I do not think it was fair to say that I had pretended that things "stole up" on me—I do not pretend that.
The one thing that I do not want to see run and run is this business of science and technology subcommittees within policy and resources committees. I myself have been a local government man and I have sat on a number of such committees. It is a regrettable symptom of our age that there is resistance to recognising the involvement of science and technology in so many of our activities in life, including local government. That aspect needs to be reviewed, I believe, and needs to be reviewed on a continuing basis—not just occasionally by a Select Committee of this House. I hope that our stimulus will make local authorities undertake such a review. How they do so I do not really mind, provided that it is done on a perpetual basis.
The other points that are made in our report have provided the basis for a very adequate debate. It is my duty now to move that this House takes note of the report. I so move.
On Question, Motion agreed to.

External Competence of the European Communities: ECC Report
6.8 p.m.
Lord Templeman Lord Templeman rose to move, That this House takes note of the report of the European Communities Committee on External Competence of the European Communities (16th Report, 1984–85, H,L. 236).
The noble and learned Lord said: My Lords, the 16th Report of the Select Committee on External Competence of the European Communities, which the House is now asked to note, is concerned with the powers of the Community to conclude agreements with countries that do not form part of the Community. It is concerned also with the effect of such agreements on the United Kingdom, its law and its citizens. Your Lordships will have seen from the report that the general conclusions of the committee are that the powers of the Commission are very wide and that the effects of the exercise of those powers can be very far-reaching.
I should say at once that the committee find nothing disturbing in those conclusions. As your Lordships will see from paragraph 27 on page 12 of the report, the committee note that in practice any difficulties have been ironed out without trouble and that the exercise of extra powers by the Community into areas not covered by specific powers requires the consent of the council acting unanimously and therefore requires the agreement of each and every member state. I quote the last sentence of paragraph 27:
"The purpose of this report is not to express disapproval of the extent of the powers [of the Community] or to urge the application of stricter legal limits to their exercise; rather it is to draw attention to the far-reaching consequences of the exercises of the powers and to highlight the considerations which need to be borne in mind when agreeing to that exercise".
In brief, the report contains no criticisms of the Treaty of Rome, the Commission, or the European Court of Justice. The noble Baroness, Lady Young, will be encouraged to note, and the noble Lord, Lord Cledwyn of Penhros, may be discouraged to note, that it contains no criticism of ministers, of any department, or of any practice among those departments. I hope that the report will not be thought to be dull in consequence.
In English law the power of concluding a treaty with a foreign country has always been vested in the Crown—now, of course, advised by the Cabinet. But if a provision of that treaty can be brought into effect only by altering the laws of the United Kingdom then, of course, that treaty provision will be ineffective unless and until Parliament has pronounced on an alteration of the law. To take a very ancient example, when Mary Tudor married Philip II of Spain she was able, as a Queen, to enter into a treaty of friendship with Spain; but she was unable to effect a restoration of property of the Catholic Church unless and until Parliament had repealed the provisions of Henry VIII whereby that property had been confiscated.
In more recent times the United Kingdom Government have been able to enter, and have entered, into treaties with foreign countries for the abolition of tariffs and the removal of obstacles to trade. But effect could only be given to most of those provisions by an enactment by Parliament or under powers bestowed by Parliament which enabled customs duties and other imposts to be reduced.
In English law the power of the Crown to enter into treaties and the supremacy of Parliament over the law are harmonised in a typical compromise way. If a treaty entered into by Her Majesty's Government requires United Kingdom legislation for its implementation then the treaty is not ratified by the Government until the necessary legislation has been passed. Even when legislation is not necessary, the treaty is laid before Parliament 21 days before it is ratified in order that Parliament may express its views and possibly enforce its views. That is the result of what is known as the Ponsonby Rules—so-called because they were enacted or brought into effect, or promised, by, I think, the grandfather of the noble Lord, Lord Ponsonby of Shulbrede. They are the rules which govern the respective powers of the Crown and Parliament with regard to treaties with foreign countries. This aspect of the matter your Lordships will find on page 25, paragraph 69, of the report.
However, once we joined the European Community the power to enter into agreements with foreign countries which affect the trade and other matters which fall within the ambit of the Treaty of Rome passed to the Community and away from the United Kingdom Government and Parliament. This arises partly from the express terms of the Treaty of Rome and partly from a decision of the European Court of Justice. Article 210 of the treaty states:
"The Community shall have legal personality."
The European Court of Justice has decided that this provision means that in its external relations the Community enjoys the capacity to enter into international commitments; in other words, the Community can do as much as a member state
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government could have done before the Treaty of Rome came into force.
The committee has set out in Appendix 5 what I hope is a convenient summary of the relevant authorities on this: relevant, I hope, and understandable. The quotation I have just given from the European Court of Justice decision is the Kramer case, which is to be found on page 52 of the report. Further decisions have shown that when any question falls within the scope of the express or implied powers and duties of the Community it is a matter for the Community; and individual member states are not allowed to initiate, take part in or execute any agreement affecting such a question. The logic of it is that one could not be a member of the Community and speak with a divided voice. The voice of member states is expressed through the council and through the various committees which, in effect, make up the collective mind of the Community. You could not have one vote and voice on behalf of the Community and 12 discordant votes on behalf of different member states. Your Lordships will find that in the AETR case, which is in the committee's report on page 51, the European Court of Justice said that,
"to the extent to which Community rules are promulgated for the attainment of the objectives of the Treaty, the Member States cannot, outside the framework of the Community institutions, assume obligations which might affect those rules or alter their scope".
There is one area here to which I draw attention; that is, that the Commission claims that member states may not even negotiate with third countries on matters which have not been the subject of internal Community regulations. Where it is said that the Community has power to enter into negotiations on those matters then member states are precluded. Your Lordships will find reference to that in paragraph 23 on page 11. There is a conclusion, or recommendation, of the committee in paragraph 76, on page 26, which states:
"Where there are as yet no internal Community rules, it would … rarely be appropriate to exercise external competence under"
the Treaty. I shall be interested to hear the Government's reaction to that recommendation.
Some provisions of international and third party treaties—as with provisions of internal effect by the Community authorities—are enforceable without any action by the Parliament of the United Kingdom and may even be enforceable by private individuals without any pronouncement by the Parliament of the United Kingdom. That, which gives very wide powers to individuals, stems from another decision of the European Court of Justice which is to be found on page 54 of the report and is the case of Van Gend en Loos. The European Court states that,
"the Community constitutes a new legal order of international law for the benefit of which the States have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only Member States but also their nationals. Independently of the legislation of Member States, Community law therefore not only imposes obligations on individuals but is also intended to confer upon them rights which become part of their legal heritage."
Your Lordships will see two examples of that in the report. The first is on page 56—the Bresciani case—and the second is on page 57, where for the insular Englishman there is a quite unpronounceable piece of German litigation. In each case a private

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individual challenged charges levied by his own Government on the ground that those charges infringed a Community convention entered into with various African, Caribbean and Pacific countries. The European Court of Justice held that the individual could apply to his own court and be upheld by that court under the guidance of the European Court in declaring that the national law, in so far as it was in conflict with the European Treaty, was not be to observed.
There arises from that some danger of uncertainty because it is not always abundantly clear whether the provision which is entered into in a treaty is one which an individual can enforce or whether it is one which the individual cannot enforce unless and until his own Government have brought into force legislation in his own country. In that respect your Lordships will find at paragraph 79 on page 27 that the committee do see dangers in further development of this notion, or the direct application of provisions in the Community's treaties.
As to the exercise of the powers, your Lordships will find between pages 36 and 45 of the report, in Sections I to III, an extensive account and list of the number of treaties and agreements into which the Community has entered. They cover a very great variety of matters, and extend over a very long period. At Section IV, which is in the report at page 46, your Lordships will find an impressive list of the international bodies upon which the Community is represented. Those are the powers and the extent of the powers.
I turn now to what I might call the member state safeguards. First of all, the procedure is this: when the Community is thinking of negotiating with countries outside the Community—the United States, any of the African states, or any state which is outside the Community—then it must first ask the Council to authorise the Commission to open negotiations with those foreign countries, and it must not only ask for authorisation, but it must obtain what is called a "negotiating mandate". It must tell the Council what it wants to do and on what terms it will negotiate. It will then be for the Council to decide, speaking unanimously, not only whether the Commission shall open negotiations but whether it shall do so either on the terms requested by the Commission, or on some other terms. When the Commission has received that negotiating mandate, it then proceeds to negotiate, but it is assisted by a committee which is appointed by the Commission. This committee consists of expert representatives from member states. Your Lordships will find that mentioned on page 18 in paragraph 50 of the report, and on page 17, paragraph 45.
So, to begin with, there is the intervention of the Council, which of course includes representatives of every member state, and then the Commission's hand is held to a certain extent by an advisory committee which also includes representatives of the member states. Finally, when the Commission has reached terms pursuant to that mandate with the foreign country, the agreement does not come into effect except by virtue of the Council. The Council is the body which concludes the agreement, and usually it is provided that the Council itself must first consult with the European Parliament.
On page 27 of the report at paragraph 78 your committee have recommended:
"The exclusive nature of the Community's competence and the impact on the powers of Member States need to be clearly understood and should be borne in mind by Her Majesty's Government when they consider proposals for the initiation of negotiations".
It is at that stage when a decision needs to be made as to whether the powers sought are within the powers of the Community; if so, they would be approved, because as everybody knows, once the carriage has started and once the negotiations are under way, it is almost impossible for any individual member state, except on a very dire matter, to say "stop".
There is another type of agreement which presents some difficulties, and that is what is known as a mixed agreement. There are some negotiations with countries into which the Community is competent to enter in certain respects, and member states are competent to enter in other respects. Examples in three fields are: taxation, the Law of the Sea Convention and a recent convention under negotiation concerning the conservation of wild flora and fauna. So far as taxation is concerned, of course the Community is vitally interested because of VAT, but at least up to the present it is not for the Community but for Her Majesty's Government to be interested in such matters as income tax and capital gains tax. So if there are negotiations on taxation which concern all taxes, then that is a mixed negotiation and a mixed agreement. The United Kingdom will wish to be there to safeguard its rights and powers as regards income tax; the Commission will wish to be there to safeguard its rights as regards VAT and any other customs imposts in which the Community is interested.
Similarly, in the recent convention on the law of the sea there were some matters which concerned the Community because they affected trade and there were other matters which concerned the member states because they dealt with the question of territorial rights, international rights of passage in the sea and so on. That leads to one difficulty because it is not always abundantly clear where the interest of the Community stops and the interest of the member state begins, and nobody wants a wrangle in the middle of an international negotiation, or any doubt and uncertainty.
In practice we have seen from the evidence which was laid before us that these matters are resolved by the representatives of the Commission and the representatives of the member states meeting beforehand and working out how they will operate the terms of the negotiations. For my part I was filled with admiration at the pragmatic way in which these very real and nutty legal problems were solved by goodwill on the part of the Commission and on the part of those representatives of Her Majesty's Government who were taking part in the negotiations.
In paragraph 80, at page 27, your committee concludes that it is not always easy to identify where the division lies between the Community and the member states in international negotiations, and considers that it will often be desirable to do this in order to avoid any further uncertainty and differences of opinion—in other words, to divide in a separate

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schedule, as I think the Convention on the Law of the Sea demands, those matters for which the Community is answerable to the international community from those matters which are the responsibility of the member states individually. I should be interested to hear the Government's response to that recommendation.
There is one matter on which the committee thought that there were some defects in the present system. As I have told your Lordships, when the United Kingdom Government are negotiating an international treaty there are arrangements for scrutiny under the Ponsonby rules and no treaty is brought into effect unless the necessary legislation has been passed. But the difficulty which arises over Community matters in dealing with international affairs is this: from the very beginning every internal proposal for a Community law comes to the Parliament of this country, and so to your Lordships' House, for scrutiny and consideration. But in connection with international treaties, as I have told your Lordships, the ball opens with the Commission going to the Council and asking for a negotiating mandate.
The difficulty which arises is that if that proposal were then sent on to member states for the scrutiny of their governments and parliaments, it would necessarily mean that the negotiating mandate would become known to the people on the other side with whom one is negotiating—and nobody likes to enter into negotiations by putting all one's cards on the table, showing exactly what one is after, how far one is prepared to go and generally what is one's negotiating hand. Therefore, proposals for negotiations are usually not laid before Parliament and do not reach your Lordships until the negotiations have been concluded.
When they have been concluded and the Council is being asked to ratify and bring the agreement into effect, the text is submitted for the scrutiny of Parliament. But by then the carriage is not only half way down the road; it is almost entering its destination. The effective power of scrutiny of this House is very much more limited in practice if scrutiny does not take place until negotiations have been finished and there is merely the step of asking the Council to conclude the agreement.
There are some negotiations in which it is difficult to see why they should not be submitted to the House for scrutiny, even at the opening stage of negotiation. For example, negotiations have been begun by the Commission with some foreign countries with regard to the operation of legal professional privilege. That is a matter where the Commission's and Community's hands need not be kept close to their chests, and there is no reason that one can see why the actual proposals for a negotiating mandate should not have been submitted for scrutiny.
On that subject your Lordships' committee make recommendations at paragraphs 83 and 84 of the report. In particular, I should be grateful to know the Government's reaction to paragraph 84:
"The Committee consider that the current machinery for … scrutiny is inadequate in relation to treaty-making by the Community",
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because it is too late by the time that it finds out about it, and,
"consider that Parliament should be informed of proposals for the initiation of treaty negotiations in the same way as it is informed of proposals for other action"—
that is to say, at the beginning and not at the end—
"whenever that can be done by means which do not disclose confidential matter".
The subject of the report presents theoretical and practical difficulties, and your Lordships' committee was impressed by the understanding of the problems involved on the part of the departmental witnesses and on behalf of witnesses from the Commission, who gladly came over and entered into great discussions with the committee as to both the theoretical and the practical defects. We found that all the theoretical problems to which we referred were commonly being ironed out, and we were encouraged by the degree of co-operation shown among the departments of Her Majesty's Government and the Community institutions.
Nevertheless, the report draws attention to a subject which is of great importance. It is a subject on which we have ventured to draw the attention of Her Majesty's Government and departments to the problems involved, so that whenever any new negotiations are proposed, people will draw a deep breath and say, "Do we think that the Community really has power to do that? Is it within its competence, or should it be left to the member states?" And they should consider that problem apart altogether from the merits of the proposals; namely, whether they are a good thing or a bad thing.
This subject is, as far as I am concerned, a hard nut to crack and would, I think, have been impossible without the help of the committee's legal assistants, Mr. Karl Newman and Mr. Jonathan Stoodley. I am sure that I speak for all members of the sub-committee when I say that we should not have fought our way through the thickets of Community law in theory and in practice without their help and guidance. My Lords, I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on External Competence of the European Communities (16th Report, 1984–85, H.L. 236).—(Lord Templeman.)
6.34 p.m.
Baroness Serota: My Lords, I rise to take part in this debate on behalf of my noble friend Lady Llewelyn-Davies of Hastoe, the Chairman of the European Communities Committee. Unfortunately, she is unwell and therefore unable to be present with us for this debate tonight. I know that the whole House would wish to send her its very best wishes for a rapid recovery. As your Lordships know, she always attends the debates on our reports but only on rare occasions does she feel the need to add to the excellent work of the committees. But she saw this occasion as one on which she should speak, because, as I shall explain, it concerns the whole process of the scrutiny of European legislation by your Lordships' House, and she greatly regrets her inability to be present.
I know that my noble friend would wish me to begin by saying how much the committee is indebted to its

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legal sub-committee, Sub-Committee E, whose report we are debating today. The sub-committee examines specifically all legal questions arising from the Community's proposals for legislation. Sometimes it does that by holding an inquiry itself; sometimes it makes a contribution to the inquiry of other sub-committees. It examines specific proposals from Brussels and it also from time to time considers general issues, such as the present one of external competence. To show its versatility, perhaps I should mention that it is even now looking at a subject that is primarily of agricultural importance, and that is the cessation of milk production.
One of the reasons why the sub-committee is so formidable to those of us who do not serve on it is that it is traditionally chaired by a Law Lord, and my noble friend and the whole committee are especially grateful to the noble and learned Lord, Lord Templeman, for the work that he has done both on the subject before the House for debate tonight and also in the other inquiries which have been held during his term as chairman of the sub-committee. The sub-committee also has several other eminent lawyers among its members, some of whom are to speak in the debate tonight, and also a few non-lawyers. The latter no doubt have their own special role in ensuring that what the lawyers agree is still intelligible to the rest of us who are not so well equipped.
This report on external competence is of course one of the most important to come from Sub-Committee E in recent years. The noble and learned Lord explained the external treaty powers of the Community and how they can have a major effect on the Government and the Community itself, particularly on the Community's internal competence. Many of us found the report a real eye-opener on the potential extent of Community competence. Each new power gained by the Community is a power lost by the member states. That may or may not be desirable. One would not wish to argue whether the transfer of powers is good or bad, but I am sure that we must make such transfers with our eyes open and not by mistake or by omission.
My noble friend Lady Llewelyn-Davies was particularly concerned to speak on just those paragraphs in Part 5 of the report which deal with the scrutiny of treaty negotiations by the United Kingdom Parliament—the part of the report that the noble and learned Lord dealt with towards the end of his able and clear introduction of what I regard as a very complex report to read.
The House has a very well defined and successful method of scrutiny. It is the chairman's responsibility to take part in that process both by the preliminary sift of documents (amounting, I gather, to some 800 a year) to identify those which need further scrutiny and then by taking part in the examination of witnesses. The House has delegated its powers of scrutiny to the European Communities Committee, and we have an obligation to ensure that the scrutiny process does not miss anything of significance to the United Kingdom. To that extent we have a watchdog function. But there is also a very positive side to the scrutiny function. We believe that our scrutiny and the reports that we produce can be helpful both to the Government and to the Community itself. By airing the main issues at the
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pre-legislative stage, we may be of help to the Council of Ministers in coming to its conclusions and to the Commission in its formulation of future policy.
The report says in paragraph 84:
"the current machinery for Parliamentary scrutiny is inadequate in relation to treaty-making by the Community".
I should like, if I may, for a few moments just to underline a point that the noble and learned Lord, Lord Templeman, has also made to us in opening the debate on his Motion. This we see as a serious criticism of the scrutiny process of the House. The report goes on to say:
"By the time Parliament is informed of a proposed agreement [for a Community treaty] the text has been settled and it will often be too late for any effective action to be taken. The Committee therefore consider that Parliament should be informed of proposals for the initiation of treaty negotiations in the same way as it is informed of proposals for other action by the Community, whenever this can be done by means which do not disclose confidential matter".
I am sure that those last words are important but, nevertheless, the recommendation from the committee stands as a whole. The chairman of the Select Committee strongly supports the legal subcommittee's recommendation on this particular point. If we, as a committee, are to fulfil our obligations, we must surely have the opportunity to consider the relevant documents early enough; otherwise, our efforts will be ineffective. It is not enough for the House to be informed of treaty negotiations when those negotiations are already complete. We must hear about the proposals in advance whenever this can be done by means which do not disclose confidential matter. We recognise, of course, that in any treaty negotiations, the partners to the negotiations must not be expected to disclose all their hand in advance. This would clearly undermine the negotiations. But the committee is, I think, right in saying that Her Majesty's Government could be more forthcoming than they are at present.
It might be argued that confidentiality was an obstacle. But surely that is not the case. As the evidence from the Foreign and Commonwealth Office explains—this is quoted on page 3 of the report's evidence section—the Commission keeps the European Parliament informed from a very early stage of negotiations. The European Parliament receives information about the Community's treaty negotiations in advance of their commencement, as the noble and learned Lord, Lord Templeman, has said, and also during the negotiations. Some of this is not made available to the United Kingdom Parliament. Admittedly, the two parliaments are not on all fours. We have different functions and the relationships between the Commission and the European Parliament are different to those between British Ministers and this House. But the Commission's practice shows that there can be no basic objection to giving this House more information at an early stage. It also confirms what all of us, I am sure, feel—that there is a place for parliamentary scrutiny of Community treaty negotiations.
This aspect of the scrutiny role is being overlooked. When we are involved in considering treaty proposals, it is far too late to do anything effective about them. It could be argued that this does not matter and that Parliament, after all, does not control United Kingdom treaty negotiations. But the great value of

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the Select Committee's report, I would submit, is to show us the possible effects of Community treaties and to make us realise what many, if not most, of us did not see before—namely, the extent to which treaties can gradually extend Community competence and so transfer legislative powers from this Parliament to the Community. Furthermore, and perhaps just as significant, the treaties will often commit this country to change its laws. In some cases, the treaty will even have the effect of changing our laws themselves. We can see that the scrutiny of treaty negotiations really does matter and that Community treaties have wider implications for Parliament than United Kingdom treaties.
I would therefore conclude by underlining and, indeed, repeating the point that was put to the noble Baroness, Lady Young, by the noble and learned Lord, Lord Templeman, at the end of his introductory speech, and, on behalf of my noble friend, ask the Minister the following question of which notice has been given. Does she agree that Parliament should be informed of proposals for the initiation of treaty negotiations in the same way as it is informed of proposals for action by the Community whenever this can be done by means that do not disclose confidential matter? I would underline those last few words. In the light of the very important report that we are debating, I do not see how the answer to that question can be anything but "Yes". It may be a qualified "Yes". I know that my noble friend will be only too glad to enter into discussions with the noble Baroness and her officials about the most appropriate ways of improving that aspect of the scrutiny process of the European Communities Commission on behalf of this House. Any change in this House would, of course, need to be implemented in another place. This is not a matter for unilateral action. But the committee looks forward to receiving a clear indication tonight that we can close what must surely be recognised as a potential loophole in our own scrutiny procedures.
6.44 p.m.
Lord Banks: My Lords, I should like to join the noble Baroness, Lady Serota, in thanking the noble and learned Lord, Lord Templeman, for the way in which he has introduced the report to us this evening. I am sure that the whole House will be grateful to the noble and learned Lord and to Sub-Committee E for the informative report that they have presented on a complex subject. The report throws light on some difficult legal matters. This is most helpful to a layman like myself. I can well understand that those who oppose United Kingdom membership of the European Economic Community and who do not think that the United Kingdom should be bound by the Treaty of Rome might find the report irksome reading. But for those of us who believe that our future prosperity and the preservation even of our democratic system depend on increasing European collaboration and unity, there is nothing in it that is disturbing.
The report makes clear certainly that the external competence of the EC is very wide. In fact, after taking into account the express powers, the implied powers, and Articles 100 and 235, the committee say that they find it difficult to identify any clear limit to the possible
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extent of the Community's external competence. Yet the committee are not alarmed by that. Nor am I. The safeguard, as the noble and learned Lord pointed out, is that there can be no extension of the external competence into a new area not covered by specific existing powers unless the member states are unanimous. I am all in favour of more majority voting. I have frequently spoken in favour of it in this House, and I shall no doubt do so again. But this is one area, I feel, where unanimity is rightly required.
At first sight, the implied powers, through the application of the doctrine of parallelism, may appear to offer the widest scope for extension since they permit external competence wherever internal competence exists, whether it is exercised or not. However, as we have seen, any extension of the external competence of the Community into new areas not covered by specific existing powers requires unanimity in the Council. The potential loophole would appear to be the specific power given by Article 113 to deal externally in matters relating to the common commercial policy. As the committee report, there is dispute between the Commission and the Council about the interpretation of this article. The Commision's view, I understand, is that measures primarily intended for a non-commercial purpose, if they have some commercial implication, are allowed. Again, as I understand it, the Council's decision, assuming that the Commission's interpretation prevails, would be by qualified majority. So there could be the extension of external competence into what was in effect a new field without unanimity being required, although not, of course, without the Council's approval by qualified majority. While the committee note this situation in their report, I cannot find that, in their conclusions, they have expressed an opinion about it.
Another matter about which I am a little puzzled is this. Paragraph 24 says that the exercise of specific powers is mandatory. The Community is obliged to act—and those words "is obliged to act" are in the paragraph. But paragraphs 20 and 21 refer to the fact that where the Community, although having competence arising from specific powers, has not yet acted, the member states may act on a transitional and fiduciary basis. Fishing is given as an example. Individual member states impose quotas while awaiting agreement on a Community fishing policy. It would therefore seem that, despite having specific powers, the Community can at least postpone action; and I wonder for how long the Community can legitimately postpone such action.
One point which I noted in the examination of the witnesses from the Department of Trade and Industry was this. They were asked whether proposals for the exercise of the external competence of the Community were tested by the department to ensure that they were within the competence of the Community. The reply was that they were tested as to whether the proposal was good or bad. The implication was that competence would be considered only if the reaction of the department was hostile. The questioner, on the other hand, seemed to be implying that the department should look at competence first. I wonder whether that is right. Surely the legal department of the Council should test the competence to make sure

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that the Commission is not "pulling a fast one" on them. After that I think it natural that member governments should be concerned with the merits of the proposal and that they should look at the competence only if they were opposed to the course of action which was being proposed.
I agree with the committee that where there are yet no internal rules it would rarely be appropriate to exercise external competence. I agree also that the exclusive nature of the Community competence needs to be clearly understood. I am not so sure that I agree with the committee's opposition to the European Parliament's conversion of the right in some cases, and practice in others, of consultation into a power of veto by refraining from giving an opinion. I do not think that we can blame the Parliament for seeking to gain power by exploiting the procedures. Surely, Parliaments have always done this.
I hope to see the Parliament's role and its powers greatly increased. A modest step in that direction was taken in the Luxembourg summit proposals—now regrettably threatened by the opposition of the Danish Parliament. But if there should be a greater role for the European Parliament there remains an important role for national parliaments and for this Parliament in particular.
Wherever British Ministers, by virtue of the fact that they are British Ministers, are participants in Community decisions, they should be accountable to this Parliament. I agree with the committee that our parliamentary scrutiny of Community external agreements and treaties is not altogether satisfactory. When we are faced with the order necessary for a treaty to be given the force of law in the United Kingdom, as has been pointed out, all has been decided and one is not sure that a speech dealing with the subject matter of the treaty at any length is very welcome at that stage. I was greatly encouraged by what the noble Baroness, Lady Serota, said about that.
I support the recommendation of the committee that Parliament should have an earlier opportunity to discuss the subject matter of the proposed negotiations, and, in conclusion, may I once again thank the committee for the useful service which they have performed in presenting this comprehensive report.
6.55 p.m.
Viscount Colville of Culross: My Lords, I am sure that I am not the only Member of your Lordships' House who has found the membership of one of the European sub-committees an exceedingly educative experience. Certainly on this occasion the combination of the chairmanship of the noble and learned Lord, Lord Templeman, and the wisdom of our advisers, not least in selecting the witnesses whom we invited to hear, led to a whole area of investigation which I personally did not know existed. I am extremely glad to find that the points that we were trying to get over in this report have already been very fully appreciated by the two previous speakers, who were not members of the sub-committee. I believe that those of us who were members should confine ourselves to highlighting one or two very particular matters, because this was the report of us all.
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In what I am about to say I do not wish in any way to undermine the message that the report includes: that there is nothing here to cause alarm or dismay, and certainly there is nothing which should undermine our faith in the onward progress of our membership of the European Economic Community. However, there are a few points and I should like to draw attention to one of them which surprised me and may be a matter upon which my noble friend Lady Young would like to come to a conclusion, either tonight or on some other occasion.
The noble Lord, Lord Banks, touched upon this point. It is referred to in paragraph 17 of the report. The whole of the doctrine of the competence of the EC is based upon a kind of legal train of thought which—certainly to a lawyer brought up in the jurisdiction of the courts of this country—comes as a certain novelty. The noble and learned Lord, Lord Denning, knows all about this and has spoken about it on many occasions. But it is a matter of interpretation of the law which is much more usual in Europe than in this country. Therefore, I confess that, when I first came to this subject and found that we were discussing four articles of the treaty in the way that we were, I was surprised.
The two external treaty-making articles, Articles 113 and 238, if exercised, carry with them a transference of power, as the noble Baroness, Lady Serota, has said, not only in terms of external treaty making but also thereafter in terms of what one can do domestically in one's own Parliament—because there must be no inconsistency between what the Community does among the international community and what we do in order to regulate our own affairs here.
In the opposite direction, if the two open-ended articles in the treaty, Articles 100 and 235, are activated in ways which inevitably are not in accordance with the specific provisions of the treaty—because that is why they are openended—then there may follow in the exercise of that power certain inhibitions on this country, like all the members of the Community, in making treaty arrangements overseas. This is the doctrine of parallelism about which the noble Lord, Lord Banks, has just been speaking.
I wish to draw to the attention of the noble Baroness, Lady Young, what we say in paragraph 17. I would suggest to the House that there is there a particularly stark example of what this sort of legal interpretation of a text of the type that the Treaty of Rome comprises can lead to. There are the two views put forward. The point is illustrated by the proposition that there should be an external treaty negotiated to protect endangered species by banning their importation into any of the countries which are members of the Community. The Commission, which proposed this, takes the view that if the instrument which is going to carry into effect the proposition that it put forward is of a commercial character, then that falls within the terms of Article 113. The Council takes the view that it is not the question of the instrument but the objective of the proposed international negotiation which matters.
I think that as a result in this particular case the Council prevailed and the matter did not go forward. But one can see that there is room for an enormous

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amount of dispute about the way in which an article like Article 113 should be interpreted and, according to the way in which one looks at it, there could or could not be room for an almost indefinite extension of the competence of the Community to legislate and, in the end, to legislate in that field exclusively for a particular subject matter.
What seems to me to arise out of that passage—and I hope I have explained it in accordance with the text so that it is comprehensible and I have not muddled the matter—is that departments in Whitehall, when confronted by the proposition that there should be either an external negotiation or an internal directive which could therefore bring about the transfer of external treaty-making powers as well, should just bear this in mind; they should consider—and I am not sure that I entirely agree with the noble Lord, Lord Banks—not only the specific objectives that the negotiation or the proposed directive itself may have in mind, but also consider the implications, because it is with the lead department in Whitehall that the responsibility primarily lies to consider whether there should be a matter of competence raised at all.
I would suspect that the main achievement of this report, in addition to raising the question of Parliament's scrutiny of international treaties at earlier stages than has been possible hitherto, will be to draw attention to all lead departments in Whitehall that this issue of comptence is a potential matter for consideration on every occasion. Probably in most cases it will not matter, but it is nevertheless something that appeared to me, listening to the evidence, not always to have been taken into account as being anything of enormous importance.
I believe, in view of the ability to interpret these articles in one way or the other, that it is something on which advice should be taken if necessary, and on which an opinion should be clearly formed before our officials and our Ministers go into the decision whether or not to support one of these measures, whether it is internal or external.
Without making too much of a fuss about it, and without suggesting that it is any sort of threat, I believe it is really an issue. It shows how dynamic the Community is becoming both in its own political institutions and in the court and the way the court interprets the treaty judicially. To that extent, I believe that this report may have drawn attention to something which is quite important and which will certainly go on developing, as does the Community.
7.3 p.m.
Lord Denning: My Lords, this report deals with a matter of great constitutional importance. I should like first to express our gratitude, as your Lordships will, to my noble and learned friend Lord Templeman not only for his conduct, his chairmanship of the committee—you can see how he examined those witnesses and got them to deal with the points—but also for the report which covers so many important fields. It points out not that perhaps things are going wrong at the moment but that there are dangers, difficulties, and defects lying ahead which must be taken into account by the Government and their departments.
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Perhaps I may just draw attention to those troublesome words, "external competence"—very forbidding they were when one read them—as distinct from "internal competence". "Internal competence" means the Community law of Europe as applying to all the member states of the Community, whether it is nine, 10, 12 or whatever it may be. The internal competence is the community law applying internally to all those states of Europe.
The external competence is when they make treaties. The Community as a body—it is a person; it is a body—can make treaties. It can make treaties which bind the members. The terms of those treaties are directly enforceable in the national courts. Not only that, they take precedence over any of our own laws or treaties which may be in conflict with them.
May I first consider—because the principles apply afterwards—the principles applying to our internal competence. They have been developed by the European court, perhaps in an extended way. There is first the principle of what I may call direct applicability. That is best illustrated by a case from Belgium.
Under the treaty there is to be equal pay for equal work as between men and women, and that is to be implemented by the states' own legislation. Belgium did not implement it. A Belgian air hostess complained that she did not get as much pay as the steward on the plane although they were doing the same work.
There was no remedy in the Belgian courts at that moment because they had not legislated upon it. She went to the European court at Luxembourg. They said that she was entitled to equal pay for equal work. She was entitled to enforce it, and the Belgium courts had to enforce it even though they had no legislation upon it. That is called the principle of direct applicability.
The other principle which has emerged in regard to internal competence at the moment is that the Community law has supremacy over our own internal law. We had a statute which differentiated between men and women in a bank according to their pensions. A lady took the case to the European Court at Strasbourg, and they said that the treaty position took priority over our own statute. Therefore, Community law has priority even over our own statute law. That is the other principle of the supremacy of Community law.
Now I turn to external competence. There the European Court at Luxembourg has applied these principles. If the Community makes a treaty on behalf of the members, that can be directly applied by a citizen in England taking a case in our own courts. It is directly applicable. The committee point out that there are dangers ahead in that development.
Not only that, but if the Community as a whole makes a treaty with others, that excludes any power in us, in our own Crown, to make a treaty on the said subject. That may be called the principle of supremacy in external affairs. In coming to these decisions the European Court has applied methods of interpretation which we would not countenance at all in our courts. We go by the letter of the statute, or the treaty if it comes in.
I am afraid—but it is the Continental policy—that they look at the policy behind it. They do not look at

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the words so much. Through all these cases which we are considering you will see that they have construed the treaty and its meanings in a rather expansionist way. Expanding according to policy. If one looks at it fairly, it is according to what they think it ought to be; namely, a unified Europe. General laws; treaties to be negotiated—it may be quite right—by the Community on behalf of all. A material question may come before us before long.
Your Lordships will remember that we debated years and years ago a very important report on the Law of the Sea Convention. Year after year the nations of the world have been trying to agree on what the law of the sea should be; whether the territorial waters should be 12 miles, or economically they should be 200 miles or whether the deep sea beds should be international. This was a most important convention ratified by many countries, but not by the United Kingdom. This is considered in the report. It is possible for the European communities themselves to ratify this by a majority without the United Kingdom having ratified it. My Lords, what would be the effect of that? Goodness knows! The European Court or some other body may pronounce upon it later. The report shows that there will be difficulties of delimitation of the powers within the Community and what is left of the powers of the member states.
I have spoken of the dangers and the difficulties, but the defect to which the report draws attention in its last paragraph is that there is no effective machinery at present for scrutiny by this country or its committees of the treaties which are being negotiated in the Community. In our internal law we have the directives being scrutinised by the Committee but at the moment as the report says in almost the last paragraph such treaties go through with a rubber stamp. The report says that that is inadequate for our present system. That has been referred to by others.
I draw attention to these points to show your Lordships that the committee have considered matters of great constitutional importance. They have drawn attention to the whole subject, quite rightly applauding what has been done up till now, applauding agreements within and with all the officials in Brussels and here about what is being done; but warning them of the dangers, the defects and the difficulties. Those are matters of which I am sure Her Majesty's Government and those advising them will take full note because this is a most valuable report and those points should be drawn to the attention of others in the negotiations. We are much indebted to my noble and learned friend Lord Templeman and all his colleagues for this most valuable report.
7.13 p.m.
Baroness Elles: My Lords, the report on the external competence of the European Community goes widely and deeply into the many problems that arise in this new position of the Community in relation to its treaty-making powers. I should like to express my gratitude to the noble and learned Lord, Lord Templeman, for all the work that he has put into it. I thank him, too, as I read through the report, for the courteous way in which he dealt with the many Commission and council officials who came before him and who tried their best to give a true account of
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how they saw the problems which arise. It was the questioning of the chaiman of this committee that brought out so many of the difficulties so clearly. We should be grateful, not only for the general tenor of the report but, in particular, for this. I pay tribute to the many officials who came from Government departments who again took a pragmatic view of the work they have to undertake on behalf of this country. I think they came out of this evidence with full credit, and I mention that by the way.
I mention also—the noble Baroness, Lady Serota, touched upon this—the great attention and concern with which reports from your Lordships' House are read in the Community by the Council of Ministers, the Commission, the officials and members of the European Parliament. The very high standard of the reports is highly regarded. I know that this report was read with the greatest concern by all those in whose hands it happened to fall.
Your Lordships have touched on many of the aspects contained in this report, but I shall confine myself mainly to paragraphs 62 and 63 of it, and to paragraph 82, which comes under the "Summary of Conclusions". Those three paragraphs refer mainly to the role of the European Parliament. This is something which could be elaborated on a little further, as it might have given rise to some misunderstandings.
First, we must assume from everything that has been said and from the content of the report that we all believe in the necessity for some form of democratic control over the acts of the executive, whether they be national or European. There must be some form of democratic control, and I think this is recognised, particularly in paragraph 84 with regard to the scrutinising powers of national governments. This is a concern which must affect us all either as Members of your Lordships' House or as members of the European Parliament. As has been said, under the Treaty of Rome and in accordance with the European Communities Act 1972 certain competences were transferred from national governments to the Community, so that the Community now has exclusive competence for participating generally in the conclusion and for overseeing the implementation of treaties which have been drawn up as a result of competence under Articles 113 and 238, in particular.
But also there are certain areas of international treaty law which not only affect the Community but give certain competences which remain with member states. I shall touch on this later. Even under Article 113 members states have access to and participate in negotiations to some extent in and through the special committee, which has representatives of member states advising during the whole of the process of negotiation. But it is the Commission which is responsible for negotiations on a mandate from the council. It is at the stage of the mandate from the council and before the mandate of the council is given that I should have thought national Parliaments should be exercising their scrutinising powers, should a mandate be given by the Council of Ministers, on which there is a representative from every member state government, to proceed with such negotiations. Once that mandate is given we must recall that some of the treaties are concluded by a qualified vote or a majority vote, which means that a member state may

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have lost all control of such negotiations by the time they are concluded.
While the committee clearly shows concern for the role of national Parliaments in this process, it is only the European Parliament which has the procedural and constitutional ability to scrutinise the Commission and the council. Even if national Parliaments can question their own Minister he is, after all—I have the greatest respect for our Foreign Secretary—only one out of 12 Ministers. So the European Parliament remains the only democratic forum which can scrutinise by the normal democratic procedures—that is, by questions and debates, and so on—both the presidency and the office of the council, which represents the 12 member states plus the Commission.
The European Parliament is by its nature the only body that can excercise this role. The European Parliament does not only have the obligation to scrutinise executive and administrative acts, but also has to be responsible to its electors for the financial implications. It is difficult to imagine, certainly commercial trade agreements, and of course many of the association agreements into which the European Community enters, which do not have financial implications. The European Parliament is one arm of the budgetary authority, with regard to the Community budget, to which I am referring, and there these implications would arise within the terms of budgetary discipline and budgetary decisions.
Furthermore, at the end of the day, it is only the European Parliament that can give the budgetary discharge to the Commission concerning expenditure that has been incurred during the course of a budgetary year. Thus, of course, the implications that might arise, particularly on the financial side, from negotiations that may be entered into by the Community, are of concern to the European Parliament. So, unless the European Parliament exerts this scrutinising role, there could be what is commonly known in our jargon as a democratic deficit: that there would be no democratic control over the treaty-making power of the Community.
This is a particular point to which I wish to draw attention of your Lordships. It has been accepted by this report that the national Parliament appears, at any rate, to have but a very little role in the scrutiny of these treaty-making powers of the Community, and it is only by the European Parliament successively trying to get more control in this field that there is any scrutiny at all. Until the so-called Luns-Westerterp procedure was initiated with regard to Article 113, there was no control democratically of any kind at all over the trade and commercial treaties which were being entered into by the Community.
I should like just briefly to comment on paragraph 63. As I have indicated, successively the role of the European Parliament has been enhanced by better relationships between the Commission and the Council. As a result of the Stuttgart declaration of 1982, the Parliament is now to be consulted on all major significant international treaties. However, with regard to the veto, I know that the evidence that was given to your Lordships referred to internal rules of the Parliament, but I am not certain whether it could ever be that the Parliament could exercise a veto on a
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Community treaty-making power. The internal rules of procedure of the Parliament refer specifically to Commission proposals to which amendments may have been made by the Parliament.
The two points to be made here are, first, that the Parliament can only delay the vote. It can suspend the vote for a month or two months, as it did, for instance, with the draft Vredeling directive that came before it two or three years ago. But it cannot actually veto and refrain from giving a vote for ever. Secondly, of course, it can pass or adopt a resolution which may disagree with some negotiating terms or as to whether a treaty should be concluded. Regrettably, I must point out, even as a Member of the European Parliament, that the Parliament is only being consulted, and of course there is no obligation whatsoever by the Council to take any notice of what the European Parliament says. The Parliament could vote for a resolution against the conclusion of a treaty but, as I say, there is no obligation that the Council should take any notice of that.
There are only two occasions of which perhaps I may give brief examples to your Lordships. One was on the question of the EEC Turkey association agreement, where the Parliament voted by a majority not to renew and not to resume relations with Turkey under that association agreement, and that advice happened to be followed. Secondly, quite recently, since the Council of Ministers now discusses with the Parliament the question of accession treaties under Article 237, although of course it is not within the treaty that we should be consulted, we had very close discussions with the Council of Ministers in the shape of Signor Andreotti, who was president of the Council at the time, and the only point about which the Parliament felt very strongly—and it was a specific parliamentary matter—was that members coming to the European Parliament from Spain or Portugal should not remain unelected possibly until the next direct elections to the European Parliament, which would have been in 1989. Since this discussion took place before the signing of the accession treaties, a provision has been entered whereby Spain and Portugal have undertaken that within two years of entry into the Community their members will be directly elected to the European Parliament.
Those are the only two cases that I know of where, specifically with regard to accession agreements, the Parliament's advice or request has been met, and with regard to association agreements where some resolution was adopted which was against renewing an association agreement. Broadly speaking, as I say, we are only consulted and it is up to the Council of Ministers either to take that opinion or not.
The noble Lord, Lord Banks, referred to the so-called Luxembourg reform package. If it was to go through, then the position of the European Parliament would indeed be changed because under new proposals in that so-called draft Act, as it stands at the moment, it is proposed that the European Parliament should be given the right, both under Article 237, with regard to accession, and Article 238 with regard to association agreements, to assent by a majority of its component members to proposals for ratification of a treaty. Of course, this radically alters the position of the Parliament, so it is no longer just being consulted:

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it would be voting on whether or not to accept ratification of a treaty. As we know, this is not yet in force. It will be a matter for the Danish Government, as we know, to decide whether to sign this agreement. This is an agreement which will undoubtedly be debated in both Houses at Westminster before it is ratified. At least, I should imagine that there will be an opportunity to debate this very important document which is awaiting a signature.
I wish just to comment on the certain kinds of treaty such as the Lomé Convention, where both the Community and member states are directly involved. As your Lordships know, in this particular convention, which is a relationship between the 12 Community countries and about 68 African, Caribbean and Pacific countries, there are tasks which are allocated to the Commission, such as the management of food aid, and there are tasks which remain within member states' competence, such as the organising of buffer stocks. These are very real problems. It is in such areas that I certainly should hope to see a much closer co-operation between the relevant committees of the European Parliament and the Departmental Select Committee of another place and possibly the Scrutiny Committee.
This is much more a matter for on-going management and exchange of dialogue than one where a member should be invited to come and give evidence, such an invitation as your Lordships so courteously extend to Members of European Parliaments from time to time at your own subcommittees and your own Select Committee. However, I rather feel that in this case we might perhaps be considering some kind of way in which perhaps the senior members of the relevant committee of the European Parliament should from time to time be in dialogue with the Select Committees of another place in order precisely to discuss these kinds of problem, where the competences are divided but are extremely important.
In conclusion, I should say that there is a need for the work of the European Parliament to be extended, in so far as it scrutinises the administrative acts of the Commission and the political decisions of the Council of Ministers. As we all know, even these commercial treaties which look as though they are dealing with some quite abstruse matters, in fact affect the rights of individuals. I, as a member of the European Parliament elected by the citizens of this country, have a duty to protect the rights and interests of individuals who elect me to represent them in the European Parliament.
Therefore, I hope that your Lordships will agree that, although the European Parliament is sometimes represented in the popular press as an irresponsible body, it is not such an irresponsible body as many people like to think. It does a good job. It has a task to do. I should hope that your Lordships will give full support to the work of the European Parliament in the task of trying to scrutinise the work of the Commission and the Council in relation to the external competences of the Community.
7.30 p.m.
Lord Beloff: My Lords, a couple of weeks ago I was asked by the Foreign and Commonwealth Office and
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the Central Office of Information to take part with some Oxford colleagues in briefing a number of American journalists who were making a tour of Europe. They had already visited, I believe, Italy, the Federal Republic of Germany and Belgium; and this country was their next port of call. One of the first questions we were asked by this party of journalists was this: "We have been to several European countries and have asked them about the EEC, the Common Market; and we get very optimistic, up-beat replies. We come to Britain and immediately we get downbeat replies and criticism. Why?"
The answer I gave, as noble Lords may expect, is that by now, except in very specialised quarters, the original gilt has come off the European gingerbread, the countries look to the institutions of the Community for what they can get out of it. The group had been to countries which, on the whole, believe that they have done well out of the EEC, and perhaps rightly believe that they have done well out of it; then they came to a country which is still uncertain as to whether the pluses outweigh the minuses. I do not believe that their tour was going on to Denmark, or they might have found an even greater set of queries.
What I believe is the case, however, is that in some quarters in Europe—and it applies of course to nationals of this country—in the Commission and in the European Court and, in a rather different way as I think my noble friend Lady Elles has just pointed out, in the Parliament, they are anxious to increase their powers and authority and will go on using the treaty in every way they can as a basis for extending that authority. As I believe I pointed out in your Lordships' House when we debated the proposed Act of European Union, they do this the more eagerly the more they are frustrated about their ability to attain the original objective of a Community which was the creation of a genuine European common market.
It seems to me that it is only if we realise the degree of pressure that exists for perfectly honourable reasons—and those concerned are disciples of Jean Monnet—to extend the area of competence of the European institutions that this particular matter (which was the subject of the report of the subcommittee) can properly be judged. This is because it has been laid down by the court, as was pointed out by the noble and learned Lord, Lord Denning, in another connection, that there are possibilities of the direct application of Community law, that treaties make law and that therefore the treaties can be used to extend competence even in areas where it is not by any means clear that the treaty allots to the Communities that kind of competence.
There is, as my noble friend Lord Colville of Culross pointed out, some difference between the legal advisers to the Commission, on the one hand, and the Council, on the other, as to the legal method or the legal argument by which some of this activity can be sustained. But there is no difference between them, as we point out in paragraph 23 of our report, about the fact that in judging the question of competence they can look at the broad objectives of the Treaty of Rome rather than—as we would: and as I am sure the noble and learned Lord, Lord Denning, would—at what the treaty actually provides.
We pointed out that their enthusiasm seems here to run beyond the decisions of the court upon which they

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in part rely. I would not dissent from the view of the sub-committee that at the moment no disaster has taken place as a result of this extension of powers. But, as other noble Lords have pointed out, there is a series of precedents being set which at some moment might bring us up against a derogation from the sovereignty of our own Parliament to which we would otherwise not assent.
I would point out to your Lordships, if I may, that the representative of the Foreign and Commonwealth Office whom we examined specifically used the analogy of the American constitution, the American federal system, as a justification for the use of treaty-making powers as a source of law. And the same argument was put forward by a learned professor of law, Professor Francis Jacobs, in his evidence, both written and oral, to the committee. It seems to me that if you are going along that path, you are going a great deal further than we undertook to go when we signed the Treaty of Rome. We did not imagine that we were going into a federation, least of all, a federation whose courts could rely upon the often extremely general language of the treaty itself.
Like, I think, my noble friend Lord Colville of Culross, I disagree with the noble Lord, Lord Banks, in his feeling that the officials of the government departments here were perfectly right in dismissing the question of competence as one which was a matter for the lawyers of the Commission itself. I may say as a non-lawyer, as a token lay person on this committee, that I was very shocked at their apparent indifference to competence; because what this indifference means—and if it were extended to our domestic departments we should be very worried—is that a department may do anything if it thinks it is a good thing to do, whether or not the powers to do it are actually conferred upon the department by statute or in any other way.
I was even more shocked that the learned professor seemed to give his adherence to this extremely dangerous doctrine. I would say in defence of Whitehall—not a role I often assume—that other government departments, notably the Revenue Department and the Home Office, when questioned, said that the question of competence is one which they would certainly look at when proposals came before them.
To my mind there are always phrases, there are always words, which sound a bell of alarm. I thought that this came in the evidence of the Director General of the Legal Services of the Commission—and I agree with my noble friend Lady Elles that they were extremely helpful and courteous in their submissions—said that what you needed in order to interpret Article 113 about the scope of commercial negotiations was a more philosophical approach. Whenever I hear the phrase, "a more philosophical approach", I believe that someone is trying to get round the letter of the law.
I think people may feel that these anxieties are a little far-fetched, but again the learned professor, Professor Francis Jacobs, said he could see the time coming when the Commission of the Community might extend its competence to the field of education, because it already had the right to intervene to assure proper provisions for the education of the children of
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migrant workers. This does not seem to me an area in which we have contemplated abrogating sovereignty.
The general reply to those who, like myself, express worries is, "No matter", because in the last resort in most cases, though not in all cases, as the noble Baroness, Lady Elles, pointed out, unanimity is required in the case of a treaty and therefore our own Ministers have the last word. But it seems also that if they are to exercise this restraining power, the assistance of Parliament ought to be welcome to them; and it seems to me to be difficult to resist the view that there is no obvious reason why, when we receive proposals or draft proposals from the Communities for legislative action, we should not also at that stage receive any draft proposal for entering into negotiations—subject of course to all the normal caveats about confidential information, giving away one's negotiating hand, and so forth.
I may say I am not inclined to the view that we could, however, in our own Parliament emulate the kind of contact which appears to exist between the Commission when it is negotiating a treaty and the European Parliament. As we understood it from the evidence, and set out in the report, this is done by informal and oral discussions with the relevant committees of the European Parliament. I cannot myself see how we could, in a very different kind of Parliament, assent to discussions of this kind: informal, oral and presumably unrecorded. It seems to me that would lead to an almost endless vista of argument and I am surprised that has not so far happened, if this is indeed what normally goes on in the European Parliament.
Therefore it seems to me that we have really only one serious point on the questions which are within our own power—that is, parliamentary procedure—to put to Her Majesty's Government; namely, that it would be helpful at least if we could know about the Community's intentions in the sphere of treaty-making as we are informed about its intentions in regard to internal legislation.
For the reasons that I have given, the powers that are present or claimed for treaty-making are so important and could add so much to the competence of the Communities that this seems to me to be a precaution which a wise Government in the United Kingdom would readily embrace.
7.44 p.m.
Lord Broxbourne: My Lords, this Committee, cujus minima pars fui, was indeed fortunate in the high quality of its chairman, and the noble and learned Lord has given further examples of that high quality in the speech which he made to your Lordships today. We were also fortunate in the high quality of our legal advisers, to whom again he has fittingly paid tribute. We were fortunate, too, in the quality of the expert evidence that we were able to hear, not only from representatives of the major Government departments in this country but from the Council and the Commission, in the distinguished persons of Dr. Glaesner and Dr. Ehlermann, both of whom I hold in high personal regard although, like my noble friend Lord Beloff, I do not always or necessarily agree with them on all these matters.

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This is a complex technical subject as well as an important one. But three basic factors, I would think, lie at the heart of the matter. First, in an economic community of nations, seeking to operate in unison for the common economic good, the power of the Community to enter into such commercial treaties and agreements is reasonable and to be expected, provided always that it is done in a constitutional manner. Secondly, as your Lordships know, there are express provisions giving such power contained in Articles 113 and 238 of the Treaty of Rome. Thirdly, this external confidence is exclusive: that is, it passes in toto to the Community and deprives member states of the power to enact internal laws conflicting with those obligations. It is this third factor which gives rise to the important constitutional implications so properly recognised in this report.
There are two particular respects from the point of view of a national Parliament, and in particular a legal committee thereof, which give rise to concern and which require attention. First, there must be consideration of the means whereby Parliament can seek to ensure that proposed agreements are properly within the scope of Community competence, as expressed in the provisions of the Treaty of Rome; and, secondly, consideration of the adequacy of the machinery to enable Parliament to discharge its functions and to supplement it where necessary or desirable. The first matter raises the question of vires, and the second that of scrutiny.
As to vires, although it is reasonable and no doubt beneficial for the Community to exercise powers of external competence where a treaty so provides—that is basically in accord with Articles 113 and 238—it is also proper and equally important to confine such exercise within the treaty powers. This is of great constitutional and practical importance because the exercise of such powers, as I have said, excludes the exercise of similar powers by member states, exercising a national jurisdiction: that was a point so well made by the noble and learned Lord, Lord Denning.
The constitutional position, I would think, is clear. In the course of the proceedings I put this question to the Foreign Office witness (Question 24 on page 14 of the evidence):
"Is it not the case that even in the European Economic Community the question of vires has to be dealt with before questions of policy can arise? As a matter of policy, the Council cannot take powers which are not given to it by the Treaty. That is clear, is it not, from Article 4: 'Each institution shall act within the limits of the powers conferred upon it by this Treaty'? That is the basis of the Community structure, is it not?"
The witness said, "I agree". We have to be particularly watchful of the use sought to be made of Articles 100 and 235, the ones relied on for an implied power to extend the activities of the Community beyond those for which express provision is made in the Treaty of Rome. The reason, of course, is that the extension of Community jurisdiction into spheres not contemplated by the treaty or authorised thereby involves a corresponding diminution in the sovereignty of national Parliaments.
Of late, there has been a tendency to regard Article 235 as a sort of Open Sesame provision and increasingly to invoke it to justify Community
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legislation in wider spheres—a tendency fortified by the thinking and aspirations of the authors of the Spinelli draft treaty on European union, with its federal implications. Left unchecked, this use of Article 235 in the context of external competence, and indeed well beyond it, could drive a coach and horses through the articles of the treaty itself, the basic philosophy accepted by member states on adherence to the Community.
How, then, can the jurisdiction and actions of the Community in this regard be monitored and controlled, and how can our Parliament usefully contribute to this end? That brings me to my other point—that of scrutiny. The procedure for scrutiny is dealt with in paragraphs 65 to 67 of the report, and is summarised in paragraph 83. That summary states:
"In connection with treaties two proposals are usually submitted by the Commission for action by the Council, one for the opening of negotiations and the other for conclusion of the agreement. Usually only the latter is submitted for scrutiny by the United Kingdom Parliament".
This is a matter which has been expressly referred to by the noble and learned Lord, Lord Templeman, and by the noble Baroness, Lady Serota, and we are looking forward with interest to the responses to the questions that they have specifically put.
The position is obviously unsatisfactory as it stands, and is so recognised in the report. Her Majesty's Government should press for an amendment of these procedures whereby, as the noble and learned Lord has said, the information extended to our Parliament should include the opening of negotiations, thereby giving the opportunity for comment and suggestion at the formative stage of the proposals. This would bring the British Parliament closer to the position of the European Parliament in this regard.
My noble friend Lady Elles has referred to the position of the European Parliament, with all her distinguished experience of these matters, and it is set out at paragraph 62 of the report, to which she referred. I respectfully agree with my noble friend Lord Beloff. We cannot altogether share the position of the European Parliament in this, because their position derives to some extent from the ambience in which they operate, the geography of the matter and the personal relationships which they and their committees have with the Commission.
I do not grudge the European Parliament their privileges in this respect. I retain an affection for the European Parliament but, of course, it has changed a good deal since the days of my membership. It has changed in one very significant respect, in that the links between national Parliaments and the European Parliament are now more tenuous and less effective than they were in those days. I see my noble friend Lady Elles nodding assent. I hasten to say that there continue to be some valuable links, not least in her charming person.
But we should be giving consideration—and this in the wider context, and not today—to strengthening those links in some of the ways she suggested just now, and certainly in getting a closer rapport between the members of the national Parliaments and the European Parliament, now that those links have weakened. The privileges of the European Parliament, which as I say I do not grudge them, are no substitute

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for similar provisions in national Parliaments. On the contrary, they are a reinforcement of the need for us to have powers of scrutiny here, not perhaps on all fours, for the reason I have given, but certainly more effective than at the present time.
Therefore, I conclude by saying that my submissions in regard to vires, with special reference to Article 235, are endorsed by paragraph 26 of the report and my submissions in regard to scrutiny are endorsed by paragraph 72. I hope my noble friend the Minister will be able to tell us that they are also endorsed by Her Majesty's Government.
7.56 p.m.
Viscount Dilhorne: My Lords, I propose to concentrate on those aspects of this report which seem to me to be of special concern for practising barristers and lawyers; in particular, the impact which the conclusion by the Community of international treaties can have on the law of the United Kingdom upon which barristers have to advise their clients. I shall be focusing on a very small part of this report—Part 3 in particular—which deals with the effect of the Community treaties on member states.
Under Article 5, which is in very strong terms, member states like the United Kingdom,
"shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of the EEC Treaty or resulting from actions taken by the institutions of the Community."
The text continues:
"They shall facilitate the achievement of the Community's tasks. They shall abstain from any measure which could jeopardise the attainment of the objectives of this treaty."
That is a very broad article, covering a number of activities binding on this country.
In the normal course of events, looking at the United Kingdom in connection with treaties negotiated by the United Kingdom, as we all know Parliament is normally asked by Her Majesty's Government to pass legislation needed to give effect to its treaties in terms of United Kingdom law. The rights and the obligations relating to private individuals which result from such treaties are contained in precise terms in easily identifiable and readily available legislation. Perhaps that is a view that may not be shared by my noble friends on the Front Bench or by noble Lords opposite. But suffice it for the moment to be there. The lawyer advising his client can find the law in a familiar form in this sort of legislation. He can ascertain how it is likely to affect his client's affairs, because the law is expressed in a form appropriate to regulate relations between different legal persons within the United Kingdom.
In contrast, treaties concluded by the Community can be given effect by specific legislative enactments, though in this case Community legislation, such as regulations or directives, may be enacted in place of United Kingdom legislation. The text of those regulations or directives is rather harder for the practitioner to understand than our own laws, but they do not present, so I understand, too insuperable a problem. But that is not the only way a treaty concluded by the Community can become law in the United Kingdom.
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Perhaps I may now direct your Lordships' attention to the Select Committee's report at paragraph 39, on page 15, headed "Direct Effect". In part it states:
"Under a doctrine developed by the Court, certain provisions of treaties concluded by the Community can have direct legal effect in Member States, without the enactment of any implementing measures by the Community or the Member States".
The doctrine applies to all the formal acts of the Community institutions and stems,
"from the notion that all the Community Treaties, legislative instruments and other formal acts of the Communities constitute a new legal order for the benefit of all citizens of the Community".
It is that principle, which was established as long ago as 1963 by the European Court in the Van Gend en Loos case, to which the noble and learned Lord, Lord Templeman, referred at the beginning of the debate, which enables individuals in certain circumstances to rely directly on Community provisions and even, where necessary, to disregard conflicting provisions, perhaps hallowed by time, of their national law.
This doctrine of "directly applicable law" applies to treaties entered into, as we know, by the Communities because they are "formal acts" of the Community. There can therefore be provisions in a treaty concluded by the Community which, without any further enactment, create rights and obligations enforceable in the courts of the United Kingdom. An important consequence of this is that a practising lawyer can no longer, with confidence, advise his client solely on the basis of existing Community law or of existing United Kingdom legislation and case law. He must ascertain whether there is a relevant treaty in force which has been concluded by the Community; and if such a treaty is in existence he must then discover whether the relevant provisions of that treaty are of the kind that make "directly applicable law".
This begs the question: what makes a provision in such a treaty "directly applicable"? The European Courts have given an answer to this question, and that answer is given in paragraphs 39 and 40 of the report. The treaty provisions,
"must be clear and precise so that the rights and obligations arising from them can be recognised and identified with accuracy; they must require no further elaboration or implementation by an institution of the Community or by Member States in order to render them operative; and they must be unconditional, leaving no discretion to Community institutions or Member States".
Paragraph 40 states that it must be clear from the context of the agreement that direct legal effects are intended and are required for the treaty to operate satisfactorily.
These tests are helpful, but the practising lawyer still faces difficult and serious problems. He needs to be aware of the existence of a legal instrument, a treaty. This is not of the kind he normally deals with since its terms govern the relationships between countries. He has to form a view, by applying the tests I have just recited, on the direct application of the terms of the treaty or at least some of them. This is not at all an easy task. The report at paragraph 42 recognises that such a doctrine introduces an element of uncertainty into the law of the member states which could produce unjust results. The position is aggravated by the fact that the directly applicable treaty provision may sometimes conflict with the United Kingdom's national legislation.

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The lawyer therefore faces the difficult choice of advising his clients to comply with the law of the United Kingdom, or to disregard it and instead to rely upon a treaty provision which may overrule that law. I hope that I am not exaggerating the point (for it really should not be exaggerated) but the Select Committee report notes that the European Court has so far,
"only rarely accorded direct effects to treaty provisions",
and then only to enable individuals to enforce the obligations undertaken by the state concerned under the treaty. I refer of course to treaties like Yaoundé and Lomé, to which my noble friend Lady Elles has already referred.
However, it remains to be seen whether this doctrine can be applied in relations between private individuals. Even if this doctrine applies only in relations between states and their subjects, it represents a serious problem for practising lawyers, and it seems to me to be appropriate to highlight the reservations expressed on it in the report. The report says at paragraph 42:
"It seems to the Committee that this doctrine of direct application of treaty provisions does not fit necessarily, or even comfortably, into a structure where the Community is the party to the treaty and the Member States are not themselves parties, but only bound by the treaty in consequence of membership of the Community. The Committee consider that it would be more satisfactory"—
—and I am sure it is undoubtedly true—
"for obligations always to be translated into specific Community or national law."
Finally,
"the position would be markedly less satisfactory if the European Court were to hold provisions to be of direct application where they create rights and obligations between one citizen and another".
It seems to me that it would not be unreasonable to express the emphatic hope that the European Court will never do so. The noble and learned Lord, Lord Templeman, in closing his address, said that some of us were ably assisted through the thicket. I was ably assisted, yet I still feel that I am in the midst of the thicket; but that is entirely my fault.
8.8 p.m.
Lord Kennet: My Lords, I feel that I did not really know that the thicket was there until I read this report and having been in one move introduced to it by the report and taken at least three-quarters of the way through, I should like to start by expressing more than usual admiration for one of the products of the subcommittee of our European scrutiny committee.
The report in its modest way is not only important but is even almost sensational in the extraordinary clarity with which it sets out a matter which though not simple is equally not tremendously complex and which nobody really knew about. I do not know whether other former members of the European Parliament now present will share with me the feeling that I had on reading the report. I sat in that Parliament for many months and years and tried to see the wood for the trees. I did not find it at all easy to do so. That was no doubt more by my fault than by the fault of any institution which was seeking to blindfold me. Now, thanks to the report, it is a great deal easier to see just what is happening. I believe that the report and also the speech of the noble and learned Lord,
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Lord Templeman, in introducing the debate, are material to put on the bookshelf quite close to one's left ear, to turn to on future occasions of doubt and perplexity.
I wish to mention two minor points before the major one. On the question of confidentiality, the report, and the noble and learned Lord, Lord Templeman, and other noble Lords, have said that they want this Parliament to be fully informed of what the Community is up to in its treaty-making function within the bounds of confidentiality. The report then uses some rather generous phrases about that, implying that if a matter is declared to be confidential, then it need not be reported to the parliament—at least not on the first of the two occasions when a report is made.
It seems to me that it should not be too difficult to report the mere fact of the intention to open a negotiation with some third country to national parliaments. Let us suppose that the Commission and the Council thought it would be a good idea to have, say, a fisheries agreement with Mongolia. There can be nothing confidential in revealing to the French, British, German, etc, parliaments that they think that such is desirable and even the reasons why they think such is desirable—or even in revealing—shall we say?—that they propose to go about it by trying to negotiate catch quotas, rights of access to certain stocks, and so on and so forth. There is nothing confidential there. What would be confidential would be what they proposed to ask for and what they proposed to settle for if they could not get what they asked for.
One could reveal everything that was of political significance or of major economic significance while yet retaining the negotiating details in a way that is done normally by every government in the world towards its own parliament. So I hope that our Government and other governments will not be too overawed by the necessity of preserving European confidentiality in such communications, which we must increasingly expect. The purpose of my remark is to endorse what the report says about that matter but not to worry too much about the confidentiality aspect.
The noble and learned Lord, Lord Denning, introduced what is perhaps the hottest case of matters that fall between the two treaty-making stools of the Community and the member nations at the moment—or soon will be. I speak of the international convention on the Law of the Sea. We know little about it in this country; but we know that the Council of Ministers of the Community have discussed whether or not the Community as such should sign, accept and ratify that convention. If they do so, it will be on behalf of their member states, as we have been discussing all evening. They would do that only in respect of those areas of the convention where they have competence. Britain has not ratified; we have declared our unwillingness to ratify the convention on the Law of the Sea. What happens if the Community does so? I hope that it may be possible for the Minister of State to say a word about that matter this evening.
We have been hearing—and the report makes it rather clear—that the action of the Community would

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override our own national unwillingness to ratify the convention and would make us parties to that convention, at least in certain respects. How will that look on international legal paper? Can one take a pair of scissors to a United Nations convention and chop out certain parts that one has been made to ratify willy-nilly by a regional, quasi-supranational organisation such as the Community or not? If not, then what does happen?
Politically, I hope very much that the Community will ratify that convention in so far as it is capable, and that the Government will, without too much bad grace, accept the decision of the larger democratic Community of which it is part and will join the rest of the civilised world, the rest of their partners in the Community, the rest of their fellow members in the OECD, and the rest of their fellow members of the Commonwealth—make the best of a bad job, and accept that important international convention.
I come now to my major point. What is at stake here and what should we worry about? I believe that we are too much used by now to dividing along the lines of Europeanist or nationalist and saying that we must be careful not to infringe the time-honoured powers of this Parliament in Westminster, or that we must hurry up and pass as much as possible from this Parliament, which, however time-honoured, is only national, to the new Continent-wide Parliament in Strasbourg.
I do not think that that matters very much. There is a far greater principle at stake—that is, democracy itself. It seems to me that by far the greatest danger lying in those competing competences is the danger that a given area shall fall to executive decision without any democratic control at all and fall between two stools—between Westminster and Strasbourg. There are some hair-raising examples given in the report of cases where that has very nearly happened. There are other examples—less hair-raising perhaps—where it has happened.
To remind ourselves of the potentialities of irresponsible executive action that lie within the machinery of the European Community, it is enough to remember that about 10 years ago a couple of Italian bureaucrats with the Commission were on holiday in Italy. They looked down on a crowded beach and said, "If Europe can't do something about the disgusting state of our beaches, then it does not deserve our membership of it." So they drafted a Commission Directive to say that nowhere on the coasts of the European Community should there be found at any time of the day or night more than 15 persons for every 100 metres of beach.
Those bureaucrats were very pleased with themselves and introduced that Directive, and they took it a certain distance before anybody got around to pointing out that such a Directive was hardly necessary between Cape Wrath and Wick; and was hardly possible anywhere; and that it was in any case beyond ridicule. It seems absurd to mention such a case, but there are others of a more sophisticated kind always in the pipeline of the Commission. I was amazed in the European Parliament to catch sight of them flashing past; they were almost always sat upon.
I believe that what should guide us and Members of all Parliaments, both national and European, is the
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fear that by any action we take, by any negligence of which we are guilty, we may enlarge the possibility of irresponsible executive action and reduce the area of elective democratic control.
I would say to those in the Council of Ministers, and through them to the Commission—if they ever read the House of Lords Hansard, which I have reason to believe many of them do—that the more they in the Council and the Commission seek to keep the European Parliament at arm's length and to deny it a de facto increase in its powers and influence, the more they make it inevitable that the national parliaments will wake up through national reports—I hope as good as this one—to the fact that there is an area between the two stools; and the more national parliaments will try to regain national control of areas that are at present under European control but are not democratic, on the grounds that there is no democratic control. They will be justified in trying to do so. If they do so, they will simply de-Europeanise the situation to that extent. They will turn it into national fractions once again, with all the reinforced authority of an assembly that has regained a lost power as opposed to that of an assembly that is seeking to gain the corresponding power for the first time. That could be a sinister development for those who want to see more and more pass into the European bucket.
Therefore, I again congratulate all the members of the sub-committee, and of the European Committee, on this outstandingly good report, in a good run of reports. I hope that the Government will, above all, pay attention to ensuring that democracy comes in somewhere.
8.20 p.m.
Lord Cledwyn of Penrhos: My Lords, may I first of all congratulate the noble and learned Lord, Lord Templeman, and the other noble Lords who sit on Sub-Committee E, for this most impressive report. The House is also grateful to the noble and learned Lord for his admirable opening speech, which gave us a clear exposition of the problems involved in this study.
We have had a most interesting and important debate, with informed speeches from all noble Lords who have taken part. I knew that there was a problem, I knew vaguely that a problem existed; but, like the noble Lord, Lord Kennet, as I read the report I became more and more aware of its crucial importance. In the arguments which have gone on since the 1960s about the Common Market the central theme has always been national sovereignty and the extent to which this is encroached upon in various ways by our membership of the Community. I think we all accepted that a measure of sovereignty had to be conceded, but we were also concerned to ensure that where this happened we knew precisely what was involved and precisely what we were conceding, nationally. By "we" I mean, of course, the British public in general and the Parliament of the United Kingdom in particular. This report goes to the heart of that argument because, as the noble and learned Lord has so lucidly explained, the Community has the power to negotiate and conclude treaties with countries outside the Common Market. This so-called

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external competence is extensive, as Appendix 4 on page 35 of the report demonstrates in detail.
The committee makes many telling points which the Government will, I am sure, consider very carefully. For example, it says that the negotiations conducted by the Community have dealt with matters for which there was no specific provision in the Treaty of Rome. The committee says that these treaties negotiated by the Community have far-reaching consequences for this country and other member states, upon which they are binding, and that sometimes they become law here and elsewhere without further enactment of Community or national legislation.
Finally, if the Community has exercised this external competence then that area, that subject covered by the treaty, is not one in which the United Kingdom or any other member state can thereafter conduct any independent negotiations. Most of the treaties under discussion, as we see from the report, are concerned with trade of one kind or another. As a trading nation all this is, therefore, obviously of considerable importance to the United Kingdom.
Because it alerts us to these developments and their implications for the United Kingdom we warmly welcome this report. I think it may well be one of the most important of all the reports published by the European Communities Committee of this House. It is also very timely in view of the accession of Spain and Portugal, and also the debates about the Luxembourg reform proposals now going on.
The legal authority of the Community is growing significantly, but it is growing unobtrusively and it is vital that Parliament should be aware, step by step, of what changes are taking place. The committee is in no doubt, and makes that clear in plain language in paragraph 72. I quote briefly from that paragraph:
"The Committee consider that the current machinery for Parliamentary scrutiny is inadequate in relation to treaty-making by the Community. There is no effective democratic control".
That is what the committee of this House says. It continues:
"The influence which Parliament can bring to bear is less than that which it has on international negotiations undertaken by Her Majesty's Government, and the opportunities for scrutiny afforded to Parliament are less than those offered to the European Parliament".
That is the judgment of the committee.
We are all sorry that the chairman of our Select Committee on the Communities, my noble friend Lady Llewelyn-Davies, is unable to be here today. We are extremely sorry to hear that she is unwell, and we wish her a speedy recovery and an early return to the House. I know that this is an area in which she is most interested. We are grateful to my noble friend Lady Serota for her excellent speech, dealing with Part V of the report, delivered on behalf of my noble friend. I shall come to some of the points made by my noble friend in due course.
I noted that the noble and learned Lord referred to the Ponsonby Rule. As he said, it is of considerable interest for more than one reason. As far back as 1924 the need to bring Parliament more effectively into the treaty-making process was debated in another place when the Treaty of Peace (Turkey) Bill, which arose out of the Treaty of Lausanne, was before Parliament.
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The Minister who spoke in the debate on the Second Reading of the Bill and who enunciated the rule which bears his name was, as the noble and learned Lord said, Mr. Arthur Ponsonby. In the debate Mr. Ponsonby said:
"It has been the declared policy of the Labour Party for some years past to strengthen the control of Parliament over the conclusion of international treaties and agreements".—[Official Report, Commons, 1/4/24: col. 2001.]
Erskine May, as we have already been reminded, defined the Ponsonby Rule as one whereby when a treaty requires ratification,
"the Government does not usually proceed with ratification until a period of 21 days has elapsed from the date on which the text of such a treaty was laid before Parliament by Her Majesty's Command".
As the noble and learned Lord said, Mr. Arthur Ponsonby was the grandfather of the Opposition Chief Whip, who sustains me and many others in this House, including, I think, the Government Chief Whip, from time to time.
The argument advanced over the years is that parliamentary scrutiny cannot be improved because it would breach confidentiality—a point made by several speakers. I am glad that the committee decided not to accept that argument in its entirety. It deals with this on pages 24 and 25 of the report, and it compares treaty negotiations by the United Kingdom Government and by the Community. It makes the point of which we are well aware that:
"There is no direct parliamentary involvement in the formal conclusion of treaties by the United Kingdom".
The committee then goes on to emphasise that parliamentary consent has to be invoked in several practical ways. In other words, we are far better covered in our national Parliament than we are—with respect to the noble Baroness, Lady Elles—in the European Parliament. These points are dealt with in paragraphs 69 and 70 of the report.
Paragraph 70 makes an important distinction; namely, that whereas for national treaties ministerial responsibility to Parliament extends to the negotiations as well as to the conclusions, for Community treaties it applies only to Ministers' conduct when the Council takes decisions on the negotiation or conclusion of the treaty. In paragraph 70 on page 25 they say:
"Ultimately Parliament's opinion is decisive where a treaty negotiated by Her Majesty's Government will affect internal United Kingdom law; on Community treaties … Parliament can only exert some indirect influence".
The point is clear. Democratic control is inevitably more remote in the conduct of Community affairs, and in the case of external competence it is made even more remote by the manner in which treaties are handled. In my view this is unsatisfactory and the Government must look urgently at the development, as otherwise we may have bureaucrats controlling our destinies. That has not happened thus far, but that is the danger.
Further, on the question of confidentiality we should carefully note paragraph 71 of the report, where we are informed:
"Members of the European Parliament told the Committee that there has been no problem in preserving the confidentiality of this information"—
that is, information passed by the Council to a committee of the European Parliament. I see no

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reason whatsoever why that precise information should not be disclosed on the same basis to a committee of the British Parliament.
The whole Community treaty-making process is dealt with in some detail in Part 4 of the report. The noble Baroness, Lady Elles, to whom we all listened with great respect because of her long experience of the European Parliament, dealt with these procedures in some detail, and we are grateful to her. I think that the point to note is that only in the final stages does the European Parliament have the chance to scrutinise the treaties. It may be said that it is the same here in the United Kingdom, but surely this is not so, since if Parliament protests against a United Kingdom negotiated treaty it can be changed, because only two countries are involved. In the case of the European Community treaties, first 10 and now 12 countries are involved, which is a very different kettle of fish.
Further, as paragraph 39 makes plain, Community treaties have direct effect, which is a point of the utmost significance—
Baroness Elles: My Lords, I thank the noble Lord for allowing me to intervene on this point. I think that, as regards the information given to the European Parliament, there is an ongoing process from the time that the negotiations are opened by the Commission until the signing of the treaty. So to my knowledge the relevant committee of the European Parliament is kept informed of progress at regular intervals. I am not sure whether that point was fully apparent from the paragraph which the noble Lord read out.
Lord Cledwyn of Penrhos: My Lords, I am much obliged to the noble Baroness, and so, I am sure, is the House, for that additional explanation. Of course, that makes it all the more necessary for the British Parliament to be kept informed—or an appropriate committee of the British Parliament, because the noble Baroness, Lady Elles, referred to information being passed to a committee of the European Parliament and not to the Parliament itself.
I was referring to Community treaties having a direct effect and I think this term is extremely important. The effects are immediate and we are stuck with them, whether we like them or not. In my view this is a significant development and I hope that the Minister will tell us the Government's view about it. Direct effect in relation to individuals can have unpredictable ramifications and we need a clear statement from the Government. I think this was the point stressed by the noble and learned Lord, Lord Denning, and the noble Lord, Lord Beloff, when they spoke. I believe that a relevant case is pending before the court at the present time and I hope that the judgment there will help to clarify the position.
The problem assumes an even greater significance when we look at paragraph 27 of the report, where it says:
"the Committee find it difficult to identify any clear limit to the possible extent of the Community's external competence".
My own attitude to the Community has always been one of general support, but I also think that the Community must learn to walk before it can run. The
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great danger is that practices may develop and precedents may be established unobtrusively and without the full appreciation of the peoples and parliaments of the member states. We do not like that sort of thing happening in this country and we have resisted it throughout the centuries. Why therefore should we accept it as a fait accompli now that we are members of the Community? I do not see the necessity for it at all.
In her speech my noble friend Lady Serota asked a crucial question about the devising of adequate machinery. I agree with her that it seems essential that some parliamentary machinery is devised to ensure that the negotiating mandate is reviewed at a much earlier stage, and that a power of amendment is part of that mandate. I had the impression that this was one of the points which was stressed by the noble Lord, Lord Broxbourne. A proposal may be perfectly respectable, but we must be able to challenge the Community's competence to deal with it and we must be able to decide whether we wish to surrender irrevocably that particular area of competence.
All in all, we have a report with profound implications for the future of this country and for its democratic procedures. We may be told that we are too sensitive, that now that we are in the Community we must embrace these developments and make the most of them, and that we must make our proper contribution through democratically elected members such as the noble Baroness, Lady Elles.
There is a great deal in that argument which is difficult to resist, but in my view we must also be careful not to move too rapidly. I am prepared to go along with the noble Baroness when I am satisfied that the democratic base is secure. The lesson of history is that eternal vigilance is required to secure the democratic base. On this question of external competence I have very considerable doubts that the interests of this country are entirely safeguarded at the present time. In thanking the noble and learned Lord and his committee once again, I urge the Government to heed the warnings of their report.
8.37 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, as is only to be expected, we have had a very good debate this evening. The subject of the Select Committee's report is important, though I must say that I agreed with the noble and learned Lord, Lord Templeman, when he said at the start that the subject he described was a hard nut to crack.
Right at the beginning of my remarks I should like to say that the Government welcome this opportunity to respond to the Select Committee's extremely well researched and comprehensive report, produced under the chairmanship of the noble and learned Lord, Lord Templeman. The extent of the Community's powers and the way in which they are exercised can have a profound effect on the rights and obligations of United Kingdom citizens. It is therefore right that your Lordships' House should take an interest in the Community's powers with regard to external agreements. The Government welcome the willingness of the Select Committee to tackle this important and complex subject.

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It is right that the Select Committee in its report does not aim to question the extent of the Community's powers. Those powers derive from the Community treaties, which fall to be interpreted by the European Court of Justice. The United Kingdom is party to those treaties, which implies acknowledging those powers. That is a central consequence of Community membership which is not at issue. It does mean that the scope for questioning the extent of Community powers is very limited.
The committee has given us a comprehensive description of the Community's powers with regard to external agreements and drawn attention to the consequences of their exercise. This in itself is no mean achievement—a fact referred to by almost every noble Lord who spoke in the debate—as Community case law on the subject is developing rapidly. The Select Committee has, however, applied itself to the task with its customary thoroughness, taking evidence from a wide variety of sources, and its report has proved to be a valuable re-examination of Community competence. It has been very carefully studied throughout Whitehall.
Before responding to the individual conclusions which are summarised on pages 26 to 28 of the report, it may help if I remind your Lordships of the legal powers under which the Community is able to enter into international commitments, either in the company of one or more member states or on its own. Generally speaking, the Community participates in international agreements wherever these agreements concern matters wholly or partly within the competence of the Community. Matters fall within Community competence where the Community treaties confer such competence, either expressly or by implication. All other matters fall within the competence of the member states.
The EEC Treaty confers express treaty-making powers on the Community in two areas. The first is the common commercial policy which is dealt with under Articles 113 and 114 of the EEC Treaty. These include wide-ranging agreements, such as the trade agreements with Norway and Sweden and other countries of the European free trade area. The second is association agreements between the Community and one or more third countries or an international organisation for which express powers are provided in Article 238. These include the important agreements with Mediterranean countries such as Morocco and Egypt.
The European Court of Justice has ruled that treaty-making powers are not confined to matters covered by the treaty articles that I have mentioned. They may be implied from the existence of internal rules laid down, for example, in Council directives and regulations. The case which gave rise to the ruling involved drivers' hours. There was already internal Community legislation, and the proposal was to have an agreement with other states on the same subject. The court held that the implied power for the Community to enter into treaties existed whenever (a) the Community had laid down common rules to give effect to common policies and (b) it became necessary to conclude external agreements relating to the subject matter of those rules.
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In such cases, it is for the Community and not the member states to conclude treaties affecting those rules. The reason for this is that it cannot be right for member states to agree on common rules to give effect to a common internal policy and then to undermine that policy by subscribing to international obligations which may contradict or conflict with the agreed rules. These ground rules are explained in greater detail in the Select Committee's report.
Certain witnesses in evidence to the committee argued that Articles 100 and 235 of the EEC Treaty could grant external competence to negotiate with third countries on any matters falling within the objectives of the Community, even when these matters have not been the subject of internal Community rules. That was a point to which the noble and learned Lord, Lord Templeman, referred. The court's case law on this matter is not entirely clear. However, the Government fully share the committee's view that in practice it will rarely be appropriate to exercise external competence under Article 235 without first adopting internal rules. If there is no need for internal rules to govern the operation of the common market, it is difficult to envisage circumstances in which it will be necessary to conclude an external agreement in order to attain one of the objectives of the Community.
I turn now to paragraphs 28 to 31 which cover competence deriving from non-binding agreements. The Select Committee also points out in its report that there are different views on the extent to which the Community can assume competence by virtue of its involvement with internationally agreed resolutions or recommendations and similar non-binding agreements. If the Community were to assume competence in this way, the powers of member states would, of course, be correspondingly reduced. Indeed, the Commission has gone further and argued in evidence that member states may not act in a way which might hamper the future development of agreements on the subject in question.
This is a grey area. It is clear that it is not open to a member state to enter into a political undertaking that runs counter to an existing Community obligation. But the Government take the view that, in general, only a subsequent legal agreement is capable of "affecting" (to use the court's expression) an earlier agreement. The Government therefore generally endorse the committee's conclusion on this point. It should, however, be emphasised that only the court can provide a definitive interpretation of the law in this area.
It will be clear from what I have said that the Government fully endorse the committee's view that it is essential that the exclusive nature of the Community's competence should be clearly understood by all those involved in negotiations concerning the Community's external agreements. The possible impact of such agreements on the powers of the member states is most carefully examined when the Government consider proposals for the initiation of negotiations and throughout the course of such negotiations.
In each case where an extension of Community competence is involved, we consider whether it is right that the activity in question should be carried out at

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Community level rather than at national level. Arising from the point raised by my noble friend Lord Colville, perhaps I may say that I am confident that as a result of the debate the Government will be even more thorough in that consideration. In many, if not most, cases this will be quite appropriate and to the general advantage, including that of the United Kingdom; but in a few it may clearly not be, and the Government will firmly oppose the relevant provisions. I think that it is fair to say that we have something of a reputation among our Community partners for examining these questions very closely.
I turn now to paragraphs 39 to 43 of the report dealing with the doctrine of direct effect. Again this was one of the points raised by the noble and learned Lord, Lord Templeman, and by the noble Lord, Lord Cledwyn. In its case law, the European Court of Justice has held that certain provisions of an agreement between the Community and a third state might, in principle, be directly effective in the courts of member states. An example is the EEC agreement with Portugal which applied before Portuguese accession to the EEC. This contained a provision for a lower duty on port wine, and the court held (in the Kupferberg case) that an importer could rely on this provision alone, after conclusion of the agreement, to claim the lower rate of duty. At present the doctrine is confined to provisions imposing obligations only on a state. The Government agree with the Select Committee that there are dangers in any further development of this concept. There could be considerable uncertainty in the law if one individual in a dispute with another individual were able to call in aid the provisions of an international agreement.
The Government also share the committee's view that in order to avoid any doubt, obligations entered into under international agreements should, wherever possible, be transformed by legislation into explicit Community or national law. It must, however, be acknowledged that the practice of recognising direct legislative effect for international agreements is widespread in other member states and, indeed, is the practice in the United States. It was my noble friend Lord Beloff who referred to the United States, and I mention the United States only because it in fact recognises direct effect for treaties and not in any way in connection with its federal system.
Up to now I have been able to agree with all of the Select Committee's conclusions. I must now turn to a point on which the Government and the Select Committee are not entirely at one. The committee considers that in order to avoid uncertainty an attempt should be made to identify which matters covered by a "mixed" agreement fall within Community competence and which fall to the member states. An example of such a "mixed" agreement is that between the European Community and its member states on the one hand and Turkey on the other, concluded in 1963. It covers subjects beyond the scope of the European Community treaties.
The Government acknowledge that this argument has considerable attractions in principle. But, in practice, as the committee recognises, treaties tend not to be drawn up with internal Community distinctions in mind, and the respective responsibilities of the Community and its member states may not always be
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capable of precise definition. It may therefore be difficult to identify where the division lies, not least because the respective responsibilities of the Community and the member states may evolve as time goes on. It has not, therefore, been the practice for a precise distinction to be made.
Other states associated with the Community's external agreements have generally been content that the Community and its member states will between them implement the obligations incumbent upon them. Few problems arise as regards the preparation and presentation of the Community position in negotiations since it is the normal practice for member states to co-ordinate their positions on matters both within and outside Community competence.
It is therefore extremely doubtful whether the Commission and our Community partners would agree that it was necessary systematically to draft statements about Community competence. Indeed, any attempts to do so would not necessarily lead to an outcome which was desired by the United Kingdom. Moreover, internal debates in the Community on competence could well delay progress in negotiations and lead to the Community missing opportunities on the substance. I am sure that your Lordships will agree that these are cogent arguments and that what might be desirable in principle may not in practice achieve the right results.
I should like to say a word about the way in which the Council's powers to adopt Commission proposals relating to the initiation of negotiations and the conclusion of agreements are exercised. Many of your Lordships referred to this. As the Select Committee's report points out, the EEC Treaty is not entirely clear about the majority required for certain decisions of this type. For example, in the field of transport policy, Article 75 provides for internal rules to be adopted by qualified majority but does not mention external agreements. The legal services of the Commission and the Council have adopted differing views. The Government generally agree with the Select Committee that the most sensible solution is that the majority required for the opening of negotiations should be the same as that required for their conclusion and that this, in turn, should be the same as that required for the enactment of internal rules. In practice, of course, it is normal for the Council to attempt to reach unanimous decisions on the negotiation or conclusion of agreements.
Perhaps I might refer at this time specifically to the point raised by the noble Lord, Lord Kennet, on the United Nations Law of the Sea Conference. The United Kingdom and the Federal Republic of Germany have not signed the convention. The European Economic Community has signed. But the director general in the legal service of the Commission, in evidence, said that action by the Community would require unanimity. Action by the Community is only possible in fields under its competence. Many topics in the United Nations Law of the Sea Convention are within national competence.
I turn now to the powers of the European Parliament. The Select Committee heard in evidence that, in areas where consultation of the European Parliament is mandatory, the Parliament had sought to increase its influence over Council decisions by

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declining to provide an opinion until the Commission agrees to take on board its views on the proposal in question. The court has indeed held in a case relating to isoglucose, a product similar to sugar, that a particular regulation was invalid because the opinion of the Parliament had not been received. But the Government fully agree that attempts to take full advantage of the ruling to create for the European Parliament an effective right to veto have no foundation in Community law. The Government believe, moreover, that this practice has not resulted in any delays to Council decisions on external agreements which have been harmful to Community or United Kingdom interests.
The Select Committee also considered the role of Orders in Council under Section 1(3) of the European Communities Act 1972 in the United Kingdom ratification procedures for external agreements entered into by the European Community. This was a point mentioned by my noble friend Lord Broxbourne. The committee concluded that parliamentary consideration of Section 1(3) orders should not be regarded as a substitute for normal scrutiny procedures on Commission proposals relating to the conclusion by the Community of international agreements. The Government agree that the two procedures serve quite different purposes. A council decision is necessary to enable the Community to conclude the agreement. The purpose of the Section 1(3) order on the other hand is to provide the powers to enable the United Kingdom to implement its obligations under the treaty. Commission proposals relating to the conclusion of external agreements by the Community are therefore deposited for scrutiny by Parliament, whether or not a Section 1(3) order is to be presented. In practice, however, as the Section 1(3) procedure requires an affirmative resolution in both Houses, it may sometimes make sense for all Community aspects to be taken into account during debate.
I turn to paragraphs 72 to 74 on parliamentary scrutiny. These were the paragraphs referred to, I believe, by almost every one of your Lordships who have taken part in the debate. The matter was raised by the noble and learned Lord, Lord Templeman, in opening, and by the noble Baroness. Lady Serota, who put the case quite forcefully on behalf of her noble friend Lady Llewelyn-Davies.
The last of the Select Committee's specific conclusions concerns the opportunities available to Parliament to influence the course of negotiations on external agreements to be entered into by the Community. The Select Committee considers that Parliament should be informed of Commission proposals relating to the initiation of negotiations in the same way as it is informed of proposals for other action by the Community, wherever this can be done by means which do not disclose confidential matter.
The reasons why Commission proposals for the initiation of negotiations are not at present submitted for scrutiny were set out in the Government's evidence to the committee. These documents contain the Commission's proposals concerning the instructions to be given to the Community's negotiators. In many cases they indicate not only the Community's initial
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position but the margin of discretion which should, in the Commission's view, be given to the negotiators. In the case of a fisheries agreement, for example, the instruction might specify whether payment of a fee is to be offered and what reciprocal concessions will be insisted upon. They are, therefore, quite different in character to other proposals by the Commission and for this reason are not published in the Official Journal or communicated to the European Parliament. The sensitivity of these proposals is clear, as are the practical difficulties which could result for the Community's negotiators if their mandate were known beyond the responsible Ministers and officials in the governments of the member states. It therefore remains the Government's view that it would not be appropriate to submit these documents for scrutiny.
I should add that, following publication of the Select Committee's report, the Government sought the Commission's views on how the proposals in question should be handled. The Commission confirmed that they were to be treated as confidential documents. We have also inquired as to the practice in other member states. Our inquiries have shown that none of our partners submit the documents in question for parliamentary scrutiny and that it is most unlikely that they would agree to our doing so.
The Government have therefore considered very carefully whether it is feasible to make any other changes in the way in which Parliament is informed of external agreements under consideration by the Community. The Select Committee itself acknowledges that the possibilities open to the Government are limited by the need to preserve confidentiality—a point stressed by the noble Baroness, Lady Serotaand does not press for the transmission of classified material.
I should perhaps remind your Lordships that general accounts of our negotiating approach and objectives are already given—often in considerable detail—in debates, when Statements are made after meetings of the Council, and in response to parliamentary Questions. It is also always open to any Member of your Lordships' House or of another place who wishes to discuss a prospective negotiation to write to, or seek a meeting with, the responsible Minister. I believe that your Lordships will agree with me that these procedures work well in practice. I am, of course, always happy to meet any Member of your Lordships' House who wishes to discuss a particular negotiation.
I should not conclude without saying something about the outcome of the intergovernmental conference and the proposed amendments to the EEC Treaty. Your Lordships' House will, of course, have a full opportunity to consider these amendments in due course and I shall therefore confine myself to one or two general remarks.
The agreement reached in the intergovernmental conference at the end of last year represented a worthwhile step forward in the development of the Community. The changes which will be made to the EEC Treaty will strengthen the Community, and placing political co-operation on a treaty basis will usefully reinforce foreign policy co-ordination.
We have consistently pressed for the objectives now set by the conference: to complete the common

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market by 1992; to speed up decision-taking; to strengthen co-operation in foreign policy; and to ensure that our efforts in research and development are geared to the exploitation of a growing market. We have agreed to procedural changes to improve consultation between the Council and the European Parliament. But these will not affect the balance between the institutions: the last word on all Community legislation will remain with the Council. This was a point to which my noble friend Lady Elles referred. I should add that in neither of the cases mentioned by my noble friend Lady Elles under Articles 237 and 238 will the European Parliament acquire powers at the expense of national parliaments.
The outcome of the intergovernmental conference should improve the speed and effectiveness of Community decision-taking, particularly in matters affecting the internal market. Unanimity has been explicitly maintained for all decisions on taxation, the free movement of persons and the rights and interests of employees. We also retained the right to take national action where required to protect public, animal and plant health.
The results of the intergovernmental conference are still subject to general reserves entered by Italy and Denmark. I hope very much that these reserves can be lifted as soon as possible so that the texts can be finalised, signed and submitted to national parliaments for approval.
I hope that I have dealt with all the conclusions set out in the Select Committee's report. I conclude by saying that, although I have not been able to agree with all those conclusions, I think that it will be clear that the Select Committee's report with its thorough analysis of the current state of Community law will become an invaluable work of reference for future years.
Lord Cledwyn of Penrhos: My Lords, before the noble Baroness resumes her seat, may I put one important matter? The noble Baroness has made a full and detailed speech for which we are extremely grateful. But she has not moved an inch in the direction of the committee or any of the recommendations that it makes. For example, Paragraph 84 criticised the lack of adequate machinery. The answer by the noble Baroness to that was to say that nothing more can be done.
My noble friend Lady Serota suggested that there might be a meeting between the noble Baroness and the chairman of the Select Committee on the European Communities in this House to discuss the devising of new machinery which might improve matters. The noble Broness made no reference to that.
I appreciate that the noble Baroness may not be in a position to make a firm commitment tonight, but can the noble Baroness say that she is prepared to discuss these matters with my noble friend Lady Llewelyn-Davies, the chairman of the EC Committee, so that a start can be made to looking at the possibilities of improving the machinery?
What happens in other countries is no business of ours. What we are concerned with is the democratic process in this country. If the noble Baroness were to
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say that she would convey this to her right honourable friend, then this House, I feel sure, would be extremely grateful.
Baroness Young: My Lords, I am very sorry that the noble Lord, Lord Cledwyn, should feel that I have not dealt adequately with any point in the committee's report. As I indicated to the noble Lord, we agree with almost every point that has been made.
There is this very important matter, and I recognise clearly, from having listened to the whole of the debate, the strength of feeling on this matter in your Lordships' House, which is reflected in what the committee has said. I have tried to explain why the Government have taken the view that they have. I shall of course read very carefully what has been said when Hansard is published and I shall consider this matter, particularly the quite specific request that has been made for a meeting to discuss whether or not there are some further measures which we could take.
As I am sure the House will appreciate, I could not undertake anything further than that point. But I hope in saying this that others of your Lordships will look carefully at what I have said on this point about the very many opportunities which are presented to our Parliament for looking at treaties at an early stage, particularly the numbers of times when there is a full statement to Parliament after a Council meeting. That of course usually indicates the first stages of a treaty, when there are opportunities to comment and all the other opportunities which can be taken.
However, I shall certainly consider what the noble Lord, Lord Cledwyn, has said. I shall also look again at what the noble Baroness, Lady Serota, has said on this matter. As I said, I cannot give any guarantees that there is anything further that I can add to this. But I shall certainly look at the suggestion which has been made.
9.6 p.m.
Lord Templeman: My Lords, on behalf of the Select Committee I should like to express gratification for the contributions which have been made to this debate. Those contributions have endorsed the decision which was made by the Select Committee to investigate this very difficult but important question; and have endorsed all the main conclusions of the Select Committee with the exception of the scrutiny proposals, to which I shall refer in a moment.
In general, may I say that I thoroughly agree with the Minister's opening remarks, which went to the point that we must operate Community law through Community institutions; and that the place to do that, when questions of competence arise, is through the Council and through our representatives on the Council. That must be coupled with the acceptance by the noble Baroness of the expression used by the noble Lord, Lord Broxbourne, who said that we must be watchful, and that departments must be watchful, so that Council representatives are fully instructed on this question of competence.
Your Lordships will echo the expression of regret by the noble Baroness, Lady Serota, on the absence of the noble Baroness, Lady Llewelyn-Davies, and the reason for her absence. We all know the great interest she takes in all the affairs of the Select Committee. It

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was on the question of scrutiny that the noble Baroness was most concerned.
The noble Lord, Lord Banks, was inclined to leave questions to the competence of the council and its legal advisers. With great respect, the Community think otherwise. They think that member states should, in the first place, consider any proposals from the point of view of competence; they should then consider the implications of the proposals with regard to competence, and should then turn to the merits. To consider the merits of a proposal first of all and then to consider competence at the end of the day is really to stand the proper procedure on its head.
The noble Viscount, Lord Colville of Culross, was I think surprised at the extent of the implied powers and parallelism. But as the noble Baroness said, and the Minister said—and I would agree—one must now simply apply this through the machinery of Community law. The noble and learned Lord, Lord Denning, with his usual lucidity and clarity, explained the effect of direct applicability and the dangers involved in that.
The noble Baroness, Lady Elles, stressed the views of the committee on the helpfulness of witnesses from the Community and from the department. She gave us an illuminating account of the role of the European Parliament with which I think we are all sympathetic. The only doubt cast by the committee was on the use of their powers so as to create a power of veto.
The noble Lord, Lord Beloff, was rather wary of what he called the expansion of powers by Community institutions, which, as I have said, we take the view can only be dealt with by our own adherence to those communications. He referred to himself as a token lay person. Those members of the committee who served with him would not accept his self-deprecating remarks. Most of his observations are far more penetrating than he would lead the House to believe.
The noble Lord, Lord Broxbourne, has experience on these matters both as a Member of the United Kingdom Parliament and as a former member of the European Parliament. He stressed the importance of exclusivity, and used the expression, which I have taken from him, of the necessity for being watchful. The noble Viscount, Lord Dilhorne, referred to the practical difficulties confronting lawyers where Community law is, or is not, directly applicable. Of course, the difficulties of lawyers are compounded by the difficulties of their lay clients when they receive advice from lawyers who are cast in the middle of the Community thickets.
The noble Lord, Lord Kennet, had a point to make on confidentiality. He stressed a point, on which I would venture to disagree with the Minister; namely, the cloak of confidentiality and sensitivity. It is a negative attitude to allow this cloak to be cast round all negotiations simply because in some of them there may be sensitive or confidential matters. I think all the Committee would ask is that the problem should be looked at in general and in particular to see whether it is really necessary to have a cloak or blanket over the whole scheme, or whether there could not be some method whereby we were informed of the principles in advance.
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Certainly the committee's understanding is that there is a defect there at the moment; that we do not get sufficient warning of the opening negotiations when it comes to international treaties. We do not get the same warning as we do with other Community proposals. We would respectfully suggest that that could be looked at again.
The noble Lord, Lord Cledwyn of Penrhos, I think agreed with all the proposals made by the Select Committee. So far as concerns the Minister, I went through cheerfully ticking off all our conclusions. I have only two question marks. One is that she frankly said—and I can understand the reasons—that the Government did not wholly agree with the proposal that the Community and member-state area should be defined in a treaty. My recollection is that in the Law of the Sea, or certainly in one of the conventions, the other negotiating parties have positively insisted that the Community and the member states shall, in an annexe, set out what they conceive to be their different functions and their different responsibilities. For my part, I see the full force of the case made by the Minister on the recommendations in paragraph 80 and I would not dissent.
That leaves only one bone of contention, which is the scrutiny proposals in paragraph 84, the last conclusion of the Select Committee. Again, I see the force of the Government's attitude, and I see the difficulty where confidential matters are intertwined. But where there is a will there is a way, and the fact that European countries are not, if I may put it this way, quite as interested in competence matters as we are in this country should not deter us, if we think the point is a good one, from trying to segregate that which is confidential from that which ought to be placed before Parliament at the earliest opportunity. I do not think that in principle there is anything between the committee and the Minister, and I hope I may be permitted to make those comments on the view that she has expressed.
I conclude by thanking all those who have contributed to this debate and in particular all those members of the committee both those who have taken part and those who have not. We all worked together over a period of six months and with some 180 pages of evidence gratefully and thankfully have come to a conclusion.
On Question, Motion agreed to.
House adjourned at a quarter past nine o'clock.

  PRISONS: RESTRICTIONS ON TYPEWRITERS
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  PRISONS: "COMMON FUND" PAYMENTS
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  INTERROGATION TECHNIQUES: TRAINING DOCUMENT
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  SDI RESEARCH PROGRAMME: CIVIL SPIN-OFF
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  HEATING PAYMENTS AND SEVERITY OF WEATHER
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  SUPPLEMENTARY BENEFIT: BOARD AND LODGING PAYMENTS
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  "HELPING THE COMMUNITY TO CARE" PROGRAMME
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