Sitting of 14 July 1986

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

    Drink-Driving
    Mr. Dormandasked the Secretary of State for Transport whether he has any further proposals to reduce the number of drink-driving offences; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Transport (Mr. Peter Bottomley): This year we have had the first-ever summer publicity focus. I am considering how to maintain the vital campaign against drunk driving. A quarter of all road deaths are drink related. About 5,200 people died on our roads last year.
    Mr. Dormand: Does the Minister agree that drink-driving offences are a scourge of modern society, as is demonstrated by that horrible figure that he has just given? Reports show that the estimate that one quarter of road deaths are drink-related is a conservative one.
    Mr. Peter Bottomley indicated assent.
    Mr. Dormand: I see that the Minister agrees with me. Does he also agree that there is no excuse for drunken driving and that a conviction ought to result in a gaol sentence? What is he considering doing about that?
    Mr. Bottomley: I do not want to take up the hon. Gentleman's point about an automatic gaol sentence, because that is not in my hands today. What is in my hands is a booklet called "The Facts About Drinking And Driving", which is available to anyone who rings 0800234888. Anyone who reads the information in that booklet will suddenly realise that he has no need to join the 100,000 people who are convicted each year and that he should not be one of the larger number who put themselves and others at risk.
    We must change attitudes. There is some wholly irresponsible public behaviour, and the interest that hon. Members in all parts of the House are showing may lead to the sort of action that the hon. Gentleman is seeking, but I can give no commitment on that.
    Mr. Sackville: Does my hon. Friend agree that there is a growing problem of accidents involving not only drunk drivers but those who are either unqualified to drive or uninsured? Does he agree that people indulging in such criminally irresponsible behaviour should be more harshly dealt with, and that there should be a better system of compensation for their victims?
    Mr. Speaker: Order. We should stick to the original question, which was about drunk driving.
    Mr. Bottomley: Perhaps I may answer my hon. Friend briefly. Public reaction and involvement will make the greatest difference. Various things that we do on our roads are wholly unacceptable, including driving while unqualified, disqualified or drunk.
    Mr. Nicholas Brown: Is the hon. Gentleman aware that the Transport Act 1981 does not specifically allow for drunk-driving convictions to be based on retrospective evidence and that the medical profession criticises such tests as unreliable? Will the hon. Gentleman amend the Act to prevent abuse and to confine such cases, if we must have them, to special circumstances?
    Mr. Bottomley: Given the recent case, I had better not comment directly on that part of the hon. Gentleman's question. The point to remember is that people like us occasionally appear in court with the excuse that they went out for a social drink, even though they are convicted for having twice the legal limit of alcohol in their blood, which means that they have done a great deal of drinking. We must try to get away from our personal excuses for breaking the law and putting people at risk.
    Mr. Peter Bruinvels: I congratulate my hon. Friend on his excellent campaign and I recognise that drunk-driving kills, but could my hon. Friend suggest ways of bringing in the breathalyser and random breath tests throughout the year? More than 1,600 people a year lose their lives in drink-related accidents, and something needs to be done. I know that the Government are committed to doing something.
    Mr. Bottomley: Certainly something is being done, and it is worth remembering the summer publicity focus. Our campaign towards the end of the year appeared to be working, as the Home Office statistical bulletin showed. Police can administer breath tests when there has been a moving traffic offence, after an accident or when they suspect that a driver has been drinking. We cover all categories.
    Mr. Stott: The hon. Gentleman may not be aware of the fact that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) and I moved an amendment when the Transport Act 1981 was going through the House to apply what were termed the Blennerhassett provisions to give the police much more scope in evidential breath testing. Unfortunately, the amendment was not accepted by the Standing Committee, so we have the present system in operation.
    The Minister and I are both concerned about road safety and about drinking and driving, but is he aware that his remarks about a recent case were a little precipitant? In view of what happened and what the hon. Gentleman said, it might be worth the House looking at the question again in a different light.
    Mr. Bottomley: That may be so, but if the hon. Gentleman reads my remarks he will see that I avoided mentioning a particular case— [Interruption.] Despite laughter from the Opposition, I regard it as my job to bring down the number of casualties. The rate has dropped in the past 30 years, but the biggest remaining killer is drunk driving. I speak for the civil liberties of those at risk.

    Drivers' Hours
    Mr. Bidwellasked the Secretary of State for Transport what recent representations he has received concerning commercial vehicle drivers' hours.
    The Secretary of State for Transport (Mr. John Moore): The road transport unions have made representations to me, both directly and through right hon. and hon. Members, and I met union representatives, together with the hon. Members for Glasgow, Shettleston (Mr. Marshall) and for Ealing, Southall (Mr. Bidwell) on 3 July.
    Mr. Bidwell: Is the right hon. Gentleman aware that in a recent reply to my hon. Friend the Member for Liverpool, Riverside (Mr. Parry), the Minister responsible for road safety, the hon. Member for Eltham (Mr. Bottomley) said:
    "There is no clearly established connection between driving hours and fatigue."
    Did he mean that? Is the Secretary of State aware of the widespread concern that the new EEC regulations will lead exactly to that? We shall find out tomorrow.
    Mr. Moore: The hon. Gentleman was involved in a delegation that he brought to me the other day. I listened carefully to what he said, but I do not accept his contention. The House will have the opportunity to debate the matter late tomorrow night when we discuss drivers' hours.
    Mr. Gregory: Attention has rightly been drawn to drivers' hours. When a driver is not driving, is he not meant to be resting? Will my right hon. Friend consider introducing a personal log book such as that used by pilots so that a driver cannot continue driving for gain or profit? If we introduce such a system not the number of accidents be greatly reduced?
    Mr. Moore: My hon. Friend will the opportunity to make that point in greater detail tomorrow night, but I shall certainly consider what he has said. We are introducing the new regulations to give greater flexibility, including less driving per fortnight, and more weekly rest, which is a critical factor.
    Mr. Foot: Will the Secretary of State undertake to hold up the provisions that he plans to put before us tomorrow night until we have had longer to examine them? Has he met the drivers on the job? If he has, what did they say to him, and what did he say in reply? Will he exercise some authority and give the House of Commons a full chance of discussing this important matter—not late at night—because of the widespread concern about it?
    Mr. Moore: I always listen with care to the right hon. Member for Blaenau Gwent (Mr. Foot), but the Minister responsible for roads, my hon. Friend the Member for Eltham (Mr. Bottomley), has had extensive consultation on the issue and it has been under discussion for a considerable time. I cannot give the right hon. Gentleman the undertaking which he seeks. So far my Department has received 130 letters from the public, compared with 45 letters from hon. Members. There will be an opportunity to discuss the matter again tomorrow.
    Mr. Stott: Is the Minister aware of the written answer by his hon. Friend the Parliamentary Under-Secretary of State, to which my hon. Friend the Member for Ealing, Southall (Mr. Bidwell) alluded? He said:
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    "There is no clearly established connection between driving hours and fatigue." — [Official Report, 25 June 1986; Vol. 100, c. 242.]
    Is the Secretary of State aware that the Parliamentary Advisory Council for Transport Safety — an all-party group in the House and outside—estimates that 11 per cent. of PSV and HGV accidents involve driver fatigue? Will the Secretary of State ensure that his hon. Friend is further briefed before he comes to the House for the debate tomorrow night?
    Mr. Moore: There is no difficulty in asking my hon. Friend the Under-Secretary of State for Transport, who is responsible for roads, to read briefs, because he reads them extensively already. We are proposing a new pattern of regulations which will provide for less driving and more weekly rest. It is the end product of a long period of consultation. I am sure that the House will find the regulations acceptable tomorrow night.

    Driving Test Centres
    Mr. Amessasked the Secretary of State for Transport what criteria are used to determine whether driving conditions are sufficiently difficult to justify the establishment of a driving test centre in a particular locality; and if he will make a statement.
    Mr. Peter Bottomley: We need routes with the greatest variety of traffic conditions and hazards within the area.
    Mr. Amess: I listened carefully to my hon. Friend, but does he agree that my constituency more than meets the criteria for a test centre? We have the greatest number of applicants for tests in Essex, we have to travel long distances to Brentwood and Grays, and our shopping centre is so successful that our driving conditions are more than testing.
    Mr. Bottomley: The problem is not just the number of people who want to take the test. The problem lies in the Basildon one-way system, its wide and open junctions and well planned roundabouts. It has few traffic lights, and I understand that the town centre is a pedestrian precinct. I would have thought that the four test centres within 13 miles of Basildon, at Brentwood, Grays, Southend and Chelmsford, would allow someone who is about to be tested to relax as he drives there, and perhaps be more successful in his test.
    Mr. Hardy: I am in no way suggesting that people drive tractors around Basildon, but I have a constituent who is seeking to get a driving licence to drive a tractor in the Rotherham area. He has been told that he must wait until there are several other applicants for tractor driving tests, and the delay is threatening his employment. Will the Minister look with a great deal of urgency at the letter I sent to him?
    Mr. Bottomley: Yes, Sir. We are conscious that where employment is tied to passing a test it is up to us to ensure that people can take their test as soon as possible. We are also trying to reduce the general waiting list for tests.

    Bath
    Mr. Chapmanasked the Secretary of State for Transport what proposals he has to remove trunk road through traffic from Bath.
    Mr. Peter Bottomley: Trunk road traffic travelling in an east-west direction was removed from Bath when the M4

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    motorway was opened. We propose to provide a north-south bypass of Bath, linking the A46 and A36 trunk roads, in conjunction with the Batheaston bypass to the east of the city.
    Mr. Chapman: Will my hon. Friend confirm that a north-south bypass for this historic city must remain a top and urgent priority? Will he confirm that it is also the Government's priority to see that bypasses are constructed around other historic cities and villages and that the additional cost of doing that is on top of, and not at the expense of, other parts of the Government's road building programme?
    Mr. Bottomley: I accept both parts of my hon. Friend's supplementary question. Obviously, greater relief for Bath is important. We have added to the programme 81 bypasses and relief roads for historic towns and villages since 1979 and will continue to give high priority to the Government's bypass programme. The achievement of our plans will be greatly assisted by the increase in funds available for trunk road construction. The only difficulty would come, perhaps in Bath and certainly other places, if the national roads programme were dramatically reduced to what it was between 1974 and 1979.

    Cyclists (Highway Code)
    Mrs. Virginia Bottomleyasked the Secretary of State for Transport what factors led him to bring forward amendments to the "Highway Code" relating to the safety of cyclists.
    Mr. Moore: Both cyclists and other road users should be more aware of the vulnerability of cyclists in accidents. That is why we are proposing amendments to the "Highway Code".
    Mrs. Bottomley: I thank my right hon. Friend for that reply and for the efforts that he and his Department have made to recognise more the needs of cyclists as fellow road users. May I remind him that cyclists still face around 300 deaths a year and 6,000 serious accidents or injuries? Will he look again at the investigations by the Transport and Road Research Laboratory and, perhaps more important, at the request by the Cyclists' Touring Club, which has its headquarters in my constituency, that greater diagrammatic emphasis should be given in the new Highway Code to the needs of cyclists, as all too many people learn through visual images rather than the written word?
    Mr. Moore: I am conscious of the fact that my hon. Friend raised this important issue for her constituency and for the general public in an Adjournment debate on 16 May before my hon. Friend the Member for Wallasey (Mrs. Chalker). I am conscious of the important points that she has made. I shall certainly look at the points that she has made about graphical material, because that is a perfectly legitimate point to examine.
    Sir Geoffrey Finsberg: Will my right hon. Friend look at the growing numbers of cyclists who are deliberately disregarding traffic lights, driving through them, driving without lights at night and contributing to the large numbers of deaths and accidents which my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley) has just mentioned? Will he ask the police to pay particular attention to that as it is putting other road users at great risk?
    Mr. Moore: If my hon. Friend is factually correct, he is right in saying that those who injure and create injuries must obey the "Highway Code." Clearly one of the changes to the "Highway Code" proposed by my hon. Friend the Parliamentary Under-Secretary is to include, for the first time, references with relevance to cyclists. Obviously that is an important change.
    Mr. Tony Banks: Is the Secretary of State aware that since the abolition of the GLC's cycling project team there is no co-ordination and development of cycle lanes around London? How many miles of cycle lanes would the right hon. Gentleman make his objective? What is his objective? The GLC set a target of 1,000 miles.
    Mr. Moore: The GLC set many targets and did many other things that I would not wish to go into now. There is no need for us to do other than delight at the demise of that erstwhile irrelevant organisation. Having said that, I am interested in cycle lanes and will consider the particular point that the hon. Gentleman has raised. I shall do so in the hope of coming up with a serious comment unlike the hon. Gentleman's supplementary question.
    Mr. Couchman: In considering the dangers in which cyclists find themselves, is my right hon. Friend aware of the jeopardy in which they are placed by drivers who use hand-held radio telephones while driving? Will he take urgent steps to dissuade drivers from this extremely dangerous practice?
    Mr. Moore: My hon. Friend is making a legitimate point. There are references to the problem of hand-held radio telephones in the new "Highway Code", and we must concern ourselves with the obvious vulnerability of cyclists. As my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley) said, over 300 cyclists—345, in fact — were killed in 1984. The figure was slightly reduced in 1985, when 295 were killed, but it is still unacceptable.
    Mr. Dormand: The Secretary of State knows full well that the main reason why he introduced these amendments to the "Highway Code" is that I persuaded him recently to join the all-party friends of cycling group. I am now awaiting the receipt of his £1. Will the right hon. Gentleman draw the attention of the Lord Chancellor to a deplorable accident that happened recently in which a cyclist was killed by a lorry, when the coroner said that cyclists should not be permitted on the road on which the accident took place? Cyclists have as much right to be on any road as any other road user. Will the right hon. Gentleman do something about that?
    Mr. Moore: The hon. Gentleman will recall that cyclists must not use motorways. I have seen the hon. Gentleman pedalling around Parliament Square and I am conscious of his serious interest in the subject. I shall seek to draw the attention of my right hon. and learned Friend the Lord Chancellor to the point that he made.

    Channel Tunnel
    Mr. John Huntasked the Secretary of State for Transport when he will make available the report on the impact of the proposed Channel tunnel on Kent.
    The Minister of State, Department of Transport (Mr. David Mitchell): The preliminary assessment report was

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    published on 11 July, and copies have been placed in the Library. The second stage of the study will build on this initial report.
    Mr. Hunt: As one who supports and applauds the decision on the Channel tunnel, may I ask my hon. Friend, in the context of the report, whether he has yet made any assessment of the likely effect of the construction of the cross-Channel link upon employment opportunities in Kent in the years immediately ahead?
    Mr. Mitchell: During construction we expect an average of about 3,000 people to be employed on the project. About half of them will be recruited locally. In addition, there will be a substantial number of jobs north of Watford as a result of the purchasing of about £900 million worth of goods, many of them from the engineering sector.
    Mr. Aitken: Now that the Japanese banks and the French investors have rather sensibly welshed on their commitment to produce even the first £200 million of equity for this $6 billion project, surely it is time to consider whether it is right for the taxpayer to continue to pay the bills for such expensive reports as the "Kent Impact Study", important though that is. Has not the time come to say that no more parliamentary time or public money should be spent on the project until the business men behind Eurotunnel have re-established their lost financial credibility?
    Mr. Mitchell: My hon. Friend has somewhat exaggerated the position, and not for the first time. The timing of the decision when to go to the market for further equity is entirely a matter for the commercial judgment of the promoters and their professional advisers. They have decided that it will be best for them to do that after the holiday season, and that seems to make a lot of sense.
    Mr. Robert C. Brown: Will the Minister start to understand that this monstrous scheme will have a severe impact on areas other than Kent? When will he decide to take the advice of his hon. Friend the Member for Thanet, South (Mr. Aitken) and scrap the whole damned nonsense?
    Mr. Mitchell: The hon. Gentleman is misled to the extent that his fellow right hon. and hon. Members took a judgment on the matter by a vote of 309 to 44. I do not think that he should cast these aspersions on his colleagues and let them go unanswered.

    STOLport (Sheffield)
    Sir John Osbornasked the Secretary of State for Transport whether he will consider the feasibility of establishing a STOLport at Sheffield.
    The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): It is for potential developers to undertake feasibility studies for the establishment of new airports such as a STOLport at Sheffield.
    Mr. Osborn: Is my hon. Friend aware that south Yorkshire and Sheffield is the biggest industrial area with the densest population in Europe without airport facilities? In the past the Government have worked with local authorities to provide the climate to develop airports. As Brymon and British Caledonian would like to go
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    ahead, will he act as a catalyst with the Secretary of State for the Environment so that European funds can be made available to put Sheffield and south Yorkshire on the air map?
    Mr. Spicer: I congratulate my hon. Friend on his persistance with this idea. As he may know, there are four airports within 40 miles of Sheffield-Manchester, Leeds-Bradford, East Midlands and Humberside. If a local authority asked us to agree to the necessary capital allocation for a STOLport at Sheffield, we would need to be sure that the investment met our normal criterion of a financial return of 7 per cent. If an application were made for European funds, that would be considered on its merits.

    Severn Crossing
    Mr. Roy Hughesasked the Secretary of State for Transport if he will now make a statement on the completion of the feasibility study into the proposed construction of a second Severn crossing.
    Mr. Moore: The consultants are completing their study on time and their final report is expected any day now. It will be published and I shall be making an announcement shortly on its conclusions in consultation with my right hon. Friend the Secretary of State for Wales.
    Mr. Hughes: Does the Secretary of State appreciate that the Welsh economy is in a parlous condition, with heavy unemployment? Is he further aware that he could ease the position with an early announcement authorising the building of a second crossing of the River Severn and by accepting the recommendation of the Select Committee on Transport calling for the abolition of tolls on estuarial crossings? A favourable announcement on both matters would be well received throughout Wales and in many other hard-pressed areas.
    Mr. Moore: I cannot comment on the Government's position in advance of our response to the Select Committee about estuarial tolls. I can reassure the hon. Gentleman that my right hon. Friend the Secretary of State for Wales has made it clear that, above all else, he is aware of the critical nature for the Welsh economy of an additional link to south Wales.
    Mr. Robert Hughes: Will the Secretary of State give a guarantee that as it is three or four months since the Transport Select Committee reported on tolls, he will give an answer while the House is sitting so that he may be questioned on it?
    Mr. Moore: The hon. Gentleman is referring to the Government's response to the Select Committee report. I cannot give a guarantee at this stage, but I recognise the hon. Gentleman's point and I shall do everything in my power to ensure that the answer reaches the House while it is still sitting.

    Motorway Repairs
    Mr. Knoxasked the Secretary of State for Transport whether he is satisfied with the speed with which motorway repairs are undertaken.
    Mr. Peter Bottomley: No, Sir. The increased use of lane rental contracts, which give the contractor an incentive to

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    complete early, is enabling us to speed up major renewal schemes, achieving in some cases time savings of about 25 per cent.
    Mr. Knox: Will my hon. Friend explain why it appears to take so long to effect repairs to motorways? Will he also explain why so much of the motorway network appears to be under repair?
    Mr. Bottomley: Part of the reason is that people forgot that motorways eventually need replacing and that we are trying to deal with the legacy from before 1979. Cones are needed for various reasons which are not always obvious: to protect the concrete which is still curing; to protect excavated areas or damaged safety fences; to provide a safety zone for workmen; and to provide access for contractors or emergency vehicles.
    Mr. Carter-Jones: Is the Minister aware of the hardship experienced by my constituents because of repairs to the Barton high-level bridge on the M62, which are likely to take three years? This is causing unnecessary hardship to people living in Eccles, Swinton, Pendlebury and Worsley. What will he do about that?
    Mr. Bottomley: I am aware of the strong representations that the hon. Gentleman has been making on behalf of his constituents and others who have been held up by the necessary widening of the bridge. I have also been receiving representations from my hon. Friend the Member for Davyhulme (Mr. Churchill), whose constituency is nearby. I shall consider whether we can rearrange the work in any way, to allow all the work to be completed substantially faster. If I can, I shall make a public announcement and, I hope, send copies to the hon. Members concerned.
    Sir Kenneth Lewis: Is my hon. Friend aware that there seem to be so many cones down our main roads nowadays that one wonders whether the Common Market is giving a subsidy on cones, just as it gives a subsidy on barley? Can my hon. Friend ask those concerned to cone off less of the road so that a longer distance than necessary is not coned off, because it is overdone?
    Mr. Bottomley: I accept part of what my hon. Friend says. We are getting better each year. I should like to quote from a letter that I received:
    "I should … like to congratulate the contractors and Department of Transport for keeping the traffic moving in all conditions during the work."
    In this case the work was on the A6. The letter continues:
    "That has been no mean achievement."
    We need to congratulate people when they do well, and to chastise them when they do not.
    Mr. Pike: Does the Minister accept that large sections of motorway are still coned off, with no workmen in sight, and in many cases it appears to happen week after week? Will the hon. Gentleman do something about it? Will he have a look at the M62 and M63, to which my hon. Friend the Member for Eccles (Mr. Carter-Jones) referred, because the chaos in that area is appalling and something needs to be done about it?
    Mr. Bottomley: The chaos is far less than it would have been if we had not gone in for a massive publicity exercise. I congratulate the many road users, commercial and domestic, who have kept away from Barton bridge while some of the work has been going on. If they continue to keep away when they can, obey the direction signs and
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    follow the advice, we shall be able to get the work done and allow traffic to keep moving. I appreciate the problems that it causes to some of the hon. Gentleman's constituents.

    Road Safety (Coaches)
    Mr. Adleyasked the Secretary of State for Transport what further steps he proposes to improve road safety, particularly in relation to coaches.
    Mr. David Mitchell: I shall be consulting very soon on requirements for new coach design and equipment. Later this year we shall be ready to consult on requirements for the fitting of devices to limit the speed of all coaches.
    Mr. Adley: I thank my hon. Friend for that welcome decision. Has he seen the clever but misleading propaganda emanating from the Bus and Coach Council, which provides information on the number of people killed or injured in coaches? In spite of numerous requests, it refuses to give me the information on the number of people killed or injured by coaches. Does my hon. Friend agree that that shows unusual reticence on the part of an organisation, indicating either a lack of information or a deliberate cover-up? If the council cannot provide the information, will my hon. Friend do so, so that we may have some facts by which to judge the evidence of our own eyes?
    Mr. Mitchell: I have not seen the exact publication to which my hon. Friend refers, but I understand that the Bus and Coach Council will shortly be replying to a letter that it received from my hon. Friend.
    Mr. Frank Field: Given the importance that drunkenness plays in the number of accidents, will the Minister tell us which other Government Departments have an interest in reducing that problem? Can he tell us whether they attach the same importance as his Department does to that end? Is he happy with Government co-ordination on that front? Can he give the House an idea of when his Department will bring forward proposals that will attempt to reduce the number of accidents caused by drunkenness?
    Mr. Mitchell: Among other Government Departments, the Home Office takes a special interest. I refer the hon. Gentleman to a question that the Prime Minister answered on 3 July. Needless to say, my hon. Friend the Parliamentary Under-Secretary, who is responsible for roads, takes a special interest in that and in co-ordinating activities concerned with drunken driving.

    Disabled People (Driving)
    Mr. Sternasked the Secretary of State for Transport what steps his Department is taking to advise disabled people about driving.
    Mr. Peter Bottomley: The Department has set up MAVIS, the mobility advice and vehicle information service at Crowthorne in Berkshire, where disabled people can come for advice on their potential ability to drive and on finding a suitable vehicle. A wide range of adapted cars is available for test driving.
    I shall circulate further details in the Official Report.
    Mr. Stern: Will my hon. Friend congratulate the young lady concerned on her appointment? Can he tell the House

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    about the aims of the new initiative and how much it encourages disabled people to look at the possibility of being able to drive, something which they might not have considered previously?
    Mr. Bottomley: I am grateful to my hon. Friend. This may not be a subject which gets people shouting across the Floor of the House, but it is important to develop disabled people's ability to drive. That often means explaining where they can go for specialist advice and to try out cars and controls. I do not want to exaggerate, but if people can see, and if their minds are working, they can probably drive. MAVIS is the person for them to talk to and she can be found at Crowthorne. Those who want to make inquiries should contact the Department of Transport and we will put them in touch with MAVIS.
    Mr. Coombs: When does my hon. Friend expect to announce the results of the review that he has undertaken into the working of the orange badge regulations, which was announced in a recent parliamentary answer?
    Mr. Bottomley: I cannot say precisely when, but I hope that it will be done without too much delay. If it is possible, I may circulate MAVIS' telephone number in some way.
    Following is the information: MAVIS: Transport and Road Research Laboratory, Old Wokingham road, Crowthorne, BERKS 0344-77901/01-212-5257

    Bus Usage (London)
    Mr. Tony Banksasked the Secretary of State for Transport what are the latest available figures he has for bus usage in London.
    Mr. David Mitchell: Provisional figures for 1985–86 show that some 1,150 million passenger journeys were made on all bus services operated for London Regional Transport.
    Mr. Banks: Is it true that there has been a 10 per cent. decline in passenger mileage during the past 12 months? Why, when the London regional passenger committee, road users, bus travellers, bus drivers and the unions oppose the extension of one-person operated buses on the grounds that they lead to more traffic congestion and longer delays in journey times, do the Government insist on extending one-person operated buses throughout London?
    Mr. Mitchell: As is so often the case, the hon. Gentleman is misinformed. London's buses now carry more passengers than they did in 1982 and 1983, and only 0·9 per cent. fewer than in 1984.
    Mr. Banks: I was talking about this year.
    Mr. Mitchell: These are the latest figures that I have. About 70 per cent. of buses are one-man operated. That figure is planned to increase to 74 per cent. by March 1987, but each stage is appraised on its merits. It is a management matter, not a Government decision.
    Mr. Squire: Will my hon. Friend confirm, contrary to the impression created by the hon. Member for Newham, North-West (Mr. Banks), that many of the late GLC'S fears about bus services have proved groundless and that, since the disbandment of the GLC, LRT has been much more responsive to the needs of passengers? Is he aware that LRT is examining the possibility of providing minibuses and other variations which were not considered by the GLC?
    Mr. Banks: Rubbish.
    Mr. Mitchell: As my hon. Friend rightly said, this is only part of a national regime in which we are witnessing a considerable increase in innovation and initiative. As for LRT, professional management and improved efficiency have meant that revenue support has halved. The result is a lower burden on London ratepayers, for which I am sure they will be grateful.
    Mr. Simon Hughes: Will the Minister look again at a matter to which I have brought his attention before—bus services in the docklands of London? He will know that there is grave discontent at the reduction in services, at enormous delays and often missing buses. It is an area of growing population. The Government say that the docklands are being redeveloped. It is no use, however, if they are redeveloped but there are fewer bus services to enable people to get around. Will the Minister please reexamine that, and can we have a better service?
    Mr. Mitchell: The hon. Gentleman draws attention to the increasing population in the docklands, in regard to which I know he will welcome the Government's activities. I shall pass his comments on to the management of LRT.
    Mr. Robert Hughes: Will the Minister consider the facts rather than the theory? Is it not a fact that, in certain areas of London, such as Stepney and Poplar, services are being cut? When asked why, local management says that it is overspending its budget and cannot afford to keep services going. Ministers set the budget for LRT, and it is then shared out. Is it not time that we had a re-examination of what is happening, instead of boasting about how much support is being provided, when funding is being cut at the expense of passengers, who desperately need bus services?
    Mr. Mitchell: London Bus Ltd. is seeking to match supply and demand more closely. That means that in some areas where there is not much demand there are reductions, whereas in other areas there is an increase. Additional routes are being put into operation. It is just not the case that overall there is more than a very marginal reduction.

    Channel Tunnel
    Mr. Wallerasked the Secretary of State for Transport if, when he next meets the chairman of British Rail, he will discuss with him the matter of rail links between the proposed Channel tunnel and the north of England.
    Mr. David Mitchell: The question of rail links between the tunnel and the north of England is a matter for British Rail to decide, but I know that it is anxious to exploit all the commercial opportunities offered by the tunnel. I understand that it is already considering the scope for through services to destinations north of London, making use of the west London line via Kensington-Olympia.
    Mr. Waller: Is my hon. Friend aware that much of the latent opposition in the north of England to the concept of the Channel tunnel would evaporate if people were made aware of the fact that there will be a fast and convenient link between the north of England —particularly the north-east—and the continent? As my hon. Friend said, British Rail is already planning a link via Kensington-Olympia with the west coast main line. Will

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    my hon. Friend ensure that Sir Robert Reid is very much aware of the considerable market that exists along the tracks of the east coast main line?
    Mr. Mitchell: I shall certainly draw the attention of the chairman of British Rail to the point made by my hon. Friend. My hon. Friend will know that, as well as considerable benefits for the north of England as a result of faster through services, there are significant benefits for exporters in the north of the country in terms of freight.

  ATTORNEY-GENERAL

    Westland plc
    Mr. Dalyellasked the Attorney-General if he was consulted prior to the decision to send the Solicitor-General's letter of 6 January 1986 to the then Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine) relating to the legal position of Westland.
    The Attorney-General (Sir Michael Havers): It is not my usual practice to disclose what communications take place between my right hon. and learned Friend the Solicitor-General arid myself in relation to legal advice tendered to the Government.
    Mr. Dalyell: Surely the usual practice is that Law Officers' letters are treated with extreme discretion and most gingerly by the Downing street machine. Why did the Solicitor-General's letter ever go near Mr. Ingham and the press office, unless there was a Prime Ministerial instruction that it was to be leaked?
    The Attorney-General: I am quite certain that there was no such instruction.
    Mr. Teddy Taylor: If there is to be a new political saga over the Westland affair, will the Attorney-General do all in his power to bear in mind that the company is now doing extremely well, is getting plenty of orders and has a very bright future? Therefore, will he do everything he can to make sure that Westland is allowed to get on with the job?
    The Attorney-General: That is not a matter for me, but I welcome what my hon. Friend has said.
    Mr. Nicholas Brown: The report of the Select Committee on Defence into this matter is due for publication on Thursday week — just in time for the recess. Has the Attorney-General seen an advance copy of that report, and does he anticipate at least the possibility of prosecutions arising from the report's findings?
    The Attorney-General: I have not seen the report.
    Mr. Dalyell: On a point of order, Mr. Speaker. In view of the nature of that reply, I give notice that I shall seek to raise the matter on the Adjournment.

    Commercial Court
    Mr. Ottawayasked the Attorney-General if he will make a statement on measures to reduce delays in the Commercial Court.
    The Solicitor-General (Sir Patrick Mayhew): My noble and learned Friend the Lord Chancellor has warmly accepted the recommendations on changes in procedure and practice contained in the recent report of the
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    practitioner members of the Commercial Court committee. It is intended to amend the rules of court before the end of this month.
    Mr. Ottaway: That is a most welcome answer, but the truth is that some cases are taking up to two and a half years to come to trial in the Commercial Court. Given that the Commercial Court is a great foreign currency earner, will the Solicitor-General please ensure that the proposals are implemented as soon as possible?
    The Solicitor-General: I agree that in extreme cases there is a delay of the order that my hon. Friend mentioned. I appreciate his knowledge of the subject from his professional association with that court. It is important that all that can be done should be done to speed up matters, and I am very hopeful that the report of the practitioner members will be very useful in that regard.
    Mr. Carter-Jones: Is the Solicitor-General aware that the Lord Chancellor feels that some of the delay is caused by the delay in producing a transcription of the notes? Will he take into account the fact that the equipment used by my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) is useful in that respect, and will he look at it please?
    The Solicitor-General: I shall see that the hon. Gentleman's point is referred to my noble Friend the Lord Chancellor.

    Lloyd's
    Mr. Yeoasked the Attorney-General how many prosecutions have been brought in the last 12 months against members or former members of Lloyd's.
    The Attorney-General: I take the question to refer to prosecutions of members of Lloyd's arising from transactions undertaken by them in that capacity. There have been no such prosecutions by the Director of Public Prosecutions during the past 12 months. I cannot speak for other prosecuting authorities.
    Mr. Yeo: Does my right hon. and learned Friend agree that by far the best possible deterrent to potential fraudsters is the likelihood of being prosecuted successfully, leading to a conviction? Is he aware that it is offensive to many members of the public and Lloyd's that there are still at large individual former members of Lloyd's who appear to have milked their members of enormous sums?
    The Attorney-General: I agree with my hon. Friend that prosecution and conviction is a good deterrent. Steady progress has been maintained by the fraud investigation group, and I am satisfied that the length of time taken is attributable to the complexity of the case and the nature of the problems, particularly of obtaining evidence from overseas, which must be overcome. All those concerned are endeavouring to bring the investigations to a satisfactory conclusion as expeditiously as possible.
    Mr. Bermingham: Does the Attorney-General agree that part of the problem has been the inadequacy and lack of legal back-up facilities of solicitors? Does he hope that once the Crown Prosecution Service is both fully staffed and manned in London that sort of support service will be available and will enable prosecutions to be brought far more speedily?
    The Attorney-General: We have not had any lack of suitable solicitors available. On the fraud investigation group problem, counsel has been deeply involved throughout, as well as FIG itself.
    Mr. Sackville: Does my right hon. and learned Friend agree that the matter of the PCW syndicate has been as scandalous as it has been damaging to the reputation of the City of London? Will he confirm that everything possible is being done to prosecute those who are responsible?
    The Attorney-General: As I said, the problem has been one of obtaining evidence from overseas. That has been the most significant difficulty. We have now managed to overcome many of the problems that confronted us earlier.

    Crown Prosecution Service
    Mr. Nicholas Brownasked the Attorney-General to what extent he intends to answer parliamentary questions on the Crown Prosecution Service on behalf of the Director of Public Prosecutions.
    The Attorney-General: I ask the House to forgive me for the length of the answer, as this is an important question.
    I intend to adopt the proposals set out in the White Paper on "An Independent Prosecution Service for England and Wales". I shall therefore remain answerable in Parliament for decisions or actions that I or the Director of Public Prosecutions and his headquarters staff take on prosecution matters, and for the policy that is applied by the Crown Prosecution Service in the handling of particular cases. For the reasons given in the White Paper, however, I do not think it appropriate to answer in Parliament for the intrinsic merits of particular decisions taken by local prosecutors unless the Director's headquarters staff have in fact been involved in the case in question. In-so-far as cases in which the Director's headquarters staff have been involved are concerned, I propose to continue my existing practice, as a general rule, of confining answers to the basis of the decision in the particular case, without giving details of the evidence or other considerations which have led to a particular decision. In-so-far as cases which are handled locally are concerned, the Director has told me that he is prepared to inquire into the circumstances of particular cases to which his attention is drawn by hon. Members.
    Mr. Brown: May I give a cautious welcome to that response? Is the Attorney-General aware that his recent convoluted written answer on the same subject to the hon. Member for Cannock and Burntwood (Mr. Howarth) caused some concern?
    The Attorney-General: I hope that I have now cleared up any misunderstanding that there might have been.
    Mr. Hind: When my right hon. and learned Friend considers the Crown Prosecution Service, will he bear in mind the present widespread disquiet among the Bar about the difference in payment for days of prosecuting in a magistrates' court between barristers and solicitors? Will he, together with the Lord Chancellor, have a look at the matter in the near future to see whether a more just settlement of that problem can be reached?
    The Attorney-General: A great deal of nonsense has been talked about this. The figure of £250 a day has been widely quoted as being the sum that solicitors are likely to
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    be paid. That is rarely paid, and when it is, it is to an experienced equity partner who takes a whole day to deal with difficult cases. Solicitors have higher overheads, and that has been recognised by the Bar.

    Official Secrets Acts (Prosecutions)
    Mr. Dubsasked the Attorney-General in how many cases since 1979 involving charges under the Official Secrets Acts he has personally taken charge of the prosecution.
    The Attorney-General: Since taking office in 1979 I have personally conducted three prosecutions for offences under the Official Secrets Acts.
    Mr. Dubs: Does the Attorney-General recall a film shown recently on Channel 4 called "Spying for the Comrades"? Is he aware that a Mr. Brian Gentleman, featured in that film, has since admitted on oath that he passed secrets that he obtained through his job at the Department of Trade and Industry to an official at the Czech embassy? Is he aware that, in the absence of any decision to prosecute that individual, there is a great deal of suspicion that there has been a cover-up because of incompetence by MI5?
    The Attorney-General: I have not seen the programme, but I have read the exposé of the programme in The Sunday Times. I do not know of any occasion in which the person referred to gave evidence on oath. It is certainly not a cover-up.

    EC Budget
    Mr. Teddy Taylorasked the Attorney-General what was the outcome of the decision of the European Court on 3 July about the legality of the budget of the European Assembly; and if he will make a statement.
    The Attorney-General: On 3 July this year the European Court declared void the adoption by the President of the European Parliament, on 18 December 1985, of the budget for 1986. The court further declared that this annulment of the President's act did not call in question the validity of payments made and commitments entered into, before the date of the judgment, in implementation of the purported budget. The remainder of the Council's application was dismissed.
    Mr. Taylor: Following this welcome judgment about the illegality of an excess of about £400 million in the budget, will my right hon. and learned Friend say whether he was conculted by my right hon. Friend the Chancellor of the Exchequer before my right hon. Friend went along with the other Ministers four days later and approved a budget four times as great as that originally approved by the European Assembly?
    The Attorney-General: That is a matter entirely for my right hon. Friend the Chancellor of the Exchequer. The most important point in this case was to establish that the budgetary procedure laid down by the treaty must be respected. This, in the court's judgment, has been done.

  OVERSEAS DEVELOPMENT

    Ethiopia
    Mr. Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs how he proposes to

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    allocate the £3 million rehabilitation grant for Ethiopia, announced on 26 November 1985, Official Report, column 515; and if he will make a statement.
    The Minister for Overseas Development (Mr. Timothy Raison): Some £0·9 million of the £3 million we set aside for relief and rehabilitation was used earlier this year to provide seeds and agricultural hand tools. An ODA team visited Ethiopia in May to discuss the use of the remaining £2·1 million. Following this, pesticides and spraying equipment to a value of £0·6 million were provided in June to counter an emergency pest outbreak. We shall also be providing some £1·5 million for a well rehabilitation programme and for seed production and storage.
    Mr. Chapman: I am grateful for that answer and for the progress report. Is not the main problem the flight of so many Ethiopian refugees into Somalia and the consequent threat to the Somalian economy? Do we not have to face the problem that we must remove the fear of Ethiopians against the oppressive nature and policies of that regime? Does my right hon. Friend agree that for us to give money will not necessarily solve that particular and vitally crucial question?
    Mr. Raison: There are many problems about Ethiopia and the nature of the regime. In the past year we have provided £750,000, through the United Nations High Commissioner for Refugees and Oxfam, specifically for refugees in Somalia. I have just allocated a further £800,000 for the same refugees.

    World Bank
    Mr. Yeoasked the Secretary of State for Foreign and Commonwealth Affairs when he last met officials of the World Bank.
    Mr. Raison: My right hon. and learned Friend and I had meetings with the then president of the World Bank on 13 March. My officials have also recently had separate discussions here with the two senior vice-presidents.
    Mr. Yeo: Bearing in mind that last year there was a transfer of resources from developing to developed countries, does my right hon. Friend share my concern at the implications of that position for debtors, creditors and the world economy? Will he undertake to support any initiatives proposed by the World Bank designed to reverse that position?
    Mr. Raison: The World Bank is concerned with this problem, and so am I. We support a generous eighth replenishment for IDA and in due course there will be a new general capital increase for the bank. Also, we welcome the proposed role of the World Bank in implementing Secretary Baker's initiative, which is to make fast disbursing loans available to support the adjustment efforts of heavily indebted countries.
    Mr. Beith: Does the Minister hope to have a meeting with the new president of the World Bank before very long? Will he take the opportunity to stress that it cannot be right for the Third world to be sending more money to the World Bank than it is getting from it and that therefore it is important to get new flows to the Third world—perhaps, for example, by increasing the involvement of Japan and Japan's surplus in the World Bank?
    Mr. Raison: I hope to meet the president of the World Bank before too long. As I have just said, both the World
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    Bank and the Government are concerned about this problem, and I have outlined some of the additional resources which we believe can and should be made available to the World Bank.
    Mr. Bowen Wells: Has my right hon. Friend taken the opportunity to discuss with officials of the World Bank the problem that exists as a result of the debt problem, particularly in Africa, and the fact that the most optimistic forecast by the World Bank is that African countries will be in greater debt at the end of the next decade than they are at present? Is my right hon. Friend planning with the World Bank to make available additional funds on concessionary terms in an effort to solve that problem?
    Mr. Raison: We are of course concerned about the problem. Our belief is that the best approach is to focus sums of aid on those countries that are able to make adjustments to their policies so that their economies can be made effective. We shall be very happy to support them.
    Mr. Tom Clarke: Is the Minister aware that in its development report 1986 the World Bank referred to the need for an increase in bilateral aid and relief for sub-Sahara? Is the Minister's Department making progress in an effort to achieve those objectives?
    Mr. Raison: I am very concerned about finding opportunities in Africa where we can give the kind of aid that will help to produce good results. Almost certainly that means aid that is matched by effective policy reforms.
    Mr. Heathcoat-Amory: Before my right hon. Friend authorises additional credit for developing countries, will he examine the extent to which their economic plight has been self-inflicted by years of mismanagement? Will he be very careful not to underwrite mistaken policies or to bail out those who are responsible for them?
    Mr. Raison: It is very important to match aid with policies that are likely to prove effective. The encouraging aspect of the special session of the United Nations on Africa that was held in May was that the African countries themselves were prepared to be analytical about their own policies and in some cases their own policy failures.

    Central America
    Mr. Stuart Hollandasked the Secretary of State for Foreign and Commonwealth Affairs whether he intends to increase United Kingdom official development assistance to central America.
    Mr. Raison: I have no plans to do so.
    Mr. Holland: Does the Minister really think that it is right that inter-American Development Bank loans to Nicaragua should be frozen because of the concern of the United States to destabilise the democratically elected Government of that country? Further, does he oppose the United States Administration in their efforts now to gain a veto over all inter-American Development Bank lending? Does he think it right that a superpower should be able to dominate such a regional development bank, as if there had been no end to the Monroe doctrine? Will he take advantage of the coming recess to visit Central America, including Nicaragua, to evaluate the situation for himself?
    Mr. Raison: I have no plans to visit Nicaragua, but our view about inter-American Development Bank loans has always been that they should be made on the basis of objective economic analysis.
    Mr. Forman: Although it may not be appropriate to increase United Kingdom official development assistance to countries in that part of the world, does my right hon. Friend look favourably upon the prospect of increasing assistance through the European development fund or other European instruments?
    Mr. Raison: The European Community is interested in giving aid to Central America and, among other countries, it gives quite a substantial amount of aid to Nicaragua. There is no doubt that the Community is looking in that direction, and with the accession of Spain it is likely that there will be more pressure to spend aid funds in Latin America.
    Mr. Deakins: What are the obstacles to Britain giving more bilaterial aid to Nicaragua?
    Mr. Raison: I do not think that there are obstacles, but it is a matter of priorities. Our priorities are to aid the poorest countries and Nicaragua is not one of the poorest countries. We focus our aid to a considerable extent on countries with which we have a long, traditional connection.

    Gujerat
    Mr. Jannerasked the Secretary of State for Foreign and Commonwealth Affairs what proposals he has to provide aid for the state of Gujerat, India for the year 1986.
    Mr. Raison: In 1986 we expect to complete expenditure of the £43 million committed to the construction of two fertiliser plants at Hazira in Gujerat. We shall also continue our £2 million support for the integrated rural development project in Anand, which is helping to improve community health and family welfare in some 200 villages in Gujerat.
    Mr. Janner: Is the Minister aware of the great concern felt among the Gujerati community in this country at the suffering being experienced in the state of Gujerat due to the ravages of natural miseries that keep occurring, and to which none of the Minister's proposed resources apply? Is there no hope, for example, of matching aid being made available if the community in Britain raises money in order to help those who are suffering in the state of Gujerat?
    Mr. Raison: We consider joint funding schemes from charitable organisations, and are always willing to do so but in respect of official aid we have to respond to the priorities set down by the Indian Government, and we cannot go behind their backs and come up with our own programmes.

    Africa (Front-line States)
    Mr. Simon Hughesasked the Secretary of State for Foreign and Commonwealth Affairs what proportion of the aid to Africa is designated for front-line states adjoining South Africa.
    Mr. Raison: In 1985, 13 per cent. of gross bilateral aid for African countries was provided to those front-line states adjoining South Africa, Botswana, Zimbabwe and Mozambique.
    Mr. Hughes: Might not one way of helping the situation in southern Africa be to increase the aid budget to the front-line states, which would then be better able to resist any action by South Africa, should that country feel itself to be under any pressure as a result of policies that the Government may then, we hope, be able to introduce?
    Mr. Raison: We have recently, both through the Southern African development co-ordination conference and bilaterally, stepped up our offers of aid to exactly those countries. That aid includes, for example, important transport projects in Mozambique.
    Sir John Biggs-Davison: Is it not preposterous of Opposition Members to call for more aid to states that are blackguarding Britain across the world? Will the Government give an assurance that there will be no extra aid granted because of sanctions against South Africa?
    Mr. Raison: As I have said, our policy is to try to build up the economies of those countries in the region in order to decrease their dependence on South Africa. I expect that policy to continue.

    MI5
    3.31 pm
    Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker.
    Mr. Speaker: Does it arise directly out of questions?
    Mr. Campbell-Savours: In the presence of the Attorney-General, I should like to give you notice, Mr. Speaker, that I wish to raise a point of order on the MI5 matter that was dealt with in the newspapers during the weekend.
    Mr. Speaker: If points of order do not arise directly out of questions, I shall take them after the statement and the Standing Order No. 10 application.

Environmental Initiative (UK 2000)
3.32 pm
The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): With permission, Mr. Speaker, I shall make a statement.
My right hon. Friend the Secretary of State for the Environment has today launched, in association with my right hon. Friends the Secretaries of State for Employment and for Wales, and my right hon. and learned Friend the Secretary of State for Scotland, a new initiative to encourage more local environmental improvement work by both volunteers and Manpower Services Commission community programme teams. My right hon. Friend informed the House of the general terms of this initiative in answer to a question from the hon. Member for Copeland (Dr. Cunningham) on 20 June.
The initiative will provide a focus for new projects which improve the environment and create jobs. It will involve a wide range of environmental action. It will include the Government, voluntary organisations and the private sector and will link with other Government initiatives concerned with the environment and with job creation. It will tackle problems of the built and the natural environment, in both town and country, and be concerned with both improving the environment and enhancing people's enjoyment of it. It will aim to provide challenging work and training for those participating. It will also aim to create worthwhile new jobs, both in the improvement projects themselves and in the new enterprises that some projects will help to generate.
The right hon. Friend the Secretary of State has invited a number of established national voluntary organisations to act as agents in launching the initiative. These are the British Trust for Conservation Volunteers, The Civic Trust, Community Service Volunteers, the Groundwork Foundation, the Keep Britain Tidy Group, and the Royal Society for Nature Conservation. I expect that others will join later. My right hon. and learned Friend the Secretary of State for Scotland and my right hon. Friend the Secretary of State for Wales will be holding similar discussions with appropriate organisations in Scotland and Wales.
The agents will promote programmes of work and assist the establishment of local projects. I hope that such projects will have the support of local authorities, local business and local residents. Initially, work will he concentrated on the five important themes of greening the cities, conserving the industrial heritage, tackling litter, helping tourists on the move, and making more of nature.
A new organisation is being established, outside the Government, to promote the whole initiative, to determine priorities, to seek business sponsorship and to monitor performance. This new organisation, to be called UK 2000, will be directed by a board on which participating voluntary organisations will be represented together with a number of independent members. Richard Branson, chairman of the Virgin Group, has agreed to be the chairman of this board. The other independent board members who will serve in a personal capacity, will be Jean Denton, head of external relations at the Rover Group; Ernest Hall of Dean Clough Halifax; John Pontin of Bristol 1000; and Stephen O'Brien of Business in the Community.
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The Department of the Environment will pay grants to the participating agents and the new organisation to a total of around £750,000 in 1986–87, and at least at that level in the next two years. I am confident that business sponsorship will augment these resources. In addition, the Manpower Services Commission will contribute through the community programme the costs of providing temporary jobs for long-term unemployed people, which it is estimated will amount to £22 million in a full year.
Dr. John Cunningham: Given the massive problems of dereliction, decay and neglect, additional initiatives, however modest, are worthwhile. We wish this one success, but it appears unlikely to have a major impact on the environment or the creation of jobs.
Is the Minister aware that there is little of substance in what he has to had to say to the House today? What, if any, additional financial resources, over and above existing departmental budgets, will be allocated as a result of the statement? How many additional places Hill the MSC create as a result of the announcement? Will any extra permanent jobs result?
Why, given that the local authorities are and will remain the major agencies for all the work, have there been no discussions or consultations of any kind with the local authority associations about the scheme?
Has not each of the policy areas—greening the cities, conserving our heritage, tackling litter and making more of nature, whatever that might mean — suffered dramatically because of the massive reductions, now totalling £17·5 billion, in rate support grant as a result of the Government's policies?
Does the Minister recall that the Secretary of State for the Environment, when Secretary of State for Transport, issued a circular, to take effect from 1 April this year, which urged local authorities to remove all litter bins from all-purpose trunk roads? Does he recall that the same circular recommended local authorities not to scavenge roads, not to sweep them and not to remove litter? That was Government policy announced in April. What has changed?
Will the Minister explain to the House what impact the initiative will have, given that the Government have reduced the three grant-related expenditure assessments for refuse collection, refuse disposal and environmental works by 10 per cent. in real terms in the past seven years?
Given that full-time jobs have been lost, particularly in the local authorities, is this not just another example of the Government undermining full-time employment and replacing it by temporary, lowly paid work of a part-time and non-permanent nature?
Finally, is it not inadequate in every sense to meet the real needs of any one of those policy areas to make this announcement today? Is it not totally inadequate to tackle all of them together? Why do the Government not restore some of the cuts that they have imposed on local authorities and let them get on with the job?
Mr. Waldegrave: If that was a welcome from the hon. Gentleman, I should not like to hear what he says when he is trying to send his guests away. However, I was grateful for the way in which he started. No one says that this initiative will solve all the problems, but it will be useful, and I am grateful to the hon. Gentleman for confirming that fact.
The hon. Gentleman mentioned the rate support grant and GREAs. As he knows, the Audit Commission has

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shown that there are enourmous savings to be made in local authorities' spending on refuse disposal and collection. We hope that those economies, without loss of service, can still be made.
My right hon. Friend the Chancellor of the Exchequer, in his Budget speech, announced 35,000 additional community programme places. This takes up 5,000 of those places.
Dr. Cunningham: New places?
Mr. Waldegrave: It is 5,000 of the additional places announced for next year. We aim to focus and use those in a coherent and sensible programme.
In addition, there are the lesser sums that I reported coming from the Department of the Environment—
Dr. Cunningham: New money?
Mr. Waldegrave: —from the Department of the Environment's budget for the grants to voluntary organisations and for the small central staff.
My hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) has written to local authority leaders to urge them to participate in the scheme and to offer discussions about it. I hope that the leaders will take up that offer.
Sir Paul Hawkins: I am delighted that the scheme is getting off the ground, and I am sorry that the Opposition are so damning with faint praise about it. I am glad that the British Trust for Conservation Volunteers—an excellent body—is to be part of the new body.
Will my hon. Friend work closely with the Minister of Agriculture, Fisheries and Food to make sure that there is not only a thriving countryside, but a thriving agriculture, without which there is no possibility of the countryside being alive and available to tourists and holidaymakers to enjoy?
Will my hon. Friend work closely with the Council of Europe's Campaign for the Countryside 1987–88, in which, I believe, a member of his staff is taking part?
Mr. Waldegrave: The answer to my hon. Friend's final question is yes. I am grateful to him for emphasising the importance of work in the countryside. Earlier this year my right hon. Friend the Minister of Agriculture, Fisheries and Food and I jointly announced a farm and countryside initiative, using community programme places. That will run alongside the new initiative; a complementary programme is already in place.
I agree with my hon. Friend that it would have been nice if we had had a general welcome for the initiative. I hope that it will get a general welcome in the country, even if the professional Oppositions have to oppose it.
Mr. Simon Hughes: Does the hon. Gentleman not realise that while any initiative is welcome and partnership funding is welcome, we have so far heard that there is either no extra money or a minuscule amount of extra money, and that there will be no new jobs or only a minuscule number of new jobs? As long as announcements are all presentation and no policy, they are bound to be criticised. Can the hon. Gentleman tell us how many new jobs will be created and how much of the £22 million is new money?
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Would it not have been better, more effective and less bureaucratic to put a new environmental programme into, for example, the urban programme and to use local authorities and their staff as part of the implementation process? Even at this late stage, will the hon. Gentleman guarantee that local authorities will be consulted so that the initiative can be effectively delivered, without bureaucratic and administrative diversion, and so that we can see an improvement in the urban environment and not just a method of publicising the Government's apparent but belated conversion to environmental policy?
Mr. Waldegrave: It ill-behoves a representative of the Liberal party to complain about something being presentation without policy, but I let that pass. It was slightly surprising that the hon. Gentleman should suggest that this small organisation would be a new bureaucracy and that it would have been better to put the money into the local authorities' pot. The new organisation will involve some very able people who are willing to give up time to do some useful work for the community. I hope and believe that it will be a success.
Mr. Paul Marland: Is my hon. Friend aware that his announcement will be warmly welcomed in Cinderford, a town in my constituency in the Forest of Dean? Is he aware that Cinderford is sorely troubled by marauding sheep and their droppings, which are deliberately scattered on the pavements and pastures? Can UK 2000 assist in clearing up the mess?
Mr. Waldegrave: I am baffled, because my hon. Friend tells me of the sheep's intentions by using the word "deliberately". I do not think that my hon. Friend's problem will be the first project for UK 2000, but I shall draw it to the attention of the chairman of the board to see whether he has any useful suggestions.
Mr. Allan Roberts: Is the Minister aware that his Government are turning tragedy into farce? They have handed over their responsibility for foreign aid to Bob Geldof and cut foreign aid dramatically. They have handed over part of their responsibility for the National Health Service to Jimmy Savile, and are handing local responsibility for collecting refuse to Mr. Branson to cut the money needed for street cleaning. May we have an assurance that the Government do not intend to hand over responsibility for law and order to Perry Mason, to Kojak or to Boy George? Does the Minister realise that these ridiculous palliatives will be recognised for what they are by the British people?
Mr. Waldegrave: I am not sure whether it is all that clever to make jokes about Boy George, but that is for the hon. Gentleman to judge, with his usual good taste. I think that the hon. Gentleman is wrong. Some people with flair and imagination will be helping people to work at some of the problems which common sense tells us must be tackled.
Mr. Ivor Stanbrook: Do the things about which my hon. Friend has told us come within local government responsibilities? Does he agree that we do not need more money to be spent, but that we need a bit more competence by local authorities and a bit more attention to their basic duties? On our doorsteps at Westminster, litter is a disgrace.
Mr. Waldegrave: The initiative will tackle matters which go wider than local authority responsibility.

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Anyway, I think that it is thoroughly good to have some competition in these matters. I expect that the organisation will come up with some ideas about which local authorities have not thought. There is plenty of room for local authority participation, and I hope that some will participate.
Mr. Tony Banks: Is this not just a further example of Prime Ministerial gimmickry, which seems more likely to be geared to securing a knighthood for Richard Branson than to clearing the litter from our streets? Will the Minister answer the question asked by my hon. Friend the Member for Copeland (Dr. Cunningham)? Instead of indulging in gimmickry, why do the Government not provide extra resources for local authorities so that they can deal with the problems in the inner cities? However, if we are to have it, may I have an undertaking that at least one of the teams will be in Newham?
Mr. Waldegrave: That is usual. The hon. Gentleman says that a scheme is a disgrace from start to finish, but then asks for it to operate in Newham. I thank him for the compliment. I look forward to the hon. Gentleman refusing his knighthood in 30 years' time. Much of the initiative covers areas outside local government responsibility. Local government has plenty of resources, and this will add usefully to them.
Mr. John Mark Taylor: Does my hon. Friend accept that a high proportion of litter on our suburban high streets is discarded food and drink containers? Will he reflect on the undesirability of eating in the streets and perhaps make regulations for fast food takeaways?
Mr. Waldegrave: The Keep Britain Tidy Group, which is part of the venture, has done a lot of work with fast food chains to ensure that litter bins are placed outside their shops. The board will be tackling such practical and sensible ideas.
Dr. Norman A. Godman: How much of the £22 million will come to Scotland, and how many new jobs will be created in Scotland? How many of Mr. Branson's colleagues on the board—I did not catch the names—are Scottish and how many are Welsh? Do the Government intend to set up similar committees to manage the gimmick in Scotland and Wales?
Mr. Waldegrave: My right hon. Friend the Secretary of State for Wales and my right hon. and learned Friend the Secretary of State for Scotland are discussing the matter with voluntary organisations to see how best to pursue this in Scotland and Wales. Doubtless they will make some announcement in due course.
Mr. Michael Stern: I congratulate my hon. Friend on this initiative, which will harness the undoubted goodwill that exists outside Government and quasi-government organisations towards environmental initiatives. May I ask my hon. Friend to reject the sour attitude of the hon. Member for Copeland (Dr. Cunningham) and others who believe that the only worthwhile environmental initiative is one that employs local government officers?
Mr. Waldegrave: I agree with my hon. Friend. However, I do not believe that the hon. Member for Copeland (Dr. Cunningham) takes the attitude that my
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hon. Friend says, because he welcomes the work done by the Keep Britain Tidy Group and others. This initiative is a useful focus for getting some of these groups together, providing some new community programme places and providing a focus for imaginative schemes. I do not see how anybody can think that it is anything other than a good idea.
Mr. Greville Janner: Does the Minister not feel that this is a dim and distorted echo of the afforestation programme of the Roosevelt Administration, which did so much, so well, so long ago, but that in fact it will create a minute number of jobs? Will the Minister tell us how many of the 5,000 jobs which he says can be expected to flow from it will be permanent?
Mr. Waldegrave: We hope, as in all community programme schemes, that there are some permanent jobs. I am not making any unreasonable claims. Everybody in this country, in my experience, believes that there is a problem of clearing up the country. There are plenty of unemployed youngsters, so why not put the two together?
Mr. Michael Fallon: Is my hon. Friend aware that one reason why the River Skerne in Darlington is so polluted and litter-strewn is that the task of clearing it up falls between the Northumbrian water authority and the Darlington borough council? If this sort of imaginative initiative can cut through those local bureaucracies it will he very welcome to my constituents.
Mr. Waldegrave: My hon. Friend is right. There are plenty of local authorities doing a good job, but there are plenty of others which use the sort of excuse that my hon. Friend mentions for not being as imaginative as they could be. I cannot see how anybody can do anything other than welcome an additional player with some additional money in this area.
Mr. Nigel Forman: Is it not the case that all schemes to improve the environment, such as this or other schemes are welcome because it is a good cause in itself? Will my hon. Friend take note of the fact that the scheme must embrace a much wider area than simply litter, because clearly the main answer to that problem, as my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison) has said on many occasions, is a more aggressive policy on prosecution?
Mr. Waldegrave: My hon. Friend is right on that point. However, contrary to what the press has said in the leaks about this, it goes much wider than litter. I hope that we will soon get away from that and see some rather imaginative and different proposals which will take the initiative forward in the future.
Several Hon. Members rose—
Mr. Speaker: I shall call the three hon. Members who have been rising.
Mr. Nicholas Lyell: Is my hon. Friend aware that if those who are unemployed and work on these schemes are given help to get work that can often be very successful? Under the Bedfordshire rural community council, at one stage 58 out of 70 people on a similar scheme had been moved into mainstream jobs.
Mr. Waldegrave: My hon. and learned Friend is right. I have been associated with schemes in Bristol; for example, the Brunel engine shed, which has community

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programme volunteers working on it, some of whom have got permanent jobs out of it. It is always difficult to predict how many. However, they are valuable schemes in themselves and they often lead to good and permanent jobs.
Mr. Tom Sackville: Is my hon. Friend aware that this initiative will be very welcome to the residents of Bolton, and especially to the Bolton chamber of commerce, which has repeatedly called for such an initiative, pointing out that cleaning up our inner cities is good for morale and good for inward investment in the parts of the country that most need it?
Mr. Waldegrave: My hon. Friend is right. People outside the Chamber listening to the sour response of the Opposition will say that they are listening to an example of the "not invented here" syndrome.
Mr. Richard Holt: Will my hon. Friend ensure that part of the remit of Mr. Branson is to ensure that some of his people go into schools and teach children not to throw litter, as the teachers have abdicated their responsibility in that respect? It would be a good thing if we eliminated the problem at an early stage, through the schools.
Mr. Waldegrave: For better or worse, I suspect that Mr. Branson has rather more pull when it comes to persuading youngsters to do things than have some of the distinguished Opposition Members who are facing me.

Commonwealth Games
3.54 pm
Mr. Dennis Canavan: 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 threat to the Commonwealth games caused by the Government's continuing refusal to implement effective sanctions against South Africa."
You turned down a similar request last Thursday, Mr. Speaker, but the matter has become more urgent since then. Five countries have definitely withdrawn from the Commonwealth games — Ghana, Nigeria, Kenya, Uganda and Tanzania — and unless the British Government take action now against the South African Government there is a strong possibility of other black African countries and Asian countries, such as India, boycotting them. Indeed, the very existence of the games, which are due to start next week, could be endangered.
Yesterday the Commonwealth Games Federation took the correct decision of banning the South Africans, Zola Budd and Annette Cowley, but the black African countries are rightly demanding effective action by the British Government against the South African Government. The people of Scotland and other parts of the United Kingdom are demanding such action as well, and over 30 Members from various parts of the United Kingdom have signed early-day motion 1100, which stands in my name and which is to that effect. If we are to judge from the weekend statement by a former Tory Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), there is at least some support on the Conservative benches for more effective measures.
In 1970, when the Commonwealth games were last held in Scotland, they were hailed throughout the world as the friendly games. Many young people, both black and white, came together at Meadowbank stadium from all parts of the Commonwealth in a spirit of sport and friendship. That friendship, which reflected the unity of the Commonwealth, is now endangered by a spoilsport at No. 10 Downing street, who is putting her misplaced loyalty to President Botha before the loyalty of the United Kingdom to its many friends throughout the Commonwealth. I ask you, Mr. Speaker, to consider my application.
Mr. Speaker: The hon. Member for Falkirk, West (Mr. Canavan) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the threat to the Commonwealth games caused by the Government's refusal to implement effective sanctions against South Africa."
I have listened carefully to what the hon. Gentleman has had to say, but I must take into account the various criteria laid down in the Standing Order. I regret that I do not consider the matter which he has raised as appropriate for discussion under Standing Order No. 10 and I cannot, therefore, submit his application to the House.
Later—
Mr. Jeremy Corbyn: On a point of order, Mr. Speaker. Further to the application under Standing Order No. 10 by my hon. Friend the Member for

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Falkirk, West (Mr. Canavan), can you advise the House of the best way in which to ensure that the Home Office re-examines the nationality status of Miss Zola Budd? Clearly the Commonwealth Game Federation has found something seriously wanting in her nationality status, and it has referred to the fraud by which she received that nationality. Can you advise us how the Home Secretary can be brought to the House and made to comment on this matter?
Mr. Speaker: It is not for me to advise the hon. Gentleman on tactics. There are many other opportunities for the hon. Gentleman to make his point.
Mr. John Carlisle: Further to that point of order, Mr. Speaker. Can you advise me on the matter of hon. Members making applications under Standing Order No. 10? The hon. Member for Falkirk, West (Mr. Canavan) has raised a matter which is not within the control of the House or the Government. Is it right that hon. Members should parade political views on the Floor of the House when the matters in question have nothing to do with the Government? If the Commonwealth Games Federation is foolish enough to expel various people from the games, that is not a matter for the House. The hon. Gentleman is wasting our time.
Mr. Speaker: Hon. Members frequently raise matters under Standing Order No. 10 about which they are deeply concerned. I have to rule whether such applications should have precedence over the Orders of the Day.

Social Security Bill
3.57 pm
Mr. Michael Meacher: On a point of order, Mr. Speaker. Is it not an abuse of the prerogative of the House that the Secretary of State for Social Services is unwilling to make a statement and has instead been reduced to trailing in the press the concessions that he proposes to make in another place to stave off a further mauling of his Social Security Bill? Is it not a constitutional outrage that amendments which were debated in depth during 160 hours of committal proceedings in this place, and which were voted down by the Government, should now be dumped unceremoniously in another place cynically to try to head off another massive defeat over the ending of free school meals for half a million children of low-income families?
As the Bill is so shot through with inconsistencies and botched up compromises, is it not time that the Secretary of State had the courage to admit to the House that the Bill commands no writ beyond the confines of his party Whip, has no electoral mandate and is roundly detested by the majority of the population? Surely he should now withdraw it, or resign?
Mr. Speaker: The hon. Gentleman knows that none of this is a matter for me. The Bill is in another place, and no doubt it will return to this House with Lords amendments, but I do not know when that will be.

MI5
3.59 pm
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. I should like to raise the matter of the revelations about MI5 in the newspapers last week. At the beginning of this point of order I should like to make it clear that I do not intend to veer into areas in which you may want to rule me out of order, in so far as I may refer to matters specifically subject to the injunction.
Mr. Speaker: Order. Before we progress too far in this matter I must state that, initially, I cannot see that this has anything to do with me.
Mr. Campbell-Savours: There have been three successive hearings in the courts and the Attorney-General has succeeded in taking out injunctions against The Guardian and The Observer to prevent them from repeating allegations made in an article in The Observer on 22 June. That article was written by David Leigh and Paul Lashmar.
I have been informed—as all other hon. Members would have been informed if they had read the newspapers at the weekend—that last week an Australian journal— the Australian Financial Review—referred to M15 activities at international conferences and in London. I have also learnt that the CBS, in a national radio programme in Sydney, made a statement in which Mr. Richard Hall discussed certain aspects of Harold Wilson's premiership.
This is a ridiculous situation. We are unable to discuss the buggings, yet the Australians can discuss the matter in their Parliament. They are free to discuss matters that are subject to court proceedings in this country, yet we are not allowed to discuss those matters here. Is it not time that the sub judice rule was examined as it relates to this House? Surely hon. Members should be unshackled and free to debate issues which are freely debated in other Parliaments — in this case, the Australian Parliament, which is a Commonwealth country?
I do not expect, Mr. Speaker, that you, will be able to rule precisely today. However, these are serious matters. It is fundamentally wrong that I, as a Back-Bench Member, and my hon. Friends cannot ask questions about issues relating to the activities of MI5 in this country, when politicians in the Australian Parliament are free to raise such matters and ask questions and receive answers in their Parliament. A distinction must be made, and we must examine these matters carefully.
Mr. Speaker: The hon. Gentleman must appreciate that I am not responsible for anything that happens in the Australian Parliament. He may be correct in his submission, but that is not a matter of order; it is a matter for debate. If the hon. Gentleman will try his luck in an Adjournment debate, I shall try to be present to hear him.

BILL PRESENTED
  TELECOMMUNICATIONS (AMENDMENT)
  Mr. Chris Smith, supported by Mr. Derek Fatchett, Mr. Doug Hoyle and Mr. Ian Mikardo, presented a Bill to amend the Telecommunications Act 1984 to give the Director of OFTEL the power to publish reports and to make recommendations and to give him the duty to secure compliance with his recommendations: And the same was read the First time; and ordered to be read a Second time on Friday 24 October and to be printed. [Bill 206.]

STATUTORY INSTRUMENTS, &c.
Ordered,
That the Draft Development Board for Rural Wales (Extinguishment of Liabilities) Order 1986 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Maude.]

Agricculture and the Rural Economy
4.5 pm
Mr. Andy Stewart: I beg to move,
That this House notes the uncertainty felt by agricultural and related industries due to the need to reduce the production of commodities in surplus, and the problems that reduction in agricultural activity and employment can cause to the rural economy and rural infrastructure generally; and urges the Government to set out its policy towards agriculture and the rural economy in a White Paper or similar document.
Last week, my hon. Friend the Member for Lincoln (Mr. Carlisle) remarked that if an hon. Member was lucky enough to win a ballot allowing him to introduce a motion, he would become a statistic. Having won a similar ballot 18 months ago, I suppose that I am a statistic twice over. Some would say that I am lucky. Indeed, Mr. Speaker, I must be extremely lucky winning two ballots and representing England's most famous constituency, with its renowned coalfield, agriculture and heritage.
Today's debate on agriculture and the rural economy is timely because Britain and our European partners, along with the other major food-producing nations, face a surplus of unwanted food. The production record of British farmers during the past 45 years is unrivalled by any other industry in this country. Can any hon. Member honestly say that 10 years ago he would have predicted this crisis of over-production? Today our vital agriculture industry is marking time at the crossroads, waiting patiently for a directive from the Minister, on which road to follow.
Looking beyond today, what will we see? Will there be production quotas for farm products in surplus or will we see land set aside, or alternative uses? Perhaps a lower input system of farming will be considered alongside the demand for organically produced food. My hon. Friend the Parliamentary Secretary need only remember one thing in making a decision and that is to sustain farmers' incomes at a viable level.
Last year's 43 per cent. fall in net farm income brought 20 per cent. of British farmers to near bankruptcy. That must not be repeated unless we wish to see the complete destruction of the rural economy and ancillary industries. Many of those industries, especially the machinery manufacturers, are already suffering through lack of orders. This, plus agriculture's uncertain future, could threaten the jobs of the 800,000 people employed in the supply and processing industries, which are largely dependent on agriculture for their inputs or outputs.
The traumatically imposed milk quotas in 1984 clearly showed the dangers to our ancillary industries by the closures of creameries in the traditional dairying parts of Britain with the resulting loss of jobs. The dairy industry — the farmers and manufacturers — is dreading the consequences of a further 3 per cent. cut in milk production. The European Community buying-in programme at 18p a litre will meet a lack of response. Why sell one's right to a steady income when the alternatives are in surplus? I hope that my hon. Friend the Minister recognises that and ups the figure to at least 27p per litre. That will have the required effect and give the Minister an additional quota to redistribute among the small and medium-sized dairy farmers hardest hit by the imposition of dairy quotas in 1984.
For grassland farmers, the alternatives will possibly be beef or sheep production, but with the review of the

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variable premium scheme — which is under discussion and on which the outcome is uncertain—this is not the time for such farmers to make a fundamental change in farming practice. During the past three years' Community price-fixing negotiations, our variable scheme has been protected by the Minister, but at what cost to the other commodity sectors?
In the subsequent trade-off, the imposition and acceptance of milk quotas by some member countries was achieved only after accepting some of our production quota in return for Britain's retention of the variable premium scheme. Does my right hon. Friend intend the results of the beef and sheepmeat review to become a permanent feature of the common agricultural policy instead of accepting the trade-off with our partners, who know only too well of our commitment to this scheme, which gives consumers the advantage of cheaper lamb and beef instead of putting it into further store?
The problems of agriculture are not confined to the livestock sector, but face the arable farmers as well. Cereal over-production is currently being pursued by a lower price mechanism; a 20 per cent. price reduction during the past two years has resulted in increased yields compensating the loss in price. That has exacerbated the problem. In addition, we have the iniquitous 3 per cent. co-responsibility levy, introduced on 1 July. A similar levy on milk production failed miserably, so why compound the failure rate — or is it, as producers suspect, the means of sustaining the gravy train for the fat cats accommodated in Brussels?
I can tell my hon. Friend the Parliamentary Secretary that farmers prefer an honest, straightforward price reduction that can be understood and seen to be fair throughout the Community. The present confusion in the cereals market as to who should be paying the levy is only the beginning of another sorry saga, part of which was revealed last week when the Commission decided that Scottish farmers rolling their own oats for making porridge would be subject to the levy. First it was whisky, now it is porridge, and before December we shall have a levy on catching haggis.
The Minister must surely recognise by now that the only way to contain the cereal mountain is by quota or annual licence. It is madness to spend on storage money intended for producers. Simple common sense tells me that we can pay farmers more for producing less, thus eliminating the storage charges and have millions of pounds left over to pay farmers to go into other types of farming, instead of paying farmers to go out of certain products, which then upsets those traditional producers and markets. The inability of the EEC to manage the common agricultural policy properly and efficiently has brought agriculture into disrepute with British taxpayers, and will eventually see the end of the CAP in its present form.
I now refer to the subject of sugar beet and the important matter of the future of the United Kingdom sugar industry, currently being considered by the Monopolies and Mergers Commission. While I do not wish to comment on the British Sugar ownership issue itself, other than to say that I see an overall benefit in EEC terms in a unified United Kingdom sugar industry, I want to speak on the position of beet growers, whatever the eventual outcome of the present situation. Given any practical solution that I can foresee, our 11,600 beet growers will still be selling their beet to a monopoly
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processor. They have no other outlet for their beet, which is a vital break crop in the arable rotation, and vital also to the many people associated with its production cycle.
That, of course, has been the situation ever since the Government divested themselves of their shareholding in the original British Sugar Corporation some six years ago. My beet-growing constituents tell me that the generally harmonious relationship that they have subsequently enjoyed with the present owners, S. and W. Beresford, was largely based on a series of undertakings offered by Beresford at the time, to both the Ministry of Agriculture, Fisheries and Food, and to growers through the National Farmers Union.
However, other than an undertaking to operate British Sugar as a separate business within the Beresford group, those undertaking have no legal basis, and as things now stand, any new owner of British Sugar could change those arrangements substantially, with growers powerless to stop them. That possibility could represent an intolerable abuse of a monopoly position, and it can be resolved only by those same undertakings, details of which I understand have already been submitted by the NFU in its evidence to the MMC, being incorporated as legally binding on whomsoever eventually gains control of British Sugar. Only in that way will the legitimate long-term rights and interests of beet growers and those who work in the processing factories be adequately safeguarded and protected.
While growing food will remain the prime job of the farmer, food production is not the only demand that the public have of the countryside. We need to create income and jobs through a network of small businesses in the rural communities. There are opportunities, to be developed by farmers, providing facilities for tourism, recreation, and farm shops based on the existing farm businesses. Farmers represent a large proportion of established rural businesses and as such have a head start in seizing a wide range of new business opportunities in the countryside. Those opportunities will lead to a requirement for more Government support in the form of development and advice. I am sure that we have the right vehicle for that through our Agricultural and Development Advisory Service. The initial message surely must be to diversify and prosper.
Agriculture in England and Wales is faced not only with short-term economic problems but with long-term uncertainty. I accept that the Government cannot make individual decisions on cropping and stocking for 200,000 farmers, but such decisions are heavily influenced by Government policy. I believe that it is reasonable for the Government now to give farmers a clear lead as to the direction in which they will be expected to go in future.
4.17 pm
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) on the choice of motion for this afternoon's debate. He has chosen an important issue. I can see that a large number of hon. Members wish to speak on it.
I start by assuring my hon. Friend that the Government fully recognise the pressures that, the farming industry is facing, and the challenge that they present. In the main, as my hon. Friend admitted, those pressures flow from the need to control the production of commodities in surplus within the Community, as the motion recognises. The

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problem has arisen as a result of the success of agriculture in applying advances in technology and techniques. That has happened not just in Europe, but around the world, so that countries such as India and China, which once appeared to be large export markets, are now self-sufficient or even exporting.
Europe's surpluses are a major burden on the Community budget. The stocks include: almost 18 million tonnes of cereals, 1·2 million tonnes of butter, 800,000 tonnes of skimmed milk powder, and 600,000 tonnes of beef. The Community cannot afford to allow the surpluses to continue. The budgetary cost, the problems of disposal and the adverse effect on our relations with third countries all make it essential that we bring supply into better balance with demand. That is now being widely recognised throughout the Community. At its recent meeting in The Hague, the European Council agreed that the Community
"must continue to adapt the CAP to the changed circumstances".
The Council continued:
"a better control of total production must be ensured so that it is better adjusted to the market situation with the result that the share of public expenditure claimed by agriculture can be reduced".
These views of the European Council will be important in the approach which the Community adopts to the CAP in the coming weeks and months.
The pricefixing this year has sustained the tough measures which started with milk quotas in 1984, followed by restraint on wine in 1985, and now cereals where support for feedwheat has fallen by as much as 7 per cent. and where a co-responsibility levy is being applied. Year by year, support prices in real terms have been cut—on average by more than 3 per cent. a year in the past three years.
Mr. Robert Maclennan: When will the Government bring to the House the order under which we shall have the opportunity to debate in detail the co-responsibility levy on cereals? Why has the matter been put off so long when there is great uncertainty about how it is to be operated?
Mrs. Fenner: When answering questions last week, my right hon. Friend said that it will be brought forward just as soon as possible. The EC directive was ambiguous. Until it is clearer, we cannot bring it to the House.
The price fixing also included tough measures for other commodities with cuts for products such as olive oil, tobacco and fruit, which are a charge on the Community budget ranging up to 7 per cent. Taking all of the changes to support measures into account, expenditure this year was reduced by 320 million ecu or about £200 million, and next year by 457 million ecu, or £286 million.
At the same time, we ensured that United Kingdom producers had the benefit of modest green pound devaluations, and we avoided discriminatory limits on the beef and ewe premiums and discriminatory exemptions on the cereals co-responsibility levy.
We want to ensure that our farmers can continue to prosper from their own efforts and enterprises. Our continuing commitment to agriculture is demonstrated by the positive steps we take, including spending £2·2 billion on agricultural support last year and introducing substantial improvements in the hill livestock compensatory amounts arrangements. We have extended the scheme
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to pay HLCAs to farmers in the new less-favoured areas for the first time. I know that that has been of considerable help to farmers in the marginal areas. We have also this year increased overall HLCA payments by some 11 per cent. Total Government support in this financial year is expected to be about £110 million throughout the United Kingdom. This is a very significant contribution to ensuring the continuation of livestock farming in the hill and upland areas, thereby helping to sustain the rural economy.
We took special action last year by making available some £16·9 million to assist those livestock farmers who had been most seriously affected by the exceptionally bad summer weather. As a result, suckler cow and sheep producers in many parts of the less favoured areas and dairy farmers in certain more limited areas benefited from a significant injection of cash to help them through the winter. We have also sustained the variable premium scheme for beef.
Mr. Charles Kennedy: The Minister has detailed the Government's spending record, but does she agree that, at the end of this financial year, less will have been put into agriculture than last year? Will she take this opportunity to answer the important point raised by the hon. Member for Sherwood (Mr. Stewart), who said that it is important for the development of agriculture that as much advantage as possible should be taken of research and advisory services? How do the Government hope to sustain agriculture in marginal areas such as mine when they are introducing a charging system for advice for the very marginal farmers who need it most? Surely that flies in the face of what she has just argued.
Mrs. Fenner: Perhaps I might develop my argument in support of the Government's commitment to agriculture and pursue the hon. Gentleman's comments on research and development a little later.
As my hon. Friend the Member for Sherwood said, the measures that I have outlined did not prevent farm income falling by 43 per cent. last year, but that was mainly the result of the bad weather, and it followed an increase of 35 per cent. in 1984 when we had exceptionally good weather. We do not pretend that agriculture is having an easy time, but the need to change has to be faced and we are only part way into the readjustments which are needed.
Farmers everywhere—in Europe, in the USA and in other major producing countries—face the same need for change. Our farmers must play their part, but we will not accept measures which discriminate against us because our industry is efficient. We believe that, with a fair application of restraint measures, our agriculture will respond with vigour and continue to prosper.
We recognise that price policy alone is not enough in securing the necessary adjustments. This is why we want to have the idea of taking cereals land out of production fully examined within the Community. That could help to speed the necessary changes and help the producers worst affected by price restraint.
We already help farming to adapt to new and changing circumstances through the farm capital grant schemes. That support has been continued in substantial form in the present agriculture improvement scheme, which we introduced last autumn and which puts emphasis on helping smaller farmers and farmers in the less-favoured areas.

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An important new strand in our policy for securing the future of farming—and one which recognises the strong link between agriculture and the rural economy—is, of course, that of farm diversification. The new agriculture improvement scheme already incorporates a totally new grant for farm tourism and craft investments. This grant covers a wide range of projects from tourism and recreation to crafts and light industry in the less-favoured areas. It is based on the premise that farmers possess the buildings, land and collateral which can be developed to the benefit of the rural community as a whole. This aid is backed by advice from the ADAS socio-economic group.
The recent debates on the Agriculture Bill have also shown that there is very strong support for the idea of aid for an even wider range of ancillary farm-based businesses. The Government have recognised that support, and responded to it positively by introducing their own amendment to the Bill which would permit Agriculture Ministers to make grants towards ancillary businesses defined by order. I very much hope that the availability of such a power will provide a valuable extension of our support for farming and the rural economy.
Sir Paull Hawkins: Can my hon. Friend assure me that, even if research is cut in some areas, that into alternative crops will be stepped up? We may find, for example, that converting areas from wheat growing into woodland might produce a saving by the time that storage costs and the cost of maintaining woodlands have been. calculated. We should also consider land for industrial uses. Crops for plastics, for example, might not be wanted at the moment, but will my hon. Friend at least assure me that research into such matters will be stepped up?
Mrs. Fenner: We shall rely on the advice of the priorities board, which is establishing priorities for research. The Centre for Agricultural Strategy recently had an interesting seminar which we supported. The priorities board will take account of alternative uses of land.
We must avoid putting unnecessary impediments in the way of farmers who wish to diversify. I have mentioned our amendment to the Agriculture Bill concerning ancillary services. Indeed, my right hon. Friend the Secretary of State for the Environment has taken very positive steps to encourage local planning authorities to consider sympathetically applications to use redundant farm buildings for minor industrial and craft purposes that are compatible with rural surroundings. This is a further valuable contribution to our overall efforts towards the diversification of farm incomes, and the strengthening of the rural economy generally.
Further opportunities for farm diversification are being explored. My Department is sponsoring considerable research in this area. As I have said, we recently funded a most successful seminar organised by the Centre for Agricultural Strategy, which considered a range of alternatives to existing systems of agricultural production. The results of this seminar are now publicly available.
My hon. Friend referred to forestry and farm woodlands. These are one of the more promising alternatives. For this reason, late last year we issued for consultation a report by officials on the potential for "Woodland as a Farm Crop". Since then the EC Commission has produced its own consultation paper on
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forestry measures, and the NFU has issued a policy paper under the heading "Farming Trees". This indicates the strong and still growing interest in the possibilities for the expansion of forestry on farms.
The main problem is that the income that trees produce is not likely to be available until perhaps 50 years or more after planting. The difficulty lies in finding some means of bridging this gap. But at the same time, it may be more cost effective to encourage farm woodlands and timber production than to maintain land in agriculture. This is an issue to which we are giving the closest attention, as we fully recognise the economic and — particularly in the case of broadleaves — the environmental benefits that can flow from an increase in farm woodlands.
Agriculture, of course, forms a key part of the rural economy, and its continued strength is therefore of great importance in this respect. But additional support for rural communities generally is provided through the Development Commission, for which my right hon. Friend the Secretary of State for the Environment has responsibility. The work of the Commission has assumed even greater significance at a time of uncertainty for agriculture, when new job opportunities are now needed more than ever.
The Development Commission has a wide range of activities, ranging from small factory and workshop construction to provision of grants for the conversion of redundant buildings. It also offers a range of advice, training and assistance to small firms. This activity is backed up by a range of social policies to promote self-help through community and voluntary work.
Some rural areas have a greater concentration and range of problems than others, and that is why nearly 80 per cent. of the Commission's resources are directed to the rural development areas which were designated in 1984. Over the past year, the Commission has launched a coordinated approach towards the problems in these areas in close consultation with local agencies. In recognition of this valuable work—I hope that my hon. Friend will be reassured of this additional work which makes a contribution to the rural economy—the funds available to the Development Commission have been substantially increased over the past two years from £21 million to £29 million.
Of course, our policy for agriculture and the rural economy generally must take account of the need to conserve the countryside. It is vital to care for the countryside, its landscape and its wildlife, not only for the people who live and work there but for the millions of visitors who enjoy the countryside on a pleasant day out or on holiday.
The countryside is what it is because of the activities of generations of farmers. It is a managed countryside in which agriculture plays the leading role. We are therefore committed to striking the right balance between all the diverse interests in rural areas and to gearing our agricultural policies towards the achievement of wider environmental, social and economic goals.
We have already gone a long way down this road. Many of the activities with which agricultural Departments are involved are not solely, or even mainly, concerned with agricultural efficiency. For example, the MAFF and the Countryside Commission are jointly sponsoring an experimental scheme for protecting the traditional landscape of the Broads, and the response from farmers has been very positive. Recently, the capacity of

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ADAS officers to offer conservation advice has been greatly expanded and the Ministry has already played a leading role in the development of the highly successful Farming and Wildlife Advisory Group movement.
Mr. Tam Dalyell: In relation to the whole saga that surrounded Halvergate, what has the MAFF and the Department of Environment learnt from this episode?
Mrs. Fenner: I am sure that we have learnt the basics for protecting the traditional landscape of the Broads. If Halvergate is among the designated areas, I have no doubt that that will be as successful as the rest of the Broads scheme.
That is our commitment, and the next step is to write it into legislation. As hon. Members know, the Agriculture Bill includes a clause that will require Agriculture Ministers to endeavour to achieve a reasonable balance between the interests of agriculture, the economic and social interests of rural areas, conservation and public enjoyment of the countryside. As a result, not only will this be our policy—which it has been—but it will be our duty. We recognise that this is no easy task, but we have already gone much of the way to achieving it in practice. That clause in the Bill will bring our existing policy into a new and sharper focus.
We are also taking more specific steps to encourage farmers in the achievement of wider environmental goals. Clause 17 of the current Agriculture Bill will empower Agriculture Ministers to designate areas as environmentally sensitive. Within such areas emphasis will be placed on encouraging farmers to maintain and adopt practices that better protect the needs of the environment. We shall do this by asking farmers to enter into agreements whereby they abide by conditions such as restrictions on the use of fertilisers, stocking limits, number and timing of hay cuts, maintenance of hedges and stone walls and so on. Such conditions inevitably have financial implications, and in recognition of this we intend to make payment to farmers who agree to enter our schemes. I know that this new initiative has received a welcome reception among the farming community, and I believe that it represents a most important positive step towards a wider, more integrated approach to support for our valuable rural areas.
Mr. David Harris: Is my hon. Friend yet able to say when the first batch of these ESAs will be designated? We seem to have been waiting a long time for that announcement.
Mrs. Fenner: I accept my hon. Friend's criticism of the time lag, but this is a first experiment, as it were. We hope to be able to announce very shortly the areas that have been accepted. I cannot define it more closely than that. My hon. Friend will have to be patient for a little while longer.
Mr. John Home Robertson: Will it be this year?
Mrs. Fenner: I said very shortly.
I have at some length set out our commitment to agriculture and the rural economy. I hope that the House will agree that the record shows that the Government retain a positive commitment to agriculture, the rural economy and the environment. But we cannot be complacent. The agricultural environment will continue to
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change. Indeed, the pace of change seems likely to accelerate in the years ahead. We cannot predict in precise terms what the changes will be, and we know from experience that we cannot predict in detail what measures will be agreed in the European Community as a whole to tackle the continuing problem of agricultural surpluses. The detail is often an important part of that.
It is against that background that we must look at the idea of a White Paper or a similar document. I respect what my hon. Friend the Member for Sherwood said about the uncertainty felt in agriculture, but it would help no one if we tried to produce a plan for agriculture that was in danger of being out of date.
I have noted what my hon. Friend said, and I shall also listen to what other hon. Members say during the debate. I know that my right hon. Friend the Minister—who regrets that he is unable to be present today because of his duties as President of the EC Council of Agriculture Ministers—will be paying similar particular attention to them. I can assure the House that we shall continue to bear this issue very much in mind as the situation develops.
4.40 pm
Mr. Geraint Howells: I thank you for calling me so early in this debate, Mr. Deputy Speaker. I should also like to thank the hon. Member for Sherwood (Mr. Stewart) for giving us all the opportunity both to discuss this important subject and to bring to the Government's attention the great anxiety felt by all hon. Members who represent rural constituencies. I know that the hon. Gentleman and other Conservative Members are worried about what the future holds for them, because the Government's agricultural policy has had a disastrous effect on every Conservative candidate in by-elections during the past three years, when the results are declared.
A long time ago, or so it seems, the Conservative party liked to portray itself as the champion of rural Britain and claim that it alone understood and was able to interpret the voice of the countryside. Today, as the Conservative Government preside over a declining rural economy and the dismantling of the many services and facilities previously enjoyed, that claim sounds extremely hollow.
Mr. Paul Marland: Before the hon. Gentleman starts on the apparent benefits of his policy, may I ask whether he is aware that the alliance party on the Gloucestershire county council has just voted in favour of rating agricultural land? Will he temper his remarks bearing that in mind, and will he let us know whether that is now alliance policy?
Mr. Howells: With respect, I shall come to the rating of agricultural land later in my speech and I shall address myself to the specific point raised by the hon. Gentleman.
Agriculture is going through another period of crisis, and more and more farmers are finding it difficult to make a decent living. Opportunities for new entrants into the industry are becoming fewer. With the decline in farming there follows the disintegration of the supporting industries and the structure that upholds and assists the community. They are gradually whittled away until the community disappears. Some of the blame may well be laid at the door of the common agricultural policy, which has encouraged lakes and mountains of produce that cannot be sold. I have always believed that the

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Government's insensitive handling of agriculture and unwise panic measures have exacerbated the position unnecessarily and caused an unprecedented loss of morale throughout the industry.
The difficulty started in 1984, when the Government introduced milk quotas in a panic. It is a great pity that farmers and agriculture have never got over that sudden shock.
Mr. Harris: Perhaps the hon. Gentleman could throw some light on alliance policy on milk quotas and say whether the hon. Member for Brecon and Radnor (Mr. Livsey) is no longer the Liberal spokesman on agriculture. Can the hon. Gentleman say whether the Liberal party still has no policy on milk quotas, as that hon. Gentleman said?
Mr. Howells: I am surprised that in 1986 Conservative Members are so keen to know what alliance policies are, but of course are doing well at every by-election and they are getting worried, week in, week out. My hon. Friend the Member for Brecon and Radnor (Mr. Livsey) has apologised for the fact that he is unable to be present today, and I am deputising for him. Milk quotas were introduced in 1984, and the hon. Gentleman will agree that the Government rushed them through in a panic. If my colleagues and I had been in office at that time, we would not have introduced them as the Government did.
Agriculture, which was encouraged to become efficient and produce more food, should now be given much more backing to help it through this difficult period in 1986–87. What alarms me and many of my colleagues is that the Government seem intent on doing exactly the opposite. The industry needs help to diversify, and every farmer needs advice relevant to his or her position, but what are the Government doing? They are cutting the advisory services, undermining the work of the Agricultural Development and Advisory Service, reducing its effectiveness, cutting staff and then charging for advice. That is not good policy for agriculture. At this time there should be an entirely different approach and a much more supportive attitude from the Government in the form of more advice and assistance, given free. Agriculture needs a 10-year policy so that farmers know exactly where they are going.
I am also alarmed at the way in which the Government are cutting research related to agriculture. In my constituency the Welsh plant breeding station at Gogerddan near Aberystwyth, which is renowned throughout the world for its work and for the way in which it has promoted and developed crop production, recently received news about its recurrent expenditure for 1987–88. It is estimated that there will be a deficit of about £260,000, which is equivalent to 9 per cent. of the budget. Not only will that mean that several posts will be lost in addition to those already lost in the past year or two, but it will lead to a severe loss of morale and a greatly reduced capacity to carry out what has proved to be vital work for the farming community.
Those involved in agriculture in Wales and elsewhere are horrified at this attack on a greatly respected institution and see the same gradual erosion extending throughout all agricultural research and development organisations in Wales and Britain as a whole. We need a radical change of approach to agriculture to match the changed circumstances. There must be more support for the rural economy, and measures should be introduced to
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support the family farm, to encourage young farmers, and to provide credit facilities and favourable interest rates through an agricultural or land bank. We should give increased support for development and advisory services and for improved marketing schemes, and, generally, provide a suitable environment for diversification.
That cannot be done overnight, but we need to start now to plan for the next 10 years. Do not let us carry on, as we have been doing, going from one crisis to another, with the Government inventing policies as they go. Farmers are tired of uncertainty and changes of direction. Give them more stability and purpose and, by doing so, save the rural economy from decline.
Mr. Robert Key: Sceptical as I am of some of the things that the hon. Gentleman is saying, I believe that both he and I have the interests of the rural economy at heart. Will he develop his theme of a land bank for young farmers to promote the family farm? One of the main problems in the crisis that our farming community has faced in the past few years, particularly since the milk quotas, has been that banks have let young farmers get into tremendous debt, and they have suffered most. The hon. Gentleman seems to be suggesting that we have an institutionalised form of debt creation for the very people whom we are trying to help.
Mr. Howells: Let us put the record right once and for all. It has always been the policy of the Liberal party that we should have a land bank. That is also the policy of the alliance. The bank is not for young people to buy land, but to give them the opportunity to start. The Labour and Conservative parties are now in favour of a land bank, on similar terms to that which we envisaged in the first place.
Over the years, I have said that we are fortunate that we have a capital grants scheme, which has operated well for years. However, our counterparts in Europe also have a cheap credit facility. We do not have that choice. Our friends in Europe are willing for us to pursue a policy if it is the wish of the Government that we should have a capital grant scheme or cheap credit facilities. The door is open for us to accept such a policy, and I am sure the hon. Gentleman will agree that that is the way to help young farmers.
The hon. Gentleman should divert his mind to another policy. Many smallholdings are owned by county councils. It is a pity that, because of the shortage of cash, many county councils are having to sell these farms. It is the duty of the Government of the day to give extra financial aid to those county councils to make sure that such smallholdings remain.
I feel strongly on this issue. This Government are the worst since the war for ignoring the urgent needs of agriculture. It needs help, and many farmers need to be saved from financial difficulties and ruin. The most effective industry in Britain has been brought to its knees by unwanted Government policies during the past three years. Many farmers have asked me and others how long Ministers will ignore them. It all started in 1984 with the milk quotas. If the Parliamentary Secretary is to wind up the debate, will she answer this question? Do the Government intend to introduce quota systems for any other commodities during the next few years? I can give the answer. As an election is pending, the Government will not do so.
It has been said that the Government have helped farmers for a long time, but farmers are aware that the

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grants are slipping away quietly and that instead of having 50 or 60 per cent. they are getting 20 or 30 per cent. That is a great shame. If the Government want to help hill farmers and marginal farmers, they can give extra funding under EEC rules, but the grants have never been paid in full, as they should be. No one in Europe is opposed to such grants. It is only the Government who have kept down grants and the hill compensatory allowances.
I am sure that hon. Members on both sides of the House will agree that many sheep producers have applied for the ewe premium under the sheep regime, but many have been refused. Many have been refused the ewe premium because they have not applied in time. Many farmers in England, Scotland and Wales have been denied the premium because their application was 24 or 48 hours late. Nobody disputes that they are honest people, and for the sake of a few hours they should not be deprived of the money that is theirs by right.
The Minister did not tell us what we should do about marketing surpluses to the Third world and other parts of the world. The Government should have a plan for marketing. They should be able to persuade our counterparts in Europe what should be done with the surpluses. We do not need to penalise successful British agriculture. How many times have the Secretaries of State for Wales or for Scotland, who have full responsibility for agriculture in those countries, been in Brussels in the past three years? They have admitted on the Floor of the House that they have not been there to protect our rights during negotiations. It is time that they went there. They have the full responsibility for looking after their people and are duty bound to go.
Many of us on both sides of the House believe that we are Christians. We are all aware that we, together with the rest of the world, spend $17·5 billion a fortnight on arms. If that $17·5 billion were spent to help those in the Third world, every person would be fed, educated and housed. The Government and hon. Members on both sides of the House should give more thought to those people in other parts of the world who are less fortunate than we are.
The hon. Member for Gloucestershire, West (Mr. Marland) asked me about land rating. I do not know why so many Conservative Members want to find out whether the alliance is in favour of the rating of agricultural land. The hon. Member for Southend, East (Mr. Taylor) last year introduced a Bill to rate agricultural land. He was supported by other Conservative and Labour Members. It was I and one of my colleagues who spoke against the hon. Gentleman. With the support of many Conservative Members we destroyed the Bill. It has been our policy that we have no intention to rate agricultural land.
I had thought that the Minister would say something about the radioactive fallout in Wales, north England and parts of Scotland. Many people have asked whether there was any need for such lamb restrictions. Perhaps the Minister will tell us later. I know that the National Farmers Union of England and Scotland, and the Farmers Union of Wales have been in touch with her. What is the hon. Lady's latest information on the radioactive fallout and on the compensation to sheep producers?
My hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) asked about cereal farmers. Two years ago, the dairy farmers went through agony, but now the cereal farmers are in dire trouble, and they are
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getting worried. They are more worried than the dairy producers, and I hope that the Minister will announce when a statement will be made on the Floor of the House of Commons to ensure that the morale of the cereal growers will not be dented, as was that of the dairy producers. I hope that a prepared statement will be made soon.
The hon. Member for Sherwood (Mr. Stewart) said that it is now reasonable for Governments to give farmers a clearer lead on the direction in which they will be expected to go in future. If the Government will not do it, the alliance will.
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Sir Peter Mills: I welcome this debate and congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) upon his choice. He is a true friend of British agriculture and the rural scene. Unlike others, he speaks from experience, and that is important.
1 was amazed by the phrase that was used by the hon. Member for Ceredigion and Pembroke, North (Mr. Howells). He said that this Government were inventing policies as they went along. That is an extraordinary statement to make when one considers all the debates that take place in Brussels and the policies that are formulated there as well as by the Ministry of Agriculture, Fisheries and Food. The Government do not invent policies as they go along. It is the Liberal candidates who are inventing policies at they go along, and they vary from constituency to constituency. The hon. Gentleman must check up on what is being said by Liberal candidates. I assure him that they believe in agricultural rating.
Mr. Geraint Howells: Is the hon. Gentleman aware that the Secretary of State for Wales apologised on the Floor of the House—as did the Minister of Agriculture—for misusing words and for saying to the public that we are in favour of agricultural rating? That is wrong, and the hon. Gentleman knows that it is wrong.
Sir Peter Mills: That is not so. The hon. Gentleman ought to go to the constituencies and listen to what the candidates are saying.
Farmers are very concerned about the future. All of them understand the problems involved in dealing with the surpluses, as well as the tremendous cost and the reluctance of taxpayers to pay for the storage of surpluses. The hon. Member for Ceredigion and Pembroke, North kept on about agricultural aid and said that far more should be given than is already being given by his Government, but he said nothing about the cost to the taxpayer and about taxpayers' reluctance to pay for it. However, the Government ought to provide guidance and help to agriculture. The industry does not want to be provided with firm guidelines, but it wants to know what will be required in the future. I hope that my hon. Friend the Parliamentary Secretary will take that on board.
Swine fever is causing a great deal of concern in the south-west of England. It poses a very serious threat. I ask Ministers to redouble their efforts to ensure that only non-infected meat is allowed into this country. It is absurd that our pig farmers should be put at risk.
Will my hon Friend also note that there is a staffing problem at Weybridge? Of the 220 samples that were sent to Weybridge by veterinary officers, only 70 had been dealt with after 10 days. Testing must be speeded up so that we

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can get on top of this problem. The results of tests must be made available quickly. The National Farmers Union is pressing for a ban upon all imports of pigmeat. It says that the Government have the power to impose a ban, but legal proceedings could be taken against this country if a ban were to he imposed upon imports of pigmeat. The NFU has prepared a good brief which I shall send to my hon. Friend. I ask the Government to check up on the legal points. If we were to impose a ban on pigmeat imports, it would be ridiculous if then we had to pay a very heavy fine and compensation. But if such a ban could be imposed, I believe that it should be imposed.
As for the future of a great British agricultural institution, the Milk Marketing Board, for many years the board has provided stability and confidence for milk producers. Consumers have also benefited from the board's activities. They have been assured of constant supplies of milk that is pure and of good quality. We must ensure that the board continues to function. Some would disband it. Europe is not too happy about the Milk Marketing Board, and I must confess that some Conservative Members wish the MMB to be disbanded, but that would be a tragedy for all concerned. The Touche Ross report must be implemented and the Dairy Crest problems must be solved. The MMB has provided a great service to both the consumer and the farmer.
We cannot just say that more and more aid must be given to solve the problem of surpluses. That would produce even more surpluses. Alternative crops are essential. A desperate search must be made for alternative miracle crops. The combination of small changes and new enterprises adds up and must be used. I trust that the Government will provide every encouragement to the various agricultural colleges and research establishments to continue the search for alternative crops.
Mr. Maclennan: The hon. Gentleman asks the Government to continue to provide help for the agricultural colleges. Is he not aware that the Government are slashing the assistance that they give the agricultural colleges and that in Scotland the assistance they provide has been reduced by more than 50 per cent., just at the time when help is most needed for those purposes?
Sir Peter Mills: It is not true to say that the Government have slashed assistance. The Government want value for the money that they give to the agricultural colleges, and that is absolutely right. Instead of research covering a very wide area, the colleges should concentrate upon the kind of research that is needed. The need at the moment is for research into alternative crops.
It is important to warn British agriculture of some of the serious problems that it may face in the future. Agriculture has to deal with many problems caused by nature but there are also political problems. I wonder whether the Opposition's proposal to introduce yet further taxation and a wealth tax and to withdraw from Europe is the way to give confidence and help to British agriculture. I doubt it. It is no use the hon. Member for East Lothian (Mr. Home Robertson) shaking his head. The Opposition's policy is that this country should withdraw from Europe and renegotiate. If the hon. Gentleman wants this country to become the dumping ground for European food surpluses, it will do untold harm to British agriculture and, more than anything else, it will sap its confidence.
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I do not intend to say any more about agricultural rating. I do not believe that the alliance will ever get the chance to put its policies into operation. However, we have to take seriously what is being said by the Socialists about these matters. I hope that no more nonsense will be talked about our withdrawal from Europe. Membership of the Community has been of great benefit to British agriculture.
As I read the press and survey the rural scene, I come to the conclusion that there has been far too much gloom and doom in some magazines and newspapers. Of course it is true that profits are down, except in the dairy industry. Again, the hon. Member for Ceredigion and Pembroke, North, who spoke for the alliance, does not know his facts. The costings of the Milk Marketing Board and of the British Oil and Cake Manufacturers show that, under quotas, the margin over costs per cow is the highest that it has ever been. It is more than £700 a cow. It is absolutely ludicrous to talk as the hon. Gentleman has done. It is true that profits are down in agriculture generally, and that borrowing is rising, but there are pluses too. Costs are down, farm inputs are down, productivity measures are increasing and many farmers have learnt how to manage in areas where they never thought of doing so before. Interest rates are down and every 1 per cent. reduction in interest rates means £50 million off the burden on agriculture. Long may they continue to fall.
Prices have been good. I do not know what is happening in the constituency of the hon. Member for Ceredigion and Pembroke, North but calf prices and store cattle prices have never been higher, and early lambs are fetching the highest prices ever. Some lambs have been fetching £60 each. It is nonsense to talk about the entire industry being on its knees. The prospects for 1986 seem much better. Agriculture should be praised for the way it is adjusting to the difficult circumstances of tremendous surpluses. Agriculture needs some guidelines, support and confidence from the House. The Conservative Governments offer that.
5.11 pm
Dr. Roger Thomas: Welsh agriculture contributes nearly 4 per cent. to the Principality's gross national product, which is about twice the amount that agriculture contributes to the United Kingdom's GNP. Compared with the United Kingdom, nearly twice the percentage of the working population in Wales is directly dependent upon the industry for employment. The grassland sector, and with it the dairy sector, is the backbone of our rural economy. In a country that is predominantly hilly or even mountainous, that has a well above average rainfall, and where four fifths of the terrain now has, thankfully, less-favoured status, the dairying enterprise is imperative.
Wales has a relatively small arable sector. Income trends in that sector have, overall, been rather more favourable. Even before the badly rehearsed, badly researched quotas were brought into being, restrictive price awards and levies kept incomes to only modest improvements, and that at a time of a general drive for expansion. But it proved to be impossible to throw a dynamic industry into reverse without widespread damage being inflicted. At the time of that expansion drive, there was an exceptionally high financial commitment with record levels of bank borrowing. Welsh farmers realised that allowing production to increase as demand was falling

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throughout the Community needed positive steps, but penalising a country such as Wales—and Great Britain is more than 10 per cent. short of self-sufficiency in milk and dairy products — would lead to widespread and severe hardship, and there was a rural outcry of unprecedented proportions. That was at the same time as, across the St. George's channel in Eire, the Government there, fully represented at Brussels, could afford and was given extra quota and general preferential treatment.
It is not unnatural, perhaps it is only to be expected, that the wrath extended to the favoured position of New Zealand imports, and to the continued favoured position of New Zealand dairy imports. Even now, dairy producers in Wales and other parts of the United Kingdom—some struggling successfully; alas, many struggling unsuccessfully—must witness the continued importation and the carrying round the world of 80,000 tonnes a year. That appears to Welsh farmers to be shrouded in irrationality.
The farming unions of Wales are now opposed to the continuation of that level of importation from New Zealand. They have recently been joined by the Milk Marketing Board and the Dairy Trade Federation. In 1973 it was agreed that New Zealand would be doing well if in 10 years' time it received just under 25 per cent. of the United Kingdom market. The real figure is now nearer to 40 per cent. The farmers of Wales are very irate that that high level of New Zealand importation should continue.
Our agriculture must contend with a continuing state of affairs whereby measures that appear to favour our national position when imposed by the Community, are inexplicably held back or are only partially enforced by the Government. Yet other countries are prepared to modify, even to reverse, Community measures which, if implemented nationally in that country, would be socially harmful. Not every country in the European Economic Community is fighting by the Queensberry rules.
When some commodities are produced in excess we take a short-sighted and almost miserly attitude towards research and innovation. There is an abject lack of an overall agenda for the future. The Government appear to prefer to leave things to chance.
Of the United Kingdom farmers that employ labour, 23 per cent. account for 80 per cent. of farming output. Since the second world war, the larger farms have ridden the storms better and, in general, have done better and been more prosperous than the smaller farms. Far too few of the grants, the guaranteed prices and the deficiency payments have percolated through to the farm workers. There is annual indignation from farmers who employ labour when the wages board announces modest annual pay increases. Farm wages urgently need to be brought into line with the wages of other industrial manual workers. That is how agriculture can influence and improve our rural economy.
The farming community still has the largest occupational group claiming family income supplement. That should not be allowed to continue. During the past 15 years the number employed in agriculture has continued to fall sharply and, with persistently high rural unemployment, there has been far too great a tendency to call upon casual and part-time labour. With the loss of farming jobs, the whole non-farming rural economy suffers. Village and hamlet life loses essential facilities and
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unfortunately, in many of the remoter rural areas there is hardly any infrastructure to which small-scale industries can be attached. Job creation is stagnant.
Well before the end of the century, Britain will have a new commodity surplus. There will be a surplus of rural land. An area equivalent to the size of Wales or East Anglia will be surplus to agricultural needs. Years of heavy investment and improving efficiency will have by then taken their toll. Many hon. Members have mentioned the mounting surpluses and they are a continuing embarrassment, with millions of pounds of national taxation being used to pay farmers for crops for which there is either no market or a diminishing market. Those which are not used have to be stored at equally escalating and prohibitive costs. We have had dairy produce surpluses, and now cereals are being vastly over-produced. Farmers who were induced or forced to give up milk production, turned to beef and sheep, and it is likely that within a few years those commodities will be yet further examples of surpluses.
Much innovation and enterprise has been focused upon the alternative use of surplus land. It appears that the land must be used, come what may. The solution may lie in further afforestation, and there would appear to be a social as well as an economic advantage, because timber imports would be reduced and local jobs would be provided, thus countering the depopulation that follows land becoming surplus to conventional usage. We must support areas of localised afforestation. It is hoped that such afforestations may include the lowlands, the broad-leaf woodlands and farm forestry, as opposed to landowner and specialised companies. The needs of the former must be subsidised.
The contribution that forestry can make as a fuel as well as a chemical resource should not be forgotten, and could form part of a sensible non-nuclear strategy. We hope that that is what will finally emerge. The redundancy of agricultural land is not a limited farming interest. Such a situation might be immensely challenging. Both the countryside, and jobs in the countryside, could be protected, as many aspects of rural life could be thrown open to the people as never before.
At a more parochial level, farmers, and particularly hillfarmers, need to be reassured following the ban on sheep, their movement and slaughtering. There must be adequate and honourable compensation. Last summer's poor weather and cash flow problems form the background to the recent disasters afflicting the farmers on the hillsides of Wales. Others, too, must not be forgotten, such as those who work in abattoirs and those who are employed in the haulage industry.
Farmers must ensure that they keep accurate records of costs and losses associated with those restrictions. They must be prepared to present adequate, substantiated proof of their damaging effects. We must not leave our farming community or our hillside farmers high and dry on that issue.
We are passing into an era in which a highly sophisticated food-buying public is developing. There is a general and developing interest in organic farming. The public is becoming aware of the dangers of, for example, the irradiation of food, the contamination of food by agrochemicals, and the indiscriminate use of pesticides, many of which have been banned in other countries and in other EEC countries as well.
We are moving in the right direction. As a result, some sectors of the conventional agricultural community will be adversely affected. Hence the need for a rolling

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programme, and for a comprehensive forward review of agriculture. The Government are reticent and reluctant to bring that forward, hut, unless they do so, displeasure with them will continue. Indeed, that has already been witnessed in by-elections during the past two summers. Unless the Government do something about agriculture, and particularly grassland agriculture, they will suffer even more electorally.
5.24 pm
Mr. Paul Marland: To be on the safe side I should declare an interest in this subject, as I am a working farmer.
In the time scale of farming and food production, the current crisis of surpluses has hit farmers in this country very quickly. Only three and a half years ago they were being urged to produce more and more food at home. Many geared up to do that, often with borrowed money. In this debate, it is important to recall much of the cause of today's dilemma in the countryside.
Farmers and the ancillary trades face the future with apprehension and uncertainty. They are inevitably looking more and more to the Ministry, not to tell them precisely what to do, but to lay down some rough guidelines for the future. A rigid and unswerving devotion to price cutting will claim many victims in the countryside on the way, and at the end of the day it will solve nothing and will serve only to accelerate the exodus from the land and to destroy rural communities.
Currently, 80 per cent. of the EEC budget is spent on buying, storing and disposing of surpluses. Agricultural support in the United Kingdom now costs the taxpayer twice as much as the total net income of farmers. As prices fall, farmers seek to produce more and more. We are all being urged on by the ancillary industries, which are also feeling the pinch. As a farmer, I have never had so much literature through the post before from various ancillary trades suggesting how I can increase the output of my farm.
The present policy of trying to control over-production can be described only as crisis management. It concentrates minds on only one product at a time. The aim is to smooth out a bulge here, which inevitably produces a bulge there. As has been said, sheep farmers used to ask us to urge the Ministry not to reduce the price of cereals too far, for fear that the prosperous arable farmers of East Anglia would all go into sheep production, leading to a crisis in sheep production. They therefore understandably ask what they can invest in with any certainty.
In fairness, I should perhaps have asked this question six months ago, but I wonder whether there is a forecast or model at the Ministry or anywhere else giving the long-term effects of continuing to cut the price of cereals and of buying in beef. Production restraint through co-responsibility levies—which is what we have—has been tried in the past and has failed. Does any hon. Member imagine that price restraint will encourage farmers to produce less? With a 43 per cent. drop in incomes in the past year, farmers of all sizes are fighting back as best they can by producing more and more. They are all doing it to the very best of their ability. Sadly, some of them will fail. I believe that they will be mainly those on poorer land, and on the western side of the country.
Many hon. Members have probably read about the plight of Mr. Stewart Thomas, which was mentioned on the front page of this week's Farming News, but many
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others will follow him if we continue with a policy of price restraint. Price restraint will inevitably lead to more intensification in the eastern counties. Conservation will suffer, as farmers struggle to stay in business. The EEC budget will continue to demand more and more finance to purchase, store and dispose of surplus production. At the end of the day, none of us will be better off. It is a pretty depressing picture.
Nevertheless, as has been said, farmers are great entrepreneurs and are looking everywhere for new crops. Many of them are trying new crops on a small scale, but the only real alternatives to cereals, for those who are tooled up to cope with them, are oilseed rape, beans and peas. Other farmers have tried different crops, such as flax, linseed, evening primrose, domestically produced snails for home consumption, and even— as I heard the other day — ducks' feet for export to China, but those can only be described as exotics and at best may make only a modest contribution to farmers' incomes. The hon. Member for East Lothian (Mr. Home Robertson) has tried growing evening primrose and has warned me of it, saying that there is no money in the job.
Forestry has already been talked of as an alternative. It will take root only on the poorer land to the west of the country—for example, in some parts of the Forest of Dean, and in the Cotswolds, where my farm is located. Those areas already have sufficient trees. Farmers in East Anglia, who have highly productive land, should be encouraged to plant more trees, which we need for many purposes, yet they show no interest whatsoever in doing so.
Another suggestion is set-aside. A proposal to leave land barren will not find much sympathy with today's ramblers and the other urban visitors who seek to make the countryside agreeable to themselves. Farmers w ill not favour such a suggestion. I should not like to set my farm aside and see it taken over by thistles and weeds.
Other farmers are trying to cash in on leisure, with holiday cottages, shooting, fishing and caravans. I am trying to grow a crop of caravans, but am severely restricted by the local planning authorities, which have other ideas.
The answer for the farmers, and also for the taxpayer, is to extend the system of quotas to all products currently in surplus. That would be the quickest and the surest method of control. It would allow each farmer to tailor his production to suit his own farming practice, just has been done in the dairy sector.
Quotas will not encourage inefficient production, as is often said, because each farmer will want to maximise his return. As a result of quotas, land will become available for alternative production and more attention will he paid to producing products which are in deficit; for example, flax, evening primrose, and ducks' feet for export to China. More new markets will be explored by farmers, who will operate from a base of strength and confidence, rather than having continually to look over their shoulders and wonder whether the new enterprise in which they have invested will be the next to have the price of its end product cut by EEC Ministers.
Another advantage is that all the land will be cared for and farmed. I genuinely believe that the farmers of this country have been in conservation for a lot longer than have most of the Greens. People will be retained on the land in the smaller family units mentioned by some hon. Members, rather than holdings becoming larger, with

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management and directors operating at arm's length from the land and sitting in offices many miles away from the farm. We have already seen this starting in the United Kingdom, and I do not want to see it encouraged.
A system of quotas would maintain agricultural incomes, albeit at a lower level and at much less cost to the taxpayer than in previous years. Last year there was a 43 per cent. drop in incomes. As we saw last week, maintaining agricultural incomes is one of the main objects of the common agricultural policy. Quotas will give farmers confidence and provide better opportunities for young people to assess a farm's real worth before tendering a rent or entering any other form of farming enterprise. At the end of the day, quotas will save the EEC budget literally millions of pounds.
Some will say that quotas would be impossible to operate and police. However, can that be true in this age of the computer, satellite photographs and the Land Registry? Others will ask how we can get the French, the Germans and the Italians to co-operate. Why could national quotas for guaranteed Community buying not be set, based on past performance, and each national Government left to sort out their own surpluses, and to do what they will with their own taxpayers?
National quotas should be based on acreage rather than on tonnage produced. Quotas should apply to everybody. It is not true to say that because a farmer feeds home-produced foodstuffs on his farm he is necessarily more sociable or desirable than a cereal farmer, such as myself, who produces only cereals.
A quota approach to surpluses is not a piecemeal approach, such as has caused problems in the past and will cause more problems in the future. The present policy of forcing down cereal prices may appear a boost for livestock feeders in the short term, but in the medium term it will.produce an explosion in intensively produced pigs and poultry. This will further undermine the price of beef and lamb and put more pressure on EEC funds.
West Gloucestershire is a rural constituency. I have experienced at first hand much of the excellent work that is going on there and elsewhere, as the Minister mentioned, to develop rural businesses and to keep rural communities alive. Agriculture is the engine of the rural economy and we must seek to keep it in balance, in the long-term interests not only of the farmers and those who live in the countryside, but of all the taxpayers of this country.
5.35 pm
Mr. Tam Dalyell: The hon. Member for Sherwood (Mr. Stewart) will acquit me of discourtesy if I do not congratulate him on winning this ballot. By rights, the motion should have been that standing in the name of my hon. Friend the Member for Middlesbrough (Mr. Bell). It is a matter of supreme irony that, as 1 understand it, the application was put in not by the hon. Member for Sherwood, but by the Minister of State for the Armed Forces, the right hon. Member for Tonbridge and Mailing (Mr. Stanley), who should have been answering the debate on 6 June, the loss of which made it possible to have this extra time for private Members' business.
However, the hon. Member for Sherwood has chosen well because this is an important subject. I am, therefore, in no way curmudgeonly about his choice of subject, and should like to raise specific issues with the Minister.
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My first point relates to the ongoing saga of the destruction, for that is the right word, of the Macaulay research institute at Aberdeen, which I visited with some of my hon. Friends. I would pray in aid, not any Opposition Members, but the former Minister of State, Ministry of Agriculture, Fisheries and Food, who is now the Minister of State, Department of Energy, who has close links with the Macaulay institute, and who is continuing the fight inside the Government.
Hon. Members who have visited the institute are absolutely appalled at what is happening to the concentration of agricultural research in the Aberdeen area. I can say this the more strongly because, although I am a Scottish Member, I have no constituents nearby. However, the Macaulay and the Rowett combine to make a major European centre for agricultural research, and that is being destroyed. I ask the Government what they intend to do about it, not least because of the representations which I understand have been made by the Minister of State, Department of Energy, who is a local Member of Parliament. I am dismayed at the cuts that have taken place at Rothamsted relating to soil research. I do not know how the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food could comment on the health of agricultural research in the United Kingdom at present. Her remarks do not correspond with the facts.
Secondly, the Parliamentary Secretary referred to grants to ancillary industries. How much money was she talking about? It may be justified, but I wonder whether grants to ancillary industry are as worth while as the money that is being taken from agricultural research. The Government should at least justify their policy.
My third point is relevant to my constituency, but it is even more important to Clydeside and to other areas of the country. I am not alone in believing that glasshouse owners are no longer crying wolf. Meeting their fuel expenditure is a very real problem. The hon. Member for Dumfries (Sir H. Monro) knows the problems at first hand.
What is being done in all the discussions with the EC about what can properly be described as unfair competition from Holland? The Europeans go on and on subsidising their glasshouse owners, particularly their tomato producers, and ours get very little. Many are being driven out of business. Glasshouse owners tell me that they cannot do the repairs and maintenance that are necessary if they are to continue in business.
My fourth point is a bit different. I interrupted the Minister when she talked about what was being done in particular conservation areas. I shall not go into the details of Halvergate that so exercised the Committee considering the Wildlife and Countryside (Amendment) Bill other than to say that it seems to some of us that marshland is being drained, moorland is being cut back and the surpluses are getting ever bigger. Does that form any kind of a rational approach?
I repeat the question that I put in the intervention. What has been learned since Halvergate? If I am told that the Government will never do any such thing again and that grants are being withdrawn for the drainage of ecologically valuable marshes, so be it, but that is not the information that comes to us.
I remain with the Wildlife and Countryside (Amendment) Bill, on which some of us spent 100 hours in Committee, and return to the old question of the

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Sandford amendment and the Sandford money. I see the hon. Member for Dumfries smiling. He was the competent Minister who dealt with all this. In Committee some of us said that we wanted to monitor, year by year, how much Ministry of Agriculture, Fisheries and Food money is going into conservation. We have been told hitherto that it is difficult to identify it. Forgive me for being cynical, but I suspect that very little of MAFF funds is going into identifiable conservation causes. If the Government think that we are wrong, let us be told when the Minister replies.
My penultimate question is about marine nature reserves. I understand the difficulties about Lundy. However, other areas were designated. Why are we taking so long? If Ministers accepted the reasons for marine nature reserves five years ago, why are we dealing with the circumlocution office in getting things done— I will not say on the ground, because that would not be an appropriate analogy? Those of us who five years ago argued tle case, and rightly, are greatly disappointed.
I understand that the Salmon Bill will not now be taken in the last week before the recess but in the week that we come back in October. If the Government have plans to do it next week, fair enough. However, those of us who spent a long time discussing it in Committee—I am not just talking about my hon. Friends but about a number of Conservative Members as well, particularly the hon. Members for Crawley (Mr. Soarnes) and for Wealden (Sir G. Johnson-Smith)—put forward strong arguments, the better briefed we became, that something should be done about the drift netting position.
If that Bill is to remain until the hang-over of the Session, I ask the Government, for heaven's sake, to pay some heed to what was said in that Committee and reflect on whether the weight of argument suggests changes in the Bill. No one on that Committee will come and poke a finger and say, "We told you so," or make any political capital. It is not that kind of a Bill. Surely the purpose of House of Commons Committees is that there should be time for reflection. The Government may not have got it right, but that is not entirely the fault of present Ministers. The Bill goes back to the noble Lord Mansfield and the briefing that he received a long time ago. The fact is that basically much of the Bill is flawed and fundamentally wrong. If it is to be taken in the autumn, there is some time to do something about it.
Finally, I had the honour of attending the annual conference of the National Federation of Site Operators this year. It invites politicians of different parties. Have the representations that Mr. Spencer and his colleagues have been making to MAFF on the difficulties of site and location policy and rating been accepted and what does MAFF think should be done to help the site operators who, after all, are an important part of the rural economy and British industry?
5.45 pm
Mr. Jack Aspinwall: First, I thank my hon. Friend the Member for Sherwood (Mr. Stewart) for creating this opportunity to outline some of the unease and uncertainty expressed by many farming communities about the future of the rural economy.
Agriculture, as has been illustrated this afternoon, is in a state of flux. The development of technology in areas of specialisation and modernisation, and the requirements of the CAP, all herald change for rural society and industry. The increase in farm costs of some 22 per cent.—more
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than farmgate prices over the past seven years—is also worrying. It has been estimated that to bring supply in line with demand, 14 per cent. of land now devoted to agriculture will have to be put to some other use, and, in the next decade, 10 per cent. of our agricultural land could be looking for alternative uses.
That readjustment threatens the very existence of the rural community and the village idyll. Agriculture is crucial to the rural economy. For every job in farming, which now employs about 620,000 people directly, four or five jobs exist in industries connected with it. A lack of jobs discourages young people from staying in villages and their places are taken by people retiring to the countryside and by second-homers.
Rural Britain should not be a dormitory area which does not contribute to the well-being of the nation as a whole. Those areas should be full of appropriate vigour and activity, and, in a country which is in reality a crowded island, it is illogical not to use the potential that this valuable asset represents.
Changes are taking place in the way that we view the countryside and the agricultural community is changing too. In this, the Government must play their part in grasping the nettle and giving a clear commitment and guidance for the future of agriculture and the rural economy, assisting the farming community to be successful and moving towards exploiting the enormous potential in growing and providing food of greater variety.
There are three broad areas in which positive measures can be taken. I am heartened to see that certain steps are already afoot. Initially, there is room for development in marketing. The era of guaranteed high prices for unlimited agricultural produce is disappearing, the free market environment is becoming more a fact of life. The British farmer is responding to that demand and in so doing ensures top quality produce for the discerning consumer, properly graded and packaged.
It is on the demand side that action can be taken. Some of us are familiar with the Agricultural Marketing Act 1983 which established Food from Britain, a central coordinating agency to promote and improve the marketing of British agricultural produce. I have been heartened by the fact that the Government saw fit to provide £14 million initial funding during is first five years. I hope that that important organisation will continue to receive Government encouragement. The quality of products has now been given a degree of assurance under the British food quality mark scheme. That is soon to be extended and will, I hope, eventually cover most of the essential British foods to aid the discerning housewife.
Locally grown food must be promoted. There is considerable scope for marketing co-operatives — a recent example being the "Taste of Somerset" group which was set up three years ago, covering South Avon in which my constituency lies. It returned in triumph from the Royal Show this year with valuable orders for the future. With the farming community continuing to take the initiative, supported by the Government, I am sure that marketing will make a fundamental contribution to ensuring that a healthy rural environment is maintained.
Secondly, new ideas for crops should be looked at more positively, not merely shrugged off as irrelevant. Farms can become more varied, interesting and accessible, thereby finding new ways to earn money. Enterprising farmers have found ingenious ways to meet the challenge. In the west country there have been many reports of such

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entrepreneurial activities. One farmer has recently planted new cider orchards, because of the demand for cider and the huge demand from health food shops for English apple juice. On hearing the news that a great deal of apple juice was imported from France, I wondered why. Another farmer has begun specialising in worm farming. The worms turn muck into high quality compost and are themselves turned into protein feed additives.
There are many markets to be exploited. We spend about £30 million per annum on imported herbs. That must be a market to go for. We can grow all those herbs and there is a need for co-operatives and marketing coordination to take advantage of the opportunity.
There is also a growing demand for fresh, organically grown vegetables and health products. One notable farmer is selling sheep's milk cheese to Harrods and another has just doubled his organic vegetable business because the market is crying out for more produce, particularly mushrooms and other vegetables.
Another entrepreneur has decided to take on the French by going into snail farming, and British and English wines are beginning to take off in the world of the grape. The traditional Somerset crop of teazles is also taking on new life. The dried teazle head brings up the nap on high quality cloth, the demand for which is growing because of the current snooker boom.
Another opportunity exists in farm forestry. Our import bill is over £4 billion per annum and we import more than 80 per cent. of the timber that we use. With land being available, opportunities to develop forestry as a general farm enterprise must be encouraged. Such a long-term activity must receive realistic and continuing income support. There could be many more job opportunities in timber processing, too. The environmental impact on our landscape would be appreciable.
Those are just a handful of ideas. There are many more and a great deal is being done. The signs are that, with proper guidance and encouragement, British agriculture is taking on the future and adapting to a changing scenario, as it has always done.
The third area where positive steps can be taken is the encouragement of alternative strategies in the countryside. I stress that I do not advocate the permanent loss of our countryside to the property developer, but we must not let rural planning policy stand in the way of small-scale housing projects, the development of light cottage industries and the conversion of farm buildings. That point was adequately made by my hon. Friend the Member for Bristol, West (Mr. Waldegrave), the Minister for Environment, Countryside and Local Government, at the 40th Oxford farming conference earlier this year.
As early as 1984 the Development Commission urged the conversion of farm buildings and proclaimed the idea a "splendid success", asserting:
"conversions fulfil … the aim to make the countryside a place where local people can live and work, bringing back economic vitality to villages and small towns—and thus helping to keep open the local village shop and school."
In the west country such conversions have included local craft and furniture workshops and small food processing centres for locally made jams, cider, wines and real dairy ice cream. However, there are still too many local authorities that do not recognise that an unobtrusive rural conversion from a disused farm building to workshops,
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manufacturing units or recreational facilities will make a contribution to the local economy, providing jobs and enabling other functions to be done better, because more resources are available.
The growth of tourism and leisure activities also must be supported. A number of farmers and land owners have proved themselves to be most enterprising. One farmer who has converted some of his land into a lake lets out rights to trout fishermen, selling the supply to the market and providing a recreational amenity. There have also been conversions to golf courses, ski slopes and many other appropriate uses.
Other suggestions have involved the development of farm holidays and tourism and the opening of farms to the public. All those ideas have one feature in common —the aim of keeping the countryside active and vital. I trust that the Government will continue to give their support and encouragement to that aim.
The farming community has to face many problems. The recent hippy invasion cost farmers in my constituency many thousands of pounds. There have been high legal bills, including costs of £1,544 and £750 in legal charges alone. That is an enormous burden added to the damage costs, which I believe that the Government should cover on behalf of the general community. I shall be pleased to hear the views of my hon. Friend the Parliamentary Secretary when she replies.
Many other frustrations are suffered by enterprising country people, including red tape, especially in planning. I am sure that the saga of the simple bed and breakfast sign, with the frustration of endless paperwork, delays and confusion, is not an unfamiliar experience.
It seems that inflexibility about the prospects for change needs a thorough review. With the farming and rural communities taking the lead, supported by the Government encouraging and supporting marketing initiatives, new ideas for new crops and strategies, and perhaps even a differential rating system for some of the rural facilities and services such as small shops and the important village post offices, I am sure that agriculture and the rural economy can face the future with greater hope.
I received a letter recently from the secretary of the south-west branch of the Women's Farming Union and I think that the House would be interested to hear the heart of the letter. Mrs. Norah Pow wrote:
"Our brief, in the past few decades, has been to put food in the shops, in plentiful supply, at prices the consumer can afford. By our skill and use of grants from government we have fulfilled that order.
By telling us at a stroke to cease production as we have come to understand it, we shall denude the countryside of its traditional inhabitants, and fill it with trendy, commuter-type people, who have no real understanding of the countryside. To keep our nation strong, we must keep a strong presence of food producers in the countryside, give them a sensible price for producing less food, but make sure the people of the nation are warned that we shall keep those people there only if we arc prepared to eat what they produce.
Coupled with this, we must tell the people that trendy, imported lentils, muesli etc., is not the answer to good health. Take a look at diet in this country 50 years ago. Both milk and meat formed a good proportion of our daily diet. Above all, let the government get its facts right concerning diet. Milk is an important health food, and contains ONLY 3·8 per cent. fat. If they must attack bad diets, take a look at the fried chip, and sweet biscuit industry, at chocolate and … fizzy drinks, etc. — or are they afraid of the response of those manufacturers and marketers?

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Farmers have been asked to produce meat with less fat, and have responded admirably to this request. Yet persistently we hear through media and papers that eating meat is had for people. A sensible amount of meat is vital for a balanced diet, and stories to the contrary lead once more to loss of livelihood for livestock producers at the same time robbing third world countries of their own produced food, vital to their own peoples … Turning defunct farm buildings into rural workshops for the production of stained glass, pottery, and furniture will only slightly correct the loss of livelihood in villages. The answer should be to let agriculturalists continue to feed our own people, but let us get into the schools and hospitals, and tell them to feed people on locally produced, fresh, healthy food … Rice may be good for Indians, but jacket potatoes grown locally are the answer to both our rural, health, employment, and balance of payment problems."
The farming industry has a history of responsibility and an ability to respond well to change. The signals at the moment point to diversification, the mobilisation of entire farm resources, a more varied use of land and buildings and improvements in marketing. I feel confident that, with the Government's help, the British farmer and the rural community, will take on the challenge and win —preserving the rural environment, improving opportunities for employment, ensuring that the rural economy is sound, producing good British food at reasonable prices and making a vital contribution to the nation's quality of life.
5.58 pm
Sir Paul Hawkins: I congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) on his good fortune in the ballot and on the way in which he moved his motion.
Unfortunately, I cannot declare an interest. I should have liked to be a farmer many years ago and would like to be one now, but I was never allowed to be a farmer, because I was told that I did not have enough brains and my father did not have enough money.
I wish to say a few words to some of my hon. Friends who seem always to denigrate East Anglia. I was told by my hon. Friend the Member for Gloucestershire, West (Mr. Marland) — I think that Gloucestershire is the second best county in England—that we in East Anglia had no woodlands, but I think that Thetford forest in my constituency is the largest forest in England.
Many farms in East Anglia could do well with more woodlands. If more of our better lands—not the best—were put to woodland or forestry we would create a variation in the countryside and improve windswept areas with few hedges. Most places did not have hedges for many thousands of years. Part of Norfolk had no hedges because it was a sheep walk. Hedges were introduced in the 17th and 18th centuries. Now, most of the hedges have had to go.
Some people seem to think that too many trees in East Anglia have been cut down and that the area is inhospitable to those who want to walk and ramble in the countryside. East Anglia is an arable county. Apart from the woodlands at Thetford, crops of sugar beet and wheat are produced, and they cannot stand large numbers of people tramping through them.
Town-based organisations are rightly interested in the countryside, but I must impress upon them that unless farming is reasonably prosperous the countryside will suffer. Farmers and farm workers might leave the land, leaving possibly the most scenic areas as deserts, to which no one will want to come from the towns or from other countries.
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Town-based organisations often criticise farmers, but if they constantly attack farmers they are unlikely to gain their co-operation. Most farmers who live on their farms and whose families have worked their farms for generations are the best carers of the countryside. Their care has made our countryside what it is today — a wonderful and beautiful part of the world to visit for holidays and recreation.
I spent a week in Turkey. I could not have been received more hospitably. When I came back, even though in one weekend I had to attend five fetes within five miles and it poured with rain, I thought that green England was one of the loveliest countries in the world.
The main problem over the last few years has not been production. The greatest problem for farmers, particularly those who have entered farming during the last 20 years, has been over-borrowing. Each time the price of land goes up farmers tend to borrow against the increased value of the land, but when the land goes down in value farmers experience difficult times. When the value of land decreases and rents come down — as come down they must — younger farmers will have the opportunity to enter the industry once again. The Government must do all that they can to help.
I am glad that my hon. Friend the Member for Sherwood mentioned sugar beet. It is probably Norfolk's most useful crop. It provides employment in the factories, in the haulage industry and, although not as much as in the past, on the farms. Sugar beet puts more money into the rural economy—into the shops and villages—than any other crop. We are all extremely worried about the British sugar beet crop. I urge the Minister to try to speed up the inquiry to clear up the doubt and worry.
I do not care a damn who runs the British sugar industry, although I am in favour of a certain company which has pulled round other industries. I do not care a damn, so long as the sugar beet industry is looked after, and so long as whoever is in charge stands up for it against the machinations in Brussels. I do not want a monopoly in Europe. We must guard against that. British sugar must remain an important industry. I hope that the Minister realises how important it is, not only as a change crop in East Anglia with barley and wheat, but as a crop which creates employment and money for the countryside.
As I tried to say in my intervention, it is essential that research is concentrated on what worries farmers today. What further help can be given? Will research take into account the pros and cons of putting woodland on to farms, the pros and cons of the industrial use of farm crops and the pros and cons of any other farm crops that might be grown in Great Britain?
In the past 20 years the population of Norfolk has grown faster than that even of the south coast. East Anglia produces all forms of food for our own people. We must not dilute the area because it is of great benefit to townspeople who want to visit the countryside and the coast.
Because blight has hit so many of our industrial cities, many people want to return to the countryside. I hope that those cities will be made better so that people are content to retire to them, and to holiday in Norfolk. I do not want every village in Norfolk to become a settlement for retired townspeople. If that happens, an antipathy will grow among those retired people who think that the countryside

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is heaven but do not realise the realities. Food is just as expensive in the countryside as it is in the towns. There is no doubt about that.
We want Norfolk to remain an area which produces food but to which people will be pleased to come. We want people to visit our seaside, the countryside and the woodlands of Thetford. We want Norfolk to be a holiday place.
Once again I plead with the Minister to give us some ideas about which way we are going. We cannot have detailed plans. We know that most farming plans are made in Brussels, but the Minister must be able to say to British farmers, "This is the way we hope we will go. This is the way in which we will help farmers to go, subject to what happens in Brussels, and we shall try to persuade Brussels that this is the way we want Europe and Great Britain to go in the future."
6.10 pm
Mr. John Corrie: I congratulate my hon. Friend the Member for Sherwood (Mr. Stewart) on securing this debate today. I should declare an interest in that I am a practical farmer. How long that continues depends on how right my hon. Friend the Minister gets the policy over the next few years. There is no doubt that we are discussing this at a dramatic time for rural areas. I do not need to talk about the glut of food or the huge bank indebtedness because the Minister knows that very well. However, there has been a change in the past four or five years. Before that time all sectors could buy themselves out of a problem by simply producing more food on their farms to pay for their extra costs. Now, of course, all sectors where we have quotas, such as the dairy industry, can no longer do that and, as the costs increase, the lid is on the income of the farm and the pressure is on.
I, like my hon. Friend the Member for Gloucestershire, West (Mr. Marland), sincerely hope that the Government are looking at quotas for all products in the future because as the pressure increases for one product with quotas such as milk at the moment, people will simply jump from that to other sectors within the industry, such as beef and lamb. The sooner we bite the bullet the better.
We have to take about 2·5 million hectares out of production in this country. That does not necessarily mean that it goes out of production completely. There are ways of taking it out by going for extensive farming rather than intensive farming. The real answer to our problem is that the common agricultural policy has been too efficient. Many people say that we were wrong to encourage production as we have done. I would not agree with that. I hope that the Minister will agree that if we are to have quotas throughout Europe we have to reach the high figures in all products so that as a nation we start well up the league when that time comes.
I believe that we are going through what we might call the third industrial revolution. In the 1930s and 1940s we saw the move from horses to tractors. In the 1960s, 1970s and 1980s we saw a tremendous move forward in fertilisers, chemical sprays and modernisation of equipment. We have now reached the crunch time, when we have to cut back. I was pleased to hear my hon. Friend the Minister saying that the cutback would have to take place throughout Europe because there is no way in which
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farmers in this country will have their highly efficient industry cut just to please other nations throughout Europe.
As many people have said during the debate, it is not only the farmer who is affected when agriculture hits bad times. It is the machinery companies, the seed merchants and the fertiliser companies, which are now waiting on their money. The local blacksmith, the local post office, the local school and the local bus service are all parts of a rural economy. Empty farm cottages, which are lived in for only two months of the year because they have become second homes, reduce the rural economy.
It is no use simply looking at the agriculture industry in isolation. It is now a rural problem. Country life needs a viable agricultural industry to sustain its families or they drift to the towns and urban areas and cause problems there. It is no use tinkering with the system any longer. I believe that some drastic changes are needed and I am sure that the Minister is wondering why I do not suggest something.
I suggest that it is no use any longer having production subsidies when we have mountains of food and lakes of wine and milk. Therefore, those production subsidies should be changed in some way. I suggest that we should move from a headage payment to a hectarage payment. If we are to diversify into different sorts of industry within our agricultural industry or if we are to move to forestry on a small or large scale, we shall need some sort of social payment to farmers as the changeover takes place. Getting a hectarage payment would take the pressure off producing too much beef or lamb. In that way we may be able to hold on to the viability of our agricultural industry.
The problem is not the fact that we do not have enough money poured into the industry. Billions of pounds are poured in from Europe each year. The problem is the way in which the money is being spent. In fact, if we got rid of our surpluses now agriculture, would have billions of pounds to spend in a way that would certainly keep it going.
There is a second thing to be done which has already been mentioned. We should move away from grants of any kind and towards an agricultural bank with low interest rates. The Government would have only to pick up the bill between the low interest rate and the standard rate of interest. Of course, the lower the Government could keep the rate of interest, the better it would be. That would mean that we would not have people borrowing money to top up the grants that they get to put up buildings that they do not need, to grow a crop that probably nobody wants anyway. We have to find some way of keeping the industry viable and, at the same time, keeping a rural economy going.
The only answer to over-production is not to produce goods in the first place. The more one produces the more it costs to save the produce. We are simply wasting billions of pounds in storage costs. It would save us that vast amount of money if we dumped the entire lot in the sea. However, that is not morally acceptable. Of course we shall see a move to forestry but I believe that it will not be on a small scale because it will be extremely difficult to integrate that on smaller farms. However, there are vast areas throughout Scotland, England and Wales where woodland could be planted. As timber is one of our biggest imports, that would be no bad idea.
Leisure and recreation will play a much bigger part in the future because we have many people unemployed and,

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if we face hard facts, that will continue. Properly planned and integrated into the countryside, leisure and recreation can do the rural areas no harm whatsoever. I suggest that we have to look at relaxation of some of our planning laws. I could have 100 new families building houses on one of my islands off the west coast of Scotland which would regenerate that island. However, because of planning restrictions, only four houses are allowed to be built. We want conservation but we want it in a sensible manner, not on a blanket scale which sterilises huge areas of the countryside.
I said at the start that we are facing dramatic changes. We must sort out the future. It is no use just burying our heads in the sand and saying that we have to wait until the EC sorts it out. It is time that we as a Government showed a lead in this matter. We must sit down with the National Farmers Union, landowners, Government bodies and conservationists because it is our rural economy that depends on the outcome. Any delay will only pile up the problems more and more. I hope that the Government have taken on board how difficult the situation is just now and how much more difficult it will become if we delay any longer.
6.18 pm
Mrs. Elizabeth Shields: This debate is one of considerable interest to my constituents in Ryedale, as about 20 per cent. of the community are involved in farming or in the many allied industries that are the backbone of our small market towns.
More individuals would like to be involved in agriculture. Although the proportion of the rural population working on the land has fallen dramatically since the war through increased use of advanced machinery, there still exists a strong desire among those who have grown up in the country to seek a living from the land. One has perhaps to live in a hamlet or village oneself fully to appreciate the kind of love that people have for the land. Sadly, the kind of small farm or smallholding that would provide an entrance to such a living is difficult to come by in Ryedale, and no doubt that is true elsewhere too.
A few years ago North Yorkshire county council sold off many of its smallholdings, which became part of the larger estates, thus effectively preventing new and young entrants from gaining access to agriculture. In seeking to revitalise the role of the rural economy, we should look for ways to encourage the young to return to the land. Local authorities generally should stop selling off the smallholdings, and perhaps should increase the stock of land that is available for prospective smallholders. Authorities should be discouraged from pursuing an amalgamation policy unless that is essential.
I reiterate the statement of my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) about the need for an agriculture land bank. Such a bank would provide long-term, low-interest credit to enable small and new entrants to farming to stock and modernise their units. It would not be intended to provide finance for the purchase of land.
Farming cannot be changed overnight, as it needs longterm policies. That is something that the farmers among whom I live have told me repeatedly during the many years that I have lived in Ryedale, and not only recently. If they
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are to grow and prosper, they do not need policies that are made on one day and changed by a Minister on the following day, such as we had with milk quotas years ago.
Whatever emerges from the debate, I hope that policies will be forward looking and that we shall have a five to 10-year planning policy for agriculture.
6.22 pm
Mr. Michael Lord: I am delighted to have the opportunity of contributing briefly to the debate on agriculture and the rural economy. A large part of my constituency is agricultural and Ipswich, of which I represent a quarter, is much dependent on successful agriculture. I should like to rephrase the title of the debate, for I believe that agriculture is the rural economy. It is the mainspring that drives everything else along. If it slows, it has an effect on all the ancillary industries in rural towns and villages. That is an effect that can quickly be seen, and it is starting to be seen already.
I wish to raise only three issues. First, I want the House and my hon. Friend the Parliamentary Secretary to reaffirm their faith in farming. I am sure that my hon. Friend will do so. Secondly, I believe that we need an urgent commitment on the part of the Government to help to find ways of maintaining the dynamism of agriculture. Thirdly, I urge my hon. Friend the Minister to do all that she can to ensure that, however complicated the framework may become in which our farmers have to operate, the rules and regulations will be enforced fairly on everyone.
We do an enormous disservice to our farmers if we fail to recognise all that they have done in the past and are doing now to produce our food as efficiently as possible, and in looking after our countryside, for which, sadly, they receive more brickbats than compliments. We owe our farmers a great deal, and we should acknowledge that.
Currently, we have surpluses. That means that we have too much food. I acknowledge the existence of surpluses in some commodities and in some areas, but something inside me tells me that it is a bold nation, or perhaps even a bold world, that says that it has too much food. Setting aside the needs of those parts of the world that are desperately hungry, I have a real fear that if we are not careful the day may come when we do not have too much food. It is one thing to have too much food to feed the nation, and an entirely different thing to have insufficient.
Many years ago, when I studied agriculture, there was a nasty disease about that was called "take all". It meant that if a farmer was not careful he could wake up one morning and find that all his cereal crop had been destroyed. That disease seems to have been conquered by breeding and sprays. However, we are still vulnerable to some extent. In the 1960s, Dutch elm disease first came to our shores in its present form, and I was much involved. Since then that disease has almost completely destroyed our elm population. Perhaps the finest tree that we had in our landscape has almost disappeared for ever. It might still survive in isolated pockets, but, broadly speaking, it has been wiped out, and nowhere more so than in East Anglia. I suspect that in many instances farmers have been blamed for the changing landscape, when they have had no control over the change. I was especially involved with Dutch elm disease because of my then occupation, and 20 years later we do not have the slightest idea how to

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conquer the disease. I do not want to sound alarmist, but sometimes it is right for us to remember that we are not entirely invulnerable.
I have had the gravest and the most specific forebodings about an industry which has been driving forward so well for so many years being put into neutral or, worse still, into reverse. Two things must be tackled simultaneously. First, we must struggle with our European partners and the common agricultural policy to endeavour sensibly and at a reasonable pace to reduce and balance our food production. Many have suggested how that can be achieved. It is essential if we are to curb over-production and contain expenditure, but we must remember that from agriculture's point of view that is a negative approach. Secondly, it is vital that positive measures are taken to stimulate and encourage diversification in as many areas as possible as a way of maintaining the industry's momentum.
A way must be found of achieving international cooperation, both to help the hungry nations of the world and to avoid an international food price war, which would hurt everyone. If certain land is not to be used to produce current crops, as most seem to agree must happen, a much canvassed alternative is tree planting, in which I confess I have an interest. It seems to be a sensible solution, because it would improve the appearance of our countryside, and the land involved, although not available immediately for food production, could be cleared and used again for that purpose reasonably quickly if that were required, and we never know exactly what the future holds. Our huge import bill for timber is well known, and anything that reduced it would be to the country's advantage. Several of our farming organisations and the Ministry itself have produced publications on forestry and woodland management. If this activity is stimulated, it will do nothing but good for the nation.
Many new crops are being experimented with and several hon. Members have referred to the work that has been undertaken. The experimentation should be encouraged. More important in the long term, both cereals and sugar may be used in a variety of industrial processes in manufacturing various chemicals. These may prove important outlets in future.
My last subject is fairness, which is the issue that leads to constant complaints from farmers and various parts of agriculture in my constituency. Whether we are talking about the effect of CAP measures on Britain as a whole and the way that they are implemented in various member states, or whether we are talking about how CAP measures affect us internally as a nation, such as the problems that the co-responsibility levy is causing among cereal growers, compounders and feeders, it is essential that we do everything in our power to ensure that fairness prevails.
If we are not careful, there is a great danger that we shall talk ourselves into a depression. That is easily done, and we must avoid doing so at all cost. It is essential that we pledge our faith and confidence in our farmers for what they have done for us in the past and for what they will continue to do for us in future. We must do all that we can to keep the industry moving forward to prevent stagnation and decline. Finally, we must ensure that the rules, however complicated, are obeyed by everyone so that our
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farmers get a fair deal. If we do these things, we shall be doing all that we can to preserve the future of farming, and with it the fabric of our rural communities.
6.29 pm
Sir Hector Monro: I have agreed with many of the things which have been said in the debate, but I want to touch on a crisis that is affecting my constituency and the constituencies of other hon. Members in the north of England and Scotland. The crisis has arisen since the ban on the sale of lamb because of radioactivity. I accept that Ministers have done their best in the circumstances, and I accept what they have done, but I must press my hon. Friend the Parliamentary Secretary on compensation.
I have received letters from my right hon. and learned Friend the Secretary of State for Scotland and I noted the replies by my right hon. Friend the Minister of Agriculture, Fisheries and Food last Thursday, relating to compensation. The key issue upon which both Ministers are resting their case is
"compensation for severe loss in particular circumstances to specific farmers."
That could mean many things, but the key question which farmers in the North and Scotland want answered is, will compensation be paid? I hope that my hon. Friend the Parliamentary Secretary will respond to that when she replies.
The sale of lambs was banned in certain areas for three weeks from 1 July. Fortunately that ban was eased in some areas of low ground last week. In the areas where the ban has been lifted, some 15 per cent. of Iambs have failed to pass the grade because they are too fat. This position will deteriorate where the ban still exists and where the lambs are growing fatter.
I went to market on Friday to check and I found that lambs which were not graded in the 22 kilo range, were sold for about £26 or £28. They therefore lost the subsidy of about £15 per head. That is a severe loss to the total profit of the farmers and this has occurred, through no fault of the farmer, on account of events in Russia.
I was glad to see that the Meat and Livestock Commission, Ministers and the graders have accepted this point and have ensured that the lambs which have failed the grade because they are too fat, have been marked in the left ear. This leads me to hope that an administrative solution to the problem is being prepared. Once the lambs are marked in the left ear, purchasers will know that there is no conceivable way that the animals can be graded in future. That tends to lower the market price immediately.
Many farmers in my constituency, in the constituency of my hon. Friend the Under-Secretary of State for Employment, and in the constituency of my hon. Friend the Member for Cunninghame, North (Mr. Corrie) and elsewhere in Scotland, now have large numbers of lambs to sell. The farmers, the markets and the hauliers are all losing out.
In the past two weeks the position has been complicated through no fault of the Ministers'. The compulsory dipping regulations came into force on 28 June. While the three-week ban was in place, farmers employing good husbandry dipped their lambs because the weather was appropriate for that. The farmers have therefore been unable to sell the lambs for two weeks as that is normal practice. That means that, although there have been relatively few lambs coming on to the market over the past week or so, there will be a flood of fat lambs next week

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which will have a severe effect on price. I hope that my hon. Friend the Minister will not delay in giving a firm assurance that compensation will be paid in appropriate cases where lambs have failed to pass the grade on account of being overfat as a result of the recent ban on sales. The sooner that he gives that assurance the better. There is much dissatisfaction among farmers who have been caught out through no fault of their own.
Several hon. Members have claimed that farmers require confidence for the future to invest and prepare long-term plans. I do not wish to overplay the matter but I cannot understate the present difficulties. There are vast overdrafts, falling land values and there has been a big drop in income over the past farming year. I am glad that inflation has fallen to its present low level and that is a great help for farmers. As hon. Members have said, the reduction in interest rates is worth a tremendous amount to farmers.
The debate about the future of the industry has been going on for several years since surpluses became more and more apparent. Although there were tremendous problems about milk quotas and subsequent difficulties facing the milk industry, there is no doubt that the industry can now see a way ahead, and credit is due to the Milk Marketing Boards of the four countries involved. The main grain and livestock sector needs a clear way ahead and a light at the end of the tunnel. Many of the suggestions put forward have been on the fringe, but we must keep our thoughts at the heart of the matter — basic livestock and grain farming at which farmers are expert and have staff of equal efficiency. Craft workshops, tourism and forestry are welcome but represent only fringe elements to the farmers' income, not the part of his farm work which has always provided the main production.
My hon. Friend the Member for Cunninghame, North raised an important point. Positive planning in the countryside is vital. There is no doubt that, without affecting the environment, we can do an immense amount in the countryside to keep people living there, to give them the chance to build houses in the right setting and in the right density and help small developments in very small towns. We must keep a close eye on the rural communities if we wish to maintain the population in the countryside and ensure that facilities are as good in the small towns as they are in larger towns. We must consider the retention of the village hall, the village school and church, its shops and post office which constitute the rural community. We must work towards a rural policy for the future.
The Select Committee on Scottish Affairs investigated the Highlands and Islands Development Board and recommended very strongly that a rural development fund should be set up for the rest of Scotland to perform many of the duties carried out by the Highlands Board in Scotland which are carried out more effectively in England by the Development Commission than the Scottish Development Agency in Scotland. The Select Committee made an all-party recommendation to set up the fund with £25 million and that would do an immense amount of good for the rural economy in Scotland and a similar fund would benefit England and Wales.
We must pay a great tribute to what the Government have done to keep money in the hills and the less-favoured areas through the hill livestock compensatory amounts, the suckler cow subsidy and through the many grants available to farmers. I accept that grants have decreased especially in the case of the farm improvement scheme. I
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must tell my hon. Friend the Parliamentary Secretary, as I have told my right hon. Friend the Minister on more than one occasion, that when reducing drainage grants we must not muddle the normal replacement of drains in arable fields with those drains which might affect the conservation through draining wetlands. That is an important difference as we want to encourage tile drainage in cultivated land.
As my hon. Friend the Member for Cunninghame, North, said, there is a great future for agriculture. However, we must make firm decisions about the Government's lead and we must bear in mind that mainstream agriculture is important and that the fringe benefits to be gained by the alternatives which have been suggested — including, of course, forestry, which has a low cash flow and low input of employment — are secondary. We must concentrate on the main stream and I hope that the Government will do that in the immediate future.
6.39 pm
Mr. John Home Robertson: I am glad that the hon. Member for Dumfries (Sir H. Munro) was able to make his speech, particularly in view of the tantalising trailer in today's issue of the Glasgow Herald, which said:
"Sir Hector Monro, Tory MP for Dumfries, is expected to press another little thorn into the side of the Scottish Office … Sir Hector will be an embarrassment to Mr. Malcolm Rifkind."
I am not sure whether the hon. Gentleman lived up to those expectations, but I intend to refer to the point that he raised about the rural development fund for the parts of Scotland that are outside the Highlands and Islands Development Board area. I agree with the points that he made about the need for compensation for sheep farmers who have been affected by the ban that was imposed following the pollution from Chernobyl.
I congratulate the hon. Member for Sherwood (Mr. Stewart) on his double good fortune in securing the debate. He was doubly fortunate because the debate should have gone to my hon. Friend the Member for Linlithgow (Mr. Dalyell) a few weeks ago, but it was talked out by devious tactics by some Conservative Members. Nevertheless, I join my hon. Friend the Member for Linlithgow in congratulating the hon. Member for Sherwood on raising this important subject. We for our part would support the terms of the motion, not least because it highlights the Government's failure to give a proper lead to the agriculture industry at a time of radical changes in the circumstances facing the industry. The motion also recognises the existence of a range of special problems in rural Britain, which have been getting considerably worse throughout the seven years that the Government have been in office.
The hon. Member for Sherwood calls for a White Paper on agriculture. Some of us have been calling for that publicly for some time. The Minister fell a little short of refusing it yet again, but we shall see what comes of that in due course. There is no doubt that the industry needs a positive lead to get it out of the mess that it is now in.
The fact that the hon. Member for Sherwood has consistently supported the Government on these and other issues is something that he will have to explain to his constituents some time next year, according to all the leaks. With the best will in the world, I suggest that he may

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have more time to consider the problems of agriculture after his constituents have delivered their verdict than he has at present, but we shall see.
The debate has rightly centred on the agricultural industry. It has to be said that the industry has been drifting into chaos, along with the common agricultural policy, which is supposed to be supporting it. Some £15 billion was spent last year on the CAP, and the amount is going up again this year. That was 70 per cent. of the Community's budget. In spite of all the resources that are supposed to be supporting the rural economy and agriculture throughout Europe, we have falling employment in agriculture and rising indebtedness for many farmers in this country, as several hon. Members have said.
The CAP is a fairly ham-fisted instrument. It provides an open-ended artificial market for a range of agricultural commodities. We all know what is happening. It is supposed to be helping small producers, but inevitably it is providing a substantial incentive to larger farmers to fill the Community's intervention stores with vast quantities of junk cereals and other surplus stock. I do not necessarily criticise the farmers who are filling those stores—indeed, it would be the height of hypocrisy for me to do so, because I am one of them. But we all must recognise that the system that provides such incentives for people to do such things must be absurd.
Last year the European Community was the proud possessor of about 16 million tonnes of cereals in store. Here in the United Kingdom we started this year with 85,000 tonnes of beef, 240,000 tonnes of butter and other milk products, and no fewer than 5,700,000 tonnes of cereals in intervention store. Make no mistake, there will be more this year because, in the absence of a positive lead to the industry to get away from that farce, it is inevitable that production will continue to increase.
The Government and the Commission keep putting off the decisions that should be taken to control that situation, but there is a growing awareness that something will have to happen. The trouble is that neither the Government nor the industry has a clear picture of what that something will be. The only thing that we are all absolutely clear about is that the common agricultural policy is not working. The hon. Member for Gloucester, West (Mr. Marland) pointed out the amazing fact that last year we spent £2·2 billion on agricultural support in the United Kingdom, but the net farm income of all farmers in the United Kingdom was only £1·1 billion, so obviously there is something far wrong with the targeting of the resources.
The Minister of Agriculture, Fisheries and Food spent his first year or so in office saying that price cuts were the right way to control the production of surpluses. He is wrong, for the very reasons that the hon. Member for Gloucestershire, West, among others, gave. A marginal cut in prices would be a spur to increased production. It is possible that the proposed co-responsibility levy will add to the spur to increased production whereas the massive cuts in prices that would be required to suppress production would probably bankrupt a large number of smaller producers. I was delighted to hear in the Parliamentary Secretary's speech that the Government, as of this debate, intend to abandon the ludicrous position of using the price-cutting mechanism to deal with the problem.
730
The other alternatives are much more specific constraints. Quotas are the obvious one. There has been some support for that idea during the debate. We have heard about the imposition of milk quotas. Even the most fervent supporters of the Minister of Agriculture, Fisheries and Food would admit that he was rushed into that decision and did not act cleverly. It was a panic decision in its implementation in Britain. It has given rise to unforeseen problems. The most topical one must be tenants' rights to the value of quota when they give up their tenancy on farms. However, I agree with several hon. Members that the system is working. There may well be a case for quotas in other sectors. However, the Minister and the Parliamentary Secretary have been talking about set-aside. We are longing to find out exactly what that means. If it means some sort of subsidy to encourage farmers to fallow some of their land, there may be a case for it. But if it means a longer-term abandoning of land, which was suggested in the structures proposals from the European Commission which we debated last week, there would be much opposition to that suggestion.
Let us emphasise the fact that the delay and uncertainty surrounding the industry just now are extremely damaging. My hon. Friend the Member for Carmarthen (Dr. Thomas) emphasised that. Against that background, we see the massive cuts in research and advisory services £16·5 million slashed off the budget of the Agricultural and Development Advisory Service, 800 fewer advisers in England and Wales, and a 41 per cent. cut in the funding of the Scottish agricultural colleges. This is no time to be cutting back on the research back-up and advice available to farmers. For the Minister to talk about value for money in such circumstances is absurd.
The Opposition say that there should be three fresh approaches within the CAP. First, we emphasise the need for structural change. That means alternative land uses, alternative crops, alternative stock and in particular the cultivation of trees on agricultural land.
Mr. Mark Hughes: It is very good to say that we want alternative uses. Given modern technology producing more food, whether from livestock or grain, to pretend that the way out of excess production is by growing trees is to delude ourselves. We have too many people, too much land and too much technology. We cannot pretend that we get out of that by growing trees.
Mr. Home Robertson: We are trying to be constructive. The growing of trees is one of several alternatives. What the industry needs above all is a positive lead, which it is not getting from the Government. The National Farmers Union has admitted that between 100,000 and 150,000 hectares will have to be taken out of production of existing crops. It is time for positive guidance on that. That is one of the things that the Ministry of Agriculture, Fisheries and Food should be doing.
The second area on which we want to concentrate is the need to negotiate a major shift from the intervention system to alternative support mechanisms, which would help the consumer as well as the farmer. The obvious examples of that are the beef variable premium and the sheepmeat regime, or our old deficiency payment system. There are signs that the French and the Germans may be moving in that direction. We should encourage them.
Thirdly, there should be better targeting of support, especially for smaller farms and less-favoured areas. To

731
achieve that, we must repatriate many of the nuts and bolts of the CAP. We must get the local decision-making done in Britain rather than Brussels.
At national level, we must restore ADAS and build up a rather different land bank from that which has been talked about today, to make more land available to let to people who want to come into the industry. My hon. Friend the Member for Pontypridd (Mr. John) has talked of that before. It is a scandal that it is so difficult to start a career in farming.
The Labour party has an excellent record when it comes to our relationship with agriculture. It was a Labour Government who brought in the Agriculture Act 1947, which provided the basis for the industry's recovery after the war. When we were in office until 1979 we tried to guide the industry on the way ahead by publishing White Papers setting out our general objectives. There has been no White Paper on agriculture since 1979.
The industry does not know what it is supposed to be doing. The National Farmers Union of Scotland says in its journal this week:
"the British Government's attitude — so far as we can discern it—seems less than lukewarm and is uncertain.
This is part of the general complaint that the Government has no strategy for the countryside, that there is no sense of purpose for producers in the more peripheral regions, and policy makers have no clear notion of how we shall enter the next century with a countryside as a place in which wealth is created".
The industry does not know what direction it is supposed to be going in.
Mr. Lord: Will the hon. Gentleman give way?
Mr. Home Robertson: No. I am sorry, but there is not time and the Minister wants to reply.
There is more to rural Britain than agriculture. There are many long-standing problems in rural Britain which have been aggravated by the Government's economic policies and other aspects of Tory dogma. Rural unemployment is a growing problem in many areas. We have the problems of conservation and the environment, the rural housing crisis and the disruption of already poor transport services by the Transport Act 1985 and perpetually high fuel costs. Government spending cuts and successive rate support grant cuts have had an impact on a range of services and on schools, which are important in rural communities.
It is in response to that challenge that organisations such as Rural Voice, in England and Wales, and the Rural Forum, in Scotland, have been set up to try to fight the corner for rural communities. I have experience of the threat through the proposed closure of my village school, which my children attend. I am acutely conscious of how fundamentally important such services are to rural communities. I am delighted to say that people in my constituency have succeeded in fighting off the efforts of the Liberal chairman of the education committee and the former Conservative administration in Lothian regional council, which wanted to close rural schools. One cannot over-emphasise the importance of schools and housing in rural communities.
It is important to emphasise the serious poverty that is to be found in many rural areas. In its spring edition of "Poverty", the Child Poverty Action Group says:
"approximately 25 per cent. of households"
in rural Britain
"were living in or on the margins of poverty."
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In such areas, costs, including transport costs, are higher than elsewhere. Much work must be done to sustain services to create jobs and to make life more tolerable in rural areas.
The hon. Member for Dumfries mentioned the need for a rural development fund. We both represent part of the rural south of Scotland which does not have the benefit of a specialist rural development agency. The Select Committee on Scottish Affairs, of which he is a member, and the Confederation of Scottish Local Authorities presented a powerful case, supported by the Rural Forum, for a modest rural development fund to help the Scottish Development Agency and local authorities to promote services and employment in those areas, but they were rejected out of hand by the Government on the most spurious grounds. The hon. Gentleman and I can make common cause on that. There is an urgent need for a development initiative to create jobs and sustain services in rural areas.
There is a serious crisis in rural communities today. It takes an insidious form and we cannot leave it to market forces to find a resolution. It will take a Socialist Government, who are prepared to intervene, to overcome those problems.
6.55 pm
Mrs. Fenner: With leave of the House, I should like to reply to the debate. In view of the shortage of time, hon. Members will have to rely on getting a note from me.
I again congratulate my hon. Friend the Member for Sherwood (Mr. Stewart). I am aware of the anxieties that he expressed, especially in regard to getting some forward plan. As for a White Paper or a similar document, I said earlier that a great deal is going on in Europe at the moment and we would want to set out such a document only if it were not in danger of being changed immediately.
I listened with some interest to the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), who would spend a great deal of money. He mentioned marketing, but obviously failed to take account of the fact that we promoted Food from Britain with £14 million. We are the first Government to have promoted a marketing organisation. We are continuing to put our money where our mouth is by giving £1 for every £2 which comes from the industry.
Several hon. Members were worried about research and development, but £200 million on agricultural research and development and food development is not a measly sum. I understand that a letter from the alliance was sent around, saying that a spending standstill would be imposed on agriculture under alliance policy. The hon. Member for Truro (Mr. Penhaligon) admitted in the House on 6 May during a debate on the Finance Bill to my hon. Friend the Chief Secretary to the Treasury that that letter had been sent out and that there would be a spending standstill. I do not therefore plan to take instruction from the hon. Member for Ceredigion and Pembroke, North about how to support agriculture when he would put a freeze on support for it.
Does the hon. Member for East Lothian (Mr. Home Robertson) believe that the Labour Government's policy of fixing land tenancies for three generations did anything to make rented land available? That is why we introduced the Agricultural Holdings Act 1984—
Mr. Home Robertson: It does not work.
Mrs. Fenner: It has not been working long enough for the hon. Gentleman to make such comments.
My hon. Friend the Member for Dumfries (Sir H. Monro) is anxious about the marketing of lamb. My information is that the average market price continues to strengthen—over last week's price, and over that for the same week last year. The general picture is that trade is improving. Rejection rates have been falling. If my hon. Friend has additional information, we must examine it, and I should be obliged if he would supply me with it.
The hon. Member for Linlithgow asked about the comments of the National Federation of Site Operators. I shall ensure that the hon. Gentleman's comments are drawn to the attention of my right hon. and noble Friend the Secretary of State for Employment, who is apparently responsible for these matters. The hon. Gentleman also mentioned horticulture. I assure him that the Dutch have stopped support for their glass horticulture industry—it is not necessary with reduced energy prices. The case is being presented in the European Court. If it succeeds, we shall press for recovery of the money that has been paid. The hon. Gentleman also asked about the Salmon Bill. The business for next week has not yet been announced, so I cannot say when it will return to the House.
My hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) was worried about swine fever. He realises that we have to determine the origin before we can seek any banning operations. He complained about the delay in obtaining samples from Weybridge, and I shall have to look into that specific point.
Many questions and points were posed by two of my colleagues who have apologised because they have had to leave the Chamber, and perhaps I shall have to write to them as well.
This has been a useful debate. Hon. Members have had the opportunity to express the concerns that farmers have clearly expressed to them. I congratulate my hon. Friend the Member for Sherwood on choosing a subject of such interest to so many hon. Members. We have noted his request for a White Paper or a similar document.
It being Seven o'clock, proceedings thereon lapsed, pursuant to Standing Order No. 6 (Arrangement of public business).

Felixstowe Dock and Railway Bill
Order for consideration, as amended, read.
Motion made, and Question proposed, That the Bill be now considered,
7.1 pm
Mr. Ken Weetch: I beg to move, That the Bill be considered on this day six months.
The consideration stage of this Bill has been given quite and exciting send off. It is not often that I read what I have always loosely regarded as being an up-market newspaper —Lloyd's List. It is not essential reading for me, but I read it today and it gives an exciting trailer about the Bill. It states:
"It has been one of the hardest fought non-Government Bills to have come before the House of Commons in recent years, involving issues of fundamental difference for the two sides of the House — private versus public enterprise, a planned economy versus laissez-faire, and to some extent, the position of the trade unions, particularly in the dock industry".
As part of this exciting preliminary, the article names the hon. Member for Bury St. Edmunds (Sir E. Griffiths) and myself as two of the leading dramatis personae in the debate. Therefore, whatever the course of the Bill, we can at least say that it has had an exciting introduction.
In opposing this consideration in principle, and in debating the Bill on Report, one is for all practical purposes doing two things. The first is making a judgment on the Committee's conclusions after that Committee had heard weeks — in fact, months — of evidence and a variety of sumbissions from the promoters and petitioners. Secondly, this stage of the legislative process offers the House an opportunity to argue detailed amendments now that we have seen the Bill as amended. As the debate progresses, my hon Friends and I will speak in more detail to the new clause and the amendments that have been selected.
The Bill is likely to prove a watershed in private Bill history, because during its legislative passage there was dissatisfaction in some quarters as a result of certain things that occurred during the procedure on the Bill. That has prompted thoughts which I understand may assume more formal procedural shape about the whole privatte Bill procedure.
At present, the point I am making is that careful scrutiny is needed because the whole procedure enables commercial companies, such as the Felixstowe Dock and Railway Company, and absentee landlords, such as Trinity college, Cambridge, to make a profit out of commercial development while at the same time they are able to circumvent normal planning procedures.
I have formed the conclusion that this Bill and others can be a backdoor way around normal planning obligations that a developer would have to undertake through the normal framework of planning procedures. It is my view that the entire private Bill procedure, as experienced from the history of this Bill, ought to be examined.
Mr. Jonathan Sayeed: Did the Felixstowe Dock and Railway Company have the option of taking any course other than through the private Bill procedure?
Mr. Weetch: I would have preferred the whole thing to go through the normal local planning procedures, but I appreciate that intervention. I should point out that I took

735
no part at all in the Committee debates. I did not even go to hear evidence, because as the main opponent I kept out of it altogether. I believe that the advantage of the normal local planning procedures is that they enable more local people to be involved.
Mr. Andrew F. Bennett: Surely the company could have put the outline in the Bill and proceeded with it following a local planning inquiry if the go-ahead was given. That would have offered the objectors the best of both worlds. They could have objected to the principle on the one hand and the details at a planning inquiry on the other.
Mr. Weetch: My hon. Friend is authoritative on these matters. I certainly accept that his suggestion would have been a much better alternative. However, there is consensus about the fact that we should have procedures under which the maximum number of people can give opinions and make objections if they wish to do so. There should also be the maximum local involvement in a development such as this.
Mr. Allan Roberts: As I understand it, the Bill gives general development order status to the Felixstowe Dock and Railway Company so that it becomes its own planning authority. I hope to speak later about the virtues of the port of Liverpool. One of the problems there is that the same powers exist. That has resulted in a scrap shredder being erected opposite residential properties without the need to consult the local community or the local authority. That proposal has been opposed not only by myself and the Labour party but also by local Conservative Members of Parliament. It has also been unanimously opposed by the local authority, yet there is nothing that we can do about it.
Mr. Weetch: My hon. Friend is anticipating a number of points that I shall make later.
I have tabled amendments that indicate that for a long time the Felixstowe Dock and Railway Company has been exempt from planning procedures. I shall quote chapter and verse from schedule 12 to a planning and development order dated 1977 to show that that is so. At this stage I content myself by saying that my hon. Friend has a point that will he developed later in the debate.
There is no need to go over much of the old ground. I say that because many issues arising from the Bill provide new subject matter for fresh debate. That brings me to the brass tacks of my case. I dispense with further preliminaries and come to the main conclusions that were announced at the Committee Session on Wednesday 12 March this year. In stating the main conclusion, the Committee said, in essence, that the Bill should proceed and made several other points that would command general assent in the House.
First, on page 2 of the minutes, the Committee stated:
"The Committee believes that for commercial and strategic reasons Britain must have ports which are capable of providing the service that is expected of them in the market place by the users."
That is absolutely right and a conclusion of fundamental truth. Secondly, the Committee said that there had been a strategic shift of port capacity to the east coast, and that is absolutely true. Thirdly, it said that since the port was due to expand in a north-westerly direction up the Orwell estuary in an area of outstanding natural beauty, a higher standard of proof was needed than in an average case. The
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Committee made those three points well, and they are all unexceptionable. The main pronouncement certainly was not.
The crux of the case for the Committee's conclusion is given on page 4 of the Committee's minutes, in the penultimate paragraph, which states:
"The only real alternatives, it seems to us, to Felixstowe are Southampton, London and Harwich; but these ports have a variety of problems which discourage their growth and they have not shown any active intention to expand the provision of container berths. It therefore appears that there is no alternative port to Felixstowe."
If that is the substance of the case, the proposition does not reach the first fence because, apart from any interpretation of the evidence, it is factually untrue. The proposition from the conclusion is that Felixstowe is the only real practical possibility for the expansion and development proposed in the Bill. That contention is so manifestly unsound that it might have been proposed in error. However, it is on the record, so I shall examine it closely.
According to the Committee, Southampton, London and Harwich are not suitable for this type of growth because certain problems discourage their growth and they have no active intention to expand. During the debate, hon. Members will speak in favour of ports in other parts of the United Kingdom and the Committee's contention will be examined in rather more detail than I can examine it now. 1 can give the House only one example, which related to Harwich and the Harwich Parkeston Quay Bill which is now in Committee.
On Second Reading of that Bill the hon. Member for Harwich (Sir J. Ridsdale) said:
"the principle of the Bill is to create new quays, vital for our growing trade, with no damage to the environment and to reclaim land which will become valuable industrial land with admirable port facilities."—[Official Report, 28 April 1986: Vol. 96, c. 718.]
That seems strangely at odds with the Committee's main conclusion that Harwich has no intention of expanding, therefore leaving Felixstowe as the only alternative. Not only is that contention unsound, but it is factually inaccurate and does not stand up to the evidence. At the end of the day we are arguing about a more fundamental principle, because a private Bill should stand the test of an examination of realistic alternatives, which there never was because of the Committee's faulty conclusions.
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Quite the reverse is the case in respect of Harwich and Parkeston quay. Three hundred and thirty acres of mud-flats are to be reclaimed, a substantial sea wall is to be constructed, and four deep-sea container berths are to be created for handling 100,000 containers a year. The overall cost of the investment is £100 million. If I relate that factual information to the Committee's conclusion, far from being discouraged, and far from being devoid of an intention to expand, the evidence suggests that Harwich has every intention of expanding and that there is the intention of creating a deep-sea container complex that will rival Felixstowe itself. I am on record as supporting the Harwich Parkeston Quay Bill. If we are to have a substantial deep-sea port in East Anglia, it should be at Harwich, not on the Orwell estuary, because there are few, if any, environmental problems in Harwich.
All my argument stems from the factually incorrect information in the Committee's minutes. The conclusion reached on the evidence about a central problem, which

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this Bill and other Bills like it set out to explore, is at issue and is critically important. I and many other hon. Members were seeking guidance from the Committee on the problem. It is the Government's overall intention, from a general statement of their environmental policy, that this and other developments like it should not go ahead where environmental matters are at stake, unless there are overriding reasons of national importance. What is the flow of evidence and reasoning for overriding national importance in this case? What development should be allowed in the Orwell estuary to be consistent with it and with its designation as an area of outstanding natural beauty? That question should have been answered, but was left as much unanswered at the end of the Committee's proceedings as it was at the beginning. The Committee gave us no guidance whatever.
I remind the House of the factors that come together in the Orwell estuary. Besides being an area of outstanding natural beauty, it has been designated as a site of special scientific interest, a site of international importance under the Ramsar convention on international wetlands and an area identified under European legislation as of importance for bird conservation. The key question for the Committee, which is not only of particular interest but of general principle, is: what economic case can override environmental factors of that order and significance? It has to be pretty formidable before we can accept that there is such an overriding national interest.
Mr. Sayeed: That point is dealt with on page 2 of the evidence given on Wednesday 12 March 1986 to the Committee, in paragraph 4. Both the petitioners and the promoters agreed, although there was disagreement as to the exact figures, that there would be a need for three deep-sea container berths by the mid-1990s, if not sooner. As the hon. Gentleman well knows, the Harwich and Parkeston quay, even if that Bill is passed, will not have been built by then. It was accepted by both petitioners and promoters that there was a national need. Given that only Felixstowe was prepared to fulfil that need, the Committee decided to allow the Bill to proceed.
Mr. Weetch: I thank the hon. Gentleman for that information. Although I do not agree with the conclusions of the Committee, I pay tribute to the hon. Gentleman and his colleagues for the diligence with which they examined the information. There was a mountain of work, to which they stuck to the end. Credit is due to them. The hon. Gentleman's intervention may help to underline my next point.
The conclusions revolve around what is the overriding national interest in the matter, and this was the central point of argument in the Committee. Critical evidence on the subject was given and argued in the sitting of Tuesday 25 February this year. The argument was not only of particular importance. It was of general importance. I have looked carefully at the evidence. When we debated the Bill some months ago, I gave my opinion on what the Felixstowe Dock and Railway Company had put forward and I shall not go over that again, but certain things emerged.
First, what was being argued by the company was not in the national interest, but was in the commercial interest of the shareholders. It is not to be assumed, even in an emerging laissez-faire economy, that the interests of
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shareholders are always identical with those of the community. Secondly, the national interest could never be determined because there was never any yardstick by which to measure it. All the evidence as to future trends and variables, such as alternatives to Felixstowe, contained a vast amount of speculation in which one person's statistics were often as good or as bad as those of another.
Mrs. Ann Clwyd: Have the Government not consistently withheld information on their calculation of what a fixed Channel link will mean in terms of taking container traffic from the deep-sea ports? The Minister has repeatedly been asked that question and has refused to give an answer.
Mr. Weetch: I thank my hon. Friend for that intervention. I shall come on to deal with what the Committee did and did not do in debating the fixed link and cargoes of transhipment. Some of the evidence gives at least a partial sign of lack of thinking on that point.
On balance, this is a matter of one overriding national interest against another. Port facilities are a national interest, as are conservation, an area of outstanding natural beauty, an SSSI, international wetlands and bird conservation. The company never demonstrated, because Solomon himself could not have demonstrated, the balance of interest between those two factors. At the end of the day, it is a matter of judgment and opinion. The company could never prove beyond all reasonable doubt that there was a case for expansion, because it is not possible to prove it. What is more, the company could not even prove the case on the lower standard of the balance of probabilities, given the evidence that it submitted.
Given that statistical and economic trends turn on matters of opinion, where the company has a commercial axe to grind anyway, an examination of the evidence shows certain things. The main aim is said to be the development of deep-sea container facilities, but the main growth of deep-sea trade has been due to the penetration of containers into deep-sea cargo, most of which, according to the economic ports experts, is virtually complete. Development can come about only from substitution and intrusion into the employment and trade prospects of other ports.
Secondly, as time passes, less containerisable cargo remains, and at the end of 1984 only 1·8 million tonnes remained to be containerised. In terms of port capacity, this represents between two and three deep-sea container berths. Not only have I looked at the evidence, but I have had a number of people who are quite used to port and traffic statistics looking at what the Committee had before it. In coming to its conclusion the Committee ignored other factors — for example, the Channel tunnel fixed link, which will consume a good deal of political time in the House before we are finished. The Committee ignored transhipment via France, which at present is not important but will be an unpredictable factor when the Channel tunnel opens. There is no consensus on what will happen if that ever sees the light of day.
Mr. Sayeed: If the hon. Gentleman reads the evidence given to the Committee, he will find that the Committee asked specifically for figures after allowance was made for traffic going via the Channel tunnel.
Mr. Weetch: I am just about to quote from the evidence given by the managing director of the Felixstowe Dock

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and Railway Company in response to the questioning by my hon. Friend the Member for Leeds, Central (Mr. Fachett) on 4 December 1984. On page 15 my hon. Friend asks Geoffrey Parker, the managing director:
"Before we leave the point about the Channel Tunnel, whatever form that takes, I assume that the company has made some projections as to the likely impact of various schemes upon your trade at Felixstowe."
That was a good question.
The Felixstowe Dock and Railway Company had come to prove its case for an overriding national interest, but had made no projections about the possible effect of the fixed link on trade. I do not know whether people who read these things and who are experts in port matters think that the company put up a strong case. When one complicates the case and asks why Felixstowe and not somewhere else, given the environmental obstacles to development, the case for the expansion of Felixstowe becomes pretty gimcrack.
Too many environmental questions have been left unanswered. This expansion in the Orwell estuary should riot proceed, because too many environmental factors come together all at once. Even if it were only an area of outstanding natural beauty, that would be enough to throw great doubts upon it, but since it is a site of special scientific interest and has been indentified under the Ramsar convention, and since the European directive is also involved, all these other aspects are also involved. If ever there were a case for the environmental interest, on the balance of advantage and the evidence, being stronger than the economic and commercial interest, this is a clear example of it.
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The Felixstowe Dock and Railway Company does not have a very strong case. I relate that to the Government's written answer on 29 July 1982 about areas of outstanding natural beauty, when the right hon. Member for Henley (Mr. Heseltine) said:
"The Government agree with the commission's view"—
that is the Countryside Commission—
"that, in general, it would be inconsistent with the aims of designation to permit the siting of major industrial and commercial development in AONBs. Only proven national interest and lack of alternative sites can justify any exception." —[Official Report, 29 July 1982; Vol. 28, c. 708.]
Nobody can argue that the Felixstowe Dock and Railway Company proved its case beyond all reasonable doubt. Emphatically that was not the case.
A good deal of the environmental evidence was put to the—
Sir Eldon Griffiths: Before the hon. Gentleman reaches what I divine to be his peroration, does he not think that the statutory duty that is laid upon the county council and the district councils to look after environmental matters has been effectively discharged, in so far as those local authorities are now satisfied and have withdrawn their objections to the Bill? Why does he think that he knows so much better than the elected local authorities Of the area?
Mr. Weetch: I can answer that question directly. To its shame and eternal discredit, the local authority that had most of the responsibility for scrutinising this legislation which short-circuits the planning procedures — namely, the county council — never even petitioned against the Bill. To go back a little into the history of
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the county council's scrutiny, the county council's planning committee rejected the whole idea because it was contrary to the terms of the Suffolk structure plan. However, by political jiggery-pokery the county council managed to get it pushed into a siding and then agreed not to petition.
The county council stands accused of dereliction of duty. At the end of the day, it had a responsibility to scrutinise the legislation on behalf of the ordinary people but it never did so. It is also a fallacy to argue that just because Suffolk coastal district has dropped out it is satisfied with the Bill. It may have been satisfied with the compromise that was reached, all in all, but that is not the same as saying that the authority is satisfied with the Bill. My view is that it will come to regret the fact that it did not scrutinise the matter more closely.
Mrs. Clwyd: I am most interested in my hon. Friend's account, but does he not think that the question of the hon. Member for Bury St. Edmunds (Sir E. Griffiths) was most peculiar? It seemed to imply that it is wrong to criticise conclusions that are reached, however the) may be reached, by a local authority, be it a district council or a county council, because it consists of elected representatives. Does my hon. Friend think that the hon. Gentleman would show the same restraint and would fail to criticise Labour local authorities for their actions, because they, too, are composed of elected representatives? Does he not think that it was a very odd question?
Mr. Weetch: Yes, I do indeed. Right from the start there have been all sorts of odd things about the Bill, and I have no doubt that there will be odder things about it before it is finished.
Mr. Derek Fatchett: Before my hon. Friend leaves his point about the planning requirements, although he has dealt effectively with the attitude of the Suffolk county council to the Bill, surely the crucial argument, to which he may he about to refer, is that, because of the private Bill procedure, those who would have objected under the normal planning procedure have had an incredible cost and burden imposed upon them and feel very unhappy about the fact that they have been deprived of the ability to make their case effectively. I think my hon. Friend will agree that those who have petitioned against the Bill are still very unhappy in many respects about it.
Mr. Weetch: Yes, that is a fair point. The private Bill procedure that was used in the 18th century for the various enclosure Acts has not changed very much. It is antiquated and is not consistent with the standard of democracy that we are entitled to expect in 1986. I am advised that the private Bill procedure is to be looked at critically, so I shall not stray further down that path.
When one considers the effect that the expansion of this port will have on the environment, however gallant, imaginative and expensive may be the efforts that are made to landscape, ameliorate and disguise the effects of the intrusion by this commercial development, they can never restore the quality of the environment that will inevitably be lost. At best, the landscaping will be only limited in value. It will require half a generation to take effect. Even though it will create peripheral screening, it will be something that is quite unnatural in an area of outstanding natural beauty, with estuarial scenery that is

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of critical importance to East Anglia. Whatever is done, it cannot alter the change that will take place to the view from the river.
Finally, on ecological grounds, Trimley marshes, with the qualification about their development—this is the area that is to be substituted for what will be lost—will never be a substitute for Fagbury flats. As the Bill is an environmental disaster, my hon. Friends and I have concentrated upon tabling a series of amendments which might yet, if passed, limit some of the environmental damage to the area. I oppose the Bill.
Sir Eldon Griffiths: As I understand it, the motion before the House is
"That the Bill be considered upon this day six months."
I am not sure whether that is the motion to which we are speaking at the moment.
Mr. Peter Snape: Wrong again.
Mr. Deputy Speaker (Mr. Ernest Armstrong): The motion before the House is that the Bill be considered. It is now being considered.
Sir Eldon Griffiths: I am obliged. I wished to be clear that it is not the dilatory motion that we are debating. As the promoter of the Bill, I am anxious that it should be considered and completed as soon as possible. It is right that I should comment on some of the extraordinary allegations by the hon. Member for Ipswich (Mr. Weetch). Not to put too fine a point on it, his speech and the efforts of his colleagues tonight are designed not to protect the environment, to advance the cause of the other Suffolk ports, or to protect the national interest, but to wreck it for the worst possible reason—revenge.
Dr. Oonagh McDonald: Will the hon. Gentleman give way?
Sir Eldon Griffiths: No, not until I have made my point.
Mr. Fatchett rose—
Sir Eldon Griffiths: I shall also give way shortly to the hon. Gentleman. There is plenty of time this evening.
I said that the principal motive of the hon. Member for Ipswich and his colleagues is revenge, and the reason is clear. The militant London end of the Transport and General Workers Union has never forgiven the port of Felixstowe, the dockers of Felixstowe and the local branch of the TGWU of Felixstowe and East Anglia for having worked during the abortive dock strike. It cannot forget that, and it is determined, if it can, to get its own back on a private enterprise port that continued to work and on the dockers who continued to assert their right to go to work during a strike when there was no proper ballot. That is the principal motive of the hon. Gentleman and his colleagues. There is no argument about that. The hon. Gentleman is trying to wreck the Bill out of spite.
Dr. David Clark: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Bury St. Edmunds (Sir E. Griffiths) to cast aspersions and to allege that Labour Members are not interested in opposing the Bill for environmental reasons but oppose it only at the behest of a trade union? May I ask what your ruling is on that point, Mr. Deputy Speaker?
Mr. Deputy Speaker: That is a matter for debate. Various allegations are made every time I take the Chair. It is a matter for debate, and certainly not a matter for me, fortunately.
Mr. Fatchett: Further to that point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Bury St. Edmunds (Sir E. Griffiths) to attribute motives to my hon. Friend the Member for Ipswich (Mr. Weetch)? I listened to my hon. Friend's speech carefully and I enjoyed it thoroughly, but at no stage did he refer to the London docks or the TGWU—
Mr. Deputy Speaker: Order. It is a question of alleging various motivations behind speeches. That is not a matter for the Chair.
Sir Eldon Griffiths: I now give way to the hon. Member for Thurrock (Dr. McDonald).
Dr. McDonald: I thank the hon. Gentleman for having the decency to give way at last. He made some utterly disgraceful allegations — allegations that were without substance — about our motives. Many of us have a constituency interest in the matter, because we represent dock areas where jobs may be adversely affected. What right has the hon. Gentleman to suggest that we are not acting properly in our capacity as constituency Members of Parliament, and only in that capacity, in raising issues which will seriously affect our constituencies? What right has the hon. Gentleman to make such absurd and disgraceful allegations? After all, let us face the fact that many of the hon. Gentleman's speeches are made because he is a paid representative—
Mr. Deputy Speaker: Order. The hon. Member for Thurrock (Dr. McDonald) will be trying to catch my eye, but she has made her first speech.
Sir Eldon Griffiths: I was referring primarily to the hon. Member for Ipswich, but if the cap fits the hon. Lady, she should wear it. I now deal with the hon. Gentleman's speech before I come to the substance of the matter before us.
Mr. Fatchett: We shall all enjoy the hon. Gentleman's speech but it would be helpful if he could clarify his preamble before he deals with the points raised by my hon. Friend. In that preamble he said that the motive was to wreck "it". I was not sure, because the sentences got mixed up, whether the reference to "it" was to the Bill or to the national interest? Or does the hon. Gentleman equate the Bill with the national interest?
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Sir Eldon Griffiths: I have not yet reached the national interest, but I assure the hon. Gentleman and the House that I shall.
I was dealing specifically with the motivation of the hon. Member for Ipswich. I have been at a loss to understand why he still tries to wreck the Bill. If I believed for one moment that he had the support of the people of Suffolk, I would understand it, but of course the local authorities, the county council and the Suffolk Coastal district council in whose territory the port lies, have all considered the matter in the greatest detail and with the greatest care. They are clear that it is in the interests of the people of their areas that the Bill should become law. There can be no suggestion that the hon. Gentleman is representing the considered best interests of the people of

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the area. It might be thought that at least he is representing Ipswich, but unfortunatly in this case that is not true either. The local authority in Ipswich has never petitioned against the Bill. It was open to it to do so, but it chose not to.
Mr. Weetch: Ipswich borough council never petitioned against the Bill because it put its trust in me to oppose it. I have done that right from the start to the best of my ability.
Sir Eldon Griffiths: The hon. Gentleman can put a gloss on it, but the fact is that his borough authority decided not to petition against the Bill. It might have been thought that because Ipswich is a municipal port and, in the early stages at least, its chief executive, Mr. John Evelyn, was unhappy about some of the navigational aspects of the Bill, at least the Ipswich port authority would have petitioned against the Bill. But it did not do so. As a result of the debates in the House and negotiations that took place between the promoters and the port of Ipswich, a happy compromise was arrived at, and consequently the port of Ipswich has no objections to the Bill. I must start by asking who it is that the hon. Gentleman represents in his desire to wreck the Bill.
Mr. Weetch: My electors.
Sir Eldon Griffiths: The hon. Gentleman says his electors. Let us consider that. Many people in Ipswich vote Labour. They voted the Labour members of the Ipswich port authority into office. I take it that that is what the hon. Gentleman would regard as local democracy, but that elected local authority has not opposed the Bill. Moreover, in Ipswich many people, as in Felixstowe and the rest of that part of Suffolk, work in the docks industry. If they are not dockers they may be haulage people or employed in the service industries that support our ports industry. What is their view? The TGWU in East Anglia, including those who democratically represent the dockers of Felixstowe and Ipswich and the rest, are clear that they want the Bill to be passed.
They have said that their local Member of Parliament's objections to it are frivolous and malicious. That is their view, not mine—[Interruption.] I do not have to rely on the views of the trade unions, the local authorities or the people of Ipswich. I am saying only that it is difficult to understand whom the hon. Member for Ipswich represents. There is virtually a full house against him. The local authorities, the dockers union and, as far as can be discovered, the people of the area are against him. One is therefore entitled to ask whom he represents and who has put him up to try to wreck the Bill.
One can draw no other conclusion than that the hon. Member for Ipswich is seeking to wreck the Bill because a certain militant section of the Transport and General Workers Union, totally unrepresented in East Anglia or by the dockers of Ipswich, Felixstowe or Harwich, put him up to wrecking the Bill. There can be no other explanation. The hon. Gentleman said that the question whether Felixstowe's expansion was in the national interest had not been properly considered. Apparently, he has not thoroughly studied the work or report of the Private Bill Committee.
I have with me the Chairman's conclusions. Indeed, I notice that my hon. Friend the Member for Bristol, East (Mr. Sayeed) is in his place, and he was also a leading Member of that Committee. But the Chairman said:
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"The Committee believes that for commercial and for strategic reasons Britain must have ports which are capable of providing the service that is expected of them in the marketplace by the users and we should not be content just to have ports which are there to transship goods to and from continental ports … There has been an agreement in certain aspects as far as figures are concerned, though I am bound to say there have been a number of assumptions on both sides that have been made as far as future growth is concerned, but certainly there was agreement … that Britain may need two or three more deep-sea container berths by the mid 1990s … there was disagreement as to where these berths could be developed. It is clear, and I think beyond doubt …that port customers have transferred from the west coast of Britain, and it would he unrealistic to suggest that they are going to return there. The only real alternatives, it seems to us, to Felixstowe, are Southampton, London and Harwich".
Mr. Allan Roberts: They are wrong.
Mr. Griffiths: I am quoting the Committee's report, not mine.
It continues:
"but these three ports have a variety of problems which discourage their growth and they have not shown any active intention to expand the provision of container berths. It therefore appears that there is no alternative port to Felixstowe, and since we accept the national need for expanding deep-sea container provision, we believe that that need does exist, that then there is a case for expanding Felixstowe in the national interest. In the opinion of the Committee, therefore, the commercial case for Felixstowe expansion is sufficiently weighty to satisfy us that the development of Felixstowe should be allowed."
I read out such a long quotation simply because the hon. Member for Ipswich alleged that the national interest had not been adequately considered. But the Committee weighed that question carefully and made a measured judgment. I have quoted it, and it is clear-cut.
Mr. Andrew F. Bennett: The people from Southampton could not make any observations to the Committee because, as a result of the procedures, they were not aware of the Bill's promotion at the very time when they should have been submitting their objections. But Southampton has permission for one, if not two, additional berths to take that sort of trade. The House recently debated proposals for Harwich, which would allow further development. I understand that there are also proposals for Tilbury and for places along the north coast such as Hartlepool and places on the Tyne. But the Committee heard none of that evidence because of the problems involved in trying to submit petitions and in trying to understand the procedures of the House.
Mr. Sayeed: Will my hon. Friend give way?
Mr. Griffiths: Of course I shall give way—
Mr. Deputy Speaker: Order. The hon. Member for Bristol, East (Mr. Sayeed) should not intervene in an intervention or we shall get nowhere.
Mr. Griffiths: Perhaps I should continue for a while, and then give way later.
My response to the hon. Member for Denton and Reddish (Mr. Bennett) is that I was dealing with the allegation by the hon. Member for Ipswich that the national interest had not been adequately considered. I demonstrated, I think beyond peradventure, that the Private Bill Committee spent a lot of time considering this issue and came to the unequivocal conclusion that the development was in the national interest. The hon.

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Gentleman may disagree with the Committee, but I hope that he will accept that the allegation that it did not consider that question has fallen to the ground.
The hon. Member for Denton and Reddish has said that there may be something going in Southampton, Hartlepool and elsewhere, and that is fine. But his next point did not do the port of Southampton justice. He virtually said that it was so uninterested in its own future that it did not even know that it could give evidence before the Committee. The Committee opened its doors to anyone with a view.
Mr. Sayeed: Does my hon. Friend agree that any Committee that sat for six months would be hard pressed not to hear evidence on behalf of other ports, even if it did come via petitioners against the Bill? The evidence shows that the petitioners made the case for Southampton, London and Harwich, so we had access to information. But we also found, if I remember correctly, that container berths in Southampton had been decommissioned and car berths had been put in in their stead. There are other points, which I hope to make later.
Mr. Griffiths: I am grateful to my hon. Friend for that point. However, having given way to almost all and sundry, I should like to draw my remarks to a conclusion.
I hope that I have disposed of the argument that the national interest was not considered. It was, and the Committee reached a conclusion.
The hon. Member for Ipswich also spoke about the environment. I must say that, listening to him, I did not recognise the reality. There was an enormous amount of discussion and debate between the promoters and the petitioners about a whole range of environmental questions. On Second Reading, I said that I would not be a party to the Bill's passage unless the Bill enhanced the local environment. I can say that as someone who was one of the first Under-Secretaries of State for the Environment. As I understand it, the promoters have agreed with the county council, the district council and with many of the other petitioners, on a substantial environmental improvement of which they can be proud. The hon. Member for Ipswich should recognise how much good has come from those negotiations.
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This development affects 0·25 per cent. of the total 150 square miles in that area which has been designated as being of outstanding natural beauty. The Felixstowe extension will affect about 98 acres of poor low-lying land of very heavy clay. It is separated by a clay wall from approximately 140 acres which comprise a small area of salt marsh with creeks. The extent of the environmental impact of which the hon. Gentleman is complaining is 0·25 per cent. of that area.
In close co-operation with Trinity college, whose concern for the environment is not in doubt, the dock company has agreed to carry out a large programme of landscaping which includes proposals to plant approximately 500,000 new trees, creating approximately 85 acres of additional woodlands. The dock company and Trinity college have agreed a detailed schedule with Suffolk county council safeguarding the public rights of way, a new viewing area, development control, highway improvements, light and noise control, and providing free off-the-road lorry parking.
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As a result of the representations made by petitioners, there is also to be a 176-acre nature reserve at Trimley marshes, plus the saltings and the sea wall. The dock company will provide £130,000, and Trinity college a further £10,000, to cover the initial establishment costs and subsequent management expenses of the new reserve. These are major environmental improvements.
Mr. Andrew F. Bennett: If this is all so good, why has the Royal Society for the Protection of Birds felt unable to accept the compromise? I hope that the hon. Gentleman will not claim that it, too, is in the pay of the London militant dockers.
Sir Eldon Griffiths: I shall discuss the bird people later.
In addition to the environmental improvements already mentioned, the Bill also substantially restricts the further development of Trimley marshes. I was glad to see a negotiated arrangement requiring the company to operate the proposed new works so as not to exceed specified noise levels. These will be monitored and enforced by the Suffolk Coastal district council.
The environment has been fully safeguarded. Indeed, it has been enhanced. That is why Suffolk county council, and the Suffolk Coastal district council, which have been deeply concerned to protect the environment, have agreed to support the Bill. The extraordinary thing is that, with the solitary exception of the Royal Ornithological Society, everybody, including environmentalists, supports the Bill.
The hon. Member for Denton and Reddish asked me a question which, as an admirer of the Royal Society for the Protection of Birds, I must answer. I have a letter from Mr. Stuart Housden, the head of conservation planning, and parliamentary agent for the RSPB, to Suffolk county council. In fairness to the House, I should say that the society is not fully able to withdraw its opposition to the Bill, nor voluntarily to enter into a compromise.
Mrs. Clwyd: Why not?
Sir Eldon Griffiths: Because it is concerned that to do so might be
"interpreted as a weakening of our resolve to defend such sites in the future".
That was the reason given by Mr. Housden for the society's inability to withdraw its objection.
Mr. Housden's letter to Suffolk Coastal district council, which the hon. Member for Ipswich slurred in his speech, began:
"I would like to thank you for your efforts in negotiating with the promoters of the above Bill. I know you have worked hard to find a satisfactory outcome to the concept, proposed by the Dock Company, of an alternative wetland at Trimley Marshes. It is our understanding that the promoters offered an area of 176 acres of arable land on Trimley Marshes for conversion to grazing marsh together with some 20 acres of sea wall and saltings, the whole area on a 99 year lease."
The company offered the money, and a shooting-free zone of 400 yards around the site was also agreed. The management of the reserve would be in the hands of the county council, the district council, or the Royal Society for the Protection of Birds. The letter continued:
"The RSPB considers that with suitable management, such as that practised by ourselves at Elmley in Kent and elsewhere, it would be possible to create a worthwhile reserve on Trimley marshes that would probably attract birds in nationally significant numbers."
That statement by the RSPB hardly represents 100 per cent. opposition. I continue:

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"The reserve could not compensate for the loss of SSSI land at Fagbury … Nevertheless, a reserve at Trimley would be of considerable ornithological interest and superior to anything possible at Levington."
Unlike the hon. Member for Ipswich, the RSPB takes a positive, balanced and measured view of the matter. The society recognises the gains, and regrets some of the losses. Although it is unable to abandon its opposition because of its future position, it lends no support whatsoever to the hon. Gentleman's slur on the county council.
No doubt other hon. Members have a great deal to say. I can only repeat that the Committee weighed the national interest carefully. The environmental considerations have been protected, and the promoters of the Bill have arrived at sensible compromises. The Bill should proceed and the hon. Member for Ipswich does himself no credit in continuing his efforts to wreck it. The Bill offers East Anglia the prospect of more modern ports. It offers the people of Suffolk more prosperity and many more jobs. It offers the nation an opportunity to ensure that the great globe-girdling container lines of tomorrow will continue to stop in Britain, and will not simply divert to Rotterdam or even Le Havre, leaving our country to be a contributor by short, cross-Channel support lines.
The House must decide whether it is in the national interest to ensure that we shall have a port of world standard. If this Bill was offered to Liverpool, Southampton or Bristol, they would jump at it and none of the hon. Members representing those areas would try to wreck it as has the hon. Member for Ipswich.
When the Japanese, the French, the Dutch and the Germans see that, at no cost to the taxpayer, we have the opportunity of investing substantial sums in the modernisation of our ports, which would create many more jobs, and ensure prosperity, which I am sure Opposition Members would wish to see, but that the House of Commons is trying to wreck such a possibility, they will think that we are mad. I believe that hon. Members will not accept such wrecking tactics, and I hope that they will resist the efforts of the hon. Member for Ipswich to destroy the future of Felixstowe.
Mr. Alllan Roberts: I very much regret the personal attacks made by the hon. Member for Bury St. Edmunds (Sir E. Griffiths) on my hon. Friend the Member for Ipswich (Mr. Weetch) whose integrity is beyond dispute. To present my hon. Friend as someone who is being manipulated by mindless militants is to have an imagination beyond Mr. Derek Hatton's wildest dreams. My hon. Friend is recognised throughout the Labour party as a masterful model of moderation. There may be some on whom the mud might stick, but my hon. Friend is not one. He is fighting a campaign on behalf of his constituents, which every fair-minded hon. Member recognises. He has fought for Ipswich and its people for some years, as general election results in his constituency have successively shown, often against the national swing.
However, there is no doubt what motivates my opposition to the legislation. The Bill should not be considered further because it will detract from every other port in Britain. Britain already has too many deep-water facilities. If the Bill becomes an Act not one new job will be created. Jobs may be created in Ipswich or in that area, but each of those jobs will be taken from another port, including the port of Liverpool which I represent.
There are a number of reasons why I oppose the Bill. First, some aspects of it will he environmentally damaging
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to the area where it is proposed to site the facilities and my hon. Friends will be dealing with the environmental considerations later.
I have experience in Liverpool of how the kind of general development order planning powers, which are proposed in the Bill, affect local communities. I referred earlier in an intervention to the scrap shredder which will be sited in my constituency. That affects not only my constituents in Bootle but those of the hon. Member for Crosby (Mr. Thornton). Strangely enough, he was a member of the Committee which considered the Bill and he did not oppose the general development order planning powers. Yet at the same time he is supposedly campaigning alongside myself against those powers as operated by the Mersey Docks and Harbour Board in the port of Liverpool because they will affect some of his voters and environmental damage will be caused if a massive scrap shredder and scrap mound are erected in an area where, in similar circumstances to this Bill, there is a nature and bird reserve and a wonderful vista.
Also surprisingly, the hon. Gentleman accepts the Committee's conclusion, to which the hon. Member for Bury St. Edmunds referred, that only three options are ruled out — Southampton, London and Harwich. He does not seem to consider all the ports on the east and west coasts. The hon. Member for Bury St. Edmunds said that he did not want Britain's ports merely to ferry cargo across the channel, between the south of England and the continent, but to compete with the large ports of Europe. If that is so, deep-water facilities do not have to be sited in the south; they can be sited anywhere—on the east coast or, dare I say it, on the west coast. They can be sited at Merseyside in Liverpool. To suggest that Southampton, London and Harwich are the only other options and that they are the only ones that the Committee has considered, is to fail to consider what is in the national interest.
Is it in the national interest to develop a port which will result in job losses in an area of high unemployment such as Liverpool and which might take trade away from Merseyside? That cannot be justified when Britain already has enough port facilities to meet any future projections.
I am also opposed to the legislation because clause 4 is headed:
"Dock Workers Employment Scheme not to relate to any part of limits of dock".
The hon. Member for Bury St. Edmunds said that if the Bill were on offer to Liverpool we would jump at it. I assure him that that is not the case. Any legislation that destroys the dock workers' employment scheme would not be jumped at by any scheme port in Britain. The Bill does not simply extend the port of Felixstowe; it extends a non-scheme port. It will mean the use of non-scheme labour.
8.15 pm
Mr. Kenneth Hind: The hon. Gentleman knows my interest in the port of Liverpool. Is not one of the major reasons why the Bill was initiated in the first place the fact that a non-dock labour scheme port, as against the labour scheme ports, is able to charge lower landing charges, because it is not burdened with the dock labour scheme? Therefore, will he reconsider what he has just said?
Mr. RobertsI hope to prove that Liverpool is now one of the most successful ports in Britain because it has a dock labour scheme. If non-scheme ports were developed there

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would be considerable difficulties and problems with labour relations, which would penalise the ports. If one considers the success of the freeport in Liverpool, developed by the Mersey Docks and Harbour Board, one sees that it has become Britain's premier freeport. In its first year it handled £24 million-worth of goods from more than 300 companies, and volumes in the first quarter of this year show that traffic through the United Kingdom's largest freeport will far outstrip its first-year figures. Individual consignments of cargo and complete shiploads are creating work for employers of the port of Liverpool which would otherwise not have been available.
Let me tell the hon. Gentleman why that is the only successful freeport that the Government have established that has been successful. It is because it is a scheme port and before it was established the Mersey Docks and Harbour Board negotiated with the Transport and General Workers Union an agreement of what was scheme work and what was not.
Mr. Deputy Speaker: Order. I know that the hon. Gentleman was tempted by the intervention, but we must get back to the Bill.
Mr. Roberts: I accept your ruling, Mr. Deputy Speaker. I do not want to be ruled out of order by simply speaking about the port of Liverpool and not discussing the Bill.
I and many of my hon. Friends who have constituency interests in representing ports other than the port of Felixstowe have a legitimate right to oppose the Bill and the port's development since the Committee did not consider all the alternatives and it is not in the national interest to develop extra deep-water facilities in a country that already has too many.
The Seaforth container terminal and the grain terminal in my constituency are successful and under-used. Yet at a time when there are such massive facilities under-used, the Government who believe in the free market are telling us to create more facilities which might or might not be under-used and might not only be under-used but may take jobs away from other ports even more hard hit than Felixstowe.
For the reasons that I have given, the Bill should not be further considered. It is an extension of a non-scheme port, it gets round planning arrangements, which I know can cause tremendous problems, it is not in the national interest to have ports closing, and the legislation will have environmental consequences.
Mr. James Hill: In my years in the House I have been recognised as a supporter of the city of Southampton, and that city revolves around its port. I feel that I am the champion of a port which, over the years, has suffered some ill luck, some bad management decisions and some serious misjudgments by the unions.
Only three years ago the port was at a standstill, but I am happy to say that it is now making good progress and is the major port for the import and export of cars. Two weeks ago, through my good offices with the Taiwanese Government, we were able to arrange a twinning with the Taiwanese port of Keelung, which is in the 1 million containers a year category. We hope to encourage more Taiwanese shipowners, not only the Evergreen Line, but Yang Ming and OOCL, to use our container ports. At present, most Taiwanese owners use Felixstowe, where
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they have a three-year contract on advantageous terms. An extension of Felixstowe would deal a blow to Southampton's hopes of revival.
In the good old days of the European Parliament, my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) appointed me chairman of transport and regional planning for Europe. We should have grasped the nettle firmly at that time and worked out a common ports policy in which the checks and balances would have been settled.
Checks and balances are essential. Is it wise to create a giant container port when increased employment in that area will result in more unemployment in other areas? I do not say that Southampton cannot meet the challenge, because I believe it can. We have tremendous advantages over Felixstowe, including a wonderful geographical position and almost a double tide which remains high for some hours. We can easily work deep draught container ships and there is no delay in services at the Southampton container port.
The over-provision of container berths will present problems, even though we in Southampton feel that we may not be able to cope with what we hope will be the future demand. We are making progress on the container side. It may be said that we are looking for the cessation of competition, but this all goes back to the Government's lack of a common ports policy.
The well-being of our ports and the need for continuity and encouragement of our work forces are important. We are a nation of seafarers and we need a comprehensive ports policy. I have often told my right hon. Friend the Leader of the House that if we had had a debate on a common ports policy, even for only three hours, we might have been able to resolve some of the anomalies that are creeping in.
Of course Felixstowe would like to develop another 730 or 750 acres of land. Southampton does not have 750 acres to develop, though we could provide a useful service with only another 30 or 50 acres.
It will be wrong for the Government to support the Bill, which must stand on its own feet. I oppose it, not because I am opposed to the private sector or to the fact that Felixstowe is not a member of the national dock labour scheme — though that gives it an advantage — but because the Bill is not related to the United Kingdom's ports requirements. As a seafaring nation, we need to keep our ports alive. Should we do that by providing increased competition at every hand? No. We must create an adequate ports policy by negotiation and dialogue and by planning for the future.
I am sure that the Bill will receive the assent of the House, but I shall not support it, because it is the product of convoluted thinking. The idea that we need another 730 acres of container berths is sheer nonsense. We could provide many acres of container facilities in Southampton. Our work force is bringing its costs down to the Felixstowe level, despite the fact that Southampton is a national dock labour scheme port.
Even my friends in the Transport and General Workers Union would agree that having to pay for jobs that are not required is a financial handicap. Southampton has been a scheme port for a long time and has suffered for that reason.
The suggestion that Felixstowe competes with us is inaccurate, because we compete under a liability. We have always stressed that fact. The new Associated British Ports

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company has said that it would welcome the abolition of the national dock labour scheme, but the TGWU is wedded to it. However, this is not the time to discuss that subject. I have told my hon. Friend the Under-Secretary that anomalies must be cleared away and that there must be free competition and no political or financial bias against Southampton.
I note what the hon. Member for Bootle (Mr. Roberts), who has left the Chamber, said about the freeports. That was an imaginative Government scheme. I hope that the Government support it, although it contains some curious anomalies. I thought that the freeport scheme was only the beginning of the advantages for Southampton, because Felixstowe was excluded from the list of freeports.
I hope that tonight, whatever the outcome of the vote, we shall all agree that before long there must be a debate on a national ports policy. I am sure that the Department of Trade and Industry will welcome that. I am certain that all responsible hon. Members representing a port area will want to know that the future of that port is openly discussed and that there is no need to send letters to colleagues. I hope that the national scheme will take precedence over the private Bills.
8.30 pm
I am sad. I am not always keen on the people with whom I have to go into the Lobby. I do not mean that in a derogatory sense, but it is embarrassing for a well-known moderate Right-winger to be seen in the Lobby with the other side. When we come to vote I shall be forced, reluctantly, because of the lack of a national ports policy, to oppose the Bill. Southampton needs every promotion and support that the Government can give. I am sure that the Bill is not the way to promote Southampton's cause.
Dr. McDonald: I listened with great interest to the hon. Member for Southampton, Test (Mr. Hill). He defended his constituency interests properly and legitimately. I only wish that the hon. Member for Bury St. Edmunds (Sir E. Griffiths) would understand that many of us are here because we intend to defend our constituency interests.
I want to discuss the minutes of evidence taken by the Committee on Wednesday 12 March 1986. I wish in particular to talk about page 2 of those minutes, which deals with the principle of the Bill. The minutes say:
"The only real alternatives to Felixstowe are Southampton, London and Harwich. But these three ports have a variety of problems which discourage their growth and they have not shown any active intention to expand the provision of container berths … There is no alternative to Felixstowe … Since we accept the national need for expanding deep-sea container provision we believe that the need does exist and that there is a case for expanding Felixstowe in the national interest."
I want to discuss the reference to the national interest and the alleged lack of any active intention by Southampton, London and Harwich to expand the provision of container berths.
I do not presume to comment on Southampton's position, because that has already been done and it is not in my constituency. I shall not presume to comment on Harwich. However, I shall discuss the port of London, because the major part of it is located in my constituency. Tilbury docks are responsible for 17 per cent. of the total national container traffic in this country each year.
It is alleged that Tilbury has taken no active interest in developing container traffic. That is not true. It is useful to consider some examples from the series of press reports
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provided by the Library in computer printout. On 7 June this year the Port of London Authority's Tilbury docks announced that it had won another major shipping service and said:
"The first vessel on Baco Line's well-established revolutionary barge and container service between Europe and west Africa was successfully handled in dock over the Easter weekend.… PLA was pleased with the fast turnaround performance effected by the workforce on this initial ship."
Further ships were expected in the next few days and in the coming months. A port authority does not make such an announcement if it is not interested in developing container traffic.
I can give more examples of the developments at Tilbury. Tilbury does not confine itself to container traffic, but is developing all sorts of other services such as roll-on, roll-off ferries, linking Tilbury to Zeebrugge. It does not concentrate particularly on container traffic.
Lloyd's List reported in September last year on the privately owned, multi-purpose west African terminal at Tilbury. It said that it
"is rapidly gaining a reputation for fast ship turnrounds and a productivity handling rate that compares with the top continental ports. At certain times the 108 PLA … registered dockers load 100 tonnes of cargo and 15 containers an hour which is the highest productivity rate in the Port of London. Another attraction of WAT is its total flexibility".
That is obviously an extremely important consideration. The west Africa terminal handles 10 shipping lines from all over the world, in particular focusing on trade with west Africa.
The report went on to say that by the end of 1985 the west Africa terminal
"expected to handle … 100,000 tonnes of container cargo. This should be sufficient to reach a break-even position."
The report added:
"In July last year the Port of London Authority announced that the last great untapped market—China… was beginning to fulfil its potential. The expansion in the market is now being reflected in increased container sailings to the People's republic. At the end of this month there will be a weekly service from Tilbury to south east Asia and China."
That is just a random selection of examples of expansion in container traffic at Tilbury. It is all facilitated by the agreement of the Transport and General Workers Union to work flexibly to ensure a fast turnround for the ships and to ensure that Tilbury is competitive. How does that fit in with the claim that Tilbury has shown no active inclination to expand container berths? It is nonsense.
The managers and workers — not just the dockers, but the white collar workers—want to develop container traffic at Tilbury. Tilbury has the facilities to do that. Furthermore, Tilbury has an important location and realises the need to develop all the potential of that location. It is next to the Dartford tunnel and the M25 which encircles London and connects to the main motorways to the north and south of England. Therefore, it is an extremely important location and Tilbury is well aware of the need to expand and exploit that potential in the development of its container traffic. As I have said, management and workers alike are determined to do that. Therefore, the claim in the Committee's evidence is patently untrue. I do not see how the Committee can seriously have considered evidence and reached a conclusion of that kind. It should have made sure that it

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had gone through every item of the expansion of container traffic in Tilbury to clarify the truth or falsity of the claim that it was making.
I can understand the reference in the evidence that the ports have a variety of problems. For example, Transport pointed out in March and April 1985, in a special detailed survey of United Kingdom ports—I wish that it was the sort of thing that the Committee had read, because if it had done so it might have come to different conclusions—that there are problems of the past. The spokesman for the PLA who was interviewed for the article made it clear that the PLA was aware of the problems. He stressed that the strikes of 1984 had, fortunately, caused far less damage than was at first thought and that the port had recovered very quickly from them.
The Port of London Authority has, of course, to cope with the burden of historic debt, and that presents the PLA with a problem in the development that it would like to see take place. It considers that the Government could take a much more active part than they do by providing money to dispose of the problem of historic debt. However, that does not prevent Tilbury from endeavouring to develop in every way possible. In fact, the article goes on to report the refurbishing of the London cruise terminal, as it is now called, where 100 passenger ships call in at Tilbury every year. It adds:
"The port has also been encouraged recently by a healthy amount of short-sea container traffic".
That is a significant statement, made in a detailed survey about what is going on in United Kingdom ports. One can only conclude that in this part of the evidence the Committee did not know, and perhaps did not care about, what was going on in other United Kingdom ports as long as it could reach this facile and false conclusion about the lack of interest in developing container traffic in other parts of the country.
Mr. Sayeed: Has the hon. Lady read the evidence to which we listened? If she has, she will recognise that the statement that she has just made is incorrect.
Dr. McDonald: If the Committee had fully considered the implications of the kind of evidence that I have just put before the House, it could not possibly have reached such a conclusion, unless the conclusion had nothing to do with the evidence.
Mr. Sayeed: Answer the question.
Dr. McDonald: I have answered the question. When the hon. Gentleman finally gets up to make his own speech, rather than intervening in everybody else's, I should like to hear how he managed to ignore evidence of that kind, because it certainly cannot lead to the sorts of conclusions that the Committee arrived at, as the hon. Member for Southampton, Test and myself are making clear. After all, it is the port of Southampton and the port of London which the Committee primarily attacked in the conclusions that it outlined.
Inevitably, as a constituency Member of Parliament, I have to look at the implications of the development at Felixstowe for Tilbury docks itself. It is worth the House bearing in mind that we are looking at the development and extension of a port, broadly in the south-east of England, East Anglia, where there are already 19 ports of various kinds in operation. That is a large number of ports
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and it is just a small proportion of the number of ports and docks facilities throughout the whole of the United Kingdom. As the hon. Member for Southampton, Test said, there is a need for a proper national ports policy. I shall come back to that when I speak about whether this development is in the national interest.
8.45 pm
In Tilbury docks there are now 1,200 dockers and 1,400 white collar workers. It is the largest employer in my constituency. Of course, it is not just a question of the number of people who are directly employed by the docks. The presence of docks, especially if they are functioning well, gives rise to all kinds of ancillary employment. The ratio to which it gives rise is generally estimated at 3:1. There are all kinds of workers involved in my constituency, whether they be members of Customs and Excise, police, pilots, tugsmen, lightermen, carpenters or electricians, or whether they are providing various kinds of service for the port. All their jobs depend on the continued healthy existence of those docks.
I know that very often people get the impression that unemployment does not occur in the south-east. However, unemployment in my constituency is running at about 16 per cent. and there are over 7,000 people out of work at present. Any squeeze on Tilbury docks through the development of a huge and unnecessary container facility at Felixstowe docks could lead to further unemployment in my constituency, not just directly in the docks, but throughout the constituency. That is one important reason why I am taking part in the debate. The last thing that I want to see is any further growth in unemployment in my constituency. We have already suffered enough over the past seven years, where we have seen unemployment more than double in Thurrock. We do not wish to tolerate any further unemployment, especially when it arises out of an ill-considered scheme of this kind.
Sir Eldon Griffiths: There is nothing to prevent the hon. Lady's port and the dockers from providing a better service. If they provide a better service, surely the container traffic will go there and not to Felixstowe. Is she afraid of competing?
Dr. McDonald: Listening to the hon. Gentleman's contributions to the whole of this debate, I fail to understand why he is involved in a Bill such as this when he knows nothing about the subject. He does not understand what is involved in the number of ports in this country. It is not a question whether I think that Tilbury can compete. I have spent a great deal of time explaining how hard Tilbury is pushing in terms of competition and how it is striving to develop the container facilities that it already has, making sure that the maximum flexibility in working is achieved so that a fast turnround service can be provided.
Mr. Andrew F. Bennett: The hon. Member for Bury St. Edmunds (Sir E. Griffiths) says that ports should be built and should compete with one another. Each extra port that is built will destroy a part of the environment. The worst thing that could happen would be for the Felixstowe project to go ahead and to be unsuccessful. That would result in the natural habitat of the bird life being destroyed, and at the same time no jobs would be created. That would be the worst of all worlds.
Dr. McDonald: I agree with my hon. Friend. I am trying to get across to the hon. Member for Bury St. Edmunds,

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who does not seem to understand these issues, that adding to over-capacity merely transfers jobs from one area to another.
Mr. Roger Stott: The hon. Member for Bury St. Edmunds (Sir E. Griffiths) and I have crossed swords on this issue on a number of occasions. The hon. Gentleman prays in aid of the fact that he was once the Minister with responsibilities for the ports. God help us all if he had those ministerial responsibilities now. My hon. Friend arid the hon. Member for Southampton, Test (Mr. Hill) are saying that there is only so much capacity for our ports to handle. The fundamental issues are where that capacity lies and where strategically the nation wants it to lie. Neither I nor the hon. Member for Test is prepared to accept that the entire movement of shipping and cargo capacity should be channelled through one East Anglian port. That would not be good on national terms. My hon. Friend is saying that present capacity is such that we need a balanced approach in the way in which distribution is arranged between our ports. If we develop Felixstowe, we shall put out Southampton and Tilbury, and that is something that my hon. Friend and I cannot accept.
Dr. McDonald: I thank my hon. Friend for his intervention. We must be thankful that the hon. Member for Bury St. Edmunds is unlikely ever to be responsible again in a ministerial capacity for our ports. At least that will prevent damage being done in that way. If the apparent instructions of the chairman of the Conservative party to Tory agents are to be believed, it seems that a general election can be expected in June 1987. When the election takes place, we shall all welcome my hon. Friend the Member for Wigan (Mr. Stott) as the new Minister with responsibility for our ports. We know that we shall then have a sensible and coherent policy that will take national interests into account, as well as the national development of our ports.
Mr. Hill: I think that the argument is commercial and not political. Over-capacity in any commodity means that those who are trying to buy the commodity—in this instance container cargoes — have a much stronger weapon for pushing the price down and down. My hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) and others are saying that Felixstowe is making a good commercial practice of containerisation. With over-capacity, however, it could find its prices being forced down by Chinese, Taiwanese and Hong Kong shipowners, who have no respect for the national interest and who look for the best possible contract for their container traffic.
Dr. McDonald: The hon. Member for Test has made an extremely interesting intervention. He is looking to the consequences of the extension of container facilities at Felixstowe. If the extension takes place, other ports will be pushed into difficulties, and when that happens it is likely that we shall find ourselves with a white elephant.
As my hon. Friend the Member for Denton and Reddish (Mr. Bennett) has said, we cannot develop and extend port facilities in isolation. Account must be taken of container lorries, which will need suitable roads. If these roads have not been made available before the development and extension of the port, they will have to be constructed. Some of the evidence that was presented to the Committee suggested that communications between Felixstowe and the rest of the country had been vastly
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improved. I have a personal acquaintance with the roads in that area, and I accept that there have been some improvements, but the roads are not really adequate to allow heavy traffic to travel between Felixstowe and the rest of the country.
Apart from the arguments of my hon. Friend the Member for Denton and Reddish about the bird sanctuary, I think that considerable environmental damage will result. It is damage that need not be imposed by the development of Tilbury. A motorway network is already in place and greater use could be made of the river. The river should be used to a far greater extent, because it is a natural motorway throughout London. If we were to develop existing ports where a road network has already been established, and where, as at Tilbury, there is a natural link that could be used to a greater extent so that goods could be transported up and down the river—lorries could be used from the various stages along the river—we would lessen the environmental damage done by the development of ports and remove the possible damage of the development of the container berths at Felixstowe.
Mr. Fatchett: I am interested in the development of the economic argument, especially as it attaches to the national interest. If there is surplus capacity and we add to it, we may well have the impact to which my hon. Friend has referred, which would involve redundancies and port closures. There is another possible impact, or a combination of the two. If marginal costs are spread over a lower level of demand because of the surplus capacity, they could increase. That would make British ports uncompetitive with foreign ports. Therefore, rather than being in the national interest, it may be against the national interest to extend our capacity when there is a surplus in demand. The result would be to make our ports more expensive vis-à-vis our competitors and we would lose jobs in another way, through a combination of possible port closure and redundancies or from a loss of trade with other countries. Would my hon. Friend comment on that possibility?
Dr. McDonald: That is an extremely important point. My hon. Friend said that British ports may become less competitive than continental ports. Hon. Members on both sides of the House are aware of the fact that British ports already find it difficult to compete with continental ports. That is not due to a lack of facilities or because of problems caused by strike action or disagreement about what does or does not constitute dock work. The source of the problem of competing with continental ports arises largely from the fact that continental ports such as Rotterdam or Hamburg are heavily subsidised by local authorities or by central Government. That makes it very difficult for British ports to compete.
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The fact that some ports in Britain have been so successful in ensuring that container and other port traffic comes to British ports, shows the extent to which people are prepared—I mean management and employees—to work together. The danger that arises—
Mr. Speaker: Order. Is the hon. Member for Thurrock (Dr. McDonald) making an intervention?
Dr. McDonald: I am not, Mr. Speaker. I am making my speech.
Mr. Fatchett: On a point of order, Mr. Speaker. The intervention was mine.
Mr. Speaker: I am sorry, I have only just entered the Chamber.
Dr. McDonald: My hon. Friend the Member for Leeds, Central (Mr. Fatchett) gave way to temptation and made a rather long intervention. However, I hope that that will not prevent him from catching your eye later in this debate, Mr. Speaker, because I am sure that he has an important contribution to make.
Mr. Sayeed: Before the hon. Member for Thurrock (Dr. McDonald) leaves her central point about capacity and surplus capacity, does she accept that it is not simply a problem of the amount of capacity but a matter of where that capacity is located? As I represent Bristol, I know what it means to build capacity in the wrong place. One reason why the Committee was in favour of the development was that Felixstowe demonstrated that it was in the right place to take the traffic which was heading for western Europe. Does the hon. Lady accept that the problem is not whether we can use redundant or other capacity in Liverpool, Bristol or other ports which ships do not want to use, but rather that the only alternative to Felixstowe would be Rotterdam, Antwerp or Bremen?
Dr. McDonald: I do not agree with one word of the hon. Gentleman's intervention. I have already said that in the whole of the south-east —I use the term in a broader sense than it is normally used — there are 19 ports. Tilbury docks in my constituency is well placed to deal with traffic from western Europe and elsewhere. The important point is whether the docks are well placed in terms of ease of distribution of goods once they have been unloaded. The important point that I was trying to make is that Tilbury docks is ideally located, with motorway and railway provision in place. Furthermore, the river is under-used and is another means of distributing goods once they have been unloaded.
Mr. Stott: I was interested in the intervention of the hon. Member for Bristol, East (Mr. Sayeed). I am sure that the hon. Gentleman, representing that constituency and the port of Avon, understands that Rotterdam, Antwerp and Bremen are very heavily subsidised by their national Governments. Tilbury, Felixstowe, Harwich, Liverpool and Southampton pay an undue burden of light dues, to which my hon. Friend the Member for Thurrock (Dr. McDonald) has already referred. It is because they have to do that that they are on the margins, and uncompetitive with the rest of Europe. Therefore, the hon. Gentleman's argument about competitiveness should be directed towards the unfair competition of the European ports against our ports. That is the point that my hon. Friend is making.
Mr. Speaker: Before the hon. Lady replies, I remind hon. Members that the debate is about Felixstowe.
Dr. McDonald: Yes, Mr. Speaker. I was referring in particular to the conclusions of the Committee's evidence, where it was claimed that not only Southampton, London and Harwich had no active interest in developing containers, but that the only port that should be developed in that way was Felixstowe, and it was in the national interest so to do. It is that part of the claim in the conclusions of the evidence that is the matter for dispute.
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That is why one has to go into the issues not only of the location of various ports around the country, but why some should be developed better than others.
The hon. Member for Bristol, East (Mr. Sayeed) said in his intervention that location was what mattered for Felixstowe. The point that I have been making is that location, in the sense that he meant it—that is, ease of access for western European traffic — was much too narrowly defined. Location has to take into account ease of distribution. Anyway, location is not the only point at issue in relation to competition with continental ports because there is also the issue of subsidy for continental ports, which is done either on a local authority basis or a central Government basis. Therefore, the hon. Gentleman's argument that because Felixstowe is in a particular geographical spot, it should be developed, is much too narrow a view of what it means to develop a ports policy in the national interest.
Mr. Sayeed: That is not the point that I made.
Dr. McDonald: It is what it sounded like. Either that or the hon. Gentleman simply cannot put his points clearly.
I now wish to turn my attention to the claim that the development of Felixstowe is in the national interest. I should also like to refer to what the Government have said. On page 1 of the Government's report on the Bill, they state:
"The Government's policy towards port developments is that port users are best served by allowing ports to compete with each other on price and quality of service, and that the distribution of traffic and the pattern of future developments should be determined primarily by commercial considerations. It follows that Her Majesty's Government does not consider it appropriate to attempt to lay down a detailed plan or framework for the operation and development of Britain's ports."
That is the Government's attitude towards the Bill. Obviously, no one disagrees with the point that ports should compete with each other on price and quality of service. There is no dispute about that.
However, the paragraph implies that the Government abrogate their responsibility entirely, with no plan and no framework for the operation and development of Britain's ports, as though it should just be left to accidental commercial interests, when the development of a ports policy affects so deeply the nation's economic development.
Mr. Hill: This is where ports policy fails so utterly. About three years ago, there was talk of developing Falmouth into a giant container port. Geographically, it would be excellent—it would make Felixstowe seem a second-class port. Everybody knows that there is another 12 hours steaming to get to Felixstowe, and when international carriers work out their costs, they do so on steaming times. The Falmouth container port fell with a whimper, however. Nobody heard the end of it.
We might be going wrong in that a ports policy might rely on the Government paying for the infrastructure. We must consider what geographical locations will suit the type of trade and client that we hope to attract. If we could develop that into a reasonable formula, we would have no hesitation in saying that Falmouth is unacceptable because of lack of infrastructure and that Felixstowe is unacceptable because it is congested and another 12 hours

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steaming time away. There might be many other reasons why we would say, "Here is a balanced ports policy. We have thought it through and this is the answer."
Dr. McDonald: The hon. Gentleman is absolutely right, but it is not just a matter of picking out the best development from a geographical point of view or on grounds of infrastructure. I have dealt with that in regard to Tilbury. A development must be the best from an economic point of view. Any port serves as a growth point in the economic development of an area. If a port collapses, many port-related activities, which are often extremely indirectly connected, collapse as well. That can lead to the economic collapse of a whole area.
Mr. Stott: You have asked us, Mr. Speaker, to concentrate our interventions on Felixstowe, but I contend that the Bill could not have been debated on the Floor of the House if the previous Secretary of State for Transport had not withdrawn section 9 of the Harbours Act 1964, which included the words "national interest". I am interested to know where the hon. Member for Southampton, Test (Mr. Hill) was when I debated this matter late one night, when we objected to the withdrawal of section 9. Ports could not have been developed without the Secretary of State's permission, but the Secretary of State withdrew section 9 to allow this Bill to proceed.
Dr. McDonald rose—
Mr. Speaker: Order. Before the hon. Lady responds, I must observe that we arc debating consideration of the Bill and we should not go wider than that.
Dr. McDonald: This procedure would not previously have been allowed to extend to Felixstowe, as any dock extension worth more than £3 million had previously to be referred to the Secretary of State. It had then to be considered whether such a large development would be in the national interest. I was about to make that point, but my hon. Friend did it for me.
I object to this procedure being used for such an extremely important development which should be considered only in a national context. It is a very large development. We already have more than adequate container berths throughout Britain. Not all are operating at full capacity, but there are ways in which the Government could ensure that they did. We have already mentioned some of the possibilities in that connection. That should be part of the Government's policy. It is wrong that the development at Felixstowe should take place as a result of a private Bill, when in terms of employment and continued economic growth it will adversely affect the constituencies of many hon. Members on both sides of the House. In many cases, it will prevent economic growth in other areas which hitherto has been sadly lacking and which has cost us dear. It is wrong that a Bill such as this should come before the House in this form. The Government should consider what kind of container development should take place and where.
9.15 pm
Sir Eldon Griffiths: The fact is that a private company wishes to spend its own money on expanding a port, yet it requires the consent of the House of Commons to do so. But the House need only consider whether there are sufficient public objections to prevent that expenditure. It is not for the House to tell people how to spend their
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money—simply to say that they ought not to do it if that is what the national interest requires. The Committee considered that matter very fully.
Dr. McDonald: But plainly the Committee did not reach adequate and acceptable conclusions. The hon. Gentleman said that the Bill was about a private company spending its own money. That is true so far as it goes, but in doing so it damages not only the national interest but employment prospects in other constituencies and other dock areas. The private company will not pick up the bill for that. Public money is inevitably spent as a consequence, and that is the issue about which we are concerned. It does not seem that that matter was properly considered by the Committee.
Infrastructure is not privately provided. That must be provided by the state and by taxpayers' money. I am not saying that in this case the private Bill procedure is illegitimate. I am merely saying that the Government are sidestepping their responsibilities. They ought to be concerned with national ports policy. They should not have made the kind of statement they did in response to this Bill, that the
"Government does not consider it appropriate to attempt to lay down a detailed plan"—
we could perhaps argue about the word "detailed"—
"or framework for the operation and development of Britain's ports".
Personally, I would prefer the word "framework". It is mad for a Government to say that a framework for the development of Britain's ports is not their responsibility—
Mr. Stott: It is absolutely crazy.
Dr. McDonald: No other European Government would take that view.
Mr. Stott: Absolutely correct.
Dr. McDonald: They would take the view that the development of a framework for their ports was a Government responsibility. Indeed, they take it so seriously that they make sure that funds are provided by using more than one method of providing such funds.
Given their response to this Bill, the Government are behaving quite disgracefully. They have refused to face up to the fact that extra container berth capacity will add quite unnecessarily to total container handling capacity in this country. They have given up the sort of responsibility that a Government should have. The Minister looks vaguely puzzled, as though it could not possibly he the Government's responsibility to concern themselves with a framework for the development of ports. All I can say is, thank goodness he will not be doing the job for much longer.
The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): It may be helpful if I intervene briefly and restate the Government's position, which is that we are neutral about the Bill. The Government came under some attack from the hon. Members for Thurrock (Dr. McDonald) and for Wigan (Mr. Stott), who aided and abetted the hon. Lady from a sedentary position. She did not need much aiding and abetting, but he supported her nevertheless. As my hon. Friend the Minister of State, Department of Transport said in a speech on 13 May, the Government have a ports policy. It is different from that of the Labour party, but that does not mean that it is not a policy.
Dr. McDonald: It is not a policy.
Mr. Spicer: As the hon. Lady conceded—
Dr. McDonald: It is not a policy.
Mr. Spicer: The hon. Lady is now saying that it is a policy, so at least she agrees on that, although it is a policy with which she disagrees. I thought that part of the thrust of her argument was that there was no policy. Our policy is to allow ports to compete freely for traffic at a price and to provide what services they can.
The hon. Member for Leeds, Central (Mr. Fatchett) suggested that capacity was some finite concept which, through the grand design of some Labour planning authority, would be parcelled around the country, presumably with various criteria attached to it. I think that the hon. Lady accepted that when she allowed his intervention, but that is not how we see the matter. We do not see capacity as a finite concept. We believe that by competition and making our ports more efficient than ports abroad we can attract more business and so extend capacity.
The Government are neutral on this Bill, as they are on nearly all private Bills, but we shall not accept from the Opposition that we have no policy towards ports. Our policy on this matter, as on others, is infinitely preferable and more beneficial to the country than anything which the Opposition can offer.
Mr. Stott: What is the Government's policy?
Mr. Spicer: The Government's policy is to provide the context in which ports can flourish.
Mr. Stott: That is meaningless.
Mr. Spicer: It certainly is not meaningless.[Interruption.] I shall come to my hon. Friend the Member for Southampton, Test (Mr. Hill).
As is normal practice with private Bills, the Government take a neutral position on this Bill. Arguments for and against the Bill have been deployed and, as is customary, we argued in favour of the Bill being considered in Committee. The position now is that the merits of the Bill have been thoroughly examined by the Committee where witnesses were heard and questioned, in some cases at great length.
The hon. Member for Ipswich (Mr. Weetch) was sufficiently generous to congratulate my hon. Friend the Member for Bristol, East (Mr. Sayeed) — and I think that his generosity also extended to my hon. Friend the Member for Crosby (Mr. Thornton)—on his diligence. I must quickly put it on record, as he did, that he did not agree with my hon. Friends' conclusions. He said that they had been diligent. Indeed, they have broken some sort of record because they had 23 sittings in which to assess the evidence.
The Committee examined not only the detail but the evidence on which the basic clash of interests could be judged. As has been stated, the interests were those of the industrial use of the site and its scientific importance as a conservation area. The Committee has recommended the passage of the Bill with various important amendments and safeguards. The House is not very likely to get a clearer judgment on this admittedly difficult clash of interests. The Government accept that that is the difficulty.
As the Committee has taken this view, and as the procedures for dealing with private Bills are there, the
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Government must recommend to the House that the Bill be allowed to proceed. On that basis, I make such a recommendation.
Mr. Hill: Before my hon. Friend sits down, will he clear up a point? He said clearly that the Government —rightly so—were prepared to see commercial interplay between ports so that the survival of the fittest and most efficient would be the aim of a ports policy. In other words, he is saying that we in Southampton would have to compete with Felixstowe as a commercial entity, and we are prepared to do that.
I know that the Government are a little worried that the Jones-Aldington agreement, which was made some years ago but has never been reviewed, puts an unfair financial bias on the port of Southampton. If my hon. Friend is clear, as I am sure that he is, that future Government policy will mean that the National Dock Labour Board, or the national docks programme will be resolved by Parliament at some later date, I can find no opposition to his argument. However, at the moment, we are commercially disadvantaged simply because we have a private company, privatised by the Government —Associated British Ports—which still has the hangover of the Jones-Aldington agreement, which has meant that there is a financial bias. If my hon. Friend will give me the understanding that at some future date, perhaps many years hence, this anomaly will be resolved, I can agree with him.
Mr. Speaker: Order. This debate is about Felixstowe rather than Southampton.
Dr. David Clark: We oppose the Bill. I am sorry that the Minister felt it appropriate to support further consideration. When it was proposed, the hon. Member for Bury St. Edmunds (Sir E. Griffiths), with whom I have engaged in many debates over the years, made one of his weakest points. He made a rather strange speech, which was an odd way to advocate to the House the Bill that he was offering on behalf of the promoters.
To make the allegation that we were opposing the Bill simply because we were in the pay of the London dockers was most disingenuous, and most unworthy because that is not his normal way of approaching debates. However, when I heard the weakness of his case, I realised why he had to make personal attacks on my hon. Friend the Member for Ipswich (Mr. Weetch), who has strongly argued the case against the Bills with great skill and determination.
I want to deal mostly with the enviromental objections to the Bill. The case is not as it was presented to the House by the hon. Member for Bury St. Edmunds. First, I must add my voice to those of hon. Members on both sides of the House who have tried to set the case for the expansion of Felixstowe in the general context of our ports policy. No mention has been made of it, but at least in passing I must mention that in the north-east of England there are ports that would have liked to receive adequate consideration. However, the Committee did not, we feel, consider their case adequately.
9.30 pm
When the Committee looked into the matter it forgot Britain's defence strategy. It is widely acknowledged that this country's defence capability involves, as part of its commitment to NATO, the defence of the Greenland gap

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and the reinforcement of Norway. That can be achieved only if there are viable ports along the east coast of England, not only in the south-east. That argument also militates against the Bill.
The twin arguments against the Bill relate to the environment. Although this issue has been debated in the past, the Opposition believe that there is new evidence and information that ought to be considered and that the information is of such a character that the Bill ought not to be allowed to proceed.
The area that is the subject of the Bill is a key part of the River Orwell site of special scientific interest. It has been notified under and is subject to the safeguards in section 28 of a very inadequate Act. Nevertheless, it is the best that we have. I refer to the Wildlife and Countryside Act 1981. In the early 1970s the hon. Member for Bury St. Edmunds had a good record on the environment. He is familiar with countryside and environmental legislation. Hence, I was surprised by his disregard of the environmental arguments against the Bill.
Apart from our national obligations, since the time when the hon. Member for Bury St. Edmunds was a Minister in the Department of the Environment a further international dimension has been added, mainly in the form of the European Commission directive relating to the conservation of wild birds. There is abundant evidence of the national and international standing of the area that we are discussing in terms of its bird population. It is a very special area, and its designation as an area requiring special protection above its SSI status was made under the EEC directive relating to birds. This was noted by the Committee and verified by it. This piece of land is designated as an extra-special area. The Government's adviser, the Nature Conservancy Council, recognises its status and has proposed officially to the Minister that it should be listed. The former Secretary of State for the Environment noted this status in Hansard on 18 July 1985.
All this information was available to the Committee, but there is scant evidence that its members took full account of the international gravity of the area's status and of the nature conservation issues when they weighed in the balance the national need and the local need for deep-sea containers. I make that point with force because there are dangers in the private legislation procedure. I refer the House to the minutes of evidence of 22 January 1986. Mr. G. J. Parker was cross-examined on behalf of the promoters of the Bill by Mr. K. Standring, representing the Royal Society for the Protection of Birds. Mr. Standring asked:
"I have only one final question to ask you. You may not be able to reply to this, and please say so if it is outside your competence. Could I ask: If you gain the powers sought under this Bill, would you expect your new Act of Parliament to over-ride the provisions of the Wildlife and Countryside Act as regards that part of the Bill site which is a site of special scientific interest?"
Mr. Parker answered:
"Much as I hate doing so, I have to say that it is outside my field of competence, and I do not know the Act."
Mr. Ryan, counsel for the promoters, intervened helpfully and said:
"I suspect that that is within the field of competence of lawyers, and I am advised that the answer is 'yes'."
This private Bill has been through special procedures, and tonight the promoters want us to give it further consideration. They acknowledge that it will override a national Act which also has international connotations. The result can only be a serious risk that this Government
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and Parliament will yet again have action taken against them by the European Commission. The Bill needs further consideration and serious amendment before it can be taken any further.
The hon. Member for Bury St. Edmunds made great play of the fact that there had been no environmental opposition. But the Government's advisers, the Nature Conservancy Council, discussed all the implications and the fact that the estuary would lose its international importance for wildlife, and in particular for grey and ringed plover and turnstone and said that, having received the Committee's report in March, it had
"advised the Department of the Environment that there are no sites on the Orwell estuary with features comparable to those at Fagbury Flats and that the passage of this Bill would prejudice Britain's international obligations towards nature conservation."
Thus there are serious environmental arguments against the Bill, which have been propounded by no less an authority than the Government's own Nature Conservancy Council.
Sir Eldon Griffiths: The hon. Gentleman has put the matter with great seriousness and clarity. However, in all these matters, a difficult and sensitive balance must be struck. Nearly all economic development has an environmental impact, and the House must balance the advantages and disadvantages. The crucial point is that none of the environmental bodies is any longer petitioning against the Bill. That is not to say that they approve it in full, but they accept that the balance of advantage does not lie in opposing it. Although there is some environmental loss, there is also much gain in the new arrangements that have been agreed between the promoters and the petitioners.
Dr. Clark: The hon. Gentleman has made a serious point. As we both know, one of the major problems for environmentalists is the potential conflict between economic growth and conservation. Every case must be considered on its merits, but I pray in aid the arguments deployed so well by my hon. Friends the Members for Ipswich and for Thurrock (Dr. McDonald). They argued that there is no national interest. Indeed, the hon. Member for Southampton, Test (Mr. Hill) argued that too. We are trying to balance two conflicting interests: environmental features that are nationally and internationally recognised, and local private commercial interests. In that situation, the balance clearly comes down on our national and international obligations.
I know that in defence the hon. Gentleman will say that all that is taken into account and that it is recognised that there must be some environmental improvement. As the hon. Gentleman has already said, and as the Bill's promoters tell us, no fewer than 500,000 trees will be planted, which would ultimately create approximately 85 acres of additional woodland. But that in itself destroys the raison d'etre of the creation of a site of special scientific interest.
The area has not been created as a special area because there are trees. If one wanted to do that, one would do it in Thetford forest or Kielder forest. It has been designated as a special site because of the mudflats and the estuaries; because of the particular landscape which is attractive and important to the ecological balance of the birds. No matter how many trees, they do not help the issue. Indeed, by planting the trees the situation may be worsened.

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The Bill is ill conceived. It should not proceed this evening because there are far too many damaging environmental factors which have not properly been taken into consideration.
Sir Julian Ridsdale: I wish to support my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) in his hard work in promoting the Bill. Unfortunately, I have not heard all the debate because I was unable to be here at the beginning, but from some of the interventions that I have heard hon. Members seem to have been pleading for their own port for some reason or other. The Government are right to say that commercial interests should be the paramount consideration in the location of a port.
I remember sitting on the Committee which considered the legislation to nationalise the ports in 1969. I am glad that we stopped it. But then again, the Labour party's policy led to the National Ports Council and the kind of policies that it is advocating and to which I have listened today and, indeed, when we discussed the Harwich and Parkeston Quay Bill which I introduced.
Mr. Stott: The Opposition did not oppose that.
Sir Julian Ridsdale: I am grateful for the support that I received, but my point here is that it is right that this Bill should go forward. I pressed for the Harwich Parkeston Quay Bill because I believe in competition and I am willing to have competition across the estuary from Felixstowe because we can compete commercially with that.
The National Ports Council led to wrong investment in the wrong parts of the country. As my hon. Friend the Member for Bristol, East (Mr. Sayeed) rightly said, it was in the wrong location. The majority of our trade today is being done with the continent, including Germany, and the attraction is to trade through Tilbury— I welcome the fact — and through London, Harwich and Felixstowe, the east coast ports rather than those of the north-west and the west. That is why I find it logical to support the Bill.
I heard the hon. Member for South Shields (Dr. Clark) talk about NATO policy, but it was a weak point because Harwich and Felixstowe could easily reinforce Norway; our lines go to Esbjerg, Oslo and Bremerhaven.
We are to have a Channel tunnel, but our natural trade routes are to Germany, Holland and Belgium. There is a user commitment to deep-sea container ports and it is right that the House should support the Felixstowe development. I do not agree with my hon. Friend the Member for Southampton, Test (Mr. Hill), because his views are against the commercial policy that is right for this country.
The natural flow of container traffic, which has been going to Rotterdam, Bremerhaven and Bremen, is through Felixstowe and Harwich. If we do not get that trade, we shall have only the short-distance traffic and will lose foreign exchange. That is why I have no hesitation in supporting my hon. Friend the Member for Bury St. Edmunds.
9.45 pm
Mr. Fatchett: I hope that the hon. Member for Harwich (Sir J. Ridsdale) will not mind if I do not take up his arguments.
I served on the Committee on the Bill, though not through the whole process, and I did not take part in the
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final decision. I put on record my appreciation of the work done by the hon. Members for Bristol, East (Mr. Sayeed) and for Crosby (Mr. Thornton). That work has been noted and has created the context for our debate.
Some of us disagree fundamentally with some of the Committee's conclusions, but we do not question the integrity of the hon. Members who reach those conclusions. Our debate shows differences between us on interpretation and matters of policy, but there are no doubts about the integrity of those who served on the Committee. It is important that that fact should be borne in mind as we consider the Bill.
Mr. Sayeed: I am grateful to the hon. Gentleman for his remarks.
Mr. Fatchett: I shall not develop the mutual admiration society further or it will become dangerous.
The private Bill procedure is relevant to whether there should be an expansion at Felixstowe. Two crucial issues have arisen in the debate. The first is whether it is in the national interest to have this development at Felixstowe and the second is the environmental considerations involved.
The Secretaries of State for the Environment and for " Transport presented a report on the Bill in our 1984–85 Session. Paragraph 2, dealing with the economic issues, states:
"It follows that Her Majesty's Government does not consider it appropriate to attempt to lay down a detailed plan or framework for the operation and development of British ports."
We can draw a number of conclusions from that paragraph. Most Opposition Members fundamentally disagree with that view. We do not believe in a laissez-faire approach to the development or otherwise of British ports.
However, it follows that it is not inconsistent or illogical for the Government to say that the private Bill procedure is appropriate for the Felixstowe development. They can argue that the private Bill procedure is appropriate for all ports that may want to expand, because the Government have no view on whether expansion is a good or a bad thing. The Government have no policy and no view. They are empty-minded about our ports industry.
It is appropriate to argue that the economic interest can be dealt with in a private Bill, but I am not convinced that the environmental issue can be dealt with in the same way. In an annex to the report from which I have already quoted reference is made to the Secretary of State's response to the Countryside Commission's report of 1980. The report states:
"The Government agree with the Commission's view that in general it would be inconsistent with the aims of designation to permit the siting of major industrial and commercial development in AONBs. Only proven national interest and lack of alternative sites can justify any exception … Each case must be determined on its merits. That is a fundamental rule of our planning system."
I emphasise the words "of our planning system."
In this case the private Bill procedure did not allow the opportunities for full democratic participation and involvement that the planning system would have allowed. The private Bill procedure creates a set of difficulties and constraints for those who object. Those constraints are expensive and require detailed knowledge of the House and its procedures, and of procedures connected with private Bills. A planning inquiry does not work in the same way. Those who object to a decision would, under the

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planning procedure, have had the opportunity to make their case and to object. If they had had that opportunity in this case they would have felt more at ease with the Secretary of State's decision.
I do not say that objectors would have agreed with the decision because any Secretary of State must take decisions which will offend some people. However, the planning procedures are well known, well tried and well trusted. Over the years people have developed confidence in those procedures. I think that those procedures should have applied in this case. I feel strongly that the private Bill procedure used by Felixstowe is not the most appropriate.
The strongest criticism that can be made of the Felixstowe Dock and Railway Company is that it abused the private Bill procedure to bypass normal planning procedures. That is a strong criticism. The company did not meet that criticism in Committee or in public discussions.
I can see the justification for the private Bill procedure on the economic front, but environmentally there is no justification for it. The planning procedure should have been used, the Secretary of State should have had a role and the fullest democratic participation should have been allowed.
The economic arguments have dominated the debate. The company has argued that to gain approval for the development it needed to show proven national interest in the development. I contend that that case has not been made out, either in Committee or in tonight's debate.
There was a substantial feeling in Committee that the company defined the national interest as the interest of the company. If the company makes additional profits that might not be in the national interest. The definition of national interest is one about which we can have a great deal of argument. There is no evidence whatsoever to make a simple corresponding link between the interest of the Felixstowe Dock and Railway Company and the national interest.
I was disappointed on many occasions in Committee when I felt that the company had the opportunity to broaden its argument and lift the horizons of the debate but failed to do so and went for an easy option saying that what was good for Felixstowe was good for this country. Surely, that cannot be the case.
I shall now look at another aspect of the economic argument. If this country were short of port capacity there could be no argument that we would need a development such as Felixstowe. Whether that development would take place at Felixstowe or some other port is another question but, if we were short of capacity, the argument for development would be very strong. However, the Government's document prepared for the Bill contains no suggestion that we are short of capacity. Paragraph 5 says:
"It is often stated that there is already excess capacity in British ports and that the creation of further capacity will be wasteful."
If that is so, where is the overriding national interest for the development of Felixstowe? My hon. Friend the Member for Thurrock (Dr. McDonald) developed this argument at great length, in great detail and with great cogency. I put one notion to my hon. Friend which I think is important and we should bear in mind. If we have surplus capacity, the tonnage costs will increase simply as a result of that. We shall not be efficient. We shall not be using our capacity to the optimum level. Therefore, almost inevitably, if we add to the capacity we shall increase our
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marginal costs and have to take one, two or a combination of decisions. Our ports will close down and we shall have redundancies in, for example, Southampton, Liverpool or London.
Mr. Stott: It will also cost money.
Mr. Fatchett: Indeed, it will cost money in terms of a definition of the national interest because public money will be involved. The Government say that they have no interest in port capacity or port development. How sensible it was to hear the hon. Member for Southampton, Test (Mr. Hill) point out that infrastructure costs fall on the public Exchequer and the public purse. The Government cannot divorce themselves from potential infrastructure costs and therefore, by definition, must have some interest in those costs.
I shall further develop the point about marginal costs. It seems to me that by extending our capacity we could render ourselves less competitive than our European rivals. In those circumstances we could be responsible for reducing this country's ability to compete and reducing the number of jobs that will be available in British ports. Those who have tried to make the economic case in terms of the national interest have failed to do so on a number of occasions this evening. In terms of the overriding national interest the evidence is very strong indeed.
I shall now comment on what has happened in the port industry over recent years. That will show the weakness of the economic argument.
Sir Eldon Griffiths rose in his place, and claimed to move, That the Question be now put.
Question put, That the Question be now put:—
The House divided:Ayes 140, Noes 38.

Division No. 254]

[10 pm

AYES

Ancram, Michael

Ground, Patrick

Atkins, Robert (South Ribble)

Hamilton, Hon A. (Epsom)

Baker, Nicholas (Dorset N)

Hanley, Jeremy

Batiste, Spencer

Haselhurst, Alan

Beith, A. J.

Hawkins, Sir Paul (N'folk SW)

Best, Keith

Hayes, J.

Boscawen, Hon Robert

Hind, Kenneth

Bottomley, Peter

Hirst, Michael

Braine, Rt Hon Sir Bernard

Holt, Richard

Bright, Graham

Howard, Michael

Brown, M. (Brigg amp; Cl'thpes)

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

Buck, Sir Antony

Howarth, Gerald (Cannock)

Chapman, Sydney

Howells, Geraint

Clark, Sir W. (Croydon S)

Hunt, David (Wirral W)

Coombs, Simon

Jessel, Toby

Cope, John

Jones, Gwilym (Cardiff N)

Corrie, John

Jones, Robert (Herts W)

Currie, Mrs Edwina

Key, Robert

Dorrell, Stephen

Kirkwood, Archy

Douglas-Hamilton, Lord J.

Knight, Dame Jill (Edgbaston)

Durant, Tony

Latham, Michael

Fenner, Mrs Peggy

Leigh, Edward (Gainsbor'gh)

Fletcher, Alexander

Lennox-Boyd, Hon Mark

Fookes, Miss Janet

Lester, Jim

Forsyth, Michael (Stirling)

Lloyd, Peter (Fareham)

Forth, Eric

Lord, Michael

Fox, Sir Marcus

McCurley, Mrs Anna

Fraser, Peter (Angus East)

MacGregor, Rt Hon John

Freeman, Roger

MacKay, John (Argyll amp; Bute)

Gale, Roger

Maclean, David John

Garel-Jones, Tristan

McLoughlin, Patrick

Goodhart, Sir Philip

McNair-Wilson, M. (N'bury)

Gow, Ian

McQuarrie, Albert

Gower, Sir Raymond

Major, John

Greenway, Harry

Malins, Humfrey

Gregory, Conal

Malone, Gerald

Griffiths, Peter (Portsm'th N)

Marland, Paul

769

Mather, Carol

Sims, Roger

Maude, Hon Francis

Skeet, Sir Trevor

Maxwell-Hyslop, Robin

Smith, Sir Dudley (Warwick)

Mayhew, Sir Patrick

Speed, Keith

Merchant, Piers

Spencer, Derek

Meyer, Sir Anthony

Spicer, Jim (Dorset W)

Mitchell, David (Hants NW)

Spicer, Michael (S Worcs)

Monro, Sir Hector

Stanbrook, Ivor

Morris, M (N'hampton S)

Stern, Michael

Moynihan, Hon C

Stewart, Allan (Eastwood)

Neubert, Michael

Stewart, Andrew (Sherwood)

Nicholls, Patrick

Terlezki, Stefan

Normanton, Tom

Thompson, Donald (Calder V)

Norris, Steven

Thompson, Patrick (N'ich N)

Osborn, Sir John

Thornton, Malcolm

Page, Sir John (Harrow W)

Thurnham, Peter

Page, Richard (Herts SW)

Vaughan, Sir Gerard

Percival, Rt Hon Sir Ian

Viggers, Peter

Pollock, Alexander

Wakeham, Rt Hon John

Portillo, Michael

Walker, Bill (T'side N)

Powell, William (Corby)

Wallace, James

Powley, John

Waller, Gary

Proctor, K Harvey

Watson, John

Rathbone, Tim

Wells, Bowen (Hertford)

Rhodes James, Robert

Whitfield, John

Rhys Williams, Sir Brandon

Wiggin, Jerry

Rifkind, Rt Hon Malcolm

Wilkinson, John

Rossi, Sir Hugh

Winterton, Mrs Ann

Rowe, Andrew

Winterton, Nicholas

Sackville, Hon Thomas

Wolfson, Mark

Sainsbury, Hon Timothy

Wood, Timothy

Sayeed, Jonathan

Shepherd, Colin (Hereford)

Tellers for the Ayes

Shersby, Michael

Sir Eldon Griffiths and

Shields, Mrs Elizabeth

Sir Julian Ridsdale

NOES

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

McDonald, Dr Oonagh

Bermingham, Gerald

McKay, Allen (Pemstone)

Callaghan, Jim (Heyw'd & M)

McWilham, John

Campbell-Savours, Dale

Mason, Rt Hon Roy

Chope, Christopher

Maxton, John

Clark, Dr David (S Shields)

Pike, Peter

Cocks, Rt Hon M (Bristol S)

Powell, Raymond (Ogmore)

Cox, Thomas (Tooting)

Prescott, John

Dalyell, Tam

Raynsford, Nick

Dewar, Donald

Robertson, George

Eastham, Ken

Sheerman, Barry

Fatchett, Derek

Short, Ms Clare (Ladywood)

Forrester, John

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

Foster, Derek

Stott, Roger

Godman, Dr Norman

Thompson, J (Wansbeck)

Hill, James

Torney, Tom

Hogg, N (C'nauld & Kilsyth)

Wareing, Robert

Home Robertson, John

Jones, Barry (Alyn & Deeside)

Tellers for the Noes

Kennedy, Charles

Mr Ken Weetch and

Lamond, James

Mrs Ann Clywd.

Question accordingly agreed to.
Question put, That the bill be bow considered:
The House divided: Ayes 132, Noes 38.

Division No. 255]

[10.12 pm

AYES

Ancram, Michael

Cope, John

Atkins, Robert (South Ribble)

Corrie, John

Baker, Nicholas (Dorset N)

Currie, Mrs Edwina

Beith, A. J.

Dorrell, Stephen

Best, Keith

Douglas-Hamilton, Lord J.

Boscawen, Hon Robert

Durant, Tony

Bottomley, Peter

Fairbairn, Nicholas

Braine, Rt Hon Sir Bernard

Fenner, Mrs Peggy

Bright, Graham

Fletcher, Alexander

Brown, M. (Brigg & Cl'thpes)

Fookes, Miss Janet

Buck, Sir Antony

Forsyth, Michael (Stirling)

Chapman, Sydney

Forth, Eric

Clark, Sir W. (Croydon S)

Fox, Sir Marcus

Coombs, Simon

Fraser, Peter (Angus East)

770

Freeman, Roger

Moynihan, Hon C.

Gale, Roger

Neubert, Michael

Galley, Roy

Normanton, Tom

Garel-Jones, Tristan

Norris, Steven

Gow, Ian

Osborn, Sir John

Gower, Sir Raymond

Page, Sir John (Harrow W)

Greenway, Harry

Page, Richard (Herts SW)

Gregory, Conal

Percival, Rt Hon Sir Ian

Griffiths, Peter (Portsm'th N)

Pollock, Alexander

Ground, Patrick

Portillo, Michael

Hamilton, Hon A. (Epsom)

Powley, John

Hanley, Jeremy

Proctor, K. Harvey

Haselhurst, Alan

Rathbone, Tim

Hawkins, Sir Paul (N'folk SW)

Rhodes James, Robert

Hayes, J.

Rifkind, Rt Hon Malcolm

Hayward, Robert

Rowe, Andrew

Hirst, Michael

Sackville, Hon Thomas

Holt, Richard

Sayeed, Jonathan

Howard, Michael

Shepherd, Colin (Hereford)

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

Shersby, Michael

Howarth, Gerald (Cannock)

Shields, Mrs Elizabeth

Howells, Geraint

Sims, Roger

Hunt, David (Wirral W)

Skeet, Sir Trevor

Jessel, Toby

Smith, Sir Dudley (Warwick)

Jones, Gwilym (Cardiff N)

Speed, Keith

Jones, Robert (Herts W)

Spencer, Derek

Kennedy, Charles

Spicer, Jim (Dorset W)

Key, Robert

Spicer, Michael (S Worcs)

Kirkwood, Archy

Stanbrook, Ivor

Knight, Dame Jill (Edgbaston)

Stern, Michael

Latham, Michael

Stewart, Allan (Eastwood)

Leigh, Edward (Gainsbor'gh)

Stewart, Andrew (Sherwood)

Lennox-Boyd, Hon Mark

Terlezki, Stefan

Lester, Jim

Thompson, Donald (Calder V

Lloyd, Peter (Fareham)

Thompson, Patrick (N'ich N)

McCurley, Mrs Anna

Thornton, Malcolm

MacGregor, Rt Hon John

Thurnham, Peter

MacKay, John (Argyll & Bute)

Viggers, Peter

Maclean, David John

Wakeham, Rt Hon John

McLoughlin, Patrick

Walker, Bill (T'side N)

McNair-Wilson, M. (N'bury)

Wallace, James

McQuarrie, Albert

Waller, Gary

Major, John

Wells, Bowen (Hertford)

Malone, Gerald

Whitfield, John

Marland, Paul

Wiggin, Jerry

Mather, Carol

Wilkinson, John

Maude, Hon Francis

Winterton, Mrs Ann

Maxwell-Hyslop, Robin

Winterton, Nicholas

Mayhew, Sir Patrick

Wolfson, Mark

Merchant, Piers

Wood, Timothy

Meyer, Sir Anthony

Mitchell, David (Hants NW)

Tellers for the Ayes:

Monro, Sir Hector

Sir Eldon Griffiths and

Morris, M. (N'hampton S)

Sir Julian Ridsdale.

NOES

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

Lamond, James

Bermingham, Gerald

McDonald, Dr Oonagh

Buchan, Norman

McKay, Allen (Penistone)

Callaghan, Jim (Heyw'd & M)

McWilliam, John

Campbell-Savours, Dale

Mason, Rt Hon Roy

Chope, Christopher

Maxton, John

Clark, Dr David (S Shields)

Pike, Peter

Cocks, Rt Hon M. (Bristol S)

Powell, Raymond (Ogmore)

Cox, Thomas (Tooting)

Prescott, John

Dalyell, Tam

Raynsford, Nick

Dewar, Donald

Robertson, George

Eastham, Ken

Short, Ms Clare (Ladywood)

Fatchett, Derek

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

Forrester, John

Stott, Roger

Foster, Derek

Thompson, J. (Wansbeck)

Godman, Dr Norman

Torney, Tom

Hill, James

Wareing, Robert

Hogg, N. (C'nauld & Kilsyth)

Home Robertson, John

Tellers for the Noes:

Hoyle, Douglas

Mr. Ken Weetch and

Jones, Barry (Alyn & Deeside)

Mrs. Ann Clwyd.

Question accordingly agreed to.
It being after Ten o'clock, further consideration of the Bill stood adjourned.
To be further considered tomorrow at Seven o'clock.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Legal Aid (Scotland) Bill To be further [Lords]may be proceeded with, though opposed, until any hour.—[Mr. Malone.]

Orders of the Day
  Legal Aid (Scotland) Bill [Lords]
  As amended (in the Standing Committee), considered.
  Legal Aid (Scotland) Bill [Lords]
    Clause 3

      DUTIES OF THE BOARD
      10.20 pm
      Mr. James Wallace: I beg to move amendment No. 1, on page 3, line 14, after `functions', insert under section 1(2)(b) of this Act'.
      Mr. Speaker: With this it will be convenient to take Government amendment No. 2.
      Mr. Wallace: Clause 3(4) was well discussed in Committee. That discussion revolved around two questions — did the clause as it stood mean anything, and, if so, did it have a sinister meaning? Those of us who fear that it may have sinister possibilities were frightened that because of the way in which it was drafted it could give the Secretary of State for Scotland virtual carte blanche when telling the board what to do. That was a particular fear, having regard to the debate about the board's composition and its being a creature of the Secretary of State in terms of appointments. The Bill also gives wide powers to the Secretary of State to remove people from the board.
      There was a fear that in the guidance given to the board by the Secretary of State under this subsection, it could affect a certain class of applications and in some way be restrictive of the board's ability to grant legal aid.
      During the debate in Committee, the Minister sought to reassure us that this subsection had no insidious purpose, and said that it was designed purely to give the Secretary of State the power to issue guidance on the way in which the board conducted the administration of its affairs. Hence my amendment. The House will note that the general functions of the board are set out in clause 1(2), which are:

      "(a) of securing that legal aid and advice and assistance are available in accordance with this Act; and

      (b) of administering the Fund."

      Taking the Minister at his word, the purpose of the guidance in terms of the subsection is purely administrative. The purpose of my amendment is to restrict that guidance to the functions of the board which fall under clause 1 2)(b), namely that of administration. It does that simply, and excludes any possibility that the guidance could be used by the Secretary of State to interfere with the granting of legal aid in particular cases.
      The amendment in the name of the Secretary of State probably achieves the same result, and I concede that, but my first question — whether it means anything — still stands. It is said to be the issuing of guidance to which the board shall have regard, but in Committee the Minister was anxious to stress that this was in no way a directive from the Secretary of State. The word "regard" means that the board is in no way obliged to follow that which emanates from the Secretary of State. I wonder whether
      774
      the clause is necessary. Surely the Secretary of State does not need statutory power to send messages to the board. As I said in Committee, it is unlikely that at a board meeting a member would move that the board passed over a letter from the Secretary of State and ignore what he has to say. Obviously, the board, by its nature, must have regard to what the Secretary of State says to it.
      The question whether this provision is necessary remains. The political reality is that it must stand. The Government have made a concession and that is welcome. I would, perhaps, suggest that my amendment is neater, but I would not go to the stake about it.
      The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): As the hon. Member for Orkney and Shetland (Mr. Wallace) said, we debated this matter in Committee at some length. Amendment No. 2 in the name of my right hon. and learned Friend the Secretary of State fulfils the undertaking that I gave in Committee to reconsider the wording of the guidance power in subsection 3(4) in order to make it even clearer that while the Secretary of State can give guidance to the board on administrative and financial matters, he cannot give guidance affecting the manner in which the board deals with applications. The new subsection (4A) does two things. First, it says in terms that any guidance given by the Secretary of State cannot affect the consideration or disposal of applications in general, as well as individual applications for legal aid or advice and assistance. Secondly, it says that guidance cannot affect consideration or disposal of supplementary or incidental applications to the board. This would prevent the Secretary of State giving guidance on such matters as the circumstances in which the board should agree to the employment of counsel.
      I gave careful consideration to the possibility of amending clause 3(4) to restrict the guidance power to matters covered by clause 1(2)(b), as suggested by amendment No. 1. However, clause 1(2)(b) refers in general terms to the function "of administering the Fund". This could be interpreted widely or narrowly, and if it was interpreted widely, could be taken to include many of the matters which hon. Gentlemen are anxious to exclude. Equally, there would be aspects of the function under clause 1(2)(a), of securing that legal aid is available, in relation to which guidance would be perfectly appropriate and unobjectionable. I think, for example, of guidance as to the manner in which the board publicised the legal aid arrangements and as to the situation of its offices. Both these would be functions under 1(2)(a) rather than 1(2)(b).
      Therefore, I prefer the rather more precise provisions in new subsection (4A), and I, therefore, commend amendment No. 2 rather than amendnent No. 1 to the House.
      10.30 pm
      Mr. Donald Dewar: I am never clear about the rules on declarations of interest, but perhaps I should say that I am a partner in a Glasgow solicitors firm and a member of the Law Society of Scotland. That may be thought to give me a certain point of view on the proceedings before the House. I regret, as I am sure many hon. Members do, that we are starting an interesting, significant debate at 10.30 pm. Protests were made about that earlier, but, unfortunately, in vain. It means that we shall debate for some time at a rather

      775
      uncivilised hour of the day, and I regret that. I promise that I have no intention of making up for my absence from the Committee by reliving all the arguments in the amendments. Although I shall not artificially prolong our proceedings, I am sure many hon. Members will support me when I say that we shall not artificially curtail the debate. I hope that there will still be an opportunity for getting further concessions, or, at least, further assurances, from the Minister.
      The point was well made by the hon. Member for Orkney and Shetland (Mr. Wallace) that some of us do not like clause 3. The Law Society made it clear that the Government's amendment
      "goes some way towards a response to the criticisms in respect of the clause."
      That disguises the fact that the Law Society and others have doubts about whether we need such a form of words in the Bill. I cannot help quoting the somewhat magisterial advice of the Law Society. It said:
      "The Board is required to have 'regard' to 'guidance'. 'Guidance' is very different from 'direction', and 'regard' is very different from 'accept'. The Law Society cannot therefore comprehend the significance of this clause. The purpose is shrouded in mystery."
      I have a pleasant picture of the Law Society as a corporate body failing to comprehend, but that is for another time and place.
      It is clear that the Minister's amendment is meant to be helpful, and while he does not solve the problems, conscious of the fact that the more important debates will come later on the agenda, I am prepared to accept his good intentions. Some of us were worried that there would be a possibility of directions being given, not about individual applications, but about classes of applications. The original and generally held fear was that there might have been a general sign from the Government that individuals who were single and living at home with his parents and charged, for example, with a breach of the peace, should be charged for legal aid. That was perhaps an extreme of the argument and we were anxious to see it ruled out. I accept that the amendment goes a long way towards doing that, making it clear that even a generic instruction pertaining to who is eligible for legal aid, or the criteria on which it should be granted, will not be part of the guidance that will be offered by the Secretary of State under this clause.
      Mr. Nicholas Fairbairn: Will the hon. Gentleman accept that the mere fact that the Government have given in to our anxieties is a sign that they were justified, and the fact that one has to say in a statute that one will not be doing anything naughty shows that there are powers to do things naughty?
      Mr. Dewar: I did not want to rub the Minister's nose in it, so perhaps that comes best from a Conservative Member. I am grateful to the hon. and learned Gentleman for his help.
      To some extent, the fears have been allayed. I gather that largely this will be advice about administration, accountancy and related matters, and I can see the Minister helpfully nodding. On that basis, and in the hope that he will continue to nod on more substantial matters later. I welcome the Government's amendment.
      I was interested in the dialogue between the hon. Member for Orkney and Shetland, who saw his efforts, as "neat", and the Minister, who saw his efforts, somewhat
      776
      ambitiously, as "precise". I do not want to adjudicate, because I know where the big battalions lie. I shall be happy to accept the Minister's advice and his amendment.
      Amendment negatived.
      Amendment made: No 2, in page 3, line 15, leave out from 'State' to the end of line 17 and insert—
      '(4A) Guidance under subsection (4) above shall not relate to the consideration or disposal (whether in general or in respect of individual applications) of—

      (a) applications for legal aid or advice and assistance;

      (b) supplementary or incidental applications or requests to the Board in connection with any case where legal aid or advice and assistance has been made available.'.—[Mr. John MacKay.]

    Clause 7

      APPLICATION OF PART II
      Mr. John Mackay: I beg to move amendment No. 3, in page 6, line 16, at end insert 'this section or under'.
      Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to discuss Government amendment No. 37.
      Mr. Mackay: The amendment to clause 7 restores an existing power to prescribe exceptions and conditions about the provision of advice and assistance, which power was inadvertantly omitted in the course of our bringing together the relevant provisions in the Legal Aid (Scotland) Act 1967 and the Legal Advice and Assistance Act 1972. The related amendment to clause 37 applies the affirmative resolution procedure to such regulations.
      Amendment agreed to.

    Clause 10

      FINANCIAL LIMIT
      Mr. Wallace: I beg to move amendment No. 5, in page 8, line 4, leave out `£50' and insert £100'.
      Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 6, in page 8, line 22, at end insert—
      `(4) In the event of an approval under subsection 1(b) above being refused, there should be a right of review within the Board.'.
      Mr. Wallace: These two amendments relate to clause 10, which puts financial limits on the provision of legal advice and assistance, which is the substance of part II.
      Amendment No. 5 seeks to raise the limit applicable under this clause from £50 to £100. I understand that at present the average cost of legal advice and assistance is below £50. This average is arrived at by including within that total cases where little or no expenditure has been incurred because the consultation disclosed that no work needed to be undertaken. However, there are many cases where effective advice and assistance are required. In such cases, almost invariably the average cost will be greater.
      The requirement to seek approval under subsection (1) must inevitably take a little time and cause delay. It causes administrative work and must involve some cost. To increase the limit to a more realistic sum while maintaining efficient scrutiny is the way to achieve effectiveness in the important service of providing legal advice and assistance.
      Amendment No. 6 follows on from amendment No. 5. If the ceiling of £50 or, as I would wish, £100 is reached, a solicitor may not exceed it, except with the approval of

      777
      the board. The amendment seeks to provide for a review within the internal mechanisms of the board if approval is not forthcoming on first application.
      As I understood the procedure when it was discussed in Committee and elsewhere, it is envisaged that for the purpose of legal advice and assistance those who will be approving and, in some cases, not approving applications to exceed the limit will in many cases be locally based. The amendment is designed to achieve at least some constitency in cases where there has been a refusal. There is now a right of appeal. The Minister announced a concession in Committee. This was a very welcome move by the Government, and later amendments will give effect to that announcement. Therefore, as the Government are now prepared to accept that there should be a right of appeal after applications have been made for either civil or criminal legal aid, it would be unfortunate, to put it mildly, if the right of review that already exists for certain forms of legal advice and assistance were to be taken away.
      For that reason, I have proposed this amendment which, within the internal mechanisms of the board, would allow a review to take place if an extension of the limit of £50 or, as I should prefer it to be £100, were refused.
      Mr. Dewar: I congratulate the hon. Member for Orkney and Shetland (Mr. Wallace), who has been ingenious and productive in the tabling of amendments. I sympathise with the aim of these offerings. The uprating of LAA3 from £50 to £100, the point at which an extension has to be sought, is an attractive, perhaps seductive, proposition to anyone who has sat, as I have, in a small room in a small Scottish burgh waiting for the thud of feet upon the stairs bringing business.
      An increase to that level would not be unreasonable. However, I am not sure, seductive though the argument is, that this is the appropriate time for such a change. We sometimes have upratings and the matter is considered in other ways, and I should be surprised if the Minister agreed with the proposition in this form. Pink Bombers, as they are known colloquially, are certainly important to the trade, and I know that the Patronage Secretary will be familiar with this form of work.
      We are talking about an important safeguard for the individual. The right to obtain initial advice and help with a legal problem is fundamental. There is a case for arguing that £50 is too low a cut-off point beyond which any work has to be authorised by, presumably, the legal aid board. I am sure that it will not be grateful for the additional flood of applications. Thus, although I have my doubts, I certainly understand and sympathise with the aims, but the Minister should look at the issue of the appeal sympathetically. I take the point about the need to be consistent, and in a few minutes we shall all welcome the Minister's decision to introduce a right of appeal in civil and criminal legal aid.
      As I have said, the LAA3 procedure, which is largely self-assessment and self-administration, is important. Clearly there will be many applications for extension, but most of them will be self-evidently valid, and will presumably be agreed, but if there is controversy and a refusal, it is not unreasonable that some form of appeal should be allowed, presumably an internal appeal, analogous to the one instituted in other areas. I hope that the Minister will give some thought to the proposition, and
      778
      will go along with the principle. The present drafting may be unsatisfactory, but I should like to think that he is favourably disposed towards the concept.
      Mr. John MacKay: In Committee I explained on a number of occasions that it is the practice in legislation to include the current figure, which now stands at £50 both north and south of the border. It was increased from £40 in November 1983. We keep the situation under review, but no clear evidence of a need for a further increase has emerged. It is of interest that the average cost of an advice and assistance account paid in 1984–85, at £45 is precisley the same as that in 1982–83, the year before the increase was made. The number of requests for increases in 1984–85, at just under 40,000, was the same as in the previous year, despite the increase in certificates for legal advice and assistance to approaching 141,000. I assume that that means that there were 141,000 Pink Bombers. It seems right that there should be a fairly strict limit on the cost of the work a solicitor can do on his own initiative, dealt with under the present schemes. I accept that the administrative costs of authorising increases have to be weighed against the prospective increased costs in advice and assistance if the limit is raised. However, the fact authorisations of increases will rest with the board rather than with individual local committees should serve to reduce any inconsistencies.
      These factors are also relevant to amendment No. 6, as this change in responsibility clearly reduces the need for a review procedure. At present there is an appeal from the local committee to the central committee. I understand that there is no appeal against refusal of an extension in England and Wales. I am not convinced of the need for a review procedure under the new arrangements, although this will be a matter for consideration with the board. If necessary, regulations relating to a review procedure could be introduced, but I am satisfied that there is no need for provision on the face of the Bill.
      There is a further complication in relation to assistance by way of representation since the introduction of a review procedure could introduce undesirable delays or complications. As I said in Committee, it would be possible to prescribe a higher limit for assistance by way of representation than for ordinary advice and assistance, and I shall certainly be giving consideration to that possibility.
      I hope that with that explanation the hon. Gentleman will be prepared to withdraw his amendment.
      10.45 pm
      Mr. Wallace: I hear what the Minister says about the fixing of the limit and the practice of maintaining the present situation, but I am sure that he will note what has been said and take the debate as a marker. One can rapidly reach the limit, and the administrative costs of processing an application for approval of an extension is not a small sum.
      The question of review is important. The Minister resisted the suggestion in Committee at a stage when he had not accepted that there should be any review at all with regard to civil and criminal legal aid. That has now changed, as can be seen in the amendments that we are about to debate. It seems rather odd that a present right of appeal will be removed at a time when the Government are willing to rights of appeal where they do not presently exist.

      779
      We can all look to the practice in England and Wales, as may happen on one or two occasions this evening, and try to borrow from that in saying that the same should apply in Scotland. At other times we take great pride in saying that it should be different. But this is one case where it matters not what happens in England and Wales. An existing right will be removed.
      I was encouraged when the Minister said that he believes that the powers given to the Secretary of State under present legislation are sufficient to allow him to make regulations to introduce a review procedure if that should prove necessary. I hope that if the Government are still in power—God forbid that they will be—after at least one year of the new board coming into effect, they, or any incoming Government, will consult the board on that matter.
      I cannot accept the Minister's point about unreasonable delays in a case of assistance by way of representation. As was pointed out in Committee, there will be no review if the person concerned does not institute it himself. Therefore, if he is concerned about there being a speedy disposal of his case and feels that a review would lead to delay, the answer is a simple one. That point does not stand up, but these are not amendments which I would wish to press to a Division.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 14

      AVAILABILITY OF CIVIL LEGAL AID
      Mr. John MacKay: I beg to move amendment No. 7, in page 10, line 22, at end insert—
      '(3) The Board shall establish a procedure under which any person whose application for legal aid under this section has been refused may apply to the Board for a review of his application.'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 35.
      Mr. MacKay: These amendments fulfil the undertaking that I gave at the start of the ninth sitting of the Standing Committee to provide on the face of the Bill for the establishment by the board of a review procedure in relation to refusals by the board of applications for legal aid for both civil cases and summary criminal cases.
      I have phrased the amendment in the form of a review procedure because it seems better to have a review procedure involving reconsideration of the application as a whole, ab initio, rather than an appeals procedure based on what may be comparatively narrow objections to the original refusal. An appeals procedure could become over-formal arid legalistic. It would be much more difficult for the person seeking legal aid—indeed he might need a lawyer to present his appeal—and might mean that new material produced by him could not be considered. Review, on the other hand, will leave the necessary freedom to reconsider all aspects of the application including any new material.
      We discussed in Committee who might sit on a review committee. My amendment provides for the board to establish a procedure for review of refusals of applications and it will therefore be for the board to consider how best this can be done, although my right learned and hon. Friend the Secretary of State could make regulations if necessary.
      780
      I should explain that the board can establish committees which can consist either partly or wholly of members who are not members of the board. That power was included in the Bill with this appeal procedure arrangement very much in mind, both to ensure that an independent review was possible and because such review committees will no doubt consist mainly of lawyers and would thus not in practice consist mainly of board members. There would not be enough lawyers on the board to allow that to happen.
      I do not wish to be too specific about how the committee will be formed and so on, because I shall incur the criticism of pre-empting the board's decisions, but I believe that the amendments honour my undertaking in Committee. I believe that they go all the way to satisfy the misgivings of my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) and of Opposition Members.
      Mr. Dewar: I welcome the amendments. I am glad that the Minister listened to the almost unanimous advice from both sides of the Committee and many interested outside organisations. There was widespread anxiety about the possibility of losing the present right of review of civil legal aid applications and an equally strong feeling that there was a gap in the present system.
      Many hon. Members who had been approached by constituents who had been refused legal aid felt uncomfortable about the fact that there was no right of review. It is a positive strength of the new system that that right will exist in civil and criminal legal aid. It would be ungracious not to give a warm welcome to the Minister's comments. He put the case for his review, ab initio, very fairly. Goodness knows what Latin law is still to come! We shall watch as the evening unfolds.
      It was useful to be reminded by the Minister that it is possible for the Scottish Legal Aid Board to form subcommittees that include people who are not members of the board. Presumably there is provision for paying the expenses and other outlays of such people.
      Can the Minister assure us that the review procedure will be in place from the beginning?
      Mr. Wallace: Ab initio.
      Mr. Dewar: Yes, that springs to mind as a useful phrase on this occasion. Will there be a review procedure from the beginning? It is important that there should be, and I am sure that that is the intention.
      The briefings from the Law Society have been useful throughout the passage of the Bill and the society says that it must withhold its final comment until it has had sight of the regulations, but I understand that there will be no regulations, because the amendment merely instructs the board to establish a procedure, which will be the business of the board.
      There will be no question of regulations being laid or of scrutiny. Perhaps the Minister will confirm that fact and say whether there is an understanding that the scheme will be submitted to the Secretary of State. That is not an uncommon procedure, and I thought of tabling an amendment to have that done, but I was anxious not to delay matters and build in extra stages. Will there be a duty on the board to produce the plan within a set period and to make it public and satisfy the Secretary of State that it has carried out the legal duty that we shall lay upon it?
      Mr. Fairbairn: I thank my hon. Friend the Under-Secretary and my right hon. and learned Friend the Secretary of State for putting on the face of the Bill the requirement to have a review procedure for legal aid in civil and summary criminal cases.
      The Government have been sensitive and sensible in their reaction to criticism that came in comparative silence from the profession, but not entirely in silence from those of us who represent the interests of justice in the House.
      Some matters worry me. First, one criticism made in Committee was that we were constantly writing blank cheques. We have written le plus blanc cheque because the Minister has written in the simple concept that the board will set up a procedure.
      We are between two stools. The Secretary of State does not interfere with the board, but the Minister says that we do not know what it will do. We do not know whether it will be a dinosaur with four legs, or a kangaroo with two pouches. It is worrying that the Government say that they will set up the procedure, without the Minister explaining what form that procedure will take.
      There are two forms of procedure. I understand that the Minister prefers the second form. The first form is that if a reason can be found for disallowing or refusing the first time, the review process can find that that is wrong. The second form is to have a replay, and no account is taken of the reason for refusal.
      The Minister's view is that the second form is preferable, but if an original application merely goes into committee, it goes to an official. One does not know to which official it goes. It might go to Mr. Nice or to Mr. Nasty, who might be in a good mood or in a bad mood. If the review does not take into account the grounds on which the official decided against an application, that might be prejudicial—or very beneficial. The official's decision might be right and the review might miss the point. An applicant is entitled to know the grounds upon which a refusal is decided. That is basic natural justice.
      If the Bill becomes law, the Secretary of State will set out a number of procedures. We shall be able to negative only in total any regulations applying the law. We shall be unable to alter them. I should like, as a matter of natural justice, to know why Mr. Unknown Official refused my application.
      I see the Minister's argument. If three wise men judge a cause after one unknown man has judged it, a second chance should be given. But that is not the concept of justice in Scotland. In Scotland three wise men judge upon the judgment of the first person who judged the cause. That is a different concept. So I ask the Minister to consider carefully. We are considering going, not before courts or the Law Society, but before an official whose opinion or identity we shall never know. The name of the official and the reason for his judgment should be put before the appeal procedure. That is the minimum justice. He can consider that in addition to the concept of ordering a retrial, or a replay.
      Dr. Norman A. Godman: Is not the decision and the reason for it more important than the naming of the official?
      Mr. Fairbairn: I am sure that it is, but it is the anonymity of the process that worries me. I am sure that the hon. Gentleman will understand. One just does not know why a decision has been taken and one has no means
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      of discovering who has taken it. I shall use the concept of the seven dwarves—Happy, Grumpy, Doc and so on. If one happens to get Grumpy, that might be the reason for the decision. That is not a good thing. Therefore, I feel that the review board should have before it a statement of fact. It can start again if it wishes, but it should at least know why the initial application was refused.
      I am in no way criticising my hon. Friend the Minister. I hope that I am being helpful. I should like once again to congratulate him on the sensitivity with which he approached the anxieties put before him in Committee.
      Mr. Gordon Wilson: I should like to add my voice to the thanks which have been directed to the Minister. I am sure that he is in an unusual position and I trust that he is not over-embarrassed by it.
      The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) put his finger on one of the doubts that still exists and which was perhaps behind the somewhat cynical comment of the Law Society of Scotland that it would withhold final judgment until it saw the mysterious regulations. I think that we all accept that this is an improvement on the previous position, especially in relation to criminal legal aid, where there was no such appeal. That has been one of the aggravations that not only the legal profession, but those who have been refused legal aid have had to put up with.
      I am concerned about another aspect. My concern is of a practical nature. The Minister has probably adopted this approach to reduce the amount of bureaucracy involved. It is easier not to give an explanation and for an official or group of officals to look again in the review procedure. When one has to frame reasons for a decision from a tribunal conscious thought has to be taken, especially in those proceedings which might end up in a higher court.
      It would not necessarily follow, in relation to the refusal of a legal aid application, that a complex statement of reasons would have to be produced. It could almost be reduced to a code. However, it would help legal aid applicants and their advisers if they knew where their argument should be directed if they write in to support an application in the review procedure. Otherwise they are in the dark.
      It may well be that the legal Aid Board official or the committee which has looked at the papers has a valid reason for refusing an application according to the information available. It could be that, if given additional information directed to the point at issue, the board or committee might well be satisfied of the usefulness of granting the certificate.
      One of the features of the existing system which, in some ways, could be beneficial is the way in which decisions are taken by sheriffs or justices in chambers, I presume, on each application. Solicitors frequently turn up with the applicant, and the judge can direct questions to the applicant about the nature of the defence and so on. Therefore, if there is any doubt as to the reasons why legal aid should be granted or refused it can be made clear. Without the appeal procedure in criminal legal aid cases that might not necessarily provide a solution that would satisfy everybody. However, I think that it would be helpful if the Minister could outline what direction his mind is taking in relation to the system to be put into operation.
      There is a practical matter which perhaps lay behind the original decision not to have a review, which is the increase

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      in the volume of business. I have no doubt that a substantial number of appeals will be directed towards the Scottish Legal Aid Board that will require the time of staff or consultants under a fee-paying arrangement in considering them. Under the new centralised system which is in force, how much delay is likely to be encountered in dealing will the review cases? I was not a member of the Committee, but I understand that the Committee addressed itself to legal aid applications and dealing with them in a given time scale so that they would not get in the way of preparation of trails, especially in areas where trails take place fairly swiftly. If there is a review procedure, it will be necessary for the board to receive an answer quickly so that the necessary work in preparing a defence can proceed. I think that the House would find it of substantial interest if the Minister could lighten our darkness.
      Mr. Wallace: I join those who have expressed appreciation to the Minister for deciding to introduce amendments that will allow a review procedure in both civil and criminal legal aid. Many of us still have misgivings about the Bill as a whole, but if the amendments are carried it will emerge from the House as a better measure.
      The Minister should take on board the valid points made by the hon. and learned Member for Perth and Kinross (Mr. Fairbairn). The person who has his application refused should be told in what way it was defective and did not match what was required for him to be awarded legal aid. I can understand the Minister's reluctance to say too much lest it be thought that he is speaking for the board, setting out what it should do and being unnecessarily interfering. If the Minister expressed a view, I am sure that the board would have regard to it, as it will to those who have said what the board should do in setting up the procedure. If it includes in its procedures the giving of an indication to the applicant why, in a general area, his appeal was unsuccessful, the applicant and his advisers will be able to provide more information. The indication might signify that there was a misunderstanding, which the applicant might be able to clarify.
      If there is an internal mechanism and a file, to which papers are attached, the file will be passed on under the review procedure to three of four wise men or women. It is not impossible that the reason why the official of first instance thought that the application should be refused will be set out on a document within the file. The applicant may not know why he has been refused and it would not be impossible for the reason for the refusal to be made known to the appeal procedure as a whole. It would be unfair if it were put into minds of the wise men or women why the decision to refuse the application had been made at first instance, especially if the applicant had not had an opportunity to furnish more information.
      Mr. Fairbairn: That would be the ultimate of unfairness. When I considered the alternatives I said to myself, "You might lessen the chances of the appeal board granting the appeal if you told it why the application had been refused in the first place." That is one possibility. That might restrict the way in which the board would consider the appeal. It would be heinous if the board were able to tip the wink to the appeal procedure why the original decision was made and the applicant was not informed. The board would then be able to produce an entirely different reason for refusing the appeal.
      Mr. Wallace: I completely share the fears expressed by the hon. and learned Member for Perth and Kinross. I hope that the points that have been made in this debate are considered by the board when it sets up the review procedures so that such infairness as have been mentioned can be excluded and such positive means which might enhance the fairness of the review procedure might be included. In conclusion, I welcome the fact that a review procedure is to be set up.
      Mr. John MacKay: Clearly the hon. Member for Orkney and Shetland (Mr. Wallace) was listening to me during the Committee stage when he suggested that I might say that I am not running the board. I do not wish to go into detailed prescriptions as to how the board might set up the procedure.
      Mr. Wallace: The Minister has always said that.
      Mr. MacKay: I have not said that this evening.
      Mr. Wallace: Yes, the Minister has.
      Mr. MacKay: Oh dear. Well, the more I say it the more I might be believed on this subject because some people think that the board is to be entirely the creature of my right hon. and learned Friend the Secretary of State for Scotland. I am trying to explain that that will not be the case.
      In response to the hon. Member for Glasgow, Garscadden (Mr. Dewar), I can state that the appeal procedure will be in situ when the new system gets under way. The power to appoint to the sub-committee comes in paragraph 12(3) of schedule 1. The hon. Member for Garscadden also asked what role my right hon. and learned Friend might have in ensuring that the board does what we have said that it ought to. There is the possibility under clause 36(2)(a) of making regulations about these matters. Whether we proceed by regulations or not is a matter which will be discussed by the board and my right hon. and learned Friend. There will be discussions between the board and the Scottish Office with regard to the appeal procedure.
      Mr. Dewar: I understand that there will be discussions, but I am sure that the Minister's views will be very persuasive to the board. Do I take it that the Minister favours the possibility of regulations being laid in dealing with the review procedure? That would be useful to know because it would tell us a little about the possibility of influencing the form and style of the procedure.
      Mr. MacKay: I can understand the hon. Gentleman's point. However, the question whether this will need to be carried out through regulations or by the board setting up the procedures under its powers is a matter upon which I am broadly neutral at present. I can see the force of regulations because they would give the House the opportunity of having its say. However, I hope that the hon. Member for Garscadden can be content with fact that I have listened to the various points that have been made in this short debate and when the board discusses this matter it will also examine the points made by hon. Members who have contributed to the Committee and the Report stages.
      My hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) posed a difficult question about the nature of the procedure. He asked whether it should be a review procedure or—if I may describe it in this way—a legal-type appeal in which the reasons for the

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      decision must be given. The present position on civil matters is that in an appeal the committee handling the appeal cannot take new factors into account. I have made it clear that when someone appeals to the board under the new procedure, I envisage that that person would be able to include anything new that he wanted to draw to the review committee's attention. When an application is refused on grounds of the interests of justice, that is exactly what the person will be told, just as at present. It will not be possible for the board to go into great detail as its decision involves a balancing of the various factors.
      Nor would it be practicable to name an official, partly because several officials may be involved and especially because the decision will be taken in the name of the board, not in the name of one official.
      11.15 pm
      Mr. Fairbairn: I am not happy with this at all. The interests of justice are not defined, but the matters to be taken into account are adumbrated in the Bill. It would be ludicrous if a person was to appeal imagining that the ground upon which he had been refused was that his defence was frivolous, when in fact the ground upon which the matter had been refused was one of the others. He must be told, if he is to be allowed to give additional facts, which wing is missing or the ground on which he has failed. For example, it would be ridiculous if, in a French examination, a child thought that he had failed because he did not understand the plays of Moliere when in fact he had failed because he did not know how to decline the verb "aimer" — je t'aime, to l'aime, and so on. He must be given some idea of the ground upon which he can improve.
      Mr. MacKay: My hon. and learned Friend's argument holds together only if one considers an appeal-type system. With such a system, the appeal committee would need to know the grounds upon on which the application had been refused. But if we have a review procedure, with the committee considering the case completely anew and not taking into account whether the initial decision was rightly based, it is a different matter. Indeed, we should insert in the system a fairness—a second look—which does not involve the original decider or deciders arguing their case in front of the review committee and, presumably, the applicant arguing his case again. It would be unfair if one side could defend its case in person or on paper while the other side could not do likewise. Although my hon. and learned Friend's point would be valid in an appeal-type system, it would not have so much strength in a review system.
      The hon. Member for Orkney and Shetland said that it is conceivable that, when the file reached the review committee, it would contain some scribbled notes which would tell the committee why the person or persons involved had turned down the application. That is a fair point. The board will have to ensure that its people do not make notes on the face of a file which might later go to a review committee.
      Mr. John Maxton: That is ridiculous.
      Mr. MacKay: The hon. Gentleman says that that is ridiculous, but he has not been listening to the argument. The hon. Member for Orkney and Shetland made the valid
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      point that if there is to be a review ab initio, the papers should not contain remarks made by the decider showing the committee how he arrived at his conclusion. That would be wrong, so the board must take steps to ensure that its people do not write on the face of files that might come before the review committee.
      Mr. Fairbairn: That would be absolutely outrageous, because if the decider was Mr. Grumpy from among my gnomes, he need not give a reason. He need only say, "Never liked the hon. Member for Argyll and Bute (Mr. MacKay); refuse." He would be prevented from giving any reason because someone else might read it. Therefore, he can refuse the application without giving a reason, which would be outrageous. Let us look at the Bill. This would be absurd. In the context of legal aid in clause 24, official No. 1 who is not Grumpy, but an honourable gentleman, might say that in his opinion the offence is such that if proved it is unlikely that the court would impose a sentence which would deprive the accused of his liberty. So he comes to that conclusion. It does not matter if he consults 200 others, but that is the reason why he refuses legal aid. Along comes the review committee, which is not allowed to consider that matter because this guy is not allowed to write down lest it prejudice the review committee, and says that in its opinion, the defence to be advanced by the accused appears to be frivolous. That is not a review. One cannot have one official coming to a conclusion that is not subject to test by those who are reviewing it and who come for a totally different reason to the same decision, which is a refusal. That is not a review. It is not even justice.
      Mr. MacKay: I am well aware that I shall not convince my hon. and learned Friend about this matter. I have given it some thought since he raised it in Committee. We spoke about it as well after the end of the Committee stage.
      I understand my hon. and learned Friend's point, but those are factors that have to be taken into account. There could be other factors in a particular case that the officials might take into account. It is better that we have a review procedure. A review procedure without the official or officials who made the original decision having any influence on the review committee is a perfectly fair and reasonable way to proceed. I understand that my hon. and learned Friend would like to do it in a more legalistic way, dare I say, as if it were an appeal court, but there are other circumstances, not perhaps in the law, where appeals are taken as reviews by another body, which looks independently and separately from the original body, or decision-makers, at the subject under appeal.
      That is the fairest way. I think that it is likely to be the quickest way of dealing with the problem, rather than hearing arguments and allowing them to carry on between the original officers who made the decision and the applicant, or indeed the applicant's lawyer. For example, if the person who made the original decision is a lawyer, and he argues in front of the review committee why his decision should stand, the poor old applicant should have a lawyer defending his corner. Before we know where we are, we shall add great complications to what should be a simple and fair issue of a straightforward review by new and independent people, afresh.
      Mr. Wallace: Much of the debate has taken place on the basis of a refusal of criminal legal aid in summary cases, where the interests of justice come into play.

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      However, one could be considering the refusal of civil legal aid, because in the view of the official who deals with it first, there is no probabilis causa litigandi. That might involve important matters of legal consideration. I recall one case in which I was involved, about the granting of legal aid for an appeal to the House of Lords. It may have been legalistic, but a legal point was there to be argued. It was thought by some that there was probabilis causa. In such a case there is some advantage of knowing exactly what the barrier is to the granting of legal aid.
      Mr. MacKay: I understand that point, but equally I must point out that the composition of the review committee will be heavily weighted in favour of lawyers, dare I say it, at the risk of being thought to be setting up a body composed of lawyers. The committee will be largely composed of lawyers, a bit like the House at this stage of the evening. If the hon. Gentleman is saying that, in the case of civil legal aid, there may be considerable legal matters to be considered by the review body, I should have thought that the type of review body that I envisage would be well qualified to consider the matters that will be brought to its attention by the applicant.
      I know that I have not convinced my hon. and learned Friend the Member for Perth and Kinross, but I hope that the fact that I have conceded the argument about having a review or appeal in civil and criminal cases will find merit in the House and that the House in general will agree that we are served better with a review procedure than with the type of appeal procedure which my hon. and learned Friend has argued in favour of fairly persuasively and often.
      Amendment agreed to.

    Clause 19

      EXPENSES OUT OF THE FUND
      Mr. Wallace: I beg to move, amendment No. 8, in page 13, leave out lines 1 to 5.
      Clause 19 concerns the circumstances in which a court may make an award out of the legal aid fund to an unassisted party to defray, in whole or in part, expenses incurred when the other party to the action has been legally aided. One of the preconditions is that the unassisted party would be entitled to expenses against the legally assisted person in any event.
      The Bill provides, in clause 19 (3)(b):
      "in the case of expenses of proceedings in a court of first instance, those proceedings were instituted by the legally assisted person, and the court is satisfied that the unassisted party will suffer severe financial hardship unless the order is made".
      That provision is what the amendment would exclude.
      The argument falls into two parts. The first relates to the basic unfairness of the unassisted party being in a relatively advantageous position if proceedings are instituted by someone on legal aid but having no right to have expenses awarded to him out of the fund if he raised the proceedings and they were defended by someone on legal aid when it is unlikely that there would have been any action or defence, if legal aid had not been made available to the defendant. If the unassisted party receives assistance out of the fund, it seems only fair that he should do so if he is a pursuer or a defender.
      This matter was raised in another place by Lord Denning, which is perhaps not a name that brings music
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      to Minister's ears. One of the cases that he cited to the other place was an English one — Mr. Thews v. Mr Reeves—which was reported in the 1982 Queen's Bench Division reports. It was a simple case. Mr. Thews had built up a business and agreed to sell it to Mr. Reeves for £50,000 — £5,000 to be paid immediately and regular instalments of £800 to follow. The £5,000 was paid, but there was default on the instalments. Mr. Thews raised a straightforward action for payment.
      The action was defended—the commission of some fraud was put forward as the defence. The claim was found to be spurious, but the defendant was given legal aid to pursue that defence. The defence was thrown out, but because the case was instituted by a non-assisted party and it was dealt with at first instance, there was no way in which the court, although it thought that the plaintiff should be awarded out of the fund, could make such an award because the matter had been brought by an unassisted party. It is to get away from that basic unfairness that I propose this amendment. Indeed, paragraph 243 of the report of the Lord Chancellor's Advisory Committee stated:
      "We continue to support broadening the provisions of the Act to permit successful plaintiffs to receive costs from the fund".
      That is an English advisory committee, but in a case such as this the basic fairness also applies in Scotland.
      11.30 pm
      The clause also states that the unassisted party will have to suffer financial hardship before the order is made. That in itself goes too far. Subsection (c) allows the court to make an award if it is felt to be
      "just and equitable in all the circumstances".
      That is the proper test. The criterion of the unassisted party suffering severe financial hardship is unduly restrictive. Anomalies can arise. A case could go through the Inner House of the Court of Session to the House of Lords, which may feel that some payment should have been made from public funds to the unassisted person. The House of Lords could award expenses for proceedings in the House of Lords, but could not do so in respect of the expenses at first instance because of this clause. That could also lead to anomalies.
      Here we have an opportunity to make a constructive change in the law that will lead to a fairer system. On two occasions in recent months constituents have told me that they have been the unassisted parties in litigation and have been unsuccessful in obtaining expenses. It can cost people a lot of money, either to pursue their right or to defend it. There is a feeling that if one party is in receipt of legal aid, in some respects that party can hold the other party to ransom. Such a party knows that he has nothing to lose if the action continues to run, whereas the unassisted person, however right his cause, must look over his shoulder at the mounting expenses. Indeed, it could get to the ludicrous position where it is costing a person more to defend his right than it would be if he accepted the case brought against him.
      For these reasons, I move the amendment. It will introduce greater equity into the law on legal aid, particularly in relation to unassisted parties.
      Mr. John MacKay: The circumstances in which a non-legally-aided litigant who is successful against a legally-aided party can obtain payment on his expenses from the legal aid fund are limited, and always have been, since the possibility of such payment was introduced in 1964.

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      The amendment would remove some of these limitations, in particular those which relate to the expenses of first instance proceedings. Succesive Governments have taken the view that where an unassisted person has been brought into court not of his own will, but to defend an action against him raised by an assisted person, then he should be able, if successful, to obtain his expenses from the fund — if otherwise eligible. This seems only fair, since in assisting the pursuer from the fund the board would have taken the view that the pursuer had probabilis causa litigandi — that is, a reasonable prospect of success. If it accepted its share of the responsibility for instituting the action, it should accept liability. However, the position is rather different if the unassisted party instituted proceedings, since then he must take responsibility for the risks of proceeding. Given the continuing need to make the best possible use of resources available for legal aid, I continue to think it is proper to distinguish the two cases.
      The amendment would also abolish the provision that an unassisted person's expenses would be met only if he would otherwise suffer severe financial hardship. While I have some sympathy for the position of many unassisted parties, again I do not think the resources of the legal aid fund should be available in cases where there is no real financial need. I hope that with that explanation, the hon. Gentleman will withdraw his amendment.
      Mr. Wallace: I am not convinced by what the Minister said. There is a basic question of equity at stake. The Minister said that an unassisted party which is a defender is entitled in some circumstances to have his expenses covered by the fund, but that if, through obtaining legal help, he incurs considerable expense to pursue his right and does so successfully, he is not entitled to claim expenses from the fund. That seems inequitable and I am not convinced by the Minister's explanation that in some way it is equitable.
      Amendment negatived.

    Clause 21

      SCOPE AND NATURE OF CRIMINAL LEGAL AID
      Mr. Wallace: I beg to move amendment No. 10, in page 14, line 43, leave out from 'held' to 'in' in line 1 on page 15.
      The amendment deals with criminal legal aid. Clause 21(4)(b) states:
      "Criminal legal aid shall consist of representation, in terms provided for by this Act — … by a solicitor at any identification parade held, by or on behalf of the prosecutor within the meaning of section 462 of the Criminal Procedure (Scotland) Act 1975."
      Since 1980 it has been possible to hold identification parades at the instance of the defence. The simple purpose of the amendment is to allow criminal legal aid to cover those parades as well as parades at the instance of the prosecutor. I do not think that that occurs in many cases, but, as I understand it, criminal legal aid would not be available if an identification parade were held at the instance of the defence, although the person had legal representation. The amendment provides a certain degree of equity in that regard.
      Mr. John MacKay: The hon. Gentleman has explained the purpose of the amendment, which is to make sure that automatic legal aid will be available for identification parades which are held at the request of the suspected or accused person, rather than at the instigation of the Crown.
      I am happy to assure the hon. Gentleman that the amendment is unnecessary. That is because, as he will see from section 10 of the Criminal Justice (Scotland) Act 1980, which originally added this provision to the legal aid legislation, the strict position is that all identification parades are held by or on behalf of the prosecutor. That is so whether the identification parade follows a decision by the prosecutor or by the police, who are taken to be acting on behalf of the prosecutor, that one is needed; or a request for one by the accused; or, indeed, is held in consequence of an order made by the sheriff under section 10 of the 1980 Act. The advantage of the present wording is that it fits in with that of section 10, and I should have thought that that was helpful.
      With that assurance, which I hope the hon. Gentleman will find more comforting this time, I hope he will feel able to withdraw his amendment.
      Mr. Wallace: I am only too pleased on the strength of that assurance to beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 24

      LEGAL AID IN SUMMARY PROCEEDINGS
      Mr. John MacKay: I beg to move amendment No. 11, in page 16, line 28, after 'Act', insert
      ',to section 21(3) of this Act'.
      This amendment is consequential on the insertion in Committee of clause 21(3).
      Amendment agreed to.
      Mr. Wallace: I beg to move amendment No. 14, in page 17, line 4, after 'offence', insert
      'taking into account the surrounding circumstances (including any previous convictions or any other findings of guilt) against the accused'.
      Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 15, in page 17, line 6, at end insert
      'or impair his prospects of future employment'.
      No. 16, in page 17, line 6, at end insert
      'or impairment of his employment prospects'.
      Government No. 28.
      No. 29, in page 17, line 18, after 'but', insert
      'except insofar as provided by paragraph (a) of this subsection'.
      No. 30, in page 17, line 19, at end insert
      'except when considering an application under subsection 3 (a) above'.
      Mr. Wallace: These are important amendments. They relate to the factors that we took into account in determining whether it was in the interests of justice that criminal legal aid should be made available in any case. Right hon. and hon. Members will recall that when the consultation paper that was the forerunner to the Bill was produced there was an indication in it that one of the factors that might be taken into account in determining the interests of justice was whether the accused person had a criminal record. That met with widespread criticism. It

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      was felt by many, myself included, that it struck at the heart of our system, which is that a person should be regarded as innocent until proved guilty. On Second Reading the Minister properly pointed out that it would not be the Government's intention to include such a factor in those that they would put forward as relevant when assessing the interests of justice. The Government did that when they eventually tabled their amendment setting the factors, and that appears in lines 18 and 19 of the clause.
      It became clear during the debate in Committee that any previous conviction or other findings of guilt could be relevant in considering whether the court would be likely to impose a sentence that would deprive a person of his liberty or lead to the loss of a person's livelihood. Clearly a first offence would not necessarily lead to a prison sentence, but if it were a person's fourth or fifth offence, that could lead to a prison sentence. That could be highly relevant in determining whether a person was likely to lose his liberty or livelihood. For that purpose, it was thought that a person's previous convictions should be taken into account.
      Linked with amendment No. 14 is amendment No. 29, which would qualify lines 18 and 19 to the extent that the passage would read:
      "except insofar as provided by paragraph (a) of this subsection the Board shall not take account of any previous convictions"
      —that is, for the purposes of determining whether it is likely that the court will impose a prison sentence or a substantial line leading to the loss of a person's livelihood."
      Unfortunately, the Government's response to the criticisms that were made in Committee about Government amendment No. 28 has been to delete lines 18 and 19 together. That is a regrettable deletion, after the Minister had given us an assurance on Second Reading that previous convictions would not be taken into account by the board in determining whether it was in the interests of justice that criminal legal aid be made available.
      The amendments proposed by my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and myself, or that tabled by the hon. Member for Glasgow, Garscadden (Mr. Dewar), which has the same effect, meet the point made in Committee. They allow the board to have regard to previous convictions when considering subsection (a), but will not allow it to do so generally when assessing whether it is in the interests of justice that criminal legal aid should be granted. These amendments encapsulated the mood of the Committee although they criticised the provision, it was never the intention of members that the requirement not to have regard to previous convictions should be entirely deleted. I ask the Minister seriously to consider these points.
      The other amendments add that apart from a sentence leading to the loss of livelihood, it might also impair a person's employment prospects. That concern was aired in Committee. If a person is fortunate enough to be in employment, a court sentence might affect his livelihood. Equally, those who are unemployed might find that their employment prospects are impaired, perhaps irreparably, or damaged by the imposition of a prison sentence or even a substantial fine. The Committee felt that it was just as important to protect their rights as the rights of those who are fortunate enough to have jobs.
      792
      11.45 pm
      I hope that the Minister will look sympathetically at the amendment. It is not intended to be a wrecking amendment. It takes account of the interests of those who are unemployed and who might find that their prospects of obtaining employment are seriously harmed if a sentence of imprisonment is imposed upon them after having had no legal representation at their trial.
      Mr. Dewar: I agree with the hon. Member for Orkney and Shetland (Mr. Wallace) that this is an important group of amendments that raise a number of interesting issues. They plunge us straight into an argument about a clause that tries to define the interests of justice. The amendments go to the heart of many of the problems relating to the Bill. I enjoy the inestimable advantage of not having been involved in the Committee debates. I do not know whether that means that I come to a consideration of the Bill with an uncluttered mind, but that does not prevent me from approaching the argument with some fairly firm opinions.
      One of the problems about defining the interests of justice — a controversial concept that many hon. Members thought that it would be better not to pursue —is that the Minister finds that having listed a number of factors that have to be taken into account—and it is by no means an exhaustive list—he now has to invite those hon. Members who are interested in the subject to consider what should be added to them. By doing so, he lays himself open to attempts to improve upon the draftsmanship.
      I support what has just been said by the hon. Member for Orkney and Shetland about amendments Nos. 15 and 16. Both of them strike at exactly the same point, although the wording is slightly different. In both cases the wording is perfectly satisfactory, although obviously I prefer my own: to add at the end of the subsection the words
      "or impair his prospects of future employment."
      However, I should not take umbrage if the Minister preferred amendment No. 16. Both amendments are self-explanatory, and it is not for me to labour the point.
      The Bill fairly lays down that one of the points to be included in this core collection of factors is the likelihood of conviction leading to the loss of livelihood. None of us would quarrel with that conclusion. The trouble is that in the brave new world in which we live — certainly the world that has evolved during the last six or seven years —the number of people in Scotland for whom the loss of livelihood is an academic concept has increased to shameful proportions.
      The amendments say that there should be another consideration—the impairment of the applicant's future employment prospects. That seems to be particularly important. I had hoped that atht concept would commend itself to the Minister. He may say that if there is such a special factor, the board can take it into account in the case of that application. But there is some merit in covering the position of the unemployed. For example, a man might have interviews pending. It would be extremely difficult to go to them with any hope if he had a recent conviction against his name. Obviously, legal representation might be enormously important in putting a proper defence.
      Anyone applying for a job with a conviction is likely to be ruled out. It would be an extremely good way of winnowing through the enormous list of applicants for any job vacancy in Scotland. That applicant's chances might

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      be devasted until he is rescued by the terms of the Rehabilitation of Offenders Act, and his conviction is spent. I need not urge on the Minister the significance of a conviction for someone searching for a job. If he is guilty and has been convicted, that is the end of the matter, but it would be a tragedy if he had not been represented and if a genuine defence had not been properly stated, because he might then find himself ruled out of the job market.
      The amendments are straightforward and make the case. I do not see why the Minister should not show us his new-found virtue. As yet, I am not quiet convinced that he is sensitive. That is not an adjective that would occur to me when contemplating his activities. Several epithets come to mind, but I shall not spoil the atmosphere by dwelling on them. But the Secretary of State, with his Shogun and Rambo images, which his press officer is so assiduously cultivating, is probably aware that the Minister is capable of putting on verbal bovver boots with the rest, so "sensitive" does seem a little incongruous. But I should be happy if he lived up to that reputation, and I hope that the Minister will look kindly upon these amendments.
      I warned the Committee that the later groups of amendments were the most important, and I now wish to mention the significant matters represented by them. In Committee, there was an interesting debate about lines 18 and 19, which the Government propose to take out with amendment No. 28. They say that the
      "Board shall not take account of any previous convictions or other findings of guilt against the accused."
      I accept that there was a genuine problem, and the Minister and the Committee had to wrestle with an apparent clash between the survival of those lines, and the very proper terms of subsection 3(a), where the board would have to take into account the possibility of loss of liberty. In assessing loss of liberty, the client's previous record might well prove important.
      There was an argument about that incompatibility, and a good deal of dispute about the best way of proceeding. Perhaps I should give my hostage to fortune right away, in that during the course of that debate, my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) impetuously he is, on occasion, impetuous—suggested tersely to the Minister that the answer was to, "Take it out." That appears in column 292 of the Committee's proceedings, and excise was the message. The Minister might well argue that he has done just that, and might question what we are complaining about. But I do not need to remind him of his reaction to that concise suggestion. He said:
      "No, I will not take it out, but I shall think about how I might get around it". — [Official Report, First Scottish Standing Committee, 1 July 1986; c. 292.]
      I offer those examples of the Minister's prose strictly in the context in which they were uttered, which was on this very point.
      Therefore, we had a firm commitment from the Minister that he did not want to take out lines 18 and 19 and the reference to the fact that no account was to be taken of previous convictions. He specifically committed himself to finding a way round the difficulty.
      I am sorry that he did not keep to that intention. His thoughts on that occasion were the best thoughts and I regret that amendment No. 28 is now on the Order Paper. It is of some importance that the general statement of
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      principle about disregarding previous convictions should remain as part of the Bill and that some other way should be found of overcoming any ambiguity or inconsistency between that and the terms of subsection 3(a).
      I say that because one of the foundation arguments that was used in Committee was that the Royal Commission said:
      "Accordingly, the grant of legal aid should not depend on the accused person's criminal record."
      That was common ground among all parties and clearly it was important to put that on the record, particularly —I say this with no malice—because there has been a suggestion in the original consultative paper, which I think was something of an Aunt Sally, put up to be shot down, that the number of occasions on which an accused had applied for legal aid in the past might be a consideration in whether his most recent application should be granted.
      We had that background of doubt and against it it is important that the general point about previous convictions should stand in the Bill. It is on that basis that I argue strongly against amendment No. 28 in the Minister's name. I notice that the Law Society in its briefing for the debate described that amendment as
      "hastily conceived, wrongly inserted and ill serves the spirit of the clause within the Bill".
      I endorse that view.
      I hope that I have reasonably clearly set out the arguments. I am suggesting that we should go back to the Minister mark 1— the Minister who was apparently in charge in Committee until someone got at him at a later stage. We invite him to consider a version of amendment No. 29, or amendment No. 30 in my name, on the basis that they carry out the spirit of his commitment not to excise lines 18 and 19 but to find a way round the difficulties to which I have referred.
      The proposition that we should leave in
      "but the Board shall not take account of any previous convictions or any other findings of guilt against the accused."
      and add to that the words
      "except when considering an application under sub-section 3 (a) above."
      is a simple straightforward and effective way of meeting the difficulty and still preserving the general point about not taking account of previous convictions, which I think commended itself to both sides of the Committee.
      I do not think that there is a matter of principle between myself and the Minister. I hope that there is not. It is a matter of how we achieve a neat and workable clause. The best way, without sacrificing something of importance, which the Minister's formula does, is to retain the reference and add the important exception in favour of considerations of applications under subsection 3(a), which is done by my amendment.
      This is an important matter. I do not argue it to hold the Committee for a few minutes late at night. I feel strongly about it. I know that I am supported in that feeling by many hon. Members and people with an interest outside and I am comforted in my argument by the Minister's observations in Committee which I believe were good.
      Mr. Fairbairn: I sympathise with the hon. Gentleman's view and I think that the Government's amendment will achieve the reverse of its intention. However, how would the official ever come to a conclusion about whether a prison sentence was likely to result from a conviction unless he considered the person's previous record? If he

      795
      said, "This offence only involves throwing a stone at a pigeon," he would have to add, "But let us see what this person has been doing previously." It seems to me that in almost all cases a person's record would have to be considered.
      12 midnight
      Mr. Dewar: I understand what the hon. and learned Gentleman is saying and I do not think that there is anything between us. It would be possible to argue that the retention of the general point about not taking account of previous convictions is struck at by the implication in subsection (3)(a) that in the consideration of the likelihood of a prison sentence a person's previous record will have to be weighed in the balance.
      The important distinction is that my amendment would make it clear that an exception to the general rule about not taking previous convictions into account when deciding whether legal aid should be granted would be a narrow exception that was entirely related to the consideration of the likely loss of liberty and that, in general terms, when applying other criteria or when taking an overall view of the interests of justice, the official, the solicitor, the committee or whoever, would have to put that information from their minds.
      It may be said that that distinction is artificial and that once that fact was before the committee its members could not put it from their minds, but we often ask members of juries to put facts from their minds and we do not think that that strikes at the nature of the system. There are many legal occasions when men of legal training and skill have to put facts to one side when considering a decision. I hope that it will not be beyond the discipline of the board to go through the same process.
      I should like to preserve the general reference to the importance of disregarding previous convictions and make them relevant only in the narrowly defined exceptions set out in my amendments and those of Liberal Members. I certainly prefer that to the Minister's solution, which is the easy way out of merely excising the reference to the general principle.
      I urge the Minister to look at the matter sympathetically. It is an issue of substance and I hope that he will give a positive reply.
      Mr. John MacKay: I underline what the hon. Member for Glasgow, Garscadden (Mr. Dewar) said at the beginning of his speech. The list that we are considering is not exhaustive and cannot be a definition. We are not defining the interests of justice, but are setting out factors to be taken into account. The words "shall include" are clearly on the face of the Bill.
      When we discussed the concept in Committee on 1 July I gave an undertaking to look again at my amendments to clause 24 setting out those factors, and Government amendment No. 28 responds to the disquiet expressed in Committee about the interaction between the interests of justice factor in subsection (3)(a), which refers to the likelihood of an accused person losing his liberty or livelihood on conviction, and the tailpiece to subsection (3) which says that previous convictions or findings of guilt are not to be taken into account.
      My amendment deletes the requirement that the board shall not take account of an applicant's previous conviction or convictions or any other finding of guilt against him. The tailpiece was in line with the
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      recommendations in paragraph 8.55 of the report of the Royal Commission on Legal Services in Scotland and also took account of strongly expressed response to my Department's consultation paper that previous convictions should not be taken into consideration in the awarding of criminal legal aid. I listened carefully to the argument — and I understand it — that those with previous convictions are more likely to go to gaol and that such accused should be allowed to refer to their previous convictions in support of an application for criminal legal aid, but only if they wish to mention them. The amendment leaves the options open by deleting the tailpiece. An accused will, no doubt, be advised by his lawyer whether it is likely to be in his interests to draw the board's attention to the existence of previous convictions. It remains clear that the mere fact of a previous conviction is not put forward as a factor for the board's consideration.
      Mr. Dewar: This is interesting, but alarming. The Minister seems to be saying that the applicant and his solicitor must weigh up the pros and cons of mentioning previous convictions. They can mention them and so strengthen the possibility of getting legal aid and because liberty is at risk, or not mention them on the ground that it would prejudice the legal aid board's view. I do not like that implication.
      If that is the Minister's view it is important that it is in the Bill. I do not want that unfortunate Hobson's choice to be presented to the defence. The White Paper made us fear that previous convictions might become a factor in whether an accused is allowed legal aid. My point reinforces strongly the good sense of approaching the problem in the way that Opposition Members suggest.
      Mr. MacKay: I see the hon. Gentleman's point, just as I saw the point of the hon. Member for Glasgow, Cathcart (Mr. Maxton) in Committee. Perhaps I was in error in deciding to accede to the hon. Gentleman's request. I resisted the argument for a long time.
      I shall try to explain. The lawyer must decide whether previous convictions are relevant to the offence before the court. Previous convictions might be quite different. A motoring offence might be being considered and the previous convictions might be under the freshwater fisheries legislation. The lawyer might decide that previous convictions are irrelevant and do not influence the court when imposing a sentence. But that balance might change when the court takes previous convictions into account. The lawyer makes the judgment.
      Mr. Fairbairn: The applicant might not be advised by a lawyer and the lawyer will be in a dilemma if the applicant has a previous conviction for culpable homicide and is charged with careless driving or breach of the peace. Will he mention the previous conviction or keep it quiet? The essential principle is that legal aid should not be refused on the basis of a chap being a criminal before and therefore likely to be guilty on another occasion. That has nothing to do with whether he is likely to be imprisoned for a contravention of the litter legislation, or of whatever other minor offence he might be accused. I beg my hon. Friend the Minister to reconsider the issue that the board shall not take account of
      "any previous convictions or any other findings of guilt"
      against the accused in its determination of whether he should get legal aid. That is the point. He must be regarded as innocent when the final decision is made.
      Mr. MacKay: I see the argument, but I wish that hon. Members had not put an argument the other way round in Committee.
      Mr. Dewar: They did not.
      Mr. MacKay: Oh yes they did. I was there. The hon. Member for Glasgow, Garscadden (Mr. Dewar) was not. I can tell him.
      Clause 24(3), as modified by amendment No. 28, achieves the purpose of amendment No. 14 and, as I understand it, what hon. Members wish to achieve. Under subsection 3(a) as it stands, the board, in considering the likelihood of a custodial sentence, will be both entitled and obliged to take into account, apart from previous convictions, all the circumstances of the offence and of the accused himself—anything which a court, if he is found guilty, will take into consideration in sentencing him. We all agree on that. Amendment No. 28 further ensures that the board is able to take the accused's previous record into account, as was pointed out in Committee, because previous convictions may be very relevant to the likelihood of a custodial sentence on this occasion. Nobody disagrees with that as I understand it.
      Mr. Wallace: I do not think that there is much that separates us on this issue. My amendment, and the amendment in the name of the hon. Member for Glasgow, Garscadden (Mr. Dewar) makes previous convictions relevant, solely for the purposes of subsection 3(a). In other words it acts in a positive way to ensure that a person gets legal aid. By retaining lines 18 and 19 at the same time we wish to ensure that the knowledge of previous convictions cannot act in a negative way. By accepting either my amendment or that of the hon. Member for Garscadden that purpose is achieved. It allows previous convictions to be taken into account for the purposes of considering whether a sentence is likely to be one of imprisonment, in other words to enhance a person's chances of getting legal aid, but makes it clear that the previous convictions are to have no other sway on the board and are certainly not to have any negative influence in determining whether legal aid should be granted.
      Mr. MacKay: The fact that my amendment takes out the tailpiece does not mean that the board shall take into account previous convictions in the way that hon. Members seem to fear. The fears being expressed that the board might refuse legal aid because a person has previous convictions are thoroughly misplaced. I have not said that. In Committee I was persuaded that there was a danger in the way in which the Bill was worded. I am satisfied that Government amendment No. 28 meets the concerns that were expressed on that occasion and does not take us into the concerns that are being expressed tonight. The only circumstances in which the board has to take account of previous convictions are the ones I have outlined.
      Mr. Dewar rose—
      Mr. MacKay: I made the point earlier that there is no obligation on anyone to inform the board of his or her previous convictions. That was a fear expressed on a previous occasion in response to a discussion document earlier. The board will not have a record of anybody's previous convictions unless the person involved feels that it is relevant to 3(a) and to the likelihood of being sent to prison if found guilty of the offence.
      12.15 am
      Mr. Dewar: To some extent, the Minister has made difficulties for himself. If he is right in saying that there is no reason for fearing that previous convictions will colour the board's approach to the general proposition that legal aid should be granted in a particular case, why did he raise the issue of the difficult choice of whether to let the board know about previous convictions? That fear was specifically in the Minister's mind when he suggested that someone might be well advised not to rely on subsection (3)(a) and instead to hide the fact that there are previous convictions. The Minister cannot get out of that difficulty. This underlines that he was right in Committee to say that it was necessary to find another way of reconciling the general prohibition on considering previous convictions and the specific circumstances outlined in subsection (3)(a). The Minister has not told us why he has changed his mind. He has not explained to me why my fears are spurious given the arguments that he has been advancing.
      Mr. MacKay: I have changed my mind on listening to the discussion that took place in Committee and thinking about it afterwards. I took on board the simple argument that in some circumstances the fact that an accused has a previous conviction may have a major bearing on the danger of him being sent to prison if he is found guilty. That seems perfectly clear. I decided that the easiest way to respond to that justifiable fear was to remove lines 18 and 19. It appears that hon. Members are frightened that that will lead to the other extreme, and I have made it as clear as I can that it does not. That could be envisaged only if an applicant were obliged to tell the board what his previous convictions were. The applicant will tell the board about his previous convictions only if he and his lawyer—I accept that there will not always be a lawyer — think that that is something that the board should take into account when it is judging whether he may be sent to prison if he is found guilty.
      Mr. Maxton: The Minister seems to be being especially obtuse on this issue. We all agree that the words in question in subsection (3)(a) should not be taken into account. Paragraph (e) reads:
      the defence to be advanced by the accused does not appear to be frivolous."
      In that circumstance one can think of cases where it would be wrong for the board to take account of previous convictions. The accused might have said on three occasions in the past, "No, it wasn't me. I have an alibi", and the court has said, "You have not. We do not agree with you." If the accused claims for the fourth time that he has an alibi, the board might say, "He is saying it again and it is a frivolous defence." Of course, the fourth time might be the time when there is an alibi. The Minister is right to take account of subsection (3)(a), which we are asking him to do, but what about the other four paragraphs? That is why we think that the amendment should be limited to paragraph (a).
      Mr. MacKay: I have made it as clear as I can why it is my view and that of my advisers that the danger which is being exposed by hon. Members does not exist and that the concession that I am making to the request made to me in Committee meets the objective put to me by the hon. Member for Glasgow, Cathcart (Mr. Maxton) and others. I understood the objective and took it on board, and I have met it without exposing the applicant to the danger which are being rehearsed.
      Mr. Fairbairn: With great respect to my hon. Friend the Minister, I caution him on this matter. I do not think that this was a discussion in which I was a protagonist—
      Mr. Maxton: Are you sure?
      Mr. Fairbairn: I am not sure about that and I am willing to be corrected. It is important that we establish the principle and leave in the words
      "the Board shall not take account of any previous convictions or other findings of guilt against the accused."
      It is not a question of whether one's lawyer cares to advance the matter. These matters are frequently notorious. It was part of the argument in the Meehan case that the defendant was guilty because he had given the explanation of picking up people in the north of Scotland when he broke into a petrol station. He was convicted of that and because he gave the same explanation again — which was notorious and would undoubtedly be known to the legal board—he must be guilty. That explanation was even drawn into the Hunter report.
      I hope that my hon. Friend the Minister will understand that it is absolutely essential that that should be excluded as a concept in principle. It is matter of argument whether that should he dealt with in 3(a). I would be surprised if the board relied on the information that it received to decide on the matter, rather than deciding on the basis of the information already known to it.
      This is important. The lines in the Bill to which the amendment relate, simply state that the presumption of innocence should be presumed. The Government would not be getting into trouble if they accepted—or at any rate agreed to consider—the points made by the hon. Member for Orkney and Shetland (Mr. Wallace) and the hon. Member for Glasgow, Garscadden (Mr. Dewar) and reconsidered the matter. The Minister is beating against an important principle, namely that the lines contain the eventual concept that the board must presume the innocence of the accused whatever his record.
      Mr. MacKay: I appreciate the point that my hon. and learned Friend has made. However, if amendments Nos. 14 and 29 were made, the board would have to take into account previous convictions when considering factor of paragraph (a). In turn, that would imply that the accused would have to provide such details. I do not believe that hon. Members want that. We are agreed that if the accused believes these facts to be relevant to the discussion under (3)(a) as to whether he may or may not be sent to prison if found guilty, he ought to be able to tell the board that he has these previous convictions so that the board can make a proper assessment. If my hon. and learned Friend the Member for Perth and Kinross had previous convictions and I did not, in my case the board might decide that I would not be sent to prison for an offence even if I was found guilty. It would be different for my hon. and learned Friend who may have a few previous convictions for the same kind of offences. He may be in danger. That was the argument that was put to me. I accepted that, I understand that and I have presented the amendments today. However, I do not believe that the fears expressed by hon. Members about the proposition in the consultation paper that previous convictions should be taken into account are justified other than in the simple case we have already referred to, in that, it increases the chance of an applicant going to prison. The amendment does not go beyond the particular point upon which we are all agreed.
      Mr. Wallace: Why were these lines inserted in the first place?
      Mr. MacKay: They were inserted simply because the reaction to the proposal in the consultation paper was such that it was felt that they ought to be there.
      Mr. Wallace: They are very limited.
      Mr. MacKay: I do not think that they are limited, and (3)(a) is one of the principal factors. Whether or not someone will be sent to prison if he or she is found guilty is an important factor which the board must be able to consider properly. I have accepted the argument that the board can do that only if someone with previous convictions can give that information to the board and it can take that into account in a positive way. That is the purpose of the amendment.
      I understand that hon. Members are frightened that the amendment does more than that, but I assure them that, after much consideration and discussion with my advisers, I am satisfied that my amendment does what I believe it does, not what other hon. Members fear that it does, in addition to what we all want it to do.
      In amendments Nos. 15 and 16, I understand the fear that the present formulation might discriminate against those not currently in employment. However, the amendments are too nebulous. Conviction for all but the most trivial offences could be represented as impairing a person's employment prospects at some time in the future. Therefore, the test could be interpreted so as to cover almost any accused. It is not justifiable to make criminal legal aid available for offences which are minor in themselves and in their effect on the accused.
      However, if it was interpreted more narrowly, there would still be the problem of assessing what employment prospects were relevant. The board will be perfectly entitled, and I should expect it, to take into account the likely effect on the prospects of employment where, in special circumstances, it was of special relevance. As the hon. Member for Garscadden said, we are not defining the interests of justice, we are simply listing some factors. It is not an exhaustive list. If, in the opinion of the hoard, considering the applicant and the case, other factors are relevant, the board will take them into account.
      It is not desirable to have a specific provision, because it cannot be written other than very vaguely.
      Mr. Wallace: I have listened to the Minister's reply and to the exchanges which have taken place, and I remain unconvinced. On employment factors, we all know of cases where the plea in mitigation is that the accused has a reasonable prospect of gaining employment, which could be knocked on the head if he is imprisoned. Since we are excluding that, the signal might go out to the board—despite what the Minister says here—that that was not a proper factor for it to consider. It is regrettable that he has not accepted the amendment.
      What is more fundamental is the Minister's intransigence with regard to the amendments in my name and in the name of the hon. Member for Glasgow, Garscadden (Mr. Dewer). None of them undermines the principle which we have been trying to uphold. Indeed, they show concisely what was in the mind of the Committee. The Minister accepted that those two lines were inserted in the Bill because widespread anxiety had been expressed. By removing them from the Bill, he gives rise to that anxiety

      801
      once again. I invite hon. Members on both sides of the House to join us in the Lobby in support of the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 13, Noes 40.

      Division No. 256]

      [12.28 am

      AYES

      Beith, A. J.

      Maxton, John

      Bermingham, Gerald

      Raynsford, Nick

      Clelland, David Gordon

      Steel, Rt Hon David

      Dewar, Donald

      Wilson, Gordon

      Evans, John (St. Helens N)

      Foulkes, George

      Tellers for the Ayes:

      Hughes, Simon (Southwark)

      Mr. James Wallace and

      Kennedy, Charles

      Mr. Archy Kirkwood.

      McKay, Allen (Penistone)

      NOES

      Ancram, Michael

      Needham, Richard

      Blackburn, John

      Neubert, Michael

      Boscawen, Hon Robert

      Nicholls, Patrick

      Cope, John

      Norris, Steven

      Douglas-Hamilton, Lord J.

      Page, Richard (Herts SW)

      Durant, Tony

      Pollock, Alexander

      Fairbairn, Nicholas

      Rathbone, Tim

      Fraser, Peter (Angus East)

      Rhys Williams, Sir Brandon

      Garel-Jones, Tristan

      Rifkind, Rt Hon Malcolm

      Gregory, Conal

      Rowe, Andrew

      Hamilton, Hon A. (Epsom)

      Sayeed, Jonathan

      Hargreaves, Kenneth

      Spencer, Derek

      Hunt, David (Wirral W)

      Stern, Michael

      Jones, Gwilym (Cardiff N)

      Stewart, Allan (Eastwood)

      Lennox-Boyd, Hon Mark

      Thompson, Donald (Calder V)

      Lloyd, Peter (Fareham)

      Thurnham, Peter

      MacGregor, Rt Hon John

      Wolfson, Mark

      MacKay, John (Argyll & Bute)

      Wood, Timothy

      Malone, Gerald

      Mather, Carol

      Tellers for the Noes:

      Maxwell-Hyslop, Robin

      Mr. Tim Sainsbury and

      Merchant, Piers

      Mr. Francis Maude.

      Question accordingly negatived.
      Mr. Wallace: I beg to move amendment No. 17, in page 17, line 8, leave out 'substantial' and insert 'non-frivolous'.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): With this, it may be convenient to take the following amendments: No. 18, in page 17, line 8, leave out 'substantial' and insert `positive'.
      No. 19, in page 17, line 8, after 'of evidence', insert 'or procedure'.
      No. 20, in page 17, line 8, at end insert 'technical, confused'.
      No. 24, page 17, line 17, at end insert—
      (f) the facts and circumstances surrounding the charge or charges are complex or confused.'.
      Mr. Wallace: These are somewhat technical but nevertheless important amendments concerning the interests of justice. Many of us would rather that there was no requirement that the interests of justice should be satisfied before the granting of criminal legal aid in summary proceedings. We accept, however, that such factors are part of the law and hope that we can make amendments to improve them. Amendment No. 17 concerns clause 24(3)(b) which provides:
      "the determination of the case may involve consideration of a substantial question of law, or of evidence of a complex or difficult nature".
      We are proposing that the word "substantial" should be deleted and the word "non-frivolous" inserted. Frivolous
      802
      is a word that is not entirely common in our statutes—certainly not in Scotland—but the Government have set the precedent in subsection (3)(e).
      This is important because the Government are proposing a relatively high test—
      "a substantial question of law"—
      before the applicant is entitled to have legal representation. If any question of law is to be involved, it seems only fair that an accused person should have the right to legal representation. One would like to see equality of arms without any reference to the interests of justice, but when we introduce matters of a legal nature it seems unfair that the accused individual should not have the benefit of legal advice and representation in preparation for his trial.
      Amendment No. 19 relates not only to the question of evidence but to cases in which an accused person gets into difficulties as a result of the procedures.
      Amendment No. 20 relates to cases where the evidence or procedure is not only difficult and complex but technical. We are again dealing with an individual who is charged with a criminal offence, and it is only fair that he should have the advantage of legal representation if matters of a technical nature—which he could not be expected to understand—are involved.
      Amendment No. 24 extends that to the facts and circumstances surrounding the charges, not simply to narrow questions of evidence or procedure. These are perhaps limited and small amendments, but they are intended to be advantagous to the person who stands accused and who otherwise would not have the benefit of legal representation.
      Mr. Dewar: We can now get back to the even tenor of our ways after the excitements of the Division. I am sure that hon. Members, particularly on the Conservative Benches, are grateful to the Liberals for calling that vote, as it has proved that they are alive and well and doing their duty—all 40 of them. [Interruption.] Government Back Benchers have duties as undistinguished and unromantic foot soldiers in the Lobby—[Interruption.] I genuinely did not hear what the Secretary of State for Scotland said. I am not always as fortunate as that. If he goes on like this, I shall have to ask for the protection of the Chair.
      I do not want to follow the hon. Member for Orkney and Shetland (Mr. Wallace) through the Liberal suggestions, which he described as modest. I notice that one amendment seeks to import into the Bill the words "technical" and "confused". That had a certain symbolic importance that I found quiet attractive. I was also attracted to the amendment that put "procedure" after the work "evidence". That may be because I remember the headings of the examination syllabus at Glasgow university many years ago.
      I wish to speak to amendment No. 18, which stands in my name. This strikes at a point raised by the hon. Member for Orkney and Shetland, when he referred to the use of the word "substantial" in relation to
      "a substantial question of law",
      as one of the criteria that should be taken into account in deciding whether legal aid should be granted. I believe that the word "substantial" might give rise to difficulty.
      I must confess that despite the engaging precedent in subsection (3)(e), which contains the word "frivolous", it does not strike me as being entirely suitable. When one adapts it to "non-frivolous" it does not have the right ring. It is a liberal word and does not appeal to me in any way.

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      12.45 am
      My suggestion is that there is, perhaps, some virtue in removing the word "substantial" and inserting "positive". All these phrases are subjective in their definition, but clearly there is an invitation to the Legal Aid Board in the word "substantial" to take into account only questions of law of some weight. The board may look at it from the point of view of a lawyer in practice rather than as a layman. Questions of law may not seem profound to a solicitor and, indeed, may well be the stock in trade of a solicitor in daily practice. If that test were applied, a solicitor in daily practice may say that the provisions of the Prevention of Crime Act 1953 for the adaption of a weapon were hardly a substantial question of law. If that line were taken and the accused were left unrepresented, that person could not be reasonably expected to wrestle with that point. The same point could properly be made about the law of reset or the doctrine of recent possession.
      I see that the Solicitor-General for Scotland has appeared and taken his place. He will take my point. All those matters may reasonably he said not to be substantial, hut they are important for the defence, if they are grasped, and if the defence is unrepresented, those matters would probably not be grasped and properly put. To overcome that it would be fairer and more sensible to insert "positive" as a qualification on the question of law that might arise.
      Mr. Fairbairn: The hon. Gentleman will remember the case of the taxi driver who kept a tool of trade in his cab but was nevertheless convicted of contravention of the Prevention of Crime Act. Nobody would think that was a substantial matter, any more than they would think it was a substantial matter to argue whether a skean-dhu would be in contravention of that Act.
      Mr. Dewar: The hon. and learned Gentleman is making my point perfectly fairly. There are all sorts of concepts in that area, for example about intention, which might arise and would be simple enough to a solicitor who knew the game, but which would go wholly unremarked by a client if he were unrepresented.
      There is no point in making the point again and again, as I am sure that the Minister has grasped it. I should like him to say how he imagines the board would interpret the phrase. Let us imagine that the Minister lost his seat in Argyll and on the rescue operation principle for which the Conservative party is noted found himself sitting on the Scottish Legal Aid Board. How would he interpret "substantial" in connection with a question of law? How would the word "substantial" measure against recent possession, reset and the Prevention of Crime Act? They are three of the most obvious examples in this area. Would he not admit that it might be fairer slightly to downgrade the qualification to a positive question of law rather than to retain the word "substantial"? I await with interest the Minister's remarks.
      Mr. John MacKay: I shall resist following the hon. Member for Glasgow, Garscadden (Mr. Dewar) down the road on which he invited me to go with the suggestion that I might end up on the Legal Aid Board. I shall have to rest on my previous statement, which is that I shall not say much about what the Legal Aid Board should do in detail, because if I do I shall be accused of giving it instructions, or guidance.
      Our discussion is about "substantial" versus "non-frivolous" or "positive". I am not a lawyer, but I would
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      have thought that all legal proceedings involved "questions of law". The distinction is that we are suggesting that the word "substantial" should be in here. Hon. Members have suggested that there should be some qualification, and the two suggested words are "non-frivolous" and "positive".
      I cannot recommend amendment No. 17, because it is a fairly inelegant formulation, even if the hon. Member for Orkney and Shetland (Mr. Wallace) firmly rests on the fact that I use the word frivolous in another context later on. "Positive" raises the question of negative questions of law. If there can be a positive question, there can be a negative one. The concept of a "substantial" question of law is well understood and well-precedented, and it is reasonable in this context to use that as the qualifying word for a question of law.
      Mr. Dewar: I recognise that the Minister does not wish to be seen to be anticipating the decisions of the board, but I am not asking him to make a decision in the normal sense of the word. If the term "substantial" is well understood, perhaps the hon. Gentleman would like to tell us what he means by it? I wanted to help him by giving three sectors that are highly relevant and which will turn up frequently in applications. Does he think that they constitute substantial questions of law?
      Mr. MacKay: That is up to the board to decide. If I were to start laying down, even at this late hour, what I think the board should be looking at on this or any other issue, hon. Members would rightly say that I was attempting to give the board guidance beyond that which I have said all along I would not be prepared to do. The board must look at these cases.
      Every question is a question of law. The Bill points the board towards looking at those that are substantial, but it must decide. It is the only body that can decide what is or is not a substantial question of law.
      Amendment No. 19 would cause the paragraph to refer to the
      "consideration of … evidence or procedure of a complex or difficult nature."
      Merely as a matter of drafting, that seems to me an unsatisfactory formulation. It is possible for difficult questions of law to arise in relation to criminal procedure, but that, as I think the House will know, is already covered by the first part of paragraph (b) in its present form. Amendment No. 20, again, seems to miss the point. The fact that evidence is technical will either make it difficult or it will not. If it does, it is already covered. If it does not, it is difficult to see why it is a factor which particularly points towards a need for legal aid.
      As to amendment No. 24, if the facts and circumstances surrounding the charge are complex or confused, it seems likely that that will result in consideration of complex or difficult evidence being involved, so that paragraph (b) will come into play. The same applies to the reference to "confused" in amendment No. 20. The proposed new paragraph would certainly overlap with paragraph (b) in a confusing way, but where there were special circumstances which made it desirable in the interests of justice that legal aid should be available, the board would of course have to take account of them. I emphasise again that the specified factors are not the only factors which must be taken into account—the list is not a restrictive one. The test remains, as it always has been, whether it is

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      in the interests of justice that legal aid should be made available. Therefore, I hope that the hon. Gentleman will withdraw his amendments.
      Mr. Fairbairn: My hon. Friend the Minister knows that I do not like this clause, and my fondness for it has not been improved by his remarks. I noticed that he substantially avoided the substantial question that he was substantially asked by two substantial Members of the House about what he meant by "substantial."
      Mr. MacKay: Positive.
      Mr. Fairbairn: I do not know whether my hon. Friend meant "positive." However, he was very positive in being negative about being positive.
      It is important that we should not pass over this definition without understanding its implications. It is no good saying that it has no implications or that it has any implications. If substantial means anything — and positive would mean nothing different—either it means something, or it means nothing. That is what I find offensive about it.
      It is a fallacy, into which even the hon. Member for Glasgow, Garscadden (Mr. Dewar) fell — possibly because he did not take part in the Committee proceedings —to imagine that the factors to be taken into account by the board in determining whether it is in the interests of justice, will be taken into account by the board. It is not the board that will take them into account. It will be a single official to whom the file goes who will take them into account. It is a fictional board. That may be another example of where one may use the word "substantial". Substantially it is the board, but in fact it is an official. The file will be interpreted by an official.
      As for the idea that it will be interpreted by a lawyer or by anyone who has the slightest concept of what is a substantial point of law, what do we as lawyers mean by "a substantial point of law"? We mean a point of substance—in other words, a point that is valid. That is what we mean in law when we talk about a point of substance. We talk about substantial law. There is a branch of substantial law.
      Unfortunately, in this clause we have created a variety of both meaningful and meaningless phrases that are capable of any interpretation. That task will not be undertaken by the board. That is not its function. Even if it were its function, we do not know that it is its function, because the Minister has been careful to tell us that we do not yet know what its function is. So let us forget about that. We must be quite clear that when we are dealing with a substantial question of law, we are not talking about anything that cannot be denied by an official who decides to deny it, or about anything that cannot be admitted by an official who does not understand it. I do not know what it means. An official will not know what it means. It is capable of any interpretation whatsoever in any circumstances. It is unfortunate— I say it again and I hope that it will be written into the hearts of this board when eventually it discovers what its purpose is—that here again we have, in just one adjective, an illustration of a meaningless direction, even on the face of the Bill.
      I should like to know what an insubstantial question of law is. I have argued many such questions, and won. I have even defended people who stood to suffer the death
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      penalty on what might be regarded as insubstantial questions of law. Therefore, we have to remind ourselves again that the language of the Bill is unfortunate and capable of any interpretation. The warning must go out that the interpretation must be on the side of justice, not on the side of bureaucracy.
      Mr. Wallace: I very much share the view expressed by the hon. and learned Member for Perth and Kinross (Mr. Fairbairn). He has reiterated the difficulties encountered when considering the interests of justice. Although the Minister said that the idea of a substantial point of law was common and well precedented, he refused to accept any intervention that might have asked him to spell out what he meant by "substantial". He has often told us that he does not want to lay down instructions about what the board may or may not do, but I almost think that he is protesting too much. His failure to explain almost amounts to an unwillingness to perform his duties to the House. He has said that a substantive point of law is well documented and precedented, so there is an obligation on him to tell us what is meant by that phrase.
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      Mr. Fairbairn: The hon. Gentleman made an important lapsus linguae. He referred to a substantive point of law, which is very different from a substantial point of law. A substantive point of law is comprehended, but a substantial point of law is not. Does the Minister mean a substantive point of law? If the factors to be taken into account by the board in the interests of justice include a substantial question of law — it should, of course, be substantive—does it include the certificate that a judge may grant under the Act of Adjournal for additional funds to be granted? That might be an important purpose. It would be a substantial point of law, but not a substantive point of law.
      Mr. Wallace: I think that I understand what the hon. and learned Gentleman has said. The Minister said that the phrase was well precedented, but he probably meant "substantive", and I fell into the trap of using the wrong term as a result. I do not think that a substantial point of law is necessarily well documented or precedented. The Minister certainly gave us no idea of the origin of that precedent and was not prepared to expand on it.
      The Minister seemed to think that the procedure would be covered by the earlier part of paragraph (b), where if says:
      "the determination of the case may involve consideration of a substantial question of law".
      Procedure inevitably involves points of law, but the point is that just as evidence is separate from questions of law, so is procedure.
      I am disappointed that the Minister has been so negative about these constructive amendments.
      Amendment negatived.
      Mr. Wallace: I beg to move amendment No. 21, in page 17, line 17, at end insert—
      (f) 'the accused has been remanded in custody pending trial.'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 22, in page 17, line 17, at end insert—
      '(f) the accused supplies with his application a detailed statement of his defence which if held true by the

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      Court would be bound to result in the accused's acquittal of all or any of the charges libelled or in the deletion of any material part of a charge.'.
      No. 23, in page 17, line 17, at end insert—
      '(f) that the nature of the defence involves the tracing and interviewing of witnesses or the expert cross examination of a Crown witness.'.
      No. 25, in page 17, line 17, at end insert—
      (f) the accused is charged in some special capacity within the meaning of section 312(x) of the Criminal Procedure (Scotland) Act 1975.'.
      No. 26, in page 17, line 17, at end insert—
      `(f) it would be unlawful or inappropriate for the accused to seek to prerecognise a Crown witness.'.
      No. 27, in page 17, line 17, at end insert—
      (f) the conviction might involve substantial prejudice in related civil proceedings (whether actually anticipated, contemplated or could be anticipated).'.
      Mr. Wallace: These amendments again relate to factors that should be taken into account when the board determines whether any application for criminal legal aid in summary cases is in the interests of justice. The amendment states that it would be in the interest of justice for legal aid to be granted if the
      "accused has been remanded in custody pending trial".
      At present, under clause 22, if a person is in custody and is being prosecuted under summary procedure, he is automatically granted legal aid if he has tendered a plea of not guilty, and if he has made application to the board for legal aid in connection with those proceedings. Legal aid is automatically available to him until his application has been determined by the board.
      The amendment seeks to make it a relevant factor—because of the Government's scheme it can be no more than that—for the board to consider that the accused has been remanded in custody pending trial, and, by implication, is unlikely to be liberated from custody until such time as his trial takes place.
      That is an important amendment, put forward in a non-partisan way, and I hope that the Minister will consider it favourably. When we discussed it in Committee he was unable to give any satisfactory answer to the simple question of how, if one does not have legal representation, one goes about preparing a defence from prison? The things that must be done in preparing a defence, not least taking prerecognitions from witnesses, all involve some degree [Interruption.] I do not know whether the Minister is suggesting that I should wind up or carry on. If he tells me that he will accept the amendment I shall be only too pleased to wind up quickly.
      If somebody is in custody, preparing himself for trial, he should at the very least have legal aid to enable him to do it properly. If he is to be prosecuted by a lawyer who will have had all the advantages which go with that, his not having legal aid in such circumstances is virtually to expect him to defend himself with one hand tied behind his back.
      Amendment No. 22 says:
      "the accused supplies with his application a detailed statement of his defence which if held true by the Court would be bound to result in the accused's acquittal of all or any of the charges libelled or in the deletion of any material part of a charge."
      That was canvassed in Committee. It requires a detailed statement of the defence so that one which says, "It wasn't me" or "I wasn't there" would not be sufficient. The Minister's response to that in Committee was that every cock-and-bull story under the sun would be put forward. With respect, it is not for the Minister or the board to determine what is or is not a cock-and-bull story. That is,
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      in a summary case, properly the province of the sheriff or possibly the lay magistrate. It is for him to determine whether the defence put forward by the accused is a cock-and-bull story. For the board to in some way determine that involves a degree of subjective judgment which would not be welcome.
      Amendment No. 23 says:
      "that the nature of the defence involves the tracing and interviewing of witnesses or the expert cross examination of a Crown witness".
      Again, that almost speaks for itself. The person who does not have legal assistance and all the advantages that go with that could well be put at a disadvantage if the preparation of his defence involved considerable work in trying to track down witnesses. In particular, if there was an expert cross-examination of a Crown witness.
      Amendment No. 25 says:
      "the accused is charged in some special capacity within the meaning of section 312(x) of the Criminal Procedure (Scotland) Act 1975."
      That includes, for example, where someone might be charged in the capacity of a licence holder, the master of a ship or the occupier of a house, not a person in any straightforward individual capacity but where there is some additional complicating factor. That may not be sufficient in the eyes of the board to qualify under any of the headings in part III, but nevertheless it puts someone into a slightly different position for which legal aid would seem to be fair.
      Amendment No. 26 says:
      "it would be unlawful or inappropriate for the accused to seek to prerecognise a Crown witness."
      It can happen as a condition of bail that a person is not allowed to go anywhere near, let alone, speak to and take prerecognition from, a Crown witness. If he is not allowed legal representation, how in the world is he meant to prepare a proper defence? I hope that the Government will accept the amendment. It would not drive a coach and horses through the factors. The Minister has often said that his list of factors is not exhaustive and I believe that the amendment would improve the list.
      It has been put to me that perhaps the last part of amendment No. 27, which refers to civil proceedings that could be anticipated, goes too far and if the Government will consider the principle, I shall draw back from having it expressed so widely. However, it is a matter of considerable relevance if a person charged with, say, a DHSS fraud involving a considerable sum pleads guilty, but it turns out that the sum involved is actually much less. There are cases where a conviction for an offence carries considerable weight in subsequent civil proceedings. A person could be seriously prejudiced if a charge went through because he had not had the benefit of legal advice.
      Mr. Fairbairn: Surely a much more obvious example is the fact that under road traffic legislation a conviction can be taken as evidence in civil proceedings.
      Mr. Wallace: The hon. and learned Member anticipated my next point. Perhaps the Minister feels that the amendment would open the legal aid door too wide, but if a conviction is virtually conclusive in ensuing civil proceedings, a significant sum of damages could be awarded against a person and have as much effect on his livelihood as the provisions in the clause. It would seem only right that such a person should have the benefit of

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      legal representation. I hope that the Minister will respond more constructively to these amendments than he did to the previous group.
      Mr. Dewar: The hon. Member for Orkney and Shetland (Mr. Wallace) is an eternal optimist. I do not hold out much hope of a more positive response from the Minister.
      I sense a slight feeling in the House that the debate is outstaying its welcome and we still have to deal with the important amendment No. 36. That will take some time, so I shall not indulge in list-building with the hon. Member for Orkney and Shetland, but I cannot resist saying that if the Government's business managers had listened to suggestions that this business could have been disposed of between 7 pm and 10 pm, we might have had a more concise debate. I fear that it takes considerably longer if we start at this strange hour of the night.
      I shall not work my way laboriously through the list. All the factors come from the equality of arms stable, moving towards the principle that professional should be pitted against professional, which the Law Society endorses. Many cases are not brought to trial, but are diverted into other areas and it is said that when the procurator fiscal is on one side, there should be legal representation on the other. I do not go that far, but some factors mentioned by the hon. Member for Orkney and Shetland are valid and I hope that they are the sort of matters that could be added as necessary when individual cases are being scrutinised.
      1.15 am
      We could spend time scrutinising. I am fascinated by Amendment No. 22 which adds
      "the accused supplies with his application a detailed statement of his defence which if held true by the Court would be bound to result in the accused's acquittal".
      I do not think that we need that. It asks for more than, "It was nae me." There must be an explanation of why "it was nae me." That problem is covered by subsection (3)(e) which states:
      "the defence to be advanced by the accused does not appear to be frivolous".
      If a man explains what he was doing, he does not need a special defence but just to explain that he was not there and knows nothing about the offence. That cannot be described as a frivolous defence. It is a relevant and complete defence, if it is believed.
      Amendment No. 23 states:
      `that the nature of the defence involves the tracing and interviewing of witnesses or the expert cross examination of a Crown witness.'.
      Any case which goes to trial and is properly prepared will involve Crown witnesses. Some solicitors would argue that even when a plea of guilty is likely to be entered, the Crown witnesses should be investigated to see whether the case stands up before the client pleads guilty. The Minister might say that amendment No. 23 might allow legal aid to be given in every case. There might be problems about that.
      It is obviously unlawful to approach Crown witnesses, but I must comment on amendment No. 27, with which I sympathise. It says that
      "the conviction might involve substantial prejudice in related civil proceedings".
      To say that proceedings "could be anticipated" takes the suggestion very broadly.
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      The point is substantial. We have discussed DHSS fraud. The adjustment to a plea is often an important service to the system, not just to the accused, but to the Crown. In complicated fraud cases, and smaller cases in terms of the sums involved, establishing the figure can be of importance. Amendment No. 27 has merit and my endorsement of it will gather strength from the fact that I have not urged the Minister to take all the others as a job lot. The amendments are worthy.
      Mr. Fairbairn: Let us suppose that the Legal Aid Society is confronted by someone who says, "I didn't do it" and Crown evidence says that he did. That cannot be regarded as a frivolous defence. It is a substantial defence.
      Mr. Dewar: I tremble to ask the Minister to consider the definition of "frivolous" because I shall be told that that impinges on the proper role of the House and that he is mute on the subject.
      The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) tempted me. I imagine that he is wrong in assuming that the Legal Aid Board would have evidence from the Crown. Presumably it would have nothing from the Crown in the same way as, at the moment, a sheriff merely has the complaint in front of him and the legal aid application and anything that may be said on behalf of the application. I may be wrong because I have not been through the Committee proceedings, but it did not occur to me that the Crown would be submitting evidence or that something like the summary to the fiscal would be available to the Legal Aid Board in considering an application.
      The Minister might clarify that point. I assumed that that would not be so. Therefore, I agree that the term "frivolous" is difficult to envisage because clearly, if someone is denying the offence in the circumstances I have described by saying "I do not know anything about it. It must be mistaken identity. I was not there. I cannot give any details of the offence because I was not involved", it cannot be frivolous, whatever else it may be. It may turn out that the man is a blackhearted liar but it is certainly not a frivolous defence. If it stands up it is as good a defence as it is possible to imagine. I am not clear about the meaning of the word frivolous in subsection 3(e) or about the circumstances that are envisaged. If the Minister wishes to break the habit, I will not say of a lifetime, but of the life of the Bill, and give us some helpful information on that point I would be grateful.
      Mr. John MacKay: Amendment No. 22 would appear to suggest that the production of a detailed but obviously totally spurious statement should be a factor that might support the grant of legal aid. Yet it is perfectly possible for an accused person to have a defence which is not a frivolous one but as to which he cannot produce any detailed statement, or his defence may simply be that he did not do it.
      On amendment No. 23, which derives from one of the tests suggested by the Widgery committee for England and Wales, we share the view which was put by the Law Society of Scotland to the Royal Commission on legal services in Scotland, and which was accepted by that commission, that the formulation was not acceptable, since almost any case could be presented in such a way as to justify it. The real point which arises is dealt with in a clearer and more effective way by paragraph (b), which takes account of the

      811
      possibility of complexities of evidence being involved, whether in preparation of the case or as requiring expert cross-examination.
      Amendment No. 25 suggests that the mere fact that the accused is charged in a special capacity should necessarily be a factor supporting the grant of legal aid. I accept that in some cases such a special capacity will complicate matters, but that will not by any means always be the case. Where it is, the board will certainly be able to take account of it. Again, paragraph (b) will point it in that direction.
      I have similar objections to amendments Nos. 26 and 27. Each refers to matters which, it is argued, could in particular circumstances be relevant to the board's consideration of the interests of justice. However, they are imprecise and are not of general application. For example, how is the board to judge that it is "inappropriate" for the accused to precognosce a Crown witness or know whether related civil proceedings are likely? It is true that the facts on which someone is convicted on a criminal charge could involve civil consequences which may be quite serious. For example, it could lay someone open for an action for damages. However, the civil consequences may be quite trivial in relation to the criminal charge. In such cases the decision should, in general terms, primarily depend on the criminal charge, not on the civil consequences. The difficulty with amendment No. 27 is that although it refers to substantial prejudice in civil proceedings, it makes no mention of whether the civil proceedings are of comparative importance in themselves or in relation to the criminal charge. Therefore, it seems better to leave the board to take into account any civil proceedings, if relevant, together with anything else that is relevant.
      I again emphasise that the list of factors is not exclusive. The board's duty is to decide whether the grant of legal aid will be in the interests of justice, and in doing so it will take all these matters into account in so far as they are relevant.
      Amendment No. 21 proposes that the fact that the accused has been remanded in custody pending trial should be a factor taken into account by the board in determining whether the interests of justice criterion is met. This would clearly be an important consideration for the board, whether it is specified on the face of the Bill or not. I was trying to show the hon. Member for Orkney and Shetland (Mr. Wallace) that if he speeded up he might hear some good news because, on that basis, there is something to be said for spelling it out and I accept amendment No. 21 but not, I regret to say, the rest.
      Mr. Wallace: I tried to tell the Minister that such a response would have the effect of shortening my remarks. I am grateful to him for accepting amendment No. 21. I heard what he said about the other amendments, and I accept that in some instances paragraph (b) is sufficient. I regret the hon. Gentleman's attitude to amendments Nos. 26 and 27, but he has suggested that if the degree of importance of the civil proceedings was spelt out there could be an addition at a later date.
      Amendment agreed to.
      Amendment made: No. 28, in page 17, leave out lines 18 and 19.— [Mr. John MacKay.]
      Mr. Wallace: I beg to move amendment No. 32, in page 17, line 21, leave out from 'Section' to end of line 23 and insert
      'amend the list of circumstances in subsection (3) by adding new circumstances to the list'.
      Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 33, in page 17, line 21, leave out from 'above' to end of line 23 and insert
      'by adding new factors to the list'.
      Government amendment No. 34.
      Mr. Wallace: The amendment is directed to the final part of clause 24(4). As things stand, the Secretary of State could delete any of the factors by regulation. In other words, he could use secondary legislation to delete primary legislation. The Government's amendment would remove the offending words about deletion but would still allow the Secretary of State to amend any of the factors set out in subsection (3).
      The purpose of the amendment and amendment No. 33, which stands in the names of the hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Glasgow, Cathcart (Mr. Maxton), is to limit any variation to addition. To allow the Secretary of State to amend or add leaves it open to possibility that he could amend existing provisions out of recognition, or even insert would what could amount to a negative provision. Allowing the Secretary of State to amend only by means of adding would ensure the integrity of the primary legislation.
      Mr. Dewar: The hon. Member for Orkney and Shetland (Mr. Wallace) has said that the Opposition's amendment, No. 33, strikes at the same point as the Liberal amendment. The arguments are similar. The Law Society of Scotland took the view—I paraphrase— that clause 24 contained within it the seeds of its own destruction. It was referring to the apparent possibility of primary legislation being changed by regulation. The Government's amendment does something to help by removing the possibility of subtracting one of the factors in clause 24(3). We want to go a little further by stopping the possibility of variation which may be so radical as to destroy. It is a simple issue which has been outlined succinctly by the hon. Member for Orkney and Shetland and I am prepared to leave the matter on that basis and listen to what the Minister has to say.
      Mr. John MacKay: Government amendment No. 34, like amendments Nos. 33 and 34, is designed to meet the fear that was expressed in Committee that a power to the Secretary of State to delete factors might lead to the deletion of them all. My amendment would provide for existing factors to be amended or new ones to be added, whereas the other two amendments would confine the power to the addition of new factors alone.
      It is essential that there should be the necessary flexibility to amend the present list. Changes may be required to take account of changes in criminal procedure or practice which mean that the wording of a factor is no longer apt, or it may be that the wording of one factor proves to be ambiguous in some unenvisaged way. Amendments Nos. 33 and 34 seem to assume that any new factors will be completely separate and free-standing. It is surely possible, however, that there will be an overlap between a new factor and an old one, so as to require consequential amendment of the existing factor. Indeed, the number of amendments tabled this evening to the factors in the Bill would seem to support the desirability of a power to amend. Any amendment would, of course, be made by regulations subject to affirmative resolution, and would therefore require the positive approval of both Houses. I therefore recommend amendment No. 34, which I believe meets the concerns which were expressed.
      Mr. Wallace: There is not much that can be added to what I have said.
      Amendment negatived.
      1.30 am
      Mr. John MacKay: I beg to move amendment No. 36, in page 17, line 23, at end insert—
      '(6) Where a person who is being prosecuted under summary procedure is not represented by a solicitor or counsel and has either—

      (a) not applied for criminal legal aid in connection with the proceedings; or

      (b) applied for criminal legal aid but been refused it on the grounds that it is not in the interests of justice,

      the court at the trial diet may, if it considers that owing to the exceptional circumstances of the case it would be inequitable to proceed with the trial without such representation and without legal aid being made available to him, adjourn the diet to enable an application for legal aid to be made to the Board which shall consider the application expeditiously.
      (7) Where the trial of an accused person is adjourned as is mentioned in subsection (6) above, and he has made an application to the Board, criminal legal aid shall be available to him until his application is determined by the Board.
      (8) Where any person to whom criminal legal aid has been made available in pursuance of subsection (7) above has his application for criminal legal aid under subsection (6) above refused by the Board on the ground that it is satisfied that subsection (1)(a) above does not apply in his case, the Board may require him to pay to the Fund the whole or part of the amount of any sums paid out of the Fund under section 4(2) (a) of this Act in respect of the criminal legal aid so made available.'.
      Mr. Deputy Speaker: With this we may also consider amendments to the proposed amendment: (a) in subsection (6) at end insert
      'or alternatively, if it is in the interests of justice that the trial should proceed, grant legal aid forthwith'.
      (b), leave out subsection (8).
      (c), in subsection 8, at end add
      'but in deciding what if any payment should be made the Board must have regard to the circumstances of the applicant and his ability to pay.'.
      Mr. MacKay: This amendment fulfils an undertaking that I gave in Committee on 1 July to provide for the exceptional case, where a person who is not legally represented in summary proceedings appears for trial and the court concludes he should be represented—either in his own interests or in the interests of someone else, such as a child witness. Under subsection (6), the court is enabled to adjourn the trial to allow the accused to apply for legal aid — or re-apply if he had previously been refused under the interests of justice criterion. The board is obliged to handle the application expeditiously and we would envisage that it could be dealt with in a couple of days. As I said in Committee, we would not wish to give a court a general power to overrule decisions by the board—or substitute itself for the board—since this could reintroduce the present inconsistencies between courts in the award of legal aid — at least for some types of cases. Reference of the case from the court to the board avoids this difficulty. Where legal aid had been refused by the board earlier, the court would in effect be asking the board to review the case in the light of the court's expressed view that legal aid should be available. However, subsection (7) also provides that automatic legal aid will be available from the date of application until the application is determined, so legal aid will be available to cover the preparation of the defence. Subsection (7) could also be
      814
      used to ensure that the accused was legally represented if, very exceptionally, the court decided that the trial had to proceed more or less immediately—perhaps because it was undesirable or difficult to recall witnesses for a later diet. Subsection (8) provides for the situation where the board refuses an application on grounds of financial eligibility. As the legal costs will have to be paid by the board under the automatic provisions of subsection (7), it is only right that the board should have power to recover those costs from an accused who is able to afford to meet them himself.
      I cannot recommend amendment (a), as this would in effect give the court power to award legal aid in all cases where it considered the trial should proceed. This would, on my understanding, be contrary to the wishes of bodies representative of the courts who no longer want to be involved in the actual award of legal aid and in the determination of interests of justice. My amendment makes legal aid available in the exceptional cases where the court considers legal representation necessary. It reduces to a minimum the disruption of court business, and preserves the essential principle of the new system that all applications for legal aid in summary criminal cases should be dealt with by the board for the sake of maximum consistency. I appreciate the reasons for amendments (b) and (c), but I cannot commend them to the House.
      Clearly we would not wish legal aid to be given to someone who can pay for his defence. This is the reason and the need for subsection (8), which in general should come into play only when the accused has not applied for legal aid. Where he has previously applied the board will normally have considered his financial circumstances and whether the expenses of the case can be met without undue hardship to him or his dependants.
      When the board considers an application referred to it under subsection (6), it will, as with other applications, have regard to the financial circumstances of the accused and as indeed subsection (8) states, require payment only where it is not satisfied that the expenses of the case cannot be met without undue hardship to the accused or his dependants.
      The amendment in my name clearly and adequately fulfils the undertakings that I gave. It achieves what many people want, as it creates a fallback position which the courts can exercise, but it preserves the board's right to decide finally on the granting of legal aid. I commend the amendment to the House.
      Mr. Dewar: I genuinely regret that we come to this matter at 1.30 in the morning. We would normally have a lengthy debate on such a matter and that would be the correct way to proceed. There has been a long and well-argued campaign on the question whether the courts should have a residuary power to grant legal aid. I am now conscious of the fact that the debate will have to be telescoped into a few minutes. That is not good for the process of law reform in Scotland or for the legislative process.
      The Minister said very briskly and definitively that the amendment that he has tabled meets the promise that he gave in Committee. He knows that that arguably is not the case. I do not wish to weary my colleagues but the matter is clearly dealt with in columns 275 to 277 of the Committee proceedings. The Minister said, whimsically, that there had been some disagreement on the matter during the previous sitting,

      815
      "so I took the opportunity offered by the lovely weather in my constituency over the weekend to sit and contemplate these questions. Some may think that a dangerous occupation, but I succeeded, and in between I attacked the odd weed."
      That is a rather ungracious way of referring to his colleagues. He continued:
      "Mostly, I sat and thought."
      On this occasion, the Minister's thought was fairly productive, because he went on to say:
      "It has been put to me, and I entirely appreciate, that there may be circumstances in which it is desirable that the trial should proceed more or less immediately. For example, if very young or old witnesses have been called, the court may decide that, whatever else may be involved, it is not in the interests of these young witnesses that they be stood down until another day. In such circumstances we would propose that it should he possible to apply for legal aid on the spot —possibly by giving the application to the Clerk of Court, automatic legal aid would be immediately available and the trial could proceed." — [Official Report, First Scottish Standing Committee; 1 July 1986, c. 275–77.]
      To a layman, that would suggest that the Minister was in complete agreement with what I am trying to achieve: that in unusual circumstances, where the sheriff is satisfied that the matter should proceed, the court should have power to grant legal aid. The clerk of court shall receive the application, legal aid shall be granted and the court will proceed with the trial. That was the scenario specifically stated by the Minister. It is not what appears in the amendment, and he is being a little disingenuous—I put it no higher than that, because I am sure that no malice is involved—when he says triumphantly that he has fulfilled the obligation that he gave to the Committee in this amendment.
      The Minister should not have departed from what he appeared to say in Committee. The compromise that he has produced is clumsy and unsatisfactory. It is common ground between us that, in some circumstances, it will be proper and necessary for the trial to proceed. It is merely an argument over how to meet those circumstances. It is not just a question of trial witnesses. Witnesses may have come from abroad—perhaps from very far away—and cannot be sent away and brought back other than at enormous inconvenience and public expense. It may be a case of the witnesses being assembled in the court and the solicitor for the defence being ready to proceed and familiar with the case. There is an argument for allowing the matter to proceed rather than to adjourn the case and resubmit or submit for the first time an application to the Scottish Legal Aid Board.
      The Minister said—I gathered that this would be his position — that that objective can be achieved, because the court can adjourn for an hour, half an hour or even a notional 10 minutes, and that the trial can proceed on the basis that the Legal Aid Board will ultimately consider the application and grant or refuse legal aid. That is an artificial way of meeting the difficulty.
      I do riot deny that the circumstances should be exceptional. After all, we have trusted the courts in the past to be responsible about acting only in narrow confines of special circumstances. I have in mind the residual power in the Bail Act to set money bail, which has not been abused by the courts. There is no reason to believe that sheriffs would abuse a residual power if it was left to them. It is better to do it in that open and above-board way than to do it by straining the meaning of the amendment, which adds this new procedure to clause 24.
      816
      There may be some difficulties—I shall not canvass them at length, but I cannot resist mentioning it—about what constitutes an adjournment. I have not done much research into it, but someone drew my attention to Stroud's Judicial Dictionary, a publication with which I am not familiar—
      Mr. Fairbairn: Oh!
      Mr. Dewar: It may shock and horrify the hon. and learned Gentleman, but I assure him that Stroud's Judicial Dictionary is not upon the desk of every jobbing solicitor in the west of Scotland. Perhaps it should be. I give him that insight into the real life of the legal profession.
      I went to Stroud to discover what an adjournment was. I came across the first and hopeful sentence — 1Interruptionl I cannot engage in this badinage. Let me give just a suspicion of the argument:
      "The word 'adjourn' must be construed with reference to the object of the context, and with reference to the object of the enquiry."
      Hon. Members: Hear, hear.
      Mr. Dewar: I thought that that would be considered broadly helpful by the House. The paragraph went on in an equally lucid and helpful fashion.
      I concede that I then went to the fifth edition of Renton and Brown, a work with which I am not familiar, but I remember it at least. I thought that I was on to a good thing because I found in paragraph 10.12:
      "Every trial must proceed from day to day until concluded, unless the court sees cause to adjourn over a day or days."
      A footnote on the following page says:
      "Trials no longer proceed uninterruptedly, but arc adjourned overnight and over weekends as necessary."
      That is an extremely good point. It suggests that short adjournments may not be competent, but I concede to the House that if one reads paragraph 10.13, it becomes clear that one can adjourn for short periods for lunch or almost any other reason that the court gets into its mind. It seems to be wide. Perhaps the Minister is right in saying that a half-hour adjournment might be possible before starting the trial, thus getting within the ambit of the amendment that he has tabled. However, it seems to be a forced and unlikely way of achieving that. Paragraph 10.14 of Renton and Brown says that
      "An adjournment at the trial diet ought always to be avoided, if possible. Serious expense and inconvenience may be caused to jurors and witnesses, and there is always the danger of losing valuable evidence in consequence of the delay."
      Perhaps that would not happen if there were a short adjournment, but the general message is valid. I do not like the artificial way in which the matter is being managed. The Government have seen a difficulty, and apparently have recognised it, but they are trying to meet it by stretching subsections (6) and (7), which is adding to clause 24 in a way that I do not think does anyone much credit.
      The Minister says cheerfully that he is giving an important new power in his amendment. I ask him seriously to answer this question. Is it not true that the power to adjourn in that way would have been open to the court anyway? The statutory power that he is giving is adding nothing to the range of options open to the court. It could have adjourned to give a chance for a legal aid application to be submitted in any event if it wanted. It would have been valuable to give the residuary power to the court. That would have met the narrow range of circumstances that we have been discussing.

      817
      It is a shame that the Minister has not taken a more open attitude. I notice that the Law Society has described his amendment as
      "very disappointing and indeed seriously defective."
      I do not expect the Minister to take the Law Society's point of view. Obviously, he has to strike a balance between his advisers and those who advise him from outside the House, but it is interesting to remember that before the amendment had been produced, the Law Society was saying in an earlier memorandum after the Committee stage:
      "In particular, we are grateful to the Government for agreeing to the principle of a residual right being given to Sheriffs and Magistrates to grant legal aid in exceptional cases. As at the time of writing this memorandum we have not had sight of the actual Government amendment, we are grateful to the Government for the acceptance of this very important principle."
      Of course, the Law Society had been reading the Committee proceedings, which I quoted. Understandably, it has been very disappointed by what the Minister has produced, because it is a departure from what he apparently promised. I repeat that point. The Minister is not doing himself justice in this matter. I do not see the danger of giving that residual power—it would be a much more sensible and logical way in which to meet the difficulty that everyone accepts may arise. I do not want to build any hopes on a positive response. The Minister has already said that he does not favour amendment (a), but it is simple, effective and available. I should have thought that he would have considered it favourably.
      The Minister made it perfectly clear that he wanted nothing to do with amendments (b) or (c). I quite understand his argument, although I do not accept it, concerning amendment (b), which would leave out subsection (8). I have some doubts about importing into the legal aid system in Scotland a recovery of costs. I recognise that it is a special circumstance in which someone has gone ahead with a trial and been refused legal aid on the ground of means, but that is still a breach of an important principle that we do not have a contributory legal aid system for criminal legal aid. I am not sure that the Minister is wise to breach it in this way. If he had accepted amendment (a) he would have done much to mitigate that risk, because if he had allowed the sheriff to make a decision on whether legal aid should be granted, he could inquire into the accused's means and we would not have been in this position. That is a reasonable argument for the amendment.
      If the Minister is against me on amendment (b), I do not see why he should not look more sympathetically upon the modest amendment (c), which proposes:
      "in deciding what if any payment should be made the Board must have regard to the circumstances of the applicant and his ability to pay".
      I should like to give an example of what might happen. A young man, who has not applied for legal aid, comes to trial, and it becomes evident for a variety of reasons that we could suppose that he ought to have applied for legal aid, but the sheriff wants the trial to proceed because of wider interests. He says that the young man should apply, and the preparation for the trial goes ahead while the legal aid application is being considered. It might be rejected for means. The accused will suddenly discover that, even if he is aquitted, he might very well be faced with a bill of £400
      818
      or £500, which it is proposed to claw back from him on the grounds that he was not awarded legal aid because of his means.
      1.45 am
      Means are a very difficult concept. I know—I have no reason to believe that it would be different under the Scottish Legal Aid Board — that there are people deciding legal aid who may take the view that someone who lives on benefit, but at home with his parents, has sufficient means, if he saves hard, to afford his defence. Very real hardship could be involved. To guard against that, it is no bad thing to write into the Bill the proviso that payment should be asked for only after having had regard to the person's ability to pay and his circumstances. That is not committing us to anything very dearly, but it might guard against the type of hardship that I have outlined.
      The Minister has shown a willingness, perhaps on a rather random basis, to take one of a selection of amendments offered to him. I would prefer him to take amendment (a), which is a key and by far the most important of the group. If he is not minded to do that, I do not think that it is unreasonable to ask him to consider amendment (c) in a reasonably positive way, especially as it would apply only in the type of circumstances I have outlined.
      I hope that I have advanced my arguments at not too wearisome length. This is an important matter and Government amendment No. 36 is an important importation at a late stage. I only regret that I have had to detain the House at such an unearthly hour of the morning, but I do not apologise for that.
      Mr. Fairbairn: I assure the Minister that, if I had thought that he would produce an amendment such as this, I should have regarded it as in complete contradiction to what he said to the Committee, for he told the Committee that he would give a residual power to the court to grant legal aid in circumstances exceptional, not to have a second bite at the cherry, not to provide another way around a refusal but when it was just to do that. This amendment does nothing whatever of that kind. It involves a system that is incomprehensible and absurd. First, if it occurs to a court that a person should be granted legal aid, for any of the reasons adumbrated in Committee — that the person should have applied, that difficult matters arise, that witnesses cannot understand the language, it matters not — are we seriously suggesting that the sheriffs and magistrates of Scotland should be less trusted than the unknown officials of the new legal aid board? What superior criteria will be applied by the board that will not be applied by the courts?
      Let us be clear about what will happen, if that is possible. If a person has not applied for legal aid, or he applied and it was refused,
      "the court at the trial diet may, if it considers that owing to the exceptional circumstances of the case it would be inequitable to proceed with the trial without such representation and without legal aid being made available to him, adjourn the diet to enable an application for legal aid to he made to the Board which shall consider the application expeditiously."
      Let us think about what will happen. Let us suppose that little John Smith is being tried for hooliganism at a football match and it is discovered that the charge is defective, that he cannot speak, that he does not understand or that he has witnesses whom he has not called who can demonstrate his innocence. Let us also

      819
      suppose that the sheriff takes the view that it would be in the interests of justice that he should exceptionally have legal aid. If the sheriff adjourns, what does John Smith do? Does he telephone the legal aid board and say, "The sheriff has just told me that I should have applied for legal aid. I wanted to do this expeditiously so I am ringing up to ask you if you will give me legal aid." The reply will probably be, "Why? Who am I speaking to?"
      The whole thing is absurd. The courts should be able to grant it as a residual power. But instead of a residual power, the amendment is an absurd second best. I do not comprehend how this unfortunate, unrepresented person will activate the mind of the sheriff to ensure that the Legal Aid Board expeditiously grants, or considers an application for, legal aid.
      The amendment also states that:
      "criminal legal aid shall he available to him until his application is determined by the Board."
      What does that mean? Subsection (7) also states:
      "Where the trial … is adjourned … and he has made an application to the Board".
      Therefore, the person has to make an application. How will he do so? By telephone from Glasgow sheriff court? Will he say, "The sheriff tells me I should have been legally aided because I cannot speak English properly"?
      This is an absurd misunderstanding of the promise given by the Minister, which was that in the circumstances the court could say that it is right that legal aid should be granted. This amendment is not an answer to what the Minister said. It allows the court to hold up proceedings while the applicant, unaided, attempts to contact the board.
      I do not understand the procedure or mechanism. It would at least be sensible to accept amendment (a). If that is not accepted, the complicated procedure that the Minister is introducing will not solve the problem, and in no way does it answer the promise that he gave us. It merely makes a complicated, expensive and impossible mess of a simple position in which a court may say to itself, "I wish to be aided by having the person before me represented." That is essentially what the matter is about. I ask the Minister to consider that because his amendment is nonsense, its process is unworkable and it does nothing for justice. It does not give a court the residual right to grant legal aid. The purpose of the Bill is to avoid expense, but I cannot imagine a more complicated way of adding to it.
      Mr. Gordon Wilson: Again, I agree with the hon. and learned Member for Perth and Kinross (Mr. Fairbairn). I do not understand why the Government have made this mistake. I cannot imagine how one could come across a more convoluted, awkward, absurd solution. The residual right of the courts to grant legal aid would be the simplest, most effective way of dealing with the position. It beggars the imagination that the Government have gone to all this difficulty in concocting an amendment which is nonsense.
      If legal aid is granted under the Government's amendment, it will effectively guarantee the fees of the solicitor or counsel, but there will be no guarantee to the accused. He must accept the lottery until the application is decided by the court that legal aid may be provided, if the trial proceeds and if the court finds it necessary to recommend that legal aid should be granted. It may do so, not necessarily to help the accused, but because of the need to protect child witnesses and to ensure that things are done properly and decorously, and that justice also applies
      820
      to them. An accused person who is granted legal aid in those circumstances has no guarantee that the expenses will be paid. It is remarkably unsatisfactory.
      Why are the Government seemingly not prepared to trust our courts to administer properly? The Minister says that he has told us that the people connected with the courts are not keen to accept the burden. I do not care tuppence whether they are keen to accept the burden. If it is in the interests of justice that they should be given that burden, let them carry it out. If that obligation is placed on them, I trust them to do it with the delicacy one would expect of them in the circumstances.
      The Minister has come up with a dog's breakfast. I do not know why he has gone to such efforts to avoid the simple solution to deal with the exceptional circumstance. [Interruption.] The Solicitor-General for Scotland mutters on the sidelines. I would have thought that he might be able to give better advice to the Minister.
      Mr. Wallace: Perhaps I may be permitted to a limited extent to come to the Minister's assistance. What he has come up with is much in line with what he said in Committee, which was why I was not as overjoyed as other members of the Committee seemed to be when he made it clear that the board should consider the application, although the sheriff or magistrate felt that it was in the interests of justice that legal aid should be granted. That is why I was not quite as excited by the part concession as some hon. Members were, and why I do not find what has been proposed this morning, while it is in line with what the Minister has suggested, is what I wish to see.
      2 am
      I say that as someone who has in general welcomed the role that sheriffs and magistrates have played up to now in determining whether criminal legal aid should be given, or, in some cases, taken away. However, there are inconsistencies between one sheriff court and another, and some of them are quite glaring, and were mentioned in the Committee. Another problem will be appreciated by hon. Members who have constituencies where there is only one sherfiff presiding in the sheriff's court, and he, invevitably, has to determine the legal aid application, and later the case.
      The general rule for transferring these applications to the board is a good one. Nevertheless, there will still remain cases — no doubt rare ones — where in the circumstances that the sheriff or magistrate has to face, he believes that the interests of justice and the way that the case is conducted means that legal aid should be granted. The amendment of the hon. Member for Glasgow, Garscadden (Mr. Dewar) talks about the "interests of justice", not solely about the interests of the accused. It may be in the interests of a child witness. The Government's proposal for a contrivance that is intended to operate in a way that one can get on with the trial, and the application for legal aid can go to the board later, is a second best option.
      The double condition that has to be fulfilled before criminal legal aid will be made available is even worse. There is not only the danger of the trial being adjourned, but, as the hon. and learned Member for Perth and Kinross pointed out, the problem that the accused has also to make application to the board. Both conditions must be fulfilled before legal aid can be made available. The position would be improved by letting the matter rest solely on the adjournment of the trial, so that a lawyer

      821
      could be appointed to assist and make an application. That is not what it says here—perhaps it is not what the Minister intended.
      The Bill is not satisfactory to meet the special conditions that have been envisaged. I hope that the Minister will be prepared to listen to what has been said, and look at it with some sympathy.
      Mr. John MacKay: I apologise to the hon. Member for Glasgow, Garscadden (Mr. Dewar) for not dealing with amendment (c) but I do not consider it necessary, in so far as there is already a requirement on the board to take financial circumstances into account. In any case, the board would be considering whether to exercise its powers under subsection (8), which is a power only to take into account the individual's ability to pay. I do not think that a specific provision on the face of the Bill is needed to achieve it.
      The Shorter Oxford dictionary defines adjournment as to "defer", or "put off". I am advised that there is no authority for the proposition that in the context of court proceedings, adjournment means only to put off to another day. There is English authority to the effect that it is the popular, as opposed to the technical, meaning of adjournment, which imports a requirement to put off to another day.
      It is difficult to imagine a situation in which a case can proceed without enabling the solicitor to take instruction. I have read carefully what I said to the Committee. I can tell my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) that having done so, I believe that the amendment honours the commitment that I made. It preserves the position of the board, and gives an important safeguard to anyone who ends up in a court. If the sheriff or the justice, looking down from the bench, sees that something is amiss and that a person ought to be represented, this is a procedure and mechanism by which—
      Mr. Fairbairn: Will my hon. Friend give way?
      Mr. MacKay: I am about to conclude, but I shall give way.
      Mr. Fairbairn: I am grateful to my hon. Friend. Will he tell me what the mechanism is? It says:
      "Where the trial of an accused person is adjourned"—
      assuming that it is competent in summary proceedings—
      "as is mentioned in subsection (6) above, and he has made an application to the Board".
      What does my hon. Friend imagine will happen? What does a 14-year-old boy do? Does he ring up the board? It has to be done expeditiously. What happens if he is not represented?
      Mr. MacKay: My hon. and learned Friend was much more charitable when he heard me explain the matter in Committee. If he looks at column 277 he will see that I said:
      "In such circumstances, we would propose that it should be possible to apply for legal aid on the spot—possibly by giving the application to the Clerk of Court, automatic legal aid would be immediately available and the trial could proceed." — [Official Report, First Scottish Standing Committee, I July 1986; c. 277.]
      822
      That is a sensible way of dealing with very special circumstances. As they will be very special and will not happen often, the procedure I have set out in my amendment will do what we all wish it to do.
      Mr. Dewar: I am disappointed by the Minister's reply, although I am not surprised by it. We are looking at a man who has made up his mind, or who has had his mind made up for him; I am not quite sure which.
      I am puzzled. It would have been much neater and saner and much more sensible to trust the courts, with their residual powers. No one has suggested that their powers are other than residual. That is why amendment (a) was drafted as it was: to make it clear that we were not trying to open the equivalent of a legal floodgate and that we were not inviting the courts on a daily basis to grant legal aid in an effort to circumvent the powers of the Scottish Legal Aid Board.
      If the Minister is right in saying that the courts do not wish to be involved in legal aid, there is little danger of the power being abused. He was contradicted to some extent by his own argument on that point. However, the Minister is clearly determined that there shall be no breach of the general rule that the courts shall not be involved in the granting of legal aid. I find that strange. In solemn procedure the courts will be the principal grantors of legal aid.
      In both the summary and the solemn procedure the courts will have the important residual power to decide on certification under the relevant section. The courts will also have the power to grant legal aid applications for findings of fact under the children's hearings system. The courts will be involved in a large area, and I do not think that it would have been dangerous to trust them with the residual power that we envisage. A mistake is being made. The system is being made to look a little silly. Interpretations and expectations that cannot be justified are being built upon this form of words.
      The Minister did not deal with my specific point about whether the power to adjourn of the kind that is envisaged in his amendment already exists. I believe that it already exists. I am advised by those who are more skilled than I in these matters that that is the position. The Minister has been left with something of a nonsense, and he is asking that nonsense to deal with a problem with which it is incapable of dealing.
      It is disappointing. I do not intend to withdraw amendment (a). I am not sure that I moved it formally. I do not know whether I have to do so, but if I have to move it formally I do so now. I have no intention of withdrawing it at this stage.
      Amendment to the amendment negatived.
      Amendment made:
      No. 36, in page 17, line 23, at end insert—
      '(6) Where a person who is being prosecuted under summary procedure is not represented by a solicitor or counsel and has either—

      (a) not applied for criminal legal aid in connection with the proceedings; or

      (b) applied for criminal legal aid but been refused it on the grounds that it is not in the interests of justice,

      the court at the trial diet may, if it considers that owing to the exceptional circumstances of the case it would be inequitable to proceed with the trial without such representation and without legal aid being made available to him, adjourn the diet to enable an application for legal aid to be made to the Board which shall consider the application expeditiously.

      823
      (7) Where the trial of an accused person is adjourned as is mentioned in subsection (6) above, and he has made an application to the Board, criminal legal aid shall be available to him until his application is determined by the Board.
      (8) Where any person to whom criminal legal aid has been made available in pursuance of subsection (7) above has his application for criminal legal aid under subsection (6) above refused by the Board on the ground that it is satisfied that subsection (1)(a) above does not apply in his case, the Board may require him to pay to the Fund the whole or part of the amount of any sums paid out of the Fund under section 4(2)(a) of this Act in respect of the criminal legal aid so made available.'.—[Mr. John MacKay.]

    Clause 37
      PARLIAMENTARY PROCEDURE
      Amendment made: No. 37, in page 28, line 17, after 'section', insert '7,'.—[Mr. John MacKay.]
    Schedule 3

      MINOR AND CONSEQUENTIAL AMENDMENTS
      Mr. John MacKay: I beg to move amendment No. 41, in page 40, line 37 at end insert—
      'The Tenants' Rights, Etc. (Scotland) Act 1980 (c. 52)
      In section 9B(4) of the Tenants Rights, Etc. (Scotland) Act 1980 for the words "Legal Aid and Advice (Scotland) Acts 1967 anti 1972 and to any provision of those Acts for payment of any sum into the legal aid fund" there shall be substituted the words "Legal Aid (Scotland) Act 1986 and to any provision of that Act for payment of any sum into the Scottish Legal Aid Fund".'.
      The amendment updates a reference to the existing legal aid legislation in the Tenants' Rights, Etc. (Scotland) Act 1980, which has been inserted by the Housing (Scotland) Bill.
      Amendment agreed to.
      Order for Third Reading read.
      Queen's consent signified—
      Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. John MacKay.]
      2.12 am
      Mr. Deputy Speaker: Mr. Douglas Fairbanks.
      Mr. Fairbairn: I shall do my best to put on a reasonable performance.
      I welcome some of the improvements that have been made to the Bill, but I deplore other alterations, such as the recent one. At this late hour, I should like to raise briefly one matter. The concept of fair and reasonable remuneration for work done was not considered necessary by the Government. They thought it inevitable that a fair and reasonable reward would be given. If that is so, and if the courts are not to be trusted with a penny of public money in order to grant legal aid to someone in exceptional circumstances who is on a summary criminal charge, the Government have a great opportunity to abolish the Act of Adjournal which requires that the moment that a criminal has happily departed from the dock by the front gate or back door—depending on the capacity of those who defended him or on the "interests of justice", as the Minister would obliquely state, without understanding what they are— the unfortunate instructing solicitor should be moved into the dock.
      Counsel then has to represent the unfortunate instructing solicitor before the public in court, under the
      824
      Act of Adjournal, to see whether he measured up to his ex-client's standards. Counsel has to represent the case that his work was, or was not, difficult, exceptional and lengthy, and say whether this or that is a fair or reasonable charge. Now that the Government have deleted the concept of fair and reasonable being a necessary qualification we should also delete the obscenity that counsel has to appear on behalf of the solicitor, or the solicitor has to appear on his own behalf, as if he was the accused.
      I therefore hope that the Government will take this opportunity to remove a blot from our system. It is a scar on the solicitor's probity, and we could do without it. The solicitor should be paid according to his work. If these incompetent judges of ours cannot grant legal aid to a little boy, I do not see how they can sit in judgment on whether a solicitor is entitled to payment. The Government should be able to say that they are interested in fair and reasonable remuneration. We are interested that the courts are incompetent to deal with remuneration of any kind or the disbursement of public funds. Therefore, we shall get rid of this abominable situation for ever.
      I have to thank the Minister for occasionally being graceful. I regret that his track record deteriorated as the night went on.
      Question put and agreed to.
      Bill accordingly read the Third time and passed, with amendments.

STATUTORY INSTRUMENTS, &c.

  WEIGHTS AND MEASURES
  Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committee on Statutory Instruments, &c.).
  That the draft Weights and Measures Act 1963 (Miscellaneous Foods) (Amendment) Order 1986, which was laid before this House on 30th June, be approved—[Mr. Archie Hamilton.]
  Question agreed to.

BUSINESS OF THE HOUSE
Motion made, and Question proposed,
That Standing Order No. 6 (Arrangement of public business) shall have effect for this Session with the following modifications, namely, in paragraph (2)(b) the words 'not more than two' shall be substituted for the word 'one' in line 20 and the word 'four' shall be substituted for the word 'two' in line 22.—[Mr. Archie Hamilton.]
2.12 am
Mr. Simon Hughes: On a point of order, Mr. Deputy Speaker. Earlier this evening I thought it wise to look to see what the import of the motion was and I went to the Table to obtain a copy of the Standing Orders as they relate to public business. I was surprised and disappointed to discover, having looked at the Standing Orders and some odd sheets of paper that were included in them, that the Standing Orders are not up to date. They do not take into account the amendments passed by the House, which the Vote Office was kind enough to supply me.
About half an hour later I happened to be in the Library and, quite by chance, near where I was looking for a book, I found the Library copy of the Standing Orders, and again found that they did not include the up-to-date amendments. I should be grateful—I hope that it does

825
not affect other hon. Members now — if you, Mr. Deputy Speaker, would ensure, through the appropriate channels, that the copies of the Standing Orders of the House, which may be needed by hon. Members at short notice, are up to date at all material times, and that in other parts of the House, to which hon. Members and others have access, we again have up-to-date bound copies and do not have to rely on an insert being available somewhere or not being available at all?
Mr. Deputy Speaker (Mr. Ernest Armstrong): I shall take note of that and see that appropriate action is taken.
Question put and agreed to.

BUSINESS OF THE HOUSE
Motion made, and Question proposed.
That, at the sitting on Wednesday 16th July, the Motion in the name of Mr. John Biffen relating to Office, Secretarial and Research Allowance may be proceeded with, though opposed, until half-past Eleven o'clock or for one and a half hours after it has been entered upon, whichever is the later, and if proceedings thereon have not been disposed of by that hour Mr. Speaker shall put the Question on any Amendment which may have been moved, and shall then put forthwith the Question on any other Amendments selected by him which may then be moved, and on the Main Question or the Main Question, as amended.—[Mr. Archie Hamilton.]
2.13 am
Mr. Simon Hughes: On a point of order, Mr. Deputy Speaker. It does not appear that this matter has to be decided forthwith, and I seek your guidance on whether that is the case.
Mr. Deputy Speaker (Mr. Ernest Armstrong): If there is any opposition to the motion, we cannot take it.
Mr. Hughes: It is not so much opposition as a point on the motion, which I understand is debatable.
Mr. Deputy Speaker: It cannot be taken now, if opposed.
Mr. Hughes: In which case, I oppose it.
Mr. Deputy Speaker: Objection taken.

Residential Homes (Borders Region)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
2.18 am
Mr. Archy Kirkwood: I rise under Standing Order No. 1 to raise the subject of cuts in capital provision for residential homes in the Borders region. At this late hour, my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and myself wish to detain the House to discuss this important subject which affects the local authorities in our respective and joined constituencies.
Local authorities such as the Borders regional council require Scottish Office approval before incurring liability for capital expenditure. That system of financial planning has been in operation since 1977 and under that scheme local authorities submit, as no doubt the House knows, five-year capital plans for approval. Allocations under the scheme are usually sanctioned each January and at that time provisional allocations are issued to cover the two following years.
I understand that a limited flexibility is built into that system, which has been in operation since 1977. For example, I am aware that councils may carry forward up to 10 per cent. of capital allocation underspent in any given year. I understand, too, that they can always realise assets that they own, or vary programmes within their overall capital allocation by up to a factor of 10 per cent. That system is well known and understood by councillors and officials in the Borders region.
The principal complaint of my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale and myself—and our main reason for raising the subject—is that earlier this year the Government, unilaterally and without warning, cut the Borders region's capital allocation under the social work heading for 1986–87 from £550,000 to £350,000—a reduction of about 36 per cent. To date, the Government have refused to reconsider that decision.
Of course, we understand that provisional allocations are sometimes varied—they are usually varied upwards —but the Minister must agree that 36 per cent. is an unusual if not unprecedented cut in a capital allocation.
The Borders regional council, operating under the assumption that £550,000 of capital would be at its disposal in the current fiscal year, set out a programme stretching over a number of years and totalling £3·3 million to replace four outdated homes for the elderly. The phasing of that programme deliberately sought to take full account of the Government's financial constraints. The council's plans set out to replace the existing Victorian mansions, which we all realise are unsuitable as modern residential accommodation for elderly people, one at a time—not one every year or anything more ambitious. A proposal to replace them at a faster rate could easily be justified in terms of need, but that would be impossible to contemplate under the Government's strict financial regime.
The council proposes to rebuild and replace the Peelwalls home in Ayton, Berwickshire, and to build a new home in Jedburgh to accommodate residents from the Milfield home in Jedburgh and from Romany house in Yetholm. It also proposes to rebuild Wellwood in Selkirk in my right hon. Friend's constituency.

827
There are compelling reasons for replacing those homes as a matter of urgency. First, the majority of bedrooms accommodate up to three or four beds in each room. Secondly, the lack of proximity to toilet facilities requires residents to resort to commodes during the night, causing a great deal of embarrassment to themselves and inconvenience to those with whom they share rooms. The only privacy that can be found in the existing premises is behind the locked door of a toilet. The fact that most existing buildings are multi-level premises means that residents who are old and infirm have to negotiate steps which are a hazard to frail elderly people.
Residents are looked after by a band of dedicated staff, but they are extremely restricted by the stifling physical constraints and the council takes the view—with which I agree that going for a more modest capital programme, which would be restricted to improving existing buildings would be futile and, in the long term, a waste of public funds. The existing disadvantages can be remedied effectively only by new buildings, custom-built to the new designs and standards that provide a pleasant environment and allow the elderly to be looked after more sympathetically. A striking example of what can be achieved can be seen at the council's new Waverley home at Galashiels.
The planned replacements would provide single room accommodation for every resident, which would allow social relationships to be established at will in the common lounges and sitting rooms, while maintaining independence and privacy in each bedroom. It is striking to note how residents can respond much more positively when they are allowed to do as much for themselves as they are able and want to do. The quality of life for those elderly people can become infinitely higher.
In addition to the new opportunities open to residents in the new custom-designed homes, the kitchens would provide meals on wheels for old people living in their own homes within a wide catchment area and a more extensive warden service as well as day-care facilities. Not only are old people's homes at stake, but new centres and public facilities to serve a community wider than that of the residents.
The plans were at an advanced and detailed stage. They have been knocked on the head. The best that can be said is that there is continuing uncertainty as a direct result of the cut announced by the Government earlier this year. The cut in the Borders region social work provision was the biggest cut in Scotland, except for Tayside, which suffered a cut of 39 per cent.
All these difficulties are compounded by the fact that the Borders region social work allocation for future years shows that the region will be forced to abandon its homes replacement programme. If that happens it will be a tragedy. Many elderly residents will be condemned to end their days without any basic dignity or privacy. They will be denied the accommodation that will give them the chance to retain independence within a residential home for as long as they are physically able.
The Minister will argue that the Borders region has done relatively well. The figures that he will advance to justify that claim were drawn from a straight population count. He must recognise that social work programmes are not provided for the general public, but for target groups. In the Borders region the budget is almost exclusively used to provide for the needs of the elderly. The Borders region has a high proportion of elderly people compared with
828
other regions. That is not reflected in section 94 capital allocations. If capital allocations were drawn within a range of factors, including population, but not exclusively population, the region would merit a larger allocation. The current plans envisage that one home should be rebuilt every three years. That is not an ambitious target. To deny the region the capital resources to carry out that programme is politically perverse.
The Minister has to realise that for a small, extremely responsible and prudent authority such as the Borders region, a cut of this magnitude makes total nonsense of any concept of long-term planning. The whole system of capital allocations requires urgent review. More notice must be given of changes of this magnitude in provisional plans. There is scope for more flexibility within the capital budget allocated to local authorities. The Government must take a more relaxed view about what might be borrowed. That is long overdue.
Will the Minister consider a further application during this financial year? A sum of £90,000 to £100.000 this year would keep the original capital plans on course. If he cannot give that assurance tonight, will he make a clear commitment that he will instruct his Department to devise a scheme of finance, by the autumn of this year, for guidelines for the fiscal years 1987–88 and 1988–89 that will enable the homes to be replaced, even if that takes longer than originally planned? Nothing else will do.
2.30 am
The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): I am glad to have the opportunity to reply to the points which the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) has raised on behalf of the senior citizens of his constituency and the Borders regional council which is responsible for their care.
I should apologise for keeping the hon. Gentleman until this time of night, but his hon. Friend the Member for Orkney and Shetland (Mr. Wallace) had just as much a part to play in keeping us here until this time. The redeeming feature is that I had to stay anyway, so that makes it easier for me to answer an Adjournment debate at this hour.
I welcome the opportunity because it enables me to explain the Government's policy on capital allocations to local authorities and the methods used to determine these allocations generally and in the particular case of the Borders. It seems to me that in his understandable concern about the problems currently besetting the regional council's social work building programme the hon. Member may not have fully appreciated the detailed considerations upon which its capital allocation for 1986–87 was decided. As a consequence he has laid the blame for these difficulties entirely at the door of the Government. I hope to show, in the time available to me, that that is not the true position.
Before I put all the facts before the House, let me first set the wider scene. The Government's consistent and continuing policy is that recovery of the economy should be led by investment in the private sector. Our overall economic strategy therefore embodies a firm commitment to the control of public expenditure. This in turn means that provision for local authority capital expenditure must be contained within the level of resources which the Government consider it appropriate for local authorities to consume. It is nevertheless our stated aim, so far as

829
resources permit, to issue capital allocations which allow authorities to proceed with those projects to which they attach a priority. That is the approach we adopted in deciding the allocations for 1986–87. Of course, it is the approach we adopt in all matters of public spending, not just social work. I can hardly let this evening pass without mentioning the considerable amount of capital which has been given to the Borders health board in order to build a brand new hospital. I was pleased to go and lay the foundation stone to show that Conservative Governments do care and that they put capital expenditure into health and social work.
It would perhaps promote a better general understanding of how decisions are made and the great care that is taken to ensure fair treatment for all authorities and all programmes if I were to explain briefly the various steps which lead to the issues of final allocations. Capital allocations for each programme in local authorities' financial plans are issued in January or February of each year, when authorities are given a final allocation giving formal consent to capital expenditure in the forthcoming financial year and provisional allocations for the two years thereafter.
Towards the end of his contribution, the hon. Member for Roxburgh and Berwickshire was suggesting that we should look further ahead than the immediate financial year and the two years thereafter. If we did more than that we would have to do similar for the whole Government programme. One could not have part of the programme rolling for five years and have the main part of the programme, the total amount of capital available which is laid down by the Treasury in discussion with Ministers, rolling for only three years.
As I have already indicated, the allocations were not plucked out of the air. They were the result of a most careful scrutiny of all authorities' financial plans and a detailed assessment of their relative needs, as distinct from desires, for new and improved buildings. It was recognised that needs varied from one region to another by virtue of factors other than the purely demographic, as has long been acknowledged in the arrangements for the distribution of rate support grant. One such factor is the state and extent of the provision already present on the ground by reference to the building stock survey, while others include the varying approaches of authorities to programme planning ad their past performance in the use of the resources made available to them. That is an important factor to which I shall return.
All these factors having been taken into account authority by authority, it was decided that the final allocation to the Borders region social work captial programme for 1986–87 should be £350,000. This was significantly less than the final allocation of £695,000 for 1985–86 and the provisional allocation of £550,000, which was given for 1986–87, which had been notified to the Borders regional authority in February 1985. Other authorities were, likewise, faced with substantial reductions on their provisional allocations.
It is fair to point out, however, that the allocations made to the smaller authorities have tended to vary from year to year by more than the average and that the Borders have over the piece been treated very favourably in relation to their share of the total Scottish population. Even the reduced allocation was higher than would have
830
been the case if it had been based solely on population. The reason for that was the higher than average elderly population in the region, which has 2·5 per cent. of the Scottish population over 75 years as against 2 per cent. of the Scottish population of all ages. I can assure the hon. Member that his suggestion, if I heard him aright, that the disproportionate number of elderly people in the Borders was not taken into account is untrue. That factor is taken into account. Indeed, the Borders regional council, in comparison to other areas in Scotland, have been reasonably favourably treated.
Provisional allocations for 1986–87 at cash prices were first issued to local authorities as far back as 26 January 1984 and revised provisional allocations were notified on 15 February 1985. Provisional allocations for 1987–88 were also issued at the same time. In July 1985 local authorities were asked to prepare their financial plans for 1986–87 and later years on the basis of the provisional allocations and to submit the plans to my office, and for other expenditure, to the Scottish Office in general, by 31 October 1985. It is not until the plans are received and studied in depth that sufficient hard information is available for the purpose of fixing the final allocations. Final allocations for 1986–87, this financial year, were eventually issued on 13 February of this year.
As a result of decisions taken in the 1985 public expenditure survey, the amount available for final allocation to authorities as capital consents in this area was £14–77 million. Allocations may be enhanced by any capital receipts raised. Of course, local authorities can keep the capital receipts. It was clear from the declared levels of legal commitments of around £10 million shown in financial plans that most authorities were going to have limited scope for developing their programmes in 1986–87. I appreciate that many authorities, including Borders regional council, consider that their allocations fall some way short of their aspirations. If, everyone had the resources to match his ambitions it would be a happy world, but that is not the world of reality. In reaching our decisions for 1986–87 we had to work strictly within the overall level of resources available. If one budget receives more resources than another, it does so at the expense of other budgets or at the expense of an increase in the total amount spent by the public sector. I know that many seem to think that the promise that they make in one instance can be separated from the promise that they make in another, and that no one is allowed to calculate total expenditure. Again, that is not the real world. The total spent has to be taken out of the amount of capital that is available within the overall economy. As I have said, we believe that it is important that as much investment as possible in our economy goes into the productive private sector, and that the demands of the state sector, which in many ways can be infinite, are kept strictly under control in terms of what the taxpayer and the economy can afford.
There is a second factor to which I have already referred when talking about taking into account past performance in the use of resources made available. In each of the three years from 1983–84 to 1985–86, the Borders regional council has been unable to make full use of the resources allocated to its social work programme. Authorities are allowed to transfer up to 10 per cent. of their allocation from one programme to another within the non-housing block, and the record shows that over the three years in question the Borders regional council exercised this discretion to the full to transfer a total of £177,500 out of

831
its social work building programme and into its education, water and sewerage programmes. In the light of this information, hon. Members may consider that the cut in the allocation for 1986–87 was perhaps rather less unreasonable and unpredictable than they have been led to believe. Over the preceding three years, in the light of the allocations given by my office to the Borders for social work capital expenditure, the regional council itself decided that £177,500 should be transferred from that programme to other programmes.
In its financial plan for the five years from 1986–87, the regional council has stated that its policy is to maintain elderly people in the community for as long as possible by providing a variety of domiciliary and day-care services. Further provision of residential accommodation for the elderly on any appreciable scale is not envisaged, but the capital programme anticipates the need to modify existing buildings, taking into account their age and condition, and to replace existing residential accommodation with suitable buildings only where necessary. These buildings will incorporate day care facilities. I am in broad agreement with that policy. Indeed, on many occasions I have visited the Borders and I have been impressed with the work carried out by the Borders regional council. There is a plaque in one of the homes which states that I opened the home. My name appears on a plaque on the foundation stone marking the beginnings of a hospital. I look forward to being invited to the opening of that hospital in my capacity as Minister after the next election.
In line with the Government's aim of allowing authorities, as far as possible, to proceed with priority projects, the regional council's capital allocation for 1986–87 was pitched at a level which would cover all legally committed expenditure and would allow completion of Deanfield old people's home in Hawick and a start to be made on either a new home for the elderly in Eyemouth which is urgently needed to replace the outmoded and inadequate Peelwalls home in Ayton, Berwickshire, or a new day centre at Coldstream. Completion of the Hawick project, involving expenditure of £198,000 in 1986–87, was scheduled for June 1986.
It is worth stating that the total capital value of the Hawick project which will be spread over several financial years, amounts to almost £1 million. That shows that the project is substantial. Had that project maintained its schedule, work on another project would have been able to go ahead as planned. However, in the event, work on Deanfield was substantially set back by the failure of the main contractor. The effect of this is the inevitable carry forward of commitment into the current financial year and, unfortunately, a probable increase in the 1986–87 expenditure on the Deanfield project to more than £415,000. I must make it clear, however, that this difficulty was not known to my Department when the council's final allocation was being considered and there is therefore no provision for it in the allocation. Indeed, the authority did not inform my Department of the problem and position of Deanfield old people's home until some weeks after the allocation had been issued.
Officials of the Scottish Education Department's social work services group met representatives of the council on 17 April to discuss the problem. At the meeting, the council's representatives stressed the difficulties of managing a small building programme in the face of the major upset posed by the contractor's liquidation, and estimated that additional allocation of around £100,000
832
would be needed to help meet the extra commitment carried forward to 1986–87. My officials, while they sympathised with the council's predicament, had no option but to explain that there was no possibility of the present allocation being increased meantime. That is a view with which I wholly agree.
I must tell the hon. Member for Roxburgh and Berwickshire that there is no possibility that the present allocation can be increased meantime, despite the problem which I fully understand about Deanficld and the additional expenditure. All resources available for capital allocation in 1986–87 were issued in February, and, unless there were to be considerable underspending by some authorities, no increase in allocation can be made during the year. It is unlikely that there will such underspending —certainly not of the order that would be necessary to release the amount of money required to come to the aid of the Borders regional council. There is not much hope from that source.
The Government have advised the council to continue to plan its expenditure within its present allocation, enhanced by any capital receipts applied to the social work programme. That means that the council can keep the proceeds of any capital receipts and use them. In this case, I suggest that it can use them to help with the problem in the social work programme. It can also take advantage of the flexibility arrangements afforded by the capital control scheme. They include the carrying forward of underspend from the previous year; anticipation of capital consent from the following year; and interprogramme transfer of capital consent from the current year. During the past three years, Borders regional council has used that facility to take £177,500 out of the social work capital budget and put it into other budgets. So it is well aware of the procedure and, from the experience of the past three years, is well able to carry it out. The council must examine some of its other programmes to see whether it can take some money from them and, by the interprogramme transfer method, move that money into the social work budget.
My calculations suggest that if the council took maximum advantage of all those mechanisms, it could make available sufficient resources in this financial year, 1986–87, to meet the increased Deanfield commitment and other non-specified legally committed expenditure. Unfortunately, it does not offer a solution to the problem of a delay in the start of work on the Peelwalls project, which I understand the authority has identified as a priority. I fully understand that point. Having considered that project and the scheme at Coldstream, I appreciate why the council has given priority to the Peelwalls project. I appreciate, equally, that it would not have been an easy decision. No decision about priorities is easy.
The day centre is nearer fruition, and makes provision for the elderly in a locality which has two new sheltered housing complexes and a generally high proportion of old people in the population. However, it could be slotted into the building programme at any time. I understand the need for Peelwalls to be replaced. It is a Georgian mansion three quarters of a mile from the village of Ayton, which I remember well from my student days. It is not suitable for the purpose. As the hon. Gentleman said, there is multiple occupancy of rooms, it has no lifts, there are inadequate and inaccessible toilets and it has an unsatisfactory kitchen.
The problem has occurred because of the wholly unforeseen circumstances of Deanfield, not because of the

833
capital allocation. Even in its reduced, final form, the capital allocation was sufficient to go ahead with Deanfield and to allow the project at Peelwalls to progress. The council has now put forward to the social work services group a detailed case for special treatment against the possibility, however remote, that supplementary
834
allocations may be possible later in the year. The information provided will be taken into account in determining—
The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twelve minutes to Three o'clock am.

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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 Lincoln. European Air Fares

European Air Fares
Lord Kissin: 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, in their bilateral agreements on air fares already made or under negotiation with other European countries, account is taken of the regulation in regard to the proportion of club class passengers and economy class passengers on short flights within the EC.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, the Government are seeking in their bilateral arrangements in Europe to reduce substantially the control of governments over the level of air fares and the conditions attached to them. It is for individual airlines to allocate seats between the different types of fare as they consider the market demands.
Lord Kissin: My Lords, I thank the Minister for that Answer. Am I right in understanding that the reduction as regard air fares is solely confined to air fares for the economy class and that the negotiations do not include the club class?
The Earl of Caithness: My Lords, I think that it depends on each individual airline. As a result of our recent efforts we have achieved more liberal arrange-ments with the Netherlands, and I know that if the noble Lord seeks to go there he will find that there is a much greater choice and variety of seat allocations than hitherto.
Lord Kissin: My Lords, is the Minister aware that an increasing number of airlines at present are allocating a greater number of seats to the club class than to the economy class? I have been a passenger on a short-haul flight from Brussels to this country, and there were about 185 club seats and 15 economy class seats. Is not that a way to avoid the basic agreement that is reached for the reduction of economy class seats?
The Earl of Caithness: My Lords, I agree with the noble Lord that on certain flights there will be a preponderance of business class seats. For example, if one travels from London to Brussels on an 8 o'clock flight on a Monday morning one will find that there is a very high proportion of business class passengers. However, it varies with the time of day and the type of flight.
Baroness Burton of Coventry: My Lords, if the noble Lord, Lord Kissin, feels that the proportion of seat allocations between club class and economy class passengers sometimes works to the disadvantage of
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passengers, would the noble Earl the Minister—although it is the responsibility of the airlines concerned—feel inclined to look into specific cases which the noble Lord, Lord Kissin, may be able to send him?
The Earl of Caithness: My Lords, I should certainly be glad to look at any case which any noble Lord wishes to bring to my attention.
Lord Auckland: My Lords, my noble friend has mentioned Holland as an example of a country in respect of which agreement has been reached over these charges. However, is he aware that flights to Denmark are marked by very high fares as regards both club and economy class? Is he able to say what negotiations are taking place in respect of flights to that country?
The Earl of Caithness: My Lords, we are pursuing bilateral negotiations with most of the European countries with which we do not have liberal arrangements at the moment. Moreover, as in particular the noble Baroness, Lady Burton of Coventry, will know, we are pursuing matters in the EC as well.
Lord Kennet: My Lords, will the noble Earl agree that there is also a public health point involved? Is he aware that on one flight from Brussels to London last week there were precisely 1½ rows of seats for economy class non-smokers?
The Earl of Caithness: My Lords, I am now aware of that fact, yes.

Graduates: Employment Prospects
2.38 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 what are the current employment prospects for graduates who have recently concluded their studies.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, I am pleased to say that according to information published recently employment prospects for new graduates in 1986 are better than they have been for many years. Vacancies are 5 per cent. above the 1985 level, and this increase affects graduates across all disciplines. Thus, young people leaving higher education for the labour market this summer have good job prospects, especially if they are prepared to be flexible and mobile.
Lord Gainford: My Lords, I thank my noble friend the Minister for that Answer. As regards flexibility, is there any danger that some young people will not take possible employment because they fear that jobs may be too menial? Did my noble friend the Minister read an article in the Daily Telegraph a short while ago suggesting that it was easier for women graduates to obtain jobs because they were more open-minded?
Lord Trefgarne: My Lords, I do not know about being open-minded, but I am certain that employers pay close attention to personal skills—such as, numeracy, ability to work in groups and communications skills—when recruiting graduates, and that is often more important than the precise subject that has been studied.
Lord Cledwyn of Penrhos: My Lords, does not the encouraging Answer given by the noble Lord point to the need to assist the universities in recruiting new students? Does not the Government's policy towards the universities, as enunciated recently through the UGC, discourage the universities in making this important attempt? Will the Minister also tell the House the percentage of graduates now unemployed?
Lord Trefgarne: My Lords, I am not sure that I have the figure for which the noble Lord asked. However, I can say that the percentage of graduates from United Kingdom universities believed to be unemployed—and of course the precise number is not always possible to arrive at—was only 8 per cent. last year—that is, 1985. Also, the universities, the polytechnics and other institutions taken together produced 137,132 graduates last year. I hope that that information will assist the noble Lord. The important point is to ensure that the teachers remain in good supply; and the Government are concerned to ensure that that is achieved. Your Lordships will recall the Question recently answered by my noble friend Lord Swinton who explained what we were doing in that regard.
The Earl of Halsbury: My Lords, will the noble Lord agree that the employment prospects for graduates on sandwich courses, particularly thin sandwich courses, are very much better than for those on non-sandwich courses? Will he represent to his right honourable friend that some influence should be brought to bear on the University Grants Committee to treat sandwich course universities rather better than the average instead of rather worse?
Lord Trefgarne: My Lords, I shall certainly convey the noble Earl's views to my right honourable friend. I agree that the sandwich course system is extremely valuable, not least because it gives young people a taste not only for the academic disciplines that they are seeking to acquire but of the real world as well.
Lord Annan: My Lords, would the Minister agree that it would be more appropriate if universities were informed that they would give a better chance to their graduates if they went over to sandwich courses?
Lord Trefgarne: My Lords, I think that just underlines the point made by the noble Earl, Lord Halsbury.

China: UK Export Trade
2.44 p.m.
Lord Rodney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
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The Question was as follows:
To ask Her Majesty's Government whether they have revised their attitude towards encouraging efforts to increase exports to China and, if so, why.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, government help for exports to China has recently been increased with the introduction of the £300 million development loan arrangement. In addition, substantial help continues to be available through the British Overseas Trade Board, the Export Credits Guarantee Department and our posts in China and Hong Kong. Prospects will also be enhanced by the state visit by Her Majesty the Queen later this year.
Lord Rodney: My Lords, I should like to thank my noble friend for that Answer. May I ask him whether he is aware that, due to the successful promotion of the Chinese market by Her Majesty's Government, the demand for support from the BOTB has increased considerably? Would my noble friend see whether it is possible to increase this support still further to help British companies who are anxious to keep abreast of the Germans and Japanese, who are making considerable inroads into this market?
Lord Lucas of Chilworth: My Lords, there is indeed a greater degree of activity in the Chinese market. The British Overseas Trade Board have responded to this by sponsoring 13 joint ventures, 12 missions, and six seminars in China for the year 1986–87. One has to recall that British Overseas Trade Board funds are, to an extent, limited, and we have to respond to all the world markets in giving support.
Lord Mellish: My Lords, is the Minister aware that the Chinese have decided to take an option on an important site in Docklands, and that they are being encouraged at a local level because the potential is there for the world to see? May I have an assurance that the Government are supporting such a scheme, because its potential is enormous?
Lord Lucas of Chilworth: My Lords, the Government of course will support, where they can, any scheme for the furtherance of trade with overseas countries. My understanding is that the Trade and Cultural Centre is a private enterprise operation in conjunction with one of the municipal states of China. I am sure that whatever help can be given through the normal channels would be given to a private enterprise effort of that nature.
Lord MacLehose of Beoch: My Lords, I thank the Minister for that encouraging answer. Would he agree that better knowledge of the country, its law and its language, would be of great assistance to our exporters? Would the Government therefore support those places of higher education, without which that knowledge would fade?
Lord Lucas of Chilworth: My Lords, I think that the noble Lord's question could be directed to a number of countries. Certainly the Sino-British Trade Council offer assistance and advice to potential exporters to

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China, and I think it would be to them that a potential exporter should make his first advance to find out what he ought to know and ought to be learning before he actually goes.
Lord Tordoff: My Lords, is the noble Lord aware that there is in October of this year in Peking a chemical trade exhibition, and that at the moment only one British chemical company is exhibiting there, and that approaches to the British Overseas Trade Board have failed to come up with any support for chemical firms wishing to show at that exhibition? Is that not a pity in relation to the way our competitors from West Germany are exhibiting there?
Lord Lucas of Chilworth: My Lords, there are a number of overseas exhibitions, and one must say, if the industry requires any defence, that they cannot exhibit at every single fair right across the world. The BOTB, through sponsor divisions, offer the opportunity. If industry fails to take it up, then I might suggest that that is to that industry's disadvantage. Certainly in these instances it is rather like leading a horse to water and you cannot actually make it drink when you get it there.
Lord Morris: My Lords, my noble friend referred to a £300 million development loan to the People's Republic of China. Would he be good enough to let me know for what purpose this loan is to be utilised?
Lord Lucas of Chilworth: My Lords, five projects have been agreed with the Chinese for consideration under the £300 million development loan facility. These involve a power station, a tractor factory, a stainless steel tube mill, a fibre optics transmission equipment facility and two specialised container ships. All these matters are under discussion with the Chinese authorities.
Lord Oram: My Lords, is not the recent devaluation of the Chinese currency an indication that China is anxious to increase its exports and to conserve its resources of hard currencies? That being so, should not our exporters seek to concentrate on capital goods such as those indicated by the question of the noble Lord, Lord Tordoff—that is, goods which enable the Chinese to develop their economy and earn the hard currency that they are so anxious to have?
Lord Lucas of Chilworth: My Lords, without wishing in any way to be condemnatory of the Chinese, theirs is of course a relatively poor country and their conservation of hard currency shows a certain prudence, but there is no doubt that politically and commercially they have declared an interest in buying more from the United Kingdom.
Lord Bruce of Donington: My Lords, is the noble Lord aware that last week the Chinese made a formal application to join the General Agreement on Tariffs and Trade? In the light of the Government's declared commitment to better the whole trading atmosphere between China and this country will the noble Lord give an unequivocal assurance that Her Majesty's Government will support the Chinese application to join GATT?
Lord Lucas of Chilworth: My Lords, as the noble Lord will know, this is essentially a matter for the European Commission. We shall give what support we can in the consultations that the Community, ourselves and China have on this matter.
Lord Hatch of Lusby: My Lords, is the noble Lord aware of the very imaginative twinning scheme between the City of Sheffield and the corresponding steel city in China—
Noble Lords: Name it.
Lord Hatch of Lusby:—which has led to a development of trade and which has shown the sensitivity of the authorities in Sheffield to what the Chinese want most of all, which is co-operative schemes between British firms and Chinese state firms? Will the Government both publicise and encourage further schemes of twinning of this kind which can be of both cultural and commercial value?
Lord Lucas of Chilworth: My Lords, it is certainly not for the Government to support or in any way interfere with the individual twinning arrangements that towns and cities in this country have with towns and cities in any other country. Certainly we support joint and collaborative arrangements between our business houses and business houses in other countries.

Glorious Revolution: Tercentenary Celebrations
2.53 p.m.
Lord Grimond: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will reconsider their proposals to celebrate the revolution of 1688.
The Lord President of the Council (Viscount Whitelaw): No, my Lords. Celebrations of the Revolution of 1688 are currently being prepared by two bodies. The William and Mary Tercentenary Trust is preparing a wide programme of events to celebrate 300 years of Anglo-Dutch friendship. In Parliament, a Joint Advisory Committee of Members of your Lordships' House nominated by my noble and learned friend the Lord Chancellor and Members of another place nominated by Mr. Speaker are considering ways of commemorating the constitutional and parliamentary consequences of the Revolution and Bill of Rights and Claim of Right. The Government support both these initiatives.
Lord Grimond: My Lords, may not these celebrations appear rather provocative, particularly to Irishmen and possibly even to Catholics? Will the Government not agree that the so-called revolution of 1688 was in fact a coup d'état, carried out largely by appealing to religious bigotry, and by treachery? In a multireligious society is this the type of historical occasion which we need to go out of our way to celebrate? May I ask the Government whether they are going to promote official celebrations in Ulster?
Viscount Whitelaw: My Lords, having spent two years in Northern Ireland I understand very well the intricacies of Irish history, and I do not propose to get involved in it either this afternoon nor during the celebrations. However, I think that three hundred years of Anglo-Dutch friendship is worth celebrating. Some of the aspects of the development of constitutional monarchy and parliamentary democracy which attend this event are also something which Parliament should celebrate.
Lord Mowbray and Stourton: My Lords, with great respect to my noble friend, this is not surely just recording Anglo-Dutch friendship. This was completely unecumenical, discriminating particularly and only against Roman Catholics. Surely my noble friend will agree that later Stuarts offered to come back to the throne, if allowed to come back with their own religion, accepting all that the constitution of 1688 offered. I wonder whether my noble friend knows that my family was not able to sit in Parliament from 1688 until the Catholic emancipation. Therefore, I find very discriminating the fact that the latter Stuarts would have accepted all but this in the 1688 constitution that my noble and learned friend the Lord Chancellor likes so much; and I say this without hesitation, not doubting my loyalty to the present holder of the Throne and recent Monarchs.
Viscount Whitelaw: My Lords, it is clear that there are aspects of this particular occasion which may not evoke the happiest memories in different places and with different people. Certainly one of these has been put right in that my noble friend is now allowed to sit in this House despite anything that might have been done on that occasion.
As for the celebrations, there are different events in our history to which it is reasonable to call attention, though they may not have been universally popular or at the time particularly helpful to everyone. However, this is an important milestone and on that basis should be celebrated.
Lord Glenamara: My Lords, why should we be called upon to celebrate this so-called revolution which was not by any means glorious as the history books describe it? It was a pretty squalid affair. It amounted to nothing more than the ousting of the lawful rightful King by religious prejudice. Nobody objects to celebrating 300 years of Anglo-Dutch friendship, but why should we be called upon to celebrate this squalid coup d'état?
Viscount Whitelaw: My Lords, a large number of people thought it was appropriate, and that is why the Government are supporting the various endeavours that are being made. One has to say that those Members of your Lordships' House who do not want to celebrate need not do so.
Lord Annan: My Lords, will the noble Lord agree that this revolution, so far from being squalid, was a revolution which in fact established the basic liberties in our country, including not having standing armies which could be there without Parliament voting the money for them, and which established that judges could not be dismissed by the Government and that
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they could hold office however they behaved themselves? Is that not a most important fact in the constitution?
Viscount Whitelaw: My Lords, the last point about judges being allowed to remain however they behave themselves is quite right. The rest of what the noble Lord, Lord Annan, says is obviously correct. It shows that there are two feelings about history and the noble Lord produces one which on this occasion I am very much prepared to support.
The Earl of Lauderdale: My Lords, will my noble friend not agree that using the term "Anglo-Dutch" seems to exclude Scotland, no doubt deliberately? Is he saying that because he is aware that many Scots— Episcopalians, Roman Catholics and Jacobites— bitterly resented and suffered from the effects of this so-called glorious revolution?
Viscount Whitelaw: My Lords, I have referred to the arrangements made by the William and Mary Tercentenary Trust. I understand that the advisory committee set up by my noble and learned friend the Lord Chancellor and Mr. Speaker intends that the celebrations should cover the revolution of 1688–89 in Scotland as well as England and Wales and the Scottish Claim of Right as well as the English Bill of Rights. The membership of the advisory committee includes the noble and learned Lord, Lord Fraser of Tullybelton, who is advising on the Scottish aspects, and the Scottish Record Office is closely involved in the plans for the Parliamentary Exhibition.
Lord Elwyn-Jones: My Lords, did not the setting up and creation of a constitutional monarchy and the passing of the Bill of Rights benefit Catholics no less than Protestants? Is it not therefore, if the matter is looked at in a detached and reasonable way, an occasion which ought to be celebrated even by Roman Catholics?
Viscount Whitelaw: My Lords, as is so often the case, I am indeed grateful to the noble and learned Lord for his detached wisdom in this matter. I have thought it right so far as I was concerned all the time to keep right away from matters of religious controversy, which when answering for the Government is probably wise.
Viscount St. Davids: My Lords, ought not this day to be celebrated for at least some happy aspects? Among them there is a personal one which interests me; to whit, the day that William of Orange landed was the day when the death by hanging of my five-times-great-grandfather was suddenly cancelled.
Viscount Whitelaw: My Lords, there might be two views on whether that was a good thing or not.

Business
3 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Report stage of
the Social Security Bill will be

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adjourned at approximately seven o'clock for approxi-mately one hour and that during this adjournment consideration of Commons amendments to the Incest and Related Offences (Scotland) Bill will be taken.

Port of Fosdyke Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
River Humber (Burcom Outfall) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Social Security Bill
3.2 p.m.
Report received.
Clause 1 [Minimum contributions to personal pension schemes]:
Baroness Baroness Hooper moved Amendent No. 1:
Page 2, line 8, at beginning insert ("Subject to subsection (3A) below,").
The noble Baroness said: My Lords, on behalf of my noble friend I beg to move Amendment No. 1. With it I propose to discuss, with your Lordships' permission, Amendments Nos. 2, 15 and 16.
When someone leaves a personal pension scheme he may decide to leave his investments in the scheme to mature for his retirement; but he may decide to transfer them to another scheme, or to use them to buy a deferred annuity from an insurance company. If so, it could happen that some minimum contributions from the DHSS in Newcastle come through for payment to the scheme after the investment has been moved elsewhere.
At present Clause 1(3) of the Bill states that the minimum contributions must be paid to the scheme. This would obviously cause practical problems in the cases to which I have referred and might mean that the money could not be used properly to provide pension benefits for the member who has taken his business elsewhere. Similar problems may also arise with incentive payments to occupational schemes under Clause 7. These amendments allow the payments in such cases to be made, with suitable safeguards about how they are to be used, to the scheme or insurer who is now responsible for the person's pension rights. I beg to move.
Lord Banks: My Lords, I wonder whether the noble Baroness can explain what would the position be if the person goes back into SERPS and the extra money comes back after he has transferred back? Where does it go then? Is it reclaimed by the Department of Health and Social Security? What happens to it?
Baroness Hooper: My Lords, I assume the answer is that payments on the transfer back to SERPS would go into SERPS and would in fact boost the personal
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pension. If I find on inquiry that there is further information I can give to the noble Lord, I shall write to him, if I may.
On Question, amendment agreed to.
Baroness Hooper: My Lords, I beg to move Amendment No. 2:
Page 2, line 10, at end insert—
("(3A) In such circumstances as may be prescribed the Secretary of State shall pay minimum contributions to a prescribed person.").
On Question, amendment agreed to.
Schedule 1 [Appropriate personal pension schemes]:
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 3:
Page 92, line 10, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, I return in this amendment to the matter of adequate consumer protection for those who are encouraged by the Bill to take out personal portable pensions in lieu of their SERPS entitlement or in lieu of joining an occupational scheme. Your Lordships may remember there was some discussion at Committee stage as to whether the Financial Services Bill or this Bill was to be the proper vehicle for such protection. The noble Baroness, Lady Trumpington, in replying to me at col. 746 on 17th June, said:
"The Financial Services Bill sets up a system of self regulatory protection for all sort of investments and not just for pensions".
She went on to say:
"There may be a need for extra measures because of the special position of pensions."
She acknowledged this in principle and then went on to say—and I quote again:
"In the very unlikely event of the Financial Services Bill not being passed, there are fully sufficient powers in this Bill to do all that is necessary to protect personal pension holders".
Although I am sure the noble Baroness intended that statement to be helpful, it is not as helpful as it might seem, for the following reasons. First, there is nothing written into the main text of the Financial Services Bill as to the degree of protection for personal pensions. I understand that rules will be published by the Securities and Investments Board and also by the Marketing and Investment Board Organising Committee. But the passing of the Financial Services Bill would not help us directly here.
Secondly, the regulatory powers before us in the Bill are only permissive and not mandatory, as this amendment suggests they should be. So we have no means of knowing what the Secretary of State will regard as adequate protection for personal pension purposes or what abuses he would consider to be sufficient grounds for introducing subordinate legislation at a later date. This is all wrapped in mystery in the Bill before us.
This being so, I think we are entitled to ask the noble Baroness some questions. Perhaps the greatest concern centres on cold calling, and I understand that the cooling off period prescribed by MIBOC will be 14 days. But there is a widely held opinion that a longer period of, say, four or even six weeks would be appropriate in making the important decision as to whether to opt out of a well tried scheme into something new. It is a decision which may well require

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the advice of an independent pensions consultant or some other form of consultation. In the circumstances 14 days seems quite inadequate. Do the Government share this view and, if so, what are they going to do about it?
Next, will the Government ensure that any prospec-tive purchaser of a personal pension will know clearly how much commission is payable, how much of each and every contribution wll be applied for pension purposes, and how much, if any, of the benefits is guaranteed?
There is also the question of advertising. In Clause 13 we have merely a permissive power to make regulations. What will the criteria be? What type of conduct or misconduct would trigger regulations to protect the purchaser? Surely we are entitled to know these things before we agree to allow this Bill to go forward as it stands with wide but unspecified powers for the Secretary of State.
Schedule 1 provides that a scheme must comply with such requirements as may be prescribed as regards the investment and its resources and with any directions of the Occupational Pensions Board. I yield to no one in my admiration for the Occupational Pensions Board and the excellent work it is doing and will continue to do. I understand that the noble Baroness, Lady Turner of Camden, is one of its most outstanding members, and I should like to pay a tribute to the expertise and intelligence she has brought to bear on our debates on this part of the Bill. The OPB does a splendid job; but while it is excellently equipped—and I think the noble Baroness would herself agree here—for administrative functions and is marvellous for checking documentation and so on, it has no investigatory or inspectorial capacity.
The noble Baroness, Lady Trumpington, agreed at col. 744 on 17th June that it does not have sufficient powers, sanctions or staff. She said that its staff would be increased and that Clause 2 gives it full power to withdraw approval. But the fines described by the noble Baroness in answering an amendment of the noble Baroness. Lady Turner, at col. 781 are derisory. Under Clause 52 the maximum fine is £400 and £40 per day for a continuing offence; that is simply not adequate. If, however, the provider were to fall foul of SIB requirements under the Financial Services Bill, the penalties could be very serious indeed. There are some draconian powers in the Financial Services Bill under Clause 3, 4 and 5, Schedule 2, Clauses 60 to 63, and some more which I shall not go into as we are concentrating on a different Bill.
But despite these draconian powers in the Financial Services Bill there is no specific reference, to my knowledge, to personal pension schemes, and what we may want from the Government, if they will not accept this amendment, is an undertaking to introduce regulations in this Bill involving those powers under the Financial Services Bill. The Government must clear their own mind on what is, and what is not, proper protection for purchasers of personal pensions.
I repeat, as I said at Second Reading and at Committee, that I am a supporter of these schemes. I am not approaching them from an antagonistic point of view. They are a necessary component in the choice and flexibility required by the increased volume of job
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changes that will mark the labour market of the future. But these schemes must be fair, clear, above board and subject to heavy sanctions if they are not. My Lords, I beg to move.
Lord Williams of Elvel: My Lords. I should like to support the noble Lord, Lord Kilmarnock. in his amendment. We had an extensive discussion on the Second Reading of the Financial Services Bill last Friday of the whole question of cold calling, of unsolicited calling—call it what you may. We also had discussion of what might be coming before a Committee of your Lordships' House by way of amendments to these various arrangements that are at present set out in the Bill.
The problem in this schedule, to which the noble Lord, Lord Kilmarnock, referred, is that, as I see it, there is no reference to what is set out in the Financial Services Bill. That Bill, as I think I said in Committee on this point, will be the master Bill, because personal pension schemes are just one form of investment. It is no good saying that personal pension schemes are different in terms of investment from life insurance schemes and other schemes which people may sell on the doorstep. I accept that this Bill concentrates, quite rightly, on pension arrangements. Nevertheless, the rules for those who are selling personal pension schemes, and the personal pension schemes themselves, have to chime with the rules under the Financial Services Bill for other investment schemes.
We shall be looking—and, if I understand the noble Lord, Lord Kilmarnock, rightly, he is looking—for an assurance from the Government that the same rules will apply to those who are selling personal pension schemes under this Bill as to others who are selling investment schemes under the Financial Services Bill. In that spirit, I beg to support the noble Lord, Lord Kilmarnock.
3.15 p.m.
Lord Trefgarne: My Lords, the noble Lord, Lord Kilmarnock, proposed this same amendment during the consideration of the Bill in Committee, and I am sorry that he and the noble Lord, Lord Banks, whose name also appears on this amendment, remain concerned about the use of regulation-making powers for the pensions provisions of the Bill. I know that the noble Lords' concerns are wider than the specific effect of this amendment. But I should first explain, again, why we have given the Secretary of State a power rather than a duty, in paragraph 2 of Schedule 1, to make regulations about who may "establish" personal pension schemes.
We intend to use the power in paragraph 6 of the schedule to make regulations about the kinds of investment business that can be offered as personal pension schemes. For example, we propose that the regulations should require that, to qualify under Schedule 1, these schemes should be "authorised unit trusts" under the financial services legislation, or that they should offer particular kinds of insurance contract under insurance company legislation.
This approach will ensure that the whole raft of investor protection provisions which apply to these types of investment business will apply automatically

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to personal pensions. And it will probably make it unnecessary to exercise the power in paragraph 2 of the schedule, because the new pensions providers— banks, unit trusts and building societies—will be free to enter the personal pensions market by establishing schemes in the forms specified in these regulations.
Turning to the wider concerns that have been referred to from time to time, the permissive nature of many of the regulation-making powers in the pensions provisions of this Bill has been criticised on a number of occasions during the Bill's passage through Parliament. In particular, the Government's policy of making use wherever possible of the extensive investor-protection measures that will flow from the Financial Services Bill, rather than devising a complete set of separate free-standing rules under this Bill, has, I know, caused concern among some noble Lords.
I have to say that those who advocate immediate and obligatory formulation of comprehensive investor-protection measures in the social security legislation do no service to the people they seek to protect. One part of government—the DHSS—is being asked to close its eyes, to ignore what is happening at the Department of Trade and Industry and in the City, and to come up with a package of measures in isolation to cover substantially the same ground as the relevant parts of the Financial Services Bill. I ask noble Lords to consider very carefully the consequences of such an approach.
The principal result would be confusion. There would be two sets of rules governing identical activities: advertising, for example. That means two sets of rules to be followed by the pensions providers. That would be a hard enough burden, even if the rules turned out to be consistent. But what if they differed? Which rules should then be followed? No doubt answers to that question could be found, but only after an expense of time and effort that should be better employed. It is not only the pension providers who would suffer. What about the consumers seeking to establish their rights under the rules? Which rules will be the relevant ones for them? And if we have separate sets of rules, shall we not need separate bodies to police them, with the additional bureaucracy that that could entail?
I repeat the assurances that the Government have given on many occasions now. We are not seeking the investor-protection powers in this Bill for any idle purpose. We will use them if we judge it necessary to do so to ensure that pension scheme members are properly protected—and we are determined that they should be properly protected. It will be no advertisement for our pensions policy if its introduction is succeeded by a series of frauds, financial collapses and other scandals in which scheme members lose their savings. We are clear that we have to guard against this. But from what has emerged so far under the nascent financial services regulatory framework we believe that this framework will offer valuable protection to scheme members which, for the reasons I have outlined, ought not to be duplicated in social security legislation. There are still some problems to be sorted out; indeed, it would be surprising if there were not. If these cannot be resolved
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satisfactorily—though I have every hope they will be—then we shall act to use the powers in this Bill.
This is an administratively and technically complex area. The Government believe it is essential to proceed in close consultation with all the interested parties; and this is inevitably a time-consuming process. We want to get the detailed rules right, which is why we are proposing to cover many of them in the regulations. I do not think we would win many plaudits—certainly not from the pensions organisations—if we were to abandon this process.
I understand the concerns expressed by your Lordships that this House has not yet considered in detail the Financial Services Bill. But I find it much more difficult to see why this should mean that the Social Security Bill should be considered as if the other Bill did not exist. The Financial Services Bill has of course now received its Second Reading in your Lordships' House.
Perhaps of more direct relevance are the various proposals for rules published by the Securities and Investments Board and the Marketing of Investments Board Organising Committee. These are the two bodies which are expected to become the designated agency under the Financial Services Bill. The board has already published detailed proposals which have significance for pensions. They cover, for example, the standards of conduct required by people engaging in investment business, including people who will be marketing pension schemes; they cover "cold-calling" and "cooling-off periods"; and they cover disclosure of information about investment products. I understand that proposals for compensation arrangements and for restrictions on advertising can be expected in due course. It looks like being an extensive and thorough regulatory regime. We want to see how such rules can best be applied to pensions, and discussions between the interested parties are continuing. Investor protection for pensions will of course be an important feature of the proposals for the details of the new pensions arrangements on which we shall be consult-ing publicly this year.
In the light of all these considerations and the undoubted technical complexity of this matter, I hope that the noble Lord, Lord Kilmarnock, will be satisfied with the assurances I have been able to give.
Lord Kilmarnock: My Lords, the noble Lord, Lord Trefgarne, has said that I moved the same amendment in Committee, and that is perfectly true. It was pressed to a Division there. I think, therefore, that there is no impropriety here. Possibly we may now need to draft a different amendment for Third Reading.
The noble Lord has given us a number of assurances and he spoke of the Government's intention to do a number of things. Of course, as it comes from him, we respect those assurances and we note those intentions. However, I do not see why we should not have those assurances and those intentions on the face of the Bill. The noble Lord referred to advertising. In fact, I only mentioned that in passing. The amendment is directed to Schedule 2.
The noble Lord stated that there would be a muddle if there were separate sets of rules for the same types of investment according to whether or not they were

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going to be used for pension purposes, but there would not be separate sets of rules if in fact we simply used cross-referencing between this Bill and the Financial Services Bill. Then we should know where we stand; and I am encouraged to see the noble Lord, Lord Williams, with his expertise, nodding in agreement with that. I cannot see why we should not do that in this Bill.
As the noble Lord has said, it is a complicated matter. I do not intend to divide the House this evening on this point. I shall certainly read with great care what has been said during the debate, and if we feel that the assurances are not quite as strong as we should like then I may well come back at Third Reading with an amendment couched in a different form. On those grounds, I beg leave to withdraw the amendment.
The Deputy Speaker (Lord Aberdare): Is it your Lordships' pleasure that this amendment be withdrawn?
Noble Lords: No.
On Question, amendment negatived.
Baroness Hooper Baroness Hooper moved Amendment No. 4:
Page 93, line 22, at beginning insert ("The value of).
The noble Baroness said: My Lords, I beg to move Amendment No. 4, and I propose also to discuss Amendment No. 5. These are drafting amendments, and they clarify that paragraph 7(4) of Schedule 1 is about the calculation of the value of protected rights resulting from minimum contributions and not about the form of the benefits eventually provided with those rights. The form of the benefits is dealt with by paragragh 9 of the schedule. The amendments ensure that schemes will, as intended, be free to pay out rights from contributions about the minimum level as they wish, subject to Inland Revenue rules. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 5:
Page 93, line 25, after ("which") insert ("the value of).
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 6:
Page 95, line 5, after ("amount") insert ("and the circumstances are such as may be prescribed,").
The noble Baroness said: My Lords, this amendment is consequential on the change made to paragraph 9(3) of Schedule 1 during the Committee consideration of this Bill. It will ensure that the provisions for commutation of the annuity resulting from minimum contributions to personal pensions follow the existing provisions in Section 39 of the Pensions Act for commutation of guaranteed minimum pensions. The simple rule is that all these contracted-out pensions may be commuted for a lump sum payment only where the amount would be small. The figure is set by the Inland Revenue and is currently £104 a year.
We also need to set the circumstances in which the pension can be commuted to cater for cases where someone has pension rights in another scheme which
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would take his total pension over the commnutable amount. The amendment provides this power for widows' and widowers' pensions to match that in paragraph 9(3) for the member's pension, and that in Section 39 of the Pensions Act for guaranteed minimum pensions. I beg to move.
Lord Williams of Elvel: My Lords, I wonder whether the noble Baroness could interpret the words "circumstances are such as may be prescribed".
Baroness Hooper: My Lords, such as may be prescribed from time to time, possibly by regulation.
On Question, amendment agreed to.
Clause 3 [Amount of minimum contributions]:
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington)The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington) moved Amendment No. 7:
Page 4, line 13, at beginning insert ("Subject to subsection (1A) below,").
The noble Baroness said: My Lords, in moving Amendment No. 7 I also propose to discuss Amendment No. 9. When we discussed Clause 3 of the Bill in Committee on 17th June, I gave the Committee an undertaking that we would propose an amendment today to modify the proposal to pay the 2 per cent. incentive to all employees who take personal pensions. I said that the detail would be for regulations, which would be subject to full consultation with the pensions industry and other interested parties. It is worth repeating that the principle we are accepting in proposing these amendments is already clear. The 2 per cent. incentive will not be available for someone who has been in a contracted-out scheme for a reasonable period and who is still eligible for membership of that scheme after leaving it.
I understand that the length of the period of membership which might be considered "reasonable" is the subject of some speculation. I must assure your Lordships that no decision has been taken about this. It is exactly the kind of issue on which consultations are appropriate, and on which we shall be listening carefully to the views which are put to us.
There are other practical issues about the precise circumstances in which the incentive addition will be withheld, which are also most suitable for regulations and on which we shall be consulting. I am pleased to be able to propose these amendments to meet what I know are genuinely felt objections on the part of some noble Lords to the Bill as it stands. I beg to move.
Baroness Turner of Camden: My Lords, I am glad to learn from the noble Baroness this afternoon that the assurances that were given to us in Committee are being honoured in this way. She is right to say that the reference to "reasonable" in the speech she made in Committee has aroused some speculation. It has been asked what is meant by "reasonable". Plainly this is something which must be sorted out. As far as we are concerned on this side of the House, we would expect that anybody who was in a contracted-out scheme, even someone who has perhaps just joined as a result of having been taken into employment, should be covered by the provisions that the 2 per cent. incentive would not be available because the scheme was an

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acceptable one and the 2 per cent. incentive should not be used to opt against a good scheme. However, I am very glad to welcome what the noble Baroness has said, and we shall of course be supporting the amendment.
3.30 p.m.
Lord Banks: My Lords, as the noble Baroness has reminded the House, she agreed during the Committee stage that the 2 per cent. incentive should not be paid to those who switched from contracted-out occupational schemes to contracted-out personal pension schemes. I should like to speak also to Amendment No. 8. The object of that amendment was to put into the Bill what the noble Baroness had agreed to and to have it there on the Marshalled List in case there was no amendment forthcoming from the noble Baroness in relation to this matter. The Government are proposing to deal with it, as she has explained, by giving themselves the power to exempt certain prescribed employment which it is intended (although not specified) will include the 2 per cent. incentive as applied to switches from contracted-out occupational to contracted-out personal pension schemes.
There are two questions that I should like to ask the noble Baroness. I am glad that action is being taken to deal with this matter, but I am a little unhappy that we have no indication at all at this time of what a "reasonable" period might be. I wonder whether she can give any indication of the Government's thinking on that matter. I should like to ask what was meant exactly by the qualification which she put in her statement. She said that the 2 per cent. incentive would not be available for personal pensions held by someone who had been in a contracted-out occupational scheme for a reasonable period and who was still eligible for membership of that scheme after leaving it—not of that scheme at the time of leaving it, but after leaving it.
If the employer were to say—as employers might say, and as I understand it they would be free to say—that, having left the scheme, you cannot come back into it, what effect does that have? Does that mean that in those circumstances the 2 per cent. would be paid, thus undermining the whole object of what the noble Baroness and the Government are trying to do here? I should be most grateful if the noble Baroness could answer that point.
Lord Williams of Elvel: My Lords, I should like to support the noble Lord, Lord Banks, and my noble friend Lady Turner of Camden in asking, firstly, who is being consulted on the question of what is a reasonable period, when these consultations will come to fruition, and whether we shall know this before Third Reading; and, secondly (to pick up a point made by the noble Lord, Lord Banks) are those who are in possession of a deferred pension in an occupational pension scheme ruled out from this provision?
Baroness Trumpington: My Lords, if I may answer the last question first, we are consulting with the pension people and the organisations concerned with pensions, and with the noble Lords opposite or any other person who thinks that they may have
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something to offer. They may well write in, and their comments will certainly be taken into account in the consultations.
With regard to the question of the noble Lord, Lord Banks, of how long is "reasonable", I have said that we are having these consultations—in fact, I particularly said that in my original remarks. With regard to the eligibility for membership, this is still in a category of employees which qualifies for scheme membership even after leaving. I hope that your Lordships will be pleased with what I have said today because there was a very full debate on these matters both in Committee and in another place, and, having listened very carefully to all the views that were put to us, we concluded that we should take the powers to limit the application of the incentive addition and that we should, as I have done, give a clear undertaking as to the principle and the way in which we intend to use that power.
On Question, amendment agreed to.
[Amendment No. 8 not moved.]
Baroness Trumpington Baroness Trumpington moved Amendment No. 9:
Page 4, line 27, at end insert—
("(1A) In relation to earnings paid with respect to any such employment as may be prescribed, subsection (1) above shall have effect as if the words "the aggregate of and paragraph (b) and the word "and" immediately preceding it were omitted.").
On Question, amendment agreed to.
Clause 5 [Personal pension protected rights premium]:
Baroness Hooper Baroness Hooper moved Amendment No. 10:
Page 6, line 43, leave out from ("relation") to ("were") at page 7, line 7, and insert ("to that person and a widow or widower of that person as if any guaranteed minimum pension to which that person or any such widow or widower is treated as entitled under those provisions, and which derives from the minimum contributions, minimum payments (within the meaning of the Social Security Pensions Act 1975) or transfer payment or payments from which those rights derive").
The noble Baroness said: My Lords, I beg to move Amendment No. 10, with which I propose to discuss Amendments Nos. 11, 13 and 14. These are purely drafting amendments. Clause 5 and paragraph 7 of Schedule 2 provide for protected rights premiums to be paid in certain circumstances and to buy back rights in a state scheme. These amendments ensure that the premium buys back only the state scheme rights which correspond to the protected rights included in the premium. They also ensure that the cost of all the relevant state scheme benefits is assessed in determining what proportion the premium will buy.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 11:
Page 7, line 26, leave out from ("pension") to end of line 27 and insert ("such as is mentioned in subsection (9) above.").
On Question, amendment agreed to.
Schedule 2 [Money purchase contracted-out schemes]:
Lord Banks Lord Banks moved Amendment No. 12:
Page 99, line 4, leave out ("trustees or managers") and insert ("employers").
The noble Lord said: My Lords, I beg to move Amendment No. 12. Clause 6, with Schedule 2, deals with money purchase occupational schemes and the provision for them to be contracted out. In line 4, page 99, of Schedule 2 the Bill refers to the,
"trustees or managers, in their application for a certificate";
that is, a contracting out certificate. Up till now it has been the employer who applies for a contracting out certificate, and it seems right that in this line we should substitute "employers" for "trustees or managers". I beg to move.
Lord Trefgarne: My Lords, this is such an extremely difficult and incomprehensible amendment that the only thing to do is to accept it!
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 13:
Page 100, line 37, leave out from ("relation") to ("were") in line 48 and insert ("to that person and a widow or widower of that person as if any guaranteed minimum pension to which that person or any such widow or widower is treated as entitled under those provisions, and which derives from the minimum payments, minimum contributions (within the meaning of the Social Security Act 1986) or transfer payment or payments from which those rights derive").
On Question, amendment agreed to.
Baroness Baroness Hooper moved Amendment No. 14:
Page 101, line 23, leave out from ("pension") to end of line 25 and insert ("such as is mentioned in subsection (8) above.").
On Question, amendment agreed to.
Clause 7 [Schemes becoming contracted-out between 1986 and 1993]:
Baroness Hooper Baroness Hooper moved Amendment No. 15:
Page 8, line 24, leave out ("to the trustees or managers of the scheme").
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 16:
Page 8, line 34, at end insert—
(" (1 A) The Secretary of State shall make a payment under this section to the trustees or managers of the scheme except that in such circumstances as may be prescribed he shall make such a payment to a prescribed person.").
On Question, amendment agreed to.
Clause 8 [Abolition of requirement relating to requisite benefits]:
Baroness Hooper Baroness Hooper moved Amendment No. 17:
Page 10, line 10, at end insert ("and except to that extent shall be treated for the purposes of section 50 of that Act (requirement of consent of Occupational Pensions Board to alterations of rules of schemes) as if it had never existed").
The noble Baroness said: My Lords, the Occupational Pensions Board frequently have to examine the rules of schemes which, having been set up under interim documentation, replace this retrospectively with definitive documentation. There will usually be a considerable gap, sometimes more than five years, between these events. When, after the date of the coming into effect of Clause 8, the board are examining rules which are effective before that date we do not want them to be under a duty to examine the rules relating to requisite benefits.
This amendment is designed to remove that duty. It would not remove from contracted-out schemes the responsibility for any rules that date from before the clause comes into effect to contain provision for requisite benefits. Its effect would be to allow about 10 trained staff of the board to be moved to duties in connection with the examination of the rules of newly contracted-out schemes or appropriate pension schemes. I beg to move.
Baroness Turner of Camden: My Lords, we on these Benches are prepared to accept this amendment. As far as we can see, it seems to be administratively sensible. I am quite sure that the Occupational Pensions Board would be glad if it were passed, although that is not necessarily a reason for doing so.
On Question, amendment agreed to.
Clause 9 [Guaranteed minimum pensions]:
Baroness Hooper Baroness Hooper moved Amendment No. 18:
Page 13, leave out lines 39 to 43 and insert—
("(8) Except as permitted by subsection (13), (14) or (15) below, the trustees or managers of a scheme may not make an increase in a person's pension which is required by virtue of this section out of money which would otherwise fall to be used for the payment of benefits under the scheme to or in respect of that person unless—

(a) the payment is to an earner in respect of the tax year in which he attains pensionable age and the increase is the one required to be made in the following year; or

(b) the payment is to a person as the widow or widower of an earner who died before attaining pensionable age in respect of the tax year in which the person became a widow or widower and the increase is the one required to be made in the next following tax year.").

The noble Baroness said: My Lords, the purpose of this amendment is two-fold. First, it corrects defects in drafting in order to clarify that an increase in a guaranteed minimum pension may not be paid out of money which would otherwise be used for the payment of a person's benefit under an occupational scheme. In other words, a scheme may not provide a GMP increase by transferring the amount due from any part of a person's occupational pension which exceeds the guaranteed minimum.
Secondly, in order to simplify the arrangements for schemes which increase pensions in payment at times other than the beginning of a tax year, the amendment allows a small relaxation of this rule in relation to the GMP increase due at the beginning of the tax year immediately following that in which a person first becomes entitled to a GMP. It will allow schemes to retain their existing cycle of pension increases and will prevent them having to increase pensions in payment more than once a year. Our aim is to keep the administrative arrangements for occupational pension schemes as simple as possible and I commend the amendment to your Lordships. I beg to move.
Lord Williams of Elvel: My Lords, I wonder whether the noble Baroness can explain the true purpose of this amendment, because I am bound to say that I have some difficulty in understanding it. If I heard what she said correctly and interpreted it correctly, the member of an occupation pension scheme or any other scheme, including the state scheme, who has an entitlement to a benefit which increases with the gross national product, as I

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understood her to say, will be prohibited from taking out a personal pension scheme in which that benefit is enshrined. Is that what the noble Baroness is saying? Is that the purpose of the amendment?
If so, I cannot quite understand why the amendment should be there. Indeed, it seems to me that the amendment should not be there. Perhaps the noble Baroness can clarify my thoughts.
Baroness Hooper: My Lords, this is a very technical and complex area. Indeed, upon reading in Hansard what the noble Lord has said I shall, if necessary, write to him. Perhaps I can slightly simplify it by saying that the effect of the amendment is to make minor drafting changes and also to allow schemes to be exempted from the "anti-franking" rule in the new Section 37A(8) in respect only of the first GMP increase due after entitlement to the GMP arises. That probably does not simplify it and so perhaps I had better resolve the problem by offering to write to the noble Lord with a more detailed explantion.
Lord Williams of Elvel: My Lords, with the leave of the House, perhaps I may accept the kind offer of the noble Baroness to write to me about this saying exactly what it does mean.
Baroness Phillips: My Lords, I would say to the noble Baroness that perhaps it would be more helpful if she did not actually give us an explanation, no doubt provided to her in a brief, that this is a simplification. I cannot think of anything more complicated than this. We had algebra in the Gas Bill last week and now we have it in this Bill as well. It really confuses people, as anybody who has ever tried to fill in a form in relation to any of these matters will agree. If we find it difficult, how much more difficult does the ordinary widow or the ordinary person who has to cope with these things find it? I feel that it is very bad that as we reach this stage of the Bill the Government make this drafting change and then tell us that it is for simplication. I do not say that we shall vote against it, because I do not understand exactly what we would be voting for or against, and I suspect neither do the Government.
On Question, amendment agreed to.
3.45 p.m.
Clause 10[Short-service benefit:qualifying service]:
Lord Banks Lord Banks moved Amendment No. 19:
Page 15, line 40, at end insert—
("( ) This section and section 1 of the Social Security Act 1985 shall override any provision in scheme rules which would otherwise conflict with them.").
The noble Lord said: My Lords, Clause 10 reduces the period after which benefits for early leavers must be preserved and no return of contributions can be obtained by them. The reduction is from five years to two years. Many scheme rules are framed in such a way that the trustees will be unable to eliminate the existing member's right to a refund without having to obtain from the Occupational Pensions Board a modification order. This involves both the trustees and the Occupational Pensions Board in unnecessary administrative work.
A similar diffculty arises with Section 1 of the Social Security Act 1985 which abolished the age limit of 26. This amendment would ensure that Section 1 of the 1985 Act and Clause 10 of this Bill would be binding on scheme members, nowtithstanding the provision of the rules, and would cut out a great deal of unnecessary administrative work and trouble. I beg to move.
Lord Williams of Elvel: My Lords, I should like to support the amendment of the noble Lord, Lord Banks. This is a very complicated area. Early leavers from occupational pension schemes are, and continue to be, a great problem. I note that the noble Baroness, Lady Trumpington, did not reply to my question about the treatment of holders of deferred pensions which I asked earlier. These are the early leavers to whom the noble Lord, Lord Banks, refers. I think that the Government ought to think rather carefully about this.
Baroness Turner of Camden: My Lords, I support the noble Lord, Lord Banks, in his amendment. The Occupational Pensions Board has powers to make modification orders and does so under the present legislation; but if we could have legislation which obviated the need for this to be done, I am sure it would be a great deal better and would certainly save administrative time. I therefore support the amendment.
Lord Pitt of Hampstead: My Lords, I am sorry that I was not in my place when the noble Lord moved his amendment. I regard this amendment as one of the utmost importance. If we do not allow young unemployed people to have this facility—the year when they are unemployed being excluded—they will in fact have a much lower pension than would otherwise be the case. Am I speaking to the wrong amendment?
Lord Ennals: Yes.
Lord Pitt of Hampstead: I apologise, my Lords.
Lord Trefgarne: My Lords, in the hope that I am speaking to the right amendment—and the difficulties for me are no less than the ones that confront the noble Lord, Lord Pitt—may I say that the preservation requirements, which are set out in Schedule 16 to the Social Security Act 1973, are constructed on the basis that they do not have direct effect; it is the responsibility of scheme trustees or managers to make the rules conform with the requirements. It would be anomalous to make changes in the preservation requirements which override scheme rules when the preservation requirements as a whole do not. Compliance with the preservation requirements can, however, be achieved through the powers of the Occupational Pensions Board to modify those rules which conflict with the law, but which schemes are unable or unwilling to change. We still believe that the Occupational Pensions Board modification procedures are the right way to proceed, and I hope that I can persuade the noble Lord, Lord Banks, to agree with me.
Lord Banks: My Lords, I am afraid that I do not agree with the noble Lord. It seems to me that this would be a very considerable simplification, and that appears to have been the feeling of other noble Lords. Nevertheless, I shall not press the amendment at this point but shall consider again what the noble Lord has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 [Contributions to schemes]:
Baroness Hooper Baroness Hooper moved Amendment No. 20:
Page 16, line 21, at end insert—
("( ) must not prohibit, or allow any person to prohibit, the payment by a member of voluntary contributions;").
The noble Baroness said: My Lords, with this amendment I propose to discuss Amendments Nos. 21 to 24. These are purely drafting amendments which ensure that Clause 12 will work as intended. I also commend them to your Lordships as a simplification of the wording of this clause. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendments Nos. 21 to 24:
Page 16, line 23, leave out from ("on") to end of line 26 and insert ("the payment by a member of voluntary contributions").
Page 16, line 27, leave out from ("any") to ("are") in line 29 and insert ("voluntary contributions paid by a member").
Page 16, line 31, leave out from ("provide") to ("and") in line 33 and insert ("additional benefits for or in respect of him").
Page 16, line 35, leave out from ("regard") to end of line 36 and insert—

("(i) to the amount of the voluntary contributions; and

(ii) to the value of the other benefits under the scheme.").

On Question, amendments agreed to.
Lord Banks Lord Banks moved Amendment No. 25:
>Page 16, line 38, at end insert—
("( ) Members of a contracted-out occupational scheme shall be able to make additional voluntary contributions to any personal pension scheme which is not contracted-out.
( ) Members of an occupational scheme which is not contracted-out shall be able to make additional voluntary contributions to any personal pension scheme which may or may not be contracted-out.").
The noble Lord said: My Lords, I moved this amendment in Committee in conjunction with several others with which it formed a package. However, in my opinion it deserves to be considered on its own, and it can certainly stand on its own.
At the present time, a member of an occupational scheme may make additional voluntary contributions to that occupation scheme or to a separate scheme run by his employer for the purpose. The total of his contributions, including the basic contribution to the occupational scheme, must not exceed 15 per cent. of his earnings. Under the Bill,
the Government are instituting a new type of contract—the personal pension. It is similar to the Section 266 retirement annuity, which is also often referred to as a personal pension. It differs from it in that it will be possible to use it for contracting out. However, as I understand it, it need not be used for contracting out. In other words, someone in SERPS will be able to contribute to a personal pension in addition to being in SERPS. Clearly, that personal pension will not be contracted out.
The object of Amendment No. 25 is to permit a member of an occupational scheme, whether or not it is contracted out, to pay additional voluntary contributions into a personal pension as established by the Bill. He is not able to pay such a contribution into a Section 226 policy as matters stand. The case against this amendment put by the noble Baroness, Lady Trumpington, was that there is nothing in social security legislation that prevents a member from paying contributions to any other scheme. The noble Baroness argued that it was only the absence of the tax exemption that prevented it and, so far as that was concerned, the matter was under consideration by the Chancellor of the Exchequer.
I agree that whether or not contributions made to a personal pension scheme enjoy the same tax exemption as those made to the occupational scheme will depend on the tax regime for personal pensions. However, I see no reason why it should not be made clear in the Bill that occupational scheme members can make contributions to personal pension schemes, and that personal pension schemes cannot refuse contributions on the ground that those contributing are members of an occupational scheme, as providers of Section 226 policies would do today. The tax regime for personal pension schemes would then have to apply to the additional voluntary contributions of occupational scheme members.
After all, to take a comparable case, there is nothing in social security legislation to prevent transfer from an occupational scheme to another sort of scheme; that is to say, to a Section 226 scheme. It is the tax regime that is the barrier, yet the Government have taken specific powers in paragraph 13(2)(c) of Section 1A of the Social Security Act 1985 to allow members of occupational schemes to transfer to other schemes. They have made it clear that they will use that for transfers to personal pensions. So there is a precedent for what I suggest.
We are setting up a new type of scheme in personal pensions and it is important to know who may join it. We are dealing with other aspects of the relationship of the occupational scheme to the personal pension scheme—for example, the right to switch from one to another—and so it seems sensible to cover that aspect as well.
The noble Baroness quoted the Chancellor of the Exchequer in his Budget speech as saying:
"I intend later this year to publish detailed proposals designed to give personal pensions the same favourable tax treatment as is currently enjoyed by retirement annuities".—[Official Report, Commons, 18/3/86; col. 176.]
That is to say, they would be treated the same as Section 226 policies. But, if personal pensions are put on precisely the same basis as retirement annuities, then providers of occupational schemes would not be included in the tax regime. If Amendment No. 25 were passed, it would seem that they would have to be. I beg to move.
Baroness Turner of Camden: My Lords, I have little to add to what has been said by the noble Lord, Lord Banks, in moving his excellent amendment. We on these Benches support his amendment and we should like to see the Government support it as well, because that would be in line with their philosophy—which I

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take it is to encourage freedom of choice and also to encourage people to enter into a saving scheme of one sort or another, of which AVCs are a vital part. I therefore support the amendment.
Lord Trefgarne: The noble Lord, Lord Banks, referred just now to the debate in Committee, when he moved an amendment in very similar terms to what was then Clause 14 and is now Clause 15. However, I fully accept that the amendments fit Clause 12 better than Clause 15.I have not overlooked the support that came from my side of the House on that occasion, but I can go no further today than could my noble friend in Committee. She explained then that there is no bar in this Bill or in any other social security legislation on members of occupational pension schemes making additional voluntary contributions to other sorts of pension scheme. But I have to say that no purpose would be served by giving them a right in this Bill to make such contributions.
The reason is that what really matters in that context is the tax rules. At the moment, tax relief is only available for additional voluntary contributions which a member of an occupational pension scheme makes within his scheme. AVCs made by someone who is in an occupational pension scheme to a personal pension would not qualify for tax relief. What is more, a personal pension scheme that accepted such contributions would lose its tax exempt status. That means that all their income and capital gains would be subject to tax and hence the interest of all the scheme members would be most adversely affected.
When we debated this issue in Committee, my noble friend reminded your Lordships of the Chancellor of the Exchequer's announcement in his Budget speech that he would be issuing consultative proposals later in the year on the tax treatment of personal pensions. However, I cannot anticipate what will be in my right honourable friend's consultative proposals. Your Lordships may feel, in the light of what I have said, that it would not be appropriate to pursue this matter, which is essentially a tax issue.
Perhaps I ought to add that the amendment as it stands is technically defective, with the reference that it makes to, "a contracted-out occupational scheme". While that is convenient shorthand and we all understand what it means, it is not a term to be found in this Bill or that would identify any particular scheme. The correct term is an "appropriate" scheme, as set out in Clause 2 and Schedule 1.I do not rest my arguments solely on the technical inadequacies of the amendment but rather on the issues of principle that I addressed earlier and which I hope will persuade the noble Lord, Lord Banks.
Lord Ennals: My Lords, before the Minister sits down, and accepting that this also is a tax issue, since the noble Lord has himself said that there is an entitlement to pay additional contributions, then why does he not agree that it should be in the Bill? Is it not a good thing that people should follow such a course; and if it is a good thing, then is it not a good thing also to put such a provision in the Bill?
Lord Trefgarne: My Lords, that is a doctrine that has been deployed on a number of occasions in your
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Lordships' House on a number of different Bills. It is not one to which I would normally subscribe.
Lord Banks: My Lords, to deal first with the technical objection that the Minister made, if the amendment were passed, then I am sure that he could table a satisfactory amendment of his own, given all his experience and skill, to meet the point that he so clearly outlined.
The Minister said again that there is no bar to the payment of contributions. However, in the course of my remarks I gave examples—and the noble Lord did not address himself to this point—of where the Government, in a very similar situation where there was no bar to a particular process, nevertheless wrote it into the Bill—a matter relating to pensions. So if one can do it on one occasion, there seems no reason why one should not do it on another. Nor did the Minister address himself to the argument that if the amendment was to be passed, it would be inevitable that the tax regime for personal pensions would cover additional voluntary contributions from pension schemes. I am not satisfied with the arguments that the noble Lord has put forward and I should like to test the opinion of the House.
3.59 p.m.
On Question, Whether the said amendment (No. 25) shall be agreed to?
Their Lordships divided: Contents, 88; Not-Contents, 139.

DIVISION NO.1

CONTENTS

Amherst, E.

Houghton of Sowerby, L.

Ardwick, L.

Hunt, L.

Banks, L.

Jacques, L.

Barnett, L.

Jeger, B.

Blease, L.

Jenkins of Putney, L.

Blyton, L.

John-Mackie, L.

Bottomley, L.

Kennet, L.

Briginshaw, L.

Kilmarnock, L. [Teller.]

Brockway, L.

Leatherland, L.

Bruce of Donington, L.

Lincoln, Bp.

Buckmaster, V.

Listowel, E.

Burton of Coventry, B.

Llewelyn-Davies of Hastoe, B.

Caradon, L.

Lockwood, B.

Carmichael of Kelvingrove, L.

Mackie of Benshie, L.

Cledwyn of Penrhos, L.

McNair, L.

Darwen, L.

Mais, L.

David, B.

Mayhew, L.

Davies of Penrhys, L.

Milford, L.

Dean of Beswick, L. [Teller.]

Morton of Shuna, L.

Diamond, L.

Nicol, B.

Dowding, L.

Ogmore, L.

Elwyn-Jones, L.

Oram, L.

Ennals, L.

Phillips, B.

Ewart-Biggs, B.

Pitt of Hampstead, L.

Ezra, L.

Plant, L.

Falkender, B.

Ponsonby of Shulbrede, L.

Fisher of Rednal, B.

Rathcreedan, L.

Fitt, L.

Ritche of Dundee, L.

Gallacher, L.

Robson of Kiddington, B.

Gladwyn, L.

Rochester, L.

Glenamara, L.

Sainsbury, L.

Graham of Edmonton, L.

Seear, B.

Grey, E.

Serota, B.

Grimond, L.

Shackleton, L.

Hampton, L.

Shepherd, L.

Hatch of Lusby, L.

Stallard, L.

Heycock, L.

Stedman, B.

Hirshfield, L.

Stoddart of Swindon, L.

697

Swann, L.

Wallace of Coslany, L.

Taylor of Blackburn, L.

Wells-Pestell, L.

Taylor of Mansfield, L.

Wigoder, L.

Tordoff, L.

Williams of Elvel, L.

Turner of Camden, B.

Wilson of Langside, L.

Underhill, L.

Ypres, E.

NOT-CONTENTS

Ailsa, M.

Kinloss, Ly.

Aldington, L.

Kinnaird, L.

Alexander of Tunis, E.

Kintore, E.

Allen of Abbeydale, L.

Lane-Fox, B.

Alport, L.

Lauderdale, E.

Ampthill, L.

Layton, L.

Arran, E.

Long, V.

Atholl, D.

Lucas of Chilworth, L.

Auckland, L.

Luke, L.

Barber, L.

Lyell, L.

Bauer, L.

McFadzean, L.

Belhaven and Stenton, L.

Macleod of Borve, B.

Beloff, L.

Malmesbury, E.

Belstead, L.

Mancroft, L.

Bessborough, E.

Massereene and Ferrard, V.

Blyth, L.

Maude of Stratford-upon-

Bolton, L.

Avon, L.

Boyd-Carpenter, L.

Merrivale, L.

Brabazon of Tara, L.

Mersey, V.

Braye, B.

Montgomery of Alamein, V.

Brougham and Vaux, L.

Mowbray and Stourton, L.

Buccleuch and Queensberry,

Munster, E.

D.

Murton of Lindisfarne, L.

Butterworth, L.

Newall, L.

Caithness, E.

Northesk, E.

Cameron of Lochbroom, L.

Nugent of Guildford, L.

Campbell of Alloway, L.

Onslow, E.

Carnegy of Lour, B.

Orkney, E.

Carnock, L.

Orr-Ewing, L.

Cathcart, E.

Pender, L.

Coleraine, L.

Penrhyn, L.

Constantine of Stanmore, L.

Plummer of St. Marylebone,

Crawshaw, L.

L.

Davidson, V.

Porritt, L.

De Freyne, L.

Portland, D.

Denham, L. [Teller.]

Portsmouth, E.

Denning, L.

Rankeillour, L.

Derwent, L.

Renton, L.

Drumalbyn, L.

Romney, E.

Dulverton, L.

Saint Brides, L.

Dundee, E.

St. Davids, V.

Eden of Winton, L.

Saint Oswald, L.

Effingham, E.

Sandys, L.

Ellenborough, L.

Savile, L.

Elliot of Harwood, B.

Seebohm, L.

Elphinstone, L.

Skelmersdale, L.

Elton, L.

Slim, V.

Faithfull, B.

Somers, L.

Forbes, L.

Stanley of Alderley, L.

Fraser of Kilmorack, L.

Stodart of Leaston, L.

Gainford, L.

Strathclyde, L.

Gardner of Parkes, B.

Strathcona and Mount Royal,

Glanusk, L.

L.

Glenarthur, L.

Strathspey, L.

Gridley, L.

Sudeley, L.

Hailsham of Saint

Swinton, E. [Teller.]

Marylebone, L.

Teviot, L.

Harmar-Nicholls, L.

Teynham, L.

Henderson of Brompton, L.

Thorneycroft, L.

Henley, L.

Torphichen, L.

Hesketh, L.

Tranmire, L.

Hives, L.

Trefgarne, L.

Home of the Hirsel, L.

Trenchard, V.

Hood, V.

Trumpington, B.

Hooper, B.

Vaux of Harrowden, L.

Hylton-Foster, B.

Vickers, B.

Jessel, L.

Vivian, L.

Kemsley, V.

Waldegrave, E.

Keyes, L.

Whitelaw, V.

Killearn, L.

Wynford, L.

Kimball, L.

Yarborough, E.

Kimberley, E.

Young, B.

On Question, amendment agreed to.

4.8 p.m.
Clause 15 [Terms of contracts of service or schemes restricting choice to be void]:
Baroness Hooper Baroness Hooper moved Amendment No. 26:
Page 19, line 17, leave out from ("schemes") to ("that") in line 18 and insert ("shall be void; and
(b) any such term or rule to the effect").
The noble Baroness said: My Lords, in moving this amendment I propose to refer also to Amendment No. 27. These are drafting amendments, the effect of which is to substitute a revised version of Clause 15(1 )(b). I beg to move.
Baroness Turner of Camden: My Lords, I accept that these are drafting amendments and therefore I do not intend to speak to them at length. We on this side of the House do not like the provisions in Clause 15 anyway and all that these amendments do is strengthen the provisions already there. Those are my only comments.
Baroness Hooper Baroness Hooper moved Amendment No. 27:
Page 19, line 20, leave out from ("scheme") to end of line 22 and insert ("of which the earner is not a member, or to one or other of a number of personal or occupational pension schemes of none of which he is a member, shall be unenforceable for so long as he is not a member of the scheme or any of the schemes.").
Clause 18 [Additional pensions]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 28:
>Page 22, line 44, at end insert—
("( ) was unemployed and capable of work and was, or is deemed in accordance with regulations to have been, available to be employed;
or").
The noble Baroness said: My Lords, I rise to move Amendment No. 28. It will be recalled that during the Committee stage we on this side sought to retain the "best 20 years" rule in the state earnings related pension scheme because we believe that it is a way of protecting those who have chequered work patterns, who pass in and out of the workforce, and who therefore do not have the same possibility of reaching maximum pension entitlement as do people with a consistent work record.
The Government have come to some terms with our fears in relation to women who spend some time out of the workforce for domestic or caring reasons. However, in Committee the Government were not prepared to meet our arguments in relation to the effect on unemployed people. Because SERPS began in 1978 it will be only in 1999 that the "best 20 years" calculation begins to take practical effect and it is only in 1999 that the provision to change the basis of the calculation to a lifetime's earnings instead will be implemented. This has resulted in a tendency to assume that those in the workforce today will not be affected by this change, and remarks by Ministers have contributed to this misconception. During the Committee in another place, speaking specifically about unemployed people, the Minister of State said:
"While I do not in any way suggest that there may not be a problem in relation to this group in the early part of the next

699
century, I think that it is a problem which can be sensibly examined in relation to the unemployment problem that exists at that time and is not one that we need to settle at this time".—[Official Report, Commons; Standing Committee B; col. 439.]
The noble Baroness, Lady Trumpington, when introducing the Bill into your Lordships' House, stressed the Government's view that:
"there is no great urgency about any of this. The SERPS protection does not start to apply until 1999 which is when the 'best 20 years' rule would have come into effect".—[Official Report, 3/6/86; col. 683.]
She confirmed this view in a speech that she made at Committee stage.
Far from being a matter which can be left for the future, unless it is affected by amendment in your Lordships' House this change will adversely affect the pensions of many people who at the moment are either young or middle aged. For example, a man who is 20 in 1988 and who is unemployed from 1988 to 1993 will lose 5 years from the pension that he will receive in the year 2033. Under the "best 20 years" rule he would have received a full pension despite this period of unemployment.
Particular concern must be felt for older men and women who become unemployed. They see their pension rights diminishing but probably have little chance of further employment before retirement to redress the balance. In January 1986 there were 207,500 such people over the age of 55 who had been registered as unemployed for over a year. The Government seem to be arguing that the unemployment situation does not exclude people from working and thus contributing for long periods. Indeed, the noble Baroness, Lady Trumpington, observed at Committee stage that there was a case for protecting the position of people who were out of the workforce for long periods of time and for whom the "best 20 years" rule was originally intended.
However, she maintained that certain other categories of people, including the unemployed, are by and large out of the workforce for shorter periods, when looked at in the context of a whole working lifetime. This view fails to take into account the number of people who are unemployed for very long periods. In April 1986 there were 1,805,870 people of all ages who had been registered as unemployed for over 5 years. The arbitrary nature of the effect of unemployment adds weight to the call for protection to be extended to unemployed people. It is unjust to require that people should be additionally disadvan-taged because they become unemployed. For these reasons I commend the amendment to your Lordships. I beg to move.
Lord Banks: My Lords, I should like very briefly to support the amendment which has been moved so ably by the noble Baroness. We agree that the abolition of the 20-year rule hits some groups of people particularly hard, and we believe that the unemployed should be regarded as one such group, requiring special treatment. For those reasons we support the amendment.
Lord Pitt of Hampstead: My Lords, this is the amendment to which I intended to speak earlier, when I first arrived. Someone had told me that Clause 18
700
was on the board (obviously it was Amendment No. 18), and so I rushed in and when I did not see anybody speaking I thought I had better say something.
I regard this amendment as a very important one, and I hope that the Government will accept it. As the noble Lord, Lord Banks, has just said, the abolition of the "best 20 years" rule means that some people will be adversely affected. Let us face it: unemployment is one of the problems of today. To be honest, it may well be one of our problems for a long time to come. When people are unemployed they are suffering at that time, and it is wrong for us to say that in old age also they should suffer because of the fact that they were unemployed earlier. Leaving out that period from the calculation will enable them to have a better pension than they otherwise might have had. I hope that the Government will give serious consideration to accepting this amendment. I am sure that it is of the utmost importance, in particular to the young.
4.15 p.m.
Lord Stallard: My Lords, I, too, want to support this amendment. Although the Government, and indeed the noble Baroness herself, expressed concern about this matter, the noble Baroness did not go far enough. She did not accept that there would be a problem affecting people now. She has repeated what was said at the Committee stage of the Bill in another place and told us not to worry: because this measure will not take effect for a long time yet and because nothing will happen until 1999, we should not bother about it since it is not an immediate problem.
As has been pointed out by the noble Baroness, Lady Turner, it is an immediate problem. There are people who are unemployed now who will be affected by this measure, and we have to deal with that problem now. However, there is more to it than that; to my mind the question goes deeper. It appears that those people unemployed in an area of high unemployment at the moment (such as Newquay, where the unemployment rate is about 28.5 per cent.) will be more disadvantaged than people in an area where unemployment is not so high (for example, Crawley, where the unemployment rate is about 5.6 per cent.). Why are people in those areas of high unemployment to be more disadvantaged than people in the other areas when they come to collect their pensions?
There is a great deal of concern about this measure which affects people who are in the workforce at the moment, and I do not think that the Government have answered that concern. Unless the Government will give us more assurances than hitherto, I shall have to support this amendment also.
Lord Ennals: My Lords, having been involved with the establishment of the Act from its earliest stages, perhaps I may say a very brief word on this matter. The "best 20 years" rule was perhaps one of the most important elements within the Bill that eventually became an Act. Another important element was the provision which ensured that the scheme would reach maturity in 20 years' time. We consciously put this provision into the 1975 Act so that those people who were already disadvantaged would not be disadvan-taged in their retirement years.

701
We looked at a whole range of people who were already disadvantaged, including the disabled, and the unemployed—no matter what was the cause of their disadvantage. We said—and, thank heavens, the Government have accepted this—that women who rear young families will not have a full work record. It is a relief to us that that view has been accepted by the Government in the present legislation so that women may take 10 years out from employment without suffering when it comes to their pension entitlement. That is good; but I do not understand why the Government have decided, as it seems they have, to have "a down" on the unemployed. Quite clearly, unemployed people are disadvantaged at the moment of their unemployment, and the longer they are unemployed the longer that disadvantage endures. To perpetuate that disadvantage into their years of retirement seems to me to be a very harsh measure to take.
We recognise from previous debates that the Government will not return to the "20 best years" rule—and we thought of it in terms of miners, engineers, road workers, and so on, so that it covered the whole range of the population—but we feel that the amendment should at least take in the unemployed as well as housewives and mothers.
They may be a relatively small proportion, but they are extremely disadvantaged. I plead with the Government to accept that the amendment is much less than the one we put forward before. We have picked on the one group that is greatly disadvantaged. I can see no reason why that disadvantage should be maintained into their retirement years.
Baroness Gardner of Parkes: My Lords, I find the amendment worrying because it singles out one category, and I do not think that it would work in the interests of women, in particular those who have given up work to be at home with their children. They are covered for the time they are at home, but if a woman wished to return to work part time, she would be disadvantaged more by that because that would be included in the period of employment, and yet it would lower her average earnings over the years. There would be every incentive for her not to return to work but simply to sign the form saying that she was available for work.
Many women like to work part time. They like the additional income and the satisfaction of working. I cannot see that the amendment is in their interests. I believe that the 20-best-years proposal was a good one, but I do not support the amendment because it singles out one category and does not help all.
The Lord Bishop of Lincoln: My Lords, I support the amendment. It has been spoken to so eloquently that I do not wish to add to what has been said about the unemployed. I support it in principle and because I come from a part of the world where unemployment is above the national average.
Lord Trefgarne: My Lords, as has been explained, this amendment would extend to unemployed people who have been available for employment the special protection of SERPS rights, which we have already
702
made clear we shall provide for disabled people, mothers caring for children and people caring for disabled people. In other words, it would enable anyone who qualified for national insurance contribution credits for unemployment to have any years of such credits excluded from the number of years over which their earnings would be averaged for SERPS.
There is a strong case for making special arrange-ments for mothers and disabled people, because they can be out of the workforce for very long periods. But the position of unemployed people is different. Their spells out of the workforce tend to be much shorter when looked at in the context of a whole working lifetime.
As my noble friend Lady Trumpington made clear during Committee stage, we do not consider that it is necessary at this stage to make specific provision to cover the position of unemployed people who retire next century. I should make it absolutely clear to your Lordships that what we are concerned with here is people who reach retirement age in the next century. Men over the age of 52 and women over 47 will not be affected at all by the proposed modifications to SERPS. The effects of the abolition of the 20-best-years rule on younger people who retire next century will build up gradually. For example, men retiring 20 years from now in 2006 will have their SERPS calculated on earnings averaged over 28 years from 1978, and it will not be until 2027 that men's SERPS pensions will be calculated over a full working lifetime of 49 years.
During discussion of this question in Committee the noble Baroness, Lady Turner, said that she did not accept that the abolition of the 20-best-years rule would not affect people for a long time, and she quoted the example of a 20-year-old man in 1988 who was unemployed from 1988 to 1993 and would lose five years from his pension. The point I want to make is that, while it is true that under the proposed arrange-ments those five years would be included in the calculations of his lifetime's average earnings, the effects of that would not actually apply until 2033, when he reached retirement age.
We believe that it is better to wait until nearer the time that the abolition of the 20-best-years rule begins to take effect before deciding what action, if any, needs to be taken to protect the position of unemployed people. We do not believe that it is right to take decisions now, based on unknown future levels of unemployment. It is much better to wait and see what the actual unemployment figures are up to the end of the century and the effects that these will have on individuals' pensions. That is why we have ensured that the regulation-making power in Clause 18 is sufficiently wide to enable a future administration to take whatever action, if any, they consider may be necessary to protect the position of unemployed people, or indeed any other group, without the need for further primary legislation.
I should also explain to your Lordships that as people who are unemployed and available for work already qualify for national insurance contribution credits for the purposes of their basic pension calculation, there would be no difficulty in identifying those who would also qualify for protection of their

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SERPS rights if such protection were to be extended to them in the future.
We do not believe that there is a case for making specific provision for unemployed people at the present time. But the power is already in Clause 18 if a future administration wish to use it. For that reason I hope that the amendment will not be pressed.
Lord Ennals: My Lords, with the leave of the House, the Minister said that the majority of people are unemployed for only a short time. A significant number may be out of work for a few months only and then go back into another job. But my noble friend said that in April 1986 there were unemployed 1,805,000 people of all ages; many of them were middle-aged and will never have work again. When the calculation comes to be made, they will inevitably find that their pension is lower because they have the disadvantage of being unemployed. How has the Minister applied his mind to that problem?
Lord Trefgarne: My Lords, if I need your Lordships' permission to speak again, and if I have it, let me say that we are dealing with a fairly narrowly based problem. There are too many people in the circumstances that the noble Baroness and the noble Lord have described, or indeed in any unemployment category. Nonetheless those currently unemployed for over five years account for less than 1 per cent. of the working population. I should prefer the number to be substantially less. But I do not think that the amendment proposes an appropriate solution.
Baroness Turner of Camden: My Lords, I am disappointed with the noble Lord's response, as I am sure most of us are on this side of the House. In putting the amendment forward we thought that we were being reasonably constructive and making a suggestion that the Government would find acceptable. Protection has already been written in for the sick, the disabled, mothers and other carers, and we commend that action.
The noble Baroness, Lady Gardner, mentioned women working part time. All I can say is that in Committee I referred to the propositions of the Equal Opportunities Commission to deal with part timers and said that we should support such a solution. There are problems about the work record and pension entitlement of women who spend a number of years working part time. However, since the Government did not respond, we decided to press the issue which seemed to us of most importance—the long-term unemployed—which is what all this is about.
The noble Lord referred to the item that I quoted. But when I spoke originally I said that I was talking about a pension that the individual would receive in 2003. Pensions involve the long-term future. Indeed, I thought that that was what the Government had in mind when they told us and the country at large that we could no longer afford SERPS and the best 20 years. They were looking to the future. In many parts of the country unemployment is exceptionally high, and people in those areas also look to the future. It is on their behalf that I wish to press the amendment, as I find the noble Lord's response entirely unacceptable and unsatisfactory.
4.30 p.m.
On Question, Whether the said amendment (No. 28) shall be agreed to?
Their Lordships divided: Contents, 97; Not-Contents, 146.

DIVISION NO.2

CONTENTS

Airedale, L.

Lincoln, Bp.

Amherst, E.

Listowel, E.

Ardwick, L.

Llewelyn-Davies of Hastoe, B.

Banks, L.

Lockwood, B.

Barnett, L.

Lovell-Davis, L.

Blease, L.

Mackie of Benshie, L.

Blyton, L.

McNair, L.

Bottomley, L.

Mais, L.

Briginshaw, L.

Mayhew, L.

Brockway, L.

Milford, L.

Bruce of Donington, L.

Morris of Kenwood, L.

Buckmaster, V.

Morton of Shuna, L.

Burton of Coventry, B.

Murray of Epping Forest, L.

Caradon, L.

Nicol, B.

Carmichael of Kelvingrove, L.

Ogmore, L.

Chitnis, L.

Oram, L.

Cledwyn of Penrhos, L.

Paget of Northampton, L.

Darcy (de Knayth), B.

Phillips, B.

Darwen, L.

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L.

Davies of Penrhys, L.

[Teller.]

Dean of Beswick, L.

Rathcreedan, L.

Diamond, L.

Rea, L.

Elwyn-Jones, L.

Ritchie of Dundee, L.

Ennals, L.

Robson of Kiddington, B.

Ewart-Biggs, B.

Rochester, L.

Ezra, L.

Sainsbury, L.

Falkender, B.

Seear, B.

Falkland, V.

Seebohm, L.

Fisher of Rednal, B.

Serota, B.

Fitt, L.

Shepherd, L.

Gallacher, L.

Silkin of Dulwich, L.

Gladwyn, L.

Stallard, L.

Glenamara, L.

Stedman, B.

Graham of Edmonton, L.

Stoddart of Swindon, L.

Grey, E.

[Teller.]

Hampton, L.

Taylor of Blackburn, L.

Hanworth, V.

Taylor of Mansfield, L.

Hatch of Lusby, L.

Tonypandy, V.

Heycock, L.

Tordoff, L.

Hirshfield, L.

Turner of Camden, B.

Houghton of Sowerby, L.

Underhill, L.

Hunt, L.

Wallace of Coslany, L.

Jacques, L.

Wells-Pestell, L.

Jeger, B.

Wigoder, L.

Jenkins of Putney, L.

Williams of Elvel, L.

John-Mackie, L.

Wilson of Langside, L.

Kilbracken, L.

Young of Dartington, L.

Kilmarnock, L.

Ypres, E.

Leatherland, L.

NOT-CONTENTS

Ailsa, M.

Brougham and Vaux, L.

Aldington, L.

Broxbourne, L.

Alexander of Tunis, E.

Bruce-Gardyne, L.

Ampthill, L.

Buckinghamshire, E.

Atholl, D.

Butterworth, L.

Auckland, L.

Caithness, E.

Barber, L.

Cameron of Lochbroom, L.

Bauer, L.

Campbell of Alloway, L.

Belhaven and Stenton, L.

Carnegy of Lour, B.

Beloff, L.

Carnock, L.

Belstead, L.

Cathcart, E.

Bessborough, E.

Coleraine, L.

Blyth, L.

Constantine of Stanmore, L.

Bolton, L.

Craigavon, V.

Boyd-Carpenter, L.

Cross, V.

Brabazon of Tara, L.

Cullen of Ashbourne, L.

Braye, B.

Davidson, V.

705

De Freyne, L.

Merrivale, L.

Denham, L. [Teller.]

Mersey, V.

Denning, L.

Montgomery of Alamein, V.

Derwent, L.

Mountgarret, V.

Drumalbyn, L.

Mowbray and Stourton, L.

Dulverton, L.

Munster, E.

Dundee, E.

Murton of Lindisfarne, L.

Eden of Winton, L.

Newall, L.

Ellenborough, L.

Northesk, E.

Elles, B.

Nugent of Guildford, L.

Elliot of Harwood, B.

Onslow, E.

Elliott of Morpeth, L.

Orkney, E.

Elphinstone, L.

Orr-Ewing, L.

Elton, L.

Pender, L.

Forbes, L.

Penrhyn, L.

Gardner of Parkes, B.

Plummer of St Marylebone,

Glanusk, L.

L.

Glenarthur, L.

Porritt, L.

Gridley, L.

Portland, D.

Grimthorpe, L.

Portsmouth, E.

Hailsham of Saint

Rankeillour, L.

Marylebone, L.

Renton, L.

Hanson, L.

Rodney, L.

Harmar-Nicholls, L.

Romney, E.

Henderson of Brompton, L.

St. Davids, V.

Henley, L.

Saint Oswald, L.

Hesketh, L.

Sandford, L.

Hives, L.

Sandys, L.

Home of the Hirsel, L.

Savile, L.

Hood, V.

Sharples, B.

Hooper, B.

Skelmersdale, L.

Hylton-Foster, B.

Slim, V.

Jessel, L.

Somers, L.

Kaberry of Adel, L.

Stodart of Leaston, L.

Kemsley, V.

Strathclyde, L.

Keyes, L.

Strathcona and Mount Royal,

Killearn, L.

L.

Kimball, L.

Strathspey, L.

Kimberley, E.

Sudeley, L.

Kinnaird, L.

Swann, L.

Kintore, E.

Swinton, E. [Teller.]

Lane-Fox, B.

Teviot, L.

Layton, L.

Teynham, L.

Liverpool, E.

Thorneycroft, L.

Long, V.

Torphichen, L.

Lucas of Chilworth, L.

Tranmire, L.

Luke, L.

Trefgarne, L.

Lyell, L.

Trenchard, V.

McAlpine of West Green, L.

Trumpington, B.

McFadzean, L.

Vaux of Harrowden, L.

Macleod of Borve, B.

Vickers, B.

Malmesbury, E.

Vivian, L.

Mancroft, L.

Waldegrave, E.

Margadale, L.

Whitelaw, V.

Marshall of Leeds, L.

Wynford, L.

Masham of Ilton, B.

Yarborough, E.

Massereene and Ferrard, V.

Young, B.

Maude of Stratford-upon-

Avon, L.

On Question, amendment agreed to.

4.38 p.m.
Baroness Hooper Baroness Hooper moved Amendment No. 29:
Page 23, line 25, leave out ("6th") and insert ("5th").
The noble Baroness said: My Lords, this is a drafting amendment which corrects an incorrect date in Clause 18(6). I beg to move.
Baroness Phillips: My Lords, I would only point out that while the amendment corrects the date in this case, there seems to be some confusion about whether the Government want 5th or 6th April. When one comes to the next page the date appears to be floating between a wife who dies after 5th April and a wife who dies before 6th April. That poses some interesting
706
possibilities. What is so magic about 5th April? I have been trying to check when the tax year ends and obviously it is a different date each year.
Before we come to the next stage of the Bill perhaps we can have a fuller explanation of this clause. It is bad enough trying to decipher:
"N=the number of tax years which begin after 6th April 1978 and end before the first day of entitlement to the additional pension in the period of interruption of employment in which that day falls".
It is bad enough having to interpret that, but if we are to be tied to certain dates, which seem to be elastic, I should be grateful for a fuller explanation before the next stage of the Bill.
Baroness Hooper: My Lords, with the leave of the House, I must say that I sympathise with the noble Baroness over the complexity of this and many clauses of the Bill. Nevertheless, the aim of this amendment is to achieve consistency in having 5th April stated in all the subsections. In fact 6th April is the start of the tax year. That is the reason for having 5th April as the end.
Lord Banks Lord Banks moved Amendment No. 30:
Page 23, line 35, at end insert—
("( ) Regulations requiring an affirmative resolution of both Houses of Parliament shall provide for the pensionable age for men and women to be equalised within a period of time to be prescribed.").
The noble Lord said: My Lords, in its report published in October 1982 the Social Services Committee of another place said:
"The rectification of the anomaly of different pension ages for men and women must be one of the prime objectives of any new pension age policy".
Yet the Bill before the House contains no proposals to that end. It is generally agreed that we want a pension system based on equality between men and women. We on these Benches welcome all steps taken to remove discrimination against women in our social security system. It cannot be denied, however, that the current position with regard to pension age discriminates against men. Although they do not live so long, they have to wait five years longer for their pension. However, following the Marshall case, women cannot be compelled to retire five years earlier than men (and I support that); but if they continue to work, they can postpone their pension and have it enhanced for the years of deferment between the age of 60 and 65. Meanwhile, they pay no further national insurance contributions. This clearly puts the working woman over 60 at a considerable advantage compared to her male counterpart.
The case for the equalisation of the pension ages of men and women is very strong and is supported in principle by nearly all expert opinion. There are three possible ways of doing it: one is by increasing women's normal retirement age to 65; another is by reducing men's normal retirement age to 60; and the third is to fix on some point somewhere in between. I imagine that most of us would not support raising women's normal retirement age to 65. The trouble about reducing the retirement age for men to 60 is simply the cost. Otherwise, it is the obvious choice. The Government spokesman will tell us what it would cost at current prices.
The Select Committee of another place recommen-ded a notional common pension age of 63. If this choice was phased in over a period of years, the additional cost could more easily be met. But, of course, care would have to be taken to safeguard the position of women near to retirement who had been planning for a retirement pension at 60. Not only do we want equality; we want flexibility. While there should be an equal normal retirement age, earlier or later retirement over a period of, say, 10 to 15 years, should be possible with the pension decreased or increased accordingly. This amendment would write into the Bill a commitment to equalise the pension age over a prescribed period. It does not commit the Government to a specific normal retirement age. Nor does it say how long the transitional period would be. Its acceptance, however, would make clear the Government's commitment to equalisation. I beg to move.
Baroness Turner of Camden: My Lords, I support the amendment moved by the noble Lord, Lord Banks. From time to time we have raised from this side of the House the equalisation of pension ages. In fact, I recall doing so when the Marshall judgment was announced. The Government said then that they intended to introduce legislation via the Sex Discrimi-nation Bill which would allow women to work to the same age as men where there were differential retirement ages.
Although the noble Lord, Lord Banks, has described the effects of different pension ages upon women as beneficial to some degree, there are other effects that have been less beneficial. One of these, in respect of the standard occupational scheme, is that many women were not able to get in the number of years of work to qualify for a full pension in the same way that men were able to do where the normal pension retirement age for men was 65. Although women could admittedly retire earlier, they did so on a rather less good pension.
I believe that there is a strong case for equalisation of pension benefits. Indeed, when the Occupational Pensions Board considered equality between men and women in pension schemes way back in 1976, one of its recommendations was that there should be equalisation of pension ages. But the then Government told the board that it would be rather too expensive a proposition to reduce the retirement age for men to 60. Nevertheless, the board said in its report that equalisation of pension benefits was very difficult in a situation where there were different retirement ages.
I believe that the Marshall judgment has focused attention on retirement ages. There is now, I believe, a strong body of opinion in the country that believes that there should be equalisation of pension benefits and equalisation of pension ages. One solution that I personally favour is to have flexibility. There should be an element of choice for both sexes equally so that both sexes could choose to retire at any time between 60 and 65. That would be a reasonable solution. It has been shown, as a result of the Marshall judgment, that many women would like to work on until 65 if this meant that they could acquire additional pension benefit.
708
The amendment proposed by the noble Lord, Lord Banks, requires that an affirmative resolution of both Houses of Parliament should provide for the pensionable age of both men and women to be equalised within a period of time to be prescribed. It does not say that we have to do so tomorrow. It gives us time, as I understand it, for consideration of the issues that are involved. It seems a sensible and reasonable amendment and I have pleasure in supporting it.
4.45 p.m.
Lord Trefgarne: My Lords, I am pretty accustomed to rising at this Box and saying how surprised I am that this amendment should be brought forward yet again. I cannot say that on this occasion. This amendment was not brought forward at an earlier stage; and such surprise as I have is perhaps that it was not brought forward at an earlier stage, given that it is a matter of such considerable interest at the present time.
I understand that your Lordships are concerned that the equalisation for state pension age should be brought about as soon as possible. The Government agree with that view. But the issue is too major to be tackled by this proposed amendment, and particularly by a regulation-making power. Equalisation of pension age would require extensive amendment to existing pensions legislation. It could not be achieved, I fear, in the way proposed in the amendment.
The Government's views on equality in state pension age are a matter of public record. We regard such equality as a highly desirable social objective. I hope that in seeking this amendment your Lordships do not have in mind a single, inflexible minimum pension age for men and women, because clearly such a move would not be in the interests of greater individual choice in the matter. I am sure that your Lordships need no reminder of the recent judgment of the European Court of Justice in the case of Miss Helen Marshall, already referred to. Miss Marshall showed that some women want to work past 60, their present minimum pension age. Conversely, some men would like to retire on state pension at 60, or, in my case, at 45—a choice which is not at present open to them.
The Government believe that we must take individual wishes into account rather than seek to impose yet another single rigid minimum pension age which would restrict individual choice in this important matter. That is why the Government put forward in the Green Paper last year the suggestion of a decade of retirement between the ages of 60 and 70 with a pivotal point of age 65, around which men and women could retire with a higher or lower state pension, according to their own personal needs and wishes. This is the objective we intend to pursue, as we made clear in the White Paper.
But even if this amendment were a sound way of achieving equalisation—and I fear it is not—it would be rash to introduce it now without a clear idea of exactly how to make the change or how it would be financed when the time is up. Cost is genuinely formidable obstacle to change and a major reason for caution. Reducing men's pension age to 60 would involve additional public expenditure of some £3,000 million in a full year. And the effect on

709
unemployment, often given as a reason for change, would not be as dramatic as is commonly believed. Only about half of all men aged between 60 and 64 are working. Of those who are, not all would immediately choose to retire on state pension, nor would all those who choose to do so create a job opportunity for someone else from the registered unemployed. Certainly, the cost implications of flexible pension age would be less great than the £3,000 million that I have quoted, but we would nevertheless still be facing a very expensive development. And here we should also remember the effect such increased expenditure would have on the working population, because it is they who pay today's pensions from their national insurance contributions.
The Government do not believe, in view of the formidable problems involved, that it is possible to bring forward firm proposals now; otherwise we would have done so. The Government are, and will remain, committed to the achievement of equality in state pension age, but we cannot possibly agree that the time for achieving it should be set out before the way forward is clear. For those reasons I hope that your Lordships will not press the amendment.
Lord Ennals: My Lords, the noble Lord said that he was surprised that this matter had not been raised before. He may also be surprised to learn that I wish to support him as regards everything he said, except his final conclusion. I wish to support him very strongly on the concept that we should not be moving towards a single, inflexible pension age. I say that as someone who was a Member of the House of Commons Select Committee in another place at the time when it was drawing up its proposals.
The case for flexibility is very powerful indeed. One reason is that people live totally different lives. In the case of a miner or a road repairer doing some very heavy work which may of itself not be very rewarding, there is everything to be said for permitting such a person to retire early. Of course if he retires below a certain age, it will affect his pension entitlement, and that is inevitable if the system is to be fair.
However, that opportunity is linked not only to the fact that people's jobs vary, but also to the fact that people themselves vary. There are those people for whom life is work and for whom the absence of work means almost the absence of a full, complete life. There are two effects. First, there is the effect on those who may wish to retire earlier not because they are exhausted but because they want to spend the rest of their life in a different way. If they are prepared to sacrifice what may be a higher pension, why should they not retire at the age of 57, 58 or whatever it may be? Secondly, there is the effect at the other end of the age scale. There are many people who are at their best in their middle 60s and for whom the thought of retirement is not only hard for them, but very unsatisfactory as regards the job which they are doing. It may be that in the work that they are carrying out they are at the peak of their skill. Indeed, presumably the Government think that Mr. MacGregor is at the peak of his skill; but I shall not argue whether he is or whether he is not.
710
Therefore, we have a situation in which, I agree with the Minister, we ought to be aiming towards a single, flexible retirement age, but there must be a pivotal age. Indeed, I think that that was the term used by the noble Lord, Lord Banks. We want a pivotal or notional retirement age of 63 which will not involve extra cost to the Government but which will introduce fairness and ensure that men are not treated in a discriminating manner as a result of women having a lower retirement age. Therefore, I believe that it was absolutely right for the amendment to be tabled because it will be very difficult to introduce a flexible retirement system unless we have an equalised notional pension age to enable people to get equality.
If the wording of the amendment does not exactly suit the noble Lord, I am certain that he could find a way to put it right at Third Reading or it could be put right in regulations. However, I argue very strongly that if we are preparing a Bill to deal with pensions for the next 20, 30 or 40 years, this principle ought to be written into it.
Lord Banks: My Lords, I am grateful to the noble Baroness, Lady Turner, and also to the noble Lord, Lord Ennals, for the support which they have given to the amendment. I am also grateful to the noble Lord, Lord Trefgarne, for his sympathetic response to it. The noble Lord has made it very clear that the Government are committed to the concept of equal ages for the retirement of men and women. He also stressed—as every other speaker has stressed—the importance of flexibility. Indeed, I would underline again that what we are seeking is not a fixed retirement age at which everybody must retire, but a normal retirement age which can be moved up or down with corresponding adjustments in the pension to suit individual choice. The noble Baroness, Lady Turner, made a very valid point when she illustrated how retirement five years earlier for women could be disadvantageous to those in occupational pension schemes.
I quite understand the noble Lord's argument that this particular amendment is perhaps not the best way in which to deal with a very complex and difficult matter. However, there is always the danger that if we do not put anything into a Bill, we shall go on and on and nothing will be done. Nevertheless, on the understanding that we shall come back—and I am not talking about this Bill—again and again to this point, to remind the Government that their commitment has still not been put into practice, I beg leave in the meantime to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Seebohm Lord Seebohm moved Amendment No. 31:
After Clause 19, insert the following new clause:
("Annual uprating of child benefit.
PART 1A
BENEFITS UNDER THE CHILD BENEFIT ACT 1975
.—(1) Whenever the Secretary of State lays before Parliament the draft of an uprating order under section 62(2) below, he shall at the same time lay before Parliament a draft of a statutory instrument containing regulations for the purpose of increasing the weekly rate or rates at which child benefit is payable under the Child Benefit Act 1975 by a percentage not less than the percentage by which the general level of prices is greater at the end of the period specified in section 62(2) below than it was at the beginning.
(2) Subsection (1) above shall cease to have effect on such day, not earlier than 31st December 1990, as the Secretary of State may by order specify.")
The noble Lord said: My Lords, the question of whether child benefit should retain its value in real terms has been much discussed in both Houses. Members of all parties support the proposal and I find it very hard to understand why the Government will not give way on this point. The word "flexibility" has been used ad nauseam, but why should it be confined to child benefit when, as far as I can see from an examination of this formidable Bill, all the other welfare and family benefits are specifically mentioned as being subject to indexing? In the nine years that child benefit has been in operation all the voluntary bodies concerned with family welfare have praised it as the best innovation in family support so far produced to reach virtually all those families with children who are in need, compared with the miserable take-up of 50 per cent. as regards the means-tested benefits.
We cannot risk allowing this benefit to be phased out, which is the Government's clear intention. Indeed, if that were not so, there could be no reason for applying the policy of so-called flexibility to this benefit virtually alone. In nominal terms, at today's rate of inflation it would cost about £100 million per annum; in real terms it would cost absolutely nothing at all.
I have put forward an amendment which goes a long way to meet the Government—far further, in fact, than my inclinations and common sense really justify. I implore the noble Baroness to accept it. May I point out that this Social Security Bill is experimental in many ways. There is no certainty over how it will work, or what the take-up will be. The Government have indicated that they hope that the family credit will rise from 50 per cent. to 60 per cent., but it is a long way from the 100 per cent. take-up of child benefit.
Finally, perhaps I may call attention to an Early Day Motion in another place signed by 60 Conservative Members supporting,
"the continuation of child benefit paid to the mother at a level in real terms at least equal to the present value of benefit".
I must ask the Minister to state clearly what the Government policy is. If, as I suspect, it is to subsume it into the family credit system, then it becomes means tested and it will fall back to an unacceptable 50 per cent. of take up. I commend this amendment to your Lordships. I beg to move.
5 p.m.
Lord Banks: My Lords, I should like to support the amendment moved by the noble Lord, Lord Seebohm. I should like to support, too, the concept that the amendment is designed to support; namely, that child benefit should be increased in line with prices each year, as in fact is the case with national insurance benefits. Child benefit replaced family allowances and income tax allowances for children. When that was done we on these Benches welcomed it as the first step towards a tax credit system.
Family allowances and child tax allowances came into being as a means of distributing the burden
712
generally between those who have children and those who have not. At the time when people had children it was felt that they should be helped right throughout the range, and indeed that if the scheme helped all levels of income, this would bring in the interest of higher income people to make sure that the benefits were maintained with the advantage that that had for lower income people.
The value of the help given by child benefit, the value of the help given for families with children, has been declining. If we allow personal allowances to be increased every year and yet allow child benefit to increase at a slower rate, the balance is being tipped further against people with children, which does not seem to be right. Of course we were alarmed by the fact that last November child benefit was allowed to decrease in value, and although at the most recent uprating account was taken of inflation, nevertheless that loss in value last November has not been made good.
We remember that other benefits, such as the pensioners' £10 Christmas bonus and the maternity and death grants, were allowed to decrease year by year in value until certainly some people began to say, "This is so small that it is not worth maintaining". What we are anxious to discover is whether the Government are determined to maintain, as an important part of their benefit for children, the real value of child benefit.
The Government say that it is their intention to maintain child benefit, but they do not say that they will maintain its value. We fear that it will be allowed gradually to decline and that this particular benefit will go. We believe that if that were allowed to happen, it would be disadvantageous to many people, and most of all to the poorest. When the Child Benefit Bill was introduced in 1975 in another place Mr. Kenneth Clarke said in Committee:
"I cannot see how a reputable case can be raised against that proposal".
The proposal was that child benefit should be index linked.
"If a case is raised against it, it runs the risk of saying that, when the child benefit scheme comes in, with continuing pressures on public expenditure from inflation, the benefit will be steadily eroded".
That is what we want to see obviated; we want to see that that does not happen. Therefore, I appeal to the House to support this amendment.
Baroness Gardner of Parkes: My Lords, I rise to oppose this amendment because I think it is misguided. I am a great supporter of help for families with children. Indeed, my father was the first Minister of Health in the New South Wales State Government to introduce what was then called "child endowment". I believe that he was the only Minister in the world for Health and Motherhood.
It is a matter of how you support these children. A quotation from 1975 has just been given by the noble Lord, Lord Banks. At that time the situation was different and we were not offering family credits which are the new concept in this Bill. I have sat on Conservative women's committees which have thoroughly supported child benefit and constant increases in child benefit. But the point has been made by both the noble Lord, Lord Banks, and the noble

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Lord, Lord Seebohm, that the take-up on child benefit is 100 per cent., and therefore it is going to the rich and those in need alike.
I think it would be preferable to give greater help to those in real need through the family credit system. I believe that there will be a gradual change towards this over a period of time. As the noble Lord, Lord Seebohm, said, only 50 per cent. seek additional help. This means that only 50 per cent. actually require the additional help, though if we allow for the fact that a small number of people do not claim, perhaps we can say that it is more than that. However, it is clear from the number who claim additional help that certainly the 100 per cent. now receiving child benefit do not require an annual increase.
This Bill aims at a totally new concept. In the way that child endowment was new when my father introduced it, the family credit system is new now. This will help those families who are in real need. It would be of no help to those on supplementary benefit to have an additional child benefit as it stands, because the amount is taken into consideration when the supplementary benefit is assessed.
Therefore, we are discussing something that might be of help only to either those who are rich and do not need it or those low paid people in employment. It is for the low paid in employment that the whole family credit system is designed and it is those whom it should help. I therefore think that this amendment fails to appreciate the new concept in this Bill which should give greater help to those families with children in real need, without giving a blanket hand-out to all families whether or not they need it. I therefore oppose the amendment.
Lord Seebohm: My Lords, may I point out what I think is a mistake in what the noble Baroness has just said? All we are asking is to have a two-year period in which it is maintained, so that we can see whether or not what the noble Baroness says is true—whether the family credit system works.
Baroness Phillips: My Lords, I would say to the noble Baroness that there is little doubt that those people who struggle—and I have worked with young wives on the new estates and in new towns—on a wage that is seemingly quite good but does not permit any kind of luxuries are the backbone of our society. Many young couples receive no help at all until they fall below the poverty line.
I can remember how the wives would collect what was then the family allowance and go out and buy some clothes for the children. The story then used to be circulated that they spent it on cigarettes and gin. That was the popular story then; it seems to have changed now. Why do we always have to wait until people fall below the poverty line before we assist them?
Let us assist the young people. They are our future. They will never ask; certainly many of them will never go for supplementary benefit even though they are entitled to it. Let them keep their pride. I should have thought that the noble Baroness, on her side of the House, would have been on the side of these people.
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This sort of amendment would certainly support them, and they are the folk we should be concerned about as well.
Lord Thorneycroft: My Lords, I believe that we debated this point a little earlier in the Bill. At that time we were considering the first part of this amendment, which effectively was to link child benefit to the cost of living. I hope that the House will not accept the amendment for the reasons which were put so eloquently and with such knowledge and force by my noble friend Lady Gardner. Quite a number of benefits are linked to the cost of living, but child benefit is a little different. Child benefit is not a case of each according to his means or each according to his needs. It affects that section of the population which has no children paying for that section of the population that is fortunate enough to have children. It is without means test and without tax. Of course, it is immensely popular; I would not deny that for one moment. The richer members of the middle classes delight in this. Never have they been offered anything so good. To have this sum of money paid regularly to the wife is a delightful thing. Members of the working classes in full employment and high pay are delighted, but many of them are slightly amazed to receive these sums of money.
It costs about £4 billion to supply child benefit, which is a substantial sum of money. It is not being contested. Those who favour child benefit can count themselves lucky that nobody is challenging the payment of £4 billion. Some of the money goes through to the children (I accept that absolutely) but not all of it. Nobody is challenging that at the moment. Lord Seebohm is taking this extraordinary bonus, which is distributed widespread throughout the population to everybody who has children, and saying that it should be classed with the rather special types of benefit which are actually linked to the cost of living.
The noble Lord, Lord Seebohm, asked, "What about flexibility?". I tentatively suggest what I think flexibility is. It means not tying a future Chancellor of the Exchequer down automatically to having to pay more money on every sort of occasion. Those of us who have been anywhere near that sort of office know the agony. I see my noble friend Lord Boyd-Carpenter here. When one considers it, everything is committed in advance. We have not been talking because we do not like to talk too much, but we have been considering amendment after amendment, whether they concern old age pensions being equalised or what you will. It is said that it will all be fixed here for it costs practically nothing to pass it in the House of Lords and it will not happen yet. This Chancellor will not have to do it tomorrow morning, but in a few years' time some Chancellor will find that this still is linked and that a further burden is placed upon the Budget. I do not think I quite accept from the noble Lord, Lord Seebohm—whose views I respect enormously—that it costs nothing. I may say that it does not look that way when you are in the Treasury. One either has to tax more or to borrow more. It does cost more money.
If it is really necessary, if this is a carefully identified section of the community in real difficulty, then I think we all ought to stretch ourselves to see whether we can do something. But it is not that kind of benefit. It is a bonus here; and I hope that we do not agree to this.

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The Government's reputation has hung not so much on spending less money: they set out with that ideal, but they have spent a very great deal of money. What they have achieved is to spend a great deal of money while at the same time managing to hold the cost of living down to minimise inflation. That is what they will be praised for and what they should be congratulated on. It is very difficult to spend a lot of money and to hold down inflation. The Government have managed to do it. But if they accepted the sort of amendments that are put down to this Bill, they would very quickly fail.
The amendments that have been put down are pushing £1 billion. We have to find it from somewhere. Therefore I urge the House not to accept this kind of amendment. It does not cover one of the necessities of social security in this country. It is damaging. It cuts across the principles which have underlined the Bill. This is a good Bill, and I think we should try to keep some of the principles associated with it.
5.15 p.m.
Baroness Lockwood: My Lords, I should like to support the amendment. My reasons are the absolute opposite to those of the noble Baroness, Lady Gardner of Parkes. On many issues affecting women we tend to have similar views. I very much regret that we do not on this occasion. But there are two overriding reasons why we should support the amendment. The first relates to equity between those families where there are children and those families where there are no children. The noble Baroness, Lady Gardner, referred to the fact that we are moving into a new system with family credit. But we are not moving into a new system to the extent where we are getting rid of tax allowances. The present family child benefit is an extension of the child tax allowance which was introduced in the early part of the century. That was a recognition that those families where there were children had additional responsibilities and expenses. It recognised the fact that the nation as a whole benefited by those children being brought up well and being well cared for.
When that tax allowance was incorporated into the family allowance and became child benefit we were going a step further, as has already been said. It was a step in the direction of a tax credit system, where we were giving an actual allowance to those who were not able to have relief on their taxation bill. In other words, they were not getting a tax allowance but a cash allowance. I think we ought to continue to recognise that and to continue with that principle of equity between families where there are children and families were there are no children.
My second reason for supporting the amendment is in relation to the independence which family allowances have given to women who have not been in employment but who are at home looking after their children. Family allowance has been their only income. It has been an income for the children, but it has been paid by and large to the mother and has been spent in the interests of the family; but it has given that additional independence which women have felt so necessary.
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I am talking now not just about those sections of the community which would benefit under the present Bill under the family credit rules, but to families generally where it is necessary that there should be additional income into the family, particularly those who are on the borderline. Therefore, I think it is important in maintaining that principle that we also maintain the principle as in other benefits that it should be linked to the rising cost of living. Therefore, I support the amendment.
Baroness Faithfull: My Lords, I rise to support this amendment. It hurts to go against my noble and most revered friend Lord Thorneycroft, but I think that on this occasion I must do so. My noble friend Lord Thorneycroft talked about—and he reminds me—the richer members of the middle band. The middle band in many cases need the child benefit as much as perhaps those who have less money in our society. The mother really benefits by having something which is her own, and therefore I support the amendment from that point of view. Also, regarding family credit may I say to my noble friend the Minister that we are not sure how family credit is going to work; inasmuch as we have this most peculiar clause a little while later supported by my noble friend LadyTrumpington and the noble Baroness, Lady Jeger. Such a thing has never happened before. But I would say also to my noble friend Lady Gardner of Parkes that we do not know how family credit is going to work.
On the question of child benefit, the noble Lord, Lord Young of Graffham, has told us on many occasions of the ebb and flow of unemployment, of the number of people who go into employment and the number of people who go out of employment. We have always been impressed by the number of men who are not out of work for a long time but for quite a short time. When a man is out of work, his standards drop. When he comes back into work again and is able to work and earn money it still means that while he was out of work his standard had dropped. That means that throughout the ebb and flow of unemployment, the mother will be able to draw child benefit.
May we come to the question of the very wealthy, to whom my noble friend Lord Thorneycroft referred? When it comes to index-linked pensions, they are taxed. However, I understand that child benefit is not taxed. I approached my noble friend the Minister and her advisers and asked whether it would not be much better if the very wealthy were taxed on child benefit rather than withdrawing the child benefit in the way that the noble Lord, Lord Seebohm, has recommen-ded. I feel that it is cost effective to look after the children of this country and that it is cost effective that the mother should draw the allowance.
I admit, as I have already mentioned to my noble friend Lord Thorneycroft, that the wealthy must find it a very happy little bonus. But there are not all that many wealthy people in the country and it seems to me that it would have been possible if the elderly can be taxed for this small amount to be taxed. I support this amendment.
Lord Kilmarnock: My Lords, a number of noble Lords have drawn attention to the fact that child

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benefit replaced family allowances—the noble Baroness, Lady Lockwood, did so, as did my noble friend Lord Banks. It is really a very important point. In that context it may be worth drawing the attention of the House to the fact that not only are tax allowances index-linked but that the married man's allowance is now 18 per cent. higher than if it had been merely index-linked under the present Government. In contrast, child benefit is worth 3 per cent. less than if it had been index-linked.
It would also be worth reminding the noble Lord, Lord Thorneycroft, although it is rather a long time ago, that in 1957 when he was Chancellor, a family paying the standard rate of tax received more for their children (with the exception of the first child aged under 11) from the state in child tax allowances and family allowances than they do now in child benefit.
My noble friend Lord Banks made the point that the Conservative Party were certainly committed to this principle in 1975 and tried to move an amendment to the Child Benefit Bill in that year. The noble Baroness, Lady Gardner of Parkes, said that the conditions were now different, that things had changed very much since 1975 and that we now have family credit as proposed in this Bill. A number of noble Lords have said—and I am sure that this is right—that we do not yet know how family credit is going to work; we do not know what the take-up will be. The Government hope that it will be higher than it is. The projected rate was 60 per cent. We simply do not know. On those grounds, it seems to me that we ought to accept Lord Seebohm's amendment. He is asking for it only until 1990, until we see how the new system is working. I think that on those grounds we ought to support it.
As a footnote, the noble Lord, Lord Thorneycroft, has not in fact even today expressed the unanimous view of the Conservative Party. Last month, Conservative MPs were given leave (by 152 votes to 3) to introduce a Ten-minute Rule Bill to index-linked child benefits. It is worth pointing out that his is not a unanimous view in the Conservative Party.
Baroness Ewart-Biggs: My Lords, I should like to support this amendment in spite of what the noble Lord, Lord Thorneycroft, and the noble Baroness, Lady Gardner, have said. I find it very hard to go against the conviction of all those who are concerned with the well-being of children who are all convinced that child benefit is the most effective way of tackling child poverty while at the same time achieving a degree of equity between the living standards of those with and without children. There can be no doubt that this is the view in other European countries. Indeed, child benefit in France and in several other of our neighbouring European countries is at a very much higher level.
The only other point that I wanted to make is that the Minister and the noble Lord, Lord Thorneycroft, have opposed index-linking because it would abolish the flexibility which we believe is essential—which is what the noble Baroness has said. But the implications were put very well recently by Sir Brandon Rhys Williams in another place when he said:
"If child benefit fails to hold its real value, the practical effect is to raise the share of the total tax burden which is borne by the
718
section of the community … who have responsibility for the care of children ‖ if its real value is reduced, there is a fall in the amount of help that we give to support poor families without obliging them to submit to a test of means".—Official Report, Commons; 18/6/86, col. 1065.]
He argued the case very well in another place when this was looked at at great length. No one during the Bill's passage so far has really sought to deny the importance of child benefits. I should like to give my very strong support to this amendment.
Baroness Vickers: My Lords, I should like to say just a few words since I have put my name to this amendment. The noble Lord, Lord Seebohm, suggested a period of only two years, I understand. The switch from the child-tax allowance to the child benefit was received with enthusiastic all-Party support from the outset. Indeed, although it was introduced by a Labour Government in 1970, a Conservative Government accepted the principle. I should like to suggest that there are a great many poorer people in this country than there are rich. For example, I know an enormous number of people who are getting only £75 a week and who have to bring up their families on that. Therefore, they want to know what is going to happen in future.
It has been said by other speakers almost without exception that we really do not know how this is going to work. Perhaps when the noble Baroness comes to reply she will be able to tell us exactly how it is going to work and we shall be able to make a definite resolution. Until that time, when we are satisfied as to the position, I would support the amendment put forward by the noble Lord.
5.30 p.m.
Lord Ennals: My Lords, I want to say how delighted I am with the speeches made by the noble Baronesses, Lady Vickers and Lady Faithfull, and also by other speakers who have recalled the history of child benefit. Before the Minister replies I think it would be wise if we went back, because, with the greatest respect to the noble Lord, Lord Thorneycroft, he has forgotten part of what happened when he was Chancellor of the Exchequer—and who can blame him? He has also forgotten some of the things that happened when he was Chairman of the Conservative Party—and, again, who would blame him for wishing to do that? So anything I say to the noble Lord will be said with great appreciation of his kindness.
If I may deviate for a moment, my earliest recollec-tion of the noble Lord, Lord Thorneycroft, was when, as a new Member of the other place, I made my maiden speech on defence, at which time the noble Lord was the responsible Minister. He paid me a very fine tribute—which he had no reason to do except that he had to—and I took it seriously. As your Lordships know, we always congratulate maiden speakers; and so I feel a great warmth towards the noble Lord, Lord Thorneycroft.
However, we have to look back at the history of this because there would be no child benefit if we had not decided to abolish child tax allowances. That point has been made by a number of my colleagues. When child benefit was first introduced, as has been said, it was then the policy of the Conservative Party that child

719
benefit should be index-linked. A proposal was made at the time of the 1975 Act, when I suspect that the noble Lord, Lord Thorneycroft, was still Chairman of the Conservative Party: at any rate, if he was not, he was not very far off. I wish that the proposal had been carried. I was not the Minister dealing with the matter at the time; but it was linked with the level at which child benefit was first introduced. That was the same level as the child tax allowance which was being taken away. In other words, you took away child tax allowance but introduced instead child benefit. Speaking for the then Labour Government, we always said that we wanted to see child benefit linked, but linked at a proper level. It was phased in because it would have been hopeless to have index-linked it at a very low level.
If we go back to the beginning of this, there was an absolutely all-party approach, first, that there should be child benefit to replace the tax allowance; secondly, that it should go without tax to all families; and, thirdly, that it should be linked to the rise in the cost of living. We have seen a retreat from that position over a number of years. The noble Baroness, speaking at col. 685 on the 3rd June, said (and I quote):
"The future level of child benefit will be determined uprating by uprating according to the circumstances of the appropriate time, including in particular the pattern of family support as a whole and the needs of families on low incomes".
That was very much more of an "if, but or maybe" situation than the commitment made by Mr. Patrick Jenkin when he was Secretary of State in 1980. He said then that child benefit would be increased in line with prices and added, "subject to economic and other circumstances". It would be nice if the Government would put even those words by the former Secretary of State into the Bill. Some of us would feel that was at least a modest advance.
However, as I say, we must look at the history. At the Committee stage the noble Lord, Lord Thorneycroft, warned against adding child benefit,
"to that list of exceptional items which happen to be, by general agreement, linked to the price index".—[Official Report, 30/6/86; col. 708.]
But it is child benefit that is exceptional because it is not being so linked. The majority of the major benefits are in fact linked to the cost of living. Retirement pensions are linked to the cost of living; and, if that is done, why not child benefit, which goes to help families with children? Weekly national insurance benefits and personal tax allowances are linked to the price index by statute. Supplementary benefit and other means-tested benefits are linked to the index by convention. Moreover, the Government have given a firm pledge to maintain the real value of all long-term benefits. So child benefit is now being put into a category of not being index-linked, whereas the majority of benefits are in fact index-linked.
The noble Lord also argued at Committee stage (and I am quoting):
"It goes to families who would have been amazed in any other generation that the state should assist them in keeping their children".
He was very much more generous himself when he was Chancellor of the Exchequer. And not only was it the noble Lord, because if we go back to 1789 and to 1806—I think there was a momentary Liberal
720
Government in power at the time: the noble Lord has referred to another example, but that was a century before—we find that even in those days more was being done to help families with children by means of the tax allowance than is now being done by means of child benefit. I think it is that which we have to put right.
The principle of child benefit is accepted by all, and the noble Baroness has said this herself. She said it was (and again I quote from col. 685 on 3rd June):
"a simple, straightforward and well-appreciated way of providing a measure of financial support for all families".
My Lords, that is absolutely right: good old Baroness! No, I will change that: good young Baroness! She voiced exactly the right principle, because this has never been a party political issue.
We have already had quoted to us the position of the Conservative Women's Council. The noble Baroness, Lady Gardner of Parkes, referred to the discussions as a result of which the council is still in favour of the index linking of child benefits. The members have not changed their view: they are still in favour of that, even though the noble Baroness may have sought to argue otherwise. They still solidly stand in the position which is accepted by this side of the House.
The reason why it is so widely agreed is because all who have studied it—and I do not mean me, but experts such as voluntary organisations and the statutory bodies—have seen child benefit as the most effective way of tackling child poverty and of achieving at the same time a degree of equity between the living standards of those with and those without children. One of the great merits has been that the money has gone directly to the mother to help look after the children. It has not just gone into the family pool of income. That is why it has been so popular and has been taken up almost 100 per cent.
In conclusion, I want to draw your Lordships' attention to what the amendment says. I fear that because we discussed the issue before we decided to retreat over the position we would take. If one looks at subsection (2) it says:
"Subsection (1) above shall cease to have effect on such day, not earlier than 31st December 1990, as the Secretary of State may by order specify".
The noble Lord, Lord Seebohm, explained why we had done that. It is because we do not know what the take-up of family credit will be, and by then we can make an assessment; but surely it would be best to stick by the principles that both sides of this House have shared, although there has not been a Bill in which this could be introduced. This is a Bill to do what we want done for social security for the next few years; but let us do this until 1990 so that the then Secretary of State can make his or her judgment as to whether this is the best thing to do. I strongly plead with your Lordships to support what I think is a balanced and, at the same time—because it has a time limit—a very modest amendment.
Baroness Trumpington: My Lords, I take off my hat to the noble Lord, Lord Seebohm, for his diligence and persistence in trying to persuade us that it is essential to link the rate of child benefit to the retail price index. His proposition has now been distilled to the point of

721
effectively linking child benefit to the RPI for four years.
As the noble Lord, Lord Ennals, said, we have now spelt out our commitment to the principle of child benefit on many occasions. The fact that the nature of the benefit places a considerable burden on taxpayers has to be accepted. However, I must emphasise that that burden amounts to about £4.4 billion for the current year.
The noble Lord, Lord Seebohm, mentioned the present rate of inflation. This Government have brought the rate of inflation down to the lowest level for many years; but it is of course not possible to look into the future and foresee what the rate of inflation or the general economic situation might be even in four years' time.
Let me give the noble Lord, Lord Ennals, some history. In 1975, in another place, during the Committee stage of the Child Benefit Bill under a Labour Government, the then Parliamentary Secretary for Social Security said that it took a brave person to predict the public expenditure situation in the future. I agree with him. We cannot cripple taxpayers or constrain future governments by tying the payment of child benefit to a precise formula. Moreover, child benefit is not a maintenance benefit. It is no more than a contribution (and a jolly good one) available tax free to every mother towards the cost of bringing up a child. It is not and was never intended to be the sole means of support for the children of low-income families. As my noble friend, Lady Gardner of Parkes, said, increases in child benefit do not assist the poorer families who are on supplementary benefit. Child benefit is taken into account when the resources and needs of these families are assessed. Their needs will be met in due course by the new income support scheme, including the new family premium. I accept that the family income supplement scheme has failings. That is exactly why we are bringing in the new scheme of family credit to provide better help for low-income working families with children.
As my noble friend Lady Gardner of Parkes said (and I entirely agree) family credit will be a major improvement on family income supplement. We have discussed family credit in very great depth and very thoroughly in Committee. It will provide more generous help than FIS and reach about twice as many families. It will tackle both the poverty and unemployment traps. Family credit will be a more attractive benefit than FIS and the expectation is that it will be appreciably more effective than FIS.
Baroness Jeger: My Lords, forgive me. Can the noble Baroness say on what evidence she says that these changes in attitude will take place? How does she know this will happen?
Baroness Trumpington: My Lords, if the noble Baroness will let me continue I may reach that point. I believe that with regard to tax allowances, child benefit is an entirely different creature than a tax allowance, and on occasions child benefit has been increased when tax allowances have not. Tax allowances benefit the vast majority of working families. My noble friend Lady Faithfull, whose
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arguments I sometimes have trouble following, mentioned child benefit and income tax. I am sure that if I had difficulty in following Lady Faithfull's arguments, it is entirely my fault; but I did have difficulty.
There is an objection, in principle, against bringing child benefit into taxation. It would mean the application of income tax to a benefit which had replaced a tax allowance. I would depart from the principle of universality which has been recognised for many years as providing a measure of support for all families and children.
If child benefit was simply to be taxed, the effect would be broadly equivalent to a £700 reduction in personal tax allowances for a family with two children. The same result could be achieved by simply adjusting the rate of benefit. Such a step would increase the extent to which individuals receive benefit and pay tax simultaneously. If a principle of universality were to be set aside for those paying tax at higher rates, what would the effect be? My Lords, I am taking infinite trouble to explain and I should be grateful for the attention of the House.
If child benefit were to be denied to higher rate taxpayers entirely it would create a particularly steep earnings taxation trap where £1 of additional earnings for a man or a women with three children would produce a loss of £21 a week. The effect on incentives is obvious, but the product of higher taxation may not meet expectations. If a taper were to be introduced (perhaps on the basis of applying to child benefit a rate of tax of the difference between the standard rate and any higher rate that might be payable) the result would be to realise only modest resources. Clearly this would not fund a significant increase in child benefit—in fact, about l0p.
The Government's record on child benefit is a good one. The commitment to its maintenance as a universal benefit has been given and the existing provision in the legislation has been used to maintain the rate of child benefit in line with the general level of prices whenever practicable. Indeed, we have gone further on two occasions (in November 1983 and November 1984) when child benefit was increased to its highest ever real value. Perhaps I also ought to make it clear that the legislation, while allowing for flexibility of up-rating, provides that the basic rate cannot be reduced without amending primary legislation. The importance of this is of course that if any government had plans to make such a reduction in child benefit, the issue would have to be debated by the House.
I can understand the intention of the noble Lords, but we cannot accept the limitation on the freedom of action even for the four years that would be imposed by the amendment. We are concerned with the impact of a coherent social security policy for all families and especially for those who are in the greatest need. Earmarking resources in the way the noble Lord, Lord Seebohm, envisages, could well mean the taxpayers' money would not be available for other purposes near and dear to your Lordships' hearts. I cannot advise the House to accept the amendment.
Lord Seebohm: My Lords, naturally, I am very disappointed. We have had a fairly gentle debate in

723
many ways and people have praised the noble Lord, Lord Thorneycroft, for what he said. I agree with many of the things he said. It is a tragedy to my mind that social security and fiscal policy are not hand in hand. Until they are, I think we shall always be in this kind of muddle. For instance, there is still in existence something called a married man's allowance. This in fact costs the country twice as much as child benefit. That could be phased down, but this is not a fiscal Bill. There is no point in arguing about whether this should be taxed or whether we should tax other things. To my mind, the case for not indexing is completely unproved. The noble Baroness explained that the taxes would bring in very little and would be incompatible with other policies. So although we have been very nice to each other up until now, I propose to be thoroughly beastly and to divide the House.
5.50 p.m.
On Question, Whether the said amendment (No. 31) shall be agreed to?
Their Lordships divided: Contents, 118; Not-Contents, 137.

DIVISION NO.3

CONTENTS

Addington, L.

Hatch of Lusby, L.

Airedale, L.

Hayter, L.

Allen of Abbeydale, L.

Henderson of Brompton, L.

Ardwick, L.

Heycock, L.

Attlee, E.

Hooson, L.

Banks, L. [Teller.]

Houghton of Sowerby, L.

Barnett, L.

Hunt, L.

Birk, B.

Ingleby, V.

Blease, L.

Jacques, L.

Blyton, L.

Jeger, B.

Boston of Faversham, L.

Jenkins of Putney, L.

Bottomley, L.

John-Mackie, L.

Briginshaw, L.

Kilmarnock, L.

Brockway, L.

Kinloss, Ly.

Bruce of Donington, L.

Listowel, E.

Buckmaster, V.

Llewelyn-Davies of Hastoe, B.

Burton of Coventry, B.

Lockwood, B.

Caradon, L.

Longford, E.

Carmichael of Kelvingrove, L.

Lovell-Davis, L.

Chitnis, L.

McIntosh of Haringey, L.

Cledwyn of Penrhos, L.

Mackie of Benshie, L.

Crawshaw of Aintree, L.

McNair, L.

Croham, L.

Mais, L.

Darcy (de Knayth), B.

Masham of Ilton, B.

Darwen, L.

Mayhew, L.

David, B.

Meston, L.

Davies of Penrhys, L.

Milford, L.

Dean of Beswick, L.

Milner of Leeds, L.

Denington, B.

Molloy, L.

Diamond, L.

Monson, L.

Elwyn-Jones, L.

Morris of Kenwood, L.

Ennals, L.

Morton of Shuna, L.

Ewart-Biggs, B.

Mulley, L.

Ezra, L.

Murray of Epping Forest, L.

Faithfull, B.

Nicol, B.

Falkender, B.

Ogmore, L.

Falkland, V.

Oram, L.

Fisher of Rednal, B.

Paget of Northampton, L.

Fitt, L.

Phillips, B.

Gallacher, L.

Pitt of Hampstead, L.

Glenamara, L.

Ponsonby of Shulbrede, L.

Graham of Edmonton, L.

Rea, L.

Gregson, L.

Ritchie of Dundee, L.

Grey, E.

Robson of Kiddington, B.

Hampton, L.

Rochester, L.

Hanworth, V.

Sainsbury, L.

Harris of Greenwich, L.

Seear, B.

724

Seebohm, L. [Teller.]

Tordoff, L.

Serota, B.

Turner of Camden, B.

Shannon, E.

Underhill, L.

Shepherd, L.

Vernon, L.

Silkin of Dulwich, L.

Vickers, B.

Somers, L.

Wallace of Coslany, L.

Stallard, L.

Walston, L.

Stedman, B.

Wells-Pestell, L.

Stoddart of Swindon, L.

Williams of Elvel, L.

Strabolgi, L.

Wilson of Langside, L.

Taylor of Blackburn, L.

Young of Dartington, L.

Taylor of Mansfield, L.

Ypres, E.

NOT-CONTENTS

Ailsa, M.

Kimball, L.

Alexander of Tunis, E.

Kimberley, E.

Atholl, D.

Kinnaird, L.

Barber, L.

Kintore, E.

Belhaven and Stenton, L.

Lane-Fox, B.

Bellwin, L.

Lauderdale, E.

Beloff, L.

Layton, L.

Belstead, L.

Lindsey and Abingdon, E.

Bessborough, E.

Liverpool, E.

Blyth, L.

Long, V.

Boyd-Carpenter, L.

Lucas of Chilworth, L.

Brabazon of Tara, L.

Luke, L.

Braye, B.

Lyell, L.

Brougham and Vaux, L.

McAlpine of West Green, L.

Broxbourne, L.

McFadzean, L.

Buccleuch and Queensberry,

Macleod of Borve, B.

D.

Malmesbury, E.

Buckinghamshire, E.

Mancroft, L.

Butterworth, L.

Marchwood, V.

Caithness, E.

Margadale, L.

Cameron of Lochbroom, L.

Marshall of Leeds, L.

Campbell of Alloway, L.

Massereene and Ferrard, V.

Carnegy of Lour, B.

Maude of Stratford-upon-

Carnock, L.

Avon, L.

Cathcart, E.

Merrivale, L.

Constantine of Stanmore, L.

Mersey, V.

Craigavon, V.

Montgomery of Alamein, V.

Crathorne, L.

Mottistone, L.

Crawshaw, L.

Mountgarret, V.

Cross, V.

Mowbray and Stourton, L.

Cullen of Ashbourne, L.

Munster, E.

Davidson, V.

Murton of Lindisfarne, L.

Denham, L. [Teller.]

Northesk, E.

Derwent, L.

Nugent of Guildford, L.

Drumalbyn, L.

Onslow, E.

Dulverton, L.

Orr-Ewing, L.

Dundee, E.

Pender, L.

Eden of Winton, L.

Peyton of Yeovil, L.

Ellenborough, L.

Plummer of St Marylebone,

Elliot of Harwood, B.

L.

Elliott of Morpeth, L.

Portland, D.

Elphinstone, L.

Portsmouth, E.

Elton, L.

Rankeillour, L.

Forbes, L.

Renton, L.

Fortescue, E.

Rodney, L.

Gardner of Parkes, B.

St. Aldwyn, E.

Glanusk, L.

St. Davids, V.

Glenarthur, L.

Saint Oswald, L.

Gray, L.

Sandys, L.

Gridley, L.

Savile, L.

Grimthorpe, L.

Sharples, B.

Hailsham of Saint

Skelmersdale, L.

Marylebone, L.

Soames, L.

Hanson, L.

Stodart of Leaston, L.

Harmar-Nicholls, L.

Strathcona and Mount Royal,

Henley, L.

L.

Hertford, M.

Strathspey, L.

Hesketh, L.

Sudeley, L.

Hives, L.

Swinfen, L.

Home of the Hirsel, L.

Swinton, E. [Teller.]

Hood, V.

'Thorneycroft, L.

Hooper, B.

Torphichen, L.

Inchcape, E.

Tranmire, L.

Kaberry of Adel, L.

Trefgarne, L.

Kemsley, V.

Trenchard, V.

Keyes, L.

Trumpington, B.

Killearn, L.

Vaux of Harrowden, L.

725

Vesty, L.

Wynford, L,

Vivian, L.

Yarborough, E.

Waldegrave, E.

Young, B.

Whitelaw, V.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.59 p.m.
Clause 20 [Income-related benefits]:
Lord Banks Lord Banks moved Amendment No. 32:
Page 25, line 24, at end insert—
("(1A) In the case of persons who satisfy the conditions of subsection (10)(a) and (b) below, no account shall be taken of differences of age within the range of 18 to 60 for the purpose of determining whether any such person is entitled to an income-related benefit or the amount of any such benefit.").
The noble Lord said: My Lords, at present single childless claimants receive benefit, whether on the householder or non-householder basis, regardless of age. Under the Bill, lower rates of benefit will be paid for single childless people under 25 and this will affect some 350,000 young people. Single childless people under 25 will receive £6.60 a week less income support. Single childless people under 25 in low paid work will receive much less housing benefit. A young person living independently and earning £70 a week now receives a rent and rates rebate of £13.04 if he is paying average rent and rates of £25.23 weekly. As I understand it, this will go down to £1.54 after April 1988 on the basis of the figures that we have so far seen. That would be a loss of £11.50. I should like to ask the noble Baroness whether that is right. Will those people lose £11.50?
Childless unemployed people under 25 who are single and live independently will no longer have householder status. They will receive the lower under-25 rate of £24 a week. That is £5.50 less than they now receive. Out of the £24 a week they will have to pay all of their water rates. The average for that at the moment is £1.65 a week. If the 20 per cent. rates refund were reinstated, that would be a further loss of £1.40 a week on average. These deductions from £24 a week would leave less than £3 a day for heating, lighting, clothing, food, transport and the search for work.
Many young people have no choice but to live independenlty. They cannot go home. For example, there are those leaving care; there are refugees; there are young disabled people who are provided with independent accommodation. Under the board and lodging regulations there are exemptions for cases of special need—people who have left care; people who have had to leave home because they were in physical or moral danger; people who have no parent or guardian. There is nothing of that kind in the Bill so far as concerns these benefits. It is important to bear in mind that the provisions that I have been describing will affect black people in particular because they have a higher proportion under the age of 25 and they are twice as likely to be unemployed.
At the Committee stage I moved an amendment to remove the lower rate for under 25s. That amendment was defeated by one vote. This amendment is more limited. It would exclude those eligible for housing benefit and would therefore exempt those living
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independently and who would have householder status at the present time. Those so exempted would not receive a lower amount of income-related benefit on account of age. The object of the amendment is to ensure that those who are householders at the present time would not be subject to a lower rate if they were single and childless and under the age of 25. I beg to move.
Lord Ennals: My Lords, I must admit that I have never really understood why the Government have introduced this measure. During all the years that I recall since the welfare state was created we have never sought to draw a distinction between the financial responsibilities of those who are aged 25 and those who are aged 26. I can well understand it if the Government came forward with a measure which sought to make provision for those who were living at home so that they could say that within a home situation parents would be able to look after a young lad or a young girl but eventually they would move on and become adults. In this clause the Government are trying to draw a distinction between different groups of adults.
It is probably true that there are many people between the ages of 20 and 25 whose expenses are higher than those of people between the ages of 30 and 35. One has only to think of people who have managed to estalish themselves in life. They are in reasonable accommodation; they have managed to cope with their young children. Yet it is at the lower age range that responsibilities are often greatest. At no stage in the debate have the Government put forward a series of cogent arguments as to why we should treat people of a particular age—under 25—in a different way. Let us look at one or two examples.
If you are a disabled person and aged 20, 21, 23 or 24, you may have a need not only for a regular income but for special payments. Whatever they are, the needs of a young disabled person are likely to be just as great as the needs of an older disabled person of 25 years and above. One can do this in a variety of different groups. Let us take single childless people under 25 years old and disabled. There is here a real problem. They are going to lose very substantially in a way that I believe will make life very difficult for young people. I do not believe that the Government could genuinely have intended this when they drafted this Bill, recognising all the problems of young people—and many of us here either have young people of this age range or may even have grandchildren of that age. I am halfway between one and the other. My children are all above the 25 age range, but I remember very clearly what were their needs when they were under he age of 25.
It is quite clear that in other fields the Government have recognised that there needs to be in a sense some special protection for younger people. The Government have seen fit to exempt certain categories of young people from the board and lodgings regulations. They have exempted young people leaving care. That is very important. The majority of young people who leave care are under the age of 25. One hopes that many of them will go back to their families; but in the case of a very substantial majority, they have already lost the contact that their family provided. They are going out into a society in which

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they have to make their own way. We are saying in this Bill that they are going to have to make their own way with a lower level of income because they have not reached the age of 25.
Let us look at the proportion of young people who are unemployed. I am not producing any statistics. Everyone in this House knows that there is a frighteningly high level of unemployment among the under 25s and that the number of youngsters who leave school and go to a job is steadily decreasing. Of course they have opportunities for training, and I am not starting to attack the Government on any of those grounds at all. But young people who are unemployed are likely to have very special needs.
Let us look at the categories that the Government have already exempted in the case of board and lodging regulations. One can take not only young people leaving care but young people who are chronically sick or mentally or physically disabled. I spend a good deal of my time working with the mentally ill, the mentally handicapped and the physically disabled. I do not understand why it should be supposed that these young people have less need in life for support than if they were 26. On the board and lodging regulations the Government have also given special protection for young pregnant women, for young people with no parent or guardian, and for young people who have had to leave home because they are in physical or moral danger. One has to recognise that that is the case all too frequently today. Those exemptions, in my submission, are an implicit acceptance that certain groups of young people have special needs and are vulnerable.
All the groups that I have touched upon, having special needs and being especially vulnerable, are among those who will do worse out of the provision that the Bill is providing. I honestly do not believe that your Lordships wish that to be the case. The same would apply to all single childless persons under 25 years of age, whether or not they are vulnerable, and whether or not they are able bodied or disabled. No exceptions seem to be made at all.
Young people leaving care represent a group in which all of us are interested, because we now have under 100,000 youngsters in care. It is encouraging that more and more of them are coming into society to make their own way. There are some housing associations that make special provision for young people who have been in care. There are some housing associations that make special provision for the young disabled. I was just thinking of the John Groom Society, which has 150 units for single disabled people; some of those units will be allocated to those aged under 25.
I do not understand why it is thought that the needs of those aged under 25 are in this case less than the needs of those who are older. It means of course that their financial situation will be worse. What might be the consequences of that situation? We live in a society in which we already accept that there are grave problems with the unemployed, with the mentally handicapped, with the mentally sick, with the homeless, and so on, and we accept that we live in a society in which there is increasing violence among
728
young people—far more so than there is among older people. Most of the acts of violence that come before our courts—or which never get to court—involve young people in the age range that the Government have chosen to place at a disadvantage.
I believe that that whole principle is utterly wrong. I could understand it if the Government came forward with a proposal and said, "We shall have special arrangements for those who live in families. We shall perhaps have special arrangements for those aged under 16". But why choose the age of 25? People of 25 are adults and have legally been adults for seven years. Many of them have families. Their problems, as I said earlier, are as great as those who are 10, 20 or 30 years older. Why should the Government decide to place at a disadvantage, consciously and by statute, a very large element of young people?
If the noble Baroness were to say that it was to save money, and if she were to say to the House, "We are doing this to save money", that would be a disgraceful admission. There must be some better explanation than that. If there is not an explanation that satisfies your Lordships, you should vote for this amendment, and that is what I plead with you to do.
6.15 p.m.
Baroness Ewart-Biggs: My Lords, perhaps I may also assist with the point that my noble friend Lord Ennals made. I should like to ask the Minister to explain the inconsistency of a Government who see fit to exempt certain groups of young people from the board and lodging regulations, thereby accepting that there are certain groups that have special needs and who are vulnerable, but who do not see fit to make certain exemptions in this case. That is difficult to understand and I hope that the noble Baroness will have an answer.
The noble Lord, Lord Banks, pointed out very clearly the losses that would be felt by the young people in question. To begin with, they will surely get in debt and into arrears with their rates and rent. Time and time again we have said that debt is growing in Britain, and anything that might increase that growth in debt is to be avoided. Arrears of rent and rates will have the most serious consequences for the authorities which house these young people. Many young people with special needs will face homelessness because of the level of their arrears.
As has also been pointed out on several occasions, many such young people come from care, and all the good that has been done will be lost completely with the risk of them again becoming homeless due to the Government's proposal. It would seem to have the most unjust effect on all young people who are householders. Why should there be an inconsistency, in that there is an exemption so far as concerns board and lodging regulations but not in this particular case?
Baroness Lockwood: My Lords, Like other noble Lords, I am rather surprised at this particular clause, which draws a distinction at the age of 25. There are many groups who will be affected. Noble Lords, and my noble friend Lord Ennals in particular, have listed some of the groups that will be at risk. It seems to me that those groups fall into two categories. First, there are the very vulnerable young people who need care,

729
who are disabled and who are provided with independent accommodation, who might have been the victims of sexual abuse, and who feel that they have to move into their own premises, and so on. They are all at risk. It is surprising that a Government concerned with the growing increase in the crime rate should not take account of the fact that groups of young people are likely not only to become victims of the financial constraints that are being placed upon them, but also be put at risk in other respects.
The second category that I have in mind is quite different from the first. There are new patterns emerging in our society. In my own personal sphere I am surprised at the number of young people who want to show their independence and initiative and who move into accommodation on their own. Sometimes it is a case of taking a flat. At other times it is a question of buying a house. They may start with a small house and then build up with a better house in the future, perhaps with their minds ultimately on marriage and a family. In any other circumstances we would praise the initiative of such young people. We would say that they should be given every encouragement. But this clause is a disincentive for young people to try to spread their wings, so to speak, and establish themselves independently.
Therefore, while I sympathise deeply with the groups that have been described earlier, I also think we need to take account of that other group—it is a growing group—in our society. The interests of young people up to the age of 25 are just as important as those over that age.
Lord Stallard: My Lords, I too support the noble Lord, Lord Banks, on this amendment. Like him, I can recall the debates we had on the board and lodging regulations and I was amazed—I suppose I was amazed—to find a clause in the Bill that seems to undo, or go back on, all the concessions we were able to wring from the Government on those regulations.
As far as I am concerned there seems to be no justification whatever for going back to this 25-year age barrier and introducing a lower rate of benefit. I thought that we had made the case—and it is a case that has been made by every speaker on this amendment—and that it had been accepted, that there are many thousands of youngsters aged 25 years and under who are in difficult circumstances and who are forced to live away from their home. As has been said, there are youngsters who have no home anyway; for example, those who were in care and who have left care to take up a job. They have no home and have to live independently.
We also know that there are young black youngsters under 25 years old who are doubly more likely to be unemployed. Many are living independently by reason of a number of circumstances. They will be severely adversely affected by this age barrier of 25, with all that that means. I can therefore see no justification for reducing the rate of benefit for people under the age of 25.
We know, too, that councils give independent accommodation to youngsters aged 25 and under. It is common, for a number of reasons into which we have
730
gone at length, for councils to give housing accommo-dation to single youngsters under the age of 25. They will now be in difficulty because their housing benefit will be much lower than would have been the case had this barrier not been erected. As I understand it, the Bill will introduce lower rates of benefit for single childless people under the age of 25. That must dramatically affect the lives of, it has been estimated, at least 350,000 young people who currently receive social security and housing benefit.
The Government are recommending in these clauses that single childless people under 25 years of age should receive £6·60 per week less income support than older people in identical circumstances. As I said, we argued that case on a previous occasion and there is no need to go back to it. In addition, single childless people under the age of 25 in low paid work will receive much less housing benefit than older people in exactly the same circumstances. Again, there is no justification, given all the circumstances, for that state of affairs.
The consequences must be perfectly obvious to all. If we further deprive the under-25 age group, and the people involved in that age group, we are building up trouble for ourselves in a whole number of areas. That ought to be self-evident when we read this clause. I give some examples. A young person living independently and earning £70 a week will now receive a rate and rent rebate of £13·04 if that young person is paying average rent and rates of £25·20 per week. After April 1988 that rebate will go down to £1·54; that is, from £13·04 to £1·54—a loss of £11·50. Where could one expect youngsters of 25 and under to make up that gap of £11·50? It is impossible. I am almost scared to think of what might be the consequences for our society of widespread deductions of that and more.
Childless unemployed people under the age of 25 who are single and living independently face losses in benefit of at least £7 a week. That is a lot of money to childless people and youngsters in those circumstances. It may not seem much to us but £7 is a fortune to some people. It helps pay for their food and a lot of their expenses. Their householder status will no longer be recognised and they will receive the lower rate for under 25 year-olds of £24 a week. Out of that they have to pay all their water rates and other expenses; and all the other expenses for which youngsters need money these days.
The Government are introducing these dramatic cuts but will need to have some special justification for doing so. The House debated this point in the social security regulation debates on a number of occasions, during which there was cross-party and cross-Chamber support for the arguments put forward. The support was such that the Government made exceptions for some youngsters under 25 years of age in these categories. It is logical, and we are entitled to expect, that the Government will extend those exceptions into this legislation and continue the payments to youngsters aged 25 and under in the same way.
Lord Boyd-Carpenter: My Lords, the debate so far has naturally, from a debating point of view, centred on the age of 25 as the line of demarcation. Whether or not that is precisely the right age is a question which

731
I willingly concede is a matter for discussion and on which views may well differ.
However, the amendment goes a great deal further than looking after the 25 year-olds. If your Lordships accept this amendment you will be saying that the 18 and 19 year-olds similarly should have the full rate of benefit. If noble Lords opposite had been particularly concerned with the 25 year-olds they could have tabled an amendment specifying a lower age. As it is, they have gone the whole way and proposed an amendment under which, right down to the age of 18, the full rate of benefit will be payable. I do not think that that is justified.
The noble Baroness, Lady Lockwood, referred, understandably, to those enterprising young people who like to set up and develop themselves on their own. I share her respect for them. But is is quite another thing to say that if, for good reasons of their own, they decide to do that, they must be entitled at the public expense to the full rate of benefit given to older people. I do not think one is forced to take that for granted. If they can manage, by hard work and their earning capacity, with the lower rate of support, good luck to them. One applauds them. But it is, again, quite another thing to say that, because this is a good thing on their part, they must be entitled to the full adult rate of benefit.
One then comes to the noble Lord, Lord Ennals, who beat the Dispatch Box with characteristic vigour in his horror at the idea that any provision of the Bill might save money. The noble Lord, Lord Ennals, seemed to think that saving money was somehow a disreputable or discreditable aim. In this Bill we are dealing with enormous financial commitments, running for a very long time ahead and placing an immense burden for many years ahead both on the taxpayer and on the contributor to national insurance. No responsible Government of any colour will be other than concerned to save money if they reasonably can do so.
Therefore, I suggest to the noble Lord, Lord Ennals, that we come back to the point, not of whether, among other things, this measure will save money, but whether it is a sensible method of lightening somewhat the otherwise very heavy burden indeed that we are placing on the future contributors to national insurance and the future taxpayers. The whole business of social security, with which, as your Lordships will know, I was fairly closely associated a good many years ago, is a matter of assessing priorities. If we had unlimited wealth we could do unlimited good. We have not. It is the hard and difficult function of Ministers to try and assess the direction in which the limited amount of money available can best be expended. I do not ask your Lordships to take that statement from me. I ask your Lordships to take it from the late Mr. Aneurin Bevan, who, in what I think was his last speech in another place, remarked that the language of socialism was the language of priorities.
6.30 p.m.
Lord Pitt of Hampstead: My Lords, I want to say to the noble Lord, Lord Boyd-Carpenter, that it is right that people should in fact receive benefits from the age of 18. That is when they assume adult responsibilities;
732
that is when they vote. It is from that age that we regard them as having adult responsibilities, so they should also have the benefits.
Moreover, if young people are in care, it is at that age that they have to leave, and often they do not have anywhere to go and must set up home independently. Therefore, they must have the benefit—or they should have, because up till now they will not get it. I do not see why the noble Lord should deprecate the support given by the noble Baroness to their enterprise and independence, encouraging them to set up home and begin to build a life at 18. I think it is right and proper that they should be encouraged to do this if that is what they want, and society should help them in their endeavours.
I should like my contribution to this debate to be limited to the effect that this measure will have on black people. As the noble Lord, Lord Stallard, has said, the blacks suffer more from unemployment than do the whites. Figures I have in front of me suggest that in certain areas 60 per cent. of black youths are unemployed. The consequences of that situation will be recognised. Moreover, these may also be the children of unemployed parents, because unemployment affects more black adults than white. So in that sense also they are deeply affected.
There is also the problem posed by one-parent families. The young person may come from a one-parent family where the mother herself is in difficulties. How will this woman bring up this "adult" child—because, after all, at 18 we are speaking about an adult. The Government are saying that in this case a single woman should be responsible for bringing up that 18 year-old.
I hope that your Lordships will see the issue in that way. In general terms it is a bad thing to make this distinction. It is a bad thing to create hardship for youngsters generally. As I have said before, we are in danger of creating rootless youngsters, and actually of doing worse than that. I should like the Government to reconsider their attitude to this issue. I understand the case that was made by the noble Lord, Lord Boyd-Carpenter, as regards saving. But the benefit of the saving always has to be balanced against the cost—and the cost is too high. I should like the Government to look at this question again, and I ask the noble Baroness the Minister not just to reject the amendment (as I am sure her brief has already advised her to reject it) but to undertake to look at it again. We still have the Third Reading of this Bill when we can come back to it and look at it again.
In fact, we are about to inflict real difficulties on a large number of people, and not only young people, since this measure is also bound to affect their parents. Therefore, we are in the process of inflicting difficulties on a very large number of people. I ask your Lordships to consider where we are heading and to try to change course.
Baroness Trumpington: My Lords, this is an ingenious amendment which seeks to provide that, where a person is considered a householder for the purposes of housing benefit, then he should not have his benefit altered by reference to his age. In effect the amendment seeks to retain the householder distinction in the income-related benefits.

733
Perhaps I may immediately reply to the question asked by the noble Lord, Lord Banks, at the start of his speech concerning young people who will lose £11·50 a week in housing benefit. My answer is that we have repeatedly stressed that the benefit rates that we have published are illustrative. Given the complexities of housing benefit, it is of course possible to devise all kinds of hypothetical examples of individual losses, but it is not sensible to seek to draw wide conclusions from such examples. It is the broader picture which is relevant. Overall, our proposals represent a fairer and simpler scheme.
Your Lordships will recall that as the noble Lord, Lord Banks, said, we discussed this whole matter at length during Committee, and I do not intend to go over the same ground again in the same detail. However, your Lordships will recall that we moved from the householder/non-householder distinction to the age 25 split for a variety of reasons. The former criterion was becoming increasingly difficult to administer within the heart of the supplementary benefit scheme. It was outdated and dealt with matters which were increasingly the responsibility of an entirely separate scheme—the housing benefit scheme. It was important that we should find an alternative determinant of benefit, which we succeeded in doing.
I am most grateful to my noble friend Lord Boyd-Carpenter for his remarks, and perhaps I may continue with his theme. This modified proposal would not be as costly as scrapping the age split at 25, which would cost over £200 million. But even this more restricted amendment could cost something approaching £50 million. This money would have to be found from somewhere, as my noble friend has said, and perhaps it would be at the expense of sòme other group of claimants; and when found, these resources would be directed to single and childless claimants. The scale of the resources cannot be underplayed and the use to which they would be put at the possible expense of other groups is questionable.
I must also protest at the terms of some of the criticism of our proposals. I was asked, "What is magic about the age of 25?" Of course, there is no "magic" about it. Such dividing lines are always a matter of judgment; and in our judgment age 25 is a sensible place to draw a demarcation line. It is of course supported by the significant way that it reflects the existing demarcation line of householder and non-householder. I suggest also that there is no magic about the use of "non-householder" either. It, too, has its drawbacks. It can embrace a wide range of circumstances. A middle-aged, grown-up daughter caring for an elderly parent or an unemployed man who has lost work and moved back to live with his parents are assumed to be in the same basic position as a youngster of 18 who has recently left school. It is wrong to assume that the balance of argument is all one way.
The noble Lord, Lord Ennals, referred to those with most responsibility; for instance, people with children. I remind your Lordships that our Green Paper proposals to abolish the householder/non-householder distinction received a certain amount of support. There was, it was true,
734
criticism of the proposed age split at 25, but that concern quickly centred on the effect of paying a lower rate of benefit to young couples with children. We listened carefully to the concern that was expressed and decided to modify our proposals accordingly. The White Paper proposed that all couples over the age of 18, with or without children, would receive a single rate of benefit. That means that the age split operates only for single, childless claimants.
With regard to people coming out of care, to whom both the noble Lords, Lord Banks and Lord Ennals, referred, the number of those leaving care and becoming householders immediately is not large. Some return to their families and others remain with foster parents; others are placed by local authorities in hostels or in after-care accommodation as part of a programme of rehabilitation or resettlement. In those circumstances they will be exempt from the restrictions on board and lodging allowances so long as they remain in that accommodation.
The board and lodging exemptions apply to the time limits that apply to those in board and lodging. That has to do with retaining their place of accommodation. The analogy is more with housing benefit than payment of rent and rates. I trust that the new-found enthusiasm of noble Lords opposite for board and lodging rules will still be there when we next debate that subject.
We must not overlook the following points. First of all, those who pay rent and rates will continue to get housing benefit for their housing costs. That is the most significant help for those with housing responsibilities. Secondly, the great majority of people under 25 live in other people's households. In pointing out exceptions noble Lords should not overlook that basic point. Thirdly, we have recognised the position of those who most clearly have extra responsibilities—those with families. All lone parents over 18 will get the full rate, and there is no age split for couples.
The noble Lord, Lord Pitt, speaking about the effect on one-parent families, has overlooked the fact that they will receive the higher rate. I repeat that there is no age 25 split for that group.
Lord Pitt of Hampstead: My Lords, I am talking about the one-parent family where the child is regarded as an adult and therefore the lower rate applies.
Baroness Trumpington: My Lords, I repeat that one-parent families will receive the higher rate. A family includes children. There is no age 25 split for that group.
I simply cannot agree that, when we are making a sensible move in reforming the structure of income-related benefits, we should find some way to restrict the change in the way that the amendment proposes. Indeed, it would add to the complications. In order to assess the entitlement to income support of a person aged under 25, we should have to send him to have his eligibility to housing benefit established. That cannot be right. I ask your Lordships not to accept the amendment.
Lord Ennals: My Lords, may I ask the Leader of the House to say a few points in regard to my intervention before the noble Lord, Lord Banks, winds up the debate? A number of important points were made concerning refugees which the noble Baroness did not touch upon. I am involved with the British Refugee Council and to my knowledge one-third of the young, unmarried adults who seek its advice are under the age of 25.
Baroness Macleod of Borve: My Lords, I am wondering whether the noble Lord realises that we are at the Report stage. I think that he may have asked the leave of the House, but instead of asking a question I think that he is going a little beyond the rules of the House in making another speech.
Lord Ennals: My Lords, if I ask the leave of the House and it appears that the House does not wish to give me leave, I am the servant of the House. If the view of the noble Baroness is shared by the House, I make no further comment.
Lord Banks: My Lords, I much appreciate the support that has been expressed by so many speakers in the debate. Many have underlined the point that I made at the outset, that at least in the board and lodging regulations there are exemptions for people under 25 who would otherwise be affected. We are not saying that we like the regulations. We have made it clear that we do not, but at least they have exemptions, whereas for the category that we are now considering there are no exemptions.
I asked the noble Baroness whether the figures that I gave were correct. I assume from her answer that they are. She says that they are illustrative and must not be taken too seriously. In that case what they are supposed to illustrate I do not know. If they are supposed to illustrate the effects of the Bill—and one cannot suppose that they are intended to illustrate anything else—they seem to indicate that it will fall hard on the class of person that we have been considering: that is to say, young people who are living independently, many of them with no other alternative; people who would at the moment have householder status and who will suffer a severe reduction as a consequence of what is proposed in the Bill.
The noble Lord, Lord Boyd-Carpenter, thought that we had been too extravagent in going back to the age of 18. He would apparently have considered 22 or 23, but 18 was going too far. The noble Lord, Lord Pitt, had the answer: the majority age is 18. That is when people assume the responsibilities of an adult. I do not think that we can have two adult ages: class one and class two adults. We have to have a uniform age, and it is the practice in social security legislation to have a uniform adult rate.
The noble Baroness said that the provision was a sensible method to secure saving of expenditure. When one considers the effect that it will have from the illustrative figures, it does not seem sensible for those about whom we are talking. I repeat that we are talking about young people who for one reason or another are obliged to live independently and who will suffer as a result of what is proposed in the Bill. I want to test the opinion of the House on the amendment.
6.49 p.m.
On Question, Whether the said amendment (No. 32) shall be agreed to?
Their Lordships divided: Contents, 96; Not-Contents, 140.

DIVISION NO.4

CONTENTS

Addington, L.

Kilbracken, L.

Airedale, L.

Kilmarnock, L.

Ardwick, L.

Llewelyn-Davies of Hastoe, B.

Attlee, E.

Lockwood, B.

Banks, L.

Longford, E.

Barnett, L.

Lovell-Davis, L.

Blease, L.

McGregor of Durris, L.

Blyton, L.

Mackie of Benshie, L.

Boston of Faversham, L.

McNair, L.

Bottomley, L.

Mais, L.

Brockway, L.

Mayhew, L.

Bruce of Donington, L.

Meston, L.

Buckmaster, V.

Milner of Leeds, L.

Burton of Coventry, B.

Molloy, L.

Caradon, L.

Morris of Kenwood, L.

Carmichael of Kelvingrove, L.

Morton of Shuna, L.

Chitnis, L.

Mountevans, L.

Cledwyn of Penrhos, L.

Murray of Epping Forest, L.

Crawshaw of Aintree, L.

Nicol, B.

Darcy (de Knayth), B.

Northfield, L.

David, B.

Ogmore, L.

Davies of Penrhys, L.

Oram, L.

Dean of Beswick, L.

Phillips, B.

Denington, B.

Pitt of Hampstead, L.

Diamond, L.

Ponsonby of Shulbrede, L.

Elwyn-Jones, L.

Ritchie of Dundee, L.

Ennals, L.

Robson of Kiddington, B.

Ewart-Biggs, B.

Rochester, L.

Ezra, L.

Seear, B.

Falkland, V.

Seebohm, L.

Fisher of Rednal, B.

Serota, B.

Gallacher, L.

Shackleton, L.

Graham of Edmonton, L.

Shepherd, L.

[Teller.]

Silkin of Dulwich, L.

Grey, E.

Stallard, L.

Hampton, L.

Stedman, B.

Hanworth, V.

Stoddart of Swindon, L.

Harris of Greenwich, L.

Taylor of Blackbum, L.

Hatch of Lusby, L.

Taylor of Mansfield, L.

Hayter, L.

Tordoff, L. [Teller.]

Henderson of Brompton, L.

Turner of Camden, B.

Heycock, L.

Underhill, L.

Hooson, L.

Vemon, L.

Houghton of Sowerby, L.

Wallace of Coslany, L.

Howie of Troon, L.

Walston, L.

Hunt, L.

Wells-Pestell, L.

Ingleby, V.

Whaddon, L.

Jeger, B.

Wilson of Langside, L.

John-Mackie, L.

NOT-CONTENTS

Ailsa, M.

Buckinghamshire, E.

Airey of Abingdon, B.

Butterworth, L.

Alexander of Tunis, E.

Caithness, E.

Ampthill, L.

Cameron of Lochbroom, L.

Ashbourne, L.

Campbell of Alloway, L.

Auckland. L.

Camegy of Lour, B.

Barber, L.

Carnock, L.

Belhaven and Stenton, L.

Cathcart, E.

Beloff, L.

Coleraine, L.

Belstead, L.

Colville of Culross, V.

Bessborough, E.

Colwyn, L.

Boyd-Carpenter, L.

Constantine of Stanmore, L.

Brabazon of Tara, L.

Craigavon, V.

Braye, B.

Craigmyle, L.

Brougham and Vaux, L.

Crathome, L.

Broxbourne, L.

Crawshaw, L.

Bruce-Gardyne, L.

Cross, V.

Buccleuch and Queensberry,

Cullen of Ashbourne, L.

D.

Davidson, V.

737

Denham, L. [Teller.]

Mountgarret, V.

Derwent, L.

Mowbray and Stourton, L.

Drumalbyn, L.

Munster, E.

Dulverton, L.

Murton of Lindisfarne, L.

Eden of Winton, L.

Northesk, E.

Elliot of Harwood, B.

Orr-Ewing, L.

Elliott of Morpeth, L.

Pender, L.

Elphinstone, L.

Peyton of Yeovil, L.

Elton, L.

Plummer of St Marylebone,

Fortescue, E.

L.

Gardner of Parkes, B.

Portland, D.

Glanusk, L.

Portsmouth, E.

Glenarthur, L.

Rankeillour, L.

Gray, L.

Renton, L.

Greenway, L.

Renwick, L.

Gridley, L.

Ridley, V.

Grimthorpe, L.

Rodney, L.

Hailsham of Saint

Russell of Liverpool, L.

Marylebone, L.

St. Aldwyn, E.

Harmar-Nicholls, L.

Saint Oswald, L.

Henley, L.

Sandford, L.

Hesketh, L.

Sandys, L.

Hives, L.

Savile, L.

Home of the Hirsel, L.

Shannon, E.

Hood, V.

Sharples, B.

Hooper, B.

Skelmersdale, L.

Hylton-Foster, B.

Soames, L.

Inchcape, E.

Stodart of Leaston, L.

Kaberry of Adel, L.

Strathclyde, L.

Keyes. L.

Strathcona and Mount Royal,

Kimball, L.

L.

Kimberley, E.

Sudeley, L.

Kinloss, Ly.

Swinfen, L.

Kintore, E.

Swinton, E. [Teller.]

Lane-Fox, B.

Thomas of Swynnerton, L.

Lauderdale, E.

Thorneycroft, L.

Lawrence, L.

Torphichen, L.

Layton, L.

Tranmire, L.

Lindsey and Abingdon, E.

Trefgarne, L.

Liverpool, E.

Trenchard, V.

Long, V.

Trumpington, B.

Lothian, M.

Tryon, L.

Lyell, L.

Vaux of Harrowden, L.

Macleod of Borve, B.

Vestey, L.

Malmesbury, E.

Vickers, B.

Mancroft, L.

Vivian, L.

Marchwood, V.

Waldegrave, E.

Margadale, L.

Whitelaw, V.

Maude of Stratford-upon-

Wynford, L.

Avon, L.

Yarborough, E.

Merrivale, L.

Young, B.

Monson, L.

Young of Graflham, L.

Montgomery of Alamein, V.

Zouche of Haryngworth, L.

Mottistone, L.

Moved accordingly, and, on Question, Motion agreed to.

6.58 p.m.
Lord Denham: I move that further consideration on Report be now adjourned. It will be fair to say that your Lordships will not come back to this Bill before 8 p.m.

Incest and Related Offences (Scotland) Bill [H.L.]
6.59 p.m.
Lord Wilson of Langside: My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Lord Wilson of Langside.)

COMMONS AMENDMENTS
[References are to [Bill 150] as first printed for the Commons].
1 Clause 1, page 2, line 40, leave out "under the age of 16 years".
2 Page 2, line 41, after "offence", insert "if that step-child is either under the age of 21 or has at any time before attaining the age of 18 lived in the same household and been treated as a child of his or her family.".
3 Page 3, line 2, leave out "16" and insert "21".
Lord Wilson of Langside: My Lords', with the leave of the House, I beg to move that this House do agree with the Commons in their Amendments Nos. 1, 2 and 3 en bloc. The amendments amend Clause 1. The Bill, when it left your Lordships' House, inserted a new section into the Sexual Offences (Scotland) Act 1976. That was Section 2B. The section makes it an offence for any step-parent to have sexual relations with his or her step-child under the age of 16. The effect of the poposed amendments, with which I ask your Lordships to agree, is to constitute the offence where the step-child is under 21 or has at any time before the age of 18 lived in the same household and been treated as a child of the step-parent's family. The amendments are obviously designed to bring the Bill into line with the Marriage (Prohibited Degrees of Relationship) Act 1986.
I can appreciate and understand the concern felt about this aspect of the Bill as it originally stood. However, I should certainly have preferred the Bill as it stood. The amendments proceed, I believe, from a perhaps inadequate appreciation of the social and legal implications of this measure. I can see that without offence. Indeed, my first thought, when I originally looked at the matter, was to make the age in this context that of 21. The danger of the change is that relationships may be criminalised that should not be so treated.
As the matter now stands, the Lord Advocate will have to keep a watchful eye on the working of the Bill in this context because the offence can carry a sentence of life imprisonment. 1 shall not weary your Lordships during the dinner hour by repeating some examples that were touched upon during the debates that took place as the Bill was going through your Lordships' House—the dangers and the undesirability of criminalising certain relationships that should not be so treated. I am sure that all your Lordships can imagine human situations that should not be regarded as criminal developing in this context. I say no more, however, except to ask your Lordships to agree to the amendments.
Moved, That this House do agree with the Commons in the said amendments.—(Lord Wilson of Langside.)
Lord Skelmersdale: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
[The Sitting was suspended from 7.4 p.m. until 8 p.m.]

Social Security Bill
Consideration of amendments on Report resumed.
Baroness Faithfull Baroness Faithfull moved Amendment No. 33:
Page 26, line 21, at end insert—
("( ) In urgent cases income support shall be payable in accordance with this Act as modified by regulations, and regulations shall prescribe the cases which are urgent cases for the purpose of this subsection.")
The noble Baroness said: My Lords, this amendment concerns urgent cases of income support. When a claimant applies for income support quite rightly his circumstances are looked into and his case is considered. I have to say that such a process very necessarily and understandably sometimes takes some time. However, there are times when urgent cases need to be helped immediately; for example, when a child is taken ill very suddenly and has to go into hospital and the doctors and nurses advise either the mother or the father, or both, that they must visit the hospital frequently or that they must stay. Very often those men and women—the parents—cannot do that because of lack of money.
There is also the example of the hospice. People are taken into hospital when they are dying and money is needed immediately for perhaps fares or special equipment. There is also the question of women who leave their husbands because they have been cruelly treated and are admitted to a women's hostel. Those cases need urgent help—either help on a one-off basis or sometimes for a week or so.
All that the amendment asks is that there should be regulations which,
"prescribe the cases which are urgent cases for the purpose of this subsection".
It is recommended that those cases be prescribed so that the doctors, the social workers and the nurses will know what they can advise parents or claimants they can or cannot have. I beg to move.
Lord Ennals: My Lords, I rise briefly to support the amendment which has been tabled by the noble Baroness, Lady Faithfull, and to say that I agree with the arguments which she has put forward. We are talking about something which is not expensive; in fact, it will probably not cost any more than the present measures contained in the Bill. However, it will lead to rapid decisions, which I think is what the noble Baroness has in mind.
In very special cases—and the noble Baroness has described some of them—humanity demands that assistance be given in order that those needs can be met. However, we cannot write humanity into a Bill, but we can humanely prescribe or list the type of situations which can be dealt with. Indeed, as I understand it, that is what is behind the amendment.
I very much hope that the Minister will feel that she can accept the amendment. If she were to do so, it would bring some pleasure to the House, especially bearing in mind that so many amendments have been defeated or the Minister, no doubt with wisdom as she thought, has put up arguments against them. On this occasion it seems that the arguments in favour of the amendment are overwhelming.
Baroness Ewart-Biggs: My Lords, I support my noble friend and the noble Baroness, Lady Faithfull. It seems that what is requested by the amendment is most extraordinarily reasonable and moderate. After all, every family has its crises and those crises, because of their very nature, always need an immediate response. The amendment seems to deal with the situation and obviously would only focus on particular cases which need immediate help. Therefore, as my noble friend Lord Ennals has said, the amendment seems to be a proposal that may melt what up to this moment has been the rather frigid heart of the noble Baroness opposite.
Viscount Buckmaster: My Lords, I also rise to support the amendment and in doing so I should like to ask the noble Baroness whether she will bear in mind particularly the special needs of asylum-seekers and those awaiting leave to remain in this kingdom. I think that your Lordships will agree that many of those people have very special needs, some of which were mentioned in Committee, and I feel that those needs are particularly applicable to this amendment.
Baroness Trumpington: My Lords, the question of benefit provision in cases of urgent need is clearly an important one, and I thoroughly appreciate the reasons why my noble friend has moved the amendment and the support that she has received for it. We have already had a substantial debate on this subject in Committee, but I welcome this further opportunity to reassure your Lordships that we recognise the continuing need to provide for urgent needs after 1988.
The present urgent cases regulations cover a wide variety of circumstances—17 in all. They all have two common factors; namely, that a normal payment of supplementary benefit is not payable, and the person has no other resources available. But that is essentially all that they have in common.
In fact these payments range widely. At one end of the scale there is payment to a person who has had his wallet stolen. At the other end you can have a continuing payment to a person from abroad awaiting a decision by the Home Office on his immigration status. These are completely different types of payment. Clearly both persons have a need, and one which is outside the scope of the normal supplementary benefit scheme. While one is a one-off financial crisis, the other situation could clearly continue for weeks, if not months.
In considering the best way of helping those people after April 1988 we have come to the conclusion that there is no logical or convincing argument for continuing to provide for urgent cases in the same way as we do now under current supplementary benefit regulations. We have always made clear that we see the social fund as providing for people who are facing an immediate financial crisis. Indeed, that is how we would expect to help the man with the stolen wallet or to pay fares for the parents of a child who has been run over and is in hospial—regardless of whether they were on income support or in full-time employment.
But the second type of circumstances should be met within the weekly benefit system. I am happy to repeat my comments made in Committee that we see some

741
merit in allowing for the treatment of circumstances such as these in the income support scheme rather than the social fund. We believe that income support should deal with weekly benefit including those cases where circumstances mean that it is not possible to start normal weekly benefit. Therefore, I can reasssure my noble friend Lady Faithfull that we are in sympathy with the intention behind her amendment. However, I hope that my noble friend will recognise that, despite the fact that I still have such a chilly heart on the surface, we cannot recommend acceptance of the amendment. There is simply no need to amend the Bill in this way to achieve the results which my noble friend is seeking.
Your Lordships and, in particular, the noble Viscount, Lord Buckmaster, will recall that in Committee I indicated that we can pay asylum-seekers income support in the normal way without amendment to the Bill. In the same way we can pay income support in circumstances where a person not otherwise entitled to benefit requires help because his normal source of income has been disrupted by circumstances beyond his control. I do not believe that we should amend the Bill without good cause. I hope that what I have said will have reassured both noble Baronesses that this amendment is not necessary.
Lord Ennals: My Lords, before the noble Baroness sits down may I ask her a question? Obviously it is important, and she would agree, that those who have to take decisions about this sort of payment in offices up and down the country would want to have some common pattern. How will she be able to ensure that common pattern if the nature of the cases is not prescribed as suggested by her noble friend?
Baroness Trumpington: My Lords, as the noble Lord knows, for the social fund there will be directions for people working in local offices. There is also a lot to be said for good common sense under these circumstances. I think that the combination of the two answers the noble Lord's question.
Baroness Faithfull: My Lords, may I thank my noble friend the Minister for her sympathetic reply? I am a little sad from a practical point of view that, as stated in the amendment, the cases are not to be prescribed. The supplementary benefit offices are not on duty over weekends, whereas social service departments are on duty over weekends.
Many has been the time when I have had to give money out of the social services department for emergency cases. If it had been in regulations one would have known whether one could do that or not. Having said that, I am grateful to my noble friend the Minister for her sympathetic response to this amendment, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Trumpington Baroness Trumpington moved Amendments Nos. 34 to 37:
Page 26, line 22, at beginning insert ("Subject to regulations under section 50(l)(a) below.").
Page 26, line 23, leave out ("his") and insert ("the").
Page 26, line 29, after ("he") insert "or, if he is a member of a married or unmarried couple the other member of the couple,")
Page 27, line 19, leave out subsection (13).
The noble Baroness said: My Lords, I beg to move Amendments Nos. 34 to 37, and speak at the same time to Amendments 39, 44, 65, 66, 76 and 77. These amendments give effect to the announcement I made at Committee stage that the Government had decided that when family credit is introduced in 1988 it will be paid direct to recipients by the Secretary of State rather than by employers, with wages, as originally proposed. The amendments also make the necessary provision in the entitlement clauses to allow entitlement to rest with the mother in two-parent family cases.
As your Lordships will see, we are removing all the material in the Bill relating to payment through employers, and all the bits and pieces arising there from concerning recovery from national insurance contributions and so on. There is no need for us to make specific provision on the face of the Bill for payment to be made by the Secretary of State. As with other benefits, this is covered by the common provisions powers in Clause 50.
I should point out some further consequentials of no longer paying family credit through employers. We have removed the provision for family credit to be terminated on the recipient becoming unemployed or changing his job. We now intend that once family credit is awarded it will run its full term without regard to changes in circumstances; just as in FIS at present, except of course that family credit will last for only six months instead of 12. Secondly by deleting Clause 28 in its entirety we have removed the provision for family credit to be suspended when the recipient is on strike or otherwise temporarily off work.
The detailed arrangements for claims and payments will be specified in regulations. However, I can tell your Lordships that we envisage that the regulations will provide that the mother will normally be the one to make the claim—though wherever possible we should want the man to countersign the claim form to endorse the information about his employment, etc., and as acknowledgment that he is aware of the claim. Similarly, regulations will provide that the woman will normally be the main payee, with the order book addressed to her, but that as in FIS the man would be shown as alternative payee.
Also included in this group of amendments is a minor technical amendment to the provisions regarding aggregation of resources in Clause 22(3). During our examination of the issues raised by the family credit changes, a slight doubt emerged over the precise wording used in that subsection. We have therefore brought forward a minor technical amendment designed to remove these doubts and clarify our intentions. I would remind your Lordships that the purpose of this particular subsection is to provide that income and capital of members of a family are to be added together and treated as belonging to the claimant. This of course, is not a new concept, my Lords. Rather it is a continuation of an approach accepted by successive Governments as essential for income-related benefits.
Finally, my Lords, with regard to Amendment No. 44, this must surely be unique in that the Front Bench

743
spokesman for Her Majesty's Opposition and the Minister on the Government Bench have joined hands with a joint amendment. All I wish to do is to quote from the old song:
"Lord help the Mister who comes between me and my sister. And Lord help the sister who comes between me and my man."
I commend these amendments to your Lordships. I beg to move.
8.15 p.m.
Baroness Jeger: my Lords, I can only say how happy I am that the noble Baroness and I have our joint names to Amendment No. 44. I am not sure which of us is Queen Elizabeth I and which of us is Mary Queen of Scots, or who is going to chop off whose head. But for the moment, this is a practical and acceptable amendment. I appreciate that what we are asking the Government to agree with tonight is not a defeat. The propositions that have been put forward arise out of a consensus not only of people on all sides of this House but of people outside who do a great deal of work and who know the difficulties.
Therefore, I am happy that we are able, I feel on an historic occasion, to have our joint names to the same amendment. 1 only wish to ask the noble Baroness, and I hope not in any unfriendly way, what is going to be put in instead of Clause 28. It is all very well for us to take out Clause 28, but what are we going to put in instead of Clause 28? I hope that the noble Baroness will be able to tell me that. Apart from asking that simple question, I am glad that we have this unanimity.
Lord-Boyd Carpenter: My Lords, I too very much welcome this implementation of the noble Baroness's promise to take out of the Bill the original provision for payment for this benefit through the employer and through wages. Apart from the social aspects, that promised a considerable burden, particularly for small employers. As your Lordships may recall, when my noble friend made the announcement it was generally welcomed, and it is nice to see it being implemented.
Lord Ennals: My Lords, may I also add a word? I know that at some stage in this Bill, and possibly in a previous Bill, I made a criticism of the way in which the noble Baroness said "No" to everything, however convincing the arguments seemed to those who presented them. I remember saying to her that the purpose of a Committee stage here or in another place was to get the best possible result, and therefore to give way if the case presented to the Government was a convincing one.
Having said that on a previous occasion, 1 think it is proper that I should say to the noble Baroness how grateful I too feel that the representations that came from so many different quarters have been listened to. They make a major change to the Bill not only to the women (because it will be mainly the women who benefit, and their children) but, as the noble Lord, Lord Boyd-Carpenter, said, to employers and particu-arly small employers. I think it is a very wise decision that the Government have taken. When we criticise them for taking stupid decisions it is also appropriate that we should congratulate them on taking wise decisions.
Lord Kilmarnock: My Lords, we on these Benches also welcome this series of amendments. This clearly was a matter which gave rise to considerable concern in that the family credit might not find its way into the right pocket or the right purse. As the noble Lord, Lord Ennals, has said, there were also considerable concerns on the part of employers, particularly small employers. Both on the one hand and on the other the Government have listened on this occasion. We welcome that, and also the evidence of good intentions in the case of the amendments we shall be moving later. We shall reach them in due course. In the meantime, we welcome this very much indeed.
Baroness Trumpington: My Lords, with the leave of the House, I should like to thank my noble friend Lord Boyd-Carpenter and the noble Lords, Lord Ennals and Lord Kilmarnock, for their general welcome to these amendments. I should like to point out that we are a listening Government, and that these amendments have come about through consultation with women's organisations, small businesses and other interested parties. I am sure that my right honourable friend in another place will be glad to hear the remarks that have been made this evening. To the noble Baroness, Lady Jeger, about the clause, the answer is, "Nothing".
Baroness Jeger: My Lords, with the leave of the House, I asked the noble Baroness a question about what would be put in instead of Clause 28.
Baroness Trumpington Baroness Trumpington. Nothing, my Lords.
Baroness Jeger: Then, my Lords, there is a vacuum in legislation, which I shall enjoy.
Clause 22 [Calculation]:
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 38:
Page 29, line 29, at end insert ("and shall include an amount which shall be the whole of any mortgage interest for which a member of the family is liable on the home of the family.")
The noble Lord said: My Lords, after that note of happy consensus I am afraid that I have to return to a more contentious issue; that is, the question of docking 50 per cent. from the mortgage interest relief at presently available in full to those who become unemployed during the first six months that they are receiving benefit. This is a matter of great public interest, as was evidenced by the half-hour programme devoted to it last Thursday night on "TV Eye". The amendment provides that
"an amount [shall be included] which shall be the whole of any mortgage interest for which a member of the family is liable on the home of the family".
Essentially, this is a problem arising from the extension down the income scale of home ownership by people on much lower incomes or in less than stable employment. Nearly a million houses have been sold under the right-to-buy, and many of them to very low income people. This may seem an excellent thing in itself, but since 1982 it has been accompanied by a quantum leap in the number of mortgages in arrears from 8,500 to 50,000 and in the number of

745
repossessions from 2,500 to 16,000. The housing aid centre cases have doubled in number. In one Liverpool private housing estate alone 70 per cent. of the homes are subject to repossession orders.
I do not know how many of your Lordships saw it, but in the "TV Eye" programme Mr. Newton, the Social Services Minister, dismissed the rise in arrears as an inevitable by-product of the success of the home ownership promotional campaign. But it seems rather disproportionate when a 17 per cent. increase in home ownership since 1979 is accompanied by a 600 per cent. rise in arrears.
When one considers the effect of the Government's proposals on families, it could be pretty devastating. Even if the lender will agree to reschedule the loan (that is incorporating not only the principal but the interest payments back into the loan) the householder is constantly increasing his or her debt. Here we come to a strange anomaly. If that householder is able to survive the first six months, during which period the Government are proposing to reduce assistance, he or she will then qualify for full remission under the supplementary benefit rules and the Government will find themselves paying interest on deferred interest instead of paying interest in the first place. This could have a boomerang effect.
Furthermore, the six-month period during which the Government are intending to penalise could prove a crucial period, particularly for deserted women or those who have obtained an exclusion order, for example, against a violent husband. A woman in this position may be aware that she will be unable to keep the house in the longer term, but it is during the first few months after marital breakdown that she needs a secure roof and a breathing space to recover her self-confidence and make plans for the future, which may involve seeking alternative rented accommodation. If relief is not forthcoming the importance of keeping a roof over the family's head may cause some mothers to use benefits intended for their children to maintain mortgage interest payments.
On the question of equity, I submit that the argument falls heavily in favour of continuing this support with mortgage interest during the first six months of unemployment or supplementary benefit. The state accepts responsibility for the full housing costs of tenants claiming supplementary benefit. There is no cogent reason for refusing similar assistance to those who have been encouraged to buy their own homes as an expressed aim of Government policy. It is among those who have bought their council houses under the right-to-buy and who have subsequently lost their jobs that the greatest number of mortgage casualties has arisen.
In the "TV Eye" programme to which I referred Mr. Newton suggested that it was not wholly a problem for the Government; the building societies, banks and finance houses were also involved. That may seem a fair point. Building societies and banks have undoubtedly been competing to lend 100 per cent. mortgages or even more if some of the ancillary services on offer are included. So how much blame should they take for over-easy lending and not scrutinising people in the way they used to? In the
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programme the chief general manager of Nationwide claimed that his society was performing an act of social conscience in lending to buyers at the bottom of the market. That may be true of Nationwide, but it does not prevent other societies from repossessing for arrears for as little as £300. Social conscience or no, the Nationwide general manager was, to quote his words on the programme:
"wholly opposed to the Government's proposal".
His view was shared by a number of Conservative Members of Parliament, who voted against the Government on this issue.
Where does all this leave us? I think it leads us on these Benches to demand that, at the very least, the Government rethink their policies on this matter. I know that there is an appetising saving to be gained from the Government's proposals which would be in the region of £30 million, as I understand it. But this has to be set against the £4 billion to £5 billion of mortgage tax relief extended to people in jobs and often on very high salaries which stretches right up the tax scale to the high rates. It also has to be seen against the 100 per cent. relief given to tenants in similar circumstances. It is not, therefore, inequitable that new home owners in difficulties should receive similar assistance.
In its last report the Social Services Advisory Commitee (this was its opinion in paragraph 3.39) said:
"We do not think a scheme of this kind could be justified at all, unless the building societies and other mortgage-giving bodies were prepared to give comprehenisive assurances about the availability of rescheduling. In commercial terms many cases would presumably arise where because of previous unemployment or sickness and the claimant's likely income when employed, a building society would be extremely reluctant to reschedule the debt. These are issues which would need to be fully resolved before a decision could realistically be taken to limit mortgage payments for any sizeable length of time. However, even if such points could be settled satisfactorily, we would still doubt the wisdom of the proposal because of its inequity. Both on income support and in low-paid work, a claimant who was an owner-occupier would be treated less generously than a tenant with similar total housing costs, even after mortgage tax relief had been taken into account. This discrimination sits very oddly with the Government's expressed policy of encouraging owner-occupation as the preferred form of tenure."
That is the view of the Social Security Advisory Commitee. I want to be fair to the committee, and I take Mr. Newton's point that lending bodies should at least accept a measure of co-responsibility. They could improve their scrutiny and reduce their eagerness to lend at all costs. This would reduce the eventual cost to the public purse in the event of failure. The social conscience claimed by Nationwide could take the form of either better counselling initially or rescheduling the debt when a home owner falls on hard times. Presumably that is a minimal act of social conscience.
As I have already indicated, rescheduling can present mounting problems for home owners on low incomes, and if they fail to find work, it can also present a problem for the Government in meeting additional interest payments after the first six months. The Government have, after all, promoted the homeownership explosion. They must recognise that the number of those who fall by the wayside is likely to increase as a result of it—and, in fact, is increasing dramatically.
The Social Security Advisory Committee is at present holding an inquiry for which I assume it has invited evidence from professional and consumer bodies. What I want to hear from the noble Baroness tonight is that the Government will not prejudge the results of the inquiry and that they will keep an open mind on withdrawing their proposal until they have received and studied the report. I do not think that the Government would want the impression to get about in the country that under the Tories you get the right to buy your own home but you do not get the right to keep it. I beg to move.
8.30 p.m.
Lord Stallard: My Lords, I rise to support the amendments moved so eloquently by the noble Lord, Lord Kilmarnock, and since he has covered most of the points to which I would have liked to refer, perhaps I can be brief. The problem we are discussing is part of our own making, as the noble Lord rightly says; and it is part, certainly, of the Government's own making. It was one of the Government's main policy planks—and one may argue whether it is right or wrong—to encourage home ownership, to sell council houses and council flats to tenants at cut-down prices or reduced prices. Many people went into that because so far as they were concerned it was as cheap, or nearly as cheap, as renting. One can understand that.
Then all sorts of other factors came into being—unemployment among others. This has created difficulties for those families who were already stretched to buy their house and now find themselves over-stretched. So the problem which is outlined by the change in this clause is partly of the Government's own making. It seems churlish, to say the least, that having encouraged these people to buy and to get themselves into this situation, we then say at the same time that we are going to cut by half the amount of assistance that they would get, having got into these difficulties that were not their fault in the first place. That seems a bit hard to accept, and we know that many people in that situation are in real trouble. There has been a sharp increase in the number of people who own their own homes; it is a fact that two-thirds of the households in England and Wales are now owner-occupiers. Many new owners are people who are just about able to manage, just struggling to make the best of it. But the number of those in arrears has trebled since 1979. In 1984, according to the latest figures that are available, there were 54,754 mortgage possession cases, compared with 35,471 in 1981. Possession for mortgage arrears is now one of the more worrying causes of homelessness, and certainly more worrying than possession for rent arrears. Homelessness created by mortgage arrears is now in excess of that created by possession for rent arrears; that is something which is different and which certainly worries us all.
The Joint Consumers Council-Social Security Committee looked at this problem and produced a research document called, Behind the Mortgage: 1985. They identified three causes for the problem: the increase in unemployment; the increase in divorce and separation; and the stretched budgets as lower-income households struggle to meet repayments. There is a real problem here. The lenders' different approaches to the arrears has been mentioned by the noble Lord,
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Lord Kilmarnock. Many of them take different approaches. Some of them will accept interest-only repayments—but not all of them. In fact, 16 per cent. of local authorities refuse to accept interest-only repayments in any circumstances. A total suspension of interest payments is extremely rare. I think that probably the only instances of that were when some societies did so in the recent miners' dispute. But it is exceedingly rare and it is linked to the capabilities for future payments by the tenants.
Most of the people in these circumstances have nowhere to go. It is almost impossible for people on low incomes with high arrears to trade down; there is no way in which they can manage it. They cannot do it. So there is nowhere to go. If they sell before the repossession order comes in, they will be deemed to have made themselves deliberately homeless and they will not even qualify for local authority assistance or bed-and-breakfast accommodation. It can be an exceedingly worrying situation. Reposssession is growing through all these factors. Many of these unemployed and divorced families have survived, and are surviving, only because of the supplementary benefit provisions that were included prior to this clause. Now it is the intention of the Government to cut those payments by half. That means that there will be a dramatic increase in the number of people who are in severe difficulties. Amendment No. 38 seeks to rectify that, and I support it.
Baroness Jeger: My Lords, I support this amendment and I want to ask a specific question. I referred to this matter on 23rd June when I asked the Minister what would happen if someone was unemployed for six months, got his mortgage interest paid, got a job for a little while, but then lost it. Would he have to go back to the beginning of the six months, or would he be helped? The noble Baroness said:
"The noble Baroness, Lady Jeger, raised questions of linking arrangements for people who have two spells of benefit with only a short time in work. I shall consider this along with other matters". [Official Report, 23/6/86; col. 114]
All that I ask tonight is, what has been the result of the Minister's consideration.
Baroness Trumpington: My Lords, there is little that I can add to what I have already said in Committee. However, I shall add what little I can. I have set out the Government's conviction that it is unfair to give 100 per cent. guarantee of state help on mortgage interest to people out of work when others in work on comparable incomes have a much greater burden to carry themselves.
We are also very concerned that a proper balance must be struck between the interests of borrowers, lenders and taxpayers. I have also said that we have referred draft regulations to give effect to our proposals to the Social Security Advisory Committee. The committee has not yet completed its consultations with interested organisations and the general public. We expect to receive its report some time in August, and I assure the noble Lord, Lord Kilmarnock, that only after that will we take final decisions. It would be premature to make a firm choice now, as the amendment invites us to do. Also of course there will be an opportunity for Parliament to debate any regulations which we eventually decide to bring forward.

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I think I should also leave your Lordships absolutely clear on one point: that in rejecting this amendment no irrevocable decision on future help with mortgage interest is being taken. The regulations we shall be bringing forward under Clause 21 will specify in detail the help we intend to make available for mortgage interest, and we have made special provision in the Bill to have those regulations laid before Parliament in draft so that they can be fully debated.
In Committee the noble Lord, Lord Kilmarnock, expressed the view that people who had bought houses under the right-to-buy scheme and then become unemployed may be made homeless if this regulation comes into force. While I accept that lending organisations will need to operate sensitively—and I am confident that they will do so—I do not think the proposals in themselves will have the effect envisaged by the noble Lord. On average, arrears arising from the proposals will amount to no more than £200—not an over-significant amount if added to the average 25-year mortgage debt. Even for people with relatively larger mortgages, the arrears will total no more than the equivalent of three months' interest payments. It is unlikely that a lender will repossess for such a sum. Furthermore, building societies have indicated their preparedness to help individual borrowers over short-term difficulties. That is why we have decided to limit the state guarantee for the first six months.
The Government encourage home ownership through tax reliefs, discount sales of rented homes and the right-to-buy schemes. Taxpayers should not have to underwrite these forms of support from the very first day on benefit to the extent that they do now. Building societies should accept that to expand business as they have done carries with it some social responsibility. The capitalised arrears concession will assist societies to reschedule loans.
The noble Baroness, Lady Jeger, asked about linking arrangements, and I well recall what I said to her at an earlier stage. To protect people with short breaks in entitlement to benefit we also propose to introduce an eight-week linking rule. Anyone who goes off benefit for eight weeks or less will not have to start the six-month period again. With those assurances, and in the expectation of the report coming shortly from the Social Security Advisory Committee, I would ask your Lordships not to press this amendment.
Lord Pitt of Hampstead: My Lords, before the noble Baroness sits down, I notice that the Government are willing to think again on the question of the mortgage. Will they also think in terms of taking into account the cost of repairs and insurance to cover the structure? These are all things which can be difficult when somebody is out of work and needing help.
Baroness Trumpington: My Lords, with the leave of the House, I have said that it is premature for me to answer now. The general rule is that we do not take into account repairs to houses.
8.45 p.m.
Lord Kilmarnock: My Lords, I am grateful to those noble Lords who have participated in this short debate
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on this rather important matter. I was interested to hear the noble Lord, Lord Stallard, say that mortgage arrears are actually in excess of rent arrears. That is certainly an important point. Also I think he said that 16 per cent. of societies refused to accept interest-only repayments. I hope those are two considerations which the Government will bear in mind.
Obviously we welcome the announcement made by the noble Baroness in response to the noble Baroness, Lady Jeger, on the eight-week rule. I find it difficult to go along with the noble Baroness when she says it is unfair to those in work to have to support those out of work. She made no reference to the far greater unfairness of not giving homeowners the same protection as tenants. That really is the essential issue of equity in this matter, in my view.
However, at the same time I was glad to hear her say that the report is expected from the Social Security Advisory Committee in August and that no irrevoca-ble decision has been taken by the Government in recommending the rejection of this amendment. She said it would be premature to make a decision, and in fact I agree with her. I was not going to press this amendment, but I wanted to air this important matter. It represents an area of growing concern and we have now had an opportunity to discuss it.
There are other points one could take up, such as the unliklihood of repossession for a debt of a little as £200; but that is probably a minimum figure and, when added back into the debt, presents a further problem for the eventual reduction of that debt. I agree with the noble Baroness that the building societies have some social responsibility in the matter, and I imagine that this will be discussed during the consultation process with the Social Security Advisory Committee. Bearing in mind all those points I shall not press the amendment, but certainly when the Government finally come forward with regulations, if they are unsatisfactory or inequitable, we shall return to this matter. On that note I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Trumpington Baroness Trumpington moved Amendment No. 39:
Page 29, line 35, leave out from ("shall") to end of line 36 and insert (", except in prescribed circumstances, be treated as the income and capital of that person.")
Baroness Faithfull Baroness Faithfull moved Amendment No. 40:
Page 30, line 4, at end insert—
(", provided that, in calculating or estimating income from employment, any expenses necessarily incurred in connection with that employment shall be deducted from the income ").
The noble Baroness said: My Lords, this amendment deals with the difficult question of volunteers' expenses. I do not wish to detain your Lordships by making a Second Reading speech, but at this point I would just say that in your Lordships' House we pay tribute to the volunteers in this country who do so much voluntary work, whether they are unemployed or in work on low pay.
When the Government put forward the proposals to raise the earnings disregard for unemployed people to £5 from £4 but to allow no deduction for work expenses, many of us thought it could adversely affect

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people doing voluntary work who have their expenses reimbursed. It is easy to exempt volunteers' expenses. The problem arises where the person is receiving some small remuneration in addition to the reimbursement of expenses. For example, a volunteer driver who had £10 expenses reimbursed would suffer no loss of benefit because the £10 would be ignored; but someone doing similar work and earning £5 a week on top of the expenses would presumably not be treated as a volunteer. The earnings of £5 would be covered by the £5 disregard, but the expenses of £10 would be deducted from the benefit. Of course the regulations may say that if your earnings are only £5 net, you can be treated as a volunteer; but then what about someone who earns £10? Would my noble friend the Minister not agree that perhaps the simplest thing of all would be to say that work expenses should be deductible? I beg to move.
Lord Ennals: My Lords, I shall be brief in supporting the noble Baroness. I think the problem of definition between a volunteer, on the one hand, and a volunteer who gets a small honorarium for the work he or she does, on the other, is a very difficult one. As I have had the privilege of seeing, there is a very substantial growth across the country of schemes, sometimes based on a volunteer plus a driver and sometimes based on a volunteer plus a home helper (not a home help) for those who are disabled and elderly. I think it is difficult to say just what the difference is between a volunteer and a volunteer who might actually be making a very small sum of money because he or she probably lives on a low or modest income. It seems to me that the noble Baroness has hit on a very reasonable way of dealing with this particular problem. I shall be very interested to hear the Minister's answer, because clearly an answer has to be found, and if the Minister has that answer I shall leap up and say "Thank you".
Baroness Ewart-Biggs: My Lords, as I had my name down to the amendment when it was mooted at Committee stage, and as it now appears in a different form, perhaps I can say a few words. As many of us know from our postbags a great deal of concern has been expressed about the effect of the proposal in the Bill. The majority of people involved were unemployed and doing voluntary work, as the noble Baroness, Lady Faithfull, said, for which they were paid only expenses. At Committee stage the Minister was very sympathetic and said:
"I understand the concern that people should not be put off volunteering by this change. We have a great deal of sympathy and admiration for the valuable work undertaken by volunteers. Genuine expenses will continue to be disregarded. Therefore, the amendment is unnecessary".—[Official Report, 24/6/86; col. 132.]
We accepted that the Minister was sympathetic and that there was little to fear. Since then we have understood there have been discussions between officials and outside advisers and that a concession limited to volunteers' expenses would create new and indefensible anomalies. These are of such complexity that I do not think that I can go into them now, but it does mean that the anxiety is still there. We are very much looking forward to a slightly different answer from the Minister this evening.
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May I add that I have received in particular a number of letters from Northern Ireland. Northern Ireland has already been mentioned as suffering a great deal more from some of the provisions than other places. As your Lordships will know, volunteer work in Northern Ireland is really one of the great professions, and I think there are more people involved in voluntary work there than perhaps anywhere else in the United Kingdom.
I have received, as I say, many letters. One of those letters comes from the Belfast Voluntary Welfare Society, and it says:
"We have been finding increasingly that motivation has been weakening among the young unemployed and that the little extra expenses have been absolutely critical in ensuring that we are able to move unmotivated youngsters onto the beginning of a pattern which moves through volunteering, hopefully on to either a training scheme or an MSC type of employment scheme and then on into employment. If our reading of the new Bill is correct, the Government is going to remove a key link in our very tortuous attempts to tempt some of the young unemployed towards the employment market."
My Lords, the anxiety is still there despite what the noble Baroness said at Committee stage, and the noble Baroness, Lady Faithfull, has suggested a way in which those anxieties can be diminished. I very much hope that the Minister will take that road.
Lord Banks: My Lords, I should like briefly to support this amendment and testify to the fact that the anxiety referred to is still very prevalent for the reasons so cogently expressed by previous speakers.
Baroness Trumpington: My Lords, there has undoubtedly been some confusion between two issues here, and that is why I was particularly anxious to take these amendments separately. I hope my explanations will have the noble Lord, Lord Ennals, leaping like a Lord.
First, there is the question of how we define the earnings or resources which will be included in the calculation which determines the level of benefit. The second is the extent to which these earnings will be taken into account in calculating the benefit. This latter question raises the subject of specific automatic disregards—i.e., we say a certain level will be ignored. It is on this that we have made a firm proposal in the Green and White Papers. However, the other issue, the definition of earnings, should not be confused with this kind of automatic disregard. Thus it is possible to define the resources to be taken into account in such a way as to exclude expenses such as volunteers or two-thirds of the income from child-minding. We should not confuse these two matters.
Nevertheless, I think discussion of this topic in the past has created some confusion, and I shall describe the two sides to the problem to clear this up. Your Lordships may know that at present lone parents have a complicated earnings disregard whereby they are allowed to keep £4 of earnings plus one-half of earnings between £4 and £20 before their benefit is affected. Thus, if she earns £ 12 she can keep £8 a week before the benefit begins to reduce. In deciding what level of earnings to which that complicated taper can be applied regard is taken of child-minding expenses. They are taken off the earnings.

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The Government have proposed two things in relation to this disregard: first, there should be a flat-rate disregard of £15 (which is higher than the former maximum at present); and, secondly, individual assessment of expenses like child-minding costs should no longer take place. This second is the subject of an amendment tabled by Lady Ewart-Biggs, so I shall say no more on the merits of it. But I shall ask your Lordships to note that the Government's proposal relates only to the child-minding expenses of a person going out to work. I fear some people have felt that our proposal relates to the treatment of income from child-minding of someone who does so as a part-time occupation. This is not the case. Certainly at present when assessing the income of someone in this position, two-thirds of it is ignored. This is provided for in Regulation 10(2)(c) of the Supplementary Benefit (Resources) Regulations.
There is nothing in the current Supplementary Benefit Act which covers this detailed point. The main legislation provides the power for certain resources to be disregarded. Your Lordships will see that we have similar power in Clause 22(7)(b) to disregard capital or income, so when drawing up the regulations for the treatment of capital under income support we shall be able to carry forward the same treatment—should we want to.
I do not want to pre-empt decisions at this stage. We Ministers will have to look at the details of the regulations under the new scheme, to see what extent provisions in the current supplementary benefit scheme should be in the income support scheme when it is introduced nearly two years hence. I am sure that when doing so we shall be helped by the views that have been expressed in this House and in another place on a whole host of issues, including the subject of this amendment.
I have now to confess that the most terrible thing has happened to me. My replies to amendments have been put in the wrong way round. I have been speaking to Amendment No. 41 with immense conviction, and I am very sorry but the numbering has gone wrong. What would your Lordships like me to do? I am totally in your hands. I can either start all over again—
9 p.m.
Baroness Faithfull: My Lords, I am very grateful to my noble friend. I was beginning to think that I had the lowest possible IQ in your Lordships' House, before she said that the numbers had gone wrong. This is a very complicated situation and it is very hard on the Minister that she should have to go through it all over again. I wonder whether she could bear it in mind for the next stage of the Bill and whether it could be clarified for us then. I still cannot understand whether, under her statement, the child minder will have a disregard of one-third of the payments received in respect of child minding. It will be extremely difficult for my noble friend the Minister and, if your Lordships agree, may I ask her whether she will clarify the whole situation for us by writing to us and then raising the matter at the next stage of the Bill?
Baroness Trumpington: My Lords, with the leave of the House, may I say that I could not be more
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embarrassed and I could not be more grateful for the kindly spirit in which my noble friend has taken this great shock to my nervous system. Probably the best thing to do would be for me to undertake to speak at Third Reading of the Bill on these two matters, by which time I hope that the numbering system will have sorted itself out. This has no bearing at all on the amendment of the noble Baroness, Lady Ewart-Biggs, which is quite a different matter. But if your Lordships are willing for me to do it in that way, I shall be very grateful. I do not believe that, basically, we are at odds over this matter. It is simply a question of clearing up the confusion that exists in the minds of everybody, to which I have unwittingly added.
Baroness Jeger: My Lords, I should like to say on behalf of my noble friends that we appreciate the situation and look forward to the Third Reading when the Minister will speak further.
Baroness Faithfull: My Lords, with the assurance of my noble friend the Minister, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 41 not moved.]
Baroness Ewart-Biggs Baroness Ewart-Biggs moved Amendment No. 42:
>Page 30, line 4, at end insert ("; save that for the purpose of calculating income support there shall be deducted from earnings derived from any employment expenses incurred in respect of child care.")
The noble Baroness said: My Lords, I hardly dare to move my amendment on account of the deep shock of the last few minutes. However, the Minister said that my Amendment No. 42 is quite separate from anything she has been saying, and therefore I shall move it. This amendment seeks to allow child care costs for parents, mainly single parents in receipt of income support, to be regarded as a work-related expense and therefore to be disregarded in the calculation of benefit, as is the case under the supplementary benefit scheme. At present, parents are able to set their work expenses, such as child care costs or fares to work, against their earnings before entitlement to supplementary benefit is calculated. This is in addition to a maximum earnings disregard for a single parent of £12.
As the National Council for One Parent Families has pointed out:
"This enhanced disregard, together with deductions for work expenses, was introduced in recognition of the special needs of one-parent families to enable lone parents to take advantage of a valuable source of extra income through part-time work with provision for necessary child care costs, and to increase the labour market participation of lone parents who are dependent upon supplementary benefit".
During the Committee stage, the Minister put forward a rather misleading view because she cited research from the Social Policy Research Unit at York University to justify abolishing the disregard for child care costs. She said that the average fare to work for single parents in 1982 was £1.18 a week, and child care costs were 94p. But such averages do not really relate to the actual costs incurred by single parents paying for child care, the reason being that the figures quoted by the noble Baroness the Minister must have been based on the inclusion in the sample of many

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parents who do not pay anything for child care; for example, single parents whose relatives look after their children for nothing. Indeed Professor Jonathan Bradshaw at York confirmed this and agreed that it is misleading for the Government to use the figures in this way.
The figures showed that 77.6 per cent, of the mothers in paid work did not pay anything for child care, but these were included in the sample. They therefore distorted the reality of the actual costs, because if you add up all the costs and divide by the mothers, a whole lot of whom do not pay anything, you get a very much lower cost than the real cost of child minding. In this sample in 1982, 14 per cent, spent over £3 on travel and 5.6 per cent. spent over £5 on child care; and today the figures would be much higher, especially in London.
A further important point is set out in the paper on earnings disregard from York University. It welcomes a flat rate disregard for single parents but also says:
"It should be noted that as the proposal stands this will mean a loss in income for some lone parents because work related expenses are positively associated with earnings. Those who lose tend to be those with the highest earnings which means that this change will penalise the people who are making the greatest effort to keep in contact with the labour market".
Perhaps I may quote another paragraph:
"One way round this would be to increase the level of disregard to compensate for the removal of work related expenses. Indeed we would argue that the proposed level of £15 is too low for this and for other more important reasons. The Green Paper is very brief about the aims of the disregard saying only that they are intended to help them in seeking employment and helping themselves.
"As an incentive to take up employment or remain in jobs, not only is the level of disregard likely to be important but also how it relates to the number of hours worked".
According to the new earnings survey of 1984 the average gross hourly earnings of women in part-time manual jobs of £2·09 plus a disregard of £15 represents only about seven hours of paid work a week. Given any rise in earnings between 1984 and 1987 when the change is introduced this will still be further reduced. Indeed seven hours bears very little relation to the actual hours of paid work for female part-time employees.
For a lone mother on income support to take a typical part-time job of about 18 hours would therefore mean that there would be no financial gain from more than half the hours she worked. In this context the cash incentive of an additional £15, although it might be quite a substantial increase on her benefit income, may be seen as representing only a very low return from the hours worked. That really seems to give justification for our amendment. As I said in Committee it is important for lone mothers to go out and work. Not only does it help with a very low income but it is also therapeutic and helps the mother to avoid depression. Such factors are important for the child. Anything that can be done to encourage and help single mothers to go out to work should surely be encouraged. I beg to move.
Baroness Lockwood: My Lords, I should like briefly to support the amendment in the name of my noble friend Lady Ewart-Biggs. She has outlined the difficulties arising from the low pay of the majority of women workers and in particular the low pay of part-
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time women workers, who constitute more than 40 per cent. of women workers generally.
There is another aspect of the problem on which I should like to focus. I refer to the use of child minders as carers of children where the mother is at work. A few years ago the whole question of child minding was one of great concern in this country. Unfortunately, we do not have a good reputation for being generous in the provision of nurseries for small children. The majority of women have to rely largely on child minders if they want their children to be cared for. It will be recalled that at that time a number of cases appeared to suggest that there could be a great deal of abuse in the child minding services.
Since then there have been tremendous steps forward in professionalising the child minding service. Obviously if you are going to professionalise a service, the cost of that service will increase accordingly. One of the fears is that if the expenses for child care were not to be allowed, as this amendment indicates, there might be a tendency for children to be withdrawn from the better kind of child care facilities and placed into less well provided child care facilities. That would be a very retrograde step. I would have made this point on the previous amendment had the noble Baroness, Lady Faithfull, been able to move it, but it is relevant both to the case that she would have been making on Amendment No. 41 and to Amendment No. 42 of my noble friend.
Lord Pitt of Hampstead: My Lords, before the Minister replies, I have had my attention drawn to a striking consequence of the Government's programme. It is an example of one piece of Government legislation defeating the aim of their employment programme. A particular project has been advertising part-time jobs under the community programme. There have been several applicants who are women with children. Child minding fees of £30 and £34 per week is the borough average, and with that they can embark upon the community programme while their children are looked after. However, without those expenses being offset, that will not be feasible and access to the community programme and to other part-time opportunities and avenues of employment will be denied to them. That is an example, but I am told it is quite typical. I thought that I should throw that point into the pond at this moment. I have just been given that information but it seems to me that it illustrates the situation.
9.15 p.m.
Baroness Trumpington: My Lords, I am still so unnerved by my recent experience that your Lordships must stop me if my reply does not sound right. This issue is one that has been discussed at length during the Bill's progress. Indeed, we debated this point in Committee three weeks ago, and I find myself in some difficulty because I do not want to test the patience of your Lordships by repeating the remarks I made then. However, as I said in my ill-starred last few moments on my feet, this amendment raises an entirely different matter from that raised by my noble friend Lady Faithfull in her amendment. It is specifically directed at the cost of child care as met by someone who goes out to work. It seeks to have those excluded from the

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amount of earnings that will be taken into account in determining the level of benefit.
I have already pointed out that the current treatment of those expenses in the supplementary benefit scheme is at odds with the approach of housing benefit and family credit: the benefit for those out of work is more complicated and generous than the benefit for those in low-paid full-time work. Our moves to put all three income-related benefits on a common footing have been widely welcomed. I do not believe it is sensible to perpetuate inconsistencies.
I mentioned during Committee stage that the available evidence suggests that the part-time work expenses, including child minding expenses, of those on supplementary benefit are relatively low. In the nature of things, most part-time work by those on supplementary benefit is likely to be undertaken locally.
The noble Baroness, Lady Ewart-Biggs, raised the question of SPRU research. We shall of course consider her point, but the point she accepted was that the majority of people did not have costs. That is unsurprising, because much such part-time work will be local and for short periods. There has to be a balance. The point remains that for most lone parents the new system will be simpler and better.
Our proposals on earnings disregards generally offered substantial improvements over the present arrangements. I am sure your Lordships will agree that direct incentives of that kind are preferable to the complications of the current system, which would be carried forward by this amendment. We propose to increase the general earnings disregard from £4 to £5. We are proposing also enhanced disregards of £15 for certain special groups, including lone parents, who are the people most likely to incur child minding expenses. The other groups are disabled people and long-term unemployed couples. We have said we shall monitor that aspect.
So, regretfully, I cannot recommend acceptance of this amendment. The Government's proposals represent increased help to a majority of lone parents without involving them or our local office staff in a complicated assessment. I hope that the noble Baroness, Lady Ewart-Biggs, will agree with my explanation.
Baroness Ewart-Biggs: My Lords, I agree that the explanation of the noble Baroness was related to my amendment but I cannot say that I am very happy about it. The noble Baroness said yet again that she felt that child minding expenses were relatively low, but I thought that I had made a very definite point to show that some parents who do not have relatives to look after their children when they are working have to pay a high price. As my noble friend said, what we worry about is that these lone parents will either retire from work or put their children into the hands of carers who cost very much less.
Therefore, I believe we have brought forward a very important point and there are many people who are extremely worried about it. There is no doubt that the number of single parents is increasing and the more we can involve them in the life of the community and avoid any kind of social isolation the better it will be,
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not only for them but particularly for their children.
I am of course very disappointed that I did not receive any further response from the Minister. However, it is a little late to do anything but heave a great sigh of sorrow and ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Banks Lord Banks moved Amendment No. 43:
Page 30, line 11, at end insert—
("( ) Where a person has a Purchased Life Annuity to which Section 230 of the Taxes Act 1970 applies—

(a) when assessing income the annuity received shall be treated for the purposes of this part of this Act as consisting partially of income and partially of capital and the proportion to be treated as capital shall be the proportion prescribed by Regulation and shall be disregarded as income when calculating income related benefits; and

(b) the capital of such person for the purposes of this part of this Act in respect of such Purchased Life Annuity shall be the original purchase price of that annuity less—

(i) the total amount of the capital sum calculated as prescribed by Regulation received by that person up to the relevant date for the assessment of the income related benefit and

(ii) where such person has obtained a loan to purchase such life annuity to which paragraph 24 of Schedule 1 of the Finance Act 1974 applies the amount of the loan outstanding at the relevant date for the assessment of income related benefit.").

The noble Lord said: My Lords, in assessing a person for income-related benefits, both income and capital are taken into account. A purchased life annuity is composed of both income and capital elements, and this amendment is concerned with the recognition of that fact and a proper division between the two.
The amount of annuity payment is determined by taking the purchase price of the annuity, which is capital, and adding an estimate of the interest to be earned on it between purchase and death. Since the date of death is not known the expectation of life of the individual is used. A deduction is made for expenses and the resulting total is divided by the number of years of the expectation of life to arrive at the annual annuity payment. There is clearly an interest and capital element in each payment.
For income tax purposes only the interest element is taxable. The consequence of this amendment would be that only the interest element would be assessed as income for earnings-related benefits. The capital value of the annuity would be determined by deducting from the original purchase price the sum of the capital elements paid since purchase. This would clearly be a declining figure year by year. The capital value in the early years would probably bring the annuitant over the cut-off point for capital. As time went on he would fall below it, assuming he had no other capital.
Where the annuitant had raised a loan to purchase the annuity—as in a home income plan effected by an elderly person—the amount of the loan would be offset against the capital value. Since it would always exceed the capital value, there would be no net capital value in those cases.
It is already the practice (and it is a welcome return to the former practice) to offset the mortgage interest in those cases against the annuity for assessing housing benefit. With the separation of capital and interest

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which I envisage, the mortgage interest would be offset against the interest element in the annuity in the determination of income. Thus, the amendment would be of value to elderly home owners, supplementing low incomes by means of a home income plan by eliminating capital value and reducing income for assessment.
However, as I have explained, the amendment covers all purchased life annuities and not merely those which form part of the home income plan. The aim generally is not to secure special favours for annuitants but rather to put purchased life annuitants on as near as possible an equal basis—a level playing field, as it is described—with other forms of saving such as building society and bank deposits. I beg to move.
Baroness Turner of Camden: My Lords, I rise to support the amendment moved by the noble Lord, Lord Banks, and to highlight one particular aspect of what he had to say in his very technical but very interesting speech when moving it. This amendment affords an opportunity to highlight the small but significant anomaly that affects elderly homeowners who have a home income plan to which the noble Lord, Lord Banks, has referred. I understand that about 15,000 of them exist. In conjunction with a building society or assurance company such elderly people have mortgaged their homes and used the proceeds to buy life annuities to supplement their incomes. Through taking this action and seeking to use their own resources to provide for themselves some extra income, they have been put at a disadvantage with regard to income-related benefits.
As noble Lords have said earlier in the debates on other aspects of this Bill, there has been a drive on the part of the Government to encourage people to become homeowners. The increase in home ownership has meant that more elderly people are living in their own homes and facing the bills that go with that situation, and with reduced Government expenditure there is often less help for house maintenance. What such elderly people have been doing, as has been indicated, is to undertake home income plans. If the amendment were passed, it would mean that in future the anomaly to which the noble Lord has referred would no longer exist and the elderly people who have embarked upon such home income plans would not be put at a disadvantage. Because it seems to us to be fair and reasonable, and because after all it is a relatively small anomaly to which the noble Lord has referred we hope that the amendment commends itself to your Lordships.
Baroness Vickers: My Lords, I also should like to support the amendment of the noble Lord, Lord Banks. He may remember that some time ago there was a similar amendment in front of us which was unsuccessful. I hope that this one will be successful. The noble Baroness has entirely covered the issues raised by Age Concern that I wished to express, but I also have some other points to add.
The link between these measures is that, for housing benefit purposes, the entire income from the annuity counts as income. It therefore will take the claimant off the scale, although in practice much of that income
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is immediately "spent" as a repayment. The net income would be a fairer measure. The difficulty occurs since income arising from certain fixed term annuities and bank and building societies deposits is treated consistently both for tax and housing benefit purposes and only interest is assessed. Part of the fixed term annuity is regarded as a return of capital. Moreover, for tax purposes, since 1955 whole life annuities are similarly treated, with part of the income regarded as a return of capital. However, this has not been applied to housing benefit. Indeed, the June 1985 guidance manual specifically requires income from whole life annuities to be considered in full.
In May, the Government announced that in future a change in the guidance manual will advise that mortgage interest deductions should be disregarded. However, life annuity plan holders are still at a disadvantage. I suggest that the amendment is therefore very helpful. It affects only a very small number of people—as the noble Baroness has said, about 15,000 altogether.
The amendment has been well thought out, if I may say so, by the noble Lord, Lord Banks. It may affect only a very small group of people but it may be a very important source of income to elderly homeowners in the future.
Lord Kilmarnock: My Lords, I wanted to say that just because my name does not appear in this amendment, as it does in most others in tandem with that of the noble Lord, Lord Banks, that is not to say that I do not support it. It is purely an oversight that my name is not there.
I simply add my voice to those of other noble Lords who have spoken to say that those home income plans are an extremely important way of enabling elderly people with a little capital to stay in their own homes by mortgaging their homes in order to purchase an annuity. I should have thought that that procedure was absolutely straight in line with the Government's policy of helping people to stay in their own homes. So I very much hope that the Government will look favourably upon this amendment.
Baroness Trumpington: My Lords, this is not the first occasion that the noble Lord and I have discussed this subject in your Lordships' Chamber. He originally raised it through an Unstarred Question last November, with particular reference to housing benefit. Since then we have, as he knows, partly as a result of the arguments he advanced then, been able to offer an improvement in the way in which one form of life annuity—the home income plan—is treated in the housing benefit assessment. The noble Lord was kind enough obliquely to mention that this evening. The noble Baroness, Lady Turner, may not have been aware of it when she made her comments. As a result of that improvement, some 7,500 elderly owner-occupiers will be better off from the 28th of this month.
This leaves the wider question of how life annuities in general should be treated in future. When I spoke in the short debate last November I told the noble Lord that I was not persuaded by his arguments. I shall now eat humble pie—I am doing a lot of that this evening—and modify what I said. I am prepared to

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keep an open mind on the issue. I fully accept that many of the noble Lord's arguments carry weight. Equally, though, he must remember that from 1988 a capital cut-off will be in operation for all three income-related benefits, with a tariff income applied to those with capital of between £3,000 and £6,000.
This means two things. First, treating life annuities as consisting partly of capital could be extremely complicated to administer. This is not simply a bureaucratic point. If it is complicated to administer, staff may get it wrong and elderly claimants may not understand it. Secondly, it would by no means be to the advantage of all those with a life annuity to treat them in this way. There would no doubt be swings and roundabouts. But, for example, someone who already had a small amount of savings in the building society could be knocked off income-related benefits completely by this method of assessment. I think this in particular merits further thought, and indeed the noble Lord might like to consider whether it is right to penalise some people with life annuities simply in order to achieve what he believes is theoretically the correct way to treat them in the assessment.
I would therefore like to invite the noble Lord to consider withdrawing his amendment on the basis of three assurances. First, as he is no doubt aware, his amendment is not necessary in order to achieve his purpose. There is already sufficient power in this clause to make the regulations which would be needed. Secondly, we shall not lose sight of this issue and will continue to consider all the possible options before we finally draw up the regulations. The Association of British Insurers has already initiated discussions with the department. Those discussions will continue, and I hope that the noble Lord will agree that it would be wrong to pre-empt them before the implications of all the options have been fully explored. And, thirdly, as I said at the outset, we shall keep an open mind on this issue. I am not ruling out the solution that the noble Lord has proposed, and we shall bear in mind everything that he has said in reaching a final decision, but I do not want to rush headlong into it. I hope that, with those assurances, the noble Lord will feel able to withdraw his amendment.
Lord Banks: My Lords, the noble Baroness referred, as I did, to the offset of mortgage interest in the case of home income plans. I certainly welcome that. Under a home income plan somebody may raise a mortgage on his house in order to purchase an annuity. Out of that he pays the interest on the mortgage and the balance is the additional income which helps him to meet his expenses. He never actually receives the mortgage interest. It never comes into his hands, because it is retained by the life office which is providing the plan. It seemed reasonable for the Government to offset the mortgage interest, and I am glad that they have done that.
As the noble Baroness recognised, in the amendment I was dealing with purchased life annuities as a whole, not just those which are bought in connection with a home income plan. While what I proposed would help, as I and others have shown, those who have home income plans, I was not seeking advantage for any particular section. I fully
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understand the point that the noble Baroness made when she said that there would be swings and roundabouts. I was trying to find a basis for treating purchased life annuities by separating capital and income so that we could deal with them in the way in which capital and income are proposed to be dealt with in the Bill.
I am aware that the Association of British Insurers has submitted suggestions, and the amendment is based on one of the bases which it put forward, and there are others. I am grateful to the noble Baroness for the sympathetic way in which she received the amendment; for the fact that she said that she would keep an open mind, and because she obviously contemplates something being done eventually under regulations to meet the points which are raised in the amendment. That being so, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 [Payment and recovery of family credit]:
Baroness Trumpington Baroness Trumpington moved Amendment No 44:
Leave out Clause 28.
The noble Baroness said: My Lords, I have already spoken to this amendment. I beg to move.
Baroness Hooper: My Lords, I beg to move that further consideration on Report be now adjourned.
House adjourned at twenty-four minutes before ten o'clock.

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