Sitting of 21 July 1986

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  PONTYPRIDD MARKETS FAIRS AND TOWN HALL BILL
  Considered; to be read the Third time.
Oral Answers to Questions
  WALES

    General Certificate of Secondary Education
    Mr. Rowlandsasked the Secretary of State for Wales what additional resources are being made available to local education authorities specifically to reduce the size of classes taking the new general certificate of secondary education syllabus.
    The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): It is for local education authorities to manage the resources available for education. Funding secondary schools for the GCSE is clearly a high priority, and I am pleased to see that some authorities have already made additional resources available for this purpose. So indeed has the Welsh Office, which has made available over £3 million for purposes specifically related to the introduction of the GCSE.
    Mr. Rowlands: Is the Minister aware that no teachers or headmasters, and only a very few parents, believe that we can introduce this syllabus, with classes of 30-plus for mainstream subjects, although that is what the majority of our children will face when the new system is introduced? Will he therefore look again at the pupil-teacher ratios for the introduction of the scheme, because they are vital to the success of the introduction of a new syllabus and examination system?
    Mr. Roberts: I wholly disagree with the hon. Gentleman. I believe that teachers are showing the will and commitment that is needed to introduce the new examination. As for the pupil-teacher ratio, in the hon. Gentleman's own county, Mid Glamorgan, the pupil-teacher ratio is 16·7.
    Mr. Gwilym Jones: My hon. Friend will be aware of the parental concern, even cynicism. Is he satisfied that local councils will deploy these additional resources at the chalk face?
    Mr. Roberts: I have already said that two local authorities have announced their plans, and I have exhorted local authorities to do so. There has been some concern about books and materials. The Government are making available this year £5,000, on average, per secondary school in Wales. A similar sum will be available over the next two years. That is in addition to the capitation allowances that are to be provided by the local authorities.
    Mr. Rogers: Is the Minister aware that the extra £5,000 that is to be given to each secondary school is quite pathetic? The general certificate of secondary education is a new philosophy which will depend upon project work, more laboratory work and continual assessment. The resources that are being given to it are quite inadequate. When will the Government properly fund this particular examination?
    Mr. Roberts: We are funding it properly. I have already announced what extra finance is available from the Welsh Office specifically for this examination. I remind the House that in Wales about £659·5 million is available to local authorities for education in the current year.
    Mr. Raffan: Will my right hon. Friend seriously consider allocating further resources over the next three years to ensure that teachers can develop the new range of skills that are required to supervise and evaluate GCSE course work, bearing in mind that to release a teacher for one day costs a local education authority at least £50?
    Mr. Roberts: In the amount that I have announced as being available from the Welsh Office, there is a grant scheme for in-service training, teacher training seminars and syllabus-specific training. We have sought to meet practically every reasonable requirement for additional finance for this examination.
    Mr. Barry Jones: Would not the biggest boost for this important examination be more teachers? Is not the crucial mechanism for the funding of the school system the rate support grant? We demand a generous rate support grant settlement. Would not a means of helping education authorities in Wales be a switch of cash from private schools to the budgets of the local education authorities? Would that not give the new examination a better start, because the Minister is throwing more cash at the private schools than he is giving extra case to the new examination?
    Mr. Roberts: I do not agree with the hon. Gentleman's last remark. The amount given to private schools is over £1 million, but I have just added it up, and the total that we have given to the new examinaton is £3 million. That is additional to the support given through the rate support grant, which, under this Government, has increased from £601·8 million in 1979–80 to £628·5 million in 1984–85, at a time of falling pupil numbers. Therefore, expenditure per pupil has increased over that period by £100 in real terms.

    Welsh Water Authority
    Mr. Wigleyasked the Secretary of State for Wales when he last met the chairman of the Welsh water authority to discuss the authority's budget.
    Mr. Ray Powellasked the Secretary of State for Wales when he intends to meet the chairman of the Welsh Water Authority to discuss with him the decision by the Government not to proceed with the plans to privatise the water industry in the next Session of Parliament.
    The Parliamentary-Under Secretary of State for Wales (Mr. Mark Robinson): My right hon. Friend and I meet the chairman of the Welsh water authority regularly to discuss a variety of issues. I last saw him on 15 July.
    Mr. Wigley: As the Welsh water authority recently announced a record £12·3 million profit, is it not scandalous that water rates in Wales should be increased next year by 9 per cent., an average of £10 per household, at a time when the Government are increasing pensions by only 1 per cent.? Does that not put an unacceptable burden on the lowly paid in Wales?
    Mr. Robinson: No final decisions have yet been taken on the charges that are likely to be levied by the Welsh water authority in the coming year. The £12·3 million profit has been used to finance an increase in the capital programme from £41 million in 1984–85 to £54 million in 1985–86.
    Mr. Powell: We have no objection to the coupling of questions, but one expects the Minister to reply to the
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    second question. My question relates to the discussions with the chairman of the Welsh water authority about the Government's decision. On 9 June, only six weeks ago, the Minister was arguing for the privatisation of the water industry. Now the Government have changed their mind. It is no good the Minister shaking his head. If he reads Hansard for 9 June he will see what he said about privatisation. As the Government have changed their mind, one would have expected a Welsh Office Minister to make a statement to the House so that Labour Members in particular Welsh Members, could advocate what they wanted with regard to the water authorities, not what the Minister wants. In future, if the Minister is minded to couple my question with another, will he ensure that he answers it properly?
    Mr. Robinson: In my reply I said that I met
    "the chairman of the Welsh water authority regularly to discuss a variety of issues."
    These include the current status of water privatisation. As the hon. Members knows, having been in the Chamber for the statement made by my right hon. Friend the Secretary of State for the Environment, the Government have no plans to change their policy towards water privatisation. They have simply announced that we shall not be introducing legislation in the coming Session.
    Mr. Raffan: I welcome the extra £30 million of capital expenditure by the Welsh water authority in 1984–85, but will my hon. Friend join me in welcoming the chairman's foreword to his annual report, which says that it sets the authority on the road to even higher levels of capital spending over the next three years?
    Mr. Robinson: My hon. Friend is right to point that out. The chairman is very keen that capital investment by the Welsh water authority in the water industry should continue to go on apace. The chairman's report sums up the position well.
    Mr. Alex Carlile: When the Minister last met the chairman to talk about the water authority's budget, did he discuss providing extra money to enable the Welsh water authority to monitor the caesium levels in sheep within its area? If not, will he give an assurance that Welsh Members will be given all the information necessary to enable them to judge the caesium levels in sheep in Wales? Furthermore, will he ensure that that includes all the statistical data in the Welsh Office's possession?
    Mr. Robinson: That was not on the agenda at my meeting with the chairman of the Welsh water authority, but I assure the hon. and learned Gentleman that we are publishing all the relevant information that is available on that topic.
    Mr. Mark Hughes: I rise with great deference to intervene in Welsh Question Time, but why do the latest figures for England include the caesium level for brown trout, rainbow trout—
    Mr. Speaker: Order. The hon. Gentleman is going very wide of the question.
    Mr. Hughes: I accept that, Mr. Speaker, but—
    Mr. Speaker: The trouble is, I cannot accept it.
    Mr. Hughes: Why did the Minister not discuss the absence of any figures from the Welsh Office on the caesium levels in fish? It got figures on cabbage, rhubarb and gooseberries. Why not on fish?
    Mr. Robinson: We are publishing all the statistics available to us.
    Mr. Gwilym Jones: It may be premature to question my hon. Friend about the greater flexibility of capital raising after privatisation, but in the meanwhile can he confirm that he will issue firm advice to the Welsh water authority on the importance of ensuring that future rate increases are not significantly higher than the prevailing rate of inflation?
    Mr. Robinson: I know that the water authority will do everything in its power to keep down rate increases to the lowest level possible.
    Mr. Gareth Wardell: The Minister will be aware that more than 30,000 houses in Wales are served by unadopted sewers. Will he say when the Government will introduce measures to correct that, in line with their consultation paper, "Water and Sewerage Law"?
    Mr. Robinson: As the hon. Gentleman has said, we have issued a consultation paper and we are now studying the responses that we have received.
    Mr. Barry Jones: Is it not true that a privatised authority would not be a viable enterprise? Would not a commercialised water industry be disastrous for the country? Do not the Government's plans excite the hostility of tens of thousands of anglers in the Principality? There is no mandate in Wales for the privatisation of the water industry, and the party that proposes privatisation will be electorally wiped out.
    Mr. Robinson: It is very likely that we shall be seeking a mandate for the privatisation of the water authorities. We certainly believe that the authorities have a great future as a privatised industry, as they will then be able to raise much-needed funding on the capital markets. There is every possibility that the Welsh water authority will be able to expand any recreational activities after privatisation.

    Labour Statistics
    Mr. Roy Hughesasked the Secretary of State for Wales what are the latest unadjusted figures for unemployment in (a) Newport, (b) Gwent and (c) Wales; what were the equivalent figures in May 1979; and what has been the percentage increase in each case.
    The Secretary of State for Wales (Mr. Nicholas Edwards): On 12 June 1986 the total numbers of unemployed claimants in the Newport travel-to-work area, Gwent and Wales, were 12,775, 29,229 and 173,708, respectively. Unadjusted figures for 1979 are not available on a comparable basis.
    Mr. Hughes: Has the Secretary of State recently looked at the population statistics for Newport? They show that the population is apparently declining in numbers. Moreover, there is evidence that it is the young who are leaving. Is that any wonder when, for a week or so, the local press has been full of reports of our young people frequenting amusement arcades, with all the debauchery that is associated with them? Does the right hon. Gentleman appreciate that last Saturday I received a deputation of ladies, who presented me with a petition containing horrific details about glue sniffing in one area
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    of the town? After more than seven years in office, is it not time that the Government started to think about providing some real jobs for young people?
    Mr. Edwards: I am glad to say that Gwent is one of the areas that has proved to be successful in attracting a wide range of new industries. The kind of approach adopted by the hon. Gentleman to these matters will hardly encourage investment of the kind that we all want.
    Mr. Gwilym Jones: Does my right hon. Friend agree that the continued creation of new jobs is important, not the old dreary ritual of despair that we keep getting from the Opposition? Is not one of the best pointers the latest survey from the Cardiff chamber of commerce, published in this morning's Western Mail? That survey, carried out among its members throughout south Wales, shows that approximately two thirds expect to increase their business in the coming year. Does my right hon. Friend also agree that we ought not to ignore the fact that over 20 per cent. of them report difficulties in recruiting suitable labour, especially skilled tradesmen?
    Mr. Edwards: I am sure that my hon. Friend is quite right. There are other favourable indications, such as a very high level of factory allocations by Government agencies this year. Inquiries to the small business unit are at an all-time record high and there is continued success in attracting a high proportion of the United Kingdom's total inward investment.
    Mr. Anderson: Does the Secretary of State tell the House that the welcome reduction in inflation is wholly due to the success of the Government's policy and that the alarming increase in unemployment is wholly due to external factors?
    Mr. Edwards: I make no claims of the kind just put into my mouth. We are attracting a high level of investment in new jobs in Wales, and there are some signs that unemployment is stabilising and marginally improving relative to the situation elsewhere in the United Kingdom. That suggests that at least the long decline of the basic industries from which we have suffered for so long is coming to an end and that the Welsh economy is more arid more dependent on the large number of new companies that we attracted in recent years and on the large number of new small businesses that are starting up.

    Kidney Patients
    Mr. Favellasked the Secretary of State for Wales how many new kidney patients per million head of population received dialysis treatment in 1979 and in the latest year for which figures are available.
    Mr. Mark Robinson: In 1985 approximately 56 new patients per million population received dialysis treatment in Wales, compared with 19 new patients per million population in 1979.
    Mr. Favell: I trust that Welsh Members will forgive me for venturing into health questions, but it is a subject in which I am interested. Can my hon. Friend tell me whether the wonderful improvement in kidney dialysis provision in Wales is due to a partnership between the private health sector and the National Health Service? Elsewhere in the United Kingdom, could not scarce resources as well as lives be saved by following the excellent example of Wales?
    Mr. Robinson: I welcome my hon. Friend's question. This has been an outstandingly successful experiment in Carmarthen and in Bangor. In order to see what has been achieved in terms of co-operation between the public and private sectors in health care provision, I have written to my colleagues in the Scottish Office, the Northern Ireland Office and in England to inform them of what has been done and to urge them to look at it if they are so minded.
    Mr. Coleman: I welcome the increase in the number of dialysis treatments in Wales, but can the Minister guarantee that this will continue, especially in the light of the Western Mail report this morning, which talks of shortages of doctors in Welsh hospitals? It says that authorities have to pay as much as £1,000 a week for locums and that young junior doctors have to work 104 hours a week. What will he do about that to ensure that the Health Service in Wales can continue successfully?
    Mr. Robinson: Not only can I guarantee to the hon. Gentleman that the service will be maintained, but I can tell him that at the moment we are working on plans to extend the service.

    A55-A548 Delyn (Link Road)
    Mr. Raffanasked the Secretary of State for Wales if he has any plans to construct a link road between the A55 and the A548 in Delyn; and if he will make a statement.
    Mr. Wyn Roberts: I have no plans to do so.
    Mr. Raffan: As Delyn borough council regards this as the most urgent priority road scheme in the borough, and as industrial growth will be hampered until the link is created, will my hon. Friend consider giving financial help to Clwyd county council to enable it to carry out its promised evaluation study of the proposed link road as soon as possible?
    Mr. Roberts: As my hon. Friend will realise, the link road which he proposes, which is supported by Delyn borough council, is a matter for Clwyd county council. If and when the county council produces proposals, they will be considered in the usual way for support by means of the transport supplementary grant. I understand that Clwyd is prepared to carry out an evaluation study in due course, but that it gives higher priority to the second Dee crossing.
    Mr. Roy Hughes: Apart from the A55, will there be a statement on Thursday about the building of a second Severn crossing? Have the Government rejected the report of the Select Committee on Transport on estuarial crossings, which calls for their abolition—
    Mr. Speaker: Order. I am reluctant to interrupt a Front-Bench spokesman, but does this relate to the A55?
    Mr. Hughes: It relates to the Government's road programme.
    Mr. Speaker: The question relates to a link road between the A55 and the A548.
    Mr. Hughes: Is it not time that the Government employed some plumbers to stop the perpetual leaks? At least they should start to show a little respect for the House of Commons.
    Mr. Roberts: Whatever may be said about a second Severn crossing, it will not go over the A55 or the A548.
    Mr. Alex Carlile: Does the Minister agree that the A55, with or without the link road, is only one part of the roads necessary for a reasonable east-west crossing in Wales? Will he give immediate consideration to giving greater priority to the mid-Wales east-west crossing?
    Mr. Roberts: The hon. and learned Gentleman will have read "Roads in Wales 1985" and "Roads in Wales —the 1990s and Beyond." We are consulting on those proposals, which refer in part to mid-Wales.

    European Regional Development Fund
    Mr. Knoxasked the Secretary of State for Wales what is the total value of grants which Wales has received from the European regional development fund in each of the past three years.
    Mr. Nicholas Edwards: Net commitments in 1983, 1984 and 1985 amounted to £45·1 million, £63 million, and £54·9 million, respectively. Allocations to Wales in 1986 to date total £12·6 million, with applications for a further £37·2 million of aid under consideration in Brussels.
    Mr. Knox: Does my right hon. Friend believe that the size of the grants has been sufficiently well publicised? If not, what steps is he taking to ensure that the public are made aware of the extent of the assistance that Wales receives from the fund?
    Mr. Edwards: The assistance has made a valuable contribution to the provision of infrastructure. The most recent example was the announcement by the Commission of financial support for the splendid new innovation centre on the campus of Swansea university, which was opened by the Prince of Wales a fortnight ago. Every opportunity is taken to publicise such support through press notices and by other means. When I was at the university last week the principal expressed his gratitude for the support and said how important it was.
    Mr. Wigley: As one of the most important European grants for Gwynnedd — that to the lamb and sheep farmers—is being lost because of the radioactivity ban, thus causing an immense cash flow crisis for the farmers, when will the Secretary of State make a clear and detailed statement on compensation for those farmers? When will he come out of his bunker and come to Gwynnedd—he has not yet been there, although the crisis has continued for a month—and meet those farmers, who are facing a desperate time?
    Mr. Edwards: I understand the importance of the questions being asked, which is why we are taking urgent steps to ensure that the areas are reduced as quickly as possible. But this does not arise under a question about the ERDF.

    Transport Act 1985
    Dr. Marekasked the Secretary of State for Wales what is the latest assessment of the effect upon transport services in Wales of the operation of the Transport Act 1985.
    Mr. Wyn Roberts: The evidence available so far suggests that the new arrangements will help to check the decline in the bus industry and encourage the provision of public transport services better suited to the needs of passengers.
    Dr. Marek: Does the Minister appreciate that there is great anxiety about the problem in Wales and that there is great apprehension that evening stage carriage services and the problems of bussing children to and from school will become much worse as a result of the Transport Act? If he does not agree that that will happen, what guarantees can he give on those two points?
    Mr. Roberts: The hon. Gentleman is being unduly alarmist. He must consider the whole picture, not just of registered commercial services, but of the subsidised services as well. He will know that no county in Wales has yet evaluated the tenders for subsidised services, but they all seem confident that they will be able to buy additional services through the subsidy tender system, and that includes Clwyd. I understand that Clwyd proposed to award contracts on the basis of competitive tenders, including those for school transport.

    Housing (Multiple Occupation)
    Mr. Andersonasked the Secretary of State for Wales what guidance he will give to local authorities to protect the safety of those in houses of multiple occupation.
    Mr. Mark Robinson: My right hon. Friend has recently issued detailed guidance to local authorities on 22 May about their powers to control houses in multiple occupation and protect the safety of the people who live in them.
    Mr. Anderson: The Minister must be aware from representations from the Institution of Environmental Health Officers and those working in the field of their continued concern about the real dangers to the health and safety of that vulnerable section of our population who live in houses in mulitiple occupation. Will he at least undertake to look sympathetically at the Bill that has been introduced by Baroness Vickers in the other place, which would impose duties on local authorities to enforce certain standards for health and safety and would provide regular inspections by local authorities of houses in multiple occupation?
    Mr. Robinson: We are aware of the Bill to which the hon. Gentleman referred. Indeed, many of its provisions contain sympathetic and sensible ideas. However, our current legislation is adequate. Indeed, we have introduced some new legislation fairly recently and we want to see how that works before taking the matter further.

    Welsh Water Authority
    Mr. Ron Daviesasked the Secretary of State for Wales what current steps are being taken by his Department to prepare the Welsh water authority for privatisation.
    Mr. Mark Robinson: As my right hon. Friend the Secretary of State for the Environment said in his statement to the House on 3 July, the Government intend to proceed with water privatisation as soon as practicable. Preparatory work to that end is continuing.
    Mr. Davies: I take it from that answer that the Minister is confirming that staff in the Welsh Office are now carrying out preparatory work. Will he confirm that staff of the Welsh water authority are being directed to carry out preparatory work? Is not that expenditure of public
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    money and use of public servants' time fundamentally dishonest when neither the Welsh Office nor the Government have any mandate for their privatisation proposals? Will the Minister now take steps to direct staff in his Department to cease forthwith action on privatisation and direct the Welsh water authority to do the same? Will he confirm that the Government's privatisation proposals will form a centrepiece in the Government's manifesto at the next election?
    Mr. Robinson: It is very likely that our privatisation proposals will form a central part of our manifesto. The hon. Gentleman has great first-hand experience of water as a result of his valiant attempt to push the Welsh Eight off the rocks during the regatta last week.
    However, the answers to his other questions are no, Sir.
    Mr. Roy Hughes: Can the Minister tell the House something about the debt of the Welsh water authority? Are we to understand that if the industry is privatised the debt will be wiped out, but if it stays in public ownership the debt will remain?
    Mr. Robinson: There will be a major restructuring to take account of privatisation, but until that time comes we have no plans to change the capital structure of the water authority.

    School Visits
    Mr. Barry Jonesasked the Secretary of State for Wales which schools in Wales he has visited from November 1985 to June 1986.
    Mr. Wyn Roberts: My right hon. Friend has visited Pembroke comprehensive school; I have visited Cardiff high school, while my hon. Friend the Member for Newport, West (Mr. Robinson), visited Malpas Church in Wales junior school in Newport.
    Mr. Jones: Will the Secretary of State show more commitment to the local education authority schools in Wales? Is the Under-Secretary aware that the Social Security Bill may well eliminate some 27,000 free school meals in Wales, yet the community health experts and nutritionists are already worried about the low nutrition levels of many Welsh families? Is the hon. Gentleman aware that many Welsh children depend for their nutrition upon free school meals? Bearing in mind nutritionists' worries, what will the Government do? Surely the Bill is wrong and will hit Welsh schoolchildren from the poorest families.
    Mr. Roberts: The hon. Gentleman might be right in saying that a certain number of children will lose free school meals under the Social Security Bill, but an even greater number will benefit from the alternative scheme. We are totally committed to the maintained sector.
    Mr. Grist: Is my hon. Friend aware that he will be a most welcome visitor to the Howardian high school in my constituency? That school is under threat of closure by the south Glamorgan authority, although it is one of the most successful in the county.
    Mr. Roberts: I am grateful to my hon. Friend. I know of his close connection with the Howardian high school. He will understand that there is scope for the rationalisation of secondary school provision, particularly

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    because of the fall in pupil numbers. Local education authorities make proposals that are the subject of consultation. A closure proposal is referred ultimately to

    Hospital Waiting Lists
    Mrs. Clwydasked the Secretary of State for Wales what representations he has received on hospital waiting lists in the Cynon Valley and Wales.
    Mr. Mark Robinson: Representations on matters relating to waiting lists have been received from many parts of the Principality, including Cynon Valley. I indicated the extent of our response to the hon. Lady in replying to her question on 30 June.
    Mrs. Clwyd: Is the Minister aware that there are far fewer general surgeons in post than when the Government came to power in 1979, and that there are now fewer consultant surgeons per head of population in Britain than in any other Western country? Does that not nail the lie perpetuated by the Government that they have put more into the National Health Service? Does the Minister agree with the president of the Royal College of Surgeons, who said recently:
    "Wards are being closed, beds are being closed, surgeons are being told to reduce their operating sessions. Many of us, including myself, have been criticised for doing too much work. That is unbelievable. The prime reason is finance."
    Mr. Robinson: I am pleased to tell the hon. Lady that my right hon. Friend the Secretary of State opened no fewer than two new hospitals on Friday. Staff directly concerned with front-line patient care, including the categories to which the hon. Lady referred, have increased by 12·5 per cent. since 1979, nursing staff are up by 10 per cent., medical and dental staff are up by 13 per cent.—an overall increase of 18 per cent. I am astonished that the hon. Lady should refer to falling resources, because expenditure that we have made available to the Health Service since we came to power has increased by no less than 26 per cent. in real terms.

    Welsh Joint Education Committee
    Mr. Gwilym Jonesasked the Secretary of State for Wales if he has any plans to meet the Welsh Joint Education Committee.
    Mr. Wyn Roberts: I attended the annual meeting of the Welsh Joint Education Committee on 4 July 1986 and set out Government policy over a range of educational issues of current concern in Wales. I have placed a copy of my speech in the Library.
    Mr. Jones: Did my hon. Friend take the opportunity to raise the important TVEI programme with the WJEC?
    Mr. Roberts: I touched upon the subject and was delighted to tell the WJEC of my pride over the fact that every local education authority in Wales is involved in TVEI. We have announced an extension of the TVEI scheme and have published the White Paper "Working Together — Education and Training" which relates to TVEI.
    Mr. Wigley: At the meeting to which the Minister referred, Councillor Emyr Currie-Jones asked him why the suggested plan for the Welsh language, given to the Welsh Office by the Welsh Joint Education Committee in November, had received no response. Why has the Welsh Office been sitting on that plan for seven months?
    Mr. Roberts: The WJEC has certainly put forward proposals on that matter. However, they involve a somewhat complex machinery of committees and subcommittees and a complex programme of work. What the WJEC has not done is to meet the requirements spelt out by my right hon. Friend in his letter to it of 23 July last year.
    Mr. Barry Jones: The Minister is being unnecessarily laggardly about this matter. Was it not a major error of judgment to attack the WJEC while failing to indicate the financial resources available to it? There is a bitter taste in the mouths of people in Wales because of the Minister's mistake. Should he not apologise to the WJEC?
    Mr. Roberts: My intention was to spur on the WJEC, and I think that what I said achieved the desired effect. After all, it is a year since my right hon. Friend wrote to it, and I have openly regretted the fact that we have not been able to make more progress together in such a long time.
    I think that the spur that I gave to the WJEC has been successful and that we shall advance more quickly in the near future. One reason why we have not advanced as quickly as we might has been the stress that the WJEC has placed on resources, whereas I have been stressing the need for a proper framework for discussion.

  CHURCH COMMISSIONERS

    Church Halls
    Sir John Biggs-Davisonasked the hon. Member for Wokingham, as representing the Church Commissioners, what criteria the Commissioners use in the provision of funds for church halls.
    Sir William van Straubenzee (The Second Church Estates Commissioner, representing Church Commissioners): The Church Commissioners do not provide funds specifically for church halls. However, they do make grants to dioceses for the provision of church buildings in new housing areas, and that could include church halls.
    Sir John Biggs-Davison: Do the Church Commissioners share my concern at the number of unsightly annexes to churches? Do they think that the Church should remain free from planning control? Does my hon. Friend recall that in France and Italy clerical iconoclasts have been restrained by municipal authorities?
    Sir William van Straubenzee: If that were the position, it would be a matter for anxiety. However, I am happy to reassure my hon. Friend completely by telling him that all church buildings are subject to normal planning control. I think that he has in mind exemption from listing building control. If a particular case offends his susceptibilities—and he may be right, I do not know—he has to blame those who gave the planning consent, not the Church authorities.
    Mr. Favell: Does my hon. Friend agree that too many parish churches confine the use of their church halls to their congregations? Would it not be far better if parish churches were prepared to provide, for example, meals for the elderly and social activities for the elderly and for under-privileged children? After all, many committed Christians would be only too pleased to undertake such excellent work if their vicar were to give a lead.
    Sir William van Straubenzee: I am afraid that I must avoid taking any responsibility for the work of individual parishes. I mean no discourtesy to my hon. Friend, and if he has a specific case in mind I shall willingly pass it on to the diocesan bishop concerned.

    Buildings (Expenditure)
    Mr. Chapmanasked the hon. Member for Wokingham, as representing the Church Commissioners, if he will make a statement on the current level of Church Commissioners' expenditure on Church buildings.
    Sir Wiliam van Straubenzee: The Church Commissioners' expenditure on church buildings during the year ending 31 December 1985 totalled £3·3 million.
    Mr. Chapman: As the Church raises about £55 million —whether through the Church Commissioners or parish fund-raising—to conserve and preserve its architectural heritage, and as the Church has a 3:1 better record in preserving its heritage than owners of secular buildings, does my hon. Friend agree that that is a matter of commendation and that it would be foolish to seek to change the laws related to listed buildings consent by getting rid of the ecclesiastical exemption? We should leave things exactly as they are.
    Sir William van Straubenzee: I am obliged to my hon. Friend. As he knows, the matter is under the scrutiny of the Select Committee on the Environment. It will be interesting to see what the Committee contributes. In the meanwhile, I am able to confirm that congregations provide £55 million each year for the upkeep and maintenance of their buildings, compared to about £4 million received in the form of state aid.

    Parsonage Homes
    Mr. Peter Bruinvelsasked the hon. Member for Wokingham, as representing the Church Commissioners, how many clergy occupy parsonage homes maintained partly or wholly with funds provided by the Church Commissioners; if any scheme exists to assist clergy to purchase their homes; and if he will make a statement.
    Sir William van Straubenzee: There were 8,223 in 1985. The Church of England pensions board also operates a scheme to assist clergymen to purchase a home on retirement and the commissioners contribute financially to it.
    Mr. Bruinvels: I thank my hon. Friend for that answer. I recognise that the Church of England, through the commissioners, is generous in its provision of clergy housing. I understand that £8·8 million was provided in 1985, which was 7p in each pound. Does my hon. Friend agree that many clergy would like the flexibility of movement that would come from owning their own homes? Could not some help be given to them to allow them to buy their own homes, recognising that at present they have to live on the job and are contacted regularly at home day in and day out? They do a magnificent job, but they could do with some flexibility.
    Sir William van Straubenzee: This issue was last considered as recently as 1982, before my hon. Friend joined the General Synod. A paper was circulated at that time. It was clear that the ownership of houses by the serving clergy would have a serious effect on deployment,
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    and there was little desire among the clergy for such a change. The emphasis is put upon making it infinitely easier than it ever was before to purchase a house, or to be provided with retirement housing, once active service has come to an end.

  HOUSE OF COMMONS

    Ethnic Monitoring
    Mr. Jannerasked the hon. Member for Berwick upon Tweed, as representing the House of Commons Commission, what information he has as to the monitoring of the sex and ethnic origin of staff at the Palace of Westminster and applicants for employment at the Palace of Westminster.
    Mr. A. J. Beith (A House of Commons Commissioner): The House of Commons is an equal opportunity employer and, following arrangements agreed for the Civil Service, a programme for monitoring the ethnic origins of staff of the House is to be conducted in the near future. The details of this programme are subject to discussion between management and trade union representatives. There is currently no monitoring of the sex of staff of the House or of applicants for employment.
    Mr. Janner: Can the hon. Gentleman say why the House of Commons, of all places, has not yet complied with the codes of the Commission for Racial Equality and the Equal Opportunities Commission? Surely it should be for the House to set an example to others and not to drag behind in what is an important area of equal opportunities, in which it is not good enough merely to say that the House is an equal opportunities employer and then to continue to operate what appears to me from casual observation to be a sexist and racist organisation in which employees do not reach the top unless they are from the majority?
    Mr. Beith: The House of Commons Commission is making every effort to implement the code of practice. Indeed, it is statutorily bound to follow the Civil Service in doing so. The timetable by which it is carrying out the proposals is based upon adhering to that statutory obligation and consulting the trade union representatives within the House. I know of no basis for the hon. and learned Gentleman's wild charge that the House is either racist or sexist in the way in which it carries out its employment responsibilities.
    Mr. Stokes: Does the hon. Gentleman agree that for jobs in the Palace of Westminster the only criteria should be suitability for the post and loyalty to this country?
    Mr. Beith: Perhaps I should remind the hon. Gentleman that the Commission is responsible only for its employees and not for the entire staff in the Palace of Westminster. A number of separate organisations employ staff here. The features to which the hon. Gentleman has referred are, of course, part of our employment policy. We have a duty to ensure that there is no discrimination on the grounds of race or sex in employment within the House.
    Mrs. Shields: As there is a House of Commons barber, does the Commission have any plans for establishing a ladies' hairdresser?
    Mr. Beith: I am delighted that, from the Liberal Bench, we may have increased the demand for ladies' hairdressing

    15
    facilities within the House. However, I must tell my hon. Friend that the matter is one for the Services Committee. Were she to address her question to the Leader of the House, I am sure that he could give her an account of the lengthy discussions that have taken place on this subject.
    Mr. Harris: Does the hon. Gentleman agree that many hon. Members think that the question on the Order Paper appears thoroughly racist and sexist, and that we should have nothing to do with discrimination, one way or the other?
    Mr. Beith: The House of Commons Commission is carrying out its proper duties to ensure that there is no discrimination in employment. It is also seeking to ensure, by the monitoring process that has been agreed for the Civil Service generally, that it has full knowledge of whether people of particular ethnic groups and the two sexes have appropriate opportunities for promotion within the service of the House.

    Parliaments (Morning Sittings)
    Mr. Peter Bruinvelsasked the Lord Privy Seal what information he has as to which Parliaments in the EEC have morning sittings; and if he will make a statement.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I understand that the following EC countries have arrangements for morning parliamentary sittings, either on a regular or an occasional basis: Belgium, Denmark, France, Germany, Greece, Italy and Spain.
    Mr. Bruinvels: I thank my right hon. Friend for that reply. Recognising that I am not the greatest supporter of the European Assembly, may I suggest that our House should consider sitting, at least occasionally, in the morning, in addition to the regular Friday morning sittings. It costs far too much to run the House of Commons. We are sitting far too late into the night, although, happily, not as much as in the past.
    Mr. Biffen: My hon. Friend's observation overlooks the fact that many hon. Members recall the period when the House sat in the morning on an experimental basis. That experiment has never led to an informed demand for its renewal.
    Mr. Dalyell: Does the Leader of the House recollect that one of the problems with the late Dick Crossman's ill-starred attempts to bring in morning sittings lay with the Law Officers? Is there not a general problem with the accountability of the Law Officers? Should there not be an opportunity for the Attorney-General to explain why he gave immunity to Miss Colette Bowe, when on 30 January he told us that he was first informed of the involvement of the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) on 22 January?
    Mr. Speaker: Order. That is ingenious but wide of the original question.
    Mr. Biffen: I stayed here till the closing minutes on Friday to hear the hon. Gentleman. I now realise with what sadness I missed his contribution. I am glad to take note of it now. It would be quite inappropriate for me to follow the hon. Gentleman in that question, except to say that he seems to have had much more difficulty than the late Dick Crossman did with the Law Officers.
    Mr. Bill Walker: Does my right hon. Friend agree that one of the difficulties that the House would face with morning sittings is that Governments do not always have a large majority and that, if a Government's majority were much smaller, Government Members would be required to start all the House's Committees? In addition, Scottish Members would be required to start all the Scottish Committees and the Scottish Grand Committee. Therefore, most of the time, they would be excluded from attending the morning sittings.
    Mr. Biffen: My hon. Friend makes a fair point. When the Crossman experiment took place, it was recognised that because Ministers would often be doing work within the Ministry, no votes could take place during morning sittings. Therefore, they were all left over to the evening, when some quite esoteric subjects suddenly found that they had the most extraordinary turn-out because of their proximity to a three-line Whip. I refer to the future of the Oswestry market, which was under consideration. [Interruption.] That happens to be true, and it is for any historian to judge. Once the practices of this House are disturbed, we cannot suppose that automatically we have an improved position as a consequence.
    Mr. Williams: Does the Leader of the House not find it more than slightly surprising that the request for morning sittings has come from, of all people, the hon. Member for Leicester, East (Mr. Brunivels), who, after all, was eager to bounce to his feet claiming the discredit for having sank the morning sitting that my hon. Friend the Member for Linlithgow (Mr. Dalyell) should have had on a Friday?
    Mr. Biffen: I would find it surprising if the hon. Member for Linlithgow (Mr. Dalyell) had not torpedoed himself last Friday.
    Mr. Wallace: Many hon. Members feel that there is insufficient time for debating private Member's motions and Bills. Will the Leader of the House consider having an experiment, even one morning a week, and if hon. Members did not turn up to debate their own material, the experiment could be abandoned?
    Mr. Biffen: The House should be careful before engaging the whole bureaucracy of morning sittings to meet such a narrow point as that suggested by the hon. Gentleman.

    Line of Route
    Mr. Teddy Taylorasked the Lord Privy if he will review the policy of curtailing the normal line of route for a week on the occasions when Her Majesty's Government invite foreign dignitaries to speak in the Royal Gallery; and if he will make a statement.
    Mr. Biffen: No, Sir.
    Mr. Taylor: As this is the people's Parliament, and not the Government's Parliament, does my right hon. Friend not think that it is unfair, unreasonable and unkind that groups of schoolchildren and pensioners who have saved up for a long time to come to Parliament for pre-arranged visits should have their tours disrupted because of one of these occasions? Cannot such meetings be held in a Committee room? As the last three visits have been by representatives of Spain, France and Italy, and none have

    17
    been by representatives of the Commonwealth, will my right hon. Friend tell us exactly who selects the people who come to these privileged occasions?
    Mr. Biffen: That is a touching reference by my hon. Friend to the Commonwealth. Doubtless he will elaborate at some time on who he thinks would be suitable to make an address in the Royal Gallery. The Heads of State who are invited here for this accolade are relatively few. There have been about 10 during the past 20-odd years. The Government, of course, give the invitation, but they do so knowing that they speak for the British people at large. It would be a poor day if that proper degree of pomp and ceremony, which should be associated with Government were relegated because of schoolchildren's parties.
    Mr. Williams: The right hon. Gentleman is missing the important point. Many hon. Members have experienced this problem showing parties around this year. It must be borne in mind that these groups of pensioners, schoolchildren and so on are coming on a once in a lifetime visit arranged months in advance and, in many cases, at considerable expense. They deserve some consideration. Because it seems that the only rooms that need to be closed are the Royal Robing Room the Royal Gallery and the Prince's Chamber, it is inconceivable that we cannot arrange these visits so as not to close the line of route for a full week in advance.
    Mr. Biffen: That point is, of course, frequently considered by those who are responsible for looking after such visits [Interruption.] There are various serious responsibilities concerning security—a problem that has been compounded in recent years. I know that it is inconvenient that we must close down the line of route for about a week, but I do not belive that that period would reasonably be shortened without giving rise to other hazards, which I do not believe the House would wish to undertake.

  CHURCH COMMISSIONERS

    Stipends
    Mr. Greenwayasked the hon. Member for Wokingham, as representing the Church Commissioners, what was the total amount paid out by the Church Commissioners in 1985 for the stipends of bishops and clergy; what information he has as to the amount contributed by church congregations for this purpose; how these figures compared in real terms with those for 1975; and if he will make a statement.
    Sir William van Straubenzee (The Second Church Estates Commissioner, representing Church Commissioners): The total was £76·3 million in 1985. This included £33·9 million from church congregations. The figures for 1975— when payment arrangements were
    18
    different — were £21·3 million and £1·4 million respectively. That is an increase in real terms of 30 per cent. and 769 per cent.
    Mr. Greenway: Are not those figures impressive? Will my hon. Friend give the comparative size of the congregations who contributed the sums mentioned in 1975? What was the average size of the congregation per ordained clergyman then compared with now? Does he think that the congregations get value for money?
    Sir William van Straubenzee: The Church Commissioners do not keep statistics of the type requested, because they are not responsible for those matters. I was able to give only the broad figures for which my hon. Friend asked, and I am grateful to him, because they show two things. First, the gross figures are substantial. Secondly, the fact that contributions from church congregations have increased by 769 per cent. in that comparatively short period shows the enormous increase in voluntary giving that is willingly undertaken.
    Mr. Teddy Taylor: Do bishops get a secretarial allowance?
    Sir William van Straubenzee: The Church Commissioners pay the salaries of secretarial help for bishops.

  WALES

    Foreign Languages (O-Level Results)
    Mr. Gristasked the Secretary of State for Wales what proportion of 16-year-old school pupils in Wales achieve grades A to C at 0-level in foreign languages.
    The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): An answer cannot be given in the precise terms requested. In 1985 there were 13,566 6-year old pupils in Welsh schools. In the same year there were 4,141 passes at grades A to C in foreign languages. However, some pupils taking or re-taking 0-levels were over 16, and some sat more than one foreign language examination.
    Mr. Grist: Does my hon. Friend nevertheless agree that the overall figures for Wales, as in the rest of the United Kingdom, are deeply disturbing and quite extraordinarily poor in a European context? What will his Department do to try to persuade young people of the value of foreign languages in economic as well as in cultural terms?
    Mr. Roberts: My hon. Friend will know that my right hon. Friends have published a draft statement of policy on foreign languages in the school curriculum. I agree that there is plenty of scope for further teaching and learning of foreign languages. There is spare teaching capacity in foreign languages and new opportunities are presented by the advanced secondary courses. Further, many sixth forms undertaking foreign languages are comparatively empty.

Single Payments
3.30 pm
The Minister for Social Security (Mr. Tony Newton): With permission, Mr. Speaker, I should like to make a statement about single payments of supplementary benefit.
I first simply set some facts before the House. Between 1974 and 1979, under the previous Government, what were then called exceptional needs payments rose from 0·8 million to 1·1 million, and their cost from £11·5 million to £38 million. These numbers were already a matter of concern, and one of the objectives of the review carried out from 1976 to 1978 was better control of such payments.
In 1980 the present Government made changes which it was hoped would overcome the problem, and which indeed took account of the recommendations of that earlier review. Initially they appeared to have had some success, but by 1983 the number of payments was virtually double the 1979 figure, at nearly 2 million, and expenditure had almost quadrupled, to over £140 million. By 1985 both figures had more than doubled again—to more than 4 million payments at a cost of over £300 million—and the growth shows no sign of diminishing.
This trend cannot be explained by the increase in the number of claimants. The rate of payments per claimant has itself more than doubled since 1979. Nor can it be explained by changes in weekly benefit levels. The weekly scale rates rose in real terms by some 6 per cent. between November 1978 and November 1985. There have also been other significant improvements — for example, in some of the payments for children; in the amount and scope of regular additional heating payments, especially for pensioners; and in the rules concerning benefit for the long-term sick and disabled.
Against that background, our firm conclusion in the recent social security review was that the present system of single payments could be neither justified nor sustained. It is incompatible with sensible planning and efficient administration, as is shown by the fact that, although only some 5 per cent. of supplementary benefit expenditure goes into single payments, it accounts for nearly 50 per cent. of all supplementary benefit decisions and over 50 per cent. of appeal hearings.
More fundamentally, it is clearly not achieving what Parliament intended. Despite elaborate regulations and adjudication, wide discrepancies occur from one area to another. It is increasingly perceived as unfair by others on incomes little or no higher than supplementary benefit, to whom no comparable help is available. There is unacceptable scope for exploitation and abuse, yet at the same time insufficient flexibility to meet the real needs of genuine claimants.
As the House knows, it is for these reasons that the Government have brought forward in the current Social Security Bill proposals for an improved structure of regular weekly income support, coupled with a clearly distinct social fund designed to give appropriate help with genuine special occasional needs in a more practical, manageable and flexible way. We believe those proposals are essential to the proper working of the benefit system as a whole.
Meanwhile, however, the growing unworkability of the present single payments system could not simply be ignored. In February, therefore, we put for consultation
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to the Social Security Advisory Committee draft regulations making a number of changes within the existing structure, as an interim measure. The principal elements were to restrict furniture and bedding payments to more clearly defined categories of need; paying particular attention to the needs of pensioners, the sick and disabled, and those leaving hospital after a long stay; to introduce time rules for repeat claims for items of furniture; to set standard sums for specific items such as cookers, and standard amounts to cover a range of miscellaneous household items which can at present be individually listed; and to introduce a standard pattern of help with maternity needs.
We have now given very careful consideration to the committee's report, which is laid before Parliament today, together with my right hon. Friend's response. The report clearly recognises the difficulties to which the Government are seeking to respond. It also recognises the effort that has been made to take account of the needs of those thought to be most vulnerable, and welcomes in principle the introduction of standard payments and lump sums. While making it plain that the committee does not endorse the proposals as a whole, it nevertheless suggests a number of specific modifications which it would wish to see if the Government should decide to proceed.
For the reasons that I have given, the Government continue to believe that action is needed. Moreover, those considerations have been greatly strengthened by the continued escalation of single payments in recent months. The most recent figures, for the four weeks to 3 June, were equivalent to an annual rate of 5½ million payments and at least £400 million. Many local authorities and other bodies are mounting campaigns to stimulate further claims, for example by circulating leaflets containing extensive "tick lists" of items under some such slogan as "Closing Down Sale". Apart from anything else, the consequent growing burden on DHSS offices, despite the additional staff that we are making available, is seriously detrimental to the interests of claimants themselves.
The Government therefore propose to proceed with new regulations, but with a number of important modifications to meet detailed suggestions which the Committee has made. These include further steps to protect the position of refugees, women who have been subject to domestic violence, and young people leaving local authority care; a lengthening of the qualifying period for maternity payments; the extension of lump sum payments for miscellaneous items to childless claimants setting up home; and, perhaps most important, a doubling of that lump sum from £25 to £50 for each dependant. Regulations incorporating those changes have been laid today, with a view to bringing them into effect on 11 August.
Mr. Michael Meacher: Does it not indicate the extreme and justified embarrassment of the Government that they have for weeks put off laying this measure—one of the harshest in all their years in office—until after the Newcastle-under-Lyme by-election, and that they are now trying to rush it through in the last weeks before the recess? Indeed, I understand that they are proposing to table it for debate on Wednesday—the day of the royal wedding—in order, they hope, to minimise public awareness. Is it not characteristic of the Government that they have chosen a day of national festivities to hammer the poor with extra rates payments

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of £300 million, and now cuts in single payments, which, on the figures that the Minister gave today, amount to no less than £180 million?
Will the Minister acknowledge that supplementary benefit levels are insufficient to pay for—and were never intended to pay for major items such as furniture, bedding, blankets, cookers, fridges and clothes, and that the effect of these regulations must therefore be to push many families more deeply into poverty?
Does the Minister accept that cutting back expenditure on single payments to the 1984 level, as the Government intend, is wholly arbitrary and it fails to take account of the causes of the growth in demand for single payments, namely, the rise in unemployment, the growing number of long-term claimants, who inevitably have higher needs, and the steady erosion of claimants' other resources, such as savings or spouse's earnings?
Will the Minister acknowledge that the Government's SSAC said:
"The representations we received suggest that while some of this growth may be attributable to increasing awareness among claimants of their legal rights it may equally be accounted for by the existence of a reservoir of unmet need which is only now being recognised. The Government's response has been to propose much tighter conditions of eligibility and a greatly limited range of items. This response, because it seeks to attack the symptoms (increased public expenditure) without fully analysing the causes, must necessarily run the risk of causing widespread hardship amongst claimants who are already living at what is generally recognised as the poverty level."?
Those are the committee's words.
Will the Minister acknowledge that his criticism today of local authority take-up campaigns implies a lack of concern about the real problem of under-claiming that exists and shows that in the Government's view a high level of unmet need is acceptable? Will he confirm that the SSAC opposes these plans to reduce help for buying furniture, for meeting the costs of newly born babies and for making urgent payments to people in need? Will he confirm that the definition of chronically sick and physically, or mentally, disabled is being made much more restrictive in order to limit claims? Will the Minister confirm that the Government's revised list for help with furniture now omits tables, chairs, cupboards, floor coverings and carpets? Will he acknowledge that financing the repair or replacement of those items without assistance or recompense will chiefly hit lone-parents and unemployed people? Is he aware that scrapping regulation 28, by which back payments can be made where benefit has been underpaid, will have damaging effects, as will withdrawing protection from pensioners and many other vulnerable claimants during extremely cold weather?
Is the Minister aware that the modifications to the original draft regulations which he has made today, in the face of deep hostility from the SSAC are minuscule and cosmetic? Is he aware that these regulations will cause intense and widespread hardship? Is he aware that this is the latest and, perhaps, the harshest measure to be brought in by the Government, taking the country back to a restrictive and inadequately financed system of poor law support, which we in the Labour party unequivocally reject?
Mr. Newton: It will not surprise the hon. Member for Oldham, West (Mr. Meacher) to know that I accept little of what he said. We have made it clear that we expect about £100 million to be saved in a full year compared with
22
the expenditure in 1985–86. However, it is difficult to make firm estimates in this area at present precisely because of the rapid escalation in expenditure that is going on.
I do not accept the hon. Gentleman's suggestions about the creation of intense and widespread hardship. As the Social Security Advisory Committee acknowledged — I did not attempt to disguise the fact that it does not endorse the proposals as a whole — a deliberate and careful attempt has been made to protect those whom we see to be priority claimants and cases, to ensure that they continue to receive help.
Let me give the House one example to set against what the hon. Gentleman said. A lone-parent, with two children, setting up home after a marriage breakdown will still be able to get help of about £800 to assist in that connection. That is not unreasonable. It is a sensible provision for those most in need.
Mr. D. N. Campbell-Savours: The Government gave it all away to the rich last Thursday, on the Finance Bill.
Mr. Speaker: Order. The hon. Member for Workington (Mr. Campbell-Savours) must not interrupt from a sedentary position.
Mr. Campbell-Savours: The Government do not care.
Mr. Speaker: Order.
Mr. Newton: In view of the glowing terms in which the hon. Member for Oldham, West referred to the take-up campaigns of local authorities, I should tell the House that I have in my hand the "tick list" that was submitted by a claimant in the Strathclyde region. [interruption.] If the hon. Member for Workington (Mr. Campbell-Savours) will listen for a moment, he may—[Interruption.]
Mr. Speaker: Order. If the hon. Member for Workington cannot contain himself, I shall have to ask him to leave, and I should not want to do that.
Mr. Newton: I have in my hand the "tick list" that was submitted by a claimant in the Strathclyde region, listing literally dozens of items for which she was making a claim, starting with four single beds, bedding for the whole family, three fires, three fire guards and four hot-water bottles. Also, I have the letter that that claimant wrote to the local DHSS office a few days later, which said that her social worker had been to visit her and told her that she could claim, had filled in the form, posted it and had given her a copy. The claimant wrote:
"Most of the things I don't need, so I am writing to let you know the items I do need, and could you ignore the letters he has sent?"
Mr. Martin M. Brandon-Bravo: Does my hon. Friend not regard the multi-purpose forms to which he referred in his opening statement, which is similar to the one issued by the North British Housing Association, which begins
"Dear Manager, Pay me a grant for these things",
as a total abuse of the purpose of the single payment? Is it not a fact that this kind of leaflet and this kind of approach clog up the whole system of both the normal payment and the appeals procedure, to the detriment of the very people whom the system was designed to help? In the light of what has been happening during the last 12 months, is there not an unanswerable case for the new system that my hon. Friend is proposing?
Mr. Newton: I agree with my hon. Friend. I have some examples here, including the one that the Oldham social services department is circulating under the heading:
"Claim it while you can."
One local office in Sheffield, serving 21,000 claimants, recently received 4,000 claims for bedding within a few weeks and 2,500 claims for furniture within four days. What is happening is clogging up the system, is detrimental to the interests of claimants themselves and needs to be checked.
Mr. David Alton: Does not this latest attempt to shift the benefit goal posts augur badly for the new family credit system, which will no doubt be abolished if too many claimants take it up? Does the Minister not agree that this is just grinding the poor further into the ground? How will the poor contrast this decision to save £100 million with the decision to give away £1·5 billion in tax cuts? How will the poor contrast this decision to try to pick up a few petty offences with the Government's failure to do anything about racketeers and profiteers who are abusing hundreds of millions of pounds of housing benefit?
Mr. Newton: The hon. Gentleman should be aware that family credit has nothing whatever to do with this, except in one sense, namely, that the object of family credit is to do more to help low-paid families in work and to create a fairer system between those in low-paid employment and those on benefit. That is part of our purpose with these proposals.
Mr. Roger Sims: Is my hon. Friend aware that the state of affairs that he has described cannot be allowed to continue and that his proposals will be warmly welcomed on this side of the House? Does he not think that the abuse of the single payments system, as deomonstrated by the campaigns in the benefit shops that have been set up all over the country, illustrates the logic and the fairness of incorporating these resources into the proposed income support scheme? Would that not ensure that what is, after all, taxpayers' money goes to the people who are really in need and not to those who simply know how to manipulate the system?
Mr. Newton: I am grateful to my hon. Friend. I agree with every word that he has said.
Mr. Max Madden: How does the Minister have the brass neck to come to the House and make this statement, thereby saving £100 million, which will rob the poor of money that they desperately need for items with which to exist, and blame the poor for claiming what is theirs by right? How many Treasury Ministers have attacked sleazy accountants for running seminars to advise people on how to save considerable sums of money through tax avoidance schemes? How many Ministers have blamed the rich for exerting their rights and claiming their rights by every legitimate means? Why does the hon. Gentleman come to the House to attack those who are properly advising the poor on their rights and how to claim them? Is it not a disgrace to come to the House with this statement which is robbing the poor of £100 million, when the Government have given millions upon millions to the richest people, who do not deserve it and do not need it?
Mr. Newton: I am saying no more than that the system is manifestly lending itself to manipulation and
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exploitation on a scale beyond what Parliament ever intended, and that is not in the interests of claimants and is leading to delays in the proper processing of genuinely urgent applications. I do not believe that any Government would continue to live with this situation.
Mr. Tony Favell: Will my hon. Friend remind the Labour party that single payments do not drop off trees, and that the recipients rely on their neighbours to provide them?
Mr. Newton: I agree with my hon. Friend. One of the problems here is the perceived unfairness by those who cannot obtain these payments so readily. It is right to try to restore the balance between different groups in their claims on the taxpayer.
Mr. Kevin Barron: I represent an area where an increasing number of people are living on supplementary benefit, and where there has been a consistent rise in unemployment and all to do with it. Why are the Government not merely taking this £100 million from the poor people who need it, but not allowing an appeals procedure for the social fund so that an appeal can be made against any decisions taken?
Mr. Newton: The hon. Gentleman's question does not arise from the statement but will be the subject of debate in the House later this week.
Mr. Tim Smith: For all this synthetic excitement from the Labour Benches, is it not clear from the figures that my hon. Friend gave, showing that the number of claims has doubled in two years, that the taxpayer is being ripped off by this gross abuse of the system? What checks are carried out before claims are made, and afterwards to see that the money is properly spent?
Mr. Newton: Our staff attempt to carry out proper checks, but not the least of the difficulties with the growing exploitation of the system and the burden that it is placing on officers is that it becomes increasingly difficult to administer the system properly. We are not prepared to tolerate that.
Mr. James Lamond: The Minister said that he had a circular from the social services department at Oldham, which has—correctlybeen circulated to clients and those making claims for assistance. Why has the hon. Gentleman been so illogical as to claim that the system is clogged up—as it is, in Oldham—but not to deal with it properly by ensuring that there are sufficient staff to deal with the problem? Has not the lack of staff been pointed out time and again by the unions representing staff working in social service departments? Why has the hon. Gentleman sought instead to clear up the backlog by choking off those who are correctly asking for single payments, while, happily for him, by coincidence, reducing costs to the Government by taking £100 million from the poorest people?
Mr. Newton: The hon. Gentleman knows very well that we are in the process of putting a substantial number of additional staff into the social security system—some 5,000 in all — compared with what had been planned, because of the pressures on that system. I say to the House in all seriousness, because I believe that, in the end, it would be the view that Ministers in another Government

25
would have had to take, that no system can sensibly cope with this kind of payment rising at the rate of 1 million payments a year.
Mr. Nigel Forman: Will my hon. Friend confirm that, in making these regrettable but necessary changes, he has followed the advice of the SSAC on many of the most salient points? Furthermore, if these changes are made in advance of the full implementation of the social fund, what will be the bridging arrangements between now and then?
Mr. Newton: As I made clear in the statement, the measures are seen as a means of ensuring the continued workability of the existing single payments system, pending the introduction of the social fund. That is a sensible approach, and it underlines the Government's proposals.
Mr. Gordon Wilson: Does the Minister accept that most applicants for such payments come from the areas of greatest deprivation, which have the highest numbers of long-term unemployed people? Does he not realise that they require certain items to furnish their houses? Does the hon. Gentleman not have any constituency experience of people coming to him for help? Would it not be better to deal with what is clogging up the system instead of abolishing it altogether?
Mr. Newton: The hon. Gentleman would be wrong to think that there is a clear correlation between deprivation and the number of applicants. One of the least satisfactory aspects of the system is the extraordinary variation to be found between areas when measured in payments per claimant. The rate of single payments per thousand claimants varies from 481 in one region to 1,540 in another. In Scotland, which will be of interest to the hon. Gentleman, the number of claimants per 100 unemployed varies from 38 in some offices to 291 elsewhere. Such variations must call into question the fairness of the present system and whether it is being operated sensibly.
Mr. Douglas Hogg: Does my hon. Friend agree that an eightfold increase in the value of the payments between 1979 and today is wholly unacceptable? Does he further agree that, as a general rule, such payments should be used for unforeseeable and exceptional needs, and that there is considerable evidence that claims are being made that do not fall within the general purpose of the regulations?
Mr. Newton: My hon. Friend is right. That is one reason why I am concerned that the interests of those claimants with genuine, unforeseeable, one-off needs are in danger of being swamped by some of the things that are happening throughout the country.
Mr. Hugh Brown: Many of us appreciate the fact that the regulations are to be debated on Wednesday, the day of the royal wedding. That must have been thought up by the Government's dirty tricks department, but may I ask a constructive question? I accept that there are abuses. The Minister referred to Strathclyde, and I should not be surprised if the letter referred to the office covering my constituency. Some of us recognise that there is a problem, but would it not be better to hold constructive talks with local authority representatives, with a view to looking at the take-up
26
campaigns, which are legitimate, and at the abuses? One difficulty is that regional directors do not have the political know-how to deal with such situations.
Mr. Newton: We try to talk constructively to local authorities when they are considering take-up campaigns, to ensure that they are conducted responsibly and in a well targeted way, but that does not work with all local authorities, and some are easier to talk to than others.
Mr. Michael Hirst: Does my hon. Friend agree that voluntary insulation groups have done a good job in insulating annually about 500,000 homes of the most disadvantaged members of society, often with help from a single payment? In view of his statement, can he offer any reassurance about the future of voluntary insulation groups?
Mr. Newton: The regulations that have been laid today do not affect single payments for draught-proofing. I have made it clear several times that we would not wish to make changes in that respect without being assured that there were adequate alternative arrangements to ensure the continuation and, indeed, development of those very valuable groups. We are discussing that with the other Departments involved.
Mr. Jeremy Corbyn: Instead of attacking local authorities and claimants' organisations which legitimately seek money from the DHSS, why does the Minster not improve the advice services of the DHSS? Is it not an abuse to say that those who are eligible to claim money, and legitimately do so, will henceforth be prevented from doing so for single payments? Will the Minister tell us when he last went through the indignity of trying to get a single payment to buy a secondhand cooker or an old bed or clothing or furniture? Has he been through that indignity? It is a disgrace that this week, when millions will be spent on the royal wedding, the Minister should come here to make the poor pay for the tax cuts and for the wedding that we are about to see.
Mr. Newton: We have significantly improved the DHSS advice services, and we attach great importance to that. Everyone recognises the value of the DHSS Freephone service, which is now operating throughout the country. One of the things welcomed by the Social Security Advisory Committee is the proposed introduction of standard lump sums for such items as cookers. That will improve the position of claimants.
Several Hon. Members rose—
Mr. Speaker: Bearing in mind that this is an Opposition day, I shall allow questions to continue for a further five minutes, and then we must move on.
Mr. Michael Stern: Does my hon. Friend agree that one of the most welcome aspects of these regulations is the standardisation of payments? I hope he will agree that that will deal with a number of the racketeers who batten on to people who receive single payments. The effect of the regulations could be that more money will reach the people who need it.
Mr. Newton: I certainly agree. I think the Social Security Advisory Committee has recognised that our proposals are a real gain and will help to avoid some of the problems to which my hon. Friend has drawn attention.
Mr. Dafydd Wigley: Does the Minister recall that earlier this year, in the Select Committee on Social Services, he warned us when we were pressing for more money to help disabled people and to provide care for old people that that could be achieved only at the expense of other items? In view of the Government's climb down on invalid care allowance and the passing of the Disabled Persons (Services, Consultation and Representation) Act 1986, are these regulations being rushed through so that the poor will have to pay for those two provisions? It is a matter of Peter paying Paul, and of the poor being clobbered on this occasion.
Mr. Newton: No, it is not. I know that the hon. Gentleman's anxiety is totally genuine, but I had hoped he would recognise the trouble that we have taken in the regulations to protect sick and disabled people, about whom he and we are concerned.
Mr. Gerald Howarth: Can my hon. Friend tell the House what proportion of those who are eligible to make single payment claims are doing so, and of those what proportion are repeat payments? I assure my hon. Friend that his statement will be welcomed by a large number of people.
Mr. Newton: Off the cuff I cannot give my hon. Friend the figures that he requires. It is certainly the case that alongside the regional and local office variations about which I spoke there are some astonishing variations between the numbers of claimants who receive a single payment, the numbers who receive many single payments and those who receive no payments at all.
Mr. Don Dixon: The Minister said that refugees would not be affected by this robbery. Is he aware that in my area the vast majority affected by these cuts will be the industrial refugees, who are in that position because of the chaos inflicted by Government policies? Is he aware of the inquisition that people have to go through to get these single payments?
Mr. Newton: It is right that for single payments and for weekly payments of supplementary benefit local offices should seek to check that claims are genuine. I have not so far spoken about the removal of the so-called suitable alternative furnished accommodation rule, which has been generally welcomed. That rule was widely seen as disadvantaging many unemployed people who were trying to move out of board-and-lodging accommodation.
Mr. Peter Bruinvels: Does my hon. Friend accept that the careful and thrifty people in my constituency deeply resent these single payments, the absence of checks and the fact that beds are supplied every 18 months? Leicester city council has launched a scurrilous campaign aimed at giving more to just one section of society, while those who are entitled to more do not get it because the council does not care about them.
Mr. Newton: I note what my hon. Friend says, and I am not entirely surprised in view of the amount that Leicester city council must have expended in producing this "Closing Down Sale" leaflet, which is littered with massive "tick lists". I am sure that that will arouse in many people just the kind of resentment about which my hon. Friend has spoken.
Mr. Jim Craigen: The regulations about which the Minister complains were introduced by
28
this Government. Are we to assume that the upsurge in the number of single payment claims is a reflection of the social and economic policies that the Government are pursuing? Is the Minister asking the House to believe that the one example that he cited from Strathclyde—he did not tell us whether the person would have been eligible for the items claimed — convinced him to do what he is proposing?
Mr. Newton: If some social workers are filling in forms for people, getting the people to sign them and sending them off, and if it then emerges within a matter of hours that the claimants themselves did not perceive that they had those needs, that in itself is a form of manipulation of the poor. I do not suggest that all social workers do that.
Mr. George Park: Will the Minister accept that as unemployment stretches into years, inevitably household goods wear our and cannot be replaced on the amounts available through supplementary benefit? He is adding to the great hardship already suffered by some people. What happens when the cash limited social fund runs out part way through a financial year? Do people have to reapply at the beginning of the next financial year and hope that their names are further up the list?
Mr. Newton: As I have said, the social fund will be a matter for debate later in the week. The anxiety reflected in the first part of the hon. Gentleman's question is precisely why we have more generous rules in these regulations for those who have been on benefit for more than a year.
Mr. Peter Pike: Will the Minister accept that already many thousands of people do not get the single payments that they need because of the way in which the regulations operate? His statement is an appalling attack on the poorest and the most deprived sections of the community. The Government should accept that they are the guilty ones, because they created the unemployment and the deprivation. The Secretary of State for Social Services should use his influence in the Cabinet to deal with the real problems facing the country. The Government should not pursue this attack on poor and deprived people.
Mr. Newton: The statement means that as soon as the new regulations are in effect those claimants with genuine needs that ought to be met will have a better chance of getting them dealt with promptly and efficiently, because their claims will not be buried in this torrent of deliberately stimulated claims.
Mr. Harry Ewing: Will the Minister confirm the point made by my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen), that he, the Minister, voted for the regulations about which he is now so critical? Can the Minister explain to claimants the difference between those who take full advantage of the Chancellor's tax laws by employing a well-paid and well-heeled accountant, and social security claimants who are advised by well qualified social workers so that they can take advantage, of which they have more need, of these regulations?
Mr. Newton: It is appropriate for the Government to make sure that tax laws and social security laws operate

29
in the way that they were intended, and that they are not wide open to abuse. Successive Governments have done that. We are determined to tackle abuse on both fronts.
Mr. Campbell-Savours: Why does the Minister not listen to his own electorate? Does he not realise that millions of his supporters believe that by penalising poor people and giving money to the rich under Finance Bills the Government are wrong? They believe that that is wrong, and they object. Why do Government Back Benchers not stand up and represent middle-class opinion? Those people feel deeply ashamed of what the Government are doing. They know that the Government are wrong, and in all conscience they often write to their Members of Parliament and tell them that they object. They go to Conservative conferences to object, and yet the Government ignore them. [Interruption.]
Mr. Speaker: Order. The hon. Gentleman must not make a speech.
Mr. Campbell-Savours: The Government ignore them because they do not care.
Mr. Newton: I shall confine myself to saying that I had not hitherto seen the hon. Gentleman as a classic representative of middle-class opinion.

Business of the House
4.10 pm
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): With permission, Mr. Speaker, I should like to make a short statement about the business for Wednesday 23 July. The business for that day will now be as follows:
Consideration of any Lords amendments which may be received to the Social Security Bill.
Motion relating to the Supplementary Benefit (Miscellaneous Amendments) Regulations.
Consideration of any Lords amendments which may be received to the Wages Bill and the Agriculture Bill and Lords amendments to the Dockyard Services Bill.
Mr. Peter Shore: I note the change of business that has just been announced, and I have three questions to ask the Leader of the House. First, is not his statement further evidence of the truly chaotic state of affairs in the planning of Government business? Although we welcome the Government's capitulation on the amendments proposed in the other place to the Dockyard Services Bill, does the right hon. Gentleman recognise that four Bills and an order on one day is an abuse of the legislative process?
Secondly, on the supplementary benefits order that we have just been discussing, which sharply limits single payments to the very poorest, does not the right hon. Gentleman understand how offensive it is that this squalid measure and the Social Services Bill that precedes it should be timed to coincide with a glittering state occasion, when the focus of the press will inevitably be not on the House of Commons but on Westminster abbey?
Thirdly, since the right hon. Gentleman obviously believes that all relevant business must be completed before the recess, will he reconsider the date of the summer recess so that the House can debate the major report from the Select Committee on Defence on the Westland affair, which is due to be published at 11 o'clock on Thursday?
Mr. Biffen: The right hon. Gentleman questions the nature of the business. I do not accept his strictures and I answer him in the same terms as I did the Leader of the Opposition.
As to the second point on the supplementary benefits order, given the nature of business for this week, Wednesday was the most convenient day to debate it. It is perverse constantly to draw attention to the royal wedding in relation to business which we should conduct anyway as a working Parliament.
Finally, I note the right hon. Gentleman's anxiety that Parliament should sit beyond this week and into the future. The motion for the recess will soon be tabled. It will be debatable, and the right hon. Gentleman can put his points then.
Sir John Biggs-Davison: Am I right in thinking that the royal wedding is in the morning?
Mr. Biffen: Yes.
Sir John Biggs-Davison: If so, what is the difficulty for right hon. and hon. Members to attend and debate the business in this place?
Mr. Biffen: I have shrunk from making that monumentally simple observation because I hoped that hon. Members would conclude that this line of argument was farcical.
Mr. David Alton: Given the continuing havoc in the Commonwealth following our failure to impose sanctions, does the Leader of the House agree that before the House rises on Friday there should be an urgent statement on the matter in the House? Would that not give Her Majesty's Government the opportunity to answer the serious allegations made yesterday in The Sunday Times?
Mr. Biffen: I take account of the hon. Gentleman's request and will pass it to the appropriate quarter.
Mr. Bill Walker: When my right hon. Friend considers the changes that may or may not be made in this week's business, will he remember that we would rather work late this week, finish on Friday and have our holidays with our children, who in Scotland have been on holiday for some weeks?
Mr. Biffen: That is a very good home-spun observation which will undoubtedly be put to the test when we debate the recess motion.
Mr. Robert Wareing: Has the right hon. Gentleman had a chance to see the Channel 4 television broadcast which went out on Thursday night entitled, "All the Prime Minister's Men"—
Mr. Speaker: Order. We are dealing with the business for this week.
Mr. Wareing: I am coming to that, Mr. Speaker. In view of the allegations made in that programme that the right hon. Member for Henley (Mr. Heseltine) issued a document to the Cabinet entitled, "It took a riot", following the Toxteth riot in Liverpool—
Mr. Speaker: Order. This widens the debate very much beyond the change of business for Wednesday.
Mr. Wareing: I shall come directly to the point. Is it not time that we had an urgent debate on the murder of Merseyside, which was opted for by the Government as a result of the response to that report in the Cabinet by the Secretary of State for Foreign and Commonwealth Affairs?
Mr. Biffen: I did not see that television programme. I assure the hon. Gentleman that the Government have enough business on for the remainder of this week. I cannot accommodate the debate that he suggests, but he will have the chance, as a private Member, to raise the matter on Thursday or Friday.
Several Hon. Members rose—
Mr. Speaker: Order. May I again remind the House that this is an Opposition day and that such exchanges take time out of that period? I shall call those hon. Members who have been rising, provided that they keep their questions brief and to the point.
Mr. Tam Dalyell: On the Dockyard Services Bill, will the Leader of the House do the penance of reading the speech of the hon. Member for Eastbourne (Mr. Gow) on Friday? Is it not a classic case of filibustering? Before he talks about my torpedoing myself, will he admit, uncynically, that the Government had continued—
Mr. Speaker: Order. That is just what I was hoping would not happen. The hon. Gentleman's question has nothing to do with the business statement.
Mr. David Winnick: Does the right hon. Gentleman realise that he has responsibilities to the House as a whole, not simply to the Government of which he is a member? If there is a strong demand, certainly from the Opposition, for the report of the Select Committee on Defence on Westland to be debated, will he recognise the need for this to be seriously considered? Is it not scandalous that the House will go into recess for 10 or 11 weeks while a report will be published and widely debated in the media, yet hon. Members will have no opportunity to debate it in the House?
Mr. Biffen: It is because I have a responsibility to the House as a whole that I believe we should go into recess on Friday. If the hon. Gentleman genuinely disagrees with the proposition, doubtless he will vote against it, as will others.
Mr. Speaker: Order. May I pre-empt further questions on that report, which is not due to be published until Thursday and so will not be affected by this statement.
Mr. Max Madden: Will the right hon. Gentleman arrange for the Home Secretary to make an early statement on the appalling conditions which many visitors at Heathrow are facing? Many men, women and children are being kept for up to 24 hours without food or drink. Others have been taken to police cells and to prisons. I remind the hon. Gentleman that they have committed no crimes. The position at Heathrow is a disgrace. It does great damage to our efforts to promote Britain as a tourist centre and it is an example of grotesque maladministration by the Home Office.
Mr. Biffen: The hon. Gentleman raised the matter with me on Thursday, when I said that I would have the matter investigated. I stand by those words and I also stand by the comments I made then—that I disagreed with the premise on which the hon. Gentleman based his remarks.
Mr. Seamus Mallon: The right hon. Gentleman will be aware of the many attempts to secure a statement on the Stalker affair by the Home Secretary or the Secretary of State for Northern Ireland. Will he prevail upon either of those gentlemen to make such a statement so that the matter will not rest in abeyance until 21 October?
Mr. Biffen: The hon. Gentleman will appreciate that the inquiry is continuing and that, under United Kingdom practice, it would be improper for a statement to be made now.
Mr. Dennis Skinner: Since on Wednesday the House will be debating the Social Security Bill, which prevents claimants from having access to tribunals and making appeals, which will cause those who have lost limbs in industrial accidents to lose anything up to 14 per cent. in compensation, and which is an all-out onslaught on working people and supplementary benefits, would it not be a good idea if, before the debate started, the Leader of the House encouraged the Minister responsible to tell the House what supplementary benefits and grants will be included in the Civil List for the royal family in the following year and give an estimate of the cost of the royal wedding on that day?
Mr. Biffen: That is a proposition which I note and which enables us all to understand that much further the political philosophy of the hon. Gentleman.
Mr. Dafyld Wigley: May we have a statement on Wednesday on the grave situation that has developed in north Wales in relation to the radioactive lamb bah which, during the last few days, has shown that sheep will be stuck on the mountains in north Wales into the winter with no grazing and it is unlikely that they will be able to be moved? We have not yet had a statement from the Secretary of State for Wales on that matter and it will be appalling if the House goes into the summer recess without having had an opportunity to discuss that.
Mr. Biffen: I have a constituency interest in the sheep trade in north Wales and therefore I pay proper regard to what the hon. Gentleman has said. I am sorry that the matter could not be ventilated at Welsh questions today but I shall certainly take up the point with my right hon. Friend.
Mr. Merlyn Rees: Is the Leader of the House aware that an incident occurred last Friday which causes concern, and which certainly causes me concern, which affected a Member of Parliament, and which needs brief investigation and a report to the House? My hon. Friend the Member for Linlithgow (Mr. Dalyell) was followed outside the precincts of the House and his movements tracked by a non-Member. It seems that reports of his movements were made. That is the sort of thing that happens in Eastern Europe. Why was this? Why did it take place? To whom was the report made and why?
Mr. Biffen: I am not clear what responsibility I may have in this matter, but it would be appropriate if the right hon. Gentleman set all the details out in a letter and we could then decide who is the responsible recipient.

Westland plc
4.22 pm
Mr. Alan Williams: On a point of order, Mr. Speaker. I realise that this is a slightly unusual point of order and I equally realise, as the Leader of the House told us on Thursday, that the timing of the publication of the report of the Select Committee on Defence on the Westland scandal is a matter for the Committee's Chairman. However, I am convinced that the Chairman has done everything in his power to expedite the publication of that report and that is why I bring the matter to you.
I submit that for three reasons we are in a unique situation which requires your involvement, Mr. Speaker. After all, the House is going into recess for three months. Secondly, the Attorney-General, one of the most senior figures in our legal system, may find that he has to resign if it emerges that he, in his unique role, approved the charade of setting up a leak inquiry after having been told that that leak had been authorised by a senior fellow member of the Cabinet. Thirdly, it is unique because if the Attorney-General finds himself in such a situation, the Prime Minister becomes exposed and vulnerable.
Therefore, I submit that we cannot wait three months before the House determines the culpability of the Attorney-General and the Prime Minister, particularly as during those three months hon. Members will be deprived of the protection of the privileges of Parliament.
For those reasons, it is in everyone's interests that the House should have the maximum time to study all the evidence, not just to have the report in front of them, before Thursday's Prime Minister's questions and the debates on the motion for the summer Adjournment and the Consolidated Fund.
In that unusual combination of circumstances, and as you are the custodian of the interests of the House, Mr. Speaker, is there any way in which the weight of your office can assist the efforts that I know have already been made by the Chairman to secure the earliest possible publication of the report, possibly the day or even the evening before, so that hon. Members can study it overnight?
Mr. Speaker: The point of order really is not for me. As the right hon. Gentleman said, this is entirely a matter for the Chairman of the Select Committee on Defence and I have no influence over when he decides to lay his report. If he wants to lay it before Thursday, presumably he can do so.
Mr. David Winnick: Further to that point of order, Mr. Speaker. May I raise briefly a matter about which you have shown some sympathy on previous occasions when matters have been debated outside, in broadcasting and the press? It goes without saying that the report of the Select Committee on Defence will receive extensive coverage. No doubt we shall switch on our television sets and see hon. Members debating with each other and so on. Yet for 10 or 11 weeks the House will not be able to debate the most important document on Government administration that has been published, which everyone recognises is virtually a time-bomb ticking away under the Government. Is not that a grotesque situation?
Mr. Speaker: The solution is in the hands of the House. The summer Adjournment motion will be debated on Thursday. The simple issue is whether the House adjourns or does not adjourn. If the hon. Gentleman and other hon. Members feel strongly about this matter, the solution is in their hands. I cannot do anything about that.

Rate Support Grants Bill
4.24 pm
Mr. Jack Straw: On a point of order, Mr. Speaker. My point of order, of which I have given you notice, concerns the Rate Support Grants Bill, which is due for its Report stage and Third Reading this evening. There is a distinct possibility that the Bill will be certified as a money Bill under the terms of the Parliament Act 1911, the practical effects of which would be to prevent the other place from detailed consideration of the Bill.
The fact of that possibility has come as a bolt from the blue. It was never anticipated by us. It is especially surprising since the Bill amends two other Acts, the Local Government, Planning and Land Act 1980 and the Local Government Finance Act 1982, neither of which was certified.
You well know, Mr. Speaker, that much of the work in Committee and on the Floor of the House on the details of Bills is about pressing Ministers to reconsider parts of measures and often seeking undertakings from Ministers that, if they cannot deal conclusively with a matter in this place, it will be dealt with in the other place when the Bill goes for its Committee stage there. That has been the assumption on which Labour Members have worked in Committee. In fairness, I believe that Ministers have also worked on that assumption and I think this is as much a surprise to them as to us. The Committee worked on the basis that the Bill would be fully debated in the other place. Had we not worked on that assumption, the whole tenor of its Committee stage would have been different.
My first point is that it is usually obvious from the start when a Bill is to be certified as a money Bill or one for aids and supplies. The most obvious example is the Finance Bill, which everyone accepts from the beginning is either a money Bill or one for aids and supplies. Where it is not obvious—it was not obvious either to us or to Ministers —would it not have been reasonable for the House and for members of the Committee to have been forewarned that the Bill was likely to be certified if it left the House of Commons in substantially the same form as it was introduced? A failure to give that information means that the proceedings upstairs and on the Floor of the House are prejudiced.
My second point concerns the merits of certifying the Bill. I realise that you, Mr. Speaker, will not make a decision on this matter until after Report and Third Reading, but I respectfully ask you take into account the following points. First, section 1(2) of the Parliament Act speaks of a Bill being certified when it deals with the imposition of charges out of funds provided by Parliament or their variation. The Bill does not deal with the imposition of charges, no money resolution was attached to it and in no way does it affect the amount paid out of funds levied by Parliament by way of rate support grant. It deal only with its detailed allocation and a narrow aspect of that—multipliers.
Secondly, the Parliament Act makes it clear that a Bill can be certified only if it deals with a matter of the imposition of charges out of funds voted by Parliament or certain other matters not relevant here. Even if you decide that the application of multipliers in the Bill does amount to an imposition of a charge, which seems to construe that provision of the Parliament Act very widely indeed, I submit that other matters are dealt with by the Bill which,

37
on any reading, are nothing whatever to do with the imposition of money provided by Parliament, nor are they subordinate to that.
I refer you particularly, Mr. Speaker, but not exclusively, to paragraphs 8, 9 and 13 of schedule 1. Those paragraphs affect generally the relationship between local government, central Government and Ministers, and the degree to which Ministers have to explain decisions that they have made by paragraphs 8 and 9. A duty on Ministers to provide Parliament and local government with the considerations leading to various determinations is substantially watered down so that the duty in future will be for the Secretary of State to provide information only "as he thinks desirable."
Under paragraph 13 the Secretary of State is given power to make assumptions about local authority budgets when he considers that information has not been provided by those authorities. Local government rates and taxes, and therefore their budgets, are specifically excluded from the operation of the Parliament Act.
The Bill was introduced retrospectively to overturn decisions by the courts and to deal with the possibility of other court actions. It was also introduced to establish certain numerals and multipliers and to change the nature of the information that the Secretary of State must give to the House.
I submit that the Bill cannot be certified as a money Bill. I ask you, Mr. Speaker, to consider my submission that the House, and in particular members of the Committee, are put in a major difficulty because no advance information was given that there was even a remote possibility of the Bill being certifed as a money Bill.
Mr. Speaker: As the hon. Member for Blackburn (Mr. Straw) said, the practice of my predecessors invariably has been to leave any certification of a money Bill until after the Bill has been given a Third Reading. If the House gives the Bill a Third Reading today, I shall decide the question of certification tomorrow. I shall, of course, carefully take into account the points raised by the hon. Member.

BILLS PRESENTED
  SHOPS (No. 3)
  Sir Fergus Montgomery, supported by Sir Marcus Fox, Mr. Michael Brown, Mr. James Couchman, Mr. Nicholas Lyell, Mr. Jerry Hayes, Mr. Fred Silvester, Sir Reginald Eyre, Mr. Christopher Hawkins, Mr. Austin Mitchell, Mr. Clement Freud and Mr. Gerald Howarth, presented a Bill to relax the restrictions which apply to Sunday trading; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on 24 October and to be printed. [Bill 215.]
  REPRESENTATION OF THE WORKPEOPLE
  Mr. Tony Benn presented a Bill to provide for the election of the Boards of Directors on certain public limited companies by the workpeople employed in those companies; to make provision regarding the powers of those boards; and for connected purposes. And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 214.]
Opposition Day
  [I5TH ALLOTTED DAY] [2ND PART]

    Fight Against Crime
    Mr. Speaker: Before I call the right hon. Member for Manchester, Gorton (Mr. Kaufman) to move the Opposition motion, I should announce that I have selected the amendment in the name of the Prime Minister.
    4.32 pm
    Mr. Gerald Kaufman: I beg to move,
    That this House, in the light of the collapse of the Government's policies on law and order, calls for the implementation of a national crime prevention programme, including crime prevention grants for owner occupiers and tenants and a safe estates programme, in order to ease the pressure on policing work and so increase levels of detection and therefore deter criminals; and further calls for properly funded Government support for a nationwide system of victim support schemes.
    A black cloud of lawlessness hangs over Britain loday. From Caithness to Cornwall, from Ceredigion to Kent, the country is suffering from the worst crime wave ever known. Last year 4,073,853 serious offences were reported in Great Britain. That was a 41 per cent. increase on 1978 — the last full year before the present Prime Minister came to office.
    In Thatcher's Britain theft has risen by 30 per cent., violence against the person has risen by 42 per cent., burglaries are up by 52 per cent. and criminal damage is up by 73 per cent. Thatcher's Britain is a Britain in which one crime of violence is committed every four minutes, in which one act of criminal damage is committed ever 51 seconds, in which one burglary is committed ever 32 seconds, in which one case of theft or of handling stolen goods is committed every 15 seconds and in which one serious crime is committed every 8 seconds.
    In Thatcher's Britain every family has a 30 per cent. chance of being victims of a serious crime. The crime rate is not only high, but is getting higher. When the Government came to office, 330 serious crimes were being committed every hour. Now, in Thatcher's Britain, not 330 but 465 serious crimes are being committed every hour.
    Sir Kenneth Lewis: Will the right hon. Gentleman give way?
    Mr. Kaufman: No. The Government took nearly an hour of our time with their disgraceful statement, and I cannot give way at this point in my speech.
    In Thatcher's Britain the number of crimes of violence committed each day has gone up from 258 to 366. In Thatcher's Britain the number of acts of criminal damage has gone up from 979 a day to 1,695. In Thatcher's Britain the number of burglaries has gone up from 1,752 a day to 2,662. In Thatcher's Britain the number of thefts has gone up from 4,406 a day to 5,728. That was the grim position up to December 1985.
    For England and Wales the figures for the first quarter of this year show yet another sharp rise, with total crime up 7 per cent., violence against the person up 5 per cent., theft up 5 per cent., burglary up 8 per cent., and criminal damage up 14 per cent.

    39
    Crime is not only costly to victims in terms of damage and injury, but it is a terrible financial drain on the nation. It is an enormous cost to the police, who spend an average of £2,350 on clearing up each crime that is solved. It is a cost to the courts, to the probation and after-care services, to the legal aid service, to the prison system and to the criminal injuries compensation system. The sums involved in the current year total £4,500 million—a 43 per cent. increase in real terms since this Government came to office.
    There are also costs to the economy and to individuals of losses due to crime and to precautions against crime. Insurance payments to crime amounted to £320 million in 1984, and £40 million was spent on alarm systems. The Home Office estimates that in 1984 the total value of property stolen in offences of theft, burglary and robbery was over £1 billion. The cost of fraud is estimated at £3 billion. Much of that fraud is against the Inland Revenue—a highly appropriate crime against the Government, as it is the ultimate act of privatisation. All told it is probable that crime costs our country £10 billion every year. Year by year that cost is growing.
    Those are the material costs, but we must add to those the costs to the security and tranquillity of our society. In addition to the facts of crime, there is the fear of crime. Every survey shows the extent of the fear of crime, even among people who may never become victims of crime. The recent Merseyside survey shows that 39 per cent. of respondents worry a lot about crime, 27 per cent. worry about being burgled, and 24 per cent. worry about vandalism. A total of 57 per cent. of women worry about going out on their own after dark. That is almost the same as the proportion of women in Islington who avoid going out after dark for fear of sexual attack or street robbery.
    The Home Office study on the fear of crime published in 1984 showed that 52 per cent. of inner city dwellers seriously worry about becoming victims of crime. It showed that 41 per cent. of women in the inner cities feel very unsafe walking alone at night in their neighbourhoods. It showed that 12 per cent. of all inner city residents never go out at night because of crime. The "British Crime Survey", published by the Home Office last year, showed that 40 per cent. of women under 30 were worried about becoming rape victims. Half the women questioned said that they avoided going out unaccompanied after dark. In high crime areas, 18 per cent. of the elderly said that they never went out after dark, wholly or in part because of fear of crime.
    Crime and the fear of crime destroy human rights. Every crime means individual suffering and a loss to the whole community. Every crime takes something away from its individual victims—their freedom, their peace of mind, their property, their health or even their lives. Crime of any sort also takes something away from society as a whole. We all lose when someone smashes a public telephone, burns or defaces a building or defrauds the Revenue. However, the fear of crime also diminishes both individuals and society. Parents grow fearful of letting their children out of their sight. The fear of crime changes people's habits and diminishes their freedom of movement and activity. As a Home Office researcher puts it, crime has
    "the disabling consequence of restricting access to the social and cultural opportunities of society."
    40
    In this predicament, people rightly look to the police for safety and protection. The police do their very best, but far too often they know that that very best is nowhere near good enough. Clear-up rates for many crimes are low, and they are falling. Since the Government came into office the overall crime clear-up rate in England and Wales has fallen from 42 to 35 per cent.; the clear-up rate for theft has fallen from 40 to 35 per cent.; for burglaries from 32 to 29 per cent.; and for criminal damage from 30 to 23 per cent. Nearly three burglars in every four get clean away with the loot, while almost four vandals in every five evade detection and punishment.
    There are more police, but the burden on them is greater than ever before. Under this Government the number of crimes committed per police officer has risen from 24 to 29 a year. If the Government reacted to the statistical success rate of the police in the same way as they treated the coal and shipbuilding industries, by now the Prime Minister would have put Sir Ian MacGregor in charge of closing down police stations throughout the country. That reaction to the police would be as unfair and as illogical as it was to other industries and services.
    Much of the burden that hinders the police has been imposed by the Government or is the result of Government policy. Public order duties are increasingly distracting police from the priority job of fighting crime. That was made clear by the Comptroller and Auditor General in his report this year on the Metropolitan police. He said:
    "There were … occasions when external demands (for example, for public order duties elsewhere) left insufficient numbers to maintain essential services."
    The demands of training for the Police and Criminal Evidence Act and other onerous Government legislation are reducing the operational effectiveness of the police. In his report in 1985 the chief constable of Staffordshire said that training commitments for the Act has so far resulted
    "in the loss of over 2,000 man weeks of operational availability."
    He complained:
    "It is often difficult to find the time for training in new legislation without either having to curtail operational availability or cancelling other, equally important, forms of training."
    At the Police Federation conference two months ago Mr. Tony Crowe, the chairman of the sergeants section, said that the Act had
    "taken supervising ranks off the street, leaving inexperienced constables to fend for themselves."
    He said that reduction in the first line of supervision would bring a generation of constables who had never had the necessary advice and guidance to develop skills.
    A report in The London Standard of 10 July quoted police in Brixton as saying:
    "Some detective work is now being done by telephone and residents are going to have to realise the choice we have. Do we take men away from a murder inquiry to investigate something like a stolen car radio? That's what staff shortages mean to us."
    A parliamentary answer to a question asked by my hon. Friend the Member for Leyton (Mr. Cohen) last week gave the disturbing news that since this Government came to office the number of police in London and the City engaged in the investigation of company fraud has actually been reduced, at a time when fraud is soaring and is more dangerous a crime than it has ever been.
    Mr. Tim Smith rose—
    Mr. Kaufman: I do not have time to give way. The Government took up an enormous amount of time with a disgraceful statement about social security. That has taken time away from the Opposition debate.
    In the face of this alarming story of record crime rates, reduced clear-up rates and reduced police efficiency, what we get from this Government is a combination of shrill slogans and ineffable complacency. In their 1979 manifesto, the Conservatives proclaimed:
    "Surer detection means surer deterrence."
    Detection is less sure now than it was seven years ago. In their 1983 manifesto the Government said vaingloriously:
    "already street crime is being reduced and public confidence improved in some of the worst inner-city areas."
    Yet in those inner-city areas crime under this Government has risen by two thirds — half as much again as the depressing national average.
    The Home Secretary said in a press release last March that the number of burglaries had fallen by 4 per cent. the previous year, which suggested that the crime prevention campaign might be beginning to bear fruit. He spoke too soon, because in the quarter that ended with the very month during which he made that boast burglaries rose by 8 per cent.
    In this House two months ago the Home Secretary said:
    "Local authorities can use the housing investment resources available to them for crime prevention and security measures."—[Official Report, 8 May 1986; Vol. 97, c. 281.]
    The right hon. Gentleman seems to be completely unaware that under this Government those housing investment resources have been slashed by 70 per cent. Local authorities do not even have the cash to carry out their most basic housing responsibilities, let alone expand the necessary work of crime prevention.
    On 13 March the Prime Minister said, in her most characteristic let-them-eat-cake frame of mind:
    "Most people will and should he able to make their own provision for crime prevention." — [Official Report, 13 March 1986; Vol. 93, c. 1079.]
    We know that that is exactly what the right hon. Lady is preparing to do for herself in her retreat to Fort Dulwich, but surveys such as that in Islington show that income is a major factor in determining whether security devices are installed and that many people who would like to take crime prevention measures cannot afford to do so. It is time for a nationally led and co-ordinated crime prevention campaign. It is clear from their ludicrous amendment to the Labour party motion that no such lead can be expected from this Government.
    Already the Government's efforts to show what they are doing about crime prevention have taken on an air of pathos. Earlier this month the Home Secretary planted a question with the hon. and learned Member for Burton (Mr. Lawrence) that had so little positive to claim about Government action on crime prevention that his answer was reduced to boasting about raising the profile of crime prevention and urging various organisations to identify crime prevention potential. Two seminars have been held at Downing street amid the kind of fanfares that Mr. Bernard Ingham usually reserves for vilifying a Cabinet Minister out of favour. Nothing positive has come from either seminar.
    The Government's amendment goes through the usual motions of proclaiming
    "additional resources … devoted to law and order".
    In fact, expenditure on policing during the current financial year in real terms is due to fall slightly. The report
    42
    on spending on law and order produced a few months ago by the partly Government funded National Institute of Economic and Social Research states:
    "there is little ostensible association between police resources and recorded clear up rates."
    The outcome of all the spending has been a 4 per cent. increase in serious crime.
    Cuts and spending ceilings imposed by the Government on local authorities—for example, £20,000 million less in rate support grant — mean fewer caretakers, park-keepers and attendants who look after public places and the people who use them. The loss of these public employees means more graffiti, vandalism and petty crime. It means also that public places stay vandalised or derelict for longer periods. That in turn reduces the character of the environment and stimulates further crime.
    That is why the Labour Government will launch an immediate programme aimed at preventing crime and making neighbourhoods safer. We want to help city, town and rural areas, tenants and owner-occupiers. Some council estates have suffered especially high crime rates. The fear of crime is both deep and wide, especially in inner city estates, and it causes people to be trapped into their homes from dusk till dawn. They are fearful even of opening their doors to callers.
    Many estates face intense problems because of bad design, inadequate maintenance, cuts in caretaking and other staff, insensitive and remote bureaucracy, inadequate provision for children and families, inadequate privacy and insulation, no opportunity for people to meet in safety and insufficient protection for ethnic minorities and other victims of harassment. All these problems can be reduced with the right approach from national Government and local government and from the community as a whole. The Labour party's policy towards crime prevention on local authority housing estates acknowledges that improving security and public safety and reducing crime are linked crucially to increased investment in public sector housing.
    Labour will act to make tenants safer and more secure. We need more resident caretakers, tower-block receptionists and other estate staff who are properly trained, supervised and supported, in conjunction with physical security measures, a responsive repairs service, a sensitive allocation policy and effective neighbourhood policing. Such measures will be planned in accordance with the wishes of the local community. As we say in our motion, Labour will establish "a safe estates programme". With the increased allocations for housing expenditure that Labour will make available, local authorities will be encouraged to place more caretakers, including resident caretakers, and to strengthen front entrance doors, frames, locks and windows.
    Mr. Tim Smith: How much will it all cost?
    Mr. Kaufman: Much less than the £10 billion that the economy loses as a result of crime.
    We shall improve lighting on streets, stairwells, corridors, balconies and walkways. We shall replace breakable fittings and materials with those that cannot be broken. We shall install entryphone systems and closed circuit television surveillance in medium and high-rise blocks. We shall adopt design changes to reduce crime and the fear of it—
    Mr. Tim Smith: Unbreakable windows?
    Mr. Kaufman: I bet that the Prime Minister has unbreakable windows at Dulwich.
    We shall adopt design changes to reduce crime and the fear of it by reducing the number of escape routes for criminals, by removing connecting walkways and by partitioning large blocks. We shall establish carefully located and supervised play areas and introduce regular patrolling on foot by caretakers and other council employees. We shall establish more support for established tenants' and residents' associations.
    The Labour Government will take measures also to prevent crime in private housing and in public places. We shall legislate in our first Session to make available crime prevention grants on application by both home owners and tenants. These grants will be available within the rateable value limits that apply to improvement grants and repair grants. Their cost will be contained within the increased housing investment allocations that will be provided to local authorities as part of the Labour Government's drive against bad housing and unemployment. Such grants will be extremely cost-effective. The average cost of clearing up a crime is nearly 50 times more than the cost of basic home security provision. Let it be known throughout the country that tonight Tory Members will be voting against a national system of crime prevention grants.
    The Labour Government will ensure that local authorities involve residents in the planning of security and safety measures in homes and in the surrounding streets or courtyards. We shall encourage the provision of safer public transport. We believe that security should be improved by providing alarm buttons and closed-circuit TV at bus and train stations and by closing off little-used passageways, especially on Underground systems. We shall — [Interruption.] I am interested to note that Conservative Members should heckle so much. I am putting forward practical plans to deal with crime, and all we get from Conservative Members and the Government is waffle, seminars and slogans. There is no action and we have the worst crime rate that Britain has ever known.
    Mr. John Wheeler: Will the right hon. Gentleman give way?
    Mr. Kaufman: The needs of security and the fears of passengers on public transport—[HON. MEMBERS: "Give way."] I shall not give way to the pathetic hon. Member for Westminster, North (Mr. Wheeler), who merely rises to toady to the Government on every possible opportunity.
    The needs of security and the fears of passengers—
    Mr. James Couchman: On a point of order, Mr. Deputy Speaker. Is it in order for the right hon. Member for Manchester, Gorton (Mr. Kaufman) to refer to my hon. Friend the Member for Westminster, North (Mr. Wheeler) as a pathetic Member?
    Mr. Deputy Speaker (Mr. Ernest Armstrong): There is nothing unparliamentary about that.
    Mr. Kaufman: There can never be anything unparliamentary about the truth, Mr. Deputy Speaker.
    The needs of security and the fears of passengers on public transport should be taken into account in planning bus routes, bus stop location and crewing. We shall take measures to reduce the high level of car crime. We shall have discussions with manufacturers to produce design changes—
    Mr. Wheeler: That is being done now.
    Mr. Kaufman: But nothing is happening, even after seven years.
    Mr. Wheeler: It will happen.
    Mr. Kaufman: These design changes will be related, for example, to steering column locks and electronic locking and alarms.
    Mr. Wheeler: That was done in 1979.
    Mr. Kaufman: Are Conservative Members saying that the measures that I am suggesting have been in operation for seven years, bearing in mind the 41 per cent. increase in crime and the highest level of auto crime ever known?
    The Government and Conservative Members generally now make many claims and all sorts of promises. They have had seven years in which to keep their promises and yet they have broken every one. Let it be clearly understood that when Conservative Members vote this evening they will be voting against the Labour party's safe estates and crime prevention campaigns.
    Even with much more co-ordinated community action in defence of law and order, the Labour Government will still inherit a high level of crime. Many crimes mean many victims and it is time for much more positive action to be taken to support victims at their time of loss and injury. The Government have the impertinence in their amendment to claim credit for the development of victim support schemes, but the victim support movement tells a different story. Government support for the movement amounts to precisely to £286,000.
    Mr. Tim Smith: That is more than the Labour Government provided.
    Mr. Kaufman: That sum is small enough in itself and it is not even available in the long-term.
    Mr. Ivan Lawrence: How much did the Labour Government provide?
    Mr. Kaufman: In his report, which was issued the week before last, the chairman of the National Association of Victims Support Schemes expressed concern that no Government allocation had been made to extend beyond 1987. He contrasted what he described as the Home Secretary's "fine words" with the absence of secure funding. He said:
    "the last twelve months have been marked by a growing anger at the mis-match between official statements of support for victim support schemes and the level of financial assistance provided."
    He warned against the Government abdicating their responsibility towards victims.
    The association's annual report starkly stated:
    "The precarious position of schemes' finances unquestionably limits their scope to develop a full service to the victims of crimes. Not only the shortage of funds, but also their lack of continuity, continue serving as grievous constraints on the work of many schemes."
    The Association of Chief Police Officers made the accusation that the effectiveness of victims support schemes is
    "constrained through inadequate and haphazard funding".
    Set against those facts, today's Government amendment is the rankest hypocrisy. A Labour Government will act to ensure that victims support schemes are available throughout the country. Many parts of Britain entirely lack such schemes, yet the work carried out by those

    45
    schemes, to counsel, comfort and help crime victims, including abused children, battered wives and rape victims, is beyond price. We will discuss with the National Association of Victims Support Schemes what sums of money it needs to provide the services that it regards as essential. When we have costed them carefully, we will provide the money that is needed. Victim support on a much larger and wider scale calls for sums that are tiny within the national budget. We will enable that support to be provided. When Tory Members vote this evening, they will be voting against positive Government assistance for victim support.
    Crime is a disease in our society. Every disease has its causes. The Government fail to address those causes. In fact, they are responsible for some of them. The National Institute of Economic and Social Research gives details of the links between social deprivation and crime. It points out that those authorities that have the highest recorded crime rates include those most densely populated, those with the worst overcrowding and those with high rates of unemployment.
    The position was put even more bluntly in the annual report of the chief constable of Greater Manchester, which was published last week. In that report, Mr. James Anderton dealt directly with Greater Manchester, but it applies to the country as a whole. He said:
    "Burdens on police in Greater Manchester have grown against a background of alarming unemployment generally averaging 15 per cent. for all age groups throughout the area, but with a much larger problem in the inner-city. Perhaps of more telling significance, from the standpoint of law and public order, is the fact that the figure for long-term unemployment among the crime-prone younger age groups in the worst affected parts of the conurbation, not just in the inner-city, ranges from 50 per cent. to a staggering 80 per cent. or more. Policing certainly has to be wise, caring and sensible in those distinctive localities where almost the entire population is out of work and living on 'social security.'"
    High levels of crime tell us not only about the kinds of criminals at large in our society, but about the kind of society that creates the conditions that nurture such criminals. When confrontation is deliberately incited, when bitterness is provoked and envy is stirred up, when more and more people are frustrated, living without hope, and made to feel that society has rejected them, crimes of every kind are more likely to be committed.
    Under this Government, Britain has become a family divided against itself. Division is deliberately stirred up between old and young, the retired and those still at work, employed and unemployed, north and south, black and white, inner city and suburbs. No family can prosper when some of its members feel neglected and despised. To have any hope of success, the fight against crime needs a new start. For that new start, we need a new Government.
    5.4 pm
    The Secretary of State for the Home Department (Mr. Douglas Hurd): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof,
    'reaffirms its support for the Government's commitment to pursuing an honest, vigorous and coherent policy in the fight against crime; welcomes the additional resources the Government has devoted to law and order, the success of Government backed crime prevention initiatives such as Neighbourhood Watch and property marking schemes, the encouragement given to local crime prevention initiatives, and the development of victim support schemes; expresses support for the police in their efforts to build closer links with the community; and believes everybody has a responsibility to participate in the fight against crime.'.
    46
    The right hon. Member for Manchester, Gorton (Mr. Kaufman) seems to believe that by repeating statistics he can make them less misleading. He repeated statistics that he has cited in the House. They are designed to show that the "black cloud", as he called it, settled over Britain—what he called "Thatcher's Britain" — in the years following 1979. If we are to have a serious discussion, I hope that we can start from the fact that recorded crime has risen steadily—between 5 and 7 per cent.—over the past 30 years.
    One can toss about statistics. I could, if I wished to do so, show the right hon. Gentleman that violent crime, which is what concerns most people most of the time, rose substantially faster in what I suppose I must call Wilson's and Callaghan's Britain. Since 1979, that type of crime has slowed down in its rate of increase. Although the right hon. Gentleman spent at least 10 minutes tossing about such statistics, I do not think that it is sensible to do so. I am prepared to agree that the nation faces a major problem that has been mounting over 30 years, and that it requires a major and a national effort to deal with it.
    The right hon. Gentleman's party has no credentials or credibility to allow it to join in such an effort. We heard nothing today from the right hon. Gentleman about attacks on the police and on most things that they do which have characterised past debates on the subject, especially the recent debate on policing in London. The right hon. Gentleman made an unfair and an inexact comment or two, especially about police training under the Police and Criminal Evidence Act. When there is a major piece of new legislation, there must be a major and a once and for all development of police training. Hon. and right hon. Gentlemen would be the first to complain if the police were not adequately trained in the law of the land, especially in the safeguards for the citizen which the Act introduced.
    Those safeguards were long debated by the right hon. Gentleman and me in Committee and on the Floor of the House. They are extensive and, in some respects, complicated. They would have been much more extensive and complicated if we had accepted the Opposition's amendments. During those debates we tried to keep the scheme and the safeguards as simple as we could, bearing in mind the burden on the police that would inevitably result.
    Mr. Wheeler rose—
    Mr. Hurd: I shall give way to my hon. Friend because he was grossly maltreated by the right hon. Member for Gorton.
    Mr. Wheeler: Does my right hon. Friend recall that, when he and I spent 59 sittings on the Police and Criminal Evidence Bill, the Opposition pressed strongly for safeguards concerning liberty and the treatment of individuals, and that my right hon. Friend saw the wisdom of many of them? Does my right hon. Friend not find it curious that the Opposition should now criticise an Act that they played a part in developing for the obligations that it imposes on the police service?
    Mr. Hurd: I agree. The right hon. Gentleman and Opposition Members generally thrive on a short memory, because if people had long memories, Labour's arguments would rapidly collapse.
    The right hon. Gentleman mentioned public order duties. I am worried about the way in which the argument

    47
    is developing. I do not understand the Labour party's position on public order. It seems to boil down to saying that some people deserve protection and others do not, and that, for example, the electricians and others who choose to work at Wapping should be left out of account. I do not know whether the argument is that there should be no policing at Wapping, so that it is impossible for people to exercise their right to work, or whether there should be only enough police to ensure that they are outdone and outnumbered by the pickets. The right hon. Gentleman did not develop that argument. It is an absolutely crucial argument if we are to get the balance right.
    The question of the balance in the use of resources inside any police force, including the Metropolitan police, must be left to the chief officer of police. I am deeply concerned that the Labour party's proposals would lead to the politicisation of police forces and political decisions as to who should be protected by the law and the police and who should not. No doubt, there will be occasions on which Labour Members can develop their points.
    The subject of the Opposition's motion is crime prevention and victim support, and I welcome that. Strenuous efforts in crime prevention were begun by my predecessor, my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan). Of course, that work had been going on before but he placed new emphasis on it and put new resources into it. Since then, we have always been missionaries in this respect. If the right hon. Member for Gorton and his colleagues are to join in the efforts and activities that are afoot throughout the country, they are welcome. The fact that they have lagged a little behind in the past makes their joining no less welcome now.
    Of course, there is a difference in approach, which is illustrated by the Opposition's motion and the Government's amendment. The main difference between us is not on the need for crime prevention but on the attitudes to public spending in relation to it. I could not understand the point made by the right hon. Member for Gorton. Presumably, he was at the gathering at the weekend at Bishop's Stortford and knows what the instructions are. They are clear— that Labour will tax the very rich, which means those on £27,000 a year, which will yield £3·6 billion. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has told us that that money will be used for just four provisions—pensions, child benefit, long-term unemployment pay and tax allowances for low-paid couples, and nothing else. Opposition spokesmen are enjoined not to promise anything else during the first two years in government. That is the distinction— famous in the Labour party— between the pledge and the lightly given promise. We have pledges, which fall within the £3·6 billion, and lightly given promises, which are the rest of the £24 billion so far promised. The schemes of the right hon. Member for Gorton, including those announced today, clearly fall into the category of the lightly given promises. They will not be undertaken in those two years, although the right hon. Gentleman said something very different today. I do not understand therefore how, after what we have heard about the Labour party's priorities, the right hon. Gentleman can pretend that he is giving priority to crime prevention or to victim support.
    48
    Once again, by pretending to give priority to everything, the Opposition are clearly showing that they give priority to nothing and that they have not thought matters through. One must therefore turn to the past to see where their real priorities are likely to lie in the future. When one considers the disgraceful state in which my predecessors in 1979 found the prisons and the police, it seems unlikely that the type of activities that the right hon. Member for Gorton now praises will find any decent priority in a Labour Government's programme.
    I should like to consider what is being done. I hope that the House will forgive me if I dwell on this, but the main thesis of the right hon. Member for Gorton was that we were doing nothing, except making a few speeches and sermons. I should like to start with the work of the police in crime prevention. I am anxious that this work should be stressed because I am concerned that, in recent weeks, much publicity has been attached to the police and their equipment for use in the last resort if there was a breakdown in public order. It is high time that a little more attention was paid to what the police are doing day by day to prevent crime.
    Police work with young people in schools is obviously crucial in view of the peak age of offending — 15 for boys and 14 for girls. Undoubtedly, it is an advantage to have 43 different local police forces, almost all of which are experimenting and innovating. The Staffordshire scheme for young people — SPACE — occupies some 23,000 secondary school pupils for the whole of August each year in more than 2,500 different activities. The signs are that it has contributed to a decrease in offending by youngsters. The West Midlands police have initiated an ambitious project in the Ladywood and Handsworth district of Birmingham — the Ladworth project — in which local agencies work together with community groups to provide recreation and employment opportunities for young people in the inner city.
    The Lancashire police run a scheme in the Lake District, which is fully used most weekends of the year in youth activities. The Cumbria and Northamptonshire police forces run more specifically work-orientated schemes to give young people some work experience with the police. The Leicestershire police, whom I recently visited, hope to mount an even more ambitious scheme in the Highfields area of Leicester to give selected youngsters a chance to try a variety of jobs in co-operation with local police.
    Those are all police schemes which show how foolish it is to argue that the police neglect this aspect and are interested only in equipment and new powers.
    Mr. Tam Dalyell: Does the right hon. Gentleman recollect that I have written to him about forensic science problems and the advantage of developing forensic science, especially under Brian Caddy of the university of Strathclyde? Is there not a case for having a forensic department to which defence counsel can turn for second opinions, in view of all the difficulties of the Birmingham six?
    Mr. Hurd: Perhaps my hon. Friend the Minister of State could deal with that point in detail. Although it is a serious suggestion, it does not flow immediately from the points I was developing. As regards the Birmingham six, the hon. Gentleman, who takes a serious interest in this

    49
    matter, knows that I am deliberately taking time to examine whether there is fresh evidence in Mr. Mullins' book.
    I shall move now to the activity of other Government agencies involved in the subject which the Opposition chose for their motion and about which the right hon. Member for Gorton said that nothing was being done. We have a programme of measures designed to improve the security of owner — occupiers and tenants. Some of those measures are financial. The Department of the Environment has set aside £50 million of housing capital resources in this financial year for allocation by the urban housing renewal unit to run-down local authority estates. In the 33 cases approved to date, one third of the resources has been spent on crime prevention measures—exactly the sort of point about which the Opposition talk.
    The right hon. Member for Gorton may not know about the priority estates programme of the Department of the Environment but it is relevant to his points. That programme is working on measures which help to reduce crime, with special emphasis on the participation of residents — another point made by the right hon. Gentleman. Many of the projects funded through the urban programme contribute to crime prevention. Last year, some £6 million was spent on projects directly concerned with crime. Community programmes involve a substantial commitment of resources to crime prevention projects on housing estates.
    Under the national initiative, announced earlier this year, more than 5,000 community programme cases have been approved for crime prevention work. These resources represent a substantial Government investment in safer estates. We are also considering ways of improving the design of estates to deter crime. The Department of the Environment is commissioning consultants to prepare a handbook on improving dwellings and the environmental features of local authority estates with special attention being paid to security and crime prevention. I do not rule out the possibility of developing further action along those lines.
    I turn to one aspect which I do not think the right hon. Member for Gorton mentioned but which is crucial in effective crime prevention — the neighbourhood watch scheme. There are now 14,500 schemes in England and Wales—an increase of more than 75 per cent. over the past six months. Properly designed neighbourhood watch schemes can reduce local crime, improve relations between police and the community, reduce the fear of crime—about which the right hon. Member for Gorton is quite right — and provide a new impetus for neighbours to meet and work together.
    I suppose, following on from the analysis of the right hon. Member for Gorton, that the right hon. Gentleman is in favour of all that. But what is happening, for example, in Manchester under the new leadership of the city council? Far from forging the type of efforts about which the right hon. Member for Gorton made a speech, it is deliberately holding them back. It is making it more difficult for residents to come together with the police to make their streets "safer and more secure", to quote the right hon. Gentleman's objective.
    The right hon. Member for Gorton says that more money should be given to local authorities for this purpose. If more money were given to Manchester city council, what would it spend it on? I bet that it would spend the money on producing even glossier and more
    50
    vicious editions of its disgraceful publication "Police Watch". I say that plucking just one example from the several others that could be used, and there are others in London. If the Labour party is to be taken seriously in the attitude that it has expressed today, it will have to do something to restrain and reverse the policies of those Labour authorities—fortunately, a minority—which are taking exactly the opposite line to that taken by the Labour Front Bench.
    We intend to maintain and boost the momentum behind the neighbourhood watch schemes and we shall be launching a new national magazine in co-operation with the private sector. [HON. MEMBERS: "Will it be a glossy one?"] The difference between what we propose and the behaviour of Manchester city council is that we are helping communities to work with the police to protect their property, whereas Manchester city council is undermining those efforts.
    To continue with the list of actions that we are taking, no doubt the right hon. Gentleman's hon. Friends have told him of the five local schemes that the Home Office is now operating in Swansea, Wellingborough, Croydon, Tyneside and Bolton. A two-week autocrime campaign in Wellingborough concentrating on the major car parks produced a 10 per cent. reduction in thefts of cars in May compared with the same period last year and compared with a 5½ per cent. increase for the Wellingborough subdivision as a whole. Autocrime in the car parks targeted was halved. That is just one small practical example of what is being done through our crime prevention programmes.
    The two seminars, which the right hon. Gentleman lightly mocked but which I am glad to say were fully supported by the trade union movement, have produced a whole series of new ventures for preventing crime m both the public sector and the private sector. I hope that we shall be making further announcements about actual decisions in the coming months, but they cover insurance, increased protection against residential burglary and increased security in the design of cars.
    The right hon. Gentleman was quite correct to stress that victim support is crucial and that for too long victims have been the forgotten parties in the criminal justice system. The Government have accepted the need to provide the movement with some support from public funds and we have trebled the grant to the National Association of Victims Support Schemes in the past two years, enabling it to increase its staff, to move to larger premises and substantially to expand its work. Contrary to the impression given by the right hon. Gentleman, a survey of 200 local schemes in 1985–86 showed that half were receiving grants from central Government totalling £750,000. This was by far the main source of funds for local schemes, the same 200 receiving £250,000 from local authorities and only £88,000 from private sources such as trusts and charities and their own fund-raising initiatives. There is great scope for expanding and further varying the sources of income for victim support schemes. Nevertheless, this year we are for the first time providing some direct funding for local schemes. We have provided £136,000 to establish a contingency fund administered by the national association to help hard-pressed schemes and 68 schemes have already received grants from that source, which, according to the national association, will serve as a lifeline for many schemes.

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    The first schemes of this kind were established in Bristol in 1974. There were 30 local schemes when we came to office. There are now 300. In 1985–86, nearly 4,000 trained volunteers dealt with 185,000 victims, mostly referred to them by the police — a sixfold increase. I thoroughly agree with the right hon. Gentleman that we should put emphasis on this aspect and we are doing so in this and several other ways. As a further development, we propose to introduce provisions next Session requiring the courts either to make a compensation order when sentencing an offender or to give specific reasons for not doing so, thus shifting the onus and putting a responsibility on the court to make an order or to explain why it is not doing so. We are preparing comprehensive guidelines to help the courts to assess realistic amounts of compensation in personal injury cases.
    I hope that I have said enough to show that in the two areas singled out by the Opposition—crime prevention and victim support — major efforts are already in progress, employing not just the resources of the Home Office but the efforts of police, local authorities and a wide range of Government agencies. This should be a national effort and if today's debate, despite the right hon. Gentleman's perverse speech, means that the Opposition now intend to be constructive and put behind them the kind of activity of which I complained in relation to Manchester city council, I welcome them aboard.
    In our last debate on these matters I had a rather odd experience. I was chided by the right hon. Gentleman for uttering homilies, but later in his speech he started talking about the need for partnership. For a moment I genuinely thought that he was quoting a speech of mine that I had forgotten so as to mock me further, but he then sat down—having used exactly the type of formulation about partnership that I had used. The Labour party has a long way to go before its credentials in this area are established, but if the right hon. Gentleman and his hon. Friends wish to join in a national effort, despite the perversity of their specific proposals, I believe that that will be helpful.
    Mr. James Hill: I am grateful to my right hon. Friend for his written answer to my question about the neighbourhood watch scheme in Southampton. I am especially sad that only one of the city's 15 wards has such a scheme and that only four members of the police are currently organising such schemes. Does my right hon. Friend think that there could be a little more publicity and television time devoted to the scheme, as I understand that there is a great deal of literature at the police stations just waiting for people to come forward?
    Mr. Hurd: I shall certainly look at the position in Southampton. I think that many cities, having watched the rapid growth of the schemes elsewhere, will now be looking to their laurels to ensure that they compete. The material is certainly readily available from the Home Office. My hon. Friend the Minister of State may be able to say a little more about Southampton when he winds up, following that useful intervention which illustrates the impetus behind the whole effort. I hope that today's debate will add to that impetus.
    5.27 pm
    Mr. D. N. Campbell-Savours: My right hon. Friend the Member for Manchester, Gorton (Mr.
    52
    Kaufman) referred to a black cloud of lawlessness hanging over the country. The assumption is that crime stems from unemployment, the fragmentation of the family, the glorification of violence on television and, in my view, the example set by the state. I wish to draw attention to one example of that.
    On 7 June on the George Negus interview programme on Radio 2UE in Sydney and Radio 3AK in Melbourne, Australia, Mr. Richard Victor Hall made a number of statements about a book by Mr. Peter Wright, a former employee of M15, referring to lawlessness and law breaking in Britain. According to the Australian media, Mr. Peter Wright claimed that M15 had attempted to bug the French and West German embassies in London, placed microphones behind the cipher machines in the Greek and Indonesian embassies, bugged diplomatic conferences at Lancaster house in the 1950s and 1960s and the Zimbabwe independence negotiations in 1979. Mr. Wright alleges that M15 entered Russian consulates abroad, plotted against Mr. Harold Wilson during his 1974–76 premiership and diverted resources to investigate Left-wing groups in Britain instead of setting its own house in order. He is also believed to have details of a plot to assassinate President Nasser during the Suez crisis and details of meetings between officials from American intelligence agencies, the National Security Agency, the CIA, the FBI, GCHQ and M15. He alleges that M15 was involved in the testing of poison on sheep and in switching number plates on vehicles in this country. He also alleges Nikita Khrushchev's suite at Claridges was bugged during his visit in the 1950s and refers to the opening of diplomatic bags by M15 and other forms of law breaking in Britain.
    Mr. Wright, who left M15 in 1976 and lives in Tasmania, cannot be prosecuted under the Official Secrets Act. Instead, our Government are seeking an injunction to prevent Heinemann's Australian subsidiary from publishing his memoirs by bringing a civil suit for breach of confidence. Sir Robert Armstrong, the Cabinet Secretary, has argued in an affidavit that publication would lose confidence in M15's ability to protect classified information. The Government have refused to tell Mr. Wright's lawyers which extract of the memoirs he has written they believe should remain confidential.
    That is law breaking in Britain, and we now see our Government involved in a cover up. The proposition in the Government's amendment, which stands in the Prime Minister's name, is rubbish. The Prime Minister does not believe in containing law and order or in reasonable policies on law and order. She believes that it is right for the state to break the law, and that is why the Attorney-General is using the courts in the way that he is at present. He is hiding the breaking of the law by British civil servants.
    5.31 pm
    Mr. Julian Critchley: We are witnessing a splendid irony. At the same moment as the Shadow Home Secretary discovers crime, the chairman of the Conservative party stumbles across sin. We shall not be short of sermons!
    The relish which the Labour party has brought to the problems of crime—the legacy of the Thatcher years, and so on—is matched only by the relish with which the chairman of the Conservative party upbraids the British

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    people and attacks the "permissive society". It appears that when it comes to crime, it is everyone's fault but our own.
    Faced with the question that from time to time our constituents still put to us — "Why can politicians do nothing about crime?" — we politicians are, for a moment at least, lost for words. The Labour party and the Prince of Wales together are inclined to blame the figures for rising crime on rising unemployment, especially among young people. Who am I to quarrel with the Prince of Wales? There is a good deal in that argument. On the other hand, the chairman of the Conservative party goes into the pulpit and blames the so-called permissive society. Working on the assumption that the Conservative party needs all the friends that it can get, he is enlisting the so-called moral majority—salvationists who are no longer interested in the next world, only in this one. May God preserve us from them!
    We all know only too well how the argument runs. The moralists say that rising crime is due to kids staying up late at night and watching the telly; to the BBC for showing so much sex and violence; to easier divorce; to married women going out to work; to the fact that homosexual behaviour between adults is no longer a criminal offence; to the fact that a play in the West End is no longer censored; and to the fact that robbers are no longer flogged and murderers no longer swing.
    That is nonsense, or worse. It is worse because, as far as I know, the Conservative party is not committed to doing anything about it. Conservatives are not pledged in any manifesto to reverse any of the social legislation that has been passed by this House over the last 15 to 20 years—in which case it is hypocritical as well. However, it is well known that humbug is the essential lubricant of life—certainly of our life in this place.
    There is in fact an answer to the question that our constituents are for ever asking — "What can the politicians do about rising crime?". It is quite simple. We should increase the price of drink. I beg of hon. Members to stay with me. I have no wish to lose all my friends. Let me explain. In 1946, notifiable offences against the person in England and Wales were 4,062, and the real cost of a bottle of whisky at 1985 prices was £16·30. By 1956, under Sir Anthony Eden, the real cost of a bottle of whisky had fallen to £14·60 and violent crime figures had risen to nearly 8,000. I beg hon. Members to stay with me because the story gets better.
    In 1961, in the golden days of Lord Stockton, violent crime rose to 15,000, and by 1965, under Lord Wilson, it went up to nearly 30,000. In 1970, under my right hon. Friend the Member for Bexley and Sidcup (Mr. Heath) —the old Pretender—the real cost of the hard stuff had fallen to £12·60 and violent crime against the person had risen to 41,000. By 1975, under the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) and Lord Wilson, the cost of a bottle of whisky had fallen to £9·15, and violent crime soared to 71,000. By 1980, the first year of the "counter revolution," the cost of a bottle of Scotch had fallen to £7·70 and the figures for violent crime rose to 97,000. In 1985, whisky still cost £7·70 and violent crime rose to a record 119,000 offences.
    I have left the Scots until last. If anything, they have been prepared to take an even more handsome advantage of a 60 per cent. fall in the real cost of whisky over the past 40 years— patriots to a man and woman.
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    I am no statistician. I know the old joke about statistics, drunks and lamp-posts. But there must be a relationship between drink—particularly the hard stuff—and, violent crime. Ask David Lloyd George or, if he cannot be found, John Grigg. Ask the Russians, the Swedes, the Icelanders or the Finns. Ask anyone. If the Government are really concerned to do something about the remorseless rise in crime—this applies equally to the Opposition—why not increase the tax on booze? I appeal to you, Mr. Deputy Speaker: was not sobriety a Victorian virtue?
    5.38 pm
    Mr. Alex Carlile: During the first 55 minutes of the debate I was reminded of one of the favourite stories of my children—how the elephant got his trunk. But in the version to which we listened it was difficult to ascertain who was the elephant and who was the crocodile.
    On the one hand, the Home Secretary claimed at least some measure of success in his criminal justice policy and the fight against crime which he said the Government were putting up. However, we heard ample evidence of the failure of that policy, in the waterfall of correct statistics that were produced by the right hon. Member for Manchester, Gorton (Mr. Kaufman).
    On the other hand, the right hon. Member for Gorton claimed that the Labour party had the recipe for preventing crime; but that comes from a party whose credibility is perhaps not of the highest in this area. It comes from a party that is apparently prepared to palliate the consequences of criminal conviction for miners who were convicted of criminal offences—some of violence—against individuals. It comes from a party that in some areas is not prepared to allow often the most popular visitor—the uniformed police constable who comes as a crime prevention officer—into primary schools. It comes from a party that is not prepared to give the sort of encouragement to responsible neighbourhood watch schemes — and, of course, they need careful control—that it ought to be giving. It comes from a party that even in the city that includes the constituency of the right hon. Member for Gorton—and I saw a copy of this waved at the right hon. Gentleman at a fringe meeting at the Police Federation conference to which he referred — has been issuing a newsletter to the population which frequently contains clear attacks upon the police.
    Both the Government and the Labour party seem to have lost sight of the fundamental priorities of which we should be speaking when we discuss the prevention of crime. I hope that the whole House will agree that the priorities of a successful criminal justice and crime prevention policy within a fair system of legal checks and balances are, first, to ensure that people can live in their homes without the fear of those homes being ravaged and looted by burglars and vandals and, secondly, to ensure that people, whether they be young or old, male or female, black or white, can walk the streets without the fear of their peace being disturbed. As we approach the conclusion of the debate, we should be able to show the public that politicians regard those as the fundamental priorities and that they are looking for solutions which will enable those priorities to succeed.
    The Labour party motion is commendable so far as it goes. I particularly congratulate the right hon. Member for Gorton on his reference to victim support schemes. I agreed with him wholeheartedly when he criticised the

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    Government for talking humbug in pretending that they had given proper support to those schemes. But the right hon. Gentleman presented the House with a bizzare form of salesmanship of double glazing. In his society of closed-circuit televisions in every public place, of double-glazed houses so that it is harder to break windows, of smash-proof windows, of more caretakers, of strengthened car locks and more cars with alarms, what will the Labour party do to attack the underlying causes of crime?
    It is not good enough and it will not satisfy the public to talk about a policy which tinkers around the superficialities of making homes and cars more secure without addressing the more fundamental realities of the crime problem and thus of crime prevention. The Labour party motion does not refer to that. The proposals made by the Labour party, albeit rather gift-wrapped by the right hon. Gentleman, but even in their unwrapped form, obviously go some way towards easing the burden on police officers, although it is questionable whether the programme can be delivered economically. But those proposals do nothing to improve the quality and nature of the attack which we must make on crime.
    It is far more important for us to look at the structure, organisation, and accountability of the police to ascertain whether, through promoting and increasing the efficiency of our police forces, we can tackle the wave of crime of which the right hon. Gentleman spoke. We could swamp the country with police officers, but that would be unacceptable. We must strike a balance between increasing the numbers of police officers on the streets and overpolicing with consequent reduction of the quality of our police forces.
    When we compare the sort of proposals made by the Labour party in its motion with what can be done through conventional policing and enhancing the efficiency of police forces, let us not forget the cost-effectiveness of the ordinary bobby. If all a police constable on the beat achieves in one year is to keep one person out of prison for one year, he has paid his salary and is cost-effective. The fight against crime is being lost because we are not making use of our police officers cost effectively and because we do not have sufficient police officers where they are needed. The Home Secretary shakes his head, but he will know that if the Thames Valley police area, which includes his constituency of Witney, were to have sufficient police officers to meet the average policing rate for England and Wales, its manpower would have to be increased by 25 per cent. The Home Secretary knows that fact, and he knows that the chief constable of the Thames Valley police believes that he should be given more officers in order to be able to mount proper squads of detectives and a full effort in the prevention of crime. It is impossible to understand the Home Secretary's reasons for depriving Thames Valley police of the manpower that it needs merely to be an average sized police force in proportion to the population of its enormous area.
    The fight against crime is being lost both in the number of crimes and in the seriousness of the crimes committed. I shall not weary the House by repeating the statistics given by the right hon. Member for Gorton. At times some forces claim an improvement in clear-up rates, or at least evidence of improvement. The Home Secretary will be aware that in The Observer of 13 July 1986 certain allegations were made by PC Ronald Walker of the Kent
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    constabulary about the genuineness of those clear-up rates at least for part of Kent. He will be aware that that was not a new complaint but was already under investigation. I hope that he will agree that it is in the public interest, and certainly in the interests of the police, that genuine clear-up rates should always be available. I trust that he will take steps to ensure that guidelines are issued to police forces so that there is some uniformity in the way in which clear-up rates are prepared, and so that the public and the House are not misled into believing that the police are having greater success in clearing up crime than is the case. I refer in particular to the so-called system of write-offs, in which statements are prepared either by or purporting to be by people in prison convicted of crimes, who accept that they committed many other crimes.
    In the amendment in the name of the Prime Minister there is yet another claim by the Government which suggests that the Conservative party has some sort of proprietary interest in law and order, and that it is the only party which is remotely capable of delivering law and order. We have already heard the statistics. It is particularly alarming to see a reference in the amendment to
    "the Government's commitment to pursuing an honest, vigorous and coherent policy in the fight against crime."
    Does the Home Secretary believe that the 25 per cent. undermanning in the Thames Valley police is evidence of vigour?
    Mr. Hurd: The hon. and learned Gentleman is falling into the increasingly prevalent trick, or trap, of describing as a cut or deprivation an increase which is somewhat smaller than those concerned would like. He will know that among the increases in police forces announced this year are a 73 post increase for Merseyside, a 50 post increase for Thames Valley, a 40 post increase for Norfolk, a 29 post increase for Warwickshire, and an 18 post increase for Devon and Cornwall. Those are the first results of the further increase, on top of the already massive increase, which we propose for the police forces of England and Wales outside London.
    Mr. Carlile: I am grateful to the right hon. Gentleman for giving those figures. He has reminded the House that for the Thames Valley police force, including his own constituency, 50 extra officers are being allowed this year; but he knows perfectly well that in order for Thames Valley to have the same ratio of police to population as the average police force in England and Wales, he should have given it not 50 but 750 extra police officers this year. I do not believe that the Home Secretary can satisfactorily deny that figure. It is indeed a deprivation. Thames Valley is entitled to the same rate of policing as any other part of the country. It is a deprivation of which there is evidence in other areas. Manchester was quoted earlier as another example.
    Does the Home Secretary suggest that that kind of deprivation is evidence of a commitment to a vigorous policy of crime prevention? Is it really evidence of a coherent policy on crime prevention? Above all, is it honest for the Government to come to the House and say, "We are making all these efforts to prevent crime," but at the same time to hide in the statistics the fact that they are not giving the chief constables, who know how many police officers they need to have just an average sized force, that size of force? That is what is happening in many police forces, including Thames Valley.

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    The reality is that it does not need the right hon. Member for Gorton, the Home Secretary, me, or any other hon. Member to tell the Government what policing is needed. The good British public will tell the Government what policing is needed. Not even the wisdom of Lord Scarman is required to tell the Government what is needed to improve policing and prevent crime.
    If you, Mr. Deputy Speaker, were to ask the public of this country what they believe is needed to improve crime prevention, they would give you the right answer, and it would be along these lines: that it is as important for a member of the public to know who is his local police officer as it is for him to know the name of his newsagent, doctor, milkman and chemist; that it is absolutely vital that there should be restored to the streets of this country something which many people of a generation older than I remember well—the local police officer from the local whole-time or part-time police station, according to the needs of his area; that it is absolutely necessary, not only in the inner cities but in the smaller towns and villages of this country, to ensure that the people can see their police in action — not whizzing past in panda cars but, wherever possible, policing on foot. That is not happening now.
    In their amendment, the Government express support for the police. Of course the Government
    "expresses support for the police in their efforts to build closer links with the community".
    Nobody could doubt the truth of those words in the Government's amendment. However, they do not give the support that the police need
    "in their efforts to build closer links with the community".
    The result is that the morale of the public, as they face increasing crime, and the morale of the police, as they do their best to swim against the tide of increasing crime, is being sapped.
    Connected with all this is the problem of the police authorities. Even those who are on police authorities barely know — indeed, some of them do not know—what are their rights and responsibilities. The system of police authorities is in chaos. I shall not dwell on the Stalker case because we have had plenty of opportunities to raise that issue, but the Manchester police authority quite plainly has not understood the responsibilities placed upon it under section 86 of the Police and Criminal Evidence Act 1984 in relation to Mr. Stalker. However, it is not surprising that it has not understood its responsibilities, because they are almost completely incomprehensible.
    More than 20 years after the last Royal Commission on the police there is a great need to look once again—in a society that has changed so much and, in the context of policing, in a society that has changed so dramatically—at the role and structure of the police and police authorities. What has been said by the two Front Bench spokesmen in the debate is symptomatic of the fact that neither the Government nor the Labour party are going to the root causes of the malaise in the policy towards policing and, to an extent, in the police themselves. They are simply looking at ways of trying to treat the symptoms as quickly as possible, though superficially.
    I ask the Home Secretary to institute a deep and far-ranging, though not a lingering, inquiry into the police along the lines of a Royal Commission. It is quite clear
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    from reading the Scarman report on the Brixton disturbances that there are many aspects of policing that we ought to look at from scratch.
    I should like to make two other brief points to the Home Secretary, which I am sure he will accept are important. The first relates to our prisons. I was pleased to read that slopping out is to end in Wormwood Scrubs prison. I wish that we could say the same about many other prisons where slopping out still takes place. There is an abundance of evidence that savage or insanitary prisons do not prevent crime; they simply harden criminals. We have all heard and read about the Government's prison building programme. However, I ask the Home Secretary to look once again at that programme to ensure, even if he remains committed to building additional spaces into the prison system, which I believe is wrong, that there are far greater and far quicker improvements in local prisons, where many of the insanitary places are to be found, so that soon we may have at least a moderately civilised prison system.
    The other specific point that I wish to mention to he Home Secretary, which I hope that the Minister of State, the hon. Member for Pudsey (Mr. Shaw), will be able to deal with, relates to forensic science services. There was a time when, if the police went to the scene of a crime and wanted to call in forensic, as they called them, forensic came to the scene and took their samples, and within a couple of weeks, at the most, the basics of a forensic report were available for the investigating officers. Those reports could form, and often have formed, the basis of further interviews of suspects.
    One cannot underestimate the importance of forensic evidence in the investigation of a crime. Sometimes it seems to be thought that it is important only in the presentation of the case to the court, but that is not correct. When murders are committed in England and Wales and when the police inevitably have to call for forensic evidence, the fact is that nowadays they are having to wait for weeks and weeks for reports, that forensic inquiries into murder cases and other serious crimes are being stockpiled at the laboratories and that there are insufficient Home Office forensic scientists of sufficient seniority and experience to deal with all the inquiries that are made of them by the police alone.
    I agree wholeheartedly with the hon. Member for Linlithgow (Mr. Dalyell) who believes that forensic science laboratories should be truly independent and fully available to both prosecution and defence. At the moment, those laboratories cannot begin to deal properly with prosecution, let alone defence. This is a scandal, because it is affecting detection rates and thus the prevention of crime. I hope that the Minister will give us some real evidence of the Government's determination to deal with the problem.
    6 pm
    Mr. Mike Woodcock: This debate is of necessity brief, and I shall conform by being as brief as I can in my speech. The debate is about putting people first, and all kinds of people are involved in the judicial process. I share with Opposition Members a great concern about the rise in crime. However, I believe that the Government have done a great deal to strengthen and support the police, to give at least some relief to the victims of crime and to make life more difficult for the offenders.

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    I hope that all of us are concerned about the rise in crime, and more concerned with solving the problem than in scoring political points.
    The administration of justice involves more than the police, the victim and the offender. The police alone cannot prevent crime. They cannot observe every house, factory or shop, or even every motoring offence. They need the help of the public, and the success of the various home watch schemes demonstrates the potential pay-off. Justice requires the active co-operation of the public, and that demands a public that is ready and willing to help, not one that prefers to look the other way. A great deal more could be done to secure such co-operation.
    I have five simple suggestions about what to do to secure more co-operation from the general public in the fight against crime. The first is the way in which we treat our civilian witnesses in the courts. Many hon. Members may have been witnesses in criminal or even civil cases and may have had experience of the treatment that we hand out to those who are giving their time to help the judicial process. Usually, witnesses are told to arrive at a court at 10 o'clock in the morning, although they may not be required by the court for hours. Often, there are no decent facilities in which to wait. They share over-crowded waiting rooms with offenders, chain smokers, and screaming children. There is nowhere comfortable to sit and coffee or tea is not made available. There is little information, even about when they will be required to give evidence to the court.
    After they have waited for so long, cases are brought on largely for the convenience of the court and the professional lawyers, with little or no regard for the convenience of those who are giving their time in the fight against crime. If such witnesses are unfortunate enough to be there at lunchtime, they find that, while the prisoners go back to their cells and are given a free meal, the police retire to their staff canteens and the lawyers go back to their offices, they are left behind to fend for themselves, usually without the simplest form of guidance on where they can obtain a quick meal.
    Eventually, when witnesses are called, many of them frightened, even petrified, by the experience of giving evidence, they face rigorous cross-examination, which often makes them feel that they are the criminals rather than those who are being tried. At the end, when they put in a relatively modest claim for expenses, which almost certainly will not cover their full costs, again they may be faced with cross-examination and made to feel that they are claiming something to which they are not entitled. When that ordeal is over, as Mr. Average Citizen walks out of the court, he says, "Never again. The next time I see a crime or suspicious circumstances, I shall look the other way." Witnesses in our judicial system need to feel that they are valued, well-treated and according society a privilege. All too often, the feelings engendered are the reverse.
    Secondly, the public needs to have much more confidence in punishments fitting the crime. Too often offenders walk away from our courts laughing about the leniency of the sentences that are handed out. After 15 years as a magistrate, I can confidently say that this is not always the fault of the courts. Magistrates need much more freedom in selecting appropriate punishments. The short, sharp, shock treatment of detention centres for
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    young offenders needs to be used much earlier in the hierarchy of punishment. Community service, which is excellent in concept, needs much more rigorous supervision, and, if necessary, administration by police rather than the probation service, which is often more reluctant to apply proper standards of discipline. The Home Office may believe that community service orders are alternatives to custodial sentences, but the number of hours recommended and the supervision of these schemes mean that they are no effective alternative.
    Probation orders need to be more tightly supervised by a probation service that recognises that, while help is the substance of probation orders, punishment is also important. We need to move much further towards offenders paying the full cost of their crimes, particularly with vandalism, with parents being responsible for the full cost of restitution for damage by children.
    Thirdly, we need, as many people have suggested, independent investigation of serious complaints against the police. I have nothing but admiration for our excellent police service. It is deservedly the envy of the world, but where corruption is involved, the public needs to have confidence that complaints are being independently investigated. Justice must be seen to be done, and that is as true in the police force as it is in the wider community.
    Sir Eldon Griffiths: Does my hon. Friend accept that the independent Police Complaints Authority is already able to oversee any investigation of any crime alleged against any police officer, and must be satisfied that the investigation is being conducted properly or else it can order another one?
    Mr. Woodcock: I understand that that is the case. However, my hon. Friend knows that that process is not seen to be independent by members of the public. There is a great deal of support within the police force for an independent investigation system.
    Mr. Alex Carlile: Is the hon. Gentleman aware that the Police Federation — which I thought that the hon. Member for Bury St. Edmunds represented in the House —is in favour of his views?
    Mr. Woodcock: I was not aware of that fact, but I am sure that my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) will make himself aware of that fact, if he was not already so aware. However, time is short and I do not want this to turn into a debate about the pros and cons of the investigation of police complaints.
    My fourth point is that I believe that there should be a separation of police traffic duties from other duties. Nothing alienates the public more from the police than their involvement in minor traffic offences and nothing alienates the public from the courts more than the perceived disparity in fines that are handed out for minor motoring offences and those handed out for what the public perceives as the much more serious offences of dishonesty, violence and vandalism. I do not know how that division could be brought about, but the Home Secretary should examine this carefully, because it would greatly raise the standing of the police in the eyes of the public.
    Fifthly, there is a need for much better feedback from the police to those assisting and those reporting crime. Too often offences are reported by the public, who gain the impression, probably wrongly, that the police are not

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    interested, particularly in cases of neighbourhood disputes, vandalism and nuisance. When the police take further action, there is a lack of information on what action has been taken. A short letter to those who report crimes, after the event, telling them the outcome of the investigations and thanking them for their help would be a simple matter of good public relations.
    Our judicial system is the envy of the world. Our police force is second to none. But the whole judicial process demands the public's active co-operation. Much more must be done to assure the public that their help is needed and valued, and, perhaps even more importantly, that, if they give it, they will be treated with the consideration and respect that is due to them.
    Several Hon. Members rose—
    Mr. Deputy Speaker: Order. It may help the House if I say that the first Front-Bench speaker hopes to catch my eye at 6.40 pm.
    6.10 pm
    Mr. Tam Dalyell: I happened to believe that the Home Secretary, the Minister of State and senior officials at the Home Office take the difficult problems of the Birmingham six extremely seriously and conscientiously. Can they say when they hope to give any response to Chris Mullin's well thought out case?
    I and others have been asking questions about the forensic side of that story and about Dr. Frank Skuse. There is also the basic question whether the defence should have access to forensic science advice and expertise. I agree with the hon. and learned Member for Montgomery (Mr. Carlile) in asking for a comment, particularly in the light of the constructive proposals put forward by Dr. Brian Caddy and the University of Strathclyde for a centre in Glasgow that would meet some of these requirements. If no response is made during questions to the Home Office, when is there likely to be one?
    Some of us would be interested to hear the Home Office's view not only on the costs of the suggestions made by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) but on the many savings that could result if some of them were put into practice. We often forget that the cost of crime is simply enormous.
    I turn to a case that involved the knowing waste of police time. Detective Superintendent Ron Hardy and Detective Sergeant Mike Ashdown were dispatched to the West Indies to try to find out about the log book of HMS Conqueror at the time of the Ponting trial. For the sake of conciseness, I refer to the Official Report for 24 October 1985. I asked the Attorney-General:
    "what was the cost of Detective Superintendent Hardy's visit to the West Indies with a colleague on the investigation relating to the loss of HMS Conqueror's log book." — [Official Report, 24 October 1985; Vol. 84, c. 191.]
    The Solicitor-General replied that it was £6,940·82. That might have been justified if the Government had not known full well that the man whom they were investigating had left the Navy in July 1982, and if the then Secretary of State for Defence had not said, in reply to the hon. Member for Vale of Glamorgan (Sir R. Gower):
    "I regret to announce that our inquiries so far have failed to locate the missing logs or to identify a proven explanation for their disappearance. It is clear that the logs were compiled and probably remained on board the submarine until October or November 1982."—[Official Report, 30 November 1984; Vol. 68, c. 593.]
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    The logs were all bound so they could not possibly have been missing until September 1982 at the very earliest. I happen to believe that no log went missing from that submarine, but the point is that the Ministry of Defence knew that the man whom it was investigating, the supplies officer of HMS Conqueror, Lieutenant Mahendra Sethia, had left the Navy in July 1982. In September 1982 he was known to be sailing round the coast of Europe in a yacht. Will the Home Office and those responsible for the police find out who authorised such a visit? Those policemen were knowingly sent on a wild-goose chase. I shall not detain the House by saying why the Government, or certain Ministers, wanted that. I merely want to know on what authority Detective Superintendent Hardy and Detective Sergeant Mike Ashdown went to the West Indies. Was it direct ministerial authority?
    My last point will take a little longer. In any discussion of the fight against crime it is common ground that Ministers must be seen to be beyond reproach. Charges have been made against the Attorney-General, the Government chief Law Officer, that he knew that the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) had authorised the leak of a letter from the Solicitor-General even before the inquiry had been formally set up. I shall quote from "The Attorney General, Politics and the Public Interest" by Professor John Edwards. Professor Edwards said:
    "The Attorney General, whoever he may be, is not only the legal adviser to the Crown and to the government. He is also a servant of this House. It is, from time to time, his duty to advise the House on legal matters—a duty going beyond his responsibility to this government and the Crown".
    The charges are said to emanate from a Select Committee. I regard the Attorney-General as an honourable man who has given truthful answers. In fairness to him, I should be interested to know why the Select Committee did riot call him if it contemplated making such accusations—
    Mr. Deputy Speaker: Order. The hon. Gentleman is going into details that have nothing to do with the motion before us.
    Mr. Dalyell: The problem is that such charges or slurs cannot be allowed to rest in limbo when a senior Minister is involved. I say—
    Mr. Deputy Speaker: Order. That may be so, but this is not the time for going into details on the work of the Select Committee or on the charges that may have been made.
    Mr. Dalyell: In that case, I have a question about the circumstances in which indemnity is granted. I speak as the Member of Parliament who, rightly or wrongly, named Collette Bowe in the House. The fact is that indemnity was given before 16 January. It may have been given on 13, 14 or 15 January, but it was certainly before 16 January. On 30 January the Attorney-General said:
    "On 22 January, when I was given a summary shortly before receiving the report of the inquiry carried out by the head of the Civil Service." — [Official Report, 30 January 1986; Vol. 90, c. 586.]
    That is when the right hon. and learned Gentleman was first informed of the direct involvement of the then Secretary of State for Trade and Industry, the right hon. and learned Member for Richmond, Yorks.
    In what circumstances does an Attorney-General give indemnity to civil servants, however senior, when Ministers, however exhalted, are involved? It seems

    63
    extraordinary that indemnity was given by a senior Minister when he apparently did not know the details of the circumstances in which he gave it. Yet the right hon. and learned Gentleman told the House that it was not until 22 January that he knew the full circumstances. I happen to think that when I questioned the Attorney-General last Monday about whether he was consulted about the—
    Mr. Deputy Speaker: Order. Once again the hon. Gentleman is going into details that are not relevant to the motion about crime which is before us. He can indulge in generalities, but he should not go into such detail.
    Mr. Dalyell: This is part of the trouble. When a Member of Parliament wants to ask a senior Law Officer to make a statement to the House that involves his honour, he had better be very clear about the details before doing so. Consequently, I do not apologise for going into the details. In the light of all this, there is a solemn obligation on the Attorney-General to give his side of the story in a statement before we go into recess. I have never meant anything more than that which I have just said. I do not doubt that there is a side to the story that he can give. I do not think that he was consulted, and referring to last Monday's question—
    Mr. Deputy Speaker: Order. The hon. Gentleman persists in pursuing the detail. There are ample opportunities in the House for raising details at Question Time and so on, but this is not the occasion for the hon. Gentleman to pursue this matter.
    Mr. Dalyell: I shall have opportunities, and I look forward to making use of them.
    6.20 pm
    Mr. John Wheeler: The hon. Baronet and Member for Linlithgow (Mr. Dalyell) will appreciate that I cannot follow his comments but I shall speak about the Opposition motion and the Government amendment. When I first read the Opposition motion I was much encouraged because there seemed to be in all parts of the House a genuine commitment towards the objective of crime prevention.
    The Opposition motion refers to a crime prevention programme, crime prevention grants, a safe estates programme and victim support schemes. The Government are already pursuing these objectives. Since the 1970s the potential for crime prevention has become increasingly apparent, especially to the Home Office, and in 1983 my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) set up the crime prevention unit which is enthusiastically supported by my right hon. Friend the present Home Secretary.
    The contribution towards crime prevention in various and necessary forms has been extensive. The Department of the Environment is making £50 million available, much of it through the run-down and priority estates programme. The Manpower Services Commission is making £42 million available for various initiatives in the field of crime prevention measures. That is welcome and important because, as the House knows, 95 per cent. of crime relates to property and is controllable, if not preventable, by the interaction of local authorities, the community and the police working together.
    The plausibility of the Opposition comes into question when one examines the activities of the Labour party
    64
    outside the House. The right hon. Member for Manchester, Gorton (Mr. Kaufman) has left the Chamber. He does not want to hear this or to answer the accusations that I shall make. It is extraordinary that his own local authority in the city of Manchester, which is not responsible for the police, should be so against the police service that it spends large sums of ratepayers' money on anti-police campaigns. It is against the creation of police neighbourhood watch schemes that are designed to prevent crime. Why is it that in recent years the Labour party in London has spent million of pounds on antipolice propaganda? Why do many of the London boroughs still spend large sums of money on the publication of literature against the police and do not encourage them to police council estates or to visit local authority schools?
    If the Opposition motion is to have any credibility, the Opposition must address themselves to those points. They cannot escape their responsibilities, and equally if they want to see, as they suggest in their motion, an easement of pressure on the police so that they can be deployed to help the community they should say to their own supporters that the resources of the police should not have to be used at places like Wapping and should not have had to be used during the miners' dispute or today in demonstrations. The Opposition cannot have it both ways and those points must be considered in some detail and answered.
    The Government have a remarkable record on the prevention of crime. That record is being sustained and increasingly the fruits are being seen. Because of the work done by and through the Department of the Environment and by many local authorities, we have seen a transformation in some of our inner city estates. In my own city of Westminster the local housing department has removed walkways and has created blocks of flats as individual homes. It has provided gardens and has cut off blocks of flats from the general neighbourhood. As a result, it is able to report a dramatic downturn in property crime such as residential burglaries. In some instances crime has been eliminated. If it can be done in the city of Westminster and elsewhere in London through the priority estate schemes, some of them in Labour boroughs, that clearly must be the way forward. Allied to that is the need to ensure that the local authority properly manages its estate. It must collect the rents and not allow arrears to accumulate, giving the impression that lawlessness is acceptable. The money must be collected so that there can be a proper maintenance and caretaker service. Where local authorities do that there is a marked downturn in crime and that benefits the community. If the Opposition believe in crime prevention, they must say to the local authorities that are Labour-controlled that this is the way forward.
    The House will recall that in the Criminal Justice Act 1982 the centuries-old priority for fines to be paid by the courts to the Crown in the first instance was reversed and priority was placed upon the money collected from offenders being used in favour of victims through orders that were given absolute priority. In that instance the Government reversed the centuries-old tradition and they have also supported the National Association of Victims Support Schemes with fairly generous funding. We would all like to see more being done, but we do not want to see another form of bureaucracy being created. I urge upon my right hon. Friend the need to look at the way in which

    65
    the head office of the association makes its disbursements to ensure that we do not promote bureaucracy but provide adequate funding to ensure that in the key inner city areas such schemes can be created.
    I also welcome the news about the neighbourhood watch schemes. They are an undoubted success story and are to be further encouraged by the availability of a neighbourhood watch newspaper. That must be good news.
    Autocrime makes up some 30 per cent. of all crime in Britain. The Society of Motor Manufacturers and Traders is working with the Home Office to improve the design of motor vehicles to design out crime and that must be the way forward, just as the steering column lock that was introduced in the 1960s contributed substantially to the reduction in autocrime. It is via such strategies that we shall tackle that great block of crime.
    I find it curious that in their statements the Opposition should ignore their own commitment to repeal the Police and Criminal Evidence Act 1984. We ought to know what the Opposition will replace it with because that Act also provides for crime prevention and sets out the police powers throughout England and Wales. What is to be done about the prevention of terrorism if the Opposition succeed in their ambition to repeal the Prevention of Terrorism (Temporary Provisions) Act 1984? That Act makes a major contribution to the prevention of crime of serious violence.
    All those questions remain to be answered and if the Opposition motion is to be credible, they will have to deal with those points, I hope when their spokesman winds up. The way forward is through the crime prevention strategies of the Government and I have no hesitation in supporting the Government amendment.
    6.29 pm
    Mr. Chris Smith: I apologise for not being here at the beginning of the debate, but I am acutely conscious of the importance of the subject and I am grateful for the opportunity to speak in the debate.
    Earlier this year, the London borough of Islington carried out a comprehensive study of about 2,000 households in its area. The results were published in preliminary form some months ago and are due to be published next month as a book, to which my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) has provided a preface.
    The results of that survey demonstrate clearly how important crime and the fear of crime are to many thousands of people in my constituency. They showed, for example, that about 70 per cent. of the population of my constituency regard crime as a problem second only in the scale of problems to unemployment — 87 per cent. of people said that unemployment was the worst problem. That shows how seriously people take the problem of crime in their areas.
    Here I must take issue with the hon. and learned Member for Montgomery (Mr. Carlile), who criticised the Labour party and said that we would treat the symptoms, not the underlying causes. I listened carefully to his speech to see whether it contained anything about the underlying causes, and of course it did not. He mentioned only one of the symptoms—the different forms of policing. I shall return to that in a moment, because it is an important point. It ill-behoves him to criticise either of the two other
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    parties which participated in this debate for not addressing the underlying causes when he put forward nothing that would tackle the underlying causes of crime and the genuine fear of crime among millions of people.
    One answer to the problem of crime is good policing. Indeed, it is the only answer that the Government give. But the police must have, above all, the confidence of the community that they serve because that is the key to effective policing. In my constituency, the tenants on many estates meet their neighbourhood police officers arid members and officers of the local authority on a close arid regular basis to work out how their areas should be policed and what should happen to their estates to improve policing in the area.
    The hon. Member for Westminster, North (Mr. Wheeler) criticised Labour-controlled local authorities. I would have accepted that criticism readily had he, in the same breath, praised Labour-controlled local authorities such as the one that I represent, which has sat down with the police, wished to work closely with the police, invited the police on to the council estates and engineered the close co-operation that can lead to good policing. If that credit is given, perhaps we can have a more effective and constructive dialogue about the way in which local authorities and communities interact with the police in their areas.
    However, when discussing crime, we must talk about much more than policing. Even more important than policing, which tries to deter and to catch criminals after the event, is crime prevention. During the past seven years, the Government have let the country down badly on crime prevention. No endless series of seminars at 10 Downing street will make up for the fact that, through the withdrawal of rate support grant, the operation of rate capping and the savage reductions in housing expenditure which the Government have inflicted on Britain, the ability of local authorities and of the agencies in the areas where crime prevention is desperately needed to carry out proper, full crime prevention measures has been destroyed.
    The hon. Member for Westminster, North mentioned the improvements on some estates in his area. Of course, some local authorities of all political colours have made valiant efforts to improve conditions, including the provision of better lighting, the removal of dark corners and better security on the estates. But most local authorities have been hampered by the withdrawal of funds by the Government. During the past seven years, the Government have increased public expenditure on the forces of control after the event—the police, the judicial system and the prisons—by about 30 per cent. in real terms. In the same period, they reduced expenditure on housing by 70 per cent. in real terms. The Government's priorities are completely wrong.
    To tackle the root causes of the crime wave which so many people fear and have experienced will mean tackling the deprivation, poverty and unemployment that are the generating forces behind the increase in crime and lawlessness. There is no evidence that the Government will provide constructive measures to tackle those root causes, and we shall not get them from the hon. and learned Member for Montgomery and the Liberal party either.
    6.36 pm
    Mr. Ivan Lawrence: The hyperbole, exaggeration, malice and sheer abuse from the right hon. Member for Manchester, Gorton (Mr. Kaufman) was nothing new.

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    It was vintage right hon. Member for Manchester, Gorton. What is new is the Labour party's new-found concern for law and order.
    When in power, the Labour party presided over the loss of 9,000 policemen, the lowering of morale to the stage where there was almost a police strike, and the withdrawal of police officers from the beat. In opposition, they have advocated political interference with policing, denigrated the police to an enormous extent, especially in London, voted against the Prevention of Terrorism Act, which probably did more than anything to stop the summer bombing campaign of the IRA, voted against the Police and Criminal Evidence Act 1984, which has equipped the police with more sensible powers to fight crime, and voted against the Public Order Bill, which will protect the elderly and other vulnerable people, whom they always say they want to protect, from violence in the street. If one adds to that their demonstrations against the rate-capping legislation, the miners' strike and the occasional utterances in favour of terrorists from some representatives of the Labour party, the public will come to the conclusion that the speech of the right hon. Member for Gorton was nothing but a pathetic joke.
    What really rattles the Labour party is the fact that the Government have done so much about crime. Hardly a day goes by without some constructive action being taken. They include 14,000 more policemen; more civilian staff; a 30 per cent. increase in police resources; the implementation of most of the Scarman recommendations; the independent Police Complaints Authority; the overhaul of police training; more deterrent sentences for firearms offences, drugs traffickers, murderers of police and prison officers, child murderers and sexual offenders; the wider armoury for magistrates' courts to deal with juvenile offenders; the biggest prison building programme in history, with three new prisons built and 15 to go; the major refurbishment of 100 other prisons; the Police and Criminal Evidence Act; the Public Order Bill; the Prevention of Terrorism Act; and the subject of this debate — crime prevention — where the Government have involved the public with great success and where they ha' e taken steps to help victims of crime, which are long overdue, with victim support schemes and extended compensation.
    To say that the Government have not taken positive and effective measures against crime is nonsense. But the fact is that crime is still growing and we must face that unpleasant fact. Although there has been a most welcome reduction in some areas, such as burglary, a lot more needs to be done. The fight against crime is not being lost but it is being won too slowly. It would be won more quickly if our trials were more efficient and if we had tape-recorded interviews. What has happened to that proposal?
    But there is one step which, more quickly than any other, would change the climate of crime, particularly violent crime, a step which would meet with the support of the overwhelming majority of the nation — the restoration of capital punishment. When will the Government take that important, urgent and long overdue step?
    6.40 pm
    Mr. Clive Soley: The Government's amendment to the Labour party's motion is incredible.
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    For a start, they now refer to an "honest policy". But what did they have before the Home Secretary did an about-turn on crime — a dishonest policy? Is that what the previous Home Secretary had? The Government's policy is supposed to be well-funded, "vigorous and coherent". It is neither. What we have had from the Government is a rapid about-turn when the present Home Secretary took over. That was done in a fit of desperation because the Government knew that they were losing the argument, and losing it badly. The tragedy is that they are continuing to lose it because the Government's underlying social and economic policies are guaranteed to make a difficult situation far worse.
    The Home Secretary said that crime has been going up for some 30 years. The Labour party, inside and outside the House, has agreed that there is a problem for any Government of any political colour in Britain precisely because of structural changes, particularly in the inner city areas. What the Government did which was so bad and counter-productive was to rip off the sticking plaster of public expenditure, to create long-term mass youth unemployment and to introduce a series of other policies, some of which were referred to a few moments ago by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) and many of which were referred to by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), of general cuts in local authority expenditure which have such a profound effect on crime prevention.
    I am even more amazed at the Liberal party's amendment. It calls upon the Government to set up a committee to look into the functioning and structure of the police. At last, the Liberal party is acknowledging that something is wrong with policing in Britain, but it does not have the courage to come forward and say what needs to be done. The Labour party has been saying that for some years and some years ago it was not very popular. Now we know that a majority of British people support better police accountability. We know that a majority of people, including the Police Federation, which did an about-turn, support an independent police complaints system. We have won two of the most crucial arguments.
    The hon. and learned Member for Montgomery (Mr. Carlile), unusually for him, said the Labour party would not produce resources, but what do we read in the Liberal amendment? The Liberal party will provide immediately
    "the resources necessary for an effective nationwide system of community based policing."
    If a party's second task in government is to decide who will lead it, it will need a good system of community policing before trying to sort that out.
    What have the Government done that has been such a failure? They talk about crime prevention. The cuts to the housing programme, pinpointed so specifically by my hon. Friend the Member for Islington, South and Finsbury, are crucial. If renovation, repair and rebuild are cut out, not only can the changing population of the inner cities not be dealt with, but the older properties, which abound in our inner cities because so many of them were built in the last century, are allowed to deteriorate. That makes it easier for burglars to enter them and for them to become rundown and vandalised. Because of the Government cuts, many local authorities have had to remove people such as caretakers, public toilet attendants, park keepers and

    69
    people in public transport, who not only help to prevent crime by their presence but also help to clear up the effects of vandalism and crime. The Government have cut the lot.
    The Labour party is in favour of putting cameras, security locks and so on on doors, but if we only do that, as we have pointed out on many occasions, we simply create the drawbridge behind which people retreat into their own houses and take no notice of what goes on outside because there is fear outside. Those areas with a particularly high and frightening level of crime, particularly some of our high-rise blocks, need resident caretakers. That is the sort of sophisticated structure for which we are looking.
    Look at what the Government have done to education. Nursery education, one o'clock clubs, polytechnics, universities and training colleges have all been cut by the Government. It is now much more difficult to enter those education structures than it was before. Now that we have long-term youth unemployment it is impossible to get those young unemployed people the places that they need.
    Mr. Mark Carlisle rose—
    Mr. Soley: No, I am sorry, I am not giving way at this time. If the right hon. and learned Gentleman had been here throughout the debate he would know that we have been short of time and I want to give the Minister time to reply. He can deal with the matter if he wishes. However, if the right hon. and learned Gentleman was about to say that there have not been cuts in education, we know that there have, right the way down the line, and that has affected everything from nursery education through to the polytechnics and the universities. Cuts have also had an effect on leisure and recreation generally.
    If we want to see what the Government have done to make the crime situation worse, we can take no better example than the increase in the board and lodging allowance. In doing that, the Government have increased homelessness among young people. There is a direct link between crime and homelessness, alcohol abuse and homelessness and drug abuse and homelessness. Yet the Government have introduced a board and lodging scheme which is guaranteed to make homelessness worse. In doing so, they will push more young people into crime, drug addiction and alcohol abuse.
    The hon. Member for Aldershot (Mr. Critchley) talked about the problem of alcohol abuse. Again, the Government have no coherent policy on alcohol or drug abuse. They have no policy on fraud either for that matter, yet the impact of fraud on Britain is terrifying. The double standards of the Government can be seen by looking at the rates of imprisonment for people caught fiddling their social security claims and those people caught fiddling their income tax. There is a terrible discrepancy in the amount of money involved and between those who go to prison and those who do not.
    We have heard nothing from the Government about how, in six short years, they have managed to turn the British police force, once the pride of the world, into a semi-paramilitary police force. Conservative Members talk about Wapping, but no other post-war Government would have allowed Rupert Murdoch to go on being protected by the police at the expense of the ratepayer while no effort was made to force him to negotiate. Indeed, no other Government would have looked happily on the
    70
    way that he has turned his monopoly powers in the press into such an important and powerful base at the same time as being an overseas citizen.
    One of the Labour party's fundamental criticisms—indeed it is one that is growing in the police force—is that the Government, more than any other, have tried to use the police as though they were their own private army. They have done that in industrial relations and the inner cities, where they hope the police will cope with the consequences of their social and economic policies.
    Sir Eldon Griffiths rose—
    Mr. Soley: What about the training of police officers? We know from the Metropolitan police commissioner's report that training has suffered. People have been taken off training courses concerned with the Police and Criminal Evidence Act 1984, for which, in some cases, police are given only one or two days' training, yet the Labour party is recommending a minimum of six months' training as soon as possible, eventually aiming for much longer—I hope two years.
    The Government lack a policy on community policing. They will often say how marvellous community policing is, but what resources do they put into it? What are the incentives for a young officer to stay on as a community police officer? They are almost non-existent. If a police officer wants to improve his income or be promoted he must move out into car driving, to the courts, the police station or even the House of Commons. Despite that, the Government say that community policing is all-important. Let us see the colour of their money.
    What about the lack of a strong inspectorate? We read the other week allegations concerning the clear-up rates in Kent. Anyone involved in the legal system knows what happens and yet we do not have an independent and strong police inspectorate to deal with it.
    It is no good the Government saying that we must back the police because the public are worried, not because of one bad apple in the barrel, but because an officer who chooses to do something about what is happening cannot use the system without being made vulnerable. That has happened in the Kent constabulary and elsewhere. Until we have a strong police inspectorate, backed by a strong ombudsman, there will be trouble.
    An effective system of accountability completes the package. The Government claim that neighbourhood watch, property marking and victim support are all that is needed. I am not against those schemes, but the Government know that neighbourhood watch does not work well in high crime areas. It can help to build up the community a little, but that can be successful only in conjunction with all the other schemes. Until the Government reverse their social and economic policies it will not be sufficient to wheel out a Home Secretary to deal with the faults of the previous Home Secretary.
    The Government must reverse their policies and put resources into our inner cities and crime prevention. They must introduce proper police accountability, police training and an independent Police Complaints Authority. Then we might begin to reverse the damage that the Government have done to the fabric of our society.
    6.52 pm
    The Minister of State, Home Office (Mr. Giles Shaw): The hon. Member for Hammersmith (Mr. Soley) exceeded

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    the time agreed, but I thought it worthwhile for the House to hear the threadbare nature of the Opposition's case. The hon. Gentleman wants more accountability, a different Police Complaints Authority, more control over the police, more bureaucracy and less effort for those really concerned. The Opposition have the temerity to talk about putting the people first. They do not want to put people first, but they do want political control over the police. Let no one be under any illusion about that.
    We were grateful to my hon. Friend the Member for Aldershot (Mr. Critchley) for his modest sermon. I assure him that we are worried about the connection between alcohol and crime. My right hon. Friend the Home Secretary has already taken an initiative and the issue is being examined by one of the working groups that we have set up in the crime prevention standing conference.
    The hon. and learned Member for Montgomery (Mr. Carlile) referred to the forensic science service, as did the hon. Member for Linlithgow (Mr. Dalyell). I accept that the forensic science service is under great stress because of the demands upon it. There are staff vacancies. I have visited some forensic science establishments to see what might be done. Our intention is to provide the service required and to maintain the high standards of skill for which it has a high reputation.
    The hon. Member for Linlithgow also mentioned other matters in connection with correspondence with my right hon. Friend. The Home Secretary has replied to him today about the forensic science service. He will also respond to the hon. Gentleman's queries about the Birmingham six. That is a complicated issue, which might require more evaluation than is involved in a mere letter sent within such a short time.
    My hon. Friend the Member for Ellesmere Port and Neston (Mr. Woodcock) has apologised because he has to be elsewhere at this time. He mentioned court buildings and facilities for witnesses. I shall write to him. I recognise that such issues pose major problems in handling court work sensitively and sensibly.
    My hon. Friend the Member for Westminster, North (Mr. Wheeler) presented a robust view of crime prevention and of the wide range of activities in which we are engaged.
    The hon. Member for Islington, South and Finsbury (Mr. Smith) referred to the importance of the consultative groups. Today I met Islington's consultative group and had an interesting exchange of views. I gave it substantial support for its work. With full police agreement it has set out on a range of issues which will be wholly beneficial to the community.
    I cannot deal with all the issues in the few minutes remaining to me. I must deal with the main thrust of the Opposition case. They claim that the Government have failed to take any initiative to improve the climate in which crime and the fear of crime can be dealt with. This Government have virtually revolutionised the attitude towards crime prevention. Crime prevention as a policy did not exist when we came to office.
    As my hon. Friends the Members for Richmond and Barnes (Mr. Hanley) and for Westminster, North reminded the House, this Government set up the crime prevention unit and in a relatively short period a massive range of initiatives have been taken, which even the right hon. Member for Manchester, Gorton (Mr. Kaufman) should understand. We have established an evaluation of
    72
    crime patterns. We have done research into individual criminal activity, into the background of crime and into particular aspects of criminal activity such as shop crime, theft and autocrime. We have changed the standing committee on crime prevention to a standing conference. Working groups are examining the whole range of criminal activity to cover autocrime, licensed premises, crimes of violence, crime on transport and so on. We have agreed with the Association of Chief Police Officers that it should set up a sub-committee on crime prevention to be chaired by the current president, Sir Stanley Bailey. The secretary will be James Anderton, the chief constable of Greater Manchester.
    I trust that the right hon. Gentleman will recognise the strong input from Greater Manchester in our crime prevention initiatives. They will certainly help to offset the deleterious activities of the right hon. Gentleman's own police committee which seems to do little else but provide outrageous documentation and to undermine crime prevention.
    Two national seminars have taken place at No. 10 Downing street, the first of which was run by the Prime Minister and the second of which was chaired by my right hon. Friend the Home Secretary. A range of agencies participated. This has already resulted in a number of new initiatives which will significantly affect criminal activity.
    Mr. Kaufman: Such as?
    Mr. Shaw: It is no good the right hon. Gentleman saying that. I am thinking of the decision by the British motor industry to accept a new standard for car security, the decision by the insurance industry to agree to examine reduced premiums and the decision by local authorities to take a greater interest in the provision of security systems in housing estates. I accept that Councillor Layden of the Association of Metropolitan Authorities made a contribution and we shall examine his proposition with care in the hope that we can do something akin to it.
    Most crime prevention activities do not involve local authorities spending large amounts. I visited a large block of flats at Swansea recently. Caretakers have been brought back at a cost to the tenants of 40p per week, which the tenants pay willingly so that their homes are better protected and kept in better order. The environment of that estate in Swansea is an eloquent testimony to what can be done.
    I visited the crime prevention project at Wellingborough. A major improvement has been made to the town centre car park there by employing staff to look after it, at a charge. We need such projects so that crime prevention activities are rooted in the community and people are helped to help themselves. We believe in putting people first.
    Question put, That the original words stand part of the Question:—
    The House divided: Ayes 194, Noes 286.

    Division No. 268]

    [7.00 pm

    AYES

    Abse, Leo

    Bagier, Gordon A. T.

    Alton, David

    Banks, Tony (Newham NW)

    Anderson, Donald

    Barnett, Guy

    Archer, Rt Hon Peter

    Barron, Kevin

    Ashdown, Paddy

    Beckett, Mrs Margaret

    Ashley, Rt Hon Jack

    Beith, A. J.

    Ashton, Joe

    Bell, Stuart

    Atkinson, N. (Tottenham)

    Benn, Rt Hon Tony

    73

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

    Home Robertson, John

    Bermingham, Gerald

    Hoyle, Douglas

    Bidwell, Sydney

    Hughes, Dr Mark (Durham)

    Blair, Anthony

    Hughes, Robert (Aberdeen N)

    Boothroyd, Miss Betty

    Hughes, Roy (Newport East)

    Boyes, Roland

    Hughes, Sean (Knowsley S)

    Bray, Dr Jeremy

    Janner, Hon Greville

    Brown, Gordon (D'f'mline E)

    Jones, Barry (Alyn & Deeside)

    Brown, Hugh D. (Provan)

    Kaufman, Rt Hon Gerald

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

    Kennedy, Charles

    Caborn, Richard

    Kilroy-Silk, Robert

    Callaghan, Rt Hon J.

    Kirkwood, Archy

    Callaghan, Jim (Heyw'd & M)

    Lambie, David

    Campbell, Ian

    Lamond, James

    Campbell-Savours, Dale

    Leadbitter, Ted

    Carlile, Alexander (Montg'y)

    Leighton, Ronald

    Carter-Jones, Lewis

    Lewis, Terence (Worsley)

    Cartwright, John

    Litherland, Robert

    Clark, Dr David (S Shields)

    Lloyd, Tony (Stretford)

    Clarke, Thomas

    Lofthouse, Geoffrey

    Clay, Robert

    Loyden, Edward

    Clelland, David Gordon

    McCartney, Hugh

    Clwyd, Mrs Ann

    McDonald, Dr Oonagh

    Cocks, Rt Hon M. (Bristol S)

    McKay, Allen (Penistone)

    Cohen, Harry

    McKelvey, William

    Coleman, Donald

    MacKenzie, Rt Hon Gregor

    Conlan, Bernard

    McTaggart, Robert

    Cook, Frank (Stockton North)

    Madden, Max

    Cook, Robin F. (Livingston)

    Marek, Dr John

    Corbett, Robin

    Marshall, David (Shettleston)

    Corbyn, Jeremy

    Martin, Michael

    Craigen, J. M.

    Mason, Rt Hon Roy

    Crowther, Stan

    Maynard, Miss Joan

    Cunliffe, Lawrence

    Meacher, Michael

    Dalyell, Tam

    Michie, William

    Davies, Rt Hon Denzil (L'lli)

    Mikardo, Ian

    Davies, Ronald (Caerphilly)

    Millan, Rt Hon Bruce

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

    Miller, Dr M. S. (E Kilbride)

    Deakins, Eric

    Mitchell, Austin (G't Grimsby)

    Dewar, Donald

    Morris, Rt Hon A. (W'shawe)

    Dixon, Donald

    Morris, Rt Hon J. (Aberavon)

    Dobson, Frank

    Nellist, David

    Dormand, Jack

    Oakes, Rt Hon Gordon

    Douglas, Dick

    O'Brien, William

    Dubs, Alfred

    O'Neill, Martin

    Duffy, A. E. P.

    Orme, Rt Hon Stanley

    Dunwoody, Hon Mrs G.

    Park, George

    Eadie, Alex

    Patchett, Terry

    Eastham, Ken

    Pavitt, Laurie

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

    Pendry, Tom

    Evans, John (St. Helens N)

    Pike, Peter

    Ewing, Harry

    Powell, Raymond (Ogmore)

    Fatchett, Derek

    Prescott, John

    Faulds, Andrew

    Radice, Giles

    Field, Frank (Birkenhead)

    Randall, Stuart

    Fields, T. (L'pool Broad Gn)

    Raynsford, Nick

    Fisher, Mark

    Redmond, Martin

    Flannery, Martin

    Rees, Rt Hon M. (Leeds S)

    Foot, Rt Hon Michael

    Richardson, Ms Jo

    Foster, Derek

    Roberts, Allan (Bootle)

    Foulkes, George

    Roberts, Ernest (Hackney N)

    Fraser, J. (Norwood)

    Robertson, George

    Freeson, Rt Hon Reginald

    Rogers, Allan

    Freud, Clement

    Rooker, J. W.

    Garrett, W. E.

    Ross, Ernest (Dundee W)

    George, Bruce

    Rowlands, Ted

    Gilbert, Rt Hon Dr John

    Sedgemore, Brian

    Gould, Bryan

    Sheerman, Barry

    Gourlay, Harry

    Sheldon, Rt Hon R.

    Hamilton, James (M'well N)

    Shields, Mrs Elizabeth

    Hamilton, W. W. (Fife Central)

    Shore, Rt Hon Peter

    Hancock, Michael

    Short, Ms Clare (Ladywood)

    Hardy, Peter

    Silkin, Rt Hon J.

    Harman, Ms Harriet

    Skinner, Dennis

    Harrison, Rt Hon Walter

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

    Hart, Rt Hon Dame Judith

    Snape, Peter

    Healey, Rt Hon Denis

    Soley, Clive

    Heffer, Eric S.

    Spearing, Nigel

    Hogg, N. (Cnauld & Kilsyth)

    Steel, Rt Hon David

    Holland, Stuart (Vauxhall)

    Stewart, Rt Hon D. (W Isles)

    74

    Strang, Gavin

    Wigley, Dafydd

    Straw, Jack

    Williams, Rt Hon A.

    Thompson, J. (Wansbeck)

    Wilson, Gordon

    Thorne, Stan (Preston)

    Winnick, David

    Tinn, James

    Woodall, Alec

    Torney, Tom

    Wrigglesworth, Ian

    Wallace, James

    Young, David (Bolton SE)

    Wardell, Gareth (Gower)

    Wareing, Robert

    Tellers for the Ayes:

    Welsh, Michael

    Mr. Chris Smith and

    White, James

    Mr. John McWilliam.

    NOES

    Adley, Robert

    du Cann, Rt Hon Sir Edward

    Aitken, Jonathan

    Dunn, Robert

    Alexander, Richard

    Durant, Tony

    Amess, David

    Dykes, Hugh

    Ancram, Michael

    Edwards, Rt Hon N. (P'broke)

    Ashby, David

    Eggar, Tim

    Atkins, Rt Hon Sir H.

    Emery, Sir Peter

    Atkins, Robert (South Ribble)

    Evennett, David

    Atkinson, David (B'm'th E)

    Eyre, Sir Reginald

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

    Fairbairn, Nicholas

    Baker, Nicholas (Dorset N)

    Fallon, Michael

    Baldry, Tony

    Farr, Sir John

    Banks, Robert (Harrogate)

    Favell, Anthony

    Batiste, Spencer

    Finsberg, Sir Geoffrey

    Beaumont-Dark, Anthony

    Fletcher, Alexander

    Bellingham, Henry

    Fookes, Miss Janet

    Bendall, Vivian

    Forman, Nigel

    Benyon, William

    Fowler, Rt Hon Norman

    Bevan, David Gilroy

    Fox, Sir Marcus

    Biffen, Rt Hon John

    Franks, Cecil

    Biggs-Davison, Sir John

    Fry, Peter

    Blackburn, John

    Gale, Roger

    Blaker, Rt Hon Sir Peter

    Garel-Jones, Tristan

    Bonsor, Sir Nicholas

    Gilmour, Rt Hon Sir Ian

    Bottomley, Mrs Virginia

    Glyn, Dr Alan

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

    Goodhart, Sir Philip

    Bowden, Gerald (Dulwich)

    Gow, Ian

    Boyson, Dr Rhodes

    Gower, Sir Raymond

    Braine, Rt Hon Sir Bernard

    Greenway, Harry

    Brandon-Bravo, Martin

    Gregory, Conal

    Bright, Graham

    Griffiths, Sir Eldon

    Brinton, Tim

    Grist, Ian

    Brittan, Rt Hon Leon

    Ground, Patrick

    Brown, M. (Brigg & Cl'thpes)

    Grylls, Michael

    Bruinvels, Peter

    Hamilton, Hon A. (Epsom)

    Bryan, Sir Paul

    Hamilton, Neil (Tatton)

    Buchanan-Smith, Rt Hon A.

    Hampson, Dr Keith

    Buck, Sir Antony

    Hannam, John

    Budgen, Nick

    Hargreaves, Kenneth

    Bulmer, Esmond

    Harris, David

    Burt, Alistair

    Haselhurst, Alan

    Butcher, John

    Havers, Rt Hon Sir Michael

    Butler, Rt Hon Sir Adam

    Hawkins, C. (High Peak)

    Butterfill, John

    Hayhoe, Rt Hon Barney

    Carlisle, John (Luton N)

    Heddle, John

    Carlisle, Kenneth (Lincoln)

    Henderson, Barry

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

    Hickmet, Richard

    Channon, Rt Hon Paul

    Higgins, Rt Hon Terence L.

    Chapman, Sydney

    Hill, James

    Chope, Christopher

    Hirst, Michael

    Churchill, W. S.

    Holland, Sir Philip (Gedling)

    Clark, Dr Michael (Rochford)

    Holt, Richard

    Clark, Sir W. (Croydon S)

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

    Clarke, Rt Hon K. (Rushcliffe)

    Howarth, Gerald (Cannock)

    Cockeram, Eric

    Howell, Rt Hon D. (G'ldford)

    Colvin, Michael

    Howell, Ralph (Norfolk, N)

    Coombs, Simon

    Hunt, David (Wirral W)

    Cope, John

    Hunter, Andrew

    Corrie, John

    Hurd, Rt Hon Douglas

    Couchman, James

    Irving, Charles

    Cranborne, Viscount

    Johnson Smith, Sir Geoffrey

    Critchley, Julian

    Jopling, Rt Hon Michael

    Crouch, David

    Key, Robert

    Currie, Mrs Edwina

    King, Roger (B'ham N'field)

    Dickens, Geoffrey

    Knight, Dame Jill (Edgbaston)

    Dorrell, Stephen

    Knowles, Michael

    Dover, Den

    Lawler, Geoffrey

    75

    Lawrence, Ivan

    Osborn, Sir John

    Lee, John (Pendle)

    Ottaway, Richard

    Lennox-Boyd, Hon Mark

    Page, Sir John (Harrow W)

    Lester, Jim

    Page, Richard (Herts SW)

    Lewis, Sir Kenneth (Stamf'd)

    Parkinson, Rt Hon Cecil

    Lightbown, David

    Patten, Christopher (Bath)

    Lilley, Peter

    Patten, J. (Oxf W & Abgdn)

    Lloyd, Sir Ian (Havant)

    Pawsey, James

    Lloyd, Peter (Fareham)

    Pollock, Alexander

    Lord, Michael

    Porter, Barry

    Luce, Rt Hon Richard

    Portillo, Michael

    Lyell, Nicholas

    Powell, William (Corby)

    McCurley, Mrs Anna

    Powley, John

    Macfarlane, Neil

    Price, Sir David

    MacKay, Andrew (Berkshire)

    Proctor, K. Harvey

    Maclean, David John

    Raffan, Keith

    McLoughlin, Patrick

    Rathbone, Tim

    McNair-Wilson, M. (N'bury)

    Rees, Rt Hon Peter (Dover)

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

    Renton, Tim

    Major, John

    Rhodes James, Robert

    Malins, Humfrey

    Rhys Williams, Sir Brandon

    Maples, John

    Ridley, Rt Hon Nicholas

    Marland, Paul

    Ridsdale, Sir Julian

    Marshall, Michael (Arundel)

    Rippon, Rt Hon Geoffrey

    Mates, Michael

    Roberts, Wyn (Conwy)

    Mather, Carol

    Robinson, Mark (N'port W)

    Mayhew, Sir Patrick

    Roe, Mrs Marion

    Mellor, David

    Rossi, Sir Hugh

    Merchant, Piers

    Rost, Peter

    Miller, Hal (B'grove)

    Rowe, Andrew

    Mills, Iain (Meriden)

    Rumbold, Mrs Angela

    Mills, Sir Peter (West Devon)

    Ryder, Richard

    Miscampbell, Norman

    Sackville, Hon Thomas

    Moate, Roger

    Sainsbury, Hon Timothy

    Monro, Sir Hector

    Sayeed, Jonathan

    Montgomery, Sir Fergus

    Shaw, Giles (Pudsey)

    Moore, Rt Hon John

    Shaw, Sir Michael (Scarb')

    Morris, M. (N'hampton S)

    Shelton, William (Streatham)

    Morrison, Hon C. (Devizes)

    Shepherd, Colin (Hereford)

    Moynihan, Hon C.

    Shepherd, Richard (Aldridge)

    Mudd, David

    Shersby, Michael

    Murphy, Christopher

    Silvester, Fred

    Neale, Gerrard

    Sims, Roger

    Nelson, Anthony

    Skeet, Sir Trevor

    Neubert, Michael

    Smith, Tim (Beaconsfield)

    Newton, Tony

    Speed, Keith

    Nicholls, Patrick

    Speller, Tony

    Norris, Steven

    Spencer, Derek

    Onslow, Cranley

    Spicer, Michael (S Worcs)

    Oppenheim, Rt Hon Mrs S.

    Squire, Robin

    76

    Stanbrook, Ivor

    Walden, George

    Steen, Anthony

    Walker, Bill (T'side N)

    Stern, Michael

    Walker, Rt Hon P. (W'cester)

    Stevens, Lewis (Nuneaton)

    Wall, Sir Patrick

    Stewart, Andrew (Sherwood)

    Waller, Gary

    Stokes, John

    Walters, Dennis

    Tapsell, Sir Peter

    Ward, John

    Taylor, John (Solihull)

    Wardle, C. (Bexhill)

    Taylor, Teddy (S'end E)

    Warren, Kenneth

    Tebbit, Rt Hon Norman

    Watson, John

    Temple-Morris, Peter

    Watts, John

    Terlezki, Stefan

    Wells, Bowen (Hertford)

    Thomas, Rt Hon Peter

    Wells, Sir John (Maidstone)

    Thompson, Donald (Calder V)

    Wheeler, John

    Thompson, Patrick (N'ich N)

    Whitfield, John

    Thorne, Neil (Word S)

    Wiggin, Jerry

    Thornton, Malcolm

    Winterton, Mrs Ann

    Townend, John (Bridlington)

    Winterton, Nicholas

    Townsend, Cyril D. (B'heath)

    Wolfson, Mark

    Tracey, Richard

    Wood, Timothy

    Trippier, David

    Woodcock, Michael

    Trotter, Neville

    Yeo, Tim

    Twinn, Dr Ian

    Young, Sir George (Acton)

    van Straubenzee, Sir W.

    Younger, Rt Hon George

    Vaughan, Sir Gerard

    Viggers, Peter

    Tellers for the Noes:

    Wakeham, Rt Hon John

    Mr. Gerald Malone and

    Waldegrave, Hon William

    Mr. Francis Maude.

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.
    Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House reaffirms its support for the Government's commitment to pursuing an honest, vigorous and coherent policy in the fight against crime; welcomes the additional resources the Government has devoted to law and order, the success of Government backed crime prevention initiatives such as Neighbourhood Watch and property marking schemes, the encouragement given to local crime prevention initiatives, and the development of victim support schemes; expresses support for the police in their efforts to build closer links with the community; and believes everybody has a responsibility to participate in the fight against crime.

Gas Bill (Allocation of Time)
7.13 pm
The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): I beg to move,
That the Order [17th February] be supplemented as follows:
Lords Amendments
1. — (1) The proceedings on consideration of Lords Amendments shall be completed at this day's sitting and, subject to the provisions of the Order [I7th February], those proceedings shall, if not previously brought to a conclusion, be brought to a conclusion two hours after the commencement of the proceedings on the Motion for this Order.
(2) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
(3) No dilatory Motion with respect to, or in the course of, the proceedings shall he made except by a member of the Government, and the Question on any such Motion shall be put forthwith.
2.—(1) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1 above—

(a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided and, if that Question is for the Amendment of a Lords Amendment, shall then put forthwith the Question on any further Amendment to the said Lords Amendment moved by a Minister of the Crown and on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in the said Lords Amendment or, as the case may be, in the said Lords Amendment, as amended;

(b) Mr. Speaker shall then designate such of the remaining Lords Amendments as appear to him to involve questions of Privilege and shall—

(i) put forthwith the Question on any Amendment moved by a Minister of the Crown to a Lords Amendment and then put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in their Amendment, or as the case may be, in their Amendment, as amended;

(ii) put forthwith the Question on any Motion made by a Minister of the Crown, That this House cloth disagree with the Lords in a Lords Amendment;

(iii) put forthwith with respect to each Amendment designated by Mr. Speaker which has not been disposed of the Question, That this House doth agree with the Lords in their Amendment; and

(iv) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments;

(c) as soon as the House has agreed or disagreed with the Lords in any of their Amendments Mr. Speaker shall put forthwith a separate Question on any other Amendment moved by a Minister of the Crown relevant to that Lords Amendment.

Stages subsequent to first Consideration of Lords Amendments
3.— (1) The proceedings on any further Message from the Lords on the Bill shall be brought to a conclusion one hour after the commencement of the proceedings.
(2) For the purpose of bringing those proceedings to a conclusion—

(a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided, and shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair;

(b) Mr. Speaker shall then designate such of the remaining items in the Lords Message as appear to him to involve questions of Privilege and shall—

(i) put forthwith the Question on any Motion made by a Minister of the Crown on any item;

78

(ii) in the case of each remaining item designated by Mr. Speaker, put forthwith the Question, That this House doth agree with the Lords in their Proposal; and

(iii) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Proposals.

Supplemental
4. — (1) In this paragraph 'the proceedings' means proceedings on any further Message from the Lords on the Bill, on the appointment and quorum of a Committee to draw up Reasons and the Report of such a Committee.
(2) Mr. Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the consideration forthwith of the Message or, as the case may be, for the appointment and quorum of the Committee.
(3) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.
(4) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
(5) No dilatory Motion with respect to, or in the course of, the proceedings shall be made except by a member of the Government, and the Question on any such Motion shall be put forthwith.
(6) If the proceedings are interrupted by a Motion for the Adjournment of the House under Standing Order No. 10 (Adjournment on specific and important matter that should have urgent consideration), a period equal to the duration of the proceedings on the Motion shall be added to the period at the end of which the proceedings are to be brought to a conclusion.
We have debated the Gas Bill at considerable length on the Floor of the House and in Committee, and it has been debated in another place as well. Both Houses have spent about 260 hours debating the Bill. In this place we debated 370 amendments, and some 630 amendments were considered in another place. Altogether, about 1,000 amendments have been debated. Tonight we have 32 amendments before us from another place, the majority of which are of a drafting or technical nature. The few that are of substance are very much in response to views that have been expressed in the House and in another place. I am glad that the Government have been able to respond.
In these circumstances, I believe that the terms of the motion should be adequate for our consideration of the Lords amendments.
7.14 pm
Mr. Stan Orme: First, I inform the House that, because of the shortage of time, we shall not divide the House when the Question is put on the motion. None the less, we think that the provision of time is outrageously short, especially when we bear in mind the debates that have taken place in another place.
I have been informed that the Government, according to the Denning amendment, would have to inform trade unions of the legal, economic and social implications of the transfer and that the Transfer of Undertakings (Protection of Employees) Regulations 1981 provide that the Government have to disclose how many men would be redundant and what alternative work would be obtained for them. That issue was debated in another place last Thursday. This afternoon the Leader of the House told us that the Dockyard Services Bill, which is affected by the Denning amendment and which the Government were unable to proceed with last Friday, will be introduced on Wednesday. I understand that negotiations are still taking place with Lord Denning. We claim that there is a n analogy with the Gas Bill.
I have been informed by the trade unions that in the light of a statement made last week in another place the

79
British Gas Corporation has done all that it can to comply with the TUPE '81 regulations. The trade unions, however, are of the opinion that there has not been adequate or sufficient consultation about the intended transfer and that all the information required by the regulations to be made available has not been supplied. This includes the legal, economic and social implications of the transfer for all affected employees.
I understand that the trade unions are prepared to take any necessary legal action to protect the rights which the regulations give to their members who are employed by the British Gas Corporation. The Secretary of State laughs, but if the issue goes to court he might end up laughing on the other side of his face. I ask the Minister of State to explain whether the issue that I have outlined will have an effect on the Bill and will delay the sale of the shares of British Gas. The House is entitled to an answer to an extremely important question which has arisen during the passage of the Bill in another place. I ask the Minister to respond.
Mr. Buchanan-Smith: I shall respond to the right hon. Gentleman's question, but I think that he is making a great deal out of very little. Last week in another place it was explained that the policy of British Gas from the outset has been to comply with all the requirements of the regulations to which the right hon. Gentleman referred. Such are management-employee relations within British Gas that, as was made clear last week, the corporation has taken great care, which it always does, to go beyond merely fulfilling the letter of the obligations that it has to its employees. British Gas has already done all that it can do to comply with the requirements set out in the regulations and to inform and consult the trade unions.
There is one exception, to which reference was made last week, and that is the actual date of transfer from the corporation to the plc. Once the Bill becomes law and the Government are able to announce the timetable leading up to privatisation and the sale of shares, British Gas will immediately inform the unions of the transfer date. I hope that the right hon. Member for Salford, East (Mr. Orme) realises that British Gas has fully informed and consulted the trade unions. In addition, my right hon. Friend and I have always made ourselves available during the passage of the Bill to discuss the matter with the trade unions. We had two meetings with the Gas Unions Against Retail Denationalisation organisation that represents the unions involved in British Gas. At the end of both those meetings, my right hon. Friend invited representatives of the organisation to refer to him at any time any matter for clarification.
My right hon. Friend and I also had a meeting with the energy committee of the TUC. My right hon. Friend replied in detail to a submission that it put to us on a number of points. I have amplified the consultations that Ministers have had with the unions concerned. I assure the right hon. Gentleman and the House that the unions have been fully informed and consulted at all stages.
Question put and agreed to.
Resolved,
That the Order [17th February] be supplemented as follows:
Lords Amendments
1. — (1) The proceedings on consideration of Lords Amendments shall be completed at this day's sitting and,
80
subject to the provisions of the Order [17th February], those proceedings shall, if not previously brought to a conclusion, be brought to a conclusion two hours after the commencement of the proceedings on the Motion for this Order.
(2) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
(3) No dilatory Motion with respect to, or in the course of, the proceedings shall be made except by a member of the Government, and the Question on any such Motion shall be put forthwith.
2.—(1) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1 above—

(a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided and, if that Question is for the Amendment of a Lords Amendment, shall then put forthwith the Question on any further Amendment to the said Lords Amendment moved by a Minister of the Crown and on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in the said Lords Amendment or, as the case may be, in the said Lords Amendment, as amended;

(b) Mr. Speaker shall then designate such of the remaining Lords Amendments as appear to him to involve questions of Privilege and shall—

(i) put forthwith the Question on any Amendment moved by a Minister of the Crown to a Lords Amendment and then put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in their Amendment, or as the case may be, in their Amendment, as amended;

(ii) put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth disagree with the Lords in a Lords Amendment;

(iii) put forthwith with respect to each Amendment designated by Mr. Speaker which has not been disposed of the Question, That this House doth agree with the Lords in their Amendment; and

(iv) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments;

(c) as soon as the House has agreed or disagreed with the Lords in any of their Amendments Mr. Speaker shall put forthwith a separate Question on any other Amendment moved by a Minister of the Crown relevant to that Lords Amendment.

Stages subsequent to first Consideration of Lords Amendments
3. —(1) The proceedings on any further Message from the Lords on the Bill shall be brought to a conclusion one hour after the commencement of the proceedings.
(2) For the purpose of bringing those proceedings to a conclusion—

(a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided, and shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair;

(b) Mr. Speaker shall then designate such of the remaining items in the Lords Message as appear to him to involve questions of Privilege and shall—

(i) put forthwith the Question on any Motion made by a Minister of the Crown on any item;

(ii) in the case of each remaining item designated by Mr. Speaker, put forthwith the Question, That this House doth agree with the Lords in their Proposal; and

(iii) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Proposals.

Supplemental
4. — (1) In this paragraph 'the proceedings' means

81
proceedings on any further Message from the Lords on the Bill, on the appointment and quorum of a Committee to draw up Reasons and the Report of such a Committee.
(2) Mr. Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the consideration forthwith of the Message or, as the case may be, for the appointment and quorum of the Committee.
(3) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.
(4) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
(5) No dilatory Motion with respect to, or in the course of, the proceedings shall be made except by a member of the Government, and the Question on any such Motion shall be put forthwith.
(6) If the proceedings are interrupted by a Motion for the Adjournment of the House under Standing Order No. 10 (Adjournment on specific and important matter that should have urgent consideration), a period equal to the duration of the proceedings on the Motion shall be added to the period at the end of which the proceedings are to be brought to a conclusion.

Orders of the Day
  Gas Bill
  Lords amendments considered
  Gas Bill
    Clause 1

      THE DIRECTOR GENERAL OF GAS SUPPLY
      Lords amendment: No. 1, in page 2, line 6, leave out
      "notice in writing" and insert "reasonable notice".
      7.21 pm
      The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to take the following Lords amendments: No. 6, in clause 11, page 11, line 28, leave out "in writing".
      No. 12, in clause 38, page 40, line 37, leave out "in writing".
      No. 22, in schedule 5, page 77, line 18, leave out "in writing".
      Mr. Buchanan-Smith: The House is aware that concern was expressed in another place that the director might, under certain circumstances, resign at short notice, whereby there would be insufficient time to find a suitable replacement. The suggestion was made that if a formulation could be found requiring reasonable notice, a suitable constraint would be introduced. The amendment put forward by the Government in another place achieved precisely that effect but it also removed the words "in writing", which we think are redundant. They are already included in the definition of notice in clause 48. That is also the effect of amendments Nos. 6, 12 and 22, which leave out the redundant words "in writing". I hope that the House will have no difficulty with the amendments.
      Question put and agreed to.

    Clause 2

      THE GAS CONSUMERS' COUNCIL
      Lords amendment: No. 2, in page 2, line 22, leave out from "shall" to end of line 25 and insert
      "so far as practicable, ensure—

      (a) that the members of the Council include members who, by reason of their familiarity with the special requirements and circumstances of the different areas of Great Britain or of small businesses, are able together to represent the interests of consumers of gas supplied through pipes in all those areas and of such businesses; and

      (b) that the interests of consumers of gas supplied through pipes in different areas are represented by different members wherever that appears to the Secretary of State to be appropriate having regard to the manner in which the various parts of the gas supply industry in Great Britain organise themselves."

      Read a Second time.
      Mr. Stanley Orme: I beg to move, as an amendment to the Lords amendment, in line 6, after `businesses', insert 'or of trade unions'.
      Mr. Deputy Speaker: With this it will be convenient to take the following: amendment (b) to the proposed Lords amendment, in line 12, after 'members', insert
      'who shall be nominated by County and District authorities'.
      Lords amendment No. 10, in clause 26, in page 31, line 22, at end insert "and to the Council".
      Lords amendment No. 18, in schedule 2, page 65, line 23, at end insert—
      "(2A) For the purpose of ensuring that there are persons available in particular localities to assist the Council in the performance in those localities of its functions under this Act, the Council may, without any such approval as is required by subparagraph (1) above, appoint such persons to be so available as it may determine.
      (2B) Persons appointed under sub-paragraph (2A) above shall not be paid any sums by the Council for or in resepect of their services except sums reimbursing them for their travelling expenses and such of their other out-of-pocket expenses as do not relate to loss of remuneration."
      Mr. Orme: The amendments deal with trade union and local authority representation on consumer councils. This is linked directly to consumer representation. As we have seen from the history of Oftel, Professor Carsberg and the problems that have arisen from the British Telecommunications Bill, we believe that stronger representation is needed for consumer protection when the British Gas Corporation is transferred to a private monopoly as opposed to a public monopoly. At the moment the corporation is subject to parliamentary and ministerial accountability. The Secretary of State has been pleased to tell us on many occasions that that accountability will be removed when the corporation becomes a plc and a private monopoly.
      Although there will be an office in all but one of the regions, that is no substitute for a full regional structure with sustained lay involvement. The abolition of the regional councils means that the regional offices will be rudderless. They are likely to become transmitters of policy from above instead of acting as independent representatives of their regions.
      The inclusion of one regional member on a national council is hardly an adequate replacement for a full regional council. There can be no informed discussion of the issues and the problems relevant to a particular area. The Government have included in that representation country and small businesses. Local voluntary representatives will also be appointed. We are not opposed to that, but it is not sufficient. There ought to be more representation. We recommend that trade unions and local authorities should have statutory representation. That is the core of our argument.
      In another place Lord Belstead talked about a rigid, regionalised structure that could be improved. How can the reduction in consumer council staff by 40 per cent., and the downgrading of the status of regional secretaries, coupled with the abolition of the councils and lay representation in favour of one centralised structure, be said to be an improvement in consumer representation? We raised this issue consistently in Committee, and it has been raised in another place. On both occasions, we have not had satisfactory answers from the Government.
      Paid regional managers are not the answer to consumer representation. Because of the limited time, I shall keep my remarks fairly brief. We think that the amendments are important. We believe that the Government could accept them. They would broaden the base of consumer representation.
      Mr. Gordon Wilson: I am glad that the right hon. Member for Salford, East (Mr. Orme) has moved amendment (a). I am not sure about amendment (b), since advertently, or deliberately, he has contrived to miss out Scottish regional councils.
      Mr. Orme: I am sure that that is an error.
      Mr. Wilson: I am sure, from the look on the right hon. Gentleman's face, that he is truly penitent, but I did not know that it was Labour party policy to go for single units in local government in Scotland. If it is, it will be an improvement.
      We see in the Bill the onward march of centralisation. Prior to 1972, there were autonomous gas boards in different areas of the United Kingdom. The Scottish gas board was an independent unit and was able to take full decisions. It had control over management functions and consumer operations in Scotland. The Gas Act 1972 absorbed the Scottish gas board into the British Gas Corporation. Incidentally, that was at the same time as gas was discovered off the shore of Scotland. I have often wondered whether that was a coincidence. In due fullness of time, I have come to the conclusion that it was foreseen and that it would have been undesirable to have a Scottish gas board in possession of large quantities of natural gas exclusive of London. The Scottish gas board became a division of the British Gas Corporation. No sooner was the Bill published than we saw the encroachment of centralisation. Scottish Gas, a hallowed name in the energy field, to be was obliterated and would become British Gas (Scotland). In addition, the Bill proposed to abolish consumer councils in Scotland and the rest of the United Kingdom.
      We are seeing the creation of a huge private monopoly which will not be accountable in any way to consumers. There will be no watchdog body left in Scotland, Wales or in other areas to bark if British Gas plc acts out of turn. It is highly desirable that there should be such a watchdog separate from the consumers council in Scotland which can look at policy considerations and raise matters on behalf of consumers with the Director General of Gas Supply.
      7.30 pm
      It is a pity that the Lords amendment does not go far enough. It provides that
      "the members of the Council include members who, by reason of their familiarity with the special requirements and circumstances of the different areas of Great Britain".
      They are lumped together with people who represent other interests. I am not satisfied with the formula that has been approved by the other place or with what the Government initially came up with.
      We are failing to take account of the full importance of the regional factor and of the need for decentralisation of policy making, management and consultation. Since the Bill was first considered, in Scotland we have noticed that the Law Lords have allowed the TSB to become privatised and Guinness has taken over Distillers. In Committee Ministers said, "We can all trust British Gas because the management will be the same." Some of us were inclined not fully to agree with that statement. The ink on the takeover document was hardly dry when it was decided cavalierly to throw overboard the Scottish dimension—the promise had been made to maintain it — by Mr. Ernest Saunders, the chairman designate of the amalgamated company. That shows what will happen to

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      British Gas in the self-regulated atmosphere of the City of London. It could run amok as Guinness has done. Who will be able to halt it?
      I do not believe that the consumers council in Scotland will have sufficient powers to control British Gas. That is why I should have preferred British Gas to be dismembered so that regional and national companies could operate in each autonomous area of the United Kingdom. But such a formula is not available.
      I welcome the Lords amendments, which are slight, but I believe that the Government have taken leave of their senses in abolishing the Gas Consumers Council for Scotland.
      Mr. Paddy Ashdown: I am glad to be able to follow the hon. Member for Dundee, East (Mr. Wilson) who made a number of points on the creeping centralisation which has been inflicted on us by the Government and on the demise of the recognition of regional status in Britain. The Lords amendment goes some way towards recognising a regional dimension. It must be welcomed, although I believe that it was a reluctant measure by the Government and that the hon. Member for Dundee, East accepted it without much enthusiasm. The recommendations are as vague and weak as possible. We should have come to expect that from this Government. They have provided the minimum possible that they can get away with. This is a strange departure by a Government who, when they came to power, committed themselves to giving local people and areas much more responsibility and a greater say in their affairs. Instead, the amendment is minimalistic, referring to different areas without defining what they should be.
      I believe that a regional structure for Britain is the right and sensible way to proceed. With such a structure, we would know precisely what we mean by different areas. The structure would be defined in the Bill and given some form of expression. I look forward to the day when that happens.
      I welcome the inclusion in Lords amendment No. 2 of small businesses, although, again, there is no definition of how they shall be drawn up and who shall represent them. Close reading of the Bill has led me to believe that the people who represent the different areas of Great Britain and the representatives of small businesses must be one and the same people. I feel certain that that is not the Government's intention. I hope that the Minister will clarify that technical point and make it clear that the Government see them as being different people.
      My noble Friend Lord Diamond asked the Government to reveal the overall size of the council. It was important for us to know whether those who represented the different areas of Great Britain would be swamped by the Government's nominees who represented the centralised view, which the Government put forward with such effect whenever they have the opportunity. I understand that the response in the other place was that the expected overall size of the council would be about 25 members. It will be helpful if the Minister can clarify that statement.
      I welcome the Labour party's amendments. The key point is that the consumer's interest should be represented. Insofar as the trade unions have a voice which should be expressed in this regard, their representation would be
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      welcome. However, I do not wish the council to become so overburdened with other representatives that the ordinary consumer is not properly represented.
      Mr. Orme: When we talk about the trade unions, we are talking not just about the trade unions within the industry but in the wider context.
      Mr. Ashdown: I am grateful for that clarification. I assumed that that was the case but it is useful to have it on the record.
      Amendment (b), which refers to nomination by county and district authorities, does something to clarify an otherwise ridiculously vague definition, and I welcome it. I hope that, in the execution of the amendment, attention will be concentrated on those members "nominated by", rather than representatives of, county and district authorities. No doubt, local councillors have important views to put forward and a scattering of them should be members of the council, but I hope that county and district authorities will be prepared to nominate people other than local councillors. I welcome the amendments and hope that the Minister sees fit to accept them because they strengthen the Bill.
      Mr. Peter Pike: I support the two amendments tabled by my right hon. Friend the Member for Salford, East (Mr. Orme). Throughout the passage of the Bill, Labour Members have recognised, despite their opposition to the principle of the Bill, that the Government with their majority would force the Bill through regardless of whether it was a good Bill for energy and for consumers. We have always sought to protect consumers' interests. That is why, even at this late stage, we put forward two amendments. The Government have repeatedly assured us that they believe that the consumers have been given the best ever deal with this Bill. We totally reject that view and believe that there is insufficient protection for the consumer in the Bill. It is vital to improve the role of consumers, especially once we have moved from a public to a private monopoly.
      We have never argued that the present protection and safeguards for consumers are perfect, but we believe that now is the right time to improve them. The hon. Member for Yeovil (Mr. Ashdown) referred to the words "nominated by" in our second amendment. He was right to take the wider interpretation. It was not intended that they should necessarily be district or county councillors, although some might be. The hon. Member for Dundee, East (Mr. Wilson) was right to make the point about Scotland and about the miswording of the amendment. Even last week the Bill was still being debated in the House of Lords, so the amendment had to be drafted at very short notice.
      Both our amendments are important. The one seeks to involve trade unionists, giving them a voice on the Gas Consumers Council and the other seeks to ensure that representatives are nominated by county and district councils. We recognise that the Lords amendment is a slight improvement on the wording of the Bill when it left this House but even at this late stage it would be further improved by our amendments.
      Mr. Allan Rogers: We hope that the House will support the amendments as they would considerably improve the Bill. Throughout the Committee stage we were extremely concerned at the lack of input in the

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      control of the gas industry from people other than the poodles appointed by the Secretary of State. Throughout the passage of the Bill Ministers have taken a Stalinist attitude, increasingly gathering all power to the centre, which is so much a feature of Government policy and of the Bill. Our views will not find much support from the alliance, which did not provide much support in Committee. Nevertheless, it is nice to see the alliance achieving some kind of presence today.
      It is important for district and county councils to participate, especially at regional level, because nominations will otherwise be entirely in the hands of the Secretary of State, which is a negation of democracy and democratic accountability to the consumer. The hon. Member for Yeovil (Mr. Ashdown) made heavy weather of consumer interests and the alliance being the party of the consumer, but my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) and my right hon. Friend the Member for Salford, East (Mr. Orme) argued that point strongly in Committee. That is why we have put down these amendments. We want greater participation in the control of the industry.
      Mr. Ian Wrigglesworth: I wish briefly to support the comments of my hon. Friend the Member for Yeovil (Mr. Ashdown) and others who have spoken in this short debate. Our opposition to the Bill since it began its passage through the House has been based on the inability of the consumer to make a major impact on this privatised monopoly. We are totally dissatisfied with the Ofgas proposal and the proposal for the Gas Consumers Council. We want a much more powerful regulatory body and function and a much stronger consumer voice than is proposed in the Bill.
      The Lords amendment is welcome, but it is extremely modest. The Labour party's amendments strengthen it somewhat and are thus also welcome. Nevertheless, we should go much further. The hon. Member for Dundee, East (Mr. Wilson) pointed out that regional representation and national representation of the regions had been considerably weakened. The Northern Gas Consumers Council has made strong representations to me. It also made proposals to the Government about ways in which it could be much better integrated into the system proposed in the Bill, but those proposals fell on deaf ears, as have all other proposals to give the consumer a stronger voice than the Bill at present proposes.
      7.45 pm
      The cost of Ofgas and the Gas Consumers Council will be about £2 million, which is only two thirds of the cost of Oftel, the organisation that regulates British Telecom. We see no reason why the functions of Ofgas and the Gas Consumers Council should be less necessary than those of Oftel. We want a pledge from the Government substantially to increase the powers and resources of the regulatory body and of the council. We therefore support the Labour party's amendments and look forward to proper regulation of this privatised monopoly at some time in the future.
      Mr. Peter Hardy: We are grateful for the support of the hon. Member for Stockton, South (Mr. Wrigglesworth). If he had followed the detailed consideration of the Bill, he would know that the
      88
      arguments that he has advanced today were put time and again in Committee. Had the hon. Member for Gordon (Mr. Bruce) been present today, he could have confirmed that he joined us in our efforts to secure the very improvements that the hon. Member for Stockton, South seeks.
      Mr. Ashdown: Perhaps the hon. Gentleman will inform his hon. Friend the Member for Rhondda (Mr. Rogers) of that. My hon. Friend was assiduous in his attendance in Committee. I am told by the hon. Member for Dundee, East (Mr. Wilson), and the record shows, that my hon. Friend also voted assiduously throughout proceedings on the Bill. The criticism advanced by the hon. Member for Rhondda was therefore mean spirited, unnatural and unreasonable.
      Mr. Hardy: I confirm that on those occasions when the hon. Member for Gordon was present he generally supported us. That is the most generous gesture that I am prepared to make as I have great sympathy with the view advanced by my hon. Friend the Member for Rhondda (Mr. Rogers). Nevertheless, we are grateful for the support, modest though it may be and modest though our proposals are—modest because there is no chance of the Government accepting anything better.
      We recognise the importance of small businesses, and our amendment neither denies nor decries them. There are many small businesses in Britain, perhaps many more than there were a few years ago. That is inevitable as people try to escape crippling dependency and to find an occupation after unemployment. Moreover, many businesses have contracted so much that they are small businesses now when a little while ago they were quite substantial. We appreciate that one of the hopes for Britain lies in the growth of small businesses and we do not depart from the change made in the other place, but, just as we believe that the voice of the small business should be heard, we believe that the voice of the consumer, too, must be heeded.
      There is no organisation of greater significance than the trade union movement representing consumers in Great Britain. Many millions of consumers are members of trade unions and both lay and full-time officials are perhaps more familiar with the concerns and anxieties of ordinary people than any other organisation in Britain. We are not asking a great deal. The Minister said that he was eager and grateful — [Interruption.] The hon. Member for Truro (Mr. Penhaligon) should pay attention as there are many trade union members in his constituency.
      Mr. David Penhaligon: There are only seven other Labour Members in the Chamber.
      Mr. Hardy: We seek to give those trade union members the opportunity to voice the anxieties of the hon. Gentleman's constituents as well as our own. [Interruption.] If the hon. Gentleman wishes to intervene, I shall be glad to give way. If not, perhaps he will recognise that we are putting forward a valid and reasonable argument. [Interruption.] I can only suppose that the hon. Gentleman enjoyed his weekend enormously.
      The Government recognised the importance of trade unions when they said that the door was open and that they were always willing to see them to discuss the Bill. If that was so while the Bill was under consideration, it is reasonable to suggest that the trade unions should have some recognition as proposed in one of the two amendments.

      89
      The trade union movement is in need of a gesture. I learnt the other day—when this is generally known, I believe that it will cause considerable resentment in the industry — that the firm of Young and Rubicam, advertising agents in New York, is being paid £15 million to advertise the flotation of British Gas in the United States. That is perhaps a slightly larger amount than the value of the free shares that will accrue to the near 100,000 employees of British Gas. Therefore, the Government will be demonstrating how little regard they have for those who have made the British gas industry so successful. The employees are to receive the same value in shares as will be paid in fees to the advertising agents in New York. That serious comparison illustrates how appalling the Government's attitude is to those trade unionists in the gas industry who have helped to ensure that it is one of the most successful undertakings in Britain. The gesture for which we are asking is more than justified when we think of the fee that will be paid to the advertising agents.
      My hon. Friend the Member for Burnley (Mr. Pike), who played a pertinacious part in our debates in Committee, echoed the point that was rightly made by the hon. Member for Dundee, East (Mr. Wilson). Amendment (b) is drafted as it is in the interests of brevity, but we took it that, if the Government were to accept it, they could not ignore Scotland as a whole.
      Mr. Wilson: Will the hon. Gentleman give way?
      Mr. Hardy: I would rather not, in the interests of brevity.
      The Government have made a reluctant, creeping and modest change. If the Minister is to be consistent, he should accept both our amendments. Let me illustrate the value of amendment (b). The Minister has been in the House for a long time, and during our proceedings on the Bill he frequently referred to his constituency. As the Parliamentary Under-Secretary represents a marginal seat, he will understand that people often complain to Members of Parliament and to their local authorities. Both Ministers will recognise that the local authority charged with responsibility for personal social services is perhaps extremely familiar with the difficulties and problems that people encounter in their domestic environment. Such a local authority will know who is likely to be affected by fuel poverty or who is likely to have difficulty paying the gas bill. Given the expertise that exists within local authorities, it is perfectly reasonable that amendment (b) should be proposed.
      As the Minister will be aware, local authorities and the gas undertakings at present have a very good, close contact and decent relationship. Whether that relationship can remain the same when faced with a privatised monopoly is open to question. Many experienced local government officers with day-to-day responsibility in this area have some anxiety about the maintenance of that relationship. It is important for local authorities to be in contact and have dialogue with the gas undertakings. For that reason, we should enhance the prospect of the maintenance of a decent dialogue by accepting amendment (b) to allow local authority representation on the Gas Consumers Council.
      I do not know how many people will serve on the council, but I gather that the Minister has about two dozen people in mind. There is surely a need for one or more of those two dozen to be serving on local authorities. The same argument applies to the trade union movement. It
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      would be appropriate and decent to accept amendment (a) as well. Given what has happened today, that would also be a responsible gesture.
      We should like to have had several hours to debate these matters, but we do not have such time. Out of the wretched two hours that have been allocated we shall be unable to vote on both the amendments. The Minister could save us the bother of voting and allow us to concentrate on the subsequent amendments if he accepted both these proposals. If he does not, I propose that we vote on amendment (b).
      Mr. Buchanan-Smith: I am glad that the Opposition have welcomed the amendments that were made in the other place, although I appreciate that both Opposition amendments to not go as far as some hon. Members would wish.
      There has never been any doubt about the value of what people with local interests can contribute to a body such as a consumers council. It was always the intention that the different areas of British Gas should be represented on the Gas Consumers Council. The amendments that were agreed in the other place, and which I commend to the House, spell that out more clearly and give effect to what hon. Members have said on earlier occasions.
      No reference has been made to Lords amendment No. 18, which is also important. It provides for local representatives on an expenses-paid basis to be maintained, as is the position at present. That is something in which the hon. Member for Wentworth (Mr. Hardy) will be particularly interested. He said that his wife had performed that useful task, and I accept that a useful job has been done by British Gas in liaison with consumers when complaints have arisen. That is another improvement to the Bill which I am glad to commend to the House.
      I must refute what was said by the hon. Member for Dundee, East (Mr. Wilson). During our earlier discussions he uttered many generalities. He said that we had an integrated gas industry, that all the gas in Scotland could be taken to London and that there was centralisation. The hon. Gentleman overdoes it. I remind him that more gas is produced south of the border than is produced north of the border. I also remind him that we as a nation are enormous importers of gas. We export gas from Scotland to south of the border, but if the hon. Gentleman looks at my Department's Brown Book he will see that our main gas reserves are in the southern basin of the North sea. However, I do not intend to be drawn into an argument about where a dividing line might be drawn.
      Mr. Wilson: Is the Minister not aware that it took years, for the gas network to reach Scotland, and that consequently many Scottish people were prevented from obtaining supplies of cheap gas? But no sooner had the gas reached those parts of Scotland than the Government began driving up the price.
      I draw the right hon. Gentleman's attention to the parliamentary answer that he gave me today, which shows that north of 55° 50'—the Scottish jurisdiction sector— 12·4 billion cu m of gas were produced from the Scottish fields. For a country of 5 million people we have no supply problems, but will the United Kingdom not have supply problems in the future because of the Government's failure to go ahead with the importation of Norwegian gas?
      Mr. Buchanan-Smith:I am not withdrawing the answer that I gave the hon. Gentleman, but I wish that he would

      91
      listen to me. He should look to see where our main reserves lie in the long term. I know the hon. Gentleman's views on importation, but to go to the length of drawing a parallel with Guinness and DCL is to go too far.
      The hon. Member for Yeovil (Mr. Ashdown) also made some general points about centralisation, and I shall deal with them in the same way. There is not over-centralisation, and we have ensured area representation, particularly through these amendments. The hon. Gentleman asked specifically about the drafting, and I can assure him that it is not defective. Those representing the particular interests of an area and the interests of a small business need not be one and the same person. I am assured that the drafting is clear on that.
      The hon. Gentleman and the hon. Member for Wentworth (Mr. Hardy) asked about the size of the Gas Consumers Council. We expect there to be 20 representatives on it, 12 representatives from British Gas areas and eight who are appointed for other reasons.
      8 pm
      Mr. Geoffrey Lofthouse: Will the Minister confirm that the trade unions and county and district councils will have no part to play on that body?
      Mr. Buchanan-Smith: I shall come to that in a moment.
      Mr. Ashdown: May I return to centralisation, which the hon. Member for Wentworth (Mr. Hardy) also raised once he had got over his fit of pique at the result of the Newcastle-under-Lyme by-election? According to any rational judgment, the Bill amounts to a move towards centralisation. As the GCC is ultimately accountable to the House, there is a safeguard on that centralisation. However, we all know that the Government's ultimate intention is to have a more centralised body accountable, not to the House, but to the market place and the needs of commerce. Therefore, it is important to enshrine in the Bill a degree of accountability through local authorities. Surely the Minister must realise that.
      Mr. Buchanan-Smith: The hon. Gentleman neglects the role of the Director of Ofgas, and I deny what the hon. Member for Stockton, South (Mr. Wrigglesworth) said. We have introduced an extremely rigorous regulatory system. I accept that the system does not cover as wide an area of gas supply as the alliance party may have liked, but I do not intend to debate that again tonight. We have introduced tight regulation for the areas where we believe there is a risk of monopoly power. It is interesting that a party which has been liberal in the short traditions that it has set should want greater regulation. That demonstrates the background from which alliance Members come.
      The hon. Member for Yeovil should study and consult the industry. There is not a monopoly in other areas. The hon. Gentleman did not serve in Committee on the Bill, which was not his fault, but, as we have explained, we consulted other interests such as the small business sector of the CBI and it did not want regulation in the areas into which alliance Members would like to extend it. I hope that the public will take note that the alliance wishes to extend regulation, which would mean an extension of central control. That runs counter to some of the hon. Gentleman's arguments, but perhaps we should not be too unaccustomed to such inconsistencies.
      92
      I shall not go over all the arguments, because time is short. In the Bill we have attempted to introduce a completely new Gas Consumers Council structure which is partly based on experiences from the workings of the old structure. The regional structure, with the autonomous regional councils and a central council, was top heavy in terms of administration and cost effectiveness. That is why, after a careful study of that previous machinery, we have introduced a new structure. The new organisation will be smaller and more streamlined, and so long as attention is paid to the importance of the different areas of British Gas it will be equally effective on a regional level.
      The amendments seek to add trade union representatives and representatives of persons nominated by county and district authorities. They are based on the Gas Act 1972, but I remind the House that those representatives were appointed to regional councils, not to the central council. When we move to the single council, the Gas Consumers Council, the basis will be different, for the reasons I gave earlier.
      It is true that I have recommended the acceptance of an amendment which takes account of the needs of small businesses, but small businesses are in the consumer section of the community. Therefore, they are different from trade unions and it is not necessary to write in specific representation from that relatively small sector.
      There was a very much more positive role for the direct involvement of local authorities in a regional council, as the 1972 Act recognised, but now we are talking of representatives, not to regional bodies, but to a central body, so the role of local authorities has changed. That is not to say that there is no longer a role for them, but I do not recommend writing it formally into the Bill, as these amendments suggest. The organising committee, which is setting up the Gas Consumers Council, is now considering appointments to that council and is having consultations with the various local authority associations. I should prefer to leave the provision as it stands—that is, for a national body representing consumers. It is not in anyone's best interests to write in specific representation from one sector of the community or another. For that reason, I ask the House to reject the two amendments.
      Amendment (a) to Lords amendment No. 2 negatived.
      Amendment proposed to the Lords amendment (b), in line 12, after 'members', insert
      `who shall be nominated by County and District authorities'.
      Question put, That the amendment be made:—
      The House divided: Ayes 173, Noes 241.

      Division No. 269]

      [8.08 pm

      AYES

      Alton, David

      Bray, Dr Jeremy

      Anderson, Donald

      Brown, Gordon (D'f'mline E)

      Archer, Rt Hon Peter

      Brown, Hugh D. (Provan)

      Ashdown, Paddy

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

      Ashley, Rt Hon Jack

      Brown, Ron (E'burgh, Leith)

      Ashton, Joe

      Buchan, Norman

      Atkinson, N. (Tottenham)

      Caborn, Richard

      Bagier, Gordon A. T.

      Callaghan, Jim (Heyw'd & M)

      Banks, Tony (Newham NW)

      Campbell, Ian

      Barnett, Guy

      Campbell-Savours, Dale

      Barron, Kevin

      Carter-Jones, Lewis

      Beckett, Mrs Margaret

      Clark, Dr David (S Shields)

      Bell, Stuart

      Clarke, Thomas

      Benn, Rt Hon Tony

      Clay, Robert

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

      Clelland, David Gordon

      Bidwell, Sydney

      Clwyd, Mrs Ann

      Blair, Anthony

      Cocks, Rt Hon M. (Bristol S)

      Boyes, Roland

      Cohen, Harry

      93

      Coleman, Donald

      McTaggart, Robert

      Conlan, Bernard

      Marek, Dr John

      Cook, Robin F. (Livingston)

      Marshall, David (Shettleston)

      Corbett, Robin

      Martin, Michael

      Craigen, J. M.

      Mason, Rt Hon Roy

      Cunliffe, Lawrence

      Maynard, Miss Joan

      Dalyell, Tam

      Meacher, Michael

      Davies, Rt Hon Denzil (L'lli)

      Michie, William

      Davies, Ronald (Caerphilly)

      Millan, Rt Hon Bruce

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

      Miller, Dr M. S. (E Kilbride)

      Deakins, Eric

      Morris, Rt Hon A. (W'shawe)

      Dewar, Donald

      Nellist, David

      Dobson, Frank

      Oakes, Rt Hon Gordon

      Dormand, Jack

      O'Brien, William

      Douglas, Dick

      O'Neill, Martin

      Dubs, Alfred

      Orme, Rt Hon Stanley

      Duffy, A. E. P.

      Park, George

      Dunwoody, Hon Mrs G.

      Parry, Robert

      Eadie, Alex

      Patchett, Terry

      Eastham, Ken

      Pavitt, Laurie

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

      Pendry, Tom

      Evans, John (St. Helens N)

      Penhaligon, David

      Ewing, Harry

      Pike, Peter

      Field, Frank (Birkenhead)

      Powell, Raymond (Ogmore)

      Fields, T. (L'pool Broad Gn)

      Radice, Giles

      Fisher, Mark

      Randall, Stuart

      Flannery, Martin

      Raynsford, Nick

      Foot, Rt Hon Michael

      Redmond, Martin

      Forrester, John

      Rees, Rt Hon M. (Leeds S)

      Foster, Derek

      Richardson, Ms Jo

      Foulkes, George

      Roberts, Ernest (Hackney N)

      Fraser, J. (Norwood)

      Robertson, George

      Freeson, Rt Hon Reginald

      Rogers, Allan

      Garrett, W. E.

      Rooker, J. W.

      George, Bruce

      Ross, Ernest (Dundee W)

      Gilbert, Rt Hon Dr John

      Ross, Stephen (Isle of Wight)

      Gould, Bryan

      Rowlands, Ted

      Gourlay, Harry

      Sedgemore, Brian

      Hamilton, James (M'well N)

      Sheerman, Barry

      Hamilton, W. W. (Fife Central)

      Sheldon, Rt Hon R.

      Hardy, Peter

      Shields, Mrs Elizabeth

      Harman, Ms Harriet

      Shore, Rt Hon Peter

      Harrison, Rt Hon Walter

      Short, Ms Clare (Ladywood)

      Hart, Rt Hon Dame Judith

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

      Heffer, Eric S

      Silkin, Rt Hon J.

      Hogg, N. (C'nauld & Kilsyth)

      Skinner, Dennis

      Home Robertson, John

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

      Hoyle, Douglas

      Snape, Peter

      Hughes, Dr Mark (Durham)

      Soley, Clive

      Hughes, Robert (Aberdeen N)

      Steel, Rt Hon David

      Hughes, Roy (Newport East)

      Stott, Roger

      Hughes, Sean (Knowsley S)

      Strang, Gavin

      Janner, Hon Greville

      Thompson, J. (Wansbeck)

      John, Brynmor

      Thorne, Stan (Preston)

      Jones, Barry (Alyn & Deeside)

      Tinn, James

      Kaufman, Rt Hon Gerald

      Torney, Tom

      Kilroy-Silk, Robert

      Wallace, James

      Kirkwood, Archy

      Wardell, Gareth (Gower)

      Lambie, David

      Wareing, Robert

      Lamond, James

      White, James

      Leadbitter, Ted

      Wigley, Dafydd

      Leighton, Ronald

      Williams, Rt Hon A.

      Lewis, Terence (Worsley)

      Winnick, David

      Litherland, Robert

      Woodall, Alec

      Lloyd, Tony (Stretford)

      Wrigglesworth, Ian

      Lofthouse, Geoffrey

      Young, David (Bolton SE)

      Loyden, Edward

      McCartney, Hugh

      Tellers for the Ayes:

      McDonald, Dr Oonagh

      Mr. Don Dixon and

      McKay, Allen (Penistone)

      Mr. Derek Fatchett.

      McKelvey, William

      NOES

      Aitken, Jonathan

      Atkins, Robert (South Ribble)

      Alexander, Richard

      Atkinson, David (B'm'th E)

      Amess, David

      Baker, Nicholas (Dorset N)

      Ancram, Michael

      Baldry, Tony

      Ashby, David

      Batiste, Spencer

      Aspinwall, Jack

      Beaumont-Dark, Anthony

      Atkins, Rt Hon Sir H.

      Bellingham, Henry

      94

      Bendall, Vivian

      Heddle, John

      Benyon, William

      Henderson, Barry

      Bevan, David Gilroy

      Higgins, Rt Hon Terence L.

      Biffen, Rt Hon John

      Hill, James

      Blackburn, John

      Hirst, Michael

      Blaker, Rt Hon Sir Peter

      Holland, Sir Philip (Gedling)

      Bonsor, Sir Nicholas

      Howell, Ralph (Norfolk, N)

      Boscawen, Hon Robert

      Hunt, David (Wirral W)

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

      Hunter, Andrew

      Bowden, Gerald (Dulwich)

      Hurd, Rt Hon Douglas

      Boyson, Dr Rhodes

      Key, Robert

      Braine, Rt Hon Sir Bernard

      King, Roger (B'ham N'field)

      Brandon-Bravo, Martin

      Knight, Dame Jill (Edgbaston)

      Bright, Graham

      Lawler, Geoffrey

      Brinton, Tim

      Lawrence, Ivan

      Brittan, Rt Hon Leon

      Lee, John (Pendle)

      Brown, M. (Brigg & Cl'thpes)

      Lennox-Boyd, Hon Mark

      Bruinvels, Peter

      Lester, Jim

      Bryan, Sir Paul

      Lewis, Sir Kenneth (Stamf'd)

      Buchanan-Smith, Rt Hon A.

      Lightbown, David

      Buck, Sir Antony

      Lilley, Peter

      Budgen, Nick

      Lloyd, Sir Ian (Havant)

      Bulmer, Esmond

      Lloyd, Peter (Fareham)

      Burt, Alistair

      Lord, Michael

      Butterfill, John

      Luce, Rt Hon Richard

      Carlisle, John (Luton N)

      Lyell, Nicholas

      Carlisle, Kenneth (Lincoln)

      Macfarlane, Neil

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

      MacKay, Andrew (Berkshire)

      Cash, William

      Maclean, David John

      Channon, Rt Hon Paul

      McLoughlin, Patrick

      Chapman, Sydney

      McNair-Wilson, M. (N'bury)

      Chope, Christopher

      Major, John

      Churchill, W. S.

      Malins, Humfrey

      Clark, Dr Michael (Rochford)

      Maples, John

      Clark, Sir W. (Croydon S)

      Marland, Paul

      Clarke, Rt Hon K. (Rushcliffe)

      Marshall, Michael (Arundel)

      Clegg, Sir Walter

      Mates, Michael

      Cockeram, Eric

      Mather, Carol

      Colvin, Michael

      Maude, Hon Francis

      Coombs, Simon

      Mellor, David

      Cope, John

      Merchant, Piers

      Corrie, John

      Mills, Iain (Meriden)

      Cranborne, Viscount

      Miscampbell, Norman

      Critchley, Julian

      Moate, Roger

      Currie, Mrs Edwina

      Monro, Sir Hector

      Dickens, Geoffrey

      Montgomery, Sir Fergus

      Dorrell, Stephen

      Morris, M. (N'hampton S)

      Dover, Den

      Morrison, Hon C. (Devizes)

      du Cann, Rt Hon Sir Edward

      Mudd, David

      Dunn, Robert

      Murphy, Christopher

      Durant, Tony

      Neale, Gerrard

      Edwards, Rt Hon N. (P'broke)

      Nelson, Anthony

      Eggar, Tim

      Newton, Tony

      Evennett, David

      Nicholls, Patrick

      Eyre, Sir Reginald

      Norris, Steven

      Fallon, Michael

      Onslow, Cranley

      Fletcher, Alexander

      Oppenheim, Rt Hon Mrs S.

      Fookes, Miss Janet

      Osborn, Sir John

      Forman, Nigel

      Ottaway, Richard

      Fowler, Rt Hon Norman

      Page, Sir John (Harrow W)

      Fox, Sir Marcus

      Page, Richard (Herts SW)

      Franks, Cecil

      Patten, Christopher (Bath)

      Fry, Peter

      Pawsey, James

      Gale, Roger

      Pollock, Alexander

      Gardiner, George (Reigate)

      Porter, Barry

      Garel-Jones, Tristan

      Portillo, Michael

      Glyn, Dr Alan

      Powell, William (Corby)

      Goodhart, Sir Philip

      Powley, John

      Gower, Sir Raymond

      Price, Sir David

      Gregory, Conal

      Proctor, K. Harvey

      Griffiths, Sir Eldon

      Raffan, Keith

      Grist, Ian

      Renton, Tim

      Grylls, Michael

      Rhodes James, Robert

      Hamilton, Hon A. (Epsom)

      Rhys Williams, Sir Brandon

      Hamilton, Neil (Tatton)

      Ridsdale, Sir Julian

      Hampson, Dr Keith

      Rippon, Rt Hon Geoffrey

      Hargreaves, Kenneth

      Roberts, Wyn (Conwy)

      Havers, Rt Hon Sir Michael

      Robinson, Mark (N'port W)

      Hawkins, C. (High Peak)

      Roe, Mrs Marion

      Hayhoe, Rt Hon Barney

      Rossi, Sir Hugh

      95

      Rost, Peter

      Thompson, Patrick (N'ich N)

      Rowe, Andrew

      Thorne, Neil (Ilford S)

      Rumbold, Mrs Angela

      Thornton, Malcolm

      Ryder, Richard

      Townend, John (Bridlington)

      Sackville, Hon Thomas

      Trippier, David

      Sainsbury, Hon Timothy

      Twinn, Dr Ian

      Sayeed, Jonathan

      van Straubenzee, Sir W.

      Shaw, Giles (Pudsey)

      Vaughan, Sir Gerard

      Shaw, Sir Michael (Scarb')

      Viggers, Peter

      Shelton, William (Streatham)

      Wakeham, Rt Hon John

      Shepherd, Colin (Hereford)

      Waldegrave, Hon William

      Shepherd, Richard (Aldridge)

      Walden, George

      Silvester, Fred

      Walker, Bill (T'side N)

      Sims, Roger

      Walker, Rt Hon P. (W'cester)

      Skeet, Sir Trevor

      Wall, Sir Patrick

      Smith, Tim (Beaconsfield)

      Waller, Gary

      Speed, Keith

      Ward, John

      Speller, Tony

      Wardle, C. (Bexhill)

      Spencer, Derek

      Warren, Kenneth

      Spicer, Michael (S Worcs)

      Watts, John

      Squire, Robin

      Wells, Bowen (Hertford)

      Stanbrook, Ivor

      Wheeler, John

      Steen, Anthony

      Whitfield, John

      Stern, Michael

      Wiggin, Jerry

      Stevens, Lewis (Nuneaton)

      Winterton, Mrs Ann

      Stewart, Andrew (Sherwood)

      Winterton, Nicholas

      Stokes, John

      Wolfson, Mark

      Taylor, John (Solihull)

      Wood, Timothy

      Taylor, Teddy (S'end E)

      Woodcock, Michael

      Tebbit, Rt Hon Norman

      Yeo, Tim

      Temple-Morris, Peter

      Young, Sir George (Acton)

      Terlezki, Stefan

      Thatcher, Rt Hon Mrs M.

      Tellers for the Noes:

      Thomas, Rt Hon Peter

      Mr. Michael Neubert and

      Thompson, Donald (Calder V)

      Mr. Gerald Malone.

      Question accordingly negatived.

    Clause 4

      GENERAL DUTIES OF SECRETARY OF STATE AND DIRECTOR
      Lords amendment: No. 3, in page 3, line 28, at end insert—
      "(3) In performing his duty under subsection (2) above to exercise functions assigned to him in the manner which he considers is best calculated to protect the interests of consumers of gas supplied through pipes in respect of the quality of the gas supply services provided, the Secretary of State or, as the case may be, the Director shall take into account, in particular, the interests of those who are disabled or of pensionable age."
      Read a Second time.
      Mr. Ted Rowlands: I beg to move, as an amendment to the Lords amendment, at end add
      `or who are in receipt of any social security benefit'.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 5, in page 5, line 44, at end insert—
      "(aa) such conditions requiring arrangements to be made with respect to the provision of special services for meeting the needs of consumers of gas supplied through pipes who are disabled or of pensionable age as appear to the Secretary of State to be requisite or expedient having regard to those duties;"
      and, as an amendment to the proposed amendment, after `age', insert
      `or who are in receipt of any social security benefit'.
      Mr. Rowlands: These amendments amend interesting and important amendments made in the other place. Lords amendments Nos. 3 and 5 go some way to meet the
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      demands made from all parts of the House from the beginning of our proceedings on the Bill that we should seek ways and means to improve the safeguards for the most disadvantaged consumers and to protect their interests wherever possible after privatisation. Therefore, we welcome the Lords amendments, but believe that they can go a lot further.
      We also welcome one or two other amendments made in the other place, particularly the letter of assurance that was published in answer to the planted written question on 17 July about the various assurances given by the chairman of British Gas. I notice that all these assurances —it is important that they be clearly stated—last only as long as certain conditions in the licence. If those were removed, the assurances would fall. It is rather important that we remind ourselves of that point.
      Opposition Members welcome the Government's climbdown on standing charges. The original draft proposals were revealed in The Guardian just before publication of the Bill. They suggested that standing charges, under the code, could be raised by the RPI plus. There was some alteration later with the substitution of the famous phrase "best endeavours" to maintain standing charges. I recall with interest the Under-Secretary defending those words, using his law books to tell us that they were just as good as "must", "have to be" or "essential". We are relieved to see that he has cast aside his law books and replaced them by plain, good, English.
      We have at least a concession from the Government, and one for which we fought in Committee. The Committee stage would have been shorter and less arduous if those modest concessions had been made then. We are relieved that gone from the conditions on standing charges are the weasel words "best endeavours". Now, British Gas will have to ensure that any increase is no higher than the RPI.
      These amendments help and assist the most disadvantaged gas consumers — the elderly, the poorest consumers and the disabled — although the best way to do so is to keep gas prices down as much as possible. It is worthwhile reminding the House of the aim of the Bill. It is paving the way for the sale of British Gas. We have discovered that the Government will raid the accounts of British Gas to the tune of £2·5 billion, after having taken nearly £500 million from the gas consumers through the gas levy, but the company will still be presented to the stock market with a huge and healthy profit.
      The best way to help the poorest consumers is not by offering discount shares to some customers but by offering a lower gas tariff to all customers. Given the money that is available, which can be taken out of the British Gas Corporation, the levy and the dividend raid on the company's account before privatisation, there is a strong case for an alternative to discount share buying. We recognise that the argument is not only about tariffs and prices but about the service provided. These amendments deal with such services.
      We welcome amendments Nos. 3 and 5 amending clauses 4 and 7 to take into account
      "the interests of those who are disabled or of pensionable age."
      The case that was argued both here and in the other place by Lord Stoddard of Swindon and others was that we should ensure that there are special provisions for the elderly, the poor and the disabled, not only on gas tariffs and prices but on services. The additional provisions

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      offered in amendments Nos. 3 and 5, particularly in the new conditions attached to the licence, could go further and be extended to at least one other category of consumer —those in receipt of social security benefit.
      The words in amendments Nos. 3 and 5 to take into account
      "the interests of those who are disabled or of pensionable age"
      would he of a general character if there were not the benefit of a new draft condition attached to the licence which spells out specifically what they mean. I ask the House to take the amendments with the new conditions that have been proposed.
      To give meaning to the new provisions in clauses 4 and 7, four special services will be offered as a condition of the licence. I have with me the form that sets them out. They include:
      "examining free of charge … the safety of gas appliances … providing where practicable special controls and adaptors … and prepayment meters … providing special means of identifying officers authorised by the Supplier; and giving advice on the use of gas fittings."
      Those special services will be placed in the new conditions, thereby giving meaning to amendments Nos. 3 and 5. I hope that the Minister will, in a spirit of generosity, accept our case that at least two of those four special categories could and should apply to those in receipt of social security benefit.
      8.30 pm
      The two that apply are those that offer the opportunity of examining free of charge the safety of gas appliances and of giving advice on the use of gas and gas fittings. The amendment paves the way for additional changes to the draft condition, which is being introduced by the Government, in order to extend some of the provisions and special services to the poorest customers who do not fall into the two specific categories of being elderly or disabled. Two of the recommendations in the conditions apply specifically to the elderly and disabled, and could and should be extended to the poorest gas consumers.
      We know that neglecting the safety of gas appliances is a function not just of age or disability but often of finance. If one cannot afford to call out a gas fitter or to have a gas appliance examined, the dangers can be devastating. Thus, that is one of the four draft conditions that could easily apply to those in receipt of social security benefit, who are among the poorest of gas consumers.
      Advice on the use of gas and gas fittings is as of much significance to the poorest gas consumer in our society as to the elderly or disabled. I do not detract from the value and importance of those special services to those two categories of customers, but I cannot understand the logic of not extending them to those poorest consumers who are neither elderly nor disabled.
      I shall be interested to hear the Minister's reply to those points. I anticipate that he may say that a provision covering the efficient use of appliances has already been laid down in general terms in condition 13. But that could also apply to the elderly and the disabled. However, the Government have rightly and understandably sought to specify some special services which, although covered by the generic provisions of condition 13, should also be highlighted in an additional condition. We believe that the best way of assisting the poorest customer, whether elderly, disabled or simply poor, is by maintaining the lowest possible tariffs and, most importantly, by offering
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      a range of special services to the poorest of customers. It is in that spirit of generosity that we urge the Minister to respond and to join us in supporting the amendment.
      Mrs. Ann Clwyd: I rise to support the amendments, although I do so without much heart, because throughout our lengthy discussions on the Bill in Committee the Government turned a deaf ear to our pleas on behalf of some of the poorest consumers in our society. It became especially clear throughout our discussions on the Bill that the Government's plan to sell off British Gas to pay for tax cuts is a gigantic financial swindle. The public will undoubtedly be the losers and only the rich will benefit. Having said that, we must, even at this late stage, hope that the Government will be swayed by our arguments to try to protect some of those who will be most affected by some of the things that we predict will happen as a result of privatisation.
      During the past decade the poor have suffered most from increases in fuel costs. They tend to live in bad housing, often with poor insulation. They often have damp houses that suffer from condensation. They can seldom choose the heating that they would like, and they often land up with expensive and inefficient systems. Those who can least afford it are thus forced to pay the most to keep warm. That leads to a failure to pay bills and to misery. In Committee, we gave the Government many examples of acute cases of poverty. I quoted at some length from the many reports carried out by welfare organisations on the effect of fuel poverty on people in Britain.
      From the Government's own figures it seems that 60 per cent. of all people on supplementary benefit and 90 per cent. of pensioners on supplementary benefit now receive a heating addition. That makes the case for the amendments. Every winter, especially last winter, people have died from hypothermia. An increasing number of elderly people and young children die. They are often the children of families living on social security benefit. All of them are at risk, because they or their families cannot afford the fuel necessary to keep warm. Government policies, as enunciated today, will undoubtedly increase that possibility.
      The causes of fuel poverty must be tackled by other changes in policy, such as housing and income support as well as fuel pricing policies. Many people simply do not have the financial resources to heat their homes properly. Fuel poverty is a real and growing problem, and the Government cannot get away from that. If the Government make special provision for the elderly and the disabled, whom we know need increased heating because of their problems, how can they exclude people on social security benefit?
      From evidence produced in 1982, it seems that more than 50 per cent. of disconnections occurred in households with children under 10 years old. Of the households disconnected, two-fifths had a head of family unemployed and more than 10 per cent. had a head of family who was sick or disabled. We have been given much evidence from welfare organisations, which has shown clearly that there is a vital need for proper regulation of the relationship between the fuel supplier and its customers. Therefore, I support the amendment.
      Mr. Ashdown: I am glad to follow the hon. Member for Cynon Valley (Mrs. Clwyd) whose work on fuel poverty

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      is respected on both sides of the House and whose contribution to the Bill in that respect is valuable, and is recognised as such by all hon. Members. The hon. Lady made some points about hypothermia to which I shall return shortly. I shall put a slightly different emphasis on those points, but I agree that the amendment and clauses 3 and 5 are worth supporting. We shall certainly support them tonight. That was the only major concession that was wrung out of the Government. They gave it unwillingly, and struggled until the last moment. It is an official indictment of the Government that they gave it unwillingly and were forced to do so only because they recognised the argument in the last analysis.
      I join the hon. Member for Cynon Valley in welcoming clauses 3 and 5. I do so unenthusiastically for two reasons. First, I believe strongly that the appropriate mechanism for assisting the disadvantaged in a civilised nation is so to construct things that they do not need any charitable or special provision. People should be able to live ordinary lives on an ordinary and dignified basis.
      The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) made an important point when he said that the best way to assist the aged, the disabled and those who were disadvantaged for other reasons would be to provide a sufficiently low gas tariff. Overall that is the best way to assist. Another way would be to pay a decent pension so that people would not have to rely on charity, on special clauses in Bills or the hand out of free bus passes. There is a psychological attitude towards our elderly and disadvantaged people which unhappily ghettoises large numbers of people according to their disadvantages and age. That prevents them from taking their full part as members of society. That is my first reason for being unenthusiastic about the way in which we have arrived at this point.
      My second reason is that once again the Government amendment is as minimal as they can allow. It uses phrases such as "take into account". One wonders why the Government were not able to include phrases such as "the needs of old-age pensioners or the disabled". Goodness knows that need is powerful and well enough established. I pay tribute to my predecessor the former Liberal candidate in the Yeovil constituency because he placed me in a position to win that seat. Much more importantly, he and his wife discovered the phenomenon which we now know as hypothermia. Many thousands of people owe him a great debt for discovering that phenomenon.
      As the hon. Member for Cynon Valley has said, since 1975 some 12,000 people in Britain have died from hypothermia, an average of 1,230 a year. I disagree with the hon. Member for Cynon Valley only on the matter of emphasis, because, while there is no doubt that there are well known and documented cases of young children in that tragic and awful litany of unnecessary deaths, the vast preponderance of those cases is among the aged. Four died in my constituency, not last winter mercifully but the winter before. That is a disgrace in a civilised society. However, all these points were made at length in Committee and I have no wish to delay proceedings now. Suffice it to say that, because the vast preponderance of that disgraceful total of 12,000 dying from hypothermia are the aged and among that total are a number of
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      disabled, it is incumbent on us to recognise that there ought to be a specific recognition of the special needs of the aged.
      The clause should recognise the needs of the aged and the disabled and ought to take into account the needs of those on supplementary benefit. The Government will not do that. Because the Opposition amendment would strengthen the clause, I have no objection to it. I support it perhaps more enthusiastically in clause 7 than in clause 4, but we shall vote in favour of both amendments because at least they broaden the scope, recognise the problem and strengthen the clause.
      I turn now to the matter of recognition which is not voluntary but mandatory. In another place Lord Diamond, on behalf of the alliance, tried to introduce an amendment with almost exactly the same wording in line 38, page 5. This amendment is in line 44. That amendment would have made the requirements mandatory. Some of us believe that the amendment at present allows it to apply on a rather more voluntary basis. I was reassured to read in the report of the proceedings in the other place that the Government said that in their view this amendment, together with other amendments, make this requirement mandatory. It would be of benefit to the House if the Minister would confirm that point. I repeat that this amendment lays down a duty which is not voluntary but mandatory. If he will give us precisely the argument for that, it will go on the record and then there can be no doubt.
      8.45 pm
      Mr. Pike: I support the amendment because it is probably one of the most important improvements of the Bill. However, it could go a little further. That is why we are moving our amendment and a similar one to a later clause in the Bill. People on social security benefit are among the most deprived and poorest in Britain. Some people who are unable to go out because of poverty require more heat in their homes than people who are able to go out during the day. That also applies to the unemployed, especially in winter because they find it difficult to go out in bad weather.
      We all know that any form of heating is expensive. My hon. Friend the Member for Cynon Valley (Mrs. Clwyd) and others of my hon. Friends amply illustrated in Committee the fact that many people in the categories that we are discussing often had a choice between food and heating. It is atrocious that in 1986 people should have to choose between those two basic necessities of life. An announcement made in the House earlier today will worsen the situation. Last year, one of my constituents had to make a choice every weekend between food and heat.
      The complications of the exceptionally severe weather payments make it far too difficult for many people to acquire the benefit to which they are entitled. Many people dare not run their heating systems at a sufficient level because they are terrified about having to obtain the benefit to which they might be entitled under the scheme. In many instances they do not know about the scheme until it is too late. We are talking not just about the elderly or the disabled, although I recognise and fully support the needs of those two categories.
      At the moment I am dealing with the family whose gas was cut off last winter. They owe about £340 and the gas board has made it clear that, unless the family pays off the arrears at £10 a week until the debt is repaid, the gas

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      supply will not be reconnected. There are children in that family which is on supplementary benefit. It means that, with repayments of £10 a week for 34 weeks, that family will not have gas heating next winter. The amendment moved by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) is an important addition to the Bill. If the Government care or have any sympathy for the poorest members in our society, they will accept it.
      Mr. Wilson: I support the amendment because it is a valuable reflection of the importance that the Opposition parties at least attach to fuel poverty. It is recognised that many people die because of a lack of adequate income with which to buy heat, and that is compounded by the fact that many such people live in houses with inbuilt ventilation. The blocks are porous and the windows do not fit and heat cannot be contained in the building. Compared with Scandinavia, we treat the matter of heating for our people in a scandalous fashion.
      Mr. Wrigglesworth: Does the hon. Gentleman agree that it is not just hypothermia, but the fear and dread of the expense of heating from which old people suffer?
      Mr. Wilson: I agree with the hon. Member for Stockton, South (Mr. Wrigglesworth). I have had discussions with the Department of Health and Social Security about the possibilities of establishing a cold climate allowance. One of the answers is that spending does not necessarily reflect the severity of climate. Indeed, some family surveys show that. What it means is that, in many areas, the elderly simply do not use fuel. They are frightened to use fuel and, therefore, live in a colder environment. That has been documented many times by medical people who admit that hypothermia exists.
      I commend the Lords amendment and hope that, even at the last moment, the Government will accept it. The Labour party's amendment to it recognises the need to cater for the vast numbers of people who receive supplementary benefit. A fuel poverty document that I received today said that 5 million people receive supplementary benefit. I am not sure whether the family of four is still the unit, but, even with families of three, that means that 15 million people live or depend upon supplementary benefit. They have insufficient money on which to live.
      In considering the privatisation of British Gas, we must examine what can be done. Since I have commended the Labour party, perhaps I should criticise it for what the hon. Member for Oldham, West (Mr. Meacher) said about a winter premium of £5 a week. Of course, that is a flat rate. Whether people live at the Oval or in Shetland, regardless of climate, they will receive the same sum. If they must die because the payment is not related to climate, that is just too bad. I hope that those Labour Members present will recognise the justice of the case for climatically adjusted allowances and press the hon. Member for Oldham, West into action.
      If we change the way in which British Gas is financed and run, problems could arise in relation to gas supply. I have a copy of the 1985–86 annual report of the Gas Consumers Council for Scotland, which the Government will have found uncomfortable reading. Perhaps that is one reason why the consumers councils are being abolished. It states:
      "One of the most worrying trends in the past year has been the steep increase in the number of people being cut off
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      because they could not pay their gas bills. Disconnections have risen from 2,249 to 2,843, an increase of nearly 21 per cent. over 1984–85. We have continued to examine a sample of cases each month."
      The council exonerates British Gas on the matter because it has followed the code of practice. However, the council says that the code of practice is probably at fault and must be amended. It says that there is
      "no satisfactory explanation for this increase other than the prevailing economic climate."
      For many families without an adequate income, fuel debt will increase or they will be cut off.
      In those circumstances, does the Bill do enough, even if amended by the Lords, to take account of that fact? I do not believe that it does, in two respects. First, in relation to maintenance, the Government have announced that they intend to restrict the number of single payments that can be made, sometimes for the purchase arid sometimes for the maintenance of equipment. There is a danger factor associated with gas which is not necessarily associated with electricity. Danger could arise if people bought stoves that were not properly maintained and could not afford to get them repaired because of a lack of single payments. If heating allowances are phased out, as they will be, there will be more poverty and more likelihood of danger.
      In the latter circumstances, it would be useful if British Gas made available an advisory service that would allow those in receipt of supplementary benefit to obtain help and advice without having to pay through the nose for it. Frequently, they get no help or advice at all. Advice on heating, combined with the payments for insulation which, thankfully, the Government intend to retain, could save many families from hypothermia and from being cut off. It would be easy to set up such an advisory service and maintenance checks.
      I hope that the Government will accept the amendment moved by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) calling for the inclusion of those on supplementary benefit.
      Mr. Buchanan-Smith: As with the previous group of amendments, I am grateful to the House for welcoming the changes that were made in the House of Lords —changes and amendments which I shall commend to the House. But we are now debating the two amendments tabled by the Opposition.
      The remarks of the hon. Member for Yeovil (Mr. Ashdown) were strange. He paid respect, fairly, to the amendment and to the need to help those in receipt of social security, but he addressed almost all his remarks to the problems of the elderly. I refer him to amendment No. 5, which contains words almost identical to the ones that he used about meeting the needs of consumers who are elderly and disabled. He might have showed some graciousness and accepted that we have incorporated precisely what he wants.
      The hon. Gentleman also asked me whether the provision is mandatory. Given the responsibility that is laid on the Secretary of State, I cannot envisage circumstances in which he could properly omit a condition in the licence on special services to the elderly and the disabled. Once that is included in the licence, if the public gas supplier breaches the conditions of the licence it will be extremely serious, as the hon. Gentleman will know from other parts of the Bill, and various matters will flow

      103
      from it. The licence can be enforced and certain steps taken if the public gas supplier is in breach of the licence. The real power lies in ensuring that that is done.
      The main reason why the Lords amendments concentrated on the elderly and the disabled is that those categories are unlikely to be able to examine their appliances in the same way as a fit and able-bodied person could. That is why we decided to offer those special services only to the elderly and disabled. The provision will not relate to financial means. We are much more concerned with the physical ability of particular classes of consumer to be able to perform tasks that are necessary in the interests of safety — for example, the problems that an elderly or disabled person has in being able to go for advice to a gas showroom. Such people may be confined to the home. It is on that that the amendments from the other place concentrate. Other services are available, but people who want to take advantage of them do have to go to a showroom. Thus, we have limited the amendments from the other place to those who are old, which may mean they are immobile, and who have problems with understanding how appliances work —problems which those in receipt of social security payments will not necessarily suffer from.
      9 pm
      Mr. Rowlands: I am worried about the drift of the Minister's argument. It is not only the old and disabled who should not be tampering with appliances in order to decide whether they are safe. Safety is not just a problem for the old and disabled; it is a matter of knowledge. If the Minister is making the point that we are specialising in giving advice to the elderly and disabled at home, he should amend the draft condition.
      Mr. Buchanan-Smith: The draft condition is adequate and covers advice to be given. That can be understood from any reasonable reading. That is something that British Gas has done up to now for the elderly.
      I understand a great deal of what Opposition Members have said about financial help, although they sometimes overdramatise. Financial help is in a different category from what we are seeking to do relating to services. I remind the House that for pensioners the weekly scale rates for help for heating have increased by more than 6 per cent. in real terms since 1978.
      For those who require more general help for heating we have increased the size of the heating additions and their availability. It is significant that they are now worth £140 million more in real terms than they were in 1979. Therefore, the Government have taken positive action to give financial help where it is needed, to which so much reference has been made. The Government need no lectures from the Opposition on the problems of those on lower incomes who need help for heating additions and in answering those needs. We have done that on a scale far greater than at any time when the Labour party had responsibility for that.
      The services available to the two categories of consumers to whom the amendments from the other place apply, which I commend to the House, meet our objectives. The Government not only recognise the need for financial help but have responded to it in a real way,
      104
      which the Labour party never did when it had the power to do so. I ask the House to reject the amendments to the amendments.
      Mr. Rowlands: We shall be pressing our amendments, first, because the Minister ended on a controversial note. It is little wonder that the Government have had to pay more out in heating allowances when the Chancellor of the Exchequer, as Secretary of State for Energy, for three successive years, demanded that gas prices should rise by 10 per cent. above the rate of inflation—an increase of 100 per cent. in domestic gas prices.
      Secondly, I did not find convincing his arguments against extending the special provisions for those of state pensionable age and the disabled—which we welcome— to the poorest customers in our communities, in particular, advice and assistance on the safety of gas appliances and on the use of gas. Both are vital to the poorest consumers as well as to the elderly and disabled. It is for those reasons that we shall press our amendments tonight.
      Question put, That the amendment to the Lords amendment be made:—
      The House divided: Ayes 198, Noes 245.

      Division No. 270]

      [9.4 pm

      AYES

      Alton, David

      Dormand, Jack

      Anderson, Donald

      Douglas, Dick

      Archer, Rt Hon Peter

      Dubs, Alfred

      Ashdown, Paddy

      Duffy, A. E. P.

      Ashley, Rt Hon Jack

      Dunwoody, Hon Mrs G.

      Ashton, Joe

      Eadie, Alex

      Atkinson, N. (Tottenham)

      Eastham, Ken

      Bagier, Gordon A. T.

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

      Banks, Tony (Newham NW)

      Evans, John (St. Helens N)

      Barnett, Guy

      Ewing, Harry

      Barron, Kevin

      Faulds, Andrew

      Beckett, Mrs Margaret

      Field, Frank (Birkenhead)

      Bell, Stuart

      Fields, T. (L'pool Broad Gn)

      Benn, Rt Hon Tony

      Fisher, Mark

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

      Flannery, Martin

      Bidwell, Sydney

      Foot, Rt Hon Michael

      Blair, Anthony

      Forrester, John

      Boyes, Roland

      Foster, Derek

      Bray, Dr Jeremy

      Foulkes, George

      Brown, Gordon (D'f'mline E)

      Fraser, J. (Norwood)

      Brown, Hugh D. (Proven)

      Freeson, Rt Hon Reginald

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

      Garrett, W. E.

      Brown, Ron (E'burgh, Leith)

      George, Bruce

      Buchan, Norman

      Gilbert, Rt Hon Dr John

      Caborn, Richard

      Gould, Bryan

      Callaghan, Jim (Heyw'd & M)

      Gourlay, Harry

      Campbell, Ian

      Hamilton, James (M'well N)

      Campbell-Savours, Dale

      Hamilton, W. W. (Fife Central)

      Carter-Jones, Lewis

      Hancock, Michael

      Clark, Dr David (S Shields)

      Hardy, Peter

      Clarke, Thomas

      Harman, Ms Harriet

      Clay, Robert

      Harrison, Rt Hon Walter

      Clelland, David Gordon

      Hart, Rt Hon Dame Judith

      Clwyd, Mrs Ann

      Heffer, Eric S.

      Cocks, Rt Hon M. (Bristol S)

      Hogg, N. (C'nauld & Kilsyth)

      Cohen, Harry

      Home Robertson, John

      Coleman, Donald

      Hoyle, Douglas

      Conlan, Bernard

      Hughes, Dr Mark (Durham)

      Cook, Robin F. (Livingston)

      Hughes, Robert (Aberdeen N)

      Corbett, Robin

      Hughes, Roy (Newport East)

      Cox, Thomas (Tooting)

      Hughes, Sean (Knowsley S)

      Craigen, J. M.

      Hughes, Simon (Southwark)

      Cunliffe, Lawrence

      Janner, Hon Greville

      Dalyell, Tam

      John, Brynmor

      Davies, Ronald (Caerphilly)

      Jones, Barry (Alyn & Deeside)

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

      Kaufman, Rt Hon Gerald

      Deakins, Eric

      Kennedy, Charles

      Dewar, Donald

      Kilroy-Silk, Robert

      Dobson, Frank

      Kirkwood, Archy

      105

      Lambie, David

      Roberts, Ernest (Hackney N)

      Lamond, James

      Robertson, George

      Leadbitter, Ted

      Rogers, Allan

      Leighton, Ronald

      Rooker, J. W.

      Lewis, Terence (Worsley)

      Ross, Ernest (Dundee W)

      Litherland, Robert

      Rowlands, Ted

      Lloyd, Tony (Stretford)

      Sedgemore, Brian

      Lofthouse, Geoffrey

      Sheerman, Barry

      Loyden, Edward

      Sheldon, Rt Hon R.

      McCartney, Hugh

      Shields, Mrs Elizabeth

      McDonald, Dr Oonagh

      Shore, Rt Hon Peter

      McKay, Allen (Penistone)

      Short, Ms Clare (Ladywood)

      McKelvey, William

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

      MacKenzie, Rt Hon Gregor

      Silkin, Rt Hon J.

      McTaggart, Robert

      Skinner, Dennis

      Madden, Max

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

      Marek, Dr John

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

      Marshall, David (Shettleston)

      Snape, Peter

      Martin, Michael

      Soley, Clive

      Mason, Rt Hon Roy

      Spearing, Nigel

      Maynard, Miss Joan

      Steel, Rt Hon David

      Meacher, Michael

      Stewart, Rt Hon D. (W Isles)

      Michie, William

      Stott, Roger

      Mikardo, Ian

      Strang, Gavin

      Millan, Rt Hon Bruce

      Straw, Jack

      Miller, Dr M. S. (E Kilbride)

      Thompson, J. (Wansbeck)

      Morris, Rt Hon A. (W'shawe)

      Thorne, Stan (Preston)

      Nellist, David

      Tinn, James

      Oakes, Rt Hon Gordon

      Torney, Tom

      O'Brien, William

      Wainwright, R.

      O'Neill, Martin

      Wallace, James

      Orme, Rt Hon Stanley

      Wardell, Gareth (Gower)

      Park, George

      Wareing, Robert

      Parry, Robert

      White, James

      Patchett, Terry

      Wigley, Dafydd

      Pavitt, Laurie

      Williams, Rt Hon A.

      Pendry, Tom

      Wilson, Gordon

      Penhaligon, David

      Winnick, David

      Pike, Peter

      Woodall, Alec

      Powell, Raymond (Ogmore)

      Wrigglesworth, Ian

      Randall, Stuart

      Young, David (Bolton SE)

      Raynsford, Nick

      Redmond, Martin

      Tellers for the Ayes:

      Rees, Rt Hon M. (Leeds S)

      Mr. Don Dixon and

      Richardson, Ms Jo

      Mr. Derek Fatchett.

      NOES

      Adley, Robert

      Bruinvels, Peter

      Aitken, Jonathan

      Bryan, Sir Paul

      Alexander, Richard

      Buchanan-Smith, Rt Hon A.

      Amess, David

      Buck, Sir Antony

      Ancram, Michael

      Budgen, Nick

      Ashby, David

      Bulmer, Esmond

      Aspinwall, Jack

      Burt, Alistair

      Atkins, Rt Hon Sir H.

      Butler, Rt Hon Sir Adam

      Atkins, Robert (South Ribble)

      Butterfitl, John

      Atkinson, David (B'm'th E)

      Carlisle, John (Luton N)

      Baker, Nicholas (Dorset N)

      Carlisle, Kenneth (Lincoln)

      Baldry, Tony

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

      Batiste, Spencer

      Carttiss, Michael

      Beaumont-Dark, Anthony

      Cash, William

      Bellingham, Henry

      Chapman, Sydney

      Bendall, Vivian

      Chope, Christopher

      Benyon, William

      Churchill, W. S.

      Bevan, David Gilroy

      Clark, Dr Michael (Rochford)

      Biffen, Rt Hon John

      Clark, Sir W. (Croydon S)

      Blackburn, John

      Clarke, Rt Hon K. (Rushcliffe)

      Blaker, Rt Hon Sir Peter

      Clegg, Sir Walter

      Bonsor, Sir Nicholas

      Cockeram, Eric

      Boscawen, Hon Robert

      Coombs, Simon

      Bottomley, Mrs Virginia

      Cope, John

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

      Corrie, John

      Bowden, Gerald (Dulwich)

      Couchman, James

      Boyson, Dr Rhodes

      Cranborne, Viscount

      Braine, Rt Hon Sir Bernard

      Critchley, Julian

      Brandon-Bravo, Martin

      Crouch, David

      Bright, Graham

      Currie, Mrs Edwina

      Brinton, Tim

      Dickens, Geoffrey

      Brittan, Rt Hon Leon

      Dorrell, Stephen

      Brown, M. (Brigg & Cl'thpes)

      Dover, Den

      106

      du Cann, Rt Hon Sir Edward

      Morrison, Hon C. (Devizes)

      Dunn, Robert

      Moynihan, Hon C.

      Edwards, Rt Hon N. (P'broke)

      Murphy, Christopher

      Evennett, David

      Neale, Gerrard

      Eyre, Sir Reginald

      Nelson, Anthony

      Fairbairn, Nicholas

      Neubert, Michael

      Fallon, Michael

      Newton, Tony

      Fletcher, Alexander

      Nicholls, Patrick

      Fookes, Miss Janet

      Norris, Steven

      Forman, Nigel

      Onslow, Cranley

      Fox, Sir Marcus

      Oppenheim, Rt Hon Mrs S.

      Franks, Cecil

      Osborn, Sir John

      Fry, Peter

      Ottaway, Richard

      Gale, Roger

      Page, Sir John (Harrow W)

      Garel-Jones, Tristan

      Page, Richard (Herts SW)

      Gilmour, Rt Hon Sir Ian

      Patten, Christopher (Bath)

      Glyn, Dr Alan

      Pawsey, James

      Goodhart, Sir Philip

      Percival, Rt Hon Sir Ian

      Gower, Sir Raymond

      Pollock, Alexander

      Greenway, Harry

      Porter, Barry

      Gregory, Conal

      Portillo, Michael

      Griffiths, Sir Eldon

      Powell, William (Corby)

      Grist, Ian

      Powley, John

      Ground, Patrick

      Price, Sir David

      Grylls, Michael

      Proctor, K. Harvey

      Hamilton, Hon A. (Epsom)

      Pym, Rt Hon Francis

      Hamilton, Neil (Tatton)

      Raffan, Keith

      Hampson, Dr Keith

      Rhodes James, Robert

      Hargreaves, Kenneth

      Rhys Williams, Sir Brandon

      Havers, Rt Hon Sir Michael

      Ridsdale, Sir Julian

      Hawkins, C. (High Peak)

      Rippon, Rt Hon Geoffrey

      Hayhoe, Rt Hon Barney

      Roberts, Wyn (Conwy)

      Heddle, John

      Robinson, Mark (N'port W)

      Henderson, Barry

      Roe, Mrs Marion

      Higgins, Rt Hon Terence L.

      Rossi, Sir Hugh

      Hill, James

      Rost, Peter

      Holland, Sir Philip (Gedling)

      Rowe, Andrew

      Hunt, David (Wirral W)

      Rumbold, Mrs Angela

      Hunter, Andrew

      Ryder, Richard

      Hurd, Rt Hon Douglas

      Sackville, Hon Thomas

      Jenkin, Rt Hon Patrick

      Sainsbury, Hon Timothy

      Key, Robert

      Sayeed, Jonathan

      King, Roger (B'ham N'field)

      Shaw, Sir Michael (Scarb')

      Knight, Dame Jill (Edgbaston)

      Shelton, William (Streatham)

      Lang, Ian

      Shepherd, Colin (Hereford)

      Lawler, Geoffrey

      Shepherd, Richard (Aldridge)

      Lawrence, Ivan

      Silvester, Fred

      Lawson, Rt Hon Nigel

      Sims, Roger

      Lee, John (Pendle)

      Skeet, Sir Trevor

      Lennox-Boyd, Hon Mark

      Smith, Tim (Beaconsfield)

      Lester, Jim

      Speed, Keith

      Lewis, Sir Kenneth (Stamf'd)

      Speller, Tony

      Lightbown, David

      Spencer, Derek

      Lilley, Peter

      Spicer, Michael (S Worcs)

      Lloyd, Sir Ian (Havant)

      Squire, Robin

      Lloyd, Peter (Fareham)

      Stanbrook, Ivor

      Lord, Michael

      Steen, Anthony

      Luce, Rt Hon Richard

      Stern, Michael

      Lyell, Nicholas

      Stevens, Lewis (Nuneaton)

      Macfarlane, Neil

      Stewart, Andrew (Sherwood)

      MacKay, Andrew (Berkshire)

      Stokes, John

      Maclean, David John

      Taylor, John (Solihull)

      McLoughlin, Patrick

      Taylor, Teddy (S'end E)

      McNair-Wilson, M. (N'bury)

      Temple-Morris, Peter

      Major, John

      Terlezki, Stefan

      Malins, Humfrey

      Thatcher, Rt Hon Mrs M.

      Maples, John

      Thomas, Rt Hon Peter

      Marland, Paul

      Thompson, Donald (Calder V)

      Marshall, Michael (Arundel)

      Thompson, Patrick (N'ich N)

      Mather, Carol

      Thorne, Neil (Ilword S)

      Maude, Hon Francis

      Thornton, Malcolm

      Mellor, David

      Townend, John (Bridlington)

      Merchant, Piers

      Trippier, David

      Miller, Hal (B'grove)

      Twinn, Dr Ian

      Mills, Iain (Meriden)

      van Straubenzee, Sir W.

      Miscampbell, Norman

      Vaughan, Sir Gerard

      Moate, Roger

      Viggers, Peter

      Monro, Sir Hector

      Wakeham, Rt Hon John

      Montgomery, Sir Fergus

      Waldegrave, Hon William

      Morris, M. (N'hampton S)

      Walden, George

      107

      Walker, Bill (T'side N)

      Winterton, Mrs Ann

      Walker, Rt Hon P. (W'cester)

      Wolfson, Mark

      Wall, Sir Patrick

      Wood, Timothy

      Waller, Gary

      Woodcock, Michael

      Ward, John

      Yeo, Tim

      Wardle, C. (Bexhill)

      Young, Sir George (Acton)

      Warren, Kenneth

      Younger, Rt Hon George

      Watts, John

      Wells, Bowen (Hertford)

      Tellers for the Noes

      Wheeler, John

      Mr. Tony Durant and

      Whitfield, John

      Mr. Mr. Gerald Malone

      Wiggin, Jerry

      Question accordingly negatived.
      It being more than two hours after the commencement of the proceedings on the motion relating to the Gas Bill (Allocation of Time), MR. SPEAKER proposed, pursuant to the order this day, to put forthwith the Questions necessary to bring the proceedings on the Lords amendment to a conclusion.
      Lords amendment No. 3 agreed to.
      Subsequent Lords amendments agreed to. [Some with Special Entry.]

Rate Support Grants Bill
As amended (in the Standing Committee), considered.
Rate Support Grants Bill
  New Clause 1

    ADJUSTMENTS OF DISTRIBUTION OF BLOCK GRANT
    'In relation to block grant for any year beginning on or after 1st July 1987, section 59(6)(cc) of the Local Government Planning and Land Act 1980 and section 8(3) (C) of the Local Government Finance Act 1982 shall cease to have effect'.—[Mr. Straw.]
    Brought up, and read the First time.
    9.20 pm
    Mr. Jack Straw: I beg to move, That the clause be read a Second time.
    Mr. Speaker: With this it will be convenient to take amendment No. 30, in schedule 1, page 5, line 47, at end insert—
    `14. — (1) Section 8 of the said Act of 1982 shall be amended as follows:
    (2) In subsection (4) after the words "in that paragraph" there shall be inserted "and where he does not so provide he shall give reasons for not doing so to the association of local authorities or local authority by whom representations were made".
    (3) After subsection (3) there shall be inserted—
    "(3A) Expenditure of any description specified in subsection (3B) below shall be disregarded for the purposes of paragraph (CC) of subsection (6) of the said section 59 and in determining whether the extent to which local authorities have or have not complied (or have or have not taken steps to comply) with the guidance referred to in that paragraph.
    (3B) (i) Expenditure grant aided by the Secretary of State under the Local Government Grants (Social Need) Act 1969;
    (ii) Expenditure incurred or grants or loans made under section 138 of the Local Government Act 1972.".'.
    Mr. Straw: Earlier today, Mr. Speaker, you listened to a point of order from me on the fact that the Bill might be the subject of a certificate as a money Bill. I place on record my thanks to the Minister for Environment, Countryside and Local Government for his courtesy in letting me know about that possibility.
    The purpose of new clause 1 is to remove the powers of the Secretary of State to use multipliers for the purpose of abating the grant to authorities whose expenditure exceeds their target figures. This is a useful occasion on which to debate the new clause, as it comes just a day, I understand, before the provisional announcement of the rate support grant settlement for 1987–88. We are informed by a number of newspapers that Ministers are to come to the House bearing gifts of £1 billion or so in anticipation of the general election next year.
    I have always thought that we should beware of Conservative Ministers bearing gifts, especially of the size of £1 billion, even if an election is on the way. It is our intention, when we see the detail of the rate support grant settlement, to examine the small print in the greatest of detail. I shall be delighted if there is a U-turn on the issue of rate support grants. However, I suspect that there will be a small catch somewhere. If Ministers recognise the error of their ways, there is no better way to acknowledge that than by accepting new clause 1. If the Minister were

    109
    to say straightaway that he accepts new clause 1, I should be happy to terminate the debate without a Division. It seems that I shall have no such luck.
    The Local Government Finance Act 1982 gave the Secretary of State the power to issue—in the newspeak of the Government—expenditure guidance—the type of guidance that one receives when one's arm is forced behind one's back and which allows one to go in only one direction— or "targets", as they were commonly known, by which authorities were fined large sums of money if they exceeded the expenditure levels set by the Government. The penalties included a reduction in the grants that would have been payable by the mechanism of multipliers. The system of targets operated for the years 1981–82 to 1985–86. It was abandoned for the current year.
    By the time the order was moved on 20 January this year the then Secretary of State for the Environment, the right hon. Member for Mole Valley (Mr. Baker), had been elevated from the position of Minister to that of Secretary of State. One can scarcely keep pace with his promotions. He said:
    "The most important feature of the settlement next year is that we have got rid of targets. That decision has been commended by the Public Accounts Committee in its valuable report published last week. I believe that Members on both sides of the House welcome the abandonment of targets and penalties. I was repeatedly pressed by all authorities, not just the shire counties, to do that." — [Official Report, 20 January 1986; Vol. 90, c. 42.]
    That was welcomed by Members on both sides of the House. However, the question that we shall tease out tonight is whether that abandonment applies for only one year or for every year. We shall ask whether Ministers intend to keep the weapon of targetry in their locker so that they can have a go at local authorities as and when they please.
    I hope that the Government will accept the new clause. The reason why all hon. Members welcomed the abandonment of targets and penalties was that the system had become desperately unfair and virtually unworkable. It meant that decisions on levels of expenditure were being taken centrally and not by democratically elected councillors. It meant that Ministers had to stand in the shoes of councillors to determine what was a reasonable level of spending. The consequence was wholly to distort authorities' accountability to their ratepayers, because marginal increases in expenditure resulted in a disproportionate increase in rates.
    I know this as a ratepayer in Lambeth. During the last local elections we heard all the time about how wonderful Wandsworth was and how terrible Lambeth was, but we were never told that 85 per cent. of expenditure in Wandsworth was paid for by central Government, compared to only 20 per cent. in Lambeth, whereas the disparities in levels of spending were nothing like that. Over a number of years the Inner London education authority, Camden borough council and the Greater London council faced a situation in which they received no grant as a result of targetry, despite the fact that their areas covered some of the most deprived parts of the United Kingdom.
    Another objection to targets was that the 1981–82 targets were based on authorities' 1979–80 budgets. The 1979–80 budgets were frozen and simply uprated roughly in line with inflation, which caused enormous distortions for low-spending and high-spending authorities.
    110
    The construction of targets changed from year to year. No authority was caught more than Birmingham. In one year, in expectation of the elections which the Conservatives were likely to lose, and indeed lost, Birmingham was brazenly assisted by changes in target and in another year was forced to put up its rates by about 43 per cent.
    Above all, the equalisation objectives of the block grant system were frustrated by targets and penalties. The reason why the rate support grant system as a whole has been brought into disrepute by the Government is fundamentally to do with the target system. If targets were not operated, there could have been a consensus on the system of block grant which the right hon. Member for Henley (Mr. Heseltine) introduced in 1980.
    Amendment No. 30 does two things. It requires the Secretary of State to give his reasons for not granting disregards for the purpose of measuring local authorities' compliance with targets. It requires him to disregard altogether certain items of expenditure when measuring local authority compliance with those targets. Those issues are by no means a matter of history. The amount that individual authorities may earn by way of grant in previous years — certainly including 1983–84 arid onwards—has yet to be decided because we still have not received the supplementary report for 1983–84 and subsequent years.
    In most parts of the local government finance legislation under which Ministers make decisions affecting authorities Ministers are required to give reasons. They are not required to give reasons when it comes to disregard. We believe that it is only fair that authorities should know why applications for disregard have been refused. After all, they soon discover if an application for disregard ha .s been accepted. By definition, they should know why it has been refused.
    We have provided for disregards of certain items of expenditure and have given two examples: first, where expenditure has been grant-aided under the urban programme, and, secondly, where it has been incurred under section 138 of the Local Government Act 1972. By definition, where expenditure has been incurred under the urban programme, the Government have accepted that the project has a substantial priority, otherwise they would not have agreed to fund it. It is ludicrous that the Government agree to fund part of the urban programme, yet expenditure incurred by the authority can be the subject of penalty. Expenditure under section 138 is for expenditure on emergencies and disasters such as the Bradford fire, as my hon. Friend the Member for Bradford, West (Mr. Madden) will confirm, and the Handsworth riots — both of which were entirely legitimate items for disregard.
    9.30 pm
    The fundamental issue raised in this debate is the good faith of the Government. On 20 January the then Secretary of State used words which were florid even by his standards, referring not to a decision temporarily to set targets aside but to their "abandonment". If the Government have made such a decision, it is entirely justified that that abandonment should be put into law by new clause 1.
    Ms. Harriet Harman: I support new clause I and amendment No. 30. My hon. Friend the Member for

    111
    Blackburn (Mr. Straw) has said that the system is unfair and unworkable. I wish to give just one illustration of that unfairness in relation to Southwark council.
    Southwark council is threatened with a loss of £6·84 million in rate support grant between 1985–86 and 1986–87. That is 10 per cent. of the Government's contribution, which has also already shrunk by almost half — from £83,300,000 in 1978–79 to £42,532,000 in 1985–86. I hope that the Government will think again and not make that further 10 per cent. cut in an already greatly shrunken contribution.
    The proposed cut is inconsistent because the Paymaster General himself has recognised the problems of Southwark by sending in a task force which is supposed to sort out the problems of deprivation. He said that he had picked as task force areas
    "eight areas which are diverse in character but whose residents all share problems of deprivation and lack of opportunities".—[Official Report, 6 February 1986; Vol. 91, c. 446.]
    He said that all the areas suffered from a wide range of long-standing problems.
    A Minister from the Department of the Environment has also recognised the problems of deprivation in Southwark. The Parliamentary Under-Secretary of State, the hon. Member for Ealing, Acton (Sir G. Young), wrote to the council saying that he recognised that the deprivation was such that Southwark qualified as one of a handful of areas whose needs compared with those of neighbouring programme status authorities.
    The inconsistency of the Government's attitude is heightened by the fact that the then Secretary of State, now Secretary of State for Education and Science, told local authorities as recently as March this year that they should actually spend more. Yet Southwark is now to have 10 per cent. lopped off the Government's rate support grant contribution.
    Ironically, the task force was supposed to be an example of co-operation among different Departments working together to meet the needs of one deprived area. Yet Government Departments are not only failing to cooperate but seem actually to be working against one another. One Department is lopping off £6·84 million while another gives back £1 million. That makes no sense at all.
    Not only is there no co-operation between Departments, but there is not even consistency within Departments. The Parliamentary Under-Secretary of State recognises the deprivation in Southwark and, as he says in his letter of 19 August 1985,
    "the determination of the Council to make good use of whatever resources are made available,"
    while the Secretary of State seeks to penalise the authority by taking money away from it.
    I hope that the Government will realise the effect that the threatened cut would have on jobs and services in Southwark, reconsider the amount to be taken by their curious system which they call multipliers and which really is a system of subtraction, accept the new clause and the amendment, and think again about the proposed cut in rate support grant to Southwark.
    Mr. David Clelland: Local authorities are entitled to be given reasons for decisions that affect their budget and services. The changes made to local
    112
    government finance by this Government—and they have been fast and furious over the past few years — often mean that local authorities are caught out and are therefore disadvantaged through no fault of their own. That is what happened to the city of Newcastle upon Tyne.
    In 1982–83, Newcastle city council decided to amend its accounting practice for the treatment of income from other local education authorities in respect of students attending advanced further education courses in Newcastle. Prior to 1982–83, the income taken into account in respect of any one financial year related to the previous academic year. For example, in the financial year 1981–82, income was taken into account for the academic year September 1980 to August 1981.
    This change in practice meant that for 1982–83 onwards the income related to the financial year. For example, in 1985–86, income taken into account was for the summer term of the academic year 1984–85 and the winter and spring terms of the academic year 1985–86. For one year only —1982–83 — the income for five terms was taken into account due to the change in practice. That was for the academic year 1981–82 and two terms in 1982–83. That led to a one-off gain of £2 million which, in accordance with standard accounting practice, was treated in the accounts as a prior year adjustment. In other words, the previous year's figures were changed rather than those in 1982–83.
    The budget return for 1982–83 included this income, which has had the effect of reducing total expenditure for block grant purposes and, because the city was subject to negative grant rates, of increasing grant entitlement. It was generally understood that this was the correct treatment of prior year adjustments for block grant purposes. Subsequently, the budget for 1982–83 formed the basis of the city's target for 1983–84, which itself formed the basis of the targets for 1984–85 and 1985–86. As a result, the city's targets were understated in each of these years, and that lost the city several million pounds in block grant.
    The city did not complain at the time because it was believed that the budget had been returned on the correct basis and that, when the prior year adjustment was made, that would gain the city grant, partly but by no means completely offsetting the effect of the reduced target.
    In February 1985, the Department of the Environment informed local authorities that prior year adjustments were neutral for block grant. That was intended to be helpful to local authorities, but it was probably not envisaged that it would have the kind of effect that it had on Newcastle — that income items such as the city's adjustment would not attract grant. The Department of the Environment invited authorities to amend block grant claims going back to 1982–83 to take advantage of this interpretation. Accordingly, the city amended its grant claims but also requested the Department to accept an amended budget return and to recalculate the city's grant entitlement on the basis of revised targets.
    The council wrote in May 1985—three Secretaries of State for the Environment ago — asking for its block grant to be recalculated on the basis of the amended forms. In July 1985 — two Secretaries of State for the Environment ago — it was told that the Secretary of State
    "would carefully consider their representations for disregards as soon as possible, but anyway before final decisions on

    113
    grant abatement for relevant years, and that only initial consideration had been given before making and laying the Rate Support Grant Supplementary Report 1985–86."
    The council was also told that
    "the Secretary of State had always recognised that the reference to 1982–83 budgets carried a risk that anomalous features could be perpetuated but that he thought in most cases authorities should be expected to live with them, though if there were a truly exceptional case, that could be dealt with by way of a disregard under section 8(4) of the 1982 Act."
    On 19 December the Department wrote to say that the Secretary of State had considered the representations but decided not to make any provision for such a disregard. No reasons were given. The council thought that it was a harsh, unjustified decision, particularly in view of the injustice of penalties, and it was surprised that there was no explanation. It pointed out that there were precedents for granting such disregards and directed the Secretary of State's attention to the supplementary report of 1982–83 and asked why he had not followed that precedent. The response to that letter was simply to say that it was not the Secretary of State's practice to give his reasons for refusing to grant a disregard.
    The council was and is entitled to a full explanation. It wrote to the Members of Parliament for the city, and I wrote on their behalf to the Secretary of State, asking for information on at least two occasions, and then I tabled a parliamentary question. The reply I received was:
    "The Secretary of State does not consider that he is under any duty to explain his reasons for refusing to grant Newcastle a disregard."
    One man has the power to affect extremely damagingly the finances of major cities, with all the consequences that that will have on their citizens. Yet he does not have to explain why he has made his decisions, even to the House. That cannot be right. Amendment No. 30 attempts to rectify and restore the rights of Members of Parliament to get answers to questions, and I commend it to the House.
    Mr. William Cash: I wish to speak briefly on a question pertaining to my constituents. Contrary to some of the generally accepted conventional wisdom which we hear from the Opposition, some Labour-controlled county councils, including Staffordshire, have benefited enormously from Government policies on rate support grant. They do not use that money wisely. In April Staffordshire county council received a £9·2 million guarantee, followed by an uplift to about £11 million, and the money for the Stoke-on-Trent garden festival, which is about £30 million. Yet the borough of Stafford has not increased the rates significantly or at all for the past four years, and the whole weight and burden of the county's financial affairs fall heavily on my constituents.
    Education takes up 70 per cent. of the entire budget and the district auditor has criticised the county council for the way in which it has arrived at its figures, so one is left feeling extremely worried about education and the appalling way in which the county council's finances are being run. Indeed, it has reached the point when the Bishop of Stafford, the young farmers' clubs and others have had to run a campaign, reminding Staffordshire county council of its 1985 election manifesto, in which it gave a specific commitment to maintain the level of expenditure on voluntary organisations. Since then the council has closed a special school, despite a petition signed by 15,000 people, many of whom came from the lower socio-economic grouping of Stoke-on-Trent, against the closure. Furthermore, the council has been
    114
    parsimonious and miserly in dealing with citizens advice bureaux. Staffordshire is about the only county in England and Wales which made no contribution to the CAB. I had to fight to ensure that the money was paid by the county council.
    Furthermore, more recently, the schools letting policy has caused great problems for the scouts and other voluntary organisations. Finally, the Marriage Guidance Council came to me recently and said that it had merely received £165 at a time when divorce rates are high and when the opportunities that should be made available through moneys from the county council are not forthcoming. The chairman of the Marriage Guidance Council is extremely worried about whether it could continue. The Opposition parrot on about cuts and cuts. I invite the Minister to look at the amount of money that has gone to Staffordshire and then to consider the amount that has been paid out by my constituents. They pay more money into the coffers of Staffordshire county council than any other party, yet the county council is imposing swingeing cuts on education and proposes to close a huge number of schools. I am fighting that proposal for reasons I have already given — the money has been made available by this Government to Staffordshire county council, yet all that it does is to complain and whinge about the amount of money that it would like to have.
    Staffordshire people are enterprising. They run many small businesses and also highly sophisticated and well-run companies such as GEC, Evode, Lotus and others. They are contributing to the wealth of this country and they are providing opportunities for my constituents. It is hypocritical in the extreme for the Opposition to complain about the amount of money that is made available to county councils when the Staffordshire county council in particular receives so much but regrettably spends it so badly.
    9.45 pm
    Mr. Joseph Ashton: My main contribution will be on another amendment. However, I should like to put a question to the Minister on this clause. Nottinghamshire county council went to court in March to get a judgment against the Minister. The case is now to be heard in October. The sum involved is £18 million. Will the Minister confirm that the county council will still be able to go to court if the Bill is passed, or will this retrospective legislation put a stop to that?
    The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): As the hon. Member for Blackburn (Mr. Straw) pointed out, the effect of the new clause would be to render inoperative the Secretary of State's current powers to use both targets and hold back to influence local government expenditure in the years beginning on or after 1 April 1987. As he rightly pointed out, for the year 1986–87 my right hon. Friend the Secretary of State decided not to issue expenditure guidance, as we term it, and therefore did not use either the operation of targets or hold back. However, we do not believe that it would be a good idea to take these provisions off the statute book. We profoundly hope that it will be unnecessary to introduce targets in subsequent years, but that depends upon the level at which local authorities spend. Furthermore, at some future stage there may be general economic circumstances or conditions which could require local authorities to be subjected to some form of control.

    115
    I thank my hon. Friend the Member for Stafford (Mr. Cash) for his clear exposition of the great difficulties in which Staffordshire county council has placed his constituents.
    Several Hon. Members rose—
    Mr. Speaker: Order. I must ask for only one hon. Member at a time.
    Mrs. Rumbold: My right hon. Friend the Secretary of State has no plans, as far as I know, to reintroduce targets and holdback.
    The Opposition have made a number of points in support of amendment No. 30. I refer in particular to the hon. Member for Tyne Bridge (Mr. Clelland). He said that the Secretary of State should be required by law to say why he has turned down requests for disregard under section 8(4) of the Local Government Finance Act 1982. My right hon. Friend the Secretary of State is not required to give reasons. His general policy is that he does not wish to do so, and he does not.
    The hon. Member for Tyne Bridge gave a long list of the difficulties in which Newcastle finds itself, but the House will appreciate that an enormous volume of work would be involved if the Secretary of State were to give reasons in the case of each application for disregard. Each local authority has the right to ask for disregards under section 8(4). In addition, local authority associations can ask for disregards. Over the past three years, about 200 requests for disregards from local authorities and associations have been received. Giving reasons for decisions on all these would have amounted to a great deal of work for my right hon. Friend the Secretary of State. The House will appreciate that many authorities have asked for several separate disregards, and these range from the most general categories of expenditure to specific local issues such as compensation for payments to the local mushroom farm.
    Mr. Clelland: How many authorities asked for reasons why they were turned down?
    Mrs. Rumbold: If every authority asked for specific reasons, we would have to do an enormous amount of work. Therefore, as a general policy, which my right hon. Friend the Secretary of State is able to exercise under the legislation, he has decided not give reasons.
    Mr. Straw: When applications for disregards are made, Ministers always say that they will consider them seriously. That means that in every case where an application for disregard is made officials in the Department will make a submission to Ministers as to whether it should be accepted. The Minister is acknowledging that that is the case. If so, it should not involve considerable work for the Secretary of State to tell local authorities the reasons, in the submission from officials to Ministers, with which Ministers have concurred.
    Mrs. Rumbold: I disagree with the hon. Gentleman. It is true that all applications for disregards are given extremely careful consideration by my right hon. Friend, but it is equally true that, were reasons specifically given, it would lead almost inevitably to endless requests for further considerations and reasons. Therefore, as the
    116
    present legislation allows my right hon. Friend the Secretary of State not to give general reasons, he wishes to continue with that policy.
    Mr. Simon Hughes: The Minister's answer will not be acceptable to many people, given that there will at least be some guidelines that apply consistency between one decision and another. If that is the case, would it not be possible to show which of the guidelines render an application for disregard unacceptable?
    Mrs. Rumbold: It is clear that the hon. Member for Southwark and Bermondsey (Mr. Hughes) did not listen to what I said. The policy of my right hon. Friend the Secretary of State is to give careful consideration to requests for disregards, but he does not wish to give his reasons for granting or refusing disregards. That is an allowable policy under the legislation.
    The second part of the new clause would introduce an automatic disregard for all expenditure grants under the urban programme and all expenditure on emergencies under section 138 of the Local Government Act 1972.
    The hon. Member for Peckham (Ms. Harman) mentioned Southwark. The House will know that my right hon. Friend the Secretary of State has granted a disregard for year-on-year increases in urban programme expenditure by partnership and programme authorities for each of the years from 1981–82 to 1985–86. However, my right hon. Friend has not received any general request to disregard expenditure under section 138 of the 1972 Act, although he has received requests for specific disregards —for example, in the case of the fire at the Bradford football ground. He gives all these requests careful consideration before he reaches his decision. I hope that the House will agree that it would not be desirable to enshrine these two disregards in primary legislation.
    Ms. Clare Short: I understand that a request for disregard for the cost of the Handsworth riots was turned down. If so, how does the Minister justify rejecting requests for amendment when the Government have not behaved reasonably over appeals for disregard in the past?
    Mrs. Rumbold: If the hon. Lady wants my right hon. Friend the Secretary of State to reconsider the matter of the Handsworth riots, she is at liberty to ask the authority to make that request, and my right hon. Friend will look at the matter carefully. There is no point at which careful consideration is not given to a request for a disregard.
    In response to the right hon. Member for Bassetlaw (Mr. Ashton) I should say that the Bill will not prevent Nottingham county council from bringing its case, but it will deny it a remedy.
    Mr. Straw: With the leave of the House, I shall reply briefly to the points made by the Under-Secretary of State. Her closing remarks will go down as a classic in the annals of our parliamentary debates. She said that Nottingham county council could still go to court but that the Bill would deny a remedy.
    Mr. Simon Hughes: Nottingham county council might even get a judgment in its favour, but, according to the Minister, it would still be denied a remedy. Who will then pay for that?
    Mr. Straw: As my hon. Friend the Member for Peckham (Ms. Harman) has said, a surcharge will no

    117
    doubt be levied on the councillors. But we shall come to the retrospective aspects of the Bill when we discuss amendments Nos. 1 and 3. Nothing could sum up better the Government's cynicism than the Under-Secretary of State's remarks. We found her reasons for refusing to accept amendment No. 30 and new clause 1 wholly unsatisfactory. If it is not, to use the Government's weasel words, their present intention to reintroduce targets, they should remove targetry from the statute book. We shall press the new clause to a Division.
    Question put, That the clause be read a Second time:–
    The House divided: Ayes 175, Noes 239.

    Division No. 271]

    [9.57 pm

    AYES

    Alton, David

    Fisher, Mark

    Anderson, Donald

    Flannery, Martin

    Archer, Rt Hon Peter

    Foot, Rt Hon Michael

    Ashby, David

    Forrester, John

    Ashdown, Paddy

    Foster, Derek

    Ashton, Joe

    Foulkes, George

    Atkinson, N. (Tottenham)

    Fraser, J. (Norwood)

    Bagier, Gordon A. T.

    Freeson, Rt Hon Reginald

    Banks, Tony (Newham NW)

    Garrett, W. E.

    Barnett, Guy

    George, Bruce

    Barron, Kevin

    Gilbert, Rt Hon Dr John

    Beckett, Mrs Margaret

    Gould, Bryan

    Bell, Stuart

    Gourlay, Harry

    Benn, Rt Hon Tony

    Hamilton, James (M'well N)

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

    Hamilton, W. W. (Fife Central)

    Bidwell, Sydney

    Hancock, Michael

    Blair, Anthony

    Hardy, Peter

    Boothroyd, Miss Betty

    Harman, Ms Harriet

    Boyes, Roland

    Harrison, Rt Hon Walter

    Bray, Dr Jeremy

    Hart, Rt Hon Dame Judith

    Brown, Gordon (D'f'mline E)

    Heffer, Eric S.

    Brown, Hugh D. (Provan)

    Hogg, N. (C'nauld & Kilsyth)

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

    Home Robertson, John

    Buchan, Norman

    Hoyle, Douglas

    Caborn, Richard

    Hughes, Robert (Aberdeen N)

    Callaghan, Jim (Heyw'd & M)

    Hughes, Roy (Newport East)

    Campbell-Savours, Dale

    Hughes, Sean (Knowsley S)

    Carter-Jones, Lewis

    Hughes, Simon (Southwark)

    Clark, Dr David (S Shields)

    Janner, Hon Greville

    Clarke, Thomas

    John, Brynmor

    Clay, Robert

    Jones, Barry (Alyn & Deeside)

    Clelland, David Gordon

    Kaufman, Rt Hon Gerald

    Clwyd, Mrs Ann

    Kennedy, Charles

    Cocks, Rt Hon M. (Bristol S)

    Kilroy-Silk, Robert

    Cohen, Harry

    Kirkwood, Archy

    Coleman, Donald

    Lambie, David

    Conlan, Bernard

    Lamond, James

    Cook, Robin F. (Livingston)

    Leadbitter, Ted

    Corbett, Robin

    Leighton, Ronald

    Corbyn, Jeremy

    Lewis, Terence (Worsley)

    Cox, Thomas (Tooting)

    Litherland, Robert

    Craigen, J. M.

    Lloyd, Tony (Stretford)

    Cunliffe, Lawrence

    Lofthouse, Geoffrey

    Dalyell, Tam

    Loyden, Edward

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

    McCartney, Hugh

    Deakins, Eric

    McDonald, Dr Oonagh

    Dewar, Donald

    McKelvey, William

    Dixon, Donald

    MacKenzie, Rt Hon Gregor

    Dobson, Frank

    McTaggart, Robert

    Dormand, Jack

    Madden, Max

    Douglas, Dick

    Marek, Dr John

    Dubs, Alfred

    Marshall, David (Shettleston)

    Duffy, A. E. P.

    Martin, Michael

    Dunwoody, Hon Mrs G.

    Mason, Rt Hon Roy

    Eadie, Alex

    Maynard, Miss Joan

    Eastham, Ken

    Michie, William

    Evans, John (St. Helens N)

    Mikardo, Ian

    Ewing, Harry

    Millan, Rt Hon Bruce

    Fatchett, Derek

    Miller, Dr M. S. (E Kilbride)

    Faulds, Andrew

    Morris, Rt Hon A. (W'shawe)

    Field, Frank (Birkenhead)

    Nellist, David

    Fields, T. (L'pool Broad Gn)

    Oakes, Rt Hon Gordon

    118

    O'Brien, William

    Short, Ms Clare (Ladywood)

    O'Neill, Martin

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

    Park, George

    Silkin, Rt Hon J.

    Parry, Robert

    Skinner, Dennis

    Patchett, Terry

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

    Pavitt, Laurie

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

    Pendry, Tom

    Soley, Clive

    Penhaligon, David

    Spearing, Nigel

    Pike, Peter

    Stott, Roger

    Powell, Raymond (Ogmore)

    Strang, Gavin

    Radice, Giles

    Straw, Jack

    Randall, Stuart

    Thompson, J. (Wansbeck)

    Raynsford, Nick

    Thome, Stan (Preston)

    Redmond, Martin

    Tinn, James

    Rees, Rt Hon M. (Leeds S)

    Torney, Tom

    Richardson, Ms Jo

    Wainwright, R.

    Roberts, Ernest (Hackney N)

    Wallace, James

    Robertson, George

    Warden, Gareth (Gower)

    Rogers, Allan

    Wareing, Robert

    Rooker, J. W.

    White, James

    Ross, Ernest (Dundee W)

    Winnick, David

    Rowlands, Ted

    Woodall, Alec

    Sedgemore, Brian

    Young, David (Bolton SB)

    Sheerman, Barry

    Sheldon, Rt Hon R.

    Tellers for the Ayes:

    Shields, Mrs Elizabeth

    Mr. Ron Davies and

    Shore, Rt Hon Peter

    Mr. Allen McKay.

    NOES

    Adley, Robert

    Clegg, Sir Walter

    Alexander, Richard

    Cockeram, Eric

    Alison, Rt Hon Michael

    Coombs, Simon

    Amess, David

    Cope, John

    Ancram, Michael

    Corrie, John

    Ashby, David

    Couchman, James

    Aspinwall, Jack

    Critchley, Julian

    Atkins, Robert (South Ribble)

    Crouch, David

    Atkinson, David (B'm'th E)

    Currie, Mrs Edwina

    Baker, Nicholas (Dorset N)

    Dickens, Geoffrey

    Baldry, Tony

    Dorrell, Stephen

    Batiste, Spencer

    Dover, Den

    Beaumont-Dark, Anthony

    du Cann, Rt Hon Sir Edward

    Bellingham, Henry

    Dunn, Robert

    Bendall, Vivian

    Edwards, Rt Hon N. (P'broke)

    Benyon, William

    Evennett, David

    Bevan, David Gilroy

    Eyre, Sir Reginald

    Biffen, Rt Hon John

    Fairbairn, Nicholas

    Biggs-Davison, Sir John

    Fallon, Michael

    Blackburn, John

    Farr, Sir John

    Blaker, Rt Hon Sir Peter

    Fletcher, Alexander

    Bonsor, Sir Nicholas

    Fookes, Miss Janet

    Boscawen, Hon Robert

    Forman, Nigel

    Bottomley, Mrs Virginia

    Fox, Sir Marcus

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

    Franks, Cecil

    Bowden, Gerald (Dulwich)

    Fry, Peter

    Boyson, Dr Rhodes

    Gale, Roger

    Braine, Rt Hon Sir Bernard

    Gilmour, Rt Hon Sir Ian

    Brandon-Bravo, Martin

    Glyn, Dr Alan

    Bright, Graham

    Goodhart, Sir Philip

    Brinton, Tim

    Gower, Sir Raymond

    Brown, M. (Brigg & Cl'thpes)

    Greenway, Harry

    Bruinvels, Peter

    Gregory, Conal

    Bryan, Sir Paul

    Griffiths, Sir Eldon

    Buchanan-Smith, Rt Hon A.

    Ground, Patrick

    Buck, Sir Antony

    Grylls, Michael

    Budgen, Nick

    Hamilton, Hon A. (Epsom)

    Bulmer, Esmond

    Hamilton, Neil (Tatton)

    Burt, Alistair

    Hargreaves, Kenneth

    Butler, Rt Hon Sir Adam

    Havers, Rt Hon Sir Michael

    Butterfill, John

    Hayhoe, Rt Hon Barney

    Carlisle, Kenneth (Lincoln)

    Heddle, John

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

    Henderson, Barry

    Carttiss, Michael

    Higgins, Rt Hon Terence L.

    Cash, William

    Hirst, Michael

    Chapman, Sydney

    Holland, Sir Philip (Gedling)

    Chope, Christopher

    Hunter, Andrew

    Churchill, W. S.

    Hurd, Rt Hon Douglas

    Clark, Dr Michael (Rochford)

    Jenkin, Rt Hon Patrick

    Clark, Sir W. (Croydon S)

    Jopling, Rt Hon Michael

    Clarke, Rt Hon K. (Rushcliffe)

    King, Roger (B'ham N'field)

    119

    Knight, Dame Jill (Edgbaston)

    Newton, Tony

    Lawler, Geoffrey

    Nicholls, Patrick

    Lawrence, Ivan

    Norris, Steven

    Lee, John (Pendle)

    Onslow, Cranley

    Lennox-Boyd, Hon Mark

    Oppenheim, Rt Hon Mrs S.

    Lester, Jim

    Osborn, Sir John

    Lightbown, David

    Ottaway, Richard

    Lilley, Peter

    Page, Sir John (Harrow W)

    Lloyd, Sir Ian (Havant)

    Page, Richard (Herts SW)

    Lloyd, Peter (Fareham)

    Patten, Christopher (Bath)

    Lord, Michael

    Patten, J. (Oxf W & Abgdn)

    Luce, Rt Hon Richard

    Pawsey, James

    Lyell, Nicholas

    Percival, Rt Hon Sir Ian

    MacKay, Andrew (Berkshire)

    Pollock, Alexander

    Maclean, David John

    Porter, Barry

    McLoughlin, Patrick

    Portillo, Michael

    McNair-Wilson, M. (N'bury)

    Powell, William (Corby)

    Major, John

    Powley, John

    Malins, Humfrey

    Price, Sir David

    Malone, Gerald

    Proctor, K. Harvey

    Maples, John

    Raffan, Keith

    Marland, Paul

    Rathbone, Tim

    Marshall, Michael (Arundel)

    Rees, Rt Hon Peter (Dover)

    Mather, Carol

    Renton, Tim

    Maude, Hon Francis

    Rhodes James, Robert

    Mayhew, Sir Patrick

    Rhys Williams, Sir Brandon

    Mellor, David

    Ridsdale, Sir Julian

    Merchant, Piers

    Rippon, Rt Hon Geoffrey

    Miller, Hal (B'grove)

    Roberts, Wyn (Conwy)

    Mills, Iain (Meriden)

    Robinson, P. (Belfast E)

    Miscampbell, Norman

    Roe, Mrs Marion

    Mitchell, David (Hants NW)

    Rossi, Sir Hugh

    Moate, Roger

    Rost, Peter

    Monro, Sir Hector

    Rowe, Andrew

    Montgomery, Sir Fergus

    Rumbold, Mrs Angela

    Moore, Rt Hon John

    Ryder, Richard

    Morris, M. (N'hampton S)

    Sackville, Hon Thomas

    Morrison, Hon C. (Devizes)

    Sainsbury, Hon Timothy

    Moynihan, Hon C.

    Sayeed, Jonathan

    Murphy, Christopher

    Shaw, Sir Michael (Scarb')

    Neale, Gerrard

    Shelton, William (Streatham)

    Nelson, Anthony

    Shepherd, Colin (Hereford)

    120

    Shepherd, Richard (Aldridge)

    van Straubenzee, Sir W.

    Shersby, Michael

    Vaughan, Sir Gerard

    Silvester, Fred

    Viggers, Peter

    Sims, Roger

    Wakeham, Rt Hon John

    Skeet, Sir Trevor

    Waldegrave, Hon William

    Smith, Tim (Beaconsfield)

    Walden, George

    Speed, Keith

    Walker, Bill (T'side N)

    Speller, Tony

    Wall, Sir Patrick

    Spencer, Derek

    Waller, Gary

    Spicer, Michael (S Worcs)

    Ward, John

    Squire, Robin

    Wardle, C. (Bexhill)

    Stanbrook, Ivor

    Warren, Kenneth

    Steen, Anthony

    Watts, John

    Stern, Michael

    Wells, Bowen (Hertford)

    Stevens, Lewis (Nuneaton)

    Wells, Sir John (Maidstone)

    Stewart, Andrew (Sherwood)

    Wheeler, John

    Stokes, John

    Whitfield, John

    Taylor, John (Solihull)

    Winterton, Nicholas

    Taylor, Teddy (S'end E)

    Wolfson, Mark

    Temple-Morris, Peter

    Wood, Timothy

    Terlezki, Stefan

    Woodcock, Michael

    Thomas, Rt Hon Peter

    Yeo, Tim

    Thompson, Donald (Calder V)

    Young, Sir George (Acton)

    Thompson, Patrick (N'ich N)

    Younger, Rt Hon George

    Thorne, Neil (llford S)

    Thornton, Malcolm

    Tellers for the Noes

    Townend, John (Bridlington)

    Mr. Tony Durant and

    Trippier, David

    Mr. Michael Neubert

    Twinn, Dr Ian

    Question accordingly negatived.
    It being after Ten o'clock, further consideration of the Bill stood adjourned.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Rate Support Grants Bill, the Insolvency Bill [Lords] and the Company Directors Disqualification Bill [Lords] may he proceeded with, though opposed, until any hour.—[Mr. Boscawen.]

Rate Support Grants Bill
Again considered.
Rate Support Grants Bill
  Clause 1

    VALIDATION OF APPROVED BLOCK GRANT DETERMINATIONS
    Mr. Roland Boyes: I beg to move amendment No. 1, in page 1, line 5, leave out Clause 1.
    Mr. Speaker: With this it will be convenient to take amendment No. 3, in page 1, line 12, at end insert—
    '(2) The multiplier set against Birmingham in the Appendix to Annex G of the Rate Support Grant Report (England) 1986–87 shall he deemed to be 1·164156'.
    Mr. Boyes: After lengthy proceedings in Committee, we are now back at first base. Birmingham will not get back the £7·2 million stolen from it unless clause I is deleted, and that is the purpose of amendment No. 1.
    In Committee we attempted simply to change the date from 21 August 1986 to 31 December 1985, but that the Government found unacceptable. The reason why we wished to change that date related particularly to the consequences for Birmingham.
    How the calculation that affected Birmingham's budget was made was argued at length in Committee and I do not wish to rehearse that now. However, if the Government had accepted our amendment, it would have left their main intention intact but allowed claims by other local authorities for wrongful treatment in the 1986–87 report when multiplers therein contained would not be retrospectively validated. We have no alternative now but to argue and vote for the deletion of clause 1.
    Let us examine the nature of multipliers. They are complex, and, as demonstrated by the Birmingham case, can be used in a most vindictive way. During the debate on multipliers in Committee on 1 April 1980, which is a significant date when one considers what has happened since, my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley)— little did he know that the great city that he has the honour to represent would be so hard hit by a system whose application he described as complicated—said:
    "More dangerous than that are the circumstances in which I understand they are to be used … One problem is the very flexibility of the multiplier system. Flexibility is the Government's word, but flexibility, while it is beloved by Governments and civil servants, is a matter of which Parliament ought to be particularly wary. One man's flexibility is another man's capriciousness. If something can be used flexibly, it means that the Minister can use it in a variety of ways."
    My right hon. Friend also said:
    "They are crucial to the scheme and potentially damaging to some local authorities. They place in the hands of any Government arbitary powers".—[Official Report, Standing Committee D, 1 April 1980; c. 1044–46.]
    What prophetic words those turned out to be.
    One of the problems for local authorities and Members of Parliament, and, above all, the public, is that the year-by-year application of multipliers has been different. We debated at length amendments to the Bill in which we argued for greater clarification of the local government finance system, which is getting more and more incomprehensible. Apart from a handful of experts who
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    understand the system, for the rest of us confusion abounds. The Bill is about to make matters worse because of the Secretary of State's desire for an unnecessary and inordinate amount of discretion.
    What was the main purpose of introducing multipliers in the first place? I ask that because they have been used on only two occasions for caps. The main intention was for safety net purposes, to ensure that local authorities did not lose a great deal of grant from one year to the next. "Complex" was the word used by the Minister in 1982 when discussing multipliers. That view was confirmed by the Audit Commission, which found that
    "it had in practice become so complex that many officers and members of local authorities had abandoned the attempt to understand it fully, while others had concentrated on features that could be exploited to the advantage of a particular authority."
    My understanding of the situation is that Birmingham's case is not complicated. In Committee the Under-Secretary of State appeared to allege that Birmingham had made up the figure of £7·million. "Plucked out of the air" became the phrase bandied about in Committee. However, the mode of calculation of the £7·2 million was explained by my hon. Friend the Member for Birmingham Hodge Hill (Mr. Davis) when he said:
    "Let me tell the hon. Lady now so that she can understand. The Secretary of State estimated a base grant of £158 million for 1985–86 using contrived assumptions, whereas in the Secretary of State's own projections the grant entitlement for 1985–86 was expected to be £165·2 million. The difference is £7·2 million and that is the amount that we are discussing". —[Official Report, Standing Committee G, 1 July 1986; c. 19.]
    10.15 pm
    Birmingham is the only council to go to court, but many more councils are affected by the Government's decision. Thirty shire counties, 121 shire districts, eight metropolitan districts and one outer London borough are involved. The sum total involved is about £150 million, but only Birmingham has been to court. I understand that Nottingham wishes to go to court—but that is another matter.
    This wretched Bill has been introduced because of the action of one local authority, and it involves £7·2 million which could and should have been found from the Department of the Environment's coffers. The entire £150 million could have been found from recycling grant cash.
    The Government have used retrospective action on a number of occasions. The nature of retrospective action in this case causes concern to the Opposition. In the past in their dealings with local government this Government have changed the law relating to local authority mortgages. That was done by section 7 of the Local Government Act 1986. Section 91 of the Local Government Act 1985 makes unlawful payments by the GLC and metropolitan county councils to voluntary organisations and other local authorities after 24 July 1984. Section 8 of the Local Government (Finance) Act 1982 legalises the effective reduction in local authority block grant for those who have not complied with expenditure guidance issued previously by the Secretary of State in the 1981–82 financial year. In addition, the present: Secretary of State for the Environment, while Secretary of State for Transport, legislated to overturn a decision by the courts in a case brought by the GLC involving payments to London Transport.
    The clause is designed to override Mr. Justice Mann's decision in the Birmingham case. It will also prevent local

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    authorities, which are considering the 1986–87 rate support grant order, from doing so. It also validates all previous block grant determinations.
    There is sometimes a case for retrospective action by Parliament. I give but three examples—to correct an administrative oversight, to put right an administrative mistake, and to regularise wartime acts. Remedial retrospective action is normally unobjectionable. There is nothing unconstitutional about it, because Wade and Phillips in their book "Constitutional and Administrative Law" said:
    "It follows from the supremacy of Parliament that Acts may have retrospective operation. But to change the character of past transactions carried out on the faith of the then existing law is repugnant to the conception of the rule of law."
    In an article on retrospective legislation and the rule of law in Britain, J. W. Bridge said:
    "It has been argued in this article that experience in Britain has shown that it is not desirable to prohibit retroactive legislation in all circumstances. Retrospective legislation may be used where justice demands it to protect persons from harm to themselves or their property where that harm results from an unforeseeable or unintended effect of the law or, as in the case of taxation, where different considerations apply. But apart from these exceptional and justifiable circumstances retrospective legislation does offend against the principles of the Rule of Law."
    That might not be a relevant example, but the Government's retrospective action tonight certainly offends the people of Birmingham. They are being denied the product of spending £7·2 million which has been taken from them by the Secretary of State. Birmingham is in a region of growth in unemployment and could make good use of the money. We believe it essential to delete clause 1.
    Mr. Terry Davis: I shall speak more briefly than I had intended. I wish strongly to support the amendment moved by my hon. Friend the Member for Houghton and Washington (Mr. Boyes) and amendment No. 3, which would substitute a different figure for the multiplier used for the calculation of the rate support grant for Birmingham for this year.
    During our discussion in Committee, it was established that from the time of the first announcement of the principles of this year's rate support grant a year ago, throughout the summer and the autumn environment Ministers discussed the basis of the RSG for this year with reference to last year's actual rate support grant. All local authorities thought that this year's RSGs would be based on the actual grants payable last year. That was the position throughout all the meetings and consultations with representatives of local authorities until the Secretary of State's announcement in December 1985.
    What happened between the end of the consultations and that announcement, as became clear in Committee, was that some London authorities had made representations to the Secretary of State, who then changed his mind and based this year's RSGs not on the actual grants payable in 1985–86, but on what were called deemed grants — notional grants, artificial and contrived figures, dreamed up by the Secretary of State. I think that the word "dreamed" could be used instead of "deemed". That announcement came as a bolt from the blue to all local authorities.
    For Birmingham, the difference between using the actual grant payable in 1985–86 and the deemed grant was
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    £7·2 million. There is a tremendous feeling in the city of Birmingham about what has been called the robbery of £7·2 million. After protests to the Secretary of State, the city council decided to go to court. It is now well known that it won its case. A few days previously, the Secretary of State backed down and the Minister came to the House and told us that a Bill was being introduced. When the case came to court, the Government conceded the strength of Birmingham's case, and as a result an order was made in favour of Birmingham and the Department was ordered to pay the city's costs. The Secretary of State's representative in court admitted that the Secretary of State had acted illegally.
    This Bill makes legal something that a court of law judged to be illegal. That is objectionable in any circumstances, but especially when it costs an individual or a group of people a large sum of money. The hon. Member for Tatton (Mr. Hamilton) may shake his head, but it was admitted in Committee—he was not there—that the effect of the Bill would be to make legal something that had been judged illegal and which the barrister representing the Secretary of State conceded was illegal. I am not questioning the good faith of Ministers; I accept what was said in Committee about their having taken a decision in good faith, being advised that they were wrong, conceding that and paying the city of Birmingham's costs. But this Bill takes away the fruits of that action; it means that Birmingham will not get £7·2 million.
    We moved several amendments in Committee that would have given Birmingham the money that we regard as rightfully belonging to the city council. Amendment No. 3 would provide a means of giving Birmingham its £7·2 million, but in a different way. We tried to move amendments in Committee to persuade the Government to respect decisions made in a court of law on proceedings that had begun before the Bill was introduced into the House. That was not acceptable to the Government. We introduced other amendments that would have given the money to the city of Birmingham, but they were not acceptable either. I am not sure whether these amendments will be acceptable to the Government, but I suspect not. Amendment No. 3 would substitute for the existing multiplier used in the calculation of RSG for Birmingham —1·196046—a multiplier of 1·164156. The result would be straightforward—to give Birmingham its £7·2 million in RSG.
    My hon. Friends and I came to the House this afternoon in a mood that relected the anger of the people of Birmingham, especially the city councillors, and prepared to discuss at length, through the night and the morning if necessary, the effects of the removal of £7·2 million from the city and to describe just what that means for our constituents—
    Mr. Jeff Rooker: And in detail.
    Mr. Davis: Yes, in detail.
    We have, however, received a letter from the Minister for Environment, Countryside and Local Government telling us that ministerial note will be taken of the representations that we have made both in Committee and privately and that Ministers will give careful consideration to Birmingham's case for additional resources from the Department of the Environment's programmes during the current financial year. Leaking roofs are mended not by

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    careful consideration, but by money. We do not not deal with the problem of Smith houses in Birmingham by considering it carefully. That problem, too, will be dealt with by money. There are many other examples where money is needed.
    In the circumstances, I think that it would be unreasonable to press the Government further tonight. We expect the Minister to come forward with fresh money for Birmingham, and we shall accept that if it happens at short notice. My hon. Friends and I are prepared to accept the assurances that we have been given by the Minister on the basis on and the spirit in which he has given them. We expect, however, that his fine words will be matched by money. We shall not seek to delay unreasonably the passage of the Bill through Parliament tonight, but we expect the hon. Gentleman to respond by coming up with money in clue course.
    We are taking the Minister's word and putting ourselves in his hands. I have no question about his good faith, but we are suspicious, especially after what was said last year about the way in which rate support grant would be calculated for this year, when a change in the method of calculation cost Birmingham £7·2 million. There was naturally some suspicion among my Birmingham colleagues. As I have said, we are prepared to accept the assurances that we have received from the Minister this evening and we look forward to seeing fresh resources being made available to enable Birmingham city council to deal with the many problems that we have described briefly tonight and in detail in the past. I hope that it will not necessary to describe them in detail in future.
    Mr. Richard Alexander: I am happy to take up the remarks of the hon. Member for Birmingham, Hodge Hill (Mr. Davis). Satisfactory assurances may have been given to him and his hon. Friends, but they have not so far percolated through to the Government side of the Chamber. Nottingham Members — I include the hon. Member for Bassetlaw (Mr. Ashton), who is in his place—have not received the same assurances as those which have been given to Opposition Members who represent parts of Birmingham. Consequently, I feel obliged to pursue the issue, and I shall do so as briefly as possible.
    Does the Bill, as drafted, have an effect on legal cases which have already been commenced? The hon. Member for Bassetlaw asked the same question in a different way and he will have reached his conclusion on the reply which he was given. I am looking to a reply from my hon. Friend the Minister to the question as I have posed it.
    I seek to draw the attention of the House to the position in which Nottinghamshire finds itself as a result of the Bill and I am looking for an assurance from my hon. Friend the Minister on the effect that it will have on our county. Many Nottinghamshire Members are present, including the hon. Member for Bassetlaw.
    Long before the Bill was published, Nottinghamshire county council commenced proceedings against my right hon. Friend the Secretary of State. The council claimed that the rate support grant settlement for 1986–87 was incorrectly established and calculated. Whether that is correct is not for me to say and not for the House to say. However, if a judge decides that the council is correct, Nottinghamshire ratepayers will be entitled to receive back from the Government about £18 million. I understand that the case is down for hearing before the Divisional court on 17 October. What is not clear from the Bill—nor was it
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    clear from the Delphic reply of my hon. Friend the Minister to the hon. Member for Bassetlaw—is whether the council, by virtue of the Bill, is to be deprived of having its case determined by the courts. That is the long and the short of it. Has the Bill deprived my county council of its remedy through the courts? In my view, disputes should be settled in the courts—not by a side wind in a Bill dealing with another county council. I shall be glad to hear from my hon. Friend that my fears are ill-founded.
    Mr. Straw: The hon. Gentleman's fears are not ill- founded. His fears are well-founded, because the Parliamentary Under-Secretary made it crystal clear at the end of her speech on new clause 1 that Nottingham could go to court, but it would have no remedy.
    10.30 pm
    Mr. Alexander: That is why I am pursuing the matter. My hon. Friend did not say in so many words that it would be unwise to go to court. She said that it could go to court. I do not claim that her reply was satisfactory. I think that Labour Members would be unwise to press me too far, because basically I am with them on that. I am trying to edge my hon. Friend into a more positive reply.
    I appreciate that the Secretary of State must have some finality with a final date fixed for the calculation of the multiplier. Clarity and certainty are virtues in almost all fields. Delay might cause my right hon. Friend the Secretary of State to alter the multiplier for other authorities in the same group, if the rules of the game had to be changed.
    Nottinghamshire was entitled, as a matter of law, to use the law to challenge the proposed contribution it had to make to the further education pool as a result of the decision in the case involving the Inner London education authority. There is nothing else the county council could have done after that case than to go to law, if it believed that it was wrongly charged to that pool.
    A successful appeal will reduce its budget and penalties. It is not fair if, as a result of the Bill, the council will not be allowed to proceed with its case—not because of anything that the county has done or any specific matter dealt with in the Bill, but because of something that occurred in a side wind as part of the Bill. That was not the reason for the Bill. I ask my hon. Friend to say that the Bill will not affect any remedy that a judge may decide the county council has.
    I ask my hon. Friend for a specific assurance that my county council will not be deprived of its legal remedies by any side wind in the Bill. The Bill deals with something else. I ask my hon. Friend to assure me that there is nothing in the Bill to prevent my county council proceeding and, if found correct, proceeding to a satisfactory conclusion in the courts.
    Mr. Ashton: I am happy to follow the hon. Member for Newark (Mr. Alexander), but I think that he is rather optimistic. Asking the Government to change retrospective legislation is like asking for a reversal of the World Cup decision when Maradona knocked in the ball with his hand. The hon. Lady is on record as saying that, while the court case can be heard, whatever the outcome, there will be no recompense for Nottinghamshire.
    In March this year, the county council commenced legal proceedings, because it felt that the case should be determined in the courts. It is now pressing for an

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    exclusion clause to be inserted in the Bill which would protect the court proceedings. The Minister refuses to insert any sort of amendment or clause, or anything from the Labour party which says that the Minister is not above the court.
    Before the legislation was introduced, Nottinghamshire had obtained leave from Mr. Justice Mann for a judicial review of decisions made by the Secretary of State. Clause 1 of the Bill, which has been approved, will retrospectively legitimise all the decisions of the Secretary of State under section 59 of the Local Government, Planning and Land Act. As a result, Nottinghamshire county council will be denied an effective hearing in the courts, irrespective of the merits of the case. That is a form of dictatorship. We have often heard Governments allege that trade unions alter and backdate their rules, but the Government are doing exactly the same. It is wrong that the Bill, which, as the hon. Member for Newark said, was designed to alleviate Birmingham city council's problem, should now deny Nottinghamshire county council £18 million.
    In February last year, Nottinghamshire county council fixed its budget for 1985–86 at £378 million. That was £8 million over target and the Government imposed a penalty of £18 million. The council knew that the penalty would be reduced if it cut spending. The budget included £16 million toward the cost of advanced further education. In June last year, ILEA successfully challenged in the High Court the basis on which the Secretary of State for Education and Science calculated contributions to the further education pool. By October, it was clear to the county council that its contributions would be reduced by about £1·6 billion only if it acted in the same way as ILEA. It therefore wrote to the Secretary of State saying that it proposed to cut its budget by the same amount, which would reduce the penalty.
    In June, the council had revised its system of repaying loans for capital expenditure to spread it more evenly over the life of the loan. That brought Nottinghamshire into line with the majority of councils. It decided to charge to capital the salary costs of engineers working on new roads rather than pay them annually out of the rates. When those revisions were taken into account by the Department of the Environment, penalties would be reduced by £12 million.
    During 1985, Nottinghamshire and Bradford sued the Secretary of State and were successful in the Court of Appeal but on 12 December 1985 lost in the House of Lords. I do not want to detain the House at this late stage with too many details, but the fact is that letters were sent and the Department of the Environment knew that Nottinghamshire county council was going to take that action. But still the council was ignored by the Department of the Environment. Because the council believed that the budget changes it proposed were legal and should he accepted, it wrote in October to the Department of the Environment, but the Department — probably deliberately — did not reply until 9 December. That letter, which was received on 11 December, stated two things. First, it said that the Secretary of State would not accept at that stage the advanced further education amendment because it was a windfall gain. The Secretary of State would have known that, if he accepted the amendment, it would increase the council's grant by £5 million. Secondly, to the council's surprise, the letter said
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    that if there were any other budget changes, the Secretary of State would take them into account, provided they were received in time. An under-secretary confirmed by telephone that any other changes would be acceptable but he gave no indication that it was already too late because the rate support grant report was with the printers and had been signed that very day. The following morning, 12 December, at 10 am the council telexed all the budget revisions and the Department of the Environment acknowledged receipt at 11 am.
    Nottinghamshire county council's case was based on the fact that it had altered its budget in time. The Secretary of State refused to accept that, although he is obliged by virtue of the Local Government, Planning and Land Act 1980 to use the best information available when making supplementary reports. Nottinghamshire's case is that he failed to use the information given to him about its budget and that he was told in time.
    This dispute can obviously be settled only by the courts. The House cannot settle it. Legal evidence must be produced as to whether the county council was within the time scale and was doing exactly the same as ILEA—action of which the court had approved. It is common justice that the council's case should still be heard in the courts. The case is down for hearing in the middle of October. But the Under-Secretary of State says that it does not matter a damn what the court decides in October. The court can provide the remedy and say that Nottinghamshire county council was in order in everything that it did, but the Bill rules that out and any saving or amendment to the council's budget does not matter.
    This is a constitutional issue. It is not about cash any more. It is about law and order. The party of law and order is quick to amend the law when it looks as though it might cost it some cash or as though it does not fall within the range of what it sees as being in order.
    This is a panic Bill, although not too much of a panic because the Government know its effects. They know that the Minister has been acting illegally for about five or six years and has now been found out.
    Mr. Robin Corbett: They confessed.
    Mr. Ashton: Exactly. The only way of covering their tracks and of saving a great deal of money at the same time is by amending the rules. They have changed the rules and moved the goal posts in the middle of the game. They are a Government of cheats if they do not allow the court to decide whether the Nottinghamshire application was made in the right place, at the right time and in a bona fide manner. Nottingham's ratepayers should not be denied £18 million because of something that has happened in Birmingham under totally different circumstances.
    I hope that the Minister will give an assurance that if the courts find that Nottinghamshire county council has a justifiable case and should have received that £18 million, it will be given next year. Better still, the council should be notified of that fact very quickly so that it does not have to go to court.
    Mr. Jim Lester: I support both hon. Members who have just spoken, although not the florid language of the hon. Member for Bassetlaw (Mr. Ashton) and his suggestion that my right hon. Friend was cheating. One principal point overrides all others. The

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    Nottinghamshire county council went to court, as did the Secretary of State. The court found against the Secretary of State's evidence that it could hear the action. That is the most important point. The Secretary of State gave evidence that this Bill would render the action unnecessary, but the court found that it should hear the case. In those circumstances, it is repugnant that the Bill should take away the remedy of that action.
    I know that other hon. Members representing Nottinghamshire do not intend to speak, because of the time available, but I am sure they would agree that retrospective legislation in that form is totally unacceptable. It will create a precedent. If Opposition Members ever tried to do the same thing, Conservatives would be deeply offended. I would be equally offended if my right hon. Friend tried to do same thing.
    Mr. Rooker: Like my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis), I shall be much briefer than I had intended. The phrase that the Minister used in reply to my hon. Friend the Member for Bassetlaw (Mr. Ashton) is almost on a par with the reply of the Home Secretary during the Second Reading of the Shops Bill. He was asked whether there would be a guillotine, and, almost without thinking, he said that there would not. That had major repercussions.
    I do not know whether the hon. Lady read her answer on advice from the civil servants' Box or whether she thought about what she was saying. But her answer clearly applied specifically to the Nottinghamshire case, of which I know nothing, although I have learnt a lot in the last few minutes.
    Nottinghamshire county council is bound to get advice from the comptroller saying, "You cannot go to court now because the Minister has already said in Parliament that no judge can give you a remedy. Therefore, the costs of going to court would be a misuse of public funds." Nottinghamshire is therefore placed in an impossible position.
    Unlike Birmingham, hon. Members from Nottinghamshire on both sides of the House are prepared to get up off their backsides and speak up for their authority. That has not happened in respect of Birmingham, which has not been an all-party exercise. I also freely admit that I was out of the country during Second Reading, hence my absence from the Division lists on that night. But this affair has not been handled in the spirit in which things have operated in the past. Previously, when our local authority has been badly treated by central Government, we have operated in a more constructive manner than on this occasion. The lessons of Nottinghamshire can be taken on board in Birmingham.
    Mr. Roger King: I understand the hon. Gentleman's concern to have all-party support in Birmingham for the action on the repayment of the £7·. Conservative Members have given many reasons why it is difficult for the Government to accept that, but it is equally difficult for many Conservative Members, especially those who represent Birmingham constituencies, to go along with the hon. Gentleman's view that the Government have stolen £7·2 million from Birmingham ratepayers when we have just heard that the local authority has taken £31 million more from the ratepayers than it needed.
    10.45 pm
    Mr. Rooker: I welcome that intervention, because it means I can deal with two points which I would not otherwise have raised. The hon. Gentleman did not know that when he refused to support the repayment of the £7 million.
    Whether the sum should be £7 million may or may not be justified in the Government's mind. Therefore, I welcome the Minister's letter and take it on trust, as, indeed, we all do. I shall spell out what I expect of the Minister, following that letter. I do not know what representations Conservative Members for Birmingham have made. They do not seem to want any of the £7 million returned because they find it too difficult to organise. I do not know whether they have asked for the money in another form, because there are other ways of assisting Birmingham quite legitimately and separately from other local authorities. There need not be a knock-on effect. We are making a special case for Birmingham, and we shall show, by highlighting certain factors, that there is a special case to be made.
    Members of Parliament do not often have the opportunity to set priorities for local authority budgets. It is not our function. Most constituents think that we are in charge of local government budget priorities, but we must frequently disabuse them of that. Given the Minister's letter and given that there is some concession coming, it behoves us to say what our priorities are. The Minister knows that, despite what has happened recently, Birmingham is still by and large a low spending and low rate authority compared with many other large cities. Housing policy is not given sufficient priority in Birmingham compared with other projects. Tonight I have an opportunity on behalf of my constituents to try to influence the priorities on spending in Birmingham. I have no control over that and I do not wish to have any, because it is a matter for my colleagues on the city council. But tonight there is a chance of influencing how the Minister repays some or all of the money to Birmingham. Clearly, he will not accept the amendment.
    The Minister should listen to what is said in the House as well as what is said in the City. No one would deny that the first priority of the chief executive of the city council is to get that £9 million urban development grant, but whether it should be used for a five-star hotel is another matter. I would argue that there are other priorities. The Minister has turned the application down. My hon. Friend the Member for Birmingham, Ladywood (Ms. Short) will undoubtedly make the point with more force than I can because it affects her constituency. A five-star hotel would not be my priority and it should not be the city's priority either.
    Even in housing there are arguments about where the money should be spent. My view is that it should be targeted. The Minister's letter refers to programmes during the current financial year. Therefore, we are referring to something that has not been budgeted for. If the Government were to say, "We have decided to provide compensation amounting to £X million to overcome these difficulties, but we cannot do it by means of the multiplier; we will do it in another way, and here is the money," that would not be satisfactory. I want the money to be targeted on housing.
    Money should be allocated specifically to compensate for the cuts caused by the lack of home improvement

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    grants. Money should also be allocated to remedy housing defects. To its credit, Birmingham, as the largest public housing landlord, has taken the lead among English local authorities in surveying defective housing and estimating the costs of repair. It has discovered that the Smith, Parkinson and Boot houses cannot be repaired within the financial limits set by the Government. In some cases the repairs would cost far more than the market value of the houses. Therefore, Birmingham has said that it will repurchase the houses, with a view to future demolition.
    The Minister ought to consider providing additional financial assistance for Birmingham under the Housing Defects Act 1984. A sum of £4 million would not be amiss. We are already a quarter of the way through this financial year. We could cope with additional expenditure of that order before 31 March 1987. It would not solve all the problems. The expenditure would be much higher than that. However, it would release other money for repairs and improvements.
    To channel the money to housing defects would solve two problems. First, people are living in homes that are an albatross round their necks. They bought their homes in good faith, but they are now unable to sell them. Buyers cannot obtain a mortgage and the houses cannot be repaired within the financial limits. Secondly, money would be released for repairs to the council's housing stock.
    Ministers are not unaware of these suggestions. On 19 May the Minister for Housing, Urban Affairs and Construction received an all-party delegation from the council. However, the delegation contained only Labour Members of Parliament because the Tory Members refused to attend the meeting. The Minister received a presentation of Birmingham's difficulties in operating the Housing Defects Act. We have not yet received the Minister's reply to that presentation. We were told that he would reply first to me and to my hon. Friends.
    Birmingham faces special problems over the working of the Housing Defects Act. We know that £7 million more has been taken than should have been taken. In addition, there has been the catastrophic loss of rate support grant during the last few years. A case can be made for special additional funding under the Housing Defects Act in the current financial year. It would meet the commitment that is contained in the Minister's letter.
    The Minister has also been pressed to disregard the special expenditure that is incurred by Birmingham's bid to host the 1992 Olympic games. There is no disagreement between the parties in Birmingham over that. Business has been a little slow to appreciate the seriousness of Birmingham's claim. Birmingham has committed an enormous amount of money to this bid. If the bid is successful" it will do a great deal of good not just to Birminhgam but to the nation as a whole.
    Additional expenditure has also been incurred because of the Handsworth riots on 9 and 10 September. The operation of the Riot (Damages) Act is a thundering disgrace, and it should not form any part of modern public administration. We need to look at this quickly, although that will not help my constituents, or those of my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) or of my hon. Friend the Member for
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    Ladywood, whose constituencies are also affected. A special disregard should be made for Birmingham because of its unique problems.
    The Minister can find other ways to help. If he cannot find the full £7 million, I am prepared to take half a loaf. I can see from his letter that half a loaf is available. Unfortunately, this has not been done on an all-party basis.
    I must respond to the point made by the hon. Member for Birmingham, Northfield (Mr. King). It is a matter of some concern to any hon. Member if his constituents have been either over-rated or over-taxed. Birmingham has a revenue expenditure of about £900 million, give or take a few million, and deals with enormous sums of capital flow. The headlines last week were that we were £31 million overcharged on the rates, which is ludicrous, when there was a 43 per cent. rates increase last year. As I understand it, the £31 million was £23 million if one takes account of the £8 million deficit brought forward from 1984–85, which was the deficit that the Tory Councillor Bosworth left when he was thrown out of office.
    There was a projected balance of £21 million when the budget was announced. The chamber of commerce was told about this in all the documents — there was no secret about this. There have been some technical changes in the way in which the Government have made their calculations. When one takes into account the balances that were robbed by the Tories so that they could cut the rates — a move for which they lost office — leaving a deficit that we had to make good, and the cuts in the rate support grant of £11 million over 1985–86, that leaves us with about £15 million. We are told that that is not an awful lot for a city that is spending £900 million. I do not see why there should be any balances anyway. The cash flows each week in Birmingham are enormous. The final figure is nowhere near the £31 million first quoted by the hon. Member for Northfield and he can get the information as easily as I and my hon. Friends.
    I accept the Minister's word that something will happen. I have given my view as to where the money should be targeted, and why. I am not in favour of the money simply being made available after the budget has been met. because there are factors and projects on which nmoney will be spent of which I do not approve. They do not figure in my priorities and they would not assist my constituents. I am here to represent my constituents, not the organisations of local authorities.
    Ms. Clare Short: I, too, will be brief—much briefer than I had intended to be if we had not received this generous letter from the Minister. I am sure that we are all extremely grateful and expect great things as he fulfils his undertaking to find some extra money for Birmingham to make up for taking away £7·2 million — an undertaking given because the Government took legal advice that showed that Birmingham would win in the courts.
    Like my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), I wish to put on record my priorities for how the money should be spent. The Minister is right, if Saturday's Birmingham Post is correct, in rebuffing the request for a £9 million urban development grant for a luxury hotel to be built right next to one of the most appalling estates in my constituency, where people are living in tower blocks and maisonettes, with water and black mould affecting the health and the lungs of their

    133
    children, according to consultants at the Birmingham's children's hospital, which is in the same area. It is a declining and dreadful estate, with no community facilities or proper cleaning. The lifts are used in those revolting ways that we have heard about in high-rise tower blocks that are in decline. I appeal to the Minister to make some money available for refurbishing that estate, and to confirm that the money will not be used to build a luxury hotel across the road.
    11 pm
    The Minister will be aware that the Paymaster General made great play of a commitment to ensure that urban renewal work and so on would employ local people in the area of the Handsworth riots, which affected Ladywood, and the constituencies of my hon. Friend the Member for Perry Barr and of my right hon. Friend the Birmingham, Small Heath (Mr. Howell). That was an important undertaking, because in the past, as we all know, much of the money spent in Handsworth has not employed local people, yet our rate of youth unemployment is horrendously high. More than 90 per cent. of very young black people are unemployed, and they provide the majority of those seeking work in the area. Despite that undertaking from the Paymaster General there is no money for urban renewal, and so there will only be a few jobs. It is a good policy, but it is too late. The money has been spent, and no new money is flowing through. Consequently, there will not be many jobs for local young people.
    Another priority is urban renewal for the remaining parts of my constituency. A number of privately owned houses are in a dreadful state of disrepair. Many people are unemployed and can no longer afford to maintain their houses. Thousands of unemployed young people would give their right arm to obtain a job, to earn some money and to build up their local community. When the Minister decides how the money is to be spent, I hope that it will be spent not on subsidising luxury hotels to be erected by enormously wealthy international companies, but on improving the sad and declining estate in my area, on the urban renewal needs of Birmingham, and on helping young black people in Handsworth to find employment in their community.
    Mr. Robin Corbett: In every sense of the phrase, this is a squalid Bill at the end of a wholly squalid affair. The city of Birmingham council went to court because it had a grievance. It was not simply a matter of the council arguing its case before the court, because the Government's representatives confessed in court that the Secretary of State had acted illegally. That guilt was confirmed by the court—it had little choice—and costs were awarded to the city of Birmingham. Having confessed to that illegality, the Government then obtained the support of the hon. Member for Birmingham, Northfield (Mr. King) in this form of legalised robbery.
    Earlier we debated the fight against crime. It is quite bizarre that the Government's proposals should almost amount to knighting and honouring every burglar, mugger and rapist among those who carry out the 3·6 million crimes a year. If they had the power that the Secretary of State has or the votes that are behind him, they would go to court and get their convictions altered.
    In practice, this argument should not be allowed to concentrate on the mind-bending detail of multipliers, rate support grants, GREs and so on. We are arguing about
    134
    Whether the city of Birmingham should be allowed to spend the money that it said that it needed to spend prudently and sensibly, on behalf of a modern regional city that is trying to work its way out of a recession. The debate is not only narrowly about Birmingham. As the largest English authority that body went to court. We are talking about the effect, seven years on, of this Government's continuing war against the right of locally elected councils to decide sensibly and prudently on their priorities and spending. That is what it is all about. Whitehall does not know best. Heaven knows how many times that has been said in the House and it is still not listened to, understood or respected.
    It is not as if the city of Birmingham is a big spender: I wish that it were. I take no pride in saying, and I know that some of my hon. Friends take no pride in it either, that in 1985–86 the city spent 6 per cent. below the Government spending targets. One of the problems in Birmingham is that it has consistently and persistently, under successive regimes, seen its role as that of a low spender. The penny is now beginning to drop and we hope that it will complete the fall under the Labour council and show that that great city will never solve its problems as long as it takes this too modest approach. I am not talking about being profligate. The Secretary of State visited Birmingham last September, on a visit of Handsworth, and he congratulated the city fathers on the way in which, in the previous two or three years they had spent money.
    Like my hon. Friends I do not want any money that will flow from the Secretary of State's letter to go into some unspecified pot. I stress, along with my hon. Friends from the city, the paramount importance of finding more ways of getting money into housing. There is no bigger crisis in our city and the Government need no lectures on that. We do not waste money and I am not knocking the bid for the Olympic Games which Birmingham is carrying on Britain's behalf. All of us who run regular surgeries )n the city know about the way in which the misery has built up in people who live in inadequate housing and who cannot get a transfer or repairs and have no real hope on the waiting list.
    I remind Ministers, in case he think we are messing about on this subject, that the last comprehensive return entitled "Repair and Improvement of the Local Authority Housing Stock", RILAHS for short, was sent to the Department of the Environment at the Department's request. That return identified the need to spend in excess of—wait for it:
    "£715 million on repairing and improving the Council's existing stock."
    That is not on one new build because there is not one new family house of flat or purpose-built property for the disabled included in that amount. That £715 million is to repair the wreckage that we have in housing at the moment. The statement was reported to the council meeting on 1 July from the housing committee and said:
    "an additional 635 new rented dwellings need to be provided by the City and a similar number by housing associations each year for the next five years."
    That is a total of 1,270 houses per year. I do not know how the hon. Member for Northfield can vote for this robbery when we have such housing needs, some of them in his own constituency. I do not understand how he can do that.
    Mr. Roger King rose—
    Mr. Corbett: I know that his constituents will not understand it either. I gladly give way.
    Mr. King: The hon. Gentleman has just given us ample evidence, if any were needed, of how disastrous it is for any city to get into such a situation with its council housing. In many ways it is a condemnation of the principle council housing, because there are plenty of alternative ways in which we could have developed housing within the city. He seems desperately concerned about this £7 million, but what about the £22 million left over from last year or the £15 million? That is over expenditure that was not budgeted for: it is excess profit for the council.
    Mr. Corbett: The hon. Gentleman just does not understand. He continues to troop through the Lobby to vote for a Government who say, on the back of the right-to-buy policy, that local authorities cannot even spend the bulk of the money that they raise from that process on replacing, repairing, modernising or improving housing in the city. The hon. Gentleman cannot have it both ways. He must live with that for which he voted. He voted for this £7·2 million robbery, just as he voted to put the lid on councils spending the revenue which they obtain from selling their houses. He cannot have it both ways; the voters will see through him.
    I must make a narrow constituency point. On the Lyndhurst estate in my constituency, about £1·5 million is being spent on six tower blocks because they are falling down. Exterior work must be carried out on safety grounds. In an ideal world, those tenants would be invited to move out while the work is being carried out, because it is noisy, it is a nuisance and it causes disturbance, dust and dirt. Many of the tenants have lived in those blocks since they were built; they are elderly and have mobility problems. Since the hon. Member for Northfield voted for the robbery by the Government of funds that Birmingham would have otherwise spent on housing, tenants in three of the blocks on which work has started are fenced in by plastic. There is scaffolding all over the blocks, and jack hammers and sledgehammers are banging all over the walls. Even those with the most severe medical problems will be lucky to be moved out while the work is carried on. The hon. Member for Northfield cannot justify stealing £7·2 million that could have been used to give those tenants some sanity and peace while the necessary work was done.
    The Minister believes that Birmingham has run out of work. Let me tell him about 1,500 Boswell houses in my constituency. They were built in the 1920s, are shale-filled and have major suspected structural problems. We are not inventing those problems. Four hundred of those homes —I do not complain about this—have been bought by their former council tenants. They have spent much money putting in bay windows, changing the front doors and all the other things that people do when they buy. I do not knock them at all. There is a major problem there. Money must be spent to put that problem right.
    If Ministers cannot yet understand why we from the city of Birmingham feel so strongly about this robbery, will they at least think about what happens to real people in real streets in all our constituencies, including Northfield? This is the reality of what spending is about. That is why we object so strongly to this legalised robbery and—I say this to the Minister flatly—that is why we attach supreme importance to the word that he used in the letter that he wrote today to my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis).
    The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): One problem, but also a pleasure, of being the Minister responsible for local government is that, as the hon. Member for Birmingham, Erdington (Mr. Corbett) said, the complicated multipliers and formulae deal with real places and real people. Therefore, it is logically possible to extend such debates, which deal with all the authorities in the country, almost endlessly. I am grateful for the fact that the hon. Members who represent Birmingham and Nottinghamshire put succintly their strong cases on the way in which the legislation, as they see it, affects their local authorities.
    11.15 pm
    The amendments go to the heart of the Bill. The justification, approval for which we asked on Second Reading and which we received from the House, was that we needed to validate retrospectively the way in which the law had been thought to have worked to give us and local authorities the certainty that the law meant what we had thought.
    I well understand that there will be losers among local authorities, just as there will be gainers, unless we as a Government relax the cash limits on local authority spending. It is legitimate for Opposition Members with a different view of economic policy to urge that, but as a Minister it is also legitimate for me to ask my hon. Friends to reject that.
    There would have been no way to validate the law as we thought it to be for the losers and to put money in without abandoning our policy. That is why I must ask my hon. Friends, even though some represent authorities which in some respects are losers and would have gained from the immediate change that resulted from the court case brought by Birmingham, to reject the amendment.
    The same is true of the Nottinghamshire case. There is no magic about the Nottinghamshire case either. The Department has written to Nottinghamshire saying that we shall, on the same grounds as the Birmingham case, concede their case. It is entirely up to Nottinghamshire whether it continues with the court case. I understand that it is uncomfortable for hon. Members, but we have had to say that the basis of the law must be returned to what we all thought it was.
    I well understand that the legal challenges do not come from the fact that Nottinghamshire or Birmingham suddenly have, for general prima facie reasons, a sudden interest in the law. It is because they want to spend more money and have more money from the Government.
    Mr. Ashton: The Minister has made a concrete cash offer to Birmingham, or at least has said that he will look at things favourably. Is he now saying that he will do the same for Nottinghamshire and that it will receive some financial benefit if he has the chance to look at the matter?
    Mr. Waldegrave: There have been a number of debates. There has been a debate about the principles of validating what we thought the law meant, and I have no shame at all in coming to the House and saying—my right hon. Friend the Member for Wansted and Woodford (Mr. Jenkin) put it well on Second Reading — that Governments have a perfect right to secure that the law means what everyone thought it meant and for which they have all worked. My hon. Friend the Member for Birmingham, Northfield (Mr. King) and others need have no doubt that that is a legitimate thing for Governments to do.

    137
    There has been another debate during the course of the Bill, which may be accidental in the sense that Birmingham brought the case, but it has fluently and persuasively focussed on some of the Birmingham problems. Hon. Members who represent Birmingham have justifiably used the Bill to press a number of cases on behalf of Birmingham, which they have also made outside the context of the Bill. The hon. Member for Birmingham, Hodge Hill (Mr. Davis) or the hon. Member for Birmingham, Perry Barr (Mr. Rooker) was generous enough to make concession over Conservative councillors. Indeed, I have found that in dealings with Councillor Knowles and his predecessor, Councillor Bosworth, that they come from a city, as mine used to be, where the local people put the city first and work together, which must be a strength for Birmingham.
    During debates on the Bill several issues have been brought to my attention and some have been mentioned tonight. They show, as is bound to be the case, that there are different priorities, even among Labour groups in Birmingham. The Hyatt hotel does not seem to be popular among those hon. Members who have spoken tonight, although the hon. Member for Perry Barr, who is a sensible man, will, I am sure, say that if private money comes forward he will have no objection to that.
    A number of other points have been made. The issue does not depend on the Bill, but on the way in which powerful representations from Birmingham have been hung upon it. Powerful delegations have talked to us. We are looking at the mechanisms available to us which might meet some of the problems. Of course it is open to my hon. Friends who represent Nottinghamshire constituencies to come to see me. However, I shall not be influenced by a case made on the Bill. They must make a case on merit, as other authorities do when they see us.
    Mr. Richard Ottaway: Did my hon. Friend say in response to the hon. Member for Bassetlaw (Mr. Ashton) that the answer was no?
    Mr. Waldegrave: I said that I could not possibly say to Nottinghamshire or to Birmingham that because they happened to be losers under the Bill, and because the multipliers mean what we all believe them to mean, they have any right to additional resources. A case has been made which we shall attempt to meet. The sum of £700 million was mentioned. I do not think that we are talking about such a sum, but we shall see whether resources can be found to meet some of the purposes put to us.
    Mr. Alexander: In view of what my hon. Friend has just said in reply to my hon. Friend the Member for Nottingham, North (Mr. Ottaway) what does he mean when he says that the Government will concede the case? Will Nottinghamshire get the money, or not?
    Mr. Waldegrave: The situation is exactly the same as that for Birmingham and for the other authorities which produced late information. There is a strong case for saying that it must be for the Secretary of State to set a date beyond which information cannot be handled. Other authorities also produced late budgets. A telexed budget was handed to the Secretary of State as he entered the Chamber. That is an impossible way to proceed. We have the right to set a cut-off date for information. That is fair.
    138
    We are talking about a central part of a Bill which validates procedures which we all agreed were valid in the first instance. The county case, which we have conceded, is put right and validated in the Bill.
    I have made points quite clearly to hon. Members representing Birmingham and councillors from both parties who have been to see us. I have to disappoint my hon. Friends who represent Nottinghamshire constituencies by saying that they and other councils will lose under the Bill. They cannot seek money from the Government, but if they want to make a case on merit, we shall be delighted to see them.
    Mr. Boyes: I have listened with care to comments by my hon. Friends the Members for Birmingham, Hodge Hill (Mr. Davis), for Birmingham, Perry Barr (Mr. Rooker), for Birmingham, Ladywood (Ms. Short) and for Birmingham, Erdington (Mr. Corbett). They put the case with passion for the people who live in Birmingham. We talk about councils and large sums, but at the end of the day we care about the citizen.
    Even taking into consideration comments by my hon. Friend the Member for Bassetlaw (Mr. Ashton) about the Nottinghamshire county council case, I do not intend to press amendment No. 3 to a Division, but after listening to the Minister and his disappointing reply to many important issues, I shall ask my hon. Friends to divide the House on amendment No. 1.
    Question put, That the amendment be made:—
    The House divided: Ayes 171, Noes 230.

    Division No. 272]

    [11.30 pm

    AYES

    Alton, David

    Crowther, Stan

    Anderson, Donald

    Cunliffe, Lawrence

    Archer, Rt Hon Peter

    Dalyell, Tarn

    Ashdown, Paddy

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

    Ashley, Rt Hon Jack

    Deakins, Eric

    Ashton, Joe

    Dewar, Donald

    Atkinson, N. (Tottenham)

    Dixon, Donald

    Banks, Tony (Newham NW)

    Dobson, Frank

    Barnett, Guy

    Dormand, Jack

    Barron, Kevin

    Douglas, Dick

    Beckett, Mrs Margaret

    Dubs, Alfred

    Bell, Stuart

    Duffy, A. E. P.

    Benn, Rt Hon Tony

    Dunwoody, Hon Mrs G.

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

    Eadie, Alex

    Bidwell, Sydney

    Eastham, Ken

    Blair, Anthony

    Evans, John (St. Helens N)

    Boothroyd, Miss Betty

    Ewing, Harry

    Boyes, Roland

    Fatchett, Derek

    Bray, Dr Jeremy

    Faulds, Andrew

    Brown, Gordon (D'f'mline E)

    Field, Frank (Birkenhead)

    Brown, Hugh D. (Provan)

    Fields, T. (L'pool Broad Gn)

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

    Fisher, Mark

    Buchan, Norman

    Flannery, Martin

    Caborn, Richard

    Foot, Rt Hon Michael

    Callaghan, Jim (Heyw'd & M)

    Forrester, John

    Campbell-Savours, Dale

    Foster, Derek

    Carlile, Alexander (Montg'y)

    Foulkes, George

    Carter-Jones, Lewis

    Fraser, J. (Norwood)

    Clark, Dr David (S Shields)

    Freeson, Rt Hon Reginald

    Clarke, Thomas

    Garrett, W. E.

    Clay, Robert

    George, Bruce

    Clelland, David Gordon

    Gilbert, Rt Hon Dr John

    Clwyd, Mrs Ann

    Hamilton, James (M'well N)

    Cocks, Rt Hon M. (Bristol S)

    Hamilton, W. W. (Fife Central)

    Cohen, Harry

    Hardy, Peter

    Coleman, Donald

    Harman, Ms Harriet

    Cook, Frank (Stockton North)

    Harrison, Rt Hon Walter

    Cook, Robin F. (Livingston)

    Hart, Rt Hon Dame Judith

    Corbett, Robin

    Heffer, Eric S.

    Corbyn, Jeremy

    Hogg, N. (C'nauld & Kilsyth)

    Cox, Thomas (Tooting)

    Home Robertson, John

    139

    Hoyle, Douglas

    Penhaligon, David

    Hughes, Robert (Aberdeen N)

    Pike, Peter

    Hughes, Roy (Newport East)

    Powell, Raymond (Ogmore)

    Hughes, Sean (Knowsley S)

    Radice, Giles

    Hughes, Simon (Southwark)

    Randall, Stuart

    Janner, Hon Greville

    Raynsford, Nick

    John, Brynmor

    Redmond, Martin

    Jones, Barry (Alyn & Deeside)

    Rees, Rt Hon M. (Leeds S)

    Kaufman, Rt Hon Gerald

    Richardson, Ms Jo

    Kennedy, Charles

    Roberts, Allan (Bootle)

    Kilroy-Silk, Robert

    Roberts, Ernest (Hackney N)

    Kirkwood, Archy

    Robertson, George

    Lambie, David

    Rogers, Allan

    Lamond, James

    Rooker, J. W.

    Leighton, Ronald

    Ross, Ernest (Dundee W)

    Lewis, Terence (Worsley)

    Rowlands, Ted

    Litherland, Robert

    Sheerman, Barry

    Lloyd, Tony (Stretford)

    Sheldon, Rt Hon R.

    Lofthouse, Geoffrey

    Shields, Mrs Elizabeth

    Loyden, Edward

    Short, Ms Clare (Ladywood)

    McCartney, Hugh

    Silkin, Rt Hon J.

    McDonald, Dr Oonagh

    Skinner, Dennis

    McKelvey, William

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

    MacKenzie, Rt Hon Gregor

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

    McTaggart, Robert

    Snape, Peter

    McWilliam, John

    Soley, Clive

    Madden, Max

    Spearing, Nigel

    Marek, Dr John

    Steel, Rt Hon David

    Marshall, David (Shettleston)

    Stott, Roger

    Martin, Michael

    Strang, Gavin

    Maynard, Miss Joan

    Straw, Jack

    Meacher, Michael

    Thompson, J. (Wansbeck)

    Michie, William

    Thorne, Stan (Preston)

    Mikardo, Ian

    Tinn, James

    Millan, Rt Hon Bruce

    Wallace, James

    Miller, Dr M. S. (E Kilbride)

    Wardell, Gareth (Gower)

    Morris, Rt Hon A. (Wshawe)

    Wareing, Robert

    Morris, Rt Hon J. (Aberavon)

    Welsh, Michael

    Nellist, David

    Williams, Rt Hon A.

    Oakes, Rt Hon Gordon

    Winnick, David

    O'Brien, William

    Woodall, Alec

    O'Neill, Martin

    Young, David (Bolton SE)

    Park, George

    Parry, Robert

    Tellers for the Ayes:

    Patchett, Terry

    Mr. Allen McKay and

    Pavitt, Laurie

    Mr. Ron Davies.

    Pendry, Tom

    NOES

    Aitken, Jonathan

    Buck, Sir Antony

    Alexander, Richard

    Budgen, Nick

    Alison, Rt Hon Michael

    Bulmer, Esmond

    Amess, David

    Burt, Alistair

    Ancram, Michael

    Butler, Rt Hon Sir Adam

    Ashby, David

    Butterfill, John

    Atkins, Robert (South Ribble)

    Carlisle, John (Luton N)

    Atkinson, David (B'm'th E)

    Carlisle, Kenneth (Lincoln)

    Baker, Nicholas (Dorset N)

    Carlisle, Rt Hon M. (Wton S)

    Baldry, Tony

    Carttiss, Michael

    Batiste, Spencer

    Cash, William

    Beaumont-Dark, Anthony

    Channon, Rt Hon Paul

    Bellingham, Henry

    Chapman, Sydney

    Bendall, Vivian

    Chope, Christopher

    Benyon, William

    Churchill, W. S.

    Bevan, David Gilroy

    Clark, Dr Michael (Rochford)

    Biffen, Rt Hon John

    Clark, Sir W. (Croydon S)

    Biggs-Davison, Sir John

    Clarke, Rt Hon K. (Rushcliffe)

    Blackburn, John

    Clegg, Sir Walter

    Blaker, Rt Hon Sir Peter

    Cockeram, Eric

    Bonsor, Sir Nicholas

    Colvin, Michael

    Boscawen, Hon Robert

    Coombs, Simon

    Bottomley, Mrs Virginia

    Cope, John

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

    Corrie, John

    Bowden, Gerald (Dulwich)

    Couchman, James

    Braine, Rt Hon Sir Bernard

    Cranborne, Viscount

    Brandon-Bravo, Martin

    Crouch, David

    Bright, Graham

    Currie, Mrs Edwina

    Brinton, Tim

    Dickens, Geoffrey

    Brown, M. (Brigg & Cl'thpes)

    Dorrell, Stephen

    Bruinvels, Peter

    Dover, Den

    140

    du Cann, Rt Hon Sir Edward

    Ottaway, Richard

    Dunn, Robert

    Page, Sir John (Harrow W)

    Durant, Tony

    Page, Richard (Herts SW)

    Dykes, Hugh

    Parkinson, Rt Hon Cecil

    Edwards, Rt Hon N. (P'broke)

    Patten, Christopher (Bath)

    Evennett, David

    Patten, J. (Oxf W & Abgdn)

    Eyre, Sir Reginald

    Pawsey, James

    Fairbairn, Nicholas

    Percival, Rt Hon Sir Ian

    Fallon, Michael

    Pollock, Alexander

    Farr, Sir John

    Porter, Barry

    Fookes, Miss Janet

    Portillo, Michael

    Forman, Nigel

    Powell, William (Corby)

    Fox, Sir Marcus

    Powley, John

    Franks, Cecil

    Price, Sir David

    Fry, Peter

    Proctor, K. Harvey

    Gale, Roger

    Raffan, Keith

    Garel-Jones, Tristan

    Rathbone, Tim

    Glyn, Dr Alan

    Rees, Rt Hon Peter (Dover)

    Goodhart, Sir Philip

    Renton, Tim

    Goodlad, Alastair

    Rhodes James, Robert

    Gower, Sir Raymond

    Rhys Williams, Sir Brandon

    Gregory, Conal

    Ridsdale, Sir Julian

    Griffiths, Sir Eldon

    Rippon, Rt Hon Geoffrey

    Ground, Patrick

    Roberts, Wyn (Conwy)

    Grylls, Michael

    Robinson, Mark (N'port W)

    Hamilton, Hon A. (Epsom)

    Roe, Mrs Marion

    Hampson, Dr Keith

    Rossi, Sir Hugh

    Hargreaves, Kenneth

    Rost, Peter

    Havers, Rt Hon Sir Michael

    Rowe, Andrew

    Hayhoe, Rt Hon Barney

    Rumbold, Mrs Angela

    Heddle, John

    Ryder, Richard

    Henderson, Barry

    Sackville, Hon Thomas

    Higgins, Rt Hon Terence L.

    Sayeed, Jonathan

    Hirst, Michael

    Shaw, Sir Michael (Scarb')

    Holland, Sir Philip (Gedling)

    Shelton, William (Streatham)

    Hunter, Andrew

    Shepherd, Colin (Hereford)

    Hurd, Rt Hon Douglas

    Shepherd, Richard (Aldridge)

    Jenkin, Rt Hon Patrick

    Shersby, Michael

    Jopling, Rt Hon Michael

    Silvester, Fred

    King, Roger (B'ham N'field)

    Sims, Roger

    Lawrence, Ivan

    Skeet, Sir Trevor

    Lightbown, David

    Smith, Tim (Beaconsfield)

    Lilley, Peter

    Speed, Keith

    Lloyd, Sir Ian (Havant)

    Speller, Tony

    Lloyd, Peter (Fareham)

    Spencer, Derek

    Lord, Michael

    Spicer, Michael (S Worcs)

    Luce, Rt Hon Richard

    Squire, Robin

    Lyell, Nicholas

    Stanbrook, Ivor

    MacKay, Andrew (Berkshire)

    Steen, Anthony

    McLoughlin, Patrick

    Stern, Michael

    McNair-Wilson, M. (N'bury)

    Stevens, Lewis (Nuneaton)

    Major, John

    Stewart, Andrew (Sherwood)

    Malins, Humfrey

    Stokes, John

    Malone, Gerald

    Taylor, John (Solihull)

    Maples, John

    Terlezki, Stefan

    Marland, Paul

    Thomas, Rt Hon Peter

    Marshall, Michael (Arundel)

    Thompson, Donald (Calder V)

    Mates, Michael

    Thompson, Patrick (N'ich N)

    Mather, Carol

    Thorne, Neil (Ilford S)

    Maude, Hon Francis

    Thornton, Malcolm

    Mayhew, Sir Patrick

    Townend, John (Bridlington)

    Mellor, David

    Tracey, Richard

    Merchant, Piers

    Trippier, David

    Miller, Hal (B'grove)

    Twinn, Dr Ian

    Mills, Iain (Meriden)

    van Straubenzee, Sir W.

    Mitchell, David (Hants NW)

    Vaughan, Sir Gerard

    Moate, Roger

    Wakeham, Rt Hon John

    Montgomery, Sir Fergus

    Waldegrave, Hon William

    Moore, Rt Hon John

    Walden, George

    Morris, M. (N'hampton S)

    Walker, Bill (T'side N)

    Morrison, Hon C. (Devizes)

    Wall, Sir Patrick

    Moynihan, Hon C.

    Waller, Gary

    Murphy, Christopher

    Ward, John

    Neale, Gerrard

    Wardle, C. (Bexhill)

    Nelson, Anthony

    Warren, Kenneth

    Neubert, Michael

    Watson, John

    Nicholls, Patrick

    Watts, John

    Norris, Steven

    Wells, Bowen (Hertlord)

    Onslow, Cranley

    Wheeler, John

    Osborn, Sir John

    Whitfield, John

    141

    Winterton, Mrs Ann

    Young, Sir George (Acton)

    Winterton, Nicholas

    Younger, Rt Hon George

    Wolfson, Mark

    Wood, Timothy

    Tellers for the Noes:

    Woodcock, Michael

    Mr. Tim Sainsbury and

    Yeo, Tim

    Mr. Mark Lennox-Boyd.

    Question accordingly negatived.

  Clause 2

    ADJUSTMENT OF BLOCK GRANT TO LIMIT EFFECTS OF CHANGES 1982 C. 32.
    Mr. Straw: I beg to move amendment No. 5, in page 1, line 16, leave out from first 'section' to end of line 17.
    Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to take the following amendment: No. 9, in page 2, line 7, leave out from 'desirable' to end of line 14 and insert—
    '( ) The Secretary of State shall not exercise the power for the purpose mentioned in subsection (2) above so as to decrease the amount of block grant payable to a local authority unless he is satisfied that it is necessary to do so in order to prevent—

    (a) the difference in question having an unreasonable effect on the way in which block grant for that year is distributed; and

    (b) an unreasonable increase in the amount of block grant payable to that authority for that year compared to the amount payable to them for the previous year;'.

    No. 10, in page 2, line 7, leave out from 'desirable' to end of line 14.
    No. 11, in page 2, line 18, at end insert
    'subject to section 8(3)(a) of the Local Government Finance Act 1982'.
    No. 15, in schedule 1, page 4, line 5, leave out
    'paragraph (a) shall be omitted'
    and insert
    'for the words "in paragraph (a) of subsection (6) of that section"
    there shall be substituted the words
    'subsection (2) of section 2 of the Rate Support Grant Act 1986" '.
    Mr. Straw: Amendment No. 9, the operative amendment, seeks to change the criteria under which block grants might be capped. Section 8(3)(a) of the Local Government Finance Act 1982 deals with caps. The section provides that powers conferred by section 59 of the Local Government, Planning and Land Act 1980 shall not be exercised for the purpose specified in subsection (6)(a) of the 1980 Act
    "so as to decrease the amount of block grant payable to a local authority unless the Secretary of State is satisfied that there will he an unreasonable increase, unless he exercises the power, in the amount of block grant payable to that authority for a year compared with the amount payable to them for the previous year".
    The Bill seeks to change the test for caps from the effect on individual authorities that have received, on the face of it, a large amount of additional block grant, to the effect on other authorities. Clause 2(3) of the Bill provides that the Secretary of State
    "shall not exercise the power for that purpose so as to decrease the amount of block grant payable to a local authority for any year unless he is satisfied that it is necessary to do so in order to prevent the difference in question having an unreasonable effect on the way in which block grant for that year is distributed or on the contribution made or to be made by ratepayers in that year to the expenditure of local authorities."
    142
    There is a major friction between the test under the present law and the test under the Bill.
    The Committee sought an explanation from Ministers as to how the new power would operate. We asked whether it was possible, under the proposed powers, for an authority to have its block grant otherwise payable capped where it could be said that the amount that the authority was to receive was unreasonable, but where it could not be said that the amount was unreasonable for all other authorities, or that it would have an unreasonable effect on all other authorities. I was confused by the answers. When we considered the matter on 10 July, the Minister sought to explain it. However, the hon. Lady left me even more confused. She said:
    "Last year"—
    I assume that that is an error in the record, because she meant 1982—
    "section 8(3) (a) of the Local Government Act 1985 provided the Secretary of State with powers to cut"—
    it should say "cap"—
    "gain where there was an unreasonable effect on one authority alone, but that power was not used last year, or even interpreted that way, and the action we took in relation to Birmingham concerns the power we now propose in clause 2(2)—the ability to tap"—
    it should be "cap"—
    "The authority's gain because of the unreasonable effect on the settlement to all other local authorities and all ratepayers." — [Official Report, Standing Committee G, 10 July 1986; c. 120.]
    I invite the Under-Secretary of State to explain what she meant. She seemed to suggest that the power under section 8(3) (a) was not used last year in relation 10 the matters about which Birmingham complained. If that section is not in contention, why have we wasted so much of our time in the past few months seeking to amend it? My understanding was that section 8(3) (a) was a pertinent part of Birmingham's objection to the way in which Ministers made decisions.
    Is the Under-Secretary of State saying that capping could not be introduced where the only objection to the amount of grant received by an authority was that it could be regarded as an unreasonable imposition on that authority but could not be regarded as such an imposition on every other authority?
    Mrs. Rumbold: I shall try to clarify the matter that we discussed in Committee. As the hon. Member for Blackburn (Mr. Straw) said, the amendments deal with a restriction on the power of the Secretary of State to cap grant gains by applying multipliers which reduce the grant. The existing provision requires the Secretary of State to satisfy himself that there would be an unreasonable increase in an authority's grant for one year compared with the previous year if he did not apply a cap. The amendments suffer from the same flaw with respect to the general powers of multipliers as was disclosed in the Birmingham case. This requires the Secretary of State to look at the overall change in grant. The amendments would simply incorporate the same flaw in the new legislation. I include amendment No. 9, which is a sort of hybrid between the existing provision and the one in the Bill.
    In the Bill, as drafted, there is a new requirement that the Secretary of State should not apply caps
    "unless he is satisfied that it is necessary to do so in order to preventan…unreasonable effect on the way in which block grant for that year is distributed".
    The use of caps is to prevent large gains by some

    143
    authorities, reducing the pool available to all authorities. That is a serious, sensible and proper constraint on the power of the Secretary of State to cap gains. I hope that the House will agree that that is the effect of the new power that the Secretary of State will be given under the Bill as opposed to the old power which will be subsumed by the new legislation.

  Schedule 1

    AMENDMENTS
    Mr. Straw: I beg to move, amendment No. 16, in page 4, line 21, leave out paragraphs 8 and 9.
    Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 17, in page 4, line 24, leave out from 'words' oto end of line 25 and insert 'the reasons for making'.
    No. 18, in page 4, line 24, leave out from 'words' to end of line 26 and insert
    `the material consideration leading the Secretary of State to make any such determination'.
    No. 19, in page 4, line 27, leave out from 'words' to end of line 29 and insert
    `the material consideration leading to them'.
    No. 20, in page 4, line 28, leave out from 'words' to end of line 29 and insert
    `the reasons for making them'.
    No. 21, in page 4, line 32, leave out from 'words' to second 'the' in line 33 and insert 'the reasons for making'.
    No. 22, in page 4, line 32, leave out from 'words' to end of line 34 and insert
    'the material considerations leading the Secretary of State to make the determination'.
    No. 32, in page 5, line 47, at end insert—
    `14.— (1) Section 56 of the said Act of 1980 shall be amended as follows:
    (2) After subsection (10) there shall be inserted—
    "(10A) If representations are made to the Secretary of State by any association of local authorities or by any local authority that the total expenditure of local authorities generally or of any particular local authority' shall be adjusted by the addition or subtraction of expenditure of any description the Secretary of State shall consider those representations before determining whether or not to make a direction and shall give reasons for his decision.".'.
    Mr. Straw: Amendment No. 16 proposes that paragraphs 8 and 9 of schedule 1 should be left out. When, earlier today, I made a submission to Mr. Speaker about the possibility that a certificate might be made classifying this Bill as a money Bill, I drew particular attention to paragraphs 8, 9 and 13. I hoped to show Mr. Speaker that this Bill is about much more than the variation of charges out of moneys voted by Parliament.
    11.45 pm
    Paragraphs 8, 9 and 13 are not subordinate issues but go to the heart of the relationship between central and local government in relation to financial matters. They relate to the explanations that Secretaries of State are to be required to give for the decisions that they have made in relation to various determinations under the rate support grant legislation.
    We discussed this aspect of the Bill at some length in Committee. The Minister's anxiety is that the existing words, which require him to spell out the considerations
    144
    that lead the Secretary of State to make any such determination, are so wide that he might be tripped up in court when he had inadvertently failed to specify such considerations. I think the Minister accepted that no such attempts had so far been made to go to court under section 60(6)(b) of the 1980 Act. Therefore, this anticipated the possibility of a legal assault rather than dealing with one that had already taken place.
    Our objection to paragraphs 8 and 9 is that they remove a clear duty under the 1980 Act and substitute a wholly subjective discretion. Instead of the Secretary of State giving the considerations that led him to make the determination, there is a discretion to provide such explanations as he
    "thinks desirable of the main features of any such determination".
    That could mean anything or nothing.
    The Minister said that he and his hon. Friends were reasonable people, and we are told ad nauseum on account of Wednesbury that that goes without saying. He said that as reasonable people they would provide as much information as possible—indeed, that we would not be able to spot the join between the application of the present provisions and the new provisions.
    Two points arise. First, if we are unable to spot the join between the old regime and the new one, why make the change at all? Secondly, while this Minister may be very reasonable, he may at some stage be elevated to an even higher position—
    Mr. Terry Davis: A peerage.
    Mr. Straw: That awaits him in any event, but as the roulette wheel has turned, half the Cabinet has been in office for less than a year. Therefore, it is short odds against, if not odds on, that the Minister may find himself in the Cabinet. However, he will not be there for ever, and who knows how another Secretary of State may interpret these words. Secretaries of State do not have to take account of explanations offered in this House, and they cannot be the subject of court actions. As we well know, only the words on the face of Acts can be tested in the courts, and paragraph 8 waters down an existing and important duty.
    When we debated this in Committee, I sought to meet the Minister half way by accepting that the words "the considerations" might have been slightly infelicitously drafted. The Minister feared that everything would have to be put in the pot, including the reason why he had a go at Birmingham, which may have been because he had a bad breakfast. To meet the half genuine point of the Minister, I suggested that "consideration" should be qualified by "material" so that we would deal with the main considerations leading to the determination. The Minister said:
    "I shall study closely what he has said, but that undertaking carries with it the lowest level of moral commitment to introducing an amendment." — [Official Report, Standing Committee G, 15 July 1986; c. 164.]
    We may be denied the possibility of pursuing this, even in the other place, if the Bill is certified as a money Bill, which I hope it is not. I understand, but do not accept, the Minister's argument that the wording is too wide. Certainly, the new wording is too narrow and will give Ministers too substantial a discretion. I hope that the Minister will accept the amendment which incorporates

    145
    "material" as a qualification. That would meet the Government's concern that they should not have to specify every tiny consideration, but merely the main ones.
    The courts are capable of applying common sense in this case. They are not expected to produce tomes the size of the Encyclopaedia Britannica, merely an adequate explanation of the reasons for Ministers' decisions. If local government is to be convinced that there is a systematic approach to the amounts of block grant they receive and that decisions are not based on caprice, it is crucial that it can satisfy itself how decisions are made. The Minister knows well—he is sensitive about this—that relations between central and local government have taken more than one knock over the past five years. He is anxious to restore them, but he will not do so if he seeks to deny local authorities adequate information about how decisions are made.
    Amendment No. 32 seeks to amend section 56 of the Local Government Planning and Land Act 1980. It states:
    "If representations are made to the Secretary of State by any association of local authorities or by any local authority that the total expenditure of local authorities generally or of any particular local authority shall be adjusted by the addition or subtraction of expenditure of any description the Secretary of State shall consider those representations before determining whether or not to make a direction and shall give reasons for his decision."
    The amendment seeks to require the Secretary of State to consider requests from local authorities to amend the definition of total expenditure for block grant purposes and to give his reasons for granting or not granting such requests. In previous debates we considered the operation of targets and I moved new clause 1 to remove the power to establish targets under the 1982 legislation. Targets have now been abandoned for the time being and we do not lament their passing. But of the facilities that went with targets was the Secretary of State's opportunity to disregard certain items of expenditure when comparing an authority's expenditure with its target. That was an important safety valve of the target mechanism and enabled certain classes of expenditure which everyone accepted were essential not to suffer penalty.
    Under the so-called pure block grant arrangements, a similar mechanism is not provided for disregards, but that would be all right provided that the penalty system was abandoned altogether. Although targets were abolished, the penalty system continues, with changes in the slope of the schedules, which means that authorities will still suffer considerable financial penalties if they spend over their grant-related expenditure assessment, plus tolerance. The abolition of the target mechanism and, with it the disregards, mean that a number of expenditures that would have been disregarded for target purposes and that would not have suffered penalty under that system will place some authorities in a more difficult position than would otherwise have been the case.
    As examples of the cost to ratepayers of various disregards, in 1985–86 Lambeth paid £1·36 for every £1 of expenditure. In 1986–87, based upon provisional exemplifications of the settlement, with package A GREAs, the extra cost to Lambeth will be £2·17. In 1985–86, for every £1 of additional spending the cost to Birmingham was £1.09. In 1986–87 it will cost Birmingham £2·60. Most reprehensible of all is Lancashire. For every £1 of additional spending last year it was only having to pay 72p. This year it is having to find £1·24.
    146
    A paper was published by the Association of Metropolitan Authorities, supported by the London Boroughs Association, the Association of Local Authorities and the Greater London Council, in an effort to seek a way out of this problem. It is important that the Minister should make observations upon that paper.
    Mr. Simon Hughes: I support the amendments. The Minister will remember that in Committee it was strongly argued that the local authority associations would appreciate as much explanation as possible. We sought to find the best definition. The reply of the Under-Secretary of State, the hon. Member for Mitcham and Morden (Mrs. Rumbold)-I was grateful to her for it—dealt with the precedent for the word "desirable". I accept entirely what she said about that being an appropriate word. The amendments do not preclude desirability as a factor, if that is thought to be appropriate. However, the amendments seek to provide for everybody who is interested in and affected by the rate support grant decisions of the Government the most material considerations—that is, the matters that relate to the basis of the Secretary of State's decision.
    Perhaps the Minister will be able to say that what we are asking for is what the Government intend and that they will tell us a little more tomorrow. We are seeking to make clear the main criteria, so that when the annual reports on the rate support grant are published, there can be an assessment, year on year, of the change in the decision-making process and material parts of that. and in particular on the way in which the criteria that the Government have chosen to use are applied either local authority by local authority, or group of local authorities by group of local authorities.
    12 midnight
    As the hon. Member for Blackburn (Mr. Straw) said, amendment No. 32 is something that the Minister could meet by way of an undertaking. The Government are being asked to undertake that certain representations made are considered, and that there is a specific duty and process whereby matters raised in the amendment, brought singly by local authorities or by groups of local authorities, about the total expenditure or single expenditure of a local authority, can, when they are added to or subtracted from, be the subject of specific consideration by the Government. These are procedural matters, but they would help confidence building between local authorities and central Government, arid the understanding of the processes of central Government. They would follow in the tradition that the previous Secretary of State said it was the intention of the legislation to carry out, that is, to make the process more simple and comprehensible. I hope that we can achieve some acceptance by the Minister of what is intended by the amendments.
    Mr. Waldegrave: I am sorry to have to disappoint the hon. Member for Southwark and Bermondsey (Mr. Hughes), who has joined our debate. Perhaps he has dropped in to see whether the Opposition Front Bench is occupied. On one memorable occasion, he found it unoccupied and moved in, but I would not advise a takeover with the hon. Members for Birmingham, Perry Barr (Mr. Rooker) and for Birmingham, Hodge Hill (Mr. Davis) as bodyguards to the hon. Member for Blackburn (Mr. Straw).

    147
    We went into the arguments about consideration in some detail in Committee. As the hon. Member for Blackburn was generous enough to say, if the law meant that every underlying consideration had to be published, that would produce a mountain of useless information, which would not help the local authorities or anybody else. A good way of hiding useful information is by surrounding it with useless information, and that is as good as not providing any information.
    In Committee I told the hon. Member for Blackburn that we would look at other formulations that he provided, and we have done so. The hon. Gentleman suggested that "material considerations" should be specified, but I am advised that that would not help because it could be argued that every consideration underlying every GRE component is material. It would have done us no harm to have accepted a formulation that would have met the hon. Gentleman's point, but his suggestion would not work. Therefore, I have to ask him to accept that the declaration that we have made, with which my right hon. Friend the Secretary of State is associated, that it is not our intention to reduce the level of explanation given, should carry the burden of meeting the points that he and the hon. Member for Southwark and Bermondsey made.
    On the fundamental and new point that the hon. Member for Blackburn made about trying to reintroduce the disregard system into the working of block grant, I have one of those dual-edged arguments. First, it is out of the question to do so, because that would plainly be turning the workings of the block grant into something different. Rather than allowing the resdistributive system of the slope to do its work, it would reintroduce something much more like holdback and targets. On the other hand, we have, by law, to do a large part of what he wants. We have to consider any representation made about total expenditure and what should be included in it. Several representations have been and are being made, but it would take a very strong case to make us use the total expenditure definitions to reintroduce disregards in that way. It would take us back, to some extent, to the duality and complexity of having a target and holdback system.
    Mr. Straw: Does the Minister accept that as long as the block grant mechanism is used for penal purposes and for purposes for which it was not intended — it was originally intended as a distribution system—there must be some safety valve to take account of expenditure that authorities have incurred, through no fault of their own, for national reasons or because of an act of God?
    Mr. Waldegrave: I do not accept that argument. The block grant system, schedule and slope are used in response to a good deal of pressure from my right hon. and hon. Friends in order to try to provide a marginal taxation rate that puts greater pressures on the high spenders than on the low spenders. Within that, we do not accept that it would be sensible to reintroduce the additional complexity of a zero marginal rate for certain categories of expenditure. However, we will have to listen to representations on the definition of total expenditure. In view of that, perhaps the amendment will not be pressed.
    Amendment negatived.
    Mr. Boyes: I beg to move amendment No. 33, in page 5, line 47, at end insert—
    148
    `(14.—(1) Section 57 of the said Act of 1980 shall be amended as follows:
    (2) After subsection (3) there shall be inserted—
    `(4) A local authority's grant-related expenditure shall not be less than the level of expenditure (if any) determined or redetermined by the Secretary of State for the authority under section 3 of the Rates Act 1986.'.
    The amendment requires the Secretary of State, in determining grant-related expenditure for those authorities subject to rate limitation, to set it at a level that is not less than the expenditure level determined under section 3 of the Rates Act 1984. Section 3 enables the Secretary of State to determine an expenditure level for those authorities subject to rate limitations. The 1984 Act is also the primary legislation under which the new joint authorities are subject to precept control for a period of three years from their establishment.
    It is a constant source of discontent that rate-capped and precept-controlled authorities are subject to two separately assessed bench marks of expenditure: GREA, being the formula-derived standard level of service, and the expenditure level, which is a more realistic assessment of what the Secretary of State believes is a reasonably achievable level of expenditure. At the basis of the argument is the principle that the expenditure level represents a recognition by the Secretary of State that that is the level at which authorities need to spend if they are to maintain a reasonable level of service. If that level of expenditure is reasonable, the artificially contrived GREA should be set at least at the same level. I can illustrate some of the problems with reference to newly established metropolitan joint police authorities for 1986–87. I live in Northumbria, and there the GREA is £43.178 million and the expenditure level is £43·431 million. Thus the level of expenditure is higher than the GREA.
    But the difference can perhaps best be illustrated by looking at west Yorkshire. There, the GREA is £50·712 million and the expenditure is £63269 million, a difference of almost £13 million.
    An authority covered by the Rates Act 1984 may be expressly designated for rate limitation only if it appears to the Secretary of State that its total expenditure in the preceding year was excessive, having regard to general economic conditions. For the new police authorities which are deemed to be designated, there is no presumption that the total expenditure of the predecessor authorities in 1985–86 was excessive. In determining the expenditure level for these new authorities the Home Secretary's principle is that each authority should be broadly able to maintain the level of service for its area provided by the predecessor authority, and he takes into account all the individual circumstances of each authority.
    It is clearly inequitable that in those conditions the GREA should be set lower than the expenditure level. There is a precedent for the suggested course of action. The GREA for the Metropolitan police is set equal to the budgeted expenditure and the amendment would ensure similar treatment for rate-capped and precept limited authorities. In other words, if it is good enough for the Met it is good enough for the police authorities.
    Mr. Simon Hughes: Last year the Government sought to move towards reconciling the difference there had always been between target and GREA. That was always an inconsistency and it gave rise to some illogicalities complained about by hon. Members in all parts of the House. The complaint was that what local authorities

    149
    could aspire to reach without penalty was not the basis on which their rate support grant was calculated compared to the needs of other local authorities. The amendment would continue the march towards consistency and would reconcile yet another and the most recently introduced of the Government's assessments — that applied under the Rates Act 1984 for rate capping purposes.
    I hope that the Minister will be able to say that the Government will simplify matters by defining in one way for all purposes the specific amount of local authority expenditure calculated by them as being appropriate. It would seem logical that it should be extended to the calculations for the purposes of rate capping. I can understand that there may he an argument for saying that there is a common calculation, but there is room for an acceptable maximum that goes above that to allow scope within which local authorities can expend without being capped and having their rates determined by the Government.
    If not tonight and in the context of this Bill, I hope that the Minister will be able to say that it is the intention to reconcile this definition with the others. The Minister may be able to shorten this debate by asking us to wait 12 hours at which time the Government will accede to the request in an announcement.
    Mrs. Rumbold: As the hon. Member for Houghton and Washington (Mr. Boyes) has said, all local authorities and expecially the new joint authorities can be selected for the first three years but they can only be selected for rate limitation under section 2 of the Rates Act 1984 if their spending exceeds their grant-related expenditure in the year of designation.
    I have to tell the hon. Member for Southwark and Bermondsey (Mr. Hughes) that the practice has been in the first two years of its operation that authorities are selected only if they are spending at least 20 per cent. above their grant-related expenditure. The amendment would arbitrarily increase the level of an authority's grant-related expenditure and would validate any authority that has chosen to indulge in high spending. it would also give them a higher grant entitlement at the expense of local and precepting authorities which are generally low spending. It would give them an unfair advantage and would let authorities out of rate limitation for the following year because by definition, those authorities would no longer he spending in excess of grant related expenditure. For those reasons I find it impossible to accept the amendment.
    Amendment negatived.
    Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Wuldegravel]
    12.14 am
    Mr. Straw: My understanding was that the Minister would say a few words on Third Reading. I am delighted that he wants to speak after me rather than before me.
    We have been over the ground of the Bill. It is three and a half months since the Minister came to the House to make his now-famous statement on the block grant multipliers. Never has a statement had such a fascinating title. Of course, the nation has been held enraptured ever since as we have pursued the Bill.
    However, the Bill had a bad birth. It was dreamt up by Ministers to get them out of a difficulty caused by the application of their policies during the past seven years. It is a bad Bill, and we have not been convinced otherwise
    150
    during our consideration of the measure. If we have the opportunity, we shall ensure that the Bill is pursued in the other place.
    12.16 am
    Mr. Simon Hughes: The criticism of the Bill from the beginning was that it was introduced solely because the courts had said that they would rule against the Government. It was the Government's response to the case brought by the city of Birmingham. It is never a satisfactory beginning for any legislation to be introduced as a way of getting the Government off a hook of their making and to alter the rules that they laid down. The principle of retrospective legislation, as applied by the Government in the Bill, has never been adequately justified. It does not accord with the principles of retrospective legislation that is acceptable and has been used in the past.
    The Bill includes a couple of tidying-up mechanisms which are acceptable, but the part of the long title which suggests that the other major purpose of the Bill was, "to clarify and amend the law relating to rate support grants," has not, sadly, produced the clarification and amendment that many of us would have wished.
    It is clearly now an issue as to whether the Bill can be debated only by the House of Commons. I hope that those who consider such matters will remember that the Bill contains matters that relate not only to finance. Indeed, the second part of the long title makes it perfectly clear that the clarification and explanation of the law—for example, the explanation of what goes into the determination of rate support grant—goes far beyond that. I hope that the Bill will go to the other place, where it can be debated and, if necessary, amended. With the Bill, the Government have made no substantial progress towards convincing the Opposition, and many of their own Back-Benchers, that they have yet got the rules, let alone the application, of the rate support grant and rating system anywhere near right.
    12.18 am
    Mr. Allen McKay: We understand that this could be a money Bill. Had we known or suspected that previously, the Committee stage would have been much longer than it was. As you know, Mr. Deputy Speaker, when a Committee considers amendments to a Bill, it also looks to the Lords to table other amendments. If the Bill does not go to the other place, some matters will not be debated at all. I wish to put some of them on record.
    In this Bill, the Secretary of State has taken to himself great powers. But those powers will be available to any Secretary of State, of any political persuasion, once they are on the statute book. The Bill talks about local authorities
    "belonging to the appropriate class."
    For the first time, we shall be in danger of placing authorities into classes for the distribution of rate support grants. The amount that they receive will depend on their class, not the special difficulties to be found in those local authority areas. The Bill, if passed, will give the Secretary of State powers to direct finance to any authority in any way that he wishes. If the Secretary of State exercises those powers in one direction, he must remember that a Labour Government can exercise them in another.
    12.20m
    Mr. Waldegrave: With the leave of the House, Mr. Deputy Speaker, I should like to say a few words. We are about to pass a Bill which will clarify the law and make it what it was thought to be in a number of important technical respects in relation to rate support grant settlements. I hope that we have blocked off one or two other technical opportunities for challenge which would have introduced further confusion into the rate support grant settlements, both those that have been made in the past and will be made in the future.
    I am grateful for the support given by my hon. Friends in Committee and on the Floor of the House. The Opposition have probed the Bill properly and introduced a number of powerful arguments, in particular relating to Birmingham, if I may mention that dreaded city. [HON. MEMBERS: "Oh!"] Not dreaded in any real sense—that attractive and important city. We have all learnt a great deal about Birmingham; but, apart from that, I think that the general opinion of the House will be that the Government have thoroughly won the argument on the Bill.
    Question put and agreed to.
    Bill accordingly read the Third time, and passed.

Insolvency Bill [Lords]
Order for Second Reading read.
12.21 am
The Solicitor-General (Sir Patrick Mayhew): I beg to move, That the Bill be now read a Second time.
This Bill, and the Bill which the House is to consider next—the Company Directors Disqualification Bill—are the product of a single consolidation exercise and are therefore closely linked. With the permission of the House, I will speak to both Bills now since it is not really possible to explain why the consolidation exercise was necessary without referring to both Bills.
This consolidation presents an unusual feature in that much of the legislation which is to be consolidated is of very recent origin. The principal legislation concerned is a part of the Companies Act 1985 and the bulk of the Insolvency Act 1985. The House will recall that the Companies Act was itself passed as part of a major consolidating exercise. The Insolvency Act made major revisions in the law relating to personal bankruptcy and also made amendments to the companies legislation. Necessary though it was to enact these two major pieces of legislation last year, the result has been to leave the law relating to insolvency split between two statutes. It was recognised that this left the law in an unsatisfactory state and a consolidating exercise was at once set in hand. Fortunately, since the bulk of the Insolvency Act was not to come into force before the end of this year, the opportunity arises to effect the consolidation with the minimum of disruption to practitioners in this area of the law and anybody else affected by it, and before a large body of supplementary subordinate legislation comes to be made.
The Insolvency Bill now before the House contains in one code of legislation the law relating to insolvency as respects both companies and individuals. The Company Directors Disqualification Bill brings together the provisions concerning disqualification from the management of companies.
Both Bills have been passed in another place where they were referred, in the usual way, to the Joint Committee on Consolidation, &c., Bills. The Joint Committee reported that the Bills were pure consolidation, though a small number of drafting changes and corrections were made by the Joint Committee and at Committee stage in another place. We are, as always, grateful to the Committee for its painstaking scrutiny. The two Bills constitute a very necessary consolidation in this most important area of the law and they will be of great benefit to practitioners and others. Our gratitude is due to the draftsman for producing the Bills in the short time available and to the Joint Committee for its consideration of the Bills.
12.25 am
Mr. Nicholas Brown: It is unusual for the House to consider legislation that was passed only last year, but there are good reasons for doing so, and I am sure that the legislation will be welcome in its new form, especially to practitioners, as the Solicitor-General said.
I understand that these are the last two Bills that will be considered by the Consolidation Committee under the chairmanship of Lord Brightman. I associate the Opposition with the tribute to his work, which is much appreciated by the House.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House. [Mr. Lennox-Boyd.]
Bill immediately considered in Committee; reported, without amendment.
Bill read the Third time, and passed, without amendment.

Company Directors Disqualification Bill [Lords]
Read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Lennox-Boyd.]
Bill immediately considered in Committee; reported, without amendment.
Bill read the Third time, and passed, without amendment.

STATUTORY INSTRUMENTS, &c.

  TERMS AND CONDITIONS OF EMPLOYMENT
  Motion made, and Question put forthwith pursuant to Standing Order No. 79 (Standing Committee on Statutory Instruments, &c.)
  That the draft Job Release Act 1977 (Continuation) Order 1986, which was laid before this House on 1st July, be approved.—[Mr. Lennox-Boyd.]
  Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS

  MEASURES AGAINST COUNTERFEIT GOODS
  Motion made, and Question put forthwith pursuant to Standing Order No. 80 (Standing Committees on European Community Documents)
  That this House takes note of European Community Documents Nos. 4092/85 and 4058/86, a proposal for a Regulation laying down measures to discourage the release for free circulation of counterfeit goods, and a proposed Amendment to the draft Regulation; recognises that there is much justified concern at the size and growth of the worldwide problem of counterfeiting; supports the activities of the Community in trying to find ways to contain international trade in counterfeit goods generally; and supports an instrument which would provide more effective measures to prevent counterfeit goods from reaching the internal market of the community.—[Mr. Lennox-Boyd.]
  Question agreed to.

PETITIONS

  Mrs. Irina Ratushinskaya
  12.30 am
  Mr. Max Madden: I beg to ask leave to present a petition signed by David Somerville of Heaton Park drive, Bradford and 144 of my constituents from the congregations of St. Cuthbert's Roman Catholic church, St. Barnabas church and Westgate Baptist church, which calls attention to the plight of Irina Ratushinskaya, a poet, who is confined in a Soviet labour camp because of her poetry. She is in very poor health and, in the view of her husband and other fellow prisoners, her life is in danger.
  The petitioners pray that
  your honourable House encourages the Foreign Secretary and his colleagues in their representations to the Soviet Government with the purpose of obtaining both the release of Mrs. Ratushinskaya from the labour camp and her urgently needed assessment and treatment.
  To lie upon the Table.

  Strategic Defence Initiative
  12.31 am
  Mr. Max Madden: I beg to ask leave to present a petition signed by Kath Parry of Duchy avenue, Bradford and 89 of my constituents — the signatures were collected in one hour — which emphasises
  That the costs of SDI research would divert public money which might be spent to alleviate the financial cuts now being inflicted on health, welfare and educational services or on the modernisation of our manufacturing industries.
  The petitioners pray that
  your honourable House to make public the secret agreements governing both United States bases and Star Wars research in Britain; to take steps to remove the American nuclear bases and to end Star Wars research; to take positive initiatives to end Britain's role in the nuclear arms race and to promote the peaceful solution of international problems.
  To lie upon the Table.

Mr. L. Hedges (Pension)
Motion made, and Question proposed, That this House do now adjourn.[Mr. Peter Lloyd.]
12.32 am
Mr. Tony Baldry: Hon. Members are not infrequently approached by constituents who seek assistance in resolving a matter that they feel to be unjust or unfair. Frequently help can be sought from a Government Department, they can be advised of possible legal remedies, or, on some occasions, assistance can even be sought from the parliamentary ombudsman.
From time to time one is approached by a constituent who has a case that is not so simple, where advice from all the relevant Government Departments has been given, where, on the face of it, there would appear to be nothing for which there could be legal address, but where, none the less, if all the facts were known, the man on the proverbial Clapham omnibus or the man in the Bicester high street would say, "Hey, that is not right; it is not fair. Something ought to be done about it."
In such circumstances it is right to draw the attention of the House to the matter, first, in the hope that a reexamination of the facts might act as a catalyst for a reexamination of, and, perhaps, a happy solution to the case, and, secondly, so that others can take note of the lessons to be learnt from the case. I am grateful that this debate enables me to raise one such case, that of the pension from the United Kingdom Atomic Energy Authority of Mr. Leslie Hedges, a constituent of mine. I am grateful to the Minister for the time and attention that he has already given to this case.
Mr. Hedges retired in 1980 after 40 years of employment in the public service, throughout which time he paid a full contribution towards his pension. From 1937 to 1948 he worked for the Oxfordshire county council; from 1948 to 1961 he worked for the National Health Service; and from 1961 he transferred his employment to the United Kingdom Atomic Energy Authority at Harwell.
Shortly after Mr. Hedges transferred to Harwell, the superannuation officer of the AEA wrote to him confirming that in respect of his earlier employment he had been credited 20 years and 88 days in the UKAEA nonindustrial superannuation scheme. Thus, in 1961 Mr. Hedges commenced his employment with the UKAEA with no fewer than 20 years of fully paid-up pension contributions already made. It is perhaps worth noting in passing that Mr. Hedges retained the letter sent to him in September 1962 by the UKAEA about his pension, which would seem to suggest a cautious, prudent man, rather than a man who might gamble with his future, as some came to suggest later.
If Mr. Hedges had stayed with the UKAEA until the age of 65, he would have received a full pension based on 40 years' service and his final salary. Furthermore, he would have received a tax-free lump sum of three times his annual pension. However, in 1970, after 10 years' service at UKAEA, and by now 30 years' service in the public sector, and at the age of 55 years, Mr. Hedges resigned his post as clerical officer at Harwell and took up employment at the University of Oxford. At this point matters go awry in respect of Mr. Hedges' pension.
The sensible thing would have been for Mr. Hedges to be able to transfer his 30 years' pensionable service from
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the UKAEA's non-industrial superannuation scheme to the pension scheme of the University of Oxford. The UKAEA pension scheme had a clear provision for the transfer of previous pension rights. Indeed, in 1961 Mr. Hedges had been able to transfer his accumulated pension rights from his local government and National Health Service employment to the UKAEA scheme. That, however, appeared not to be possible with the University of Oxford scheme.
Some years later, when, for reasons which I shall explain later, it became apparent that the value of Mr. Hedges' eventual pension was being substantially eroded, he made further inquiries of the university to ascertain whether it would take on his accumulated pension to date. The university was prepared to accept only the transfer of a cash sum from Mr. Hedges' previous employers. The cash sum that the UKAEA was prepared to make available to the university in respect of Mr. Hedges' pensionable service was only about £8,000. It should be remembered that that was for 30 years' fully reckonable pensionable service. Mr. Hedges had been paying about 6 per cent. of his salary while at UKAEA towards his pension.
Given this sum, the university was not prepared to credit Mr. Hedges with 30 years' pensionable service, nor 20 years, nor half, 15, but only 11 years and one month. When pensionable service is being transferred, the only consideration for the university is the cash value of the pensionable service offering the transfer payment. Put shortly, Mr. Hedges' new employer noted the value of what his former employers were prepared to transfer in respect of his pension contributions and, despite the fact that they represented 30 years' service, was able to offer only 11 years' credit within the rules of its own scheme. It was understandable that at 55 years Mr. Hedges did not accept that.
I make no criticism of the university for its superannuation scheme. It was simply applying the rules of the scheme to the situation with which it was presented. I am not in a position to comment on the fairness or otherwise of the transfer value of about £8,000 that was offered by UKAEA. But it must be a matter of general concern when someone who has spent the larger part of his working life in the public sector finds in transferring his pension that it is worth considerably less than he had anticipated.
What happened to Mr. Hedges' pension? Apparently, until 1972 staff who resigned from UKAEA had an option under the rules of its non-industrial superannuation scheme to arrange at the time of their resignation for their superannuation rights to be reserved by the purchase of a deferred annuity instead of having their pension benefits frozen in the UKAEA scheme until normal retirement age. Put briefly, Mr. Hedges was given a choice: he could leave his pension benefits frozen in the United Kingdom AEA scheme until the time he retired, at which point he would receive a percentage of the pension relevant to his years of service, or he could, in effect, use his pension contributions up to the time of his resignation to purchase a deferred annuity.
Sadly, Mr. Hedges was given no advice as to the respective merits of such options nor as to their potential dangers. It so happened that the benefits offered by the insurance company in 1970 for a deferred annuity provided potentially a much higher fixed income on paper than the United Kingdom AEA alternative. But what no

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one mentioned and made clear to Mr. Hedges, when he considered which option to take, was that the apparent advantage of the deferred annuity was always vulnerable to inflation, and the danger that, in time, it would become less favourable.
I do not suggest that there was any negligent misstatement on behalf of the AEA. As far as I can ascertain, there was no advice at all. No one endeavoured to explain to Mr. Hedges that he was, as the deputy general secretary of the CPSA — Mr. Hedges' trade union — observed, taking a gamble that the annuity option would hold its value. No one told Mr. Hedges, or even hinted, that he was engaged in a gamble. As Mr. Hedges says, he is not a gambling man, and he certainly would not have gambled with his pension. He was simply given two options and he took the option which, at the time, seemed to be to his advantage and the most attractive.
It was not long before the ravages of continuing high inflation seriously eroded the value of Mr. Hedges' pension. With inflation now around 3 per cent., it is all too easy to forget those years of the 1970s with inflation, on occasions, over 25 per cent. Inflation destroyed the value of people's savings and pensions.
It did not take Harwell long to realise that the option could be disastrous for its former employees. In fact, in 1972, just two years after Mr. Hedges transferred to the University of Oxford, it removed the option. But for Mr. Hedges it was too late.
When Mr. Hedges realised what was happening he asked the United Kingdom AEA to change his choice. However, the AEA made it clear that deferred annuity arrangements were specifically in lieu of the benefits that would otherwise have been provided under the authority's scheme. The UKAEA maintained that its liability was discharged absolutely when the capital sum was paid to the insurance company in respect of Mr. Hedges' deferred annuity, and that it was not responsible for augmenting funds provided by the insurance company.
Even with inflation running at only 3 per cent., Mr. Hedges is becoming steadily worse off every month and year that passes. His pension, in respect of his 30 years' employment in the public sector, until he left the UKAEA is a derisory sum. It is just £868 per annum.
Should not the AEA have appreciated that it was offering a choice, one option of which, in times of rising inflation, could have a dramatic and devastating effect on M r. Hedges' final pension?
How many others are there in the same position as Mr. Hedges? How many others resigning from the United Kingdom Atomic Energy Authority prior to retirement age took that option? Why did the AEA not give Mr. Hedges some impartial advice as to the merits of the options available to him? After all, as Mr. Hedges has said to me, he could not believe that the UKAEA was acting other than in his best interests. He trusted the authority as an employer in the public sector. If the UKAEA realised in 1972 that this was an unsound option, should it not have appreciated that fact by 1970?
In 1980, the chairman of the UKAEA, Mr. Hill, said that he had
"sympathy with the problems caused by inflation for those who took deferred annuities rather than the United Kingdom Atomic Energy Authority's superannuation scheme pension"
and that UKAEA had
"looked most anxiously and carefully into the possibility of doing something to improve their pension position,"
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but apparently the authority concluded that no remedy was available. However, I have no doubt that the proverbial man on the Clapham omnibus or the man in Bicester High street, if aware of the facts of the case, would say that it is unfair that someone who has given a lifetime of work in various ways to the community should find himself in this position.
Mr. Hedges simply and understandably wants a pension that reflects his many years of public service. I believe that this case merits re-examination. There may be similar cases. I ask my hon. Friend the Under-Secretary of State simply to undertake that his Department will look into Mr. Hedges, case to ascertain whether, even at this late stage, there is some discretion to enable him to receive a reasonable pension in respect of his years of service and substantial contribution, and not one the value of which is eroded day by day and month and month.
12.46 am
The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): My hon. Friend the Member for Banbury (Mr. Baldry) has raised with meticulous care an important issue on behalf of his constituent, Mr. Hedges. I have listened with close attention to what he has said, but, for reasons which I shall explain, I fear that there is nothing that the United Kingdom Atomic Energy Authority or the Department of Energy can do to improve the position of Mr. Hedges or of other pensioners in respect of the matters raised by my hon. Friend.
As my hon. Friend has told the House, Mr. Hedges joined the United Kingdom Atomic Energy Authority on 8 August 1961 as a clerical officer, having previously worked for a local authority and for the National Fleali:h Service. By means of the payment of a "transfer value" from the NHS pension scheme, he was able to make his previous local authority and NHS service superannuable in the authority's principal non-industrial superannuation scheme. The credit in the authority's scheme for previous service was 20 years and 88 days.
Mr. Hedges resigned from the authority on 14 August 1970 to take an administrative post with Oxford university. He had at that stage 29 years and 95 days in the authority's scheme, including the 20 years and 88 days of back service. At that time, Oxford university's pension scheme could not accept in transfers of pension rights earned with other employers. Mr. Hedges had the choice of two methods of preserving his accrued pension rights under the rules of the authority's pension scheme. First, he could have had his pension benefits "frozen" in the scheme until his contractual retirement age with the authority—65. Alternatively, he was able to purchase a "deferred annuity" — a policy with an insurance company which provided a lump sum and a fixed annual pension from age 65. It was the authority's principle and practice to leave individuals to choose the method of preservation they judged to be in their best interest.
The deferred annuity option had the primary purpose of providing a form of preserved pension provision for early leavers with less than 10 years' service who would otherwise, under the then rules of the scheme, have been entitled only to a refund of their own contribution, plus a small amount of interest, but less a deduction for tax. To improve the available benefits members were given an entitlement, if they wished, to transfer their pension benefits into an annuity policy to make some provision for retirement.

159
In addition, the deferred annuity option also gave those scheme leavers who had 10 or more years' service, and who therefore had a right to benefits to be preserved under the scheme, a degree of choice in how their benefits should be preserved. This extension was made at a time when the authority was having to run down staff numbers rapidly, and it was desirable to be able to offer maximum flexibility in pension provision for those who left to take up other employment. Contrary to the impression that I think was given by my hon. Friend, the authority transferred a proportion recommended by the actuary of its own, as well as Mr. Hedges' contributions.
As he requested in advance of resigning, Mr. Hedges was given details of, first, the value of his benefits if frozen in the authority's scheme and, secondly, the proceeds of a deferred annuity based on the then current rates. The amounts in round pounds were as follows. First, if he chose to stay "frozen" in the authority scheme, he would receive a lump sum of £710 and a pension of £398, though with a possibility that these amounts would be augmented by pensions increases.
Secondly, if he chose a deferred annuity, Mr. Hedges could have either a fixed lump sum of £1,883 or £2,153 with the benefit of estimated bonus — plus a fixed pension of £672 or £769 with estimated bonus — or alternatively a fixed pension of £896 or £1,024·19 with estimated bonus but no lump sum.
It was made clear that the estimated bonus was simply an estimate and in no way guaranteed. Assuming no pensions increases in the occupational scheme, the figures presented to Mr. Hedges indicated a relative attraction for the deferred annuity option, though of course, on the assumption that scheme pensions would be increased, this altered the relative attractiveness of the options. It was authority policy not to press employees to select one route rather than another, as the authority was in no position to predict future events.
On 13 July 1970, Mr. Hedges applied for a deferred annuity—making in effect the assumption that pensions increases would not catch up with the annuity—and on 17 August accepted the version of the deferred annuity "cash lump sum" plan.
I should explain here the authority's relationship with the insurance company involved. For all employees who wanted the deferred annuity option at that time, the authority entered into a master policy with the Guardian Assurance Company Ltd. It was this company's estimated rates that were quoted to the individuals concerned. The authority fully discharged to the Guardian all liability for pension provision for those individuals on whose behalf the authority paid over to the Guardian a capital sum to secure a deferred annuity policy. The authority had no powers of discretion concerning the proceeds of the policies.
When Mr. Hedges reached the age of 65 in 1980, proceeds of the annuity policy provided benefits of a lump sum of £2,479 and a fixed annuity of £868. Had he elected instead for the "maximum annuity" variant, he would have received an annuity of £1,157, but no lump sum. If Mr. Hedges' benefits had been preserved in the authority's own scheme, they would have been worth in 1980 with the benefit of pensions increases a £2,300 lump sum and £1,288 pension, and his pension now would be £2,141 a year. The particularly high levels of inflation experienced
160
in the 1970s were difficult to foresee when Mr. Hedges resigned from the authority in 1970. The period of high inflation which eroded the value of fixed benefits has in retrospect shown that deferred annuities were a relatively poor choice to have made. But the judgment is made with the benefit of hindsight.
It would also have been impossible to foresee the introduction by the Government in 1971 of index-linked pensions. At the time Mr. Hodges made his decision in 1970, authority pensions were reviewed from time to time along with other public service pensions which were increased by individual Pensions Increase Acts. These increases were not regular and were not kept up with inflation, although they mitigated its effects. Subsequently, the Pensions (Increase) Act 1971 introduced updating every other year, and the Superannuation Act 1972 made updating mandatory on an annual basis. Such annual index-linking protects pensions from the eroding effects of inflation by increasing their value in line with rises in the retail price index.
In 1972, in view of the potential effect of inflation on the real value of deferred annuities, the authority decided to remove the annuity option from its pension scheme. I understand that that was done by administrative action, since the staff trade union side would not agree to the change. Until the annuity option was removed, some 786 employees had taken it.
I should like now to explain the attempts that have been made by the authority to alleviate the position of deferred annuitants, such as Mr. Hedges, both in general and in his particular case. A number of avenues have been pursued.
First, there have been discussions with the Department of Energy and its predecessors as to whether a way could be found of supplementing and index-linking deferred annuities ex gratia, on a par with public service schemes. But it was judged by the Department and the Civil Service Department that this would not be a proper use of public funds, given that those concerned had exercised a free choice in the knowledge that they were forfeiting all benefits under the authority scheme.
Secondly, on behalf of annuitants, the authority has asked the Guardian Assurance company whether it could increase the level of annuities in the light of interest rates and high inflation. However, the company has insisted that when it issued the policies the premiums were invested in a form so as to ensure that policy benefits were met, irrespective of future financial conditions. That meant that it had to invest the premiums in safe investments. It therefore said that it was not in a position to grant an increase in benefits provided by this means. The following is the relevant extract from its letter of 26 March 1982:
".… when an Insurance Company issues a policy, the premium is invested in a form which will ensure that policy benefits are met irrespective of future financial conditions. In the specific case of annuity contracts, investment would normally be in gilt-edged securities. This ensures that a regular series of cash payments is provided. Should interest rates rise, the value of the investment will fall but the income from the investment is unaffected. To invest money on short-term deposit would leave the Company vulnerable to a fall in market rates of interest, the expected income from the investment would be insufficient to meet the required payments. The annuitants would be unprepared to accept a reduction in benefits if interest rates had fallen. The investment policy, therefore, avoids loss due to a fall in interest rates but (unfortunately) precludes profit on an increase. The Guardian is not therefore in a position to grant an increase in respect of benefits already purchased."

161
Thirdly, from 1 April 1978 the Oxford university scheme was able to accept in transfers of accrued pension rights earned with other organisations. The authority accordingly asked Guardian Assurance if the annuity could be cancelled and a transfer value offered. The insurance company agreed to that and the transfer value offered by the insurance company was £8,250. I stress that that sum was determined by the insurance company and not the authority. That sum would have produced only 11 years of pension credit in the Oxford university scheme as calculated by that scheme's actuary, compared with some 29 years which were originally converted into the annuity. Mr. Hedges declined the offer and retained his annuity which came into payment in 1980 when he was 65. A substantial proportion of deferred annuitants have likewise declined offers to unscramble their pension position through transfer values to an occupational pension scheme.
Fourthly, the authority considered the option of providing payments from authority funds, but concluded that it was not able to do that since, as already explained, it surrendered all liability for such individuals' pension position to the Guardian Assurance Company. Any payments would, therefore, be ex-gratia and had already been deemed to be an improper use of public funds.
Fifthly, the authority considered whether assistance could be made available from the authority's benevolent fund. The benevolent fund is an independent registered charity which has as its purpose under its constitution the relief of poverty among the authority's past and present non-industrial staff. It is managed by its own committee of management and is to all intents and purposes independent of the authority, which cannot give it directions on the use of its funds. I understand that Mr. Hedges did not meet the criteria necessary to benefit from the benevolent fund.
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I am advised that in 1981 the authority board itself looked most carefully into the question whether any further steps could be taken to improve the pension position of its deferred annuitants. For the reasons I mentioned above it was forced to conclude that there were no further steps that could be taken.
I gather that Mr. Hedges wrote a letter of protest to my hon. Friend's predecessor in 1980 when his annuity came into payment. The then authority chairman, Sir John Hill, replied to the hon. Member expressing his concern and regret about the deferred annuitants' position but explaining that their decision on the means of preservation had been freely taken and that they were left in no doubt at the time that their decision on the means of preservation was in lieu of any continuing benefit from the authority's pension scheme. Sir John Hill pointed out that
"the apparent advantage of the deferred annuity [had always been] vulnerable to inflation and to the danger that it would become less favourable at some point in time."
There appear to be no avenues left unexhausted by the authority to enable it to do anything towards alleviating the position of Mr. Hedges and his fellow annuitants. Other public sector bodies, including the CEGB, have been forced to a similar conclusion about their own position. I think that the House will agree that the authority has gone to very considerable lengths to try to alleviate the problem and that Mr. Hedges was not misled about his pension position.
Mr. Hedges' experience, and that of others like him, demonstrates clearly the damaging effects of high inflation on people's lives. It is a further reason, if such were necessary, why the Government's determination to ensure that inflation is kept under control is very important indeed.
Question put and agreed to.
Adjourned accordingly at one minute past One o'clock.

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  Spina Bifida
  Spina Bifida
  Medical Research Council
  Medical Research Council
  Departmental Staff
  Departmental Staff
  O-level Pass Rate
  O-level Pass Rate
  Appeals
  Appeals
  Further Education
  Further Education
  School Closures
  School Closures
  Teachers and Lecturers (Pay)
  Teachers and Lecturers (Pay)
TRANSPORT
  A1-M1 Link Road
  A1-M1 Link Road
  M63 (Barton Bridge)
  M63 (Barton Bridge)
  Property Acquisitions
  Property Acquisitions
  Helicopters (Search and Rescue)
  Helicopters (Search and Rescue)
  M3 (Bar End-Chichester)
  M3 (Bar End-Chichester)
  Level Crossings
  Level Crossings
  Aviation Fuel Prices
  Aviation Fuel Prices
  Passenger Coaches (Roof Strength)
  Passenger Coaches (Roof Strength)
  Management Consultants (Departmental Contracts)
  Management Consultants (Departmental Contracts)
  British Rail
  British Rail
  British Airways (Employees)
  British Airways (Employees)
  Civil Aviation
  Civil Aviation
  Structural Highway Maintenance (Report)
  Structural Highway Maintenance (Report)
NATIONAL FINANCE
  EC (Resources)
  EC (Resources)
  Customs Officers
  Customs Officers
  Tax Inspectors (Wales)
  Tax Inspectors (Wales)
  Portsmouth Ferryport
  Portsmouth Ferryport
  Financial Management Unit
  Financial Management Unit
  EC Budget
  EC Budget
  Pensions
  Pensions
  Trustee Savings Bank
  Trustee Savings Bank
  Gross Domestic Product
  Gross Domestic Product
  Charities
  Charities
  Mileage Allowance
  Mileage Allowance
  Incomes
  Incomes
  Section DS19
  Section DS19
  South Africa
  South Africa
  Virgin Atlantic Challenger
  Virgin Atlantic Challenger
  Government and the Media (Study)
  Government and the Media (Study)
  Departmental Contracts
  Departmental Contracts
  Land
  Land
  United States Service Men
  United States Service Men
  Members' Correspondence
  Members' Correspondence
  Dismissals on Courts Martial
  Dismissals on Courts Martial
EMPLOYMENT
  Labour Statistics
  Labour Statistics
  National Manpower Council of South Africa
  National Manpower Council of South Africa
  Wages Inspectors
  Wages Inspectors
  Employee Protection
  Employee Protection
  Disabled People
  Disabled People
  Area Manpower Boards
  Area Manpower Boards
  Community Programme
  Community Programme
  Wages Councils
  Wages Councils
  Equal Opportunities
  Equal Opportunities
  Worker Participation
  Worker Participation
  Enterprise Boards
  Enterprise Boards
  Agricultural Inspectorate
  Agricultural Inspectorate
  Irish Nationals
  Irish Nationals
  Employment Programmes
  Employment Programmes
  Retraining
  Retraining
  Youth Training Scheme
  Youth Training Scheme
SOCIAL SERVICES
  Supplementary Benefit
  Supplementary Benefit
  Public Sector Pay
  Public Sector Pay
  AIDS
  AIDS
  Attendance Allowance
  Attendance Allowance
  Invalid Care Allowance
  Invalid Care Allowance
  Family Income Supplement
  Family Income Supplement
  Hospitals (Maintenance)
  Hospitals (Maintenance)
  School Dental Service
  School Dental Service
  Mobility Allowance
  Mobility Allowance
  Ambulance Service
  Ambulance Service
  Artificial Sweeteners
  Artificial Sweeteners
  Invalidity Pension and Allowance
  Invalidity Pension and Allowance
  Invalidity Benefit
  Invalidity Benefit
  Severe Disablement Allowance
  Severe Disablement Allowance
  Retirement Pensions
  Retirement Pensions
  Mobility and Attendance Allowances
  Mobility and Attendance Allowances
  Students
  Students
  Health Education Council
  Health Education Council
  Hospital Waiting Lists
  Hospital Waiting Lists
  Senior Registrars
  Senior Registrars
  School Meals
  School Meals
  Psoriasis
  Psoriasis
  Hospitals (Cigarettes)
  Hospitals (Cigarettes)
  Board and Lodging Allowance (Ipswich)
  Board and Lodging Allowance (Ipswich)
  Pregnant Women (Vitamin Supplementation)
  Pregnant Women (Vitamin Supplementation)
  Women and Children (Domestic Violence)
  Women and Children (Domestic Violence)
  North Western Regional Health Authority
  North Western Regional Health Authority
  Expenditure Statistics
  Expenditure Statistics
  "Health and Personal Social Service Statistics"
  "Health and Personal Social Service Statistics"
  General Practitioners (Work Load)
  General Practitioners (Work Load)
  Old People's Homes
  Old People's Homes
  Hospital Beds
  Hospital Beds
  Mental Handicap (Homes and Hostels)
  Mental Handicap (Homes and Hostels)
  Mental Illness (Homes and Hostels)
  Mental Illness (Homes and Hostels)
  NHS (Expenditure)
  NHS (Expenditure)
  Departmental Offices
  Departmental Offices
  Personal Social Services
  Personal Social Services
  Pensions
  Pensions
  Severe Disablement and Invalid Care Allowance
  Severe Disablement and Invalid Care Allowance
  Member's Correspondence
  Member's Correspondence
  Supplementary Benefit Single Payments
  Supplementary Benefit Single Payments
  Rates Contributions
  Rates Contributions
  Benefits
  Benefits
  Factor VIII
  Factor VIII
  Supplementary Benefit and Pensions
  Supplementary Benefit and Pensions
  Competitive Tendering
  Competitive Tendering
  Board and Lodging
  Board and Lodging
  Nurses and Doctors
  Nurses and Doctors

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

Electronics: GCSE Examinations
Lord Molloy: 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 plans exist to introduce a new examination in electronics in addition to CSE or GCE examinations.
The Earl of Swinton: My Lords, all five GCSE Examining Groups in England and Wales intend to offer GCSE syllabuses in electronics from this September. In addition, some GCE boards plan to introduce syllabuses in electronics at Advanced Supplementary level in September 1987.
Lord Molloy: My Lords, is the noble Earl aware that that is indeed a very welcome reply to a very important Question? Is he further aware that people in education, in industry and in commerce take the view that the special creation that he has mentioned in the field of electronics will be very welcome, because of its close association with computers and advanced technology? 1 am grateful to the noble Earl for his reply.
The Earl of Swinton: My Lords, I am grateful to the noble Lord for his supplementary answer.

Prisons: Building Programme
2.37 p.m.
Lord Graham of Edmonton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
2
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied that the prison building programme is on schedule, and whether the events of April/May 1986 have caused any variations to be made to that programme.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, the new prison building programme is unaffected by the recent prison disturbances, and remains broadly on target. Some slippage in the programme of prisons under construc-tion has, however, resulted from the severe winter and poor early summer weather. High priority will be given to measures to make good the lost time wherever possible. The programme of capital and maintenance work at existing establishments has been affected to some extent by the need to divert resources to repair the damage to the prison estate caused by the disturbances.
Lord Graham of Edmonton: My Lords, I am grateful to the Minister for that reply. Can he confirm that although, when the full programme is completed in 1992, it will add a further 8,000 places in prisons, it will do no more than match the current needs? Can we be assured that the new prison capital expenditure does not starve the work that is required—and not merely for refurbishing? For instance, can the noble Lord confirm that the capital required to bring Lindholme in Yorkshire, which I recently visited, up to date will be found as well.
Lord Glenarthur: My Lords, certainly the option remains to expand Lindholme as necessary. I could provide more details for the noble Lord, but we have to see how it goes. As regards matching places with the prison population, I think the noble Lord is aware that we are broadly on target to do that. Precisely when it will happen depends very much on the statistical question of how the prison population grows. But by the early part of the next decade all should be well.
Lord Mellish: My Lords, we heard on Friday that the Government are spending a great deal of money on Wormwood Scrubs. I asked the question—and I

3
repeat it again—is it not time the Government published a list showing exactly what they are doing to improve prisons in this country, particularly following the Select Committee's report that was published last week by colleagues in the other House? They issued a most damning report, saying what fearful conditions there are with no indication that anything is being done. Is it not about time the Government published a list showing what they are doing and what they are spending?
Lord Glenarthur: My Lords, a very great deal is being done. Sixteen new prisons are being built, some 10,000 or so places have been created from the conversion of existing facilities, and a great deal has been done to improve sanitation. If the noble Lord would like it, I can certainly arrange for him to have full details of that work and for that information to be made available in the Library.
Lord Mellish: My Lords, it would not be a bad idea to let the Select Committee have it too.
Baroness Fisher of Rednal: My Lords, is the noble Lord aware that Winson Green is a very old Victorian prison in Birmingham and that last week there were 1,000 prisoners there, although it should hold only 540? Is Winson Green prison on the new prison lists?
Lord Glenarthur: My Lords, Winson Green is not a new prison; it has been there for many years. We are building a further 16 prisons, two more were opened last year, and we hope to take forward another two. I can certainly let the noble Baroness have details about Winson Green, but I am afraid that her question goes rather wider than the wide Question on the Order Paper.
Baroness Fisher of Rednal: My Lords, I did not say that Winson Green was a new prison. I asked whether it would be on the new prison list, because it is a very old prison, it is very overcrowded, and it is a holding prison for magistrates' courts in the whole of the area.
Lord Glenarthur: My Lords, it is a Victorian prison. Certainly, work is being done on it. I cannot tell the noble Baroness off the top of my head precisely what work is being done or the timetable for its completion, but I shall certainly let her know.
Baroness Macleod of Borve: My Lords, is it envisaged that when the cycle of new prisons has been completed, any of the very old ones will be closed?
Lord Glenarthur: My Lords, certainly that is an option that must remain open. The projections for the prison population are, as my noble friend knows, substantial, and I do not foresee the time when it will be possible to close more than the odd one, but I should like to leave that question open.
Lord Hunt: My Lords, can the Minister assure the House that measures will be taken to ensure that there is sufficient accommodation for those committed to youth custody, given the fact that a number of young offenders are being housed in detention centres because of lack of accommodation?
Lord Glenarthur: My Lords, under the prison building programme there are two new youth custody centres being built. In addition, as the noble Lord will be aware, we set out in the Criminal Justice White Paper the question of perhaps using some detention centres for shorter youth custody centres. That is a live issue. But the detention centre system remains under-used whereas the youth custody system remains over-used.
Lord Mishcon: My Lords, reverting to the report of the Select Committee, which was mentioned by my noble friend Lord Mellish, can the Minister indicate when the entirely sub-human conditions of sanitation in our prisons will cease? Is there a target date fixed, so far as the Home Office is concerned, so that at least by that date our prisons will deserve the term "civilised"?
Lord Glenarthur: My Lords, it is not true to suggest that all prison places are, as the noble Lord puts it, sub-human. Certain of them are far from satisfactory, but the report to which the noble Lord referred acknowledged (towards the end) that there had been some exaggerated comment about the state of some parts of the prison system and indeed about the medical side.
All new establishments provide access to sanitary facilities at night. The schemes currently in progress or planned at existing establishments will provide about 10,000 more places with integral sanitation. At present about 19,400 places, or just under half of the total certified normal accommodation, have access to sanitary facilities. By 1991 this will have risen to 28,300 out of a total of 47,700 places; and by 1999 it is expected that the figure will be about 37,800, or about 70 per cent. of the projected total of 53,400 places.
Lord Wallace of Coslany: My Lords, is the noble Lord not aware that 16 new prisons is quite a lot of prisons? What constitutes the demand for increasing prison accommodation?
Lord Glenarthur: My Lords, while the courts sentence the Government have a duty to provide the necessary places. Of course it is a pity that successive governments, including the government of the party opposite when they were in power, did not see fit to conduct a building campaign in the way that it has been operated since 1979.
Viscount St. Davids: My Lords, will the noble Lord not agree that he has possibly not made as much as he might of the very good work being done from Winson Green Prison? Prisoners from there have been released all over the area to do all sorts of valuable work, including, to my knowledge, work on the inland waterways. This work, and all the other work that is being done, is enormously valuable not only to the area but also to the prisoners themselves. Will the noble Lord agree that the real trouble with this Government is that they are not blowing their own trumpet enough? They have a great many things they could talk about, but they simply do not. It is this that one rather despairs of. One feels that they do not have the feel somehow.
Lord Glenarthur: My Lords, I can assure the noble Viscount that I never lose any opportunity (and nor do my honourable and right honourable friends in another place) to describe precisely what is being done under the prison building programme and the changes that are being made to the existing prison estate. I note what the noble Viscount says about those who leave—I think those are the words he used—Winson Green.
Lord Mishcon: My Lords, will the noble Lord accept agreement from this Bench that the Government lose no opportunity when appropriate to blow their own trumpet? Before the noble Lord makes political points about what the Labour Government did, will he reflect upon the terrific increase in prison occupancy since his own Government took over from the Labour Government? Is not this huge increase responsible for the conditions that I tried to describe earlier?
Lord Glenarthur: No, my Lords, I would not say that at all; I would say that it is a long-term problem which has been building up over many years. If the noble Lord looks at a graph of crime set against time, he will see that there has been a more or less constant trend since the middle of the 1950s.
Lord Graham of Edmonton: My Lords, will the Minister accept from me that I acknowledge and appreciate the increase in the capital programme in both improving existing prisons and building new ones? But would it not be fair for the Government to spend a little more time on examining the non-custodial sentence aspect of the current situation? As well as making conditions in prisons better, ought we not to spend at least as much time in trying to avoid sending people to prison at all? Finally, to what extent does consultation take place with, among others, prison officers when new prisons are being designed?
Lord Glenarthur: Yes, my Lords, I agree. There is, however, already a wide range of non-custodial sentences, available to the courts, including suspended sentences, fines, probation and community service orders. We have to develop these further as far as we can. There are established arrangements for consultation with the trade unions representing governors and the other prison staff at various points during the briefing and design stages of all projects, and the views of staff are taken fully into account by the design teams.

Charities: Tax Relief on Accumulated Income
2.48 p.m.
Baroness Lane-Fox: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, under the new measures announced in the Budget, charities will be able to accumulate income for genuine charitable purposes without loss of tax relief.
Lord Brabazon of Tara: My Lords, under the revised proposals announced in another place by my right honourable friend the Chancellor of the Exchequer on 4th June, charities will be able to accumulate income for genuine charitable purposes without loss of tax relief.
Baroness Lane-Fox: My Lords, I thank my noble friend the Minister for that reassuring reply. Now that the anxieties on Clause 29 of the Finance Bill seem to have been allayed, would it be possible for my noble friend the Minister to estimate the expected added cash that will be available to charities as a result of measures in the Budget?
Lord Brabazon of Tara: My Lords, it is a difficult estimate to give because it depends very much on the uptake of the various schemes which the Government proposed in the Budget. However, a figure of £120 million has been given as an estimate for next year, and it could possibly be more.
Lord Allen of Abbeydale: My Lords, while the Minister's statement today is very satisfactory, is it not disquieting that provisions were included in the Finance Bill as introduced which suggested, to use a kindly word, that those concerned had precious little knowledge of how charities actually work? My understanding is that the Charity Commission was not consulted; and if that is so, is it not carrying Budget secrecy to absurd lengths when the Government cannot even consult their own experts if they happen not to be in the Treasury?
Lord Brabazon of Tara: My Lords, there is always a difficult problem about how much consultation can take place before a Budget, especially when one is trying to bring forward measures to curb abuse. If one consults too widely before announcing measures to curb abuse, obviously the bird is apt to fly from the nest. Fortunately, of course, consultations have taken place since then and now everyone seems to be reasonably happy.
Baroness Faithfull: My Lords, in the light of the Question asked by my noble friend Lady Lane-Fox and the fact that donations to charities are rising, may I ask what extra resources are being allocated to the Charity Commission?
Lord Brabazon of Tara: My Lords, I cannot give an answer to that. The Charity Commission is a different question to that on the Order Paper, which concerns the Inland Revenue and tax relief.
Lord Molloy: My Lords, is the noble Lord aware that the Chancellor has given an encouraging start to those charities who spend a great deal of money on goods which are covered by VAT and, therefore, have a very large VAT bill? Does the noble Lord not agree that for those charities which are heavily involved in making purchases on which they have to pay VAT, although the relief that has been given is a good start, it is worth pursuing and ought to be increased?
Lord Brabazon of Tara: My Lords, that question goes rather wider than the Question on the Order Paper, but I should point out that the Budget gave a further estimated £10 million VAT relief to charities.
Lord Taylor of Blackburn: My Lords, what steps are the Government taking to make certain charities aware of the new measures?
Lord Brabazon of Tara: My Lords, I very much hope that two leaflets are being published today—I have not received confimation whether they have yet gone out—explaining tax relief which is available to individuals and businesses. I hope that charities will collect the leaflets and use them to their advantage.
Lord Bruce of Donington: My Lords, is the noble Lord aware that a more detailed and more explanatory Inland Revenue leaflet giving full particulars of the concession granted by the Chancellor would be very much appreciated? Is the noble Lord further aware that we on this side of the House certainly appreciate this degree of flexibility by the Chancellor of the Exchequer in considering representations made to him following the Budget, and that all we really want is a far greater degree of flexibility in the broad general public interest as well?
Lord Brabazon of Tara: My Lords, as regards the noble Lord's second point, he has his views on that. On his first point regarding the employee payroll scheme, the Inland Revenue has published a prospectus for that; it did so, I believe, on 26th June. That gives the suggestions for the scheme, and there will be a further draft to the detailed rules which will be published shortly.
Baroness Lane-Fox: My Lords, I should like to revert to my noble friend's reply to my first supplementary queston. Is he aware that what is proposed will considerably improve the clout of charities in carrying out the programme of work which, in most instances, is excellent, and that his brochure should be of great help to them in making the most use of the new measures that have been taken?
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend for that supplementary question, and I entirely agree with her.

Drink-Driving: Arrests
2.53 p.m.
The Marquess of Ailesbury: My Lords, I beg leave to ask a Question not unlike that standing in my name on the Order Paper. A vital word has been omitted from the Order Paper—not, I think, by me. My Question should relate not to 16,000 motorists, but to 16,000 innocent motorists.
The Question was as follows:
To ask Her Majesty's Government what action they propose to take drastically to reduce the number of innocent motorists (16,000) who are arrested annually on suspicion of being drunk.
Lord Glenarthur: My Lords, the Government have no proposals to amend the law. The police have powers to enforce the law, and the use made of these powers is a matter for chief officers of police. The roadside screening devices are intended solely to allow a constable to decide whether he has reasonable cause to suspect that the level of alcohol in a driver's body exceeds the legal limit and whether the driver may be arrested. As delays between the roadside and evidential test may lead to reductions in a driver's level of alcohol I am satisfied that the devices operate within acceptable tolerances.
The Marquess of Ailesbury: My Lords, I thank the noble Lord for that reply, but ought not the preliminary test be to eliminate the innocent and thus protect them from being arrested? Is it not failing to an unacceptable extent to do that?
Lord Glenarthur: My Lords, the Government and the police are conscious of the need to minimise the number of people arrested who are subsequently found to be below the limit. It is of course vital, given the number of people killed or injured on our roads as a result of drink-driving, that the police should have the necessary powers to enforce the law. In 1984, 388 people were killed and 19,303 people seriously injured in accidents where a driver was found to be over the legal limit or where he refused a give a sample. Surely the figures speak for themselves.
Lord Taylor of Blackburn: My Lords, is the Minister aware of a scheme that is working quite satisfactorily, I understand, in the United States, where a person who feels that he may be just on the border line, or just over the limit, can put a coin into a machine and the machine will tell him how he stands?
Lord Glenarthur: My Lords, I was not aware of that, but there are, I believe, devices in this country as well which people can use. Nevertheless, the onus is on people not to drink if they are going to drive.
Lord Mellish: My Lords, how can you tell whether a person is drunk unless there is a test?
Lord Glenarthur: I am sorry, my Lords, I did not hear the noble Lord, Lord Mellish.
Lord Mellish: My Lords, how can you tell whether a person is drunk if he does not have a test?
Lord Glenarthur: My Lords, the important thing is for the driver to be able to tell; and he should know that if he has a drink, he should not drive.
Lord Underhill: My Lords, does not the noble Lord appreciate that while we are greatly concerned with the number of motorists who may be wrongly arrested, we are also concerned with the staggering figure given in the other place in July that one-quarter of all the road fatalities are drink-related? The noble Lord may recall that during consideration of the Transport Bill 1981 we had considerable discussion on the relative balance between evidential breath testing accuracy and the proper need for enforcement. Is not the problem that of education, publicity and enforcement? Have steps been taken recently to get together all the organisations concerned to review the position?
Lord Glenarthur: My Lords, I think the noble Lord will agree that his question goes quite wide. Certainly it is important that there should be education. All drivers should surely be aware that drink and driving do not mix. This question relates particularly to the difficulties of those innocent motorists who are arrested. What I have described gives light to the fact, surely, that the number of people who do drink and drive is far too great.
Lord Mishcon: My Lords, does not the Minister agree that most of us in your Lordships' House would prefer that 100 innocent motorists are arrested rather than that one guilty motorist should go free if he was driving while the worse for drink?
Lord Glenarthur: My Lords, it is important that the police have accurate devices to measure those motorists whom they believe to have alcohol in their systems when they are stopped. That is the important point. Of course, the devices that are used are those which are being developed and I am sure that they will be worked upon in the future.
The Earl of Halsbury: My Lords, since I was myself arrested in Birdcage Walk and discharged honourably without a stain on my character on arrival at Rochester Row police station, doubtless the noble Lord will sympathise with my sense of indignation. Can he tell the House what percentage of those convicted is represented by the 16,000 innocents who were arrested without proper cause?
Lord Glenarthur: My Lords, I cannot do a quick sum off the top of my head, but I shall certainly let the noble Earl know.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lady Trumpington will, with the leave of the House, repeat a Statement that is being made in another place on Supplementary Benefit: Single Payment.
Crown Agents (Amendment) Bill
Read a third time, and passed.

Social Security Bill
3 p.m.
Lord Denham: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Social Security Bill, has consented to place her prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Clause 2 [Appropriate schemes]:
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. 1:
Page 4, line 12, at end insert ("under section 41 of the Solicitors (Scotland) Act 1980").
The noble Baroness said: My Lords, I beg to move Amendment No. 1, and at the same time I should like to speak to Amendments Nos. 3 and 14. Perhaps I should tell your Lordships that there is a printing mistake in Amendment No. 14. Where it says,
"of income support of family credit"
it should read,
"of income support or family credit".
These amendments are required to adapt the Bill to existing Scottish legislation. I beg to move.
On Question, amendment agreed to.
Lord Banks Lord Banks moved Amendment No. 2:
After Clause 7 insert the following new clause:
(".—(l)The Social Security Pensions Act 1975 shall be amended as follows.
(2) In Section 28 the following subsection shall be inserted after subsection (6)—

"(6A) The Secretary of State may at any time lay before each House—

(a)a report by the Government Actuary on the additional contracted-out percentages appropriate to schemes the average age of whose members exceeds by a specified amount that assumed for the purposes of determining the contracted-out percentages appropriate in all other cases, and

(b)the draft of an order providing for such additional contracted-out percentages to apply in any case where this is requested and the request is supported by such evidence as may be prescribed,

and if the draft is approved by resolution of each House the Secretary of State shall make the order in the form of the draft").

The noble Lord said: My Lords, I beg to move Amendment No. 2. As the House is aware, the Bill provides that an employee may choose to switch from being contracted into the state earnings-related pension scheme or from being a member of a contracted-out occupational scheme to a personal pension scheme. That personal pension scheme would itself be contracted out. The employer and the employee would pay contracted-in rate national insurance contributions and the Department of Health and Social Security would return to the provider of the personal pension scheme an amount equivalent to the rebate given in the case of contracted-out occupational schemes. Thus the minimum contribution which this rebate constitutes is flat rate and takes no account of age.
The personal pension schemes are money purchase schemes in that the ultimate benefit is not defined but the contribution to be made by the employer and the employee is defined. The benefit is the product, whatever it may be, of such contribution. The older an employed person, the more expensive it is to provide a pension. A different annual contribution is necessary at each stage of entering the scheme to provide the same amount of pension.
Furthermore, pensions relating to increments of earnings due to inflation, wage negotiations or promotion become progressively more expensive to

11
fund for a given amount of pension as the employee gets older. But, as we saw, the minimum contribution paid by the Departmemt of Health and Social Security in order to contract out is flat rate. That flat rate contribution paid annually for a young person will provide that person at retirement with more pension than it will a person who enters the personal pension scheme 20 years later shall we say, and the cost to the young person will increase in respect of increments of earnings due to inflation, wage negotiation or promotion.
Thus, it will be attractive to the young person to switch to a personal pension scheme but it will become less attractive as that person gets older. Those involved with occupational pension schemes have been greatly concerned that the consequence of a flat-rate minimum contribution may well be to induce an unduly high proportion of young people to switch from defined benefit occupational schemes to personal pension schemes. If they do so, it is likely that at a later date they may want to move back into the state earnings-related pension scheme when they find that the minimum contributions will not keep up their pensions in line with increased earnings in the personal pension scheme.
This of course would frustrate the Government's aim. Secondly, where younger employees have been induced to leave defined benefit schemes, those schemes will become progressively more expensive to the employers as the average age increases. Employers may well wish to seek to cut their rise in cost by contracting in to SERPS, again frustrating the Government's intention: or there may be a substitution of money purchase occupational schemes for defined benefit schemes, which I do not consider to be a desirable outcome.
In a contracted-out defined benefit scheme, the varying value of the flat-rate rebate has its effect on the cost of the employer averaged between all his employees and not on individual benefits. If many younger members leave the scheme, they deprive the scheme of their favourable rebates and so make the rebate inadequate for the remaining group of members. Those fears have been expressed by bodies such as the Confederation of British Industry, the National Association of Pension Funds and the Nationalised Industries Pensions Group.
In Committee, I moved an amendment which sought to deal with the problem by making the minimum contributions age related. That amendment was defeated and of course I accept that the minimum contributions will not in fact be age related. But the noble Baroness, Lady Trumpington, acknowledged that flat-rate minimum contributions will make personal pensions attractive for the younger person. She argued that nevertheless significant numbers of young people would not be encouraged to switch from an occupational scheme to a personal pension scheme. She said that that would be because employers would not have any obligation to contribute any more than the minimum to personal pension schemes and those switching would have to be prepared to forgo the balance of the employer's contribution. In addition, they would have no statutory right of return to the occupational scheme once they had opted out.
I agree that those are restraining factors, but how powerful they would be we simply do not know. We know that there is inducement to the younger person to switch and we know that there are certain restraining factors, but we do not know whether large numbers in fact would switch.
This amendment is designed to meet that situation. The idea for it comes from the Nationalised Industries Pensions Group. First, the Secretary of State could lay before each House at any time a report from the Government Actuary on the additional contracted-out percentages appropriate where the average age of schemes was in excess of the normal. He could also lay before each House a draft of an order for those additional contracted-out percentages to be applied in any cases where that was requested and supported by the required evidence. In other words, a higher rebate would be paid where the average age of a scheme had risen significantly. That would enable those schemes that were receiving the additional rebate to continue on a contracted-out basis.
Those are long-term powers which would only be used if the confidence of the noble Baroness in the Government should prove misplaced and the fears expressed by so much expert opinion should prove justified. I very much hope that the noble Baroness will accept this amendment, and I beg to move.
Baroness Jeger: My Lords, I shall say only that my noble friends and I completely support this amendment which has been so ably moved by the noble Lord, Lord Banks.
Baroness Trumpington: My Lords, we had a very full debate in Committee about whether age relation should be introduced into the structure of national insurance rebates and DHSS contributions for people who contract out of SERPS. At the end of that debate, your Lordships' views were sounded and the voting showed a clear majority in favour of the flat-rate system which the Government, after very careful consideration, have decided to adopt.
I do not therefore want to take up a great deal of your Lordships' time by going over all the pros and cons of this matter again. There are of course things to be said in favour of age-relation. The noble Lord has explained some of them today. But there are also grave difficulties with that approach. The administrative complexities it opens up are horrific to contemplate: and there are two things to be said about the dire consequences which the proponents of age-relation claim will follow from a flat-rate system.
We are very sceptical indeed whether these dire consequences will materialise. Actuarial predictions, like economic predictions, have a way of being confounded by the behaviour of human beings, who do not all carry pocket calculators and actuarial tables around with them. People are influenced by many factors, not least inertia and caution, in making decisions which profoundly affect their financial affairs. We simply do not believe that a flat-rate system of rebates and contributions is going to tempt significant numbers of young people, who would otherwise not be tempted, to opt out of their established contracted-out occupational schemes, particularly now that the 2 per cent. incentive addition

13
will not be available to them. Those who claim that this is a real threat are discounting not only human nature, but also the employer contributions which people will normally relinquish in making this decision and the fact that they may have no right to return to the employer's scheme when they are older.
The noble Lord suggests that younger people who take contracted-out personal pensions will contract back into SERPS when they are older, effectively opting to the financial detriment of the state. Again, although we understand the thinking behind those arguments, we are not convinced that it will be a large enough problem in practice to warrant upsetting the simple structure of rebates and payments which we propose in the Bill. It is a problem that we can look at if and when it actually arises. The contracting-out terms are not set in concrete. The government of the day can always adjust them more or less radically in the light of the circumstances of the day.
Furthermore, let us suppose that these dire consequences materialise, as the more pessimistic forecasters tell us they will. As I said in Committee, the government of the day will always be free to alter the future terms of contracting-out to set things on an even keel again. The flat-rate structure of rebates and payments is a move to make pensions more simple and comprehensible to the people whose lives they affect and for that reason alone deserves a proper trial and the support and encouragement of your Lordships. It is very often the simple things that work in the face of all the complicated objections that are piled upon them. I hope that the noble Lord will withdraw his amendment.
Lord Banks: My Lords, I should like to make it clear that I was not in any way challenging the fact that we were to have a flat-rate system. As the noble Baroness said, we discussed that at an earlier stage of the Bill, and I am not seeking to re-open the question. I am sure that it would not be proper for me to do so. But I am saying that some people who have great experience of pension schemes and are operating them all the time—for instance, the CBI, the National Association of Pension Funds and the nationalised industries pension group—believe that there could be a move of younger people out of occupational pension schemes, which could have a destabilising effect.
The amendment would not come into operation at all if the noble Baroness is correct in saying that there would not be such an exodus. She may be correct. We cannot say; we do not know. I cannot see why the Government find it so difficult to accept the amendment, since the provision would come into operation only if they are wrong, and they are confident that they are not. But the point has been made, and I hope that a careful note will be taken of it. There are great anxieties on the point, but, nevertheless, I seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 17 [General power to modify statutory provisions]:
3.15 p.m.
Baroness Trumpington Baroness Trumpington moved Amendment No. 3:
Page 21. line 43 at end insert—
(" (aa) the Sheriffs' Pensions (Scotland) Act 1961;").
The noble Baroness said: My Lords, I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 18 [Additional pensions]:
Lord Pitt of Hampstead Lord Pitt of Hampstead moved Amendment No. 4:
Page 23, line 24, at end insert (" or
(d) is a parent, working part-time who is in receipt of child benefit,").
The noble Lord said: My Lords, the reasons for asking for women who are working part-time and who are in receipt of child benefit to be given the option of having those years excluded are as follows. In the Bill we have excluded those who would be working full-time but who are not working because they are taking care of their babies. However, it so happens that many more women are working part-time while looking after dependent children. It seems to me that it is unfair that they should not be given the exclusion that women who are not working because they are looking after their children are given.
Having responsibilities protection, as the Bill envisages it, though vital, will not have quite the significant impact on mothers as was assumed. What has been found is that the median time before returning to work for women with dependent children has fallen from 7.7 years to 3.4 years.
Married women account for about three-quarters of all part-time employment. Women who have dependent children are much more likely to be working part-time than full-time, and are the majority of such workers. A recent Department of Employment survey of women's employment found that over twice as many women returned to part-time than to full-time work after childbirth; 52 per cent. compared with 21 per cent. The same survey also concluded that the:
"increase in women's participation in recent years is due mainly to increased participation among women in their 30s and 40s and is largely in part-time work rather than full-time".
Although mothers are more economically active now. it is in part-time rather than in full-time work. A 1980 survey on women and employment showed, too, a substantial downward occupational mobility over women's family formation period, mainly on return to work after first birth. That has obvious implications for their earning capacity in their years of part-time work.
In general terms also we know that women earn less than men when we compare full-time earnings, and significantly less when in part-time work. The average gross weekly earnings for full-time employees on the 1985 figures given by the Department of Employment are £192.40 for men and £138.80 for women, although over a third of women earned less than £100 weekly. The important point for my purpose is that the average gross weekly wage for women in part-time work was £37.80 for manual and £41 for non-manual work. The figures also showed that 46 per cent. of part-time women workers were in semi-skilled personnel service and unskilled manual work, as compared with only 22 per cent. of full-time women workers.
Therefore, part-time women workers are also less likely than part-time men workers or full-time workers to be able to improve their second pension by moving

15
out of SERPS and into a more favourably based occupational scheme. They are very much less likely to be able to do that, so for them the pension has to be SERPS. They do not have much choice. The majority of women spend some of their potential working life out of the job market while engaged in full-time child care. That is taken care of in the Bill. A more significant number of years are spent in part-time work by women with dependent children. They spend many more years doing that than out of the job market altogether. We want that time to be ignored in the same way that the other time is being ignored. That is a far better way to deal with the matter. I hope that the Government will see the wisdom of doing that and will accept the amendment. I beg to move.
Baroness Trumpington: My Lords, this amendment seeks to extend to parents who are working part time, and are entitled to child benefit, the special protection of SERPS rights which we have undertaken to provide for parents who stay at home to look after their children under age 16, and also for disabled people and those who stay at home to look after them.
We do not deny that the abolition of the 20 best years rule will adversely affect some people who retire next century. Our priority all along has been to protect the position of those who will be hardest hit. That is why we have concentrated on protecting those who are unable to work for long periods because they stay at home to bring up children or to care for a disabled person, or who do some work but have low earnings which are below the lower earnings limit for national insurance contributions.
We are very well aware that in some circumstances a person who stays at home to look after a child could be better off in pension terms than someone who qualifies for child benefit but returns to work on a part-time basis, and earns above the lower earnings limit. But I have to say that some of the examples which have been quoted are based on untypical earnings levels and produce somewhat exaggerated results. In fact, something like half of female part-time workers earn below the lower earnings limit, so provided they qualify for child benefit for a child under 16 they would qualify automatically for protection of their SERPS rights. It is right that they should be afforded that protection. So far as women earning higher amounts (most of whom will eventually return to full-time work) are concerned, it does not seem unreasonable that they could be expected to make greater personal provision for their retirement than women with no earnings.
We are aiming for a simple and workable scheme. Past lessons have shown that the quest for completely even-handed treatment has resulted—as I am sure your Lordships would agree—in an impossibly complicated social security system. A system which in effect compared the earnings in each child caring year with the average earnings in other years to see whether the person would be better off or worse off would be extremely complicated to administer and to explain to pensioners and prospective pensioners. It is most important that we keep the arrangements as simple as possible so that people can understand what they are entitled to.
16
The noble Lord, Lord Pitt, said that women part-time workers' average earnings are £37·80. That is below the national insurance contribution lower earnings limit, and those women would have their SERPS rights protected.
I want to stress that the powers in Clause 18 of the Bill are already wide enough to allow part-time workers to be protected if a future administration were to decide that there was an adequate case for doing so. There is plenty of time to sort this out because the measures for protection of SERPS rights will not need to be applied until the end of the century. I should also add that if it were ever decided to extend the protection, DHSS records are held in such a way that qualifying cases would be able to be identified. We have taken steps to protect those who will be hardest hit by the abolition of the 20 best years rule, but for the reasons I have explained we do not see a case for going further than that.
I hope that what I have said will have persuaded the noble Lord, Lord Pitt, to withdraw his amendment.
Baroness Lockwood: My Lords, I support the amendment in the name of my noble friend. It seems that the Minister does not understand some of the implications for women who undertake part-time work. There are all kinds of reasons why a woman may want to continue with employment even though her children are small. One is that she may want to retain an interest in employment so that she does not lose touch with her job or profession. She may want to move into full-time employment later.
The new provision of SERPS puts such women at a disadvantage. The Minister has said that women who do not return to part-time work and who remain at home with their children could be in a better financial position with regard to their pensions than women who return to part-time work. That provision is a disincentive to women who wish to return to work if they have children. That is discrimination against women and puts them into a difficult position. I have said in the House on a number of occasions that women do not only suffer an immediate financial loss when they work part time; they often lose promotion prospects and pension entitlement.
The Bill underlines that loss of pension entitlement. If my noble friend's amendment were accepted, it would encourage women to continue with their employment or career part time, knowing that at least their pension entitlement would be based not on the average of their earnings when their children were small but that of the years when they were earning full time.
Baroness Trumpington: My Lord, with the leave of the House, I think I mentioned most of the arguments that the noble Baroness has quoted. However, I am sure that your Lordships would agree that it would be wrong to treat people in part-time work more favourably than those with the same level of average earnings derived from a lifetime of full-time work. That would be the effect if the amendment were carried. I think that I dealt with the other arguments during my original reply.
Lord Pitt of Hampstead: My Lords, the Minister has failed to recognise that a woman is working part time and yet spending the rest of her time looking after a child. I cannot understand why the Government do not appreciate what they are doing. The woman is now left with a choice of staying at home full time and not entering the labour market or taking jobs with such short hours that she does not go beyond the limit which would allow for her pension to be taken care of. I cannot believe that any government seriously want that. The Government seem to want that. I cannot believe that your Lordships want that. I shall divide the House.
3.28 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 78; Not-Contents, 128.

DIVISION NO. 1

CONTENTS

Addington, L.

Kennet, L.

Airedale, L.

Leatherland, L.

Amherst, E.

Listowel, E.

Ardwick, L.

Llewelyn-Davies of Hastoe, B.

Attlee, E.

Lloyd of Kilgerran, L

Banks, L.

Lockwood, B. [Teller]

Blease, L.

Lovell-Davis, L.

Blyton, L.

McNair, L.

Briginshaw, L.

Mishcon, L.

Brockway, L.

Molloy, L.

Bruce of Donington, L.

Morton of Shuna, L.

Burton of Coventry, B.

Mulley, L.

Caradon, L.

Nicol, B.

Carmichael of Kelvingrove, L.

Oram, L.

David, B.

Paget of Northampton, L.

Davies, L.

Phillips, B.

Davies of Penrhys, L.

Pitt of Hampstead, L. [Teller]

Dean of Beswick, L.

Ponsonby of Shulbrede, L.

Denington, B.

Rochester, L.

Diamond, L.

Sainsbury, L.

Donaldson of Kingsbridge, L.

Seear, B.

Elwyn-Jones, L.

Shepherd, L.

Ennals, L.

Silkin of Dulwich, L.

Ewart-Biggs, B.

Stallard, L.

Ezra, L.

Stedman, B.

Fisher of Rednal, B.

Stewart of Fulham, L.

Gallacher, L.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Strabolgi, L.

Grimond, L.

Strauss, L.

Hampton, L.

Taylor of Blackburn, L.

Hatch of Lusby, L.

Taylor of Gryfe, L.

Hayter, L.

Taylor of Mansfield, L.

Hooson, L.

Tordoff, L.

Hughes, L.

Underhill, L.

Hunt, L.

Wallace of Coslany, L.

Jeger, B.

Wedderburn of Charlton, L.

Jenkins of Putney, L.

Wells-Pestell, L.

Kaldor, L.

Wigoder, L.

Kearton, L.

Williams of Elvel, L.

NOT-CONTENTS

Abercorn, D.

Boardman, L.

Ailesbury, M.

Boyd-Carpenter, L.

Alexander of Tunis, E.

Brabazon of Tara, L.

Auckland, L.

Brocket, L.

Bauer, L.

Brougham and Vaux, L.

Belhaven and Stenton, L.

Bruce-Gardyne, L.

Beloff, L.

Butterworth, L.

Belstead, L.

Byron, L.

Birdwood, L.

Caithness, E.

Blake, L.

Cameron of Lochbroom, L.

Blyth, L.

Campbell of Alloway, L.

18

Carnegy of Lour, B.

Macleod of Borve, B.

Carnock, L.

Margadale, L.

Chelmer, L.

Maude of Stratford-upon-

Colville of Culross, V.

Avon, L.

Constantine of Stanmore, L.

Merrivale, L.

Cowley, E.

Mersey, V.

Cullen of Ashbourne, L.

Milverton, L.

Davidson, V.

Monk Bretton, L.

De Freyne, L.

Montgomery of Alamein, V.

Denham, L. [Teller]

Morris, L.

Denning, L.

Mowbray and Stourton, L.

Digby, L.

Munster, E.

Drumalbyn, L.

Murton of Lindisfarne, L.

Dudley, B.

Newall, L.

Ebbisham, L.

Nugent of Guildford, L.

Effingham, E.

Pender, L.

Ellenborough, L.

Penrhyn, L.

Elles, B.

Peyton of Yeovil, L.

Elliot of Harwood, B.

Plummer of St.

Elliott of Morpeth, L.

Marylebone, L.

Elton, L.

Portland, D.

Fraser of Kilmorack, L.

Reay, L.

Gainford, L.

Reigate, L.

Gardner of Parkes, B.

Reilly, L.

Glanusk, L.

Richardson, L.

Glenarthur, L.

Romney, E.

Gray of Contin, L.

St. Davids, V.

Gridley, L.

Saint Oswald, L.

Grimthorpe, L.

Salisbury, M.

Hailsham of Saint

Saltoun of Abernethy, Ly.

Marylebone, L.

Sandford, L.

Halsbury, E.

Selkirk, E.

Hanson, L.

Sempill, Ly.

Harmar-Nicholls, L.

Shannon, E.

Henderson of Brompton, L.

Sharpies, B.

Hesketh, L.

Skelmersdale, L.

Hives, L.

Somers, L.

Home of the Hirsel, L.

Stodart of Leaston, L.

Hood, V.

Strathspey, L.

Hooper, B.

Sudeley, L.

Hylton-Foster, B.

Swinton, E. [Teller]

Jessel, L.

Terrington, L.

Kimball, L.

Teviot, L.

Kimberley, E.

Tranmire, L.

Kinloss, Ly.

Trumpington, B.

Kinnaird, L.

Tweedsmuir, L.

Kitchener, E.

Vaux of Harrowden, L.

Lane-Fox, B.

Vickers, B.

Lauderdale, E.

Vivian, L.

Layton, L.

Waldegrave, E.

Lindsey and Abingdon, E.

Whitelaw, V.

Long, V.

Wynford, L.

Lucas of Chilworth, L.

Young, B.

Lyell, L.

Zouche of Haryngworth, L.

McFadzean, L.

Resolved in the negative, and amendment disagreed to accordingly.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I understand that the Statement has now been cleared, so I shall not call Amendment No. 5 for the time being.

Supplementary Benefit: Single Payments
3.37 p.m.
Baroness Trumpington: My Lords, with the leave of the House, I should like to repeat a Statement on single payments being made in another place. The Statement is as follows:
"Mr Speaker, with permission, I should like to make a Statement about single payments of supplementary benefit.

19
"I first simply set some facts before the House. Between 1974 and 1979, under the previous Government, what were then called exceptional needs payments rose from 0.8 million to 1.1 million, and their cost from £11.5 million to £38 million. These numbers were already a matter of concern, and one of the objectives of the review carried out in 1976–78 was better control of such payments. In 1980, the present Government made changes which it was hoped would overcome the problem, and which indeed took account of the recommendations of that earlier review. Initially, they appeared to have had some success. But by 1983 the number of payments was virtually double the 1979 figure at nearly 2 million, and expenditure had almost quadrupled, to over £140 million. By 1985, both figures had more than doubled again, to more than 4 million payments at a cost of over £300 million. And the growth shows no sign of diminishing.
"This trend cannot be explained by the increase in the number of claimants: the rate of payments per claimant has itself more than doubled since 1979. Nor can it be explained by changes in weekly benefit levels: the weekly scale rates rose in real terms by some 6 per cent. between November 1978 and November 1985. There have also been other significant improvements: for example, in some of the payments for children; in the amount and scope of regular additional heating payments, especially for pensioners; and in the rules concerning benefit for the long-term sick and disabled.
"Against this background, our firm conclusion in the recent social security review was that the present system of single payments could be neither justified nor sustained. It is incompatible with sensible planning and efficient administration, as is shown by the fact that, althouth only some 5 per cent. of supplementary benefit expenditure, it accounts for nearly 50 per cent. of all supplementary benefit decisions and over 50 per cent. of appeal hearings.
"More fundamentally, it is clearly not achieving what Parliament intended. Despite elaborate regulations and adjudication, wide discrepancies occur from one area to another. It is increasingly perceived as unfair by others, on incomes little or no higher than supplementary benefit, to whom no comparable help is available. There is unacceptable scope for exploitation and abuse, yet, at the same time, insufficient flexibility to meet the real needs of genuine claimants.
"As the House knows, it is for these reasons that the Government have brought forward in the current Social Security Bill proposals for an improved structure of regular weekly income support, coupled with a clearly distinct social fund designed to give appropriate help with genuine special occasional needs in a more practical, manageable and flexible way. We believe those proposals are essential to the proper working of the benefit system as a whole.
"Meanwhile, however, the growing unworkability of the present single payments system could not simply be ignored. In February, therefore, we put for
20
consultation to the Social Security Advisory Committee draft regulations making a number of changes within the existing structure as an interim measure. The principal elements were to restrict furniture and bedding payments to more clearly defined categories of need, paying particular attention to the needs of pensioners, the sick and disabled, and those leaving hospital after a long stay; to introduce time rules for repeat claims for items of furniture; to set standard sums for specific items such as cookers, and standard amounts to cover a range of miscellaneous household items which can at present be individually listed; and to introduce a standard pattern of help with maternity needs.
"We have now given very careful consideration to the committee's report, which is laid before Parliament today together with my right honourable friend's response. The report clearly recognises the difficulties to which the Government are seeking to respond. It also recongises the effort which has been made to take account of the needs of those thought to be most vulnerable, and welcomes in principle the introduction of standard payments and lump sums. While making it plain that the committee do not endorse the proposals as a whole, it nevertheless suggests a number of specific modifications they would wish to see if the Government should decide to proceed.
"For the reasons I have given, the Government continue to believe that action is needed. Moreover, those considerations have been greatly strengthened by the continued escalation of single payments in recent months. The most recent figures, for the four weeks to 3rd June, were equivalent to an annual rate of 5½ million payments and at least £400 million. Many local authorities and other bodies are mounting campaigns to stimulate further claims; for example, by circulating leaflets containing extensive 'tick lists' of items under some such slogans as 'Closing down sale'. Apart from anything else, the consequent growing burden on DHSS offices, despite the additional staff we are making available, is seriously detrimental to the interests of claimants themselves.
"The Government therefore propose to proceed with new regulations, but with a number of important modifications to meet detailed suggestions which the committee have made. These include further steps to protect the position of refugees, women who have been subject to domestic violence and young people leaving local authority care; a lengthening of the qualifying period for maternity payments; the extension of lump sum payments for miscellaneous items to childless claimants setting up home; and, perhaps most important, a doubling of that lump sum from £25 to £50 for each dependant. Regulations incorporating those changes have been laid today with a view to bringing them into effect on 1lth August".
That, my Lords, concludes the Statement.
Baroness Jeger: My Lords, my first comment must be that the fact that we have this Statement today indicates the tremendous disarray in which the Government find themselves in regard to social security. We are now in the middle of the Third

21
Reading of the Social Security Bill, which, in the Government's view, is supposed to put everything right, and suddenly we have this very extensive and important Statement thrust upon us. I must protest on behalf of my noble friends and myself.
I wonder whether it has occurred to the Government that the reason for the increase in demands since 1979 and the fact that the demands have doubled might have something to do with Tory Government policies, with increasing poverty and with increasing unemployment. It is not for the Government to complain that costs have gone up: it is for those who suffer from the Government's policies to complain that their needs and their impoverishment have increased. I thought that the Minister seemed to be, in repeating the Statement, reproving the local authorities and claimants' committees who seek to bring their rights to the attention of claimants. The fact that more people are becoming aware of their rights and are asking for them is not a matter of regret on this side of the House, and I am sorry if it is a matter of regret on the other side.
I must ask one or two questions, although, in view of all the business we have to do today, I promise I will not make a Second Reading speech. However, there are some very puzzling points here. I must first ask the noble Baroness if this list of single payments is likely to be transferred into the social fund when that comes into effect. I read in the Green Paper, volume 1, paragraph 13.6:
"Payments from this fund will not be governed by detailed regulations".
I hope I am not anticipating what is going to happen to the social fund, about which there is some confusion, but if the Minister could give me guidance I would appreciate it.
I must next ask the Minister whether there will be any appeal against the allocation of these amounts. Will there be any special help during severe weather? We know the muddle that exists in the Government's policies on helping people to keep warm in severe weather. Also, I appreciate there have been some concessions, but I have to ask the Minister whether people from board and lodging accommodation will get the chance of a house. Will they be given the necessary assistance?
I also wonder, when the increase in these amounts is discussed, whether the Government are putting on the credit side the fact that, by making single payments to many families who have been homeless or people coming out of institutions, there has been a net saving in the cost of their institutional care or board and lodging care. I therefore do not regard those figures as being entirely a debit in the Government's finances.
Additionally, I cannot think why 1lth August has been fixed. There is no Royal wedding that I know about, and there is no special magic that I can see about 1lth August. I am sure that the Minister will tell me why that date was chosen. However, I imagine that there will be a great rush between now and 1lth August by all the claimants who will find out that they have a right to ask for these benefits, and I only hope that the Government will take on extra staff to deal with them! Seriously, my Lords, this is no way to undertake the revision of such a serious matter.
22
I thought that the Statement was only just about fair to the Social Security Advisory Committee and o course I received its long report only a few minute; ago. However, I alway first look at the end. At the end I read:
"The Government's response has been to propose much tighter conditions of eligibility and a greatly limited range of items. This response, because it seeks to attack the symptons (increased public expenditure) without fully analysing the causes, must necessarily run the risk of causing widespread hardship amongst claimants who are already living at what is generally recognised as the poverty level'
We all say "Hear, hear" to that—at least most of u . would, I am sure.
Lord Banks: My Lords, we on these Benches an grateful to the noble Baroness for repeating the Statement made in another place. I should like to make it clear at the beginning of my comments that we on these Benches would certainly be against abuse. I abuse is proved, we should certainly want to see i tackled. However, it is very difficult to tell how much the increase is due to the increase in poverty, as the noble Baroness, Lady Jeger, suggested—due, for example, to unemployment—and how much is due, as I noticed in a quick glance in the past few minutes that the Social Security Advisory Committee suggests, to a reservoir of unmet needs which is only now being fully appreciated.
It seems to me that those are weighty matters which ought to be investigated very thoroughly. The views of the Social Security Advisory Committee have beer published only today along with the regulations. We have not had a chance to look at those to see precisely what they are saying, or to consider them in any detail However, it is here that the advisory committee has criticised the impact of the changes on some of the poorest people. On the other hand, the Government are intent on going ahead with their regulations with certain modifications and one must ask why there is the rush. Why should the public and Members of Parliament not have the opportunity to consider the views of the Social Security Advisory Committee at greater length? Why is there not a proper time for reflection?
There is then the important point raised by the noble Baroness, Lady Jeger, as to whether these regulations which are now being issued will form part of the regulations controlling the social fund. That would seem to be contrary to what we have understood was going to be the position. The rush with which this matter is being pushed through without adequate time for general consideration of the report of the Social Security Advisory Committee is something about which we too would wish to protest.
Baroness Trumpington: My Lords, let me start with the noble Baroness, Lady Jeger, who said that we were rushing things through—as indeed did the noble Lord, Lord Banks. We announced our proposals on 24th February 1986, but we did not receive the report of the Social Security Advisory Committee until 22nd May. Since then we have been giving careful consideration to the committee's report and to the representations which it received. We have made a number of significant changes to our original proposals. However, we could not bring them before the House until we had

23
concluded our considerations, and these considerations have taken time to prepare.
The noble Baroness, Lady Jeger, asked about exceptionally severe weather payments. Those proposals do not alter Regulation 26, which deals with payments for exceptionally severe weather. In the light of last winter's experience, the Government are looking at this issue most carefully and plan to bring forward before next winter proposals which would also deal with those who pay for fuel by slot meter.
With regard to the right of appeal against amounts, all decisions as to whether or not a claimant is entitled to a single payment will be made by adjudication officers. All decisions will still carry the right of appeal, but disputes about amounts payable should arise much less often. The noble Baroness asked about widespread hardship and the view of the Social Security Advisory Committee. But let us be clear about the sums of money that will still be available. A lone parent with two children setting up home for the first time following a breakdown of marriage could receive furniture and bedding payments of up to £800. An unemployed couple could get over £250 to replace a cooker and a bed after a year on benefit. Those are not insignificant sums when compared with the position of other low income groups.
The noble Baroness also asked me whether the list is to be transferred to the social fund. I must tell her that no decisions have yet been taken on what items will be in the social fund. Appeal rights would continue. With regard to board and lodging claimants receiving assistance, yes, they will receive assistance if they qualify or, for instance, have a good reason as defined in regulations, or are leaving special care hostels.
On the question of staff to cope with further claims before 11th August, it is the department's aim to continue to match staffing of local offices to the workload through a complementing system which has been agreed with the trade unions. This system is underpinned by regular complementing reviews which are intended to adjust the basic complement. Previous complement reviews have had to be abandoned due to industrial disputes which so affected working patterns that the results would not have reflected how work is done in local offices. Because of the exceptional pressures which have built up in local offices, 5,000 more staff have been made available than would have been justified by the strict application of the complementing system for the current year. This addition was made pending the results of the complement review now taking place.
The noble Baroness, Lady Jeger, asked: why 1lth August? The noble Baroness will know that there is normally a three-week period between laying regulations and their coming into effect. Three weeks from today is 11th August. The noble Lord, Lord Banks, asked why the Government were laying these important regulations so late. We would answer that we announced our proposals on 24th February, as I have already said. I think that I have already answered that question. I welcome the remarks made by the noble Lord, Lord Banks, against abuse, which were not quite followed through by the noble Baroness, Lady Jeger.
Lord Ennals: My Lords, may I assure the noble Baroness that this side of the House has always been—when it was on that side of the House also—as opposed to abuse as that side of the House has ever been?
I want to ask one question. Why was not the Social Security Advisory Committee's report published so that we could all see it, consider it, and have it in our hands at the time when this important Statement was made? The report has some very critical comments in it. Surely those should have been available to your Lordships as well as to those in another place and to the public at large?
Baroness Trumpington: My Lords, I thought I had answered that we received it on a certain date—I am looking back at my notes—and that we have been having complicated dicussions on our views. But it has been published, as is the normal practice, today.
Lord Ennals: My Lords, today!
Baroness Trumpington: My Lords, yes, indeed; today. Perhaps I may clarify this point. The noble Baroness, Lady Jeger, said earlier that they were telling people what they were entitled to. I have a splendid letter from a lady in the North, who wrote to the social security office saying that she had been urged to claim for all manner of things. She did not want to claim for more than three very modest items. The form filled in was clearly not filled in by her, but by somebody else. She wished to disclaim that form and claim merely for the three items that she needed.
Baroness Jeger: My Lords, before the noble Baroness sits down, can she tell us how many such letters she has received? Was it only one letter and, if so, is it not rather an abuse of the argument to refer to one letter? I could refer to many other letters.
Lord Wigoder: My Lords, the Statement refers to the wide discrepancies that occur between one area and another. Am I right in thinking that the Government regard this as being totally undesirable? Am I also right in calculating that the great majority of those discrepancies arise as between the decisions of adjudication officers and not as between decisions of various independent review tribunals?
Baroness Trumpington: My Lords, for the sake of speed I shall write to the noble Lord on that matter.
Baroness Macleod of Borve: My Lords, can my noble friend the Minister say whether the amounts we are talking about are to be grants or loans?
Baroness Trumpington: My Lords, as the single payments scheme is in operation until the social fund takes over, the single payments scheme will proceed as it is now.
4.2 p.m.

Social Security Bill
Consideration of amendments on Third Reading resumed.
Clause 20 [Income-related benefits]:
Lord Banks Lord Banks had given notice of his intention to move Amendment No. 5:
Page 26, line 9, at end insert—
(" () Differences of age within the range of 18 to 60 shall not be taken into account for the purpose of determining entitlement to an income related benefit or the amount of any such benefit where a person satisfies the conditions of subsection 10(a) and (b) below, and

(a) has entered his accommodation because—

(i) he has been in the care of a local authority under a relevant enactment; or

(ii) he is chronically sick, mentally handicapped, physically disabled, or suffering from a mental disorder; or

(iii) it constitutes part of a programme of rehabilitation or resettlement under guidance from a government department, health authority, local authority, voluntary organisation, or the probation and after care service; or

(iv) he has no parent or guardian and there is no person acting in the place of his parent; or

(v) he has had to leave his family home because he was in physical or moral danger; or

(vi) he is a person who has been recognised by the Home Secretary as a refugee under the 1951 Convention and 1967 Protocol; or he has been granted by the Home Secretary exceptional leave to remain for humanitarian reasons; or he is a person who has submitted an application for refugee status to the Home Office; or

(vii) he has been accepted as homeless under a relevant enactment (Housing Act 1985, Part III); or

(b) he would suffer exceptional hardship if he were to receive a lower level of benefit on grounds of age alone; and any question as to whether any person comes within this sub- paragraph shall be determined by the Secretary of State in his discretion.")

The noble Lord said: My Lords, I had thought that this amendment, being more restrictive than the one I moved at the Report stage, and being, as I thought, a different proposition, leading to a cost of some £2 million as opposed to £50 million, would be in order for a Third Reading discussion. It was of course accepted and printed, although I was warned that there might be procedural difficulties. At 3.15 this afternoon I was informed that it is the view of the Table that it is not in order for the Third Reading and, in view of these circumstances, I shall not move the amendment.
[Amendment No. 5 not moved.]
Clause 22 [Calculation]:
Lord Pitt of Hampstead Lord Pitt of Hampstead moved Amendment No. 6:
Page 30, line 10, at end insert ("and shall include an amount to cover the cost of repairs and insurance of the structure.").
The noble Lord said: My Lords, I beg to move the amendment standing in my name. The purpose of this amendment is to preserve people's entitlement to the allowance which is currently paid to owner-occupiers to cover residual housing costs. The allowance for residual housing costs currently paid to home owners at a rate of £1.85 a week in addition to mortgage interest includes an allowance for essential routine repairs, maintenance and insurance on the structure of the property. In fact, if the cost of insurance on its own
26
is higher than £1.85, adjudication officers can pay more if they think that it is reasonable.
The weekly addition for maintenance and insurance enables a person to apply for a grant for essential repairs to a home if there is no other way of financing the repairs. An annual amount of £96 can be set aside to cover routine essential maintenance and the insurance premium, which is a great assurance to people who may otherwise have no way of budgeting for a major unavoidable annual outlay.
Residual housing costs also cover ground rent for a lease in excess of 21 years and service charges—that is, maintenance, insurance and cleaning of common areas, which is normally associated with company lets—and also affect people living in mansion block;. If one lives in a mansion block, one has to deal with one's share of the maintenance, insurance and cleaning of the common areas. Payments are also available for the emptying of cess pits and septic tanks, which is very useful to people living in rural areas.
If no allowance is made for these provisions under the proposed legislation—and so far none has been made—the ability of owner-occupiers on income support to maintain their homes in a state fit for human habitation will be seriously undermined, Those who are called upon to meet 50 per cent. of their mortgage interest in the first six months will have to cope with the additional and, for some, insurmountable problem of meeting their insurance costs. On average in the South-East this is an annual premium of £70, and that is based on the figure; provided for a post-1945 terraced house in this part of the world. The often mandatory expense of running repairs, such as painting the exterior of one's house of keeping windows in a decent state of repair in order to prevent heat loss and therefore to reduce heating bills is a serious problem.
It is the proud boast of the Government that 63 per cent. of English housing stock is now owner-occupied. However, the dream of owning one's own home is turning into a nightmare for more and more people. Since 1979 over 50,000 people have lost their home; because of mortgage payment difficulties. The re-possession figures have risen from 2,530 in 1979 to over 16,000 in 1985. To impose further financial penalties on owner-occupiers is another serious; betrayal of the Government's principle of encouraging home-ownership. It would particularly hit those council tenants who have bought council homes and those whom the Government are very anxious to encourage to buy council homes—people about whom the Government boast quite a lot.
The Government's own report revealed that 84 per cent. of local authority homes needed work done on them. For example, the survey showed that a very high percentage of traditional houses built between 1945. and 1964 need repairs at an estimated cost of £3,900—nearly £4,000. It is true that at present the single payment can be obtained for repairs to make the home habitable—but only if the cost of the required repairs does not exceed £325. The Minister may tell me that the social fund may provide a grant in some circumstances. However, that is hardly likely to be available for running routine repairs, which are necessary for so many owner-occupied properties.
Lack of this provision is particularly damaging to the owner-occupiers from the ethnic minorities' community. They are usually forced to buy at the lower end of the market and their homes usually require a great deal of maintenance. For example, the proportion of owner-occupiers among the Asian community is particularly high; in fact, it is estimated at 76 per cent. nationally. Asian organisations are extremely concerned about how they will cope without the help currently available to those on supplementary benefit who carry mortgages. The 1983 figures established that only 0.4 per cent. of owner-occupier recipients received more than £50 per week, and when one compares that with the cost of keeping people in bed and breakfast hotels, it is very small beer. However, that is the consequence of their failing to be able to meet the repair bills.
Many families will be running the risk of being regarded as intentionally homeless, and the human cost of resulting family poverty, of the break-up, and of the unpleasant surroundings in which they will have to live ought to be borne in mind. That is often the alternative facing the family who has either had its home repossessed or is forced to sell up, often below market value. It is not too late for the Government to take this point on board. Notwithstanding my previous failure to convince them of the need to think a little more about the people who are deprived, I again move this amendment in the hope that the Government can see the necessity of taking this step. I beg to move.
Baroness Trumpington: My Lords, what we are aiming to do in income support is to set standard weekly incomes for claimants. This is in line with the general approach in the initial scale rate now—they are to meet most living expenses generally rather than to provide a detailed list of amounts for particular items. That is a sensible approach; obviously claimants' actual expenditure patterns vary considerably. But instead of the present system, where we then add other individually-assessed amounts for particular further items, our approach in income support is to build on the present scale rates approach by providing further general premiums for those facing particular extra pressures in families with children, pensioners, lone parents and disabled people.
We are also aiming to leave behind the present rules in the supplementary benefit scheme which relate to housing status. Income support will be a simpler, more sensible way of providing help; and it must be right that generally people should make their own budgeting arrangements to cover items such as repairs and insurance. Our proposal will also be a useful simplification for our local office staff. But I can assure the noble Lord that the current expenditure on repairs and insurance will be included in the resources allocated to the new income support scheme.
Lord Pitt of Hampstead: My Lords, I would not pretend that I am entirely satisfied, but in the circumstances I beg to leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Jeger Baroness Jeger moved Amendment No. 6A:
Page 30, line 26, 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, I rise in a spirit of helpful inquiry to move the amendment standing in my name. There was some confusion at Report stage, and the Minister was courteous enough to write to both her noble friend Lady Faithfull and me. I raise this question again today in order that we might clear up one or two points.
I understand that in preparing the regulations which will enforce some restrictions on the expenses which unemployed volunteers can collect the Government will take account of their travel expenses and perhaps the cost of petrol, for instance, if they are using their cars for purposes that are helpful to the disabled. I have a query, however, that has come from one voluntary organisation. What will happen where organisations give to some of their volunteers what is usually called an honorarium? It may not be strictly expenses in that perhaps bills need not be produced. For instance, in some cases Oxfam pay an honorarium to people who man their shops and who give up time that they could use in other ways.
If someone accepts an honorarium, I can see that that will rightly be put down as earnings, but will it mean that having accepted an honorarium, they then lose the expenses they incur in getting to the voluntary work? It may seem a small point, but it concerns many volunteers. I hope that before there is any hard and fast decision it may be possible for there to be consultation so that the anxieties of people who are doing really good work in the community can be put aside, and they can be encouraged to carry on. I beg to move.
4.15 p.m.
Baroness Trumpington: My Lords, as the noble Baroness said, it will be recalled that on Report when my noble friend Lady Faithfull tabled a similar amendment there was more than a degree of confusion over my reply. I blush as I renew my apologies. I have since written to a number of your Lordships, including of course the noble Baroness, Lady Jeger, and my noble friend Lady Faithfull, and indicated that I would put the Government's position on record at Third Reading. I am grateful to the noble Baroness for providing me with an opportunity to do so.
The treatment of expenses of voluntary workers raises difficult questions of what are really earnings and what are genuine expenses. At present, if someone is working part-time, £4 of his earnings is disregarded. Before applying this automatic disregard to the person's net earnings, genuine work expenses are deducted. In the Green and White Paper we brought forward proposals to increase the automatic disregard from £4 to £5, and at the same time end the individual assessment of work expenses. The earnings disregard for particular groups, such as disabled people and long-term unemployed couples, will rise to £15.
The treatment of expenses paid in connection with voluntary work is a separate matter and one which was not touched on in either the Green or the White Paper.

29
The issue here is what counts as earnings. We accept that there is an argument for not treating as earnings some of the payments connected with volunteers' expenses. The example I quoted in Committee was that of petrol expenses for someone who helps housebound people go shopping or visit the local library, and so on. I am happy to repeat the undertaking I gave in Committee that we shall look very sympathetically at the matter when drawing up the detailed regulations for income support.
I should like to confirm that our proposals on the disregards of part-time earnings do not relate to the payment someone receives in return for their child-minding services. The Green and White Papers do not refer specifically to child minding. Our proposals on the extent to which earnings shall be taken into account in calculating benefit do not cover the way in which these earnings or resources are defined. It is these issues which have become confused.
Concerning an honorarium and whether the disregard will apply to the whole amount, this indeed involves consideration of the prime detail of regulations. I think I have made it clear that, however volunteers' expenses are treated, the £5 disregard will not apply to them as it does to normal remunerative payments. We shall need to consider the matter as we consider how we treat volunteers' expenses. I think I have covered the matter in what I have just said. I hope I have now put the record straight on both these issues, particularly as my noble friend Lady Faithfull was the one who was really put out of kilter by my peculiar behaviour. I hope that every noble Baroness here will feel able to support me, and that the amendment will be withdrawn.
Baroness Jeger: My Lords, in view of the explanation from the noble Baroness, I beg leave to withdraw the amendment
Amendment, by leave, withdrawn.
Clause 28 [Arrangements for housing benefits]:
Baroness Ewart-Biggs Baroness Ewart-Biggs moved Amendment No. 7:
Page 38, line 18 at end insert—
(" () Regulations shall provide for disregarding, in determining a person's income (whether he is the occupier of a dwelling or any other person whose income falls to be aggregated with that of the occupier of a dwelling), so much of any family credit as represents the estimated average cost of school meals available to any member of the family.")
The noble Baroness said: My Lords, in moving Amendment No. 7 I wish to say that its purpose is to highlight a particular injustice which occurs when there is an interruption between the family credit free school meals compensation and the housing benefit. I hasten to say that it is nothing to do with the principle of providing free school meals as is the case now versus the scheme in the Bill of cash compensation for school meals which we have debated fully on several occasions and over which a vote in favour of the cash compensation scheme was taken. This amendment is about the level of the compensation as it affects a small, but vulnerable, number of families, and is therefore an important point to bring out.
The case for this amendment rests on the fact that it was a social security advisory committee which first pointed out that families receiving housing benefit
30
would find the compensation for loss of free school meals greatly reduced, the reason for this being that family credit would count as income for housing benefit purposes. Thus a higher family credit payment would mean a lower housing benefit payment, the loss of free school meals having been taken into account.
To give a few relative figures, may I point out that for families receiving help with both rent and rates, the weekly £2·20 compensation for free school meals would be reduced to a mere 44p per week and for families receiving help with rent only the compensation would be reduced to 88p per week. For families receiving help with rates only it would be reduced to £1.76 per week. As the Social Security Advisory Committee said in its fourth annual report:
"We do not believe that this will fulfil the Government's aim of giving such families 'adequate resources and the freedom to choose how to use them'."
It shows that the reduction in the compensation is large enough to cause a great difference to those families.
The Government have sought to dismiss this issue on the grounds that slightly fewer than a quarter of the families affected will also be receiving housing benefit. But the point that the Government have not met is that the poorest quarter of the families will be affected in this way. This is because it is only the poorest working families who will still be entitled to housing benefit after the cuts proposed in the Bill are introduced. Indeed, according to a Written Answer in another place entitlement to housing benefit for a two-parent, two-child family claiming family credit will cease at £117·80 per week gross and for a lone parent with two children at £106·79 gross. It is difficult to understand why most of the families will be receiving only a rate rebate and not a rent rebate or allowance. Entitlement to rent rebates and allowances extends further up the income scale than entitlement to rate rebates. On the whole it is likely to be owner occupiers and elderly people who are receiving a rate rebate only, and I should have thought it was difficult to believe that many of the poorest working families will fall into either category.
Finally, may I say that if the Government are right in saying that it is only a small minority of the families who will be affected adversely, does it not also follow that the costs of protecting this small minority in the manner proposed by this amendment would also be very small? Indeed, I was wondering whether I might ask the noble Baroness the Minister what the cost would be of protecting this small minority as proposed in this amendment. The noble Baroness may argue that such a disregard would complicate the system and therefore she would not be willing to do it. But surely such a minor complication would be a small price to pay for protecting the very poorest families against what would otherwise be for them a very significant loss. That is the purpose of this amendment. I hope that the noble Baroness will look at this favourably because for these families it would be of enormous importance to get the full compensation for the school meals. It will be the children of those families, being the poorest families, who will be in the most need of the full compensation, and therefore I think it is a logical change for which we are asking and a protection that is so necessary. I beg to move.
Lord Seebohm: My Lords, while the carrier pigeons are still at work perhaps I might add a few words to those of the noble Baroness, Lady Ewart-Biggs. The Government have shown that they are very willing to see that school meals are provided, particularly in the holiday season and right throughout the year, and it seems to me that if they put that importance and that weight on school meals they ought probably to agree to this amendment. I beg to support it.
Baroness Gardner of Parkes: My Lords, I apologise for not being in the House when the noble Baroness, Lady Ewart-Biggs, commenced moving this amendment. It always comes up a little late on the monitor by comparison with what one is watching for. However, I am not sure that I am in support of this amendment because I think it will unnecessarily complicate the administration. I should prefer to see the amount given as the meals supplement to be adequate to cover this without necessarily introducing the further administrative process which would be involved.
At an earlier stage my noble friend the Minister gave us the Government's reasons for putting in extra cash in place of free meals. This second point might only create a complication. I am also worried that it might reach a point where it could create a disincentive to take employment. I ask my noble friend the Minister to correct me if I am wrong, but I think there is a possibility that this in itself could create a poverty trap, which is the very thing we are aiming to avoid. As I understand it, once the amount of family credit is less than the disregard then the housing benefit will not take into account the fact that the family credit is still being withdrawn. This could create a reverse poverty trap and a reason for people not to want to go into employment because that would be to their disadvan-tage.
I am not satisfied that this amendment would be the right answer. It would add complexity and may create the very problems that we are trying to avoid.
Baroness Trumpington: My Lords, I appreciate the motives that bring the noble Baroness, Lady Ewart-Biggs, to move this amendment today. It is an interesting approach to the issues we discussed very recently. But I have to say that it is an approach I cannot commend to your Lordships.
Repetition is not something that is welcomed by your Lordships, but the nature of this amendment forces me to point out that it is important to try to consider the changes we propose as a whole, and not to concentrate on points of detail in isolation. Of those families who will receive family credit and housing benefit we estimate the great majority will be better off overall (around two-thirds); many of them will be better off by more than £5 a week. Of course, most of those affected, 90,000, will only be on rate rebates and therefore their housing benefit loss will be limited to a maximum of 44p.
The amendment would have the effect of introducing an unwelcome complication into the housing benefit scheme. The Government have proposed a simplified and improved scheme. The proposal before us would make the scheme more complicated to administer and harder for the public to
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understand. It would be particularly difficult, for example, for a family who was in part-time work, and so not eligible for family credit, to understand why they were not entitled to the same housing benefit disregard as a family with the same income including family credit. We should also expect that as time goes on it would be less and less obvious that the extra disregard was a link with the former provision of free school meals.
But here is a further fundamental flaw. It has been a major concern of the Government to remove the worst effects of the poverty trap. The effect of the amendment would be to introduce marginal tax rates well in excess of 100 per cent. If housing benefit disregarded amounts of family credit in lieu of the cost of school meals, then where the amount of family credit was less than the disregard housing benefit would be withdrawn at a rate that did not take account of the withdrawal of family credit. This would lead to an even higher marginal tax rate than we have under the present scheme. Moreover, for those with a number of children this could take effect over a quite wide range of income. The noble Baroness asked me in particular about the cost of protecting the small minority and I must tell her that it would be between £3 million and £4 million a year.
To help the House understand, I think it would be helpful if I gave an illustration of what could happen. Let us consider a family with two children, and £3 family credit and £5 housing benefit. If their net earnings were to rise by £5 then, under the illustrative rate set out in the technical annexe, the £3 family credit would cease and the £5 housing benefit would reduce to £1. The total reduction in benefits would be £7 yet the net earnings would have risen by only £5—an overall reduction of £2.
I hope that noble Lords will agree that, while removing the steep steps that came from the loss of benefit and free school meals under the present arrangements, we would not wish to replace them by slopes that would reintroduce the position where an increase in earnings will lead to a reduction in net income. With that explanation, I hope that the noble Baroness will feel able to withdraw her amendment.
4.30 p.m.
Baroness Ewart-Biggs: My Lords, I think that there is one thing on which the Minister and I would agree; that is, that this is a most complicated case and it is a Bill of enormous complexity. However, unfortunately the interpretations seem not to be in agreement at all as to how the very poorest families who are on family credit while at the same time claiming housing benefit will be affected. I have listened to the Minister's answer and I understand it, but it does not fit with other interpretations of how a certain number of families will be affected.
The point that gives me great concern is that the families whom we interpret as being affected will be the very poorest ones, by the very virtue of their being on the housing benefit within this Bill. So I think that the argument for not complicating things is not a very good one, if I may say so to the Minister, because sometimes one needs to complicate things in order to create justice. In this case, it is genuinely thought that

33
this concomitant small change in complication is justified in order to ensure that the very poorest section of the community will not lose out on this particular cash compensation. Those people are in the greatest need of all. However, I think that the noble Baroness has given a very full explanation and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 33 [Awards etc,]:
Lord Wigoder Lord Wigoder moved Amendment No. 8:
Page 44, line 22, leave out ("or direction").
The noble Lord said: My Lords, with the leave of the House, may I, in moving Amendment No. 8, speak also to Amendments Nos. 9, 10, 11 and 12? These are all straightforward drafting amendments. They are consequential upon the passing at Committee stage of Amendments Nos. 88, 101 and 102. Your Lordships will recall that those amendments, among other matters, required the Secretary of State when operating the social fund to proceed by way of regulations approved by Parliament and not by way of directions which he might himself make. There were inadvertently left in the Bill a number of references to directions. All that these amendments seek to do as a consequential matter is to remove those references. I beg to move.
Baroness Trumpington: My Lords, we are considering most urgently the amendments to which your Lordships agreed in Committee and which established the right of appeal to social security appeal tribunals. We are looking very closely at the arguments put forward by your Lordships at that time. In those circumstances, I can have no objection to your Lordships' amendments.
On Question, amendment agreed to.
Lord Wigoder Lord Wigoder moved Amendments Nos. 9, 10, 11 and 12:
Page 44, line 26, leave out ("or direction").
Page 44, line 27, leave out ("or direction").
Page 44, line 28, leave out ("or direction").
Page 44, line 30, leave out from ("a") to end of line 31 and insert ("determination under subsection (3) or (4) above, set aside that determination.")
On Question, amendments agreed to.
Clause 82 [Orders and regulations (general provisions)]:
[Amendment No. 13 not moved.]
Schedule 10 [Minor and consequential amendments]:
Baroness Trumpington Baroness Trumpington moved Amendment No. 14:
Page 149, line 25, at end insert—
"40A.—(1) In section 78(2A) of the Social Work (Scotland) Act 1968 (duty to make contributions in respect of children in care etc.) for words from "of where second occurring to the end there shall be substituted the words "of income support or family credit.".
(2) In section 87(3) of that Act (charges for service and accommodation)—

(a) after the word "by" where first occurring there shall be inserted the words "the Schedule to the Housing (Homeless
34
Persons) Act 1977, paragraph 2(1) of Schedule 4 to the Social Security Act 1980,";

(b) after "1983" there shall be inserted "and paragraph 32 of Schedule 10 to the Social Security Act 1986"; and

(c) for the words "to 44" there shall be substituted the words "(as amended by paragraph 5 of Schedule 1 to the Law Reform (Parent and Child) (Scotland) Act 1986) and 43".")

The noble Baroness said: My Lords, I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Baroness Trumpington: My Lords, I beg to move that this Bill do now pass. If I may term it in that way, we are now heading for the last round-up. A total of 224 hours—183½ in the Commons and approximately 40½ in your Lordships' House—add up to a hard-fought Bill. During the passage of the Bill, we have shown that if we can make improvements to our proposals without sacrificing the principles behind them, we have been ready to do so.
Before I sit down, I should like to pay tribute to the spirit in which the debates on this Bill have been conducted by noble Lords on all Benches. They have shown a depth of concern and involvement rarely exceeded in your Lordships' House and I believe that—even though we may not always agree on means—our discussions have been conducted with the common end of making this Bill effective in directing help where it is needed and when it is needed. I should like to thank all those both inside and outside your Lordships' House for the thought, wisdom and expertise that they have contributed to this end. My special thanks are directed first of all to my noble friend Lord Trefgarne, whose urbane contributions to this Bill have been invaluable. I would particularly like to pay tribute to my noble friends Lord Vinson and Lord Buckinghamshire for their great help with regard to the more intricate clauses dealing with pensions.
My very real gratitude must also be expressed to my noble friends Lord Boyd-Carpenter and Lord Thorneycroft for their wise and statesmanlike speeches on various issues; and I should like to add to their names those of my noble friend Lady Gardner of Parkes, Lady Macleod and my noble friend Lady Lane-Fox, who have represented a variety of interests concerned with groups such as the disabled and others who are most vulnerable to change. When thanking noble Lords, I certainly could not complete the list without mention of my noble friend Lady Hooper. We may be known by some as "Little and Large"; but my noble friend's stamina and assistance have been great. I am very much indebted to her.
The aims of this Bill are clear. They are those which underlie the whole social security review and on which we have consulted on an unparalleled scale. We have diagnosed the faults and come up with solutions to remedy them. Those solutions will restore social security to its true purposes. They are in this Bill. I commend it to your Lordships, and I beg to move.
Moved, That the Bill do now pass.—(Baroness Trumpington.)
Baroness Jeger: My Lords, how can I follow such a disarming statement from my enemy opposite? I can agree with her on one or two points; namely, that I think that the whole House has worked very hard on

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this enormously complicated and, in my view, ill-conceived Bill. We have made some amendments and I hope that they will stay, because so far as we are concerned none of the amendments which has been passed against the Government in this House represented a Labour Party victory, in our view. Those amendments represented a consensus of noble Lords on all sides of the House and also the views of many experienced voluntary organisations outside the House. I hope that that will be appreciated by those who are looking anxiously at them in connection with what has to happen in another place.
I do not go along with the Minister, in spite of all the sweetness and light today, in considering that this matter has had enough consideration. There are 89 clauses and 11 schedules, but only 33 clauses and two schedules were fully discussed in the other place. Because of the guillotine in another place, your Lordships have had to do so much work, some of it successfully and some of it not successfully. I hope that there will be opportunities for further consideration, in view of the delay that there will be in bringing parts of this Bill into effect. I assure the Minister that we shall take urgent steps to deal with it.
I must add, in discord, that one of the great problems—and I know that this view is shared by many in the House—is that there are far too many regulations in this Bill. To a large extent we do not know what we voted for or voted against, because we do not know what will be in the regulations. There are 24 references to facilitating regulations, giving rise to 85 separate provisions, and in all those cases we do not know for what we have voted. This must apply also to Government supporters, because they, too, do not know for what they have voted. Nobody knows, except some gastropod of a bureaucrat somewhere in the department.
But there we are. I regard this Bill not as a reform of the Beveridge proposals, but as a backlash with a great many ill thought-out provisions that are opposed by the majority of voluntary workers in the field, who are at the sharp end, and I look forward to an opportunity to put it right.
Lord Banks: My Lords, from these Benches I should like to thank the noble Baroness, Lady Trumpington, for the even-tempered and helpful way in which she has piloted this Bill through this House, in which she has been ably assisted by the noble Baroness, Lady Hooper, and the noble Lord, Lord Trefgarne. There have been many notable contributions to our debates from the Opposition Benches, from the Cross-Benches, from the Government Benches and, not least, from my noble friend Lord Kilmarnock. There have been some deep and strongly felt differences, but they have all been expressed in good tempered debate.
Looking at the Bill as it now leaves this House, I regret that there is to be no increase in the basic pension. I am sorry that a modest proposal of my own in that direction was voted down, but I am glad that the Government agreed that there should be a concession over the 2 per cent. incentive, where there is a switch from occupational pension schemes to personal pension schemes. But we have yet to see how this is to work out in practice, and we shall be
36
interested to learn in due course just what the Government propose in that connection.
I am glad that the Government decided that family credit should not be paid through the pay packet, and we on these Benches fully support the three amendments which were carried dealing with the contribution to rates, the community care addition and an appeal in the case of the social fund. I regret, however, that an appeal to an independent tribunal was not extended to housing benefit.
There are many matters about which we remain concerned—the under-25s, the fact that child benefit is not to be indexed, the effect of loans instead of grants, the future of school meals, and many other things. We welcome the better alignment of tax and benefit, but regret that as yet there is no integration between the two.
In conclusion, I would describe the Bill as a limited and, in certain respects, well-intentioned attempt at reform which nevertheless falls far short of integration. It contains some measures to which we are strongly opposed, it leaves too much to regulation, and it seems to be permeated by a cheeseparing mentality.
4.45 p.m.
Lord Boyd-Carpenter: My Lords, no government introduce a major measure on social security unless they feel that there is an overwhelming need' for so doing, because, as your Lordships will only too well appreciate at this stage, major legislation on this subject involves an enormous effort not only for both Houses of the legislature, but also for Ministers and for Whitehall. This Bill, whatever view one takes of it—and differing views have been expressed—is obviously a Bill of major importance for our society as a whole and for the vast majority of our population who will be affected by it. Therefore it is fitting that as we reach this stage of the Bill we should reflect for a moment upon its very great importance and the magnitude of the effort involved in bringing it forward.
I believe that one of the major factors in bringing it forward was the Government's appreciation of the fact that the earnings-related pension scheme was going to involve, well into the next century, a possibly intoler-able financial burden upon the finances of the national insurance fund and, perhaps, of the Exchequer. It was therefore very brave and very public spirited of the government, in order to prevent that situation developing at a date at which they are unlikely, at any rate as individuals, still to be in office, to introduce a Bill to put it right. It seemed to me, and I think it seemed to many of your Lordships, that this showed a very proper sense of responsibility on the part of those at present charged with the administration of our social security system and of the Government as a whole.
The Bill is enormously complex. Anyone who has been involved, as I have in the past, with social security legislation knows that it is a subject on which, inevitably and understandably, and perhaps rightly opinions will differ. There will be argument and genuine differences of opinion, which is an inevitable part of the legislative process on this subject. It is, therefore, again indicative of the Government's sense of responsibility that they have faced all this, and the

37
massive consumption of parliamentary time, in order to make the improvements which they feel are necessary to the working of what is one of the most important parts of our society.
I want also to say how much most of us appreciate the tireless energy of my noble friend Lady Trumpington and, as she herself said, of my noble friend Lady Hooper. One can well understand why, when so valuable a Minister proposed to risk her life coxing an eight in the regatta last week, the powers that be intervened to prevent this grave risk to our society because in all seriousness, the noble Baroness has conducted this Bill with great skill, with great courage and with great stamina, and I think all your Lordships will have admired that.
I hope that I shall not do the noble Baroness, Lady Jeger, any harm if I say from these Benches that I have greatly admired her conduct in the very difficult task of opposition to such a Bill. I know—again from past experience—that opposition to such a Bill, with the very limited resources by way of briefing that are available to an opposition as compared to a government, is not an easy task; and, equally, that there are temptations to play for popularity on particular issues where there is a plausible case to be made for improving benefits in one way or another. If I may be allowed to say so, the noble Baroness has conducted the opposition to this Bill in a way which is fully worthy of her own high reputation and of the procedure of this House.
The Bill now no doubt goes, in view of the amendments carried, back to another place, but we conclude this massive stage of our proceedings in a way which adds greatly to the reputation of this House as a revising Chamber. We have given the Bill a thorough and proper discussion, we have faced its enormous complexities, and we have struggled to get it right. In those circumstances I think many of us would want to wish it well.
On Question, Bill passed, and returned to the Commons with amendments.

Financial Services Bill
4.49 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD NUGENT OF GUILDFORD in the Chair.]
Clause 1 [Investments and investment business.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 1:
Page 1, line 9, leave out from ("Act") to end of line.
The noble Lord said: It may be for the convenience of the Committee if I speak to Amendments Nos. 2, 4, 6, 7, 45, 46, 49 and 52. By way of introduction I should like to say that we are faced with a complex Bill which deals with a number of extremely difficult
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issues. We have a short time to consider this Bill, and we on our side wish to adopt a constructive approach to the proceedings of the Committee. We do not wish to obstruct the Bill, but we wish, as I said at Second Reading, to scrutinise carefully and meticulously its provisions.
We have before us as a Committee a large number of Government amendments, admittedly in response to commitments made to various parties and in another place. The text of these amendments needs careful examination, and noble Lords would be disappointed if, as I think the noble Lord, Lord Boyd -Carpenter, said in speaking to the Motion on the Social Security Bill, That the Bill do now pass, we did not exercise our function as a revising Chamber and do what we can to ensure that even amendments table I by the Government at this late stage do not give rise to any difficulties which the Government or ourselves may not have foreseen previously but which we can foresee at the moment.
With regard to the amendment which I am now moving, our belief, as I think I said at Second Reading, is that we need in the financial services industry a strong superstructure; in other words, we need a strong statutory commission. It is not my task to speak to amendments which we will table at a later stage on the various clauses that deal with that body. Nevertheless the thrust of the amendments to which 1 am now speaking subsumes that there will be a strong supervisory body.
In putting down these amendments we are concerned about three points. First of all, we are concerned about over-regulation. It may come as some surprise to noble Lords opposite that we on these Benches are worried about over-regulation, because it has always been assumed that we are in favour of wholesale statutory regulation of the financial services industry. Not so: we are in favour of very strong supervisory powers at the top level; we are in favour of very strong powers in pursuing fraud, in pursuing insider dealings and in pursuing all the malefactions which have been in evidence in the financial services industry over the past few years; but we wish the markets to work, and in our view the markets cannot work if they are regulated by legislation right down to the last detail.
The second point I wish to make is that the Bill before us provides for a proliferation of secondary legislation—statutory instruments—which may be created from time to time by the Secretary of State or the body to which he might delegate his powers, and these without proper scrutiny. The third comment I have to make in introducing these amendments is that a good deal of the definition of what constitutes an investment or investment business contained in Schedule 1 is in fact incomprehensible.
Amendments Nos. 1, 2, 4, 6 and 7 are basically paving amendments which are designed to introduce into Clause 1 certain features which look to our amendments in Clause 2. I have to apologise to the Committee for the fact that a number of these are starred amendments. The Committee will recognise that we have had very little time to study the Bill from the Committee point of view, and that as an Opposition we are not in a position to adopt all the

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skills of parliamentary draftsmen in getting our amendments perfect. What we are trying to do is to describe what we should like to see; and then, if the Government accept what we should like to see, no doubt the Government will draft them in a way that makes sense in the terms of the legislation.
Schedule I—and I am now talking to the Question, That Schedule I stand part—defines an investment, investment businesses and other exemptions and various things which remain to be determined. I shall speak to that in a moment, but I introduce the Question, That Schedule 1 stand part, in order to demonstrate that I believe that the schedule should properly be subject to the procedures we envisage for Clause 2. Amendments Nos. 46 and 48 describe the procedure that we have in mind.
Perhaps I may speak for a moment about over-regulation. I mentioned in my Second Reading speech that we were concerned that the timing of the legislation might be wrong. We are, after all, going into what is popularly known as the Big Bang. This will change the nature of the securities markets. As I mentioned at Second Reading, none of us knows what will be the result of the Big Bang. None of us knows, other than that there will be some major surprises in store, the content of which we cannot at present foresee. Our worry about Schedule 1 is that it attempts to define investment and investment business in a very strict and comprehensive manner.
I can understand how the Government have arrived at this procedure. They started off with a Bill which was generally rather loose, if I may put it in those terms. It relied on self-regulation, and it relied on a very loose definition of an investment and investment business. The Government quite rightly consulted a number of interested parties and took the Bill through the various stages in another place. As a result of those debates, and as a result of their consultations, they found a number of loopholes in the definitions which gradually they tried to close.
All of us who have been involved in public business know that there is a tremendous temptation on those who are drafting legislation, both primary and secondary, to try to close all the loopholes in advance. It is in one sense offensive to officials if they discover after six months that part of what they have drafted is not relevant. It may be wrong, it may be that it destroys markets. I can see that the Government have attempted to consult very widely and to define right down to the last dot and comma exactly where investments are and where investment businesses are. I do not believe that it is possible to do that in primary legislation.
I now turn to Schedule 1, and I shall make one or two brief points on it—although my copy of the schedule is covered in red ink, question marks and all sorts of rude expressions which I should not like to inflict upon the Committee. Paragraph 1 Schedule 1 states that investments are:
"Shares in the share capital of a company and stock in a company".
A note to the schedule states that this includes:
"any body corporate and also any unincorporated body constituted under the law of a country or territory outside the United Kingdom".
The extreme end of the spectrum, I can tell the Committee, is the Racing Club in Paris. It is an unincorporated body under French law. It issues certain certificates which I think probably could be regarded as stock. Are we saying in this schedule that participation certificates in the Racing Club, Paris, are in fact investments under this Bill? If we are, that is one way of defining them, but it seems to me to be going to extraordinary extremes. I can arrange for a number of different varieties of unincorporated bodies to be produced, in different jurisdictions, which would have the effect of creating instruments and be able to create instruments which seem to me to fall inside the schedule.
In making these remarks I should say at the outset that I do not fully understand the schedule. I have tried my best, but I find it an extremely difficult schedule to understand. If I have made a mistake, no doubt the noble Lord the Minister will correct me, but from my first reading, second reading and third reading of the schedule the rather ridiculous security I have in mind appears to fall within paragraph 1.
Paragraph 2 refers to certificates of deposit, but specifically excludes other bills of exchange. I assume that in excluding other bills of exchange it excludes bankers' acceptances—in other words, bills of exchange which are accepted by a bank. If you include certificates of deposit and exclude bankers' acceptances which are, broadly speaking, traded in the same market, there is a problem of definition which I find very difficult to understand. For example, there is no reference to blocked currency trading. I understand that deposits, bank notes, statements showing a balance in a current, deposit or savings account are excluded under paragraph 2. Nevertheless, there is a large trade in blocked currency. For the purposes of the debate I leave out barter, but there is a large trade in bartering which may or may not fall within the definition of paragraph 2.
In order not to weary the Committee I move on to the question of options. With options and futures we run into very serious trouble. Paragraph 7 refers to:
"Options to acquire or dispose of—

(a) an investment falling within any other paragraph of this Part of this Schedule; or

(b)currency of the United Kingdom or of any other country or territory".

They are regarded as investments. Presumably options on the Financial Times Stock Exchange index, which are freely traded, and freely traded in New York and Chicago, are investments—or are they not investments? We do not know. Currency options traded between banks, as we learn from paragraph 18 of the schedule because they are dealings in financial institutions, are exempt because the two financial institutions will trade between themselves and therefore be exempt. But if a broker deals with a bank in any of these instruments, it appears that they fall within the schedule.
Again I must emphasise to noble Lords opposite that I have read this schedule several times with great care and I am trying to point out areas where my

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understanding may be quite wrong, but I have been a practitioner in these markets for about 20 years and it serves to demonstrate that if I cannot understand it, I am not sure how many people outside, without the benefit of great legal expertise, will be able to understand it.
On the question of futures, in regard to paragraph 8 of Schedule 1 I have been chased all over the country. Indeed, at the weekend I was chased to my home in mid-Wales by the chairman of the London Metal Exchange. He pursued me to say that they cannot accept paragraph 8 of Schedule 1 because it does not allow the London Metal Exchange to continue. He asked what he should do. I told him that it is not for the Labour Party to encourage the LME and that it is for him to go to the Government, to talk to the Government and make their point. I said that whether or not the Government accept his point is not my problem but his problem.
Finally, I refer to that part of the schedule dealing with investment business. Everyone will look at this from their own point of view and I looked at this in regard to myself. I declared an interest when the Patronage (Beneficiaries) Measure came before the House recently, that I was the financial adviser to Christ Church College, Oxford. I am also, as I declared at Second Reading, an adviser to the Banco de Bilbao. Therefore I am, I suppose, involved in advising on investments. But I am involved in advising Christ Church on investments not as part of my regular business, but simply because I happen to be a financial adviser to Christ Church. I ask myself whether I should be a member of some self-regulating organisation or something else which would entitle me to do so.
I ask the question with more point because although one of my other colleagues is a former director of a merchant bank and therefore can assume to be in the investment advisory business, my other colleague as financial adviser to Christ Church is no less a figure than the Secretary to the Cabinet. Then I ask myself: is the Secretary to the Cabinet in his capacity as advising on investments—it has all been cleared through No. 10 and it is all perfectly in order—to be a member of some sort of organisation and does he have to be authorised for the position?
The noble Lord, Lord Roll of Ipsden, made a series of observations on Second Reading about the Securities and Exchange Commission. He said that he thought that the SEC had been much maligned. He went on to say that he felt that the balance between the SEC and the various organisations that constitute the New York capital market had broadly slid into the sort of structure that we were trying to create in this Bill. I understood from him and from noble Lords opposite that we were trying to create a practitioner-based control, not control by legislation in detail.
Our solution to this is to try to get back to the Takeover Panel. The noble Lord, Lord O'Brien of Lothbury, referred on Second Reading to its creation. The advantage of the Takeover Panel was that it had enormous authority. That authority derived from the Bank of England, and in those days nobody challenged the authority of the Bank of England. The Takeover Panel was able to give guidance and say, "No, you cannot do this; you can do that, or you can do the other". It it got into trouble, it would make a code, and
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that code was universally respected. In those days nobody in the City of London would dare to go against the Takeover Panel.
In my view those days are past. Nevertheless it seems to me that in trying to preserve the flexibility of the markets, to allow them to function, we should have a body at the top that carries the same authority as did the Takeover Panel—in other words, the authority of government—but keep flexibility on how these markets should be handled, who issues guidance, and at what point. We should keep that very flexible.
Clearly, we have to have a big stick, and at the end of the day the body that is governing the securities markets must be able to say, "We wish to issue an order; we wish to have an order laid before Parliament because certain people are stepping out of line and we really want to get them back into line and seal up this particular loophole". I do not believe that such orders should be issued by subsidiary bodies without proper consultation with the Houses of Parliament, and our amendment provides for a mechanism whereby that might be done. It provides a mechanism not only for this type of order but indeed for other orders which may be promulgated from time to time by the supervisory body in the securities market. It should be very quick. Indeed, we have set out a procedure as to how it can be made very quick. Nevertheless, it should be properly commented upon by noble Lords and by Members in another place.
In saying all that, I recognise that I am somewhat disturbing the balance of the Bill and I recognise that the Government may well feel that the time has passed for such a radical change in the Bill to be introduced Yet I have to warn the Committee, and I speak as somebody who has been involved in the markets for close on 20 years of my life—and I refer to what my noble friend Lord Lever of Manchester said at Second Reading—that I believe that in this Bill we are in danger of getting all the disadvantages of a Securities and Exchange Commission with none of the advantages. I believe that we need to shift the balance back to a system of practitioner control underneath with a strong statutory body at the top. It is in that spirit that I beg to move the amendment.
Lord Bruce-Gardyne: I should like to say only a few words. I must say that to a considerable extent I am in agreement and sympathy with the points made by the noble Lord, Lord Williams, but I want to home in on one particular aspect of the Bill which I think falls to be discussed under Clause 1; though my noble friend may correct me if I am wrong in this respect.
I must say, first, that apart from the noble Lord's, desire to draw the regulatory procedures back to scrutiny and clearance by both Houses of Parliament under his Amendment No. 46, I found a good deal with which to sympathise in his approach. I found it rather refreshingly different from the approach that 1 seem to remember the last Labour Government were inclined to adopt in matters of regulation. In particular, I sympathise with what the noble Lord has to say about the complexity of Schedule 1. For my part, I confess that I am lost in Schedule 1 and, like the noble Lord, I feel that a great many practitioners will also be lost.

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I do not want to delay the Committee at this stage, but the particular point that I wish to raise here is one that seems to me to be a matter of substance. The problem has been drawn to my attention by the Association of Corporate Treasurers. Clause 1(2) states:
"For the purposes of this Act a person carries on investment business if by way of business he engages in any activity which falls within any paragraph in Part II of that Schedule and is not exluded by Part III of that Schedule".
It is the belief of the corporate treasurers—of course, it has been explained to my noble friend's department and has been the subject of extensive discussion with that department—that corporate treasurers will in fact find that their activities are in grave danger of being short circuited by these provisions of Clause 1.
As they see it, the particular problem that arises is in regard to a transaction—for instance, the purchase or sale of a subsidiary company or the acquisition of a substantial interest in a company—in circumstances where, by the definition of his work, a corporate treasurer cannot be sure that he is making that acquisition as a permanency and not with the possibility that in the normal course of his activities in the finance department of a public corporation he may come to sell that investment again. In such a situation he may find himself acting apparently in breach of Clause 1 of this Bill.
I have seen some of the correspondence between my noble friend's department and the Association of Corporate Treasurers and I have studied it with care. My noble friend will correct me if I have it wrong, but the impression that is created is that in the eyes of the Department of Trade and Industry there is no real reason for corporate treasurers to be worried because the Department of Trade would not dream of commencing criminal proceedings under the powers created in this Act, and in particular as a consequence of Clause 1, against corporate treasurers who were merely going about their normal business in that capacity. That is not what the Bill is for.
However, as I understand it, the trouble is that it would be entirely open to a third person to commence civil proceedings for the annulment of a contract which, although it may be a perfectly logical and normal contract of a type that the corporate finance department of a large corporation would expect to transact in the normal course of business, might nevertheless possibly be shown to have been entered into under the terms which put it outside the limits of Clause 1 of this Bill
The consequence of that would be that that contract could be rendered null and void and that an individual who won such a civil litigation could claim restitution of his original sale price, or purchase price for that matter. That would not be because there had been anything invalid in reality in the original contract but because he had discovered that the transaction had not worked out as he had expected, and understandably he wished to seize the opportunity provided by this legislation to retrieve his original error of judgment. As I understand it, the consequence is that there would be real anxiety that these contracts, which are part of the normal business of a corporate treasurer's department,
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would be open to suspicion as to whether they could be legally entered into at all.
There is a real danger that substantial companies might even be obliged to move the centre of their activities overseas, unless some alleviation can be provided to the operation of Schedule 1 to the Bill in so far as it impinges on a group of this kind. I have thought it advisable to raise the matter at this point because it may well be that Amendment No. 3, in the name of the noble Lord, Lord Hacking, which is under discussion at the moment, goes a long way to meet the point. It would at least be a substantial alleviation if, instead of its referring to "any activity", it was a question of a single transaction which was unlikely or not expected to be repeated.
Finally, I realise that my noble friend has tabled a number of amendments to Schedule 1 which we shall be discussing in due course. Inevitably it has not been possible to establish in full detail what will be the impact of the amendments. As I understand it, the impression of the Association of Corporate Treasurers is that, unfortunately, the amendments do not effectively meet the nature of the problem, although they go some way towards that. It is for that reason that I have not tabled amendments at this stage. I thought it more sensible to hear the explanations of my noble friend in due course when we come to those amendments and then consider whether it is necessary to seek to move further amendments on Report.
Lord Denning: I hope that the Committee will not accept the amendment. It is sensible to have the provision,
"unless the context otherwise requires",
in a long Bill or statute of this kind. As one goes through it one may find that the definition of "investment" does not fit in with some of the later clauses. Unless there is a provision such as this, the court will be faced with a problem of repugnancy: the word "investment" is to mean such and such but it may not fit in with a later clause. It is sensible to have in the statute:
"unless the context otherwise requires".
It is a sensible provision to have in a long statute of this kind.
I add this. The schedule brings in a pattern which I have rarely seen before of paragraphs with notes attached. I should like to know the exact legal standing of the notes. As I read them, they are enactments; part of the statute and not merely notes for guidance. I should like that to be made clear. I have not heard specified what the status of a note is. I should like it made clear that the note is part of the enactment but for the sake of convenience is not put in as a subparagraph. Otherwise, I hope that the Committee will not accept the amendment; it might give rise to more trouble.
Lord Lucas of Chilworth: I am most grateful to the noble Lord, Lord Williams of Elvel, for his opening remarks. This is a long and complicated Bill. He is right when he suggests that there will have to be a good deal of good will on both sides. I was glad to have his assurance that there is that good will on his side of the Committee and I should like him and other Members

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of the Committee to know that it is also on this side. Indeed, in his opening remarks my noble and learned friend said that we continue to be willing to consider matters that may arise during the course of our proceedings.
We should start by recalling that the principal objective in the Bill is to have a practitioner-based self-regulatory system but within, and with all the force of, a statutory framework. If we start to move away from that first principle, I fear that we shall get ourselves into a good deal of trouble. I do not think that comparisons with the American exchange system are helpful. We have firmly set our face against that system. As I understood it, that was accepted by noble Lords on Second Reading.
The noble Lord expressed difficulty in understanding the schedule and he posed a number of questions. He raised the question of the Paris Racing Club. I am not sure whether he raised the question of that institution and the Oxford college in a mischievous sense, but if the Paris Racing Club's stocks or shares were traded in the United Kingdom, they would have to be traded by an authorised person and conform to the rules. They would fall within the ambit of the Bill. Similarly, if the noble Lord had a paid position with the Oxford college, in which he advised it on investments, I think that that would be considered to be by way of business and he would have to be authorised. I can see no difficulty with that problem.
The noble Lord asked whether the options on stock exchange indices were investments. They are; they fall within the definition of "contracts for differences", which he will see described in paragraph 9 of the Schedule.
The noble Lord asked what will happen after Big Bang; will the precision of Schedule 1 be too rigid? Even the most erudite of commentators does not know what will happen after Big Bang, and I certainly do not. It is precisely because we recognise that new forms of investment business will emerge and new loopholes may need to be closed that we have provided in Clause 2 a power to change the definition of investment business. I agree with him that it would be wrong to enshrine those definitions in primary legislation, without the possibility of amendment. But that is no reason at this time to strike out all the definitions that the Bill contains.
The noble Lord said that his amendments might create a disturbance to the balance of the Bill. They would delete the central definitions in the Bill—the definitions of "investment" and "investments business"—leaving those to be determined later. Not only would that leave the Bill without a central core; it would bring to a halt all the work that is going ahead, with a view to bring the new arrangements fully into force as soon as possible after Royal Assent. Without those crucial definitions, planning becomes impossible. I am quite sure that that cannot be what he wishes.
That is hardly compatible with what is so frequently said in your Lordships' House; that too much is left to rules. I recall the noble Lord, Lord Bruce of Donington, reminding me of that when we had a similar, complicated Bill last year. He asked that more
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of the Government's intentions should be put on the face of the Bill and less left to rules. I pray that in aid this afternoon.
I do not deny that Schedule 1 is complicated. That is a necessary reflection of the fact that the financial services sector is becoming increasingly complicated and will become more so. Any definition would have to be at least as complicated, wherever it was contained. Nothing would be gained in terms of clarity by adopting the noble Lord's proposal.
We are bringing forward a number of amendments to Schedule 1. We may well need to make further amendments to the schedule on Report in the light of the debate on those amendments and of further comments from practitioners. The amendments, which we shall be discussing a little later, are the practical results of the Government's willingness to listen to and to respond constructively to comments on the Bill. The definitions are most certainly not easy, and it is not easy to decide exactly where the boundaries should be, especially with investment markets and products being so diverse.
My noble friend Lord Bruce-Gardyne asked me about the position of corporate treasurers. The meaning of "engaging in any activity" is raised by Amendment No. 33, which is in a following group of amendments.
5.30 p.m.
Lord Bruce-Gardyne: I apologise to my noble friend and to the noble Lord, Lord Hacking. I am afraid that I was looking at the wrong group of amendments. I was looking at the social security legislation. I accept entirely that the amendment about which I was talking is in a following group.
Lord Lucas of Chilworth: My noble friend and the Committee will no doubt be pleased if I keep my remarks on that point until we reach that amendment. I was glad to have the acceptance of the Bill as it stands by the noble and learned Lord, Lord Denning. He asked me what the status of a note was. A note contained within the provisions of the Bill has statutory force.
I do not think that I can add anything further. I have explained why we need Schedule 1 and the definitions. I have explained that they can be changed by virtue of Clause 2. Clause 2 is in the Bill so that the definitions can be changed, brought up to date and made effective. I urge the Committee to reject this block of amendments.
Lord Grimond: Will the Minister be good enough to confirm one point which arose from his explanation? As I understood him, dealing with the position of the noble Lord, Lord Williams of Elvel, as investment adviser to Christ Church, he said that the test should be whether he receives any remuneration. That is as I understand it. Will he confirm that, because I have been asked by treasurers and others in universities what their position will be under the Bill? On university courts and councils people give a good deal of investment advice free of charge as treasurers. It may be that they are members of firms which indirectly may do business on behalf of the university, but, nevertheless, I should like to confirm, as I

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understood even before the Minister spoke, that the test of their position is whether they are remunerated, and that that would establish their position under the Bill. Is that right?
Lord Lucas of Chilworth: I used the term rather loosely as meaning "engaging in business". If someone is engaged in that business, whether as a member of a firm or as an individual, presumably he expects to be remunerated. That is how I use the term. The test is whether one is in business. If one is in business, one would have to be authorised. If one belonged to a company or a partnership which was engaged in business, that would come under the terms of the Bill. That company would have to be authorised. We shall come to this matter a little later in the Bill.
It would then be for the company to register with one of the self-regulating organisations. It would then be for that self-regulating organisation to ensure that its rules were carried out. Its rules would ensure that the company conducted its affairs through its individuals in a proper way and in accordance with the rules. If, however, an individual is not within a company, but engages in that activity by way of business, he would have to be authorised. I hope that that gives a rather clearer definition.
Lord Grimond: These individuals are giving advice as a public service. They are not gaining anything from it. They are merely giving their services free of charge because they are knowledgeable people. I wanted to make it clear that those people would not fall within the Bill and would not have to be registered.
Lord Marsh: I wonder whether I may follow that point. I am chairman of a fairly large charity. There are people associated with companies who provide professional services for that charity. Because of the relationships which have grown up between the professional companies concerned and the charity, there are persons who are employees or partners in those professional companies who give their advice free of charge. I am slightly bewildered. I do not know whether the Bill covers people whose remuneration is undoubtedly derived from a company which is providing a financial service for professional fees but who are not in receipt of fees in relation to the advice that they give the charity.
Lord Lucas of Chilworth: If the Committee looks at paragraph 15 of Part II of the schedule on "Advising on investments" it will see:
"giving, or offering or agreeing to give, advice as to the purchase, sale, subscription for or underwriting of investments or as to the exercise of rights conferred by investments"
That activity would constitute investment business for which the individual or company would have to be authorised.
Paragraph 21, on page 151, under the heading,
"Advice given in course of profession or non-investment business"
states:

"(1) Paragraph 15 above does not apply to advice—

(a) which is given in the course of the carrying on of any profession or of a business not otherwise constituting investment business; and

48

(b) the giving of which is a necessary part of other advice or services given in the course of carrying on that profession or business".

If the adviser is not paid, he will not be giving advice by way of business, which is what I sought to establish in my first response to the noble Lord, Lord Grimond.
Lord Williams of Elvel: I am grateful to the noble Lord, Lord Lucas, for clarifying that point. I am still in some doubt as to what the position is. I must declare that I receive no honorarium of any sort from Christ Church for giving it investment advice. I advise it on matters other than pure investment. Nevertheless. I am somebody who by virtue of other occupation:!; is involved in investment business.
Even after following carefully what the noble Lord has said, so far as I can see I and my colleague who is a former director of Morgan Grenfell will fall within the ambit of the Bill, whereas the Secretary to the Cabinet, I fully understand, will not fall within the Bill's ambit. Unless the noble Lord can persuade me otherwise, I think that that is the right interpretation. I hope that the noble Lord will be able to help us on that matter at a later stage of the Bill. As the noble Lords, Lord Grimond and Lord Marsh, pointed out, it puts a number of people who give their services free of charge to institutions, for one reason or another, in considerable difficulties if they fall within this require-ment for registration. I hope that the Minister will be able to come with us a little on that point.
The point made by the noble Lord, Lord Bruce-Gardyne, about corporate treasurers was well taken. It is a point which has been made on a number of occasions and it is right. I should not like him to think, however, that this is a Bill put forward by the Labour Party. As I said in my Second Reading speech, this is not the sort of Bill that the Labour Party, necessarily, would have brought forward. We do not expect to have many Labour votes in the City of London. Nevertheless, the Bill is there, and we shall scrutinise it meticulously and carefully, as is our proper duty as the Opposition.
The noble and learned Lord, Lord Denning, concentrated specifically on my Amendment No. 1 which I regarded, I am afraid, in my innocence, as a paving amendment. If the noble and learned Lord, Lord Denning, objects to the amendment, I am happy not to have it considered. Maybe, it is right that statutes should have the words,
"unless the context otherwise requires".
It is not something that is crucial to the thrust of:he amendments. Instead of moving Amendment No. 1 I would certainly be prepared to move Amendment No. 2.
The noble Lord, Lord Lucas, thought that I might have been rather mischievous in citing the cases that I did. I was not trying to be mischievous. I was trying to raise genuine points at the margin of difficult legislation. It is these points at the margin that point up the difficulty of understanding the legislation. It was not at all in a mischievous spirit that I raised the issues of the Paris Racing Club or Christ Church, Oxford. I hope that the noble Lord accepts that. I accept fully what the noble Lord says about contracts for differences applying to the footsie options. It is simply

49
that the language in which that is couched had, until then, somewhat escaped me.
The question of whether Schedule 1 should be in the Bill or in the form of an initial order is a matter to which the noble Lord addressed himself. He wants it in the Bill. I should like it in the form of an initial order. 1 do not believe that it makes much difference as to how the SIB will plan its activities. It can certainly plan its activities, as it has been doing, on the basis of draft, draft rules and draft orders. I do not believe that this will create any great problem. I was interested to see that the noble Lord called in aid my noble friend Lord Bruce of Donington asking for more to be on the face of the Bill and less to be in rules passed in secondary legislation after the Bill has gone through.
I come back to my central point. It is a point that the noble Lord, Lord Bruce-Gardyne, and I understand and appreciate, coming as we do, if I may say so, from somewhat different ends of the political spectrum. All of us agree, I believe, that what we are looking for, as the noble Lord, Lord Lucas, said, is a strong statutory superstructure—we should like it stronger—and a proper, practitioner-based control underneath which gives proper flexibility in the markets. We believe that the balance of the Bill is not quite right. We believe that the balance could be made better. We should like to test the opinion of the Committee on the matter.
5.42 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 80; Not-Contents, 143.

DIVISION NO. 2

CONTENTS

Amherst, E

Jenkins of Putney, L.

Ardwick, L.

John-Mackie, L.

Attlee, E.

Kilbracken, L.

Barnett, L.

Kilmarnock, L.

Birk, B

Llewelyn-Davies of Hastoe, B.

Blease, L

Lockwood, B.

Blyton, L.

Longford, E.

Briginshaw, L.

McGregor of Durris, L.

Brockway, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

Mackie of Benshie, L.

Carmichael of Kelvingrove, L.

McNair, L.

Chitnis, L.

Mais, L.

David, B [Teller.]

Marsh, L.

Davies of Penrhys, L

Meston, L.

Dean of Beswick, L.

Morris of Kenwood. L.

Diamond, L.

Morton of Shuna, L.

Donoughue, L.

Nicol, B.

Elwyn-Jones, L.

Ogmore, L.

Ezra, L.

Phillips, B.

Fisher of Rednal, B.

Pitt of Hampstead, L.

Fitt, L.

Ponsonby of Shulbrede, L.

Foot, L.

[Teller.]

Gallacher, L.

Rea, L.

Gladwyn L.

Rochester, L.

Glenamara, L.

Seear, B.

Graham of Edmonton, L.

Sefton of Garston, L.

Gregson, L.

Shepherd, L.

Grey, E.

Silkin of Dulwich, L.

Grimond, L.

Simon, V.

Hampton, L.

Stallard, L.

Hanworth, V.

Stedman, B.

Hams of Greenwich, L.

Stewart of Fulham, L.

Hatch of Lusby, L.

Stoddart of Swindon, L.

Hayter, L.

Strabolgi, L.

Heycock, L.

Taylor of Blackburn, L.

Hughes, L.

Taylor of Mansfield, L.

Jeger, B.

Tordoff, L.

50

Underhill, L.

Williams of Elvel, L.

Wallace of Coslany, L.

Wilson of Rievaulx, L.

Wells-Pestell, L.

Young of Dartington, L.

Wigoder, L.

NOT-CONTENTS

Airey of Abingdon, B.

Lindsey and Abingdon, E.

Aldington, L.

Long, V.

Ampthill, L.

Lucas of Chilworth, L.

Auckland, L.

Lyell, L.

Bauer, L.

McAlpine of Moffat, L.

Belhaven and Stenton, L

McFadzean, L.

Beloff, L.

Macleod of Borve, B.

Belstead, L.

Mancroft, L.

Benson, L.

Margadale, L.

Bessborough, E.

Marshall of Leeds, L.

Birdwood, L.

Masham of Ilton, B.

Blake, L.

Maude of Stratford-upon-

Boardman, L.

Avon, L.

Boyd -Carpenter, L.

Merrivale, L.

Brabazon of Tara, L.

Mersey, V.

Brocket, L.

Milverton, L.

Brougham and Vaux, L.

Molson, L.

Broxbourne, L.

Monk Bretton, L.

Bruce-Gardyne, L.

Morris, L.

Buckinghamshire, E.

Mottistone, L.

Caithness, E.

Mowbray and Stourton, L.

Cameron of Lochbroom, L

Munster, E.

Campbell of Alloway, L.

Murton of Lindisfarne, L.

Carnegy of Lour, B.

Napier and Ettrick, L.

Carnock, L.

Nathan, L.

Chelmer, L,

Newall, L.

Coleraine, L.

Norfolk, D.

Constantine of Stanmore, L.

Onslow, E.

Cowley, E.

Orr-Ewing, L.

Craigavon, V.

Pender, L.

Cullen of Ashbourne, L.

Penrhyn, L.

Davidson, V.

Perth, E.

Denham, L. [Teller]

Peyton of Yeovil, L.

Digby, L.

Plummer of St

Dilhorne, V.

Marylebone, L.

Drumalbyn, L.

Portland, D.

Elibank, L.

Rankeillour, L.

Elles, B.

Reay, L.

Elliot of Harwood, B.

Redesdale, L.

Elliott of Morpeth, L.

Reigate, L.

Elton, L.

Renton, L.

Erroll of Hale, L.

Richardson, L.

Faithfull, B.

Romney, E.

Ferrers, E.

Russell of Liverpool, L.

Foley, L.

St. Aldwyn, E.

Fortescue, E.

St. Davids, V.

Fraser of Kilmorack, L

Saint Oswald, L.

Gainford, L.

Salisbury, M.

Gardner of Parkes, B.

Saltoun of Abernethy, Ly.

Glanusk, L.

Sandford, L.

Glenarthur, L.

Sempill, Ly.

Gray of Contin, L.

Shannon, E.

Greenway, L.

Sharpies, B.

Gridley, L.

Skelmersdale, L.

Hailsham of Saint

Stodart of Leaston, L.

Marylebone, L.

Strathcarron, L.

Harmar-Nicholls, L.

Strathclyde, L.

Harvington, L.

Strathcona and Mount Royal,

Henderson of Brompton, L.

L.

Hives, L.

Sudeley, L.

Holderness, L.

Swinton, E. [Teller]

Home of the Hirsel, L.

Terrington, L.

Hood, V.

Teynham, L.

Hooper, B.

Tranmire, L.

Hylton-Foster, B.

Trefgarne, L.

Inglewood, L.

Trumpington, B.

Ingrow, L.

Vaux of Harrowden, L.

Kaberry of Adel, L.

Vickers, B.

Kimball, L.

Vivian, L.

Kimberley, E.

Whitelaw, V.

Kitchener, E.

Wynford, L.

Lane-Fox, B.

Ypres, E.

Lawrence. L.

Zouche of Haryngworth, L

Layton, L.

On Question, amendment agreed to.

5.52 p.m.
Lord Hacking Lord Hacking moved Amendment No. 3:
Page 2, line 2, leave out ("any activity which falls") and insert ("activities which fall").
The noble Lord said: This amendment directs attention to a problem concerning the definition of the words "carries on an investment business". The amendment which I shall also move as Amendment No. 5 in the Marshalled List directs attention to the same problem, and with the leave of the Committee I shall make my comments on both these amendments as I address the Committee.
The problem arises first of all on the domestic front, if I may describe it in that way, with the definition in subsection (2) of the Bill concerning the carrying on of an investment business by, say, a company which is normally resident in the United Kingdom and which is normally transacting business in the United Kingdom. The definition in subsection (3), which goes to Amendment No. 5, concerns the definition of carrying on an investment business by persons who are abroad but who nonetheless transact business in the United Kingdom. It is plain that, if the Bill is to reach our statute books, persons regularly carrying on investment business in the United Kingdom, whether based here or coming to this country regularly to carry on investment business, should fall under the terms of this Act. There will be no difficulty, I think, in accepting that proposition.
Equally, in my submission, there should be no difficulty in accepting the proposition that a single, one-off transaction, whether carried out by a person or persons in the United Kingdom or person or persons coming from abroad, should not fall under the provision of this Act, for there would be enormous complications for an ordinary industrial company, whose main business has nothing whatever to do with investments, if it should be compelled to become an authorised person and fall under the regulations of the Bill for a single transaction. The same point applies to persons coming from abroad to carry out a single transaction.
The difficulty is that, in seeking to find the right definition, the Bill as drafted reads in this way:
"a person carries on investment business if by way of business he engages in any activity which falls"
within the specifications in Schedule 1. As the Bill is now drafted, this would, in my submission, mean that a single transaction, whether carried out by a person or company within the United Kingdom or from abroad, would fall under this definition as set out in Clause 1.
I simply say that this cannot be the intention of the Bill, and if my amendment has not struck the right definition then perhaps the Government and the Minister could look again at the drafting of the Bill and recognise that the problem does exist and give it further consideration. That is indeed my purpose in moving this amendment. I have no intention of dividing the Committee on any definition point. I merely seek the co-operation of the Government in recognising that this problem exists and should be dealt with.
Perhaps I may just give one example of the problem. An industrial company has a joint venture with another company and acquires shares in the joint
52
venture vehicle on behalf of the joint venturer. This would then fall within paragraph 12 of Schedule 1, which is the paragraph dealing with investments. It would therefore not be entitled, in a manufacturing business which has nothing whatever to do with investments, to take itself out under any of the exceptions continued in Schedule 1. I merely give that as an example so that the Committee may see how the problem could arise. It is that type of problem that I seek to draw to the attention of the Government in asking the Minister to look again at the definition of carrying on an investment business.
Lord Bruce-Gardyne: I should like to apologise once again to the noble Lord, Lord Hacking, for jumping the gun on this amendment owing to my misapprehension as to the nature of the grouping on the previous amendment moved by the noble Lord, Lord Williams. Since in effect I have already spoken to this amendment, I do not intend to weary the Committee by repeating my remarks.
I know that my noble friend the Minister has heard the comments I made in this context with particular reference to the position of corporate treasurers, and all I wish to add to what has been said is that I have to confess that it is my impression, from the corespondence that I have seen between my noble friend's department and the corporate treasurers, that it is indeed the intention of the department to catch the single transaction. I believe that unless that is changed it will indeed have the thoroughly undesirable consequences which the noble Lord has referred to in reference to industrial companies and the like, which are not in the investment business as such but which may, in the natural course of their business as industrial companies, be involved in one-off transactions. I shall therefore listen with considerable care and interest to my noble friend's response, and I hope that the optimism of the noble Lord, Lord Hacking, on the point turns out of be justified.
6 p.m.
Lord Lucas of Chilworth: I am grateful to the noble Lord, Lord Hacking, for explaining the purpose of his Amendments Nos. 3 and 5. I am also very glad he acknowledges that there are a great number of difficulties in getting this absolutely right. Perhaps I may say this to the noble Lord. We have been aware of the concerns that have been expressed by the Law Society and the Association of Corporate Treasurers about the use of the word "activity". It has been suggested that this might mean that a person could be regarded as carrying on investment business in the United Kingdom if by way of business he carried out a single transaction within Part II of Schedule 1 to which the exclusions in Parts III and IV do not apply. That is certainly not the intended effect of the Bill; nor do we think that it is the actual effect.
I am advised that the word "engages" carries with it an implication of continuity, or at least of repetition. As a result we believe that the clause should not be construed as meaning that a person is to be regarded as carrying on investment business in the United Kingdom if very occasionally he does something which amounts to an activity within Part II of the schedule and which is not excluded by Parts III and IV.

53
In answer to the point raised by my noble friend Lord Bruce-Gardyne, we have brought forward several amendments to Schedule 1 to meet most of the points raised by the Association of Corporate Treasurers. We do not believe, as the Bill stands, that they will now be caught. If there are still some points of detail where they think that they may inadvertently be caught, we should be very happy to look at this again. We accept that there is still concern about unenforceability provisions in Clause 5. Perhaps when we turn to amendments to Clause 5 I shall be able to say something fairly sympathetic.
If the advice I have is correct—that the word "engages" carries an implication of continuity, or at least of repetition—I believe that is somewhat different from the point about "on occasion". I believe therefore it is fairly clear. I hope that that explanation will satisfy the noble Lord.
Lord Hacking: I am partly satisfied. I say that out of no sense of ingratitude to the Minister. I am certainly satisfied to hear him say that it is not the intention of the Government to deal with the one-off transaction. That was the concern I was expressing to noble Lords when making my comments upon my amendment. However, I am not entirely satisfied with the explanation given by the Minister that "engages" carries some continuity. Perhaps when reference is made to matrimonial engagement there is some intention of continuity there. But in the normal sense of the word, if a person engages in a fight, or engages in a project, that engagement—if it has continuity—has continuity for the completion of that combat or transaction.
With great respect to the Minister—I have not had time to lay my hand on my Concise Oxford Dictionary—I think that he is seeking to impart a meaning into the word "engages", with the exception of the matrimonial engagement, which does not normally exist in the English language. For that reason I should have been much happier to hear the Minister say that he would give the point further consideration.
Lord Bruce of Donington: The noble Lord has confirmed that it was not his department's intention to go for the single transaction, contrary to the concept that was put forward by the noble Lord, Lord Bruce-Gardyne. On the assumption that the noble Lord is not concerned with engaging in the single transaction, is not the easiest way, for the avoidance of doubt, to accept the word "activities" as put forward in the amendment? It seems a simple way of solving the Government's own problem.
Lord Ezra: Like the noble Lord, Lord Bruce-Gardyne, I have been approached by the Association of Corporate Treasurers. They are concerned—in spite of" what they have seen of the proposed Government amendments—about their position under this proposed legislation. The Bill, while seeking to provide proper safeguards for investors nevertheless does not extend those safeguards to the point of frustrating other activities. There is grave concern among these people that some of the things they do in the normal course of their business could be caught. I believe that the amendment proposed by the noble
54
Lord, Lord Hacking, could go a long way to making them feel more confident that they can nevertheless continue in their present activities without fear of the consequences under this legislation.
Lord Silkin of Dulwich: If the Government rest their case on the words "engages in", it seems to me that they are resting it on sand. I agree with the noble Lord, Lord Hacking, that to say that one engages in an activity cannot reasonably be construed as a continuous activity in the sense that the noble Lord the Minister has suggested. At the same time I do not myself think that the plural which the noble Lord, Lord Hacking, seeks to insert cures the difficulty to which he has drawn attention—quite apart from anything else because of the provisions of the Interpretation Act.
It seems to me necessary for the Government to look at this subsection again and to come up with a better solution to the problem. One is tempted to try to draft on one's feet, but if one did so, one would make a mess of it. I should have thought that the term "normal business", or something similar, might help the Government to find a formula which may solve the problem.
Lord Bruce-Gardyne: Before my noble friend replies, may I say that I am very grateful to him for the reassurance he has been able to give. One will obviously want to study that carefully. However, I notice that he first said that "engages in" could not be construed in terms of "very occasionally". He subsequently said that it could not be construed in terms of "occasionally". It seems to me that one needs to be reasonably clear what weight the Government would seek to put on the word "engages" and the frequency which would be involved.
The noble Lord on the Opposition Front Bench has referred to continuity of activity. That is carrying it a good deal further still. I do not know whether at this point my noble friend can specify this a little more clearly. It seems to me that that is one aspect of his reassurance which will need to be carefully scrutinised.
Lord Lucas of Chilworth: I shall resist the temptation that my noble friend Lord Bruce-Gardyne offers me to speculate on my feet. I hoped to satisfy the noble Lord, Lord Hacking, with the description I gave of how we saw the word "engages". He, however, is not satisfied. I also hoped that he might have come up with an alternative, but he has not done so this evening.
I invite the noble Lord, as I invite noble Lords in all parts of the Committee, to help us because, as I said, we have had enormous difficulties. The alternatives proposed to date have as many difficulties as those that Members of the Committee have posed. For example, the noble Lord, Lord Bruce of Donington, asked: why can we not satisfy ourselves with the word "activities"? Referring to "activities" would we think cast some doubt on whether it was necessary to undertake more than one kind of the investment activity listed in Part II of Schedule 1. For example, would someone be carrying on investment business if he only gave investment advice and did not undertake other kinds of investment activity? Therefore, here is another

55
problem, and I think that the noble and learned Lord, Lord Silkin, appreciated that.
I recognise that the noble Lord, Lord Ezra, still has some doubts. Although I underline that there are very many difficulties, I shall certainly give some further thought to see what can be worked out and to see whether we can find a satisfactory alternative. However, I must say that, in all honesty, I cannot promise to bring back something at Report. If I can, I most certainly shall; if I cannot, then the Members of the Committee will appreciate that we have not found a satisfactory alternative.
Lord Hacking: With the assurances of the noble Lord the Minister that he will give this problem further consideration, that he will receive further represent-ations and that the dialogue is to continue, I am only too happy to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Lord Hacking Lord Hacking had given notice of his intention to move Amendment No. 5:
Page 2, line 9, leave out ("any activity which falls") and insert ("activities which fall").
The noble Lord said: I have already addressed the Members of the Committee on this amendment, and we have heard the noble Lord the Minister reply that he is prepared to consider it. In view of the comments made by the noble Lord the Minister, it is not my intention to move this amendment.
[Amendment No. 5 not moved.]
[Amendments Nos. 6 and 7 not moved.]
Clause 1 agreed to.
Schedule 1 [Investments and investment business]:
Lord Hacking Lord Hacking moved Amendment No. 8:
Page 146, line 7, leave out paragraph 1 and insert ("Shares and stock in the share capital of a company.")
The noble Lord said: We now come to the heart of the definition of "investment", and this is the first of a number of amendments that have been tabled by myself and other noble Lords, including the noble Lord the Minister, which relate to the definition of "investment". This is a purist amendment. Paragraph 1 of Schedule 1 currently reads:
"Shares in the share capital of a company and stock in a company".
Stock, therefore, as drafted, at present is not related to the share capital but to the stock in the company itself. Under that definition this would include stock such as debenture stock and loan stock, which fall to be dealt with under paragraph 2. My amendment, which I have just described as a purist amendment, seeks to make it quite plain that paragraph 1 of Schedule 1 seeks only to deal with the matter of share capital. Hence my amendment reads:
"Shares and stock in the share capital of a company".
Therefore, I believe that my amendment gets rid of that difficulty and that paragraph 1 can fly under its own flag, as can paragraph 2. I beg to move.
Lord Lucas of Chilworth: The noble Lord, Lord Hacking described his amendment as being purist. For myself, I cannot see any difference in substance between what is in the Bill and the noble Lord's amendment, but if the noble Lord believes that his words express the intention behind the paragraph more clearly, I am quite happy to accept his amendment.
6.15 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 9:
Page 146, line 21, after ("acknowledging") insert ("or creating").
The noble Lord said: This amendment excludes from the definition of "investment" promissory notes issued in connection with the supply of goods and services. It reflects concerns, which were expressed by, among others, the Association of Corporate Treasurers, that without it activities necessary for the efficient conduct of inland and international trade in goods and services would inadvertently be included within the definition of "investment business". I beg to move.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendments Nos. 10 and 11:
Page 147, line 15, leave out ("Note") and insert ("Notes) (1)".
Page 147, line 19, at end insert—
(" (2) The reference in paragraph (b) above to a right does not include a reference to a right the exercise of which or failure to exercise which will not or, in the case or a right to vote, cannot result in the person entitled to it acquiring, disposing of, retaining or converting an investment.").
The noble Lord said: I beg to move Amendments Nos. 10 and 11, and to take with them Amendments Nos. 20, 21, 36, 37, 38 and 39.
Lord Bruce of Donington: Amendment No. 21?
Lord Lucas of Chilworth: With the leave of the Committee, I shall move Amendments Nos. 10 and 11, and speak to Amendments Nos, 20, 36, 37,38 and 39.
Lord Bruce of Donington: Perhaps the noble Lord the Minister would clarify the amendments that he is moving. He did say that he would like to move Amendment No. 21, and I am quite happy for him to do so.
Lord Lucas of Chilworth: I think I said that I would speak to it. Perhaps it may be more helpful to the Committee if I took the other group—that is, the amendments beginning with Amendment No. 20—a little later on and now merely dispense with Amendments Nos. 10 and 11, which are a straight-forward pair of amendments. Paragraph 5 of Schedule 1, as drafted, was considered to be wide enough to include such documents as proxy forms, and that certainly was not our intention. These amendments, Nos. 10 and 11, narrow the definition accordingly. If the Committee agrees, perhaps it would be best if I just move Amendments Nos. 10 and 11 at this stage.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendments No. 12 and 13:
Page 147, line 26, leave out ("or").
Page 147, line 28, at end insert ("; or (c) gold or silver.").
The noble Lord said: These two amendments extend the definition of "investments" to include options on gold and silver. The Bill already applies to gold and silver futures; gold and silver options are also traded and are very similar to futures. It has been suggested to us that bringing them within the regulatory regime will make it easier to sell United Kingdom options abroad, particularly in the United States of America. In the light of these recommen-dations, we suggest that the Bill should be extended to cover both these options. I beg to move.
Lord Williams of Elvel: Could the noble Lord tell us whether the Bill also covers options on other precious metals, such as platinum, and other metals traded on the metal exchange, such as aluminium, copper, tin and others?
Lord Lucas of Chilworth: My understanding is that it does. If by any chance I am wrong, then I shall correct it.
My understanding now is that platinum and other minerals are not included since they come under the heading of "futures".
Lord Williams of Elvel: I am sorry to press the noble Lord on this, but as he knows there is a difference between a future contract and options. There are gold future contracts and there are silver future contracts, and there are gold options and silver options. There are also aluminium futures and aluminium options; platinum futures and platinum options; and, indeed, options, so far as I know, on other precious metals. May I ask for a small clarification of this? May I take my time at the Dispatch Box asking for this information in the hope that advice can arrive from a certain quarter to clarify that issue?
Lord Lucas of Chilworth: I think I was right first time in that I am advised that futures on any metal or other commodity are within the ambit of the Bill, but options on metals other than gold and silver are out. This amendment seeks to extend the definition to include options on gold and silver. I do not think the advice I have given the noble Lord is any different.
Lord Williams of Elvel: In that case would the noble Lord consider extending this amendment at a later stage to include options on platinum and other precious metals, which are indeed traded?
Lord Lucas of Chilworth: I must say yes to the noble Lord because I can think of no very good reason for saying no. We shall certainly give consideration to what he has said.
Lord Hacking Lord Hacking moved Amendment No. 14:
Page 147, line 29, at end insert—
("Note. Instruments falling within paragraph 4 above do not fall within this paragraph. It is immaterial whether the investments for the time being are in existence or identifiable.")
The noble Lord said: I hesitate to dub this amendment as a purist amendment in view of the response (although the noble Minister accepted my last amendment, which I described as purist) and in view of the lack of enthusiasm with which the Minister treats my purist amendments, but this amendment has some purity because it seeks to perform the same exercise as my earlier amendments; namely, to clearly divide the definitions under paragraphs 4 and 7 of Part I of Schedule 1 so that, in the terms I used just now referring to paragraphs 1 and 2, each of these two paragraphs and the definitions contained in them clearly fly under their own flags.
This amendment seeks that clarification in the form of the addition of a note to paragraph 87. The Committee will see in Schedule 1, Part I, that many paragraphs are bestowed with a note provided by the Minister's department by way of seeking greater clarity for those paragraphs. However, paragraph 7 is one of the few paragraphs that does not carry a note, and in my submission it needs one.
It needs one because paragraph 7 uses the expression "Options to acquire" a share, which could include an option to subscribe for a share. Options to subscribe are, however, covered by paragraph 4 of Schedule 1. It is important that there should be a clear distinction between investments which fall within paragraph 4 but not within paragraph 7, and vice versa. By way of example, sub-paragraphs 5(a) and 17(2) or 19(2) apply to investments falling within paragraph 4 but not to investments within paragraph 7.
Incidentally, the second sentence in the proposed note under paragraph 7 follows the terms of the note which presently appears under paragraph 4. It would seem to be sensible that that second sentence should also be added, but the important one is the first one, namely:
"Instruments falling within paragraph 4 above do not fall within this paragraph";
that is, within paragraph 7 of this schedule. I beg to move.
Lord Morton of Shuna: In the hope that I might be described as a purist, I support this amendment. It seems essential that things that come under paragraph 4 should not be under paragraph 7 as well, and vice versa. I strongly support the amendment.
Lord Lucas of Chilworth: I assume that the noble Lord wished to deal with Amendment No. 41 at the same time, since they deal with much the same problem—that of overlaps. Amendment No. 41 refers to page 153, line and is concerned with much the same problem of overlap. I am grateful to the noble Lord for raising the matter.
I do not think that in general terms it matters very much whether an investment falls within more than one paragraph. Given the nature of some investments, some overlap may be quite unavoidable; but certainly there are some provisions of the Bill which relate only to particular paragraphs in Part I, and it is clearly important to avoid overlap between paragraphs which are, and which are not, covered by particular provisions. A particular case arises in relation to paragraphs 4 and 7; however, there may be others.

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I do not think that the noble Lord's Amendments Nos. 14 and 41 solve the problem in a totally satisfactory way, but I am happy to undertake to consider the point further. Perhaps we could discuss this and come forward with appropriate amendments at Report stage.
Lord Williams of Elvel: I did not realise that the noble Lord, Lord Hacking, was also speaking to Amendment No. 41.
Lord Hacking: No, I was not. I did not interrupt the Minister, but may I address the Committee separately on Amendment No. 41? In view of the reply given by the noble Minister, I am only too happy to withdraw this amendment.
Amendment, by leave, withdrawn.
Lord Boardman Lord Boardman moved Amendment No. 15:
Page 147, line 37, at end insert—
(" () Any contract for the purchase or sale of currency, other than a contract made or traded on a recognised investment exchange or a contract expressed to be one made for investment purposes, shall be regarded as made for commercial purposes if at least one party to it is a recognised bank or licensed institution within the meaning of the Banking Act 1979.")
The noble Lord said: In the absence of my noble friend Lord Colville, who has to be away for an hour or so, he has asked me to move this amendment, which I gladly do. The Bill in its present form excludes from its provisions contracts for the sale of currencies, or indeed the purchase of currencies, including foreign exchange contracts, if they are made for commercial purposes. A problem in drafting has been to define clearly which transactions are for commercial purposes and which are for investment purposes. I recognise the problem that my noble friend had in trying to find satisfactory wording for this.
The amendment is intended to suggest what I hope might be considered an appropriate wording for making that distinction. It seeks to clarify the position by posing three clear questions. First, if the particular property, which of course is currency in this case, is traded on a recognised investment exchange, it is clearly for investment purposes and comes within the Bill. If the transaction is clearly expressed to be for investment purposes, then again obviously it is for investment purposes and comes within the Bill. But if it is neither traded on a recognised investment exchange nor expressed to be for investment purposes, and if at the time it is made one of the parties to the contract is a bank or licensed institution under the Banking Act, it is deemed to be for commercial purposes and would be outside the terms of the Bill.
This may seem rather complex. Perhaps the easier way of showing the distinction is to say that an ordinary forward currency purchase made by someone so that he can cover goods to be supplied at a future date—a normal trading transaction for a specific purpose—that would be for commercial purposes and was made with a bank or a licensed institution, would be outside the province of the Bill, whereas the purchase of futures on one of the recognised exchanges is clearly within the Bill and would be a trading in investment futures, currency futures, and the like with a recognised exchange. That would be for investment purposes and within the Bill.
I hope that my noble friend may be able to improve on this amendment, but I believe that it shows one method of dealing with this point which is in the Bill itself but which is very unsatisfactory. It gives notes suggesting criteria that can be applied, criteria which I suggest would be extremely difficult, and the amendment proposed by my noble friend clarifies this in a way which I believe would be helpful. I beg to move.
6.30 p.m.
Lord Williams of Elvel: I perfectly understand the motives of the noble Viscount, Lord Colville of Culross, and his noble friend Lord Boardman in moving this amendment. I fully understand that the Bill as drafted poses a major problem in defining what is commercial and what is not commercial. This is the problem that I referred to in speaking to Amendment No. 1 which is bothering the London Metal Exchange and other dealers because the fact of the matter is that dealers, whether in banks (if I may say so to the noble Lord, Lord Boardman), or other institutions, mismatch their forward currency book. Indeed, it is part of the function of a foreign exchange dealer in a bank to mismatch that book.
I am unclear as to whether we are dealing with the dealer who is mismatching on the basis that he wishes to make an investment because he had originally a commercial contract to hedge and he decides to accept that contract, and on the other side he lays that off with somebody else at a different maturity and therefore it becomes an investment contract; or whether we are dealing here in this amendment only with banks which deal only on a spot basis and are required to make a contract for commercial reasons to hedge a foreign currency exposure for, say, an export, as the noble Lord has indicated, and which lay off that contract on exactly the same maturities with other financial institutions; or whether we are dealing with something broader. I am unclear about the whole thrust of paragraph 8 of the schedule, and I am afraid that I am somewhat unclear about the amendment moved by the noble Lord, Lord Boardman.
Lord Denning: I should like to support this amendment. It is quite clear that there will be difficulty in applying these notes as to futures. In view of that this amendment would enable people to solve the problem without any difficulty. So in order to save all sorts of difficulties and arguments in the future it will be a good thing to have this amendment. I hope that the Committee will support it.
Lord Bruce-Gardyne: I too should like to support my noble friend's amendment, but I should like to raise one query about the stipulation that one party is to be a recognised bank or licensed institution. I have the feeling that in the case of commercial transactions of the kind which are designed to be covered by the amendment industrial and other non-financial companies might well not normally have a bank or licensed institution, within the meaning of the Banking Act, as the opposite party in the transaction. Therefore even the amendment as it stands might be drawn too tightly to meet the needs of genuine commercial transactions.
Lord Boardman: I am grateful for the support from the noble and learned Lord, Lord Denning. I note the points made by the noble Lord, Lord Williams, and by my noble friend Lord Bruce-Gardyne. Whether my noble friend the Minister will feel able to extend the definition to meet my noble friend's point I know not. In practice the definition of one party being a bank or a licensed institution under the Banking Act is adequate for all practical purposes. One thing I am quite certain it is desirable to do is to ensure that there is clarity so that people know when these transactions are entered into, whether within the Bill, or the Act as it will be, or outside it. That I hope would be achieved by this amendment or something on similar lines.
Lord Lucas of Chilworth: I am glad that my noble friend Lord Boardman has explained so clearly what is worrying him. However, the proposed amendment would exempt futures contracts for currency whenever one of the parties was a bank or licensed institution, irrespective of the customer and irrespective of the size of the transaction. I think this goes much too far. It appears to me that the amendment proposes to remove from the protection offered to the investor by this Bill any futures contracts in currency entered into by a bank or a licensed deposit taking institution. If they make contracts with private investors, there will be no statutory protection of any kind. As I have said, this goes too far, I think there is a difference because the intention of the Bill is not to interfere with genuine commercial contracts, in the normal sense of a commercial contract which has no investment purpose.
The problem that paragraph 8 seeks to tackle is that many future contracts made for investment purposes (which include hedging and speculation) are identical to forward delivery contracts where the intention of the parties is that delivery is contemplated. The point made by the noble Lord, Lord Williams, and by the noble and learned Lord, Lord Denning, with regard to dealers who mismatch their books and so hedge their commercial contract is that the definitions are designed to provide the basis of the Bill's requirement that those offering the future contracts defined in paragraph 8 will need to be authorised. Paragraph 17(2) clarifies those who do not need to be authorised. But as I said, the amendment goes too far.
I do not accept that the amendment offers the clarity that noble Lords wish. We believe, for example, if one took an agricultural contract for physical commodities, that if they were expressed in the form described in note (3)(c), that would not be conclusive that they are investments, because each of the indications should be interpreted together. You cannot take them separately. The more the indications point towards an investment purpose, or the more they point, as they well might, to a commercial purpose, the stronger is the pointer as to the category of contract. The indications are pointers, but they are not proofs.
I am quite happy to give further consideration to this matter, but I have to say, as I have before, that I can see no easy solution, since we have examined this previously and we have had consultations. In the light of what I have had to say, if any noble Lord wishes to
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consult even further, let us do that to see whether between us we can find something a little more appropriate for a later stage in the Bill.
Lord Williams of Elvel: Perhaps I may intervene on this point. I agree with the noble Lord, Lord Boardman, that there is a problem here. Personally, I am not entirely happy that his amendment actually deals with it, and in that I join with the noble Lord the Minister. Nevertheless, there is a problem. I think one has to recognise the problem, which is that one starts off with a clear commercial transaction and at the end of the day one may have a series of transactions linked to the original commercial transaction which, in the context of the Bill, defines investment. I think that is the problem which perhaps the Government may like to think about in the intervening period.
Lord Boardman: I am grateful to my noble friend for saying that he will look again at this matter. Certainly we shall see whether, with him we can find some wording which meets his reservations and at the same time meets the very real difficulty which I believe otherwise arises. With that, I beg leave to withdraw the amendment
Amendment, by leave, withdrawn.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 16:
Page 149, line 17, at end insert—
("Note. This paragraph does not apply to the interests of members of an occupational pension scheme in the investments held for the purposes of the scheme.").
The noble Lord said: I beg to move Amendment No. 16, the purpose of which is to make clear that rights under an occupational pension scheme are not to be regarded as investments for the purpose of the Bill. If they were regarded as investments, an employer promoting an occupational pension scheme to his employees or advising his employees as to their rights under a scheme might have to be authorised. That is not what is intended, as I think the amendment makes clear. I beg to move.
Lord Williams of Elvel: This is a useful clarification which the Government are putting forward. I wonder whether there are further clarifications that are required on this particular paragraph, paragraph 11 of the schedule. The noble Lord has pointed out that a member of an occupational pension scheme has an interest in the investments held for the purposes of the scheme but such an interest should not be deemed (in the words of his amendment) to be an investment.
Leaving aside the whole question of the role of trustees and whether they have an interest in occupational pension schemes which, for the purposes of this Bill, should be deemed to be investments, may I perhaps widen the discussion and ask him whether other people who may have rights to and interests in anything which is an investment which falls within any other paragraph of this part of the schedule, will be caught? He talks about members of occupational pension schemes. What about, for instance, heirs under a testament? Suppose that a noble Lord decides to leave in his will an investment which falls within that part of the schedule to his son or his daughter or

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whoever it may be. Is that to be construed as the son of the daughter having an interest in the investment which falls within this part of the schedule?
I do not mean to raise that in a mischievous way. I am simply trying to illustrate a point that I made on the first amendment: that we have enormous difficulty in construing these points. My noble and learned friend Lord Silkin no doubt will wish to comment upon some of the trustee aspects.
Lord Lucas of Chilworth: As I understand it, there are already provisions with regard to the beneficiaries and I believe they are covered under another Act so far as the transfer of their interests is concerned where a company or an occupational pension scheme is in force. I do not see that there is any difficulty there. The interest merely transfers because they have the right which is set up, I think, under one of the investment protection Acts or, it may be, in one of the company pension and investment Acts. It escapes my mind which Act it is, but I recall that there is provision which determines the various interests of people such as the noble Lord has described.
I am advised that an interest in investments under a will or a trust will constitute an investment, but unless it is or can be bought or sold there would be no investment business; so that the transference to which I referred earlier applies.
6.45 p.m.
Lord Ezra Lord Ezra moved Amendment No. 17:
Page 149, line 17, at end insert—
(" . Real property of any type or description, except residential property, wherever situated and whether or not subject to encumbrances.").
The noble Lord said: I beg to move this amendment. It is a very simple one. It aims to bring real property, except residential property, within the scope of Part I of Schedule 1. The reason for that is that a very large amount of money is currently invested in property. It is estimated to be something of the order of £12 billion. So far as pension funds are concerned, some 10 per cent. of their investments are in property. The National Association of Pension Funds is very keen that this form of investment should get the same sort of protection and measure of benefit as come to the safeguards provided for other forms.
I recognise that there is great difficulty in identifying property obtained for investment purposes and property obtained for other purposes. We have simply left out residential property in the proposition, but there could be other exemptions. I hope that in the circumstances the noble Lord will be prepared to have a look at this matter and come forward with some suggestions at a later stage. I beg to move.
Lord Taylor of Gryfe: I should like to support the amendment moved by the noble Lord, Lord Ezra. He has already indicated the volume of investment from pension funds that is in property. It is very considerable. Perhaps due heed should be paid to the respresentations of the National Association of Pension Funds, who have drafted this particular amendment which stands in our names. It is a
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considerable concern of theirs that in meetings of pension fund trustees, where invariably you have investment managers round the table, you have an investment manager on UK securities, perhaps another one sitting there with international securities, and a property adviser advising the trustees. But while the securities advisers obviously will come within the scope of the Bill and will be supervised, the man who is dealing with property, in which there is a very considerable investment, will be free from any such supervision under the Bill.
It may be said that you take advice from the Royal Institute of Chartered Surveyors—and this amendment is not a reflection on the RICS—but at the same time it should be emphasised that this is a very considerable area of investment which, under the Bill, is not protected and is not covered. For those reasons, I support the amendment moved by the noble Lord, Lord Ezra.
Lord Marsh: I read this amendment with interest and I think everyone will sympathise with the motives behind it. I mentioned earlier that I am chairman of the trustees of a fund which for historical reasons, because it is a very old hospital, is 80 per cent. invested in property. It is invested in small "villages" like Watford, of which it has owned large chunks for several hundred years.
On the other hand, it seems to me to raise a very serious problem, because nowadays any company, whatever the nature of its business, which is contemplating building an office will, in deciding upon the office, have in mind the whole time that it is a very valuable investment in which it is engaging. I am not sure whether that would be included as well, but with virtually every office that is built, the discussions which take place and the decision as to what sort of office to have—whether to include air conditioning and so on—are very frequently determined not by the needs of the office and the company at that time, but by the investment potential at some future date. So having read this amendment, and understanding the desire to remove an anomaly, it seems to me that the solution suggested would create even bigger anomalies.
Lord Morton of Shuna: I should like to support the basic idea put forward by this amendment of the noble Lords, Lord Ezra and Lord Taylor, as they explained it. But I have considerable reservation about the form of wording, especially the exception of residential property which could be a very valuable income-producing investment. Therefore, I merely wish to give general support to the idea without any commitment to the wording.
Lord Lucas of Chilworth: I am grateful to the noble Lord, Lord Ezra, and the noble Lord, Lord Taylor of Gryfe, for their explanation and I am sorry that just before dinner I should, perhaps, strike a jarring note, because I am, in fact, going to advise the Committee to reject this amendment.
The general principle underlying the definition of "investments" in the Bill is that it excludes physical property which a potential purchaser can inspect and which passes under his direct control on purchase. A

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person wishing to buy a building can have it surveyed and can establish its physical condition, the cost of any essential repairs and the likely maintenance costs. Once he has purchased it, he will be able directly to influence at least that part of its value which relates to its structural condition. This distinguishes real property from investments as defined in the Bill, where the purchaser acquires rights, directly or indirectly, in underlying assets which he generally cannot inspect or control.
Two arguments have been advanced for including real property within the scope of the Bill. The first is, as the noble Lords on the Alliance Benches have stated, that for large fund managers, such as insurance company and pension fund managers, property is an alternative store of value to investments as defined in the Bill, and it should therefore be regulated in a similar fashion. The second is that property is frequently promoted and purchased as an "investment" in the sense of an asset which it is hoped to sell subsequently at a profit.
The problem with both these arguments is that they do not present a case for drawing the line at real property. I think that is the point which the noble Lord, Lord Marsh, made. Fund managers may have other stores of value available, such as works of art. A wide range of things, such as stamps and limited edition porcelain plates, are promoted on the basis that they will rise in value and they are certainly bought in that expectation or at least that hope. It would be wholly impracticable to extend the scope of the Bill so as to cover all these areas.
Furthermore, to include real property within the definition of investments would greatly increase the range of businesses to which the Bill would apply, to no clear advantage. For example, even with an exclusion for residential property—and neither noble Lord has really explained why this should be excluded—the mainstream activities of a large number of estate agents, property management agents, solicitors who undertake commercial conveyancing and all companies of that kind would be brought within the Bill's scope and I must say that at the present time I cannot see the benefit of that happening.
To what sort of rules should they be subject? Clearly, rules drawn up to cover, for example, the management of a portfolio of shares would be wholly inappropriate to the management of an office block as such. In short, we believe that what has been called the "touch and see" principle is the right one to adopt when defining investments. The provisions of the Bill are, I believe, inappropriate for physical objects and real property which pass under the direct control of the purchaser. This has been discussed at some length, but we remain convinced of the inappropriateness of this Bill having real property included, for the reasons which I have given. I urge the noble Lord to withdraw his amendment, but certainly if he does not so wish I would ask the Committee to reject the amendment.
Lord Silkin of Dulwich: I find that reply a little disappointing. I agree with my noble friend Lord Morton that the form of the amendment is not satisfactory. Nonetheless, the difficulty to which it draws attention is a very real one. I speak from experience as a member of the governing body of
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hospitals which, fortunately for them, had both real property and investments; and also as a former member of the governing body of a large residential estate which then, after the passing of the Leasehold Reform Act, went into equities as well.
The kind of advice that they were getting from two different sources—the experts in real property and the experts in equities—was very similar in kind. They were looking at the same kinds of consideration. They would not have made any distinction between the two. They were not, however, investing in stamps or works of art and would not have considered doing so, so I should not have thought the reality of that comparison a very close one. I hope the Minister will look at the amendment on the sort of basis that I have suggested is the reality. You get bodies which are changing from one to another according to the market and taking the advice of their experts.
Lord Ezra: I am very glad that this issue has been given an airing. It is obviously an omission from the Bill. The noble Lord, Lord Lucas, has explained why it has been left out and other noble Lords have expressed different views. At this stage I should not like to press the amendment, but will reconsider what we do at further stages. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Brabazon of Tara: I think that we have reached a suitable moment to adjourn. In moving that the House do now resume, perhaps I may suggest that we do not return to the Committee stage of this Bill until eight o'clock. I beg to move that the House do now resume.
House resumed.
[The Sitting was suspended from 6.58 to 8 p.m.]
House again in Committee on Clause 1.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 18:
Page 149, line 26, at end insert—
("or with a view to a person who participates in the arrangements buying, selling, subscribing for for underwriting investments.").
The noble Lord said: With the Committee's approval I should like to speak also to Amendment No. 19. The purpose of the first amendment, Amendment No. 18, is to ensure that the provision of deal matching arrangements which relate to investments generally or to a particular class of investment is to be regarded for the purpose of the Bill as an activity constituting investment business. It will have the effect that an investment exchange will be regarded as carrying on investment business and will therefore, if it is not a recognised investment exchange, have to be authorised.
The second amendment simply provides that a person is not to be regarded as arranging deals in investments merely because he makes arrangements with a view to himself dealing with another person—in other words, it removes any overlap between

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paragraph 12 and paragraph 13 of Schedule 1. The amendment is in response to a point raised by many groups, including the Law Society. I beg to move.
Lord Morton of Shuna: With regard to Amendment No. 18, it would appear to me, perhaps wrongly, that there is a printing error in the last line of the amendment, and that the second "for" should read "or". I assume that that is what is intended. No doubt the noble Lord will be able to tell me because,
"for for underwriting investments",
does not seem to be very good English.
As to Amendment No. 19, to which the noble Lord spoke, my difficulty is to understand what it means. It reads:
"This paragraph shall not be construed as applying to anything done by a person with a view to another person entering into any such transaction with the first-mentioned person if the latter enters or is to enter into it as principal or as agent for either party".
If one tries as a simple person, as I assume myself to be, to give a name to it:
"anything done by Smith with a view to Jones entering into any such transaction with Smith [I presume] if the latter"—
is that Smith again?—
"enters or is to enter into it as principal or as agent for either party".
Who is either party? Is it Smith or Jones? Who is it? It is very difficult to understand:
"Anything done by Smith with a view to Jones entering into any such transaction with Smith if the latter"—
Is that Smith?—
"enters or is to enter into it as principal or as agent for Smith or Jones"—
It is very difficult to understand just what is meant by that amendment, or note or whatever it is. No doubt the noble Lord will clarify that.
Lord Swinfen: I may be somewhat naive but I have not come across a Bill before with notes in it as part of the Bill. I should have thought that this was extremely bad parliamentary drafting. Can my noble friend tell me whether, when the Bill becomes an Act, the note will be part of the law? How is it to be used? It strikes me as most extraordinary.
Lord Denning: I share the amazement at the obscurity of this clause. It certainly ought to be made better as the note is part of the legislation. Let it be made clear at any rate.
Lord Lucas of Chilworth: Three points have been made. The noble Lord, Lord Morton of Shuna, is quite correct in his first point. There is a typographical error. The line should read,
"buying, selling, subscribing for or underwriting investments".
With regard to the second point, I believe in fact that it is "Smith". However, since it is not abundantly clear, the best thing I can do is to take it back and see if we cannot rewrite it so that it is abundantly clear.
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With regard to the point made by my noble friend Lord Swinfen, I answered this question when I responded to the point of the noble and learned Lord, Lord Denning, much earlier this afternoon. The note, novel though it may be, is part of the statute.
[Amendment No. 19 not moved.]
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 20:
Page 149, line 35, at end insert—
("Notes

(1) This paragraph does not apply to

(a) advice to the directors of a body corporate in connection with the reorganisation of the capital of the body or of another body corporate in the same group;

(b) advice to a person in connection with his formation of a body corporate or establishment of a collective investment scheme;

(c) advice as to the legal implications of an offer of investments or as to whether there is a reasonable basis for information given or proposed to be given in connection with such an offer.

(2) The reference in this paragraph to rights conferred by investments does not include a reference to any right the exercise of which or failure to exercise which will not or, in the case of a right to vote, cannot result in the person entitled to the right acquiring disposing of, retaining or converting an investment.").

The noble Lord said: I should like to speak also to amendments Nos. 36, 37, 38 and 39, all four amendments being in the name of the noble Lord, Lord Hacking.
Lord Hacking: Perhaps I may interrupt the noble Lord. I think Amendment No. 36 does not fit into this category but Amendments Nos. 37, 38 and 39 do.
Lord Lucas of Chilworth: I am most grateful to the noble Lord. This is a matter of grouping and we can return to the noble Lord's amendment at the appropriate time.
With regard to the Government amendment, we received a number of representations to the effect that the definition of investment advice in Schedule 1 was too broad. It was suggested, for example, that it might include advice about the exercise of voting rights or advice by an accountant about the reasonableness of financial projections in a prospectus. It might include advice to the management of a company about its capital structure. The definition was not intended to be so broad and the amendment to paragraph 15 of Schedule 1 narrows it so as to exclude these and similar activities which cannot in any real sense be considered to be investment advice.
I agree with the proposition underlying the amendments in the name of the noble Lord, Lord Hacking, to which I have just referred. Legal and accountancy advice given to a person in connection with deals in investments which he arranges should not be regarded as investment business. In our view, however, such advice cannot be regarded as itself coming within the definition of making arrangements with a view to someone else dealing. We do not therefore consider that this amendment is necessary.

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The noble Lord's other amendments all concern paragraph 21. Here I regret that I cannot agree with the noble Lord's proposals. The first three amendments would greatly widen the exclusion. I do not think that managing investments and arranging deals in investments is a necessary part of a non-investment business or profession. There are already exemptions for trustees and we are proposing to extend them to personal representatives. I think it would create an undesirable loophole to go further. Similarly, we would be opposed to excluding all legal, accountancy or actuarial advice.
The Government amendments already narrow the definition of investment advice so as to exclude advice about matters which are not strictly related to investment. I do not think that we should make any further general exemption, although I have to say that if any Member of the Committee puts forward cogent reasons why we should make any further exemptions, I shall be quite happy to look at detailed points.
The final amendment of the noble Lord, Lord Hacking, would, I fear, actually tend to narrow the interpretation of what is necessary advice. In our view advice which ought properly to be given as a consequence of non-investment business or professional advice is necessary. To suggest otherwise would narrow the concept unduly. I am sure that is not the noble Lord's intention.
Lord Grimond: I rise full well knowing that I am somewhat ignorant of the subject, but like many people who are more learned in the law than I am I now find the state of this Bill considerably confusing. If these amendments are dealt with in the manner suggested by the Government, how does this leave the prospectuses and takeover bids? This seems to be a highly relevant matter, bearing in mind what has happened with Distillers and Guinness. It may not be relevant to this particular part of the Bill, but I had rather hoped that they would fall within the compass of the Bill. It seems to me that they constitute advice and encouragement to people to invest.
Recently we have seen made wild promises which cannot be fulfilled, and I do not see why they should not come within the Bill. However, I am not at all clear, if the amendments are dealt with as recommended by the Minister, whether or not they will be covered by the Bill. I should have thought that they would fall within paragraph 15 in Part II of Schedule 1, but the Government amendment may have so narrowed it that they no longer do so.
I should be grateful for some clarification as to whether the sort of statements made by companies in the newspapers and by circulars to shareholders advising them to accept or reject a takeover fall within the definitions in these amendments and therefore would be subject to the regulations which this Bill imposes.
Lord Hacking: The noble Lord the Minister was kind enough to refer to amendments that I have tabled, and I am more than happy to comment on those amendments at the same time as referring to the
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Minister's Amendment No. 20. I can tell the Committee that I will be saving any further discussion on Amendments Nos. 37, 38 and 39, tabled in my name, because in view of the amendment tabled by the Minister I shall not be moving them. It was, therefore, most convenient of the Minister to comment on my amendments when speaking to Amendment No. 20.
There are two problems of particular concern to members of my profession—that is, solicitors of the Supreme Court. There are many other problems, but for the purposes of our present discussions there are two problems that arise when solicitors of the Supreme Court, or other professional or non-professional men acting as trustees, are under an obligation under the terms of their trusteeship to transact arrangements which would fall under paragraph 13 and which form one of the definitions in Part II:
"Activities constituting investment business".
This comes under the heading which 1 can conveniently describe as, "Arranging deals in investments."
Concerning the role of trustees there is a certain exemption set out in paragraph 20 in Part III, and I understand the Government will shortly be dealing with that. I do not propose to make any further comments concerning trustees and the application of paragraph 13, and we can therefore leave that over.
That leaves me to deal with the other matter which is of concern to my profession and, I believe, also to the accountancy profession—advising on investments. In his amendment the noble Lord has dealt with the problem of solicitors and accountants giving certain advice, legal and so on, and ancillary advice concern-ing investments. The most convenient course, therefore, would be for me to consider that amendment—because I had no opportunity of considering the Minister's amendment until I saw it on the Marshalled List—and discuss it with the Law Society to see whether it meets the worries that I attempted to cover in my Amendments Nos. 37, 38 and 39. These were designed to protect the professional adviser, such as a solicitor or an account-ant, giving advice on investment matters, from falling under the provisions of the Bill and all that that entails; although I do not know whether I went too far or not far enough.
Therefore, on the basis of the amendments tabled by the noble Lord I leave this matter for further consideration. I am not asking the Minister to consider the matter further, but asking leave, as it were, to consider it further with the Law Society.
8.15 p.m.
Lord Denning: It is quite obvious that paragraph 15 is too wide because it does not protect professional men such as auditors, solicitors, and the like. Amendment No. 20 is a good amendment. There may be questions on the detail of it and so in a way it would perhaps be a good thing to think again a little about it in order to obtain agreement on all sides. However, certainly the objective of the amendment seems to be very good and therefore I support it.
Lord Lucas of Chilworth: I am grateful to the noble Lord, Lord Hacking. I shall, in fact, move the

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amendment in the fond expectation that the Committee will agree. No doubt the noble Lord will discuss the amendment with us if he finds that it does not meet what he is seeking. I apologise to the noble Lord for including in my opening remarks points which he wishes to raise separately on Amendment No. 36. We can come back to that.
The noble Lord, Lord Grimond, raised one important issue. I am sure he will accept that I do not wish to be difficult, but the prospectuses and offer documents are covered in parts IV and V of the Bill, which we shall reach later. It would perhaps be best for us to consider at that stage the points he raised. With that I beg to move Amendment No. 20.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 21:
Page 149, line 35, at end insert—
() This paragraph does not apply to—
() Advice given by an auditor in connection with reports required to be given by him under the provisions of the Companies Act 1985;
() Advice given to the directors of a body corporate in connection with the issue by the body of securities of the body or of another body corporate in the same group;
() Advice given to a person who prepares or issues a prospectus or similar document where that person is an authorised person under this Act.")
The noble Lord said: I am sure that the Committee will agree with the noble and learned Lord, Lord Denning, that paragraph 15 of Schedule 1 is far too wide and that the Minister was very wise in his Amendment No. 20 to indicate some qualifications to the broad generality contained in paragraph 15 which refers to,
"Giving, or offering or agreeing to give, advice as to the purchase, sale, subscription for or underwriting of investments or as to the exercise of rights conferred by investments".
I am most grateful for the efforts of the noble Lord, Lord Hacking, to protect, to some extent, the interests of his own profession, the interests of my profession and, perhaps, of the actuarial profession. I have approached the matter from a different angle, and I must say immediately that the amendment that I propose to move could possibly be a good deal better. We received the amendments of the noble Lord comparatively late last week and the whole bulk of his amendments needed a fair amount of digesting over the weekend. In Amendment No. 21,I am seeking to extend the scope of the noble Lord's amendment which we have just passed, and he will understand that it is done in an endeavour to be constructive and to close some further loopholes that might conceivably have an adverse effect perhaps on the legal profession but most certainly on the auditing profession.
This amendment indicates that paragraph 15, which I have just read to the Committee, should not apply to:
"Advice given by an auditor in connection with reports required to be given by him under the provisions of the Companies Act 1985".
The noble Lord may inform me that that particular part of the amendment is unnecessary. He may say that nowhere in the proposed Bill is it implied that the
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Companies Act 1985 ought to have specific mention. He may say that it probably stands on its own feet.
However, we are talking of notes, as the noble and learned Lord, Lord Denning, has indicated; and it is a matter to which the noble Lord, Lord Swinfen, referred. Presumably notes are for the avoidance of doubt and to lay down the principles which should guide the courts—should these matters ever come to court—on the precise construction to be given not only to certain clauses but to certain words. I should have thought that the noble Lord could accept in advance the words that have been put down in respect of the first sub-paragraph.
The next sub-paragraph of my amendment reads:
"Advice given to the directors of a body corporate in connection with the issue by the body of securities of the body or of another body corporate in the same group".
The noble Lord may perhaps think that this matter is covered by sub-paragraph (b) of his Amendment No. 20, which refers to:
"advice to a person in connection with his formation of a body corporate or establishment of a collective investment scheme".
The Committee will observe that my sub-paragraph differs from that of the noble Lord's in that it does not refer to,
"the formation of a body corporate"
but to:
"the issue by the body of securities of the body or of another body corporate in the same group".
The last part of Amendment No. 20 refers to:
"Advice given to a person who prepares or issues a prospectus or similar document where that person is an authorised person under this Act".
Once again, it will be noted that this particular sub-paragraph supplements but does not duplicate sub-paragraph (c) of Amendment No. 20, to which the Committee has just agreed.
I know that this amendment is a little complex but it is designed to form a coherent whole with the amendment of the noble Lord which the Committee has just accepted. I hope that the noble Lord will agree with it or at any rate that he will agree to consider its implications. In this case, as in a number of other cases, owing to the shortness of the notice that we have had concerning the scope of revisions of this Bill—and the noble Lord himself may be the first person to agree—it may well be that we shall have to refer to it on Report. I beg to move.
Lord Denning: I should like to support this amendment and to take the same point as has my noble friend Lord Bruce of Donington. This is a necessary amendment, because the present words of paragraph 15 are much too wide, but it has to be fitted in with the amendment to which we have just agreed. There is a good deal of overlap at the moment, so perhaps I may suggest that it would be as well not to press the amendment now but to ask the noble Lord, Lord Lucas, to bring in at Report stage a comprehensive clause dealing with this question of professional men's advice.
Lord Lucas of Chilworth: The noble Lord may quite easily have suggested a number of exemptions from the definition of "investment advice" additional to

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those which we have just been discussing, and of course we discussed the background, purpose and effect when we discussed Amendment No. 10. However, at this time we do not consider that advice given by an auditor is caught. The Government's Amendment No. 20, which we have just discussed, makes clear that legal and accountancy advice given in connection with preparing a prospectus is not investment advice. To write in more specific exemptions might suggest that it was covered and hence that similar activities were covered, and I think that would be unfortunate.
Advice on issuing shares is more marginal. We do not believe that it is covered by the definition of investment advice because of the exclusion for a company which issues its own shares. I think that the noble Lord, Lord Bruce of Donington, supported as he was by the noble and learned Lord, Lord Denning, made the point that the matter is not beyond doubt, and I think it would be quite proper if we gave further consideration to this point in the light of what the noble Lord has had to say. Perhaps, therefore, with that assurance he would care to withdraw his amendment.
Lord Bruce of Donington: I have just one further small query. In his concluding remarks the noble Lord said that his own amendment, Amendment No. 20, dealt with the question of prospectuses. I am perhaps shortsighted, but I did not see any specific reference in Amendment No. 20 to the matter of prospectuses. If I may say so with respect, I think that it is my own amendment, Amendment No. 21, that actually mentions prospectuses.
We are all trying on the most constructive basis to make this Bill as perfect as we can, and I willingly accept the assurance by the noble Lord that this point will be considered further on Report and that in the meantime the noble Lord will give these matters consideration. I ask leave of the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hacking Lord Hacking moved Amendment No. 22:
Page 150, line 5, after ("principal") insert ("or as an agent, or as a trustee or as a personal representative").
The noble Lord said: Having seen the very large grouping as suggested in the groupings that have been helpfully prepared by the Minister's department, I wonder whether we might conveniently deal with all six amendments—if I have my arithmetic right—at the same time; that is, Amendment No. 22, which I am now moving; Amendment No. 23, standing in my name; Amendment No. 32, tabled in the name of the Minister, and Amendments Nos. 33, 34, 35 and 36, which also stand in my name. That makes a total of seven amendments and not six.
Having thought about the matter, I think it would be convenient, though they do not fit entirely into the—I am looking at the Minister, who is glancing towards me in a somewhat perplexed fashion; but I shall continue unless the noble Lord rises to his feet.
Lord Lucas of Chilworth: Not Amendment No. 36.
Lord Hacking: That is quite right; I have gone one too far. If I may come back to my previous position, my proposal is that the Committee should deal with the six amendments, which, for the sake of clarity, I shall repeat are: Amendments Nos. 22, 23, 32 (No. 32 is the amendment moved by the noble Lord the Minister), 33, 34 and 35.
There have been a number of worries about the role of trustees, personal representatives and in certain cases agents concerning the application of investment activities as defined in Schedule 1, paragraph 13, "Arranging deals in investments", paragraph 14, "Managing investments", and paragraph 15, "Advising on investments". In various ways my amendments attempt to deal with those.
Amendments Nos. 22 and 23 are to paragraph 17, which is the first of the proposed excluded activities; namely, activities when a person is dealing on his own account. I was seeking here to attach not only to deals in which the principal was dealing on his own behalf but to deals in which he was acting as an agent, a trustee or a personal representative. That was the purpose of those amendments. Amendments No. 33, 34 and 35 tackle the problem of the application of the exemption for trustees. The Bill concentrates only on the role of trustees and not of personal representatives or agents.
In an amendment which, unfortunately, I did not have an opportunity to consider before I saw the Marshalled List, the Minister proposes to take out of the Bill paragraph 20 in its entirety and to replace it with a new and much more widely based paragraph which has the title, "Trustees and personal representatives". It seems to me that the appropriate course for the Committee is to hear the Minister on Amendment No. 32. I anticipate that, having heard him on that, I shall not wish to press any of my amendments to which I have drawn the Committee's attention.
I should mention that my Amendment No. 33 is one which should not have passed through the net, before the point is taken against me. It seems to be an attempt to change the title of paragraph 20. It is not an appropriate amendment. I intended that it should apply to the second line down in the paragraph, which refers to "trustee", and not to the title, "Trustees". In any event I should be debarred from attempting to move it on that technical point.
I hope that those observations are helpful. Subject to other Members of the Committee wishing to participate in the discussion, I would wish to hear what the Minister has to say about Amendment No. 32.
8.30 p.m.
The Lord Advocate (Lord Cameron of Lochbroom):We have received a number of representations suggesting that paragraph 20, which is the object of the amendment in my noble friend's name, was too narrow. On reflection we agree that in order properly to discharge his functions a trustee or a personal representative will have to engage in certain activities within paragraphs 13 and 15. It is to that end that Amendment No. 32 is directed.
When the amendment was being drafted we took the view that an exclusion from paragraph 12 was not

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necessary because trustees and personal representa-tives deal as principals and therefore benefit from the exclusion in paragraph 17. However, since the amendment was tabled it has been suggested that some trustees (in particular bare trustees) deal as agents and not as principals, and that of course is part of the point to which Amendments Nos. 22 and 23 are directed. We are looking into that point. If on further consideration it is concluded that an exemption from paragraph 12 is desirable, an amendment to that end will be brought forward.
I think that Amendment No. 32 meets most of the points raised by the noble Lord, Lord Hacking, in his amendments. The only amendment on which I would take issue with him, perhaps, is No. 35, in which he proposes to delete the provision which removes a trustee's exemption if he is paid for managing investments in addition to whatever he is paid for acting as trustee. The purpose of this provision is to ensure that a professional man who provides the service of managing investments is subject to authorisation and regulation under the Bill, even if he does not hold himself out as providing such a service, and additional remuneration is simply a convenient test of determining whether he is acting just as a trustee or instead is providing a service of managing investments. I would suggest to the Committee that that test should be retained.
Perhaps with that explanation and the undertaking that I have given in relation to paragraph 17, the noble Lord will feel able to withdraw his amendments.
Lord Silkin of Dulwich: I was hoping that the noble and learned Lord would give a more detailed explanation of the wording of Amendment No. 32 than merely to say that there had been representations and it has been drafted to meet them. Unfortunately, not having been a party to those representations I am not wholly clear as to what they were and what the amendment seeks to do in relation to them.
There are one or two points that puzzle me directly, in addition to the general question of the meaning of the amendment. Perhaps I may deal with them most easily by referring, as other Members of the Committee have done, to a position that I hold as one of two executors and trustees of a will, where the other one is an accountant. As part of his task he prepares annual accounts, for which he is remunerated out of the estate by virtue of his functions as accountant. In the course of carrying out those duties he gives investment advice, I suppose, strictly speaking, to me, although perhaps to some extent to the beneficiaries. He and I act upon that advice if I agree with it. He does not get remunerated separately for giving that advice, because his duties as accountant, and what he is paid for that, embrace the concept that he will give that advice from time to time. Does he come within the exclusion? If I act together with him, following his advice, do I come within the exclusion?
Lord Cameron of Lochbroom: I think I can satisfy the noble and learned Lord that in accepting the advice he would not be acting with him; the advice would be given to him and he would be acting as a trustee.
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The issue about the individual who receives remuneration would depend upon the capacity in which he receives the remuneraton. If he is a so-called professional trustee, who may be paid a higher fee than other trustees by virtue of his investment expertise, he would not benefit from the exclusion. If they were not remunerated separately but merely as a trustee, they would not require to be authorised and would fall within the exclusion. That is the point that I was making earlier to the noble Lord, Lord Hacking, as a means of determining the difference between a trustee who is excluded and the person who offers his services as trustee on the basis that he can give investment advice to the trust.
Lord Hacking: I am grateful to noble Lords who have participated in the debate and to the noble and learned Lord the Lord Advocate. On the undertaking given by the noble and learned Lord the Lord Advocate kindly to reconsider the problem of a bad trustee and how he acts in the capacity of an agent, I am only too happy to withdraw this amendment, which I now formally do, and not to move any of the other amendments to which I have drawn the Committee's attention.
Amendment, by leave, withdrawn.
[Amendment No. 23 not moved.]
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 24:
Page 150, line 11, after ("as ") insert ("engaging in the business of").
The noble Lord said: I beg to move Amendment No. 24 and with it to speak to Amendments No. 25, 26, 27 and 29. I do not think I need detain the Committee long with a detailed exposition of the effect of these amendments all of which result from representations which have been made to us by the Association of Corporate Treasurers and others. They have all suggested that the Bill inadvertently catches within the definition of "investment business" the ordinary commercial activities of corporate treasurers. Those activities are concerned solely with the financing of the commercial activities of non-investment business. In general, the Government accept that they should not be brought into the scope of the Bill.
A blanket exemption for the activities of corporate treasurers would go too wide. It would enable them to engage in what on any interpretation would be regarded as investment business without authorisation and the protection for investors that that brings. Such persons clearly engage in a wide range of activities to which the provisions of the Bill are inappropriate but which on the current wording would be caught. The amendments therefore seek to exclude those activities from the scope of the Bill. We believe that the amendments meet the great majority of substantive concerns which have been put to us by the association and others. We are prepared to consider any further representations as to the precise scope of the relevant provisions, if that is required. I beg to move.
8.45 p.m.
Lord Williams of Elvel: I must confess that I am at a disadvantage here because we did not receive the Government's groupings of this series of amendments. I did not realise that the noble Lord was going to speak to Amendments Nos. 24 and 29, which seem to raise certain issues. If we did receive them, they have been mysteriously omitted from the copy that I have. If the noble Lord, Lord Brabazon, doubts me, I will show him the copy that I have in my hand.
Amendment No. 24 is an amendment to Schedule 1, paragraph 17(1)(b). As I understand it, the Government suggest that somebody not to be excluded from paragraph 12 has to hold himself out as engaging in the business of buying investment as opposed to buying investment. I should welcome the noble Lord's comments on this because I wonder whether "engaging in the business of excludes individuals who might, for one reason or another, decide that they wished to take somebody out of their position on a particular share or particular investment. In order to be de-excluded, I suppose I have to say, does it mean that there is a difference between somebody who, in the original text, holds himself out as buying investment, including selling (which is perfectly proper for me as an individual to do) and somebody who holds himself out as engaging in the business of:
"buying investments with a view to selling them"
which it is not proper for me to do? I am unclear as to whether individuals who may or may not wish to deal are affected by the amendment. I am asking for clarification rather than anything else, as I am sure the noble Lord understands. We have received the amendments rather late in the day and I am merely asking for information.
May I refer to Amendment No. 29, as the noble Lord also spoke to that amendment? Again, I am asking for clarification. I understand that there is a difficulty where a different number of companies or bodies corporate, as in the Bill, are in the same group. The problem that I have with the amendment is the definition of "group". I can understand that a "group" is simple if it is a series of wholly-owned subsidiaries of one company, because the accounting procedures and the tax treatment normally adopted between fellow subsidiaries are simple and well established.
I start to have a problem if the same group includes companies which may be subsidiaries under companies legislation but are perhaps only 51 per cent. owned or are controlled as to the board of directors, which is still a Companies Act definition of a subsidiary. There the accounting procedures are different.
I wonder how minorities may be affected in such a group and whether the Government have considered the position of directors representing outside minorities; what their position will be under the exclusion of dealings or investment business conducted by such groups, and whether the amendment, as proposed, goes as far as it should in defining those important matters.
Paragraph 18(1) (b) of Amendment No. 29 refers to participators in a joint enterprise. I ask the noble Lord for clarification on what is a joint enterprise. I have
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read page 5 of the Marshalled List, paragraph 25a, which states:
"In this Schedule 'a joint enterprise' means",
and I am still uncertain whether a joint enterprise can include an enterprise in which one body corporate can take a minority position with an individual or series of other bodies corporate and still benefit from the provisions of the amendment.
I apologise to the noble Lord for putting my questions in that slightly confused manner, but it seems to me that the amendment raises many issues on which I should be grateful for clarification.
The Deputy Chairman of Committees (Earl Cathcart): As we have moved into discussion on Amendment No. 29,I should like to say that there is a misprint on page 5 of the Marshalled List. About halfway down, before it says:
"Page 153, line 32, at end insert—25a",
it should indicate that this is Amendment No. 44A. This will be taken after Amendment No. 44.I should have said that sooner had I known that we were discussing Amendment No. 29 on this occasion.
Lord Williams of Elvel: I apologise to the Lord Chairman. I did not have the list of groupings. Until the noble Lord rose I did not know that he was going to speak to that amendment.
Lord Bruce-Gardyne: Obviously I shall be anxious to listen carefully to my noble friend's response to the debate on this group of amendments. As regards Amendment No. 24, we seem to be back to the whole question of what is signified by engaging in a business, which we have discussed previously. How occasional has the activity to be in order for the person to be described as "unengaged"? I am not sure that this, in itself, carries us much further than our earlier discussion.
What particularly worries me is the true scope of Amendment No. 29. According to the Association of Corporate Treasurers to whom, as my noble friend pointed out, Amendment No. 29, in particular, is addressed, paragraph 12 would still catch, even given Amendment No. 29, an astonishing variety of fairly run-of-the-mill corporate operations, including the buying and selling of investments with surplus funds of a company or subsidiary companies, associated companies or joint ventures, and the buying and selling of strategic share stakes in companies whether private or public.
Then there is the question of the acquisition of a private company. I realise that my noble friend has introduced Amendment No. 31 which, I think I am right in saying, we are not discussing with this group. But, here, too, there seems to be the feeling that this would not cover a situation such as the possibility—which again, one would have thought was in the normal range of corporate activities—of a business like ICI buying 25 per cent. of a private company from individual shareholders. It may be better that this is discussed under Amendment No. 31.

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I cite these as examples of what I am led to understand are activities that would still fall, even with the passage of Amendment No. 29, under the hammer, if I may so express it, of paragraph 12. This would apply even, I am told, to the making of takeover bids. I believe that we have had rather too many takeover bids. I am not necessarily an enormous enthusiast of some of the gargantuan schemes in which our ingenious merchant banks have been making what one might call a decent living in recent months, but it cannot be right that through paragraph 12 we should be in danger of invalidating such reasonably normal corporate activities as that.
Finally, as I understand it, we are still in a position where the caveat on the giving of advice as to exercise of rights conferred by investments would make it impossible, or, at least, would make it hazardous, for companies to advise their shareholders as to the action that they should take in a takeover situation. I cannot believe that it is genuinely the Government's intention that the remit of the Bill should go as wide as this. It seems to be the view, certainly of the corporate treasurers—I accept, of course, that they may be wrong—that notwithstanding Amendment No. 29, all these sorts of perfectly normal and generic corporate activities could be strung up on paragraph 12. I feel that the Government have to look at this matter with some care, just as we shall want to look with greater care at the amendments that my noble friend has introduced in this group. If it were felt necessary to try to amend and improve, it would be more logical, in my judgment, that we should seek to do so at Report stage. My noble friend may be able to give us some reassurance on these points.
Lord Lucas of Chilworth: I wish first to apologise to the noble Lord, Lord Williams of Elvel. It is obvious now that the introductory speech that I made was far too brief. I shall therefore go back and speak in a little more detail. This might remove some of the noble Lord's doubts, and, also, I think answer most of his questions and probably those, too, of my noble friend.
This is an odd group of amendments, but the amendments have a common theme. All involve the position of persons whose activities would, on the basis of the definitions in the Bill, fall within the definition of investment business but who are not carrying on the kind of business it is the purpose of the Bill to regulate.
Paragraph 17 of Schedule 1 excludes from the scope of paragraph 12, dealing in investments, certain transactions entered into as principal. Broadly speaking, the intention is that where a person enters into transactions only as principal (as opposed to as agent), he is not to be regarded as carrying on investment business unless his conduct is such that he is in effect making a market in investments or he regularly solicits people other than investment businesses to buy or sell investments. The amendments to paragraph 17 extend this exclusion by narrowing the circumstances in which these exceptions apply.
Paragraph 17(1) concerns transactions by a person as principal in investments within paragraphs 1 to 6 and, so far as relevant to those paragraphs, paragraph
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11 of Schedule 1. These investments are referred to as "securities". Paragraph 17(1) has the effect that a person buying or selling securities as principal is not to be regarded as carrying on investment business, unless in doing so he does any of the things in headings (a), (b) and (c). The amendments do not affect heading (a), which is concerned with committed market-makers. Heading (b) is concerned with occasional market-makers. The amendment to this part of the sub-paragraph has the effect that a person will be regarded as within its scope (and hence within the definition of investment business) only if he holds himself out as engaging in the business of buying investments with a view to selling them. This is considerably narrower than the present provision, which it has been suggested could, for instance, have caught a non-investment company with a short-term cash surplus to invest, which held itself out in the market as being willing to buy an investment with a view to selling it within a certain period.
Heading (c) is concerned with persons who, while not falling within (a) and (b), regularly solicit unauthorised persons for the purpose of dealing in investments. The amendments to this part of the sub-paragraph have the effect that a person dealing as principal is not to be regarded as carrying on investment business by reason only that he regularly solicits for the purpose of dealing in investments through authorised persons, exempted persons, members of the same group as himself, participators with him in a joint enterprise, or persons outside the United Kingdom whose ordinary business involves them in engaging in investment transactions.
Paragraph 17(2) is concerned with investments within paragraphs 7 to 10 and, so far as relevant to these paragraphs, paragraph 11, which are referred to in this note as "contractual investments". Paragraph 17(2) as drafted has the effect that a person is not to be regarded as dealing in investments by reason only that he enters into transactions concerning contractual investments as principal with an authorised person.
There is no need for exclusions corresponding to those described at paragraph 3(c) and (d) above because of the provisions of the new paragraph. New paragraph 18A excludes from the definition of investment business certain activities concerning members of the same group and participants in a joint enterprise. The effect of paragraphs 18A(1) and (2) is that a person is not to be regarded as engaging in the activity of dealing in investments by reason only that he enters into transactions as principal with another body corporate in the same group or with another participator in a joint enterprise (if the transaction is for the purpose of that joint enterprise). Such persons are referred to for the purposes of this note as "connected persons".
A person is not to be regarded as engaging in the activity of dealing in investments by reason only that he enters into transactions as agent for a connected person unless, if the transaction involves a security, the agent engages in an activity within paragraph 17(1)(b) or (c) or if the transaction involves a contractual investment. Thus the effect is that anything done by a person as agent for a connected person is treated for the purposes of the Bill as though it were done by that person as principal; and he is required to be authorised

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only if he would have been so required had the transaction been entered into as principal.
Paragraph 18A(3) has the effect that a person is not to be regarded as making arrangements for deals in investments by reason only that he makes arrange-ments with a view to another body corporate within the same group dealing in investments, or another participator in a joint enterprise dealing in investments for the purpose of the joint enterprise. Paragraph 18 A(4) has the effect that a person is not to be regarded as managing investments by reason only that he manages investments belonging to another body corporate in the same group or another participator in a joint enterprise where the investments are managed for the purposes of the joint enterprise.
Paragraph 18A(5) has the effect that a person is not to be regarded as giving investment advice by reason only of giving advice to another body corporate in the same group or another participator in a joint enterprise where the advice is given for the purposes of the joint enterprise. Paragraph 25A defines the terms "joint enterprise" and "participators" for the purposes of the above provisions.
I realise that that is a rather lengthy statement and I think that perhaps we will need some little time to study the subject. I should certainly be happy to consider, when noble Lords opposite have had an opportunity of studying it, whether there are major points outstanding, but perhaps I may answer one or two specific questions that have arisen.
The noble Lord, Lord Williams, asked about the position of an individual who buys investments with a view to selling them. That position will depend on how he holds himself out. If, for example, he holds himself out as being engaged in the business of buying investments in order to sell them, then he will be caught. If he holds himself out as a private individual who is interested in buying with a view to selling, he will not be caught.
The noble Lord has asked me, "What is a group?" I am happy to explain it once again. "Group" is defined in Clause 173(1) and can include companies in which there are minority holdings, but we consider that anything done within a group is a matter for the members of that group which can be decided by the directors of the member companies and that it is not something with which the Bill need be concerned.
My noble friend Lord Bruce-Gardyne spoke about engaging in the business and he referred particularly to paragraph 17(1) as amended. This is indeed different from the formulation in Clause 1. A person who holds himself out as engaging in the business of buying and selling investments would have to be doing rather more than buying and selling investments occasionally and holding himself out as doing so. He would actually have to hold out the purpose of his business as being to buy investments with a view to selling them if he were to be caught by the terms of paragraph
Lord Silkin of Dulwich: I am grateful to the Minister, and on that point I should like to ask him whether this is not relevant to the whole question of continuity which we were discussing on an earlier amendment. Is it not the case that the difference between the situation here and the earlier situation is precisely the holding out to which the Minister
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referred in that particular paragraph and in paragraph (c), the regular soliciting, which again imports the idea of continuity, so that merely "engaging in" is not enough; there must be either a holding out of irregularity. Ought not that principle to apply to the earlier matter which the Minister will be looking at again?
Lord Lucas of Chilworth: The noble and learned Lord is quite right, and since I agreed to look at this matter and consider what we mean by "engages", of course we will take that point on board.
My noble friend spoke about the worries of corporate treasurers. I do not in fact believe that nearly as much business is going to be caught as the association suggests. But, as I said earlier with regard to the point which the noble Lord, Lord Ezra, made we would be quite happy to look further at anything that the association wish to bring forward.
In my earlier remarks—which unhappily have proved to be no more nor less than introductory— said that we should be prepared to consider any further. representations as to the precise scope of the relevant positions. As I have rattled through a great number of points raised—I do not think the noble Lord, Lord Williams, anticipated an answer in quite that form— think that it would be as well if I made at unconditional offer to listen to anything that might be raised in this matter with a view to making it a little clearer.
Lord Bruce-Gardyne: My noble friend has made a most handsome offer which I am sure will be accepted with alacrity. I am bound to admit that 1 hope he understood the full import of his explanation of the amendments more clearly than I did. I begin to wonder, when I try to engage in rather feeble efforts to improve my own personal portfolio, whether I shall not have to find an SRO to shelter under.
However, I am sure that the assurance that my noble friend has given, that we can look at these matters again carefully and in some detail between now and Report stage, is highly desirable. I am sure that it is much better to do that than to try and arrive on our feet at appropriate definitions of the precise meaning of "engagement". All that one can say at this stage is that it is clearly not the kind of activity that the Church goes in for.
Lord Williams of Elvel: I am most grateful to the Minister for his unconditional offer to look at all this again. I am bound to say that I cannot understand the difference between an individual who holds himself out as buying and selling investments and an individ-ual who holds himself out as engaging in the business of buying and selling investments. However, that is probably my stupidity rather than the drafting of the Bill.
The whole question of what is a connected person is very complicated. In my view it is insufficiently defined in Clause 29, but I shall not make detailed comments. I agree with the noble Lord, Lord Bruce-Gardyne. The Government have very kindly said that they will take this whole question back and look at it again and come back with something perhaps more intelligible at Report stage.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendments Nos. 25 to 27:
Page 150, line 12, leave out (" (other than authorised persons) ").
Page 150, line 14, at end insert ("and those persons are not confined to authorised persons, exempted persons, members of the same group as himself, participators with him in a joint enterprise and persons outside the United Kingdom whose ordinary business involves them in engaging in activities falling within Part II of this Schedule.").
Page 150, line 20, leave out ("an authorised person") and insert ("or through an authorised person, an exempted person or a person outside the United Kingdom whose ordinary business involves him in engaging in activities falling within Part II of this Schedule.").
The noble Lord said: I have just spoken to Amendments Nos. 25,26 and 27, which I beg to move en bloc.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 28:
Page 150, leave out lines 21 to 37.
The noble Lord said: This amendment is related to the new clause on listed money institutions which it is proposed to add after Clause 40 and the new schedule to which that clause refers.
I have to confess that there is an assumption here that the later amendment will be accepted in one form or another. I have to apologise to the Committee for the very late tabling of the new clause and schedule. It was due to last minute comments which we received on our proposals which necessitated further drafting changes.
Lord Williams of Elvel: I apologise for interrupting. I did not quite hear to which new clause the noble Lord was referring. Can he refer us again to the new amendment?
Lord Lucas of Chilworth: It is proposed to add a new clause after Clause 40. That is Amendment No. 113. I was apologising for the lateness of tabling the new clause. That was due to last minute comments which necessitated further drafting changes. I was going to say that it was a further demonstration of the flexibility of the Government in these matters.
I know that noble Lords will not have had time to study the new clause and the schedule. It might be for the convenience of the Committee to defer consideration of them and this amendment until we reach them in their proper place, which I hope will be on Wednesday of this week. The proposals on which the new clause and schedule are based have been the subject of extensive consultation, and the approach we are proposing has been generally welcomed, although there have been many comments on points of detail.
The new clause and the schedule supersede paragraph 18 of Schedule 1. The exemptions made in that paragraph have been criticised as being too narrow. Our new proposals go wider both as regards the parties eligible to benefit and the kind of transactions covered. We can obviously consider the detail later, but on the assumption that even with consideration of the detail those later amendments will be accepted I would ask the Committee to agree to this paving amendment. I beg to move.
9.15 p.m.
Lord Williams of Elvel: On the basis that the noble Lord describes, I think that we are perfectly happy to postpone discussion of these matters until a later stage. I notice that on page 25 of the Marshalled List, after Clause 40, there is something called "Listed money market institutions". No doubt when we come to it we shall discuss what listed money market institutions means, because some of us are in great doubt as to whether there is such a list and on what basis it is compiled. But I agree with the noble Lord that we will discuss this matter when the time comes.
The Deputy Chairman of Committees: In calling Amendment No. 29,I must repeat what I said earlier. There is a misprint on page 5 of the Marshalled List, half-way down, where it says "page 153, line 32, at end insert… 25a". That should be a separate amendment, but at the present moment I am not absolutely clear what the correct number of that amendment should be. I look to the Minister to clarify that point, please.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 29:
Page 150, line 37, at end insert—
("Groups and joint enterprises.
18A.— (1) Paragraph 12 above does not apply to any transaction which is or is to be entered into by a person as principal with or, subject to sub-paragraph (2) below, as agent for, another person if—

(a) they are bodies corporate in the same group; or

(b) they are participators in a joint enterprise and the transaction is or is to be entered into for the purposes of that enterprise.

(2) Where the transaction is or is to be entered into by a person as agent sub-paragraph (1) above does not apply—

(a) if the investment falls within any of paragraphs 1 to 6 above or, so far as relevant to any of those paragraphs, paragraph 11 above and the agent engages in any activity to which paragraph 17(1)(b) or (c) above applies; or

(b) if the investment is not as mentioned in paragraph (a) above and the other party to the transaction is a person who is neither an authorised or exempted person nor a person outside the United Kingdom whose ordinary business involves him in engaging in activities falling within Part II of this Schedule.

(3) Paragraph 13 above does not apply to arrangements which a person makes or offers or agrees to make with another person if—

(a) they are bodies corporate in the same group and the arrangements are with a view to another body corporate in that group entering into a transaction of the kind mentioned in that paragraph; or

(b) they are participators in a joint enterprise and the arrange- ments are with a view to another participator in the enterprise entering into such a transaction for the purposes of that enterprise.

(4) Paragraph 14 above does not apply to a person by reason of his managing or offering or agreeing to manage the investments of another person if—

(a) they are bodies corporate in the same group; or

(b)they are participators in a joint enterprise and the investments are or are to be managed for the purposes of that enterprise.

(5) Paragraph 15 above does not apply to advice given by a person to another person if—

(a) they are bodies corporate in the same group; or

(b) they are participators in a joint enterprise and the advice is given for the purposes of that enterprise.").

The noble Lord said: I have already spoken to this amendment. I beg to move.
Lord Williams of Elvel: I am sorry to intervene at this point, but I do not think I understood from the noble Lord—and I am sure it was by omission rather than intention—exactly what the definition of a "connected person" is for the purposes of this amendment. The noble Lord referred to connected persons in his presentation of this amendment. I posed a number of questions about who is in the same group as whom, and what are joint enterprises, and the noble Lord's reply concerned connected persons. I should be grateful if the Minister could give us a definition as to what he means by connected persons.
Lord Lucas of Chilworth: My noble and learned friend advises me that I used the shorthand term. They are bodies corporate in the same group or they are participators in a joint enterprise, who enter into a transaction for the purpose of that enterprise. I hope that that helps the noble Lord.
Lord Williams of Elvel: I am very grateful to the noble Lord the Minister, but that is, if I may say so, an absolutely circular response. Originally, when I realised that the noble Lord was speaking to Amendment No. 29, I asked the noble Lord for the definition of "a group" in paragraph 18A(l)(a), which says:
"they are bodies corporate in the same group",
and for the definition of "a joint enterprise" in paragraph 1 8A(1)(b). The response I received was "connected persons", and I am led back to the original wording of the amendment. Perhaps I can be given some further help on this matter so that I can try to understand what the Government propose.
Lord Lucas of Chilworth: On page 141 of the Bill, in Clause 173, which is the interpretation clause, at line 23 the noble Lord will find:
"'group', in relation to a body corporate, means that body corporate, any other body corporate which is its holding company or subsidiary and any other body corporate which is a subsidiary of that holding company".
Lord Williams of Elvel: I am most grateful to the noble Lord; I had read that passage. I should like to ask the same question as I asked before. If a body corporate is part of a group in the sense as described on page 141,I assume that it is a subsidiary of a company under the meaning of the Companies Act. A subsidiary under the meaning of the Companies Act is either where the equity is over 50 per cent. held by the holding company, or where the board of directors is controlled by a company. Those are the two definitions under the Companies Act. My question is: what happens when all these dealings take place by companies, which may be part of the group for the purposes of this Bill, which may be 20 per cent. owned by a company but that company has power to appoint the whole board of directors, or which may be 50.1 per cent. owned by a company? What happens to the minorities? Are they treated fairly? Are there any guarantees? What are the accounting provisions between one member of the group and another?
I am sorry to press the noble Lord on this but it is important to establish the relationship, because in accounting terms it makes a tremendous amount of difference whether a company is 100 per cent. owned
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or 51 per cent. or 49 per cent. or 30 per cent. owned May I press the second question? What is a joint enterprise? I do not see any definition in Clause 173 of a joint enterprise.
Lord Lucas of Chilworth: I do not know whether I can really help the noble Lord any further . So far as this schedule is concerned we find on the Marshalled List that there is an interpretation of what "a joint enterprise" means. It means:
"an enterprise into which two or more persons ('the participators') enter for commercial reasons related to a business or businesses (other than investment business) carried on by them; and where a participator is a body corporate and a member of a group each other member of the group shall also be regarded as a participator in the enterprise."
It is entirely up to the directors to look after all the shareholders, and company law protects the minority. That is no different from any other problem concerning minorities.
I have done the best I can to answer a number of questions. The noble Lord will accept, I know, that in some of the detailed points he has raised I do not know the answer this evening. I can promise him though, that before he has breakfast tomorrow morning he will know the answer.
Lord Williams of Elvel: I hope that the noble Lord will not telephone me at home.
The Deputy Chairman of Committees: I have now been advised that the next unnumbered amendment, which reads "Page 153, line 32, at end insert", must be numbered Amendment No. 44A and must be taken in that order, but of course it may be grouped as desired. I shall now call Amendment No. 30, Lord Lucas of Chilworth.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 30:
Page 150, line 43, leave out ("following persons, that is to say") and insert ("persons mentioned in sub-paragraph(aa) below or the holding of such shares of debentures by or for the benefit of any such persons.
(aa) The persons referred to in sub-paragraph (1) above are—").
The noble Lord said: When this matter was raised in another place my honourable and learned friend undertook to consider whether amendments were necessary or desirable to clarify the position of employers operating employees' share schemes, and trustees involved in such schemes. This amendment, coupled with the amendments we are proposing on the activities of trustees more generally, will make it clear that the employer will not have to be authorised to operate such a scheme and that the trustees will only be required to be authorised if they hold themselves out as providing, or are separately remunerated for, investment services over and above their duties as trustees. I beg to move.
Lord Cameron of Lochbroom Lord Cameron of Lochbroom moved Amendment No. 31:
Page 151 line 17, at end insert—
("Sale of private company

—£ (1) Paragraphs 12 and 13 above do not apply to the acquisition or disposal of, or to anything done for the purposes of the acquisition or disposal of, shares in a private company, and paragraph 15 above does not apply to advice given in connection with the acquisition or disposal of such shares, if—

(a) the shares carry 75 per cent. or more of the voting rights attributable to share capital which are exercisable in all circumstances at any general meeting of the company; and

(b) the acquisition and disposal is, or is to be, between parties each of whom is a body corporate, a partnership, a single individual or a group of connected individuals.

(2) For the purposes of subsection (1) (b) above "a group of connected individuals", in relation to the party disposing of the shares, means persons each of whom is, or is a close relative of, a director or manager of the company and, in relation to the party acquiring the shares, means persons each of whom is, or is a close relative of, a person who is to be a director or manager of the company.

(3) In this paragraph "private company" means a private company within the meaning of section 1(3) of the Companies Act 1985 and "close relative" means a person's spouse, his children and step-children, his parents and step-parents, his brothers and sisters and his step-brothers and step-sisters.")

The noble and learned Lord said: This is an amendment the subject matter of which was foreshadowed in the Government's White Paper in that it was said that the definition of investment business would exclude the sale of a company as a whole. The purpose of the amendment is to exclude from the definition of investment business the activities of transfer agents and similar businesses who arrange, or procure, the sale of substantially the whole of the share capital in private companies satisfying certain conditions.
As my honourable and learned friend said in another place when this subject was discussed, there are difficulties when one starts to try to define this apparently straightforward concept more precisely. An exclusion limited to the sale of all the shares in a company from one individual to another would be nugatory because more than one person might be involved in either side and not all the shares might be sold. On the other hand, too wide an exclusion would risk opening up a major loophole. The formula proposed in the amendment seeks to strike a satisfactory balance. In particular it would exclude from the scope of the Bill the vast majority of sales of private owner-managed companies. But we should be perfectly content to consider any representations which might be made as to the precise scope of the exclusion. I beg to move.
Lord Williams of Elvel: I am most grateful to the noble and learned Lord the Lord Advocate for indicating that he is prepared to consider represent-ations, because this particular amendment seems to raise a number of problems. He is quite right in saying that it is a very complex issue. As I understand it, if a private company is sold as to 74 per cent. of its voting capital, it does not come into the exclusion. This seems to be a rather odd circumstance where one has to get 76 per cent, rather than 74 per cent, or 75.1 per cent. rather than 74.9 per cent, in order to qualify for the exclusion. Having said that, I feel that on our side we should like to think about this, to read what the noble
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and learned Lord the Lord Advocate has said, and not oppose the amendment at the moment.
Lord Bruce-Gardyne: I admit that I am slightly mystified by what my noble and learned friend the Lord Advocate has said about the loophole that would be opened up by going below the 75 per cent. limit. I referred to this in my intervention on Amendment No. 29. I do not want to labour the point further, but it does not seem to answer the problem which I should have thought was a not wholly uncommon occurrence, where a publicly quoted company might wish to take in the course of its business a significant minority share purchased from individual shareholders in a private company. One needs only to think of examples (usually in public companies, though not always) such as the Whitbread umbrella. I am not arguing whether that is a necessary or desirable arrangement. But the important point is that it does not seem at all logical on the face of it that such arrangements should be invalidated as a sort of by-blow of this legislation. I very much agree with the noble Lord, Lord Williams, that this is another matter that I should have thought your Lordships would need to consider with some care again as before.
Lord Cameron of Lochbroom: Obviously I take note of what the noble Lord opposite and my noble friend have both said on this matter. I have indicated the intention with which this new paragraph is brought forward in dealing with a particular problem. My noble friend might care to consider again to whom we are looking in this matter of exclusion, transfer agents and the like. I shall study with care what both noble Lords have said. Our minds are not closed, as I have indicated, and we should be happy to receive representations on this matter.
Lord Williams of Elvel: I am grateful to the noble and learned Lord the Lord Advocate for what he has said. I hope he will consider this whole matter in the light of the pertinent comments that the noble Lord, Lord Bruce-Gardyne, has made. However I must tell him that this is a Government Bill. We are the Opposition. It is no good the noble and learned Lord saying that we should make suggestions, my noble friends should make suggestions, everybody should listen to what is happening. The Government have to come out with a sensible proposition and put it before your Lordships. Then we shall look at it, discuss it, and, if necessary, vote upon it. It is up to the Government to take this back and have another look at it. I agree with the noble Lord, Lord Bruce-Gardyne, that as it at present stands it will catch a great many transactions which are perfectly sensible and innocent.
9.30 p.m.
Baroness Seear: My Lords, I hesitate to intervene. I am an absolute fool in these matters but I should like to ask a question of the noble Lord who will have to deal with this Bill when it becomes an Act. As I listen to this debate, in this most learned and expert company nobody seems to understand—least of all on the Government Benches—what it is we are trying to do. If we here do not understand it, what hope is there that the public will understand it when it is passed into

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legislation. I do not wish to be frivolous about this, but it seems quite absurd that almost nothing that has come up since I have been sitting here has been understood by this side of the Committee; and I am bound to say, judging from the comments on the other side of the Committee, that those Members do not seem to understand it either. This is surely no way to legislate, unless we are legislating solely for people in the upper echelons of the financial world, and the rest of the general public, the 99·9 per cent., are not going to have to take any notice of it. What is the real position?
Lord Cameron of Lochbroom: I trust that when I opened the debate I made absolutely clear what was the purpose. We think that putting the limit of 75 per cent. of the shares which have voting rights, or 75 per cent. of the voting rights, in all the circumstances is the right point at which to set the exclusion. I have listened to what has been said, in particular by my noble friend Lord Bruce-Gardyne, who suggests that perhaps that might be made wider. But we shall have to consider this further, and that I have undertaken to do.
The Deputy Chairman of Committees: In calling Amendment No. 32,I have to remind the Committee that if it is agreed to, I cannot call Amendments Nos. 33, 34 and 35.
Lord Cameron of Lochbroom Lord Cameron of Lochbroom moved Amendment No. 32:
Page 151, leave out lines 18 to 23 and insert—
("Trustees and personal representatives.
20.— (1) Paragraph 13 above does not apply to anything done by a person as trustee or personal representative with a view to—

(a) a fellow trustee or personal representative and himself engaging in their capacity as such in an activity falling within paragraph 12 above; or

(b) a beneficiary under the trust, will or intestacy engaging in any such activity.

unless that person is remunerated for what he does in addition to any remuneration he receives for discharging his duties as trustee or personal representative.

(2) Paragraph 14 above does not apply to anything done by a person as trustee or personal representative unless he holds himself out as offering investment management services or is remunerated for providing such services in addition to any remuneration he receives for discharging his duties as trustee or personal representative.
(3) Paragraph 15 does not apply to advice given by a person as trustee or personal representative to—

(a) a fellow trustee or personal representative for the purposes of the trust or estate; or

(b) a beneficiary under the trust, will or intestacy concerning his interest in the trust fund or estate,

unless that person is remunerated for doing so in addition to any remuneration he receives for discharging his duties as trustee or personal representative.").

The noble and learned Lord said: I have already spoken to this amendment. I beg to move.
[Amendments Nos. 33 to 35 not moved.]
Lord Hacking Lord Hacking had given notice of his intention to move Amendment No. 36:
Page 151, line 23, at end insert—
("(20A) Paragraph 13 above does not apply to legal or accountancy or actuarial advice which is given as ancillary to the services (as specified in paragraph 13) made or offered by authorised persons".).
The noble Lord said: In view of the statements made by the Minister and by the noble and learned Lord the Lord Advocate when I moved my Amendments Nos. 22 and 23, and in view also of the noble Lord the Minister moving Amendment No. 20, which has been taken by the Committee, I shall not be moving this amendment, or the following three amendments.
[Amendment No. 36 not moved.]
[Amendments Nos. 37 to 39 not moved.]
Lord Ezra Lord Ezra moved Amendment No. 40:
Page 151, leave out lines 35 to 46.
The noble Lord said: I beg to move Amendment No. 40. It is a very brief amendment and a relatively simple one. It deals with the question of newspapers which under Part III of the schedule it is proposed should be excluded from the effects of this legislation. I think it was the noble Lord, Lord Bruce of Donington, who at the Second Reading drew attention to the quite considerable influence that newspapers have, particularly in their City columns, on people's investment decisions. They go far wider than brokers' circulars, analysts' reports, tip sheets and so on. Therefore, it seemed to the noble Lord, and it certainly seems to me, to be questionable whether newspapers should be excluded, in so far as they give financial advice, from the impact which other advisers will feel under the legislation. I beg to move.
Lord Taylor of Gryfe: We have been discussing complicated matters in relation to this Bill in the last two or three hours, and we now come to a relatively simple issue of principle. I hope that the Minister will be as accommodating in relation to this simple issue as he has been on the other matters which have been under consideration. My noble friend Lady Seear has asked that we be quite clear what we are about, and what the Bill is about is consumer protection. The basic purpose of this Bill is to protect the investor in the situation in which we now find ourselves.
The representations on this amendment come from the National Consumer Council, which is much concerned about the position of newspapers which advise on investment. For the purposes of this Bill, the publisher of a tip sheet should be defined as "an investment business", but the journalist who makes the recommendation with regard to the purchase of shares and investments in general will be excluded from the Bill. I am sorry that the noble Lord, Lord Bruce-Gardyne, is not in his place, because, just as he made friendly references to the earnings of merchant banks, I was about to return the compliment and make some reference to the decent men who offer financial wisdom in the daily or weekly press.
However, we have reached a stage in dealing with investments where there is now widespread investment, thanks to the privatisation of British Telecom, and the average chap who reads the average paper is almost as interested in the affairs of the stock market as he is in Newmarket. Therefore, I suggest that he looks for advice and turns to the financial page, where he gets advice on what he should invest in and on how the journalist sees the markets. The man who issues tip sheets which are circulated is regarded as engaging in investment business, but the much more popular distribution of financial advice in the press is

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exempt. Therefore, I believe that we have to be very careful, in a period of wider share ownership, when there is a broader interest among the public in financial journalism, about excluding that category of advice. So I invite the Minister to be as accommo-dating to this relatively simple amendment as he has been in the complicated procedures that have preceded it. I beg to support the amendment.
Lord Bruce of Donington: We should like to support this amendment. One of the purposes of this Bill was put very succinctly to me by a leader of one of the prospective SROs, who shall be nameless and who said to me, "You know, Lord Bruce, the people we are trying to protect ultimately are the Aunt Agathas of Weston-super-Mare. The small investors are, in the final analysis, the people we want to protect."
The attitude of Her Majesty's Government towards the small investor is slightly exaggerated from time to time for political purposes and, in some cases, verges on the euphoric. There is a general sympathy, which we feel is quite genuine, on the part of Her Majesty's Government towards the small investor.
Let us take the Aunt Agathas of Weston-super-Mare. They do not have at their disposal investment analysts. Many of them indeed do not have nearby stockbrokers. Many of them cannot afford what to many may seem to be the exorbitant sums that are paid for the alleged tip sheets. On whom do they rely? They rely on the financial correspondents of the daily press, some of whom are extremely reputable people with very good reputations. It has not been entirely unknown for financial correspondents to be represented both in this Chamber and indeed in Her Majesty's Government. They are most reputable people. But not all of them live up to that high standard. One does not want to go into invidious examples—indeed, 1 would not wish under the protection of privilege in this Chamber to name names—but we all know of cases where financial advice has been given in newspapers that has not been entirely unconnected with the relationship of that correspondent with the person who desires the price of the shares to go up. I repeat: it is not entirely unknown.
This amendment is designed to maintain and buttress the reputation of the very good financial correspondents and financial tipsters in the daily press, the most distinguished of whom do not need the protection because they are very honourable men. I am quite sure that distinguished journalists who have occupied the role would wish their reputation to be maintained.
An ordinary financial correspondent who is busily recommending shares tends to take a degree of personal responsibility for what he writes. Possibly he can in some cases even read a balance sheet and profit and loss account properly and be able to derive the correct conclusions from his reading of it. Some who are prudent would, before they made any forecast or recommendation, probably get on to stockbroker friends of theirs in order to fortify the views that they had already formed, in which case they would be able to give on an informed and honest basis the kind of advice which, through the very powerful columns of the newspapers, they offer to prospective investors.
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This I am quite sure is what the most reputable of them do.
But that still does not, I am afraid, exclude a practice that has grown up—although, I am happy to say not very extensively—of letting in the occasional rogue who, on the basis of an association with an interested party who wants the shares to go up or to go down, allows this advice to become coloured for entirely ulterior motives. If what I have said is true and the bulk of financial correspondents occupy a very responsible position in our society and have the highest reputation, no newspaper is at risk by this clause being deleted. It is only if they are fearful about this practice to which I have referred, and which at any rate I prefer in my naĩve fashion to believe is not widespread, that they need bother about the exclusion of newspapers from this particular privilege.
We must bear in mind the terrific influence of the national press and the very considerable reliance that is placed on it by investors who do not know how the City works, are not accustomed to studying complicated graphs and do not have their own personalised computer that they can plug in to the network.
I only hope that for the protection of these people the Government will consider accepting the amendment.
9.45 p.m.
Lord Grimond: Before the Minister replies I should like to support all that has been said in favour of the amendment. To my mind it is the most important amendment that we have discussed today. Until now we have largely been discussing sophisticated matters for the protection of people who should be able to look after themselves because they have highly paid advisers and access to the best information. We now come to the nub of the Bill, which is the small or new investor.
I do not propose to repeat what has been said but it is obvious that what appears in the papers is of prime importance to such people. It must also be remembered that the Bill is removing one of their main protections—distinction between a broker and a jobber. I am not certain that all investors will appreciate what the result of that might be.
In addition to supporting what was said by my noble friends and by the noble Lord on the Opposition Front Bench, may I ask this question? Under paragraph 22(2) the Secretary of State may certify that a publica-tion should not fall within the Bill, as I understand it. As far as I can see, there is no daily or weekly paper which would not be entitled to certification. Under paragraph 22(1) the only publications which will fall within the Bill are those which lead people to invest in a particular investment. Therefore, as I see it, there is no daily or weekly paper which would not be entitled to certification that it falls outside the scope of the Bill. I shall be glad to learn whether that is how the Government interpret it.
I repeat that if this Bill is really intended to encourage wider shareholding and to protect the small investor, it is far more important to look at what is said in the City columns and in the advertisements for unit trusts, and so on, which appear in all the papers, and at the tips given in every paper, from the most popular

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dailies up to the Financial Times, than it is to introduce very sophisticated protection for people who really ought to be able to protect themselves.
Lord Lucas of Chilworth: Perhaps I could start by reminding the Committee of what the noble Lord, Lord Taylor of Gryfe, said. He asked us "to be very careful about excluding newspapers". I should like to suggest to the Committee that we should be very careful before approving a statutory requirement for newspapers to obtain authorisation before they can publish a City column. Such authorisation would make them subject to the conduct of business rules.
Since we have business rules, that would govern the sort of advice they could give, the basis of their recommendations, and so on. I suggest to the Committee that such rules would be entirely appro-priate for a broker's circular but they might inhibit an investigative journalist. We must be extremely cautious about going down such a road because I believe we could be moving quite easily on to the slippery slope towards press censorship.
I listened very carefully to the noble Lord, Lord Bruce of Donington. If I may be slightly humorous for a moment, I thought that Aunt Agatha came from Wigan and not from Weston-super-Mare; but perhaps she comes from a variety of places. Yes, we are trying to ensure that Aunt Agatha, from wherever she may come, gets unbiased advice and can read a newspaper without being induced to invest in this or that project at the whim of a financial journalist, though the noble Lord paid tribute, as I do to the integrity of the vast majority of financial journalists.
Yes, of course there can be abuse, but I think in fact that this is best dealt with by the newspaper industry itself. After all, we are considering a Bill which is about self-regulation and I believe we can put upon the newspaper industry an element of self-regulation. I must confess that I very much welcome the Press Council's declaration of principle on 6th June setting out guidelines for financial journalists and their editors. I do not know how many Members of your Lordships' Committee have had sight of that declaration, but I urge your Lordships to read it because I believe it is very good. The final paragraph, paragraph 6, states:
"The Press Council will be ready to deal with complaints from any source that newspapers, periodicals or journalists have acted in breach of the spirit of the declaration or these guidelines, and holds itself free to initiate inquiries into apparent breaches of them without complaints having been made to it".
I shall be quite happy to place a copy of that declaration in the Library for the reference of the Committee.
I believe that since 6th June editors and journalists have supported the spirit of that declaration, as many of them did before. The Government believe that it would be wrong, given these quite positive steps by the newspaper industry itself, to bring investment advice contained in newspapers within the scope of the Bill.
That is not to say that newspapers can print what they like without any legal constraints. If a statement in a newspaper, magazine or journal, contravened Clause 44 (which is the clause dealing with misleading statements), it would be an offence, and as with other aspects of the law a newspaper will be responsible for what it prints and subject to any constraints and
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penalties that the law may provide. But I suggest that to bring newspapers within the scope of the Bill would in effect subject them to a system of prior licensing which I think would be a new and very unfortunate departure.
The noble Lord, Lord Grimond, suggested that there is no paper or publication which would not be entitled to a certificate under paragraph 22(3). I think we have to look at the principal purpose of the publication. If, as is the case with tip sheets, their primary purpose is to convey recommendations about particular investments, they will not benefit from the exclusion and will not be entitled to a certificate under paragraph 22(2): but I believe that others. whose primary objective is of course to disseminate news about the City, personalities, people and so on, are different.
Lord Silkin of Dulwich: I am somewhat puzzled by what the noble Lord said about the certificate. As I understand the position, a certificate is a complete protection but if one does not have a certificate that does not mean that one is unprotected. As 1 understand paragraph 22(1), as a newspaper one can still show that one falls within the exception under paragraph 22(1). What is the point of this certificate procedure? Why not leave it to the newspaper to be able to establish one way or the other?
Lord Lucas of Chilworth: It is for the Secretary of State to make the decision as to whether the publication should be certificated. That is a natural piece of protection.
Lord Silkin of Dulwich: As I understand it (and the Minister will correct me if I am wrong) if the Secretary of State does not do so and complaint is made, the newspaper can still show to the appropriate person, whoever it may be—whether it be the court or anyone else—that it falls within the provisions of Clause 22(1) and that it is excepted.
Lord Lucas of Chilworth: The noble and learned Lord is quite right.
Lord Taylor of Gryfe: The Minister indicated that the Press Council was the appropriate protection agency. Anyone who has followed the procedures and reports of the Press Council over the years will recognise that it has no statutory authority whatsoever and is regularly disregarded by the newspapers of this country. It can publish nice little reports and censures from time to time, but we are talking about protecting people's investment. To say that that responsibility should devolve to a code of practice by the Press Council is totally inadequate. The consequences of removing the exemption would be that newspapers would have to ensure that any advice that they give on investment is neither fraudulent nor reckless. That is the purpose of the amendment. It seems to me to be completely desirable and to be operating in an area where protection is necessary.
The noble Lord, Lord Bruce of Donington, quoted instances of where financial journalists—we are not talking about the gossip columns of the financial pages; the tittle-tattle of the day—give investment

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advice. That is the important point. It is in that direction that the amendment is proposed. It has been known for a financial journalist to make a lot of money from recommending certain shares in which he was interested and selling them later at an appropriate stage. That has happened in journalism in the United Kingdom. It is in order to protect us from such activity that the amendment is proposed. I leave it to my noble friend Lord Ezra to say just a word or two more.
Lord Ezra: My noble friend Lord Grimond put his finger on the point. We are now getting to the nub of the issue, which is the protection of the small investor. I find myself getting confused about the question of certification. It seems that those who are not certificated can still plead in accordance with the clause that they were perfectly entitled to print what they did on city matters.
I am not therefore absolutely clear where newspapers such as the esteemed Investors Chronicle come in. Would it have to be regarded as a journal which is primarily concerned with giving advice about investments? I believe that there is considerable obscurity in the measure. But there is no obscurity about the need for the Bill, as it will be finally enacted, fully to protect the interests of the small investor. This would be one way to do that. Therefore I propose that we test the opinion of the Committee.
Lord Bruce of Donington: The Minister mentioned codes of practice. In the advertising sphere, I am afraid that we can still cite many cases where, despite the numerous codes, they have not been kept. The purpose of the legislation is to lay down a regulatory framework within the law so that parameters can be established within which the various self-regulatory organisations, and so on, function. I should have thought that there was every reason to support the amendment. In regard to any breach of Clause 44, can the Minister say who is to initiate the prosecution?
10 p.m.
On Question, Whether the said amendment (No. 40) shall be agreed to?
Their Lordships divided: Contents, 21; Not-Contents, 44.

DIVISION NO. 3

CONTENTS

Airedale, L.

Morton of Shuna, L.

Bruce of Donington, L.

Pitt of Hampstead, L.

Elwyn-Jones, L.

Ponsonby of Shulbrede, L.

Ezra, L. [Teller.]

Seear, B. [Teller.]

Graham of Edmonton, L.

Silkin of Dulwich, L.

Grey, E.

Simon, V.

Grimond, L.

Stoddart of Swindon, L.

Kirkhill, L.

Taylor of Gryfe, L.

McIntosh of Haringey, L.

White, B.

McNair, L.

Williams of Elvel, L.

Meston, L.

NOT-CONTENTS

Bauer, L.

Limerick, E.

Belhaven and Stenton, L.

Long, V.

Belstead, L.

Lucas of Chilworth, L.

Boardman, L.

Lyell, L.

Brabazon of Tara, L.

Margadale, L.

Brougham and Vaux, L.

Mountevans, L.

Butterworth, L.

Murton of Lindisfarne, L.

Caithness, E.

Orkney, E.

Cameron of Lochbroom, L.

Redesdale, L.

Campell of Croy, L.

Renton, L.

Carnock, L.

Romney, E.

Craigmyle, L.

Saltoun of Abernethy, Ly.

Davidson, V.

Sandford, L.

Denham, L. [Teller.]

Shannon, E.

Elliot of Harwood, B.

Skelmersdale, L.

Elliott of Morpeth, L.

Stodart of Leaston, L.

Glanusk, L.

Swinton, E. [Teller.]

Glenarthur, L.

Terrington, L.

Gray of Contin, L.

Trefgarne, L.

Hacking, L.

Trumpington, B.

Harmar-Nicholls, L.

Wise, L.

Hives, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
10.7 p.m.
Lord Hacking Lord Hacking moved Amendment No. 41:
Page 153, line 11, at the insert—
("(1A) For the purposes of determining into which paragraph of Part I of this Schedule an investment falls, no account shall be taken of features of the investment which are ancillary to its principal feature or features.").
The noble Lord said: We turn again to the problem of overlap. As the Committee may remember, I drew attention to the question of overlap in moving Amendment No. 5. The overlap there was between paragraphs 1 and 2 of Schedule 1 to the Bill. On that occasion, the Minister kindly accepted my amendment. I drew attention again to the overlap problem when we were considering Amendment No. 14. There, the overlap problem was between paragraphs 4 and 7. On this second occasion the Minister kindly said that he would give the matter consideration. I hope therefore that he will at least give consideration to this my third amendment that relates to the problem of overlap.
As the Bill is drafted, it is quite possible for an investment to fall within more than one paragraph, even though it may principally fall under one paragraph. For that reason—I can do no better than refer to the terms of my amendment—I ask:
"For the purposes of determining into which paragraph of Part I of this Schedule an investment falls, no account shall be taken of features of the investment which are ancillary to its principal features."
I need not go again into the problems that arise out of overlap. There is different treatment in the exception clauses and so forth to the definition clauses that form Part I of Schedule 1. Without going into further detail, I would ask the Committee to accept that there is a problem here of overlap. I hope that the Minister will be able at least to give it favourable consideration.
Lord Williams of Elvel: We must be grateful to the noble Lord, Lord Hacking, for moving this amendment. There is a genuine problem here, and it is not simply a question of overlap. It is a question of the number of SROs (if I may use that abbreviation in this early stage of the Bill) to which various people have to belong in order to satisfy the different criteria. A number of people in the City of London are extremely worried that they may have to belong to a whole succession or series of SROs. If the Government found some way of eliminating not only the overlap on investments but also the consequential overlap on belonging to SROs and being able to conduct business in those investments, I think the whole City would benefit. I support the noble Lord, Lord Hacking, in this amendment, although I am bound to say I have problems with his wording. The expression "ancillary" causes me difficulty.
Lord Lucas of Chilworth: The undertaking I gave earlier in discussing Amendment No. 14 applies in this case as well, and I shall consider, between now and Report stage, what amendments are necessary to remove the undesirable overlap between the paragraphs in Part I of the schedule. I must say, however, that I certainly do not extend at this stage such consideration to any other overlaps so far as
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SROs are concerned. I think it would be best to wait until we discuss SROs before I commit myself am further than I should wish on the overlap as it applies in this particular case.
Lord Hacking: While I am grateful to the noble Lord, Lord Williams, for drawing attention to the overlap problems in relation to SROs my amendment was directed to a smaller frame and I am therefore grateful to the noble Lord the Minister for his willingness to consider it. Upon that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Renton): Before calling Amendment No. 42, 1 should like to point out that the line reference should be to line 24 and not to line 28 as printed on the Marshalled List.
Lord Hacking Lord Hacking moved Amendment No. 42:
Page 153, line 24, after ("debentures") insert ("or debenture warrants"):
The noble Lord said: What the noble Lord the Deputy Chairman has said puts me in a slight difficulty, but with the Committee's indulgence I have no doubt I shall get over it. I had recognised that line 28 was not the right line and I made a note that it should have been line 29. However, since I do not. intend to press this amendment, or indeed Amendments Nos. 43 and 44, I am content to leave it as a mystery as to whether it was line 29 or the line to which the noble Lord the Deputy Chairman directed the Committee's attention.
This amendment, and Amendments Nos. 43 and 44, deal with the definition of debenture warrants. In paragraph 25(3) of the schedule it is stated that the company shall not be regarded as disposing of its own shares when it issues them or issues share warrants, viz., options to subscribe for shares. If the company were regarded as disposing of its shares in those circumstances, it would be treated as carrying on an investment business and thus would need to be authorised. Paragraph 25(3) makes a similar provision in respect of the issue of debentures but does not extend these to the issue of debenture warrants, viz., the options to subscribe to debentures. The purpose, therefore, of these amendments is to make similar provision in respect of debenture warrants. I beg to move.
The Deputy Chairman of Committees: May I say to the noble Lord, Lord Hacking, that having considered the matter while he was speaking I feel that the reference should perhaps be to lines 24 and 29.
Lord Hacking: I am happy to follow the guidance of the noble Lord the Deputy Chairman.
10.15 p.m.
Lord Williams of Elvel: Again I am grateful to the noble Lord, Lord Hacking, for introducing this thought. I suppose that there could be warrants to

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subscribe for debentures; and that we are probably talking here about convertible debentures rather than straight debentures. If we are talking about convertible debentures—if there are such instruments: I have never heard of them but there could easily be such warrants in the future—then clearly the noble Lord, Lord Hacking, is right that this should be in the Bill.
Lord Lucas of Chilworth: Whether it is line 24 or line 29 I do not think matters too much this evening. In principle I am quite content to accept the proposal that underlines these amendments. It would certainly be quite sensible to add a reference to debenture warrants. With regard to convertible debentures, I am not sure about that.
I do not want to upset the noble Lord, Lord Hacking. His amendments are defective—I think he implied as much. If I give him a positive assurance that we shall take away the points that he and the noble Lord, Lord Williams, make, give further consideration to all these matters and bring forward amendments on Report, I hope that will meet with the Committee's approval.
Lord Hacking: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 43 and 44 not moved.]
The Deputy Chairman of Committees: There should be at the bottom of page 7 on the Marshalled List a note of Amendment No. 44A, but, as was mentioned by my predecessor in the chair, Amendment No. 44A has been printed on page 5, just below the middle of the page, and is an amendment to page 153, line 32, at end to insert the words as printed. That amendment, therefore, is unnumbered and printed out of sequence, but I now call it as Amendment No. 44A.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 44A:
Page 153, line 32, at end insert—
25a. In this Schedule "a joint enterprise" means an enterprise into which two or more persons ("the participators") enter for commercial reasons related to a business or businesses (other than investment business) carried on by them; and where a participator is a body corporate and a member of a group each other member of the group shall also be regarded as a participator in the enterprise.").
The noble Lord said: No doubt Members of the Committee will recall that we got ourselves into something of a tangle some hour or two ago when I was speaking to Amendment No. 24A and at that time spoke to Amendment No. 44A, which I now beg to move.
Lord Williams of Elvel: I wonder if the noble Lord can tell us whether the expression "a joint enterprise" will figure in any future version of this Bill that the Government may produce, and whether it has any precedent in other companies legislation? If so, can he say what that precedent is and what it means, or is it just an expression invented for the purposes of this Bill?
Lord Lucas of Chilworth: The answer to both questions in short is, no, I cannot. But I shall do so.
On Question, amendment agreed to.
On Question, Whether Schedule 1, as amended, shall be the first schedule to the Bill?
Lord Graham of Edmonton: Before we agree to Schedule 1,I should be grateful if the Minister would take on board some points that I wish to make, and perhaps reply to them. These are very important to the Co-operative Movement, on whose behalf I declare an interest.
In Schedule 1 on page 146 of the Bill we have a note to which, for the benefit of those interested, I ought very briefly to refer. Paragraph 1 says:
"Shares in the share capital of the company and stock in a company.
Note. In this paragraph 'company'… does not include an open-ended investment company or any body incorporated under the law of, or of any part of, the United Kingdom relating to building societies, industrial and provident societies or credit unions."
First, it is quite clear that co-operative societies, which are registered under the Industrial and Provident Societies Acts, are clearly excluded from requiring authorisation.
As regards other parts of capital that are used by co-operative societies—and primarily, besides share capital, there is loan capital—as I understand it (and I should be grateful if the Minister could confirm my understanding) in paragraph 2 we are dealing with debentures. It says:
"This paragraph shall not be construed as applying ‖(b) to a banknote, a statement showing a balance in a current, deposit or savings account".
Quite clearly, as regards debentures and, in the co-operative context, as regards loan capital, this is a question of definition. In this case what we can regard as deposit balances are excluded from the definition of investments in paragraph 2. In order that the Minister can satisfy the point I wish to make, the key factor is whether the promotion of them by the relevant society is to be regarded as investment activity and therefore requiring authorisation.
In this respect I simply want to draw attention to the interpretation clause on page 153, where, at line 22, it says:
"(3) A company shall not by reason of issuing its own shares or share warrants, and a person shall not by reason of issuing his own debentures, be regarded for the purposes of this Schedule as disposing of them or, by reason of anything done for the purpose of issuing them, be regarded as making arrangements with a view to a person subscribing for or otherwise acquiring them or underwriting them".
Therefore, it seems to me that a very satisfactory position has been reached as regards co-operative societies. It appears that the Bill has accommodated the situation of industrial and provident societies offering and promoting their own shares and loan capital, and, in effect, they have achieved exclusion from the authorisation process of this particular Bill.
I should be very grateful indeed if the Minister would confirm to me that my reading of the Bill and my understanding of the intentions of the Government (for which again I express gratitude) are as I have indicated.
Lord Lucas of Chilworth: I am very grateful to the noble Lord, Lord Graham, for putting his points so succinctly. I can confirm, and am glad to confirm, that his understanding on all three points is correct. The co-operative funds, the industrial and provident societies' shares, are not covered by the definition of investments and therefore do not come within the scope of the Bill.
Lord Hacking: Before we agree that Schedule 1 shall be the first schedule to the Bill, perhaps I may raise one matter concerning the definition of futures, which is set out in paragraph 8 of Schedule 1. When the noble Lord, Lord Boardman, moved the amendment of the noble Viscount, Lord Colville of Culross, Amendment No. 15, concerning futures, we had some discussion on this point, and therefore I do not intend to invite the Members of the Committee to travel over that ground again. I raised this at Second Reading but the problem remains, and that is that there is considerable concern over the definition of "futures" and how the present definition of "futures" could extend to what is described as "physicals" as well as futures which clearly fall under investment business and fall under the provisions of this Bill.
As long ago as 11.45 a.m. on 30th January of this year when Standing Committee E in another place was considering this Bill, the Under-Secretary of State, Mr. Howard, said then that the Government were seized of the problem of the definition of "futures" for the purposes of the Bill, and recognised that there may be scope for improvement in that definition.
The noble Lord the Minister responded after I raised the matter at Second Reading when he summed up the debate, and my memory is that he showed still an interest in looking at the problem of this definition. But the fact is that some six months ago the Government recognised that there was a problem about the definition of "futures", and the fact is that thus far nothing has been done about it.
This is of concern to the City and those engaged in commodities, and in particular in the Joint Exchanges Committee. For that reason, because we have not succeeded in covering it today, I draw it again to the Committee's attention and ask the noble Lord the Minister whether, among the many other things he has agreed to give further consideration to, he will give consideration to this. It is a matter of concern for the reasons I have explained.
Lord Lucas of Chilworth: The noble Lord, Lord Hacking, is right. The definition of "futures" in the Bill in paragraph 8 on pages 147 and 148 is difficult. My honourable friend the Under-Secretary of State in another place during Committee on 30th January acknowledged the possibility of improving upon that definition. We have approached in a constructive frame of mind, various proposals that we have received. For example, it is sensible to distinguish between futures contracts and spot contracts, where delivery is immediate or follows within a few days.
We have also established that not all futures contracts require that a price is agreed upon when the contracts are made. Contracts are frequently made between brokers and clients expressed as a contract
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between principals, under which the price is to be determined by the price at which a matching contract is executed by the broker on the market floor.
Furthermore, it appears to be common practice in a number of markets for futures contracts to allow quality and quantity tolerances to determine the price in the event of delivery. I and my honourable friend are considering these matters further and we hope to have more consultations and bring forward necessary amendments at Report stage.
Lord Williams of Elvel: I am grateful to the noble Lord, Lord Hacking, for raising this matter and to the noble Lord, Lord Lucas, for his response. I hope that he and his honourable friend will consult the London Metal Exchange which has a major problem with this part of the schedule.
Schedule 1, as amended, agreed to.
Clause 2 [Power to extend or restrict scope of Act]:
[Amendment No. 46 not moved.]
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 47:
Page 2, line 21, at end insert ("or the carrying on of such business in the United Kingdom.").
The noble Lord said: In speaking to Amendment No. 47 may I also speak to Amendment No. 50. Both these amendments are consequential upon government amendments made to Clause 1 and Schedule 1 in another place. These amendments were mainly concerned with the carrying on of an investment business in the United Kingdom. Since those amendments to which I have referred have been accepted by another place and do not appear to be in contention in the Committee this evening, it would appear that they are purely consequential, and therefore I beg to move Amendment No. 47.
On Question, amendment agreed to.
10.30 p.m.
Lord Hacking Lord Hacking moved Amendment No. 48:
Page 2, line 22, leave out subsection (2) and insert—
("(2) An order under this section which extends the meaning of investment or extends the activities that are to constitute the carrying on of investment business—

(a) if the Secretary of State certifies that he considers it essential in the interests of investors that it has immediate effect, shall be laid before Parliament after being made and shall cease to have effect at the end of the period of twenty-eight days beginning with the day on which it is made (but without prejudice to anything done under the order or to the making of a new order) unless before the end of that period the order is approved by a resolution of each House of Parliament;

(b) in any other case, shall not be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.").

The noble Lord said: I believe this amendment to be one of some importance. It concerns the role of Parliament when the Government of the day wish to extend the meaning of "investment"—a matter that we have considered in some detail throughout this Committee—or the meaning or the extent of activities which constitute the carrying on of an investment to business.
Under Clause 3(2), as I have indicated, the means of dealing with these two problems are set out. The extension of the meaning of these terms could have significant consequences. If a person who was not authorised under the Bill entered into an agreement the subject matter of which was an investment, that agreement would be unenforceable by him. If the definition of "investment" could be extended with immediate effect on the making of an order, unauthorised persons could easily enter into agreements without realising the subject matter was within the expression "investment", or at least until some time later when they sought to enforce their agreement. Although there is power for a court to allow enforcement of investment agreement if a person reasonably believed that his entering into an agreement contravened the restrictions of the Bill, it is doubtful how far the court would allow a person to take advantage of his ignorance of the law.
It will be appreciated that statutory instruments can frequently be made without great publicity being given to their full effect. It will also be appreciated that statutory instruments sometimes have effects not intended by their draftsmen. To ensure that there is an opportunity for adequate consultation and publicity for orders extending the meaning of investments or investment business, I am proposing in this amendment that no order shall be made unless a draft has been approved by Parliament. This is the purport of my amendment which is set out in subsection (2)(b). Incidentally, this follows the procedure that is proposed in Clause 43(2) of the Bill.
It has to be recognised that there may be occasions when the Secretary of State is obliged to act immediately, but that should be subject to a special procedure to cover such a situation. That is how I have come to table subsection (2)(a) of my amendment, which deals with the special procedure when it is essential as certified by the Secretary of State in the interests of investors that these meanings or the extensions of these meanings should have immediate effect. Incidentally, the drafting of paragraph (a) follows in general terms the drafting of Clause 11(6).
I began by saying that I thought this amendment was one of some importance. We all know that statutory instruments do not get the scrutiny of this Chamber or of another place, and we all know that sometimes that can have a wide effect of which neither this Chamber nor another place gets proper notice. It is simply that the amount of scrutiny we can give to parliamentary legislation does not give us time to be alert to and follow the many statutory instruments that Ministers publish during the currency of a year. I beg to move.
The Deputy Chairman of Committees (Viscount Simon): I have to point out to the Committee that if this amendment or the alternative amendment, No. 49, is agreed to, I shall not be able to call Amendments Nos. 50 and 51.
Lord Morton of Shuna: As the noble Lord, Lord Hacking, has said, this is an important amendment. It is an important area of the Bill and it is important in our view on this side of the Committee that any
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amendment to what is to be the definition of "investment" should be fully studied by Parliament. Therefore, I would support this proposal.
Amendment No. 51 would appear still to be possible, with respect to the noble Viscount the Deputy Chairman, because it could be added to Amendment No. 48 since Amendment No. 48 ends with, and Amendment No. 51 starts with, the same word, "Parliament". I do not know whether the noble Lord, Lord Meston, wishes to move that amendment.
Lord Meston: I would venture to suggest that my Amendment No. 51 could stand, whatever happens to Amendments Nos. 48 and 49. Amendment No. 51 is concerned with parliamentary power to amend what might in itself be an amending statutory instrument. It is really on a different point altogether.
Lord Lucas of Chilworth: I am responding, I hope quite rightly (and the noble Lord, Lord Hacking, will correct me if I am wrong), to Amendment No. 48 and Amendment No. 53, since Amendment No. 53—
Page 2, line 39, at end insert ("and may contain such provisions having retrospective effect as the Secretary of State thinks necessary or expedient.")"—
is concerned with much the same subject area. I hope the noble Lord would agree. Perhaps at this time I could say to the noble Lord, Lord Meston, that his Amendments Nos. 51 and 126 can stand on their own although they have some bearing. This is important; I recognise that. I fully endorse everything that has been said about the need for prior consultation before any changes to the definition of "investment" or "investment business" are made.
It would be the Government's intention to undertake such consultation in all normal circumstances. It would also be the Government's intention to give adequate notice before any changes are brought into effect. Although this clause does provide that orders adding things to the definition shall come into force when made, it does not follow that the change needs to come into effect immediately.
The order could provide that the change be made with effect from some future date, and I should like to assure the Committee that this would be the normal practice. There may be some occasions, as the amendment itself recognises, when an immediate change in the definition is necessary in the interests of investors, perhaps to meet some unexpected development with serious consequences for investors or to prevent forestalling. Such occasions will be rare, but I think provision needs to be made for them, as the Bill itself does.
The Government's objectives and, I believe, the noble Lord's objectives are the same. But we do not believe that the amendment is necessary in order to achieve them. I am sympathetic to the concern which lies behind the second amendment, but I cannot commend to this Committee a provision which would allow the Secretary of State to amend retrospectively the legal definitions of "investment" and "investment business".
Perhaps, instead, I could draw the attention of the noble Lord, Lord Hacking, and that of the Committee, to the provisions of Clause 5 of the Bill. This clause

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deals with the civil consequences of contravening Clause 3. In particular, subsection (3) provides that a court may in certain circumstances allow an investment agreement to be enforced, even though it has been entered into by a person who should have been authorised but was not, and even though such an agreement would under the clause normally be unenforceable by the unauthorised person. The discretion that is given to the court should ameliorate many of the problems which may arise for those carrying on investment business during any period before an order made under Clause 2 comes into effect. We do, however, accept that the discretion given to the court by that clause may not be wholly satisfactory to do justice to all the parties involved.
I shall be explaining to the Committee, when we come to consider amendments put down by the noble Lord and others to Clause 5, that the Government are willing to consider the need for amendments to this end, but I do not believe now that the solution is to provide retrospective powers. I hope that the noble Lord, Lord Hacking, will withdraw his amendment, but if he does not I shall certainly wish to recommend to the Committee that his amendment be rejected.
Viscount Colville of Culross: Before the noble Lord, Lord Hacking, replies to that, since I, too, have an interest in Clause 5 and in what my noble friend has just said, I hope that we shall be a little careful about this. The words in brackets in paragraph (a) of Amendment No. 48 in the name of the noble Lord, Lord Hacking, talk about the parliamentary changes being, "without prejudice to anything done under the order",
which I think is then envisaged as having been subsequently cancelled.
There are a number of fairly complicated results of carrying out some kind of investment enterprise, or any transaction which counts as being investment business, and it is very important that there should not be a grey area to which neither the existing provisions in Clause 5 as they stand apply, or, at any rate, necessarily apply, nor is the situation clearly equivalent to that which it would have been if the order which is cancelled had not been made. In other words, there is a period of time during which transactions will be made under this amendment which will be neither one thing nor the other, and from everybody's point of view that is an extremely unsatisfactory system, even if you do not go so far as to provide in Amendment No. 53 for anything to be retrospective. I do not think the same point necessarily arises. You still have an intermediate area to which, in the end, nothing applies at all. I hope therefore that the noble Lord will not persist in that.
Lord Hacking: I do not intend to press this matter to a Division. It requires further consideration. I take the point that the noble Viscount, Lord Colville, made, but I would make the same point in reference to the drafting of Clause 2, because the effect is for orders to have immediate effect, although they can then cease to have effect after 28 days unless approved by each House of Parliament. If I understand that correctly, there is also the grey area, to which the noble Viscount referred, in the drafting of the clause, Therefore, it
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seems that the right thing for the Committee to do if to invite me—and I do not need the invitation, because I will do it anyway—to withdraw my amendment, but also to invite the noble Lord the Minister to look again at the drafting of Clause 2 and the consequences that can arise, as drawn to our attention by the noble Viscount, Lord Colville. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 49 not moved.]
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 50:
Page 2, line 24, after ("business") insert ("or the carrying on of such business in the United Kingdom").
On Question, amendment agreed to.
10.45 p.m.
Lord Meston Lord Meston moved Amendment No. 51:
Page 2, line 30, after ("Parliament") insert
("or is so approved with an amendment or amendments to which both Houses have agreed").
The noble Lord said: With the Committee's permission I should like to speak also to Amendment No. 126, which is in identical terms. The point and purpose of these amendments are, I hope, obvious. At the heart of these amendments is a point of principle of some importance not just to this Bill but to the whole present method of legislating in this country. Perhaps I may dwell on the general point for a moment. Clause 2 of the Bill is a typical example of modern enabling legislation. In fact it is a particularly good example because it gives us both common forms of subordinate legislation. Having provided in subsection (1) that:
"The Secretary of State may by order amend Schedule 1 to this Act",
it goes on to provide in subsection (2) that certain categories of order require an affirmative resolution. It then provides in subsection (4) that other categories of order are to be the subject of the negative resolution procedure. That is a good example of the practice of modern governments and of their draftsmen.
It must be accepted that as a matter of practical necessity there has to be enabling legislation but, quite obviously, the more there is, the greater the bulk of the concealed iceberg of subordinate legislation. This growing reliance on generalised enabling legislation and on delegated legislation creates in my view special problems as well as some disquiet in a democratic society.
Perhaps I may touch on a point mentioned by my noble friend Lady Seear earlier this evening. For both lawyers and laymen alike there is a basic problem of clarity, a problem in deciding what a Bill or an Act means if the intention of Parliament is not clearly foreshadowed by the primary legislation itself. It is now quite difficult in many cases to see how a Bill will work in practice if all one is told is that regulations will be made or an order will be laid. The noble Lord, Lord Lucas, will have heard that complaint uttered not least in proceedings on the Insolvency Bill through which we laboured some time ago.
The other problem thrown up is the relative weakness of the procedures for parliamentary scrutiny

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of delegated legislation—a point on which the noble Lord, Lord Hacking, touched a few moments ago. First, there are the limitations imposed by the conventions as to what this Chamber in particular should or should not do. Secondly, the only real scrutiny comes, as I understand it, from the Select Committee on Statutory Instruments, which looks at the technical proprieties of a particular order or instrument and not at the overall merits of that piece of subordinate legislation.
More importantly, perhaps, there is also the relative weakness of the negative resolution procedure itself. First and foremost it is an inflexible procedure; it is all or nothing. Parliament can annul an order, but it cannot amend an order. The result is that in practice attempts to invoke the negative resolution procedure are, generally speaking, infrequent; they rarely succeed; and if they are successful, the usual result is simply a re-presentation of the draft order, perhaps in a modified form.
These amendments propose a form of delegated legislation which is amendable by Parliament, or at least by a parliamentary committee. It is not a novel idea. I think there have been in this century 14 Acts which have conferred this amending power, the last one being in 1962. Indeed, I cannot claim any credit for the wording of this amendment. It is borrowed, word for word, from an amendment moved in 1976 on similar arguments more eloquently expressed by the noble Lord, Lord Elton, on the Public Lending Right Bill.
I venture to suggest that the idea is workable. Its feasibility is discussed very clearly, for those Members of the Committee who might be interested, in a memorandum by the noble Lord, Lord Henderson of Brompton, which is found annexed to a report of the Joint Committee on Delegated Legislation in 1971–72. These amendments will give some useful flexibility and will gently tip the balance a little away from the Executive and towards Parliament. I beg to move.
Lord Morton of Shuna: I support this amendment, and as I seem to have been provided with the same information as the noble Lord, Lord Meston, I merely refer also to the document and to Section 15 7(1) of the Government of Burma Act 1935, of which I am sure the noble Lord, Lord Lucas, is well aware. This gave power for Parliament to amend draft orders, and I understand was used in that way. I support the amendment.
Lord Lucas of Chilworth: My understanding is that it is the Government of India Act that might possibly be the most adequate precedent, but I do not think that we will get too far tonight by pursuing that.
The noble Lord, Lord Meston, seeks to introduce what I think we are all agreed is a virtually unprece-dented element into our proceedings—a power to amend secondary legislation laid before this House and another place. May I suggest that the procedures of your Lordships' House would require considerable revision if such a power were to be introduced. What would be the position if another place amended an instrument differently from your Lordships' House or
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chose to throw out an amendment on which this House was insisting? There would have to be an agreed procedure to be used on such occasions, and I suggest to the Committee that this would make the procedure for handling such secondary legislation very much like the procedure for a Public Bill.
As for the particular circumstance in which the noble Lord tables his amendment, I put this to him. The power to amend Schedule 1 by instrument is intended to provide a flexible means of coping with changes in investments. It should help to prevent this legislation being outflanked and made out of date because of the ingenuity of the financial services sector in devising new forms of an investment medium which may fall outside the terms of the existing schedule. Such an instrument will be essentially on technical matters.
Your Lordships' House may refuse secondary legislation laid before it for affirmative resolution. The Government, should they wish to proceed with the instrument, would then have to take account of comments made in your Lordships' House in presenting a revised instrument. The end effect within our existing procedures would be for an amended instrument to be approved.
The noble Lord, Lord Meston, supported as he is by the noble Lord, Lord Morton of Shuna, has raised an important question but it has ramifications which are extremely complex and it is a question which I suggest, with all sincerity, is impossible to resolve in our proceedings today, or perhaps in our proceedings over the next week or two; in fact, I would say within the context of this Bill. It is for those reasons that I invite the noble Lord to seek another way of introducing what he proposes. I do not think that the precedents he has quoted will help us very much, and I see extreme difficulty in introducing such a point in this Bill.
Lord Williams of Elvel: Before the noble Lord sits down, may I ask him whether he recognises that there is a problem in secondary legislation being produced which amends via the negative procedure the primary legislation which your Lordships' House is passing?
Lord Lucas of Chilworth: I have frequently from this Bench and even more frequently when I was sitting on that side of the Chamber, argued the various cases for affirmative or negative resolution. I accept that there are difficulties, but with all the difficulties of the practices which your Lordships have applied for some long time, I would suggest to the Committee that on balance the system works really quite well.
Lord Meston: I had a small bet with myself that somebody would mention the Government of Burma Act, and indeed in the same year there was a Government of India Act, so both were right. One has to keep a sense of proportion about subordinate legislation. In many respects it is a necessary evil. But what I have proposed in this amendment is not unprecedented. There is a fairly respectable list of Acts which have conferred on Parliament a power to amend. It fell into disuse not because it was a bad procedure but because it was potentially inconvenient to the executive arm of Government.

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I venture to suggest that the Bill that we are considering this evening is precisely the sort of legislation that would benefit from the power that I have put forward to the Committee in this amendment. Like any form of Parliamentary scrutiny, it would require certain safeguards and a measure of constraint, but certainly it is possible to have a flexible and feasible form of Parliamentary scrutiny along the lines that I have suggested.
I venture to suggest to the noble Lord, Lord Lucas, that he greatly exaggerates the problems of my proposal. Such an amending power in this sort of Bill is very desirable, particularly if the legislation is to last a long time, and in those circumstances probably it is very useful for Parliament to be able to have another look at it in the light of changed circumstances.
Of course I shall consider the implications of what the noble Lord, Lord Lucas, has said. I hope that he will consider the implications of this amendment. As we all agree, they go wider than the immediate confines of this Bill. The topic will not go away, but for the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 52 not moved.]
Lord Hacking Lord Hacking had given notice of his intention to move Amendment No. 53:
Page 2, line 39, at end insert ("and may contain such provisions having retrospective effect as the Secretary of State thinks necessary or expedient.").
The noble Lord said: The Minister has already passed some comments on this amendment of mine, although thus far I have not introduced the argument in support of it. However, since I am having to argue retrospectively, as it were, I draw attention to the problem that arose during our last discussion, when we were considering my earlier amendment, Amendment No. 48.
Arising directly out of Clause 2(2) there is the problem in this Bill of orders having immediate effect. There is also the further consequence that some of those orders will cease to have effect after 28 days. Therefore we have the problem of stranded persons who have entered into transactions in the interim period, and it may well be that powers are needed for retrospective legislation and retrospective primary legislation.
For that reason, although I intend not to move the amendment, unless any other Member of the Committee wishes now to speak, I would ask the Government to consider the matter again. It seems to be quite plain that, as drafted, Clause 2(5) does not contain any power for transitional provisions to have retrospective effect. That is a lacuna. For that reason I would urge the Minister to continue to give the matter further consideration.
Since no other Member of the Committee wishes to speak, and as I am speaking retrospectively to the Minister's remarks, I shall not move the amendment.
[Amendment No. 53 not moved.]
Clause 2, as amended, agreed to.
House resumed.

Western Isles Islands Council (Berneray Harbour) Order Confirmation Bill
Brought from the Commons; read a first time, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read a second time and reported from the Committee.

London Underground (Goodge Street) Bill [H.L.]
Committed to an Unopposed Bill Committee.
House adjourned at two minutes past eleven o'clock.

  MOD PROCUREMENT COMPETITION PRACTICE
  MOD PROCUREMENT COMPETITION PRACTICE
  LAMB: COMPENSATION FOR LOSS OF SALES
  LAMB: COMPENSATION FOR LOSS OF SALES
  DEPO-PROVERA: INDICATED USES
  DEPO-PROVERA: INDICATED USES
  CIVIL PROTECTION IN PEACETIME ACT: ADVICE TO LOCAL AUTHORITIES
  CIVIL PROTECTION IN PEACETIME ACT: ADVICE TO LOCAL AUTHORITIES
  AIR TRAFFIC DISTRIBUTION, LONDON AREA
  AIR TRAFFIC DISTRIBUTION, LONDON AREA
  HAZARDOUS WASTE: INSPECTORATE'S REPORT
  HAZARDOUS WASTE: INSPECTORATE'S REPORT