Sitting of 9 June 1986

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

    Unemployment
    Mrs. Clwydasked the Secretary of State for Wales what action he proposes to take on the current unemployment figures for Wales.
    The Secretary of State for Wales (Mr. Nicholas Edwards): The Government will continue the policies which have created low inflation and improved growth, established a wide range of employment and training measures, produced a steady improvement in infrastructure and the industrial environment in Wales, and have achieved success in attracting inward investment and stimulating the growth of small businesses. We intend to develop the important initiatives that we have announced to achieve urban renewal and to encourage the adoption of new technologies, adaptability and the response to market needs that are required if jobs are to be created.
    Mrs. Clwyd: Is the Secretary of State aware that male unemployment in Britain is now nearly twice as high as it is in France, Germany, Italy and the United States and that in my constituency, month after month, male unemployment continues to be the highest in Wales? Can the right hon. Gentleman tell my constituents when they can expect an end to their misery, apart from there being a change of Government?
    Mr. Edwards: We have created more new jobs in this country than have been created in the rest of the European Community countries put together. Because I understand the particular problems in the hon. Lady's constituency, we have pressed on with the construction of the important new road giving access to her constituency and launched the valleys initiative, which I am sure will play a major role in the Cynon Valley.
    Sir Raymond Gower: Has my right hon. Friend noted that his colleagues in the Cabinet have prophesied that a large number of jobs will emerge from the spectacular Channel crossing enterprise? In the Welsh setting, does he agree that many new jobs would emerge from a similarly spectacular undertaking, such as a second crossing of the Bristol channel, with or without a Severn barrage, and that that would form a valuable part of the infrastructure to which he referred?
    Mr. Edwards: My hon. Friend will be aware that guidance has been given on the opportunities to be gained in Wales from the Channel crossing. We are pressing on with the consultants' study on the possibility of a second Severn crossing, and we have received the consultants' report on a possible Severn barrage, which the Government are considering. My hon. Friend will know that this Government have already launched major initiatives in south Cardiff and elsewhere, which will provide considerable opportunities.
    Mr. Foot: The right hon. Gentleman talks about the valleys initiative making a major contribution to the creation of jobs. What figure does he have in mind? How soon will the improved figures operate and how do they compare with the figures for jobs still being lost to the valleys?
    Mr. Edwards: We have announced the valleys initiative and are now waiting for the first bids and proposals from the local authorities. This is just the start of that initiative. We shall want to reinforce it if successful bids are made. This is just one of a number of initiatives to help job creation in the valleys.
    Mr. Raffan: Following the recent great good news that 650 new jobs are to be created in the Delyn enterprise zone,

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    will my right hon. Friend congratulate Delyn borough council and its chief executive, John Packer, and his officials on their tremendous achievement in bringing about such a significant turnaround so soon after the closure of Courtaulds, Greenfield? Will he also pass on my sincere thanks, and those of the borough, to his extremely hardworking officials for their contribution? Will he join me in reminding the people of Delyn that those new jobs will be safe only as long as this Government remain in power, because of the Labour party's outright opposition to enterprise zones?
    Mr. Edwards: I specifically congratulated the Delyn borough council in the speech that I delivered at the opening of the new Shotton coating plant on Friday. The leadership which that local authority has shown in its management of the enterprise zone has been outstanding —and I said so. I also detailed the long list of major new investment decisions that have been announced in Clwyd in recent months.
    Mr. Geraint Howells: How many people will be made redundant in the Agricultural Advisory Service in Wales? How many will be made redundant by amalgamating Pwllpeiran Hill experimental farm with Trawscoed? For what reason is the right hon. Gentleman pursuing such a policy?
    Mr. Edwards: I shall write to the hon. Gentleman in more detail. Speaking from memory, 10 jobs will be lost in the Agricultural Advisory Service. I shall write to the hon. Gentleman about the farm question.
    Mr. Best: Does my right hon. Friend accept that the key to greater job prospects is improved communications and, to that end, that the dualling of the A55 along the north Wales coast will have a greater impact on job prospects for my constituency than any other measure? Will my right hon. Friend say a little more about the new initiative that he has just announced— the rural enterprise scheme— which I understand will appeal to the whole of my constituency?
    Mr. Edwards: My hon. Friend is quite right. The Conway crossing, which will be the largest single road scheme ever undertaken in this country, will add to the list of major projects to which I referred earlier. We have just launched the rural enterprise scheme with the new grants scheme — DRIVE —and shortly we shall launch the Agrifood initiative. Those are important aids to the difficult and changing situation in the countryside.
    Mr. John Morris: Does the Secretary of State expect Welsh unemployment figures to be up, or down, a year from now?
    Mr. Edwards: I follow the right hon. and learned Gentleman's practice of never making forecasts about unemployment figures.
    Mr. D. E. Thomas: Will the Secretary of State address himself to the issue of unemployment in Gwynedd in the context of the heavy reliance of that county on employment in the electricity generation industry? In view of the fact that neither this nor any other Government are likely to commission a further nuclear power station in Trawsfynydd, will the Welsh Office take an initiative to ensure alternative employment in that area on a long-term planning cycle?
    Mr. Edwards: I note what the hon. Gentleman said. I note also that in recent weeks and months he has been extremely careful in his choice of words about the possibility of a replacement for the nuclear power station. As he knows, the CEGB is involved in consultations on proposals for a replacement. It would be foolish to close the door to those options at this stage.
    Dr. Marek: Can the Secretary of State say how many of the jobs that have been created are part-time and how many are full-time?
    Mr. Edwards: I could not specify that immediately. I have not listed the number of jobs. Certainly quite a number of part-time jobs have been created. It is one of the changing patterns of employment and of occupation that we must recognise. Many people welcome the opportunity to do part-time work, as I am sure the hon. Gentleman recognises.
    Mr. Barry Jones: I remind the right hon. Gentleman that in Wales nine travel-to-work areas suffer unemployment in excess of 20 per cent. and a further four areas, at 19 per cent., are bordering on 20 per cent. So far as the Cabinet split is concerned, does the right hon. Gentleman agree with the Home Secretary that tax cuts are not everything? Can the people of Wales have a change of economic policy? If the right hon. Gentleman will not listen to the people of Wales, will be take note of election results and opinion polls, which suggest that the Conservatives, without a change in policy, will be wiped out in Wales?
    Mr. Edwards: Of course tax cuts are not everything. Tax incentives are required to get the maximum productive capacity out of this country. The Government are devoting record resources to the National Health Service. We have built 90 per cent. of the factories that are being built in Wales by the Welsh Development Agency. We are carrying out the largest road building programme ever undertaken in the Principality. We have built more modern hospitals and provided more medical facilities than any previous Government.

    Cyngor Dosbarth Dwyfor
    Mr. Wigleyasked the Secretary of State for Wales when he next plans to meet the officers or members of Cyngor Dosbarth Dwyfor about the housing priorities for the area.
    The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): I have no present plans to do so. However, the head of my Department's housing division met the chairman and members of the authority together with the chief executive and other officers last week.
    Mr. Wigley: When the head of the Department's housing division met the officers and members of the Cyngor Dosbarth Dwyfor last week, did he understand that it was not Dwyfor's priority to build 700 second homes at Morfa Bychan on land that is designated as a site of special scientific interest by the Welsh Office? That scheme is contrary to the local plan approved by the Welsh Office and to the wishes of the local people. What will the Welsh Office do to safeguard the local community from the ravages of those property speculators?
    Mr. Robinson: The hon. Gentleman will be aware from our correspondence that that is a matter for the local

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    planning authority, Dwyfor district council. Under section 45 of the Town and Country Planning Act 1971 the authority can make an order to revoke the outline planning permission granted in 1964.

    Welsh Water Authority
    Mr. Rogersasked the Secretary of State for Wales when he next proposes to meet the chairman of the Welsh water authority to discuss privatisation of the industry.
    Mr. Barry Jonesasked the Secretary of State for Wales when he next proposes to meet the chairman of the Welsh water authority to discuss the privatisation of the industry.
    Mr. Mark Robinson: My right hon. Friend and I met the chairman of the Welsh water authority on 25 March and I met him again on 20 May. We will continue to keep in close touch on water privatisation matters.
    Mr. Rogers: As the Government have abolished the water equalisation grant and as there are now wide differences in water charges between England and Wales, what proposals does the Secretary of State have to alleviate the problems facing the Welsh people, or is he going to let them down, as he usually does?
    Mr. Robinson: Charges for 1987 and 1988 will be set in the same way as for the current year, with the financial target order subject to parliamentary approval. In subsequent years, under privatisation, the licence charges will fall to the control of the independent regulator, known as the Director General of Water Services.
    Mr. Jones: The water industry should not be the source of profit. Does the hon. Gentleman accept that, following the Chernobyl disaster, when north Wales was contaminated, we need water under public ownership so that immediate and cohesive action can be taken in response to any emergency? What is the likelihood of the Secretary of State for the Enrvironment hurrying through privatisation of water so that the Chancellor has the means to make tax cuts? Does the Minister agree that, before these measures go forward, they should be put to the people of Wales at a general election, when the hon. Gentleman will find that there is no mandate for these proposals?
    Mr. Robinson: It comes as no surprise to me that the hon. Gentleman should try at the Dispatch Box to claim that profit is a bad thing and not to be commended. We believe that the water industry, like any industry, should be managed so that it can produce a profitable return, which of course helps investment.
    Sir Anthony Meyer: What can my hon. Friend say to reassure those of my constituents who are worried that privatisation may mean that tariffs for the very large users will be reduced and tariffs for the small users will be correspondingly raised?
    Mr. Robinson: Those matters can be controlled when the licence for the new water companies is drawn up. Those aspects will come under the protection of the Director General of Water Services.
    Mr. Gwilym Jones: What consideration has been given to the water authorities' charging system after denationalisation in the light of the Green Paper on reform of rates?
    Mr. Robinson: We are, of course, looking at that matter. We are considering also the question of a wider extension of metering. Recently, we issued a consultation paper on that aspect.
    Mr. Gareth Wardell: When the hon. Gentleman next meets the chairman of the Welsh water authority, will he be able to give him an assurance that tidal, drinking and river water will be considerably improved in quality as a result of privatisation? Will the hon. Gentleman accept the recommendation of the Royal Commission on environmental pollution and the result of the confidential review of environmental policy by the central policy unit of the Department of the Environment, that the current polution control functions of the water authorities should be transferred and monitored by a new environmental inspectorate?
    Mr. Robinson: We believe that under these proposals the water environment regime will be strengthened. For that reason, we recently issued "The Water Environment: the Next Steps", which is open to consultation. There is no question of environmental standards being changed under privatisation. They will be maintained, and, indeed, strengthened.
    Mr. Grist: Is my hon. Friend able to say how my constituents, particularly my poorer constituents, will benefit from the denationalisation of water?
    Mr. Robinson: By allowing the water authorities to go to the capital market, denationalisation will enable them to raise more funds for capital development. It will also encourage a more efficient water regime, which should lead to lower costs and charges.

    Powys (Mental Health Care)
    Mr. Livseyasked the Secretary of State for Wales if he will make a statement on the reorganisation of mental health care in Powys.
    Mr. Mark Robinson: Planning the reorganisation of mental health care in Powys is primarily the responsibility of Powys healh authority, in consultation with Powys county council where care in the community is involved.
    Mr. Livsey: I accept that care in the community is extremely important for the elderly, hut does the Minister not accept that increasing numbers of elderly people will be living in Powys in the future and that they will require greater resource funding? The proposals contained in the recently published health report for Powys show that beds for the long-term and acutely mentally ill at the Mid-Wales hospital, Talgarth will probably amount to 80. We believe that this is far too low a number for expert treatment of the acutely mentally ill and that the level should be held at 200, because in that hospital there is a 95 per cent. discharge rate of those patients within 12 months.
    Mr. Robinson: The hon. Gentleman has asked two questions. It was precisely for that reason that my right hon. Friend announced an initiative for the elderly, during the proceedings on this subject in the Welsh Grand Committee, that amounts to additional resources of between £1 million and £5 million over the next three years, and Powys will be a beneficiary.
    As for the mental illness services and the mental handicap strategy in Powys, the Government have

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    introduced a comprehensive 10-year policy and extra resources are being made available. For Powys, they amount to £215,000 in the current year.
    Mr. Rogers: In any reorganisation of mental health care in Powys, will the Minister ensure that any clinical trials of drugs are carried out strictly in accordance with the protocol that has been arrived at between the BMA, the medical profession and the DHSS? In ensuring that these trials are properly carried out in hospitals, perhaps he will apply better standards there than he seems to care about for trials that take place outside hospitals.
    Mr. Robinson: Drug trials are a matter for the medical profession and the BMA.
    Mr. Wigley: In relation to the substantial pressure on the community in Powys if people are moved, as they should be, from long-stay hospitals into the community, will the Minister give an assurance that additional resources will be provided, over and above those that have been earmarked for mental handicap services, for mental illness services in Powys?
    Mr. Robinson: Once again, in terms of our mental illness strategy, we are prepared to look at projects that are put to us by health authorities, and funding can be made available.

    Roads
    Mr. Bestasked the Secretary of State for Wales when he expects to make a statement on responses to the consultation paper, "Roads for Wales—the 1990s and Beyond"; how many responses he has received; what has been their nature; and how many responses he has received about roads on Ynys Môn.
    The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): I have received over 150 responses covering a wide range of issues affecting both trunk and county roads. About 30 concern roads on Ynys Môn. I am still considering the responses.
    Mr. Best: My hon. Friend will know of my efforts to try to secure bypasses around the five villages on the A5 on Ynys Môn and also my thanks to him for his welcome statement during the last Welsh Question Time that he would look at the possibility of a bypass around Holyhead, bearing in mind the massive increase in traffic that that town is likely to encounter during the next few years. Is my hon. Friend able to say when he will be in a position to appoint consultants?
    Mr. Roberts: No one has pressed harder for improvements to the A5 on Anglesey than my hon. Friend. He will be aware that the consultants' report covers the five villages of Pentre Berw, Gaerwen, Gwalchmai, Bryngwran, Caergeiliog and Valley. However, I do not believe that it is possible to look at the A5 in Anglesey without considering Holyhead, and that we shall do.
    Mr. Raffan: Will my hon. Friend tell the House what representations he has received on the urgent need to create an effective link between the A55 and the A548 to ensure that future industrial growth in Delyn will not be hampered? Will he also tell the House whether the Government would be willing to contribute towards the cost of the evaluation study of the proposed link, which Clwyd county council has promised to undertake?
    Mr. Roberts: Among the 150 responses that I have received, I do not recall receiving the one that my hon. Friend mentions. Many of the people who responded are anxious to improve our communications infrastructure in order to assist industry. Of course, we pay special attention to the requirements for industrial developments, including those in my hon. Friend's constituency.

    Welsh Water Authority
    Mr. Geraint Howellsasked the Secretary of State for Wales when he now expects the Welsh water authority to be privatised.
    Mr. Robinson: It is expected that all water authorities will change their status to water supply plcs on the same day in 1987 following passage of the necessary legislation.
    Mr. Howells: Can the Minister give an assurance to the people of Wales that if, and when, the Welsh water authority and the assets of the Severn-Trent water authority in Wales are privatised, the people of Wales will have the first opportunity to buy the shares, or will part of the assets be handed back to the city of Birmingham council?
    Mr. Robinson: There will be every opportunity for the people of Wales and for those who work for the Welsh water authority to buy shares in the company when it comes to flotation.
    Mr. Ray Powell: When the Minister talks to the chairman of the Welsh water authority about privatisation, will he also discuss security? Is he aware that last week in my constituency a boy of eight called Leighton Jenkins was found at the bottom of a sewage tank after 10 days of a massive search by police and residents in the Bettws area? Will the Minister see that an inquiry is conducted to ensure that in future all sewage and water works are properly secured against young children? Will he also ensure that there is an inquiry into the death of this constituent of mine, Leighton Jenkins?
    Mr. Robinson: I cannot comment on the case of Leighton Jenkins, because I understand that it is still the subject of a coroner's inquiry. Security at Welsh water authority facilities — indeed, at all water authority facilities — is important, but it is a matter for the authorities themselves.
    Mr. Best: Can my hon. Friend assure the people of Wales that after privatisation the interests of the consumer will be better protected by the Director General of Water Services than they are at present?
    Mr. Robinson: I can tell my hon. Friend that the consumer will be better protected by the Director General of Water Services, and also by the procedures that we are instituting for consumer protection. It is intended to retain a simplified version of the present system, with a regional committee supported by three divisional committees in Wales.
    Mr. D. E. Thomas: I am sure that the Minister will extend the sympathy of the House to the family of Leighton Jenkins, who was the victim of this appalling tragedy. Does the Minister accept that the section of the water authority land and reservoir facilities at Llyn Celyn in the Meirionnydd Nant Conwy constituency has long been the subject of contention in Wales? Does he also

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    accept that that reservoir was built by Liverpool corporation against the express wishes of the majority of the Welsh population and Welsh Members of Parliament? Finally, does he accept that there are people in the community who will not accept the re-privatisation of that structure and will want it to remain within Welsh public ownership?
    Mr. Robinson; I extend deepest sympathy to the parents of the child. The security of children at any water authority installation is a matter of great concern, and I know that the water authorities do their best to try to ensure that children are protected. When problems occur the authorities will, of course, take the necessary action to try to improve the situation.
    I do not accept that the privatisation of the water industry will be disadvantageous to the people of Wales. It will be a positive measure and will not only improve the water service throughout the Principality, but will lead to improved investment and progressively lower charges in terms of inflation.
    Mrs. Clwyd: How can the Minister square his remarks about water privatisation with the document recently presented by Arthur Collins and Company about the privatisation of water services? That document is an independent financial appraisal of privatisation, and its authors have come to the conclusion that a private monopoly of water will lead to higher prices or poorer services, or probably both.
    Mr. Robinson: All sorts of bodies can reach conclusions of that nature, but the Government have reached the conclusion that the water industry w ill he better off in the private sector and that it will open up great opportunities for the water industry. That is why we are pursuing that course.

    Welsh Development Agency
    Mr. Knoxasked the Secretary of State for Wales what has been the total expenditure of the Welsh Development Agency since May 1979.
    Mr. Nicholas Edwards: From 1 April 1979 to 31 March 1986 gross expenditure by the Welsh Development Agency totalled some £520 million.
    Mr. Knox: What has been the average spent by the authority each year since the Government came into office and how does that compare with the average spent each year under the Labour Government?
    Mr. Edwards: From April 1979 to March 1986 expenditure was at an average of £74·2 million a year, which compares with an average of £34·8 million a year under the previous Labour Government.
    Dr. Roger Thomas: Will the Minister help us decide which are the correct figures for the numbers of unoccupied WDA factories in the borough of Dinefwr? Is it seven out of 27 post-1979, as the Welsh Grand Committee was told by the Under-Secretary, or 14 out of 24, the figure given to me by the chief executive of Dinefwr borough council and as counted by myself the other afternoon?
    Mr. Edwards: If we are asked a specific question about that particular point, we shall provide an answer.
    Mr. Barry Jones: Why, since 1979, has the right hon. Gentleman reimposed real terms cuts on the agency's
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    budget while, at the same time, we have seen unemployment soar by 130 per cent.? Will he now sanction urgently more cash for the valleys' initiative, for the advance factory programme and for venture capital?
    Mr. Edward: It is simply not true, as I told the hon. Gentleman in the Welsh Grand Committee, to say that there have been real terms cuts. He has made comparisons with the period when we had made substantial allocations to deal with the steel closure areas. As I have already told the House, we have built 90 per cent. of the advance factories built by the WDA. The WDA continues to have an important role, but we debated those matters at great length in the Welsh Grand Committee only the other day.
    Mr. Wigley: As only £500,000 of the £25 million for factory building in the WDA's current programme will go to Gwynedd, will the Secretary of State have a word with the chairman of the WDA to make sure that the unemployed in Gwynedd get a fair crack of the whip?
    Mr. Edwards: One feature of the WDA'S management of the factory programme is to keep the programme under continual review and to respond to need as it arises. In the Welsh Grand Committee debate I announced some additional factory provision in response to represenations that had previously been made and I shall draw the agency's attention to the representations now made by the hon. Gentleman.

    Griffiths Report
    Mr. Colemanasked the Secretary of State for Wales what representations he has received concerning the implementations of the Griffiths report in the National Health Service in Wales.
    Mr. Mark Robinson: Since June 1984, when the circular setting out the arrangements for implementation of the recommendations of the Griffiths report in Wales was issued, my right hon. Friend has received some 46 representations about various aspects of the matter, from a variety of sources.
    Mr. Coleman: Is the Minister aware that hon. Members have received considerably more representations than that from members of the professions in the NHS, such as nurses, medical authorities, scientists and physiotherapists, all of whom are expressing their anxieties at the manner in which the creeping bureaucracy is impinging upon their professional expertise in the NHS? What can that bureaucracy gain by sending people on expensive trips to the United States to find out how to run a national health service? What does that country know about it?
    Mr. Robinson: On the creeping bureaucracy point, it is worth noting that management costs in the NHS in Wales have fallen from 5·2 to 4·3 per cent., even after the implementation of the Griffiths proposals. We have great confidence in the management procedures that are being put into practice in Wales. It is right for organisations to express their fears, but it is easy to leap to conclusions before the benefits of the implementation of such a management system are fully felt.
    Sir Raymond Gower: Is it not a fact that when the management proposals in the Griffiths report were first promulgated there was a good deal of misunderstanding about them and that many in the medical and nursing professions felt that they would be excluded, but that that has not been the case?
    Mr. Robinson: My hon. Friend is absolutely right. We have heard that nurses are feeling upset, but a chief administrative nursing officer has been appointed in every health authority in Wales, director of nursing services posts are being established and no fewer than four nurses have been appointed to unit general manager posts in Wales.

    Education Provision
    Mr. D. E. Thomasasked the Secretary of State for Wales when his Department expects to receive the report of Her Majesty's Inspectors' latest investigation into the effects of local education authority expenditure policy on education provision in Wales.
    Mr. Wyn Roberts: My right hon. Friend has received the latest report "The Effects on the Education Service in Wales of Recent Local Authority Expenditure Policies: An Assessment by Her Majesty's Inspectorate" for the academic year 1984–85. It was published on 5 June and I have placed a copy in the Library.
    Mr. Thomas: I congratulate the Welsh Office on publishing the report on the Friday before I asked my question in the House. Will the Minister ensure in future that the Welsh report is published in the current academic year or at least in the following year? We have the English report for 1985–86, but we are still awaiting the Welsh report for that period. Will the Minister accept that the latest Welsh report is a devastating critique of the Government's policies and that it shows how the fabric of Welsh education — the buildings — and the available resources are crumbling during his tenure?
    Mr. Roberts: I think that the hon. Gentleman is wrong about the report. Our report corresponds to the English report that was published a short while ago. Incidentally, it is in our discretion whether we publish the report and when it is published.
    I fear that the hon. Gentleman has clearly misunderstood the report, because its emphasis is on the fact that the quality of the provision is decided not just by the level of financial resources but, crucially, on how effectively available resources are managed. [Interruption.] I am interested to see the hon. Gentleman showing us a grotesque newspaper report of the document. I hope that he will read the document itself.
    Mr. Rowlands: Is the Minister aware that, because of the lack of resources, schools are ill-prepared for the new examination? Many schools, including all those in my area, have not even seen the syllabuses, the teachers have not been trained, and above all, the parents have been left in the dark about the character and nature of the new examination system. Does the hon. Gentleman think that that is the best way to produce a major educational reform?
    Mr. Roberts: It is important for the House to realise that record high resources are being devoted to the education service in Wales. We are giving £659·5 million in rate support grant in the current year and pupil numbers have been falling. As for preparations for the GCSE, I know that 36 of the 47 syllabuses have gone out to local education authorities, and the remainder will be going out very shortly. There have been more preparations and more expenditure for this examination than for any previous examination.
    Sir John Stradling Thomas: Will my hon. Friend confirm that the opposition and other critics are as muddled as usual about the great problem of resource management facing local education authorities? I do not underestimate that problem, but will my hon. Friend confirm that he has discussed the matter with every local education authority in Wales and that on their own figures —not on Welsh Office figures—there has been no cut in resources? However, the problem of resource management remains to be resolved.
    Mr. Roberts: My hon. Friend is absolutely right. In real terms we were spending £100 more per secondary school pupil in 1984 than in 1979–80. My hon. Friend is right to say that the problem is not the size of the resources, but managing them and getting value for money in education.
    Mr. Barry Jones: The Minister's replies are unconvincing. Is he not ashamed of the fact that, after seven years, we now have worried parents, disadvantaged pupils and very, very shabby schools? In our county the school service is decaying while, under this Minister, the private sector has obtained enhanced grants. That is a disgrace.
    Mr. Roberts: We have at least had the courage to publish such reports. Indeed, it is the fourth report to be published by the Government. The Labour Government did not have the courage even to commission a report. The report contains some very valuable issues for the consideration of local education authorities. Given that report, and the report of the Audit Commission, I repeat that sufficient resources are being devoted to education. The problem is getting proper value for the money spent.

  CHURCH COMMISSIONERS

    Redundant Churches (Southwark)
    Mr. Peter Bruinvelsasked the hon. Member for Wokingham, as representing the Church Commissioners, how many redundant churches there are within the diocese of Souhwark.
    Sir William van Straubenzee (The Second Church Estates Commissioner, Representing Church Commissioners): There are currently five redundant churches in the diocess of Southwark where the future of the church still has to be settled.
    Mr. Bruinvels: Although I am pleased that there are only five redundant churches in the diocese of Southwark, may I ask whether my hon. Friend read an article in the Church Times of 9 May, which said that the incumbent of St. Swithin's church, Lewisham, the Rev. Barry Naylor, celebrated a holy communion service with the Rev. Kate Merriman? That is contrary to canon law and, in my submission, also contrary to the Ecclesiastical Jurisdiction Measure. Does my hon. Friend agree that should more——
    Mr. Speaker: Order. Did that take place in a redundant church?
    Mr. Bruinvels: Does my hon. Friend agree that if more such cases occur, many more churches may become redundant, and that the Church of England will be placed very much in jeopardy if more women are ordained?
    Sir William van Straubenzee: I must make it clear that the Church Commissioners have no responsibility whatever for what takes place ecclesiastically in the diocese of Southwark or in any other diocese.
    Mr. Simon Hughes: When it seems that churches may become redundant in any diocese, will the Church Commissioners contemplate allowing them to be used by other Christian denominations before they consider their use for totally secular purposes? Often, a multi-denominational use would allow a church building to retain its Christian purpose while not necessarily incurring a sole liability on the part of the Church of England.
    Sir William van Straubenzee: Yes, Sir. I have often said in the House that using a church for another Christian purpose is the most favoured use of all. The hon. Gentleman may be glad to know that of the 38 churches in the diocese of Southwark to he declared redundant since 1 April 1969, 12 are now being used for worship by other Christian communities, one forms part of a new Church of England place of worship, and one is being used as a private chapel. In other words, almost half of them are being used for Christian purposes.

    Building Conservation
    Mr. Chapmanasked the hon. Member for Wokingham, as representing the Church Commissioners, if the Church Commissioners have made any assessment of the state of conservation of those buildings under their control which enjoy exemption from listed buildings control.
    Sir William van Straubenzee: The Church of England's statutory systems for the care and control of its churches include the regular quinquennial inspection of every church by an architect and ensures that neither the fabric nor contents can be altered without authority. Further, the Pastoral Measure contains statutory procedures for dealing with redundant churches. A listed Church of England church thus has a three times better chance of avoiding demolition than does a secular listed building.
    Mr. Chapman: I am grateful to my hon. Friend for that information. It confirms that the Church of England's record on protecting its ecclesiastical architectural heritage is much more successful than that of the country in protecting its listed buildings. Does my hon. Friend agree that any attempt by the House to get rid of the ecclesiastical exemption would be a bad thing and would be — to use a perhaps not inappropriate phrase —tempting providence?
    Sir William van Straubenzee: I am grateful to my hon. Friend for paying tribute to the Church of England's strict discipline in relation to its great heritage of ancient buildings. I share his view that that is a better form of protection than that provided by the state.
    Mr. J. Enoch Powell: Will the Church Commissioners take steps to ensure that the visitation by archdeacons is used, as it is intended to be, as a means of ensuring that there are not continuing defects that will lead eventually to expensive disrepair?
    Sir William van Straubenzee: When I reply that I believe so, it is because the Church Commissioners as such —as
    I know the right hon. Gentleman appreciates—have no
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    direct responsibility for the work of the archdeacons. However, the right hon. Gentleman draws attention to one of the safeguards to which I referred in my main answer.

    Equal Pay
    Mr. Greenwayasked the hon. Member for Wokingham, as representing the Church Commissioners, what progress has been made with the implementation of equal pay policies for employees of the Church Commissioners; and if he will make a statement.
    Sir William van Straubenzee: The Church Commissioner's employees are paid in accordance with Civil Service scales. The implementation of an equal pay policy was completed in 1961.
    Mr. Greenway: Do any open or clandestine plans exist to pay women priests and bishops equally with existing priests and bishops? Does my hon. Friend expect that to happen within his lifetime?
    Sir William van Straubenzee: As to my lifetime, I am afraid that I can give no forecast whatever, but at the present rate of questions to the Church Commissioners I do not think that it will be very long. On the more serious topic, there is nothing clandestine about the activities of the Church Commissioners. They deal with the law as it is, and at present there are no female priests or bishops.

  HOUSE OF COMMONS

    Refreshment Department
    Mr. Wigleyasked the hon. Member for Berwick upon Tweed, as representing the House of Commons Commission, how many of the supervisory posts in the Refreshment Department are currently held by women and how many by men; and, of those appointed to such posts since 1979, how many were women and how many men.
    Mr. A. J. Beith (On behalf of the House of Commons Commission): Of the 47 supervisory posts in the Refreshment Department, 10 are currently held by women and 37 by men. No figures are available for 1979, which was before the Refreshment Department became a Department of the House. Since 1980, 22 men and nine women have been appointed to supervisory posts.
    Mr. Wigley: Within the figures that the hon. Gentleman has just given, how many positions as head waiter within the restaurants of the House are held by women? If, as I suspect, the answer is very few indeed, does that not show discrimination against women? Is he satisfied with that position?
    Mr. Beith: I cannot give the hon. Gentleman the precise figure without notice. However, the larger part of the imbalance between women and men is accounted for not by head waiters but by the staff of chefs, where traditionally the largest number of people applying for those supervisory posts are men, and there are few women applicants. However, I shall look at the points made by the hon. Gentleman.

  WALES

    Water (Privatisation)
    Mr. Gareth Wardellasked the Secretary of State for Wales what assessment he has made of the implications for job creation of the proposed privatisation of water in Wales.
    Mr. Mark Robinson: The future development of the water industry will be a matter for the new water companies. The Government believe, however, that there will be opportunities to create new jobs through enterprise in such areas as tourism, leisure and a range of water appliances.
    Mr. Wardell: As the Under-Secretary said in the House on 7 February 1985 that the water authorities were not state-owned but publicly owned, does he think that there would be better opportunities to create jobs if the shares in the new privatised companies were distributed as public wealth to the majority of householders who drink, bathe, fish and flush?
    Mr. Robinson: That is an interesting proposal from the Opposition Benches. It is, I suppose, a new variation of give-away through state control. The Government believe that the way forward is to give the people of Wales an opportunity to own shares in the water industry. Currently, under the Water Act 1973 the Welsh water authority — indeed, all water authorities — is in the ownership of the Government.

    General Certificate of Secondary Education
    Dr. Roger Thomasasked the Secretary of State for Wales what is Her Majesty's Government's policy towards voluntary donations by parents towards the cost of introducing the general certificate of secondary education.
    Mr. Wyn Roberts: It is the statutory duty of local education authorities to provide suitable education for their pupils. If voluntary contributions are invited it should be made clear that no child will suffer any detriment because his or her parents are unable to make those contributions.
    Dr. Thomas: Is it not the position that headmasters in Wales have reached the stage where they are perhaps panicking and demanding of parents between £5 and £10 per pupil? If these payments are not made, there is no guarantee that the new examination will be introduced successfully.
    Mr. Wyn Roberts: I disagree with what the hon. Gentleman has said about the introduction of the new examination. We are now getting the will and the commitment of the teachers. I have already said that the syllabuses are out. Thirty six out of 47 have been issued and the remainder will be out shortly. I stand by what I have said about parental contributions. There may be parental contributions, but that does not mean that children whose parents are unable to contribute should suffer.

    Young People (Job Vacancies)
    Mr. Ron Daviesasked the Secretary of State for Wales how many job vacancies for young people presently exist in Wales.
    Mr. Wyn Roberts: There are approximately 11,000 current job vacancies registered at jobcentres and careers offices and these are believed to represent only about a third of the total number of vacancies available. Information held centrally does not specify whether there are age restrictions on particular vacancies.
    Mr. Davies: Does the Minister accept that if he were to take the trouble to find the exact figures he would realise that there are virtually no job opportunities for young people, especially in south Wales? Does he understand that this is in stark contrast to the propaganda that he and his colleagues in the Welsh Office keep trotting out week after week?
    Mr. Wyn Roberts: I think that it is the hon. Gentleman who is trotting out propaganda. There are jobs available for young people in south Wales. It is estimated that about 49 per cent. of young people who go on the YTS are found to have jobs three months after leaving the scheme. There has been an extension of the YTS and a number of relevant announcements were made in the Budget statement, including the extension of the enterprise allowance scheme and the introduction of the new workers scheme, both of which will be helpful to young people.

  HOUSE OF COMMONS

    Sitting Days
    Mr. Peter Bruinvelsasked the Lord Privy Seal if he has any plans to seek to reduce the number of sitting days per Session.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): No, Sir.
    Mr. Bruinvels: I was one of the hon. Members who successfully reduced the number of days that the House sat last week, and I deeply regret that there is to be no change in the number of days that the House sits each year, bearing in mind that it sits for more days than any other Parliament in western Europe. On average, the House sits 170 days a year. Will my right hon. Friend give serious consideration at least to reducing some of the business that is brought before the House and thus reducing the number of days that we sit each year?
    Mr. Biffen: If my hon. Friend's contribution to shortening the number of days on which the House sits was to speak at 8·28 in the morning for one minute, I must say that that was a well-judged achievement. I must tell him that I do not think that the House would wish its arrangements to be seriously disturbed unless there was an entirely different understanding about how we process legislation. That is not something that is merely in the keep of the Government or supporters of the Government. The number of days on which the House has sat has remained broadly the same over the past decade, but my hon. Friend has raised an issue that can always be considered by the Procedure Committee.
    Mr. Foot: As the Leader of the House has followed with such obvious care the detail of what was said throughout that night of squalor and disgrace last Thursday, will he tell us why he did not at some stage in the proceedings step in to try to prevent what was happening? None of us can believe that he wanted the House to demean itself in such a way. We have been told that the Prime Minister was in

    17
    favour of the course that was taken, but we cannot believe that the right hon. Gentleman was. Why did he not intervene to stop what was happening when he knew that he had the power to do so?
    Mr. Biffen: The right hon. Gentleman is overplaying that point. I took care to note the contribution of my hon. Friend the Member for Leicester, East (Mr. Bruinvels) because he is a persistent questioner. I thought it only courteous to acquaint myself with his recent contribution to reducing the number of days on which the House sits. Unlike the right hon. Gentleman, probably, I was in the House throughtout Thursday evening. I noted that no attempt was ever made to move the closure of any of the debates. That is the answer to those who believe that there was a filibuster.
    Sir John Biggs-Davison: Will my right hon. Friend—a Tory and a churchman—seek to ensure that once again Whit Monday shall not be a sitting day?
    Mr. Biffen: I must confess that, of all the supplementary answers that have been prepared for me on this subject, doubtless because some of my advisers have doubts about my being either a Tory or a churchman, they had not anticipated that, but I shall certainly consider it.
    Mr. Shore: The hon. Member for Leicester, East (Mr. Bruinvels) has brazenly confessed his own role in the proceedings last Thursday night, which resulted in the loss of one day's sitting. The Lord Privy Seal has been much more coy, but will he now take this opportunity to express his regret and condemnation of what was a disgraceful manoeuvre, and for the part played in it by his right hon. Friend the Chief Whip, and, indeed, the Prime Minister? Will he assure the House that, if he has any plans to reduce the number of sitting days, they will not include the west Lancashire solution —the organised filibuster to wipe out a private Members' day?
    Mr. Biffen: No, I shall give none of those undertakings or signs of contrition which have been sought by the right hon. Gentleman. Indeed, if we are to give the matter any degree of seriousness, I should say that the House would be well served by referring to the Crossman diaries, and to Friday 26 March, when they elaborated a stratagem ——
    Mr. Campbell-Savours: Two wrongs do not make a right.
    Mr. Biffen: No. It is a little too sensitive. It involved a stratagem which I think redounds with very little credit upon those who took it.
    Mr. Simon Hughes: On the same subject, I hope that, none the less, the Leader of the House will accept that there is a difference between using parliamentary tactics to lose public or Government business, and using Government party tactics to obliterate private Members' business, from whichever party the private Member comes. Is the right hon. Gentleman prepared at least to look at the mechanisms so that the limited part of our time given to private Members is protected in future against any mechanism of contrived extension of Government or other official business?
    Mr. Biffen: I repeat that I stand here with no sense of contrition about what happened last week. Those who want to engage in any historical analysis could well profit from looking at what happened on the famous occasion
    18
    on 26 March 1965. If the hon. Gentleman believes that this is a point of substance, he has his own remedy, by turning to the Procedure Committee.
    Sir David Price: Does my right hon. Friend agree that the best way to achieve what my hon. Friend the Member for Leicester, East (Mr. Bruinvels) requires would be for the House to concentrate more upon the quality rather than the quantity of legislation? With that aim in mind, will my right hon. Friend explain to my right hon. Friends on the Front Bench and to the parliamentary draftsmen that the Almighty, in his legislation, was rather more precise and succinct than the Government are today, and that the Almighty did it all in 10 Commandments— 10 clauses — and did not need to go to schedules or statutory instruments?
    Mr. Biffen: I note what my hon. Friend says. I am sure he will realise that those words have echoed down the centuries. Meanwhile I suggest that in the usual channels we have the slogan, "Nearer my God to Thee."

    New Parliamentary Building
    Mr. Greenwayasked the Lord Privy Seal it' he will make a statement on progress with plans for the new parliamentary building; and if he will provide an estimate of its costs; and if he will make a statement.
    Mr. Biffen: Detailed plans for the redevelopment of the area between Parliament Street and Cannon Row are now well advanced. Construction work is expected to start next year for completion in 1990. The overall cost is estimated at £31·5 million at cash prices. Plans for the second phase, comprising the area between Cannon Row and the river, are still at an early stage. It would be premature to give a figure of the likely cost.
    Mr. Harry Greenway: Can my right hon. Friend tell the House what facilities will be transferred from this building to the new parliamentary building'? In considering the further use of the vacated space in these buildings, will he take account of the fact that many meetings cannot take place in the House because there is so much pressure on Committee Rooms from party Committees and all-party Committees? Will he further consider the need for facilities for interviews between hon. Members and their constituents, particularly because now, on days when there are big lobbies, people have to see constituents in corridors, in quite impossible circumstances?
    Mr. Biffen: The accommodation that will be made available by the new building should offer offices for 60 hon. Members and for 100 secretaries. The Services Committee has been considering space being made available by people leaving the Palace of Westminster for the new building. I believe that it will intend that, as far as possible, priority will be given to Members' accommodation rather than additional Committee rooms.
    Mr. Boyes: May I offer my usual greetings to the Lord Privy Seal from my dark, damp, dingy desk in the dump known as the Cloisters? Before he gives me his usual answer, which is that he spent many happy hours there, may I offer him a swap for a fortnight so that he can remember how happy were his hours down in the Cloisters, while I work in his office? On a more serious note, is he aware that in Strasbourg, when the new, directly elected Members of the European Parliament arrived, they

    19
    did not have any offices, but that within nine months offices were provided for 500 Members? Why is it taking so long to build these offices, or is this just another Government filibuster?
    Mr. Biffen: The construction time for the premises is going broadly to forecast. As for the hon. Gentleman's first question, I only hope that, when the time comes, he will appreciate the considerable expansion of offices which are implicit in the Bridge street site and that perhaps he will be able to have happier accommodation, although I have to say that his present accommodation was perfectly happy in my day.

    Oral Questions
    Mr. Winnickasked the Lord Privy Seal if Her Majesty's Government plan to bring forward any changes in the arrangements for Ministers to answer questions in the House.
    Mr. Biffen: No, Sir.
    Mr. Winnick: Would it not be appropriate for the Government Chief Whip to be able to answer questions so that he can try to explain and justify the disgraceful way
    20
    in which Tory Members acted last Thursday night? Is it not the case that the Government Chief Whip has been requested to appear before the 1922 Committee? Quite a number of Conservative Members have publicly denounced the antics of their colleagues. How can the Conservative party declare itself in favour of free speech and the rest when it gags free speech in the House of Commons?
    Mr. Biffen: I have already dealt with this matter at some considerable length on the first question that was put to me this afternoon. There are no plans to have the Chief Whip on the question roster. That would require the agreement of the usual channels and. at the moment, I have no indication that that will be forthcoming.
    Mr. Stokes: Will my right hon. Friend make no changes whatever in the way in which Ministers answer questions in the House as, surely, it is the most distinctive contribution which this House makes, which is very much better than many other Houses of Parliament in other countries?
    Mr. Biffen: That is an extremely helpful supplementary question and I shall try to reciprocate by giving rather better answers.

Private Members' Business
3.32 pm
Mr. Alan Williams: On a point of order, Mr. Speaker. You will recollect, as it has been commented on today, that on Friday we lost one of our few debates in private Members' time as a result of the devious machinations of the Government Chief Whip, with the furtive endorsement of the Prime Minister as far as we can gather. I have read the rulings that you gave on Friday and would in no way challenge them. I wish to raise a completely new point, on which I would welcome your ruling.
I submit that the House is entitled — we are not asking for a discretionary concession—to a replacement Back-Bench day in lieu of Friday.
Mr. Peter Bruinvels: Absolute nonsense.
Mr. Williams: The hon. Gentleman says, "Absolute nonsense", but I remind him that he, as a Back Bencher, has every bit as much interest as the rest of us in protecting Back-Bench time.
At column 1336, Mr. Speaker, you ruled that at 9.31 am, we were still discussing Thursday's business. According to a convention that we well understand, because we had gone beyond 9.30 am, Friday did not exist. Friday did not exist as a parliamentary day, as is shown by the Official Report. Further down the column you said:
"The House itself decides how many days should be set aside for Back-Bench motions and Back-Bench time generally. It is not a matter for the Chain"— [Official Report, 5 June 1986; Vol. 98. c. 1336.]
I accept entirely that it is not a matter for the Chair. The House has passed a resolution specifying the number of parliamentary days that there must be for Back Benchers, and it is a matter for the Chair to ensure that the House has the number of days that have been allocated. As Friday did not exist as a parliamentary day, it cannot count as one in terms of the resolution specifying the number of days available to Back Benchers. Therefore, Back Benchers are entitled to have that day restored to them.
If I am correct in my interpretation that Back Benchers are owed a day—I would appreciate a ruling, although I am happy not to have it immediately—would the ballot that has already taken place for that day stand, and would my hon. Friend the Member for Linlithgow (Mr. Dalyell), who won the ballot, have a right to his day?
Sir David Price: Further to that point of order, Mr. Speaker. A supplementary point to the events to which the right hon. Member for Swansea, West (Mr. Williams) referred also relates to defending private Members' time. You and the House will recall that a number of hon. Members on both sides of the House drew attention to the difficulty about the Friday that never was during the Adjournment debate of my hon. Friend the Member for Southampton, lichen (Mr. Chope). I rose to speak, but was interrupted perfectly fairly on points of order. That cut into my hon. Friend's time. Is there any "injury time" if during an Adjournment debate a substantial number of points of order are made perfectly properly which interfere with the half hour dedicated to that debate? That should also be taken into consideration.
Mr. Michael Foot: Further to that point of order, Mr. Speaker. I wish to submit a further
22
consideration on this matter, especially as the Leader of the House has said today that he has no sense of contrition about what has happened and, presumably, would not be willing to intervene in the event of similar circumstances occurring. If this precedent is to be followed, private Members' time will constantly be under threat by a resort to similar methods. When you consider the matter and advise the House, will you also take that into account, because it would be easy to wreck almost every Friday, and soon the House would have to take steps to reconstitute private Members' rights? Some of us think that the Leader of the House and the majority party could have taken those steps already. If they will not take them, the House certainly will.
Mr. David Winnick: Further to that point of order, Mr. Speaker. Back-Bench days are precious to Back-Bench Members because the amount of time that we have compared with that of the Executive is, understandably, little. It is well known, and has not in any way been disputed, that the Prime Minister found the motion of my hon. Friend the Member for Linlithgow (Mr. Dalyell) offensive. Indeed, the Leader of the House used that expression last week. Obviously, the Prime Minister was involved in denying my hon. Friend his debate. I do not think that that is in dispute, and I accept that that is not a matter for you.
To return to the important point raised by my right hon. Friends the Members for Swansea, West (Mr. Williams) and for Blaenau Gwent (Mr. Foot), if next time a Labour Member wins the ballot and the same words are used in the motion—that is a possibility, because this is Parliament and when we are denied the right to put our case we find other ways and means—and the motion is seen as censuring the Prime Minister and her conduct over the three important matters in my hon. Friend's motion, which was not debated, are we to have a repeat and——
Mr. Speaker: Order. The hon. Gentleman is going into the merits of the case. That is not a point of order for me.
Mr. Winnick: We believe that you should help us in your role as Speaker if the Executive goes out of its way to deny a Back-Bench Member his debate when he is lucky in the ballot, which is rare. What protection can we have? If the Prime Minister, the Executive and all the Government forces deny us that opportunity, surely at the end of the day all that we can do is ask you for your protection.
Mr. Eric Forth (Mid-Worcestershire): Further to that point of order, Mr. Speaker. You will recall, because you were in the Chair at the time, that I was one of the Back-Bench Members who were seeking to participate in the Channel tunnel debate on Thursday night. You will also recall that such was the interest shown in the debate by Back-Bench Members that I had to curtail my remarks at 9 am on Friday, in deference to the wish of the House to proceed with the business. I hope you will take into account the fact that such was the legitimate interest in the debate on the Channel tunnel and its importance that the debate carried on through the night and I had to curtail my remarks at 9 o'clock the following morning.
Mrs. Elaine Kellett-Bowman: Further to that point of order, Mr. Speaker. If you are to consider this matter, will you also reflect on the fact that not just one but many hon. Members attended the Chamber to debate

23
the Unborn Children (Protection) Bill, and that Labour Members insisted on spending the entire time moving a by-election?
Mr. Harry Greenway: Further to that point of order, Mr. Speaker. If Friday last does not exist in parliamentary terms, would it be true to say that the ballot does not exist? I say this as one who does not mind whether or not the hon. Member for Linlithgow (Mr. Dalyell) speaks, as long as I do not have to listen to him.
Mr. Jerry Hayes: Further to that point of order, Mr. Speaker. If the Opposition feel so terribly upset at being denied an opportunity to debate a motion of censure on the Prime Minister, is not the remedy in their own hands? They must ask for a debate.
Mr. D. N. Campbell-Savours: Further to that point of order, Mr. Speaker. I was elected in 1979. One night, when an agreement had been made through the usual channels between the Whips, I exceeded by five minutes the agreement that had been reached, which was that I should speak for only five minutes. Following that debate the then Chief Whip came to me and privately deprecated what I had done. I always remember what he said, as he was most bitter in his criticism. He said, "This place lives by agreements." As I understand it, a resolution of the House provides for the allocation of time. That resolution was born out of discussions through the usual channels, and so is subject to the principle which I believe in the usual channels is referred to as "best endeavours".
Last week, within the orbit of the best endeavours agreement, the Government broke that agreement by inciting Back Benchers to filibuster. In doing so they undermined the agreement which they had put to the House and which became a resolution when it was carried by a majority of hon. Members. I ask you to deprecate any action by any Whip that leads to undermining an agreement made through the usual channels.
Mr. Andrew Faulds: Further to that point of order, Mr. Speaker. The hon. Member for Mid-Worcestershire (Mr. Forth) — I think that that is the area that suffers from his overlordship — made the comment that he had had to curtail his speech at 9 am on Friday. I had left the House by then. If that is the case, he is about the only hon. Member in the whole of the
24
filibuster who did so. I sat here until the wee small hours of Friday morning—the morning that does not exist in parliamentary terms —and not a single honourable filibusterer curtailed his remarks. There was a repetition and regurgitation of rubbish hour after hour. It was quite clear that some Conservative Members, and even some right hon. Members, were taking part in an exercise to defend the Prime Minister, who obviously has something to hide.
Mr. Speaker: Order. I have allowed this matter to run because I have sympathy with the hon. Member who lost his place on Friday. It is true that Friday 6 June was a designated day under the resolution of the House on 7 November. However, the House well knows that if a debate runs over, as it did on Thursday night and Friday beyond 9.30 am, the day's business is lost. I have no authority to do as some hon. Members would wish. It would require a resolution of the House to nominate another specific day, and that is best discussed through the usual channels.
Mr. Williams: Further to that point of order, Mr. Speaker. May I invite the Leader of the House to respond sympathetically to any such representations from this side of the House?
Mr. Speaker: Order. I cannot add any more.
Later——
Mr. Peter Shore: Further to the point of order about the last Friday, Mr. Speaker, about which we have heard a great deal. We are grateful to you for your clear ruling and guidance. It is now plain that it is open to the House to restore the lost rights of private Members by a resolution of the House. As you rightly said, this matter should be considered by the usual channels. I think that it is appropriate, in the presence of the Leader of the House, who has a key involvement in the matter, for you to ask him to respond positively to our invitation and to take the lead in restoring the rights of Back Benchers.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I can add nothing helpful in answer to the questions. If the right hon. Member for Bethnal Green and Stepney (Mr. Shore) wants to use the offices of the usual channels, that is a matter for him.

Official Report
3.45 pm
Mr. Brian SedgemoreOn a point of order, Mr. Speaker. During the economic debate last week there were a number of interruptions on points of order, when I was speaking, by Conservatives Members who wanted to stop me from criticising a man called Mohammed Fayed, the anti-Semitic fraudster who runs Harrods. When that happened you intervened and made a number of rulings, and there came a point when I was standing on my feet in this particular position. I had the Floor of the House and I said quite clearly, so that everyone could hear — I have checked it with the radio — that I felt, rightly or wrongly, that I was being denied the right to free speech, that I was not going to continue my speech and that I was going to walk out. I then walked out. I do not want to go over the merits of that, Mr. Speaker, but in fact I have had a look at Hansard and none of that is referred to at all. The whole incident has effectively been wiped out. I have been to see the Editor of Hansard, and he said that that was a mistake.
I have another point, Mr. Speaker, which is that, without knowing that, when I corresponded with you—I do not want to go into what is in the correspondence—you replied to me on the basis of what was in Hansard and not what I said. You also quoted something that I said as an accurate quotation from Hansard, but which is not an accurate quotation of what I said because that was wrong. Hansard told me that it deliberately changed that in order to improve what I said. The combination of the omission and of the so-called improvement was actually calculated, although possibly not designed, to make me look very silly. I do not mind that because that is a fairly usual state for me. But what I say is that if we are moving into an era when there are to be allegations that Conservatives are turning this Parliament into a denial of free speech we do not want Hansard associated with that. I ask that a corrigendum be put in.
Mr. Speaker: Order. I think that if the hon. Gentleman looks at Hansard of 5 June he will find that that did happen. The hon. Gentleman should look in column 1194 None of us in this place should ever destroy our speeches. I am sure that his admirable remarks can adequately be made on Friday of this week and will he in order—[Interruption.] Well, I do not know whether everyone will agree they are admirable!

Official Report

  STATUTORY INSTRUMENTS, &c.
  Ordered
  That the draft Pool Competitions Act 1971 (Continuance) Order 1986 be referred to a Standing Committee on Statutory Instruments, &c. —[Mr. Biffen.]

Orders of the Day
  National Health Service (Amendment) Bill
  Not amended (in the Standing Committee), considered.
  National Health Service (Amendment) Bill
    New Clause 1

      LIFTING OF ALL CROWN IMMUNITY
      'For all purposes:—

      (a) a health authority shall not be regarded as a servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown; and

      (b) premises used by a health authority or provided by a health authority for use by health authority staff shall not be regarded as property of or property held on behalf of the Crown.'. —[Mr. Dobson.]

      Brought up, and read the First time.
      3.49 pm
      Mr. Frank Dobson (Holborn and St. Pancras): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to take the following:
      New clause 2—Application of Rent Acts to health authority—
      'For the purpose of the Rent Acts:—

      (a) a health authority shall not be regarded as a servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown.'.

      (b) premises used by a health authority or provided by a health authority for use by health authority staff shall he regarded as property of or property held on behalf of the Crown.'.

      New clause 3—Application of health and safety legislation to health authorities—
      '1. — (0 for the purposes of the health and safety legislation:

      (a) a health authority shall not be regarded as the servant or agent of the Crown, or as enjoying any status, immunity or privilege of the Crown; and

      (b) premises used by a health authority shall not be regarded as property of or property held on behalf of the Crown.

      (2) The appropriate authority may by regulations provide who is to be treatd as the user, occupier or owner of any such premises for any of those purposes; and
      (3) The powers to make regulations altered by subsection (2) above shall be exercisable by statutory instrument.
      (4) A statutory instrument containing regulations made in the exercise of the power conferred by that subsection shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.
      (5) Section 125 of the 1977 Act and section 101 of the 1979 Act shall have no effect in relation to any action, liability, claim or demand arising out of the health and safety legislation.'.
      New clause 5—Health Authority Premises—
      'No. premises, owned or used by health authorities, including residential accommodation used by or tenanted by health authority employees, shall be regarded as the property of or property held on behalf of the Crown.'.
      Amendment No. 62, in title, line 2, after 'food', insert 'and health and safety.'.
      Mr. Dobson: When one looks at any of the learned tomes, one finds that the concept of Crown immunity

      27
      comes to us, as it is described, from time immemorial. An explanation is offered that laws that were the King's own laws could have no jurisdiction over the King. It is on that basis that Crown immunity still exists. At the time that that concept was formulated we lived in a primitive society. Under this Government many people are reverting to living in a primitive society, but not in the sense that I am talking about.
      At the time that the concept of Crown immunity came into operation and became hallowed by use, it was a simple state, which had few functions. Since then the state has taken on a multiplicity of functions, there are a multiplicity of laws, and there are a multiplicity of Government agencies responsible for enforcing those laws. In the more complex and, some would claim, more sophisticated society that we now have, Labour Members claim that the concept of Crown immunity is time expired. It has no place in our current society.
      Crown immunity was first substantially undermined —if that is the right word—by the Crown Proceedings Act introduced by the Labour Government in 1947. It was felt necessary to move with the times and at least give individuals the opportunity and right to sue the Crown for damages. However, the Crown Proceedings Act does not permit criminal proceedings against the Crown or any of the agencies presently covered by Crown immunity. As a result, many laws do not apply to Crown property or to Crown institutions.
      We find ourselves in the strange position that a health authority can be sued by an injured individual in the civil courts, possibly over being poisoned as a result of something going wrong in a kitchen, but the health authority cannot be prosecuted under the criminal aspects of the food hygiene regulations that the authority was breaking. It is not simply the food hygiene regulations that do not apply to hospitals and Health Service property. The general health and safety legislation does not apply. Recently, the Secretary of State for Social Services made it clear that the Rent Acts do not apply to Crown property, at least as far as the National Health Service is concerned. Who benefits from the existence of Crown immunity? The answer seems to be literally no one, because the existence of Crown immunity leaves hospital more dangerous than they could be and should be for both patients and staff.
      If Crown immunity has lasted since time immemorial, should it be kept for that reason alone? We might argue for that in relation to the armed forces or for one or two aspects of Crown activity that have gone on since time immemorial, but in the case of the National Health Service and hospitals, Crown immunity arrived with time immemorialness on 5 July 1948. When hospitals were owned by private charities or municipalities, Crown immunity did not apply. Crown immunity is not even hallowed by time. It is certainly not hallowed by any sense of justice, logic or common sense.
      The position is exactly the reverse in the Post Office, which used to be a Government department but became a nationalised industry. On vesting day, when the Post Office became a nationalised industry and ceased to be a Government department, Crown immunity disappeared in a trice. Apparently no one thought that that would be harmful, damaging, expensive or likely to undermine the state.
      28
      We believe that there is no justification in logic for the maintenance of the concept of Crown immunity in its application to Health Service properties. This Government have rejected that idea time and time again and, to be fair to them, previous Governments had done so as well, but a combination of extremely bad publicity about the conditions prevailing in NHS kitchens and long-term campaigns by the Institution of Environmental Health Officers and by a considerable number of trade unions, supported by the Royal College of Nursing and the British Medical Association, forced the Government to reconsider the position.
      The campaigns were strongly supported by the new media, which found that they gained attention for their programmes and papers if they displayed vast piles of rotting refuse in a kitchen or—to use the example of a hospital that is outside my constituency but serves it—made the Royal Free cockroach probably more famous than the Royal Free hospital itself. It reached the stage at which someone wrote in my local newspaper that he or she did not mind the Royal part but would really like it to be the Cockroach Free hospital. Such publicity gradually drove the Government into at least considering abandoning the concept of Crown immunity in relation to hospital kitchens.
      The final blow that forced the Government to give way altogether was the incident and then the report of the inquiry into the severe outbreak of food poisoning that led to more than 20 deaths at Stanley Royd hospital in the Wakefield health district. It is worth repeating that the Stanley Royd hospital—in which in the fourth quarter of the 20th century people were attempting to provide a decent service and decent care and meals for patients—was built when Napoleon was alive in 1818 as the West Riding Paupers Lunatic Asylum. It would be useful for the House to bear that fact in mind when discussing this series of new clauses and the other amendments relating to the lifting of Crown immunity. From 1818 to 1948 Stanley Royd hospital was not protected in any way by Crown immunity. That protection has been needed only since 1948, when it became part of the NHS.
      As a result of all the publicity, the Government decided —we welcome their decision—to end Crown immunity in so far as it applied to the food regulations. We believe that we should get rid of Crown immunity altogether in relation to all NHS premises, and there are a large number of reasons for advocating that course. In that part of the economy that is outside the Crown, if there are serious offences relating to health and safety, the appropriate people from the Health and Safety Executive issue enforcement notices. If a Crown property is involved—in this case an NHS property — they issue Crown notices. If it is non-Crown property, they can institute legal proceedings against those responsible for health and safety offences being committed. If, having issued a notice, it is not complied with by the deadline set down in the notice, the Health and Safety Executive can prosecute, even if it had not decided to do so at the outset.
      A health authority cannot, however, be prosecuted either at the outset or if it fails to take action within the period of time laid down in the Crown notice. It follows, as night follows day, that without that threat there will be less outside regulation by the HSE and its staff and that the people working within the Health Service will not take the concept of health and safety at work as seriously as it

      29
      is taken by those outside the Health Service and as seriously as they would take it if the notices and investigations could be followed up by court proceedings.
      4 pm
      Substantial delays occur in the implementation of Crown notices. Health authorities are slower than those who are not covered by Crown immunity to do what the HSE thinks is necessary. Again that follows from the fact that health authorities cannot be prosecuted if they do not do it or, or if they are slow to do it. That is damaging. It means that for an HSE inspector to take action over Health Service premises is much more of a bind, much more troublesome and much less immediately productive than his work on premises where the HSE has the necessary statutory powers.
      All hon. Members recognise that each human being responds to either incentives or difficulties. If we permit to continue a system that leads to frustration for HSE inspectors when they try to do something about NHS premises, we should not be surprised if they are not so enthusiastic about that work as about their other work.
      It is usual for the HSE to make surprise visits to premises that are not covered by Crown immunity. The forewarned visit to premises is a useful technique for getting premises tidied up temporarily, but if premises are to be made permanently safer and healthier the threat of a visit that has not been forewarned is very important. However, the HSE may not make surprise visits to health authority premises without the prior consent of the health authority. That may sound as though the surprise visit is no surprise at all. I do not suggest that the HSE needs to obtain consent on every occasion when it intends to make a surprise visit, but it needs in advance a blanket agreement from the health authority that surprise visits will be permitted. I am told by the staff involved that that consent is not always as readily forthcoming as we might expect from public bodies that are supposed to obey the laws that have been passed by this House.
      There is also clear evidence that Crown notices are used less frequently than the notices that are issued to employers who are running other premises. Again the reason is that it is not worthwhile from the point of view of hard-worked HSE inspectors, whose numbers have already been reduced. However, there is an anomaly. Although a health authority which may have failed to provide funds to make a kitchen safe, clean and decent cannot be prosecuted, the individual managers can be prosecuted. If I were a manager, that would be most offensive to me. I should find it most offensive that my gaffers, who had made my life impossible, could get away with it but that I could be gaoled. That is completely unreasonable.
      It has another effect. Faced with the possibility of individual prosecution, in the absence of the ability to prosecute the authority as a whole, managers have been observed to try to spread the responsibility among several of them so that none of them is individually responsible for the prevailing circumstances. It is understandable that they should try to camouflage their activities and render themselves less liable to individual prosecution. It is a normal human response, even if we do not welcome it.
      If individuals can be held responsible but not the organisation that employs them and fails to supply them with the necessary resources to do their job, it amounts to statutory hypocrisy and we ought to get rid of it.
      30
      Therefore, the concept of Crown immunity ought to disappear altogether. The Government intend to get rid of it in hospital kitchens, but the Opposition see no reason for getting rid of Crown immunity relating to the food regulations but keeping it for other parts of hospital premises and for other hospital functions. In particular, we are very doubtful about its continued application to health and safety.
      Some Conservative Members who served on the Standing Committee will have heard me say, but it is worth emphasising it by saying it again, that hospitals are extremely dangerous places. They are more dangerous than most industrial and commercial premises. Most hospital patients are full of germs, and most hospitals carry out dangerous processes. On the premises of most hospitals there are large amounts of dangerous drugs and substances which, if used carefully, may be beneficial, but which can cause trouble if they are not properly handled, or if there is slack control over what goes on.
      Furthermore, most hospitals are full of extremely dangerous and horrible refuse. I refer to clinical waste and to things cut from people, sucked from people or dragged from people. Hospitals are also full of what hospital employees call "sharps"—that is, implements that can cut people. They, too, are very dangerous. There are few premises in this country, including nuclear installations, which in a day-to-day sense, are so intrinsically dangerous to the people who work in them as hospitals. This is a threat to the health and safety of both patients and staff.
      When patients go into hospital they assume that they will he made better, that their lives will be saved and that their pain will be eased. Patients are entrusted to the National Health Service on those grounds, but many of our hospitals are breaching that trust. There is a great deal of cross-infection. For example, post-operative infection has increased in the National Health Service since this Government came to power, but it is not listed among the Government's achievements when the Secretary of State for Social Services or the Prime Minister refers on television to the National Health Service. There has been a 14 per cent. increase in post-operative infection since 1979. We all know from what happened at the Stanley Royd hospital that salmonella poisoning is a fairly commonplace complaint in our hospitals. We also know from the incident on which a report was made last week that legionnaire's disease has killed a number of people in our hospitals.
      Many hospital buildings are of poor design and many are in a poor state of repair. There are poor standards of cleanliness and hospitals are full of dangers to staff and patients. People can suffer from falls, and heaps of rubbish lying about can lead to fires. Society and Parliament are asking people to do things for us and our constituents, and we owe it to the patients, staff and visitors to make hospitals as safe as possible. We are simply not doing that. One reason for that is that, compared with the need for health and safety at work in other premises, and because of how the law stands, officialdom sees hospitals as different. I am talking about officialdom in the hospitals and officialdom outside. Inspectors see the hospital premises as different, and so do the inspected.
      There is an assumption, which history suggests is wholly false, that people running hospitals know about health and safety and about how to keep people in hospitals healthy and safe. All the evidence suggests that outside the specialist fields in which they operate few

      31
      people in hospitals know how to do that. I can give an example by citing something that occurred in my constituency a year or two ago.
      Someone was unfortunate enough to die of smallpox as a result of work carried out at the London School of Hygiene and Tropical Medicine in my constituency. In the course of the inquiry into that outbreak the staff of the environmental health department, or, as the outbreak may have occurred before local government reorganisation it may have been the health department of the London borough of Camden, was closely questioned about why it had permitted certain practices at the London School of Hygiene and Tropical Medicine in dealing with smallpox. The answer given by the staff was that it would have needed official advice on how to advise others. The QC conducting the inquiry asked where the advice would have been sought. The staff replied that it would have been sought from the London School of Hygiene and Tropical Medicine because it was reasonable for the staff to assume that the people at that school knew better than anyone else in Britain how to deal with smallpox. They manifestly did not, because they were not even keeping to their own rules. That is an example of what can happen.
      The Rent Acts do not apply to Health Service premises or to premises owned by, or, as far as I can make out, leased by, or run by the health authorities. Crown immunity intervenes in a civil court relationship, and not just in relation to criminal proceedings. The non-application of the Rent Acts to hospital residential premises has become more important because of the Rayner review, which the Government have accepted and which suggests that the Government should get on with disposing of nurses' homes as quickly as they can in order to raise money.
      I think that it was on 24 March that the Secretary of State gave me an undertaking that no health authority would take court action to turn a nurse out of accommodation in which the nurse wanted to remain. No caveats or reservations were expressed when that undertaking was given. It was later discovered that in the West Surrey and North-East Hampshire health authority a nurse was being put out of the premises in which she lived and that the health authority was resorting to the county court to get her out. That appeared to be in breach of the undertaking given by the Secretary of State. To add insult to injury, the Secretary of State joined his name to that of the health authority in the court action that the authority was taking against the nurse.
      The right hon. Gentleman has since arranged for the Minister to explain to me rather belatedly that what he said in the House related only to property owned by the health authority. He did not say that at the time, and in any case large numbers of health authorities do not own the freehold of nurses homes, especially in central London and in other big cities, where hospitals tend to have long leaseholds.
      Are we to understand that the plain undertaking given by the Secretary of State to the House does not apply unless by a quirk of fate the health authority happens to own the freehold of the property in which the nurses are living? That strikes me as a bit odd, because the next stage in the case in West Surrey and North-East Hampshire was that although the health authority did not own the premises from which the nurse was being chucked out, the
      32
      Secretary of State's plea in the court was to be that the Rent Act did not apply to him because he had Crown immunity. He cannot have it both ways. He cannot say that he will not apply his undertaking to leasehold property and at the same time say that if it comes to a fight in the courts over leasehold property he will plead Crown immunity. There is no need for the Secretary of State or for health authorities to have Crown immunity for nurses' residential homes or for residential property provided by hospitals or health authorities. The Rent Acts, feeble as they are in some ways, should apply to those properties, and that is why we have tabled new clause 2.
      4.15 pm
      There seems to be no one, other than the Secretary of State and a few of his hon. Friends and a few civil servants who are paid to agree with him, who is in favour of retaining Crown immunity. Trade unions and other staff bodies within the National Health Service have campaigned for years for Crown immunity to be lifted from National Health Service properties. Bodies and organisations representing patients also believe that it would be in the interests of patients for Crown immunity to be lifted. The National Association of Health Authorities in England and Wales, the representative of the authorities that would become liable to prosecution, thinks that Crown immunity should be lifted. Perhaps the case for lifting it is best summarised by the British Medical Association, which said:
      "We believe the arguments for retaining Crown immunity are no longer tenable. The National Health Service is the largest employer in the country and as such it should not be outside the legislation. Moreover, the passage of time should have given experience of meeting legal requirements in health and safety. The recent introduction of the recommendations of the Griffith inquiry into the management of the National Health Service has clarified management responsibility."
      No doubt the Minister will tell us wondrous things about the introduction of general managers. The BMA went on to say:
      "A visit to almost any hospital would provide examples of the disregard for the Health and Safety at Work etc. Act 1974, laboratory conditions, storage of materials, collection and disposal of rubbish, fire hazard and ventilation. Whilst these breaches of the Act may be pointed out by the health and safety executive inspectors, there is no compulsion upon health authorities to rectify the conditions."
      It is a bit disturbing to hear the BMA saying something like that.
      The BMA compares that situation with the circumstances of general practitioners in the NHS who, if they employ more than five people, are not covered by Crown immunity and are subject to the Health and Safety at Work etc. Act. The bag of sharps or clinical waste in a GP's surgery—extremely unlikely to be as horrible as some of the clinical waste from a hospital—is covered by the Health and Safety at Work etc. Act. Hospitals in the private sector, which I should like to see disappear entirely, are covered. Local authorities are covered. The BMA and, as far as I know, all my hon. Friends believe that it would be right for the NHS to be covered.
      Why will the Government not lift Crown immunity altogether? It is right that it should be lifted. The case for doing so is supported by everyone involved, and it has been conceded on food hygiene. There is clearly no principle involved. The question whether some premises, functions or organisations are or are not covered by Crown immunity is just a lottery. It could well be that Parliament decided when the NHS was set up that it did

      33
      not count as Crown property. It did not make a ha'porth of difference when the Post Office went out of the Crown area and became a nationalised industry.
      Labour Members believe that Crown immunity is an idea whose time has passed. It serves no useful purpose. We are convinced that it is positively harmful to patients and staff and that it should go. What explanation Ministers can give for not getting rid of it, I cannot imagine. They will not be able to say that they do not care any more because, following the Tory party conference in Perth, we know that even the Prime Minister apparently cares about things such as the NHS and the patients in it. They may say that it will cost money, but I should not need to tell a Tory that most worthwhile things cost money.
      If it is right to have clean hospitals and to spend money to make sure that the operating theatres of a hospital are spotlessly clean, not full of infection, and as a patient who has been in the operating theatre has to go on to a ward and he fed with food produced in a kitchen, to be wheeled about and have tests done on him in pathology laboratories, it follows, as night follows day, that anybody who is serious about cleanliness, standards of hygiene and the care of patients must support the abolition of Crown immunity altogether. That is what Labour Members believe and that is why we are putting forward the four new clauses. I commend them to the House and I defy the Minister to come up with any sensible reason for not accepting them.
      Mr. Jack Ashley: I want to begin by recommending support for new clause 1 and the associated new clauses and complimenting my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). In Committee he has argued these basic points with the Minister and on any reading of those debates it is obvious, even to the most prejudiced reader on one side or the other, that my hon. Friend won the argument hands down. Moreover, I commend him on the speech that he has just made.
      It is disgraceful that we need to put these new clauses forward at all. It is the Government's responsibility to ensure that hospitals are clean and safeguarded, but they are not doing so. All the evidence at our disposal shows clearly that patients and staff are suffering dangerous conditions. It beats me how the Minister can stand up in the House and say that there is a powerful case for abolishing Crown immunity in one part of a hospital— the kitchen—but not elsewhere.
      By removing Crown immunity from the kitchens the Government have admitted that Crown immunity is protective of negligent health authorities, but those same health authorities can be just as negligent in other parts of a hospital. Having admitted the principle that Crown immunity is wrong because it prevents the prosecution of negligent health authorities, the Minister should go much further and ensure that health authorities are not protected in their work in other parts of hospitals, particularly with regard to health and safety, as is specified in the new clauses.
      The Government are dodging and fudging on this vital issue. It is axiomatic that health and safety legislation is good and necessary. No one seriously disputes that. But the health and safety provisions should apply in the NHS as they apply outside. The Minister for Health is on record as saying that compliance, rather than punishment, should be the objective. Of course, we want compliance, but we
      34
      shall not get compliance without the threat of punishment. All the evidence shows that the Crown notices, which are the alternative to the abolition of Crown immunity, simply do not work.
      In 1984 there were only 32 Crown notices to health authorities, although there were 1,891 hospitals. In that same year there were 15,816 Crown notices in non-Crown premises. The difference is twentyfold. Crown notices in non-NHS premises were meaningful because the right to prosecution was there. The threat of prosecution could be made where there was negligence. Only one twentieth of Crown notices were issued in NHS hospitals simply because they could not be enforced.
      The lack of power to prosecute can be seen in the views of environmental health officers, especially those mentioned by my hon. Friend in relation to the Stanley Royd hospital. They see themselves not as enforcement officers but as visitors and that is scandalous. Those people are specially selected, trained and appointed to enforce the law, yet they are unable to do so and they simply see themselves as visitors. Just fancy any policeman seeking to be invited in as a visitor with no right to take action. That is the position for environmental health officers in NHS hospitals. It really is ludicrous.
      The consequences of the lack of enforcement should be known to the House of Commons, but nobody knows what the consequences are. I asked the Minister, in a series of parliamentary questions, for a comparison of the figures on industrial disease and accidents in NHS hospitals and those in non-Crown premises. The Minister's answer was that those figures were not available. He does not know what goes on in the hospitals for which he is responsible. He prefers a blindfold and a lack of knowledge. He prefers the House not to know the facts. If he wanted the House to know the facts he would find the figures, hut he is simply telling me, and therefore the House, that the Government do not know that, and that is inexcusable. Ministers should acquaint themselves with the facts and not simply say that they do not know the answer.
      4.30 pm
      My hon. Friend the Member for Holborn and St. Pancras rightly paid tribute to various organisations. The General, Municipal, Boilermakers and Allied Trades Union started the campaign, along with the environmental health officers, and managed to get some action from the Minister. Now the British Medical Association has added its considerable weight. The BMA speaks authoritatively and tells the Minister that he must remove Crown immunity because of the dangers to patients and staff. The Minister should take those views very seriously.
      Some hospitals are full of bacteria and viruses and daily pose a risk to the health of patients and staff. We need to ensure hygiene of the highest order and the safe disposal of rubbish and powerful drugs.
      The 1981 survey by the pest control unit showed that 11·6 per cent. of English hospitals were infested with pharoah's ants, which carry disease and 20 organisms. The ants are tiny and move around our hospitals, from germ-infested sluices to wards, beds, operating theatres and even to sterile dressings and hypodermic needles.
      What do the Government do about these dangerous conditions? They have a pest advisory service, which consists of two people working part-time on pest control. Pharoah's ants are crawling all over our hospitals and infesting sterile dressings, but the Government have only

      35
      two part-time workers dealing with pest infestation. It is the merest nod towards the control of disease caused by pests. It is simply not good enough, especially as only 73 of the 1,891 hospitals in England have been surveyed in the past 10 years.
      Removing Crown immunity in this area and others would make health authorities far more vigilant and active, because of the fear of prosecution. That fear applies everywhere else and there is no reason why it should not operate in our NHS hospitals. I hope that the Minister will think again and will ensure that patients and staff in our hospitals have the same protection as everyone else.
      Mr. Willie W. Hamilton: My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) was right to emphasise how extremely dangerous hospitals can be. They are places to be avoided if possible, but, because entrance to them by patients, visitors and staff is unavoidable, it behoves hon. Members, health authorities and everyone else to make the premises as safe as possible.
      The new clauses emphasise the fact that "premises" should include all premises and not just kitchens and the places where food is provided. The Bill is unacceptably narrow in the view of Labour Members and every interested body.
      My hon. Friend the Member for Holborn and St. Pancras made perhaps the most significant point in the debate when he said that the Government go out of their way to say that the Bill will cost nothing. Not a single organisation or individual believes that for an instant. If we are to have safe kitchens, rid of the infestation that we have read about and seen on television, it will cost a lot of money.
      If the Minister asks, "Where will the money come from?" I shall remind him, as I have reminded the House, that at the time of the Falklands expedition the Prime Minister said, "We shall see this through, no matter what the cost." She has maintained that view throughout and we have spent, and will continue to spend, thousands of millions of pounds of taxpayers' money on the Falkland islands. However, when we ask for some millions to be spent on hospital services to make hospitals safe for patients, visitors and staff, we are told that the Government cannot find the money or, if they can, that it must come out of another part of hospital authorities' budgets.
      I tabled an amendment to extend the Bill to residential accommodation. It has been said many times in the House and outside that the Bill presumes that all the filth that we know about—all the rats, the mice, the cockroaches, the ants, the flies and the other infestations in NHS hospitals — are due to mismanagement. Indeed, the Minister made that point about the recent scandal involving food poisoning at Wakefield. It is suggested that all the problems can be eliminated within existing budgets.
      My right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) has referred to some aspects of the matter and I did not realise how much disgusting filth and danger exist in our hospitals. The smaller the insect, the filthier it seems to be. I have a document from the British Pest Control Association entitled "Hospitals can damage
      36
      your health". It says of the common house fly, which infests not only kitchens, but often wards and certain residential accommodation,
      "This is what happens when a fly lands on your food. Flies can't eat solid food, so to soften it up they vomit on it. Then they stamp the vomit in until it is a liquid, usually stamping in a few germs for good measure. Then when it's good and runny they suck it all hack again, probably dropping some excrement at the same time. And then, when they've finished eating, it's your turn."
      That is happening in our hospitals where people go to get their health improved. While these wretched flies are busy, the bugs, the cockroaches and the ants are all at it as well. The Government say that they will tackle them if these pests happen to be in the kitchen. But cockroaches and flies do not know the difference between kitchens, wards and residential accommodation.
      It was said that the nuclear accident at Chernobyl knew no national boundaries, but flies, ants and cockroaches do not know national boundaries either. In that regard, the Bill is nonsense. It pretends that if only the problems in the kitchens were solved, everything would be all right. My hon. Friend the Member for Holborn and St. Pancras referred to the activities, over the years, of the trade unions. I am sponsored in the House by the Confederation of Health Service Employees, which has taken a longstanding interest in these matters. Moreover, the General, Municipal, Boilermakers and Allied Trades Union — GMBATU for short — has also taken a long-standing interest in them. The union's report, published in 1985, estimated that one in four of all hospital kitchens would be closed on grounds of hygiene if the NHS did not have immunity from prosecution. I suspect that the same applies to residential accommodation.
      For years, hospital doctors and nurses have complained about the state of NHS residential accommodation. My sponsoring union, COHSE, has been in the forefront of that campaign for a long time. In 1985, at the TUC conference, Mr. Hector MacKenzie, the assistant general secretary of that union, said:
      "It is scandalous that hospital kitchens can become breeding grounds for infection and be equipped with dangerous machinery—and that Crown Immunity allows standards which would lead to the immediate closure of a fast food restaurant in Bloomsbury or Blackpool and the prosecution of its owner."
      A report of that conference states:
      "COHSE's successful motion stressed that the 'Crown employee' status of one million NHS employees and many other public sector workers means that they arc excluded from the laws designed to protect employees at work."
      Indeed, my hon. Friend the Member for Holborn and St. Pancras referred to the fact that the health and safety legislation does not apply. The Parliamentary Under-Secretary of State for Scotland knows full well the great difficulties that followed the fire some years ago in the nurses' home at Kirkcaldy's Victoria hospital, partly as a consequence of Crown immunity. But, Mr. MacKenzie continued:
      "Hospital staff live in hospital accommodation which is falling into an incredibly disgraceful state of repair. Because of Crown Immunity the NHS can (and sometimes does) behave like the most unscrupulous of private landlords—and get away with it."
      The report of the conference then adds:
      "Crown status deprived them of rights of security of tenure and repairs afforded to most private and council tenants."
      That is the situation in an area to which everyone pays lip service. The Prime Minister says that she cares very much about it, but she does her best to destroy it, and not

      37
      least in this regard. In 1983, the Nursing Mirror launched a "Homes Fit for Nurses" campaign which excited great national interest and sympathy. Thousands of letters poured in from all over the United Kingdom, describing the disgusting and intolerable living conditions of thousands of the most dedicated workers in our NHS. A lot of the letters came from doctors and nurses, many of whom have no choice but to live in that accommodation which is protected by Crown immunity. After that campaign had reached its crescendo, the Government's response was to introduce this Bill. They did not introduce it immediately after the Nursing Mirrors' campaign of 1983. Only now, after the scandal of Wakefield, have the Government decided on this miserable little Bill.
      4.45 pm
      The Government's response to the problem of accommodation was merely to get rid of it altogether and to sell it off. They decided to tell many of the nurses that they should seek their own accommodation in the private sector as best they could. Successive Ministers have argued in the House that not all of the accommodation is used. I think that the Government quote a figure of about 20 per cent. for the amount of accommodation that is not used, and they argue that it should he disposed of in the interest of value for money. But it is a Catch 22 situation. If the property is neglected and allowed to fall into decay so that nurses and doctors avoid it, it will become untenanted. The Government then use that as an excuse for getting rid of it altogether.
      When my hon. Friend the Member for Battersea (Mr. Dubs) raised these issues a few weeks ago in an Adjournment debate on 23 May, he referred to the Rayner report of August 1984, which specifically dealt with the problem of NHS residential accommodation. In that report, Rayner recommended —and the Government accepted — that 73,000 units of accommodation, including houses, flats and bedsits, should be disposed of out of a total of about 112,000 units. I am not sure whether that includes the figures for Scotland, but perhaps the Under-Secretary of State can tell me. However, that would mean getting rid of 65 out of every 100 residential units occupied by NHS doctors and nurses, and the nurses certainly would have to seek accommodation where they could. The Government are now implementing those proposals, and are causing great anxiety and anger in the process.
      In his reply to that debate, the Minister played down the issue and implied that my hon. Friend was scaremongering and inaccurate. But there can be no doubt that the Government have gone ahead with that policy without giving much thought to its consequences. In his reply to that debate, the Minister spoke in his bland and soporific way about the more efficient use of public money. Indeed, he is an expert at that sort of thing. He also spoke about the need to cut out waste. We all know the shibboleths that the Government bring out when they are slashing public expenditure on services that they do not much like. He spoke about saving public money, cutting out waste, and becoming more efficient in order to project the image of a caring Government and a tear-jerking Prime Minister. But we all know her, and what she has done to the Health Service, housing and so on.
      In column 695 of Hansard, even the Minister had to concede that the health authorities would investigate how the policy would be implemented. I think that he said that
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      a circular would be issued very shortly. Has that circular been published? He must be able to tell me by now whether it has been published and also whether it applies to residential accommodation in Scotland.
      A number of questions remain unanswered and I hope that the Minister will reply to them today. A few of them have been asked by myself and my hon. Friends during recent exchanges in the House. On 23 May the Minister said:
      "Nobody will he required to move from his or her present accommodation without being offered a suitable alternative place to live."—[Official Report, 23 May 1986; Vol. 98, c. 694.]
      I say nothing about the grammar; I am simply reading Hansard.
      I have asked the question — and we deserve an answer: who will seek out that accommodation'? Will the onus be on the health authority or the nurse? Who will decide what is suitable accommodation — the NHS manager on a salary of £40,000 to £50,000 a year or the nurse on a salary of £5,000? Who will decide what is a reasonable rent? Who will decide whether accommodation is suitable in terms of its rent, its facilities or its proximity to the hospital? A hospital manager in a rural area might decide that accommodation is convenient even though it might be 10 miles away—but the poor nurse probably does not have a bike and certainly not a car, and the Government have destroyed the bus services. It is no use providing accommodation that is 10 miles away from the hospital in a rural area where there are no buses at weekends. There is a multiplicity of questions that the Government have not even attempted to answer.
      This is a mean little Bill that is designed to deceive. It is designed not to solve the problems but to allay a little anxiety within a limited area of the NHS. It does not get to the root of the problem because the Government fear the enormous cost that might be involved in tackling the problems with the seriousness that they deserve.
      The Labour party has tabled these amendments to reveal the shortcomings—indeed, the irresponsibility—of the Government in trying to deceive the people into believing that the Bill will solve anything. It will not solve very much because the Government will not spend the money to achieve that.
      Mrs. Ann Clwyd: I can assume only that the Bill's proposals are so limited because Conservative Members know so little about kitchens. They obviously do not realise that kitchens are not surrounded by Berlin walls —they may prefer to think of them in that way, as they do not wish to venture inside them. Certainly, cockroaches know no bounds in kitchens or any other area of public buildings. They use the lifts, fire escapes, drainpipes and even escalators, as do many other nasty creatures that can be found in public buildings which are protected by' Crown immunity. If Conservative Members think that the nasty vermin will somehow be contained within an area called a kitchen, they are in for a bit of a shock.
      Perhaps Conservative Members have not had my experiences. For four years I served on the Welsh regional hospital board — a body that was abolished in 1974, much to the dismay of people in Wales where there is now a less democratic Health Service than obtains in other parts of Britain. Responsibility for the Health Service now lies with the Welsh Office, and I am sorry that no one from that Department is present for the debate.

      39
      I was a member of the catering committee of the Welsh regional hospital board, and one of its interesting tasks was to visit hospitals throughout Wales to inspect kitchens and menus. Some of the things that we saw would beat many of the horror stories that were spelt out in the reports referred to by my hon. Friends. The kitchens, especially those in long-stay hospitals, were dank, damp and dirty. Some of the items on the menus were not fit to feed to the cat. One hospital had coley fish on the menu —something that is rather more acceptable today than it was in the early 1970s. One of my colleagues pointed out that coley fish was food for cats, not for patients, and it disappeared from the menu.
      Unfortunately, our visits to those hospitals were, of necessity, fleeting. We could not make the detailed inspections that many of those who prepared the reports were able to carry out. Had we been able to spend some time at the hospitals, I do not doubt that we, too, would have found the pests that were mentioned during the inquiry into the food poisoning outbreak at the Stanley Royd hospital.
      The 1977 circular stressed the need to be constantly on the alert to the dangers of food poisoning. It laid down certain basic requirements with which hospitals should comply and it also dealt with inspection. It suggested that health authorities should invite inspection by environmental health authorities to report on all areas within their premises where food was stored, processed or consumed.
      One section in the report deserves repeating because I am sure that it applies to many establishments. The report of the Charing Cross environmental health officer shows that bird droppings were found in the jelly, rice coated with bacteria, infestations of mice and cockroaches, sparrows flying around kitchens, dead cockroaches in a food store and slicing machines coated with thick grease. The newly appointed general manager was quoted as saying that conditions were absolutely disgraceful and indefensible.
      Another example is the Royal Free hospital, which environmental health officers said would have been prosecuted had it not been for Crown immunity. Chicken and cockroach chasseur was reportedly served to two patients and a nurse. Other named hospitals that have beeen criticised included ———
      Mr. Dobson: Is my hon. Friend aware that no one was reassured by the reassurances given by an official of the Royal Free hospital that, provided the cockroach had dropped in the mixture at the beginning of the cooking process, it would have been all right?
      5 pm
      Mrs. Clwyd: I thank my hon. Friend for that information. If a cockroach is well cooked, that will not make it more palatable to patients nor to anyone else. The fact that cockroaches might be in our food without our knowledge would cause most of us great concern and considerable revulsion.
      Three organisations have recently produced reports on this issue. The report of the British Pest Control Association, entitled "Hospitals Can Damage Your Health", contains details of the sort of pests which can cause problems and gives many specific examples of failings as well as making several good recommendations.
      40
      The association recommends that Crown immunity should be lifted or abolished, which would ensure that hospitals are legally obliged to implement the requirements of environmental health officers. It makes many other recommendations.
      The General, Municipal, Boilermakers and Allied Trades Union published the case against Crown immunity in April 1985. Much of that publication was concerned with hospital kitchens, and it contained many proposals for action. It suggested that Crown immunity should be removed from the premises covered by the Health and Safety at Work etc. Act 1974. I am sure that all hon. Members would like to see that happen here. The GMBATU paper said that Crown immunity should be removed from the food hygiene regulations and that food hygiene laws should be amended to include the recommendations presented by the Institution of Environmental Officers in a review of food legislation. It said that EHOs should be given the power to issue enforcement notices under food hygiene legislation — a power which they already have under the Health and Safety at Work etc. Act. It recommends that food hygiene laws should be amended so that employees' representatives receive the same information from enforcement officers as they do under section 28 of the Health and Safety at Work etc. Act.
      The Government have always expected health authorities to provide resources for health and safety and hygiene improvements from their existing budgets for patient care. When there are such great demands upon their budgets it is not surprising that they have difficulty in finding the necessary resources. No extra resources have been provided by the Government to help the NHS to meet its new obligations under the Health and Safety at Work etc. Act. The Government must make sufficient resources available to enable the NHS to meet the new burdens imposed upon it by that Act and the food hygiene laws.
      I ask the Minister to bear in mind that in 1978 the Health and Safety Commission gave inspectors the power to issue a new form of notice against Crown immunity. Those Crown notices, as they are called, are much the same as the improved prohibition notices, except that they have no force in law. In practice, health authorities ignore the notices because they have no force in law. Their stock answer, when they have failed to comply with the law, is lack of funds. The Health and Safety Executive, and its inspectorate, cannot possibly meet burdens placed upon it without an increase in staff.
      We rehearsed this argument during the debate on the privatisation of British Gas when we discussed the burdens that were to be put on the inspectorate. The number of health and safety inspectors has diminished every year since the Government came to office, at both head office executive level and field work level. Does the Minister consider it feasible for the present number of inspectors to carry out the duties that he expects them to undertake? I shall be interested to hear his answer.
      Mrs. Anna McCurley: The hon. Lady is condemning hospitals universally, but the majority of hospitals have been responsible. They have employed proper pest control associations, and their standard of cleanliness has been acceptable. Does she

      41
      accept that additional resources are not necessarily required, given the infernal sloppiness of some hospital staff?
      Mrs. Clywd: If the hon. Lady is addressing that remark to some of the privatised services working within our hospitals, I am sure that she and I would not disagree. I would not say that her comment applies to NHS staff, who, with few resources, have been able to carry out a proper programme of hygiene within hospitals over the years. I think that the hon. Lady is condemning privatisation within the Health Service. A number of contractors have been dismissed because of their failure to observe proper hygiene standards and to carry out the high standard of work that the Health Service has normally been able to perform.
      Mr. Dobson: Does my hon. Friend agree that rather more private contractors would have been dismissed had not the Government intervened to say that, even where the health authority was entirely dissatisfied with the standard of service, the contract could not be terminated without prior discussion and the consent of Ministers, partly as result of representations made by Tory Members who had a financial interest in the companies under threat?
      Mrs. Clwyd: That is an extremely relevant intervention. Where private interests are concerned, it seems that the same standards do not apply.
      Mrs. McCurley: That is pathetic.
      Mrs. Clwyd: The British Pest Control Association, which has called for the abolition of Crown immunity, which prevents hospitals and other public buildings from being prosecuted, is not exaggerating when it talks about cockroaches, rats, mice and other disease-carrying pests taking over hospitals and putting patients' health and lives at risk.
      Dr. John Marek (Wrexham): The hon. Member for Renfrew, West and lnverclyde (Mrs. McCurley) described some of the arguments of my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) as pathetic. Does my hon. Friend agree that the primary duty of private contractors, as they sec it. is to make profits for their shareholders and not to uphold standards of care or cleanliness within the Health Service?
      Mrs. McCurley: They will not make profits if they do not do their job properly.
      Dr. Marek: I am grateful for the interjection. There is enormous discontent with private contractors in the Health Service. Does my hon. Friend agree that profits is one of the important differences between the attitudes of private contractors in the Health Service and those of NHS staff who look after the health and welfare of patients?
      Mrs. Clwyd: That point is well made by my hon. Friend. If we are being entirely objective, which the Opposition are seeking to be, it is clear that standards of hygiene and patient care have been severely diminished since 1979.
      The British Pest Control Association believes that part of the problem lies with priorities. Only one fifth of 1 per cent. of funds, or about £800,000, is spent on pest control. If the Government are serious about wanting to get rid of pests, they must give additional resources to the NHS to enable it to do the job properly.
      42
      The British Pest Control Association, in its report, asks:
      "Would anyone with any sense serve a sick patient food that has already been contaminated with organisms that cause food poisoning, boils, abscesses, typhoid, pneumonia, dysentery, worms or jaundice?
      Would that sensible person bandage a wound with material exposed to contamination from the contents of drains, sinks and sewers? Sensible or not, this is what is happening in hospitals up and down the country."
      The association also drew attention to a survey of 360 nurses conducted by Nursing Mirror last year,
      "which showed that 88 per cent. had seen cockroaches in their hospitals, 53 per cent. had seen rats or dead mice, and 51 per cent. considered their hospital unclean."
      That is the evidence of people working in those hospitals. It is clear that hundreds of NHS hospitals fail to meet accepted hygiene standards, and pose serious hazards to patients and staff.
      The Institution of Environmental Health Officers, in a recent report, found 97 hospitals with hygiene standards
      "sufficiently serious to warrant prosecution"
      and 159 hospitals with "significant pest infestations."
      The Minister thinks that the pests are confined to the kitchens. I should be interested to know about his own experience of kitchens, particularly hospital kitchens. Pictures of a hospital for the mentally ill, where cockroaches scuttle around the kitchen, shocked a conference of English and Welsh health authorities in Cardiff last year. Mr. John Yates, a senior research associate at the university of Birmingham, told the health officials about a hospital, the identity of which he refused to disclose, but which he described as having dripping, dirty and dark corridors
      "because the authority prefers to save money to spend on patient care".
      That reinforces the point that I and my hon. Friends have been making, that, if hospitals have to decide on priorities, obviously patient care must come first. Mr. Yates said that the rooms in the hospital
      "were empty of moveable objects, and the lavatories had no paper …the rooms were unnecessarily depressing and dark and the lavatories were damp
      Beds in the wards were only inches apart. A long crack over a window in a day room was stuffed with lavatory paper to keep out water.
      Worst of all were the cockroaches, a dozen of which had been photographed swarming on tables, around the sink and on the floor".
      Mr. Yates said:
      "These pictures were taken not 20 years ago but just this month."
      He argued that the
      "'horror stories' about mental hospitals … were not isolated instances but signs of a system of management and monitoring that did not work."
      Again, that is evidence that pests are not confined to the kitchens, and that the danger to patients cannot be kept within the kitchens. Lifting Crown immunity there will riot be sufficient to protect the patients.
      The other day I made a point about air conditioning systems, which the Minister missed. Many diseases can be caught from those systems — not just legionnaire's disease, but humidifier fever. Many doctors now recognise that it has a considerable effect on people's health. Other diseases are also caused by air conditioning systems. I asked the Minister to widen the scope of any inquiry to the operation of air conditioning systems in hospitals and other public buildings. In buildings where there is Crown immunity, it is particularly important that proper inspection of those systems is carried out.

      43
      I shall mention an experience that I had in the European Parliament. One in three people were sick during the week when we met in Strasbourg. A team of doctors had come over from Britain to look at the air conditioning systems. Unfortunately, the authorities in Strasbourg thought that it was a plot to get the Parliament moved from France to Belgium, and refused to allow the doctors through the front door. It was only when I got them in through the back door that they were allowed to look at the systems.
      The doctors found that there were seven different air conditioning and cooling systems within that one building, and bacteria were contaminating many of the tanks that were pumping water into the air conditioning system. Rat poison pellets were found in ducts all round the building, and those ducts were pumping the air conditioning through the building. It is not surprising that one in three people were sick during our visit to Strasbourg.
      5.15 pm
      The point that I am trying to underline is the necessity for proper investigation of air conditioning equipment used in hospitals and other buildings, which are now protected by Crown immunity. Such equipment can also cause ill health. For that and many other reasons, Crown immunity should be lifted so that the Health and Safety Executive can do its work properly and so that control is applied in areas that were previously protected by Crown immunity. It is not only in the catering areas of hospitals that accidents can occur or where epidemics start.
      Anyone who has done the rounds of hospitals, as I have over the years, could provide many examples of disregard for the Health and Safety at Work etc. Act 1974. That is seen in laboratory conditions, the storage of materials, the collection and disposal of rubbish, fire hazards and ventilation. While those breaches can be pointed out to Health and Safety Executive inspectors, there is still no compulsion upon health authorities to rectify the conditions. The best compulsion of all would be for Crown immunity to be completely lifted. I am sure that is what all Opposition Members will be arguing for today.
      Mr. Charles Kennedy: Time is getting on, and, if I may say so in the context of this debate, most of the arguments have been made ad nauseam. [Laughter.] I am glad that the hon. Member for Holborn and St. Pancras (Mr. Dobson), who is almost my hon. Friend, has got the joke.
      I repeat the support that I gave on Second Reading and in Committee for the extension of the abolition of Crown immunity beyond what is proposed in the Bill. I pick up the point argued by the hon. Member for Fife, Central (Mr. Hamilton), that one of the reasons why the Government have gone for a Bill of more limited application, and therefore, by implication, more limited objectives, is financial. It goes back to many of the debates that we had on the matter in Committee. In the explanatory and financial memorandum to the Bill the Government stress that it does not have financial implications. Many Opposition Members have said that that strikes us as nonsense. I suspect that, although they have not said so, many Conservative Members would agree with that.
      It stands to reason that if there are substandard kitchen premises in hospitals, and if health authorities have to
      44
      commit expenditure to bring them up to standard, that will have revenue implications. Given the extent of the problem nationally — it must exist to a considerable extent or we would not have the legislation—one can only assume, logically, that the Government realise that, on a national basis, there will be significant financial implications for health authorities from the measure. Despite the fact that the Government argue in the explanatory and financial memorandum to the Bill and in their speeches in support of the Bill that there are no financial implications, the appreciation of the likely financial implications — although the Government do not publicly admit to them—is one reason why they have confined the impact of the legislation to hospital kitchens.
      When one considers the background to the Bill, especially the report on the food poisoning outbreak at Stanley Royd hospital, it is fair to say, as the report did, that the absence of Crown immunity would not have prevented the disaster. That is sensible and self-evident. Paragraph 230 of the report states:
      "Basing our view on the facts proved before our Inquiry, and on these alone, the abolition of Crown immunity would appear unnecessary."
      The implication is clear: the general application — the report was talking about wider abolition than that which the Government propose—of such legislation would not have prevented what happened at the Stanley Royd hospital. However, the incident was the straw that broke the camel's back and moved the Government to introduce the legislation.
      After considering that specific case, and the undoubtedly important report, Health Ministers concluded that it would be enough to abolish immunity for hospital kitchens. They are mistaken in that. I cannot understand, for the host of reasons that we have heard during the debate, how the arguments that are advanced in favour of the limited abolition do not logically and forcefully apply equally to NHS premises in general. Neither on Second Reading nor in Committee did the Government give an adequate response to that basic contention.
      In reply to the Second Reading debate the Parliamentary Under-Secretary of State for Health and Social Security said that the general repeal of Crown immunity was not necessary because the Crown notice system already works well enough. He conceded that,
      "although 300 notices have been issued since 1980, in no case was it found necessary to take action." [Official Report, 15 April 1986; Vol. 95, c. 826.]
      I do not doubt the veracity of the Minister's statement, but if the Government were sufficiently persuaded to introduce this albeit limited measure, which must be an expression of their anxiety on the nationwide problem, how can they set that judgment alongside the arguments deployed by the Under-Secretary of State, who was saying essentially, "There is no problem whatsoever"? That is an argument based on internal absurdity——
      Mr. Ashley: It is a contradiction.
      Mr. Kennedy: I agree with the right hon. Gentleman. It is a fundamental contradiction in terms. The Government have not adequately defended or persuaded the House of their argument.
      Even allowing for that, there are difficulties with the Crown notice system in which the Under-Secretary of State placed so much faith. There are delays in implementing some Crown notices because there is no

      45
      automatic offence for failing to meet the deadline set. Under the Government, the number of Health and Safety Executive inspectors has been cut by 20 per cent. Much of their time is taken up by return visits to Crown premises to persuade employees to comply with their notices. Deadlines are sometimes renegotiated on non-Crown premises, but that is comparatively rare.
      The inspectors have less incentive to use Crown notices when there is no prosecution. In 1983, about 13 per cent. as many notices were served per 100,000 people at risk in the manufacturing and service industries as were served in NHS premises. Yet, as was fully and fairly stated by the hon. Member for Holborn and St. Pancras, one cannot say that the risk element or dangers in hospital premises can be reduced or overlooked to the same extent as they could be in some service industries. Hospitals are inherently dangerous places, for the many reasons given by the hon. Gentleman.
      Mr. Ken Weetch: The hon. Gentleman mentioned the word "prosecution". Does he realise that, although a considerable number of appalling facts were discovered during the inquiry at Stanley Royd hospital, it was subsequently revealed that there was not enough evidence to mount a legal prosecution? Has the hon. Gentleman considered what burden of proof might be necessary to find a way through this?
      Mr. Kennedy: If an incident involving so many tragic deaths does not constitute a sufficient basis for a successful prosecution, something is wrong. I am glad to welcome the hon. Gentleman's intervention, which hit the nail on the head.
      The Government argue that the Bill will have no financial implications, whereas we argue that even on this limited basis it will. Time will soon tell whose assessment is correct. Having argued that it will have no financial implications, the Government none the less stop short—I suspect largely for financial reasons—of extending the logic of their case beyond the hospital kitchen door to NHS premises generally. That suggests an acceptance, albeit privately, by Ministers and civil servants that the rhetoric on the Bill is not a fair reflection of the reality with which the Bill deals.
      Ministers have argued that the Crown notice system is satisfactory. The Under-Secretary of State laid special emphasis on that, yet there is a fundamental internal inconsistency in presenting that argument at the same time as the Government present the Bill. If they believe that the system is so good, why do they not stand by it? Why is it necessary to legislate?
      The hon. Member for Ipswich (Mr. Weetch) mentioned the appalling state of affairs highlighted by the report on the tragedy at Stanley Royd hospital. In part, the report mitigates in favour of the Government's argument, which is that legislation does not attack the root of the problem but rather allows some form of redress if the problem proves tragic. The central weakness of the Government's case is that they deny the existence of financial implications, although the Bill must have some. The Bill is also weaker because it stops short of more general application.
      We have welcomed the Government's fairly timid steps, but they do not go far enough. I hope that it is not too late for the Minister to see sense, to be slightly more candid and to accept that the principle of clause 1 should extend beyond NHS kitchens.
      5.30 pm
      Mr. Frank Haynes: First, I declare my interest as a vice-president of the Institution of Environmental Health Officers. It is proper to declare that interest because of my interest in their work. I was involved in local government for many years before coming here and it is clear to me that environmental health officers in all local authority areas have done a first-class job on behalf of the community.
      My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) made a first-class speech and mentioned slack control in the NHS. The service seems to have a protective shell. Through our proposed new clauses, we are trying to crack that shell so that the community can find out what is going on inside. I have heard Ministers defend the NHS and Crown immunity, saying that there is no need for its abolition, for long enough. There is great public feeling about the problems with hospital kitchens. I pay tribute to my right hon. Friend the Member for Stoke-on-Trent. South (Mr. Ashley) who has done a marvellous job for many years. He is one of those who have finally got the Government to cave in and abolish Crown immunity for NHS kitchens. There is no doubt that that is a step in the right direction.
      I have listened carefully to the debate, especially to what my hon. Friend for Holborn and St. Pancras said. He mentioned cleaning services. I also listened carefully to the intervention made by the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley). She should not have said what she did. She should have stayed in her seat. She boobed. There is no doubt about it. She talked of private organisations doing certain jobs in the NHS. Private firms are falling down on the job. It is all very well to say that they will not get paid if they do not do the job, but they are not doing the job properly in many respects, yet they are still being paid for what they were supposed to do and paying their workers little. One of the most annoying things about such private organisations, especially those involved in hospital cleaning, is that many Conservative Members are their directors or are associated with them. They should declare their interest.
      Mrs. McCurley: The hon. Gentleman is suggesting that all private enterprise is in some way malevolent and inefficient. The majority of health boards employ responsible and effective companies. If I failed to clean my kitchen properly for several weeks, would I expect it to remain hygienic for my family or would I expect mice to start coming in? May I suggest that the matter is not confined to cleaning services and that it matters very much how hospital staff conduct their daily business. Filth occurs when people do not do their work efficiently and properly.
      Mr. Haynes: That was a fairly long intervention. The understanding in this place is that interventions are short. I must repeat that my experience is that many private organisations in the NHS have not lived up to their responsibilities but have, nevertheless, been paid for the job.
      The hon. Lady mentioned her kitchen. We have a kitchen in our bungalow. It is spotlessly clean. I do not pay my wife for doing it. We share what we have. She does a first-class job on my behalf and that of the family. In many hospitals, however, the kitchens are filthy. It is high time that there was some action. The Minister can sit and nod

      47
      his head and grin every now and again, but he is still not listening. He is supposed to be replying to the debate, but if he does not listen how can he?
      I should like to pick up something that my hon. Friend the Member for Holborn and St. Pancras said about the Minister. I should like to know what he knows about the NHS. I have a reason for asking. He is a financial wizard.
      Mr. Weetch: Oh? That is news to me.
      Mr. Haynes: Oh, yes. He is a financial wizard. He was with the Treasury long enough. I tabled a question to the Minister because I wanted to know how many chairmen of district health authorities had no connection with the Health Service. It emerged that, out of 195 chairmen, 41 had no connection with the NHS. That is how the service is being run—on a financial basis. The Government are not running a service for the people who need what my hon. Friend the Member for Holborn and St. Pancras described.
      Mr. Allan Rogers: When my hon. Friend next tables that question, will he consider asking the Minister how many friends of Tory Ministers, how many solicitors and professional people employed by Tory Ministers and how many people connected with the Conservative party have been appointed as chairmen of health authorities? [HON. MEMBERS: "How many ex-Labour Members?"]
      Mr. Haynes: Can you hear them, Mr. Deputy Speaker? My hon. Friend has hit on a raw spot and Tory Members are reacting. Most of them are financial wizards from the finance houses and institutions of this land. They can be counted when the House is full. During these debates I have often looked at the Treasury Bench and seen as many as five millionaires on it. All they are bothered about is money. We in the Labour party are concerned with the service of the NHS to our people.
      Dame Jill Knight: Will the hon. Gentleman give way?
      Mr. Haynes: No, the hon. Lady has only just walked into the Chamber. The hon. Lady can make a speech if she wants to, Mr. Deputy Speaker, providing you let her. That is how this place works. I am trying to make an important point about the way in which the Government run the NHS: their motive is profit.
      Dame Jill Knight rose——
      Mr. Haynes: Because they run it on the profit motive, they want to protect Crown immunity. That is why we have tabled these new clauses.
      Dame Jill Knight: Will the hon. Gentleman give way?
      Mr. Deputy Speaker (Mr. Harold Walker):Order. I remind the hon. Lady that if the hon. Gentleman is not prepared to give way she should not persist.
      Mr. Haynes: I am obliged to you, Mr. Deputy Speaker. I always knew that the Chair would protect an hon. Member, and this is genuine protection. As I said earlier. the hon. Lady has only just walked into the Chamber and she does not know what has been said. I suggest that she hangs on a while and listens to some real debate. Only the Opposition are providing that. I wonder what is going on on the Tory Benches. Are they interested in the NHS?
      48
      [HON. MEMBERS: "No."] Will they listen to the Minister's reply to the debate without hearing it? When it comes to the vote Tory Members will troop through the Tory Lobby without having heard a word.
      Dame Jill Knight rose——
      Mr. Haynes: To give the Minister and the Whip their due, at least they are present and have heard the debate.
      Dame Jill Knight rose——
      Mr. Deputy Speaker: Order. If the hon. Lady wishes to participate she should seek to catch my eye. If the hon. Gentleman will not give way to her, she must not persist.
      Mr. Haynes: It is a bit off. The hon. Lady has been a Member of Parliament for many years and she knows the rules of the House as I do, although I have not been an hon. Member for so long as she has. I respect the Chair and live up to the rules and regulations of the House.
      In my visits to different hospitals throughout the country I have found that mentally handicapped people are treated differently from everybody else, and I wonder why. I have seen wards where the beds have been so close together that there is no room for a locker between them, and wards with beds placed before fire doors, so that in an emergency people cannot get out. If anything happens involving a serious loss of life the NHS and Ministers are within the protective shell to which I was referring. That is not good enough. In such an event they should be prosecuted. They should be taken to court and dealt with. Mentally handicapped individuals cannot possibly look after themselves.
      5.45 pm
      What power does a district fire officer have? In my area he must refer to one of the 41 recently appointed district health authority chairmen, who has a financial interest. The fire officer is reponsible to the chairman or the board, and they take no notice of him, so nothing is done. The shouting and bawling of local people making representations has persuaded health authorities to make alterations, and, indeed, they have. Nothing will be done with this profit motive business and the Government trying to save money here and there. We need much more money in the NHS. People are living longer nowadays and we must provide proper facilities for them. It is shocking that my local authority has not been allowed to build proper housing for elderly people.
      There are chiropodists in the NHS, but not enough of them because the Government have cut the funds for them. That means that, because elderly people cannot get the service of a chiropodist, they cannot be discharged and must lie in a hospital bed. I have seen many such cases, and before long the old person dies. The Government should be prosecuted for what they are doing. We have tabled these new clauses to get some sense into the NHS and into the heads of the Secretary of State and his cronies who sit with him. I am talking about not civil servants, but Ministers.
      Dame Jill Knight: On a point of order, Mr. Deputy Speaker. I have been listening most carefully to the hon. Gentleman and I wonder whether chiropody has anything to do with the new clause before the House.
      Mr. Deputy Speaker: I too have been listening carefully, and so far I have not heard anything that is out of order.
      Mr. Haynes: I am obliged to you, Mr. Deputy Speaker. Here we go again, with the hon. Lady abusing the Chair. I would never do that. I have had nothing to do with chiropody, and I declared my interest at the beginning of my speech. My connection is with the Institution of Environmental Health Officers which, together with my experience as an ex-chairman of a community health council, is why I have so much experience of the NHS. I know the hon. Lady's connections with the NHS, but I shall not say anything about them. I shall leave that to her.
      My hon. Friend the Member for Fife, Central (Mr. Hamilton) made an important point about the appointment of the new chairmen, and my chairman in central Nottinghamshire has no experience of the NHS. I understand my hon. Friend's interest in this area, and in the question of the rent that nurses must pay for their accommodation. We are on a winner with these new clauses. The Government are bumping up nurses' rents because their tiny financial minds tell them that this is another area where they can pull in a bob or two. That is how they think. They do not realise that those nurses are providing a service to the ill. People are in hospital because they are ill and hope to get better, so that they can leave and live healthy lives. The Government are clobbering the people who do a first-class job in the hospital service on behalf of the community, but they continue to make statements on the radio and television as though they were doing a marvellous job. Some of the Ministers should look behind the scenes——
      Mrs. McCurley: On a point of order, Mr. Deputy Speaker. Would you try to encourage the hon. Member to refer to new clause 1, because what he is talking about is totally off beam?
      Mr. Deputy Speaker: Order. With new clause 1 we are debating new clauses 2, 3 and 5 and amendment No. 62. The hon. Gentleman's latter remarks were addressed to new clause 5 and so seem to me to be in order.
      Mr. Haynes: I am obliged to you, Mr. Deputy Speaker. The hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) came in late and did not hear the speeches from the Front Bench. My hon. Friend the Member for Holborn and St. Pancras made all the necessary references to the clauses. It seems that one or two hon. Members are bidding for your Chair, Mr. Deputy Speaker. I am having nothing to do with that. They are trying to do your job for you and I object. That is what you are there for, Mr. Deputy Speaker. As I said before——
      Mr. Deputy Speaker: Order. I can get by very well without the protection and help of the hon. Gentleman.
      Mr. Haynes: I realise that only too well because I remember the wonderful, exhilarating experience that I had sitting on the Back Benches when you were at the Dispatch Box. I thought it was wonderful, but we lost you because you were appointed to that Chair, when you should have stayed on the Front Bench. I have got that off my chest. No matter where you are, whether at the Dispatch Box or in the Chair, you do a first-class job. There is no doubt that I have been within the rules of order because otherwise you would have pulled me up pretty smartly, because you are pretty keen in your job.
      I have said enough. I do not know how long I have been speaking, but I know that there will be other opportunities
      50
      to speak during the debate. We hope that the Minister is taking in all that we have said. We want the abolition of Crown immunity for the NHS. We want nurses to be looked after properly. We do not want them penalised, because they do a wonderful job on behalf of the community. If the Minister and the Government would accept many of the things that we have said this afternoon, the NHS would run a lot better.
      Mr. Rogers: I am pleased to follow my hon. Friend the Member for Ashfield (Mr. Haynes) in his exposition, and to join in his tributes to you, Mr. Deputy Speaker. I hope that during the course of my speech we shall not get interruptions telling you how to do your job.
      The new clause is of great importance to those Labour Members who have a special interest in the NHS. I agree with my hon. Friend the Member for Ashfield that it is only Labour Members who take a particular interest in the NHS. It seems that Conservative Members are interested in the NHS only when they want to borrow its equipment for use in private practice. The Labour party has a strong vested interest in the NHS because not only do we have a political and social commitment to it, but we participate in it. These are the only hospitals that our children will use. [Interruption] Does the hon. Member for Aberdeen, South (Mr. Malone) wish to intervene? It is sad that he could but dare not. I realise that the Conservative party is effectively gagged.
      Dame Jill Knight: I am grateful to the hon. Gentleman for giving way. He has always been courteous. Perhaps it is rather a good idea that the private sector occasionally deals with the Health Service in order to provide equipment such as the lithotriptor, which helps to get rid of kidney stone conditions, at St. Thomas's. About 75 per cent. of its use will be for NHS patients. Can this not sometimes be a useful partnership and so help the NHS?
      Mr. Rogers: Yes, but ——
      Mr. Deputy Speaker: Order. I hope that the hon. Gentleman is not persuaded to go down that road, because that will take us away from the new clauses.
      Mr. Rogers: I agree with you, Mr. Deputy Speaker. If the hon. Lady wishes to lead us down that road, I shall resist the temptation, except to say one thing. I understand that, under the arrangement to which she referred, private medicine makes a profit out of the lending of the machines. I do not blame it for doing this, because that is what it is in action for. The private sector is not hypocritical about it. It is like the Government, who are taking the country for a ride. However, that is what they are there for. They are there to serve their friends the City of London, for the quick buck, to make a couple of bob and shove everything into their back pockets. That is what the Tory party is about. It is not about serving the interests of the people and those who might need this precious institution, the National Health Service. This is why they have such a cynical attitude to the NHS. They will borrow from the NHS when they need to, but when they need to cheat and to jump to the front of the queue, and when they have special treatment——
      Mr. Deputy Speaker: Order. The hon. Gentleman is falling into the fault against which I warned him. I hope that we can return to the subject of the new clauses.
      Mr. Rogers: I shall do so, Mr. Deputy Speaker. I am sure that the hon. Member for Birmingham, Edgbaston

      51
      (Dame J. Knight) will want to intervene again, and if she does I hope that she will not lead me down these side alleys because if I follow her I shall be admonished by you again, Mr. Deputy Speaker.
      We are concerned about Crown immunity for hospitals and health authorities because of the appalling conditions that exist in some of our hospitals as a result of cuts in the service, which means that there is not enough money for proper cleaning and maintenance.
      I have come to the Chamber from the Public Accounts Committee where we were hearing evidence from the permanent secretary at the Department of the Environment on capital expenditure of local authorities. One fact struck me strongly and is pertinent to the debate. It is that it has been estimated by reliable authorities, and acknowledged as a correct figure by the Department of the Environment, that to enable local authorities to catch up with maintenance and refurbishing, on which they have fallen behind with schools, housing and roads, they would need capital expenditure of £40 billion to £50 billion.
      Mr. James Couchman: Rubbish.
      Mr. Rogers: The hon. Gentleman says, "Rubbish." If he wants to dispute my figures, perhaps he will correct me. He does not wish to. My figures are correct and will be written into the evidence of the Public Accounts Committee, and they have been published in the Comptroller and Auditor General's report. If the hon. Gentleman is saying that the Comptroller and Auditor General is an idiot and does not know what he is doing, perhaps he will be proved badly wrong. What he has said shows his ignorance of what goes on in local authorities. I am glad that we have been able to put his ignorance on the record.
      This problem affects the NHS as well because of the tremendous cuts in spending in this sector. Health authorities, even when run by Tory friends of Ministers, are suffering badly because they do not have enough money to refurbish hospitals to bring them up to standard. That is why the British Pest Control Association said on 11 September last year that cockroaches, rats, mice and other disease-carrying pests were "taking over" hospitals and putting patients' health and lives at risk.
      6 pm
      Mrs. McCurley: Is there anything in that report that criticises the Government? If the hon. Gentleman looks at the report more closely he will find no condemnation of the Government, but some condemnation of health authorities which spend more on window cleaning than on hospital kitchen cleaning.
      Mr. Rogers: The hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) probably has more knowledge of window-dressing authorities than I have. They probably exist in the Conservative areas, one of which she represents.
      The British Pest Control Association, in its book "Hospitals Can Damage Your Health", also calls for the abolition of
      "the anomaly of Crown Immunity"
      which prevents hospitals and other Government-owned buildings from being prosecuted. The report has already been sent to the Secretary of State for Social Services.
      Dr. Marek: This is an important matter in relation to the new clauses. I do not agree that we are talking about only a few authorities here and there. The problem is serious throughout the country and it is caused by lack of funds. Health authorities are so pressed and so much under pressure that pests and cockroaches exist in hospitals. There are countless examples throughout the country.
      Mr. Rogers: I thank my hon. Friend. The British Pest Control Association can hardly be called a raving Left-wing group. It has fairly strong connections with the Conservative party. The association says in its damning document:
      "It is a story of indifference and of apathy bordering on incompetence in the NHS."
      As the hon. Member for Renfrew, West and Inverclyde said, the problem is not only one of money, but of priorities. Often the problem is created because of the need to choose between refurbishing and providing front-line services for patients. The choice is often between life and death and refurbishing the kitchen.
      Because of the scandalous way in which the Government have handled the nurses' pay award, money has been taken away from the front-line services to fund that award. The Government have handled the problem shabbily in the last two years. The way in which Ministers have obfuscated and misled the House on the issue is a public scandal. The pay award might amount to £150 million or £300 million——
      Mr. Deputy Speaker: Order. The hon. Gentleman is straying again. Will he please get back to the new clauses?
      Mr. Rogers: I accept your admonition, Mr. Deputy Speaker, but the real problems in the National Health Service are concerned with priorities and lack of money. We talk about the appalling conditions which lead to our plea for a lifting of Crown immunity from hospitals and health authorities because conditions are such that health authorities have to choose between operating on acutely ill people and refurbishing a kitchen.
      Mr. Albert McQuarrie: One of the biggest problems is that health authorities have built huge administration towers. If we cut those and put more money into patient care there might be fewer problems in the hospitals.
      Mr. Rogers: That might be right. I am not here to defend bureaucracy. The bureaucrats are the Conservatives' friends. What amazes me about the Government and Conservative Members is that they have been in government for seven years. Any blame for problems in the National Health Service must lie in their laps. Why have they not done something about them?
      Mr. John Maxton: Does my hon. Friend agree that the Government are responsible for the grossly overpaid general managers——
      Mr. Deputy Speaker: Order. We cannot have a general debate about the National Health Service. I hope that we can now return to the new clauses.
      Mr. Rogers: You are right, Mr. Deputy Speaker. I am being constantly led astray from the general thrust of my argument.
      I have already mentioned the British Pest Control Association and its remarks about the standard of hygiene in hospitals. I said that it could not be regarded as a raving

      53
      Left-wing organisation. Another organisation which cannot be said to be hand-in-glove with the Labour party is the Institution of Environmental Health Officers, which states that hundreds of National Health Service hospitals fail to meet accepted hygiene standards and pose serious hazards to patients and staff. It says that almost 100 hospitals would face prosecution or be closed if they were not protected by Crown immunity. That institution has a statutory function to safeguard standards in all aspects of life except in connection with institutions controlled by the Government. The Government hide behind Crown immunity in the face of such damning indictments.
      The National Association of Health Authorities and the Royal College of Nursing, which is not what I would call a raving Left-wing, loony organisation, criticise declining standards of hygiene in the National Health Service. The campaign gathered a great deal of support as a result of the outbreak of food poisoning that led to the death of 19 patients at the Stanley Royd hospital in Wakefield during the summer of 1984.
      I must tell the hon. Member for Banff and Buchan (Mr. McQuarrie) that that was five years into this Government's administration. In those five long years they could have done something, but instead they spent millions of pounds on a foolish escapade in the south Atlantic and refused to spend money on giving our hospitals decent standards. I sometimes think it is a pity that General Galtieri did not raid the south Wales valleys, because had he done so we might have received some money. However, for that we would have to get him out of the nick first. It would perhaps not be such a bad idea if he were resurrected, because we desperately need the money.
      In my area, not only are hospital standards declining, but the number of hospitals is being reduced. Therefore, my area is doubly penalised. Reports that had been published showed that the standards were exceptionally high in hospitals in my area, but now those hospitals are being closed, which is a great tragedy for the people they serve and for those who work in those marvellous facilities that serve the community at large.
      The Institution of Environmental Health Officers said recently that 97 hospitals had hygiene standards that were sufficiently serious to warrant prosecution. Reinforcing the report of the British Pest Control Association, it said that 159 hospitals had significant pest infestations.
      Mrs. McCurley: Does the hon. Gentleman condemn those examples that we saw on television recently—I believe on "World in Action"—where staff at a hospital in Glasgow put together cooked meats and raw, dripping meat, uncovered, in the same refrigerator? That has nothing to do with the private sector and pest control associations. It has an awful lot to do with environmental health and the day-to-day standards of activity and work in hospitals.
      Mr. Rogers: The hon. Lady is right. I am glad that she supports my argument. If there is no money available for staff training, one cannot expect high standards of hygiene in the kitchen.
      Mrs. McCurley: It is basic common sense.
      Mr. Rogers: It is not a matter of basic common sense. Very often, no other facilities are available. I do not condone the rather silly happening to which the hon. Lady referred.
      Mr. Dobson: While on the subject of common sense, does my hon. Friend agree that the average spent on a long stay hospital is £40 per patient per day and that as only £25 per patient per day was being spent at Stanley Royd there might be some connection between the figures?
      Mr. Deputy Speaker: Order. The House is debating whether the Health Service should continue to enjoy immunity from legal proceedings stemming from various enactments. I hope that the House will stick to that.
      Mr. Rogers: I am trying desperately to do so.
      Mr. Deputy Speaker: Order. The hon. Member might try a little harder.
      Mr. Rogers: I shall indeed. If Crown immunity were abolished, probably half the people involved in controlling it would be put in the nick. The Department of Health has a cynical attitude to those most alarming reports that have been published, such as that by the British Pest Control Association and the Institution of Environmental Health Officers. In response, the Department of Health said:
      "We have not yet seen the environmental health officers' report but we will be looking at it very closely."
      Only the Department had not seen the report. At that time, the British Pest Control Association's report had been out for three weeks and the Department of Health, the authority responsible, had not seen it.
      The DHSS continued:
      "After the last such report, about eight years ago, we recommended to all health authorities, whose responsibility it is, that free access should be given to these officers, and that note should be taken of their recommendations."
      With all the notes and all the access in the world, there has been no action that is required by way of investment in the service.
      When we talk about Crown immunity and the scrutiny of hospital hygiene, we should perhaps consider what Peter Hartley, the chairman of the environment committee of Westminster city council, said. The city council is controlled by the Conservative party. In a letter to The Times dated 24 September last year Mr. Hartley said:
      "hygienic practices in Government premises—particularly in DHSS hospitals—are all too often below standard."
      Significantly, the letter did not mention private hospitals. I do not know whether Mr. Hartley is interested in those, but he is an expert on DHSS hospitals. He continued:
      "These hospitals are, of course, through t he active encouragement of the DHSS, subject to monitoring checks by local authority environmental health officers and the conditions there are open to inspection. Other Crown properties are not open to such council inspection and one may be forgiven for wondering what the overall situation really is".
      Mr. Hartley complained at length especially about the present law regarding Crown immunity. In the last paragraph he said:
      "In the wake of recent disclosures in other Crown premises a positive response from Government is called for."
      6.15 pm
      I wonder what the Government have to hide by not being prepared to lift Crown immunity regarding hospitals. On 22 June last year the English and Welsh health authorities met in Cardiff. They were told by Mr. John Yates, a research associate at the university of Birmingham, that at some institutions for the mentally ill cockroaches scuttle around the kitchens and patients beds are inches apart. He said that the conditions were absolutely appalling. He referred to a hospital that had dripping, dirty and dark corridors

      55
      " because the authority prefers to save money to spend on patient care".
      I think that his conclusion is wrong, because local authorities in my area do not have money to spend on patient care. I think that his conclusion is wrong, because local authorities in my area do not have money to spend on patient care. The Mid-Glamorgan health authority was told recently that it must give back £5·5 million to the Welsh Office, at a time when one of the most deprived areas of Europe is desperately short of hospital beds and hospital facilities.
      Dr. Marek: My hon. Friend has made a pertinent point. The Government, in the Bill, are making sure that hospitals come under the food Acts, but only the kitchens of hospitals where food is prepared. If my memory serves me correctly —we have it only on the Minister's say so —food will be protected under the food Acts as it goes on its way from the kitchens to the patients. My hon. Friend made a point about corridors and inadequacies in other parts of hospitals, besides kitchens. The Government are not doing anything about that. They ought to he invited to do so, unless they see sense at the last moment and accept the new clauses.
      Mr. Rogers: My hon. Friend is absolutely right. I do not understand why the Government do not agree to the fairly moderate new clause. It is a simple extension of the principle which the Government have accepted. If the principle is good enough to apply to kitchens, it is good enough to apply beyond them, as we are trying to invoke in the new clause. My hon. Friend is absolutely right in saying that in the large institutions—some of our mental hospitals are large institutions—the time between the preparation of food and when it is given to the patients can be fairly long. The food may have travelled a significant distance from the kitchens before it is given to the patients in the wards.
      Mr. Ray Powell: I ask my hon. Friend to refer to a hospital at east Glamorgan in his constituency. At that hospital, the repairs to the underground passage have been completed but the services have not been finished. In areas where there is raw cement and works, food is transferred from one trolley to another before it is taken to patients' beds. I suggest that the Minister should consider hospitals with conditions that I have outlined in the constituency of east Glamorgan, for which the Mid-Glamorgan health authority is responsible.
      Mr. Rogers: I am well aware of the conditions. Fortunately, I have used the hospital only once, hut, in the past three years, my two daughters have had appendix operations there. The hospital has a marvellous record because of the experience, skill and dedication of the nursing and ancillary medical staff. It dedicates itself to a community which is one of the most deprived in Europe. It has to cope with relatively primitive conditions. There is not enough money to refurbish some parts of the building which perhaps should have been knocked down and rebuilt. Even the refurbishment, to which my hon. Friend the Member for Ogmore (Mr. Powell) referred, which is now taking place slowly, is not enough to bring the hospital up to the high standards set by those who work there.
      These concerns are felt throughout the profession. It is not just a matter of the Opposition carping and political
      56
      dogma. The new clause has been tabled because every section of the community, with the exception of the Government and the Conservative party, wants Crown immunity to be removed. In April the British Medical Association wrote to my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) supporting his campaign for the substantial expansion of the Government's legislation to end Crown immunity in relation to hospital kitchens. The BMA wanted the legislation to be amended to cover all hospitals, clinics and health centres, and wanted the health and safety at work regulations to apply to all staff. That campaign has been carried on by the Labour Front Bench.
      No doubt the Government will respond by saying that there will he severe public expenditure implications if Crown immunity is lifted, but I believe that the implications will not be severe. The Government will again hide behind the response that they make to all reasonable legitimate demands. The Government, having accepted the principle of Crown immunity, should accept its extension to places through which food is transferred. That is a reasonable request, and I do not understand why the Government do not accept the new clause.
      Mr. Ray Powell: I know that you will bring me to order, Mr. Deputy speaker, if I stray from the new clause.
      Reference has been made to the appointment of chairmen of area health authorities. I should like the Minister to give full details of the changes since the Conservative party took office seven years ago, because they concern these new clauses. I want him to refer to the attitude of some chairmen to administration and particularly to hygiene and the money spent on certain parts of the NHS. I am concerned especially with the hygiene regulations that should be followed in hospital kitchens.
      At one time, the chairman of an area health authority in Wales, Mr. Ron Evans, was the agent of my right hon. Friend the Member for Blaenau Gwent (Mr. Foot). He was replaced by the solicitor and Conservative friend of the then Secretary of State for Wales. I know, Mr. Deputy Speaker, that you will bring me to order, but——
      Mr. Deputy Speaker: Order. The hon. Member is right. He is anticipating my comments. He said at the outset that I would call him to order if he strayed from the subject. He is now doing so. I hope that he will return to the subject of Crown immunity.
      Mr. Powell: I was merely prompting you, Mr. Deputy Speaker. I knew that it would not be long before you prompted me. Appointments are important, because the attitudes of chairmen and members appointed to area health authorities affect how finances in the Health Service are directed.
      Dr. Marek: Perhaps I am anticipating my hon. Friend's comments. He might be about to say that the excuse that is always given as to why hospitals have never been made subject to the provisions of the Health and Safety at Work, etc. Act 1974 is that there are no lines of communication, line management, and so on, that consensus decisions are made and that no one is in charge. Now that we have general managers that reason can no longer be used by those who seek to prevent the lifting of Crown immunity in hospitals. Is that not an important argument in support of the relevant new clause?
      Mr. Powell: It is relevant. My hon. Friend has rightly prompted me to suggest that we should consider lifting Crown immunity because of the declared interests of these managers.
      Mr. Rogers: My hon. Friend the Member for Ogmore (Mr. Powell) has referred to the problem in relation to the appointment of the chairman of the Gwent health authority. Would not my hon. Friend be wise if he pointed out that the gentleman who was ultimately responsible for the services in the area had no previous experience of the Health Service, but was simply the solicitor friend of the then Secretary of State for Wales?
      Mr. Deputy Speaker: Order. I hope that the hon. Member will not refer to such matters. They have nothing to do with the subject of the debate.
      Mr. Powell: I respect your ruling, Mr. Deputy Speaker. I appreciate the point that my hon. Friend the Member for Rhondda (Mr. Rogers) is probing. It is essential that the managers appointed to the new set-up of area health authorities should be experienced in the Health Service. That is as important as any of the measures discussed in Committee. If the managers are not experienced in the Health Service, the proposals in the new clauses will not be effectively carried out. I hope that the arguments during the past two and a half hours have convinced the Minister that he should accept the new clause.
      My hon. Friend the Member for Rhondda referred at length to articles in the Nursing Mirror about cockroaches, bats, mice and other disease-carrying pests which are taking over hospitals and putting at risk the health and lives of patients. He referred specifically to the British Pest Control Association in a contribution that dealt entirely with the subject matter of the new clause—Crown immunity.
      I served on the Mid-Glamorgan area health authority for some years before I became a Member of Parliament. I visited hospitals in Mid-Glamorgan and my job, as a member of one of the committees, was to inspect the kitchens. In addition, my son spent four years in and out of the East Glamorgan and Bridgend hospitals. That gave me a further opportunity to visit hospitals before 1979. Since 1979 I have visited constituents and relatives in the same hospitals. The conditions in those hospitals now are absolutely appalling because of the lack of finance to ensure that they are hygienic. The corridors and passageways are not kept as clean as they should be. The health standards that are required in restaurants, canteens and in the Palace of Westmister are far higher than those that are to be found in the National Health Service.
      6.30 pm
      Mr. McQuarrie: What did the Labour Government do about removing Crown immunity between 1974 and 1979? The hon. Gentleman referred to hospitals generally as being filled with cockroaches and vermin. That may apply to England and Wales, but it does not apply to Scotland. Nurses are trained not only in patient care but in hygiene. I saw a classic example of that only last weekend at the Royal Alexandra infirmary in Paisley. Ward 8 was spotless and the food that arrived from the kitchens was superb. [HON. MEMBERS: "It is a Labour area."]Yes, it is a Labour area.
      Mr. Powell: The hon. Gentleman is fortunate to have those conditions in Scotland. He referred to the Labour
      58
      Government. That was indeed the ideal period. During that time I served on the Mid-Glamorgan area health authority. The conditions about which the hon. Gentleman boasts in Scotland were conditions that my constituents and I enjoyed in Mid-Glamorgan, but we are not enjoying them now. During that period the Labour Government introduced many protective measures, including the Health and Safety at Work etc. Act 1974. I should like those measures to apply to hospitals as they apply elsewhere. In this place we pass Acts of Parliament but they do not apply to us. Perhaps that is just as well, because I should not like the conditions that one finds in National Health Service kitchens to apply to the kitchens in the Palace of Westminster.
      The Government say that they are spending more money on the National Health Service. I have been invited to the opening on Wednesday of a new hospital in Bridgend. We have fought for that hospital for 18 years. It will replace a number of hospitals in Ogmore and in Mid-Glamorgan. [HON MEMBERS:"Who is opening it?"] The Princess of Wales, and it is to be called the Princess of Wales hospital. However, the new hospital is to replace some of the old hospitals. Many of the old cottage hospitals, which were built with the donations of pennies and threepences a week by the miners, are to be closed. Instead of better facilities, there will be even worse facilities. The small communities will no longer have their cottage hospitals.
      I have been round the new hospital and I am not all that enamoured of it. Although some of the cottage hospitals were built a century ago, their hygiene standards are far better than those in the new Cardiff hospitals.
      Mr. McQuarrie: That is exactly what I was trying to point out to the hon. Gentleman. The standards of hygiene in the older hospitals are far superior to those in the new hospitals. Nurses are trained to ensure that in listed buildings, which were built 100 years or more ago, high standards of nursing and hygiene are maintained.
      Mr. Powell: Then why are the Government closing the old hospitals that we should like to retain? The new hospitals should he used to meet the demand for hospitalisation.
      Mr. McQuarrie: As I said earlier, the construction and types of wards in listed hospital buildings are unsatisfactory for modern medical practice, but in rural areas in particular the smaller hospitals can be used for geriatric patients. I have many hospitals of this type in my constituency. Instead of being looked after in massive hospitals, patients are cared for in the very kind of hospitals to which the hon. Gentleman referred —nice little hospitals, where people can feel at home in the latter days of their lives. There is a very good case for retaining such hospitals in rural areas.
      Mr. Deputy Speaker: Order. I am afraid that once again we are wandering away from Crown immunity. May we return to the new clause?
      Mr. Powell: I am sorry that you intervened, Mr. Deputy Speaker, because I was enjoying the hospitalisation Utopia for which I have been looking and which the hon. Gentleman was describing in Scotland. In Mid-Glamorgan, however, the Government are closing not

      59
      only the old hospitals but the geriatric hospitals. In Mid-Glamorgan, 14 hospitals, including geriatric units, are being closed. They are old hospitals, but they provide better care for patients than some of the new hospitals.
      The new clause ought to be accepted by the Government. It will protect those who have to go into hospital for treatment. It is frightening to read the reports to which my hon. Friend the Member for Rhondda (Mr. Rogers) referred. When patients enter hospital they hope to be cured, but because disease-carrying vermin contaminate their food they leave hospital in a far worse condition than when they went in.
      Mr. Rogers: My hon. Friend referred to my area, which is adjacent to his constituency, and to the problem we face over hospital closures. We feel passionately about this, because of what is happening at the Pentwyn cottage hospital at the top end of the Rhondda where my hon. Friend was born. It is vital that the new clause should be implemented to extend immunity to this hospital for the remaining period of its use. It is about to be closed. Very severely handicapped children and people with ——
      Mr. Deputy Speaker: Order. The hon. Gentleman is stretching my patience and, no doubt, the patience of the House.
      Mr. Powell: I will not wander down that road, Mr. Deputy Speaker.
      My hon. Friend the Member for Rhondda spoke about an area that is dear to my heart—the Rhondda, where I was born and bred — and the hospital that he spoke about is on my doorstep. That hospital treated many miners when they were taken out of the colliery just half a mile away. Although the colliery no longer exists, many miners and miners' widows still live in the area and would enjoy the facility of such a hospital. I have spoken about Mid-Glamorgan because it has a lot to do with this new clause. A brand new hospital is being built, but it will not offer the same facilities as the old one. That new hospital is being built as a result of pressure in this House from 1979, so that the 700 people on the hospital waiting list in that area can be accommodated. We were promised a new hospital and no closures, but within seven years hospitals with high standards of hygiene and health care are being closed.
      When people go into hospital for treatment of any sort, have they any claim against the authorities if they are infected by vermin or suffer from food poisoning? It has been suggested that boils, abscesses, typhoid, pneumonia, dysentery, worms or jaundice can be contracted by people in hospital as a result of inefficient management. Cockroaches and all sorts of vermin are sometimes found in the food that patients eat. How can a patient prove that that is because of neglect by the management?
      Recently I was wheeled through one corridor after another in the Bridgend hospital, from one part of the hospital to another, to have an ear operation. I noticed that the walls were not being repaired, and cobwebs and cockroaches and other vermin could be seen in the corridors along which I was being wheeled. That was before I got into the operating theatre. The theatre is supposed to be kept in such a way that a patient cannot catch an infection or disease. I was just having an ear operation, but I could have been having my leg off.
      60
      After my operation I was wheeled back along the same dirty corridors with the paint peeling off the walls and half the floor coming up. In my room, as I was coming round, I saw six people in pinstripe suits standing at the foot of my bed. I thought they were Members of Parliament. I said, "What on earth are you doing here?" They told me that they had come to look at the room because they were in the process of offering a price. "A price for what?", I said. Unknown to me, because on that day I did not have the Western Mail, there was a front-page article which said that Bridgend cottage hospital was up for sale, was open to offers and could be inspected almost immediately. I understand it has now been sold. There I was in bed recovering from an operation, and six people were measuring the room because they wanted to purchase the hospital. Surely the health authorities could wait until patients have been properly treated and discharged from hospital before they start selling the building under the very noses of people who have just had operations.
      6.45 pm
      There should be some measure to force health authorities to ensure that the standards of hygiene we expect in areas like Mid-Glamorgan and throughout Britain are maintained.
      I do not want to dwell on the hospital service in Wales. I have also been to hospitals near the House of Commons. There is no way that we can get medical treatment in the House. We have to go to the hospitals nearby. If I were to suffer a heart attack now, I would have to wait until somebody could take me to Westminster hospital or to St. Thomas's hospital. That is because there is no sick room or hospital room in the House. There are 650 hon. Members and a staff of 3,000, as well as other people who visit the House. It is deplorable that we have so few medical facilities. If we worked in industry, we would have better facilities than anything that is available in this place.
      Some years ago I went to visit a close friend of mine who was in hospital, the late hon. Member for Newcastle upon Tyne, Central, Mr. Harry Cowans. He was in a room on his own, and the conditions were disgraceful. That is all we can expect when we go forward from the House. It is no different from what I expect when I visit some of the hospitals in Mid-Glamorgan and see the treatment that is available there. It is high time that the Government did something to ensure that standards of hygiene are improved. Patients in hospital should not suffer from infection caused by the problems that I have mentioned. The disrepair of hospitals, especially old hospitals, should be remedied.
      I hope that the Minister will respond to the speeches on this new clause by accepting it.
      The Minister for Health (Mr. Barney Hayhoe): This debate has gone on for just over three hours and I suspect that the House would like to see it concluded. The longer the debate has continued the weaker the case in favour of this new clause has become. The general conditions that have been so roundly condemned by Opposition Members existed throughout the lifetime of the last Labour Government. This Government have come forward with the initiative to abolish Crown immunity in relation to hospital food and kitchens. That initiative was warmly and rightly welcomed when it was announced by my right hon. Friend a few months ago. There has been hardly a mention of that in the debate and one can only assume from the speeches of Opposition Members that for them history

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      began with the general election in May 1979. The hon. Member for Holborn and St. Pancras (Mr. Dobson) barely acknowledged responsibility for these matters——
      Mr. D. N. Campbell-Savours: On a point of order, Mr. Deputy Speaker. I have just been to the Vote Office to pick up a copy of the report of the Second Reading of this Bill and it was not available. It is unprecedented for us to have a debate of this nature when the report of the debate on Second Reading is not available. What can he done? I am told that we must wait for it to come from the printers. We are now on Report and many hon. Members want that document for reference. This is a genuine point of order. We cannot all go to the Library and photocopy all the proceedings. It is unreasonable that we should be debating the matter when the arrangements and supporting services of the House have broken down in that way. I wonder whether you will be able to do something, even at this late hour.
      Mr. Deputy Speaker: I understand that the hon. Gentleman is complaining that there is not a copy available in the Vote Office of the official record of the Second Reading debate. I shall have some inquiries made.
      Mr. Hayhoe: I was talking of the changing situation which existed for many years under the Labour Government. Those Labour Members who have spoken have hardly acknowledged their party's responsibility in these matters. Indeed the hon. Member for Holborn and St. Pancras acknowledged in about 30 seconds that, with hindsight, he would have preferred matters to have been put right earlier. But the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) was wholly and utterly partisan and selective. His world clearly begins in 1979. He was self-satisfied with his own party's record and unfairly critical of others. That narrow, blinkered approach does him no credit at all.
      The tragic affair at Stanley Royd has been prayed in aid by many hon. Members. I should make it clear that the report of the committee of inquiry into the outbreak of food poisoning at Stanley Royd reported that the presence or absence of Crown immunity would have altered nothing at Stanley Royd. Available finance has also been referred to. Again, the official report made it clear that resources were not the cause of the outbreak. The reasons were as follows:
      "So far as the immediate cause of the outbreak at Stanley Royd is concerned, namely errors and faults in the preparation and handling of food, there are no recommendations which we can make which have not been made before, which do not appear in the numerous publications on catering and hygiene to which we were referred and which were published to everyone concerned … All the rules and principles of good catering practice appear to have been within the knowledge of those concerned in Stanley Royd before the outbreak, including the requirement to keep samples of the food served from the kitchens. The outbreak occurred because those concerned ignored those rules and principles. The failure to follow known rules and principles arose, at least in part, because of the long standing failure of the supervisory grades to supervise adequately. This failure caused venial habits to become bad practices. In turn the failure of the supervisory grades stemmed in part from the failure of management to manage, to check, and to ensure that the staff were constantly reminded of the rules and complied with them."
      That must be the background to what we are considering today. Indeed, the report of the committee of inquiry is
      62
      one of the most powerful arguments in support of general management, which did not exist when the outbreak occurred, being introduced.
      Reference has also been made in the debate—
      Mr. Kevin Barron: Will the right hon. Gentleman give way?
      Mr. Hayhoe: No. I shall deal with some of the points that have been raised during the debate. The hon. Gentleman was not here and it is important to respond to the points that have been made during what has been a long debate.
      Let me deal with competitive tendering. Labour Members, in their usual prejudiced and dogmatic fashion, sought to say that if something was being done by a private contractor it was necessarily bad, with the implication that if something was being done by a public employee it was necessarily good. I reject such a dogmatic and absurd view of the world. The truth is that good practice occurs in both the private and public sectors, just as bad practice can occur in both. I want to see conditions with general management within the NHS supporting good practice and trying to ensure that the sort of failures that occurred at Stanley Royd never occur again.
      We have had something of a re-run of the debate in Committee. The hon. Member for Holborn and St. Pancras repeated the arguments that he put then, as did some of his hon. Friends, and so I must repeat some of mine. There is no exact parallel between Crown immunity as it affects hospital food and kitchens and Crown immunity as it affects health and safety legislation and, indeed, other matters.
      The Labour Government treated those matters separately and differently. Most of the representations that we as Members of Parliament have received in recent months also treated these matters separately and differently. The Government have made it clear that the test that they apply to deciding whether Crown immunity should be lifted from a given area of legislation is that the case must be made that the lifting of Crown immunity is the best way to secure arty improvement in standards necessary to protect patients and staff.
      The Government believe that that case has been established with regard to the application of food hygiene legislation to health authorities. That is why the Government have brought forward the measures contained in clause 1. The wider matters to which hon. Members have referred at various points in the Bill's progress, and which were referred to specifically by the hon. Member for Holborn and St. Pancras in moving new clause 1, are of clear importance, but in no instance has the case to lift Crown immunity been made with the same strength as was made with respect to food hygiene legislation.
      Mr. Dobson rose——
      Mr. Hayhoe: Let me deal with some of the points raised during the course of a long debate, in which I listened to every word.
      Arrangements were established by the Labour Government when they introduced the Crown notice system which still apply and which are working reasonably well. The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) referred to comments that my hon. Friend the Under-Secretary, the Member for Wycombe (Mr.

      63
      Whitney), had made in replying to the Second Reading debate about the fact that 300 notices had been issued between 1978 and 1984. All had been dealt with and none referred to the Secretary of State concerned noncompliance matters. The Crown notice system, as introduced by the previous Labour Government, gave the power to the health and safety inspectors, if they believed that a Crown notice was not being complied with, to refer that matter to the Secretary of State of the Department concerned.
      Suggestions have been made by the hon. Gentleman, and I think elsewhere, that there has been, to put it in unpejorative terms, a more relaxed approach by health and safety inspectors when they were dealing with Crown premises compared with the attitude that they adopted when they were dealing with other premises. I am grateful to have a nod of assent from the hon. Gentleman. The Health and Safety Executive is now tightening up its procedures to ensure that requirements for compliance are as stringent for Crown premises as for firms in the private sector. In particular, it is issuing new procedures with instructions to health and safety inspectors, revised to emphasise that a problem found in a Crown body should receive the same priority as it would in a private concern. The time allowed to do remedial work—a point raised by the hon. Gentleman—should be no more generous than it would be for the private employer. In general, a sense of urgency should be instilled into the execution of any required improvements.
      Secondly, copies of all Crown notices that have not been complied with in the time allowed and reports of all offences that, but for Crown immunity, would have led to prosecution, must now be sent directly to the headquarters of the Department responsible for the establishment concerned.
      7 pm
      A positive and constructive change is being adopted for health and safety inspectors and I believe that that will go a long way towards reinforcing the existing good working relationship between those inspectors and Health Service personnel.
      Reference was made to health authorities restricting the access of inspectors. There is no justification for that. Any inspectors who feel that access is being restricted or that they cannot make random, surprise visits should raise the matter with their superiors. It is intended that such access should be available.
      The hon. Member for Holborn and St. Pancras and others mentioned the Rent Acts. The effect of Crown immunity is that NHS tenants are not protected tenants under the Rent Acts. However, council tenants are also not protected tenants under the Rent Acts and, as far as I can see, the hon. Member for Holborn and St. Pancras wants to institute for the NHS a regime that I suspect that he would not be prepared to introduce for local authorities. I may do him an injustice, but he certainly did not refer to that matter.
      The hon. Member for Holborn and St. Pancras put the debate into the wider context of the Government's policy on NHS residential accommodation. I dealt with the issue in an Adjournment debate on 23 May and I repeat what I said then. The conditions under which staff occupy NHS accommodation and under which health authorities
      64
      manage the residential estate require examination, with a view to establishing a code of practice or some similar set of arrangements. My right hon. Friend the Secretary of State has therefore asked the NHS management board to review these matters urgently and to consult health authorities and professional and staff interests. I am sure, from the general tenor of what the hon. Gentleman said, that he will welcome that clear undertaking and I hope that the House will welcome its repetition.
      The review will consider Crown immunity and it would be wrong to prejudge or pre-empt the review body's consideration.
      The hon. Member for Fife, Central (Mr. Hamilton) asked about the circular that I said on 23 May would be sent out fairly soon. I can tell the hon. Gentleman that the advance copy went to regional general managers on Friday and the printed copies for wider circulation will follow.
      The hon. Member for Holborn and St. Pancras referred to the West Surrey case. He knows about the case and his comments today were even more odd than was his original prejudice, which was based on a fairly complete ignorance of the background to the incident. The property concerned was not owned by the NHS; it was leased from a trust company, which sought to increase the rent to £5,000 a year—four or five times the previous level. The notice to quit was served on the health authority, which, in turn, had to take action and did so by offering the nurse alternatives. I understand that after a fair amount of to-ing and fro-ing she has accepted alternative accommodation.
      Mr. Dobson rose——
      Mr. Hayhoe: The hon. Member for Holborn and St. Pancras wishes to intervene, but let me ask him a question. He seemed to be saying that the nurse should have an absolute right to remain in that property, come what may. But what if the rent had been going up to £10,000, £20,000 or £100,000? Would he still maintain that Health Service funds should be diverted in that way and that NHS management should not take appropriate action to deal with the situation?
      Mr. Dobson: For a start, it was the Secretary of State who was stupid enough to give a guarantee without any reservation or caveat. If he had to break his word to do what he thought was sensible, that is his problem.
      If the Minister is saying that the Secretary of State's guarantee applies to no leasehold property, why, when the case arose, did the right hon. Gentleman rely on Crown immunity? The Government ought to accept responsibility for people living in NHS property. If they do not, they surely cannot fall back on Crown immunity as a way of getting people slung out.
      Mr. Hayhoe: Crown immunity is a side issue in this case. The essential element is that the property was not owned by the NHS and therefore did not form part of the review of the methods of dealing with that property to which my right hon. Friend was referring when he gave the hon. Gentleman that assurance. I am sorry that, despite our correspondence, the hon. Gentleman seeks to place that assurance in a much wider context.
      Mr. Dobson rose——
      My Hayhoe: I will not give way to the hon. Gentleman, because I think that the House is ready to come to a decision on the new clause.

      65
      The lurid descriptions of Opposition Members of the state of kitchens and other parts of NHS hospitals could lead one to imagine that things were different when Crown immunity did not apply under the Labour Government. Of course, conditions were precisely the same then. We are improving them, in a limited, constructive and helpful fashion.
      Great stress has been laid on unacceptable conditions in many of our hospitals from time to time, but it would be right to end the debate by paying tribute to the staff concerned for maintaining high standards as the normal course. It would be wrong if the critical speeches of Opposition Members sent out a message that was critical of the standards of care and service that the vast majority of NHS personnel give to the Service.
      Dr. Marek: The Minister has a contorted view if he believes that conditions are the same as they were under the Labour Government. That is not true, because, by and large, conditions in hospitals were considerably better before 1979.
      The explanatory and financial memorandum to the Bill says:
      "Clause 1 has no implications for public expenditure."
      Yet the Government are seeking in clause 1 to make sure that hospital kitchens come under the food legislation and if there are kitchens that are not up to scratch and in which there are cockroaches, flies, feral cats and other vermin, it will necessarily cost money to bring those premises up to the required standard. The comment that clause 1 has no implications for public expenditure sets the tone of the Bill and tells us what the Government really think of the NHS and its hospitals. They want to make the right noises in public. They will do the minimum necessary, but they will not spend money, because by and large Conservative Members and their friends do not use the NHS.
      Mr. Rogers: A letter sent to my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) by the National Association of Health Authorities in England and Wales says that if more effective management is to enable higher standards to be established, extra money will have to be given.
      Dr. Marek: My hon. Friend has made the point for me. It is obvious, not only to Labour Members, but to the public, that the Government's hypocrisy has carried them through since 1979. Indeed, they are talking about hanging on until 1988, but the public will not be deceived.
      The Government claim that the minimal clause has been introduced because they are dissatisfied with the conditions in hospital kitchens. Of course, that is not true. The credit for the introduction of this Bill must go to the hon. Member for Aldridge-Brownhills (Mr. Shepherd), who was about to have his Bill debated. There was so much concern on both sides of the House about the conditions prevailing in hospitals that the Government had to do something about them. The Government would not have introduced the measure if the hon. Member for Aldridge-Browhills had not been in that situation.
      There is no point in introducing a clause that seeks to make only hospital kitchens subject to the food legislation. Food is sent in by outside caterers, has to be prepared, and then travels up and down the corridors. At present we do not know whether the whole area will be subject to the food legislation. After the food has been eaten, the swill and refuse have to be taken away.
      66
      My hon. Friend the Member for Fife, Central (Mr. Hamilton) said that cockroaches were no respecters of boundaries. They may primarily eat food that they find in hospitals, or they may find a living in rooms where drugs are kept. The legislation will not cover those areas. [Interruption.] The Government are stupid to say that the legislation should cover food but nothing else.
      I shall give some examples of letters that I have received about the Bill. This is an important debate. I know that Conservative Members want me to hurry up, but we are discussing a serious issue. I have received a lot of correspondence, and the issue must be given due consideration. The BMA said:
      "The Association's Annual Representative Meeting"—
      which is the policy-making body of the BMA—
      "last year passed the following Resolution: — That this Meeting believes that Health and Safety at Work Regulations should be enforced on Crown property."
      One of the new clauses seeks to do just that.
      Why should we ask for health and safety at work legislation to be enforced on Crown property in addition to food legislation? The Health and Safety at Work etc. Act was passed by the previous Labour Administration. It has contributed to safety and the maintenance of standards—something for which the Government have shown little regard. The Act makes
      "further provision for securing the health, safety and welfare of persons at work, for protecting others against risks to health or safety in connection with activities of persons at work, for controlling the keeping and use and preventing the unlawful acquisition, possession and use of dangerous substances."
      I should have thought that the new clause, which seeks to apply the Health and Safety at Work etc. Act to hospital premises, was unexceptionable in this case. After all, there are plenty of dangerous substances in hospitals. That Act also controls certain emissions into the atmosphere. It makes further provision with respect to the
      "employment medical advisory services; to amend the law relating to building conditions".
      The ordinary man in the street would immediately say that we needed all those things and that the Act should apply to NHS hospitals.
      In 1983 the Health and Safety Commission went so far as to issue a document entitled, "Safety Policies in the National Health Service", which set our guidance for employers in the NHS
      "to devise and use effective statements of health and safety policy as required by the Health and Safety at Work etc. Act 1974".
      However, the document was disappointing in that its foreword clearly stated that the guidance document did not have the force of law or of an approved code of practice. The Minister made great play of Crown notices being tightened up and reporting being made much stricter, but there is still a deferential attitude when it comes to applying that Act to the NHS. I do not think that any circulars or ministerial prompting of the Health and Safety Executive will change that.
      David Basnett, general secretary of the General Municipal, Boilermakers and Allied Trades Union, submitted a document entitled, "The case against Crown Immunity". It cites case No. 2 in which the House may be interested, which concerns an explosion in kitchen equipment. The prosecution of an NHS manager was eventually dropped. I shall briefly go through the case later, but it is a pity that the prosecution was dropped simply because the Health and Safety Executive did not

      67
      have the necessary powers. It had a deferential attitude towards the NHS and was persuaded not to prosecute. "The case against Crown Immunity" says——
      Mr. Willie W. Hamilton: On a point of order, Mr. Deputy Speaker. I am trying to listen to my hon. Friend, but these louts down by the Bar of the House are preventing me from doing so. Will you get some kind of order in the place?
      Mr. Deputy Speaker (Sir Paul Dean): I am also finding it somewhat difficult to hear. I hope that the conversations taking place in various parts of the Chamber and outside it will cease so that we can hear the hon. Member for Wrexham (Dr. Marek), who has the Floor.
      Dr. Marek: The following was said about that intended prosecution:
      "An HSE inspector issued a summons against an NHS Area Administrator for a breach of the Health and Safety at Work etc. Act following an explosion in kitchen equipment and other safety defects. (Managers and other employees in Crown premises can be prosecuted as individuals even though the organisation itself is immune). Following intervention by senior HSE Administra-tors the summons was withdrawn and the Inspector was later transferred. The GMB wrote to the Chairman of the HSC to complain and to seek an explanation. In his reply the HSC Chairman said that Crown Immunity had 'complicated the issue' and that the summons had been withdrawn following more than the usual degree of scrutiny by senior HSE administrators who recognised the 'wider implications' of such an action."
      It is not just a case that involves issuing a Crown notice or having a quiet word with the administrator or general manager. A risk to life and something quite serious was involved, yet the prosecution was dropped because of the deferential attitude shown towards the NHS by the HSE. The description of the case continues:
      "If Crown immunity had not complicated the issue there would have been a prosecution. A similar case involving another large new entrant area, ie employers covered by health and safety legislation or for the first time following the HSW Act 1975, had resulted in the prosecution of a senior local authority employer. The surrounding publicity and shock to senior managers in local authorities galvanised that whole sector of employment into compliance with the health and safety rules. This opportunity has been missed in the NHS due to the deferential attitude towards the NHS by the HSE".
      I had hoped that the Minister would take on board some of those arguments. There can be nothing wrong with applying the Act to hospital premises, especially as that would mean an arm's length relationship between the HSE and the NHS. If the HSE found something wrong, it would have statutory backing to take appropriate action. However one dresses it up, Crown notices are apologies for not doing the proper thing, which is to have statutory regulations guiding the HSE on how to secure the safety of the nation.
      The staff in hospitals cannot have the same level of concern about health and safety as they would if there were statutory guidelines. Kitchens are dangerous places, and if the Health and Safety at Work etc. Act were applied there would be a formal system of committees, health and safety officers and inspections. That happens in some hospitals anyway, but there is no statutory backing and the staff cannot demand it. It is another failure in the system.
      What possible excuse can the Government give for not allowing the Act's provisions to apply to hospitals'? I
      68
      answered that question during my opening statement—the Government do not want to spend the money. They do not care one jot about what happens in the NHS. They would prefer that it did not exist. By and large, Members of the Conservative party do not use the NHS, so the Government do not have the interests of NHS patients or NHS employees at heart.
      The BMA document makes other points, but I accept that time is becoming short——
      Mrs. Clwyd: Does my hon. Friend agree that the Health and Safety Inspectorate has been run down under this Government and that there are now 15 per cent. fewer inspectors than in 1979? Therefore, the number of visits to factories and hospitals has fallen by 15 per cent. The inspectorate cannot even do the job that it is expected to do. It is no wonder that the Government do not want Crown immunity lifted from hospital kitchens.
      Dr. Marek: My hon. Friend makes a valid point. The Government are not interested in the health and safety of employees, only in the health and wealth of their supporters — and they do not find their supporters working in the NHS.
      The new clause seeks to extend the removal of Crown immunity so that hospitals come under the Health and Safety at Work etc. Act. The BMA points out that one of the appendices to the Health and Safety Executive document "Safety Policies in the Health Service 1983" gives a checklist that identifies matters that should be covered in safety policy. It is only a guideline, but it involves some detail in identifying matters that should be considered in the implementation of safety policy. Questions were posed under headings such as noise and vibration in hospitals, radiation, dust, toxic materials and their availability and storage, various gases, infection risks and disposal of waste and effluent. Those areas are of relevance not only to staff but to patients, and the guidelines provide a cogent argument to show why the new clause should he accepted.
      Patients are not well people — they are which is why they are in hospital. They need more than the usual care given by health and safety inspectors at a normal place of work. The House should bend over backwards to ensure that the most stringent conditions apply.
      The BMA document further states:
      "The 1974 Act was to make further provision for securing the health and safety of persons at work and for protecting others against risks to health or safety in connection with the activities of persons at work."
      I have given the House a fair impression of what the BMA thinks about this matter. It is a great pity that the Government are obdurate in their insistence upon saving money and not giving their blessing to the new clause.
      The Royal College of Nursing also believes that Crown immunity should be removed. A letter from its general secretary of 12 May, which I suspect has been sent to many hon. Members, states:
      "The Royal College of Nursing welcomes the Government's plans to amend the law relating to Crown immunity in respect of the Food Act 1984. The RCN would also urge amendments to the Health and Safety at Work etc. Act 1974 to remove the Crown's immunity from prosecution under that Act."
      Why does it say that? It is the major nursing union in hospitals and has direct experience of what happens. It has given its considered judgment.

      69
      The National Association of Health Authorities in England and Wales has written to express its support for new clause 1. It states that at its annual general meeting the following resolution was passed:
      "That Crown property should be legally subject to the same rights and requirements as other property in respect of matters of public concern such as environmental health and health and safety at work and that the present immunity should be removed."
      There are many other paragraphs in that letter, but I shall not read them because that paragraph is sufficient. It is a responsible body that has the NHS very much in its mind. It supports an extension of the removal of Crown immunity along the lines of the new clause.
      The Consumers Association does not go quite that far, but in a letter it complains about the enormous powers reserved for Ministers and states:
      "We have one serious reservation about the Government's Bill as it is drafted and this concerns clause 2(b). It seems that this subclause would give Ministers the power to reduce or even eliminate the application of the main principles of the Bill in virtually any way they see fit."
      The Government have done only the minimum necessary, and the view of that body is that Ministers are being given powers to reduce even what the Government are giving in clause 1.
      The British Pest Control Association believes that the problem of pest infestation has grown so rapidly that most hospitals are now affected. It is not saying that infestation has been present during the last six years under the Tory Administration at the same levels as under the previous Labour Administration. It says that the problem has grown rapidly and that most hospitals are now affected. That gives the lie to the Government's assertion that the problem existed when the previous Labour Government were in office and that the present Tory Government are taking action.
      I am not saying that the problem did not exist under the previous Labour Administration, but I contend that the Government's refusal to spend money on the NHS has led to the problem becoming more severe. The Government talk about expenditure of 24 per cent. in real terms, but that is a gross misrepresentation of the figures. I am grateful to the Minister for not repeating that misrepresentation when he replied to the debate. The real fact is that hospitals have been starved of money and have suffered throughout the past five years. Less money is available to them in real terms than hitherto.
      7.30 pm
      Hospitals are suffering because of the presence of private contractors in many institutions. That is one reason why the clauses have been tabled. If the House accepts them, it is undeniable that there will be a need for extra finance to be provided by central Government or from some other source so that matters can be put right. I believe that the extra finance must be provided in any event. Infestation is so bad that extra money will be necessary if the law is to be obeyed. If the clauses were passed, our case would be overwhelming and extra money would have to be provided.
      Private contractors are not interested primarily in the health and wellbeing of patients; they are interested in providing profits for their shareholders. I hope that the Government will not say outside the House that the Opposition have said that that is their view of the staff and workers of private contractors. I am not saying that. I accept that those people have been up to the mark.
      70
      Unfortunately, the conditions under which they have to work, the materials with which they are provided, low pay, a consequent lack of morale and inevitable uncertainty have led to the grave situation that is now to be found in our hospitals.
      The Opposition believe that the Government have gone a small step towards making life in hospitals for patients and NHS staff slightly better. They have done this only because the hon. Member for Aldridge-Brownhills has a Bill which is about to be debated and voted upon in private Members' time. We do not believe that the Government would have brought forward this measure if that had not been the position. Additionally, we believe that there is a long way to go and that extra provision should be made. Crown immunity should be removed completely and more finance should be provided. This is necessary because the Government have not been providing a real increase in finance for our hospitals. Given the seriousness of the clauses, the Opposition will be asking for separate votes.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 130, Noes 214.

      Division No. 211]

      [7.33 pm

      AYES

      Abse, Leo

      Flannery, Martin

      Adams, Allen (Paisley N)

      Foot, Rt Hon Michael

      Alton, David

      Forrester, John

      Anderson, Donald

      Foster, Derek

      Ashley, Rt Hon Jack

      Fraser, J. (Norwood)

      Ashton, Joe

      George, Bruce

      Atkinson, N. (Tottenham)

      Gourlay, Harry

      Banks, Tony (Newham NW)

      Hamilton, James (M'well N)

      Barron, Kevin

      Hamilton, W. W. (Fife Central)

      Beckett, Mrs Margaret

      Hardy, Peter

      Benn, Rt Hon Tony

      Hattersley, Rt Hon Roy

      Bidwell, Sydney

      Heffer, Eric S.

      Blair, Anthony

      Hogg, N. (C'nauld & Kilsyth)

      Boothroyd, Miss Betty

      Howells, Geraint

      Boyes, Roland

      Hoyle, Douglas

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

      Hughes, Dr Mark (Durham)

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

      John, Brynmor

      Bruce, Malcolm

      Jones, Barry (Alyn & Deeside)

      Buchan, Norman

      Kaufman, Rt Hon Gerald

      Caborn, Richard

      Kennedy, Charles

      Callaghan, Jim (Heyw'd & M)

      Leadbitter, Ted

      Campbell-Savours, Dale

      Leighton, Ronald

      Clark, Dr David (S Shields)

      Lewis, Ron (Carlisle)

      Clarke, Thomas

      Lewis, Terence (Worsley)

      Clay, Robert

      Livsey, Richard

      Clwyd, Mrs Ann

      McCartney, Hugh

      Cohen, Harry

      McDonald, Dr Oonagh

      Coleman, Donald

      MacKenzie, Rt Hon Gregor

      Cook, Frank (Stockton North)

      Maclennan, Robert

      Cook, Robin F. (Livingston)

      McWilliam, John

      Corbett, Robin

      Madden, Max

      Corbyn, Jeremy

      Marek, Dr John

      Cox, Thomas (Tooting)

      Maxton, John

      Crowther, Stan

      Maynard, Miss Joan

      Cunliffe, Lawrence

      Meacher, Michael

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

      Michie, William

      Deakins, Eric

      Mikardo, Ian

      Dixon, Donald

      Millan, Rt Hon Bruce

      Dobson, Frank

      Miller, Dr M. S. (E Kilbride)

      Dormand, Jack

      Nellist, David

      Douglas, Dick

      Oakes, Rt Hon Gordon

      Dubs, Alfred

      Park, George

      Eadie, Alex

      Patchett, Terry

      Eastham, Ken

      Pendry, Tom

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

      Powell, Raymond (Ogmore)

      Evans, John (St. Helens N)

      Radice, Giles

      Fatchett, Derek

      Raynsford, Nick

      Faulds, Andrew

      Redmond, Martin

      Field, Frank (Birkenhead)

      Richardson, Ms Jo

      Fields, T. (L'pool Broad Gn)

      Roberts, Ernest (Hackney N)

      Fisher, Mark

      Robertson, George

      71

      Rogers, Allan

      Thorne, Stan (Preston)

      Rooker, J. W.

      Tinn, James

      Sheldon, Rt Hon R.

      Wainwright, R.

      Shore, Rt Hon Peter

      Wallace, James

      Short, Ms Clare (Ladywood)

      Wardell, Gareth (Gower)

      Short, Mrs R.(Whampt'n NE)

      Wareing, Robert

      Skinner, Dennis

      Weetch, Ken

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

      Welsh, Michael

      Snape, Peter

      Wigley, Dafydd

      Spearing, Nigel

      Williams, Rt Hon A.

      Steel, Rt Hon David

      Wilson, Gordon

      Stewart, Rt Hon D. (W Isles)

      Winnick, David

      Stott, Roger

      Strang, Gavin

      Tellers for the Ayes:

      Thomas, Dafydd (Merioneth)

      Mr. Frank Haynes and Mr. Ron Davies.

      Thomas, Dr R. (Carmarthen)

      NOES

      Alexander, Richard

      Emery, Sir Peter

      Alison, Rt Hon Michael

      Evennett, David

      Amess, David

      Eyre, Sir Reginald

      Arnold, Tom

      Fairbairn, Nicholas

      Ashby, David

      Fallon, Michael

      Aspinwall, Jack

      Favell, Anthony

      Atkins, Robert (South Ribble)

      Fenner, Mrs Peggy

      Atkinson, David (B'm'th E)

      Finsberg, Sir Geoffrey

      Baker, Nicholas (Dorset N)

      Fletcher, Alexander

      Batiste, Spencer

      Fookes, Miss Janet

      Beaumont-Dark, Anthony

      Forsyth, Michael (Stirling)

      Bellingham, Henry

      Forth, Eric

      Bendall, Vivian

      Fraser, Peter (Angus East)

      Best, Keith

      Freeman, Roger

      Biggs-Davison, Sir John

      Gale, Roger

      Blackburn, John

      Gardiner, George (Reigate)

      Blaker, Rt Hon Sir Peter

      Gardner, Sir Edward (Fylde)

      Bonsor, Sir Nicholas

      Garel-Jones, Tristan

      Bottomley, Peter

      Goodhart, Sir Philip

      Bottomley, Mrs Virginia

      Goodlad, Alastair

      Bowden, Gerald (Dulwich)

      Gorst, John

      Braine, Rt Hon Sir Bernard

      Gower, Sir Raymond

      Bright, Graham

      Greenway, Harry

      Brinton, Tim

      Gregory, Conal

      Brittan, Rt Hon Leon

      Griffiths, Peter (Portsm'th N)

      Brown, M. (Brigg & Cl'thpes)

      Ground, Patrick

      Browne, John

      Hamilton, Hon A. (Epsom)

      Bruinvels, Peter

      Hamilton, Neil (Tatton)

      Bryan, Sir Paul

      Hampson, Dr Keith

      Buchanan-Smith, Rt Hon A.

      Hargreaves, Kenneth

      Buck, Sir Antony

      Harris, David

      Budgen, Nick

      Hawkins, C. (High Peak)

      Bulmer, Esmond

      Hawkins, Sir Paul (N'folk SW)

      Burt, Alistair

      Hawksley, Warren

      Butterfill, John

      Hayes, J.

      Carlisle, Kenneth (Lincoln)

      Hayhoe, Rt Hon Barney

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

      Hayward, Robert

      Cash, William

      Heathcoat-Amory, David

      Chapman, Sydney

      Heddle, John

      Chope, Christopher

      Henderson, Barry

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

      Higgins, Rt Hon Terence L.

      Clark, Sir W. (Croydon S)

      Hind, Kenneth

      Clarke, Rt Hon K. (Rushcliffe)

      Hirst, Michael

      Colvin, Michael

      Holt, Richard

      Conway, Derek

      Howard, Michael

      Coombs, Simon

      Howell, Rt Hon D. (G'ldford)

      Cope, John

      Hubbard-Miles, Peter

      Cormack, Patrick

      Hunter, Andrew

      Corrie, John

      Jackson, Robert

      Couchman, James

      Jessel, Toby

      Cranborne, Viscount

      Johnson Smith, Sir Geoffrey

      Critchley, Julian

      Jones, Gwilym (Cardiff N)

      Crouch, David

      Jones, Robert (Herts W)

      Currie, Mrs Edwina

      Joseph, Rt Hon Sir Keith

      Dickens, Geoffrey

      Kellett-Bowman, Mrs Elaine

      Dicks, Terry

      Kershaw, Sir Anthony

      Douglas-Hamilton, Lord J.

      Key, Robert

      Dover, Den

      Knight, Greg (Derby N)

      Dunn, Robert

      Knight, Dame Jill (Edgbaston)

      Durant, Tony

      Knowles, Michael

      Edwards, Rt Hon N. (P'broke)

      Lang, Ian

      Eggar, Tim

      Latham, Michael

      72

      Lawler, Geoffrey

      Pollock, Alexander

      Lawrence, Ivan

      Porter, Barry

      Lee, John (Pendle)

      Portillo, Michael

      Leigh, Edward (Gainsbor'gh)

      Powell, William (Corby)

      Lester, Jim

      Powley, John

      Lewis, Sir Kenneth (Stamf'd)

      Prentice, Rt Hon Reg

      Lightbown, David

      Price, Sir David

      Lloyd, Ian (Havant)

      Proctor, K. Harvey

      Lloyd, Peter (Fareham)

      Raffan, Keith

      Lord, Michael

      Rathbone, Tim

      Luce, Rt Hon Richard

      Rhodes James, Robert

      Lyell, Nicholas

      Rhys Williams, Sir Brandon

      McCurley, Mrs Anna

      Ridley, Rt Hon Nicholas

      Macfarlane, Neil

      Ridsdale, Sir Julian

      MacKay, Andrew (Berkshire)

      Sackville, Hon Thomas

      MacKay, John (Argyll & Bute)

      Sainsbury, Hon Timothy

      McLoughlin, Patrick

      Sayeed, Jonathan

      McQuarrie, Albert

      Shaw, Giles (Pudsey)

      Major, John

      Shaw, Sir Michael (Scarb')

      Malins, Humfrey

      Sims, Roger

      Malone, Gerald

      Skeet, Sir Trevor

      Maples, John

      Smith, Tim (Beaconsfield)

      Marland, Paul

      Soames, Hon Nicholas

      Marlow, Antony

      Spicer, Michael (S Worcs)

      Marshall, Michael (Arundel)

      Squire, Robin

      Mates, Michael

      Stevens, Lewis (Nuneaton)

      Maxwell-Hyslop, Robin

      Stewart, Andrew (Sherwood)

      Merchant, Piers

      Taylor, Teddy (S'end E)

      Miller, Hal (B'grove)

      Thompson, Donald (Calder V)

      Mills, Iain (Meriden)

      Thompson, Patrick (N'ich N)

      Mills, Sir Peter (West Devon)

      Thorne, Neil (Ilford S)

      Miscampbell, Norman

      Thurnham, Peter

      Mitchell, David (Hants NW)

      Townend, John (Bridlington)

      Moate, Roger

      Twinn, Dr Ian

      Montgomery, Sir Fergus

      Viggers, Peter

      Moore, Rt Hon John

      Wakeham, Rt Hon John

      Morrison. Hon C. (Devizes)

      Walden, George

      Moynihan, Hon C.

      Walker, Bill (T'side N)

      Nelson, Anthony

      Waller, Gary

      Newton, Tony

      Watson, John

      Nicholls, Patrick

      Wells, Bowen (Hertford)

      Norris, Steven

      Whitney, Raymond

      Onslow, Cranley

      Wood, Timothy

      Ottaway, Richard

      Page, Richard (Herts SW)

      Tellers for the Noes:

      Pawsey, James

      Mr. Mark Lennox-Boyd and Mr. Francis Maude.

      Percival, Rt Hon Sir Ian

      Question accordingly negatived.

    New Clause 3

      APPLICATION OF HEALTH AND SAFETY LEGISLATION TO HEALTH AUTHORITIES
      1. — (1) For the purposes of the health and safety legislation:

      (a) a health authority shall not be regarded as the servant or agent of the Crown, or as enjoying any status, immunity or privilege of the Crown; and

      (b) premises used by a health authority shall not be regarded as property of or property held on behalf of the Crown.

      (2) The appropriate authority may by regulations provide who is to be treated as the user, occupier or owner of any such premises for any of those purposes; and
      (3) The powers to make regulations altered by subsection (2) above shall be exercisable by statutory instrument.
      (4) A statutory instrument containing regulations made in the exercise of the power conferred by that subsection shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.
      (5) Section 125 of the 1977 Act and section of the 1979 Act shall have no effect in relation to any action, liability, claim or demand arising out of the health and safety legislation.'.—[Dr. Marek.]
      Brought up, and read the First time.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 124, Noes 192.

      Division No. 212]

      [7.46 pm

      AYES

      Abse, Leo

      Hughes, Dr Mark (Durham)

      Adams, Allen (Paisley N)

      John, Brynmor

      Alton, David

      Jones, Barry (Alyn & Deeside)

      Ashley, Rt Hon Jack

      Kennedy, Charles

      Ashton, Joe

      Leadbitter, Ted

      Atkinson, N. (Tottenham)

      Leighton, Ronald

      Banks, Tony (Newham NW)

      Lewis, Ron (Carlisle)

      Barron, Kevin

      Lewis, Terence (Worsley)

      Beckett, Mrs Margaret

      Livsey, Richard

      Benn, Rt Hon Tony

      McCartney, Hugh

      Bidwell, Sydney

      Maclennan, Robert

      Blair, Anthony

      McWilliam, John

      Boothroyd, Miss Betty

      Madden, Max

      Boyes, Roland

      Marek, Dr John

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

      Maxton, John

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

      Maynard, Miss Joan

      Bruce, Malcolm

      Meacher, Michael

      Buchan, Norman

      Michie, William

      Caborn, Richard

      Mikardo, Ian

      Callaghan, Jim (Heyw'd & M)

      Millan, Rt Hon Bruce

      Campbell-Savours, Dale

      Miller, Dr M. S. (E Kilbride)

      Clark, Dr David (S Shields)

      Nellist, David

      Clarke, Thomas

      Oakes, Rt Hon Gordon

      Clay, Robert

      Park, George

      Clwyd, Mrs Ann

      Patchett, Terry

      Cohen, Harry

      Pendry, Tom

      Coleman, Donald

      Powell, Raymond (Ogmore)

      Cook, Frank (Stockton North)

      Radice, Giles

      Cook, Robin F. (Livingston)

      Raynsford, Nick

      Corbett, Robin

      Redmond, Martin

      Corbyn, Jeremy

      Richardson, Ms Jo

      Cox, Thomas (Tooting)

      Roberts, Ernest (Hackney N)

      Crowther, Stan

      Robertson, George

      Cunliffe, Lawrence

      Rogers, Allan

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

      Rooker, J. W.

      Deakins, Eric

      Shore, Rt Hon Peter

      Dixon, Donald

      Short, Ms Clare (Ladywood)

      Dobson, Frank

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

      Dormand, Jack

      Skinner, Dennis

      Douglas, Dick

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

      Dubs, Alfred

      Snape, Peter

      Eadie, Alex

      Soley, Clive

      Eastham, Ken

      Spearing, Nigel

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

      Stewart, Rt Hon D. (W Isles)

      Evans, John (St. Helens N)

      Stott, Roger

      Fatchett, Derek

      Strang, Gavin

      Faulds, Andrew

      Thomas, Dafydd (Merioneth)

      Field, Frank (Birkenhead)

      Thomas, Dr R. (Carmarthen)

      Fields, T. (L'pool Broad Gn)

      Thorne, Stan (Preston)

      Fisher, Mark

      Tinn, James

      Flannery, Martin

      Wainwright, R.

      Foot, Rt Hon Michael

      Wallace, James

      Forrester, John

      Wardell, Gareth (Gower)

      Foster, Derek

      Wareing, Robert

      Fraser, J. (Norwood)

      Weetch, Ken

      George, Bruce

      Welsh, Michael

      Gourlay, Harry

      Wigley, Dafydd

      Hamilton, James (M'well N)

      Williams, Rt Hon A.

      Hamilton, W. W. (Fife Central)

      Wilson, Gordon

      Hardy, Peter

      Winnick, David

      Heffer, Eric S.

      Hogg, N. (C'nauld & Kilsyth)

      Tellers for the Ayes:

      Howells, Geraint

      Mr. Frank Haynes and Mr. Ron Davies.

      Hoyle, Douglas

      NOES

      Alexander, Richard

      Batiste, Spencer

      Alison, Rt Hon Michael

      Beaumont-Dark, Anthony

      Amess, David

      Bellingham, Henry

      Arnold, Tom

      Bendall, Vivian

      Ashby, David

      Best, Keith

      Aspinwall, Jack

      Blackburn, John

      Atkins, Robert (South Ribble)

      Blaker, Rt Hon Sir Peter

      Atkinson, David (B'm'th E)

      Bonsor, Sir Nicholas

      Baker, Nicholas (Dorset N)

      Bottomley, Peter

      74

      Bottomley, Mrs Virginia

      Hunter, Andrew

      Bowden, Gerald (Dulwich)

      Jackson, Robert

      Braine, Rt Hon Sir Bernard

      Jessel, Toby

      Bright, Graham

      Jones, Gwilym (Cardiff N)

      Brinton, Tim

      Jones, Robert (Herts W)

      Brown, M. (Brigg & Cl'thpes)

      Joseph, Rt Hon Sir Keith

      Browne, John

      Kellett-Bowman, Mrs Elaine

      Bruinvels, Peter

      Key, Robert

      Buchanan-Smith, Rt Hon A.

      Knight, Greg (Derby N)

      Buck, Sir Antony

      Knowles, Michael

      Burt, Alistair

      Lang, Ian

      Butterfill, John

      Latham, Michael

      Carlisle, Kenneth (Lincoln)

      Lawler, Geoffrey

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

      Lawrence, Ivan

      Cash, William

      Leigh, Edward (Gainsbor'gh)

      Chapman, Sydney

      Lennox-Boyd, Hon Mark

      Chope, Christopher

      Lewis, Sir Kenneth (Stamf'd)

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

      Lightbown, David

      Clark, Sir W. (Croydon S)

      Lilley, Peter

      Colvin, Michael

      Lloyd, Ian (Havant)

      Conway, Derek

      Lloyd, Peter (Fareham)

      Coombs, Simon

      Lord, Michael

      Cope, John

      Luce, Rt Hon Richard

      Cormack, Patrick

      Lyell, Nicholas

      Corrie, John

      McCurley, Mrs Anna

      Couchman, James

      Macfarlane, Neil

      Cranborne, Viscount

      MacKay, Andrew (Berkshire)

      Critchley, Julian

      MacKay, John (Argyll & Bute)

      Crouch, David

      McLoughlin, Patrick

      Currie, Mrs Edwina

      McQuarrie, Albert

      Dickens, Geoffrey

      Major, John

      Dicks, Terry

      Malins, Humfrey

      Douglas-Hamilton, Lord J.

      Malone, Gerald

      Dover, Den

      Maples, John

      Durant, Tony

      Marland, Paul

      Edwards, Rt Hon N. (P'broke)

      Marlow, Antony

      Eggar, Tim

      Marshall, Michael (Arundel)

      Emery, Sir Peter

      Mates, Michael

      Evennett, David

      Maxwell-Hyslop, Robin

      Eyre, Sir Reginald

      Merchant, Piers

      Fairbairn, Nicholas

      Miller, Hal (B'grove)

      Fallon, Michael

      Mills, Iain (Meriden)

      Favell, Anthony

      Mills, Sir Peter (West Devon)

      Finsberg, Sir Geoffrey

      Miscampbell, Norman

      Fookes, Miss Janet

      Moate, Roger

      Forsyth, Michael (Stirling)

      Montgomery, Sir Fergus

      Forth, Eric

      Moore, Rt Hon John

      Fraser, Peter (Angus East)

      Moynihan, Hon C.

      Freeman, Roger

      Nelson, Anthony

      Gale, Roger

      Newton, Tony

      Gardiner, George (Reigate)

      Nicholls, Patrick

      Gardner, Sir Edward (Fylde)

      Norris, Steven

      Garel-Jones, Tristan

      Ottaway, Richard

      Goodhart, Sir Philip

      Page, Richard (Herts SW)

      Goodlad, Alastair

      Percival, Rt Hon Sir Ian

      Gorst, John

      Pollock, Alexander

      Gower, Sir Raymond

      Porter, Barry

      Greenway, Harry

      Powell, William (Corby)

      Gregory, Conal

      Powley, John

      Griffiths, Peter (Portsm'th N)

      Price, Sir David

      Ground, Patrick

      Proctor, K. Harvey

      Hamilton, Hon A. (Epsom)

      Raffan, Keith

      Hamilton, Neil (Tatton)

      Rathbone, Tim

      Hargreaves, Kenneth

      Rhodes James, Robert

      Harris, David

      Rhys Williams, Sir Brandon

      Hawkins, C. (High Peak)

      Ridsdale, Sir Julian

      Hawkins, Sir Paul (N'folk SW)

      Sackville, Hon Thomas

      Hawksley, Warren

      Sayeed, Jonathan

      Hayes, J.

      Shaw, Giles (Pudsey)

      Hayhoe, Rt Hon Barney

      Shaw, Sir Michael (Scarb')

      Hayward, Robert

      Silvester, Fred

      Heathcoat-Amory, David

      Sims, Roger

      Heddle, John

      Skeet, Sir Trevor

      Henderson, Barry

      Smith, Tim (Beaconsfield)

      Higgins, Rt Hon Terence L.

      Soames, Hon Nicholas

      Hind, Kenneth

      Spicer, Michael (S Worcs)

      Hirst, Michael

      Squire, Robin

      Holt, Richard

      Stevens, Lewis (Nuneaton)

      Howard, Michael

      Stewart, Andrew (Sherwood)

      Hubbard-Miles, Peter

      Taylor, Teddy (S'end E)

      75

      Thompson, Donald (Calder V)

      Waller, Gary

      Thompson, Patrick (N'ich N)

      Watson, John

      Thorne, Neil (Ilford S)

      Wells, Bowen (Hertford)

      Thurnham, Peter

      Whitney, Raymond

      Townend, John (Bridlington)

      Wood, Timothy

      Twinn, Dr Ian

      Vaughan, Sir Gerard

      Tellers for the Noes:

      Viggers, Peter

      Mr. Tim Sainsbury and Mr. Francis Maude.

      Wakeham, Rt Hon John

      Question accordingly negatived.

    New Clause 4

      ADJUDICATING PANEL
      '(1) Any determinations made under Section 3 may be referred to an adjudicating panel of independent members appointed by the Secretary of State by regulation for a period of five years by any affected person within four weeks of the determination being made and published.
      (2) The adjudicating panel will consider the reasonableness of the determination and may refer any determination hack to the determining authority for further consideration.'.—[Dr. Marek.]
      Brought up, and read the First time.
      Dr. Marek: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to discuss the following amendments: No. 46, in clause 3, page 6, line 16, leave out subsection (2).
      No. 49, in page 6, line 20, leave out subsection (3).
      Dr. Marek: The new clause is important. It would not be so important if we had a normal Government, but we do not have a normal Government. They have been prepared to act unreasonably many times. That is illustrated by the many occasions on which the former Secretary of State for Transport was hauled before the courts for acting unreasonably.
      The Opposition believe that the Bill gives far too many wide powers to the Secretary of State for Social Services. especially in determining the remuneration for persons providing general medical services. The Bill enables the Secretary of State, if he has any new information, to reconsider a determination and, on the basis of that new information, to reopen the negotiations and try to claw back some money.
      That was done recently with the opticians. I shall deal with that case at some length because it went to the Queen's Bench division of the High Court of Justice and the Secretary of State lost the appeal against the opticians. He did so for several reasons. The judgment is interesting. From it, we understand why clause 3 has been drafted as it has. The judge used certain arguments when finding against the Secretary of State. All those arguments are provided for in the Bill. Should there be another court case, a judge would not be able to deploy them.
      Amendments Nos. 46 and 49 relate to the deletion of clause 3(2) and 3(3). To some extent, they are probing amendments. Amendment No. 46 would leave out clause 3(2), which provides:
      "An earlier determination is to be taken to have been unsatisfactory only if, had it fallen to the authority to make it at the time of the later determination. the authority would have made it on the basis of different information."
      The subsection can be interpreted very widely. Information does not have to be replaced. Different
      76
      information could be more information. In such circumstances, the Secretary of State could argue that one year has passed since fixing the price for spectacle lenses, dentures or surgical appliances, that he has extra information, and that he will reopen the procedure.
      The Minister will say that we have perfectly good working arrangements between contracting services and the DHSS and that we ought to give them a chance. He will argue that we should let bygones be bygones and that the Government will not try to recover the unintended profits from opticians. He will argue that, if only the House trusts him, everything will be all right.
      8 pm
      I shall not say that such a statement would be dishonest, but we are legislating for more than the next year or two years. A Minister in a future Government might contend that he has certain powers and would not read the present Minister's assurances. Besides, one Administration cannot hind a successor. The Minister might then use the wide power in clause 3(2) to reopen a determination on the basis of perhaps a very small difference in information.
      New clause 4 and amendment No. 46 would stop such action and ensure that, once a determination has been made, it will be left alone. It is important for the contracting professions, such as dentists, pharmacists and opticians, to know where they stand. We still have the problem of future determinations recovering money on different products or services. That is what happened with the so-called unintended profits made by opticians.
      The Secretary of State has declared that he would recover the money that opticians made from supplying discounted glasses on eyesight tests. He intended to recover the money from every optician practising at the time, although some might have entered the service only after the profits had been made. That is hardly a moral line and it was much resented by the profession. I am pleased that the Minister has accepted the judgment in the Queen's Bench division and said that he will not try to recover those profits under this Bill if he is empowered as is suggested.
      The Secretary of State was quite prepared, however, to take discriminatory action against a class of contractor. It is important to be able to restrain the Minister so that he cannot do anything that he likes.
      Amendment No. 49 would leave out clause 3(3), which provides:
      "If an amount falls to be deducted by virtue of subsection (1)(a) above, the determining authority, in fixing amounts of remuneration for persons to whom the determination relates, may have regard to the period within which they first provided services of the description to which it relates."
      The Opposition do not necessarily oppose the subsection, but we strongly oppose the word "may". The matter was not discussed properly in Committee. "May" should be replaced by "shall". If the Minister is persuaded by our arguments, I hope that he will ensure that such an amendment is made in another place.
      We should have "shall" for equity's sake. There should be a system in the DHSS which enables us to track down who provided a service, who entered the profession and who retired. When negotiations are closed and a determination is made, that should be the end of the matter. We should not be empowering the Minister to reopen any determination which he sees fit to reopen on the basis of almost any excuse.
      New clause 4 is a way out of the dilemma. It proposes:

      77
      "(1) Any determination made under Section 3 may be referred to an adjudicating panel of independent members appointed by the Secretary of State by regulation for a period of five years by any affected person within four weeks of the determination being made and published."
      If the Minister has, perhaps unfairly, determined that the amounts payable should be X plus Y, the contracting parties would have some recourse to an independent adjudicating panel.
      New clause 4(2) proposes:
      "The adjudicating panel will consider the reasonableness of the determination and may refer any determination back to the determining authority for further consideration.".
      The intention is not that the adjudicating panel should judge the determination and go through the lengthy process involved. It is possible that a Minister might be leant on by the Treasury or the Prime Minister to save as much money as possible and he might therefore calculate the figures unreasonably and impose his determination against the will of the contracting parties. The new clause provides some safeguards against such action by a Minister.
      I would not normally propose such a new clause, because Ministers usually act reasonably and try to serve the public. The present Government, however, are noted for being comprised of Ministers who make decisions that are found to be beyond their power or incorrect. The Secretary of State for Transport is one; the Secretary of State for Social Services is another, his board and lodging payments regulations having been found to be illegal and not properly drafted.
      I shall deal with the case of The Queen v. Secretary of State for Social Services—application for judicial review —in the High Court of Justice, Queen's Bench division. It is important for the House to know exactly why the judgment went against the Secretary of State. The judgment starts:
      "The question to be answered in these cases is essentially the same. Namely whether or not the Secretary of State for Social Services can recover sums which he calls 'unintended profits' which he says he has paid to ophthalmic opticians in England and Wales in the years from 1978 to 1985."
      The Minister. not the opticians, called them "unintended profits". As I understand it, they arose because opticians were granted certain sums for spectacles, and, because of competition in the market, certain discounts were given to opticians, who then pocketed them.
      The Department was sadly at fault in not perceiving that that had been going on for about four years. It should have been on the ball and said, "Last year you made the extra profits from discounts. We shall change that." Eventually the DHSS woke up to the fact. Its sampling system is at fault, from the usual trouble of not having sufficient manpower to police the determinations and the agreements. Therefore, it does not have a good statistical basis on which to place its determinations. If the Government had spent more money and employed more people, this would probably not have arisen. Amendment No. 46 would not allow the Minister to reopen determinations on the basis that different information had been supplied. If that had been the case, there would have been pressure on the Secretary of State to ensure that, when a determination was made, it was made properly. It would not then need to be reopened.
      The judgment continues:
      "However the issue is described that is the real nature of these cases. There are two separate cases because two
      78
      representative bodies have made their own applications. But the cases dovetail and interlock to such an extent that I consider them as one.
      I say at once, since I do not believe in suspense, that the applicants succeed in their arguments before me, and thus the Secretary of State may not in my judgment recover the relevant sums."
      It would have been nice to see a sentence in the Bill saying that the Department would not recover any sums by primary legislation at this stage. I know that the Minister gave that assurance in Committee —[Interruption.] This is primary legislation.
      The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): That would have been an extremely odd sentence to insert in the Bill.
      Dr. Marek: It could have been inserted through a clause similar to clause 1(8), which states:
      "This section shall have no effect in relation to anything done or omitted before its commencement."
      A similar sentence at the end of this part would have laid to rest a great deal of the apprehension within the profession. The opticians' and dentists' bodies read Hansard, but I wonder whether every optician reads Hansard as assiduously as Ministers and hon. Members and the bodies representing the professions. If that had been inserted, it would have shown the Government's intention to be fair as opposed to their apparent intention to get away with spending as little as possible.
      The judge continues:
      "The amount involved is said to he over £14 million of which the Secretary of State assessed that he might recover over £ 11 million in the course of the next two years should his proposed arrangements for recovery be held to be lawful.
      It should however be noted at the outset that the applicants have never accepted that the sums involved are properly described as 'unintended profits'; and (in the case of the Federation of Optical Corporate Bodies) Sir Ian Percival points out that the Secretary of State is unable to identify specifically any sums which may have accrued to his corporate clients and relies upon an 'imputed' figure of £3·5 million as their share in the total sum in question."
      8.15 pm
      That speaks for itself: the Minister could not identify any sums specifically. Hon. Members will note that powers are given to the Minister in clause 3. Subsection (5) makes the distinction when it states:
      "If the later determination is of remuneration for a category of services falling within one of the descriptions of services mentioned in section 43A(1) of the 1977 Act or section 28A(1) of the 1978 Act, it is immaterial whether the earlier determination was of remuneration for the same category of services or for any other category of services falling within the same description."
      That makes it clear that it does not matter which category of services it is. The Minister has wide powers to go from one category to another and to make later determinations for different categories from those of the earlier determinations.
      The judge talks about members of the Bar appearing before him, and, in his judgment, continues:
      "In the same context Mr. Bagnall points out that while his clients did achieve substantial discounts in their buying of spectacles in the relevant years this was perfectly well known to the DHSS from 1978 onwards, and palpably clear from 1982 (see the PAC documents). And … full deployment of the history would show that such discounts were necessary for survival in many cases because of the DHSS decision to withold very large sums (up to £92 million at one time) which were legally due to the opticians. The residuary £6 million of that retained sum was only accepted as repayable recently. So

      79
      that again the applicants say that the overall history would not justify any criticism of the opticians nor any conclusion that they had become unjustly enriched in any way."
      The tenor of the judge's statement is that the Minister is not acting reasonably or morally, and that he is not considering dispassionately the reasons why the position arose. It suddenly came to his attention.
      Earlier I said that I did not believe that the DHSS knew what was going on, but the judge states that it did If the DHSS knew what was going on but did nothing, that is worse than if it had not known. The judgment shows that the Minister was acting unreasonably and was prepared to go to the courts to recover the money, without allowing any discussion as to whether the so-called "unintended profits" were unintended. He simply assumed that they were unintended profits, penalised the opticians, and said, "I shall recover this money. What is more, I shall recover it for another service and from everybody, not just from those who benefited from these unintended profits." How much more immoral can one get than that?
      The judge continues:
      "It should be noted that the fixing of the fees and payments by successive determinations is unilateral, in the sense that no agreement or arbitration is provided for by the Act or the Regulations."
      It is clear that the judge was not happy about this, and any dispassionate person aiming to judge the case on its merits would regard this as fair.
      The judge goes on to say:
      "The Secretary of State is (as Mr. Carnwath put it)"—
      I take it that he is another barrister—
      "determining rates on which he is willing to do business with practitioners and he lays down the fees and charges. Mr. Carnwath added that the Secretary of State says in his Statements, 'These are the terms on which I think it is reasonable to seek these facilities'.
      Actual payments for services by the relevant Committee are subject to specific rules as to over payments made in error or in circumstances where it was not due … Within certain constraints therefore the Secretary of State acts in his discretion. But it can at once be seen that the rates can be altered at any time by a fresh determination, so that the correction of any imbalance is wholly in the hands of the Secretary of State."
      I emphasise that last sentence, because it is crucial to the way that the Bill has been drafted. It says:
      "But it can be seen at once that the rates can be altered at any time by a fresh determination, so that the correction of any imbalance is wholly in the hands of the Secretary of State."
      The judge pulled up the Secretary of State, and that is why these powers are included in clause 3. They give the Secretary of State back his untrammelled powers. Everything will be in his hands so that he can make different determinations, or whatever. The new clause and the two amendments seek to restrict the Secretary of State's powers a little by not allowing him this unbridled freedom to do what he wishes.
      The Federation of Manufacturing Opticians rejected an alternative argument that included these words:
      "While it is, of course, the case that the sums contained in the Statement are those which we have negotiated with you, there is nowhere in the Statement or in the Terms and Conditions of Service of opticians any prohibition, explicit or implicit, on their obtaining more favourable terms if they are able to do so."
      If that is the case, the way that the determinations are made should be looked at. It looks as if some hole or gap is available into which wording could be put to tighten up
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      The regulations under which determinations are made. That means not that the answer should be that the Minister should be given these powers, but that he should go away and look at the regulations and the way in which he fixes the determinations between the contracting parties to make sure that those unintended profits are not made.
      The judge continues:
      "From 1978 onwards it is said that because of discounts available to opticians and (as it seems to me) because of reduced costs in lenses and in manufacture, the Statement payments in respect of appliances have allowed opticians to recover more than the Secretary of State intended, since his intention was that payments should be 'neutral'."
      The Secretary of State's intentions may have been that the payments should be neutral, but he did not set up the body, the determination, the apparatus, the consultations and the committees to ensure that these payments should be neutral. He now proposes that we give him blanket powers to go back two, three, or even five years and say that the payments were not neutral and that he would recover the difference.
      I am not arguing—and my hon. Friends will agree with me—that the Opposition should support whatever the contracting parties to the NHS should be doing.
      Mr. Whitney: Progress.
      Dr. Marek: This is an important argument. If the contracting parties were unsure of their future and did not know what the Secretary of State would do about the determinations that had been made years before, that must affect the quality of service that the NHS enjoys from these contracting parties.
      I do not want contracting parties to be overpaid or underpaid; I want them to have just the right amount. Any legislation could ensure that. I am glad that the Minister nods. I am sure that both sides of the House would agree with that. The argument is about how we get this. The right way to go about it is not to allow the Minister powers arbitrarily to change the determination at a later time.
      The judge goes on:
      "Back in 1977 'prescription houses' advertised their services at Statement rates…but after that year the DHSS concluded that unintended profits were being made. Some 'realignment of statement rates' was done as from April 1982 and on other occasions, but according to the DHSS this did not produce the intended result. So for 1985 the present assessed figure is the disputed £14 million."
      Was there any bungling or any incompetence in the DHSS in not being able to assess the figure accurately? This has been going on since 1977. The judge says:
      "Some 'realignment at statement rates' was done, but according to the DHSS this did not produce the intended result."
      Are we doing the right thing in passing this primary legislation? Should we be looking instead at what goes on inside DHSS offices at the Elephant and Castle to make sure that the procedures are carried out efficiently, that there are enough staff to undertake the procedures and that the procedures are accurate once they have been carried out? It would have been better if the Minister had looked at the matter from that point of view, instead of taking the easy way out and saying that, as the Government have a majority, it does not matter what they put in the Bill. There might be 15 Tory Members rebelling on Monday night, a different 15 rebelling on Tuesday and yet a different 15 on Wednesday, but it will not matter because of the Government's majority.
      Mr. Roland Boyes: How many rebel on Thursdays?
      Dr. Marek: They often rebel.
      I suspect that that may have been in the Secretary of State's mind when this legislation was introduced. He might have said, "Let us not think too hard about it. This gives us all the powers that we need and certainly all the powers that we thought we had before the judgment. Our life would be made easier if that happened." That may be the case, but our society would not then be as fair as it would be if the Secretary of State went about it another way and looked at his own procedures and organisation within the DHSS.
      The judge says:
      "It is to be noted that the Statement figure still comes solely from the Secretary of State who obtains his information from the suppliers and not from the opticians. So that the opticians are in no way responsible for what the Secretary of State says has happened."
      The argument gets worse and worse. The price fixing was with the suppliers, not the opticians, as hon. Members will note.
      The judge is not sure about the next point. He says:
      "Furthermore, assuming that more has been paid than was 'intended', the Secretary of State accepts that there is 'no legal basis for imposing the recovery of unintended profits; recovery can only be achieved by agreement' (see DHSS Memorandum of 1st February 1982, page 71 of the Westhead bundle). This theme is often repeated in the answers given to the Committee of Public Accounts. For example, see page 75 of the Westhead bundle:
      'Sir Kenneth Stowe … In considering the future settlements within the relevant Whitley machinery of their remuneration we certainly will want to have regard to the fact that they did get this additional sum of money.
      The Chairman. But you have no power in that respect?
      Sir Kenneth Stowe. We have no power; that will be for negotiation."'
      We must have some semblance of negotiation and agreement if agreement is to be reached. However, earlier there was a statement saying that when the final determination is made —perhaps the Minister will be able to reply on this——
      "it can at once be seen that the rates can be altered at any time by a fresh determination, so that the correction of any imbalance is wholly in the hands of the Secretary of State."
      The way in which the negotiations take place gives the appearance of agreement. When the Department is behaving properly and is not under the influence of the Treasury, the Prime Minister, or monetarist economic policy, the negotiations leading to determination work well.
      The amendments are tabled to cover the case when the Minister is under pressure from outside forces and when the Minister has to attend to economic policies more than we should want. The Minister's first priority should be to achieve the best possible National Health Service.
      8.30 pm
      The judge says:
      "I refer to these samples front the evidence since in my judgment there is no practical or moral blame which can be imputed to the opticians, since they played no part in fixing the rates nor did they ever conceal anything or seek more than was volunteered to them."
      I suspect that the fault is with the Ministry and the DHSS rather than with the opticians.
      The judge says later:
      "First, it does seem to me that this case is not much affected by questions of onus. The applicants are attacking the Secretary of State's determination and Statement. So that
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      to that extent they seek a remedy and would in most cases hear the burden of proving their case. On the other hand., the Secretary of State is admittedly and wholly openly seeking to recover moneys from the opticians, and he cannot do so unless he acts lawfully."
      Later the judge says:
      "Secondly it is right, as Mr. Bagnall says, that there is an element of retrospection in what the Secretary of State seeks, although the 1984 legislation is not strictly retrospective. And also the direct result of the Secretary of State's action is to take back from the opticians' profession moneys to which they had plain and directly unassailable legal rights.
      Unless therefore the Secretary of State has a plain and clear right to act as he seeks to act he should not be allowed to proceed. As a general principle that proposition seems to me to be correct."
      It is symptomatic that the Secretary of State seems to think that he has powers to act arbitrarily without considering the merits of the case. This judgment told the Secretary of State that he could not do that. That is why clause 3 is phrased as it is. And that is why amendments Nos. 46 and 49 and new clause 4 were tabled. They attempt to restrict the Secretary of State's power.
      The judge goes on:
      "Thirdly I am urged to say that the Secretary of State's action is an expropriation or levy or tax, and that special coniderations thus apply. But these words are somewhat emotive and this part of the applicants' argument is not in my judgment of great significance."
      The judge has accused the Secretary of State of using an element of retrospection in what he seeks to achieve. Can we allow legislation to permit so much freedom to the Secretary of State, especially with the experience in the case to which I have referred.?
      The judge says that the Secretary of State's action is an expropriation of tax. If that were made known in the press everybody would be appalled. I can imagine what would be said if the Oppositon Front Bench advocated a policy which allowed a Secretary of State to expropriate such funds. I can imagine what capital Conservatives would make out of that.
      I hope that the House will consider seriously what is happening. The judge continues:
      "I have already said that in seeking recovery there must be justification for the course taken, and I do not believe that the questions to be answered are helped by comparing the position with that which rules in special fields such as tax, any more than it can or should be decided on a basis of overall fairness … Without the help of the 1984 legislation in my judgment there would be no sensible argument for the Secretary of State to advance. Under Regulation 10 of the 1984 Regulations he could simply determine the fees payable and the payments to be made for the relevant services for the future."
      It is just as well that we have that legislation, because without it the Minister would have got away with this immoral act of expropriation and retrospection. The judge continues:
      "I do not understand Mr. Carnwath to be strongly arguing that without the 1984 Act the Secretary of State could have acted as he did, although I am aware that he did not concede that this was so.
      What then is the position as to the 1984 Act? Section 7 adds two Sections respectively to the legislation which governs England and Wales and that which governs Scotland. These Sections are intended to provide (says Mr. Carnwath) a general code for setting fees and remuneration for the professions in the National Health Service, since at present the code provided by current legislation is sketchy.
      I am not entitled to enquire why such amendments were necessary or desirable, and I therefore simply consider them as they are.
      First I stress that only subsection (4) of Section 7 is at present in force. That subsection provides that 'any

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      determination…which was made—

      (b) after (the passing of this Act) but before the coming into force of a provision inserted by this section

      shall be deemed to be validly made if regulations authorising such a determination could have been made had that provision been in force at the time'."
      Clause 3 seeks to revert to the previous position so that the Minister would have the power to have a new determination. The provision is couched in slightly different words because there would have to be different information but it is not beyond the wit of any Minister to dig up new information and to claim that the information was different and that therefore he has the power to reopen the determination.
      Perhaps I am being too cynical. If that is so, I expect the Minister to show us the colour of his money. He should take on board what I have said and offer to introduce another clause in another place.
      The judge goes on:
      "All agree that the subsection (and indeed other parts of the Section) are obscure. But I have to attempt to see through that obscurity."
      Mr. Jeremy Corbyn: Read the whole judgment.
      Dr. Marek: I would but that would take a long time. I shall continue. The judge says:
      "Looking at section 7(3)(7)(a) I am however wholly unconvinced that it allows the Secretary of State to recover these moneys."
      He does not use the words "on the balance of probabilities, taking one argument with another I believe that the Secretary of State is allowed to recover these moneys." He says that he is "wholly unconvinced" and that there is no case for the Secretary of State trying to recover such moneys. The reasons he gave were:
      "First, I read the subsection simply and solely as an explicit statement that past expenses may be taken into account after taking discounts into account in making a determination for the future. Secondly the subsection allows future trends expressly to be considered. Thirdly the subsection eliminates an argument that some who would not have incurred or will not incur specific expenses are outside the ambit of the determination. These matters are spelt out for the assistance of all concerned.
      But in my judgment there is a distinction between 'taking into account' what has happened in the past with a view to fixing rates for the future and thus achieving a fair rate for the future, as compared with recovering sums which the Secretary of State believes to have been 'over-reimbursed'."
      The judge is an eminently respectable, responsible and honest person. I think that he was speaking as an average citizen. The crux of the argument lies in the words:
      "In my judgment there is a distinction between 'taking into account' what has happened in the past with a view to fixing rates for the future and thus achieving a fair rate for the future, as compared with recovering sums which the Secretary of State believes to have been 'over-reimbursed'."
      If a determination is made, it should not be reopened. Powers should not be given to the Minister to reopen the determinations once they have been made, on the pretext of different information. If the Minister has made a mistake he should go voluntarily to the contracting parties and say, "There is a mistake. You are sensible people. Can we agree on a scale of payment in future?" I am quite sure that the contracting parties would agree to that, if he approached them. He should also say to them, "We have made a mistake. I have no intention —in fact, I have no powers— to reopen the determination and cause many
      84
      problems for people who may have retired and perhaps new entrants into the profession who, therefore, were not affected by the determination." The Minister should say, "The determination has been made. We must do something about it in future. Let us talk and see whether future determinations cannot be dealt with more appropriately." That was the judge's view. That sensible view is shared by myself and my hon. Friends. The judge went on to say:
      "Even if I am wrong as to this, and even if the subsection does in terms allow recovery in certain circumstances I am however also convinced that the Secretary of State meets a further insurmountable hurdle.
      Section 7(3)(a) allows him to take into account the prescribed matters 'in connection with the provision of services of a kind to which the determination will relate'.
      The applicants submit that in this context this cannot possibly allow reduction of sight testing and dispensing fees since the relevant expenses which are being considered simply do not relate to the sight testing and dispensing activities of opticians at all.
      In my judgment the supply of appliances is not the provision of services 'of a kind' to which the determination of fees for sight testing and dispensing relate. Broadly the provision of general optical services describes the services provided by opticians, but those services are in my judgment of three kinds, namely sight testing, dispensing, and the supply of appliances."
      Later, he said:
      "Logically this should also in my judgment be correct since it would surely be unjust to a practitioner dealing solely in sight testing and/or dispensing to recover from him any part of moneys accrued to others in respect of 'unintended profits' gained from the supply of spectacles."
      Subsection (5) of clause 3 states:
      "If the later determination is of remuneration for a category of services falling within one of the descriptions of services mentioned in section 43A(1) of the 1977 Act or section 28A(1) of the 1978 Act, it is immaterial whether the earlier determination was of remuneration for the same category of services or for any other category of services falling within the same description."
      That is another vivid illustration of the Minister trying to have his bread with butter and jam on both sides. He was found wanting by the judge. He was found wanting in terms of ordinary, commonsense action. In a slightly wrapped-up way. he tried to restore his untrammelled powers of freedom that he thought he had and which he was quite prepared to use in acting quite unfairly and immorally. The judge said:
      "To some extent this injustice is sought to be alleviated by the provision of a full £8·60 by way of determination of sight testing fees for such practitioners as test sight only. But in my judgment the need for such a distinction highlights the fallacy in the Secretary of State's argument in this respect."
      The judge made an important point at the end of his judgment.
      "In my judgment there is here an identifiable illegality (in the sense of that word as used by Lord Diplock at p 410 in the case of CCSU v. Minister for Civil Service, 1985, AC p 374) in that the Secretary of State has not acted within his lawful powers in the process of deciding what is the fair determination of fees for sight testing and dispensing. This should in my judgment be subject to control and correction by judicial review and by the imposition of such a declaration as may resolve the problem in this case."
      8.45 pm
      The judge wants the proper judicial review and control. The Bill does not provide any control whatsoever. It allows the Minister to do what he wants. The intention of new clause 4, amendment No. 46 and amendment No. 49 is to impose some control over the Minister. The judge said:

      85
      "I am comforted in my conclusions in this case by a conviction that this result is just, since the opticians played no direct part in fixing the payments for appliances over the relevant years, and if there was fault or failure in the assessment of those payments it was the fault or failure of the DHSS and thus the Secretary of State."
      I have referred to other aspects of the procedures within the DHSS which could be at fault and which I suspect were at fault. The Secretary of State takes responsibility for this sorry affair, but it is quite wrong of him to try to get over it by producing a Bill as he has. The judge continued:
      "I do however stress that I impute no bad motive to the Department and furthermore there has been no sort of concealment of the full nature of the decision-making process. This has given the applicants the ammunition with which to make their case."
      I am pleased that the judge wrote that. It makes me think that the Department was good-natured but incompetent. It was incompetent either because it did not have the manpower to do the sampling and go through the procedures to be able to provide the Minister with the necessary information that certain things were happening, or it did not know about it. The judge seems to think that the Department did know about it but that it failed to carry out efficient administration. In some ways, that is worse than if the Department did not know. I hope that, if that is the case, the Minister will put it right and ensure that the new systems of determination are adequately manned so that they are dealt with in a correct and efficient manner. The judge said:
      "It seems to me also just that the loss (if there truly is one) should lie where it falls, upon the shoulders of the taxpayer,"—
      we have the Minister to thank for that—
      "since otherwise it could well be that a substantial number of opticians or firms which did not benefit from the payments made between 1978 and 1985 might have to meet a share of the recoupment sought by the Secretary of State. If even a few had to pay such sums it would in my judgment be unjust and unfair."
      The words which I judge to he important are:
      "even if a few had to pay such sums it would in my judgment be unjust and unfair."
      Yet the Minister was not only prepared to ensure that a few people paid such sums in such an unfair way but he was prepared to countenance many people paying such sums. Those are the reasons why the two amendments and the new clause have been put down. There is here a clear case showing that one cannot trust Ministers, at every time and in every circumstance, to behave properly. Ministers must try to act fairly and justly. The Minister, for his own reasons, intended to recover money quite unfairly and quite unjustly. An element of retrospectivity was involved. It could even be called expropriation. The Minister was prepared to do that. The judge stopped him.
      Now we have clause 3 which, in a different way, would restore these powers to the Minister. Is the House prepared to let the Minister get away with that so that he can act at will? I hope that the House will not allow him to do so. I hope that the Minister, as a reasonable man, will see some sense and say, "Yes, I shall have these powers, but I do not intend to use them unreasonably. I am prepared to think about putting a provision in the Bill—even if I cannot accept the new clause and the amendments—to show everyone that I cannot use these powers at will." Those important points should be borne in mind. I hope that the Minister will see the sense of them.
      Mr. Whitney: Mr. Deputy Speaker——
      Mr. Campbell-Savours: The Minister had fallen asleep.
      Mr. Whitney: I was looking forward to further contributions from a number of supporters of the hon. Member for Wrexham (Dr. Marek), and I am surprised that they did not meet with favour. It was odd that during the 40 or so minutes during which the hon. Member for Wrexham spoke—
      Mr. Corbyn: Fifty-five minutes.
      Mr. Whitney: It seemed longer. It was odd that during the 55 minutes of the speech I managed to find one sentence with which the Government would be happy to agree —on the need to strike the right balance and be fair to the contracting professions and to the users of the NHS. The hon. Member for Wrexham seemed to have no concept of the fact that we are talking about taxpayers' money. We are talking about ensuring that that money, which is devoted in ever greater quantities by the Government—since 1979 an increase in real terms of 24 per cent. — to the benefit of the NHS, is used for the benefit of the Health Service and its customers. The hon. Gentleman seems instead to have enlisted on the side of the contracting professions and to have no interest in the proper use of Health Service funds.
      We are committed to a fair deal for the contracting professions in the Health Service, and our record shows that. As the hon. Member for Wrexham said, following the 1978 inquiry the Government paid opticians £92 million. I should have thought that it would be difficult to find a more tangible demonstration of the Government's good faith.
      The hon. Member for Wrexham inevitably had to recognise that we agreed not to use any new provisions to take into account the opticians' £11 million of what we would call "unintended" profits. The Government's record in determining that that remuneration is on a fair basis has been amply demonstrated. If we went down the road suggested by the hon. Member for Wrexham— no retrospection, and with only one determination being made—there would be a determination after a number of years, which would be retrospective. I cannot believe that the contracting professions would welcome that; nor would it be given a sensible welcome by most hon. Members. We seek a balance between the Governments conflicting duties — most sensible Governments would recognise that— to find a fair deal for the contractors and to find a fair deal for the NHS.
      There was no mention of figures, but there was a newfound beneficence to private entrepreneurs. Of course, that is to be welcomed. It was suggested that the Opposition were opening up yet another bottomless pit of public funding, whether for the NHS or for elsewhere. Presumably we would have to add a little bit more to the £24 billion — to which the proposals of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) add up—for the half-undertakings offered by the hon. Member for Wrexham.
      The new clause would acid an unnecessary load of bureaucracy to the remuneration system of the contracting professions. There is a strong likelihood that, in practice, there will always be some contractor who does not favour a determination of remuneration for his profession. Therefore, it is likely that every determination would go to a panel as proposed in the new clause.
      There is already an independent element in the consideration of remuneration for general medical and

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      dental practitioners, which is provided by the Doctors and Dentists Review Body. There is also the Pharmacists Review Panel, which is available to advise on disagreements arising from negotiations on the pricing of the pharmacist's contract. I remind the House that the Government are fully committed to full negotiations and consultations with the contractor professions' representatives, as appropriate. Sooner or later, such a panel would undermine that negotiation process. For example, the Government and a particular profession might reach agreement on a determination, but an individual contractor might then refer it to the panel and, in turn, the panel might ask the Government to reconsider. What would the Government and the professions' representatives then do? The ensuing uncertainty would be in the interests of no one.
      I submit that such a check on the determining authority's decision is clearly unnecessary. Although the remuneration systems of the contract professions are similar in principle, there are significant differences in their operation. This requires, in some cases, an element of flexibility and discretion, which is in the interests of the professions and of the taxpayer. That flexibility is the essence of the arrangements, which on the whole have worked well, and it seems to have escaped the hon. Member for Wrexham.
      Amendment No. 46 would remove an important qualifying condition that must be satisfied when previous over or underpayments are corrected in a subsequent payment. The condition reflects the fact that initial payments are based on estimates. The actual figures become available later. This subsection means that corrections can be made only if later information reveals that the earlier estimates, and therefore the earlier payments, were incorrect. The parties may only behave as they would have behaved if later information had been available in the first place. In other words, only the numbers can be changed; the rules of the game cannot be. The removal of this subsection would take away an important safeguard and would appear to confer precisely those arbitrary powers that were feared by hon. Members in our Committee debates.
      The same effect would be true of the proposals contained in amendment No. 49. It would remove another important qualifying condition when payments are being adjusted. The subsection gives the Secretary of State— the determining authority—power to take into account the position of new entrants to the service when payments are adjusted to take account of an overpayment in a previous year. This obviously means that remuneration will be lower than it would otherwise have been. This is perfectly fair and reasonable if the people who suffer the deduction have previously enjoyed the benefit of the overpayment. It may not be fair to those people who have joined the service so recently that they did not enjoy the benefit of the overpayment. If the inequity would be of any substance, the Secretary of State might want to make appropriate differential adjustments. This is an important safeguard which it would be most unwise to lose.
      On the basis that the hon. Gentleman has failed to make out his case, to understand the system and the need to strike a balance, and to appreciate the need to ensure that the increasing amounts of taxpayers' money that are
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      being devoted to the National Health Service are used properly and responsibly, I invite the House to reject the new clause and the amendments.
      9 pm
      Mr. Campbell-Savours: This matter has been brought to the attention of many hon. Members during the last few years. I have received correspondence from local contractors who have expressed concern about the way in which they feel that the Government are imposing their views upon them. If the Minister were to ask his departmental officials to find it, he would be told that correspondence has been received from me which puts their case and sets out to establish some rights on their behalf.
      We examined this matter in the Public Accounts Committee during the 1984–85 parliamentary Session. The PAC's 23rd report is entitled "NHS Supplies and Pharmaceutical Price Regulations Scheme, Department of Health and Social Security." I draw to your attention, Mr. Deputy Speaker, the case put by the Pharmaceutical Services Negotiating Committee in a document marked "PAC 88". It contains correspondence of 25 February 1985 from Mr. A. J. Smith. the chief executive, who was writing on behalf of the PSNC. He said that the intention of writing was to set out a brief memorandum that he was copying to the National Audit Office. To some extent, the PAC shadows the National Audit Office, because under the National Audit Act 1983 the Comptroller and Auditor General is now an officer of the House of Commons. Correspondence was sent to him setting out the position.
      In his letter of 25 February 1985 Mr. Smith said:
      "You will see from the attached NHS remuneration balance sheets that the accrued underpayment on 31st December 1983 amounted to £24·36 million. This was corrected, to a certain extent, during the period ending 31st December 1984 but, even at this stage, there remained £11·95 million underpaid to retail pharmacists."
      We are referring, therefore, not to a small amount of money, but to a substantial amount of money that was in contention and about which there has been argument between the Department and the contractors. My hon. Friend the Member for Wrexham (Dr. Marek) has dealt in great detail with the matter, in particular with the legal judgments that were delivered on another but related matter.
      The letter continued:
      "The forecast balance sheet for the period 1st January 1985 to 31st March 1985 shows a worsening situation with a forecast accrued underpayment, at 31 March 1985, amounting to £16·84 million."
      That shows that the contractors were faced with an accelerating and developing problem. Mr. Smith continued:
      "In the forecast balance sheet for the period 1st April 1985 to 31st March 1986, you will see that the forecast accrued underpayment by 31st March 1986 will amount to £45·9 million."
      Again that was an escalating, increasing figure and it was obviously a matter of great concern to the contractors. The letter continued:
      "We have, however, concluded an agreement with the Department which will increase 1985/86 remuneration to absorb the whole underpayment and leave a nil balance at 31 March 1986. When I wrote to the right hon. Robert Sheldon on 20th August 1984 I pointed out that on the publication of the Twenty-Ninth report there were certain unfortunate and sensational press comments alleging 'rich pickings" "—
      —that is a very interesting term"—

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      "for retail pharmacists by over-reimbursement of drug costs. No mention was made in the Report of the payment owed by the Department to pharmacists because of under-reimbursement of labour and overhead costs."
      To what extent did the Government set out to ensure that the truth was known? Did the Department contact the press to put the record straight? Was a press release issued by the Department following this report about rich pickings? Was such a press release circulated to ensure that journalists were made aware of the more accurate picture of remuneration to pharmacists?
      When a group of contractors who depend on the Department feel defamed, surely the Department has a responsibility to ensure that the pharmacists' reputation is fully protected. Perhaps the Minister would like to intervene to clarify the position, because I am sure that the contractors would wish to feel assured in case similar developments occur in future. They would like to know that they would be protected, because we have no information about what happened in the past.
      Mr. Smith went on to say:
      "With the current method of Inquiry, there is an inevitable gap between the date of Inquiry and the finalisation and agreement of the Inquiry results, and it is during this period that over and under-reimbursement occurs. It should be noted that in the Minutes of Evidence—"
      —that is the minutes of evidence of the Public Accounts Committee—
      "dated Monday 20th February 1984, it is recorded that 'adjustments have in the past been made to compensate professions for underpayments, at least as often as they have been made to recover payments on behalf of the tax-payer'. I hope that the Public Accounts Committee will include in its deliberations and reports their concern at the magnitude of the underpayments to chemist contractors during recent years and confirm their support for the proposals by both the Department of Health and Social Security and the Pharmaceutical Services Negotiating Committee that annual negotiations are essential so that large imbalances between amounts due and paid in any year do not occur in future. In passing I should mention that one of the major reasons for the current imbalance is the Department's insistence on using Treasury norms for inflation rate forecasts when all the statistical evidence shows that the costs of providing the pharmaceutical service (particularly labour costs) are increasing to a higher rate."
      Mr. Smith went on to talk about "Good business acumen." I am sure that that phrase commends itself well to the Government because they repeatedly tell us that they are committed to defending the interests of small businesses, the enterprise culture and the entrepreneurial society. Mr. Smith said:
      "Good business acumen and excellent pharmaceutical wholesaler service have enabled pharmacists to achieve great savings in drug costs (currently of the order of 6 per cent.). The whole of this deduction is 'clawed-back' by the Department and currently saves £80 million per annum of tax-payer's money and the cumulative savings, so far, amount to in excess of £300 million for the years 1980–84."
      In the words of Mr. A. J. Smith, the chief executive, we have an example of good business acumen and excellent pharmaceutical wholesaler service rewarding the taxpayer with again a windfall of £300 million for the years 1980 to 1984.
      Mr. Smith went on to say:
      "I am sure you will readily understand the Committee's concern that these efforts of retail pharmacists to reduce drug costs are then referred to as 'rich pickings' in the interim period between the base of the Inquiry and the finalisation and agreement of the Inquiry findings resulting in the clawback. The ongoing savings to the National Health Service are immense and require an equal degree of exposure to public scrutiny."
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      In his letter Mr. Smith is looking to the Department to ensure that this exposure takes place. I hope that the Minister will take this opportunity to assure the House that in every way every opportunity was used by the Department to ensure that they description "rich pickings'', which was attributed to the pharmaceutical contractors, was corrected in favour of what Mr. Smith believes to be the substantial contribution that pharmaceutical contractors have made and the need to illustrate that in press releases and material from his Department.
      Mr. Smith said:
      "The ongoing savings to the National Health Service are immense and require an equal degree of exposure to public scrutiny. Fairness to both tax-payer and the pharmacist can he achieved by the introduction of a system of continuous monitoring of discounts obtained to which again I would hope that the Public Accounts Committee would lend its support. Business efficiency of pharmacist contractors should be recognised by a proportion of these savings being passed on to the pharmacy contractors"—
      basically, what is being said is, "If we save the taxpayer money we are equally entitled to get a share of that money"—
      "whereas under the present system"—
      this is referring to the system operated in 1985 by the DHSS—
      "the savings in drug costs accrue in totality to the Department of Health and Social Security."
      In a written answer on 7 February the then Minister of State said that the Bill was designed
      "to re-establish beyond doubt the Government's ability, challenged in court proceedings last autumn, to ensure that the remuneration and reimbursement arrangements for all NHS family practitioner services professional contractors are fair to the contractors themselves and to the taxpayer by allowing past overpayments or underpayments to be reflected in future recs."— [Official Report, 7 February 1986; Vol. 911, c. 289–90.]
      I think that my hon. Friend was referring -unfortunately, after the meeting of the Public Accounts Committee today and dinner this evening I came in to hear only the latter part of my hon. Friend's glittering speech, which we all found so riveting and interesting—to the court challenge referred to in the judgment of 16 October 1985.
      Dr. Marek indicated assent.
      Mr. Campbell-Savours: Clearly the contractors are not altogether satisfied, and my hon. Friend, in the new clause, is trying to introduce some adjudicating authority to arbitrate between what I might call—I am sure that my hon. Friend will correct me if I am wrong—the warring factions. There is certainly a warring Minister, in the sense that he is out to get them. That appears to me to be the intention behind the Government's position.
      I hope that the Minister has taken on board the comments of Mr. A. J. Smith. I am sure that in writing to the Public Accounts Committee he felt that his words would be listened to, and they certainly were. Similarly, I hope that they were dealt with by the Government.
      Mr. Maxton: I congratulate my hon. Friends the Members for Wrexham (Dr. Marek) and for Workington (Mr. Campbell-Savours) on their speeches. One of the Government Whips sitting opposite says, "Shortly" I think that he is implying that I should make a short speech. I have every intention of doing so, but the more that I am provoked the longer it is likely to get.
      The Bill covers England and Wales and, I hasten to add, Scotland. I am speaking from the Dispatch Box

      91
      because I am the Labour party's spokesman on health matters in Scotland. The Labour party has taken some interest in the NHS and in the Bill but the Scottish Office Minister with responsibility for health has taken no interest whatsoever. He did not reply to the Second Reading debate, nor serve on the Committee. He was here for about half an hour earlier this evening and it does not appear that he will reply to any debate, although he may just manage to come in to propose one small amendment about dairy companies later in our proceedings. I can assure him that it will be very much later on.
      9.15 pm
      Which is the determining authority for the prices paid to contractors in the NHS? Given the way in which the DHSS has dragged along the Scottish Office, it is fairly clear that the determining authority will be the DHSS, yet the people who supply services in Scotland are contracted to the Scottish Office. They will almost certainly not be exempt from any attempt to reclaim money. In Scotland the contracting employer will not be determining fees or whether some or all excess profits should be reclaimed.
      That is an anomalous position. Labour Members—more than Conservative Members, though I am delighted to see that the hon. Member for Stirling (Mr. Forsyth) is present—believe that the sooner that we have a system of devolved government for Scotland that allows us to take our own decisions on these matters, the better it will be.
      The Minister made great play of saving taxpayers' money and being fair to contractors. I note that the one part of the triangle that he did not mention was the patient. We are all keen to ensure that the Government do not overpay or underpay contractors, but it is hard for us to hear the Government say that they are concerned for the patient when we see what has happened on prescription charges, dental charges and the optical and ophthalmic services.
      Equally, it comes hard to me, as the hon. Member for a Glasgow constituency, to hear the Minister talking about a 26 per cent. real terms increase in expenditure on the NHS when I know that the general manager of the Greater Glasgow health board has just made proposals to cut £20 million off the health services. Only three quarters of an hour ago there was a damning indictment in a television programme about the expenditure of that board in Lennox Castle hospital. The Minister should not talk to any Glasgow Member about the NHS receiving more money. There have been massive cuts.
      Mr. Michael Forsyth: Will the hon. Gentleman confirm that the Greater Glasgow health board is the best-funded health board in the country, receiving £420 per head?
      Mr. Deputy Speaker: Order. I hope that the hon. Member for Glasgow, Cathcart (Mr. Maxton) will resist the temptation to move away from the new clause.
      Mr. Maxton: I should love to indulge——
      Mr. Campbell-Savours: Is my hon. Friend aware that the hon. Member for Stirling (Mr. Forsyth) has huge private health contracts? Yes, they are declared in the Register of Members' Interests, but they are vast contracts and it is suggested that a series of them with one
      92
      organisation are worth £80,000 per annum. If that is inaccurate, perhaps the hon. Member for Stirling will deny it in the Chamber.
      Mr. Forsyth: That is rubbish.
      Mr. Deputy Speaker: Order. We must get back to the subject of the debate.
      Mr. Maxton: I shall be brief. Of course I knew that. I am well aware of it. Indeed, the Government are vindictive about the Greater Glasgow health board because, despite the fact that it has a Conservative majority, it flatly refuses to privatise any services.
      The Government have imposed massive charges on the patient, or user, of those services. Incidentally, I and no doubt many of my hon. Friends have reservations about the whole contractor system within the NHS. In future, we may well want to consider whether that is the best way of ensuring that such services are provided within the NHS. I should like to see much greater direct control of them by NHS management without any contracting out. But the Government believe in the contractor system. They, more than any other Government, have taken us down that road. It seems strange that a Government who want more privatisation and more use of contractors in the NHS can then apparently turn themselves on their heads and create a situation that is unfair within that very system. We argue not that the contractors are always right, and certainly not that the contractor system is the right way of operating, but that, given the system, it must be fair to all those who provide the service.
      Under the Bill, the Government can determine a price to be paid to the contractor and in, say, eight years' time can decide that the profits were higher than reasonable. The Government can then reclaim those profits. The problem with that is that they will not always be reclaiming those profits from the contractor who provided the service.
      When the idea was first mooted, chemist shopowners in my constituency wrote to me saying that when they bought their shops 18 months ago they also bought the goodwill. However, they did not buy the fact that under the terms set down by this Government, the last owner was paid what the Government considered to be excess profits. The Government are now apparently asking them to repay the money. There is nothing in the Bill to prevent that, and it is unfair.
      The price is fixed, with the sole reservation that regard may be had to the number of years involved, and the Minister could say that what was charged was excessive, and that the Government would take back the money. The new clause is very reasonable. We say only that there should be negotiations. The Government should work out, in negotiation with the contractors, exactly what the price should be. Having determined that, they should stick to it. Of course, underpayments and overpayments may be made, but that may be taken into account in later negotiations. If we have an adjudicating body, the price should be right when that decision is taken. That is the point at which it should be done—not at a future date, on a retrospective basis, hitting people who may not have made any money from the deal. It is a grossly unfair clause and we must have a system that is properly negotiated.
      The Minister said that negotiations took place. If so, why not build that into legislation? Many sections in Acts

      93
      state that negotiation should take place, and a similar provision should be included in the Bill. There is no reason why that should not happen.
      If the Minister now said that the Government, in another place, would include a provision to allow for negotiation between themselves and the professional bodies, and for an adjudicating body to deal with the decision between them, we should be happy to withdraw our new clause. The Minister made great play of the fact that negotiating machinery existed, so why does he not include it in the legislation? Obviously, the Minister does not intend to respond, and so I urge my hon. Friends to vote for the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 68, Noes 180.

      Division No. 213]

      [9.27 pm

      AYES

      Adams, Allen (Paisley N)

      Hogg, N. (C'nauld & Kilsyth)

      Alton, David

      Howells, Geraint

      Atkinson, N. (Tottenham)

      Hoyle, Douglas

      Banks, Tony (Newham NW)

      Jones, Barry (Alyn & Deeside)

      Beckett, Mrs Margaret

      Kennedy, Charles

      Boyes, Roland

      Lamond, James

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

      Lewis, Terence (Worsley)

      Bruce, Malcolm

      Livsey, Richard

      Caborn, Richard

      McGuire, Michael

      Callaghan, Jim (Heyw'd & M)

      McNamara, Kevin

      Campbell-Savours, Dale

      McWilliam, John

      Clay, Robert

      Madden, Max

      Clwyd, Mrs Ann

      Marek, Dr John

      Cohen, Harry

      Maxton, John

      Cook, Robin F. (Livingston)

      Meadowcroft, Michael

      Corbyn, Jeremy

      Michie, William

      Cox, Thomas (Tooting)

      Millan, Rt Hon Bruce

      Craigen, J. M.

      Patchett, Terry

      Crowther, Stan

      Pike, Peter

      Cunliffe, Lawrence

      Powell, Raymond (Ogmore)

      Davies, Ronald (Caerphilly)

      Raynsford, Nick

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

      Robertson, George

      Dixon, Donald

      Short, Ms Clare (Ladywood)

      Dobson, Frank

      Skinner, Dennis

      Dormand, Jack

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

      Dubs, Alfred

      Soley, Clive

      Eadie, Alex

      Spearing, Nigel

      Eastham, Ken

      Stott, Roger

      Evans, John (St. Helens N)

      Thompson, J. (Wansbeck)

      Fatchett, Derek

      Thorne, Stan (Preston)

      Field, Frank (Birkenhead)

      Wallace, James

      Fisher, Mark

      Wilson. Gordon

      Foster, Derek

      Garrett, W. E.

      Tellers for the Ayes:

      Hardy, Peter

      Mr. James Hamilton and Mr. Frank Haynes.

      Heffer, Eric S.

      NOES

      Alexander, Richard

      Bowden, Gerald (Dulwich)

      Amess, David

      Braine, Rt Hon Sir Bernard

      Arnold, Tom

      Bright, Graham

      Ashby, David

      Brinton, Tim

      Aspinwall, Jack

      Brooke, Hon Peter

      Atkins, Robert (South Ribble)

      Brown, M. (Brigg & Cl'thpes)

      Baker, Nicholas (Dorset N)

      Browne, John

      Batiste, Spencer

      Bruinvels, Peter

      Beaumont-Dark, Anthony

      Budgen, Nick

      Bellingham, Henry

      Burt, Alistair

      Bendall, Vivian

      Butterfill, John

      Benyon, William

      Carlisle, Kenneth (Lincoln)

      Biggs-Davison, Sir John

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

      Blackburn, John

      Cash, William

      Blaker, Rt Hon Sir Peter

      Chapman, Sydney

      Bonsor, Sir Nicholas

      Chope, Christopher

      Bottomley, Peter

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

      Bottomley, Mrs Virginia

      Colvin, Michael

      94

      Conway, Derek

      Lyell, Nicholas

      Coombs, Simon

      McCurley, Mrs Anna

      Cope, John

      Macfarlane, Neil

      Cormack, Patrick

      MacKay, Andrew (Berkshire)

      Corrie, John

      MacKay, John (Argyll & Bute)

      Couchman, James

      McLoughlin, Patrick

      Cranborne, Viscount

      McQuarrie, Albert

      Crouch, David

      Malins, Humfrey

      Currie, Mrs Edwina

      Malone, Gerald

      Dickens, Geoffrey

      Maples, John

      Dicks, Terry

      Marland, Paul

      Douglas-Hamilton, Lord J.

      Marlow, Antony

      Dover, Den

      Marshall, Michael (Arundel)

      Dunn, Robert

      Maude, Hon Francis

      Eggar, Tim

      Maxwell-Hyslop, Robin

      Emery, Sir Peter

      Mayhew, Sir Patrick

      Evennett, David

      Merchant, Piers

      Eyre, Sir Reginald

      Miller, Hal (B'grove)

      Fairbairn, Nicholas

      Mills, Iain (Meriden)

      Fallon, Michael

      Miscampbell, Norman

      Favell, Anthony

      Moate, Roger

      Finsberg, Sir Geoffrey

      Moore, Rt Hon John

      Fookes, Miss Janet

      Moynihan, Hon C.

      Forsyth, Michael (Stirling)

      Mudd, David

      Forth, Eric

      Nelson, Anthony

      Franks, Cecil

      Norris, Steven

      Fraser, Peter (Angus East)

      Onslow, Cranley

      Freeman, Roger

      Ottaway, Richard

      Gale, Roger

      Page, Richard (Herts SW)

      Galley, Roy

      Pawsey, James

      Gardiner, George (Reigate)

      Peacock, Mrs Elizabeth

      Gorst, John

      Percival, Rt Hon Sir Ian

      Gower, Sir Raymond

      Pollock, Alexander

      Greenway, Harry

      Porter, Barry

      Gregory, Conal

      Portillo, Michael

      Griffiths, Peter (Portsm'th N)

      Powell, William (Corby)

      Ground, Patrick

      Powley, John

      Hamilton, Neil (Tatton)

      Price, Sir David

      Hampson, Dr Keith

      Proctor, K. Harvey

      Hargreaves, Kenneth

      Raffan, Keith

      Harris, David

      Rathbone, Tim

      Hawkins, C. (High Peak)

      Renton, Tim

      Hawkins, Sir Paul (N'folk SW)

      Rhodes James, Robert

      Hawksley, Warren

      Rhys Williams, Sir Brandon

      Hayes, J.

      Ridsdale, Sir Julian

      Hayhoe, Rt Hon Barney

      Sackville, Hon Thomas

      Hayward, Robert

      Sainsbury, Hon Timothy

      Heathcoat-Amory, David

      Sayeed, Jonathan

      Heddle, John

      Shaw, Giles (Pudsey)

      Henderson, Barry

      Shaw, Sir Michael (Scarb')

      Hicks, Robert

      Silvester, Fred

      Hind, Kenneth

      Sims, Roger

      Hirst, Michael

      Skeet, Sir Trevor

      Howard, Michael

      Smith, Tim (Beaconsfield)

      Howarth, Gerald (Cannock)

      Soames, Hon Nicholas

      Hubbard-Miles, Peter

      Spicer, Michael (S Worcs)

      Hunter, Andrew

      Squire, Robin

      Jackson, Robert

      Stewart, Andrew (Sherwood)

      Jones, Gwilym (Cardiff N)

      Thompson, Donald (Calder V)

      Kellett-Bowman, Mrs Elaine

      Thompson, Patrick (N'ich N)

      Key, Robert

      Thorne, Neil (Ilford S)

      Knight, Greg (Derby N)

      Thurnham, Peter

      Knight, Dame Jill (Edgbaston)

      Townend, John (Bridlington)

      Knowles, Michael

      Twinn, Dr Ian

      Knox, David

      Waller, Gary

      Lang, Ian

      Watson, John

      Latham, Michael

      Wells, Bowen (Hertford)

      Lawler, Geoffrey

      Whitney, Raymond

      Lawrence, Ivan

      Wood, Timothy

      Leigh, Edward (Gainsbor'gh)

      Yeo, Tim

      Lennox-Boyd, Hon Mark

      Lester, Jim

      Tellers for the Noes:

      Lilley, Peter

      Mr. Tony Durant and Mr. Peter Lloyd.

      Lord, Michael

      Question accordingly negatived.

    Clause 1

      APPLICATION OF FOOD LEGISLATION TO HEALTH AUTHORITIES AND HEALTH SERVICE PREMISES
      Dr. Marek: I beg to move amendment No. 2, in page 1, line 9, after 'authority', insert
      'or provided by a health authority for the use by health authority staff for residential or other purposes'.
      Mr. Deputy Speaker: With this we may take amendment No. 3, in page 1, line 12, after 'the', insert 'user.'.
      Dr. Marek: We are uncertain how clause 1 will be interpreted. At the moment, subsection (1)(b) reads:
      "premises used by a health authority shall not be regarded as property of or property held on behalf of the Crown."
      It is not entirely clear whether a nurses' home is property used by a health authority. It is used by health authority staff. I shall not read out the press stories which appeared under headlines such as:
      "Cockroach photographs stun health conference."
      "Unsavoury hospital kitchens bring calls for an end to legal immunity."
      "Disease carrying pests are taking over hospitals, report says."
      "Dirty hospitals to lose immunity."
      "Hospital food poisoning report tells of appalling conditions."
      According to the British Pest Control Association, the problem has been increasing. The Government have recognised that something must be done and have proposed legislation which will ensure that hospital kitchens and some other places used by health authorities will be subject to food legislation. If food is wheeled along dirty corridors, the food, although not the corridors, will be covered by food legislation. Other buildings owned by the health authority, or perhaps rented by the health authority, will not necessarily be covered by food legislation. It is clear that nurses' homes and places where doctors might live will also be subject to food legislation. I hope that the Minister will be able to accept the amendment.
      Amendment No. 3 would alter clause 1 to make it read:
      "The appropriate authority may by regulations — (a) provide who is to be treated as the user, occupier or owner of any such premises for any of those purposes".
      I hope that the amendment is helpful. Some premises may be not occupied but owned by an authority or somebody else and used by the authority. That is why we think that the word "user" may help.
      Nurses' homes are important, and food legislation should undoubtedly apply to them. We are sorry that the Government did not accept that food legislation and health and safety at work legislation should apply to them. Unfortunately, that question has been disposed of previously. It should be absolutely clear that food legislation should apply to such places.
      9.45 pm
      Mr. Hayhoe: Perhaps I can help the House by saying that the words in clause 1(1)(b)
      "premises used by a health authority"
      cover all the NHS estate and, therefore, include residential premises and premises described by the amendment as:
      "provided by a health authority for the use by health authority staff for residential or other purposes."
      I am legally advised that the words in the amendment are absolutely covered by those in the Bill.
      96
      Regarding amendment No.3, under the food legislation, which it is proposed should be applied to health authorities—that is what lifting Crown immunity will do —requirements are placed on owners and occupiers of premises, not on users. Therefore, it is neither appropriate nor necessary for the user to be designated in any regulations made under clause 1(2)(b).
      Those points properly raised by the hon. Member for Wrexham (Dr. Marek) are already covered by the words in the Bill as it stands, so there is no need for the amendments. If they are pressed, I urge the House to reject them.
      Mr. Chris Smith: I am grateful for the Minister's comments, because I was worried on reading the Bill and considering the amendments.
      Obviously, I bow to the Minister's superior legal advice. Nevertheless, I am extremely anxious that it must be crystal clear that all premises in the ownership and control of any health authority are covered by these measures. The wording had seemed to be ambiguous and. I am grateful to the Minister for removing that ambiguity. I trust that what he said will apply when it comes to interpretation by the courts.
      I urge my hon. Friend the Member for Wrexham (Dr. Marek) to seek to catch your eye again, Mr. Speaker, not simply to accept the Minister's comments, but to say that he will not press amendment No. 3. Although I have great respect for my hon. Friend, I have been worried about that amendment. It seems to give a considerable amount of discretion to the head of the appropriate authority in defining use and user, which was precisely the sort of discretion that the entire measure was designed to remove by ensuring that health and safety regulations apply to premises owned by health authorities.
      There is a possibility that a loophole might be created if amendment No. 3 were to be pursued. However, I trust that, in the light of what the Minister said, that will not be the case and we can be absolutely certain that premises owned by a health authority and used for whatever purpose and by whoever, will be covered by the regulations established. We must be clear on that point, and I hope that that will happen. The impression that I have had from what the Minister has said—I shall read his words carefully in Hansard tomorrow — that the clarity is there and we can be certain of it.
      Mr. Campbell-Savours: I cannot understand why we have had to wait so long for such a clear statement of intent. Over the past month, there have repeatedly been articles in newspapers and trade union journals setting out the great concern among the membership of trade unions. [Interruption.]Does the hon. Member for Gillingham (Mr. Couchman) wish to intervene? If he does not, perhaps he will contain his pleasure or wrath.
      People have been misled, or the Minister is still being ambiguous. I am sponsored by the Confederation of Health Service Employees. I receive no money from the union. Although I am sponsored, all the money is paid to my constituency party and used for serving the community by funding surgeries and an office to which people come with their problems. I retain neither expenses nor any remuneration.
      A few weeks ago, in the journal of the Confederation of Health Service Employees, a headline said:
      "Minister's pledge on immunity was a sham."

      97
      Is this article correct? I would be grateful for the Minister's attention. I hope that he will listen to what I am saying when I make a statement on behalf of the union. I shall read him an article and ask him whether he has anything to qualify what is said. It says:
      "Hospital buildings look set to stay on the health and safety danger list despite the Government's pledge to lift crown immunity. A new National Health Service Bill which is supposed to put promises into action will have no effect, a COHSE study revealed. The Bill applies only to hospital kitchens and even then, Ministers would be left with full power to decide what parts of the law will apply in future. Worse still, fire prevention laws, the Health and Safety at Work Act and the Housing and Rent Acts will not apply to the NHS. COHSE general secretary David Williams described the Government's promise to act as a sham. It had been forced to make a concession because of trade union and public pressure, especially after the deaths at Stanley Royal Hospital, but was hoping no to drop its commitments. It looks,' he said, as though the Government want to do the minimum work possible. This still leaves hospitals above the law. David Williams said, 'If crown immunity cannot be justified for hospital food preparation, it cannot be justified for health and safety regulations. It makes little sense to remove the threat of food poisoning but leave patients and staff at risk from deadly dangerous substances like asbestos.' He then pledged COHSE would continue its campaign to persuade the Government to lift crown status in its entirety from health authorities."
      From what the Minister is saying, I understand that we and the union have misunderstood the Government's intention. Does my hon. Friend the Member for Wrexham (Dr. Marek) agree with my interpretation of what has been said? I should like the Minister to put the record straight. I shall be referring his comments back to COHSE. I am sure that if the Minister makes it clear and unambiguous, in a way that would be helpful and comprehensible to Health Service workers, the journal would be eager to publish his comments to set the record straight.
      Mr. Chris Smith: The Minister referred to the entire NHS estate. Does my hon. Friend agree that that means anything owned by a health authority?
      Mr. Campbell-Savours: That is why my hon. Friend the Member for Wrexham (Dr. Marek), sounded aghast when he replied to the Minister. The Minister made an important statement tonight, although I am sure that these matters were dealt with at length in Committee, where the Minister must have been pressed at length.
      Dr. Marek: t am slightly perplexed at what the Minister said. The possibilities are enormous. A health authority might hire or rent premises or have a mortgage. Will such premises be part of the NHS estate? I do not have a legal training so I am not sure. If the point must be made there can be no harm in accepting our proposition.
      Mr. Campbell-Savours: I presume that the Minister was referring to premises for which the NHS has a responsibility in law, whether the property be freehold, on lease or rented. I assume that the provision is all-embracing and an undertaking to Health Service workers and to the House. The Minister, if he is clear in his response to the article, will achieve much.
      Dr. Marek: I do not think that premises for which the NHS or a health authority is responsible are necessarily part of the Health Service estate. I find it difficult to rationalise what the Minister says and what my hon. Friend says.
      Mr. Campbell-Savours: My hon. Friend has a subtle understanding of such matters and if anyone in the House
      98
      were able to differentiate between the various facets of this argument my hon. Friend would be able to do so. I expect a similar subtlety and understanding from the Minister. I am sure that the Minister will wish to confirm that there is a distinction. I thought that he argued that there was no need to distinguish. The matter is all-embracing.
      Mr. Peter Pike: If the Bill is passed, it is its provisions that will be the law, not what the Minister says. The Minister spoke with clarity tonight, but his remarks are at variance with the Bill. If the Government think that our suggested words are not appropriate they should attempt to clarify the provision formally, as the Minister did.
      Mr. Campbell-Savours: The Minister referred to having the best legal advice. I therefore presume that the Minister's statement meets fully every concern expressed by my hon. Friend the Member for Burnley (Mr. Pike). The Minister would not have given such a firm commitment at the Dispatch Box without having taken the best legal advice because otherwise he would be ridiculed. The Minister would not want that.
      In the best sense of comradeship I ask the Minister, please, to reply to the article and to nail anything that he believes to he inaccurate so that Health Service employees are made fully aware of the Government's intentions.
      10 pm
      Mr. Harry Cohen: The debate might be regarded, in a sense, as having been a little pedantic. The Minister said that all premises within a health authority's control should be covered by the Bill. There is great—
      It being Ten o'clock, the debate stood adjourned.

    Business of the House
    Ordered,
    That, at this day's sitting, the National Health Service (Amendment) Bill,the Motions relating to Procedure and the Ways and Means Motions in the name of Mr. Chancellor of the Exchequer may be proceeded with, though opposed, until any hour.—[Mr. Lennox-Boyd.]

    Business of the House

      National Health Service (Amendment) Bill
      Question again proposed, That the amendment be made.
      Mr. Cohen: There is concern that there could be ambiguity in the Bill. That is the reason why my hon. Friend the Member for Wrexham (Dr. Marek) put down an amendment. He sought to remove any ambiguity and to ensure that all health authority premises are properly covered under the legislation. It is important that there is no ambiguity. There are examples of the courts interpreting a measure in a way peculiar to themselves. The whole idea of the Bill is to ensure that health authorities cannot get away with having premises that are in such a bad condition that patients and staff are put at considerable risk.
      My hon. Friend the Member for Wrexham referred to press reports about the abolition of Crown immunity and the necessity to ensure that premises are cleaned properly. My hon. Friend referred to an article entitled:
      "Disease-carrying pests are 'taking over' hospitals, report. says".
      When I looked at the papers I had prepared for the debate., I found that I had that most interesting article in front of me. It stated:

      99
      "Cockroaches, rats, mice and other disease-carrying pests are 'taking over' hospitals and putting patients' health and lives at risk, the British Pest Control Association said yesterday."
      That was in September last year. The association made the case for more spending on pest control.
      Mr. Corbyn: Is my hon. Friend aware that in a number of borough council areas, where rate-capping has been imposed, there has been a restriction on the number of pest control officers who can be employed by the relevant local authority? If such restrictions continue, there will be a risk to health, because the inspectors will not be available to find out where the pests are.
      Mr. Cohen: That is a good point. That is one of the effects of the rate-capping penalties on local authorities. Great pressure has been placed on environmental health officers, who do an excellent job in my constituency. Local authorities are under great pressure because they are being squeezed by the Government's cuts. Very little money is spent on direct pest control. Despite the enormous problems, according to the British Pest Control Association, only £800,000 is spent on pest control. That must be regarded as inadequate.
      In the same article, attention was drawn to a survey of 360 nurses conducted by Nursing Mirror last summer. That showed that 88 per cent. of the nurses surveyed had seen cockroaches in their hospitals, 53 per cent. had seen rats or dead mice, and 51 per cent. considered their hospital unclean. That is an atrocious comment on health authority premises and hospitals by those who work in them.
      Mr. Nicholas Soames: Does the hon. Gentleman agree that it is an appalling indictment of those who work in those kitchens that they allow them to be so disgraceful?
      Mr. Cohen: I shall come to the reasons why conditions have worsened. The Government have had to be dragged screaming in to introduce provisions to remove Crown immunity. They came forward with this legislation only after the Stanley Royd disaster.
      Mr. Corbyn: Is my hon. Friend aware that many NHS employees are angry about the cheap way in which many Conservative Members have treated the outcome of the Stanley Royd report? The problems in many hospitals have nothing to do with the workers employed in them but everything to do with expenditure cuts and inadequate management in the NHS. I know from personal experience that on many occasions catering workers in hospitals have pointed out the dangers to health caused by inadequate control and Crown immunity with respect to hospital kitchens. Does my hon. Friend agree that the Government should address themselves to the need for the strictest control on all pests in hospitals and for an examination of management structures to ensure that patients and workers do not suffer from or are not held responsible for the existence of pests in hospitals?
      Mr. Cohen: That is an excellent point and a direct answer to the intervention by the hon. Member for Crawley (Mr. Soames). I thought at one stage that my hon. Friend the Member for Islington, North (Mr. Corbyn) was trying to steal the rest of my speech, but I think that I shall get by.
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      I was referring to the survey of nurses who had seen the grossly unsatisfactory conditions in their hospitals as a danger to them and their patients. That is why it is vital to remove any ambiguity in the Bill, and why the amendment is right.
      There has been an important victory in the wake of the Stanley Royd disaster and the pressure by my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley), who introduced a Bill to remove Crown immunity. The Government have responded to the pressure.
      Mr. Bob Clay: Have they?
      Mr. Cohen: That is right. The purpose of the amendment is to ensure that they keep to their word.
      It is a matter not just of removing Crown immunity but of providing resources to increase standards of cleanliness in hospitals. Wholesale privatisation of cleansing and catering services in the NHS is making conditions worse. Less cleaning is being done and standards have been lowered because of privatisation.
      Dr. Marek: My hon. Friend has made a valid point. Even if the amendment does not succeed and the Minister is right about there being no doubt and nurses' homes being subject to food legislation, substantial extra expenditure will be needed. No doubt my hon. Friend the Member for Leyton (Mr. Cohen) has read the preamble, which, under the heading "Financial Effect", states:
      "Clause 1 has no implications for public expenditure."
      I cannot understand how the Government can square that with lifting Crown immunity, albeit only with respect to food legislation.
      Mr. Cohen: My hon. Friend has,as always, made a telling point.
      To remove Crown immunity would be only a token. If an individual or union takes a health authority to court and the health authority has to pay damages, those damages will have to be paid for out of its existing budget. That can only mean cuts in the health services that are provided. The Government are blind if they believe that there will be no expenditure implications. The hospitals will remain dirty and in a bad condition unless the Government provide health authorities with resources to get on with the job.
      My hon. Friend was right when he said that it is a question not only of resources but of management in the health authorities. The introduction of business-style management has led to chaos in recent weeks. I have spoken to local trade unions about conditions in my local hospital. They are very worried about the standard of management. More and more assistant managers are being appointed, at high salaries, but those who have to provide the catering in hospitals and keep them clean are suffering immensely from the cuts in the number of hours that they work and in the number of jobs. The result is that their morale is very low and that standards have deteriorated.
      As for the implications of the Health and Safety at Work etc. Act 1974, NUPE has already condemned the Bill's provisions as not going anywhere near far enough. It says that the removal of Crown immunity should be extended to premises covered by the Health and Safety at Work etc. Act and that sufficient resources should be

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      made available to the National Health Service to meet the new burdens that have been imposed by the 1974 Act and by the laws relating to food hygiene.
      NUPE makes the telling point that in the past the Government have always expected health authorities to provide resources for health and safety from within their existing budgets and that no extra resources have been provided to help the NHS to meet its obligations under the Health and Safety at Work etc. Act. That must be wrong. If this Bill is to mean anything, we must remove any ambiguity in the wording and ensure that it covers all premises. The Government must accept the resource implications and provide money for the health authorities so that they can get on with the job and ensure that all health authority premises, in the interests of both patients and staff, are completely clean.
      Mrs. Clwyd: My hon. Friend the Member for Wrexham (Dr. Marek) asked the Minister about the financial effects of lifting Crown immunity. It cannot be true that clause 1 has no public expenditure implications. If the Minister is serious about what he said, there are expenditure implications for the Health and Safety Executive. If the health and safety inspectors are to investigate the conditions in hospitals and other National Health Service premises, there must be an increase in the staff of the Health and Safety Inspectorate.
      When we debated the Gas Bill we found that there were financial implications because the required increase in the number of Health and Safety Inspectorate staff. Earlier I made the point that since 1979, when the Government came to power, there has been a 15 per cent. decrease in the Health and Safety Inspectorate. Over the same period its staff has fallen by 13 per cent. The gas privatisation Bill alone will place a considerable extra strain on the depleted staff of the Health and Safety Executive, and now the executive is to be given additional burdens. We agree with those burdens being placed on the executive, but they have implications for public spending, because in order to meet its commitments the inspectorate must have extra inspectors.
      10.15 pm
      It is interesting to look at the issue of Crown notices, because the statistics that are available show the reluctance of the inspectors to issue Crown notices without legal backing. In 1978 no Crown improvement notices were issued, and only three Crown prohibition notices were issued. In 1979, 12 Crown improvement notices and four Crown prohibition notices were issued. In 1980 the ratio was 24 to five; in 1981 it was 93 to 6; in 1982 it was 79 to 15; and in 1983 it was 38 to 10. Those figures were given in answer to a parliamentary question put down by one of my hon. Friends.
      It is not a straightforward matter to draw comparisons between different industries, but it is difficult to believe that the health services are so safe that only 43 Crown prohibition notices were needed in six years. Many more notices were issued to private industry during the same period. That must say something about the strength of the inspectorate, because in 1978 industry was issued with 12,217 improvement notices and 3,434 prohibition notices. In 1979, 13,517 improvement notices and 3,674 prohibition notices were issued. In the last year for which figures are available for private industry, there were 12,784 improvement notices and 3,221 prohibition notices.
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      The inspectors are unable to police factories sufficiently and will not be able to do anything about National Health Service premises without a considerable increase in staff. I hope the Minister will tell us how much he expects the staff of the Health and Safety Executive and the inspectorate to increase. In February the Secretary of State for Energy told us in the Committee on the Gas Bill that there would have to be an increase in staff in the Health and Safety Executive and the inspectorate to deal with gas privatisation. He was unable to tell us how many extra people would be needed. That increase will involve public expenditure, and I should like the Minister to tell us how he expects Crown immunity to be lifted on NHS premises without implications for public spending. It is clearly nonsense to say that there are no such implications. I hope that he will answer that question, because unless the staff of the Health and Safety Executive and the inspectorate are increased, the promises that he has made will be null and void and worthless.
      Mr. Corbyn: I should first declare an interest, in that I am sponsored in the House by the National Union of Public Employees, which has a substantial membership of well over 250,000 people employed within the NHS. The way that Crown immunity has applied to the detriment of the interests of our members who work in NHS premises, particularly in the catering departments, has been a matter of great concern to the union.
      I am one of the Members of the House who have spent a great deal of time visiting hospital kitchens over the past years when I have been involved in disputes that kitchen employees have had, and I have often been in deep discussions with them about the standards of management, hygiene and cleanliness that apply in NHS kitchens. Within those places there is a wealth of manual workers' experience which has often come from outside the NHS. They are people who have been employed in the hotel and catering trade and in educational establishments, and they are well accustomed to the operation of the food hygiene regulations. They are often appalled at what they find in NHS catering establishments. I have seen cockroaches, mice, rats and all manner of things running around in NHS hospital kitchens.
      What is incredible is that it has taken until now for the Government to do something about it. They could have done something about it in the past. Merely altering the regulations about Crown immunity does not of necessity solve the problem, as my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) adequately pointed out. She said that we need costings from the Government to show how they will fund that change, and that is important. Even if Crown immunity is lifted completely tomorrow, which the Bill does not do, the problem will not be solved. The environmental health departments of all the local authorities are already inadequately staffed and unable to meet the demands upon them of inspecting dangerous structures and dirty kitchens in restaurants and workplaces. If they are now to be asked, as they must be, to inspect all the hospitals concerned, they will need the resources to do it.
      When the Minister finally comes to reply to this important debate, I hope that he will tell us what discussions he has had with the Secretary of State for the Environment about ensuring that in the forthcoming year

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      the rate support grant settlement takes account of the needs of local authorities for the new responsibilities that will be thrust upon them.
      Mr. Campbell-Savours: And the Treasury.
      Mr. Corbyn: The Treasury, too, as my hon. Friend points out, which will have to fund these things. The Government do not seem to have begun to think about the problems that they are about to meet.
      Mr. Chris Smith: Does my hon. Friend agree that it is not simply the rate support grant settlement that matters, but the way in which the grant-related expenditure assessments are calculated, the way in which targets and penalties are operated, and the way in which rate limits are calculated for those authorities which are subject to limitations under the Rates Act 1984? It is the entire paraphernalia of the control of local government expenditure which the Government have introduced, which operates in such a malign way on the services which are provided by local government, which matters.
      Mr. Corbyn: My hon. Friend is correct. As he and I represent the same borough, we are both faced with the terrible problem of the way in which our inner urban area has been treated by the Government. All that we can look forward to in the next 10 years is a 15 per cent. cut in real terms in health expenditure in the borough of Islington. The same applies in inner city areas all over the country. At the same time, local authority finance is being cut so that they are unable even to provide the social services back-up. My hon. Friend was right to point out that what we are speaking of this evening is part of a wider issue. The two amendments that we are discussing say that we should insert:
      "provided by a health authority for the use by health authority staff for residential or other purposes".
      That is an important addition.
      There is an enormous loophole. I do not know whether the Minister is aware of the organisation of NHS premises, but it seems to me that if our amendments are not passed and a hospital catering department is based, not within the hospital building but in nearby premises, is might not be covered by the Bill. I should be grateful if the Minister would say whether my view is correct. I have dealt with the NHS for a long time, and I know that it is good at finding loopholes.
      Amendment No. 3, which would insert the word "user", is particularly important. I am not sure how the Bill will affect the use of buildings by private contractors after the privatisation of NHS catering departments. I should be happy if the Minister would assure us that there will be no more privatisation of catering departments, but will he at least give us an assurance that private contractors will not be able to evade the regulations by privatising a catering department or sub-letting it to third contractor?
      I read in the papers today that one health authority is to consider allowing an American company to come here and build and run a hospital for the authority. I want to make sure that that company will be made to abide by the strictest possible regulations on food hygiene and kindred matters.
      It is important to consider the background of the problems that hospital kitchens have faced for a long time.
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      Many hon. Members have referred to conditions in hospital kitchens and the presence of pests, and I have witnessed many of the problems at first hand. The Guardian Summary of 27 August last year reported the results of a survey into NHS facilities. It said:
      "Health service hospitals where dirty kitchens and infestations of cockroaches, rats and mice were commonplace should lose their immunity to prosecution, according to the vast majority of nurses taking part in a survey. More than 93 per cent. responding to a Nursing Mirror survey believe that Crown immunity, which prevents an NHS hospital being taken to court should be removed."
      Those nurses have an enormous commitment to the NHS. The article says that the survey made clear
      "the scale and the range of health and safety hazards which exist in hospitals. More than half the 360 nurses questioned believed that their hospitals were not clean. 53 per cent. had seen rats and mice, including 96 nurses reporting sightings in the wards. 36 had seen vermin in the kitchens. More than 88 per cent. had spotted cockroaches or other pests, mainly in wards, kitchens, bathrooms and corridors."
      The article goes on to describe what is happening in our hospitals. There is a clear and urgent need to end Crown immunity.
      As my hon. Friend the Member for Workington (Mr. Campbell-Savours) said when he quoted from a speech by the general secretary of COHSE, the Bill does not solve the problem. It is supposed to end Crown immunity and ensure that NHS hospitals will be safe places, but it applies only to hospital kitchens, and even then Ministers will be left with full powers to decide which parts of the law will apply in future. Worse still, other health and safety legislation, such as the fire prevention laws, the Health and Safety at Work, etc. Act 1974 and Housing and Rent Acts will still not apply to the NHS.
      We have a mess before us. There are loopholes affecting food and hygiene legislation and the Health and Safety at Work, etc. Act. A number of disasters have occurred in NHS hospitals. The worst was the Stanley Royd disaster, but many others like it could happen again, because the legislation does not solve the problem.
      10.30 pm
      Mr. Tony Banks: It is not the removal of Crown immunity that will clean up the kitchens. Surely the kitchens will be cleaned up if kitchen staff are given the resources with which to provide an adequate service. My hon. Friend would like to stress that point, would he not?
      Mr. Corbyn: Indeed, my hon. Friend is correct. As has been pointed out, it is no good passing regulations unless people are empowered to carry them out. Anyone who experienced the long-lost, unlamented operation of the Factories Acts prior to the introduction of the Health and Safety at Work, etc. Act 1974 would know that they were nothing more than a joke. I have direct experience of that. If a shop steward in a factory told the management that some machinery was dangerous and that he was going to call in the factory inspector, there would be a hollow laugh. People would know when the factory inspector was coming, because the yellow lines would be neatly painted in the factory and extra cases of wine would be imported. The problems were not solved. There should have been people who were empowered to go into factories on a day-to-day basis to do something about the dangers of the Factories Acts.
      A Labour Government introduced the Health and Safety at Work etc. Act, which made an enormous

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      improvement, but unless there is back- up, and unless there is an inspectorate to deal with transgressions of the regulations and the staff in hospitals to deal with unhygienic kitchens, the problems will remain. The Government think that they have solved the problems. They think that they were getting a lot of bad publicity because of the existence of Crown immunity. However, in reality they have done nothing to solve those problems, and they will remain with us for a long time.
      I hope that the Minister understands the point and that he will go tonight to one of any number of hospitals in London——
      Mr. Ron Davies: Tonight?
      Mr. Corbyn: Well, perhaps not tonight. The Minister may be detained in the Chamber a little longer than that, but there is no reason why he should not pop along in the morning, just as staff have finished cooking breakfast in the hospitals, and have a good look at what is going on in those kitchens.
      People should not be shocked, but unfortunately they are, because they do not know the facts, and automatically believe that hospital kitchens are safe places. Workers in the NHS and ancillary staff employed in hospital catering departments feel very passionately about this subject. They feel that the media have misused the issue and cast a slur on their desire to ensure that patients are treated properly and that the food is cooked hygienically. They have often protested about management's lack of attention to such matters and about the lack of resources. They see the abolition of Crown immunity as one step towards providing patients with the standard of catering that they deserve.
      That is why those people are worried about the numerous loopholes in the legislation. I would be far happier if, instead of discussing the limited abolition of Crown immunity on some NHS premises, we were discussing the abolition of Crown immunity altogether. It is anachronistic that in a supposedly democratic country the Crown can declare whole areas, including the House, immune from certain laws. The only immunity that we should retain is the right of hon. Members to speak freely in the Chamber without fear of being prosecuted for what they say.
      Mr. Maxton: That immunity has nothing to do with Crown immunity. It is a privilege won by Members of Parliament that has nothing to do with the Crown.
      Mr. Corbyn: That privilege was gained against the wishes of the Crown. Immunity from the law is bequeathed by the Crown, in the interest of the Crown. That is why we should be debating wider issues.
      Be that as it may, and I do not wish to be dragged away from the subject before us, I hope that the House will understand the strong feelings about this issue and accept the Opposition amendments. They are important amendments, but they do not solve the problem. The Government have not come clean on this matter. Either they do not understand the issue of hygiene in NHS hospitals, or they are trying to con the public into believing that once the Bill has been passed all the problems of hygiene will be solved. I assure the House that they will not, and it will take a Labour Government to introduce proper NHS legislation that will end this ridiculous
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      anachronism whereby NHS property can adopt inferior standards to those that apply to properties owned by local government or private concerns.
      It is most important that the House agrees to these amendments this evening. It is also important that the House realises that the Bill is limited in nature.
      Mr. Geoffrey Dickens: I shall make a brief contribution — [Interruption.] It is all very well for Opposition Members to jeer, but I wonder how many of them have spent two years in hospital as I have. During that time I did not catch any bugs or diseases from the kitchens. Opposition Members do a great disservice to the thousands of people throughout the United Kingdom who work in hospital kitchens. Only a few let the side down, while thousands do a good, dedicated job.
      The most annoying part of Opposition speeches was the suggestion yet again that by shoving money into certain areas the problems would be solved. It does not cost money to be clean, to put the lid on the soup, to pick up droppings in the kitchen or to put the lid on the dustbin outside so as not to attract vermin. Why should we always put in resources——
      Mr. Maxton: The hon. Gentleman is putting words into the mouths of Opposition Members that are not correct. We fully support those who work in the cleaning and other areas of the NHS. Indeed, we condemn this Government for ensuring that they are the lowest paid workers in the country. Many of those hard-working conscientious people have to work in appalling conditions, where the kitchens are insanitary because of the state of the equipment in them. It is nothing to do with the work force.
      Mr. Dickens: The hon. Gentleman appears to be suggesting that if I visited a private or council house and found the kitchen dirty, shovelling in money would somehow make it sparkling clean.
      Although the hon. Gentleman has clearly stated that the Opposition support those who work in hospital kitchens, I heard Opposition Members condemning what was happening in kitchens. One hon. Gentleman claimed that he had visited many hospitals — and I have no reason to disbelieve that — and said that he had seen vermin and cockroaches. I suggest that such instances are., thank goodness, fairly isolated. Opposition Members have done a great disservice to those who work in NHS kitchens and they should be ashamed of themselves.
      Mr. Corbyn: This is an important and serious issue and it seems that the hon. Gentleman has not understood exactly what we have been trying to say. No Opposition Member has condemned NHS kitchen workers or the conditions that they maintain within them. The hon. Gentleman should realise that the design of a modern hospital often provides perfect breeding grounds for mice and cockroaches, for example, within the central heating system. It is not the kitchen staffs responsibility to clean the central heating system. It is the management's responsibility to ensure that cockroaches are not breeding in it. It is the local authority's responsibility to ensure, through the environmental health service, that the source of the vermin is removed. Members of kitchen staff often say to me, "It is not good enough to put the lid on the saucepan to keep out the mice if the mice are in the larder in the first place."
      Mr. Dickens: Is the hon. Gentleman suggesting that maintenance workers should keep the central heating system clean? That is what we are arguing about. Nothing will be gained by throwing ratepayers' money into a bottomless pit. Money does not solve every problem, and every hon. Member knows that without me having to remind him.
      It has been said that more resources will be needed for local government so that hospitals can be inspected. How are shops, restaurants and public houses inspected? They are subject to spot checks or random visits. That same system would apply to the hospital service. Every now and again spot checks would be made and that would keep the entire service on its toes. If there were defects in the kitchen and these had to be put right, funds would be found from the hospital's maintenance budget, as it would for other maintenance work throughout the hospital service.
      It is easy to criticise the Government for not responding to the cry for more resources on every occasion when in many instances the answer lies in maintaining higher standards of hygiene and employing good management techniques, which would not involve spending a ha'penny more.
      Mr. Corbynrose——
      Mr. Dickens: I have finished.
      Mr. Ron Davies: The contribution of the hon. Member for Littleborough and Saddleworth (Mr. Dickens) was a disgrace to himself and the interests that he pretends to represent. It demonstrated all the prejudice, malice and ignorance that characterises the Government and Conservative Back Benchers, who support them.
      I ask the hon. Member for Littleborough and Saddlesworth two questions. He was quick on his feet to tell us that he had spent two years in hospital, but he did not tell us what treatment he was receiving. He did not tell us either whether he was in a National Health Service hospital. I invite the hon. Gentleman in a moment to answer those questions. It is obvious that the hon. Gentleman is now deep in thought pondering his answer to me.
      If the hon. Gentleman is so complacent about the standards that apply in the NHS and so satisfied that all that is needed in the NHS is a little extra bit of spit and polish and some more sweat from the brows of NHS workers, why is he voting in support of the Government this evening? I invite the hon. Gentleman to answer my questions before I move on to other matters.
      Mr. Dickens: I spent two years in Edgware general hospital, which was then called Redhill hospital, with infantile paralysis, which is now called poliomyelitis. It was an NHS hospital and it was spotless, I must tell you, because care was taken. You know that care does not cost money.
      Mr. Davies: I hesitate to intervene in the personal dialogue between the hon. Gentleman and yourself, Mr. Deputy Speaker. Perhaps the hon. Gentleman will give us the whole of his medical history and tell us on how many occasions he has been in hospital over the past 10 or 15 years and how often he has been in NHS hospitals. No doubt he will tell us whether he is a subscriber to——
      Mr. Deputy Speaker: Order. I hope that the hon. Member for Caerphilly (Mr. Davies) will not tempt the hon. Member for Littleborough and Saddleworth (Mr. Dickens) to go out of order, as he is doing.
      Mr. Davies: I do not wish to be distracted by the hon. Gentleman, Mr. Deputy Speaker, and I accept your stricture. I shall return to the amendments.
      10.45 pm
      I should like to address myself to two points. First, when the Minister replied to the opening speech by my hon. Friend the Member for Wrexham (Dr. Marek), he said that the provision would apply to the entire National Health Service estate. [Interruption.] I realise that Ministers are possessed of many talents, but I have yet to meet one who is capable of replying to a debate to which he has paid no attention. It may be of interest to the House to know that throughout the debate, the Minister has paid no attention to any of the comments of or questions asked by my hon. Friends, and is now busy chatting to one of the Government Whips. Presumably he has no interest in the debate, and has little intention of listening to any of the questions. I am glad to see that he has now put his head back in his file. Presumably the House now has his attention.
      During the opening part of his speech, the Minister referred to the entire NHS estate. I am trying to work out exactly what that means. First, let us assume that we have an NHS hospital, which, under the direction of the Government, is in the process of privatising some or all of its services. Let us assume that during the process of privatisation, the area health authority decides that it is appropriate to set aside part of the NHS premises for use by a private contractor. At what point during the time scale, from when the hospital is under NHS management to when it ultimately becomes part of the private sector, will the provisions cease to apply?
      Secondly, let us assume that the area health authority, or hospital management, sublets premises—the laundry, which was formerly part of the NHs hospital, or the kitchen, which has equally far-reaching implications—to a private interest, a private contractor. The Minister referred to the entire NHS estate. Does he agree that when part of an NHS hospital is privatised, the provisions will no longer apply? It is a specific point. I hope that the Minister will address it when he replies.
      A further point impinges on the ruling of Mr. Speaker. I do not wish to challenge it, but I seek clarification. I am not sure whether the clarification should come from you, Mr. Deputy Speaker, or from my hon. Friend the Member for Wrexham. We are dealing with two amendments, Nos. 2 and 3. I want to work out, either with your assistance, Mr. Deputy Speaker, or that of my hon. Friend, the essential difference between those two amendments.
      As I understand it, amendment No. 2 is specific. It provides for the insertion in line 9, page 1, after "authority", of the words:
      "or provided by a health authority for the use by health authority staff for residential or other purposes."
      I think that all of us can understand the wording of that amendment. It could mean a residential hospital or teaching block, or any other premises provided by the health authority for use by its staff. That is clear and specific. It refers to staff employed by the NHS in services directly involved with or ancillary to the hospital. Nevertheless, they are employees of the NHS.

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      Amendment No. 3 is different. It requires the insertion in line 12 of the word "user" after the word "the". A user does not necessarily have to be an employee or someone who is directly involved with the services provided by the hospital. It does not have to be someone who is employed by the hospital, either directly in medical care, in ancillary work, or in any other service provided by the hospital. It might be someone whose work is related and who might come into conflict with the health authority. I think, for example, of community health councils.
      When the community health council in my area was established it used premises provided by the area health authority. The office was established by the Secretary of State for Wales, and it was deemed appropriate for area health authority premises to be made available for use by the secretary of the community health council. In no circumstances could premises which, as amendment No. 2 suggests, are
      "provided by a health authority for the use by health authority staff"
      be deemed to include users such as community health councils.
      Mr. Chris Smith: I have followed by my hon. Friend's argument with considerable care. He will he aware that I have expressed some reservations about amendment No. 3. My hon. Friend has, to some extent, changed my mind, however. Does he agree that he is identifying the possibility that the discretion given by amendment No. 3 could enable a health authority to expand the definition of user? I was anxious that it might exclude some users, but my hon. Friend has said that it might be used to include extra users and that it might therefore be useful.
      Mr. Davies: That is an important point and emphasises the importance of getting the legislation right. It is all very well for the Government to say that the intention is quite clear, but it is a matter for interpretation by the judiciary and it is our constituents — not those of Conservative Members, who opt out of the NHS and into private health care—who will suffer.
      My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) said that he has reservations about amendment No. 3. He is right. We do not know what it could do. I am inclined to support it because it will empower the Minister to include users who might otherwise be excluded.
      Mr. Corbyn: My hon. Friend has touched on an important matter. The Government seem increasingly to introduce permissive legislation which gives Ministers enormous rein on where regulations should apply. Does he agree that it would be much better to have something clear which proviced that there was to be no Crown immunity in any NHS property of any sort, rather than this mishmash of half-baked ideas?
      Mr. Davies: I welcome my hon. Friend's comments. As a matter of principle, I agree with him. Abolition of Crown immunity would be the end of the problem. In the absence of abolition, if the Government want to introduce permissive legislation, I am prepared to welcome it, provided that I am satisfied that the Government are well motivated. That is the problem, and in these circumstances I am not satisfied that the Government are well motivated. I suspect that, rather than using the discretion available to extend the powers, they will use it to restrict the provisions.
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      My hon. Friend the Member for Islington, North (Mr. Corbyn) spoke of his reservations. As I understand it, at the end of the debate we shall not be offered the opportunity to vote on amendment No. 2 because Mr. Speaker, in his wisdom, has decided that amendment No. 3 will be taken with it. I do not wish to challenge that ruling and, indeed, it would be wrong to do so, but that decision puts some of my hon. Friends in an invidious position. While I accept the logic of it and appreciate that the amendments have been put together, some of my hon. Friends will he more than happy to support amendment No. 2 but would have reservations about supporting amendment No. 3.
      During the rest of the debate could you, Mr. Deputy Speaker, ponder the wisdom of putting amendments Nos. 2 and 3 together? I wonder whether my hon. Friend the Member for Wrexham will consider whether it is to the advantage of the House to take them separately. Even on the Government side there may be some hon. Members who are prepared to support either amendment No. 2 or amendment No. 3 but who would not necessarily agree that both amendments can be disposed of on the same vote. I await with interest your ruling on that.
      I look forward to hearing whether my hon. Friend supports my contention that the two amendments offer the House something different and that there is a strong case for voting separately on them.
      Mr. Deputy Speaker: We are debating amendments Nos. 2 and 3 together, and clearly that cannot be altered as we are well into the debate. However, I shall consider the possibility of a separate Division on amendment No. 3 when the House has reached a conclusion on amendment No. 2, and give my decision in due course.
      Mr. Corbyn: On a point of order, Mr. Deputy Speaker. Further to that advice, I hope you will be aware that many hon. Members would be grateful if you could allow a separate vote on these two amendments.
      Mr. Deputy Speaker: I have said that I shall consider that. When we come to a decision on amendment No. 2 I shall consider the possibility of allowing a separate Division on amendment No 3.
      Mr. Clay: This has been a most interesting debate on an extremely important matter. However, I am becoming confused and worried that something fishy is going on.
      Some time ago the Minister gave what in my innocence, appeared to be a clear statement which seemed to meet what the Opposition are seeking to achieve through amendment No. 2. Since then some of my hon. Friends have spoken, including my hon. Friend the Member for Workington (Mr. Campbell-Savours) who read out some criticisms made by the COHSE journal. He asked the Minister to say whether those criticisms were misinformed because he was sure that COHSE members would be delighted to receive that information because the matter would be cleared up.
      My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) said that he welcomed the Minister's assurances, but wanted to be clear that there was no room for doubt. Many Labour Members have made similar remarks. I know that my hon. Friends are anxious to make progress on the Bill. Other important matters need to be discussed. I assume that the Government do not want to be here all night discussing the amendment.

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      11 pm
      I started to ask myself why, when all that the Minister has to do is to repeat his clear assurance and say that all the doubts that we are expressing are because we have misunderstood the matter, this has not happened. A simple way to proceed would be for the Minister to say that the Government will accept the amendment. That would be the end of the matter.
      Mr. Chris Smith: Does my hon. Friend agree that, even if the Minister is not prepared to take the sensible course of accepting the amendment, he could make clear what he means by "the entire NHS estate"? Does he mean everything that is owned, rented or in the control of the NHS or any health authority, or does he mean something different? An answer would clarify the matter once and for all.
      Mr. Clay: That is a good point.
      Mr. Ron Davies: For the past two and a half hours, there has been no representative of either the Liberal party or the SDP present in the Chamber. Is my hon. Friend trying to put a new mantle around his shoulders—that of being the representative of moderate consensus politics?
      Mr. Clay: I am trying to be the representative of decent common sense. That has not been shown by either side of the so-called alliance. No doubt it is because we have been having a common sense discussion tonight that no alliance representatives have been around.
      A number of specific points have been raised and questions put that the Minister could have clarified. For example, what did he mean by "the entire NHS estate"? Hon. Members have asked whether this includes NHS property that has been leased to a private contractor. There has been no Government response.
      Mr. Corbyn: Would my hon. Friend care to reflect on the fact that unless the Minister is prepared to be clear on this subject, the NHS administration, if it were so minded, could get away from the so-called removal of Crown immunity by leasing the property to a private company to do the work for it, and then buying that product—for example, catering? That could lead to a serious infringement of the will of Parliament.
      Mr. Clay: My hon. Friend has identified an extremely sinister possibility. That is why it is all the more important that we have an absolute and unequivocal assurance from the Minister to clarify what he said earlier.
      We are all anxious to make progress. The longer this goes on, with the Minister refusing to clarify his interesting remark, which came as a great surprise no doubt not only to Labour Members but to NHS workers and everybody else interested in the matter, the more confusing the matter will become. For a few minutes, my hon. Friends wondered whether we had made a great step forward and scored a small victory. Is this a major concession? As time goes on I worry more and more about what the Minister said. He said that he was acting on the best legal advice and that the Bill covered our suggestion in the amendment. I do not know what his best legal advice was. Perhaps it was the same legal advice as was given to the Secretary of State when he tried to introduce regulations for board and lodging allowance. DHSS Ministers have fallen on the wrong side of the courts more than once. One must assume that Ministers act only after having taken legal advice.
      Mr. Ron Davies: The Minister certainly cannot have sought the Solicitor-General's advice. If he had, it would have been leaked by letter.
      Mr. Clay: How does one follow that?
      I wonder about legal advice. What about the legal advice given to the Secretary of State for Transport on legislation that he has tried to introduce? He has been through the courts more times since the general election than all Opposition Members put together. That is going some.
      We must ask what the Minister means by saying that he has had the best legal advice. What he says from the Dispatch Box is no protection for anyone who finds that that best legal advice is wrong. If the Minister makes a fool of himself, that will be of little comfort to the person who finds that the best legal advice does not achieve the objectives of our amendment. We are so used to Ministers making fools of themselves that, when they do, it is of little public interest.
      Mr. Brian Sedgemore: My hon. Friend says that the Minister was saying, hypothetically, that on the basis of legal advice we might be about to take a great step forward. Then he paused and rethought and said that, hypothetically, on the basis of the Minister's legal advice, we might be experiencing a small but significant victory. Can my hon. Friend tell me, hypothetically, what is the difference between a great step forward and a small but significant victory?
      Mr. Clay: I have no legal training, and that was a legalistic question. If I were to stray into that fascinating semantic issue, I might incur the Chair's displeasure. It is not for me to divine such matters or to work out exactly what the Minister was trying to tell us. The Minister should answer all worries expressed by my hon. Friends since he made that interesting statement.
      Mr. Cohen: One thing that the Minister did not say was that he had taken the best legal advice about the amendment. If he had asked his legal experts about the amendment, they might have said that it was more watertight than the provision in the Bill.
      Mr. Clay: That is an extremely useful suggestion which, even at this late stage, the Minister could take up. It might save a lot of time and serve the purpose that the Minister is trying to achieve if he were to accept the amendment. I hope that the Minister will do so. It would enable us to make progress.
      As one who must take into account pessimistic possibilities, bearing in mind the kind of Government with whom we are dealing, I address a few words to my right hon. and hon. Friends on the Front Bench. One or two Labour Members have commented on the difficulties regarding a vote on amendments Nos. 2 and 3. My right hon. and hon. Friends on the Front Bench—indeed, all hon. Members—must decide whether they are satisfied with the assurances that the Minister has given about amendment No. 2.
      One can envisage circumstances, both in the Chamber and in Committee, in which, on the basis of the Minister's assurances, the Opposition would not press an amendment to a vote. In the light of the comments made in the past few hours and the extraordinary prolonged silence of the Minister, the right hon. Gentleman will need to take quite

      113
      a long time to satisfy Labour Members that what he said was as simple as it seemed to be in order for them not to press amendment No. 2 to a Division.
      Mr. Maxton: On a point of order, Mr. Deputy Speaker. I listened carefully to my hon. Friend's interesting and good speech. However, it was disrupted at the end by constant conversations by Conservative Members. Those hon. Members obviously believe that a vote is about to take place. They think that if they come into the Chamber and make that sort of noise, somehow or other the vote will take place earlier. I assure them that their behaviour will extend the debate, because there will be further points of order about their behaviour. I hope that you, Mr. Deputy Speaker, will ask them to remove themselves to the various parts of the House where they can carry on conversations without interrupting the debate.
      Mr. Deputy Speaker: Order. Discussion is going on both inside and outside the Chamber. I hope that hon. Members in the Chamber will listen to the debate.
      Dr. Marek: There has been a useful debate on the two short amendments. It is significant that on this occasion, contrary to his conduct on previous amendments, the Minister rushed into the Chamber to assure us on certain matters, but after further questions put by my hon. Friends he was unable to reply. with the result that there is now considerable uncertainty on the Opposition Benches about the state of the National Health Service, whether particular premises are part of an estate if the premises are tenanted, and so on.
      The hon. Member for Littleborough and Saddleworth (Mr. Dickens) said, by way of intervention, that money does not keep hospitals clean. I must say that money goes a long way towards keeping hospitals clean. Hospitals and nurses' homes— in fact any part of a National Health Service estate, however it is defined—cannot be kept clean unless there is money available for materials and to pay for staff, adequately and fairly, and unless the management of the National Health Service is able to operate without worrying constantly about shortage of finance, shortage of resources, and shortage of capital equipment. If the management of the National Health Service is always worrying about resources, finance, and so on, however good that management is it cannot do as good a job as it should be doing on the matters that it has to consider.
      Mr. Corbyn: Does my hon. Friend accept that the whole management of the NHS in the past seven years has resulted in significant reductions in the total number of staff employed, and that the reductions have taken place almost exclusively among the manual worker grades within the NHS — the cleaners, and catering and portering staff? When the privatisation of cleaning services takes place in hospitals, the average number of jobs lost will be between 40 and 60 per cent. of the complement employed by the National Health Service. Does my hon. Friend accept that the loss of jobs among directly employed staff through the introduction of bonus schemes or through the introduction of private contracts inevitably leads to insufficient staff to do the cleaning and necessary back-up work in the catering departments'? Does he agree that that is the real enemy of a good Health Service and good standards of hygiene in hospitals?
      11.15 pm
      Dr. Marek: My hon. Friend is right. It is undeniable that in the past five or six years many health authorities which have been faced with cuts have had to choose how much to invest in the fabric of the estate. With respect to revenue expenditure, they have had to choose between protecting medical services and protecting ancillary services. In many cases they have cut ancillary services to protect medical services.
      Mr. Dickens: Does the hon. Gentleman accept that I was saying that the vast majority of hospital kitchens are run well and hygienically? In many cases one could almost eat the food off the floor. I am praising the people who work in the hospital kitchens. I agree that one or two kitchens have let the side down. Cleanliness costs nothing. Every kitchen has the materials needed. We are well served by the hospitals. Because there are those that let the side down, the Government's legislation is worth while. It should correct the position.
      Dr. Marek: The hon. Gentleman's first comment was fair but I cannot agree with him that cleanliness costs nothing. There is certainly a problem with pest control in old hospitals in which sewers and sumps lead directly from the kitchen. Modern kitchens avoid that. Hospitals get older. Some hospitals are 50 to 100 years old, and some are about to open next week. Their numbers are declining. The old hospitals have defects, simply because of the technology available when they were built or because of fair wear and tear. More costs are incurred in terms of effort, staff and capital investment to keep such hospitals clean than are incurred in keeping modern hospitals open. Of course, there must be costs in terms of cleaning materials and staff. On top of that, there are the costs of fair wear and tear and the costs associated with the antiquity of the systems. Older hospitals are just that much more difficult to keep clean.
      I stand by what I said. If there are sufficient staff and they are paid a reasonable wage, their spirits are high, their morale is good, they feel that they are doing a service for the patient, and we get a little extra from them. Before I am misquoted—I am not accusing the hon. Member for Littleborough and Saddleworth (Mr. Dickens) of intending to do so—I must say that staff in the NHS do an excellent job, but they could do an even better one if the resources were provided. That is what is at the back of the amendment.
      We are not sure what will, be included in the Bill. We hope that nursing homes and similar institutions will be included. The Minister says that they are included, but lie has not backed up his assertion. If they are to be included, additional resources will be required.
      The Government did not say on Second Reading or in Committee, and they have not said this evening, that they recognise that there is a problem, that some hospital facilities must be cleaned up and that additional resources will be needed. They have said nothing that will give any hope to health authorities which want to provide clean premises for their staff. The British Pest Control Association says that in recent years the problem has grown much worse and that it has now grown to crisis proportions. For that reason, I am glad that the Bill has been introduced, but it could have been a much better Bill.
      I do not want to take up the time of the House. The Opposition are not convinced by the Minister's

      115
      explanation. It came too quickly and too early. There are many questions that ought to be answered but have not been answered. We believe that amendment No. 2 should be taken to a Division. When we know the result of that Division, we shall decide what to do about amendment No. 3.
      Mr. Hayhoe: The Official Report will show that some time ago I responded in clear and unambiguous terms to amendments Nos. 2 and 3. I stand by the words that I used then and I shall be happy to read them in Hansard. I doubt whether as much could be said for many of the other speeches that we have heard on these amendments.
      Question put, That the amendment be made:—
      The House divided: Ayes 27, Noes 168.

      Division No. 214]

      [11.22 pm

      AYES

      Banks, Tony (Newham NW)

      Hogg, N. (C'nauld & Kilsyth)

      Barnett, Guy

      Lewis, Terence (Worsley)

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

      McWilliam, John

      Campbell-Savours, Dale

      Marek, Dr John

      Clay, Robert

      Maxton, John

      Clwyd, Mrs Ann

      Patchett, Terry

      Cook, Robin F. (Livingston)

      Pike, Peter

      Corbyn, Jeremy

      Powell, Raymond (Ogmore)

      Craigen, J. M.

      Skinner, Dennis

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

      Spearing, Nigel

      Dixon, Donald

      Thompson, J. (Wansbeck)

      Dobson, Frank

      Fatchett, Derek

      Tellers for the Ayes:

      Foster, Derek

      Mr. Ron Davies and Mr. Chris Smith

      Garrett, W. E.

      Haynes, Frank

      NOES

      Alexander, Richard

      Cranborne, Viscount

      Alton, David

      Currie, Mrs Edwina

      Amess, David

      Dickens, Geoffrey

      Arnold, Tom

      Douglas-Hamilton, Lord J.

      Ashby, David

      Dover, Den

      Aspinwall, Jack

      Dunn, Robert

      Baker, Nicholas (Dorset N)

      Durant, Tony

      Beaumont-Dark, Anthony

      Edwards, Rt Hon N. (P'broke)

      Beith, A. J.

      Eggar, Tim

      Bellingham, Henry

      Emery, Sir Peter

      Benyon, William

      Fairbairn, Nicholas

      Best, Keith

      Fallon, Michael

      Biggs-Davison, Sir John

      Favell, Anthony

      Blackburn, John

      Forsyth, Michael (Stirling)

      Blaker, Rt Hon Sir Peter

      Forth, Eric

      Bonsor, Sir Nicholas

      Fowler, Rt Hon Norman

      Bottomley, Peter

      Franks, Cecil

      Bowden, Gerald (Dulwich)

      Fraser, Peter (Angus East)

      Bright, Graham

      Freeman, Roger

      Brinton, Tim

      Gale, Roger

      Brittan, Rt Hon Leon

      Galley, Roy

      Brooke, Hon Peter

      Garel-Jones, Tristan

      Brown, M. (Brigg & Cl'thpes)

      Gorst, John

      Bruce, Malcolm

      Gower, Sir Raymond

      Bruinvels, Peter

      Greenway, Harry

      Buck, Sir Antony

      Gregory, Conal

      Budgen, Nick

      Griffiths, Peter (Portsm'th N)

      Burt, Alistair

      Ground, Patrick

      Butterfill, John

      Hamilton, Hon A. (Epsom)

      Carlisle, Kenneth (Lincoln)

      Hamilton, Neil (Tatton)

      Cash, William

      Hampson, Dr Keith

      Chope, Christopher

      Hargreaves, Kenneth

      Clarke, Rt Hon K. (Rushcliffe)

      Harris, David

      Conway, Derek

      Hawkins, Sir Paul (N'folk SW)

      Coombs, Simon

      Hawksley, Warren

      Cope, John

      Hayes, J.

      Corrie, John

      Hayhoe, Rt Hon Barney

      Couchman, James

      Hayward, Robert

      116

      Heathcoat-Amory, David

      Mitchell, David (Hants NW)

      Heddle, John

      Moate, Roger

      Henderson, Barry

      Moore, Rt Hon John

      Hicks, Robert

      Moynihan, Hon C.

      Hind, Kenneth

      Nelson, Anthony

      Hirst, Michael

      Newton, Tony

      Howarth, Gerald (Cannock)

      Nicholls, Patrick

      Hubbard-Miles, Peter

      Norris, Steven

      Hughes, Simon (Southwark)

      Onslow, Cranley

      Hunt, David (Wirral W)

      Ottaway, Richard

      Hunter, Andrew

      Page, Richard (Herts SW)

      Jackson, Robert

      Percival, Rt Hon Sir Ian

      Jenkin, Rt Hon Patrick

      Portillo, Michael

      Jessel, Toby

      Powell, William (Corby)

      Jones, Gwilym (Cardiff N)

      Powley, John

      Jones, Robert (Herts W)

      Price, Sir David

      Joseph, Rt Hon Sir Keith

      Raffan, Keith

      Kellett-Bowman, Mrs Elaine

      Rathbone, Tim

      Kennedy, Charles

      Rhodes James, Robert

      Key, Robert

      Rhys Williams, Sir Brandon

      Knight, Dame Jill (Edgbaston)

      Ridley, Rt Hon Nicholas

      Knowles, Michael

      Sackville, Hon Thomas

      Lang, Ian

      Sainsbury, Hon Timothy

      Latham, Michael

      Sayeed, Jonathan

      Lawler, Geoffrey

      Shaw, Sir Michael (Scarb')

      Leigh, Edward (Gainsbor'gh)

      Silvester, Fred

      Lennox-Boyd, Hon Mark

      Sims, Roger

      Lester, Jim

      Skeet, Sir Trevor

      Lilley, Peter

      Smith, Tim (Beaconsfield)

      Lloyd, Peter (Fareham)

      Soames, Hon Nicholas

      Lord, Michael

      Squire, Robin

      Lyell, Nicholas

      Taylor, Teddy (S'end E)

      McCurley, Mrs Anna

      Thompson, Donald (Calder V)

      Macfarlane, Neil

      Thompson, Patrick (N'ich N)

      MacGregor, Rt Hon John

      Thorne, Neil (Ilford S)

      MacKay, Andrew (Berkshire)

      Thurnham, Peter

      MacKay, John (Argyll & Bute)

      Townend, John (Bridlington)

      McLoughlin, Patrick

      Wakeham, Rt Hon John

      Major, John

      Walden, George

      Malins, Humfrey

      Wallace, James

      Marland, Paul

      Waller, Gary

      Marlow, Antony

      Watson, John

      Mather, Carol

      Whitney, Raymond

      Maxwell-Hyslop, Robin

      Yeo, Tim

      Mayhew, Sir Patrick

      Merchant, Piers

      Tellers for the Noes:

      Miller, Hal (B'grove)

      Mr. Francis Maude and Mr. Gerald Malone.

      Mills, Iain (Meriden)

      Question accordingly negatived.
      Mr. Corbyn: On a point of order, Mr. Deputy Speaker. During the previous debate my hon. Friend the Member for Caerphilly (Mr. Davies) and I asked whether you would be prepared to allow a separate Division on amendment No. 3. You said that you would consider our request and inform the House of your decision. Are you prepared to allow a separate Division on amendment No. 3? There is significant differences between amendments Nos. 2 and 3.
      Mr. Deputy Speaker (Sir Paul Dean): I understood that the official Opposition did not wish to vote on amendment No. 3. However, if the hon. Member for Islington, North (Mr. Corbyn) wishes to have a vote, I am prepared to allow it.
      Amendment proposed: No. 3, in page 1, line 12, after 'the', insert 'user,'—[Mr. Corbyn.]
      Question put, That the amendment be made:—
      The House divided: Ayes 23, Noes 166.

      Division No. 215]

      [11.37 pm

      AYES

      Banks, Tony (Newham NW)

      Clay, Robert

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

      Clwyd, Mrs Ann

      Campbell-Savours, Dale

      Cook, Robin F. (Livingston)

      117

      Corbyn, Jeremy

      Maxton, John

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

      Patchett, Terry

      Dixon, Donald

      Pike, Peter

      Dobson, Frank

      Powell, Raymond (Ogmore)

      Evans, John (St. Helens N)

      Skinner, Dennis

      Fatchett, Derek

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

      Foster, Derek

      Hogg, N. (C'nauld & Kilsyth)

      Tellers for the Ayes:

      Lewis, Terence (Worsley)

      Mr. Frank Haynes and Mr. Ron Davies.

      McWilliam, John

      Marek, Dr John

      NOES

      Alexander, Richard

      Harris, David

      Alton, David

      Hawkins, Sir Paul (N'folk SW)

      Amess, David

      Hawksley, Warren

      Arnold, Tom

      Hayes, J.

      Ashby, David

      Hayhoe, Rt Hon Barney

      Aspinwall, Jack

      Hayward, Robert

      Baker, Nicholas (Dorset N)

      Heathcoat-Amory, David

      Beaumont-Dark, Anthony

      Henderson, Barry

      Beith, A. J.

      Hicks, Robert

      Bellingham, Henry

      Hind, Kenneth

      Benyon, William

      Hirst, Michael

      Best, Keith

      Howarth, Gerald (Cannock)

      Biffen, Rt Hon John

      Hubbard-Miles, Peter

      Biggs-Davison, Sir John

      Hughes, Simon (Southwark)

      Blackburn, John

      Hunt, David (Wirral W)

      Blaker, Rt Hon Sir Peter

      Hunter, Andrew

      Bonsor, Sir Nicholas

      Jackson, Robert

      Boscawen, Hon Robert

      Jenkin, Rt Hon Patrick

      Bottomley, Peter

      Jessel, Toby

      Bowden, Gerald (Dulwich)

      Jones, Gwilym (Cardiff N)

      Bright, Graham

      Jones, Robert (Herts W)

      Brinton, Tim

      Joseph, Rt Hon Sir Keith

      Brittan, Rt Hon Leon

      Kellett-Bowman, Mrs Elaine

      Brooke, Hon Peter

      Kennedy, Charles

      Brown, M. (Brigg & Cl'thpes)

      Key, Robert

      Bruce, Malcolm

      Knowles, Michael

      Bruinvels, Peter

      Lang, Ian

      Buck, Sir Antony

      Latham, Michael

      Budgen, Nick

      Lawler, Geoffrey

      Burt, Alistair

      Leigh, Edward (Gainsbor'gh)

      Butterfill, John

      Lester, Jim

      Carlisle, Kenneth (Lincoln)

      Lilley, Peter

      Chope, Christopher

      Lloyd, Peter (Fareham)

      Clarke, Rt Hon K. (Rushcliffe)

      Lord, Michael

      Coombs, Simon

      Lyell, Nicholas

      Cope, John

      McCurley, Mrs Anna

      Corrie, John

      Macfarlane, Neil

      Couchman, James

      MacGregor, Rt Hon John

      Cranborne, Viscount

      MacKay, Andrew (Berkshire)

      Currie, Mrs Edwina

      MacKay, John (Argyll & Bute)

      Dickens, Geoffrey

      McLoughlin, Patrick

      Douglas-Hamilton, Lord J.

      Major, John

      Dover, Den

      Malins, Humfrey

      Dunn, Robert

      Marland, Paul

      Durant, Tony

      Marlow, Antony

      Edwards, Rt Hon N. (P'broke)

      Mather, Carol

      Eggar, Tim

      Maude, Hon Francis

      Emery, Sir Peter

      Maxwell-Hyslop, Robin

      Fairbairn, Nicholas

      Mayhew, Sir Patrick

      Fallon, Michael

      Merchant, Piers

      Favell, Anthony

      Miller, Hal (B'grove)

      Forsyth, Michael (Stirling)

      Mills, Iain (Meriden)

      Forth, Eric

      Mitchell, David (Hants NW)

      Fowler, Rt Hon Norman

      Moate, Roger

      Franks, Cecil

      Moore, Rt Hon John

      Freeman, Roger

      Moynihan, Hon C.

      Gale, Roger

      Nelson, Anthony

      Galley, Roy

      Newton, Tony

      Garel-Jones, Tristan

      Nicholls, Patrick

      Gorst, John

      Norris, Steven

      Gower, Sir Raymond

      Onslow, Cranley

      Gregory, Conal

      Ottaway, Richard

      Griffiths, Peter (Portsm'th N)

      Page, Richard (Herts SW)

      Hamilton, Hon A. (Epsom)

      Percival, Rt Hon Sir Ian

      Hamilton, Neil (Tatton)

      Portillo, Michael

      Hampson, Dr Keith

      Powell, William (Corby)

      Hargreaves, Kenneth t.

      Powley, John

      118

      Price, Sir David

      Taylor, Teddy (S'end E)

      Raffan, Keith

      Thompson, Donald (Calder V)

      Rathbone, Tim

      Thompson, Patrick (N'ich N)

      Rhodes James, Robert

      Thorne, Neil (Ilford S)

      Rhys Williams, Sir Brandon

      Thurnham, Peter

      Ridley, Rt Hon Nicholas

      Townend, John (Bridlington)

      Ridsdale, Sir Julian

      Wakeham, Rt Hon John

      Sackville, Hon Thomas

      Walden, George

      Sainsbury, Hon Timothy

      Wallace, James

      Sayeed, Jonathan

      Waller, Gary

      Shaw, Sir Michael (Scarb')

      Warren, Kenneth

      Silvester, Fred

      Watson, John

      Sims, Roger

      Whitney, Raymond

      Skeet, Sir Trevor

      Yeo, Tim

      Smith, Tim (Beaconsfield)

      Soames, Hon Nicholas

      Tellers for the Noes:

      Squire, Robin

      Mr. Mark Lennox-Boyd and Mr. Gerald Malone.

      Steel, Rt Hon David

      Question accordingly negatived.
      11.45 pm
      Mr. Sedgemore: On a point of order, Mr. Deputy Speaker. The debate is taking an enormous amount of time and there is now a rumour going around that the Government are going to cede the private Member's day, so Conservative Members can go home to bed early tonight. If there are these sort of private machinations going on behind the scenes, should we not have a statement from the Leader of the House as to what is being arranged and offered to the Opposition? At the moment only a couple of individuals are privy to it
      Mr. Deputy Speaker: I know nothing about these matters.
      Mr. Dobson: I beg to move amendment No.4, in page 1, leave out lines 14 to 16.
      Mr. Deputy Speaker: With this, we may take the following: amendment No. 5, in page 1, line 14, leave out 'in' and insert 'to extend'.
      Government amendment No. 6.
      Amendment No. 7, in page 1, line 16, at end insert
      'to secure proper hygiene standards throughout all of the premises.
      (2A) Vermin shall for the purposes of the Public Health Act 1961 and any regulations or orders made under this Act or the food legislation include rats, mice, insects, mites, birds and feral cats.
      (2B) For the purposes of section 35 of the Public Health Act 1961 no part of health authorities premises shall be considered as controlled by the Factories Acts.'.
      Amendment No. 8, in page 1, line 16, at end insert
      'to secure proper hygiene standards throughout all the premises'.
      Amendment No. 12, in page 1, line 16, at end insert—
      '(2A) Vermin for the purposes of the Public Health Act 1961 and any regulations or order made under this Act, which shall apply to National Health Service premises, or the food legislation shall include rats, mice, insects, mites, birds and feral cats.
      (2B) For the purposes of section 35 of the Public Health Act 1961 no part of health authorities premises shall be considered as controlled by the Factories Acts.'.
      Mr. Dobson: As it stands, the Bill would allow the Secretary of State to set aside the new legislation by way of regulations. Amendment No 4 would leave out the provision allowing him to set it aside. Amendment No. 5 would permit him to change it, but only by extending it. To be fair, the Government's amendment attempts to meet the points that we made in Committee, but we are not

      119
      convinced about it. We should like to know what evidence there is of any need for the Government to have any power to change this law.
      In Committee, we asked the Minister why it was necessary for the Secretary of State to be able to set aside or vary the provision that lifts Crown immunity from food regulations in hospitals. The answer that the Minister gave was that parliamentary counsel had advised him that the clause needed to be included as
      "a prudent contingency provision to cover the possibility that the application of food legislation may not fit the way in which health authorities are constituted."
      Even more surprisingly, he then said:
      "Lawyers, from their vast experience of legislation, have seen that difficulties could arise over implementing a provision to remove Crown immunity from food legislation." —[Official Report, Standing Committee E, 29 April 1986; c. 12.]
      At our subsequent sitting, the right hon. Gentleman amended that statement ever so slightly to tone it down. However, we do not understand why the Secretary of State should take this power to vary the law on food hygiene.
      Have the Government actually sought advice on whether these peculiar powers that they are seeking are necessary? For instance, have they asked the Health and Safety Executive whether its experience of vetting the kitchens of private hospitals — for which it is responsible, as they are not covered by Crown immunity —suggests that it might be difficult to impose the food hygiene regulations on NHS hospitals? Have the Minister's officials reported any possible problems with imposing the regulations on NHS hospitals? Are the problems that are envisaged by those far-sighted lawyers —if those words are not a contradiction in terms—not to do with the practical workings of the hospital but with the way that health authorities work or do not work? Is this demand one not of practicality in the hospitals but of administrative convenience?
      Many businesses find regulations inconvenient. Most businesses, if asked, would say that the Health and Safety at Work etc. Act is inconvenient. Certain stupid people, including Lord Young, would say that health and safety at work legislation is an intolerable burden on private industry. Everyone would accept that it is a burden, but not many would agree with Lord Young and say that it is so intolerable a burden that it should be removed. Burdens may be imposed by the regulations, but they are worthwhile burdens because they protect the health and safety of people at work.
      In the circumstances, if others accept the inconvenience of health and safety at work and food legislation, we must tell health authorities that if it is simply administratively inconvenient for them to obey the law, that is tough—they can get on with obeying it like everyone else. We would rather inconvenience a few health authorities than have people suffer from salmonella poisoning.
      We need an explanation from the Minister of exactly why this provision is necessary. We come back to the point:
      "I was advised by parliamentary counsel that the clause needs to be included as a prudent contingency provision".
      When parliamentary counsel says that, we should consider carefully what the ulterior motives might be. No doubt the same parliamentary counsel who thought that the clause
      120
      as drafted was spot on is the one who has come up with Government amendment No. 6 which accepts the variation, provided that it is
      "necessary for its effective operation"
      of the regulations in relation to health authorities.
      We are not entirely clear what that means. Is it intended to sharpen the food regulations in case they are not sufficiently strong, powerful and thorough-going in respect of health authorities? If there is evidence to that effect, they should be extended, as sharpened, to all the premises that are now covered. If it is not intended to sharpen the law, the intention must be to blunt it. It is intended either to sharpen it to make it more worth while or to blunt it. If its effect is neutral, there is no need to include the proposition that is before us.
      We still want to hear from the Minister what circumstances are envisaged which would make it difficult for health authorities if the law that applies to shops, hotels, restaurants and other premises serving food is applied to them. There was not a shred of a suggestion, in Committee from the Minister or his colleagues of what they envisaged. The proposition is advanced on the basis that it will deal with apprently unimaginable problems that might occur in future. We do not think that any Government—even a Labour Government —should be assisted by a power that will allow them to waive certain laws because of the possibility of unimaginable problems in future.
      Amendments Nos. 7 and 12 seek to secure the extension of the definition of "vermin".
      Mr. Sedgemore: Nye Bevan had a definition of "vermin".
      Mr. Dobson: Labour's most famous Minister of Health had a definition which I recall was related to the Conservative and unionist party, so he cannot have been far off the mark. I would not wish to be controversial as the witching hour approaches. We are talking about experts on infestation, and they advise that it is ——
      Mr. Tim Smith: What about "skunk" as a definition?
      Mr. Dobson: If the hon. Gentleman were to speak to the Institution of Environmental Health Officers or the British Pest Control Association, which are in favour of the amendments, they might tell him that they consider skunks to be necessary. So far as I know, skunks are not currently infesting hospitals. I do not know whether a hospital in the hon. Gentleman's constituency is in that position. The Opposition are still in the realms of reality. The hon. Gentleman obviously is not.
      We wish to redefine public health legislation and to relate the application of the law on food to Health Service premises so that rats, mice, insects, mites, birds and feral cats can be defined as vermin and dealt with appropriately.
      Mr. Maxton: What is a feral cat?
      Mr. Dobson: My understanding is that it is a cat that has gone wild. In certain hospitals, considerable numbers of feral cats roam round the premises, just as some hospitals within this city and other cities are infested by birds going into kitchens. But because they do not fall within the definition of vermin, it is difficult to deal with them under the law. Some Conservative Members who have been talking while I have been talking might be happy to tell their constituents that their local hospital is

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      infested with rats, mice, insects, mites, birds or feral cats, but people who know their job — by definition, that makes them superior to most Ministers —are advising us, Ministers and the health authorities that the law needs to be changed and that we need to change the definition of "vermin", which would strengthen the law and improve the cleanliness and general hygiene in hospital kitchens. We believe that is right. It should be done.
      12 midnight
      I do not want to detain the House at enormous length at this time of night, so I refer finally to amendment No. 8. That aims, as it says in plain words,
      "to secure proper hygiene standards throughout all the premises".
      I think everyone is agreed that we need to sort out food hygiene in kitchens. We should be able to maintain good food hygiene in the rest of the hospital premises once the food has been prepared in clean hospital kitchens—in some cases, for the first time for a few years. We are advised that, as presently worded, the Bill does not apply to the food once it is on the ward. The law should be changed to provide for that. We are also advised that the Bill does not apply to food in a nurses' home. Nurses are entitled to clean, decent and edible food. If the food is tipped out and becomes refuse in the back end of the ward or in another part of the hospital rather than in the kitchen, we are not convinced that that is covered by the food hygiene regulations.
      We all know that all the food that is not consumed, the bits and pieces that are left over, is not necessarily returned to the kitchens. So there is food that is being moved about, food that is in the process of being consumed, food waiting about before being eaten and food that has not been eaten hanging about for a considerable time which should be treated as refuse. As far as we can see, all that food is not caught by the Bill as drafted, and we think that it should be.
      Those are not fears that we are inventing. Those views are held by those whose profession it is to inspect premises to see whether they conform with the food hygiene regulations. Frankly, if I had to choose between the professional view of an environmental health officer and that of a Minister, I would go along with the person who knew something about food hygiene through his professional knowledge and experience.
      I hope that the Government will explain why they are taking unto themselves this extraordinary power to vary the law to suit themselves. I hope also that the Minister will accept our proposition that the amendments should be accepted, because they would strengthen the Bill that they have drafted.
      Mr. Hayhoe: These amendments deal with the regulation-making powers to make modifications to the food legislation's application to health authorities by regulations which require an affirmative resolution of both Houses.
      I assure the House that the Government do not intend to use the modification power to undermine the commitment to apply the food legislation to health authorities. The hon. Member for Holborn and St. Pancras (Mr. Dobson) acknowledged that Government amendment No. 6 is a response to anxieties that were expressed in Committee. Opposition Members expressed a suspicion about the presence of a modification power in the Bill, which they suggested might be used to undermine
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      the application of the food legislation to health authorities, notwithstanding the Government's declared intention to apply that legislation in full.
      In response to an undertaking that I gave the Committee, I have brought the amendment forward. It will restrict the power to make regulations that modify the food legislation to modifications that are necessary to make the application of the food legislation to all health authorities more effective. I hope that I have therefore removed the anxiety that Opposition Members properly expressed.
      The hon. Gentleman has raised matters of which he made a great deal in Committee. He asked why the power is required. I refer him to our first sitting in Committee, when I said:
      "Lawyers, from their vast experience of legislation, have seen that difficulties could arise over implementing a provision to remove Crown immunity from food legislation." —[Official Report, Standing Committee E, 29 April 1986; c. 12.]
      As I said in Committee, the power to seek modification has been introduced as a safeguard to provide for the exceptional should unforeseen difficulties arise. The hon. Member for Holborn and St. Pancras asked what are the unforeseen difficulties. If I knew what they were, they would not be unforeseen and we would not be doing this. He knows that such provision is included in other legislation and requires an affirmative resolution of both Houses. If the House accepts amendment No. 6, modifications can be only those to make application of food legislation to all health authorities more effective. I should have thought that that is what all hon. Members want.
      Amendment No. 5 would confine the modification power in clause 1(2)(b) to extending food legislation to health authorities. The clause does that already. We discussed the other amendments generally in Committee. The proposed subsection (2A) is not relevant. It aims to introduce a requirement that certain categories of vermin should be included in the definition of vermin in the Public Health Act 1961, but the Bill is about food legislation and health authority premises, not public health legislation. As for the definition of vermin, adding mites, birds and feral cats is a matter for the food hygiene regulations, not this primary legislation. As I made clear, the inclusion of those categories of vermin in the definition of vermin in these regulations is under close examination, and if appropriate I shall introduce amendments.
      I commend Government amendment No. 6 to the House and advise the House that the other amendments are either redundant or are now covered by the undertakings that I have given.
      Mr. Maxton: Any concession from the Government welcome, and their amendment to insert the words:
      "necessary for its effective operation in relation to them"
      is a step forward, but some of us do not understand why it is necessary to table the amendment in that way.
      Essentially, the Government are saying that present food hygiene is insufficient, yet for years they have argued that it is not necessary to introduce food hygiene regulations into the NHS. In other words, they have gone a step further and said that present legislation is insufficient for the NHS and that regulations to increase the ability of health authorities to deal with food hygiene problems are needed.

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      I accept that the standard of cleanliness in hospitals and other NHS establishments should, if anything, be above the norm for hotels, cafes and factory canteens, but hospital authorities, because they are public bodies, are much more likely to have a high standard of cleanliness than is the private sector, where standards are not normally anything like as high.
      The Bill is wide ranging in terms of the premises that it covers. Earlier the Minister made it clear that the food hygiene regulations did not cover only hospital kitchens, but covered kitchens for any employee's use, whether in nurses' hostels or flats. The new general manager of the Greater Glasgow health board has for six months been living in a four-star hotel at the expense of that health board, and I wonder whether that hotel has been subject to Crown immunity during that period, and whether when he travels on the shuttle between Glasgow and his home, again at the expense of the health board, the galley on the aeroplane is covered by Crown immunity because he is an employee using those facilities under the food regulations. As I read the Bill, those facilities will have been covered by Crown immunity. It is an appalling indictment of a man who is suggesting that £20 million can be cut from the Greater Glasgow health board that during the past five months he has taken about £15,000 in expenses, not to mention his salary.
      We welcome the Government amendment, but still have reservations about the effectiveness of the clause, as it remains open to interpretations which may reduce the food hygiene powers.
      Mr. Dobson: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment made: No. 6, in page 1, line 16, leave out 'appropriate' and insert
      'necessary for its effective operation in relation to them'. —[Mr. Hayhoe.]
      12.15 am
      Mr. Dobson: I beg to move amendment No. 10, in page 1, line 16, at end insert—
      '(c) require every health authority to report annually to the Secretary of State on the action taken to improve food hygiene in such premises, any action remaining outstanding and the estimated costs thereof.'.
      Mr. Deputy Speaker: With this it will be convenient to take amendment No. 11, in page 1, line 16, at end insert—
      '(c) require the Secretary of State to present to Parliament an annual report on food hygiene in health authority premises.'.
      Mr. Dobson: The motto for these amendments is a quotation from Dr. Johnson:
      "Depend upon it, Sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.'
      The obligation on health authorities to produce annual reports to Ministers on hygiene in the kitchens would concentrate their minds wonderfully, and similarly, if the Secretary of State had to publish an annual report to Parliament, it would concentrate his mind too. If I am not digressing too far, I shall read a further quotation from Dr. Johnson, which may be appropriate. It is:
      "Every hour takes away part of the things that please us and perhaps part of our disposition to be pleased."
      If hon. Members feel less and less pleased as time goes by, the doctor knew what he was talking about.
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      The object of the annual reports is to fix deadlines and attract publicity. Deadlines are a great incentive to anyone who has to produce anything. Without deadlines, nothing would get done. It would be extremely salutary if the health authorities had to produce an annual report on this matter. Therefore, we have tabled two amendments. One is to oblige the Minister to report to Parliament, and the other is the logical one that would make it possible for him to produce such a report — an obligation on health authorities to report to him.
      The merits of this are that every year there would have to be an annual report from both the health authorities and the Minister. As a result of that obligation, the health authorities would have to monitor what is going on in the kitchens in their hospitals, as they have manifestly failed to do in the past. They would have to identify all the arrangements that have been made for food hygiene in their kitchens, as many of them have demonstrably failed to do in the past. If the situation was not right, they would have to explain what was wrong.
      The next question is whether the reporting has to be a statutory duty. Can the Minister rely on sending a circular to every health authority and getting a response? The answer is that he cannot. As reported by the Comptroller and Auditor General, when he sent a circular to health authorities about cervical cancer last year, 10 of the health authorities which were asked question on this vital matter failed to reply. As far as we can ascertain, the Secretary of State did not do anything about it, because without issuing an instrument in writing requiring them to reply he could not do anything. Therefore, it is necessary for there to be a statutory duty, which will make the health authorities concentrate on this problem.
      The obligation to produce a report would show who was responsible for anything that was going wrong. It would show who was causing delays, which bureaucrats were arguing with one another and delaying improvements, and who was not providing the necessary money and other resources. I refer to the report of the inquiry into the food poisoning outbreak at Stanley Royd hospital. In many ways the most disturbing part of the whole report is paragraphs 238 to 271. Those 33 paragraphs spell out all the ludicrous machinations and arguments that went on between officials of the Wakefield district health authority, the Yorkshire regional health authority and officials of the DHSS about what would happen to the kitchens at the hospital.
      I shall not delay the House by quoting vast extracts from that report, but it contained innumerable arguments, discussions, changes of plan and indications that the necessary money would not be forthcoming from the Ministry or the regional health authority for essential spending on Stanley Royd hospital.
      All this was going on at a hospital where there had been a salmonella outbreak in 1979. For over three years people argued and did what can only be described as sod-all—if it is in order to use that phrase. As a result, 20 people died. If the health authority had had to produce a report to identify what was going on, if it had had to report to the Ministry and the Minister had had to report to Parliament, somebody outside that place might have noticed what was—or what was not—going on. The obligation to produce an annual report would emphasis to those responsible the seriousness of the matter and its high priority.

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      Ministers have other ways of demonstrating priorities. For example, on privatisation issues Ministers at the DHSS employ more than 60 officials——
      Mr. Tristan Garel-Jones (Lords Commissioner to the Treasury): Not enough.
      Mr. Dobson: So says one of the Trappist Whips. He says "not enough" to further the interests of Government Members who have financial interests in the promotion of private interests in health authorities. They spend much time on that. We understand that when Ministers have meetings with regional health authorities, district health authorities, or the chairs of those bodies, they are constantly——
      Mr. Garel-Jones: Chairs?
      Mr. Dobson: Chairs, yes. Conservatives understand what I mean. If they do not, they are out of date. Ministers attach high priority to privatisation, but they do not attach high priority to other matters. An obligation to produce reports annually would create the necessary publicity and high priority.
      The amendment also requires the health authorities to produce an estimate of the cost of putting things right. The highest estimate for the cost of putting the kitchens right at Stanley Royd hospital was no less than £600,000. The estimated cost of putting right the kitchens at St. Thomas's hospital across the river is 1½ million. If those sums had to be spelt out, it would become clear who was responsible for providing—or not providing—the funds.
      The amendment would reduce the element of irresponsibility that exists within the DHSS and the National Health Service. Ministers say that they have an intention, but that they cannot interfere with the priorities determined by health authorities.
      I am sorry that the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) has left the Chamber, because it is important to emphasise the extent to which cleanliness and good food hygiene in health authority kitchens depend upon spending and hardware. The environmental health officers found that in 85 per cent. of the places that they considered to be substandard the major problems were substandard premises and general requirements for equipment. Food handlers were responsible for 15 per cent. of the problems. There has been a great effort both at Stanley Royd and other places to blame the staff, who work in lousy conditions, with lousy and unsatisfactory equipment, and not enough money. There has been a great tendency to blame them —the people at the bottom of the pile. Another reason for having an annual report is that the responsibilities of those a bit further up the pile, or pyramid, would be identified.
      We are asking the health authorities to report to the Minister, but we do not think that it is satisfactory only for health authorities to report to the Minister. Ministers receive many reports which they sit on and hide. If reports are embarrassing, they ignore them. The last thing that they do— unless there is a statutory obligation to do so — is disclose them. Therefore, we believe that if the Minister receives reports annually, the House should get reports annually, setting out what has been happening. We want these things out in the open, and we want a comprehensive national report.
      Other reports have been produced on the state of kitchens in the National Health Service by a number of
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      trade unions, the Institution of Environmental Health Officers and the British Pest Control Association. It would be better if we did not have to rely on what might be described as the private initiatives—however welcome they may be — of such professional organisations. We should not have to rely on them. We should be able to rely on the Government annually——
      Mr. Kennedy: I agree with the thrust of the hon. Gentleman's argument. He said that he wants a comprehensive national report, as it were. His amendments Nos. 10 and 11 specifically refer to "health authority". Other parts of the Bill talk about. in the Scottish context, "health boards". I assume that his amendments would extend to Scottish health boards as well as to health authorities in England and Wales. Can the hon. Gentleman clarify that?
      Mr. Dobson: My understanding is that the part of the clause that we are considering refers to "health authorities" but, by some wild extension of the way in which we would go on in this place, that turns into "health boards" when it refers to Scotland. In my view, the Scottish health boards should prepare such reports and should submit their reports, as they would in the normal course of events, to the Secretary of State for Scotland. I understand that the Bill provides for that. Certainly that is what our amendments are intended to provide for, If passed, they would do so without any additional wording to cover Scotland.
      We are in favour of such reports. There are a number of examples of Ministers having to report to the House. They must present a report to Parliament, under the Chronically Sick and Disabled Persons Act, on certain aspects of the implementation and progress in implementation of the Act. The Minister of Agriculture Fisheries and Food must report on the intervention board for agricultural products, and so on.
      I add those examples in an effort to convince even the most conservative of Members that there are sound precedents for our proposal. I hope that even if the Under-Secretary of State cannot accept the exact wording of our proposals, he will accept the principle that lies behind them and our desire to improve performance and to increase publicity. [Interruption] The hon. Member for Crawley (Mr. Soames) is having a bit of a moan. I hope that even if the Under-Secretary of State cannot accept the amendments, he will accept the principle and introduce in the other place amendments along these lines.
      12.30 am
      Mr. Kennedy: I am glad that at this late hour the debate is back on track, that those Labour Back Benchers who were released from their cages are once again chained up, and that we are again discussing the Bill more seriously.
      Mr. Corbyn: Do not be personal.
      Mr. Kennedy: I was not referring to the hon. Gentleman. [Interruption.] The hon. Member for Crawley (Mr. Soames) should not be too delighted at such a reference. One side is as bad as the other. Last week's events were no better than some of the incidents this afternoon.
      I should like to support the amendments and return to a point that I raised in Committee with the Minister. Perhaps the Parliamentary Under-Secretary of State for Scotland with responsibility for health, the hon. Member

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      for Argyll and Bute (Mr. MacKay), will refer to the matter which I raised then and which was not answered satisfactorily. It is an important and worthwhile matter, and I trust that the response will be positive.
      The Opposition have argued that the legislation will have serious financial implications for the health authorities and for the health boards in Scotland. The Government have denied that, as the explanatory financial memorandum makes clear. They say that there are no such significant implications. Therefore, I ask the government to allow the health authorities and the health boards north of the border to submit to the Department of Health and Social Security and to the Scottish Home and Health Department a breakdown of the costs that may be incurred to meet the demands imposed by the legislation. That seems to be a reasonable request. It should not cause the Government any discomfort, because they have argued consistently that the costs associated with the Bill will be zero. Presumably, if they are confident about that, they will not face major bills at the Elephant and Castle or in Edinburgh in-the Scottish Home and Health Department.
      The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): At St. Andrew's House.
      Mr. Kennedy: I thank the hon. Gentleman. In that case, they will not face major bills from health authorities or the health boards to meet the demands imposed by the legislation. I hope that the Minister, who did not give a clear answer to my request in Committee, will do so tonight. I shall pay careful attention to him when he replies, as I always do. I hope that we shall be given an unequivocal reply one way or the other.
      I support the comments of the hon. Member for Holborn and St. Pancras (Mr. Dobson) on amendments Nos. 10 and 11. If the legislation is to be as effective as possible, it is sensible to measure annually the improvements that flow from it to the different parts of the country. Therefore, I support the encouragement of health authorities to take that type of action. I agree with the hon. Gentleman that it is not sufficient for the information to be transferred to Ministers, never again to see the light of day, or for it to be transferred to whoever Mr. Victor Paige's successor may be, without it being made available to the public. The information should be made available to Parliament so that hon. Members can judge, on a local basis, and parties can judge, on a political basis, the progress, or lack of it, that is being made towards full implementation of the Bill's provisions.
      I support the amendments and again put my specific inquiry to the Minister, in the hope that he will give a constructive response.
      Mr. Corbyn: I shall be brief, because I hope that there will be an opportunity to debate the important matters that are provided for later in the Bill.
      I support the amendment that has been moved by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), and I hope that the House will see fit to agree to it. I should like the Minister to state clearly the cost implications of the envisaged changes. The removal of Crown immunity would, I hope, result in much closer examination of hygiene standards in Health Service catering departments. Implicit in the removal of Crown immunity is cost. There may be additional staff costs, or
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      new equipment may involve additional cost. In the longer term, I think that significant changes in the design of Health Service catering departments will involve additional cost.
      Many of the hygiene problems in the new NHS hospitals are to be found in the design of the buildings. They have nothing to do with hospital administration. There is scope for a serious research project into the problem of vermin in catering departments because of hospital design. Reference was made earlier to cockroaches having absolutely perfect breeding grounds in warm air central heating systems. Those who have to maintain such buildings say that when cockroaches start to breed in warm air central heating systems it is extremely difficult to get rid of them.
      I hope the Minister will accept that it is sensible that an annual report should be prepared. The Minister should also take account of the curious concept of the Cinderella services. I have never quite understood what a Cinderella service is, apart from the fact that it appears to require money, over and above everything else, during the year for which a health authority is considering the distribution of its budget. The Cinderella services tend to change, depending upon the particular needs that are identified at the time. Improvements in the hygiene regulations and in the administration of hygiene in NHS kitchens are particularly important, and the Minister should consider the inclusion of such a requirement.
      Much has been made of the report into the outbreak of food poisoning at the Stanley Royd hospital. My hon. Friend the Member for Holborn and St. Pancras was right to refer to the original outbreak of salmonella poisoning and then to the very serious outbreak some years later which tragically resulted in a number of deaths. That underlines more than anything the need for health authorities, the Minister and, of course, Parliament to become much more aware of the needs of NHS hospital catering departments.
      If we do not ensure that not only is Crown immunity totally removed but that there is some sort of annual reporting system, tragically, what happened at the Stanley Royd hospital could happen at another hospital. It could happen in an old building like the Stanley Royd hospital or in one of the modern hospitals, such as those in London and other big cities. I hope the Minister will recognise that and accept the amendment, which would give Parliament year in, year out, an opportunity to debate the issues. That would put at rest many of the anxieties not only of people who, tragically, have relatives detained in hospitals, but of Health Service employees by ensuring that they are not wrongly maligned for unhygienic catering and the resultant food poisoning.
      All the reports produced by the trade unions and professional bodies and other people about Health Service catering are well intentioned and timely. Their authors should be congratulated on producing them and on the efforts they have put into them. It is not good enough for us to rely on voluntary bodies, however good they are, to keep us up to date and up to scratch about Health Service catering. It is a matter of public concern, and one way to overcome that concern is by the production of an annual report, such as that outlined by my hon. Friend the Member for Holborn and St. Pancras.
      Mr. Whitney: The hon. Member for Holborn and St. Pancras (Mr. Dobson) began his speech with a couple of

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      quotations that he raided from a bumper fun book of quotations from Dr. Johnson. If it were anyone less affable than the lion. Gentleman, I might recall for the benefit of the House the quotation by Dr. Johnson about the talking dog —it was remarkable, not that he talked well, but that he talked at all.
      The hon. Gentleman spoke about the "ludicrous machinations and arguments" that went on in the extremely sad affair at the Stanley Royd hospital. I am delighted to have the hon. Gentleman's support and endorsement, which I take by inference, for the system of general management which we have introduced and which we are confident will avoid precisely the "ludicrous machinations and arguments" which caused the difficult and regrettable trouble at the Stanley Royd hospital.
      Mr. Dobson: If there is another salmonella outbreak in a hospital with a general manager, will the Minister sack the manager?
      Mr. Whitney: That is a hypothetical question that I shall be happy to consider should the need arise.
      I hope that the hon. Gentleman will consider the situation that the Stanley Royd hospital inquiry revealed and address his mind to the possibility that, given the clear acceptance of responsibility inherent in the general manager system, it would have been highly unlikely, to put it at its lowest, for that sort of thing to occur had such a system existed at the Stanley Royd hospital.
      The hon. Member for Ross. Cromarty and Skye (Mr. Kennedy) reminds one of another quotation by Dr. Johnson, but I had better avoid that, because to cite it might lose us votes in Scotland.
      The hon. Member for Islington, North (Mr. Corbyn) spoke about additional costs that might be incurred. I remind the House not only of the increased real expenditure that the Government have already devoted to the National Health Service, and to which I have referred at least once already in the course of an earlier debate, but of the 6·7 per cent. increase in resources that is being made available to the Health Service this year. That is set against inflation, which is about 3 per cent. The savings that are being achieved by the cost improvement programme an by the sale of the estate, and the savings that are being achieved by the competitive tendering programme, offer a fruitful source of funding for any necessary bringing up to standard should that be necessary in any health authority or in any Health Service unit. It has always been accepted that despite Crown immunity the standards that we expect should nevertheless be observed.
      12.45 am
      Mr. Corbyn: I thank the Minister for giving way. Will he for one moment leave the fairytale land in which he lives about increased resources for the NHS and answer the question in the debate? When a report is made which clearly shows that more money is needed in NHS catering departments to overcome the difficulties, will the Department provide the funds and not take money from the patient care budget, as it has done with every other thing in the NHS?
      Mr. Whitney: If the hon. Gentleman wishes to talk about reality. I remind him again of the reality of a 24 per cent. increase in spending real terms since 1979, of a 6·7 per cent. increase this year against 3 per cent. inflation of about £150 million available in the next year and a similar
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      amount that will be made available from the sale of real estate, and the fact that there is also the additional funding that will be available from competitive tendering. That is the reality.
      Mr. Maxton rose——
      Mr. Whitney: I am answering the hon. Gentleman's hon. Friend. If the hon. Member for Islington, North (Mr. Corbyn) wants a little reality, let him read carefully tomorrow what I have said in Hansard and he may learn a little about the funding of the NHS.
      Mr. Maxton rose——
      Mr. Whitney: No, I shall not give way. Sit down.
      The hon. Members for Holborn and St. Pancras and for Ross, Cromarty and Skye—we do not know whether or not the Liberals will join in this these days—are offering a whole bundle of paper which is to be shipped yet again into the Vote Office and the Library in the form of annual reports to Parliament from some 191 health authorities. That is a completely unnecessary procedure, set against the fact that the purpose of clause 1 is to apply the food legislation, including its enforcement provisions, to health authorities, so that their premises will he inspected by environmental health officers who will be able to require improvements to comply with the legislation, and, if necessary, will be able to prosecute and, indeed, to seek closure of premises. So in future any health authority which has failed to follow our long-established policy of complying on a voluntary basis with the legislation will, once the Bill comes into effect, be obliged by the force of law to comply or face the consequences.
      When my right hon. Friend announced the Government's intention to seek to remove Crown immunity under the food legislation from the NHS, he said that we would also be revising the central guidance in the light of the Stanley Royd report and other developments. We are now consulting other interested bodies, such as the Institution of Environmental Health Officers, on a draft of this guidance. This makes it clear that district health authorities should receive each year, in the public part of their meetings, a summary of EHO inspection reports. It also asks regional general managers to see that food hygiene standards are monitored in their districts.
      This guidance, along with the force of law applied through the enactment of clause 1, will ensure good food hygiene standards in all our hospitals. The Government see no need to introduce the large volumes of extra paper which would be the main effect of the statutory reports envisaged by these amendments supported by the Labour and Social Democratic parties. I urge the House to reject the amendments.
      Amendment negatived.
      Mr. John MacKay: I beg to move amendment No. 15, in page 2, line 26, after 'means', insert
      'the Milk Dairies (Scotland) Act 1914 to 1949,'.
      This technical amendment is required to bring the statutory provisions relating to milk in Scotland within the effect of clause 1. Legislation in Scotland on milk is largely separate from the main provision on food—the Food and Drugs (Scotland) Act 1956 —and this amendment completes the references to Scottish provisions relating to food.
      Mr. Maxton: I rise merely to welcome the Scottish Minister to the debate. This is the first time that he has

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      been in the Chamber. [Interruption.] The hon. Gentleman managed to dash in on the previous occasion that I spoke —he was obviously told by a Government Whip that I was attacking him for not being present—but he has hardly been present. Yet the Bill covers the whole of Scotland.
      I assume that there will have to be a drafting amendment to the Government amendment, because I assume that it should refer to the "Acts" of 1914 to 1949 and not just the "Act". No doubt that will be put right.
      I also assume that the Minister has got the amendment right—though it will be unusual if he has. However, I intervene merely to welcome the Minister on one of his rare appearances in our debates on the Bill.
      Amendment agreed to.

    Clause 2

      PHARMACEUTICAL SERVICES
      Mr. Dobson: I beg to move amendment No. 20, in page 3, line 20, at end insert
      'and

      (iii) the times at which he will undertake to provide those services.'.

      Mr. Deputy Speaker: With this we may take the following amendments: No. 24, in page 3, line 47, at end insert—
      '(e) for the Committee to consult local public transport undertakings about the hours of opening of the premises under consideration.'.
      No. 25, in page 3, line 47, at end insert
      '(e) to ensure that every neighbourhood has reasonable access to the services of a pharmacist; that such services be advertised in such manner of language to be easily understood and that they be available at specific times outside normal trading hours.'.
      Mr. Dobson: The main aim of amendment No. 24 is to ensure that the provision of pharmaceutical services and decisions about the services provided are not taken in isolation from consideration of the transport facilities that are available to get people to and from chemists' shops when they want to get a prescription dispensed.
      Many people do not have their own transport and have to rely on public transport. The timing and routes of buses are often not convenient and not related to the location or opening hours of chemists' shops. That makes it difficult for people who are sick or are nursing sick relatives or friends to get drugs that they require.
      We propose in amendment No. 24 that before deciding whether to accept a proposal for a chemist's shop in an area the committee responsible for making the decision should consult local public transport undertakings on the opening hours of the premises. It may be possible to get the people running the shop to vary their hours or to get the people running the transport system to vary their timings so that buses are run for people who do not have private transport. At some times of the day, those people are the majority.
      My hon. Friend the Member for Islington, North (Mr. Corbyn) will no doubt explain his amendment No. 25, which proposes that
      "every neighbourhood has reasonable access to the services of a pharmacist"
      132
      and that services should be made known in languages that are understood by people whose mother tongue is not English.
      We argued in Committee that it would be useful for the committee that decides on applications to open chemists' shops to consider matters such as opening hours and ease of access and use of local pharmacies. We are in favour of people making better and more extensive use of their local pharmacies, and that is what the amendments are intended to secure.
      As I am always willing to admit, there may be something wrong with the detailed drafting of the amendments. If there is, we should be happy for the Minister to accept the basic proposition and to introduce a more appropriately worded amendment in the House of Lords which will do better the job that we want done. I can see no reason why he should not accept the general drift of the amendments.
      Mr. Corbyn: I support my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). When the National Health Service was set up, controls on pharmacies were exercised through family practitioner committees. Later, those controls were made more powerful, and now the Government wish to introduce more requirements for the opening of pharmacies.
      Amendment No. 25 places a requirement on the Health Service to ensure reasonable access to the services of a pharmacist wherever people live. Although I can understand the argument that we should stop too many pharmacists opening shops in one high street or shopping area, it is also important to ensure that there are enough pharmacies in each neighbourhood. Increasingly in rural areas the idea of local shops is disappearing with the development of hypermarkets and motorised shopping centres. Village shops are also disappearing, and in the suburbs of small towns pharmacies tend to disappear altogether. It is important to ensure that pharmacies open in places which it is practical for people from every neighbourhood to reach.
      A similar, although more complicated, problem arises in urban areas. Shopping centres tend to suffer from the growth of larger multiple shopping centres some distance from town, so urban areas lose many shops, especially pharmacies, which are needed by those who have difficulty in getting around. My hon. Friend mentioned the need to consider public transport facilities.
      The committees involved must also ensure that the opening hours of pharmacies are well-advertised and that they open outside normal trading hours. Unfortunately, people do not require the services of a pharmacist only during office hours. Additionally—this applies to some areas more than others, but especially in my constituency—there is a need for multilingual advertising of such services. In my constituency, 41 languages are registered or spoken. Some are more dominant than others, including several African languages, Hindi, Urdu, Bengali, Greek and Turkish. At least six languages are commonly spoken, apart from English. It would be appropriate for the local committee to require that pharmacists' services be advertised in the languages commonly spoken in the locality. Elderly people from the subcontinent and other areas often have to ask children to vist the pharmacy and explain what is wanted or obtain the necessary information.

      133
      The suggestions in amendment No. 25 would change the Bill's approach from the entirely permissive to the more compulsory. They would ensure that pharmacies were located in reach of everyone, that they were open at convenient times and, importantly for areas such as Islington, that the services were advertised multilingually to ensure that no one is left out of this aspect of the Health Service.
      1 am
      Mrs. Clwyd: I should like briefly to support the comments of my hon. Friends. I was a member of the Royal Commission on the Health Service, and among the subjects that we dealt with were pharmaceutical services, and particularly access. Many of those who submitted evidence to us about pharmacists were concerned about the reduction in the number of pharmacists that has occurred in recent years. Thus, the points made by my hon. Friends are very relevant.
      Although the number of trained pharmacists and those in training has been rising, the number of pharmacies in the community has fallen by more than a quarter since 1963. Most of the closures have been in urban areas, but their effect has been felt particularly in rural areas, and was the subject of comment by several community healthcouncils. For example, Bath CHC told us that
      "the increasing trend for small pharmacies to close is giving more and more cause for concern, particularly in the small and rural communities where the alternative service may be some distance away."
      If that trend continues, the difficulties experienced at present by some of those who try to get to a pharmacy are likely to become more widespread. I should be grateful if the Minister could give us some assurances on that point.
      Although the contract has in general received support, opposition has come, for example, from the recently formed British Pharmacists Association. It claims that at least 1,400 small chemists shops will close when the contract is first introduced, and that 3,000 could close in the first year. I should be interested to know whether the Minister has received any representations from CHCs, which would be the first to report on any concern about access voiced by patients. I have heard about the reaction of professional bodies to the new contract, but little publicity has been given to what potential patients think about reducing access to pharmacies as a result of the contract. Perhaps the Minister could give some assurances on that point.
      Mr. Hayhoe: I shall begin by responding to the comments of the hon. Member for Cynon Valley (Mrs. Clwyd). I think that her remarks were more relevant to amendment No. 17, which was not moved. The opportunity for dealing with the opposition to the contract which has been expressed in some quarters has passed. Consequently, I shall confine my remarks to amendment Nos. 20 and 25, which have been spoken to by the hon. Member for Holborn and St. Pancras (Mr. Dobson) and his hon. Friend the Member for Islington, North (Mr. Corbyn).
      Amendment No. 20——
      Mrs. Clwyd: Will the right hon. Gentleman give way?
      Mr. Hayhoe: No. Let me deal with the amendments that have been moved. Amendment No. 20——
      Mrs. Clwyd: Will the right hon. Gentleman give way?
      Mr. Hayhoe: I do not accept amendment No. 20——
      Mrs. Clwyd: On a point of order, Mr. Deputy Speaker. The Minister said that my point was irrelevant to the amendment, but it is very relevant to it. I refer to amendment No. 25, which seeks to ensure that every neighbourhood has reasonable access to the services of a pharmacist. That is precisely the point that I was making.
      Mr. Deputy Speaker: (Mr, Harold Walker): That is riot a matter for me.
      Mr. Hayhoe: I shall say something about amendment No. 25 in a moment. I said that that speech seemed to be more relevant to amendment No. 17. and particularly the reference that the hon. Lady made to the association which opposes the contract. That would have required the deletion of the whole of the clause. However, I shall return to that point.
      I am broadly sympathetic to the idea behind all of' the amendments, which are concerned with trying to ensure a better service for the patient. I hope that that is common ground among us, and, indeed, it was certainly reflected in all our discussions in Committee.
      The amendments are unnecessary as part of the primary legislation. With respect to amendment No. 20, there is already adequate provision on hours of service to ensure that patients receive an adequate service when they require it. Regulations state that the FPCs, after consultation with the local pharmaceutical committee, should prepare schemes to secure that one or more pharmacies should, at all reasonable times, be open. Any such scheme should specify the days and hours during which such pharmacies would be open, and all FPCs operate model hours of service schemes. Most of us know from our constituencies how effectively they work and how the information is made widely available.
      On amendment No. 24, FPCs are responsible for planning local primary care services, which is a matter for local judgment. If the hon. Member for Holborn and St. Pancras is concerned that the draft guidance is not sufficiently specific, I shall be glad to look at the matter further when we reconsider the guidance to FPCs following the passage of this legislation. I hope that the hon. Gentleman is satisfied with that assurance.
      That is broadly what I wish to say to the hon. Member for Islington, North about amendment No. 25. I agree that every neighbourhood should have reasonable access to the services of a pharmacist. Indeed, the underlying aim of the new arrangements for allocating the NHS pharmacy contracts is that patients should receive an adequate service that is not wasteful of NHS resources. That appeared to be a matter of common ground during our detailed discussions in Committee. Of course, the regulations cannot ensure that. All that we can do is provide the framework within which the FPCs can operate to obtain the best arrangements possible. Obviously, services should be advertised so that they are easily understood and give specific times for when they are available outside normal trading hours.
      As I have said, I do not think that these matters are for this primary legislation. The need to consider the maintenance of out-of-hours services when considering new applications for contracts should, of course, be taken into account by FPCs. I assure the House that we shall emphasise that requirement in the guidance to FPCs.

      135
      Although we are broadly sympathetic to the points that have been raised, I do not believe that they are appropriate for primary legislation. I am prepared to consider both what has been said tonight and any written representations before we issue the detailed guidance.
      Mr. Corbyn: Can the Minister make it clear that while it is obvious that the House cannot legislate for every corner-shop pharmacist, he will take on board the necessity of ensuring that a pharmacist is available in every community? Secondly, the right hon. Gentleman has not answered the point about multilingual communities and the need to ensure that the services are clearly advertised in the languages of minority ethnic communities. There is a serious problem with the inability of some people to communicate with their pharmacist when obtaining medicines because of the of the enormous language difficulty. It is important that that point is included in the guidelines.
      Mr. Hayhoe: The question of ensuring that that happens is not appropriate to this legislation. However, in the guidance to FPCs we shall seek to give positive guidance aimed at the objectives of proper coverage to suit the patients and details of out-of-hours service for local residents. That should cover the point of that information being given, as far as is practicable, in languages that as many of the local population as possible will understand.
      Amendment negatived.
      Dr. Marek: I beg to move amendment No. 21, in page 3, line 36, leave out 'or some of the services'.
      Mr. Deputy Speaker: With this we shall take Government amendments Nos. 26, 27 and 34 and amendment No. 36, in page 5, line 17, leave out 'or some of the services'.
      Dr. Marek: I shall be brief as the Government amendments go some way towards meeting the comments and criticisms which were expressed in Committee. I shall be interested to hear what the Minister has to say.
      Mr. Whitney: As the hon. Member for Wrexham (Dr. Marek) has said, Government amendments Nos. 26, 27 and 34 go some way towards meeting the matters that he raised in Committee, during which we had a valuable and constructive discussion about whether family practitioner committees and health boards could accept an application in part only. For example, if an applicant said that he wished to supply three types of service and only two types were necessary, could the FPC accept the application only in respect of the services needed? It will probably be common ground that FPCs should have the right to make an appropriate judgment.
      Clause 2 does not expressly permit FPCs to adopt a selective approach. Therefore, we gave a clear undertaking to consider the matter and, indeed, we have done so. The amendment makes it clear that FPCs have the right to be selective when considering applications for new contracts. Only these services needed locally would then be selected. As FPC would not be forced to accept an application because only some of the services on offer were required. Equally, it would not be forced to refuse an application where all but one type of service was necessary and desirable.
      136
      I am grateful to the hon. Member for Wrexham for tabling the original amendment in Committee and to my hon. Friend the Member for Chislehurst (Mr. Sims) for his contribution to the discussion. I hope that hon. Members on both sides of the House will accept the Government amendments.
      Dr. Marek: I beg to ask leave to withdraw the amendment.
      Amendment, by leave withdrawn.
      Mr. Dobson: I beg to move amendment No. 23, in page 3, line 47, at end insert—
      "(e) for the Committee to consult the Community Health Council for the area concerned before reaching any decision on the establishment continuance, or closure of a pharmacy.'.
      The purpose of the amendment is fairly clear in its wording. That is because I am incapable of writing anything that is not simple. The proposition is that the Committee considering an application for the
      "establishment continuance, or closure of a pharmacy"
      should, before reaching its decision, consult the community health council of the area concerned. That seems to be a sensible, simple and sound proposition, and no doubt the Government will be urging the House to reject it.
      Community health councils are consulted — not as often or as carefully as they should be, and having been consulted their views are often ignored—over hospital closures and variations in services by the hospital service and the community health service, and it seems that they should be consulted over something as important to a community as the
      "establishment continuance, or closure of a pharmacy".
      If a pharmacy is removed from a locality and it is the only one in the area, the local community suffers considerable inconvenience, and the difficulty and inconvenience of getting drugs dispensed may put some people in danger. It is a sensible and reasonable requirement that the committee considering the
      "establishment continuance, or closure of a pharmacy"
      should have to consider the local community health council, which to a limited extent represents the views of consumers of health services in the locality.
      1.15 am
      Mr. Corbyn: This is an important amendment, which I hope the Minister will take seriously.
      One of the many problems in the Health Service is its fundamentally undemocratic nature. Health authorities are fairly undemocratic, and family practitioner committees are even less democratic than health authorities. Sometimes they take decisions without any apparent rhyme or reason. Until we have a Labour Government who will ensure that there is a much more democratic Health Service and an end to the false division between health authorities and family practitioner committees, the least that we can do is require that when the allocation of pharmacies is made, and when the closing down or reallocaton of pharmacies is considered, there is some public consultation. That already happens with doctors' surgeries. Because that happens, there has been a serious debate and public concern about the problem of elderly family practitioners in inner urban areas.
      The same public concern has not been voiced about the shortage of pharmacies, simply because there is no means

      137
      to voice it until the pharmacies have closed and gone, and been turned into newsagents, betting shops, or estate agents, as so often happens——
      Mr. Dobson: Or massage parlours.
      Mr. Corbyn: Indeed.
      It is important that we have some form of public consultation. While community health councils do a valuable job and attempt to represent the views of people in their community, in addition to that there should be an opportunity, perhaps through the community health councils, for local authorities and other interested groups to make comments. It is a serious problem, particularly in a community with a large number of elderly people, if a pharmacy closes down and there is nowhere nearby or convenient where they can go to obtain medicines or make other purchases.
      I hope that the Minister will ensure that there is consultation, because by that very process we could make sure that the family practitioner committees paid as much attention to the provision of pharmacies as they now do to the allocation of doctors' practices.
      Mrs. Clwyd: I should like to reinforce what my hon. Friends have said. As a former member of a community health council, I know what a valuable voice those councils are for consumers in the community, despite the lack of resources allocated to them by the Government, who set up community health councils, but have given them no teeth. We argued for that in the Royal Commission on the National Health Service. We believe that more resources should be given to community health councils so that they can represent the consumer more adequately. That has not been done, but they still represent the only authentic voice of the community on Health Service matters, although they are able to do so only in a rather inadequate way because of the lack of resources.
      I am pleased that the Secretary of State for Wales is here. He knows that the Health Service in Wales is even less democratic than in England, because the powers that were given to the regional health authority were removed by him to the Welsh Office, where Ministers are not really responsible for the day-to-day running of the Health Service because they have such a vast variety of subjects for which they are responsible and it is civil servants who take the major decisions on Health Service matters that affect consumers in Wales. Thus it is even more important that the voices of the community health councils are listened to in Wales than in the rest of Britain, perhaps, because of the less democratic nature of the Health Service there.
      The Minister did not answer me when I asked him whether he had had any representations from community health councils on the new pharmacy contract. If he has not had them, he should ask for them. I am sure that they will have views. They gave views to the Royal Commission on the National Health Service. I am sure that they would do so again if asked. It is important that the Government hear them. if they think that services to patients are being run down by the closing of pharmacies, which has been predicted by one of the professional organisations, it is only right and proper that their voice should he heard. The views of community health councils are important. If there
      138
      are such organisations, they should be used as the authentic voice of the consumer. I support this important amendment.
      Mr. Campbell-Savours: I shall be brief, but I feel strongly about this matter.
      I have some experience of the inadequacies of family practitioner committees. A surgery in my constituency was closed without any member of the public knowing what was happening. It was closed by a resolution carried by a FPC in Carlisle.
      Mr. Deputy Speaker: Order. The amendment deals with the establishment, continuation or closure of a pharmacy.
      Mr. Campbell-Savours: That is absolutely right.
      Mr. Deputy Speaker: I hope that the hon. Gentleman will stick to it.
      Mr. Campbell-Savours: That is precisely what I am doing. I am trying to draw attention to the fact that family practitioner committees are not competent to act on their own when the public interest is at stake. I am giving an example of one which failed in its public duty. The story that I gave shows their inadequacies. They should be required to consult community health councils, which are closer to the community.
      In the case to which I referred there was a clear difference of opinion between the community health council and the family practitioner committee. Privately and, to some extent, publicly, the council said that it felt that the public had not been consulted and that the FPC had dealt with the matter inadequately. Pharmacies are an important part of local Health Service provision. There must be public consultation in every way, and there is no better means of doing that than consulting community health councils. I hope that the House will carry this important amendment.
      Mr. Whitney: Such is the generosity of the Government that, even at this late hour, I should like to say that we have considerable sympathy with much of the reasoning behind the amendment. The draft guidance to family practitioner committees makes it clear that, when an application for a new contract is received the FPC will notify local community health councils. Those CHCs will have the right to make representations on the application to the FPC. CHCs will also be notified about applications for minor relocations at NHS pharmacies. It is the Government's intention to confirm these arrangements in regulations but, as the Secretary of State for Social Services already has the powers to make such regulations, the Government do not consider that extra powers in this Bill are necessary.
      The hon. Member for Cynon Valley (Mrs. Clwyd) asked about the number of pharmacies. I am happy to be able to say that the number has risen and that, to the six months ending 31 December 1985, no fewer than 215 opened, 13 of which were in Wales. The hon. Lady also asked about representations from the CHCs on the new pharmacy contract. I am advised that we had no such representations.
      In the great majority of cases, closure is decided by the contractor involved — the matter is not within the control of FPCs. There would, therefore, be little point in the FPCs consulting community health councils about something that they do not control.
      Mr. Corbyn rose——
      Mr. Dobson: The Minister must bear in mind the fact that the Bill will offer financial incentives to some pharmacies to close, so there is a direct responsibility. The Government, with FPC involvement, will induce pharmacies to close. In those circumstances, FPCs have a function in regard to a proposed closure.
      Mr. Whitney: That would be a judgment for the FPC. The Opposition amendment proposes that all closures are subject to consultation with the CHC. That is not within the gift of the FPC, given that in the majority of the cases closures are decided by the contractor.
      Mr. Corbyn: This is the heart of the problem. The FPCs have a power to ensure that there is a doctor's surgery in every area. While Opposition Members have many criticisms of the way in which FPCs operate, it is right and proper that they should ensure that that is the case. The fact that they do not have the equivalent power for pharmacies is no reason for not passing the amendment and every reason to amend the primary legislation to ensure that FPCs, in a more democratised form, have control over pharmacies to ensure pharmacy services are provided in every community.
      Mr. Whitney: The provisions go a long way towards ensuring that there is wide and appropriate coverage of pharmacies. The figures that I gave for the past six months demonstrate adequately that the coverage of pharmacies is good and increasing. I invite the House to reject the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 9, Noes 103.

      Division No. 216]

      [1.28 am

      AYES

      Clwyd, Mrs Ann

      Skinner, Dennis

      Cocks, Rt Hon M. (Bristol S)

      Wallace, James

      Corbyn, Jeremy

      Hughes, Simon (Southwark)

      Tellers for the Ayes:

      Kennedy, Charles

      Mr. D. N. Campbell-Savours and Mr. Bob Clay.

      Lewis, Terence (Worsley)

      Pike, Peter

      NOES

      Alexander, Richard

      Favell, Anthony

      Amess, David

      Forsyth, Michael (Stirling)

      Arnold, Tom

      Forth, Eric

      Ashby, David

      Fowler, Rt Hon Norman

      Baker, Nicholas (Dorset N)

      Franks, Cecil

      Biggs-Davison, Sir John

      Freeman, Roger

      Blaker, Rt Hon Sir Peter

      Gale, Roger

      Boscawen, Hon Robert

      Galley, Roy

      Bottomley, Peter

      Garel-Jones, Tristan

      Bowden, Gerald (Dulwich)

      Gorst, John

      Bright, Graham

      Gregory, Conal

      Brinton, Tim

      Griffiths, Peter (Portsm'th N)

      Brooke, Hon Peter

      Hamilton, Hon A. (Epsom)

      Bruinvels, Peter

      Hamilton, Neil (Tatton)

      Budgen, Nick

      Hargreaves, Kenneth

      Burt, Alistair

      Harris, David

      Butterfill, John

      Hayes, J.

      Chope, Christopher

      Hayhoe, Rt Hon Barney

      Clarke, Rt Hon K. (Rushcliffe)

      Hayward, Robert

      Cope, John

      Heathcoat-Amory, David

      Couchman, James

      Henderson, Barry

      Currie, Mrs Edwina

      Hind, Kenneth

      Dickens, Geoftrey

      Howarth, Gerald (Cannock)

      Douglas-Hamilton, Lord J.

      Hubbard-Miles, Peter

      Dover, Den

      Hunt, David (Wirral W)

      Durant, Tony

      Jenkin, Rt Hon Patrick

      Edwards, Rt Hon N. (P'broke)

      Jessel, Toby

      Fairbairn, Nicholas

      Jones, Gwilym (Cardiff N)

      Fallon, Michael

      Jones, Robert (Herts W)

      140

      Kellett-Bowman, Mrs Elaine

      Nicholls, Patrick

      Key, Robert

      Page, Richard (Herts SW)

      Lamont, Norman

      Percival, Rt Hon Sir Ian

      Lang, Ian

      Powley, John

      Latham, Michael

      Raffan, Keith

      Lilley, Peter

      Rathbone, Tim

      Lloyd, Peter (Fareham)

      Ridley, Rt Hon Nicholas

      Lord, Michael

      Sackville, Hon Thomas

      Lyell, Nicholas

      Sainsbury, Hon Timothy

      McCurley, Mrs Anna

      Sayeed, Jonathan

      MacGregor, Rt Hon John

      Shaw, Sir Michael (Scarb')

      MacKay, John (Argyll & Bute)

      Skeet, Sir Trevor

      McLoughlin, Patrick

      Squire, Robin

      Major, John

      Taylor, Teddy (S'end E)

      Marland, Paul

      Thompson, Patrick (N'ich N)

      Mather, Carol

      Thurnham, Peter

      Maude, Hon Francis

      Wakeham, Rt Hon John

      Maxwell-Hyslop, Robin

      Walden, George

      Mayhew, Sir Patrick

      Whitney, Raymond

      Merchant, Piers

      Yeo, Tim

      Miller, Hal (B'grove)

      Mills, Iain (Meriden)

      Tellers for the Noes:

      Mitchell, David (Hants NW)

      Mr. Gerald Malone and Mr. Mark Lennox-Boyd.

      Moynihan, Hon C.

      Newton, Tony

      1.30 am
      Question accordingly negatived.
      Amendments made: No. 26, in page 4, line 1 at end insert—
      '( ) that an application to a Committee may be granted in respect of some only of the services specified in it;'.
      No. 27, in page 4, line 8 at beginning insert 'that'. [Mr. Whitney.]
      Mr. Dobson: I beg to move amendment No. 32, in page 4, line 23 after 'appeal', insert
      'to a committee of such persons as should be appointed by the Secretary of State'.
      Mr. Deputy Speaker: With this it will be convenient to take the following amendments:
      No. 33 in page 4, line 24 at end insert
      'on the ground of manifest unreasonableness at the time of the relevant decision and on no other ground.'.
      No. 42, in page 5, line 46 at end insert
      'on the ground of manifest unreasonableness at the time of the relevant decision and on no other ground.'.
      Mr. Dobson: I shall be brief and give the extra corps the opportunity to go home.
      The purpose of the amendments is to provide a national appeals machinery against the possibility of a family practitioner committee turning down an application. Doubt has been expressed by the pharmaceutical profession — or trade — because pharmacists are not happy about existing pharmacists sitting on a committee and turning down applications from people who want to open pharmacies. They have asked for a national appeals machinery and have been refused. We think that such a machinery is reasonable.
      Mr. Kennedy: I support the amendment. During the Committee stage, the Parliamentary Under-Secretary of State, the hon. Member for Wycombe (Mr. Whitney), gave a clear undertaking, which led to a similar amendment not being pushed to a Division on that occasion, that he would, in due course, hold discussions with pharmaceutical representatives over the possibility of setting up an independent appeal mechanism on what they considered to be one of the most important central provisions for their well-being in the legislation. In good faith, the matter was not pushed to a Division on that occasion.

      141
      Recently, I wrote to the Minister for Health, because the pharmaceutical representatives are concerned that the implication in the Minister's remarks in Committee — that is, discussion—appears not to be the case. As far as they are aware, in their contacts with representatives of the Department, there is an outlook in the Department that some discussion would be in order prior to the tabling of any regulations coming from that part of the Bill.
      The pharmaceutical representatives were disappointed. It is fair to say that they consider there to be a breach of faith on the Minister's part. Given the tenor of the remarks made in Committee, it is not what we would have expected tonight. The implication that alliance Members were left with was that the Government would table amendments to that part of the legislation. That was the impression that we received, in genuine good faith. On the basis of that understanding, a Labour Front Bench spokesman did not push the matter further. The Minister should be aware that the matter is causing concern among pharamaceutical representatives. I hope that he can put to rest the anxiety that they have expressed to us, and which I share.
      Mr. Hayhoe: I made it clear in Committee that the Bill did not specify an appeal system. The details of the system were to be dealt with by way of regulations. Hon. Gentlemen will remember that I circulated, for the convenience of the Committee, the draft regulations which were prepared last autumn so it could see what was in mind. Indeed, that helped our discussions. I went on to say that I would look at the regulations again, taking into account the views expressed in Committee, the individual representations by hon. Members and the views of some outside representative bodies. I know that further representations are coming in. They were due in last week, but they have not arrived.
      All those representations will be taken into account. The objective will be to establish a fair and objective appeal system that meets the needs of local people and takes account of what has been said. That assurance holds absolutely. I hope that the amendments will not be pushed. I assure both the hon. Member for Holborn and St. Pancras (Mr. Dobson) and the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) that the discussions will take place.
      There was no commitment to bring forward amendments to the Bill on Report. The commitment is to bring forward new regulations embodying an appeal system which, I hope, will take account of what has been said. Different views have been expressed. Whatever system is set up, it must be monitored carefully. If it is not proven to be entirely satisfactory, there will be an opportunity for amending it at a later stage.
      1.45 am
      Mr. Corbyn: I am not sure that we have been given a helpful answer by the Minister. The issue about which he spoke and the amendment moved by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) go to the heart of one of the biggest problems in the Health Service — its fundamental lack of democracy and the neo-clandestine atmosphere in which many decisions are taken by the family practitioners committees. My hon. Friend the Member for Holborn and St. Pancras was talking about the need for a proper appeals system.
      It is not good enough for the Government to introduce the National Health Service (Amendment) Bill which goes
      142
      into considerable detail about the problems of pharmacies and the pharmacists' contract. I understand that there was much discussion in Committee about pharmacists' remuneration. Yet, when it comes to an appeal against a decision by the family practitioner committees, the world is silent and nothing is offered. There can be nothing more important than to know where to go if one wants to complain about one of those decisions. It is high time that the Minister accepted the amendment and told us what type of people will make up the committees and from where they will be drawn.
      In the debate on an earlier amendment the role of community health councils was mentioned. They might have a role to perform in this respect, but the problems concerning the administration and structure of the Health Service are serious and the least the Minister could do is give us a straight answer to what is basically a simple question: is there to be an appeals system, or not?
      Mr. Campbell-Savours: Does my hon. Friend accept that, if the Government had been wise enough to accept the earlier amendment and to vote with us during the last Division, we would not have needed to debate this matter now? We would have been satisfied that the consultative arrangement which we sought under the community health council amendment dealt adequately with the problem. The Government have brought this accusation upon themselves by once again refusing to accept an eminently sensible amendment tabled by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson).
      Mr. Corbyn: There is some merit in that intervention but, unfortunately, the amendment that the Government chose to defeat did not go far enough. However, I do not wish to be drawn backwards. We are obviously anxious to go forwards and to ensure that there is a proper system in which community councils would have a role to play.
      The amendments are simple, but important and fundamental. As with all aspects of the Bill, we must await the election of a Labour Government to have a proper democratic Health Service and to end the sort of fudge and backstairs manoeuvre by which it is now run.
      Mr. Dobson: Sympathetic though I am to the propositions of my hon. Friend the Member for Islington, North (Mr. Corbyn)—having written them down myself—I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment made: No. 34.. in page 5, line 28, at end insert—
      '( ) that an application to a Health Board may be granted in respect of some only of the services specified in it;'. —[Mr. Hayhoe.]

    Clause 6

      SHORT TITLE, ETC.
      Mr. Dobson: I beg to move amendment No. 61, in page 8, line 9, leave out 'three months' and insert 'one month'.
      The Bill provides that the lifting of Crown immunity should come into operation three months after the Bill is given royal assent. As reasonable people, we all understand that sometimes it is necessary for a period to elapse before a Bill comes into operation because consultations need to be carried out and regulations need to he issued. In some cases it is necessary for the bodies

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      that are covered by the regulations to make special new arrangements to cope with the change in the law, but in this case no regulations are required.
      Ministers have told us throughout the discussions that Crown immunity provisions are being lifted from the food hygiene regulations, but that the change is gratuitous because health authorities are carrying out the provisions already without the law having been changed. There is no need for any regulations in this case. Ministers say that there is no need for any change in practice, policy or behaviour by the health authorities. In those circumstances, there seems to be no reason why they should have to wait three months before the law comes into force.
      Mr. Corbyn: This amendment is an important long-stop. During this rather short Report stage we have found time and time again that the provisions of the Bill are subject to a later decision by the Minister. This is a feature of so much of this Government's legislation. The House votes and then finds that all that it has done has been to give a pen to the Minister. He can decide how the Bill will operate, where it will operate and who will suffer as a result.
      The Minister was unable to answer questions on the appeal mechanism for family practitioner committees where pharmacy contracts are to be curtailed or introduced, or on consultations about the location of pharmacies, or on consultations with community health councils. We are awaiting the regulations dealing with the location of pharmacies and the surrounding issues. Therefore, it is not right that the Bill should be brought into operation within a mere three months. Six months is even a little tight. My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) was a little cautious in providing for only six months in his amendment. It would be better if there could be a full year before the Bill is brought into operation.
      In case any Conservative Member should say that the abolition of Crown immunity would be held up, there is nothing to prevent the Government from saying now that the provisions of the food hygiene regulations and the Health and Safety at Work etc. Act 1974 should be deemed to be operative in NHS premises from now on. There is no need for delay. The least that the House can do is to accept the amendment. The Minister would then be able to think about the answers that he has promised to give to the House.
      Mr. Hayhoe: The hon. Member for Islington, North (Mr. Corbyn) seems to have been as inaccurate in his comments on this amendment as he was in much else that he said. The amendment proposes to reduce the period from three months to one month. The hon. Gentleman seems to think that the amendment proposes to increase the period from three months to six months. If his understanding of even that simple provision is as incomplete as he has now demonstrated, heaven help us if he were to try to interpret the more complicated provisions of the Bill.
      The three-month provision was included in the Bill when it was published. Nobody can say that the Bill has been delayed. It was announced by my right hon. Friend the Secretary of State for Social Services in February. To carry it forward to Third Reading early in June is a fairly
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      significant achievement. It would be unreasonable at this stage to change the implementation date. Therefore, I hope that the amendment will not be pressed.
      Amendment negatived.
      1.52 am
      Mr. Hayhoe: I beg to move, That the Bill be now read the Third time.
      This short Bill contains provisions on three important health issues. Clause 1 seeks to apply the food hygiene legislation to health authorities and thus remove Crown immunity from hospital catering. Clause 2 is concerned with the change in the arrangements for retail pharmacists to take up NHS contracts. It provides powers for family practitioner committees to grant an application for an NHS contract only in circumstances where it is considered as necessary or desirable for the adequate provision of services to patients. It carries through an agreement that was made by my predecessor and the industry. The new contract offers many benefits and is a substantial improvement on the current arrangements. Patients will have a service that more accurately reflects their needs, and some of the expected savings will help to finance the development of the pharmacist's wider role. The taxpayer will get some savings and better value for money.
      Clause 3 puts beyond doubt the statutory basis for the longstanding and accepted practice of adjusting future payments to NHS contractors to offset past under or overpayments when considering remuneration. That is for general medical practitioners, dental practitioners, opticians and pharmacists.
      The Bill has been debated thoroughly in Committee. I think that it has been improved by the amendments that have been agreed during Report and I commend it to the House.
      Mr. Dobson: We welcome clause 1 of the Bill in so far as it removes Crown immunity from the food hygiene regulations. However, it does not go far enough and will not have a significant effect unless the Government provide the funds that are necessary for health authorities with inadequate kitchens to bring those kitchens up to scratch. We support in clause 2 the idea of rationalisation of the distribution of pharmacies. I can understand why a number of Government hon. Members are not keen on this proposition. It is because it explicitly recognises that the free play of market forces is worse than useless in determining the best locations for pharmacies. There are communities which want pharmacies but the free play of market forces may mean that they will not get them.
      We support the licensing system that the Government are introducing. Even with its disadvantages, the Bill will improve the situation and we look forward to a better local pharmaceutical service. I make again the point I made on Second Reading, that we will never get the full benefit of the usefulness and the skill, training and education of pharmacists until they find some way of separating from the pharmaceutical side of the business the sale of rubber ducks and other such items.
      Subject to reservations, we welcome the proposition contained in clause 3 and are glad that the law will be changed so that clawback will mean what it is supposed to mean and will not mean just plain claw, because up to now Governments have allegedly clawed back from contractors money that the contractors never had in the first place. That is wholly wrong and unreasonable and

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      held to be so in the courts. My final point will commend itself to my hon. Friend the Member for Islington, North (Mr. Corbyn). The Government have introduced legislation that has resulted in a number of elected local councillors being surcharged for the financial consequences of things they have done. Why has no one been surcharged for the financial consequences of the foul-up which led to the Department of Health and Social Services being taken to court and found guilty of wrongdoing by trying to get money to which it was not entitled? If people at one level of government are held responsible for the financial consequences of their actions, then people at central Government level ought to be held responsible. We would rather it was Ministers than civil servants. Subject to all the reservations that we expressed on Second Reading, in Committee and on Report, we broadly support the Bill.
      1.59 am
      Mr. Neil Hamilton: I owe an apology to my right hon. Friend the Minister for Health and to the House, because I was not in my place to move amendment No. 17. That was because I was listening to the persuasive arguments of my hon. Friend the Deputy Chief Whip about why I should withdraw my amendment. The moment to move it arrived and I missed it. Had I the suspicious cast of mind of the hon. Member for Workington (Mr. Campbell-Savours) I should no doubt have suspected a squalid manoeuvre by a Government Whip to muzzle a Back Bencher. As we know that the Whips do not indulge in tricks of that kind and as I have a rather higher view of the purpose of our Whips Office, I did not think that for one moment. The alternatives with which I was left were either to hold a press conference in a Committee room tomorrow morning or to make a speech on Third Reading——
      Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will not seek to make now the speech that he might have made had he been here to move his amendment. That would not be in order.
      Mr. Hamilton: I stand to he corrected, but as I had intended earlier to confine my remarks to clause 2 and what is in the Bill. I believe that what I am about to say will be in order on Third Reading.
      The effect of clause 2 is repugnant because it goes counter to the Government's philosophy of reducing state interference, monopoly and bureaucracy. On Second Reading, my right hon. Friend the Minister for Health said that the Bill's overall aim was to develop the pharmaceutical service, which would better satisfy the interests of the patients, the profession and the taxpayer and that the new contract would enable the family practitioner committees to make progress towards a more even distribution of pharmacies, which would better meet the needs of patients without being wasteful of NHS resources. Clause 2 seeks to achieve that by removing the current automatic right of a registered pharmacy to obtain an NHS contract to dispense NHS prescriptions.
      We all applaud the Government's policy of getting better value for money in the NHS. Modest cash savings are claimed from what clause 2 introduces. There is plenty of scope within the NHS for making much larger savings than that. Waste is a byword within the NHS because of
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      the absence of market disciplines and the signals which that gives. Therefore, it prevents a rational consideration of priorities.
      The savings that I would have preferred to see are, alas, not included in the Bill and we have instead a net saving of, perhaps, £2 million, as the Government claim, for the effect of clause 2. But the price that we shall have to pay for those £2 million in savings, if we accept them, is the effective cartelisation of the pharmaceutical retail sector. My hon. Friend the Under-Secretary, the Member for Wycombe (Mr. Whitney) said on Second Reading that by restricting the right to entry into the retail sector of pharmaceuticals we would not be restricting the establishment of a pharmacist, in practice, because a pharmacist can set up a practice without an NHS contract. I hope that he will not mind if I say that I thought that that was somewhat disingenuous because the average chemist derives 70 per cent. of his income from NHS prescribing and if he is not able to prescribe medicines on the NHS he will not be able to have a commercially viable business and so will not be able to set up.
      Therefore, we see the baleful effects of the NHS monopsony on the monopoly among its suppliers which the Bill will create. In this way we shall buttress the inefficiency of the system and in so doing we shall create a new capital asset for existing contractors, one which has been recognised by the Pharmaceutical General Council for Scotland in the propaganda which it issued designed to encourage us to support what the Government propose. It said that the improved security of tenure would reduce the financial risk in the eyes of a bank because a competing pharmacy will be allowed an NHS contract only where it is necessary or desirable and the security of a loan will thereby increase.
      The industry and its apologists accept that a capital asset will be created which arises out of the monopoly privilege which the legislation will give. That asset will be paid for, first, by the taxpayer and the consumer through inconvenience, and would-be pharmacists, through not being able to set up in business as a result of the restrictions.
      The £4 million gross savings that that will bring about must be seen in the context of the total NHS dispensing budget of over £350 million a year. Even of that £4 million it is proposed to plough back £2 million into the system. But if the number of closures of existing pharmacies which the Minister wishes to encourage exceeds the 300 which it has been claimed will come about, those cost savings will be correspondingly reduced.
      In some parts of the system we shall be increasing costs, because it is proposed to create up to 100 new quangos which will be charged with the duty of deciding who will be able to trade as a pharmacist. We shall be substituting the choices of bureaucrats for those of consumers.
      Entrepreneurs build businesses by fulfilling a need or filling a gap in the market. The proposals in the Bill will frustrate such developments, because people will need a permit to trade. It will be difficult for the bureaucracy that will administer the system to anticipate future patient needs or the changes taking place in the retailing sector and thereby enable the market to develop and satisfy the consumer.
      In effect, we shall be freezing the existing pattern of distribution of NHS dispensaries, inhibit the development of the retail trade and intensify concentration in the industry. There will be a great incentive for firms to

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      expand by the acquisition of existing pharmacies rather than by setting up in competition and developing new pharmacies to take advantage of the changing demands and desires of consumers.
      Several of my hon. Friends think that a Conservative Government should not be going along that road. The Minister claims that there is general support in the industry for the move that he has made. The local pharmaceutical committees contractors' conference in June 1985 overwhelmingly supported the Bill, but that is not surprising, because the conference is entirely comprised of existing contractors and they will acquire a capital asset and the competition to which they will be subject in future will be reduced. They have passed a resolution in support of the Government's proposals, but we can say, "Well they would, wouldn't they?"
      Company chemists, comprising 1,500 pharmacies, have come out against the proposals and between 2,000 and 3,000 independent pharmacists who are supposedly represented by the Pharmaceutical Services Negotiating Committee are also against the Bill. In addition, the 34,000 or so members of the Pharmaceutical Society, who might wish to set up in business one day, are not represented by industry representative bodies and had no opportunity to vote or express an opinion. The president of the Pharmaceutical Society has attacked the proposals. He said:
      "They have struck at the basic structure and operation of the entire pharmaceutical profession."
      We might have chosen an alternative way to achieve the savings that we want to make in the system, but, alas, the Government have not chosen to go down that road. In 1984 the Pharmaceutical Society, the Rural Pharmacists Association, the Pharmaceutical Services Negotiating Committee, the National Pharmaceutical Association, the Co-operative Pharmacy Technical Panel and the Company Chemists Association proposed that by financial incentives and disincentives——
      Mr. Deputy Speaker: Order. I hope that the hon. Gentleman is not seeking to make the speech that he might have made on Second Reading or at an earlier stage in our proceedings. He must address himself to what is in the Bill.
      Mr. Hamilton: I believe that I am confining myself to what is in the Bill——
      Mr. Deputy Speaker: Order. The Chair got a different impression, so I hope that the hon. Gentleman will follow my guidance.
      Mr. Hamilton: I shall follow your guidance with pleasure, Mr. Deputy Speaker.
      I was seeking to explain why clause 2 is misguided. It contradicts what I believe to be highly beneficial principles of economic policy that the Government have embarked on introducing in other areas and, in that context, the proposal is mistaken.
      I am aware that the hour is late, and I shall not expatiate upon that at great length, but in the clause the Government have indulged in a flirtation with Socialism, which has led us into a shotgun marriage. We have seen this all before. On prices and incomes policies, we embarked upon one system of regulation, which was doomed to failure, which encouraged us further down the
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      road to regulation and which achieved the opposite of what we intended. We have seen it in relation to milk quotas in the common agricultural policy——
      Mr. Deputy Speaker: Order. There is nothing in the Bill about milk quotas. I hope that the hon. Gentleman will stick to what is in the Bill.
      Mr. Hamilton: I was seeking to draw an analogy which is directly relevant to the system of regulation which the Bill will introduce. What we have seen elsewhere is what we shall see in relation to the provision of pharmaceutical services if the Bill becomes an Act. Costs will become insupportable within a nationalised Health Service, and th need for bureaucratic controls rather than market pricing, as we have had with milk quotas, will reduce consumer choice and increase costs to the taxpayer.
      We have supped with the devil on this occasion. Instead of using a long spoon, as we should have done, we have been spoon-fed by the devil. I hope that when the Bill is considered in another place, their Lordships will do what they did last year on the Law Reform (Miscellaneous Provisions) (Scotland) Bill and remove the clause, the better to provide for the needs of consumers and taxpayers.
      2.11 am
      Mr. Kennedy: Clause 1 is still drawn too narrowly and is too limited in its objectives and, therefore, its effect, although its provisions are welcome in their own right. It is a shame that the Government did not take this legislative opportunity to go further. I hope that their Lordships will try to extend the provisions of clause 1 and remove Crown immunity from hospital premises generally.
      The Minister did not answer satisfactorily the point made earlier about the way in which the new contract for pharmacists and the right of entry into the NHS contracting base will operate. It has frequently been argued that there is bound to be considerable disquiet among unsuccessful applicants because of what many of us regard as an inadequate appeals mechanism. The Minister promised further discussion on the matter. In the context of clause 2, his remarks were a little woolly. He said that representatives of the pharmaceutical profession could make submissions to him, but he did not give the sort of commitment which we wanted: that he will sit down and discuss with the elected representatives of the profession the appeals mechanism that could be introduced. The Governmemt must give more attention to that matter than they have so far. I hope that the concept of an independent appeal will commend itself to Conservative Members in another place, who tend to be more fair-minded than those who operate from the Conservative Benches in the House of Commons.
      On clause 3, the Government are not just storing up trouble, but amassing further power for themselves, although they have stressed that they have no intention of using it. I cannot understand why the Government are taking those powers in the first place if they do not intend to exercise them. That is not the normal practice of Government. However, they claim that they will not try on again their efforts to recoup what they identify to be excessive and unreasonable profits, as happened dramatically last year over the NHS dispensing costs associated with opticians.
      The Government had to legislate only because they were taken to court over the considerable sums involved,

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      and were found to be acting illegally. It is particularly ironic that, because of an unfavourable court ruling, the Government have introduced the clause, but, to assuage hon. Members and the contracting professions in the NHS, they have informed us that they do not intend to use the very powers that they have gone to such lengths to grant themselves. We look on that aspect of the Bill with some dubiety.
      In some of its provisions, the Bill is sensible. I think for example of the abolition, as far as it goes, of Crown immunity and of the recognition that there is a need for a rational distribution of pharmacies. However, the Bill does not go far enough, or indeed fairly enough in some respects, towards meeting some of the legitimate and sensible anxieties that have been expressed. We shall not oppose it tonight, but we hope that it will be improved further in the other place.
      2.16 am
      Mr. Michael Forsyth: I have no intention of detaining the House. I appreciate the lateness of the hour, but I should like to support the arguments — without repeating a single one of them—put by my hon. Friend the Member for Tatton (Mr. Hamilton)
      It is a tragedy that the arguments that some of us made on Second Reading were not pursued in Committee. We are having to consider them at a very late hour when we are under some pressure. The Bill uses public money to ensure the closure of hundreds of small businesses round the country. It rejects competition by allowing pharmacy practice sub-committees to maximise the distance between dispensaries to one kilometre. It sets up more than 100 new quangos and gives no indication of the cost of doing so or of how they will be serviced or will obtain the information that they will need about demographic changes and changes in the nature of their community in order to make their decisions. The Bill will literally destroy thousands of full and part-time jobs. It will diminish choice and force up prices as it will reduce competition for goods sold in chemist shops.
      The Bill will do all of those things, and seems to be quite against the basic priciples that I would expect from a Conservative Government. I am sorry that those arguments have not been given proper scrutiny during the Bill's passage in the House, and I look to my noble Friends in the other place to make it a better Bill, and one more fitting for a Conservative Administration to introduce.
      Question put and agreed to.
      Bill accordingly read the Third time, and passed.

    Procedure and Ways and Means Motions
    Mr. Deputy Speaker (Mr. Harold Walker): I understand that motions Nos. 2 to 11 are not to be moved.
    2.26 am
    Mr. D. N. Campbell-Savours: On a point of order, Mr. Deputy Speaker. May we clarify the position? On the Order Paper there are 10 Procedure and
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    Ways and Means motions, and, as I understand it, the House is entitled to debate each separately and to divide on each—
    Mr. Deputy Speaker: Order. The motions are not being moved. It is 2.20 am, and it is showing.

    BUSINESS OF THE HOUSE
    Ordered,
    That, at the sitting of Wednesday ll th June, notwithstanding the provisions of Standing Orders No. 3 (Exempted Business) and No. 4 (Prayers against statutory instruments &c. (negative procedure)), if proceedings on the Motions in the name of Mr. Secretary Fowler relating to Social Security and on the Motion in the name of Mr. Neil Kinnock relating to Housing (S.I., 1986, No. 852) have not been previously disposed of, Mr. Speaker shall at Seven o'clock put forthwith any Questions necessary to dispose of them. —[Mr. Biffen.]

  Private Members' Business
  2.27 am
  Mr. Terry Davis: On a point of order, Mr. Deputy Speaker. May we ask the Leader of the House for a statement? The Opposition are expecting him to make a statement about matters that were raised earlier today—or, in fact, yesterday. We were given to understand that the right hon. Gentleman had come to the House at this late hour to make a statement about business. We are hoping to have that before we leave the House.
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Further to that point of order, Mr. Deputy Speaker. I understand that discussions are still proceeding.
  Mr. Davis: Further to that point of order, Mr. Deputy Speaker. Discussions usually take place through the usual channels. I am advised that discussions are not proceeding through the usual channels. It is the Opposition's understanding that the discussions had been concluded, to the satisfaction of both the Government and the Opposition. I understood from our half of the usual channels that we were not only to expect a statement from the Leader of the House, but that it was to be a most satisfactory statement.
  If necessary, these discussions will have to proceed with the utmost dispatch, because I am sure that there is a limit to the time that you will allow me to make such points of order, Mr. Deputy Speaker.
  I believe that the usual channels have now been unblocked and that some communication is being made to the Leader of the House. I hope that, even now —[Interruption.] I note that the right hon. Gentleman is about to come to the Dispatch Box.
  Mr. Biffen: I understand that discussions are proceeding. Perhaps a Dyno-rod is a useful instrument from time to time, but all I can say is that just at the moment I have nothing further to add.

  Rural Bus Services
  Motion made, and Question proposed, That this House do now adjourn. [Mr. Maude]
  2.24 am
  Mr. Geoffrey Dickens: I sought to secure an Adjournment debate on rural bus services because I felt that, although the Government are past masters at introducing sound legislation, I was not at all sure that they are past masters at selling some of it to the general public. I often feel that we have lost the propaganda war on rural bus services.
  Littleborough and Saddleworth is a collection of small towns and villages nestling in the Pennines on the outskirts of Rochdale and Oldham. These villages rely very much on—[Interruption.] —public transport——
  Mr. Deputy Speaker (Mr. Harold Walker): Order. I ask hon. Members who wish to have private conversations to conduct them outside the Chamber.
  Mr. Dickens: As I was saying, Mr. Deputy Speaker, the villages in my constituency rely heavily on public transport. That is especially so for the elderly, who have no vehicles of their own. This being the position, I was greatly disturbed during the local elections when Opposition parties made it their business to circulate misinformation and indulge in scaremongering by pushing leaflets through the letterboxes of my constituents, which were disgraceful and in many instances entirely untruthful. One example bears the headline:
  "Prepare for the worst. Your local bus may soon disappear."
  It sets out all the instances where routes have not been registered.
  The Government's deregulation legislation was carefully designed. One of the major objectives—this must be said, as it is no good mincing words—was to save taxpayers' money. In the old Greater Manchester council area it was costing £30 per head of population per year to run the bus services. In many of the shire counties it was costing only £5 on the same basis. That was crazy and there was a tremendous drain on the taxpayers and ratepayers in my constituency.
  When the Opposition parties were telling the elderly in the villages in my constituency that they would lose their bus services, they neglected to tell them that in place of the large, single-decker bus that used to run infrequently to the villages, at times not linking passengers with the return buses for two hours, which meant that they had to spend a long time in the freezing cold or enter a cafe for a cup of coffee, for example — it was a deplorable service about which they were always grumbling—it would be possible for operators with taxis and minibuses to tender for the routes which other operators found less favourable.
  Without question, the more profitable-looking routes have been tendered for and secured by the deadline. D-day for the buses to come into the new system is 26 October, at which time the small operators may be invited to tender for the less profitable routes. If they win the routes in proper tender the Government have made available £20 million in subsidies for rural transport areas. The operators will be able to take advantage of cheaper prices for diesel and petrol. In addition, the leaflets neglected to state that arrangements can easily be made for concessionary passes to be used for taxis and minibuses.
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  These issues must be brought to the attention of the public.
  Mr. Tom Sackville: In Bolton, which is not far from my hon. Friend's constituency, there has been a mischievous and misleading campaign — especially frightening for the elderly — about bus services being withdrawn later this year. No mention has been made of the considerable subsidy that will be available and of the considerable saving that can be found. All in all, that has been misleading. I am certain that it will turn out that no necessary, and certainly no socially necessary, bus routes will be withdrawn, and many of those fears will turn out to be ill-founded.
  Mr. Dickens: I am obliged to my hon. Friend. That is the point that I am making.
  The small operators can bid for those routes until 26 October. If they secure them, they have to give a guarantee that they will run them for a minimum of three months. so that there is security for the villagers. If they drop out, others can take their place. If we reach D-day for buses— 26 October — and the local passenger transport authority has not gone to the trouble of putting the routes out to tender, people can just take on those routes. I could get my lads to drive minibuses, if I wanted, or unemployed people could start a transport company of their own, as long as they maintained the high safety standards that we would continue to expect.
  All in all, there are many frightened people in the villages. When one lives in a village, one is pretty isolated, and villages die without transport links. Even the youngsters start to move away if they do not have the proper transport, village to village, and village to town and back for major shopping. The matter is critical.
  One can understand how the Conservative party took such a thumping at the two by-elections, because the local buses became a big issue. All the misinformation, scaremongering and myths created were ingredients for winning votes. One wins votes by fanning anxieties. If one can introduce an anxiety into somebody's mind, one confuses the person. He feels, "For goodness' sake, if the Conservatives are going to leave us without buses, I had better vote for one of the other parties." We were left in a vulnerable position, which was reflected in the opinion polls, which then started to reflect on the local government elections. So rural buses was a big issue, bigger than I think Her Majesty's Government realised. We lost the propaganda war because we did not sell our excellent policy.
  I have said locally that what we are seeking to do is provide a more regular service with tailor-made vehicles of the right size, perhaps running more frequently, at sensible prices. They can take advantage of subsidies and low petrol costs. Concessionary passes can he used on those smaller vehicles. That can be done if the routes are secured through competitive tender.
  It is time that we spoke up about the matter and started to sell our policies. I feel deeply that it is no good putting forward sound, sensible legislation in the House and then failing to explain in careful detail to the public exactly how it will affect them. I felt that the misinformation was a disgrace, so I applied for this Adjournment debate so that at long last we could start to forge through and win the propaganda argument and sell an excellent scheme. I hope to see the small buses running in and out of my villages

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  with great frequency, to the town centres and between the villages, as they are in many parts of the country, happily and successfully.
  2.33 am
  The Minister of State, Department of Transport (Mr. David Mitchell): My hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) has admirably redressed the balance in the argument about rural bus services, and I am grateful to him. For far too long we have had one horror story after another put about by the Government's critics.
  My hon. Friend referred to leaflets that were put out during the local government elections. My hon. Friend the Member for Bolton, West (Mr. Sackville) referred to problems in his constituency, where similar leaflets and attempts to deceive people have occurred. It must be a matter for great regret that the hon. Member for Ryedale (Mrs. Shields) is not here. If she had been, we would have been able to hear whether she just did not understand the bus legislation when she made it such a central part of her election campaign, or whether she did understand it and knowingly deceived her constituents into believing, as the propaganda that went around at the time suggested, that if services had not been registered, people would be without a bus service.
  My hon. Friend the Member for Littleborough and Saddleworth has given us an opportunity to redress the balance. Party politicking is one thing, but frightening the elderly by deceiving them into believing that they will have no bus service is quite another. It is wholly reprehensible when parties play politics on the worries of the elderly.
  To listen to people, one would think that we deliberately set out to do as much harm as possible to people who live in towns and villages and who depend on bus services to get around. One would also think that those bus services were doing quite well until we disturbed them. The facts, of course, are very different. There is a sorry tale of 30 years of decline. Our policies must be seen in their true historical context.
  During the past 30 years, there has been a steady decline in bus services, especially in rural areas — rising fares have helped to create that— and a loss of passengers. Bus services have operated at a loss in their thousands. They have been cut, and villages have been left without services. Sunday services have been cut and there has been chronic decline. If anyone doubts that, they should ask the 10,000 National Bus Company employees who have lost their jobs what they have to say about the past decade.
  During the past 10 years, subsidies have risen from £83 million to a massive £558 million. My hon. Friend spoke of reducing the subsidy as one of the Government's primary objectives. That is not so. The Government are trying to stem the decline. We accept that chucking money at it does not resolve the problem. If it did, the problem would have been resolved.
  Our purpose is not to cut expenditure in the Transport Act 1985. We estimate that the £100 million spent in the shire counties is about the right amount. It is quite true that expenditure in the metropolitan counties has been wildly in excess of what any reasonable person would judge to be right and proper. There are mechanisms for cutting extravagant local government expenditure other than the bus legislation. Saving money and reorganising bus services are two separate matters.
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  The decline in bus services has been due partly to the growth of car ownership, but local monopoly and lack of competition have been enormously important in stifling innovation and enterprise. A fresh approach is urgently needed to to adapt to changing patterns of passenger demand. In his admirable speech, my hon. Friend talked of a large bus and frequent service. That is an example of how local monopoly has inhibited change and innovation to meet the market. We see passing our doors double-decker buses carrying only a couple of people, when people want more frequent services of smaller vehicles, which more nearly match the size of the market. If there are only two people, it is much cheaper to carry them in a taxi operating as a bus service.
  My hon. Friend and I both recognise the tremendous need for bus services, especially in rural areas. Many people do not own a car and many families own only one car, which is used by the breadwinner to travel to work, leaving the rest of the family dependent on buses for the rest of the day. Our concern for such people is a major influence on our policy for deregulation. The 1985 Act was introduced to stem the ongoing chronic decline which year by year produced fewer buses to serve our rural communities.
  As my hon. Friend is aware, the first phase of transition to competitive and deregulated services was passed on 28 February, when operators had to register those services which they intend to operate commercially after "deregulation day", which is 26 October. Unfortunately, owing to much irresponsible scaremongering from people who should know better, it is still necessary for me to stress that the registration of commercially viable services by 28 February was only the first stage in the abolition of road service licensing. My hon. Friend has given some examples of this black propaganda. Not so long ago, people were predicting that disaster would strike on registration day, with only a small fraction of existing services surviving the test of commercial viability. In fact, 75 per cent. of existing services have been registered.
  That is an immensely encouraging result, when one considers the high level of blanket subsidies now being paid. Obviously, when we point out that the cup is three quarters full, there will always be those who try to turn that against us by complaining that it is one quarter empty. But local councils will now fill up that one quarter. They have the resources and the opportunity to do so. Anybody who has been led to believe that services which have not been registered will not be run have been deceived by those who suggested that.
  Councils are at present considering which of the missing services they should direct their considerable sums of subsidy to purchasing. The new system of competitive tendering for local authority subsidy will ensure that local authorities will get more services for ratepayers' money than previously.
  Only last week the newspapers reported that the Highland region—not an area which one would expect to produce a great deal of competition for tenders— has already reported savings of £179,000 of ratepayers' money. That is an encouraging, but not unexpected result which augurs will for the rest of the country.
  Local authorities have sufficient funds to support socially necessary services, and the new requirement to go out to tender for services which need financial support will ensure that they obtain better value for money and can make their funds go further.

  155
  For many rural services, minibuses, shared taxis and other unconventional solutions will suit local circumstances far better than a double-decker bus running down country lanes with only a few people on it. Indeed only last week I read that a new taxi bus service which has started in Somerset and replaced a conventional service, has been so successful that the operator is considering extending it. We hope to see many other taxi and minibus firms tendering for services or, even better, running them commercially.
  Now that the registration network is known, there may be cases where people can see that there is a service that the lower operating cost of the smaller vehicle could make commercial. Although the registration date is passed, I would like such people to know that they still have an opportunity to seek a registration of such a service with the consent of the county council or the PTE. There is plenty of scope for new services to come in, and I hope that they will do so on the routes on which nobody has yet registered a service under the registration opportunity.
  I can illustrate the sort of things that might happen. I understand that some 70 taxi-operated local services have already been registered to run from October. My hon. Friend will have seen the series of leaflets that we have already produced, and distributed widely. We have a further leaflet and booklet called "Getting on the Road", which we shall publish very shortly, offering advice to people contemplating setting up a bus service for the first time. Once we have got past the transitional period, which is necessary to ensure a smooth transition from licensing to registration, operators will be able to register services to start at any time from 26 January 1987 onwards with just 42 days' notice.
  In this context, operators do not need to ask the consent of anyone to do it. They register their service, and provided that they have an operators' licence, with 42 days' notice, they can go ahead. We have already seen evidence of the enterprise which deregulation has introduced in Brighton, where taxi operators are planning to run a circular taxi-bus service to outlying suburbs late at night, and in Hampshire, where Hampshire Bus has reversed past thinking by increasing the frequency and using smaller vehicles on loss-making services in the Hythe area instead of giving up and reducing frequency. In many parts of England—in country towns such as Taunton and Exeter — as well as bigger cities, we are seeing minibus services spring up, giving the sort of frequent, rapid services that customers deserve.
  My hon. Friend made a point about the transitional rural bus grant. We realise that it will take longer for the financial benefits of competition and tendering to work through in rural areas than in town and cities where the scope for competitive services is greater. Therefore, we have introduced the transitional rural bus grant, which will be worth £20 million in the first year, reducing gradually
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  during the next three years. In the first year, the current year, operators of most local bus services will receive 6p for every vehicle mile they run in rural areas. That can tot up to a considerable sum. In addition, they get the fuel duty rebate, which is 74·5p per gallon for diesel and 88p for petrol. This demonstrates the Government's very real commitment to supporting existing rural services and encouraging new ones.
  Just so that we have it clearly on the record, I point out that these sums are in addition to the subsidy that can come on a tender. The county councils and the PTEs are now in the process of preparing invitations to tender for socially necessary services for which any operator with a licence can put in a bid. If he gets that bid, and the route is in a rural area, he will get not only his 6p a mile, and on top of that his fuel duty rebate, but on top of that, a monthly cheque from the county council or the PTE for the agreed contract price for providing that service. This adds up to an attractive package which should be more widely known.
  To help rural communities take advantage of the opportunities provided by the new services, we are providing the Development Commission with £1 million a year for innovative ideas and to help to get new services off the ground in the rural areas.
  In conclusion, I share my hon. Friend's concern at the campaign of distortion and innuendo which is designed to alarm people unjustifiably and to turn them against our policies before they have been given a chance to work. Our opponents have had a field day because the transition to deregulation has left a period of uncertainty before local authorities have made known their decisions on subsidies and contract services.
  I am confident that our opponents will be proved wrong. The proof of our policies will come after deregulation day on 26 October. People will see that their local bus networks have not disintegrated as the Jeremiahs predicted. They will see the benefits of deregulation in terms of competition in fares, wider choice on popular routes and innovative minibus and taxi services which will cater for their needs better than before. We shall win the argument where it counts—among the bus passengers in our cities, towns and villages. I am grateful to my hon. Friend for giving the House this opportunity to discuss these matters, even at this hour.
  Perhaps when the next election comes around or when, in the autumn, services do not disintegrate as our opponents have predicted, some people may be courageous enough to stand up locally, to be reported in their local paper, possibly with banner headlines as were used in the scare stories, and say that they deceived people. Perhaps they will then accept that we have brought to an end the reduction in bus services which has been such a feature of recent years.
  Question put and agreed to.
  Adjourned accordingly at nine minutes to Three o'clock.

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

Nuclear-Free Zones and Radiation Levels
Lord Belhaven and Stenton: 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 levels of radiation were recorded in the local authority nuclear-free zones during the period of fallout from the Soviet reactor at Chernobyl.
The Minister of State, Department of the Environment (Lord Elton): My Lords, many measurements were made throughout the country during the Chernobyl incident, covering radioactivity in air, rainfall, water, milk and other foodstuffs. The estimated radiation doses to average members of the public resulting from the Chernobyl discharge were summarised in a bulletin published by my department, copies of which have been placed in the Library of the House. Her Majesty's Government did not monitor local authority nuclear-free zones separately. The radioactive material was carried by the wind, and experience does not suggest that declarations by local politicians are recognised or understood by the forces of nature.
Lord Belhaven and Stenton: My Lords, I thank my noble friend very much for that clear Answer. I do not suppose that he can do so, but can he explain in what sense, if any, the so-called nuclear-free zones are nuclear free; and, if there is no sense in which they are nuclear free, would he not agree that this is a very clear case of misrepresentation of the electorate or at any rate the more gullible members of the electorate? Can my noble friend also tell me whether any of these
2
authorities made representations to the Foreign Office asking them to protest to the Soviet Government about the breach of their nuclear-free zones?
Lord Elton: My Lords, in the sense that a nuclear-free zone is a zone without any nuclear material in it, none of these zones would seem to qualify if, for instance, they have a hospital in them which uses nuclear products for medical purposes. I therefore think that they are nuclear free in the sense that a rain-free zone is a zone in which people do not carry umbrellas and get wet if it rains.

Channel Tunnel: Employment Opportunities
2.38 p.m.
Lord Brougham and Vaux: 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 they consider to be the benefits and employment opportunities resulting from the proposed Channel tunnel.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, the Channel tunnel will bring benefits and opportunities in both construction and operation. During construction, Eurotunnel expect to provide some 65,000 man-years of direct and indirect employment across Britain in construction and in the supply of equipment and materials. In operation, the tunnel, as well as generating long-term employment for some 4,000 people, will offer a fast, all-weather service for motorists and lorries and a dramatic improvement in international rail services for passengers and freight. These improvements will benefit the economy as a whole through reduced transportation costs and increased opportunities for British exporters to compete successfully in the large European market.
Lord Brougham and Vaux: My Lords, I should like to thank my noble friend for that very informative

3
reply. Can he tell the House what is the likely value of orders to be generated in the United Kingdom by the scheme?
The Earl of Caithness: Yes, my Lords. The likely value of orders, as announced by Eurotunnel, and orders for major items of equipment placed by the Channel Tunnel Group, which is the UK arm of Eurotunnel, comes to about £700 million, That breaks down into £150 million on construction equipment, £240 million on civil and building materials, £150 million on mechanical and electrical equipment and £160 million on rolling stock and signalling.
Lord Ezra: My Lords, in view of the substantial benefits which this project will bring, would the noble Earl care to indicate how long the legislative process to approve the treaty will take in the light of the recent prolonged debates in another place?
The Earl of Caithness: No, my Lords.
Lord Bruce of Donington: My Lords, aside from the benefits arising directly from the construction of the proposed project, could the noble Earl inform the House whether the Government have made any detailed evaluation of the benefits to the United Kingdom once the Channel tunnel is completed; and have they taken into account in that appraisal any possible disadvantages that may arise to certain parts of the United Kingdom in particular?
The Earl of Caithness: Yes, my Lords. Detailed discussion and detailed inquiry into the benefits and disadvantages of the tunnel have been undertaken by the Government, a White Paper has been produced, and the matter has been debated on more than one occasion in both Houses of Parliament.
Baroness Faithfull: My Lords, may I ask my noble friend the Minister whether there will be enough workers in the Kent area or whether workers will have to be brought from other parts of England? And, if so, what about the housing of such workers? Has that been evaluated?
The Earl of Caithness: Yes, my Lords, there will be opportunities for construction workers in the Kent area, but, as I indicated in my earlier answers, there will be tremendous opportunity for those in the Midlands, the North and in Scotland to benefit from this project.
Lord Carmichael of Kelvingrove: My Lords, can the Minister say whether the figure of 4,000 operating jobs which he mentioned represents the net employment gain of the Channel tunnel if or when that link is built? Furthermore, does that figure of 4,000 jobs allow for the jobs that may be lost by workers at Dover and the other seaports involved? Does the figure refer only to job numbers on this, the British side of the Channel? Can he say whether the French will have an equal number of job gains? Finally, can he say how this will compare with the present number of French and British jobs associated with a sea link as against the number of future jobs likely to be associated with fixed link?
The Earl of Caithness: My Lords, the 4,000 long-term employment opportunities that I mentioned in my original Answer is a figure generated as a result of the construction of the Channel tunnel and its operation. As the noble Lord rightly points out, there will be some reduction in the labour force as a result of the possible effect on the ferries, but we understand this will be overtaken by increased further opportunities in Kent about the turn of the century.
Lord Elliott of Morpeth: My Lords, is my noble friend aware that there has been a highly successful conference organised by the North-East Development Council quite recently in Darlington on the work opportunities which the building of the tunnel represents? There is no doubt at all in that area, which is famed for its engineering, of the value of this project.
The Earl of Caithness: My Lords, I am grateful to my noble friend. As he rightly says, there are a lot of opportunities for those in the North-East and I hope we shall get tremendous support for this project from the workers there and also from those who work on the railways.
Lord Stewart of Fulham: My Lords, is the Minister aware that he does not seem to have answered the question put to him by the noble Baroness, Lady Faithfull? The question, if I understood it correctly, asked whether it was going to be necessary to bring people from outside Kent into that county and, if so, what was being done about housing them.
The Earl of Caithness: My Lords, further housing land will be made available. Obviously there will be opportunities during the course of construction for more people to be brought in or for those locally to change jobs.
Lord Wallace of Coslany: My Lords, the noble Earl outlined many advantages as a result of bringing in the Channel tunnel, but has he taken into account the desecration of Kent and the enormous amount of traffic that will ensue for the Kentish suburbs?
The Earl of Caithness: My Lords, Kent will not be desecrated. As the noble Lord might be aware, my honourable friend in another place, Mr. Mitchell, has had a lot of meetings with all the groups concerned about the future of Kent. We are very concerned about that matter, but I do not believe that Kent will be desecrated when the project is finished.

Post Codes: Inclusion in Telephone Directories
2.45 p.m.
Lord Annan: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make representations to British Telecom to print in telephone directories the full post code of subscribers.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, it is for British Telecom to assess the case for including post codes in the light, inter alia, of views expressed to it by the Post Office and by telephone and postal users.
Lord Annan: My Lords, I thank the noble Lord for that Answer, which is very much in line with the answer which he gave to the noble Lord, Lord Beloff, when he asked about the provision of telephone directories in post offices. May I ask him this? Is he saying that the cost to British Telecom of performing this service would be excessive? If so, is that not rather odd in view of the very handsome profits which British Telecom is making from the sale of its services to a captive public? If he is saying that, does he not think that this disregard of the needs of the public and the apparent inability of the Post Office and British Telecom to co-operate, when once they were in the same organisation, justifies some of the criticisms made from the Opposition Benches of the privatisation of public monopolies?
Lord Lucas of Chilworth: My Lords, my Answer was very much in line with that which I gave to my noble friend Lord Gainford also on 6th March. These are matters for the commercial judgment of the company, and the cost to which the noble Lord, Lord Annan, refers is something like £5 million. It would also mean books some 25 per cent. to 30 per cent. bigger and thicker than they are now. These are not considered by British Telecom as being necessary for it to discharge its obligations to telephone users.
As to whether the Post Office should buy from British Telecom, that is in itself a matter for the Post Office, which also provides post code directories in the post offices and on demand. We must remember that the telephone directory is provided by British Telecom under the terms of its licence for the benefit of telephone users.
Lord Bruce of Donington: My Lords, when the noble Lord received the figure of £5 million as being the cost from British Telecom, did he take any steps to query it? Also, does he know how the figure of £5 million, which appears on the face of it to be rather large, is made up?
Lord Lucas of Chilworth: Yes, my Lords; that would be for production costs alone. A similar sum would be spent on completing and correcting post codes on the computer files; so we are talking in terms of something like £10 million, all of which of course would have to be borne by the users of the telephone service.
Lord Nugent of Guildford: My Lords, is my noble friend aware that this is a question I raised three or four years ago before British Telecom was privatised and when this was part of the general complex of the Post Office? Is he aware that I was then given a non-answer such as the noble Lord has given us today? There seems to be a strange lack of interest on the part of the Government in a measure which would have great benefit for the Post Office, because nothing would create greater efficiency and greater economy in the handling of letters. Is it not time that Ministers
6
began to take a little initiative in getting the post code generally understood and used in this country?
Lord Lucas of Chilworth: My Lords, I am surprised that my noble friend Lord Nugent of Guildford should consider this to be a non-answer. It is a practical and commercial answer which I feel quite sure he will understand very well indeed. There are two separate businesses. Both of them have to fulfil, under statute, different roles. Both of them have to provide profit. It is for their commercial decision as to where they spend their money in the provision of those services.
I have indicated this afternoon and on other occasions in your Lordships' House that the telephone directory is for the use of telephone users; that the Post Office provides directories of post codes at over 80 Crown offices and in a number of urban and rural areas, and that there is adequate provision for people to find out about post codes. Although I do not wish to move the Question into the area of the Post Office, an average of 69 per cent. of all mail carries a post code and in business terms the figure is 80 per cent. The service is improving enormously in terms of both delivery and the use of codes.
Lord Marsh: My Lords, will the noble Lord accept that many of us who have the good fortune to be British Telecom shareholders would be very grateful if he would keep his representations to the absolute minimum, other than possibly pointing out the fact that we would all agree with any attempt it may make to keep a sharp eye on the odd £5 million that may be around?
Lord Lucas of Chilworth: My Lords, I am very grateful to the noble Lord, Lord Marsh, for that very pragmatic and helpful suggestion.
Lord Lloyd of Kilgerran: My Lords, the noble Lord the Minister has used the phrase "commercial advantage" on two occasions in his reply. I may have misunderstood him, but is not the general tenor of his reply to the effect that there is little commercial advantage at the present time for the efficiency of the Post Office in a more general use of these codes?
Lord Lucas of Chilworth: My Lords, I do not think that the noble Lord, Lord Lloyd of Kilgerran, has misunderstood me. I did refer to commercial advantages, and I think that if he looks at Hansard tomorrow he will see that I described some of the other benefits that are accruing.
Lord Molloy: My Lords, is the Minister aware that a number of Members of your Lordships' House were guests of the Post Office a fortnight or three weeks ago? We visited one of the major post offices in the country and we were shown the difference between what happens when a post code appears on a letter and when one does not. Therefore, the Post Office always recommends: please put in the post code. Can it not slowly but surely see that the post code is put into telephone directories? It cannot do it in one fell swoop, but it ought to be its policy ultimately to achieve that.
Lord Lucas of Chilworth: My Lords, this is absolutely a matter between the Post Office and British

7
Telecom, and, as I have explained, both are discharging their relative duties as required by statute. Whether they mutually find it to be of benefit is entirely up to them. The sum of £5 million is a lot of money. The Post Office believes that it can spend its money better on giving better service to its customers than on currently inserting post codes in the telephone directory.
Lord Teviot: My Lords, my noble friend says that people can go to a local post office to get their information. Is the information in the post office of a local nature or do all post offices have post codes for the whole country?
Lord Lucas of Chilworth: My Lords, I explained that post code directories are available at the 80 Crown offices, some urban offices and some rural offices.
Lord Teviot: My Lords, my noble friend has not answered my question. Are the post codes in the 80 Crown offices for the local area or are they for everywhere in the British Isles?
Lord Lucas of Chilworth: My Lords, the information is available for the whole of the country, across the country, through 80 Crown offices and some other offices.
Lord Taylor of Blackburn: My Lords, the majority of people in this country were not interested in the post code when it first came out. The majority of people could not care less about it. It was therefore the responsibility of the Post Office to make a deal with British Telecom. May I ask the Minister—and this is what we are trying to get at—whether the Government will please use their good offices to get both parties together, so that it will be of benefit to everyone in the country?
Lord Lucas of Chilworth: My Lords, I am quite sure that the exchange of views expressed by your Lordships this afternoon will, by virtue of Hansard, be conveyed to both the Post Office and British Telecom.
Lady Saltoun of Abernethy: My Lords, does the Minister have time to go and queue at a busy Crown office every time he needs to find a post code which he does not know?
Lord Lucas of Chilworth: My Lords, like the noble Lady, I have very little time, spending most of it in the service of your Lordships. However, I satisfy myself that those people with whom I wish to communicate advise me of their post code. There are a number of ways in which they can do that.
Lord Diamond: My Lords, can the noble Lord say what he regards as the Government's responsibility in relation to the policy of British Telecom in printing telephone directories?
Lord Lucas of Chilworth: My Lords, the Government do not have a responsibility, in so far as British Telecom is concerned, as regards the printing
8
of telephone directories. However, we are obliged, through the Director of Oftel, to ensure that BT undertakes the provisions in its licence issued under the Telecommunications Act 1984 to operate a universal telephone service, which includes directory services which help customers to find the numbers they want.

London-Bournemouth: Rail Service
2.56 p.m.
Lord O'Neill of the Maine: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make funds available to British Rail to enable them to bring their London to Bournemouth InterCity service up to the standard of other InterCity services in the country.
The Earl of Caithness: No, my Lords. Although there is to be considerable investment in this London and South-East sector express service, there are no plans for it to be transferred to the InterCity sector.
Lord O'Neill of the Maine: My Lords, I thank the noble Earl for that reply. May I ask him whether he is aware that those of us who live on the Bournemouth line and have the opportunity of going north from London and, even more, west from London are astonished by the comfort of the carriages and the smoothness of the rails, whereas on this particular line, in order to achieve the laudable objective of Southampton in 110 minutes, we have to be rattled along on old rolling stock and on rails which are far from smooth?
The Earl of Caithness: My Lords, the noble Lord will not have to wait much longer, because the Government have recently authorised the expenditure by BR of some £28 million for 24 new electric multiple units to be used on that line.
Viscount Buckmaster: My Lords, will the noble Earl the Minister agree that of the total distance of 108A miles from Waterloo to Bournemouth, about 61 miles are almost dead straight and therefore ideal for highspeed running? Does this not constitute a case for raising the speed limit on these fast stretches from 90 to 100 or even 125 mph, given the provision of adequate motive power and bearing in mind that many trains already exceed 95 mph on these stretches?
The Earl of Caithness: My Lords, I am sure that the noble Viscount, Lord Buckmaster, is right about the mileages, but I should not like to comment on increasing the speed limit without further reference to BR on the safety aspect. However, I can tell the House that when the new locomotives are in place the journey to Weymouth will be reduced by 17 minutes.
Lord Maybray-King: My Lords, is the noble Earl aware that, as one who has used this line regularly for over 50 years, I can confirm every syllable of every word said by my noble friend Lord O'Neill?
The Earl of Caithness: My Lords, I hope that the noble Lord will soon have a more comfortable carriage to sit in and a faster and better service.
Lord Carmichael of Kelvingrove: My Lords, while we are glad that there will be new locomotives on the line, and we hope that the noble Lord, Lord O'Neill, will get a smoother ride fairly soon, is the Minister aware that there is a growing feeling that reliability on both the express and InterCity lines all over the country is not very good? Has he any figures showing the punctuality of InterCity and express services over the last two or three years?
Does he not agree that a very large amount of investment will be required if we are to bring all the services up to the standard that the railways wish? Does he not further agree that the bids by the chairman of British Rail which the noble Earl said last week had been largely met by the Government are only one-third of those asked for by the previous chairman of British Rail? In other words, one chairman was asking for what was required and the other chairman is asking for what he thinks he can get.
The Earl of Caithness: My Lords, I cannot comment on the punctuality of trains because that is rather wide of the Question on the Order Paper, but if the noble Lord wishes to put down a Question on that subject, I shall make the information available to him.
On the question of British Rail investment being too low, since 1983 British Rail have adopted a management structure based on business sectors. The investment proposals are what the sector managers believe they need to meet their objectives.

Business
3 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Dockyard Services Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Committee stage of the British Shipbuilders (Borrowing Powers) Bill, the Second Reading of the Consumer Safety (Amendment) Bill and the Cutlery and Stainless Steel Flatware Industry (Scientific Research Levy) (Abolition) Order 1986 will be taken.

Public Trustee and Administration of Funds Bill [H.L.]
Bill read a third time; an amendment (privilege) made; Bill passed, and sent to the Commons.

Family Law Bill [H.L.]
3.2 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): 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.—( The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clauses 1 to 63 agreed to.
Clause 64 [Family proceedings rules]:
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 1:
Page 38, line 30, leave out from ("rules") to end of line 2 on page 39.
The noble and learned Lord said: I think it has been agreed that it would be convenient for us to take together Amendments Nos. 1 and 2 and the Motion relating to clause stand part in the name of the noble Lord, Lord Meston. They all arise out of the same matter—namely, Clause 64 of the Bill.
We had a preliminary run, if that is the right way of describing the matter, over this ground at Second Reading of the Bill. There it became apparent that Clause 64 stood out like the proverbial sore thumb in a Bill which was otherwise substantially approved in all parts of the Chamber, giving effect as it does to three admirable reports of the Law Commission. Clause 64 plays no part in those reports. It arises from the intention to reduce legal aid costs in a way which I submit is arbitrary and likely to cause more damage than benefit.
I made some contribution towards reducing the cost of legal aid in the matrimonial field when the Government of which I was a member introduced legislation to simplify undefended divorce cases; and, indeed, save where issues arise in regard to custody and access to children and financial provisions, courts are now enabled to grant decrees of divorce without the need of any legal representation at all. That enabled useful savings to be made which were used in the legal field in other directions.
Clause 64 seeks to take the matter of the saving of legal aid costs in two ways. First of all, as the Committee will see from Clause 64(1)(a), the matrimonial rule committee,
"may amend or repeal any statutory provision relating to the practice and procedure of the Supreme Court or county courts so far as may be necessary in consequence of provision made by the rules".
It is a remarkable power given to a rule committee. There is one precedent in a less significant field for this to be done, but this power to amend the law or repeal previous Acts of Parliament in the highly sensitive field of family and domestic relations is one which I submit should be resisted.
The alteration of the law in that important field should be a matter for Parliament. Such power should not be given to a rule committee. It is suggested by those who are afeared by what is proposed that it might, for instance, encourage and enable the rule committee to determine that matrimonial cases should be heard by divorce registrars, or embark within the wide ambit of the power given by Clause 64(1)(a) to the relevant rule committee to amend the relevant law. That is our first ground of objection which is embodied in the amendments and will no doubt be referred to by the noble Lord, Lord Meston, in his speech on the clause as a whole.
The second significant feature is in Clause 64(1)(b), which provides that the rules,
"so far as relating to the costs of proceedings, may make different provision for different cases or descriptions of cases, for different circumstances or for different areas".
Here, again, there is a considerable power: what principles are to apply in regard to the decision with regard to different cases or, indeed, different areas. That does not appear from the clause although it may well be said that those matters will be clarified in the rules in due course. But they certainly do not appear on the face of the clause as it stands.
The matter which has raised considerable concern is that it will be possible if these provisions are carried out to have a different method of remuneration and of costing in regard to legal aid cases from that which applies in cases which are privately financed. Here again, we come up against a risk that was ventilated by several noble and learned Lords and by others in last Wednesday's debate on criminal legal aid; that of creating a two-tier profession—those who will and those who will not take on legal aid work. As my noble friend Lord Mishcon said in the Second Reading debate, more law firms will be likely to close their legal aid departments if there are further reductions in legal aid cost provisions, because they simply cannot keep them going.
The method proposed in Clause 64 is to ask the Matrimonial Causes Rule Committee to prescribe fixed rates of payment for work done by solicitors and barristers in respect of legal aid cases. It therefore gives the rule committee the power to discriminate between legally-aided and privately-funded work. That would make a significant change to the present provisions. At the present time taxing masters and registrars fix fair remuneration for the payment of lawyers' fees in the light of local conditions and the circumstances of the case. Good work is rewarded and bad work is penalised. I submit that that system has worked pretty well since legal aid was introduced.
However, the system of fixed rates that is now proposed by this clause, by which mechanical assessment of hours worked will replace qualitative assessment of the work done, will, it is feared, reduce the quality of the service provided and discourage efficiency. There will be a risk of a first-class service for privately-financed litigation and of a second-class service for those who proceed on legal aid. I submit that that would be contrary to the basic principle of the legal aid scheme. I hope therefore that in the interval since we last discussed this matter, when it fell to the noble and learned Lord the Lord Advocate to deal with the question, perhaps the noble and learned Lord, in the light of the observations made on that occasion, will be able to take a different view which is taken seriously by both branches of the legal profession. I beg to move.
3.15 p.m.
Lord Campbell of Alloway: The noble and learned Lord, Lord Elwyn-Jones, has referred to this clause as the proverbial sore thumb, and perhaps some Members of the Committee will regard it as an unwelcome appendix; indeed, at this particular time as a grumbling appendix. It is one that, in accordance
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with the broad proposal of the amendment, ought now to be excised because it affects the question of reasonable remuneration for work done by the Bar and solicitors under legal aid, albeit in this instance in family proceedings. The question is, in its broadest form, sub-judice. In relation to criminal legal aid, much the same basic considerations must apply.
Surely there is a case, as the noble and learned Lord, Lord Elwyn-Jones, has suggested on this occasion, as at Second Reading, for dealing with this whole matter by specific legislation, by amendment to the Legal Aid Act. Surely it is not appropriate to introduce this question, albeit part of a much larger question, and one that in no way impinges upon the principles of the Bill, and which is wholly devoid of any political significance, as an appendix to this Bill. In the long run can there be any doubt that one day, when the present unfortunate dispute has been resolved—and it will be resolved—a broad, independent body (call it what you may) will in effect deal with the whole subject of reasonable remuneration as regards legal aid?
Therefore, as regards a concept that was as I understood it—and if I am wrong, I will be corrected by my noble and learned friend the Lord Chancellor—half-welcomed by the noble and learned Lord when he wound up in that interesting debate on the amendment of the noble Lord, Lord Benson, and as regards this particular Bill, is it necessary and is it sensible that we should deal with that aspect in the way that is proposed at this time?
When the Bill was before the House on Second Reading my noble and learned friend the Lord Chancellor, in moving the Second Reading, said that:
"Clause 64 enlarges the rule-making powers of the Matrimonial Causes Rule Committee. A greater degree of flexibility … to distinguish between different cases and different circumstances will in future be possible".—[Official Report, 22/4/86; col. 1083.]
With the greatest respect to my noble and learned friend, although that may be the intention, one wonders whether it could in practice ever be the situation.
So far as that relates to Clause 64(1)(a), it is of course possible and wholly acceptable. But in so far as it could give rise to the disparity of treatment to which the noble and learned Lord, Lord Elwyn-Jones, has referred, surely it is not acceptable. The answer to the first question that I raised on Second Reading, as to whether there would be disparity between privately-funded work and legal aid work, when dealt with by my noble and learned friend Lord Cameron of Lochbroom, was, as I understood it, that, yes, there is to be disparity. On the second question—which was, if so, what machinery would be established to ensure that expectation of reasonable remuneration would be fulfilled?—the answer, as I understood it, was that no machinery was contemplated. On the third question that I raised, as to whether it was right, if the fundamental principle of legal aid were to be abrogated, that it should be left to a rule-making body as distinct from Parliament, the answer appeared to be that, yes, it was appropriate that it should be left to a rule-making body.
This morning it so happens that I received another letter from the Bristol Law Society, to which I referred on Second Reading, expressing its continuing and

13
grave concern. It took the view that any facility to depart from fixed rates or scales on taxation, although on paper attractive, would really be wholly unworkable in practice and wholly unrealistic. In practice the fixed scale becomes the fee, which is not related to the type of work done or the worth of the work. Again, the view is taken that this is really a matter for Parliament. In all those circumstances one wonders whether it would not be possible to allow this Bill to go forward in its excellent and wholly uncontroversial form without introducing this element which, at this time, raises all sorts of questions which some Members of the Committee may think are better left for resolution in consultation and in a more leisurely atmosphere.
Lord Denning: I am against this amendment. Like other noble Lords, I have received communications from law societies. I think that their fears are not well founded. The important words in the clause are:
"may amend or repeal any statutory provision relating to the practice and procedure of the Supreme Court or county courts".
I repeat, "relating to the practice and procedure". We have often had to consider those words. The important thing is that it does not affect the rights of the parties. Practice and procedure are for the lawyers. We have the Rules of the Supreme Court, and so on. We have rule committees to draw them up and to vary them. They cannot affect the rights of the parties. It is very sensible to have a rule-making body to deal with practice and procedure in order to keep it up to date when any faults or flaws arise.
It is right that there should be different costs available by rules in different descriptions of cases. As to legal aid, we must be very careful to see how it is restricted, with power to make different provisions according to whether or not any of the parties are entitled to legal aid. That is only the procedure in that regard. It cannot affect the rights of the parties. I am interested to note in the latest communication I received that the Law Society consulted leading counsel, who advised that Clause 64(2) is unlikely to empower the rule committee to discriminate against legal aid by prescribing rates of payment for legal aid work or permit the committee to have regard to the Government's public expenditure policy when regulating costs. I think that is quite right. I agree with that leading counsel. I think the fears are misconceived and I see no cause for the amendment.
Lord Elwyn-Jones: Perhaps the noble and learned Lord will permit me to intervene. Has he applied his distinguished mind to the provisions of Clause 64(1)(b), which enable the rule committee, in respect of the costs of proceedings, to make different provision for different cases, or descriptions of cases, or for different circumstances, or different areas? Surely the individual litigant will be directly affected by decisions of that kind.
Lord Denning: We have codes A, B, C and D according to the amount involved, and so on. No; it is good that the rule committee should regulate matters of that kind.
Lord Meston: I support this amendment. On Second Reading noble Lords on all sides were
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unhappy about Clause 64 as a whole. Their dislike of subsection (1)(a) was on constitutional grounds in that it would allow a rule committee to alter any statutory legislation including, as I understood it, the schedule to the Legal Aid Act dealing with remuneration. I am happy to be told by the noble and learned Lord, Lord Denning, that I may be wrong on that, but I would certainly need to think about it. Likewise there was, and is, dislike of subsection (1)(b) and subsection (2). I shall try not to repeat the arguments at length. Indeed, many of them were echoed very authoritatively in the debate last Wednesday on criminal legal aid.
Family law work is important. Much of it is concerned with the protection and future welfare of children afflicted by the breakdown of marriage. Much of it is concerned with fairly reallocating limited capital and income resources following the breakdown of marriage. In family law work there are not always easy answers. What is best for a child during and after divorce is seldom straightforward. What is a fair allocation of finance and property depends on a host of sometimes competing factors which have to be considered and assessed. Thorough preparation by the lawyers, essential in all litigation, is vital and can save time and money in the long run. It is vital if a case is to be conducted efficiently. It is vital if the case is to be settled fairly without the necessity for a court hearing.
For years, private practitioners have taken on legal aid work on the basis of fair and reasonable remuneration, independently assessed by taxation. In the High Court, of course, it is reduced to 90 per cent. of the fair and reasonable remuneration—the 10 per cent. difference often being regarded as the legal profession's contribution to the system or a discount for the certainty of receipt. But the spirit and intention of the legal aid scheme has always been to ensure that, so far as possible, the client should not be at a disadvantage through lack of funds and that there should he no distinction between the private client and the legally aided client.
Clause 64 is intended to pave the way for fixed standardised fees. In so doing, it undermines the spirit and intention of the legal aid scheme. It overtly distinguishes between the legally aided client and the non-legally aided client. The practical consequences are that lawyers who can afford to do so will give up legal aid work. Alternatively, the work will be increasingly delegated to inexperienced or unqualified practitioners. The temptation to cut corners will grow and legal aid will come to be seen as second-rate work for second-rate lawyers.
Private solicitors in poorer areas, already under pressure in respect of their conveyancing work which provided a measure of subsidisation to litigation, will move to richer pastures. The burden will fall on the sparse and hard-pressed law centres or on the Citizens Advice Bureaux. One consequence I had in mind on Second Reading (and I respectfully remind the Committee of it) is this. A privately paying client who runs out of funds half-way through litigation will find himself being told by his solicitor, "I am sorry, we do not do legal aid work. You are entitled to legal aid but you cannot continue to pay our bills and you must find another solicitor". Therefore the client will have to go to another solicitor who does accept legally aided

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work. Much of the work will have to be duplicated and the other party to the procedures will probably suffer delays as a result.
The Bar recognises the alarm at the increase in the matrimonial legal aid costs. The Bar recognises that any Lord Chancellor would be anxious to control it. The courts and the responsible practitioners in this area have become more and more cost-conscious. There is always a pressure for the taxpayers' sake and for the clients' sake to save them the cost and the bitterness of litigation. I remind the Committee that this is an area where legal aid is not free legal aid. The client often has to make a contribution and the balance of the costs is often clawed back by the procedure known as the Law Society's statutory charge.
The Bar and, if I may say so, especially the Family Law Bar Association, makes constant suggestions to improve procedures, not least in the context of the Booth Committee's proposals which have recently been published. The Bar, as the noble and learned Lord the Lord Chancellor will know from his officials, has been engaged in constructive negotiations as to matrimonial legal aid fees, subject to its underlying dislike of the principle of a standardised fee. I suggest that standardisation is quite inappropriate for the variety of work in this area of the law. We all want to save costs, but Clause 64 is not the route, and I support this amendment.
3.30 p.m.
The Lord Chancellor: Perhaps I may intervene at this point. I really think that some degree of reality ought to be brought into this debate. Every speaker who has supported this amendment so far has wholly misunderstood the current position and the purpose of Clause 64 and its effect. I know that the noble and learned Lord, Lord Elwyn-Jones, is aware of how much I respect and like him and my words are not intended in any way to wound, but he spoke, as I think did three noble Lords on Second Reading, as if the taxing authority at the moment can and ought to fix the amount which is allowed on taxation. That is wholly wrong.
I do not know whether the noble and learned Lord has looked recently at the existing Matrimonial Causes (Costs) Rules. They are contained in rules of 1979. I do not know whether the noble Lord, Lord Meston, who is usually so well informed on this subject, has ever read these rules, or whether my noble friend Lord Campbell of Alloway has read them, but in fact they provide a fixed set of costs for all matrimonial work.
I shall not read all of the paragraph, but on a taxation of costs for matrimonial proceedings in the High Court—and the Committee may take it from me that there are similar rules for the county court—it says that the amounts to be allowed shall be in accordance with column 1 of the matrimonial scale. If one turns to the matrimonial scale which is contained in the appendix to Rule 6, one will find that in column 1 all the amounts are precisely laid down by the schedule. The Committee may be interested to read some of them. For instance, in regard to counsel, counsel's fees in connection with proceedings in a
16
divorce in the county court may be £5.50 to £30. There are similarly low fees available in the High Court.
The curious result has been that in the seven years which have passed since 1979 those fixed, prescribed scales have become wholly obsolete because they are so low. The taxing authority has had to disregard them, not because they are not here but because they are wholly obsolete. One of the curious by-products of this situation is that the solicitors' profession, if the noble Lord, Lord Meston, is to be believed, has forgotten that the fees are all laid down on a fixed scale already and that the only reason that they are disregarded now is that they are so low. The profession seems to think, as the noble and learned Lord, Lord Elwyn-Jones, said, that ever since legal aid has been instituted it has worked on the principle that the taxing authority should prescribe the actual costs to be allowed on merit alone.
I am sorry to take some little time on this matter, but it is important that people should understand what has happened. The original rules contained an escape clause. It was intended always to be exceptional and I think the rules provided originally that the escape clause should allow the taxing authority to reduce below the fixed amount or exceed the fixed amount; and because the scales laid down in the existing rules are so utterly unrealistic, in practice what has happened over the intervening seven years (which is quite a short time) is that the profession has quietly assumed that ever since the legal aid system was introduced there has been a purely discretionary right for the taxing authority to prescribe what it thinks suitable and that it has always existed and has worked well.
Once you have said that, it is obvious that it is totally wrong to suppose that one can keep in existence rules which state that there should be a prescribed scale that may occasionally be departed from and in fact to allow departure from it on every single occasion, which is what is happening now. That is the first point I want to make.
The second point is that the prescribed scales are unrealistic for a totally different reason: they apply right across the board in all parts of the country, strange as it may seem. This again is wholly unrealistic. It means that in matrimonial work if there are two unassisted litigants—which is very much the exception—they can each appoint two or three counsel; and they then find themselves limited by this extraordinary prescribed scale. What has happened is something quite different from what was described at the beginning. As some members of the Committee will know, over the field of litigation it has been a constant source of complaint (I think until I undertook certain reforms which it will be necessary to explain) that when a party wins a case—and I am talking now about unassisted parties and assisted parties if they win—he or she receives only party and party costs, as they have been called since I was a child, and that means that he or she receives only shall we say about two-thirds of what has actually been spent, and perhaps he or she is lucky to get that.
The Rule Committee of the Supreme Court, which is not the same as the committee that we are talking about here, decided that we would destroy the four

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existing bases on which costs would be taxed; namely, party and party, common fund, trustee, solicitor and own client. We decided that we would substitute two simple bases: the standard basis, which is virtually the old common fund basis and which is a great deal more generous than party and party; and the indemnity basis, which is the highest basis of all and corresponds to the solicitor and own client basis. This proposal passed through the Rule Committee of the Supreme Court without a murmur, and the Rule Committee of the Supreme Court is a highly independent body, as is the Matrimonial Rules Committee. In addition to myself, it consists of the Lord Chief Justice, the Master of the Rolls, the President of the Family Division, the Vice-Chancellor, Lord Justice Dillon, Mr. Justice Hirst, Mr. Justice Steyn, Mr. Cherryman, QC, Mr. Aikens, barrister, and Messrs Howells and Crush, members of the solicitors' profession. That was a wholly beneficial reform that was introduced into all the Supreme Court actions except matrimonial actions.
Why not matrimonial? The answer is because the Rule Committee of the Supreme Court does not have jurisdiction over matrimonial work. The first reason why it is necessary to have Clause 64 in this Bill is that it is badly needed in order that matrimonial work, from having the status of a poor relation, a second-class citizen, can be brought into line with the rest of the Supreme Court, and of course that involves changes to matrimonial work in the county court also. In other words, if this clause is not allowed into the Bill, matrimonial work will continue to attract party and party costs, the old and obsolete party and party costs, if the client wins; and it will be constrained to retain a system which is wholly obsolete and which quite rightly has been changed for the whole of the rest of the Supreme Court. Is not that rather funny? We did not hear a word about it in any of the speeches.
Let us take that a little further before I come down to some of the arguments. First of all, I would submit that where you have two unassisted clients (which is a very rare case), it is wholly wrong to try to prescribe fees for them at all, as the existing rules do. It is out of place. If they choose to go to two or three counsel each, they can do so. If one wins, taxation will take place on the standard basis—the old common fund basis.
Let us suppose that an assisted client, which is the common case where a wife petitioner is petitioning, succeeds against an unassisted husband, either originally or, as is much more common nowadays, on access, custody or maintenance. If the Bill does not contain Clause 64, that successful litigant will only be able to get out of the unassisted and losing party the old party-and-party costs, because the new basis will not he applicable. The legal aid fund will be the poorer; so, I suppose, would be the practitioner who worked under the legal aid fund. If this clause is in, costs would be charged on the new standard basis; namely, the old common fund basis.
Or suppose we get a case where an unassisted litigant is taxing his own bill of costs against his own solicitor and counsel. That is not an uncommon situation. It cannot be done without Clause 64. The existing rules insist that the whole of the matrimonial work shall be dealt with in the same way and that you cannot differentiate among the parts of it.
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The noble and learned Lord was wholly wrong when he thought that the object of this was to enable costs to be saved on legal aid. There is no basis in that at all, subject to one point which I am about to make. If the taxpayer is to pay for the legal aid, he is entitled to have something to say about how much the cost should be. With great respect to my noble friend Lord Campbell of Alloway, the recent debate that we had about criminal legal aid has nothing whatever to do with this, nor has the proposed independent body. That is either a good thing or a bad thing, but it has nothing whatever to do with this amendment.
It is obvious that in one way or another, if the legal aid fund is to be met by the taxpayer, somebody on behalf of the taxpayer must have some control over what is paid. What at the moment is suggested is that it should be in the discretion of the individual taxing master in the individual case. That is not on. It may be that an independent body of some kind could be erected; there is something for that and something against it. We argued about that the other day. But somebody has to be able to say as for the whole country or parts of it that the taxpayer is entitled to be represented as to the kind of scale upon which remuneration should be made. It may be that the Lord Chancellor is the right body; it may be not.
But this clause has nothing whatever to do with the Lord Chancellor, which is something that the noble Lord, Lord Meston, had not taken on board. It is the Matrimonial Causes Rule Committee with which the clause is concerned and not any ultimate decision about rates for legal aid. It is the Matrimonial Causes Rule Committee which is being given that power. This is no poodle of the Lord Chancellor.
I read out the composition of the Supreme Court Rule Committee. Now let us look at the composition of the Matrimonial Causes Rule Committee: the Lord Chancellor, the President of the Family Division, Mr. Justice Ewbank, Her Honour Judge Counsell, His Honour Judge Wilson, Mr. Registrar Tickle, Mr. Registrar Lowis, T. A. C. Coningsby QC, and Messrs. Wickerson and Cleary of the solicitors' profession. They all have separate votes. The Lord Chancellor has one vote, but he cannot tell the President of the Family Division or even Mr. Wickerson how they are to vote. He is in a minority of one.
This has nothing whatever to do with the regulation of legal aid amounts, except that the rule committee will have power, as the noble and learned Lord, Lord Denning, pointed out in his contribution (which was the only one, it seemed to me, that had much relation to what this is about), to make prescriptions for different parts of the country and for different classes of work.
Incidentally, the rule that it makes is subject to parliamentary control by negative resolution. I shall be coming back to that point when I come to deal with subsection (1)(a). But the rule committee and not the Lord Chancellor or any other regulating body is that with which the clause is concerned. And the clause only gives it power to legislate for different classes of case—and I hope that I have satisfied the Committee that there are different classes of case, several of them—and for different parts of the country.

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One of the deplorable results of the anarchy which has come to pass in this field as a result of the obsolescence of the 1979 rules, although they are still in force, is that there is complete lack of consistency among individual registrars and among different areas of the country. That cannot be allowed to continue on any view. It is not only bad administration and bad finance; it is grossly unfair to the practitioner.
Incidentally, the Law Society is responsible for most of the misinformation fed into the Committee by four speakers, especially in its Bristol manifestation, which is rather less than Swindon fashion, if I may be allowed to derive my analogy from the Great Western Railway. The thing which has been pressed upon me very much by the Law Society is that there should be favourable London weighting. I dare say that that is a good thing. I should like to see it, but without the clause you will not get it. This clause is the clause that will enable London weighting to be put forward and enable consistency to reign once more throughout the country. If there is anything wrong with what is proposed, the rule committee will not pass it to begin with, and, secondly, Parliament will put in a negative resolution to go on with. There is complete control of the operation that is suggested.
It may now be time for me to deal with the alleged constitutional point. It is this. Clause 64(1) says that the rule-making authority:
"may amend or repeal any statutory provision relating to the practice and procedure of the Supreme Court or county courts so far as may be necessary in consequence of provision made by the rules".
The noble and learned Lord, Lord Denning, is quite right to indicate the limited extent to which that is possible.
The noble and learned Lord, Lord Elwyn-Jones, said on Second Reading, but did not make plain today, that that is mutatis mutandis verbatim the same as the parallel provision in the Supreme Court Act.
Lord Elwyn-Jones: My Lords, I mentioned it today without specifying it and I made a distinction between that provision and one affecting the family scene.
The Lord Chancellor: Let me pursue that point, because I think it is worth saying that the Supreme Court Act 1981 contains exactly the same provisions. It is only one of many Acts which does so. On Second Reading, the noble and learned Lord said, "Oh, it has been going on since 1981. That is not long enough". In fact, the same provision, verbatim, goes back to 1925–60 years. So far as I know, it has not given rise to one complaint. That is not surprising considering that the rule committees are composed as I have said, and considering that Parliament is in control, as I have also said.
It must be obvious—I am astonished that the noble and learned Lord, with all his experience of my office, has not been the first to point it out—that with an ongoing institution such as the Supreme Court and a constantly evolving and changing system of rules for its practice and procedure, we shall from time to time have to alter the statutory provisions relating to the practice and procedure in the statute. That is constantly done. The idea that we can go on with a rule committee which does not have that power which is to
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go on from year to year and that Parliament must be invoked by primary legislation every time is absolute nonsense.
What makes that even more astonishing nonsense is that as part of the reform of costs regulations in the new Order 62, which embodies the changes that I sought to introduce and did introduce through the Supreme Court Rule Committee only this year, the actual power was in fact necessary to be used and was used. It repealed and amended the schedule to the Legal Aid Act 1974, no less in order to provide for the dual system of standard basis and indemnity basis, which substituted the fourfold system of party and party, common fund, trustee and solicitor and own client. As recently as within the past 12 months that has been used without a squeak of opposition from the Law Society, the Bristol Law Society, the noble and learned Lord or anybody else. It is the most arrant nonsense that the Law Society has been talking. I am very sorry that it has been talking it in that way. Nobody could be more determined than I am to ensure that the legal aid system should continue to reward solicitors and counsel adequately.
In passing, may I say that the least worthy of my motives may be that my daughter derives a very large proportion of her income from the matrimonial work which she does from day to day in the Supreme Court and the county courts? So I do know something about what I am talking about. I should not be allowed to forget it for an instant. I am afraid that noble Lords who have spoken do not, and I therefore invite the Committee to reject the amendment.
Lord Elwyn-Jones: I confess that the scene is very remarkable. I receive passionate letters from the Law Society wholly controverting what the noble and learned Lord has said. I greatly regret that my noble friend Lord Mishcon, who spoke with a stronger knowledge of the solicitors' position than I have, has left—I shall not say he has fled the country—to avoid the anger of the noble and learned Lord. If he knew what was coming, I should not blame him if he had.
The communication I received from the Law Society shows that the noble and learned Lord has a certain amount of education work to do. It ends:
"The Law Society proposes that Clause 64(2) should be deleted and replaced by the following: 'for the avoidance of doubt it is declared that the power conferred by paragraph (b) does not include the power to make different provisions according to whether each or any of the parties is entitled to legal aid in connection with the proceedings"'.
The noble and learned Lord says that that is completely unnecessary and that there is no intention of having such a provision. I am also informed that at one stage the noble and learned Lord sought to give effect to the change of policy so that prescribing fixed rates for legal aid cases would replace the existing system under which independent taxing masters and registrars of the court assess the amount to be paid. The noble and learned Lord sought to give effect to that change of policy by drafting matrimonial causes costs rules. He had to withdraw from his intention to ask the rule committee to make such rules when it became apparent to him that the committee had no power to make rules which discriminated between work done for persons requiring legal aid and those who could afford to pay privately.

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I ask the direct question: is there now a power to discriminate in the matter of taxation and the award of appropriate costs between work done for persons requiring legal aid and those who can afford to pay privately? Are they both to be dealt with on exactly the same basis in relation to the same scales in respect of the same class of work? If the noble and learned Lord were to give that undertaking then not only should I not press my amendment but I should write some interesting letters to the Law Society.
The Lord Chancellor: The noble and learned Lord is correct to ask me the direct question, and I shall try to anwer it. Of course, the intention is that, unlike the present rules, any future rules will allow unassisted litigants to have their costs taxed by the taxing master, because there will be no prescribed scales for them at all. If they choose to employ three counsel, let them do so. I have no interest in what they charge, nor should I have; nor have I in relation to any other class of work.
I have no doubt whatever that some mechanism for representing the taxpayer in respect of legally aided work is necessary and will be in place. I have no doubt whatever that that mechanism will involve a different prescription in relation to legally aided work along the lines of all other legally aided work in the civil field. Exactly what the prescription will be and how it will affect the drafting of rules, I cannot say. The only difference between the status quo and the status after the passage, as I hope, of Clause 64 will be that the various classes of work in different parts of the country, with London weighting in one part and without it in another, and cases where clients can tax against own solicitor, will be separately dealt with. That is part of the scheme.
The control mechanism for the taxpayer cannot rest entirely on the Matrimonial Causes Rule Committee because it is not directly responsible to Parliament. There must be some other control. Obviously, if we are going to have legal aid taxation between two legally aided clients—that, I think, represents the standard case in matrimonial work—there will have to be a different order for costs from that which would operate as between two unassisted parties or as between the legal aid fund, on behalf of a successful assisted party, against an unsuccessful unassisted party. Those require separate prescriptions. They receive them in every other part of the Supreme Court and in county courts. We are merely putting the civil proceedings for the two kinds of jurisdiction—matrimonial and, let us say, personal injuries—on exactly the same footing.
There is no desire to discriminate against legal aid by those means. It is a pure question of defeating that unacceptable situation in which the 1979 rules have caused us to flounder and to substitute a more flexible and effective method within which the Matrimonial Causes Rule Committee can operate. If the Law Society wants to argue with me as to the basis upon which civil legal aid should be remunerated, we can no doubt enter into fruitful discussions. But this particular clause is needed whether they are fruitful or not.
4 p.m.
Lord Elwyn-Jones: With great respect to the sound a fury, we are still left—
The Lord Chancellor: Sound.
Lord Elwyn-Jones: Very well; sound will do for the purposes of my observations. I have never succeeded in quarrelling with the noble and learned Lord for long, and I do not propose to start at this advanced stage in our respective lives and careers. However, it appears that at the end of the day there will be a difference in the form of taxation. All that I can say at this stage is that I shall now take advice from the Law Society and from the Bar itself. I am sorry to be responsible for yet another shadow over the troubled life and world of the noble and learned Lord the Lord Chancellor, but the shadow must remain until I see whether there is any light which gives any benefit to him and which justifies me in not pressing the matter further. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
On Question, Whether Clause 64 shall stand part of the Bill?
Lord Meston: I do not intend to press the Motion that Clause 64 should not stand part. Indeed, I should like to say that I am particularly grateful to the noble and learned Lord the Lord Chancellor for his full and detailed response to Clause 64, which, as he will know, has caused considerable concern in both branches of the profession.
The noble and learned Lord mentioned the 1979 scales, how they have become out of date and how the taxing registrars have had to fall back on the discretion or escape clause. One can hardly quarel with a provision which allows for what he called consistency but which I would prefer to call reasoned inconsistency in different areas throughout the country, but the noble and learned Lord will understand that alarm has been caused by a provision that refers to distinguishing between legal aid proceedings and proceedings in which there is no legal aid. He will certainly understand if I express the concern that is perceived that it may happen all over again—in other words, that new standardised scales will be fixed which will again fall out of date and that the taxing authorities will again have to fall back on discretion and will find themselves, under new rules, confronted with a more limited escape clause. That is a matter of concern. We are, however, grateful for the noble and learned Lord's full and detailed response, and I do not propose to press matters further.
The Lord Chancellor: I should like to detain the Committee for a couple of sentences to deal with the remarks of the noble Lord, Lord Meston. Of coure, if the clause is accepted it will be open to whatever mechanism ultimately emerges to have annual up-ratings. The fear that the noble Lord expresses that the thing will be stuck in the way that the 1979 rules are stuck is, I believe, without foundation, and certainly it will not be stuck while I am here.
Lord Campbell of Alloway: I should like briefly to thank my noble and learned friend for his detailed explanation, to which I listened with great care and which I found wholly convincing without

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qualification. Irrespective of whether or not the Bristol Law Society finds it convincing I feel it right to say that I do, and without qualification. I am extremely grateful.
Lord Morris: I should like to ask my noble and learned friend a simple question in order to clarify my own mind. It is so simple as to be positively naive. My noble and learned friend laid much weight upon the great authority of the rule-making authorities in the course of his splendid and fascinating argument. Who appoints those rule-making authorities, and who ratifies the appointment of those rule-making authorities?
The Lord Chancellor: Certain members are ex officio. I speak in the presence of the noble and learned Lord. I am likely to be wrong in detail, and I shall be corrected if I am. Certain members, as I say, are ex officio. The Family Division president is an obvious case. There has, I believe, to be one High Court judge, two circuit judges, two registrars, two members of the Bar and two members of the solicitors' profession who are sent up from the Bar. Whether or not I have some veto over them, I do not know because I have never exercised it.
Lord Elwyn-Jones: I do not think so. They are a very highly respectable body, and I say nothing against them.
Lord Meston: I had intended to mention to the noble and learned Lord that I speak, I am sure, for the whole family Bar when I say that we would hate to be deprived of the pleasure of litigating against his daughter.
Clause 64 agreed to.
Remaining clauses and schedules agreed to.
House resumed: Bill reported without amendment.

Dockyard Services Bill
4.7 p.m.
The Minister of State for Defence Procurement (Lord Trefgarne): 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 Trefgarne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [Transfer of persons engaged in dockyard services transferred to private sector]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 1:
Page 1, line 5, after ("services") insert ("excluding any work with either radiological or nuclear implications").
The noble Lord said: If this amendment were to be accepted, the clause would read:
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"This section applies in relation to such services excluding any work with either radiological or nuclear implications for or in connection with ships or vessels",
etc. The note in the margin relating to this clause is also helpful. It reads:
"Transfer of persons engaged in dockyard services transferred to private sector".
Our purpose in this amendment is to say to the Government that whatever else they feel is best for the management of our dockyards, we believe that they should leave well alone so far as the nuclear aspects are concerned. Although the debate takes place in the shadow of Chernobyl, it is right, in the national interest, that we should debate the whole issue of radiological and nuclear safety. The Government may very well say that that is part of a piece and that the dockyards are the dockyards. They may argue that they want the dockyards to be managed differently and that it is not possible to separate the management of a part from the whole. I believe, however, that there is a powerful case for saying that the Government should think seriously about the matter.
We need to look at the kind of arrangements which the Government have felt proper and necessary in order to satisfy not only their own standards but also the civil population who live primarily in the Devonport and Plymouth areas, and of course at Rosyth. This is the present position. Take Devonport, for instance. Devonport is the home port and operating base for some 40 service ships, 10 nuclear submarines and numerous small craft. It provides a full range of support services for these vessels, ranging from accommodation, logistic support and recreational facilities to maintenance, refit and repair facilities. With the presence of nuclear submarine reactor plants it is necessary to ensure that the conduct of these diverse activities in the naval base does not have adverse implications for nuclear and radiological safety.
The essence of nuclear and radiological safety requires that there shall be, at present, in situ, a structured organisation with clearly defined responsibilities and lines of responsibility for the various aspects of nuclear and radiological safety; and awareness and understanding on the part of the members of the organisation of their responsibilities for nuclear and radiological safety; full administrative control of the tasks, with the requirements clearly defined in authoritative documents; and complete adherence to those administrative controls by the members of the organisation when executing tasks with nuclear and radiological safety implications. It requires an adequately manned organisation in which members' training, briefing and experience makes them competent to fulfil their responsibilities. I stress the last point.
The authorities within the nuclear base mainly involved in the operation, maintenance and repair of nuclear submarines are the captain, second submarine squadron; the captain, fleet maintenance; and the dockyard company. In addition, the captain of the port and the principal supply and transport officer provide support to nuclear submarines. All share nuclear submarine support facilities within the naval base, which comprise four fully-equipped tidal experts for the support of up to eight operational submarines,

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the north lock facility and the submarine refit complex. Can the Minister satisfy the Committee that by changing the arrangements for the management of the dockyards he is satisfied that the safety of those who live and work there can be assured? Unless this amendment is carried there will be literally no change. If there is to be no change then the question has to be asked: how can the Government be satisfied that those who will take on the new management responsibilities will be able to add to their experience the additional veneer needed to do this?
There is a definition of nuclear and radiological safety. Nuclear safety is defined as the state achieved when both probability and potential consequences of a nuclear accident have been reduced to acceptably low levels by sound organisation and good disciplines in design, construction, operation, maintenance, repair and training. Radiological safety, for the purpose of this situation, is defined as the establishment and maintenance of a safe environment and working conditions where there is potential for exposure to ionising radiations. I want the Minister in his response, and anyone else who will deal with this, to explain to me why it is necessary to transfer out of the existing arrangements those employees who are currently undertaking this crucial aspect of national safety. Why do they need to be included in this?
There is a very real basic issue here. At the moment in this country the people rest assured that when it comes to matters nuclear they are best left in the hands of the Government. I may have got this wrong, as I do from time to time, but I should like the Minister to tell the Committee whether he is satisfied that the arrangements for the change are such that whoever will become the recipient of the contract is able to fulfil the kind of obligations and responsibilities that I have outlined.
In a year or two we may have someone with responsibility—and that must be the Government—and someone, once removed, who is the managing company, with the job of managing the undertaking. I want the Minister to tell us how he has resolved the possibilities of conflict. There are possibilities of conflict not only in communication—where there is misunderstanding and the terrible accidents that we hear about in the nuclear field—but, sadly, in the breakdown of communications and understanding. As well as wanting to pin down who should be doing what, there is the question of the manner in which people are made aware of their responsibilities.
I also want the Minister to say something about the steps that he and his colleagues are taking to ensure that those who are tendering are competent to carry out these enormous responsibilities. I raised the point at Second Reading, but the Minister was unable to deal with that directly. However, I had been told that one of the potential tenderers had in effect sought from the MoD ways in which some kind of a crash programme might be provided for their employees to make sure that they were competent in the safety aspects of nuclear matters. We do not want crash or hurried programmes. The people of this country are entitled to be assured about whatever political imperatives the Government seek to serve by this change. I should have thought that there could be
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much argument on the political issues as to whether the past management has been successful, whether there has been waste, or whether matters can be done in a better way. We want some answers to those questions.
I have raised the issue about how nuclear safety is achieved in the bases at present. I want the Minister to tell us whether he can see any changes. It can be achieved by clearly defined individual responsibilities, matched where appropriate by the necessary authority; co-ordination to avoid concurrent activities which are incompatible for reasons of nuclear safety; comprehensive controls on all work and other activities with a bearing on nuclear safety; nuclear submarine support facilities for which the standards of design, operation and maintenance are adequate for nuclear safety; assessment of nuclear submarine berths to ensure that they are acceptable for public safety in the very unlikely event of a nuclear accident; adequately qualified and experienced personnel in all positions of responsibility with a bearing on nuclear safety; and an adequate standard of management including verification by managers of nuclear safety standards in their organisation, department, division or branch.
Therefore, I hope that I have raised the amendment in a properly serious tone, without causing too much alarm. In transferring management there is a major inbuilt separate area. I do not think that the Minister has paid sufficient attention (clearly, he has had little opportunity to do so until this Committee stage) to telling us that he is satisfied that future arrangements will be at least as adequate as those which we already have. If he tells us that in some way or another this amendment is either defective or unnecessary, I shall be very well satisfied with that answer. However if he simply tell us that he has his fingers crossed, and that he hopes—
Lord Trefgarne: Come on!
Lord Graham of Edmonton: The Minister says "Come on". If the noble Lord is able to assure the Committee that, with the arrangements that he and his colleagues have in mind, there is not the slightest possibility that in future the management of nuclear and radiological safety will not be as satisfactory as it has been in the past, I believe that many people, including myself, will at least be satisfied with that aspect of the Bill. I beg to move.
Lord Denning: I would not support this amendment. In its width it takes out pretty well the whole work of the dockyards. Let me take, first, work with nuclear implications; that would cut out all the work on nuclear submarines, which are one of the most important parts of a dockyard's work. To take out radiological implications would cut out radar, exocets and missiles, all of which have radiological implications. If you take out that work, you take out a great deal of a dockyard's work. So I believe that this amendment goes much too far.
If one looks at the contract proposed, whatever company takes it over, one sees that there are areas which exclude plant and so forth, which have no doubt been well thought out by the ministry, so any really

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dangerous work can be cut out. However, there is ample provision in the contract for that, and I should have thought that this amendment goes much too far.
Lord Mayhew: I think that there is a great deal of logic in what the noble and learned Lord has just said. Indeed, this would be a savage blow to Devonport. Nevertheless, I am still very grateful to the noble Lord, Lord Graham, for raising this question, for asking for assurances from the Minister and for elucidating a number of points on the question of safety and the qualifications of the would-be contractors.
There seem to be two different subjects here. There is the subject of safety and there is the subject of qualifications for refitting nuclear submarines. On the question of safety, if I understand it right, there will be no change. I should like an assurance from the Minister that the same people will be enforcing the strictest possible safety measures in the future as was the case before.
On the question of the qualifications of would-be contractors, it seems to me that the noble Lord, Lord Graham, is perfectly right: we need to be absolutely sure that those who are taking over this contract have experience in this field. I imagine that the very great majority of those who are now working in the nuclear field in the dockyard will remain. I see nothing in the Bill which would lead to any of them losing their jobs; at least, only a minute and insignificant number of them may lose their jobs. However, what is introduced is top management. I am sure that we would all like to be quite specifically assured by the Minister that no contract will be given to any would-be contractor who does not have experience and a good record in handling either nuclear weapons or nuclear propulsion. Otherwise, it would be wholly anomalous. I am grateful to the noble Lord, Lord Graham, for putting down this amendment in order that the Minister may explain the Government's position.
Baroness Vickers: I also am grateful to the noble Lord, Lord Graham, for tabling this amendment, and to the noble and learned Lord, Lord Denning. The noble and learned Lord took the trouble to visit Devonport and to see for himself exactly what was going on; he listened to lectures and asked a great many questions. Therefore, he is fully informed about that dockyard anyhow. This makes a lot of difference to Devonport, which has been in existence for 300 years and which has provided the livelihood not only of the people who work there, but of the whole City of Plymouth. The difference between Rosyth and Devonport is that Rosyth has a separate area for the Navy and a separate area for the dockyard. That does not apply to Devonport, which is a very much more complicated area. It is very big organisation, stretching over three miles, and that is something which people have to take into consideration when they think of tendering for this contract.
I am afraid that I do not agree with the noble Lord, Lord Graham. I do not believe that it is possible to exclude radiological and nuclear work from the remit of this Bill. No modern dockyard can manage without some high technology. However, I think that the Government owe it to the Committee, the Navy and
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the people of Plymouth and Rosyth to ensure that, as the noble Lord said, they proceed with an agency management team and that the incoming managers have the necessary expertise to take over this highly complex side of the dockyard's work. I agree with the noble Lord on that. For this reason, I believe that the Government should give serious consideration to the bid for the management contract for the Devonport dockyard by the existing management team. They are the people who really know what is going on and who have been working this dockyard for several years; they have the expertise. The organisation is at present led by the managing director, David Johnston, and he and his team obviously possess the necessary expertise to do this. Although I should prefer to see the running of the dockyard as a Government-owned plc, I firmly believe that they present the best choice for the future of Devonport.
I know that there is another amendment which deals with this particular matter, but this amendment calls in question the involvement of foreign companies making bids for the dockyard. I do not wish to see the American Foster Wheeler company take over the radiological and nuclear work that is carried out in the dockyard unless they can prove to us, to the Minister and to the Navy itself, that they really are expert in this work.
4.30 p.m.
Lord Mulley: I should like to support the amendment and the views of my noble friend Lord Graham. I accept at once that this would mean a dramatic change in the nature of the Bill and in what the Government propose. It is because I want to see a dramatic change in the Government's attitude that I support this amendment. Having regard to the problems that we have seen in the Soviet Union, quite apart from the military aspects of nuclear weapons, which are dealt with by the dockyard in Rosyth, one can assume that this could safely be given to a commercial contractor only if the people who are now doing the job continue to do it.
As noble Lords will know, at the end of each particular journey a Polaris submarine is dealt with by civil personnel. I think that we are unique in being the only power with nuclear weaponry which is in the charge of civilian employees. The uniformed services in the United States and France deal with nuclear weaponry. I cannot speak from knowledge of what is done in the Soviet Union, but I should be very surprised indeed if they do not exercise the utmost safety with regard to their military nuclear weapons.
It can make sense to go forward with these commercial contracts only if the same personnel, the same management and the same arrangements continue as now. If that is the case, why are we having the Bill? Why are we having all these arrangements? There is no reason to assume that in the new circumstances the same dedicated and skilled personnel on whom we have depended for so long will not continue to be there. I remember having difficulty myself for a short time when there was industrial action and I had to put the sailors in to deal with the temporary situation of a Polaris in order to maintain the position of always having one boat on duty.

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Of course, it is a matter of great discussion and dispute as to whether we will continue in the military nuclear role in that way, but we must assume that that is at least a possibility. I do not think anyone would expect nuclear propulsion to end. Nuclear-powered submarines in any event will continue—or so I imagine.
While I do not take the view that because of the tragedy in the Soviet Union at Chernobyl we should immediately stop all nuclear activity, I do believe—and I always have believed—that because of the enormous risks involved with radiological leakage and possible accidents through incompetence it may well happen that problems will arise, even with all the best safety measures. Certainly the prospect of a contractor being satisfied, as my noble friend said on Second Reading, with sending his people on a two-week course would terrify me if I thought that the nuclear refits, the nuclear weapons of the Navy, were going to be entrusted to people with two weeks' training in how to handle these very dangerous things. Admittedly, it would make a nonsense of what the Government propose. We accept that, and we have proposals to make better arrangements, I suggest, than, those now proposed. Unless we get an assurance, which I cannot see being given, that the same people will continue to do the same work (otherwise, why have the Bill?) I urge the Committee to support this amendment.
Lord Ironside: I am one of those who do not support the amendment, but before saying something about it I have an interest to declare in that I am connected with one of the companies which was invited to tender. As the noble and learned Lord, Lord Denning, said, I think, the nuclear submarine refit complexes in a dockyard are in fact a major part of ship repair, maintenance and servicing, and one has only to go to Devonport to see this. We live in the time of the submarine and of anti-submarine warfare.
At Devonport I spent something like eight hours in the refit centre, because I was locked in with the rest of the party from the industry who visited the dockyard to see what the management structure was like, what the facilities were like and what the prospects of the contract were. As the noble and learned Lord said, there is adequate provision in the Term Contract, and in the conditions of contract for the Government to be satisfied that the contractor they choose will be competent. There are companies in this country who are competent in nuclear design, in installation, in handling, in decontamination, and in nuclear health physics.
The company I am connected with have had the task of decontaminating HM Dockyard in Chatham, and I believe that this has been done successfully. I hope that the company will be accorded a degree of success in having done this and in having shown that the dockyard has been cleared of contamination.
I am sure that the company which is chosen as the winner at each of the dockyards, therefore, will be able to satisfy the Government that it is competent. I do not set much store by this story that one of the companies—perhaps a company in one of the consortia which have been set up—wanted to have a crash programme in nuclear physics, and that sort of
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thing. All I can say is that probably the company was seeking some advice to see what detail was involved within the dockyard and within the submarine refit complex, to assure itself that it would be able to comply.
Personally, I am very happy to leave this issue in the hands of the Government when they come round to selecting the contractor. Therefore, I see no need to support this particular amendment.
Lord Trefgarne: The effect of the amendment would, I suggest, be twofold. It would rule out refits of nuclear submarines not only by a commercially managed dockyard company but also, of course, by the government-owned public limited company if for any reason that option were adopted by the Government. That cannot be either sensible or what the noble Lord, or any other noble Lord who supports that option, would actually want. Alternatively, it would be necessary if the amendment were accepted either for nuclear work to be carried out by the only other contender, Vickers of Barrow, or for each dockyard to be split up, with responsibility for the nuclear work remaining under direct government operation while the remainder of the work (which the noble Lord is not suggesting should be similarly denied to the dockyard company) would be under commercial management.
I have to tell the noble Lord, Lord Graham of Edmonton, that concern has always been expressed by the Opposition in another place and by the trade unions representing employees in the Ministry of Defence that the dockyards should not be split into several units. For our part we have said that under our proposals we have no such intentions.
That said, I can of course understand why nuclear-related work should be a matter of particular concern. It is right that it should be. With your Lordships' permission, therefore, I will outline the arrangements which will be made, and I hope I shall be able to satisfy your Lordships that nuclear safety will be as high a priority under commercial management as it is now.
Perhaps the most important point is that the companies managing the dockyards will be required to operate under a nuclear site licence. As we have said before, that is not some sort of gentleman's agreement. It is a requirement imposed upon the company under the Nuclear Installations Act 1965. My department has been involved in very detailed discussions with the Nuclear Installations Inspectorate on this matter. The dockyard contractors will be responsible to the Health and Safety Executive for ensuring that the requirements in connection with radiation protection for the dockyard workforce are fully met under the terms of the Ionising Radiations Regulations 1985.
It has been said by those who are opposed in principle to the Government's plans that none of the companies which have expressed an interest in managing the dockyards has any experience in nuclear matters. I think my noble friend Lord Ironside countered that proposition. But perhaps I may add that Vickers Shipbuilding and Engineering Limited actually construct nuclear submarines. Foster Wheeler, who were in the mind of my noble friend Lady Vickers, have, as a member of Rolls-Royce and Associates, been associated with nuclear propulsion

31
systems. Babcock, the nuclear plant engineers, have been associated with the Trident weapon system. Balfour Beatty have constructed nuclear power stations, and have been responsible for nuclear waste management. The Weir Group have experience of steam and water systems for nuclear plants. Devonport Dockyard Limited—again much in the mind of my noble friend—are the company formed by senior managers at the dockyard, and their experience is not in question.
It is easy for people to suggest that nuclear work should be in government hands. But the facts I have given speak for themselves, and we should not forget the experience of other parts of industry—British Aerospace, GEC, NEI and others—which have experience in nuclear matters. When considering the dockyards it is important not to forget that the workforce which at present refits and repairs nuclear submarines will still do so after April 1987. It is commercial management that we are proposing to introduce.
I should say that the port admirals (or the naval base commanders, as they will be known) will be responsible for ensuring that the necessary standards of nuclear safety that are maintained throughout the naval base will continue unchanged. The current roles of the director-general, submarines, both as design authority and central plant control authority, and the role of chairman, naval nuclear technical safety panel, will continue unchanged. My department will retain responsibility for the transportation of new and used reactor cores and will retain existing approvals for disposal of radioactive waste.
In summary, in areas where my department retains responsibility the current high standards will continue. In areas where the contractors are to be responsible the current high standards will still be maintained, but they will be answerable to the Nuclear Installation Inspectorate of the Health and Safety Executive, and will be subject to the laws of the land.
For all those reasons, quite apart from the doubts I expressed earlier about the noble Lord's amendment meaning that even a government-owned plc could not refit nuclear submarines and that it could mean splitting up the dockyards, which of course nobody wants to see, I hope that the noble Lord will feel reassured and so will not wish to press his amendment.
Lord Lloyd of Kilgerran: I listened carefully to the arguments produced by the Minister in regard to this matter, and I wondered whether he has given full consideration to the scope of this Bill. The Title of the Bill says that this is,
"An Act to make provision in connection with any arrangements that may be made by the Secretary of State for or with a view to the provision by contractors"—
and now I come to the important words—
"of certain dockyard services".
The Explanatory Memorandum in its third line says:
"This Bill concerns arrangements which the Secretary of State may make for certain services carried out at the dockyards of Devonport and Rosyth to be provided under contract".
32
The argument of the Minister, so far as I understand it, is that the word "certain" in relation to certain dockyard services means that the whole of the dockyard services will be assigned to be dealt with by contractors. If one reads the Bill, one sees that the Government themselves have in mind some limitation, so that some of those services now undertaken in the dockyards should be reserved in some way to the dockyards as they are now.
Having regard to the vital importance, for both safety and marketing reasons, of nuclear and radiological matters, surely these are some of the services about which at any rate in the initial operation of this Bill the Government should be careful before handing over to contractors. However good the contractor with which the noble Lord, Lord Ironside, is concerned, and however wide the contractor's experience in this matter, there are large numbers of applications by contractors who have no knowledge of this important aspect.
I have had the privilege of travelling under water in a hunter submarine driven by nuclear power. These hunter submarines have been driven by nuclear power for 15 years, or even longer. Dealing with nuclear power, nuclear engines, and developments in nuclear engines is one of the aspects of services which the Government would not want the dockyards just to hand over to contractors without the great safety regulations which they have called to mind—the 1965 nuclear licence and of course the ionisation regulations of 1985.
The Government themselves visualise in this Bill that only certain services will be handed over to contractors. Is not this aspect of radiological work and certainly work with nuclear implications the kind of work that at any rate at the beginning of carrying the Bill into effect—say, for two or three years—should still be reserved to the dockyards, as this amendment suggests? I support the amendment on those grounds.
4.45 p.m.
Viscount Trenchard: The noble Lord, Lord Lloyd of Kilgerran, prompts me to say that, certainly in the years during which I had any experience, it was not by any means always true that either service personnel or civil servants in the Ministry of Defence proved that their reliability in maintenance was greater than that of many of those who had actually made the equipment. The Minister has mentioned the number of contractors who have experience in this field.
I should not like to argue the toss on a monopoly of great care being on the side of public civil servants or service personnel. I am not in any way condemning them; they are conscientious people—but so are companies which are subject to the controls that my noble friend the Minister mentioned. That alone satisfies me. But in addition to the controls he has specifically mentioned, and the things which the navy will continue to control, I would point out to the noble Lord, Lord Loyd of Kilgerran, that the whole aspect of product liability, of commercial liability, in every field has changed out of all recognition in the past 10 years, as well he knows. No commercial company in any field today can afford to take a single risk that may affect innocent workers, consumers, or what have you.
Lord Lloyd of Kilgerran: Perhaps I may say what a privilege it is to have inspired the noble Viscount, Lord Trenchard, to enter into this debate at Committee stage. May I say, with great respect to him, that what he is saying, in effect, is that the dockyards at present dealing with nuclear matters are not as efficient as British industry? With great respect, that is a generalisation to which I am sure the noble Viscount would not wish to adhere.
Viscount Trenchard: With great respect, if the noble Lord will read Hansard, he will see that I said nothing of the kind.
Lord Lloyd of Kilgerran: I am obliged to the noble Viscount for clarifying that position. I thought he was making a great case for the effectiveness of British industry in this field, and that therefore the Government are satisfied that by this transfer the implications raised by the noble Lord, Lord Graham, are irrelevant.
I come back to my main point. The Government had in mind transferring only certain services, and I should have thought that the services related to nuclear matters, which the dockyards are carrying out with such efficiency at the present time, should remain with the dockyards, as implied by the amendment of the noble Lord, Lord Graham.
Lord Crawshaw of Aintree: The amendment moved by the noble Lord, Lord Graham, is important. It involves nuclear measures, and not everyone is an expert on them. If the amendment were passed, and we faced the alternative that the Minister has given of the possibility of such things having to be done elsewhere, of course that would be a tragedy for Devonport. If there is any possibility of that happening, I certainly could not support it, because there are so many implications of this Bill which are not going to be to the benefit of Devonport that I do not want to add another one to them.
I believe that the point that has been raised is important because there is no guarantee that we will have continuity of service with people who have been transferred. If we do not get continuity of service, it may well be that we do not have the expertise and it may well he necessary to send ships to other places for refits. In those circumstances, I could not possibly support this amendment if it brings any danger at all of this work being moved from Devonport.
Lord Graham of Edmonton: I am grateful to all noble Lords who have contributed. Perhaps I did not take sufficient care in my opening speech to say in essence what it was we were seeking to achieve by this amendment. In essence, whatever other changes are envisaged in the Bill, this amendment seeks to leave untouched the arrangements in the dockyards for servicing our nuclear and radiological installations. In other words (and the noble Lord makes a fair point) that means splitting up the dockyards. That is right. What I am saying is that it is preferable to split up the dockyards than to transfer to a non-governmental agency the control, supervision and management of nuclear and radiological safety.
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I understand the Minister and his noble friends saying, "Be assured! There are no problems". I certainly did not take (as did the noble Lord. Lord Lloyd of Kilgerran) the remarks of the noble Viscount, Lord Trenchard, as in any way casting aspersions on the integrity or the ability of public servants. I stand on the fact that their record in this matter, as I know it, is impeccable. But the noble Viscount, Lord Trenchard, from his own experience introduced a nuance for a purpose; and that was simply to say that if I was introducing uncertainty as to whether I would put all of these eggs in the private contractor's basket, he was entitled to say that all may not have been well in the previous arrangements.
He did not specify, and I understand that. It is absolutely true. You have only to watch the current space programme, or the tragedies in Russia, in a tightly government-controlled nuclear situation. There is no guarantee whatever of the form of management or control. I have here a long list of the ways in which those responsible will be dealing with these matters. I have Annexe 2 to Annexe 9.1 in relation to nuclear safety at Devonport. There are a mass of provisions under which people who will become involved in taking over these things will have to satisfy the Government, the various levels and tiers, and so forth. I understand that. The first contribution that was made was that the noble Lord was satisfied that the Government would make sure that in the contract there were sufficient controls and disciplines so that the Government could satisfy us that they had taken all reasonable precautions.
I think that we have simply got to introduce the vexed question of nexus. The prime nexus in these matters of the people that we shall be dealing with is profit. That is their prime nexus. The reason they are in business is to make money. The reason we are in business is to try to look after the safety of the nation. If I am told that, given a choice between safety or making money, it always will be losing money and maintaining safety, I should be astounded; because these are calculations. Calculations are made. They are called commercial judgments. And there will be opportunities where, because the cash nexus comes in, that consideration in the future will be present whereas it was not present in the past. You might say that that was a wrong thing; that there ought to have been more efficiency, more discipline; that there ought to have been more concern about the costs in these things. And that may be a fair point.
What I am arguing for is that it is not right and proper to take away from an existing arrangement; and that is the servicing, control and management of our radiological and nuclear installations being as they are. I do not make a case in general for maintaining, as we shall on later amendments, that we should make no change whatsoever. We are opposed to the Bill but we are trying to alter it in various ways by other amendments and we shall come to those.
I simply say that, so far as nuclear and radiological installations are concerned, there is a different situation. Of course, the last thing I would want to decry is the efforts of companies—and I made a quick note: Vickers, Wheelers, the Weir Group and Babcock. They are all highly respectable and very efficient, very cost-conscious and very safety-

35
conscious people. They have some experience. But no one has the collective experience of the Government. They all have a little bit of a little bit and they may be the experts in parts, but no one has the experience of doing what we are talking about in this amendment that the Government and the MoD have. No one has it, although they may aspire to it. In the meantime, I repeat that we must keep our fingers crossed. If there is to be insistence, then there could be delay and procrastination. I am satisfied that this is a proper amendment.
4.56 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 50; Not-Contents, 101.

DIVISION NO. 1

CONTENTS

Ardwick, L.

Jenkins of Putney, L.

Barnett, L.

John-Mackie, L.

Birk, B.

Kilbracken, L.

Blyton, L.

Listowel, E.

Bottomley, L.

Llewelyn-Davies of Hastoe, B.

Brockway, L.

Longford, E.

Bruce of Donington, L.

Lovell-Davis, L.

Caradon, L.

Melchett, L.

Carmichael of Kelvingrove, L.

Molloy, L.

Cledwyn of Penrhos, L.

Mulley, L.

David, B. [Teller.]

Nicol, B.

Davies of Penrhys, L.

Oram, L.

Dean of Beswick, L.

Phillips, B.

Denington, B.

Pitt of Hampstead, L.

Elwyn-Jones, L.

Ponsonby of Shulbrede, L. [Teller.]

Ennals, L.

Ewart-Biggs, B.

Shepherd, L.

Falkender, B.

Stallard, L.

Fisher of Rednal, B.

Stewart of Fulham, L.

Gallacher, L.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Strabolgi, L.

Hatch of Lusby, L.

Taylor of Mansfield, L.

Hughes, L.

Underhill, L.

Irving of Dartford, L.

Wallace of Coslany, L.

Jacques, L.

Wells-Pestell, L.

Jeger, B.

NOT-CONTENTS

Aldington, L.

Drumalbyn, L.

Ampthill, L.

Dundee, E.

Auckland, L.

Eccles, V.

Belhaven and Stenton, L.

Ellenborough, L.

Belstead, L.

Elliott of Morpeth, L.

Birdwood, L.

Elton, L.

Boyd-Carpenter, L.

Faithfull, B.

Brabazon of Tara, L.

Fanshawe of Richmond, L.

Brookes, L.

Fortescue, E.

Brougham and Vaux, L.

Fraser of Kilmorack, L.

Broxbourne, L.

Gainford, L.

Butterworth, L.

Gardner of Parkes, B.

Caithness, E.

Gibson-Watt, L.

Cameron of Lochbroom, L.

Glanusk, L.

Campbell of Alloway, L.

Glenarthur, L.

Campbell of Croy, L.

Halisham of Saint Marylebone, L.

Coleraine, L.

Constantine of Stanmore, L.

Holderness, L.

Cox, B.

Home of the Hirsel, L.

Cullen of Ashbourne, L.

Hooper, B.

Dacre of Glanton, L.

Hylton-Foster, B.

Davidson, V.

Ironside, L.

De Freyne, L.

Killearn, L.

Denham, L. [Teller.]

Kimball, L.

Denning, L.

Kinloss, Ly.

Dilhorne, V.

Kinnaird, L.

36

Layton, L.

Romney, E.

Long, V.

St. Aldwyn, E.

Lurgan, L.

St. Davids, V.

McAlpine of Moffat, L.

Sandford, L.

Macleod of Borve, B.

Seebohm, L.

Mancroft, L.

Selkirk, E.

Manton, L.

Sempill, Ly.

Margadale, L.

Shannon, E.

Marley, L.

Skelmersdale, L.

Massereene and Ferrard, V.

Strathspey, L.

Maude of Stratford-upon-

Sudeley, L.

Avon, L.

Swinton, E. [Teller.]

Merrivale, L.

Thorneycroft, L.

Mersey, V.

Trefgarne, L.

Middleton, L.

Trenchard, V.

Molson, L.

Trumpington, B.

Morris, L.

Ullswater, V.

Newall, L.

Vaux of Harrowden, L.

Pender, L.

Vickers, B.

Peyton of Yeovil, L.

Vinson, L.

Porritt, L.

Vivian, L.

Portland, D.

Ward of Witley, V.

Rankeillour, L.

Westbury, L.

Rawlinson of Ewell, L.

Young, B.

Reigate, L.

Ypres, E.

Renton, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.4 p.m.
Lord Mulley Lord Mulley moved Amendment No. 2:
Page 1, line 17, at end insert—
("( ) An order under subsection (1) above shall not be made until the Secretary of State has established a scheme to operate such dockyards under a trading fund and such a fund has been in operation for two years.").
The noble Lord said: I beg to move Amendment No. 2. With it, it may be convenient to discuss the consequential amendment, No. 21, which simply defines what is meant by the trading fund. We established for the Royal Ordnance factories the very satisfactory system of a trading fund, and I personally much regret that the Government, with their passion for privatising everything they can lay their hands on, have seen fit at least to prepare for the privatisation of our Ordnance factories, some of which go back several hundred years. I think we must be the only country which is going to put the whole of our faith on the supplying of our armed forces on international contracts. Perhaps it is fortunate that Argentina seems to have done that and that therefore several of our ships are still in service, whereas if the explosives had worked they would not have been.
Frankly I think it is an impossible situation for the basic support of our services, whether it is the provision of small arms in the ordnance factories or, very significantly, the servicing and refitting of our Royal Navy. That is a vital matter for the defence of the nation; and to take the kinds of risks involved in any arrangement that puts it outside governmental control is in my view to be opposed and regretted.
The trading fund concept, as I said, has worked in the Royal Ordnance factories by giving a commercial standard and having commercial management. I accept that it is much easier in that context because the Royal Ordnance factories were able to quote for a contract for producing so many weapons or so many rounds of ammunition and so on, whereas the nature of the dockyards is more complicated.
As was explained by several speakers on Second Reading, until the actual ship or submarine goes to the dockyard and is taken apart it is not at all clear what the full extent of the necessary repairs is likely to be. First, there has to be the stripping down of the necessary parts of the ship or submarine, and then someone has to come in and give a certificate of what has to be done. Then there has to be an estimate given for that. So I think it is going to be a very lengthy and, it seems to me, commercially unsatisfactory procedure. On the other hand, with a government-owned organisation such as the trading fund you would have the commercial management and yet there would not be the element of having to have a price in advance for every aspect of the work which is likely to be involved.
In the same way, as I mentioned on Second Reading, if you have faith in your garage mechanic who services your car you do not have to get an independent estimate if he rings you up and says, "Frankly, it is not just a service that you need; you will soon need a new clutch". You do not then get someone in to give an estimate of the extent of the work and ask for the price, and then go round to get a price from somebody else. You would never get your car back in service if you did that. If you cannot trust the garage you find a garage that you can trust, and if you have your own garage—which is really what the Government would have if they had their own trading fund—that would seem to me to be a much more satisfactory basis.
Of course I accept that it would be rather better perhaps not to have a trading fund but to have a government organisation, such as, say, the Manpower Services Commission or something else, if they want to get the organisation of the dockyards subject to public control—and the Public Accounts Committee have had some very forthright words to say about the lack of public accountability that may stem from the proposals in this Bill—but an organisation removed from the restrictions of the Civil Service regulations. That is one of the problems where you have highly skilled people dealing with radiological and nuclear matters. I could not have voted for the first amendment, if I had not been satisfied that by a trading fund, or something similar we could make a proper arrangement and separate management from Civil Service restraints, although you never completely get the dockyards away from either the Treasury or the Navy. That is because the Navy has to get its money from the Treasury and the amount that it will have to spend in a year will be governed by the Ministry of Defence Vote.
There have been all the problems that have arisen over the years, because of Treasury control, the rates of particular grades of the Civil Service and also, if I may be blunt, the decisions of the Navy, often for very good operational reasons, whereby a ship that is in the plan, for which spares and manpower have been set aside to do a particular job, is withdrawn at the last minute, or indeed another ship which urgently and unexpectedly requires attention is brought in and asked to have priority. You cannot run a commercial organisation on that kind of basis. But if the commercial considerations are coming first, the Royal Navy and the defence of the realm will have to take
38
second place, which is not a proposition that I find at all attractive. For that reason, I beg to move.
Lord Denning: The trading fund is only one of several options your Lordships have to consider, and I hope you will bear with me if I tell you something of the other options, because your Lordships will have to decide which option should be accepted. May I say that the Bill gives no clue whatever to the options. As I said on Second Reading, it is very obscure. None of your Lordships reading the Bill or, I venture to think, reading any of the amendments could understand in the least what the options are which your Lordships have to consider. The Bill is concerned with only one thing—the compulsory transfer of the workforce against their will to a new organisation. All its provisions apply to the compulsory transfer of the workforce to a new organisation.
I should like to tell the Committee why the Bill is so confined. It is because of the constitutional position of the Royal Navy and the royal dockyards, too. Their constitutional position is that they depend not on the will of Parliament. They are owned, run and managed by the Crown, under the Royal prerogative of the Crown as it has come down through the centuries. That is why it is called the Royal Navy. That is why it is called the Royal Dockyard. May I just say that the Royal prerogative gives great power to the Crown, and by that I mean the Ministry of Defence. They own all the assets. They own the quays, the plants, the jetties and everything else in the dockyards and, by virtue of that Royal prerogative, they can sell, lease or lend whatever they like of those assets.
One qualification in ancient days, in the time of Charles I, was that he claimed that the Royal prerogative in respect of the fleet extended not only to maintaining and running our fleet, but also to levying taxes himself. In order to run the fleet, he sought to levy a tax which was called Ship Money. A great Member of the other House, John Hampden, objected to that. He said that even the Crown could not levy taxes on its own authority. That could be done only by the authority of Parliament. I am afraid that John Hampden's contention was over-ruled. The judges of that day held that the Royal prerogative extended even to levying money for the defence of the realm for the fleet. It was only some 200 years later that the Bill of Rights said, "No, not even the Crown can levy money without the authority of Parliament". That is why, to this day, if the Ministry of Defence need money, they have to get it on the Vote of the Commons. It is the Commons who eventually pay money and tell the Ministry of Defence, "You can have this money for the defence of the realm".
5.15 p.m.
But there is one other exception to the prerogative, and that relates to the workforce. On that, I go back to a modern case in the common law which says that none of the workforce can be transferred to another employer without their consent. That was made clear by Lord Aitken in the great case of Nokes v. Doncaster Colliery in 1940 Appeal Cases at page 1014. He said:
"Every person has the right to choose for himself whom he will serve. That right of choice constitutes the main difference between a servant and a serf".

39
So there even the Crown cannot transfer the workforce of the Royal Dockyard compulsorily, unless Parliament approves of that transfer.
It is for that reason that the Bill is brought before this House, to enable the Crown to transfer the men compulsorily without their consent to a new employer. Let us face it—that is the reason for the Bill, and it is especially appropriate in regard to the workforce at the Royal Dockyard at Devonport. I have been there and I know that from generation to generation for the last 200 years they have been in the service of the Crown, and proud they are of it. They told me that their fathers and grandfathers have worked in the Royal Dockyard, and how proud they are of it. They are not to be transferred to another employer, such as a company under the Companies Act, without their consent unless it is done by the authority of Parliament. That is why the Bill has to come to this House. The sole reason is to enable the Government to transfer them to a new company without their consent.
I have stated the basic constitutional position. There are four options which arise under the discussions, and maybe under the Bill, as to when and how this compulsory transfer is to be made. The first option is outright privatisation by selling the whole of the dockyard to a purchasing company and transferring all the workforce to that company. That is open to the Government and to the Bill as it stands, but it should be ruled out absolutely for both strategic and national reasons. If the Crown should contemplate it, I would quote against them the words which Shakespeare put into the mouth of John of Gaunt:
"This land of such dear souls, this dear dear land …
Is now leased out, I die pronouncing it,
Like to a tenement or pelting farm".
We must rule out altogether outright privatisation. We must rule out the Government being able to sell our great royal dockyards lock, stock and barrel to someone else.
The second option is what we have under this amendment—the trading fund. That is a very attractive submission because a trading fund does not involve any transfer of the workforce. A trading fund is set up under the trading funds legislation of 1971. It has been done in regard to the ordnance people. It involves accounting or financing. You have, so to speak, a loan to the fund out of which the fund pays the expenses and then the fund organises the dockyard so far as it can on a customer-supplier basis. It pays out and makes the accounts. The essential thing is that it is run as it was before but managed as far as it can be commercially. The important thing is that the men remain servants of the Crown or, as is sometimes said, civil servants.
That is a very attractive proposition because you do not need to transfer the workforce at all. You do not need to do anything without their consent. You can get it done commercially. It is a most attractive proposition. But it has been ruled out by the Government, and I can understand why—and I have been down to Devonport. It is because the civil servant's hand is almost a dead hand on development and enterprise in a dockyard. I am afraid that it is all the red tape and the rules that we have been used to all the time. I
40
sympathise with the Government. Although the trading fund has its attractions, especially in regard to the workforce, nevertheless if the dockyards are to progress the Government take the view—and there is a lot to be said for it—that we cannot go along with that old civil servant machinery. All those I have spoken to agree that change is necessary. We must get away from the Civil Service attitude. The Government say that it must be reorganised and there must be a restructuring. As my noble friend Lord Trefgarne said on Second Reading, fundamental change in the dockyards is necessary if their long-term future is to be assured. "Fundamental change"—and I am afraid that the trading fund is not sufficiently fundamental enough. That is only the second option.
I go to the third. This has the forefront in the Bill. It is to have what I may call a two-tier structure of limited companies. One company will take the assets—all the cranes and jibs. It will have a licence for perhaps seven years to operate all that plant and equipment. It would be a licence quite often determinable earlier on, but that is all the company which operates the assets would have. There would be another company the only function of which would be to employ the workforce not merely on licence for seven years but permanently, indefinitely. I shall bring in later amendments, but I think that this proposal, this third option, is not in accordance with Community law. I shall develop that point when I come to move my amendments.
But I want to tell the Committee of that third option not only to say that I object to it in point of law but also to say this—and I give this parallel. They are really seeking to separate the company which runs and operates the dockyard from the workforce. I say that they are both one undertaking—the assets and the plant and the men who work it. How can you separate it? Both must be transferred to one company and to no one else. As I said in my illustration, it is like a beehive. It must be transferred as a whole, or not at all. You cannot transfer the hive to one beekeeper and the bees to another. You must transfer bees and hive together to one beekeeper. That third option of a transfer of the assets to one company and the servants, the workforce, to another is out in my opinion, and I hope to show it when I come to my amendments. If so, I come to the fourth option, which is much simpler.
The fourth option is to have only one company—a commercial company—to take over the dockyard undertaking. That is much desired and advocated by the Government. Let there be one company. The Goverment say, "We are not going to transfer any of the assets to that company. We are not going to sell them the assets. We are not going to let them own it. We are not even going to give them a lease". The Government, quite rightly for strategic reasons, say "We are only giving them a licence, a licence to operate the plant and so on, and also to employ the men for the period of the licence." There it is. It is not at all a bad proposition. The licence would be for seven years at most. It could easily be determinable earlier if there was any emergency or the threat of it, or if the contractor did not refit the ship in time.
In a way, it is almost an experiment. When the licence comes to an end, the workforce simply reverts to where it was before. That is the fourth option. It has

41
advantages. It would enable the Government to try it out for a number of years. If successful, the licence can be extended indefinitely to that one company or to a successor company. If it is not successful, the workforce would be protected by reverting to government service. That is the fourth option, and I shall come back to it later.
The fourth option has the advantage of there being one company. It is most vital, if you can, to get the workforce to co-operate. If any of these options are not accepted by the workforce, it can disrupt enormously the work in the dockyard. The workforce can delay it. The ship would not be refitted to time, and the like. As far as it is possible, any option ought at least to have the acquiescence of the workforce; otherwise, it is bound to disrupt the whole option.
To secure as much co-operation as one can from the workforce, would it not be as well to go to that modern but very well-tried device of worker shares? One remembers how, in the case of the National Freight Corporation, people protested at the beginning, but how successful it was! The workers have a stake in the company itself and they have an incentive to work hard and to make profit. It has not only been proved by experience, but also it has been encouraged by the Companies Act. In provision after provision in the Companies Act it is provided that the directors shall do all that they can to involve the workforce in the policies and affairs of the company, in particular by the issuing of shares.
If one has the fourth option of one company taking over for a licensed period, and one has worker shares, one may achieve if not full co-operation, then at least the acquiescence of the workforce. It is essential to achieve that; otherwise they will not go with the scheme and the whole thing will fail. I suggest therefore that the fourth option needs consideration.
I shall return to that point when we reach my own amendments, but I may say that all the later amendments make sense with the fourth option. Indeed, the very next amendment is about worker shares. There are other amendments on the question of whether or not the company should be government owned. All those matters will be dealt with in later amendments, but I stress that the proper option to be taken is not the two-tier option that the Government are advocating in this Bill but the fourth option of one Companies Act company taking over for a licensed period. We can talk later about how that company is to be controlled, whether it is to be Government-controlled, or whether there are to be worker shares. All that can be decided later.
I have outlined the whole problem, and I am afraid that I have to say to the noble Lord, Lord Graham, that as much as I sympathise with the suggestion of a trading fund, and although there is much to commend it, I feel that the Government's reasonings against it may prevail. At all events I am afraid that I would not support the amendment, as it stands, to go over to a trading fund.
5.30 p.m.
Lord Trefgarne: Under this amendment the dockyards would have to be operated under a trading fund for at least two years before the provisions of the
42
Dockyard Services Bill could be put into force. The trading fund was, of course, one of the options that we set out in the open government document that we issued in April 1985. As the other amendment suggests, the trading fund concept, which is essentially a financial arrangement, was created by the Government Trading Funds Act 1973. As the Committee may know, that Act specifically refers to the Royal Dockyards. No other legislation would, therefore, have been required to create a dockyard trading fund.
Since successive reports over the past 15 or more years have agreed that fundamental change was needed in the way that the dockyards are run, one surely has the right to wonder why the previous Government did not introduce the trading fund concept in the dockyards over the years 1973 to 1979. Why, if they decided not to do so then, do they propose it now? We know, of course, that it is the option preferred by the trade unions; it is certainly the option that involves the least change from the present arrangements and one that ensures that the workforce remains in the Civil Service.
I do not for one moment suggest that the trading fund concept is flawed. I do, however, say that in the context of the dockyards it is not sensible for the organisation to have to operate within the Civil Service. The Committee will recall that in moving the Second Reading I said that the annual trading turnover of the dockyards is £400 million; that, by anyone's reckoning, that is an enormous industrial undertaking; and that it is not one that lends itself to working within the restrictions that the Civil Service machine necessarily imposes.
During the Second Reading debate the noble and gallant Lords, Lord Lewin and Lord Hill-Norton, were as one in arguing against the dockyard workforce remaining in the Civil Service. The noble and learned Lord, Lord Denning, agreed with those sentiments then and has agreed with them today, and the option preferred by my noble friend Lady Vickers, who has not yet spoken, would entail a workforce outside the Civil Service.
The amendment continues to propose the line of least change—a trading fund—with the workforce necessarily remaining inside the Civil Service. But under this amendment we would have another two years (to add to all the earlier ones) when management would not have full local autonomy; another two years when the dockyards would not have the full benefit of a commercially disciplined environment; another two years when the relationship between customer and supplier, though perhaps sharper than at present, would not be on a contractual basis; another two years without the structure to encourage diversification and entrepreneurial zeal to attract new work; and another two years working under the restraints necessarily imposed by operating within the Civil Service.
I hope that the noble and learned Lord, Lord Denning, will forgive me if I do not at this moment deal with the details of the four options that he put to the Committee. I will be ready to respond in a little while, when we reach the relevant amendments. In the meantime I hope that the Committee will reject the present proposal.
Lord Mayhew: The noble Lord the Minister says correctly that this is the option that involves the least change. That is certainly true. The amendment is also put forward with a reference to two years, in the sense that it is something that one might try without necessarily prejudicing, for instance, the fourth option that the noble and learned Lord, Lord Denning, has so eloquently recommended to the Committee.
Is it necessarily foolish to suggest a period in which we apply to the dockyards the same system that worked with remarkable success wth the ROFs? It would to some degree increase the distance between the customer and the supplier. It would to some degree increase accountability, and it would to some degree increase freedom of management. It would involve some of the changes involved in the other options; for example, a new system of accounting management.
It seems to me not necessarily foolish to proceed on that well-known and recommended (by a number of reports) option, without prejudicing a later decision. Judging by experience, I thought that it was good Conservative philosophy that I was preaching, that one should not go first of all for the most drastic solution—the fourth option—but that one would experiment and go empirically. We have a lot of experience of the trading funds.
I would say this, too. It would be easier to judge between the options if the Government would only give some indication of their comparative costs. We still do not know what would be the savings and the extra costs of the government scheme. We have not been told. Therefore we cannot make a comparison if we are not told the cost of the alternative, the trading fund scheme. Why should not the Government estimate the savings of the trading fund? We have had a lot of experience. After all, the Government are making their case for this Bill on efficiency and cost saving and yet say they cannot judge between these different options on the basis of cost because they cannot work out the costs. We shall come to this point again on a further amendment relating to cost.
In the meantime, I think my noble friends would wish me to say that we do not necessarily regard this amendment as the best solution but we do not see any harm in starting this way without prejudicing option four which the noble and learned Lord, Lord Denning, recommended.
Lord Crawshaw: My solution would be a plc, but that does not seem possible at the moment. This amendment has some merit in it. I certainly would be prepared to support it and I urge my colleagues to do the same. Possibly it seems to have more merit because it has so many more attractions than the scheme the Government are putting forward. I must say that it appals me to think that the company will be comprised of bodies and nothing else. There was a time in Liverpool when we ran the docks on bodies—the "welt" system in which people went round and hired men day by day. This will not be day by day but the fact remains that the Government's legislation means that from time to time these people will be taken over, or possibly taken over, by someone else. I cannot for the life of me think that that will result in a settled workforce.
44
Of what exactly is this company to comprise? It is apparently to be a company of people without assets, because those will be in the principal company, the contracting company. That has already been pointed out and the noble Lord, Lord Trefgarne, has discussed this matter with the noble and learned Lord, Lord Denning. There are complications because the legislation might be cutting across European Community legislation. It may well be that some of the matters we are assuming will not apply. I believe there will be a lot of confusion arising from the manner in which the Government are putting this project into operation.
While the amendment before us is not my idea of a solution, it is certainly an improvement on the Government's proposals. It would certainly bring less trouble to the dockyards. I urge the Minister to realise that. I know that the noble Lord the Minister has tried to satisfy the fears of the dock workers, but they are not satisfied. I cannot think of anything worse than going into an enterprise with people who feel that their interests have not been safeguarded. The system that the Government are using is open to doubt. The amendment has been proposed to tell us that something does not exist; and we have to pretend that it does exist. Whether that is a contravention of European legislation which deals with the transfer of people in industry I am not 100 per cent. certain, but it certainly opens up the possibility that there might be objection in the courts to the manner in which the Government are implementing this Bill.
Although I am not 100 per cent. behind the amendment, I certainly support it in preference to what the Government are proposing. There is not the slightest reason why it should be on a permanent basis. Why not give the scheme a couple of years to see how it operates and to see what changes are required and whether a plc would be the answer? It is an option worth considering and I urge my colleagues to support the amendment.
Viscount Trenchard: May I briefly, with two years' experience of the Royal Ordnance factories working under a trading fund, complicate the problem by saying that this is certainly not a perfect option? The noble and learned Lord, Lord Denning, put his finger on the problems of the trading fund. I certainly have experience that those problems existed in a changing age. The safety, wellbeing and future of the Royal Ordnance factories and of the equipment they supply—and, thus, of the services; the army in particular—would not be safeguarded under the continuity of the trading fund operation.
I say to the noble Lord, Lord Mulley, that I understand and sympathise with his car analogy, where the car firm tells him that something needs repairing but he does not know whether it does. I am frequently in the same position. I am told that my brake linings are down to 80 per cent. but sometimes I do not have them done and I find that they are still 80 per cent. worn on the next service.
However, we are not talking about that aspect. The continuity people in the MoD are there, The technical staff of the Royal Navy are there. I had a lot to criticise when I was at the MoD about the lack of continuity of key staff in the procurement executive and

45
elsewhere—both service officers and civil servants. Those who have sung the praises of the existing system—and by no means everyone has—should realise that people in key jobs who actually control quality and safety are, on average, there for three years. I believe that on the whole private enterprise has a greater record in the area of continuity in key skilled positions. I mention that in passing but I intervened on this amendment on the trading fund to say that, for the reasons advanced by the noble and learned Lord, Lord Denning, I do not believe that the trading fund option is a sound option.
5.45 p.m.
Lord Graham of Edmonton: I have only a few comments before my noble friend reaches his final conclusion. The Minister made a fair point as to why, given the authority of the 1973 Act, we did not come quicker to the concept that a trading fund solution for the dockyards was the answer. Surely the Minister must acknowledge that the first experiment, or experience, was the Royal Ordnance factories which came following the 1973 Act. The period up to 1979 was not a long period—
Lord Trefgarne: It seemed long.
Lord Graham of Edmonton: It may have seemed long to the Minister, but not half as long as the subsequent period has been to me. We now have a situation where the options are open. The noble and learned Lord, Lord Denning, quite fairly and comprehensively told us what are those options. The Minister fairly referred to the workforce. The noble and learned Lord, Lord Denning, pointed out how crucial is the workforce. It is not that the workforce would be unhappy with any other solution. The workers are realistic and are saying that their preferred solution would be the trading fund. In other words, given that there has to be change of a fundamental nature and I say it should be to a trading fund. Although people are pooh-poohing how fundamental it is, it is a fundamental change from the present.
Not only is the workforce on this side, but I have here a transcript of a presentation by Plymouth City Council to the Defence Standing Committee on 5th February. The concluding remarks by Councillor Creber, who is the leader of Plymouth City Council, were:
"We believe that the introduction of a commercial accounting concept coupled with the separation of client and contractor—along the lines of the DLO legislation for local authorities—and a more vigorous marketing approach would place the dockyards on a firm platform that will carry us through to the next century and ensure that the Defence of the Nation is not in any way placed at risk. Failing this approach we could support the Trading Fund concept as the forerunner to the establishment of a Companies Act company".
Overall we are opposed to commercial management for the reasons we have outlined. We could all support the trading fund concept. It was the result of a deputation from all the political interests and many others. But if the Minister wishes, not disrespectfully, to put aside the views of the workforce and the local community, so be it. There are other powerful reasons which no doubt he will advance. When his colleague the noble Earl, Lord Gowrie, introduced the Government Trading Funds Bill on 26th July 1973,
46
the noble Earl explained why the Royal dockyards were a candidate for trading fund status and why this was written on the face of the 1973 Bill:
"The Government consider that trading funds may be appropriate for organisations which have two principal characteristics. The first would be in situations where trading activities form a significant part of their functions, as in the examples I gave; secondly, where the nature of their activities overall is such that the Government consider that they ought nevertheless to remain the direct responsibility of Ministers and not be hived-off as statutorily distinct bodies … But we thought that it would help Parliament if we named on the face of the Bill the organisations for which trading funds are being seriously considered".—[Official Report, 26/7/73; cols. 1951–52.]
To be fair, the Minister did not dismiss the concept of a trading fund; he declined it in the circumstances prevailing at that time. I simply remind the Committee that the former Secretary of State Mr. Michael Heseltine also spoke about the future operation of the dockyards, and a trading fund would meet the three criteria which he outlined: it would establish a proper customer-supplier relationship between the dockyard and the Navy; it would mean that managers could be given the freedom to manage; and it would ensure the introduction of improved accounting procedures. It would also mean that the vital strategic assets of the dockyards could be retained under direct parliamentary control. Those are all powerful reasons which are enshrined in the concept of the trading fund.
Lord Mulley: I think that there is a lot of misunderstanding about what the amendment actually proposes. First of all, it proposes only that there shall be the experiment of a trading fund. As my noble friend Lord Graham of Edmonton has just underlined, a trading fund was proposed under an Act brought forward by an earlier Conservative Government. The noble Lord the Minister asked why the Labour Administration did not introduce such a measure in the royal dockyards, and certainly in my time we did not. I accept that we did not. It is not an ideal arrangement; but we did not propose to give away the control of the Royal Navy's servicing and support of the fleet. What would have been the situation at the time of the Falklands if we had had this kind of half-baked scheme, which I think no one but the former Secretary of State could possibly have devised. I think I said at Second Reading of the Bill that it was not perhaps insignificant that none of the Members in the other place who had held office in the Ministry of Defence, including the former Secretary of State himself, had found it convenient to be there to support the Third Reading of the Bill. Certainly former Navy Ministers spoke and voted against it.
In my view the Government's proposal is not workable. I venture to repeat the analogy with the garage. The nature of the work that the Royal dockyards are often called upon to do is not dissimilar. If one has the misfortune to have to take one's car to a garage because of an accident and there is a claim to be made against an insurance company, one encounters the familiar procedure whereby the car has to be prepared for an independent examination by an independent assessor, and that of course costs the insurance company a fee. There is also a tremendous delay. The procedure is not really thought to be satisfactory either by the garage trade or by the

47
motorist. I have never yet heard anyone suggest that as a result of this marvellous arrangement the insurance companies find that repairs are carried out more economically and more efficiently than they would be if the individual motorist had taken his car into the garage under his own steam. In fact, I have often heard it suggested that the insurance companies are taken to the cleaners. I am wondering whether that may be the case under these commercial arrangements that are proposed in the Bill.
I paid great regard to what the noble and learned Lord, Lord Denning, said. Perhaps I may be blunt with him: if he waits and votes only for his own preferred alternative and does not support any of the other amendments, he might find that when he puts his own amendment to the test, he does not have many friends. I can give him an absolute undertaking that if, as I hope, the Committee approves this amendment but subsequently the Government give enthusiastic approval and support to the proposal of the noble Lord, Lord Denning, (which I certainly shall support whatever the noble Lord may do in the meantime) for a company that is owned 51 per cent. by the Government and 49 per cent. by the dockyard workers, and if the Committee accepts that proposal, I shall immediately undertake to table an amendment on Report to remove the amendment that will now be carried. So the noble and learned Lord should not be concerned that this will in any way stand in the way of the Committee's consideration of other matters. It is the strange way, oddly enough, that we do business. We have to consider the options one by one as they come along.
Lord Graham of Edmonton: It is a fair offer.
Lord Mulley: It is quite clear that there are risks in having to have a price for everything. I do not see how a contractor can reasonably be expected to undertake to service a submarine or a ship without having a contract price. Certainly we have not been told of the savings, and under the trading fund I am certain that there will be savings.
I am sorry to differ from the noble Viscount, Lord Trenchard, but it is not true that the trading fund arrangements for the Royal Ordnance factories were unsatisfactory. They operated not only commercially with regard to their relationships with the Ministry of Defence, but in the face of competition they also secured very substantial overseas contracts for ammunition, for example. There was also of course the very notable contract, which events in Iran prematurely terminated, which was one of the biggest overseas contracts that has ever been obtained by British industry.
In fact, if the Royal dockyards remain Civil Service managed and subject to bureaucracy, that is the responsibility of the Ministers at present. They could change that situation tomorrow if they wanted to. They do not have to wait for an Act of Parliament or to set up companies, or whatever. In fact, as was done in the Royal Ordnance factories, they can insist on proper commercial management; and if need he without any Acts of Parliament they can have a different system of industrial wage control, just as was
48
done in the Royal Ordnance factories. They do not need to shelter behind Civil Service red tape as a basis for bringing forward this scheme.
Like everyone else, I agree that changes in the operation of the Royal dockyards are desirable and that the Royal dockyards are not as efficient as they might be. It is also true to say that they did not know—just as the Ministry of Defence does not know—sometimes from one month to the next the amount of money that was available for the current financial year, and that the navy, probably for good reason, changed its mind about the kind of work that it sent. It means that people are standing about because they have been organised to be ready to do a job and that job has been taken away from them because the ship has not turned up.
It is not true that the dockyards are grossly inefficient. As I said on Second Reading in the presence of the former Chief of Naval Staff, the noble and gallant Lord, Lord Lewin, we agreed to send some submarines out to commercial yards for refit because at that time the dockyards were heavily overloaded. We had to pay substantially more—almost double, I think, but I should not like to be specific on the amount—to the commercial yards for the refit of a submarine of a particular class. The royal dockyards have not been the most perfect undertaking, but they have also been greatly maligned.
The trading fund is worth trying. As I said, it is only a limited experiment. We can go forward and perhaps prescribe what your Lordships may feel is a better or an ideal solution. That could be ready to be put into operation in place of the amendment or after that proposal had been given a two-year trial. For those reasons I ask the Committee to support the amendment.
Viscount Trenchard: Just before the Committee comes to a decision, let me say to the noble Lords, Lord Mulley and Lord Graham, that at the end of my period the management of the ROFs, one and all, were saying that there were restraints—restraints on employment and on commercial activities of one kind and another. I in no way meant to reflect adversely on the success of the ROFs in selling British equipment in various parts of the world. I can only plead to the noble Lord, Lord Mulley, that, in spite of trying quite hard, I was unable to remove the dead hand of the Civil Service rules in relation to a trading fund and was unable to satisfy the management of the ROFs and to give them the freedom which I believe that in the case of the dockyards the Government's arrangements will do.
Lord Mulley: The noble Viscount must also share some of the responsibility for imposing the restraints. It does not need an Act of Parliament. I know that there are problems, but if Civil Service or Treasury rules stand in the way, they can be changed.
6.2 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 78; Not-Contents, 101.

DIVISION NO. 2

CONTENTS

Airedale, L.

John-Mackie, L.

Ardwick, L.

Kilmarnock, L.

Attlee, E.

Kirkhill, L.

Banks, L.

Listowel, E.

Barnett, L.

Llewelyn-Davies of Hastoe, B.

Birk, B.

Lloyd of Kilgerran, L.

Blyton, L.

Longford, E.

Brockway, L.

Lovell-Davis, L.

Bruce of Donington, L.

McIntosh of Haringey, L.

Carmichael of Kelvingrove, L.

McNair, L.

Chitnis, L.

Mayhew, L.

Cledwyn of Penrhos, L.

Melchett, L.

Crawshaw of Aintree, L.

Mulley, L.

David, B. [Teller.]

Nicol, B.

Davies of Penrhys, L.

Northfield, L.

Dean of Beswick, L.

Oram, L.

Denington, B.

Phillips, B.

Diamond, L.

Pitt of Hampstead, L.

Donoughue, L.

Ponsonby of Shulbrede, L. [Teller.]

Elwyn-Jones, L.

Ennals, L.

Seear, B.

Ewart-Biggs, B.

Shepherd, L.

Ezra, L.

Stallard, L.

Falkender, B.

Stedman, B.

Fisher of Rednal, B.

Stewart of Fulham, L.

Gallacher, L.

Stoddart of Swindon, L.

Gladwyn, L.

Strabolgi, L.

Graham of Edmonton, L.

Taylor of Blackburn, L.

Grey, E.

Taylor of Gryfe, L.

Grimond, L.

Taylor of Mansfield, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Wells-Pestell, L.

Harris of Greenwich, L.

Whaddon, L.

Hatch of Lusby, L.

White, B.

Houghton of Sowerby, L.

Wigoder, L.

Hughes, L.

Williams of Elvel, L.

Irving of Dartford, L.

Winchilsea and Nottingham, E.

Jacques, L.

Jeger, B.

Young of Darlington, L.

Jenkins of Putney, L.

Ypres, E.

NOT-CONTENTS

Ailesbury, M.

Gardner of Parkes, B.

Aldington, L.

Gibson-Watt, L.

Ashbourne, L.

Glanusk, L.

Belhaven and Stenton, L.

Glenarthur, L.

Belstead, L.

Grimston of Westbury, L.

Boyd-Carpenter, L.

Hailsham of Saint Marylebone, L.

Brabazon of Tara, L.

Brookes, L.

Henderson of Brompton, L.

Brougham and Vaux, L.

Holderness, L.

Broxbourne, L.

Home of the Hirsel, L.

Butterworth, L.

Hooper, B.

Caithness, E.

Hylton-Foster, B.

Campbell of Alloway, L.

Ironside, L.

Cathcart, E.

Kaberry of Adel, L.

Carthcart, E.

Kimball, L.

Coleraine, L.

Kinloss, Ly.

Colville of Culross, V.

Layton, L.

Constantine of Stanmore, L.

Lindsey and Abingdon, E.

Cox, B.

Long, V.

Craigavon, V.

Lyell, L.

Craigmyle, L.

McAlpine of Moffat, L.

Cullen of Ashbourne, L.

Macleod of Borve, B.

Dacre of Glanton, L.

Mancroft, L.

Davidson, V.

Margadale, L.

Denham, L. [Teller.]

Marley, L.

Denning, L.

Marshall of Leeds, L.

Derwent, L.

Massereene and Ferrard, V.

Dilhorne, V.

Merrivale, L.

Drumalbyn, L.

Mersey, V.

Elliot of Harwood, B.

Middleton, L.

Elliott of Morpeth, L.

Molson, L.

Elton, L.

Morris, L.

Faithfull, B.

Mottistone, L.

Fortescue, E.

Mountevans, L.

Fraser of Kilmorack, L.

Munster, E.

50

Newall, L.

Strathclyde, L.

Orr-Ewing, L.

Sudeley, L.

Pender, L.

Swansea, L.

Peyton of Yeovil, L.

Swinfen, L.

Rankeillour, L.

Swinton, E. [Teller.]

Reigate, L.

Thomas of Swynnerton, L.

Renton, L.

Thorneycroft, L.

Romney, E.

Trefgarne, L.

St. Aldwyn, E.

Trenchard, V.

St. Davids, V.

Trumpington, B.

Saltoun of Abernethy, Ly.

Ullswater, V.

Sanderson of Bowden, L.

Vaux of Harrowden, L.

Sandford, L.

Vickers, B.

Selkirk, E.

Vivian, L.

Shannon, E.

Ward of Witley, V.

Skelmersdale, L.

Westbury, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.10 p.m.
Lord Crawshaw of Aintree Lord Crawshaw of Aintree moved Amendment No. 3:
Page 2, line 6, after ("apply") insert ("and in which the Secretary of State shall have a majority shareholding, with no less than 50% of the remaining shares to be sold and or given to the qualified dockyard service employees,").
The noble Lord said: With this amendment, we are taking Amendments Nos. 6, 7 and 8. The object of the amendment is to try to give the workforce a special interest in the place in which it works. It is the type of argument that goes on in most political parties; it is not confined to one. It makes sense to let people be shareholders in the company in which they are employed. There is no doubt that whatever arrangements are made for the dockyards there will be a certain lowering of morale. I feel we must make every effort to restore that morale and ensure we have a competent and reliable workforce.
There have been many arguments about whether the workforce has been competent and reliable, but I do not go along with them. I am a great believer in what is said about the army: there are only bad officers; there are no bad men. I think that much of our industrial trouble is caused by management and not by the workforce.
This is one of several amendments on the same lines which have been moved. There are as many permutations as there are noble Lords in the Committee as to how the objective could be achieved. I suggest that the Secretary of State should have the majority shareholding and that not less than 50 per cent. of the remaining shares should be sold or given to qualified dockyard service employees. Some people feel that such shares should be given. There is a place for that idea as well. I think that they can be given in certain circumstances, but I also believe there should be an opportunity for people in an industry to purchase shares so that they have a vested interest in the industry. There is a third element, because shares would be available to the general public.
From my experience in industry, I feel that all too often businesses fail because the workforce has insufficient motivation. One way to give motivation is to make people feel that their industry will be profitable, not necessarily only through the wages that the employees take but in the investments that they may have in the industry. I have in mind companies which have done just that over many years. I may lose

51
votes in the Lobby if I say that this is one of the planks of both the Liberal and the Social Democratic parties' platforms. I think that the idea extends to the other side of the Committee as well. I say that because the proposal is reasonable. It is one that should be accepted on both sides of the Committee. People are likely to be more motivated if they have a personal stake in the industry in which they work. All too often they are cogs in a wheel. The amendment seeks to restore some of the lowered morale which I am certain will result from the legislation. I beg to move.
Lord Denning: This is an important point. It proceeds on the basis of the fourth option that I mentioned—that there should be one company which should have the assets, have the use of the assets and also employ the workforce. I do not mind for the moment whether or not the company is government-owned. The important point of principle is that there should be workers' shares because then the workers would be much more likely to co-operate in the transfer. It will give them a stake in the company and an incentive for which to work.
I shall repeat what was said by Mr. Redwood in his statement about the National Freight Corporation:
"The National Freight Corporation showed that ordinary groups of employees were interested in acquiring a stake in their business: and once they had acquired it attitudes began to change and they felt the excitement and responsibility which shared ownership can bring".
Is that not particularly applicable here where the workforce has been in the dockyard for centuries? Fathers and grandfathers worked there. The workforce is being compulsorily transferred to a new company. Surely we should do everything that we can to get the workforce on the company's side and to co-operate; otherwise by disruptive action of one kind or another it can make the continuance of that company almost impossible. The Government have expressed no view on the proposal. I hope that the Government will ensure that there is a substantial proportion of workers' shares, however the company is formed.
Another point which arises on the amendments is whether the company should be government-owned. In other words, should the Government own the majority of the shares and the workers the rest or should a great outside company such as Vickers own the shares? That is a very nice point. If possible, I should prefer the company to be government-owned. We are much more likely to obtain the co-operation of the workforce in those circumstances. However, I shall not prejudge that point at the moment.
The Government are going to consider tenders from outside companies and see whether they will come in with an appropriate tender. I am prepared to let that go forward to see whether companies will tender. I hope that a condition of the tenderer will be that, whatever new company is formed by the parent company, there should be a substantial number of workers' shares. A substantial number should be given free but there should also be preference shares so that in this big change the company will get the workforce on its side.
I support all the amendments. I should be grateful if the Government would say that they will carefully
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consider including a stipulation that there should be a substantial proportion of workers' shares in any proposed company. There is also the question of government control versus that of an outside company.
Lord Grimond: I support the amendments moved by my noble friend. The arguments in support of employee ownership are widely known and have often been rehearsed in the Chamber. I do not think that it is necessary to add much to the speech of my noble friend or to go over the arguments again.
I should like, however, to mention three points. The first is that these Bills concerned with the denationalisation of industries in government control provide an admirable opportunity for spreading wealth, ownership and interest in industry—an opportunity, I regret to say, that the Government have by no means always taken. Secondly, modern technology is resulting in a concentration of wealth and in the accumulation of wealth by the owners of capital, to some extent to the disadvantage of labour. It is extremely important, if we are to have a successful industrial society, that everyone should share in the increasing rewards of capital ownership, more particularly those working in the services and the industries.
Thirdly, if the Government, as they constantly say, regard wage restraint as being all-important to the running of the economy, not only have they to exercise restraint at the top—it has, I may say, been notably absent—but they have also to look at means of remunerating labour other than through annual automatic increases in wages. For those three reasons and for many other reasons, some of them advanced by my noble friend and others that are well known to the Government, I would urge the Government to accept the amendment.
Lord Graham of Edmonton: I would simply say to the noble Lord the Minister that the thrust of the amendment certainly commends itself to those on these Benches. The Minister is in fact invited to consider ways in which the workforce can feel even more that they are part of the action than they have been in the past. That is an laudable objective.
Lord Trefgarne: It is an objective, if I may say so at the outset, that I very much share. I too am greatly attracted to the notion that workers should have a share in the enterprise for which they work for all the reasons that have been enumerated this evening and on other occasions.
The noble Lord, Lord Crawshaw, proposed in his amendment, as I understand it, that the workers should have a share in what are in effect the physical assets of the dockyard. That is not quite the method that we have chosen in bringing forward this scheme. We have taken the view that the assets—that is to say, the docks, the cranes, the jetties and all the equipment that goes to make up the dockyards—should remain in public ownership because of the strategic importance that they represent to the maintenance of the fleet and to its effectiveness. For that reason, we have not proposed that shares in the physical assets, if I can so describe them, should be offered to anyone, including the workforce, any more than we have ever proposed that there should be shares in the very ships of the

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Royal Navy. That is not something that we would contemplate.
I now turn to the remarks of the noble and learned Lord, Lord Denning, made on this amendment and earlier. The noble and learned Lord will, I dare say, on a later amendment deploy in more detail his concern about the two-company concept contained in the provisions of the Bill as presently drafted. I must confess that having listened to the noble and learned Lord in private, I have been able to give the matter a little thought. I find considerable force in the arguments that the noble and learned Lord has deployed in connection with the two-company or one-company concept. That is not to say that I find any flaws in what the Government are proposing. Nonetheless, I feel that the alternative proposals enshrined in the amendments of the noble and learned Lord deserve examination. At an appropriate moment I shall be willing to undertake that that examination should take place between now and the next stage, the Report stage, of the Bill.
As to whether the company, be it one or two, should be government owned or contractor owned, that is a slightly different point. The government view has always been that we would prefer to see this a contractor operated enterprise but that the government operated alternative is one that we would be prepared to consider if we did not receive satisfactory bids in the competition that we propose to conduct. If we were to move, in the fullness of time, to a single company structure, then I can certainly give an assurance that we would want to make sure that the employees in the dockyard had a proper share in that enterprise. I hope that this will reassure the noble Lord, Lord Crawshaw, and other noble Lords who have set their names to other amendments on a similar theme in this grouping.
I had understood that it would be for the Committee's convenience if we were to be now considering Amendments Nos. 3, 6 and 8 along with Amendment No. 7 of the noble and learned Lord, Lord Denning, more or less simultaneously. On the basis that we are discussing those four amendments, I do not think that the precise proposal contained in those amendments is directly appropriate if we are to sustain the two-company structure that is presently enshrined in the Bill. But if, in the fullness of time and in consultation with the noble and learned Lord, Lord Denning, we can move to a single company structure—I do not reject that proposition out of hand—I shall certainly undertake that there is proper provision in that single company structure for a share to be held by the employees.
Lord Crawshaw of Aintree: The noble Lord the Minister is always courteous. He is even more courteous when offering at least something in response to the debate. Having regard to the helpful remarks that the Minister has made, I would ask leave to withdraw the amendment.
Lord Denning: I should just like to say how much I welcome what the noble Lord the Minister has said. In a way workers' shares depend, as the noble Lord, Lord Trefgarne, says, on there being one company. If one company is to take the licence and make profits, the
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Government will consider very favourably the scheme whereby preference is given to workers' shares. I am most grateful for that. I look forward to seeing what the proposition really comes to. As to whether it should be government owned or under outside ownership, I agreed that I would not insist one way or the other at the moment, so long as we have one company. That matter will be reached on a later amendment.
Baroness Seear: Since we on these Benches have been advocating these schemes for the past 60 years, we find it extremely gratifying that the Conservative Benches have at last seen the light. I also wish to say what a relief it is to hear from the lips of the Minister himself, and to have it on the record, that the Government do not intend to sell the Royal Navy.
Amendment, by leave, withdrawn.
6.30 p.m.
Lord Denning Lord Denning moved Amendment No. 4:
Page 2, line 9, leave out ("(disregarding their services for this purpose)").
The noble and learned Lord said: We come now to the real difficulty in point of law. I do not know how far the Committee will bear with me. I shall try to make it a simple as I can. It really depends on the question of two companies. The two-company business is found at line 9 on page 2. When arrangements are made for the transfer of the dockyard undertaking, the words of the Bill are,
"disregarding their services for this purpose".
In other words, one disposes of the dockyard undertaking without disposing of the services. This shows that two companies are in mind.
When it comes to the transfer of services—I do not know whether the Committee will understand this—subsection (4), at lines 22 and 23, states that,
"the services of any of the qualified dockyard service employees without more".
Let me explain. It is proposed to have one company that will operate the dockyard and take a licence of the assets for seven years or less. That is determinable. They will have another company which will employ the workforce and in a way do nothing else but employ the workforce. Clearly, if this goes forward, the workforce cannot operate at all because the one company would have only the assets, and the other company the employment. The option would not work.
Perhaps I may turn to the legal point. At first, and throughout, the Government have thought that this would be governed by the terms and conditions of employment regulations under the Transfer of Undertakings (Protection of Employment) Regulations 1981. They assumed that that would apply to this transfer. I do not know whether they can even have read this regulation. It says:
" 'Undertaking' includes any trade or business but does not include any undertaking or part of an undertaking which is not in the nature of a commercial venture".
Is one going to say that this dockyard at Devonport was of a commercial nature? The explanatory note talks of the fact that these regulations apply to transfers of commercial undertakings. What is plain is that the

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dockyard at Plymouth was not a commercial undertaking. It was not in the nature of a commercial venture. Those regulations do not apply at all in my view. I challenge any lawyer to say to the contrary. I am quite sure that the dockyard was "not in the nature of a commercial venture" as I know its meaning. Those 1981 regulations do not apply at all.
However, in the amendment, and in the one which will be put forward by my noble friend Lord Trefgarne, they try to get over that by making all kinds of alterations about the services of this workforce. They include the words "without more", and say that should be capable of being a business—how absurd, I say—and capable of being transferred. I say that that is almost nonsense.
However, my point against this amendment is with regard to our European Community law. By the 1972 Act that is now part of our law. It is all contained in Council Directive 77/187. That makes it quite plain that it applies to a transfer of an undertaking. It does not apply to a part of it that is severed off. When an undertaking is transferred it is quite clear that it must mean the whole. I shall not go into the details of it but that directive governs, and if anything in our law is inconsistent with it, the directive takes precedence. That was established earlier this year. Noble Lords will remember that we used to have differing pensions for men and women at the ages of 65 and 60. The European Commission issued a directive about equal treatment for men and women. The European Court held that our law was inconsistent with the directive and therefore the directive governed. That was the trouble about which we read in the papers: we have to adjust matters so that men and women are entitled to have pensions at the same age. That is the European Community law.
My point is that these attempts by the Government in these amendments are contrary to the European directive. The European directive will govern and will make it quite plain that when these men are transferred in this way they are transferred to the one undertaking. That is a legal point.
Baroness Seear: For the record, may I ask the noble and learned Lord to tell us whether the European Court findings had to deal with the compulsory retirement ages of men and women, or with the age of pensions—because it is not the same? I think that the noble and learned Lord referred to the pension age.
Lord Denning: I think that it deals with retirement ages but I do not have the report with me. I have studied it very carefully. From my point of view the important matter is that the European directive takes precedence over anything in our law, even on our statute, which is inconsistent with it. That is plainly the result of that case. I have read the judgment. The European directive which I have quoted takes precedence even over the 1981 regulations, or whatever the Government include. I therefore say that on the European directive the only matter that can be transferred is the whole undertaking, and one part of it cannot be transferred without the other. It is very much a legal argument.
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I would only add that this European directive and its provisions can be enforced by any individual applying to our own national courts. I must warn the Government that if they go ahead with this two-company structure with these provisions which I think are inconsistent with the European directive, any trade union or employee could go to the courts and say, "You are not obeying the directive," and could put a cat among the pigeons with regard to the Government and this Bill.
In private conversations with the Minister I have indicated these points. In view of the difficulties I was glad to hear him say that they will give careful consideration as to whether they will stick to the new company structure, or consider the one-company structure. The arguments are very much legal ones, but those are my submissions. I should like to know what the Minister says about them.
Lord Trefgarne: It seems to me that this group of amendments—Amendments Nos. 4, 5 and 15—proposed by the noble and learned Lord have two propositions at their basis. The first proposition is that because of the two-company structure that we propose the applicability of the European Council directive is called into question. I am bound to say that I do not share that view. However, for that, and in particular for other reasons, I have been considering, as I have already indicated, whether we should not look more carefully at a single company structure. If we were to do that I think that the noble and learned Lord would agree that his anxiety about the applicability of the European Council directive would fall away.
Lord Denning: I quite agree that, if we had the one-company structure, all would be well and good.
Lord Trefgarne: I am reassured to hear that. That will certainly be one of the factors I take into account in deciding whether we should proceed in that direction. Let me say at once that I am attracted to what the noble and learned Lord says about a one-company structure. I shall be considering it in that frame of mind.
The other proposition which is enshrined in these amendments is the applicability of the so-called TUPE Regulations of 1981. The noble and learned Lord's anxiety on that point stemmed from his doubts as to whether the dockyards in their present guise were a commercial undertaking in the true sense of that expression.
The purpose of our wanting to apply these regulations is to ensure that when the dockyard workers transfer to the new enterprise, whether it is in a one-company or a two-company structure, they enjoy proper terms and conditions in their new employment. It was in their interests that we thought it right that these arrangements should apply. Therefore, I hope that the noble and learned Lord, Lord Denning, will be reassured by the amendment which in due course I shall propose as Amendment No. 14, which I hope will get over the difficulty in that particular regard.
I believe that there was also some doubt in the noble and learned Lord's mind as to whether the two-company structure did not contribute to the difficulties

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about the relevance of the TUPE Regulations. Therefore, if we move to the one-company structure, and if at the same time I speak to Amendment No. 14 on the Marshalled List, which is to be moved in due course, I hope that I shall also have dispelled the noble and learned Lord's doubts on that score.
Lord Denning: I should like to say that I am very gratified by what the Minister has just said. It seems to me that a one-company structure is the only permissible one in law, and if that takes place I think that the transfer of undertakings can be operated accordingly. I am not sure about the wording of the amendment as it stands at the moment because it may need variation.
Lord Trefgarne: If the Committee will allow me to move Amendment No. 14 and in due course accept it, and if it then proves to be inappropriate, we could change it when we came to change the structure arrangements, if that is what is decided upon.
The Deputy Chairman of Committees (Lord Renton): Does the noble and learned Lord seek leave to withdraw his amendment?
Lord Denning: I beg leave to withdraw the amendment because of the undertaking which the Minister has given.
Amendment, by leave, withdrawn.
[Amendments Nos. 5 to 8 not moved.]
Baroness Vickers Baroness Vickers moved Amendment No. 9:
Page 2, line 14, at end insert—
("( ) A contract under which a company provides designated dockyard services at a dockyard shall be for a period not less than fifteen years.").
The noble Baroness said: This amendment seeks to enforce a longer contract period than that proposed by the Government. Although I do not believe that the agency management scheme represents the best possible option for the future control of the royal dockyards, I feel that if the Government cannot be persuaded to decide now to adopt their fall-back option of a plc then the only alternative is to lengthen the contract period to permit some stability and long-term planning at the dockyards.
The Government wish to review the contract after five years, and there is no reason why a 15-year term cannot be reviewed at five-year intervals. It is difficult to understand how an industrial site as large and complicated as Devonport dockyard can be managed on a seven-year contract when there will obviously be an enormous amount of work which will overlap such a short period.
Furthermore, since I do not believe that managing the dockyard on an agency contract will offer the best service for the navy, the people of Plymouth or the country as a whole, I hope that the Government will accept this amendment so that if they insist on pursuing this option in the Bill they will at least allow the, new commercial managers to take a more longterm view of the scheme and not to think solely of short-term profitability. I beg to move.
Lord Denning: From my point of view this is really a probing amendment because of the anxiety to know what the licence will be for. At the moment the Government propose that it should be seven years, determinable in appropriate circumstances. Is that too short a time to enable the contractor to come in and see whether the experiment has worked? On the other hand, will 15 years be too long? After all, this is rather experimental. We want to see whether or not the experiment will be successful. Apparently the Government have opted for seven years. If the Government have convincing reasons for seven years, all well and good. However, this is a difficult problem. The Government must keep control. The licence mist be determinable; the Government have to see how it works. Whether it should be 15 years, seven years or even less than seven years is almost a matter of judgment. I should like to suggest 15 years but I should like to know why the Government think that a period of seven years is best.
6.45 p.m.
Lord Ironside: I should like to make some comments on this amendment. I was surprised at this very long period of 15 years being suggested, because in fact one introduces more risk elements into this longer period and therefore certainly one would need a trial period to begin with to see how the operation fared. We are treading new territory here with the dockyards after such a long saga of knowing them as they have been, and I think that we are somewhat inspired by the American experience, which has existed with the GOCO contracts—the government-owned contractor operated schemes—which run pretty well over there. They have their troubles as well, and new territory is being trodden there.
However, I should have said that five years is too short a period. I think that seven years is a compromise, but as an industrialist I should like to have seen a longer period, with perhaps an introductory trial period which would involve certain non-risk elements of the contract being put to trial. Then, perhaps after two years, the successful contractor could commit himself on a risk-basis for the rest of the time. However, I do not think it is necessary here to stipulate the length of the contract or the Term Contract in the enabling Bill. I believe that that needs to be specified elsewhere: in the invitation to tender and in the regulations for the terms of the contract; but it is not necessary to specify it in the enabling legislation.
Lord Graham of Edmonton: I know that the Minister will tell the Committee how the magic figure of seven years was chosen as opposed to five or nine years. Clearly, there must have been factors which led to that decision: experience, consultation, or even a hunch must all have come into the consideration. However, someone must have said that seven years was right, taking into account a number of factors, because, although the contractor will not have to provide an enormous amount of fixed stock and fixed assets, he will have to do a lot of planning, find a lot of money and go to a lot of trouble.
Although I respect the comments of the previous speaker, that from his experience more risks will be

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introduced if it were a 15-year period, the noble Lord did say that he thought a period in excess of seven years was preferable to seven years—in other words, seven years must be a compromise between a longer period and a shorter period. Therefore, from the noble Lord's experience, judgment and nous he has in mind an optimum figure. I hope that the Minister will tell us the raison d'être for the seven years.
However, at the end of the day the proof of the pudding is in the eating. Perhaps the Minister will tell us how many people nibbled or, to put it mildly, how many people have shown an interest. Can the noble Lord the Minister tell us whether the period of the contract has been a material factor, or whether some people have said to him "If it were longer or shorter, I would be more interested"? I wonder whether the noble Lord the Minister in fact can tell us if people have shown an interest and then, later in the day, have pulled out; in other words, have not proceeded with their interest. Can it be that they have been shown more or have seen more than the public? Is what is available to us in the Library the totality of what is available to those who participate? Are there any secret annexes, for instance, or any silent memoranda that others know about but we do not?
Can the noble Lord tell us whether there are factors militating against people proceeding, which I could understand from a commercial point of view but cannot understand unless I know about them? I take the points made by those who represent the city of Plymouth. The noble Baroness, Lady Vickers, quite rightly pointed out that it is not only a question of the contractor having stability but of the community having some stability. We are talking in terms of seven years as being the right figure, but the noble Baroness has told us that she feels—and I am sure she has been advised—there are those who think longer than seven years would be a better period. I am not able, as others are, to apply commercial experience, because I do not have the same commercial experience as they have. But I would have thought that once the noble Lord the Minister and his colleagues, by whatever yardstick they use, can come to the view that some consortium has as much of the right things as is possible, you can then say, "We put our trust in you with all the various documents and controls we have got, so away you go". I am tempted to believe that this amendment has a great deal of merit in it, and I will listen very carefully to what the noble Lord the Minister has to say.
Lord Ashbourne: Before the noble Lord the Minister replies, I should like to support this amendment. If this Bill becomes law in the form that the Government clearly envisage, I feel that seven years is much too short a period. Running a dockyard is not like running a commercial enterprise or commercial shipyard, and never will be, because there is the defence of the realm at stake and all the arguments which are well known in this Committee.
I made a lot of inquiries on Friday evening of senior dockyard personnel, who were all unanimous in their view that a period of 15 or 20 years, or something of that nature, was very much more appropriate than the seven years proposed in this Bill. It would take any commercial enterprise two or three years to get into
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the machinations of running a dockyard; then there would be three years of running it, hopefully in an efficient manner; and then maybe in the last two years they would be running down as they saw the end of the line coming. Maybe they would not think of tendering again for a second period. So I believe that if the Bill goes through in the way the Government are envisaging, then a longer period than seven years, a period in the nature of 15 to 20 years, would be greatly to be commended.
Lord Trefgarne: Perhaps I might explain why we have felt it right to set the length of the initial contract at each dockyard at seven years. Originally, we had thought of a five-year contract, but on reflection we felt that, after a necessary settling-in period during which time the commercial managers would be familiarising themselves with the system, making improvements in the way the dockyards operate and generally increasing efficiency (for which most people feel there is ample scope), the company should be allowed a full five-year period to consolidate their plans. For our part we expect increasingly to negotiate work on a fixed price basis, and we are confident that over the seven-year contract the benefits to the Royal Navy in terms of an improved service and to the taxpayer in terms of costs will be obvious to all.
During the term of their contracts with the department the companies at the dockyards will be competing with each other and with other ship repair companies for an increasing non-core naval programme. But the two dockyards will be, as it were, guaranteed a substantial amount of non-competitive work—the "core programme", as it is known. While my department will be ensuring tight contracts for this work, it will be, as I have said, non-competitive. It is, therefore, important that the Government should be able to consider a fresh competition every so often for the term contract. This should ensure that even for the non-competitive work the companies will negotiate realistic prices. They will have to consider that if they do not or if they are not able to provide as good a service as we believe they could, they could lose the contract at the break point.
The Government believe that a seven-year renewable contract strikes the right balance for the companies and for the Royal Navy. Before I ask the noble and learned Lord to withdraw the amendment, may I reply to the point put to me by the noble Lord, Lord Graham of Edmonton, when he asked which companies were interested in tendering for these dockyard contracts. The firms are the Devonport Dockyard Limited, Foster Wheeler in association with BSEL, Babcock and Thorn in association, Balfour Beattie and the Weir Group in association, and Press Offshore. As the noble Lord will be aware, Trafalgar House in association with Plessey and A and P Appledore have withdrawn for commercial reasons, as have NEI. I should say there is no pressure for more than seven years from these interested parties but strong pressure to offer a little more than five, and that is what we have done.
Lord Denning: In view of what the noble Lord the Minister has said, it seems quite right to withdraw the amendment. The reasons in favour of seven years are

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good. I would not say they are compelling but, on the other hand, they are quite sufficient, so I will not press the amendment.
Lord Graham of Edmonton: Before we proceed, may I say that my attention was momentarily distracted when I believe the noble Lord the Minister answered one of my points; namely, whether any contractors who had originally showed some interest and had made progress had decided to withdraw late in the day. I was given, and appreciate, a list of those still in, and I took the point that they wanted more than five years, which is why we have seven years; but was there anyone actually involved who decided to withdraw late in the day?
Lord Trefgarne: Yes. As is well known, I think, NEI and the Trafalgar House Group, together with Plessey and A and P Appledore, have withdrawn.
Amendment, by leave, withdrawn.
Lord Denham: I beg to move that the House do now resume. I think it will be helpful if I say that we shall not come back to this particular Bill before 7.45.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Building Societies Bill
Brought from the Commons; read a first time, and to be printed.

British Shipbuilders (Borrowing Powers) Bill
Lord Lucas of Chilworth: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.

Consumer Safety (Amendment) Bill
6.59 p.m.
Baroness Gardner of Parkes: My Lords, I beg to move that the Bill be now read a second time.
The safety of the people is one of the most important concerns of any Government. This Bill sets out to extend the scope of consumer protection in relation to unsafe and dangerous products by providing the appropriate enforcement authorities with increased powers. The purpose is to ensure that potentially dangerous goods are intercepted before they reach the shops.
I am sure that your Lordships will have seen many reports of the dreadful accidents that have befallen children and adults as a result of dangerous products. Many of these need not have happened. Each year
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some 3 million people require hospital treatment for injuries sustained in accidents in the home, and about 7,000 of them die. Many of these accidents, like the death in Leeds last Christmas of a five-month-old child who died from playing with an imported toy pony, are avoidable.
The Government themselves recognise the seriousness of the situation. They are committed to bringing in far-reaching reforms, including a general duty to trade safely. These were outlined in the 1984 White Paper, The Safety of Goods. Unfortunately sufficient parliamentary time has not yet been found to introduce these measures, although it is hoped that there will be an announcement in the next Queen's Speech.
The Consumer Safety (Amendment) Bill was introduced in the other place by the honourable Member for York, Mr. Conal Gregory. I am sure that your Lordships would wish to join me in paying tribute to his campaign to raise general standards of product safety in the United Kingdom, and in particular to his success in carrying forward this Bill through all its parliamentary stages in the other place.
The Bill would have the effect of implementing those sections of the White Paper most suited to a Private Member's Bill, and would do so in time to catch the Christmas trade this year. It has the support of the National Consumer Council and a wide range of consumer and business organisations; the National Federation of Consumer Groups; the British Standards Institution; the Confederation of British Industry; the Consumers Association; the Welsh Consumer Council; the Scottish Consumer Council; the General Consumer Council for Northern Ireland; the Institute of Trading Standards Association; the Association of County Councils; the Association of Metropolitan Authorities; and the British Toy and Hobby Manufacturers Association. That is quite a long and strong supportive list. The Bill has also received the active support of the Parliamentary Under-Secretary for Corporate and Consumer Affairs, Mr. Michael Howard.
During the passage of this Bill through the other place a great deal of effort went into fashioning a set of provisions which will bring significant benefits to both consumers and reputable traders. Extensive consultations were conducted to this end. I believe that this Bill, as amended by the other place, strikes a proper balance between the requirements of good business practice on the one hand and effective consumer protection on the other.
I realise the complexity of such a Bill. It contains 17 clauses and two schedules. It embraces not just toys, but all goods which are covered by existing consumer safety regulations, from faulty electrical products to children's nightware and cosmetics. It seeks to create new powers to enable enforcement authorities to act against unsafe goods at the factory gate or at the point of entry into the country. Instead of trading standards officers having to scour the shops to track down suspected goods, as happens at present, they will be able to prevent such goods from getting there in the first place.
Clause 1 gives Customs and Excise officials the power to inform enforcement authorities of incoming

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consignments of consumer goods as they enter the country. Clause 2 enables them to detain goods up to 48 hours to allow the enforcement authorities time to examine the test goods and, if necessary, to use their wider powers to detain or seize goods. Clause 3 provides that where a trading standards officer has reasonable cause to believe that safety regulations are being contravened he may serve the trader with a suspension notice prohibiting him from putting the goods on the market.
Clauses 4 and 5 set out appeal procedures that a trader who has been served with a suspension notice can use. Clauses 6, 7 and 8 allow a court to order the forfeiture or disposal of goods proved to have contravened safety regulations. Clauses 9 and 10 provide for further appeal against decisions concerning suspension notices, seizures, and forfeitures. Clause 11 sets out under what circumstances information obtained under powers provided in the Bill can be disclosed. Clause 12 prevents traders from disclaiming liability for unsafe products by invoking the defence of due diligence without just cause.
Clause 13 lays down the circumstances under which the enforcement authority can be reimbursed for the costs incurred in seizing, destroying, or detaining goods. Clause 14 and Schedule 1 allow for the seizure of newly manufactured or imported goods for testing, and allow trading standards officers to seize any goods they reasonably suspect of contravening safety requirements. The schedule contains new provisions for compensation if, in the event of goods being seized or suspended, these do not contravene safety regulations.
I hope that your Lordships will support this Bill. It is recognised on all sides that more will need to be done. It is a beginning. The general duty proposed by the Government and supported by the Opposition awaits parliamentary scrutiny and approval. The Bill is not over-ambitious, but neither is it excessively modest. It expresses the view that where regulations exist in the public interest they should be enforced. Enforcement authorities need strong but reasonable powers if the consumer is indeed to be protected. I commend the Bill to your Lordships' House. I beg to move.
Moved, That the Bill be now read a second time.—(Baroness Gardner of Parkes.)
7.7 p.m.
Lord Airedale: My Lords, we are grateful to the noble Baroness for introducing this Bill to us and for explaining it so lucidly. She put into our minds the question, why should a Private Member's Bill, modest in scope like this, have to occupy 17 clauses, two schedules, and be destined to occupy 17 pages of the statute book? Is this because the parliamentary draftsman is unduly verbose and ought to be taught to express himself more concisely?
I do not think that that would be really a fair criticism. Most Bills of this kind contain matter ancillary to its main purpose—things like appeal procedures, non-disclosure of confidential information, the defence of due diligence, and so on. I suppose we might have a standard clauses Bill on the lines of the Interpretation Act. Then each Bill could say, when
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it came to the ancillary matters, "Standard Clauses 3, 7, 18 and 24", or whatever it was, "shall apply to this Bill".
That would shorten the Bill and the statute book, but the objection to that would be that the reader would have to look in two places instead of one, and up to now we have always had all the ancillary matter separately stated in each Bill; and so we get a fat statute book at the end of the year. But it is not all the fault of the parliamentary draftsmen.
Coming to the Bill itself, the maxim caveat emptor is no longer the answer to nearly all of the problems about the sale of goods. This is because goods nowadays are becoming more and more sophisticated. It is quite impossible for the shopper to examine an electrical appliance in the shop and come to an opinion about its safety. That work has to be done for him before the appliance arrives in the shop.
There has been some discussion about the compensation provision in Schedule I—quite understandably so. The enforcement officer feels entitled to say, "If I am acting on well-founded suspicion, I do not expect to have to pay compensation even if the goods do turn out to be perfectly safe". On the other hand, the trader feels that he is entitled to say, "Why, owing to the interference of the enforcement officer, should I be put to expense over goods which are perfectly safe?" I think that in practice the compensation provisions will work satisfactorily because presumably in most cases the goods will eventually be sold normally and there will be no claim or very little claim to compensation. But if we have an exceptional case where a good deal of compensation is going to be claimed, it will be for the trader to warn the enforcement officer about this and it will count against him if he does not.
Then presumably the enforcement officer will act with due speed to try to minimise the compensation which is going to be payable; so that I think that that probably will work out all right in practice after a bit of experience. Subject to that, I think that this is a good Bill and I wish it well.
7.11 p.m.
Baroness Stedman: My Lords, I too should like to thank the noble Baroness for the clear way in which she introduced the Bill. I welcome the intentions behind the Bill because I believe that we need to have a balance between the interests of the owners of the goods and those of the public at large and that we have to ensure that neither an innocent trader nor the trading standards authority acting in good faith should be penalised by anything in this Bill. If legislation is to be enforced it has to be based upon a reasonableness of action by the enforcement authority.
I have received representations from the Association of County Councils, of which I am a vice-president, and also from some of the individual authorities. They all want to see improvements in legislation to enable dangerous goods to be kept off the market. They, all of them, accept very willingly that there is an urgent need for a general duty to trade safely which would cover all the dangerous goods. Their concern lies specifically with two amendments that were made to the Bill in another place which they

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believe are likely to prejudice the effectiveness of the legislation now before us. I hope to return to those in more detail at Committee stage.
The first concern is about the compensation provisions in Schedule 1, paragraph 14. If a trading standards officer is faced with goods whose appearance and origin seem to be similar to those of goods which had previously been found to be unsafe, and with no further information, I would not consider it unreasonable for that trading standards officer to require that those goods be detained for testing. Under the present provisions, such action could be penalised by the compensation payment if the goods turned out to be satisfactory. My noble friend Lord Airedale has already referred to that.
Compensation will be payable by an authority where the supply of goods turns out to be safe whether or not the action in suspending them was reasonable. Officers might be faced with a very large consignment of goods of a type or from a source which has been shown previously to be unsafe. Where the importer has neither carried out the tests nor checked with the supplier that testing has been done then surely, with the Bill as it now stands, no authority would be prepared to place itself at risk of paying high compensation should those goods turn out to be safe.
The Bill as it stands seems to be taking account only of the traders' interests. If the legislation is to work it has to be based upon reasonableness of action by the enforecment authority. I believe that if the onus were to be placed on the enforcement authority to prove that its officer had acted reasonably in suspending the supply of goods, that might well overcome the difficulties of proof which were raised by respresentatives of trade interests. Whatever the final outcome, legislation that is enforceable is in the interests both of British industry and of the consumers. The trading standards authorities, the local authorities, take the view that the original period of 72 hours for the detention of goods is essential if effective action is to be taken to check imported goods or to prevent unsafe goods being put on the market. They feel very strongly that the 48 hours put into the Bill by the amendment is insufficient and could deter enforcement action by the trading standards officers.
I hope that the Government and the noble Baroness may be persuaded to revert to 72 hours in Clause 2(1). I believe that the 72 hours' detention originally specified would recognise the problems of obtaining information either at home or abroad, at weekends or on public holidays. The enforcement officers must be given time to check with the importer whether the goods have been tested; because Customs and Excise may not be willing to use their powers to seize the goods unless this information is available. I understand that the reason given in another place for reducing the period from 72 to 48 hours was that it was in the interests of safeguarding the measure as a whole from successful challenge in the European Court.
Can the noble Baroness or the Minister tell the House whether any check has been made with the European Commission as to whether 72 hours or 48 hours would be acceptable or unacceptable? It seems to me that perhaps Article 36 of the Treaty of Rome allows for restrictions on health and safety grounds. Is
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it not a fact, as the noble Baroness has said, that the British Toy Manufacturers' Association not only supports this Bill but also gives its full support to a 72-hour detention period? I hope that at Committee stage the noble Baroness may accept that 72 hours would be preferable to 48 hours, and I hope also that the requirement for reasonableness of action by the enforcement authority and its officers may be reinserted.
7.18 p.m.
Baroness Fisher of Rednal: My Lords, I have already spoken to the noble Baroness, Lady Gardner of Parkes, to say that I was going to intervene. It will not be at great length. I too welcome the Bill. I just want to draw attention to the powers that will be given to the Customs and Excise officers at ports of entry to disclose information. Presumably the disclosure of the information will be to the trading standards officers in the area. Therefore I can see that there is going to be a great need for a closer working relationship between the Customs and Excise and the trading standards officers (or the duly authorised people if they do not have trading standards officers) who are in the areas where goods are being brought into the country.
Unless that closer working relationship takes place, we shall not see the outcome of this Bill that is desirable. As the noble Baroness has already outlined, if this co-operation can be achieved obviously it lessens the work of the trading standards officers in trying to track down what are unsafe goods that can be distributed in so many outlets throughout the length and breadth of the country. Many of those unsafe goods find themselves not in what we call the recognised shops but in many markets in various localities up and down the country into which people are moving from day to day.
As the noble Baroness has said and as we all know, there is a particular problem at Christmastime with toys, as in the very serious case that she outlined. However, electrical goods—hair dryers, hair curlers, irons and those kinds of things—are constantly coming into the country as imports. I feel that perhaps the Bill does not go far enough; because our own manufacturers in this country have to conform very strictly either to British Standards Institution standards or to British electrical standards. They are in the unfortunate position, because they conform to our high standards so that we do not have unsafe goods, of having to compete against cheap imports which very often are proved to be unsafe. Obviously that does not help our own manufactured goods. So one would hope that in the foreseeable future we shall get safety of goods legislation which covers not only goods of British manufacture but also goods which are imported into the country.
7.21 p.m.
Lord Bruce of Donington: My Lords, we on this side of the House are grateful to the noble Baroness, Lady Gardner of Parkes, and indeed to her colleague in another place, for having brought the Bill before us. To the formidable list of supporters that the noble Baroness was good enough to recount to us when she introduced the Bill there must now be added the supreme accolade of the support of Her Majesty's Opposition.

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I listened with very great interest to the remarks that fell from the lips of the noble Lord, Lord Airedale. I, too, have several reservations about the drafting of the Bill, but I am due to encounter parliamentary draftsmen in the course of debates on other and more contentious Bills and I do not wish at this stage to get their backs up in any way by adding any criticisms further to those which have already been uttered, albeit indirectly, by the noble Lord, Lord Airedale.
The best support we can give to the noble Baroness in connection with this Bill is to ensure that when it reaches the statute book Her Majesty's Government themselves have adequate powers, in terms of personnel, to enforce its provisions. Therefore, I have a question to ask of the noble Lord, Lord Lucas of Chilworth—it is quite a direct one and is capable of being answered either in the affirmative or the negative without any qualification—as to whether he is satisfied that the enforcement officers themselves have sufficient resources at their disposal to enable proper enforcement of the provisions of the Bill. That is the first question.
The second question arises on the regulations that are already in force in regard to the safety of goods. The noble Lord, Lord Lucas, will remember that he and I have exchanged views across the Floor of the House concerning the enforcement provisions of the many regulations that have passed through this House over the last couple of years. As the noble Lord will know, each of the regulations makes its own provision as to the method of enforcement or in respect of the periods of delay which may be involved in connection with enforcement. What I should like to know from the noble Lord is the fate of the existing regulations which make provision for enforcement on terms rather more lax than those that are contained in the Bill. Is it the noble Lord's intention to produce further regulations under the provisions of this Bill in amendment of the regulations already in force which may be far less stringent? That is something about which I believe the House ought to be informed.
I should like also to add my support to the suggestion made by the noble Baroness, Lady Stedman, concerning extending the period from 48 hours to 72. Our Customs officers in the United Kingdom may be the most skilled, intelligent and perceptive officials on the face of the earth, but even they require expert opinion from time to time. If it be the case, and only if it be the case, that 72 hours would make them more effective, I would unhesitatingly support the suggestion put forward by the noble Baroness. However, that is presumably a matter which can be dealt with at the Committee stage.
As I say, this is only the Second Reading, and there may be points to put in Committee. One hopes that there will be contributions from all sides of the Chamber which may make for constructive detailed improvement of the Bill. In the meantime we on this side are all in favour of any endeavours that can be made, particularly in the light of the Government's comprehensive White Paper, to improve the safety of goods and to reduce the quite unnecessary and very often ghastly toll of injury and death which takes place when shoddy and unsafe goods get on to the market.
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We welcome the Bill and reiterate our thanks to the noble Baroness for introducing it this evening.
7.26 p.m.
Lord Lucas of Chilworth: My Lords, I am most grateful to my noble friend, Lady Gardner of Parkes for having taken up the cause of consumer safety in introducing this Bill to your Lordships this evening. Let me say straight away that this measure, though not a Government Bill, has the full support of the Government. It seeks to implement in part some of the proposals we put foward in July 1984 in our White Paper on the safety of goods. These are important proposals to improve the effectiveness and efficiency of the enforcement of existing safety regulations.
This Bill now before your Lordships contains important new powers enabling Customs and Excise officers to co-operate with trading standards officers in identifying and, if necessary, halting the supply of potentially dangerous imports. It enables trading standards officers to suspend the supply of goods which they suspect of being unsafe or, if necessary, to seize those goods pending further examination and/or prosecution. It also empowers the courts to make orders for the forfeiture of goods where those goods have been found to contravene safety requirements.
In endorsing these new powers the Government have not forgotten the essential principle that regulations should be kept to the minimum necessary to ensure fair and safe trading and, in particular, that the innocent trader who suffers as a result of the use of such powers should be fully compensated for any loss he has incurred. I shall return to the question of compensation in a moment; but perhaps I may say that we have therefore insisted that the promoters of the Bill, as a condition of our support, see to it that there is a fair provision for compensation in the event that goods suspended or seized by enforcement officers turn out to be perfectly safe. We are satisfied that, with the compensation provision, the Bill as a whole is a balanced package which will certainly ease current problems of enforcement without creating any significant new burdens on traders.
The question of the other major proposals in our White Paper on safety of goods has been raised, particularly regarding the confirmation of the position at this moment. I can assure your Lordships' House that the proposal to introduce a general safety duty will be included in legislation to which the Government are committed. However, I have to say to my noble friend that I cannot go quite so firmly as she did in so far as the date is concerned when she offered the thought that perhaps there might be an announcement in the Queen's Speech. I can only say at this moment that it will be brought forward with other measures on the consumer front as soon as parliamentary time permits.
Perhaps I may touch on those very few questions which noble Lords have addressed to me, rather than to my noble friend. I note the point that the noble Lord, Lord Airedale, made with regard to compensation which, very broadly, is exactly the same point that the noble Baroness, Lady Stedman, raised, although she also asked about the Customs' detention power, as did the noble Lord, Lord Bruce of Donington.

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It is vital to put a strict time limit on this power of Customs officers to detain goods, in order to reduce the risk of successful challenge to the Bill under Article 30 of the Treaty of Rome. That article prohibits measures which have the effect of restricting imports, and although Article 36 of the treaty to which the noble Baroness referred permits exceptions to this rule on the grounds of health and safety, any measures taken on these grounds must be strictly proportionate to the health and safety risk in question. There is no black and white answer to the question of how long a period of detention would be considered proportionate, but we have essentially in this Bill to look at the purpose of the detention provision.
The noble Baroness, Lady Fisher of Rednal, raised a point on the disclosure of information. Perhaps I may just say to her at this stage that we consider it an important principle that public authorities should not be allowed very wide access to information about business and businessmen, as they are under this Bill, without imposing clear penalties in the event that this authority is abused. The provision in this Bill restricting disclosure of information is based closely on the tried and tested provisions in the Consumer Safety Act 1978 and the related legislation. This provision makes it an offence, subject to certain specified exceptions, to disclose any information falling into certain closely defined categories. It is not widely understood that the categories of information, disclosure of which is made an offence, are very restricted in scope.
The noble Lord, Lord Bruce of Donington, asked me specifically whether we were satisfied that when this Bill, to which he has given his support, becomes an Act the Customs and Excise authorities on the one hand, and the trading standards officers on the other, will have enough resource to meet the new commitment. Yes, my Lords, we believe that they will. The noble Lord will recall that it is the local authorities' responsibility in so far as trading standards officers are concerned.
But, in general, perhaps I may suggest to the House that the Bill will make enforcement more efficient and more effective, in so far as more can be done within the current level of resource, because it enables the enforcement officers on both sides of the fence, as it were, to carry out their duties at the point of first supply rather than, as at present, chasing around the country to thousands and thousands of retail and wholesale outlets.
The noble Lord asked a second fairly straightforward question: what will happen to the enforcement arrangements so far as existing regulations are concerned? The arrangements set out in this Bill override the previous arrangements for enforcement of regulations under the Act of 1961 and the Consumer Safety Act 1978.
I think that I have answered the questions directly put to me. We are quite sure that this legislation will make a large contribution towards the general safety of goods, particularly toys and those seasonal goods such as swimming pools, Christmas tree lights and so on, which I think is what my noble friend is seeking, and will most certainly be complementary to the wider consumer protection legislation which, as I have
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already indicated, the Government expect to introduce into Parliament as soon as time permits. I commend this Bill to your Lordships.
7.35 p.m.
Baroness Gardner of Parkes: My Lords, I thank noble Lords who have taken part in this Second Reading debate and who have made their points so clearly and succinctly. It is clear that we shall have quite a lot to discuss at the Committee stage in terms of compensation.
I thought that the case made by the noble Baroness was most interesting, as was the question of the period of time for which goods can be detained. Obviously there is much to consider on that. I thought that the two interests might be slightly in conflict, but perhaps the longer the detention proposed the less strong the case against compensation; and of those two I personally favour the compensation case made by the noble Baroness. We must look carefully into these matters. Meanwhile, I thank my noble friend the Minister for giving such a good reply and putting the Government's position so clearly for us, and I also thank those who have taken part in the debate.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Cutlery and Stainless Steel Flatware Industry (Scientific Research Levy) (Abolition) Order 1986
7.37 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth rose to move, That the draft order laid before the House on 30th April be approved. [22nd Report from the Joint Committee.]
The noble Lord said: My Lords, I beg to move that the Cutlery and Stainless Steel Flatware Industry (Scientific Research Levy) (Abolition) Order 1986, which was laid before the House on 30th April, be approved. The effect of the order would be to abolish the statutory levy on the cutlery and stainless steel flatwear industry, which contributes towards the funding of the Cutlery and Allied Trades Research Association—CATRA for short. The levy was last reviewed in 1980 as part of a government review of all statutory levies, when there was a narrow majority in favour of its retention. Since that time, however, the costs in staff time involved in administering the levy have increased, whereas the number of companies paying it has fallen. The effect of this has been that these costs, which the Department of Trade and Industry cannot recover, now represent about one-quarter of the total levy money collected.
In view of this, the department undertook a further review in 1985. Representative bodies of both employers and employees in the industry were consulted and the levy-paying firms were balloted on two alternative propositions. The first proposition was to abolish the levy and the second was to raise the minimum qualifying turnover from its present £3,000 per annum to £100,000 per annum. This would of course have helped to reduce collection costs by exempting some of the smaller companies from liability to pay the levy. The results of this review

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indicated that their unequivocal support for the continuation of the levy did not exist. Given these findings and the disproportionate costs of collection, the conclusion drawn, therefore, is that it can no longer be justified.
The Cutlery and Allied Trades Research Association was also consulted and I myself met representatives of CATRA to hear their views. Indeed, I visited the research association's premises in Sheffield to see what was being done before there was a final decision. The research association has been kept fully informed of the outcome of the review and the proposal to abolish the levy. Indeed, I now understand that the association has accepted the proposal to end the levy and is setting about the task of developing other sources of income. I commend the Cutlery and Allied Trades Research Association for the pragmatism which it has shown and the realism which it has demonstrated in this approach.
In 1984, the levy collected amounted to only 27 per cent. of CATRA's total income, compared with 40 per cent. in 1979. On the other hand, CATRA's commercial performance has improved considerably in recent years, with income from private sector clients rising from 8 per cent. of total income in 1982 to 40 per cent. in 1984. In order therefore that CATRA can adjust to the loss of the levy income it is proposed that the termination of the levy should be delayed until the end of 1987.
In conclusion, I emphasise that this order is intended to remove a requirement which the cutlery industry has demonstrated no strong desire to have retained and which has become disproportionately expensive to administer. With that explanation, I commend the order to the House.
Moved, that the draft order laid before the House on 30th April be approved. [22nd Report from the Joint Committee.]—(Lord Lucas of Chilworth.)
Lord Bruce of Donington: My Lords, we are grateful to the noble Lord for having introduced this draft instrument this evening. Perhaps we ought to say how remarkable it is that all non-contentious items seem to come before us for affirmative resolution and that only the controversial ones seem to require the negative procedure. But that is neither here nor here on this instrument. We on this side of the House do not see any reason why we should do anything other than support the Government in the matter.
There is one minor point which the noble Lord may care to clear up. He said that the association accepted the proposals. There is a world of difference between acceptance and support. I take it that we can have the noble Lord's assurance that the association's arm was in no way twisted in this matter and that what he really meant was that the association entirely supported the proposals. Subject to the noble Lord's satisfactory reply to that query, we on this side of the House have no reason to do anything other than support the passing of the order.
Lord Lucas of Chilworth: My Lords, I took note of what the noble Lord, Lord Bruce of Donington, said in the earlier part of his response, over which I shall also
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pass. He asked me a specific question. The answer is, no. The research association did not have its arm twisted, but no research association receiving a percentage of its income by virtue of a levy likes to see that removed. Nevertheless, when we pointed out to the association the costs and the relative decline of that source of income and when we offered some two years to find additional sources, it accepted the wisdom of our approach in the best interests of its own industry. So I can say quite fairly to the noble Lord that its acceptance is alongside its support.
On Question, Motion agreed to.
Lord Brabazon of Tara: My Lords, in view of the fact that we are due to return to the Dockyard Services Bill in one minute, and as I think that all noble Lords who wish to take part in the Committee stage are present at the moment, I see no reason to adjourn the House.

Dockyard Services Bill
7.44 p.m.
House again in Committee on Clause 1.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 10:
Page 2, line 18, at end insert ("but no company formed under this subsection will have any title to the intellectual property rights currently held in the Dockyards, and all such rights will remain the property of the Ministry of Defence.")
The noble Lord said: I must make a confession, in that in the discussions outside the Committee I was responsible for this amendment. I am so sorry that my name was not put on it. In view of my experience of intellectual property—I must remind Members of the Committee that intellectual property is rather a pompous term for patents, trademarks, know-how, copyright and designs—it seemed to me that the Government might get themselves into difficulties in relation to these rights if they attempted to assign those rights at this stage to a company. They may be in respect of patent rights, they may be secret patents, they may be licences where there are a lot of commercial firms and where difficulties may arise. There will be thousands of drawings in the hands of the dockyards, and copyright questions will arise.
I do not think that I need go on much longer in moving this amendment. I could explain further details and further difficulties but as the amendment is really a probing amendment I should just like to know what the Government are presuming to do in regard to all these intellectual property rights and whether they will agree that it would be preferable, at least at the present time, to have the property remain in the hands of the Ministry of Defence. I beg to move.
Lord Denning: This amendment is admirably designed but I am afraid that it is unnecessary. I have examined the contract—goodness knows how many pages there are. There are three or four pages to protect these intellectual property rights both existing property rights and future ones. I cannot say that I have studied every detail but it seems to me that the contract protects the Government, the authority and

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all concerned very well in regard to intellectual property rights. I think that this is probably unnecessary.
Lord Trefgarne: I am beginning to feel a little redundant because the noble and learned Lord is quite right. One that basis, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Lloyd of Kilgerran: In view of the speech made by the noble and learned Lord, I must make another confession. I had not read the licence and did not realise that that was in the licence and that the matter was covered. I therefore ask the leave of the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 11:
Page 2, line 18, at end insert—
("( ) A company formed under subsection (3) above shall maintain a system of apprentice training at a level of quality and quantity as determined by the Secretary of State.").
The noble Lord said: This amendment, standing in the name of the noble Lord, Lord Crawshaw of Aintree, and myself, deals with a very important aspect of the situation. We are all concerned about apprenticeships. Sadly, it is a declining industry. At one time most crafts and trades and many that perhaps did not aspire to that title were keen to ensure that apprenticeships were available. The Minister may seek to assure us that there is no need to be so specific and visible in our desire but in the dockyards there has been a strong and proud record of providing apprenticeships.
A dockyard apprenticeship has always been a prized training; it is not merely prized by the apprentice himself but it is looked upon by the community, certainly in Plymouth, with a great deal of pride and satisfaction. The record shows that many ex-apprentices are at the top of the tree that they sought to climb once they had served their time.
The apprenticeship system has undergone a change. At one time it lasted for seven years but now, by and large, the average term of an apprenticeship is four years. From the document that I have before me, I am informed that there are still a great many skills that are currently the subject of apprenticeships. They include electrical fitter, engine fitter, turner, shipwright, plumber, boilermaker, riveter, coppersmith, painter, founder, smith, hosemaker, pattern maker, mason, saltmaker, colour maker, joiner, welder, burner and caulker.
Those are clearly all seen by the admiralty as being trades and skills that need to be maintained. The purpose of this simple amendment is to ask the Minister what steps the Government are taking, and what steps they could be willing to take, to ensure that devotion to the maintenance of quality will be written into the arrangements for the future.
I may say that it is not just a question of the management's wishes because the trade unions themselves, which have undergone a sea change in their structure and organisation over the past 30 or 40 years, are as jealous as anybody else about the need to maintain the present situation. I am told that the
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number of apprentices who are to be trained in any given period is not merely determined arbitrarily by the management or by the Admiralty, or even by taking a look at the dole queue. The number chosen is the result of sensible and realistic negotiations between the trade unions and the MoD.
In this amendment, we are seeking to maintain the standing and stature of the naval dockyards. That is to say, whatever may happen to them managerially, we want them to be places in which people will not only be proud to work but will be proud to say they were trained. We are also concerned that the chosen companies will undertake that responsibility.
I am sorry to have to say that my experience in the sphere of building, for instance, was that the large companies had a poorer record by comparison with the smaller companies in their devotion to finding apprentices. In other words, the large companies tend to say, "Somebody else can train them but we will pay them, and pay them well, and look after them". If that were to happen in this case, not only would it be sad from the point of view from the industry but it would also be sad for the nation. There are considerations other than simply the viability or the economcs of the situation. I hope that the Minister will be able to say something helpful. I beg to move.
Lord Denning: This aspect, too, is covered by the contract. There are several pages—it is a very long document—but, summarised, it comes to this. The contractor will be required to complete all existing apprenticeships that are running on vesting day. The contractor will also be required to sustain apprentice training to levels and standards that will retain a viable dockyard workforce here and provide the Ministry with a supply of engineers and technicians. It takes several pages of the contract to say that, but it probably covers the position.
Lord Ironside: The noble and learned Lord, Lord Denning, has already made some of the points that I was going to make. In fact, I see that the matter is laid down in the invitation to tender documents. I see also that the requirement at Devonport will be 200 apprentices and about 150 at Rosyth. That is somewhat smaller than the requirements as they exist at present.
Negotiations will take place between the MoD and the succesful contractor on the size of the intake for the future. I am wondering how serious those negotiations will be. I see also that there are certain apprentices who are trained under the Ministry's deeds of appenticeship.Those apprentices meet the particular requirements of the Ministry of Defence. Will my noble friend the Minister say a little bit more about that aspect of the apprenticeship scheme?
Baroness Vickers: For over 30 years I have been working to get apprentices more and more accepted in the dockyard. We have been very successful in getting girls accepted there. In fact, one of them is now a manager. She has a very interesting history. She came from Uganda as a refugee and went into Chatham dockyard. She then got married and went down to Devonport, and has now become a manager. They really have proved their worth.

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One point that worries me is whether the dockyard will recruit just enough people to work there. Previously, the dockyard trained more than it needed because the apprentices could then get jobs anywhere in Great Britain. It is thought that if the dockyard does train more apprentices than it needs, then those apprentices could eventually set up small businesses in the area of Devon and Cornwall, where small businesses are very badly needed. I suggest that the apprentices are not limited to a certain number. There should be the number required for the dockyard, and then some more should be well trained, as they used to be in the old days, so that they may go out and set up businesses for themselves.
Lord Crawshaw of Aintree: I was very concerned about apprenticeship training, having regard for the fact that it has a tremendous impact on the workforce in the areas affected, because they are areas of high unemployment. When I set down the amendment that is in my name and that of my noble friend, I had not had an opportunity to study Annex 12, which deals with apprenticeship training. It sets out all the different skills in which the dockyards will be required to train people. It satisfies me that provision is made there for the required people. However, the amendment makes mention of,
"A level of quality and quantity as determined by the Secretary of State".
The annex uses the wording,
"would agree with the authority from time to time".
Will the Minister say what might happen if the authority considers that there ought to be more apprentices training in a particular skill whereas the people who are actually running the enterprise do not agree? There is also the point that at the end of the seven-year period, it will be just as important to ensure the continuity of apprenticeships. The apprentices are of course not only required for the yards themselves but also for other areas of the MoD.
Lord Trefgarne: Not for the first time the noble and learned Lord, Lord Denning, has got it right, when he told the Committee that this is essentially a matter for the contract, as the noble Lord, Lord Crawshaw, has recognised. The numbers will primarily be determined by the contractors and will relate to the requirements of the contract of work that they have. They will also have to be to the satisfaction of the Secretary of State. So if the contractors try to use too few, then the Secretary of State will clearly prevail.
The noble Lord, Lord Crawshaw, touched on another point. It is also the case that such apprentices are often required in other parts of the Ministry of Defence. We hope and expect that apprentices will continue to be trained in the dockyards, and it will of course be for the Ministry of Defence to meet the additional costs of those particular apprentices. In the light of those assurances, I hope it will be recognised that the amendment is unnecessary.
8 p.m.
Lord Graham of Edmonton: I am grateful to the Minister and in particular to the noble and learned
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Lord, Lord Denning, for drawing attention to that fact. However, can the Minister tell us what is the status of the contract from the point of view of enforceability? If someone accepts a contract which clearly lays down that there needs to be a programme of apprentice training and then for one reason or another does not fulfil it, what will then happen? This could be due to the unsuitability of possible applicants, a change in the labour market, the wages that are offered; all sorts of reasons can militate. Not least of these could be the lack of desire on the part of the contractor to take on apprentices and spend the money because apprentices, although lowly paid, cost the employer a great deal of money. I am simply saying to the Minister that, having got it right at the beginning by putting in the terms of a contract, what will happen if subsequently the person who signed the contract is unable or unwilling to fulfil it?
Lord Trefgarne: The ultimate sanction in the possession of the Ministry of Defence is to terminate the contract, although I am not suggesting that that would be the right course on a comparatively small matter. I do not think there will be any difficulty. I am sure that the Government's view is shared throughout the Committee—that we should have the maximum number of apprentices that we can afford and are appropriate. There will be additional apprentices in the dockyards for eventual work in other parts of the Ministry of Defence who will be paid for separately under the contractual arrangements to which I have referred. In addition to the terms of the contract the annual intake of apprentices will also be a matter on which the Secretary of State's view will be relevant, and so I do not believe that there is any cause for concern.
Baroness Seear: I am sure that the Minister will bear in mind that some of the old-fashioned apprenticeship schemes are not necessarily what is required in the light of modern needs and modern training programmes. In fact, a great many people would rather see a much revised form of training than the perpetuation of old-style aprenticeships.
Lord Trefgarne: The noble Baroness, Lady Seear, puts her finger on a useful point, but I was addressing my reply to the amendment on the Marshalled List.
Lord Graham of Edmonton: The noble Lord the Minister satisfies me substantially, but my understanding is that each trade specification is assessed jointly by management and the trade unions concerned. Can the Minister tell the Committee whether in the future there is a part to be played by established trade union machinery? I am not referring to negotiations and wages, but there must be some kind of current raison d'être for these things. Can the Minister tell the Committee whether, in his mind, that kind of arrangement will continue where the trade unions have an input? I am talking not about control or negotiation but about discussion because clearly the unions will have to be realistic and they will have something to say.
Lord Trefgarne: Yes, I am certain that in reaching a view on the number of apprentices that are appropri-

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ate, either initially or in respect of the annual intake, the views of the trade unions will very much be taken into account.
The Earl of Selkirk: I make one observation. Of all the arrangements in our country today apprentice training is one of the greatest lacks; there is a terrible lack of apprentice training. My noble friend the Minister says that it goes into the contract and the noble and learned Lord said the same. But would it not be worthwhile saying that Parliament regards this as an integral and essential element? That would give it a status. As was said, what happens if they do not do it? Will the ministry break off the whole contract because there are too few apprentices? I can see that there is a perfectly good answer in that it is all in the contract, but people do not always fulfil contracts. There is a status in this. Apprentice training is of vital importance and it is deeply lacking at present.
Lord Trefgarne: I do not disagree with my noble friend about the importance of this matter, but I suggest to him that we need to maintain a degree of flexibility and to write these things in concrete in the statute is not necessarily the best way to achieve that. The contract is a matter which will be discussed between the two parties from time to time. It will run for a period of seven years, as we have already discussed, and will therefore be amenable to change in the light of the circumstances prevailing at the time it is renewed. I hope that, on reflection, my noble friend will agree that to set this in statute would be a departure from the necessary flexibility we are aiming to achieve in these arrangements.
I have given some clear assurances about what will be in the contract. I have made it clear that the views of my right honourable friend the Secretary of State, ors whoever may be the Secretary of State, will in the end determine the number of apprentices taken into the dockyards in this way. I hope my noble friend will be satisfied with that.
Lord Graham of Edmonton: So far as I am concerned I take the Minister's assurances at their face value. He understands that there is every intention on the part of those who are concerned with scrutinising the contract that it will be fulfilled and met. If it is met, there is no problem. However, I have already pointed out a number of ways in which problems can arise. Ministers are always loath to write on the face of a Bill what are small commitments compared to the totality of the Bill. Of course, it begins to look a hotch-potch. I am anxious that those who are concerned in Plymouth and Rosyth, and particularly in the trade unions affected, will carefully read what the Minister said, and if they are not satisfied, and I understand that dissatisfaction, I shall certainly come back with a comparable amendment on Report. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 12 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 13:
Page 2, line 18, at end insert—
(" ( ) A company formed under subsection (2) above shall have a duty to consult and agree with the recognised trade unions as to
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the setting up and maintenance of suitable machinery to negotiate upon and settle terms and conditions of employment, to provide reference to arbitration in default of settlement and to discuss other matters of mutual interest to the company and their employees.")
The noble Lord said: Again, this amendment may be seen by the Minister to be one that need not be written on the face of the Bill because he is satisfied that somewhere, even in the contract, there is something that takes it into account. Our concern here is that as part of the Ministry of Defence within the Civil Service the Royal dockyards are covered by the Whitley arrangements. The amendment seeks to ensure that suitable and acceptable joint negotiating and consulting machinery is established by the new company or companies after commercial management is introduced. The present Whitley arrangements ensure that management and recognised trade unions, both industrial and non-industrial, meet on a regular basis to consider problems of mutual concern and to deliberate on their resolution.
These meetings not only discuss a range of matters which are fairly well known but are also concerned with such matters as health and safety. We are not talking only about formal arrangements. The amendment refers to "consult and agree" and "suitable machinery", and this can often be informal as well as formal. We are not concerned about the arbitration agreements because those are fairly heavily bound inside Civil Service procedures.
Ministers have said that there are negotiating and consulting arrangements, particularly with the transfer under TUPE '81, and we have already had a go at that. We have seen how that has had to be revised in the light of our earlier debates. What we seek is to satisfy the trade unions, and I make no bones about that. The trade unions are worried that in the future something which they have now—settled, joint negotiating, consultative and arbitration machinery—is somehow at risk.
If the Minister can satisfy me that he understands their anxieties and will also assure them that there are arrangements enshrined in documents (which I ought to have seen but have not) or set out in some other way, then I am absolutely certain that they will be relieved at least about the point that I am seeking to make in this amendment. I beg to move.
Lord Denning: I should like to say just a few words. This provision is very desirable in practice, but I doubt whether it is necessary to write it into a statute, because under the provisions of the Transfer of Undertaking Regulations the collective agreements are continued after the transfer; and if they are continued subject to any negotiation, it follows that in order to be varied at all there must be consultation and machinery for consultation. It is a desirable provision but I doubt whether it is necessary to put it in the statute.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): The Government are of course conscious of the concern expressed by the workforce and their union representatives about the future machinery for industrial relations in the new companies, and I think that has been made clear at a number of discussions at all levels in the Ministry of Defence. The machinery for consultation in the Civil

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Service is comprehensive and well established. It is quite understandable that the unions and staff should wish to see a continuation of that machinery in the new dockyard companies; but there will have to be some changes, and I doubt whether anyone imagines for one minute that this will not be the case.
The present Civil Service machinery for negotiation and consultation to which the noble Lord has referred—the Whitley system—is quite highly centralised and structured. Pay and conditions are negotiated centrally with the Treasury and the MPO for both industrial and non-industrial civil servants. Within the Ministry of Defence the Whitley structure centres on the two major departmental committees for the industrial and non-industrial staffs. In the dockyards the naval base Whitley structures play an important role, as do the two major functional committees. Under commercial management these links will no longer exist and there will be a need for wider discussions in the dockyard companies about pay and other major terms and conditions. These matters will no longer depend on central agreements concluded in London.
Yet it is certainly the Government's wish to see proper industrial relations machinery operating in the new companies. That is why we have expressly included in the invitation to tender which was issued to the companies in April (a copy of which is available in the Library) an indication that the contractor will be expected, in consultation with the existing recognised trades unions, to adapt the existing Civil Service machinery to obtain the most appropriate structure for the new organisation and to maintain that structure in being; and when tenders are submitted and are being evaluated within the Ministry, bidders' proposals for industrial relations policy and machinery will be assessed and will play a significant part in that evaluation. So I hope that the noble Lord will be in no doubt that the Government wish to see the new companies with proper, workable industrial relations policies and practices, and that they should be in place by vesting day.
I understand and have some sympathy with the spirit behind this amendment. Just as much as the noble Lord, we wish to see a company with good, workable and working industrial relations policy and practice; but, equally, I cannot readily agree to the form in which that spirit is expressed in this amendment. It is our firm view that good industrial relations must grow out of discussion, consultation and negotiation between managers and trades unions—rather in the way that the noble and learned Lord, Lord Denning, suggested that they should—and not from a formulation of duty embodied in an Act of Parliament.
I think that that gives some assurance. Certainly I think it adds to what the noble and learned Lord has just said, and I hope that the noble Lord will feel able to withdraw his Amendment.
8.15 p.m.
Lord Mulley: There seems to be some confusion here because the noble and learned Lord, Lord Denning, said that as a matter of automaticity the
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existing agreements would carry forward. I am afraid that in my view the noble and learned Lord is mistaken, and that has been confirmed by the Minister. They will not. The existing agreements will not become part of the new arrangement by virtue of the fact that they are in some tender documents.
It is quite clear that the Government, happily, will do the right thing and insist that proper negotiations, and so on, should take place. I do not understand why all this has to be done in such a hole-in-the-corner way. If the intentions are as good and laudable as they sound, why on earth can they not be put in the statute? As it happens, I agree with the noble Lord in believing that the best way to get good industrial relations is by negotiation between the workpeople, their representatives and the employers; but that is not the way that the present Government have dealt with industrial relations. There is no strike of more than about three people that probably will not end up in a court of law—and judging by the decisions that some of the judges have been giving, any darned thing can happen as a consequence of these procedures. Practically every industrial relations dispute now goes to the courts.
Therefore, it is important that the courts should at least have some definite status derived from statute, as otherwise it will happen as we have just seen in another matter concerning hippies, where a judge appeared to be saying that the hippies could stay where they were for seven days and then, after a press conference, saying that he did not mean seven days but that they should leave tomorrow. That is the same sort of situation that is developing in the field of industrial relations. If it gets into the judiciary, goodness knows what will happen. Therefore, I think we need a clear statement about this matter. If these words are not right, then perhaps the noble Lord the Minister will give an undertaking to produce a version of his own at the next stage of the Bill, and then I expect that my noble friend will agree. I hope that the noble Minister will say that his excellent words can be incorporated in a suitable amendment to the Bill.
Lord Graham of Edmonton: I am grateful to the Members of the Committee who have spoken, and to the Minister. I accept his understanding absolutely. The problem is that two years ago the Minister who is now sitting next to him gave comparable assurances when we were dealing with the privatisation of the Royal Ordnance factories. They were the same kind of assurances: that discussions were in train between management and trades unions which were certain to lead to understandings and agreements. I have to tell the Minister that two years later no such agreements on procedure, machinery and consultation have yet been reached.
The Minister is asking us to understand that when he says, "It is our intention and our endeavour, and we understand …", we have to contemplate the possibility that two or three years later there will be no agreement on how to set about it. I say to the Minister that this is not a matter on which we intend to divide the Committee tonight. But, interestingly, the noble and learned Lord, Lord Denning, says that everything that is currently in vogue will automatically be enshrined under the assurances tonight because of the 1981 TUPE Regulations. Clearly the Minister has his

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brief. He pointed out that there would need to be negotiations, and everyone accepted that some things would have to be changed. But whatever are the things that the Minister might accept have to be changed may not necessarily be the same things as the trade unions accept will have to be changed, and vice versa. Unhappily, we are in an area where we cannot negotiate. We cannot negotiate across the Floor of this Chamber between trades unions and management. Of course we cannot. All that we can do is to use the opportunity that we have been given tonight and will have in the two subsequent stages to the Bill.
I say to the Minister that in my view the suggestion of the noble Lord, Lord Mulley, is one that needs to be considered. It is something very important, but which is no more than something which has the validity and status of a communication from the appropriate Minister (or his senior civil servant) to the body which looks after the combined trade union interests stating the Government's intentions. That, at least, will be something more than they have now. I hope that the Minister will say something helpful before we move on.
Lord Glenarthur: I note the noble Lord's point of view. As I said, the intention is that the modifications to which I referred should be the minimum to reflect the structural change. Should the new employer wish to change the machinery significantly, he will have to negotiate and he will have to negotiate with the trade unions.
It is the Government's view that the conduct of industrial relations within a dockyard company is a matter for that company—for its managers, its unions and its employees. It must be clear to the noble Lord that the driving thrust behind the introduction of commercial management is the need to free the dockyards from the centralised constraining restrictions of the Civil Service system. To seek to base the industrial relations machinery and policy in statute, as the amendment does, would effectively be a continuation of those restrictions. I believe that there is logic in what I have said. There is a need to negotiate if substantial, change is contemplated, and that is precisely what would take place. But I do not believe that it is necessary to go so far as both noble Lords have suggested.
Lord Graham of Edmonton: We have only asked the Minister to write or to authorise a letter to spell this out. People outside the House can read in Hansard what he said, but we need more than that to satisfy the anxiety of the trade unions.
Lord Mulley: I am sure that my noble friend is aware that when a matter comes before the courts, as all too unhappily industrial relations matters do now, what a Minister says in this House or in another place is of no relevance. The judges are concerned only with the statute as it emanates from Royal Assent. If there is nothing in the statute, what the Minister may say in a letter or on the Floor of the Chamber is of no relevance and no help at all.
Lord Glenarthur: If a letter will make a substantial difference—I cannot believe that it—
Lord Mulley: No, It will not.
Lord Glenarthur: The noble Lord says that it will not. I rather agree with him. What is said here is as much as can be put in a letter. If the noble Lord, Lord Graham, would like to discuss this, I can facilitate an arrangement whereby the terms of such a letter can be discussed. Beyond that, I cannot go.
Lord Graham of Edmonton: I assure the Minister that it is not my intention tonight to press this amendment. But those outside the Chamber advise me that the matter should be taken further. We understand the reality of parliamentary arithmetic and we shall not waste the time of the Committee or do anything which at the end of the day may be counterproductive. A sensible atmosphere has pervaded the Committee this evening. We wish to demonstrate that we are as full of good intentions as is the Minister. I accept his offer that, so far as he can—and I realise there are limits to how far he can go—he will attempt to satisfy the worries of those outside the Chamber by a letter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Trefgarne Lord Trefgarne moved Amendment No. 14:
Page 2, line 19, leave out subsection (4) and insert—
("(4) The Transfer of Undertakings (Protection of Employment) Regulations 1981 shall apply to the transfer of the dockyard undertaking or any part of it whether or not, apart from this provision, the undertaking would be treated as an undertaking in the nature of a commercial venture for the purposes of those Regulations, and, for those purposes, the services of the qualified dockyard service employees without more shall be treated as a part of that undertaking capable of being transferred as a business whether or not the company which is to become their employer also provides designated dockyard services.").
The noble Lord said: Earlier when we discussed the applicability of the Transfer of Undertakings (Protection of Employment) Regulations 1981, the noble and learned Lord, Lord Denning, indicated that he was not entirely happy that they were applicable as they stood. I am bound to say that the Government do not share that view, but I accept that there is room for more than one respectable view on the matter. In order to assuage his anxieties and I dare say those of others, I agreed to bring forward this amendment to put the matter beyond any possible doubt. I beg to move.
Lord Denning: In view of our previous discussion we are, I hope, in future to deal with one company and not two. In those circumstances, although I do not object to the principle underlying the amendment it will have to be varied. The words,
"the services of the qualified dockyard service employees without more"
still bring in the concept of two companies, one for the employees and the other for the assets. I do not object to the motive underlying the amendment. I hope that it will be amended accordingly so as to deal with what I hope will be the new situation of one company.
Lord Mulley: Can the Minister give us a firm undertaking now that he is to introduce amendments for one company only? That will facilitate our consideration of what we might wish to put down at the next stage of the Bill.
Lord Trefgarne: I have not yet given that assurance in terms, but I have said that I am attracted to the argument deployed by the noble and learned Lord. I need still to overcome one or two difficulties before we can proceed in that way, but I hope to be able to do that, and I shall certainly want to do so in consultation with the noble and learned Lord.
Lord Mulley: We have great faith in the Minister's ability to overcome such difficulties. He seems to have his mind and heart set in the right direction, and I am sure that he will get there in the end.
The Earl of Selkirk: The amendment seems particularly to satisfy the noble and learned Lord, but one aspect is not mentioned. What about the Royal Corps of Naval Constructors? Where do they stand in all this? They serve the Ministry of Defence; they serve in Bath, in the dockyards and sometimes at sea. Will they be transferred if they have an appointment in the dockyards; or how do they stand? They are probably the most highly educated people as a body in this country. They are the core of the naval constructors. They are where the bases work from. Where do they stand? Neither the Bill nor anything else mentions them. Can the noble Lord tell us something about them?
Lord Trefgarne: The Bill says nothing about them because they are in no way affected by it.
The Earl of Selkirk: May I ask what that means? Does it mean that if they are working in the dockyards they will be transferred or that they are excepted from transfer? I think that we really ought to know that.
Lord Trefgarne: The Royal Corps of Naval Constructors are civil servants and they are not affected by the Bill.
The Earl of Selkirk: The dockyard workers, of course, are also civil servants.
Lord Trefgarne: They are affected.
Lord Denning: May I suggest a way out? Why not at the moment withdraw Amendments Nos. 14 and 15 and let appropriate new amendments be put in when we are considering the new set-up?
Lord Trefgarne: If the Committee is content, I should prefer the amendment to be agreed to as is proposed. I recognise that it may need changing, but at least I shall have something in the Bill which gets us a little way down the road.
Lord Denning: Very well; I shall not object furthes.
On Question, amendment agreed to.
Lord Denning Lord Denning moved Amendment No. 15:
Page 2, line 19, leave out subsection (4) and insert—
("(4) The provision of European Community Law contained in Council Directive 77/187 shall apply to the transfer of the dockyard undertaking to another company; and shall take precedence over any regulation or enactment which fails to implement the Directive correctly.")
The noble and learned Lord said: In view of what the Minister said, I should rather like this amendment to go in too, because I am only stating in it what is the law of the land:
"The provision of European Community Law contained in Council Directive 77/187 shall apply to the transfer of the dockyard undertaking to another company; and shall take precedence over any regulation or enactment which fails to implement the Directive correctly".
That is simply a statement of the law as I understand it to be. If the Minister is going on with his Amendment No. 14, I should like to go on with my Amendment No. 15 for the time being until we see the new procedure. I beg to move.
Lord Trefgarne: To be truthful, I am not fully briefed to counter the amendment of the noble and learned Lord. I am therefore inclined to suggest that, the Committee having accepted my amendment, it ought to accept that of the noble and learned Lord, but with the same proviso as he attached to mine: namely, that we may need to change it.
Lord Denning: That is a very acceptable solution.
Lord Mulley: The amendment underlines the point that I was trying to put earlier: it puts industrial relations in the dockyards in the lap of the courts because only the courts can decide whether this or that was done correctly.
Lord Trefgarne: I have not for a moment indicated satisfaction with the amendment moved by the noble and learned Lord, but in the interests of harmony and in sweetness and light I thought that the best thing to do at this stage was to agree with what the noble and learned Lord proposed with the proviso that we may well have to look at it again when we get to the next stage, in the light of whatever other arrangements we may then propose.
Lord Denning: I quite agree.
On Question, amendment agreed to.
8.30 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 16:
Page 2, line 26, at end insert ("and all employees of the company or any future company shall be employed on terms and conditions no less favourable than those applicable to the civil service of the Crown.").
The noble Lord said: The noble Lord the Minister may feel that this amendment is unnecessary because the Government are full of good intentions. The Bill is short on clauses and subsections but it is full of good intentions. The purpose of the amendment is to seek to ensure that the terms and conditions of service of dockyard employees are not worsened as a result of privatisation.
The noble Lord the Minister has already pointed out that once the Government disappear as a direct negotiator with dockyard workers, terms and conditions of service are matters for discussion and determination between the employer—the contractor—and the employee—the trade unions. TUPE '81 will apply only on vesting day. As the noble Lord has pointed out, after vesting day we are into a new ball game. The trade unions and the workforce want some guarantees from the Government that they will not be at the contractors' mercy.
If the Committee trusts the contractors to be good employers, nine times out of ten it will be right. If a contractor in the Royal dockyards once gets it wrong we may be in serious difficulties. We are talking about pay, overtime, shift work payments, the age of retirement, travel and subsistence payments, leave and holiday entitlements, working hours and recruitment, promotion and appointment procedures. The trade unions see all those things as part of what is categorised as "terms and conditions".
We want to hear from the Minister how he sees the future after vesting day for the people who serve him, the dockyards and the nation so well. It has been suggested that TUPE 1981 may not be applicable on the changeover of a contract. The main criteria for deciding which company is to win a new contract will be the lowest pay and the fewest employees, or possibly both.
The amendment is necessary to set a minimum level for conditions of service in that respect. These are the genuine and heartfelt worries of a group of people who are realists. In Plymouth, where the workforce has suffered catastrophic losses, they need to be. The community has suffered from tens of thousands of people being made unemployed. People are realists, but they are asking their present employers, "Will you try to ensure that after you have gone our pay and conditions are not worsened?" I beg to move.
Lord Glenarthur: Once again, the noble Lord, Lord Graham, has put forward an amendment which he has argued is in the best interests of the workforce and which may, on the face of it, appear to be a proper step to take in the protection of its interests. The Government are well aware of the concerns of the dockyard employees. A major aspect of the apprehension that the employees feel is the future prospects for their terms and conditions of employment—the type of matter to which the noble Lord referred.
I shall briefly outline the position. Under TUPE, the terms and conditions of service which have been built up over the years will not be lost because of the change
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to commercial management. They will transfer to the new companies with the exception of some terms and conditions, for example, restrictions on political activities specific to Crown service.
On vesting day, the terms and conditions of the new companies will, to all intents and purposes, be those applying immediately before. TUPE also provides for continuity of employment, collective agreements and trade union recognition to transfer to the new employer. The regulations also provide that all employees in employment transfer. The new employer cannot pick and choose whom he wishes to take on. The regulations provide a very real degree of protection for employees and their terms and conditions of service at the time of transfer.
The point has been made that the regulations provide no lasting guarantee or protection of terms and conditions of service. That was very much the thrust of the noble Lord's concern. They do not and, indeed, they are not designed to do so. It would be a strange organisation where the whole basis of the employment contract was subject to an overriding limitation on its development and action, and yet that is what the noble Lord's amendment seeks to do. It does not only place a limitation, it makes that limitation a statutory one.
After vesting day, the dockyards will no longer be part of the Civil Service. It would be absurd to link their terms and conditions of employment to a previous organisation's structure, particularly to one which I believe is unsuitable because it exerts restraints militating against the operation of the organisation and its full potential.
Irrespective of the understandable intentions behind it, the amendment would impose upon the dockyards the self same centralised constraints from which they need to be released. In the new dockyard companies, as in any other, it is for the managers of the company to manage all aspects of their enterprise with the fullest possible responsibility and authority. The amendment would erode and limit that authority—that right to manage—by imposing a statutory link with an organisation of which the company is no longer a part. It cuts across the fundamental tenet of commercial management, and it could be a most rigorous straitjacket upon the new companies which would ultimately work to their disadvantage and to the disadvantage of those who work for them.
I hope that that is helpful to the noble Lord. When he said that TUPE was not applicable for changeover of contract—I think that those were the words he used—
Lord Graham of Edmonton: Yes.
Lord Glenarthur:—he is correct. There is no transfer of undertaking when contracts change and the employer—that is to say, the company—remains the same. I hope that the noble Lord will see the force of that argument and will not press his amendment.
Lord Denning: I should like to endorse all that the noble Lord the Minister has said except that instead of

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the word "TUPE"—I hate that word—it should be the Community law directive, which comes to the same thing. Whichever it is, the employee's position should be protected as far as possible by the regulations or the directive. We do not need this amendment.
Lord Graham of Edmonton: The noble Lord the Minister rests his case on the right of future management to manage. I have listed the matters upon which the current management has felt it proper to have agreements with the trade unions—pay, overtime, and travel to work. I do not believe that we are contemplating an enhancement of those terms when future management has the right to manage. The right to manage means, if not a licence to reduce, certainly the freedom to reduce. Without the guarantee that I am seeking to put into the Bill, the workers' conditions are worth nothing. I intend to press the amendment.
8.40 p.m.
On Question, Whether the said amendment (No. 16) shall be agreed to?
Their Lordships divided: Contents, 24; Not-Contents, 54.

DIVISION NO. 3

CONTENTS

Airedale, L.

McNair, L.

Barnett, L.

Mayhew, L.

Brockway, L.

Mulley, L.

Brooks of Tremorfa, L.

Nicol, B. [Teller.]

Carmichael of Kelvingrove, L.

Pitt of Hampstead, L.

Crawshaw of Aintree, L.

Prys-Davies, L.

Elwyn-Jones, L.

Seear, B.

Graham of Edmonton, L. [Teller.]

Stewart of Fulham, L.

Stoddart of Swindon, L.

Hatch of Lusby, L.

Strabolgi, L.

Jeger, B.

Underhill, L.

John-Mackie, L.

Ypres, E.

Kilmarnock, L.

NOT-CONTENTS

Ashbourne, L.

Hailsham of Saint Marylebone, L.

Belstead, L.

Brabazon of Tara, L.

Hooper, B.

Brookes, L.

Lawrence, L.

Brougham and Vaux, L.

Layton, L.

Butterworth, L.

Lindsey and Abingdon, E.

Caithness, E.

Long, V.

Cameron of Lochbroom, L.

Lucas of Chilworth, L.

Cathcart, E.

Lyell, L.

Craigavon, V.

Margadale, L.

Craigmyle, L.

Middleton, L.

Cullen of Ashbourne, L.

Morris, L.

Davidson, V.

Mottistone, L.

Denham, L. [Teller.]

Mountevans, L.

Denning, L.

Mountgarret, V.

Elliot of Harwood, B.

Napier and Ettrick, L.

Elliott of Morpeth, L.

Norrie, L.

Elton, L.

Orkney, E.

Faithfull, B.

Peyton of Yeovil, L.

Ferrers, E.

Rankeillour, L.

Gibson-Watt, L.

Renton, L.

Glenarthur, L.

Saltoun of Abernethy, Ly.

Greenway, L.

Sanderson of Bowden, L.

Grimston of Westbury, L.

Selkirk, E.

88

Skelmersdale, L.

Vaux of Harrowden, L.

Swinton, E. [Teller.]

Vickers, B.

Trefgarne, L.

Vinson, L.

Trumpington, B.

Resolved in the negative, and amendment disagreed to accordingly.
8.47 p.m.
Baroness Vickers Baroness Vickers moved Amendment No. 17:
Page 2, line 40, at end insert—
("( ) The power to make an order under subsection (1) above shall not be exercised by the Secretary of State in respect of any dockyard and any services until not less than five years have elapsed from the date on which, in respect of that dockyard and those services, he has concluded the experiment of forming a company under the Companies Acts and conferring on that company powers to operate such services at that dockyard.").
The noble Baroness said: This amendment is designed to delay the introduction of the agency management scheme until the dockyards have been run as plcs for a five-year period. I hope that this would be sufficient time for the Government to realise some of the potential gains of this scheme in terms of improved efficiency, commercial management and accounting practices, and most importantly the increased motivation of the workforce if they were to be offered a share in the new company.
Therefore, this amendment does not seek to change the Bill drastically. It aims purely to allow for the running of the dockyards under a proven commercial scheme before the Government look at their experimental agency management scheme.
The management of the dockyards as Companies Acts companies—plcs—is a proposal which I believe the Government should look at seriously in view of the weight of evidence in favour of it. The amount of support which this proposal attracted at Second Reading from such eminent and noble Lords as the noble and learned Lord, Lord Denning, and the noble and gallant Lord, Lord Hill-Norton, will, I hope, have demonstrated to the Government that the majority of people who have studied the effects of this Bill in detail have concluded that the plc option offers by far the best solution. I beg to move.
Lord Denning: I am sorry in a way that my name appears on the amendment, now that I have read it carefully. Look at the last words. The amendment contemplates the experiment of forming a company and conferring upon that company powers for five years. But that cannot be done until the Secretary of State has made an order. Therefore, the opening words providing that he shall not make an order unless certain conditions are satisfied do not apply in relation to the closing words. I am afraid that the experiment is already provided for in what we have heard. Let there be the licence by the company for the seven years. That is the experiment. I am afraid, therefore, that although my name is attached to the amendment I cannot support it.
Lord Trefgarne: I am afraid that I can only reiterate what the noble and learned Lord has said. This

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amendment suffers from a fatal flaw. In those circumstances I hope that my noble friend will withdraw it.
Baroness Vickers: I thought that perhaps the other two noble Lords whose names are attached to the amendment might have wished to say something. I now wish to withdraw the amendment. I regret to say that I feel very let down.
Amendment, by leave, withdrawn.
Lord Mayhew Lord Mayhew moved Amendment No. 18:
Page 2, line 41, leave out from beginning to ("the") in line 43 and insert—
("( ) No order shall be made under subsection (1) above unless a draft of the order has been laid before and approved by a resolution of both Houses of Parliament.
( )").
The noble Lord said: This Bill allows the Secretary of State to do anything he likes with the £700 million worth of public property. He can form an employment company, an operating company, or a single government-owned plc. It is obviously right that Parliament should have another look at the decision of the Government in this field before they act.
We have had a very encouraging series of comments by the Minister about his feelings for the future. We have had the undertakings that he will think very carefully again about having a single company. I believe he said that he will discuss this with the fount of all wisdom—the noble and learned Lord, Lord Denning.
However, as I understand it, according to the Bill, the Minister could have his discussion with the noble and learned Lord and decide on a quite different approach involving a single government-owned company. According to the Bill, he could go off and do it without even informing us—although he is too courteous to do that. But obviously Parliament should have another look at this before the Government act on it. We have therefore put down this amendment for the purpose of saying that no order under the subsection shall have effect until approved by resolution of each House. This seems to me absolutely necessary, normal, and acceptable in the circumstances. I hope that the noble Lord will look favourably at it. I beg to move.
Lord Denning: My name is attached to the next amendment which is on the same lines. This is an important amendment because noble Lords can see what will happen. The Government have to decide which option they will take. In particular, I hope that they will decide on the one-company option, taking a licence for seven years, with the workforce affected accordingly.
There is an important question still to be resolved by the Government: is it to be a government-owned company or an outside, perhaps a very strong, commercial company? The effect on the workforce will be great. One wants a company which will carry the workforce with it. Therefore, before Parliament
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gives its assent to the option which is exercised, or to the company which will carry out the contract—in other words, before the whole procedure is set in motion—surely Parliament itself, not the Secretary of State, should decide the issue.
I would suggest that it can be reported to Parliament. For instance, the Secretary of State could make a draft order always provided that Parliament has been previously informed of the nature of the project, which would transfer the workforce to the new company. The workforce and Parliament ought to know whether it is to be a government-owned company or whether it is not to be government owned but an outside company. The workforce which is being transferred ought to know, and in those circumstances the information ought to be given to the House before the order is made. I would therefore support both Amendments Nos. 18 and 19.
Lord Graham of Edmonton: I hope that the Minister will accept the sense of what we are trying to say. The methods of procedure followed in this Chamber primarily involve majorities and not necessarily force of argument, and if the Government have got this right and have the parliamentary approval that they need, what we say to the Minister is, "Before you proceed, tell us what you have done with the authority that we have given you". The noble and learned Lord, Lord Denning—as he very often does—perceptively drew attention to one or two areas about which we need to be satisfied. The Secretary of State will then be able to persuade us in presenting the orders that he has faithfully kept to the provisions of the Bill, the undertakings, the contract and so on.
We are saying: treat those who serve in Parliament as parliamentarians with a part to play. We are not simply here to vote something through, but also to approve that which has been done. The Minister may very well say that if every Bill has to come back, every time there is a trigger mechanism, to get approval, it will take a long time. If it takes a long time, it is a question of business management. We are not talking about a tuppeny-ha'penny undertaking. We are talking about the Royal dockyards, thousands of people's employment, and the safety of the nation. We are saying to the Minister, "Come back and let both Houses see what you have done. If what you have done is in accordance with the remit that you have sought, we should imagine that you would get approval".
9 p.m.
Lord Trefgarne: With the Committee's permission I shall speak to Amendments Nos. 18 and 19. These amendments seek to provide that any order made under Clause 1(1) of the Bill should be subject to an affirmative resolution of both Houses of Parliament. It may be helpful to the Committee if I set out what we intend that such an order will contain and why therefore I believe that these two amendments are unnecessary.
We intend that orders—one in respect of each dockyard—will, subject to the Bill receiving Royal

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Assent, be laid before Parliament in the autumn. These orders will first designate the dockyards to which the arrangements for which this Bill provides will apply; that is, the Royal dockyards at Devonport and Rosyth.
The orders will also designate the services,
"for or in connection with ships or vessels or related establishments in the service of the Crown",
provided at the dockyards. These are the services which we intend will be provided by a company under contract with the Secretary of State. There is no particular mystery about what these services will be. If I may, I shall remind the Committee of a Written Answer given in another place by my right honourable friend the Under-Secretary of State for Defence Procurement on 20th December which set out the main categories of services provided by the dockyards.
My honourable friend listed five main categories as follows: the refit, repair, maintenance and modernisation of Royal Navy vessels; the overhaul and testing of naval equipments including those to be returned to the Director General of Stores and Transport (Navy) for stock and subsequent issue to the Royal Navy; the installation and maintenance of machinery and equipment in naval establishments; the provision of utility services to Royal Navy vessels alongside in the naval base and to adjacent naval shore establishments; and manufacture of some items of ships' equipment. It is our intention that the orders will designate the dockyard services in terms similar to those.
The designation of dockyard services in this way will, by implication, also provide a definition of the "qualified dockyard service employees" to which Clause 1(1) also refers. They are those employed in, or in connection with, the provision by the Crown of designated dockyard services at the dockyard on a particular day, which would be the vesting day, in April 1987.
At this point may I, in parenthesis, correct something which I said to my noble friend Lord Selkirk a few moments ago when he asked about the position of the members of the Royal Corps of Naval Constructors? As I said in answer to my noble friend, generally speaking the members of the corps are not affected by the provisions of this Bill, but it happens that there are a small number of them working in the dockyards, and they will be treated in the same way as other dockyard employees when and if the Bill receives its Royal Assent.
Therefore the message is a very simple one. Although the orders which will be made will be a formal step in the implementation of the policy set out in the Bill, they will contain very little information of which the Committee is not already aware. Therefore it would simply not make sense to provide in the Bill that the orders must be subject to an affirmative resolution of both Houses. These amendments are therefore unnecessary, given the procedures which already exist for noble Lords to consider such orders, and I hope that they will not be pressed.
Lord Mayhew: I think that this is probably a matter to which we can return on Report when we know what the Government's position is. A number of these amendments which we are now discussing have, I think, a slightly hypothetical and academic feel about them. If the noble Lord, Lord Graham, is of the same mind, my feeling would be that we might come back to this on Report.
The Earl of Selkirk: Perhaps I may ask my noble friend one question. In the list of duties of a dockyard he did not mention the construction of ships. In future, is it the intention that dockyards should never construct ships? I am not objecting to it; I am only asking for information.
Lord Trefgarne: I am certainly not aware of any circumstances in which it would be thought appropriate to construct ships in the dockyards. After all, we have a considerable range of naval shipbuilding enterprises, which are more than able and willing to fulfil our requirements in this area. Therefore, without taking further advice, I think the answer is that we have no intention that such a thing should happen.
The Earl of Selkirk: I must express the view that until quite recently ships have been constructed in dockyards.
Lord Mayhew: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Earl Cathcart)The Deputy Chairman of Committees (Earl Cathcart): I understand that Amendment No. 19 is not moved.
Baroness Vickers: No; I am moving it.
Baroness Vickers Baroness Vickers had given notice of her intention to move Amendment No. 19:
Page 2, line 41, leave out from beginning to ("House") in line 43 and insert—
("( ) No order under this section shall have effect until approved by a resolution of each").
The noble Baroness said: I hope that I do not get into such trouble as I did over the previous amendment. This amendment seeks to take away from the Secretary of State the choice as to which option the Government decide upon within this Bill.
Lord Trefgarne: I hope that my noble friend will not mind being interrupted, but I said just now that I was replying to both amendments and I had understood it to have been agreed that both Amendments Nos. 18 and 19 would be taken together.
Lord Denning: Yes: I am afraid that I too understood that.
[Amendment No. 19 not moved.]
Lord Denning Lord Denning moved Amendment No. 20:
Page 3, line 3, at end insert—
("( ) Before making an order under this section the Secretary of State shall consult those persons or bodies appearing to him to be representative of those having an interest in the provision of dockyard services.").
The noble and learned Lord said: I just want to say a few words on this amendment. Up to this stage there has been good consultation between the Government, the trade unions and all those concerned. There was an excellent document issued by the Government on consulting them.
On the other hand, one would suggest that before the actual order is made it would be desirable particularly to consult the workforce as to the proposals to make an order, telling the workforce in particular the nature of the company to which they would be compulsorily transferred, the nature of the shareholding which they would have, and so forth, and consulting them about it so as to get their cooperation. It may be that the Secretary of State would do all that without provision in the statute. However, I should be glad if we could be given some assurance that there would be consultations on all material points right up to the time when an order is made. I beg to move.
Lord Glenarthur: As the noble and learned Lord has described, this amendment seeks to require the Secretary of State to consult persons or bodies before making an order under the Bill. No one could argue with the proposition that those involved should be consulted before a change of this significance is introduced—particularly those who work in the organisations affected.
However, as the noble and learned Lord has indicated, this is precisely what has happened since the proposals were announced to change the way in which the Royal Dockyards are managed. Perhaps I may describe in a little detail the consultation which has taken place.
When my right honourable friend the then Secretary of State first announced his intention to introduce new management methods into the dockyards in April last year, a consultative document was issued to the trade unions and to every employee at the dockyards. Also, an open government document was published, available to all. These documents described the three options which the Government were considering—full privatisation, commercial management, the favoured option, and the setting up of a trading fund—and made it clear that the Government invited comments from all those who wished to make their views known.
Three months were set aside for comments to be sent to the Ministry of Defence, and it was only after this period had elapsed that, in the light of the
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comments received, a final decision was made to proceed with commercial management; that decision was announced in July 1985.
Since that time considerable emphasis has been laid on the need to consult the trade unions in the Ministry of Defence. A number of working groups were constituted to examine specific aspects of commercial management, and when they had reported a comprehensive consultative document was issued on their findings and recommendations. In addition to this, a number of consultative documents have been published on individual issues, including, for example, pensions and staff records; and others are in course of preparation.
We have also consistently offered consultative meetings with the unions. The non-industrial trade unions have talked with MoD management on occasion, but it is a matter of regret to the Government that the industrial unions have repeatedly declined to sit round the table. But even so there has been discussion other than at the central Ministry of Defence level. Management and unions have met at the local Whitley committees in the dockyards at Rosyth and Devonport, and at the Ministry of Defence and Civil Service functional committees in Bath. We have also made sure that information has been given to the workforce. Regular articles have appeared in the dockyard newspapers, and a bulletin is published, available to all dockyard employees, specifically devoted to reporting developments in the move towards commercial management.
I have devoted some time to the detail of the consultative procedures we have followed, and to their substance. But I hope that this has served to illustrate the attention which has been devoted to what I agree is an important aspect of the introduction of commercial management into the dockyards.
The amendment asks us to institute the very practice that we have sought diligently to undertake since the proposals were first set out, and it asks the Secretary of State to consult representatives of (I quote from the amendment),
"those having an interest in the provision of dockyard services."
Who are those who have such an interest? Not, I think, just the unions. But who else is included in the group of those who have an interest in the dockyard services—contractors, the shipbuilding industry, our NATO allies? No. In our open government document, we have sought a broad spectrum of comments, and have taken a considered view on the way ahead for this vital element of the support of the defence effort. That way ahead is management outside the Civil Service.
The Government have sought to consult interested parties throughout this period of transition and will continue to ensure that the workforce is kept informed of progress and that its representatives, the unions, are properly consulted. However, to place on the statute book a specific duty to consult the unions is, as I have described, unnecessary. To extend that duty to an essentially undefined group of interests, which is what would be achieved by this amendment, is, I suggest to

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the noble and learned Lord, undesirable, and I hope that he will see fit to withdraw his amendment.
Lord Denning: I am very grateful for what the noble Lord the Minister has said. I readily acknowledge that there has been full and good consultation up to this point. I am equally glad of the assurance that this will continue. Good consultation on all material matters which are developing should continue right up to the moment when the order is made, so far as is necessary. So while I withdraw the amendment, I am glad of the assurance which the noble Lord the Minister has given.
Amendment, by leave, withdrawn.
[Amendment No. 21 not moved.]
Clause 1, as amended, agreed to.
Lord Barnett Lord Barnett moved Amendment No. 22:
After Clause 1, insert the following new clause:
("Inspection of accounts by Comptroller and Auditor General.
.—(1) Subject to subsection (2) below the accounts of a dockyard contractor shall be open to the inspection of the Comptroller and Auditor General.
(2) Subsection (1) above applies in respect of the accounts of a dockyard contractor only so far as those accounts relate to—

(a) the provision of designated dockyard services at a designated dockyard under contract with the Secretary of State; or

(b) the employment of the qualified dockyard service employees under section 1 above so as to enable those services to be provided, whether by a company or by the Secretary of State.").

The noble Lord said: I beg to move Amendment No. 22, standing in my name. I am grateful to the noble Baroness, Lady Vickers, and the noble Lord, Lord Mayhew, for adding their names to the amendment.
I should make it clear that, while I speak from the Opposition Dispatch Box, I do so to an amendment which is entirely non-party political, and stems from a recommendation—I do not know why the noble Lord the Minister said "Tsch", or whatever it was he said—from the all-party Public Accounts Committee, on which I had the honour and privilege to serve as chairman for four years. As the Public Accounts Committee has made clear, it is concerned with value for money with which not only the Public Accounts Committee and I myself, but I hope also your Lordship's Committee and indeed the Government, are equally concerned. The fact is that, like the Public Accounts Committee, I make no comment about the government proposals in the Bill as such but refer to the proposed arrangements for the commercial management as set out in the Bill: that is to say that, under present arrangements, while the assets of the Royal dockyard should remain in public ownership, they should be managed by private companies contracting to employ the staff and provide dockyard services.
Under present arrangements, the Comptroller and Auditor General has full access to all the books of account and the costing records of the Royal dockyard. In future, under the terms of the Bill, he will
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have access, first to the MoD records of contract negotiations and performance; secondly, to MoD records relating to publicly owned assets maintained by the contractors; and thirdly, to the contractors' records relevant to the custody and protection of those assets.
The existing access of the Comptroller and Auditor General and his proposed access flow from his responsibility to audit the appropriation accounts, which, in turn, through Section 6(3)(a) of the National Audit Act, 1983, gives him power to conduct valuefor-money audit under Section 6(1) of the 1983 Act. Access in future will be by agreement with the contractor according to a standard form relating to access to records of publicly owned assets. Under the proposed arrangements the Comptroller and Auditor General would not have access to the commercial managers' books of accounts and costing records. Therefore, he would be unable to provide direct assurance to Parliament on the management and use of resources in the yards, the actual costs of individual refits or the reasons for any cost increases or delays. He would not be able to present to Parliament the type of report he made in 1984 under House of Commons Paper 277 of the 1983–84 on the Control of Dockyard Operations and Manpower which led to the present interest of the Public Accounts Committee in dockyard matters, including the results of the National Audit Office examination of use of labour in the dockyards, control of overtime, productivity, deficiencies in management, control of work, and management information.
Accordingly, my objective in the amendment is to secure power for the Comptroller and Auditor General to inspect the accounts and costing records of any company to which Clause 1 of the Bill applies so that he may be able to report to Parliament on the economy, efficiency and effectiveness with which such a company has used public resources, both capital and current, in the provision of dockyard services, and current resources would include payments made by the Ministry of Defence for work done.
As I understand it, the Ministry of Defence case is that the Comptroller and Auditor General would have access to all the Ministry of Defence records and the contractors' records relevant to the custody and protection of publicly-owned assets. The Ministry of Defence believe—and I am assuming that this is the Government case—that the Comptroller and Auditor General will therefore be able to give Parliament a full assurance. But the all-party Public Accounts Committee take a different view, and it is worth reporting to the Committee just what this all-party committee said. I refer to the 21st Report of Session 1985–86 issued on 21st April, 1986, paragraphs 24, 25 and 26:
"The Committee, however, look very unfavourably upon access to records at one remove which will make them much more dependent on the Ministry of Defence rather than the original sources of information. We therefore asked the Comptroller and Auditor General what he could do under the current arrangements to provide direct assurance to Parliament on Dockyard operations that he will not be able to do under the commercial management arrangements. He told us that the extent of his assurance would depend very much on the effectiveness of the Ministry of Defence's

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own monitoring and the extent to which they achieve true competition in fixing prices."
In other words, as I said,
"He would no longer have full access to the books of accounts and costing records of the yards and would therefore not be able to give any direct assurance on the management and use of resources, the actual cost of refits and the reasons for delays or increases in costs."
That is the Public Accounts Committee's view. They go on to say:
"While noting the Ministry of Defence's views based on the analogy of the existing arrangements for access to defence contractors' records, we regard the change to commercial management in the dockyards as creating a new situation which falls far short of privatisation. MoD will retain ownership of the assets and there will be only a limited amount of true competition. We are also not convinced by the Ministry of Defence argument that the Comptroller and Auditor General's access would deter potential contractors from taking further interest in the business because of the prospect of Parliament becoming much more closely involved in the day-to-day details of their operations than is the case now."
They go on to say:
"In this respect, we consider it relevant that in the United States the General Accounting Office, the United States equivalent of the National Audit Office, has for many years had access to defence contractors' records relating to contracts placed without competition. We are not aware that there is any shortage of contractors willing to accept United States Government contracts."
It is hardly surprising, as we know.
We come finally to paragraph 26 of the report, where the Public Accounts Committee say:
"We therefore remain convinced that it is essential for the Comptroller and Auditor General to have access to the contractors' accounts and costing records to provide Parliament with an independent assessment of the success or otherwise of commercial management in securing value for money. We think this could be best achieved by allowing the C and AG access to contractors' books of accounts and costing records so that he can report to Parliament on the economy, efficiency and effectiveness with which public resources, both capital and current, have been used in the provision of Dockyard services. Accordingly, we recommend that the Dockyard Services Bill currently before Parliament should be suitably amended to make provision for the C and AG to inspect the relevant accounts and costing records of any company to which Clause 1 of the Bill applies."
As I understand it, the Bill was brought through rather quickly in the House of Commons and members of the Public Accounts Committee and the chairman did not have an opportunity of moving the amendment I now move this evening. Whether or not that be true, the fact is that what I move tonight has the unanimous support of the all-party Public Accounts Committee. It is clear that the Public Accounts Committee take a very different view from that of the Government. I hope that the Government will not stick to the somewhat rigid and inflexible view that they have taken in the past.
As I said at the outset, this is not a party political matter. I hope that the Committee and the Government will agree with the Public Accounts Committee and that the case of the Public Accounts Committee for this amendment applies whatever the Government do about the company and who controls the company. We are not talking about that kind of matter. We are talking about how Parliament should have proper access through the Comptroller and Auditor General as to whether we, on behalf of the public, are getting full value for money in this particular regard. I hope that the Committee and the Government will accept the amendment. I beg to move.
Lord Trefgarne: The principal aim of this Bill is to introduce commercial practice into the royal dockyards. While your Lordships may have different ideas on how such changes should be made, the common thread which has run through the debates here, in another place and during the consultation phase has been that the dockyards must adopt a more commercial approach. Under our proposals, the management of the dockyards would be procured from the private sector under contract with my right honourable friend, and it would be appropriate in these circumstances for the accounting and auditing arrangements to follow as far as possible those for any other item or service purchased by the Ministry of Defence.
We wish to treat the commercial managers of the dockyards as any other defence contractor. The amendment proposed by the noble Lord, Lord Barnett, would allow the Comptroller and Auditor General—the C and AG, as he is usually known—access to the books and records of the commercial companies managing the dockyards, and any information which he obtained as a result presumably would be used as the basis of a report to Parliament.
This would be an entirely new departure in terms of the relationship between the Government and their contractors, and is one to which the Government are firmly opposed. The C and AG does not normally have access to the books and records of Government contractors but relies on the information he is able to obtain from his examination of the books and records of the relevant Government department. In the view of the Government, access by the C and AG to the books and records of contractors would have a deterrent effect on those contractors, who would face the possiblity of Parliament inquiring into matters which the company would regard as entirely its own commercial concern. Such an arrangement would be wholly inconsistent with the introduction of commercial practices.
The Government recognise the concern expressed by the Public Accounts Committee in their 21st Report, but we do not agree that effective accountability to Parliament requires access by the C and AG to the books of the commercial managers of the dockyards. The Ministry of Defence will need for its own planning and monitoring purposes to obtain information about the commercial managers' performance. For example, my department's files will contain details of contracts left with the dockyards, including full information on pricing for all noncompetitive work.
Our files will also contain full information about Ministry of Defence assets used by the dockyards and information obtained from the commercial managers about their stores accounts. The C and AG will have full access to all this information through his inspection of the Ministry of Defence files, which will contain as much, if no more, information about the dockyards as about any other defence contractor. He will be able to examine everything for which the Ministry of Defence will be accountable, including the effectiveness of the Ministry's own monitoring

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arrangements. But this does not extend to examination of the contractors' pursuit of their own and their shareholders' interests in their contract with the Ministry of Defence. Nor should it.
In conclusion, I must emphasise that the whole point of this Bill is to change the nature of dockyard management. As part of the change, arrangements for the Comptroller and Auditor General's access will change from those which are appropriate for Ministry of Defence management to those which are appropriate for private sector management in a contractual relationship with the MoD. This does not mean secondhand, second-class access: it simply means the same access as in the case of any other defence contractor. The CAG will continue to have access to my department's files and these will contain detailed information about the use of Ministry of Defence assets and the pricing of non-competitive contracts in which the Public Accounts Committee has expressed particular interest. In the light of those considerations I hope that the noble Lord will not wish to press his amendment.
Lord Mayhew: The noble Lord has assumed, as did the noble Lord, Lord Barnett, that the Government were going to proceed in the manner in which they have so far intended to proceed; namely, by offering contracts to a commercial manager to manage the dockyards. I am not sure that I was wholly with the noble Lord, Lord Barnett, when he said that the complaints which he very justly advanced in respect of the arrangements for public supervision of a management company would not need to be different for, in the case of a single company, a single government-owned company. I think in fact they would be different. Nevertheless, the argument so far has been on the basis of the need for CAG supervision of a management agency with a contract with the MoD.
Here I was not persuaded by the Minister. I do not think it is right to say that the arrangements should be the same as for any other defence contractor because we are in a quite different situation with huge amounts of public property being used—£700 million worth of assets. It is not just the same as public accountability for any other defence contractor. The Minister is at odds here with both the Comptroller and Auditor General and the Public Accounts Committee. I do not need to quote all of it, but the CAG complains as follows:
"I would have access only to the details of performance on individual contracts and to records of publicly-owned assets which DGSR will maintain. I should not, however, have access to the contractor's books of account and costing records, as suggested by the Committee".
I do not see why the Minister should not accede to the very reasonable requests of the Public Accounts Committee, the Comptroller and Auditor General and of all three Opposition parties in the Committee. It seems to be a reasonable request and I think he should accept the amendment.
Lord Mulley: I, too, was surprised by the Minister's response. I should have thought that in any event the
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situation will be changed if, as we hope and believe, we are going to have one company instead of two. But apart from that consideration—if I may have the Minister's attention—I should like to put to him the proposition that the defence of the realm, the support for the Royal Navy, is a rather more important matter than following the normal commercial accountancy practices of the private sector, not least because this is a unique case where the Government are providing and financing all the assets by means of which the services are to be provided. Certainly, if there is going to be one company, maybe the whole situation in any case will be changed, and if the Government have a holding in it, the Comptroller and Auditor General will have access to the company records where the Government hold a majority shareholding, as we understand may be the case when the Minister brings forward his new amendments.
I would ask in any event, even if he can go no further tonight, that at least before taking on board a total opposition to the all-party Public Accounts Committee, the Comptroller and Auditor General and, I suspect, a large body of opinion in this Committee, the noble Lord the Minister will give an undertaking that he will consider the whole of this question again.
Lord Barnett: I must say, to put it mildly, that I was somewhat disappointed at the Minister's reply, I thought I had already quoted extensively, in advance, what he was going to say. I had not seen his brief. It is rather a pity that he then proceeded to read it out after I quoted what I expected him to say, and then quoted the Public Accounts Committee response at the time. The Minister talked about introducing commercial practice and said that it would therefore be wrong to accept this amendment. But I made it absolutely crystal clear that neither I, nor, I imagine, the noble Lord and the noble Baroness who supported my amendment, in any way wanted to do anything about the principle of the Government's Bill in relation to commercial practice.
We were not talking about that. We were talking about the whole question of whether on an important matter like this, where a major and substantial all-party Committee in another place has recommended unanimously that there should be access by the Comptroller and Auditor General, in the interests of value for money, effectiveness and economy in this important field, that should be acceptable to the Government.
The Minister said here this evening that the C and AG would not normally have access, but, with the greatest possible respect to the Minister, this is not a normal situation. Whether or not you have a single company with majority interests or minority interests, the principle involved here is that Parliament, through the Comptroller and Auditor General and the Public Accounts Committee, should be able to obtain satisfactory assurances as to whether there is value for money, economy and efficiency in this vital area. That is all that is being asked. It has nothing to do with whether or not the commercial practice should apply as the Bill wants it to do.
Indeed, I quoted from the Public Accounts Committee's report that stated that in the United

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States, the General Accounting Office—and there is no better example of a country where they are concerned with best commercial practice—the equivalent of the Comptroller and Auditor General has for many years had access to the records of contracts placed without competition, and in no way did that affect contractors applying for contracts. In no way did it inhibit anybody in the private sector from applying to obtain contracts in the best commercial practice.
So I am very surprised that the Minister read his brief without throwing it out himself. But, as he was not prepared to throw it out, whatever the situation in relation to a company—whether the Government in due course have a majority or a minority interest—if the Committee accepts the principle of this amendment, as I hope it will, then, whatever happens hereafter, the Government will be compelled to accept the important recommendations of the Public Accounts Committee, and there will be proper access for the Comptroller and Auditor General so that Parliament can properly assess with confidence and give a proper assurance. Therefore, in no way would I wish to withdraw this amendment.
9.33 p.m.
On Question, Whether the said amendment (No. 22) shall be agreed to?
Their Lordships divided: Contents, 18; Not-Contents, 37.

DIVISION NO. 4

CONTENTS

Airedale, L.

McNair, L.

Barnett, L.

Mayhew, L.

Brockway, L.

Mulley, L.

Crawshaw of Aintree, L.

Pitt of Hampstead, L.

Dean of Beswick, L. [Teller.]

Prys-Davies, L.

Denning, L.

Stoddart of Swindon, L. [Teller.]

Elwyn-Jones, L.

Graham of Edmonton, L.

White, B.

Greenway, L.

Ypres, E.

Houghton of Sowerby, L.

NOT-CONTENTS

Belstead, L.

Hooper, B.

Brabazon of Tara, L.

Layton, L.

Brougham and Vaux, L.

Lindsey and Abingdon, E.

Butterworth, L.

Long, V.

Caithness, E.

Lucas of Chilworth, L.

Cameron of Lochbroom, L.

Lyell, L.

Cathcart, E.

Margadale, L.

Craigavon, V.

Morris, L.

Craigmyle, L.

Mountgarret, V.

Cullen of Ashbourne, L.

Peyton of Yeovil, L.

Davidson, V.

Renton, L.

Denham, L. [Teller.]

Saltoun of Abernethy, Ly.

Elliot of Harwood, B.

Selkirk, E.

Elliott of Morpeth, L.

Skelmersdale, L.

Elton, L.

Swinton, E. [Teller.]

Ferrers, E.

Trefgarne, L.

Gibson-Watt, L.

Trumpington, B.

Glenarthur, L.

Vaux of Harrowden, L.

Grimston of Westbury, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.41 p.m.
Lord Denning Lord Denning moved Amendment No. 23:
After Clause 1, insert the following new clause:
("Annual balance sheet etc.
.—(1) Every company which in any financial year provides any of the designated dockyard services shall prepare the documents mentioned in subsection (2) below not later than 30th September in the financial year following that year.
(2) The documents are—

(a) a balance sheet;

(b) a revenue account;

(c) a statement of rate of return.

(3) The balance sheet must show a true and fair view of the state of affairs of the company at the end of the financial year to which it relates, in respect of designated dockyard services provided by them in that year.
(4) A revenue account must show a true and fair view of the financial result of the company having undertaken, in the financial year to which it relates, each description of designated dockyard services to which it relates.
(5) A statement of rate of return must give such information as is necessary to show whether, in respect of the financial year to which it relates, the company have complied with section (Rate of return) below.").
The noble and learned Lord said: Perhaps I may speak also to Amendments Nos. 24 and 25. The object of all the amendments is to secure annual returns and that the contractors do not make too much money out of the Government during the experimental period.
I will give the Committee an illustration. Seventy per cent. of the work that is to be done in the dockyard is what is called the core programme, which the navy is bound to give to the dockyard, whatever may be the price, for the repair and refitting of ships. So although they may pass accounts as between customer and supplier, there is no competition. The navy must have 70 per cent. of the work done at the price stipulated by the contractor. There is then the other 30 per cent. of the work, which may be competed for outside.
Just think of the temptation on those contractors when they are making out their returns. They have to pay £23 million a year in licence fees. They may say, "It is easy to get that back, by charging the navy for the core contract. We will get all that licence fee repaid by the navy or the Ministry out of the core contract. We will then make our profit by undercutting the others on the 30 per cent. of the work for which they can tender".
I suggest that in order to secure that the navy or the Ministry does not pay too much during the experimental period, it would be an excellent arrangement to have annual returns showing the balance sheet and the rate of return, which will reveal to the Ministry exactly what is happening and ensure the the navy is not paying too much for its core programme. That is my submission: during an experimental period, why not have annual returns? I beg to move.
Baroness Vickers: I support the noble and learned Lord with regard to these amendments. They are intended to enforce open book accounting procedures on the agency management company. It is common practice for nationalised industries and direct labour organisations to produce an annual balance sheet, a revenue account, and a statement of a rate of return. It is essential that that rate of return should be positive when compared with the capital employed for carrying
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out the work at the dockyards. It is only by allowing public scrutiny of the agency manager's accounts that Parliament will be able to judge the success of the experimental scheme.
Lord Trefgarne: These three clauses are somewhat lengthy and detailed. I am not sure whether their wording owes its existence to some other Bill or whether it has been tailor-made for this particular one. Whatever it may be, I believe they are largely unnecessary. Whatever type of company is set up by my right honourable friend the Secretary of State, it would be under the authority of Clause 1(3) of this Bill; and as the Committee will see, the word "company" in this context is defined in Clause 1(8) as,
"a company formed under the Companies Acts".
The Companies Acts require all companies to provide financial information of the kind covered in the first of these three new clauses, though not in the specific form in which the first (or the third) new clause suggests. If the Companies Acts are proper for all other Companies Acts companies (many of which are engaged in defence work just as vital for our security as the dockyards) they should similarly be good for the companies managing the dockyards. That is, I believe, a fundamental objection to the greater part of these new clauses.
It goes without saying that my department will be negotiating contracts for individual ship refits or repair work which are as advantageous to the taxpayer as possible. For much of the non-competitive work my department will, as I said earlier in connection with another amendment, have access to the accounts of the contractor, and profit margins and rates of return will be known. And what is known to my department will be known to Parliament—either by virtue of the Comptroller and Auditor General or through the medium of an annual report which will be produced by my department on the previous year's dealings with the various ship refit and repair companies. For noncompetitive contracts, there are agreed profit formulae.
My other concern relates to the second of this group of new clauses, which provides that companies providing designated dockyard services shall secure from those services whatever positive rate of return is set by the Secretary of State. Again, I have to return to the question of a commercial approach. It would be most unusual for the Secretary of State to prescribe a rate of return on what would be a private company's operations. While it may well be reasonable in certain circumstances for the rate of return of a company to be based, as it were, on capital employed, that would not be particularly appropriate for the dockyards, where the Government will retain ownership of the assets with the contractor using them under licence.
Finally on this group of new clauses I should say that even if for any reason the Government decided to adopt their fall-back option of a Government-owned plc at each or either dockyard, these new clauses would still not be relevant because we would still replicate a commercial contractor as closely as possible. Any controls and targets set for the Government-owned plc would be drawn up in the form of a memorandum of

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understanding between the Secretary of State and the chairman of the Government-owned plc.
These are complicated issues. I have tried to set out what I see as fundamental objections to the provisions of these new clauses. I hope that in the light of what I have said the noble and learned Lord, Lord Denning, my noble friend Lady Vickers and other noble Lords will agree that these new clauses should not be pressed.
Lord Denning: I thank the Minister for his explanation. In the circumstances, I will not press the amendment any further.
The Earl of Selkirk: May I ask one question? My noble friend the Minister used two phrases. He referred to "private company" and to "public limited company". The returns from these two types of company are very different indeed. The publicity for the accounts of a public limited company is much wider than for a private company. Does my noble friend intend that it should be a public limited company or a private company?
Lord Trefgarne: If we are speaking about the contractor it depends on which contractor is sucessful in the competition and is awarded the contract. I would expect it to be a plc, a public limited company, but I could not rule out the possibility that it might not be.
Lord Denning: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 24 and 25 not moved.]
Clause 2 [Provisions as regards premises used for transferred services]:
[Amendment No. 26 not moved.]
Clause 2 agreed to.
9.45 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 27:
After Clause 2, insert the following new clause:
("Pension Rights
. Where in pursuance of the arrangements made under section 1(2) above a qualified dockyard service employee ceases to be employed in the civil service of the Crown and becomes employed by a company, all pension arrangements made by such a company shall be equivalent in all respects to such pension arrangements as applied in the civil service of the Crown and shall be applicable to all dockyard company employees.")
The noble Lord said: The Committee will be aware of the anxieties which are in the minds of employees in the dockyards and which we have sought to put before the Committee. None of these can be better illustrated than in the question of pension rights. The purpose of this amendment is to ensure that dockyard employees who are compulsorily transferred from the Civil Service to the new dockyard companies will have pension benefits which are no less favourable than those that are provided under the principal Civil Service pension scheme. We want to see this matter enshrined in the Bill itself.
Some two years ago we had the experience of the ROF Bill, when the Minister and I had long tussles. Far from satisfactory situations have arisen. For instance, when these matters were debated in relation to the Royal Ordnance factories, somewhat substantially along these lines, we were told that the employees would be offered the same benefits as in the Civil Service and that they would not suffer any detriment. I now understand that the Government admit that they will suffer some detriment. I am told that an ex gratia payment of £100 per man has been mentioned. I appreciate that the Minister may need some advice on this point which has now emerged. I simply ask him and his advisers to take on board the experience of the trade unions which look after civil servants in the dockyards. They are the same trade unions as those which look after their members in the Royal Ordnance factories, and they will have some very unhappy memories and experiences to guide them when they come to this situation.
The Minister needs to say a great deal more about how TUPE 1981 will be applicable here, because I understand that it does not apply to pensions. We already have our queries about the exact weight and worth of TUPE 1981, but I shall not raise that matter at the moment. However, if in fact TUPE 1981 does not apply to pensions and that is the position, I think we are entitled to some answers from the Minister. The Minister said that there will be a separate new entrants scheme in the dockyard companies. The intention is to set up an inferior pension scheme for new recruits. The trade unions which will be representing all dockyard employees after privatisation strongly oppose the notion of two pension schemes for staff who will largely have the same terms and conditions of employment and who will be working alongside each other and doing the same work.
We also think that it is of crucial importance to ensure that the pensions of those who will retire after privatisation are protected. The means of doing so is through application of the index linking provisions of the 1971 Pensions (Increase) Act. The 1971 Act, which was introduced with all-party support, applies to a wide range of public sector employees: police, the armed forces, teachers, nurses, judges and, indeed, Members of Parliament. We do not want two standards. Certainly we do not want to deny the same benefits to employees of the Crown—which is what dockyard workers are—or to give them benefits inferior to those that are enjoyed by Members of Parliament, for instance.
I very much hope that the Minister will be able to accept the amendment, or at least be able to satisfy those outside the Chamber that there is a parity guarantee for the new pension rights. Otherwise the people affected will lose out, and we do not want anyone to feel that he has lost out.
We are talking about hard-working and comparatively low-paid people, for whom I think a pension figures large. We are all concerned about our pension entitlement, but the pension rights of people at that level of income and standard of living are more important than they may be to others. If the Minister is concerned that the changeover, however and whenever it comes, is in the best spirit, he needs to

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apply himself to the worries that the workers have about protecting their pension rights. I beg to move.
Lord Crawshaw of Aintree: I have here Annexe 6/3 which deals with pensions and there are one or two questions that I should like the Minister to answer when he replies. Two schemes are to be set up. I take it that one is to deal with the civil servants who are transferring, and that will be funded. I also take it that people who come into the employment subsequently will be funded by themselves and by the company. But I am a little confused by paragraph 13:
"Terms of Scheme for New Entrants".
I rather thought that they would be completely different—different scales and all the rest—but the provision reads:
"The terms of the New Entrant scheme shall be consistent as far as possible with those of other employees of the Contractor".
If that is so, I cannot quite understand why we have two schemes. Are we setting up two schemes, one inferior to the other, as my noble friend indicated? That provision seems to suggest that anybody coming into the scheme the day after vesting day will have the same terms as the other employees of the contractor. At that stage the other employees would be funded for what they had already paid into the pension fund and that would be transferred into the new fund. That is the first question.
My second question is also about index linking. I also want to know whether index linking will apply to those who retire after the transfer. My other question is this. What is the situation if there is a default by the employer on funding the pension scheme? That can happen, but we are dealing with people who are being severed from their employment and in ordinary circumstances they would have been paid redundancy or something else. But they are not getting that. It is therefore most important to ensure that if an employer defaults, that money is made up. If it is not, it will be an injustice to the people who had served previously and were being transferred to the new company. I cannot keep going any longer; I think that the answers are arriving.
Lord Glenarthur: The proposed new clause seeks to link the pension arrangements for the new companies permanently to the Principal Civil Service Pension Scheme. Let me make the position on pensions quite clear. Employees who transfer into the new companies will on vesting day no longer be civil servants and so will have to leave the Principal Civil Service Pension Scheme, which I think that the noble Lord, Lord Crawshaw, understands.
As was the case in the privatisation of the ROFs, the Government have undertaken to set up pension schemes for employees transferring from the dockyards which replicate as closely as possible the provisions of the Principal Civil Service Pension Scheme. That means that the schemes—and there will be one for each dockyard—will have the same retirement age, benefit calculation and index linking as the PCSPS.
As is common practice in the private sector, the funds will be managed by boards of trustees with
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representatives from the company and the employees and also a government nominee. The board of trustees will have the responsibility for managing the fund and will make desisions about investment policy, benefits and the rules of the scheme.
The new clause seeks to cut across the duties of the trustees by placing upon them a statutory requirement to keep the benefits of the schemes at a certain level. That is not compatible with a private sector pension scheme nor with the Government's intention to allow the dockyard companies to function as independent commercial organisations. No one should think that we do not recognise the need to make provision for the pension arrangements of the dockyard workforce. We intend to see that the pension schemes are set up with funding arrangements that are sufficient to meet their liabilities, but we do not propose, as we did not with the Royal Ordnance plc, to guarantee or underwrite their funds. We intend that they should be run in the same way as other private sector funds.
The noble Lord, Lord Graham of Edmonton, asked about the f100 figure. That offer of an ex gratia payment does not imply detriment. It is—and the unions are well aware of this—a sum in recognition of a remote risk. We do not accept that there is detriment in the Royal Ordnance plc scheme.
If I may expand a little for the noble Lord, Lord Crawshaw of Aintree, I would say that there will be four schemes. There will be two at each yard—one for transferred ex-civil servants and one for new entrants. I hope that that clarifies the point for the noble Lord. The transferred scheme will be index-linked in the same way as is the PCSPS. I hope that that is a measure of reassurance for him.
We are convinced that the dockyards should be properly run as private sector companies outside the Civil Service. Maintaining links with the Civil Service in the explicit manner that the amendment tries to do would run entirely counter to that intention. I cannot therefore accept the new clause. I hope that the noble Lord will see fit to withdraw it.
10 p.m.
Lord Graham of Edmonton: I intend to withdraw the amendment. Will the noble Lord the Minister confirm the point made by the noble Lord, Lord Crawshaw, and myself: there will be two different forms of pension scheme, one superior and one inferior? New employees will be members of a fund which is different from that of those who have transferred. If that is to be the position, one assumes that people making the same contributions, doing the same work, and having the same skills will receive different pensions because they are members of two different funds.
We received an assurance two years ago about the Royal Ordnance factories. It was not a guarantee, but a "no detriment" assurance. It resulted in a payment of £100, which was called a "remote risk" payment. The noble Lord the Minister may use whatever terms he likes, but the people who are affected see it as an attempt to make up a shortfall from that about which the noble Lord and his colleagues gave an assurance. It was not a cast-iron assurance, but they said there would be no detriment. I should like the noble Lord's observations on those two points.
Lord Glenarthur: Obviously those workers who join later cannot join under the original scheme; it would not be feasible for them to do so. The employees transferring will, as I have said, have to leave the PCSPS. They will have the option, in the way that I have described, of leaving their accrued pensions in the PCSPS or transferring them to the new scheme in their dockyard. For those who choose the latter course, a transfer payment covering past service will be made from the PCSPS into the new scheme. Thereafter, those schemes will be funded by contributions, probably jointly, from employer and employee.
The overall intention is that the schemes will be set up with rules and benefits as close as possible to the PCSPS with an initial transfer value and a contribution rate sufficient to meet the liabilities placed upon them. Thereafter, the management of the scheme, in the way that I have described, will, as is the case generally in the private sector, be for the trustees. It is they who will be responsible for the investment policies, the benefits, the rules and all that type of thing. I do not believe that the noble Lord need have a concern about that. There are those who will join after. They will be as closely allied to the PCSPS as is possible. I hope that that will meet his concern.
Lord Graham of Edmonton: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 28:
After Clause 2, insert the following new clause:
("Redundancy fund.
. In pursuance of the arrangements made under section 1(2) above the Secretary of State shall ensure that the redundancy provisions applicable to all employees of any dockyard company shall be equivalent to those presently embodied in the Principal Civil Service Pension Scheme and will set up out of moneys provided by Parliament a redundancy fund for the benefit of all qualified dockyard employees declared redundant after the transfer of the dockyard undertaking.")
The noble Lord said: This amendment deals with the arrangements for redundancy. The Minister who dealt with these matters in another place, Mr. Norman Lamont, said on 8th April that,
"the overall intention will be to set up a scheme paying redundancy benefits either exactly the same or of equivalent value, and reckonable service accrued under the Crown will not be lost".—[Official Report, Commons 8/4/86, col. 106.]
The amendment seeks to enshrine the assurance of the Minister in the Bill. Ministers have repeatedly said that they want to introduce risk pricing for contracts to refit warships in the dockyards. This must mean that the dockyard companies could get into financial difficulties. The Minister and his advisers can confirm what I have been told—that the redundancy fund set up in the Royal Ordnance factories is now bankrupt. The fund cannot afford to make non-industrial workers redundant. To the extent that one wishes to see people kept in work, that is fine. The redundancy option these days is a fact of life. So if in the overall package of a sale to the workforce there is a redundancy option, dockyard workers want to know exactly what it is. I shall be glad therefore if the Minister will confirm what has happened in the case of
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the ROF's. Frankly, we cannot ignore what has happened. There is so much from which we can gain experience.
The Ministry of Defence has also given evidence to the Public Accounts Committee suggesting a further reduction in the number of dockyard employees following privatisation. Without a guarantee in the Bill, it is possible that redundancy compensation would be at reduced levels. We know from discussion on the Wages Bill, in which some of us took part last Friday and therefore know all about, that the Government are not beyond making alterations to redundancy payments. In that instance, they took away the contribution by the Government to a percentage of the amount and left this to employers. There are rights, but there is no underwritten sum of money from the Government.
The dockyard workers are saying that they need better assurances. Without those, there is little that they can do except scream blue murder and get Members of your Lordships' House to make a nuisance of themselves with the Minister. We are not unmindful of the limits of our powers. If, however, the Minister wants satisfactory industrial relations in the dockyards, he needs to deal with this point.
The crucial factor is the ability of the contractor to pay redundancy compensation at present levels. I would be glad if the Minister can tell us how he proposes, in a long list of things that he says the contractor will have to do, to get the contractor to take on his obligations as a fair-minded employer in respect of redundancy. I beg to move.
Lord Crawshaw of Aintree: In supporting the noble Lord, I shall be brief. We shall be dealing with people, for the most part, who have been transferred from one undertaking to another and who, in ordinary circumstances, would possibly have been entitled to redundancy payment. Having regard to the fact that they will not be getting redundancy payment, I think it behoves this Committee to make sure that if they require that redundancy payment at any future time the funds will be there to meet it. We know that it will be a cut price business running these dockyards. It is a commercial enterprise, and people can lose money. The situation may well arise where redundancy payments have to be reduced. I think that would be iniquitous, particularly in respect of those who at the present time would be guaranteed those redundancy payments if they were made redundant.
Lord Glenarthur: Of all the changes facing the workforce, the Government are certainly aware that the question of redundancy arrangements figures prominently as a matter of concern for them. Before turning to the question of funding, let me set out the position regarding the redundancy arrangements in the new companies. Under the TUPE regulations the Ministry of Defence redundancy procedures will transfer to the new company. These cover such matters as periods of notice, orders of discharge, and so on, although there will have to be some changes —for instance, in respect of the field of redundancy—to reflect the fact that the companies are separate entities outside the Civil Service.

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The invitation to tender refers to the procedures, to their transfer, and sets out the Ministry of Defence manuals in which those procedures are contained. The invitation to tender also makes it clear that the company will have to pay redundancy compensation which is of at least equivalent value to that payable under the present Civil Service arrangements. Any changes that the contractor might wish to make will have to be in consultation with the unions. The prospective contractors are in no doubt about their obligations in this matter. There will need to be changes in the funding arrangements. Currently the Civil Service redundancy scheme is embodied in the Principal Civil Service Pensions Scheme. Inland Revenue regulations prohibit the payment of redundancy compensation from private pension schemes. Therefore, as is the case in the private sector, redundancy payments in the new companies will have to be made from company funds to any staff made redundant after vesting day.
It is the Government's intention that the dockyard companies should behave as fully commercial organisations, as has been made clear on many occasions. But they should be subject as far as possible to the full range of commercial disciplines. In considering, therefore, the need for any redundancies they should assess and balance the costs of savings and incorporate these projections in their business planning.
The noble Lord, Lord Graham, referred to what he called the Royal Ordnance factories' redundancy funds. There was, and there is, no redundancy fund for our Royal Ordnance plc. The company was capitalised to take account of its forecast liabilities and assets, and redundancies paid from revenue was a factor included in this assessment. The same kind of thing would apply to those companies which may at the end of the day be responsible for the dockyards. That would also be taken into account in assessment of the tenders.
The costs to which I referred will be included as overhead charges in their price to the customers, and hence to the Ministry of Defence. But it is essential that the assessment of any future redundancies is carried out on commercial grounds against the background of their overall business plan. For this reason I cannot agree that the new clause is appropriate. First, it attempts to bind the redundancy arrangements in the new companies statutorily to those of the Civil Service. This is another example of a measure which would restrict the responsibility of the new management to manage the terms and conditions of their company. The same is true of the second aspect of the new clause. The setting up of a redundancy fund, as envisaged, would represent a Government underwriting which, no matter how laudable the intentions behind it, would cut across the need for the dockyard companies to act as commercial organisations separate from the Government and from the Civil Service machine. Accordingly, I hope that the noble Lord will not press his amendment.
Lord Graham of Edmonton: I do not intend to press my amendment, not least because there are matters upon which the Committee will await with interest the actions of the Minister concerning amendments which
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we expect to table at the Report stage. There could very well be aspects of this which we would want to raise then.
I am bound to say that the Minister has done nothing to assuage the fears of the workers that they will be in a worse position in the future in comparison with the rights and perhaps privileges which they enjoy at present as civil servants. However, there is no point in delaying the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 29 and 30 not moved.]
Clauses 3 and 4 agreed to.
House resumed: Bill reported with amendments.

Dyfed Bill [H.L.]
Committed to a Select Committee.
House adjourned at seventeen minutes past ten o'clock.

  NUCLEAR INSTALLATIONS: PREVENTION OF WARTIME ATTACK
  NUCLEAR INSTALLATIONS: PREVENTION OF WARTIME ATTACK
  TAKE-OVER BIDS AND CONDITIONAL DISPOSALS
  TAKE-OVER BIDS AND CONDITIONAL DISPOSALS
  MR. WILLIAM ALLEN
  MR. WILLIAM ALLEN