Sitting of 25 June 1986

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
NEW WRIT
For Newcastle-under-Lyme, in the room of John Golding Esq. (Chiltern Hundreds).—[Mr. Foster.]
PRIVATE BUSINESS

  BLYTH HARBOUR BILL [Lords] (By Order)
  Order for Second Reading read.
  To be read a Second time tomorrow.

Oral Answers to Questions
  ENVIRONMENT

    House Building (Brent)
    Mr. Pavittasked the Secretary of State for the Environment if he will publish in the Official Report a table showing the number of house building starts, both private and public, in the London borough of Brent during 1985; and if he will make a statement.
    The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The London borough of Brent reported 455 starts during 1985, the highest number since 1977. Of these, 188 were private sector and 267 public sector.
    Mr. Pavitt: Is the Minister seized of the depth of the crisis in Brent, where only six local authority houses were built last year and where 18,000 people are on the waiting list? Is he aware that there are 650 homeless families? Does he realise that at least 4,916 families are on the high priority transfer list from high rise blocks? Every Saturday morning I am torn to pieces by the family and human tragedies of people who cannot face the problem of not having a roof over their heads.
    Sir George Young: I am not sure that the hon. Gentleman heard my reply. Starts last year were the highest since 1977. There were 455 starts in 1985, as against 111 in 1979.
    The hon. Gentleman was right to say that there are some 600 families living in unattractive circumstances in bed-and-breakfast accommodation, but there are 825 empty dwellings in Brent's ownership, of which 319 have been vacant for more than one year and 180 for more than two years. Brent should bring those properties back into use.
    Mr. Lyell: Is there any arrangement whereby some of those seeking homes could move into the 1,500 houses that have been vacant in Southwark for more than a year?
    Sir George Young: Brent is entitled to nominate people, through the London area mobility scheme. Last year it had a quota of 568 lettings, but took only 263 of them. There is an opportunity for Brent to attack its housing problem by making fuller use of London's mobility scheme.

    House Prices
    Mr. Simon Hughesasked the Secretary of State for the Environment what has been the percentage increase in average house prices in (a) Greater London and (b) the south-east of England in each of the three last years for which figures are available.
    The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): The rises in house prices in Greater London are estimated to have been 12 per cent. from 1982 to 1983, then 16 per cent. to 1984 and 14 per cent. to 1985. For the rest of the south-east, the estimates are 13 per cent., 13 per cent,. and 10 per cent.
    Mr. Hughes: Does the Minister realise that those figures compare with increases in average wages that are considerably below those levels— about 9 per cent., 7 per cent. and 8 per cent. for the same three years in Greater London? Does not that, coupled with unemployment that now puts 14 London constituencies in the top 50 for rising unemployment, mean that very few people can buy first homes in London? What will he do about it, and how soon will he provide the opportunity to purchase for those at the bottom end of the earnings scale or those who are not employed at all?
    Mr. Patten: First, I invite the hon. Gentleman to join me in putting the maximum possible pressure on the boroughs involved to ensure not only that all the derelict land that they have is brought forward for housing but that they do not in any circumstances delay the planning process, which is one of the things that prevents proper new building taking place. I listened to what the hon. Gentleman said about the need to bring about more low-cost housing development. That is why we intend to do all that we possibly can to encourage shared ownership in the capital and the south-east.
    Mr. Jessel: Do not current house prices in the south-east make the £30,000 limit on mortgages for tax relief somewhat out of date?
    Mr. Patten: Not at the moment.
    Mr. Winnick: Does the Minister recognise that his answer means that his Department should do what it can to encourage local authorities to build so that many people who are not in a position to buy are able to be rehoused by local authorities? Even if we take into consideration the number of empty properties — some of which are not being done up because of lack of cash—there remain hundreds of thousands who stand no chance of buying their own homes and who are in desperate need of local authority accommodation. Does the Minister associate himself with the insulting and offensive remarks that were made last week by the Minister for Information Technology? Are those his views?
    Mr. Patten: I shall answer the hon. Gentleman's first question. The answer is very much in the hands of local authorities. The message of "build, build, build," helped throughout the 1960s and 1970s to bring about the problems that we have today. Build in haste, repair at

    307
    leisure. There has been under-investment in housing repair. That is why we have so many empty houses in council ownership and why we have homelessness.

    Green Belt
    Mr. Robert B. Jonesasked the Secretary of State for the Environment whether he intends to make any changes to the Government's policies on the green belt.
    The Secretary of State for the Environment (Mr. Nicholas Ridley): No, Sir. The policy on development in the green belt remains as set out in my Department's circular 14/84.
    Mr. Jones: I am grateful to my right hon. Friend for his defence of the green belt. Can he confirm that where the local planning authority, the borough or district council, is opposed to the release of land from the green belt, such as in my own constituency, he will reinforce the stance of the council and not seek to release land against its wishes?
    Mr. Ridley: We must take into account the structure plans. Together with the green belt policy and the nature of any structure plans that are in existence, my role is to make an interpretation if appeals come to me.
    Mr. Colvin: My hon. Friend the Member for Hertfordshire, West (Mr. Jones) is lucky to know where his green belt is. My constituents and the planners who look after their interests have been waiting for months for the publication of the South Hampshire structure plan. Can my right hon. Friend give me any idea when that plan is likely to see the light of day?
    Mr. Ridley: Shortly.

    Water Authorities (Privatisation)
    Sir Geoffrey Finsbergasked the Secretary of State for the Environment if he is now in a position to state when he plans the conversion of the Thames water authority into a water supply public limited company; and if he will make a statement.
    Mr. Simsasked the Secretary of State for the Environment what progress he has made with plans to privatise the water authorities.
    Mr. Ridley: The Government intend to introduce legislation to restructure the 10 water authorities in England and Wales as water service public limited companies. They will then be floated when market conditions and the circumstances of the individual companies allow.
    Sir Geoffrey Finsberg: I thank my right hon. Friend for that reply. Will he use the intervening period to make it crystal clear that the 25 per cent. of the population who already get their water from private companies are not suffering deprivation, sewerage trouble, high prices, and all the other nonsense that is put about by the Opposition parties and the trade unions?
    Mr. Ridley: I agree entirely with my hon. Friend. He is right to draw attention to the position of the 28 statutory water companies, which supply about one quarter of the water in England and Wales, including large cities such as Newcastle and Bristol. The companies operate to the same tight legislative requirements as the water authorities on the purity of drinking water, and so on. They have an excellent record in maintaining standards of all kinds.
    Mr. Sims: Is my right hon. Friend aware that the Thames water authority is ready, willing and, indeed, eager to become a public limited company and to do so on terms that will be favourable for both employees and customers? Can he confirm that the legislation that he will introduce will enable Thames to be privatised as soon as it wishes without necessarily having to wait until the other nine authorities are ready to go forward?
    Mr. Ridley: I agree with what my hon. Friend says about the Thames water authority. It is encouraging that there is competition from a number of water authorities to be first into the private sector. There is a reluctance also, I think, to be last into it. The order in which it will be right for the authorities to go into the private sector will depend on the state of readiness at the time.
    Mr. Spearing: Does the Secretary of State agree that the policy involves selling off the ownership and control of the River Thames from Teddington to Cirencester and Tewkesbury? Does he recall that in the debate on Monday his hon. Friend the Minister for Housing, Urban Affairs and Construction confirmed that the Government would welcome private overseas capital in a shareholding of that river? Will the right hon. Gentleman tell the House the maximum proportion that he envisages will be permitted to private capital? Is not the idea of the sale of the River Thames or any other river in the country to private ownership entirely against the views of the majority of people of this country?
    Mr. Ridley: I must correct the hon. Gentleman, in that Tewkesbury is in the Severn catchment area, although Cirencester is in the Thames catchment area. I must correct him also in another, more important, respect. I see no objection whatsoever to the import of capital into this country. Many of our industries rely on imported capital and many of our jobs rely on capital which we have exported overseas. I do not take the narrow, blinkered attitude that the hon. Gentleman takes to the free flow of capital in world markets.
    Mr. Allan Roberts: Has not the Secretary of State just confirmed that the French could actually buy the North-West water authority and the Thames water authority, and that the British people could buy not only their energy but their water from the French? Does he really believe that the British people want that? Will he confirm that the so-called private water authorities are merely franchising companies which sell water which they get from the existing publicly owned water authorities and that not one of them is responsible for pollution or sewerage matters, in which there is no profit? If the water authorities are privatised, will the country not suffer as a result?
    Mr. Ridley: The hon. Gentleman knows that in many privatisations the Government have thought it appropriate to take a golden share to control the degree of foreign ownership. When the House considers the matter, we can discuss the pros and cons of such a policy on water. It is not something that can be taken away. It is not possible to close down the North-West water authority. I feel that the problem is nothing like as important as the Opposition seem to be majoring on.
    It is true that private water companies do not perform the entire functions of the water cycle, but the functions that they do perform—I think the hon. Gentleman will accept this—are of a first-class standard.
    Mr. Steen: Will my right hon. Friend have a word with his right hon. Friend the Secretary of State for Transport and ensure that he knows what will happen to the chairman of British Rail if he does not change his mind about the sale of French water on all British Rail trains? It is impossible to get English water on British Rail trains, except for cleaning one's teeth on the night train, which the chairman of British Rail said that it is the only thing that it is good for.
    Mr. Ridley: My hon. Friend invites me to talk to my former self, which is a temptation I must now resist. I suggest that it might be advantageous if we could get Malvern water on SNCF.
    Mr. O'Brien: In view of the right hon. Gentleman's reply to the question about the speed with which some water authorities will be privatised, will be tell the House how charges will he levied on domestic consumers when the water authorities are in the private sector? If there is to be a delay in metering or initiating other services, will he agree to the private sector using the rating system to collect charges from domestic consumers?
    Mr. Ridley: The private sector has been charging customers for water for centuries in those areas where water is still under private control. There have been remarkably few complaints or questions asked about that practice. I do not see why that should not continue.
    Dr. Cunningham: First, I take this opportunity to congratulate the right hon. Gentleman on his appointment to his important office. We are aware that behind his well-known eccentricities of view lies a fairly shrewed political brain. As he has referred to his tendency to talk to himself, I should advise him that many people in local government fervently hope that he will go on doing that, and leave them alone.
    As for the right hon. Gentleman's proposals to privatise Britain's water resources, I remind him that even his own eccentricities cannot cover the fact that the Government are proposing to hand over water consumers to private enterprise monopolies without competition or choice. A rip-off of the taxpayers' assets is likely to be followed by a rip-off of water consumers. How can the right hon. Gentleman, of all people, possibly justify that?
    Mr. Ridley: I am grateful to the hon. Gentleman for his welcome to my sitting in this position. I can reciprocate by saying how pleased I am to find him sitting in his position, on the Opposition. and I hope that he will remain there for a very long time.
    I am fascinated that in my new post I am to have the label "eccentric". I am used to having labels of one sort or another, so I say in gratitude to the hon. Gentleman that this one is much more acceptable than some I have had.
    The hon. Gentleman has left out of account the fact that many companies have performed infinitely better in the private sector. I can compare this with British Telecom, where privatisation of what was nearly a natural monopoly has taken place. One cannot meet anyone who does not now remark how greatly improved telephone services are.

    Local Authority Housing
    Mr. Cartwrightasked the Secretary of State for the Environment when he next plans to meet representatives of the local authority associations to discuss ways of
    310
    reducing the backlog of repair work identified in his Department's inquiry into the condition of the local authority housing stock in England.
    Mr. Ridley: I will be meeting representatives of the local authority associations to discuss various housing issues at the Housing Consultative Council meeting on 8 July.
    Mr. Cartwright: Does the Secretary of State accept the Audit Commission's estimate that about £900 million is added each year to the council house repair bill? Does that not mean that, at the present rate of investment, it will take us about 90 years to bring all council housing up to an acceptable standard?
    In view of the seriousness of the problem, what steps is the right hon. Gentleman taking to ensure that local authorities display greater interest in co-operating with the private sector in the repair and rehabilitation of council estates?
    Mr. Ridley: I have barely received, let alone had time to study, the report. If that proves to be the case, it must be said that local authorities have for many years failed to keep their housing stock in good order.
    It is extraordinary that, after decades of managing local authority housing, local councils have now come along with a capital problem, which appears to be great, because of their neglect to keep rents at a level which would enable them to keep their houses in good order. Further evidence of that is the fact that spending per house on repair and maintenance and on capital improvements was abysmally low when we came to power. Since 1980–81 spending per house has gone up by 21·5 per cent. in real terms. We now have figures of £2·5 billion a year on maintenance. £1·2 billion on capital and £1·4 billion on revenue expenditure, which are far better figures than when we first came to power. It is that which has gone wrong in the past. Not enough has been spent to maintain the houses, and that is why we have such a bad situation of disrepair.
    Mr. Heddle: Is it not a national scandal that so many local authorities are keeping many council houses empty for so long? Is not their negligence contributing to the misery of homelessness? Does my right hon. Friend agree that one solution to the problem is to allow do-it-yourself experts who are waiting for council houses to take over those council houses for a rent-free period and do them up at their own expense, because the local authority would have left them empty in any event?
    Mr. Ridley: I agree with my hon. Friend. He has made a sound point. The fundamental problem is that those houses have been allowed to exist without being repaired and the local authorities have not had sufficient revenue to do so. Whether the repairs are done by allowing the tenant to do it at his own expense, or whether the tenant pays more so that the local authority can do it, is a secondary issue. The point is that it should never have been allowed to happen in the first place.
    Mr. Michie: As the Government's own estimates of the backlog of repairs or cost is about £19 billion, how can the Government justify further constraint on money for repairs by local authorities?
    Mr. Ridley: I take seriously the appalling situation of disrepair in local authority houses. That is something I shall he looking at to see how we can best deal with it. I should have thought that the whole House would agree

    311
    that we should not allow further disrepair. We should avoid the mistakes of the past in failing to maintain houses as we go along out of the housing revenue accounts.
    Mr. Yeo: Will my right hon. Friend consider allowing local authorities to use a greater proportion of their capital receipts, perhaps returning to the 40 per cent. level which was the figure until the beginning of last year, as a means of addressing this problem?
    Mr. Ridley: That is something that I am busy studying at the moment. The areas where the main disrepair has been allowed to grow tend to be in large municipal housing estates where there are small accumulated receipts. Areas where there are large accumulated receipts tend to be where the local authority has kept its housing in a much better state of repair. There is a serious mismatch between resources and needs.
    Mr. Raynsford: Does the Secretary of State accept the need for substantial additional resources to be made available to those inner city authorities which have the greatest concentrations of problems? Will he possibly even consider using those capital receipts, which are available elsewhere, to help those authorities with the greatest need?
    Mr. Ridley: My hon. Friends will be delighted to hear that the Labour party thinks that the prudent housekeeping of many Tory district councils, which has resulted in accumulated receipts, should be forcibly taken away from them and given to spendthrift authorities which fail to keep their housing in good order.
    Mr. Hickmet: Does my right hon. Friend accept that those local authorities which have gone out to private contractors to have the housing stock maintained have spent their money more effeciently and cost-effectively? Is it not a fact that one of the principal problems with the maintainence of the housing stock is the inefficiency of the direct labour organisations in many areas? Is that not aggravated by the refusal of Labour-controlled local authorities to accept the lowest tender from private contractors?
    Mr. Ridley: I do not believe that the reason my hon. Friend gives is the only one. It seems to me that the essential need is for a local authority to get itself sufficient resources and to use those resources to secure the greatest value for money possible, to make sure that its housing stock does not deteriorate. It is not only rates and grant that are available to a local authority; it is the tenants' income itself, which could be spent on the tenants' houses, if there was a proper level of rent.
    Mr. John Fraser: May we take it that we have therefore elicited from the Secretary of State that he agrees with the Audit Commission that there is a crisis of serious proportions in the condition of our local authority housing stock? If that is so, and the right hon. Gentleman talks, as he did recently when he was appointed, of prudent housekeeping how can it be prudent housekeeping when local authorities which have a legacy of system-built houses and non-traditional homes are sometimes not allowed to spend their own money to keep together houses that are literally falling apart? Surely it is just ideological nonsense to suggest that any help from the public sector will not solve the enormous problem identified by the Association of Metropolitan Authorities, the Audit Commission and his own Department.
    Mr. Ridley: The hon. Gentleman must not put words into my mouth. I did not accept the Audit Commission's description of a crisis. As I said, I have not had a chance to study its report yet, and I am not commenting on it. I accept that there is a large element of disrepair in some local authority housing estates as well as in municipal estates. I should like to make just one point, that that disrepair should not have been allowed to arise. We have two things to do now. First, we have to see how best to clear up the areas of neglect of those local authorities. Secondly, we have to put it fairly on the line that local authorities should not allow further neglect and deterioration. Because several local authorities have neglected to keep their houses in a fit state for their tenants to live in the hon. Gentleman turns round and blames the Government. He should be blaming the local authorities, and he knows it.
    Mr. Beaumont-Dark rose—
    Mr. Speaker: Mr.…
    Mr. Beaumont-Dark: —Beaumont-Dark.
    Mr. Speaker: Mr. Beaumont-Dark.
    Mr. Beaumont-Dark: It does us all good to have our names forgotten at times.
    Will my right hon. Friend accept congratulations from the Conservative Benches on attaining his distinguished office, to which I am sure he will lend his originality and interest? We shall watch with fascination his progress. Does my right hon. Friend accept that one of the problems that we have is that many of us are exactly and entirely behind the sale of council houses, which gives people choice, but feel that that money should then be available to repair the stock of council houses? If we delay spending £250 this year, it will be £400 next year and dereliction the year after. Could we not encourage both sale and repair, which would be to the benefit of all the people?
    Mr. Ridley: I am grateful to my hon. Friend for his welcome and the even more attractive adjectives than those used by the hon. Member for Copeland (Dr. Cunningham). As Question Time goes on it gets better and better.
    I agree with my hon. Friend that the combination of privatisation and repair of council houses is what we want, but on several estates the condition of the council houses is such that I do not believe that anybody would want to buy them as they are. That is a special problem, to which I intend to turn my attention, but let it be absolutely clear that I am saying only that I recognise that there is a problem in certain areas. At the same, time I believe that we must make sure that we do not get into a worse position, by ensuring that local authorities take their responsibilities seriously.

    Local Government (Widdicombe Report)
    Mr. Bruceasked the Secretary of State for the Environment when he proposes to issue the Government's response to the Widdicombe report on local government practices and procedures; and if he will make a statement.
    Mr. Clayasked the Secretary of State for the Environment when he proposes to publish the final report of the Widdicombe committee on local government.
    Mr. Chopeasked the Secretary of State for the Environment what response he has received to the publication of the main report of the Widdicombe committee on local government.
    The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): I refer the hon. Gentlemen and my hon. Friend to the answer given by my right hon. Friend the Secretary of State to my hon. Friend the Member for Broxbourne (Mr. Rowe) on 19 June.
    Mr. Bruce: I thank the Minister for that helpful reply.
    Mr. Allan Roberts: You have been "Rumbold"!
    Mr. Bruce: Why have the Government been so quiet about the publication of the report, given the enthusiasm with which they set up the inquiry? Is it because the Widdicombe report has tackled the problem of one-party domination in local councils, has supported democracy in local councils and has made constructive recommendations on how to strengthen them? Will the Government recognise that not only must they consult, but that there must be an early debate in the House and that they must act on the recommendations?
    Mrs. Rumbold: I am surprised that the hon. Gentleman believes that the report has been received quietly. It received wide coverage in the press and was welcomed widely by many people in local government. The report has responded fully to the concerns across party political lines that local democracy has been somewhat under threat in a few councils. As a result we have a good report, which contains about 88 proposals, which present a balanced and interrelated package. We shall have serious consultation on this matter.
    Mr. Clay: Is it not true that the proposals to ban people of the rank of principal officer and above from effective political activity is the gravest attack on employment civil liberties since the banning of trade unions at GCHQ? Is it not true that the practice of party representatives attending council group meetings is almost as widespread in the Tory party as it is in the Labour party? The proposed ban is causing grave concern and disquiet. Will the Minister ensure that those aspects of the Widdicombe proposals which try to separate party politics from elected local government are rejected? If not, will she be consistent and demand the removal of the chairman of the Tory party from the Cabinet?
    Mrs. Rumbold: I do not accept the later part of the hon. Gentleman's question. The report will be subject to the fullest and widest consultation among all the parties concerned. On his earlier point about principal officers and above not being allowed to sit on local councils, I remind him that no civil servants are allowed to be Members of this House.
    Mr. Chope: Did my hon. Friend notice the warm reception given to the report in The Guardian editorial? Will that encourage her to seek early legislation to deal with the worst excesses of political corruption, which still cause consternation in local government?
    Mrs. Rumbold: I understand my hon. Friend's anxiety about the worse excesses of political corruption. I read the warm response to the publication in The Guardian. I repeat that the package of 88 recommendations deserves sensible consideration and consultation before the Government take action.
    Mr. Tony Banks: Does the Minister support the idea of ending one-party policy committees on local councils? If so, how will that apply to the London borough of Newham, where all 60 councillors are Labour and there is no opposition? Why is it different for central Government as opposed to local government? If we open policy committee meetings in local government, why not open them in central Government and allow the Opposition into Cabinet meetings?
    Mrs. Rumbold: The House will not be in the slightest bit interested in my views on the report. My Department will be happy to receive the views of the hon. Member for Newham, North-West (Mr. Banks) on the report in due course.
    Mr. Squire: Will my hon. Friend commend the members of the Widdicombe committee on an excellent job — at first sight — which demands much attention before we can make detailed comment? Will she note that the House would appreciate a full-scale debate in advance of the Government producing their proposals on Widdicombe, so that hon. Members can add their input to the important debate on the health of local government?
    Mrs. Rumbold: I thank my hon. Friend for his remarks and draw his attention to the response of my right hon. Friend the Secretary of State to my hon. Friend the Member for Broxbourne the other day, when he thanked Mr. David Widdicombe and his fellow committee members most sincerely for their report and commented that the committee's study had been thorough and that the report was impressive in the extent of its coverage and the scope of its findings.
    As for a debate on the report, that is a matter for my right hon. Friend the Leader of the House.
    Dr. Cunningham: Will the Under-Secretary accept that the sort of language that she is using and the fact that she is responding to the question lead us to conclude that Widdicombe will be quietly sidelined by the Government, probably because it offers no justification for the wilder allegations of the Conservative party about the state of affairs of local government in this country? For example, does the Under-Secretary accept the comment of Mr. David Widdicombe in his foreword:
    "There is a solid base of normality in local government"?
    Will the hon. Lady realise that we cannot accept not only the retention of personal surcharge, but its expansion to cover elected members in Scotland? We also cannot accept the proposal of Mr. Widdicombe's committee that chief executives should have extended legal powers over democratically elected councillors.
    Widdicombe is disappointing because it has failed to address itself to the opportunity with which it was presented to strengthen and enhance local democracy in Britain.
    Mrs. Rumbold: The hon. Member has made the point well that, whatever my lack of seniority, there is considerable uncertainty about the responses of Opposition Members and my hon. Friends, which points to the need for serious consideration through consultation. I hope that that will be achieved in the responses of hon. Members and the many outside organisations and individuals who are interested in local government.

    Inner Cities
    Mr. Knowlesasked the Secretary of State for the Environment what steps he is taking to encourage private sector involvement in the regeneration of the inner cities.
    Mr. John Patten: The Housing and Planning Bill will enable assistance to be given to regeneration carried out by the private sector.
    Mr. Knowles: I thank my hon. Friend for that reply, albeit ever so brief, but may I encourage him to go further and let us know about the prospects for more urban development corporations, what is to happen on urban regeneration grants and how decisions on that aspect will link with the announcement the other day of our right hon. and learned Friend the Paymaster General about inner cities?
    Mr. Patten: The private sector created most of our great cities, and the private sector has a critical role to play in regenerating our great cities. That is why we are taking powers in the Housing and Planning Bill to pay urban regeneration grants. We are extremely grateful to all the Opposition parties for their support for those grants, which have also been welcomed by the private sector. Of course, urban development corporations are well worth considering, and we should perhaps be considering having more UDCs.
    Mr. Alton: Does the Minister not agree that it might help to stimulate greater private sector investment in the inner cities if the Government looked again at whether VAT ought to be charged on building work in those areas and at the possibility of increasing the derelict land grant? Does the hon. Gentleman, have a word to say about last week's speech by the right hon. Member for Henley (Mr. Heseltine), who said that he was critical of the level of aid being given to inner cities by the Government?
    Mr. Patten: We are spending at record levels on derelict land grants, and substantial amounts of derelict land—about 2,500 acres—are cleared in inner city areas every year. One problem is to make sure that something is put up on that land — houses or industry. We are trying, through urban development grants and the new urban regeneration grants, to attract as much private sector funding as possible. Our experience with the urban development grant shows that for every pound of public sector money put in, we attract between £4 and £5 of private sector money.
    Mr. Chapman: Will my hon. Friend confirm that even if the Government doubled the resources presently going into the inner cities that would not begin to meet the size of the problem involved in tackling the necessary works? Therefore, the only way is to attract private investment, and the best way to do that is not merely to consider extending the UDC concept to other parts of inner cities, but actually to create them, and with the same commitment that we had when we created the new town corporations.
    Mr. Patten: I note what my hon. Friend, with his considerable experience of these matters, says. I know of no observer of the inner city scene, be it my right hon. Friend the Member for Henley (Mr. Heseltine) or anybody else, who believes that public money alone will lead to the regeneration of the inner cities. That is why we desperately need to attract private sector money into the inner cities.
    316
    We are doing so. Urban regeneration grants will help. Urban development corporations may well help. My right hon. Friend the Secretary of State and I listen carefully to what my hon. Friend says.
    Mr. Freeson: Will the Minister pursue with the Chancellor of the Exchequer the abolition of the Treasury rule that forbids housing associations from tying in housing association grants with borrowing from the private market for the provision of rented accommodation? Does he agree that this is one of the biggest stumbling blocks to the expansion of housing association rented accommodation during a period of severe restriction on public expenditure? Will he act on that?
    Mr. Patten: I note what the right hon. Gentleman, with his long experience of these matters, has said. We have received some very interesting proposals from the Housing Corporation about these points. Also, from time to time, happily, I have the chance of discussions with my right hon. Friend the Chancellor of the Exchequer.
    Mr. Cormack: When my hon. Friend is considering these matters, does he agree with me that the Henley approach is to be preferred to the Chertsey and Walton hypothesis?
    Mr. Patten: I always listen carefully to all that my right hon. and hon. Friends have to say, and the speech of my right hon. Friend the Member for Henley was most thought provoking.
    Mr. John Fraser: Does the Minister recognise that one very serious inhibition on small private investment in the inner cities is the great difficulty in places such as Brixton and Handsworth of obtaining insurance on business premises? Lambeth and Birmingham recently called a conference on these matters. What are the Government doing about it?
    Mr. Patten: I am happy to say that my right hon. and learned Friend the Paymaster General is already looking at this issue in connection with the eight areas exercise. I think that that will produce some results in the not too distant future, which will be of great help right across the inner city scene.

    Defective Housing (Basildon)
    Mr. Amessasked the Secretary of State for the Environment what recent representations he has received about repairing defective system-built housing in Basildon; and what action he proposes to take in consequence.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): I have recently received a number of letters from my hon. Friend on behalf of his constituents and direct from owner-occupiers of houses built by Basildon development corporation, using the Lindsay Parkinson HSSB design. Recently I visited the area, together with my hon. Friend, and I hope to announce shortly what steps can be taken to assist.
    Mr. Amess: I thank my hon. Friend and his Department for the assistance that they have so far been able to give to my constituents with their problems. I urge him to act as quickly as possible so that defective properties are repurchased, or the owners receive full compensation, or the properties are repaired, or are given a clean bill of health.
    Mr. Tracey: I appreciate the various remedies that have been put forward by my hon. Friend, but, as I told him recently, I shall be very glad to have a meeting with representatives of the Vange Action Group. I am very conscious of the need for an early decision.
    Mr. Hardy: May I say to the Minister with responsibility for sport that I hope that defective housing will be more successfully tackled than was the World Cup by the English football team? Serious though the problems may be in Basildon, may I make the point that this is a national problem and that it requires urgent attention and the provision of national assistance to local authorities and development corporations before the year is out?
    Mr. Tracey: I hope that the hon. Gentleman will not consider that I am giving him the elbow, but housing in this country is considerably better than much of the housing that I saw when I was in Mexico. Of course, the Government of Mexico are much more closely associated with the party opposite than they are with the party of this side of the House.
    Hon. Members: Send him off!
    Mr. Speaker: Order. This is supposed to be about housing in Basildon.
    Mr. Tracey: You are quite right, Mr. Speaker. The only housing that we know of similar to that in Basildon is in Watford.

    Planning Decisions (Appeals)
    Mr. Adleyasked the Secretary of State for the Environment if he will make it his policy to uphold on appeal the planning decisions of local authorities.
    Mr. Tracey: No, Sir. The law requires that each case be decided on its merits.
    Mr. Adley: That is a relief. Is my hon. Friend aware that the answer given earlier by the Secretary of State to the effect that the green belt, if protected by the structure plan, is safe with him will be welcome to many hon. Members on the Tory Benches, especially in the light of a grotesque application in my constituency to which objection has been taken not only by Christchurch council but by Wimborne and New Forest councils and by Dorset county council? Will my hon. Friend bear in mind that if district councils, as planning authorities, backed by county councils, begin to feel that every time they refuse an application that is contrary to the structure plan and which affects green belt land, those decisions will be overturned by his Department, local government will be even more disillusioned about central Government? Surely none of us wants to see that.
    Mr. Tracey: My hon. Friend raises some interesting points. He will not expect me to comment on a specific case. He should raise the general aspect of this issue with my right hon. Friend when he and his colleagues meet him.
    Mr. Simon Hughes: May I ask the Minister—
    Mr. Campbell-Savours: Give him an easy one.
    Mr. Hughes: I was about to say that I was going to give the Minister an easy ball. There has been a settlement whereby the Globe theatre is likely to be built on the South Bank. If the matter of planning in respect of this comes before the Department of the Environment, can the House
    318
    have the assurance that the Department will do everything it can to encourage the rebuilding of Shakespeare's Globe after 400 years?
    Mr. Tracey: I was privileged to be born in Stratford-on-Avon and I have considerable sympathy for anything, to do with William Shakespeare. I am sure that the hon. Gentleman fully realises that all material matters will be considered.
    Mr. Wiggin: Is my hon. Friend aware that many local authorities are being forced to make planning decisions against their wishes? That is because under the rules, the circulars and the structure plans, they know that if the matter goes to appeal and they lose it is likely to cost a great deal of money. Will he seriously consider the question of my hon. Friend the Member for Christchurch (Mr. Adley)?
    Mr. Tracey: Since 1947 Parliament has provided a right of appeal to the Secretary of State against local planning decisions. In considering such appeals the Secretary of State will have regard to all material planning considerations. I repeat what I said to my hon. Friend the Member for Christchurch (Mr. Adley), that these general points should be raised at the meeting with my right hon. Friend the Secretary of State.
    Mr. Tony Banks: The Minister has done well, so far. In view of his sports portfolio, will he take an interest in the planning permission to redevelop Stamford Bridge and call that in so as to make sure that we preserve good football at Stamford Bridge?
    Mr. Tracey: I have once again to say that I cannot discuss the merits of any particular case at the Dispatch Box.

    Palace of Westminster
    Mr. Gerald Bowdenasked the Secretary of State for the Environment when he now expects the restoration of the exterior of the Palace of Westminster to be completed.
    Sir George Young: The current work on the Terrace elevation and Lord Chancellor's Tower should he completed in November. Plans for the next phase are under consideration and I hope to make an announcement later in the year. There is much still to be done and it will take a number of years to complete this massive task.
    Mr. Bowden: As the restoration work which has already been completed has done so much to enhance the architectural heritage of this part of London and proved such a popular tourist focus, we look forward with great anticipation to the completion of the work. May I, as a surveyor, ask my hon. Friend what stone cleaning technique he proposes to use for the remainder of the work —the wet or the dry?
    Sir George Young: My hon. Friend is right to say that the Palace of Westminster is a major tourist attraction and that it is right to show it at its best. As for cleaning techniques, he rightly says that there are two approaches, one wet, one dry. The wet one heals the affected areas by the steady application of dripping water and the dry one involves a vigorous attack with air and grit. I prefer the former.

    Local Authority Services
    Mr. Corbettasked the Secretary of State for the Environment how many responses have been received by his Department to the consultation paper, "Competition in the Provision of Local Authority Services", published in February 1985.
    Mrs. Rumbold: My Department had received more than 450 responses by 30 October 1985, and a list of the main respondents was placed in the Library on that date. One or two further comments have been received since then.
    Mr. Corbett: Will the Minister confirm that the majority of responses from councils of all political colours have opposed the compulsory extension of tendering? Is not the real answer to allow local councils to spend the money that they need to have the size of work force that they want to carry out their duties officially?
    Mrs. Rumbold: No, Sir. The responses were varied and wide and it would be quite difficult to determine whether they came down on one side or the other. There are clear signs that competitive tendering has helped to provide efficient and effective services and that it does not disturb the good running of local authorities.

    Urban Programme
    Mr. Carttissasked the Secretary of State for the Environment how many jobs have been created under the urban programme.
    Mr. John Patten: The urban programme has created or retained about 24,000 jobs each year through support to capital projects since it was substantially expanded in 1982–83, and projects approved for urban development grant should generate some 20,000 permanent jobs.
    Mr. Speaker: I call Mr. Chope.
    Mr.Carttiss: In the light of his reply, does my hon. Friend agree that well targeted—
    Mr. Speaker: Order. I got the wrong name. I call Mr. Carttiss.
    Mr. Carttiss: We seem to be in the business of getting the wrong names today, but never mind.
    Does my hon. Friend agree that, in the light of his reply, well targeted schemes to help inner-city areas are a more effective way in which to promote economic growth and to provide real jobs in the community?
    Mr. Patten: My hon. Friend is absolutely right. We need the best possible targeting on inner city areas which are suitable for development. Above all else, we must concentrate on areas where there can be the type of regeneration that leads to successful job creation, such as the urban programme has been responsible for. My right
    320
    hon. Friend the Secretary of State and I intend that, in future, the economic job-creating components of the urban programme will get an increased share of available moneys.
    Mr. McNamara: Does the Minister agree that one of the major obstacles in the programme is the need for money to be spent by the end of the current financial year? Is he aware that, by delaying approval, his Department is putting an intolerable burden on local authorities, which must ensure that they get their specifications and tenders out and that the work is done by the end of the year?
    Mr. Patten: I understand that my Department's urban housing renewal unit has, with the co-operation of the hon. Gentleman's city council, recently approved a scheme for one of the big housing estates in his constituency. The council is confident of being able to spend that money. It just requires proper co-operation and planning between the Department and the council. We are very pleased to help in Hull, and I hope that the hon. Gentleman's constituents are also pleased.

    Local Authority Land (Planning Permission)
    Mr. Nicholas Bakerasked the Secretary of State for the Environment if he will bring forward proposals to limit the power of local authorities to give planning permission over land they own.
    Mr. Tracey: In general, the present arrangements for making this type of decision appear to operate satisfactorily, but the Select Committee on the Environment referred to this matter in its recent examination of witnesses and we shall consider the matter again if it makes recommendations on it in its forthcoming report.
    Mr. Baker: I am grateful to my hon. Friend for that reply. However, will he look at the general principle, because there is something seriously wrong? Would he not be concerned, like me, if a local education authority, such as Dorset county council, gave itself permission to sell a piece of land belonging to a school playing field despite the objections of all the other local authorities and eveybody interested in, or adjacent to, the project? That is a matter of concern, and I hope that my hon. Friend will look into it.
    Mr. Tracey: My hon. Friend will not expect me to comment on the particular case that he has raised. However, he can rest assured that we are sympathetic to his general point. Local planning authorities are, of course, answerable to their electorates for the way in which they discharge their responsibilities. They do not have complete freedom of action. However, my hon. Friend can rest assured that we shall consider the matter carefully.

African National Congress (Talks)
3.30 pm
Mr. George Robertson(by private notice) asked the Secretary of State for Foreign and Commonwealth Affairs, if he will make a statement on the talks yesterday with the African National Congress.
The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): At Her Majesty's Government's invitation, Mr. Oliver Tambo, acting president of the African National Congress, called on me on 24 June. I expressed grave concern at the continuing violence in South Africa and emphasised that violence could never lead to a solution to South Africa's problems. A suspension of violence on all sides was essential to create a climate for real dialogue and negotiations. I also stressed to Mr. Tambo the British Government's continuing commitment to the early and complete elimination of apartheid. It was a useful and candid exchange of views.
Mr. Robertson: I congratulate the Minister on her courage in changing the Prime Minister's line by meeting Mr. Oliver Tambo. We, and the majority of British people, warmly welcome the Government's recognition, however belated, of the reality that the ANC speaks for the voiceless millions in South Africa.
Does the Minister realise that that historic meeting will be seen as little more than a gesture unless it becomes part of a process of dialogue with real opinion in South Africa —a country described by Mrs. Helen Suzman last night as being like a latin American dictatorship—and part of a process of pressure, through meaningful sanctions, on the economy of South Africa? Even today's edition of the Financial Times says that the policies of the Government in Pretoria have finally made sanctions unavoidable.
Will the Government now take steps to protect Britain's national interest and international responsibilities? At the EEC summit tomorrow, will the Government finally take a lead in abandoning their role as the last supporters of apartheid in the world, and instead put the maximum pressure on South Africa in order to prevent the bloodshed predicted by the Eminent Persons Group? If the Minister needs guidance at this difficult time in her dealings with the ANC, will she look to the bankers and business men, who also met Mr. Tambo yesterday, and will she reject with contempt the isolated, unrepresentative voices from the past which may come from the Benches behind her?
Mrs. Chalker: Our meeting yesterday was a further step in our efforts to promote dialogue and a suspension of violence, following the official-level contacts which took place in February, and subsequently. It is generally held that the African National Congress represents a large number of black voices but not exclusively. I shall quote what Mr. Nelson Mandela said to Mrs. Helen Suzman on 5 May:
"All groups across the political spectrum, including Chief Buthelezi's Inkatha, should be involved in negotiations for a new South Africa."
We cannot disagree with that sensible comment.
The hon. Gentleman asked for meaningful action. The European Council meets tomorrow and on Friday. My right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign and Commonwealth Secretary will have in mind all the possible meaningful
322
action that might need to be taken. We are concerned about British interests—of course we are—but we also want to bring an end to violence and make a real start to dialogue and negotiations. We shall have no hesitation in leading the way, in the most effective way possible, to bring about an end to apartheid.
Mr. Julian Amery: Does my hon. Friend agree that, while the ANC undoubtedly represents an important section of black African opinion in South Africa, it by no means represents the whole of that opinion, and perhaps not even a majority? Does my hon. Friend appreciate that her meeting with Mr. Tambo could have given the impression to moderate Africans, who are not pro-apartheid but are anti-ANC, that the British Government are coming down firmly in favour of regarding the ANC as the principal negotiating partner with whom Mr. Botha should be doing business? Will she take this opportunity to make it clear that we do not regard the ANC as the principal negotiating partner, but only one of many?
Mrs. Chalker: I can reassure my right hon. Friend that the African National Congress is indeed one of many. It is impossible to say exactly whether it represents the majority of black opinion, but as I said a few moments ago, it is clear that ANC leaders believe that other voices should also be heard in a dialogue between all peoples.
I do not think that the meeting that I held yesterday on behalf of Her Majesty's Government will give the wrong impression to other groups because I have always made it clear, as has my right hon. and learned Friend, that the dialogue has to be between all groups. The fact that Mr. Oliver Tambo was in London yesterday was a coincidence, so far as we were concerned, but it was an opportunity to open a dialogue which may be very valuable in bringing an end to violence and in making a start to dialogue and negotiation.
Mr. A. J. Beith: Is the hon. Lady aware that we welcome the meeting and the apparently constructive spirit in which it took place? Is the hon. Lady also willing to meet Dr. Allan Boesak of the United Democratic Front who is coming to, or might even be in, London? When the hon. Lady talks about the suspension of violence, does she realise that most of the violence is by the South African Government, with whom Her Majesty's Government are seeking a dialogue?
Mrs. Chalker: Any suggestions that Ministers should meet various people will be considered on their merits, as they occur and according to the situation at the time. Of course we condemn violence, from wherever it comes, because we firmly believe that no resolution of the awful problems in South Africa can be attained by continuing violence, whether it involves bombings in Durban, the awful bombings yesterday on Johannesburg, which we have condemned, or the earlier bombings on 19 May on Lusaka, Harare and Gaborone. They are all to be deplored.
Mr. Mark Carlisle: Does my hon. Friend accept that many of my right hon. and hon. Friends believe that she was right to see the ANC, as an important voice to be heard at this time? Will she repudiate totally the comment from the Opposition Front Bench that our party is the last supporter of apartheid? Will she remind the Opposition Front Bench that it was this Government

323
who managed to negotiate a settlement in Zimbabwe? Will she assure us that the Government, with our friends in the Commonwealth, will lead in taking any necessary measures to put all possible pressure on the South African Government to ensure the maintenance of the Commonwealth and the fundamental change needed in South Africa?
Mrs. Chalker: I wholeheartedly agree with my right hon. and learned Friend. We shall certainly never be lagging in our condemnation of apartheid. It is true that the settlement at the Lancaster house talks on Zimbabwe, however difficult it was to come by, shows good signs for the long term in bringing about the sort of multiracial society for which so many people in the Conservative party have worked so hard in the past.
Of course we want the Commonwealth to take a lead, and we want to take a lead within the Commonwealth. The most important action is to take effective measures, because to take measures that simply bring greater trouble would do no good, either for the Commonwealth or for this country, and certainly not for the black people of South Africa.
Mr. Tom Clarke: Will the hon. Lady continue to act with the courage that she demonstrated yesterday, and urge the Cabinet to ensure that any possible commission that involves Europe will consider sanctions as well as representations?
Will the hon. Lady deplore the actions of a regime that is obviously so insecure that not only has it cancelled its farcical press conferences but has felt it necessary to do what Mr. Gorbachev did not do — steal the shadow Foreign Secretary's camera?
Mrs. Chalker: I was not aware of the last violation of law that the hon. Gentleman mentioned.
Members of the Cabinet and my right hon. Friend the Prime Minister will go with an open mind and considerable information to the European Council, to our colleagues the leaders of the economic Seven and to the Commonwealth review Meeting to discuss in what effective way we can bring about a change of attitude by the South African Government.
Of course we deplore the actions of a regime that institutes a state of emergency with 180-day detentions. We have done that throughout, and we shall continue to do so. Representations are today being made to the South African Government, both in Pretoria and in London, about the state of emergency, the arrests and the detention without trial.
Sir Peter Emery: When carrying through Government policy after the interview yesterday, will my hon. Friend try to ensure that the Government do not find themselves isolated either from the Commonwealth or from the EEC in being unwilling to take the lead in positive action to show that we absolutely condemn the racist and repressive measures of the South African Government? We should be in the lead, not following.
Mrs. Chalker: I am grateful to my hon. Friend for what he has said. I shall draw his remarks to the attention of my right hon. and learned Friend the Foreign Secretary and of my right hon. Friend the Prime Minister.
Mr. Guy Barnett: Does the hon. Lady appreciate that violence by black South Africans cannot and will not be suspended until Nelson Mandela is released, and that peaceful negotiations cannot and will not begin until that happens?
Mrs. Chalker: The hon. Gentleman knows only too well that we have repeatedly called for the unconditional release of Nelson Mandela and other detainees, because we believe that that would release a man who could lead not only moderate opinion but some of those whose actions have become out of hand and who are under the control of no one. We hope that there will be an early unconditional release of Nelson Mandela and others like him.
Mr. Cyril D. Townsend: Should not the Foreign Office be congratulated on the timing of this cautious preliminary contact? Will my hon. Friend remind the House of the number of other European countries that have made similar contacts with the ANC? Is it not especially farcical to compare the position in South Africa with that in Northern Ireland?
Mrs. Chalker: My hon. Friend is absolutely right to say that it is wrong to compare the position in South Africa with that in Northern Ireland, where there is a universal franchise. The same position simply does not exist.
Whatever contacts each country of the European Community — or, indeed, the Commonwealth — is seeking, they must be carried out in the manner that is most effective in bringing an end to apartheid.
Mr. Martin Flannery: Is it not a fact that, where there is no democracy and there is brutal and terrible repression of the majority of the people on a racialist basis, the majority are bound at some stage to fight back and to use violence? Is it not also a fact that the real violence, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, was the state visit of Mr. Botha here, who was welcomed here not long ago by the Prime Minister against the wishes of the people? The Opposition welcome the discussions that the Minister has had with Mr. Tambo, but it is not sufficient merely to sympathise. We want economic sanctions imposed against South Africa to help the people of that country towards freedom.
Mrs. Chalker: I should remind the hon. Gentleman that only yesterday the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said:
"I am grateful and flattered by the Prime Minister's interest … does she understand that the sanctions that will be most effective are not general economic sanctions but financial sanctions?"—[Official Report, 24 June 1986; Vol. 100, c. 177.]
That is the deputy leader of the Labour party. We understand the frustration of many people in South Africa, both black and white, but violence will not solve the problems of that country. An end to apartheid, however, will do a great deal to bring violence to an end. I remind the hon. Gentleman that dialogue means more than talking when suitable opportunities may occur to someone like Mr. Oliver Tambo; it means talking so as to influence the South African Government.
Mr. Anthony Nelson: Will my hon. Friend explain why, if it is wrong to receive the PLO because it refuses to eschew terrorism and violence, it was right to receive the ANC, which openly espouses such action?
Mrs. Chalker: Our official-level contacts and my meetings yesterday constitute an attempt which Her Majesty's Government believe should be made to try to bring an end to violence and a start to dialogue. The contacts that have occurred in the past involving the middle east and the links that have been established are to that very same end, which is to bring an end to violence.
Mr. Dave Nellist: In the representations that have been made today by the Government to the South African Government in Pretoria and elsewhere, what reference was made to the 115 key trade union leaders, ranging from shop stewards to general secretaries, who are part of the 3,000 who have been arrested and detained in the past 10 days? Many of these trade union leaders represent workers in the subsidiaries of British firms. What representations were made to secure their release? Or are the profits that come from the £12,000 million investment of British companies in South Africa more important than the rights of workers in that country?
Mrs. Chalker: As far as I am aware, the representations are being made at this very moment in London and Pretoria. Representations are being made on behalf of all
326
those who, under the state of emergency, have been arrested and detained, whether they be trade union leaders, church leaders, innocent churchgoers or anyone else.
Mr. Jerry Wiggin: Will my hon. Friend accept that she failed totally to answer the question of my hon. Friend the Member for Chichester (Mr. Nelson)? Do we now take it that the British Government will treat with terrorists?
Mrs. Chalker: As my hon. Friends have often said, we seek to promote dialogue to achieve negotiation. A man who certainly impressed yesterday with his total dislike of violence may indeed be able to help in that process towards dialogue and an end to violence. I have to say to my hon. Friend that I spent over half the time yesterday talking about the negative effects of violence and seeking not just to persuade but also to impress upon Mr. Tambo exactly how this, as well as any other violence, was exacerbating the situation. I believe that it was right to do so on behalf of Her Majesty's Government. We are in no way treating with terrorists. We are trying to solve a problem which the House believes has continued for far too long, and not trying to exacerbate it.

Opposition Day
  17TH ALLOTTED DAY

    Unemployed People (Mortgage Interest)
    Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
    3.50 pm
    Mr. Michael Meacher: I beg to move, That this House condemns the Government's proposal to halve mortgage interest cover for the unemployed and others for the first six months of supplementary benefit, which will sharply increase mortgage arrears leading to evictions and undermine home ownership by discouraging building societies from lending to low earners; and calls on the Government to withdraw this proposal in the interests of a policy for the family which guarantees security of tenure of the family home.
    Recently, the Prime Minister trumpeted, again, her belief in a policy for the family. It is difficult to think of any policy more damaging to the family than that which threatens it with the loss of its home, yet that is exactly the effect of the Government's intention to halve mortgage interest payments for the unemployed for the first six months of supplementary benefit. It will sentence thousands to rising mortgage arrears and evictions as a penalty for being unemployed.
    Instead of concentrating help on those in greatest need, as the Government claim is the object of their social security policies, the measure will concentrate maximum harm precisely at the point when people need help most— when people, through no fault of their own, lose their job. Contrary to everything that the Government claim they stand for, it will undermine home ownership by discouraging building societies from lending to those on lower incomes, and it will be the final nail in the coffin that ditches thousands who exercise their right to buy.
    The Government seek to justify all that on two grounds. First, they say that the cost of mortgage interest payments to supplementary benefit claimants has risen rapidly to too high a level. That is due partly to the spread of home ownership which the Government have encouraged and is partly due to higher house prices, for which claimants can hardly be held responsible.
    The truth is that more is being spent because there are more claimants, especially more unemployed claimants, and their needs are greater because house prices have risen much faster than inflation. That is not a reason for denying people such help.
    The Government's second pretext for the measure is that the help given is so generous that people are better off out of work. That result is arrived at, I submit, by the use of figures so studiously contrived that the Government are implicitly admitting the implausibility of their case.
    The Government, according to their note supplied to the Social Security Advisory Committee, took the example of a £16,000 mortgage, which they say is the average mortgage for a two-child family, and related it to a family on low earnings—£80 to £120 a week. Virtually nobody on earnings as low as that would have a mortgage of £16,000. It is only that thoroughly implausible combination which yields the conclusion which the Government are so determined to fabricate—that a man buying a
    328
    house is better off out of work than in work. It is clear, to anyone who thinks about it for more than a moment, that the Government's figures and their conclusion are completely unreal.
    Even if the work incentive argument had some force for unemployed claimants, it would be wholly irrelevant in almost half the cases. That is because a large number of owner-occupiers on supplementary benefit are not unemployed — they are pensioners or lone parents. In 1982, only 60 per cent. of owner occupiers claiming supplementary benefit were available for work. For the other 40 per cent., the discouragement to work argument, which is so precious to the Prime Minister, is irrelevant. I am well aware, of course, that the Government have tried to meet that objection by exempting pensioners from their proposals. But what about single parents and sick and disabled people? Are they to be sacrificed in the interests of the Prime Minister's obsession with the "why work" syndrome?
    I put it to the House that the Government's case does not stand up to examination. The central principle called in aid by the Prime Minister in defence of this proposal in her letter to my right hon. Friend the Leader of the Opposition — it is repeated in the Government's amendment to our motion — points in precisely the opposite direction. In her letter, the right hon. Lady said:
    "The aim of the main proposal … is to strike a fair and reasonable balance between the borrower, the lender and the taxpayer."
    Is it striking a fair balance for the Government to save £30 million by cutting mortgage interest payments to the poorest people on supplementary benefit, while at the same time paying out £370 million in mortgage tax relief to the top earners on more than £30,000 a year? Is it striking a fair balance to select for cuts in mortgage interest payments the 90,000 households — the Government's figure—in poverty who are struggling to buy a house while, at the same time, those households getting mortgage interest tax relief at the top rate of 60 per cent., who also happen to number 90,000 households, are left to enjoy their privileges untouched? Far from striking a fair balance, I submit that these proposals will produce grotesque unfairness between those in desperate need facing eviction and those on the highest incomes who cream off ever bigger tax perks every year.
    Like several other measures in the Social Security Bill, this proposal is almost universally condemned. A Child Poverty Action Group survey of the responses of 60 key organisations to the Green Paper found no support for the proposal, even from the Institute of Directors, which is well known for its support for the Government on almost everything else. The National Consumer Council in its booklet entitled "Behind with the Mortgage", which was published last year, states:
    "The safety net provided by mortgage interest payments to those owners faced with unemployment or relationship breakdown is crucial in avoiding repossession and homelessness during the early stages of default when financial problems may escalate to such a level that it becomes impossible to recover from them."
    The Building Societies Association, which is the body most concerned about this —it is very concerned—declared in last year's report entitled "Mortgage Repayment Difficulties" that cuts in supplementary benefit would lead
    "to a much greater increase in arrears and repossessions."
    The Institute of Housing, in its response to the Green Paper, asks that

    329
    "assistance with interest payments be continued at the same level for the meantime."
    Referring to one of the other points which Ministers have used to mitigate the damage done by the proposal, the institute went on to say that it:
    "considers it unlikely that mortgage insurance arrangements, in their present form and premium level, could fill the gap provided by supplementary benefit for either the long-term unemployed or low-income owner-occupiers."
    The matter has been referred to the Social Security Advisory Committee, the Government's advisory body, but I think that we already well know its views. It stated:
    "We do not think a scheme of this kind could be justified at all, unless the building societies and other mortgage lending bodies were prepared to give comprehensive assurances about the availability of rescheduling."
    Of course, no such assurances have been given, and it is unlikely that they will be.
    By far the most telling of all, in my view, is the report of the Department's own policy inspectorate which does not support the Government's case. Out of a sample of 330 claimants it shows that the average mortgage payment was £72 a month and supplementary benefit cover will now be withdrawn for nearly half that sum. The report is in the Library and many hon. Members may have seen it. However, one in four are paying between £100 and £250 a month. For them, with an average mortgage of about £15,000—if anything, that is a conservative figure—the interest payment is about £34 a week. Therefore, the Government are proposing to cut their weekly income by no less than £17. In the year-long bitter miners' strike the Government docked £17 a week off the miners. The Government are now transferring their vindictiveness to home owners and kicking the most vulnerable of them when they are down.
    Further, there is no doubt that this measure will cause intense hardship. Already the trend for repossession is rising sharply, even before the measure is introduced. In 1979, building societies repossessed 2,500 homes and by last year, the number was seven times that at 16,500. Since, the Government's own admission—
    Mr. Eric S. Heffer: Is my hon. Friend aware — I hope that he will go to Liverpool to see — that there are streets upon streets of houses in Liverpool where two or three years ago there were no "For sale" signs. Increasingly, people are now being faced with having to sell and if they cannot sell they are being faced with eviction. That is a growing trend, especially in an area such as Liverpool with its terribly high level of unemployment. This measure will increase that trend and make it absolutely appalling for the people in those areas.
    Mr. Meacher: My hon. Friend is correct. It is undoubtedly inner-city areas—Liverpool is as hard hit as any—that will bear the brunt of this measure if the Government are unwise and callous enough to put it through.
    By the Government's own admision, 90,000 households will be affected by the latest proposal. Therefore, it must be certain that the rate of repossession and eviction— this is the point of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer)—will double or perhaps increase by even more, to at least 30,000 to 50,000 a year. It is easy in the House to give simple figures of that kind, but those figures conceal an enormous amount of personal misery. I hope that all hon. Members will agree that there is little worse in human experience than being driven from one's own home.
    330
    The fact that that will undoubtedly happen is revealed by the DHSS policy inspectorate's own report. It found that more than a quarter of the claimants in the sample had already been forced to approach the lender for a reduction in their mortgage payments. However, only two thirds had been able to negotiate a reduction, usually for only three months at a time. All those people were asking was to be allowed to pay the whole of their mortgage interest. Imagine what would have happened if they had approached the lenders and said that they wanted to pay only half the interest. Even under the present rules one claimant had been forced to put his home up for sale, and two others were under pressure to do so. Surely, under these proposals, that number is bound to rise dramatically.
    There are other less obvious but no less damaging consequences. If mortgage interest is not met in full for the first six months on benefit but instead the loan is rescheduled at a higher amount once the six months is over, which is what the Government are proposing and hoping, a claimant could well have less incentive to return to work. The rescheduled payment could have risen to a level difficult to manage on low wages, and I believe that there would then be a strong temptation to remain on supplementary benefit until a better paid job came along. I put that to the Government because it is very important to their case.
    There is another irony in the Government's proposal, the whole aim of which is to save £30 million. It may turn out, even in financial terms, to be counter-productive. Mortgage arrears are increasingly a significant cause of homelessness. In 1985, one in every 10 families was homeless owing to mortgage arrears. That is double the figure of four years ago. Since many of those made homeless as a result of mortgage arrears end up in bed and breakfast accommodation—I submit that many of them will— the financial cost to the DHSS could easily turn out to be greater than the £30 million which it is hoped to save.
    From that standpoint, the proposal to restrict mortgage interest payments through supplementary benefit presents a totally false economy, quite apart from the morality of it. I am simply talking here about the financial aspect. If the Government are determined to make savings in this area, a much fairer and more rewarding route would be to restrict mortgage interest tax relief to the standard rate. That would save £250 million, eight times as much as this proposal, without any of its immensely damaging side effects.
    By contrast, this proposal will indirectly press building societies into restricting their lending to those in secure employment. It will discourage lending down market in all cases that are marginal or where people are at risk of unemployment. By the same token, it will also probably threaten the Government's inner-city initiative because building societies will be unwilling to invest in low-cost properties mortgaged with those risks. Furthermore, this proposal will ensure that home owners are treated significantly less generously in future than tenants. It is remarkable that we should have such a proposal from the Government and it is a discrimination which sits extremely oddly with the Government's constantly expressed policy of encouraging owner occupation as the preferred form of tenure.
    If the Government genuinely believe that there is a problem of escalating benefit expenditure on mortgage interest, they should tackle its causes, which are high

    331
    unemployment and high interest rates, rather than its symptoms. What is not acceptable, especially from a Government who like to talk of concentrating help on those in need and from a Prime Minister who likes to talk about a policy for the family, is a proposal which deliberately hits families precisely when they are most vulnerable. That is why we now unreservedly call on the Government to withdraw this proposal in the interests of a genuine policy for the family which guarantees that most priceless asset for all families, security of tenure in the family home.
    4.7 pm
    The Minister for Social Security (Mr. Tony Newton): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
    'congratulates the Government on the success of its policies to encourage home ownership; recognises the need to achieve a proper balance between the responsibilities of the borrower, the lender and the tax payer, and greater fairness as between those on Supplementary Benefit for short periods and those in low paid employment; and notes the proposals to this end that the Government has put forward for consultation to the Social Security Advisory Committee.'.
    I feel bound to comment at the outset that there is something faintly ironic in the sight and sound of the hon. Member for Oldham, West, (Mr. Meacher) appearing today as the homeowners' friend. It is barely a year, if that, since the newspapers were full of stories, to the horror of his right hon. and hone Friends, of his desire completely to abolish mortgage interest tax relief. His dedication to that cause is a byword throughout the country.
    Mr. Meacher: I do not want to intervene but I must if the Minister is going to start his remarks with a deliberate fabrication of that kind. I ask him to withdraw. I never made any such allegation, I do not believe it, and I never said it. I remind him that we are not talking today about whether people are wealthy enough to receive tax relief at a certain level, but about people in desperate poverty and whether aid should be taken away from them, leading to eviction.
    Mr. Newton: All I can say is that the hon. Gentleman succeeded in misleading a large part of the British press and most of his colleagues on his Front Bench by the proposals that he put forward a year or so ago. What is more, it is a matter of clear public knowledge that throughout the past six years the Labour party at national and, more important in this context, local level, has dragged its feet on the sale of council houses and on the increased right to buy that the present Government have ensured. Whatever else may be said about today's debate, the spectacle of the Labour Front Bench seeking to parade as the party of home ownership lacks a good deal of credibility.
    Mr. Robert B. Jones: My hon. Friend does not need to go as far back as the speech made by the hon. Member for Oldham, West (Mr. Meacher). Had he been present in yesterday's debate, he would have heard the hon. Member for Bootle (Mr. Roberts), speaking from the Opposition Front Bench, say that tax relief on mortgages of £12,000 or so was acceptable, but tax relief on mortgages verging on £30,000 was unacceptable, implying what the Labour party would do.
    Mr. Newton: I did not have the privilege of hearing the hon. Member for Bootle (Mr. Roberts), but that would fit with the position that the Labour party adopted at the general election, which was one of hostility to the modest increase that the Conservative Government had made in the size of mortgages that could rank for tax relief. The fact is that the Labour party has consistently opposed almost every practical step that has been taken to encourage home ownership.
    The truth is that we are having this debate today only because the hon. Member for Oldham, West has been frustrated in some of his ambitions in the past. If he had had his way, the people for whom he now claims to speak would not be receiving supplementary benefit for mortgage interest because he would have seen to it that they would never have become home owners in the first place. That is the reality of the position that the hon. Gentleman has sought to create. His appearance today is about as credible as Dracula turning up as a blood donor.
    As I said when we previously debated this proposal, there has been no mystery about the Government's view that this area of the benefits system needed consideration and review, or, indeed, about the Government's thinking on what the conclusion might be. As I reminded the House on the previous occasion when we debated the issue briefly during the passage of the Social Security Bill, the Green Paper published almost exactly a year ago specifically said:
    "The Government intend to discuss with building societies and other interested bodies arrangements whereby less of the burden—particularly for people on benefit for a short time — falls immediately and directly on the social security system."
    That proposition was echoed in the White Paper at the end of last year, in which we said:
    "The Government will continue to discuss with building societies and other major lenders what changes might be appropriate, including the possibility of a limit on the proportion of mortgage interest which would be met during an initial period in receipt of benefit."
    My right hon. Friend the Secretary of State referred to the same matter when he gave evidence to the Select Committee on Social Services in January. It was raised in Committee on the Social Security Bill, a fact that the hon. Member for Oldham, West appeared to have forgotten on the last occasion when he spoke about the matter. The hon. Member for Derby, South (Mrs. Beckett) asked me about it, and again I specifically set out the nature and direction of our thinking.
    What is more, far from seeking to disguise the fact that we felt that that area needed examination and what sort of examination we were undertaking, we took specific steps to amend the leaflets which, under the right-to-buy legislation, go to those inquiring about their right to buy. We amended the leaflet to draw specific attention to the fact that the Government had made the proposal. It was amended last year, to draw attention to what had been in the Green Paper. Indeed, an addendum note was added to it after the White Paper, to make it absolutely clear what the Government's thinking was.
    Therefore, I refute any suggestion of the sort that has been made, to the effect that the Government have proceeded in a stealthy or underhand way. We have made our intentions clear to the House. We have made our intentions clear to those considering buying their property under the right-to-buy legislation. We are now proceeding in an absolutely normal, above board and straightforward

    333
    way to put forward proposals for public consultation to the Social Security Advisory Committee. Of course, we shall consider its view.
    Mr. Anthony Beaumont-Dark: My view on this potential Bill is well known—I think that it is somewhat less than satisfactory. As I understood it, many of us complained at the time that the social security payments going to people were not being used for the purposes for which the money was being given. They were being used for something else. If the money goes directly to a building society or the person who holds the mortgage, that is common sense because it stops people being dispossessed of their homes. Will my hon. Friend explain to some of us who are somewhat unhappy how he thinks it helps to add to people's worries at their most vulnerable time—their first six months of unemployment, which must be appalling? How can one explain to them that there is not a lack of generosity of spirit in the proposal, which is not what I would call good Conservatism?
    Mr. Newton: I shall come directly to my hon. Friend's point, which is about the fairness of the system, and the balance between the claims of different claimants in the system — in this case, according to the time that they have been on benefit. However, I should like to make it clear that that issue is separate from that of whether this or any other part of the benefit system is abused. Abuse might occur within the present or future rules. That might happen because it is just as possible that half the interest will not get passed on as that the whole of the interest was not passed on. That problem needs to be addressed. However, that is separate from the broader issues that my hon. Friend has raised, to which I shall come in a moment.
    Mr. Robin Maxwell-Hyslop: My hon. Friend referred to the amended leaflet. Is it or is it not the Government's intention to renege on the undertaking given in the unamended leaflet to people who bought their homes, that if they received unemployment or supplementary benefit, the interest would be paid? Is it or is it not the Government's intention to renege on that undertaking, given in writing in the leaflet, on the basis of which people entered into commitments which otherwise they might not have entered into?
    Mr. Newton: I appreciate the implication of my hon. Friend's question, but it seems to me that, as with any leaflet describing the benefits system, such a leaflet can be taken only as a description of the position at the time when it is published. I think that that is commonly understood.
    I note my hon. Friend's point, and I was aware of his concern. I ask him to consider that the implication of his question, if carried to its logical conclusion, would go far wider than the specific issue of whether this part of the benfit system should be changed. In the situation that my hon. Friend adumbrated, a person's entitlement to supplementary benefit could be affected by a variety of changes. For example, the substantial increase in invalidity benefit that the Government made at the social security uprating before last, in November 1984, took many long-term sick and disabled people out of supplementary benefit because it increased their invalidity benefit. On the logic that my hon. Friend has been putting forward, that, too, could be construed as a change affecting their entitlement to the full payment of mortgage interest.
    Ms. Clare Short: No one would claim to have been misled if a change is made from which he gains.
    Mr. Newton: The basic fact is that, to be entitled to benefit for mortgage interest, one has to be on supplementary benefit. Therefore, the logic of my hon. Friend's implied position is that anything that changes the potential entitlement to supplementary benefit of someone buying his own house is to be treated in the way he has suggested. At the very least, I ask my hon. Friend to take account of that position, but above all I ask him to take account of the fact that leaflets, whether about the right to buy or describing the social security benefits system, can be taken only as a description of the position at the time when they are published.
    Let me now refer to the proposals. I should like to clear one thing out of the way before I come to the proposal that is the main focus of the debate. I should make it clear that there are several other proposals in the draft regulations that have been put to the Social Security Advisory Committee, of which the House should be reminded. Two of these proposals are designed to be beneficial to claimants and I hope that they will be welcomed by the House in that respect.
    The first is designed to ensure that a loan taken out to repay an earlier advance used to acquire an interest in a home or to carry out essential repairs or improvements to it will be eligible for benefit on the same basis as an original loan. That is entirely beneficial and I assume that Opposition Members and others will welcome that.
    The second proposal is for a special disregard of income from mortgage protection policies to meet the balance of mortgage payments. That is a sensible and beneficial provision which must be considered in the context of the main proposal and which I am sure that the House will welcome.
    There are also two other smaller proposals designed to allow greater scope to tighten up on the extent to which the benefits system helps to meet payments on loans taken out for business purposes or payments on very expensive or large homes with a high mortgage. It was implicit in the remarks made by the hon. Member for Oldham, West that it is reasonable—whatever else we may disagree about—to impose limits on a system which is primarily intended to help protect an individual's interest in the home in which he or she lives.
    Mr. Max Madden: The Minister has referred to the Social Security Bill and the Government's thinking on certain aspects of the Bill. Bearing in mind the defeat that the Government suffered on the Bill in another place, and accepting the great anxiety of many people who would be adversely affected by the Bill if it is enacted, will the Minister take this opportunity to explain the Government's intentions about the proposals?
    Mr. Newton: I am glad to see that you are smiling, Mr. Deputy Speaker. You will no doubt respond generously to my immediate evasion of the hon. Gentleman's request as that would take us well beyond the rules of order in the context of this debate.
    I am happy to tell the House that the Government were not defeated in another place on the proposal that we are discussing today. This proposal was brought in in another

    335
    place by a side wind. The proposal was not contained in the Social Security Bill as originaly drafted. It was introduced by a side wind.
    Ms. Clare Short: What is a side wind?
    Mr. Newton: That is an amendment that dragged the proposal into the context of discussion on the Bill. Their Lordships kindly did not press the matter to a vote and we were not defeated on the issue. I will not comment further on the other points raised by the hon. Member for Bradford, West (Mr. Madden).
    Mr. Frank Field: Why not?
    Mr. Newton: I will not comment on them because to do so would be out of order.
    I would now like to consider the principal proposal and the points of concern expressed by Opposition Members and by one or two of my hon. Friends. The main proposal, as the House is aware, is to limit the amount of supplementary benefit payable for mortgage interest to 50 per cent. of the total for the first six months on benefit for everyone under 60 years of age. The hon. Member for Oldham, West rightly acknowledged that that does not apply to people over pensionable age or to those slightly under pensionable age in respect of men.
    Some people might have been led to believe, by the controversy that attended the matter when the proposal was announced, that we proposed to abolish supplementary payments for mortgage interest. Quite apart from the issue affecting those aged over 60, it is important to understand the limited nature of the proposals. They fully protect those whose claims continue beyond six months and they do not affect those over 60. Our estimate, as the hon. Member for Oldham, West has acknowledged, is that the proposals affect about one fifth of the expenditure in that area — £30 million out of a total of £150 million. They will affect some 90,000 claimants at any one time. The figure of £30 million compares with £9,000 million which is paid to building societies in mortgage interest. The 90,000 figure must be considered against the 6 million borrowers.
    We have made it clear that when a claim lasts more than six months, mortgage interest would be met in full. Moreover, where the limitation has caused arrears and these are capitalised into a higher outstanding loan, the extra interest on the higher loan would also be met. That is specifically designed to protect the position of those whose claim does not turn out to be short term.
    I must stress to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) that, despite the numbers of people who, unhappily, are unemployed for longer periods, most spells of unemployment, even now, are relatively short. Approximately one quarter of the people who become unemployed leave the register within four weeks. Half leave it within three months and two thirds within six months.
    Mr. Beaumont-Dark: My hon. Friend continues to raise more worries as to why the hell we are messing with this matter. If, on my hon. Friend's figures, most people are unemployed for only a short time, two thirds for this much time and one third for that much time, we seem to be causing a lot of misery, woe and concern for peanuts. Why are we doing that? I suggest that my hon. Friend should say little and try to get the proposals through.
    Mr. Newton: I hope that my hon. Friend will not dismiss the point that I was trying to make, especially as the hon. Member for Oldham, West specifically said that in some cases these payments can amount to significant sums of money and run into hundreds of pounds a month. In fact, people would probably lose tax relief as a result of the hon. Gentleman's proposal. It is legitimate to ask whether mortgage payments for people with large mortgages and in normally well-paid jobs, who may simply be between jobs or unemployed for a short period, should be completely picked up on supplementary benefit from day one—
    Mr. Frank Field rose—
    Mr. Newton:—and paid for through the tax system by many people whose income over the year will be significantly less than those to whom the supplementary benefit payments are being made. An issue of equity is involved, especially when we consider people with large mortgages who are out of work for short periods. I hope that my hon. Friend the Member for Selly Oak will not dismiss that point.
    Mr. Field: I am grateful to the Minister for giving way after he has drawn our attention to the reasons why the House should not support those people who are unemployed and who probably vote Tory rather than for any other party. Is not the Minister misleading the House when he suggests that these unemployed people immediately become eligible for supplementary benefit? Many people do not become eligible for supplementary benefit for a long time. It is not a case of people with large mortgage payments opting out of jobs and opting on to benefit. These people will have suffered a considerable drop of income over a long period of time before they receive benefit.
    Mr. Newton: That may be true in some cases but not in as many as I suspect the hon. Gentleman may think. It will, of course, depend on the amount of capital the person possesses and that may rule him out of supplementary benefit.
    I am sure that the hon. Member for Birkenhead (Mr. Field), with his expertise, would agree that if someone—albeit with a large income but who may conceivably have mortgaged himself to a high level and does not have much capital—unhappily falls into this position, the existence of the large mortgage is likely to bring him immediately on to supplementary benefit. If he has a mortgage payment of £200 or £250 a month, his supplementary benefit entitlement would be some £250 and £300 a month or possibly more if he has two or three children. In those circumstances it is unlikely that any other entitlement to income would rule him out of supplementary benefit. He may well get immediate payment of supplementary benefit for mortgage interest from the outset because of the sheer size of the mortgage.
    Mr. Field: What the Minister says is true, but he still needs to explain to the House why the Government are bringing in a measure that will hit their supporters more than any others.
    Mr. Newton: The Government have made it clear that one of their concerns is to ensure fairness between groups within the benefits system and especially for those who are in low-paid employment, but not in the benefits system. In addition, we are anxious to focus the available resources

    337
    as effectively as possible on those who most clearly need help. That is the context in which our proposal is put forward.
    Mr. Keith Raffan: My hon. Friend must accept that the Government's proposal will increase anxiety among the unemployed. It must do so. Even if, as my hon. Friend rightly said, most people are unemployed for a relatively short period, they do not know that they will be unemployed for only a short time. In two towns in my constituency where 41 per cent. of the men are unemployed, the Government's proposal is increasing anxiety enormously. Even if people want to sell their homes, they cannot do so because there is no market for them. There are at least half a dozen families in my constituency where the fathers commute 300 or 400 miles during the week to get jobs, while supporting their homes in my constituency. There is no way that my hon. Friend can get away from the fact that the Government's proposal will increase anxiety.
    Mr. Newton: I recognise the force with which my hon. Friend speaks and we shall take account of his anxieties alongside the considerations that I am putting forward. I must ask him to bear in mind that mortgage payments can also be a source of anxiety to those in relatively low-paid employment, who will often be paying the taxes to meet the needs on which my hon. Friend focused.
    It is right for the Government to consider the balance between the various considerations, and that is precisely what we are seeking to do. We think that it is appropriate to strike a balance—
    Ms. Clare Short: Will the hon. Gentleman give way?
    Mr. Newton: Yes, but I had better not give way too often, because I am sure that a number of hon. Friends wish to take part in this debate.
    Ms. Short: I am grateful to the hon. Gentleman. He must know that low-paid workers are most vulnerable to unemployment and intermittent spells of unemployment. The Government's proposal will hit those people. Will the Minister please not talk about people with massive mortgages? Such people are usually wealthy and will often have savings. They will not be hit. The low-paid struggling to keep out of unemployment — possibly going in and out of unemployment—will be worried, frightened and hurt by the Government's proposal.
    Mr. Newton: That group can find that they are worse off being in low-paid employment than being on benefit. The linking rule proposals accept that there is a problem about people who are in work for short periods. We have sought to ensure in the draft regulations that they will not be disadvantaged.
    We are seeking to strike a balance between a variety of considerations, including the amount of help that borrowers can legitimately expect to receive from the benefits system in securing a capital asset that will normally grow in value, the guarantee that a lender should expect from the benefits system in protecting the loan that he advances and what it is reasonable to expect the taxpayer to bear.
    We have sought a balance that takes account of what is reasonable and sustainable for the borrower. The latest estimate of the average payment of supplementary benefit for the first six months on benefit is £16 per week. On that basis, the average amount to be paid on an outstanding
    338
    mortgage if a claim lasted for the full six months—as I said, many will not — would be about £200, which hardly merits the sort of language used by the hon. Member for Oldham, West.
    I am sorry that my hon. Friend the Member for Selly Oak has temporarily left his place, because I wanted to tell him that another consideration is equity between home owners who are out of work and can receive full payment of mortgage interest from the first day on benefit and home owners in work, but on low incomes that may not be much above the benefits that they would receive if they were out of work.
    The hon. Member for Oldham, West raised a number of issues in connection with the figures that we put to the Social Security Advisory Committee. I do not think that the hon. Gentleman questioned the validity of the figures, which clearly show that working families with a £16,000 mortgage, which is the average loan outstanding for such families, have an income while out of work that is appreciably higher than their income while in work if they are in the earnings range of £80 to £120 a week. As to whether those families are representative—a point raised by the hon. Member for Oldham, West—the available data show that there were 130,000 working families — with children—who have mortgages of over £10,000 and earnings below £150 a week. Of those families, 30,000 had mortgages of over £20,000. The problem of equity cannot be dismissed as a trivial one.
    We also provided data for families with a £10,000 mortgage and they showed that for the earnings range £80 to £120 a week, income from supplementary benefit was very close to income from work. Whatever else Opposition Members say, I hope that they will recognise that a problem exists.
    Alongside our proposals and some of the considerations that led the Government to put those proposals before the SSAC, I have tried to put to the House the view that anyone concerned with the equity of the benefits system and the balance of demands made on the taxpayer and on those receiving benefits must address a range of questions.
    There are questions to be asked about whether it is reasonable that the taxpayer should pick up the whole of the bill for purchasing an appreciating capital asset from the first day on benefit, even for what may be very short periods and when many of those paying the bills may be little or no better off than those whose bills are being paid.
    Mr. Nick Raynsford: Will the hon. Gentleman give way?
    Mr. Newton: No. I have given way enough.
    There are questions about whether it is right that lenders should expect or be given the guarantee that this part of the benefits system implies and about whether we should maintain a system that can undoubtedly contribute significantly to the unemployment trap, which all of us agree should be tackled. We must also ask how far such expenditure can be seen as a proper priority at a time when there are so many other pressing demands.
    I say no more to the House than that those are problems which can and should be addressed within our overall plans for social security, which seek to make the system fairer between those who are in work and those who are out of work, to tackle the unemployment trap and, above all, to ensure that the huge resources devoted

    339
    to social security are channelled as effectively as possible to those who most clearly need the help that the taxpayer can and should provide.
    Our proposals seek to address those problems. They have been put forward for consultation in the normal way and we shall, of course, consider the outcome of that consultation carefully and fully before coming to any final conclusions. We shall also consider what is said in the debate. In that spirit, I invite the House to reject the motion and endorse the Government's amendment.
    4.38 pm
    Mr. Gordon Oakes: I am one of the two Opposition Members who are vice-presidents of the Building Societies Association. It is not a financial interest, but merely an honorary job, and I would have mentioned it only in passing if the Minister had not tried to cover up one of the weakest cases that I have ever heard presented to the House by making an aggressive attack on my hon. Friend the Member for Oldham, West (Mr. Meacher) and the Labour party.
    The building societies movement, started largely in the north of England, came from the pennies of the poor. It was a working-class movement of people who tried to buy their own houses to save themselves from being ground down by landlords. The Tory party tried to hijack the owner-occupier from the building societies. The Government's proposals show the House, the owner-occupier and the public just how thin is their real love of the owner-occupier.
    This takes me back to my childhood. My father bought his house, but my father-in-law, who worked in the same factory, steadfastly refused to buy his house. He could have afforded it, because he had more money than my father. He was a plumber, whereas my father was a labourer and a chargehand. My father-in-law would not buy his house because of the fear that if he lost his job he would be unable to keep up the mortgage repayments. Because of his fear, he lived instead in a council house. The Government are bringing back that fear.
    I am appalled by how little the Minister understands the psychology of somebody who suddenly finds that he is out of work. These proposals will attack, not the long-term unemployed, but those who are out of work for the first six months. The hon. Member for Delyn (Mr. Raffan) clearly understands this point. He told his right hon. Friend the Secretary of State for Social Services that when a man becomes unemployed he does not know whether he will ever find work again. If he is lucky, he will be in work again within three or six months. However, he does not know that. He may be out of work for ever. In a constituency such as mine, or the consituency of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), the likelihood is that if a person loses his job he will be out of work for ever.
    Mr. Raffan: Does the right hon. Gentleman agree that this measure discriminates most against those parts of the country that are hardest hit by unemployment? In my constituency a quarter of the labour force have lost their jobs in the last 15 years. These are the people who will be hit the hardest. They know that they will be out of work for at least six months. This measure will break their backs. They are desperately looking for jobs, but there are no jobs for them.
    Mr. Oakes: I am grateful to the hon. Gentleman for what he has said. He is another Member with sense on that side of the House. I hope that he and the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) will prevail upon the Government to drop these stupid proposals.
    The reasons for the proposals have varied. The Green Paper "Reform of Social Security", volume 2, Cmnd. 9518, argued in paragraph 2.92:
    "The government wish to introduce changes in the system to reduce the discouragement for owner-occupiers to return to work that can apply under the present interest payment commitment."
    The Minister did not say that today. The spokesman for the Department of Health and Social Security did not say that either. The reasons that the Department gave were to
    "reduce the inequity in treatment between home owners on benefit and those in work: share responsibility for helping those on benefit with mortgage liabilities between the state and the borrowers, and lending organisations; reduce the burden on the taxpayer; not affect long-term pensioners".
    The Minister does not dare to say that the proposals will discourage owner-occupiers from returning to work, but that is precisely what they will do. If a home owner becomes unemployed because of the Government's policies, after six months the Government's darling is no longer loved. The home owner becomes a feckless individual who will not go back to work because he wants the state to pay his mortgage. That is precisely what the Government are saying in these proposals.
    The Minister referred to the inequity between a person in work who is paying a mortgage and a person who, through no fault of his own, loses his job and is on the dole. I repeat that the most vulnerable time when he is on the dole is the first few weeks. His whole world collapses and he finds that he may also lose his home. The Building Societies Association and individual building societies say —the hon. Member for Delyn will appreciate this point — that when people become unemployed the vast majority of them will starve rather than reduce their mortgage commitments. They pay their mortgages up to the hilt and hope that their building societies never find out that they have lost their jobs. They are ashamed to be out of work. Above all else, they will try to keep a roof over their heads. The same is true of council tenants. Above all other expenses, they will pay their rent. That is an ordinary, working-class concept which the Minister probably does not appreciate.
    I have already mentioned that the Minister referred to inequity. Let me therefore consider two semi-detached houses on a council estate. In one of the semi-detached houses there is an owner-occupier. He has been led—or misled—by the Government into buying his house. Next door, there is a local authority tenant. If the Minister is looking for inequity, he can find it there. The owner-occupier finds that, for the first six months, half his mortgage interest cover disappears at a stroke. However, the council house tenant next door does not find that half of the rent is taken away from his supplementary benefit.
    I hesitate to push the anomaly too far. Knowing this Government, their next step will be to cut by half their payment of rent to council tenants who are on supplementary benefit. That is a glaring inequity. The owner-occupier will say to the Government — a Government who are proud of the fact that they introduced the right of ownership — "The chap next

    341
    door was right. He is better off than I am. I was a fool to buy this house and to listen to you. Where do I stand now?"
    The inequity goes much further than the full payment of rent. I understand that the amount that the DHSS allows a person who is on supplementary benefit for the maintenance of the insurance premiums on his home is £1·85 a week. The average cost, taking into account both maintenance and insurance, is at least £6 a week. Therefore, he is worse off even without this measure, which will reduce the amount of money that he receives.
    I speak, not on the behalf of the association, but as a vice-president of the Building Societies Association. I deplore the cynical way in which the Government intend to halve mortgage interest cover for the first six months. They know perfectly well that building societies are mutual institutions and that they are also caring institutions, They care about their borrowers. If payments are missed for a few months because somebody is ill or out of work, all he needs to do is to tell his building society, and in 99 per cent. of cases the building society will look after him and say that it is a temporary lapse.
    If the borrowers cannot meet their interest payments during the first six months, the Government hope that the building societies will carry them. They hope that the building societies will pick up the tab for the Department of Health and Social Security. I think that the building societies will do just that. However, it is both unjust and inequitable. It is inequitable because building societies are not companies. They are mutual institutions. Having picked up the tab, the building societies will pass it on to other borrowers and to investors. However, it gets the DHSS off the hook.
    I thought that the Minister was going to say that people should insure against redundancy. I am glad that he did not do so. It is possible to insure against redundancy, but the problem is that those who insure against redundancy feel almost certain that they will never become redundant. The vast majority of borrowers do not take out that kind of cover. If a section of the community were to insure against redundancy, and they were almost certain to benefit from it, the premiums would be impossibly high and the ordinary borrower would be unable to afford to take out insurance against redundancy.
    Mrs. Edwina Currie: Is the right hon. Gentleman aware that at least one of the policies of that kind that I have seen offers insurance against redundancy for up for two years? It costs only £39, irrespective of the size of the mortgage, and covers the whole of that two-year period.
    Mr. Oakes: As the hon. Lady says, that is for a two-year period. A person who is taking on a mortgage and who takes out insurance usually takes out health and redundancy insurance. The insurance companies encourage people to take out health insurance as well. The hon. Lady said it costs £39 for two-year cover, but the vast majority of people do not take out such insurance and are unlikely to do it unless they feel that they are likely to become victims of unemployment.
    The country at large believes that the Government have introduced this measure largely out of spite because of the way in which building societies behaved during the miners' strike. Miners are good customers of building societies. They are respected by the societies, and when the building
    342
    societies knew that the miners were in a temporary difficulty they looked after them during the difficult period of the strike. I think that because of that the societies incurred the wrath of the Government. Many miners are owner-occupiers, especially in the north of England.
    If the Government really believe that their darling owner-occupiers on whom they have prided themselves in the past are the feckless people that this measure suggests, and that they will not work because the Government are paying their mortgages, a simple remedy is available — treat mortgage interest payments for a person on supplementary benefit in the same way as rent payments are treated. That means direct payment of the interest to the building society by the agreement of the borrower and his building society.
    Mr. Newton: I almost sought to intervene a moment ago, but restrained myself. The right hon. Gentleman missed the point in what he said about the expectations of the building societies in relation to those on benefits. Large numbers of people who may have similar difficulties with their mortgages may not be on supplementary benefit, and the building societies and mutual associations will readily and rightly help such people for the sort of time that we are talking about.
    The right hon. Gentleman went further and praised the building societies for the help that they gave to the miners who were on strike for a long time. Is he saying that it is right for the building societies to be expected to assist people on strike, thereby depriving themselves of income, but entirely wrong to expect them to adopt a similar approach to those who are in difficulty for any other reason?
    Mr. Oakes: The Minister has misunderstood what I said, perhaps maliciously. Building societies are mutual institutions that are owned by their members, and the borrower is just as much a member as the investor. A different relationship exists between a building society borrower and any other sort of debtor. That is because he joined the building society when he became a borrower and is a member of that society.
    If the Minister thinks that people who are unemployed are feckless and likely not to return to work, he could introduce a system of direct payment of interest to building societies in the same way as there is direct payment of rent to local authorities. Many building society borrowers would welcome that. They worry about their mortgages being paid and would voluntarily enter into such an agreement with the DHSS. Many of my constituents ask me whether they should write to the DHSS office about the direct payment of rent. They want to do that so that they can be sure that they will not fall into temptation and get into difficulties with their rent.
    This is a miserable measure, which attacks people when they are most vulnerable. The Government hope that because they are caring associations the building societies will carry the cost. I hope that the Minister will not go ahead with his proposals and that he will listen not only to the Opposition but to the wise words uttered in interventions by his own hon. Friends.
    4.55 pm
    Mr. Gwilym Jones: I welcome the new proposals that my hon. Friend the Minister has described — the proposals that cover further advances and

    343
    mortgage protection policies. If it is necessary, I declare my interest as a director of an insurance broking company. The disregard for mortgage protection policies will be most useful. I have been kind so far, but I am afraid that I may not be so kind hereafter.
    I should like to make three points about the Government's proposals. First, if the motive behind these proposals is simply the achievement of an economy I am totally opposed to them, because that reason alone would not be justification for the proposals. The figure that has been suggested is £30 million, but that theoretical projection is unlikely to be achieved, for reasons I shall give in a moment. I am just as anxious about what I would describe as the psychological effect of these proposals as about their practical effects—in exactly the way that my hon. Friend the Member for Delyn (Mr. Raffan) described the matter in his first intervention, when he spoke about the anxiety of unemployment.
    My hon. Friend the Minister is right to be apprehensive about any disincentive to return to work in the existing arrangements. He pointed to the relatively favourable position of people on benefit when they were compared especially to low-income families that were in work. My own apprehensions are about exactly that effect being achieved by the proposals. It is possible for the scope of these proposed changes easily to be exaggerated —usually for political reasons, as happened during the speech by the hon. Member for Oldham, West (Mr. Meacher).
    The proposals provide for a 50 per cent. reduction in the first six months; thereafter, interest payments will be met in full. I see that change during and after six months providing a positive incentive for exactly what my hon. Friend the Minister must not want to see. I anticipate that some of those who find themselves in this position will recognise the loss that they are incurring in the first six months on supplementary benefit and will be encouraged to prolong unemployment beyond the six months in an attempt to recoup what they initially lost. I am sure that the Minister does not want to see that, any more than any hon. Member would want to see it.
    Worse still, that disincentive to return to employment might become a permanent feeling. I am sure that all hon. Members agree that we ought to offer every encouragement to the spirit of enterprise in people who, through no fault of their own, find themselves out of work.
    I do not want to make any exemptions here, but of all the cases that would be covered, the ones that come most easily to mind are the cases of executive and middle management people and those making their way in careers that have been interrupted too early. In a positive manner we ought to offer them every encouragement for a return to work. We should not do that in a negative fashion but should seek to end the position of such people being a cost to the taxpayer. That is a desirable objective, but equally important is their own contribution to wealth production and the continued regeneration of the economy.
    Mr. Neil Thorne: I accept my hon. Friend's perfectly reasonable concern for those who are unemployed and for the difficulties that they face. I am sure he would also wish to be fair to taxpayers. It would be wrong for the taxpayer to allow an unemployed person to benefit from a capital gain at the taxpayers' expense.
    344
    Does my hon. Friend feel that a fairer way to deal with the matter would be for the person who needs to go to the DHSS for help with payments to agree to an entry being made against his land registry title to the effect that any capital gain acquired should be recouped by the taxpayer when the property is sold?
    Mr. Jones: I am grateful for that intervention. I am aware of the need to be fair to the taxpayer. Nor should we ignore the comparison with people in low-paid work. We should do everything possible to encourage people back into work and to stop them being a cost to the taxpayer, but my hon. Friend's proposition of a notation in the land registry about any capital gain made for the relevant period would be difficult to achieve in theory, let alone in practice. People might try to sell their house in an area in which unemployment is felt heavily, but there may be no sale and no capital gain because others in the area are in the same boat.
    The theoretical savings of £30 million will not necessarily be achieved. The right hon. Member for Halton (Mr. Oakes) spoke about transferring the burden from taxpayers to building societies. The saving will not necessarily be made, because most building societies will try to be as reasonable and helpful as possible to borrowers. It is likely that building societies will accept 50 per cent. of interest payments for the first six months as a matter of course, rolling up the rest of the payment until after that time, when the 50 per cent. saved would have to be picked up by supplementary benefit. The burden on building societies would be thus relieved, with no saving for the taxpayer.
    There might be room for abuse in the present arrangements for supplementary benefit mortgage interest payments. That is less likely to happen when a person is unemployed and has no immediate prospect of employment than when a person is unemployed but has a reasonable certainty of employment before too long. Such a person might take advantage of the supplementary benefit payments to bear mortgage interest payments. Such cases are not likely to be many and the proposal of a six-month period to cover them is excessive. We are taking a sledgehammer to crack a nut.
    I listened to what my hon. Friend the Minister said and I shall listen to the rest of the debate. I cannot promise that I shall be able to support him when the House divides, but we are talking only about proposals in draft. They have not yet received the formal consideration of the Social Security Advisory Committee. If they return to the House in anything like their present form, I would not be able to support them. It would be far better if they did not come back, and never saw the light of day.
    5.4 pm
    Mr. Archy Kirkwood: I agree with much of what the hon. Member for Cardiff, North (Mr. Jones) said. He advanced a potent argument about the psychological, as opposed to the practical, effect of these proposals. He also mentioned the disincentives that they might lead to. He rightly observed that building societies might mitigate the cost of mortgage interest by accepting only 50 per cent. of it for the first six months. His arguments led me to my original conclusion, that, as he said, we are taking a heavy sledgehammer to crack a nut.
    The Minister started by belabouring the official Opposition Front Bench about their attitude to the sale of

    345
    council houses. He rightly observed that the Government are intent on increasing home ownership. That being so, an increase under this Budget heading must have been inevitable. Between 1975 and 1983 expenditure on mortgage interest relief has increased more than seven times and expenditure on supplementary benefit has increased more than four times. What level of expenditure would the Minister countenance as reasonable? There must be an acceptable increase. The Government have to make a judgment about that.
    Mr. Newton: The hon. Gentleman will have noticed that I did not refer to the level of expenditure at all in my speech. I put the weight of the argument on fairness, equity and incentives, which are the real points at issue.
    Mr. Kirkwood: If the Minister tells me that, I accept it, but I suspect that the Treasury saw the increase and obliged DHSS Ministers to make a change.
    The Minister also said that there has been no mystery about how the proposals have been introduced. That is true for the proposal concerning mortgage interest repayments. I might have missed something, but I did not think that, when the proposals were first mooted in the Green Paper and then followed through to the White Paper, they would affect the disabled and single parents. The Minister referred, almost in passing, to the other two changes concerning home loans for business purposes and restrictions on unnecessarily high costs in relation to other housing in the area. I may have missed something, but I believe that neither of those changes saw the light of day until a few days ago. There is therefore an element of mystery.
    The Minister's case was minimalist. The more I listened to it, the more I agreed with the hon. Member for Birmingham, Selly Oak (M r. Beaumont-Dark), who said that the game was not worth the candle in terms of the anxiety caused. In an intervention a moment ago, the Minister said that he is interested in equity. What representations has he had from low-paid workers that this is a monstrous inequity which they want put right? He said that this issue must be addressed. It sounds as though he as been forced, lobbied and pressed heavily by a group of people who consider themselves to be at a disadvantage. Has the Minister had any representations to that effect? I doubt whether he has. If he is interested in the equity argument, the answer is clear and is lying in his hand for him to use if he wishes. As was suggested to the housing benefit review team, he should apply standard housing benefit and extend it to mortgage interest payments to redress positively, not negatively, the question of equity.
    The Minister said that the issue must be addressed. However, as I understand it, the concept of the welfare state is to make provision for unaccountable misfortune and circumstances that cannot be foreseen. A classic example would be people who suddenly and unaccountably lose their jobs. In such circumstances, for the welfare state to withdraw an element of support, as the Government seek to do, would run counter to the provision, thrust and principles of the welfare state.
    This is a sneaky move in so far as the Minister is taking £30 million out of the budget of people who do not know that this may happen to them. It is a soft target, because who knows when he may lose his job or be caught by this provision? It is an easy cut to make because no organised
    346
    lobby will protest against it, apart from Government Back-Bench Members, such as the hon. Members for Delyn (Mr. Raffan), for Selly Oak and for Cardiff, North, who are acutely on the ball in this regard.
    This is a false economy. Have the Government taken into account the increase in housing benefit that will accrue as a result of the changes if arrangements are not entered into with building societies simply to roll over the payments, so that the supplementary benefit system will pick them up after six months? Surely people will be made homeless as a result. If they are made homeless, they will be priority cases for local authority housing, and that would lead straight to housing benefit applications and claims. Does the £30 million that the Government hope to save take into account the increased cost of housing benefit? If not, the Government have got their sums wrong.
    The Minister and the Government generally have made great play of their consultations with the building societies and local authority associations. That was as far as we got in Standing Committee in terms of a positive response from the Government at any stage when the issue was raised. I have yet to see — again, I may have missed them — any results from the consultations that the Government had with the local authority associations or the building societies. I should be interested to read any exchanges, correspondence or minutes of meetings that suggest that any of the organisations were enthusiastic about or warmly endorsed this proposal.
    The Government are making some play of the fact that mortgage protection policies are available to mitigate some of the worst effects of the change. As a practising solicitor before I became a Member of Parliament. I was involved with mortgage protection policies, so I know that they have extremely restricted provisions. Only the larger building societies offer them, and then only in restricted circumstances. The Government should not adduce them as a measure of protection available to people who would otherwise be hit by the proposals.
    I have in the past seen the Minister persuade his Back-Bench Members with an almost impossible brief, but having listened carefully to him today, I think that he has signally, for the first time, failed to a greater extent than at any time during the two years in which I have been watching him.
    5.14 pm
    Mrs. Edwina Currie: I have listened with interest to the comments made by the Opposition. I wonder whether hon. Members realise that it has never been automatic to pay 100 per cent. of mortgage interest. I have examined several Supplementary Benefits Commission reports, and I was interested to find that one of its annual reports drew our attention to the increasing cost of mortgage interest repayments. It stated:
    "Our policy is to regard these outgoings … as reasonable for supplementary benefit purposes if they were reasonable at the time they were entered into. If they were not, the claimant is given at least six months to move."
    That was from the 1979 report, Cmnd. 8033.
    Even the Labour Government were being rotten to mortgage interest claimants on supplementary benefit. Any suggestion that is started to happen, or was proposed, under this Government is nonsense. Those rules have been in operation for a long time.
    Mr. Raynsford: Does the hon. Lady accept that there is a difference between that provision, which remains part of the supplementary benefit scheme ensuring that excessive payments are not made to people who have overextended themselves, and which is a necessary safeguard, and a completely arbitrary cut, irrespective of whether outgoings are reasonable, which is what the Government propose?
    Mrs. Currie: Provided that the hon. Gentleman will accept—I am sure that he made a lot of fuss about it in those days—that the Labour Government did it, too.
    Mrs. Margaret Beckett: That was the Supplementary Benefits Commission—
    Mrs. Currie: I am sure that the hon. Lady will get an opportunity to make her own speech later.
    It is well to remind ourselves, if we may, of the genesis of these proposals. During the year-long miners' strike, striking miners did not qualify for full benefits. They managed very well on the supplementary benefit paid over for their mortgages. The building societies actively cooperated and colluded with them during that time. As a result, the DHSS, not the National Union of Mineworkers, was the main source of finance and support for the families of striking miners, and as a result extensively prolonged the strike.
    My local pitmen were different from those who received such assistance in two ways: first, they had a ballot; and secondly, they voted to work and did just that. As a result, they had no extra help with their mortgages during those 12 months. They felt exceedingly badly about that. The strike should have come to a conclusion far sooner than it did, and had the building societies not acted as they did, I am sure that Mr. Scargill would have got his comeuppance much sooner.
    It is also worth pointing out that this is the main form of assistance for housing that is still paid to the householder. Under housing benefit, council rents and rates are paid direct, and only private rental property allowance, which represents a tiny percentage of the total paid in housing benefit, is paid to the householder.
    Mr. Raynsford: Will the hon. Lady give way? Mrs. Currie: No, not again.
    Mr. Raynsford: On a point of information.
    Mrs. Currie: No. The hon. Gentleman, who is extremely talented and knowledgeable, will no doubt make his contribution in a few moments.
    As the right hon. Member for Halton (Mr. Oakes) rightly said, we could tackle the problem differently. It might be better to change the rules and make them closer to those for other housing benefit claimants, so that supplementary benefit would be paid straight to the building society and could be used only against mortgage interest payments. That would achieve the objective of protecting a man's home without giving assistance and encouragement to industrial disputes. I commend that suggestion to the Minister. I understand from a written reply that it is already done for mortgage defaulters or others if it is
    "in the overriding interests of the claimant or his family to do so."—[Official Report, 12 February 1985; Vol. 73, c. 158.]
    We have that right and that power and, if we were being really hard-nosed, tough and aggressive during an industrial dispute, we might use that power once again.
    348
    We are a long way from the miners' strike, and it is unlikely that, at least as long as we have a Conservative Government led by my right hon. Friend the Prime Minister, there will be another miners' strike or another similar industrial dispute. I noticed that the teachers made sure that their pockets were not hit in any way during their strike and that they did not make any claims on the social security system.
    The Government have three objectives, and they are all laudable: first, to reduce spending, which is something that we were twice elected to do. We have not been terribly good at it, but we intended to do it. The second objective is to encourage people to take responsibility for themselves and for their welfare. That is a necessary objective in a free society. The third objective is to avoid the disincentive of returning to work if the payment for that work is not sufficient to pay the mortgage. Some of those objectives have been welcomed by responsible bodies. In paragraph 337 of its fourth report of 1985, in which it responded to the Green Paper, the Social Security Advisory Committee said:
    "We accept that for some claimants the present arrangements may operate as a disincentive"—
    it gives an illustration of this—
    "and that it is also questionable whether public funds should be used to help individuals acquire an appreciating capital asset whilst they are dependent on means-tested benefit."
    A Building Societies Association report, published in January 1985, also recognised the supplementary benefit scheme as
    "almost certainly the most generous in the world."
    Therefore, we should recognise that some of the Government's proposals have had their supporters.
    I am a little sceptical about the claim to save money. My hon. Friend the Minister will know that I always want to know what social security proposals will cost, whether we shall save anything, or whether they will — as is usually the case—end up costing much more. The first thing that I found was that the DHSS does not know how much it spends on this sort of benefit. In a written answer on 23 May 1986, which was addressed to the hon. Member for Shelter, the hon. Member for Fulham (Mr. Raynsford), it was announced that the DHSS knew the cost in 1983—£150 million—and thought that it knew how many people had claimed in 1984–277,000—but that it did not know the cost for 1984 or for 1985. I could lay odds that it does not know the cost now, yet mortgage interest information has been collected as a separate item since 1983. Somebody must know.
    It is a little alarming that we should be asked to swallow whole the claim that a lot of money will be saved when the Government do not know the cost in the first place. I am also slightly sceptical about the suggestion that we will save £35 million. I hope that my hon. Friend the Minister can answer this point. He spoke about 90,000 people and a cost of £200 each. That works out at not £35 million but £18 million. In that case, it looks as though we are taking a substantial sledgehammer to crack a nut.
    If it is only 90,000 people at any one time, it would be interesting to know how the DHSS reached a figure of £35 million, whether it has any idea of how many people will be affected, and if so, who. It works out that the figure is about £8 a week, but I am slightly sceptical, because the social security policy inspectorate, which did some research on this issue, found that the average payment for the entire mortgage was £16·64 a week in 1984. Of that, th amount for interest was only £12·11 a week. That

    349
    suggests that we would be saving about £6 a week, not £8. However, I look forward to the comments of my hon. Friend the Minister.
    My hon. Friend the Minister knows that I support almost anything that saves money on the social security bill. I just want to be sure that we do save money, and that the savings are not a chimera that will vanish if the essential administrative costs, such as finding out how much the darned thing costs in the first place, are added up.
    The Government's proposals may well achieve other objectives that are less desirable, particularly to Conservatives. They may well discourage home ownership in some parts of the United Kingdom. I do not think that they would do so in my part of the United Kingdom, where unemployment is low, but they may well have an effect on some families who, until this Government came to power, had no choice but to be council tenants. I refer, for example, to single-parent families.
    The social security inspectorate inquiry found that on the whole claimants had managed to negotiate and were able to maintain their payments. Thus, the proposals may not affect existing borrowers, but they may well affect potential owner-occupiers. We do not want to put people off from owning their own homes. In particular, we do not want to treat those living on council estates differently. But it just does not wash to argue that the proposals will make people homeless. We are talking about £6 a week, when somebody may be obtaining benefit of £100 or more. Thus, the proposals may well be neither here nor there in that respect, but the myth will have its effect, and that may well discourage the few people whom we most want to care for.
    I support another suggestion that has been made. My hon. Friend the Minister will remember that I wrote to him at the time of the Green Paper to ask whether he was serious about the proposals. He told me that he was pursuing discussions with the insurance companies. I believe that we should chase up the possibility of getting proper insurance cover. This would probably save nearly all the £150 million which, back in 1983 at least, we thought the scheme cost. It would encourage more home ownership, because people would have some security. It would help to make people more responsible and would prevent funds being used during industrial disputes. The insurance companies would be exceedingly loth to pay out to a claimant who had himself been responsible for his circumstances.
    I believe that we should make private redundancy and sickness insurance compulsory for all mortgage holders. There are already redundancy policies. The best ones seem to come from Yorkshire, where there seems to be some true grit. The Skipton building society is offering loans with a rate guaranteed to stay at 9·9 per cent. as long as people take redundancy insurance through General Accident and Life Assurance Corporation plc. The Scarborough building society is offering a mortgage care insurance scheme, providing cover against redundancy, sickness, or any other event that may prevent a borrower from working. That costs only £5 a month for every £100 of mortgage payment and works out at roughly £5 for every £10,000 borrowed, which is peanuts.
    Mr. Kirkwood: I have listened to the hon. Lady carefully, and she is making an important point. Does she accept that people do not make much use of such policies
    350
    at present? If so, and the hon. Lady's suggestion is taken up, more people will have such policies and the premiums will go sky high.
    Mrs. Currie: On the contrary. I am not an expert on insurance, but, as the right hon. Member for Halton said, most of those who take out policies are those who face the risk of redundancy. If such policies are compulsory, the risks will be spread much more widely, so there will be no reason for premiums to rise.
    The National Association of Estate Agents has a scheme entitled the redundancy mortgage protection scheme, which helps the borrower to pay his mortgage instalments for a period of up to two years. It covers endowment mortgages as well. It costs just £39 for the initial two-year period. Again, that is peanuts. If the cost of such schemes to the insurance companies is so low now, I cannot imagine that it would rise if all of us, even including hon. Members were protected similarly. I believe that the cost would fall and that it would be very good business. It is worth pointing out that all those schemes are much more generous than any scheme that the Government could afford.
    I tried to find out how much business the insurance companies were doing, but that turned out to be difficult. because they cross-subsidise. However, according to figures published by the Association of British Insurers, premiums for permanent health and other long-term insurances in the United Kingdom, which would include this type of insurance, increased from £129 million in 1984 to £142 million in 1985. I bet that those firms would not accept that sort of business unless they found it extremely worth while.
    Dr. Norman A. Godman: Will the hon. Lady give way?
    Mrs. Currie: Just briefly.
    Dr. Godman: I promise to be brief, and I am grateful to the hon. Lady. Are there any geographical differences in the insurance premiums that she has advocated at such length? If there are, I rather think that my constituents would have to pay higher premiums, because the current male unemployment rate in my constituency — unlike that in hers—is fully 26 per cent.
    Mrs. Currie: I take the hon. Gentleman's point. I cited the National Association of Estate Agents and its scheme. However, in many parts of the country, including the hon. Gentleman's constituency, housing is much cheaper, and mortgages are consequently much smaller. There may well, therefore, be some balancing out.
    If we take the view that we do not allow someone on the road without compulsory insurance, perhaps we should not allow anyone to take out a mortgage without some compulsory insurance that has an element of protection against falling earnings. The Government could then leave the supplementary benefit rules intact, and could protect their caring image, which we are all keen they should do. The state would not be needed. We could save, not £18 million or £35 million, but perhaps more than £100 million of good public money. We could then put it to better use by making, for example, tax cuts, and by returning that money to the taxpayers' pockets.
    Whenever an attempt is made to cut the take from the taxpayer by altering social security provison, Opposition Members react like a flock of radioactive sheep. They bleat

    351
    loudly and disagreeably and glow gently from their exertions. They recognise neither the problem nor the worthwhile objectives of the Government. They do not propose any solutions, and intend only to keep on spending. That is why I am happy to support the Government in the Lobby, but I hope that they will rethink parts of the proposal and in so doing look after the interests of the home owner and the taxpayer alike.
    5.29 pm
    Mr. Nick Raynsford: This has been an extraordinary debate, because, with the exception of the hon. Member for Derbyshire, South (Mrs. Currie), the Minister has clearly had the greatest difficulty in ensuring any support from his Back Benchers, and has had considerable difficulty in sustaining his argument. It is clear that the measure that we are debating is not just wrong in principle but damaging to a large number of people. It is untimely. It flies in the face of public opinion and the informed opinion of those who have commented on the Government's social security Green Paper, and in the face of the opinion on the Government's Back Benches.
    What is all this for? We are talking about a possible saving of £30 million—hardly a significant sum. There are even doubts as to whether the full amount of that will be saved. We are not talking about large numbers of people but about approximately 90,000 out of the 277,000 who, at the last count, were recorded as receiving assistance towards their mortgage interest payments from the DHSS. I hasten to add, as a correction to what the hon. Member for Derbyshire, South said, that this is not the largest group of people receiving direct assistance towards household costs. I tried to intervene earlier to put her right. Approximately 1 million households in the private sector are receiving rent allowance. I am sure that she would not have wanted to mislead the House on that.
    The background of the measure is the extension of owner-occupation, a continuous trend for many years and one that has been supported by the Government, but which has inevitably involved an increase in the number of home owners on low incomes. Therefore, there are more home owners at risk of getting into difficulty over repayments. The increase in mortgage arrears was referred to by my hon. Friend the Member for Oldham, West (Mr. Meacher), and I reiterate the scale of the figures. At the time of the 1979 general election, when the Government came to office, there were 8,420 households with building society mortgages more than six months in arrears. By 1983, the figure had risen to 32,000 and by 1985 to 60,390. A further 14,000 were similarly in arrears over local authority mortgages.
    That considerable increase has been accelerating, and is paralleled by a serious increase in the number of repossessions by building societies, from just 2,500 houses in 1979 to 7,000 in 1983 and to no fewer than 16,590 last year. That is a huge surge in the number of people who lose their homes because the building society repossesses, generally because of mortgage default. A further 1,000 homes were repossessed by local authorities in 1985. That gives a measure of the scale and increase of the problem. It is hardly surprising, given the increasing trend—
    Dr. Godman: My hon. Friend has referred to the scale of the problem, which is truly staggering. I ask him a
    352
    question similar to that which I asked the hon. Member for Derbyshire, South (Mrs. Currie) earlier. Has he any information concerning the geographical distribution of these scandalously high statistics of repossessions?
    Mr. Raynsford: Unfortunately, I do not have any information immediately available, but information on which I can touch later will concern the incidence of homelessness relating to mortgage difficulties, and shows that the problem is particularly acute in the north, but not much of a worry in London and the south-east. There is a regional bias to the north in terms of homelessness and that may be reflected in the mortgage difficulties, although I do not have the precise figures.
    It is not surprising, given the background of those figures and the increasing number of people in difficulty, that DHSS expenditure on mortgage support has gone up. It would be amazing if it had not. One of the few points on which I agree with the hon. Member for Derbyshire, South is that it is somewhat unfortunate that the DHSS is not able to give figures of the cost for later than 1983. That seems a rather poor basis for policy making. In 1983, it cost £150 million.
    Such a figure is small in proportion to total social security expenditure and to the other form of assistance for mortgages — the mortgage interest tax relief arrangements. To cut this assistance now, against the background of an escalating problem, and growing need, and a larger number of people at risk of having their homes repossessed, is remarkably irresponsible, even by the Government's standards.
    Let us look at the argument advanced in favour of this change. The Minister has already conceded that the cost argument is not fundamental, but he nevertheless advanced it. The cost is hardly enormous when compared to mortgage interest tax relief, which has gone up from £1 billion in 1979 to £4·75 billion—an enormous escalation. Of that, some £250 million or more is paid out in higher rate tax relief. In other words, it is going solely to people with substantial incomes. If it were necessary for the Government to seek savings from home owners, and if they wished to do so without hurting them, they would target it on those best able to take the cut. Those paying at the higher rate would be the obvious target. The Government would be taking away benefit from people who would not be hurt and a much better saving would be yielded — £250 million as against £30 million—were they to make savings at the expense of home owners who could well afford to pay a little more towards housing costs. It is interesting that this group has not been targeted, and that says a great deal about the Government's social priorities and values.
    Those figures also show much about the Government's second argument, that of equity. The Minister argued that the present arrangements were unfair on low-income home owners and I agree that that is a case. The present arrangements do not ensure adequate assistance for low-income home owners at work, who may be having difficulties meeting their repayment costs with the relatively small amount of assistance that they get from the mortgage interest tax relief. They may have even greater difficulty in meeting unexpected additional costs—for example, repairs.
    The inadequacy of the mortgage interest tax relief for low-income home owners is clear. The average value of mortgage interest tax relief for those on low incomes—

    353
    of, say, between £4,000 and £5,000—worked out at the last count at some £250 a year. For those with an income of over £30,000 a years, whom it might be assumed could afford to do with a little less assistance, the average value of mortgage interest tax relief is some £1,400 a year—almost six times as much. This is a measure of how inequitable the current system is. It gives the greatest assistance to those who could perfectly well cope with less but it does not give adequate assistance to those on low incomes who need more towards their mortgage repayment costs.
    Low-income home owners get assistance towards their rates, under the housing benefit scheme. Here we come to the nub of the matter. Is there not an acute anomaly if low-income home owners can get assistance towards their rates under the housing benefit scheme but not towards their mortgage repayments? That anomaly was identified by the housing benefit review team appointed by the Government to look into the issue. It reported with a recommendation that the anomaly could be covered by making mortgage interest payments eligible for assistance under the housing benefit scheme. That is an equitable proposal.
    The Government did not accept that proposal. I suspect that they did not, simply because the estimated cost was £100 million, but this returns us to the argument about how such costs could be met. If the Government were serious in their view, which was much talked about in the social security review, of the need to target assistance more effectively on those most in need, withdrawing assistance from those who could probably do without it would ensure that there was real value for money. If those paying tax at the higher rate and getting £250 million of mortgage interest tax relief, lost that help, the Government could afford to fund the housing benefit scheme covering mortgage interest payments and make a saving. That is the answer if the Government are serious about equity. Unfortunately, I do not believe that they are serious.
    The Government's proposals are not as damaging or severe as originally foreshadowed in the White Paper. Those proposals were universally condemned. In response to that condemnation the Government, rather than doing the sensible and obvious, and accepting that they had blundered, decided to be weak. They watered down the proposals to make them less severe and hoped that they would get away with it. How often have we observed that response to criticism from the present Government, particularly from the Social Security Advisory Committee and others?
    The Government have gone a bit too far. They have trimmed the proposals in the hope that they would get away with it, so now we have a watered-down fag-end of a proposal which is less extreme than the original because it does not affect all those who are assisted with mortgage repayments and does not cover all the payments during the first six months. The proposal is no less damaging for that. It will have dire effects on some groups.
    The hon. Member for Birmingham, Selly Oak, (Mr. Beaumont-Dark) made a telling point when he asked why the Government should penalise people when they were at their most vulnerable, in the first six months of unemployment and find it most difficult to cope with repayments.
    What about the disincentive effect, on which the Government have not provided an answer? If assistance is to be available only for 50 per cent. of the mortgage interest in the first six months, anyone who has gone
    354
    through those first six months will then qualify for the full amount. They will find it difficult to consider taking an insecure job because if they lose the job they will, once again, have to cope with 50 per cent. of the mortgage interest repayments for six months. The disincentive is clear for those who have been unemployed for six months and resume work because subsequently they might risk having to pay the 50 per cent. mortgage interest repayments.
    What happens if a building society decides not to reschedule the debt? That might happen if little equity is outstanding on the property. That would create homelessness. The figures are telling. In 1979, a total of 4 per cent. of those accepted as being homeless by local authorities were homeless as a result of mortgage arrears. Last year that figure had risen to 10 per cent. — the highest on record. Does it make sense to risk increasing the numbers at risk of homelessness by withdrawing assistance?
    What about others at risk, such as single parents? According to the latest figures, about 35,000 people are in that position. In my experience, that group most often face the most acute problems early in their claim for supplementary benefit, usually after the breakdown of the marriage or the relationship and when there is a sudden loss of family income. This means risking losing the family home and, becoming homeless.
    Many advice agencies concentrating their help on such people know how important it is to get in at the earliest possible moment and to discuss with the building society the possibility of a remortgage if it is necessary to buy up the other party's equity to keep the wife and children in the matrimonial home. The loss of 50 per cent. of the mortgage interest in the first six months could be a critical factor which prejudices the prospects of a successful negotiation. Finances in such cases are often finely balanced. People in that position are most likely to be penalised by the proposal. Homelessness might be intensified specifically by the Government's proposal.
    The Minister's response is threadbare. I hope that it was not intentional, but the Minister misled the House in saying that the taxpayer was meeting the full cost of people acquiring an appreciating asset. The truth is that supplementary benefit meets only interest payments. A safeguard is not very expensive, but it meets an important social need.
    If the Government are looking for equity, they have a clear alternative which will ensure that proper help goes to home owners. Will the Minister accept that his case is threadbare? Instead of trying to push this fag-end of a proposal, which has been watered down in the face of enormous criticism, will he recognise that there is no support for it? The proposal is widely condemned and ill-considered and will cause hardship. Will the Minister accept that and withdraw gracefully, instead of stubbornly trying to push through a proposal which is so widely condemned?
    5.46 pm
    Mr. Keith Raffan: I do not share the expertise on these matters of the hon. Member for Fulham (Mr. Raynsford), but I know how the measure will affect large numbers of people in my constituency. As I said in an intervention, unemployment in Delyn is high.
    I have considerable respect for the Minister. I say that although I will he critical of the measure and of his speech.

    355
    Hon. Members on all sides share that respect. Few Ministers have to write more letters or have to answer for more. The same can be said of his colleague on the Front Bench, my hon. Friend the Under-Secretary of State for Health and Social Security.
    I did not find my hon. Friend's speech convincing. It was a south of England speech. I do not mean to be rude by that. The Minister put emphasis on the short-term unemployed and said that most of the unemployed would find jobs within six months. How do we know that a person will find a job within a certain period? The Minister's constituency is in Essex, and the Under-Secretary's constituency is also in south-east England. The unemployed there have a much better chance of finding a job within six months than my constituents who live in the north, in the industrial and economic front line. I am not digressing. That is crucial to my criticism of the measure.
    My constituency has suffered massive structural unemployment for the last 15 years because of its over-dependence on two industries — steel and textiles. Courtaulds employed 7,500 men and women in my constituency 15 years ago. Now it employs only 150 and their jobs are hanging by a thread. The Courtaulds plants were concentrated round Flint and Holywell so male unemployment there is 41 per cent. My constituency therefore has a higher proportion of long-term unemployed.
    My constituents cannot sell their houses because so many are trying to sell their houses. The housing market is non-existent. My constituents who are out of work are desperately trying to find jobs. At my surgery in the last month I heard from a man who managed to find a job in Weston-super-Mare. He travels from there to his home in my constituency every weekend. He has to leave his wife and family in Holywell because he cannot sell his house. Another man has to travel equally far to Dumfries and he is in exactly the same position.
    Last year Courtaulds' biggest remaining factory, at Greenfield, closed with the loss of 600 jobs, 200 jobs having been lost at the same factory six months earlier. The borough council, which is by no means Labour-dominated, stated to the Select Committee on Welsh Affairs, which held an inquiry into the closure at Flint —and it was no exaggeration—that any man who was out of work and over 35 years of age at the time in my constituency was unlikely ever to work again.
    We are working hard in my constituency to prove that statement pessimistic. The Welsh Office, the Welsh Development Agency and Delyn borough council—we are all working together to create jobs. The Government could not have done more than they have by giving us the highest level of development area status, by designating Delyn an enterprise zone, and backing it with £8 million. That has created what the chief executive of the council has called
    "the most attractive industrial location in Wales."
    We are creating jobs, but in our area, as in many other areas, they are mostly female jobs. In the presence of the hon. Member for Derby, South (Mrs. Beckett) and my hon. Friend the Member for Derbyshire, South (Mrs. Currie), I hasten to say that I am not against creating female jobs. However, the most economically active women tend to be the wives of employed men, so we are
    356
    not spreading incomes into unemployed households but doubling incomes in households where one person already has work.
    No Government could have done more for north-east Wales than this Government. They have done far more than the last Labour Government, whose response was a worthless wringing of hands while factories closed. Unemployment in my constituency did not start on that day in 1979 that my right hon. Friend the Prime Minister crossed the threshold of No. 10 Downing street. Indeed, the massive Courtaulds redundancies and the first of the Shotton redundancies occurred under the last Labour Government, who did nothing. Yet all the good this Government have done is, at least in part, being undone by this measure.
    Mr. hon. Friend the Minister said that part of the reasoning behind the measure was to reduce the inequity in the treatment between home owners on supplementary benefit and those in work but on low incomes. The low earners in my constituency have no ill feeling towards the unemployed who are receiving help; indeed, there is a great deal of sympathy. All those people that I have mentioned in my constituency, especially in Flint and Hollywell, are on low incomes, and most of them say of the unemployed, "There but for the grace of God go I."
    I do not understand how we can talk of equity and inequity when we are not comparing like with like. Those who are out of work through no fault of their own cannot be compared with those who are fortunate enough to have jobs. I as a taxpayer, and the vast majority of taxpayers in my constituency who see at first hand the ravages of unemployment—not only financial, but psychological— would gladly contribute to help those who have the misfortune to be out of work. We do not want to deal them another blow at the very time when they are trying to find new work.
    It has been said that, as the measure applies only to the first six months, the unemployed can use their redundancy payments to see them through that difficult period. Redundancy payments for low earners are minimal, especially for those who worked for Courtaulds. Even those who had been employed for 30 or 35 years received negligible payments—between £5,000 and £6,000. I have been very critical of that. We should not eat into those redundancy payments for living costs when they could be used to help somebody set himself up in his own business.
    Mr. Newton: Anyone with a redundancy payment of £5,000 or £6,000 would be ruled out of supplementary benefit by the capital rule, so would receive no help.
    Mr. Raffan: I know that is so, but how long does such a small redundancy payment last? It can only be a short time for many of my constituents, because they have overdrafts and considerable costs. I can assure my hon. Friend that the vast majority of my constituents will not be outside supplementary benefit, but very much dependent on it.
    This measure discriminates against the hardest hit areas of the country where many of those out of work are long-term unemployed. It is not simply a financial blow; it is a psychological blow just at the crucial time when somebody is first experiencing the hitter shock of being out of work. It can only increase their anxiety and make it more difficult for them to adapt to the reality of being out of work. People in that position come to my surgery week

    357
    after week. We simply cannot do this to them. Just when they are at their most vulnerable, they are to be dealt another blow that can only increase their anxiety.
    The measure perpetuates an impression — a wholly wrong and unfair impression—that the Government are creating two nations, the north and the south. We want to destroy that impression; indeed, we must destroy it in the coming months, not only because it is morally right to do so but because I and many of my hon. Friends will not be here after the next election if it is not destroyed. My hon. Friend the Minister will not be a Minister, but will find himself sitting on the Opposition Benches.
    We are beginning to get across to the country a great deal of the good that we are doing. I know how much good the Government are doing in my constituency. My constituents have seen three of our four community hospitals visibly transformed during the past seven years, so they know that a great deal of money has been spent on them. The Government care, and my constituents realise that we have put that caring into practice through resources, albeit carefully allocated and spent.
    We must destroy the unfair impression that the Government are creating two nations. No Government have done more in Delyn to create jobs since it first began to suffer massive structural unemployment 15 years ago. However, much of that good will be undone by this measure. In Lord Woolton's famous words, we must show that we not only cope, we care. Of course we must be careful, efficient, cost-effective administrators of not the Government, but the taxpayers', money. But we must also be compassionate, caring spenders of that money.
    I implore my hon. Friend the Minister to think well and wisely about this measure. The money it would save would be a minute fraction of what we would lose in credibility as a Government and as a party. We are a Government who genuinely care, and I beg my hon. Friend not to throw away all the good that he and his colleagues have done. I hope that he will pick up this banana skin before we slip on it. He would he one of the first Ministers to do that, and it would be to his great credit. I hope that he will withdraw this measure as soon as possible.
    5.57 pm
    Dr. Norman A. Godman: I shall speak briefly, even though I represent a constituency with scandalously high unemployment. Currently, male unemployment in the Greenock travel-to-work area is 26 per cent. That is an official figure, not one that I have fiddled or concocted. It was given to me yesterday by the assistant manager of the jobcentre in Greenock.
    Like the hon. Member for Delyn (Mr. Raffan), I am deeply concerned about the way in which this paltry measure will affect my constituents. My hon. Friend the Member for Fulham (Mr. Raynsford) said that it was less than extreme, but I think it will exacerbate the problems faced by people at the dreadful moment when they are put out of work. It will especially affect those who do not receive large redundancy or severance payments.
    Like the hon. Member for Delyn, I, too, can give a litany of companies that are in decline in my constituency. People are being dismissed each month. During the time that I have represented Greenock and Port Glasgow, the work force of Scott Lithgow has shrunk from 5,000-plus to about 1,400. That company is building one rig for Britoil, which is to he launched in about one month. When
    358
    the fitting out is completed at the tail end of the year, the 1,400 work force faces dismissal. That is the sort of problem that one has to face in representing constituents in these worrying circumstances.
    Many of the 1,400 are managers, designers and naval architects. I am talking not only about the low-paid shipyard worker. If such a man is 40 years or older, he Will have experienced varying periods of unemployment, especially on the lower Clyde. Regrettably, that is a way of life for him. I am talking also about people who have purchased homes outwith my community, in places such as Kilmacolm, Wemyss Bay and Inverkip, and who are facing the threat of unemployment within the next few months. My plea to the Minister is to withdraw his horrible proposal.
    Other industrial organisations in my constituency are facing bleak times. The last remaining marine engineering plant on the Clyde is situated in my constituency. If orders are not obtained within the next few months, employees of Clark Kincaid will be put out of work. Managers, design engineers and the men who build such first-class products will lose their jobs.
    The cane sugar refining industry is in remorseless decline. There were 13 refineries, and now there is only one. The remaining refinery, owned by Tate and Lyle, is within my constituency.
    Other industries are also experiencing remorseless decline. The result is that, in the space of a few years, there is male unemployment of 26 per cent. In my constituency, over 8,000 are unemployed. When Ministers recite the national unemployment statistics, they frequently fail to reinforce them by referring to their geographical distribution. I suspect that few Conservative Members—regrettably, only a few hon. Members are in the Chamber to discuss this important issue — have in their constituencies the level of unemployment that is to be found in mine.
    Many of my constituents have been unemployed for over a year. Even when they obtain fresh employment, they face a short-term engagement. That is a growing phenomenon in Britain and the rest of the European Community. In the yard in my constituency which has only one rig to complete, hundreds of workers are on 13-week contracts. The contracts are extended only at the diktat of the employer — Trafalgar House. The employees do not have the power to extend their period of employment. Many men who have been taken on for 13 weeks — I accept that some have worked for much longer than that—are told that once that period has come to an end they can be dismissed following a week's notice with the usual severance pay agreements.
    Those are some of the problems faced by those who live in the west of Scotland with its scandalously high unemployment. Scottish unemployment figures are higher than those for the rest of Great Britain. I think I am right in saying that the current unemployment rate for Great Britain as a whole is about 13·3 per cent., but it is 15·6 per cent. for Scotland and 18·5 per cent. in the Strathclyde regional area. As I have said, it is 26 per cent. or more in my constituency. These are the official figures.
    The west of Scotland is experiencing a remorselessly continuing decline in its manufacturing base. The decline did not begin in 1979 and it would be stupid of me to suggest that it did. It could be argued that Scotland's manufacturing decline began in the 1920s. It was halted, perhaps, by the second world war, when manufacturing

    359
    activity remained on a plateau, and the break continued for a few years after the war. Despite the introduction into Scotland of new industries—what some call sunrise industries — the decline of the manufacturing base continues. It is not only my constituency with its traditional industries that is suffering a decline. I suspect that we shall never see the complete revival of the shipbuilding industry on the Clyde, or the marine engineering sector, no matter what Government come into office in two years' time. Naturally, I hope that the next Government will be a Labour Government, and that soon after that we shall have a Scottish Parliament. I would happily quit this place for such an assembly.
    Whatever Administrations we have over the next decade, we shall not see a dramatic and radical revival of the shipbuilding and marine engineering industries. The epicentre for employment in those activities is in south-east Asia, and it will remain there for many decades to come, with perhaps some input by Brazil, China and elsewhere.
    My hon. Friend the Member for Monklands, West (Mr. Clarke) can corroborate everything that I have said. His constituency has experienced the loss of Gartcosh with the decline of the steelmaking industry. The decline continues and people are worried about their prospects and those of their children.
    The one Scottish solution that seems to have worked in the past — it has been used cynically by different Administrations — is emigration. That is one way in which Scotland has dealt with its unemployment. The little measure that we are discussing—as my hon. Friend the Member for Fulham has said, it is less than extreme—will worsen the problems facing my constituents and people in the west of Scotland and elsewhere.
    Clydeside is not the only area that is suffering, and the traditional industries are not suffering alone. Even the new industries in Scotland have experienced unemployment. Last year, National Semiconductor in my constituency dismissed 400 employees. Not all of them received more than £3,000 in redundancy payments. Many of them are owner-occupiers. Some live in my constituency and others live in the constituency of the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley). The electronics industry is not the only sector to have suffered during the hiatus. However, I am pleased to say that National Semiconductor is experiencing some form of recovery, and the management is honouring its promise to me that it would re-hire those who had been dismissed. Some were out of work for six or nine months and others are still out of work. As I have said, the problem exists in other industries.
    The hon. Member for Delyn made a dramatic speech. Britoil recently announced that 400 employees would have to go. Again, they are not low-paid employees—manual workers living in council houses. Some are designers and senior managers. Forty of those employees, who worked at the head office in St. Vincent street, Glasgow, were given one hour's notice to clear their desks. That was no doubt because of the confidential nature of documents in their desks and, presumably, on their computers. Some people say that they received a reasonable pay-off by that massive oil company. However, they were given one hour's notice that they would be out of work. Some of those employees had moved to Scotland to work for Britoil.
    360
    The Grampion region benefits enormously from jobs created by the offshore oil industry. However, people in that area face the threat of unemployment. One employers' association which represents British interests in the offshore oil industry, BRIT — I hate acronyms and initials because I can never remember what they mean—said a few days ago that about 15,000 jobs within its member firms disappeared from the Scottish oil industry between February and June this year. That figure represents people with all kinds of occupational skills and knowledge, and with all kinds of mortgage obligations.
    The hon. Member for Delyn warned the Government against creating two nations. I suggest that those two nations exist. Looking beyond national statistics, we see a pronounced geographical shape to unemployment in Britain. Despite the easy opportunity that is offered to every Back Bencher to produce solutions to the problems which appear to bedevil Ministers, I do not have the answers to these massive problems. I leave that to hon. Members representing the Scottish National party— on the occasions when they choose to visit the Chamber. Similarly, the Social Democrats are often noticeable by their absence when the House debates such issues.
    On behalf of the people I represent, in these bleak economic times and the problems that they face, I ask the Minister to think again about this paltry measure. Its one effect will be to create added burdens and greater distress to people who are put out of work because of circumstances utterly outwith their control.
    6.13 pm
    Mr. Peter Viggers: I listened with care to the hon. Member for Greenock and Port Glasgow (Dr. Godman), as I always do. I know the area of his constituency very well. I do not demur at all from his general comments about the difficulties in that area. I listened with care also to the remarks of my hon. Friend the Member for Delyn (Mr. Raffan). Both my hon. Friend and the hon. Gentleman sketched the problems of those who are unemployed for long periods and the problems of those who live in areas where there is high unemployment. If there is such difficulty in those areas, it is important that Government aid is focused most accurately on where it is most needed.
    As the hon. Member for Oldham, West (Mr. Meacher), in his rather extreme and emotional speech, opened the debate, it is clear that the Opposition thought they were hitting at a soft target. There is no doubt that the measures have had a bad press, based on a rather simplistic and inadequate reading, in some cases, of the Government's proposals. If I were uncertain about the Government's proposals at the beginning of the debate, I am not uncertain about them now.
    It is clear that there are differing views about the way in which the building societies in particular will cope with the proposals. Some hon. Members think that the building societies will allow the interest to be rolled up and accumulated as part of the capital sum of the outstanding debt. I suspect that that will be the case. If that is so, there is a strong argument in favour of the measures, because they would provide equity between the various parties involved in the mortgage and the outstanding loan. I shall return to this point later.
    My first point is that there is no doubt that some families are better off out of work than in work. I have never criticised the shirkers and scroungers—those who

    361
    take advantage of unemployment benefit. I believe that the number of genuine scroungers and shirkers is small. They become known quite quickly to their neighbours. I believe that the overwhelming majority of people who are out of work desperately want to find a job. I reserve my anger for Members of Parliament who allow a system to continue which allows people to he better off out of work than in work.
    I invite my colleagues to consider the position of the head of a family who must face the problem and decide whether to take a job and a cut in income, which will damage his family, or to stay out of work. This is a dilemma in which the House of Commons should not have put anyone. It is wrong that hon. Members should have legislated so that some people are better off out of work than they are in work. It is interesting to note that the Opposition have not commented on the specific points made by my hon. Friend the Minister. I think that they owe us their comments and views on a system which allows some people to be better off out of work than they are in work.
    Secondly, my hon. Friend the Minister gave an example of a household with an average mortgage of £16,000, whose income out of work was appreciably higher than that of a family in work with an income of £80 to £120 a week. Examples have been given of the more deprived areas of the United Kingdom. I shall give an example of the position at the other end of the scale. A married man with three children, and the maximum mortgage allowable for tax relief of £30,000, is better off unemployed unless he earns about £180 a week. When the inevitable costs of travelling to work, clothing, lunches, and so on, are taken into account, he is better off unemployed unless he earns about £200 a week —£10,000 a year. That is a scandal with which any Government should cope.
    My third point—I echo those made by the Minister — is that there should be a fair balance between the employed and the unemployed, home owners and tenants, and Government and lending organisations. In maintaining a fair balance, there is a limit to which adjustment can be made by improving benefits. Sometimes there is a point at which existing benefits, when they have grown out of balance, need to be reviewed and perhaps reduced. If help is to be focused on those most in need, we should review financial aid where it is not best spent.
    My fourth point is that house ownership has been and continues to be an excellent investment. This year house prices are expected to increase in value by about 10 per cent., compared with inflation of about 3 per cent.
    Mr. Raffan: Investment in housing may be a good investment in my hon. Friend's constituency, but I assure him that it is not in mine. In my constituency, the house market is at best static and at worst declining. As I said earlier—this is true of all areas where there is a high level of long-term unemployment — everyone wants to sell his house so that he can try to find a job in another part of the country. Therefore, housing is not a good investment in places such as my constituency which are the hardest hit.
    Mr. Viggers: My hon. Friend has made a fair point, but it is fair to say also that in most parts of the United Kingdom housing has been a good investment. Of course there are exceptions, but the general rule, which applies more in the south-east than in most parts of the United
    362
    Kingdom, is that housing is a good investment. People receiving assistance with their interest payments should bear in mind that, normally, investment in housing is a good investment.
    Fifthly, the Government propose that half the mortgage interest payments will be met for the first six months for claimants under 60. It is important to stress that there will be full protection after the six months for the long-term unemployed, that there will be full protection for those over 60 and that there will be considerable protection for the 90,000 people who will be affected by the proposals. The case has been made for consultation by the Social Security Advisory Committee on the Government's points. I therefore support the Government's view.
    6.21 pm
    Mr. Ken Weetch: Make no mistake, this measure is bitterly resented throughout Britain. I want to refer to information from my constituency. I remind the Minister of his comments in a press release issued by his Department:
    "Our aim is to strike a fair and reasonable balance between the borrower, the lender and the taxpayer. We do not think this is achieved by the present arrangements which will enable all mortgage interest payments to be met immediately, however short the period of benefit."
    In certain circumstances, that is not accurate. This is a confidence trick played on the person who is not sharp enough to reschedule his debt with the building society. The press release states:
    "In future, one half rather than the whole of mortgage interest should be met for claimants under 60 who are in receipt of benefit for only a short time or during the first six months of a longer period on benefit. After this period the interest would, as now, be met in full."
    If a man who is suddenly out of work immediately sees the building society and has his interest payments rescheduled until a later period so that the Government pick up the arrears, he will not be out of pocket. If the debt is rescheduled, it is a disincentive for him to go back to work because, if he does, his arrears will not be refunded. The Government have spent a long time talking about disincentives. With the stroke of a pen, this scheme has created another disincentive, through mortgage interest payments.
    There are other strange aspects to the measure. The Minister said that he was thinking of people on low incomes and aiming for a fairer distribution of the burden. The hon. Gentleman should not have distinguished betwen one low income and another. If he was looking for money, he should have considered mortgage interest tax relief, which is paid willy-nilly to those paying higher taxes. Mortgage interest tax relief is structured so that the more expensive the house one buys and the higher one's income, the higher the mortgage interest tax relief. In 1986, that is nearly £5 billion. If the Minister were looking for a section of the community to bear the brunt of this measure, he should have looked to those who were a little more fortunate than people who have been flung into unemployment.
    This measure is bitterly resented, and I am surprised that it is associated with the Minister for Social Security. Many Labour Members regard him as one of the most knowledgeable and compassionate of Members on the Government Benches. But the fact is that this is the Treasury talking, not the Department of Health and Social Security.

    363
    The Government have incurred political unpopularity over this measure. I am in the political business to argue against them, but I never wanted to do it in this way. Unemployment is a financial and psychological blow. It is a great shame that when a man becomes unemployed, he learns that he will lace penalties with his mortgage interest repayments. That is difficult to bear.
    The Building Societies Association, among others, has pointed to the increasing length of the list of people in mortgage arrears. This is becoming a serious problem. The Government are seeking also to extend owner-occupation. I am in full agreement with that. At present, 65 per cent. of people own their own houses. If the Government wish to pursue that policy, why on earth do they penalise the least fortunate owner-occupiers who happen to fall out of work? This is an inequitable policy, especially as the money could have been taken from elsewhere.
    We all know that the Minister has to be hard-headed with a limited amount of money. He has a scale of priorities; he has to judge between this and that. But this decision is wrong. It is resented and, politically, it will cost the Government. It penalises the person who becomes unemployed and does not know enough to go to the building society to get his debt rescheduled so that, if he remains unemployed, the bill can he picked up later by the Treasury. The measure penalises not only the unemployed but the least knowledgeable. It is a bitter blow for some people. It means kicking someone in the teeth when he is already on the floor. The Minister's explanations on the radio and elsewhere are not credible—not because the hon. Gentleman cannot argue the case well enough but because he has a deplorable case to argue. He should take it away and think again.
    6.29 pm
    Mrs. Margaret Beckett: We listened with great interest for the Minister's defence of these proposals. I say "for" rather than "to" because, as my hon. Friend the Member for Ipswich (Mr. Weetch) has just said, the defence was somewhat lacking. The hon. Gentleman complained that the Government have been attacked for secrecy. I know that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) expressed concern at some of the details of the proposals. However, on the whole, the Opposition are not complaining about secrecy, although we know that the Prime Minister made a spirited attempt to run away from the timing of the proposals, if not from the proposals themselves. We object to the proposals as such because they are unjust, immoral, short-sighted and utterly nasty.
    The proposals are being introduced against a background in which homelessness is already increasing sharply because of unemployment, especially in the past year. Hon. Members have given various statistics in the debate, and I want to remind the House of only two.
    Homelessness through mortgage default is now five times greater than it was when the Government came to power in 1979; and in the last year alone mortgage defaults rose by 50 per cent. and repossessions, according to figures from the National Consumer Council, went up from 3,000 a year to 11,000. That is nearly a 300 per cent. increase in repossession. Therefore, it is extraordinary that, against that background of already increasing homelessness, the
    364
    Government have decided that they are giving too much help with mortgage interest payments to the most vulnerable in our society.
    Many hon. Members have already expressed their awareness—I was pleased to see it happening on both sides — that there is already desperate anxiety among many unemployed. There is substantial evidence from the United States of America and here of the destructive effects to health of stress due to unemployment and of the increase in suicides that follows when unemployment levels rise substantially. If that is true and can be demonstrated now while greater help is available, the problems are bound to be exacerbated by these proposals. Indeed, it is hard to imagine proposals more destructive of people's security or more inclined to make them suffer substantial increases in stress than the justified fear of losing their homes.
    Even now, when the Government's payments meet interest, although not the capital repayments, as a number of hon. Members have already pointed out, losing their home is the greatest anxiety for many home owners. The Government's policy inspectorate, which, as the Minister will know, has done a survey of a number of owner-occupiers, found that although many of the people it interviewed were good money managers—we are not talking about the feckless or incompetent — they all expressed the fear now of being unable to keep up their mortgage repayments and often went without other essentials, including replacement clothing, to do so. That point was made by my right hon. Friend the Member for Halton (Mr. Oakes) in his admirable speech, and it has come through strongly from the study. I repeat that that is the position now, before the Government make this further attack on the unemployed.
    The Building Societies Association, in its 1985 report, referring to the existing payment, said:
    "If this benefit had not existed the rise in unemployment would have led to a much greater increase in arrears and possessions."
    That is against a background in which, as we have already heard, the increase has already been substantial.
    The Government, in their amendment, claim that this proposal has been introduced not just to make savings —which, as the hon. Member for Cardiff, North (Mr. Jones) rightly said, would be wholly inadequate justification for such a proposal—but because there is a need for balance and fairness between the treatment of one group and another in society, especially between the treatment of the low paid and the unemployed. The Government imply in what they have said that these proposals are part of the way to encourage people out of unemployment, as well as indicating, as I have said, that there is unfair treatment of home owners in low paid work compared with those on supplementary benefit.
    As several hon. Members have pointed out, the Government are creating a new disincentive for people to go back to work. The Minister said that at present most unemployment is short term. It will not be in future—at least certainly not when people catch on to the implications in these proposals. Whether people are looking at short-term, part-time or low-paid jobs, it will not be in their interests to go back to work before they have been unemployed for six months. It certainly will not be in their interest to take short-term or insecure jobs because, if they become unemployed again, they will have to start building up that period of qualification all over

    365
    again if the work they took was for anything longer than eight weeks. It will not be in their interest to take part-time work because they may deprive themselves of entitlement to benefit and of building up their six months.
    It certainly will not be in their interest to take low-paid work at or near the end of their six months because, as my hon. Friend the Member for Ipswich pointed out with admirable clarity, it is only if they stay unemployed for longer than six months that the interest that they might have succeeded in getting deferred will be paid. Therefore, as I have said, it creates a disincentive for people to take any kind of part-time employment which might put them beyond the income level of their entitlement to supplementary benefit. In a sense, it creates a disincentive for home ownership as such because there are bound to be people who, simply through the loss of this mortgage interest entitlement, will be put outside the income range in which they might be entitled to supplementary benefit.
    It is an extraordinary position, and it is even more extraordinary that the Minister should choose this debate to boast about what the Government have done to promote the sale of council houses. It is extraordinary that the Government, who have promoted such sales, should now he putting people who may have bought their council houses and may even now be struggling to meet the mortgage repayments — a widespread phenomenon, as Opposition Members are well aware—and who become unemployed, in a position where, under these proposals, they could become homeless because they listened to a Government who told them that the best way to secure the future for their family was to buy their own home. A threat will now be hanging over them that they would not have faced if they had failed to listen to the Government and had remained tenants.
    Only the other day the Minister for Housing, Urban Affairs and Construction said that the Government were not anxious — perhaps I should say "any more", although I do not think that he did—to encourage the low-paid to buy their own homes. It is a pity that they did not mention it earlier. It is certainly not the impression that many people in the country have had.
    Those who, for whatever reason — perhaps because one of the family has a part-time job or because they lose their entitlement to the mortgage interest payment —lose all entitlement to supplementary benefit as such are bound to find that they will never, even after six months, qualify for this payment. They are almost bound to end up either giving up any part-time job, if they have one, or be in greater danger of becoming homeless.
    The Minister did not mention the possibility of people insuring against the loss of employment. I was a little surprised because that has featured quite strongly in the other defences that the Government have made of this proposal. I listened with great care to what the lion. Member for Derbyshire, South (Mrs. Currie) said about the availability of such schemes, the cost, and so on. I would not question the information that she has gathered. However, I also have information from people who, rather than going to the societies to ask what is offered, have tried as a family unit to obtain such insurance in the recent past.
    I must tell the hon. Lady that all those who have spoken to me and some who have written have said that in practice it is not only much more difficult than she suggested but more costly. A simple hut, I would have thought, obvious point is that those for whom the threat is greatest and those who need the insurance most are those who are least
    366
    likely to be able to get it, or afford it, because they are bad risks. Insurance companies do not like taking on people who are a had risk.
    My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) asked a pertinent question. I do not blame the hon. Lady for not having the answer to it. It may be that the insurance companies could not answer it. He asked whether there were differential payments in different parts of the country. I am sure that all hon. Members will recognise that where unemployment is high such insurance is likely to be unobtainable or, in effect, unobtainable because it is so expensive.
    I recognise that the hon. Member for Derbyshire, South had a different proposal. She proposed that everyone should have compulsory insurance for health, redundancy, and so on, as a package. I was under the impression that we already had such a system. We call it national insurance. I can see no reason to compel people to take out further private insurance for something that they are already paying the Government to provide.
    The Minister said that the Government would consider the outcome of the consultations being undertaken with the Social Security Advisory Committee. Of course, he did not remind the House that we have had two sets of consultations already. The Government consulted the building societies and a whole range of other institutions on the proposals as drafted in the Green Paper and on the proposals as drafted in the White Paper. To the best of my recollection, they got no support from any quarter, not even from the Institute of Directors, which has been known to support one or two of the Government's wilder proposals.
    Apart from consultations on those specific measures, which do not seem to us to have brought the Government any comfort, earlier they consulted several eminent persons, all of the Government's own choice and of their own political persuasion, about the pattern of housing support, as my hon. Friend the Member for Fulham (Mr. Raynsford) and other hon. Members mentioned. In the housing benefit review, the Government's hand-picked advisers addressed their minds to precisely the matter that so troubles the Government, to which they refer in the amendment the balance between support for those who are in low-paid work and those who are unemployed. The housing benefit review team proposed that the right way to deal with the problem was to make home owners eligible for standard housing benefit. Therefore, we have had two processes of consultation in the past year, both of which, so far, the Government have chosen to ignore.
    As has been amply demonstrated by hon. Members on both sides of the House, the proposals are made against a background in which homelessness, due to inability to pay mortgages, is already rising sharply. They are also made against the more general background, which is perhaps less easily understood by the public, of an attack on the income and an increase in the problems of the unemployed. This matter may soon be debated in the House. A reduction is being made in the single payments available to the unemployed. Ultimately they will be replaced by the social fund. That will mean a reduction in income available to the unemployed. The costs that they are to meet from their reduced income are to rise, particularly because of the Government's proposal in the Social Security Bill to make everyone on supplementary benefit meet 20 per cent. of their rates and water rates.

    367
    That proposal was rejected only this week by another place, but we hear that the Prime Minister is determined to reinstate it.
    The penalties of unemployment are also due to be increased. In the final days of consideration of the Social Security Bill in Committee, the Government introduced a proposal that if someone might have made himself voluntarily unemployed, or might not be seeking work with sufficient enthusiasm, his benefit could be reduced — not for six weeks, as now, but for a full 13 weeks. The Government clearly said that they proposed measures with increased questioning so that they could find out what action people were taking to find work, even in areas where unemployment is sky-high.
    Before the proposals came forward in this form, we were already concerned that the package, particularly the last elements to which I referred, might mean that people were pursued and attempts made to force them to take jobs, even low-paid jobs, and even there the money coming in would not be adequate to support their families. If the family is carrying a further burden of debt, incurred because the benefit paid under the proposals is reduced, there is a great danger that those people may be leant on and pushed by Government officials to take action which might increase the danger of them losing their home because of the growing burden of debt compared with a potentially inadequate income.
    Despite growing evidence that the Government are dominated by those whose views would not have been out of place in the Tory Governments of the 1930s, I have noticed that Ministers become upset when we in the Labour party draw on the experience and history of our families and, in particular, of the Labour movement. But it is still important and relevant to say to the Government at the conclusion of this debate that part of what made the proposal that is usually described as the means test so hated was that it took away from people the few assets that they had managed to accrue, often after struggling throughout their working life, and that they knew perfectly well they could never replace. It made families feel that all their work, all their endeavour, had gone for nothing, because the few achievements that had been gained were gone for ever.
    The way in which the memory of the means test has lingered on is testimony to the bitterness of that experience. I know that hon. Members, particularly Opposition Members, can testify to that strongly from the experience of their families. It is extraordinary that this Government want to revive that memory and bitterness. A famous quotation tells us that those whom the gods would destroy they first send mad. Clearly the gods, like the country, have turned against the Government.
    6.44 pm
    The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): I shall endeavour to bring some sanity to the debate. We have had an excellent debate of some heat and passion. I have no objections to that. The hon. Member for Derby, South (Mrs. Beckett), in summing up the Opposition's case, did so crisply and aptly, as she so frequently does. One or two of the speeches have been outstanding. I shall endeavour to respond to as many of the points made as possible.
    368
    I know that the hon. Member for Oldham, West (Mr. Meacher) must leave, for understandable reasons, which he has explained to me, so let me say a word or so about his opening speech. I listened to it with an unanticipated admiration. My fascination was not so much with the content of the hon. Gentleman's argument or, indeed, with the motion, to which I shall refer; nor was it with his delivery, lucid and impassioned as it was, and as it so frequently is. My fascination was born out of sheer admiration for the absolute brass-necked effrontery of the motion on this subject from that source. It is effrontery because, as my hon. Friend the Minister of State set out at the commencement of the debate, our proposals are still at the consultation stage. The Social Security Advisory Committee is still considering them. No report has yet been received. No consultation has yet been considered. No final decisions have yet been taken—[Interruption.] The hon. Member for Walsall, North (Mr. Winnick) occasionally engages his mouth before his thought processes. He would be wise to wait a second or two.
    On a former occasion, when the hon. Member for Oldham, West issued his Green Paper on mortgage interest, he was concerned that he was criticised for what were consultation proposals, and said so loudly and frequently to the press. I say that the hon. Gentleman's effrontery is brass-necked because—I put it kindly—the hon. Gentleman has a chequered history on the subject of mortgage interest, and the concept of him, with his record, as the saviour of home owners, is as absurd a proposition as the House can swallow, even towards the end of a long Session. However, I shall not be cruel to the hon. Gentleman and dwell on that, not least because I wish to refer specifically to some of the important points that were made in the debate by him and others.
    The right hon. Member for Halton (Mr. Oakes) spoke early in the debate with all the experience of a vice-president of the Building Societies Association. I was particularly grateful to him for the acknowledgment that the building societies deal sensitively with borrowers facing short-term difficulties. I am happy to acknowledge that that is traditionally the case, and I hope and expect that the building societies will continue to do so in future the underlying concern of the right hon. Gentleman—I hope that I do not misstate it — and of other hon. Members, including the hon. Member for Oldham, West, my hon. Friend the Member for Cardiff, North (Mr. Jones) and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), was the danger of foreclosure as a result of arrears. I entirely accept—it is impossible to deny it—that foreclosure inevitably causes great distress where it occurs.
    The right hon. Gentleman, better perhaps than anyone else in the House, will know that foreclosure is the last option that the lenders wish to pursue. It is not an early instinct, but the last option. There are many criteria to be considered before that sad decision is reached — how much, if any, equity the individual possesses in the property, whether the difficulty is likely to be long-term, and whether there are other debt problems. All those are relevant points that would need to be seriously considered by the lender before there was any suggestion of foreclosure. I suggest that the same principle would apply where the lender is not a building society, but perhaps some of the later arrivals on the lending scene — the local authorities, which would lend to people who had purchased local authority property, and banks.

    369
    I do not accept, in the fashion that it has been advanced from time to time this afternoon, the suggestion that the proposed change sent to the Social Security Advisory Committee, would, of its own volition given its nature and scale, materially accelerate foreclosure. Although we may quibble about the figures on the fringes, there is little doubt that, broadly, the average interest lost for a supplementary claimant unemployed for the full six months would be about £200. That addition to the capital debt, when it is known that after a six-month period the interest would again be met in full, seems unlikely to trigger foreclosure of its own volition. The observation made by the right hon. Member for Halton about the building societies lends some force to that argument.
    Mr. Raynsford: Will the Minister give way?
    Mr. Major: I hope that the hon. Gentleman will forgive me if I do not give way. He contributed to the debate and there are many points that I should like to cover. Some of the comments that I should like to cover are his.
    That argument is also strengthened in the light of the specific comments by the Building Societies Association to the effect that it would handle any change in arrangements sympathetically and would continue with the basic aim of keeping as many people in home ownership as possible.
    The right hon. Member for Halton also mentioned another important matter. He referred to the £1·85 weekly addition to supplementary benefit for repairs and insurance. I can reassure the right hon. Gentleman by saying that that sum may be increased where the cost of repairs and insurance exceeds that figure, provided that it is reasonable in all the circumstances to do that. We would expect that frequently to he the case.
    My hon. Friend the Member for Cardiff, North expressed his concerns trenchantly. I shall study with care the reservations that he expressed. They were echoed by other hon. Members. In the meantime, as his speech was unique in this respect, perhaps I may welcome his acknowledgement of the minor improvements proposed, and specifically his acknowledgement of the proposed special disregard of income from mortgage protection policies to meet the balance of mortgage payments. It was refreshing to hear that minor change acknowledged, for it was in danger of being swamped in the criticism that emerged elsewhere in the debate.
    My hon. Friend the Member for Delyn (Mr. Raffan), in an excellent speech, spoke with passion and clarity about his concerns. He referred to some of the observations made by my hon. Friend the Minister for Social Security, who was trying to make the point that the measure was directed at the first six months on benefit. Everyone whose unemployment turns out to be long term, will, of course, have all the interest met after the six months, including the extra interest in arrears arising from the 50 per cent. limitation, which will have capitalised and added Lo the outstanding loan. Those whose unemployment is longer term will come, and will know that they will come, into full benefit and qualify for extra help with additional interest on the higher loan.
    Therefore, I hope that people out of work will appreciate that and understand that 100 per cent. will become available if, sadly, they remain out of work after the full six months and that that will include the extra help with the interest, which may have been capitalised and which was not met during the first six months. I should
    370
    also like to assure my hon. Friend the Member for Delyn that, when the measure comes into operation it will affect new cases only, and not existing cases.
    The hon. Member for Fulham (Mr. Faynsford), in a wide-ranging speech, referred to repossessions and arrears. I shall not bandy statistics with him, for we have done that before and I am wary of creating a tradition. However, we are in no sense complacent about arrears. I accept that for those in difficulties the problems can, self-evidently, be severe. The proportion of those in difficulties is very small and ought not to be over-exaggerated.
    Mr. Raynsford rose—
    Mr. Major: Well over 99 per cent. of mortgages are not in arrears. It does not help the hon. Gentleman's argument or rational debate to paint an exaggerated picture of many people in severe difficulties. On the information available to me, that is not statistically the case.
    Mr. Raynsford: I should like to correct the Minister. At the beginning of my speech I made the point that we were not talking about large numbers of people. The point that I tried to make—the statistics that I quoted illustrate this—is that there has been a serious increase in the proportion of arrears during the lifetime of the Government. In fact, there has been a sixfold increase. Although the numbers are not large in absolute terms, the trend is very worrying. The likely implication of the proposals is to make that trend worse. That is the main principle of the Opposition's criticism.
    Mr. Major: I understand the hon. Gentleman's point. In no sense was I trying to misrepresent him. I was trying to place his point in the context of the facts as I understand them.
    The hon. Gentleman also referred rather tantalisingly to the proposition of extending mortgage interest cover to housing benefit. He will know that that occurs in France, Germany, New Zealand and Switzerland. He will also know that none of those countries offer 100 per cent. cover, nor, I think — I shall have to check to he completely sure — do they provide the degree of protection that would be provided under the supplementary benefit proposals even were we to implement the proposals referred to the SSA C in their present form.
    My hon. Friend the Member for Derbyshire, South (Mrs. Currie), with an arithmetical precision that is admirable, asked how the Government's figures added up. They did not seem to add up to my hon. Friend. I understand her confusion, but I can assure her that the calculations are correct. However, in the interests of brevity perhaps she will permit me to write to her with the detailed calculations, rather than deal with them at great length now.
    Another matter which is relevant and which has run as a strand throughout the debate is the anxiety that lenders will be discouraged from pursuing low-cost home ownership initiatives. We hope that that will not be the case. The Government have welcomed the building societies' efforts in that area, and we recognise that they are helping people into home ownership who might otherwise have been unable to afford such ownership.
    There is always an element of risk in operating at the lower end of the market. Any addition to that risk from our proposals will, in our judgment, be short-tern and apply to only a minority of cases. I must emphasise again

    371
    that when a borrower becomes unemployed and is in receipt of unemployment benefit, mortgage interest and interest on arrears will be fully covered after the six-month period. When unemployment is for less than six months, we believe that it will normally be possible to make arrangements for the recovery of arrears in the normal way. In the meantime, help will continue to be given with half the interest payments.
    In order to put the matter into the proper context at the end of an emotional debate, I stress that we are considering an amount equal to three months' interest at most. There is, of course, also the problem of the mortgage interest trap, about which the Shelter Housing Aid Centre has made comments recently. I can assure the House that we will carefully examine this problem, which, to some extent, may appear to be inherent in any scheme to introduce a six-month qualifying period.
    It is our preliminary judgment that the number of people who might be caught in the mortgage interest trap is minute. Throughout the country we believe that no more than 1,000 people will be affected. We will therefore need to balance carefully our desire to help with the legal and operational problems involved in dealing with changes of circumstances in the six-month period.
    The thrust of the Opposition's charge has been that the Government are unfairly beastly to people whom we sought to encourage into home ownerhip. I do not accept that charge. It is inaccurate, and that has not been our intention. I must also say, even in the absence of the principal protagonist, the hon. Member for Oldham. West, that it is a colossal cheek for the Opposition to make that charge. They opposed the right to buy, and many of the people about whom they now claim to be concerned would never have become home owners without the right to buy.
    The hon. Member for Oldham, West appeared to he keen to abolish either all or — as I do not wish to misrepresent him—part of mortgage interest tax relief, without which far fewer people would have become home owners. As recently as last evening, speaking from the Opposition Front Bench, the hon. Member for Bootle (Mr. Roberts) repeated yet again that it was wrong for taxpayers to receive income tax relief on mortgages up to £30,000. That is in flat contradiction to what has been said elsewhere as the official Opposition policy. The sooner the Opposition make their position utterly clear on that, the better.
    Mr. Raynsford: We intend to limit it to the standard rate.
    Mr. Major: The hon. Member for Fulham says that the Opposition will limit it to the standard rate. The hon. Member for Oldham, West had a different proposition, and the hon. Member for Bootle had yet a further proposition to make yesterday. There are more propositions from the Opposition on mortgage interest than there are defence policies from the alliance. The sooner we have an accurate assessment of the Opposition's stance, the better. We need no lectures from the Labour party on that.
    The propositions that we referred to the advisory committee were not novel. They were well understood, they were trailed in the Green Paper and in the White
    372
    Paper and they were spoken about often. Nor are they final, for we await with interest the advisory committee's report on the draft regulations.
    Moreover, I re-emphasise that our proposals apply only to the short term, with full benefit entitlement being restored after six months. They are modest proposals; they are certainly worth considering; they will bring equity of treatment between home owner and taxpayer and between those on low incomes, whether in or out of work.
    Even under our proposals, we would have a better and more generous system than the Labour Government in New Zealand—
    Mr. Derek Foster rose in his place, and claimed to move, That the Question be now put.
    Question, That the Question be now put, put and agreed to.
    Question put accordingly, That the original words stand part of the Question:—
    The House divided: Ayes 198, Noes 259.

    Division No. 233]

    [7 pm

    AYES

    Abse, Leo

    Deakins, Eric

    Adams, Allen (Paisley N)

    Dewar, Donald

    Alton, David

    Dixon, Donald

    Archer, Rt Hon Peter

    Dormand, Jack

    Ashdown, Paddy

    Douglas, Dick

    Ashley, Rt Hon Jack

    Dover, Den

    Ashton, Joe

    Dubs, Alfred

    Atkinson, N. (Tottenham)

    Duffy, A. E. P.

    Bagier, Gordon A. T.

    Eadie, Alex

    Banks, Tony (Newham NW)

    Eastham, Ken

    Barnett, Guy

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

    Barron, Kevin

    Ellis, Raymond

    Beckett, Mrs Margaret

    Evans, John (St. Helens N)

    Beith, A. J.

    Fatchett, Derek

    Bell, Stuart

    Faulds, Andrew

    Benn, Rt Hon Tony

    Field, Frank (Birkenhead)

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

    Fields, T. (L'pool Broad Gn)

    Bermingham, Gerald

    Fisher, Mark

    Bidwell, Sydney

    Flannery, Martin

    Blair, Anthony

    Foot, Rt Hon Michael

    Boothroyd, Miss Betty

    Forrester, John

    Boyes, Roland

    Foster, Derek

    Bray, Dr Jeremy

    Foulkes, George

    Brown, Gordon (D'f'mline E)

    Fraser, J. (Norwood)

    Brown, Hugh D. (Provan)

    Freeson, Rt Hon Reginald

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

    Freud, Clement

    Brown, Ron (E'burgh, Leith)

    George, Bruce

    Bruce, Malcolm

    Gilbert, Rt Hon Dr John

    Buchan, Norman

    Godman, Dr Norman

    Caborn, Richard

    Gould, Bryan

    Callaghan, Rt Hon J.

    Gourlay, Harry

    Callaghan, Jim (Heyw'd & M)

    Hamilton, James (M'well N)

    Campbell, Ian

    Hamilton, W. W. (Fife Central)

    Campbell-Savours, Dale

    Hancock, Michael

    Carlile, Alexander (Montg'y)

    Hardy, Peter

    Carter-Jones, Lewis

    Harman, Ms Harriet

    Cartwright, John

    Harrison, Rt Hon Walter

    Clark, Dr David (S Shields)

    Hart, Rt Hon Dame Judith

    Clarke, Thomas

    Hattersley, Rt Hon Roy

    Clay, Robert

    Heffer, Eric S.

    Clelland, David Gordon

    Hogg, N. (C'nauld & Kilsyth)

    Clwyd, Mrs Ann

    Home Robertson, John

    Cohen, Harry

    Hoyle, Douglas

    Conlan, Bernard

    Hughes, Robert (Aberdeen N)

    Cook, Frank (Stockton North)

    Hughes, Roy (Newport East)

    Cook, Robin F. (Livingston)

    Hughes, Simon (Southwark)

    Corbett, Robin

    Hume, John

    Corbyn, Jeremy

    Janner, Hon Greville

    Cox, Thomas (Tooting)

    Jenkins, Rt Hon Roy (Hillh'd)

    Craigen, J. M.

    John, Brynmor

    Crowther, Stan

    Johnston, Sir Russell

    Davies, Rt Hon Denzil (L'lli)

    Jones, Barry (Alyn & Deeside)

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

    Kaufman, Rt Hon Gerald

    373

    Kinnock, Rt Hon Neil

    Redmond, Martin

    Kirkwood, Archy

    Rees, Rt Hon M. (Leeds S)

    Leadbitter, Ted

    Richardson, Ms Jo

    Leighton, Ronald

    Roberts, Ernest (Hackney N)

    Lewis, Ron (Carlisle)

    Robertson, George

    Lewis, Terence (Worsley)

    Robinson, G. (Coventry NW)

    Litherland, Robert

    Rogers, Allan

    Livsey, Richard

    Ross, Ernest (Dundee W)

    Lloyd, Tony (Stretford)

    Ross, Stephen (Isle of Wight)

    Lofthouse, Geoffrey

    Rowlands, Ted

    Loyden, Edward

    Ryman, John

    McCartney, Hugh

    Sedgemore, Brian

    McDonald, Dr Oonagh

    Sheerman, Barry

    McKelvey, William

    Sheldon, Rt Hon R.

    MacKenzie, Rt Hon Gregor

    Shields, Mrs Elizabeth

    McNamara, Kevin

    Shore, Rt Hon Peter

    McTaggart, Robert

    Short, Ms Clare (Ladywood)

    McWilliam, John

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

    Madden, Max

    Silkin, Rt Hon J.

    Marek, Dr John

    Skinner, Dennis

    Marshall, David (Shettleston)

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

    Martin, Michael

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

    Mason, Rt Hon Roy

    Snape, Peter

    Maxton, John

    Soley, Clive

    Maynard, Miss Joan

    Spearing, Nigel

    Meadowcroft, Michael

    Steel, Rt Hon David

    Michie, William

    Stewart, Rt Hon D. (W Isles)

    Mikardo, Ian

    Stott, Roger

    Miller, Dr M. S. (E Kilbride)

    Strang, Gavin

    Morris, Rt Hon A. (Wshawe)

    Thompson, J. (Wansbeck)

    Morris, Rt Hon J. (Aberavon)

    Thome, Stan (Preston)

    Nellist, David

    Torney, Tom

    Oakes, Rt Hon Gordon

    Wallace, James

    O'Brien, William

    Wareing, Robert

    O'Neill, Martin

    Weetch, Ken

    Orme, Rt Hon Stanley

    Welsh, Michael

    Owen, Rt Hon Dr David

    White, James

    Park, George

    Wigley, Dafydd

    Parry, Robert

    Williams, Rt Hon A.

    Patchett, Terry

    Wilson. Gordon

    Pavitt, Laurie

    Winnick, David

    Penhaligon, David

    Woodall, Alec

    Pike, Peter

    Wrigglesworth, Ian

    Powell, Raymond (Ogmore)

    Young, David (Bolton SE)

    Prescott, John

    Radice, Giles

    Tellers for the Ayes:

    Randall, Stuart

    Mr. Ron Davies and

    Raynsford, Nick

    Mr. Lawrence Cunliffe.

    NOES

    Adley, Robert

    Bright, Graham

    Aitken, Jonathan

    Brinton, Tim

    Alexander, Richard

    Brown, M. (Brigg & Cl'thpes)

    Alison, Rt Hon Michael

    Browne, John

    Amery, Rt Hon Julian

    Bryan, Sir Paul

    Amess, David

    Budgen, Nick

    Arnold, Tom

    Bulmer, Esmond

    Ashby, David

    Burt, Alistair

    Aspinwall, Jack

    Butler, Rt Hon Sir Adam

    Atkins, Rt Hon Sir H.

    Carlisle, John (Luton N)

    Atkins, Robert (South Ribble)

    Carlisle, Kenneth (Lincoln)

    Atkinson, David (B'm'th E)

    Carlisle, Rt Hon M. (Wton S)

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

    Carttiss, Michael

    Baker, Nicholas (Dorset N)

    Cash, William

    Baldry, Tony

    Chalker, Mrs Lynda

    Banks, Robert (Harrogate)

    Chapman, Sydney

    Batiste, Spencer

    Chope, Christopher

    Bellingham, Henry

    Churchill, W. S.

    Bendall, Vivian

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

    Benyon, William

    Clark, Dr Michael (Rochford)

    Biffen, Rt Hon John

    Clark, Sir W. (Croydon S)

    Biggs-Davison, Sir John

    Clegg, Sir Walter

    Blackburn, John

    Cockeram, Eric

    Blaker, Rt Hon Sir Peter

    Colvin, Michael

    Bonsor, Sir Nicholas

    Conway, Derek

    Boscawen, Hon Robert

    Coombs, Simon

    Bottomley, Peter

    Cope, John

    Bottomley, Mrs Virginia

    Cormack, Patrick

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

    Corrie, John

    Boyson, Dr Rhodes

    Couchman, James

    374

    Cranborne, Viscount

    King, Roger (B'ham N'field)

    Critchley, Julian

    Knight, Dame Jill (Edgbaston)

    Currie, Mrs Edwina

    Knowles, Michael

    Dickens, Geoffrey

    Knox, David

    Dorrell, Stephen

    Lawler, Geoffrey

    Douglas-Hamilton, Lord J.

    Lee, John (Pendle)

    Dykes, Hugh

    Leigh, Edward (Gainsbor'gh)

    Edwards, Rt Hon N. (P'broke)

    Lennox-Boyd, Hon Mark

    Eggar, Tim

    Lewis, Sir Kenneth (Stamf'd)

    Emery, Sir Peter

    Lightbown, David

    Evennett, David

    Lilley, Peter

    Eyre, Sir Reginald

    Lloyd, Sir Ian (Havant)

    Fairbairn, Nicholas

    Lloyd, Peter (Fareham)

    Fallon, Michael

    Lord, Michael

    Farr, Sir John

    Lyell, Nicholas

    Favell, Anthony

    McCurley, Mrs Anna

    Fenner, Mrs Peggy

    Macfarlane, Neil

    Fletcher, Alexander

    MacKay, Andrew (Berkshire)

    Fookes, Miss Janet

    MacKay, John (Argyll & Bute)

    Forman, Nigel

    McLoughlin, Patrick

    Forsyth, Michael (Stirling)

    McNair-Wilson, M. (N'bury)

    Forth, Eric

    Madel, David

    Fox, Sir Marcus

    Major, John

    Franks, Cecil

    Malins, Humfrey

    Fraser, Peter (Angus East)

    Maples, John

    Freeman, Roger

    Marlow, Antony

    Galley, Roy

    Marshall, Michael (Arundel)

    Gardner, Sir Edward (Fylde)

    Mates, Michael

    Garel-Jones, Tristan

    Maude, Hon Francis

    Glyn, Dr Alan

    Mayhew, Sir Patrick

    Goodhart, Sir Philip

    Mellor, David

    Goodlad, Alastair

    Merchant. Piers

    Gorst, John

    Meyer, Sir Anthony

    Gow, Ian

    Miller, Hal (B'grove)

    Gower, Sir Raymond

    Mills, Iain (Meriden)

    Grant, Sir Anthony

    Mills, Sir Peter (West Devon)

    Greenway, Harry

    Miscampbell, Norman

    Griffiths, Sir Eldon

    Mitchell, David (Hants NW)

    Griffiths, Peter (Portsm'th N)

    Moate, Roger

    Ground, Patrick

    Montgomery, Sir Fergus

    Grylls, Michael

    Moore, Rt Hon John

    Hamilton, Neil (Tatton)

    Morris, M. (N'hampton S)

    Hanley, Jeremy

    Morrison, Hon P. (Chester)

    Hannam, John

    Moynihan. Hon C.

    Hargreaves, Kenneth

    Murphy, Christopher

    Harvey, Robert

    Neale, Gerrard

    Havers, Rt Hon Sir Michael

    Nelson, Anthony

    Hawkins, C. (High Peak)

    Newton, Tony

    Hawksley, Warren

    Nicholls, Patrick

    Hayes, J.

    Morris, Steven

    Hayhoe, Rt Hon Barney

    Onslow, Cranley

    Hayward, Robert

    Oppenheim, Phillip

    Heathcoat-Amory, David

    Oppenheim, Rt Hon Mrs S.

    Heddle, John

    Osborn, Sir John

    Henderson, Barry

    Ottaway, Richard

    Hickmet, Richard

    Page, Richard (Herts SW)

    Hicks, Robert

    Parkinson, Rt Hon Cecil

    Higgins, Rt Hon Terence L.

    Patten, J. (Oxf W & Abgdn)

    Hind, Kenneth

    Pattie, Geoffrey

    Hirst, Michael

    Pawsey, James

    Hogg, Hon Douglas (Gr'th'm)

    Peacock, Mrs Elizabeth

    Holland, Sir Philip (Gedling)

    Percival, Rt Hon Sir Ian

    Hordern, Sir Peter

    Portillo, Michael

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

    Powell, William (Corby)

    Howarth, Gerald (Cannock)

    Powley, John

    Howell, Rt Hon D. (G'ldford)

    Prentice, Rt Hon Reg

    Hunt, David (Wirral W)

    Price, Sir David

    Hunt, John (Ravensbourne)

    Proctor, K. Harvey

    Hunter, Andrew

    Raison, Rt Hon Timothy

    Hurd, Rt Hon Douglas

    Rees, Rt Hon Peter (Dover)

    Jackson, Robert

    Rhodes James, Robert

    Jenkin, Rt Hon Patrick

    Rhys Williams, Sir Brandon

    Jessel, Toby

    Ridley, Rt Hon Nicholas

    Johnson Smith, Sir Geoffrey

    Ridsdale, Sir Julian

    Jones, Gwilym (Cardiff N)

    Rifkind, Rt Hon Malcolm

    Jones, Robert (Herts W)

    Rippon, Rt Hon Geoffrey

    Joseph, Rt Hon Sir Keith

    Roberts, Wyn (Conwy)

    Kellett-Bowman, Mrs Elaine

    Roe, Mrs Marion

    Kershaw, Sir Anthony

    Rossi, Sir Hugh

    Key, Robert

    Rost, Peter

    375

    Sackville, Hon Thomas

    Townsend, Cyril D. (B heath)

    Sainsbury, Hon Timothy

    Tracey, Richard

    Shaw, Giles (Pudsey)

    Twinn, Dr Ian

    Shaw, Sir Michael (Scarb')

    Vaughan, Sir Gerard

    Shelton, William (Streatham)

    Viggers, Peter

    Shepherd, Richard (Aldridge)

    Wakeham, Rt Hon John

    Silvester, Fred

    Walden, George

    Skeet, Sir Trevor

    Walker, Bill (T'side N)

    Smith, Tim (Beaconsfield)

    Waller, Gary

    Speed, Keith

    Warren, Kenneth

    Spencer, Derek

    Wells, Bowen (Hertford)

    Spicer, Michael (S Worcs)

    Wells, Sir John (Maidstone)

    Stevens, Lewis (Nuneaton)

    Wheeler, John

    Stewart, Allan (Eastwood)

    Wiggin, Jerry

    Stewart, Andrew (Sherwood)

    Winterton, Nicholas

    Stokes, John

    Wolfson, Mark

    Tapsell, Sir Peter

    Wood, Timothy

    Taylor, John (Solihull)

    Tebbit, Rt Hon Norman

    Tellers for the Noes

    Thompson, Donald (Calder V)

    Mr. Tony Durant and

    Thompson, Patrick (N'ich N)

    Mr. Michael Neubert.

    Thurnham, Peter

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.
    MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House congratulates the Government on the success of its policies to encourage home ownership; recognises the need to achieve a proper balance between the responsibilities of the borrower, the lender and the tax payer, and greater fairness as between those on Supplementary Benefit for short periods and those in low paid employment; and notes the proposals to this end that the Government has put forward for consultation to the Social Security Advisory Committee.

Higher and Continuing Education
7.12 pm
Mr. Giles Radice: I beg to move,
That this House notes the importance of higher education for the future of the country; deplores the cutbacks in the recurrent grant to universities; condemns the failure to provide adequate resources for the public sector for continuing education and for research; and calls upon Her Majesty's Government to open up higher education to a much wider group than ever before, including mature and part-time students.
I begin by making what I hope are relatively non-controversial statements about higher education. I think that all right hon. and hon. Members agree that higher education is important for individual men and women because it builds up their information and knowledge; it develops their critical faculties and thinking powers; it encourages their interest and involvement in society and politics; and it enables them to obtain better paid and more interesting jobs.
However, higher education is important not just for individuals but for the community as a whole. Not only does it help to provide society with the pool of knowledge and scholarship that is so vital to our culture but also, as the CBI recently reminded the Government, it supplies industry with the skilled graduates and the scientific and technological research that it so desperately needs if it is to survive and prosper. Higher education trains the teachers for our schools, including those who teach the vital subjects of science and mathematics; so what happens to higher education must be a matter of national concern.
I stress also the importance of continuing education. Increasingly, as both the University Grants Committee and the National Advisory Body for Public Sector Higher Education recognised in their advice to the previous Secretary of State for Education and Science, education will need to be something that does not stop at age 16, 18 or 21. It will need to be a continuous process. Therefore we should be looking to higher education to provide the refresher and new skill courses for both industry and the professions and also an increasing number of second opportunities for adults.
Although I welcome the Government's recognition in their amendment of the importance of higher education, there is little sign in the Government's record so far that they have given priority to higher education. In fact, we are now spending a lower proportion of our gross national product on higher education than we were in the mid-1970s. So far, there is no sign of a Government strategy that will help to meet the future needs of the nation.
The Government admit that, since 1980–81, the universities have suffered a sharp cut in their resources. As the Minister with responsibility for higher education accepted in his 9 June reply to a parliamentary question from my hon. Friend the Member for Denton and Reddish (Mr. Bennett), who I am glad to see is here this evening, 13 universities suffered a cut in UGC funding of over 20 per cent. in real terms between 1980–81 and 1986–87. According to figures supplied by the Department of Education and Science, the aggregate cut over the same period for universities was 16·3 per cent.
The impact of cuts on this scale has been severe. The 1981–84 cuts fell most heavily on scientific and technological universities such as Aston, Salford and Bradford. In the current round of UGC cuts, science is still

377
being hit. The UGC is planning for cuts in student numbers in the physical sciences, mathematics and statistics.
Overall, the vast majority of universities have had to live from hand to mouth— hardly the best atmosphere in which to encourage the long-term planning and effective management for which the Jarrett committee called and that the Government say they support.
However, it is not just a question of the impact on universities. One has to consider also the effect on both the supply of graduates and research. At least 12,000 well-qualified students a year, who would otherwise have been successful, have failed to obtain university places, while the overall cut in the recurrent grant to the universities means that there is less money for research.
In addition, we are now facing a very serious brain drain, caused by poor rewards and uncertain prospects. Doctor David Ingram, the vice-chancellor of the univeristy of Kent, recently returned from a visit to the United States, said:
"American universities made it clear that they expect to solve their difficulties in recruiting new staff by taking people from Britain's universities."
Figures provided by the British embassy in Washington show that more than 1,000 engineers and scientists are entering the United States from the United Kingdom each year. Britain cannot afford to lose its best talent in that way.
I pay tribute to the fact that in a remarkably courageous and honest speech to the council of the Association of University Teachers on 16 May, the Minister with responsibility for higher education referred to
"the growing chorus of voices that is telling us that enough is enough and that the restrictions on public funding and pay that the universities have experienced in recent years cannot continue without significant damage not only to the universities directly but also to their capacity to produce the graduates and the research that the country needs."
The Minister need not feel ashamed of' what he said. He believed it and was right to say it when he did, and I respect him for it.
On the subject of research, the Government amendment refers to an 8 per cent. increase in the science budget, but it does not say that about half the expenditure on research comes through the University Grants Committee. As we have seen, the UGC funding to universities has been cut by at least 16 per cent. since 1980–81. In addition, as the Advisory Board for the Research Councils has warned the Secretary of State, the increasing sophistication of scientific equipment adds an average of 10 per cent. per annum above average inflation to research costs.
It is hardly surprising that the scientific community talks about a crisis and that a campaign to save British science was launched at the beginning of the year. The advisory board told the Minister's predecessor last year:
"Over the last five years the Government has reduced the level of investment in scientists and their research in real terms against the trend in other developed countries. The economic and social effects on the United Kingdom of this may not become obvious for a few more years. However, we should warn the Government that when they do they are likely to be grave and effectively irreversible."
I should now like to speak about what has happened in the public sector. Before the Minister alleges that I have no interest in the public sector, as he has done in a number of debates that he will remember outside the House, I should remind him that it was a Labour Government who
378
created the polytechnics. There is no doubt that they have been highly successful and that they are providing effective and relative higher education for an increasing number of graduates, including one of my daughters. Without the polytechnics, the present problems in higher education would be considerably worse than they are.
The increase in the student population which the Government amendment mentions and which no doubt the Minister will speak about, has occurred in the public sector. Many of the students who might have gone to university if the number of places had not been cut have gone to the polytechnics. The increase is more the result of good luck than of good management by the Government. The Government have failed to provide the extra resources to match the extra students.
According to Government figures, the spend per student in the public sector has fallen by 22 per cent. in real terms since 1980–81. It is the local authorities, and especially the Labour authorities together with the NAB officials, who have until now insisted on giving priority to access, and rightly so. Both the NAB, the body responsible for planning and, more recently, the Council for National Academic Awards which is responsible for validation and review, have warned about the possible threat to quality if the spend per student continues to be cut. The CNAA has said:
"Present resourcing levels will not permit the quality of courses and output to he sustained in the long run."
That is the background to the crisis of funding facing the public sector in 1987–88. I accept that the Government planning figures for that year are not immutable—that is one reason for the debate—but based on those figures the NAB committee has warned that if spending per student is to be retained and quality preserved, and if access is to be maintained, there will be a shortfall of £24 million. Unless the Government produce the extra money, that will mean that 9,500 student places will have to be cut. That is not just the estimate of the secretariat but the estimate of the NAB committee.
There is a threat to a number of polytechnic departments, including engineering departments at Sunderland and Wolverhampton. The Minister may say that this is a lot of scaremongering. I hope that those departments will not have to close, because it would be mad if they did. There is no doubt that those departments are threatened, because they have received letters from the NAB secretariat. Remember that the NAB is not in the pay of the Labour party but is trying to serve the NAB committee and the NAB council. It is an independent body, but of course it is excellently chaired by the Minister responsible for higher education, to whom tribute is due.
If the cuts in student numbers go ahead we will be turning away students who would be able to benefit from higher education, and that would be a clear breach of the Robbins principle. The Opposition believe, and our belief is supported by considerable evidence, that far more people could benefit from higher education than currently enjoy it.
The Government amendments says that substantially increased opportunities are being provided for adult and continuing education. Last year's Green Paper spoke of the importance of continuing education, but there is little evidence that the Government were prepared to provide extra resources for it.
A closer investigation of the Government's record suggests that they have cut resources for adult and

379
continuing education in a number of crucial areas. University extra-mural departments have been cut, the grant to the Workers Educational Association has been cut and local authority adult education services have been squeezed. I know that there is widespread support for the Open university and that hon. Members in all parts of the House are strong supporters of that university. It was forced to make a cut of £8 million in planned expenditure between 1984 and 1986 and sharply to increase its tuition fees. This means that the university has had to turn away 25,000 students, about half of whom wish to study science and technology. The vice-chancellor of the Open university has rightly called it a public scandal.
There is also the plight of Birkbeck college, which the Prime Minister recently praised for its achievements. She was right to do so, because Birkbeck is a unique institution that specialises in part-time education and performs a great service for the community. But, as a result of the latest round of cuts and the changed formula for part-time students, the existence of Birkbeck must now be in doubt. I hope that that is not true and that the Minister will say that he will provide resources for it. All this hardly suggests that the Government have yet given wholehearted support to adult and continuing education. They must do so because they ought to help those who want to help themselves and their country by getting a better education.
All of us who look to the decade ahead will agree that higher and continuing education is likely to grow in importance to Britain. I have already mentioned our national research needs. Industry requires a sustained supply of graduates; as the Engineering Council has reminded us, it also needs more opportunities for continuing education. On Monday, the Association of Graduate Careers Advisory Services issued its latest report on graduate employment prospects. It shows that there is already a disturbing and growing shortage of graduates in a number of key areas, and that there is a worrying 5 per cent. reduction in the number of engineering and technology graduates. What is even more disturbing for the future is the fall in the number of graduates who want to be teachers, especially of mathematics, physics and chemistry. Without the teachers, where are the scientists, engineers and mathematicians of the future to come from?
As the number of 18-year-olds begins to decline at the end of the decade, the problems could intensify. It is hardly likely that industry will need fewer graduates after 1990. If anything, industry will need more.
Mr. Harry Greenway: It is interesting to listen to the hon. Gentleman's catalogue of woe, but he has not explained what his party intends to do if it ever gets the opportunity to do something. Is he aware that vice-chancellors and principals across the country know that he is not committed to restoring any of the cuts that have been made?
Mr. Radice: If we were in power today, we would not be making cuts. When we come to office, we will immediately start to repair some of the damage that has been done to quality and research. We would provide new resources for access for mature and part-time students and for continuing education. I give the pledge that, in the mid-1990s, there will he more people in higher and continuing education under a Labour Government than is planned by the present Government.
Mr. Kenneth Hind: Will the hon. Gentleman give way?
Mr. Radice: No. I am sorry, but I must get on.
I have so far dwelt on the problems, but there are also big opportunities. In spite of the cuts, much of higher education is of a good quality. We still have high quality research institutions and departments and we have the potential for a major expansion of higher and continuing education. The fall in the number of l8-year-olds by 1990 which I mentioned earlier offers Britain a major opportunity to open up higher education to a much wider group than ever before.
I welcomed the new Secretary of State in our previous debate, but I welcome him again today if he feels like it. He has an opportunity to respond to the cries of, "Enough is enough," which were repeated by the Minister with responsibility for higher education and the chairman of the NAB board. He has an opportunity to make a fresh start. He should immediately stop the cuts in university grants for 1986–87 and 1987–88. He should give the public sector the £24 million for which it is asking. He should provide the extra resources for science and he should tell higher education that he will provide new money for access, part-time and mature students and continuing education. He must respond sympathetically to the new pay deal which has been agreed between the university lecturers and the vice-chancellors' committee.
Investment in higher education is vital for the country's future. The message which must come from this debate is that students and parents and industry and higher education are expecting the new Secretary of State to fight in the Cabinet for higher education. He will be judged not by his charm—
Mr. Bryan Gould: His what?
Mr. Radice: His charm. Nor will he be judged by his good looks or by his undoubted eloquence, but by the level of success that he achieves.
7.34 pm
The Secretary of State for Education and Science (Mr. Kenneth Baker): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
"notes the importance of higher education for the future of the country: commends the Government on the increase of 17 per cent. in full time home student numbers since 1979, on the 8 per cent. increase in the science budget for the research councils as measured against average inflation, and on the substantially increased opportunities for adult and continuing education: and applauds the Government's intention to build on these successes, particularly through further increases in participation rates for both young and mature entrants.".
I was very surprised to hear last week that the Opposition had chosen higher education as the subject for one of their Supply day debates, because it means free advertising time for the Government.
Since 1979, we have witnessed an unprecedented increase in higher education. It is futile for the Opposition to talk of cuts when there are now 77,000 more full-time home students in higher education than there were in 1979 and when the number of part-time students is 60,000 higher.
The increases are due not solely to the fact that there are more 18 and 19-year-olds. About one quarter of the increase can be attributed to the demographic bulge. Most of the rest is due to the increase in the proportion of 18 and 19-year-olds who enter higher education, which has risen

381
from 12·4 per cent. in 1979 to 13·9 per cent. last autumn. There has also been a 15 per cent. increase in the number of mature entrants from 34,000 to 39,000. All these increases contrast with the falls in student numbers and participation rates between 1975 and 1979.
Our policy is that places should be available for all with the intellectual competence, maturity and motivation to benefit from higher education. We are therefore committed to a regular review of the projections of future student numbers prepared for planning purposes. In 1984–85, more young people entered higher education than had been forecast. My Department is currently preparing revised projections which take account of this encouraging trend, and I hope to publish these new higher projections in the next few months. It remains the Government's clear objective to increase the proportion of young people who enter higher education.
Much has been made of comparisons with other countries. It is difficult to establish a common basis of comparison. In Britain, we tend to focus on the number of 18 and 19-year-olds who enter full-time courses, but other countries' statistics usually include all students, including part-timers. Japan's statistics, for example, include people on correspondence courses, and I understand that the figures for America include all those who undertake professional training in law, accountancy surveying, and the like. Nor must we forget that higher education courses in Britain are shorter and usually have lower wastage rates than those in other countries.
This is real statistical treacle and we must tread very warily. It is thick treacle and, treading as warily as I can, I must say that the best comparison is of the proportions who gain degrees and higher diplomas. On that basis, Britain is a little way behind Japan and America but on a par with achievements in France and West Germany and better than the rest of Europe.
Mr. Radice rose—
Mr. Baker: I therefore deplore the Opposition's continued use of statistics of doubtful validity to make improper comparisons and to knock the achievements of our higher education system. I am aware that the hon. Member for Durham, North (Mr. Radice) wants to intervene. I had to listen carefully when he was interrupted by my hon. Friend the Member for Ealing, North (Mr. Greenway) regarding the commitment about Labour's spending plans for higher education. The deputy leader of the Labour party—
Mr. Radice: A very good man.
Mr. Baker: Yes. I shall come to his opinion of the hon. Member in a moment.
The deputy leader of the Labour party made a speech a little while ago, about which The Times Educational Supplement of 20 June 1986 said:
"Hattersley rejects rapid university expansion."
The Guardian of 14 June 1986 said:
"Hattersley trims hopes on higher education."
The Morning Star, blunt as ever, on the same date said:
"Expansion not on, Hattersley tells dons."
The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that the money for higher education
"will not be all that you need, even less will it be all that you ask for. To be frank, reasonable though I know him to be, I doubt if it will he all for which Giles Radice asks."
What a volume of condescension there was in the phrase,
"reasonable though I know him to be."
382
He is a reasonable man—we are all reasonable men—but I have never known the adjective "reasonable" to be used in such a dismissive, cutting and final way.
Mr. Radice: The quotation continues:
"We will replace the age of steep decline in higher education funding with an era of gradual expansion. If there is to be an argument between us it will be about the speed of improvement not the pace of deterioration or even the duration of stagnation. And I hope that my frankness in qualifying my promise of expansion will convince you of my sincerity in making the promise."
I have the shadow Chancellor on my side. Does the Secretary of State have the Chancellor of the Exchequer on his side? We shall have to see.
Mr. Baker: That was most moving. I have a quotation from the leader of the Labour party, not the deputy leader. The right hon. Member for Islwyn (Mr. Kinnock), at a press conference — I expect the hon. Gentleman was present—was asked by Beverley Anderson, an Oxford polytechnic lecturer and a former Oxford city Labour councillor:
"You have to tell us how much money your education plans will cost and how much will go on our taxes and rates. If you do not, we will not take you seriously."
As the hon. Gentleman knows, there was no answer to that question.
The hon. Gentleman said a great deal about cuts in university funding. I acknowledge that the previous public expenditure White Paper envisaged that grants to universities would be reduced in real terms by 1988–89. We never disguised the fact that that would present universities with a difficult task, especially as, at the same time, we are asking them to improve and reshape their provision in the light of developing national needs.
Against that background, my predecessor announced five weeks ago that the Government are ready to increase financial provision for the universities, provided they demonstrate real progress in implementing and building on the changes that are needed. Those changes include better management, improved standards of teaching, selectivity in research funding and rationalisation of small departments. I shall be discussing the way forward with the University Grants Committee and the Committee of Vice-Chancellors and Principals during the next few months before reaching decisions on public expenditure in the autumn.
To those hon. Members who persist in favouring press speculation to fact, I must reiterate that the UGC has made no recommendations to me about university closures. I can categorically state that the Government have no plans for closures. This emphatically does not mean that every faculty can expect to continue as it is. Professor Bernard Crick, who is not a subscribing member of the Conservative party, in The Observer last Sunday questioned whether every university should offer such a wide range of studies — what he described as a department store approach.
There must be scope for change and reform. Patterns of study and research cannot remain inviolate and unchanged for long periods.
A hundred years ago in Oxford, 93 per cent. of students—all men— studied arts subjects, mainly Greek, Latin and theology. Only 7 per cert. studied mathematics and the natural sciences. Today, the pattern is completely different. Though still a centre of excellence for the study of classics and theology, only 8 per cent. of Oxford

383
students study such subjects, but about 40 per cent. are on science courses, and that picture is mirrored throughout the country.
My predecessor but one, my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle), encouraged moves to change the balance between science and the humanities in higher education. In 1979, the proportion studying science was 45 per cent., with 55 per cent. on humanities courses. Today, it is almost 48 per cent. science. By 1989, it may be more than 50 per cent. science. This trend reflects the needs of our society today. For our society to be rich and prosperous, we must produce more technologists and engineers. From their talents, inventiveness, skills and energies will come the continuing wealth of our country.
The Government can take pride in the fact that they have stimulated a shift to science and engineering courses. Since 1979, the number of students on those courses has increased by 30 per cent. to 175,000, compared with an increase in total student numbers of 17 per cent. That was achieved largely through the efforts of individual universities and colleges, the UGC and the National Advisory Body, to which I pay tribute.
Contrary to what the hon. Gentleman said, the UGC is planning further increases in science student numbers. Moreover, we have given this change two boosts: first, through the information technology initiative, which created 5,000 extra places in universities, polytechnics and other colleges in electronic engineering and computer science at a cost of about £38 million over three years; and, secondly, by the engineering and technology programme announced in March last year, which will provide 5,000 additional places on high-quality first degree and masters couses in engineering, applied physics, materials science and computer science. This will cost £65 million in its first four years. In addition, industry will be contributing more than £24 million in support of the programme.
I do not for a moment undervalue the role of the study of the humanities in higher education. They are an essential ingredient in a civilised and well-balanced society and, rigorously taught, they develop analytical and critical skills much valued by employers. But we must turn out more proficient engineers and technologists at all levels in the education system.
Mr. Max Madden: How does the Secretary of State reconcile what he has just said about the need for more engineers and technologists with the massive cuts that were made in the universities of Bradford, Salford and Aston in 1981, and the major cuts in those universities' budgets that were recently announced? It does not make sense. Can the Minister explain it to my constituents who are worried about the future of our universities?
Mr. Baker: I asked my officials to discover what will be the student intake this autumn. The best advice that I have—I cannot be categorical until the universities and polytechnics start again—is that there will be increases in the student intake this autumn.
Mr. Madden: Answer the question.
Mr. Baker: That is a good answer.
In technological education, as well as the massive increase in numbers starting courses of initial higher
384
education, we have begun to make progress in the much-needed development of continuing education and professional updating. I saw something of this in a college in Southall which I visited this afternoon. My Department is playing its part through the £6 million PICKUP scheme. That is an acronym for the professional, industrial and commercial knowledge updating programme. That programme supports a range of innovative projects designed to keep people working in industry up to date through relevant courses in colleges.
The hon. Member for Durham, North mentioned Birkbeck. I. too, place great value on part-time courses of higher education; and, in view of the recent speculation, I take this opportunity to commend the important contribution which Birkbeck makes in this regard. As I have already told the House, it is for London university's court to decide how its block grant from the UGC is allocated among the university's constituent colleges. However, in the light of representations, the UGC has agreed to reconsider the weighting that it as given to part-time students at Birkbeck. We shall be watching the outcome of the committee's review with interest. Much will depend on the evidence which Birkbeck college produces and, as Sir Peter Swinnerton-Dyer, who is a highly regarded mathematician as well as the UGC chairman, has made clear, this evidence will need to add up rather better than some of the figures that have been bandied about.
I shall now deal with a matter that has been mentioned in higher education debates — the recently announced assessment of research by the UGC. I applaud the UGC's attempt to assess the research quality of faculties in our universities. Three of the factors that were taken into account were quantitative: the number of academic staff and the number of research students, income from research councils, from medical and other research charities, and research contract income from industry and from Government Departments. The fourth and perhaps most important factor was the UGC's evaluation of the quality of research in each department, having regard to the university's research statements and to the views of the research councils, other research bodies and eminent experts.
Those qualitative judgments were reached by the subject sub-committees of the UGC, so that more than 120 academics and others were involved, representing a wide cross-section of the academic community. Who else could have done this effectively? The Government could not have done it.
I appreciate that any list of this sort is uncomfortable, because there are winners and losers. But it must be right to make a differential assessment. Otherwise the whole of university research is treated like the caucus race in Alice in Wonderland—a race devised by a mathematics don in which everybody wins. It is not right for the mediocre and the inadequate to bask in the glory of the outstanding and the brilliant.
Mr. Radice: I am not raising a debating point, one of the problems for the departments affected was that they did not know the criteria for the judgments made. That is one of the difficulties of the whole UGC process, and that is why the NAB is rather superior. We have more knowledge of why the NAB has taken its decisions.
Mr. Baker: That is a fair point, which has also been put to me by certain dons. I shall certainly discuss that with

385
the UGC to see whether it is prepared to be more open about things. But having discussed the issue, I think that the work was done on as reasonable and as proper a basis as possible. It is, of course, easier to analyse the research qualities of a university than its teaching qualities. However, one is not attempting to analyse the teaching qualities of a university in this way.
The hon. Member for Durham, North mentioned research funding. The science budget—the funds that go to research councils—has grown by 8 per cent. since 1979. The science budget now stands at over £600 million. With the research funds channelled through the UGC—which the hon. Gentleman recognised as an important source — spending on the science base now stands at over £1 billion per year. The Government also support research through the departmental research and development programmes of the major departments. Expenditure by civil Government Departments totalled a further £1 billion in 1984–85. Support for innovation in industry by the Department of Trade and Industry is a substantial part of the total. That is an important contribution to research. Its emphasis is now on collaborative pre-competitive ventures, bringing together industry with scientific researchers in the universities and research councils. A notable example of that is the Alvey programme, which I launched when I was at the Department of Trade and Industry.
I should like to be able to increase overall funding further. However, some important issues must be faced. Has Britain got the balance of effort right between different areas of research? Have we got too many centres and departments engaging in research in particular areas? Would we get better value for money if the money and people were concentrated in fewer larger centres? How can we do better at carrying our research through into commercially successful innovation in industry? That is one of the most important things. For years we have been a brilliantly inventive nation. Yet time and again hon. Members could cite examples of where that inventiveness has not gone through to product development and has not led to world-beating products being on sale.
Mr. Martin Flannery: It is all a question of money.
Mr. Baker: With respect, it is not just a question of money. A team with a brilliant inventor still needs someone to get the team's act together. When I was at the Department of Trade and Industry and was involved in a research programme directly related to industry, time and again I saw brilliant, outstanding and world-beating inventions in our universities, but I rarely saw a team that could take them to the stage of exploitation and development.
Dr. Jeremy Bray: I agree that it is not just a question of money. We need a total reversal of the Government's industrial policies. Is the right hon. Gentleman aware of the recent Advisory Council for Applied Research and Development report, which took up the theme of Martin and Irvine, whose book was subtitled, "Picking Winners"? The ACARD report said that the Government should pick winners and back them from the basic research stage through to applied research and development. Does the right hon. Gentleman espouse that philosophy?
Mr. Baker: When I was at the Department of Trade and Industry I found that one of the difficulties was that although one set out to pick winners, the losers often picked themselves. That is a problem. It does not mean to say that the Government do not need to promote and stimulate projects through their various agencies. From time to time we have had to take a big chance, but one must be prepared to do that, especially with the new technology.
Mr. Flannery: Will the Secretary of State give way?
Mr. Baker: I hope that the hon. Gentleman will forgive me if I do not give way, as this is a short debate. If I do give way, others may not be able to speak.
The hon. Member for Durham, North mentioned university pay. It has been asserted that the pay of university dons has fallen 20 to 25 per cent. behind the retail prices index since 1979, and demands have been made that the Government should give an immediate undertaking to foot the bill for restructuring salaries, as proposed by the AUT and the CVCP.
The Government reject the idea that pay should be settled solely by comparison with other groups. That happened in the 1970s and resulted in the spiralling inflation from which the Government had to rescue the country. We regard the main determinant in settling public sector pay to be what the country can afford in order to recruit, pay and motivate staff of the right quality.
Mr. Radice: What about the brain drain?
Mr. Baker: I shall come to that in a moment.
I recognise the figures quoted by the hon. Member for Durham, North as being those that are constantly quoted to us by the AUT. They are derived by excluding the Clegg-equivalent award — worth 17 per cent. — from cumulative salary increases since 1979. But the Clegg-equivalent increase was paid in April and October 1980, and on that basis cumulative salary increases between October 1979 and April 1985 — the time of the last salary increase—have almost kept up with inflation.
Nevertheless, there is some evidence to suggest that the present salary levels are not attractive to staff in those science and engineering disciplines where demand for skills is high. The proposals to which the hon. Member for Durham, North referred have indeed been put to the Government. I do not want to say anything about them now, except that, broadly speaking, we regard them as constructive, although there are some aspects that need to be developed further. Our willingness to consider making extra funds available will depend on the readiness of the universities and of the university lecturers to agree a new pay structure that provides greater flexibility and helps in the recruitment and retention of staff of an appropriate quality.
I turn to the polytechnics and to higher education outside the universities. That sector is crucially important and often attains a very high standard. I want to emphasise how vital it is. It now provides 55 per cent. of our higher education places, covering the polytechnics, which provide for some 30 per cent. of all higher education students, some 29 institutions that are grant-aided by my Department, providing 5 per cent. of all places, and a further 20 per cent. of all places are provided by 340 local authority colleges. There has been a dramatic and most welcome increase in the number of students in this sector

387
since 1979. That growth in home and European Community students has amounted to 35 per cent. That striking success contrasts with what happened under the previous Labour Government when, between 1975 and 1979, there was a reduction of over 6 per cent. in the number of public sector students. I do not know what the hon. Member for Durham, North was doing when he trooped into the Lobby in support of those cuts.
Public sector higher education has made a major contribution to the significant switch towards science and technology. Enrolments in England in those subjects have increased by 62 per cent.— almost double the average for other subjects. I am also glad to be able to report that we have reversed another trend. In 1975, women represented 37 per cent. of public sector students. By 1979, under a Labour Government, the figure had fallen to 35 per cent. It has now recovered to 39 per cent., and is set to grow further.
I must pay tribute to the exemplary record of polytechnics in serving the needs of industry, commerce and the professions. Between 1979 and 1985 the polytechnics' income from research, consultancy and other services rose by no less 'than 85 per cent. in real terms. I am sure that hon. Members will have visited departments doing quite outstanding research. I remember seeing some very sophisticated chip technology using gallium arsenide in one polytechnic research department, and the standard was higher than that of much of the work carried out at universities.
I shall give three examples of the contributions being made by polytechnics. I believe that we should sing their praises rather more. North Staffordshire polytechnic, which I visited a couple of weeks ago, is doing splendid work in computer-aided design and engineering, and in computer studies generally. I was interested to note that it came top for computer studies in the recent employers' poll on polytechnics in The Sunday Times. More than 400 companies—which will ultimately provide the jobs— were asked, and that polytechnic came out top for the polytechnics and third in the overall list, after two university departments.
There is also the Hatfield polytechnic, which came top in mechanical engineering and has provided an invaluable service through its HERTIS scheme, based on its library, which provides local firms with instant access to a whole range of relevant commercial and industrial data.
Finally there is the Polytechnic of Central London. It has built up a very exciting research programme in sectors such as electronic engineering. It has attracted support from a variety of sources, including my old Department, the DTI. It is also seeking to develop a programme to allow former students with promising ideas to develop them on a commercial basis—what the hon. Member for Durham, North was getting at — using the polytechnic's facilities and with finance from the venture capital market.
The Government have a good record on higher education, but there is no cause for complacency. I should like to see more of our young people at 18 and 19 going on to some form of higher education. Over the next few years, the actual numbers of 18 and 19-year-olds will fall substantially, and this will lead to quite a lot of necessary adjustments in higher education. I hope also that it will be
388
possible for us to attract into higher education a higher proportion of young people than enter it at present. We have done well, and we will do even better.
8 pm
Mr. Clement Freud: We are grateful to the official Opposition for tabling this motion, even if we are bemused by their claims in a recent leaflet:
"Only one party has the right package of policies to do the job. That party is Labour."
One looks eagerly at what there is in the document, and all that one finds is a list of percentage changes in UGC funding. I doubt whether that will achieve all that the hon. Member for Durham, North (Mr. Radice) claims.
I am grateful to the Secretary of State for speaking in the debate, and I particularly welcome his constructive comments on young people, women and polytechnics. It is something for which we have been waiting a long time from a Secretary of State at Elizabeth house.
Twin crises face higher education. The first is funding, and academic pay plays a large part in it, threatening recruitment and retention; one welcomed what the Secretary of State promised— that he would look into this and constructively take heed of the AUT-CVCP discussions. The UGC overall funding by redistribution involves cuts in every institution except the London Graduate Business school. I hope that that will be noted.
There is a squeeze on the unit of resource in polytechnics, which threatens 9,500 places and threatens to bring about the same cycle of mistakes as we had in 1981 in the universities.
I welcome the fact that the Secretary of State has recognised that polytechnics are doing innovative work with new students. The staff have notably increased productivity and are teaching more students. Polytechnics have, until now, felt overlooked by the Government, even while meeting the Government's wishes on links to industry and the community.
The second crisis was touched on when the Secretary of State said that money cannot solve everything, because it is one of purpose. Those in higher education no longer feel that they are valued or respected by the Government. Many universities no longer feel a genuine involvement in the life of the communities, and there is a creeping feeling that higher education is marginal to the future of Britain, which is not helped by Governmentspeak about the sector being a drain on the economy. The danger is the creeping marginalisation of higher education.
When the Secretary of State took office he was widely welcomed in the press for his presentational skills. In his speech, he showed this on the subject of polytechnics; by acknowledging and rewarding the work that they do, he has laid a good foundation for better understanding in the maintained sector.
The twin crises are exemplified by the UGC letter, which concerns not only detailing of financial distribution, in which Scotland seemed peculiarly hard hit, but overall financial reductions. I hope that the Secretary of State will speak to the Secretary of State for Scotland to bring about the amelioration of that situation. The purpose of the reductions as expressed in the selectivity and criteria adopted by the UGC, has appeared on the scene with no explicit policy debate — it is a policy of repeat and default. The UGC has plumped for research as the guiding light, relegating teaching to a by-product or offshoot of

389
this, threatening the dual support system and putting on one side anything worthy but non-traditional, such as part-time work or more generous provision for non-standard entrants.
Neither the arm's length principle nor direct funding seems to be working as it should. I can give two examples, of which the first is Birkbeck, which is funded at arm's length. The Government are leaving the UGC to change its full to part-time ratios, leaving Birkbeck a potential deficit that can be made up only by increasing fees by 250 per cent. Birkbeck does not fit into the UGC straitjacket. Students are already paying their own fees, when students in other universities get fees and grants paid for them. The average pre-tax income of a Birkbeck student is £8,300, making them more ordinary, from more ordinary backgrounds, than standard entrants. Despite that, the UGC formula gives a standard undergraduate half as much money again as one at Birkbeck. A Birkbeck student gets four years at half funding, as against three one-year full funding.
The Minister may say that this is a domestic, London university court matter in which the Government should not interfere. However, his Department has interfered so much in that which it had no right to interfere that it ill behoves him to say nothing and do nothing, while Birkbeck suffers. I hope that he will look into this with compassion.
The second example is the Open university which enjoys direct funding, but does not enjoy it a lot. Last year, it turned away 24,000 students —these are not statistics of doubtful validity—which is a record rate of rejection. The Open university could educate many more students at a marginal extra cost, possibly £100 or £200 a year each, because of its peculiar funding system and because fixed costs are such a high proportion of its expenditure. I ask the Secretary of State to think about that. The Open university has its friends and allies on both sides of the House, and it is not a political matter. We have a great deal to be proud of in having an Open university, which is now suffering.
Despite the restriction on student numbers, the demands for graduates is high and increasing. The Government believe, and they have shown this in the YTS, that upping an individual's skill level not only increases the chances of that person getting a job, but raises the overall rate of employment. University careers officers report this week that employers are having difficulty finding enough graduates and vacancies are 20 per cent. above those in 1985. However, the overall "output", in Governmentspeak, is down, despite the polytechnic having taken surplus from universities.
The Government should abandon the projection of demand set out in the Green Paper and plan for a reasonably constant APR and fill in spare capacity with other types, such as part-time courses, mature and non-A-level entrants.
Why have the Government decided to take students out of the benefit system and close off a whole avenue of consideration by the review, and why are the 16 to 19-yearolds excluded from it? Two hopeful directions have thereby been immediately ruled out by the Government's terms of reference. We invite the Government to look at the possibility of integration rather than compartment-talisation, to recognise the value of taking people off the
390
dole in order to study—with the same money— and to ensure some flexibility to meet different costs which housing benefit currently provides for students.
I ask the House to look with care at the amendment to the Leader of the Opposition's motion. It states that the Government "applauds" their
"intention to build on these successes, particularly through further increases in participation rates for both young and mature entrants."
I should like the Minister to tell the House specifically how much that will cost, how much the Government will pay towards that intention to "build on these successes" through "increases in participation."
My right hon. and hon. Friends have tabled an amendment about the 16 to 19-year-olds. The big gap in educational chances and access to higher education used to come at 11 years old, with the 11-plus. We are pleased that that no longer exists but the gap now comes, increasingly, at 16 years of age.
It is very expensive to keep a young person on at school, because not only does school cost money for the purchase of books which used to be provided, but the family loses potential money from the wage or the training allowance.
It is insane that of two options—school or dole—the dole should be financially more attractive. The fall in the number of young people staying on at school is surely a result of that. It might also be due to the attractions of YTS and its cash. There is a good case for saying that the financial disparity which attaches to each choice is adversely affecting educational participation.
The Government must set up the right structure to give young persons in education something for themselves to put into their hands. Initially it need be only a gesture. It could be child benefit paid direct to a student. Like public lending right, which the House introduced at minimal financial provision, paying young people at the age of 16, and putting such a Bill on the statute book, would pave the way to the further increases which must come.
I ask the Government to take a careful look at the options. I ask them to examine funding fees for part-timers, who are doubly disadvantaged against full-timers because they receive no grant and have to find their own fees. The Government should consider diversifying the entrance requirements to include two years of YTS. Some institutions already have special schemes. I mention in particular the black teacher trainees at the North-East London polytechnic. The Government should consider widening the requirements, which would not only increase the pool of ability, but reduce the tyranny of examinations in schools. The Government should guide the University Grants Committee towards a better ratio of money for full and part-timers.
As Christopher Ball, the chairman of the National Advisory Board and warden of Keble, has written:
"Our concern should not be that we might be putting at risk the quality of higher education by extending access to it … but rather that we are allowing to go to waste, undeveloped, too much inherent quality in our young people and in our adult population."
An alliance Government would embrace the "new Robbins" principle advocated by the UGC and the NAB in their advice to the Government before the Green Paper that
"courses of higher education should be available for all those who are able to benefit from them and who wish to do so."

391
We would do that without the qualification imposed by this Government, which renders their formal acceptance totally meaningless.
We do not believe that we are yet at the limits of useful or rewarding participation in higher education. The House will be grateful to the Secretary of State for accepting that and for giving his promise to consider a rising participation rate in higher education.
8.14 pm
Mr. Michael Shersby: I take the opportunity, as the first Government Back Bencher to speak, warmly to congratulate my right hon. Friend the Secretary of State on his splendid speech, which will do much to raise morale amongst all those interested in higher education. He spoke about the splendid opportunity which the hon. Member for Durham, North (Mr. Radice) had given him to advertise Conservative policy on higher education. I am sure that I reflect the views of all my right hon. and hon. Friends when I say that the Secretary of State took every opportunity to put his message across.
As usual, the Opposition are critical of the level of resources available, without saying how, if they were in office, they would increase them. In my judgment, the Opposition have failed to applaud and accept the reality of the 17 per cent. increase in full-time home students in universities and polytechnics since 1979, or the increased opportunities for adult and continuing education. We have heard the same old gloomy mixture from the Opposition Front Bench and from the Liberal spokesman, the hon. Member for Cambridgeshire, North-East (Mr. Freud).
We are talking about facts which call not just for a further moan about the level of resources, but for new and imaginative, resource-generating ideas to ensure that the future of our universities is secure.
I must declare an interest. I am a member of the court of Brunel university in my constituency. I regard part of my job, as the hon. Member for Uxbridge, to speak up for Brunel, for the excellent academic staff there and for the students who, between them, contribute to its enviable reputation. I do not, of course, seek to deny that Brunel has some difficult financial problems to solve.
Mr. Andrew F. Bennett: An 18 per cent. cut.
Mr. Shersby: If the hon. Member for Denton and Reddish (Mr. Bennett) will contain himself, I shall give him the real figures and he will be able to listen to my proposals for resolving the difficulties.
Brunel university has to cope with a reduction of £600,000 in its annual grant, despite receiving £13·1 million from the University Grants Committee, plus some additional fees for computer board income, making a total of £15 million. That is causing understandable concern to members of the Association of University Teachers who lobbied me recently. I represent many of them and their future is of great importance to me. The hon. Member for Durham, North will know of my interest in the AUT. I told its members, as I now tell the House, that I shall make their views known, without pulling my punches.
They and I know that one way of cutting costs is to eliminate teaching posts. Naturally, that worries them greatly. But even that is not an easy option because of the
392
present position on academic tenure. I hope that my hon. Friend the Under-Secretary of State will say whether the Government have any plans to abolish tenure. If they do not have such plans, other ways must be found to provide the necessary resources and to generate additional income. It is that latter possibility that I wish to explore in the debate.
If I branch into areas which are a little unconventional in a debate on higher education, I hope that the House will bear with me, because only by being innovative and creative can we look forward to providing the science and technology that we need for the future.
There may be some scope for further industrial research grants, but that scope is patchy and limited. It could, for example, produce another £250,000 profit, but that would still leave Brunel short of about £350,000 in the coming year.
Let us consider what positive options could be open not only to Brunel but to other universities that have been mentioned in the debate. The Government could make a meaningful contribution if it were made easier for industrial firms to establish a presence on university campuses to collaborate with academic departments. My right hon. Friend, with his creative and innovative approach to education, should urgently discuss that proposition with our right hon. Friend the Chancellor. Although under certain circumstances a university can keep the full rent for such an arrangement, those circumstances are still limited and there are still Treasury blocks. It is part of the job of every Member of Parliament to try to remove Treasury blocks. I am positive that my right hon. Friend will be in an admirable position to do so before we next debate this matter.
We need to encourage industry, through positive measures, to move on to the campuses and allow the universities to keep the rent. If a university could demonstrate that a commercial presence occupying space on its campus was to the benefit of both the university and the company and that it was not just a straightforward property deal, it should be allowed to retain the full financial benefit. That could generate considerable additional income.
The Government should do more to help establish departments of small firms in the universities. How would that work? If the House will forgive me, I shall take Brunel as my example because I know it well. The relationship that Brunel has with the Henley management college—one of the world's premier business schools — is well known. The strength of experience of Henley, together with Brunel's strength in applied science and technology, would provide a powerful base for the establishment of a chair of small firms. That chair could be concerned, first, with the technology transfer on which high-tech small firms are so dependent, and secondly, with the problems of management and finance.
Brunel and other similar universities, together with such colleges as Henley, have the expertise to provide a stronger base than most. I am sure that there are many other ways in which the whole concept of developing a chair of small firms could be progressed. What would it cost? It might be £30,000 a year, but that is only part of it. It would need at least two other academic posts and, perhaps, a research assistant.
I wonder what such an innovation would do for Britain. It would provide impetus to the development of short courses for those concentrating on the establishment of

393
small firms. It could also stimulate research into the creation of conditions that would provide the best opportunity for small firms to succeed. Is there any identification of the common thread that must exist between those small firms that succeed and those that do not? I doubt whether there has been any systematic analysis of that, but there should be.
Why is it that only one third of 1 per cent. of graduates — other than in the professions—start businesses of their own, while in America the figure is 2·5 per cent. and in Japan it is 3 per cent.? I did not hear anything in the remarks of the hon. Members for Durham, North and for Cambridgeshire, North-East about that very important aspect of university life. I am sure that it is not because they are not interested in it, but merely because they wanted to deal with other matters. No doubt they would agree with me that the development in our universities of an understanding of what is required from graduates to obtain their degrees and contribute to small firms is vital.
I shall repeat the figures — only one third of 1 per cent. of graduates, other than the professions, start their own businesses, while in America it is 2·5 per cent. and in Japan it is 3 per cent. Why is that?
One reason, perhaps, is that a new approach is required towards putting over the technique necessary in determining markets for products and services. That should happen at undergraduate level for those taking a degree in areas with developing technology that could be exploited if only they knew how and had the enthusiasm and drive to have a go. Surely that is where a heavy orientation towards short courses should be available.
Our country desperately needs more small firms to widen and expand our industrial and commercial base and to create new jobs for the future. Is not that, perhaps, where a partnership between Government, industry and the universities could make a major contribution to encourage more of our best young people to have a go?
The Government, through the Department of Employment, have already made a commendable start in aiding graduates towards self-employment. The graduate enterprise programme is an excellent system for linking graduates with the world of enterprise and small business. It is, of course, an awareness programme providing information about what a career in small business enterprise is like and how graduates have successfully started their own businesses or become members of a small business management team.
It is good to see the scheme operating in cities and towns such as Durham, Salford, Sheffield and many others. It is also encouraging to note that graduates of any discipline are welcome and that allowances and research budgets are available up to £1,250. That scheme is complemented by the graduate extension scheme. It is encouraging to have sponsorship for the various programmes coming from many well-known industrial and commercial firms.
I invite hon. Members who have not studied those schemes to do so—they are very interesting. They are not generally thought of in terms of higher education because they come under the auspicies of the Department of Employment. They should be much more widely known and regarded as part of higher education. Is that not the basis of an idea that my right hon. Friend's Department could extend to provide more industrial sponsorship for postgraduate courses? Surely it is worth much closer examination.
394
There is a need to ensure that more students can benefit from higher and continuing education. I greatly welcome my right hon. Friend's announcement on 18 June of a review of the whole structure of student support. It has been widely welcomed by my constituents, be they parents or students. I am especially glad that my right hon. Friend has announced an increase of £36 in the maintenance grants to students living away from home from the beginning of the next academic year. It is a small but useful addition to the 2 per cent. announced last December. It is an overall increase of 4 per cent., which with falling inflation will be more welcome than it has ever been before — [interruption.] —perhaps even to constituents of the hon. Member for Stoke-on-Trent, Central (Mr. Fisher), whose bad manners I have observed.
I hope that my hon. Friend the Under-Secretary will have every success with his review. I am especially glad that he will consider sponsorship by employers as well as other ways of ensuring that our students can look forward to a more secure and widely based financial support structure.
8.30 pm
Mr. Stan Thorne: In view of the inordinately long speech to which we have just had to listen, I shall obviously have to cut the length of my speech radically if my hon. Friends are to have the opportunity of contributing to the debate. Perhaps that was the intention of the hon. Member for Uxbridge (Mr. Shersby).
Like the hon. Member for Uxbridge, I am associated with universities. The two with which I am associated are close to my constituency but not in it. These are the universities of Lancaster and Liverpool, both of which have found it appropriate to write to me about the debate. I shall not develop their representations particularly, as I wish to deal specifically With the Open university. Liverpool university makes it clear, however, that it faces a reduction of resources for recurrent expenditure of over 5 per cent. It is obvious that this will create major problems for the university. Lancaster university has told me that its block grant will lead to a reduction in education provision on a scale not hitherto experienced.
I have had the pleasure of being a mature student. In 1966, at the age of 48, I returned to school and was there for four years. Some hon. Members may not be prepared to accept this, but I believe that I have gained considerably from that experience. I was able subsequently to take a part-time position with the OU. I lectured at an institute of technology full time and assisted the OU by dealing with students of social studies, economics and politics. I was extremely impressed with the development that took place among those students. I do not want to go into great detail, but I remember especially a railway shunter who resided at Southport, who told me, "It is hopeless. I shall never make the progress that I need to make if I am going to get anywhere." Five years later, my wife and I happened to see a television programme on the OU, during which it was stated that a shunter was receiving his BA. That man had kept to it and he had succeeded. I mention that story because there are probably several million in Britain who, if they had the same opportunity, could produce the same sort of result.
The OU is turning away 25,000 potential students each year, about half of whom wish to study science and technology. This is a national disgrace. For a premium of' about £100 per head, the OU could expand its

395
undergraduate student body by about 10,000, and that could be done relatively quickly. To expand beyond that level would require significant additional resources. Discussions are taking place with the visiting committee appointed by the DES, under the chairmanship of Sir Austin Bide, which is to advise on the OU's expansion to 100,000 undergraduates from the present level of 65,000.
There has been a 15-year history of constant demand at the OU which it has not been able to satisfy. Reductions in funding have placed restrictions on student numbers. There were 56,000 applications in 1986, and 24,000 were not offered a place. The 1987 intake will be severely affected by the promises made to some 1986 applicants that they could be considered in 1987. The median age of OU undergraduates is 32. The size of the older age groups which make up the bulk of the student population, will increase by 3 million by the end of the century. The competition for scarce jobs brings us to the qualification escalation from 0-level to A-level, from HNC to a degree and so on. Entry to many occupations requires higher qualification and the threat of selective redundancy pushes many to seek further qualifications.
A sizeable group were affected by the exclusion from teacher training in the 1970s, when a 70 per cent. reduction took place. The number of qualified school leavers with A-levels who did not proceed to higher education has increased to nearly 30,000 per year. It has been suggested by a former Minister that of those who qualified in 1985, over 40,000 failed to take up higher education. As I have said, the demand for places in the OU will continue. Indeed, the demand is such that the university will be unable to guarantee a place to anyone without requiring a wait of at least one year, and possibly two. Increased fees that have run ahead of inflation have led to an increase in the number refusing the offer of a place. Nevertheless, in 1985 the OU turned away more people than were offered places.
This is having an effect on the regional balance of the student population, and the OU's ability to remain open as a truly national institution may be jeopardised. The House may be aware that more students gain entry to universities from south of the line drawn from the Wash to Bristol than from north of that line. This may reflect unemployment and social conditions in various areas. The OU is anxious to maintain a balance between the number of entries from each of its 13 regions. Given the high and sustained demand for places at the OU, it has been suggested that there is a case for establishing a second OU to meet it. It is clear that the OU could expand its programme for undergraduates and for students continuing in education more cheaply than a new institution could be founded.
The Prime Minister and other Government Front Bench spokesmen have often referred to Britain's need to be more competitive in world markets and to improve its technological and scientific performance. They have stressed the need for more training in those subjects. The Government should find the resources to make this possible instead of merely paying lip service to the need to do so. The OU can play a major part, and if the resources are available there will be no shortage of demand. The average number of applications during 1971–79 was 41,000 a year. That increased to 46,000 during 1980–86. There have been 56,000 applicants during 1985–86.
396
I note that some of my hon. Friends are becoming agitated, and perhaps they are thinking that it is time that I brought my remarks to an end. I shall do so in deference to their need.
8.39 pm
Mr. Stephen Dorrell: I shall begin by declaring an interest, Mr. Deputy Speaker. I am a member of both the court and council of Loughborough university. It was in that capacity, if in no other, that I was interested in the speech of the hon. Member for Durham, North (Mr. Radice).
I am bound to say that I am disappointed — my disappointment is probably shared by my hon. Friends — by the fact that we did not hear what the Labour party's policy is on higher education beyond an assurance, which I hardly regard as bankable, that a Labour Government would do more than the Tories. We need from the Opposition and, as I shall argue, from the Government, a clearer statement of their objectives and of what they regard the higher education system to be about.
I have read the document which the hon. Member for Durham, North is holding up, and it does not say so. The hon. Gentleman spoke about input cuts. There have been input cuts, and I think that some of them have been damaging. It was nonsense for the hon. Gentleman to talk only about resources and not about the objectives that he has for the different parts of the higher education system.
It is a great pleasure to welcome the Secretary of State for Education and Science to his new position. At least he does look down the right end of the telescope. He does talk about student numbers, student access and subject balance. Furthermore, he does talk a little—I hope that we shall be able to encourage him to talk a little more—about the assurance of quality that those involved in the higher education system want to see. The Government should apply more effort to making clear to the House, the country, and especially the higher education system, what their objectives are for the different institutions in the system. I think that the best illustration of the doubts that continue to exist relate to what my right hon. Friend's definition would he of the purpose of the binary line. What is the difference between a university, a polytechnic and colleges in the public sector?
My right hon. Friend referred to the number of undergraduates in the system. The increase in the number of undergraduates is welcomed. If we continue to maintain the distinction between a university and a polytechnic, presumably there is a reason for doing so. We cannot continue indefinitely to lump the two together when it suits us and not define what the difference is. If my right hon. Friend addresses that issue and states what he sees as the difference, he will illuminate not only his view of the polytechnics and the public sector but his view of the university sector.
The Government attempted to address the issues in the Green Paper published last year. The Green Paper was not terribly well received in the higher education world. I hope that my right hon. Friend will be able to improve upon that when he publishes the White Paper which the Government have promised. I shall quote from the Green Paper on the specific topic of the binary line to illustrate the weaknesses contained in it. The paragraph on polytechnics takes up one half of one side of the Green Paper. The most positive comment made about the polytechnics in the Green Paper was:

397
"There is however concern amongst them at the lack of public perception of their role in higher education. The Government shares this concern and has encouraged them to take steps to enhance their image."
I am sure that that is important, but I do not think that it tackles the substance of the issue. I hope that when my right hon. Friend writes his White Paper as a result of the consultation process which the Green Paper initiated, which was undoubtedly necessary, he will deal rather more substantially with those issues. I hope that he will define his objectives in terms of the quality and the service which both the public sector and the universities should be expected to offer. I hope that he will define his objectives in terms of the number of students we can expect to see having access not simply to higher education as a whole but to the different component parts, and the reasons why.
I think that if we are given a definition of his objectives in terms of numbers, we shall have a more powerful weapon with which to defeat the NAB in the entirely specious argument going on with the NAB over the provision of places in 1987–88. I know that my hon. Friend the Under-Secretary for Education and Science — the hon. Member for Buckingham (Mr. Walden) — will know that the NAB proposes to close the Loughborough college of art and design. I know that my hon. Friend is aware, although the House is not, that Loughborough college of art and design is the second largest college of art and design in the country. It has six to seven applicants per place for its higher education courses. Ninety per cent. of its graduates go straight into full-time employment. It shares a campus with Loughborough university and, therefore, benefits from all the ambience of a wider higher education clientele. It serves the specific needs of trained designers in an industry which any visitor to British industry and most British shops will see is necessary from the most superficial examination of British manufactured goods. The institution performs a vital role in our economy. Despite the specific advice to the contrary when the issue was last raised 18 months ago by the subject committee in the NAB organisation, the House will be amazed to hear that the NAB secretariat proposed the closure of Loughborough college of art and design.
I believe that that proposal amounts to an act of extraordinary vandalism. I believe that it was isolated because it would be an act of extraordinary vandalism. I understand that the NAB is involved in an exercise in brinkmanship with my hon. Friend. It is nothing more nor less than that. Regarding the need for a definition of objectives, especially in terms of student numbers, I say to my right hon. and hon. Friends that they have an opportunity to deny the NAB the pleasure of that brinkmanship if they commit themselves to clear objectives in terms of student numbers.
In my view, the White Paper should set out the objectives in terms of student numbers and state what those students will do when they enter the higher education system. I shall conclude by making a few remarks about what I see as the objectives of the university system as a distinct group from polytechnics. I hope that my right hon. Friend will define those objectives when he writes his White Paper.
Research is absolutely fundamental to my concept of a university. The purpose of a university is to allow the ablest students to mix with people who operate on the frontiers of scientific knowledge and with new and exciting
398
ideas in the cultural disciplines. To talk about a teaching-only university or a teaching-only department in a university is to misunderstand the concept of what a university is all about.
My right hon. Friend said that we cannot expect the structure of departments in universities, or the structure of universities themselves, to be set in stone and to be sacrosanct. I accept that. If there are to be changes in the balance between departments which might, in the first instance, lead to the idea of a teaching-only department, that raises the question of whether the department is a proper university department and should continue to exist as a university department. It is because of the central role of research in my understanding of what a university is about that I hope that my right hon. Friend will feel able to make a commitment, which I know his predecessor found difficult, that we shall not go down the road of teaching-only universities — that is a contradiction in terms — that we shall resist that and regard as a regrettable compromise any suggestion that there should be teaching-only departments.
In order to have good research in universities, we must also have the facilities for research. Obviously, we must have the people to undertake research. I welcome the fact that my right hon. Friend has made clear his commitment to provide sufficient resources to ensure that there is infrastructure in research. It is not enough to say, "We are providing money to the research councils and, therefore, projects are going into the universities." The infrastructure must be there as well to ensure that the research capability of our system matches what is available on the continent and in North America. We must offer pay levels and job opportunities to academics which make it realistic for us to recruit the best into what should be the jewels of our academic system—our university research departments.
I said at the beginning that we must define our objectives by outputs, not inputs. No one can deny that higher education as a whole is an expensive commitment. We cannot make commitments— in terms of research, student grants and academic salaries — by writing cheques on an endless bank account. We should stick to the commitment that we gave in 1983–84 to level funding of the university system. I welcome the statement by the previous Secretary of State that he hoped to provide more money to the university system in 1987–88 and beyond. I hope that that will materialise and that the target to which my right hon. Friend the present Secretary of State is working is the target of level funding against a 1983–84 base.
8.50 pm
Mr. Ernie Ross: The severe cuts in funding to the Scottish universities announced on 20 May are just the latest in a series of blows to reduce the opportunities in education at every level. The effect of that cumulative reduction in funding is to reduce further the level of educational opportunities commonly available to Scottish students. It is an extension of a series of lost opportunities which have affected schools, colleges and universities since the Conservative party came to power.
Falling school rolls in Scotland should have been seen as an opportunity to improve pupil-teacher ratios and to increase the real level of funding per head. In fact, the opportunity has been wasted and used only as another excuse for wasteful cuts in Government funding. The Convention of Scottish Local Authorities has pointed out

399
the inadequacy of the Government support for Scottish schools. In 1985, not one educational authority in Scotland was able to contain educational expenditure within the relative needs assessment offered by Government. In every authority funds had to be diverted from other areas just to cover the most basic educational requirements.
The Scottish Tertiary Education Advisory Council's report took the view that declining numbers of school leavers in Scotland presented
"an opportunity for a renewed commitment to the principle of maximum access"
to further and higher education. In fact, the opposite has happened. An ever-increasing number of pupils are leaving Scottish schools with qualifications suitable for university entrance, yet the proportion of those 17-plus leavers gaining university places is not increasing. The number of new graduates at Scottish universities in each year since 1979 has remained roughly constant—in the 11,500 to 11,900 range — yet the proportion of well-qualified school leavers has increased from 8.6 per cent. to 10·5 per cent.
STEAC felt also that there were strong grounds to argue that the increases in the required parental contribution to the student grant and the cuts in real value of grant were having a noticeable effect in discouraging pupils from working homes from attempting to go into higher or further education. That is what has concerned the Opposition, but we did not hear from the Secretary of State about it.
There is clear evidence that the Robbins principle of providing university places for
"all those qualified by ability and attainment"
is being further eroded by the Government's attitude to student support. University intakes are increasingly reflecting a bias in favour of upper and middle-class families. The erosion of grants—the shifting of support from Government to students and their families—can 'only benefit the better-off and further inhibit the people from low income and unemployed households.
Donald McCallum, the chairman of the Scottish Tertiary Education Advisory Council, said that one of the most depressing things he had found during his recent review was the social difference in entry to higher education. More than 60 per cent. of children whose parents are in the professions took higher education, but that figure dropped to 5 per cent. for those whose parents were unskilled manual workers.
The National Union of Students in Scotland has attacked a Government philosophy on student support which is clearly intended
"to encourage people to go out and do part-time jobs to supplement what is recognised as an inadequate grant"
and added
"that studying for a degree a tier working all night in a bar is hardly the way to improve educational standards."
We have been making noises and speeches for the past 20-odd years about opening up higher education to those disadvantaged groups within society. But, as Donald McCallum confirmed, the figures remain firmly the same. The STEAC report concluded that financial support was "crucial" to encouraging mature students and those from working-class backgrounds to take some form of higher education.
Mr. Willie W. Hamilton: My hon. Friend is making a justified attack on the Government's educational policies. Does he recognise that there are three education Departments in the United Kingdom — for England, Wales and Scotland — and that the only Department which has not been represented during the debate on the Government Front Bench is the Scottish Education Department? That is the greatest insult to Scottish people and Scottish Members of Parliament who are interested in the whole ambit of education.
Mr. Ross: My hon. Friend is correct. Almost everyone has accepted that Scottish universities have suffered disproportionately compared with other universities in the United Kingdom. Not only the Government Front Bench but the Conservative Back Benches have been empty of Scottish Members. Not one Scottish Conservative Back Bencher has been present during the whole debate. My hon. Friend is right to draw the attention of Scottish people to that important fact.
In an increasingly complex world, both in social and technological terms, the role of the nursery, primary and secondary schools as the sources of knowledge and understanding has never been greater. The skills exhibited by the modern teacher would not be recognised by a teacher who had left the teaching profession 20 years ago and would have outstripped even the skills of a teacher of only a decade ago. Those in the schools throughout this past decade and those entering the profession of teaching have faced the greatest changes and challenges. This has happened during a decade of falling investment in education's capital resources and in day-to-day expenditure on education.
The management side of the Scottish Joint Negotiating Committee recognised in its working party report on teachers' workloads published in August 1985 that the teachers' workloads had "significantly increased" as they responded and adapted to the new working methods and conditions. If we are to ensure that more young people go on to higher and further education, it is essential that the Government take account of the various inquiries into teachers' pay. Only today it was reported that the chairman of the Scottish Examination Board, Dr. Macintosh, said, in introducing the board's submission to the main inquiry on teachers' pay and conditions, that the
"key message was that while teachers' duties on exams needed to be specified 'this by itself will not be sufficient: we also need the goodwill only a professional salary will generate and release.'"
The Labour Party is firmly of the view that the greatest asset to the education service in the "professional" approach of teachers. It is that professional approach which developed the substantial role of pastoral care for which the Scottish education system was properly noted. Similarly, the extra-curricular activities of teachers were born of that same "professional" approach. The will and the wish are clearly identified in the teaching profession to re-establish that flexible approach to extra-curricular activities which previously enriched the school experience. That is why the Government must ensure that, whatever the recommendations of the main inquiry on teachers' professional standards and financial rewards, they must provide the finance to ensure that they do not seriously affect the responsibility of the various regional authorities for other aspects of education.
During my Adjournment debate on Wednesday 18 June, the Under-Secretary of State, said that I did not refer

401
to some of the areas in Dundee university. The following morning I received a letter from Professor Spear saying that the Dundee group, which is a leading British and European group on the subject of amorphous semiconductors, is presently underpaid because of the decision of the University Grants Committee. In spite of the fact that it has been given prestigious scientific awards such as the Max Born medal, the Europhysics prize, the Duddell medal and the Maxwell premium, physics at Dundee was assessed by the UGC as being below average. That further supports the point I was making and I intend to pursue it with the Under-Secretary at a later date.
We have made our policy quite clear and we have outlined it in our document "Education Throughout Life". In spite of what Tory Members may say, the people of Britain have more confidence in that document and it is that document which will do much more for higher education in this country than anything said from the Government Dispatch Box tonight.
8.59 pm
Mr. Mark Wolfson: I congratulate my right hon. Friend the Secretary of State on his robust, encouraging and factual speech.
I want to spend a few minutes dealing with the content of higher educaton as well as expenditure. Value for money is directly relevant to my point. I want to highlight the importance of educating people at any age and stage to be as capable as possible of utilising all their knowledge, skills and abilities in work and leisure.
I shall describe what I understand to be education for capability, which is presently being promoted under the auspices of the Royal Society of Arts. That concept is already well developed in schools, and it is now appropriate to encourage similar developments in higher education. In Britain, there is an imbalance in the process described by the two words "education" and "training". The idea of the educated person is still often that of a scholarly individual who has not necessarily been educated or trained to exercise useful skills; who may be able to understand but not necessarily to act.
There have already been references in the debate to the problem of Britain often being able to develop new ideas in research and development but not being able effectively to put those ideas into productive operation. Young people in higher education increasingly specialise, and often in ways which mean that they are taught to practise only the skills of scholarship and science. They acquire knowledge of particular subjects, but they may not be equipped to use, that knowledge in ways that are relevant to the world outside the education system. An example of that is language teaching, which has recently been given a high priority by education Ministers. It has been lamentably ineffective in providing students with the ability to converse and communicate in a foreign language, even at the end of O and A-level courses.
Higher education entry requirements through the examination boards still place too much emphasis on teaching grammar and literature in language curricula at the expense of oral skills. As a result, British students, who spend as many hours learning a foreign language as their counterparts in Europe, complete their courses still inarticulate, although probably well versed in the literature and history of that language and its culture. Surely it is of far higher priority to produce students first with oral skills
402
and later with those other skills in foreign languages. Education for capability would give oral ability that first priority.
What is the fastest way to change the emphasis in language teaching? It is for university departments to require a far higher level of fluency in language than at present as a fundamental entry requirement. If that change were made—for example, if 60 per cent. of marks were given for oral skills — curricula and teaching methods would rapidly follow. They would have to. In that example I hope that I have made it clear that education for capability means the provision of knowledge and skills relevant to and useful in the outside world.
I have two other examples from engineering and medicine.
At Heriot-Watt university, the civil engineering dept has developed a radical new approach to its own teaching process—an approach designed to take greater account of' the students' needs as assessed by themselves — to help the students to know better how to learn and to establish methods by which they can assess their own progress. The details of how that is done are not for the debate. Suffice to say, the development is already proving successful.
In medicine, too, the capability required after full-time university education in some medical schools is now being more fully researched and analysed, and lessons are being drawn for changes in the structure of the curriculum.
Finally, at the North-East London polytechnic, a degree by independent study has been established, with considerable success. It allows students to achieve a degree based on the acquiring of knowledge and skills that they themselves have identified as necessary to them in 'their work and social setting.
My point is that effective higher and further education is crucial to the economic health and well-being of this country. That is a point on which the whole House is agreed. In bringing to the attention of the House those brief examples of initiatives taken within the concept of education for capability in higher education, I hope that my right hon. and hon. Friends on the Front Bench will give them and other similar initiatives a fair wind and consider how, through the direct funding within their own control, as well as through the University Grants Committee itself, such pilot schemes may be spread elsewhere. Indeed, the UGC may need to be restructured to become more user-friendly—as I would describe it—from the point of view of the user after rather than during education.
If student loans become part of the financial structure supporting higher and further education, they would have a direct effect by encouraging students to be more selective in their choice of both their university and course paying particular attention to how effective a chosen course would be in providing a capability in the world after education as well as providing knowledge that is valued for itself.
9.7 pm
Mr. Kevin McNamara: I denounce what the hon. Member for Sevenoaks (Mr. Wolfson) has just said about student loans. Nothing worse could happen to students than that they should be subject to bank managers' whims, that they should have to do without food, and that they should have to have poor hooks and live in lousy accommodation to try to make

403
ends meet. I hope that one of the first things that the next Labour Government do is establish a proper rate of student grant and work towards abolishing the parental contribution. That contribution is evil in the way in which it affects students. It is rotten, particularly in the treatment of women students, because regrettably many parents are not prepared to give women students the proper support that they should get in university, if they have to make a contribution from their income.
The Secretary of State welcomed the debate as a splendid advertisement for the Government's policies. I want to look at the Government's policies, particularly as they affect Humberside and Hull. I want to examine the two enormous blows that we have suffered in the past month of May, in our university institution and college of higher education.
I do not say that in the recent rounds Hull has been treated that much worse than most universities. They have all been treated lousily. Events since 1981 show the bad picture of what has happened under a Conservative Government to Hull university. Hull's problems have been exacerbated by a historical basis of underfunding of about £500,000 a year. There were 20 per cent. cuts in 1981, and there has been an accumulation of additional cuts since then. After the most rigorous examination of their accounts, the university authorities are trying to raise funds from all sorts of different sources. Nevertheless they project a deficit of £500,000 at the end of this year. That deficit has caused the loss of more than 120 academic posts. In May of this year, the Government announced that there would be a 5·55 per cent. underfunding in real terms to the university. That means that the projected deficit on account to the end of 1986–87 is £1,600,000. That is a lot of money, and represents a lot of teaching jobs and places going vacant. That is a despicable thing to happen to the university.
However, the Department has failed to take on board the fact that that level of underfunding will have a serious effect on the local economy and the region as a whole. A study carried out in 1981 by the Leeds school of economics stated that Yorkshire and Humberside have to depend on higher education activity to maintain economic activity in their regions.
Hull university, with its 2,000 staff, academic and others, is the biggest employer in north Humberside, apart from British Aerospace. Cuts in the university funding effect the whole region. The university has an important role to play as an institution in a depressed area. I would like to give an example of how depressed the area is. B and Q advertised for 53 jobs in the constituency of my hon. Friend the Member for Kingston upon Hull, West (Mr. Randall). The Hull Daily Mail reported that there were more than 800 applications for those jobs. That illustrates the degree of unemployment in the area. Such a high level of applications for jobs, which would not have been regarded as terribly important or desirable 10 years ago, is indicative of the importance of public funding in the area.
Some 75 per cent. of university expenditure is allocated to salaries and students are expected to spend £2,000 per annum in an area. It is clear that universities bring fresh resources into the areas. These resources are not being provided in any other way and these resources mean jobs.
404
The Leeds school calculated that for every academic post lost, another five jobs are lost in the local economy. We are not talking about ivory towers or about preserving jobs in a separate and distinct world separate from ordinary people. We are concerned about ordinary people, the cleaners on the north Hull estate, technicians, clerks, and secretaries. All manner of jobs are being lost as a result of the Government's cuts. In the face of all that, the Secretary of State wanted to talk about advertisements.
The vice-chancellor of Hull university told me that, as a result of the 120 academic posts lost between 1981–84, together with the concurrent cut in student numbers of some 17 per cent., there was probably a net loss in the local community of 1,000 jobs. Many of those jobs were lost in my constituency.
An examination of the estimate made by the NUT of the effects of the clawback shows that if another 84 jobs are lost at the university as a result of the projected deficit of £1,600,000, that will mean another 420 jobs lost in the local community. The AUT calculates that some £2 million of fresh resources are being lost to the local communities. That is a direct cut in our standard of living.
In the face of such cuts, the university is asked to develop in other ways. It has tried to do that and has been successful in high technology of one sort or another, and I pay tribute to it for that. However, there have been cuts in courses. Highly popular joint degree courses have been lost. An employer's survey of universities showed that Hull university was the tenth university from which employers wanted to take students for jobs. Yet that university's resources are to be cut.
At a more mundane level, the university has to worry about problems of routine maintenance and check to see how tatty its buildings are becoming. At one time, those buildings were a pride to society which kept them going. The Government's policy is also badly affecting staff morale.
Yesterday I took a delegation to the Secretary of State to discuss the effects of cuts in the public sector, and especially the possible loss of initial primary teacher training on Humberside. On the basis of the Leeds school model, we may lose about 400 local jobs as well as nearly 500 teacher training places.
The Government are taking away the opportunities of our local students, and, by gosh, we do not have enough local students going on to higher and further education in the north. By their cuts the Government show that they do not think that we are worth it. That is why I asked the former Secretary of State what we had done to deserve constant cuts over the decade that the Government have been power. The cuts in educational opportunities for people in my area have been savage. We have witnessed intellectual, academic and economic vandalism by the Government.
I promised to speak for only 10 minutes if I was lucky enough to catch your eye, Mr. Speaker. I have taken nine minutes.
9.16 pm
Mr. Robert Rhodes James: It is a great pleasure for me to follow the hon. Member for Kingstonupon-Hull, North (Mr. McNamara), first, because of my respect for him, secondly, because my wife was born in his constituency, and, thirdly, because my favourite and our greatest librarian, my friend Philip Larkin, was the hon.

405
Gentleman's constituent. I do not disagree wholly with the strength and fervour with which the hon. Gentleman put his case.
I warmly welcome the important steps taken by the new Secretary of State and his Parliamentary Under-Secretary to reverse certain deeply unfortunate trends in higher education that compelled me to resign from my position in December.
The Chancellor of the Exchequer's new proposals on charities, the revised student grant review, the withdrawal of certain proposals on benefits for students and the 4 per cent. increase in the grant mark a crucial turning point, though I should tell my right hon. Friend the Secretary of State that we still have some way to go.
I do not wish anything that I say to be critical of the previous Secretary of State—
Mr. William W. Hamilton: Why not?
Mr. Rhodes James: I have always had a high regard for my right hon. Friend the previous Secretary of State. The fact that our perceptions differed has not affected our personal friendship or that regard.
As I have emphasised to the House previously, when one looks back at what has gone wrong—and one has to look back over quite a period—one sees that the excessive euphoria of the 1960s was followed by excessive disillusionment. It is now time for new thinking. It is not just a question of new resources. Tragically, most of the assumptions under which Robbins operated have proved to be false.
I ask Ministers and others involved in the review to ask themselves, "What is higher education for? What is a university for? What is a polytechnic for?" My answer is that a university is a place where the love of learning for its own sake is honoured. The subject being studied does not affect that view. People who study engineering do not always become engineers; people who study history do not all become historians. The idea that if people are put into a specialty at the beginning they will emerge with that specialty is false. One needs flexibility and the burning faith of Lionel Robbins, for all his faults and for all the faults of his committee. He wanted young people to have a sniff of what higher education is all about.
I refer briefly to my right hon. Friend's remarks about academic salaries, which I most strongly welcome. They are hopelessly uncompetitive both in this country and abroad. The brain drain is a melancholy and strong reality. It is extraordinary that my 21-year-old daughter, who did not go to university, should be earning considerably more than a plasma physicist with a PhD at Cambridge university. With competition from the United States, Australia and West Germany, the position becomes unbearable. A Government who are supposed to be interested in market forces should bear this point very much in mind.
We shall await the results of the review of student loans. However, there is a substantial difference between first and second degrees. I am not opposed to a mixture of grants and loans, but very different considerations apply to the first and to the second degree.
I agree with what was said by the hon. Member for Durham, North (Mr. Radice) about the polytechnics. It is quite extraordinary that the Cambridge college of arts and technology proposes to abolish the study of geography. This is not just a constituency point. When Prince Albert
406
was vice-chancellor of Cambridge university, he introduced not only the natural sciences tripos but the humanities tripos. The two go together. Last year's Green Paper got it wrong. This time I ask my right hon Friend the Secretary of State for Education and Science and the House to get it right.
9.21 pm
Mrs. Renée Short: I have been told, Mr. Speaker, that I have three minutes, which is not very long. I thought that the Secretary of State was very complacent when he opened the debate. He referred to the problems faced by the polytechnics. Two polytechnics are under threat in the west Midlands. One is Coventry, where planning courses have been told to close. The other is Wolverhampton, where the engineering department has been told to close. That has been denied. We do not know where we are. Perhaps the Minister who is to reply will say exactly what the position is.
One of the highest levels of unemployment is to be found in the west Midlands. An enormous number of engineering firms have gone to the wall because of this Government's policies. When the Labour party takes office, we shall need as many engineers and technologists as we can get. In this appalling period of unemployment, technology is advancing with great difficulty. The Government remain complacent, boringly unadventurous and incapable of understanding the technological revolution that has hit industry throughout the world, if the present policies are allowed to continue, Britain will be incapable of standing up to the competition from the more industrially advanced countries.
The Secretary of State referred to Japan. I shall use just a minute to refer to a valuable lecture by Professor Jost of Manchester on technology versus unemployment. He said that Japan, with twice the population of the United Kingdom, produces 60,000 more qualified engineers than the United Kingdom, of whom about 6,000 are engineers with higher degrees. In 1984, Japan produced nearly 19,000 graduates in electrical and electronic engineering, while we produced a mere 2,400. In addition, Japan produced over 2,000 graduates with higher degrees—the equivalent of MScs and doctorates—in these disciplines, yet Japanese industry complains of a shortage of electronics and software engineers. It is time that the United Kingdom produced more scientists than Japan.
Unemployment in this country is appalling. We are short of industrial investment and we are not producing the technologists and the engineers that we shall need. After the next general election when a Labour Government take office they will carry out massive investment in the deprived areas of this country, such as the west Midlands and Hull. We shall ensure that jobs are provided and that the standard of living of our people is raised.
9.24 pm
Mr. Kenneth Hind: There are more students in higher education today than ever before and that is to the credit of a Conservative Government and their policies. We must given credit to the academics on the Robbins committee whose foresight for the development of our higher education system has ensured that many of us in the House are here because of Robbins. Many hon. Members are Robbins' children.

407
The Green Paper was mentioned. I hope that the Secretary of State will bear in mind some of the criticisms that have been levelled at the drop in the number of students by 1995–96 to 450,000. Many of us feel that the numbers are underestimated because we look at the number of children from middle class families who consistently seek higher education and see little or no change in that demand. If that demand prevails, there will continue to be a shortfall. I urge Education Ministers to look carefully at the statistics comparing Britain to our economic competitors. If they do that, they will see that the number of people entering higher education is unfortunately below the level of some of our competitors. We must work toward increasing that number.
The Government should work to the Green Paper. In some respects it has a great role to play, but it must be kept constantly under review and we must work on a day-to-day basis, because in some of its assumptions the Green Paper may prove to be wrong. I hope that the Minister will continue the drive that was started by his predecessor about increasing resources for research. I speak on behalf of the academics of Liverpool university because I am pleased to say that I liaise between them and this House. They would like to see an increase in the facilities and the amount of money available.
Many hon. Members have spoken better than I could about the importance of research in universities in relation to our industrial output. Can we have an increase in the number of teachers of mathematics, physics and statistics? The only way to bring about that increase is to ensure that teachers in higher institutes of learning are paid proper salaries. Those are my criticisms. The Government are on the right lines, but they ought to look at the failings and try to put them right. We should use some of the money that I hope the Secretary of State knows could be negotiated in the new future to improve the standard of higher education, because that is the seed corn of Britain for the foreseeable future.
9.28 pm
Dr. Oonagh McDonald: I listened carefully to the speech by the Secretary of State. I noted his fancy footwork and the fact that he said nothing about the bids that he will put to the Chief Secretary for 1987–88 or what he expects to get. More important and significant than that, he had nothing to say about the response that he will make to the plea by the universities for £15 million reimbursement for unexpectedly high rates or about the £100 million that is desperately needed this year.
The Secretary of State's speech was far too complacent about the ability of the universities to meet the needs of our society, given the resources that are made available to them. He had nothing to say about the growing evidence of skill shortages in high technology subjects, or about the shortage of well over 1,000 physics teachers in our schools. He did not say that mathematics and science in our schools are all too often taught by teachers who have no proper qualifications in those subjects.
The right hon. Gentleman was far too complacent about the impact of the lack of resources on the universities' ability to teach and continue their research. The lack of resources might lead to cuts in books and periodicals, for example. There is growing and serious evidence of attacks on funds for such purposes and for
408
equipment. These are the tools of the trade. University teachers cannot work properly without adequate books and periodicals for them and their students, and it is nonsense to suppose that they can.
I should like to put in a special plea for Birkbeck college and to enter a personal note. Although I was a postgraduate student at Kings college in London, I attended postgraduate seminars at Birkbeck college when I was doing my masters degree while a full-time school teacher and again while I was researching full time for my PhD. It is one of the most valuable and important institutions in the country. It sets a pattern which, when I was a university teacher, I felt more universities should follow. It provides part-time education leading to first and higher degrees.
It is disgraceful that that institution now faces the possibility of a £2 million cut in grant. It is disingenuous of the Secretary of State to pretend that that is a decision for the University Grants Committee and that it has nothing whetever to do with the squeeze that his decisions and those of his predecessor have put on the university of' London.
The right hon. Gentleman's predecessor used to come to the Dispatch Box, look agonised and cut funds to universities. The present Secretary of State comes to the Dispatch Box, smiles and still cuts funds to universities. It reminds me all too clearly of Hamlet's words:
"one may smile, and smile, and be a villain".
9.31 pm
Mr. Barry Jones:
"The equipment and the fabric of our universities needs urgent repair or replacement and acedemic staff morale is low and declining. The system is in crisis yet employers are demanding more graduates and more research."
So says the Committee of Vice-Chancellors and Principals.
My hon. Friend the Member for Preston (Mr. Thorne) spoke passionately for the Open university, for which he has been a tutor. He has been a champion of continuing education and what he has said must be listened to and acted upon. My hon. Friend the Member for Thurrock (Dr. McDonald) emphasised the skills shortages and pleaded urgently, briefly but eloquently for Birkbeck. My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) put her speech in the context of the appalling unemployment which is to be found in and around her constituency. My hon. Friend the Member for Dundee, West (Mr. Ross) described in detail the problems of the Scottish universities and called, effectively, I thought, for more working-class entrants to the university system.
My hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) denounced student loans and depicted with his usual fervour a serious situation in the university of Hull. It is clear that the Hull deficit is mountainous. The Government should assist in that area, as in others.
I listened to the hon. Member for Uxbridge (Mr. Shersby) who, as a member of the court of Brunel university, knows that it has real problems of finance which stem from the policies of the Government that he supports.
Likewise, I heard the sharp speech made by the hon. Member for Loughborough (Mr. Dorrell). He made a telling statement regarding extraordinary vandalism. He spoke against a closure of a college of art and design. I heard the hon. Member for Lancashire, West (Mr. Hind)

409
speak as a Robbins child and for Liverpool. He made substantial criticisms. I also heard a very cogent speech from the hon. Member for Cambridge (Mr. Rhodes James), who said that the brain drain was a reality.
The Secretary of State made some welcome remarks. I refer, for example, to the need for the UGC to be more open about its assessment procedure, and to the increase in the number of women students entering the public sector of education. But ultimately he stood by the cuts. He told us nothing about the 1987–88 funding plans and he gave no hope to universities and institutions of higher education despite the predicament in which they have been placed by the Government and the previous Secretary of State.
I turn briefly to the difficulties experienced in Wales. The university has been hard hit by constant underfunding on the part of the Government. Between 1980–81 and 1986–87 the individual colleges of Aberystwyth, Bangor, Cardiff and Swansea, as well as the institute of science and technology, have suffered major cuts in real terms. At the last general election the Prime Minister promised to hold funding steady in real terms after 1984–85. She did not keep that promise. It is in that context that we must judge the recently announced recurrent grant for the Welsh colleges.
The figures for this year in Wales are portrayed as minimal. That is misleading. They are very serious indeed. The UGC has calculated that the true rate of inflation in universities is about 5·25 per cent. It is with sadness that I say that the universities of Bangor and Swansea have suffered the severest blows. The average cut in Wales is even greater than the average for Scotland and is much higher than that for England. There appears to be a bias towards the comfortable south, and against Scotland, Wales and parts of the north of England. University staff in Wales, as well as the general public, are bitter about that, because Wales has had a raw deal.
The UGC did not publish its research criteria, but well-informed leaks suggest that an important factor in the assessment of research was the amount of money received from research councils and charitable bodies. The departments in the Welsh colleges are generally small, and the emphasis on quantity inevitably militates against the university of Wales. The university lecturers whom I have met say that research council funding seems to be biased towards the south-east of England.
The other major factor in the assessment is the unit cost. It was a deliberate policy of the university to evolve in a number of separate colleges, in order to provide higher education throughout Wales. That is an essential feature of our university. The university is large in terms of numbers, but the constituent colleges are small. They provide close-knit academic and cultural communities. The geographical spread of the university of Wales is a response, in part, to the very difficult geographic factors in Wales. We do not believe that they have been sufficiently taken into account by the UGC. We believe that the Government have neglected to consider the very special factors applying to the colleges of the university.
One specific factor that seems not to have been fully considered is the university's commitment to the Welsh language and culture. Given the extent of the cuts, the provision must have been minimal. I do not think that the Government realise the severity of the cuts imposed, or the consequences in Wales at a time of high unemployment.
410
The university is a major employer, and is arguably the largest employer in Wales after local government and the Health Service. Some 6,000 people are on the payroll, and there are probably 30,000 other dependent jobs. In Aberystwyth, 30 per cent. of the town depends on the university for its livelihood. In Bangor, 23 per cent. do so. In 1985–86, Swansea university paid over £ 1 million in rates. These universities create wealth, but the Government are dragging them down, and our communities will suffer.
The universities are striking out promisingly to create a new economy for Wales, because we have a good record of collaboration with industry. Aberystwyth has opened a science park in collaboration with Mid-Wales Development. The university college of Bangor has formed a company whose principal function is the production of high technology products. The university of Cardiff has set up an industry liaison unit and has recently created 60 new real jobs. Lampeter co-ordinates closely on housing, public transport and water quality with Mid-Wales Development.
The medical school is pre-eminent in renal medicine and next month at Swansea, the innovation centre, which is already active in microprocessing, will be opened In the institute of science and technology, the staff liaise with a series of suitable entrepreneurs. It is folly for the Government to subject these university colleges to annual cuts, to threaten the creation of jobs, to slow down high-tech development, stifle initiative and bring about redundancies. These colleges deserve praise, not harassment. They need encouragement and their record is worthy of that. They have been subject to severe cuts. I have to put into context those cuts and the difficult future that the universities face.
The Government have already cut regional aid and withdrawn hundreds of millions of pounds of rate support grant. The HMI has published a disturbing report on unsatisfactory conditions in primary and secondary schools. Our Health Service is desperately underfunded. Our unemployment has increased since 1979 by some 130 per cent., and we have lost 110,000 manufacturing jobs since the Government took office. Our universities are trying to create a new economy, trying to prepare the economy for the next century against a background of harrowing unemployment, but the Government still cut funding for our universities, which deserve a special consideration that they have not had.
In Wales, the universities represent hope to our people and a better future. The people of Wales see the Government working against that future and attacking it. I urge Ministers, even at this late stage, to think about the consequences of what they are proposing in the Principality. We want the Government to halt the cuts, and introduce level funding. The damage to the system must be repaired, and the quality of research must be enhanced. Extra resources should be channelled into the system for improved access to higher education and for part-time and continued education.
As my hon. Friend the Member for Preston said, millions of people are waiting for their opportunity, and that opportunity goes if the Government continue with cuts. I hope that the Under-Secretary will say that small institutions deserve special consideration because of the cuts. I want him to ensure that the commitment to the Welsh language and culture is taken fully into account by

411
the UGC. The feeling is abroad in Wales that the Secretary of State has not sufficiently defended the interests of Welsh universities in the face of the cuts.
In its early years, the university of Wales was founded upon the pennies of the Welsh poor. Before 1883, 100,000 people — quarrymen, steel workers, coal miners, farm labourers, shepherds, foresters and housewives — gave less than half-a-crown each to help establish the university of Wales. When the university of Bangor was opened, 3,000 quarrymen marched in lines of four to celebrate the opening of their university. The great W. E. Gladstone said that the Welsh people were "deeply enamoured of knowledge". That was certainly true in the last century.
The people of Wales fought hard to create a university in Wales. Their descendants will fight hard to protect it from this Government's wanton destruction.
9.45 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): We have had an interesting debate and some interesting comments and suggestions have been made. If I am unable to answer all of them, I am sure that my hon. Friend the Under-Secretary of State for Education and Science, who has special responsibility for higher education, will have noted them and may contact hon. Members.
I must reiterate some of the main points made by my right hon. Friend the Secretary of State at the beginning of the debate because it is clear that some Opposition Members appear not to have heard them.
First, there are record numbers of students in higher education and participation rates for both young and mature entrants are at an all time high. I can tell my hon. Friend the Member for Lancashire, West (Mr. Hind) that new projections for future student numbers will be published in the next few months, and that we shall be aiming at a further increase in the proportion of young people entering higher education.
Secondly, there has been a significant shift in the balance of higher education towards science and technology. Our policies should ensure that that continues so that industry's needs for qualified manpower can be more fully met; but we have no intention of underrating the importance of rigorously taught arts and humanities courses.
Thirdly, my right hon. Friend reiterated the Government's willingness to increase financial provision for universities if they demonstrate a commitment to the pursuit of better management, improved standards of teaching, selectivity in research funding and the rationalisation of small departments.
Fourthly, we applaud the major contribution now being made by the public sector to higher education. From my experience in the Principality, I know just how vital that is.
Fifthly, we acknowledge the outstanding issues on pay. From the Government's view, progress depends crucially on the introduction of new pay structures which are flexible and responsive to current and prospective needs.
The hon. Member for Alyn and Deeside (Mr. Jones) mentioned the university of Wales and its colleges. I thought that he would. They have not come out of the University Grants Committee exercise as well as they had hoped. The same might be said of many of the universities
412
mentioned in the debate. The criteria applied by the UGC to the university of Wales were no different from those applied to universities and colleges elsewhere. I am glad that the hon. Member for Kingston upon Hull, North (Mr. McNamara) acknowledged that. The same criteria were applied to Scotland.
The reduction in the allocation for Wales should not be exaggerated. The safety net arrangements have ensured that no college's allocation is more than 0·5 per cent. lower than it was this year. Some of the university's colleges will receive more grant than this year — for example, the institute of science and technicology, St. David's, Lampeter, the college of medicine and the university registry. We did not hear about those from the hon. Member for Alyn and Deeside. There is no justification for the eschatological view that he expressed.
The hon. Gentleman pressed the case of funds for the Welsh language. The UGC has made a special allocation for that, recognising the special needs of the university in that respect. Unlike the hon. Gentleman, I do not think that the grant allocations for next year are a threat to the future of the university's colleges. On the contrary, they represent a signal for the university and its constituent colleges that urgent action is needed to find ways to rationalise the present pattern of provision.
The new approach should be seen as an incentive to build on existing strengths and to improve the management of the resources available to the colleges. If that is done, I do not doubt that the colleges will be in a stronger position to attract higher levels of funding from the UGC in future—[Interruption.] If the hon. Member for Alyn and Deeside is interested in having answers to his questions, he should listen. The UGC and I welcome the decision of the university of Wales to set up a rationalisation committee. I very much hope that the constituent colleges will participate actively in its work.
The hon. Gentleman knows only too well that direct responsibility for the university lies with my right hon. Friend the Secretary of State for Education and Science. Therefore, it would not be appropriate for my right hon. Friend the Secretary of State for Wales to have discussions with the university or its colleges about the grant allocations. However, that does not imply a lack of concern. On the contrary, we both take a close interest in the affairs of the university—
Mr. Hind rose—
Mr. Roberts: We keep in close touch with the UGC to ensure that Welsh needs are fully taken into account—
Mr. Hind: Will my hon. Friend give way?
Mr. Roberts: My right hon. Friend the Secretary of State and I met the chairman of the UGC recently to discuss next year's allocation—
Mr. Hind: Will my hon. Friend give way?
Mr. Roberts: We have taken every opportunity to emphasise the importance—
Mr. Hind rose—
Mr. Speaker: Order. If the Minister does not wish to give way, the hon. Gentleman must not persist. This has been a good-natured debate and hon. Members have been given a fair hearing.
Mr. Roberts: We have taken every opportunity to emphasise the importance that we attach to the role of the

413
university in assisting industry in Wales and in attracting new high technology firms to the Principality. The hon. Member for Alyn and Deeside may rest assured that we will continue to take a close interest in the university's programme and support the university in any way that we can.
The Opposition have entirely overlooked the spectacular growth in public sector higher education in Wales. Between 1979 and 1984, the number of students grew by 46·3 per cent.
Mr. Barry Jones rose—
Mr. Roberts: There has been a massive increase since 1979—
Mr. Barry Jones rose—
Mr. Speaker: Order. One hon. Member at a time, please.
Mr. Roberts: I know that Opposition Members do not like to hear these figures. Between 1979–80 and 1984–85, expenditure by local authorities on advanced and further education in Wales increased by 25 per cent. in real terms while student numbers increased by 46 per cent. There has been a tremendous shift towards science and technology, which we all welcome. Engineering and technology enrolments have increased by 49 per cent. over the same period. Science enrolments have increased by 67 per cent. over the same period.
Mr. Barry Jones rose—
Mr. Roberts: No, I shall not give way. I must answer the questions that have been raised during the debate. A number of issues have been raised and I am seeking to respond to them.
My hon. Friend the Member for Uxbridge (Mr. Shersby) made a series of valuable suggestions about the involvement of industry and small businesses on campuses. He referred also to academic staff tenure. There can be no doubt that tenure in the form in which it is enjoyed by many academics is a major barrier to management flexibility and efficiency in the university system. The Government intend to go ahead, as soon as the parliamentary timetable allows, with legislation to limit the nature of the tenure which can be granted in future.
A number of hon. Members have referred to the Open university, including the hon. Member for Preston (Mr. Thorne). The OU is a large enterprise already, with over 60,000 undergraduates and a further 55,000 students using its continuing education PICKUP type courses and materials. It has more students now than ever before. Its achievements are especially impressive in subjects that are regarded by many as difficult to teach, such as mathematics, science and technology. It responded last year to the Government's programme for more high technology students with proposals that earned it substantial extra funding. I know that my right hon. Friend the Secretary of State believes that the OU has not reached its full potential to expand provision in these areas.
The hon. Member for Durham, North (Mr. Radice)—
Mr. Barry Jones rose—
Mr. Roberts:—has a certain hectoring—
Mr. Barry Jones: Will the Minister give way?
Mr. Roberts: No. I will not give way to the hon. Gentleman.
I must repeat the undoubted fact that the Government's record on higher education is good. We are grateful to the Opposition for giving us the opportunity to advertise this. Indeed, we are doubly grateful because their record of falling student numbers and participation rates between 1975 and 1979 provides a telling contrast with the substantial increases—
Mr. Ray Powell: On a point of order, Mr. Speaker. Is it not customary for a Minister who is replying to a debate to allow an Opposition spokesman to intervene to ask a question? The Minister knows that my hon. Friend the Member for Alyn and Deeside (Mr. Jones) wishes to ask him some questions about Bangor university. The Minister has no answers to the questions that my hon. Friend is likely to put to him, and that is why he will not allow him to intervene.
Mr. Speaker: The more that points of order are raised, the less chance the Minister will have of responding to the debate.
Mr. Roberts: The hon. Member for Ogmore (Mr. Powell) has not been present, for the debate.
The country is benefiting already from the increased output of graduates, and especially from the 30 per cent. increase in science and technology places. However, we are not complacent. The switch towards science needs to go a little further yet. Above all, we need continuing increases in participation rates for both 18 to 19-year-olds and mature entrants to higher education. The quantity and quality of research in our higher education institutions, especially our universities, has long been recognised as a national asset. Since 1979 research councils' funding has been increased by 8 per cent. in real terms as my right hon. Friend said earlier.
Our record shows the effective use of resources and a massive increase in opportunities. That is our record in higher education. We are proud of it. Our policies will continue to build on those successes well into the 1990s. I ask my right hon. and hon. Friends to reject the Opposition's motion and to support the amendment in the name of the Prime Minister.
Mr. Ray Powell: The Minister, in replying to the debate, would not allow—
Mr. Mark Fisher rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the original words stand part of the Question:—
The House divided: Ayes 196, Noes 267.

Division No. 234]

[10 pm

AYES

Abse, Leo

Bell, Stuart

Alton, David

Benn, Rt Hon Tony

Archer, Rt Hon Peter

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

Ashdown, Paddy

Bermingham, Gerald

Ashley, Rt Hon Jack

Bidwell, Sydney

Ashton, Joe

Blair, Anthony

Atkinson, N. (Tottenham)

Boothroyd, Miss Betty

Bagier, Gordon A. T.

Boyes, Roland

Barnett, Guy

Bray, Dr Jeremy

Barron, Kevin

Brown, Gordon (D'f'mline E)

Beckett, Mrs Margaret

Brown, Hugh D. (Provan)

Beith, A. J.

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

415

Brown, Ron (E'burgh, Leith)

Kirkwood, Archy

Bruce, Malcolm

Leadbitter, Ted

Buchan, Norman

Leighton, Ronald

Caborn, Richard

Lewis, Ron (Carlisle)

Callaghan, Rt Hon J.

Lewis, Terence (Worsley)

Callaghan, Jim (Heyw'd & M)

Litherland, Robert

Campbell, Ian

Livsey, Richard

Campbell-Savours, Dale

Lloyd, Tony (Stretford)

Carlile, Alexander (Montg'y)

Lofthouse, Geoffrey

Carter-Jones, Lewis

Loyden, Edward

Cartwright, John

McCartney, Hugh

Clark, Dr David (S Shields)

McDonald, Dr Oonagh

Clarke, Thomas

McGuire, Michael

Clay, Robert

McKelvey, William

Clelland, David Gordon

MacKenzie, Rt Hon Gregor

Clwyd, Mrs Ann

McNamara, Kevin

Cohen, Harry

McTaggart, Robert

Conlan, Bernard

McWilliam, John

Cook, Frank (Stockton North)

Madden, Max

Cook, Robin F. (Livingston)

Marek, Dr John

Corbett, Robin

Marshall, David (Shettleston)

Corbyn, Jeremy

Martin, Michael

Cox, Thomas (Tooting)

Mason, Rt Hon Roy

Craigen, J. M.

Maxton, John

Crowther, Stan

Maynard, Miss Joan

Cunliffe, Lawrence

Meacher, Michael

Davies, Rt Hon Denzil (L'lli)

Meadowcroft, Michael

Davies, Ronald (Caerphilly)

Michie, William

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

Mikardo, Ian

Deakins, Eric

Millan, Rt Hon Bruce

Dewar, Donald

Miller, Dr M. S. (E Kilbride)

Dixon, Donald

Morris, Rt Hon A. (W'shawe)

Dormand, Jack

Nellist, David

Douglas, Dick

Oakes, Rt Hon Gordon

Dubs, Alfred

O'Brien, William

Duffy, A. E. P.

O'Neill, Martin

Eadie, Alex

Orme, Rt Hon Stanley

Eastham, Ken

Owen, Rt Hon Dr David

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

Park, George

Evans, John (St. Helens N)

Parry, Robert

Field, Frank (Birkenhead)

Patchett, Terry

Fields, T. (L'pool Broad Gn)

Pavitt, Laurie

Fisher, Mark

Penhaligon, David

Flannery, Martin

Pike, Peter

Forrester, John

Powell, Raymond (Ogmore)

Foster, Derek

Prescott, John

Foulkes, George

Radice, Giles

Fraser, J. (Norwood)

Randall, Stuart

Freeson, Rt Hon Reginald

Raynsford, Nick

Freud, Clement

Redmond, Martin

Garrett, W. E.

Rees, Rt Hon M. (Leeds S)

George, Bruce

Richardson, Ms Jo

Gilbert, Rt Hon Dr John

Roberts, Ernest (Hackney N)

Godman, Dr Norman

Robertson, George

Gould, Bryan

Robinson, G. (Coventry NW)

Gourlay, Harry

Rogers, Allan

Hamilton, James (M'well N)

Ross, Ernest (Dundee W)

Hamilton, W. W. (Fife Central)

Ross, Stephen (Isle of Wight)

Hancock, Michael

Rowlands, Ted

Hardy, Peter

Ryman, John

Harrison, Rt Hon Walter

Sedgemore, Brian

Hart, Rt Hon Dame Judith

Sheerman, Barry

Hattersley, Rt Hon Roy

Sheldon, Rt Hon R.

Heffer, Eric S.

Shields, Mrs Elizabeth

Hogg, N. (C'nauld & Kilsyth)

Shore, Rt Hon Peter

Holland, Stuart (Vauxhall)

Short, Ms Clare (Ladywood)

Home Robertson, John

Short, Mrs B.(W'hampfn NE)

Howells, Geraint

Silkin, Rt Hon J.

Hoyle, Douglas

Skinner, Dennis

Hughes, Robert (Aberdeen N)

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

Hughes, Roy (Newport East)

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

Hughes, Simon (Southwark)

Snape, Peter

Hume, John

Soley, Clive

Janner, Hon Greville

Spearing, Nigel

Jenkins, Rt Hon Roy (Hillh'd)

Steel, Rt Hon David

John, Brynmor

Stewart, Rt Hon D. (W Isles)

Johnston, Sir Russell

Stott, Roger

Jones, Barry (Alyn & Deeside)

Strang, Gavin

Kaufman, Rt Hon Gerald

Straw, Jack

Kennedy, Charles

Thompson, J. (Wansbeck)

416

Thorne, Stan (Preston)

Winnick, David

Torney, Tom

Woodall, Alec

Wallace, James

Wrigglesworth, Ian

Wareing, Robert

Young, David (Bolton SE)

Welsh, Michael

White, James

Tellers for the Ayes:

Wigley, Dafydd

Mr. Derek Fatchett and

Williams, Rt Hon A.

Mr. Allen Adams.

Wilson, Gordon

NOES

Adley, Robert

Dunn, Robert

Aitken, Jonathan

Durant, Tony

Alexander, Richard

Dykes, Hugh

Amery, Rt Hon Julian

Edwards, Rt Hon N. (P'broke)

Amess, David

Eggar, Tim

Ancram, Michael

Emery, Sir Peter

Arnold, Tom

Evennett, David

Ashby, David

Eyre, Sir Reginald

Aspinwall, Jack

Fairbairn, Nicholas

Atkins, Robert (South Ribble)

Fallon, Michael

Atkinson, David (B'm'th E)

Farr, Sir John

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

Favell, Anthony

Baker, Nicholas (Dorset N)

Finsberg, Sir Geoffrey

Baldry, Tony

Fletcher, Alexander

Batiste, Spencer

Fookes, Miss Janet

Beaumont-Dark, Anthony

Forman, Nigel

Bellingham, Henry

Forsyth, Michael (Stirling)

Bendall, Vivian

Forth, Eric

Benyon, William

Fowler, Rt Hon Norman

Biffen, Rt Hon John

Fox, Sir Marcus

Biggs-Davison, Sir John

Franks, Cecil

Blaker, Rt Hon Sir Peter

Fraser, Peter (Angus East)

Bonsor, Sir Nicholas

Freeman, Roger

Boscawen, Hon Robert

Fry, Peter

Bottomley, Peter

Galley, Roy

Bottomley, Mrs Virginia

Gardner, Sir Edward (Fylde)

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

Garel-Jones, Tristan

Boyson, Dr Rhodes

Gilmour, Rt Hon Sir Ian

Braine, Rt Hon Sir Bernard

Glyn, Dr Alan

Bright, Graham

Goodhart, Sir Philip

Brinton, Tim

Goodlad, Alastair

Brooke, Hon Peter

Gow, Ian

Brown, M. (Brigg & Cl'thpes)

Gower, Sir Raymond

Browne, John

Grant, Sir Anthony

Bruinvels, Peter

Greenway, Harry

Buchanan-Smith, Rt Hon A.

Gregory, Conal

Buck, Sir Antony

Griffiths, Sir Eldon

Budgen, Nick

Griffiths, Peter (Portsm'th N)

Bulmer, Esmond

Ground, Patrick

Burt, Alistair

Grylls, Michael

Butler, Rt Hon Sir Adam

Hamilton, Neil (Tatton)

Carlisle, John (Luton N)

Hampson, Dr Keith

Carlisle, Kenneth (Lincoln)

Hanley, Jeremy

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

Hannam, John

Carttiss, Michael

Hargreaves, Kenneth

Cash, William

Harvey, Robert

Chalker, Mrs Lynda

Havers, Rt Hon Sir Michael

Chapman, Sydney

Hawkins, C. (High Peak)

Chope, Christopher

Hawksley, Warren

Churchill, W. S.

Hayes, J.

Clark, Dr Michael (Rochtord)

Hayhoe, Rt Hon Barney

Clark, Sir W. (Croydon S)

Hayward, Robert

Clegg, Sir Walter

Heathcoat-Amory, David

Cockeram, Eric

Heddle, John

Colvin, Michael

Henderson, Barry

Conway, Derek

Heseltine, Rt Hon Michael

Coombs, Simon

Hickmet, Richard

Cope, John

Hicks, Robert

Cormack, Patrick

Hill, James

Corrie, John

Hind, Kenneth

Couchman, James

Hirst, Michael

Cranborne, Viscount

Hogg, Hon Douglas (Gr'th'm)

Critchley, Julian

Holland, Sir Philip (Gedling)

Currie, Mrs Edwina

Holt, Richard

Dickens, Geoffrey

Hordern, Sir Peter

Dicks, Terry

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

Dorrell, Stephen

Howarth, Gerald (Cannock)

Douglas-Hamilton, Lord J.

Howell, Rt Hon D. (G'ldford)

du Cann, Rt Hon Sir Edward

Hunt, David (Wirral W)

417

Hunt, John (Ravensbourne)

Mawhinney, Dr Brian

Hunter, Andrew

Mayhew, Sir Patrick

Jackson, Robert

Mellor, David

Jenkin, Rt Hon Patrick

Merchant, Piers

Jessel, Toby

Meyer, Sir Anthony

Johnson Smith, Sir Geoffrey

Miller, Hal (B'grove)

Jones, Gwilym (Cardiff N)

Mills, Iain (Meriden)

Jones, Robert (Herts W)

Miscampbell, Norman

Joseph, Rt Hon Sir Keith

Mitchell, David (Hants NW)

Kellett-Bowman, Mrs Elaine

Moate, Roger

Kershaw, Sir Anthony

Monro, Sir Hector

Key, Robert

Montgomery, Sir Fergus

Knight, Dame Jill (Edgbaston)

Moore, Rt Hon John

Knowles, Michael

Morris, M. (N'hampton S)

Knox, David

Morrison, Hon P. (Chester)

Lang, Ian

Moynihan, Hon C.

Lawler, Geoffrey

Murphy, Christopher

Lee, John (Pendle)

Neale, Gerrard

Leigh, Edward (Gainsbor'gh)

Nelson, Anthony

Lennox-Boyd, Hon Mark

Neubert, Michael

Lester, Jim

Newton, Tony

Lewis, Sir Kenneth (Stamf'd)

Nicholls, Patrick

Lightbown, David

Norris, Steven

Lilley, Peter

Onslow, Cranley

Lloyd, Sir Ian (Havant)

Oppenheim, Phillip

Lord, Michael

Oppenheim, Rt Hon Mrs S.

Lyell, Nicholas

Osborn, Sir John

McCurley, Mrs Anna

Ottaway, Richard

Macfarlane, Neil

Page. Richard (Herts SW)

MacGregor, Rt Hon John

Parkinson, Rt Hon Cecil

MacKay, Andrew (Berkshire)

Patten, J. (Oxf W & Abgdn)

MacKay, John (Argyll & Bute)

Pattie, Geoffrey

McLoughlin, Patrick

Pawsey, James

McNair-Wilson, M. (N'bury)

Peacock, Mrs Elizabeth

Madel, David

Portillo, Michael

Major, John

Powell, William (Corby)

Malins, Humfrey

Powley, John

Malone, Gerald

Price, Sir David

Maples, John

Proctor, K. Harvey

Marland, Paul

Rciffan, Keith

Marlow, Antony

Raison, Rt Hon Timothy

Marshall, Michael (Arundel)

Rees, Rt Hon Peter (Dover)

Mates, Michael

Rhodes James, Robert

Maude, Hon Francis

Rhys Williams, Sir Brandon

418

Ridiey, Rt Hon Nicholas

Thorne, Neil (llford S)

Ridsdale, Sir Julian

Thornton, Malcolm

Rifkind, Rt Hon Malcolm

Thurnham, Peter

Rippon, Rt Hon Geoffrey

Townsend, Cyril D. (B'heath)

Roberts, Wyn (Conwy)

Tracey, Richard

Roe, Mrs Marion

Vaughan, Sir Gerard

Rossi, Sir Hugh

Viggers, Peter

Sackville, Hon Thomas

Wakeham, Rt Hon John

Shaw, Giles (Pudsey)

Walden, George

Shaw, Sir Michael (Scarb')

Walker, Bill (Tside N)

Shersby, Michael

Walker, Rt Hon P. (Wcester)

Silvester, Fred

Watts, John

Skeet, Sir Trevor

Wheeler, John

Speed, Keith

Wiggin, Jerry

Spicer, Michael (S Worcs)

Wilkinson, John

Stevens, Lewis (Nuneaton)

Winterton, Nicholas

Stewart, Allan (Eastwood)

Wolfson, Mark

Stewart, Andrew (Sherwood)

Wood, Timothy

Stokes, John

Taylor, John (Solihull)

Tellers for the Noes:

Tebbit, Rt Hon Norman

Mr. Tim Sainsbury and

Thompson, Donald (Calder V)

Mr. Peter Lloyd.

Thompson, Patrick (N'ich N)

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.
MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House notes the importance of higher education for the future of the country; commends the Governmen.t on the increase of 17 per cent. in full time home student numbers since 1979, on the 8 per cent. increase in the science budget for the research councils as measured against average inflation, and on the substantially increased opportunities for adult and continuing education; and applauds the Government's intention to build on these successes, particularly through further increases in participation rates for both young and mature entrants.

Firearms (Fees)
10.16 pm
Mr. Clive Soley: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Firearms (Variation of Fees) Order 1986 (S.I. 1986, No. 986), dated 9th June 1986, a copy of which was laid before this House on 16th June, be annulled.
The debate, which is on firearms certificates, is one in which we want some clarification from the Government on what their intentions are. At one level, the order looks innocuous enough. The fees are being increased for certain categories of firearms and for certain purposes—[Interruption.]
Mr. Speaker: Order. Will hon. Members who are not remaining in the Chamber leave quietly?
Mr. Soley: But we are not sure whether the Government's intention is simply to raise the fees to pay for a service, or to raise the fees to restrict ownership of guns. That is not clear from the order.
I suspect that the Government are trying to have it both ways—they are trying to get more money for providing a service to the public but at the same time they are worried about the rising crime rate and rising armed crime, so they are concerned to restrict the availability of firearms in society. As I have said several times to the Minister in letters and conversations, and in questions at the Dispatch Box, there is a case for a sensible firearms policy that restricts the availability of firearms, but there is not a case for trying to control access to firearms simply by increasing the price. If one does that, one squeezes the low-income groups that use firearms. They are used for work —gamekeepers are an obvious example—and for sport, not just shooting animals and birds but for target practice, clay-pigeon shooting and so on.
We have not had from the Government a justification for the increase and, much more important, a proper, rational policy on the availability of firearms in society. In 1979, the Labour Government proposed certain increases. They fell, and then the present Government increased the fees by quite a large amount 1980. They proposed increasing them again in 1982.
Mr. A. J. Beith: The hon. Gentleman is not doing justice to the events that he is describing. Surely he recalls that the same hon. Members who voted down his Government's attempt to increase the charges then went through the Division Lobby in support of vastly greater increases after the election.
Mr. Soley: The hon. Gentleman has pre-empted me slightly, and also has the advantage of having been there at the time, which I was not. Without checking the names of all those who voted in the Lobbies at that time, I was under the impression that Conservative Members voted down an increase but then increased the charge dramatically. The present increases are well over 50 per cent. in several cases. For example, the charge for renewal of a firearms certificate goes up from 13 to £35, a dramatic increase, which is greater than the rate of inflation. As the hon. Member for Berwick-upon-Tweed (Mr. Beith) has just said, the increase is far greater than that proposed in 1979 when inflation was higher than it is today.
420
I am anxious not simply to question the Government as to whether they are trying to raise the fees to pay for a service or whether they are trying to restrict firearms; simply to bring forward such an order is not the answer to this serious problem. We must base our firearms policy on the premise that we do not use financial limits to restrict access to firearms. That would be one of the worst ways to achieve restriction. As I have said, that would hit the low income user who is a perfectly legitimate gun user. He should not be penalised simply because he does not earn a great deal or is unemployed. Using firearms for target practice or clay pigeon shooting is a very popular sport among many sections of society including low income groups.
The other criterion which we must consider—and I will address some points later to the shooting sports groups—is the recognition that we need to control the number of weapons available to society and the security under which they are kept in society. If our society had a low crime rate and there were no tensions in our inner cities and elsewhere, I would be less worried than I am today. In some countries it is fairly common for families and individuals to own guns and there is no evidence of a dramatic increase in crime as a result of that. However, we do not live in such a society. This is not Switzerland or a country where weapons are fairly common and at the same time the level of crime is low.
The crime rate in our country has been escalating dramatically. Under this Government, violent crime has been increasing rapidly, for reasons which I have eleborated upon previously. No doubt you would rightly rule me out or order, Mr. Deputy Speaker, if I went into great detail about this now. However, if we create a situation in our inner cities as a result of general economic and social policies that splinters the fabric of society, which undermines community links which prevent crime—
Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman was quite right to anticipate me. I must remind him to return to the order before the House.
Mr. Soley: I will return to the order, but I ask you to bear with me on this point, Mr. Deputy Speaker. The increase in crime as a result of social policies has a link with violent crime. If we try to control the availability of weapons by putting up the price, that will simply hit the low income groups. That will not deal with the problems in the inner cities.
It is probably true to say—although the figures may be interpreted in other ways— that legitimate users do not, in any real sense, cause violent crime. However, if we allow the number of weapons to increase considerably in society, that will introduce a gun lobby into the United Kingdom. We have avoided that so far but it has not been avoided in the United States.
Sir Geoffrey Johnson Smith rose—
Mr. Soley: Increasing the number of guns available to society would increase the difficulties faced by the police in tracking down weapons. There is considerable evidence that weapons illicitly used in our society either come from imports—which is probably their main source—or from people who have legitimate firearm certificates but who are prepared illegitimately to make weapons available, either by sale or other methods, to people who are not entitled to own them.
Sir Geoffrey Johnson Smith: I sympathise with one or two of the points which the hon. Gentleman made at the beginning of his speech. However, I believe that he is entering dangerous territory. I speak as the president of a rifle club and I do not represent a gun lobby. I am not aware that the increase in violent crime, or the use of firearms in this country to carry out crimes, is any way attributable to arms possessed by bona fide rifle clubs. Would the hon. Gentleman agree that there is no evidence of theft from such clubs to account for the increase in violent crime?
Mr. Deputy Speaker: Order. We should not go too far down that road. The order deals with the variation of fees and it would he out of order if the debate turned into a discussion of the incidence and causes of crime.
Mr. Soley: I agree with your sentiments, Mr. Deputy Speaker, but the argument is specifically about the purpose of the fees increases. If the Government are increasing fees to pay for a service, that is one thing, but there are suggestions that the Government are increasing the fees to keep down the supply of weapons. So there is a link.
I agree with you Mr. Deputy Speaker, that it would be wrong to have a debate on crime prevention, but I must tell the hon. Member for Wealden (Sir G. Johnson Smith) that I did not mention rifle shooting. I talked about guns generally and I am particularly worried about handguns and shotguns. Also, I did not talk much about theft. I said that it seemed to me that the main problems arose from imports and from people who legitimately held weapons, having a firearms certificate, being prepared to make those firearms available to others who were not entitled to own them.
There are no figures to support my case, but if the hon. Member for Wealden goes round certain inner city areas he will not have difficulty in buying weapons from various people, many of whom have firearms certificates. I cannot give the hon. Gentleman the figures—
Mr. Jerry Wiggin: Outrageous.
Mr. Soley: It is not outrageous. It is common sense and common evidence from those who live in inner city areas and from many of the things that the police say. I advise the hon. Member for Weston-super-Mare (Mr. Wiggin) to talk to the police. They will give him the sort of evidence that I am talking about.
Mr. Douglas Hogg: The hon. Gentleman has expressed his worry about the unlawful possession of shotguns. Will he tell us whether it is the policy of the Labour party to extend the firearms certificate system to shotguns—
Mr. Deputy Speaker: Order. I hope that the hon. Member for Hammersmith (Mr. Soley) will not respond to that invitation. He would be out of order if he did so.
Mr. Soley: You are right, Mr. Deputy Speaker. I should be straying outside the rules of order if I answered that question, but if the hon. Member for Grantham (Mr. Hogg) will listen to my remarks he will learn the answer to his question.
Mr. Wiggin: Will the hon. Gentleman accept that of the weapons involved in crime — which are, after all, traceable—only a fraction of 1 per cent. are recorded under the firearms certificate system? That is the point which—
Mr. Deputy Speaker: Order. The House is debating the Firearms (Variation of Fees) Order. That intervention has nothing to do with the order.
Sir Geoffrey Johnson Smith: On a point of order, Mr. Deputy Speaker. Conservative Members are in some difficulty, because we are worried about the cost of the Government's proposals, and some of us fear that they may he a ploy to get rid of the private owner in a vain effort to control all the illegal firearms that are used —
Mr. Deputy Speaker: Order. The hon. Gentleman is making assumptions about the order that are not matters for me. I am concerned about the order and the scope of the debate, which should be related to the merits of the proposed new structure for fees. The various matters that are being raised now are neither matters for me nor relevant to the order.
Mr. Douglas Hogg: Further to that point of order, Mr. Deputy Speaker. It is being suggested, and it has not yet been gainsaid, that these systems and fees can be used as a method of controlling the possession of firearms. That is manifestly correct; they can be so used. Surely we are entitled to debate the proposition that fees should he used as a method of controlling their possession.
Mr. Deputy Speaker: Order. That is not the matter that has been referred to either In the points of order or in the latter part of the debate.
Sir Hector Monro: Further to that point of order, Mr. Deputy Speaker. The nub of the argument about the increase in fees is that the police say that it takes a very long time to investigate each person.
Mr. Deputy Speaker: Order. I do not know what the nub of the argument is, because I have not yet heard it. It might help the House if the Minister were eventually to be given an opportunity to explain the purpose of the order. In the meantime, we ought to return to the debate and to the speech of the hon. Member for Hammersmith (Mr. Soley).
Mr. Wiggin: Further to that point of order, Mr. Deputy Speaker. My hon. Friend the Member for Wealden (Sir 0. Johnson Smith) has rightly explained to the House that this debate is not simply about the amount of money that is involved. It is about the principle that underlies the order.
Mr. Deputy Speaker: The hon. Gentleman is proceeding on a point of order that proceeds upon an entirely false assumption. The order that is before the House deals with the variation of fees. Before we make assumptions about what the issue is, we ought to allow the Minister to explain the purpose of the order. Before he does so, we ought to listen to the hon. Gentleman who has the Floor of the House. Mr. Clive Soley.
Mr. Wiggin: Further to that point of order, Mr. Deputy Speaker. Surely you must allow me at least to finish the point of order that I have started. This issue is extremely important to many people. It is not simply a question of the amount of money that is involved. We must also deal with the arguments that lie behind the order. In all my experience of this place I have never listened to a debate about an order that simply relates to pounds shillings and

423
pence and not to the arguments that accompany it. I hope that you will keep a moderately more open mind about the debate that we must have on this important subject.
Mr. Deputy Speaker: Order. I think that one chairman at a time is enough. Mr. Clive Soley.
Mr. Soley: As you will recall, Mr. Deputy Speaker, some time ago I was making a speech. As I was aware of the nature of the order, I was trying to phrase my comments in a way that would be within the rules of the House and helpful to it. Although the order can be debated simply in terms of cost, you rightly pointed out that one of the difficulties of the Prayer procedure is that the Opposition have to lead the debate without first having heard the Minister.
I have already said that the underlying point is whether the Government are attempting to raise the fees in order to pay for the service or whether they are raising them in order to control the number of firearms. Within the rules of the House and within the limits of the order, I hope to describe the way in which the Minister should approach this problem instead of by an order that simply increases the fees. The availablity of firearms in society is an important issue. The rights of legitimate users of firearms are also important. By "legitimate users" I mean those who use firearms during their work or for pleasure. Those two uses must be kept in proportion.
Continuing from the point at which the trout rose to the evening fly, the shooting sports lobby needs to take on board society's concern about the increasing availability of weapons of all types, including crossbows and firearms. The Government need to take on board the fact that they must face the problem of how to deal with phasing the increases in fees and also the problem of how to control the number and type of firearms that are available.
On previous occasions I have written to the Minister about this problem and have pointed out to him that books are available on British bookstalls that advertise certain types of weapons. Not only do they do that, but they publish articles which advise people on how to use weapons in specific situations. One of the magazines I quoted had an article on how to turn a neighbourhood watch committee into a vigilante group. That magazine and a number of others of the same type are freely available in bookshops. They also describe how to get weapons and give details of the fees. I know that the Minister is aware of those things because I made him aware of them when I met him, and I also wrote to him recently.
Underlying this order is a legitimate concern of the Government: that at a time of dramatically rising crime, firearms and other weapons like crossbows and paramilitary courses that are advertised in the magazines that I am talking about, are freely and easily available in society.
On 26 February the Home Secretary said that he was setting up a review of the use of guns by the police. In response to that, I asked the Minister to include a wider review of the whole issue of' firearms—their availability, the costs of certification, and the conditions of security in which weapons were kept, and so on. In his written reply, the Home Secretary said:
424
"When the review is completed I shall advise the House of its conclusions."—[Official Report, 26 February 1986; Vol. 92, c. 564.]
My letter to the Home Secretary on 26 March was about the costing of firearms certificates. I emphasise that. The answer to the question asked in the intervention by the hon. Member for Grantham (Mr. Hogg) is partly contained in that letter. My letter said:
"We strongly recommend the establishment of a Standing Advisory Committee set up by the Home Office to review and make recommendations on such matters as firearm licensing; the number and type of firearms, replica gun and other dangerous weapons (crossbows, airguns and certain types of knife) in circulation; the number of registered firearm dealers; the growing trade in more general combat gear and training courses; the importation of firearms and other weapons; the use of weapons in crime; the minimum conditions of security in which legitimately held weapons are kept; the question of registering each shotgun with a number to ensure that they can be traced when necessary;"
That point was raised by the hon. Member for Grantham. I emphasise this part:
"and the desirability of creating a separate licensing authority to take the burden off the police."
Mr. Cranley Onslow: I am interested in the hon. Gentleman's idea of a Standing Advisory Committee. Will that have representation from shooting interests?
Mr. Soley: A lot of hon. Members and you, Mr. Deputy Speaker, are anticipating my speech. My answer to the hon. Member for Woking (Mr. Onslow) is yes, it would. I will come to that point. That Committee should have on it representatives — I emphasise the plural — of the shooting sports. Obviously, they should not form a dominant group but they should be on the Committee. A number of other people would be represented on it, including the police and criminologists. We are dealing with a complex subject and if the Government think they can get away from it by simply banging up the fees through an order which will slip through without a debate unless we in the Opposition pray against it, they are going down the wrong road.
Sir John Farr: I am endeavouring to follow the hon. Gentleman's argument. It seems to me that he would put shotgun certificates on the firearms certificate procedure. If his party were in office would it seek to limit the number of shotguns a person was allowed to own?
Mr. Soley: I make it abundantly clear that I would not legislate until I had received recommendations from the Committee that I have described. That is because the more I go into the subject. the more complex I see that it is. It is easy to make a simplistic judgment in this House or outside and to say that far too many guns are available. That view is basically right, but it needs to be argued in more detail in relation to the problems of crime in society.
It is also easy to go too far the other way, as the shooting sports lobby tends to do, and to say that there is no problem because all the people who hold guns legitimately are proper, decent users who stay within the law. That is too simple a view and I ask the shooting sports lobby to bear in mind the dramatic increase in armed crime. If we do not take that on board, we can end up only with more people owning arms, more arms being available —whether legitimately or illegitimately—and increasing the problem for society. We must deal with that problem in a much more sophisticated way than we are using tonight. That is the core of my argument.
Mr. Douglas Hogg: The hon. Member is being very candid, and we are grateful for that. As I understand him, he is saying that he and his party would greatly increase shotgun certificate fees to control the possession of shotguns.
Mr. Soley: I did not say anything which remotely resembles that. I think that controls must be of a different type. That is why I suggest the establishment of a standing advisory committee. By increasing fees, as is proposed in the order, we are hitting the legitimate low-income user. That is not a good way in which to control firearms. There is a case for controlling firearms and there is a case for saying that we will finance control out of the licensing system, but there is no case for increasing the fee to make it more difficult for low-income groups to use firearms.
To get around the problems, which we are all finding difficult, I recommend the establishment of a standing committee in the Home Office. The Minister would not then have to come to the House as he has tonight. We would have a much more informed debate and we might make better decisions as a result. There is a good case—I should not like to put it any more strongly at the moment —for a separate licensing authority. It is difficult for the police to tackle this matter without spending an awful lot of time on it, and there is dissatisfaction with how the police handle it. That may or may not be fair. I honestly do not know. I know, however, that if we tell firearms users that they must pay increased fees, they can legitimately reply, "We want some say in the type of service that we get." That is one of the reasons why I suggest that the shooting sports are represented on the advisory committee.
I have implied that the Government are at best confused and at worst deliberately confusing about their intention in the order. If they are trying to deal with the increase in armed crime, I acknowledge that there is a serious problem. The average annual use of long-barrelled shotguns in crime in the years 1974 to 1979 was 187. For the years 1980–84 it was 247. For sawn-off shotguns, the figure increased from 177 to 311. For pistols, it increased from 375 to 1,017. The average use of imitation firearms in crime increased from 86 to 130.
In those figures alone, we have a strong argument for setting up a committee such as I have described. The Government could then present the House with orders, which may well include fee increases, which would be well argued in terms of the services that are provided for legitimate users, and we could ask legal shooting sports bodies, as I have done already with individual groups, to adopt a more sophisticated and detailed argument of their case. It is not enough, as one or two have told me, to bring back capital punishment on the grounds that that will deal with armed crime. It will not. That argument is a nonsense. We need a well informed debate, whether it is about increasing fees or increasing the availability of arms.
My complaint to the Minister and my worry about the order it is that it simply increases the fees and covers over whether it is about a service or anxiety about the use of firearms and their availability. The Government have not addressed the central issue as I should have liked.
10.44 pm
The Minister of State, Home Office (Mr. Giles Shaw): The House will understand my difficulty this evening. The hon. Member for Hammersmith (Mr. Soley) gave us a full
426
and generous account of the way in which a future Government — I was not entirely clear as to their composition—would tackle, not the firearms fees order, but the Firearms Act 1968, which provides the system by which controls are applied.
We must strike a balance between safeguarding the public from the misuse of firearms and the protection of the legitimate user. I am concerned only with the fees order and with the fact that the debate is limited in time. Therefore, I shall deal rapidly with some of the salient points that worry my hon. Friends. Unfortunately, I cannot deal with the Opposition's reasons for their prayer.
May I say for the sake of clarity, if not for the convenience of the hon. Member for Hammersmith, that the fees proposed in this order are strictly to recover costs and have not been devised to regulate the number of firearms legitimately held. Nor should they be taken as a moral predication for or against legitimate users of firearms or shotguns—the shooting fraternity. It is well known that the shooting fraternity has a substantial capacity to use, control and look after firearms and shotguns, because its members are properly devoted to their sport.
Mr. Douglas Hogg: We are all delighted to hear tha: my hon. Friend is trying only to recover costs. How does he justify an increase of 65 per cent. in the context of replacing firearms certificates? Was the 1980 level too low, or has there been a 65 per cent. increase in the cost of processing applications.
Mr. Shaw: As usual, my hon. Friend precedes me by a short time. Had he listened a little longer, he would have heard the answer to his question.
Governments of both persuasions have long believed that a person who wishes to engage in an activity that is controlled in the public interest should pay the economic cost of issuing or renewing his or her licence. The inescapable fact is that income from firearms fees does not match the expenditure of the licensing system.
My hon. Friends will know the background to the order. They will recall the criticisms made of the proposal to increase fees in 1982, which was mentioned by the hon. Members for Hammersmith and for Berwick-upon-Tweed (Mr. Beith). That proposal was not proceeded with, but it is interesting to note that the fees proposed then—four years ago — were £41 for the grant and £30 for the renewal of a firearm certificate, with corresponding fees of £17 and £10 for shotgun certificates. My noble Friend the then Home Secretary was urged to introduce some standardisation of practice among police forces in their administration of the Firearms Act in an effort to keep costs down.
The Government reacted positively. In 1982 — as many of my hon. Friends will know, but as the hon. Member for Hammersmith conveniently forgot— we set up a joint Home Office and Association of Chief Police Officers working party to consider what improvements could be made to streamline and reduce the amount of work undertaken by the police. In its report, published in April 1984, the working party made several important recommendations, most of which have been implemented. It also drew up a series of standardised procedures—it was previously a major source of disagreement in the shooting lobby, which required a standardised procedure if at all possible — in the form of worksheets and

427
recommended that they be used in reviewing the level of fees to recover costs. They showed the stages of processing an average application and the most junior rank of officer who might perform each task. The fees have been costed strictly on the basis of those worksheets, with the exception of the shotgun issue and renewal fee.
Under the new costing method—I stress that it is new—some fees have been reduced and others will remain at their 1980 levels. There would have been a slight reduction of £2·50 and a slight increase of 50p in the shotgun issue and renewal fee, but since the one would have balanced the other in terms of cost recovery, we have decided to leave both at their existing levels for the present. In any event—I hope that I carry my colleagues with me on this—we do not think that it would be in the public interest to reduce the shotgun issue fee at present. I must agree with the hon. Member for Hammersmith that there is public anxiety about the use of shotguns in the commission of crimes.
In 1975, 673 burglaries and thefts were recorded by the police in which shotguns were reported to have been stolen, and some 766,000 certificates were issued. In 1984, the equivalent figures were 678 and 798,000. Therefore, there is nothing to suggest that the rise in the number of certificated shotguns is related to an increase in the number of shotguns that find their way into criminal activities.
I turn to the matter of most concern to my right hon. and hon. Friends.
Mr. Soley: I have been trying to follow what the Minister has said. Why has he rejected the ACPO recommendation that the fee should be reduced?
Mr. Shaw: That recommendation was rejected for the two reasons that I have given. First, this would signal that people could then expect to obtain shotguns more easily, and one would have to consider whether that was in the public interest. Secondly, the decrease to £9·50 on the £12 fee, and the increase to £8·50 on the renewal fee, cancel each other out.
Mr. Wiggin rose—
Mr. Shaw: I am trying to answer the point raised by my hon. Friend the Member for Grantham (Mr. Hogg), but I shall give way to my hon. Friend.
Mr. Wiggin: Does my hon. Friend accept that his Department has an extremely bureaucratic attitude towards the issue of licences? Licences could be issued more efficiently. For example, a yachtsman obtaining a licence to save his life pays something like that fee for sending a piece of paper through the post every year. If my hon. Friend looked at that point within his Department, he might solve the problem that he faces tonight.
Mr. Shaw: I am not absolutely certain that I am surrounded by a massive problem that I cannot deal with. However, a not unreasonable response to that request would be to set up a working party to examine how many minutes are required to process fees, and to base a proposal precisely on that. The information has been published since 1984, so my hon. Friend should understand the minutage required for renewal. As laid down in the Firearms Act 1968, the renewal is required to be on exactly the same terms as the grant under the 1968
428
Act. The grant and renewal have been costed on the basis of a standardised procedure, which is what the British Shooting Sports Council would wish. The time arrived at is 145 minutes. [Interruption.] My hon. Friends are now pulsating with excitement, because they cannot believe that the working party could come up with that figure.
Mr. Wiggin: Will my hon. Friend give way?
Mr. Shaw: Of course, but for the last time.
Mr. Wiggin: The other day I had my firearms certificate renewed. The very worthy constable, who is a good friend of mine and a helpful fellow, was forced to write out a lot of information in longhand, and in a most appallingly out of date and bureaucratic manner. The most modest computer, costing only a few hundred pounds, could do it.
Mr. Douglas Hogg: It did not take 145 minutes, anyway.
Mr. Wiggin: It did not take five minutes. It is ridiculous, and bureaucratic nonsense, that that should cost £33.
Mr. Shaw: I would be more prepared to bear in mind my hon. Friend's splendidly delivered strictures if, in 1984, when the working party report was published and circulated to the shooters, he had expressed an opinion about it. For some extraordinary reason, he did not. After two years, we have come to put the working party's recommendations into fee form, and now he has spoken.
I know that my hon. Friends are concerned about this, and my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) has made that clear. The Firearms Act 1968 requires a chief officer to be satisfied that the applicant for renewal has a good reason for having the firearm, and can be permitted to have it in his possession without danger to the public safety. Those are the inquiries on which the minutage is spent.
In dealing with firearms, we are dealing, as we all know, with the senior category of weapons of greater lethal propensity than others. It does not seem outrageous that, after a three-year interval, a renewal should be conducted on the basis of ensuring that there are no changes in the arrangements that were made three years previously, in the conditions under which the firearm should be used, in the land over which it should be used, in the total number of firearms and their individual numbering. The police should also find out whether there are any additions to or subtractions from the requirements of the certificate holder. All that would take a police officer some time.
The fee increases that are being debated are the first for six years. My hon. Friend the Member for Weston-superMare has to recognise that costs have risen over that time. My hon. Friend may agree that the costs of police time have risen, and that this factor should be taken into account. Costs have to be reflected in the fees that we set. A firearm and shotgun certificate is issued for three years, and the increases for the issue and renewal of a firearm certificate before us amount to approximately £3 and £4 per annum. The shotgun fees are to remain the same. I cannot accept that the net effect of this package will be to price the shooter out of his chosen sport, but I believe that we shall begin to see a full recovery of the costs involved in issuing the certificate. This is all that we are seeking to do.

429
My hon. Friends have rightly drawn attention to the fact that the biggest single increase is the 65 per cent., so elegantly pointed out by my hon. Friend the Member for Weston-super-Mare, for the renewal of category I firearm. That is based on the assessment made by the working party of the minutage involved, at the lowest cost of police officer to ensure that it is as fair as possible. I am prepared, and I have told the British Shooting Sports Council so to invite it to join us in a working party during the process of the fees being enacted. It will be up to the working party to re-examine the work sheets that we are providing as the basis for the renewal fee of the category I firearm. If it can find that the average timetable in the 43 police forces in England and Wales, whose good offices have been used to arrive at this proposal—
Sir Hector Monro: And Scotland.
Mr. Shaw: And Scotland, as my hon. Friend rightly reminds me. If the working party can show that the 145 minutage is an excess, we shall have to consider that in the renewal of the fees order, which will doubtless be before the House in three years' time.
Tonight, we have to consider fees that have not been altered for six years, and the totals show that the recovery of costs is the sole basis on which we seek to judge them. The working party reported two years ago, recommending that the cost be related to the minutage involved, and that is a not unsensible basis on which to proceed. I trust that it might at least assume proportion in the minds of hon. Members as a significant step forward from the several haphazard bases from which previous fees were calculated, and which resulted in such substantial opposition from the shooting lobby. I have seen the BSSC recently, and I know that it is concerned about the renewal of the firearms licence.
Mr. Nicholas Lyell: I welcome the offer of a working party, but will my hon. Friend simply add one point? It is that the working party will have the benefit of the supervision of my hon. Friend's jaundiced good sense, not only as to the length of time that it takes to fill in the many forms, but also as to some commonsense in the questions that are asked and the procedures that are gone through to satisfy the proper authorities that the right person has the right type of weapon in the right conditions. It seems to some of us that proceedings are often prolonged in the courts.
Mr. Shaw: My hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) will recall that the basis of the fees is set in the Firearms Act 1968. In following the procedures for the granting and renewal of category I firearms, we have to follow the correct procedure. That is the statutory position and it is not possible to vary it without primary legislation.
I hope that what I have said will allow the prayer to be defeated.
11 pm
Mr. Stephen Ross: The Minister is a very nice man, but he spoke from a rotten brief. He did much better many years ago when he abolished the Swansea licensing centre. I wish that he would deal with this matter in a similar manner.
I am not a sportsman and I do not have a shotgun, but I have a great interest in small-bore rifle clubs. They have suffered badly under such orders ever since I came to the
430
House. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) and I helped to defeat the Government in 1979. We are stuck with an increase of .E.33 and a renewal fee of £33. This affects not people on high wages but those who may have taken a cut in salary in the last few years.
I have visited the Shanklin small-bore rifle club and my hon. Friend the Member for Berwick-upon-Tweed has had representations from the Northumberland rifle club. We are talking about a legitimate sport. It is a keenly fought sport. I have travelled with club members. Why should we penalise it? Why can we not renew a licence for six years, as I proposed during the review? Why can we not give a club an overall licence? Why cannot people with shotguns pay for one licence and renew it at the same time? That would cut out some of the ridiculous costs.
We have heard statistics about the cost to the Metropolitan police of renewing licences, compared with the cost for the Isle of Wight and Wiltshire. There are vast variations, so the Minister will have to do much better to convince us that police time costs so much.
I ask the Minister to think again. It may be six years since the matter was reviewed. Inflation has increased, despite this Government's record, which we have to admit is quite good, but I ask the Minister to think about the people who enjoy the sport and to do something to help them, instead of crippling them all the time. The number of licences issued has gone down by about 50,000 since 1968, so it is obvious that people have had to give up the sport because they cannot afford it. Can we please look after small-bore rifle club members better than we have done in the past 12 years?
11.4 pm
Sir John Farr: I welcome with moderation what my hon. Friend the Minister of State has said. I shall be brief as time is short and a number of hon. Members wish to contribute to the debate.
I welcome the system that has been introduced because it will eliminate variations in charges. We have opposed increases in the past because of the wide variations and fluctuations in charges by different forces. Before the new system was established, it cost three or four times as much to be issued with a firearm certificate in London as it did in Wales or on the Isle of Wight. That was manifestly unfair. I think that the House should welcome what my hon. Friend has done through the working party. We have a detailed costing system which is fair to everybody and has resulted in a standstill in shotgun certificate fees. Indeed, there has been a reduction in charges in the light of the proposals of a previous Home Secretary in 1982, which, in his wisdom, he withdrew.
The strange increase in the cost of renewal of a firearm certificate stands out like a sore thumb. I can understand the issue of a certificate being quite a lengthy and expensive procedure, but once it is known that the man who has the certificate will not flit overnight and has been at the same address for 20 or 30 years, there is no reason why the cost of renewal should be the same, as is proposed in the order, as the cost of issuing it. I hope that my hon. Friend will put in hand straightaway his suggestion to take up this matter with the British Shooting Sports Council and shooting people so that it can be ironed out.
As has been said by some of my hon. Friends, it is to be hoped that some form of modernisation, including computerisation, can be introduced to the system. Can we look forward to a day not too far distant when firearm fees

431
will be at a standstill, or will be reduced? That is what we are looking for as regards rates, and we are in a period when the cost of living is almost stable. The Home Office is out of step when it churns out massive increases in firearm certificate fees year after year.
I reject the suggestion of the hon. Member for Hammersmith (Mr. Soley) that there is a link between armed crime and legitimate firearm owners. Expert statistical research has shown that there is no such link, and police officers will confirm that.
Mr. Soley rose—
Sir John Farr: I shall not give way to the hon. Gentleman. He has spoken for too long already. When he reads the Hansard report of his speech, I think he will regret many of the things that he said.
I ask my hon. Friend the Minister of State to bear in mind the good suggestion made by a previous Home Secretary, that a six-year certificate should be introduced for shotguns and firearms. Would that not be a way forward? Would not that lead to a large saving in administrative costs and a considerable reduction of the burden which shooting people have to face? I ask my hon. Friend with great sincerity to consider that suggestion carefully. I have the detailed proposals in my possession somewhere and I shall gladly send them to him to refresh his memory. His predecessor was convinced that his suggestion was a sensible and economic step which should be taken in the interests of the country.
11.8 pm
Mr. Ron Davies: Like the hon. Member for Harborough (Sir J. Farr), I shall be brief. I must, however, take up his reference to my hon. Friend the Member for Hammersmith (Mr. Soley) and his assertion that he claimed that there was a link between armed crime and legitimate firearm holders. That was not my hon. Friend's argument. It was the Minister who, when questioned by my hon. Friend, said that there was increasing public anxiety about the illegal use of firearms. When the Minister replies, I invite him to confirm that that was the position.
Mr. Beith: Does the hon. Gentleman recall that the Minister went further than that? He said that to put into effect the recommended reduction in the shotgun licence fee would be to give a signal that it was easier to obtain shotguns—a contention which I refute.
Mr. Davies: That was precisely the point that my hon. Friend the Member for Hammersmith took up. My hon. Friend wanted to know whether that was the Minister's contention.
I have received representations from some of my constituents who are organised in a small shooting club at Senghennydd. It is a good club which has several hundred members, many of whom are on low incomes or unemployed. My constituents have two grievances. First, they believe that there has been inadequate time for representations to be made on the order.
The Minister said that it has been six years since the matter was last debated. It was last debated in the House in 1980. The working party has been sitting for four years, and its report was published in 1984. It seems strange that suddenly the Home Office has to lay the order before the
432
House and push it through at this late hour without public debate. It may well be that the Minister is receiving advice from his hon. Friend, the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Argyll and Bute (Mr. MacKay). I must tell the Minister about the reaction of people who will be directly affected by the proposals.
The order imposes a 65 per cent. increase in the renewal fee. There is no getting away from the fact that that will place a major burden on those low income earners who regard shooting as their prime sport. If the Minister wishes to use the licensing system to control the spread of firearms, and so on, he must accept that the proposed fee increase will adversely discriminate against low income earners and will do nothing to prevent the illegal use of firearms.
The Minister was challenged on the question of shotguns. He said that he did not want to give a signal that there should be wider ownership of shotguns, presumably because of public fear about the increasing use of shotguns in crime.
I understand, from discussions I have had today with Home Office officials that anyone who holds a foreign passport will be exempt from all the provisions. A person can come to this country, go to a dealer or a sports shop, show his passport, and say, "I will not be a resident of this country for more than 30 days", and he will be exempt from the provisions. He does not have to go to a police station to register. He does not have to get authorisation to buy ammunition. As long as he produces his passport and gives an undertaking that he will leave the country within 30 days, he will be exempt from the provisions.
How can the Minister justify his earlier comment that he does not want to give a signal about the wider ownership of shotguns when citizens of the Irish Republic, North America, and so on, can come to this country—
Mr. Beith: And Libya.
Mr. Davies: And from Libya —and have unfettered access to shotguns?
Will the Minister confirm that there is an inadequate method of control over shotguns which are imported by British citizens who can go to Spain, Switzerland, and so on, and buy weapons quite freely on the open market? When they return to this country—perhaps at Heathrow airport — and declare that they have a shotgun certificate, they are not required to produce any further evidence to Customs about the weapons they have brought in. They are not required to provide the serial numbers of weapons to Customs or to the police.
When there are such major, glaring loopholes, the Minister may understand why genuine holders of certificates and genuine users of shotguns and firearms in my constituency, who comply with the provisions of the Act, feel aggrieved when they face a 65 per cent. increase in fees just so they can continue to enjoy their proper, legitimate and controlled sport. I hope that the Minister will address himself to those major questions.
I find it difficult to accept the Minister's argument that the fees are calculated on the basis of costing police time. That does not apply in other areas of crime prevention. When the police go out and give advice on home security or road safety, we do not expect them to charge for doing so. The Minister is trying to draw a smokescreen over the

433
issue. I think that he wants to control the use of shotguns and the spread of firearms by a financial method. I hope that he will come clean, when he stands at the Dispatch Box, and say that is the case. He loses credibility when he tries to construct an argument on the basis that the police have carefully costed how much time is involved in the issuing of certificates or renewals.
The following example demonstrates that point. The South Wales police force takes, on average, three days to deal with an application for a variation. There have been no complaints about that police force or about the legitimate shooters who must deal with that police force. I have it on good authority that one applicant, in the county of Gwent, had 14 visits from the police when they were processing his application for a variation to his firearms certificate. When there is such a discrepancy between two neighbouring police forces, how can the Minister expect us to accept that there has been a careful, objective analysis to produce the median figure of 145 minutes as the time required to process applications? That is not on. All the evidence suggests that such a period is not needed. I ask the hon. Gentleman to reconsider.
I welcome the Minister's move to consult more widely the representatives of legitimate sporting interests. I ask him to give careful consideration to the suggestion of my hon. Friend the Member for I lam mersmith, because, if he is prepared to accept it, he will go a long way towards resolving this problem.
11.15 pm
Sir Hector Monro: My hon. Friend the Minister made his usual kindly speech, but I am afraid that it was throroughly unsatisfactory in relation to the renewal of firearms certificates. I speak from both sides of the sport. I am interested in country sports and am involved in the Clay Pigeon Shooting Association and the National Rifle Association. I accept that the variations are reasonable, except the incredible increase from £20 to £33 for the renewal of a firearms certificate. It is remarkable that the fee has increased by 65 per cent. when the Government have taken credit for bringing inflation down to 3 per cent. The increase is a knock on the head to those interested in enjoying a legitimate country sport.
The increased fee to renew a certificate is the same as the cost of the initial application for a certificate, which has increased by "only" 32 per cent., from £25 to £33. That is a large increase for a sport which should be encouraged at a time when we are doing all that we can to step up interest in sport and recreation.
I ask my hon. Friend the Minister to bear in mind that, in 1968, the fee for the initial application for a firearms certificate was five shillings and renewal cost half a crown —the initial application cost about 50 per cent. of the renewal cost. That was not at all like the increase now recommended.
I cannot understand why the nation is not prepared to bear a share of that cost. As the hon. Member for Hammersmith (Mr. Soley) said, there are many other police activities, the costs of which will be not be recoverable from those who benefit from their intervention.
My hon. Friend the Minister has made much of the interpretation of the Firearms Act 1968. It has exactly the same wording as the Firearms Act 1937. How could the police manage for 49 years on the interpretation of the 1937 Act before they suddenly had to look at the
434
procedure for renewing firearms certificates? What made the police change their minds about the interpretation of the 1937 and 1968 Acts?
We have referred to the fear of weapons falling into the wrong hands. The whole shooting world shoulders particular responsibility for weapons. After all, the owner of a valuable weapon is not going to have it stolen if he can possibly avoid it. I assure my hon. Friend the Minister that security is a high priority for all those who own shotguns or rifles, because they love them almost as much as their wives. Do not think that owners will throw their shotguns or rifles about in the street and let them he picked up or stolen by undesirable characters.
We have a duty to probe my hon. Friend the Minister on why the police believe they must have 145 minutes to renew a certificate. As my hon. Friend may know, I am the chairman of the police committee and therefore on the side of the police. I find it impossible to understand how the average time works out at 145 minutes, as announced by my hon. Friend. Why is it necessary to have a completely new certificate every time it is renewed? Why can we not just have a space at the bottom of the form to renew it for another three years? That would save about 20 minutes typing. Why do the police not use the telephone to ring up rifle club secretaries to ask whether Mr. X is a member? Why can the police not ring up the applicant and ask whether he is at home before they go on a fruitless visit? There are many ways in which we could reduce that 145 minutes at least by half, by administrative efficiency in working out the procedure.
I think that the Minister is quite wrong in saying that it will take three years to find out whether the 145 minutes is right. Any efficient police force could halve the time if it made the effort and had the wish to do so. I have some doubt as to whether the Minister and the police understand that we would like firearms certificates issued less expensively than under the present procedure.
There are other issues outside the order, such as the territorial interest the police show as to where one may use a weapon. If one is stalking roe deer or red deer one cannot say one is going to shoot until one is given an invitation to do so. Therefore, it is difficult to say in advance.
Since 1980, retail prices have increased by 46 per cent. The firearms certificate renewal has now gone up 65 per cent. Can my hon. Friend give us an assurance, not that he is setting up a committee, but that he will look at the increase in the renewal fee for firearms certificates again and come back to the House with a further variation order on that one issue? Tonight we should be encouraging shooting as an admirable pastime, but the Minister is doing something to make it totally restrictive. I hope that he will look at it again, and say so, if he wants our support.
11.22 pm
Sir Geoffrey Johnson Smith: I warmly concur with the sentiments expressed by my hon Friend the Member for Dumfries (Sir H. Monro). Shooting is a worthy sport and one that has been horribly penalised by the order. I especially urge my hon. Friend the Minister to consider coming back to the House with a new order in respect of renewals.
It is an expensive sport, but it is worthwhile. In the last Olympic games our four shooters won four medals. No other group achieved 100 per cent. success. I have had representations from people who are hopping mad. Three rifle clubs in my constituency have written not with

435
bitterness, although they are very angry, but with constructive proposals, some of which have been mentioned tonight. I have heard from the Uckfield rifle club. The Felbridge rifle club, of which I am president, has been joined by an ancient and distinguished club in my constituency, the Uckfield (1944) Home Guard rifle club. We could not have more worthy citizens than those who belong to those clubs.
The facilities they use, particularly the Felbridge range in East Grinstead, are privately owned. They pay their own rates and are not a drain in any way on the finances and facilities of the local authorities. It seems to them that these proposals are penalising the legitimate owner. It is little wonder that one letter said that they felt this was a ploy to get rid of the private owner and that the police were behind it. These are honourable, law-abiding citizens who do not wish to be anti-police but they simply do not understand, any more than any of us, do, why it takes so darn long to process renewals. After all, one can get a vehicle registration replacement document for £2, so why is there this huge cost?
Therefore, I add my plea in the strongest terms I can command that the validity of the firearms certificates should be extended, police procedures should be streamlined and we should remember, above all, that this is a sport in which we can excel, in which we want to excel and which we want to encourage our young people to enjoy.
11.24 pm
Mr. Peter Griffiths: I fear that the comments made by my hon. Friend the Minister of State will fail to convince or satisfy people in my constituency who take their shooting seriously, and take their lobbying of their Member of Parliament on those occasions equally so.
My constituents will not be so concerned as to whether the fees that have been announced reflect a just cost for a particular procedure; they will be concerned that so cumbersome and expensive a procedure is followed, which leads to such high fees. I draw to the attention of my hon. Friend the Minister the experience of New Zealand, where it is possible to administer a satisfactory system without so cumbersome a process and so large a cost.
I have attempted to say to my constituents that I would be willing to support increases in fees that represented the true cost of the processing of the applications, but it will be extremely difficult for me to explain to them how it can cost the same amount to renew or repeat an application as to make the original application, which requires a great deal more inquiry. It is not possible for me to say to my constituents that those two fees represent the costs. It does not make sense.
Therefore, I do not feel that the Minister can take credit tonight for having introduced an order that we can support. If there were a Division, some of us would be tempted to support the Opposition prayer.
11.26 pm
Mr. Douglas Hogg: This debate once again illustrates the unsatisfactory nature of the procedure that we are adopting. One thing is wholly plain — that we have either to accept or reject the order. We cannot amend it, yet the House feels that an increase of 65 per cent. In
436
respect of renewal is unreasonable. It is a great misfortune that we cannot strike out that provision and accept the rest. We are not able to do so, and that is a misfortune.
I welcome one part of my hon. Friend the Minister's speech: his assurance that what he is about is recovering costs, not seeking to control the possession of firearms and shotguns through the fees system. But that raises the further question, of whether he should be charging fees at all; and, if he is, on what basis. I do not object to his charging fees, but I object to his attempting to do so on a cost basis, because, as has been said by other hon. Members, there are many services that the police provide in the public interest and it is rare that the user is obliged to pay the full commercial cost. I challenge the basis of that. In any event, I also challenge the calculation because it is passing strange to think that one has to take up 145 minutes of a chief inspector's time. I assume that it is a chief inspector, because of the high fee charged.
One matter that I am pleased about is that the Minister of State has—[Interruption.] I know that he is looking at the clock. He will have to wait a bit. One thing that I am pleased about is that my hon. Friend has not increased the fee for the shotgun certificate. That is a good thing for the people of Lincolnshire, who are already fed up with a variety of things—for example, the proposal to site low-level nuclear waste—
Mr. Deputy Speaker: Order. The hon. Gentleman should speak to the order before the House.
Mr. Hogg: I was merely pointing out that the people of Lincolnshire have quite a lot that they are fed up about. They would be even more fed up if there were an increase in shotgun certificate fees. I welcome that part of my hon. Friend's statement.
11.27 pm
Sir Eldon Griffiths: I wish to speak for only 30 seconds, and I am obliged to my hon. Friend the Minister for allowing me to do so.
I shoot. I am president of various shooting clubs, and represent probably as many shooters in my constituency as anybody else in the House. I also represent the police. They want to prevent people from having such easy access to shotguns. However, they do not think that pricing them out is the right way to do it. I do not believe that it needs to take so long for police officers to carry out inquiries for renewing the shotgun licence. I hope my hon. Friend will say that, when he sets up his committee, he will allow some policemen to work with the shooting fraternity to see whether we can reduce the number of hours required for renewal.
11.28 pm
Mr. Giles Shaw rose—
Mr. Deputy Speaker: Does the Minister have the leave of the House to speak again?
Hon. Members: Aye.
Mr. Shaw: My hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) should not forget that policemen were on the initial working party.
With regard to what my hon. Friends seek, I cannot agree to amend the order because it is impossible under our procedure. I cannot agree to withdraw the order. We are looking at the order in total. It represents a package in which there are many reductions, including a 68 per

437
cent. reduction in the fee for replacement of firearms as well as the significant increase about which my hon. Friends are most concerned.
I have offered to examine that point with the shooting fraternity and with the police in a way which should prove that the 145 minutes set out in the 1984 working party report is a sensible measure. If it is not sensible, we will agree to bring forward, at the appropriate time, reductions in the firearms renewal fee.
I must tell my hon. Friends that, bearing in mind the last review of fees and the composite nature of the order before the House today, it represents a reasonable attempt to standardise these procedures. I trust that the House will support it.
Question put and negatived.

STATUTORY INSTRUMENTS, &c.
Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) on Statutory Instruments. &c.
STATUTORY INSTRUMENTS, &c.

  HORTICULTURE
  That the draft Horticultural Development Council Order 1986, which was laid before this House on 3rd June, be approved—[Mr. Durant.]
  Question agreed to.

BUSINESS OF THE HOUSE (ESTIMATES)
Ordered,
That the first day allotted this Session under Standing Order No. 19 (Consideration of estimates) be deemed to have been a half day as provided by that Standing Order.—[Mr. Durant.]

Copyright
Motion made, and Question proposed That this House do now adjourn—[Mr. Tony Durant.]
11.30 pm
Mr. Alan Howarth: In addressing the question of ownership of copyright in commissioned works of art, I would like to refer briefly to that great historical figure. William Hogarth's success during his lifetime was such that pirates paid him the compliment of copying his work for money. Indeed, so popular were his engravings that even pirated editions were themselves re-pirated. Hogarth, of course, did not receive a penny for this exploitation of his works.
Hogarth was a man of business acumen as well as an artist. He therefore set about devising a rule which would protect his work and that of fellow artists. He argued that the artists or producer—the person we now refer to as the author — should be allowed to control the reproduction of that work.
In 1735, Parliament enacted a law of copyright known as Hogarth's Act, under which no one was allowed to make copies of a work without the artist's consent. The modern expression of that principle is enshrined in the Copyright Act 1956. Section 4 of that Act, establishes the basic rule with regard to the legal ownership or the copyright in literary, dramatic, musical and artistic works. The rule is that the author of a work shall be entitled to any copyrights subsisting in the work.
Before I consider the special difficulty for visual artists thrown up by an exception in this Act to the general rule, I would like to consider further our international obligations. The United Kingdom is a member of the union established to protect the rights of authors under the Berne copyright convention. Article 9 of the convention expressly states that authors of literary and artistic works protected by the convention shall enjoy the exclusive right of authorising the reproduction of these works.
It is laid down in article 2 of the convention that the protection of literary and artistic works shall operate for the benefit of the author and his successors in title. By "author," is meant the person by whom the work has been produced, a construction which the English courts have adopted for copyright purposes.
The Government have made it plain in the recent White Paper on copyright entitled "Intellectual Property and Innovation" that they intend to ratify the Paris text of the Berne convention. Indeed, it is plain from the welcome inclusion in the White Paper of new moral rights for authors that the Government are fully conscious of their international obligations under the Berne conventionn. No doubt my hon. Friend the Minister recognises that the provisions of the convention are supposed to be enforceable in the countries of the union at the suit of the author or his successors in title. In the United Kingdom, the law of copyright is the vehicle through which the requirements of the Berne convention are carried in to effect.
It follows that anything in our domestic law of copyright which tends towards the involuntary transfer of rights by an author ought to be examined most carefully to ensure that authors are not denied the benefit of the protection contemplated by the Berne convention.
The White Paper has been warmly welcomed as offering much needed simplification in the law relating to

439
industrial patents and designs. It has also been admired for its modernising spirit embracing the new technologies of intellectual property including computer software. It is all the more surprising, therefore, that the White Paper should propose to leave unammended the provision in the Copyright Act 1956 which has the effect of automatically removing from artists the copyright in their work. It is not only a repudiation of the spirit of William Hogarth—it is perhaps fortunate for my hon. Friend the Parliamentary Under-Secretary of State for Trade and Industry, who is to reply to the debate, that William Hogarth is not in position to retaliate with one of his devastating caricatures —but it is wholly contrary to the requirements of the Berne convention.
The provision in question is section 4(3) of the Copyright Act. Although the Act embodies the general rule that the author of a work is the first owner of copyright, there is in a section 4(3) an exception to the rule, which provides that when a person commissions a photograph, a painted or drawn portrait or an engraving, the commissioner and not the artist is entitled to the copyright in the work. In a nutshell, the provision means that the artist has to bargain to get back what should belong to him as of right. That is invidious and insupportable, and in the forthcoming legislation we shall have the opportunity to remedy it.
Not only are the anomalies contrary to our international obligations under the Berne convention, hut, for practical purposes, connected with the economic activity of Britain's artists, they are eccentric and are inconsistent to a degree that has mystified artists for many years. It is indeed timely that, before the Bill that will follow the White Paper is introduced in Parliament, the Arts Council, backed by the Royal Academy, has made a most vigorous and detailed case on the matter to my right hon. Friend the Secretary of State for Trade and Industry. I hope that my hon. Friend the Under-Secretary will be able to tell the House that he has pondered the Arts Council's case—I am sure that he has done so—that he acknowledges the expert legal and artistic opinion that has been placed before him and that he will endorse the striking out of section 4(3). In so doing, he would add not a jot to public expenditure but would ensure conformity with European law and adherence to the requirements of the Berne convention. He would also give a signal to the arts world that, in attending to pressing matters involving industrial copyright, the Government have not overlooked the economic interests of our native artists, who are much admired throughout the world.
It is a mystery why photographs, portraits that are drawn or painted, and engravings, which include etchings, lithographs, woodcuts and other printing processes, were singled out for exceptional treatment earlier in the century. Certainly the list appears arbitrary to modern eyes. Why, for example, are sculpted portraits not included?
It is reasonable to ask what motive there might have been for the statutory exception. It is said that the justification for section 4(3) was a perceived need to preserve the privacy of family archives and personal mementos, but it does not follow that the right way of remedying the supposed deficiencies in the law is to deny copyright protection in the United Kingdom to authors of
440
commissioned photographs, portraits and engravings whose patrons have not specifically agreed that they should have it.
The abolition of section 4(3) would not prevent those whose privacy was flouted from seeking a remedy in actions for breach of trust or confidence. It would be better still if we had a generalised law of privacy in the United Kingdom. Moreover, the protection of privacy is hardly a consistent theme of the subsection. All photographs are included inthe list of commissioned works, whether or not they are of a private and personal nature. That results in the odd circumstance that, if a person commissions both a photographer anda painter to produce pictures of his house, he will automatically own the copyright in the photograph, butnot in the picture on canvas. But if the pictures commissioned were portraits of his mother-in-law, he would automatically own the copyright in both works.
The net effect of the subsection is to muddy waters which should be as clear as the general rule is already—the artist is deemed to own the copyright unless he decides to assign it voluntarily to someone else. It will not do to say that the artist who is commissioned to take a photograph or make a portrait should be required to insist on the express assignment in writing of the copyright every time. It should, rather, be the other way round, as is the case with landscapes and all other classes of commissioned literary and artistic works that are not covered by the subsection.
As Mr. Justice Whitford observed in his report on copyright in 1977:
"the commissioner can protect his position by express agreement."
In other words, the ownership of copyright can be part of the bargain struck between the commissioner and the artist, but where no contract exists the presumption should be, as elsewhere— namely, that ownership of copyright vests in the artist. The House will recognise the justice of that when it considers how weak, generally speaking, is the bargaining power of artists compared with that of their patrons.
The anomalies of this subsection of the current law work directly against the interests of artists in this country. The subsection applies, regardless of whether the commissioning party intends to keep the commissioned work confidential, or to exhibit it publicly, or to exploit it commercially. The subsection often results in the curious situation in which the commisioner owns the copyright in a photograph or an engraving and the artist owns the means by which to exploit it — in other words, the photographic negative or the engraved plate.
The subsection applies, regardless of whether the commissioner is the person whose privacy it may be disirable to protect. The subsection is arbitrary in not applying to other forms of commissioned works, which by their nature may be no less deserving of protection under a proper regime of privacy. I have mentioned sculpted portraits. Why not confidential art work or illustrations that are not portraits? In these cases, the artist is deemed to own the copyright, yet we hear of no grave difficulties for commissioners.
This subsection applies, even though the authors of these types of commissioned works have not voluntarily transferred, or may not have wished, or intended, to transfer their copyright in the United Kingdom to the commissioner. So we have the principle, inconsistently

441
established, of a copyright not enforceable at the suit of the author of the protected work, or anyone who is fairly entitled to be called his successor in title. The Arts Council has argued most strongly — and I believe fairly and reasonably — that such a situation is properly to be regarded as incompatible with the main objects of the Berne convention.
In chapter 16.3 the White Paper says:
"Variations from the simple, fundamental principle that the author owns copyright are justified only where convenience and natural justice clearly point in this direction."
It is very curious, therefore, that the White Paper proposes that the exception that I have been discussing should be retained. I hope that I have been able to persuade my hon. Friend the Minister that it creates considerable confusion and inconvenience, that it carries with it no significant practical benefit and that it embodies a palpable injustice. There is a wealth of reasons for the abolition of this subsection, and I hope that my hon. Friend will be able to tell us that it is no longer the Government's intention to re-enact it, or at least that he will look at it again very carefully.
So pleased was Hogarth with the introduction of the Copyright Act 1735 that he offered thanks to King and Parliament with a special engraving, in which the rays of royal favour emanating from the crown are shown falling upon mitres and coronets and upon Mr. Speaker's hat. The adoption of the reform that I have proposed would result in gratitude, possibly less spectacular but no less warm.
11.43 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I thank my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) for demonstrating that on this side of the House there is no shortage of affection for the artistic community in the United Kingdom and its products. I think that we are doubly blessed in this debate. My right hon. Friend the Secretary of State for Trade and Industry was, in a past incarnation, Minister with responsibility for the arts. The discussions that may take place after the raising of this issue will benefit from the close relationship between Sir William Rces-Mogg and my right hon. Friend.
The White Paper "Intellectual Property and Innovation" puts forward a number of proposals on the protection of various types of work under copyright law. As stated in this White Paper, the Government's broad aims are to ensure continued protection for those who create copyright works, while at the same time recognising that the public has a substantial interest in the availability of these works. I am pleased to say that the Government's proposals for copyright reform have, in general, been welcomed by both copyright owners and users.
We are dealing with those proposals which affect artists' copyright and I shall deal first with the changes that we propose to make. The most important change affects the so-called moral rights of artists, that is, those rights concerned with the reputation of the artist. Under our proposal, artists will be entitled to claim authorship in their works and also to object to any distortion of their works. This introduction of moral rights has been warmly welcomed by the artistic community and the Arts Council.
A further proposal will help artists who design sets of typeface characters for typewriters, computer printers,
442
printing presses and so on. At present, although individual typeface characters may attract protection. no protection for sets of such characters is available. The GoNernment will give the creators of original sets of type faces the right to control reproduction, importation and commercial distribution of copies. I know that my hon. Friend spoke about this proposal only obliquely, but I am sure that he will agree that this debate is the proper setting in which to clarify that small point about a specific constituency of the artistic community.
Those are the particular changes the Government are proposing. But what, of course, concerns my hon. Friend the Member for Stratford-on-Avon is a change that is not proposed. This is the matter of who should own the copyright in commissioned works. Under the current generality of copyright law, it is the artist who is normally entitled to any copyright subsisting in his work. This is spelt out in section 4(1) of the Copyright Act 1956. There are, however, three exceptions to this general rule. Two of these exceptions, in sections 4(2) and 4(4) of the 1956 Act, are about the ownership of works made by artists in the course of their employment.
Generally, it is the employer who owns the copyright in the absence of any agreement to the contrary. The third exception about which my hon. Friend has spoken generally, concerns certain works made in pursuance of a commission. The relevant provision is in Section 4(3) of the 1956 Act. This provides that where a person commissions a painted or drawn portrait, an engraving or a photograph, then that person and not the artist or photographer is entitled to the copyright in the work, unless there is an agreement to the contrary. These exceptions to the general rule of ownership were not new to the 1956 Act but were carried over from the previous Copyright Act of 1911.
The question of commissioned works was considered by the committee chaired by the Honourable Mr. Justice Whitford in its report on Copyright and Designs Law published in 1977. The committee, although not unanimous in the matter, recommended that copyright in all commissioned works should belong to the author in the absence of any agreement I.o the contrary. To protect the interests of the person who commissioned the work, the committee recommended:
"that the person should have an exclusive licence for all purposes which could reasonably be said to have been within the contemplation of the parties at the time the work was commissioned."
In addition, the committee said that he should have the power to restrain exploitation of the work for any purpose to which he could reasonably object. These proposals were subject to much comment, but the clear consensus of opinion was that considerable practical difficulties would arise in determining what was within the contemplation of the parties at the relevant time.
In response to this criticism, the Government put forward an alternative proposal for public discussion in the 1981 Green Paper "Reform of the law relating to Copyright, Designs and Performers' Protection." This proposal had two aspects. First, the existing exception— giving the copyright to the commissioner — should be retained for painted and drawn portraits, engravings and photographs. For other commissioned works, the copyright should also belong to the person who commissioned the work and not the author. If, however, the commission was for a specific purpose, then the author

443
should have the right to prevent any use of the work for any other purpose. As explained in the White Paper, in the light of the comments received on this alternative proposal, the Government concluded that it was unnecessary and undesirable to amend either the basic ownership provision or the existing specific exemptions.
My hon. Friend the Member for Stratford-on-Avon objects to vesting copyright in anyone other than the artist. This objection is based on the view that it is an unwarranted departure from the basic rule of ownership of copyright. In written answers to questions by my hon. Friend on 16 June and to my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) on 18 June, my hon. Friend the Minister for Information Technology referred to representations received from the Arts Council and the Royal Academy of Arts, and he undertook to look at the matter again in the light of those representations. As part of this exercise, I expect a meeting between my officials and representatives of the Arts Council and the Royal Academy to be arranged in the near future. Such a meeting has already been suggested by the chairman of the Arts Council. I also have a copy of our right hon. Friend's reply to Sir William Rees Mogg in which he rightly agrees to this exchange of views between officials.
I should however, like to make it clear that, in reconsidering this matter, we shall have to take into account the interests of those people who commission works as well as the interests of the artists who are represented by the Arts Council. The reason behind section 4(3) of the 1956 Act is that the artist or photographer ought not to be able to put the portrait, photograph or engraving to uses to which the commissioner may disapprove. This consideration would seem to apply as much today as it did when the provision was enacted in 1956 and 1911. It has to be borne in mind that while a professional artist or photographer might be expected to be aware of his rights under copyright law, it would not be reasonable to expect a person who commissions a protrait or photograph to have a detailed knowledge of the relevant statute. This suggests that the presumption, in the absence of an express agreement, would be in favour of the commissioner, not the artist. We would also need to be satisfied that the privacy of a person who commissions a portrait or photograph is not
444
unreasonably prejudiced as a result of a change in the law. Furthermore, it should be remembered that it is always open to an artist who wishes to own copyright in a portrait which he is commissioned to paint or draw to provide for this in an agreement with the person commissioning the portrait—then the commissioner would know exactly where he stands.
On a more legalistic note, it has been suggested that the provision. on ownership of commissioned works is out of step with the copyright law of most European countries and incompatible with the United Kingdom's obligations under article 2(6) of the Berne convention for the protection of literary and artistic works. On the first point, it has to be borne in mind that there are considerable differences between the copyright laws of European countries. The absence of an equivalent provision elsewhere should not stop us from doing what we decide is right for the United Kingdom. Such comparisons can also be misleading, since it may be necessary to take account of any laws relating to personal privacy or breach of trust and confidence, not just copyright law. On the second point, the Government's legal advice is that it is not correct to construe the Berne convention as overriding national legislation about ownership of property. The purpose of article 2(6) is to ensure that the protection provided for in the convention is enjoyed by authors where national legislation makes no relevant provision. If, therefore, a state chooses to legislate—as we do—to the effect that copyright should initially vest in one person rather than another, that does not constitute a breach of the convention.
As a result of the representations of my hon. Friend and others, we will re-examine the existing provision on the ownership of copyright in commissioned works. We will of course have to take fully into account the wishes of professional artists and the interests of those who commission works and who cannot be expected to have a detailed knowledge of their rights—or lack of rights— under copyright law.
With that undertaking, and with that recording of the agreement between the Secretary of State and the Arts Council to talk about the matter in some detail, I hope that my hon. Friend will be satisfied. He will be more than aware that, in this issue, the arguments are finely balanced.
Question put and agreed to.
Adjourned accordingly at six minutes to Twelve o'clock.

EMPLOYMENT
  EC (Labour and Social Affairs Council)
  EC (Labour and Social Affairs Council)
  Publications (Welsh Language)
  Publications (Welsh Language)
ATTORNEY-GENERAL
  Crown Prosecution Service
  Crown Prosecution Service
  Publications (Welsh Language)
  Publications (Welsh Language)
DEFENCE
  Falkland Islands (Gazelle Helicopter)
  Falkland Islands (Gazelle Helicopter)
  NATO (Permanent Representative)
  NATO (Permanent Representative)
  Chemical Weapons
  Chemical Weapons
  Armed Forces (Homosexuality)
  Armed Forces (Homosexuality)
  Armed Forces (Racial Discrimination)
  Armed Forces (Racial Discrimination)
  Royal Navy (Meal Charges)
  Royal Navy (Meal Charges)
  Publications (Welsh Language)
  Publications (Welsh Language)
  UN (Military Budgets)
  UN (Military Budgets)
  Test Ban Treaty
  Test Ban Treaty
  Naval Ships (Video Recordings)
  Naval Ships (Video Recordings)
  Entry and Search Powers
  Entry and Search Powers
  Royal Wedding
  Royal Wedding
  Trident
  Trident
  Defence Programme
  Defence Programme
  SP70 Howitzer
  SP70 Howitzer
  VC10 Aircraft
  VC10 Aircraft
  Tucano Basic Trainer
  Tucano Basic Trainer
  Torpedo Programme
  Torpedo Programme
  Procurement Executive
  Procurement Executive
  Equipment Programmes
  Equipment Programmes
TRADE AND INDUSTRY
  White Salt
  White Salt
  European Regional Development Fund
  European Regional Development Fund
  Entry and Search Powers
  Entry and Search Powers
  Assisted Areas
  Assisted Areas
  Steel Industry
  Steel Industry
  Common Market
  Common Market
  EC (Council of Ministers)
  EC (Council of Ministers)
  Director General of Telecommunications (Report)
  Director General of Telecommunications (Report)
  Consumer Credit Act
  Consumer Credit Act
  Birmingham City Council (Deputations)
  Birmingham City Council (Deputations)
  South Africa
  South Africa
THE ARTS
  Dance (Business Sponsorship)
  Dance (Business Sponsorship)
WALES
  School Equipment Costs
  School Equipment Costs
NORTHERN IRELAND
  Mentally Handicapped Persons
  Mentally Handicapped Persons
  Therapists
  Therapists
HOUSE OF COMMONS
  Westminster Hall
  Westminster Hall
HOME DEPARTMENT
  Prison Department Property
  Prison Department Property
  999 Calls
  999 Calls
  Data Protection
  Data Protection
  Naturalisation
  Naturalisation
  Crime Prevention (Leicester)
  Crime Prevention (Leicester)
  Forms, Pamphlets, Leaflets (Welsh Language)
  Forms, Pamphlets, Leaflets (Welsh Language)
  Criminal Injuries Compensation Scheme
  Criminal Injuries Compensation Scheme
  Domestic Pets
  Domestic Pets
  Royal Wedding
  Royal Wedding
  Extradition Warrants
  Extradition Warrants
  Mr. D. Abbott
  Mr. D. Abbott
  Motoring Offences
  Motoring Offences
  Parole
  Parole
PRIME MINISTER
  Royal Wedding
  Royal Wedding
  Trooping of the Colour
  Trooping of the Colour
  Birmingham City Council (Ministerial Deputations)
  Birmingham City Council (Ministerial Deputations)
EDUCATION AND SCIENCE
  Freedom of Speech
  Freedom of Speech
  Elderly People (Care and Treatment)
  Elderly People (Care and Treatment)
  Publications (Welsh Language)
  Publications (Welsh Language)
  Institute for Motor Disorders, Budapest
  Institute for Motor Disorders, Budapest
  Schools Repairs (West Yorkshire)
  Schools Repairs (West Yorkshire)
  School Attendance
  School Attendance
  Russian Language
  Russian Language
  Departmental Procedures (Review)
  Departmental Procedures (Review)
FOREIGN AND COMMONWEALTH AFFAIRS
  Test Ban Treaty
  Test Ban Treaty
  Women (Job Opportunities)
  Women (Job Opportunities)
  Spain (British Tourists)
  Spain (British Tourists)
  Spain (Ministerial Visit)
  Spain (Ministerial Visit)
  Mr. Oliver Tambo
  Mr. Oliver Tambo
NATIONAL FINANCE
  Asset Sales (Revenue Loss)
  Asset Sales (Revenue Loss)
  Commercial Bank of Wales (Subsidiary)
  Commercial Bank of Wales (Subsidiary)
AGRICULTURE, FISHERIES AND FOOD
  Dairy Herds (Prohibition Order)
  Dairy Herds (Prohibition Order)
SCOTLAND
  Radioisotopes
  Radioisotopes
  Radiation
  Radiation
  Environmental Pollution (Bonnybridge)
  Environmental Pollution (Bonnybridge)
  Drumglass Farm, Croy
  Drumglass Farm, Croy
  Animal Welfare
  Animal Welfare
  Generating Stations (Discharges)
  Generating Stations (Discharges)
  Waste Incineration
  Waste Incineration
  Re-Chem
  Re-Chem
  Epidemiological Investigations
  Epidemiological Investigations
  Toxic Waste
  Toxic Waste
  Human and Animal Health
  Human and Animal Health
  Milk (Direct Sales)
  Milk (Direct Sales)
  Dairy Cattle (Disease)
  Dairy Cattle (Disease)
  Organic Environmental Contaminants
  Organic Environmental Contaminants
  Toxic Emissions
  Toxic Emissions
  Soil, Vegetation and Animal Tissue (Analysts)
  Soil, Vegetation and Animal Tissue (Analysts)
  Nurses (Geriatric Patients)
  Nurses (Geriatric Patients)
  District Nurses
  District Nurses
  Elderly People (Accommodation)
  Elderly People (Accommodation)
  Teachers (Physical Education Training)
  Teachers (Physical Education Training)
  Doctors (Geriatric Patients)
  Doctors (Geriatric Patients)
  Day Centres for the Elderly
  Day Centres for the Elderly
  Russian Language (Examinations)
  Russian Language (Examinations)
  Steel (Statistics)
  Steel (Statistics)
  Steel Industry
  Steel Industry
  Steel Production
  Steel Production
SOCIAL SERVICES
  Housing Benefit
  Housing Benefit
  Childhood Dysfunction
  Childhood Dysfunction
  Abortions
  Abortions
  Mentally Ill People
  Mentally Ill People
  Drugs
  Drugs
  Cervical Cancer
  Cervical Cancer
  Benefits (Grimsby)
  Benefits (Grimsby)
  Social Security (Computerisation)
  Social Security (Computerisation)
  Occupational Pension Schemes
  Occupational Pension Schemes
  Mental Patients
  Mental Patients
  Forms, Pamphlets, Leaflets (Welsh Language)
  Forms, Pamphlets, Leaflets (Welsh Language)
  Rent and Rates (Rebates and Allowances)
  Rent and Rates (Rebates and Allowances)
  Birth Registration (Wales)
  Birth Registration (Wales)
  Leukaemia Patients
  Leukaemia Patients
  Midwifery
  Midwifery
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
ENERGY
  Publications (Welsh Language)
  Publications (Welsh Language)
ENVIRONMENT
  Litter
  Litter
  Greenfield Sites
  Greenfield Sites
  Canary Wharf
  Canary Wharf
  Lead-free Petrol
  Lead-free Petrol
  Marine Nature Reserve
  Marine Nature Reserve
  Local Authorities (Capital Expenditure Controls)
  Local Authorities (Capital Expenditure Controls)
  Water Authorities (Privatisation)
  Water Authorities (Privatisation)
  Domestic Rates
  Domestic Rates
  Local Authorities (Capital Receipts)
  Local Authorities (Capital Receipts)
  Stoke Garden Festival
  Stoke Garden Festival
  Nuclear Waste
  Nuclear Waste
  Commonwealth Games, Edinburgh
  Commonwealth Games, Edinburgh
  Homeless Persons
  Homeless Persons
  Ancient Monuments
  Ancient Monuments
  Housing Repairs
  Housing Repairs
  Local Authority Services
  Local Authority Services
  Local Government Finance
  Local Government Finance
  Housing Policy (Mortgages)
  Housing Policy (Mortgages)
  Thames Water Authority
  Thames Water Authority
  Local Authority Land
  Local Authority Land
  Sports Sponsorship (Tobacco Companies)
  Sports Sponsorship (Tobacco Companies)
  Residuary Bodies
  Residuary Bodies
  Council Houses (Northern Region)
  Council Houses (Northern Region)
  Dogs
  Dogs
  RSG Report 1986–87
  RSG Report 1986–87
  Council House Sales
  Council House Sales
  Newcastle City Council
  Newcastle City Council
  Inner Cities (Development)
  Inner Cities (Development)
  Local Authority Housing
  Local Authority Housing
  Housing Repair Grant
  Housing Repair Grant
  Local Authorities (Capital Receipts)
  Local Authorities (Capital Receipts)
  Land Registers
  Land Registers
  Sites of Special Scientific Interest
  Sites of Special Scientific Interest
  Urban Housing Renewal Unit
  Urban Housing Renewal Unit
  Housing (Liverpool)
  Housing (Liverpool)
  Business Rates
  Business Rates
  Water (Nitrate Pollution)
  Water (Nitrate Pollution)
  Housing Defects
  Housing Defects
  Housing Improvement Grants
  Housing Improvement Grants
  Defective Housing
  Defective Housing
  Urban Programme
  Urban Programme
  Housing Stock
  Housing Stock
  Rate Support Grant
  Rate Support Grant
  Green Belt
  Green Belt
  European Environment Committee
  European Environment Committee
  North West Regional Water Board
  North West Regional Water Board
  Carsington Reservoir
  Carsington Reservoir
  Manor Farm, Swalcliffe
  Manor Farm, Swalcliffe
  Community Refurbishment
  Community Refurbishment
  Planning Appeals
  Planning Appeals
  Conservation (Compensation)
  Conservation (Compensation)
  Furans and Dioxins
  Furans and Dioxins
  Polychlorinated Biphenyl Wastes
  Polychlorinated Biphenyl Wastes
  Pollution
  Pollution
  Publications (Welsh Language)
  Publications (Welsh Language)
  Lower Leigh (Repairs)
  Lower Leigh (Repairs)
  Rosehill Estate, Willenhall
  Rosehill Estate, Willenhall
  Milton Keynes (Winding-up)
  Milton Keynes (Winding-up)
  Block Grant (Disregards)
  Block Grant (Disregards)
  Mount Pleasant Airport
  Mount Pleasant Airport
TRANSPORT
  Bridges
  Bridges
  British Rail
  British Rail
  M4 (Accident)
  M4 (Accident)
  Learner Drivers (Wales)
  Learner Drivers (Wales)
  Level Crossing Grant
  Level Crossing Grant
  Drivers' Hours and Rest Period Regulations
  Drivers' Hours and Rest Period Regulations

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

Antarctica: Argentine Minister's Remarks
Lord Kennet: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their reaction to the remarks of the Argentinian Minister of the Interior reported on the 26th May to the effect that a new governor has been chosen by the President of Argentina for Tierra del Fuego, Antarctica and the South Atlantic Islands in order "to prepare the territory for provincial status so that the sovereign rights of the people would be established".
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, we are aware of the Argentine Minister of the Interior's remarks. They have no significance for our sovereignty over the Falkland Islands; South Georgia and the South Sandwich Islands; or the British Antarctic Territory, which remains unaffected. Under the terms of the Antarctic Treaty, activities by treaty states, of which Argentina is one, have no effect on sovereignty.
Lord Kennet: My Lords, I am obliged to the noble Lord for that reassuring Answer. Will the Government bear in mind that, although the Answer is undoubtedly true as it stands, the recent statements may have some effect on the political intentions of Argentina and on relations between us? If they are considered in conjunction with the episode where Argentina recently fired on a Taiwanese ship in a zone which they claim as part of their 200-nautical-mile fishery protection zone and which we claim as part of our 150-mile exclusion zone, it is a slightly inflammable picture.
Lord Trefgarne: My Lords, as we made clear at the time, we profoundly regretted the incident to which the noble Lord has referred. As he says, it was within 200 miles of the Falkland Islands, which I suppose gives us some cause for thought.
Lord Cledwyn of Penrhos: My Lords, leaving aside these general pronouncements and turning to the practical point that the noble Lord and the noble Minister have mentioned, would the Minister confirm that in fact about 15 nations are fishing, and over-fishing, the Falkland waters to the extent, I believe, of about £200 million last year? Could he tell the House what progress is being made on the FAO report, and when that is likely to be published?
Lord Trefgarne: My Lords, we expect to receive the results of the FAO study by the late summer. Data on fish stocks have been made available by major fishing nations, including Argentina and ourselves.
Lord Morris: My Lords, is my noble friend aware that when the Argentinians refer to Antarctica they invariably do so by using the phrase "our Antarctica"?
Lord Trefgarne: My Lords, that is not the least of Argentinian misconceptions.

UN Information Centre, London
2.40 p.m.
Lord Kennet: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that the United Nations Information Centre in London has been forced by financial cuts to stop mailing its regular information, to close its library two days a week, and to refuse telephone calls in the morning; and what remedy they propose.
Lord Trefgarne: My Lords, the United Nations has had to reduce expenditure in a number of areas because of delayed and withheld budget contributions from several member states. We pay promptly and in full and expect others to do so.
Lord Kennet: My Lords, in this case in Britain, in London, are our Government able to give any advice to the United Nations Information Centre on the least damaging way that it can live on a reduced budget? It must strike the eye that the measures described in my Question are a pretty damaging way of cutting down its activities.
Lord Trefgarne: My Lords, I suppose the only advice that I could offer to the United Nations—and I fear that it would be presumptuous of me to do so—would be to suggest that it ensures that it spends its money in the most cost-effective way it can, and cuts out waste and duplication, and indeed some of the things it does that we regard as wasteful and unsuitable.
Lord Mellish: My Lords, the Minister said that there were a number of countries not paying their dues to the United Nations. Are any of them Eastern bloc countries and, if so, will the noble Lord spell them out?
Lord Trefgarne: My Lords, the regular budget for 1985 was 692 million dollars, but at the 31st December 1985 242 million dollars was owed by some 90 countries. Among the chief offenders were the USSR and Argentina.

Smoking: Protection of the Young
2.42 p.m.
Baroness Lane-Fox: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what agreement they have reached with the tobacco industry to protect the young.
Baroness Hooper: My Lords, the protection of the young is a prime aim of the latest voluntary agreement on cigarette advertising which came into effect on 1st April.
Baroness Lane-Fox: My Lords, I thank my noble friend the Minister for what sounds a very encouraging reply. May I ask her whether the agreement is more far-reaching than earlier agreements?
Baroness Hooper: Yes, my Lords; there are a number of innovations. In the first place, the industry itself, under this agreement, is to spend £1 million a year over the course of the agreement; in other words, spending will amount to about £3½ million in a drive to encourage support for the law. This campaign is intended to be far more comprehensive in its coverage than any previous effort of this type and involves media advertising and teams of merchandisers as well as direct mailing of material for display in shops. In addition, there is a ban on cigarette advertising on cinema screens, a ban on advertising in magazines widely read by young women, and other restraints on advertising such as posters near schools and at road shows and air shows.
Lord Parry: My Lords, can the noble Baroness tell the House whether any of these pieces of information are targeted directly at the pregnant mother? Does she agree that the major damage to the young is probably done during the period while they are still carried in the womb of mothers who persist in smoking, perhaps without realising the damage they are doing to the unborn child?
Baroness Hooper: My Lords, targeting on the young in terms of this voluntary agreement was aimed at the school children population, where there is some evidence that there may be a trend to more smoking. The general campaign of the Government against encouraging smoking is targeted at other areas which include pregnant mothers.
Lord Diamond: My Lords, do the Government accept the latest figures of a very authoritative person, Professor Dole—I think that is his name—that 90 per cent. of all lung cancer deaths are due to smoking?
Baroness Hooper: My Lords, the Government take note of all surveys and reports on this very important topic. Since this particular Question is directed at campaigns concerning the young, I think it is encouraging to note that at least in the post-school population of 16 to 19 year-olds there has been a steady decline in smoking among teenagers in that particular age group.
Lord Ennals: My Lords, is there not an increase among children at school? Is it not quite clear that advertising, whether it be on posters or in publications or televison sponsorship of sports, is the most effective way of drawing cigarettes to the attention of children? Is it not clear that unless something is done about that in an agreement the purposes that the noble Baroness stated cannot be achieved? Can we be assured that the Bill now before the House, directed particularly
280
towards discouraging smoking among young people, will be effectively implemented to stop the sale of cigarettes to school kids?
Baroness Hooper: My Lords, if the noble Lord is referring to the Private Member's Bill, currently before the House, that is concerned with the protection of children, certainly the Government are supporting that Bill which is intended to prevent sales of cigarettes and other tobacco products to young people. I am sure the noble Lord has read the latest voluntary agreement against advertising which is available in the Library. We believe that we have achieved more by our voluntary agreements than some countries that have legislated against cigarette advertising, and the statistics bear out that evidence.
Lord Orr-Ewing: My Lords, is it not remarkable that an industry has signed a succession of voluntary agreements seriously curtailing its sales? Is it not remarkable that it spends money from its own resources on discouraging the young smoker? Is it not perhaps up to improved discipline in the schools by those who have a responsibility for discipline to stop very young people smoking in the schools, as is currently being done?
Baroness Hooper: My Lords, I agree that influence from whatever direction is much to be welcomed. The difficulty in this area is that cigarette advertising is often cited as a direct cause of youngsters taking up smoking, but in fact there is little direct evidence to support that. The causes seem to be much more complex—peer group pressure and adolescent experimentation among them. Obviously the Government's campaign and the Health Education Council's campaign, which is supported by the Government, are directed at influencing teachers, parents and others who can influence young people not to start smoking.
Lord Mackie of Benshie: My Lords, can the noble Baroness tell us how successful the campaign has been in reducing total consumption? Does she have the figures?
Baroness Hooper: Yes, my Lords. The total figures, which I have somewhere, show a decline in smoking overall. The concern of the Government and the concern of the original Question was to prevent any increase among the young, where there was some cause for concern that there might be an increasing trend. But overall there is concrete evidence that the voluntary agreements and the campaigns against smoking have produced positive results.
Baroness Lane-Fox: Yes, my Lords; my noble friend the Minister is quite right. My concern was particularly with the young. On that point can she tell me whether the ban applies to those unpleasant things called Skoal Bandits?
Baroness Hooper: My Lords, the habit of snuff-dipping, or Skoal Bandits, is the subject of a new voluntary agreement which requires the use of health warnings and further marketing restrictions. This voluntary agreement is still under discussion, but it is

281
also a matter within the province of the Private Member's Bill to which we have already referred, which imposes a restriction on sales of these products to young people under 16.
Lord Blyton: My Lords, is the noble Baroness aware that the anti-smoking lobby is now terrifically strong in this country? I have been smoking cigarettes since I was 13 and I am now 87. Can she assure me that I will not be made an outlaw before long in my own country because I smoke cigarettes?
Baroness Hooper: My Lords, I am only too well aware of the anti-smoking lobby in this country, and I am very pleased that the noble Lord has taken the place of the late Lord Shinwell who was constantly making remarks of this kind. The Government do not in any way intend to ban smoking. What they are trying to do under the present arrangements is to discourage people from starting to smoke.
Lord Gainford: My Lords, has my noble friend any information about juveniles smoking pipes, as mentioned by the late Lord Shinwell?
Baroness Hooper: My Lords, the answer is, no. But 1 shall try to help my noble friend by making further inquiries and letting him know about this.

Coal-fired Power Stations
2.51 p.m.
Lord Dean of Beswick: My Lords I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they propose to order a coal-fired station power in the near future.
Lord Brabazon of Tara: My Lords, the ordering of new power stations in England and Wales is a matter for the Central Electricity Generating Board, in Scotland for the Scottish electricity boards, and in Northern Ireland for the Northern Electricity Service. The boards will require the consent of my right honourable friends the Secretaries of State for Energy, for Scotland or for Northern Ireland, as appropriate, should they wish to proceed with such a station. There is no application for a coal-fired power station currently under consideration.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that reply. Is he not aware that in the three areas of the country where power station manufacturers are in the main situated—in the North-East, the North-West and the Midlands—there could be further serious unemployment problems if there is no increase in the ordering programme of the CEGB? May I ask the Minister whether he is aware that the CEGB itself has forecast that probably from 1989 onwards it could be ordering 2,500 megawatts a year? Would it not make sense, in view of the unemployment situation, for the Secretary of State to intervene to bring forward the ordering of some of these coal-fired power stations, bearing in mind that they have a very good export potential?
Lord Brabazon of Tara: My Lords, the CEGB is considering the possibility of building new coal-fired power stations. It has included provision for a new coal-fired power station of an improved design in its 1986 capital investment memorandum, and work on a reference design for such a station on which the CEGB is co-operating with the manufacturers is proceeding and is expected to be completed by the end of 1986. The board is not seeking specific investment approval for the station at present. I do not think that it would be right for my right honourable friend the Secretary of State to intervene at this stage. Perhaps he should wait to see whether the CEGB seeks approval.
Lord Ezra: My Lords, does the noble Lord not agree that the extension of the Drax coal-fired power station was accomplished with remarkable success and that there are other very efficient coal-fired power stations in this country which could be similarly extended? This would avoid the need for lengthy and costly procedures for consent. Are not these matters which should be very seriously considered in supplying the necessary resources for electricity generation in this country?
Lord Brabazon of Tara: My Lords, the noble Lord is quite right. Drax is a very good example. Like the noble Lord, Lord Dean of Beswick, I, too, think that there is need for new power stations; but much of this hinges on the results of the Sizewell Inquiry which we expect in the autumn.
Lord Stoddart of Swindon: My Lords, is it not a fact that with the reductions in coal prices recently negotiated between the CEGB and the National Coal Board the cost argument is now moving in favour of coal and against nuclear? Would it not be sensible in those circumstances for the Government and, indeed, the CEGB to review the programme and to do as my noble friend Lord Dean of Beswick suggests, which is to bring forward replacement of coal-fired power stations with other coal-fired power stations?
Lord Brabazon of Tara: My Lords, I am not sure that, even with the reduction negotiated between British Coal and the CEGB for the price of new coal, it even approaches the price of nuclear power. We also believe that nuclear power has a major role to play in meeting the country's energy needs. It has the potential to provide our cheapest power, provided that new stations can be built to time and cost, and it also provides an important component of diversity. We still depend upon fossil fuels for the vast proportion of our energy supplies, but your Lordships will not need reminding how disruptive such dependence can be to the economy. We therefore feel that to throw away the opportunity of an alternative source of energy would be foolish.
Lord Tordoff: My Lords, before we move into the question of further coal-fired power stations or nuclear-fired power stations, ought not the Government to increase their investment in conservation? That would create both jobs and investment as the first stage before we have to make a choice between nuclear and coal-fired stations.
Lord Brabazon of Tara: My Lords, the Government currently have an enormous programme of conservation of energy. The potential is very large indeed. Nevertheless, new power stations will still be needed before the end of the century.
Lord Dean of Beswick: My Lords, I should like to put a further question to the Minister. I made the point to him that if a programme is not brought forward, there could be serious consequences regarding further unemployment in the North-East, the North-West and parts of the Midlands. Will the Minister take this into account and use his best endeavours with the Secretary of State at least to consider bringing forward such a programme in the interests of the people in those areas of the country?
Lord Brabazon of Tara: My Lords, I shall certainly pass on the remarks of the noble Lord, Lord Dean of Beswick, to my right honourable friend. That is really the best I can do at the moment.

The Defence Estimates 1986
2.57 p.m.
Lord Trefgarne Lord Trefgarne rose to move, That this House takes note of the Statement on the Defence Estimates 1986 (Cmnd. 9763).
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Successive annual Statements on the Defence Estimates have a number of features in common. They seek to explain the international background to our security policies; to set out the strengths, activities and equipment programmes of the armed forces; and to describe the Government's plans for managing the Ministry of Defence and the defence budget. In recent years this Government have also aimed to provide Parliament and the taxpayer—for whom the Statement is primarily intended—with much more information about the background to our defence policies, decisions and activities. This year's Statement improves even on last year's in the wealth of such information that it contains.
But, at the same time, each Statement may be said to have a main theme of its own. The main theme of the 1986 Statement is the need for stability, continuity and consolidation in defence policy. The international scene, of course, will not be static. Much has happened in the last 12 months. One of the most significant events is referred to in the opening paragraph of SDE 86: the return of the Soviet Union to the Geneva negotiating table. That it did so is a tribute to the resolution and firmness of the North Atlantic Alliance and indeed to the realism of the Soviet Union.
Another important feature of the year has been the continued emergence of a new, younger leadership in the Soviet Union. Many people have high hopes and expectations of this new leadership—not least, perhaps, the Soviet people themselves. The new leaders appear eager to talk the same language as ourselves, which is surely a hopeful and encouraging sign in itself. The very process of exchanging views can help in reducing tension and in fostering the long-term relationships that will allow security to be achieved
284
with fewer armaments on each side. The Government are absolutely committed to the development of such a constructive dialogue; it is part and parcel of our approach to East-West relations, as is our parallel commitment to realistic, balanced and verifiable measures of arms control. My noble friend Lord Glenarthur will say more on this when he replies to the debate.
But in seeking to develop a dialogue with the Soviet Union we must not forget the lessons of history. For nearly 70 years it has been a wise and prudent maxim that those who do business with the Soviet Union should look for the reality behind the rhetoric. We should remember this principle when assessing not just the Soviet Union's commitment to its own security—which no one could doubt—but its attitude to the security of others. The facts behind the friendly words are set out in detail in Annex A to the Statement: the Soviet Union devotes some 14 per cent. to 16 per cent. of its GDP to military spending; in the past 12 months it has continued to modernise and improve its nuclear weapons (and has, for example, deployed another inter-continental ballistic missile, the mobile SS.25, and increased the numbers of modern submarine-launched ballistic missiles, air-launched cruise missiles and SS.20 missiles); it has kept up its substantial programme of modernising its land and air forces in Europe; it is building at least six different classes of submarine and a surface fleet of increasingly larger and more versatile ships; and, unlike NATO, it maintains the ability to engage in chemical warfare on a huge scale.
In reciting these bald facts, I am not attempting to disturb your Lordships' well-earned rest. I am simply stating the position in as objective a fashion as possible.
I do not propose to discuss the possible reasons for the possession and continued strengthening of such powerful military forces in Europe, although some of the background is summarised in the first chapter of the White Paper. The crucial facts are that these forces exist, that they are a serious threat to peace, freedom and security in Europe and that it is essential that we and our allies should provide an adequate political and military counter-weight to them.
NATO's fundamental philosophy is the deterrence of aggression. At the heart of that philosophy is the strategy of forward defence and flexible response. In last year's Statement, we reaffirmed the validity and effectiveness of that strategy. This year's Statement sets out in detail the steps that the alliance has been taking to ensure that NATO's strategy continues to meet our needs. Let me highlight some of them.
NATO has continued to modernise its longer-range intermediate nuclear forces, in accordance with the "twin track" decision of December 1979. The alliance is committed to maintaining a full range of nuclear forces, but with no more warheads in Europe than are necessary to maintain deterrence. Indeed, warhead numbers will be reduced to no fewer than 2,400 below the level that existed in 1979. NATO Ministers have endorsed proposals for improving critical aspects of the alliance's conventional defences. We have revised the concept for the defence of NATO's Northern Army Group area, placing a greater emphasis than

285
before on the selection of vital areas, co-operation between different forces, and on tactical mobility and flexibility. There has been a substantial upsurge in international collaboration on defence equipment.
To dwell for a moment on this last point, equipment collaboration is vital for Britain, for Europe and for the Alliance as a whole. It will reduce the wasteful duplication of scarce scientific, technological and industrial resources. It will lead to improved interoperability and standardisation of equipment in NATO, and thus enhance the military effectiveness of the NATO countries' armed forces.
A particular effort to strengthen European collaboration has been made by the Independent European Programme Group. This is one of the clearest ways in which the Europeans can demonstrate their commitment to their own defence. It will enable Europe to pull its weight even more effectively within NATO. In making this point, I do not wish to play down the transatlantic dimension. This European effort is not an alternative to that. On the contrary, a strong Europe is able to co-operate more effectively, on a more equal footing, with the United States. The United States' own support for transatlantic co-operation has been shown through such measures as the Nunn and Quayle amendments.
Both pillars of NATO—European and transatlantic—are crucial to the security of all members of the Alliance. The defence of Western Europe depends on the continued presence of United States and Canadian forces on European soil. Equally, the forces of the European members of the alliance contribute to the security of our North American allies. The strength of the transatlantic bridge depends on both its pillars. The Government's policy is to strengthen the European pillar of the alliance through political, military and industrial co-operation, and to make it unequivocally clear that the Europeans are playing a full part not only in their own defence but in the security of the alliance as a whole.
Co-operation is important for another reason: NATO itself is nothing if not a co-operative venture. Indeed, it is one of the most successful multinational co-operatives that has yet been seen. The White Paper this year includes a short essay explaining briefly how NATO works. In this essay, the words "consultation" and "discussion" occur repeatedly. They are at the heart of NATO's processes. Their effectiveness is illustrated not only by the success of collective agreements—as in the case of the conventional defence improvements exercise—but also, for example, by the discussions in which the United States has sought the views of the other allies on the bilateral negotiations on nuclear and space arms at Geneva.
Among the European members, the United Kingdom's voice in NATO is strong and respected. Our major all-round contribution is recognised and valued by our allies. In absolute terms, only the United States has devoted more resources to defence. In 1986-87, the defence budget will be £18½ billion: the result of seven successive years of real increases. Over the past seven years, the Government have acted to repair the substantial deficiencies that had been left in our defences. We have greatly improved the ability of the Services to undertake the demanding tasks that are
286
required of them. We have raised service pay; we have increased the numbers of reserves; and we have kept up the drive to obtain better value for money in defence spending and in the use of resources. Not least, we have greatly improved and modernised the services' equipment: perhaps I can remind your Lordships that some 45 per cent. of our defence budget is spent on equipment.
The fruits of this commitment are remarkable. Since 1979 we have ordered over 50 warships. We have ordered nearly 500 aircraft for the Royal Air Force, and over 80 for the Fleet Air Arm. We have ordered six regiments of Challenger tanks, 23 battalions of Warrior and Saxon armoured personnel carriers, three regiments of the new multiple-launched rocket system artillery and 18 batteries of air defence missiles. In the last financial year alone we brought into service 13 warships, as well as a number of smaller vessels, nearly 70 aircraft, another regiment of Challenger tanks, two battalions of Saxon APCs, four batteries of air defence missiles and a whole host of other weapons and equipment, including the Sea Eagle missile, the JP 233 airfield denial weapon, the Ptarmigan digital communications system, the new SA-80 range of small arms and new radars for the air defence of the United Kingdom.
The Government's task now is to consolidate these substantial improvements, and to manage our resources to best advantage. We announced last year that our commitment to the NATO real growth target would end after 1985–86. This is no more than realistic: real growth could not simply have gone on for ever. But the ending of real growth inevitably means harder choices in the management of the defence programme.
Of course, the process of managing the defence programme has always required timely and careful decision-taking. This is part of everyday life in the Ministry of Defence. I emphasise this because sometimes it seems to be believed that the defence programme normally runs along smoothly on automatic pilot, and that every decision to change the financial commitment or timescale of a project is a sign of crises and catastrophe.
The reality is that the tailoring of commitments to available resources goes on continually, and changes to programmes are taking place all the time, for a wide variety of reasons. Every year, some of the decisions involved are harder to take than others. The White Paper makes clear that this year there will be some difficult decisions to be taken. It is important to get the answers right. I do not intend to go into details now. But my right honourable friend the Secretary of State has already cited the provision of an effective airborne early warning aircraft as an instance of the nature of the decisions with which we are faced.
I do not wish to paint too gloomy a picture. A number of factors are working in our favour. Expenditure on the Falklands is continuing to fall. We are benefiting from reductions in the price of oil. Most importantly, defence is sharing with the country as a whole the dividends of the Government's success in combating inflation. Last year, the Opposition defence spokesman in another place spent a good deal of time pouring scorn on the Government for having the temerity to assume that inflation might have fallen as

287
low as 3½ per cent. by 1987–88. It will not have escaped the attention of your Lordships that we have achieved this target a year early.
Another encouraging development is the substantial improvement taking place in the efficiency of the Ministry of Defence and the value for money we receive for defence spending. We are reaping the benefits of competition. Only two years ago the total percentage by value of contracts placed subject to competitive forces was 38 per cent. whereas last year it rose to more than 60 per cent. We are now much more commercially minded in our contractual negotiations with industry. As a result, the taxpayer is getting a better bargain and British defence manufacturers are becoming even more efficient and competitive overseas.
As I mentioned earlier, international collaboration on equipment is increasing in importance. Already about a sixth of our equipment budget is spent on collaborative projects. Finally, we are continuing the drive to transfer scarce resources so far as possible from the tail to the teeth, and to improve the effectiveness with which defence as a whole, and defence resources in particular, are managed.
All these factors help, although they do not remove the need to face up to the hard decisions that are necessary. But the improvements that we have made to the nation's defences will continue. As your Lordships will know, during the current financial year we plan to spend more than £8,000 million on equipment alone. Although it is difficult—and perhaps not altogether wise—to forecast precise delivery dates, I can tell your Lordships that by the end of the current year we expect to have brought into service: six major Royal Navy vessels; more than 40 aircraft; much new equipment, from fully operational stocks of Sting-ray torpedoes to advanced respirators; and further deliveries of, for example, Challenger tanks, Saxon APCs, Lynx anti-tank helicopters, improved BL.755 anti-armour weapons, and UK air defence radars.
Our achievements over the past seven years, and our plans for the future, are by any standards impressive. They illustrate the importance that this Government attach to the security of the nation. By way of further illustration, we are today announcing that GEC Telecommunications has just been appointed prime contractor for the expansion of UNITER, to provide a new generation of secure and survivable telecom-munications for some 60 RAF sites. When competitive sub-contracts have been placed for major sub-systems the total value of the order is expected to be more than £90 million.
I should now like to turn to an important matter which has been raised with the Government by the noble and gallant Lord, Lord Hill-Norton. This is the question of the relative merits of the so-called short fat design for naval frigates and the more conventional long thin design, and whether the decision made in 1983 to select the long thin design as the basis for a class of anti-submarine warfare frigates was the correct one.
As your Lordships will be aware, the noble and gallant Lord recently chaired a committee which produced a report on this question—a report which deserves, and which will get, the most thorough
288
consideration. My right honourable friend the Prime Minister has already informed the noble and gallant Lord that we intend to take up his suggestion that there should be an impartial inquiry into the issues raised, and that we would be appointing a recognised professional expert to undertake this task.
I am today able to inform your Lordships that Professor John Caldwell, president of the Royal Institution of Naval Architects, has agreed to chair this inquiry and that he is now assembling a small team of independent experts to help him. I am sure your Lordships will agree that it is of the highest importance that this matter should be looked into very thoroughly in order to settle once and for all an issue which has been the subject of debate and controversy for some time.
Among our NATO allies only the United States maintains a greater range of commitments. To NATO we contribute our independent strategic nuclear forces; our land and air forces in the Federal Republic of Germany; our maritime forces in the Eastern Atlantic and Channel; and the forces devoted to the defence of the United Kingdom. We also provide specialist reinforcement forces, in particular for NATO's northern flank. There are those who say that we cannot afford this spread of commitments any longer. The Government believe that we can and must. For these commitments cannot be seen in isolation one from another. They are more closely inter-related today than at any time in our history. Elimination of any of them would seriously weaken the alliance and make this country itself less secure.
Now to the future. We shall continue the drive to secure better value for money from defence spending. We shall sustain our efforts to modernise the equipment of the services. Above all, we shall continue to recognise the debt we owe to the men and women of the armed forces, and to ensure that they are properly rewarded for the service that they so readily give. Nothing is of greater importance to a country than its security. Nothing occupies a higher place in this Government's priorities. We intend that it shall remain so in the future. I beg to move.
Moved, That this House takes note of the Statement on the Defence Estimates 1986 (Cmnd. 9763).—(Lord Trefgarne.)
3.17 p.m.
Lord Boston of Faversham: My Lords, it is pleasant to be able to begin on a harmonious note by congratulating the noble Lord, Lord Trefgarne, on his admirable exposition of the Government's defence policy. I hasten to add, however, in case any ambiguity lurks in that observation, that I am not able to commend as admirable every aspect of the policy itself. But there is one development I can commend. I refer to the noble Lord's promotion to Minister of State for Defence Procurement. As this is our first full defence debate since that recent event it is right to offer him warm congratulations here. Your Lordships will also note that this is the first debate on the Defence Estimates 1986 in either House, a rare event I believe.
Two matters are at the forefront of our minds on defence. One is the need for strong and efficient armed forces sufficient for our needs both to defend ourselves

289
and to fulfil our obligations to our allies. Let me say at once that central to that policy is our membership of NATO with its dependence on both conventional forces and the Western nuclear deterrent. It is of course the paramount duty, as the noble Lord himself has just said, of any government to provide for the security of our country and people.
The other matter at the forefront of our minds is the need for effective agreement on disarmament and arms control, to which the noble Lord has also referred. I shall later return to our forces. My noble friend Lord Graham of Edmonton hopes to deal more fully with our forces and equipment. But I now want to concentrate on arms control and disarmament, not least because this year's Defence Estimates give those matters more space and prominence than before; and we welcome that.
In the 1984 Defence White Paper, arms control was given two pages. Last year, it was given just under three. This year, not only does it get six pages but it is given a whole chapter to itself with related passages elsewhere. If that is a sign of a new approach from the new Secretary of State for Defence, we welcome his appointment.
Another welcome indication of a more positive approach came from the visit to Moscow last month of the noble Viscount the Leader of the House at the head of all-party parliamentary delegation. I was encouraged to a large extent by what the noble Viscount had to say at the end of his visit. He said, as reported on 3rd June in The Times:
"I hope we have established a basis for greater understanding and perhaps greater mutual respect."
Even more encouraging was his comment that he was certain that the Soviet Union wanted an agreement on arms control—a view shared by the Foreign and Commonwealth Secretary. We, too, believe that to be the case. But perhaps the Government could do more to convince our American friends that that is the case.
We were also encouraged by the importance the noble Viscount attached to SALT II and the emphasis he gave to the Government's opposition to any scrapping of the treaty. I hope that the Government will not only continue to impress upon the United States Government the need to continue to observe the SALT II agreement but will also impress upon them the need to avoid making contradictory statements about it. One moment the United States Administration are saying that it is dead and the next moment they are saying that it is not dead. These statements are not only damaging to the alliance and its credibility; they are also a trifle alarming. They hardly show precision and clarity of thought on what is, after all, a matter which needs clear thinking—nuclear arms. If we, America's alliance partners, have been confused by these statements, it is hardly surprising that Mr. Gorbachev is reported to have found them confusing. On that, at least, I am bound to say I have some sympathy for him.
I just add this. Differences sometimes arise with our American friends and it is no use disguising those differences for I want them sorted out, as we all do. I am among those who regard the United States as our closest ally. Despite the problems over SALT II and
290
the differences within the alliance caused by the United States threat to scrap the treaty unless the Russians are forthcoming about their alleged violations, the prospects for agreement on arms control seem to be improving.
This has been highlighted by President Reagan's speech on Thursday last which was more conciliatory in tone than some he had made recently. It welcomed some aspects of the Russian proposals. We hope that this will have helped to put plans for the second Reagan-Gorbachev summit, due later this year, back on course after the recent signs that it might not after all take place because of President Reagan's SALT II pronouncement. We regard it as of vital importance that the personal dialogue between East and West is kept up and that the impetus of these arms control negotiations is maintained.
However, there are two aspects of the arms control negotiations which are causing us particular concern, and both are dealt with in the Defence White Paper. One is on the proposed comprehensive test ban treaty and the other is on chemical weapons, to which the noble Lord has already referred. I shall deal with that one first, if I may. We have been deeply disturbed by the recent moves within the alliance for a new generation of chemical weapons. There are United States plans for developing binary chemical weapons and the adoption by NATO of a force goal supporting the production of those weapons. Both these developments give cause for considerable concern and raise the spectre of a new arms race involving these appalling armaments.
Over the past year or so there has been a clearly discernible change in the attitude of Her Majesty's Government towards chemical weapons. Let me say. first of all, that the balance of these weapons as between East and West is overwhelmingly in the Russians' favour. It is not known, I believe, precisely what the amounts come to, but according to the Defence Estimates the Soviet Union is estimated to have some 300,000 tonnes of nerve agent alone and to have kept its stockpiles up to date; while the United States has a very much smaller stock of chemical weapons—some reports suggest 30,000 to 50.000 tonnes—which is ageing. They have not manufactured any stocks since 1969, and it is not declared to NATO.
The views of the military commanders that this imbalance should be put right are understandable, so it is not surprising that the Supreme Allied Commander Europe, General Bernard Rogers, called for modernisation of these weapons. However, decisions of this kind are clearly political ones, or they ought to be. Until a year or so ago our Government's position was clear—that Britain would stick to its policy not to use, produce or possess chemical weapons and would continue to press at the conference on disarmament in Geneva for a convention banning, comprehensively and throughout the world, the development, production, stockpiling and use of chemical weapons.
We had of course played a leading part in creating the 1925 Geneva Protocol outlawing the use of chemical weapons and we have not produced or possessed any of these weapons since the 1950s, when we abandoned them unilaterally. Britain's position was thus impeccable and we continued to occupy what

291
can be called the high moral ground on this matter. In a debate in your Lordships' House on 23 rd April last year the Minister, the noble Lord, Lord Trefgarne, also said this of government policy:
"While I recognise that there are those who … believe that the present situation may justify the acquisition by NATO of a retaliatory chemical capability, it is the view of Her Majesty's Government and of our NATO allies that the best answer is to work urgently for a comprehensive and verifiable world ban on the development, production, stockpiling and use of chemical weapons".
So the Government's position remained untarnished.
However, over the past two months or so we have seen a dramatic change in the Government's position. First, in the NATO Defence Review Committee our permanent representative supported the decision on, I believe, 27th April to adopt a force goal to approve United States production of a new generation of chemical weapons. That was then noted by the NATO Defence Planning Committee of defence Ministers on 22nd May; which meant that the force goal had now become NATO policy. If adopted by ambassadors in the Defence Review Committee, it then goes to defence Ministers in the Defence Planning Committee for noting, which I understand completes the process by which force goals become NATO policy.
This is understood to have been the procedure by which this policy decision was taken; and once representatives, not Ministers, have taken a decision it goes to Ministers where all that it is open for them to do is to note (or presumably not to note) the decision. It is apparently not open to them to vote against a proposal for noting. It then automatically becomes a force goal and is NATO policy.
I should like to be told that this is not the procedure. If it is not, no doubt the Minister will tell your Lordships what is the procedure. It is extraordinary and disturbing, if that is the way it was done, that such a momentous decision can be taken with major international implications and consequences and reversing, in part, a significant aspect of national policy built up over many years without any public discussion or debate and bypassing—indeed, ignoring—Parliament and people. People are disturbed, and one example is a leading article in the Daily Telegraph of 27th May which expressed deep concern. Those are just criticisms of the procedure, let alone the merits of the proposal itself for a new generation of chemical weapons.
There is one other aspect of this matter that I wish to raise. It is said that this NATO decision was taken to enable the United States to gain the support of Congress for the production of the proposed binary chemical weapons, so that Congress would release the funds needed to go ahead with them. The approval of Congress is conditional partly upon President Reagan gaining NATO support and upon contingency plans for deployment. We understand that the United States has reached agreement with Chancellor Kohl of West Germany that his country will agree to deployment of the weapons in a period of imminent crisis. However, we also understand that Chancellor Kohl would agree to that only if at least one other NATO country agreed to deployment in those circumstances. If that is so—and no doubt the Minister will tell us if it is
292
not—we wish to know which other country that is. Apart from our country no other country appears to have agreed, so it looks as though it must be us. Was it?
When I asked the Minister, the noble Lord, Lord Trefgarne, on 19th May whether the Prime Minister or any other Minister had given an undertaking to Chancellor Kohl that we would deploy those weapons in those circumstances, I was told that we had received no such request from the United States. With respect, I was given an answer that my witnesses sometimes give me in court. I was given an answer to a question I did not ask and no answer to the one I did! Can we now please be told whether we have given to Chancellor Kohl, or anyone else, any undertaking along the lines of an agreement to deploy these weapons and in what circumstances, if any? If we have, that is a serious matter. If we have not and if no other country but West Germany has agreed, then Congress can hardly be satisfied about plans for deployment.
Despite the criticisms that I have made, it would be churlish not to compliment the Government on the efforts that they have been making to secure a convention banning chemical weapons. Verification need no longer be a problem. The Government themselves have acknowledged that a perfect system of verification is not possible. The prospects for agreement are perhaps better than ever before. Indeed, the noble Baroness, Lady Young, told your Lordships on 12th March that we may now be better placed than ever to resolve outstanding problems. We hope that with the United Kingdom this year in the chair of the Committee on Chemical Weapons at the conference on disarmament in Geneva, the Government will be able to provide the final impetus to secure agreement. Perhaps the Minister the noble Lord, Lord Glenarthur, will tell us about the prospects and give us a report on progress since the talks resumed there on 10th June.
There is one other question I would ask on this. Surprisingly little attention has been given to a remark of the noble Viscount the Leader of the House during his Moscow trip. He was reported in The Times of 27th May as saying that he stressed positive aspects of Mr. Gorbachev's approach, which included a new approach to the chemical weapons talks in Geneva. We were pleased to see that, and I would be grateful for further details of the new Russian approach.
We were also pleased to see in the Defence White Paper references to the successful conclusion last September of the third review conference on the nuclear non-proliferation treaty, one of the few great achievements to come out of arms control negotiations. Unhappily, however, while it refers to differences of view at the conference, the White Paper glosses over—indeed, does not even mention—a main decision of the conference, the call last year upon the nuclear weapons states to resume negotiations to end all test explosions for all time; in other words, for a comprehensive test ban treaty.
The conference was also critical of the depository states of the non-proliferation treaty—the United Kingdom, the United States and the Soviet Union—for failing to fulfil the pledge in Article 6 of the treaty for various disarmament measures, and the conference gave those countries what amounted to a

293
salutary warning, for it became clear that, unless significant progress was made on those various disarmament aims, the treaty itself would be in jeopardy when it comes up for review again in 1990 and for renewal in 1995.
There is now no longer any adequate reason for refusing to resume negotiations for a comprehensive test ban treaty. The terms for a treaty were close to being finalised in 1980, but the negotiations lapsed in the aftermath of the Russian invasion of Afghanistan.
If the deterioration in East-West relations caused the talks to break down, that cannot possibly be the case now with the improvement in East-West relations and all the contacts and negotiations now going on. It is said that verification is a problem and that we cannot resume negotiations until that is sorted out. Even if we were to accept that verification is still a problem, the argument that it is an obstacle to resuming negotiations does not stand up for a moment. After all, verification was said to be a problem in 1980, but that did not stop us negotiating then. Everyone would agree that there has been progress on verification since 1980, and so, if it was not a bar to negotiations then, it cannot possibly be now.
The fact is that there is a growing body of expert, informed and influential opinion which is convinced that verification is no longer a problem. It is claimed that developments in detection techniques, seismic monitoring and satellite surveillance are making verification easier all the time, and make it possible to meet our needs. We are told that leading seismologists from East and West agree that explosions of more than 1 kilotonne can now be detected. We are also told that most seismologists accept—though some are said to be more pessimistic—the judgment of the head of the Institute of Earth Physics at the Soviet Academy of Sciences, academician Mikhail Sadovsky, that the United States system of seismic stations guarantees in practice, with a high degree of probability, the detection of underground nuclear explosions of substantially less than 1 kilotonne in Soviet territory. We ought to be told if that judgment is suspect. We are told, too, that the assurance would be even greater with seismic monitoring stations on Soviet territory. Let us not forget that the Russians agreed to that in 1978. Only the very smallest nuclear explosions could escape detection, and those would not be of military significance.
Even if verification problems still remain to be resolved—and, if they do, perhaps the Minister the noble Lord, Lord Glenarthur, can tell us what they are—this cannot possibly be an obstacle to resuming negotiations. If the Government have other reasons, if they do not want a ban because they want to continue testing, they should tell us plainly.
Before leaving these matters, may I say that I am delighted that my noble friend Lord Brockway is with us today and taking part in the debate. While I do not always agree with all that my noble friend says, his great concern and deep knowledge of the subject is unchallengeable.
The moment could hardly be more propitious for resuming negotiations on a comprehensive test ban treaty. Last year the Chinese Government said that
294
they were willing to join the United Kingdom, the United States and Russia in an ad hoc committee to produce a ban on nuclear tests, and that was greeted as a major change in Chinese policy. I hope that the Government will say that they are prepared to resume negotiations.
There is one other matter that I wish to mention—the Merchant Navy. It is good that the Government have kept their pledge again this year to include in the Defence White Paper a passage on the Merchant Navy. The Falklands war highlighted the vital role that it plays in supporting the Royal Navy. Last year deep concern was expressed in all parts of your Lordships' House and elsewhere at the decline of the merchant fleet. There is even more concern this year. On 30th May the new president of the General Council of British Shipping, Mr. Garry Runciman, was reported in the Daily Telegraph and the Financial Times as saying that the Merchant Navy could "sink to almost total insignificance" unless something was done. It was for the Government to decide, he said, whether there was a minimum below which the British owned and registered fleet ought not to be allowed to fall and, if so, what was to be done about it.
"Is the Government indifferent to what is happening?",
he asked. The Daily Telegraph went on to quote him saying that,
"he preferred to believe that the Prime Minister stood by her earlier avowal that a strong Merchant Navy was vital for strategic purposes."
The Defence White Paper sounds remarkably complacent in saying of the merchant fleet that,
"the scale of its recent decline has caused some concern".
The White Paper says that there are still sufficient ships of most of the types needed, and it adds that "most" of our requirements are "likely" to be met—not a very reassuring way to put it.
The White Paper says that the "one exception" is in mine countermeasures vessels, and it refers to the "serious shortage of trawlers" suitable for these purposes. It says that studies to find alternatives would be completed "in the spring". Yesterday was midsummer's day. I am wondering about the outcome of those studies.
That is "one exception" identified by the White Paper, but it is a pretty important exception, for the White Paper also says that,
"One of the more serious threats to shipping in shallow waters is that from modern mines".
It says that those could be,
"an effective way … of impeding seaborne re-inforcements.… or inhibiting the movements of our Polaris submarines".
Doubt has been cast on the claim that our other defence needs can be met from the merchant fleet. I give just one of many sources of that doubt. It is from somebody who has made a special study of shipping over many years, the Minister's right honourable friend, Sir Edward du Cann, who said:
"The complacency of the Government and Ministers in this most serious situation is astounding"—[Official Report, Commons 6/2/86; col. 485.]
In two very closely argued speeches in another place recently he analysed the problem and put forward a series of detailed proposals.

295
By the way, the General Council of British Shipping is not looking for subsidies. We know of course of the world decline, but there are steps that the Government could take, and in view of the threat to our security which they rate so highly, as we have just heard, we hope to hear of action that is to be taken.
While referring to ships I must mention another matter upon which the noble Lord, Lord Trefgarne, touched. I want to congratulate the noble and gallant Lord, Lord Hill-Norton, on the recent admirable report on hull forms for warships by his committee of inquiry into the controversy over whether we should have the traditional long, thin hull or the more radical, short, fat type. I congratulate the committee on its immediate success in persuading the Government to accept its recommendation to set up an impartial official inquiry. I congratulate the noble and gallant Lord not only on his inquiry into hull forms but also on the most skilful form of his committee's report, which looks suspiciously like the Defence Estimates themselves. I should not be at all surprised if the reason the Government accepted the report so swiftly was that they thought that it was one of theirs! I am sure in fact that it was decided on the merits.
The serious point I am making is that we should try to do all that we can to ensure that our armed forces have the best possible equipment within the limits of national resources and policies. We cannot praise them enough (and our reserve forces and support services) for the courage and devotion that they show in performing their duties, and we commend them not least for the way that they act as outstanding ambassadors of this country when they are abroad. We want to express our thanks to them all.
3.41 p.m.
Lord Kennet: My Lords, we join with the Labour Opposition in congratulating the noble Lord—I think it is a matter of congratulation—on his translation to the post of Minister of State for Defence Procurement. Late last night I was full of admiration and amazement when I saw him soldiering through amendment after amendment in this House on the Wages Bill. We just hope that he will not allow his good nature in doing the work of other departments to prevent him from procuring defence.
The noble Lord, Lord Boston, mentioned what is perhaps the most important thing in our view also in the Defence White Paper, and that is the run down of the merchant marine and its defence implications. I should like to add another chapter to that story, which I also mentioned last year and about which I have heard nothing further since. In 1984 there were 1,400 Soviet ship visits to this country. In 1985 there were 1,600. The latest date that we have for the reverse process is 1983, when there were 80 British ship visits to the Soviet Union. I recently asked a Question of the Government in the hope of obtaining more recent figures and the Answer was as follows:
"The information requested is not available. However, the UK vessel operating in the UK/USSR scheduled liner service makes some 25 to 30 visits annually. In addition there may be a limited number of [other] calls".
So the Soviet visits are going up beyond 1,600 and ours are coming down below about 50. Quite apart from all the obviously bad results of that—it is a good
296
thing to have one's ships in the trade between one's own country and another country, and it is a good thing that British mariners should still know how to operate in the far north—there is the point of the seamen's visits ashore. We have some figures about this. Last year the Foreign Office thought that there were more visits by British ships to the Soviet Union than the Department of Trade thought; they also thought that there were fewer Soviet seamen ashore in Britain than the Home Office thought. They have subsequently revised their estimates to come into line with the functional departments in both cases. We are now told that there are more than 30,000 Soviet seamen coming ashore in this country each year without visas. I do not quite know what to think about this matter. If there were 30,000 British seamen going ashore in the Soviet Union without visas and wandering around there, one might not worry too much. What is the Government's view of this extraordinary disparity? Does it matter, or does it not? If not, why not?
I should like to turn now to make a brief discourse on part of the Alliance policy on defence. Two years ago the leaders of the two Alliance parties set up a joint commission to look into our defence and disarmament policy. Its report was published two weeks ago. It is quite long, and it sets out the commission's views and policies quite unequivocally as 24 recommendations. All these recommendations have been accepted by all the members of both parties on the commission. The report is unanimous, and there are no notes of dissent from any recommendation. My noble friend Lord Mayhew was a member of this commission, and both parties owe him a great debt for the part that he took in its work.
The recent press coverage of the supposed differences between our two parties in the Alliance refers to only one of these 24 recommendations—actually No. 11 in the summary, about replacing the Polaris system. I hope that later in the debate my noble friend will be able to give the House an idea of the great breadth and thoroughness of the report as a whole. Let me, if I may, read out this recommendation as it appears in the text of the report of the joint Alliance commission:
"We believe that the Polaris submarines should be maintained in service as a European contribution to deterrence for the next decade … and therefore do not need to be replaced now. During this period we believe it will be the duty of the British government to play its proper part in the arms control process by ensuring that British nuclear weapons are included in the negotiations. No decision on whether and if so how British nuclear weapons should be maintained beyond Polaris can properly be made except in the light of"—
and here follow four separate points—

"[1]—the progress of arms control and disarmament,

[2]—the balance of relationships within NATO between Europe and the United States,

[3]—the range and costs of the technical alternatives … available to maintain a European minimum deterrent,

[4]—the views of our European allies on whether new British nuclear capabilities are required for European defence.

"These are matters which have not been fully taken into account by the present government in coming to its decisions on the Trident programme"
That is a perfectly clear statement that we shall keep Polaris going for some years more than the Government at present intend, and that we shall take

297
our decisions about its replacement at what we consider to be the right moment, which is not several years before such decisions need to be taken. We shall not follow the Government in their haste. We are responsible people. We shall neither put the security of the country at risk nor take decisions today which may become outdated before they have even become necessary. We are saying today how we shall decide, not what we shall decide.
For the last six years we have clearly and continuously condemned both Labour and Conservative parties for nailing their colours to masts of ill thought-out and dangerous policies—indeed, for positively glorying in closing off options before due time. On the one hand there are "Ban the bomb" and "Yanks go home", and on the other hand there is "Trident D5 and quite possibly nothing but Trident D5".
Let us look at reality; let us look at these four factors, as we call them. Three of them are about future political developments and one is about the future of technology—that is the one where we say we shall take the technical alternatives to Polaris into account in reaching our decision. As for the political ones, one is about intra-European relations—consulting our allies and listening to their views on our continuing to contribute to the nuclear European deterrent. One is about transatlantic relations—about the balance between the United States and Europeans within NATO. The third (which is actually the first in the text) is about East-West relations—about disarmament. Two West-West, and one East-West.
Technology moves fast, and its political and strategic implications are hard to predict. World politics move even faster, and in many directions, and are even harder to predict in their strategic implications. But it is possible to see what these factors look like now.
Technology today already gives us a wide choice of alternatives to Polaris. We must reproach the Government for not having looked at that choice themselves. The Government did not even ask British Aerospace to make suggestions; though they had hoped to be asked. The Government did not even approach the French, with their much greater experience of missile building. The Prime Minister made a single speech in Bordeaux, at the beginning of her time, and then dropped it.
We should examine all the possibilities, and they are quite numerous. They have all been published in the technical press and they all have their friends. Any of them could be an Anglo-French programme. Some of them—those using weapons systems which would also carry conventional warheads—could be European NATO programmes; and any of them could include United States elements. These are options which are there now, and were there when the Government plumped for Trident in 1980. Their Open Government paper of that year shows that they did not consider them. They chose instead a missile system which I would remind the House has not even yet been flight-tested—the D5. I wonder what the Government really think about that after the Shuttle disaster and the Titan and Delta failures.
298
I turn now to the three political factors which we would take into account when we come to make our decision, and the first is intra-European relations. It is some years now since the arrow in Paris began to turn towards military nuclear collaboration with this country; it is now pointing firmly that way. There are of course many obstacles, but they are not political ones. They are to do with industrial and military tradition, by now not with will, and it is time to examine them and to disperse them. In Bonn the same is true; except of course that collaboration with the Federal Republic cannot be in the manufacture or control of nuclear warheads themselves. In Rome, it has been the same climate for years. I do not know if the Government know this, but the need to add London to the now fully developed Paris-Bonn military understanding is generally felt in Western Europe, and the obstacles are seen as being in London. I think perhaps the Government do know it and are just not good enough Europeans to want to do anything about it.
As to the balance between the United States and Europe within NATO, here we tread on more delicate ground, especially perhaps in this House. NATO belongs to all its members. Under its present administration, the United States has sometimes forgotten this. We in the SDP-Liberal alliance are sometimes accused of being anti-American. Nothing could be further from the truth. We, like Her Majesty's Government, regard the United States as a great western democracy and one to which, between 1942 and 1950, and indeed ever since, Europe has come to owe a very great deal. But administrations vary. If you consider United States actions and policies in the politico-military field since this administration came in, it would be difficult indeed to say that they have been as helpful to Europe, as regardful of European interests and views, as other American administrations since 1942.
We now see a fundamental change in United States military thinking—what Admiral Crowe, the chairman of the United States Joint Chiefs of Staff has epitomised as, "peace through strength". The phrase has a rather chilling sound to the European ear, and so does the kind of operational posture that is to embody it—a very high profile forward defence, the air-land battle concept, and its very deep strike capability, growing out of FOFA, the New Maritime Strategy, the new, too vulnerable land-based strategic missiles in the United States, and eventually SDI itself as a cap over the Soviet Union. These are all United States national postures affecting us and undiscussed with us.
These developments may make sense within the United States military, and perhaps wider in the United States to the generation who fought and suffered terrible losses in Vietnam and feel they have wrongs to put right. But for us, as we edge steadily towards reducing the barriers and divisions of our small continent, they spell an unacceptable hardening and heightening of those barriers and divisions.
If we have to keep pointing out the current transatlantic difficulties, it is not because we are anti-American; it is because this administration actually does keep doing things which make life quite difficult for us in Europe. We do not take these difficulties themselves too tragically: NATO will survive, because

299
it is in all our interests that it should. But how many people are there in the country who do not yet understand that, if things can get this bad under this President, with European Governments as sympathetic to him as today's are, they could get worse under another? It is that thought which convinces us that the time has come to begin to redress the balance and to increase the weight of the European pillar of NATO in all ways.
Third, is the factor of East-West relations. I believe this is the one which, in this House and among the people at large, will be most readily understood and accepted. We are a nuclear weapons power in a world which contains nuclear weapons powers, and as long as the world stays like that we will stay a nuclear power. This is the view that the people of this country have long held and continue to hold. We welcome Mr. Gorbachev's recognition that this fact has to be taken into account in any plausible international arms control-disarmament programme. Naturally—and our commission report has pages about it—we will work within NATO, and in solidarity with the whole community of mankind, to reduce and finally perhaps even to eliminate the nuclear weapons threat. But it would be an optimist indeed who believed that that was certain to come about before the British Polaris force reaches the end of its natural life, or who envisaged the future framework of this country's defences in terms of that optimism.
We welcome the comprehensiveness and the increasing realism of Mr. Gorbachev's recent proposals. At last, they take up and respond to what sensible Western governments—and that includes Her Majesty's Government—have been saying for years. Particularly, we in the SDP-Liberal Alliance agree with him that, "a reasonable sufficiency" of military forces can and should be our aim. Then of course comes the problem of defining" "reasonable sufficiency". May I recommend noble Lords who are interested to study Sir Michael Howard's article in the current RUSI Journal on the necessary concept of minimum deterrence? I think the whole House will be delighted with the knighthood which has been conferred on this great reasoner and historian.
Let me now turn once again to SDI—this time outside the framework of the Alliance report on which I have been commenting. At Christmas 1984, the Prime Minister went to Washington and drew up with President Reagan the famous Four Points, which were in fact the conditions on which we agreed to support the research phase of the SDI. The Government have stuck by those points through thick and thin, as an appropriate basis for agreement between the United States and the Soviet Union on space weapons. They reproduce them most recently in the Defence Estimates which we are now debating, and they have been right to stick by them and to reproduce them again and again. Moreover, these points actually have a wider reference than SDI; they could and should govern NATO in all its dealings with the Soviet Union.
Now, two days ago, they have been explicitly disavowed by the United States Secretary for Defense speaking, we must fear, for the United States administration. I quote from yesterday's Daily Telegraph—an all too credible report.
300
"Asked whether he would be prepared to subject certain parts of the Strategic Defence Initiative programme…to negotiation",
Mr. Weinberger replied,
"certainly nothing should hamper or delay in any way our ability to deploy a strategic defence system should the research prove—as I believe it will—feasible."
That was yesterday's story. Today's story is that Mr. Younger has gone to Washington and has signed up with this very Mr. Weinberger a £10 million contract to do research into that part of SDI called "European Architecture". This will be taken by many people in the United States, and powerful ones at that, to constitute British agreement to bury the Four Points. Will the Government please deal with that if possible at the end of the debate?
Will they also please deal with the status of that European architecture agreement as between the United Kingdom and its European allies? The Minister of State has recently told the House that European architecture research, as it is called, will be done by us in a NATO context under a NATO banner. How does one NATO ally do classified research at the cost of another under a NATO banner? Details would be welcome.
This deplorable tangle has a relevance to the question of Polaris replacement, as I am sure the Government will agree. If SDI goes ahead despite Russian protests—and Mr. Weinberger has made it crystal clear that if he has anything to do with it, it will—and against ours too—then the Russians are likely to develop their own SDI. And they will find it a great deal easier to put up a defence against our little nuclear force than against the vast American one.
I am not here talking of the nonsense of a British first strike against the Soviet Union. That is not how life is. British nuclear weapons, and French, present the Soviet Union with a risk that they will not take, not a threat. That is the essence of retaliatory deterrence. I am talking of the general feeling of "think twice", which even the smallest retaliatory nuclear force inspires. That is how life is. But a retaliatory nuclear force which is rendered ineffective inspires no sense of anything at all.
In short, we on these Benches stand 100 per cent. with the Government in support of the Prime Minister's excellent four points agreed with President Reagan, and we are puzzled why she is helping the United States, through her avid co-operation in its SDI research, to impel the Soviet Union to do something which would render our nuclear force inoperative long before it had any effect on the American one. I am sure that we can trust the Government to clear up those contradictions later in the debate.
I end with a compliment to the Government on the continuing clarity and fullness of their Defence White Papers each year, especially the essay system. I regret to see that some of the essays are a bit short compared with tradition. I hope that they will not be allowed to vanish. It certainly is much easier to follow government thoughts that way, with full exposition, and that very ease of following leads me personally to agree with more of government policy than I used to in the days when it was shrouded in an obscurity which contrived to be both bureaucratic and laconic at once. The Government are right not to fear clarity and I hope that they will continue in that way.
4.2 p.m.
Lord Hill-Norton: My Lords, I must start by criticising as vigorously as I am able the usual channels, which have arranged for our defence debate this year to revert to the entirely unsatisfactory practice of being confined to one day. I have so informed both the noble Viscount the Leader of the House and the noble Lord the Leader of the Opposition that I was about to do so.
Your Lordships will recall that last year, after several years of sustained pressure from many noble Lords, they were reluctantly driven to allocating two days, which I warmly welcomed (and so did other noble Lords) at the time. I do not agree with the noble Lord the Government Chief Whip, who has said that "the general view (of your Lordships) seemed to be that the arrangement was not a success", and I am bound to wonder how many noble Lords who usually speak about defence in our debates were actually asked. I certainly was not.
As I have said, ever since I have had the honour of membership of your Lordships' House, defence cannot be regarded as other than of overriding national importance, by whatever criteria that is measured. It may well be that to spend just two days on it compared with, for example, recently seven days on the Gas Bill, three days on the Agriculture Bill, goodness knows how many days on the Shops Bill and three days on the Dockyard Services Bill, which itself is just a very small part of defence, is not convenient to the usual channels.
Lord Kennet: My Lords, I wonder whether the noble and gallant Lord will allow me to intervene.
Lord Hill-Norton: No, my Lords; I am sorry. I speak only once a year and I should like to continue.
But I have to regard what I have just said as a great deal less important than the reputation of your Lordships' House. As for the serious difficulties which it was claimed that a two-day debate might cause for the Opposition parties, to which the Chief Whip has also referred, I find that, if it is true, a dreadful reflection on the importance in which defence is held by them. Are there really fewer than four Front-Bench spokesmen in the whole of Her Majesty's loyal Opposition prepared to speak about defence in a two-day debate? If so, I cannot be alone in finding that simply astounding.
Lord Kennet: My Lords, may I have another shot?
Lord Hill-Norton: No, my Lords. I very much hope that the noble Viscount the Leader of the House will give the matter his personal attention before arrangements are made for the debate next year. If the noble Lord, Lord Kennet, has something to say now, I shall give way.
Lord Kennet: My Lords, I should like to thank the noble and gallant Lord for his courtesy in giving way. I was not consulted about the change back to one day, and, as a party spokesman on defence, I very much regret that.
Lord Hill-Norton: If I may continue, my Lords, I have some points of substance to make on this year's Statement. First, I congratulate the Ministers, the editor and the authors on an extremely well-presented, well-written and generally informative document. It has been criticised in some knowledgeable quarters as being a bit glib, and so I suppose it is in the sense that most of the really difficult problems before the Government in the defence ministry are glossed over a bit easily, not least, of course, the fact that defence spending is set to decline in real terms by 6 per cent. over the next three years. It is that central decision by the Government which has caused and given rise to the serious difficulties which face those who have to administer defence today, which will certainly be exacerbated in the next few years and from which our general defence posture now suffers.
A few of those difficulties, such as equipment and manpower shortages, stretch, training and support are bound to worry those like myself whose primary concern is to see no diminution in our country's broad defence within the NATO alliance. What the White Paper correctly reminds us of is the seamless robe of deterrence.
I should like to refer next to the question of frigate numbers. The Government have repeatedly pledged that those should not fall below 50, and they said that again in another place last week. I have equally often said that that is not enough. I am supported in that view by the NATO Supreme Allied Commander Atlantic and the former Commander in Chief Fleet, now the First Sea Lord, who have both stated publicly that they need about double that number. But to maintain even such a modest force requires actuarially that three a year should be ordered.
We see in the White Paper, despite what the noble Lord, Lord Trefgarne, said in his opening speech, that only nine have been ordered since 1979, and that is a shortfall of no fewer than 12 on what should have been ordered, or a quarter of the whole force. That is impossible to understand if the pledges repeatedly made by Ministers are to be believed. Perhaps the noble Lord the Minister who is to wind up will explain that extraordinary discrepancy.
In the general context of warship orders, I was not alone in being deeply disappointed not to see any reference in the White Paper to the much-needed replacements for the two assault ships which are now nearing the end of their highly valuable lives. I am informed that it is common ground today among all three services, and certainly among our NATO allies, that purpose-built ships to replace the "Fearless" and the "Intrepid" are essential and that they should be ordered now if they are to be available in time. Such replacement ships would not only do the operational job much better, but they would be much more economical in every way. Particularly in the all-important respect of manpower. I ask the noble Lord who is to reply to tell us when we may expect those orders to be placed.
To return to frigates, may I urge that we should press vigorously ahead with the NATO frigate replacement referred to briefly on page 19 of the White Paper? That project can, and should, be driven through to a successful conclusion if the will is there and if we take

303
a robust but flexible lead. It was we who were responsible for the collapse and failure of the comparable minesweeper project some years ago by refusing to try hard enough to reconcile originally conflicting requirements. We shall not be forgiven if we also cause this imaginative venture to founder.
There can surely be no doubt that the hull, machinery and accommodation for the ships can be built to a common design. If countries are determined to have a different weapons fit (and that is nearly always for industrial or political, but not military, reasons) that can today be readily managed on a modular basis. We are very good at that sort of task both by history and by aptitude. If we were determined enough to make it work, we could certainly do so, and nobody would be better pleased than our allies.
Manpower, as the White Paper correctly observes, is one of our major resources. Like most senior officers, I go much further and say that it is our most important resource. I am concerned that it has now been cut too far in all three services, but particularly in my own.
I applaud of course all the efforts which have been made to improve the teeth-to-tail ratio and to squeeze out fat—not that there has been much of that about in recent years. But if the process is allowed to go too far, as I believe it now has, our men and women in uniform will be stretched to a degree which in 1986 and peacetime is no longer acceptable to them. It should not be acceptable to us.
It is not only that people, even those as well trained and well motivated as ours, are liable to make mistakes—that is extremely expensive and highly dangerous with modern equipment—but they also start to wonder whether they want to join the services or, having joined, whether they want to stay in them.
I agree that manpower ceilings must be established, but it is my view that they should be flexible and not too rigid so that if new commitments arise or existing ones become more demanding than had been foreseen, such ceilings should be allowed to rise, and the money made available to pay for them, so that the resources can match the task. If that is not done, either the job will not be done or not done properly, or the people concerned will vote with their feet and leave.
I should mention the Royal dockyards. They are discussed at some length on page 50 of the White Paper. I made my views clear enough I hope on Second Reading of the Dockyard Services Bill and there is no point in saying it all again now. A great many of your Lordships have shown a keen interest in that Bill, as its importance deserves. I should just like to repeat my view that the outcome must include, if the Government's proposals are to have any chance of success, the removal of the workforce from the entirely inappropriate constraints of the Civil Service rules about pay and working conditions, which make it impossible for management to manage enterprises of that nature. Secondly, the capital assets must remain the property of the Government. Thirdly, the workforce must be contented and, above all, the interests of the fleet must be uppermost in Ministers' minds. I do not believe that those four aims have any chance of being reached with the Bill in its original form. I have high hopes that it will be suitably amended on Report.
304
I must record my anxiety, which I share with the noble Lords, Lord Boston and Lord Kennet, about the perfunctory reference in the White Paper to merchant shipping, which is quite unworthy of its importance to defence. Indeed, the few words which have been used can only be considered alarming. The noble Lord, Lord Boston, quoted them. I shall quote them again:
"there are still sufficient ships of most of the particular types we need to meet our defence requirements and … most of our requirements are likely to be met".
Is there any other respect in which only "most" of our requirements for defence are likely to be met, one wonders? If so, whatever happened to the "seamless robe"? It is a disgraceful admission which flows directly from the Government's almost total neglect of all our maritime requirements, about which I have frequently spoken in your Lordships' House.
In truth, the facts are much worse, and it would be much more accurate to say, "Many of our requirements can no longer be met". I assert, without fear of contradiction, that today we could not mount even such a relatively small operation as the Falklands with the numbers and particularly the types of ships under the red and blue ensigns.
Although I have confined my remarks almost entirely to the Royal Navy, I must refer to the Nimrod shambles. Ten years ago, as chairman of the NATO military committee, and thus an international servant, I urged the British Secretary of State for Defence to join virtually all the allies in the purchase and deployment of the American E3A aircraft which was then operational. For almost entirely political and industrial reasons he decided to go for the Nimrod instead. I warned him that even if it were operationally effective, which was certainly doubtful, it would probably be five years late and cost twice as much as expected. As your Lordships will know, both those warnings proved to be gross underestimates. What is required is urgent remedial action to close that yawning gap in our air defences and those of our allies, which critically affects all the services. I hope that this time round defence will be uppermost in the mind of the Secretary of State for Defence.
In conclusion, I must say a word, though I had not intended to do so when I stood up, about the hull committee which I chaired and which recently reported to the Prime Minister, because the noble Lords, Lord Trefgarne and Lord Boston of Faversham, mentioned it as well as my name in connection with it. I was delighted to hear from the noble Lord, Lord Trefgarne, that Professor Caldwell has been appointed to conduct the inquiry. The Prime Minister promised me that there would be a suitably eminent and qualified person—I cannot remember the precise words—of well-known impartiality to conduct it. I can think of no one better than Professor Caldwell.
I should just like to say, without going into any of the merits or demerits of what is discussed about the controversy, that the most important points are, first, that the inquiry should be impartial and, secondly, that it should concern itself, as my committee did, with which is the best hull form for modern warships of the frigate or destroyer size, and it should not rake over the embers of what took place, rightly or wrongly, in 1983. Finally, when the report has been made I hope that everybody concerned, including myself, will shut up about it.
4.19 p.m.
Lord Thomas of Swynnerton: My Lords, I apologise for the fact that I shall not be able to stay until the end of the debate due to an engagement to speak elsewhere. Like other noble Lords who have spoken, I should like to congratulate my noble friend the Minister on the way he introduced the excellent White Paper on Defence.
I was very pleased at the way the chief Opposition spokesman on defence, the noble Lord, Lord Boston of Faversham, so firmly stated his support of the United States as our closest ally. I agreed with him when he drew attention to the remarks of Mr. Garry Runciman in relation to the plight of the British Merchant Navy. I am as firm a supporter of the free market as anyone in this House. It might, however, be helpful to remind the Government that Adam Smith in Wealth of Nations made a significant point when, after having discussed at great length the importance of free trade, he said:
"Defence is more important than opulence".
I agreed with the noble and gallant Lord, Lord Hill-Norton, when he said that there was a good case for having two days devoted to defence in the course of the year, one devoted to general principles and the other devoted to practical details to which he gave such attention.
When preparing for this debate, I chanced to look through a volume of the short stories of Kipling. I came across one entitled Between the Devil and the Deep Sea in which the sentence occurs:
"Deep peace lay over Europe, Asia, Africa, America, Australasia, and Polynesia".
It is tragic to have to admit that not since 1914 has it been possible for anyone to write a sentence of that sort. I am not so simple as to think that there is only one reason for this obvious decline in international manners. One obvious reason, summarised extremely well in Chapter One of the White Paper, is the unique challenge posed by the complicated and unprecedented blend of Russian nationalism and Marxism-Leninism, so intertwined that the two are really no longer, for practical purposes, distinguishable.
My noble friend Lord Trefgarne spoke of the supposition that the new leaders in the Soviet Union seemed eager to speak the same language as ourselves. I would venture to suggest to him that anyone who has read carefully the speech made by Mr. Gorbachev to the February congress of the Communist Party of the Soviet Union would draw the conclusion that the present leaders of the Soviet Union are still speaking the language of ideology rather than the language of free people and the way that we speak or wish to speak ourselves.
I wish to draw particular attention to three points in Chapter One of the White Paper. First, there is the reminder that events of the recent past suggest once again—this cannot be stated often enough—that it is not conciliatoriness on the part of the West but strength that takes the Soviet Union as a rule to the conference table, whether on disarmament questions or anything else. Secondly, the White Paper reminds us that the Soviet sense of insecurity is such that history suggests that it cannot properly be soothed
306
without a sense of total insecurity on the part of its neighbours. This is something that Eastern Europe learnt long ago and that Afghanistan is still learning today.
The next point to which I wish to draw attention is that part of the White Paper which notes that, in the course of the last generation or so, there has been a major amendment to the ideology of Marxism-Leninism in respect of the inevitability of war. If nuclear war, as is now the case, is wisely excluded from the theory of struggle, which is indeed suggested, it is nevertheless left to us to realise—this is put extremely well in the White Paper—that the Soviet Union holds itself entirely free to embark on a wide range of other forms of struggle such as subversion, economic competition, pursuit of strategic advantage in the third world, propaganda, espionage and so on. These are activities that, at any previous stage of history, would have been regarded as something close to conflict itself.
One might well suppose that the wars of the 18th or 19th centuries were more like the peace of the 20th century. There is a paradox here. Marx, as I understand it, suggested that economic competition would automatically lead to conflict. It would be the normal proposition that if you have a row over economic matters, this could seriously risk good relations. Yet this is one of the few things that is now thought to be an allowable activity between West and East.
The points made in Chapter One seem to me so interesting and important and indeed so well put that I should like to suggest to the Minister who is to reply that he might contemplate making some kind of summary for the benefit of the public at large who do not read the Defence White Paper—for example, schools, universities and polytechnics. It would be particularly helpful if a pamphlet based on this chapter could be supported by the Opposition. I imagine that the noble Lord, Lord Boston of Faversham, would have no hesitation in thinking that this might be beneficial. It would perhaps be the beginning of the revival of our appreciation that while we are formally at peace, the battles of propaganda are as important as any other in our relations with the Soviet Union.
I wish to make one or two remarks in relation to Chapters Two and Three. The noble Lord, Lord Kennet, mentioned the unprecedented prominence given in Chapter Two of the White Paper to the idea of arms control and disarmament. That is true. Whether it was right to do so, it seems to me. is a different question. These are matters of foreign policy and not of defence.
There is another respect in which I cannot help being sceptical about the importance given to these questions in the White Paper. I am not a total sceptic about arms control and particularly about confidence-building measures. It would be an excellent idea if the partial test ban treaty could be extended. The non-proliferation treaty is obviously a beneficial contract. The hot line between Moscow and Washington must be an improvement on what was there before, which was nothing. Nevertheless, we are sometimes in the habit of underestimating the colossal novelty of the idea that it is conceivable that the two great powers will, one day, sit down surrounded by

307
ourselves, the Chinese, the French and other difficult countries, and reach a permanent agreement that will, first, sensibly reduce the risk of nuclear war; that, secondly, will affect the consequences of nuclear war should it happen to occur; and that, thirdly, will seriously reduce the impact of arms spending on budgets as a whole. It is particularly difficult to imagine this as something that is likely to happen in the foreseeable future if the Soviet Union is the nation that it is represented as being in Chapter One.
There is an additional paradox which would apply whether the Soviet Union were a normal country or not. I think most of us appreciate that in order to achieve effective disarmament there must be some kind of trust between nations. Indeed, one cannot help supposing that if there were enough trust between nations to achieve disarmament they would disarm without having to have a treaty to oblige them to do so.
One day no doubt the problems which are pointed to in Chapter Two relating to nuclear weapons will be dealt with if the earth is to survive. But I think that it is much more likely that an approach based on a revival of the idea of the international ownership of nuclear material and its production is one which will be more profitable and helpful than the suggestion that we can reach lasting deals between sovereign states.
For those reasons I am much less inclined to be disturbed than the noble Lord, Lord Boston of Faversham, was about the apparent demise of SALT II, which seems to me to have been far from a perfect treaty, dealing as it did with launchers rather than warheads, as my noble friend Lord Chalfont pointed out in a recent letter to The Times. I think that it is worth while recalling, too, that the reason SALT II was not ratified by the United States legislature was that the Soviet Union embarked upon a massive use of conventional weapons in Afghanistan just before the United States legislature was going to act upon it.
I want to devote one sentence to the question of chemical weapons, to which the noble Lord, Lord Boston of Faversham, devoted some minutes of his speech. He pointed out quite fairly that the United States has not produced any chemical weapons capacity since 1969, and then talked about the Soviet capacity for chemical weapons. But surely the way that he put it was a distortion of the balance between West and East on this issue, since the Soviet Union has invested very substantially, as it would seem on his own reckoning, in this particularly vile method of warfare at a time when the West has done nothing.
Perhaps I may devote a word to two to Chapter Three. I think that this is an innovation, at least in the way that it is put. I perhaps detect the role here of the former Secretary of State, Mr. Michael Heseltine, who we know was much interested in building up the European pillar and collaboration in the European arms market. I must give that chapter a guarded welcome. It would be churlish not to do so since I previously supported in this House the idea of a European defence dimension, even if we have to recognise that this will occur outside the framework of the European Community and although it will involve a great deal of careful diplomacy with France.
However, the reason I want to make it a guarded welcome is that it must be recognised that the concept
308
of a European pillar can create troubles and misunderstandings with the United States. We have the evident desire of the Soviet Union to puts itself forward as European and as a European power. We have the evident new interest of the United States in the Pacific. After all, its trade with Pacific countries was higher in 1984 for the first time than its trade with Atlantic littoral countries. Then there is the fact that for the first time ever the United States has perceived a sense of threat on its south-western borders, a threat which, to put it mildly, European public opinion has not taken very seriously. Diplomacy is extremely important here, given the state of British as well as European public opinion about the presidency of President Reagan. It is not necessarily a very difficult act of diplomacy but it could go wrong.
I think that all Europeans must remember that although George Washington's farewell address advising his countrymen to avoid always entangling alliances with Europeans is on a very remote and dusty shelf in most American libraries, it is on that shelf, and it could—if taken down at an awkward moment— make for all of us, very awkwardly, eloquent reading.
4.35 p.m.
Lord Hatch of Lusby: My Lords, I am very tempted to take up the noble Lord, Lord Thomas of Swynnerton, on his political interpretation of the development of the Soviet ideology and our relations with it, but that must wait for a foreign affairs debate. On the other hand, I would differ from him specifically where he separates, very sharply apparently, our consideration of defence from that of foreign policy. I would suggest, and I believe that this would be accepted by the noble Lords speaking for the Government, that defence and foreign policy are two arms of the same policy, and that it is essential that they should be inextricably linked together to achieve the same purpose, which is that of establishing peace and a sense of security among the people of this country.
I am glad to see that the Government have now publicly agreed that sovereign states have the right to determine their own defence policies within NATO. What we are therefore discussing is the contribution of Britain and British defence policy to NATO. But we are discussing the specific policy which our Government are contributing.
I should like to thank the noble Lord, Lord Trefgarne, who opened the debate, not only for his exposition but also for sending me the public information booklet along with the White Paper explaining the whole background of government policy. I do not think that it would be unfair to say that the government defence policy is essentially based upon the concept of nuclear deterrence to guarantee peace. I would make an appeal to the Government that there should be a serious public debate on this thesis which the Government put forward with, so far, very little supporting evidence. There should be a public debate because I am sure that noble Lords throughout the House would agree that we have here an issue of the utmost significance for the survival of the whole human race.
In this debate we have already seen that many prominent military strategists and former leaders of the military forces take different sides within the

309
debate. I have previously described the Government's thesis that nuclear deterrence inevitably guarantees peace as an argument that can be described as post hoc, propter hoc. It has a kamikaze mentality that, "I will commit suicide if in so doing I can damage you."
When the Government claim that for the past 40 years peace has been maintained through nuclear deterrence, I would point out to the Government that since 1945 it is estimated that there have been 140 armed conflicts in other continents of the world outside Europe. That deterrence did not prevent the war in Vietnam; nor the invasion of Afghanistan; nor the invasion by the Argentinians of the Falklands. Even in Europe it did not prevent the invasion of Hungary, the invasion of Czechoslovakia; and it did not prevent the invasion of Suez by the British, French and Israelis.
The logic of that argument is that if we are to prevent these numerous conflicts which have taken place in different parts of the world, then each of the combatants should be supplied with nuclear weapons. Are we going to supply Iraq and Iran with nuclear weapons? Would that prevent war there? What about Israel and the Arab States? This is surely reductio ad absurdum. In the meantime, one of the most tragic victims of the process has been the United Nations, our contribution to the United Nations, and the strengthening of the United Nations as a means of settling international differences and preventing conflict. That has been surrendered to the concept of the super power competition.
When we talk about the conflicts that have sundered the peace of the world, many of them in third world countries, let me remind your Lordships that the Second World War was not started in Europe; it was started in Asia. It was started with the Japanese invasion of Manchuria in 1932. It was continued with the Italian—Mussolini—invasion of Abyssinia in 1935. Wars can start, and frequently start, in other parts of the world and then spread to Europe.
If ever the concept of nuclear deterrence was valid—if it ever was—then surely it is clear that it is no longer valid. Surely it is clear that the super nuclear powers are today discussing the possibilities of winning a nuclear war. The question of first strike has become one of immediate military and political consideration. And yet this is taking place at a time when, between them, the United States and the USSR have 20,000 strategic nuclear warheads; and if one takes into consideration the intermediate and tactical weapons, they have over 50,000 nuclear warheads—more than 1½ million times the power of a Hiroshima-size atom bomb.
My submission is that the continued possession of nuclear weapons has fuelled the arms race. I wonder whether noble Lords have read the submission to Congress of Richard de Lauer, the Pentagon's chief of engineering, when he was recommending the Trident D.5 missile. On what grounds did he recommend it? He recommended it as a counter-force weapon; as a weapon which will give the United States a pre-emptive capability. We have moved on from the concept of nuclear defence and have now entered a
310
world of nuclear, or potential nuclear, victory. It is this weapon, the Trident D.5, that the British Government are planning to buy at an enormous cost.
If I may substantiate still further my fears that this is a new form of nuclear age with a new dimension, one has only to look at what the United States is doing in the nuclear field: new nuclear intercontinental ballistic missiles; new strategic nuclear bombers; new air-launched cruise missiles; new missile-carrying submarines; and the project to replace the obsolete nuclear weapons in Europe. And no doubt the Soviet Union is doing precisely the same.
The people of this country have become increasingly alarmed over the last few weeks since the accident at Chernobyl, and since the use of the F-111s to bomb Libya. They have become anxious because they have seen the effects of a nuclear explosion, though on a much smaller scale—and they realise on a much smaller scale—than those of the nuclear weapons I have mentioned. But they have also seen that nuclear weapons held in this country are not necessarily under the control of the British Government.
I would remind noble Lords that constitutionally the President of the United States is commander-in-chief, and constitutionally he cannot be inhibited from any action in ordering United States military forces on any occasion if he considers it is in the interests of the United States so to do. Whatever the agreements, the understandings, that we have talked about so much at Question Time in this House, that is the constitutional fact. He is commander-in-chief, and he has absolute power over United States military forces.
My submission is that the possession of our own nuclear weapons, and of foreign nuclear bases in this country, spotlight Britain as an inviting target for nuclear attack. I would ask the Government: do they really believe that the people of Norway and Holland, of Spain and Greece, of Italy and Yugoslavia, of Austria and Finland, feel any less secure than do the people of this country because they do not possess nuclear weapons?
I suggest that nuclear weapons seriously threaten the security of the British people; that they are an obstacle to British influence in disarmament negotiations; that the projected purchase of Trident in a defence budget that is to be static, or is to fall, over the next three years is bound to damage the procurement and the organisation and efficiency of conventional forces. This belief is supported by many military strategists—and I particularly look forward to hearing the speech of the noble and gallant Lord, Lord Carver, this afternoon—and many ex-military leaders of this and other countries who believe that a non-nuclear strategy gives greater security than continuing with nuclear weapons.
Therefore, I would suggest that the security of the British people demands that we dispense with our own nuclear weapons and those on our land; that it is the responsibility of our Government to build a sound, conventional defence, but that that is a defence and not a threat, as nuclear weapons are, to any other country or any other people. But it is the responsibility of the British Government, if they are concerned with the security of the British people now and in the future,

311
greatly to strengthen their contribution to the United Nations as a peace-keeping organisation and as an organisation that is preventing and undermining international conflict.
The British Government should use their political influence inside and outside NATO at all times to promote the cause of genuine global disarmament. This is the defence programme which the Labour Party has agreed on and which has already been put to the electorate in by-elections and which will be put before the electorate at the next election. I hope that the Government will take the very real arguments and combat them rather than simply go on repeating parrot-like, "Nuclear deterrence brings peace".
4.52 p.m.
Lord Gladwyn: My Lords, discussion of defence in this House, to which I agree more time ought to be devoted, often concentrates on details rather than on general principles. So today, while saluting an admirable introductory speech by the noble Lord, Lord Trefgarne, I should like to dwell on one broad factor; namely, something that I consider to be a potential long-term danger to the Alliance inherent in certain transatlantic attitudes.
Unfortunately in recent years there has been an obvious deterioration in what might be called European-American relations. It is nearly 40 years ago now since that rather more confident summer when I was the first negotiator under Mr. Bevin on what turned out to be the North Atlantic Treaty. We have come along way since then. Along with other reasons I think this malaise has been building up since the Republicans took over the presidency and embarked on a rearmament programme which progressively became more extensive. Initially I believe it was welcomed by most European members of the Alliance, who themselves had agreed in 1978, was it not, to achieve a real 3 per cent. increase in their own defence budgets. The Soviet Government had admittedly taken advantage, both politically and by reasons of arms increases, of the rather mild attitude of the Carter Administration, itself no doubt the result of despondency in America following its tragic defeat in Vietnam.
But gradually most Europeans gained the impression that, despite notable Soviet increases, the Americans were, as it were, over-insuring, more particularly in the nuclear sphere. Why? Well, there was the new and gigantic Trident submarine programme, and other matters to which the noble Lord, Lord Hatch, referred. There was also the so-called MX project for a large number of very powerful and originally indestructible, very possibly mobile, strategic weapons; a vast new fleet of bombers armed with the "Stealth" device for avoiding Soviet radar, and the construction of a very large number of advanced cruise missiles for various types of employment; to say nothing of aircraft carriers and ordinary killer submarines and so on. All this seemed rather exaggerated.
So, when the time came for cruise missiles and Pershing IIs to be stationed in Europe to counteract the clear threat posed by the Soviet SS.22s (originally a European suggestion) the Europeans as a whole, as we
312
know, gave their consent only on condition that talks took place with the Russians on arms limitation, thus possibly lessening the chances of a nuclear war which might well be confined to their continent, the two super powers, simply for reasons of self-protection, remaining more or less immune from nuclear attack.
We all know what then happened. The talks, after long delays, eventually took place and were eventually broken off, no doubt owing to faults on both sides. For example, both should have agreed to the formula for the restriction on intermediate weapons worked out in the walk in the woods between Mr. Paul Nitze and his Soviet colleague. Nor should the Russians have used star wars as a reason for leaving. There were faults on both sides for the break-up of the negotiations.
The famous summit, nevertheless, followed at which absolutely nothing was agreed, save that a nuclear war could not be won and must not therefore be fought, and there were arrangements to meet again—both admirable declarations of intent, now seeming to be a little frayed at the edges. Nor did it help when the President, perhaps in a fit of absence of mind, subsequently referred to his Geneva friend and colleague as the equivalent of Colonel Gaddafi.
As for the resumed talks, they are still in the doldrums, while the Americans consider what most people on this side of the Atlantic would regard as reasonable proposals advanced by Mr. Gorbachev for discussion—I repeat, "for discussion"—possibly the result of the rather parlous economic conditions in the Soviet Union following the recent fall in the price of oil.
At this point it might be observed that the notion of exact nuclear parity, or equality, which still seems to be insisted on by both sides is a logical absurdity. What does it matter if the adversary has more nuclear weapons than you do, if you have the assured capacity of inflicting intolerable damage on him as the result of a possible second strike? That is the conception embodied in the doctrine of MAD (mutually assured destruction) which many feel has been chiefly responsible for the preservation of peace in Europe—I repeat to the noble Lord, Lord Hatch, "peace in Europe"—for the last 30 years or so.
An idea, often put forward in America, is that the Russians might theoretically on a first strike, eliminate all or nearly all American strategic land-based nuclear missiles, thus leaving the remaining nuclear missiles in submarines or aircraft with the only option of bombing Soviet towns and the consequent destruction of American cities. But all that is nonsense. What Soviet Government in their senses—after all, they are not mad—would resort to such an act? Even if total nuclear war was avoided—a dangerous assumption—the Soviet Government would inevitably be involved in a continuing and disastrous trade war with the whole Western world, not to mention the Eastern world as well. It is indeed almost impossible to imagine that the Russians would ever behave in such a way, if only because (short, conceivably, of losing out in space, which is a theoretical possibility) it would obviously not be in their interests to do anything of the kind.
Against a rather forbidding background what is now the likelihood of advancing, if not towards detente, for there will probably, as my noble kinsman has inferred,

313
always be tension—that is undoubted—at least towards some kind of understanding with the super power of the East? Surely we must recognise that there are now two broad and conflicting policies battling for mastery in Washington. The first is favoured by many Democrats and some Republicans in Congress; by leading newspapers and columnists; by what used to be called the eastern establishment—that is to say, majority opinion in the East Coast universities— eastern big business; eastern policy-making bodies, with some support all over the country; and probably by a majority of experts in foreign affairs, including those in the State Deparment.
Such people are chiefly appalled by the excessive cost of the Reagan defence estimates, resulting, to the detriment of the American poor and of course world economy generally, in a huge budgetary deficit. But, more especially, they feel that chances are being repeatedly missed of coming to some agreement on arms limitation with the Russians and that a rather obvious, if disguised, desire on the part of some powerful elements to achieve superiority, coupled with the increasing reluctance to grant aid to developing countries and perhaps to come to terms with social reform in Latin America, is carrying a natural reaction to the Carter policy much too far.
The other school of thought is very different. Here it is openly stated that the only way of coping with an irreconcilably hostile government in Moscow is to build up some irresistable force that the Russians cannot match, to avoid, consequently, any agreement on arms limitation if only because such agreement would inevitably be violated by the Soviet Government; to free the United States of any lingering obligation to abide by SALT II; if possible, to reinterpret the terms of the famous anti-ballistic missile treaty of 1972; to resist any attempt to arrive at a freeze on nuclear tests and, still more, on the deployment of nuclear weapons; to build up a sure means of eliminating Soviet satellites in the event of war; and, finally, to renounce the whole conception of MAD in favour of MAS (mutually assured security) by the eventual construction of an anti-ballistic missile screen over the United States, if not over Europe, which of course, if it were ever achieved, would enable the Americans to dominate the "high ground", as it is called, of "space", thus placing the Soviet Union at their mercy.
The chief advocates of this second policy are the Defense Secretary, Caspar Weinberger, with his lieutenant, Richard Perle, supported chiefly by the Pentagon, the arms industries, the Right-wing Republicans in Congress and, in the west, more especially of course in California, to say nothing of widespread popular support in the shape of numerous patriotic groups, "Born-again" and "Fundamentalists" Christians, and denouncers of the "Evil Empire" generally. It is a formidable combination.
Between these two obviously conflicting groups, apparently, sits the President, now favouring, it would seem, the one, now the other, and occasionally both at one and the same time. It appears to depend largely on whoever gains his ear at the critical moment, and more especially on the immediate advantage, from the
314
internal political point of view, in what he detects in any particular proposal. Unhappily, more often than not, he seems, up until now at any rate to come down in favour of the tough policy which I have described.
The President, whatever difficulty he has in answering the questions of intelligent correspondents, is personally immensely popular. His only difficulty lies in getting the money for his projects through Congress. On one thing he has admittedly never wavered—star wars. This he probably genuinely feels is a factor favouring peace in spite of all the arguments that, on the contrary, it is probably highly destabilising, at any rate, in the long run. But if he gets the go-ahead to spend a limited amount on "research" into this project, he will no doubt be happy. Let us hope so.
In the face of this situation what line should we on this side of the Atlantic best adopt? I think that in the NATO council we should be perfectly frank about our support for the first school of thought and about the grave dangers which we see in the second. We got near to doing this at the recent NATO meeting in Halifax when all the non-American members expressed dismay at the proposed intention of the Americans no longer to abide by SALT II. Perhaps the noble Lord who is to reply will tell us whether this, in fact, is still their intention. Naturally, if we could revert to something like our original undertaking to increase our own, preferably non-nuclear, expenditure by a percentage or two, we should have much more influence in pushing our point of view, if not in the White House at any rate on Capitol Hill.
The main question that I should like to put to the Government this evening is, therefore, this. Do they agree that there is a fundamental and dangerous difference of opinion among policy-formers in Washington on defence generally; and are they prepared—and I put this to the noble Lord who is going to reply—to exercise such influence as they have in order to resist the Right-wing tendencies that I have outlined and to urge that, on the contrary, sympathetic consideration should now be given by the American Administration to the latest proposals of Mr. Gorbachev in spite of the vigorous opposition that the Right wing will no doubt put up when it comes to actual negotiation on these proposals of Mr. Gorbachev in Geneva?
My second question—of which I have given the noble Lord advance notice—is this. Has he seen the reasons advanced by Mr. Leggett of the Verification Technology Centre for thinking that American denunciations of Soviet violations of various treaty obligations are to a considerable extent invalid; and do they regard the arguments of Mr. Leggett as at all convincing? If they are, a great deal of American objections to concluding any sort of deal with the Russians on arms limitation clearly falls to the ground and my question would thus seem to have considerable pertinence at the present time.
I realise, of course, that since, for the reasons which I have explained to the noble Lord, I cannot, most unfortunately, stay until the end of the debate, this may make it difficult for the noble Lord in my absence to be able to reply in his speech to my questions. If so, I shall await a written reply to them eventually with the greatest of interest.
5.8 p.m.
Viscount Trenchard: I certainly support the excellent White Paper which is well written and well presented. I regret, as the noble and gallant Lord, Lord Hill-Norton, has said, that we have not kept to the two-days debate system. Last year I chose the "nuts and bolts" day. This year, as there is only one, I shall speak mainly on general policy. But, my Lords, allow me one comment on nuts and bolts in relation to the points which the noble and gallant Lord, Lord Hill-Norton, made, in relation to the Nimrod situation. All that I want to say is not that he was wrong 10 years ago but that the situation before the Government today is, whether, having spent a very large amount of money on a very large amount of high technology, we should not complete the job.
It is wrong to disparage the benefits to industry as a reason for going British, sometimes at a premium. If we do not have a big GNP based on a high-tech lead, then 5½ per cent. of that GNP is not going to pay for the defence that we have today.
Mainly today I want to talk about the need for our legitimate dialogue in a free democracy on these important questions to be conducted on the basis of the facts of the defence situation in relation to this country and to other countries. If I have time at the end, I want, again impertinently, to offer the odd opinion on the vital question of maintaining the credibility of deterrence in order to make sure that there shall be no war.
I congratulate the Government on the presentation in the White Paper and in particular at page 60 of Annex A the table showing the massive superiority of Russian conventional forces. I would quote first the tank figures which are, for NATO, 7,800 and, for the Warsaw Pact, 16,600. The artillery figures are even more dramatic, as are the tactical aircraft figures. To see those comparisons is to bring one down to earth in this discussion and also in the discussion of disarmament measures.
It is sometimes said that NATO, the International Institute for Strategic Studies, and even the MoD, present the facts in a particular way and that, looked at from the Russian point of view, they could be put in another way, particularly as they do not take in the global strength of the two super powers. Perhaps I may remind your Lordships of the facts, before discussing the need for a dialogue on the basis of facts, and use the latest publication of, I think, the universally respected International Institute of Strategic Studies. They give their figures for the military balance for 1985–86. If I may first take the figure for the United States total armed forces in terms of people, it stands at approximately 2,151,000, with reserves of all kinds amounting to about the same figure. Those figures can be compared with the Soviet regular forces figure of 5,300,000 and reserves with service within the past five years of 5,400,000.
May I also compare, just as one example—but it is good reading for those who want to start thinking about ways forward in disarmament—the tank numbers of the United States, whose reinforcement to Europe would have to come across the Atlantic, as opposed to the Russian reinforcements on internal communication lines. The global total for tanks possessed by the United States is given as 13,423, and
316
in the case of the Soviet Union the figure is given as 52,600: that is four times the quantity of the United States. So I suggest that the many comparisons which are done of the balance in Europe do not warp the position from the point of view of the West.
All those who understandably crave for nuclear disarmament, including those who press for either slow or fast multilateral nuclear disarmament, must face up to the massive Soviet conventional superiority. So, I suggest, must those who advocate "no first use" declarations, even in defence, of nuclear weapons. So, too, must those who advocate that we should greatly increase the effective firepower of our conventional defence by the use of emergent technologies (notably the distinguished ESECS group) face up to the quantity superiority of the Soviets to which I have drawn your Lordships' attention and, additionally, to the fact that the technological gap—that is, the United States and the West's technology lead—has been closing up and continues to be closing up rather than being widened. Indeed, in many areas the Soviets are now ahead.
One has to say that at present the ESECS recommendations remain highly intelligent and highly desirable, but they are as yet wishful thoughts. They remain so because no way has yet been found, despite the words of my noble friend Lord Trefgarne, for getting a really united, single-minded NATO approach to particular selected roads. If the working members of the ESECS groups were appointed managing directors of NATO defence and were allowed to select from the countless technological possibilities before us today the routes which we should follow, then I would agree that we could effectively increase the awesome firepower of conventional defence by a major degree. However, I believe that even if this happy state of affairs could be brought about, the group under-estimate the Soviet's ability to counter what is done—made slightly more easy if they have to counter one approach.
In the world in which we actually live, in our free societies in the West, with the countless opinions as to which way to go in these complex questions, it will in my view be time enough to consider changes in the current deterrence policy, importantly including its nuclear element, when and only when we have actually raised the nuclear threshold from days, even to weeks or months, let alone to effective parity of force.
The prospect of a modern conventional war lasting months and reaching the same agonising choice of whether or not to invoke nuclear defence does not fill me with unqualified enthusiasm. That is why I believe that the policy crux today is not war fighting and the elements of war fighting, as it has been in the past and as CND continually claim it to be likely to be in the future. It is about maintaining, with these awesome weapons, a credible deterrent.
If I have time, I will go into particular views on that subject later, but may I return to the paramount need, in this country and in NATO, today to have the dialogue on these vital questions on the basis of the facts? The public either do not know or are more confused than ever about the facts. This is not just because the Russians are using our free society with great skill to disseminate propaganda and confusion; it is also, regrettably, because over recent years the last

317
vestiges of bi-partisan defence policies seem to have disappeared. In this context, I was delighted with a large part of the speech today made by the noble Lord, Lord Boston of Faversham, and with his unequivocal support for NATO—including, I presume, most of its policies.
However, in recent years as parties have contradicted one another with, to put it at its kindest, the selective use of facts, so an ever growing percentage of the public has moved not just into the "don't know" category but into the "don't know what to believe" category. Let me substantiate what I am saying. In December last year I was asked by the Foundation for Defence Studies and the European Institute for Strategic Studies to chair a conference at King's College, which was based on a full Gallup sample opinion poll. The poll set out to discover whether the public had a good awareness of the facts of the East-West balance and the facts of the cost of defence. To the question:
"Which military alliance, NATO or the Warsaw Pact, has more conventional forces—tanks, aircraft, artillery and infantry— deployed in Europe?'"
a startling "don't know", which professionals tell me includes "don't know what to believe", was 43 per cent., while 23 per cent. thought NATO was superior and 30 per cent. thought the Warsaw Pact was. When we came to the ladies and the young, the percentages were more alarming still and very nearly level in terms of who had the most conventional forces.
I ask your Lordships to take that against the figures which I have quoted and which are shown in Annex A, page 60, of the Defence Estimates. Only 30 per cent. of a full Gallup sample knew that the Warsaw Pact had more conventional forces than NATO. I shall not weary your Lordships with the figures on the much publicised medium-range nuclear missiles—the SS.20s and all that—which are much the same. Only 29 per cent. knew that the Warsaw Pact had more than NATO.
When we come to the costs of nuclear defence, alarmingly of the 16 to 24 age group 42 per cent. thought that our nuclear costs were over 25 per cent. of our defence budget. The figures for the total poll were 28 per cent.—huge exaggerations of cost brought about, in my opinion, partly by the regrettable degree to which we have moved into political argument on defence and, at its best, the selection of facts to suit our argument.
In a democracy, we all believe that we should be free to form our own views and to express them through the democratic process. But we should also consider whether there is some residual strength in this area in Lord Melbourne's old dictum, when opposing universal suffrage, that he did not believe in mass wisdom based on individual ignorance. The strength of the bipartisan policies of the past was that, in an area where the public cannot know of their own observation what a potential enemy possesses in the line of weaponry and in offensive power, they were fed largely common information. It is vital that all responsible people in the land should reach broad agreement on what the facts are.
We not only need agreement on the facts, but we need to share such things as a reasonable estimate—in
318
spite of non-proliferation treaties—of which, and how many, countries will have nuclear weapons by the end of the century, before we ask the public to express their views on questions like our independent deterrent. Of course, there is always argument on the facts and that is why I quoted from the international institute on the two so-called super-powers in this respect.
But there is a further reason why people tend to question the facts which all these responsible bodies produce, and it is that at the official rate of exchange the East and the West appear to spend the same amount of money on defence. How then can it be that the fire-power is more than two-to-one in favour of the East in conventional forces and in part of the nuclear area? The first main reason is that the cost of Russian people in the forces and in the munition factories is certainly a half, and perhaps averages a third—in some cases, it is less—of what it is in the West. Since half a defence budget is made up of people in the forces, and since of the other equipment half is made up of the people who produce the weapons, that is the overriding reason.
The second reason is that the Russians have many fewer people behind the front line to maintain each man in it. The Americans require more cooks and Coke. The final and major reason is that they have the advantage of dictatorship, and thus of standardisation of equipment, and they have huge arms sales of their standard equipment, so they get over double the firepower. I ask all your Lordships to play a part in returning to a common agreement on the facts of the situation and in a disparagement of wishful thinking.
I had intended to give the noble and gallant Lord, Lord Carver, the opportunity of speaking after me for once on the credibility of deterrence as it, in my view, remains intact. That would take up too much of your Lordships' time on this occasion, and I shall store it for another time. But let me as a matter of opinion merely say that the more I dwell on this subject, the more I believe that when both sides have nuclear weapons—and, as the noble Lord, Lord Gladwyn, said regardless of how many of them they have—I think as follows, their value to a potential aggressor and a potential defender, in the threat of their use, is very great in both cases; their value in actually being used, should an aggressor miscalculate the will of a defender, is, in my view, in cool logic not great.
Whichever side one conceives might be wishing to push the Iron Curtain in one direction or another—and, to me, it is inconceivable that the West would want to push the Iron Curtain eastwards, nor could it conceivably do so against the figures that I have given both for Europe and for the two super-powers—nevertheless, an aggressor, whatever pretext he uses, has decided that by armed intervention he can dominate an extra part of the world and that is his prize. He will only have a go to get it if he believes he can get away with it.
If he were, regrettably and quite unnecessarily, to believe that he could get away with it and attacked, and found that he had miscalculated, the cool inescapable logic is not to retaliate and cause Armageddon, but to say "My God, we are not getting away with this. We must get back to the status quo." I am not pretending that there are not appalling questions of decision, should this state of affairs ever

319
arise. But what I am suggesting is that it is quite theoretically conceivable that a defender, if an aggressor miscalculated, could in some circumstances use nuclear weapons and force the aggressor to cease his aggression. I believe that is the logic of the situation, if one is not too frightened to look at it and think it through.
5.29 p.m.
Lord Brockway: My Lords, I hope the noble Viscount will excuse me if I do not follow his speech in argument. I intend to take a broad view, but during the course of what I say the depth with which I differ from him will become clear.
If a disease were found which threatened the whole life of mankind, every government would seek to end it. I once wrote a very bad novel on this theme, with the Soviet Union and the United States of America co-operating and Great Britain praised for having eradicated it. I want to submit that the nuclear weapon is a disease threatening the life of mankind; that is so, just as much as any illness which occurs from infection, from a germ. There are now enough nuclear weapons in the world to destroy all life many times over; but instead of governments uniting to end them, there is the confrontation between West and East to expand them. Those of us in this country who wish to end nuclear weapons here are regarded as traitors to the cause of freedom.
The distortion of the mind of governments has gone so far that they even regard the nuclear weapon as an instrument of peace. They have developed the nuclear deterrent theory, arguing that the fear of nuclear weapons brings about peace. My Lords, fear can never guarantee peace. Apart from other factors, if one side fears that the other side is becoming superior in arms, it will be tempted to begin that war. The nuclear deterrent is peace by terror.
What has happened as a result of the nuclear weapons deterrent? First, nuclear weapons have become far more deadly. Five years ago the General Council of the United Nations asked the Secretary-General to appoint a committee of scientists to examine the question of nuclear weapons; 12 of the most important scientists in the world. They reported that a nuclear weapon had now been made 4,000 times as deadly as that which fell on Hiroshima. At Hiroshima 200,000 died. That weapon could kill 9 million people, the whole population of Greater London.
Secondly, technically, war with nuclear weapons has become much more likely because of the accuracy of aim. The nuclear weapon can be targeted at military and political objectives within a few hundred yards. Anyone who believes that a war which began with those limited objectives could continue in that way is ignoring the lessons of both the First World War and the Second World War. In the First World War no chemicals were to be used. Hundreds of thousands died from gas. In the Second World War only military objectives were to be the target. The civilian populations of London, Plymouth, Coventry, Hamburg and Dresden were deliberately made a target in that war. A nuclear war which began with military objectives inevitably under the tensions of war would become one against civilian populations as well.
320
Terrible crimes have been committed in the interests of the development of nuclear weapons. There is the criminal policy of British governments in Diego Garcia in the Indian Ocean, exiling the whole population, leaving them at first in such dire poverty in Mauritius that the women had to become prostitutes to keep the family alive—doing that in order that the island might become an American nuclear base. There is the American parallel to that. A large island was made an experimental area for testing the accuracy of missiles from California, 4,000 miles away from that island. The whole population was evicted, crowded in a small island slum. Those are crimes for which the British and American Governments are responsible.
Nuclear weapons are spreading. In this country there is not only Polaris but also the plans for Trident, and staggered about the country are American bases with their nuclear weapons. We are in danger of becoming an American military colony. Not merely America and the Soviet Union but France and China have their nuclear weapons and secretly other governments probably also have them. Twenty are now in a position to have military nuclear weapons.
The Government argue that the nuclear weapons in American bases in this country are under dual control. But does anyone doubt that in a war situation the United States would use those weapons, whatever might be the view of the British Government? We are in the front line, and the use of those weapons would inevitably lead to the destruction of our population by the retort which would come from the Soviet Union. Thank heaven that the Labour Party is now committed to ending nuclear weapons in this country—Polaris, Trident and the nuclear weapons in American bases. The Soviet Union has responded to this by saying that it would dismantle all nuclear weapons aimed at this country. Labour's policy, and Labour's policy alone, would save the destruction of millions of people in this country.
The noble Lord mentioned that there is a non-proliferation treaty aimed at ending the spread of nuclear weapons. In that treaty the Western powers promised to reduce nuclear weapons to the point of zero. We have completely failed to carry out that policy and as a result the third world, where nuclear weapons were to be prohibited, is disillusioned and likely to ignore it.
We must insist on more than ending nuclear weapons in this country. It is difficult to believe that only eight years ago, at the first United Nations special session on disarmament, recommendations were made by all the governments of the world. The United States of America, the Soviet Union, Great Britain, West Germany, China, and the non-aligned governments all made these four recommendations.
The first was the abolition of nuclear weapons and all weapons of mass destruction, including chemical weapons. The second was the phased abolition of conventional weapons in a planned way over the years. Thirdly, it was recommended that this should lead to general and complete disarmament except for weapons necessary for national security or as contributions to a United Nations peace-keeping force. The fourth recommendation, which I particu-

321
larly welcomed, was the transference of military expenditure to development in the world and to ending poverty in the third world.
Only eight years ago that was the climate in the world. We must recreate it. A beginning will be made if world pressure brings about the summit meeting between the United States and the Soviet Union, with the expansive proposals which the Soviet Union has made and the proposals which are coming from America. That may be the beginning of a new climate in the world.
I believe that the peace movement in the world, growing stronger every year, is now so powerful that within a few years it may be able to influence decisively the policy of governments, and even change their nature. Those of us who sincerely desire peace in the world must dedicate ourselves to the achievement of that purpose.
5.46 p.m.
Viscount Hanworth: My Lords, I am sure that a debate on defence would not be very useful if everyone simply put forward their party's line. I do not propose to do so. My remarks are my own thinking, but with very few exceptions are not far out of line with the recently published Alliance report.
1 suggest that the first factor to take into account is the vast superiority of the Russians in conventional weapons, both on land and under the water. That point was very well put earlier in the debate. No acceptable expenditure by the NATO powers can hope to match that superiority, even in the future. In those circumstances we cannot hope to hold a Russian invasion of Europe for more than 10 to 14 days unless we deploy nuclear weapons. It must follow that if we really believe in a deterrence philosophy and a credible NATO defence, we must accept a possible first use of nuclear battlefield weapons, however much we may dislike the idea.
But on deterrent grounds this does not lessen the importance of improving NATO's conventional capability as a progressive way to decrease the likelihood of Russia attacking us; and hence the possibility of our being forced to use nuclear weapons in defence. There are very many difficult scenarios of bluff, counter-bluff, and the limited use of nuclear weapons—including tactical, medium and long-range—but I do not think any of them affect what I propose to say today.
In passing, I have some sympathy with the CND, but only if its members really have decided that a Russian-dominated Europe and Britain would be better than the possibility of a deterrence failing and resulting in nuclear war. I wonder how many of them think that equation through.
Before dealing with our own nuclear deterrent, chemical warfare must be mentioned. Because of experience of the 1914–18 war attitudes are still highly emotional. But if—I repeat, if—we are only considering the modern nerve gases and mustard gases, we must bear in mind that nerve gas either kills outright or else the victim recovers completely. Mustard gas only slows down well-protected troops,
322
although I agree that its effects on unprotected civilians caught up in the war zone would be very nasty indeed.
Having said that, we should support the 1925 ban on chemical and bacteriological warfare. But let us be realistic. What were we doing on a Scottish island with anthrax experiments? Your Lordships may say that these experiments were solely to find out how to protect against an attack by the enemy, but personally I doubt it. In extremis, if it had been really effective, Churchill would have authorised its use against the Germans.
It follows again that NATO must provide and stock chemical weapons as a deterrent against the Russians' own very large chemical capability and, if need be. we must store them here.
Turning to our long-range nuclear deterrent, I am sure that it would be unfair to the Americans to leave it entirely to them to come to the aid of the European countries and risk retaliation on their home cities. It must be that we and France as existing nuclear powers, have an obligation to the rest of Europe to maintain a deterrent into the near future at any rate.
There are two other reasons why I believe our own nuclear capability is necessary, and neither of them seems to receive much publicity. The first is that having decided, rightly in my view, to accept cruise missiles, Britain has become a prime target for the enemy to try to neutralise them. It has been argued that we are already an important target as the base for American supply and build-up in Europe; but the stationing of cruise missiles has increased our importance as a first strike target. An effective Polaris, or better still a Trident submarine capability, offsets this hazard.
Secondly—and Opposition Peers please take note—more and more potentially irresponsible small nations have obtained, and will obtain, nuclear capability. I hesitate to think about a situation where we in Britain without nuclear defence could be held to ransom by a nuclear bomb in its most basic form planted or threatened against London. We might also need to help people to whom we have commitments overseas; for example, members of the Commonwealth. Just imagine what might have been the situation if Amin of Uganda had had the atom bomb.
That having been said, a decision as to what we do must surely be based partially on cost, but into the equation comes the length of time that the nuclear deterrent is required—unfortunately, I think that this is as far as we can foresee at present—and how far the relatively cheap cruise missiles and the nuclear bombs carried by aircraft are sufficient. In essence, the more effective the nuclear deterrent, the better, and submarines are still the most invulnerable option. But we have to weigh the cost against perhaps increasing our conventional forces, and they, as I have said, should decrease the likelihood of nuclear war.
I am afraid that emotional attitudes and the party politics which tend to follow these attitudes may prevent a logical decision. I submit that these attitudes are to a great extent subconsciously conditioned by our innate dislike of the ridiculous amount of money being spent, together with the possibility of a doomsday outcome.

323
We cannot at this moment decide whether to spend more on Trident or whether we need a long-term nuclear deterrent—and at great cost—by refurbishing Polaris. Yet once again it seems that our democracy may waste time, effort and money in trying to alter an existing programme. The classic example of this was, of course, the steel industry, with all the unfortunate results.
I cannot avoid a mention of SDI—star wars. Opinions differ, but one thing is quite certain: if implemented, it will lead to a new dimension in defence expenditure. Almost as certain is that it cannot hope to interdict or destroy more than a proportion of ballistic missiles. Since Europe is vulnerable to intermediate range weapons, it would be of much smaller benefit to us. My own view is that it would destabilise the present situation and lead to more and more nuclear missiles, not fewer, as some enthusiasts imagine.
Finally, it must be a matter of opinion as to how best to steer a course in the future and negotiate meaning-fully with the Russians. I cannot think why we should be unwilling for our nuclear deterrent to be taken into account in negotiations with Russia—our weapons are targeted against them. It need not follow that with an overall nuclear reduction agreement we have to reduce our capability, nor that of France. It would make sense if Europe was more self-sufficient, without having to rely on the Americans and their continental missiles.
I ask myself whether Mr. Reagan's very tough negotiating stand and determination to increase American strength is right. The answer, I think, is both yes and no. I am afraid that in this very imperfect world nations put self-interest first, as unfortunately happens in the Common Market. Russia probably does this more than most.
What does not follow is that the only way of dealing with Russia is by superior force, which is likely to be unattainable. A strong bargaining position is vital, but my feeling is that a more flexible and accommodating policy should be adopted and that some risks are justified in reaching settlements. By all logical reasoning the present situation of nuclear overkill representing a potential doomsday for most of the world is just plain mad, and the Russians know this too.
5.57 p.m.
Lord Carver: My Lords, I congratulate the Government on having produced an even larger and glossier defence White Paper than ever before, to compensate I suppose for the inevitable decline in our defence capability which will result from the most important statement in it. That is tucked away in one paragraph of chapter 5, paragraph 503:
"Although the budget for 1986–87 and the two subsequent years, as published in the recent Public Expenditure White Paper, is planned to rise in cash terms, its value in real terms will decrease by about 6% over the three-year period. At the same time, expenditure on the Falklands will continue to fall significantly. We are currently engaged in the annual re-costing of the defence programme to provide an up-to-date framework for Ministerial decisions on expenditure commitment. We shall need to balance the preservation of our present front line numbers against the requirement to invest in expensive new equipment to strengthen further the fighting power of our armed forces in the 1990s and beyond. Some difficult decisions will have to be taken but there will be no need for any change in our main defence posture."
324
The situation that confronts the Government, having made those decisions, and that will confront their successor, whoever that may be, is aggravated by their stubborn refusal to deviate from their belief in the need for an independent British strategic strike force, an expensive luxury that merely adds to the superfluity of nuclear weapons and their delivery systems, and is irrelevant to the real needs of NATO which is our first line of defence.
For several years now there has been near unanimity among those qualified to judge these matters that NATO's primary need is not to increase its arsenal of nuclear weapons, but to improve its conventional capability. The noble Viscount, Lord Trenchard, referred to the Anglo-American-German European security study in which I took part some years ago, and rather gave the impression that its recommendations were imprecise and unrealistic. They were very precise, so much so that we set up a working party a year after publication to re-examine the recommendations and to re-cost them. The cost that would have fallen on the United Kingdom as our share of implementing those recommendations would have been about 3 per cent. of the defence budget in real terms—that is, the amount that the Government say they will spend on Trident. So they were not unrealistic.
There is no doubt that the first priority for us, both for its own sake and to persuade the Americans themselves to continue to make an adequate contribution, is to improve the capability of our contribution to NATO of conventional forces both maritime and land/air. But the decision not only to cease increasing our defence budget by 3 per cent. per annum in real terms but actually, as the White Paper itself admits, to reduce it in real terms by an average of 2 per cent. per annum, and within that to devote 3 per cent. of the total and 6 per cent. of the equipment budget to Trident, inevitably seriously handicaps attempts to improve our conventional capability. Indeed, it prejudices the maintenance of our current capability.
Some difficult decisions will indeed have to be made. Just "engaging in the annual re-costing of the defence programme to provide an up-to-date framework for ministerial decisions on expenditure commitments" will not produce the right answers. It will produce only the mixture as before, with cuts in those areas and projects where they can be made with the least penalty, financial and traditional. A much more drastic, searching and objective review will be needed. The very difficult decisions that are required cannot any longer be evaded, as the Defence Secretary's predecessor had hoped, by a combination of gimmicks—described in Chapter 5 of the paper as "The Efficiency Programme"—and postponement of major decisions.
The paper states that:
"there will be no need for any change in our main defence posture".
If that statement means rejection of the suggestion that is frequently made that we have to make a choice between a maritime and a continental contribution to NATO, I agree with it. The idea, favoured by the navalist school, that we should either reduce our Continental commitment or make service in it

325
unaccompanied, is as foolish and impractical as the suggestion made by some landlubbers that we should abandon our contribution to maritime warfare capability in the eastern Atlantic, the North Sea and the Channel. Our geography forces us to seek a delicate balance between the maritime and Continental commitments, as it has done all through our history.
We need urgently to examine with the most searching analysis what is required in the future in order to provide the most effective military capability in both fields, as well as in the direct defence of the United Kingdom, within the limits of finance and manpower that it is reasonable to expect future governments to provide.
I suggest that something more than an in-house Ministry of Defence study is needed if the right answers are to be found. I believe that a review should be chaired by an independent individual of considerable authority, preferably someone who is not committed already to a particular defence viewpoint. A precedent for that seems to have been set in the work that Professor Caldwell will do that was referred to earlier. It does not matter what that individual's previous background has been, whether scientific, industrial, financial, legal, civil service, or even conceivably political. The one profession from which he should not come, if he is to be seen to be free from prejudice, is the military profession.
In 1958 that wise man, the noble Earl, Lord Stockton—and I am sure we all hope that he will recover soon from his present indisposition—when he was Prime Minister and looking forward to an election in about 1960, being distrustful of committees, which merely represented the established views of the principal departments of state, set up a future policy study group. Its terms of reference were to suggest what the world would be like in 10 years' time and to recommend the policies that Britain should accordingly adopt. The final report was to be made available to whatever administration resulted from the next election. He was not entirely successful in achieving a wholly objective report, as he was forced to accept a steering committee consisting of Permanent Under-Secretaries and the Chiefs of Staff, inserted between himself and the study group. As a result, its conclusions were considerably watered down, but it had an important influence in suggesting radical changes in foreign policy and its defence aspects.
I suggest that the Government should now embark on a similar procedure to produce a defence review that is ready to be served up to whoever wins the next election. Today there are a number of highly qualified academics who specialise in the defence field and who could make a significant contribution to a study of that kind, which would have to ask some very searching questions. Apart from the obvious one of future nuclear weapons policy, I believe that the most difficult question concerns the future of the manned combat aircraft, particularly fixed wing aircraft operating from fixed airfields. Both on the ground and in the air that type of aircraft is becoming increasingly vulnerable to missile attack. In the land/air battle against Soviet forces, the tasks of the manned fixed wing aircraft can probably in future be more effectively and economically performed by missiles or
326
pilotless flying vehicles, whether the task is strike, reconnaissance or air defence.
In contrast to what I believe is a reduced role for such aircraft in land/air warfare, I think that both the long range fixed wing aircraft operating from land bases and the helicopters operating from floating platforms should have a larger part to play in maritime warfare, in co-operation with nuclear powered submarines, than surface craft, which without helicopters will contribute less and less, whether they are short and fat or long and thin. If such a study were to come to the same conclusions, it will be essential that it does not shirk the very awkward question that then arises: whether there will be a real need for an airforce separate from the other two services.
If many of the tasks in land/air warfare are to be taken over by systems which need no air crew, there is no reason why the Army should not man them, as it does now; and if the part played by aircraft in maritime warfare were to increase in proportion to that played by surface craft would it not be sensible for the Navy to man them? The original reasons for setting up an independent airforce as a result of the Smuts report concerned the difficulty of co-ordinating the aircraft production needs of the navy and the army, and the Navy's neglect of the task that it had been given of air defence of the homeland. The first requirement is now covered by the centralised procurement executive of the Ministry of Defence. The second task, in the missile age, could appropriately be allotted to the army, whose anti-aircraft command played such a major part in the Second World War. I do not for one moment suggest that a decision of that nature would not be very difficult to take and even more difficult to implement, but I believe that it has to be faced.
So far as concerns the Army's existing order of battle, I believe that a critical look will have to be taken at the number of regular infantry battalions. With the almost total disappearance of overseas commitments outside Europe, a figure of 56 battalions (of which 31 are stationed in the United Kingdom) is a large number in proportion to units of other arms, bearing in mind that infantry battalions are one of the easiest units to raise from reserves. It is only the potential commitment of worse trouble in Northern Ireland that could justify continuing that number.
From what I have said I am sure that you will agree that there are indeed some very difficult decisions to be taken, and it is very important to the country and to NATO as a whole that the right ones are taken. I urge the Government to consider very carefully how they set about it.
6.9 p.m.
Earl Fortescue: My Lords, this debate will be lengthy and there are many speakers. I shall confine myself to four points only. My first point concerns chemical warfare. I have stressed my concern for the past four years about NATO's virtual absence of such a chemical deterrent against the huge Russian chemical capability and the consequent lowering of the nuclear threshold as a result. Unlike the noble Lord, Lord Boston, I am delighted that this White Paper gives chemical warfare the prominence that it deserves. Since the White Paper was published, I

327
understand that the Americans are a step nearer to renewing and increasing their chemical capability.
I hope that this Government, if asked to do so, will contribute financially and allow such chemicals to be deployed in this country. I see this as a most valuable deterrent and hopefully an action which will bring the Russians to an acceptable agreement, banning the use of chemical weapons altogether and destroying existing stocks. That may be overhopeful.
My second point concerns armoured personnel carriers for the use of infantry in armoured divisions. They are expensive, fairly vulnerable and relatively slow. I understand that a soldier in such a vehicle tends to feel disoriented when he dismounts after travelling in the back, even after a short distance. I would suggest that APCs are partly replaced by helicopters, which, though expensive, are much faster and more flexible. Many fewer would be needed to carry an infantry battalion a given distance in the same time. In a defensive situation I can envisage a considerable advantage in having the infantry element of an armoured brigade well dug in and prepared before the tanks arrive.
I suggest that APCs and helicopters are used in conjunction with one another and that both come under divison or corps command. In that connection I understand that the ratio of helicopters to men is lower in the British Army than in any other large, modern army.
My third point concerns the navy, about which I know very little. I am not entirely happy about the vulnerability of the submarines and their bases in the Clyde estuary. I visited those bases recently and I saw the enormous amount of shipping in the area. I am no sailor, but it struck me that when a submarine is surfacing or about to surface there is a lot of tension among the crew. This country is surrounded by water, and I just wonder why so many of the bases and the submarines have to use the Clyde.
My final point concerns the remuneration of a member of the territorial army when he is unemployed. The TA is now recognised as an efficient force and people give a lot of their time at relatively low cost. However, if a member is unemployed or becomes unemployed he loses much of his DHSS benefits, and nearly one-fifth of the volunteers are at present unemployed. The details of the problem were given in the speech of my noble friend Lord Ridley in the defence debate last year, on 3rd July. They were also given in the debate initiated by the noble Viscount, Lord Thurso, on 5th February this year. Nothing so far has been done to remedy the situation.
Briefly, the Government want to recruit 10,000 more reservists within the next three years to bring the numbers up to 86,000. However, that is more difficult than it sounds as wastage is high, partly because of pay. A total of 34 equivalent training days are normally required each year, and for a standard training month the anomaly is that an employed soldier nets £44.74 from his TA pay each month; an unemployed soldier on supplementary benefit nets £32 a month; and an unemployed soldier on unemployment benefit nets only £ 16.30. That is clearly an inequitable way to treat volunteers. Lifeboatmen and volunteer firemen are not so treated. Any remuneration that they get is not
328
subject to deduction from their supplementary or unemployment benefit. I ask that something is done on that urgently.
6.17 p.m.
Lord Jenkins of Putney: My Lords, I count myself most privileged to be here this afternoon and to be able to listen to so many sincerely-held views on both sides of the House, and in particular to the magnificent speech of my noble friend Lord Brockway and indeed to the hard common sense expressed by the noble and gallant Lord, Lord Carver. I hope that it will not be thought too bizarre if, instead of dreeing some of my weirds, I address myself to the document of which we are taking note.
As the noble and gallant Lord, Lord Carver, said, it is a glossy affair. The contents do not quite come up to the packaging, but that is not an unusual experience. It is certainly a well-produced job. Unhappily, it begins with statements which seem to me to be both unnecessarily aggressive and even possibly questionable. The first thing that it says is that last year the Soviet Union was forced to negotiate because of the strength of NATO. I should have thought that that was a questionable proposition. It seems to me often that it is the Soviet Union which is aching to negotiate and there has been a certain amount of reluctance and equivocation on our side of the fence, and particularly in the United States.
The Statement then proceeds to a summary of Soviet-Western relations, some of which seems to me to be historically inaccurate and intellectually not of the level that we ought to expect of such a document. It talks about the establishment of the Soviet Union in 1917 and the struggle between communism and capitalism in terms which simultaneously imply that the USSR is powerful and aggressive and also incompetent and weak. Presumably, on the one hand, the picture of the Soviet Union as a formidable threat must be stated in order to justify the huge arms expenditure of the West; on the other hand, the USSR must be seen as feeble and confused so as to maintain the notion that capitalism is inherently more efficient than communism. In reality, of course, both systems have their successes and their failures. For every Chernobyl there is a Challenger. On both sides, from time to time, man fails under pressure, and that is precisely why, if we do not abandon the atom both as a means of war and a source of energy, it seems likely that we shall make our world uninhabitable—and that before very long.
Nowhere in the introduction is there the slightest recognition that the Soviet Union has been invaded by the British, the French, the Americans and half a dozen other countries, but has never invaded us; and that it might convincingly argue that it has much more reason to fear the West than we have to fear it. The Warsaw treaty was formed to counter the threat that the Russians perceived in the earlier formation of NATO, and not the other way round. But the whole drive of the document is predicated on the proposition, which is never argued, that we have to arm ourselves to the teeth against a power which will overwhelm us if we do not.
It is true that the Soviet Union sees the West in similar terms, I suggest with perhaps even greater

329
justification. It is true, as the Statement says, that some communists have believed that the two systems cannot co-exist. But that belief is also held in the West. Indeed, the violence of American anti-communism over the years, the determination to preserve profit-seeking as a way of life throughout the American continent, the eager adoption of the role of world policeman, the rejection of the United Nations now that it is no longer dominated by the Americans and their client-states, are all seen by the Soviet Union as confirmation of the view that it is not so much that communism cannot live with capitalism but that the Americans under President Reagan do not believe in co-existence and are implacably determined to destroy a system which they see as a threat to their way of life, equating as they do, the profit system with freedom. The United States believes that there is no freedom without money grubbing: the two things are synonymous. I was going to take a little time and illustrate that point somewhat further, but I shall not trespass on your Lordships' kindness. I am sure that at least some can think of other examples.
The document totally ignores the fact that the West enjoyed a monopoly of nuclear weaponry for years after the war. Nor does it mention that American military expenditure is greater than the total expenditure of the Soviet Union and its allies. This glossy blue sheet is a propagandist brochure—I think that is the right word for it. It does not admit to the reality that great concern is felt by European members of NATO at the militaristic and aggressive verbiage of the American Defense Department. Instead, it pretends that those differences are created by a suddenly acquired skill in the Soviet Union in using the Western media to its advantage. The Soviet Union still has very little idea of how to win friends and influence people in the West. Its propaganda has increased in quantity but it does not employ Western professionals who might teach it to put over what is in fact no mean case in a manner which would be hard to resist if it were delivered in less turgid terms.
Paragraph 111 on page 2 says that the Soviet Union is obsessed with its own security. I believe that to be true, but the same could also be said about the United States. When it comes to fighting wars far away from its own borders, the USA is in a class of its own. Nothing like it has been seen since the collapse of the British Empire and since we stopped meaning it when we sang about our bounds being set wider and wider and God making us mightier yet. The Americans now believe that. That is a dangerous stage for any nation to be in at a time of nuclear weaponry. It would be hardly surprising if the Russians failed to perceive much difference between American economic imperialism, which finds it necessary to send gunboats into the Black Sea and to surround the Soviet Union with nuclear weapons all labelled "Moscow", and earlier forms of empire building.
On page 2 there are a couple of entirely uncharacteristic quotes, both outlined in green boxes. The first is a sensible remark by the Prime Minister; the second, a stupid one by the noble Lord, Lord Carrington. Mrs. Thatcher got it right for once when she told the American Congress that there must never again be a conflict between the Soviet Union and the
330
West. I think that she had forgotten that there never has been a conflict in the sense of open war since we invaded Russia to try to prevent the establishment of socialism after the First World War, but never mind; the Prime Minister meant well, I think.
The quotation by the noble Lord, Lord Carrington, must have been included by the Ministry of Defence to discredit a former Foreign Secretary, because it seems that, incredible though this may seem, in an address to the Royal Institute of International Affairs the noble Lord, Lord Carrington, embarked upon a childish analogy in which the West was a householder and the Soviet Union a burglar who had to be kept at bay by an insurance policy called nuclear weapons. That is surrounded in green and drawn to our attention. It surely cannot be held as typical of the statements we have heard and expect from the noble Lord. I should defend him entirely from any such charge. It is, to say the least, unfortunate that he should be represented in this document as capable of uttering nothing more than "kiddispeak" for readers of the Sun. That is said to justify the existing NATO policies of forward defence and flexible response. The essential lunacy of both propositions is concealed under a barrage of technological talk about force structures and such like, interspersed by a couple of pages which seek to justify British participation in star wars.
The second chapter begins with a section on nuclear arms control, maintaining a position which ensures that there can be no effective control—the insistence that Britain and France are not bound by any US-USSR nuclear agreement. The ritual talks continue while the arms pile up all around. The attempt to blame the Soviet Union for the virtual breakdown of the endeavour to secure a comprehensive test ban is singularly unconvincing. That the side which has stopped testing unilaterally is responsible for its continuation by those who have not stopped is merely assumed to be the case, possibly because no argument could support it. And so we go on.
The sad conclusion must be that the Government are more concerned to justify their own arms expenditure than they are to secure general arms reduction. Under this Government, Britain is making no effective contribution to the search for real peace. If the people of Britain want to escape from preparations for a war that they cannot survive, they will have to turn elsewhere. The Labour Party's non-nuclear defence policy alone offers that alternative. At present, we are still on the road to extinction, and the Government show no intention of doing anything other than forge ahead to the brink of the abyss about which Lord Mountbatten warned us 20 years ago.
6.30 p.m.
Lord Ironside: My Lords, before starting, I declare my interest with a British engineering group supplying equipment and services to the Ministry of Defence. What I say, therefore, will be largely connected with procurement. As my noble friend Lord Trefgarne has said, this now amounts to some 45 per cent. of the £18.4 billion budget. My remarks will be coloured to some extent by my own experiences.
The new customer-contractor relationship that has evolved between the ministry and British industry has been refined to deal with some very complex weapon

331
systems and a new range of services. I do not believe that the relationship has fully developed yet. We see industry now as less of a manufacturer but more of a designer. We also see that defence is less of a designer and more of a user. That is what the British Army equipment exhibition now taking place at Aldershot is all about. Industry is exhibiting its designs of equipment used by the Ministry of Defence to foreign buyers, and export sales are running at over £2 billion.
We are fortunate to have my noble friend Lord Trefgrane as Minister of State for Defence Procurement in this House, with responsibility for getting value for money from a £8 billion-plus equipment budget. This is a problem area for most countries. In one form or another competition policy is being implemented as the best way of getting answers without sacrificing operational commitments. The sourcing of material has become a critical factor and industrial issues as well as operational and financial ones must be properly faced.
It is true to say, I believe, that because procurement has not exactly been a keen or sharp discipline in the past, there is plenty of slack to take up in certain areas for a start. Already, savings have been demonstrated. As the Defence Committee in another place has reported today, we must be careful how we reckon these savings. Savings on the estimated budgetary cost are rather like savings on the recommended retail prices proclaimed in the high street.
They are notional in a buyer's market. So the significant savings achieved on the Tucano trainer, said to be £60 million, may sound amazing, but should perhaps be compared with the going prices for a similar product elsewhere. Are the £100 million savings on Warrior MCV 80 notional as well? It is difficult to make comparisons, as the Defence Committee says in its report. Asked by the Defence Committee what he might expect to save over five years, Mr. Peter Levene, when pressed, said, with a shrug of the shoulders "Around 10 per cent." He is, I think, being realistic, and I support him. By shopping around, he will, I think, get the taxpayer value for money. We shall judge him not so much on buying cheaply, but on how his procurement policy strengthens the hand of British industry.
He has the financial clout of a public sector purchaser to set high standards, to foster excellence and to ensure that an adequate defence industrial base is maintained for times of emergency. We expect him to look at equipment exportability, the ability of a contractor to complete on time and to cost the whole-life costs of equipment and not just the original cost, and the technique of designing products—this is important in Industrial Year—to save on maintenance and spares costs.
There are, of course, many other factors. But if he saves 10 per cent. in five years, he will have saved six months' procurement expenditure on present commitments at today's prices. In industry's eyes he must be seen to be acting equitably and positively. We have seen major procurement action taken in recent months with frigates, with submarines, with AORs, the one-shot replenishment vessel, the "Fort Victoria", where the order has been placed with Harland and Wolff, and now the Challenger tank involving firms in public ownership.
332
Industry does not fear competition, but it must be allowed to compete on equal terms. It must be able to feel that competition is fair if it is to put its heart into competing with firms in the public sector. We have all now seen competition policy at work. It is beginning to bite, but it must be seen to be fair. If competitive bidding is a better test of a contractor's ability to perform at the right price, it is also a test of the customer's ability to pick the winner on time. We have seen delays in recent times on major orders and major procurement, There are, of course, reasons. National issues are at stake. But money put up to bid—in some cases large sums—has to be serviced, and a delayed decision incurs additional cost for the bidder.
First, we have the shadow of the airborne early warning hanging over our heads. The AEW symbol in the White Paper is the Shackleton aircraft and not the Nimrod. I hope that the end of this story will allow Marconi to complete; otherwise AEW excellence will be lost to this country. This point was emphasised by my noble friend Lord Trenchard. Tigerfish has lived a tortuous life since 1974 and I am glad that it has now succeeded in coming through successfully. It is a case, I believe, for saying that we should stick to the programme.
I would call SDI emergent science rather than emergent technology. It goes without saying that United Kingdom participation in the SDI is a subject for this debate. I should like to congratulate my noble friend's right honourable friend the Secretary of State for Defence on signing the SDI research contract with Mr. Caspar Weinberger. The degree to which British companies are taking part in this imaginative programme is welcome. As the Secretary of State for Defence has emphasised, it is business for our laboratories. It has been gained on its technical merit in competition. We have contract research laboratories in this country that do an excellent job. This includes those in the public sector. Why should they not go after this business? It is their mainstream business, and it makes sense.
I am delighted that work is well advanced on other British proposals for participation in the SDI programme, taking into account the electromagnetic launcher, in other words, the rail gun, as well as the sensors and command and control communication systems. These contracts have to be gained on a competitive basis, and it shows the significant role that this country can play in advanced technology fields which will open new product areas for British companies.
This follow-up initiative, although well into the pipeline, is delayed. I have noted with interest the formalities that have just taken place and that were seen on television last night. Can my noble friend Lord Glenarthur, who is to respond to the debate, say what the next steps will be? Is the ball now in the Ministry of Defence's court, or are we waiting for action to be taken by the United States Government? Are more contracts to be signed between the two governments or between British companies and the SDI office or the SDI participation office in the Ministry of Defence?
As to competition overall, industry is concerned that the profit formula negotiated with the review board for government contracts reflects adequately the increasing risks that competitive bidding brings about.

333
I hope that the Government can look seriously at this matter. If competitive bidding is to predominate, then timely procurement decisions are essential to keep the goodwill of industry. Much encouragement is being given to the private sector to come forward and compete for Ministry of Defence business and we now see some new ventures into commercial management and contractorisation, which I welcome.
On the Dockyard Services Bill we have discussed the ethics and legalities of forming a company whose only function would be to employ labour within the contracting company which is to have control over the utilisation of the assets in government hands. Separating the workforce from the assets in this way is not I think unworkable, as the noble and learned Lord, Lord Denning, would have us believe. I think that his analogy with the hive of bees falls short of human achievement today. Yes, I think a partnership between the queen as the asset and the workers is a natural phenomenon but it takes no account of human intervention to organise a more efficient system using a queen excluder, thus creating the two-tier group with the workers kept at arm's length from the assets.
The idea of the labour unit is already accepted by the Ministry of Defence as being the preferred way of operating facilities in research and test establishments, and industry is being invited to tender for these services. But it is attracting the body shops such as Airwork, and RCA Services—an English subsidiary of Radio Corportion of America—whose principal expertise is in contracting labour. Industry is being asked to participate in this rather limited way, but surely there is a case here for inviting industry to apply its engineering skills and know-how comprehensively and to take part in the provision of technical, commercial and managerial skills, as with the dockyards, instead of just provision of labour which attracts only the body shops. The Ministry of Defence then has control over the flow of technology into defence from industy, which surely must be a beneficial spin-back effect.
I should like to move on to another matter referred to in the estimates which now allows the procurement executive to introduce break points into the procurement process. This must be a two-edged weapon. Like the blade of Queen Boadicea's chariot wheel, it can cut both ways. While it may ensure keen prices in production, following development, it may also be a disincentive to industry to innovate.
There are two reasons for this. First, innovation requires a company to invest smoothly from research into the market without interruption. Secondly, competition at the production stage requires a company to provide drawings perhaps for a competitor to bid, thereby leaking information and know-how of value in its mainstream business. I think that these new powers should be used with discretion, bearing in mind that a company's main purpose in business is to get a product into the market place according to a planned series of events. Therefore a measure of production to follow development makes real sense.
Turning to another initiative taken by the Ministry of Defence with the express purpose of generating the spin-off effect from government research, I think that
334
this is akin to the initiative taken by universities in creating the so-called science park. Mobilising the skills at a university by bringing industry closer to the fount of knowledge makes sense and the creation of DTE (or Defence Technology Enterprises) to ferret out ideas from defence research will be of great benefit to British industry—or so it should be.
The private sector is the right place to put together the technological jigsaw from the scientific bits and adapt it to civilian use. But with the example of Cambridge, where 60 per cent. of the science park occupants or tenants are foreign firms, I hope that the opportunities offered by DTE will not be taken up by foreign firms when quite clearly the venture is surely aimed at strengthening the British industrial hand. As the Secretary of State says in the estimates, Defence Technology Enterprises is there to increase the contribution that these defence resources in the government research establishments in the MoD make to the development of the economy.
Finally, I turn to the question of merchant shipping and the defence requirements arising. This has been mentioned by the noble and gallant Lord, Lord Hill-Norton, and the noble Lord, Lord Boston of Faversham. The amphibious capability is of considerable importance, as has been said by the Defence Committee in another place. The figure for available shipping is dropping all the time, as we know. In the United States, it has dropped so much that the creation of the strategic sea lift force has been brought about. If one looks at the registered ships, the Defence Estimates say that there are 876 ships of 1,000 tonnes gross registered tonnage available. But the General Council of British Shipbuilders tells me that if one looks at the owned and registered UK ships of 500 tonnes gross registered tonnage and above, there are 602 of which approximately 500 are 1.000 tonnes gross registered tonnage. Those are the ones owned and registered in the United Kingdom and not just registered.
Money set aside for the modification to Jones Act vessels—those are the vessels in the United States which ply between American ports and carry American cargoes; and one might say that these vessels are equivalent to our owned and registered ships in the United Kingdom—is intended to deal with the problem of underway replenishment, the handling of "seasheds" designed for military cargo that will not fit into containers, the conversion of container ships to fast sea lift vessels, and the building of auxiliary crane ships, quite apart from the maritime prepositioning ships which carry the equipment needs of complete army brigades.
All this points to the need for us to look very much more closely at whether the STUFT (the ships taken up from trade) arrangements are adequate and whether there is a need to develop maritime reserve capabilities—amphibious capabilities—which are compatible with the techniques now being developed for the strategic sea lift force in the United States. I imagine that there must be some logic in trying to standardise on methods and equipment, as both countries are members of NATO and will be required to work together in many circumstances in the future. I should be grateful if my noble friend on the Front Bench, when he comes to reply, is able to give the

335
House some assurances about further developments in this sector. These are of great public concern. The maritime reserve which can be called on and its suitability are of great concern not only to the navy but to the defence forces as a whole and to NATO.
I was not going to say anything about the Hill-Norton report, but as it has been mentioned I should like to say this. Having read the report closely, I would say that the inquiry—Professor Caldwell—should look at the general case for the design of frigate hulls and take this as an opportunity to design cost-efficient hulls, operationally suitable for our needs, and not look at the problem just as an answer to the Type 23 frigate problem which we faced in 1983. If we look back at the events which we faced then, I do not think that we gave sufficient attention to the short fat ship design.
The NATO frigate design NFR. 90 is now being looked at and has passed the feasibility stage. As I understand it, it is going into the project definition study phase, and I wonder who the host country would be for this. The most important point about the NFR. 90 is that British industry should be able to tender for equipment which is specified by the ship builder when the time comes for one of these ships to be built, if the time comes at all. It will be a long way off, of course, as we all recognise.
I have covered a number of points arising from the estimates, and I hope that the Government will continue to give the greatest priority to maintaining strong and well-equipped armed forces.
6.50 p.m.
Lord Monkswell: My Lords, a broad philosophy for defence may be divided into four elements, all of which are necessary and linked together; one, an effective shield; two, a sharp sword; three, strong arms; and four, a sound body and mind. I intend to highlight some problems, vulnerabilities and limitations with regard to the defence of this realm, and then briefly to summarise the effect on these four elements.
Needless to say we have to look a little wider than the Statement on the Defence Estimates. We must be concerned, following the Westland fiasco, that there appears to be no clear, coherent military philosophy about the role of helicopters in modern warfare. I was also appalled recently to hear on the radio a report from the recent defence sales exhibition that, "Tanks were designed for static defence". What a godsend to any potential enemy of ours if that statement were true. I know that it is not true.
If we look at the operational state of our armed forces, we can see some weaknesses on the manpower and equipment fronts. On manpower what are the likely operational and other consequences of separate arrangements for officers and other ranks in the fields of education for their children, and in another area, the messing arrangements? We know, for example, that separate canteens for senior staff, office staff, and shopfloor workers in industry are counterproductive. Maybe the noble Lord, Lord Young, should be encouraged to advise the Ministry of Defence on this subject.
With regard to equipment, the Nimrod early warning system is late; the new infantry weapon SA.80
336
is reported as being usable only by right-handed people. I note that during last year one of our Tornados crashed, and if memory serves me, I think that is the second or third Tornado to have crashed in recent years. I can understand the loss of a prototype; I am a little more concerned about the loss of production versions in peacetime.
We have still not resolved the conflict between the thick and thin warship design philosophies. However, we have another committee to look at it. I seem to remember reading somewhere that experts suggest that the only way to resolve that controversy is actually to build one, and see how it works.
With regard to resource availability, can all spare parts and expendable items be obtained from United Kingdom sources? Are there healthy, fit, adequately educated and trained reserves of manpower and womanpower available for recruitment into the armed forces without denying civilian industry of its requirements?
If we look at the range of industries essential for our defence requirements, we can see that they are either already gravely damaged or else capable of being easily damaged. Energy production by large power stations with distribution lines over long distances is vulnerable to attack. Our steel industry comprises three sites for bulk steel production. We do not even produce enough steel in this country to satisfy our peacetime needs. What is the situation going to be like in wartime? Machine tool production capability has been virtually wiped out already. Even Hitler could not do that. Manufacturing industry is a shadow of its former strength. Shipbuilding is going to rack and ruin. Our water industry is virtually cracking up for want of investment. Our roads and our railways are hardly much better.
We hear a lot about defence exercises with large numbers of soldiers and services personnel, and they are essential for adequate training. But how about a defence exercise to test our civilian capability? For example, how about an exercise to repair all the defects in a particular area of the road network? If we take, for example, spaghetti junction near Birmingham, we all know that it is going to need replacement and rebuilding within a fairly short time. What would be the result if we were to pretend that it had been destroyed by enemy action and we actually went and did it now as an exercise?
How about repairing and replacing the decrepit water and sewerage system in Manchester? It needs doing anyway. Why not pretend that it has been destroyed by enemy action and do it now? How about building as an exercise—and as an essential defence exercise—a new steel plant in the Birmingham area? That would give us four, and reduce our vulnerability to attack.
Perhaps I may now turn to our longer-term vulnerabilities in a war of attrition. All major conflicts in modern times have started with the idea that they will be "over by Christmas". However, once the first Christmas is passed the question is then, "Which Christmas?" That has implications for other areas of investigation—additional manpower for the services, with the consequent problems of availability and suitability. If we look at the health, strength and fitness of our population; if we look at education and training

337
standards; if we look at the moral and philosophical attitudes to fighting itself and also to serving overseas; if we look to the attitudes of the civilian population to pay and conditions in the armed forces—how are those aspects to be gelled with the possibility of long-term conflict and the additional demands on manpower by the armed forces?
There are other resource implications. How capable is our munitions industry of providing the ammunition for our guns and tanks, etc. at a sustained output over a long period of time? How capable is our aircraft industry of producing over a period of time the sort of equipment they would need to produce? What is the capability of our industry to provide guns, tanks, trucks, and all kinds of equipment? I have already mentioned that shipbuilding capacity is woefully inadequate. What abou foodstuff production, housing standards, communications networks, energy production, chemicals?
We think of the backup for the armed forces by the civilian population; and it is too easy to forget the contribution that has been made in previous major conflicts by civilians—the factory workers, the Land Army, Bevin boys and the dockyard workers. Too often they have been forgotten and not entered into the equation of defence capability. Have the questions been asked? Have we the factories and the skilled workers for a long-term defence effort? Have we the food production capability, or do we depend on imported fertiliser and agrochemicals? Does that make us vulnerable? Have we the coal production capacity to provide energy and to provide the chemical feedstocks which are essential in a modern age? Have we the shipbuilding capacity? As has been mentioned by a number of speakers today, and also by many noble Lords previously over weeks and months, we know that our merchant fleet is inadequate for our defence needs, but the Government refuse to do anything about it. Have we the steelmaking capacity? No, we have not. What would be the effect on our housing stock if there were no maintenance and no new build of housing for five years? What would be the effect of that upon society?
Now I come to some problems engendered by the Government's philosophy. First, there is the privatisation of the Royal dockyards. Some people believe that Colt started the idea of the interchangeability of components for his revolver. Some people think it was Henry Ford who started modern production. Those aspects of history are nonsense. The first interchangeability of components and the first production line were in the Royal naval dockyards in the Napoleonic era, hundreds of years ago, run by civil servants. The naval dockyards in that very good novel The Cruel Sea were slagged off compared with the Navy, but that was a work of fiction. We need to look at the reality.
Secondly, there is the Government's nuclear philosophy. Chernobyl has demonstrated the risks to the wider community across international frontiers of nuclear fall-out. Yet this Government still go ahead in the belief that nuclear weapons will affect the other side and not our side, that nuclear power stations and nuclear reprocessing works are legitimate military targets: "They are OK, you can take them out boys,
338
and that will hinder the enemy's defence efforts". But surely we know that we shall get the backlash from that.
The Government's antagonism to trade unionism hinders our defence capability. We only have to look at the drop in morale, the almost inevitable drop in effectiveness at GCHQ by the Government's attitude to unions there, to realise that. I am a very proud member of my trade union, AUEW (TASS). That union has fought long and hard, not only for the HS.146, which it has seen survive and become a useful commercial aircraft, but also for the advanced fighter aircraft. I am proud to be part of the union that fought for that to ensure that it would come to fruition. The Government's attitude to trade unionists and trade unions does the defence of this realm no service.
The Government's attitude to defence leaves us vulnerable in three broad areas: to the belief by potential enemies that our defence commitment is just a facade and that it has no depth; and, secondly, to the belief by service personnel that they may be called upon to do things that will quickly rebound on their folks back home. What will be the effect on a missile launcher, a gun aimer or a bomb aimer if he feels that his target is a nuclear power station in the Soviet Union and that that fall-out will come back and render the food production in this country uneatable? What will be the effect on that service personnel? The Government's third attitude to defence renders the belief that the military establishment is at the beck and call of government and is not there to serve the people.
It is postulated that if we were ever in a major war, nuclear weapons would be used and it would be all over very quickly—everything would go completely. I believe that by concentrating on that philosophy we are neglecting the real defence of this realm and consequently making ourselves vulnerable to defeat by so-called conventional arms. My argument is that instead of arming ourselves to the teeth with suicide weapons we should look at other ways to reduce our vulnerability to attack and to benefit our people as well—by better water and sewerage services; by better transport services and infrastructure; by better housing; by better energy production and utilisation; by better manufacturing capacity and capability; by better health and education of our people; and by reducing unemployment.
To conclude, while I have made some criticisms of the military establishment in terms of personnel policies and equipment deficiencies, these are from the point of view of support rather than detraction. My major criticisms concern the political philosophy that attaches to our defence needs—that political philosophy projected by senior Tory politicians, and, I am sad to say, by some senior politicians in other parties as well.
If we now look at the four elements of defence that I mentioned at the beginning, how have they come out of my review? Our shield is a bit suspect; remember, my Lords, we are still waiting for Nimrod. Our sword is the sword of Damocles, hanging by a thread over our existence, not the existence of any potential enemy of ours. Our arm, the connection between our military and civilian people, is fairly strong as yet, I believe. But our body is weak and our mind is affected by blinkered vision, lack of thought and preconceived hostility.
7.8 p.m.
Lord Crawshaw of Aintree: My Lords, earlier this year I had the opportunity and the privilege of visiting the forces in Norway, and for the first two or three minutes tonight I should like to pay tribute to the work they are doing out there in extreme conditions. As your Lordships probably know it is a vital area in any possible conflict. Their task is to ensure that the airfields in northern Norway do not fall under Soviet domination. It would be possible to secure them by airborne forces, but to put airborne forces into those positions with back-up support would be almost suicide.
That brings me to a point that has already been raised about the replacement of "Fearless" and her sister ship. I hope that the noble Lord who will respond to this debate will give us some assurance that "Intrepid" and "Fearless" will be replaced, and will tell us when that is likely to be. Those are the only types of ship which really serve the purposes not only of putting a force ashore to seize airfields, but also of providing back up by way of supplying them afterwards.
The worst of speaking at this time in the debate is that everybody has already touched on the subjects I wanted to touch on, but I shall still speak for a few moments about the Territorial Army. The point I wish to make has in fact already been mentioned, but I think that noble Lords, and particularly those who have served in the reserve forces in recent years, will remember a rather nice document that was produced called Twice a Citizen. A man was twice a citizen by being a citizen of this country and also by enlisting into the reserve forces to serve his country in time of war. That is twice a citizen. I regret to say that it is about time we had another booklet, Thrice a Citizen, because we have another category now. Not only do we have people who are citizens of this country and who enlist into the armed forces to serve in the reserve, but we also expect some of them—and the question was raised about unemployed people—to be out of pocket by the drills that they attend.
This surely cannot be right. We are not talking in terms of billions but in terms of a few millions. I believe that this is a festering sore in the reserve forces. I do not think that I need to convince the noble Lord the Minister; I think that in his heart he is for it. But I hope that something will be done about it because it was existing a year ago when I had the privilege of coming into this House. This is the third time I have spoken on it, and I hope it might be the last. I hope the Minister will take due regard of it.
The other thing is that I am sure we are all delighted to see the noble Baroness, Lady Vickers, here, and that she is going to take part in the debate. I am sure that we are also delighted with the news that was received about a certain refit at Devonport which is to take place. That is another thing which is coming up this week. I believe the Bill is due for Third Reading. Devonport was mentioned in the documents, and I am sure that many noble Lords in this House are hoping that the Minister will be able to give not a guarantee but some assurance that the dockyard will be run by not separating the equipment from the men. That is something which I hope is going to happen this Friday.
340
There has been a lot talked about nuclear weapons this afternoon. This is not only a financial problem but a moral problem as well. I have the greatest respect for those who say that under no circumstances should we have these nuclear weapons. I have the greatest respect for people who say, "I am a pacifist, and I will not fight in the armed forces." All I can say to that is that, as a barrister, I defended and put forward the case for many of those people so that they did not go into the armed forces. So I respect people's views on these particular issues. But this afternoon my noble friend Lord Hatch of Lusby—and I think I am keeping him from something else, because I told him that I was going to mention what he had said—brought up several matters on how wars start, and so on. Of course, he was perfectly right. He went back as far as Manchuria in 1931. But, unfortunately, he drew all the wrong conclusions from what had happened.
He went on to say that the Americans are devising weapons for first strike. He also told us, and rightly so, that there had been 140 conflicts since the end of the last war. But what there has not been is a conflict in Europe. This is the point that was not made. You have to ask yourself why there has been no conflict in Europe. Everywhere else, all over the world where there was no danger of atomic weapons being used, there have been conflicts. In other words, the absence of nuclear weapons has not saved people; they have had their conflicts. The nearest possibility of a conflict that we have had since 1945 was at the time of the Berlin blockade, when Russia went against the Yalta Treaty and tried to stop us going into Berlin, and we had to have an airlift.
If America was so aggessive—and she was the only one who had the atomic weapon at that time—she could have blackmailed Russia into submission. What appals me sometimes, in both Houses, is the anti-American attitude of some of the Members. I look round the House and I see here other people of my vintage. I cannot remember in 1942, when the Americans were arriving by the hundreds of thousands in Liverpool, notices being put up saying: "Yanks go home!" No—we were very relieved to have them here in 1942, after two years in which we had stood alone and in which Germany, for one of those years, had been fed and succoured by Russia. That is what we have to remember.
When I hear people say that the fact that we have nuclear weapons means that we are going to be a target, I say that we are going to be a target in any war if it comes about. But the purpose of nuclear weapons is not to fight a war: the purpose is to stop a war starting. That is the whole purpose of them. When you talk about trying to be neutral in any conflict, I cannot remember that Norway was considered neutral when Germany thought it suitable to enter Norway—or Belgium or Holland or Denmark. They did not have any treaties with us. They were peaceful countries that wanted just to live their own lives. The noble Lord, Lord Hatch of Lusby, asks: "Would any of these countries [those that he listed] be any more secure by having nuclear weapons?" Of course they would not. Their security depends upon the freedom of the West. The freedom of the world, apart from Eastern Europe,

341
depends upon the fact that the West maintains its own freedom. If that goes, it does not matter about how many nuclear weapons; their freedom will go as well.
What we have to consider is how we stop a war from starting. I believe that had it not been for nuclear weapons many incidents during the last 40 years in Europe could have led to a conflagration. In an age of non-nuclear weapons, I can see that when Czechoslovakia was invaded, when Hungary was invaded, and at the time of the trouble in Poland in recent years, these could all have spilled over into a conventional war. As many noble Lords have said today, what sort of war do you think we would fight as a conventional war? We would not be fighting with bladders on sticks! What we saw in the last war was quite sufficient to tell us that it was not a war that one would wish to enter into, anyway. A non-nuclear war is a war I do not want to see, either.
What is the answer to it? This is a moral problem. I believe that the need for nuclear defence has gone by default. I believe that the Government have assumed that everybody is in favour of it. What I find when I go round speaking to people about this is that, when you meet with many people, unless they are committed absolutely to non-nuclear then once they understand the argument they understand the sense of it. I believe that the defence that is being put forward today by the Government is the sort of defence that we ought to have.
Let me say this. I have mentioned the Soviet Union on several occasions. I believe that we do not do enough to try to break down the barriers between East and West. I believe that one of the difficulties of trying to get any negotiations on the lowering of the threshold is the mistrust that exists between the two sides. Therefore—and I have put this forward before—instead of sitting down wasting our time year after year trying to work out how we are going to reduce each side's nuclear weapons or conventional weapons, it would be better if we sat down for three or four years and worked out how we were going to verify anything that we decided. I am certain that it is more important to be able to verify than anything else. If the people in this country and the West knew that they could verify what Russia was doing and Russia was able to verify what we were doing, I think the other things would fall into place.
Sometimes I think that perhaps we ought to take 50 or 60 Members of Parliament or members of your Lordships' House and put them with a similar number of Russian politicians for a couple of months and let them talk things out, because I have been in most countries of the world and I have found that the people in those countries want the same as most of us want; that is, to live in peace. Therefore, I believe that the more we understand about other people the better it will be. But we start these arguments against one another—and (if I may just digress for a moment) we have the Argentine problem still with us. Why did we not, at the end of that war, have a situation in which the Prime Minister or some other member of the Government could say, "Can we come over and discuss things with you?" That is the sort of thing that Churchill would have done. He believed in magnanimity in victory: that was his expression.
342
I believe that is the sort of thing we ought to do, but it must be done from a position of strength. Once you are in a position of strength you can argue. The reason the Russians are coming to the negotiating table is not because we are going to throw away our nuclear weapons, but because we are going to keep them. Therefore, although I respect the views of those who have spoken to the contrary in this debate, including my noble friend—at least, I like to think of him as a friend—I believe that we should not put ourselves into a position in which without the Americans we were incapable of defending ourselves, because when it comes to the crunch every country looks to its own safety. I have said in this House before that one of the most appalling things I have had experience of was the fact that when the French Army was reeling back in 1940 we brought the air force back to this country. That was quite right as it turned out, because without the air force here in 1940 we should have lost the Battle of Britain and probably we should have lost the whole war.
That is what we have to face in the ultimate. I am 101 per cent. American but, even so, I do not ever want to reach a situation in which, if they decided it was to their advantage not to defend Western Europe, we would be left on our own with no defences, and while I have a voice in this House I hope I shall always be able to put that view forward.
Lord Hatch of Lusby: My Lords, before the noble Lord sits down—I did not want to interrupt him each time he referred to me—will he accept from me three points? The first is that nothing I said in my speech was anti-American. I always linked what was happening in America with what was happening in the Soviet Union. That is the great problem: that nuclear weapons have now become offensive on both sides, instead of being non-defensive. Secondly, would he accept that to the Hungarian, to the Czech and to the Pole, to say that there have been no conflicts in Europe over the past 40 years is to stretch credulity? Thirdly, would he accept that the reason I used the example of the Japanese invasion of Manchuria and the Italian invasion of Abyssinia was that in both those cases, which led directly to the Second World War, the failure was in those members of the League of Nations, who at that time could have stopped those aggressions before the Second World War came, and that now we are in the same kind of danger with similar conflicts which could lead to another world war?
Lord Mottistone: My Lords
Lord Crawshaw of Aintree: My Lords, I wonder whether I might answer my noble friend here. On the third thing, yes, it was the weakness of the League of Nations; but Hungary, Czechoslovakia and Poland were, by the Yalta Agreement, made parts of the sphere of influence of Russia. That is why I have to live now with the fact that, although I volunteered in 1939 in order to go and save Poland, I go to bed every night

343
knowing that they are under subjection to the Russians, because that was part of the Yalta Agreement—it was something that was signed. That is why we have them where they are. But it was not us who invaded Czechoslovakia and Hungary; it was the Russians.
7.25 p.m.
Lord Mottistone: My Lords, it is a real privilege to follow the splendid speech made by the noble Lord, Lord Crawshaw. Indeed I think it is the best speech we have had this evening. I only hope, apart from the detail, that it convinced the noble Lord, Lord Hatch of Lusby; but I fear, from his supplementary, that it did not.
What I really want to speak about is my very grave concern—and I am very serious about this—over the lack of understanding by many intelligent and influential people in the country of the importance of maintaining a credible deterrent capability. And of course I bracket the noble Lords, Lord Hatch of Lusby, Lord Brockway and Lord Jenkins of Putney, as being certainly intelligent and to a large degree influential people who fall into this category of people with totally closed minds on this subject. I shall hope to try and push a little thought into their minds.
A credible deterrent capability is essential if we are to preserve our way of life. I hope your Lordships will forgive me if I am repeating something that the noble Lord, Lord Crawshaw, has said because I hope to expand on it and not to duplicate it too much. Preserve our way of life we must if we are to have the foundation on which to build our capability to compete in the world markets with our manufactures and our commercial services. Only if we can so compete will we be able to provide for ourselves the overall health and other social services that we need and that everyone expects, and expects in increasing amounts.
The need for the overall deterrent within NATO is well expressed in the White Paper and summarised under the heading "The Seamless Robe" on pages 7 and 8. I would emphasise to your Lordships that nuclear is only part of the seamless robe, albeit an important one. We also need a deterrent capability to avert war in our remaining dependent territories around the world, as the totally unnecessary but splendid Falklands campaign showed us. That is touched on, most inadequately, on page 21 of the White Paper. I say "inadequately" because when major deterrents ensure peace between major powers, the importance of preserving peace for the more distant territories for which we are responsible becomes all the greater.
I am sorry that the noble Lord, Lord Hatch of Lusby, has just left his place, though I am not surprised. He quoted the figure of 140 armed conflicts that had taken place in the past 40 years. That point was touched on by the noble Lord, Lord Crawshaw; and indeed Lord Crawhaw's answer to that point was absolutely right. That was that some of those— actually he did not make this point—140 armed conflicts were extremely small. And I was involved in
344
some of them. Others, like Vietnam, were quite large; but some of them could well have become global had it not been for the nuclear deterrent. That, plus the point that was made by the noble Lord, Lord Crawshaw, about Europe having escaped (albeit not the other side of the Iron Curtain) is a fact which really must be accepted by those people who do not understand the point of the nuclear deterrent. These things happen overseas because greedy people risk things when "big brother" is not going to intervene.
The peace that we require in the overseas territories for which we are still responsible can be preserved in most of those territories only by balanced naval forces, supported where practicable by arms of the other services. That important point is not made in the White Paper. We must continue to learn from the lessons of the Falklands, so long as we have responsibility for peoples in lands distant from the North-East Atlantic. It may be that we feel that we do not have to bother about it. People have talked from time to time about morals, but it is morally indefensible not to make provision for that sort of deterrence for the important reason that those are the areas in which the little wars are more likely if the deterrence does not cover them as well.
We all attach paramount importance to the preservation of peace. The noble Lord, Lord Jenkins of Putney, mentioned the search for real peace, and I think for the first time I understood why he does not understand the essential truths that 1 am speaking about. I think it is that people who intellectually think of real peace, imagine a glorious world—a Utopia, a second heaven, a world that, sadly, is not real in this sinful world that we have around us. One has to be as blunt about it as that. The fact is that in the real world peace can be achieved only by comprehensive deterrence against whatever is the level of capability for waging war that is held by countries which threaten us, or—and I add again—the peoples for whom we are responsible.
There is no need for deterrence that is greater than it need be in order to be credible to the people who provide threats to us, and one of the problems about the Soviets is that they have not realised that second point. As was pointed out by my noble friend Lord Trenchard, they have grossly over-insured, and have therefore created a situation in which, in order for us to be credible, we have to be much more powerful than we either want or need to be.
The solution to the problem rests entirely in the Soviets appreciating, as the noble Lord, Lord Crawshaw, said, that on the few occasions in the 'fifties when the United States had their superiority unchallenged, they did not use it, and there is no real reason for the Soviets to think they will use it now. So the solution to the problem rests entirely on their bringing their capability down to what they need, without creating such a serious threat as we are faced with.
With the major threats that we face, such comprehensive deterrence can only be achieved collectively within NATO, as is well expressed in chapter one of the White Paper, whose penultimate section on page 6 makes it clear that Britain's

345
contribution should, and can, remain more or less unchanged. I was delighted that my noble friend the Minister, when commenting upon that in his concluding remarks, strongly endorsed that statement, though I noted that the noble and gallant Lord, Lord Carver, challenged it.
I was intrigued by the suggestion of the noble and gallant Lord that we must set up a special committee of people who know nothing about defence. I am not sure whether that is the right answer, and it is a pity that he is not here. When people want to put up a view, perhaps because their own view has not been accepted by the establishment, they always want to have a committee. With the greatest possible respect, my noble and gallant friend Lord Hill-Norton, if I may so call him, set up a committee over his ships. That has been successful, but I do not think that the committee of the noble and gallant Lord, Lord Carver, would be. Perhaps that is because of the greater skill of the noble and gallant Lord, Lord Hill-Norton.
Any major change in the present position as regards our contribution, as set out in the White Paper, could only have the effect of diminishing the credibility of the deterrent as a whole. This—and I cannot say it too strongly—would make the possibility of war or blackmail, which is just as bad, more, not less, likely. That is fundamental. What concerns me so greatly is that far too many influential people, both inside Parliament and outside, cannot grasp that essential truth as the inevitable consequence of some of their recommendations.
It seems at times as though some people actually want this country and its allies to be subservient to the now wholly discredited Soviet system. They grasp at superficially helpful statements, such as that accredited to Gorbachev on page 1 of the White Paper, as an excuse for abandoning major deterrent capabilities. Such people also listen readily to, and read, the extensive disinformation programme of the Soviets, which was well exposed by many speakers in the debate of the noble Lord, Lord Home, on 23rd April 1985—a debate, incidentally, which did not receive anything like the publicity it deserved. One can also be very concerned at that. Only the Soviets can benefit from not having their underhand propaganda methods exposed. The media men require a greater understanding of the threat to their own credibility by the Soviets' covert propaganda, and they need a greater courage to act as part of the deterrent themselves.
I should like to make a few remarks about points that other people made which I took up. I was disappointed at the large part of the speech of the noble Lord, Lord Boston of Faversham, which was devoted to the chemical weapons problem. I quite understand what he said; but the fact of the matter is that the Soviets have a capability—my noble friend Lord Fortescue made this point, too—which is providing a threat. In order to have a credible deterrent, we must in some way be able to afford to provide a balance to that threat.
It is very sad, it is quite unnecessary and I think I am right in saying that it is illegal in terms of the 1925
346
agreement. But they have this capability and we must, at least, be credible in our resistance to it, because the last thing we want is for the Soviets to say "We will not use atom bombs, we will not use conventional forces, but we will smother you in chemicals". It may sound ridiculous but if they said it, and we believed it, they could blackmail us, which would be disastrous.
I was very interested in what the noble Lord, Lord Kennet, said about 30,000 Soviet seamen being ashore for a year without visas. I hope my noble friend on the Front Bench can say something about that because it seems ridiculous that we should have these chaps, who are potential spies, hovering around our seaports without visas. Half of them could well be KGB men; you never know with those chaps. It seems to me that that calls for some sort of answer and, possibly, a little more than that. It may mean some sort of arrangement by which they are shadowed by that splendid team of chaps that my noble and gallant friend Lord Hill-Norton has in mind to recruit. But just to leave them around seems ridiculous.
I was delighted that the Minister told us that the design problem of the short-fat versus long-thin frigate of my noble and gallant friend Lord Hill-Norton would be properly studied. I am sorry that I was not here for my noble and gallant friend's speech, but I had to be elsewhere as I told him.
I was pleased by what the noble Lord. Lord Monkswell, said, surprisingly, about including Manchester's sewerage system in a defence exercise. If we carry that on properly, it will have two effects. One is that it might make the Labour Party keener on civil defence, because that is the way it would be done; and, secondly, it might mean that we had a larger territorial army to help it work. But the long war concept of the noble Lord, Lord Monkswell, struck me as being very strange.
Very quickly, and on a quite different subject. I must tell your Lordships that I had the immense privilege the week before last to go down to address young officers under training at the naval college at Dartmouth, where I had the privilege to be educated. I was so impressed by the standard of the young men we have coming into the navy at the moment, by the speed with which they are trained to be really capable young officers and by the whole pattern of the training programme, which is of course quite different from the kind of training that I had. I say only too readily that, at their present age, which is early twenties, they seem to me to be much more switched on and capable than I ever was at the same age, and no doubt my noble friend Lord Ironside would agree—I do not know. But they really are first class, and the system of training is tremendous.
I have another quick point. I have the privilege now of having an increasing amount to do with the Territorials. Although I have not seen them as Territorials in action, I have attended several meetings. I want to endorse so much what my noble friend Lord Fortescue and the noble Lord, Lord Crawshaw, said about this business of proper regard to those on unemployment benefit. I hope that my noble friend the Minister will be able to say something about that; and not just something, but something helpful.

347
In conclusion, it is of overwhelming importance that persons like the noble Lord, Lord Hatch of Lusby, (and there are far too many of them) really need to grasp the fact that appropriate deterrence—and I emphasise "appropriate"—including nuclear, is essential to maintain peace and prevent blackmail. It is not in itself a threat to anyone. A good start would be for them to read Chapters One and Two and Annex A of the White Paper with an open mind, but I suppose that is really too much to ask.
7.42 p.m.
Viscount Allenby: My Lords, as a recently retired officer perhaps I may also congratulate the Government on again producing a very valuable and worthwhile set of estimates, laying out the position of the forces today. If I may be permitted to say so, they reflect the healthy state of our armed forces.
Enough has been said about nuclear deterrence, chemical weapons and so forth, and so I shall therefore confine my remarks to just one part of the estimates, what I call the three Ms—money, men and management—in Chapter Three. Within the limited resources available resulting from strict control of both manpower and finance, our armed forces continue to provide excellent value for money. As has already been stated here this afternoon, the armed forces have the up-to-date and sophisticated equipment they so badly need, although, for reasons about which your Lordships have already heard, equipment takes a very long time to get into the hands of the user and in sufficient quantities.
The serviceman today is well paid, thanks to the continuing efforts of the Armed Forces Pay Review Body. As stated in paragraph 513 of the estimates, there is no evidence that service personnel are leaving because they consider their pay too low. That is a very true statement of fact. However, as indicated in Part 2 of the estimates in the table on page 39, there has been a steady increase since 1980–81 in the outflow of trained service personnel of the major skills. That is alarming, for without these skilled personnel the armed forces are unable to function properly.
There are a number of reasons for that, not least that there is a ready civilian market for service personnel with those skills. But, sadly, due to the need to increase salaries and provide more sophisticated equipment, there has been a gradual loss of job satisfaction in service life since the 1970s. To put it another way, it is an erosion of the quality of service life. Undoubtedly a certain degree of frustration is being felt because of continual cuts in manpower and other cost-cutting exercises. Because no allowance is made in manpower planning for training courses, intervals between postings, leave, sickness and the natural exigencies of service life, there just is not the manpower available to man fully our ships, our tanks and aircraft in peacetime.
I strongly support the thoughts of the noble and gallant Lord, Lord Hill-Norton, on having more ships, but in the navy at the present time there just is not enough manpower for the ships it has. Therefore if the navy is to have the ships that are proposed there will have to be a large increase in naval personnel.
348
Training time has also been cut in order to save money. We get very good recruits. We have already heard about naval cadets and how efficient they are. That is all to be applauded. But their training is being cut, and cut to the bone, and they are being rushed into service life in order to save time and money. There are many other cost-cutting exercises which while saving money are causing a degree of frustration, leading to the loss of job satisfaction. While efforts are being made to transfer power from the tail to the teeth of the forces, which is to be greatly applauded, this move could go too far and must be kept in balance.
Social patterns of service life are also changing. It is estimated that in 1983, 75 per cent. of all officers owned their own houses compared with 40 per cent. in 1970. From the table on page 53 of Part 2 of the estimates, similar increases apply also to the serviceman. But this is only an estimated figure of three years ago and does not include the unmarried officer or serviceman. My experience is that high numbers of young unmarrieds are also buying their houses because of the concern felt at coming to the end of their service with nowhere to live and the realisation that terminal grants and gratuities will not now match the sums needed to buy a house.
For too long now the assisted house purchase scheme has been around the corner but has never arrived. While the sale of surplus married quarters at discounted prices is a welcome move, all too often these houses are away from centres of employment and in unattractive parts of the United Kingdom where people just do not want to live. The current trend is for buying houses before reaching the middle of service career and then, after marriage, often for the wife to stay at home and go out to work. As a result, wives working in the United Kingdom are reluctant to give up lucrative jobs when the husband is posted abroad. This, in turn, is causing servicemen to want to serve on extended tours near their homes so that they can occupy their houses, and an increasing reluctance to serve abroad in such places as Germany where the financial inducements have been severely cut by the virtual elimination of the local overseas allowance.
One of the job's satisfactions is the ability to train and to do one's job properly. One aspect to which servicemen really look forward is to be able to visit one of the exotic parts of the world enumerated in Annex B of Part 1 of the estimates; but it is quite another matter to be able to train realistically when they get there. The training ground in Suffield, Canada, has been excellent for our armoured units and infantry, with their supporting arms, to train together for some years now. Time, however, may be running out for Suffield. It is largely flat and featureless, more like the Western desert than anywhere else in Europe. Surely, with highly mobile forces and long-range weapons, the time has come to give up some of the pocket-size training areas in the United Kingdom which originated as far back as World War II.
We should look for expansion of the major training complexes and at the same time look for new areas to train on. With the need to carry out deployment exercises for cruise, greater usage by RAF ground and air forces and the increase in the territorial army which

349
we all welcome, the pressure on the existing large training areas is as great as ever, with often as many as four or five units being in one area at the same time.
Since the end of World War II we have been most fortunate to be able to use the German countryside for our autumn manoeuvres. This is becoming more costly and politically difficult. Friendly Germans have often said to me, "Why do you not do this in your own country?" They have a point. Possibly we should seriously consider the greater usage of Section 6 of the Land Powers (Defence) Act 1958 for the training of our defence forces here at home.
Great improvements have been made in recent years with high-level simulators and greatly improved targetry on all our ranges. which are reflected in the estimates. However, there is an urgent need to provide the finance for low-level simulation. When we consider that the Chieftan tank has absolutely no simulation at all we are almost back in the times of waving red flags at each other.
For the army, there are very good and very cheap simulators for infantrymen known as SAWES and, for the tanks, SIMFIX. The corps in Germany are keen on this idea as training in the German countryside becomes more difficult. As compensation costs rise I urge that more funds are allocated to low-level and comparatively cheap simulation.
Turning to another matter, certainly the 10 per cent. X factor inducement for men and 7½ per cent. for women is most welcome, but the lack of job satisfaction is causing frustration at the lower levels in the forces today. Cuts in manpower, coupled with shortages of mileage, fuel and ammunition allocations, and many other limitations, are today causing a certain amount of frustration. The reason for these cuts is well understood by servicemen but, because of the lack of tools for the job, pride in the job is slowly disappearing. Nowadays all too often one sees servicemen driving around the countryside without wearing their berets. The only consolation I get from that is that there must be a great saving on headware expenditure.
I urge that the quality of life is carefully monitored and studied, after so many recent years of cost-cutting exercises. We have excellent volunteer sailors, soldiers and airmen. We need to retain them and ensure that they, in turn, get job satisfaction by being able to do the job expected of them; that they are able to train realistically and at the same time continue to have realistic conditions of service with allowances for the work they are called upon to do.
7.52 p.m.
Baroness Vickers: My Lords, it gives me great pleasure to join in the debate. I shall be even more brief than usual because the noble Viscount has made practically every point I intended to make. I was getting away with it until he spoke.
For nearly 40 years I have taken part in these debates—20 years in the other place and 20 years in this House. I have tried to learn from the various
350
services as much as I could of all that needed to be known in order to be a good representative in the House. I notice on pages 36 and 37 of the estimates the number of countries which our forces visit and in which we have troops of some kind. I have visited all but three of those countries and it gives me great satisfaction to see that Belize still has the Royal Air Force stationed there and that it is still a democratic country in a continent that is far from democratic.
I also attended many shop windows for the navy and went on various sailing expeditions which used to take place outside Portsmouth. Navy Days are an enormous help in informing the public of what is going on. I should like to see more reviews because I think they show, as Operation Shop Window used to show, the navy in a very good light. I myself have been over the jack stay and down in submarines and that enables me to give little talks occasionally about what that life is like.
There was a time when we had a marvellous contact overseas with all the different dockyards—I shall not talk about dockyards in general, as I am leaving that until Friday's debate—but unfortunately that contact has ceased. It was very helpful in visiting the various dockyards because one could get minor things done. For example, I visited Borneo during the war and found that the Gurkhas were getting less for cooking food than were the local cook-boys. That was not too difficult to get reversed when I returned. I was also able to get a number of barracks rebuilt, including one in Singapore which was almost immediately turned over to the Singaporeans.
I should like to take this opportunity of thanking my noble friend Lord Trefgarne for the help he has given particularly in regard to keeping open the Royal Naval Hospital at Devonport. That is entirely due to his intiative, and I think that he will not regret it. We need people to go overseas with proper nursing training, which is rather different from the training and work here. I also wish to mention that my noble friend went to Wiltshire to see the war widows off to the Far East. He was welcomed by them, and I was told this only today because I happened to have lunch with two of the widows and they told me how much they appreciated his visit. Of course, on Friday we shall be trying, with my noble friend's help, to find the right solution for the two dockyards at Rosyth and Devonport.
I return now to the question of service life, on page 44 of the estimates. Having left Devonport I am now living on Salisbury Plain with Upavon and Netheravon airports on each side of me. Moreover, the army continues to enjoy local battles. In Britain we are unique among the European NATO forces that our armed forces are manned with volunteers. We must congratulate ourselves that we have no conscription. I understand that we need to recruit about 30,000 men and women every year and to be able, as the noble Viscount mentioned, to retain them when they have been trained. This is very important because training, particularly for the RAF, is extremely expensive. One would have thought that with so many people unemployed the services would appeal as a worthwhile job. For example, the estimates show that there were

351
600 overseas expeditions to 62 different countries in 1984–85. That should create an interest in seeing the world.
Going overseas means separation from the family, but it is for comparatively short periods. There is a part of Devonport still known as China Town because in the old days after three years at sea the sailors returned with their tarred pigtails, not knowing that these had gone out of fashion. Those sailors did not see their wives for three years. Nowadays the separation is for three months, or even less, and in that time they have contact with their families. When the separation was for three years the wives had no contact with their husbands. There was no television, radio or newspapers.
I should like to speak now about the reserve home force. It is a success and over 5,000 strong. For example, the Royal Navy reserve increased by 40 per cent. The Royal Auxiliary Air Force has six new field squadrons. The Territorial Army is hoping to expand by 1990 to 86,000. It would be extremely helpful if it did.
I listened with great interest to the speech of the noble Lord, Lord Crawshaw, because he is a great enthusiast who has done so much in his army life; and also for Liverpool The services have the benefit of a review body. The Armed Forces Review Body understands that service life has certain disadvantages, especially for the young married men and women. As a result, there is what is known as the X factor, mentioned by the noble Viscount, of 10 per cent. for servicemen and 7½ per cent. for servicewomen. I should like to know why there is this difference. It must also be pointed out to potential recruits that there is free medical service and dental treatment, which they do not seem to understand. There is also assistance with boarding school fees. There is also, as has been mentioned, the question of married quarters. One can now buy these freehold, as they are in very nice areas, including Salisbury Plain.
As regards civilian apprentices, the Ministry of Defence, I gather, is the major employer and trainer in the country and the main source of craftsmen and technical officers. It recruited last year 1,040 apprentices, and in 1985 there were 4,100 in training. Does the money come out of the Ministry of Defence budget or out of that of the department of the noble Lord, Lord Young of Graffham? It seems to me that it should come from his budget.
Is action taken to contact universities, technical colleges and secretarial colleges, especially in places outside London? What arrangements are made for accommodation in London, as the difficulty of finding accommodation and the high cost of renting is likely to deter many people from applying? I wonder whether it may be possible to take over one of the unused hospitals which could fairly easily be adapted so that people could stay there when they first obtain a job in London.
Special pay additions are mentioned as being introduced. However, these will be eaten up by the cost of moving. Would it be possible to acquire accommodation more cheaply for people?
352
I should like to see action taken in regard to unemployment in, for example, areas such as Liverpool. I cannot see why we could not have an establishment there so that people were able to do the work which is needed. Many people need to be recruited—scientists, engineers, accountants and, strange to say, experienced clinical staff. Surely it would not be difficult to have an establishment in Liverpool to which people could go and be trained. Nowadays, with easy movement between various towns, there could surely be special postal arrange-ments and facilities for travelling. In this way one could help alleviate unemployment, and obtain a number of new recruits.
I shall cut out some of what I had intended to say because it has mostly been covered, and mention finally the question of the evacuation of Aden. I consider it a good example of close working by the Russians, the British and the French—a fine operation. Surely we might think of finding other operations in which we could co-operate.
I feel that I have said as much as I need say at this late hour. With regard to the few points that I have put forward, perhaps the noble Lord, if he cannot answer them now, will write to me.
8.3 p.m.
Lord Bird wood: My Lords, I want to touch briefly on the research side of our defence effort. I am not alone in being troubled by the cuts in this area, particularly in the case of research that is passed on to outside bodies, especially category 4, long-term programmes.
The consequences of stretching out a development programme can be hugely disruptive. Because of the discipline of what is called configuration control, if a system is delayed so that it misses the first fit on a batch, it misses the whole lot. Configuration control is not holy writ. I suggest that if this back-door moratorium of cost-cutting delays on research projects is continued, there should be a good, hard look at configuration control for its own sake.
My noble friend began the debate this afternoon by emphasising the priority given to collaboration. Nobody in his right mind would oppose consistency in these matters country by country, but to promote collaboration as a technique for keeping down costs is just fanciful. Individual weapon-fit requirements alone will push costs way beyond any notions of economies of scale.
There is a rather curious by-product of this push to collaborate, certainly as seen from those defence research establishments that can take a view on these matters. It is that competition among United Kingdom companies has perhaps never been more fierce, but these international programmes positively encourage a sweetness of temper between British defence companies and foreign firms. I am not being xenophobic in this observation, but we have a sorry track record for letting slip technology initiatives when we play away.
Returning briefly to research, I believe it is essential now for there to be an annual statement and detailed

353
report on MoD-sponsored research projects. This week's New Scientist calls for such an annual report, and its logic is sound. A regular, official and open statement of research effort such as this would be an invaluable tool for Parliament, industry and our own science establishments. I ask my noble friend's view of this.
Finally, I give unhesitating congratulation to the idea that resulted in Defence Technology Enterprises—DTE. It seems to be a thoroughly positive initiative. AH the signs are that DTE will create a badly needed bridge between defence research results and commercial opportunity. From what I have already learned of it, it is approaching these issues with vigour, and I wish it well.
8.7 p.m.
Lord Rea: My Lords, I apologise that I was not able to be present for the first part of the debate because of a previous engagement. I want to concentrate on the important topic of chemical weapons, which has been mentioned by several noble Lords and is mentioned in the defence White Paper. The question really is: escalation or elimination? To me it is a matter of concern that these unpleasant weapons have become topical again. There was a generation that had experience of them in the front lines of the Great War, the 1914–18 war. Both sides on the western front had the terrible experience of chlorine, phosgene and mustard gas wafting over and into their trenches. Sometimes the wind changed and own gases rather than own goals were scored. The Russians, without means of retaliation, suffered severely on the eastern front in that war. It is worth mentioning that the nerve gases now available are far more lethal than was World War I gas. I could give sickening medical details, but I will spare your Lordships.
In the last war, both sides thought better of using chemical weapons for fear of retaliation. The same kind of thinking probably explains why the United States and the USSR have retained chemical weapon capability despite its illegality in use according to the 1925 Geneva Convention. The Russians, we have been told, have kept their stocks at a higher and more up-to-date level than the United States. However, it is worth pointing out that the United States today possesses about 40,000 tonnes of nerve gases, sufficient to wipe out the entire world population ten times over if accurately delivered.
We do not know whether the Soviet stocks are as lethal as this, though rumour has it that the Russians now have an even more lethal gas than the Americans. They are now issuing suits with recyclable masks, so that they do not have to breathe the outside air. Perhaps they are anticipating something coming from our side. Though the basis of the information that the Russian chemical weapon stocks are greater and heavier than ours has been disputed, I understand it is accepted that there are 300,000 tonnes of Soviet chemical weapons in existence.
While on this unpleasant subject, it is worth noting that only one of the components of Big Eye", which is the colloquial name for the new proposed binary
354
weapon which some people in the United States wish to manufacture—and I should say at this point that other people in the United States strongly oppose its manufacture—is as lethal as methyl isocyanate, which killed 2,500 people in Bhopal. This is supposed to be a "safe" weapon. The mind boggles at how lethal the combined product must be.
I do not need to rehearse the argument which we have heard many times both in your Lordships' House and in another place as to why the United States should manufacture this new generation of binary weapons. It is spelt out in the defence White Paper. It is true that no chemical weapons have been made in the United States since 1969, but that does not mean that existing stocks are useless. In 1983 a presidential panel reported that less than six per 10,000 artillery shells that were filled with chemical weapons had leaks, and that these leaks were small. The main point is that modernising American stocks encourages the Russians to be more amenable at the conference table and thus to agree to a workable and verifiable ban on the manufacture and deployment of these weapons. This of course is the twin track logic that we have heard before on many occasions: escalate and negotiate—otherwise known as "upping the odds" or "arming to disarm".
Quite apart from the logical difficulty of this argument there is the historical problem that, however superficially attractive it may seem, the tactic has never actually worked in the past. More important is the fact that it ignores the knowledge available to us that very considerable progress has been made at the 40-nation United Nations Disarmament Conference in Geneva which has been working on the problem for years. Our representatives have made a significant contribution to the progress of these talks. Since February of this year Britain has taken the chair of the chemical sub-committee of the Geneva Conference, which gives us a unique opportunity to influence the course of the discussions.
I hope that when the noble Lord the Minister replies he will be able to correct me if I have been misinformed, but it would appear that there have recently been some quite significant Soviet concessions at these disarmament talks. The announcement by Mr. Gorbachev in January that the USSR favoured early and complete elimination of chemical weapons and the elimination also of the industrial plants where they are produced, has been followed up by more detailed proposals. According to the Financial Times of 23rd April this year the proposals, which are listed under heading "Soviets offer…", are:
"The Soviet plan presented to the conference proposed among other things:

—Destruction of chemical weapon stocks should start 'not later than six months' after a convention enters into force and be completed within 10 years.

—All production facilities must be declared within 30 days.

—Destruction of such facilities must begin not later than one year after the convention comes into force.

—All operations at production plants must stop immediately.

—Cessation of production operations must be verified at all plants, 'including private enterprises and transnational corporations'.

—A convention should include measures 'to prevent the use of the commercial chemical industry for the development and production of chemical weapons' "

355
At the negotiations the United States is insisting on the right of "mandatory challenge"; that is, to be able to demand on-site inspection at short notice anywhere in any signatory state. At present this is regarded by the USSR as too intrusive. However, according to the most recent ADIU report from Sussex University, the Netherlands and West Germany are working on a compromise which would narrow the "challenge" position. A British official was quoted as saying that the "challenge" right would only be a deterrent to cheating and would rarely be used, and if it were used in fact the convention would be in jeopardy.
I am giving this account in some detail in order to illustrate that the negotiations at Geneva have really narrowed down the discussion to such a degree that if all parties want an agreement it should be attainable. So I ask noble Lords whether this is the time for the United States to press ahead with the production of a new generation of chemical weapons. To my mind this move would be more likely to wreck the negotiations than to enhance their success, and this is a view which is held not only by the USSR but by many of those at the conference table.
There are many people in the United States who oppose the new binary chemical weapon "Big Eye", for financial and military reasons and not simply on moral grounds. Congress want to know what Europe thinks; and what Europe thinks is crucial. After all, it is in Europe that chemical weapons will be deployed, and European civilians will bear the brunt if they are used. Senator Mark Hatfield is quoted by the Guardian of 12th June as complaining of "the virtual silence of the West European media" on a weapon whose deployment "would signal a profound shift in current policy".
It is true that the noting by the NATO Defence Ministers in Brussels last month of binary weapons as a NATO "force goal" should have been much more thoroughly debated throughout Europe prior to the event. It was pushed through with indecent haste. Many people feel that this was in order to avoid the sort of adverse publicity that greeted cruise and Pershing. But I suggest that it is not too late for Britain to speak out. Five other NATO countries have declared that they will not allow chemical weapons to be deployed on their soil in any event.
We should inform the United States—and we can do so quite politely—that these weapons are not wanted in this country either. We should give full backing to our negotiating team in Geneva, who are in a position to achieve something much better than a "force goal". They might even score a "peace goal", which would hearten us all. This would set a very good example to those other negotiators in Vienna, Stockholm and Geneva who at present are virtually bogged down in their attempts to reduce nuclear weapons and conventional forces.
8.19 p.m.
Lord Ashbourne: My Lords, it is getting late and I promise to be brief, partly because many noble Lords have spoken in the debate and made many wise pronouncements, leaving little left to be said at this
356
stage of the evening; partly because the points that I had intended to make were both covered by the noble and gallant Lord, Lord Hill-Norton, in his wide-ranging, authoritative and mainly maritime speech; and partly because I see the big guns on the Front Bench are flexing their muscles and waiting to wind up.
Lord Graham of Edmonton: No, no, my Lords.
Lord Ashbourne: However, my Lords, I should like to touch on two points—and I thank the noble Lord on the Front Bench opposite for that encouragement! The first point is manpower. Perhaps here I should congratulate the authors of the White Paper on the article entitled "The Service Life" which appears on pages 44 and 45 of the Defence Estimates. I thought that that gave a balanced and accurate description of service life as a whole and listed both the advantages and disadvantages with great accuracy.
However, as is well known, training plays a large part in service life—a much larger part in service life than it does in civilian life. That is partly because a high degree of training is required in the services today and partly because of the complex electronic equipments which are used. Therefore it is of critical importance that valuable and highly-trained personnel are retained for as long as possible.
That being the case, it is of the greatest importance that those personnel do not go early. If they do, it is highly costly to the services and very inefficient. The White Paper, somewhat laconically, states that there are still shortfalls of officers, technicians and other skilled trades. It goes on to conclude:
"But there is no evidence that service personnel are leaving because they consider their pay to be too low".
I believe that that is a correct assessment of the situation, but if the retention levels are not proving satisfactory, something must be causing the premature brain drain from the services.
I should not wish to be alarmist in any way but I merely sound a warning bell that if that problem is not resolved with speed and determination it will get worse until the authorities are forced to take drastic action. In the first place, an accurate assessment of the cause of the problem has to be made, and I suspect that overstretch has a lot to do with it. But if one overstretches the man—the greatest single factor—there is a danger that he will speak with his feet, thus reducing further the efficiency of the services.
Secondly, I am concerned about the amphibious reinforcement of the northern flank of Europe, referred to on page 34. That item comes up every year in the Defence Estimates, and every year the two ships that are of critical importance to the operation—namely, our two LPDs (landing platform docks, for the uninitiated); that is, HMS "Fearless" and HMS "Intrepid"—are one year older and there is still no sign of a replacement being ordered. Last year, the House of Commons Select Committee on Defence made some somewhat caustic comments about the lateness of the ordering of the replacements for those two ships. This year, I see that the same omission obtains.

357
Both the noble and gallant Lord, Lord Hill-Norton, and the noble Lord, Lord Crawshaw of Aintree, are concerned about that lack of any replacement. I should like to end by asking the Minister who is to reply to the debate whether he can give us a firm assurance that the ships are to be replaced and tell us when specific orders are to be placed for their replacement, observing the great emphasis in the White Paper on the defence and reinforcement of Norway and the northern flank.
8.24 p.m.
Lord Mayhew: My Lords, I should like to begin by adding my congratulations to those already offered to my noble friend Lord Crawshaw on his spirited defence of the continuing need for a Western nuclear deterrent and for our alliance with the United States. That is vital common ground between the Alliance parties and the Government. I hope that none of the criticisms that I wish to make of the White Paper will obscure that fact.
Nevertheless, I have reservations about the opening chapters of the White Paper; for example, about the Soviet threat. The assessment seems to me a shade simplistic. It is summarised in paragraph 104:
"There have been many fluctuations and differences of emphasis by successive Soviet leaders over the years; but the overwhelming impression of Soviet behaviour since the war remains one of an underlying continuity".
At first sight that sounds all right, and yet I think that those with long memories who recall the days of Stalin, Vyshinski and Molotov, the Berlin blockade, the invasion of Czechoslovakia, the naked subversive activities world-wide of the Cominform, the inaccessibility of Soviet delegates and the total isolation of the Soviet people from the rest of the world will think the assessment a shade pessimistic. Gorbachev is not Stalin; there has been a change.
I have visited the Soviet Union several times over a period of 50 years. It is still a closed society, but it is much less inaccessible and mysterious than it used to be. The standard of conduct has not fluctuated, as the Government say; over the years since Stalin's time it has improved. I am sorry that the noble Lord, Lord Thomas, is not in his place. He apologised for not being able to be present. I disagreed profoundly when he not only praised that passage in the White Paper but decided that it ought to become a pamphlet and be circulated to schools. For a distinguished historian I thought that he was showing a lack of historical perspective. Things have changed.
It is most important when we are deciding matters of foreign and defence policy that that development should be recognised. It should be encouragement to us, among other reasons because I think that it is a tribute to Western policies during the period. It is an argument for NATO. If it was properly acknowledged, it would lead to a rather less negative attitude towards the problems of arms control and the handling of East-West relations.
358
The Alliance's defence commission report seems to me to have a more balanced assessment. For example, it says:
"While we do not believe that the Soviet Union intends to invade Western Europe, where it is militarily dominant, as Afghanistan and Poland show, it is prepared to use or threaten to use military power to impose its will on other countries".
At the same time the report reflects the limited long-term improvement in Soviet conduct and makes a series of recommendations to encourage that trend.
If the White Paper's assessment of Soviet conduct is a shade too negative, its view of United States policy can only be described as reverent. I ask the Minister when he comes to reply to quote from that lengthy document some passage suggesting that United States foreign and defence policy is not perfect in every respect; I ask him to quote one passage.
Lord Graham of Edmonton: He cannot do it. my Lords.
Lord Mayhew: I have found one passage as follows, my Lords. In a long tribute to the strategic defence initiative, hidden away in 15 paragraphs which explain and support the initiative, there is this sentence:
"SDI naturally carries many strategic implications which. as the Foreign Secretary said in a speech in March 1985, will require careful consideration in the years ahead".
That audacious sentence is the closest the Government come to expressing any misgivings about any aspect of United States foreign and defence policy; otherwise, on arms control, the test ban treaty, SALT II, SDI, and the threat to the anti-ballistic missile treaty, the chemical warfare force goal, Libya, Nicaragua and on the Middle East, according to the White Paper, the United States record is impeccable. Only the Soviet Union is at fault.
The last thing that I should want to do is argue an equivalence between the international conduct of the Soviet Union and the United States. But it is equally misleading to present the picture in black and white because there are inescapable similarities. To anyone who studies the nuclear arms control negotiations, for example, there are similarities between the conduct of the two super powers. No one who studies that seriously can avoid seeing that.
I have gone through the relevant paragraphs (202 to 217) on nuclear arms control negotiations. I have abstracted all the adjectives and descriptive phrases applied to the Soviet and the United States contributions. The Soviet contribution is described as "inequitable", "unverifiable", "one-sided", "clearly unacceptable" and "aimed at perpetuating Soviet advantages". The United States contribution is described as "realistic", "constructive", "specific", and "demonstrating United States commitment to pursuing agreement".
Lord Trefgarne: Hear hear!
Lord Mayhew: The Government may say, "Hear, hear", but no serious investigator into those nuclear

359
arms negotiations can think that that is a truthful and objective description of the attitude of the two sides. Those who, for example, went into the question of the Geneva intermediate nuclear weapons negotiations or the negotiations about not having negotiations on the test ban treaty and who thinks that the picture is black and white quite honestly have not studied the intracies of the conduct of the two powers.
I have assembled my own adjectives for those paragraphs. They are, "bland", "unsophisticated", "one-sided", and "sycophantic". That is the truth about those paragraphs.
I should also draw the Government's attention to paragraph 110. It mentions the Soviet Union, and not the United States, as seeking military facilities overseas. It criticises the Soviet Union, and not the United States, for actively encouraging disruptive elements in central America.
Unrestrained criticism of an ally is of course wrong, but abject deference is also wrong. I prefer again the language of the Alliance Defence Commission Report. We said.
"Serious policy differences can do harm… Unilateral intervention by the United States, for example in Central America and most recently in Libya, is causing concern and friction in the Western Alliance. We see this as an argument for strengthening the European voice within the Atlantic Alliance and not for distancing ourselves from it. … We believe that the resulting change in the balance within the Western Alliance will make for a more positive approach to solving international tension and achieving disarmament, without any sacrifice of mutual friendship and respect between Europe and the United States".
That language and attitude are more accurate, more truthful and more balanced than those of the White Paper. I challenge anyone to deny that. What is more, in my opinion, it will have more public support in this country. I warn the Government of the recent Marplan poll which showed that nearly one-third of Conservative voters think that the Government are too close to the United States Government and 2 per cent. think that they are not close enough.
As the Government are so close to the United States Government, it is natural that the White Paper should pay only lip service to the idea of a European pillar. It says a great deal about the European pillar (paragraphs 303 and 304) but plays down the need for a counter-balance to United States dominance in policy decisions, and it presents the need for a European pillar simply in terms of strengthening the European material contribution to NATO and increasing equipment collaboration among the European countries.
In contrast, the Alliance report suggests that the building of the European pillar should be a central feature of British foreign and defence policy. It does not rule out the possibility that Europe might lessen its dependence upon the United States with a minimum deterrent of its own. My noble friend Lord Kennet set out the Alliance Defence Commission's recommendations on that point.
The natural life of Polaris is I think universally accepted as lasting until 1997, and some would say 1998. If it were decided to replace Polaris, the most
360
widely canvassed replacement at present is by seaborne cruise missiles, the lead time for which, according to expert advice, would be about four years. Thus that option will remain open until at least 1992.
The question is whether it is necessary or wise to take the replacement decisions now. As my noble friend explained, the Alliance commission said, no, and laid down four criteria according to which the decisions should be taken when the time came.
The difference between the Alliance parties and the other two parties on that is plain enough. The Labour and Conservative parties long ago decided to ignore the important criteria—factors laid down by the Alliance commission. The Labour Party long ago decided not to replace Polaris in any circumstances. It is apparently quite sure that it can foresee what the world will be like in the mid-90s. It has consulted the stars, and the moderates see a world in which Europe can and should still rely upon the American deterrent. The Left sees a world in which Britain and Europe can safely dispense with any nuclear deterrent. They may be right; I am not arguing that point now. I am saying, why take the decision now without reference to the relevant factors? The answer is plain enough. The Labour Party is ideologically anti-nuclear, and that is the basis of its decision. And so are the Government. Is that what the Minister is saying?
The Government committed themselves on the Polaris replacement in 1980. They, too, consulted the stars. They, too, know what the mid-90s will be like, and what the world will be like in the mid-90s. It will be a world in which Britain will require a vast escalation of its independent strategic nuclear capability. It will be a tenfold escalation if we count the independently-targeted nuclear warheads. That is the world the Government predict. It is a world in which Britain must be able to use or threaten to use its nuclear weapons against the Soviet Union, independently of her European and American allies. It is a world in which no agreement will have been reached by the Americans and Russians on deep cuts in strategic weapons; otherwise the Government's deterrence policy is in ruins. It will be a world in which that vast escalation neither obstructs disarmament, causes resentment among our allies, nor diverts resources from our conventional strength.
It seems very unlikely indeed, but it may be such a world. These are the assumptions behind the Government's deterrence policy. The Government would have been much wiser to have held their hand until they could see more clearly what the future held. They should have kept open the option, if they so wished, of a Polaris replacement more suitable to Britain's needs. This is how a great deal of independent and conservative thinking is going at present. It is a course recommended, as my noble friend explained, by the Allied Defence Commission. It is a position warmly welcomed by a large amount of independent and informed advice. It was described by the Financial Times as "defensible and sustainable".
Instead, the Labour Party and the Government took their decisions on nuclear deterrents too early and in the wrong way, mainly for ideological reasons. I said at the beginning, and should perhaps repeat, that there is

361
a wide amount of vital common ground between the Alliance parties and the Government on the continuing need for a Western deterrent and on the continuing need for alliance with the United States. But the Government's deterrence policy, the building of Trident and their analysis and assessment in the White Paper are flawed. They are flawed mainly because of the ideological prejudices of the Government.
8.41 p.m.
Lord Graham of Edmonton: My Lords, the House has expressed its appreciation to the noble Lord, Lord Trefgarne, for starting off this important debate. I echo all that has been said. It was a very good introduction. We have also been treated to the special character of your Lordships' House, including, as it does, specialists of a high order. That has been amply borne out over the past five hours. My noble friend Lord Boston treated the House to an impressive and comprehensive review of our defence needs. His speech was impressive in its penetrating analysis of major facets of the matters contained within the pages of the Defence Estimates and comprehensive in its mastery of those details and their implications
I wish to begin by reminding the House and in particular the Minister, who has the difficult task of replying, of the points raised by my noble friend Lord Boston, although the Minister, we accept, cannot be expected to reply to all the matters that have been raised. On arms control and negotiations with the Russians, my noble friend paid a warm tribute to the Leader of the House, who recently visited Russia. My noble friend Lord Underhill played a notable part in the visit and in the fruitful discussions that took place. On the SALT II talks, my noble friend reminded the House of the confusion engendered over the past few weeks, especially in the United States. My noble friend was uneasy as to the real reasons for lack of progress over the test ban treaty. The noble Lord the Minister can perhaps answer some of my noble friend's questions on the changing nature of the problems of verification.
My noble friend also asked some deeply disturbing questions about chemical weapons and Britain's commitment to them in recent months. The House will expect the Minister not only to speak on those points but also to deal with the profoundly sombre speech made by my noble friend Lord Rea, which I much appreciated.
My noble friend Lord Boston returned to a recurring theme of his defence speeches over the years—the primacy of maintaining our merchant fleet. He asked the Government whether they really cared what happened to that fleet. The Government have a prime role in ensuring that we retain a merchant fleet capable of servicing the nation, not only in peacetime but also in wartime, as we so gratefully found during the recent Falklands crisis. Leaving things, as this Government are so prone to do, to market forces can be catastrophic, as the noble and gallant Lord, Lord Hill-Norton, so graphically reminded us in a compelling speech.
362
My noble friend described as astounding the complacency existing over this matter. We want to see the Minister drag matters out of that complacency when he replies. Can he say, for example, what has happened in respect of the call made by my noble friend in last year's debate for a committee of this House to examine the state of British shipping? If not, why not? Who could do this better? I hope that the Minister will take this point on board.
The noble and gallant Lord, Lord Hill-Norton, who is in his place, may have a point in wishing to see two days for a debate on the estimates. He may find grand strategy and high policy—the broad sweep so appropriate to these debates and to Second Reading debates—to his liking. The noble and gallant Lord referred to the Dockyard Services Bill. I am certainly heartened by the stress that he laid on the defects in the Bill and the crucial need for a contented workforce. I would simply remind the noble and gallant Lord that it is at Committee and Report stages of Bills that grand declarations made on Second Reading can be translated into the changes in the Bill that he seeks.
We should be grateful indeed to see the noble and gallant Lord in his place on Friday of this week. I can tell him that the noble Baroness, Lady Vickers, the noble Lord, Lord Crawshaw, the noble and learned Lord, Lord Denning, and the noble Lord, Lord Mayhew, will certainly be here with me speaking to amendments that the noble and learned Lord would certainly find to his liking. I look forward to the noble and gallant Lord helping us and joining us in the Lobby on these matters on Friday.
Central to our defence has been, and will continue to be, our membership of NATO. There is common ground, I believe, in the House and throughout the country that we cannot contemplate a rupture within its fold. I found much in the remarks of the noble Lord, Lord Kennet, that I was able to agree with, both on the need to be apprehensive as to President Reagan's grasp and sensitivity in respect of defence matters and in his call for an enhanced role for NATO in our nation's defence. The United States is one of our closest allies. This was mentioned by my noble friend in his opening speech. I simply reiterate it now. My noble friends Lord Brockway, Lord Jenkins and Lord Hatch, while critical, do not slander the American people. They were entitled to ask the sensible questions that they did and to expect answers tonight.
There is no nation with which we have a greater affinity. But friendship and dependence must not be mistaken for a supine, subservient relationship. We are, and will remain, two separate and sovereign nations, and we should treat each other as such.
We know all about difficult defence decisions. In his first days, the present Secretary of State for Defence has repeatedly warned that difficult decisions would have to be made as a result of cash limits. Gone are the days of defence at any cost. Prudence must now come into the equation. We on these Benches have no complaint about spending less on defence than our GNP has had to bear during the past seven years. We shall have arguments with the Government about the split between conventional and nuclear, between the

363
madness of Trident expenditure, which is out of control, and a defence policy that is costed and fitted for Britain fulfilling a role within NATO and in agreement with our EC allies.
An escalation in Trident costs, announced earlier this year, of £584 million is clear warning of a programme out of control. When such a central issue as Trident is so prone to costs incurred in the United States and to currency fluctuations, it merits the most crucial of reviews and we would say, as part of our policy, its cancellation. The White Paper shows that we spend far too much and more on defence than many other nations within NATO. We find that while we spend 5.2 per cent. of GDP, this compares with Turkey at 4.4 per cent., France at 4 per cent., Belgium at 3.3 per cent., West Germany at 3.3 per cent., Italy at 2.7 per cent., Canada at 2.2 per cent., and Spain at 2.1 per cent. There are others who spend more. There is Greece at 7.4 per cent., and the US at 6.9 per cent.
We on these Benches hold no brief for the maintenance of particular programmes, but the Minister has a duty to tell the House where savings in the order of £3 billion will be found. The noble and gallant Lord, Lord Carver, asked some searching questions that deserve answers tonight—none more so than those relating to the Trident programme. His exposure of the fallacies in the NATO policies—vis-a-vis conventional versus nuclear priorities which are peddled by this Government—was timely and effective. I wonder whether the Minister will deal with that aspect of the comments of the noble Lord, Lord Carver, tonight.
We read in the press and by other means that we are in for a great new sweep through all the defence budgeting. We can support the elimination of waste not only in defence expenditure but in other ways. Mr. Peter Levene is the poacher turned gamekeeper upon whom the Minister will rely, and unquestionably he will see as a major headache the resolution for the future of the Nimrod early warning system—what the noble and gallant Lord, Lord Hill-Norton, called the Nimrod shambles.
Can we be told something concerning the Government's thinking in this matter especially as the six months' grace awarded to GEC Avionics is ticking away? Just how dissatisfied is the RAF with GEC Avionics? What weight will be given to the continuing dilemma which faces all governments: how do we sustain adequate defences and procure adequate equipment, and do we accomplish it by ignoring other factors such as British jobs? Do we lightly throw away an estimated £1 billion of the taxpayers' money?
How serious is the Government in promoting Britain's high-tech industries? Those are some of the questions to which the House and the nation are entitled to answers tonight, or at another time.
It should not be only Mr. Levene who should be concerned with waste or excess public expenditure. A recent report from the Public Accounts Committee queried the non-competitive nature of defence contracts. We all know of the kind of situation which leads to negotiated contracts, in particular if the
364
procurement can be provided only by one supplier, or in cases of urgency, or of operational requirements. The sheer scale of the requirements may freeze off all but one tenderer. When the Minister said that we must all be more commercially minded—and this was one of the phrases that he used—will he give us some of the figures which demonstrate just how much more commercially minded we have become?
We know that the Public Accounts Committee is deeply concerned that excess profits are being made by the use of current systems. To date £3,000 million of contracts have been costed showing excess profits by contractors of £42 million. Can we have ministerial comments on the scandalous procedures whereby contract pricing was delayed in 1983–84 in 36 per cent. of such contracts until more than half completed, and 7 per cent. not priced until after completion? What is this cost-conscious Government doing to allow that?
I need to say a word about the Royal Ordnance factories. This is a cornerstone of the nation's weapon procurement. The Ordnance factories are in a right old state. Never has there been more uncertainty as to their role or future. There is a space in the document on page 50 which deals with the Royal dockyards. Much of it has certainly been worthy of the phrase used by the Minister in opening this debate: "searching for the reality behind the rhetoric". There is force which drives this Government to throw off any semblance of Government control and to put our fate in private hands. There can be few areas which merit this treatment less than our dockyards or our Ordnance factories. In this review reference to the Ordnance factories is conspicuously absent.
I want to ask the Minister what is happening in our Ordnance factories? I believe that it is a warning as to what can happen to the employees in our dockyards. Employees in the Ordnance factories have been betrayed. Jobs have been lost. Orders have been lost. Capital values have depreciated. There has been uncertainty as to programmes. There is no doubt that the Government are responsible for this shambles and where it will lead. Driven by their own incompetence from their favourite option for flogging off our Ordnance factories, we hear of piecemeal sales to raise something—anything—before a general election. The losers have been redundant workers and the security of the nation. The beneficiaries have been financial advisers and the banks.
Reference was made by the noble Lord, Lord Ashbourne, to the paragraph on page 44 which deals with recruitment, retention and morale, and service life. In this paragraph we have our attention drawn to the increase in what is called the voluntary outflow. In other words, the resignation from the forces. We are told that,
"while it is not at a critical level, shortages of officers in a few areas in each Service are causing concern".
Can the Minister tell us which are those few areas which are causing us concern?
When we are talking in terms of service life may I draw attention to an item number 4 in the brown-coloured part of the document:

365
"Individuals' reasons for joining and remaining in the services are many and varied; they include duty, comradeship, learning a trade, responsibility, travel, sport and adventure".
Inevitably, some will suffer from disappointed expectations.
The Minister who opened the debate knows that I have raised in the Chamber the very vexed question of the absence in our forces of any statistics relating to the ethnic origins of many of our servicemen. In my view the Minister has not only been disappointing but has been defensive, evasive and unsure of his ground on this matter. All that I have received in Parliamentary answers today is that there are no statistics available. That is the best cover-up of all. Why does the Minister not make some efforts to find out what is being said by members of the forces who leave because they allege discrimination? Why does he not do something positive about it?
In conclusion, I want to say that this has been a sober debate. We debate issues of crucial national interest against a world background of the search for a lasting peace, the removal of fear, tension, enmity and bloodshed. The awfulness of this nation budgeting to devote £18 billion of our resources to weapons of destruction, nuclear and conventional, fill me with despair. Other nations do it—all nations do it—and when Labour gains power we will spend such sums if need be to ensure the defence and the protection of the realm. But, while doing so, we can still dedicate our efforts to spending that money on improving our hospitals, giving our elderly a happier old age and our children a better start in life. We can dedicate our efforts towards feeding the starving millions on our earth for whom the expenditure we devote is obscene and who if we ever needed it, provide us all with the spur to one day eliminate our need for weapons of offence in favour of food and fulfilment for all mankind.
9 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, we have reached the end of a characteristically well-informed and wide-ranging debate. I shall do my best, as the noble Lord, Lord Graham of Edmonton, would have me do, to answer as many points as I possibly can. However, I should like to begin by dwelling on one or two areas of particular concern which have been raised, and first of all I take arms control. It is a matter of great concern to us all, and was particularly referred to by the noble Lord, Lord Boston of Faversham.
As my noble friend Lord Trefgarne reminded us, the Government are fully committed to achieving realistic, balanced and verifiable agreements on the control of armaments. This is an essential part of our security policy. Indeed, arms control and defence are two sides of the same coin—the security coin. This year's Statement contains a short section that sets out the issues very clearly, and I commend it to your Lordships. It reminds us that arms control adds to our security by contributing to world stability; by reducing
366
international tension and limiting the arms race; and by preventing the spread of weapons.
It also reminds us that arms control, by itself, is not enough to preserve the peace and freedom that we enjoy. It is not an alternative to prudent defence; it is not a means by which one side can gain, or keep, an advantage over the other; and it is not a quick and easy short-cut to better East-West relations. In fact, satisfactory arms control agreements are more likely to flow from stable international relations than to create them. The Government's approach to all arms control discussions must be seen against this background.
No more important talks are now taking place than those between the United States and the Soviet Union on nuclear and space arms in Geneva. Britain is not involved directly in these talks, nor should we be. Our independent strategic deterrent is a minimum force of last resort, which will continue to represent, even with Trident, a tiny proportion of US-Soviet strategic weaponry. The priority must be for reductions in the arsenals of the superpowers. The United States consults us and our other allies closely on the details of the talks. Arms control is a slow and painstaking business.
We cannot expect success overnight. We must be realistic in our expectations of Geneva. But the Government thoroughly and whole-heartedly support the objectives of the talks, and the United States proposals on the table for implementing them. These include a balanced proposal for 50 per cent. cuts in strategic weapons, and the global elimination of INF weapons—or an interim agreement if the Soviet Union cannot agree to a ban immediately. We hope that the latest Soviet proposals tabled at the negotiations in recent weeks indicate that they, too, are now prepared to take a more positive approach. In the meantime, we support adherence to those treaties and agreements that are already in existence.
More than once in the past year President Reagan has taken a deliberate decision to dismantle older weapon systems in order to remain within the limits specified in the unratified SALT II agreement We support and applaud those decisions, and we urge the Soviet Union to respond constructively to US concerns over their compliance record, and hope that both sides, as indeed the noble Lord, Lord Boston, would have them do, will continue to observe the SALT agreement in the future.
This country plays a prominent part in other forums for arms control. At the Geneva Conference on Disarmament we are working actively towards a comprehensive and verifiable worldwide ban on chemical weapons—a subject raised by many of your Lordships. As has been said, we abandoned our stocks in the late 1950s, and no change in that policy is proposed.
As the noble Lord, Lord Boston, said, the Soviet Union has for many years had a virtual monopoly of these dreadful weapons in Europe. Despite what the noble Lord, Lord Rea, said, it has shown scant enthusiasm for serious negotiations to get rid of

367
them—a perfect illustration of the ineffectiveness of one-sided disarmament by the West. The United States plans to modernise their own chemical weapons stocks, which we fully support, underline to the Soviet Union the benefits of achieving a realistic global ban on these weapons. Surely any criticism should be directed at the Soviet Union for retaining a massive chemical warfare capability—a point which underlay some of the speech by my noble friend Lord Fortescue and was indeed stressed by my noble friend Lord Mottistone, too.
As to the suggestion that there had been some change in policy formulation on this issue—a point raised by the noble Lord, Lord Boston—force goals are part of collective NATO defence planning. A number of force goals are added to each member country every other year as part of alliance procedures. The final step is for the force goal package to be formally adopted by the Defence Planning Committee. This meets first in permanent session with countries represented by ambassadors; then, as on 22nd May, in ministerial session. The fact that on 22nd May Ministers were invited simply to take note of the permanent representatives' recommendations on no sense precluded them from discussing the matter or from rejecting the proposals if they so wished.
In Stockholm we take part in the Conference on Disarmament in Europe, and together with our allies we have put forward a package of practical measures for increased openness on military activities as a means of building confidence and lessening tension in the whole of Europe. Progress will be reviewed in Vienna this November.
In addition, at the Mutual and Balanced Force Reductions talks in Vienna we and our allies continue to seek agreement on balanced and verifiable troop reductions. We still await a constructive and specific Soviet response to our proposals of last December—to which the United Kingdom made a major contribution. We are studying with interest Mr. Gorbachev's recent proposals for widespread cuts in troop and weapon numbers in Europe from the Atlantic to the Urals.
The renewed Soviet interest in conventional arms control is welcome. For our part, NATO Ministers decided last month to set up a high-level task force on conventional arms control. Its purpose is to look for new and imaginative ways forward in this field. We intend to play a full part in this group's activities, and to work urgently towards the objective of a verifiable, comprehensive and stable balance of conventional forces at lower levels.
Major difficulties in this quest have included the Soviet refusal to discuss force numbers or admit the extent of the current imbalance, or to accept adequate verification measures. We hope that the Warsaw Pact is now prepared to move on these issues. The opportunity to demonstrate their willingness to make progress is there in the negotiations already under way. If the Warsaw Pact is ready for genuine negotiation on these matters, they will find that we are, too.
Lord Kennet: My Lords, would the noble Lord permit me to intervene?
Lord Glenarthur: My Lords, I have a lot of material to get through, and I shall never finish if I give way to the noble Lord at this point. The noble Lord, Lord Gladwyn, raised a couple of important points to do with differing views in the United States on defence issues, and in particular on the latest proposals tabled by the Soviet Union at the Geneva negotiations. The Government have no doubt that the United States remains firmly committed to the NATO alliance as the only way of effectively maintaining our collective security.
As to the United States view of the latest Soviet proposals, I refer the noble Lord to the statement made by President Reagan in his Glassboro speech last week, where he stated that, while they could not be accepted as they stood, he believed that the Soviet Union had begun to make a serious effort in the negotiations and that the atmosphere could be right for a serious discussion. President Reagan also reiterated his desire to make progress at the next Summit meeting. The Government have welcomed this positive response, which I hope will be appreciated by the noble Lord, Lord Boston of Faversham.
The noble Lord, Lord Gladwyn, asked another question to do with Soviet treaty violations in the light of suggestions that the US conclusions were invalid. I shall correspond with him on that. Our record on arms control is good. We have imaginative proposals on the table. We look for progress in the future. We can best contribute not by one-sided gestures but by a positive effort within the alliance framework.
The next subject I should like to turn to briefly is the strategic defence initiative, referred to by the noble Lord, Lord Kennet, the noble Viscount, Lord Hanworth, and my noble friend Lord Ironside. As the Government have said on many occasions, we fully support the SDI research programme as a prudent hedge against long-established and extensive Soviet activity in the same field.
Moveover, your Lordships will recall that resulting from our support for SDI research we have entered into a formal agreement with the US Government to participate in the research programme. The extent of our involvement in these early days has so far been modest but I am particularly pleased to be in a position to confirm the awards of two significant US contracts to the UK for SDI research work, of which your Lordships will have read in today's papers. One is for a European architecture study, to be managed by the United Kingdom Ministry of Defence, in which we intend to make an original and independent contribution to the studies on SDI architecture already in train in the United States and to broaden the scope of the studies so as to encompass threats from intermediate and short-range missiles and air-breathing cruise missiles and aircraft, as well as ICBMs. The Ministry of Defence will be involving a range of high-quality British contractors in the work.
The other award is to one of our most prestigious, publicly owned but non-governmental laboratories,

369
for work in the neutral particle beam technology field. As my noble friend Lord Ironside said, this country has a great deal to offer to this endeavour and there is a lot waiting in the wings. I am convinced that co-operation with the US Government in this field will be a success.
The noble Lord, Lord Kennet, suggested that these new research contracts in some way ran counter to the four points agreed between the Prime Minister and the President in 1984. This simply is not the case. As my right honourable friend the Prime Minister said at the time and as the Government have made clear many times since, we fully support the need for SDI research in the light of Soviet developments and this is fully consistent with the four points, as is British participation in it.
Lord Kennet: My Lords, I am afraid I said nothing of the sort. What I said ran counter to the four points was Mr. Weinberger's reported statement that he would allow nothing to stand in the way of SDI deployment when the time came.
Lord Glenarthur: My Lords, I shall study the noble Lord's remarks and correspond with him on that point, if I may. If I have him wrong, I apologise.
Turning now to the matter of Trident and the subjects that were raised with it, I must first respond to the suggestion made by the noble Lord, Lord Hatch, that Trident, whether in United States or United Kingdom hands, is a first strike weapon. That is absolute rubbish. A first strike plays no part in our thinking on nuclear weapons nor, for that matter, in that of our allies. It is quite inconsistent with our policy of deterrence based on the possession of a minimum force consistent with that purpose.
May I say how much I agreed with the comments of the noble Lord, Lord Crawshaw of Aintree, in the extremely effective way he demolished not only once but twice so many of the discredited ideas of the noble Lord, Lord Hatch of Lusby, and indeed many of the points made by the noble Lord, Lord Mayhew, as well by setting out the real meaning and purpose of deterrence. He made several other very important points in his speach. I enjoyed hearing his eminently sensible remarks.
The noble Lord, Lord Kennet, questioned particularly the Government's decision to acquire Trident to replace Polaris as our independent strategic deterrent. He suggested that the Government did not study the alternatives. This is simply not the case. The Government conducted an extremely thorough and wide-ranging study on the range of possibilities for replacing Polaris, as anyone would expect the Government to do. These were described in considerable detail in the open Government document on the subject which we published in 1980 and in subsequent White Papers. These arguments remain valid today. It is as clear now as it was in 1980 that the Trident system is far and away the most effective way
370
of maintaining the effectiveness and credibility, as my noble friend Lord Mottistone would have it do, of an independent deterrent.
The noble Lord, Lord Kennet, also suggested that the decision on how, or even whether, Polaris should be replaced need not be made now. I can well understand why such a conclusion should be attractive to the noble Lord and his Alliance colleagues, but it does not bear much scrutiny. Polaris has been a very effective deterrent, and remains so today, but it will not be able to continue to be so much beyond the middle 1990s, given the length of time required to introduce into service a modern strategic deterrent force. I do not find the suggestion of four years by the noble Lord, Lord Mayhew, anything other than a pretty far-fetched consideration.
We needed to take the decision on its replacement, and we decided to acquire Trident in 1980. This was an entirely responsible decision that will ensure the maintenance of an effective deterrent until at least the year 2020. The noble and gallant Lord, Lord Carver, spoke of the cost of Trident and of whether at a time of a reducing defence budget we can still afford this system. It may help your Lordships if I were to put the cost of Trident into perspective. The noble and gallant Lord was quite correct in saying that it would cost about 3 per cent. of the defence budget over the life of the programme. This will be the equivalent of about three armoured divisions on the central front or, in terms of the equivalent annual expenditure, half the amount we spend on service training, a third of the amount that we spend on BAOR, and a mere one-sixth of the amount that we spend on service pay and allowances. I would ask the noble and gallant Lord to consider, if he were sitting in the Kremlin, by which he would be more deterred: an effective independent nuclear deterrent or three additional armoured divisions at a time of already significant Warsaw Pact superiority. The Government believe that Trident represents the best value for money for the deterrent effect that it possesses.
The noble Lord, Lord Boston of Faversham, raised the important matter of a comprehensive test ban treaty. While our highest priority is to achieve cuts in the levels of nuclear arsenals, we remain committed to making progress towards a comprehensive test ban. However, at present, serious verification problems remain. We are not confident that we could ensure that nuclear tests at militarily significant levels could reliably be both detected and distinguished from natural events. It would be premature to resume negotiations until a solution to these verification problems is more visible. The noble Lord, Lord Boston, asked for details of these verification problems. The Government tabled a technical paper at the Geneva conference on disarmament last July that set them out at some length. A copy of it is in the Library, and I commend it to the noble Lord.
I now turn to some of the other points that have been raised. The noble Lord, Lord Brockway, spoke once again with passion on the cause of unilateralism. He suggested that for doing so he is regarded by some as a traitor to the cause of freedom. I certainly do not regard the noble Lord so. I do not in the least doubt his

371
honesty, or his commitment, or his sincerity of purpose. However, nor do I in the least doubt how misguided he is in his views, with respect. Unfortunately, a misguided approach to the central issues governing our security can have dire consequences for all of us, as history has repeatedly demonstrated. The nuclear deterrent has kept the peace for 40 years. It would be folly indeed to throw that away in favour of little more than wishful thinking.
The noble and gallant Lord, Lord Carver, suggested that an independent study should be set up to consider the difficult decisions that need to be taken in reconciling competing priorities on the defence budget. Yes, a difficult balance it is, but it is a central task of my right honourable friend the Secretary of State for Defence and his ministerial colleagues, including my noble friend, to take such decisions. I really think that they are better placed than an independent study to consider these matters, with all the relevant information and expertise available to them. I agree with my noble friend Lord Mottistone on that.
Both the noble and gallant Lord and the noble and gallant Lord, Lord Hill-Norton, and the noble Viscount, Lord Allenby, mentioned the matter of overstretch in the services. Recruitment and retention are generally satisfactory, but inevitably there are more tasks than manpower available to do them. We therefore have to rank our priorities carefully to ensure that as much effort as possible is concentrated on the front line and that our manpower is used as efficiently and economically as possible.
The noble Lord, Lord Kennet, and my noble friend Lord Mottistone, referred to Soviet seamen entering the United Kingdom. I understand that in 1985 there were 1,612 individual visits by Soviet vessels to the United Kingdom and during that year about 41,000 Soviet seamen were potentially eligible to take shore leave during their ships' stay in port. I take my noble friend's point, and if he will allow me, I shall elaborate a little more in writing to him.
I noted the views, based on his great experience, of the noble and gallant Lord, Lord Hill-Norton, on the matter of the Nimrod airborne early warning project; and indeed the views of my noble friend Lord Ironside as well. A full statement on that project was made in another place by my honourable friend the then Minister for Defence Procurement on 26th February. The present position is that we have received proposals for AEW systems from six contractors, including GEC Avionics and three United States companies: Boeing, Grumman and Lockheed. The contractors have been asked to submit firm price bids by the 7th July. In addition we have had proposals from the United States Goverment to supply either of the systems in current United States military service through foreign military sales arrangements.
The noble and gallant Lord, Lord Hill-Norton, said that it was the Government's policy to order three frigates a year; yet, he said, since 1979 we had ordered only nine frigates, leaving a deficit of 12 (if I have the mathematics right). The statement of intent to order
372
about three a year must be read in context. It was made with reference to the new Type-23 design. Thus in the 1982 defence debate in another place the then Secretary of State for Defence said that our aim was to achieve eventually an order rate of about three new Type-23s a year. The first of class was ordered in October 1984.
A gap is to be expected between the first of class and follow-on orders because it is necessary to take time to evaluate the construction of a new design and to iron out any problems. As the House will know, it is the Government's intention to announce follow-on orders before the summer Recess. We are looking at the benefits of batch ordering. Meanwhile, I can assure your Lordships that we are meeting our aim of maintaining about 50 destroyers and frigates in the active fleet, subject to the availability of resources. At present there are over 50 such vessels in the active fleet. Having myself just visited a Type-42, HMS "Exeter", I can vouch for what my noble friend Lord Mottistone said about the quality of those joining the service today. I fully agree with him that they are most impressive.
The noble and gallant Lord, Lord Hill-Norton, and my noble friend Lord Ashbourne particularly asked about amphibious shipping. In anticipation of "Fearless" and "Intrepid" coming to the end of their planned service lives in the mid-1990s, we have been carefully examining all the options in connection with our future amphibious capability. We expect to make a decision on the best way forward later this year. The next step would be setting in hand detailed feasibility studies and that sort of thing.
As to the question of dockyards, I rather agree with the remarks of the noble Lord, Lord Graham of Edmonton, when he said that this is a subject perhaps better debated within the confines of the Bill which is currently going through your Lordships' House. As to the connection which the noble Lord, Lord Graham, drew with Royal Ordnance, as my right honourable friend the Secretary of State for Defence said in another place on 18th June, although substantial progress has been made in the process of transforming Royal Ordnance into a fully fledged commercial activity, it has not been possible to take this far enough and to have in place all the features necessary to provide the basis necessary for a successful flotation this summer. It remains our intention to privatise Royal Ordnance and we are giving further consideration to the means of achieving this.
Lord Graham of Edmonton: My Lords, may I intervene to ask what is going to happen to all those employees who have been made redundant in anticipation of the flotation?
Lord Glenarthur: My Lords, I wonder whether the noble Lord would allow me to correspond with him on that point. I am not sure he is necessarily correct in saying that they have been made redundant in the way that he has suggested.
As to the shortage of trawlers, which was a point particularly raised by the noble Lord, Lord Boston,

373
following the report of the sea group study, the studies into alternative ways of meeting the requirements for alternative vessels for minesweeping auxiliaries have been completed and it seems likely that a solution can be found using offshore supply and support vessels. This possible solution is being developed with a view to holding trials as soon as appropriate.
The noble Viscount, Lord Allenby, and my noble friend Lady Vickers referred to premature voluntary release and the question of retention. It is true that there has been an increase in the voluntary outflow, particularly among army officers; but it is not at a critical level and is still below the levels reached under the previous administration in 1977–78 and 1978–79. The noble Viscount raised a number of critical points and painted a rather depressing picture, which I do not think can be justified by the facts. I am sure he will take a realistic view of how we should make the best use of the enormous amounts of money which are voted for defence purposes.
He referred to the local overseas allowance. A repricing of the LOA budget for Germany was undertaken during March and it resulted in reductions in the allowances paid to service personnel. The reduced rates come into effect on 1st August this year. The LOA is a tax-free allowance which compensates for the extra cost of living overseas. The reductions arose because inflation in the United Kingdom is higher than in Germany and prices in this country have been increasing at a greater rate. But taken in conjunction with what a serviceman would spend in the United Kingdom, the new rates of LOA will enable him to maintain his previously established life-style.
I turn now to the remarks made, to which I listened with great care, by the noble Lord, Lord Boston, the noble and gallant Lord, Lord Hill-Norton, my noble friend Lord Ironside and the noble Lord, Lord Graham of Edmonton, about merchant shipping. At present, there is enough United Kingdom owned and registered merchant shipping to meet our defence requirements. I can assure your Lordships that the position is closely and carefully monitored by the Ministry of Defence and the Department of Transport to ensure that this remains the case.
As the White Paper says, we are hopeful that offshore supply vessels will provide an alternative means of meeting our auxiliary minesweeping require-ments, as I have just mentioned. As to the question of repeating the Falklands operation or something similar, which was raised by the noble and gallant Lord, Lord Hill-Norton, the Ministry of Defence believes that, in the unlikely event of a similar operation being needed, we could mount such an exercise.
As for the suggestion that my noble friend Lord Ironside made, when he referred to the US strategic sealift, the US adopted their policy of purchasing and mothballing shipping because they had no legislation allowing them to requisition shipping. In the United Kingdom, we have the benefit of that sort of legislation and are therefore able to avoid the expensive alternative espoused by the US. We are satisfied that we have
374
sufficient shipping available for our purposes. I understand that the US authorities are now seeking legislation comparable to our own to meet their needs.
My noble friend Lord Fortescue, the noble Lord, Lord Crawshaw, and my noble friend Lord Mottistone drew attention to the present difficulty experienced by members of the voluntary reserves, whose unemployment benefit is reduced because of payments they receive in respect of their duties. I recognise this to be a real problem and we are considering in conjunction with the DHSS, what can be done. I can assure all those noble Lords who raised this point that we shall do everything we can to find a solution to it.
My noble friend Lady Vickers inquired why female members of the armed forces receive an X-factor of 7½ per cent., while their male counterparts receive 10 per cent. The X-factor addition to pay is designed to compensate for the relative balance of disadvantage between service and civilian life. Servicewomen do not undertake combat duties, their careers are subject to less turbulence, and a smaller proportion than servicemen are required to work long hours. It therefore has been agreed that the lower X-factor is appropriate. The Armed Forces Pay Review Body and the Government recognised that women were increasingly adopting wider roles and responsibilities when increasing the X-factor rate from 5 per cent. to 7½ per cent. in 1982 for servicewomen, and the position will be kept under review. My noble friend Lady Vickers raised a number of other points relating to servicemen and women and I shall write to her about them.
My noble friend Lord Birdwood made some very helpful remarks about the research side, and particularly about the DTE. I am particularly grateful for those comments and I shall write to him on the matter of an annual statement, which is one of the points he raised to do with research.
I am sure that all those who have a hand in the editing and publication of the Statement on the Defence Estimates will be grateful for the many encouraging views (with the notable exception of the noble Lord, Lord Jenkins of Putney) which have been expressed on its style and readability, let alone its contents. I was interested and somewhat alarmed by the forecast of the noble Lord, Lord Kennet, of what he hoped the Alliance document, perhaps in years to come, might contain.
I noted the suggestion of my noble friend Lord Thomas about the publication for schools of an easily readable or digestible summary of Chapter One. I can tell my noble friend that such a document exists, and I will certainly let him have a copy of it. Perhaps reading some of that document would do much to educate those who took part in the poll to which my noble friend Lord Trenchard referred, and the alarming results of the survey which he related.
I noted the very sincere views of the noble and gallant Lord, Lord Hill-Norton, and my noble friend Lord Trenchard about the arrangements for this debate. Both of them will understand that this is a

375
matter more for the usual channels than for me, but I can say to both of them that there is a body of opinion which thought that last year's two-day debate was not quite as successful as some hoped it might be. I realise that there is an opposite view to this; but having said that, I am sure that the usual channels will have in mind the views of the noble and gallant Lord when making arrangements for next year's debate.
My noble friend and I will study with care the many points which have been raised in this debate which I have not been able to cover in winding up. In
376
conclusion, let me say this. The preservation of the nation's security is the first and foremost responsibility of any Government. The two facets of security—the pursuit of better relations with fewer armaments, on the one hand; the maintenance of credible and effective defences, on the other—are inseparable. Neither must be neglected; both must be pursued with vigour. The alternatives advocated by both parties opposite tonight are deeply inadequate. This Government have faced up to their responsibilities and will continue to do so in the future.
On Question, Motion agreed to.

Marine Pilotage
9.31 p.m.
Lord Shackleton Lord Shackleton rose to ask Her Majesty's Government whether they have now considered proposals, including those put forward by Trinity House, for achieving the aims of the Green Paper on Marine Pilotage without the need for complicated and early legislation.
The noble Lord said: My Lords, I am rather grateful to the noble Earl, Lord Caithness, who is due to reply, for suggesting that it would be useful to discuss this whole question. I never know whether or not I should declare an interest as an honorary elder brother of Trinity House. I emphasise the word "honorary". It is a great honour to be an elder brother of this splendid institution. Perhaps I may preface my remarks by saying that I have been for a number of years an honorary elder brother. I have sailed with the active elder brothers in their ship visiting lights. One cannot fail when one gets to know them to be impressed by the high professional quality of the active elder brothers.
The fact that it is an ancient institution and has existed for 400 years is not a reason for tearing it up and altering it; any more than it is a reason for getting rid of the army, which has also existed for quite a long while. Trinity House, although somewhat conservative in its approach, has been at great pains to modernise its attitude. It has revolutionised the lights system. There have been enormous savings there. It is very ready to give any help it can to the Government.
The most astonishing thing (to which I shall refer again at a later stage) was the total failure of the Government to consult Trinity House. That I cannot simply believe. Until the noble Earl, Lord Caithness, got under the wire just in time and had a consultation with Trinity House last week—and I give him credit for that—there was no consultation of a kind that was applied, for instance, in the case of the ports. In fact the day the Green Paper was published it was welcomed simultaneously by the ports. Trinity House had not seen it and did not know what was in it.
I am very glad that the noble Lord, Lord Strathcona, will be speaking later in the debate. He is very active as president of the pilots' organisation and will be in a strong position to state their views. It is important not just to assume that the opinion of either the shipowners, with their not very good record of industrial relations, or the ports, with their not very good record of industrial relations, is better than that of those who actually carry out the pilotage of this country, those very skilled and professional men, the pilots.
I give what I hope is a brief account of what is a complicated issued. I first remind the House that in December the Secretary of State published a Green Paper entitled Marine Pilotage. It is rather difficult to get hold of because with the economies of the present Government it is out of print, but the Printed Paper Office managed to get some copies. In the Green Paper the Secretary of State says that it has to be a prime objective of Government to minimise the cost of pilotage, and thereby the cost of seaborne trade, in
378
order to help create and maintain jobs throughout the United Kingdom. With that we all agree.
The Government propose to achieve this by two distinct lines of approach. The first intends legislation to rationalise the system—a move which on the whole is welcomed by Trinity House—if it gives the ports the authority to decide on their own pilotage needs. The second line of approach, however, intends that the ports, having decided upon their individual pilotage needs, should then actually take upon themselves the responsibility of carrying them through, as a pilotage authority, because that is supposed to help minimise the cost. The reasons why this should minimise the cost are not apparent to anyone I know other than on the assertions of those who have allowed their costs to rise out of all recognition.
The report published earlier this year by the Department of Transport on liner, shipping and freight rates states that the most significant factors—and we touched on this in a recent debate on lights—affecting the cost differential between Britain and Continental ports are, first, state funding (we are unique in not having a proper degree of state funding) and operating efficiency. I may say that the cost of lights comes to about only one-seventh of the additional cost but, again, in other countries it would be subsidised. However, I will not go further because the noble Earl, Lord Caithness, knows all about that. Having regard to the question of operating efficiency, how can the ports hope to provide a cheaper service? I could quote figures—but figures can always be argued about—showing that dock charges have increased in one typical UK port by over 110 per cent. since 1979.
There appear to be several reasons why pilotage costs will increase if each port is to be charged as acting as an individual pilotage authority. Here I come to technical questions which I will skip in order to save time, but the significant point is that many small but important ports will have to spend money on new administrative structures to tackle the technical, nautical, financial, legal and operational problems that have been so effectively dealt with centrally by Trinity House pilotage authority and its pilots for so many years.
Where, in all this, are the costs to be minimised? I ask whether the Government or anyone in your Lordships' House can say how costs will be minimised. Trinity House administrative overheads have been kept to 5 per cent. in the past three years and I have an auditor's letter which can prove that. For many ports the income from so small a percentage would buy only a few hours of legal advice. In at least one port that decided to run its own pilotage service some seven years ago the administrative charges have increased to 9 per cent. against the original 4 per cent. charged by Trinity House. I have many other figures.
Is not the Secretary of State, in his proposals to disband pilotage authorities like Trinity House, or the role of the pilotage authority, forgetting the small ports and designing sweeping changes solely in the face of pressure? By all means change the pilotage law—-it needs changing—but why has not Trinity House been consulted on this? That is most extraordinary.
I notice that the television lights in the House are

379
going out. This means the absence of television coverage so we can now talk much more freely. I hope I can continue to read my notes.
By all means have the ports say what they want for their best safety and commercial interests. The potential could be developed still further by changes in the Trinity House Pilotage Board. But the problem goes back to the Letch Committee in which payment for pilots was negotiated by the ports or the shipowners in which, again, Trinity House had no part at all. Since the Letch Agreement has been scrapped, costs in some areas have been dropped.
Much more than simple financial considerations is involved in all this, predominant though they are. There is the whole question of safety, first, in regard to dangers of grounding of vessels carrying oil or other hazardous or noxious cargoes. This cannot be overestimated. Proper standards of pilotage need to be maintained, as has happened under the authority of Trinity House. This sets the standard to which those ports that now do their own pilotage are able to aspire.
There is, furthermore, the problem of the estuary ports. In this respect the Thames area is the most important, and comes under Trinity House pilotage. There is a very good industrial relations record in Trinity House. It has not had the sort of strikes that others have had, nor has it been brought to a standstill as a result.
The pilots themselves are concerned for their future. Their productivity and earnings can obviously be queried. We accept that there is room for great improvement. The shipowner expects the best possible advice from the pilot, and is entitled to do so. It seems to me folly to weaken the most experienced body in the country, indeed, in the world, when it comes to pilotage, in the shape of Trinity House.
Trinity House provides a pool of boats that it has developed despite the failure of government—and I do not know whether it was this Government, the previous government or even the government of which I was a member, as it was some while ago. Governments are apt to fail in this area, and I do not pin this on the noble Earl, Lord Caithness, only.
We are waiting for a satisfactory code of practice and draft pilot boat construction, survey and certification regulations. Meanwhile, Trinity House has continued to develop the high speed pilot launch and now provides a pool that is available to those ports which may have only one pilot boat. Trinity House has now accepted that the cost associated with these new boats is such that some kind of pooling is necessary.
How will harbour authorities cope with this? It is shown that the need exists for amendments to pilotage law. Better than anybody else, Trinity House knows where this has to be done. It is clearly sensible. Provided that the national interest is preserved on safety and environmental grants, individual ports should be able to say what they need in terms of pilotage. It is not shown that individual ports desire themselves to operate the pilotage service that they need. Even if this were so, why should they be able to
380
do it better? Trinity House is willing to manage pilotage to suit a port's wishes.
The Green Paper refers to the fact that Trinity House can be asked to operate in this way on a voluntary basis. Even so, there is some doubt about the ability to sustain an institution like Trinity House, dependent as it is on individual decisions of a kind that are properly within the concern of the port while they may not have the capacity to take the decision.
I hope that the Government, and particularly the noble Lord, the Earl of Caithness, who has shown a great deal of interest and a constructive intelligence in this matter such as we have not always found in previous Ministers, will listen to the arguments.
It is not just because one admires Trinity House as an ancient and splendid institution; it is a superbly professional body. I think that for a government which is a conservative government—or perhaps it is not—this is an area of activity that is well worth conserving. I hope that when the noble Earl comes to reply he will be able to give some attention to the speeches that will be given this evening, particularly those coming from the noble Lord, Lord Strathcona, and my noble friend Lord Wilson. We have all been deeply concerned with the subject, to which, if I may say so, we do bring some knowledge.
9.45 p.m.
Lord Swinfen: My Lords, I am not a pilot, I do not own any ships, and I have never run a port. Indeed, I do not expect that I should be allowed anywhere near one on the running side, but only accepted as a passenger. I have no real axe to grind. However, I was asked to take an interest in this matter by a friend of mine who is a pilot, and the more I have read about it the more complicated it seems to become.
My noble friend on the Front Bench is a chartered surveyor like myself, and we are ill-equipped to deal with matters of the sea because neither of us is a hydrographic surveyor. I should be very interested if the noble Earl could tell me what are the qualifications of his advisers. Does he have any pilots advising him? Does he have anyone advising him who has run a ship? Does he have any ships' masters or anyone who has anything to do with running ports advising him? These are all important people, from whom the best advice that can be obtained should be obtained. I have no complaints about his present advisers—I am sure that they are admirable men and women—but I want to make certain that his advisers have the knowledge to give him the best advice.
I have noticed in reading the background material that the shipowners and the pilots' associations—not just Trinity House, because Trinity House does not control all the pilots—and the port authorities are all fighting their own corners. They do not seem to be willing to come together and talk. Will my noble friend convene a conference of the interested parties in order to get them round a table and to go through all the problems thoroughly, threshing them out? I am sure that both he and they will find that they have far more in common than they suspect.
It will perhaps take several days, maybe a week at first, to iron out various matters, but then may I

381
suggest that the conference does what I believe the EC Council of Ministers does when it is near to an answer? The delegates sit there and continue to talk until they have settled the matter. Otherwise, this problem will drag on. I think that my noble friend himself would probably make an admirable chairman of such a conference, but if the powers that be will not agree to let him spend time dealing with this important matter perhaps he can find someone else who will do the job, not quite as well but adequately.
The limits of port authorities in some instances are rather small. The limit of the London port authority does not cover the existing London pilotage district, which has several port authorities within its area. When everything is threshed out and we arrive at an answer, what will be the position of pilotage in the whole of the existing pilotage district? Will there be pilots available? The most dangerous areas in the Thames are outside the port authority areas.
My noble friend probably knows that the so-called supertankers draw 14 metres, or thereabouts. They need to reach their London berths about an hour before high water. In order to get to the berths at that time they need to pass the sunk pilot station at the mouth of the Thames at low water. I have a chart with me which I shall gladly give to my noble friend if he wants it, but the figures mentioned on that chart, in comparison to the 14 metres depth of the supertanker, are 12 metres, 13 metres and 14 metres.
It may well be that captains of British ships are sailing through those waters regularly and know them, and know how to find their way through at the very beginning of the flood, which they need to do to get up to their berths in time. But when we have no pilotage there, what will be the position of a foreign captain who has never been there before and yet knows he still has to get up to London at high water in order to get his ship into berth?
There will be an awful waste of time if the ship is hanging around, blocking the movement of other tankers in and out. That will be paid for by the shipowners. There may even be a loss of money to the port authorities. Can my noble friend please tell the House what will happen to those areas which, as I see it, will not be covered under the proposals in the Green Paper? There could be the most terrific environmental problems. I believe that my noble friend has been on an exercise to see how his department deals with oil spillages at sea, so he will be aware of the problem.
There is another point on which I should like clarification, because I am not sure whether I am correct. I understand that certain ships can be granted pilotage exemption certificates. I believe that those certificates are granted to the ship rather than to the master or the mate. What is the position if neither master nor mate is available? That ship, as I read it, still has an exemption certificate and could be brought in by a complete stranger who has never been there before. The consequences could be disastrous.
Can my noble friend confirm whether it is the ship or whether it is the master or the mate who is granted the certificate? If it is the ship, I think that it is a matter that needs to be changed, and probably changed urgently. It is a good opportunity to do so when dealing with pilotage reforms. If it is the master, he
382
should be mentioned; he could bring in smaller ships at other times if the firm that he worked for moved him from one ship to another. I believe that masters are not infrequently moved from one ship to another, depending on the requirements of the firm.
9.53 p.m.
Lord Walston: My Lords, I think that all of us would agree at least with the opening words of the second paragraph of this consultative document, in which, as your Lordships will know, it is stated:
"Pilots have a long and honourable tradition. Our modern pilotage service is second to none in the skills deployed and the preparedness of pilots to meet and serve the ships using our ports".
It is worth stressing that point because it may be felt by some that the consultative document is critical of pilots and is anti-pilot. That, I am sure the noble Earl will confirm, is in no way the case. The sentence that I have just quoted makes that abundantly clear.
In paragraph 2.4 the document goes on to say:
"For at least 12 years there has been a general recognition that the system has not been working satisfactorily".
That is also true. So far as possible we should look at this matter with open minds and without attempting to defend one side or the other—if indeed there are sides—or one particular system or another.
The noble Lord, Lord Shackleton, reminded us that Trinity House has existed for centuries. He said that that is no reason for getting rid of it any more than it is a reason for getting rid of the army, which has existed for even more centuries. But the army, over the centuries of its existence, has changed considerably. Anyone who listened to your Lordships' debate earlier today, had they been officers in or concerned with the army even 50 years ago, and certainly 100 or 150 years ago, would have been flabbergasted by the matters being talked about, because our armed forces have changed considerably with the times.
The fact that Trinity House, for which I and all your Lordships have an enormous admiration, has existed for centuries is no reason for saying that what it has done in the past must inevitably be right and must not be changed. We must look carefully, clearly and in a completely unbiased way at the problem as it is today to see what can be done to improve the situation, which by general consent is unsatisfactory.
Lord Shackleton: My Lords, I do not know anyone who has suggested that Trinity House should exist because it has existed for 400 years. I certainly did not. I said that, like the army, it had modernised itself.
Lord Walston: My Lords, I am sorry. I must have misunderstood my noble friend. The suggestion made by the noble Lord, Lord Swinfen, is one which deserves great consideration. There must be discussions among all the interested parties. This document, produced getting on for two years ago, invites comments and proposals to be sent in no later than 15th February 1985. If it is true that the department did not consult Trinity House until the last few days, that surely is a grave error, both tactically and from the practical point of view. I hope that the more recent discussions which have been going on with Trinity House will be pursued urgently.

383
The primary object of pilots is of course to ensure the safe passage of vessels, and safety for other vessels and users of the harbour, and to prevent any obstruction occurring in the harbour or any damage due to the spillage of dangerous or noxious cargoes. The safety record is undoubtedly good. I think that we can say it is satisfactory, but the cost is higher than it should be.
It is hard, as the noble Lord, Lord Shackleton, pointed out, to compare like with like when making comparisons with other countries. I shall give a few figures. I understand that the charges for larger vessels in continental ports are comparable to those in the United Kingdom. There are significant differences for smaller vessels. For instance, a vessel of 12,000 tonnes coming into London has to pay £2,500 in pilotage fees; coming into Southampton it has to pay £1,100 and into Rotterdam, £800. That is a significant difference, which must have some effect on shipowners when they choose which port to make for.
When you get down to coastal vessels of 1,500 tonnes or less, London is still enormously expensive at £1,180, while at Avonmouth the pilotage fee is £580; Rotterdam, £300; and at Le Havre, £260. Those are pretty significant differences.
Lord Mountevans: My Lords, I am grateful to the noble Lord for giving way. Would he agree that the figures that he has read out reflect the fact that in this country we have too many ports?
Lord Walston: My Lords, I would not have said that that was the reason. I am not an expert in these matters. I cannot say precisely or with any authority what the main reasons are. I would suggest to the noble Lord that one reason at least is not that we have too many ports but that we have too many pilots. We have, roughly speaking, 1,200 pilots at present. The estimates that I have received—they may be disputed but they are, I think, fairly reliable—suggest that there are about 250 to 400 surplus pilots. In other words, there are 30 per cent. more pilots than are needed to carry out the job. That is, I think, prima facie a reason for taking a new, honest and clear look at the problem to see how it can be overcome.
It seems to me only logical that the authority responsible for the proper running of the port, which includes, of course, the safety of the port, should be responsible for pilots and should, wherever possible, employ them direct. Apart from a good many other advantages, there should be and could be very considerable savings in overheads, especially in the larger ports. It is possible to effect economies, for instance, by using existing harbour masters' boats and vessels for pilotage purposes when not fully employed in their other activities.
There can also be savings by reason of the fact that pilots cannot have absolutely regular work the whole time. In a pretty large port, there are many other jobs in which they could be of extreme value to the harbour master and the port manager if they were directly employed by the harbour authority. There would be the advantage to the pilots that they would have available to them a ladder of promotion enabling them, if they so wished, to climb to better-paid and more responsible jobs than those they are doing at present.
384
Those arguments apply primarily to the larger ports. Out of the 94 pilotage districts in the country, 58 ports employ five pilots or fewer. In other words, they are, by any standard, small ports. Some are so small that the harbour master is a licensed pilot, and when not engaged in harbour master duties he takes on the responsibilities of pilotage. Of the 58 small ports, Trinity House runs the pilotage in 35, while 23 manage their pilotage in other ways. Some have independent pilotage authorities. Some have pilotage committees that are responsible to local authorities, often the local council, and so on. They are organised in a whole variety of different ways.
There is no reason that I can see why the small and the not so small ports should not make full use of Trinity House, its undoubted expertise, its experience and its knowledge and its provison of vessels if that appears the cheapest way of operating. In other words, if they consider it is wise for them to do so, it surely must be right that they should call on Trinity House. I am satisfied that all those who are using Trinity House at the moment would continue to do so, and possibly others might move over to it if they considered it worth their while. The government proposals allow for this but they also place responsibility for the proper administration of ports, including safety at ports, where it must belong—with the port authorities.
For those reasons I think that the general proposals outlined in this consultative document are on the right tack, but there must be further consultation. Undoubtedly there must be very close consultation with Trinity House, whose co-operation and goodwill in this matter are absolutely essential. However, at the end of the day I think the lines which are outlined in this consultative document are the ones which should be followed.
10.7 p.m.
Lord Greenway: My Lords, we are very much indebted to the noble Lord, Lord Shackleton, for giving us an opportunity this evening to discuss not only the Green Paper on pilotage but also pilotage in general. If my memory serves me correctly, we were denied the chance to discuss pilotage in the Merchant Shipping Bill 1979 because it went through this House "on the nod" right at the end of the Session, just before the general election. The opportunity to talk about pilotage therefore is doubly welcome.
The noble Lord has already outlined the general facts. I hope your Lordships will forgive me if I go over some of the ground which has already been covered. I would endorse the remarks made by the noble Lord, Lord Shackleton, about Trinity House. I, too, in my capacity as a photographer, have travelled widely with Trinity House at sea. I can confirm the excellence with which they carry out the tasks they have to perform.
We are unfortunately faced with a declining industry when it comes to shipping. Intense subsidised competition from abroad has made the situation even more difficult. Shipowners have for some time been badgering the Government to help them. I think that here we are in a position where the Government have finally found a way to do something for shipowners by helping to reduce the cost of pilotage. The Green Paper goes about this by proposing that the responsibility for

385
the provision of pilotage be devolved from the department to the individual port authorities. At the same time pilotage will be rationalised. I do not think anybody disagrees with that; it will be necessary.
Arriving at their decision in the Green Paper, the Government, as the noble Lord, Lord Shackleton, has said, did not consult either the UK pilotage association or Trinity House, which seems to me a very strange way of going about such things. The ports obviously were consulted, as we have heard. How else would the Government have reached the idea that costs could indeed be reduced, without some prompting from the port authorities? Certainly there is no explanation in the Green Paper as to how costs will be reduced.
To simplify the situation, pilotage at the moment is self-managed at local levels at no additional cost to the port. However, the number of ports large enough to take on the management of pilotage services is small in relation to those who stand to have this operational responsibility imposed upon them. I feel that some of these ports do not have the slightest idea of what extra work and costs they undoubtedly will have to incur. For a start, they will have to employ pilots. They will have to provide some kind of administration to cover their workings. In spite of what the noble Lord, Lord Walston, has just said about launches, pilots require a rather specialised launch if they are to be boarding ships some way out at sea. There may well therefore be the need to provide new pilot launches.
The port will probably need extra insurance cover to cover pilotage operations, not to mention the many and varied legal problems relating to the potential civil liability of the harbour authority through offering a pilotage service. I hope that the noble Lord, Lord Strathcona, is going to enlarge on the legal side of things. It is involved and complicated, and I do not intend to go into it myself at this moment.
May I reinforce Lord Shackleton's question to the Government as to how they are going to make sure that the cost of pilotage will be reduced? What in fact is going to happen? One way, as I see it, is for ports to hide some of the pilotage costs in their general harbour dues, which will no doubt increase, thus making the ports less competitive. I do not have to remind your Lordships that running a port today is a competitive business.
Another way would be to reduce the extent and quality of the service provided, either by physically reducing the pilotage boundaries or by granting exemption to more ships, or even by replacing pilots with a shore-based information service using VHF radio. By doing the latter they would not only reduce costs, but would also rather conveniently reduce the risk of liability arising from a navigational accident, it being much harder to show the causative involvement of persons on shore than would be the case if a pilot was aboard the ship.
That brings me on from costs to the subject of safety, which has already been touched upon. There can be no doubt that the influence of a properly qualified pilot aboard improves both the safety and efficiency of any ship operation. By cutting corners to save costs a port would automatically be reducing the safety margin as well.
386
Imagine a small coaster operating with a pilotage exemption in the narrow confines of a port, or river, going out of control for some reason, or making a peculiar manoeuvre and running into, say, a gas tanker or a chemical tanker that is being properly navigated by a qualified pilot. There is no way that the pilot can avoid a situation like that. The results do not bear thinking about. But there has already been such an occurrence—I am happy to say not with a gas carrier or a tanker—with a passenger ferry off the entrance to the new waterway at Rotterdam, where a coaster made a surprise manoeuvre and there was a collision and the ferry was holed. So these accidents can, and do, happen.
Let me give another example. Only last night I was talking to the brother of one of your Lordships who is a sea pilot. Sea pilots get only a passing mention in the Green Paper. They are not going to be affected as such by the proposed legislation and they will continue to be operated by Trinity House and other bodies. They are concerned, as are the other pilots, about the safety aspect of the proposed legislation.
I should like to relate one particular incident that happened to this pilot only recently. He was taking a Panamanian tanker around Europe. The tanker was crewed by Koreans, only the master could speak a smattering of English, and none of the crew had been to European waters before. They did not even know where the ports were.
In the course of this European circuit the tanker was coming down from Sullom Voe in the Shetlands to Coryton in the Thames estuary, with a cargo of 110,000 tonnes of oil. The pilot wanted to look at the North Sea chart. The chart that was produced was dated 1st July 1928. The pilot was naturally appalled at this and he asked how they happened to come by this chart. The reply was, "We got it cheap from a scrap yard". That is only one instance, and I have heard several others from pilots recently. These sort of ships are around. Luckily in this instance there was a pilot aboard, but it gives the lie to the much-vaunted effectiveness of the EC inspection system.
The noble Lord, Lord Swinfen, alluded to the Minister's trip today to witness an exercise off Dover with a collision situation and a potential oil spillage. I have no doubt that it was all a great success, and it is comforting to know that such contingency plans exist, but surely in such a case prevention through properly organised pilotage is much better than cure.
I come back to the Thames estuary, which has been mentioned, and the estuarial problem. Provision is made in the Green Paper for harbour authorities to delegate the running of pilotage services to Trinity House or to some other agents in this respect. The proposals also allow for groups of harbour authorities, whose harbours share a common approach area (such as London, Southampton, the Mersey, the Humber and the Clyde) to organise a pilotage service collectively to cover the area, although there is nothing in the proposals to require this. A harbour authority would have complete discretion to pull back its boundaries so as not to overlap the other port's boundaries.
I mentioned earlier that running a port is a very competitive business. Indeed, the reason for the

387
greatly increased number of small ports has generally been the inefficiency of the larger ports. I can foresee tremendous difficulties in reaching agreement on this matter. Either way we are back to a local area administrative body, much the same as exists today; so what is new?
On the estuarial problem I think that the Government have to think it out extremely carefully, and there ought to be a requirement for estuarial ports to operate a pilotage authority through one body; otherwise I can see ourselves getting into all sorts of problems.
I have spoken long enough and the hour is late. I shall sum up. Are the Government not being a little too hasty in effectively washing their hands of pilotage by handing over responsibility to the ports and in so doing angering the pilots who have already been forced into joining the Transport and General Workers' Union by the uncertainty of it all, and creating at the same time the possibility of environmentally unacceptable hazards? Safety of navigation should, in my opinion, be a Government responsibility with some sort of overall control, be it under a Trinity House board, beefed up by independent government nominees, as has been the case most successfully with the Lighthouse Board, or perhaps some newly formed independent quango that has authority for overseeing compulsory pilotage rather than just having an advisory capacity.
Everyone agrees that there are anomalies, but these can be rectified without major legislation; in particular, the question of pilot costs, to which the noble Lord, Lord Walston, alluded. I think it is not right that the smaller ships should, in effect, be subsidising the larger ships. I think it should be the other way round, if anything. I have seen the proposed legislation described as leading to the total decimation of pilotage as we know it round our coasts. Above all, pilots do not want to become employees of the ports. They are proud of the quality of service they offer, and any move in that direction would seriously affect their morale. For instance, they would not be able to give independent advice any more to a master because they would have an authority looking over their shoulders.
One final word: let us not forget, before contemplating sweeping legislation of this sort, that pilotage costs amount to about 1 per cent. of a large ship's running costs, and slightly more for a small ship, and that UK shipowners provide only about one seventh of the earnings of UK ports. Any savings in pilotage costs, if indeed they do come, will benefit competing foreign ships just as much. Tragically, as we all know, our merchant fleet is continuing to decline, and it would indeed be ironic and I think tragic if by the time the proposed new legislation comes into force those shipowners who are pushing so hard for it at the moment had all but disappeared and the whole thing had been for nought.
10.20 p.m.
Lord Kennet: My Lords, I think that on the whole I agree with the approach of the noble Lord, Lord Greenway, to this matter. The field is confused, like many long-standing British arrangements, with lots of holes in it. I propose to ignore the small print, if I may.
388
Government departments have a great tradition of coping with the small print once they get the principles right. I want to concentrate on the principles. We have all said how old Trinity House is and what a splendid institution it is; but let us go further back. One has to be historical in a debate of this sort.
Once upon a time, there were no pilotage arrange-ments at all. Ships then either did not have pilots and depended on the chance fact of whether or not their masters knew the way in; or the pilots they had might be honest or they might not. British sea lore abounds in stories of crooked pilots, wrecker pilots, murderer pilots, drunk pilots, thieving pilots. The time came in the 16th and 17th centuries when seafarers realised that this was not good enough and, with a great effort, the country got together a national system and called it Trinity House. It needs to be carefully looked at to see whether it is a good idea to get rid of that national system or whether to do so might risk our falling back into a modern version of the situation which existed before it was there, a kind of computerised jungle of cutting legal corners.
Pilotage is there for safety. It is there for the safety of the ship piloted and other ships and the crews of all ships involved; for the safety of the beaches from pollution and of the townsfolk from fire; and all the other things. We are talking about the right way to handle safety. I believe that competition between commercial enterprises in charging for safety is a dangerous course to take. The noble Lord, Lord Walston, has given us the figures which show that the ports compete with their pilotage charges. We know it and it is a great source of worry to us. It must be a very real element in the choice of a shipper in deciding which port to send his cargo to. This brings in the question of compulsory pilotage. There are ports which have compulsory pilotage and ports which do not. There are bits of ports where pilotage is compulsory and bits where they are not; and, of course, if this all goes to port control the variations are going to increase.
I was very much impressed to read in the briefing that we got from all the contending interests that masters—some masters, at any rate—favour compulsory pilotage and want to see an extension of it in order to prevent penny-pinching owners from telling them they must not take a pilot. Of course, British sea lore is also full of the character of the penny-pinching shipowner. We know all about him from the 16th century and 17th century onwards and we can go back before then to Roman literature to find stories about him. He will be there if circumstances allow him to emerge once more in the modern age.
I think we have to be careful not to permit the creation of regional marketplaces in safety; for this is what it is going to be if a freight-holder says, "I want this cargo to go to Southeastern England." Then he or somebody will look up all the ports and see what the rates are and see whether pilotage is compulsory. He will tell his master what to do, without perhaps too much regard as to the master's own capabilities and that will head straight towards a decrease in safety, which it is the duty of governments to provide in one way or another. My principle here would be this. Do not hand safety and pollution control to competing commercial concerns.

389
We see the same thing at the moment in the water industry, where there is or was—I hope was—the zany proposal in the water privatisation Bill to allow the new private companies that are to be set up to administer their own safety and pollution controls. As so often these days, the picture at the end of the line is that of abolishing the Government themselves and allowing everything to be settled by commercial interests, in forgetfulness of the fact that once upon a time indeed we did not have a government and it became very necessary to set one up. And great benefits flowed from the habit of having a government.
I would say that a para-state organisation like Trinity House is in a rather analogous situation to the Government. Let us not see just another bit of the dismantling of state or pseudo-state institutions on doctrinaire grounds. I hope the Government will get hold of the principle that safety is not for sale and not to be gambled with. If they cannot manage a European regulation about this—and 1 dare say that might indeed be difficult in the present state of European consciousness in these matters—let them not lightly throw away the perfectly good national one which they already have.
10.26 p.m.
Lord Wilson of Rievaulx: My Lords, as an elder brother of Trinity House of some 18 years' standing—although nothing like the period served by my noble friend as an elder brother—I find it difficult to understand how pilotage affairs have been allowed to deteriorate to such an extent that a Green Paper became necessary, and why, in preparing it, the Minister's predecessors and their officials did not see fit to consult Trinity House as the pilotage authority responsible for half the pilotage in this country and with experience going back literally for several centuries. When I was a Minister, officials used to take pride in presenting unbiased facts on which proper judgments could be made; but in this case it is clear that, while the ports and the shipping industry were very properly consulted, no one saw fit to confirm the facts with the principal pilotage authority, Trinity House.
If at any time a port has been dissatisfied with any aspect of its pilotage service, it has always been able to voice that dissatisfaction through the local Sub-Commissioners of Pilotage, among whom it has always had representation. If it could not obtain satisfaction through that body, it could always appeal to the Minister under the provisions of the Pilotage Act 1913 or, more latterly, to the Pilotage Commission.
The root cause of all the present problems about which the shipowners have joined with the ports in seeking re-organisation has been the agreements those very same shipowners made direct with the pilots in the years following the so-called Letch Agreement of 1957, to the total exclusion, and ignoring the advice, of the pilotage authorities. Now it is clear that the pilots have been much better at negotiation than the shipowners: hence the latter's chagrin.
Until the shipowners repudiated the Letch Agreement in August last year, something clearly needed to be done; but I am surprised that it is this Government, under their present leadership, who not
390
only seek to curtail private enterprise in pilotage but who dream up the "sledgehammer of the Green Paper", as somebody called it, to crack what is after all a very small nut—so small, in fact, that since the shipowners took themselves out of the arena of pilots' pay and conditions Trinity House has already been able to make considerable savings (indeed, up to 15 per cent. in one port alone). Why are the Government not giving them the chance to show what else they can now achieve?
All Members of the House will know that Trinity House goes back a very long way in our history. It is one of the oldest of our English corporations, founded by, I think, King Henry VIII in 1514, and its responsibility covers England and Wales; the Channel, of course; and I think it still has responsibility for Gibraltar. It acts, and has acted, as nautical assessors in this House, in the Admiralty Division of the High Court and in the Court of Session in Scotland, as well as in the other houses established under ancient charters covering Hull, Newcastle and Leith.
Because of its centuries of care, its constant insistence on modernisation and the lead it has given for centuries virtually all over the workd—to developing nations as well—it has earned and deserves the full backing of Parliament, and, above all. the power to carry out its many duties, particularly in the creation of one of Britain's greatest achievements—the power to give a lead to the world in saving life at sea.
10.31 p.m.
Lord Strathcona and Mount Royal: My Lords, we have to be grateful to the noble Lord, Lord Shackleton, for giving us a very clear introduction to a subject which I personally find gets more and more complicated the more I go into it. We are particularly grateful to him for flushing out his colleague, an ex-Prime Minister and an ex-Board of Trade Minister, who gave us a particularly robust performance.
I have to declare an interest—it is an honorary interest, I hasten to add—in that I succeeded Mr. Callaghan as chairman of the UK Pilots Association. So I think I can say that this is a fairly cross-party affair. Obviously I am not going to attempt to speak for the UK Pilots Association, and even if I were the last thing I should wish to do is to defend any restrictive practices which it might be alleged they exploit. I happen to think that they do not. Further-more, there is no evidence that I have seen which demonstrates that they do. But I believe that there are quite a number of people, who should know better, who labour under that kind of illusion.
Pilots have agreed for a long time—and it has been said several times already this evening—that reorganisation is needed. They have done their best to co-operate to help reorganisation, even when such things as the admission of EC pilots have clearly not been in their own direct interests. Clearly they have attempted to mitigate any damage to their employment that there might be, but they have attempted to co-operate wholeheartedly. Here again they too, I think, felt offended, if not outraged, that the Government were so plain silly as not to consult with another authoritative body before they produced the Green Paper. However, that point has been made often enough.

391
I think it was the noble Lord, Lord Greenway, who pointed out that the origin of the muddle we have got ourselves into is the legislation which went through on the very last day of the Labour Government in 1979, in spite of grave misgivings expressed at the time by a number of organisations and, most particularly, Trinity House. Many of our troubles stem from that ill-discussed piece of legislation having gone through on the nod. In particular, a toothless Pilotage Commission was created and, so far as I can make out, almost all the advice that they have tendered to the Government has been consistently rejected by successive Ministers. But we do not want to exaggerate the need for reorganisation. The fundamental foundations of our pilotage system remain extremely sound and they have been and can be adapted to changing circumstances.
We have thrown a few brickbats at the Government and I am going to throw a few more in the next few minutes; but I must congratulate our new Minister in this House. He has made great efforts to redress the seven years of neglect of his predecessors since the 1979 Act was passed.
Everybody agrees that the underlying principle in the Green Paper of devolving authority to the ports is both attractive and logical and it receives widespread support; and of course it is consistent with the declared aims of this Government to decentralise decision making, even if some of the metropolitan counties might say that they have rather funny ways of showing it at times. They believe in giving the freest possible rein to market forces. The trouble begins with the detailed applications of the principles. I believe that the Government would have quickly discovered the kind of problems that were going to arise had they consulted more with the responsible authorities before they produced the Green Paper, but that is water under the bridge. I suspect, however, that the Government and ports may be in that dangerous situation of not realising how little they know. That is the beginning of knowledge in a complicated subject of this sort.
I believe that the Green Paper proposals are in danger of throwing out the baby with the bath water in the pursuit of the chimera of lower costs. I fear that the General Council of British Shipping which, as has already been said, speaks for only one-seventh of those using the ports, may have led the Government astray. I hope that it is seeing already and will see in the future the error of its ways.
As the noble Lord, Lord Kennet, was saying, looking back at history pilotage originated as a freelance service which was valued by shipmasters. One of the main criteria has always been immediate on-call availability which has been considered essential, particularly in cases of compulsory pilotage. Pilots are specialised, skilled people offering up-to-date practical knowledge of the seabed, the tidal conditions the traffic movements and the communications. They are skilled tug handlers and they are experts in berthing problems. In this way they contribute not only to the peace of mind of the shipmaster but they contribute, as has been said several times this evening, to public safety and to the safety of navigation of other vessels and to the keeping
392
open of the confined waters around our ports. The knowledge that there is a pilot on board another vessel is a great comfort to other professionals. The services of pilots become particularly important when the going gets tough. This is especially appreciated by the master of a necessarily cost-effective thinly manned ship which may be arriving in difficult areas of navigation after a tiresome—literally tiresome— passage in periods of high winds and poor visibility. So there is an element of insurance in making available a pilotage system, and that inevitably means that you must pay for something that you do not necessarily use all the time.
The provision of adequate coverage inevitably adds to expense. This is emphasised by the fluctuating nature of the demand for pilotage services. I have been told that in Felixstowe, for example, the number of ship movements can fluctuate between five ships to 25 ships in one day. There has to be pilotage cover for the 25-ship situation.
In moving on to the question of costs, it seems to me useful to examine just how much pilotage contributes to the overall cost of bringing a ship into port. I hope that the Minister can give us some guidance on this because there are a great many figures kicking around. I was given an interesting statistic recently. It was suggested that a large container ship costs 55,000 dollars a day to operate. That is about £1,500 an hour. The pilotage for a berthing was quoted at £250. I calculate that to be about 10 minutes' worth of the daily operating cost. So if the pilot saves that ship 10 minutes he has more than earned his fee. On the other side of the coin, if that ship is kept waiting a grave penalty is incurred.
Admittedly, that is possibly an extreme case of a very large veseel, but I have also seen a Canadian study which suggests that pilotage costs account for 0.1 per cent. of port costs overall. I am not suggesting that savings are not worth seeking, and I am certainly going to support anything which helps the competitive position of our British ports; but it seems to me that we should be wary of a relentless and unreasoning pursuit of hypothetical and unproven cost savings at the expense of efficiency, safety and the disruption of the working lives of dedicated professionals.
As has been said, the Green Paper suggests that a major objective is cost saving; but it is up to the protagonists of the Green Paper proposals to demonstrate in detail just where they think such savings are to be made. It may be that the Minister hopes to reduce his own departmental costs. Perhaps he could start by telling us what those departmental costs are at the moment so that we can consider the validity of those arguments. Certainly those to whom I have spoken have suggested that most of the proposals are likely to increase rather than decrease costs.
Mention has already been made of the Trinity House fear that there will be a loss of flexibility in the deployment of both men and materials which will push up costs if coverage is going to be maintained in smaller divided areas. The same applies to insurance which can be spread by a larger organisation over a wider base. I may have the opportunity in a moment to mention the point made by the noble Lord, Lord

393
Greenway, on the added responsibility that ports will be taking on if they become directly responsible for pilotage in new areas and the insurance costs of that, which I suggest are likely to be considerable.
In spite of what the ports say, I think that most of us believe—and I think that the noble Lord, Lord Kennet, was suggesting this—that a competitive regime will make co-operation more difficult rather than easier. I have heard it said that there is no way in which Dundee will provide Perth with pilots if it is taking away business.
That leads me to the question of the employment status of pilots. This has been a long-running bone of contention since the publication of the Green Paper, and it is a matter of great pride to the pilots, who believe that it is both efficient and cost-effective. It seems ironic that we should be seriously discussing the question of moving pilots from a self-employed basis to an employed basis just when the Dutch, who are no mean seamen, are proposing to put their pilots into the private sector.
The direct employment of pilots, I understand, has been tried at Sullom Voe. I think that the Minister said to me that he thought it was a great success. I hope that, since he said that, he has heard from the pilots, because that is not the message that I have been receiving.
Surely nobody would dispute that, other things being equal, the direct employment of a labour force must increase salary costs by a substantial proportion in terms of national insurance and other adminis-trative overheads; so where are the cost savings on the pilots' side to be made? Are the pilots going to earn less? I do not think that they would be very enthusi-astic if they were told that. Nor do I think that their average earnings, which I believe are of the order of £13,000 a year, are an outrageous overpayment for skilled, dedicated men taking on a high degree of responsibility. Are we going to increase their productivity by extending their working hours? Some districts—the Humber is one—are currently considerably undermanned, and pilots are putting in very long hours.
Furthermore, one has to bear in mind that, because no pilots have been recruited since 1979 owing to the uncertainties, the pilots are not a young workforce any more. It may be that productivity can be increased by improving the ratio of waiting time to actual time spent during and at pilotage. I should have thought that it is likely to be more difficult if one has a multiplicity of small ports than if one has a larger area over which one can deploy the workforce effectively.
Here again, it will be found that the small ports inevitably will have a higher administrative overhead to support the pilots if they run a separate organisation, with all that that implies. Clearly one could reduce the cost by reducing one's willingness to cover peak demand. That would be a very radical departure, and furthermore I suggest that it would offer a dangerous possibility of adding to the cost by keeping ships waiting. The question of employment status is tied up with the matter of numbers. I fear that the noble Lord, Lord Walston, has been misled somewhere along the line.
394
But before we come to the specific question of how many surplus pilots there may or may not be, I should like to deal with the question of self-employed status, which the pilots have always contended is heavily circumscribed by the question of proper numbers of pilots as laid down in the regulations. It is a complicated question which I do not think is worth expanding on tonight, but with the greatest of sorrow I have to tell the Minister that the pilots have a cynical view of his ministry, and I believe that they have good reason for it.
When we were discussing compensation for loss of office the Government spent a large sum of money on commissioning the expensive Montagu report, which again made some rather wild assumptions about the number of surplus pilots that there might be. When those negotiations were taking place the Government were adamant that there was no way that they would contribute a penny in compensation for loss of jobs by self-employed people. One comment made about that by the pilots was: "It's a funny old thing, but they do not say that to the farmers, though there are more farmers than there are pilots, because they are just as self-employed as we are. But then, there are more of them and they are all thought to be Government supporters".
So the 1,300 pilots concerned felt that they were an oppressed minority. However, more recently they said: "Okay, if we are going to be self-employed, let us have the benefits of the tax status of the self-employed". What happened? A Member in another place received a letter from no less a person than the Prime Minister herself in which she referred to the pilots as a profession which,
"has few of the characteristics of self-employment".
One can see from where these two incompatible statements come. If one looks at the brief that has been issued in the last two or three days by the ports themselves, it will be found that on page 3 they speak of,
"very generous terms for self-employed persons",
and on page 8 they make precisely the same point as the Prime Minister made in her letter when writing to the Member of Parliament. In other words, they put the two contradictions in the same document. Does one wonder that the pilots, who have always been proud of their independent status, have felt constrained to go off and join the Transport and General Workers' Union?
There is also the question of the Government having said that compensation for early retirement has been settled. From talking to the pilots I am not so certain that this matter is settled. Certainly the pilots were very reluctant to accept the proposals that were made, and they feel that it is unjust that they should have to accept the possibility of compulsory early retirement when this means handing in their licence, which to them is their main document which secures them employment. I should be very interested to learn from the Minister whether his understanding is that this is a possibility which is now accepted.
If we again consider the present situation, it seems to be wholly consistent with what the Government are seeking in so many areas; it is simply no ship, no pilot, no money. Payment by results, we used to call it, and

395
a very satisfactory and fair system one would have thought it was, too. As somebody has said, the regime which surrounds the employment of pilots would be envied by many an industrialist.
We have talked about numbers, and there is no doubt that, if there was a change in the compulsory regime, as is postulated in the Green Paper, the numbers of pilots required would probably be substantially reduced. But I have never seen any comprehensive demonstration that there is this great number of surplus pilots. I do not dispute that there is a surplus in the Clyde and in the Mersey, but there is a shortage in the Humber and in London. If we could just get the regime tidied up, there is considerable hope that a number of those pilots could be redeployed. At present, the uncertainty is holding up any possibility of pilots being transferred from one district to another. This is another penalty of the delay.
The General Council of British Shipping is probably more responsible for that unhappy situation than the Government. Its baleful influence has held up all progress over a long period of years. My experience of the British Ports Authority recently has been that it is not very much more helpful. I am not sure whether it is unaware of the problems which are about to be landed on its plate or whether it feels that if it waits long enough all the pilots will be unemployed and it can then take them on on whatever terms it pleases to impose on them. I hope that the position is not as cynical as that. Both the GCBS and the British Ports Authority declined to come recently to a conference arranged by the British Maritime League. I can only think that the reason they did not come was that I had been asked to chair the conference.
The Green Paper mentioned in a permissive way the problem of ports in estuaries, which has already been touched on by a number of noble Lords. I am afraid that I have already chattered on unduly long. But we have to consider what is to happen in the 14 ports in the London area, stretching from Felixstowe down to Folkestone. Are we to have 14 pilotage authorities? How are they to co-operate? If they do, shall we not end up with something similar to the existing pilotage committees? How are they to relate with the conservancy authorities, the quay owners, the harbour authorities and all the other people involved? It seems to me that we shall circle back to very much the same situation as we have at present. Do not let us run away with the idea that this is a small problem. Something like two-thirds of all the pilots work in ports which are part of estuaries.
The noble Lord, Lord Greenway, referred to the legal question. That is addressed in a large paper from the College of Maritime Studies in Warsash. It puts together the proposal for the direct employment of pilots with the direct responsibility of ports for pilotage. At the end it suggests that the implications are such that,
"Harbour authorities will clearly be deterred from providing pilotage services in any area outside their harbour limits".
We have already touched on safety. It seems odd to legislate in great detail as to who should command a ship at sea and then apparently abandon all control once the ship comes into a pilotage area. There is no question of who should exercise compulsion; we are
396
giving up any control over the qualifications of the pilot. If it were asked, I cannot believe that the CAA would be happy about that in its medium.
Furthermore, the commercial pressures have already been referred to by the noble Lord, Lord Kennet, and others. Surely we need some kind of oversight as to what will happen to ships carrying dangerous cargoes; for example, liquid natural gas carriers. We should remember the tanker at Bantry Bay. We do not even know what is inside a container on a container ship.
If we do not have a central pilotage authority, could we not have some kind of appeal to the Health and Safety Executive, or could safety not be made a role for Trinity House which has such an excellent record in such matters?
Similarly, what about pilots' qualifications? Will they be left to a free for all? Will that not make it very much more difficult to transfer pilots from one area to another? Will pilots' confidence not be eroded if they do not know about the competence and training of a pilot on another ship?
Clearly small ports would need standards different from those of large ones. Are we to abandon all standards? I should have thought that the ports would want some body to run their examinations and set their standards. They have a body already. What is the point of doing away with it and creating a new one?
Whenever we examine these questions, we are driven back to some kind of national pilotage body. One at least exists in the shape of the Pilotage Commission. Surely that should be made the authoritative body with power. That would take the onus off the Minister, which presumably is what he wants. That would greatly simplify the many appeals which are constantly being made under the present procedure.
The other body, as its vociferous proponents have mentioned this evening, is Trinity House. If one had a blank sheet of paper I doubt whether one would create Trinity House, any more than one would create the Royal National Lifeboat Institution. It would be even more dangerous to suggest that we should give up the RNLI than it is to attack Trinity House. They both do fine work. Trinity House is there and willing to work. It seems crazy not to put it to work even if we have to ginger it up a little in the process because we believe that it has been there too long without someone changing it. The noble Lords, Lord Shackleton and Lord Walston, discussed that point earlier.
Finally, I shall return to a point made by the noble Lord, Lord Swinfen. I believe that there has been a lamentable lack of multilateral discussion with all the bodies concerned. I think that is the reason for many of our problems. It is no use the department talking to all those organisations one at a time. It is no use having submissions in response to the Green Paper. It is no use those bodies talking to one another. A collective discussion is needed.
The Minister must knock some heads together. He has come in as an energetic young man and I sincerely hope that he will go in for a major head-knocking operation before he produces his White Paper. Like the noble Lord, Lord Swinfen, I think that he may be

397
agreeably surprised to discover how much agreement there is among the various bodies concerned, and I wish him the best of luck.
11.5 p.m.
Lord Underhill: My Lords, we have had the advantage of hearing views based on great experience, not least from my two noble friends who are elder brethren of Trinity House. I hope that they will not be too disappointed at the comments that I am going to make. 1 cannot claim to be experienced in this matter, but I have been helped by the Government's Green Paper and also by the report of the Transport Committee of another place, to which no one has referred, and the Government's response to that report. I have also read the two briefs kindly prepared by the British Ports Association and by Trinity House for the debate.
Noble Lords have indicated the varying views of different bodies. I wish to indicate a possible conflict of views on certain points. Quite rightly, tribute has been paid to Trinity House for the high standard of skills it displays and the preparedness of our pilotage service. I was intending to ask what use will be made, if there is to be legislation, of Trinity House and its vast expertise? I was therefore absolutely shocked and amazed to hear my noble friend Lord Shackleton suggest that Trinity House had not been consulted in the compilation of the Government's Green Paper, particularly as I see that the Government's response to Commons recommendation Number 10 states that the Government will continue to have discussions with Trinity House on how its considerable expertise could be usefully engaged in the new regime. I hope that the reference to continued discussions is a correct statement in the light of what my noble friend Lord Shackleton has said about there having been no discussions before the Green Paper was issued.
The Green Paper suggests that the organisation of pilotage is cumbersome, complicated and has remained virtually unchanged since the Pilotage Act 1913. We have the view of Trinity House, as expressed by my noble friend, that the need exists for amendment to pilotage law but that no one knows the problems better and what should be done than Trinity House. The British Ports Association says that the pilotage service is obliged to rely on outdated and anachronistic legislation. The general view of the report of the Commons committee is that reorganisation is necessary. The committee recommended that a review of the existing rules and practices should be undertaken as a matter of urgency. There seems to be general agreement on the need for change of some kind.
The basic argument is whether the present arrange-ment of pilotage districts, each responsible to a pilotage authority, with the districts and their composition set out by orders approved by Parliament, should continue or be replaced by an arrangement whereby responsibility for pilotage is placed on harbour authorities. The Commons committee and the ports association agree with that change of responsibility. But the view of Trinity House, set out in section 6 of its briefing note, after referring to the Letch Committee of 1957 and the establishment of the Pilotage Commission in 1979, concludes:
398
"Why risk a third failure now with such an important national service? Leave well alone for another five years and then make a sensible decision based on proven facts, not muddled half truths".
On the other hand, the British Ports Association, in the final paragraph of its comments on the Trinity House proposals, recognises that Trinity House has had many years' experience as a pilotage authority but states that changes are clearly needed and that pilotage is fully within the competence of harbour authorities to administer.
The British Ports Association claim that bringing the pilotage service under the management control of harbour authorities will be a flexible system and will lead to considerable improvements in the adminis-tration of the pilotage services without any corresponding diminution of safety standards. The noble Lord, Lord Strathcona, has put the view of the United Kingdom Pilots Association. I note that their memorandum stated in paragraph 9:
"Every independent or fully representative objective and in-depth study of pilotage between 1836 and 1984 has come to broadly the same conclusions, that is, the desirability of a central authority and the necessity of qualified compulsory pilotage regimes".
It also expressed dissatisfaction (in fact, strong opposition) to the Government's proposals as leading to,
"fragmentation of administration …and the possible introduction of non-compulsory regimes".
The view of the Opposition is that it would not necessarily oppose a transfer to harbour authorities, but we would want to see very carefully exactly what proposals are put into the Bill and exactly how the matters are to be worked out. We would also want to see how far the expertise of Trinity House would be used in any change of legislation.
There appears to be a general consensus that there is an excess in the number of pilots, and suggestions that in many cases there is low productivity. This, as the noble Lord, Lord Strathcona, said, opens up the question of the status of pilots' employment. Trinity House argue that a 1965 ancillary agreement laid down hours of duty per annum per pilot, and in effect ended the self-employment classification. The British Ports Association regard pilots as being quasi self-employed but licensed.
This opens up the important question to which the noble Lord, Lord Strathcona, devoted a fair amount of attention. If the number of pilots is to be reduced, what will be the basis of compensation? The Government's consultative document says it is clear that the reduced proper numbers of pilots would depend on implementation of a scheme to compensate redundant pilots on acceptable terms. As recently as 23rd May a departmental press notice said that there was an obligation to ensure that the pilots are fairly treated.
In 1982 the Pilotage Commission recommended the Secretary of State to promote a scheme for costs to be borne equally by the Government, shipowners, and the pilots. The Commons committee proposed that the Government should share in compensation costs. Unfortunately, the Government's Green Paper asserts that the Government held—and still maintain—that there is no justification for any public funds being used in this way. The Government consider that pilotage should be treated as one of the range of ancillary services provided for vessels using a port.

399
Again on 23 rd May this year the Secretary of State announced agreement in principle on a compensation scheme which had been reached between the British Pilots Association and the Ports Association, but that the General Council of British Shipping had not been prepared to agree with these proposals. But the Secretary of State has accepted the proposals, even though the General Council of British Shipping will not participate in them. I think that is deeply regrettable, and one would like to see a fair compensation scheme freely accepted by everyone and in which the Government would play their part. If the Government are going to introduce legislation to curtail the number of pilots because of the facts of the situation, then it seems that the Government should be prepared to participate in a compensation scheme.
The Government made clear as recently as 23rd May that legislation to transfer pilotage to harbour authorities will be introduced as soon as possible. The noble Lord, Lord Strathcona, made reference to this. If we are to have legislation, it would seem that the future and the position of the Pilotage Commission must also be determined in that legislation. It is also clear in the light of the various reports that legislation must clarify another important question; that is, as to whether there should be particular shipping areas, or classification of ships and cargoes, for which compulsory pilotage will be required. I have grave doubt whether this is a matter that could be left for the sole decision of the harbour authority, as is proposed by the Government.
It is also doubtful whether a harbour authority should have the power to issue pilotage certificates. While we can see the need for the reduction in the number of pilots, there must be a sound compensation scheme. We should like to see one agreed by all parties, but there are these other important questions which must be considered if legislation is to be introduced.
11.16 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, I, too, am grateful to the noble Lord, Lord Shackleton, with his great knowledge of the subject, for giving us the opportunity to discuss pilotage this evening. May I correct him on one point, when he said that I had just got under the wire by seeing Trinity House on Friday. I had a specific pilotage meeting with them in February of this year and I have met them on numerous other occasions, as has my honourable friend Mr. Mitchell, now Minister for Transport. There has been ongoing consultation with them.
I agree with my noble friend Lord Strathcona and Mount Royal that this is a complicated subject, and one on which we could spend many hours. It is also a subject which has been a source of controversy within the marine world for many years, and one on which strong and often conflicting views are held.
But one point on which I believe that almost all those involved in pilotage are agreed is that the administration and statutory structure of pilotage is in need of reform. The shipowners, the ports, the pilotage authorities, including Trinity House who operate 40 out of the 93 authorities, many of the pilots themselves, the Pilotage Commission and the
400
Government are all generally agreed that the adminis-trative structure of pilotage based on the Pilotage Act 1913 needs reform. This was backed by the findings of the Select Committee on Transport in the other place last year.
The difficulty, the same difficulty that has thwarted any successful reform in the past, is reaching agreement on what the reform should be. The noble Lord, Lord Wilson of Rievaulx, said that it was a small nut. But, my Lords, what a tough nut. It is almost uncrackable, as has been proved in the past, and perhaps it needs that sledgehammer to which he referred.
I shall not dwell on the reasons for reform: the breakdown of the policy established by the Steering Committee on Pilotage and the Advisory Committee on Pilotage, on which there was enormous consultation—and particularly the Advisory Committee on Pilotage, which was sponsored to a large extent by Trinity House—and which eventually led to the Green Paper. The Green Paper was intended as the basis for consultation, and therefore there was no consultation before it was published because that would have defeated its purpose. The consultation had been on the two committees, ACOP and SCOP, before, and therefore we came out with our thoughts which were for the basis of further discussion.
There was then the disappointment when my honourable friend Mr. Mitchell (when he was the Minister responsible for shipping) was unable, after much work, to finalise a voluntary compensation package. There was the inability of parties to agree on the simplest of pilotage orders. As your Lordships know, we hope to bring forward legislation at the earliest opportunity to simplify the present system and make it more workable, and not wreck it. The noble Lord, Lord Shackleton, hopes that this can be done without primary legislation, as do the noble Lords, Lord Kennet and Lord Greenway.
I accept that, in theory, much could be done by using the mechanisms provided in the present Act, for changes in pilotage orders and by-laws. Some of the present restrictive practices could even be removed without modifying by-laws and orders. History has shown that in practice the prospects of securing rationalisation on the scale that is needed, and with the degree of urgency that is now called for, are negligible. Under the present system responsibility for pilotage falls on committees made up from the interested parties, principally the pilots, shipowners and ports, and attempts to secure agreement on proposals which would significantly improve local pilotage arrange-ments have, over the last few years, proved largely abortive.
When proposals are put forward, they are subject to objection procedures, of which full opportunity is taken by anyone who sees his interests as even marginally affected. In the case of pilotage orders, unresolved objections mean that the order can take effect only after it has been subjected to special parliamentary procedure. Your Lordships will not be surprised that in these circumstances the pace of reform has been slow, if not imperceptible. As one small illustration of this, may I quote from the London Pilotage District the case of the Gravesend

401
demarcation rule, under which a vessel travelling up or down the Thames has to change pilots at that point. While this may have made sense when most ships were travelling long distances up the river, for a long time now most of the large vessels passing this point have been travelling to or from Tilbury Docks, just across the river. Nonetheless, ships still have to change pilots at Gravesend. In 1981 Trinity House brought forward a pilotage order to change the rule, but it was withdrawn following objections. Recently, another attempt to obtain the necessary order has been made by Trinity House, but I understand that three objections have been received from the pilots. I think this well illustrates the difficulty of carrying through even the most obvious improvements in productivity under the present legislation.
I think many would agree that the publication of our Green Paper, with the prospect it holds out of reforming legislation, has itself had the effect of eliciting a number of serious proposals for reform within the present legislation which would not otherwise have been thought about. The sea pilots of the London Pilotage District, one of the districts for which Trinity House is responsible, have given wide circulation to a pamphlet proposing major reforms, with substantial reductions in the number of pilots, which they say would be self-financing. They accept that the management of pilotage in the London district would be more effective if the main interested parties were not represented on the Pilotage Committee. They have accordingly offered to withdraw from it and this would have the effect of removing the right of shipowners to be represented on the committee. This would all be subject to the strengthening of professional management within Trinity House and an upgrading of management systems.
It could be argued as a result: why do we need legislation if arrangements like this can be made? The London district has a particular advantage in that a special fund has been built up for the compensation of surplus pilots. But the use of this fund requires the making of new by-laws to which other parties would be able to object if they thought the terms too generous. They would be able to object also to aspects of the proposed reform with which they disagreed or which they thought did not go far enough. Regrettably the history of the last few years discourages any confidence that the pilots' proposals would have any real prospect of success. Under the present legislation the pilots could decide at any time to change their minds and exercise again their statutory right to representation on the Pilotage Committee, which would have the effect of restoring the shipowners' right to representation.
I should be the first to argue against new pilotage legislation if I believed that the present system could be made to work and to respond to changing needs and changing patterns of trade. But the stalemates of the last few years have convinced me that it cannot and that there is no alternative to new legislation if we are to avoid further stagnation of the whole system of pilotage, which would be unhealthy for everyone.
One of our principal aims is of course to ensure that the cost of pilotage is no greater than is necessary to meet the demands of safety. I stress the word "safety"
402
as that has been raised by many noble Lords. It has been suggested that, far from reducing costs, our proposals to make the harbour authorities responsible will actually lead to an increase. I really see no reason why administrative costs should go up. Adminis-tration should be a good deal simpler when we have removed the complicated procedures of the present legislation, and there should be economies to be made from carrying out the work alongside the adminis-trative work which already falls to harbour authorities for their other functions. This point was mentioned by the noble Lord, Lord Walston.
It is also argued that our proposals mean that, in the short term, there will be very heavy costs arising from the redundancy not only of the pilots themselves but of those at present employed in the pilotage service, and some alarming figures have been quoted. But these figures assume that all employees will be made redundant. However, many of them, particularly those in the boat services, are engaged in work which will still be necessary when pilotage is the responsibility of the harbour authorities. Harbour authorities continue to employ a high proportion of them. Of course, some jobs may disappear, but I do not believe that the numbers or the cost will be as great as some critics have suggested.
There are also arguments that the employment of pilots will inevitably be more expensive than the present system of self-employment. If that is indeed so, I shall be surprised if harbour authorities go down that road rather than seek agreement on some form of self-employment which our proposals will leave it open for them to do. Let me make it perfectly clear: our proposals allow for ports to employ pilots, contract with self-employed pilots, or employ an agent such as Trinity House who can either employ pilots or contract with self-employed persons. In my discussion with the interested parties I see a useful role on an agency basis for bodies such as Trinity House who with their wide experience and unshackled from the present restrictions should be able to provide a competitive and competent service.
However, if a port wishes to employ pilots, the reality is that it is perfectly possible to reconcile their patterns of working with employed status and to ensure that methods of working are efficient and cost-effective. It is already done in this country and many other countries. My noble friend Lord Strathcona brought to my attention the question of Sullom Voe. I shall be looking into this matter when I visit Sullom Voe in August, provided the House is not sitting then. Looking at the lamentably low productivity achieved in many pilotage districts at present—only two acts of pilotage per pilot each week in some cases—it defies belief that improvements cannot be made.
Far from increasing costs, we believe that our proposals will reduce them, chiefly the opportunity they provide for reductions in pilot numbers, which will be made possible to some extent by improving productivity, and also by a fresh look being taken at compulsory pilotage requirements. These points are in addition to the possible economies in administration which I have already mentioned.
Lord Shackleton: My Lords, may I interrupt the noble Earl, since I have no right of reply? Has he any

403
figures of any kind to back up his assertions? Have any estimates been made?
The Earl of Caithness: My Lords, I shall be coming on to some figures. As I mentioned earlier, this is such an interesting and complicated subject that we could bandy figures all evening. If I do not cover the specific points the noble Lord requires, I shall write to him further on this matter. This will be of major importance to our shipping industry, as the noble Lord, Lord Greenway, mentioned in his excellent speech.
I should like to spend a few moments on these important points. The great experience and expertise in pilotage which Trinity House has built up over a period of very many years is recognised beyond this country. I think we would all regard it as a waste of a valuable asset if Trinity House's know-how and experience were to find no place in the future arrange-ments for pilotage and were to be dissipated. However, I do not believe that it would be right to use legislation to compel the harbour authorities to use Trinity House as their agents. I would urge the harbour authorities seriously to consider whether they can provide a pilotage service themselves more economically than Trinity House is able to do. I am sure that many will find that they are unlikely to be able to do so.
Trinity House and some of the pilots have also argued that pilots generally should remain self-employed. That word itself raises emotions, as was indicated by my noble friend Lord Strathcona and the noble Lord, Lord Underhill. I do not believe that it would be sensible for the proposed legislation to prevent the ports from employing pilots if that is what they wish. Also, I do not believe that a general system of self-employment would be acceptable to the pilots unless it was accompanied by a number of the statutory features which have contributed to the present stalemate in the reform of pilotage. The pilots would expect somethiing similar to the present system of appeals on pilotage charges and the same kind of security of employment that they have at present. But these are two of the very features which have contributed to the present deadlock.
If self-employed pilots have security of employment the other side of the coin is that, as at present, there is no means of reducing pilot numbers if demand reduces further. Another special compensation scheme might then one day have to be devised. Surely we must try to learn from the difficulties in which pilotage now find itself, and seek to avoid creating the same problems again in the future.
Fears have been expressed that, as a result of the harbour authorities' assessment of the pilotage needs of vessels using their ports, some areas at present subject to compulsory pilotage will no longer be so. I believe that this is a question which should properly be left to the harbour authorities to judge, and I do not believe we should shackle their judgment by requiring them to accept given boundaries which in some cases enclose vast areas of sea, and which often date back to the days of sail, where a harbour authority does not believe that compulsion over the whole of a present pilotage district can be justified, it will be open
404
to them nonetheless to provide pilotage on a non-compulsory basis for those masters who wish to have this assistance. I hope that answers one of the points put by my noble friend Lord Swinfen.
Finally, may I say that I am surprised that it is sometimes suggested that pilotage is not sufficiently important, in terms of the value of trade, to warrant the efforts we are making to reorganise it. That is certainly not the view of the shipping industry, who have for some time placed pilotage near the top of their list of priorities for reform. Pilotage charges vary from port to port and depending on the size of ship. I wonder whether my noble friend Lord Strathcona and Mount Royal has seen a survey carried out by the British Ports Association at a number of UK ports in 1982, which showed that for different types of ship at the larger end of the spectrum, pilotage charges amounted on average to between 5 per cent. and 24 per cent. of total port charges, excluding stevedoring. For smaller ships the costs are proportionately higher. Trinity House presented evidence to the Transport Select Committee in another place, which showed that at the ports of Shoreham and Par, pilotage charges ranged from 5 per cent. to 30 per cent. of ports costs, this time including stevedoring. If stevedoring is excluded the proportion will obviously be higher. These are averages and the cost can be even more significant. I have recently had quoted a case of a ship using a major British port, which had to pay pilotage charges which were some 30 per cent. more than the harbour dues and twice as much as the charge for towage. Even if such cases are regarded as exceptional, pilotage bills certainly matter not only in terms of the competitiveness of our ports and shipping industries, but also because of the extra costs they represent on our imports and exports. Any unnecessary costs on our imports and exports mean jobs lost in British industry.
Before I close, may I briefly answer some specific points that were raised by noble Lords? The first was raised by my noble friend Lord Swinfen, who asked about my advisers in the department. They may not be master mariners, but they are in constant touch with the marine world, with the pilots themselves, with shipowners, with ports and with Trinity House. Indeed I have seen all the parties who are interested in pilotage and I hope to have the opportunity before long of meeting them all again. As the noble Lord, Lord Shackleton, reminded the House, I saw Trinity House on Friday last week.
My noble friends Lord Swinfen and Lord Strathcona suggested that we should convene a conference and bash heads together, with representa-tives of the ports, the pilots and Trinity House, to discuss the problems we have been considering tonight. Discussions are already taking place between representatives of the ports and pilots as to how they will adapt to the new arrangements; but I am very ready to use my best endeavours to encourage the ports and Trinity House to consider together the implications of what we are proposing. If there is agreement that such a meeting would be worthwhile, I will gladly be there to chair it and use the good offices of my department. I can say that I am pleasantly surprised at the degree of unanimity between all those involved; and indeed my noble friend Lord Strathcona

405
said it was there if I dug deep enough. My Lords, I am digging deep enough.
My noble friend Lord Swinfen asked me about exemption certificates and whether they applied to the ship or to the master. The answer can be both. At present a qualified master or mate can be granted a pilotage certificate, which is in his name and allows him to bring in his ship without a pilot.
But there are also exemptions for vessels, and this takes me to a point made by the noble Lord, Lord Greenway. Under Trinity House by-laws, in the London district all vessels under 3,500 tonnes trading in the home trades are exempt from pilotage, regardless of the skill or knowledge of the master. This is a feature of the present system. It will be for the harbour authorities to decide whether it is a sensible arrangement for the future.
The noble Lord, Lord Greenway, told the House of the imaginary collision in an exercise which I witnessed today which was well outside the compulsory pilotage area. It was right in the middle of the Channel. Therefore, I believe that this was more a navigational problem than a pilotage one, though pilotage comes into it.
Lord Greenway: My Lords, I quite realise that point. But the sort of ship I was referring to can easily come into the outer approaches to the Port of London without a pilot, possibly under the new, proposed arrangements. Therefore, the danger would be much closer inshore than the exercise which took place today.
The Earl of Caithness: My Lords, the danger exists at present, because if a ship calls at Shoreham, it can go up the inshore traffic zone, even though it is a large tanker, and proceed beyond the Thames estuary and out the other side without having to take a pilot. So these are points that have to be looked at again. I agree with the noble Lord, but under the new proposals it is for the harbour authorities to be the bodies to look at them.
Lord Shackleton: My Lords, can the noble Earl tell us which harbour authority in the Thames area will do this?
The Earl of Caithness: My Lords, it will be a number of harbour authorities around the Thames estuary. But we hope—and I am about to make a comment on estuaries—that they will, in most circumstances, act in a unified fashion. This is important as there are special conditions that apply to estuaries. If I may refer specifically to the Thames estuary, the indications that we have had are that satisfactory arrangements can be reached. Nonethe-less, in case they prove to be difficult either at the start of the new regime or later, we propose that my right honourable friend the Secretary of State should be able to call for a scheme for the estuary, and he should have the power to direct any changes in the proposed scheme that he considers necessary. This, we believe, will be an adequate safeguard so that safety is maintained.
My noble friend Lord Strathcona and Mount Royal asked about the cost to government of the adminis-
406
tration of marine pilotage. At present some eight staff in the department spend more than half of their time dealing with pilotage at an estimated annual cost, including support services, of about £122.000 per annum. In addition, the annual cost of the Pilotage Commission is estimated at about £325,000 per annum, which has to be met by the industry.
My noble friend drew the attention of the House to the Dutch pilotage reforms. May I suggest to him, with his considerable experience in these fields, that it is very difficult to compare like with like when you are dealing with continental systems. I understand that the Dutch authorities will continue to set the level of remuneration for pilots, even though they are going to be classed as self-employed. So it will not be an identical system to ours, and a direct analogy cannot therefore be drawn.
Finally, perhaps I may correct my noble friend, who is normally 100 per cent. right. I think he said that there was a shortage of pilots in London. I believe it has already been suggested by the London sea pilots that their number should be reduced by about one-third over the next few years. So I believe that there is an excess of pilots in the London area. I apologise if I have not covered all the points—
Lord Swinfen: My Lords, I believe I am right in saying that over the next 10 years the number of London pilots will be reduced by some 60 per cent. through natural wastage, their having reached the age limit. Surely this means that they will need to recruit in order to keep up their numbers, even to the lower figure that my noble friend suggested was the right one.
The Earl of Caithness: My Lords, that is exactly one of the problems of the present system. The age structure in the London district is wrong. It is imbalanced. It is exactly the odd situation that the present laws provide for. In a district of the importance of London where new blood and new young pilots are needed the present system blocks the exit of old pilots who wish to take early retirement or leave the service. We hope that our new proposals will solve exactly these types of problems. If I have not covered any noble Lord's point, I shall read the Official Report with care as soon as it is printed and write to the noble Lord.
There is something of a mystique about pilotage. I have the greatest respect for the skills and responsibility of the pilot, and the fact that he not only has to but actually does work in all weathers and at any time of day or night. But there is no reason for this mystique to extend to the organisation and adminis-tration of pilotage. The problems of pilotage were new to me until recently. I have made a conscious effort to meet all the parties involved and I have listened to their views with great care. I share their concern for an improved system of pilotage and am convinced that it is right that pilotage services should become one of the navigational services for which harbour authorities are responsible. I was interested to come across a quote from the 1911 departmental committee on pilotage as follows:
"It is in our opinion not only in the interests of shipowners and pilots, but in the interests of the commercial community and the public generally that the law should be simplified and its adminis-tration made effective".

407
That sums up very well our objectives today, and we hope to bring forward before very long proposals for your Lordships to consider.

Mersey Docks and Harbour Bill [H.L.]
Reported from the Unopposed Bill Committee, with amendments.
Land Registration Bill [H.L.]
Returned from the Commons agreed to.
Commonwealth Development Corporation Bill [H.L.]
Returned from the Commons agreed to with an amendment and with a privilege amendment; the amendment ordered to be printed.

Parliamentary Constituencies Bill [H.L.]
Reported from the Joint Committee without amendment, and recommitted to a Committee of the Whole House.
House adjourned at eighteen minutes before midnight.

  SUDLEY ART GALLERY: FUNDING
  SUDLEY ART GALLERY: FUNDING
  METROPOLITAN POLICE: RECRUITMENT TIMETABLE
  METROPOLITAN POLICE: RECRUITMENT TIMETABLE
  REMAND PRISONERS: TIME IN CUSTODY
  REMAND PRISONERS: TIME IN CUSTODY
  MEDICINES: PRODUCT LICENCE (PARALLEL IMPORTS) SCHEME
  MEDICINES: PRODUCT LICENCE (PARALLEL IMPORTS) SCHEME
  SOCIAL SECURITY LEGISLATION AND THE BLIND
  SOCIAL SECURITY LEGISLATION AND THE BLIND
  THE PHIPPS RESPIRATORY UNIT
  THE PHIPPS RESPIRATORY UNIT
  ARMED FORCES AND ETHNIC MINORITIES
  ARMED FORCES AND ETHNIC MINORITIES