Sitting of 26 June 1986

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

PRIVATE BUSINESS
FELIXSTOWE DOCK AND RAILWAY BILL
Order for consideration, as amended, read.
To he considered upon Thursday 3 July.
TEIGNMOUTH QUAY COMPANY BILL (By Order)
SOUTH YORKSHIRE. LIGHT RAIL TRANSIT BILL (By Order)
BEXLEY LONDON BOROUGH COUNCIL BILL (By Order)
SHOREHAM PORT AUTHORITY BILL (By Order)
Orders for Second reading read.
To he read a Second time upon Thursday 3 July.
BLYTH HARBOUR BILL [Lords] (By Order)
Order for Second reading read.
To he read a Second lime upon Tuesday 1 July.

Oral Answers to Questions
  HOME DEPARTMENT

    Crime Statistics
    Mr. Frank Cookasked the Secretary of State for the Home Department if he will publish in the Official Report a statement of the clear-up rate for all crimes in each police force district in England and Wales in 1978 and in 1985.
    Mr. Pikeasked the Secretary of State for the Home Department if he will publish in the Official Report a statement of the number of crimes cleared up per police officer in each police force area in England and Wales in 1985.
    The Secretary of State for the Home Department (Mr. Douglas Hurd): Yes, Sir, but these figures do not take account of other important aspects of police work, such as crime prevention and public order, so they are of limited value as a measure of police effectiveness.
    Mr. Cook: I am grateful to the Home Secretary for his commitment to publish these figures. Nevertheless, will he concede that last year's clear-up figures show an appalling total of 2·3 million unsolved crimes? Does he accept that that figure represents an increase of 17 per cent. In
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    unsolved crime over the 1978 figure, which was the last year for which figures were published for the Labour Government? Does he agree that the only solution to this predicament is to recruit policemen who are trained with a genuine caring attitude towards society and an understanding of the needs of the community, rather than the quick resort to the baton round, the not shield and the water cannon?
    Mr. Hurd: The number of crimes cleared up by the police has been rising for some time. The number of cleared up crimes in 1985 was 1—2 million—an increase of 200,000 over the 1978 figure. However, as the hon. Member for Stockton, North suggested, the clear-up rate has been deteriorating for some time, but that deterioration started well before 1978. That is why I announced plans last month for a further increase in the police forces of England and Wales.
    Mr. Pike: Does the Home Secretary accept that as the clear-up rate in the Metropolitan police force area is only 18 per cent. compared wth 40 per cent. in other areas, that shows that the Government do not have the solution to the problem? How can the Conservatives say that they are the party of law and order when people outside this House believe that the Government are not able to provide sufficient police to solve crimes?
    Mr. Hurd: The public's confidence in the Government will be increased when they contemplate the alternatives. It is important to remember that the clear-up rate is much higher for offences of violence — about 73 per cent.—and lower for burglaries. That is why we place so much emphasis—I hope with the belated support of the Opposition—on crime prevention measures such as we discussed in the seminar at 10 Downing street on Monday.
    Mr. Robert Atkins: Is my right hon. Friend aware that a special team of police officers in Preston recently cleared up 500 crimes in three weeks and put 10 people in court as a result? Will he pay tribute to the great work done by the police force in Preston, not forgetting those who work on a day-to-day basis to contain the problems of crime, in addition to those in the special task force?
    Mr. Hurd: The Lancashire police force is extremely effective, and I am sure that it is especially so in Preston. Across the country, police force by police force the police are experimenting with ways of preventing crime and of catching criminals and bringing them to justice.
    Mr. Alan Howarth: Does my right hon. Friend agree that the Conservative party's strategy of promoting personal and family responsibility will ultimately be the best guarantor of law and order? Does he also agree that, notwithstanding the Labour party's newly avowed zeal for law and order, Socialist policies, of their very nature, tend to undermine its basis?
    Mr. Hurd: Yes, I certainly agree with that. We look forward to developing that theme in the months and years ahead. My hon. Friend referred in particular to attitudes among Labour Members. The best contribution that they can make to law and order is to do something about those in their own party who ceaselessly undermine the activities of the police.
    Mr. Alex Carlile: Does the Home Secretary agree that a good crime clear-up rate depends on the wholehearted commitment of senior officers to detecting crime and that

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    that commitment has been shown by Mr. John Stalker? Does he also agree that, unfortunately, one reason for Mr. Stalker's suspension is that, in showing that commitment, he recommended the prosecution of senior officers in the Royal Ulster Constabulary for conspiracy to pervert the course of justice? If he does not agree with those propositions, will he tell the House why Mr. Stalker has been suspended?
    Mr. Hurd: I am surprised that the hon. and learned Gentleman should get on to that tack, because he well knows, having served on the Standing Committee which considered the Police and Criminal Evidence Bill 1984, the care with which Parliament has established the procedures and responsibilities for investigating any allegations against the police, senior or less senior, and he will agree that such allegations should be seriously examined. He knows that Parliament has not given to me or to my colleagues in the Home Office any power to intervene in those procedures, until the point is reached when I have to decide, on appeal against any decision, that there has been a disciplinary offence. The hon. and learned Gentleman also knows that Parliament has establised the independent Police Complaints Authority to supervise police investigations of the kind to which he referred. I hope that in this case the procedures laid down by Parliament, with which the hon. and learned Gentleman is well acquainted, will be operated thoroughly and quickly so that the matter to which he referred will be cleared up.
    Mr. Franks: Is my right hon. Friend aware that at this very moment the chief constable of West Yorkshire is meeting the Police Complaints Authority regarding the deputy chief constable of Manchester? Does he agree that in the interests of natural justice some statement should be made by the Police Complaints Authority later today?
    Mr. Hurd: My hon. Friend knows the exact position. In view of the responsibility which I might eventually have as the appellate authority, I had better simply repeat that
    I hope that the procedures laid down by Parliament will in this case be operated thoroughly and quickly.
    Mr. Dubs: How can the Home Secretary say that the figures for the clear-up rate of crime have only a limited value when up and down the country they are of major concern to people who are suffering from the present crime wave? Is not the truth that, with two thirds of all crimes committed not being cleared up, the Government have a 65 per cent. failure rate? When will the Government get back to the rates pertaining in 1978?
    Mr. Hurd: The Labour Front Bench continually tries to promote the fallacy and persuade the country that crime was invented in 1979. The figures of recorded crime and the clear-up rates have been deteriorating for a much longer period than that. What distinguishes the two sides of the House is that we have put resources into the problem, that we have a coherent policy for dealing with it, and that we do not include within our ranks a minority of influential people who undermine the efforts of the police and respect for law and order.
    Mr. Mark Carlisle: Following the question asked by my hon. Friend the Member for Barrow and Furness (Mr. Franks), does my right hon. Friend agree that, while clearly any allegation against a senior officer must be taken seriously and investigated by the Police Complaints
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    Authority, nevertheless, to an outsider in this matter, there appears to be a degree of character assassination? Is it not essential that, if disciplinary charges are to be brought, they should be formulated rapidly and the necessary procedures take place, or, alternatively, that Mr. Stalker should rapidly be restored to his position?
    Mr. Hurd: As my right hon. and learned Friend knows, the investigation was set in hand by a decision of the Greater Manchester police authority and it has been placed under the supervision of the independent Police Complaints Authority. That authority, and now the chief constable of West Yorkshire, to whom it entrusted the investigation, has responsibility under the law for the investigation. For the reasons that my right hon. and learned Friend has given, and for other reasons, I agree that the sooner this matter can he cleared up under the procedures laid down by Parliament, the better for all concerned.
    Following are the figures.

    Clear-up rates for notifiable offences recorded by the police by police force area in 1978 and 1985 (excluding offences of criminal damage of value £20 or under)

    England and Wales

    Police Force Area

    1978 per cent

    1985 per cent

    Avon and Somerset

    42

    36

    Bedfordshire

    46

    37

    Cambridgeshire

    55

    40

    Cheshire

    59

    46

    Cleveland

    55

    37

    Cumbria

    54

    49

    Derbyshire

    45

    55

    Devon and Cornwall

    46

    46

    Dorset

    47

    40

    Durham

    51

    45

    Essex

    44

    44

    Gloucestershire

    51

    35

    Greater Manchester

    46

    32

    Hampshire

    46

    37

    Hertfordshire

    51

    52

    Humberside

    45

    40

    Kent

    40

    39

    Lancashire

    55

    47

    Leicestershire

    57

    45

    Lincolnshire

    57

    42

    London, City of

    23

    17

    Merseyside

    43

    35

    Metropolitan Police District

    21

    18

    Norfolk

    49

    41

    Northamptonshire

    50

    39

    Northumbria

    51

    46

    North Yorkshire

    52

    31

    Nottinghamshire

    49

    35

    South Yorkshire

    53

    48

    Staffordshire

    55

    52

    Suffolk

    55

    46

    Surrey

    49

    34

    Sussex

    56

    36

    Thames Valley

    43

    40

    Warwickshire

    46

    38

    West Mercia

    48

    45

    West Midlands

    34

    30

    West Yorkshire

    49

    42

    Wiltshire

    44

    39

    Dyfed-Powys

    64

    55

    Clear-up rales for notifiable offences recorded by the police by police force area in 1978 and 1985 (excluding offences of criminal damage of value £20 or under)

    England and Wales

    Police Force Area

    1978 per cent

    1985 per cent

    Gwent

    59

    56

    North Wales

    58

    45

    South Wales

    46

    44

    England & Wales

    42

    35

    Notifiable offences cleared up per police officer England and Wales 1985

    Police Force Area

    Number of offences cleared up per officer

    Avon and Somerset

    9

    Bedfordshire

    13

    Cambridgeshire

    11

    Cheshire

    11

    Cleveland

    12

    Cumbria

    11

    Derbyshire

    13

    Devon and Cornwall

    11

    Dorset

    11

    Durham

    13

    Essex

    10

    Gloucestershire

    8

    Greater Manchester

    12

    Hampshire

    10

    Hertfordshire

    12

    Humberside

    14

    Kent

    9

    Lancashire

    10

    Leicestershire

    12

    Lincolnshire

    10

    London, City of

    1

    Merseyside

    11

    Metropolitan Police District

    5

    Norfolk

    11

    Northamptonshire

    13

    Northumbria

    21

    North Yorkshire

    8

    Nottinghamshire

    14

    South Yorkshire

    13

    Staffordshire

    12

    Suffolk

    10

    Surrey

    6

    Sussex

    8

    Thames Valley

    13

    Warwickshire

    8

    West Mercia

    11

    West Midlands

    10

    West Yorkshire

    13

    Wiltshire

    10

    Dyfed-Powys

    9

    Gwent

    15

    North Wales

    11

    South Wales

    13

    England & Wales

    10

    Crimes (Firearms)
    Mr. Jim Callaghanasked the Secretary of State for the Home Department what has been the increase since 1978 in the total number of crimes in England and Wales in which a firearm was used.
    The Minister of State, Home Office (Mr. Giles Shaw): The number of notifiable offences recorded by the police in which firearms were reported to have been used increased from 5,672 in 1978 to 8,376 in 1984. Within these totals the main increases were in respect of robberies and offences of criminal damage.
    Mr. Callaghan: Is the Minister aware that the recent study produced by the Home Department into crimes of personal violence shows a dramatic increase in the number of crimes of personal violence related to armed robbery and a dramatic decrease in the number of those crimes that have been cleared up. Will the Minister tell the House of his ideas for changing the law to tighten up the availability of these weapons to criminals?
    Mr. Shaw: I agree with the hon. Gentleman that there has been a substantial increase in the number of armed robberies. Pistols are the largest used category of weapon in those offences — some 1,106 in 1984. The best deterrent to armed crime is the risk of detection and severe punishment, and that is why the police will continue to have our full support in their efforts to bring those responsible before the courts. That is also why we have announced in the criminal justice White Paper our intention to increase to life imprisonment the maximum penalty for carrying firearms in furtherance of crime.
    Sir William Clark: Does my hon. Friend agree that if capital punishment were to be reintroduced there would be a dramatic decrease in armed robbery?
    Mr. Shaw: I am aware that my hon. Friend and other hon. Members feel strongly about these issues. He will know, of course, that there is a case for the other point of view.
    Mr. Ron Davies: Will the Minister come clean on a point that I put to him in last night's debate? I suggested that there was a major loophole in the Firearms Act 1968 which allows any holder of a foreign passport to go to any gun shop, sports shop or gunsmith in Britain and, without restriction, buy any amount of shotguns or ammunition. Will the Minister confirm that that is the case? If it is the case, will he tell the House what he proposes to do about it?
    Mr. Shaw: It is the case that section 14 of the 1968 Act allows that. In the next review of firearms legislation, the 1968 Act will be one of the major pieces of legislation that we shall look at.
    Mr. Douglas Hogg: Will the Minister confirm that in cases where firearms are carried in the course of robbery, the judiciary has made a practice of imposing substantial prison sentences over and above those that the offences would otherwise attract? Does he agree that that is a highly welcome development?
    Mr. Shaw: I do agree; and it is essential that the public should see that those who carry firearms for whatever illicit purpose receive very severe penalties.
    Mr. Soley: The point made by my hon. Friend the Member for Caerphilly (Mr. Davies) is another example

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    of why we need a committee set up in the Home Office and not the rather feeble consultation procedure by which the Minister tried to calm his Back Benchers last night during the debate on the firearms order. When will the Home Secretary reply to my letter of 26 March, which suggested that this was precisely the sort of issue about which we could be forewarned if we had a committee of the type that I have described?
    Mr. Shaw: If the hon. Gentleman had allowed a reasonable time for responses to be made in last night's debate, he might have received a reply. I shall write to the hon. Gentleman.
    Mr. Thurnham: In view of the success of neighbourhood watch schemes in deterring serious crimes, would my right hon. Friend condemn those who criticise such schemes, especially the Labour-controlled Manchester City police committee?
    Mr. Shaw: I certainly would. My hon. Friend is right. There is no area of the country that can afford to have a police committee that takes a disinterested view towards the prevention of crime. It is absurd for the Manchester City police committee to publish a paper which is designed to undermine the authority of the police force.

    Fraud
    Mr. Clellandasked the Secretary of State for the Home Department if he has any proposals to improve the investigation of (a) local and (b) transnational fraud.
    Mr. Hurd: The report of the fraud trials' committee, under Lord Roskill's chairmanship, which we received earlier this year, provides an excellent basis for legislation and administrative action. We are now completing our consideration of the committee's many recommendations, including those affecting the investigation of fraud, and aim to bring proposals for legislation before Parliament in the next Session.
    Mr. Clelland: Will the Home Secretary explain why so little emphasis is placed on tax fraud compared with that placed on social security fraud? Is he not aware that the latest estimates put the amount of money lost through tax fraud at more than 35 times the amount of money lost through social security fraud? Yet, for every one person gaoled for tax fraud, 20 are gaoled for social security fraud. Is this not yet another sign that the Government have one set of rules for the rich and another for the poor?
    Mr. Hurd: No, Sir. That is a familiar charge, and I rebut it in a familiar way. If the hon. Gentleman tables a question to my right hon. Friend the Chancellor of the Exchequer, he will be told of the extent of the effort that the Inland Revenue is putting into pursuing tax fraud. As for fraud in a wider context, when the hon. Gentleman reads the Criminal Justice Bill, which we hope will be presented in the next Session, he will become aware of the rigorous and stern approach that the Government are adopting.
    Mr. Lawrence: Is my right hon. Friend aware that there is little or no support for the abolition of jury trials in fraud cases? Does he accept that the most effective measures that can be taken to put an end to fraud are to strengthen the size of the investigating police force, to bring in more financial experts to assist the police, and to improve the extradition procedures between friendly states?
    Mr. Hurd: My hon. and learned Friend picks out three admirable recommendations from Lord Roskill's report and puts his weight behind them. On extradition, I have already announced that we intend to act on the lines set out in the report. Trial by jury of complex fraud cases is one of the tricky matters on which we have to complete our consideration.
    Mr. Skinner: Is the Home Secretary aware that his right hon. and learned Friend the Attorney-General said some time ago that he found the level of City fraud unacceptable? Notwithstanding that, the Home Department has failed to get anybody over to see Peter Cameron Webb and Peter Dixon in America, who have got away with £39 million as a result of fraudulent activities at Lloyd's. Yet, despite that, a common law bailiff has managed to serve a writ on them. It is a fine state of affairs when this law-and-order Government cannot deal with someone who has got away with £39 million, yet are hounding people at social security offices throughout the country.
    Mr. Hurd: The investigation to which the hon. Gentleman refers is nothing to do with me. I am glad to be able to infer from what he said that when he reads our proposals for strengthening the law and the administration of the investigation of fraud, we shall have his support.
    Sir Anthony Grant: Is my right hon. Friend aware that the council of Lloyd's is pursuing the PCW people with the utmost vigour and will welcome anything that the Government can do to pursue them with equal severity?
    Mr. Hurd: I am sure that my hon. Friend is correct in both of his remarks.
    Mr. Corbett: The Home Secretary said in reply to my hon. Friend the Member for Bolsover (Mr. Skinner) that the PCW affair has nothing to do with him. Why does he keep promising jam tomorrow? Is he aware that tax fraud has been estimated to be running at £3,000 million a year'? When will he do something about that'? Is he further aware that the latest annual report of the City of London police states that it faces a 60 per cent. rise in fraud investigations this year, with £482 million at risk? When will we get action?
    Mr. Hurd: The hon. Gentleman has not noticed the increases which I have announced in the strength of the Metropolitan police. One reason or justification for doing that was precisely to increase its resources for the investigation of fraud. The remainder of the proposals in the Roskill report require legislation. Some of them will be controversial, and the hon. Gentleman would be the first to complain if we were to rush ahead with that without proper consideration.

    Detention Centres
    Mr. Maclennanasked the Secretary of State for the Home Department if he will make a statement on his future policy for detention centres.
    The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): Detention centres will continue to provide accommodation for those male young offenders on whom the courts impose short custodial sentences. The regime is being positively developed to provide a suitable programme of activity

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    within the statutory aims and general principles of detention centres, and the system will continue to be kept under review.
    Mr. Maclennan: Does that complacent and bland answer not suggest that the Minister has not made himself aware of his Department's findings that the rate of re-offending by those held in such institutions is at least as bad as that of others in other young offenders' institutions? Will he now recognise that the experiment has failed and that the brutalising regime of those detention centres should be discontinued?
    Mr. Mellor: I am glad to be accused of blandness by the SDP's answer to Bird's instant whip. The aim of the detention centre regimes has been to establish the significance for young offenders of briskness, good appearance and punctuality, to which I am sure the SDP attaches importance. We shall continue to work along those lines.
    Mr. Bill Walker: Does my hon. Friend agree that detention centres have an important part to play in how we handle young offenders, and that those who criticise detention centres rarely put forward viable proposals that would deal with this category of youngster?
    Mr. Mellor: I agree with my hon. Friend. When a short sentence must be served, it is difficult to establish the kind of training regime that we have in youth custody centres. We must make the most constructive use of the limited time. I am grateful for my hon. Friend's recognition of that.
    Mr. Kilroy-Silk: Does the Minister accept that the Government's much-publicised introduction of the short, sharp shock at detention centres has been shown by Home Office research to have failed to reduce re-offending among youngsters and to have had no impact on the general level of crime? Does not that failure strengthen the argument for a single generic youth custody sentence, so that even the shortest sentences can be made as constructive as possible?
    Mr. Mellor: I appreciate that there is a lively and worthwhile argument about whether there should be a single or a dual sentence, but the hon. Gentleman will know that the difficulty remains, as I pointed out to my hon. Friend the Member for Tayside, North (Mr. Walker), that there comes a point below which, in sentencing terms, it is impossible to adopt a proper training regime. The importance of the short, sharp shock—
    Mr. Kilroy-Silk indicated dissent.
    Mr. Mellor: Of course, the hon. Gentleman knows better. He always does on these issues. But if he will bear with me, I can tell him that the significance of the short, sharp shock regime is that it enables us to come to terms with the best regime that can be devised to deal with those short periods. Since last year, that is what we have endeavoured to do.

    Committee on Broadcasting (Report)
    Mr. Chopeasked the Secretary of State for the Home Department if he will make a statement on the criteria to be used to determine the respective timings of the publication of (a) the report of the Committee on Broadcasting charied by Professor Peacock and (b) the Government's response to that report.
    Mr. Hurd: My aim is to give the House the earliest opportunity to read the published report, together with our initial response to it.
    Mr. Chope: Is my right hon. Friend aware that the publication is eagerly awaited, not least to see whether the report contains anything that has not already been leaked? To what extent will there be public consultation upon it, and to what extent will the publication discourage the BBC from issuing news broadcasts which contain comment thinly disguised and masquerading as news?
    Mr. Hurd: I have noticed a certain interest in the report. Perhaps next week there will be an opportunity, if Professor Peacock agrees, for it to be published and for me to give a first response to it. It will have to be a first response, because it will contain much which the House and people outside will wish to discuss, including no doubt my hon. Friend's point.
    Mr. Alfred Morris: Is the Home Secretary aware that any attempt to privatise Radios 1 and 2 will be fiercely resisted, as will any move to force the BBC to sell off any of its services? In his first response, will he say what study his Department is making of the damage that will be done to independent radio if Radios 1 and 2 are sold off?
    Mr. Hurd: The right hon. Gentleman is leaping ahead. He may have an opportunity to comment on this when the report is published. There have been a good many leaks, and he has drawn on one or two. What has been lacking in any leak that I have seen is an account or summary of the interesting philosophy which underlies the report.

    Crime Prevention
    Mr. Neil Hamiltonasked the Secretary of State for the Home Department what recent representations he has received about the Government's strategy for crime prevention.
    Mr. Hurd: I receive many letters on crime prevention and am encouraged by the increasing support for the Government's initiatives in crime prevention.
    On Monday I had the opportunity at our latest seminar to discuss the further development of those practical initiatives with a wide range of practical people representing industries and unions, central and local government, police, education and others.
    Mr. Hamilton: Has my right hon. Friend received any representations on this subject from Manchester city council? Is he aware of the crime prevention strategy which that council enthusiastically pursues, supported by the right hon. Member for Manchester, Gorton (Mr. Kaufman), and of its police committee support unit, whose sole purpose seems to be to attack and undermine the police? It publishes a scurrilous publication called "Police Watch", which, in its first issue, seemed to accuse the Greater Manchester police force of conniving at murders, and seems to believe that the neighbourhood watch scheme is an exercise in setting up a secret police. Does my right hon. Friend think that that encourages effective policing in Manchester and is an effective crime prevention strategy?
    Mr. Hurd: My hon. Friend is right. I am deeply worried about what is coming out of the city of Manchester. It seems to be following the worst example of the worst London boroughs in its anti-police activities. These are the

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    followers of the right hon. Member for Manchester, Gorton (Mr. Kaufman), in his city. What we do not yet know is whether he has either the power or the will to do anything about it.
    Mr. Willie W. Hamilton: Does the Secretary of State recall that whenever any Opposition Member or member of the public suggests that the solution to the problems of education, housing and health involves increased public expenditure, the Government invariably reply that problems are not solved by hurling money at them? Does he realise that his Government have done nothing but hurl money at this problem, yet the crime rate has become worse and worse in each successive year?
    Mr. Hurd: The serious answer is that public money should be spent on all the policies in which the hon. Gentleman is interested. The difficulty that we constantly find is that existing institutions are not targeting that high public expenditure effectively. That is part of the purpose of the inner city initiative of my right hon. and learned Friend the Paymaster General.
    Mr. Malins: I congratulate my right hon. Friend on the enormous encouragement that the Department has given to neighbourhood watch schemes. In London they have proved very successful, and in my constituency the increase in the number of neighbourhood watch schemes has been matched by a reduction in the number of burglaries and other crimes. I urge my right hon. Friend to continue to encourage these schemes.
    Mr. Hurd: I am grateful to my hon. Friend for that point. I know that his borough is one of the leaders in that respect. There are now 14,500 neighbourhood or home watch schemes, which is more than twice as many as a year ago. This is not the result of any diktat from the Home Office or the police — although we encourage such schemes— but is rather the spontaneous wish of those living in such neighbourhoods. I hope that, regardless of party, everyone will give them a helping hand.
    Mr. Chris Smith: Would not by far the best strategy for crime prevention be to ensure that local authorities have the proper resources to enable them to keep the streets well lit and their council estates more secure, better designed and patrolled? Have the Government not spent the past seven years going in precisely the opposite direction and has that not endangered crime prevention, rather than securing it?
    Mr. Hurd: The hon. Gentleman would not make those remarks if he had been at our seminar and had heard about the priority estates project of the Department of the Environment. Plenty of practical people were there, and they could tell the hon. Gentleman about it. My right hon. Friend the Secretary of State for the Environment and his Department wish to tackle the design of housing estates and remedy the huge public expenditure mistakes that were made 20 or 30 years ago. At that time huge sums were spent, but wrongly spent.
    Mr. Churchill: Is my right hon. Friend aware that the citizens of Manchester widely welcome neighbourhood watch schemes, and that those who oppose them are the criminals and also Manchester city council? Is it not a matter of grave concern that, instead of supporting neighbourhood watch schemes, that council is using ratepayers' money to finance a scurrilous anti-police publication, called "Police Watch-? Is it not sheer humbug
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    on the part of the right hon. Member for Manchester, Gorton (Mr. Kaufman) to lecture the Government about law and order, when he does not have the guts to condemn his fellow Socialists on Manchester city council?
    Mr. Hurd: I agree with my hon. Friend. Now that the right hon. Member for Gorton has been converted to crime prevention, I hope that he will go and tell his supporters, or his masters, on Manchester city council what it is all about, and that, instead of nitpicking and finding imaginary difficulties, they should set about encouraging people in Manchester to join this effort.
    Mr. Campbell-Savours: What of the Government's strategy on the prevention of kidnap crimes? Is the Secretary of State aware that when the Cunningham brothers were being tried in the courts in Dublin last week over the Guinness kidnap, Mr. Patrick McEntee, the solicitor for the Cunningham brothers said that the reason why they kidnapped the Guinness woman was that they knew that she was covered by kidnap insurance? Does that not indicate that kidnap insurance acts as an incentive to kidnap, and how is the review coming on in the right hon. Gentleman's Department?
    Mr. Hurd: Slowly, because of the genuine difficulties, of which the hon. Gentleman knows, in dealing with this matter unilaterally or in trying to prevent the payment of ransom in these cases. The hon. Gentleman knows the difficulties— he has tabled many questions. I accept that the problem is a genuine one and if we can find practical ways of tackling it we will do so.
    Mr. Peter Bruinvels: What consideration has my right hon. Friend given to improving the lighting on council housing estates and on side streets, where a lot of crime is occurring because the perpetrators can get away without being seen?
    Mr. Hurd: My hon. Friend is right. The positioning of street lighting is crucial. Many mistakes have been made in this respect in the past, and this is one of the areas that my right hon. Friend and his Department and local authorities are energetically tackling.
    Mr. Kaufman: Is the right hon. Gentleman aware that any claim that the Government have a crime prevention strategy could come only from a Home Secretary who is a writer of imaginative fiction? Is it not a fact that, with 4 million serious crimes last year in Great Britain, the Government's law and order policy has collapsed, and that these crime prevention seminars that the Government hold at Downing street are meaningless gimmicks that are almost completely non-productive? When will the Government take serious action to bring the crime level down to the 2·5 million which they inherited from the Labour Government. which that Government said was too much and which they said they would cure, because it has risen by 1·5 million since then?
    Mr. Hurd: The right hon. Gentleman's appearance is at least one up for the parliamentary clear-up rate, anyway.
    If the right hon. Gentleman thinks that the kind of measures that we were discussing on Monday, namely, the formation of a British Standard to improve the security of motor cars, or the agreement of 10 to 15 insurance companies and brokers to give discounts to people who improve the security of their own houses, are gimmicks, he

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    is a long way from reality. They are very practical steps, along with dozens of others, to encourage people to take sensible measures to prevent crime.

    Autocrime
    Mr. Maplesasked the Secretary of State for the Home Department what discussions his Department has had with motor manufacturers about progress on a British standard for car locks as a method of deterring theft of, or from, cars.
    Mr. Forthasked the Secretary of State for the Home Department what progress has been made in devising a strategy for combating autocrime.
    Mr. Giles Shaw: Representatives of motor manufacturers and agents attended the crime prevention seminar which my right hon. Friend chaired on Monday. Autocrime was one of the subjects examined and good progress is being made.
    The first part of a British Standard on vehicle security, which is being prepared with the co-operation of the manufacturers, will be published in the autumn. It will define, for the first time, a performance-based specification for secure locking systems. We will continue to urge car owners to use the security equipment available to them. We are undertaking a wide range of publicity campaigns and the motor manufacturers will be improving the advice on car security which they give to car owners.
    Mr. Maples: The introduction of such a standard will be widely welcomed as a real practical step in the fight against car theft. Will my hon. Friend try to see that any such standard that is imposed in this country is imposed throughout the EEC, so that British manufactuers are not placed at a disadvantage?
    Mr. Shaw: Yes, indeed. I welcome my hon. Friend's suggestion. We intend to do that. It will be a lengthy process before it can be adopted as a European directive, but we shall certainly try.
    Mr. Forth: I thank my hon. Friend for his reply on this most important matter. Is he satisfied with the incentives and the publicity to encourage car owners along these lines? More important, is he satisfied with the penalties that are available to magistrates to impose on those who are found guilty of autocrime?
    Mr. Shaer: My hon. Friend raises a fair point on penalties. He is right in his view that so often these penalties are not sufficient to deal with the problem. I ressure my hon. Friend on his first point. Not only will we spend money on television publicity to ensure that the autocrime problem is drawn to the attention of the public, but the Driver and Vehicle Licensing Centre at Swansea has agreed to circulate leaflets to every person who receives a licence from the centre.
    Mr. Parry: Does the Minister agree that greater security car locks will help to reduce the number of young joyriders who take cars? In my constituency a number of young people have been killed when driving these vehicles and a number of innocent pedestrians have also been killed. The Ministr will be aware that those who are killed in the incidents are not covered by the Criminal Injuries Compensation Board.
    Mr. Shaw: The hon. Gentleman is quite right. He lays stress on the fact that autocrime, which accounted for
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    846,000 criminal incidents last year, is largely an opportunist event. The police estimate that between 70 and 90 per cent. of all autocrime, whether pinching a vehicle or pinching from it, is entirely opportunist and that it can so easily be prevented by properly secured vehicles.

    Radioactivity
    Mr. Robert Banksasked the Secretary of State for the Home Department what responsibility local authorities bear to ensure that information on local levels of radioactivity is disseminated rapidly to all concerned organisations and departments.
    Mr. Giles Shaw: Under the Civil Defence (General Local Authority Functions) Regulations 1983 local authorities must plan for the collection and distribution of information about the effects of hostile attack. There is no analogous responsibility for peacetime disasters. The Government's review of emergency arrangements in the light of the Chernobyl incident will include the role of local authorities.
    Mr. Banks: I thank my hon. Friend for his reply. Who is responsible for measuring radiation in local areas, and is he satisfied that they have a sufficient number of radiation detectors? In view of the lack of information following the Chernobyl disaster about what people should or should not do, will he ensure that machinery is set up to cope with any future incident of a similar nature?
    Mr. Shaw: I assure my hon. Friend that my right hon. Friend the Secretary of State for the Environment will be conducting a wide-ranging review of all forms of monitoring of an incident of this character. As for civil defence, my hon. Friend will be aware that the United Kingdom warning and monitoring organisation does not have instruments that could measure such low levels of radiation as those that have recently been experienced.
    Mr. Corbett: Given that local authorities rely in part on the National Radiological Protection Board, has the Minister seen its June bulletin, which protests that "in recent years the cash limit has been systematically reduced in real terms"?
    How can the public have faith in the advice of either the board or the Government on radiation levels if the board is denied adequate funds with which to carry out its independent role?
    Mr. Shaw: The board's role, and indeed the system over which it presides, will be considered in the assessment of the post-Chernobyl situation.
    Mr. Neil Thorne: Will my hon. Friend consider the possibility of supplying radiation survey meters to all local authorities as soon as possible so that the population may be reassured, whenever necessary, if there should be a future disaster similar to the one at Chernobyl?
    Mr. Shaw: Im my previous answer I said that the role of local authorities will be considered in the review of the post-Chernobyl incident. My hon. Friend should be aware that it is essential to have a national system wherby accurate measurements of this kind can be issued to the public in an understandable way.
    Mr. Meadowcroft: Does the Minister accept that local authorities are keen to assist with the dissemination of such important information? What information has been

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    sent by his Department to local authorities since the Chernobyl disaster that might assist them in carrying out their duties in this regard?
    Mr. Shaw: The Home Office has not issued information of that kind to local authorities, but the hon. Gentleman will recognise that in relation to civil defence, which is a Home Office responsibility, the passage of the Bill introduced by my hon. Friend the Member for Upminster (Sir N. Bonsor) will allow local authorities to use civil defence grants to cover peacetime disasters as well.

    Litter
    Dr. Michael Clarkasked the Secretary of State for the Home Department if he will indicate the number of prosecutions that have taken place for litter offences during the last period for which figures are available.
    Mr. Mellor: In 1984, 1,552 defendants were prosecuted under the Litter Act 1983, and 639 under the Refuse (Amenity) Act 1978.
    Dr. Clark: I am sure my hon. Friend will be aware that I am a little disappointed in those figures, because I, too, would like to see a higher clear-up rate. As our towns, cities and countryside are disgraced by the amount of litter that one sees around the place, does my hon. Friend think that this is because the law is not adequate, or because the police forces are not given the right instructions?
    Mr. Mellor: I think that it is because people drop litter and fly-tip when they should not. The Department of the Environment has in hand initiatives to deal with that problem. I think that the law is adequate, although there may be some question whether penalties are appropriate. Although the fine for dropping litter is a maximum £400, the average fine last year was £26, and although the fine for fly-tipping is a maximum £1,000, the average fine last year was on £36. I must say to my hon. Friend that there are so many calls on the time of the police that it is difficult for us to assert that they should give a greater priority to prosecuting those who drop litter.

  PRIME MINISTER

    Engagements
    Mr. Stan Thorneasked the Prime Minister if she will list her official engagements for Thursday 26 June.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I have been asked to reply
    My right hon. Friend is attending the European Council in the Hague.
    Mr. Thorne: The Lord Privy Seal will have seen the statement by the Eminent Persons Group that unless economic measures are taken against South Africa the cost will be counted in millions of lives. What will the Government do about that catastrophe.
    Mr. Biffen: Initially we shall discuss this matter with our allies, and that is precisely what is happening at The Hague. We shall determine a policy that takes account not only of our desire for peaceful change in South Africa but of national interest.
    Mr. Cash: Will my right hon. Friend note that in a radio broadcast last week an Indian Member of the South
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    African Parliament said of the EPG meeting that those who had made that report should have taken careful note of its effect on the South African blacks and that he resisted the idea of economic sanctions because he believed that they would not be in their interests?.
    Mr. Biffen: I take note of what my hon. Friend has said. These are all views that can be tested against the developments that will proceed from the conference at The Hague. We are wise to proceed with a very clear commitment that whatever is done shall be seen to be effective in the context of co-operation with our allies.
    Mr. Kinnock: Following that question from the hon. Member for Stafford (Mr. Cash), will the right hon. Gentleman also take note that the non-white Members of the so-called tri-cameral Parliament walked out when Botha used the President's council to overrule their objections to the Internal Security Act, which gives totalitarian powers?
    I welcome the Government's belated, but none the less significant decision, to meet Oliver Tambo, President of the African National Congress. I invite the right hon. Gentleman to treat the claim by Radio South Africa this morning that this meeting was "a capitulation to terrorism" with the contempt that it deserves. Does the right hon. Gentleman agree with me that the reaction of the South African regime to that modest and sensible act of dialogue is evidence of the need to intensify pressure against the South African Government, as that is the only language that Botha will ever understand?
    Mr. Biffen: My hon. Friend the Minister of State, Foreign and Commonwealth Office made quite clear the terms under which the discussions took place with Mr. Tambo. They underline the Government's determination to have a forward policy in these matters, but one which above all must always be related to the test of effectiveness, within which we are co-operating with our colleagues in western Europe, North America and Japan. It is a modest but realistic policy, and stands in total contrast to what the right hon. Gentleman constantly reaffirms, which is his commitment to comprehensive and mandatory sanctions. We believe that that would be disastrous for this country and disastrous for relationships with South Africa.
    Mr. Kinnock: I am prepared to accept that the right hon. Gentleman at least wants to see an end to apartheid. Does he think that the steps taken by the Government so far have been, to use his word, effective?
    Mr. Biffen: The test of effectiveness is the way in which we can co-operate with all others who are engaged in this enterprise. [Interruption.] Oh yes it is. Once we are picked off one by one, the whole question of effectiveness is a total illusion. The right hon. Gentleman knows in his heart that nobody can stand at either Dispatch Box and say with certainty what are the economic consequences of action that we take and what are the political developments that flow from them.
    Mr. Kinnock: If the right hon. Gentleman and the Government want those sanctions to apply to all, will he now tell me why the Government vetoed the mandatory sanctions in the United Nations last week, which was the one measure that would ensure that they applied to all?
    Mr. Biffen: Because we think that in the first instance we should move in close co-operation with our allies, and secondly that we should have modest objectives which are attainable.
    Mr. John Carlisle: Does my right hon. Friend agree—[Interruption]
    Mr. Speaker: Order. The hon. Gentleman has as much right to be heard as anybody else.
    Mr. Carlisle: Does my right hon. Friend agree that peaceful reform in South Africa is far more likely to take place in conditions of full employment and economic prosperity than in conditions of devastation and destruction, as proposed by the Opposition? Will he get a message to the Prime Minister at The Hague that the Government should be thinking of positive measures to increase investment in South Africa and increase the influence of British companies in that country, so that this initiative will be received by the South African Government as a way of helping them rather than hindering them towards peaceful reform?
    Mr. Biffen: The initial task of my right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign Secretary at The Hague is to concert a policy in conjunction with our colleagues which can then be put on an effective basis and which will have clear and determinable objectives. That is a great deal more important than engaging in a moral foghorn approach to the policy, as has been suggested by some Opposition Members.
    Mr. Donald Stewartasked the Prime Minister if she will list her official engagements for Thursday 26 June 1986.
    Mr. Biffen: I have been asked to reply.
    I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Mr. Stewart: In the light of a Foreign Office Minister having seen a representative of the ANC, will the right hon. Gentleman make representations to his right hon. and learned Friend the Foreign Secretary that the Government should now see a representative of the Palestine Liberation Organisation, since the one-sided attitude of the American President is not conducive to a peace settlement in that area?
    Mr. Biffen: The right hon. Gentleman's proposition is based on the assumption that there has never been a meeting of a Minister with the PLO. That is not true. There was a meeting, when my right hon. Friend, now the Home Secretary, urged upon the PLO the virtues of nonviolence.
    Mr. Galleyasked the Prime Minister if she will list her official engagements for Thursday 26 June 1986.
    Mr. Biffen: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Galley: Will my right hon. Friend accept a modest criticism, that Ministers could perhaps be even more vigorous in extolling the virtues of the Government? Should they not say, frequently and without apology, that the vast majority of people in this country have never been better off in their lives? Should they not highlight the reductions in nationalised industry prices for the first time
    462
    in living memory? Should they not emphasise the soundness of the economy, when, in the face of a dramatic oil price reduction it has reacted with hardly a murmur? If the Opposition had been in power they would have been scurrying around like headless chickens looking up the International Monetary Fund and issuing a series of mini budgets. [Interruption.]
    Mr. Speaker: Order. It is selfish to take as long as that.
    Mr. Biffen: My hon. Friend makes a perfectly valid point. He argues that the Government have a formidable list of achievements to their credit, and that it lies upon all Tories to be arch-evangelists to ensure that that record is more widely appreciated. We have a period—I do not know how long, but I know that the right hon. Gentleman the Leader of the Opposition hopes that it will he longer rather than shorter — in which to obtain public recognition of those achievements, and we shall do so.
    Dr. Owen: Does the right hon. Gentleman believe that the over 9 million people who are living at or below the supplementary benefit level appreciate the policies of the Government? What does he intend to do about that, since there has been a 50 per cent. increase since the Conservative party took office?
    Mr. Biffen: I preface my reply to the right hon. Gentleman by saying how much I enjoyed almost all or his remarks about South Africa on the radio this morning, which clearly puts him with us, if not with the Liberal party. [Interruption.] In reply to the substantive question, perhaps I can say that the report by the Low Pay Unit should be taken alongside the fact that under this Government supplementary benefit has increased in real terms, that for those on less than average earnings real take-home pay has increased substantially, and that there has been an increase in the tax threshold which has taken 1·5 million people out of taxation. I believe that any balanced reading of the position would not come to the social conclusions of the lobbyists behind the Low Pay Unit.
    Mr. Proctor rose—
    Mr. Speaker: I call Mr. Harvey Proctor.
    Dr. Owen: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I shall take it afterwards, at the usual time. Mr. Harvey Proctor.
    Dr. Owen rose—
    Mr. Speaker: Order. I shall not take it now. I shall take it afterwards, at the usual time.

    Orsett
    Mr. Proctorasked the Prime Minister if she will pay an official visit to Orsett.
    Mr. Biffen: I have been asked to reply.
    My right hon. Friend has at present no plans to do so.
    Mr. Proctor: Is my right hon. Friend aware that my constituents in Orsett will naturally be disappointed with that response, as they would have taken the opportunity to show the Prime Minister the green fields that will be built on if Tillingham Hall is allowed to go ahead in the green belt of Essex? Realising that my right hon. Friend is unable to comment on We detail of the outstanding

    463
    appeal which has been to public inquiry, will he re-emphasise that it is general Government policy not to allow development in the green belt, except in exceptional circumstances?
    Mr. Biffen: I thank my hon. Friend for his understanding of the fact that I cannot comment on something that is subject to appeal. I assure him that it is general Government policy to seek the preservation of the green belt. That must be at the heart of any constructive and socially constructive environmental policy.
    Mr. Clelland: Is the Leader of the House not concerned about the increasing lawlessness of his Government, to such an extent that they have constantly had to introduce retrospective legislation to get themselves off the hook? Is the right hon. Gentleman aware that the latest example of that is that the Home Secretary, who has now received—
    Mr. Speaker: Order. The hon. Member must make his question relative to a visit to Orsett. Can he do that?
    Mr. Clelland: Will the Leader of the House—
    Mr. Speaker: Order. I shall help the hon. Member. Let us take it as read.
    Mr. Biffen: I think that I could better answer the question if the specific instance of alleged retrospective legislation were put to me.
    Mr. Alan Howarthasked the Prime Minister if she will list her official engagements for Thursday 26 June.
    Mr. Biffen: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Howarth: Has my right hon. Friend seen a report which finds that the number of individual shareholders in the United Kingdom has risen to no less than 16 per cent. of the population, which is the same figure as in Japan and only 3 per cent. less than in the United States? Does my right hon. Friend agree that there will he a continuing welcome for the Government's policies of privatisation and wider share ownership, which serve not only to increase the nation's wealth, but to underpin independence and dignity?
    Mr. Biffen: I agree with my hon. Friend's points. The personal equity plan? Which was announced in this year's Budget, is just one further example of the attempt to develop people's capitalism. I am certain that that will be at the heart of the election appeal which we shall put in the most effective form and in such a way as to console my hon. Friend the Member for Halifax (Mr. Galley).
    Mr. Chris Smith: This morning when the Secretary of State for Energy made such a ringing declaration of the Government's devotion to nuclear power and its future in Britain's energy production, was he speaking for the Government as a whole? Do the Government show any concern for the enormous public anxiety about the safety of nuclear power in the aftermath of Chernobyl?
    Mr. Biffen: Of course my right hon. Friend was speaking on behalf of the Government. This Administration need no instruction on the necessity for safety in the development of a nuclear programme. Before anyone casts aspersions, express or otherwise, on the quality of work in our nuclear industry, and what it has
    464
    already achieved in terms of safety, let it be understood that it will be a poor day for this country when its energy choice is capriciously narrowed to deliver it more and more into the hands of the interest groups which would otherwise serve it.
    Dr. David Owen: On a point of order, Mr. Speaker. If the Leader of the House wants to associate with the policy of these Benches, both Liberal and Social Democrat, of wishing to support bans on new investment in South Africa, private bank loans and direct air flights—
    Mr. Speaker: Order. This must be a point of order, and not a further question.
    Dr. Owen: I shall reiterate my point. If the Leader of the House wishes to associate with the policies of these Benches, including a ban—[interruption.] Mr. Speaker, I am going to be heard.
    Mr. Speaker: Order. The right hon. Member is right, but he must obey the rules and direct the point of order to me.
    Dr. Owen: Yes, Sir. This point of order is for you. I am saying through you. Mr. Speaker, that—
    Mr. Speaker: Order. I think that I know what is upsetting the right hon. Member. I ask him to put the point of order to me, and I shall ascertain whether I can deal with it.
    Dr. Owen: My point of order, Sir, is that, if the Leader of House wishes to associate with our policy, surely—[HON. MEMBERS: "No."]—he should do so directly and not abuse Question Time when answering a question on supplementary benefit and the 9 million people who are living below the poverty line. Mr. Speaker, you would not allow any other hon. Member to answer a question in the way that the Leader of the House sought to do. I am putting it to you that that was an abuse of Question Time. It should not be allowed. There are rights in the House for minorities and we expect you to uphold them. We would have expected you to interrupt the right hon. Gentleman when he abused Question Time— [Interruption.]—as you would have done with any other hon. Member. We understand the right hon. Gentleman's difficulties—
    Mr. Speaker: Order. The right hon. Member is making an accusation, and I cannot quite hear it.
    Dr. Owen: I am delighted that you should want to hear it, Mr. Speaker, without the noise. The point to you was that there was an abuse of Question Time procedure by the Leader of the House. If anybody else had sought to answer a question which had not been put, he would have been called to order by you and not been allowed to do so. The question related to supplementary benefit and poverty—issues which are of some concern to some hon. Members — not to South Africa. If the Leader of the House wishes to dissociate himself from his party's policy, he should do it in another way.
    Several Hon. Members rose—
    Mr. Speaker: Order. The right hon. Gentleman knows as well as anybody that it was an open question and that I am not responsible in any way for the content of answers. We frequently hear things in the House which we do not like. That is what democracy is all about.
    Several Hon. Members rose—
    Mr. Speaker: Order. I call Mr. David Steel.
    Mr. David Steel: Further to that point of order, Mr. Speaker. With respect, there is a serious point of order for you. This is the second time this week that the Minister answering at the Dispatch Box seeks in the reply to distort the policy which my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) and I have been pursuing on South Africa. On Tuesday it was the Prime Minister and today it was the Leader of the House. My point of order is that it is not understood outside the House why the Deputy Leader of the Labour party should be allowed to come back three times on a question, whereas we are not allowed to reply to the answer.
    Mr. Speaker: Order. The answer to the right hon. Gentleman's question is well known to him. We have a convention in the House of two Front Benches, and he knows that that has been a long observed tradition. On his second question, throughout the questions to Home Office Ministers various Back-Bench Members attempted to imply that the policy of the Opposition was not entirely in tune. It is not unknown for similar accusations to be made against the Government party or the right hon. Gentleman's party.
    Mr. Ian Gow: Further to that point of order, Mr. Speaker. Is it not clear that the two points of
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    order raised by the right hon. Member for Plymouth, Devonport (Dr. Owen), the leader of the SDP, and the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), the leader of the Liberal party, have been brought before the House because of the exposure of the profound differences of view between the two right hon. Gentlemen? Would it not be of assistance to you if the two right hon. Gentlemen sat beside one another, if they could possibly hear to do so?
    Mr. Speaker: Order. I think that the hon. Gentleman is trying to assist me. I should now like to be of assistance to the House: business questions.
    Mr. Dennis Skinner: Further to that point of order, Mr. Speaker.
    Mr. Speaker: I do not need any more help.
    Mr. Skinner: Are you aware, Mr. Speaker, that we all worry about the distorted answers that we receive to our questions? My point of order is that today, having heard the right hon. Member for Plymouth, Devonport (Dr. Owen), it is evident that you should seriously consider running a little class—a sort of seminar—to which you can invite hon. Members and where you can provide them with the sort of ingenuity that is needed to raise a point of order and to make a further point at the same time.

Business of the House
3.39 pm
Mr. Neil Kinnock: May I ask the Leader of the House whether he will state the business of the House for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 30 JUNE AND TUESDAY I JULY—Debate on a motion to approve the statement on the Defence Estimates 1986 (Cmnd. 9763).
At the end on Tuesday, Third Reading of the European Communities (Amendment) Bill.
WEDNESDAY 2 JULY—Until seven o'clock, motions on Social Security Regulations. Details will be given in the Official Report.
Consideration of Lords amendments to the Housing (Scotland) Bill, the Airports Bill and the Drug Trafficking Offences Bill.
THURSDAY 3 JULY—There will be a debate on a motion to take note of the outstanding reports of the Public Accounts Committee to which the Government have replied.
Remaining stages of the Outer Space Bill [Lords].
FRIDAY 4 JULY—Private Members' Bills.
MONDAY 7 JULY — Until seven o'clock, private Members' motions.
Debate on the tin industry on a Government motion.
[Wednesday 2 July:
Supplementary Benefit (Requirements and Resources) Miscellaneous Amendment Regulations 1986.
Supplementary Benefit (Requirements and Resources) Amendment Regulations 1986.
Social Security (Unemployment, Sickness and Invalidity Benefit) Amendment (No. 2) Regulations 1986
Supplementary Benefit (Conditions of Entitlement) Amendment Regulations 1986
Housing Benefit (Amendment) (No. 3) Regulations 1986.]
Mr. Kinnock: I am grateful to the right hon. Gentleman and not only for that reply. I thank him for responding to my request made two weeks ago, for Government time to discuss the awful plight of the tin industry. The Government's concern should extend to action to help Cornwall, and not be limited to the gift of three hours debating time on Monday.
When the right hon. Gentleman assured me last week that the Third Reading of the European Communities (Amendment) Bill would be taken separately from the debates planned for today and tomorrow, I did not expect that the Government would relegate it to after 10 o'clock next Tuesday. Nor, I suspect, did the right hon. Gentleman expect that he would be part of such a shabby manouevre. Will he recognise the seriousness of the Bill and its implications to the constitution, and give a day and time for Third Reading that will allow hon. Members on both sides of the House an opportunity to expose fully the real and potential dangers of the Bill's provisions?
Since Peel established the Church Commissioners in the 1840s, their annual report has never been debated. As their latest report was issued yesterday, and in view of the archbishop's statements on sanctions against South
468
Africa, can the Government find time to make a historic breakthrough and ensure that the Church Commissioners' report is debated?
I ask once more when the Government will table a motion for the reinstatement of private Members' time following the dirty tricks that led to the loss of business on Friday 6 June. The right hon. Gentleman has now conceded twice on this matter, but we still await the motion, so I hope that he can make an announcement today.
Finally, I ask the Leader of the House to ensure that the Prime Minister makes an early statement on South Africa following her discussions with the EC Council of Ministers in The Hague.
Mr. Biffen: I shall take the points raised by the right hon. Gentleman the Leader of the Opposition in their given sequence.
I recognise that many would wish for more time to be given to a debate on the tin industry, but we are now moving into July when time is at a premium. I hope that we can have a satisfactory debate covering all the issues that have been raised by the right hon. Gentleman.
I understand that there is a great affection for the Third Reading of the European Communities (Amendment) Bill to be other than the time that I have given. I again say that we are under considerable time constraints, and I cannot reasonably hold open to the House the prospect that that time is likely to be changed.
As to the debate on the Church Commissioners, the right hon. Gentleman properly reminded us that not since the days of Robert Peel in 1840 has this device been made use of. He quite properly underlined the growing sense of historical nostalgia that affects the Labour party. Only last week, the hon. Member for Oldham, West (Mr. Meacher) was extolling the virtues of the House of Lords in their activities. I shall look charitably on the suggestion, but I cannot be too forthcoming.
As to the question of private Members' time, I shall be tabling a motion today proposing that private Members' motions are taken until 7 o'clock on Monday 14 July. I fully understand and underline the importance of my right hon. Friend the Prime Minister making a statement to the House next week, and that is arranged for Tuesday.
Sir John Biggs-Davison: I revert after a decent interval to the early-day motion about the miscarriage of justice in the Maguire case.
(That this House notes the widespread concern felt in Parliament by eminent scientists, by other responsible observers and by members of the public who have viewed programmes on the matter screened by Channel 4, that Anne Maguire, Patrick Maguire (senior), Vincent Maguire (then aged 17), Patrick Maguire (then aged 14), Sean Smyth, Patrick O'Neill and the late Guiseppe Conlon, sentenced in 1976 to long terms of imprisonment since served, now appear, despite confirmation of their convictions at the time by the Court of Appeal, to have been entirely innocent of the crime with which they were charged; further notes at the conclusion of a debate in the other place on 17th May 1975, the recognition by the Parliamentary Under Secretary at the Home Office of the strength of feeling on the matter in that House and his pledge to draw the attention of the Secretary of State for the Home Department to what had been said; and therefore earnestly urges the Secretary of State for the Home Department in the interests of the highest standards

469
of British justice of which this country needs to feel rightly proud, to move without delay for a review of these convictions, either under the provisions of section 17 of the Criminal Appeal Act 1968, or by such other process of review as he may deem appropriate to this disturbing case.]
Is my right hon. Friend aware that we are grateful for the interest being taken in the matter by the Home Secretary? Will he keep open a suitable slot for discussion on the Floor of the House of this miscarriage of justice?
Mr. Biffen: I take note of my hon. Friend's point, which he has made with such engaging persistence over the months. He will agree that this is the time of the year when opportunities are available for those matters to be raised through the initiative of private Members. I hope that he will be successful in that context.
Mr. David Steel: In the light of the anxiety expressed on both sides of the House this afternoon, will the Leader of the House have words with the Attorney-General, the Home Secretary and the Secretary of State for Northern Ireland, and arrange for a statement to be made next week on the police inquiries being conducted by Chief Constable Sampson? Is he aware that, even before those inquiries are completed and acted upon, there are matters upon which the House is entitled to have answers? The House wants to know who was involved in the decision to take Deputy Chief Constable Stalker off the RUC inquiry. Will his work and recommendations be included in Chief Constable Sampson's report? Mr. Stalker and Mr. Taylor have been under investigation for some weeks. They should be prosecuted or have their names cleared.
Mr. Biffen: As the right hon. Gentleman has fairly observed, an inquiry is proceeding. That inhibits what can be done by my right hon. Friends, but I shall make the representations that he has requested.
Mr. Geoffrey Rippon: Has my right hon. Friend's attention been drawn to the early-day motion in my name and that of many hon. Members on both sides of the House?
(That this House requests Her Majesty's Government to provide parliamentary time for consideration of the Human Rights and Fundamental Freedoms Bill which has completed all its stages in the House of Lords.]
Will he make available time for discussion of this important matter, bearing in mind the fact that a similar Bill has already passed through all its stages in the House of Lords on three previous occasions? This is the fourth attempt in the other place to initiate proper discussion of the matter in this House.
Mr. Biffen: My right hon. and learned Friend makes the point all the more effectively because of the record of the other place in this matter. I cannot be too hopeful at this time in the parliamentary year, but I shall look into the matter.
Mr. Alfred Morris: Can the Leader of the House be a little more forthcoming than was the Home Secretary this afternoon about the timing of the publication of the Peacock report? With his responsibilities to the House as a whole, can he say exactly when that report will be in our hands?
Mr. Biffen: The right hon. Gentleman would not expect me to elaborate on what my right hon. Friend the Home Secretary said. I assure him that there will be no delay in securing the publication of the Peacock report.
Mr. Kenneth Warren: Will my right hon. Friend give more details about the debate on Monday week on the tin crisis? It would be helpful to know the nature of the Government motion. Will he ensure that that motion recognises the fact that the problem affects Cornwall, the City of London and the entire country? It would be sad if the three-hour debate were swamped by lengthy speeches from both Front Benches at the beginning and end of the debate.
Mr. Biffen: I accept my hon. Friend's point about speeches from the Front Benches. As Chairman of the departmental Select Committee, my hon. Friend properly reminds us of its important role in this matter. I shall consider his point about the Government motion. That can be discussed through the usual channels.
Mr. Jack Ashley: Is the Leader of the House aware that the Committee on Safety of Medicines—our medical watchdog—has still to act on drugs which damage patients? It is slow to act in comparison with its American counterpart, the Food arid Drugs Administration. There is a suspicion that those delays are caused by secret pressures from the drug companies. Will he consider initiating a debate next week to lift the Official Secrets Act 1911 from the decisions of the Committee on Safety of Medicines, and hear i:1 mind the fact that full disclosure in the United States has worked there and should work here?
Mr. Biffen: I accept that there is a great deal of public interest in the point that the right hon. Gentleman has made. However, I have to be negative and say that I am sorry that there is simply no way in which Government time can be made available for a debate next week. Perhaps he will seek the other means that are available to Back-Bench Members to ventilate the matter.
Mr. Nicholas Budgen: Is my right hon. Friend aware that discussion of the Widdicombe report is now urgent in the light of the experience of the Conservative minority group on the Wolverhampton council which has been denied representation on committees equivalent to its representation on the council and yet the majority Labour group argues that that denial is lawful?
Mr. Biffen: My hon. Friend is a doughty advocate of the civic cause, and I shall look at the possibility of discussing the Widdicombe report, but I am sure that he, as a great realist in all these matters, knows perfectly well that July is not the best month in which to be finding time.
Mr. Dave Nellist: Has the Leader of the House seen early-day motions 992, 1018, 1019 and 1021?
[That this House condemns the arrest and detention of 3,000 youths and workers, including union general secretaries, regional organisers and shop stewards, as an attempt by the Botha Government to break the momentum of workers' struggles in South Africa, and to behead the independent, democratic trades unions of their leaders; and calls for the release of Z. Mtshelwane (South African Allied Workers' Union, Pretoria), and the following officials of the

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Congress of South African Trades unions, namely, B. Najedi, Vemabantu and Mzuzani of Bloemfontein, and H. Maqua of Cape Town and all other detainees.]
[That this House condemns the imposition by the South African Government of a State of Emergency and for the widespread arrests of 3,000 youths and workers, including key trade union leaders; and calls for the release of the following members of the Metal and Allied Workers' Union (MAWU): P. Tom, organiser, Sharpeville, A. Pilane, steward, Brits, F. Mtshali, organiser, J. Moropa, organiser, H. Ebothome, shop steward, ATC, M. Lekoba, Brits, D. Tladi, organiser, Sebokenng, J. Magarne, organiser, Brits, Moroke, organiser, Brits, S. Moyo, Brits, P. Mabutsela, steward, Brits and the following members of the National Automobile and Allied Workers' Union (NAAWU): J. Lebese organiser, Mamelod, M. Shongwe, organiser, Brits, D. Hoshe, steward, Willard Batteries, S. Wilson, steward, Willard Batteries, P. Pheku, Springs and K. Dunjwa, steward, General Motors, and all other detainees.]
[That this House congratulates the Congress of South Africa Trade Unions, the youth organisations, the United Democratic Front and those other organisations for the 16th June one-day strike to commemorate the 10th anniversary of the Soweto massacre in 1976; condemns the widespread police arrest of 3,000 youth and workers, the police swoops on trade union officers and the detention of many union officials; and calls for the release of the following members of the Food and Allied Workers' Union: P. Makhuda, organiser, Hammanskraal; T. Mkhanazi, branch secretary, N. Natal; M. Nhlapo, branch secretary; the following members of the Paper, Wood and Allied Workers' Union: A. Willem, organiser, Port Elizabeth; B. Mnguni, organiser, Empangeni; J. Nthilinga, organiser, N. Natal; Z. Nthimkulu, organiser, Piet Retief; the following members of the Commercial, Catering and Allied Workers' Union: K. Xulu, O. K. Bazaars, Rosebank; M. Hlongweni, O. K. Bazaars; Rosebank; A. Maletso, O. K. Bazaars, Rosebank; E. Lestwalo, Hyperama, Sandton: J. Nhlongo, organiser; O. Shebangu, Empangeni, and T. Mkaliphi, acting chairman, Chemical Workers' Industrial Union (C.W.I.U.), and L. Ntlokoa (C. W.I.U.), and all other detainees.]
[That this House condemns the state of emergency declared on Thursday 12th June in South Africa and the detention of 3,000 youths and workers in the following days congratulates COSATU, the UDF, youth and other community organisations for the solid act of defiance in the largest national strike in South Africa's history on 16th June, to commemorate the 10th anniversary of the Soweto massacre; and calls for the release of the following members of the National Union of Textile Workers; O. Ngwenya, organiser, Harrismith; M. Mkhize, organiser, Harrismith; M. Kheswa, shop steward, Durban; J. Ntuli, shop steward, Durban and L. Tsotetsi; the following members of the National Union of Mineworkers: V. Bambani, regional vice-chair, Kimberley; M. Dipico, organiser, Kimberley; V. Ngcold; M. Gladli; and D. Matuembula; the following members of the Transport and General Workers' Union: E. Ngubbane, Empangeni; J. Maxambela, Port Elizabeth; and T. Mponjana; D. Khumalo, Retail and Allied Workers' Union, Mamelodi; Mathatha, Chairman, Media Workers' Association of South Africa; and the following members of
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the Alexandra Action Committee: Mzwanele Mayekiso, A. Vilikazi, C. Hlatshwayo; O. Baphela of the Alexandra Youth Congress; and all other detainees.]
Those four further motions, bringing the list to over 130 key trade union leaders arrested in the past 10 days or so in South Africa.
Will the right hon. Gentleman arrange for a statement next week not only from the Prime Minister on the deliberations in The Hague today, but also from the Department of Trade and Industry to discover whether they have received the report from the Ethical Investments and Research Information Services produced in the last few days which details 135 British companies, many of which have directors sitting on the Conservative Benches, including Lonrho and Pritchard Services, which are not just paying cheap wages in South Africa but less than half that set down in the weak EEC code of conduct for the minimum level of payment for black workers in South Africa?
May we have some more Government time on South Africa so that we on the Labour Benches can tell the hon. Member for Luton, North (Mr. Carlisle) that if he thinks that South Africa is such a wonderful place it is a wonder and a pity that he does not go to live there?
Mr. Biffen: If the hon. Gentleman is going to make such a free and easy accusation and add a certain amount of personal animus to it, he must not expect Government time to be provided: he must seek it on his own account.
Mr. Douglas Hogg: Will the Leader of the House consider what my right hon. Friend the Secretary of State for Energy said today about the need for a nuclear policy? Will he, please, provide time as soon as possible for the House to consider the extent of that need? He will remember that the debate on 13 May was limited to the environmental aspects of nuclear energy and we now want to consider the energy requirements.
Mr. Biffen: My hon. Friend makes an extremely fair point, but, as a realist and sometime incumbent of the Whips Office, he will know that July is an extremely difficult month in which to find time for more general debates, but I shall bear in mind what he has said.
Mr. Eric Deakins: Why does the Leader of the House treat the House with such contempt and arrogance with regard to the Third Reading of the European Communities (Amendment) Bill, which is one of the most important Bills this Session—some of us would say the most important? Surely it deserves a full day of Government time so that most hon. Members who have an interest in the matter can take part in a vote on it? Otherwise, it might well mean a vote coming in the small hours of the morning, which may suit some of us, but will not be to the convenience of hon. Members Generally.
Mr. Biffen: I understand the hon. Gentleman's point and I am not insensitive to it, but I cannot go further than what I have said to the Leader of the Opposition.
Sir Ian Percival: Has my right hon. Friend observed early-day motion 991 relating to the penalties available to those convicted of acts of terrorism which has in a short time attracted the support of no fewer than 116 of my right hon. and hon. Friends, representing a wide cross-section of our party, some of whom are well know to have been against the death penalty until now?

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[That this House congratulates and thanks all those whose efforts played a part in securing the conviction of the Brighton bomber on charges of murdering five people and of those who so recently pleaded guilty in Belfast to murdering 17 people; extends its heartfelt sympathy to all who suffered loss or injury from their acts; asks itself whether there is available in such cases any penalty such as will in any sense meet the crime and whether in permitting the law as to penalties to remain as it is, it is doing sufficient to protect those who may he the next victims of such appalling evil; is of the opinion that it should give fresh consideration to extending the death penalty, now limited to treason and piracy, to criminal acts such as those done to terrorise; and asks the Leader of the House to arrange for it to have time to debate these matters.]
Does he appreciate that many of our constituents will find it difficult to understand our priorities if we cannot even find time to discuss whether the death penalty should be available in the context of the appalling developments in international terrorism? Will he find time for such discussion?
Mr. Biffen: Of course, I understand the problem, but my right hon. and learned Friend will also concede that the matter has already been debated in this Session of Parliament. However, there is simply no way in which I can hold out the prospect of easy Government time during July.
Mr. Robert Kilroy-Silk: Will the Leader of the House find time for an early debate on the procedures for investigating alleged disciplinary offences against policemen so that we may have an opportunity to discuss the disgraceful public trial of the deputy chief constable of Greater Manchester and the way in which innuendo and rumour have been gaining currency when he has had no opportunity to defend himself or to state his case? Whatever he may or may not have done, he is entitled to an impartial, objective investigation, and, if necessary, a fair trial. Is it not now appropriate for the House to debate those matters?
Mr. Biffen: As the hon. Gentleman will know, the matter has already been raised this afternoon by the Leader of the Liberal party, and I would prefer to rest my reply on the answer that I gave him.
Mr. Ivan Lawrence: As the shop steward of the House, can my right hon. Friend do something about the vile smell, the disgusting rubbish and the danger to the public presented at one of the accesses to the precincts of the House underneath Bridge street? It has been there for some time and the authorities have not done anything about it over many years. There is an enormous amount of support for the view that something should be done. Can my right hon. Friend offer any help?
Mr. Biffen: I have been asked a question on which I can offer some help. I shall consider the point and see if something can be done.
Mr. Seamus Mallon: I should like to reinforce the request by the Leader of the Liberal party for time to debate what is now known as the Stalker affair. On three occasions in the past three weeks I have tried to raise this matter. May I reinforce those requests by pointing out that there is grave anxiety in Northern Ireland about this man's dismissal from the inquiry that he was professionally carrying out? I respectfully suggest
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that if an inquiry was taking place into policing in Greater London or Greater Manchester a ministerial statement would have been made long ago.
Mr. Biffen: It would be improper for me to comment upon the circumstances of the inquiry, and for that reason I shall not respond to that part of the question of the hon. Member for Newry and Armagh (Mr. Mallon). I shall add his voice to the other representations made on this matter and report his view to my right hon. Friend.
Mr. Christopher Chope: Will my right hon. Friend make time before the summer recess for a debate on the Peacock report and upon bias in the BBC? Does he accept the urgent need for such a debate, bearing in mind the latest example, the spurious report by the Low Pay Unit which qualifies for only one column inch on an inside page of The Guardian today but which was featured as, I think, the third item on the BBC television news last night?
Mr. Biffen: I take account of what my hon. Friend the Member for Southampton, Itchen (Mr. Chope) says. He knows that the right hon. Member for Manchester, Wythenshawe (Mr. Morris) has already shown an interest in this matter. I shall see that the views are conveyed to my right hon. Friend the Home Secretary.
Mr. Robert Parry: The Leader of the House will recall early-day motion 770 in the last Session about the import of South African coal through the port of Liverpool. It was supported by 97 hon. Members.
[That this House condemns the Banbury Coal Company of Northwick for importing domestic coal for the Lancashire area from South Africa through Liverpool Docks; regrets that the company is prepared to put at risk Lancashire mines and Lancashire jobs in favour of supporting economically the evil apartheid regime in South Africa; further regrets the special arrangements made with the company by the Mersey Docks and Harbour Company for handling this cargo which could lead to unrest amongst Liverpool dockers; and calls upon the Secretary of State for Energy to show his much vaunted support for the United Kingdom mining industry by seeking to prevent such unnecessary imports.]
He will have seen on today's Order Paper early-day motion 1007 tabled by my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) which is supported by 40 hon. Members.
[That this House deplores the continuing importation into the United Kingdom of 30,000 tons of cheap South African coal each month; regards this as deplorable when the National Coal Board has plans to axe a further 24,000 jobs in the coal mining industry; and calls upon Her Majesty's Government to ban these imports.]
May we have a ban on the unnecessary import of coal from South Africa which further threatens miners' jobs?
Mr. Biffen: A statement on the general question of United Kingdom policy in the context of South Africa will almost certainly be made on Tuesday. I suggest that the hon. Member for Liverpool, Riverside (Mr. Parry) tries his luck then.
Mr. Cecil Franks: I fully understand the difficulty facing my right hon. Friend about arranging a debate while the inquiry into the circumstances surrounding the deputy chief constable of Greater Manchester is being pursued. However, I should

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like to add my voice to those of hon. Members who have requested that when the inquiry has been concluded and hopefully that will be soon—he will consider the possibility of an early debate thereafter about all the circumstances of this most bizarre situation.
Mr. Biffen: I appreciate the considerable interest that my hon. Friend has taken in this affair. I shall report his views to my right hon. Friend the Home Secretary.
Mr. A. E. P. Duffy: Is the Leader of the House aware that there is yet another aspect to the Stalker inquiry, which is that of allegations of shoot to kill by British forces in Northern Ireland and covert cross-border incursions into the Irish Republic by British forces in Northern Ireland? These are matters of grave concern in Dublin—we understand that they will be the subject of exchanges between the Prime Minister and the Taoiseach tomorrow—and in the House. Is it not time that the Leader of the House provided an opportunity for hon. Members to discuss how the Government allowed the inquiry to become enveloped in fumblings and misinformation and, apparently in murkiness?
Mr. Biffen: I take account of what the hon. Gentleman says. As he knows, I cannot respond by commenting upon the matter as it is now the subject of an inquiry. In all these matters I can best carry out the undertaking that I gave to the Leader of the Liberal party.
Mr. Cranley Onslow: Can my right hon. Friend shed any light on the extrordinary inability of the Selection Committee to find any member of the so-called alliance who is willing to serve on the Select Committee that is to consider the Channel Tunnel Bill?
Mr. Biffen: I can safely say that that is quite without my responsibility.
Mr. Michael Meadowcroft: Does the Leader of the House recall earlier efforts to persuade him that the House should debate the serious matter of extraterritoriality? Does he realise that Anglo-American relations are being soured still further by the efforts of the United States Administration to impinge upon our sovereignty? Does he recognise that it is time that we had a debate on this extremely serious subject?
Mr. Biffen: I understand the hon. Gentleman's arguments, and I shall refer them to my right hon. Friend the Secretary of State for Trade and Industry.
Mr. John Stokes: As the Defence Estimates are to be discussed next week, can my right hon. Friend the Secretary of State for Defence be asked to refer to the defence implications of the present situation in South Africa, in view of the danger that there will not always be a Government of that country favourable to the West and of the vital importance of the sea routes round the Cape and the valuable minerals in that part of the world and of the fear that after these troubles there might be a Communist Government in that country?
Mr. Biffen: I shall most certainly ensure that my right hon. Friend the Secretary of State for Defence is made aware of my hon. Friend's anxieties.
Mr. Robert Maclennan: Has the Leader of the House heard from the Patronage
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Secretary, to whom has been reported the great concern of the grain trade about the administrative chaos that will follow the introduction of the co-responsibility levy on cereals? Will he seek to enable the House to debate this appalling proposal before it becomes effective on 3July?
Mr. Biffen: I am well aware, from a constituency interest, of the point that the hon. Gentleman makes. I shall certainly look into the matter further.
Mr. Ivor Stanbrook: May we have a debate on the curious anomaly that in every case where an ex-service man has been appointed to the public service after the war he receives the extra war service credit on his pension, except where his public service was overseas? Would it not be useful if we had a debate upon this anomaly so that the Government might remedy this injustice?
Mr. Biffen: I thank my hon. Friend for drawing my attention to that anomaly, of which I was not entirely aware. I suggest that he might use all the scope that is offered in private Members' time to raise the matter. I must be candid and say that I do not think that there is very much opportunity for Government time to be made available to debate the issue.
Mr. Frank Cook: I ask the Leader of the House to call to mind his response to me last week at about this time when I referred to the attempt by his hon. Friend the Minister for Environment, Countryside and Local Government, the hon. Member for Bristol, West (Mr. Waldegrave), to criticise the BBC "Panorama" programme and the possible response to the rebuttal which I had published. The right hon. Gentleman responded by saying in effect, wait and see. Since then I have not even received an acknowledgement. As the summer recess is so imminent, is it the Government's intention to allow their response to go into the shadows of the recess in the same way that their publication of the new ionising regulations was kept quiet last year by publishing them on 4 September?
Mr. Biffen: In a mood of optimism, I hoped last week that this was a self-solving difficulty, but apparently it is not. I shall look into the matter.
Mr. Nigel Forman: May I associate myself with the question of my hon. Friend the Member for Grantham (Mr. Hogg), and urge my right hon. Friend to seek to find time in the near future for a wide-ranging debate on the future of nuclear energy? It is important that all points of view be expressed.
Mr. Biffen: Yes, of course. I have to say to my hon. Friend that July is a bad time for the finding of Government time, but I think that he is right in saying that nuclear energy is a matter of great political importance.
Mr. Roland Boyes: Has the Leader of the House had an opportunity today to read an article in the Financial Times by Richard Evans that states that water authority debts may be written off? If that happens before privatisation, £5 billion will be handed to the Government's friends in the City rather than being used to build houses, hospitals and schools and to create jobs in areas of high unemployment. It seems that a £27 billion industry is to be sold off for £5 billion to £7 billion. Is there no financial limit to the price that the Government will pay to achieve their political objectives? Quite rightly,

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and for good reason, Mr. Speaker turned down a PNQ application from me today, but as a consequence of that I ask the Leader of the House, to assure us that a statement will be made very shortly on this important matter.
Mr. Biffen: I think that there may be a case for saying that a statement is needed to correct that string of misconceptions. On the other hand, I do not travel too hopefully along that course. I shall draw the attention of my right hon. Friend the Secretary of State for the Environment to the fears and anxieties that have been expressed.
Mr. Toby Jessel: Can my right hon. Friend confirm that in next Thursday's debate we shall be able to discuss the conclusion of the Public Accounts Committee in its eleventh report that the Committee was gravely disquieted by the decision to set up a joint services defence school of music, and to ask the House to endorse the view of 164 of my right hon. and hon. Friends expressed in early-day motion No. 397 that the training of British Army bands, with their high standard of excellence, should long continue to remain at Kneller hall Twickenham?
[That this House pays tribute to the high standards of excellence of the bands of the Army trained at Kneller Hall, Twickenham, the Royal Marines trained at Deal, and the Royal Air Force trained at Uxbridge, all of which add splendour to Royal and state occasions, promote recruiting and morale, lift the spirits of the nation, and as part of the traditional British scene, help to attract to British shores visitors whose spending generates income, employment and a tax yield to Her Majesty's Government; takes note of the Eleventh Report of the Public Accounts Committee which expresses grave disquiet that the Ministry of Defence should have decided on a joint Defence School of Music which would disrupt the training of service musicians and entail expenditure of £10 million before carrying out a full investment appraisal, and recommends that the Ministry of Defence should review the need for a Defence School of Music, as well is its possible location; thanks the Right honourable Lady the Prime Minister for her reply on 6th February to the honourable Member for Twickenham that the new Secretary of State will look at the matter afresh in the light of the latest facts; and hopes that hand training will long continue to flourish at Kneller Hall, Twickenham, at Deal and at Uxbridge, respectively.]
Mr. Biffen: My hon. Friend has been a successful campaigner in this matter and we all envy him his success. I am sure that the debate next week will give him a chance to advance further the arguments that he has in mind in what is, in its own way, a real and political issue.
Mr. Greville Janner: Can the House expect a statement before 8 July, when Kurt Waldheim is expected to he inaugurated as president of Austria, concerning his involvement in the interrogation and subsequent fate of British prisoners of war? As it is difficult to come to any proper conclusion without the evidence which the Germans have so far refused to reveal concerning his activities, will Her Majesty's Government take the opportunity of the most welcome visit of President von Weizsäcker, the President of Germany, to ask him whether as a gesture of good will he will show them? Will the Government at the same time ask the United Nations to reveal its files, which show why the
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United Kingdom voted against and vetoed the appointment of Waldheim as Secretary-General the first time round?
Mr. Biffen: I shall see that my right hon. and learned Friend the Foreign Secretary is made aware of the hon. and learned Gentleman's views.
Mr. Andrew MacKay: As there is grave concern in the motor trade about the Government's original proposals to alter the month when the new registration suffix is introduced from August to October, and as my right hon. Friend the Secretary of State for Transport has been good enough to say that he will reconsider this decision, will my right hon. Friend the Leader of the House ask our right hon. Friend to make a statement before the summer recess? There is considerable uncertainty which is doing great damage in the motor trade.
Mr. Biffen: I appreciate my hon. Friend's anxieties, which I think are widely held. I shall most certainly draw the attention of my right hon. Friend the Secretary of State for Transport to this difficulty.
Mr. Max Madden: In view of the string of defeats which the Government have suffered in another place, will the Leader of the House appreciate that we can well understand why the Government seem to be planning to send the House of Lords into outer space? As Mr. Bernard Ingham seems to have told the Lobby this week that the Government are planning to respond to the latest defeats that they have suffered during the passage of the Social Security Bill through another place, when is the Leader of the House planning to tell this place of the Government's intentions in respect of those defeats?
Mr. Biffen: The hon. Member for Bradford, West (Mr. Madden), as an experienced parliamentarian, will be aware that there is a strong convention that legislation which is before the other place is not the subject of statements here. All will be revealed in due course.
Mr. Harry Greenway: May we have an early debate on the need to protect the interests of children against Labour authorities such as Ealing which is putting children for adoption with gays and lesbians — [Interruption.] Labour Members may think that this is funny, but I have a large mailbag of objections to it and every day, I am receiving deputations about it from parents and citizens. It is a serious matter.
The authority is inviting teachers to apply for posts in schools regardless of their "sexual orientation". Advertisements have been put in the Church Times and The Universe without the permission of the governors who have the responsibility for making the appointments. In view of the extreme damage that Labour authority appointments—as in Ealing—of sexual deviants or even paedophiles as guardians, foster parents and teachers could cause, is it not important that there should be an early debate on this important matter?
Mr. Biffen: I quite understand that my hon. Friend feels that this is a matter which should receive much wider public recognition. Therefore, I suggest that, at least in the first instance, he should see whether he could do well with an Adjournment debate on it.
Mr. Tam Dalyell: In the event of the motion, which was on the Order Paper for 6 June, not

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being chosen by the winner of the ballot for 14 July, what opportunity will the House have to consider the report of the Select Committee on Foreign Affairs of 1–2 May 1982, which was published last July and on which the Leader of the House gave an undertaking to the Leader of the Opposition?
If the motion of 6 June is not chosen, will there be an opportunity for a statement to be made on question 9? That concerns the relationship between the Prime Minister and her Law Officers. They were set up to write a letter, then, finding that she blamed the civil servants and her Trade Secretary when things went wrong, there was an inquiry into something which she herself had instigated.
Mr. Biffen: With all affection for the hon. Gentleman, I must say that I think that we have debated this several times over. I do not think my answer would add materially to his sum total of knowledge. I understand his point about the Select Committee report. That is something I will consider.
Mr. Peter Bruinvels: Does my right hon. Friend share my continuing concern about the high rate of acquittals in jury trials, especially in Snaresbrook, with a 58 per cent. acquittal rate? Does he agree that we ought to have an opportunity to debate the rules and role of people who come forward to be jurymen? They need to take morality and loyalty tests and they must believe in punishment which is fitting to the crime. They should also be loyal to the Crown. Surely jurors should be totally representative of the whole of society rather than sometimes—because of defence counsel—only part of it.
Mr. Biffen: My hon. Friend makes a perfectly fair point; it must concern all law-abiding citizens. I hope that my hon. Friend will carry on campaigning in the way that he does, even though he occasionally runs the risk of misunderstanding.
Mr. Dennis Skinner: Is the Leader of the House aware that there were quite a number of Home Office questions today on the matter of the Birmingham pub bombings of 1974? Is he aware of the growing concern about whether the six people in gaol took part in this crime? Shortly, a book is to be published which suggests that that is not the case. Is he aware that recently on Granada television the forensic evidence of the Home Office scientist, Dr. Frank Skuse, totally collapsed? Will the right hon. Gentleman have a word with the Home Secretary with a view to his making a statement in the House? This concerns not just Labour Members; at least one Tory Member has shown anxiety about it.
When the Leader of the House gets hold of the Home Secretary, will he also tell him that several weeks ago I sent him a letter about the imprisoned Kent miner, Terry French, but I have not had a reply. We want this lad's parole to be reviewed as urgently as possible.
Mr. Biffen: The hon. Gentleman said that, to some extent, his points were all raised at Question time this afternoon—
Mr. Skinner: No, they were not.
Mr. Biffen: I am sorry; it happens to us all from time to time. I will certainly draw my right hon. Friend's
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attention to the points that the hon. Gentleman has raised. In a sense I will be a substitute for the question he was unable to ask.
Mr. Bill Walker: Will my right hon. Friend find time for an early debate on the orders, conventions and procedures of this House, and, in particular, will he embrace within that debate the need for right hon. Gentlemen, representing minority parties, to accept and understand the meaning of open questions? Back Benchers who regularly come to the House are often disadvantaged by the actions of right hon. Gentlemen who fail to recognise the way in which this House proceeds.
Mr. Biffen: My hon. Friend must remember that the Liberal party and the Social Democratic party are going through a certain passing difficulty. This is a great place for charity, and this is a time when one should show rather more charity than my hon. Friend has exhibited.
Mr. D. N. Campbell-Savours: The Leader of the House has followed the affair of Jim Smith and Aish and company. Is he aware that a new whistle blower concerning excess profits from defence contracts has surfaced? His name is Mr. Don Pitman, a former employee of Thorn EMI, Portsmouth. He maintains that his company was also fiddling the books. Within the next couple of weeks may we have a full statement from the Dispatch Box on this matter? Can the Leader to the House assure me that the fullest possible inquiries will take place within the Ministry of Defence as to why Department officials were able so effectively to cover up what this man reported?
Mr. Biffen: I think that the hon. Gentleman's most immediate and rather engaging prospect would be to make his speech in the two days that will be devoted to defence Estimates. I can think of no better time.
Mr. Robert N. Wareing: Is the Leader of the House aware that millions of disabled people who have found their standard of living eroded by the Government now see a glimmer of hope in the two decisions made in the other place against the Government's Social Security Bill? They understand from the rumours from Bernard Ingham's office that the Government are not willing to abide by that decision. Is it not therefore an opportune moment for a statement to be made to the House by the Secretary of State for Social Services as a prelude to a full scale debate—we have not had one for a year—on the plight of the disabled under the Government?
Mr. Biffen: I hear what the hon. Gentleman says, but he is aware that the matter has recently been raised by his hon. Friend the Member for Bradford, West (Mr. Madden). I do not think I can fairly go beyond what I have already said.
Mr. Speaker: Before I call the hon. Member for Walsall, North (Mr. Winnick), I wish him a happy birthday.
Mr. David Winnick: Perhaps I should say that it is also South Africa freedom day and it would be proper to debate South Africa.
In view of the ugly scenes which took place after Question Time, to some extent arising from the remarks made by the Leader of the House, will the Government give careful consideration to appointing an eminent

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persons' group to look into the dfferences between the Liberals and the SDP in order to try to resolve those differences?
Mr. Biffen: It is quite simple. They are putting themselves into a state of disarray which will make them the natural partners of the Labour party.

Royal Assent
Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Drainage Rates (Disabled Persons) Act 1986.

2. Corneal Tissue Act 1986.

3. British Shipbuilders (Borrowing Powers) Act 1986.

4. Horticultural Produce Act 1986.

5. Armed Forces Act 1986.

6. Civil Protection in Peacetime Act 1986.

7. Safety at Sea Act 1986.

8. Health Service Joint Consultative Committees (Access to Information) Act 1986.

9. Commonwealth Development Corporation Act 1986.

10. Land Registration Act 1986.

Orders of the Day
  European Communities (Amendment) Bill
  Considered in Committee, [Progress, 16 June.]
  European Communities (Amendment) Bill

    MR. HAROLD WALKER in the Chair
    4.20 pm
    Sir Russell Johnston: On a point of order. Mr. Walker. You may remember that at our first sitting the Minister intervened and the Government moved the closure before many hon. Members had had an opportunity to speak. Have you had any discussions with the Government about their intentions or any intimation from them with a view to protecting the rights of minority parties and of Back Benchers?
    The Chairman: I have received no such representations. It is the Committee that decides whether a debate should be brought to a conclusion.
    Mr. Eric Deakins: On a point of order, Mr. Walker. I wish to raise four points of order, and it may be for your convenience and that of hon. Members if I raise them one by one, in case any hon. Member wishes to intervene.
    First, I thank you for removing amendments Nos. 23 and 25 from the first group of amendments and for putting them into a grouping into which they fall more naturally. As a result, the Committee will be able to have a more coherent debate. You may well be aware, Mr. Walker, that two of the subjects put together, although analogous, are also important in their own right. When we reach that group of amendments, which involve economic and monetary union as well as political union, will you bear in mind that some of us may wish to raise detailed points on both subjects? I hope that you will take that into account when deciding whether to accept a closure motion on that debate.
    Mr. Chairman: I am not sure whether that was a point of order or prior notice of what may happen. At the relevant time I shall take into account the view expressed by the hon. Gentleman.
    Mr. Deakins: My second point of order relates to the first group of amendments, as it now stands. Two subjects are involved. The first subject covers the new power of the Assembly, and amendments Nos. 2, 3 and 13. The second subject involves clause 3 and among other things the change of name from Assembly to Parliament, and affects amendments Nos. 51, 52 and 42 to 45. Although those amendments are all related to the Assembly, I hope that due consideration will he given tÓ the fact that they represent important subjects in their own right.
    Many of us would have liked to go into each subject in some detail. However, we understand that there is a feeling in the Committee that there should be a reasonably early vote on this important group of amendments. Consequently, I hope that our restraint and self-denying ordinance during the first debate will be taken into account during later debates. There are many things to be said on the first group of amendments, but they will go unsaid because of the relative shortage of time.
    For example, I was going to raise the whole issue of financial control by the Assembly during the debate on the
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    first group of amendments. However, I have decided not to do so then, as there is a desire in all parts of the Committee for an early vote. I shall thus try to introduce it at a later stage, subject to your discretion.
    May we have a separate vote on amendment No. 13, which relates to the new power of the Assembly to interfere in and approve international agreements concluded by the European Communities? The Assembly does not enjoy that power at present, and it impinges on the royal prerogative. Given the importance of the royal prerogative, will the Committee be allowed to express its opinion through a separate vote?
    The Chairman: At the appropriate time, I shall take into account the hon. Gentleman's representations.
    Mr. Deakins: I wrote to you, and gave you notice of my third point of order, Mr. Walker. Amendment No. 26 relates to title III of the Single European Act, which concerns co-operation and the co-ordination of foreign policy in pursuit of a common foreign policy among the 12 member states of the EEC. I pointed out to you that on 7 May the Minister of State gave evidence before the Foreign Affairs Committee. When challenged by members of that Committee, the hon. Lady indicated that she would have favoured a debate on the issue of political co-operation. At present, you have chosen, in your wisdom, Mr. Walker, not to select amendment No. 26 or any of the two or three other, similar amendments. However, given the Minister's concern that there should he a debate, and my submission now, perhaps it will be possible to reconsider the matter, if not now, later in our proceedings.
    If you rule that that is not in order, Mr. Walker, I am prepared to develop the argument. I would submit that the amendment is in order, and I would welcome an opportunity of raising a point relating to the contents of the documents before us, suggesting that that is so.
    Mr. George Robertson: Further to that point of order, Mr. Walker. I very much appreciate the way in which you have treated the representations made to you about the selection of amendments. We are all extremely grateful to you for your perception.
    However, I seek your guidance. My hon. Friend the Member for Walthamstow (Mr. Deakins) has made a valid point. One of the most significant parts of the Single European Act is title III, which is entitled:
    "Treaty provisions on European Co-operation in the Sphere of Foreign Policy".
    There are many provisions in article 30 that are of enormous consequence for the future conduct of Britain's foreign policy. The Heads of Government are meeting today in The Hague, and they will spend most of their time considering a major issue of foreign policy — South Africa. We are only too well aware that, although the EEC might want to keep such a provision outside the precise terms of the treaty, the reality is that events will dictate what happens. If Heads of Government are spending so much time debating the provisions which we have already agreed and which the Minister of State signed in Luxembourg earlier this year, how can hon. Members have an opportunity to debate the implications of that part of the Single European Act which is probably of more consequence than any other part?
    The Chairman: As the hon. Gentleman fairly recognised. I gave very careful consideration to all the many representations made to me during the past few

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    days. I have tried as hard as possible to be fair to hon. Members in all parts of the House. However, I came to the conclusion that it would be wrong to accept that amendment. When we debate clause stand part, the Chair may be able to recognise the interest expressed in those points.
    Mr. Deakins: You have anticipated my fourth point of order, Mr. Walker. I was going to point out that there are several other amendments that have also not been chosen. I entirely accept your ruling on such matters. However, there is to be no debate on social policy, on social and economic cohesion, or on research and technology. All those subjects are relatively important and are considered as such in Brussels and elsewhere. Consequently, I was hoping that you would take into account the fact that there had been no separate debates on those subjects, when considering whether there should be a debate on clause I stand part.
    The Chairman: I have heard what has been said and the Chair will take it into account when we reach that point in our proceedings. I shall, of course, have regard to the scope of any debate that precedes it.
    Attention has been drawn to the fact that the selection of amendments before the House last week has been revised. Hon. Members may be pleased to know that I have sought to take into account all the representations made, including those made about the possibility of a debate on clause 2 stand part. It would be proper to allow such a debate when we reach that point.
    4.30 pm
    Mr. Nigel Spearing: On a point of order, Mr. Walker. I join my colleagues in thanking you for the changes that have been made and endorse the point made by my hon. Friend the Member for Walthamstow (Mr. Deakins) on clause 1 stand part and in view of the wide ambit of subjects that have been agreed in the matter of closure.
    My point relates to Standing Orders Nos. 28 and 29 in relation to the moving of a dilatory motion. Standing Order No. 29 says that the Question on a dilatory motion may be put at once, or may not he put, by the Chair in the event of the issue being an abuse of the rules of the House.
    I hope, Mr. Walker, that I would never knowingly be guilty of such an abuse. I therefore seek your permission to move, That the Committee do report progress and ask leave to sit again. I do not want to trespass on to the substance of the matter, in the expectation that you will accept the motion.
    On 17 June last the Minister of State, Treasury signed a memorandum for the House and for the public which stated in effect that the Commission of the European Communities, at its meeting on 22 May last year, had proposed a supplementary budget to the EEC which amounted to extending expenditure for the current year up to the limit of the so-called 1·4 per cent. VAT ceiling.
    Paragraph 7 of the memorandum says:
    "Adoption of the preliminary draft supplementary and amending budget No. 1 as presented by the Commission would exhaust the own resources available within the 1·4 per cent. VAT ceiling."
    Paragraph 2 states that the proposal will be considered by the Council of Ministers at the 16–17 July Budget Council.
    While I do not wish to go further into the merits of that, I would commend that not only is this proposed extension
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    of expenditure — it may not be accepted — of considerable importance in relation to what we are about to discuss, but, the 1·4 per cent. VAT ceiling having been reached, the Fontainebleau arrangement for rebate, which has been a strong feature of debates and, indeed, of the Government's case, would fall and our relationships with the EEC would therefore be of a wholly different character and nature from that envisaged were the document not available.
    The memorandum was not available in the House until, at the earliest, yesterday, and in effect today. The substantive document, which of course we would not have known about, was sent from Brussels to the Government as long ago as 22 May.
    I seek to move the adjournment of the Committee, if briefly, to give the Minister an opportunity to reply to many of the financial points which arise, which have not been made very clearly in the Government's financial memorandum and which, I submit, will change the atmosphere in which our debates on the Bill will take place.
    Mr. Teddy Taylor: Further to that point of order, Mr. Walker.
    On 23 June, which was only Tuesday this week, the Minister of State, Treasury in a parliamentary answer stated that the highest rate of VAT contribution for 1986 was 1·22 per cent. I have this morning received a paper from the European Commission, document 71161/86, in which the words are used:
    "own resources within the 1·4 VAT limit are insufficient to cover all requirements."
    In other words, the Government are saying that 1·22 per cent. is adequate for all contingencies, while the Commission is saying that the Common Market is in effect insolvent and does not have the money to pay for the things that it has agreed to do this year.
    One may ask, is this not a wholly separate issue from the Bill? I think you will be aware, Mr. Walker, that two of the clauses deal specifically with the participation of the European Assembly and the Council of Ministers in budgetary matters. I am wondering whether it would be more helpful to the House, before we deal with the two specific articles concerning budgetary matters, to clarify whether the Government are right in saying that there is plenty of room for extra spending this year above 1·22 per cent. or whether the European Commission in its document—an official Community document signed by Commissioner Christophersen—is correct in saying that the Community is in effect insolvent and does not have, even on maximum resources, the money to pay its basic bills for this year.
    Mr. Tony Marlow: Further to that point of order, Mr. Walker. The Bill is being put forward as part of our total relationship with the European Community. As part of that total relationship, various negotiations took place and various agreements were made about the level of rebate and therefore the level of net cost contribution that the United Kingdom would make towards the Community. In view of what my hon. Friend has just said, there is a real prospect that that net contribution — the amount of money that the British taxpayer will have to pay net to the Community—will be significantly greater than anticipated.
    The British people would be appalled if we were to continue the debate without their first knowing what

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    commitment we are making on their behalf in financial terms, as the Bill is part of the general arrangement that balances out the financial contribution that we intend to make.
    The Chairman: I am grateful to the hon. Member for Newham, South (Mr. Spearing) for having given me notice of his intention to raise this matter.
    I have listened carefully to what has been said. It seems to me that the matters that have been raised have no bearing on the content of the Bill. Certainly they may be matters for the Committee to take into account in reaching its conclusions. I do not think that they provide any substance for my accepting a motion such as that suggested by the hon. Gentleman, and I cannot accept such a motion.

    Clause 1

      EXTENDED MEANING OF "THE TREATIES" AND "THE COMMUNITY TREATIES"
      Sir Edward du Cann: I beg to move amendment No. 2, in page 1, line 13, after `Communities)', insert
      `but not Articles 6 and 7 thereof'.
      The Chairman: With this it will be convenient to discuss the following amendments: No. 3, in page 1, line 13, after `Communities)', insert `but not Article 8 thereof'.
      No. 13, in page 1, line 13, after `Communities)', insert `but not Article 9 thereof'.
      No. 51, in clause 3, page 2, line 22, leave out paragraph (a).
      No. 52, in clause 3, page 2, line 25, leave out paragraph (b).
      No. 42, in clause 3, page 2, line 32, leave out from `below' to 'but' in line 33.
      No. 43, in clause 3, page 2, line 33, leave out from 'Act' to end of line 41.
      No. 44, in clause 3, page 2, line 34, leave out paragraph (a).
      No. 45, in clause 3, page 3, line I, leave out sub-section (3).
      Sir Edward du Cann: Before I deal with the substance of the amendment, I should like to make a short reference to the exchanges that have taken place in respect of points of order on the timetable for our discussion.
      The title of the measure that we are now discussing in some detail—European Communities (Amendment) Bill· is wholly misleading. The Bill, if Parliament in its wisdom decides to enact it, gives effect to an international agreement, the Single European Act, which is a new treaty, and at least equal in significance to the original treaty of Rome. That measure is of supreme constitutional importance. It is a great step towards the creation of a European super-state and of a European political union. The outstanding thing, the regrettable thing, is that this Single European Act has never been discussed in either House of the British Parliament.
      I do not comment on whether the treaty is desirable or undesirable. I say only that any attempt to suggest that the
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      Bill is a minor matter and exists merely in order to facilitate the workings of the Common Market would be a confidence trick.
      I think that Opposition Members and my hon. Friends who have spoken publicly in the Chamber and privately to you, Mr. Walker, and to the Leader of the House and to the Patronage Secretary requesting that adequate time should he taken to discuss this measure have not only right but common sense on their side.
      If we take the separate subjects for debate — the harmonisation of taxation, the common agricultural policy, European union, the powers of the European Parliament and other subjects which, as the hon. Member for Walthamstow (Mr. Deakins) said, we shall probably not have an opportunity to discuss — each of those subjects alone requires a whole day at least for proper discussion. Therefore, it is appropriate to say that it is good that the representations on this subject — not through the usual channels but through unusual channels —have been heeded.
      Whatever our views on the European Community may be, none of us wishes to delay the debate, or to prolong it unnecessarily, or to impede sensible legislation, but it is entirely appropriate that Back Benchers should demand adequate time in which to bring into the open the realities. They need to be fully discussed in this Chamber. The great British public needs to be made fully aware of the realities and their implications.
      As for amendment No. 2, in a nutshell the Bill gives additional powers to the European Parliament to influence decisions of the European Community. Already there is great controversy about the extent of the increase in those powers. I shall not cite the references; right hon. and hon. Members are well aware of them. However, in my experience unclear law is always bad law. I hope that my hon. Friend the Member for Wallasey (Mrs. Chalker), the Minister of State, will make a very clear statement about the intentions of Her Majesty's Government. First, what will happen? Secondly, what will occur in practice? Thirdly, in the event of a dispute between the Commission and the Assembly, who is to be the arbiter? I am sure that, like me, every other right hon. and hon. Member has observed that the Members of the Euro-Assembly are now hungry for power and authority.
      Individual Members of the Assembly have already stated that they will exploit these new powers to the fullest possible extent. What individuals say is one thing, but what the Assembly has said collectively is pretty remarkable. The Assembly has collectively expressed the view that it will exploit the new powers to the fullest extent. Indeed, such a decision was made formally by the Assembly in a resolution that was passed by 206 votes to 63 on 16 January 1986.
      In case you, Mr. Walker, or anybody else should think that 63 elected representatives were not prepared to go quite so fast as the 206 who formed the majority, let me stress that the 63 who voted against did not vote against the sentiment — quite the reverse. They expressed their distress about what they saw as the inadequacy of the new powers in the Single European Act. The text is available and the writing is very clearly on the wall. If right hon. and hon. Members do not care for the graffiti on the wall, they can see the text in the Library of the House of Commons.
      Mr. Marlow: My right hon. Friend has been telling the House very eloquently that the significance of this

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      monumental piece of legislation is not yet sufficiently recognised. I remind him of a judgment earlier this week in the European Court of Justice. Effectively, it requires Her Majesty's Government to make social payments to various categories of the population. Years ago, when the original European Communities Act was introduced and when various debates took place and a referendum campaign was held, nobody suggested for a moment that an impost of this kind would he placed upon Her Majesty's Government by an institution such as this. Things will happen as the years unwind that at this stage nobody is able to imagine. The result will be a massive reduction in our sovereignty.
      4.45 pm
      Sir Edward du Cann: I am grateful to my hon. Friend for raising the point that I wanted to make to the House next and for putting it so clearly.
      Hitherto, the Assembly has been chiefly an advisory body. When the question of our signing the treaty of Rome was widely discussed in the country during the referendum, it was never suggested that the Assembly would be other than an advisory body. Now, however, its function is about to change, and change dramatically. If the amendment is not carried and the Bill is passed in its present form, the Assembly will be able to block Council proposals, unless the Council disagrees unanimously with its views. It is obvious to anybody who knows anything about the way in which the European Community now operates that that is extremely unlikely.
      The chances of achieving unanimity are the slenderest ever. There are now 12 members of the Community, including Italy. That country favours extra-parliamentary powers. It always has done and it makes no secret of its views. And, as everyone knows, it rarely disagrees with the Council. If the Council wants to get legislation through there will be immense pressure on it to accommodate the views of the European Parliament. Whether we like it or not, whether people know about it or not, the European Parliament will take immense new authority. Part of the reason for moving the amendment is to make that point absolutely clear to our fellow countrymen and countrywomen.
      Sir Anthony Meyer: Does my right hon. Friend not think that there is a rather sad irony in the fact that a new democracy such as Italy should be so keen on providing the European Community with an effective parliamentary constitution but that apparently this country, the mother of Parliaments, should be so reluctant to do so?
      Sir Edward du Cann: It is legitimate to hold another point of view. We have evolved our style of parliamentary democracy over the centuries. There is not one hon. Member who is privileged to serve in this House who is not immensely proud of it and who wants to make his contribution in his own way to its effective working and, as time moves on, to its enhancement. Not every European country has the same proud parliamentary tradition of democracy. I prefer to defend what we have rather than to embark too early upon a new and untried experiment in which we shall have only a minority interest. The proposal is that the authority of the European Assembly should be greatly increased. In effect, it follows that there must be an equivalent decrease of the authority of United
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      Kingdom Ministers. It follows, too, that equally there must be a decrease in the authority of United Kingdom parliamentarians from whom Ministers are selected and to whom hitherto they have been answerable. My view, for what it is worth, is that that is unacceptable at this stage in the European Community's development.
      The purpose of the amendment is to exclude these proposals from United Kingdom law and thereby to continue to preserve, or to attempt to preserve, the sovereignty of this Parliament. I repeat what I said earlier in a different context. At no time has the proposal to increase the powers of the European Assembly been put to the United Kingdom electorate. If that were done and if the answer were in the affirmative, I might be content. That has not been done, and as it has not been done I cannot be content.
      It is absurd that this Bill should be sold to the community— by which I mean this country's community —as a simple tidying measure. This proposal represents a most significant constitutional change. If this choice were put squarely to the electorate of this country, I doubt very much whether they would be in favour of it. The electorate may like to make jokes about us and about their Parliament — that is their right, their privilege and their freedom — but they probably prefer to keep what they have rather than to embark on a new experiment. Therefore, at this time I think it is right to refuse to sanction this part of the Bill.
      Mr. George Foulkes: As a signatory of the amendment, may I say on behalf of the official Opposition that we support the amendment. If the Government are not prepared to accept it, we shall divide the House.
      I must say to the right hon. Member for Taunton (Sir E. du Cann) that the demand for adequate time to discuss this matter comes not only from the Back Benchers on both sides of the House, but from the Labour Front Bench.
      Like the right hon. Member for Taunton, the Opposition believe that this group of amendments, and amendment No. 2 in particular, brings us to the key issue of the Bill. It is of serious concern to the Opposition. We are not just talking, as the phraseology of Europe would have us believe, about co-operation between the European Parliament, the Council and the Commission. We are talking of cold decision-making by the European Parliament. This measure represents a substantial change, which must not be under-estimated.
      The change may not be enough for the European Parliament. The right hon. Member for Taunton called its Members power-hungry. It is understandable that they have this wish to increase their power, but it is also right for us to examine the effect of the measure, if implemented, on our powers as a democratically elected institution.
      The European Parliament may have said in resolutions that were adopted on 16 January that that was only modest progress towards its aims. We disagree with that view because we regard it as a significant transfer of power, from Westminster, to Strasbourg as well as Brussels. That is why we oppose it.
      Mr. Marlow: I am sorry to intervene so early in the hon. Gentleman's speech. Can he tell the House at this stage, if a Labour Government were to be elected, whether they would repeal the Bill?
      Mr. Foulkes: That is something that we would have to take account of when—not if—a Labour Government was elected. It would depend on how circumstances changed before then.
      The changes proposed diminish the powers of Westminster in four ways, which I shall outline to the House. First, scrutiny by the House of Commons will be even more difficult than it is now. We accept—indeed, I believe that even the Government accept—that scrutiny is not good at present. The Government accepted the Opposition's amendment on 4 March and promised improvements. But the Government's response so far to the improvements in scrutiny that the House — not just the Opposition—demanded has been inadequate so far.
      Secondly, the power of the Council will be reduced and circumscribed. As Minsters are also responsible to Parliament, that factor would reduce our powers in the House of Commons of the United Kingdom.
      Thirdly, the opportunity to veto by the United Kingdom Government, or the power to block, will be greatly reduced. We shall discuss later the areas where the decisions now carried out by unanimous agreement of the Council will be changed to a qualified majority. Suffice it to say that at present the Luxembourg compromise, which we have never accepted as legally binding but which has been effective up to now with one or two exceptions, will become less effective.
      The fourth way in which our power is being diminished is that the compromise will be much more difficult because of the second stage in decision-making. This is not just the view of the Opposition, although I am stating it on behalf of the Opposition. The Government recognise this and they were strongly opposed at first to the changes that they now advocate in the Bill. The Bill represents a humiliating climbdown by the Government.
      To answer the question put by the right hon. Member for Taunton, it is no wonder that the Government want to keep the issue, as well as this debate, low key. It is embarrassing for them to climb down in this way.
      In the Dooge report, the then Minister of State who has been promoted to be Secretary of State for Scotland, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind), insisted, along with the Greek Government, on a reservation on this matter. The right hon. and learned Gentleman, as it says in the report,
      "entered a reservation on this section. He considers that the European Parliament should he encouraged, within its Treaty powers, to make more effective contributions to Community decision-making. The Parliament should make more use of its right to put forward proposals for Community action. The Council should follow up resolutions with the Parliament, or explain its reasons for not doing so. There should be improvement and extension of the conciliation procedure, in particular by more effective consultation between the Council and the Parliament at earlier stages of the consideration of proposals."
      That was as far as the Government would go. They insisted on that reservation being included, but they were clearly and firmly against co-decision-making. The Prime Minister herself was against any intergovernmental conference even to discuss and consider the matter, yet all the proposals in Dooge, except powers in relation to revenue-raising, have been adopted by the Government and are advocated by the successor to the right hon. and learned Member for Pentlands, by the hon. Member for Wallesey (Mrs. Chalker).
      As those of my hon. and right hon. Friends who are members of the Foreign Affairs Select Committee will
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      know only too well, these institutional and procedural changes embodied in the Single European Act go further than the Government had proposed at first. They will have a significant effect on the operation of most of the Community's institutions.
      The Opposition believe that the Government's first response was correct and that we should examine the implications in more detail, especially in relation to scrutiny. The extended procedure for considering legislation—the Second Reading nature of the procedure —will make scrutiny by the House of Commons much more difficult. Each proposal will have to be examined and then, if it is changed, it will have to be examined again by the House. That would potentially double the time given to examination. In some ways, speeding up the timetable of procedures and the ultimatum date will also make that difficult.
      Although the Minister of State wrote a letter to me explaining how she thought the scrutiny procedures could be improved in Parliament here — that is published on page 67 of the Select Committee's report—it goes only a small way towards achieving the improvements in scrutiny that we were asking for.
      Mr. William Cash: I do not know whether the hon. Gentleman is entirely up to date with what has been happening. Is he aware that the Minister of State has written to the Chairman of the European Legislation Select Committee, of which I am a member? In her letter of 16 June she says:
      "May I simply confirm that we recognise that the Single European Act will involve some added burden of scrutiny and the Government are ready to make the necessary changes in existing scrutiny arrangements."
      Therefore, it would appear, subject to what the Minister of State will say, that there is every reason to suppose that we shall have effective scrutiny arrangements, in line with the Government's commitment.
      Mr. Foulkes: I thank the hon. Gentleman for bringing me up to date on that matter. I have not seen that letter. He is more optimistic than I about the Government's ability to put forward adequate scrutiny arrangements. The Minister will be speaking later in the debate, and I look forward to hearing her reply and perhaps an elaboration of her remarks on 16 June.
      Let me deal with the Government's improvement in the scrutiny procedures. The Minister might be able to answer some of the questions about scrutiny — for example, about the recesses. The recesses of this Parliament do not correspond in time to those of the European Parliament, and that will create difficulty. That point has not been dealt with.
      Mr. Spearing: I am grateful to my hon. Friend. However good the scrutiny procedure is, it only allows vision, and does not allow for any influence or action on the Ministers or the European institutions.
      Leaving that aside, is my hon. Friend aware that the second special report from the Select Committee on European Legislation, of which I have the honour to be Chairman, suggested ways in which the work of the Committee could be slightly extended to give the House proper notice of all European developments. I should add that the report was unanimous and encompassed many views on this matter. Despite its name, the Select Committee was not able to report wholly on the very business before us today.
      Mr. Foulkes: I accept all the points made by my hon. Friend. I know that the House is grateful to the Select Committee, and especially to my hon. Friend as Chairman, for the work it does. I also know that he is the first to admit that the way in which it is able to operate is inadequate to scrutinise the burden of legislation that we get from the European Community. We are not doing it justice. Important matters are considered inadequately, late at night and in a cursory way.
      That brings me to another point that needs to be answered, which is the timing of debates. The squeezing in of important issues at an inappropriate time late at night or between other business so that no proper scrutiny can be carried out has been raised again and again. I accept that scrutiny is only one aspect of it and does not necessarily allow influence.
      5 pm
      As I said earlier, the power of the United Kingdom Government in the Council will be reduced. I mentioned the Luxembourg compromise. The House of Lords Select Committee on the European Communities said in its report, pages 6 to 8, that it will be difficult for any Government, in our case the British Government, to resist a united front of the Commission of the European Parliament and the rest of the Council. It is clear from the report—I think that its analysis is right—that a political momentum will build up behind a particular proposal and that although there may be a technical agreement in relation to the Luxembourg compromise it will be very difficult for the British Government to resist that momentum.
      Proposals which are amended by the European Parliament, the amendments of which are accepted by the Commission, can be rejected only by a unanimous vote of the Council. That means that the powers of the British Government are severely circumscribed.
      The Prime Minister stated, I believe in reply to the hon. Member for Southend, East (Mr. Taylor), that the last word remains with the Council. That is not much good if the only last word it is permitted to say is "Yes".
      Mr. Marlow: As I understand it, the hon. Gentleman was suggesting that the European Assembly or Parliament, whatever it is to be, can propose an amendment. The Commission could agree with that amendment. That amendment could be very radical and very much alter the proposal being put forward. The hon. Gentleman was saying that, unless the Council is unanimous in opposing that amendment, it would go through. The hon. Gentleman is saying that the Commission and the Parliament/Assembly together could bring forward almost totally new legislation unless all members of the Council — every country in the Community, at Foreign Minister level—were against it.
      Mr. Foulkes: The hon. Gentleman has underlined my statement and made it clearer. That is an exact description of what I understand the position to be.
      As the report of the House of Lords Select Committee says, the power of United Kingdom Ministers within the Council has been reduced, so the power of the United Kingdom Parliament has been reduced. It says that United Kingdom Ministers
      "may be outvoted more often. The intervention of the European Parliament is outside their control. They will have less opportunity …to influence the Commission through negotiation at the second stage …"
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      It also says that some legislative powers will actually be delegated to the Commission.
      Sir Russell Johnston indicated dissent.
      Mr. Foulkes: The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) may shake his head, but that is correct. The Minister will have an opportunity to contradict not only me but the report of the House of Lords Select Committee. The members of the Committee may not be elected—I have my reservations about that —but they still have an ability and understanding of the situation and have made their comments quite clear.
      Mr. Nicholas Budgen: I am sure that the hon. Gentleman will agree that we shall want a full explanation from the Minister because at an earlier stage she talked about this not being a zero-sum game. When it was put to her that those proposals would lead to a reduction in power both of the House and of British Ministers she was very keen to suggest that there was some way in which power could be expanded. I hope that we will get some explanation because since we have had the two very useful reports of the Select Committees it has become obvious that she is wrong.
      Mr. Foulkes: I know that the hon. Gentleman is as concerned about this matter as I am. We are in Committee and do not necessarily have the formal structure of Second and Third Reading and the Minister will have an opportunity of correcting the Select Committees, the hon. Member for Wolverhampton, South-West (Mr. Budgen) and myself if we are wrong. However, I very much doubt that all of us are wrong.
      I shall now come to the areas on which co-decision-making, the important extension of the responsibility of the Community, is taking place. It is important that we know exactly what areas are affected. Are they marginal; to our way of life? Are they peripheral matters? The areas are not peripheral or marginal; they are important. We are talking about article 7—
      "rules to prohibit discrimination on grounds of nationality"—
      and article 49—
      "measures to bring about freedom of movement for workers …by ensuring close cooperation between national employment services:
      (b) by systematically and progressively abolishing those administrative procedures and practices and those qualifying periods in respect of eligibility for available employment"
      These are important matters. The responsibility is going to be increasingly transferred away from the House towards Strasbourg.
      We are talking about article 56(2), which states:
      "directives for co-ordination of national measures providing for special treatment of foreign nationals on grounds of public policy, security or health."
      Article 57(2) refers to
      "mutual recognition of formal qualifications."
      and, of course, all the arrangements for the internal market.
      My hon. Friend the Member for Hamilton (Mr. Robertson) and others will participate in the debate later on the group of amendments dealing with the internal market. Samples of the areas concerned are speed limits for motor vehicles, public procurement arrangements, life insurance and mortgages, company liquidation, takeover bids and policy on state aid for coal, steel and shipbuilding or whatever. Therefore, these are not peripheral matters. They are central to our economy.

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      On top of all that, the Bill implementing the Single European Act introduces majority voting for the Council on a number of areas on which unanimity was previously required. The Single European Act talks of moves towards European union. It means greater integration, as we have seen in terms of the European monetary system. I know that the hon. Member for Harrow, East (Mr. Dykes) is in favour of that. It means a movement towards tax harmonisation. The official Opposition believe in cooperation with our European partners and within Europe. However, we are against moving towards a united states of Europe. We are against the kind of union that is implicit and explicit in the Single European Act and the Bill that implements it. That is why we oppose the Bill and ask the House to support amendment No. 2 tonight.
      Mr. J. Enoch Powell: When in 1978 the House ill-advisedly consented to convert the European Assembly into a directly elected body, it was predicted that a directly elected body, which was already endowed with the power to refuse assent to the budget of the Community and to dismiss the Commission, would soon discover and explore the potential powers which it would exercise, as in past centuries the House had made a similar discovery and exploration. The anxiety which was expressed on that score was strong on both sides of the House. As a result of that, what professed to be a protection was written into the European Assembly Elections Act 1978 which enacted:
      "No treaty which provides for any increase in the powers of the Assembly shall be ratified by the United Kingdom unless it has been approved by an Act of Parliament."
      Hon. Members who have looked at clause 3(4) of the Bill will notice that that is precisely what we are invited to do in approving the Bill. We do not need to argue whether the consequences of the treaty and the Bill are an increase in the powers of the Assembly. The Government say that that is so. The Government may seek to argue that that increase of the powers of the Assembly is not at the expense of the powers of the Parliament of the United Kingdom. That proposition rests on an important fallacy about the nature of power. There is no vacuum of power unexercised, unavailable, which is ready to be dished out to new occupiers and exercisers.
      At the moment, the power exists and it is shared between this Parliament and the institutions of the Community in accordance with a particular pattern. If the power of any portion of those institutions is increased, as the Government tell the House it is increased in respect of the Assembly, by the treaty and the Bill, it must follow that the effectiveness and real power—the political power—of the other elements, the other possessors, is diminished. Whatever is arrogated to the Assembly by the legislation and the treaty is deducted from what is available to this Parliament and, thus, to the people it represents.
      No unoccupied ground or unexplored territory can be colonised by the Assembly without a diminution in the control and powers of this House. We are discussing an actual deduction from the powers of this House so that those powers may be exercised by other bodies over which we do not have anything like the same opportunity of control.
      There is a kind of tripod in the institutions of the Community—the Council, the Commission, and what was hitherto called the Assembly. It is only through the Council that this House can assert itself. It is only in the
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      Council that the members of the Government who are answerable to this House can assert themselves. Of course, in the last resort, they can only assert themselves in the Council when there is decision by unanimity. Whether they decide in the Council by unanimity or otherwise, it is through the Council that this House still exercises a degree of power, on behalf of the United Kingdom, in the institutions of the European Community.
      A big shift is created in relative power the Council—its relative power in the tripod—by the treaty and the Bill. That power is transferred and inures to the benefit of the other two elements — the Commission and the Assembly. Anyone who has studied the co-operation procedure, as it is delicately called, with which the amendment deals will have seen the joint interest that the Commission and the Assembly have in co-operating with one another. Indeed, an almost corrupt deal has been struck between the Commission and the Assembly— a log-rolling or back-scratching arrangement between the two — whereby, if the Commission proceeds by way of the co-operation process, it can use the added power which has been attributed to the Assembly to strengthen itself and its intentions vis-á-vis the Council. Therefore, it is the Commission and the Assembly, jointly, which are given an accretion of power at the expense of the Council and, therefore, at the expense of this House — the Council being the only element which can be directly influenced and ultimately controlled by the Parliament and people of the United Kingdom.
      Sir Anthony Meyer: I wondered why the right hon. Gentleman used the word "corrupt" in that sentence. It seems a perfectly legitimate exercise on the part of the Commission to seek to extend its influence.
      Mr. Powell: All power tends to be associated in human experience with corruption. [HON. MEMBERS: "Oh."] It is not strange to hon. Members that methods which could indelicately be described as "corruption" are essential to the control and management of any democratic and elected Assembly. I hope that the House will not be too prissy about the use of that rather ugly expression. Two of the three elements in the structure of the European Economic Community can, by collusion with one another — by mutually supporting one another — weaken the third. If the hon. Member for Clwyd, North-West (Sir A. Meyer) prefers the words "collusion" and "conspiracy" to "corruption", I am prepared to make that concession.
      Mr. Spearing: Is the right hon. Gentleman more right than perhaps he first thought? The preamble to the Single European Act states:
      "the wishes of the democratic peoples of Europe, for whom the European Parliament, elected by universal suffrage, is an indispensable means of expression".
      If that is taken to heart as it is meant, the Commission will present proposals which are liked by the European Parliament but which together will be corrupting to the influence of this House.
      Mr. Powell: Before I conclude I shall refer to the nature of the Assembly and its claims to be democratic or parliamentary.
      I now turn to the three subjects covered by the group of amendments. The first is the embodiment by the Act in the law of the United Kingdom of what is called the cooperation procedure, which reduces the powers and opportunities of the Council in the event of certain

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      decisions being taken by the European Assembly. The second concerns the hitherto external powers of the Council to make additions to the associated membership of the Community. The third subject concerns the nomenclature of that body.
      5.15 pm
      I have discussed the consequences of the new cooperation procedure which is at the heart of the treaty. It is probably the prize which was most valued by those in the Government who secured agreement to the treaty. It represents an actual and literal transfer of power from one place to another within the institutions of the Community. The result of that procedure is that the input of the European Assembly alters the respective powers of the Commission and the respective power of the Council of Ministers in a manner which inevitably diminishes the influence and possibilities open to a member of the Council representing one of the member states of the Community.
      It is a machinery whereby, at the will of the Commission and the Assembly, the hand of this Government and, therefore, of this Parliament and the electorate of the United Kingdom can be weakened or tied. The matter does not need to be argued at exhaustive length, because the co-operation machinery, as it is set out in article 7, displays quite clearly what the consequences for control through the Council will be.
      It is useful to look at the effect of articles 8 and 9 which amend articles 237 and 238 of the treaty of Rome. As the treaty stands, under article 237 the decision to increase the membership of the Community is dealt with by the Council after the opinion of the Commission has been obtained. The new article which will replace that provides for the key power to be transferred to the Assembly. That can happen only after the assent of the European Parliament is received. The European Parliament is put in the key position in the expansion of the Community which was hitherto exclusively occupied by the Council of Ministers. If hon. Members will look at the consequences of article 9, amending article 238 of the treaty of Rome, they will see exactly the same process being applied to association.
      The Parliament is being inserted in the position of ultimate authority and control, which was hitherto occupied by the Council. It is another reminder and indication—it may be marginal in its practical effect but it is significant — of the triumph of the Assembly, as against the other institutions of the Community, which is represented by this treaty and the Bill.
      That brings me to the third topic—nomenclature. It is no small matter for the House of Commons to declare solemnly that the European Assembly is a Parliament and to bless that nomenclature, although it has been popularly used hitherto. "Parliament" is a word of magic and power in this country. We refer to "parliamentary sovereignty." We live under the sovereignty of the Crown in Parliament. Our history and political life would be unintelligible if Parliament were removed from that history. There is no other European nation of which the same can be said. There is no other European nation at the heart of whose identity and history lies its parliamentary assembly.
      When we proceed to accord the title "Parliament" formally and by the law of the United Kingdom to another assembly, we should be conscious of the symbolical nature of the act which we are performing. We are endowing that
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      institution potentially with the same sovereignty, powers and representative quality that we in this Parliament possess. It is an act of meaning. It is not something that we can dismiss as a mere formality, a matter of nomenclature to be hurried over. It is significant and, if there were any possibility of otherwise mistaking the meaning and importance of the treaty and the Bill, we should be put upon warning by this part of the legislation.
      The hon. Member for Clwyd, North-West interrupted the right hon. Member for Taunton (Sir E. du Cann) and asked what was wrong with calling the European Parliament a Parliament, because it was a democratic assembly. He said that it was an elected assembly, and he asked what was wrong with equating election with democracy. But merely to be elected is not to be democratic, in the sense that we understand it. There is a certain relationship between electorate and elected body upon which the very nature of parliamentary sovereignty and our claim to be a representative body depends.
      Our Parliament implies a homogeneous electorate. It implies a single nation which elects the disparate Members who sit together in the House. It is the Parliament of a united kingdom. The Parliament which assembles at Strasbourg is an assembly of those who have been elected in different nations, and, incidentally, under different electoral systems, to congregate together. They do not come together as the representatives of a single self-recognising community. The nature of that assembly is different in kind from the nature of this Parliament. We are performing a type of solecism in attributing the term "Parliament" to that Assembly. What we should not do is create the implications and hallow the assumptions which attach to the word "Parliament" when applied to the European Assembly. The European Assembly is not, in our sense of the term, a "Parliament" and it is not the wish of the people of this country that it should ever be a Parliament in the sense of being the ultimate repository of the legislative and executive powers under which the people of the United Kingdom are to live.
      By sanctioning these changes, and especially the change in nomenclature, we are perpetrating a lie in the face of Europe, implying that the British people voluntarily intend to surrender to the institutions of the Community those powers over themselves which hitherto have been exclusively vested in the House. They do not intend to do that. When they become aware that that is what is happening, they will put a stop to it.
      Sir Anthony Meyer: It is impossible to withhold admiration for the determination with which the right hon. Member for South Down (Mr. Powell) defends the shadow of the absolute sovereignty of this Parliament. I shall refer rather more to the substance of this Parliament's sovereignty. In his own eloquent, incorruptible way, the right hon. Gentleman fights against all change, however inevitable and inexorable.
      I should like to take up one aspect of that substance. The right hon. Member for South Down said that any powers taken by the European Parliament would be powers taken away from this Parliament. In theory he is correct, but he makes no allowance for the factor that underlies the purpose and existence of the European Community—the whole is greater than the sum of the parts. If the Community becomes effective, it will exercise real power and influence in the world. This Parliament, as a constituent member of that Community, may, in theory,

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      have surrendered some of its powers to a European Parliament, but it will exercise its powers, slightly limited, on matters in which it can influence events.
      It was sad to listen to the speech of my right hon. Friend the Member for Taunton (Sir E. du Cann). There is no hon. Member who has contributed more, from both the Front Benches and the Back Benches, to making this one of the great Parliaments of the world. We all greatly esteem his contributions to our debates.
      Mr. Budgen: Now put the knife in his back.
      Sir Anthony Meyer: This is no knife. I wish merely to express sadness at the fact that my right hon. Friend should so lack confidence in this Parliament's ability to put its ideas across to the rest of the world that he fears that, by allowing ourselves to be drawn into the operations of a European Parliament, we will prejudice the rights and privileges of the House.
      I felt sad, in a different way, when listening to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I know of his great devotion for many years to the cause of closer co-operation in Europe. He talked a lot of sense about the need to improve our arrangements. If those arrangements are inadequate, the fault lies, not in our stars, but in ourselves. It is up to us to evolve a better system for scrutinising the great mass of legislation from the European Parliament. It was sad to listen to the hon. Gentleman's nit-picking, mean-minded approach to a matter of vital interest to us all — how we can make parliamentary institutions in the European Community function more effectively.
      When Britain joined the European Community, there was one thing which the other Community states looked confidently towards us to provide—an example of how the parliamentary institutions of the Community could be made to function effectively. I am the first to admit that the solution which has been chosen of a directly elected European Parliament is not necessarily ideal. I see a possible difficulty in trying to treat this Parliament as though it were closely analogous to a national Parliament. There is a fundamental difference, because the European Parliament in no way sustains an Executive. None the less, it can and should play a vital role in controlling that Executive. This is surely a function that we should teach the European Parliament the better to fulfil instead of constantly carping and seeking to limit its powers and restrict contact between this Parliament and the European Parliament. In this respect Britain has been a great disappointment to the other members of the European Community, who looked to us, in this matter above all, to set them a good example.
      We have already heard much, and we shall hear a great deal more during the rest of the debate, about the restrictions which the new clause will place on the powers of our Parliament. I have already admitted that it will place some theoretical restrictions on it. None the less, by those timid steps in the direction of creating a European Community the better able to carry out its functions, and the better able to subject those functions to some parliamentary scrutiny, we shall create a Community which far more effectively than the present one can further the purposes of Britain's policy, economically and in foreign affairs.
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      Therefore, I warmly welcome the provisions of the agreement and shall have no hesitation in opposing the amendment.
      5.30 pm
      Mr. Michael Foot: I strongly support the amendment moved by the right hon. Member for Taunton (Sir E. du Cann). I join the tribute paid by the hon. Member for Clwyd, North-West (Sir A. Meyer) to the right hon. Gentleman, but I make my tribute absolutely unqualified in the sense that I shall be happy to support him in the Lobby. He has done a great service, along with the many other services he has contributed to the House of Commons, in bringing the matter before us.
      I am sad that I was not present on 23 April when the right hon. Gentleman made another important contribution on the subject. I recall that James Maxton once said that the House of Commons is a very dangerous place to be away from. I regret the fact that I was away from it on that day, especially because I was unable to vote then, although I shall vote for the right hon. Gentleman's amendment with all the more pleasure today.
      As hon. Members listen further to the debate they will have the experience that we had during our debates on the European Communities Act 1972, which we are now amending, increasingly recognising the growing significance of what we are discussing. When we debated the 1972 Act, people thought at the beginning that most of the Committee matters could be dealt with briefly, but we soon discovered that the issues became greatly enlarged. That is the case now. It should not be called the European Communities (Amendment) Bill, but the "European Communities (Concealment of Real Intentions) Bill".
      The Bill goes far further than was suggested by the Secretary of State for Foreign and Commonwealth Affairs when he introduced it on Second Reading. Naturally, I read carefully what he said then. My hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) enlarged on the matter when he presented it today. The more we discuss the Bill, the more it will be recognised that the Government must deal with it differently from the way they intended. No one can tell how long the proceedings will continue in Committee, but I hope that the Government will make up their mind immediately that they cannot deal with the Bill on Third Reading next week in the way that has been proposed. I hope that they will set aside a full day for the discussion. The more they listen to the issues, the more they will recognise that that is the proper course.
      I would not use words such as "corruption" or "corrosion", as did the right hon. Member for Taunton, to describe the processes by which those matters are discussed in the European institutions. There is not the slightest doubt about the truth of what the right hon. Gentleman says about the balance between the European Assembly and the other institutions of the European Community. Different powers are given to the different bodies in the European Assembly. In 1972, if we had been told that the European Assembly would have increasingly enlarged powers—if the European Assembly's rights and powers had been defended in 1972 on the grounds that the hon. Member for Clwyd, North-West suggested — the objections to the Bill would have been even stronger than they were, because we could have seen the mammoth transfer of power from this place to the other institutions. But it was concealed.

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      The transfer was concealed because it did not take place between this democratic Assembly and the Council of Ministers. The legislative powers were transferred, but, of course, the Council of Ministers was a different institution. No one knew exactly what sort of institution it was, because it was an extraordinary body. It was an executive body which also had legislative powers, and which was removing from this place the power of exercising proper legislative control over our actions.
      In 1972, we did something unknown in the history of Parliament. We transferred great chunks of legislative power from the House to an institution which had no proper legislative process. We agreed to do it because we were told that that was the only way in which the Community could be established. If we had been told at the same time "By the way, a hit later we shall introduce a little amendment Bill to ensure that the European Assembly and Parliament will control this extraordinary contraption, removing some powers from the House of Commons," the objections would have been even greater.
      I shall not discuss all the other matters which were presented to the country at that time. Many hon. Members will recall that we were told at the time of the referendum that there would be a great enlargement of our employment opportunities and our economic prospects. We were told that there would be no interference with the power of economic decision-making in Britain. Those were the prospects held before us. That was how the referendum was pushed through and the majority was retained. It makes it all the more important that the House of Commons should not proceed to the next stage without examining everything in detail and ensuring that every possible safeguard exists.
      We should pass the amendment moved by the right hon. Member for Taunton. I hope that we shall not be told, as we were at the time of the 1972 Act, that the entire Bill must be passed and that no clause could be removed without the agreement of the other countries.
      That was an infringement of the rights of the House, which was why some of us objected so passionately to the Act and the form in which it was presented. It was presented to the House of Commons without any possibility of amending even one clause.
      I hope that the Govenment will give us the absolute assurance that that does not apply to the Bill, that we can amend it as we wish and that we may have enough time to do it. That is what the House of Commons should do; if it does not, it will fail to discharge its responsibilities.
      Mr. Ian Gow: Although I did not have the good fortune to be a Member of this place and see at first hand the right hon. Gentleman's heroic opposition to the European Communities Bill, could he remind the Committee whether he was in the same Lobby as I was when I opposed the European Assembly Elections Act 1978?
      Mr. Foot: No. It is perfectly true, as the hon. Gentleman reminds the Committee, that I was a member of the Government who introduced that measure. As a member of that Government, I supported it and helped to carry it through. It is all the more necessary that we should prevent an extenson of the powers of the European Assembly, however it may be elected. I have been opposed to the extension of those powers, and I remain so.
      Of course, I understand that such assemblies have a natural power hunger. One does not blame the individuals
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      concerned. Some of my best friends are members of the European Assembly. Mrs. Castle could never be described as lacking power hunger. Even she has been able to restrain herself, however, so great is her allegiance to the authority of the House. We should follow her example.I am not surprised that the Italians and the Spaniards, who have just joined the Assembly, wish to make it stronger, although many of them will draw back, as we should draw back, when they see what really happens. The Parliaments of many member states, including the French Parliament, try to retain powers in their countries, although the French seek to do this differently because of the greater authoritarian powers vested in their President and executive.
      We must preserve every precious part of the power that we retain in the House. The right hon. Gentleman's amendment serves that purpose and I hope that it will be supported by the Government. Perhaps when the Minister replies she will show us the best way forward, which would be by allowing a free vote. That would settle the matter here and now. I hope that the hon. Lady will give the House an absolute assurance that the Bill will not be forced through the House with the insistence that every letter, comma and clause must be carried. She should give us an assurance that the Bill can be amended, and that: the House can apply its ideas to the Bill so that the result may be a better Bill, if indeed any Bill could emerge from such proper scrutiny.
      Mr. Teddy Taylor: Every hon. Member has agreed that the clause is one of a series which would remove power from the British Government and the British Parliament and transfer it to the institutions of the Community. Therefore, it is right and proper that we should think carefully about whether this is a sensible thing to do at present and especially on today of all days. Despite the solemn agreement made by all member states on 4 December 1984 that strict budgetary controls would be applied, we have today received a paper from the European Commission, which is only now available in the Vote Office, stating that the Commission will not have enough money to pay its bills, even on the basis of the further 1·4 per cent. VAT contribution. Even more worrying is the fact that this has come only two days after the Government's solemn assurance in a written answer that a 1·22 per cent. rate was more than enough for its requirements.
      I suggest, therefore, that we should consider not whether to give more power to the Community institutions, but whether we should take greater powers to try to control some of the excesses of the European Assembly and Commission. When discussing proposals and pledges, we should also remember that the agreement of 4 December 1984 gave a solemn pledge that member states would be given a monthly report on agricultural spending. I have asked the Prime Minister three times, and the Foreign Secretary twice, when we shall receive those reports. Not one such report has been produced. We must ask ourselves whether it would be wise to transfer more power and responsibility from the Government to the institutions of the Community.
      It is important that we should consider whether the European Parliament uses its existing powers in such a way as to justify more power being given to it. Hon.

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      Members have complained that the European Assembly does not have enough power, but it has some power. We must ask ourselves whether it uses that power responsibly.
      We need consider only two recent decisions of the European Court. The first related to complaints that the European Parliament had illegally and fraudulently given £27 million to political parties and had not asked for it back. Secondly, the European Assembly passed an illegal budget. The British Foreign Secretary and Attorney-General complained to the European Court about the illegal action. The battle is still being fought, but Britain has won the first round. Is it wise to give more power to that organisation?
      The crucial thing is that not many hon. Members are aware of the details concerning the power that will be transferred to the European Assembly and the reason for this is obvious. The House of Commons Library provided the excellent advice that, after studying the Single European Act, it was not clear as to how the new arrangements would work, nor what additional powers would be transferred. This is probably the most dangerous aspect, especially when we remember, as my right hon. Friend the Member for Taunton (Sir E. du Cann) said, that the Assembly has passed a resolution saying that it will exploit to the full its new powers, and do so in the context of a European union of member states.
      5.45 pm
      Mr. Eric Forth: Does my hon. Friend take any comfort from the fact that the existing powers of the European Parliament derive not so much from its original treaty powers as from the Iso Glucose case, which gave it considerable powers to delay legislation under the existing provisions? Does he take even greater consolation from the fact that the European Parliament has rarely got its act together sufficiently to exercise any influence over the EEC in any way, shape or form? What makes him believe that with any enlargement of its powers it will be able or prepared to take advantage of those powers in the future?
      Mr. Taylor: My hon. Friend is well aware that one of the Assembly's powers relates to budgets. He will know that it has had much influence, because it passed the illegal budget which caused a massive extension in the provisions made for spending by the Council. It has used its powers considerably.
      I shall deal with two matters which I hope will cause hon. Members some concern and persuade those who believe that this is a positive step forward not to increase the Assembly's powers. Will the extra powers be positive powers? If the Assembly is a bright, fresh democratic institution, will ideas be put forward to help solve the problems of the EEC?
      My reading, with which I hope the Minister of State will agree, is that the Assembly's new powers are almost wholly negative. They will stop things happening and stop the passage of reforms. That is the most dangerous sort of additional power to give to any democratic assembly.
      Paragraph (c) of new article 149 on page 6 of the Single European Act states clearly:
      "If the European Parliament has rejected the Council's common position unanimity shall be required for the Council to act on a second reading."
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      The Council's only defence, if the European Parliament should muck up something, or insert massive amendments, is to drop the whole business. Paragraph (e) states:
      "Unanimity shall be required for the Council to amend the proposal as re-examined by the Commission."
      The Assembly now has the power to change or reject something which the Council can overturn only unanimously. This would be unlikely, bearing in mind the fact that at least two member states are constantly looking for ways to give additional powers and responsibilities to the Assembly.
      My fear is that, instead of being a comparatively new legislative power or a power to consider expenditure, the Assembly will have the power to prevent things from happening and to block proposals coming from the Council of Ministers, which, in many cases, are desperately needed to reform the institutions.
      Mr. Marlow: Is not there a very grave danger that the Assembly, or Parliament, will indulge in power politics on its own behalf? There may be things which we would all appreciate and agree with in this House which the Community wants to put through. There may be things which the Assembly wants done through amendment to enhance its own prestige, power and authority. May it not seek to delay those which we would all agree with so that it can enhance its own power as a quid pro quo for agreeing to that which we would want?
      Mr. Taylor: That is my other fear. My hon. Friend has anticipated me. Sadly, in the EEC, as those who have taken part in it will be aware, things are not always decided on their merits. For example, five or six Councils sit in the same week. If one country wants something passed through one Council, it may have to do a deal to allow something else through. An example is the Single European Act. Although the British Government did not want it, the Prime Minister opposed it, the Foreign Secretary had the courage on this occasion to say he did not want it, and we were told that there was no need for it, we have a Single European Act. My understanding is that we agreed many matters, including strict budgetary controls, which turned out to be utterly irrelevant because they did not work. Matters are decided on package agreements one way or the other.
      I appeal to hon. Members who are anxious for the European Community to develop to ask themselves whether they feel that the powers in article 149 will help the Common Market in any way to become a better organisation. I accept that my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) would like the European Parliament to do the big stuff and to undertake a great deal of the decision making at present done by national Parliaments. He has advocated his case with great sincerity. I could understand it if he regards this as a stepping stone to that objective, but the powers in article 149 are wholly negative and will certainly not make the Common Market any better, even if the powers were used responsibly.
      I hope that hon. Members will bear in mind what my right hon. Friend the Member for Taunton said so eloquently, which was that the trouble was that nowadays we pass matters in dull, colourless language. The words do not mean a great deal to us and refer to general principles. We are all fully aware that the day will come before too long when our constituents and businesses and organisations in our constituencies will ask, "Why can't

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      you as a Member of Parliament do something about this?". Increasingly we shall have to reply, "I am terribly sorry but the power has gone entirely from us."
      Section 145 of the Single European Act gives massive new powers to the Commission. The erosion of the veto will mean that Britain will have far less say in decision making, and that laws will be imposed on us against our wishes. These new powers for the European Assembly will greatly diminish the powers of the Council to do anything except abandon its reports.
      Mr. Spearing: The hon. Gentleman has been suggesting that the powers are negative and would not help even the aspirations of the hon. Member for Clwyd, North-West (Sir A. Meyer). Does he agree that article 149(2)(c) states:
      "The European Parliament may within the period of three months referred to in point (b), by an absolute majority of its component members, propose amendments to the Council's common position"?
      If that change in the Council's common position is contrary to the views of Ministers of this House and is passed by an absolute majority of the European Parliament, does it not show that it has substantial positive powers, especially if the Commission agrees?
      Mr. Taylor: As the hon. Gentleman is aware, the procedure is rather complex. If, for example, the European Parliament suggests amendments, the suggestion goes to the Commission which introduces a revised package. The Council could make those changes only by a unanimous decision. Therefore, the Council has the power, either to accept the changes made by the Commission to the proposals put by the European Parliament, or to scrub them completely. We are all aware, bearing in mind the European Assembly's wishes to extend its powers and to extend harmonisation and expenditure, that the changes which the Assembly and Commission will propose will involve all those objectives. Therefore, there will be a choice of either abandoning the original reform which the Council wanted, or accepting the amendments which will probably be expensive and give further powers to the EEC. This new power will not enable changes to be made, but, sadly, will simply cause the Council not to get through some of the amendments and changes to new decisions which it wants. To that extent, I regard the powers as negative and dangerous.
      We know that the Common Market has some problems. It has a problem controlling its expenditure, which has been a complete disaster area. Despite all the promises and pledges, we have news today that the Common Market is insolvent and does not have the money to pay its bills for 1986. We know that the common agricultural policy is nonsense. Everyone accepts that. When £150 million a week is spent on dumping, destroying and storing food, something is wrong. It must sicken poor Mr. Geldof, who sweated his guts out to raise £100 million, to find that the Common Market spends 50 per cent. more every week on dumping and destroying food.
      What I say and what I hope all hon. Members will say is, "Why can't the Common Market get down to solving those problems before it looks for more power and responsibility?" For that reason I hope that we shall approve the amendment. It is the right way forward. If we do not, we shall bitterly regret this step in years to come.
      Sir Russell Johnston: It will not come as a stunning surprise to the hon. Member for Southend, East (Mr. Taylor) or the right hon. Member for Taunton (Sir E. du
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      Cann) that I do not accept their arguments. I wholly accept the need for a full and proper debate, but I am sceptical about it resulting in any sort of change. Even the right hon. Member for Blaenau Gwent (Mr. Foot) mentioned change. I have participated in these debates for approximately 14 years and I have never observed anybody changing his opinion. The House should take that into account. The more that the hon. Gentleman and I listen to each other, the more we are convinced that we are right and the other is wrong. That is a plain fact. [Interruption.]
      Mr. Bryan Gould: The remedy is in the hon. Gentleman's own hands.
      Sir Russell Johnston: The remedy lies with the hon. Member for Southend, East. I have entreated him on many occasions to take it.
      Sir Anthony Meyer: Does the hon. Gentleman want to make an exception of the right hon. Member for Blaenau, Gwent (Mr. Foot) on the subject of direct elections to the European Parliament and changing his mind?
      Sir Russell Johnston: It was a question not of a change of mind but of the pragmatic necessities of the moment.
      The Single European Act introduces only modest increases in the powers of the European Parliament. Certainly there are fewer changes than the European Parliament wants. The changes mean that the process of Community legislation is brought rather more out into the open and will be subject to better, fuller parliamentary scrutiny than has previously been the case. They will also oblige the Council to state its position more clearly, and the member Government represented on the Council to vote more openly. That is all to the good. They will have to make clear how and why certain decisions in the Council have been made, who made them and why they adopted that position. That is desirable. Anyone anxious for openness of government and for open covenants openly arrived at cannot but welcome the changes.
      Many hon. Members and others are worried about the way in which major legislative decisions are reached in the Council. To try to subject individual national Ministers after a Council meeting to national parliamentary scrutiny and review is a recipe for chaos. It would bring the whole Community procedure to a halt. The Community cannot be subject in the normal process of legislation — if, indeed, we want Community legislation—to a veto by a national legislature, whether it be the House of Commons or the Luxembourg Chamber of Deputies, after the agreement has been reached by the Council. The time to exert influence is before the agreement is reached.
      The House of Commons and the House of Lords, which all hon. Members will agree does exceptionally well, are entitled to examine draft Community legislation and to express their views to Ministers before they go to the decisive Council meeting. But in the last analysis, if there is to be Community legislation and if there is to be parliamentary supervision of that Community legislation, it can be achieved effectively only by the European Parliament.
      Mr. Marlow: When the Cabinet decides on legislation, it introduces a Bill into the House. Indeed, there may even be a White Paper first. The Bill is debated in the Chamber, in Committee, on Report, and on Third Reading and then goes to the House of Lords. Equally significant legislation

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      can come from the European Community. Is the hon. Gentleman saying that he does not believe that we should have any power whatever as the democratically elected Parliament of the United Kingdom to have a view on that legislation?
      Sir Russell Johnston: I did not say that. The hon. Gentleman dreams about the so-called parliamentary democracy of this Chamber, about which we hear so much. It is nothing like so marvellous as some suggest. I said that, knowing what proposals come up in the Council, the House should scrutinise them before Ministers go to the Council to make a decision. To try to do it the other way round is not practical or possible. We have the European Community, and if we want to be democratic we have to give the Parliament more power. It is unrealistic to refer ritualistically to sovereignty and its erosion. I never cease to be amazed at the persistence of nationalism in Europe despite its malign record. If we are to have democratic decision making in the Community, it can be done only through the Parliament.
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      I do not know how many hon. Members read the interesting article by Sir Henry Plumb in The Times on Wednesday.
      Mr. J. Enoch Powell: It was very bad.
      Sir Russell Johnston: That is a matter of opinion. The right hon. Gentleman's opinion is different from mine. The paragraph that I shall quote conveys the truth of the matter much more directly and clearly than the hon. Member for Northampton, North (Mr. Marlow) suggested. Sir Henry Plumb said:
      "The Single Act, if ratified by all governments by the end of the year, will certainly herald a transfer of sovereignty. Not a transfer from the national to the Community legislative structure, but a transfer from government and Commission civil servants to the democratically elected representatives of the people. The European Parliament is still a long way from being able to exercise its mandate over the majority of the Community budget, but this small extension of influence in regard to the internal market is good news for those who care about effective democratic control of our institutions, and bad news for the hardened professional civil servant who has long been used to usurping this function. That is the real transfer of sovereignty inherent in the Single Act."
      Mr. Cash: The hon. Member may recall that Sir Henry Plumb's article, which I have here as well, followed an article that I wrote in The Times last week, in which I pointed out the importance of maintaining effective scrutiny and control here in Westminster over decisions taken both in Brussels and by our Civil Service. Sir Henry Plumb makes it clear in this article that he shares my great concern about this matter. He shows that he, too, thinks that there is a role for Westminster as well as for the European Parliament. I should he grateful if the hon. Gentleman would be good enough to make that clear.
      Sir Russell Johnston: I admit to the human weakness of quoting articles with which one agrees rather than those with which one disagrees. There is no need for me again to go over the ground over which I went with the hon. Member for Northampton, North, which meets the point that the hon. Member for Stafford (Mr. Cash) is making. It is incredible that someone like Sir Henry Plumb cannot get into the House of Commons unless he queues outside or is brought in. He cannot get a pass to come into the
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      place. If we wish to have proper relations with Members of the European Parliament we should take a more civilised attitude than that. American research assistants find it easier to get in here.
      The core of the changes provides for the European Parliament, after giving its initial opinion on a proposal from the Commission, to have the right to amend or reject, within three months, the position adopted by the Council. If the Parliament does not exercise this right, the Council position prevails. It should be stressed that this new cooperative procedure does not extend to all Community decisions—something that has not been emphasised so far—but is confined to a limited number of them.
      It would be foolish to deny that there are risks of conflict between the three institutions. The challenge to all three institutions is clear. They must make a positive effort towards the closest co-operation, or at least consultation, at the earliest possible stage. For example, the Commission could extend the practice of informal discussions with the Parliament and its Committees before it formally publishes draft legislation. That is a sensible thing to do. While those Committees are subsequently scrutinising the proposals, the opportunity for discussion with the Council and the individual Governments with their own Parliament would enable effective scrutiny to take place.
      The Government are to be congratulated. The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) made a rather rumbustious assault on the Minister on the ground that the Government have rather changed their position, which is true. I would rather compliment them on this. That they and the Minister have seen the light is admirable and the Government should be congraulated, having treated the European Parliament rather badly before, on putting this behind them. They seem to have entered into the new spirit. I understand that, in the latter half of this year, it is planned that 15 of our Ministers will be addressing the European Parliament. That shows a different attitude, while also of course reflecting our Presidency of the Council.
      Perhaps the greatest challenge is to the European Parliament itself. Since 1979, it has not always been clear that it has fully found the direction that it wishes to take, or it has found it difficult to find a future direction. That is not surprising, because it has never had a Government or an executive as we have, but is nevertheless subject to the same natural political division as we have. Parliament will have to arrange its procedures to be more effective, and the challenges of where it sits and so on will have to be looked at carefully. A strong, consistent stand on the way in which it gets elected should also be taken.
      Because of my self-restraint and the pressures on time, I shall not dwell on the scandal of the way in which Members of the European Parliament are elected in the United Kingdom, which excludes a whole section of political attitude. This Parliament should not be proud of that. The constituency system is irrelevant to the European Parliament, which is concerned not with specific cases but with guidelines and general principles.
      On Second Reading on 23 April, I raised a question with the Minister about which she subsequently wrote to me on 30 April. I inquired about the proposition by the Dutch that, if the Commission is allied to a minimum of three member states within the Council, this would obligate the Council to proceed directly to a vote, which might accelerate the decision-making process. The

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      Minister's letter was a beautiful example of agreeing and not agreeing simultaneously, which I suppose is one of the delights of diplomacy. She said:
      "At present, it is for the Presidency alone to decide when to call a vote; and … the Presidency is often the best judge … though if a majority of member states made clear that they wanted a vote, that would significantly influence the Presidency's decision."
      There is nothing wrong with that.
      The letter continues:
      "Any individual member state or the Commission should, in the Government's view, be able to propose a vote when it thinks this appropriate, but not to determine when a vote is held. Calling a vote when the majority do not want one would be pointless."
      It would not be pointless. The whole point is that, if a number of Members consistently, over a length of time, prevent any votes being held, that is a means of putting off a decision. Sometimes the decision may be no, but at least one knows what it is.
      I draw the Minister's attention to the European Parliament working document A2–56/86, part I, which is a report on the use of the veto in the Council by Mr. Nord, the Dutch vice-president of the Liberal group in the European Parliament dated 30 May. It says:
      "the co-operation procedure established by the Single European Act between the European Parliament and the Council denotes the will of the Member States to improve the Community decision-making process and to involve the European Parliament in this process. To this end, it would be wise to take over the proposals formulated in the Dooge report with regard to voting rules: The Presidency must proceed to a vote where the Commission or 3 Member States so request. The vote must be taken within a time limit of 30 days."
      I would appreciate the Minister giving some account of what she thinks about that proposal.
      I cannot end without some brief reference to the speech of the right hon. Member for South Down (Mr. Powell). I have heard his speeches on many occasions and he seemed once again to be caught up with the mysticism which is inherent in nationalism. It almost seemed as if he would levitate during his speech. The right hon. Gentleman said that Britain was a "self-recognising community." We are not the same as the other communities across the Channel. By the clearest implication, we are also better than these other fellows across the Channel. A "self-recognising community" indeed. That sounds more like self-perpetuating tribalism. He used those familiar words, "control, veto and assertion". These are negative and fractious words.
      Right hon. and hon. Members must realise that Europe's problems and the problems of the Community will not be solved by some resurgence of nationalism, in so far as that has any real meaning any more. They will be solved only by political solutions, whether they be Conservative, Labour or Liberal. The proper forum for that, within the Community, is the European Parliament. I welcome this limited extension of its influence.
      Mr. Hugh Dykes: We need only remind ourselves of the traditional and heroic alliance manifested yet again between the speeches of the right hon. Member for South Down (Mr. Powell) and that of the right hon. Member for Blaenau Gwent (Mr. Foot) to oppose the amendment. We heard again that saddening and depressing recourse to the past.
      I agree with much of what the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) said about the self-delusion which Members such as the right
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      hon. Members for Blaenau Gwent and for South Down reveal about our system and this Parliament. He described their sense of fantasy and imagination which is in no way connected with the truth either of yesterday or of today. If anything, their view is a reverse of the truth. Their 'view must be par excellence the reverse. Unfortunately, the parliamentary system in the Euorpean countries — and there are many details, exceptions and constitutional traditions which we could discuss at great length but we will not do so tonight — where the power of the Parliament vis-á-vis the Executive, both the Civil Service part and the ministerial part, is weakest when the process is a self-sustaining ritual and which, as many commentators have said, is a quintessential and classical demonstration of the elective dictatorship.
      We can by all means say that there are many good and positive aspects of that system which enable Governments to go ahead on a rapid basis with the creation of new legislation. However, to pretend that that is not true and that there is some heroic mystical and perfect democratic function in this place is absurd. It is also absurd to imply that those terrible, ill-educated foreigners— ill educated in all matters of democracy and constitutions—have no idea about these sacred subjects. That is not only absurd; it is irresponsible. That idea would give people outside this House with a less elaborate education than the two right hon. Gentlemen I have mentioned the impression of something special which is phantasmagoric, self-imagined and absurd.
      Right hon. Members of such distinction and with such long parliamentary careers as those to which I have referred have a responsibility to the public. They should be more realistic about the limitations of our system. They should espouse its good qualities, but also say honestly and truthfully that there are many weaknesses —
      Mr. Foulkes: Will the hon. Gentleman give way?
      Mr. Dykes: I will give way later.
      They must be honest and say that there are many weaknesses in the system. However, that does not help us much in what we are considering today. We are considering the practical world and the complexities of these relationships between giant bureaucracies and the major, complicated decisions which must be made for the promotion of the economic and social welfare of the public in this country and of the other European states. To pretend that there is some special sovereignty syndrome in this place, which must not in any way be changed by accession to any treaty, is nonsense.
      6.15 pm
      Mr. Foulkes: The hon. Gentleman is attacking hon. Members on both sides of the House. However, he has not made any arguments in favour of the transference of' power away from this House to Strasbourg and Brussels in the areas of competence which I and other hon. Members described earlier. The hon. Gentleman has not given any reasons why these decisions can be better taken by the Community rather than by the United Kingdom Parliament or why we should agree to them. If the hon. Gentleman addressed himself to those points, we might listen to him rather more carefully than we are now, as we listen to the general assertions and attacks that he is indulging in.
      Mr. Dykes: That is the second part of the complete picture which I will discuss in a moment. However, it is

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      necessary as a preamble to that to establish what I am suggesting. Of course the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) would not accept that as he really is a good European.
      The Minister of State, Foreign and Commonwealth Affairs (Mrs. Lynda Chalker): He is a good European when it suits him.
      Mr. Dykes: I am grateful for my hon. Friend's correction. I believe that he wants to be more enthusiastic but his Opposition position prevents that.
      Mr. Foulkes rose—
      Mr. Dykes: I have given way once to the hon. Gentleman. If he can restrain himself, he will be able to speak later. I believe that I know what he wanted to say.
      Of course the hon. Member for Carrick, Cumnock and Doon Valley was right to allude to the second part of the picture. I simply do not like the false premise which was created at the beginning of the debate. That was a chemistry of nonsense. Those arguments are completely at variance with the truth.
      The additional powers that will accrue to the European Parliament are important. The stronger relationship of the European Parliament with the Council of Ministers and the so-called transference of powers are also important. These points have already been mentioned in paragraph 29 on page 10 of the 12th report of the House of Lords Select Committee on the European Communities entitled "Single European Act and Parliamentary Scrutiny".
      Mr. Deakins: Paragraph 28.
      Mr. Dykes: I will then refer first to paragraph 28 as I have been prompted to do so by the hon. Member for Walthamstow (Mr. Deakins). There is no effective parliamentary scrutiny procedure or mechanism for maintaining a strong surveillance of NATO decisions. That is a more powerful treaty when we consider its subject matter. Any treaty agreement in relation to that is more ominous in terms of the surrender of power from this place as a sovereign Parliament when compared to anything else in the European Community, however profound the European Communities are by way of the creation of a treaty base. All treaties do what is stated in paragraph 28.
      I intended, however, to refer to paragraph 29, which states:
      "The erosion of some of the power of national Parliaments was an inevitable consequence of membership of the Community."
      We have always known that and it was always made clear. That was a positive aspect and part of the recommendation of the keen Europeans. It was accepted by others who said that there would be a reciprocal benefit greater than that diminution of the intrinsic national power. Paragraph 29 continues:
      "It is liable to be accelerated by measures which make the Community more effective politically and economically."
      That is the centrality of the case. We can see how slow the Community has been to develop to the benefit of all member states and how the constitutional frustration can be overcome only by additional power-increasing measures for the European Parliament vis-á-vis other institutions. As the proponents have already said, these
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      powers are limited and modest and should not terrify me or others who are more dispassionate than I am about our membership of the Community.
      The paragraph goes on to say:
      "it is encouraged by the existence of the Community's own directly-elected Parliament."
      Once we as a sovereign Parliament, like the others in the member states, took that decision, rightly, I think, to favour direct elections — the right hon. Member for Blaenau Gwent was enthusiastic about it—the increased powers of that Parliament have to be rationalised as well. It is not a Parliament in the national sense of an Executive being present within it, as the right hon. Member for South Down said, but it is a true and developing Parliament in the sense of a trans-national body, perhaps akin to the developing, germinating United States Congress in the early days.
      Many similarities are now developing in the separation of powers. It will be greatly to the benefit of the new European entity and the European union of the future. That will not be a United States of Europe, so those fears are groundless. It will be a special new creation, not known in the world so far, but none the less one which will be greatly to the benefit of the economic progress of members of the public of the member states.
      However, there is an additional difference which must be brought out. I do not agree with the right hon. Member for South Down who said that there would be a straight net transference process of power from this place to the European Parliament plus a bit to the other institutions as well. He referred to there being no vacuum, but at least a semi-vacuum exists in the set up which has to be taken care of as well, and is effectively, by the Bill. That is an additional reason why the amendment should be rejected.
      The vacuum or semi-vacuum has been all the decisions which the Council of Ministers should have made in recent years at the suggestion and behest of the Commission, which has a constitutional duty to propose new legislation under the treaty, which it has not done for reasons of the overweening nationalism which exists in that body. The right hon. Gentleman may be pleased about that. The paralysis comes from the feeling that it has to agree unanimously because of the Luxembourg compromise, and the desire of the politicians in that Council, of whatever country, to stop progress in the EEC, even if that progress is not a direct reflection of any diminution of any national policies expressed in one or two member states. That at least is a semi-vacuum. By overcoming that by the proposals in the Bill we shall see that the Community can make the kind of progress that members of the public in all the member states want because they know that that is synonymous with rising living standards, the freedom that comes more and more from being a European as well as a citizen of an individual member state, and the feeling that Europe can survive and prosper only by acting more and more closely together through its developing and sophisticated parliamentary mechanisms.
      Mr. Deakins: Three of the amendments that we are debating in this group are in my name. Therefore, I hope that the Committee will bear with me if I take a few minutes to develop certain themes.
      The hon. Member for Harrow, East (Mr. Dykes) talked about Labour Members coming clean. I remind him that he and those whom he supported in the 1975 referendum,

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      and still supports, both the federalists and those who wish to see a European Government, should come clean with the British people.
      I have here a document put out by the British Government for the 1975 referendum. On two separate pages there is a headline:
      "Will Parliament lose its power?"
      Part of it says:
      "No important new policy can be decided in Brussels or anywhere else without the consent of a British Minister answerable to a British Government and British Parliament."
      Where does that assurance stand now in the light of the new co-operation procedure? I shall have more to say about the loss and weakening of the veto in the debate on clause stand part.
      The same document says:
      "Remember: All the other countries in the Market enjoy, like us, democratically elected Governments answerable to their own Parliaments and their own voters. They do not want to weaken their Parliaments any more than we would."
      Is not the clear implication of those words that there would he no weakening of the sovereignty of the British Parliament in the acceptance of the European Communities Bill in 1972? The electorate was misled by the hon. Gentleman and his friends in 1975, and they would no doubt go on misleading them again if there were a similar opportunity.
      Sir Russell Johnston: Can the hon. Gentleman justify a view in which he seems to be saying that he would prefer to give influence and authority to a British Conservative than to a German Socialist in determining legislation?
      Mr. Deakins: The only way that one could justify giving authority to anyone from overseas, however linked with us in co-operative agreements, would be as part of a European system of government, which I completely reject. I do not wish to see Britain as part of a federal Europe or any form of European union. However, we shall have these debates in more detail on later amendments. I hope that the hon. Gentleman will forgive me if I simply express my profound and absolute disagreement with him. He is a federalist. There is nothing wrong with that: it is perfectly legal. People should declare themselves rather more than they have done in debates such as this.
      I shall say nothing about the growth in the Assembly's power since 1973. In view of the undoubted wish of the Committee to proceed to a vote in a reasonable time on this group of amendments. I shall reserve my remarks on that aspect for the clause stand part debate. Indeed, I shall say little more on the issue of the veto.
      Amendments Nos. 43 and 45 relate to the change of name and the retrospective provision in clause 3. The Minister and the Foreign Secretary have been misled by their officials over clause 3. It would have been perfectly possible to deal with the change of name, regardless of what one feels about it—I am utterly opposed to it—without going to the length of introducing retrospective legislation. In effect, clause 3 rewrites history. It will expunge from the records of Britain any reference to a European Assembly. In future, all those references will be changed so that we shall be referring to a European Parliament. That is worthy of a totalitarian Government of the worst possible type—rather like the Communist regimes which continually rewrite histories. Russian history books contain no mention of Trotsky. Secondary legislation passed by the House of Commons in the past 14 or 15 years since we have been a member will contain
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      no reference in future to the European Assembly. I am sure that if it could the Foreign Office would like to rev, rite the history books as well.
      I do not see what advantage there is in that. A change could have been brought about perfectly simply by merely saying that, where the word "assembly" occurs in legislation passed up to the date on which the clause comes into force, it shall be taken in future as referring to the European Parliament. It is as simple as that. But the Foreign Office, which is now full of federalists—most of them advising the Minister—is telling the Minister and Parliament in the Bill that we must expunge the word "assembly" from our record. I challenge the Minister when she replies to give me any logical explanation of why this method was chosen rather than the method that I have suggested.
      The fact is that the Foreign Office does not like, and has never liked, the idea of an assembly. It has always been responsible for Ministers, including the Prime Minister, from the time that we became a member in 1973. calling it a Parliament when it was still legally an assembly. The Foreign Office did that for its own purposes and it has taken Ministers along with it.
      In the referendum campaign in 1975 the Assembly was called an Assembly and not a Parliament. If it had been called a Parliament, as it will be if the Foreign Office and Ministers have their way under this legislation, there might well have been a different outcome to the referendum.
      Mr. Cash: Does the hon. Gentleman recall that in evidence to the Select Committee on European Legislation on 26 March 1985 my right hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) said:
      "as is well known, we would not support the federal or quasi-federal interpretation of the concept"—
      by which he meant the concept of European union. In the light of that comment, can the hon. Gentleman explain how he sees us moving towards a federal or quasi-federal system of government in Europe in the terms that he has expressed it?
      6.30 pm
      Mr. Deakins: I apologise to the hon. Member for Stafford (Mr. Cash), because I shall not have time to go into the detail in which I would like to explore this set of amendents. I give him an undertaking that during the debate on European union I shall go into the matter in much more detail, because I shall have more time than is available to me now.
      The co-operation procedure has been the subject of a couple of Select Committee reports in this place and in the House of Lords. In this co-operation procedure there is a great danger not merely to the House of Commons and to the Government, but to the Council as a whole — to other member Governments. At present the Commission can accept or reject amendments passed by the Assembly. It can do that now, so why are we making such a fuss about the change in the co-operation procedure? The answer is that there is a fundamental and major change. In future, the Assembly will act on an absolute majority of all its members. It does not have to do that now when making amendments to Commission proposals and going up to the Council.
      That absolute majority will strengthen the Assembly's hand vis-á-vis the Commission. At present the Commission can say that something was passed by a fairly

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      small majority and that it need not bother with it and it can explain its action when it puts forward revised proposals for consideration by the Council. I am talking about legislation. That is an important matter for the House of Commons, because the House is our major institution concerned with legislation. Now we are proposing to introduce a rival.
      The Assembly's objections and amendments to Commission proposals will have much greater weight in future if they have to be carried by an absolute majority of the total membership of the Assembly. Like the Assembly, the Commission is basically a federalist-inclined institution, and for that reason it is likely in nearly every case to accept amendments to Commission proposals and to push them up to the Council under the co-operation procedure. That will mean a combination of the Commission and the Assembly against the Council.
      I say to the federalist and pro-European Members who somehow want to see us march towards European and economic and monetary union that they are laying up a lot of trouble for the Community in this new procedure. They will set two of the Community institutions against the third in a way that has not emerged so far.
      Mr. Forth: Does the hon. Gentleman agree that within what he says about the absolute majority there is a problem for an institution such as a European Parliament in that it has to get the bodies there? Will he accept my word that, from my 'experience of that institution, it is extremely rare for an absolute majority of Members even to attend, never mind for a majority of them to agree on a measure? Strangely enough, one of the safeguards is precisely the indifference or apathy of the members of that institution. I understand what the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) is trying to do, but one could make a similar comment about other legislatures. Will the hon. Member for Walthamstow (Mr. Deakins) take that factor into account when considering the point?
      Mr. Deakins: I am grateful to the hon. Member for Mid-Worcestershire (Mr. Forth) for his intervention, because he has experience in these matters and I have not. Once this Single European Act has been ratified and passed into law by all the member Governments there will be a major change. The apathy in the European Assembly will not continue for long once there is a prospect of exerting real power over Community institutions.
      I should like to turn to amendment No. 13 which is also in my name. The Assembly would be given veto powers not merely over new members, but over new associate members. At the start of our proceedings I raised a point of order to the effect that this was probably an important feature because it imposes a limitation on the royal prerogative. At the moment, in association with other Governments, our Government can make treaties and those matters eventually come to the House of Commons.
      The royal prerogative will be substantially affected by the new power given to the Assembly. It would be perfectly possible for the royal prerogative to be exercised in giving power to Ministers to sign a treaty and for all 12 of the appropriate Ministers in the Community to agree, but by a majority the Assembly could say no. That would diminish the royal prerogative. Whatever one thinks about its exercise, perhaps the Minister can tell us if the Queen's
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      consent has been notified to this diminution of an ancient right of the monarch and the Crown and the Queen in Parliament.
      We are laying up a lot of trouble for the Community and its further development by giving to the Assembly the power of veto on new members and new associate members. At present, new members and new associate members have to be approved not merely by national Governments, but, certainly in the case of Britain, by Parliament as well.
      One can easily foresee a clash between the elected representatives here, who give their assent to the admission of a new member country or to a new associate member following an agreement worked out by the Council of Ministers, and the Assembly, which will be able to claim to represent in some ways the people of Britain. It might arrive at a totally different conclusion. One can see a lot of clashes ahead between directly elected United Kingdom Members in the Assembly and those sitting in this Parliament.
      I know where my loyalties lie, and I hope that the loyalties of all hon. Members lie in the same place. In any clash we should put the interests, the views and the decisions of this Parliament over and above decisions taken by the Assembly. There will undoubtedly be some constitutional crises in the years ahead. I do not look forward to that. There will be many troubles in the Community, and we will not wish to burden ourselves with such troubles. That is another reason for opposing this accretion of powers to the European Assembly. In view of the points that I have made, I asked the Chairman if there could be a separate vote on amendment No. 13. Perhaps that can be considered when the time comes to vote.
      Mr. Bill Walker: I shall be brief, because I understand that we hope to close fairly soon the proceedings on this part of the Bill. Because I shall be brief, I hope that no hon. Member will think that I do not care deeply about what I am saying or that I have not given a lot of thought to my speech.
      I am anxious about the proposal to remove the power of veto, because at the time of the referendum the people of Scotland were given a clear pledge that the United Kingdom would retain the power of the veto. We shall be discussing that matter later. At the time of the referendum there was no qualification to that pledge, nor was there any suggestion that this could or would be changed. That is important. Those hon. Members who argue that this will not undermine our national sovereignty will have to answer to the people of the United Kingdom and tell them why at the time of the referendum they stressed the importance of this aspect, while now they are trying to suggest that this is quite a harmless little Bill and will not change things very much. They say that it is all a bit of a bore and do not undertand why we should spend time on it. It is neither a harmless little Bill nor a bit of a bore.
      This directly elected body will have its name changed if we accept the Bill. We are led to believe that the reason for the name change, and probably the reason for the retrospective nature of the name change, is that it has called itself a Parliament from the beginning anyway. It is argued that if through use and custom it has called itself a Parliament we should accept that by legislation. I find that argument fascinating. I remind hon. Members that I

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      am a Scot and a Scottish Conservative. It has been suggested by Opposition Members that we are a beleagured minority.
      Mr. Foulkes: An endangered species.
      Mr. Walker: We are in one sense, because we are the one party that is opposed to a Scottish Assembly, and hon. Members should note the phrase Scottish Assembly. Opposition Members may laugh, but I do not find it amusing at all. I was a Unionist before I was a Conservative. Unionism and union mean something to me. I have fought on that platform during the whole of my adult life, and that is not a matter for jest. The Union is fundamental to me. The Union of our Parliament and of our Crown is steeped in history and the Scots do not take lightly those who treat it with levity.
      Mr. George Robertson: How strong a Unionist was the hon. Gentleman when, in his own city of Perth, the then leader of the Conservative and Unionist party, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), made the famous declaration that the Conservative party was in favour of devolution and of a directly elected Assembly for Scotland?
      Mr. Walker: The hon. Gentleman must know that I have never embraced the nonsense of so-called devolution. When my then leader espoused it, as he did on the occasion to which the hon. Gentleman referred, he lost me as a friend. My right hon. Friend's place in the Chamber is directly in front of me and he might wonder why I murmur behind his back.
      The Scots Conservatives who are opposed to having a Scottish Assembly, in whatever form, realise, recognise and understand that all Assemblies, call them what one will— I take up the remarks of the former leader of the Labour party, the right hon. Member for Blaenau Gwent (Mr. Foot), who made a most interesting speech— will attempt to embrace more and more power. All Assemblies will want to do that and we should not be surprised that that is their wish.
      Liberal and SDP Members talk about narrowness when someone is not prepared to embrace the European structure and wants to change and improve it by moving to some sort of federalism. Yet these Members are advocating the introduction of an Assembly for Scotland, with all that that means. Indeed, they are giving support to the change in name from Assembly to Parliament. We have heard their spokesman, the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston), explain his reasons for supporting the change. I find it rather odd that the language which he uses when talking about Europe is different from that which he uses when talking about Scotland. There is nothing narrow and national about being a Scot or arguing that we should have a Scottish Assembly, as the hon. Gentleman says. Yet those of us who are opposed to wanting an Assembly in Europe are accused by the hon. Gentleman and his hon. Friends of being narrow and national. I have never understood the differentiation between Europe and Scotland. The demand for a Scottish Assembly seems to me to be fairly narrow and national.
      Sir Russell Johnston: Does the hon. Gentleman agree that there is no contradiction between arguing for powers that are appropriate at a European level and powers that are appropriate at a Scottish level? Surely the argument is
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      complementary. As we are on this subject, perhaps he will explain what quasi-federalism is. It is something that I have never understood.
      Mr. Walker: The issue is what the hon. Gentleman thinks is appropriate and what I think is appropriate in terms of powers. That is where we shall probably differ. There is no need to explore the matter further. I believe in the unitary Parliament of the United Kingdom being the voice of the people of the United Kingdom.
      More and more of my constituents are growing increasingly concerned at what we are proposing through this legislation. It can be seen that we are proposing that the Parliament, as it will be called, will have powers that can block the Council's proposals unless the Council disagrees unanimously with the Parliament's view. I would suggest that such unanimity rather unlikely when there are 12 member states including Italy, which favours extra-parliamentary power and rarely disagrees with the Parliament. My constituents are asking, perfectly properly in my view, "Why is it that we have to move along this route when Europe as presently structured and organised is not working effectively?" My hon. Friend the Member for Southend, East (Mr. Taylor) spoke on this issue at some length and I shall not bore the Committee by taking it up again.
      I have received a lengthy letter—it runs to about 20 pages—from an elector. It contains many questions, and some of them I cannot answer. I do not know the answers and I am hoping that my hon. Friend the Minister of State, Foreign and Commonwealth Office will be able to provide them. One question is as follows:
      "The solemn Privy Council Oath provides for those taking it to: (a) Be a true and faithful servant of the Crown. (b) Not to countenance any word or deed against the Sovereign, but to withstand the same to the utmost of their power, and to reveal it to the Sovereign. (c) To bear"—
      this is the paragraph that bothers me—
      "faith and allegiance to the Crown, and to defend its jurisdiction and powers against all foreign princes, persons, prelates, States or potentates."
      Given the royal prerogative and paragraph (c), one wonders whether our Privy Councillors are aware that the Bill will give powers to the European Assembly—
      Mr. Foulkes: Potentates.
      6.45 pm
      Mr. Walker: I am not talking about potentates. Ih the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) wishes to use that term, he may do so.
      I want to hear my hon. Friend the Minister of State give a clear and unequivocal answer to the elector who has gone to enormous trouble to write the letter from which I have quoted. I am staggered by the number of questions that he has asked. I have not repeated them all, because if I were to do so it would take the whole evening. I have selected the question which I have read because I do not know the answer to it. After the Bill is enacted, will Privy Councillors be breaking their oath if at some future date we determine a policy on behalf of the monarch which is overturned by the European Assembly or Parliament?
      Mr. Allan Rogers: Perhaps the hon. Gentleman will consult his Conservative colleagues in Europe. My hon. Friend the Member for Sheffield, Central (Mr. Caborn), who was chairman of the British Labour group in Europe, can testify that he led the only

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      group in the Assembly that opposed the extension of the Assembly's powers. When I was a Vice-President of the Assembly, I sat on the Institutional Committee that was chaired by Mauro Ferri. The main Rapporteur was Altiero Spinelli. The Conservative members of that committee sold Britain down the river time and time again. They are doing that constantly in Europe to conform with and to obtain the votes of their lobby in Britain, which is to he found in the farming community in particular.
      Mr. Walker: The hon. Gentleman must be aware that I consult my hon. Friends who are members of the European Assembly. The fact that I consult them does not mean that we reach agreement. One of the problems with the present structure in Europe is the difficulty that is experienced in reaching agreement. When we come to matters of constitutional change that are of importance to the United Kingdom, the result very often is a collection of strange bedfellows. I have never been ashamed of the group with which I keep company, whoever and whatever its members may be. I am content that the group is defending our unitary Parliament, the position of our monarch and all the things about which I care deeply.
      Mr. Spearing: I shall be as brief as the hon. Member for Tayside, North (Mr. Walker), whose remarks I wish to take up. The hon. Gentleman has hit on one of the central dilemmas. The power of the monarch and of the Crown is affected because legislation which comes direct from Brussels does not pass through the House and does not receive Royal Assent. That means that the Crown is bypassed. It is possible that years ago Privy Councillors operating in this area would have been had under the law of praemunire but often people do not understand what is going on.
      The irony is that Her Majesty Queen Elizabeth II, having opened the conference centre in her name on the other side of Parliament square—
      Mr. Foulkes: Elizabeth II of England.
      Mr. Spearing: Account should always be taken of Scots susceptibilities, as they were in 1688.
      It is ironic that the conference centre is going to be used for many discussions that will not be public. In effect, that will undermine the rights and privileges of this Parliament and of the Crown, especially in the next six months.
      Mr. Dykes rose—
      Mr. Spearing: I must move on—
      Mr. Dykes: The hon. Member had to give way because he must understand that his assertion is thoroughly irresponsible. As Chairman of the Scrutiny Committee on the EEC, he must consider carefully before making such reckless and irresponsible statements.
      When Britain joined the European Community it was a treaty decision and all such treaty accessions have a limiting effect on our sovereignty. The idea that the monarch's intrinsic, residual powers are in any way reduced by the whole process is thoroughly misleading. All legislation of the Community, either by treaty accession or by direct examination—in this place through directives —is, ipso facto, approved by the House of Commons.
      Mr. Spearing: I must apologise to the hon. Gentleman, but that was not the reason why I gave way. He is quite
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      right about my susceptibilities on the matter of representing the Scrutiny Committee. I am sure the hon. Member would agree — the Minister has given me an answer today that a Gymnic series of meetings are taking place in that building. Any Council decisions taken in Brussels—they are discussed informally outside—which are regulations, which he and I study each week, do not require, by legislation, Royal Assent. He is giving his assent to me in that respect, but in that respect the Crown is completely bypassed. I think that is a matter of fact, from which he cannot dissent. In the light of that, I would invite him—I am aware we are in Committee and I am sorry to divert it—to answer that point. If he can deny that the Crown is being bypassed by direct legislation from Brussels, whether Parliament is involved or not, he should say so. I believe that to be the fact. The hon. Member for Harrow, East (Mr. Dykes) has not risen, although I would like to debate this with him, so I shall proceed.
      Mr. Cash rose—
      Mr. Spearing: No, I must proceed.
      The question we have before us today is whether or not the Assembly/Parliament will have more power. I refer— as a sort of test — to the statement made by the Foreign Secretary on 23 April, 1986:
      "The new co-operation procedure will produce a greater awareness in council and Parliament of each other's views, but it will make no decisive change in the institutional balance because the last word remains with the Council."—[Official Report, 23 April 1986; Vol. 96, c. 322.]
      That is the text I wish to pursue, because I believe that even the Foreign Secretary is unaware of the difficulties which will ensue. The words which the right hon. and learned Gentleman used were carefully drafted, especially the word "decisive". On narrow grounds—the Minister will know what I mean—the Foreign Secretary is correct because, in theory, the Council may have the last word.
      On 7 May, the Minister and I had some discussions about this in a public Select Committee and we had a slight misunderstanding about the matter. The Minister was right because, in procedural terms, the Council does have the final say.
      Mrs. Chalker indicated assent.
      Mr. Spearing: The point is that the Council has a final say in entirely different circumstances. I invite the Minister to intervene at any time and say whether I have got this wrong.
      At the moment, the Commission has to take account only of the opinion of the Assembly/Parliament. I call it that for convenience. It does not have to take account of anything it says. In those articles and legislation subject to the new procedure—of course, it is not the whole of the treaty of Rome — the Commission must take account, first of all, of the fact that it can get a majority through the Council and, secondly, that the Assembly may knock it back by an absolute majority. Therefore, before it starts to present its proposals to the Council, the Commission is in a new ball game.
      As long as the majority of the Council agrees, the Commission can get legislation through, but it must be sure that the legislation will not be knocked back by a majority of the Assembly. As the parliamentary draftsmen, Whips and civil servants are constrained by the majority in this House, so the draftsmen of the Commission — before it gets going— will have to take account of the new constitution.

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      Certain legislation is subject to this second round procedure—it has not been described as such, but it is the second round. The answer I received from the Minister today is important as it relates to what constitutes the common position of the Council. Until now, everybody has said that the Council comes to a decision and makes its common position on legislation known.
      The Minister stated:
      "The Council's common position will be determined by the member states in accordance with the relevant Treaty article as amended by the Single European Act. The common position will be drafted following discussion in the Council. We shall, as now, play our full part in these discussions and in establishing the common position which will be conveyed to the European Parliament by means of a Presidency communication containing the text of the common position."
      In other words, the Council's view will not just be on the legislation as such; it will be on the legislation accompanied by a common position. New article 149 means that the European Parliament can propose amendments. Subsection (d) states that the Commission
      "shall, within a period of one month, re-examine the proposal on the basis of which the Council adopted its common position, by taking into account the amendments proposed by the European Parliament."
      Therefore, the Commission can either change the proposal or, if it wishes, completely adopt it. Many hon. Members have suggested that the latter is the more likely procedure.
      Subsection (e) states:
      "The Council, acting by a qualified majority, shall adopt the proposal as re-examined by the Commission."
      Therefore, if the Assembly or Parliament, by an absolute majority, inserts amendments, which it is entitled to do, and the Commission adopts them, which it is entitled to do, the Council can adopt them by a complete qualifying majority. That means that even two member states cannot block the Council. As the Minister has not interrupted me, I assume that she gives her assent to this procedure.
      Mrs. Chalker indicated dissent.
      Mr. Spearing: The hon. Lady shakes her head; that is signally unfortunate, because I had invited her to interrupt at any stage if I had got it wrong. These are vital matters. I refer again to the phrase used by the Foreign Secretary:
      "it will make no decisive change in the institutional balance" —(Official Report, 23 April 1986; Vol. 96, c. 322.]
      It might not be decisive in the strict adjectival sense, but it will certainly be a decisive change in the balance. It is true that the Council can assert itself by unanimity, but that is a very different procedure from the present one. What the Foreign Secretary has done — I make no apology for saying so—is what he did many years ago in debate with my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) and the right hon. Member for South Down (Mr. Powell), then the Member for Wolverhampton, South-West. In those debates the right hon. and learned Gentleman used phrases which implied one thing but which, on examination, meant something else.
      It is clear that the balance of institutional influence and power will be changed, although the constitutional mechanisms for decisions may remain. Any other claim by the Government, the Minister or the Foreign Secretary is misleading the House and the British people. That is not just my view. I conclude by repeating the view of the Select Committee on Foreign Affairs in its conclusions in paragraph 50(ix):
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      "Although the new 'co-operation procedure' leaves the final decision-taking power with the Council, there is, in our view, little doubt that if the Commission and the Assembly are in accord in respect of any particular item of legislation, the freedom of the Council to adopt a different position will be inevitably circumscribed as a result … the new procedures will therefore undoubtedly reduce the ability of individual Member States to pursue their national interests to the point of actually obstructing the progress of new legislation regarded as acceptable by the majority".
      It is for those reasons that I support the amendment.
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      Mr. Jonathan Aitken: I agree with the hon. Member for Newham, South (Mr. Spearing) that we are discussing an important change in the balance of power. If this admirable debate has done nothing else, it has convinced the Committee and, I hope, the country that we are discussing matters of considerable significance. We have also flushed out the Government, who have been trying to pass off the Bill as some minor trivial amendment matter.
      Only a few weeks ago, on 5 March 1986, my hon. Friend the Minister said, as reported in column 338 of the Official Report, that the changes that we are discussing are "modest in their legal scope". On Second Reading, she dismissed the intervention of my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), who had suggested that the changes meant an enhanced role for the European Parliament. She said:
      "That is a dangerous fallacy. That is not the position; life is not a zero sum game."—[Official Report, 23 April 1986; Vol. 96. c. 390.]
      Whatever that hideous piece of Euro-jargon means, it probably characterises the effort made by some of the other Euro fanatics in the House to imply that we are discussing minute and trivial points.
      I rather liked the speech of the right hon. Member for Blaenau Gwent (Mr. Foot) when he said that the Bill should be renamed the European Concealment of Intentions Bill. However, I could have retorted that his speech might have been renamed the European Recantation of Past Mistakes speech. After all, my hon. Friend the Member for Eastbourne (Mr. Gow) elicited from him the confession that he had felt it necessary to vote in favour of the Bill that originally set up the European Assembly.
      Mr. Foot: It was not the Bill that set up the Assembly, but the Bill that introduced direct elections to it.
      Mr. Aitken: It is in any case the legislation that is the father of this present mistake.
      In 1978 I was one of that relatively small band of hon. Members who, along with the right hon. Member for South Down (Mr. Powell), opposed that original legislation, because I felt in my bones—it did not need the wisdom of Solomon to do so—that it would be only a matter of time before directly elected members of the European Assembly became dissatisfied with its impotent and advisory status, and would come back seeking the red meat of legislative power. This legislation begins to realise those fears. The Bill's provisions mark a significant opening of the door towards legislative power for the European Assembly.
      I have three points to make about the new legislative power of the European Assembly. The method is described with the somewhat euphemistic label "the co-operation procedure". It sounds harmless enough, but in reality the

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      co-operation procedure is a Trojan horse which will inflict many a painful defeat on Britain's national interests. It will begin the long-term decline of this Parliament's sovereign powers. The co-operation procedure means that the Council of Ministers will in future have to adopt certain legislation in co-operation with the European Assembly. The European Assembly can amend such legislation, and in order to overrule those amendments the Council of Ministers must reject them unanimously.
      It is, of course, obvious that unanimity in the Council of Ministers is most unlikely. Apart from the endemic desire to divide and split within the Council of Ministers, the Italians are great supporters of more power for the European Parliament or Assembly, and rarely disagree with it. My hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) intervened with some philosophical thoughts on why the Italians feel that way. I happen to take a different view, which is that the political heirs of Cavour and Mazzini, who united a rabble of minor states, principalities and duchies less than 150 years ago, when there was no real tradition of democratic assemblies of Parliament, do not feel as some of us do, in our bones, for the traditions of a Parliament that has governed our country since the days of Simon de Montfort.
      We care about parliamentary sovereignty. We understand it, and we do not want to see its powers eroded. We do not want to see this House being downgraded to the status of a county council.
      Mr. Cash: Some misleading analogies have been drawn between the convergence of the city states and principalities of Germany or Italy and what is going on in any move towards a federal Europe. There is a world of difference between combining nations that each has a separate and deep heritage and combining countries that have a common heritage. There is a world of difference between a pan-European convergence towards federalism and a convergence within each of the existing countries, as happened in the case of Germany or Italy. It is important to emphasise that point.
      Mr. Aitken: That is a profound point, and I basically agree with it. In the jargon of the European Parliament or Assembly, it is easy to forget some of the big differences of heritage and tradition. There is a danger that any fears are brushed aside as exaggerations. In this case, it is said that everything will be all right because the Council of Ministers will still have the last word in disputes with the European Parliament or Assembly. Under the Bill, it is technically true that if the almost inevitable squabble occurs, the European Parliament's amendments can be deemed eventually not to have been adopted. It would be a sort of lobster quadrille, with two steps forward and two steps backwards and not much happening.
      That is the optimist's view of how small these changes will be. But once the legislation has been enacted the European Assembly or Parliament will have much more muscle. It will be able to put immense pressure on the Council of Ministers to bow to its wishes. It is bound to use that muscle to push its power down the road of greater legislative influence. Indeed, the warning signs have already gone up in big clear letters. As my right hon. Friend the Member for Taunton (Sir E. du Cann) said in
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      his admirable speech, the European Assembly passed a resolution on 16 January 1986 which is worth quoting. It declared that the European Assembly would
      "exploit to the very limit the possibilities offered by the single Act and instructs its Political Affairs Committee to ensure that this is done; reaffirms that it will pursue its endeavours in the spirit of its draft treaty of Union with the aim of a genuine political and economic union between the states of the Community."
      There could not be a clearer sign than that.
      Amendment No. 3 seeks to remove the new power given in article 8, which enables the European Parliament to veto new members of the Community or new association agreements with third countries. I do not like that power, because it effectively allows it to blackball new candidates for the Common Market. Turkey is a prime candidate for admission to the EEC. A lot of wrangling is already going on. Greece is battling to exclude Turkey, for reasons that have little to do with the interests of the Community. As a result, it is hard for Turkey even to obtain association status, let alone entry to the Common Market. We have moved a long way from the days when Greece tried to seek entry to NATO. There is a nice story that, when Mr. Attlee was in charge of the Cabinet, a long discussion took place. At the end of the discussion Attlee said, "I fought against the Turks myself at Gallipoli — good fighters, rather have them on our side than against us"—and they were in NATO. It will be much worse if this goes through. Already we are hearing talk of a southern alliance of some of the farming states of Portugal, Greece and Spain. They could easily unite in a parliamentary sense to block the entry of Turkey. I am, therefore, against this power being granted.
      On the nomenclature, whether we should call the organisation an assembly or change its name to a parliament, I was fascinated by, and agreed with, the rather romantic, almost mystical, musings of the right hon. Member for South Down when he enlarged on the true meaning and nature of a parliament. Coming down to something that we would all understand, when we call ourselves Members of Parliament and with some pride put "MP" after our names, we all know what we are talking about, and our fellow countrymen know what it means, whereas the letters MEP mean almost nothing in terms of clear understanding. I have always thought that the "E" stood for emptiness.
      The danger, I believe, is that for the first time we are here giving the possibility of real meaning and real power, and an MEP will be somebody who can do something in terms of legislative power that will change the status of this sovereign Parliament. That is why I am against it.
      Mr. Ron Leighton: The hon. Member for Harrow, East (Mr. Dykes), who seems to have left the Chamber momentarily, was critical of, and appeared to ridicule, the phrase "a self-recognising entity" when applied to the British people. I think that that is an extremely good description. We all recognise ourselves as being members of a political unit. The proof of that is when there is an election. Sometimes we win elections and sometimes we lose. Losing is painful, but we do not question it. We accept that we are members of a political unit and that we have lost, and we hope that we shall win next time. We accept it, even though we consider that the policies of the party that has defeated us are damaging to

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      our interests because that is the democratic wish and decision of the political entity to which we belong. It is a question of loyalty.
      I wonder whether that loyalty and the recognition of entity could conceivably be transferred to some great amorphous group of a dozen nations if an assembly or parliament not elected by us or removable by us were to carry out policies that we thought were damaging to us. As one hon. Member said, if we take this view, does it mean that we are superior to other nations? Of course it does not. I am certain that the French see themselves as a recognisable entity, but I do not think that the French would transfer those feelings of loyalty to this other body.
      The first reason why I wish to support the amendments is that the Single European Act, in its preamble, states:
      "the European Parliament, elected by universal suffrage, is an indispensable means of expression"
      of the wish of the people of Europe. That is not true. Why should we be invited to support a statement that is apparently untrue? If it were indispensable, people would have voted in the election. What proportion of British people voted in the European Assembly elections? I think it was less than one quarter. I am certain that in Newham many voters have never heard of the so-called European Assembly, they are not interested in it, and did not vote for it. The idea that it is an indispensable means of expression is nonsense.
      I do not think that the so-called European Parliament will ever be a focus of the loyalty of the British people. We were invited to give it extra powers. Where will those powers come from? They cannot be conjured out of thin air. If the European Parliament is to have extra powers, they have to come from us. We will have fewer powers in the Westminster Parliament, as will be the case in the other national Parliaments in the Community. That is bad, not because it is taking away powers from us as individuals, but because it is taking away the rights of the people of this country, exercised through us. That is what is being undermined. This institution, Assembly, or so-called Parliament is not elected by us or removable by us. As powers leave us to go to that Assembly, we should become something rather like a county council with limited delegated functions. We would be transferring powers to untried institutions outside this country beyond our control and not answerable to us.
      7.15 pm
      Our political freedom and liberties will be undermined. Our sovereignty will be damaged. I know that many people think that it is old-fashioned to use the word sovereignty and that it is somehow a reactionary idea. I do not accept that. This country gave sovereignty to all the ex-colonies of the British Empire—it was then held to be a very progressive thing to do. Now we are being asked to give up our own. Sovereignty is the right of people to run their own country in their own way. It is the right to democratic parliamentary self-government. There is nothing reactionary about that. It is the most precious possession that we have. Ask those countries that do not have it and they will testify to how valuable democratic parliamentary self-government is.
      Our present liberties and freedoms have been fought for and achieved by the struggles of our forefathers going back to Magna Carta, the Bill of Rights, the Chartists, the Reform Bill and women's suffrage. We have inherited these rights and liberties as Members of this Parliament.
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      We are the custodians of those rights and liberties. We are responsible for handing them on to future generations We certainly have no mandate to surrender or abandon these freedoms to institutions outside this country, not elected by us and not responsible to us, and I do not think we would be forgiven if we did so.
      What we should be doing is dispersing the institutions of government to the regions, bringing them closer to ordinary people, making them more responsible to ordinary people, and encouraging the participation of ordinary people. However, this is a giant stride in the opposite direction, making the institutions more distant, less representative and more inhuman. It would be a severe blow to our parliamentary democracy. I agree that in future, if constituents come to us to complain about this or that, we will have to say, "It is no good coming to us, you must go and see Herr somebody or Senor somebody on the continent because the powers are there." People come here to lobby us. I sometimes feel a little cynical about that. What do they think they are achieving by lobbying us? But it is right and proper that they do so. Think of the situation if they felt that it was not worth coming to the British Parliament. Where would they go?
      Matters will be decided, not here in the sovereign Parliament of Westminster, but in Brussels or Strasbourg. Is that healthy or right, or the road we want to go along? I am certain that it is not. It is not a point of view that I support.
      Mr. Marlow: I wish to say a few words first about amendment No. 3, which seeks to delete from the Bill the power that will be given to the European Assembly, or Parliament, to veto the application of new members to the European Community. If each and every country, national Government and Parliament in the Community wishes another country to join the European Community, why should the European Assembly, or Parliament, have any status or view on the issue? My hon. Friend the Member for Thanet, South (Mr. Aitken) suggested that it would have a black ball power. I think that it might he more sinister than that. It would give the power of blackmail to the European Assembly. It would allow it to say, "Yes, you may all want it, but we do not want it. We will agree to what you want, provided that you give us something that we want." That is why, in a nutshell, I oppose the granting of this power.
      We are debating a Bill which the Government said they did not want and which the Prime Minister said was unnecessary. If the House were to accept these amendments, I believe that we should be doing the Government a service. The Government do not want the Bill, and the House does not want the Bill. Let us throw it out.
      The Minister of State, my hon. Friend the Member for Wallasey (Mrs. Chalker), will tell the House about the advantages that the Bill will confer. She may be able to persuade the House that it should accept the Bill without these amendments. Let us wait to hear what she has to say. The treaty was ratified by this Government and the other Governments in the Community. I am sure that the Government will accept the will of the House. If the House wishes to delete various aspects of the Bill, I believe that the Government will be quite content for that to happen. The powers that are being taken away are not the powers of the Government, but the powers of this House. Therefore, it is this House that should decide.

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      I take as my text some quotations from the report of the House of Lords Select Committee on the European Communities:
      "Any enhancement of the importance of the European Parliament will tend to shift the balance of Parliamentary responsibility from the Member States to Strasbourg …the United Kingdom Parliament exercises no control over Community legislation other than through the voice and vote of United Kingdom Ministers in the Council of Ministers…any weakening of the power of United Kingdom Ministers is felt equally by the United Kingdom Parliament…The powers of the United Kingdom Parliament will be weakened by the Single European Act."
      The hon. Member for Walthamstow (Mr. Deakins) referred to the referendum. There was no debate or discussion then about weakening the powers of this House,and there was nothing in the Queen's Speech about bringing before the House a Bill to reduce the powers of this House. There has been no suggestion that because a referendum was held when we joined the Community another referendum should be held on this massive change in the powers of this House compared with the powers of the Assembly. The Government have not put the case before the public. They have not gone to the public, in glorious technicolour, and said, "Yes, there will be a change in the powers of the House of Commons and the powers of your Parliament will be reduced." That has not been said, loud and clear, and it is up to Back Benchers, as the Government are not doing it, to say it.
      The most important function of this House is to secure democratic control and accountability. The amendments would secure democratic control. My hon. Friend the Member for Harrow, East (Mr. Dykes) and the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston), who speaks for the Liberal party on these matters, said that nothing happens in this House, that we control nothing, that this is an elective dictatorship and that this House does not matter, so why should it matter if these powers are given to the European Assembly?
      In a previous Session of this Parliament the Government introduced a Bill which abolished the metropolitan counties. We decided that those creatures of this Parliament should be done away with. It was a major Bill and there were major debates upon it. There was a Second Reading, a Committee stage, part of which took place on the Floor of the House, a Report stage and a Third Reading. The Bill went to another place. Major amendments were made to the Bill. It was a major constitutional issue. My right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) looked upon it as the greatest constitutional issue of the day. Where is he now?
      We decided, within our powers, to do away with those institutions—those creatures of this House. This Bill takes powers away from both the British people and this House and gives them to the European Assembly. It increases the power, role and significance of the Commission, the European Court of Justice and other countries within the European Community — small countries which have votes, in majority voting, which are beyond the relevance of their size. Is this not a big constitutional issue? If the Local Government Bill was an issue of major constitutional significance, what is this? That Bill took up weeks and months of parliamentary time. This much more significant Bill is expected to go through the House virtually on the nod. The heritage of
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      our people and the power and influence of this nation's democracy are being cast on one side in three or four short parliamentary days.
      The right hon. Member for South Down (Mr. Powell) waxed eloquent when he told us about the distinction between a Parliament and an Assembly. He pointed out that there is a difference between a Parliament and an Assembly. We know that there is a difference between a Parliament and an Assembly, because when the European Assembly was established the first thing that it sought to do was to call itself a Parliament. It arrogated unto itself a title that had not been given to it, because it knew that that title had greater significance, and by arrogating that title to itself it knew that it would have more power.
      The European Assembly, or Parliament, has a very important role to play. European legislation is very complex. It is formulated by the Commission. The Assembly, or Parliament, is co-located with the Commission. It knows the Commissioners and it works alongside the Commission building. During the formulation of Community legislation the Assembly, or Parliament, exercises a valuable and worthwhile influence. That is right and proper. However, the Assembly, or Parliament, also has ambition. If we remember our "Julius Caesar", Brutus and his colleagues "did" Julius Caesar, not because they were worried about his role or about whether he was doing his job, but because he became ambitious. That is what this House should be worried about. We know what has happened in the past. If we pass this Bill, do we know what will happen in the future?
      Let us concern ourselves with the democratic control that is exercised by this House. The European constitution is different, complex and developing. We are unaware of so many things that are going on, and so many things are set out in such a way that we are expected and supposed to be unaware of them. People do not want us to know what is happening. They want a fait accompli. They want things to be forced upon us that we cannot control.
      How will the Bill, without these amendments, affect our democratic control? First, it will give more power to the Assembly. [HON. MEMBERS: "Get on with it".]. Hon Members on the Opposition Front Bench think that this issue is of such small significance that time is important and that we should wrap up the debate, but this is one of the most significant issues that has been discussed and debated on the Floor of this House. I am sorry that in the position of responsibility that he holds the hon. Member for Motherwell. North (Mr. Hamilton) does not understand that.
      Any institution assesses an issue in various ways, as we do — Left versus Right, special interests and regional differences—but the Assembly has another ingredient. It is concerned simply for itself. It is concerned for its own power. The Assembly may be democratically elected, but on certain issues the only decision that it will make will be based on whether it enhances the prestige, reputation, power and significance of the European Assembly. Is that democratic?
      7.30 pm
      We have already discovered this week that the European Court of Justice can make decisions about social payments made by individual nation states within the Community. We never anticipated that. As we increase the powers of the other institutions within the Community, we

      529
      shall also increase the powers of the European Court of Justice. Laws will be made and decisions taken by this politic court, not by our political forum.
      The preamble to the Act says that it will:
      "transform relations as a whole among their States into a European Union."
      This political court will use the preamble in making its decisions, over which we shall have no power, and to enforce them and move us towards European union. As many hon. Members have said, if the powers of the Commission and the Assembly are increased, our Ministers will have their powers reduced.
      With regard to majority voting, hon. Members have not noted so far that we shall have 10 votes within the majority voting system, whereas Belgium, Holland, Denmark, Greece, Luxembourg, Portugal and Ireland taken together will have 28 votes. Yet their populations are smaller than ours. Every Irish citizen has five times as many votes in that institution as every British citizen. Is that democracy and fairness? All those small countries together can block measures going through the Community. We cannot do so, with a greater population. We and Germany together, each with our greater populations, cannot block things that they can.
      There will be ganging up by the smaller nations, who have always been in favour of federalism, because that is how they achieve influence and power. Those nations will gang up. The institutions of the Community will gang up. What power will our Ministers have then?
      My hon. Friend the Minister will be addressing the House very soon. I say to her that our one safeguard is the national veto. My hon. Friend owes it to the House to explain just how secure that veto will be under the new powers. My hon. Friend owes it to the House to tell us what influence the European Court of Justice will have under these arrangements on our national power of veto within the European Community.
      We are being asked tonight to give more powers to the European Assembly — that tower of Babel. The only reports that we get from it deal with how its members wish to spend more public money for their personal and private extravagance. We are being asked to give more power to the institutions of the European Community. How have they used that power so far? What has happened to the financial mechanism that was to keep expenditure under control? What has happened to the common agricultural policy, which was taking 60 per cent. of Community expenditure when we joined? We were promised that it would take 40 per cent. of the budget, but now it takes 80 per cent. How can we trust them to make our laws and look after the interests of this country?
      This is an important constitutional issue and I hope that hon. Members will support the amendments.
      Mrs. Chalker: For the sake of right hon. and hon. Members—I understand the desire of the Committee to have two votes on the amendment — I shall draw together these issues as clearly, factually and speedily as I can. I shall not touch on issues that do not arise from the amendments.
      In respect of the co-operation procedure between the European Parliament and the Council of Ministers, which is covered by amendment No. 2, it may help the Committee if I explain again what is involved. There have been many wild and factually incorrect assertions. Therefore, I shall tell the Committee exactly what is involved.
      530
      The European Parliament already has the right to be consulted under some 17 articles of the treaty. The Single European Act provides in chapter II for 10 articles— five in the EEC treaty and five new ones—where the procedure will be changed.
      The co-operation procedure is designed to enable the Parliament to make its views known, and for the Council to take account of them before positions are set in concrete. The 10 articles to which I have referred are mostly measures affecting the internal market. Under the 10 articles, when a proposal goes to the Council, it will discuss it and adopt a common position. Thereafter, if the European Parliament votes for amendments to the proposal by an absolute majority of all its members, then both the Council and the Commission will have to take account of those amendments.
      As my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) has said, it is highly unlikely that every Member will be there, given the performance of that Parliament to date. There does indeed have to be an absolute majority of all the members. Where the Commission agrees to change its proposal to accommodate the Parliament's amendments, then, as now—and I say this twice over — the Council can further change the Commission's proposal unanimously. It is for the Council to do so acting unanimously.
      Where the Council accepts the revised proposal, then, as now, it will vote according to the relevant article of the treaty. That would be done not by unanimity, but by qualified majority. However, if the European Parliament rejects altogether the common position of the Council, which it can do only by absolute majority, the Council can still adopt the proposal unanimously. At present. that is required for many of the Council acts, such as those under article 100.
      During the debate, hon. Members on both sides of the Committee have expressed the fear of an alliance between the Commission and the European Parliament, or that. the Parliament will reject the Council's common position and that it will then be difficult to achieve the unanimity required to push the proposal through, especially if there is an alliance between one member state and the European Parliament.
      Were that to happen, we should he no worse off than we are now with the current requirement for unanimity that some hon. Members wish to retain. In practice, I cannot see that that will be a real risk. For a start, to reject or amend a proposal, the Parliament will have to muster an absolute majority of all its members—260 out of the 518. In practice, very few proposals before the European Parliament command an absolute majority in favour.
      Secondly, we are talking about proposals that will have originated with the Commission and on which Parliament will have already given an opinion. Unless the Council has changed the Commission's proposal out of all recognition —which it can do only unanimously under the existing treaty rules—then the Parliament will be looking at a proposal that may already reflect its view. It is much more likely that the Parliament will propose amendments rather than reject proposals altogether. Where it proposes amendments, the position remains as it is now, as I have explained.
      However, if the Commission and the Council have laboured hard on a proposal that can command majority support among member states, the Commission will not lightly accept amendments that could destroy its majority

      531
      and lead to a proposal lapsing through lack of support. In this context, it is important to remember that the Council is under no obligation whatsoever to accept Parliament's amendments. There is no question of those amendments going through unless the Council votes against them unanimously. They go through only if there is a qualified majority in favour of them. If there is no qualified majority, the proposal will lapse after three months. That applies only under those articles that require a qualified majority.
      Mr. Spearing: Will the hon. Lady give way?
      Mrs. Chalker: I have been very patient throughout the debate, and I am reaching the end of my remarks.
      Mr. Spearing rose—
      The Temporary Chairman (Sir Michael Shaw): Order. The hon. Lady is not giving way.
      Mrs. Chalker: The European Parliament is in a position to influence proposals, and that position is clarified by the Single European Act.
      My hon. Friend the Member for Taunton (Sir E. du Cann) asked what would happen in the event of a dispute between the Commission and the Parliament and who would be the arbiter. My right hon. Friend will have appreciated from my account of the co-operation procedure that no arbiter is needed. The Council can take its decision whether or not the Commission and the European Parliament disagree. After one month the Council can act whether or not the Commission has reacted to the opinion of the European Parliament. That is the exact position.
      The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) spoke about the three main thrusts of the debate, although it was very early in the debate. I have written, as hon. Members have already quoted, on the issue of scrutiny; and the Government have, as the hon. Gentleman knows, accepted the recommendations of the Scrutiny Committee on improved arrangements for scrutiny.
      Mr. Spearing: I appreciate the careful drafting and words that the hon. Lady has just used. However, I do not think that anything that she has said is incompatible with what I quite carefully said earlier. If she is challenging what I have said, would she say so now or perhaps look at the draft and let me know by letter? The hon. Lady is trying to say that nothing has changed. If it has not changed, why is clause 3(4) telling us that there is more power to the Assembly?
      Mrs. Chalker: I will look through the hon. Gentleman's remarks. I have stated the exact position as clearly as I know how. I shall compare his remarks with what I have said, and, if necessary, write to him. I shall be coming to the hon. Gentleman's latter point shortly.
      The hon. Member for Carrick, Cumnock and Doon Valley and other hon. Members were worried about the reduced power of the Council. The power of the Council as the decision-taking body in the Community remains as before. The Council will have the last word on all decisions, and it is in no way bound to accept amendments proposed by the European Parliament. My right hon. Friend the Member for Taunton drew attention to the vote in the European Parliament which he said expressed its
      532
      determination to exploit the new procedures. That vote was 206 to 63, as one hon. Member commented. To have any proposed amendment considered, the European Parliament would have to do a lot better than that. Thereafter, such proposed amendments will not be accepted unless the Commission adopts them as part of its proposal and unless the Council votes to accept them.
      The hon. Member for Carrick, Cumnock and Doon Valley also talked about the Council of Ministers' power to block. The Council can only change a proposal of the Commission by unanimity. There is no change in that. That is exactly as it is at present. We are talking not about co-decision with the European Parliament, but cooperation in areas where we want to see progress, especially the internal market, which is the subject of our next debate, where the European Parliament has consistently voted for progress. That is what we also are seeking to achieve.
      There have been many challenges as to why all this is necessary, and it has been said that it is not necessary. I refer my right hon. and hon. Friends to what was said by my right hon. and learned Friend the Foreign Secretary to the Foreign Affairs Committee, because that was challenged by the hon. Member for Carrick, Cumnock and Doon Valley. My right hon. and learned Friend made it clear that we had earlier thought progress could be achieved without treaty amendment, but that we had secured our objectives in the limited treaty amendments which we succeeded in negotiating. He said:
      "So this is a way of achieving what is necessary for Britain in a…good way."
      I would go further. Other hon. Members have said that the Prime Minister should not have been involved. It was the Prime Minister who negotiated the changes to the treaty. She commended them to the House as an important step towards enabling this country to realise more fully the benefits of membership of the European Community. I hope that my hon. Friends who were quoting the Prime Minister in their support of these amendments realise that she has taken their concern into account and come to this conclusion at the end of that consideration.
      Several hon. Members rose—
      Mrs. Chalker: I will not give way.
      The Temporary Chairman: Order. It is quite clear that the hon. Lady is not giving way. Hon. Members must resume their seats.
      Mrs. Chalker: I am trying to help the Committee, because it wishes to move—
      7.45 pm
      Mr. Budgen: On a point of order, Sir Michael. Unless we are able to get to our feet to invite my hon. Friend to give way, we have no opportunity—
      The Temporary Chairman: Order. As I said before, the hon. Lady clearly is not going to give way and she has indicated as much. Therefore, hon. Members must resume their seats.
      Mr. Budgen: Further to that point of order, Sir Michael. Could you tell us how we are to know that my hon. Friend is not giving way? I did not see her give any indication.
      The Temporary Chairman: I informed the hon. Gentleman.
      Mrs. Chalker: I shall now turn to amendment No. 3, to which a number of hon. Members have spoken. That amendment deals with the question of the European Parliament's power over new accessions.
      Mr. Marlow rose—
      Mrs. Chalker: The opinion of the European Parliament is already required on new accessions. Under the new procedure, new accessions will go to the European Parliament for its assent. The consent of this and every other national Parliament in the Community will still be required for new member states to join the Community. Therefore, there is no change in the role of national Parliaments in approving new accessions.
      Sir Edward du Cann: On a point of order, Mr. Leadbitter. I apologise for interrupting my hon. Friend the Minister, but I wonder whether you would give us some assistance. I appreciate that you have only just come into the Chair and did not hear the earlier exchanges. My understanding is that we are in Committee. My understanding of the Committee stage is that it is customary for there to be a good deal of give and take. I know that the Committee wants to make progress, but this is the only opportunity that Back Benchers have of putting questions to my hon. Friend the Minister on matters which are of supreme constitutional importance. We all agree about that. Surely it is in accordance with the best traditions of the House of Commons that if there are doubts the Minister who is replying should give the opportunity for misunderstandings to be rectified. Is that not the normal procedure in Committee?
      The Temporary Chairman (Mr. Ted Leadbitter): The Chair recognises the traditions of the House of Commons. Plainly, if the hon. Lady or any right hon. or hon. Member indicates that there is no wish to give way, it gives other hon. Members the right to come back when the hon. Lady or other right hon. or hon. Members sit down. In Committee, the traditions of the House are upheld, and the right hon. Gentleman will rise when the hon. Lady has finished.
      Mr. Budgen: On a point of order, Mr. Leadbitter. I hope that I am not making a sexist remark, but sometimes ladies change their minds. If the Chair assumes complete consistency, it does not give them the right to change their minds in a way which is not known to males.
      The Temporary Chairman: There is no change of mind. It is traditional in Committee that if a right hon. or hon. Member wishes to rise on the subject matter of the amendment, he is free to do so.
      Mrs. Chalker: I do not want to upset my hon. Friend the Member for Wolverhampton South-West (Mr. Budgen). I will give him his sexist remark and give way.
      Mr. Budgen: I will wait.
      Mr. Teddy Taylor: How can the hon. Lady say that the powers of Parliament to agree to the admission of new members are not changed when this Bill gives the European Assembly the right to veto the decisions of national Parliaments? In other words, even if this Parliament. the French Parliament, the Dutch Parliament and all the others agree to Turkey coming in, if the European Assembly says no, then, under this new Bill, and
      534
      only under this new Bill, it will not happen. Does the Minister accept that that is the position and that there is a fundamental change in power?
      Mrs. Chalker: This Parliament will continue to have its existing role in approving new accessions.
      Mr. Taylor: It could be overruled.
      Mrs. Chalker: The overruling would be by the national Parliaments of the individual countries. Article 237 deals with the accession of new member states. Article 238 deals with association agreements with third countries or groups of countries. Such agreements would be concluded by the Council under those articles of the EEC treaty. That requires the assent of the European Parliament by an absolute majority of its members. It refers not just to those present and voting; it is the 260. At present, under both articles, the European Parliament is consulted, but the Council has no obligation to act. The consultation still takes place without any obligation. The new articles give the right to approve or disapprove new accessions or association agreements.
      The Members of the European Parliament are elected by the member states. They are not elected by some foreign body. They are elected by members of the European Community states. That does not change the power of this Parliament, which still has to continue to approve new accessions.
      Mr. Budgen: My hon. Friend has prayed in aid the support of the Prime Minister. Has not the Prime Minister reluctantly agreed to a package, part of which had the disadvantage of having to agree to the Single European Act? I thought that the Prime Minister believed and hoped that the advantage to this country would be a system of firm financial control. It is not possible to consider that package without explaining to the Committee whether, in my hon. Friend's opinion, the advantage of firm financial control has been achieved. Many Conservative Members believe that the package has been entirely disadvantageous. We have the Single European Act, but the hopes of financial control have proved to be nothing but a dream.
      Mrs. Chalker: I know how concerned my hon. Friend is about the financial package. I understand his concern because I share it. In budgetary matters we must, and shall, remain within the 1·4 per cent—
      Mr. Cash rose—
      Mrs. Chalker: I should like to complete my answer to my hon. Friend the Member for Wolverhampton, South-West.
      My hon. Friend the Member for Southend, East (Mr. Taylor) referred to a written answer to a question by my hon. Friend the Minister of State, Treasury. He stated:
      "We estimate that the highest rate of VAT contribution for 1986 implied by the Council's Second Reading budget of last December is 1·22 per cent. The actual rates for the year"—
      this is the part my hon. Friend did not quote—
      "will depend on the outcome of discussions on a new 1986 budget which will begin after the European Court has delivered judgment on the 1986 budget dispute."—[Official Report, 23 June 1986; Vol. 100, c. 531.]
      My hon. Friend knows that we are awaiting the judgment of the European Court on the 1986 budget. Until then, it will not be clear exactly what the figures are. That is why my hon. Friend the Minister of State could not give my hon. Friend the definitive and final answer he seemed

      535
      to suggest he should. There will not be an increase in that 1·4 per cent. ceiling before 1988. Any change in that ceiling could be achieved only by the unanimous agreement of all member states. I have said, on behalf of the British Government, that that will not change. Therefore, there will not be unanimous agreement of all member states, and the 1·4 per cent. limit will remain until 1988. To change anything in that period would require unanimous agreement.
      I can honestly assure my hon. Friends the Members for Southend, East and for Wolverhampton, South-West that, whilst I share their concern about the budgetary position, we are determined to reduce not only agricultural surpluses but the costs in order to manage within the total budget to which we are committed.
      Mr. Cash: My hon. Friend and other hon. Members referred to the Prime Minister and her view regarding the concept of federalism. Does my hon. Friend agree that on 5 December 1985 the Prime Minister made it abundantly clear? She said:
      "I do not believe in the concept of a united states of Europe, nor do I believe that it would ever be attainable. The whole history is completely different, so I agree with the right hon. Gentleman about that matter. I am constantly saying that I wish that they would talk less about European and political union. The terms are not understood in this country. In so far as they are understood over there, they mean a good deal less than some people over here think they mean.—[ Official Report, 5 December 1985; Vol. 88, c. 432.]
      Mrs. Chalker: My hon. Friend has made a quotation that I intended to use a little later. I am grateful that he has saved me the trouble of doing so. I shall refer to the other amendments, otherwise hon. Members will be—
      Mr. Marlow rose—
      Mrs. Chalker: Mr. Leadbitter, I feel that I have given way as much as other hon. Members wish me to do. What I need to do now is to comment briefly—
      Mr. Marlow: Tell us about the—
      Mrs. Chalker: My hon. Friend has a very high voice at times. I can hear him over the murmurs of approval for what I have just said.
      The benefits of co-operation are to get a better and speedier movement of the things which are necessary, not only for this country but for other countries in the Community. The hon. Member for Walthamstow (Mr. Deakins) spoke about amendment No. 13 concerning association agreements. The Bill, and through it the Single European Act, gives the European Parliament a new opportunity — I have never said otherwise — to play a constructive role regarding association agreements without diminishing the role of the Westminster Parliament or any other national Parliament. It is most unlikely that the European Parliament would wish to hold up association agreements on which the European Parliament had been consulted, because that would damage the relationships which it is constantly seeking to improve.
      This has been a somewhat lengthy debate. The problems which many hon. Members see are very much more matters of their imagination than facts.
      The hon. Member for Walthamstow spoke of his anxiety regarding amendment No. 45. There is a good reason for drafting the subsection as it is. It is necessary
      536
      to ensure that former and present Members of the European Parliament who served while the institution was called an Assembly rather than the European Parliament continue to receive the pensions payable to them under the European Assembly (Pay and Pensions) Act 1979, as amended by the Parliamentary Pensions Act 1984. Without subsection (3), which, in the hon. Gentleman's eyes, is retrospective on the day that subsections (1) and (2) come into force, all the references will be to the Parliament, and the previous service of a representative to the Assembly would not count towards his pension. He would then receive a much lower pension. He would not receive the return for which he had contributed. That is the reason for that wording.
      8 pm
      The hon. Member for Walthamstow asked me about the royal prerogative. There is no change in the exercise of the royal prerogative. Any agreements that now require the approval of the House will continue to require that approval in future. We are talking about agreements not between this country alone and another country, but involving the whole Community, and it makes sense for the European Parliament to be involved. Such agreements will still require the approval of every member state in accordance with its constitutional procedures.
      Other hon. Members have raised a number of questions and I have tried to cover them, but, in the light of the debate, I cannot see the fallacy that the right hon. Member for South Down (Mr. Powell) put before us. The Single European Act adds to the opportunity of the European Parliament to play a constructive role. That is what we have all sought. We have sought to move business faster. Because this involves a change in the powers of the European Parliament, the approval of the House is required in accordance with section 6(1) of the European Assembly Elections Act 1978, which provides:
      "No treaty which provides for any increase in the powers of the Assembly shall be ratified by the United Kingdom unless it has been approved by an Act of Parliament."
      Those changes do not cut across the rights of national Parliaments. The Westminster Parliament, like any other national Parliament, will still have the last word in assenting to new accessions. National Parliaments still have the last word in the Council of Ministers.
      Mr. Rogers: No.
      Mrs. Chalker: I know that the hon. Gentleman could not be here for all of the debate. I do not blame him for that. That is no criticism of him.
      Mr. Rogers: I was in the Select Committee on the Channel Tunnel Bill.
      Mrs. Chalker: The Council of Ministers has the last word.
      The subsections which have been debated in the past three and a bit hours bring the term "Parliament", which has been used in official and legal practice, into line with usage since 1962. It would be self-defeating if we were to accept amendment No. 51 or others of the same ilk because we would partially allow in the long title some cases of previous usage to carry on. That would result in confusion. The wording of the Bill has been designed to sweep up all possible references.
      I remind the Committee that, in the last and in previous European elections, all parties used the term "European

      537
      Parliament". We do not want confusion between the two terms, European Parliament and European Assembly. I very much agree with the comments of the hon. Member for Cynon Valley (Mrs. Clwyd) on Second Reading, that it is
      "extraordinary that, so long after joining the European Community, we are still arguing about whether the institution should be called an assembly or a parliament."—[Official Report, 23 April 1986; Vol. 96, c. 354.]
      It is not an argument in which the country as a whole has any interest. The organisation is universally known as the European Parliament. It is directly and democratically elected. It does not make legislation, and there is nothing in the Bill which will cause it to make legislation. It therefore makes sense for the treaty to reflect common usage and to change our law to avoid any confusion.
      We have had a long debate on these amendments. It has been useful for right hon. and hon. Members to air their views, but I believe that we should now conclude our deliberations. I advise the Committee that none of the amendments in the group is acceptable to the Government.
      Mr. Marlow: I asked my hon. Friend the Minister whether she would address herself to the Luxembourg compromise and the power of the veto. She said that she was capable of changing her mind and answering questions later. Will she give the Committee the security that the veto will continue to exist and that the Luxembourg compromise will be safe? Will she assure the Committee that, if the Luxembourg compromise is tampered with in future, she will bring the Bill before the House for consideration again?
      Mr. Budgen: On a point of order, Mr. Leadbitter. I see that a member of the Whips' Office is near you. I hope that you will not allow a vote on this issue until my hon. Friend the Minister has answered the point put forward by my hon. Friend the Member for Northampton, North (Mr. Marlow). This is a Committee stage. If the Government are not prepared easily and courteously to answer questions put to them, they are bound to suffer the disadvantage that will arise if the Committee does not wish the measure to proceed to a vote. I hope that these points will be very much in your mind when you decide whether to receive the advice from the Whips' Office
      The Temporary Chairman: The hon. Member has made an assumption. I understand why he has made it. There is some anxiety to deal with the business before the Committee in a manner approved and accepted by it. I give the assurance that this Chariman will comply wholly and strictly with the Standing Orders that control the Committee. No one will influence my rulings.
      Mrs. Chalker: I remind my hon. Friend the Member for Northampton, North (Mr. Marlow) that I said at the beginning that I would concentrate on those amendments that were before the Committee because I believed that that would meet the convenience of the Committee.
      The question of the Luxembourg compromise has been raised before, and it is bound to come up in later groups of amendments. The Luxembourg compromise is not a legal rule. It is not affected by the Bill in any way. I therefore believe that we should deal with it in detail at the point at which the matter comes up.
      Mr. Bill Walker: I rise because, if I understand what my hon. Friend said, she may deal with my contribution later. She has not referred to my speech or to the direct questions that I put to her.
      Question put, That the amendment be made:
      The Committee divided:. Ayes 132, Noes 202.

      Division No. 235]

      [8.10 pm

      AYES

      Aitken, Jonathan

      Kaufman, Rt Hon Gerald

      Archer, Rt Hon Peter

      Kinnock, Rt Hon Neil

      Ashley, Rt Hon Jack

      Leighton, Ronald

      Ashton, Joe

      Lloyd, Tony (Stretford)

      Atkinson, N. (Tottenham)

      McCartney, Hugh

      Banks, Tony (Newham NW)

      McDonald, Dr Oonagh

      Barnett, Guy

      McKelvey, William

      Barron, Kevin

      McNamara, Kevin

      Beckett, Mrs Margaret

      McTaggart, Robert

      Bell, Stuart

      McWilliam, John

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

      Madden, Max

      Bermingham, Gerald

      Marek, Dr John

      Bidwell, Sydney

      Marlow, Antony

      Blair, Anthony

      Marshall, David (Shettleston)

      Boyes, Roland

      Martin, Michael

      Bray, Dr Jeremy

      Maxton, John

      Brown, Gordon (D'f'mline E)

      Michie, William

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

      Mikardo, Ian

      Buchan, Norman

      Millan, Rt Hon Bruce

      Budgen, Nick

      Miller, Dr M. S. (E Kilbride)

      Caborn, Richard

      Moate, Roger

      Campbell, Ian

      Morris, Rt Hon A. (W'shawe)

      Campbell-Savours, Dale

      Nellist, David

      Carter-Jones, Lewis

      Oakes, Rt Hon Gordon

      Clark, Dr David (S Shields)

      O'Neill, Martin

      Clarke, Thomas

      Park, George

      Clay, Robert

      Parry, Robert

      Clelland, David Gordon

      Pavitt, Laurie

      Cook, Frank (Stockton North)

      Pike, Peter

      Cook, Robin F. (Livingston)

      Powell, Rt Hon J. E.

      Corbett, Robin

      Powell, Raymond (Ogmore)

      Cox, Thomas (Tooting)

      Radice, Giles

      Craigen, J. M.

      Randall, Stuart

      Crowther, Stan

      Raynsford, Nick

      Dalyell, Tam

      Redmond, Martin

      Davies, Rt Hon Denzil (L'lli)

      Rees, Rt Hon M. (Leeds S)

      Davies, Ronald (Caerphilly)

      Richardson, Ms Jo

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

      Robertson, George

      Deakins, Eric

      Rogers, Allan

      Dormand, Jack

      Ross, Ernest (Dundee W)

      Dubs, Alfred

      Rowlands, Ted

      du Cann, Rt Hon Sir Edward

      Sheerman. Barry

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

      Shepherd, Richard (Aldridge)

      Evans, John (St. Helens N)

      Shore, Rt Hon Peter

      Fatchett, Derek

      Short, Mrs R.fWhampt'n NE)

      Fields, T. (L 'pool Broad Gn)

      Silkin, Rt Hon J.

      Fisher, Mark

      Skinner, Dennis

      Flannery, Martin

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

      Foot, Rt Hon Michael

      Snape, Peter

      Foster, Derek

      Soley, Clive

      Foulkes, George

      Spearing, Nigel

      Freeson, Rt Hon Reginald

      Stewart, Rt Hon D. (W Isles)

      George, Bruce

      Straw, Jack

      Gilbert, Rt Hon Dr John

      Taylor, Teddy (S'end E)

      Gould, Bryan

      Torney, Tom

      Hamilton, James (M'well N)

      Townend, John (Bridlington)

      Hamilton, W. W. (Fife Central)

      Walker, Bill (T'side N)

      Harman, Ms Harriet

      Wareing, Robert

      Harrison, Rt Hon Walter

      Welsh, Michael

      Heffer, Eric S.

      White, James

      Hogg, N. (C'nauld & Kilsyth)

      Williams, Rt Hon A.

      Holland, Stuart (Vauxhall)

      Winnick, David

      Home Robertson, John

      Woodall, Alec

      Hoyle, Douglas

      Young, David (Bolton SE)

      Hughes, Robert (Aberdeen N)

      Hughes, Roy (Newport East)

      Tellers for the Ayes:

      John, Brynmor

      Mr. Don Dixon and

      Jones, Barry (Alyn & Deeside)

      Mr. Allen Adams.

      539

      NOES

      Alexander, Richard

      Hunter, Andrew

      Alton, David

      Irving, Charles

      Amery, Rt Hon Julian

      Jackson, Robert

      Amess, David

      Jenkin, Rt Hon Patrick

      Ancram, Michael

      Johnson Smith, Sir Geoffrey

      Arnold, Tom

      Johnston, Sir Russell

      Baker, Nicholas (Dorset N)

      Jones, Gwilym (Cardiff N)

      Baldry, Tony

      Jones, Robert (Herts W)

      Banks, Robert (Harrogatej

      Jopling, Rt Hon Michael

      Bellingham, Henry

      Joseph, Rt Hon Sir Keith

      Benyon, William

      Kennedy, Charles

      Boscawen, Hon Robert

      Key, Robert

      Bowden, Gerald (Dulwich)

      Knight, Greg (Derby N)

      Braine, Rt Hon Sir Bernard

      Knight, Dame Jill (Edgbaston)

      Buck, Sir Antony

      Knowles, Michael

      Burt, Alistair

      Knox, David

      Carlile, Alexander (Montg'y)

      Lang, Ian

      Carlisle, Kenneth (Lincoln)

      Latham, Michael

      Cash, William

      Lawler, Geoffrey

      Chalker, Mrs Lynda

      Lawrence, Ivan

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

      Leigh, Edward (Gainsbor'gh)

      Clarke, Rt Hon K. (Rushcliffe)

      Lennox-Boyd, Hon Mark

      Clegg, Sir Walter

      Lester, Jim

      Colvin, Michael

      Lewis, Sir Kenneth (Stamf'd)

      Coombs, Simon

      Lilley, Peter

      Cope, John

      Lloyd, Sir Ian (Havant)

      Corrie, John

      Lord, Michael

      Cranborne, Viscount

      McCrindle, Robert

      Currie, Mrs Edwina

      McCurley, Mrs Anna

      Dorrell, Stephen

      MacGregor, Rt Hon John

      Douglas-Hamilton, Lord J.

      MacKay, Andrew (Berkshire)

      Dunn, Robert

      MacKay, John (Argyll & Bute)

      Durant, Tony

      McLoughlin, Patrick

      Dykes, Hugh

      McNair-Wilson, M. (N'bury)

      Fallon, Michael

      Madel, David

      Fenner, Mrs Peggy

      Major, John

      Fookes, Miss Janet

      Malins, Humfrey

      Forman, Nigel

      Marland, Paul

      Forsyth, Michael (Stirling)

      Marshall, Michael (Arundel)

      Forth, Eric

      Maude, Hon Francis

      Fraser, Peter (Angus East)

      Mawhinney, Dr Brian

      Freeman, Roger

      Meadowcroft, Michael

      Galley, Roy

      Mellor, David

      Gardner, Sir Edward (Fylde)

      Merchant, Piers

      Garel-Jones, Tristan

      Meyer, Sir Anthony

      Gilmour, Rt Hon Sir Ian

      Miller, Hal (B'grove)

      Glyn, Dr Alan

      Mills, lain (Meriden)

      Goodlad, Alastair

      Monro, Sir Hector

      Gorst, John

      Moynihan, Hon C.

      Gow, Ian

      Neale, Gerrard

      Grant, Sir Anthony

      Nelson, Anthony

      Griffiths, Sir Eldon

      Neubert, Michael

      Ground, Patrick

      Nicholls, Patrick

      Grylls, Michael

      Normanton, Tom

      Hamilton, Hon A. (Epsom)

      Norris, Steven

      Hampson, Dr Keith

      Onslow, Cranley

      Hargreaves, Kenneth

      Oppenheim, Phillip

      Harvey, Robert

      Oppenheim, Rt Hon Mrs S.

      Havers, Rt Hon Sir Michael

      Ottaway, Richard

      Hawkins, C. (High Peak)

      Page, Richard (Herts SW)

      Hawkins, Sir Paul (N'folk SW)

      Parkinson, Rt Hon Cecil

      Hayes, J.

      Patten, Christopher (Bath)

      Hayward, Robert

      Pawsey, James

      Heathcoat-Amory, David

      Percival, Rt Hon Sir Ian

      Hickmet, Richard

      Portillo, Michael

      Hicks, Robert

      Powell, William (Corby)

      Higgins, Rt Hon Terence L.

      Price, Sir David

      Hind, Kenneth

      Raffan, Keith

      Hirst, Michael

      Rathbone, Tim

      Holland, Sir Philip (Gedling)

      Rhodes James, Robert

      Holt, Richard

      Rhys Williams, Sir Brandon

      Hordern, Sir Peter

      Ridley, Rt Hon Nicholas

      Howard, Michael

      Ridsdale, Sir Julian

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

      Rippon, Rt Hon Geoffrey

      Howell, Ralph (Norfolk, N)

      Roberts, Wyn (Conwy)

      Howells, Geraint

      Roe, Mrs Marion

      Hughes, Simon (Southwark)

      Rumbold, Mrs Angela

      Hunt, David (Wirral W)

      Sackville, Hon Thomas

      Hunt, John (Ravensbourne)

      Sainsbury, Hon Timothy

      540

      Shaw, Giles (Pudsey)

      Thurnham, Peter

      Shelton, William (Streatham)

      Trippier, David

      Shersby, Michael

      Twinn, Dr Ian

      Silvester, Fred

      van Straubenzee, Sir W.

      Sims, Roger

      Viggers, Peter

      Smith, Tim (Beaconsfield)

      Waddington, David

      Spencer, Derek

      Wall, Sir Patrick

      Spicer, Jim (Dorset W)

      Wallace, James

      Spicer, Michael (S Worcs)

      Waller, Gary

      Squire, Robin

      Wardle, C. (Bexhill)

      Stanbrook, Ivor

      Watts, John

      Stanley, Rt Hon John

      Wells, Bowen (Hertford)

      Steel, Rt Hon David

      Wells, Sir John (Maidstone)

      Stern, Michael

      Wheeler, John

      Stevens, Lewis (Nuneaton)

      Whitfield, John

      Stewart, Allan (Eastwood)

      Wilkinson, John

      Stewart, Andrew (Sherwood)

      Wolfson, Mark

      Taylor, John (Solihull)

      Wood, Timothy

      Temple-Morris, Peter

      Yeo, Tim

      Terlezki, Stefan

      Young, Sir George (Acton)

      Thomas, Rt Hon Peter

      Thompson, Donald (Calder V)

      Tellers for the Noes:

      Thompson, Patrick (N'ich N)

      Mr. Gerald Malone and

      Thorne, Neil (Ilord S)

      Mr. Peter Lloyd.

      Question accordingly negatived.
      Mr. Marlow: I beg to move amendment No. 5, in page 1, line 13, after 'Communities)', insert
      'but not Article 15 thereof".
      The Temporary Chairman: With this it will be convenient to discuss the following amendments: No. 6, in page 1, line 13, after 'Communities)', insert
      'but not paragraph 1 of Article 16 thereof.
      No. 8, in page 1, line 13, after 'Communities)', insert
      'but not Article 19 thereof.
      No. 15, in page 1, line 13, after 'Communities)', insert
      'but not Article 13 thereof'.
      No. 18, in page 1, line 13, after 'Communities)', insert
      'but not paragraph 3 of Article 100A inserted by Article 18 thereof'.
      No. 49, in page 1, line 13, after 'Communities)', insert
      'but not Article 18 thereof".
      Mr. Marlow: These amendments are to do with the internal market. My hon. Friend the Minister said in the debate on the last group of amendments that there are great benefits for the United Kingdom in freeing the internal market so that we can get some of the advantages for our services, our insurance industry and various other areas of United Kingdom entrepreneurial activity which so far have been baulked by other countries and institutions within the Community. However, the issues before us are somewhat wider than that. Although we all seek the advantages that the Minister hopes for, we must look very carefully at how the Bill approaches the internal market.
      The purpose of amendment No. 5, which is in my name, is to delete article 15. Article 15 is by way of being an escape clause. It means that if rules, regulations or directives are introduced into the Community and some countries cannot put up with them, that should be taken into account and they should be exempted from the provisions of Community-wide law and policy. At the back of one's mind one suspects that some countries may be more inclined to seek those derogations than others. Indeed, I believe that the Greeks have not yet introduced the proper system of VAT which they were required to do when they joined the Community several years ago. I should be interested to hear from my hon. Friend the Minister how this article will operate, what points the

      541
      Commission will take into account when it makes its decision, and what powers she as a Minister will have on the Council of Ministers to agree or disagree with the Commission's suggestions.
      Amendment No. 6, which is in the name of my right hon. Friend the Member for Taunton (Sir E. du Cann), is important because the Bill as drafted allows for changes in the common external tariff by majority vote. At a later stage we in the United Kingdom who largely believe in free trade could find ourselves facing a combination of Governments from other Community countries who, together with the Assembly and Commission, wish to be more protectionist. Therefore, they would be in the majority, and, although we, together with the Germans, might vote against such a policy, we could be outvoted and find our tariffs against the Commonwealth and the rest of the world raised without our being able to do anything about it. That is an important matter and I should be grateful to my hon. Friend the Minister if she could reassure us about it.
      Amendment No. 8 deletes the provision for the Commission to draw up a list of national laws which it considers should be changed to secure harmonisation. In 1992, the witching hour, the Commission will assess how far we have moved towards harmonisation of the internal market. Having made its assessment, it will consider various laws and countries and say whether they have been harmonised, what has not been harmonised and what action should be taken. Again, that seems to give power to the Commission. The amendment, which is a probing amendment, seeks to delete that power, and I should be grateful to hear my hon. Friend's views on it.
      Amendment No. 18 is of particular interest because it seeks to delete a paragraph from article 18, which inserts new article 100A. Paragraph 3 states:
      "The Commission, in its proposals…concerning health, safety, environmental protection and consumer protection, will take as a base a high level of protection."
      In other words, the Commission will wish to have fairly stringent legislation when it puts forward its proposals on the internal market.
      The Government want to lift the burden, cut bureaucracy and make life easier for small businesses, yet this paragraph suggests that life should be made much more difficult and intricate, that there should be more legislation and a high level of protection. We may believe that we have sensible rules, laws and regulations. Other Community countries may, for commercial advantage because they cannot compete with us in various areas, or because of their traditions, their pressure groups or present position, wish to have greater protection. The Commission will tend to move us towards more complex levels of legislation, regulation and bureaucracy.
      In the Final Act at the back of the Single European Act articles state on behalf of the United Kingdom that we believe that the burden should not be increased, especially regarding small and medium-sized businesses. When my hon. Friend replies—I see that she is making notes, so I am sure she intends to do so—I should be grateful if she will tell us what the status is of the Final Act compared with paragraph (3) of article 100A. I have a terrible feeling that if the reduction in powers of the Single European Act in the Final Act does not have a great status, we shall be subjected to a great deal of extra burden and bureaucracy.
      Mr. George Robertson: I understand the confusion at this stage over this important set of amendments. A person outside the usual audience of these debates would find the goings-on in which we indulge extraordinary.
      The amendments deal with further progress towards the internal market, which is at the centre of the British Government's ambitions for the European presidency. Indeed, in evidence to the Foreign Affairs Select Committee, the Foreign Secretary said that that w as the central, most important objective of the United Kingdom during our months of presidency, which begins on Tuesday of next week.
      On the philosophy of the internal market, we must consider the Dooge committee, which was the grandfather of the European Single Act, most of the provisions of which are about to be put into legislation in this Bill. The Dooge committee was lyrical about progress towards the internal market. It said that the internal market would bring more jobs, greater prosperity and faster growth, and would thus make the Community a reality for its citizens. Those are considerable ambitions, given the nature of Europe's problems today. Nowhere in the Dooge committee's report and in our many debates on these issues has any Government Minister cared to tell us how it is that the internal market—the breaking down of frontiers within the EEC and the establishment of this gigantic new market without barriers to trade—will be reached and assisted in the precise ways advocated by its most enthusiastic supporters.
      Earlier this year my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) asked the Secretary of State what assessment had been made of the impact of a greater internal market on the United Kingdom economy. The hon. Member for Plymouth, Sutton (Mr. Clark) graced the Treasury Bench briefly during the Minister's reply. His interest may have had more to do with when he would get to dinner than with the intricacies of the Minister's defence, but I suppose we should be glad of the small mercy that he bothered to attend the debate. However, he would more appropriately be located on the Treasury Bench for this debate than he was during the debate on the powers of the European Parliament.
      The hon. Gentleman, who is somewhat eccentric in his free trade views, said in a written answer that in general
      "removing barriers to trade within the Community should further increase our trade with other member states and reduce costs to business. It should therefore help to stimulate increased efficiency in the use of resources and accordingly encourage growth in the economy."—[Official Report, 24 February 1986; Vol. 92, c. 422.]
      That is the simple article of faith that underpins the view that progress towards an internal market will produce more jobs, greater prosperity and faster growth. Nowhere is that more specifically pointed out.
      I ask the Minister, as I have asked her predecessor, who has now been elevated to the Cabinet, what effect the internal market will have on the Community. What impact will it have on employment, on the balance of payments, or on import penetration, of which there has been a substantial amount since we became full members of the EEC? What impact will it have on the balance of trade in manufactures, which has so dismally worked to our disadvantage since the Government took office in 1979? What impact will it have on invisible earnings from services, which are usually the major example given by the Government as a sector in which we will benefit?

      543
      8.30 pm
      There has been no White Paper identifying the benefits to the British economy from the internal market, no assessment of the impact on the economy or the country, no Green Paper, no working document from the National Economic Development Council. We are right to come to the conclusion that either the Government know what will happen, in which case I am sure they would have trumpeted loudly the benefits of the internal market, or, more realistically, they do not know and it is a gamble based on their obsession with deregulation and the free market ideology.
      The "internal market" is an expression that is meaningless for 95 per cent., perhaps even 98 per cent., of the country. The Conservative philosophy is that it is the export of Thatcherism. Euro-Thatcherism is what they mean when they talk about the internal market in the EEC. Jobs are supposed to be the priority. Labour Members have, at tedious length, told the Government that jobs in the EEC are the priority. That some 15 million people across the Community are out of work is a tragedy and a disgrace. That should be at the top of the agenda for every European Council. We have said this ad nauseam, but the Government have chosen not to listen. The right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) managed a whole speech about the current state of the European Community without once mentioning the level of unemployment in this country or in the European Community—an achievement which we can only expect added to his chances of promotion to looking after one of the most depressed parts of the United Kingdom.
      Mr. Cash: Will the hon. Gentleman accept that when he criticises the Government's approach to the internal market and then says that it does not have anything to do with jobs he is betraying his ignorance of the subject? It is precisely because there are problems with transport and other matters that come within the context of the internal market that we will be able to increase the size of the market and the number of jobs, which I dare say his constituents would like to see.
      Mr. Robertson: I am sure that my constituents would like to see jobs a lot more than would the constituents of the hon. Member for Stafford (Mr. Cash). He is talking gobbledegook, and if he cares to listen to the rest of my speech he will see why I believe that simple prattling about jobs is no solution and will not create jobs or utilise the immense resources of the EEC to make sure that jobs are created across the Common Market. Rhetoric about the internal market and reducing barriers does not often of itself create new jobs. The result is a spreading of the misery that Europe faces, rather than any increase in prosperity. I thought that the hon. Gentleman was part of another team for this evening's occasion—he is getting himself into a schizophrenic state. No doubt, as he is tantalised by my arguments, he will come to a different conclusion.
      Mr. Nicholas Budgen: We are all independent gentlemen.
      Mr. Robertson: We all fit into that category, with the obvious exclusion of the Minister.
      The Foreign Secretary has changed his mind since the day when the right hon. and learned Member for
      544
      Pentlands told us that unemployment was not a problem at the top of the agenda for Europe. In The Hague last week, the Foreign Secretary said:
      "Unemployment is a scourge in all our countries. It is our greatest and most urgent social and economic challenge, and one that can only be met with common policies and common determination."
      We strongly and passionately agree with that, and we welcome the conversion of the Foreign Secretary. Unemployment faces more than 4 million of his fellow countrymen and another 9 million or 10 million people across the Community. It is a blight on the picture of growth and prosperity, to which so many of the European countries have grown accustomed. It is worse in Britain, and it should be a worthy and necessary objective of the British presidency of the European Community to do something to end the misery and waste of unemployment.
      What do the Government mean by this objective? Later in the same speech the Foreign Secretary went on to quote from a document produced by the Department of Employment, in association with the Governments of Italy and Ireland, on employment prospects in the 1990s, in which it
      "extolls the virtue of encouraging enterprise and small business, and ending restrictive labour practices."
      The Foreign Secretary said:
      "We seek an internal market economy unshackled by the remaining protective barriers to trade, services, capital and labour."
      Now we begin to see precisely what the Foreign Secretary and his colleagues mean by this progress to an internal market. The same iron shackles of monetarism are to be locked on to Europe. We shall export the manifest failures of monetarist priorities to countries which have already rejected inflation and cuts. While they have thrived and expanded by developing their economies, we have failed.
      The Paymaster General is regarded, along with the Minister, as one of the key wets in the Government team. It was he who blew the gaff the day after the Foreign Secretary talked about the European agenda and the presidency and denounced, as the headline said, the "EEC debate as piffle". The Paymaster General is also the Minister for Employment and he
      "bluntly described much of the existing agenda as 'piffle…We should be talking about the main problem we are all facing, which is unemployment and the need to encourage job creation throughout the Community.'"
      To that we would all say, "Hear, hear." However, the great document drawn up with the Italian and Irish Governments has, as The Guardian says,
      "a pronounced Thatcherite flavour…Mr. Clarke acknowledged that the paper was long on strategic aims, and short on detailed proposals."
      There is no real surprise in that. The same ideological obsessions are to be the hallmark of the British presidency of the European Community. It will be long on rhetoric about unemployment and on the objectives of pulling down trade barriers and making it easier for lorries to travel between countries, but short on doing anything about it, as the British experience since 1979 shows so demonstrably.
      The view of this country on the internal market and where it could and should be differs widely from that of other countries within the Community. The Government say that the Community should be a free trade area of itself and that could produce its own rewards, merits and growth, but experience shows that it will produce even wider disparities.

      545
      The President of the European Commission, Mr. Jacques Delors, earlier this year highlighted the philosophical difference between the new presidency of the European Community and the bureaucrats who will be asked to implement it. He said:
      "The creation of a vast economic area based on market and business co-operation is inconceivable, I would say unattainable, without some harmonisation of social legislation."
      Of course, it was the harmonisation of social legislation which the Paymaster General chose to categorise as being the "piffle" of the European Community's present debate.
      A central provision of the Single European Act contained in the Bill agrees with Jacques Delors and not with the Foreign Secretary. The Single European Act contains, in article 18, a new article 100A to the treaty. As the Foreign Affairs Select Committee rightly said, this section has deliberately been entitled in this way to confuse both the British Parliament and the British people. The Minister of State added her signature to that part of the Single European Act which makes it clear that the attainment of the internal market must be accompanied by social and structural responsibilities to the areas which might suffer as a consequence of a drive towards a free market economy.
      The Government believe that the protection of goods travelling between countries is far more important than the people who manufacture the goods. Section II of the European Single Act states that unanimity is to be retained only on the rights and interests of employed people. This is intended to protect the Government's standard, regular and continously used veto in areas where improvements in the rights and interests of employed people would have come about.
      The Government will continue to deny the British people the benefits of the EEC. The British people will be denied the benefits of employee consultation provisions, participation provisions and parental leave provisions. Our prosperous Community colleagues already possess these benefits, and they already agree on their standard implementation.
      The drive for deregulation will see workers' rights being stripped from them solely in the interests of an obsession with creating a gigantic 200-million strong free market. Why is it that this country always gets the worst of the European Community and never the best from its membership?
      Mr. Forth: In this context, is the hon. Gentleman prepared to tell the House how he views the benefits of the kind of European regulations which he has just described and the levels of unemployment in the Community as set against the relative freedom of the internal market in the United States and its relative prosperity and low level of unemployment? Will he accept that there might be a causal connection between over-regulation in the EEC and a relatively free market and prosperity and lower unemployment in the United States?
      Mr. Robertson: There can be causal relationships in many things. An automatic comparison between the United States of America and its relative prosperity, which has largely come about through larger budget deficits, which I am sure the hon. Member for Mid-Worcestershire (Mr. Forth) would deprecate and deplore, is not easy to make. The prosperity in America has come about through the budget deficits rather than through a lack of
      546
      bureaucracy. We should not make easy comparisons between prosperous part of the world such as the far east, Japan and the United States of America and the European Community. That does not help the issue.
      We could debate that matter, and we may well do so during the course of the debate, but the Government's objective is to be carried out via the Single European Act and is contained in the mechanism and provisions that we are debating. These would allow more majority voting in areas which have already been referred to, but which would deny majority voting in areas where workers' rights are concerned. This is a more relevant subject for discussion this evening.
      If there is to be prosperity in Britain or in the European Community, it must be accompanied, as the President of the Commission said, by a considerable social obligation on the rest of the Community to ensure that that growth is accompanied by the protection of rights that have been won with such great difficulty. For example, parental leave will still be subject to the continuing British veto. The House of Lords Select Committee on the European Communities supported the directive on parental leave and suggested that there was no reason to believe that it would increase costs in British industry. It said that there was no reason to believe that it would threaten jobs. Of course employee consultation would not threaten jobs. In fact, that principle lies at the very heart of some countries, such as the Federal Republic of Germany and is at the economic heart of their success.
      8.45 pm
      The continued British veto would be retained in such areas. However, in many other areas, where we have no idea or measurement of the consequences, the veto would be removed and majority voting introduced. The Government are relentlessly, inexorably and enthusiastically driving towards completion of a complete frontierless internal market by 1992.
      The Government have said that there will be no harmonisation of tax or VAT rates as part of the progress towards an internal market. However, that lies at the very heart of the reasons behind the parts of the Single European Act that are being debated tonight. Lord Cockfield — an exile from the Government — is the principal enthusiast for, and believes strongly in, progress towards the internal market. Lord Cockfied is unequivocal and unambiguous in his desire and drive to harmonise tax and VAT rates and to have them eliminated with everything else in the years until 1992.
      Mrs. Chalker: Lord Cockfield is not the Government.
      Mr. Robertson: The Minister has just said that he is not the Government. He was dispatched from the Government to do the Government's dirty work in Europe. He is still part and parcel of the ideological make-up which runs the Government. He is not alone. The leader of the Conservative group in the European Parliament made it clear when he said:
      "It is hard to see how there could be an internal market without a measure of harmonisation in fiscal matters."
      Underlying the arguments and the assurances which I know we will receive from the Minister at the end of the debate is an element of internal sabotage within the Conservative party and Conservative thinking which states that the internal market cannot be completed without that degree of fiscal harmonisation.

      547
      The recent report of the House of Lords Select Committee on the European Communities entitled "Indirect Taxation and the Internal Market" makes it clear that there is no question of the internal market continuing without the harmonisation of indirect taxes. It states:
      "The committee believe that there is a good case for approximation of indirect taxes as an end in itself, in the interests of fair competition."
      We shall return to that issue later. It lies at the heart of our believing the Government's assurances on the exemptions and exceptions that they have sought to gain from the Luxembourg summit and which are now included in the Single European Act. The Committee will look with grave scepticism on the Government's assurances in 1986 when by 1992 the Government's vehicle, in accelerating towards harmonisation on taxation and fiscal matters, will be way out of control.
      Across a whole range of issues the Government have laid down their own exemptions in order to make sure that their ideological brand of internal market is foisted upon Europe. In areas where co-operation between the European nations would make sense and work to our benefit the Government have little or nothing to say, and even less to spend.
      Spending has gone out of control within the common agricultural policy — the hon. Member for Southend, East (Mr. Taylor) said that the figures are now in the Vote Office for us all to see— but there has been a 16 per cent. cut in the European budget on technology and research, and these are areas of considerable effect.
      I intend to return to the question of the social and regional funds, because article 23 of the Single European Act makes it clear that a strong regional and social fund policy is an integral part of the internal market policy. It would be refreshing to hear from the Government this evening that a commitment to the internal market will also be accompanied by appropriate and adequate resources, especially from the voted agricultural budget, for the social and regional funds. As I did yesterday, I would advise the Minister again not to listen to the fairly narrow views that are sometimes expressed on that count from the Benches behind her.
      Of course there will be questions, but the internal market, as the Foreign Secretary has made clear, lies at the heart of the Government's presidential ambitions for the European Community when our presidency starts on Tuesday next week. It is right and proper for the Committee to ask the Government what their intentions are in these areas. Such questions have as yet received inadequate, if any, replies. Britain will not be well served during the presidency of the EC by Ministers of whatever Department unless the British people are given the answers to those questions and are satisfied by them.
      Mr. Teddy Taylor: The amendments are rather important. We know from previous discussions that the Government did not want the treaty. When the Minister challenged that, I thought that it was only right to draw the attention of the House to the fact that the Prime Minister, in an excellent exchange on 2 July 1985, said:
      "I thought that our proposals, which would not have required treaty amendment, would be better. It is important that the internal market be completed, but I think it can be completed keeping the unanimity rule."—[Official Report, 2 July 1985; Vol 82, c. 189.]
      548
      That, of course, was the Government's position. They did not want the Act, they did not think that it was necessary, and they thought that legislation could create problems.
      Now we have the Act and I have found from previous discussions that there is one thing that the Government use to argue for legislation. They accept that there are many stupid things such as giving more powers to the Assembly, and so on, but they say that the one thing that is good about it is that it will help to complete the internal market. There is no doubt from the Government's point of view that that is the plus factor in this wretched little Act.
      We should be a little careful because we should remember that free trade within the Community was the bonus factor that was put forward at the time of our membership. We were told that we would destroy certain of our arrangements with the Commonwealth, that we would lose a certain part of our freedom, but that we should look at all the trade and jobs that would result. Hon. Members may remember Lord Stokes, who was in charge of British Leyland, saying that if only we went into the Common Market we would be able to flood the place with cars and solve our unemployment problems. We know that that has not happened. We heard leading industrialists say that if only we could have freer and better trade within Europe things could be much better. We have seen for ourselves the disastrous consequences. Whereas we always had a surplus in our trade in manufactures with the Common Market in every year before we joined, in every year since we joined we have had a horrendous deficit which last year was £10,000 million.
      Before we say that that is the fault of the lazy British workers and hopeless British managers, we should point out that we had a surplus in our trade with the rest of the world of about £6 billion. Obviously, something has gone very wrong in our trade with the Common Market. We have not realised the advantages that were claimed at the time of membership. But now the argument being used is that that is because the market is not free and there are still barriers. It is said that if only through this little Act we can sweep away those barriers it will all come right: there will be more jobs and trade and somehow we shall get the great advantages of this massive internal market. That basically is the argument being used. We are told that we cannot get things through that we want and that if only we can have majority voting we can rush through the hundreds of directives which Lord Cockfield wants before 1992 and then it will all happen. Presumably in the next Parliament, if there is a Conservative Government, things will get better and freer, and there will be more jobs, prosperity and trade.
      Mr. Deakins: Did the CBI, representing British industry in 1971 and in 1972 and in the referendum campaign in 1975, make any point about the need for all those further directives and the completion of the internal market? Is it not the fact that, in those days of contact between politicians and industrialists and the electorate, the argument was simply that by joining the Common Market — I think then made up of about 220 million people — British industry would automatically benefit and that has not happened?
      Mr. Taylor: Yes. Before we say that it is the fault of the lazy British worker, we should remember that our trade with the rest of the world has got better and better. It is our trade with the EC which has been a disaster. If we use

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      the CBI's figures, which show that about £10,000 of trade is equal to one job, we are talking here of a loss of 1 million jobs. Those who opposed our membership felt that that was an inevitable consequence, just as Northern Ireland and Scotland have always had more unemployment and depopulation despite all the efforts of the English to pour money into those places. The fact is that in Europe it is rather different. We are out on the periphery, but instead of them pouring money into us we are pouring money into them and throwing away the one advantage that we had of lower food prices and free markets. However, that is irrelevant to this amendment, which is more precise.
      Those who were disappointed at the consequences of membership of the EEC to trade, particularly those in industry, bearing in mind the fact that our percentage of the trade of the original six is now almost the same as it was the year before we joined, about 7 per cent., there has been hardly any difference in our share of their trade in manufactures.
      We should look carefully at this further measure which will give the Community the power to force through hundreds of directives by majority vote even if it is against the wishes of the British Government, the British Parliament and the British people.
      What advantages are claimed for forcing through those directives by majority voting? The first that we are told is that, whereas Britain may not be so good at manufacturing, we are just wonderful at insurance. Some hon. Members who are present are particularly knowledgeable and experienced in insurance and they will be able to tell us something about it. People say that we are not very good at selling goods to Europe but that directives would enable them to sell insurance and banking, and that if they had the freedom to do that those services would make all the difference. They say that those things could be done if the barriers were removed. According to answers I have had from the Government, the directives are in existence. On 14 April I asked the Secretary of State for Trade and Industry when a proposal to allow a free market in insurance was last considered. He told me:
      "A number of directives in the insurance field have been approved. Generally, the effect of these directives has been to create a free market for reinsurance and freedom of establishment for both life and non-life insurers. Proposals for a non-life insurance services directive have been submitted by the Commission." —[Official Report,14 April 1986; Vol. 95, c. 239.]
      The Commission was awaiting the outcome of four cases before the European Court of Justice.
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      Most of the directives are already in force and form part of the law of Europe. If there is a dreadful failure by the insurance companies to sell insurance in the Common Market, it is not primarily because of a lack of directives. I declare an interest in this matter because I am a director of a most splendid insurance company, Ansvar, which insures only total abstainers. It has had the most wonderful success in selling insurance all over the world to good people who do not drink alcohol, but the one place that has been a total disaster for it is Germany. I should like to tell the Minister privately the sort of problems that we met in Germany despite the existence of this law.
      We are told that directives would help with transport and that everything would sort itself out. The Minister
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      should have a word with the hon. Member for Worcestershire, South (Mr. Spicer), the Parliamentary Under-Secretary of State for Transport. He will tell the Minister about the problems we had in Southend even though the directives are already in place. We ran a successful service from London to Frankfurt. People took a bus from London to Southend, a plane from Southend to Ostend, and a bus from Ostend to Frankfurt.
      It was a successful service, and to make sure that we did not upset the Germans we used buses provided by their nationalised bus company. Of course we took quite a lot of that bus company's business and suddenly the Germans told us that, sadly, they were not able to provide us with a nationalised bus any more. We appealed to the Germans and to the Foreign Office and to the ambassador in Bonn and went to the Department of Transport and said that all we wanted was any old bus provided by anyone to carry our passengers from Ostend to Frankfurt.
      If the Minister cares to phone Mr. Gareth Evans, the airport director in Southend, he will tell her the story. The Foreign Office was very courteous and so were the people in the ambassador's office in Bonn. Everyone wanted to help, but nothing has happened and we still do not have a bus to take our Southend passengers from Ostend to Frankfurt. That is because, despite the directives already in force, the Germans will not allow any bus provided by any company, whether German, British, Dutch or any other nationality, to carry our passengers. They just say no; there are bureaucratic delays.
      Let us look at the inner German trade agreement. The Minister is well aware of the problems there. Our biggest trade deficit is with Germany, and hon. Members will be aware of British workers being put out of jobs because of the massive flow of east European subsidised trade from East Germany to West Germany, thereby gaining access to the EEC. The rule is that those goods cannot be sent out of West Germany unless they contain a certain amount of added value. The Minister must be aware that the rules are blatantly disregarded. I have sent case after case to the Department of Trade giving it clear examples of total breaches of the law, fiddles. The cases are constantly referred to the Commission but nothing happens.
      It should not be taken for granted that if we get all these new directives by majority voting everything will be sorted out. The problem with the Common Market relates to the implementation of directives and not the need for more directives. There are plenty of directives already and they do not work. As usual, Britain is the mug in the Common Market because we accept all the rules and the others blatantly and offensively disregard them. Germany and France are the worst culprits. The Germans do not admit it, but the French do.
      Mr. Forth: Does my hon. Friend agree that the political motivation behind what we are discussing is that the implementation of the directives, which, as my hon. Friend points out, already exist if we want to use them, will be contingent upon the United Kingdom agreeing to this new political initiative in the EEC? The price that we are asked to pay for the implementation of what we want and what we are told was the original objective of the EEC—an internal market and free trade—is the further political impetus that the Single European Act will provide. Does he not agree that that might be a price worth paying for a genuine internal market?
      Mr. Taylor: No, I do not agree. I cannot accept that. The fact is that there has been a problem in getting anyone to provide a bus service from Ostend to Frankfurt. If we were to abolish this Parliament and put all our powers and decision-making processes into the European Parliament, with the only democratic powers exercised in Britain residing with the Southwark and Lambeth borough councils, I still believe, sadly, that there would be no bus service from Ostend to Frankfurt, although the relevant directive would provide for one.
      Mr. Spearing: Is the hon. Gentleman telling us that even the relatively non-controversial directives for an internal market do not work? Is it not possible for him, his firm or his constituents to get what appears to be the operation of them? Could he take this matter to the lower tier of the proposed court? If he decided to take that course, does he think that it would be too expensive? Does he think that the law may fall into disrepute because it is not operable?
      Mr. Taylor: Anyone who doubts my word should telephone a splendid firm called MAYJEX which has been extremely diligent in chasing Members of Parliament and others in trying to get problems solved that are associated with the dumping of food in Britain from East Germany as a result of the inter-German trade agreement. More dried eggs are dumped in Britain from West Germany than West Germany produces. That is remarkable. In fact, the eggs come from East Germany. Representatives of MAYJEX have been everywhere. They have approached Government Departments and those Departments have contacted the Commission. The Commission has called for reports and the reports have been produced, but nothing has happened. I hope that my hon. Friend the Minister of State will not say that additional directives will suddenly cause everything to happen. I suggest that the problem is far more fundamental and difficult and that it will not be solved by introducing more directives.
      Mr. Deakins: Is the hon. Gentleman saying that the German Democratic Republic is to be considered part of the internal market? We know that the GDR is not part of the Community, but does the inter-German trade agreement mean that West Germany and East Germany can trade together and that Britain cannot trade with East Germany through West Germany because of the agreement? Is that not unfair?
      Mr. Taylor: Of course it is unfair. It is part of the original treaty of Rome. The hon. Gentleman knows well —presumably he merely wants me to announce this—that the inter-German trade agreement is part of the basic treaty. If anyone has any doubt about this, he should remember the discussions that took place on the polluted radioactive foods coming from east Europe. We had to enact some exciting, new and dramatic legislation that stated that we would not import any foodstuffs from Czechoslovakia, Poland, Russia and other east European countries except East Germany. East Germany was omitted from the list even though it is abundantly clear that food from other countries flows from East Germany to West Germany under the inter-German trade agreement. Why was East Germany not included? We know that East Germany is not further away from Chernobyl than other east European countries. There are
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      parts of Czechoslovakia which are much further away from Chernobyl than East Germany. East Germany was excluded because of the inter-German trade agreement.
      I asked a Minister a splendid question to which I am still awaiting an answer. I wanted to know how we could tell a Polish pig from an East German pig. To my knowledge, there is no way of identifying the respective pigs. Livestock and goods flow from East Germany into West Germany and the existing rules are not implemented. Unfortunately, there is no effective machinery to ensure that they are. Other nation states act like protectionist nation states.
      If there is any doubt about what I am saying, we should remember poor old Lord Stokes who told us to join the Common Market so that the British car industry could have a bonanza and flood the Common Market with cars. In Britain there are plenty of French and German cars on our roads, but we do not see a proportionate number of British cars on the continent. Is it that our cars are unsuited to French, German or Italian roads? I suggest that the answer goes deeper than that. If my hon. Friend the Minister of State thinks that by bringing in new directives we shall suddenly enjoy freer trade and the abolition of trade barriers, I would say that there are sufficient grounds for questioning that.
      What will be the effect on the United Kingdom of a flood of new directives? They are not just concerned with tearing down barriers; when they are implemented, many will have disappointing results for our constituents.
      For example, one of the many hundreds of directives which Lord Cockfield wants to shove through—one a day—is for harmonising Ministry of Transport tests for private cars. I wonder whether the Minister has considered this and the consequences on the payment made by our private car owners if they have to adopt the harmonisation of private MOT tests. I suggest that, if implemented, Members will receive many letters from their constituents, but of course there would he nothing we could do about it.
      Earlier today I asked a written question of our splendid Home secretary—someone who is prepared to stand up for Britain at every possible time. I asked my right hon. Friend what discussions he had had about the proposed EEC broadcasting directive. His answer was splendid:
      "The Department has had many discussions with the BBC and the IBA on the European Commission's proposals on broadcasting…and we are in close touch with them on the proposed directive. Both broadcasting organisations share the Government's view that a case for Community legislation in this field has not been made out."
      When the Single European Act goes through, that can be imposed on the BBC the IBA, and even on the new cash-rich Thames Television, by majority vote. There is a host of new directives which, I can assure the Minister, will be especially unpopular if they are forced on Britain by majority vote. I regard this not as a move towards freer trade but part of the European design, the Foreign Office design, of promoting harmonisation throughout Europe. I believe it has precious little to do with free trade.
      What about the other proposal— the majority vote on common external tariffs and trade terms? What exactly does this mean? Does it mean that the tariffs in Europe will be changed up or down by majority vote, although we disagree completely? This is one of the most dangerous parts of the proposal. We are well aware that the protectionist movement within the Common Market is strong and growing. There is no doubt that, instead of

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      being a movement towards freer trade, the Common Market is becoming more and more of a protectionist influence in the world. We see that especially in agriculture but also in other industries.
      Does the Minister think that even if the Single European Act does not achieve free trade in Europe it will contribute to freer trade with the rest of the world? I very much doubt that. The EEC sadly disregards GATT minimum prices in its agricultural policy.
      Amendment No. 8 asks the Commission to publish a report specifying all the laws of Great Britain which, in its view, conflict with harmonisation in the Common Market. The Commission wants legislation to ensure that goods move as freely between Rome and London as they do between Birmingham and London. The next amendment we shall deal with concerns tax harmonisation, and I challenge the Minister to say how goods can move between Rome and London as they do between Birmingham and London if VAT and excise duties are not totally harmonised. Of course, as Lord Cockfield has said and others have admitted, it is an inevitable legal consequence of the free internal market.
      I am sure that the Minister genuinely believes that these proposals will be a step towards achieving freer trade. I suggest that, instead of having freer trade, which the Minister and all of us want, within the EEC, we will get a whole host of new, nasty directives imposing things on the British people which they do not want and which Parliament does not want. Unfortunately, we will not get the pay-off in freer trade which we all desire.
      Sadly, the Common Market is in danger of becoming a nasty, protectionist organisation, disrupting world trade and undermining GATT. This Bill, if nothing else, will move the Common Market a further step towards that. It would be much better to concentrate on finding better, more effective ways of achieving freer trade on the basis of existing directives. Instead of bringing forward new laws, we should, like other member states, respond to non-tariff discrimination by doing the same ourselves.
      Some of us have different views about whether it was a good or bad idea to join the Common Market. But even my hon. Friend the Member for Harrow, East (Mr. Dykes) may accept that we have turned out to he real mugs.
      Mr. Dykes: I do not accept that.
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      Mr. Taylor: If that is so, my hon. Friend should visit some of my friends who used to work in the steel works. He should find out whether they believe that they have been treated in the same way as the Italians, Germans and so on. If my hon. Friend has any doubts about us being the mugs of Europe, he should tell me whether he knows of any German firm that would find difficulty in obtaining a British bus to take people from London to any destination they chose. We see plenty of German buses in London, and no one seems to stop them. He should also telephone Mr. Gareth Evans of Southend airport, the Miracle bus company, or the Under-Secretary of State for Transport and ask them whether I am telling the truth. He should telephone the MAYJEX Company and ask what it thinks of implementing the inner German trade agreement.
      Sadly, we are the mugs. We keep the rules, and if there are more rules we shall keep more of them, while the other
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      member states do not keep them at all. Rather than representing an improvement, the Bill represents a move towards greater bureaucracy and harmonisation, and there is no voice in it for Britain.
      Mr. J. Enoch Powell: I begin with a confession that may little endear me to either side of the Committee. I have a deep-rooted prejudice in favour of freedom of trade. I am sorry about that, and apologise for it, but it is so deep as to be ineluctable. I cannot help believing that benefits for all concerned, inside and outside the nation, are likely to flow from freedom of trade.
      Unfortunately, the EEC—despite its earlier legends—has nothing to do with freedom of trade. I need not labour the fact that externally it not only has nothing to do with freedom of trade but has disastrously interfered with trade relations between its member states and the rest of the outside world. Many, even of those who were in favour of it years ago, increasingly wonder whether the damage done by its external restrictions on trade outweighs whatever advantages accrue from the internal free market.
      Mr. Spearing: Theoretical free market.
      Mr. Powell: Indeed it is theoretical.
      The internal free trade of the EEC is procured by compulsion and by an attempt to enforce similar regulations, practices and laws on all the participant countries. One of the beautiful advantages of free trade is that one does not have to interfere with anyone else to enjoy it. Freedom of trade between the citizens of two countries enables the inhabitants of them both to follow their own customs, ways and stupidities and to have their own forms of taxation and of internal restriction, yet they are still able to take the consequences without imposing them on anyone else.
      Therefore, internal free trade within the EEC does not need compulsion, and is not even achievable by compulsion. How is the paradox resolved that the internal free market has to be striven for by a growing series of directives, compulsions and enforced harmonisation. In this group of amendments, we are considering how that enforcement could be more speedily and readily achieved The answer is that the EEC is not about freedom of trade. Despite its name, it is about not economics but politics.
      There is a long tradition to that effect in central Europe. There is a long tradition of a Zollverein. In the middle of the last century it was not an instrument intended to bring about the economic freedom, liberation or advancement of the countries party to it, but an instrument of mediatisation. It was an instrument of growing pressure upon the minor states of central Europe to be joined in a political union under the leadership of Prussia. It was par excellence a political measure.
      Through all these enactments, through all the basic principles of the Common Market, we discern this meaning of the free market. This is a free market that is to be based upon common political institutions and upon the enforcement of common institutions and laws as a process leading towards, so it is imagined, political unification. It is about political unification and not about the benefits of free trade. Indeed, it is about compulsion and not about freedom. It is not really surprising in the end, if we look at the nature of this institution which we joined in 1973, that we should find that the United Kingdom, when it set out to try to secure greater reciprocity in freedom of trade in various respects, ended

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      up by being confronted and obliged to comply with a new regime for the enforcement of common regulations upon itself as well as upon the other members.
      The hon. Member for Southend, East (Mr. Taylor) is of course right when he says that in the end politics gets its way. A book has been published recently by an American, a former Minister in the Reagan Administration, under the name "The Triumph of Politics" in which he describes his originally innocent discovery that, whatever were the economic professions of the Government that he served, politics had its way in the end. That has been beautifully illustrated by the point of the hon. Member for Southend, East, that in this institution which professes to aim at the political uniting of the former, the ex-nations of central Europe, the nations are there alive and real, seeking their internal advantage, seeking their separate advantage, under cover of enforcement upon others of regulations that they think will be advantageous to themselves.
      It is a remarkable example that we were reminded of by the hon. Member for Southend, East that, of course, the Common Market has an open window to the East because the German motivation of German reunification and the ability of Germany to hold the Common Market to ransom from its earlier inception enforces that upon the rest of the members of the Community, and makes an absurdity of their attempts at control. Not only are we pursuing a political objective, therefore, but we are pursuing a political objective which in the end, after all the grief and struggle, will be found to be a will-o'-the-wisp and a mirage.
      I do not know whether I am getting agreement from the hon. Member for Harrow, East (Mr. Dykes)—no, I am not.
      Mr. Dykes: I, like so many other people, am worried by the right hon. Gentleman's sheer hysteria.
      Mr. Powell: As they say, I am within the judgment of the House. It was my disappointed expectation that I could trade off with the Member for Harrow, East my acceptance with him that the motivation of the European Economic Community is political union with the recognition on his part that that political union is itself a mirage and a will-o'-the wisp. That is where the hysteria arises — in mistaking the unattainable for a solid, political objective which one can obtain by enforcing upon unwilling populations what, if they were free to do so, they would reject.
      Mr. Cash: Is it not right that at the time of the European Communities original accession in 1972 the right hon. Gentleman said:
      "I come to speak to you as a European among Europeans."?
      Perhaps he will recall that expression. But of course what he meant by that is not necessarily the same as some other people.
      Mr. Powell: I think that the hon. Member is referring to my personal crusade in the early months of 1971 when, as best I could, in four of the languages of the Community, I sought to explain to them that the British did not really mean this, could not really entertain the objectives that were professed by the European Economic Community and, if they did not want a great disappointment, they
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      should not mistake British humbug for genuine British intention because it was not within the comprehension or within the capabilities of the British people genuinely to enter into the submergence of their institutions and their identity and their nationality into a European amalgam. I am obliged to the hon. Member for reminding me of that sub-heroic episode.
      Sir Anthony Meyer: As a prophet, the right hon. Gentleman is very often right. He invariably prophesies the worst, and the worst usually happens. He referred to Germany maintaining a window to the East, but does he recognise that in the view of other EEC members this country maintains a window to the West, because of the special relationship that a great many people claim we have with the United States and the very special relationship we have with, for example, New Zealand?
      Mr. Powell: I think that the hon. Gentleman would have difficulty in maintaining that the United Kingdom has trade privileges outside the Community that are similar to those that have been accorded to the Federal Republic of Germany. However, I concede that the hon. Gentleman has rumbled my prophetic method. One of the advantages of being a cursing prophet rather than a blessing prophet is that things generally go wrong and therefore one is likely to turn out to be right all along.
      Mrs. Chalker indicated assent.
      Mr. Powell: I am glad to have the Minister's agreement. This is a subject upon which ministerial confirmation is perhaps better than the reinforcement that one could have from any other quarter.
      I want to address a number of inquiries to the hon. Lady arising out of the amendments that we are making to the original treaty by virtue of some of the articles of the Single European Act that are involved in these amendments. The first is article 16. My question relates to the new article 28, which article 16 writes into the treaty. I must admit that this is a matter of inquisitiveness on my part. The main object of the amendment is to substitute qualified majority for that unanimous decision which, as the hon. Member for Southend, East reminded the Committee, the Government originally thought would be adequate for the achievement of their economic objectives.
      What puzzles me is that the opportunity was taken to make another alteration. The original article referred to
      "Any independent alteration or suspension of duties".
      Now we are correcting that and writing in instead:
      "Any autonomous alteration or suspension of duties".
      I should be most interested to know whether the hon. Lady could obtain information in good time about the particular virtue of substituting "autonomous" for "independent". Was there some linguistic imperialism at work in the recesses and corridors of the European Economic Community that preferred one adjective rather than the other? I hope that it is not troubling the hon. Lady too much to satisfy my curiosity on that point.
      Mr. Marlow: The right hon. Gentleman has great experience of legal and parliamentary texts. Although the article to which he has just referred relates to the common customs tariff, as discussions are taking place with regard to taking measures against South Africa, would it be possible, if the majority of Community members were in

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      favour of changing the tariffs for various items from South Africa, for them to use majority voting to impose that decision on the United Kingdom?
      Mr. Powell: The Minister will no doubt deal with that point when she is kind and courteous enough to reply to my less significant query.
      One has to read article 18 together with article 19. Remembering that we are writing this article into the law of the United Kingdom by enacting it in this Bill, I inquire what it requires. The operative words of paragraph 1 of new article 100A arc:
      "The Council shall…adopt the measures for the approximation of the provisions…which have as their object the establishment and functioning of the internal market."
      9.30 pm
      Now, "shall" and "will" are an eternal torment for foreigners attempting to cope with the English language, and not all members of the component nations of the United Kingdom use "shall" and "will" in the same way. Nevertheless, it is reasonable to expect that there should be some precise meaning in any formulation that is going to be mandatory upon the citizens of the United Kingdom by virtue of being enacted in an Act of Parliament.
      Article 28, with which we were just dealing, says:
      "Any autonomous alteration…shall be decided by the Council acting by a qualified majority".
      I think I know what that means; that if the Council wants to decide upon an alteration it shall do it by qualified majority. That, I think, is the meaning of "shall" in new article 28.
      But I find great difficulty in interpreting in the same way the word "shall" in new article 100A. The natural meaning of the expression "the Council shall" adopt certain measures is precisely that the Council shall adopt and is under an obligation to adopt certain measures. My suspicion that that might be the case is strengthened by what little I can understand of the remainder of the new article. If that can be taken as too abject a confession of nescience I draw attention to the remarkable words that, by the way, they are enacting as part of the law of the United Kingdom:
      "The Commission…will take as a base a high level of protection."
      That is not the sort of language that parliamentary draftsmen are apt to dish up to Ministers who hope to get their Bills through the House of Commons and is a reminder of the strange combination of compulsion and vagueness that characterises the administration of the European Economic Community, whereby we are told here in this House and in this country, "You have enacted this. It is part of the law of the United Kingdom. This is what you are about to do by virtue of the international and legal obligations which you have undertaken". Yet, at the same time, when one reads it, one finds that it is deliberately so drafted as to be absolutely full of holes and let-outs. I see that the hon. Member for Stafford (Mr. Cash) wishes to help me.
      Mr. Cash: Would my right hon. Friend agree that there are distinct differences in the interpretation of Community law when compared to domestic municipal law, which we have in the United Kingdom? Would he agree that it is precisely because of the width of the scope of the European treaty and the rules of interpretation having regard to, say, article 2 of the treaty of Rome against the background of
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      the general objective of the treaty, that we have to look with great care, although not necessarily be unduly critical, at the meaning of the preamble and its inclusion in the Bill?
      Mr. Powell: That will no doubt entertain and amuse us later in the debate, if it is so unreasonably protracted that we reach the question of a preamble, which is interesting in its own right.
      I thought that the hon. Member for Stafford (Mr. Cash) was going to remind me and the Committee that this very vagueness with which the law of the Community tends to be drawn is one of the reasons why the power and scope of the European Court of Justice is from the British point of view so exorbitant. They have to interpret a kind of law that is so drafted as to give to its interpretation by the court a width and a scope that is quite incompatible with our notions of law and judicial interpretation.
      Mr. Deakins: On the sub-paragraph of new article 100A from which the right hon. Gentleman quoted the words "high level of protection", is it not extraordinary that Ministers should have approved so vague a word as "high", which could mean almost anything, particularly when it is not quantified? Will that not create many more problems in the evolution of the internal market, let alone in what the European Court of Justice will think of problems that are referred to it, if something more specific is not put into the Bill? If Ministers had devoted rather more time to the matter, they could have put in words that would at least have meant something positive and would not have been capable of such easy misinterpretation.
      Mr. Powell: It would be interesting to know, perhaps we may be enlightened, whether Ministers would have preferred a tighter drafting of some of these provisions. I must say that I find it difficult to understand how even those who have spent less than 36 years wrestling with the draftmanship of British Bills and statutes could bring themselves to put their signature to documents, which are to be made part of the law of the United Kingdom by the operation in which we are engaged tonight, which contain such vague and almost meaningless expressions as these.
      Mr. Deakins: I have just discovered in the Community's annual report for 1985 the following phrase written by the Commission:
      "The Commission also ensured that its texts"—
      that is, the texts put to Ministers for approval—
      "were sufficiently general not to contain excessively precise clauses on the development of new policies."
      Mr. Powell: I congratulate the hon. Gentleman on his discovery. I hope that it will be given even greater publicity than the proceedings of this Committee might attract. He seems to have got hold of a gem, and it is something which could feature on bureaucratic desks inside and outside the European Community.
      Mr. Teddy Taylor: The right hon. Gentleman has obviously been studying the wording, and therefore may I ask whether he has seen the article which allows a member state to apply for exemption from all these measures if it considers itself to be less well developed? Has he found an appropriate definition of "less well developed"?
      Mr. Powell: I am almost overwhelmed by the illustrative examples of my general thesis which are being offered from both sides of the Committee. Certainly, article 18 is a happy hunting ground for those who are

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      looking for vague formulations and uninterpretable generalisations which we ought to refuse, as a matter of principle, to allow to be made part of the law of the United Kingdom.
      I am sorry that I have allowed myself to be diverted by the delights along the way, but I shall now return to the precise question I want to ask the Minister. I want to ask whether the word "shall" in paragraph I of new article 100A is mandatory. Is it a statement that it is the duty of the Council to do this, in which case the nature of its duty depends on the definition at the end of that paragraph, or does it mean that it can do so if it wishes? It is a rather important distinction and I do not think that we should part with these amendments without knowing the answer.
      Mr. Spearing: I should like to address the right hon. Gentleman before he sits down, because it might be helpful to take it in sequence. Has the right hon. Gentleman realised that if the programme of enforced harmonisation required under this treaty is not completed under article 100A, article 100B takes over where the Commission appears to impose the laws of one nation upon another. Therefore, there is a continuing constraint and duty on the Council to obtain that harmonisation by majority voting. That is, no doubt, the constraint of "shall".
      Mr. Powell: I am tempted by the intervention of the hon. Member for Newham, South (Mr. Spearing), perhaps due to old lexicographical habits, to go just to the extent of pointing out that the word "shall" also appears in the new article 100B. In that article it must be mandatory. Surely it means that the Commission jolly well must. That inspires me with fear that in article 100A the word "shall" means that the Council jolly well must. I hope that that is something on which we shall receive clarification before the end of the debate.
      Mr. Dykes: Tonight, as always, when these issues are discussed in Committee and generally, a form of enthusiastic constitutional madness takes over. I use the word "constitutional" in its lightest sense. As our parliamentary colleagues get drawn into the semantic investigation of tiny words in clauses, they forget that they are complacent and over-reverent members of a Parliament which churns out a monumental amount of legislation every year. The legislation is ill-digested, unexamined, not properly examined. Through our tremendous rituals, usually on a three-line whip, hon. Members vote on the legislation without having had a chance to examine it properly. There is a vast quantity of undigested and ill-digestible legislation. We have that reputation among all objective observers.
      I do not complain too much about that, because there is a good side to this robust Parliament — the manifestation of the will to legislate. However, we all know the adverse consequences of that. When we consider the procedure by which legislation is drafted and examined in the European Community, before it reaches the equivalent of our Second Reading stage — I say that in the colloquial sense; not literally—how can we say that our processes are infinitely superior?
      Mr. Cash rose—
      Mr. Dykes: My hon. Friend has made many interventions. I do not intend to give way. He should
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      exercise a little patience. If I thought that he would make a short intervention, I would willingly give way, but at the moment I have my doubts. I may give way to him later, but not at the moment. I hope that he will forgive me.
      The way in which the Community legislates is seen by more and more objective observers as a better way of legislating. A better legislative result is obtained than that achieved under our system, which is a repetitive nightmare of huge quantities of controversial legislation enacted and then repealed a year or two afterwards by the alternative adversarial political reform that is elected on a minority vote—not even on a built-in, genuine majority of the population.
      Mr. Marlow rose—
      Mr. Dykes: I shall not give way.
      The idea that such a system is wonderful, sacred and marvellous and that the system of continental countries—our friends and allies—which are working together to create a European Community is not is myopic and absurd. The public know it. They are tempted less and less by the false blandishments of that reactionary, old-fashioned and out-of-date argument. That attitude is partly responsible for the decline of this country. That worries me and others who want to see the European Community develop in a robust, positive and, indeed—I refer to the tremendous delays that have been seen in the past—rapid way. That is why the amendments must be resisted by the Committee.
      The creation of an internal market — whatever its relationship to the concessions made at the time of the latest summit agreements which form the basis of the Single European Act—is long overdue. The Committee should be a party to its creation as soon as possible. Such legislation is difficult to create. How different it would have been — I follow the remarks of the right hon. Member for South Down (Mr. Powell) — if we had accepted the invitation of our European friends to join the Community and the Common Market at the beginning instead of coming in too late, when we are less able to change things. We should have joined the European Community at the beginning when we could have forged many of its manifestations and structures in the way we wanted as the island power entering the continent of Europe.
      The internal market is long overdue. Vast benefits will accrue to all the member states from its creation. The sooner that it is created properly the better. I reject the monstrous canard that is repeated on such occasions—that it is the wicked foreigners doing us down; that we are the only virtuous, honest and rule-obeying members of the European Community. That is utter nonsense. If we are endowed with the ability to use a foreign language when we visit other countries, we can easily get our ears bent by the many stories from business men who have tried to come to this country with their projects and have been frustrated by the internal national bureaucracy. That happens in all the countries as the common market in commercial and industrial terms is created.
      Mr. Teddy Taylor: Can my hon. Friend help me to get a German bus?
      9.45 pm
      Mr. Dykes: We all have examples of different problems. As a German speaker, I should love to see the Germans'

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      reply in the file of my hon. Friend the Member for Southend, East (Mr. Taylor). Perhaps he would be kind enough to let me have it so that I can read what the Germans have said.
      Mr. Taylor: Will my hon. Friend help me in my campaign?
      Mr. Dykes: I shall not give way at the moment. I am referring to what he said from a sedentary position. There are many similar examples.
      Recently, during a visit to the National Assembly, I listened to a debate during which references were made to the development of trade in Britain by French companies. Similar assertions were made then.
      Mr. Taylor: Will my hon. Friend give way?
      Mr. Dykes: I hope that my hon. Friend will forgive me for not giving way, because of the time.
      It would have been useful if I had been able to stay longer to listen to the French complaints and try to assist them. That is the spirit in which all politicians of the member states work in creating a healthier economy.
      Mr. Taylor: Is there not a danger that those who do not know my hon. Friend may think that he is a trifle arrogant? My right hon. and learned Friend the Foreign Secretary and the Secretary of State for Transport have been trying for six months to get a German bus for Southend. There is a danger in my hon. Friend saying that he might be able to resolve the matter—I hope that he will—because those who do not know him may consider his remarks are a little arrogant.
      Mr. Dykes: I was referring to the many examples in general terms. As my hon. Friend was shouting out about a bus, I thought that I would use it as an example. My hon. Friend may be right. There are many other examples in all the member states.
      It has been asserted, justifiably, that an examination of the number of rules laid down and the number of times they have been breached by member states shows that we do not come at the top of the list. There are restrictive practices in all member countries. The essential aim in creating the internal market — I wish the Government every success in their efforts—is to get away from our difficulties and harriers, not to use them as part of a philosophical argument of resistance to the whole idea. That is the mental disease of the anti-marketeers in the Committee. They do not have a genuine wish to see the creation of a common market.
      There are misapprehensions about the way in which the United Kingdom has succeeded, or not succeeded, as a member of this still rudimentary, primitive and underdeveloped internal market system, in terms of services and the provision of goods. It is difficult for us to separate out, in philosophical and technical operational terms, the internal demand management policies of any national Administration and the arrival of a new member in the market. I think that it is reasonable to assert that we have done well with respect to the net addition to our physical exports to other European countries and with respect to some aspects of our invisible exports to some European countries.
      I have frequently quarrelled with the internal application of the Government's demand-deflation policy since 1979. Have that policy and excessive adherence to monetarism, which became unfathomable as time went on,
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      meant that our economy has been too weak and too small to take advantage of the opportunities in the larger market? Admittedly, we have done well with a certain number of increasingly rather esoteric products, but we have not done well with motor cars, as my hon. Friend the Member for Southend, East said. Why? Is it a combination of union misbehaviour, weak management and poor marketing policy? Is it also the fact that the United Kingdom is, par excellence, the country that invests less than all advanced countries with equivalent populations?
      The figures for investment in new assets, both public and private, for research and development and for reinvestment from our own creative internal resources fill me with a certain terror and anxiety for the future. That syndrome appears to be persistent.
      Mr. Marlow: On a point of order, Sir Paul. I wonder whether you could direct the Committee's attention to the amendment to which my horn. Friend speaks?
      The Second Deputy Chairman of Ways and Means (Sir Paul Dean): I was beginning to listen a little anxiously to the hon. Gentleman who is straying into some of the later amendments. The amendments under discussion deal with the internal market.
      Mr. Dykes: Obviously, Sir Paul, I shall follow your guidance. I was referring to amendment No. 5 and those grouped with it. I had to develop the argument about the state of the United Kingdom's economy and its investment weakness to relate it to the creation of the internal market.
      Success or failure will be determined not only by the creation of the market and other markets in the world, but by the internal actions of the Governments. That is why the amendments should be resisted and why the articles are so important in the Single European Act.
      Will the Minister assure me that in future we shall increasingly have the essential, qualified majority voting for all decisions taken by the Finance Council and by the equivalent of our economic Ministers' councils, at whatever level, for the reflation of the various member states' economies to get away from a prolonged period of deflation, not only in this country, which has remained weaker than the other large powers in the Community, but in the other countries, including France and Germany? With the introduction of the Single European Act, that can he done from now on. That could be the more hopeful aspect of what this European legislation can create, if the will is shown not by a curmudgeonly, nervous member state, feeling that it is half a failure or half a success only, and therefore unable to exert the political will to cooperate with our fellow member states, without providing a lead for the creation of a dynamic European economy.
      Mr. Roger Moate: I hope that my hon. Friend the Member for Harrow, East (Mr. Dykes) will accept a genuine expression of sympathy from me. I suspect that his ideological attachment to and his adoration and love for all things European has stopped him from enjoying the debate so far, and the masterly speech given by the right hon. Member for South Down (Mr. Powell). I am sorry for him because he seems so bored with controversial politics in the United Kingdom. He said how much he regretted the type of controversial legislation that we have introduced into this Parliament, sometimes to repeal it later. One can only conclude that my hon. Friend wants supranational laws passed on a greater scale

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      to put our activities into the perspective of a minor role. He regrets the legislation that he has been supporting in the Lobbies in recent years, and looks forward to the time when legislation will be done on a grander, broader scale, without the precise detail into which we enter. He looks forward to the day when the great Euro-ideals which he espouses will be accepted readily and easily by all hon. Members, without any chance to quarrel. I am sorry for him if he is bored by our debates, especially by our constitutional arguments, which others may view as significant changes.
      Sir Russell Johnston: Perhaps the hon. Gentleman would extend a little of his sympathy to me, too? Given that controversial issues are introduced and that part of the argument against a Single European Act is that it would reduce our capacity to defend our national interest, does he not agree that the national interest varies according to which party is in power, and that there is no abstract definition of it whatever?
      Mr. Moate: That is determined by the British people and the Parliament at the time. Indeed, the definition of the national interest will change from time to time, but at least it is determined by the British Parliament or the British people through their Parliament. The hon. Gentleman makes well and clearly the point that the capacity of each nation to defend its interests is reduced by this proposition. However, my hon. Friend the Member for Harrow, East is bored by these trivial debates. It is all too tedious for him. Why do we not just accept the splendid Acts rather than debate them at some length?
      Sir Anthony Meyer: It is common ground that this country is uniquely well governed, in an exceptionally efficient system. My hon. Friend has to square that with the fact that France and Germany, which were beaten to their knees in 1945, have living standards appreciably above ours, which has probably nothing to do with the political system.
      The Second Deputy Chairman of Ways and Means: Order. We are now straying from the subject of the debate, which is the internal market.
      Mr. Moate: I thank you for making the point much better than I would have, Sir Paul. It is out of order, but my hon. Friend's point is not even relevant to the debate.
      This brief debate on the extension or completion of the internal market is the reason for the Bill. The only reason that we have it before us is that it was the price that the Government were prepared to pay for the completion of the internal market. One would not think so from the fairly thinly attended debate or from the rather abstract discussion that we have had, but if it were not for the Government's wish to make progress in this direction, we should not be debating the Act. I do not believe that it is worth paying the price of the constitutional sacrifice that we are making for the contents of the Bill. What is supposed to lead us to the completion of the internal market is naive expectation elevated into statute form. It is pure optimism translated into legislation.
      If one wants evidence of that, one has only to look through the Final Act and at our experience. I ask my hon. Friend the Minister to address one point. What specific obligations will this Bill place on other member states for
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      the removal of obstacles to trade? We can well see that there could be majority voting on a number of issues, but there are so many exemptions that I suspect that, in practice, the completion of the internal market will make little progress. If we were talking about a Bill that put into precise form the removal of certain obstacles, we would be talking about something worth while, but we are not. We are talking about a whole range of proposals that wrap up the introduction of qualified majority voting on a number of issues. That is not the same thing as laying obligations on member states.
      I make it clear that I am a great believer in the principles of free trade. I am not sure whether free trade is a principle, but it is in the interests of the country and pragmatically we should welcome it. I would warmly welcome the removal of as many tariff and non-tariff barriers and obstacles to capital movements and insurance sales throughout the Community as possible. However, we can achieve all that without joining the EEC. The EEC was essentially a protectionist device. It is not a free trade area, which is a concept that would have been warmly welcomed by the vast majority of people. This new proposition does virtually nothing to take away the Community's protectionist nature.
      I would warmly welcome freer trade, but I do not welcome the imposition of compulsory harmonisation of those obstacles that are deemed by bureaucrats to be in the way of free trade. Free trade between nations is different from compulsory harmonisation of all the nations concerned. That is what we are being told: in many areas where we might object, we shall be compelled to accept majority voting. In many of those areas there could be considerable reaction in the House and throughout Britain.
      I hope that my hon. Friend the Minister will also consider the practical example given by my hon. Friend the Member for Southend, East (Mr. Taylor) on broadcasting. That is a classic example of one of the hundreds of smaller matters where harmonisation might be required, although I am sceptical about whether this will happen against the express wishes of the Government. Why should we do that? What does it have to do with the completion of the internal market?
      It being Ten o'clock, THE SECOND DEPUTY CHAIRMAN left the Chair to report Progress and ask leave leave to sit again.
      Committee report Progress.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the European Communities (Amendment) Bill may he proceeded with, though opposed, until any hour.—[Mr. Neubert.]
Mr. Moate: I should be grateful if my hon. Friend the Minister would consider some of the practical illustrations that have been given, including broadcasting and the MOT. They are the tip of the iceberg of hundreds of regulations that might be unwelcome to the House and to the country and that we might be forced to accept. We are being asked to pay a constitutional price for naive expectations.
My hon. Friend the Member for Harrow, East and others talk about the great period of our Presidency. It is surprising how quickly a Presidency can come and go, with nothing remaining as a souvenir of that great period of

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grandeur. I forecast that that will happen this time. The completion of and progress towards the internal market is a pious hope and it is folly to pay a constitutional price for it.
Mr. Budgen: Does my hon. Friend suggest that the Minister should explain to the House the constitutional advantages of the Presidency? I agree that, in recent weeks, we have heard much about the exciting possibilities that will he open to the United Kingdom during our Presidency. It would be most reassuring if my hon. Friend the Minister could explain the advantages.
Mr. Moate: I suspect that that, too, strays rather wide òf the completion of the internal market and the amendments that we are discussing. Perhaps it is one of the few benefits of being a member of the Community. For a few months, we shall have the illusion of granduer, with a range of Ministers being given the wonderful title of "President".
What have we gained so far? If have not gained very much, why not? Hon. Members have mentioned insurance. We do not need a new Act statutorily to remove insurance barriers, but so far every move has been so incredibly timid as to he of almost no benefit to Britain. I suspect that exactly the same will prevail in the future, because most of the European internal national insurance arrangements are so nationalistic that no amount of naive hope in the Foreign Office will alter them. For many years, those countries will still maintain a completely different tradition of internal regulation of insurance and there will be almost nil benefit to the United Kingdom.
The same applies to many other areas, including the freedom of capital movements. The Minister will accept that one of the Government's most dramatic moves when they came to office was to sweep away all restraints on capital movement and to free exchange controls. That reduces this type of naive little gesture into insignificance. When one introduces into an Act of this kind the good intention of freeing capital movements but then says that less well developed countries can be exempted, that nullifies the object of the operation. Any country in difficulties will claim that exemption. We know that to be so. We know that if Spain, Greece, Portugal, or, indeed, any other member state gets into difficulties, all these pious hopes will be reduced to nothing. We shall not get those free movements of capital, goods or services if any one of the member states at any moment deems that they do not want them.
However, I believe that Britain will continue to try to stick to those rules, even though many member states find ways round them. That is broadly why we are so unwise to take the step that we are doing. We generally adhere to the rules, because, basically, we want those rules to work. We want freer trade. But when it comes to protecting our national interest, we are not as good at it as other countries and, generally speaking, we lose. Therefore, we are paying a high price in constitutional terms for an empty piece of expectation on the completion of the internal market. Ultimately, I hope that the Bill will be rejected, but certainly these amendments need to be supported.
Mr. Spearing: The hon. Member for Faversham (Mr. Moate) has done the House a service in pointing out one of the fundamental differences between free trade, be it across the world or between nations such as Germany or Italy in their earlier development, and what we have before
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us today, and, indeed, the philosophy behind the so-called internal market and its authorising government. He has helped us to understand, as has the right hon. Member for South Down (Mr. Powell), that we are not just talking about the economics but about the political power that requires there to be this equivalence of law over the whole area and, indeed, the range of law which is required.
One of the differences in that concept is the need to exercise legislative authority. Whereas free trade can be relatively easy by means of an international treaty, the imposition of common laws, requiring a theoretical perfect market which penetrates into almost every nook and cranny of technical, industrial, social and economic life, is different. It is the latter with which the so-called internal market is concerned, not only in its legal proliferation but in its institutions of origin — the Commission, the Council, and now the so-called Parliament.
In producing that situation, we have an enormous proliferation of paper. If we are to increase the scope and range of the internal market, as Lord Cockfield and the Government want — indeed the Minister talks about "progress"—we shall be lost in a sea of paper. Already, the proliferation of treaties, articles, regulations and their alarming cross-references are almost beyond belief. When people are kind enough to come to me occasionally for some advice or information on these matters I frequently have to tell them that I am now unable to keep up. The fact that I have some assistance from the Clerks at the House shows just how serious the position has become. I daresay that the Minister, who has other responsibilities as well, will come to that position fairly soon.
What happens when we come to the second round of discussion in legislation, when we have the position shown in the diagram which we were talking about earlier in relation to the place of the Council and the Commission? In place of the existing five boxes, there are 13 combinations. In making these laws the mind will begin to boggle, because each one of these steps can be knocked around like a tennis ball or a ball on a pin table before it becomes law. The amount of paper work, both in genesis and in legislation related to the internal market, is almost beyond belief.
I have a feeling that in future years it will be difficult for anybody to try to understand what we are doing in this debate. Power will either flow or will disappear into the sea of paper and people will ask what Parliament was doing in passing these laws about the internal market. They will find great difficulty in understanding the matter because they will need to have five documents: the informal selection sheet, the amendment sheet, the Bill, the European Single Act and the treaty of Rome. Even with those documents and even if they are fairly adept at dealing with them and their inter-relationships, this debate will not be very meaningful.
Because each group of amendments is so wide in its scope, each of these debates, of which this is the second, provides enough scope for a Second Reading. That is why many of the speeches have not been precise about the texts of any of the matters that are before the House. I do not say that by way of complaint: it is a consequence of the nature of the material before us. That material highlights the fact that we are not properly doing our job, even with the time we are taking. I say that not because I want to use up time as some hon. Members might suspect, but for you, Sir Paul, to bear this in mind in relation to any matters on the closure in these groups.

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I do not intend to proceed to the scope of a Second Reading speech, but to what I regard as proper Committee work. Committee work is much easier upstairs, where we have desks and tables, than it is in the House. Although I make no complaint about that, I propose to revert to the atmosphere that more often prevails upstairs, because I shall go in detail into some of the text on the internal market. Do I detect a little disappointment from the Treasury Minister? One day people may look at these two days of debate and say that gentlemen of England now abed might well be here. If power goes from this place it may not worry the Whips or the Government, but it will worry the people of Britain.
Mr. Deakins: Does my hon. Friend recall that in 1972 the European Communities Bill spent a large amount of time in the House? Many hon. Members took part in those debates and all sides of the argument were advanced. This Bill cannot be said to be in the same league as the 1972 Bill, but it is a major constitutional Bill and the most important that we have had in the House since 1972. To think that it can be disposed of easily seems to be an over-optimistic view.
Mr. Spearing: I agree with my hon. Friend the Member for Walthamstow (Mr. Deakins) in some ways. This Bill and the European Single Act treaty— I shall keep on calling it that because it is not an Act in our sense of the word — may be less important in some ways than the European Communities Act 1972 and the debates leading up to it, but in other ways it might turn out to be of even more importance because it may reinforce and accelerate a good deal of what happened subsequent to that Royal Assent to the Bill without the public and without even our colleagues in Parliament knowing.
As several of my hon. Friends will remember, we debated that important 1972 Bill for one or two days a week for one or two months. Not only were we able properly to prepare, but we could catch up with what had gone before. At that time we had a different set up to that which exists now and the Department and the Minister could prepare for the debates and reply to correspondence. We were able to have questions in the House and other debates. This Bill will not give us that opportunity. Perhaps you will bear that in mind, Sir Paul, if there is any tendency to expedite matters.
10.15 pm
Sir Russell Johnston: If this Bill is so constitutionally important, why is the House not crammed with hon. Members anxious to speak?
Mr. Spearing: I am glad to be able to reply to that. The hon. Gentleman may not have taken my point on the proliferation of documents. One big difference between the 1972 Bill and this one is that in 1972 people had some idea of what the legislation was about and of its significance. There was at least some national understanding. But there is virtually nothing in this Bill's explanatory memorandum that would give the casual reader an understanding of the contents of the Bill or of the Single European Act.
The Government have only published the Single European Act as it stands. Only a Select Committee has given an as it stands, and as it will be, version. The Government have not published a White Paper telling us
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what it does. The Single European Act treaty was not susceptible to the procedures of the European Select Committee on legislation. Because of that, and because alliance Members, who are very much in favour of the legislation, have not participated much in the debate, other than to say that they are in favour of it, general knowledge of the Bill is far less than its importance demands—
The Second Deputy Chairman: Order. I know that the hon. Gentleman is dealing with an intervention, but he is now making a Second Reading speech. However, I am sure that he is about to come to the internal market.
Mr. Spearing: Yes, indeed. I said as much at the beginning of my speech. Perhaps I was making too lengthy a response to the intervention, although I wanted to state the truth of the political situation.
At present, the internal market is regulated under the existing articles of the treaty of Rome. Article 100 is the current regulating article. It says that the Council shall, acting unanimously on a proposal from the Commission, issue directives for the approximation of such provisions as laid down by law, legislation or administrative action in member states as directly affecting the establishment or functioning of the Common Market.
Article 100 was inserted to cover those instances when the treaty of Rome did not specifically provide power for the approximation of such laws. It was a sort of Henry VIII clause, saying that in order to complete the Common Market, article 100 was to be used. It was quite controversial, because we frequently got legislation under article 100 which pushed at the limits of the vires of the EEC, particularly in technical harmonisation and the environment. That is one reason why both of those topics are now under the European common Act included in the specific treaty vires of the EEC. Thus we are talking about not only greater speed of legislation and adjusted majorities but wider vires as well, all at once. The Single European Act changes the unanimity rule entrenched in article 100 to majority voting under article 100A. That is the article that gill take over. I shall talk about the countries involved in the qualified majority shortly but as we go through these matters I will ask the Minister some questions which I hope she will answer either at the end of the debate or conceivably on clause stand part.
My first point relates to Article 99 of the treaty of Rome and Article 17 of the Single European Act which states that, despite article 100.A. matters relating to:
"turnover taxes, excise duties and other forms of indirect taxation"
shall remain unanimous. That is important, because the Government have made great play—understandably so — by stating that "Oh yes, it is majority for many things, but on these matters we retain unanimity". I think that that will he welcomed by all hon. Members even perhaps by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston).
As I understand it, there are directives relating to VAT which have already passed into EEC legislation and which do not require anything to do with the Single European Act but which require us to harmonise our VAT provisions, irrespective of article 100A in the Treaty. It is suspected that the hapless Chancellor has already had to abide by those directives in harmonising the excise duties on alcohol or perhaps even requiring VAT on buildings.
The Second Deputy Chairman: The hon. Gentleman is dealing with the next amendment, which refers to fiscal harmonisation. We are now dealing with the internal market, which is a separate matter.
Mr. Spearing: I apologise because I did not realise the scope of these did not go back to Article 99 and I shall now proceed with Article 100. Line 3 of Article 100A states:
"the following provisions shall apply for the achievement of the objectives set out in Article 8A."
I have studied these documents fairly frequently over the past few days and I cannot find an Article 8A of the Single European Act there is just an Article 8. I have studied the treaty of Rome and I cannot find an Article 8A there either. At some stage in the debate perhaps we can have an answer from the Minister as to what objectives are found in Article 8A and where it is.
Mr. J. Enoch Powell: If the hon. Gentleman tries page 8 of the Single European Act he may find it at the bottom of the page.
Mr. Spearing: I am very grateful to the right hon. Gentleman. I see the point. What has happened is that there is a new Article 8A which will be put into the treaty of Rome and it is not the existing article. It should really say Article 8A applies to the new measures. I am grateful to the right hon. Gentleman. It illustrates the difficult maze which we are in. Perhaps I have not been as efficient as the right hon. Gentleman. If we are finding this difficult I fancy it is an answer for the hon. Member for Inverness, Nairn and Lochaber.
I now proceed to the point I raised with the right hon. Member for South Down at the end of his speech. That is the political compulsion on the Council of Ministers that it should complete as many of these harmonisation proposals as possible well before 1992. I will not deal at great length with the 300 regulations which Lord Cockfield has waiting in the wings. He has laid them out in the appendix to his voluminous report. We are aware that they will be implemented under Article 100A in due course. I shall refer in a moment to some of the regulations which will be implemented early on.
What is the effect of Article 100B? We are aware that, after 1992, the Commission, as stated in Article 100B, together with each member state, has to draw up an inventory of national laws and regulations which, under Article 100A, have not been harmonised. In other words, before 1992 comes those of the 300 regulations, or others which have been invented by them, not actually past into law will be collated. After that date, the Commission presents the package to the Council of Ministers and the Council—I quote from the provisions of article 100—
"acting in accordance with the provisions of Article 100A".
That no doubt means qualified majority, and I ask the Minister to confirm that. This is another piece of cross-reference that we must get sorted out. The article continues:
"may decide that the provisions in force in a Member State must be recognised as being equivalent to those applied by another Member State."
The word "may" is slightly misleading. If I read the provision correctly, the Council can read the inventory and say, "Germany has a good system there, and that should be the system for the entire EEC." By a qualified majority, if that is obtained, that becomes the law for the entire EEC.
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This sounds improbable at first because of the draconian nature of the approach, but as I read the words of the treaty, that is what is likely to occur.
Mr. J. Enoch Powell rose—
Mr. Spearing: The right hon. Gentleman may wish to correct me.
Mr. Powell: I wonder whether the hon. Member for Newham, South (Mr. Spearing) is correct in his interpretation of the second part of the first paragraph of new article 100B in article 19 of the Single European Act. It appears to say that having made a list of non-conforming national laws, there is permission to fudge by saying, "It is all right after all. It is 1992 and we shall regard the national laws as if they conform." It is one of the methods of pretending. It is a youmay-fudge-in-1992 provision. Perhaps my suspicions are ill-founded, but I have received a sort of nod from the Treasury Bench which seems to indicate that it is possible that there is permission to fudge in 1992. I can quite understand the hon. Member for Newham, South being unable to credit that intelligent adults should purport to pass legislation of this sort even in the form of a treaty.
Mr. Spearing: I am grateful to the right hon. Gentleman. If I may revert to some of my earlier remarks, this is good Committee work. I am not sure that we can be at all certain from reading the words of the supranational draft legislation which of the several fascinating and equally bizarre solutions is the correct one. The right hon. Gentleman may be right and I shall be happy to give way if the Minister of State wishes to intervene to put us out of our misery. I rather doubt, however, that his solution is correct, and I shall suggest why. If it is correct, all the national states will play for time. They will say that they do not want to reach any conclusions under article 100A, except where there is a majority to push one through. They will wait, because the fudge under article 100B, which is the right hon. Gentleman's solution, is more preferable as they will be able to continue with their own national laws. If that is so, let the Minister say. If on the other hand, the effect of article 100B is the more draconian and perhaps even more startling solution which I have suggested, from a first, third or fifth reading of article 100B, let us know. We are not having ministerial speeches before ministerial replies, although in good Committee work we usually do, but I shall be glad to give way to the Minister if she can tell us which solution is correct. I would suggest that this is a matter of some substance. It may save the Committee and the House of Commons some time if we are able to clear up the issue straight away.
Mrs. Chalker: I am happy to help right hon. and hon. Members on this issue, which I can see has caused a great deal of heart searching if not head scratching. I shall explain what article 100B provides. As the hon. Gentleman said, it provides that in 1992 the Commission will draw up an inventory of national laws which would be harmonised by the end of 1992 under article 100A and which have not been so harmonised. It is then up to the Council to decide be qualified majority on the extent, if any, to which such provisions should be mutually recognised as equivalent.
On page 25 the hon. Gentleman will find a declaration that links with the Commission's obligation under article 8C, which he will find on page 9. He will find that is to take account of the special difficulties that face particular economies.

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10.30 pm
The right hon. Member for South Down (Mr. Powell) was almost correct, but not quite, and I can only too well understand why. There has to be a specific decision made by the Council, but the new article would not mean the Council could decide that the standards in any one particular member state would be those adopted by all other member states; would rather enable the Council to decide that member states should give mutual recognition to each other's standards in a particular area in order to allow the free circulation of goods. They would not be applying their own countries' standards on goods from other countries. It would require anyway a specific Council decision in each case. That would remove the worry of the hon. Member for Newham, South (Mr. Spearing) and, I hope, clarifies the matter for the right hon. Member for South Down.
Mr. Spearing: I am grateful for that ministerial intervention. This is as a Committee should be.
The Minister has said that what will occur is not of the solutions apprehended by the right hon. Member for South Down and by me, but something in between. The Council by a majority, I understand, may say that any two or more member states may voluntarily regard each other's national arrangements as mutally applicable and accept them, so that will become the basis on which the internal market operates as between those named members. I presume that it does not, therefore, apply outside the two or more members mutually recognising the outstanding arrangements. I note that the Minister nods. I am glad that I have it right.
Mrs. Chalker: Subject to some clarification.
Mr. Spearing: This will be different for every area, of course. There cold be different arrangements for nuts and for bolts, and different arrangements for motor cars and farm tractors, because the regulation will operate in a multiple way. My mind begins to boggle even further at the complications that will arise.
I pass to the question of the operation of the qualified majority. Earlier we were talking about qualified majority as though it would cause some problems. I suggest that qualified majority in the nature of this internal market will cause some problems, but not perhaps in the way that Members expect. No one has so far mentioned the way in which the qualified majority will work.
In the Select Committee we got down to work on this, and discovered that in the Council there will be 76 votes. Of this, 54 constitute the qualified majority. Thus one needs 23 votes to stop something going through. As each of the big four have only 10 votes each, it means that if Britain and France together, or Britain and Germany together, or France and Germany together disagree with a proposal in this very important area, they can be outvoted by the rest. It means also that the big two need another country to join them. Therefore, it would be any of the big four, plus either Belgium or the Netherlands, who have five votes each, or Denmark or Ireland, who have three votes each, who could prevent an agreement. In Community support politics, the power usually lies with those who can prevent rather than obtain an agreement, and a small number can prevent an agreement from being reached. A qualified majority is much more difficult to obtain.
Mr. Marlow: In earlier debates attention was drawn to majority voting. Is the hon. Gentleman aware of the fact that if one adds together Belgium, Holland, Greece, Luxembourg, Denmark and Portugal, the population of those countries is less than the population of the United Kingdom or of the Federal Republic of Germany, yet those countries have 28 votes, whereas the United Kingdom and the Federal Republic of Germany have only 10 votes each? Is that acceptable when we are contemplating the introduction of large-scale majority voting?
Mr. Spearing: The hon. Gentleman has pointed to one of the difficulties. The consequences of these mathematics have not been examined. There has been a great deal of abstract politicising, but the practical matters to which he referred will be important.
I point out another practical matter — the Mediterranean countries. Their votes amount to 28. Therefore, for a blocking 23, not all of them need to participate. It is not just a question of blocking. It is a question of getting something through. To take again the big four, if Italy, France, Germany and the United Kingdom want to get something through, they cannot do it on their own. They need another 14 votes, in addition to their 40. A great deal of mathematical work will therefore have to be done inside the enlarged Council on this question. That does not mean that things will not move quickly, they may indeed move quickly, because there may be majorities for certain issues. During this important debate on the structure of the internal market it is important to put the votes on the record, because they will be significant.
Mr. Cash: Does the hon. Gentleman agree that there are circumstances in which the voting arrangements could be very much in our favour? We may benefit from the opportunities presented by the voting system. In order to ensure that we benefit from it, it is important to ensure that scrutiny is effective and that the necessary changes to the scrutiny arrangements to which my hon. Friend the Minister of State referred are effective in order to ensure that we have proper control over what goes on? Therefore, my hon. Friend is right to say that the terms of the understanding that was entered into between the Government of the day, the House and the British people is to some extent being renaged upon by these arrangements.
Mr. Spearing: I agree with the hon. Gentleman. The Scrutiny Committee published a second special report, to which reference has already been made. There is universal agreement that arrangements of that kind would be helpful to all. I do not want to go into that matter in too great detail, but it so happens that my next point is related to it. The House must be aware of the debate on the harmonisation of the internal market. There will be a great deal of lobbying, not least from commercial firms.
Mr. Leighton: It is said that one arrangement might help us and that another arrangement might not help us, but were we not told during the referendum campaign that we could not lose, that nothing could he done against our will and that we should have a veto?
Mr. Spearing: The referendum related to the Luxembourg veto, but here we are deliberately giving away a treaty veto, which in my view is even more important.

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I was talking about the notice that we would get. I have been able to get a copy of regulation 11019/1985, published in Brussels on 3 December 1985. That is a report by the Presidency on the subject of the:
"Rolling Presidency Action Programme for the completion of the Internal Market."
So it is very much on what we are discussing.
I was surprised to see this document, which reached me by regular channels although not those of the Scrutiny Committee. I was surprised to read its contents, which I shall describe to the House, because the document was not available through channels open to the Scrutiny Committee. It had not been published in Brussels and the Scrutiny Committee terms of reference refer only to documents published for submission to the Council.
Nevertheless, the document was available, although not the Scrutiny Committee and therefore not to the House. I draw the attention of the House to the list of harmonisation proposals in the appendix. There are many action programmes for this year, some of which have been published in a report. I have seen it in an answer to me today. There are about 100 of them.
The document deals in Annex II with items for discussion at the Ecofin Council. I draw to the attention of the House matters that are now under discussion at the Ecofin Council is relation to future harmonisation. First, there is a proposal:
"concerning the harmonisation of income taxation provisions with respect to freedom of movement for workers within the Community."
I can only interpret that, Sir Paul, as a proposal that will harmonise income tax as a means of ensuring freedom of movement of workers.
Were the British people to be told—I hope that the Minister will deal with this in her reply — that discussions were going on in Brussels about the harmonisation of income tax throughout the Community, subject to majority voting, I think that they would be surprised. We would have been surprised in the House.
The document says:
"Excise duties: Proposal for a Council decision providing for a standstill ensuring no introduction of new excise duties which give rise to border formalities.
The Second Deputy Chairman: Order. I am sorry to interrupt the hon. Gentleman, but I am afraid that he is straying again into the realms of amendment No. 7, which will be the subject of our next debate.
Mr. Spearing: I shall have to accept your ruling, Sir Paul. I was quoting, if I can get clarification from you, from a document from the European Presidency entitled
"Rolling Presidency Action Programme for the completion of the internal Market."
I can place the document on the Table if you so wish, Sir Paul.
I should have thought that, although there may be an overlap with our debates on amendment No. 7 because of the harmonisation of excise duties and other taxes on alcohol and so on, or indeed on income tax, those are part of the internal market as well as excise.
The Second Deputy Chairman: Order. I understand the hon. Gentleman's point. Of course the internal market is
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mentioned in articles 17 and 99 in relation to the harmonisation of taxes, or fiscal harmonisation, but it would make for a tidier debate if we were to deploy those arguments in the next debate.
Mr. Spearing: I assure you, Sir Paul, that I was not going to enlarge on these programmes individually, or indeed at all. I was merely reading out the list in the document. I hope that my final quotation in the series will not transgress the rules of the House.
The list continues in number seven:
"Proposal concerning the harmonisation of the structure of excises on mineral oils."
I suppose that that does transgress the rules, so I shall leave the matter there.
All of these matters concern the internal market and show the extent and depth to which we are already involved in discussions. I ask the Minister why the Scrutiny Committee of the House has not had a sight of that document. The hon. Member for Stafford (Mr. Cash) has constantly and rightly emphasised that we must get early warning of legislative proposals. Here is an EEC document which we have not had in the House and, although it is contained in an answer to a question from me today, it is not available in the Vote Office.
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The hon. Lady and the Government have constantly said that they are justifying the approval of a reduction in the voting power of the Ministers to a majority on the ground that they wish to make progress in that area. Asked about that in the Select Committee, the hon. Lady resorted to the fundamental belief that any reduction to barriers to trade was a good thing in itself. I would remind the Committee that in command 4715 which was published in 1971 the then Government, talking about the calculation of the effects of these tariff changes on the balance of trade, said in paragraph 45 that they were:
"confident that this effect will 1pe positive and substantial, as it has been for the Community."
We know, because the hon. Member for Southend, East (Mr. Taylor) mentioned it earlier, that in terms of balance of trade the effects are substantial to the extent of £10 billion a year on manufactured goods, according to the hon. Member for Southend, East, and at least £8·2 billion according to the Government's own official figures in Cmnd. 9781. Therefore the effects have been substantial but negative. I shall ask the Minister a direct question yet again. If the harmonisation so far has resulted in such a diminution of the advantages to Great Britain or the United Kingdom, how does she think that further slight reductions in the harriers to trade and increasing communality of the internal market will reverse those figures? Will they be slowed clown to a speed slower than they are growing already? It appears that the reason for going into the Common Market would be that there would be the reverse effect than that which has occurred. Therefore, when the hon. Lady says progress across the board, whatever it be, she must provide some justification other than that single word.
Mr. Bill Walker: Earlier this evening the right hon. Member for South Down (Mr. Powell) drew the Committee's attention to the imprecise nature of the articles we are debating tonight with regard to the internal market. He drew attention in a manner which provoked a reaction from my hon. Friend the Member for Harrow, East (Mr. Dykes), who suggested that the legislation that we deal with in the House of Commons — what he described as controversial legislation—was less productive and useful than the type of legislation we are discussing in these articles. I find that quite offensive, and I hope that he does not object to my saying so.
We spend many hours in Committee dealing with law. I refer particularly to Scots law, which deals with matters that affect the citizens and electorate in Scotland. Scots law, both civil and criminal, impinges on aspects that are affected by what we are discussing in these articles, and anyone who thinks that it does not has never been in business, otherwise he would realise how often it does.
Sir Russell Johnston: I dare say that that is what happened tonight with the Scottish Standing Committee on Legal Aid Bills. The Government chopped the Committee when they were just about defeated.
Mr. Walker: That is right.
The Second Deputy Chairman: Order. Will the hon. Member stick to the Bill and to the amendment?
Mr. Walker: That may have been a type of Exocet missile designed to hit me, because I should possibly have been present in the Committee. Knowing the arrange-ments of the House of Commons, as you do, Sir Paul, you will realise that I would not have been in the Chamber had it not been agreed by the Whip that I could be here. I have no knowledge of any events taking place in the Committee, and I shall not comment, other than to say that if I had been present in the Committee I probably would have made some contribution, as I am trying to do in this Chamber. [Interruption.] Is the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes)—
The Second Deputy Chairman: Order. I allowed the hon. Member to have a little say in response, but we must get back to the amendment. We are not considering a Bill which may be before another Committee.
Mr. Walker: I am sorry, Sir Paul. I did not hear what the hon. Member for Cumnock, Carrick and Coon Valley said, as he attempted to intervene from a sedentary position. I have no idea whether he was referring to the speech I am making on the articles or being his usual flippant and frivolous self and was referring to something quite different.
Mr. Foulkes: I was merely trying to help you, Sir Paul, by getting the hon. Member for Tayside, North—I can get his constituency right, even though he called me the Member for Coon Valley; he dare not visit my constituency again — back on the subject. There is a wealth of important matters regarding the internal market, such as life assurance and speed limits, with which the Minister could deal from her previous experience in running our transport service, if the hon. Member would just get on with it.
Mr. Walker: From that intervention, Sir Paul, you will realise that it is the last time I shall invite the hon. Gentleman's children to ride my children's ponies.
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I do not think that the Government's motives in terms of the articles are suspect in any way. The Government say that the articles are necessary if the internal market is to function effectively. They will allow freer trade between the member states of the Community. If our experience showed that there was a need to introduce compulsory harmonisation, I should think that the Committee would be sympathetic. However, we have seen the barriers that exist against insurance finance and capital. Scotland has a great interest in those areas. More importantly, there are the barriers that have been put up against our major export product—whisky.
Our experience to date has shown that attempts to introduce harmonisation and to make the existing articles under the treaty of Rome work — I believe that the articles are adequate—have not worked.
My constituency is not simply affected by the barriers placed on the export of whisky. Under the existing articles it should be possible to stop the dumping—as my hon. Friend the Member for Southend, East (Mr. Taylor) said — of products from Europe, especially from eastern Europe. Holland exports raspberry pulp. However the raspberries are grown in eastern Europe. The Dutch export to other member states, and especially to the United Kingdom, more raspberries in the form of pulp than they grow. It should be possible to prevent this under the existing articles of the treaty of Rome. It is not helping the free market. Over the past five years, there has been a continuous battle to prevent this dumping.
My constituents and I ate concerned that more articles will be included in the treaty which are imprecise, as shown by the right hon. Member for South Down. This is not the type of legislation to which we are accustomed. The provisions have deliberately been left vague. Those who wish to cheat can use them to do so and those who wish to implement them will be uncertain about their powers. I hope that we shall carefully consider what is meant by qualified majority voting and the possible problems that will arise.
I look forward to the comments of my hon. Friend the Minister on my concerns. There is no doubt that all the aspects of concern which I have mentioned could and should have been dealt with under the existing articles of the treaty of Rome. Why do we need all these new articles which the amendments are designed to remove? Are we falling into the trap of having more legislation for legislation's sake?
The European court makes its judgments on political grounds, not the precise nature of the law, as we in Britain understand it. In view of that and "qualified majority" voting, are we not entering into a minefield where, instead of the internal market developing in the wa that the Government and most hon. Members would wish —towards a system of free trade—we have a bureaucracy which works its way through mountains of paper and produces little, and most certainly not free trade?
Mr. Deakins: We are debating the internal market. I have not yet heard a right hon. or hon. Member define precisely what that is. The listener outside or the person reading Hansard might get the impression that we enjoyed a certain state of affairs in relationships with the Community, which was not currently an internal market. But, hey presto, this legislation and the Single European Act come along and we are to be given a single internal market. That is far from the facts.

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We do "enjoy" — if that is the right word — the benefits of an internal market within the Community. That is what all the propaganda in 1971–72 and 1975 from the CBI and other institutions on behalf of British industry was about. We were told, "We need to join Europe", in the first case, and "We need to stay in Europe," in the 1975 referendum campaign, to get the benefit of the vast home market of 220 million people. We are now being told that is not enough and that we must further develop the internal market. We are entitled to look at Britain's experience until now in the internal market before the Committee decides whether it is worth going on to complete the process. Part 3 of the 14th report in 1984–85 of the House of Lords Select Committee on the European Communities, House of Lords Paper 226, on "European Union" is entitled "The internal Market". One must be grateful to their Lordships for having defined the internal market so succinctly in a way that has not been done in this debate. Paragraph 28 states:
"Put simply, it should be as easy for a British company to find a market for its goods, services or capital, or for an individual to find work, in France, Denmark or Italy as it is for a Scottish company or individual to do so in England."
That may inspire a few horse laughs from Scottish people who are unemployed and wish to travel south of the border. I regret to say that Dr. Johnson's famous remark about the most enjoyable sight for a Scotsman being the high road to England no longer applies in terms of employment. A Scottish person would have to come very far south to stand any chance of finding employment, and even then he might be unable to obtain adequate housing.
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Their Lordships continued:
"Of course, there will always be problems created by distance, regional preferences and language … But they should not be aggravated by man-made barriers, of which the most obvious are tariffs, quotas and immigration restrictions … The wider the home market in which European industry can develop, the better equipped will it be to cope effectively in the world market. This simple truth … is a fundamental reason why completion of the internal market must not he delayed."
I would not take the entire Committee with me— not even Opposition Members—if I said that that is neither a simple nor a self-evident truth. Experience has belied that statement.
Paragraph 34 of the report states:
"The creation and maintenance of a genuinely free internal market for all forms of economic activity crossing the frontiers of sovereign states necessarily involves some incursion into the domain of national sovereignty."
There we have the sovereignty issue once again.
The Government's attitude to the internal market is complacent, as is their attitude to the completion of the internal market as set out in the Single European Act, which will be put into British law by this Bill. They seem to be oblivious to, and certainly ignore, the industrial decline of Britain. Their views are a triumph of hope over the experience of the past 14 years.
The Government's attitude was summarised in a reply that I received on 20 May from the Under-Secretary of State for Trade and Industry. I asked him:
"What advantages will be available to United Kingdom industry when the European Economic Community market is completed"—
that is the purpose of this part of the Bill—
"and to what extent does he envisage that United Kingdom industry may derive relatively greater benefits than industry in other EEC countries."
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That is the crux of the matter. It is not a question whether there will be more benefits generally, but whether we shall do relatively better than others. The Minister replied:
"Completion of a unified liberal"—
I do not know where that term comes from, but it is in his answer—
Sir Russell Johnston: It is a good term.
Mr. Deakins: It has only a small "1". It states:
"Completion of a unified liberal internal market in the Community will benefit British industry through removal of barriers to trade with other member states and is one important condition for the creation of a European industrial capability which could compete effectively on world markets"—
whatever that may mean. I have not come across that expression before, and it needs rather more precise definition than it has been given so far.
The answer continues:
"The precise balance of advantage may of course vary from sector to sector depending upon the United Kingdom's competitive position in each, but we"—
the Government—
"believe that there should be clear net benefits for United Kingdom business as a whole."—[Official Report, 22 May 1986; Vol. 98, c. 162.]
I hope that I have not robbed the Minister of something that she intended to say when she replied to the debate. That appears to be the Government's attitude.
When we discuss the internal market, the Government always say, "We are doing very well. Our export percentage is increasing and we hope, not necessarily to improve our manufacturing performance, although we hope that we can, to rely on the service sector as our salvation, because there are tremendous barriers to our services." One accepts that entirely. Therefore, the Government are pressing ahead quickly with the completion of the internal market, have been willing to make sacrifices of sovereignty, and to make concessions to Community institutions and the Community federalists because they believe that Britain will gain advantages from the completion of the internal market.
I hope to show that those advantages must rest entirely in the service sector. The hon. Member for Harrow, East (Mr. Dykes) speaks with some authority on matters to do with the service sector. I believe that he has connections in the City, and knows much about these issues. It would have been helpful to have the benefit of his advice as to how the service sector will take advantage of the internal market, once it is completed.
The Government are extremely complacent. What is the Common Market's attitude towards completion of the internal market? I shall refer to a Presidency report to the council, dated 9 December 1985. It is entitled, "Rolling Presidency Action Programme for the Completion of the Internal Market". In the first annex, the report says that a number of areas have been identified for adoption in the course of 1986. I shall not weary the Committee by going through all the areas. However, there are pages of them, ranging from the control of goods to the removal of physical harriers. For example, the report refers to the
"Duty-free admission of fuel contained in the fuel tanks of commercial motor vehicles".
Other areas include veterinary and, I think, psycho-sanitary controls. However, I am not sure, as the text says, phytosantary controls. Paragraph 10 involves
"Production and trade in medicated feeding stuffs."

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There is nothing wrong with any of that. However, another section is rather ill-advisedly headlined, "Control of Individuals". Paragraph 29 refers to the
"sixth directive relative to exemptions in international travel: increased to 400 ecu."
I think that that has something to do with duty-free allowances. However, I shall not weary the Committee with the rest of that passage.
There is then a section on the free movement of goods, with several directives or proposals in the pipeline. We then come to central proposals concerning the approximation of laws. I shall not go into that, because it will be raised during our next debate.
There is then a section on food law. I shall just quote paragraph 41:
"General directive on food additives (in part modification of existing directives)".
That is to come up as well under the internal market. There is then a passage on pharmaceuticals and high technology medicines. In this instance, the opinion of the European Assembly is awaited on proposals in that sector.
I shall not weary the Committee by listing those things that will probably come about as a result of the Presidency's intention to complete the internal market. Indeed, on 1 July, we become president.
I come, instead, to the passage entitled,
"Free movement for Labour and the Professions."
Sir Russell Johnston: The hon. Gentleman cited food additives, but does he not agree that the introduction of harmonising regulations on food additives has been of great benefit to the people of this country?
Mr. Deakins: I do not for a moment deny the truth of that. But I do not wish to anticipate any remarks that I may make in a later debate on the clause concerning the environment. I shall then go into the issue in more detail, and will ask whether Community action is necessarily the proper way of going about genuine international cooperation. I shall not be tempted from my chosen path, however, even if it is for the benefit of the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston).
Under the heading of "The Free Movement of Labour in the Professions", which is part of the programme for completion of the internal market, there are proposals for a council directive on specific training in general medical practice. I am not sure about the implications of that. Perhaps the Minister will tell us whether that means Community directives about the content of medical education in Britain. There is also a proposal for a directive to faciliate freedom and to provide services in insurance other than life insurance. I am sure that that appeals to the Government, and one can only applaud it, provided that there are appropriate regulations.
Transport is also part of the internal market. I had not realised that before, but I am quoting from an official Community document, so it must be so. In paragraph 88, there is a reference to maritime transport. British merchant seamen and the British shipping industry face the chilling words:
"freedom to provide services in the sea transport sector."
I speak as a complete lay person on this matter. If this is to mean greater competition in coastal shipping, that might or might not be of benefit to Britain. I am assuming that as the Government are in favour of the completion of the internal market, there will be a net benefit. I stress that
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it has to be a net benefit, because there is no point in gaining benefits across the Channel in the rest of the Community if we are to have more disadvantages on this side of the Channel.
There are then sections on taxation and tax harmonisation, all of which will be considered in the next debate. All this is in the Community rolling action programme, and that is what we shall be approving in principle. I am not saying that we shall be approving every item, because they will have to come before the Economic and Social Council, and there must be Commission proposals to the Council, to Finance, Transport and Environment Ministers and goodness knows what else. A programme of secondary legislation will be coming before the Committee chaired with such distinction by my hon. Friend the Member for Newham, South (Mr. Spearing). in the next few years, to complete the process of the internal market by 1992.
Mr. Spearing: Is it not clear that the Government's philosophy, as described by the Minister, is that they will agree to all this because they agree that integration of the internal market will be good for Britain in the round and so, although it is nasty medicine, it is better to be taken because the gain to Britain will be better in the end? Is that not what the Minister said, and does it not show that there will not be many noes from British Ministers to any of these proposals?
Mr. Deakins: We can look forward to the Minister's reply. I understand that the hon. Lady is—I hesitate to say "in difficulties", because she is a competent Minister —in a difficult position. She has to answer debates over the whole range of Government policy, and all Departments are involved in the provisions of the Single European Act. My heart goes out to her, and I am not trying to make her task any more difficult. I imagine that she will be advised during these debates by at least one official from the relevant Departments concerned, and that as we are on the internal market, one assumes that officials from the Department of Trade and Industry, and perhaps from the Treasury, are here.
I am not sure whether the Committee is aware of the fact that the Government may be having some second thoughts about the completion of the internal market. They are dedicated to the principles but are not so certain about the actual mechanisms. I have a quotation from that excellent publication Agence Europe of 20 January 1986, No. 4242 page 3, which refers to the Economy Finance Council
"agreement on the mandate of the group studying the suppression of fiscal boundaries and on the EEC position with regard to export credits."
The second part is not relevant to this debate, but the first part, about fiscal boundaries, is. It refers to the "Economy and Finance Council", which I assume means the Economic and Finance Council, and says that it
"has quickly adopted the decisions which were on its agenda, namely: a mandate for the ad hoc group whose task it is to study the abolition of fiscal boundaries within the context of the creation of the unified economic area by 1992."
I draw the attention of the Committee to the words used in this official resolution of the Economic and Finance Council, on which a British Minister must have been represented, in referring to the internal market as a "unified economic area". I hope that the Minister will be able to tell us whether there is a difference, and if so of what that difference consists. I suspect that this is again a

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problem of translation, but one would have thought that as our Government are so keen on the internal market, they would have made sure that the words "internal market", when translated into or out of the Community languages, meant the same thing."
I am a little puzzled by the use of the words "unified economic area". The report from Agence Europe contains the text of the decision:
"The Council, following on from its decision of principle taken on December 9 last to set up an ad hoc group, has entrusted this group, comprising chiefs of fiscal administration or other personnel representatives of the Finance Ministers, with the task of examining, on the basis of the third part of the 'White Paper' of the commission,"—
that is, the White Paper on the completion of the internal market—
"what measures are necessary to ensure the establishment and the workings of the Internal Market before the end of the year 1992. It is understood that other measures, different from those proposed by the Commission, can be introduced into this study."
11.15 pm
This ad hoc group will not merely work within a remit given it by the Council, with parameters and limits on the subjects and measures it can discuss for completing the internal market; it will also be able to consider other measures and proposals no doubt from outside bodies or individuals which will then go into the melting pot and be put to Ministers in due course for consideration by the EEC Council and then by the House.
The adopted decision continues:
"The Group will report back regularly to the ECOFIN Council, by way of the Committee of Permanent Representatives, the first occasion being at its meeting on March 10 1986."
There has already been at least one meeting of this ad hoc group and a report back to the ECOFIN Council. I wonder what happened at that Council meeting. On this occasion, according to Agence Europe,
"Several delegations have indicated in the minutes their concerns or their wishes concerning the work of this group. In particular, Denmark and France insist that the budgetary implications are duly examined."
I confess that we have heard nothing from the Government about the budgetary implications of completing the internal market. By "budgetary", Denmark and France may have been referring to the EEC budget. However, they might have meant—I would like the Minister to clarify this point— there own national budgets. I can see that the Minister is shaking her head, so I assume that they were referring to the EEC budget. If they are referring to the EEC budget, the House and its Committees should consider the matter. If the completion of the internal market is to have budgetary implications over and above the other strains in the financing of the Common Market, then heaven help us. I wonder whether Her Majesty's Government are aware of the budgetary implications. Presumably they will be adverse rather than beneficial.
The report mentioned other delegations:
"Ireland and Greece request that the problems of the least well off be taken into consideration, in the perspective of the economic cohesion of the Community."
I will not detain the Committee with that issue, because that matter will come up again in the debate on regional policy when we discuss structual funds. Although I have not pursued that line here, it is relevant to the internal market.
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If we are to benefit from the internal market being completed by 1992, the sceptics —I am horrified by the thought of an internal market by 1992 — have every right to look back at the internal market that has existed since 1 January 1973 or after the transitional period January 1978, and consider that eight-year period or the 13-year period, and see how this country has benefited. I need hardly mention to the Committee that the impact of the internal market so far has been pretty disastrous for Britain. Other factors have been at work, but no one can deny that the internal market which was so much prized by the CBI, the Institute of Directors and almost all the economists with a few honourable exceptions in 1971–72, has not lived up to expectations.
We are therefore entitled to ask the Minister—if my facts are correct — why should we believe that our expectations of the completion of the internal market by 1992 will make any difference in the trend of the past eight to 10 years in our trading relationships with the Community?
Let me give the Committee a few examples. The EEC's share of our exports—I am sure that the Minister will be making this point—has increased from 33 per cent. in 1970 to 49 per cent. in 1985. We have done well on exports. It sounds impressive. But we should also bear in mind that one quarter of our exports in 1985 was occasioned by North sea oil. There was no North sea oil in the figure that I have quoted for 1970.
What really matters for the future of Britain is trade in manufactures. Here the increase in the share of exports from Britain to the EEC is some 32 to 42 per cent.— quite a creditable performance. No one is denying that our exporters have gone into the market with a fair amount of vigour.
But the other side of the coin is the increase in our imports from the EEC. They have gone up from 35 per cent. to 54 per cent. That is almost twice as large an increase. In other words, the net benefit has been to the other Community countries, not to the United Kingdom. We are now in the position that for every £100-worth of goods that we export to the EEC, we import £143-worth. We should look sceptically at the internal market.
Indeed, other EEC Governments, not merely our own, are putting a lot of emphasis on the internal market. They are also putting it on competition from outside the Community to explain the disappointed expectations of the consumers, taxpayers and people who live in the Common Market countries. They are now trying to divert attention from the failure of the Common Market to deliver the goods, metaphorically — indeed, literally in some cases—and jobs, by a propaganda war against the Japanese. But the EEC deficit with Japan is insignificant compared with the British deficit with the rest of the EEC. We have Ministers calling for tough measures against Japan, but we never hear Ministers talking about the need for any measures to deal with that, although I do understand that they would be illegal.
Let me give the Committee a few examples. It is right that the Committee should be aware, when considering whether to proceed by approving steps towards the completion of the internal market by 1992, what has happened during the incomplete internal market of the past eight to 12 years.
Let us consider the number of jobs lost in some of our major industries. In the cotton industry 155,000 people were employed in 1970. In December 1985 that was down

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to 39,000. Most of that time we have been in the Common Market and we have had the advantages of the larger home market and the incomplete internal market. The number of people employed in the wool trade is down from 136,000 in 1970 to 41,000 in December 1985. The hosiery industry—I am giving the largest examples—is down from 136,000 to 82,000—not quite such a big drop but still substantial in an industry which one would have expected would have done better in the Common Market than outside.
The carpet industry is down from 46,000 employees in 1970 to 16,000 in December 1985 and the man-made fibres industry is down from 55,000 employees in 1970 to 14,000 in December 1985. What hope is there that those figures will increase as a result of the completion of the internal market? Yet we have a Government who at least pay lip service to the need to increase employment in Britain and reduce unemployment.
I challenge the Minister to say in what way the completion of the internal market will reverse those figures of jobs lost since 1970, many of which have been lost since 1 January 1973.
I have no wish to bore the Committee, but let me give some facts which need to go on the record and which we need to take into account as a Committee when deciding whether to support the amendments. The iron and steel industry employed 448,000 people in 1970 and in December 1985 was down to 146,000 people. The coal industry employed 371,000 people in the earlier year and 197,000 people in 1985.
The motor vehicle industry was to have been the boom industry. I remember Lord Stokes and others telling us in those grand days that we had to go into the Common Market or the British motor industry would not survive. We are in the Common Market, and not so long ago the Government were considering, I think unwisely, but some people would disagree, selling off the British motor industry because it had got into such a disastrous state that it could no longer sustain itself. That is rather unfair to the remaining bit of the British motor industry, but, be that as it may, that industry wanted to go into the Common Market. When it was privately owned it spent lots of money in 1971–72 and in the referendum campaign of 1975 persuading the public that there would be a boom in the British motor industry and success for it in the Common Market, yet employment has dropped from 538,000 to 281,000 in 15 years. No doubt the figures for road and rail vehicles include buses and trucks, and employment there fell from 65,000 to 39,000.
I need hardly worry the Committee by talking about the shipbuilding industry, because it was the subject of recent debates. The fall in employment in that industry has been catastrophic, and even the figures that I have for December 1985 are woefully out of date. Mechanical engineering is the foundation of our technology and manufacturing, and employment in that industry has dropped from 1,074,000 in 1970 to 782,000 in December 1985. In chemicals we were supposed to be leading the charge into Europe with ICI and firms like that, but employment there is down from 373,000 to 246,000. Aerospace is another high-tech industry and not one of the smokestack industries, yet employment there is down from 234,000 to 153,000.
Mr. MarlowThe hon. Gentleman is going through a sort of catalogue of employment in the various industries. We are talking about the balance of trade, and not necessarily about the balance of employment. Throughout the European Community there have been improvements and increases in productivity. The Committee would be interested to hear from the hon. Gentleman what has happened to output in the industries that he has mentioned. There have been massive increases in productivity, particularly since 1979 when this Government came to power. It would be useful to have that information from the hon. Gentleman.
Mr. Deakins: I do not deny for one moment the force of the main point made by the hon. Member for Northampton, North (Mr. Marlow) that there have been increases in productivity, but there are two ways of ensuring increases in productivity, and the Government have taken the wrong course. If we continue towards an internal market in 1992, they will continue to take the wrong course—if we are unfortunate enough to have the present Government returned to power.
Productivity can be increased by reducing the work force and maintaining output, or it can be improved by maintaining the work force and increasing output. Surely the second is infinitely preferable to the first. This Government have been reducing the work force and not even maintaining the output. I shall come to that in a moment.
Mr. Bill Walker: I agree with the hon. Gentleman that one should maintain one's work force and increase output. The debate is about markets. It is customers that keep jobs in being and create jobs. The problem is that all the promises that were made about the opportunities that would be in the Common Market because of the massive increase in customers have not materialised. This debate is about why they have not materialised. That is why we should consider carefully what we are doing, to ensure that we do not make the situation even worse.
Mr. Deakins: I agree with the hon. Gentleman and later in my speech I shall come to his point about the deficiencies in British industry. At this stage I am anxious to ensure that the Committee has the facts upon which it can base a judgment whether the completion of the internal market by 1992 is a good thing for Britain and the British people.
We are here to legislate for our people and not for anyone else, and certainly not for the people in western Europe. They have their own Parliaments to look after their interests and it is not up to us to do that. We have to represent and look after the interests of the people who sent us here, regardless of their politics.
I shall now turn to the overall situation. In 1970 we had a small surplus on the trade balance in manufactures with the original six countries of the EEC. Our total deficit with the EEC is now running at an annual rate—I stress annual rate because we have figures only for the first three months of this year — of £12,000 million. This is a disaster story. The hon. Member for Southend, East (Mr. Taylor) said earlier that our trade with the rest of the world has been relatively better. In fact, it has done much better. In 1970 our trade balance in manufactures with the rest of the world outside the EEC was a plus of £1·7 billion, and currently, at an annual rate, using the first three months of the year and grossing them up, it is running at £3·7

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billion. We have improved our industrial and trade performance with the rest of the world, but our performance with the Common Market has been a disaster.
11.30 pm
The internal market is entirely unbalanced. The balance of trade in specific industries is disastrous. The Government are fond of using something that is called the export-import ratio, and I can give the figures for some of our major industries. I shall deal first with the share of our imports that is held by the other Common Market countries. In plastics they have 78 per cent. of our market, and in other chemicals they have 67 per cent. In textiles they have 67 per cent.— so much for the multi-fibre arrangement and that being a protection for our textile industry. The job losses in our textile and clothing industries have come not as a result of Third world imports but as a consequence of imports from the rest of the Common Market. Conservative Members may say that that is a good thing—that is up to them—but I do not think that it is.
The Community share of our imports of iron and steel was 72 per cent. In paper it was 35 per cent. In metal manufactures, the most basic element in manufacturing industry, the share of the other members of the Community was 59 per cent. They have 43 per cent. of our imports in manufacturing materials. As for road vehicles, they have 79 per cent. of our market. They have 25 per cent. of other transport equipment. Office equipment is supposed to be one of the new areas of technology in which we are supposed to be buzzing ahead, but the rest of the Community has 43 per cent. of our market. As for simpler products, it has 71 per cent. of our furniture market, 68 per cent. of the footwear market and 43 per cent. of the clothing market. It has 54 per cent. of all manufactures. That is a pretty disastrous picture. I shall not weary the Committee by quoting the export-import ratios, but they show an equally bad picture. If anybody doubts that, I shall be happy to quote the figures.
Mr. Marlow: I am sure that the hon. Gentleman wants to look at the picture objectively. It has been said from the Government Front Bench—I think that it is the fact—that we have oil from the North sea, a commodity which we are exporting. That means that we are exporting fewer manufactures. The fact that we have oil in the North sea has an effect on our currency, which in a way makes us less competitive than we would otherwise be. Would the hon. Gentleman like to stitch these factors into his argument? If he does so, he might have a slightly different assessment of the situation.
Mr. Deakins: I am not sure when the hon. Gentleman is an economist, but I am not. I would hate to be drawn into something which, although relevant to the internal market, would take me beyond the brief that I have prepared for myself. I am not an expert and I am not at all certain what is the balance of advantage of the internal market so far in respect of North sea oil, for example. It would be possible to argue with the Government about their depletion policy.
The hon. Gentleman challenged me earlier to produce figures on output. He said that we are becoming more productive and that one would expect employment to fall, but I would not expect it to fall as disastrously as it has. I have some figures on output which I shall quote briefly.
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Steel is basic to manufacturing capacity. In 1979 we produced 28·3 million tonnes, and in 1985, 15·7 million tonnes. That was a fall of 45 per cent. Spain is now a member of the Community, but it was not in 1979, when it produced 7·4 million tonnes of steel. In 1985 it produced 14·9 million tonnes. In 1970 Italy was producing just over 17 million tonnes, and it is now producing 23 million tonnes. France, which was producing 23 million tonnes, has reduced its output to 18·8 million tonnes. The Belgian figure has fallen from 12·9 million tonnes to 10·7 million, and in West Germany production has gone down from 45 million tonnes to 40·3 million.
Those figures do not mean much without considering the percentages that they represent. Britain's steel production has fallen by 45 per cent. The next highest loss occurred in France, where production fell by 21 per cent. — bad perhaps, but by no means so disastrous as the fall in our rate of steel production. In Belgium it fell by 15 per cent., while in West Germany, our main industrial competitor in the world, steel production fell by only 10 per cent. Spain, while outside the Common Market, managed to increase its steel production by 92 per cent. and Italy, a member of the EEC, increased production in steel by 57 per cent.
How is it possible, if burdens are supposed to be shared by the members of the Community under Commission guidelines and injunctions, that that should have been the state of affairs? Let us not forget that under the European Steel and Coal Community, there is no veto; the Luxembourg compromise does not apply. There is majority voting. Because of the lack of a veto, we have not been able to protect our steel industry.
I confess that I do not have the answer to the obvious counter-question: why have other Community countries been better able to protect their steel industries? Ministers must answer that question if they wish to claim that regardless of what went before, we shall do better when the internal market is completed by 1992.
Motor car production is an interesting story. We recall what Lord Stokes said in 1970 and 1971. I do not believe in capital punishment, but he should have been taken out and shot at dawn. In view of the poor performance of British Leyland over the years, one can say, "Pour encourager les autres," as was said of Admiral Byng in the mid-18th century. A more disastrous entrepreneur it would be difficult to imagine— [Interruption.] I am thinking of ancient times. One might mention Sir Bernard Docker, who was largely responsible for the decline of the British motorcycle industry—from a world market share of 95 per cent. in 1946 to virtually nil within 20 years. They are the sort of people who will be leading us into what we are told will be a wonderful internal market that will completed by 1992.
To consider car production, we must take a different base year and compare 1972 with 1984, roughly equivalent to our time in the Common Market. In 1972, United Kingdom production totalled 1·9 million cars. It is now down to 900,000, a fall of over 50 per cent.
Mr. Marlow: If car production has increased in France, Germany and Italy and has reduced in the United Kingdom since we have been in the EEC, is it fair to blame the Common Market for that? Could it be that those other countries have produced better cars more efficiently and that they have not been bogged down by the sort of trade

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union legislation that was introduced by Labour Administrations here, with the appalling industrial relations that followed?
Mr. Deakins: I accept the hon. Gentleman's major thesis, which is that not all the disasters I have catalogued —and I have more of them to relate—have been entirely the fault of the Common Market. I am simply asking how, if that has been our performance so far in the internal market—incomplete though it is, and we have been in it for 13 years—the Minister can say confidently, as she no doubt will, that there will be a beneficial impact on all the factors involved as a result of the internal market being completed. It cannot be logical for the Minister to argue from that standpoint. She will have to address the arguments from a totally different premise.
To take up the hon. Gentleman's point, he is wrong, according to the figures that I have, on car production. Spanish car production has increased in the 12 years from 1972 to 1984 by 92 per cent. German car production is up marginally 8 per cent., but ours is down over 50 per cent. Belgian car production has fallen by a mere 5 per cent. and French by 9 per cent.; and the poor old Italians have gone from 1·7 million to 1·4 million, a fall of about 17 per cent., which is not very satisfactory. None of these is remotely comparable with the fall in British car production. There must be special factors at work in the British economy that should make the Committee sceptical about the chances of our being able to take advantage for the benefit of the people we represent in the completion of the internal market by 1992.
Those are all the figures that I wish to give the Committee on manufacturing output and jobs. Even on our trade with the other countries of the EEC, we have done extremely badly compared with other countries in the Community. I could quote various answers—I will not weary the Committee with them — to show how bad relatively our trade performance in manufactured goods has been compared with our competitors in the Common Market.
Ministers have been cunning in the last few years when challenged on our poor trade performance as against that of the rest of the Common Market and said that our exports have gone up and, moreover, the total share of our trade with other Community countries has gone up substantially, as though in itself that was a good thing. The civil servants who provide Ministers with that sort of brief deserve a kick in the bottom, if not worse, because that is an entirely irrational argument. There are no premises for it, and it does not lead to any conclusion—certainly not to the conclusions that Ministers seek to draw.
It does not matter with which part of the world our trade is conducted. What matters is the total amount of our trade and the net balance of our trade. If we did all our trade with the United States of America and none with the rest of the world, that would be an unbalanced picture —and, indeed, it is very unlikely—but, provided we had a good trade balance, the country would be in a good trading position. The more trade that we do with the European Community, the worse our trading becomes, from which I draw the conclusion that the Government are marching in entirely the wrong direction. Our trade balance with the Community is going downhill steadily. Regardless of what the Government do—and regardless
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of what even a Labour Government are likely to be able to do under Common Market rules and regulations, because we will not necessarily reverse that decline—our trade balance will get worse. Eventually we will end up by doing 80 or 90 per cent. of our total trade with the rest of the Community in this vast internal market, yet we will be having trade deficits of £20 billion or £30 billion a year. How can that be a good thing—to do more and more trading in a vast internal market, yet do worse at it?
It is how one conducts trade, not with whom one trades, that matters and, above all, the overall trade performance, not the areas of the world with which one trades.
Mr. Teddy Taylor: I wonder whether the hon. Gentleman is being too optimistic about our trade with the Common Market. Has he seen the recent figures which indicate that our share of the market of the original six manufacturing countries is now 7 per cent., and it was 6·1 per cent. before we joined the Common Market? Does he accept that the substantial increase in our trade with the EEC is simply because the Common Market now is twice the size that it was when we started?
Mr. Deakins: I think that the hon. Gentleman's logic is irrefutable. It is not for me to provide the answer. That ought to come from the Government, and that is what we are considering.
The counter-argument — I still await any evidence, and I have been giving counter-evidence to persuade the Committee to vote for these amendments or, indeed, for one of them—must come from the Government and be based on different premises and figures to show that we have done well and can do better. I should like to know what they are. I read Hansard every weekend, and the figures are not in there. To prove, as I have done, that we have done disastrously badly and then to be told, "Forget all that; we will do marvellously well in future", as the Minister's reply that I read out earlier showed, is whistling in the dark. It is not merely over-optimistic; it is absolutely foolish to adopt that attitude.
One of the features of the internal market is free capital movement, upon which my party holds certain views. Britain's investment performance in the Common Market has not been at all good. There has been a much greater outflow of funds from Britain to the rest of the Community than there has been from the rest of the Community to Britain. I do not know whether that reflects upon the economy or the Government. When there was a Labour Government, it would have been possible to say that the capitalists in the rest of the Common Market did not like investing in a so-called socialist Britain—which it was not—or in a so called socialist Government, or Labour Government. One would have expected that trend to have been reversed after seven years of a Conservative Government, but that is far from the case.
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The figures are absolutely devastating. The total inward investment, excluding oil, from the rest of the EEC was £80·7 million in the three years 1970, 1971 and 1972. In the years since 1973, when we joined the Community, total inward investment, excluding oil, from the rest of the Community was £800 million. But what about the figures of outward investment? Compared with the £80 million of inward investment, there was an outflow, before we entered the EEC, of £371 million. That represents investment by the British people in the EEC. Over the 12

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years since we joined the EEC that figure has grown larger and larger. In fact, £2·5 billion have been invested in the rest of the Community. The balance of investments has therefore grown worse since we entered the Common Market.
I ask the Minister of State to tell the House how that trend will be reversed. Is there to be even more liberalisation of capital movement? Other factors will be at work that will make it more difficult for any Government of this country to move investment in the direction that they wish.
Since May 1979, our unemployment rate has tripled. Only one other country in the Common Market has suffered such a serious rate of decline. That is Greece, which was not in the Common Market in 1973. Unemployment in the other EEC countries has certainly increased, but by nowhere near so fast a rate. Within the Community, Britain is a special case, yet by promoting the concept of a free internal market, free from all barriers and a free, unified economic area by 1992, the Minister is ignoring completely Britain's experience and the attitude of British industry. She is being over-optimistic.
I shall not weary the Committee by referring to the disaster of our membership on jobs, output, trade and investment. When we try to justify the Bill and the completion of the internal market we shall have to tell the British people something different from what they were told in the 1975 referendum campaign. What were they told by the "Britain in Europe, Yes" campaign? The House will recall that there were three factions: yes, no and, in the middle, the Labour Government who said, "On the whole, yes." The referendum voted in favour of entry by a majority of two to one.
What did the "Britain in Europe, Yes" campaign say? It said, under a bold headline:
"Staying in protects our jobs."
I saw posters all over the country during the campaign that showed a group of ardent, young apprentices, and the caption on the posters was "Jobs for the boys."
We know some of the boys who got jobs as a result of our entry into the Common Market. There were not many of them. One or two of them are still Members of the House. The jobs that were referred to then were not those jobs.
The British people were told in 1975 that staying in would protect their jobs. What else were they told? They were told that we could get advantages from the Community market and the immediate effect on trade, industrial production, investment prospects and hence on jobs if we went out of the market would be disastrous.
The effect of staying in has been disastrous. I am not attributing all our ills to membership of the EEC, but a great proportion of them. That was what people were told about the EEC by its ardent advocates.
What were people told by the British Labour Government in 1975? Well, there is "The New Deal". There was, said the Government of the time to the British people:
"a threat to employment in Britain from the movement in the Common Market towards an Economic and Monetary Union."
We shall be debating that subject some time later in our proceedings. The "New Deal" said:
"This could have forced us to accept fixed exchange rates for the pound, restricting industrial growth and so putting jobs at risk. This threat has been removed."
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The Labour Government did not tell people that there were other, more real threats from remaining in the Common Market at that time; those threats have been borne out by the evidence that I have supplied to the Committee.
I turn now to the deficiencies of British industry. I am not just lambasting British industry here, because industries in other countries can also be inefficient. The trouble is that our industry happens to be much more inefficient than most of the others. I start by talking about management attitudes. These have been criticised even by the right hon. Member for Old Bexley and Sidcup (Mr. Heath). He talked about the need to change management attitudes. The right hon. Member for Old Bexley and Sidcup said, towards the end of his term of office as Prime Minister of this great country, that we have done everything that British industry has asked us to do, everything, yet we do not get the performance that we are entitled to expect. That was said soon after we had joined the Common Market.
I could regale the Committee for hours, although I promise not to do so, Sir Paull, with my experiences as a junior Minister for five years in a Labour Government and horror stories of British industry from around the world. If I was challenged to do so, I would be very happy to oblige. Some of the stories are very amusing, but I do not wish to detain the Committee with relatively minor matters that are incidental to my main theme.
There are many stories and I shall give one example although this is not just to show that one swallow is the harbinger of summer. The story shows a typical management attitude. A British firm received an inquiry from a buyer in Yugoslavia for a certain product. The management eventually two weeks later wrote back to the potential buyer in Yugoslavia saying that they made the thing he was after —it does not really matter what it was — but that in order to obtain it they would have to contact their agent in Brussels who had the mandate or licence to market the goods in western and central Europe.
Needless to say, the Yugoslavian buyer did not contact the agent in Brussels, because the day after he had sent his inquiry to firms in France and Germany they had sent sales representatives to his home town and factory in Yugoslavia, while the British were still sending letters and considering their attitude.
There is a horror story of Brutish business firms even in the 1970s answering trade inquiries from Latin America and sending the letters, would you believe it, by seamail not airmail. I could go on but I will not. There are plenty of similar stories.
The attitude of British management, which I blame not exclusively but largely for all this, was summarised by no friend of mine but a friend, I would think, of Tory Members. In the mid-1970s a bunch of capitalists, the German chamber of commerce in Britain, published a report. It was a nine-hour wonder, because it was so embarrassing that it was dropped by the press and the Government like a hot brick. The report said, in effect —do not forget that the German chamber of commerce is no friend of the Labour party or of British trade unions or necessarily Britain — that the basic trouble with British industry is that British management treats its workers like dirt. Those were the precise words. There was a feeble comment from the Confederation of British Industry and then the whole thing was dropped. One

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would not have been able to read any reference to it in the popular press and only on inside pages of the so-called serious newspapers.
There are many deficiencies in British industry, which I will not go into, connected with the class and education system in this country. Even if we complete this internal market, our trade and manufacturing performance will continue to deteriorate until we have swept aside the bulk of management in British industry at every level. It is either incompetent, or unable to take advantage of opportunities when they arise. I exempt from that management in our major multinational companies and in a few key industries.
Mr. Marlow: I wonder whether the hon. Gentleman thinks that it would help to improve the attitudes, activities, ambitions and effectiveness of that management if a Labour Government, of which he would like to become a member, were to impose upon it swingeing levels of penal private taxation.
Mr. Deakins: I fear that if I followed the hon. Gentleman in that remark, although I am happy to take issue with him, I would be straying outside the rules of order. I am sticking completely to the internal market.
Just in case right hon. and hon. Members think that I have it in for British industry, I have to say that industries in other countries are also inefficient. The trouble is that the are less inefficient than we are. I shall tell the Committee four horror stories about United States industry just to show that it is not only our own industry that suffers. I shall quote from a recent publication of the Hunger project:
"Some American firms that have ventured abroad have made costly blunders out of ignorance. 'The Chevrolet Nova—
a motor car—
"did not sell in Latin America. When spoken 'No va' means 'it doesn't go' in Spanish."
The Second Deputy Chairman: Order. I am finding it difficult to relate this to the subject of the amendments, which is the internal market.
Mr. Deakins: I shall certainly stop there. I was seeking to show that I was not being unfair in criticising just British industry for its performance and potential performance in the Common Market because some of the strictures I have made could equally apply to industries in other countries.
I turn to the impact of the internal market on this country as a whole not merely on our trade, investment or employment and so on. What will be the impact on our regional policy? That is a matter which concerns many people, not just Opposition Members but Tory Members. What will the completion of the internal market —freedom of capital movement—do to investment? Many of us live in the prosperous south-east, although parts of inner London are rather like an outpost of the north stuck down in the middle of the prosperous south. The north-south dividing line is the Bristol-Wash line which is becoming more and more like the Himalayan mountains. What will the completion of the internal market do to the north-side divide? Contact with industrialists has already convinced me— I did not need much convincing—that the combined effects of the development of a third London
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airport at Stansted, the completion of the M25 ring road and the prospect of the Channel tunnel will make the south-east of England even more of a magnet for British industry. The north-south divide will get worse, and our industrial decline will accelerate.
12 midnight
I turn, finally, to the impact—[HON MEMBERS: "Oh".] I am trying to truncate my remarks. If the Committee feels that I am being unfair, I shall quote from the report by the Select Committee of the House of Lords on Overseas Trade. The report, in its conclusions, analyses the reason why our manufacturing trade has been so bad, and why our industrial performance has been so poor. That is directly relevant to the issue of whether we should vote for a Bill which will speed up the creation of the complete internal market. House of Lords report No. 238, 1984–85 Session — it attracted some notoriety at the time —commented on the deficit and the balance of trade in manufactures. The report concluded that that was brought about by
"poor export performance"—
that is not surprising—
"and high import penetration".—
I should have thought that those were blinding statements of the obvious; however, it is nice to have it in writing—
"across a wide spectrum of manufacturing industry".
Paragraph .3, chapter 7, states:
"In the long term the Committee single out poor investment, poor cost competitiveness and 'cultural' factors as the principal determinants".
The Committee then considered remedies. I wonder whether the Government accept those remedies. I have not seen a reply by the Government in the House of Lords. Perhaps they have not bothered to reply. I do not know how they treat reports by Select Committees in the other place. They are pretty cavalier in their attitude towards reports by House of Commons Committees. When the Government reply, they tend to dismiss most of the recommendations. [Interruption.] I have been a member of Select Committees every year that I have been a Back Bencher. I have been on Select Committees for 11 years. With the exception of the Committee on which I currently serve, the Select Committee on Public Accounts, the performance of Governments—it may apply to Labour Governments; I do not make any party political point—in replying to Select Committee reports has been deplorable. A lot of hard work goes into their recommendations.
Mr. Leighton: I am certain that the Minister is immaculate in that respect, but perhaps her reputation is besmirched by some of her colleagues. Is my hon. Friend aware that, in respect of a Select Committee with which I am connected, a press conference was held to issue a report, and reporters went along to the conference with a press release in their pockets rubbishing the report? That happened before the report was even published.
Mr. Deakins: My hon. Friend has made his point. Had he sought to catch your eye, Sir Paul, he may have made the point in a slightly different way and brought it within the rules of order.
I should like to know from the Minister what the Government think about the recommendations of the House of Lords Select Committee. Paragraph .5 of that important report states:

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"The Committee believe that urgent action is required now to revive manufacturing and stimulate trade in manufactured goods because"—
we come to the crux of the Government's arguments for completion of the internal market—
"service industry cannot substitute for manufacturing because many services are dependent on manufacturing and only 20 per cent. of services are tradeable overseas".
How does the Minister like that? The report continues:
"there is no reason to expect any automatic resurgence of manufacturing and trade when the North Sea oil surplus declines because the decline in manufacturing and in the trade balance in manufactures was not the inevitable consequence of the advent of North Sea oil and because the effect of North Sea oil on the exchange rate movements is uncertain … new industries and new products usually grow out of long established activities and require a long time scale for development".
The target of 1992 should be a long enough time scale for anyone contemplating entering the vast new market which is dangled before us. The report continues:
"lost markets will be difficult to regain … lost manufacturing capacity will take a long time to restore".
What does the Minister have to say about those criticisms? The summary states:
"Unless the climate is changed"—
in the United Kingdom—
"so that steps can he taken to enlarge the manufacturing base, combat import penetration and stimulate the export of manufactured goods, as oil revenues diminish the country will experience adverse effects"
That is nothing to do with completion of the internal market. The Select Committee was not contemplating that prospect. The Minister will, of course, tell hon. Members that completion of the internal market will enable us to overcome all the deficiencies mentioned in the report. the Committee referred to
"a contraction of manufacturing to the point where the successful continuation of much of manufacturing activity is put at risk … an irreplaceable loss of GDP … an adverse balance of payments of such proportions that severely deflationary measures will be needed … lower tax revenue for public spending"
that is not directly relevant to this subject․
"higher unemployment, with little prospect of reducing it".
Is the Minister going to tell us that there is a big prospect of reducing unemployment if she is allowed to have her way and the internal market is allowed to be completed? Those are the criticisms of the House of Lords Select Committee in a widely trumpeted report.
I should like now to address my remarks through the Committee to the party which I have the honour to represent. If the Bill is passed and the internal market completed, it will be difficult, if not impossible, to achieve a number of the remedies which the Labour party has for the deficiencies in British manufacturing, trade and investment. Recently, my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said that the internal market depends on the complete liberalisation of capital movements. He said that we wish to ensure that capital is brought back into Britain from the rest of the Community and from the outside world. To be directly relevant, I shall concentrate on capital from the rest of the Community. How will it be possible to bring back capital from the rest of the Community when, under new article 70(I), capital is being completely liberalised? In the report last year by the Presidency of the Commission to the European Assembly, the President said:
"The following fields and measures were considered to be of high priority".
One measure was
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"liberalisation of capital movements."
What does the Common Market have in store for us? On 23 May 1986, an article in the Financial Times referred to the President of the Commission unveiling a
"scheme to lift all EEC capital movement controls".
How will my party react to that? Once we are in the complete internal market, how will we cope with our plans for capital movements? There are Commission communications to the Council about liberalisation not merely of taxation but of capital movements. We were told that the process would be speeded up. I shall not weary the Committee by reading out the Agence Europe report. Had I time, I should have done so for the Committee's benefit, so that hon. Members could hear from the horse's mouth what is in prospect for this country.
I shall address my points to the Committee, but they are specifically directed at my right hon. Friends on the Labour Front Bench, who are in charge of these matters, rather than those of my colleagues who are sitting in the Chamber. The Labour party says, and will be saying to the British people, at the next election the following things. It says that it will curb imports, but curbing imports from the rest of the EEC is impossible by virtue of articles 12, 30, 101 and 102 of the treaty of Rome. It says that it will encourage British industry through the selective use of public purchasing. Selective use of public purchasing is not merely forbidden by a number of articles in the present treaty of Rome but will be made impossible by the completion of the internal market. That must give the Government some cause for concern. I am not sure what their view is. All public purchasing will have to be put out to competitive tender among all the firms in the EEC. There cannot be any behind-the-stage deals, tenders just to one's friends or contracts For British firms. It must all come out in the open. That is the type of competition which some right hon. and hon. Members may welcome. Good luck to them; that is their philosophy. I shall not argue the point with them now. I am merely pointing out the policies of the next Labour Government. We shall certainly have such a Government after the next general election—[HON. MEMBERS: Rubbish."] I hope that we shall. I do not want to provoke hon. Members. That Government will not be able to do some of the things that we want to do. The selective use of public purchasing is outlawed by several articles of the treaty of Rome and would be made impossible by the completion of the internal market by 1992.
The Labour party will insist that multinational companies source more of their United Kingdom markets from British production. Even the Government have tried to do that in talks with Vauxhall, General Motors and other multinationals in the motor car industry. But that is illegal under articles 7, 30, 92, 101 and 102 of the treaty of Rome, as well as being completely incompatible with the concept of a free internal market by 1992, which the Minister will be recommending to the Committee—I do not know on what grounds— when she replies to the debate.
The Labour party says that it will promote innovation through a flexible package of loans and equity assistance, but that is not permitted by several articles of the treaty of Rome and would not be permitted by the completion of the internal market in 1992. What will we do then? The Labour party says that it will provide sustained financial support to industry through a national investment bank.

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That is a good idea, but it will be impossible under similar articles of the treaty of Rome and once the internal market is completed by 1992.
The Labour party will extend public enterprise through agreements with key firms. All these are good ideas and I support them wholeheartedly. Indeed, during the next general election, I shall be putting them to the British people on the doorsteps of my constituency and elsewhere. But although we tell the British people that we wish to do those things, we shall be prevented from doing them by the rules and regulations of the Common Market and by the completion of the internal market by 1992. The making of agreements with key firms is already illegal under some articles of the treaty of Rome.
The Labour party says that it will negotiate on investment with firms in key sectors, but that is illegal under articles of the treaty of Rome and will be impossible when the internal market is completed. The party says that it will ask institutions to invest more of their funds in Britain, but, as I said earlier in relation to capital movements, that will be impossible. We shall be saying all those things to the British people between now and the next general election.
The Labour party will have a tough policy on takeovers and mergers. I wholeheartedly support that, but how does it square with article 85 of the treaty of Rome and what is in store for us after the completion of the internal market by 1992? Unless we change our relationship with the Common Market and unless we defeat this attempt to complete the internal market by 1992, it will be extremely difficult — I put it no higher than that — for a Labour Government to carry out the guts of their economic, industrial and financial policies.
Mr. Marlow: The hon. Gentleman could go a little further. He has set out what the industrial policies of the Labour party will be. Could he say what the policies of the Labour party will be towards the Common Market?
Mr. Deakins: That would take me outside the scope of the debate, so I shall not be tempted. I have put before the Committee matters which are on the public record. They are part of the Labour party's jobs and industry campaign on television and in leaflets, so I am not giving away any secrets. I would not do that to the party. We are publicising all those matters.
My question to the Labour party is, will we be able to do those excellent things if Britain is still in the Common Market by the time we get a Labour Government and if the internal market is on the way to being completed? That is my major reason for opposing the completion of the internal market. Nothing in our trade, industrial or manufacturing performance will alter during the next seven or eight years. Some Conservative Members agree with much of what I have said about the performance of British manufacturing industry. I wonder where the Minister will find hope and on what premise she will base her argument in reply to the debate, which will be that the completion of the internal market will be good for British industry, manufacturing, services, trade and the British people. The evidence that I have put before the Committee shows that it will not be. However, I am prepared to be shot down by statistics from the Minister. I look forward with great interest to her reply.
Mr. Tim Sainsbury (Lords Commissioner to the Treasury): I beg to move, That the Chairman do report Progress and ask leave to sit again.
Mr. Marlow: Can the motion be debated?
Question put and agreed to.
Committee report Progress; to sit again this day.

BUSINESS OF THE HOUSE

  ADJOURNMENT
  Resolved,
  That this House do now adjourn.—[Mr. Sainsbury.]
  Adjourned accordingly at sixteen minutes past Twelve o'clock.

EMPLOYMENT
  Labour Statistics
  Labour Statistics
  Closures and Redundancies (North-West)
  Closures and Redundancies (North-West)
  Building Workers
  Building Workers
  Redundancies
  Redundancies
  Experience of Unemployment
  Experience of Unemployment
EDUCATION AND SCIENCE
  Expenditure
  Expenditure
  Conductive Education
  Conductive Education
  Sex Education
  Sex Education
  Bogus Universities
  Bogus Universities
  Local Authority Expenditure
  Local Authority Expenditure
  Grammar Schools
  Grammar Schools
  O and A-level Results
  O and A-level Results
  GCSE
  GCSE
  Schools (Security)
  Schools (Security)
TRADE AND INDUSTRY
  EC (Internal Market)
  EC (Internal Market)
  EC (Research Council)
  EC (Research Council)
  Steel Workers (Schemes)
  Steel Workers (Schemes)
FOREIGN AND COMMONWEALTH AFFAIRS
  South Africa
  South Africa
  Council of Ministers
  Council of Ministers
  Single European Act
  Single European Act
WALES
  Appointments
  Appointments
  NHS (Treatment Costs)
  NHS (Treatment Costs)
  Arts
  Arts
  Council House Sales
  Council House Sales
  Beaches
  Beaches
  Rate Support Grant
  Rate Support Grant
  Refuse Disposal
  Refuse Disposal
  Housing Subsidy
  Housing Subsidy
  Housing Revenue
  Housing Revenue
  Housing Costs
  Housing Costs
  Council Rents
  Council Rents
  Radiation
  Radiation
  Fat Lambs
  Fat Lambs
  Mental Handicap
  Mental Handicap
  Local Enterprise Agencies
  Local Enterprise Agencies
TRANSPORT
  British Rail
  British Rail
  Badgers (Railway Deaths)
  Badgers (Railway Deaths)
PRIME MINISTER
  Westlands plc
  Westlands plc
  Bristol
  Bristol
  Baginton
  Baginton
  EC (Agricultural Expenditure)
  EC (Agricultural Expenditure)
  Scunthorpe
  Scunthorpe
  Fish Products (Import Ban)
  Fish Products (Import Ban)
  NHS and NCB
  NHS and NCB
  Housing Benefit and Mortgage Interest Relief
  Housing Benefit and Mortgage Interest Relief
  Engagements
  Engagements
  South Africa
  South Africa
ATTORNEY-GENERAL
  PCW Syndicate and Alexander Howden
  PCW Syndicate and Alexander Howden
  Crown Courts (Welsh Language)
  Crown Courts (Welsh Language)
  Mr. John Stalker
  Mr. John Stalker
NORTHERN IRELAND
  Grammar Schools
  Grammar Schools
  Technology Board
  Technology Board
  Fat Lambs
  Fat Lambs
  Radiation (Monitoring)
  Radiation (Monitoring)
ENERGY
  Coal Industry
  Coal Industry
  Saudi Arabia (Oil)
  Saudi Arabia (Oil)
  Thermal Energy
  Thermal Energy
  Plutonium
  Plutonium
  CEGB (Net Capability)
  CEGB (Net Capability)
  Nuclear Power
  Nuclear Power
  Conservation
  Conservation
HOME DEPARTMENT
  Bail Act 1976
  Bail Act 1976
  Metropolitan Police
  Metropolitan Police
  Birmingham Pub Bombings
  Birmingham Pub Bombings
  Prison Population
  Prison Population
  Radiation
  Radiation
  Civil Defence
  Civil Defence
  Police Duties
  Police Duties
  Immigration
  Immigration
  Magistrates Court, Basildon
  Magistrates Court, Basildon
  Naturalisation
  Naturalisation
  Burglaries
  Burglaries
  Crime Statistics
  Crime Statistics
  Crime Prevention
  Crime Prevention
  Concessionery Televison Licenses
  Concessionery Televison Licenses
  Racially Motivated Incidents
  Racially Motivated Incidents
  Stop and Search (Crime Pevention)
  Stop and Search (Crime Pevention)
  Dr. Frank Skuse
  Dr. Frank Skuse
  Heroin Addiction
  Heroin Addiction
  Police Committees
  Police Committees
  Personal Information (Police Records)
  Personal Information (Police Records)
  Drug Misuse and Abuse
  Drug Misuse and Abuse
  Homicide
  Homicide
  Overseas Visitors
  Overseas Visitors
  Obscene Publications Act 1959
  Obscene Publications Act 1959
  Community Radio
  Community Radio
  Young Offenders (Weapons)
  Young Offenders (Weapons)
  Sentencing Policy
  Sentencing Policy
  Firemen
  Firemen
  Identity Cards
  Identity Cards
  Police Manpower
  Police Manpower
  EC Broadcasting Directive
  EC Broadcasting Directive
  Broadcasting (Peacock Report)
  Broadcasting (Peacock Report)
  Griess Test
  Griess Test
  Women and Children (Crime Victims)
  Women and Children (Crime Victims)
  Prison Kitchens
  Prison Kitchens
  Trespass
  Trespass
  Sussex Police
  Sussex Police
  Terrorism
  Terrorism
  Holloway Prison
  Holloway Prison
  Babies Born in Custody
  Babies Born in Custody
  Nicholas Webb
  Nicholas Webb
  Crack
  Crack
  Community Service
  Community Service
  Convictions (Police Disclosure)
  Convictions (Police Disclosure)
  Drug Trafficking Offences Bill
  Drug Trafficking Offences Bill
  Sexual Assaults
  Sexual Assaults
  Data Protection Act
  Data Protection Act
  Radioactive Fallout
  Radioactive Fallout
  Industrial Disputes (Police Horses)
  Industrial Disputes (Police Horses)
  Mr. John Stalker
  Mr. John Stalker
  Public Order
  Public Order
  Sports Grounds (Safety)
  Sports Grounds (Safety)
  Laura Evans (Member's Correspondence)
  Laura Evans (Member's Correspondence)
  Prisoners (Recall)
  Prisoners (Recall)
  Drug Offences
  Drug Offences
SOCIAL SERVICES
  Exceptional Hardship Exemption
  Exceptional Hardship Exemption
  Mentally Ill People
  Mentally Ill People
  Mortgage Interest
  Mortgage Interest
  Housing Benefit
  Housing Benefit
  Aspirin (Children)
  Aspirin (Children)
  Birth Registration (Welsh Language)
  Birth Registration (Welsh Language)
  Single Payments
  Single Payments
  Local Offices (Staffing)
  Local Offices (Staffing)
  Salford Health Authority (Funds)
  Salford Health Authority (Funds)
  Hospitals (Infections)
  Hospitals (Infections)
  NHS (Private Contractors)
  NHS (Private Contractors)
  Hospital Beds
  Hospital Beds
  NHS (General Managers)
  NHS (General Managers)
  Mobility Allowance
  Mobility Allowance
  Social Workers (Attacks)
  Social Workers (Attacks)
ENVIRONMENT
  Homelessness
  Homelessness
  Urban Programme
  Urban Programme
  Wildlife and Countryside Act 1981 (Compensation Payments)
  Wildlife and Countryside Act 1981 (Compensation Payments)
  Enforcement Orders
  Enforcement Orders
  County Hall, South Bank
  County Hall, South Bank
  GLC (Mortgages)
  GLC (Mortgages)
  Commission for the New Towns
  Commission for the New Towns
  Southampton Structure Plan
  Southampton Structure Plan
  Croxteth Hall and Country Park
  Croxteth Hall and Country Park
  Beaches
  Beaches
  Radiation
  Radiation
  Queen Elizabeth II Conference Centre
  Queen Elizabeth II Conference Centre
AGRICULTURE, FISHERIES AND FOOD
  Radioactivity
  Radioactivity
  Sheepmeat (Caesium Levels)
  Sheepmeat (Caesium Levels)
  Lambs
  Lambs
  Plastic Waste
  Plastic Waste
  River Esk
  River Esk
  EC Council
  EC Council
SCOTLAND
  Leukaemia (Hunterston)
  Leukaemia (Hunterston)
  Electricity Costs (Nuclear Generation)
  Electricity Costs (Nuclear Generation)
  Housing Development (Rural Villages)
  Housing Development (Rural Villages)
  Geriatric Patients
  Geriatric Patients
  Elderly Persons
  Elderly Persons
  Young Offenders (Glenochil)
  Young Offenders (Glenochil)
  Radiation
  Radiation
  Fat Lambs
  Fat Lambs
  Chapelcross Nuclear Power Station
  Chapelcross Nuclear Power Station
  Housing
  Housing
  Nature Conservation Afforestation (Report)
  Nature Conservation Afforestation (Report)
  School Meals
  School Meals
  Scottish Development Agency
  Scottish Development Agency
NATIONAL FINANCE
  EC (Expenditure)
  EC (Expenditure)
  Customs and Excise
  Customs and Excise
  Asset Sales (Revenue Loss)
  Asset Sales (Revenue Loss)
  Tax Evasion
  Tax Evasion
  Income Tax Fraud
  Income Tax Fraud
DEFENCE
  Fylingdales
  Fylingdales
  RAF (Equipment)
  RAF (Equipment)
  Lightning Fighter Aircraft
  Lightning Fighter Aircraft
  Equipment Budget
  Equipment Budget
  Tigerfish HWT Torpedo
  Tigerfish HWT Torpedo
  Communication Systems
  Communication Systems
  HMS Opossum
  HMS Opossum
  Contracts (Tendering)
  Contracts (Tendering)
  Royal Wedding
  Royal Wedding
  Armed Forces (Equipment)
  Armed Forces (Equipment)

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Saint Albans): The LORD CHANCELLOR on the Woolsack.
Lord Saint Oswald—Sat first in Parliament after the death of his brother.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, before the commencement of business, I take the opportunity to inform the House that I have accepted an invitation from the Prime Minister to attend a lunch in honour of the President of the Federal Republic of West Germany on 2nd July. Accordingly, I trust that the House will agree to grant me leave of absence for Wednesday, 2nd July 1986.

European Air Fares
Baroness Burton of Coventry: 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 decisions were reached, or recommendations made, at the meeting of the Council of Transport Ministers held on 18th/19th June in view of the decision by the European Court of Justice that government control of air fares within the EC was illegal.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, civil aviation was not discussed at the last council meeting, which was adjourned. However, a further meeting of transport Ministers has been scheduled for next Monday. We shall press for progress on aviation issues then.
Baroness Burton of Coventry: My Lords, the Minister has given me the information I intended giving him. Does he realise that this saga really reflects nothing but failure upon failure and that we never get anywhere at all? Am I correct in assuming that he has just told the House that at that last important meeting which was deferred until 18th and 19th June the Council of Transport Ministers did not even discuss the liberalisation of transport within the Community? Is he further aware that the European commissioner responsible for transport declared that the decision to abandon the meeting without discussing air fares was deeply regrettable? What do the Government now propose to do?
The Earl of Caithness: My Lords, I can confirm that aviation was not discussed at the last council meeting. I read the same article that the noble Baroness has quoted about the comments of the commissioner responsible. The Commission has tabled a paper
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which will be discussed on 30th June and we shall be taking over the presidency on 1st July. We shall be pressing very hard on this matter of aviation and upon other matters of transport.
Baroness Burton of Coventry: My Lords, I do not have much faith in papers being tabled. We do not get anywhere, whatever is tabled. Does the Minister recall that on 5th June we were told in this House that the Commission said that unless there was satisfactory progress in the council by June it would itself take steps to apply the competition rules of the treaty? What will happen? Is the Commission really going to take action or will there be no discussion again?
The Earl of Caithness: My Lords, indeed the Commission can take action under Article 89 of the Treaty of Rome. Alas, as there was no discussion at the last council meeting there seemed to be little point in the Commission taking action straight away until the discussion on 30th June. Thereafter it will be up to the Commission to decide what action to take, but I understand that it will want to take action immediately if no progress is made.
Lord Boyd-Carpenter: My Lords, now that the European Court has actually come out with a sensible decision, would it not be a good idea to encourage it in that by acting promptly on it?
The Earl of Caithness: My Lords, that is exactly what we in the Government are trying to do and what the Commission is trying to do. I am grateful to my noble friend for that question.
Baroness Burton of Coventry: My Lords, as Monday 30th June is the last day of the Dutch presidency of the EC and as we ourselves assume the presidency on 1 st July, can we take it that there will be no further excuses for immediate action?
The Earl of Caithness: My Lords, I think we have made enormous progress on aviation liberalisation, and we shall continue to press with all the forces at our command to take it a stage further.

Anti-Heroin Campaign: Evaluation
3.5 p.m.
Lord Rodney: 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 evaluation has been made of the impact that their anti-heroin advertising campaign has had on teenagers' attitudes to drugs.
Baroness Hooper: My Lords, the anti-heroin campaign is being independently evaluated by two companies, one using a quantitative survey of 700 young people and the other interviewing small groups in depth. The evaluation has indicated that the campaign has increased young people's resistance to heroin.
Lord Rodney: My Lords, I thank my noble friend for that Answer. Do the Government agree that the solution is ultimately to eliminate the demand for drugs? Will Her Majesty's Government be continuing with the advertising campaign to ensure that these encouraging results continue?
Baroness Hooper: Yes, my Lords. The campaign is continuing on the basis that over the two-year period that it has been in existence the evaluation provides clear evidence that the percentage of young people who said that they would reject an offer of heroin increased from 83 per cent. to 94 per cent. during the first year of the campaign. There is also an increased awareness of the consequences of heroin misuse. Therefore, the campaign will certainly continue.
Baroness Seear: My Lords, how does the noble Baroness reconcile what she has just told us with a greatly increased anxiety about drugs and a greatly increased anxiety in the prison service about the number of people passing through the courts on drug offences?
Baroness Hooper: My Lords, the campaign is, after all, designed to prevent the need for services, including the rehabilitation services, and to avoid the prison consequences of drugs. As I have said, the campaign is only in the first two years of its existence, and the results so far have proved beneficial. But that does not mean to say that the Government will stop there. Other means are being used to help fight the campaign against drugs.
Lord Avebury: My Lords, should not the attack on drugs be twofold, both from the demand end, with the use of a campaign such as the one that is the subject of this question, but equally on the cultivation, manufacture and supply of the drugs, to prevent them from coming into this country in the first place? Do the Government not agree that if as much money had been spent at the other end, in eradicating the crops and in preventing them from being turned into consumable drugs, as has been spent in prevention in the western world, then we should have dried up the supply a long time ago?
Baroness Hooper: My Lords, the Government are well aware of this aspect of the problem. They have taken steps, and are continuing to do so, to prevent the source of the drugs from continuing to increase.
Lord Winstanley: My Lords, the noble Baroness stated that the purpose of this advertising campaign was not to persuade heroin addicts to cease using heroin but to dissuade young people from experimenting with heroin, thus avoiding the risk of becoming addicted. Will the noble Baroness agree that it would be difficult at this early stage to evaluate the effectiveness of the campaign from that point of view? Does she also agree that a campaign of a very different kind using resources of a different kind will be required to deal with people who are already addicted?
Baroness Hooper: My Lords, to answer the noble Lord's first question, yes, the reason for this campaign
414
was that heroin misuse had escalated rapidly and we wanted to influence young people's attitudes against it.
Lord Molloy: My Lords, does the noble Baroness agree that what is required is a more massive determination among all the great powers to eradicate this appalling curse? Could not our Government, soon to be in the chair of the EC, make this eradication a substantial item for international action?
Baroness Hooper: My Lords, I think that goes slightly beyond the bounds of the original Question. Nevertheless, the Government are using every means at their disposal to pursue the campaign both nationally and internationally.

Acid Rain: Research
3.10 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what research is being undertaken to combat the problem of acid rain in order to enable the United Kingdom to make more use of the substantial coal reserves without damaging the environment.
Lord Skelmersdale: My Lords, my right honourable friend the Secretary of State for the Environment oversees a substantial programme of research aimed at establishing the causes, effects and possible cures for acid deposition. The Natural Environment Research Council and the Meteorological Office also carry out research into these aspects of the problem.
Research and development work on improved combustion technologies which reduce emissions is being undertaken by the Central Electricity Generating Board and British Coal. In particular, they are working on the evaluation of flue gas desulphurisation processes; on coal cleaning technologies; and on the development of the pressur-ised fluidised bed combustion process, the slagging gasifier process and the use of low nitrogen oxides burners.
Lord Molloy: My Lords, may I say that that is indeed an encouraging reply? Would the noble Lord not agree that there also seems to be room for a great deal of interplay and co-operation? Would he not further agree that since the Chernobyl disaster there are very luminous question marks about nuclear energy, and that if we could conquer acid rain, that would mean that Britain would have a massive accumulation of reserve power that would be very worthwhile developing?
Lord Skelmersdale: My Lords, if I caught the order of the noble Lord's supplementary questions correctly, my answers are yes, yes, no, yes. Perhaps I should explain the "no", which was on the future of nuclear power in this country. I would agree that it is something that we have to be continually vigilant about, but it should be put in its perspective. From 1970 up to March 1985 there have been 746 deaths

415
associated with the coal-mining industry and only 10 in the civil nuclear industry, none of which related to radiological hazards.
The Earl of Halsbury: My Lords, would the noble Lord agree that in so far as these matters are coming under examination in depth by environmental scientists, their conclusions will not be rendered more valid by bringing them under political pressure to produce the answer of yesterday?
Lord Skelmersdale: My Lords, I am grateful to the noble Earl for that supplementary question. I, too, heard the answer of my noble friend Lord Brabazon yesterday. I must say that some of the questioning in these matters is, in my view, a little premature.
Lord Northfield: My Lords, the Central Electricity Generating Board's complaint on this matter has been that the costs of protecting the environment have proved too high for the electricity producing industry. Has that problem been overcome? Is the Central Electricity Generating Board now more willing to install the sort of suppressors and so on which will prevent the sulphureous emissions?
Lord Skelmersdale: My Lords, although the CEGB is continuing research into flue gas desulphurisation, its current estimate is that retro fitting would cost some £1·6 billion and add approximately 8 per cent. to 10 per cent. to the cost of electricity. This is why its major effort in research is in new burning technologies, to which I referred in my original Answer.
Lord Avebury: My Lords, have the Government evaluated the work of US scientists who concluded that if we continue to burn fossil fuels at the present rate, there will be permanent and irreversible changes in the world climate which will result in the raising of ocean levels by several metres? What would be the effect of this on a country like the United Kingdom with a large coastline?
Lord Skelmersdale: My Lords, the sea level is something that goes up and down through natural causes, irrespective of the greenhouse effect to which the noble Lord refers. Of course, we take very seriously any research paper on this subject which emanates from any part of the world.
Lord Parry: My Lords, would it not, in fact, alter the balance between "wet" and "dry" in the Government?
Lord Skelmersdale: My Lords, the Government consist of people, not of land.
Lord Stoddart of Swindon: My Lords, will the noble Lord the Minister say, in relation to the number of deaths from nuclear power and those from coal mining, whether those figures include deaths through uranium mining? Secondly, following the reply he gave, may I ask him to confirm that there is absolutely no reason why in future coal-fired power stations should not be built, because if desulphurisation plant is included, they will not be a danger to the environ-ment through acid rain?
Lord Skelmersdale: My Lords, no. The regrettable deaths to which I referred in answer to the supplementary question of the noble Lord, Lord Molloy, did not include uranium mining, as uranium is not mined in this country. I was talking about deaths in this country and I was making what I believe is a valid comparison so far as coal-fired stations are concerned, I have no reason to believe that they are not an option for the future.
Baroness Nicol: My Lords, did I understand the Minister to say that there was collaboration on the question of acid rain? Does he mean collaboration with other European countries; and can he tell us to what extent this collaboration has taken place?
Lord Skelmersdale: My Lords, in my previous answers I was referring particularly to collaboration between the various organisations in this country. But so far as other European governments are concerned, the United Kingdom plays a full part in research being carried out under the auspices of the UN/ECE convention on long-range transboundary air pollution through the European monitoring evaluation programme, which includes monitoring emissions and deposition and work on effects.
Other research is also being carried out within the European Community. For example, we are participating in an exercise on the early diagnosis of forest decline with reference to atmospheric pollutants with scientists from the Netherlands and the Federal Republic of Germany. We have also written to the governments of several European countries proposing bilateral arrangements for the regular exchange of information on the content of our respective air pollution research programmes. The CEGB and British Coal are also funding a £5 million research programme with the Royal Society and the Swedish and Norwegian Academies of Science on surface waters acidification programmes.
Viscount Hanworth: My Lords, I came in a little late on this Question. May I ask the noble Lord, if it has not already been asked, whether he appreciates that the emissions from knocks, in other words, from cars, are as important in acid rain as the sulphur?
Lord Skelmersdale: My Lords, with respect, I think that that is wide of the Question on the Order Paper.
Lord Taylor of Gryfe: My Lords, in addition to the environmental bodies which have been consulted in this matter, can the Minister tell me what are the findings of the research department of the Forestry Commission on the effect of acid rain on the forests of this country and of Scandinavia as a result of emissions from power stations?
Lord Skelmersdale: My Lords, as I understand it, somewhat indefinite; but, if I may, I shall take the opportunity to write to the noble Lord.
Lord Ezra: My Lords, in the impressive list of research that the noble Lord indicated as being done in this matter, he mentioned pressurised fluidised bed combustion. Would he not agree that this is one of the

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most promising ways of dealing with this problem and that it has been in hand for a number of years? Will he indicate when we can come to the commercial application of this process?
Lord Skelmersdale: Yes, my Lords; I would certainly agree with the noble Lord, Lord Ezra, that this looks by far the most promising avenue at the moment. But of course it is still at the experimental stage. Development of a commercial-scale plant could be some 10 to 15 years off, depending on the progress with research.
Lord Molloy: My Lords, would the noble Lord agree that this discussion has been very useful and that most people would applaud what this House has done this afternoon? Therefore, could he not perhaps have discussions with his noble friend the Leader of the House as to whether one day we might have a fuller debate on this vital subject?

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Wages Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Horticultural Development Council Order, the Report stage of the Protection of Children (Tobacco) Bill and the Third Reading of the Surrogacy Arrangements (Amendment) Bill will be taken.

Commonwealth Development Corporation Bill [H.L.]
3.19 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, I beg to move that the Commons amendment be now considered.
Moved, That the Commons amendment be now considered.— (Baroness Young.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Reference is to Bill 64 as first printed for the Commons]
Clause 1, page 2, line 18, after "may,", insert "after consultation with the Corporation and".
Baroness Young: My Lords, I beg to move that this House do agree with the Commons in their amendment.
During the progress of this Bill through both Houses there was considerable debate about the desirability of providing the Secretary of State with the power to provide the Commonwealth Development Corporation with grants as well as loans. It was stated on behalf of the Government that such a power would be used by the Secretary of State only after full consultation with the corporation. An amendment was moved in another place proposing that the need to consult in this way should be made a statutory requirement. That amendment was acceptable to the Government without qualification, and I commend it to your Lordships. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Baroness Young.)
Lord Oram: My Lords, we on this side can readily support the noble Baroness in this amendment. 1 looked at the report of the short debate in another place, and I noticed that the honourable Member who moved this amendment claimed nothing more for it than that it would have a humble and limited effect. I think that is very true. It is in fact a useful addition to the Bill. As the Minister explained, there is a close working relationship between the ODA and the CDC, and it is clear that if the Minister was wanting to make a grant to the CDC he would in any case have consultations with that body. There is certainly no objection to making it a statutory requirement that he should have such consultation, and therefore I support the noble Baroness.
Lord Walston: My Lords, as somebody who queried the wisdom of the original powers which were in the Bill, may I say that I, too, am extremely pleased that this amendment was made in another place. 1 think it improves the Bill—a Bill which is in any case useful in its own right.
On Question, Motion agreed to.
Privilege amendment agreed to.

Family Law Bill [H.L.]
3.22 p.m.
Report received.
Clause 64 [Family proceedings rules]:
The Lord Chancellor The Lord Chancellor moved Amendments Nos. 1 to 3:
Page 38, line 26, at end insert ("which relate to the costs of proceedings").
Page 38, line 31, leave out ("so far as relating to the costs of proceedings,").
Page 38, line 35, leave out from beginning to end of line 36 and insert ("Notwithstanding anything in the Legal Aid Act 1974. the power conferred by subsection (1)(b) above").
The noble and learned Lord said: My Lords, these amendments, which I am advised it will be proper for me to move en bloc and which I shall therefore so move unless there is an objection, are the product of further consideration of Clause 64. I may say that I have had the assistance of views expressed by the Law Society.
The first two amendments restrict Clause 64(1)(a) so that the proposed power of the Matrimonial Causes Rule Committee to amend and repeal primary legislation will apply only to costs matters. As I said in Committee, I have seen this particular phrase in a great deal of primary legislation affecting subordinate legislation in my time; but I am advised that for this particular Bill and this particular clause I only need it for costs, and if it goes by with a little goodwill so much the better, it is cheap at the price. May I add that the third amendment ensures that the Matrimonial Causes Rule Committee will be able to make rules prescribing rates for legally aided work, notwithstand-ing the provisions of the 1974Act. I had no doubt and still have no doubt myself, on this question, but the

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society raised some concern based on counsel's opinion that there was a question about vires here, and Parliamentary Counsel has made this further refinement in order to put the matter beyond doubt.
I should explain that I have no intention whatever of bringing forward rules which introduce the same arrangements for private work. As I have explained previously, these new powers will ensure that such a distinction can be drawn. I beg to move that these three amendments be agreed to en bloc.
Lord Mishcon: My Lords, on the last occasion, at the Committee stage, it was rather jovially suggested that I, who had to be out of the country at the time on professional business, had deliberately arranged it so in order that I might avoid the wrath of the noble and learned Lord the Lord Chancellor, which was very vocally expressed, at certain suggestions that were made by the Law Society.
I would never have tried to avoid the noble and learned Lord's wrath because I know well—it is a matter of history—that one of his many engaging attributes which have been practised in the legal profession and in Parliament in a distinguished way over many years is that whenever the noble and learned Lord feels that he has merely an arguable case the voice is raised, the fist beats down upon an innocent table and superlatives are interspersed with superb rhetoric. I know, too, that the Bishops' Benches have sometimes suffered the harangues of the noble and learned Lord—all given and taken in good part—and I believe that they are comforted by the biblical recollection that when the Almighty wished to persuade Elijah into rational behaviour, His voice was not in the tempest. His voice was not in the fire, it was a still, small voice.
The noble and learned Lord has been very gracious today in the way in which he has introduced these amendments. My recollection of the words that were used when the Law Society, through the very eloquent mouth of my noble and learned friend Lord Elwyn-Jones, expressed certain views about Clause 64(1) of this Bill is that the noble and learned Lord ranged, in describing various arguments of the Law Society, between "absolute nonsense" and "arrant nonsense". I forget which of those adjectives was applied to the way in which the Law Society drew attention to the wording of Clause 64(1), which gave to the rule-making authority in family proceedings the right to amend or repeal any statutory provision relating to the practice and procedure of the Supreme Court or county courts so far as may be necessary in consequence of provisions made by the rules.
The anxiety was expressed that although this followed precedent the Family Division and family proceedings were of a very specific nature and, unlike other civil proceedings, there are matters which can be drawn within the ambit of practice and procedure which vitally affect the rights of parties. One example that can be given is that under the provision as it stood in the Bill it would indeed have been open to the rules committee to have decided, for example, to dispense with the requirement of the judge's certificate that arrangements in regard to children are in order before any court grants a decree absolute.
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Therefore, on reflection, the noble and learned Lord has graciously, by implication, withdrawn the descrip-tions of "arrant nonsense" and "absolute nonsense", and has decided most graciously, as I say, now to propose these amendments which follow the line of argument of the Law Society. He has also been good enough to pay tribute to them. My Lords, I am more than content.
Lord Meston: My Lords, so far as I am concerned, the noble and learned Lord has certainly bought good-will with these amendments. We are grateful for the amendments, which remove any doubt as to the extent of the powers given under Clause 64(1). At the Committee stage the noble and learned Lord vigorously removed most of the misgivings and many of the misapprehensions about Clause 64(2), and we were also grateful for that. Nevertheless, misgivings will perhaps remain, at least until we in fact see the rules under Clause 64(2) in operation. But it would not be right to debate the matter further, and it would certainly not be right to delay the passage of this otherwise very useful Bill.
Lord Elwyn-Jones: My Lords, may I also be permitted to congratulate the noble and learned Lord and thank him for his conversion on the road to the Woolsack, by acknowledging in this amendment at least some of the veracity of what was said at an earlier stage, which he so eloquently dismissed as arrant nonsense?
The Lord Chancellor: My Lords, I am indeed flattered to be compared to Elijah. I seem to think that the noble Lord, Lord Mishcon, was aiming even higher when he compared his own voice to a still, small voice. I would not aim so high myself. I am completely unconverted, but I thought I would bow for peace and quiet.
On Question amendments agreed to.

Insolvency Bill [H.L.]
3.30 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now resolve itself into Committee (on re-commitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on re-commitment).—(The Lord Chancellor.)
On Question Motion agreed to.
House in Committee (on re-commitment) accordingly.
[The LORD ABERDARE in the Chair.]
Clauses 1 to 82 agreed to.
Clause 83 [Companies registered under Companies Act, Part XXII, Chapter II]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 1:
Page 52, line 25, leave out ("the Companies") and insert ("this").
The noble and learned Lord said: I should like, if I may, to take Amendments Nos. 1, 2 and 3 together. I

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am afraid that my quick-change act might lead some people to say plus ca change, plus c'est la meme chose. May I, before I address myself to these three amendments with the leave of the Committee, take the opportunity to say a word of tribute to my noble and learned friend Lord Brightman? Some noble Lords will know that this piece of consolidation will be his last as chairman of the Joint Committee, and I am sure that all sides of this Committee would wish to join me in thanking him for his valuable work in leading this most useful of the House's bodies.
Turning to the amendments, Nos. 1 and 3 are identical and relate to provisions concerning deceased, bankrupt, or insolvent contributories. The provisions referred to are those contained in Clauses 81 and 82 of this Bill and are not, as the Bill presently states, provisions of the Companies Acts. Amendment No. 2 between them, removes a superfluous definite article. I beg to move.
Lord Elwyn-Jones: May I intervene merely to join in the congratulations and gratitude to the noble and learned Lord, Lord Brightman, for the great work he has done, along with his colleagues, on this heart-breaking and difficult work of consolidation, particu-larly on this Bill!
Lord Lloyd of Kilgerran: May I intervene and declare an interest in that I am a member of the Select Committee dealing with these consolidation matters? I should like to join the noble and learned Lord, Lord Elwyn-Jones, in praise for the work of the noble and learned Lord, Lord Brightman, and also for the work of the principal witnesses. The principal witnesses did an extremely fine job in relation to this Bill.
On Question, amendment agreed to.
Clause 83, as amended, agreed to.
Clauses 84 to 137 agreed to.
Clause 138 [Appointment of liquidator in Scotland]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 2:
Page 77, line 10, leave out ("the").
On Question, amendment agreed to.
Clause 138, as amended, agreed to.
Clauses 139 to 225 agreed to.
Clause 226 [Contributories in winding up of unregistered company]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 3:
Page 124, line 42, leave out ("the Companies") and insert ("this").
On Question, amendment agreed to.
Clause 226, as amended, agreed to.
Remaining clauses agreed to.
In the Schedules:
Schedules 1 to 5 agreed to.
Schedule 6 [The categories of preferential debts]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 4:
Page 269, line 29, leave out from beginning to ("or") in line 30.
The noble and learned Lord said: Amendments Nos. 4 and 5 are to correct minute mistakes. They arise as a result of other Bills currently before Parliament. Amendment No. 4 is consequential upon provisions of the Social Security Bill. Amendment No. 5 is consequential upon provisions of the Gas Bill, which has relatively little to do with insolvency, but I am told that these amendments are necessary. I beg to move.
Lord Lloyd of Kilgerran: I must make a confession in that I was not present when the Select Committee considered this matter. But is it technically correct that "The Gas Act 1986", which has not yet passed through this Chamber, should be now inserted into this Bill?
The Lord Chancellor: I raised exactly the same point when I first saw this amendment, and was assured that it was all in order. But I cannot really go into the technicalities of it, because I do not understand it.
Lord Lloyd of Kilgerran: Of course, I will accept what the noble and learned Lord has said.
Lord Elwyn-Jones: It has been done before.
On Question, amendment agreed to.
Schedule 6, as amended, agreed to.
Schedules 7 to 11 agreed to.
Schedule 12 [Enactments repealed]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 5:
Page 296, line 57, at end insert—

("1986 c. 00

The Gas Act 1986.

In Schedule 7, paragraph 31.").

The noble and learned Lord said: I have already explained that this amendment refers to the Gas Bill. I beg to move.
On Question, amendment agreed to.
Schedule 12, as amended, agreed to.
Remaining Schedules agreed to.
House resumed: Bill reported with the amendments.

Company Directors Disqualification Bill [H.L.]
3.40 p.m.
The Lord Chancellor: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of re-commitment be discharged.
Moved, That the order of re-commitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

Royal Assent
The Lord Chancellor: My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Drainage Rates (Disabled Persons) Act,

Corneal Tissue Act,

British Shipbuilders (Borrowing Powers) Act,

Horticultural Produce Act,

Armed Forces Act,

Civil Protection in Peacetime Act,

Safety at Sea Act,

Health Service Joint Consultative Committees (Access to Information) Act,

Commonwealth Development Corporation Act,

Land Registration Act.

Wages Bill
3.41 p.m.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, that the House do now again resolve itself into Committee.—(Lord Trefgarne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the chair,]
Clause 12 [Continued existence of wages councils after repeal of Wages Councils Act 1979]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 71:
Page 14, line 5, after ("effect") insert ("other than in relation to the clothing industry").
The noble Lord said: I move this amendment on behalf of the National Union of Tailors and Garment Workers. I place it in isolation though I know that a great number of other sections of the working community are affected by this legislation. This group thinks that because of the peculiarities of the industry it affects it perhaps more than some of the others. I shall try to be as brief as possible because I realise that in the time available the Committee will wish to discuss a great number of other amendments.
A viable and competitive economy cannot be created by cutting wages and worsening terms of employment. I contend that the Government are wrong in attempting to maim the wages councils. The clothing industry is the only major manufacturing industry within the wages council system. It is there because the industry faces problems which, as I said, probably do not apply anywhere else in manufacturing. The industry has an extremely diverse structure ranging from modern factories to production in the home. The census of production for 1983 suggests that there are some 6,000 clothing factories and workshops, half of them employing fewer than 10 people. I have no wish to read the extensive figures I have on this problem because of the time factor, but
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any figures from the census of production must also be treated with caution as they do not include thousands of unregistered establishments.
The extent of non-registration was well illustrated in a recent report by the factory inspectorate on 300 clothing factories in the West Midlands, Leicester and East London. The inspector discovered nearly 200 previously unregistered factories. Even excluding factories where there had been only a change of occupier, there were still 100 new factories previously unknown to the inspector. The inspectors were visiting premises only where they knew of a clothing factory. It is certain that the proportion of unregistered factories in the area concerned was higher than those figures show.
I contend that there are two sets of workers who, when the Bill becomes an Act, will be more adversely affected. First, I should like briefly to deal with the question of young workers in the clothing industry. In many areas of the country the clothing industry is traditionally a major employer of female school-leavers. Many women leave the industry when they have children, though a number of them return when their children go to school. Workers up to the age of 21 form a high proportion of the industry's workforce. The age of 21, certainly in the post-war period, has never been regarded as the adult age for women. There are no figures for the proportion of the clothing workforce which is under the age of 21 but the union estimates that it is at least 25 per cent. of the total workforce and probably in excess of that. The Government's proposals would deem young workers not fully productive for five years. Anybody—not only in the clothing industry but in the industry to which I belonged—with knowledge of these industries would tell you that this is complete nonsense.
Another two groups of people could be extremely vulnerable under this proposed legislation. I refer to the ethnic minorities and home workers. Statutory protection combined with effective enforcement, which unfortunately is lacking at present, is vital in an industry such as clothing. This is illustrated by the two groups of workers most subject to exploitation—the ethnic minorities and home workers. The Wages Bill now before noble Lords ignores the realities of the clothing industry in, for example, parts of London and the West Midlands. There many clothing workers are required to work excessive hours in poor conditions, often for very low wages. It is a scandal that workers, many of them women with a poor command of English, should be dealt with in that way. More statutory protection, not less, combined with proper enforcement is urgently needed.
Home workers are particularly vulnerable to exploitation and even the Government's consultative paper recognised the need for provisions of some kind for their protection. Unfortunately the proposals in the Wages Bill contradict that. The clothing wages councils at present have a home worker holiday allowance. It would be a tragedy if this were to disappear as is required by the Bill. This would affect adversely tens of thousands of workers in the clothing industry.
The Government adopt, at least in public, the position that the Wages Bill is a job-creating measure,

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but in the clothing industry it is far more likely to destroy jobs. As I have already stated, the clothing industry is extremely diverse. It can be divided into two sectors. One is advanced and is capable of offering its employees conditions which are comparable with those elsewhere in manufacturing; the other is backward and can offer its employees little more than the historical role of sweat shop conditions. The Wages Bill combined with the removal of the protective legislation which applies to women's hours of work proposed in the Sex Discrimination Bill would lead to workers in the backward sector being forced to work longer hours with fewer holidays and probably for less pay. That will certainly have no beneficial effect on employment.
I have tried in a few minutes to illustrate how two or three sections of the community could be seriously affected by this Bill. Perhaps the Government can look at it again and give the clothing industry some special consideration. I beg to move.
Lord Murray of Epping Forest: I rise to support my noble friend, not so much in the sense of arguing that clothing is a special case as arguing that it is a case which graphically illustrates the need for protection for workers of the kind to whom the noble Lord has referred. I think in particular of the East End of London and of the area around Brick Lane where even the most casual observation will show the dangerous, dilapidated and appalling conditions in which mainly Bengali women are working. It was the area where the word "sweating" first entered the industrial vocabulary. It was the area that gave rise to the trade boards themselves. If this Bill is passed, the state of those workers will be even more degrading. That is why I share my noble friend's view that the Bill, which is a licence to exploit people in that situation, should not commend itself to the Committee.
Lord Trefgarne: Our proposals for the reform of the wages councils system are based on the responses that we received on the consultation exercise that we conducted last year. They showed that the majority of employers and employers' organisations favoured retention and reform of the system. I acknowledge that most employers in the clothing industry favoured retention with minimal change, but it remains the case that employers overall wanted reform, and that is what we have provided.
We can have some industries regulated by wages councils and others not, but what we cannot have are two different wages councils systems in existence at the same time, which is what the new clause and the amendments that go with it would achieve if they were adopted. What is much more important is that they would deny the benefits of increased employment opportunities, which we are convinced will arise from the proposed reforms, to the vast majority of employers and workforces in the industries concerned.
As far as concerns Clause 22, I appreciate that noble Lords opposite would be reluctant to lose it, since it is wider in its application than the corresponding provisions of the 1979 Act. Perhaps its presence will prove to be of some small consolation when the Bill comes into force. I hope that the noble Lord will not press his amendment.
Lord McCarthy: I must ask the Minister, in the light of what he has just said, what his answer would be in relation to the Agricultural Wages Board. The Minister says that one cannot have selectivity; that one cannot have two systems. However, he has two systems, because the Government are not designing to do away with the Agricultural Wages Board or to impose upon it that which they are proposing in respect of all the other wages councils in this Bill.
Lord Dean of Beswick: I should not want to develop the line of argument so ably and well put by my noble friend on the Front Bench, but having heard the Minister's reply, I should like to study some of his comments, bearing in mind that he clearly indicated that the employers in clothing factories certainly did not want to go as far down the road as this Bill will take them. On that basis, I beg leave to withdraw my amendment, but I shall consider what the Minister has said and perhaps return to this point at a later stage.
Amendment, by leave, withdrawn.
The Chairman of Committees (Lord Aberdare): I have to point out that if Amendment No. 72 is agreed to, I cannot call Amendments Nos. 73, 74 or 75.
Lord McCarthy Lord McCarthy moved Amendment No. 72:
Page 14, line 23, leave out subsection (3).
The noble Lord said: In rising to move this amendment I should like to couple with it Amendments Nos. 73 and 106. This amendment is designed to put young workers back into the wages councils regulations. The present Bill proposes that they be taken out. I must make it clear that if this amendment and the consequential amendment were passed, it would not mean that there would be nothing left of the Wages Bill. The Wages Bill, so far as concerns Part II, would still include, for example, the direction to the wages councils, which would now be considering also the position of young workers, to consider the employment effect of what they did. There would still be the limitation to a single rate and to a single overtime rate. We are not suggesting at this point, by this amendment, that we should tamper with those parts of the Bill. So the Bill would still represent a considerable modification so far as concerns Part II and the present system. Nevertheless, young workers would be back in the Bill.
There are three broad arguments that we would suggest to the Committee today for putting young workers back into the Bill. The first is that the position of young workers is particularly weak in the labour market vis-à-vis employers. The second argument is that any justification that there may have been at certain times in the past—for example, in the early 1970s—to suggest that youth rates were pricing people out of jobs because they were advancing faster than adult rates is no longer the case in effect. The situation was the result of developments that are no longer in existence and affecting the labour market. So it is not an argument for today. The third argument is that the Government continue to make confused claims about the overall effect of the Bill, and in particular about the employment effect, especially, the employment effect of taking young workers out of the Bill.
So far as concerns the special weaknesses of young workers, I cannot see how any reasonable person could doubt that weakness. It is already clear that the majority of wages councils workers and the great majority of young workers covered by wages councils are below the decency threshold fixed by the EC. In hairdressing, the youth rate starts at £31.16 per week. The average youth rate in wages councils industries is under £50 per week. The rate of entry of youth employment to wages councils is much lower than that and has been calculated at somewhere in the region of £35 per week. The overall level of unionisation in the wages councils trades is about 15 per cent., and among young workers, especially among very young workers of 15 or 16 years of age, it cannot be more than a few per cent.
So that is a group of workers who are badly paid, underpaid, weakly unionised, and who are relatively more badly paid and badly unionised than even adult workers in the wages councils industries. We would say that without regulation there is no chance for that group of workers to maintain what they have at the moment in respect of, for example, holiday pay or even in respect of holidays themselves, or even in respect of Bank Holidays, overtime premiums, protection against exorbitant living-in charges, and so on.
The weakness of young workers is widely accepted, at least outside the ranks of the Government, and it is always justified in virtually every other country of the world—certainly in every country that has minimum wages regulations and specific regulations to defend young workers.
I turn to the Government's argument that youth rates have been pricing the young themselves out of employment. I suggest to the Committee, as I said on the Second Reading of the Bill, that that is essentially an argument from the early 1970s. It was true then that a combination of factors significantly narrowed the youth differential, and it was for a short time reasonable to suggest that the youth differential had perhaps narrowed to a point where there was a disincentive to employ young workers.
We can now see that that situation was the result of more or less one-off events. It was partly the result of the introduction by successive governments of flat low pay incomes policies that disproportionately supported the badly paid and particularly supported, therefore, young workers. It was due also to the collapse of training provisions for the young and the collapse of training rates. The fact was that the overwhelming majority of young workers, and particularly those in wages councils industries, were, within a few months or so of entering an industry, doing, for all intents and purposes, adult work. For that reason they tended to receive something nearer to the adult rates. The situation was due also to the implications of equal pay regulations and to the very high levels of inflation at that time, which undoubtedly persuaded some independent members of wages councils to take the view that they had to do something about paying young workers something approaching a living wage at a time when inflation was moving upwards in double figures.
Nevertheless, all those arguments, tendencies and trends are now much weaker, and many were reversed in the late 1970s and 1980s. Meanwhile, youth unemployment has doubled since 1979, and without the youth training scheme it would be nearer the rate of 20 per cent. The youth differential widens every year, and since 1979 the male youth rates of pay have risen by 30 per cent. less than the average and female rates by 24 per cent. less than the average. Therefore, if there ever was an argument about the unusual youth differential, both as between youths and adults and youths in this country and in other countries, I suggest that the Government cannot have this argument today.
I come, therefore, to the third heading of my approach to this amendment—the confused claims that Government spokesmen have made about what they expect to happen if this amendment is defeated and the Bill is passed unamended. These relate to three aspects of what they have said. First, how much employment will this Bill actually create among young workers? They refuse to tell us. Secondly, how much must the pay of young workers fall to produce this employment effect? They refuse to tell us. Thirdly, let us suppose that the rate of pay of young workers falls and that the employment of young workers does rise. How much of that rise will be compensated for and disallowed because there will be an equal fall in the employment of adults?
That, after all, is the logic of the Government's argument. That is the experience we have had with previous attempts to shift pay in this way. If it be argued that as pay falls relative to other pay, people are priced into work, then if you take action through legislation to push down the rates for young workers, they will become cheaper and more advantageous to employ; and, if the labour market works in the way that the Government think it does in so far as employers do employ more young workers, then they will not employ so many old workers. Therefore, will it in fact be a shift from one section of the population to another?
It is because the Government accept that there is a great deal in this alternative argument, and it is because they accept that the more one accepts a price effect on employment, then the alternative argument becomes coercive, that we have these constant shifts in their statements as to what they think the level of employment will be among young workers if the Bill is passed.
On Second Reading I tried to clear up the position. At that time I referred to a statement for which I only had the authority, as I said, of a report by the Low Pay Unit. As I remember, the Minister spoke to the Secretary of State who was sitting by him and then told the House that the Secretary of State did not remember such a statement being made. That is understandable because it was not made by that Secretary of State. The statement was made by the previous Secretary of State, Mr. King.
On 17th July, as reported in col. 334 of Commons Hansard, the then Secretary of State said, when he was announcing his intention to introduce this Bill:
"We believe that the measures will lead to increased job opportunities for youngsters, but it is impossible to predict how many will be affected".
He then held a press conference and spoke to journal-ists. According to the distinguished correspondent of the Daily Express, Mr. Barrie Devney, he said:
"Between 50,000 and 100,000 young people overall could get jobs as a result of the changes".
Between 50,000 and 100,000 young people, said the then Secretary of State. This was also reported by Mr. David Thompson, the distinguished Daily Mirror industrial correspondent, who said in his paper:
"The Government hopes an extra 50,000 to 100,000 jobs will be provided".
The Daily Telegraph's even more reputable Mr. Maurice Weaver said that it,
"could produce between 50,000 and 100,000 jobs".
Finally, of the papers to which I have had access, the doyen of industrial correspondents, Mr. John Lloyd, who has received awards for his veracity, said in his column:
"Mr. King said the Government's overriding concern was to create more jobs—and that a drop in wages of young recruits in the councils' sector could mean the creation of somewhere between 50,000 and 100,000 jobs".
These are my questions to the Minister. Was this an over-estimate? Was it an under-estimate? Was it an estimate which the Minister has subsequently abandoned? Was that why he did not say it in Parliament? Surely it will not be denied that he said it to those distinguished journalists. If that was the figure, is it a net figure or a gross figure? What will the level of wage reduction have to be in order to create between 50,000 and 100,000 jobs?
I suggest that even if we take that figure, that minute figure, and if we allow for roughly the same amount of displacement as was discovered by the Government in their research paper concerned with previous attempts to operate policies in this way, then we find that we are considering a reduction in unemployment of about 25 per cent. of one month's rate of increase in the present level of unemployment. Is that what this is about? Is that what the Government say? Are the Government going to produce this dangerous, unjust, unsubstantiated, implausible and tenuous set of arguments in order to make the group of workers in this country who are most liable to be exploited certainly exploited by the efforts of the labour market and small employers? We say that there is no case for this subsection to be in the Bill and I move that it be deleted. I beg to move.
Lord Rochester: I support this amendment. As Amendment No. 75 implies, young people aged under 18 are now largely taken care of by allowances under the youth training scheme. At least, that is what I thought until I read in the press this morning (I hope that indirectly the noble Lord the Minister will have had some notice of what I am about to say) that Ministers are considering plans to abolish legislation restricting the hours and times of work of young people aged between 16 and 18 and that the Government are seeking the views of the Manpower Services Commission on the proposals.
I must therefore ask the noble Lord, Lord Trefgarne, whether that is the case. Among other statutes, the Factories Act, the Shops Act and the Employment of Women, Young Persons and Children Act now
430
protect the working hours of young people. They cannot at present work for more than 48 hours a week in shops, factories and mines. Overtime of more than six hours a week in factories and 12 hours in shops is banned, as is all work in factories between 10 p.m. and 6 a.m. Young workers are also prohibited from working on Saturday afternoon and on Sunday in factories and other industrial undertakings.
There may well be a case for reviewing some of this legislation; but in doing so it is, in my view, imperative that at a time of high unemployment—particularly in industries covered by wages councils where employees are largely unprotected by trade unions—we ensure that unscrupulous employers do not exploit young people. Therefore, I hope the Minister will be able to make some response to that point.
The Government's case for removing the shield of wages councils from those aged between 18 and 21—as I believe the noble Lord, Lord McCarthy, was saying at one point—is that the high minimum rates set by councils for them have damaged their job prospects in the past and that this reform will substan-tially improve their prospects of getting that vital first foothold on the ladder of employment.
However, a substantial number of reputable organisations think differently. The National Economic Development Office—a body which is representative of government, employers and trade unions—set up a working group to examine the employment effects of wages councils. It concluded:
"The research that has been examined has, in the group's view, left largely unproven the assertions that the wage rates determined by wages councils are substantially reducing the employment prospects of young people".
The CBI carried out a survey of its members on this subject, and they reported little evidence that wages councils had priced young people out of jobs. It added that among its members,
"There was little enthusiasm for the suggestion that all young workers should be excluded from coverage of wages councils".
The Institute of Personnel Management also carried out a survey of its members' attitudes to wages councils, and stated:
"Many respondents argued against removing young workers from the purview of the machinery, stating that they doubted if they would be able to recruit at rates lower than those now in force".
The fact is that evidence on this point is inconclu-sive. Nevertheless, the Government claim that the wages of young people should be freely negotiated with their employers. But how free is that negotiation likely to be in the present state of unemployment and in circumstances in which so many of those concerned are unprotected by trades unions? The contrast between them and the after-tax position of people enjoying high salaries is such that many people known to me who are highly paid are feeling increasingly uncomfortable about the situation. I was interested to learn that that feeling appears to be shared by a majority of Conservative Party supporters, to judge from the findings of an opinion poll that was published earlier this week.
In the past I have gone out of my way to support, and on occasion to advocate, the view that in the interests of our international competitiveness young people should receive a lower percentage of the adult wage rate than has often been the case. Under too

431
many wages councils even now, as I understand the position (and I am open to correction) the full adult rate is payable at the age of 18. In my view that is not a sufficient reason for allowing the pay of people in this age group to be altogether unregulated.
I believe that there is a strong case for empowering wages councils to make orders for graduated scales of payments to be made to people aged between 18 and 21; hence my support for Amendment No. 73. Yet there is more to it than that. What is to happen under the Government's present proposals when someone reaches the age of 21? The young person concerned may indeed have a foot on the first rung of the employment ladder but that will not be any consolation when he or she is thrown off the ladder and replaced by some other young person on what may be a much lower rate of pay.
I have consistently allied myself with those who consider that a slower rise in real pay for all in employment would enable more jobs to be provided for the unemployed; but I do not believe that such a situation will come about by placing the power of determining wages solely in the hands of employers. In our free society it will only be achieved when government, employers and trade unions become sufficiently aware of their responsibilities to make it happen.
Lord Sainsbury: I should like to speak very briefly in support of my noble friend. As we all know, one of the justifications for the Bill is the claim made by the Government that the existing wages councils have hindered job creation and caused unemployment. I support Amendment No. 72 because in my opinion there is no evidence that can be produced to support that claim. However, if minimum rates do not operate until the age of 21, in some cases there will certainly be a substitution of younger workers in place of those aged 21 or over, especially if they have not worked for their employer for a period of two years and therefore are not covered by employment protection rights.
Rather than having one rate at 21, surely a graduated incremental scale operating, say, between 18 and 21 would be much more satisfactory. The 16 and 17 year-olds are of course effectively governed by the Youth Training Scheme. I think that the whole Bill shows little concern for the low paid and there is plenty of evidence that there are too many in that category.
4.15 p.m.
Lord Murray of Epping Forest: In addition to the reasons for supporting this amendment that have been so ably advanced by my noble friend Lord McCarthy and other noble Lords who have spoken, there are the implications that this clause carries for Britain's standing in the world. Historically, other countries have looked to Britain to set and maintain decent and civilised standards of employment, not least by way of the conventions established by the International Labour Organisation, which is a body composed of governments, employers' associations and trades unionists.
I am sure that the noble Lord the Minister will bear out my statement that in this organisation the standing
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of Britain has historically been pre-eminent. Indeed, other countries have looked to Britain to give a lead and set a standard. Sadly, that is now no longer true and the change has come about not least because of Britain's denunciation of ILO Convention No. 26 on minimum wage-fixing machinery.
One of the main reasons for the Government's denunciation of that convention was the need to avoid what had always been regarded as their responsibilities—our responsibilities—towards young workers. It would not have been possible for the Government to implement this particular change and at the same time maintain their obligations in respect of the ILO. Convention No. 26 has been ratified by 94 other countries including the overwhelming majority of Western industrialised countries, but not one country—not a single other country—has joined Britain in denouncing the convention or suggesting that the removal of minimum wage protection should be regarded as a means of helping to reduce unemployment or that it will in fact help to generate employment. Not one of those countries has seen fit to support Britain's action.
The ILO, which is an independent body of impecca-ble standing in the world, has said:
"Almost all countries in the world now operate minimum wage systems, and none to our knowledge exclude young workers. The latter are more vulnerable to possible exploitation due to their inexperience and perhaps because of their very desire to earn a living by finding a first job".
In supporting the amendment the Committee will also signify its disapproval of, and indeed its distaste for, the Government treating their ILO conventions as mere scraps of paper to be torn up at a whim.
Lord Vinson: I am sure that on all sides of the Committee we share a deep concern to try to improve the job prospects of young people. That must be completely common ground. I wonder whether it would be helpful if I gave an example of the adverse working of the law as it stands at the moment, and how in many instances it prices young people out of work.
At 16, and not particularly skilled or bright, my neighbour's daughter did not have a job. Her next-door neighbour worked in a shop and thought that it would be possible to get her fixed up. She was told that if she came down to the village shop it may be possible to find her a job. "What is more", she was told, "I will give you a lift each morning and bring you back". That is what they arranged. She worked in the shop. It was her first job, and she was extremely happy. The shop even gave her lunch free.
About three months later along came the wages inspector. He accused the shop—and technically within the law he was right—of underpaying that young person to the extent of about £7 a week. The shop owner said, "I am sorry if we do, but our margin in this business is so thin that if we have to find another £350 a year we simply cannot employ the child. We just do not make that margin". As a result the girl had to be dismissed. She was in tears; the father was furious; and the wages inspector knew that he had not helped the world go round.
Somehow we have to ease the rigidities which in many instances are pricing young people out of work. The market used to work quite naturally, and young

433
people were absorbed into it. Of course sometimes on the margin there is the problem of displacement and additionality, but overall more jobs are created. I think that the Government are right to bite the bullet in that difficult area, and I am convinced that the provision will lead to more jobs, not less.
Lord Trefgarne: A central purpose of this part of the Bill is to promote employment, particularly employment for young people. The Government are convinced of the link between pay and jobs. I am grateful to my noble friend Lord Vinson for his intervention. No one could have explained the position more graphically.
Evidence can be found in all the studies on the effects of wages councils that they have inhibited employment prospects. We believe that in wages council industries employment of young people has been inhibited by rates set too high in relation to those for competing adults. All the pay protection in the world is worthless to the young person who cannot get a job because it is illegal to pay him at a rate which he is prepared to accept. Employers will not offer employment to anyone unless they are confident that the workers will at least add their own value to the business. Most young people would rather have a job at a starting rate of pay which is somewhat lower than they would have hoped than no job at all.
We accept that some of the additional jobs for young people may be at the expense of adults, but it is our overriding concern to help young people gain access to the crucial first rung of the employment ladder, and that is why the Government are proposing to remove them from regulation by the councils. This vital measure will be achieved by Clause 12 (3).
I have been asked about the number of jobs that would be created by these arrangements. The Committee will understand that there can be no certain answer to such questions. Pay is not the only matter which determines the level of employment, and we have never maintained or supposed that it was. I can only repeat to the Committee that research has shown that pay is a significant factor, although estimates of its effect vary widely, as the Committee knows. If research did not exist, common sense would surely tell us the same thing.
Lord McCarthy: If we rely on common sense we could have it any way we liked. The question that I ask the Minister is whether he will cite that research.
Lord Trefgarne: I made it clear during Second Reading and on our last Committee day that a lot of research had been done. I have recited it, and I dare say that the noble Lord recalls that.
Lord McCarthy: Which research?
Lord Trefgarne: There was a Gallup poll, for example, last summer which showed clear evidence that young people preferred low paid jobs to no jobs at all.
There was a proposition by the noble Lord, Lord Rochester, that young people might be sacked at age 21, but that is not borne out by the young workers
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scheme report, which states that at least 90 per cent. of young workers have continued or have been expected to continue in their current jobs beyond their period of eligibility for YWS support.
The noble Lord asked me about press reports that he had seen today to the effect that the Government were planning to abolish legislation on young people's hours of work. I assure him that the Government have no current plans to abolish the legislation controlling the hours of work of young people aged 16 to 18, or to issue a consultation document on the subject. However, as is made clear by the White Paper, Building Businesses not Barriers, we are looking at that legislation, some of which parallels the legislation on women's hours which is being repealed in the Sex Discrimination Bill. The review is not yet complete, and it is too early to anticipate conclusions. But Ministers will consider its report later this year and will decide whether the legislation serves a useful purpose nowadays.
The noble Lord referred, too, to the attitude of the CBI. Following publication in March 1985 of the Government's consultative paper on the future of wages councils, the CBI consulted again, this time seeking only the views of those companies and employer organisations most affected by the operation of the wages councils. It was those views that were the basis of the CBI's response to the consultative document, which was approved by its council in May 1985. That response, which shows a certain shift in opinion, states:
"Current youth rates should be frozen and young people should be excluded from the wages council remit".
Incidentally, following up the remarks made by the noble Lord, Lord McCarthy, the typical minima for young workers (that is to say, 16 to 17 year-olds) in wages council trades are £47 to £57 per week and may indeed reach the full adult minimum of about £75 to £80 a week at the age of 18.
In the light of those difficulties which I have explained about the amendment, I hope that the noble Lord will not wish to press it.
Baroness Phillips: I find the arguments of the Minister and the noble Lord, Lord Vinson, almost Dickensian. They were advanced many years ago about the employment of women. Women were cheaper—we all know that—particularly in the clothing and catering trades. They were the only labour that the employer could afford. The danger to the older worker must be obvious. The shop that the noble Lord cited would not be able to employ somebody beyond the age of 18. There would have to be a constant supply of young people. What, then, of the young person who had been working there?
Lord Trefgarne: I do not think that the noble Baroness has fully taken the point on board. The problem is that younger people are less experienced and less skilful. It is inevitable that they are not able to earn so much.
Baroness Phillips: If I may say so, the Minister has not taken the point on board. Young people are of course not as experienced. But the noble Lord, Lord

435
Vinson, said that the shop owner could not afford to pay more, and so he would not be able to continue to employ the young person when she became more experienced. That is an ingenuous argument. It is the basis of many of the reforms that we have had over the years. It will be a backward step if we accept such an argument in relation to the Wages Bill.
4.30 p.m.
Lord Vinsonn: The point I am trying to make is that in this instance the introduction of a statute destroyed a small job. There are hundreds and thousands of half jobs with half-skilled people at half rates. That is inescapable. If we deny or frustrate that market, it will not operate properly. I object to people who brand everyone else as taskmasters wishing to grind down the faces of young people. None of us in this chamber is like that. We are trying to get young people started. We are trying to make the market operate sensibly, reasonably and fairly. We believe that this reform will do that. Leaving things as they are will continue to price people out of the jobs that they would like to have at the rate the job can afford.
Viscount Massereene and Ferrard: I support my noble friend. I have come across many such instances. A young person of 16 is not experienced and the wage for him laid down by statute is too much. The wage depends upon the individual and his ability. The statute definitely prices a great many people out of jobs. With due respect to Members opposite, I often wonder how many of them employ people and pay them directly out of their own pockets. I do not know whether the noble Lord, Lord McCarthy, employs many people. It has been a fact for years that if someone is paid a high wage for doing a small job, he will be priced out of a job.
Lord McCarthy: The Committee will not be surprised to find that I am not convinced by the Minister's arguments. Let us make clear what we are saying. We are not saying, and I have never said, that there is no employment effect. I am not saying that we can double and treble people's wages and there will not be an employment effect. I am not saying that if their wages are cut in half there will not be a reverse employment effect. Of course there is an employment effect. Somewhere, out there, there is an employment effect. I keep asking the Government what they say the employment effect is, and they keep refusing to answer the question.
No one should say that we say that there is not an employment effect. I stress that what evidence there is, is evidence of where wages councils have been abandoned. The Department of Employment has done a series of research studies where wages councils have been abandoned. The result of wages councils being abandoned is that the wages go down but the declining employment trend is not reversed. There is not an employment effect big enough to reverse the overall level of decline in the industry and the general employment level in the economy. That is the evidence from studies done by the Department of Employment.
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The studies that go the other way are, for the most part, done by those who put such assumptions into their econometric models. Anyone can have an econometric model and make an assumption that there is a positive employment effect and a positive elasticity so that a 1 per cent. reduction in wages produces a 50 per cent. increase in employment. Anyone can put that in the model. There will then be a tremendous employment effect. That is what Professor Minford does every day of the week. But that is not evidence. The only evidence is of what has happened when wages councils have been abandoned. The general trend is that that has reduced pay but has not significantly increased employment. The overall level has continued to be down.
I do not deny, as the noble Lord, Lord Vinson, says, that we can find people—he clearly has—who will employ other people only if they can pay them £8 less than the minimum rate. Of course there are such people. It is most remarkable for the wages councils inspectorate to find them because the inspectors get round to the average employer only once in 17 years. Even if they do find them, nothing happens. Nothing would have happened in the example given by the noble Lord, Lord Vinson, because there were only two prosecutions last year. At the present rate of decline there will be no prosecutions. The penalties at the moment for those who pay under the rate are weak, but the Government want to get rid of them altogether.
Lord Vinson: Something did happen. In that instance, that young person lost her job. She was extremely happy in her job. In relative terms, because she had a free meal and free transport, she was probably doing rather better than she would have done had she been on the statutory minimum and not had free transport and a free meal. Jobs are relative to one another. I know that we do not have to argue that among ourselves. Severe damage was done. In that instance, the girl was happier to have a job at marginally less than the statutory rate than not to have a job. The problem with leaving matters as they are is that we shall cause great damage to the economy.
Lord McCarthy: I do not deny that that is an example. I do not deny that such things happen. I do not deny anything that the noble Lord has said, but that is not the general trend. Of course there are individuals who will not employ people unless they can pay them less than the wages council rates. There are many people now who are employing people below wages council rates and they are very unlucky to be caught. If that girl walked down the street she would probably find an employer who would pay her less than the wages council rate, and he would not get caught.
We are not saying that there are no indications of such things. We are saying that it is not a general trend and that what evidence there is goes against that. The closer the Government get to the introduction of the Bill—the Minister has done it again today—the more they back off from giving us any figures. They do not just back off from giving the figures of the employment effect; they back off from telling us what the elasticity is—how much we would have to drive down pay to

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make it 50,000 or 100,000. Since the Government will not put any figures on that and they stick to their position out of prejudice and in defiance of the evidence, we intend to divide the Committee.
4.36 p.m.
On Question, Whether the said amendment (No. 72) shall be agreed to?
Their Lordships divided: Contents, 84; Not-Contents, 110.

DIVISION NO.1

CONTENTS

Airedale, L.

Lockwood, B.

Alport, L.

Lovell-Davis, L.

Amherst, E.

McCarthy, L.

Aylestone, L.

McNair, L.

Banks. L.

Meston, L.

Barnett, L.

Milford, L.

Birk, B.

Mishcon, L.

Brockway. L.

Molloy, L.

Bruce of Donington, L.

Morton of Shuna, L.

Burton of Coventry, B.

Murray of Epping Forest, L.

Caradon, L.

Nicol, B.

Carmichael of Kelvingrove, L.

Northfield, L.

Cledwyn of Penrhos, L.

Oram, L.

Crawshaw of Aintree, L.

Parry, L.

David, B. [Teller.]

Phillips, B.

Dean of Beswick, L.

Ponsonby of Shulbrede, L.

Denington, B.

[Teller.]

Diamond, L.

Rathcreedan, L.

Elwyn-Jones, L.

Rea, L.

Ennals, L.

Rochester, L.

Fisher of Rednal, B.

Sainsbury, L.

Foot, L.

Seear, B.

Gallacher, L.

Sefton of Garston, L.

Graham of Edmonton, L.

Serota, B.

Grey, E.

Shepherd, L.

Hampton, L.

Silkin of Dulwich, L.

Hanworth, V.

Simon, V.

Harris of Greenwich, L.

Stallard, L.

Hatch of Lusby, L.

Stewart of Fulham, L.

Hirshfield, L.

Stoddart of Swindon, L.

Houghton of Sowerby, L.

Strabolgi, L.

Hughes, L.

Taylor of Blackburn, L.

Hunt, L.

Tordoff, L.

Irving of Dartford, L.

Turner of Camden, B.

Jeger, B.

Underhill, L.

Jenkins of Putney, L.

Wells-Pestell, L.

John-Mackie, L.

White, B.

Kaldor, L.

Williams of Elvel, L.

Kilmarnock, L.

Willis, L.

Kirkhill, L.

Wilson of Rievaulx, L.

Leatherland, L.

Winterbottom, L.

Listowel, E.

Ypres, E.

Lloyd of Kilgerran, L.

NOT-CONTENTS

Alexander of Tunis, E.

Caccia, L.

Ampthill, L.

Caithness, E.

Auckland, L.

Cameron of Lochbroom, L.

Bauer, L.

Campbell of Alloway, L.

Beaverbrook, L.

Carnock, L.

Belhaven and Stenton, L.

Cottesloe, L.

Beloff, L.

Cowley, E.

Belstead, L.

Cox, B.

Bessborough, E.

Craigavon, V.

Birdwood, L.

Cullen of Ashbourne, L.

Boyd-Carpenter, L.

Davidson, V.

Brabazon of Tara, L.

De Freyne, L.

Braye, B.

De La Warr, E.

Brookes, L.

Denham, L. [Teller.]

Brougham and Vaux, L.

Digby, L.

Broxbourne, L.

Dilhorne, V.

Bruce-Gardyne, L.

Dundee, E.

438

Ellenborough, L.

Merrivale, L.

Elliot of Harwood, B.

Molson, L.

Elton, L.

Monk Bretton, L.

Fanshawe of Richmond, L.

Montgomery of Alamein, V.

Fisher, L.

Murton of Lindisfarne, L.

Foley, L.

Napier and Ettrick, L.

Fortescue, E.

Norfolk, D.

Gainford, L.

Norrie, L.

Gardner of Parkes, B.

Nugent of Guildford, L.

Glenarthur, L.

Orr-Ewing, L.

Greenway, L.

Pender, L.

Gridley, L.

Polwarth, L.

Hailsham of Saint

Porritt, L.

Marylebone, L.

Portland, D.

Hardinge of Penshurst, L.,

Rodney, L.

Harmar-Nicholls, L.

Rugby, L.

Hayter, L.

St. Aldwyn, E.

Hives, L.

St. Davids, V.

Home of the Hirsel, L.

Sandys, L.

Hooper, B.

Savile, L.

Hylton-Foster, B.

Sempill, Ly.

Ilchester, E.

Shannon, E.

Killearn, L.

Skelmersdale, L.

Kimball, L.

Stodart of Leaston, L.

Kinnaird, L.

Strathspey, L.

Kitchener, E.

Sudeley, L.

Lane-Fox, B.

Swansea, L.

Lauderdale, E.

Swinton, E. [Teller.]

Layton, L.

Teviot, L.

Long, V.

Thomas of Swynnerton, L.

Lucas of Chilworth, L.

Trefgarne, L.

McFadzean, L.

Trumpington, B.

Macleod of Borve, B.

Vaux of Harrowden, L.

Malmesbury, E.

Vickers, B.

Mancroft, L.

Vinson, L.

Marsh, L.

Vivian, L.

Marshall of Leeds, L.

Whitelaw, V.

Massereene and Ferrard, V.

Young, B.

Maude of Stratford-upon-

Avon, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.44 p.m.
[Amendment No. 73 not moved. ]
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 74:
Page 14, line 24, after ("workers") insert ("other than homeworkers").
The noble Lord said: It may be for the convenience of the Committee if we also discuss Amendment No. 108. We have just had quite a long debate on Amendment No. 72 which sought to retain young workers within wages councils. If that amendment had been carried, the amendment that I am now moving would not have been necessary. However, as the Committee, in its wisdom, decided not to support the previous amendment, we have to move this one to try to retain some protection for the most exploited group; namely, young home workers. It may be the case that there are not great numbers of young home workers. Most are aged over 21. A large proportion are aged between 25 and 44. They are women with young children to look after who take in homework not for pin money but because that money is needed to sustain the family. But there are some young home workers, a proportion of them disabled. They need some protection against exploitation by unscrupulous employers.
Rates of pay for home workers are abysmally low, as most noble Lords, I believe, will know. A survey

439
carried out for the Low Pay Unit in 1983 found that one-third of the sample earned less than 50 pence an hour while three-quarters earned £1 an hour or less. It is doubtful whether these rates have increased very much, if at all, since then. There is clearly a need, therefore, to retain protection for young home workers who are, in any event, the most vulnerable to exploitation because of their youth. They are least able to stand up to an employer, as already pointed out by my noble friend Lord Murray of Epping Forest who has great experience in these matters.
The prospect of home workers being exploited will be increased if they are removed from the protection of wages councils. I hope therefore that the Government will not only accept the amendment but will also give an undertaking that an adequate number of wage inspectors is available to see that wages councils' decisions are enforced. Again, as my noble friend Lord McCarthy pointed out, the number of wages inspectors is much too low. Indeed the number of enforcements is ludicrously low. I hope that the noble Lord will be able to give a sympathetic reply. I beg to move.
Lord Trefgarnen: During our discussion on the last amendment I deployed at a little length the argument against the proposition that the amendment contained; namely, that wages councils arrangements should remain in place for young people. The Committee was able to agree that the amendment should not be accepted. I hope that the Committee will likewise agree that this amendment should not be agreed to. The case for home workers is no different. While it is true that the earnings of piece workers—and virtually all home workers are piece workers—are governed by their productivity, that does not mean that there is no point in removing young piece workers from scope. If they remained within the ambit of the councils their pay would be related to the rates set by the councils for the ordinary worker. If they were as fast as adults, they would then be entitled to be paid the same amount. But the whole point of the Government's stance is that young workers should be given a competitive edge over their adult counterparts in their search for employment. In essence, therefore, the arguments against this amendment are the same as the arguments against the previous amendment, which Members of the Committee decisively rejected.
Lord Stoddart of Swindon: I understand perfectly well what the noble Lord has said. Of course it is true that most home workers, whether they are aged over or under 21, are piece workers. But my understanding is that wages councils, at least until now, have set out the minimum rates of piece work. That is what we are seeking to continue. That is the protection that this amendment would give.
I do not know whether the noble Lord has any further information about that. Before I withdraw the amendment—which I intend to do—perhaps he would like to comment on that.
Lord Trefgarne: I do not think that I can add to what I have already said. As I mentioned just now, if young people were as fast as adults then they would be
440
entitled to be paid the same amount. However, the whole point of the Government's stance is that we should give them a competitive edge to enable them to do a little better than adults in this situation. I cannot therefore accept the amendment.
Lord Stoddart of Swindon: I do not accept the logic of the noble Lord, Lord Trefgarne. However, whether or not I accept it, I still intend to withdraw the amendment. I beg leave to do so.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 75:
Page 14, line 25, leave out ("21") and insert ("18").
The noble Baroness said: I beg to move Amendment No. 75 standing in the names of my noble friends, and to couple with it Amendment No. 107.
Noble Lords have just voted on the amendment which would have given all young people protection from the age of 16 and above. This amendment is a variant of that. It accepts the argument that for the ages of 16 to 18 YTS schemes are in place, and therefore there may be some argument for not including workers of those ages. However, we do not believe that there is any reason whatsoever for excluding from the scope of protective legislation of this kind, young adults between the ages of 18 and 21. In this group we are talking of people who very often have chosen to live independently and are doing so. Sometimes they have had no choice but to do so. Often they have started families of their own. There is absolutely no reason for discriminating against them by exempting them from the scope of the legislation.
Nor do I accept the arguments already advanced this afternoon that one of the reasons for youth unemployment—including youth unemployment in these age groupings—is because wages council restrictions are pricing the young people out of the labour market. My noble friend Lord McCarthy has already referred to the fact that since 1979 youth unemployment has doubled. But during that period of time the relative pay of young people in this age grouping has fallen sharply. Young males have received 30 per cent. less in pay rises than the average increases for adult males. Young women's pay—and I believe this was mentioned earlier—has fallen 24 per cent. behind the equivalent increase for adults. There has been no indication whatsoever that these changing relativities with regard to salaries have affected employment opportunities for young people.
As has already been stated there is very little research data available to support that argument. Indeed, I think that the argument of the Government in these respects is a somewhat disingenuous one. The answer is not given to the question: to what level would pay rates have to be reduced on the Government's logic in order to create more employment? Indeed, the Government have been very silent on that point. Do the Government believe, for example, that cutting the current rate of £70 a week or thereabouts for a skilled hairdresser would lead to a call for more hairdressers? Quite obviously extra employment in this field depends on other factors. It depends on the skill of the hairdresser, the rate of growth of hair, and probably

441
the general economic climate which enables more women to go to hairdressers than did so a number of years ago. I do not think that those arguments hold water.
I do not think that the Minister has effectively answered the argument of my noble friend Lord Murray of Epping Forest on the matter of the ILO Convention No. 26 on minimum wages. I recently attended an international trade union conference as a delegate. I can confirm that there are questions being asked in international labour circles about exactly where the British Government are going. I was asked: what do the British Government think they are doing? They are denouncing this convention, which has been in operation since 1928. They are the only Government that have done so and they will be the only Government in the western world, so far as I can see, which have no kind of minimum protection for young adults at all. For all these reasons, I would commend Amendment No. 75 to noble Lords, and Amendment No. 107, with which it is coupled.
With regard to the point raised by the noble Lord, Lord Vinson, in connection with the young woman who failed to keep a job because of an inspectorate, and so on, I am sorry if this sounds harsh but if it is a burden on business to pay more than a sweat shop rate the individual running that business should be doing something else. It has always been possible to find people desperate enough to accept low pay. It is because of those reasons that we have to have protection, and wages councils. It seems to me that the argument put forward was not on the side of the Government but in favour of retaining basic protection. I beg to move.
Lord Vinson: I wonder whether I may return to this subject, and in particular the question of young people's wages differentials. The noble Lord, Lord McCarthy, has rightly said that these differentials are beginning to open out again. Historically it might be valuable to go back to the point where we on this side of the Committee believe that most of these problems began. When the age of majority was lowered from 21 to 18, that effectively meant that somebody leaving school at 16 had two years as a junior before he or she began to pick up an adult wage. The trade unions—as one can understand perfectly well—were always anxious to get rises at the bottom, as it pushed up the rates for everyone else at the same time. When young people were adult at 21—and in those days very often they left school at 15—there were then six years between starting work and reaching adulthood and an adult wage. This gave six years in which people gradually learnt, and improved their skills. By the time they reached 21 their earning power was the equivalent of an adult at 21. Therefore they were absorbed into the labour market so much more easily.
I believe I am right in saying that youth unemployment in this country—particularly if one rebalances the figures of the YTS scheme—is probably higher than anywhere else in Europe. One of the reasons for that is that the payment to young people relative to older employees of 21 or more is far too high. I think there is every indication that we have priced young people out of the market. This is reinforced by the fact that the highest consumer
442
spending group with the greatest disposable income is in that bracket as well. It seems to me rather crazy for any society to give people almost their maximum earning power in terms of disposable and discretionary income at 18 or 19—for those lucky enough to be in work—and as a consequence price out many hundreds of thousands of young people who would like work.
Therefore, I am sure that the Government are right to try to open up the period through which people can learn and through which, quite sensibly, they can reach a level at which they can genuinely earn a full adult wage at the age of 21. It is for that reason, and for no other reason, that I am sure the Government are right to stick to their principles, and I wholly support the Bill as it stands.
5 p.m.
Lord Boyd-Carpenter: I should like to take up the general proposition which the noble Baroness, Lady Turner, made when she said, in connection with the case which my noble friend Lord Vinson, so vividly described to us on a previous amendment, that if people could run their businesses only by paying sweatshop rates, they should close down their business. If that is really the policy of the party opposite, it is a very revealing observation indeed.
The case which my noble friend quoted was the case of a young person who, as I understand it, very desperately wanted to do this job and who, in fact, was in tears when the wages inspector stopped it. At the same time as that was happening the business was struggling, as many businesses are, to keep going. Is the Labour Party really saying that someone who wants to work should by law be stopped from doing so because the rate of pay is below that which has been fixed by some official body, and, equally, that someone who can keep a business going by employing that willing worker should be forced to give up that business and himself become unemployed?
If that is the policy of the Labour Party, it casts a very illuminating light on the statements that that party has made that a Labour government would deal with unemployment. Quite plainly it means that a Labour government would inflate unemployment.
Baroness Turner of Camden: Perhaps I may respond to that point. Personally I do not believe in the "Koreanisation" of the British economy. Is that the policy of the party opposite?
Lord Trefgarne: I very much share the view of my noble friend Lord Boyd-Carpenter that the remarks of the noble Baroness, in response to the description of the particular situation offered by my noble friend Lord Vinson, were quite extraordinary and I feel certain that, on reflection, the noble Baroness will regret that she made them.
The decision to exclude under-21s rather than under-18s, or any other age, reflects our desire to provide the flexibility needed if people in the younger age groups are to compete successfully with more mature and experienced workers. It really is no good imposing full adult rates at the age of 18 or 19, as many wages councils currently do, unless the youngsters concerned are in all cases fully competent to earn the full rate.

443
One of the messages that we received through the consultative exercise was that the steady reduction in the age at which the adult rate was payable had contributed to employers' reluctance to employ young people. It must surely be more sensible that employers should be free to pay increases in stages and to work up to the full rate as the young workers' value to the business increases. I believe that it was the noble Lord, Lord Rochester, who suggested that while we were discussing an earlier amendment. Again, for very similar arguments to the ones I deployed at some length earlier this afternoon, I would wish to resist this amendment.
Baroness Turner of Camden: I have to say that I do not regret the comments that I made. I do not believe in a low-wage economy. At the age of 18 young people are regarded as having attained majority; people mature much earlier now than they used to many years ago, and it is generally recognised that that is so. Many of them have families at quite a young age. I do not regret anything that I have said in defence of reasonable living standards and a living wage for people between the ages of 18 and 21.
We have only to look at the recent figures which have been issued in the new earnings survey and which appear in the TUC's consultative response to the Government's consultative paper to see the decline. Incidentally, when the noble Lord said that he had consulted a number of organisations prior to the introduction of this Bill, I notice that he did not mention the trade unions. Of course, the trade unions have made quite detailed responses to the consultative document.
As a percentage of adult pay, pay for men is only at 100 per cent. at 21 and over. In 1979 between the ages of 18 and 21 it was 61 per cent. of the adult rate and in 1984 it was 55·7 per cent. of the adult rate In 1979, for women in the age group 18 to 20, it was 74·6 per cent. of the adult rate and in 1984 it was 67·9 per cent, of the adult rate. Therefore, there has been a decline between 1979 and 1984 in the percentages of the adult rate earned by these groups of young people. I do not think that the case has been made out for excluding them from protection and I therefore wish to press my amendment.
5.6 p.m.
On Question, Whether the said amendment (No. 75) shall be agreed to?
Their Lordships divided: Contents, 81; Not-Contents, 98.

DIVISION NO.2

CONTENTS

Airedale, L.

Dean of Beswick, L.

Amherst, E.

Denington, B.

Annan, L.

Diamond, L.

Attlee, E.

Elwyn-Jones, L.

Aylestone, L.

Ennals, L.

Banks L

Falkender, B.

Barnett, L.

Fisher of Rednal, B.

Birk, B.

Foot, L.

Bruce of Donington, L.

Gallacher, L.

Caradon, L.

Graham of Edmonton, L.

Carmichael of Kelvingrove, L.

Gregson, L.

Cledwyn of Penrhos, L.

Grey, E.

David, B. [Teller.]

Hampton, L.

444

Hanworth, V.

Parry, L.

Hatch of Lusby, L.

Phillips, B.

Hirshfield, L.

Ponsonby of Shulbrede, L.

Houghton of Sowerby, L.

[Teller.]

Hunt, L.

Rathcreedan, L.

Irving of Dartford, L.

Rea, L.

Jeger, B.

Rochester, L.

Jenkins of Putney, L.

Sainsbury, L.

John-Mackie, L.

Seear, B.

Kaldor, L.

Sefton of Garston, L.

Kilmarnock, L.

Serota, B.

Kirkhill, L.

Shepherd, L.

Leatherland, L.

Silkin of Dulwich, L.

Listowel, E.

Simon, V.

Lockwood, B.

Stailard, L.

Longford, E.

Stewart of Fulham, L.

Lovell-Davis, L.

Stoddart of Swindon, L.

McCarthy, L.

Strabolgi, L.

McNair, L.

Tordoff, L.

Meston, L.

Turner of Camden, B.

Milford, L.

Underhill, L.

Mishcon, L.

Wells-Pestell, L.

Molloy, L.

White, B.

Morton of Shuna, L.

Williams of Elvel, L.

Mulley, L.

Willis, L.

Murray of Epping Forest, L.

Wilson of Rievaulx, L.

Nicol, B.

Winterbottom, L.

Oram, L.

Ypres, E.

NOT-CONTENTS

Alexander of Tunis, E.

Kinnaird, L.

Auckland, L.

Kitchener, E.

Beaverbrook, L.

Lane-Fox, B.

Belhaven and Stenton, L.

Lauderdale, E.

Beloff, L.

Layton, L.

Belstead, L.

Long, V.

Bessborough, E.

Lucas of Chilworth, L.

Birdwood, L.

McFadzean, L.

Boyd-Carpenter, L.

Macleod of Borve, B.

Brabazon of Tara, L.

Malmesbury, E.

Braye, B.

Mancroft, L.

Brookes, L.

Marshall of Leeds, L.

Brougham and Vaux, L.

Massereene and Ferrard, V.

Broxbourne, L

Maude of Stratford-upon-

Bruce-Gardyne, L.

Avon, L.

Caccia, L.

Merrivale, L.

Caithness, E.

Molson, L.

Cameron of Lochbroom, L.

Monk Bretton, L.

Carnock, L.

Monson, L.

Colwyn, L.

Montgomery of Alamein, V.

Cox, B.

Murton of Lindisfarne, L.

Craigavon, V.

Norfolk, D.

Cullen of Ashbourne, L.

Norrie, L.

Davidson, V.

Nugent of Guildford, L.

De La Warr, E.

Orr-Ewing, L.

Denham, L. [Teller.]

Pender, L.

Digby, L.

Porritt, L.

Dilhorne, V.

Portland, D.

Dundee, E.

Rodney, L.

Ellenborough, L.

Rugby, L.

Elliot of Harwood, B.

St. Aldwyn, E.

Elliott of Morpeth, L.

St. Davids, V.

Elton, L.

Savile, L.

Fanshawe of Richmond, L.

Sempill, Ly.

Foley, L.

Shannon, E.

Fortescue, E.

Skelmersdale, L.

Gainford, L.

Stodart of Leaston, L.

Gardner of Parkes, B.

Strathspey, L.

Gisborough, L.

Sudeley, L.

Glenarthur, L.

Swinton, E. [Teller.]

Hailsham of Saint

Teviot, L.

Marylebone, L.

Teynham, L.

Hardinge of Penshurst, L.

Trefgarne, L.

Harmar-Nicholls, L.

Trumpington, B.

Hives, L.

Vaux of Harrowden, L.

Home of the Hirsel, L.

Vickers, B.

Hooper, B.

Vinson, L.

Hylton-Foster, B.

Vivian, L.

Ilchester, E.

Whitelaw, V.

Kimball, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.14
On Question, Whether Clause 12 shall stand part of the Bill?
Lord McCarthy: We naturally wish to oppose that this clause stand part of the Bill. We have opposed various bits of it, tried to improve it in various ways and we have failed. If we defeat the clause we shall not defeat the Bill, as I said in moving our first amendment. This clause takes young workers out of the Bill. We shall still have the single rate, we shall still have the employment test and we shall still have removal of all kinds of rates, premia and holiday arrangements which can be set under the existing wages council legislation.
The noble Lord has said that he has the evidence. He said that he quoted it to us. I have been looking at his speech on Second Reading and I find no evidence; I find no figures. I find assertions. If the Government have evidence and if the evidence is convincing we have to ask why the Government have convinced so few people? Why have we had the doubts of a Conservative-controlled employment committee in another place? Why have we had the doubts of the Institute of Personnel Management, of the CBI, of the Association of Small Employers and the Citizens' Advice Bureaux? Why have we had the publications of the NEDO office and the research papers of the Department of Employment? They do not prove the case that the noble Lord has submitted to us.
The empirical studies done by Wilkinson and Craig do not support the Minister. The general study by Christine Craig, Labour Market Structures: Industrial Organisation and Low Pay, does not support him. The report which the department authorised but did not publish until it could produce its own correction of the econometricians does not support him. The American work by Atkinson, Bazen and Poire on the American experience does not support him. The only evidence (and it is not evidence) is the notorious Treasury paper on the relationships between employment and wages. Messrs. Nicol and Leyard, who are the two economists whose work was the basis of that, have written to the Treasury and published letters denouncing the conclusions which the Treasury drew from their work.
Therefore the evidence does not support the Minister. There is no evidence that there is any significant employment effect. In the absence of convincing evidence there is no evidence in support of this part of the Bill and we oppose the Motion that the clause stand part.
Lord Trefgarne: Noble Lords and noble Baronesses opposite have, if I may say so, a remarkable capacity for ignoring the obvious and flying in the face of sensible pragmatic propositions. The sensible pragmatic proposition which I bring before your Lordships in this clause is that by ensuring that young people do not price themselves out of the market they will make the best of the employment opportunities that there are available to them. I ask your Lordships to hearken to the example proffered by my noble friend Lord Vinson a few moments ago, which graphically demonstrated, if the Committee will allow me to say so, the proposition enshrined in this section of the Bill.
446
The noble Lord, Lord McCarthy, is anxious to have statistics to back up the sensible proposition which I have offered. I have provided a number of statistics at various moments and now offer him another, if he is not yet convinced. He will have heard of the young workers' scheme, where some financial inducement is provided to employers to lower the cost of taking on young people. We estimate that that scheme has generated about 120,000 jobs for young people, of which at least 90,000 were brand new jobs and a quarter or less represented substitution. The 120,000 people who have taken advantage of that scheme would strongly resist the proposition offered by the noble Lord that the cost of their employment had no bearing on their futures.
Lord McCarthy: Will the Minister not accept that other studies have been quoted in this Committee which indicate that eight out of ten jobs were substitutions? If it is such a wonderful scheme why are the Government not continuing it?
Lord Trefgarne: Because we are bringing forward this legislation.
5.18 p.m.
On Question, Whether Clause 12 shall stand part of the Bill?
Their Lordships Divided: Contents, 93; Not-Contents, 74.

DIVISION NO.3

CONTENTS

Airey of Abingdon, B.

Halsbury, E.

Alexander of Tunis, E.

Hardinge of Penshurst, L.

Auckland, L.

Harmar-Nicholls, L.

Beaverbrook, L.

Hives, L.

Belhaven and Stenton, L.

Home of the Hirsel, L.

Beloff, L.

Hooper, B.

Bessborough, E.

Hylton-Foster, B.

Birdwood, L.

Ilchester, E.

Boyd-Carpenter, L.

Kimball, L.

Brabazon of Tara, L.

Kinnaird, L.

Braye, B.

Lane-Fox, B.

Brookes, L.

Lauderdale, E.

Brougham and Vaux, L.

Layton, L.

Broxbourne, L.

Long, V.

Caithness, E

Lucas of Chilworth, L.

Cameron of Lochbroom, L.

McFadzean, L.

Carnock, L.

Macleod of Borve. B.

Colwyn, L.

Malmesbury, E.

Cox, B.

Mancroft, L.

Craigavon, V.

Marshall of Leeds, L.

Cullen of Ashbourne, L.

Massereene and Ferrard, V.

Davidson, V.

Merrivale, L.

De La Warr, E.

Molson, L.

Denham, L. [Teller.]

Monk Bretton, L.

Digby, L.

Monson, L.

Dilhorne, V.

Montgomery of Alamein, V.

Dundee, E.

Mottistone, L.

Ellenborough, L.

Murton of Lindisfarne, L.

Elliot of Harwood, B.

Norrie, L.

Elliott of Morpeth, L.

Nugent of Guildford, L.

Elton, L.

Orr-Ewing, L.

Erroll of Hale, L.

Pender, L.

Fanshawe of Richmond, L.

Rodney, L.

Foley, L.

Rugby, L.

Gainford, L.

St. Aldwyn, E.

Gardner of Parkes, B.

Saint Brides, L.

Gisborough, L.

St. Davids, V.

Gray, L.

Savile, L.

Hailsham of Saint

Sempill, Ly.

Marylebone, L.

Shannon, E.

447

Skelmersdale, L.

Trumpington, B.

Stodart of Leaston, L.

Vaux of Harrowden, L.

Strathspey, L.

Vickers, B.

Sudeley, L.

Vinson, L.

Swinton, E. [Teller.]

Vivian, L.

Teynham, L.

Whitelaw, V.

Trefgarne, L.

Young, B.

NOT-CONTENTS

Amherst, E.

Lovell-Davis, L.

Annan, L.

McCarthy, L.

Attlee, E.

McNair, L.

Aylestone, L.

Meston, L.

Banks, L.

Milford, L.

Birk, B.

Mishcon, L.

Bruce of Donington, L.

Morton of Shuna, L.

Burton of Coventry, B.

Mulley, L.

Caradon, L.

Murray of Epping Forest, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Cledwyn of Penrhos, L.

Oram, L.

David, B. [Teller.]

Parry, L.

Dean of Beswick, L.

Phillips, B.

Denington, B.

Pitt of Hampstead, L.

Diamond, L.

Ponsonby of Shulbrede, L.

Elwyn-Jones, L.

[Teller.]

Ennals, L.

Rochester, L.

Falkender, B.

Sainsbury, L.

Fisher of Rednal, B.

Seear, B.

Gallacher, L.

Sefton of Garston, L.

Graham of Edmonton, L.

Serota, B.

Grey, E.

Shepherd, L.

Hanworth. V.

Silkin of Dulwich, L.

Hirshfield, L.

Simon, V.

Howie of Troon, L.

Stallard, L.

Hunt, L.

Stewart of Fulham, L.

Irving of Dartford, L.

Stoddart of Swindon, L.

Jeger, B.

Strabolgi, L.

Jenkins of Putney, L.

Tordoff, L.

John-Mackie, L.

Turner of Camden, B.

Kaldor, L.

Underhill, L.

Kilmarnock, L.

Wells-Pestell, L.

Kirkhill, L.

White, B.

Leatherland, L.

Williams of Elvel, L.

Listowel, E.

Willis, L.

Lloyd of Kilgerran, L.

Wilson of Rievaulx, L.

Lockwood, B.

Ypres, E.

Longford, E.

Resolved in the affirmative, and Clause 12 agreed to accordingly.
5.28 p.m.
Lord McCarthy Lord McCarthy moved Amendment No. 76:
After Clause 12, insert the following new clause:
(" Establishment of Wages Councils.
. —(1) The Secretary of State may by order establish a wages council to perform, in relation to the workers described in the order and their employers the functions specified in relation to wages councils in this Part of this Act.
(2) An order establising a wages council may be made by the Secretary' of State after either—

(a)a recommendation made to him by the Advisory Conciliation and Arbitration Service ("the Service"); or

(b)an application to him by a joint industrial council, conciliation board or other similar body constituted by organisations representative respectively of such workers and their employers; or

(c)an application to him jointly by any organisation of workers and any organisation of employers which appear to him habitually to take part in the settlement of remuneration and conditions of employment for those workers.

(3) In deciding whether to establish a wages council the Secretary' of State shall have regard to—

(a)the extent to which the existing machinery for the settlement of remuneration and conditions of employment for those workers is likely to cease to exist or is adequate for that purpose;

(b)the current levels of remuneration and the level of employment among those workers;

448

(c)the current levels of remuneration and the level of employment among workers in the same trade or industry who are under the age of 21; and

(d)Such other matters as appear to him to be appropriate. —and he shall consult such persons or organisations as appear to him to be appropriate.

(4) Where an organisation of workers or an organisation of employers notifies the Secretary of State that it is desirable to establish a wages council, he shall refer that notification to the Service which shall within six months report to him upon the desirability of so doing.").
The noble Lord said: In moving Amendment No. 76,1 want to take with it and to speak to Amendments Nos. 78 and 79. This amendment is designed to remedy a situation which is there as a result of the Bill, where, under Clause 13, the Secretary of State is taking a power to abolish or vary the scope of a wages council but, so far as we can see on our reading of the Bill, has no power to create a new one. This must be nonsense. It must be nonsense unless—and I am reluctant to assume that this is the case—the present Bill is a preparation, a dry run, for abolition and that what the Government are doing, because so many employers did not want to see the abolition of the wages council system, is to let the wages councils wither on the vine. If that is the case, then I consider that the Minister should say so tonight.
If that is not the case and if the Government believe that the attenuated wages council system should continue, then—while they may not like our amendment and our amendment may be badly drafted, though no doubt the Parliamentary draftsman could improve on it in many ways—if they like to give us some indication that they will take this away and look at the problem, naturally enough we shall be pleased to withdraw the amendment.
However, I must say just a little about what the amendment is designed to do and what it proposes should be the procedure for the creation of a new wages council, and why we believe it is particularly important that there should be a way of creating new wages councils, given what the contents of the Bill imply.
The procedure that we propose is to some extent a new one: that there should be a recommendation process and that the recommendation for the creation of a new wages council should be from bodies such as ACAS or any voluntary joint bargaining body, joint industrial council, a trade union or an employers association. All these people could recommend the possibility of a new wages council for a new category of workers who are unprotected by the dependent position of themselves in the market in relation to the employers.
There should then be an investigation process and the obvious people to do this, where the investigation does not come from ACAS, would be ACAS itself. There would be criteria, cited in the Bill, whereby you could decide whether there was a case for creating a new wages council. You would look at the state of the existing joint determination machinery and at the existing system for collective bargaining, if one existed. In many areas there might not be any system of collective bargaining. You would look at the levels of remuneration among adults affected by a new wages council. You would compare them, say, with the general earnings level, about which I shall have more

449
to say later; or you would look at the level of remuneration of young workers and see whether there was any indication that, in general terms, there was a case for a new wages council. Unless it is the Government's job to let the wages council system wither on the vine, as I say, I do not see why in principle they should not accept a move of this kind.
My second argument would be that it is particularly important to do this, given what is being done in the rest of the Bill and given what is being said about some of the reasons—admittedly subsidiary reasons—why wages councils should be dealt with in this way. Government spokesmen and their supporters on the other side are very fond of saying that they have to simplify the scope of wages councils because they are too complicated or too rigid and because small employers cannot understand the wages orders.
As I said on Second Reading, if wages councils orders are complex (and I wonder how many people in this Chamber have read such orders) they are complex for the most part because the wages council itself is trying to combine a whole series of things which might be better separated into different wages councils. So if one is saying they are too complex, too rigid and too general, it may be that what is required is a more tailor-made and specialised approach. But if there is no possibliity of creating new wages councils and if one can simply break up one wages council into two, three or four, but never extend it to fit into new groups, the chances are that the wages councils we have left will be felt by employers to be increasingly irrelevant, increasingly rigid and increasingly anomalous if the Government deny themselves any generous measure of reform. And without the possibility of new wages councils within the existing structure—for example, in a very large wages council like the Retail Wages Council—the insistence upon a single rigid rate must produce a very low minima, must squeeze out premium payments, overtime, differentials and that kind of thing, so far as the enactment of statutory regulation is concerned. On the other hand, within a system of a single rate which is itself rigid, to break up the wages councils and create new ones might be thought to be one way in which one might make the system more flexible.
Finally, of course we know that, in comparative terms, in this country we have a very bad minimum wage regulation system. It is not to the credit of previous governments that they did not reform this system. There are many low-paid workers, for example, in engineering or launderettes or in large parts of the public sector, who are low paid on any objective measurement and who are not covered by wages councils. Some people have calculated that about one-third of workers in the lowest decile of the earnings survey are not covered by wages councils, so we have what is very far from a perfect system. And if we are to put a lid on it and say that it is only to produce a single rate, only to decline and never to renew itself, spread itself or try to bring itself up to date, then indeed the Government will be creating the kind of rigidity which they say they want to remove. I beg to move.
Lord Trefgarne: As the Government have repeatedly made plain—and indeed I said this on
450
several occasions earlier this week when we were considering earlier parts of this Bill—we believe that the terms and conditions of employment are best left for agreement between employer and employee without statutory intervention. Where this results in difficulty—for instance, among workers who have heavy domestic responsibilities which are difficult to maintain on low pay—there is support such as family income supplement and, in due course, there will be the much improved family credit system. It must be abundantly clear that we do not see the extension of regulation as furthering our aims of promoting enterprise and employment. For this reason we are not prepared to extend the system by creating new councils. These arguments apply equally to all the circumstances specified in the amendments which we are addressing in this group.
The continuation of the existing wages council system rests on the outcome of the consultative exercise we conducted in March last year. This indicated a preference among employers and unions in most of the trades concerned where there is a history of this form of trade regulation for the system to continue.
The majority of employers favoured the reforms proposed in the consultative paper, which are reflected in Part II of the Bill. It is of major importance to everyone concerned that we simplify procedures in connection with wages councils, including the way we deal with changes which become necessary in the scope of operation of wages councils. At present the Secretary of State may refer to ACAS for a report before making an order to abolish or to vary the scope of operation of a wages council. This is part of a complex and convoluted procedure (which, incidentally, took three pages of type to describe in summary) which we intend to avoid in the new legislation. However, the Bill provides for the Secretary of State to confer with such organisations as appear to him to be appropriate. Therefore he may continue to refer to ACAS as at present if he considers it appropriate to do so.
Amendment No. 78, which would require reference to ACAS before an order could be made to abolish or vary the scope of operation of a wages council, would defeat the purpose of the revised procedures which are intended to simplify the processes of abolition and variation of scope when these are appropriate.
The requirements the Secretary of State must observe before making an order, as set out in Clause 13, are substantial and do not allow him to use his powers capriciously. They rely on a commonsense interpretation of the circumstances of each case which comes up for consideration. They do not preclude consultation with ACAS, if that would be helpful. The best protection for the workers who are affected is that orders abolishing wages councils, made under the new legislation, which do not transfer any of the workers concerned to another council, would require approval by affirmative resolution of both Houses of Parliament. The requirement proposed by the amendment is therefore superfluous and I hope the noble Lord will not persist with it.
Lord McCarthy: The noble Lord the Minister says that these things are best left to the employer and the

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employee, even when the employee is in a dependent situation without a trade union in which all the power in effect in the labour market is with the employer. As I say, the Minister says that these things are best left to the employer and the employee. Of course, I do not expect him to say that they are best left to the employer and the trade union. That is the last thing that this Government would say. It is a mystery—but perhaps it is just a question of time—why we do not get rid of the Factories Acts, because that is best left to the employer and the employee. It is a mystery—but perhaps it is just a question of time—why we do not get rid of unfair dismissal, because that is best left to the employer and the employee. Even this Government, at this moment, believe that some things are not best left to the employer and the employee, but every time they want to get rid of something they trot out this argument.
The Minister says that people can use family income supplement and social security. He says that they can go to the DHSS when they cannot get decent pay. This Government cannot see the difference between pay which you put into your pocket and spend as you like, and dole for which you go round to the social security. If people are getting starvation wages it does not matter, says the Minister, they can always go on the dole. We think that this is disgraceful.
If the Government are saying that they want simplicity but go on to perpetuate complexity, we can come to only one conclusion—the conclusion that I sought to avoid in moving this amendment. This Bill is a precursor to the withering away of wages councils. Because of the degree of resistance by employers, we cannot have that just yet. But that is what the Government want. Because of the time, and because of the number of amendments still to come, I must now beg leave to withdraw the amendment. But that should not be seen as meaning that we agree with the Government.
Amendment, by leave, withdrawn.
[Amendment No. 77 not moved.]
Schedule 2 [Constitution etc. of wages councils]:
Lord Trefgame Lord Trefgame moved Amendment No. 77A:
Page 34, line 26, leave out ("3") and insert ("5").
The noble Lord said: This amendment will enable the Secretary of State to appoint up to five independent members to sit on a wages council instead of a maximum of three as at present. This does not of course mean that the Secretary of State is going to rush to appoint five independent members on each council. Three members may well continue to be adequate for many councils, especially the smaller ones. The purpose of the amendment is simply to make it easier to achieve a reasonable degree of attendance of independent members on councils, where this has sometimes proved difficult in the past with only three members to draw on.
I am sorry that this amendment appeared on the Marshalled list rather late. The amendment is in response to representations from many of those involved in the work of wages councils and we did not envisage that it was in any way controversial. I hope,
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nonetheless, that the Committee will feel able to agree to it. I beg to move.
Lord McCarthy: I have three points to make about this late amendment, but first—and I do not like doing this—I must protest at the lack of notice that we have had not only in relation to this amendment, which is the first new amendment that we have had to protest about, but also in relation to the other late amendments which the Government have put down. In some ways the case against the lateness is worse on this amendment, because I think I am right in saying that this is the first time in my period in the Committee—but other Members go back much longer than me—that an amendment has been printed not as an amendment but in a Marshalled List; and not even in the first Marshalled List, but in the second Marshalled List. This amendment first appeared in the second Marshalled List this morning. I think that that is something to complain about. The advantage is that it is at least a simple amendment.
That brings me to my second objection. The amendment is contrary to what the Government led us to expect. Far from what the Minister said about people suggesting it to the Government, and people sayng that they would like to have the numbers of independent members of wages councils expanded, I do not remember the Secretary of State in this Chamber, or the Minister responsible in another House, mentioning that on Second Reading. If that had come about in the consultative process, surely it would have been reasonable to expect something to be said at Second Reading. Indeed, it might have been introduced in another place if it had come out of the consultative process.
I do not believe that it came out of the consultative process. I believe that it came out of Standing Committee K. If Members of the Committee read the report of the 18th sitting of Standing Committee K in another place of Tuesday, 15th April, they will see that the Conservative Back-Benchers were complaining at that stage about the composition of the present wages councils. Many nasty things were said at that stage about the mixture of lawyers, academics and businessmen, with the very occasional trade unionist, who now operate wages council systems at the princely rate of £64 a day; and, if they read the papers and participate in the decisions, that works out at about £5 an hour.
Many nasty things were said about those distinguished people and Conservative Back-Benchers moved a number of amendments. They wanted to insist that certain people who are employed and sit on many wages councils, such as the distinguished arbitrator, Sir John Wood, should only be allowed to serve on one wages council. They wanted to say, in all kinds of ways, that there should be a restriction on the extent to which people could work on one wages council or another. They wanted to say that these people should have practical experience of business. They wanted to say that they should be small businessmen—the smaller the better. They wanted to ensure that if there were any who were not small businessmen, they should have practical experience of small businessmen's problems.

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Mr. Trippier, for the Government, in Standing Committee K rejected all these proposals and he rejected them on various grounds. The ground on which he rejected them which is of most concern to us is at col. 604 of the Official Report of 15th April for Standing Committee K. He said:
"We have difficulty in finding people who are prepared to devote time to the wages councils".
Now they are going to have to find more. He went on:
"It is not easy to get such people whatever the fees may be".
They are £64 a day—
"They are still only a drop in the ocean".
Then he went on, almost as if he knew what the Minister was going to say today and wished to contradict him. He said at col. 605:
"We have received few letters about the composition of wages councils".
He was obviously referring to the consultative process.
"There does not seem to be dissatisfaction with their composition. That in itself is compelling".
On 15th April it was compelling, but it is not compelling today. He went on:
"I wish to see independence".
The Government do not necessarily wish to see independence any more. I suppose that they wish to pack the wages councils with their friends. I suppose we must assume that, in addition to the present three members of the wages councils, they will be asked, "Can we have two people, each one of which is one of us?", and they will pack the wages councils. Otherwise there would appear to be no reason why at this late stage we have this amendment without consultation.
The CBI knew nothing of this change, the TUC knew nothing of this change and ACAS knew nothing of this change. This change was never mentioned until this amendment was published today. So it is not enough to take young people out; it is not enough to abolish holiday minimums; it is not enough to direct them to beware of creating unemployment; we must also tamper, in a most suspicious and devious way, with those who sit on wages councils. We oppose this amendment.
Lord Rochester: I feel that I must join the noble Lord, Lord McCarthy, in registering a protest about the tabling of this amendment. As he fairly said, it was available to us only this morning. The noble Lord, Lord Trefgarne, has apologised for that and he has explained why it is that the amendment has been put down. The concept lying behind this was not available to us when the Bill was debated in principle at Second Reading, as the noble Lord, Lord McCarthy, has said. There has been no consultation about it. What is now said—and I, too, have in my hand the minutes of the relevant Standing Committee—appears to be at variance with what the Under-Secretary of State said on that occasion. It is unfortunate, to say the least, that we are required to take a decision on this today at such short notice.
Lord Trefgarne: I am very sorry that the noble Lord, Lord Rochester, takes that view. One would think that I was proposing some cataclysmic change to the arrangements. What I am actually proposing is that the independent members be increased from three to
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five, because out of the three there are at present some of them have occasionally had difficulty in attending all the meetings of the council and we wish to ensure that they are not put to undue inconvenience.
This proposal did not arise out of Standing Committee K. The inspiration for it came from employers in the retail trade with, we understand, the support of the workers' side of the council. The noble Lord, Lord McCarthy, may not be aware of that. But in the light of the modest and sensible nature of the amendment, I hope the Committee will agree to it.
Lord Sainsbury: I heard a different version. I heard a version from the retail trade body that it wanted five because the existing three so often sided with the workers.
Lord McCarthy: I have heard that story, too. We can all retail stories. What is remarkable is the way the Minister keeps changing his reasons. I must congratulate him. He now says—he did not say it before—that they are doing it because people do not turn up. If people do not turn up, you sack them. It is only £64 a day. You would not be sacking them from anything they would not want to be sacked from.
If wages councils have meetings and they cannot get quorums and there are people who do not attend at stated meetings of wages councils, then you should just say to them, "I am afraid we cannot continue because you do not attend". You do not get more people who also may not attend; you get people who can attend, and you let people know that one of the conditions of membership of a wages council is that you do attend. I say quite frankly that I do not believe the Minister when he says they do not attend. This is just the latest excuse, and we are not having it. We are going to divide.
5.53 p.m.
On Question, Whether the said amendment (No. 77A) shall be agreed to?
Their Lordships Divided: Contents, 91; Not-Contents, 71.

DIVISION NO.4

CONTENTS

Airey of Abingdon, B.

Dilhorne, V.

Aldington, L.

Eccles, V.

Auckland, L.

Elliot of Harwood, B.

Belhaven and Stenton, L.

Elton, L.

Beloff, L.

Erroll of Hale, L.

Belstead, L.

Fanshawe of Richmond, L.

Boyd-Carpenter, L.

Foley, L.

Brabazon of Tara, L.

Gainford, L.

Braye, B.

Gardner of Parkes, B.

Brookes, L.

Gisborough, L.

Brougham and Vaux, L.

Gray, L.

Broxbourne, L.

Hailsham of Saint

Caithness, E.

Marylebone, L.

Cameron of Lochbroom, L.

Halsbury, E.

Carnock, L.

Hardinge of Penshurst, L.

Colwyn, L.

Hives, L.

Craigavon, V.

Home of the Hirsel, L.

Craigmyle, L.

Hooper, B.

Cullen of Ashbourne, L.

Hylton-Foster, B.

Davidson, V.

Kinnaird, L.

De La Warr, E.

Lane-Fox, B.

Denham, L. [Teller.]

Lauderdale, E.

455

Lawrence, L.

Pender, L.

Layton, L.

Rodney, L.

Long, V.

Rugby, L.

Lucas of Chilworth, L.

St. Aldwyn, E.

Lyell, L.

Saint Brides, L.

McFadzean, L.

Saint Oswald, L.

Macleod of Borve, B.

Savile, L.

Malmesbury, E.

Seebohm, L.

Mancroft, L.

Sempill, Ly.

Marshall of Leeds, L.

Shannon, E.

Massereene and Ferrard, V.

Skelmersdale, L.

Maude of Stratford-upon-

Stodart of Leaston, L.

Avon, L.

Sudeley, L.

Molson, L.

Swinton, E. [Teller.]

Monk Bretton, L.

Teviot, L.

Monson, L.

Teynham, L.

Montagu of Beaulieu, L.

Trefgarne, L.

Montgomery of Alamein, V.

Trumpington, B.

Mottistone, L.

Vaux of Harrowden, L.

Munster, E.

Vickers, B.

Murton of Lindisfarne, L.

Vinson, L.

Norfolk, D.

Vivian, L.

Norrie, L.

Young, B.

Nugent of Guildford, L.

Zouche of Haryngworth, L.

Orkney, E.

NOT-CONTENTS

Airedale, L.

Lovell-Davis, L.

Amherst, E.

McCarthy, L.

Attlee, E.

McGregor of Durris, L.

Aylestone, L.

McIntosh of Haringey, L.

Birk, B.

McNair, L.

Bruce of Donington, L.

Meston, L.

Caradon, L.

Mishcon, L.

Carmichael of Kelvingrove, L.

Morton of Shuna, L.

Cledwyn of Penrhos, L.

Mulley, L.

David, B. [Teller.]

Nicol, B.

Dean of Beswick, L.

Oram, L.

Denington, B.

Parry, L.

Diamond, L.

Phillips, B.

Elwyn-Jones, L.

Pitt of Hampstead, L.

Ennals, L.

Ponsonby of Shulbrede, L.

Falkender, B.

[Teller.]

Fisher of Rednal, B.

Rochester, L.

Foot, L.

Sainsbury, L.

Gallacher, L.

Seear, B.

Graham of Edmonton, L.

Sefton of Garston, L.

Gregson, L.

Serota, B.

Grey, E.

Shepherd, L.

Hanworth, V.

Silkin of Dulwich, L.

Hatch of Lusby, L.

Simon, V.

Houghton of Sowerby, L.

Stallard, L.

Howie of Troon, L.

Stewart of Fulham, L.

Hunt, L.

Stoddart of Swindon, L.

Irving of Dartford, L.

Strabolgi, L.

Jenkins of Putney, L.

Tordoff, L.

John-Mackie, L.

Turner of Camden, B.

Kaldor, L.

Underhill, L.

Kirkhill, L.

Wells-Pestell, L.

Listowel, E.

White, B.

Lloyd of Kilgerran, L.

Williams of Elvel, L.

Lockwood, B.

Willis, L.

Longford, E.

Wilson of Rievaulx, L.

Resolved in the affirmative, and amendment agreed to accordingly.
Schedule 2, as amended, agreed to.
6.2 p.m.
Clause 13 [Abolition, or variation of scope of operation, of wages councils]:
[Amendments Nos. 78 and 79 not moved.]
Clause 13 agreed to.
[Amendment No. 80 not moved.]
Clause 14 [Wages orders]:
Lord McCarthy Lord McCarthy moved Amendment No. 81:
Page 15, line 34, at end insert—
("and such separate rates for different occupations as appear appropriate to the council").
The noble Lord said: In Clause 14, we are moving a series of amendments, each one of which is designed to put back into the Bill something that has been taken out by the Government, thus reducing the scope of wages councils' awards in relation to what they were under the 1979 legislation. The first amendment is to insert at the end of line 34 on page 15 the words:
"and such separate rates for different occupations as appear appropriate to the council".
In other words, the Government are now saying that there should be one single basic rate and that one cannot have rates for different occupations. We are suggesting that one should do so, and that would be the effect of voting for this amendment. The justification is that it is necessary and sensible to have different rates for clearly-defined occupations and not a cause of complexity or rigidity. The justification is that the wages councils know their job; whether or not they all attend, they know their job. Indeed, in the case of most wages councils, so far as I can tell—and I do not claim to have inspected the awards of all wages councils but I have examined quite a few—there are not different occupational rates.
There are no different occupational rates that I can see in laundries, hairdressing, toy manufacture, in the button wages council, in the hat and cap wages council, or in my favourite wages council—and it is my favourite because I do not know what it does—which is the sack and bag. They do not have separate occupational variations in the sack and bag wages council; they do without them in sack and bag.
In cases where there are occupational variations, those variations are simple. They are divided into two. There is an interesting differentiation in the licensed non-residential trade. There is a rate for club stewards and a rate for the club steward's spouse. That seems to be a reasonable differential, and it appears to represent a reasonable difference in the rate, because the function and job of a club steward is quite different from that of the club steward's spouse.
In boot and shoe they have a variation. They have a rate for foremen and managers and a rate for all other workers, because in boot and shoe they wish to improve the differentials; they want a decent rate for managers and they believe that in that way they will attract better people into the industry.
The most complex of all is in retail food. It is not really a vast and complex differential, and it should not cause difficulty to anybody who is in the industry. There are effectively only three different rates. There is the manager's rate, a street vendor's rate, and a number of other rates that are extremely close together—for general assistants, transport workers, roundsmen, and so on.
All of that is related to the need to have reasonable differentials. It is related to the requirements of the employers and the unions in those industries. There is no indication or sign, and certainly the Government have never argued, that one or another of those

457
differentials—for example, that between the club steward and the club steward's spouse—is misused, prices people out of work, or provokes one of the Government's other famous myths.
Therefore, why should those differentials not remain? Why should there not be those distinctions? If they have stood the test of time among the parties and independent members who introduced them for what seemed to them to be valid reasons, then why should they not remain? The Government may say—I suppose because it is the only argument they could cobble together—that it should be left to the parties concerned, to the employers and the employees, and that it can all be done by voluntary regulation. Once again, we say what we have said repeatedly in this Chamber: that in those industries, and for those workers, voluntary regulation is not enough. It will not protect differentials. It will not protect the manager's rate. It will not protect the reasonable differences between general assistants, transport workers, street vendors and roundsmen. Those differentials have been decided by the parties concerned and there are good reasons for them. We propose that that provision should go back into the Bill. I beg to move.
Lord Trefgarne: Current wage orders are lengthy and complex and, despite what the noble Lord has said, they tend to deal with all pay and related conditions of employment. Employers and workers can have great difficulty in interpreting them. Responses to the consultative papers show almost universal support for simplifying wages orders.
Pay differentials for different grades of worker imposed by orders can be expensive and can deter employers from providing jobs. In future, there will be only one minimum basic rate and one minimum overtime rate for workers undertaking different types of work. The Bill does not remove workers' rights to differential pay rates. The majority of workers are likely to continue to be entitled to their current rates under the terms of their contracts of employment. Limiting councils to setting a single basic and overtime rate is central to the Government's policy of reform.
If the amendment were carried it would undo one of the prime objectives of the Bill; that is, releasing employers from unnecessary burdens and enabling them to give more time to running their businesses. I hope that the Committee will reject the amendment.
Lord McCarthy: The noble Lord is better than he was; his response is better than saying that people do not attend wages councils, but still it will not do. Wages councils' orders are not all lengthy and complex. Most are very short and are only a few pages long. In the case of orders that are lengthy, one does not have to read all of them because they are the same year after year after year. You need only read the parts where the rates change. Sometimes the orders are in different colours. The Government would be doing something much more useful if they said that the orders ought to be in different colours; then even the smallest or dwarfest of businessmen could understand a wages council order.
The Minister does not give any reasons why people should not be doing what they have been doing for years—an argument which has always been useful for
458
previous Conservative governments. We cannot agree with the noble Lord, but we do not intend to divide the Committee. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Rochester Lord Rochester moved Amendment No. 82:
Page 15, line 41, after ("(ii)") insert ("save as provided below").
The noble Lord said: This is a paving amendment to Amendment No. 84 which, as the Committee will see, seeks to insert in this part of the Bill a provision for a single minimum hourly overtime rate of remuneration in respect of time worked on a Sunday.
I should first say that in proposing this amendment, designed to enable a wages council to make an order fixing a single rate for work done on a Sunday, it is not my intention to minimise the importance of other amendments which are to follow dealing with, for example, annual holidays. Indeed, much of what I have to say on this amendment could equally be applied to others. It may cheer the Committee a little to learn, therefore, that I shall not be constantly rising to my feet to say much the same thing time after time.
In view of our recent discussions on the Shops Bill it seems appropriate to draw special attention to the need for Sunday working to be adequately rewarded. For a long time I worked in the chemical industry where it was necessary to have a continuous process of work. However, there were elaborate shift rotas designed to ensure that people were not obliged to work on more than one Sunday in three or four. What is more, they were protected by strong unions, as I know from experience in having had to deal with them in these matters. Invariably, the people concerned were paid at the double-time rate when they worked on a Sunday.
The position of people who work, for example, in the clothing, hotel and catering industries, on the other hand, is quite different. They are largely unorganised. They depend on wages councils for protection and, in the case of retail workers, on the Shops Act. Of course, Clause 14 of the Bill—the clause we are now discussing—was drafted in the expectation that the Shops Bill would be enacted. The employment and conditions of shop workers would then have been even worse than they now will be. It was intended that the two Bills should run together. Events did not work out quite like that in practice, but that does not help the people—many of them women working part-time who have family responsibilities—who will be affected by this Bill. If they work on a Sunday, that will not necessarily be because they want to do so, but because they need a job and have to work.
I know that people who are currently employed under a contract incorporating the terms of existing wages orders can expect their employment to continue on that basis unless the terms of their contract are changed by agreement; indeed, the noble Lord, Lord Trefgarne, said as much on the previous amendment. I know, too, that if an employer seeks to change the terms of an employment contract unilaterally, remedies are available to the worker, in theory; but under present conditions of unemployment it must be very doubtful as to how far they will be utilised in practice.
However, in my view that is beside the point. We are legislating for the future. People who work on a Sunday should be adequately paid for so doing. That is what this amendment is designed to achieve. I beg to move.
6.15 p.m.
Lord Sainsbury: I support this amendment because I believe that workers who work unsocial hours on Sunday, which may keep them away from enjoying the company of their families, are entitled to a special rate. I understand that in Scotland where, as the Committee know, Sunday trading is not against the law, under existing wages council legislation retail employees who work on a Sunday as an additional day are paid double time.
Baroness Turner of Camden: I rise from these Benches to support both amendments of the noble Lord, Lord Rochester. As he rightly says, the principle of higher rates for antisocial hours or for an awkward shift pattern is one that has been accepted for a long time throughout industry. In many places, of course, the workers are covered by union-negotiated agreements. It is accepted that if people work these hours, they should have a premium rate for doing so.
The Government proposals in the Bill, however, would remove such entitlement for many of the lowest paid. As we have said many times in this Committee during discussion of the Bill, we are talking about vulnerable people who are, generally speaking, not unionised. In industries such as the hotel and catering trades, as the noble Lord, Lord Rochester, said, the very nature of the trade requires antisocial hours and shift patterns of working. As the Committee knows, we had a discussion about this on the Shops Bill and despite the fact that the Bill was not enacted there is still the situation in many places where there is Sunday working for people in the retail trade. It does exist. For those reasons it seems to us that it would not be appropriate to remove from such people the right to some kind of premium arrangement in regard to antisocial hours, particularly for Sunday working.
Paradoxically, it seems to me that the removal of the right to shift premia and the reduction of overtime provisions could have a directly negative effect on the number of jobs available, with employers being encouraged to rely on job cover, through long and exploitive hours, with existing staff rather than with realistic staffing levels by offering work to other people who are available. For all those reasons we support the amendments tabled by the noble Lord, Lord Rochester.
Lord Trefgarne: I have listened carefully to the arguments which have been adduced in support of these amendments which would, as has been explained, have the effect of maintaining the power of wages councils to set special higher minimum rates for work done on Sundays. However, I am afraid that I have heard nothing to persuade me that a departure from the course on which we are set would be justified.
The Bill already recognises the claims of those who have already worked a full week for some special higher payment for work done beyond their normal
460
hours. These amendments would restore the power of councils to provide for extra payment simply because the work is done on a particular day of the week. It would mean that even those who work only on Sundays would also be entitled to a higher rate.
This Bill is about a basic level of protection. That is what the employers in the trades concerned wanted us to retain. Very few of the respondents who replied to our consultative exercise were prepared to countenance more than that. Ministers have frequently received complaints about the levels of pay which councils such as the retail councils have set as minima for Sunday work. At least double pay is required for the great majority of Sunday workers in these trades and the rules are such that a worker who attends even for only one hour on a Sunday must be paid for nine hours.
It is no part of our policy to support such dubious propositions in this way. We have no mandate from employers responding to our consultative paper to do more than provide a minimum level of protection. That is what the Bill does and I hope that the Committee will reject the amendment.
Lord Rochester: I did not really expect to hear anything else from the noble Lord, so I can hardly claim to be disappointed. If I may respectfully say so, I thought that part of his brief was scarcely relevant to the amendment. However, it is only one of a series under Clause 14 that we are now debating. I do not want to be constantly driving members of the Committee in and out of the Division Lobbies. If we are to have a vote it may be that it would be better to take it under the Question whether Clause 14 should stand part of the Bill; but that procedure should not be taken as an indication of satisfaction with the Government's response. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 83 and 84 not moved.]
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 85:
Page 15, line 43, at end insert—
(" ( ) a single minimum hourly rate of remuneration in respect of time worked by a piece worker (to be known as a piece work basic time rate; ").
The noble Baroness said: In moving this amendment I should like to speak also to Amendment No. 98, because both amendments cover the same point. These amendments seek to ensure that piece-rate wage systems cannot be used to undermine that statutory minimum rates. The first amendment allows wages councils to continue to set higher piece-work rates, as is the long-standing practice in the clothing and made-up textile sectors. The second amendment states that no piece worker shall be allowed to fall below the minimum time rate set by the relevant wages councils. Again, this is the current protection in the clothing and made-up textile sectors.
It seems to me that the Bill, as at present drafted, provides a weaker form of minimum wage protection for piece workers than it does for those on time rates. Instead of using the time rate as a floor above which employers and employees are free to negotiate piece-work rates, as is the current practice in wages council

461
industries where piece work is important, the Bill will mean that many piece workers will fall behind the minimum rate. This is because, while Clause 15(2) brings piece-work earnings into line with time rates, this is only the case in relation to a hypothetical ordinary worker, who is referred to in the clause as "a worker of ordinary competence".
In our view, this provision will have two damaging effects. First of all, it will introduce unnecessary legalism into the wages council system. The notion of an ordinary worker is subjective and will inevitably be the basis of dispute. It will open the door for piece-work structures to be set at levels that will undermine the time rate, thus driving a coach and horses through the legal minimum protection. The ordinary worker concept will enevitably be applied to the average worker and so large numbers of people will be paid below the minimum rate.
The wages council sectors where piece-rate working is most common are the clothing and made-up textile industries. In both these sectors the ordinary worker notion is incorporated in the wages council order, but within a structure of rates that allows for a higher minimum piece-work basis time rate than the general time rate. Thus the minimum earnings yardstick for an ordinary piece worker under the wages councils at present is higher than for time workers, thereby minimising the danger that significant numbers of workers will fall below the minimum hourly rate of pay. Even so, the problems outlined in respect of the use of the ordinary worker concept have still emerged and as a result the wages councils for clothing and made-up textiles have both ruled that no piece worker should fall below the minimum time rate. It is with a view to continuing to have that protection that we are moving these two amendments. I beg to move.
Lord Trefgarne: I had hoped that by now I would have been able to assure the Committee that we were not seeking to abandon piece workers to their fate. I think that the noble Baroness would have us introduce a universal fallback rate for piece workers in terms of a minimum earnings limit. Were we to do so, we should be extending protection beyond the basic protection which this Bill seeks to provide. I do not believe that we should depart from this fundamental principle. The consequences could be serious in terms of opportunities for employment.
The degree and nature of the protection that we have retained for this group essentially reflects that which has obtained for many years. We have adopted in the primary legislation the concept of the ordinary worker which has been used by the wages councils themselves over many years. We do not claim that the concept is perfect. But we have not come up with a better way of seeking to protect their interests. Had there been one, I am sure the councils themselves would have found and developed it. I must say to the Committee that despite anxieties the concept has proved workable, and by and large experience has shown piece workers to be less vulnerable to statutory underpayment than those employed on time rates.
I believe that the mischief which the noble Baroness seeks to correct by means of this amendment is largely imaginary. I hope that she will not press the amendment.
Baroness Turner of Camden: I am disappointed to hear what the noble Lord has said because it seemed to me that he was agreeing with me that there was or could be a problem about piece workers, and of course the amendment seeks to ensure that those workers will be adequately protected. The two Amendments, Nos. 85 and 98, seemed to be a very simple and easy way of doing that. However, at this stage I shall not press the amendment. I shall look carefully at the noble Lord's reply in Hansard and I may come back to this point at Report stage. For the time being I shall not press the amendment.
Amendment, by leave, withdrawn.
Lord Trefgarne Lord Trefgarne moved Amendment No. 85A:
Page 16, line 1, leave out ("section 17(4)") and insert ("section (Computation of remuneration) (2)(a) and (3)(a)").
The noble Lord said: I rise to move Amendment No. 85A and with the Committee's permission I shall at the same time speak to Amendments Nos. 99 A and 100A. I should also like to speak to the Motion that Clause 17 stand part of the Bill, which, the Committee may be surprised to hear, I shall oppose because we intend to suggest an alternative.
These two new clauses replace Clause 17 and subsections (3) and (4) of Clause 25 of the Bill, which deal with the calculation of the amount the employer has paid the worker and how that sum is to be apportioned where a worker's employment is not wholly in scope of a wages council. Some expansion of the Bill has resulted—we now have an extra clause—and I concede that the drafting appears complex, but our objective is to ensure that the amount the employer has paid to the worker can be fairly and properly assessed in all circumstances, for the purpose of comparison with the remuneration due under the relevant wages order or orders, in order to ensure that the legal entitlement has been paid to the worker.
In the great majority of cases there will be no difficulty in judging how much the employer has paid for work done—it will be the gross pay that the worker has received—but it is necessary for the Bill to be clear in circumstances where doubt may arise. It may help the Committee if I begin by setting out briefly the principles on which the clauses are based and then explain the steps by which those principles are brought into play.
First, as I am sure all sides of the Committee recognise, the amount to be taken as paid has necessarily to include deductions of various kinds, the obvious ones being tax and national insurance. We all know that a salary of £5,000 per annum does not mean that £5,000 is paid over. The bill does not spell out all the deductions which it would be appropriate to count as pay, but starts from the opposite position; in other words, it specifies those which are not to count for the purposes of assessing the remuneration the employer has paid.
Secondly, it is obviously appropriate that expenditure which the worker must necessarily incur in order to do this work should not count as part of the remuneration paid to him. The new clause makes it plain that that principle applies regardless of whether the expenditure takes the form of a payment to the

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employer himself or of a payment to a third party. In doing so it meets a criticism levelled by the Opposition in another place.
The new clause embraces these principles in setting out a series of logical steps which involve adding together the money payments the employer has made and the allowable deductions and then removing from that aggregate any necessary expenditure the worker has incurred. It also provides for the further deduction from that aggregate of any payments made by the worker to the employer and which need to be taken into account in computing the amount to be regarded as paid. For example, if the employer has charged the worker more for living accommodation than the amount allowed by the wages order, it is right that the excess should be deducted from the aggregate.
The new clause rounds off the provisions of the other clause by specifying what is to happen where a worker's employment is only partly within scope of a wages order or within scope of more than one such order. Essentially this is a matter of apportioning the remuneration calculated as paid between the in-scope and out-of-scope work. The apportionment is to be made according to the proportion of time spent on work of each type unless the contract provides otherwise. In the event that any element of the remuneration is attributable wholly to work of one type the calculation of the apportionment has to take account of that fact.
These amendments improve the present terms of the Bill by clarifying its intentions and I commend them to the Committee. I beg to move.
6.30 p.m.
Lord McCarthy: The Committee will not be surprised to hear that I have not yet understood the clause and the amendments. What is surprising is that my noble friend Lord Wedderburn of Charlton, who is unfortunately not in his place, tells me that he has not yet understood them. They are extraordinarily complicated. I can say without fear of contradiction that we are frequently told that Sir Humphrey Appleton is in the House and that he has done this, that or the other. Sir Humphrey was not responsible for this. He would have done it much more simply. In fact, he might have done it much in the way that the Minister did it: money plus justifiable deductions and payments minus unjustifiable deductions and payments equals minimum pay entitlement. Had it been done like that, we might have known where we are, but what we have is a formula.
I should ask the Minister whether I have the correct formula if I thought that he could understand it. I make it:
la + lb (-2a and 2b + 4abc) - li = pay.
I do not know whether that is right. I do not claim to understand it and I do not believe that the Minister understands it. I do not even believe that the parliamentary draftsman is sure. But if la + lb, and so on, is correct, certain things about the formula give us cause for concern.
We shall come back to this on Report when we have understood it. It cannot defy all understanding if one works long enough. But at this level of our comprehen-
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sion several things worry us. The provision seems to us to some extent to go against what Mr. Trippier in another place wrote to the general secretary of the tailor and garment workers union about necessary expenses. It seems somewhat narrower. It seems to go against what the same Minister told Miss Short at col. 788 on 14th May about the ability to challenge illegal underpayment in industrial tribunals.
As a result of leaving in subsection (4)(a), (b), (c) and (d), it seems to be allowing for a certain species of truck. I do not believe that the Government want to bring truck back in while they are abandoning the Truck Acts. They say that they do not.
We are worried, for example, about subsection (4)(c):
"any goods or services supplied by the employer (whether in connection with the worker's employment or not)".
If that can be allowed as part of pay, we see that as a sign of truck. Similarly, subsection 4(a) states:
"any conduct of the worker or any other event in respect of which he (whether together with any other workers or not) has any contractual liability".
That seems to bring fines in again and to bring fines in whether or not it is in the contract. The Government told us throughout Part I of the Bill—and we accepted it as being right—that it was not their intention to go beyond contract. They would not put reasonability in but they put contract in, and you could not make a deduction without it being in the contract.
I could go on. On the present level of our understanding there are certain things about this series of amendments which bother us. That is why we put down our amendment. I thought that the Minister was to speak to that, too. I am in fact speaking to our Amendment, No. 99B, which was drafted in the early stages of our misapprehension of the clause, late in the night, when we thought that probably the main thing wrong with it was subsection (4)(b) and if we could get the reference to truck out, we could say that the amendment was fair. But it seems much more complicated and difficult than that.
I ask the Minister whether he can comment on the objections that I have so far raised. But we shall have to look at this again and come back to it on Report.
Lord Rochester: I cannot add much to the sum of the knowledge of the Committee. I do not understand this provision either. The Minister gave every indication that he did, but I am not quite sure about that. In my case I think that it has to do with, in part, the complexity of the amendment and in part no doubt with my slow wittedness. But it seems to me important that we should have an opportunity to study closely what the Minister has said and will again be saying in a moment, read it in Hansard, and have the facility to come back on Report when perhaps we can discuss it a bit more sensibly.
Baroness Seear: Since we are repeatedly told that wages councils are manned by men and women with many other occupations and who are certainly not lawyers, does the Minister agree that they should attempt to draft provisions in language which is reasonably comprehensible to reasonably ordinary people?
Baroness Phillips: Can the Minister explain a small point of procedure? Did 1 get it wrong? He said that he would be moving that the clause did not stand part of the Bill. What is the point in discussing the amendment and making a decision on it if he is to move that the clause does not stand part of the Bill anyway? It is an unusual procedure. I have never seen it before in all my years in the Chamber.
Lord Trefgarne: I hope that I did not inadvertently mislead the Committee. I am seeking to put a new provision into the Bill to replace an old one. Having persuaded the Committee, if I can, to agree to the new provision, I shall not want to insist on the old one staying in the Bill.
In replying to the noble Lord, Lord McCarthy, I at once confess that this is not straight forward. I am sorry if I did not explain it carefully. The noble Lord's amendment is an amendment to my amendment. Subsection (4)(c) of the new clause in Amendment No. 99A provides that where an employer supplies goods or services to a worker, the amount paid for them, whether by deduction from wages or paid by the worker to the employer, is not to be treated under subsections {2)(b) or (3)(b) as an amount retained by the employer for his own use and benefit. The amount deducted or paid has therefore to be included as remuneration paid. The practical effect of that is that if a worker buys groceries from his employer, the payment made for them is solely a matter between the employer and the worker. The transaction cannot in itself lead to the worker being paid less than the statutory minimum.
If subsection (4)(c) were left out, as proposed by Amendment 99B, the effect would be that an employer could not charge a worker for goods or services supplied if by doing so the worker's remuner-ation fell below the statutory minimum due. I am sure that such a provision is not one which the noble Lord would wish to see part of the Bill. I hope that he will not persist with it. If the Committee were willing to agree to the amendment that I propose, and the noble Lord, Lord McCarthy, were willing not to move or to withdraw his, we could return to this matter at a later stage of the Bill.
Lord McCarthy: I cannot quite follow what the noble Lord said. Surely in that situation the employer would be able to ask for payment for anything he has supplied. If the worker agreed that that payment should be made in the form of a deduction, that would not be illegal. It would be wrong to do that whether or not the worker agreed and then to say "You have your minimum". That would be wrong, but let us not go into that.
I meant to ask the Minister earlier whether he would undertake to give us some further information about the meaning of this clause. After all, the Government were good enough to issue Notes on Clauses which were extremely useful in finding our way through the Bill. There were no notes on this clause; there was merely the clause. Will he consider issuing Notes on Clauses on this clause?
Lord Trefgarne: I am very willing. Perhaps I may do that by writing to the noble Lord and giving him
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further clarification of the clause. There were more points that I should have wished to make, particularly on the point that he raised just now about the need to ensure that we are not returning to the provisions of the old Truck Acts.
Lord McCarthy: It is one thing to write to me, but many other Members of the Committee are interested in the clause and I think it should be published.
Lord Trefgarne: I should be happy to place a copy of that letter in the Library.
On Question, amendment agreed to.
[Amendment No, 86 not moved. ]
Lord McCarthy Lord McCarthy moved Amendment No. 87:
Page 16, line 9, at end insert—
("( ) fixing a minimum period of annual holidays and the minimum remuneration payable during such holidays".).
The noble Lord said: The amendment brings back annual holidays and the minimum remuneration payable for such holidays. Typically, in wages council trades, there are four weeks' holiday after one year's service. That compares quite well with the average of holidays in industry generally for manual workers, both in the private and the public sector. It does not compare favourably with many of the provisions made for executive, management or some other higher paid groups. Nevertheless, it is considerably better than those of many low-paid workers who are not covered by wages councils and who cannot be covered by them now because the Government have shut the door on new wages councils.
For example, in the mushrooming security industry, where there is no wages council, there are few guaranteed holidays. The mushrooming launderette industry is not covered by a wages council and there are virtually no paid holidays. A recent survey shows that three out often instant print workers have no paid holidays.
Those workers have no statutory, regular or contractual holidays. They get what they can and what the employer allows them, according to the business. That is not fair or reasonable. Even this Government, so far as I know, do not say that if a minimum period of holidays is abolished that will price people into work. Even they have not given us figures, or they refused to give us figures or refused to tell us what the elasticity assumption is for pricing people into work if they are not to be given statutory holidays. Even this Government have not yet said (of course the Minister may say) that the smallest of small businessmen is so small-minded and stupid that he cannot read a wages council order and understand that he must give people four weeks' holiday. Surely that is not beyond him.
Surely the Government could allow their new wages councils, which will be full of their friends, to give minimum-period holidays and put that provision back into the Bill. I beg to move.
Lord Rochester: I support the amendment. I am impressed by the argument that the United Kingdom is apparently almost alone among European countries

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in not providing an overall statutory entitlement to a minimum holiday.
In this country there are legal holiday rights only in industries, as I understand it, which are covered by wages councils. If those are withdrawn, there will be no such entitlement in future. Far from creating new jobs, abolition of the holiday provision may even produce a net job loss in industries covered by wages councils by encouraging unscrupulous employers to make do with fewer people on the payroll.
Viscount Massereene and Ferrard: I should like some clarification. We always give agricultural workers four weeks' holiday. I also give them—I understand that this is the law—an extra £25 a week for their holidays. I have always understood that that applied to agricultural workers. Does it apply to all workers?
Lord Trefgarne: No.
Viscount Massereene and Ferrard: It applies to agricultural workers. They receive their full wages plus £25 a week.
Lord McCarthy: I agree with the point made by the noble Viscount. As I said earlier, the Government will not touch the Agricultural Wages Board because they have too many friends among the farmers. They will be all right. It is the the industrial workers who are for the dark.
6.45 p.m.
Lord Trefgarne: I hope that the noble Lord will forgive me if I resist the temptation to fight the social battles of the last century when discussing the amendment. If this amendment were accepted it would enable wages councils to continue setting the complex rules about holidays and payment for holidays which bedevil the present wages orders.
We strongly believe that this is a matter which should be left for agreement between employers and workers, and that it is indefensible for such matters to continue to be the subject of detailed statutory prescription. There was almost universal support among employers for the view that the wages council system must be drastically reformed if it is to remain. Many of the underpayments which occur are attributable to misunderstanding, and miscalculation and payment for holidays figure prominently among these underpayments. We really cannot continue to put businesses in a straitjacket in which they are breaking the law if, for instance, they pay a higher rate than that fixed by a wages order in exchange for fewer holidays than the order requires.
If this amendment were carried it would undo one of the prime objectives of the Bill—releasing employers from unnecessary burdens and enabling them to give more time to running their businesses. I must ask the Committee to reject it.
Baroness Seear: Is the noble Lord asking us to believe that to write into the Bill that people must have four weeks' holiday is so complicated that it will put industry into a straitjacket? That stretches our belief beyond endurance. The noble Lord keeps on telling us that such matters must be left to negotiations between employer and employed. Surely he knows that to be fair negotiations must be between evenly weighted parties. That is what makes for respectable collective bargaining—people of even strength negotiate quite properly and come to a proper decision.
But negotiation between people who have all the strength and people who are weak is not negotiation between evenly weighted parties. It is this that collective bargaining has come into existence to redress. I find myself unconvinced on being told that in the survey that the Government have done the employers have told them that they want the matter greatly simplified. We have not heard what other people have told the Government they want in respect of the reform of wages councils. Of course, the Government get this kind of advice from employers. But the employers are not the only interested parties.
Lord Harmar-Nicholls: I find frustrating the lack of realism shown by the noble Baroness whom I so much admire, in respect of this matter. Was she being told, the noble Baroness asked, that by putting in statute that there should be four weeks holiday, this was putting it in a straitjacket. If this was the only worry that small employers had to contend with, there would be no problem. The noble Baroness has to remember the innumerable other instructions in statute or near statute that have to be takan into account. When we consider all of these, we find that it is the straw that breaks the camel's back. It works much better when employer and employee have a relationship which means that they can make a mutual arrangement and dispense with statute especially when that statute may not accord exactly with the type of work they perform. I hope that my noble friend will not be diverted. This is another example of statutory obligations that make it almost impossible to run many small businesses. I am certain that it can be dispensed with, without any hardship to anyone. I am convinced that people in employment nowadays are well aware of their rights and that they are capable of negotiating a mutual agreement that will be much more suitable than a quickly drawn up statute passed through this House.
Lord McCarthy: It almost takes one's breath away. I am prepared to make an offer to the Government if they will read our amendment. If they are serious, they have delivered themselves into our hands. The amendment states,
"fixing a minimum period of annual holidays and the minimum remuneration payable during such holidays".
Almost everything that the Minister said dealt with the second half of the amendment. The noble Lord dealt with the complexity of remuneration. He spoke about the poor, small employer who does not understand whether it is time and a fifth or double time, or for how long it is double time, and so on and so forth. All right, let us concede that for the purposes of the amendment: What is wrong with the first half of

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the amendment? Let us suppose that the amendment was to stop at fixing a minimum period of annual holidays. Would the Government object to that? Are the Government seriously saying, as the noble Baroness, Lady Seear remarked, that giving people a holiday bows down business and puts it out of account? If the noble Lord, Lord Harmar-Nicholls, says that this is not the only thing, what is he saying? It is the only thing we are asking for in the amendment.
We are not talking about VAT. That is what the small businessman complains about in most of the surveys. If the noble Lord brings forward a Motion on VAT, we will vote for it. We are talking about fixing a minimum period of annual holidays and the minimum remuneration payable. We would be willing to remove the amendment and to come back on Report with another that dealt with fixing a minimum period of annual holidays—full stop, end of message. If we did that, can the Minister say whether the Government would oppose it with the same vehemence with which they oppose the amendment now being discussed? If so, I just do not understand it. The noble Lord, Lord Harmar-Nicholls, said that there would be no hardship—no hardship with no holidays. I consider no holidays a hell of a hardship. We are saying that people should not be allowed to give no holiday.
Lord Harmar-Nicholls: I am not saying that we should have a statute that says people cannot have a holiday. I am saying that they can have a holiday that they have mutually negotiated. They know more about it than anyone else.
Lord McCarthy: What the noble Lord will not let them have is a statute that says they must have a holiday. I am saying that British industry, God above, can stand and can understand, and will not fall down, if a few workers have a statute that says that they can have a holiday. I want to know what the Minister would say if we came back with that proposal.
Lord Trefgarne: The noble Lord, on more than one occasion during the passage of the Bill, having heard some of the shortcomings of his amendment, has then sought to seek my views on some other amendment, not that on the Marshalled List. The amendment to which the noble Lord invites our agreement retains the whole mish-mash of arrangements regarding payment and minimum period for holidays. As I said earlier, this has been one of the main difficulties encountered on wages council orders. The detail has been such that even large firms have had difficulties sometimes in understanding the orders and a number of errors have inadvertently occurred. It is this inordinate detail that we do not think should stand between an employer and employee and that we seek to sweep away by this measure. This amendment would prevent us doing so. I invite the Committee to reject it.
Lord McCarthy: I am sorry to keep going on this, but we are due to stop at seven o'clock anyway. I am not saying that the amendment is a bad amendment. It is a very modest amendment. What I am saying is
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that the Minister seems to object to the second half, and only the second half, of the amendment. Does he really want to be Mr. Gradgrind? Is that how he wants to go down in history, saying that there will be no minimum period of annual holiday? Is he asking us to believe that if that is what we were saying, he would oppose it? Of course, we shall come back on Report. Of course, that is what we are going to say. I want the Minister to tell me what he will say.
Lord Trefgarne: I am again answering the amendment on the Marshalled List. The amendment does not have one part; it has two. The second part in particular I find most objectionable.
Viscount Massereene and Ferrard: If a worker does not want to take his holiday but would rather have the money, as frequently happens, where do we go from there? Does the noble Lord agree that that is all right?
Lord McCarthy: If that is what the worker wants and if the worker is in a position to influence the employer as to what he wants and is not so dependent on the employer that he has to take what the employer gives him, I have nothing to say about it. I beg leave to withdraw the amendment, but we shall come back to the matter on Report.
Amendment, by leave, withdrawn.
Viscount Long: I feel that this is the moment for a little light refreshment. In moving that the House do now resume I suggest that we do not return to consideration of this Bill in Committee until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Horticultural Development Council Order 1986
6.58 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move that the draft Horticultural Development Council Order 1986, which was laid before the House on 3rd June, be approved.
This order is presented in accordance with the requirements of the Industrial Organisation and Development Act 1947. Its purpose is to establish a Horticultural Development Council for Great Britain, the primary function of which will be to commission research and development in horticulture. The order will empower the council to raise a levy for this purpose on sales of horticultural produce.
Before going into the details of the order I should like to explain a little of the background, and in doing so I should like to emphasise that there have been full consultations with the interested parties as required under the 1947 Act, and the draft order takes account of the views expressed. After taking soundings of their

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members, the National Farmers Union, supported by the Horticultural Trades Association, asked my right honourable friend to conduct a poll of growers with a view to ascertaining whether they would support the establishment of a development council under the Industrial Organisation and Development Act 1947. A similar approach was made to my right honourable friend the Secretary of State by the Scottish NFU, and parallel polls were conducted in Scotland and England and Wales.
The result of the poll was a majority of roughly 2 to 1 in favour of a development council among those growers who were eligible to vote and did so. Having consulted further with the representative interests in the industry, my right honourable friend and the Secretaries of State for Scotland and Wales were satisfied, as the 1947 Act requires them to be, that the development council was desired by a substantial number of persons engaged in the industry, and they accordingly decided that a Horticultural Development Council should be established.
Perhaps I may say now a word or two about the substance of the order. This follows very closely the proposals put to growers in the prospectus which accompanied the poll forms. I would draw your Lordships' attention first to some of the definitions which are contained in Article 2 of the order. The terms "grower" and "horticultural produce" define those in the industry who will be liable to pay levy to the council. They are persons who grow any of the horticultural produce listed in Schedule 1 to the order and whose sales of such produce, excluding VAT, were more than £25,000 in the accounting year to which the levy relates.
The terms "levy period" and "relevant accounting year" relate to the levy collection arrangements which are detailed in Article 9 of the order. The levy will be collected in respect of "levy periods" from growers who in their "relevant accounting year" had sales of more than £25,000. When the council is fully in operation, it will collect its levy each autumn on sales in the growers' accounting years which ended in the preceding calendar year. Collection in the autumn will coincide with the period when most growers' cash flow is near to its peak.
Your Lordships will see that the period from the commencement of the order until 30th September 1987 is split into two levy periods, which will mean that growers will be called upon to pay two lots of levy during 1987. The reason for this is that the council needs to collect some money to fund R & D projects commencing in April 1987 but will not have compiled its register of growers and assembled the necessary staff and other things in order to do this in the autumn. Therefore, the collection in the spring of 1987 is in effect a deferral of the 1986 collection, and it is anticipated that it will be at a rate somewhat lower than the one-quarter per cent. maximum.
I apologise for having taken so long over that. Perhaps I may finish by saying a word or two about the articles in the order. First, the functions of the council are dealt with in Article 3 and Schedule 2 to the draft order, and are to promote or undertake scientific research and other inquiries, and to promulgate the
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results obtained. Article 4 specifies the number of members to be appointed to the council and that all appointments shall be made by ministers. Articles 6 and 7 set out the arrangements for the registration of growers. Article 8 provides for returns and information to the council.
Article 9 provides for the council to raise a charge on sales of horticultural produce for the purpose of meeting the cost of carrying out its functions. Article 11 provides for returns of these sales. Article 9(2) provides for two deductions from the value of a grower's sales. The purpose of the first, which is the cost to the grower of any horticultural produce which he has brought in, grown on, and resold, is to ensure that levy is not paid twice on bought-in produce. The purpose of the second is to avoid the levy being paid on the value added by any processing of horticultural produce carried out by the grower. These allowances have been arrived at in consultation with growers' representatives, who agree that they are appropriate. Article 10 contains standard provisions permitting the council to borrow money and create reserves. Article 12 deals with offences under the order.
Finally, may I say that the Government are very encouraged by the positive way in which the horticultural industry has demonstrated its commitment to the importance of research and development. We believe that those who benefit most from R & D should contribute more directly to the cost, and growers are to be congratulated on being far-sighted enough to see the benefits of having their own body to decide on what R & D they wish to carry out and how to finance it. I am convinced that this is the right course for the industry to take, and I look forward to the council getting down quickly to its work on the industry's behalf. I commend the draft order to your Lordships' House.
Moved, That the draft order laid before the House on 3rd June be approved. [27th Report from the Joint Committee.] (Lord Belstead.)
Lord John-Mackie: My Lords, we must thank the Minister for explaining and putting forward the order to us. As usual, he has done it very clearly. It is a fairly straightforward order to which we can agree. It is simply to raise money to help to pay for research and development in the horticultural industry. This is to cover the £10 million and £20 million cuts which the Government made between 1986 and up to 1988.
I should like to ask the Minister this question. We had the argument when this cut was brought forward about two years ago as to whether it is £10 million and then another £10 million making £20 million the second year, or whether it is £10 million and £20 million the second year, making £30 million. I have just read the speech made by the Parliamentary Secretary to the Select Committee in another place, and it is not very clear. Reading what he says it looks very much like £30 million. I should like this cleared up for the benefit of everyone concerned.
As the Minister said, it has been agreed and all the bodies concerned, particularly the NFU, are reasonably happy about it. The Minister said that it

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was a two to one majority in the poll, but I understand that it was a very low poll. Nevertheless, it is the fault of the industry if it did not take advantage of the vote.
The order covers a tremendous number of points which might arise. There is provision for someone who gets in produce, processes it and sells it again, so that he would not have to pay twice, and various matters such as that. As the Minister said, the industry is very satisfied with the order, and no doubt it will look forward to having some say in its research and development. I gather that the estimate is to raise about £3 million to replace the cut that was made—whether it is £20 million or £30 million; once we decide that. We cannot object to the order, and we give it our blessing.
There is a question I should like to raise on this order, and it concerns people who feel that their conscience will not allow them to join such a body. I have been approached by members of the Plymouth Brethren, and although I do not profess to understand their attitude I respect their sincerity. I have questioned them very carefully. They base their objections to joining such a body not only on their religious beliefs—which are very firm on the subject of being forced to join a body that they do not wish to join—but also on the EC Declaration of Human Rights. Article 18 says:
"Everyone has the right to freedom of thought, conscience and religion; this right includes freedom… to manifest his religion or belief… in practice".
Then Article 20(ii) says:
"No-one may be compelled to belong to an association".
The Human Rights in the United Kingdom pamphlet also makes the point about everyone having the right to freedom of thought, conscience and religion, and this right includes the freedom to manifest this in practice.
It seems to me that they have a point here. They are not in any way not wanting to pay the levy. It was brought up in the Select Committee of the House of Commons. They make it perfectly clear that they want to pay the levy but to pay it direct, not through an association of which their religion prevents them becoming members. I should have thought that it would not be outwith the wit of the Government to find some way to satisfy these people on their rights that they have very clearly put to me, as well as their religious beliefs.
Lord McNair: My Lords, in general, we also thank the Minister for introducing the order so clearly, and we welcome it. I think the Minister has satisfied me that it is desired by a substantial number of people engaged in the industry.
If I may go straight to the details of it, in Article 4, "Constitution of the Council", I ask whether two persons are enough to represent the interests of persons employed in the industry. There are a fair number of employees in horticulture, and to have two out of 20 representatives on the council does not seem to be very generous representation for them.
In paragraph (4) of the same article it says:
"two persons having special knowledge of matters relating to the marketing or distribution of products of the industry".
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Perhaps I should declare a defunct interest in that up to about 15 years ago I was a grower and in those days I used to regard greengrocers as my natural enemies because of the exorbitant mark-ups they put on my produce, especially in the case of florists engaged in the ghoulish trade of wreath-making. However, I recognise that these people are necessary, and above all that packaging is extremely important. I should like to ask whether distribution and marketing somehow includes packaging. I take it that it does.
Articles 8 and 11 deal with returns. We must hope that the Minister will exercise a restraining influence on the council to thwart the inevitable bureaucratic tendency to ask for more returns than are strictly necessary. Growers are not very good at paper work and they do not like it. The council will be far more effective and successful if it can win and deserve the goodwill of the growers.
In the schedule of the different products I looked very hard to see whether I could find any omissions. The only possible one I found is that, whereas roses include stock for budding, the same inclusion is not made for fruit trees, ornamental trees and shrubs, all of which are frequently budded or grafted.
Finally, I shall refrain from asking the Minister whether he agrees that, whereas a tomato is undoubtedly a fruit rather than a vegetable, rhubarb cannot possibly be described as a fruit and therefore presumably must come under the heading "Vegetables".
Lord Belstead: My Lords, I am grateful to the noble Lords, Lord John-Mackie and Lord McNair, for their reception of this order. The noble Lord, Lord John-Mackie said—and it is true—that this is in the context of reductions in government funding. It is a fact that £10 million has been cut from the provision for R & D expenditure in the current financial year, 1986–87, and £20 million will be cut from the provision for next year, 1987–88. However, I would make the point that we shall still have some £21 million of government money flowing into research and development for horticulture. In addition to that, it is hoped that this levy will raise an amount in excess of £2 million. I think that the noble Lord was perhaps £1 million too high in his estimate. Those who are planning the council hope for a figure in excess of £2 million. Undoubtedly there will be some overheads to meet, although I am glad to be able to tell your Lordships that the ministry will certainly try to give some assistance with the setting up of the council.
Specifically, we intend to provide an interest-free loan of £130,000 to be repaid before the end of this financial year. In addition, provided they are wanted, the ministry will provide conference facilities and support services until the council is in a position to provide these facilities from its own resources. Therefore, we shall try to do our bit to get the council off to a good start.
The noble Lord, Lord John-Mackie, then asked me a specific question about Plymouth Brethren, the Exclusive Brethren, who, as he has said, have not said that they do not wish to pay the levy, but do not wish to belong to an association which would collect the levy. My honourable friend the Parliamentary

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Secretary, in speaking of this order recently in another place, gave an undertaking that we would try to find a solution to the problem, which might be an administrative arrangement whereby some members of the Exclusive Brethren could perhaps pay the levy via an intermediary. I should like to endorse that undertaking to your Lordships today and give an assurance that we shall try to find a way through this particular problem. I am grateful to the noble Lord for raising this point.
The noble Lord, Lord McNair, asked whether two representatives of the interests of the employees on the council were enough, and the noble Lord also referred to the two representatives who will have knowledge of marketing and distribution, which I am advised does indeed include packaging. There was of course quite a bit of consultation about this before the poll was conducted. I think that we should wait and see how the council progresses. The representatives of those who are employed will be on all fours with those who will be independent—there will be only two independents—and those who have knowledge of marketing and distribution. It is only those who run into double figures, who will be representative of the growers, who will be in the majority. I like to think that the other representatives will think that the composition of the council will be fair, but no doubt that is a matter to which we can return if, within the industry, it is felt that the balance is not right.
I have noted what the noble Lord said about trying to make sure that there is not too much bureaucracy. I am sure the noble Lord has noticed that the order contains articles enabling the council to collect information; otherwise the council would be in an almost intolerable position. However, I am sure that on its side it will try to keep down its costs, overheads and bureaucracy. I am sure that the noble Lord, Lord McNair, would say that that will be for the benefit of growers as well.
Finally, as the noble Lord knows, the produce covered excludes apples and pears because of the Apple and Pear Development Council; it excludes mushrooms, because the mushroom growers are carrying out their own research and development; and it excludes hops, because the hop growers are also carrying out their own research and development. There is one other exclusion.
Lord McNair: Potatoes, my Lords.
Lord Belstead: Yes, my Lords. As I understood it, the noble Lord asked me a question about hardy nursery stock. I hesitate to suggest that I am the possessor of knowledge of which the noble Lord is not, considering that the noble Lord has personal experience of this, but I believe that the particular examples he gave me fall within the hardy nursery stock category. The nursery stock people were very closely consulted before this order was brought before your Lordships' House.
Lord John-Mackie: My Lords, I should like to thank the noble Lord the Minister very much for his assurances to the Plymouth Brethren; I am sure that they will be delighted. At the same time I should like
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to ask why he is imposing a levy to raise money for this R & D when he turned down my suggestion of a levy to pay for ADAS.
Lord Belstead: My Lords, that is an ingenious question and rather a fast ball. As we shall have the pleasure of dealing with the Report stage of the Agriculture Bill next week, perhaps I may consider my reply and deliver it when we next meet on that Bill.
On Question, Motion agreed to.

Protection of Children (Tobacco) Bill
7.19 p.m.
Report received.
Clause 2 [Amendment of section 18 of the Children and Young Persons (Scotland) Act 1937]:
The Lord Advocate (Lord Cameron of Lochbroom)The Lord Advocate (Lord Cameron of Lochbroom) moved the following amendment:
Page 2, line 43, leave out ("time") and insert ("date").
The noble and learned Lord said: My Lords, at last week's consideration of this Bill in Committee I undertook to look at Clause 2(9), which creates presumption as to the date of receipt of a notice under subsection (7) of that clause. This amendment has been brought forward since that time as a result of a suggestion made to me by the noble Lord, Lord Airedale, in writing, pointing out that the execution of recorded delivery, which is referred to in these subsections, refers only to a date stamp as proof of posting and does not refer to an exact time. Accordingly, the calculation of the period of notice will, if this amendment is accepted, be upon the basis of the date on which the information was posted. I am grateful to the noble Lord for having brought this matter to my attention.
However, as I said at Committee stage that I would consider the matter further, I should indicate that, as I said then, this provision has a statutory precedent. The equivalent provisions which I referred to in Committee have operated successfully in Scotland and those who advise me have not discovered any case in which a requirement to give notice within the prescribed period has given rise to any problem. Indeed, the system appears to have worked well. As I indicated in writing to the noble Lord, Lord Airedale, I shall look further at the matter in a much more general context. At present I accept that it would be tidier if this amendment had been made.
The noble Lord, Lord Airedale, voiced concerns about the situation when an accused person does not receive the notice that the prosecutor intends to rely on for the presumption in subsection (6), at least until such time as it is too late for him to give notice that he intends to challenge that presumption. In that circumstance I can offer some reassurance to the noble Lord.
The provision in Clause 2(9) is indeed only a presumption. If an accused person at a trial were to indicate that he had received the notice late and that is

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accepted, then the presumption would be overcome and the intimation would be defective. In such circumstances the trial might be adjourned to another date to allow the matter to be cured. Alternatively, it might be heard in part so that the evidence of witnesses who had attended the court that day (I have in mind particularly children) could be heard and inconvenience avoided. Then the trial would be adjourned to another date for the purposes of dealing with scientific evidence which it would have been intended to challenge.
In the circumstances I have outlined it would be inconceivable that the trial judge or the prosecutor would do other than agree to such a course. The principle of fairness to the accused person would dictate that that was the proper course to be followed. I hope that that gives certain reassurance to the noble Lord, Lord Airedale, in particular on the matters that he raised at Committee. With that, I beg to move this minor amendment.
Lord Airedale: My Lords, I am grateful to the noble and learned Lord the Lord Advocate for this small crumb of comfort arising out of the fuss I made about subsection (9) when we were in Committee. I am also very grateful that he has agreed to have another more general look at this subsection. It has not really been cured yet by this small amendment. The difficulty is what we were told by the noble and learned Lord the Lord Advocate in Committee. Noble Lords may think this is a surprising proposition. I quote his words:
"the execution of the recorded delivery is that document which is handed over at the time of posting and is not the document which is available at the time when the notice is delivered to the addressee".—[Official Report, 19/6/86; col. 1155.]
If that is right, it follows that the Post Office could throw the letter into the rubbish basket and still claim to have executed a recorded delivery. I cannot believe that the Post Office would ever have the temerity to make such a claim, and if it did I simply cannot believe that the court would accept a claim so grotesque. I still say that this subsection is founded upon a misconception. I trust that the earliest opportunity will be taken to redraft it to cure its defects. In the meantime, I am grateful for my crumb of comfort.
On Question, amendment agreed to.

Surrogacy Arrangements (Amendment) Bill [H.L.]
7.26 p.m.
The Earl of Halsbury: My Lords, I beg to move that this Bill be now read a third time. In rising to move this Third Reading I am aware that this is a debatable Motion and that certain noble Lords will wish to enter into a debate upon it. I shall therefore make a few brief introductory comments before I move the Motion.
This all starts with a committee chaired by my noble friend Lady Warnock, known as the Warnock Committee, in which the subject of inquiry was, first, experimental research on embryos, and, secondly, surrogacy arrangements where one woman acts as the incubator for another woman's egg. The Government
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have merely said that at some stage in the future they will consider legislation to implement the findings in the Warnock Committee's report with respect to experiments on embryos.
However, in the last Session of Parliament they introduced a Bill which implemented those issues where the Warnock Committee was unanimous. There were other issues where the Warnock Committee voted by a majority in favour of certain recommendations which were not included in the Government Bill but were proposed as amendments to a Bill in the last Session. It was very late in the Session. It was undesirable that the matter should be referred back to another place and the Government Bill went through unamended. At that time, I undertook to introduce a Private Member's Bill to give effect to the amendments that had been proposed to the Government Bill in the last Session, and that is the Bill before the House tonight.
There is little I need say on the subject apart from recapitulating the history of the matter. The Bill may have its friends and it may have its opponents. If its opponents choose to cast down the gauntlet I shall pick it up and we shall have a Division in the dinner hour. Otherwise it will go through, I hope, on the nod. I beg to move.
Moved, That the Bill be now read a third time.—(The Earl of Halsbury).
Lord Ennals: My Lords, in speaking on this Third Reading I am speaking only for myself and not for the massed ranks of my colleagues behind me. I have several times in the consideration of this Bill thanked the noble Earl, Lord Halsbury, for introducing this Bill because it has given us the opportunity to discuss issues of very great importance. But I have also expressed grave personal reservations about passing this Bill into law. I must admit that I should have fought harder against this Bill if I had thought that it had any chance of becoming part of the law of the land. I think it is unlikely that that will be the case.
There are two reasons that I have set out before, but I think that I should do so again on Third Reading. We shall have a measure before us eventually. Perhaps the noble Baroness may help us with the timetable. She may say that she expects that next year, or sometime or soon (that is a popular word with your Lordships) we shall have major and comprehensive legislation on the issues raised in the committee presided over by the noble Baroness, Lady Warnock.
Basically, I do not favour legislation in bits and pieces. When we have a major problem, as with the reform of the child care legislation, the best thing to do is to try to deal with it all at once. There was one emergency piece of legislation that we needed to get through quickly, and we did so. I fully supported it and so too did my colleagues. But I want this issue of surrogacy to be taken as part of the legislation to be introduced by the Government. That is my first argument.
My second argument is one of substance. I do not want to close the door totally at this stage to any form of surrogacy. At Second Reading I quoted—and I hope the House will forgive me for doing it again, but it

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seems to be quite appropriate—what the noble Earl, Lord Caithness, had said in the course of a debate in your Lordships' House on 28th June 1985. His words were quoted during our debate on 11th March at Second Reading. He said:
"We can easily envisage a circumstance where a close friend or sister of the infertile woman voluntarily agreed to bear a child for the childless couple. She might, on reliance of a promise of reimbursement, incur considerable expenses as a result of the pregnancy and birth or cease work during the period. The couple might then renege on their agreement. They might refuse to accept the child or to pay medical or other expenses. They might even take the baby and refuse to pay the expenses. We ought to consider this question: do we want to deny a surrogate mother all legal redress, because that is what the amendment does".—[Official Report, 11/3/86; col. 585.]
I agreed with the noble Earl. I said that I did not want to close the door totally to this possibility.
I suppose that my views are really close to those of the minority report which was presented by Dr. Wendy Greengross and Dr. David Davies. Perhaps I can quote just three paragraphs which express the view that I hold and which, of course, they hold. The second paragraph said:
"We… share with our colleagues many of the concerns expressed in Chapter Eight [which is dealing with surrogacy]. The practice of surrogacy could lead to serious problems"—
and that has been pointed out to us very well in earlier debates by the noble and learned Lord, Lord Denning.
"Equally we regard it as of immense importance that people considering getting involved in surrogacy, in whatever way, should be fully aware of the complications that could ensue".
That puts one side of the argument, and it is very much that which is shared by most Members of the Committee.
Perhaps I may quote a sentence from paragraph 5 of the minority report. It reads:
"Having considered the risks on both sides of a finely balanced argument we have come to the conclusion that it would be a mistake to close the door completely on surrogacy being offered as a treatment of childlessness".
In each of the opportunities we have had for debating this issue, I have always expressed my sympathy for the childless couple.
My last quotation is from paragraph 9 of the minority report. It reads:
"We do not believe that public opinion is yet fully formed on the question of surrogacy, which has burst into prominence only in the last year or so".
It was more than a year ago that the report was published.
"Thus we think it is too early to take a final decision one way or the other. We wish to have the opportunity in the next few years to see what the demand is, whether an agency is prepared to come forward to satisfy it, and whether the consequences are generally acceptable or not. We simply ask that the door be left slightly ajar so that surrogacy can be more effectively assessed".
In my view, if the Bill presented by the noble Earl, Lord Halsbury, were to be carried, it would not leave the door ajar in any way—which is my objection to it. I simply ask that the door be left slightly ajar so that surrogacy can be more effectively assessed.
Lord Denning: My Lords, I hope that your Lordships will pass this Bill this evening and that it will
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go through another place equally quickly, for this simple reason. The law should not be left uncertain for years. It is most important for the community that the law should be declared now on these important matters. It is two years since the Warnock Report was produced, and, goodness knows, it may be another two years before the Government (or whoever it may be) propose further amendments to it. Are we to wait all that time before we have a Bill and law dealing with the matter?
Let me take some elementary points which are provided for in this Bill and which were left open the last time, in the 1985 Act. This is the simple question. Is a surrogacy arrangement lawful or unlawful? The last Act left it uncertain. The Warnock Report said quite clearly that the law would hold, they thought, and should hold, that it is unlawful, and for this simple reason. If you have a surrogacy arrangement like that, suppose the mother wants to keep the child and the commissioning parents say, "We want it. You are breaking your agreement", and they sue her. If it were a lawful agreement, they could do so.
On the other hand, if they do not want the child after it is born and the woman who bore it says that they ought to have it because they commissioned it then, if it were a lawful agreement, she could sue them. It is imperative in this first clause to follow out the Warnock recommendation that any arrangement which is a surrogacy arrangement is unlawful, whether or not made with a view to payment. The law must be clear upon it, and it should be declared in this Bill as soon as may be.
Then comes the next question. What is the position of the child who is born of a surrogacy arrangement? Take the instance where a woman cannot have her own child for some reason or another, the egg is taken from her, mixed with a man's sperm and put into the womb of what I would call the real mother. The law should be clear here and now who, in law, is the mother of that child. Who is the parent of it? The answer at the moment, as I would give it, is that the mother of the child is the mother who has borne that child in her body from the very moment when it was put there and conceived until the time when it is born.
The Warnock Report recommended that a child born to a surrogate mother in pursuance of a surrogacy arrangement shall for all purposes in law be regarded as the child of that mother. Surely that is right. The law should be clear about it. The woman who has borne the child in her womb from the first moment to the date of birth surely, in law, is the mother of that child; and the man who has provided the semen can have no right in the matter whatever. That is an important point of law to be decided at once in those first two clauses.
Then we come on to the rest of it. It is dealing then with surrogacy arrangements for money, for commercial purposes. As the Bill originally went through before these amendments, it hit only at the organisations themselves who made the arrangements

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if you could get at them at all. As we know, most of them have come from America, where, I am sorry to say, this is all lawful. Are we to have it here in face of the clear recommendation of the Warnock Committee, which recommends that the legislation be sufficiently wide to render criminally liable the actions of professionals and others who knowingly assist in the establishment of a surrogate pregnancy? We can see what has happened since the original Act was passed in 1985 and before we have got this Bill on to the statute book. There was a heading in the Daily Telegraph of 15th May which read:
"Two surrogate mothers defy legal ban".
What happened was that there were two women, and apparently an American agency arranged for pregnancies of those two women from other men's sperm. They were both British, living in London, and they would be paid fees for taking part in this matter and for keeping a diary.
Lord Ennals: My Lords, would the noble and learned Lord give way for a moment? I am grateful to him. He is describing a very grim situation, and of course this House and Parliament have already abolished agencies—and thank Heavens they have. I wonder what the noble and learned Lord's comment is on these two sentences from page 45 of the Warnock Report:
"Moreover, the bearing of a child for another can be seen, not as an understanding that trivialises or commercialises pregnancy, but, on the contrary, as a deliberate and thoughtful act of generosity on the part of one woman to another. If there are risks attached to pregnancy, then the generosity is all the greater".
Could not the noble and learned Lord look at it in that light rather than in the rather fearsome and bloodcurdling light that he has described so far?
Lord Denning: My Lords, we can each read paragraphs from the Warnock Report to our liking. I am quite clear about this. The present Act does not go far enough. The case I was telling your Lordships about, whether done by an American agency or not—arranging for women to be impregnated with other men's sperm in order to get a child and being paid £7,000 each if they kept a dairy of their experiences—are we to allow that sort of thing in this country? No, my Lords.
Each part of this Bill as we would seek for it to go through is dealing with an immediate danger, an immediate harm to society and immediate things which are going wrong. We ought to make the law clearer upon that, as it is indeed made clear in this amending Bill which has been presented to your Lordships and which is now on its Third Reading. I hope your Lordships will not hesitate, because it is vital that the law should be made clearer now, rather than waiting for two or three years. If it waits for two or three years a lot of these harmful effects on society will go on and almost become established, as they have in America. For goodness sake! Let us get this amending Bill through now. I hope the other place will also get it through quickly. I will certainly support the Bill in every part.
7.45 p.m.
Lord Swinfen: My Lords, if we wait for the Government to produce legislation on the whole of the Warnock Report I think we may well have to wait a long time. These are moral issues and, as such, throw up important decisions of principle which make drafting extremely difficult.
The noble Lord, Lord Ennals, said that he did not like legislation in bits and pieces. What does Parliament do but legislate all the time in bits and pieces? It is our task continuously to amend the laws that are out of date and to bring in new ones to cater for new circumstances. The noble Earl, Lord Halsbury, is catering for new circumstances thrown up as a result of the passing of the Surrogacy Arrange-ments Act. Things were found not to work. Other people will come in with other Private Bills, I am sure, to deal with other parts of the Warnock Report. Medical and scientific advances will go on: they seem to be going on at an increasing pace. If we wait for a Bill to deal with the whole of the Warnock Report, that report will be well out of date. We shall need another Warnock and another report on a totally different issue. I do urge your Lordships to pass this Bill and to give it a fair wind. Then let us move on.
Lord Edmund-Davies: My Lords, the noble Lord, Lord Ennals, seductively said that all he seeks is to have the door left open. Left open to what? Left open for indefinite length to the present state of affairs? Can anybody contemplate the position in this country at the present time with any degree of complacency, or are we not bound to be convinced that it is a most undesirable and unsettling position which is full of foreboding for the future? The problem confronting this House tonight, in my submission, is not a grave or difficult problem. This Bill should be adopted.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, I, too, am not absolutely sure whether I speak for the even more massed ranks on this side of the House, but I do speak for the Government. First of all, I am sure the House would wish me to thank the noble Earl, Lord Halsbury, for giving us, through this Bill, a further opportunity to debate the issues of surrogacy. We have had a number of useful debates, and the proceedings on this Bill are, I think, a good example of how the issues that arouse public concern and deeply-held views can benefit from careful and considered debate in this Chamber.
I made clear when we debated this Bill on its Second Reading that the Government have adopted a neutral stance for the present, as they are considering the matters dealt with in the Warnock Report, including those concerning surrogacy. It remains our aim to introduce a comprehensive Bill on all these issues as soon as practicable. There is no need for me to stress the point that such legislation will be complex and will touch on several ethical issues on which many people, quite properly, have strongly-held opinions. While this may not hold true to the same extent in the case of surrogacy as in the case of embryo research, it is

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nevertheless the case that there is a wide range of opinion on some of the matters dealt with in this Bill, as demonstrated by the views expressed by the noble Lord, Lord Ennals, on one side and the noble and learned Lord, Lord Denning, on the other. I understand that the activities reported in the Daily Telegraph, to which the noble and learned Lord, Lord Denning, referred, concerning the involvement of American women in surrogacy cases, are being examined by the Director of Public Prosecutions.
I am very much aware that there is little of substance I can say to day about this Bill, nor indeed about the detailed timing of future government legislation about these matters. However, whatever the fate of this Bill, it will have been valuable as a vehicle for the discussion of these issues and as a stage in the development of further consultation and research into these matters. We will pay particular attention to the views expressed during these debates in considering the content of future legislation. Even if the Bill does not make further progress on this occasion, I am sure that this has been a most useful exercise. I would therefore end by repeating my gratitude to the noble Earl, Lord Halsbury, who is one of the most respected Members of your Lordships' House.
The Earl of Halsbury: My Lords, I will wind up very briefly and thank the noble Baroness for her kind remarks about the part I played in this matter. The issues between myself and the noble Lord, Lord Ennals, are very simple: he wants to keep the door open and I want to keep that door shut until the future adumbrated by the noble Baroness bears fruit in this House and in the other Place.
What happens if you leave doors ajar? Vested interests flourish behind them and once you have allowed vested interests to establish themselves they are very difficult to get rid of. If I may mix my metaphors, a fine crop of weeds you will find growing behind that door left ajar for a very short time. I do not think I need to say more than that.
On Question, Bill read a third time, and passed, and sent to the Commons.
Baroness Hooper: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.50 until 8 p.m.]

Wages Bill
House again in Committee on Clause 14.
[Amendments Nos. 88 and 89 not moved].
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 90:
Page 16, line 9, at end insert
(" ( ) fixing appropriate premia payments other than overtime rates in respect of time worked in excess of basic hours;").
The noble Lord said: I was not expecting to move this amendment but I shall do so. We have had a discussion on various payments that should be made on the fixing of holidays and on what should be paid for holidays. This amendment seeks to fix premium payments for hours worked in excess of basic hours other than overtime. We are talking here about things like nightwork or split duties.
Once again, the people who are covered by wages councils are the weakest among the working population, without the opportunity of negotiating, without the opportunity of ensuring that there are proper payments made for nightwork and for split duties, and without other payments which are in the natural course of events on the shop floor in large places where there is a good trade union organisation. I feel quite sure that my noble friend Lord McCarthy will have something more to say about this amendment in due course, but for the time being I beg to move.
Lord McCarthy: As my noble friend Lord Stoddart said, this amendment is about fixing appropriate premium payments other than overtime rates. Therefore, it is right that we should look at what the wages councils orders do in particular cases, to see what it is that the Government are taking away. As I argued earlier, the occupational variations which wages councils fix are sensible and so are the premium payments which they fix for things other than overtime rates. What the Government are saying is that none of these things can be fixed by wages councils in future.
The licensed trade wages council fixes a rate for rest day work and a rate for working public holidays. The laundry trade wages council fixes a separate rate for waiting time, a rate for a two-shift system and a rate for night work. The boot and shoe wages council fixes a waiting time rate, guaranteed pay for casual workers and a guaranteed week payment for time workers. The hairdressing wages council fixes a rate for a weekly short day and a rate for waiting time.
All these different wages councils fix appropriate premium payments which are designed to fit their particular circumstances. Even my old friend the sack and bag fixes very complicated overtime and premium rates which mix days of the week with hours worked. They are all designed carefully by those who sit on the wages councils to meet the actual circumstances of the workers in those industries. They fit circumstances; they fit the case.
These kinds of variations are not complicated for the industry concerned and usually consist only of two or three variations for each trade. They avoid exploitation where workers are especially weak and especially subject to pressure. Once again we would argue, as we have argued before, that there is no reason why wages councils should not have the power to do this. These differentials have been fixed for many years in many cases. Most workers and all employers by now should be very much aware of the differential structure in their industry. In some cases it has been like that for 70 or 80 years or so. There is no reason, no sensible reason, why the new wages council system should not

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be allowed to make those appropriate premium payments that they traditionally have made. I support the amendment.
Lord Trefgarne: I am not likely to get much support from my own side just at the moment; nonetheless I make no apology for restating once again the thought which underlies Part II of this Bill: the radical reform and simplification of the wages council system. The Government are responding to the almost unanimously held view of employers who commented on the consultative paper. There could be no mistaking their message. The system was in urgent need of fundamental overhaul and if this could not be achieved, then it should be abolished. It is clear from this and other similar amendments which we have been discussing that noble Lords opposite are not concerned with whether employers are encumbered by unnecessary burdens. They would have them spend valuable time digesting unduly complicated regulations which inhibit them from getting on with the real job—that of creating wealth and jobs.
The Government are not prepared to see that happen. In future there will be only one minimum basic rate and one minimum overtime rate, irrespective of the time at which the work is undertaken. The Bill does not remove workers' rights to premium rates. The majority of workers are likely to continue to be entitled to their current rates under the terms of their contracts of employment.
Limiting councils to setting a single basic and overtime rate is central to the Government's reform policy and still keeps in place basic protection. It is therefore a balanced measure, contrary to what some noble Lords opposite have suggested. Employers must be allowed to get on with the job of running their businesses, free from constricting bureaucracy. The Bill achieves that objective. The amendment would have the opposite effect and I must therefore ask the Committee to reject it.
Lord McCarthy: The Committee will not be surprised that we are not convinced by the Minister. He uses these arguments about fundamental overhauls. We are never told precisely what the employers said and precisely what they meant by fundamental overhaul; and we are never told why a fundamental overhaul could not in fact allow us to have appropriate premium payments. Nevertheless, we are not going to force a Division on this tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McCarthy Lord McCarthy moved Amendment No. 91:
Page 16, line 15, at end insert—
(" ( ) provide for the protection of existing rates of pay for a period of not more than three years after the day on which this section of this Act comes into force; ").
The noble Lord said: This amendment, the Minister may or may not be pleased to know, as the case may be, actually does change the emphasis. We are not now trying to put little bits back into the Bill, though we may come back to that. We are trying to provide for
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the protection of existing rates of pay for a period of not more than three years after the day on which this clause of the Bill comes into force. That is the substance, and those are the terms, of Amendment No. 91.
The aim of the amendment is to provide for the possibility of a transitional period, to control the rates at which the real value of pay declines in particular wages councils. The Minister has frequently told us of the desires of the employers. He told us that their latest desire was for a fundamental overhaul of the system. That is very much the desire of the trade unions. It is representing the views of, as they see it, the workers on their side.
The request was made in many of the representations by individual unions to the Government that anything that might be done to remove the protection of the 1979 Act should at least be done gradually, in view of the fact that real rates might decline and rates of increase might fall. And we have it on the authority of the Chancellor himself that, unless the rates of increase do fall in real terms, there can be no improvement in employment. He has said repeatedly that only if real wages decline in relative terms can there be any significant increase in employment. If that is done, then at least it should be done in a staged and transitional way.
We have other amendments on the Marshalled List which we may not move tonight but which aim to achieve such a transition in various different and more complicated ways. I choose to focus on this particular amendment because I believe it suggests the simplest way. It is the way that even the smallest of businessmen would understand. It provides a limited but clear form of protection.
Clause 14 enables the wages councils of the future to carry on, but to do so on a more limited basis. It states in subsection (4) that the Secretary of State shall have the power to do various things in order to facilitate the transition from the old system to the new. We propose to add, as it were, an additional facilitating formula or power; that the Secretary of State could provide that wages councils themselves may provide for the protection of existing rates of pay for a minimum period, by orders where appropriate, to ensure that none of the existing rates of pay now paid by the wages councils is reduced in money terms.
In other words, the club steward's rate of pay—the high rate of pay in the licensed trade—could not be reduced in money terms. It might not advance as fast as it has advanced before, but it would not be reduced in money terms. The differential between, say, foremen and managers in boot and shoe could narrow because the single rate could be increased, whereas the foreman's and manager's rate could not be increased—but it could not be decreased. Therefore, over a three-year period the rate might be squeezed in real terms relative to the basic rate but in money terms it would remain where it was. The rate for managers and for street vendors in retail food would again be in a similar position. The rate could decline in real terms but it would not fall in money terms.
Indeed, the basic rate itself would not decline in money terms. But then we do not expect—although we have no experience of the new people with whom the Secretary of State will now pack the wages councils—that the existing members of the wages councils will seek to bring about a reduction in money terms. I suppose that what they will seek to bring about over a period of time is some decline in the rate of increase in money terms.
We are suggesting in the amendment that there should be some simple practical index of what the Government expect to do and of the rate at which the Government expect the real level of wages council wages to fall. In the absence of any attempt by the Government to give a figure for what they expect to happen, the least they can do is to support this amendment. I beg to move.
8.15 p.m.
Lord Trefgarne: This amendment would give wages councils the power to provide for workers employed at the time when Clause 14 comes into force to continue to be entitled for a period of not more than three years to minimum rates of pay laid down in the current wages order relevant to their employment. The Committee will wish to know that many of the arguments advanced today in support of the amendment were debated at length in another place, and I shall be happy to restate the Government's position.
Part II of this Bill is about deregulation and simplification. Wages councils have been able to fix a wide range of terms and conditions. That has had the effect of putting employers in a legal straitjacket, which has made it all but impossible for them to negotiate with their workers in a way that is more closely tailored to the needs of their businesses. The majority of employer responses to the consultative paper were clearly in favour of radical reform and simplification if the wages councils system were to be retained.
The Committee will wish to be aware that workers currently employed under a contract of employment incorporating any or all of the terms and conditions of existing wages orders may expect their employment to continue on that basis, unless the terms of their contracts are changed. A contract cannot be changed unilaterally but either party may seek at any time to change the terms of contract by agreement, subject to the minimum level of protection laid down in the current wages order. That has always been the position.
If an employer seeks to change the terms of a worker's contract and the worker is unwilling to accept the new terms, whether or not his employment has terminated, then he can sue in the civil court for breach of contract. I hope that in the light of those reassurances the noble Lord will not wish to pursue this matter.
Lord McCarthy: I do not wish to pursue this matter but I am not convinced by what the noble Lord has said. This is an extremely modest amendment, and the next amendment is even more modest. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Wells-Pestell): In calling Amendment No. 92, I must point out to the Committee that, if it is agreed to, then I cannot call Amendments Nos. 93 to 97.
Lord McCarthy Lord McCarthy moved Amendment No. 92:
Page 17, line 6, leave out subsection (6).
The noble Lord said: This amendment does direct itself to one of the central thrusts of the Bill, and it is one that has not been the subject of a great deal of discussions until now. Indeed, it was not discussed at any length in another place. It concerns the reference in the Bill that instructs the new members of the wages councils to pay particular regard to the level of employment, and to ensure, I suppose, that nothing that they do has the slightest chance of increasing the rate of unemployment.
Strangely enough, for reasons that have never been clear to me and which have not been sufficiently explained, the clause in question goes on to suggest that the wages councils should pay particular attention to that criterion,
"where the remuneration received by such workers is generally less than the general average for such workers".
Such phrases are not generally known in the industrial relations business. I repeat,
"generally less than the national average for such workers".
We wish to make a number of points about that particular form of words and to argue the case for leaving out the whole of subsection (6), which would strike from the Bill the special consideration for the level of employment.
There are three points to be made. First, there is no evidence known to me or offered by the department, to suggest that, at the moment, members of wages councils do not take into account the effect of their decisions on the level of employment. Wages councils' rates, on the whole, follow other rates. In recent years, they have on the whole increased rather less than the rates in industry in general. Certainly they have increased much less than the rates of increase among higher paid workers—particularly among non-union workers and those in executive capacities, on the boards of industries, managing directors, and so on. That is where the contemporary inflation of the wage system is being germinated.
As I have argued before in this Chamber, if there is wage inflation, and if wages in this country are being dragged up above the rate of increase in prices, then they are being dragged up from the top and not pushed up from the bottom. All the evidence suggests that over the past six years we have become a more unequal society, and that down among the wages council rates

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the increases are now significantly below the increases for the better paid, non-unionist, white-collar executive class.
There is certainly no evidence that the present members of the wages councils are disproportionately pushing up rates and not taking into account the possible employment effect of what they do. It is, of course, true that they have not done this at a rate which satisfies the Government. It is, of course, true that no Government that I know of has so peppered the chairmen of wages councils with gratuitous instructions as to what they ought to do about their rates of increase. Nevertheless, there is no evidence that these people do not take into acccount the general level of employment and the level of employment in their area, together with the effect of remuneration which, in their area, is generally less than the national average for such workers.
This brings me to my second point. As, in effect, quasi-arbitrators who have to produce some kind of acceptable level, wages councils take other matters into account, too. That is the Government's problem. I suppose that if the Government were bluff enough and tough enough and sufficiently straightforward, they would not have this clause at all. They would say to the councils, "You must take into account the level of employment and nothing else. The only thing you are allowed to take into account is the possibility that the award you give might take into account some other factor". But the Government do not. They just say that the level of employment should be taken into account although, as I have said, members of the wages councils take into account all kinds of factors.
Often those other aspects are taken into account because one of the parties before them has made a particular mention of one of them in its submission. For example, employers frequently argue that there is a problem of recruitment and that particular categories of workers—perhaps not the lower paid but the managers—require their differential to be widened. They put forward a recruitment argument. The employers may use a quality of labour argument. The unions may argue that there is a high rate of labour turnover and that the wages council must increase the rate for a particular group of workers under their control in order to reduce the rate of labour turnover. All kinds of arguments can be put to wages councils at the moment, and within their context the argument about employment takes its place. That is what a wages council system is. That is what third party dispute resolution involves.
What the Government want to do, and what they do in this clause (and the reason why we are moving that it should be left out) is put a differential special statutory emphasis on the employment effect to the automatic and natural exclusion or down-grading of any other matters which the wages council might take into account. It is unclear—and I ask the Minister to answer this—exactly how the two halves of this clause are designed to work. If the wages council takes into account the effect of employment, particularly where remuneration is generally less than the national average, does that mean that if it is generally less than the national average there should not be an increase?
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I should have thought it was the other way round. I should have thought that where it was generally much less than the national average there should be an increase, even if that affected the level of employment. So are the two halves of this clause complementary or do they both lead in different directions? How are the unfortunate members of the wages councils intended to balance them, or are they supposed to reinforce themselves?
This arises because the Government want to give instructions to these people. They want to give instructions and at the same time, in general debate in this Chamber, they are always saying that they do not want to give instructions, that they do not want rigidity, that they do not want to bind hands, and that they want to take hands off—but not off the people who run the wages councils. The wages councils are going to be instructed precisely on what they must take into account and, I suggest, by inference, what they must ignore. We think that that is an unnecessary and unjustified interference with what wages councils do, and I therefore move that the clause should be left out of the Bill. I beg to move.
Lord Trefgarne: Subsection (6) of Clause 14 requires councils, before making a wages order, to have regard to the effect that the rate they fix will have on the level of employment among workers covered by the wages order, particularly in those parts of the country where the remuneration of such workers is generally lower than the national average for the workers concerned. Councils must also have regard to any other factors which they consider appropriate—and that, of course, is only common sense. Amendment No. 92 would remove those sensible requirements, and I must therefore ask the Committee to resist it.
Noble Lords have agreed in the past that the wages councils system provides a safety net through the setting of minimum rates. For the system to operate on a national basis allowance must be made for the effect the order will have in those areas where the pay rates are traditionally lower than the national average. I hope that the amendment will not be agreed to.
Lord McCarthy: The noble Lord said something interesting. He now says that the two halves of the clause are complementary; that they are not alterna-tives which balance but that they reinforce each other. I understand. I think that late at night, at twenty-five minutes past eight o'clock, we are having a statement of policy. We are now being told that where rates are generally low—let us use the crude words: where they are near starvation level—one would particularly take into account the factors which are likely to lower them still further. That is what is being said. We are being told that where they are generally low one should take into account the possibility of a negative employment effect; and the lower they are, the worse they get.
That makes sense of a great deal of Government policy. I now understand why it is we do not worry about what happens to company directors; that we do not worry when we give special awards to judges: that we did not bother ourselves when executive increases last year went up by 11 per cent.—because up at that

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end of the scale nothing disastrous occurs. There cannot be an employment effect on directors. There cannot be an employment effect on the higher paid. We are not bothered about them because, after all, some of us qualify. But for the lower paid workers we have to protect them from themselves. There is a disproportionate employment effect. The elasticity works only at the bottom.
That is a strange economic theory. But the theory is that the rich can get more and more and we shall employ more and more of them; but if we allow the poor to get a penny more we shall not want any at all. However, I shall not press this amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendments Nos. 93 and 94 not moved. ]
8.30 p.m.
Lord McCarthy Lord McCarthy moved Amendment No. 95:
Page 17, line 13, leave out ("national average") and insert ("general level").
The noble Lord said: This is our old friend the general level of pay. In this part of the Bill the Government want to keep in the "national average" and we want to insert the "general level" of pay. We want to substitute the test of the general level for the Government test of the national average when the members of the new wages councils decide whether rates of pay should be raised, and by how much.
The Government say that they are concerned about wages councils pricing workers out of jobs. As I said, they wrote many letters to the chairmen of the wages councils complaining of this. They are now going to give councils this statutory direction under Clause 14(6) that they must have regard to the effect of the proposed increase on the employment of the workers and make special note of the position where the pay is generally less than the national average.
In this amendment, and it is partly a probing amendment, we propose to find out what the Government have in mind. To some extent in his previous answer the Minister has told us something of what the Government have in mind, but we are still seeking enlightenment and we are trying to find out by asking a series of questions.
The first question has probably been partly answered. Is the assumption that if wages are generally less than the national level they are not likely to be raised or increased at all, and if so by very little? The Minister seems to have told me that that is the case. Secondly, is it the case that if they are not generally less than the average level, the worker can expect the wages council to give him a reasonable increase? Does the reverse happen? Is it the case that when they look into the average level of payment and find that it is not bad, they will say, "We therefore assume that there is not a negative employment effect and can allow an increase, say, like the RPI"? Is the obverse the case in the way that the Minister seemed to suggest in an earlier answer? Thirdly, what does the Bill mean—what do
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the Government mean—by the national average for such workers, and how does one discover it?
Take the laundry hands or the sackers and baggers under the sack and bag wages council. How does one discover the national average for those workers? They should be getting what the wages council determines. If the wages council system works and if it operates effectively—and we assume that the Government do not accept what we say: that there is a great deal of evasion at the moment because the inspectorate is constantly being reduced—then most people in the wages council industries should be getting on average more or less what the wages councils award—perhaps a little more. Not many of them should be getting less.
So what is this average that we are discussing, and how does one arrive at it? What about those workers who are below the average? Since only one rate is to be allowed, what rate do the Government think should be applied to those people who are below the average? Suppose that the rates are substantially higher than the wages council rates, as indeed they are in one or two wages councils. Does that mean that there will be no increase at all?
We suggest that many of these questions arise because if the members of the wages councils take this part of the Bill seriously they will be searching for a meaningless average, which in some cases nobody is actually being paid because it is made up by taking all the payments made to all the workers and dividing that figure by the number of workers in the industry, in so far as we have the figures.
What is much more realistic and is generally applied in collective bargaining is the concept of the general level, which was introduced into previous legislation. The general level takes account of distribution. It does not add up every worker and then divide the total by the number first thought of. What one is thinking about in the general level is some notional figure which most people are receiving most of the time, below which very few people are falling and above which there may be a minority of people. It is a distributive and not an averaging concept and it is a much more sensible concept to have in the Bill.
We are trying to help the Government on this occasion because it is arguable that what we suggest will not, in their terms, be any more inflationary than what they suggest. It is rather easier to work out and rather more what industrial relations practitioners would expect; and it does not depend on artificial attempts to calculate and divide by an arbitrary number. I beg to move.
Lord Trefgarne: As I have said in speaking to an earlier amendment, Clause 14(6) requires councils, before making a wages order, to have regard to the effect that the rate they fix will have on the level of employment among workers covered by that wages order, particularly in those parts of the country where the remuneration of such workers is generally lower than the national average for the workers concerned.
For the system to operate on a national basis, allowance must be made for the effect that the order

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will have on those areas where the pay rates are traditionally lower than the national average. The term "general level" is one of uncertain meaning, and amending "national average" to "general level", as Amendment No. 95 requires, would mean that the councils would have no clear bench-mark upon which to base their deliberations. I think that the proposal of the noble Lord would add considerable uncertainty and confusion and I hope that it will be resisted.
Baroness Seear: I am genuinely very confused about this matter because if one has a single wages council figure then it is illegal if anybody falls below it. I think that is agreed between us. But anything that is above that figure is what the employer has seen fit to pay. However, I do not see where the low pay comes in. Except by breaking the law, one cannot be below what the wages council has laid down.
So what is the Minister really talking about? Is he taking into account those places where the employer is paying considerably above that amount and so raising the average figure above the minimum laid down by the wages council? Nobody can be below it except by being in breach of the law, as I understand it. I am genuinely confused about what he is trying to say, or rather about the sum that he is trying to do. What is the arithmetic of it? That is the point.
Lord Trefgarne: As I understand it, wages councils set different rates for different parts of the country.
Lord McCarthy: On the contrary, there are very few wages councils so far as I know—maybe there are one or two—which set a London rate. The general practice in wages councils is not to set premia which are related to different parts of the country. Anyway, the Government would be taking this provision out, because even if it were done, under this Bill it will not be allowed in the future. Under this Bill there will be one single rate. With her usual preciseness, the noble Baroness has made the point much better than I did in a much longer and more flaccid way.
One of the reasons I say that the word "average" is meaningless is that people should not be below the average. They could be below the general level but they could not be below the average.
Lord Trefgarne: If the word "average" is meaning-less, the words "general level" are worse than meaningless.
Lord McCarthy: On the contrary. The noble Lord cannot get away with that remark. There was a general level referred to in the 1978 Act. This was applied by the CAC for years and years with no problem whatever. It is a concept that is very generally known in industrial relations. I am not trying to correct the noble Lord's ignorance, but he cannot come along and say that a phrase such as "general level" is unknown in industrial relations. It is very well known in industrial relations, whereas the concept of the average is just a statistical, isolated nothing. As the noble Baroness has said, unless one is facilitating the breaking of the law
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then "average" cannot be put in. Will the noble Lord try to answer the point before I withdraw this amendment?
Baroness Seear: There is genuine confusion over this point. I ask the Minister whether he will please take this matter back and look at it again because in industrial relations terms it does not make sense. Honestly, it does not make sense. We have a great deal of sympathy with the Minister. His mind is on defence, and that is enough to keep anybody very busy. He cannot be expected also to be a great expert on wages councils, which is an irritating and fiddly subject, as we all know.
While the Minister is thinking about this point, will he also think about another point? The noble Lord, Lord McCarthy, did not give me a chance on a previous occasion to say this, but while I am on my feet I shall say it now. Will the Minister take back subsection (6) and look at it again? Will he look again at the extraordinary remark:
"such other matters as appear to it to be appropriate"?
What on earth are members of wages councils expected to do except to take into account such matters as appear to them to be appropriate? The Government soon will be telling them how to breathe. I ask the Minister to please have a look at this matter again; I beg him. It is ridiculous as it is.
Lord Trefgarne: I do not think that it is ridiculous at all. Indeed, in many respects it largely mirrors the arrangements that have been in place for a long time. The new factor here is the employment factor.
Perhaps I may clarify what I said earlier. It is perfectly possible to be paid below the average while being paid more than the wages council rate. That arrangement of course would be much more difficult to sustain if we accept the amendment.
Lord McCarthy: The noble Lord is clearly saying that he will not take this away and think again. Nevertheless, it is twenty to nine and I shall not divide the Committee. With great reluctance, because the Government are quite hopeless on the subject. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 96:
Page 17, line 13, after ("workers") insert—
("( ) the effect that that rate will have on the living standards, efficiency and rate of turnover of the workers to whom it applies;").
The noble Lord said: We on this side of the Committee have listened to the noble Lord with growing exasperation, tinged with admiration. He is batting on a very sticky wicket indeed. The noble Lord, Lord Young, is not here to deal with the matter. It is his business, but he has seen fit to put in the Minister of State for Defence Procurement, and he is not making a very good job of defending the noble Lord's Bill. I think that he has probably missed his

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vocation. This is where the admiration comes in. He has stonewalled so very well tonight that he should have been a cricketer. Had he been, I think that Trevor Bailey would have taken second place to him. He will be known after tonight as "Stonewall" Trefgarne.
Lord Wedderburn of Charlton: Or "The Night Watchman".
Lord Stoddart of Swindon: Yes, depending on how long we go! The noble Lord has not helped us very much tonight. We can only hope that he will help us on this amendment. It is related to all the others. My noble friend Lord McCarthy tried to help him by moving Amendment No. 92. Had he accepted that amendment, none of the others, including this one, would have been necessary. But he did not and so we have to move this one.
Had Amendment No. 92 been accepted, wages councils would not be burdened with the need to take into account unemployment in fixing levels of pay and could have continued to take a wide range of elements into account. Amendment No. 92 was not accepted, and that is a great pity. We must therefore seek to add to and clarify the matters that a wages council in fixing the rate of remuneration should take into account in addition to the effect that a rate of pay will have on the level of employment.
The phrase in the Bill is:
"such other matters as appear to it to be appropriate".
I read that as being matters appropriate to the level of unemployment; to reduce wage levels in order to achieve what the Government believe will be achieved—that is, a lower level of wage so that, on their theory, employment will be improved. We do not believe that.
Our amendment seeks to add three elements: the effect on living standards, efficiency and the labour turnover rate in respect of workers affected. A wages council ought to take into account the living standards that a rate of pay will provide for the recipient. In so doing it should have regard not only to the basic living standard that will be available on a given rate of pay but also the relationship of that standard to the generality of living standards and the standards in closely related employment. Regard must also be given to trends in wage movements, as well as to the cost of living and any especial trend; for example, in housing costs.
I now come to efficiency. Here it is vital to ensure that any rate of remuneration set will attract an adequate number of people with the proper skills to perform the tasks demanded for the job to be done efficiently and profitably. Sweat-shop wages produce a sweat-shop mentality. As we know from the clothing industry, good management and unions are united in demanding proper wage rates, which should be enforced rigorously. The sweat shop is not good for British industry. It is unfair to good employers and eventually drives them out of business. It is not good for British industry generally, because quick profits and shoddy goods are the objectives, and those in the
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long run injure Britain's ability to compete at home and abroad. That consequently damages the economy generally. The Prime Minister is in favour of a fair wage for a fair day's work. I understand, and we agree. This part of the amendment would achieve that objective which is so dear to the Prime Minister's heart.
Finally, the amendment refers to the,
"rate of turnover of the workers to whom it applies".
It must be self-evident that wages councils in fixing a rate of pay should have regard to the labour turnover rate. That indicates most positively whether the rate of pay, and to a lesser extent conditions at work, are sufficiently attractive to retain workers in any given employment. If the rate of pay is too low, the labour turnover rate will be correspondingly higher. That is an indicator to the wages council that something needs to be done.
I hope that the noble Lord will be rather more forthcoming on this amendment. As my noble friend Lord McCarthy said, we are trying to help the Government and prevent them falling into a pit which in the long term will injure the Government, work people, employers and the good name and economic performance of this country. If he continues to stonewall and will not accept anything that we say, we can only conclude that the Government's sole objective is to drive down wages in the economy. If that happens, it will accord with the doctrine of the Chancellor of the Exchequer, the Prime Minister and I suppose every other Member of the Government that what needs to be done to resuscitate the economy is to make those who are rich richer and those who are poor much poorer. I beg to move.
Lord Trefgarne: I am sorry that the noble Lord thinks that I have been unreasonably stonewalling, as he calls it, throughout this stage of the Bill. I assure him that had my instructions been to resist all amendments, regardless of their merit, I should not be standing before the Committee this evening. All the amendments tabled have been considered carefully. Had there been merit in any of them, we should have recognised that fact. I shall not tell him which one, but there is an amendment later this evening on which I shall be saying just that. If you are good boys and get there quickly, with a bit of luck you might get a lollipop at the end of it! But I am afraid that that does not apply to this amendment, which reflects an unacceptable interference in matters which can be of no concern to government.
In the new legislation we are retaining the protection of the two central elements of pay—the basic rate and the overtime rate—to protect those on low pay, who have heavy domestic responsibilities which they could not otherwise meet, through family income supplement and a range of concessions and exemptions. In due course there will be the much improved family credit system.
While the Government accept that the councils should be able to set basic minimum rates in respect of those two elements of pay, it must primarily be the business of employers, and not third parties, to decide

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the level of pay which will recruit and retain the right kind of worker and which will maintain company efficiency. The Government must concern themselves with other ways of helping the low paid, by reducing their tax burden and the level of national insurance contributions. Above all, we must consider the employment prospects of those with no jobs and no pay. That is what is expressed in the Bill, and I hope that the noble Lord will recognise that.
Lord Stoddart of Swindon: We are excited now. We are waiting with baited breath for the amendment which the noble Lord will accept—a lollipop, though I think an ice cream would be more appropriate today. We shall wait and we must not look a gift horse in the mouth in advance. I shall be on tenterhooks until that great concession comes.
There is a fundamental difference between us; there is no question of that. The noble Lord confirms what I said earlier. The Government's great hope for the economy is that they can force down wages. They have a one-track mind on that. They believe that the only way the economy can be resuscitated and be made competitive is to drive down wage rates. The Bill is the way in which they intend to do that.
The Government are saying to us that while they will drive down wages they will protect people personally, in their personal lives, through family income supplement and later through the family credit system. In other words, the Government are saying they are prepared to subsidise low wages and bad employers. That is what that means. Let us make no mistake about it. As I said earlier, there is no substitute for a fair day's pay for a fair day's work. In the Bill the Government are seeking to ensure that there is an unfair day's pay for a fair day's work. To help their employer friends they are prepared to subsidise them because that will help them to force down the general level of wages.
Later of course the family income supplement and the family credit, as I suppose it will then be, will also be reduced. Once the Government's objective of forcing down wages has been achieved, they will come along and say, "We can no longer afford to pay these high family credits. The PSBR is getting out of control. We shall have to do something about that. We shall have to reduce the PSBR, and the only way we can do that is by not increasing family income supplement or family credit, and perhaps other benefits as well, in accordance with the increase in the cost of living". That is what will eventually happen.
Lord Trefgarne: That dastardly plot is a total figment of the noble Lord's imagination, I am sorry to say. I can assure him that the Government have no such ghastly scheme in mind. The noble Lord has made much of the unfairness of the Bill. There is nothing fair about having no job and no pay. That is what in a small way the Bill seeks to correct. I hope that the noble Lord will recognise that.
Lord Stoddart of Swindon: I do not recognise that. I believe that the Government's strategy is not good. It
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is unfair, because it militates against those in our society who are weakest and those who are already the lowest paid. Whether the Bill will create more employment is debatable. It may create more employment for certain classes of people, but it may put other people out of work. There is no certainty about that. The Government are taking a huge risk. They have embarked upon a policy which is unfair to the people to whom it should be fair.
I do not believe that what I was relating as the Government's overall long-term strategy is a figment of my imagination. We have been able to see that strategy developing slowly but surely since 1979. The Wages Bill is just one part of that strategy. We shall see more as the Government's plan unfolds. We shall always see that the poorest and weakest in our society will be on the losing end.
Baroness Seear: We do not go along with the drama that has been unfolded before us by the noble Lord, Lord Stoddart. I agree with the Government. We on these Benches have always argued in favour of an incomes policy, because we agree that wage increases which greatly exceed the level of productivity affect our ability to increase our market share. That is an argument for a sensible incomes policy to prevent excessive increases such as we experienced in the days of very high inflation.
We do not agree that the way to tackle the problem is to attack the people at the bottom of the pile. That is the point. If the noble Lord and the Government could keep separate in their minds the perfectly legitimate argument—the correct one in our view—that it is extremely dangerous for earnings greatly to exceed the level of productivity, thereby enfeebling us in world markets, I would go along with that. One does not solve that by attacking the lowest paid people. That is what the Government are doing in the Bill, and hence our objection. It is not for the reasons given by the noble Lord, but because the Government are attacking the wrong target.
Lord Trefgarne: I am not attacking anybody, if the noble Baroness will forgive me. The purpose of the Bill is to unshackle the structure which surrounds all these issues. Over the years a great web of controls has been built up around the wages council system to the extent that not only are employers discouraged but so, too, are employees in many cases. I hope that the noble Baroness will understand that we are seeking to help the matter, not hinder it.
Baroness Seear: I believe that the Minister believes what he says because I am sure that he is an honest man. If I may be blunt, I do not think that he understands the intricacies with which we are dealing. In the past I have operated a wages council system. I agree that there were certain unhelpful complexities with which one was better without. But the Government are going to an absured extreme now in saying that all we need is a minimum rate and protection of the overtime rate. I agree that we do not want to return to all the detail. It was a confounded nuisance. I often said that about the detail that was woven into the wages council system.

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The Bill goes from one extreme to another. The noble Lord is telling us that the simple additional safeguards for which we are asking will so greatly increase the problems of the small businessmen that they will drive him out of business. My goodness, we are always being told from those Benches that this country's future depends on small businesses. If they are so stupid that they cannot understand such small additions to the basic minimum as a holiday requirement and premiums for which we ask, they will go out of business anyway.
9 p.m.
Lord Dean of Beswick: I have listened carefully to the Minister's replies to some of the points made on this amendment. I do not think that the Minister understands how many of the establishments which come under the different wages councils work. If the Minister and the Government are so convinced that wage rates decided by the boards are too high, can he explain why such a substantial proportion of people covered by the boards are paid wages so low that the establishments in which they work have to impose surcharges of 12½ per cent. in gratuities in order to attract people to the jobs? How does he relate the two if the base rate is overpaid?
Lord Trefgarne: I have never said that the rates are too high or too low, certainly not in the context of these amendments. We are talking about the complex-ity of the arrangements that surround setting the rates. I think that the noble Lord is mistaken.
Lord Dean of Beswick: The Minister, a few minutes ago, was philosophising on the main purpose of the Bill. He actually said that it was to lower rates of pay in order to spread jobs out. I did not draw any other conclusion. The Bill cannot have any other effect or intent.
Lord Trefgarne: I do not think that the noble Lord has been here all afternoon, although I dare say that he has for a large part of it. We are now dealing with a separate part of the Bill to that discussed earlier, when we were debating the rates set for young people. That is a rather different consideration.
Lord McCarthy: The noble Lord cannot get away with that. We are dealing with an amendment that asks the Committee to put into the Bill the effect that the rate will have on the pay, the living standards, the efficiency and the rate of turnover—that is what the amendment says—of the workers to whom it applies. The noble Lord says that he cannot have this because—these are the words that he has used—he wants to unshackle the workers and employers. He wants to liberate the workers and the employers. He want to get rid of the complexity that weighs down the workers and the employers. I agree with the noble Baroness, Lady Seear. When the noble Lord utters words like "unshackle", "liberate" and "complexity",
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he does not really mean "attack". He does not like us saying that unshackling, liberating and making less complex is an attack.
But the mechanism of the Bill and the reason why he will not accept the amendment—he has been saying this all day—is that the mechanism by which the Bill works is by lowering the wages of the workers. It is lowering the wages of the workers who are already in employment in the facile hope, as I would say, although he may not, that this will get some people off the dole queue.
We say that there are many other ways of getting people off the dole queue. If the debate tonight was about employment, we would be boring the pants off him with various ways in which this could be done. But the Government believe that the only way—this is all that they will accept—is by attacking the workers and by lowering their wages. The noble Lord does not like our calling it an attack. In the same way, the burglar does not like his activities being called burglary. He likes to say, "It fell off the back of a lorry". But for those of us who lose the stuff, it does not make any difference what it is called. You lose the stuff, you lose the pay, and you lower the wages. That is the way the Bill is designed to work. It lowers the wages of those in employment in the facile hope that it will put into employment people who are unemployed. If the noble Lord does not like to face it, he should not be on that side of the Table.
Lord Stoddart of Swindon: I do not know whether the Minister wishes to respond. This has been an interesting and a lively debate. The fact is that the Minister is virtually alone. He has no defenders. He has had to defend himself against a concerted attack. No one has come to his rescue because, I suppose, no one agrees with him. The noble Baroness, Lady Trumpington, is sitting there looking very beautiful, but she has not come to his assistance in any sense at all. The fact is that the noble Lord, whether he understands this or not, is in charge of the Bill. He has been handling it tonight. It is a Bill that inevitably is going to drive down wage rates. The noble Lord believes that by driving down wage rates, people will be placed in employment. If that were true, Germany, which is a high wage rate economy, would have twice the unemployment that we have instead of having an unemployment rate of 8.6 per cent. whereas ours is 13.2 per cent. Bombay, instead of having mass unemployment, would be the richest city in the world and would have no unemployment. Those facts militate against the noble Lord's argument and his reasoning.
I feel sorry for the noble Lord because he is such a nice chap. I really do feel sorry that he has had to sustain this attack on behalf of his noble friend Lord Young, who, really, we would like to have got at. He is the chap we are after. In the light of what has been said—
Lord Trefgarne: Will the noble Lord remind me to which amendment he is speaking?
Lord Stoddart of Swindon: It is Amendment No. 96, the same one. We have had a good debate. In the face

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of his obduracy—it is, I understand, obduracy on behalf of his noble friend—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 97 not moved].
On Question, Whether Clause 14, as amended, shall stand part of the Bill?
Lord McCarthy: We wish to oppose that the clause stand part of the Bill. It is nice to be told that at some time this evening we shall get a little sugar loaf, a little knob of sugar of the kind that you might throw to the dog. It is nice to be told that it is coming, but it has not come yet. It has not come on this clause. We have moved a whole series of amendments, but the Government have been obdurate. The noble Lord does not like us to say that he has stonewalled, but the fact that he has stonewalled cannot be in doubt. He has offered us absolutely nothing. One might argue about whether, when he stonewalls, he is reasonable or justified, but that he stonewalls cannot be in doubt. We have tried to put back occupational rates, Sunday premia, piecework minima, holiday pay and shift premia, and he has said "No" every time. We even tried, in a very modest attempt to concede something, to say, "What about just putting in holidays without holiday pay?"
It is perfectly normal in this House as we all know—it has happened hundreds of times—that governments get up and say, "I do not like that part of your amendment, but I do not mind that other part. If you leave it with me I shall see what I can do." But the noble Lord did not say that. The noble Lord said, "I speak to the amendment". He tried to fence us off by saying, "That is the amendment. I am not going to say what I shall do if you gave me a slightly different amendment". That is a most untypical thing to do. That is because he does not have an inch to move. He has been told to stand there and stonewall, whether it is reasonable or unreasonable, and, apart from the sugar plum that is to come, he will go on being unreasonable, I have no doubt.
We even tried to get the Government to accept a three-year period of easing in. We tried to get them to take into account factors beside employment. We tried to get them to consider a very common concept in industrial relations: the general level. This concept was somewhat unknown to the Minister. Nevertheless, he would not take it on board or consider it, and he would not even say that he would go away and look at it.
The Bill now remains with this clause as it was when it came to the Chamber. There is to be nothing more than a single rate. There are no premia, there are to be no regional differentials; there is to be nothing but the single rate. It gets darker and darker. The water rises higher and higher. Soon it will be absolute night. Before it is night we have to divide against this amendment. We do not believe in it. We do not believe that it is justified. We do not believe that the Government have made any case at all.
There is the possibility that we shall be in total darkness, and while I can see my notes I must say that
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I do not accept that the Government believe they will solve the unemployment problem by this Bill. 1 have never believed it. I think they are in a hole. They are in a corner. They have ruled everything else out. When they came to office they thought they could solve their problem by M3, and M3 vanished. Now they do not like us to talk about it. The whole of the monetary basis of the Government vanished. They were not talking about wages councils when they came into office. It was not in their first manifesto but in their second, when their discredited monetarist policy collapsed. Then they believed that they could do it by reducing Government expenditure. They never reduced Government expenditure and now they feel in order to keep themselves in office they will have to raise Government expenditure. There are only the workers left. The Government cannot get up and say, "We have no solution for unemployment", because it keeps rising. Therefore they are forced to say that they will get back to full employment by driving down wages. I prefer to believe that those who understand it do not believe it; and those who believe it do not understand it. We oppose this clause.
Lord Trefgarne: Oh dear, oh dear, oh dear! When the noble Lord, Lord Stoddart, was speaking a few moments ago he referred to some of the actions this Government have taken. Just now the noble Lord, Lord McCarthy, was also referring to such matters. When this Government came into power in 1979 after five years or so of Labour party rule we found that the economy was grinding to a halt, to put no finer word on it.
Over the period of their administration, and indeed in earlier years—for some of which I dare say earlier Conservative governments were responsible—a great web of controls was being applied to businesses of every kind, not least to small businesses which are least able to bear them, least able to see their way through, and who suffer most grievously from them. Among the great web of controls to which businesses of every kind have been subjected over the years, I accept, has been that of the wages councils. They have been justifiably criticised, in the Government's view, for allowing themselves to lose touch with the needs of their industries by legislating in great detail and complexity for an enormous variety of terms and conditions of employment. The result has been wages orders which are, to a large extent incomprehensible to the audience at which they are aimed. I dare say that the noble Lord, Lord McCarthy, understands them. He is a distinguished practitioner in these matters, and I should not be surprised if he had not written many of them.
Not surprisingly there has been widespread confusion and many underpayments attributable to misunderstanding of these great works of art. In short, wages councils have brought themselves into disrespect in this regard. The responses to the consultative paper on wages councils showed a substantial measure of support for the proposition that wages councils' powers ought to be limited to fixing a single minimum hourly rate for basic hours. The Government took the view that it would also be sensible to provide for a single minimum overtime rate

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to apply in respect of time worked after basic hours, and to enable councils to set a daily limit on deductions for accommodation provided. The noble Lord will be aware that that is a particular feature of the hotel business.
Together, these would enable the core of the minimum wage-fixing system to be preserved, but allow employers and workers to agree other terms and conditions to suit their particular needs. This is in line with the Government's commitment to deregulation and lifting the burden from business, and that is an endeavour to which we are totally committed.
These reforms are important in the context of providing a framework within which employers in wages councils' trades can get on with running their businesses without having every conceivable detail of their workers' terms and conditions rigidly laid down without regard to the circumstances of small firms in particular. In that sense they are what the Government believe to be the correct balance between the twin needs of cutting out unnecessary bureaucracy and retaining basic safeguards for workers. I very much hope that the Committee will agree that this clause should stand part of the Bill.
Lord McCarthy: Before the noble Lord sits down, he is very fond of saying, and has been saying all night, that nobody can understand wages councils' awards. I wonder whether the noble Lord has ever tried to understand a wages council award. I happen to have by me a good 15 or so wages councils' awards, and most of them are very short. For example the mutton award covers only two pages and the toy award covers only two pages. Most of these awards are very simple and the great majority do not change year in and year out.
I shall present these documents to the noble Lord, so long as I can have them back. I should like him to read them and tell us at the Report stage whether he finds the slightest difficulty in any of them. I do not believe that the noble Lord is stupid and I do not even think that the average small businessman is stupid. I think that it is a put up job. There is nothing complicated about these wages councils' awards, and the noble Lord should try reading them.
Lord Trefgarne: I am grateful to the noble Lord for offering me some short, sharp documents. Whether or not they are the ones in which he had a hand I do not know. However, in return I should be happy to send the noble Lord some which are long and incompre-hensible.
9.16 p.m.
On Question, Whether Clause 14, as amended, shall stand part of the Bill?
Their Lordships divided: Contents, 37; Not-Contents, 20.

DIVISION NO.5

CONTENTS

Belstead, L.

Hooper, B.

Boardman, L.

Long, V.

Brabazon of Tara, L.

Lyell, L.

Brookes, L.

Macleod of Borve, B.

Caithness, E.

Masham of Ilton, B.

Carnock, L.

Monk Bretton, L.

Coleraine, L.

Montgomery of Alamein, V.

Craigmyle, L.

Mottistone, L.

Crathorne, L.

Murton of Lindisfarne, L.

Davidson, V.

Shannon, E.

De La Warr, E.

Skelmersdale, L.

Denham, L. [Teller.]

Stodart of Leaston, L.

Elliot of Harwood, B.

Swinton, E. [Teller.]

Elton, L.

Teviot, L.

Fanshawe of Richmond, L.

Trefgarne, L.

Ferrers, E.

Trumpington, B.

Gardner of Parkes, B.

Vaux of Harrowden, L.

Gray, L.

Zouche of Haryngworth, L.

Hives, L.

NOT-CONTENTS

Airedale, L.

Ponsonby of Shulbrede, L.

Carmichael of Kelvingrove, L.

[Teller.]

Dean of Beswick, L.

Rochester, L.

Grey, E.

Seear. B.

Hatch of Lusby, L.

Stoddart of Swindon, L.

McCarthy, L.

Tordoff, L. [Teller.]

McNair, L.

Turner of Camden, B.

Morton of Shuna, L.

Underhill, L.

Mountevans, L.

Wedderburn of Charlton, L.

Parry, L.

Wells-Pestell, L.

Pitt of Hampstead, L.

Resolved in the affirmative, and Clause 14, as amended, agreed to accordingly.
9.23 p.m.
Schedule 3 agreed to.
Clause 15 [Application of wages orders to piece workers]:
[Amendment No. 98 not moved.]
Clause 15 agreed to.
Clause 16 [Effect and enforcement of wages orders]:
[Amendment No. 99 not moved.]
Clause 16 agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 99A:
After Clause 16, insert the following new clause:
("Computation of remuneration.
.—(1) For the purpose of determining, for the purposes of this Part, the amount of remuneration paid to a time worker by his employer in respect of time worked by the worker in any week there shall be added together—

(a) the total amount of any money payments made by the employer to the worker, on or before the relevant pay day, by way of remuneration in respect of time worked by him in that week, and

(b) the total amount of any deductions made by the employer (whether in accordance with Part I or not) when making the payment of wages which consisted of or included those money payments, apart from deductions falling to be left out of account under this paragraph by virtue of subsection (2), and then, from the aggregate of those amounts, there shall be subtracted the aggregate of—

(i) the worker's necessary expenditure in connection with his employment to the extent that such expenditure is attributable to that week and is not met, or designed to be met, by an allowance paid to him by the employer, and

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(ii) the total amount of any payments received from the worker by the employer (whether in accordance with Part I or not) and falling to be taken into account under this paragraph by virtue of subsection (3).

(2) The following deductions shall be left out of account under subsection (1)(b), namely—

(a) any deduction in respect of the provision of living accommodation for the worker by the employer to the extent that the deduction exceeds any limit for the time being in force in relation to the worker by virtue of section 14(l)(c), and

(b) subject to subsection (4), any other deduction made by the employer for his own use and benefit (and accordingly not attributable to any amount paid or payable by him to any other person, or to any authority, on behalf of the worker).

(3) The following payments by the worker shall be taken into account under subsection (l)(ii), namely—

(a) any payment made by the worker to the employer in respect of the provision of living accommodation for him by the employer to the extent that the payment exceeds any limit for the time being in force in relation to the worker by virtue of section 14(l)(r), and

(b) subject to subsection (4), any other payment made by the worker to the employer and retained by the employer for his own use and benefit (and accordingly not attributable to any amount paid or payable by him to any other person, or to any authority, on behalf of the worker),

being in each case a payment due from the worker in the week in question.
(4) Subsections (2)(b) and (3)(b) do not apply to deductions made or payments received by the employer on account of any of the following matters, namely—

(a) any conduct of the worker or any other event in respect of which he (whether together with any other workers or not) has any contractual liability,

(b) any advance under an agreement for a loan or any advance of wages,

(c) any goods or services supplied by the employer (whether in connection with the worker's employment or not), or

(d) the purchase by the worker of any shares or other securities or of any share in a partnership; and accordingly any such deductions shall not be left out of account under subsection (l)(b) and any such payments shall not be taken into account under subsection (l)(ii).

(5) The preceding provisions of this section shall apply to a piece worker as they apply to a time worker but as if, in subsection (1), any reference to remuneration in respect of time worked by the worker in any week were a reference to remuneration in respect of—

(a) work executed by him in any week, and

(b) any such time as is mentioned in section 15(4) that occurs during the week.

(6) In this section—
"deduction" does not include any such deficiency in the payment of wages as is mentioned in section 8(3);
"money payment" means—

(a) a payment in cash,

(b) a payment by cheque or by a money or postal order issued by the Post Office, or

(c) a payment (however effected) into any account kept with a bank or other institution;

"relevant pay day", in relation to any week of a worker's employment, means the day on which his remuneration in repect of that week is payable;
"wages" has the same meaning as in Part I.").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 99B not moved.]
Clause 17 [Computation of remuneration]:
[Amendment No. 100 not moved.]
Clause 17 disagreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 100A:
After Clause 17, insert the following new clause:
("Apportionment of remuneration
.—(1) This section applies where—

(a) in respect of part of the time worked by a time worker in any week ("the relevant period") the worker is entitled to the statutory minimum remuneration provided for him by an order under section 14, and

(b) in respect of the remainder of the time worked by him in the week ("the remaining period") the worker is not entitled to any such remuneration or is entitled to any such remuneration by virtue of another such order;

and in this section any reference to the worker's computed remuneration is a reference to the amount of the remuneration paid to the worker in respect of the time worked by him in the week in question as determined in accordance with section (Computation of remuneration).
(2)Subject to subsections (3) to (5), the amount of the worker's computed remuneration that is to be attributed to either the relevant period or the remaining period for the purposes of this Part shall, if not apparent from the terms of the worker's contract, be the amount which bears to the total amount of the worker's computed remuneration the same proportion as the relevant period, or (as the case may be) the remaining period, bears to the total time worked by the worker in the week in question.
(3) Where any particular amount falling to be added or subtracted under section (Computation of remuneration) (1) as it applies to any week is exclusively referable to the relevant period, the amount of the worker's computed remuneration to be attributed to that period for the purposes of this Part shall be determined by either—

(a) adding the unattributed balance of that particular amount to the amount to be attributed to that period in accordance with subsection (2) above, or

(b) subtracting the unattributed balance of that particular amount from the amount to be attributed to that period in accordance with that subsection,

according to whether that particular amount falls to be added or subtracted under section (Computation of remuneration) (1); and a corresponding adjustment shall be made in the amount of the worker's computed remuneration to be attributed tor the purposes of this Part to the remaining period.
(4) In subsection (3) "the unattributed balance", in relation to the particular amount in question, means so much of that amount as is not taken into account for the purpose of determining the amount to be attributed to the relevant period in accordance with subsection (2).
(5) Where any particular amount falling to be added or subtracted under section (Compulation of remuneration) (1) as it applies to any week is exclusively referable to the remaining period, subsections (3) and (4) shall apply to any such particular amount as if—

(a) any reference to the relevant period were a reference to the remaining period; and

(b) the reference in subsection (3) to the remaining period were a reference to the relevant period.

(6) The preceding provisions of this section shall apply to a piece worker as they apply to a time worker but as if—

(a) any reference to time worked by the worker in any week were a reference to work executed by him in any week; and

(b) the word "work" were substituted for the word "period" wherever occurring;

and for the purposes of those provisions as they apply to a piece worker in accordance with this subsection the worker shall be treated as executing work during any such time as is mentioned in section 15(4).").
The noble Lord said: Again, I have spoken to this amendment. I beg to move.
Lord McCarthy: The noble Lord said when he moved this amendment that he had spoken to it. I accepted that, but we wanted to have this clause moved separately. I do not want to quarrel over that at this time but I should like to ask him whether he would

507
do the same thing in respect of this clause as I asked him to do in relation to the earlier clauses that he moved at that time; that is to say, that we should have notes on the clause. It is just as complicated as the previous clause, if not more complicated.
I should like to return to the answer that he gave me on that occasion because, with respect, I do not think that he quite said that he would give us Notes on Clauses. First of all, he said on these new clauses that he would write to me. Then he said he would write to me and that he would put a copy of what he wrote to me in the library. With the greatest respect, I do not think that that is enough. There are many people in this Chamber—some of them are here tonight and some may not be here—who would like to have an amplification of what these new clauses mean.
We had Notes on Clauses circulated for all the other clauses in the Bill and I believe that it would be only reasonable to ask that the Government do exactly what has been done in regard to all the rest of this Bill. In respect of these two complicated amendments— there is one about putting five people on the wages council; and even we can understand that—I want to ask him once again whether he will publish Notes on Clauses.
Lord Rochester: I should like to support that and to ask that a copy of any letter going to the noble Lord,
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Lord McCarthy, on this subject should come to me as representative of those of us who have been involved in the Bill from these Benches; and, it may be, to other noble Lords who have taken a prominent part in the proceedings.
Lord Trefgarne: I am happy to assist the noble Lord, Lord McCarthy, and other noble Lords in this way. May I suggest that I write to the noble Lord, Lord McCarthy, in a very full way, certainly no shorter than he would expect from a note on a clause, and copy that letter to every noble Lord who has taken part in this debate today?
Lord McCarthy: My noble friend Lord Stoddart is a much older hand and is shrewder than I am about these matters. I wonder whether the noble Lord the Minister can let us know whether we passed the sugar plum. We are, at this time of night, trying to help the Committee and so we are not moving everything. It would be a tragedy if, as a result of not moving a particular amendment, we were to lose the sugar plum.
Lord Trefgarne: I do not think the noble Lord has passed the sugar plum, but if I find that, inadvertently he has, I will try to find another one.
On Question, amendment agreed to.
Clause 18 [Obligation to keep records etc.]:
9.30 p.m.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 101:
Page 22, line 6, at end insert—
("(2A) The employer of any such workers who are homeworkers shall give to those workers a statement in writing informing those workers—

(a) of any order under section 14 or proposal under para-graph 1 of Schedule 3 that affects them, and

(b) of such other matters as may be prescribed.").

The noble Baroness said: I rise to move Amendment No. 101 and to return again to the question of home workers, which was touched upon earlier, notably on an amendment which dealt with young home workers. This clause deals with home workers generally, and the object of the amendment is to attempt to write in some continuing protection for home workers. I do not want to repeat what we have been saying on this side of the Committee almost all afternoon, but we are again talking about vulnerable and often badly exploited people. In the case of home workers we are in fact talking mostly about women. As I understand it, there are approximately 30,000 home workers covered by wages councils today. Their wages are notoriously low. A survey carried out by the Low Pay Unit in 1983 found that one-third of the sample still earned less than 50p per hour, while three-quarters earned £1 or less.
Home workers, more than any other type of worker, find themselves vulnerable to exploitation by low wages. They are a captive workforce and their child care responsibilities are normally the reason why they are unable to go out to work and so they have to seek work that can be done at home.
A number of surveys of home workers have been conducted in recent years. An ACAS survey of the toy industry, for example, found that 58 per cent. of home workers in the industry were mothers with young children. The Department of Employment has found that most home workers, though not all of them—as was stated earlier, there are some young home workers —are aged between 25 and 44 and have dependent children of school age.
It is generally supposed that home workers are employed on simple, unskilled work, but a surprising proportion, according to studies carried out, have prior industrial experience and skills. Home workers are trapped in their homes and are therefore non-unionised and work in isolation. However, it should not be thought from that that the trade unions and the trade union movement have paid no attention to them. Indeed, I was myself a member of a TUC committee some years ago which did extensive work into the conditions of home workers and produced much documentation on the subject.
Although the hour is late, because it gives some indication of what conditions are applicable in certain types of this work I should like to read a very short extract from the results of the research that we then carried out. This concerns a woman engaged in this sort of work and she describes what it is like—
Lord Trefgarne: I wonder if I may interrupt the noble Baroness. I apologise for intervening in her most
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interesting speech, but it may assist her to know that the sugar plum is in front of us now.
Baroness Turner of Camden: In that case, I am so happy to give way. I should like to hear what that is and I am most grateful to the noble Lord. I wait with great interest to hear what he has to say. I beg to move.
Lord Trefgarne: I am sympathetic to the proposi-tion in this amendment. I am advised that the words are not entirely perfect, but if the noble Baroness will withdraw this amendment I will undertake to bring one back at the next stage which achieves what she desires.
Baroness Turner of Camden: I really am most grateful to the noble Lord. With great pleasure 1 beg leave to withdraw the amendment and I await his wording with keen anticipation.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clauses 19 and 20 agreed to.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 102:
After Clause 20, insert the following new clause:
("Unfair dismissal and Wages Council.
.—(1) The dismissal of an employee to whose remuneration a wages council order relates shall be regarded as unfair for the purposes of Part V of the 1978 Act if the reason for it (or if more than one, the principal reason) is that the employee has made, or proposes to make, a complaint or other communication to an officer appointed under section 19 of this Act.
(2) Section 64(1) (a) (qualifying period) of the 1978 Act shall not apply to a dismissal to which subsection (1) above applies
(3) In section 71(2)(6)of the 1978 Act, after the words "section 58 or 59(a)", there shall be inserted the words:
"or by virtue of section 20A of the Wages Act 1986".
(4) An employee shall have the right not to have action (short of dismissal) taken against him as an individual by his employer if the reason (or if more than one, the principal reason) falls within subsection (1) above.
(5) Sections 24 to 26 of the 1978 Act shall apply to action which contravenes subsection (4) above as they apply to section 23 of that Act.").
The noble Lord said: I feel sure that the noble Lord, Lord Trefgarne, when he reflects, will feel that he gave only half the lollipop, in the sense that he has gone away to find a better one. So he has a bit left in the bottom of the barrel and I feel sure that, if he looks hard, he will see that it was reserved for this important amendment, which is concerned with a general point for the workers covered by wages councils.
Workers covered by wages councils are relatively unprotected by many of the other mechanisms of our industrial society—a point that has been flowing through many of the debates about the specific workings of the wages councils. One essential step which such a worker will have to take in order to protect his position, whatever is left of the wages councils, is a communication to an inspector or other officer appointed to enforce the mechanisms. If that worker is then victimised for so doing, he is a precise parallel to someone who is victimised for trade union activity, because the justification for wages councils —at least, in large measure—has historically rested, whether they did it well or did it badly, upon the fact that they stood in place of collective bargaining.
So that since the Government have not seen fit, in their long period of office, to take out the protection of workers from unfair dismissal—which is automatically unfair if they take part in union activities or have trade union membership—although they have added non-unionism as a parallel, here is the third part of the tripod: the case where the worker is trying to enforce the basic mechanism by which his conditions can be upheld against (it may be rare, or it may be frequent in his part of the industry) the employer who will not observe the basic conditions.
On that basis we have constructed this amendment, which is precisely parallel and analogous to the position in other parts of industry, outside wages councils; that is to say, there is no qualifying period, because there is no qualifying period where the dismissal of a worker for trade union activities takes place, as that is such a bad reason for dismissal that Parliament in its wisdom (and it appears to be bipartisan in that no-one seems to want to change the fact that the worker who is dismissed for trade union reasons needs no qualifying period) has decided that you do not require a qualifying period of two years or any other period of service.
So for the same reason we have included here the enhanced compensation, because if you are dismissed for a trade union reason you get the enhanced compensation, to which the Government have added—we think unwisely—if you are dismissed for non-unionism. Nevertheless, there it is. Here we say that if someone is victimised by dismissal (to which we add action short of dismissal in the last subsections of the amendment, because it is only logical that what you do for dismissal you do for action short of dismissal, on the pattern of our employment protection legislation) then what we do in those circumstances in the area of trade union dismissals we do here; that is to say, if a worker is victimised because he has taken a step which it is necessary for him to take to enforce the position of a basic—as it will be if the Government get their way—one-rate remuneration in the wages council.
I hope that this very simple and very moderate amendment will not meet the regiment of the new, young liberation army which is marching across industry to liberate employers from every possible complexity. At least if it does, the Government had better tell us when they are going to get rid of the rest of the unfair dismissal legislation, because there is absolutely no case for opposing this amendment unless you believe that unfair dismissal should go and more particularly that unfair dismissal for trade union reasons, or non-union reasons on the Government's logic, should also go from its special place. It is a perfectly normal logical amendment which simply makes sense of the position. I beg to move.
Lord Trefgarne: The effect of this new clause, as the noble Lord has said, would be that dismissal or action short of dismissal taken against employees covered by a wages council (with the exception of those aged under 21) would automatically be regarded as unfair if the reason for it (or, if more than one, the principal
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reason) was that the worker had made or intended to make a complaint or other communication to the wages inspectorate. I do not consider that the provisions of Part II of this Bill are in the same category as fundamental rights such as the right not to be discriminated against on grounds of sex or race or the right to belong or not to belong to a trade union. I dare say that the noble Lord does not share that view and I shall not attempt to persuade him to change his mind. But I am sure he recognises the protection which currently exists for a wages council worker who finds himself in this situation.
If a worker is dismissed for having made a complaint to the wages inspectorate and he has the necessary qualifying service, he can take his case to an industrial tribunal. The onus would be on the employer to show that in the circumstances he had sufficient reason for dismissing the worker. Where as a result of having made a complaint to the wages inspectorate the employer's conduct towards the worker is such that the worker terminates his contract of employment, again he can complain to a tribunal on the grounds that he has been constructively dismissed. It would be for the tribunal to decide whether the employer's conduct amounted to constructive dismissal.
These are substantial protections which strike the right balance between the legitimate interests of workers and the burden the legislation places on employers. I do not believe that there is any justification for special provisions of the kind proposed. I hope that the noble Lord will not press the new clause.
Baroness Seear: I am afraid that I find it very difficult to follow the Minister's logic. You have a wages inspectorate here in order to enforce the legislation, just as you have a factories inspectorate in order to enforce the factories legislation. In both cases one of the only ways in which it can operate is for people who think an offence is being created to go and tell the inspectorate.
It used to be a requirement to have the address of the factory inspector at the works in order that people could do precisely that. There is no other way. You cannot have the inspectorate crawling all over industry the whole time. The information that comes from people who think they are affected by a breach of regulations is a major method of enforcement. You will have to treble the inspectorate if you are going to attempt to make the wages council orders enforceable but are not going to allow people without protection against dismissal to write to the inspectorate and say "Look, I have been cheated". For decades and decades this has been a traditional way of enforcing legislation. It saves an enormous amount of manpower in the inspectorate.
Lord Trefgarne: I would not want the noble Lord to think that I am unsympathetic to the predicament in which a worker might find himself in these circumstances. The noble Lord and the noble Baroness will understand the philosophy that lies behind this Bill and which I have repeated on a

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number of occasions during the course of this evening. I shall spare the Committee another repetition of that. But if it will help the noble Lord perhaps I may consider the matter a little further and see whether there is any accommodation I can suggest.
Lord Wedderburn of Charlton: I am grateful to the Minister and will confine myself merely to one remark which is meant to help him in his mature reflections and his search for other plums. It is the case in the Government's own consultative document that two-thirds of the wages councils' workforce is part time and that four-fifths of the workers are women. When one adds to those the other well-known facts concerning the situation of continuous employment, the idea that such workers are well served, while the rule is that they should have two years' continuous employment before they can go near a tribunal, will perhaps give the Minister pause for thought. I am grateful that he will look at this matter again and I look forward to the results of that scrutiny. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 21 and 22 agreed to.
9.45 p.m.
Clause 23 [Transitory provisions relating to existing wages councils and wages orders]:
[Amendment No. 103 not moved.]
Lord McCarthy Lord McCarthy moved Amendment No. 104:
Page 26. line 1, leave out subsection (4)
The noble Lord said: I am not sure what one keeps plums in. One does not keep them in barrels, one does not keep them in tins, and one does not keep them in jars—and when one eats plums, they do not usually come off trees. But whatever the Minister keeps his plums in, I can only hope that he has one or two left. These two amendments are in a sense probing amendments that do slightly different things. However, we agreed through the usual offices that they should be taken together.
Both amendments are an attempt—and I make no bones about this—to reassure those trade unions who have told us that they are worried about the transitional period. They are worried that it seems, from the face of the Bill, that the Secretary of State can unilaterally, the, day after the Act is implemented, act so as to cancel existing orders and impose new ones. That worries the users of the wages councils system, and they have asked us to find out whether the Government are prepared to consider some way of avoiding such a possibility.
The aim of Amendment No. 104 is to prevent the Secretary of State from taking such action altogether. The aim of Amendment No. 105 is not to prevent him from taking such action altogether but to provide that:
"On a date not less than two months before introducing an order under subsection (4), the Secretary of State shall notify the relevant wages council and provide them with an opportunity to voluntarily vary the terms of an existing order".
Therefore, there are two ways of achieving such a
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safeguard. Amendment No. 104 is a much more draconian and, one might like to say, extreme way of achieving it. If the Minister were to say to me that he does not like Amendment No. 104 but would think about Amendment No. 105, then we would in fact find another plum.
The situation is that the present expiry dates for wages councils orders are for the most part late in 1986 or early in 1987. For example, the expiry of the wages council order for the clothing industry is December 1986; for hairdressing, April 1987; for the licensed non-residential wages council, January 1987; for the licensed residential wages council, October 1986; for retail food, April 1987; and so on. Surely it would be feasible to give those involved time to establish whether, through the voluntary system and through the wages council itself, it would be possible to adapt to the new system. Otherwise, it is possible that the day after the Act is implemented, the Secretary of State himself could instantly and unilaterally act to cancel the existing orders and impose new ones. I beg to move the first amendment standing in my name, though I have spoken to them both.
Lord Trefgarne: Clause 23(4) enables the Secretary of State to make an order, (a) disapplying all or any of the provisions of an existing wages order, and (b) restricting the operation of such an order between the date of the passing of the new legislation and the coming into force of a wages order made under the provisions contained in Clause 14.
Amendment 104 would remove this power. This could mean that the existing wages orders might be preserved in their entirety for a prolonged period, possibly a year in some cases, if the councils so chose. By taking the power embodied in subsection (4). we can, if we consider it necessary, act in order to pursue our deregulation policies at a more vigorous pace. Though no decisions have been taken on how it might be used, this is not a power we are prepared to surrender.
Amendment 105 would simply delay the speed with which the Secretary of State could make orders under the subsection and, even though the delay would be shorter, the same objections apply. Wages councils have in the past been given ample opportunity to simplify and streamline their procedures, but sadly with little result. I see little point in consultation for the sake of consultation when it is known by everyone that the end result will be the same. I therefore hope that your Lordships will not accept these amendments.
Lord McCarthy: I should like to be absolutely clear on what the noble Lord is saying, because it may be worse than I feared. I had thought that the intention was that after the Bill became law the Government would not seek to impose new orders without the intervention of the wages councils. Of course it might be the case, as he says, that a dilatory wages council would sit around and try to delay matters for 12 months, or so. The Government would therefore need, as the noble Lord said, this reserve power in subsection (4). Of course, they could always replace the members.

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Surely it is not the intention of the Government not to give existing wages councils any time at all. Surely it is their intention that, in the move from the old system to the new system, the fixing of a single basic rate—which is the most important effect and, one might say, the only significant function left to these poor bodies—would be decided by the councils and not by the Government.
If the councils are dilatory the Government may step in, but if they act within normal periods and renew the wage orders as they normally do at twelve-monthly intervals, surely that would be all right. Some of these wages councils I have mentioned have six or seven months before they introduce their next order —for example, retail foods, which has until April 1987. Surely there will be no objection if it introduces the next order in April 1987. Are the Government going to rush the council and say that they want the order by next week otherwise they will invoke subsection (4)? One hopes that the normal expectation of the Government will be that these councils will have the normal period and will do it their way.
It is a very critical first decision that the councils have to make. They have to decide where to fix the rate, knowing that it is to be the only rate they will be allowed to fix, particularly if they have differential rates. Will they seek to fix it slightly above their lowest rate? Or will they think they have somehow to move, in some way, at the lower end, the lower quarter, of their series of rates? Surely that is a job for the wages councils. It would be most inappropriate, and the Government have certainly not suggested it, if the Government suddenly pre-empted the one thing left to the retail non-foods wages council and did not give them until April 1987 to decide what to do but said that the Minister was going to do it for them next week. Surely that is not what the noble Lord is saying.
Baroness Seear: Once again I find it extraordinarily difficult to follow what the noble Lord the Minister is saying. We understood that the Government wanted to get off industry's back. The Government claim that they are not a centralising government but my experience has been that they are an extremely centralising government.
We have heard the word "philosophy" which I must say is a rather gradiloquent word for what is proposed in the Bill. The philosophy of the Bill is to free industry, and having set up a wages council to do that job the Government then proceed to say that they will override it and tell it what to do. I really must tell the Minister that if he intends to restrict the work of the wages councils so much and if he then gives the Secretary of State powers to override them, he will not get any people of any calibre whatsoever to agree to sit on his wages councils.
Lord Trefgarne: I believe that the noble Lord and the noble Baroness have perhaps read more into this provision than is really there. We have been discussing the provisions of this Bill for a long time and I dare say that, despite my inadequacies, the Members of the Committee are now coming to understand the essence of our intentions.
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The fact of the matter is that without the powers contained in these particular clauses we shall not be able to ensure that the decisions taken by the Committee and Parliament can be implemented in a timely way. I am sure that wages councils will now understand the way in which we wish to proceed and the way in which I hope Parliament will decide that they should proceed, and I dare say that by and large they will do so with proper expedition. But where there is some improper or excessive delay we want to be in a position to deal with that difficulty, and these clauses provide for that situation.
Lord McCarthy: With very great respect, it gets worse. I do not want to hound the noble Lord, but he has done it again. He has replied to Amendment No. 104, and everything that he says fits Amendment No. 104—it is rather like holidays again—but he does not reply to Amendment No. 105. Amendment No. 105 was tabled precisely because we thought that the Minister might very well say just what he did say about Amendment No. 104.
Let us look at Amendment No. 105. All that he is being asked to agree to on Amendment No. 105 is that,
"On a date not less than two months before introducing an order under subsection (4)".
So his power to stop the wages council mucking him about is still there; he has the power under subsection (4), but two months before invoking that power he will, you might say, have the courtesy to,
"notify the relevant wages council and provide them with an opportunity to voluntarily vary the terms of an existing order".
So, two months before he feels that he has to kick them up the backside, he writes them a letter and says, "In two months' time I propose to kick you up the backside if you do not move. Will you please voluntarily vary the terms of the existing order and not muck about?" That is reasonable enough. Surely the noble Lord can accept that.
Lord Trefgarne: Amendment No.105 is indeed a little less awful than Amendment No.104, but awful it is nonetheless! The fact is that if we were to agree to that amendment we should simply be accepting a delay in the way that the Secretary of State could ensure that the will of Parliament wasimplemented. I proceed. do not think that is a sensible way to proceed.
Lord McCarthy: Is it being said that the Government will not write the letter? If the noble Lord were to come to me and say, "We shall do that anyway" (because they often say that over there; they say that they will do it anyway so why put it in the law), it would not convince me but it would be a little more defensible. Is the noble Lord really telling me that they do not intend to write to them but that it will come out of the dark if they decide to violate the rights of the wages councils, even if the wages councils are only saying, "We shall do it on the due date"? Maybe they will do it in January 1987 and the Minister cannot wait that long. Is he saying that the Government cannot agree to that amendment because in those circumstances they do not propose to write to the damned fellows—let them stick it?
Lord Trefgarne: By virtue of this legislation we are inviting Parliament to change the arrangements. The noble Lord is suggesting that we should put some further delay between the decision that Parliament has taken and the implementation of Parliament's decision. I do not believe that that is a very good idea. After all, these wages councils—the ones about which we are particularly concerned—over a number of years have been generating the complex orders to which I referred at an earlier stage of this Bill. They are well aware of the anxieties about their shortcomings which are felt by the Government and which I believe Parliament will feel when the passage of this legislation has been completed.
They have had ample opportunities to overcome the difficulties and have not taken advantage of them. All that the noble Lord's amendment does is to see that those great disadvantages are perpetuated yet longer. I do not think that that is a good idea.
Lord McCarthy: I do not see that, but we shall not get anywhere on this. I would say that we shall come back to the matter on Report, but there are now so many things that we are to come back to that I do not know whether we shall have time, and so although I am very unsatisfied, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 105 not moved.]
The Deputy Chairman of Committees (Lord Airedale): I have to point out that if Amendment No. 106 is agreed to, I shall not be able to call Amendments Nos. 107 or 108.
[Amendments Nos. 106 to 108 not moved.]
Clause 23 agreed to.
Clauses 24 and 25 agreed to.
Clause 26 [Restriction of redundancy rebates to employers with less than ten employees]:
10 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 109:
Page 29, line 36, leave out ("nine") and insert ("199").
The noble Lord said: We are now into something quite different, although it is related. The Minister will explain this to us in so far as I get it wrong or leave things out, but in Part III of the Bill the Government are to do away with redundancy rebate, with an exception, and this amendment is concerned with the exception. I preface what I shall say by simply stating to the Minister that, having read what occurred in another place, I do not have a clear picture of the philosophy precisely lying behind the abolition of the redundancy rebate. He will no doubt explain that to us.
Perhaps it is partly because I do not understand the philosophy of the withdrawal of the rebate that I do not understand exactly why it is that new Section 104A, which Clause 26(3) is to insert into the Employment Protection (Consolidation) Act 1978,
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makes an exception of employers who will go on receiving the redundancy rebate by reference to:
"A payment made by an employer to an employee [for redundancy] and falling within subsection (1){a) or (b) of section 104 shall be treated as a qualifying payment if at no time on the appropriate date did the number of employees employed by the employer, added to the number employed by any associated employer, exceed nine".
Employment law has in the past been littered with exceptional provisions for small firms or small employers which have sometimes not had a great deal of explanation or reason. It is not a one-party matter. Although there was some reason given for it, from 1975 the need to present a written statement of health and safety policy was applied by a Labour Government, but not to those employers with four or fewer employees. The Sex Discrimination Act had certain exceptions in regard to small firms, again related to five employees, which had to go.
However, this Government made the situation very much worse. In 1980 they caused employees in firms with 20 or fewer employees to have two years' qualification before they could complain of unfair dismissal. They told us that that would produce jobs. I do not know what they have done to prove that since. They applied a similar cut-off point to work-place balloting, and they applied a similar set of limits in regard to employees of firms employing five or fewer employees when they cut down women's rights to maternity leave in 1980.
There was not a great deal of justification of the specific figures on those occasions as I remember it. Here the Government come up with another figure. It is because I have been unable to find an explanation of the calculations that they did, and the reason for choosing this figure, that my noble friends and I have put down the amendment in the form it is in. It will of course be obvious to the Minister that we chose 199 for the simple reason that that is the cut-off point that the Department of Trade and Industry uses for a small firm in a number of its presentations of figures and descriptions relating to small firms.
Is that figure as good as nine or does it merely save a great deal of money? Is there some functional justification in nine as against 10, 20 or 199? How many employees are involved? Some colleagues of mine in some universities have tried to do some calculations as to how many employees are employed in various types of small firm. The calculations are not very firm. They show that if one takes a cut-off point of 10 and 24, one is probably moving from about 1.75 million to 1.5 million excluding farming, fishing and forestry.
The Minister must have better figures than that. He should be able to tell us how many workers are involved. He could perhaps tell us about one or two other matters in relation to the clause. In moving to a different number I obviously increase the importance of new Section 104A. That makes me ask: if it is convenient for the Minister to include it here, why is the new subsection phrased as it is? There are two important things about the numbers game of exceptions in labour law. We have to know how many are involved and whether associated employers are included, and they are here. Then we have to know what period of time to count.
There is an interesting phrase which I do not think is matched in previous clauses. It says that the qualifying payment will arise,
"if at no time on the appropriate date".
One would normally find, "on the appropriate date". If we look at the definition of "appropriate date" in Section 104, we go to Section 104A and then back to Section 104 and then on to Section 90, because that is the route that must be taken. We find that they all refer to "a date". Presumably the Minister's phraseology,
"at no time on the appropriate date".
imagines that there will be great mobility of labour during the day. If that is not so, the phrasing is very strange. The courts may have some trouble with that.
There is a final point. However we do it—and it may be that that is clever phrasing—those cut-off points, especially with small firms, have a great deal of arbitrariness necessarily associated with them. It seems odd that if there is one small firm employing nine employees, run by one man who is a director and manager but who is not an employee—perhaps for tax reasons—and next door there is a firm employing nine employees and the manager-owner, or whatever he is to be called, is also a director and employee, which he may well be in law, those two firms will now be treated differently.
Any legal test has a line, and there are always cases on either side, but there is no need to have anything quite as arbitrary as that with regard to redundancy rebates. That is also a case for having a higher figure because the more employees one has, the less arbitrary the line is likely to be in that respect. One can think of many legalities which would be arbitrary as between one very small firm and another, which would make for great unfairness as to who received a redundancy rebate, whereas if we had a slightly higher cut-off point those arbitrary factors would be less likely to apply.
On the central point, I look forward to what I think would be the first explanation of the Government's choice of a number. I beg to move.
Lord Rochester: This is, I believe, the only amendment at this stage that refers to Part III of the Bill. With the agreement of the Committee, I should like to widen the discussion a little to take account of the philosophy underlying this Part, if only to save having a further debate on clause stand part, if that is acceptable to the noble Lord the Minister in particular. At the same time, I wish to support what the noble Lord, Lord Wedderburn, has said and to amplify his remarks by way of another example.
Part III of the Bill, as the Committee will remember, restricts the payment of redundancy rebates to firms employing less than ten people. The Government claim that the 35 per cent. of the cost of redundancy payments to employers now repaid from the redundancy fund should, in their view, be put to a different and better use. But people continue to be made redundant in large numbers. The effect of this part of the Bill must be either to make overall redundancy payments smaller or add to employers' costs.
Another factor, I suggest, that we need to bear in mind is that the redundancy fund is one to which both
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employers and employees have contributed in the expectation that they will receive some benefit. If this part of the Bill goes through, they will be denied that benefit. There was, at the last audit, a substantial surplus in the fund—some £9 million, I believe. If payments from that fund are to be eliminated, it would surely be more equitable and serve better to maintin our competitiveness if the surplus was distributed to employers and employees by providing for a reduction in their contributions.
Following upon what the noble Lord, Lord Wedderburn, said, I have received a communication from the National Farmers Union which is concerned that, as the clause is now drafted, it appears that casual and seasonal workers will count towards the number of employees who can be taken into account in deciding whether a rebate can be claimed. Since employees are not entitled to a redundancy payment unless they have been continuously employed for a period of two years under a contract of employment normally involving work for 16 hours or more, it seems logical that employees who do not qualify for such payments should not be counted for the purposes of the exemption under Clause 26, which we are now discussing.
What this means, if I may take the example that the NFU has given, is that where a business employs five full-time employees and five casual or seasonal employees, that business would be ineligible for a redundancy rebate if it is necessary to make one or more of the full-time employees redundant even though some of the other employees would have been ineligible for a redundancy payment. It seems that the clause should be interpreted to ensure that businesses with fewer than ten full-time employees are still eligible for redundancy rebate whether or not they employ casual or seasonal workers in addition. I should like some thought to be given to that point. I would be grateful for any comment that the Minister feels able to offer at this stage.
Another communication that I have received comes from the Association of County Councils. Its concern is this. The purpose of the clause is, basically, it is claimed, to effect savings in public expenditure. County councils will lose the right to claim redundancy rebate, and there will therefore be no saving in public expenditure overall in the case of a redundancy within a county council which will often, obviously, employ relatively few people. Instead, an increased financial burden will fall on the county councils.
Their concern is that if this is not adequately recognised within the overall framework of local authority expenditure, it could even inhibit proposals which might otherwise come forward for restructuring within a local authority in order to achieve value for money. They feel—and I must say I share the feeling on the face of it—that this would be an unfortunate side effect, to say the least, of the removal of the redundancy rebate. I am sorry to have wearied the Committee with this, but those are examples of bodies and people affected adversely by this part of the Bill. It may be that the Committee will find it helpful if the Minister makes some response to those points.
I think I speak for my noble friends in saying that we are not happy with Part III for the reasons I gave at the

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beginning of my remarks. I take this as the only opportunity, without spending even longer on it tonight, of saying that to the Minister.
10.15 p.m.
Baroness Seear: As a very brief supplementary point to what my noble friend has said, may I ask the Minister whether he will give us a clear statement in answer to this question? I am sure that there must be an answer, and it would be valuable to have it on the record. It is accepted on all sides that employers and employees have paid into the fund. As I understand it, this is a form of insurance: they pay in advance when times are good so that when they are confronted with redundancy they can take some money out. It is now normal suddenly to say that the insurance will not pay. What is the Government's legal justification for denying employers the right to draw out of the fund into which they have paid, when they are faced with the circumstances for which the fund was created? That is the first question I wish to ask.
I feel that this removal of the right to withdraw one's money from the fund is extremely questionable economically. When a company is faced with redundancy it is, by definition, in a bad way; otherwise it would not be making workers redundant. A firm is concerned about coming out of the redundancy situation in as good a shape as possible in order to recover. This is no moment at which to withdraw from it money which it very badly needs if it is to be success-ful in the future and overcome the difficulties which have created the redundancy. First, what is the legal justification for denying these payments? Secondly, what is the economic justification for crippling a firm still further when it finds itself in a bad way?
Lord McCarthy: I have no intention of intervening in this debate, and the Committee will be glad to learn that I shall not make another speech. I had thought that we would keep this debate to the narrow issue of the amendment. It has now rightly widened, as I suppose was inevitable, to encompass the whole question of Part III of the Bill.
The noble Lord, Lord Wedderburn, has dealt in detail—and no doubt will again—with the illogicality of this part of the Bill. I just want to say that we detest the whole of Part III of the Bill for exactly the same reasons that have been given by the noble Baroness, Lady Seear. We think that it is a detestable, unnecessary part of the Bill. We do not say so much about it only because it may do less damage to fewer people than the even more detestable Parts I and II. There is nothing to be said for it, and I thought that I should make that clear at this point.
Lord Trefgarne: There are no sugar plums, I am afraid. Perhaps I may first deal with the general proposition contained in this part of the Bill. This clause brings to an end, except for the very smallest employers, the insurance arrangement whereby part of the cost of statutory redundancy payments is rebated by the Government. This arrangement may have been justified in the labour market conditions of the 1960s when it was necessary to encourage the shedding of surplus workers who could be redeployed in unfilled
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jobs. In present circumstances, apart from a few exceptional cases, there is no justification in subsidising employers' redundancy costs, particularly as redundancy payments are in any case allowable against tax. The Government believe that a decision to make people redundant is a commercial judgment which the employer should make and pay for without subsidy from other employers or the state.
Nevertheless we have decided to make an exception in the case of firms with fewer than 10 employees because we recognise that the cost of redundancy payments can bear relatively heavily on employers running very small businesses. For this purpose, a casual part-time employee at the employer's home is disregarded, as long as he works fewer than eight hours per week, and there is no more than one other person so employed.
This step may be seen as the logical consequence of a series of reductions in the level of rebate which have been implemented over the past 20 years by governments of both parties. Those reductions have been absorbed by employers without any significant difficulty and we are clear that this compulsory pooling of redundancy costs has outlived its usefulness.
I stress that the change relates to the employer's rebate only, not to the employee's entitlement, and that where an employer fails to make the payment —for example, because of a serious cash flow problem —the employee can apply to the department for the payment to be made in full direct from the redundancy fund and leave the department to try to recover the payment from the employer later.
I turn now to the amendment. As I have said, the Government's intention in restricting redundancy payments rebates to the very smallest of employers is to mitigate the effects of the loss of rebates upon those for whom redundancy costs are most burdensome. Whatever threshold or cut-off we had chosen, someone would have been calling for a higher figure. I believe that the threshold that we have chosen concentrates the relief we are able to afford on the employers who most need help from the fund. The amendment proposed has the effect of raising the threshold for the payment of rebate. The direct consequence of this would, of course, be a considerable increase in public expenditure. This increased cost would need to be found from within current allocations and could only be found by making savings elsewhere.
The threshold that has been chosen serves to focus relief on those firms most likely to need help without adding unduly to public expenditure or to the adminis-trative burdens of employers. The noble Lord, Lord Rochester, gave a particular example about a fanner with seasonal workers. It is true that part-time and seasonal workers are to be included in the count. However, I would suggest that it is unlikely that a farmer would want to make his full-time employees redundant at his busiest time—that is, when he was employing seasonal workers for his harvest, etc. Therefore, I do not think that the noble Lord really painted a realistic picture.
The noble Baroness, Lady Seear, spoke about the consequences of this for the fund. The fund will, of

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course, still have to find money for direct redundancy payments where the employer cannot pay and indeed for rebates to very small firms. However, the fund also pays arrears of wages and other payments to employees whose employers have become insolvent. The fund has only recently moved into surplus after a long period in deficit. The level of contribution will of course be kept under review for the future.
Baroness Seear: The noble Lord really has not answered the point that employers have paid into this fund. It may well be that an employer has paid into this fund for 20 years. Now, for the first time, he needs to draw out. What legal justification is there for denying someone who has paid into what is virtually an insurance fund any right to draw out from that fund?
Lord Trefgarne: To be truthful, I am not quite certain what the position on past contributions is. Perhaps I can look into that matter and let the noble Baroness know. That is the essence of the provision in this part of the Bill. I have also recited the basis of our difficulties with the noble Lord's amendment.
Lord Wedderburn of Charlton: I think that, in fact, the noble Lord has invited us all to come back to Part III on Report. In order to be helpful, I put again the question that he did not answer: how many workers are involved?—that is to say, what sector of the workforce are we talking about if we talk of firms with a workforce of up to nine? What are the other details? It is no good merely saying that these are the firms most likely to need help, as against those employing 11, 12, 20 or 30, unless we are told why. I agree with the Minister that any line drawn has an arbitrary element in a certain sense; but this appears to have such a high arbitrary element that we are bound to come back to it at Report stage.
My amendment drew lots of plums because it was, in effect, a mini "Clause stand part" debate. We shall have to take in what the noble Lord the Minister has said. He has to consider past contributions and the case made by the noble Baroness, Lady Seear, about the legal and economic reason (which has not been answered). We have to consider the different levels of rebate, which it is true have varied over the years—41 per cent. and 37 per cent.—but that is a very different thing from taking it away altogether, and doing that on a discriminatory basis. If I were a middle employer I cannot see how I should not be walking up Whitehall screaming, "Burdens on business!" at the noble Lord and at his noble friend the Secretary of State. But he can think about that.
With that reflection, that we are inevitably bound to look at it again, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 agreed to.
Clauses 27 to 31 agreed to.
Schedule 4 agreed to.
Schedule 5 [Repeals]:
[Amendment No. 110 not moved.]
Schedule 5 agreed to.
Schedule 6 [Transitional provisions and savings]:
[Amendment No. 111 not moved.]
Schedule 6 agreed to.
Clause 32 [Short title, commencement and extent]:
[Amendments Nos. 112 to 115 not moved.]
Clause 32 agreed to.
House resumed: Bill reported with amendments.
House adjourned at twenty-nine minutes past ten o'clock.

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