Sitting of 6 May 1986

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

    GULL ISLAND PROTECTION BILL [Lords]
    As amended, considered.
    Amendment agreed to.
    To be read the Third time.

    IPSWICH PORT AUTHORITY BILL
    As amended, considered; to be read the Third time.
Oral Answers to Questions
  EDUCATION AND SCIENCE

    Higher Education
    Mr. Andrew F. Bennettasked the Secretary of State for Education and Science what discussions he has had in the last month with the National Advisory Body and the University Grants Committee about the future development of higher education.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): My right hon. Friend has written one letter jointly to the chairmen of the University Grants Committee, National Advisory Body and the Welsh Advisory Body about student numbers in 1987–88. He is meeting the chairman of the UGC tomorrow, Wednesday 7 May.
    Mr. Bennett: When the Secretary of State meets the chairman of the UGC, perhaps he will come up with the farewell message that cuts in higher education are off. Will the Government stop hiding behing the UGC and NAB planning exercise, come clean and make it clear that they are demanding cuts in the number of students going into higher education or in the resources per student? Why is Britain the only country that is cutting higher education? If we want an economic future, we should surely be investing in, not cutting, higher education
    Mr. Walden: It is grossly irresponsible of the hon. Gentleman to stir up unjustified alarm among students, parents and institutions about access to higher education. The Government have been enormously successful in expanding access to higher education, and it is not our policy to curtail it now.
    Mr. Michael Forsyth: When my right hon. Friend meets the chairman of the UGC, will he seek his assurance that there is no question mark over the future of Stirling university? Will he also put it to him that there should be a question mark over the UGG, and that it would be far better to allocate funds to universities and colleges of higher education on the basis of student demand, with resoures allocated according to student preference rather than by bureaucratic methods?
    Mr. Walden: My hon. Friends asks a complicated question. I know that the UGC is concerned about financial trends. However, there have been no formal recommendations to the Government about closures, and the Government are monitoring closely any evidence of financial difficulty.
    Mr. Freud: Does the Minister accept that there is a subsequential question mark over his Department's competence in dealing with higher education? Will he reverse the trend of trying to cram ever more students into polytechnics without making adequate provision for their funding?
    Mr. Walden: I am sorry to hear the hon. Gentleman speak in that derogatory way about the success of public sector higher education in accommodating many new students. To be precise, there has been an increase of one

    3
    third in the student population. I am sorry that he should take such a primitive economic attitude and believe that the success of the public sector in efficiently accommodating many new students is not a matter on which it should be congratulated.
    Mr. Stokes: Is my hon. Friend aware that the cuts proposed in the courses run by the Stourbridge college of art and technology, which is pre-eminent in the glass industry throughout the country, have caused alarm and despondency in my constituency? I look to the Government to put the matter right.
    Mr. Walden: I hope that my hon. Friend will look carefully at the source of any speculation about cuts. I imagine he will find that, as is so often the case, that source is not the Government.
    Mr. Merlyn Rees: As I have no wish to be irresponsible or complicated, how should I reply to those in Leeds who write to tell me that the fine arts department at Leeds polytechnic is being considered for closure? Should I write and tell them that no such possiblity arises?
    Mr. Walden: The right hon. Gentleman should ask his colleagues at Leeds polytechnic carefully to reread the letter that they received from the secretariat of the National Advisory Body. I believe that that was the source of the rumours. His colleagues will then note that the proposals in that letter are not endorsed by the Government.
    Mr. Squire: Has my hon. Friend had an opportunity today to read the devastating indictment of Opposition, policies set out in the Opposition's house newspaper, The Guardian, by Hugo Young? If so, does he agree that it exposes the emptiness of the Opposition's promises on higher education, as on so many other issues?
    Mr. Walden: My hon. Friend has made an extremely good point. In higher education one is dealing with a rather highly educated class of person. I do not for one moment believe that such a person will be impressed by the Opposition scattering Mickey Mouse money in front of him for higher education, just as they have scattered it in front of every other topic debated in the Chamber.
    Mr. Dubsasked the Secretary of State for Education and Science what representations he has had in the last month from the higher education unions about the number of students entering higher education in 1987–88.
    Mr. Walden: None, Sir.
    Mr. Dubs: Does the Minister agree that there is great uncertainty and anxiety about the future of higher education in this country, which has been directly caused by the Government's attempt to cut the number of resources going to all categories of higher education? Is it not time that the Government realised that Britain's future depends on the skill, training and education of our people? Why do the Government say that they must cut higher education? Such cuts would damage the country's future.
    Mr. Walden: I am intrigued that the hon. Gentleman should complain about uncertainty in higher education and at the same time deliberately fuel it by referring to nonexistent plans for cuts. I wish that he and other Opposition Members would stop doing down Britain's achievements by making international comparisons. They are a notorious minefield, and Opposition Members frequently step on
    4
    rather obvious mines. The hon. Gentleman alluded to international comparisons, but the best bases for them are degrees and higher level diplomas. On that basis, the United Kingdom is on a par with West Germany and above others in western Europe.
    Mr. Peter Bruinvels: If and when my hon. Friend receives any representations from the higher education authorities, will he bear in mind that many of the numbers will represent people who may not even be properly qualified to go to university? Does he agree that those who have the privilege of going on to further education and who have the best grants in Europe available to them should aim to have a career to go to at the end of their three years of study? It is a privilege to go on to further education, and someone has to pick up the tab for that.
    Mr. Walden: My hon. Friend has made many worthy points, and he will not expect us to dissent from them. I refer, in particular, to the notion that the vocational element of higher education should be stressed.
    Mr. Radice: Will there be any cuts in 1987–88 in the number of resources going into higher education?
    Mr. Walden: In the normal way, decisions on the funds that will be allocated to the public sector for higher education are calculated in the routine way, at the time when funds going to local authorities are calculated.

    Teachers (Pay and Conditions)
    Mr. Greenwayasked the Secretary of State for Education and Science if he will make a statement about pay and conditions of service for teachers.
    The Secretary of State for Education and Science (Sir Keith Joseph): Talks covering both pay and conditions of service continue at ACAS between the management side and the five unions which signed the ACAS agreement in January. The National Union of Teachers has excluded itself from the talks by refusing to abide by the agreement and end its disruption of schools. The National Union of Teachers has requisitioned a meeting of the Burnham primary and secondary committee for this Friday, 9 May.
    Mr. Greenway: Is it not a tragedy that the National Union of Teachers, which represents 48 per cent. of teachers, is excluded from the talks, when ever-increasing numbers of parents are voting with their feet by transferring their children from state to independent schools? Would it not be in the best interests of children, parents and teachers if the NUT ended its disruptive action and took its proper place at the conference table?
    Sir Keith Joseph: The National Union of Teachers could return to the talks quite easily by ending disruption and abiding by the Advisory, Conciliation and Arbitration Service agreement. I wish that it would do so.
    Mr. Dormand: Is the Secretary of State aware that teachers are voting with their feet by leaving the other unions and joining the NUT? That is a fact. Will the right hon. Gentleman make it clear that many of the activities which are carried out by all teachers of all unions, such as after-school club activities, Saturday morning sports games and activities outside lunchtime supervision, cannot, by any stretch of the imagination, be held to be other than voluntary? Will the right hon. Gentleman also

    5
    give an assurance that those duties will not be taken into consideration when trying to lay down the law and attaching them to salaries?
    Sir Keith Joseph: The hon. Gentleman should be wary before announcing exactly the flow of teachers to union membership. The duties of teachers have long included activities outside the classroom. It is the definition of duties that is being sought by the five teacher unions and the local education authorities under the ACAS umbrella.
    Mr. Sayeed: Does my right hon. Friend agree that one cannot say what a job is worth unless one says what it entails?
    Sir Keith Joseph: It is precisely for that reason that the Government regard the definition of duties, as well as the definition of pay and career structure, as important. That is why we are glad that the ACAS negotiations are taking place.
    Mr. Flannery: Have not the ACAS talks, which are a democratic interchange of opinion, always taken place when there are honest differences? However, on this occasion the employers laid down conditions before the talks began. They said that unless the NUT agreed with certain things, they would not sit down in the same room and talk. Does the right hon. Gentleman agree that we cannot continue to organise the education of our children without the help and agreement of the NUT, which represents half the teaching force in this country?
    Sir Keith Joseph: The NUT should consider the interests of children. It professes to be concerned about education, yet it promotes the disruption of the educational process. The NUT has urged its members to refuse to carry out activities which have long been recognised as part of a teacher's work. I support the view of the local authority employers that the NUT should return to the talks only if it ends the disruption.
    Mr. Lyell: Would not a large number of teachers, including many members of the NUT, welcome a proper contract, fair assessment and the improved job and career opportunities that would follow? What does the NUT hope to gain by its continued obstruction?
    Sir Keith Joseph: My hon. and learned Friend's proposition is entirely correct. I cannot be expected to defend the National Union of Teachers' behaviour.
    Mr. Radice: As this is almost certainly the right hon. Gentleman's last Question Time as Secretary of State for Education and Science, it is a pity that we cannot say farewell on a happier note. Does he accept the judgment of the Tory candidate in the Ryedale by-election that there is a wide gap between the intentions of the right hon. Gentleman and what he has managed to achieve, so much so that our schools are now in a worse state than they were in 1981 when he took over as Secretary of State for Education and Science?
    Sir Keith Joseph: I accept that last year was a miserable year for education. Will the hon. Gentleman answer a question from me?—[HON. MEMBERS: "No."] Very well.
    Mr. Speaker: Order. I did not stop the Secretary of State. I did not know what he was going to say.
    Mr. Forth: Will my right hon. Friend confirm that he and the Government are still concerned, above all, with
    6
    quality in education? Will he also confirm that he gives the highest priority to introducing a system of assessment of teacher performance, so that those who do well in the classroom are duly rewarded and those who do less well are encouraged to improve their performance?
    Sir Keith Joseph: I entirely agree with my hon. Friend. The Government's objective is to raise standards and, for that reason, to offer teachers much more effective in-service training, coupled with appraisal.

    Nursery Education
    Mr. Soleyasked the Secretary of State for Education and Science what recent representations he has received on the availability of nursery education.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): No such representations have been received.
    Mr. Soley: How does the hon. Gentleman expect the United Kingdom to keep up with its industrial competitors if we perform so badly in nursery education? Should not such education be given a much higher priority by the Government and by the country generally? Is it not a fact that without that nursery education and some measure of performance by the Government we shall be found wanting in the future?
    Mr. Dunn: It is for local education authorities to determine the nature and scale of provision offered at that level. The hon. Gentleman will be interested to know that in 1979 428,000 children were in nursery schools and nursery classes. By 1985 that figure had increased by 80,000—almost 20 per cent.
    Mr. Haselhurst: Before encouraging the commitment of yet greater resources to nursery education, will my hon. Friend consider how the role to be played by the pre-school play group movement might be enhanced by closer cooperation with the junior schools to which the children might proceed?
    Mr. Dunn: I welcome the growth of the voluntary sector, voluntary organisations and self-help groups. I notice that the Labour party in its recent commitment made no reference to the role of voluntary groups. Its proposals for making nursery school places free on demand to three-year-olds and four-year-olds would cost the United Kingdom more than £400 million in the first year and more than £300 million thereafter. What a cost!
    Mr. Dobson: Does the hon. Gentleman agree that the importance that the Government attach to pre-school education is shown by the fact that they changed the law to make it clear that local education authorities were not obliged to provide pre-school education?
    Mr. Dunn: Local authorities have power, but not a duty, to provide nursery education. The hon. Gentleman will be pleased to know that in 1985 43 per cent. of three-year-olds and four-year-olds were in nursery schools or in nursery classes, compared with only 37 per cent. in 1979.
    Mr. Marlow: Will my hon. Friend tell the pampered actress whom the Labour party put on the television screen yesterday as a decoy for Bernie Grant and Mr. Hatton that there is no such thing as free nursery education, that it must be paid for by the ratepayer and taxpayer, and that

    7
    many people feel that the mothers of three-year-olds and four-year-olds would be better advised to look after their own children than try to offload them on to the state?
    Mr. Dunn: My hon. Friend will be pleased to know that I came to the same conclusion. The lady who appeared last night on the party political broadcast talked about nursery education as a basic right, but she did not want to talk about parental responsibility for bringing up very young children at home.
    Mr. Andrew F. Bennett: Will the hon. Gentleman check some of the facts that he has given to the House? Does he agree with the Prime Minister that nursery education is important? Does he agree that since 1979 the Government have been closing nursery schools, that in the past three years there has been virtually no expansion in provision in nursery schools or nursery classes and that, over the next two years, fewer children will enjoy nursery schools and nursery classes than have done in the past? Does the hon. Gentleman also agree that, by the year 2000, at the present rate of progress, our provision for three-year-olds and four-year-olds will still be only half that in West Germany, France, Holland, and Italy?
    Mr. Dunn: The hon. Gentleman is right in one respect. Since 1979, 32 nursery schools have closed. However, the general increases, which I mentioned earlier, are to be welcomed. The Opposition parties make no reference to the role of the voluntary sector, and that is most lamentable.

    Schools (Homework)
    Mr. Madelasked the Secretary of State for Education and Science when he expects to receive the report from Her Majesty's inspectors' survey of good practice in schools in relation to homework: and if he will make a statement.
    The Minister of State, Department of Education and Science (Mr. Chris Patten): My right hon. Friend hopes to receive this report during the summer.
    Mr. Madel: As part of the policy of raising standards in the classroom, at what age do the Government think that homework should be compulsory for children? Do the Government accept that arrangements should be made for some children to do their homework at school at the end of the day if conditions at home are difficult?
    Mr. Patten: I agree that where facilities are made available for doing homework at school, they are most welcome. I hope that Her Majesty's inspectors' survey will offer some useful evidence of current practices which will enable us to answer my hon. Friend's first question. I would point to the important role of parents in helping younger children especially with reading at home.

    School Governors
    Mr. Wainwrightasked the Secretary of State for Education and Science what representations he has received on the provision in the Education Bill to prohibit the appointment of school governors under the age of 18 years.
    Mr. Dunn: The Department has received nine letters, including five from hon. Members, opposing the proposal. In addition, the matter has been discussed during debates on the Bill in another place.
    Mr. Wainwright: Is the Minister aware that some local education authorities already include pupils under the age of 18 among their appointments to governorships? Does he not realise that a minority of pupils as school governors would further the consumer-based society that the Government claim to champion?
    Mr. Dunn: The Government have long held the view that a school or college governor holds an office of public and pecuniary trust. Minors are not eligible to hold such office. We are aware that there are contrary legal views, and that is why we are seeking to put the matter beyond doubt, especially in the light of the wider responsibilities now proposed for governing bodies.
    Mr. Michael McNair-Wilson: Is it true, as the Daily Mail stated in an education article today, that it can cost more for a child to be educated in the public secondary sector than through a private school? If so, does that not suggest that the financial management of our schools leaves much to be desired? If that is the case, what is the point of governors who lack either financial or management skills having a say in how our schools are controlled?
    Mr. Dunn: We shall have the opportunity to discuss those matters when the Bill comes here from another place. It is fair to point out to the House that we intend to legislate for a degree of financial management in schools and to embark on and create training courses for governors so that they will know why they are appointed.

    General Certificate of Secondary Education
    Mr. Skinnerasked the Secretary of State for Education and Science what representations he has received in the past month from the teachers' unions about the introduction of the general certificate of secondary education examination.
    Mr. Chris Patten: My right hon. Friend has expressed to all the teachers' associations his willingness to receive any further and detailed comments they may have about the preparation for and funding of the introduction of the GCSE. The Department stands ready to consider these matters further.
    Mr. Skinner: Is the Minister aware that nearly six weeks ago I sent a letter from a worried parent, Mr. Beal of New Houghton in my constituency, to the Secretary of State for Education and Science? The letter says that he is concerned about the examination going through. I have not yet had a reply from this deadbeat Secretary of State or the junior Minister who is trying to get his job. Is it not a scandal that the Minister cannot reply to my constituent in six weeks and at the same time is trying to tell parents and teachers to rush through this tinpot examination? Why does the Secretary of State not make way for somebody else?
    Mr. Patten: I am grateful for that balanced contribution. I assure the hon. Gentleman that, in the light of his question, I shall see that his constituent receives an early reply. I am equally sure that the hon. Gentleman will want to reassure his constituent about the importance of this examination being introduced smoothly in September.
    Mr. Pawsey: Will my hon. Friend confirm that the GCSE was demanded by teachers' unions, that it has been most thoroughly researched and prepared, and that £30

    9
    million has been made available by the Government, in addition to the sums provided by local authorities? Does he agree that the new examination will do a great deal to improve the quality of education in our schools?
    Mr. Patten: I could not have put it better myself.
    Mr. Freud: Will the Minister confirm that a substantial sum of money is being granted to north Yorkshire, and Ryedale in particular, for the GCSE? If that is true, will he do his best to let counties that are not having by-elections have similar grants?
    Mr. Patten: Thanks to the education support grant, all local education authorities will be able to add to the capitation which, doubtless, they are making available for the introduction of the GCSE. That is what the £20 million is for — for all local education authorities. Unfortunately, some local education authorities do not have quite as much as they might like for that purpose. For example, Derbyshire, is spending £60,000 on overprinting all its stationery with the news that Derbyshire is a nuclear-free zone.
    Mr. Nicholas Baker: Is my hon. Friend aware that the teachers' unions—[Interruption.]
    Mr. Speaker: Order.
    Mr. Baker: Thank you, Mr. Speaker. Is my hon. Friend aware——
    Mr. Skinner: We've got the muesli vote in west Derbyshire.
    Mr. Speaker: Order. The hon. Gentleman has had one question. He cannot keep interrupting other people's questions.
    Mr. Baker: Is my hon. Friend aware that the teachers' unions are putting forward figures for the cost of the GCSE and the time that its introduction will take which are very much in excess of the figures and the time that his Department has produced? Will he quickly examine those figures and refute them, because everyone wants to see this important examination introduced?
    Mr. Patten: I shall certainly ensure that we continue to put sensible figures into play. The fact is that there has been a good deal of exaggeration. There is a tendency for some teachers to pile all their ambitions into an argument about resources for the GCSE. Nevertheless, we want to have serious discussions with the teachers' associations about the resources for this most important examination.
    Mr. O'Brien: Is the Minister aware of the situation that is faced by some of the heads in schools in my constituency where, out of a possible 97 syllabuses, only 27 have been received so far? The syllabuses that are being submitted need to be amended in many ways. Therefore, the teachers are having to draw up programmes only weeks before the introduction of the GCSE. Will the Minister take his head out of the sand and realise that there will be great difficulties in the introduction of the GCSE?
    Mr. Patten: The arrangements for the introduction of syllabuses are exactly as they were when we first discussed that issue a couple of years ago. Over 235 syllabuses have now been approved. They are being mailed daily to schools. The arrangements for the approval of syllabuses are entirely on course.
    Mr. Forth: Will my hon. Friend confirm that it was the teachers' unions that demanded this examination in the
    10
    first place? What conclusions has my hon. Friend drawn as to the reason for the change of attitude now shown by the unions?
    Mr. Patten: I still believe that the overwhelming majority of good and professional teachers want to see the examination introduced smoothly. Unfortunately, one or two people have been trying to use it as part of their pay dispute, but I hope that that will not apply to all teachers.
    Mr. Andrew F. Bennett: Will the Minister tell us how his talks with the National Union of Teachers are going? Does he not accept that he has a short time to win public acceptance—the acceptance of parents, pupils and teachers—for the new examination? If the Government showed a little urgency and gave a little extra in resources, that good will could be won. What are the Government doing to achieve that?
    Mr. Patten: As the hon. Gentleman knows, we have been talking about the examination for the best part of 15 years. We only recently announced increased resources and training. But we are still talking to the teachers' associations. My right hon. Friend the Secretary of State has met the NUT, and the Department's officials are talking to some of the NUT's officials at the moment. I hope that it will be possible to persuade them to take part fully in making the examination the success that it deserves to be.

    Education (Politicisation)
    Mr. Couchmanasked the Secretary of State for Education and Science when he expects to be able to make an announcement of the conclusion of his consideration whether an inquiry should be held into the politicisation of education.
    Sir Keith Joseph: The Government's decision will be announced as soon as possible in the light of all the views expressed about measures to be taken against indoctrination, including those in another place about the possibility of legislation in the Education Bill.
    Mr. Couchman: I am grateful to my right hon. Friend for that answer. He might like to know that in my constituency the headmistress of Rainham girls' school invited the three main parties to offer people to speak to her sixth form pupils. Does my right hon. Friend agree that that is a better way for pupils to be exposed to political views and policies? Will he issue a circular suggesting to other head teachers that that is a good way to go about such matters?
    Sir Keith Joseph: I agree with my hon. Friend. I think that that method is widely practised.
    Mr. Key: Does my right hon. Friend agree that it is thoroughly bad luck that my question is No. 56 on the Order Paper? The point that I would have raised in my question is that much claptrap is talked on both sides of the House about the politicisation of education. The problem is that it is not being done properly, as my hon. Friend the Member for Gillingham (Mr. Couchman) said. More resources should be directed to teaching politics in schools.
    Sir Keith Joseph: My hon. Friend must realise that, outside the direct teaching of politics, a small minority of teachers introduce politicisation and indoctrination into

    11
    lessons. Many parents are, alas, deterred from making complaints, but no responsible holder of my office should ignore the widespread anxiety about possible indoctrination.

    Departmental Budget
    Mr. Soamesasked the Secretary of State for Education and Science what representations he has received on the science part of his Department's budget.
    Sir Keith Joseph: I have received 230 representations, all urging more public spending on basic scientific research.
    Mr. Soames: In view of the increasingly unsatisfactory way in which the Government administer the science budget, does my right hon. Friend agree that there should be a Minister in his Department whose sole responsibility it would be to pull together all the strands of the science budget in the Government's spending programme?
    Sir Keith Joseph: If my hon. Friend's suggestion would mean an improvement, it would deserve careful consideration. The Government delegate to the research councils and the universities the decisions about how to spend the allocation of taxpayers' money. That is a continuing process. We do not need a Minister especially devoted to science to achieve that.
    Mr. Pavitt: When did the Secretary of State last discuss this matter with the chairman of the Medical Research Council? In view of its latest report, is he aware that problems have arisen because of short funding of the clinical research centre at Northwick Park hospital, which is funded jointly by the Medical Research Council and the North-West Thames board?
    Sir Keith Joseph: I would see the chairman of any research council who asked to see me. Normally, I receive advice through the chairman of the Advisory Board on the Research Councils. There has been almost an explosion of research possibilities in almost every area. It would be almost impossible for any Government to fund the complete implementation of them all.
    Dr. Bray: Is the Secretary of State aware that, increasingly, many industrialists, including the newly appointed science adviser to the Cabinet Office, Mr. John Fairclough, have said that the tightness of funding on basic science and the cut in university science are gravely undermining our science base and that the diversion into applied research is selling out Britain for the long term?
    Sir Keith Joseph: I am aware of the widespread sense of dissatisfaction, but the hon. Gentleman must accept that one difference between us and our neighbours in northwest Europe is that industry here contributes far less than it does in neighbouring countries to scientific research. That is another factor that must be borne in mind.

    Primary Schools
    Mr. Freudasked the Secretary of State for Education and Science what targets his Department has issued for primary school pupil places; and if he will make a statement.
    Mr. Dunn: Targets were promulgated in the 1986 public expenditure White Paper for the removal of surplus places by 1991 in schools of all types. The targets are not
    12
    broken down by type of school, but incorporate an assumption that local education authorities will be able to remove half of the national surplus of primary school places.
    Mr. Freud: Why does the Minister's Department take so much less heed of the rising number in the primary sector than of the falling number in the secondary sector of education? Does he accept that this will be an end to the rising-fives, which for many children is the only provision, educationally, that is available?
    Mr. Dunn: Proposals for the closure or amalgamation of any schools are matters for local education authorities. Those proposals come before the Secretary of State by one route or another and, in the light of representations made, the Secretary of State makes a decision. In the context of the hon. Gentleman's question, local authorities must take account of the growth or decline in the school population in the area served by the school.

    Education Committees
    Mr. David Atkinsonasked the Secretary of State for Education and Science if he will make a statement on the position of co-opted members of local authorities' education committees.
    Mr. Dunn: My right hon. Friend continues to pursue the policy set out in circular 8/73.
    Mr. Atkinson: I recognise the constructive contribution that the co-opted representatives of the teaching profession make to education authorities. Is my hon. Friend aware of the growing concern at their right to vote without accountability to their electorate, particularly in those hung authorities where they hold the balance of power? Will he draw these matters to the attention of my right hon. Friend the Secretary of State as soon as possible?
    Mr. Dunn: Any abuse of any system will inevitably bring that system into disrepute. Those who are overstepping their terms of reference should contemplate further their action because, without doubt, they are bringing the system into disrepute. I shall draw the attention of my right hon. Friend the Secretary of State to my hon. Friend's question.

    General Certificate of Secondary Education
    Mr. Colvinasked the Secretary of State for Education and Science if he will make a further statement about progress with his plans for the introduction of the general certificate of secondary education examination.
    Mr. Chris Patten: The programme of preparation for the GCSE is thorough and of high quality. Never before has so much been done to prepare all teachers for an examination reform. The measures announced by my right hon. Friend on 13 March are designed to ensure the successful completion of the training programme and to allow authorities to fund a real increase in spending on books and equipment for the GCSE. I hope that all teachers will seize the opportunities now available to make the GCSE the success which they, as much as we, know it can be and should be.
    Mr. Colvin: I thank my hon. Friend for that comprehensive reply. If it is true, as some teachers are

    13
    suggesting, that there is a shortage of time for training them in the new syllabuses for the GCSE, could they not come back from their summer holidays a couple of weeks earlier?
    Mr. Patten: We have provided for a couple of days of training during the summer term, which should help a great deal. Phase four training will be particularly important, and I hope that teachers will play a full part in that as well as in phase three.
    Mr. Dormand: Does the Minister recall that, when he opened a recent debate on this subject, he said that it was probably the greatest innovation in the history of education, or words to that effect? In those circumstances, is he not taking the greatest possible risk in setting in train these matters when he knows, and his knowledge has been reflected in his answers so far today, that he does not yet have the full co-operation of teachers? Will he listen to what they are saying?
    Mr. Patten: This is a considerable innovation, which is why we are putting considerable resources into it. I hope that we shall be able to introduce it with the full consent of the overwhelming majority of teachers, but it is possible to make too much of the difference between what is going on in schools where there are good curricular practices, and what will happen when the GCSE is introduced.

    Students in Higher and Further Education

    Thousands

    1979

    1980

    1981

    1982

    1983

    1984

    *1985

    Higher education* (Great Britain)

    Full-time and sandwich

    510

    521

    542

    553

    566

    573

    579

    Part-time†

    268

    288

    297

    303

    312

    312

    328

    Non-advanced further education (England)

    Full-time and sandwich‡

    288

    296

    328

    355

    344

    337

    338

    Part-time

    1,151

    1,125

    1,057

    1,064

    1,151

    1,191

    1,316

    * Universities and public sector higher education. Provisional.

    †Including the Open University.

    ‡Home and overseas students.

    School Books
    Mr. Tony Banksasked the Secretary of State for Education and Science what representations he has received from the Educational Publishers Association on the provision of books in schools.
    Mr. Barronasked the Secretary of State for Education and Science what recent representations he has received on the provision of books in schools.
    Mr. Chris Patten: During 1985 the Educational Publishers Association made representations to the Department about the level of expenditure on school books, and in particular the provision of books for the GCSE. I also had a meeting with it last February at which these issues were discussed. In addition, Ministers have received a number of letters from members of the public about the level of expenditure on school books.
    Mr. Banks: How can the Minister defend a 28·4 per cent. cut in real terms in book expenditure in the past five years? Is he aware that in the London borough of Richmond, controlled by the Liberal party, there has been a reduction in the past year of 77 per cent. in book

    Further Education
    Mr. Chapmanasked the Secretary of State for Education and Science what is his latest estimate of the total number of students in higher and further education; and how this compares with previous years.
    Mr. Walden: The numbers of students have been increasing and in higher education are now at their highest ever level. I have arranged for the detailed figures since 1979 to be published in the Official Report.
    Mr. Chapman: Will my hon. Friend confirm, more specifically, that the number of full-time students in higher and further education has increased by over 13 per cent. in the past six years, and that that, in spite of much misleading propaganda, is a trend worthy of commendation rather than condemnation?
    Mr. Walden: I am glad to have this chance to put the record straight, following earlier exchanges. The numbers of students in higher education since the Government came into office in 1979 are 80,000 up. The proportion of 18 and 19-year-olds entering higher education is 15 per cent. up and the numbers of mature students — an important category—are 12 per cent. up. If those are cuts, they sound very kind cuts to me.
    Following are the figures:
    spending in secondary schools? Does he not agree that if Londoners are interested in the welfare and education standards of their children they should vote Labour in the local elections on Thursday?
    Mr. Patten: Life is difficult enough without trying to explain the Liberal party to the hon. Gentleman, but I do not agree with his figures. Under this Government spending per pupil on books and equipment has gone up by 8 per cent. for primary schoolchildren and by 5 per cent. for secondary schoolchildren. Expenditure on books and equipment per pupil fell by 7·3 per cent. in real terms between 1975 and 1979.
    Mr. Barron: Does the Minister's answer take into account last year's HMI report on books in schools, which said that one third of schools were under-provided with books?
    Mr. Patten: What the HMI report actually said was that poor management and inadequate identification of needs were a more common cause of the shortage of books and equipment than low capitation.

  PRIME MINISTER

    Engagements
    Mrs. Dunwoodyasked the Prime Minister if she will list her offical engagements for Tuesday 6 May.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I have beeen asked to reply.
    My right hon. Friend is attending the economic summit in Tokyo.
    Mrs. Dunwoody: Can the Leader of the House reassure my constituents about radiation fallout? What is the size of the unit monitoring the effect on food and beverages? Is the evidence readily available? Are imported food and vegetables being monitored?
    Mr. Biffen: I am sure the hon. Lady will have all those points comprehensively and satisfactorily answered when my right hon. Friend the Secretary of State for the Environment makes a statement on the matter later this afternoon.
    Mr. Sackville: Does my right hon. Friend agree that events at Wapping at the weekend were utterly disgraceful and that we now know that the real policy of the Labour party is to condone mob violence and attacks on the police?
    Mr. Biffen: My hon. Friend makes an extremely pertinent point. The evidence was available for all who watched their television screens. Those scenes at Wapping were not only a shameful travesty of the true traditions of trade unionism, but underline how wise we are to have proceeded with trade union reform.
    Mr. Kinnock: The hon. Member for Bolton, West (Mr. Sackville) has raised a question which requires a response. The Labour party does not condone violence of any description by mobs or individuals in any circumstances.
    Does the right hon. Gentleman share my concern about the lack of clarity in the information relating to the measurement of increased radioactivity in parts of Britain? Will he give an undertaking that the relevant Departments will today produce figures of the levels of radioactivity that they are candid and accurate and that they will be published in a form that can be clearly understood by the general public?
    Mr. Biffen: As to the first point, of course I realise that the right hon. Gentleman, with total integrity, condemns the kind of violence outside Wapping at the weekend that was shown on our television screens. Whatever may have been said in the heat of the moment by others of his party, certainly I acquit him of having in any sense condoned what occurred. It was for that reason that I deliberately used the word "travesty". None the less, what happened at Wapping is a reminder of what can happen once those who stand behind trade unionism and who wish to manipulate it get out of hand and gain control.
    On the point that the right hon. Gentleman made in respect of the measurement of radiation, as he will know, my right hon. Friend the Secretary of State for the Environment will be making a statement this afternoon. It will touch specifically upon measurement and the extent to which there is verifiable satisfaction that the matter is
    16
    well within safe limits of tolerance. It would be a greater courtesy to the House if it was to get that information from my right hon. Friend.
    Mr. Kinnock: I know that there will be a further statement, but there is an important issue. The right hon. Gentleman is answering for the Prime Minister, so may I put this point to him? Does he agree with Mr. Eddie Ryder, the Government's chief nuclear inspector, that after Chernobyl there will have to be a pause before any further decisions are taken about the future of nuclear power in Britain?
    Mr. Biffen: I would have thought that in the whole development of nuclear power—and this will be attested to by those who work, and work for a proud tradition, in that industry in the United Kingdom—we have never hurried these matters.
    Mr. Couchman: If my right hon. Friend is in touch with the Prime Minister in the course of the day, will he pass to her congratulations on the successful outcome of the talks in Japan, the reports on which seem to be very favourable indeed?
    Mr. Biffen: I believe that my hon. Friend speaks for both Government and Opposition Members in applauding the successes that have been scored at the economic summit at Tokyo. I shall ensure that the message goes to the Prime Minister. The House will have a chance to learn direct from her on Thursday, when she will be making a statement.
    Mr. Benn: Reverting to the events at Wapping on Saturday night and Sunday morning, does the Leader of the House recall that similar language was used about Orgreave and that every miner charged with riot was acquitted? Does he recall that the police video showed that six cavalry charges occurred before a single stone was thrown and that four hon. Members, including myself, who were present on that night saw a succession of baton charges by the police against innocent people? Will the Home Secretary make a statement so that he can be held to account for the action of the police on Saturday night?
    Mr. Biffen: I have to say to the right hon. Gentleman—and as he was there he might perhaps have reflected before making the statement that he has just made——
    Mr. Willie W. Hamilton: The right hon. Gentleman was not there.
    Mr. Biffen: No, of course I was not. One hundred and seventy police were injured at Wapping on that evening and the wounds were not self-inflicted. If the House, like the nation, is to have any sense of balance about these matters, it will know that the police were acting under the most severe circumstances. I am sorry that the right hon. Gentleman could not have used the same language as the Leader of the Opposition.
    Mr. Sayeed: Does my right hon. Friend agree that one of the consequences of the nuclear disaster in Soviet Russia has been to show that the Soviet authorities are keener to save face than to look after their own people?
    Mr. Biffen: There are many lessons to be learnt from the whole of that episode, one of which is the great dangers that attend an enclosed society that has nuclear power and a nuclear accident of this nature occurs. The way that we are reacting to it in the West—and that will be

    17
    underlined by the statement later this afternoon—demonstrates that our main concern is to secure public confidence, which can be achieved only by a proper system of disclosure.
    Mr. Wallaceasked the Prime Minister if she will list her official engagements for Tuesday 6 May 1985.
    Mr. Biffen: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Wallace: Bearing in mind what the Leader of the House has said about the need for proper public disclosure in the nuclear industry, and bearing in mind also that the minor explosion at Dungeness was kept quiet for a number of weeks and that my constituents have had a considerable job trying to prise any information out of the Atomic Energy Authority in preparing a case against the Dounreay expansion, has the time not come for us to review the whole ethos of secrecy that pervades the British nuclear industry? Should we not make a start by abolishing the Official Secrets Act?
    Mr. Biffen: On the specific point about Dungeness, there has been no safety factor involved in that which has any relationship whatever to nuclear power, and the hon. Gentleman's implication is wholly unfounded. I dare say that quite soon we shall be able to arrange for a debate on nuclear power and, although I have no wish to usurp the authority of the Chair, I hope that the hon. Member for Caithness and Sutherland (Mr. Maclennan) and himself will both be called so that we can hear their sharply contrasting views on the subject.
    Mrs. Currie: Is my right hon. Friend aware that many Conservative Members represent coal miners and those who work in coal-fired power stations, particularly in Derbyshire, the smoke from which has been accused at most of damaging the health of a few trees? Therefore, will he encourage those Ministers concerned to ensure that we can look to the refurbishment and redevelopment of those power stations to help provide the energy needs of the future?
    Mr. Biffen: I shall certainly carry out that request.
    Mr. Austin Mitchellasked the Prime Minister if she will list her official engagements for Tuesday 6 May.
    Mr. Biffen: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Mitchell: When the Prime Minister recommended her economic policies as appropriate for adoption by the other Heads of State at the Tokyo summit, the economies of nearly every one of which has higher current and prospective growth, higher productivity and investment, plus lower unemployment, interest rates and inflation, can the Leader of the House tell us whether anyone laughed?
    Mr. Biffen: No, but if the hon. Gentleman wants to play his contribution for laughs, I am sure that there is a by-election electorate which wants to consider Britain's achievement in terms of output, exports, falling interest rates and falling levels of inflation, and to contrast that with the policies essayed by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), sustained by the leader of the Liberal party, which resulted in the debacle of Labour's defeat in 1979.
    Mr. Beith: Does the Leader of the House recognise the profound impact that the Soviet nuclear explosion has had on British public opinion, leading people to recognise just how enormous the consequences of such an accident will be, however unlikely? Has he forgotten his own days as a nuclear rebel, when he voted with us and against the right hon. Member for Chesterfield (Mr. Benn) when he sought to expand Windscale?
    Mr. Biffen: It is just possible that the sight of the right hon. Member for Chesterfield (Mr. Benn) caused me to scurry into the Lobby alongside the hon. Gentleman, but that episode demonstrates that I have always been open-minded and even-handed about nuclear power, arid one has never needed that more so than now, when certain forces in our society that want to undermine and destroy what benefits nuclear power can bring point to the Russian example to draw exactly the wrong conclusions. What the hon. Gentleman should be saying, I hope that he will be saying it on a future occasion, is how impressed he is by our nuclear industry's safety record and how wise we are to have the kind of planning procedures that attend its development.
    Mr. Nicholls: Does my right hon. Friend agree that it is bad enough that over 170 police officers should be attacked and beaten by a mob of Left-wing thugs, but what is infinitely worse is that Labour Members should use the occasion not to condemn lawlessness but to pillory the police? Can any political party that harbours such views seriously be fit for Government?
    Mr. Biffen: Enough was seen on television to ensure that those who have taken the stand that they have this afternoon in making an attack upon the police demean themselves much more than they can be demeaned by any words of mine.
    Mr. Freesonasked the Prime Minister if she will list her official engagements for Tuesday 6 May
    Mr. Biffen: I have been asked to reply.
    I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Mr. Freeson: Has the Leader of the House seen the reports on the Top Salaries Review Body proposals, which will probably lead to an increase of £100 a week for certain top brass in the Army, the Civil Service and judges? Will he give an undertaking now on behalf of the Government that when that report is formally received there will at least be a freeze on any proposals along those lines so that we do not have the obscenity of many people in Britain having to live on about £100 a week while it is proposed that people in certain positions should receive £100 a week on top of the high increases that they received last year?
    Mr. Biffen: Yes, I can confirm that I have seen the newspaper reports of the reviews, and it is true that they have now been deposited with the Government. I have not seen those reviews, and I do not know what figures they contain, so I cannot comment upon the right hon. Gentleman's assertion,. but they will be treated in the appropriate prudent and measured way.
    Mr. Greenway: Will my right hon. Friend find time today to read the Ealing Labour party election manifesto, which proposes the banning of sexist calendars——
    Hon. Members: Order.
    Mr. Speaker: Order. The hon. Member's question must relate to the responsibilities of the Leader of the House.
    Mr. Greenway: I am asking my right hon. Friend to read that document. The Labour party will double the rates in two years. Would not the electors of Ealing be thoughtless if they voted for Labour on Thursday?
    Mr. Biffen: My hon. Friend is quite correct to draw attention to that document, which he has otherwise called a treasure-house of absurdity — a masterpiece of understatement. My hon. Friend is wise to draw the attention of the House to the basic nature of the divisions in local authority that affect Londoners and others. People can either vote for a Government of proven experience and success, backed by their supporters, or for the uncertain Labour voices that appear to have only one thing in common, which, is a desire to, spend more public money, either ratepayers' or taxpayers'.
    Mr. Hardyasked the Prime Minister if she will list her official engagements for Tuesday 6 May.
    Mr. Biffen: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hardy: Does the right hon. Gentleman agree that a major reason for the Government's espousal of the pressurised water reactor is that it will confer considerable industrial export opportunities upon Britain? In the light of the Russian experience, does the right hon. Gentleman now agree that the prospect of such orders should be viewed with much greater caution? Does he further agree that no country with an inadequate bureaucracy or insufficient technological capacity should be seen as a ready customer?
    Mr. Biffen: The hon. Gentleman is a very fair and well-informed controversialist in these matters, and would agree that these are all factors for assessment and report in the Sizewell inquiry.

Russian Nuclear Accident (Monitoring)
3.31 pm
The Secretary of State for the Environment (Mr. Kenneth Baker): With permission, Mr. Speaker, I should like to make a statement about the arrangements for monitoring the effects in the United Kingdom of the accident at Chernobyl, and the results obtained.
As soon as news of the accident was received, the standing arrangements for monitoring air, water and foodstuffs, especially milk, were stepped up. The Departments mainly concerned are the Department of the Environment, the Ministry of Agriculture, Fisheries and Food and the Scottish and Welsh Offices, which have been working closely with the National Radiological Protection Board. Samples have been taken daily and since last Friday 2 May, daily bulletins have been issued by the NRPB after consultation with Government Departments. In addition, my right hon. Friend the Minister of Agriculture, Fisheries and Food has set up an incident room, from which advice on foodstuffs is available for members of the public.
The remnants of the cloud from Chernobyl arrived over the United Kingdom on 2 May. As a result, an increase in the normal background level of radiation was found in air samples taken at various parts of the country over the weekend. The levels found were nowhere near the levels at which there is any hazard to health, and more recent samples show that the levels in air are now falling rapidly as the cloud has moved away.
As a result of heavy rain in the northern part of England and Wales and in parts of Scotland, the levels of radiation in samples of rain water were found to be at a level where it was appropriate to warn people against drinking fresh rain water over long periods. That might apply to a few farmers in remote parts and, possibly, to some campers. There would be no hazard if the recently fallen rain were diluted with rain water already collected in water butts, or by streams, wells or reservoirs. The levels of radiation in piped water are less than one hundredth of the level at which any special action would be needed.
My right hon. Friend the Minister of Agriculture, Fisheries and Food is responsible for the monitoring and control of foodstuffs. I understand that samples of milk and fresh produce have shown amounts of radioactivity which are below the level at which action ought to be considered. Levels of radiation are now likely to decline over the next few days. I should stress that in judging whether the levels of radiation found require any special action, we act in accordance with international recommendations published by the International Commission on Radiological Protection.
My right hon. Friend the Secretary of State for Social Services is also keeping a close watch on imports of food into the United Kingdom from Russia and Poland, which was dispatched after 26 April this year.
The House will appreciate from what I have said that the effects of the cloud have already been assessed and that none presents a risk to health in the United Kingdom. Extensive monitoring will continue and its results will be made available to the public and to the House.
Dr. John Cunningham: The House will be grateful to the Secretary of State for making this statement and I hope it will deal with some of the natural concern
22
that is being expressed around the country. I wish to ask the Secretary of State a number of questions based on what he has said.
Will the Secretary of State tell the House whether anyone in the Government has overall responsibility for the co-ordination of the monitoring, the analysis and, most important, the dissemination of information to the public? There is considerable confusion among members of the public and the media about the nature of the advice from the National Radiological Protection Board, the Ministry of Agriculture, Fisheries and Food and other people who are making statements. Is it not absolutely essential that explicit, frank and open information is given to the public as regularly as possible?
Why is it that again, in this statement today, the Secretary of State has not been specific about the nature and the level of the radioactivity involved? The public are surely entitled to know these facts. Can the Secretary of State confirm that the majority of the contamination is iodine-131—an isotope with a half-life of eight days—but that, in addition, isotopes of tellurium, caesium-137, ruthenium, lanthanum and technetium have been detected? If that is true, what advice will be given about the longer-term nature of some of those isotopes and the consequences of their deposition?
Is the Secretary of State satisfied not only with the coordination of the monitoring but with its range and provision? Are sufficient localities being monitored in sufficient detail? Will the Secretary of State examine this and reconsider the situation?
Why has it not been possible so far for information to be given to the public on the basis of comparisons with the normal background levels of radiation? Why should the public not be told how much more radiation they are now being exposed to when compared with the normal background radiation? Is the Secretary of State satisfied that there is no need for the health authorities, for example, or the water authorities to give more detailed local information in areas where especially high levels of contamination have apparently occurred?
Can the Minister confirm that the highest levels of contamination were recorded on 3 May and that on 4 and 5 May those levels had declined and they are still continuing to decline? Will that information also be freely available to the public and the press?
Mr. Baker: I confirm what the hon. Member has said on the last point. My Department is co-ordinating the monitoring of this information. Our first indications that the radioactive cloud was over the country were on Friday; and over the weekend emergency operations were in progress. I was in touch with colleagues at that time. I agree with the hon. Gentleman when he asks the Government to be explicit, frank and open with information.
I have asked the NRPB, which has issued statements each day, to make available this afternoon a complete list of the data available to it in press offices in my Department, the Department of Health and Social Security and the Ministry of Agriculture, Fisheries and Food. It is bulky statistical information, but it represents all of the information that we have on monitoring. Initially, I think that only about 50 copies per press office will be available because it is bulky, but we will try to make more available during the day. Those who wish to know about that

23
information can approach the public inquiry points in the press offices of those three Departments. I agree that the information should be made available.
The Ministry of Agriculture, Fisheries and Food has opened a telephone line for public inquiries—it is 930 1196—and the Scottish Office will make a number available this afternoon, as will the Welsh Office. I strongly agree that the information should be available.
Mr. Robin Maxwell-Hyslop: Is my right hon. Friend aware that quite a number of schools and other groups have entered into contracts to travel to Soviet Russia and paid deposits on those contracts, but that the cancellation insurance excludes radiation from the events that can lead to repayment of the deposit? Does the Government's advice that has been given to date and any advice that my right hon. Friend should give constitute a statement of public policy which would void such contracts so that deposits can be recovered? What advice do the Government have for the organisers of such trips, who must either pay the remainder of the money for the Whitsun holiday or lose their deposits, unless the contracts can be voided on grounds of public policy?
Mr. Baker: My hon. Friend is quite right to raise this matter. No doubt he has a case in mind.
Mr. Maxwell-Hyslop indicated assent.
Mr. Baker: Local education authorities are responsible for the health and safety of children in their schools, and I expect them to act responsibly when carrying out that duty. The Foreign Office has already advised that visitors should avoid the western Ukraine, Byelorussia, Kiev and Minsk, Lithuania and north-east Poland. If my hon. Friend could let me have details of the case that he has in mind, I shall certainly raise it with my right hon. Friend the Secretary of State for Education and Science and with my right hon. and learned Friend the Foreign Secretary. I take his point about contracts.
Mr. Simon Hughes: Does the Secretary of State accept that the Government never expected such high levels of radioactivity from an incident so far away? Will he admit that, stripped of the gobbledegook, he has said today that the effect of the radiation on food, milk and water has come near to emergency reference levels? Will he also accept that there is grave discontent that, added to the continuing secrecy about some elements of nuclear activity — as was manifest last week at Dungeness—there is now unclear information for the public? Does he agree that the only solution is a daily county-by-county bulletin on the level of radioactive pollution? Does the right hon. Gentleman draw the conclusion that we on these Benches have long drawn and which the people of Britain clearly draw—they are concerned that the British industry is not safe enough and they do not want the nuclear programme to be expanded by a large majority?
Mr. Baker: I do not know whether that is alliance policy, or Liberal policy, but the hon. Gentleman cannot chide the Government about being frank. There are no party points to be made on this. The information which has been made available by the NRPB is the fullest information and the only information that the Government have on the monitoring. That information will be made
24
available. It should be contrasted with what will be made available in Russia. None of this sort of information will ever be made available in Russia. I take the point that many people, being aware of the dangers of this type of incident, are rather bemused about the complexity of the matter. There is so much talk of becquerels, milliSieverts, curies and rems. I think that in simple terms people are asking: is it safe to drink milk?—the answer is yes; is it safe to drink water from the tap?—the answer is yes; is it necessary for children to take iodine tablets?—the answer is no.
Mr. Albert McQuarrie: I am grateful to my right hon. Friend for the informative comments that he made in his statement. In rural Scotland, however, many farms and houses prefer to use rain water for their water supplies, and this applies not only to individuals but to dairy herds. Will he confirm that he will be advising his right hon. and learned Friend the Secretary of State for Scotland to use the facilities of monitoring services such as exist in the Macaulay Institute for Soil Research and in the Rowatt Institute in Aberdeen in order to ensure that the safeguarding of these water supplies and dairy herds is assisted in any investigations that he may make in Scotland?
Mr. Baker: My right hon. and learned Friend the Secretary of State for Scotland has asked water authorities to assist such people, who may depend rather more on rain water than other people in the rest of the United Kingdom, by telling them where they can collect water from public mains supplies. Water authorities and environmental health authorities have worked together to ensure that anybody who depends on rain water gets the right advice and obtains access to the mains supply. The NRPB has said with regard to rain water that people who depend on it should not drink it for a period of a week.
Mr. Jack Ashley: Does the Secretary of State agree that we want to avoid unjustified panic, but we want also to avoid unnecessary risks, so that people must be as fully informed as possible about this and other accidents? Can he assure the House that every accident in Britain involving nuclear waste of any kind or nuclear energy has been fully reported? Can he ensure that any future accidents in Britain will also be fully reported?
Mr. Baker: The arrangements for reporting accidents—nuclear accidents—were set out in a reply on 26 July 1982 by my right hon. Friend the Member for Croydon, Central (Mr. Moore) to a question asked by the hon. Member for Copeland (Dr. Cunningham). Those recommendations were made not by Government specifically but by the nuclear installations inspectorate, and it is those guidelines that we have followed since then.
Mr. Kenneth Carlisle: Will my right hon. Friend advise the House whether the NRPB is adequately equipped to monitor effectively the radiation levels in all parts of the country?
Mr. Baker: The NRPB, I think, has been doing a very good job. I think that Mr. Dunster has been very frank in the appearances that he has made on television over the weekend. The NRPB has a staff of some 300. It has monitoring bases at three of its laboratories—Chilton, Glasgow and Leeds. All nuclear installations in the United Kingdom, of course, have equipment that is capable of monitoring radioactivity.
Mr. Gordon Wilson: Is the Minister not aware that one expert has said that some tens of deaths will occur from cancer at some future stage because of this? While one appreciates that this could be a small number, relatively speaking, is he right to hold the opinion that there is no danger to public safety? Secondly, when was the incident room established. Will he confirm that the hot line has been set up just today and does he not think that this alarming lack of concern about informing the public of what may be occurring is symptomatic of the attitude of the Government in relation to these matters and puts a question mark over the way in which they have tackled this whole business?
Mr. Baker: No. The incident room was set up on Friday as soon as we knew that the radioactive cloud was over the United Kingdom. Up until then it had not been over the United Kingdom. Milk had been monitored since last Monday, when we first had news of the catastrophe in Russia.
Until the incident is over and it is possible to estimate the number of people exposed and the doses they have received, it will not be possible to produce the estimate for which the hon. Gentleman has asked. However, the likely total exposure will result in a very small additional risk to any one person. That has been emphasised by Mr. Dunster, who told me that the risk to individuals in Britain from the Russian reactor accident was very small.
Sir Hector Monro: As one who supports the nuclear industry and acknowledges the high standards of those who work within it, may I ask my right hon. Friend whether he agrees that it has been difficult for those who have tried to allay the fears of constituents over the weekend to find a common line from the many organisations involved? Would it not be helpful if the Government had a central point to which all information was fed, from which it could be disseminated to the media? This would ensure that they did not exaggerate the position and cause unnecessary alarm.
Mr. Baker: We have been operating the usual arrangements which exist within Whitehall for coordinating the Government's response to emergencies, and certain unusual circumstances. I am satisfied that these contingency arrangements have been working satisfactorily. Ministers have been kept fully up to date with the facts. I had talks with several Ministers yesterday and their response to the unfolding picture has been fully coordinated from the centre. It is inevitable that in a matter of this sort several Departments will be involved. The Department of Health and Social Security has responsibility for health, and the Ministry of Agriculture, Fisheries and Food is concerned with food in the United Kingdom and the testing of it. My Department is involved in environmental monitoring. The division of responsibilities is inevitable and one cannot get over it. I take note of what my hon. Friend has said, but it is the first time that the world has had to go through the experience of such a nuclear accident. I am certain that lessons will be learnt from it, and the lessons will be infinitely more valuable to the world if Russia is prepared to make more available to the world the effects within its own country.
Mr. John Home Robertson: Is the Minister aware that these events are assuming a particular significance in my constituency, where the first deliveries
26
of nuclear fuel were made at Torness power station only 10 days ago? Is he aware also that the Soviet nuclear power agency is not the only one to have a reputation for excessive secrecy and misleading propaganda? Will he confirm that these events are likely to increase the background levels of radiation in the environment and in food for the long term? What, specifically, will the Government do about imports of food products from heavily contaminated areas of eastern Europe?
Mr. Baker: Imports from Russia and Poland are now being stopped at the port of entry at the request of the DHSS. Samples will be taken to the MAFF laboratory at Lowestoft. The European Commission is considering this afternoon appropriate measures for intra-Community trade and trade with certain eastern bloc countries. This is an important matter and imported foodstuffs will not be released from port until we are satisfied that radioactivity is not present in them.
Miss Janet Fookes: As my right hon. Friend is responsible for co-ordinating Government activities in this instance, I ask him to repair the omission of any reference to those who are most at risk—those who are, or will be, returning from the Soviet Union or neighouring countries. Is he satisfied with the actions that are being taken to give such individuals thorough monitoring at the time of their arrival in the United Kingdom and at later stages, as we know that radiation can have long-term effects?
Mr. Baker: I appreciate my hon. Friend's concern. The National Radiological Protection Board monitored the students who returned from Kiev and Minsk at the end of last week and the radiation levels detected gave no cause for concern. Travellers returning from north Russia and eastern Europe to the United Kingdom who wish to undergo reassurance monitoring should go to their main police station, where they will be put in touch with the relevant place under the national arrangements for the radioactivity scheme.
Mr. Tony Benn: I thank the Minister for making a statement, and I recognise the difficulty in providing full information, but will the right hon. Gentleman recognise that there is widespread public anxiety about the implications of the accident and the possibility that such an accident might occur elsewhere in the world? As he has told the House, there are many Ministers with different responsibilities. Will he be so kind as to ask his colleagues to make possible a day in the House when we can discuss these matters, so that Members can put forward their anxieties and opinions and be given a measured Government answer? I think that the right hon. Gentleman will accept that there is a desire that goes across party lines to obtain some clarification of the full implications of what occurred in the Soviet Union, and of its long-term effect on our energy plans.
Mr. Baker: It will take some time to measure the effect, because exposures will vary in different countries, depending on the concentration of radioactivity in the cloud and the rainfall in a particular country. But I accept what the right hon. Gentleman says about fears that ordinary people have about this incident. I very much understand those fears. They arise from the unknown and from apparent secrecy. I have tried to allay those fears this afternoon by putting such information as we have before the country.
Mr. Teddy Taylor: Why has the ban which, according to the tapes, the Commission has just imposed on east European produce specifically excluded East Germany, although most of eastern Europe's produce goes through East Germany under an abuse of the inner German trade agreement? Will my right hon. Friend inquire whether we have the power to impose a ban on East German produce, despite the terms of the inner German trade agreement?
Mr. Baker: I was not aware of that point, but I shall look into what my hon. Friend has said about East Germany this afternoon.
Dr. John Marek: I thank the Secretary of State for making such information available, but perhaps I can press him a little further. Will he undertake to ensure that the information collected in the next week or so in made available? Will he confirm that the raw information will be made available, and that any analyses done by his or any other Department that leads to identification of the materials causing the radiation will also be made available? Moreover will he ensure that the Departments concerned are helpful about answering the questions of any members of the public who have a reasonable interest in this matter?
Mr. Baker: The answer to the hon. Gentleman's latter question is yes. I have announced that the information will be available through the public inquiry points in the various Government Departments. As the hon. Gentleman has said, the raw information or data will be of interest to scientists in the academic world and to analysts who can work on it. There is no reason why information should not be made available on a continuing basis, either daily or in batches of two days.
Mrs. Elizabeth Peacock: Is my right hon. Friend aware that most comment on the radioactive contamination refers to a short-term problem, presumably attributed to iodine-131? Will he confirm the level of long-term radioactive contamination due to strontium-90 and caesium-137?
Mr. Baker: As the hon. Member for Copeland has said, the radioactivity of iodine-131 declines by half over a period of about eight or nine days. The radioactivity will remain for much longer in the other nuclides. That will, indeed, conic out in the monitoring. We are fortunate in the United Kingdom because at this moment of time—I say, at this moment of time—the amount of precipitation of radioactivity is relatively low compared with other countries. The advice that I have received from scientists this morning and this afternoon is that the increase in radioactivity in the general background is very low, but there has been a small increase.
Mr. Robert Maclennan: Does the Secretary of State agree that openness is also important internationally? Does the European Commission propose to enter into discussion with COMECON about the monitoring of foodstuffs? What is the Government's attitude towards the proposal to ban imports from other east European countries than just Poland and the Soviet Union? Is the right hon. Gentleman aware that many people in the British nuclear industry have long held grave reservations about the particular reactor that caused this international catastrophe, and have said as much for many years?
Mr. Baker: The European Commission has been meeting this afternoon and we will certainly take heed of what it says. If we were satisfied that imports had to be stopped from any country in the interest of the health of our people, we would stop them. There is no question about that.
Regarding the safety of the Russian reactor, hon. Members will have read enough in the weekend press to know that our scientists thought that the design of the reactor was inherently unstable. The Russians have been aware of that fact for some time. I hope that one outcome of the disaster will be that countries will be much more aware that, in the design of nuclear installations, they have an international obligation to take into account the views of others.
Mr. Michael Forsyth: Does my right hon. Friend agree that one of the most reprehensible aspects of the whole affair has been the way in which the opponents of nuclear power have deliberately sought to exaggerate the dangers and to exploit public fears? As I have a private water supply in Scotland, an expectant wife and young children, does he agree that I was right to advise them that there was more danger from luminous watches and alarm clocks around the house than from any fallout arising from the Chernobyl disaster?
Mr. Baker: There are, of course, many sources of radiation in the atmosphere. The level of background radioactivity varies in different parts of the country. I appreciate that such a disaster does cause public anxiety and concern. I have tried, this afternoon, to put the cards on the table to allay some of that. As I have said, the levels so far in the United Kingdom do not provoke great concern. That does not mean to say that we should not be vigilant in maintaining our monitoring and letting the public know of the consequences as soon as possible.
Mr. George Foulkes (Garrick, Cumnock and Doon Valley): Can the Secretary of State confirm that the Scottish Office issued a statement today saying that the statistics which it published yesterday were totally inaccurate? In view of that, will he review the accuracy, speed of collection and comprehensive nature of the gathering of such statistics? Since the effects of radiation are cumulative, will the right hon. Gentleman institute some kind of monitoring, especially of children, of the cumulative effects of the Chernobyl disaster, including rain, milk and entry into the food chain, coupled with discharges from Sellafield and other sources in the United Kingdom, and see what effect that total accumulation of radiation is having on children, particularly those in the west of Scotland?
Mr. Baker: I understand from my hon. Friend the Under-Secretary of State for Scotland that one figure was corrected yesterday. As I understand it, it was corrected downwards.
Mr. Foulkes: It was still wrong.
Mr. Baker: I am advised that inhalation of the cloud and skin exposures to radiation on the ground contribute very small doses to the body—about one ten-thousandth of the annual dose limit. Therefore, there need be no cause for concern.
Mr. Bill Walker: Is my right hon. Friend aware that over the weekend and yesterday, Scotland had some very heavy rain storms? Some of the

29
Scottish media reported that the rain storms were from the cloud with the radiactive material. Can he confirm that there is no danger to people in Scotland, and that next week's visit by the Prime Minister and other senior members of the Government to the Conservative party conference in Perth will show that there is no danger?
Mr. Baker: I do not believe that the current level of radioactive precipitation in Scotland will divert my right hon. Friend the Prime Minister from visiting Scotland.
Mr. Allan Rogers (Rhondda): I thank the Secretary of State for the information he has given today and for his assurances that the fullest possible information will continue to be given. Will the right hon. Gentleman ensure that the information will be given in its proper context? Old and young people are genuinely frightened by the statements that have appeared in the newspapers this weekend. Does the right hon. Gentleman agree that the childishly trivial remarks of the hon. Member for Stirling (Mr. Forsyth) and the ridiculously alarming remarks of the hon. Member for Southwark and Bermondsey (Mr. Hughes), who are looking for cheap political points, do not help the situation?
Mr. Baker: I agree with the latter part of the hon. Gentleman's last question, but not the first part. It is very difficult to explain some of these technical matters in a simple way. It is not impossible, and we shall seek to do so. A frank explanation is the best way of doing that.
Viscount Cranborne: In view of my right hon. Friend's strictures about the need for complete Soviet frankness in such matters, should we not be considering a little more than an expression of hope and trying to co-ordinate something which will induce the Soviets to come clean on their nuclear safety record? Should we not be trying to bring into this not only western European countries but COMECON countries which are most directly affected?
Mr. Baker: The COMECON countries seem to have been adversely affected in some cases. The initial reaction of the Soviet Government was to close in upon themselves and put down the shutters. That is perhaps the old tradition in which Russia has conducted itself over the centuries. It was only towards the end of last week that Russia began to open up and realised that there were advantages in doing so. A fairly full statement was made by the Soviet Government on Friday and Saturday. I hope that they will be frank and open, because radioactivity knows no national boundaries. The disaster has affected some of Russia's small neighbours. It is the duty of a powerful country such as Russia, which is capable of producing electricity from nuclear power, to be frank and open. Even at this stage, I feel that there was some shame in Russia that this disaster had occurred and the Government did not want to open up the matter. The tragedies in America, such as that involving the Challenger mission, have been dealt with openly.
Several Hon. Members rose——
Mr. Speaker: Order. I appreciate that this matter is of grave concern to hon. Members and their constituents, but I must bear in mind the fact that we have a heavy day in front of us. The Adjournment debate must end at 7 pm. I will allow questions to continue for a further 10 minutes; that is to say, until a quarter past four. After that, we must move on.
Mr. D. N. Campbell-Savours: If the scientists are so unanimous in their condemnation of the technology in the RMBK plant in the Soviet Union, why was it that successive Governments did not protest at the development of that plant? They must have foreseen the inevitable disaster that has taken place. Why has there been a cover-up over the gas radiation leak from Dungeness A? Do the Government intend to make representations through the International Atomic Energy Agency to ensure access in France to the six PWR reactors, all of which are within 90 miles of London?
Mr. Baker: My right hon. Friend the Minister of State, Department of Energy, intends to make a statement fairly soon about access to the International Atomic Energy Agency. It is a bit thick to say that somehow we are to blame for the design which was adopted by the Russian nuclear industry. I do not know what the reaction would have been if we had protested. We have made it clear that the design was unsuitable and inherently unstable so far as the United Kingdom was concerned. The responsibility in this area must lie in the Kremlin.
Mr. Sydney Chapman: Most of my constituents will be reassured by my right hon. Friend's statement this afternoon which, if I understood it correctly, said that the increase in radiation in parts of Britain was at a level of only one hundredth of that which would have caused a potential danger. Will my right hon. Friend accept that many more people would be reassured if they could measure the amount of increased radiation caused by the accident against, for example, the radiation they get from television sets in their homes? Can my right hon. Friend provide those figures?
Mr. Baker: I will consider that. Many people would be surprised at the amount of radon radioactivity which is naturally in the atmosphere. Someone having a picnic in Cornwall and sitting close to a granite rock may be subjected to a high level of radiation.
Mr. Tom Clarke: Does the Minister accept that there are genuine anxieties in Scotland, and that those anxieties are not helped by the contradictory statements which are made from one day to another? Is the Minister satisfied with the co-ordination between the Scottish Office, the Milk Marketing Board and the consumer? Why is there such a delay between one test and the other?
Mr. Baker: As I understand it, there is good cooperation. The Scottish Office follows the matter closely and is part of the team doing so.
Mr. James Couchman: Is my right hon. Friend aware that, this morning, there was a most responsible programme on the radio during which two experts—one from the NRPB and one from Newcastle university—sought to still the perfectly justifiable fears of a number of the people who rang in? Because of the unique ability of the Public Information Office to disseminate information, will my right hon. Friend ensure that that office makes sure that the BBC is positively briefed in the next few days on this subject so that it can disseminate informaton to the people at large?
Mr. Baker: I take entirely my hon. Friend's point about the media's importance in the past few days. In my judgment, they have been handling the matter very responsibly. Today, I saw a further broadcast on the

31
midday news and the 1 o'clock news in which the interviewer put the difficult points straight to a leading United Kingdom physicist. Those points were answered frankly. The interviewer did not let the physicist wriggle away from them. Over the weekend, I saw several interviews, as, I am sure, did hon. Members on both sides of the House, and was impressed by their frankness and openness.
Mr. Reg Freeson: Is the right hon. Gentleman aware that the concern among hon. Members about the Government not making representations about the accident in Russia does not imply that the British Government or Britain were to blame for what happened? Why were representations not made? Will representations about such models be made from now on? It has been reported—none of us can yet be sure that it has any validity—that the first generation of Magnox stations in Britain have similar weaknesses. Are the Government checking that? Will a statement be made on that aspect?
Mr. Baker: I am sure that, as a result of this incident, there will be quite justified international concern about safety at nuclear power stations which will be made evident by Governments and international agencies. The right hon. Gentleman must appreciate that the Soviet Communist party at its 27th congress approved a massive expansion of its nuclear generating programme, doubling its size in the next few years. I do not know whether the Soviet Government will listen too much to representations by other countries when they probably do not take too many of their own people into their confidence.
Mr. Tony Marlow: In an attempt to put the matter into context, assuming the worst case and on the best information available, how does the total radiation from Chernobyl compare with the total radiation from the Hiroshima bomb? Given that Chernobyl is basically part of the Ministry of Defence in Russia rather than an electricity generator, why have not traces of plutonium been registered? What help are we giving the Russians?
Mr. Baker: I am not in a position to answer any of those questions. I shall try to find the answers. I do not have off the cuff the comparison between radiation fallout at Hiroshima and radiation fallout at Chernobyl.
Mr. Robert Kilroy-Silk: Send a message to the Box.
Mr. Baker: I suspect that, even if I sent a message to the Box now, the information would not be readily available in the next few minutes.
Mr. Tam Dalyell: At what time was, first the Secretary of State and, secondly, the Prime Minister first informed that British scientists were talking to their Russian counterparts about the problems at Chernobyl?
Mr. Baker: I should have to have notice of that question.
Mr. David Sumberg: This is a matter of concern to my constituents who live in the affected area. As my right hon. Friend was kind enough last Friday to visit my constituents, will he put the matter into perspective by emphasising that it is perfectly safe to drink the tap water in Bury? Does my right hon. Friend accept
32
that the announcement and the questions which followed are in stark contrast to the way in which the matter was handled in the Soviet Union?
Mr. Baker: My hon. Friend can certainly assure his constituents that it is perfectly safe to drink and to use tap water anywhere in Britain, including Bury'. It is perfectly safe also to drink milk.
Mr. Greville Janner: How long does the right hon. Gentleman expect the emergency operation to be maintained? What is happening to the radioactive cloud? Is it expected to move again in this direction? I ask that question specifically because, last week when I raised it, I received a reassuring reply which was overtaken by events that have worried the entire country.
Mr. Baker: From time to time, Ministers are prone to make optimistic assessments. I shall certainly not get into the business of weather forecasting and of trying to judge what will happen to the cloud. Monitoring will be maintained until we feel that the emergency has ended.
Mr. Dennis Skinner: Why does the nuclear industry operate in reportable incidents only by guidelines and not by law? If the right hon. Gentleman wants to be frank and open, why does he not treat nuclear incidents like the reportable incidents in the coal mines where anything more than a broken arm is reportable under the mines and quarries legislation? If that were done, the right hon. Gentleman could answer the charge which has properly been laid against him, that he is attacking the Soviet Union for failing to respond properly to the disaster but is doing the same himself? Is the right hon. Gentleman doing that because he agrees with the Secretary' of State for Energy that nuclear power is the safest form of energy known to man? Would it not be a good idea for the right hon. Gentleman and the Secretary of State for Energy to put a paper before the Cabinet to recommend halting the pit closure programme in the light of the recent disaster and the others that have preceded it worldwide?
Mr. Baker: The hon. Gentleman goes a little wide of the matter, but I do not criticise him for that because for some time he has taken that line about the nuclear industry. I have referred to the procedures which we have followed since 1982. They were recommended to us by the nuclear installations inspectorate, which is answerable to the Secretary of State for Employment and is concerned with safety. Those procedures have been followed in dealing with incidents in the United Kingdom.
Mr. Jeremy Corbyn: Does the right hon. Gentleman accept that much of the disquiet and opposition voiced in the past few days about the nuclear power industry and its safety record is of legitimate concern? Does the right hon. Gentleman agree that, so long as Britain or any other country in the northern hemisphere has a nuclear power industry, there is a dangerous and implicit possibility of pollution following an explosion or emission from a nuclear power station? Does the right hon. Gentleman agree that, so long as we have a nuclear power industry, problems will be associated with the disposal of radioactive waste? Does he agree with my right hon. Friend the Member for Chesterfield (Mr. Benn) that we need a debate in Parliament so that opposition to the whole nuclear programme and its dangers can be voiced here, as they have been voiced outside?
Mr. Baker: I shall certainly draw the hon. Gentleman's point about a debate—if it has not already been heard—to the attention of my right hon. Friend the Leader of the House. The hon. Gentleman has moved into the matter of safety of nuclear power generation. I remind him that the United Kingdom has a very good safety record. There has been no full-scale major incident during 25 years of operation of civil power stations in the United Kingdom. Very high standards of safety were involved in the design, and construction of British nuclear power plants. Safety is very important and is the predominate element in the generation of electricity from nuclear power.
Mr. Alfred Dubs: Implicit throughout the right hon. Gentleman's statement has been the belief that there is a threshold below which levels of radiation are safe. What is the right hon. Gentleman's evidence for such a threshold? Is it not equally tenable that radiation, like other poisonous substances, becomes more dangerous with each increment? Is not the idea of a threshold really a myth?
Mr. Baker: I do not agree. There are safety levels, and they are not levels that we, or British scientists in particular, have conjured up. For example, the NRPB is working to recommendations published by the International Commission on Radiological Protection.
Dr. Cunningham: As the purpose of today's statement is to clarify the position for the public and to allay their genuine fears and concerns, I should like to re-emphasise the point I put earlier to the Secretary of State. It is important to give the public information in such a way as to enable them to understand it and make valid comparisons. Although we know that the general public do not every day bump into milliSieverts or becquerels, they can make simple numerical comparisons. There is no good reason why people should not be given information. Nevertheless, we want all the information to be published—and statements which make simple numerical comparisons with existing background levels of radiation.
Mr. Baker: The hon. Gentleman did make that point at the beginning and it was also made by my hon. Friend the Member for Chipping Barnet (Mr. Chapman) and others during questions. I think that the point is valid and I will see whether some comparisons can be put out relatively quickly.
Mr. Ashley: On a point of order, Mr. Speaker. Would it not be possible for the Foreign Secretary to make a statement tomorrow, because there is a great deal of anxiety among people from Britain who want to visit Europe and do not know which parts of Europe will be safe because of the Russian secrecy? Possibly that statement could be the first of a series by the Foreign Secretary to give as much information as possible to people hoping to travel abroad.
Mr. Speaker: That is not a matter for me. I am sure that the right hon. Gentleman's comments will have been heard by those on the Government Front Bench.

News International Plant, Wapping
4.21 pm
Mr. Ron Leighton: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, to discuss a specific and important matter that should have urgent consideration, namely,
"the conduct of the Metropolitan police at Wapping on 3 May."
The matter is specific because it is the responsibility of the Home Secretary and it is important because it deals with the reputation and credibility of the Metropolitan police and the democratic rights of ordinary British citizens.
The House will know that there were a number of eye witnesses to those events, including hon. Members. I was there and what I saw was a police riot. I was absolutely ashamed of what I saw. I never thought that I would see events of that type in this country.
As you know, Mr. Speaker, London printers are not criminals who can and should be bludgeoned in that indiscriminate way. The police response was wholly disproportionate to anything that had happened. After the first minor incident, for hours there were violent police baton charges which were completely unnecessary. I have a preliminary list of the names, addresses and telephone numbers of 44 people who were injured.
There was no warning of the brutal attacks, nor was the crowd allowed to leave. At about 12 o'clock I tried to leave Wellclose square. As I tried to leave I was stopped by riot police with batons and shields. I said that I wanted to leave and they said that they were not allowed to let me. [Interruption.] There are hooligans in the Chamber. I am giving an eye witness account of what happened to me. I hope that the House will want to know what happened and not what the hooligans in the House want to shout about.
Mr. Speaker: Order. The hon. Gentleman should make his submission as to the urgency and importance of this matter.
Mr. Leighton: The urgency is that I tried to leave and they told me that no one was allowed to leave. I explained who I was and asked why I was not allowed to leave. They said that it was on the orders of a superior officer. When I spoke to the superior officer he asked me whether I was alone. He then allowed me to leave. If I had wanted to lead the crowd away, I would not have been allowed to leave. The urgency is that unless some change is made soon people will be killed by the Metropolitan police. The House should discuss that.
Mr. Speaker: The hon. Member for Newham, North-East (Mr. Leighton) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he believes should have urgent consideration, namely,
"the conduct of the Metropolitan police at Wapping on 3 May."
I have listened carefully to what the hon. Gentleman has said. He knows that the only decision I have to make is whether to give this matter precedence over the orders set down for today or tomorrow. I regret that I do not consider the matter that he has raised appropriate for discussion under Standing Order No. 10 and, therefore, I cannot submit his application to the House.
Mr. Tony Benn: On a point of order, Mr. Speaker.
Mr. Speaker: Not on that decision.
Mr. Benn: I am not questioning your decision. Is it in order for the grave events that occurred two miles from this Chamber on Saturday and Sunday night to be raised in the House on Thursday in the debate on crime prevention? That would provide an early opportunity for those who were present to report on the brutal battering by the police.
Mr. Speaker: If the debate is on the Adjournment, it will be a wide debate and I judge that it will be in order to discuss matters of that kind.
Mr. Nigel Spearing: On a point of order, Mr. Speaker. In view of the statements made by my right hon. and hon. Friends, various statements made in the press and allegations by Conservative Members and as the Home Secretary is in the House and is accountable to the House, would it be in order for us to know whether he will inquire into these matters and make a statement prior to the debate on Thursday?
Mr. Jeremy Corbyn: Further to that point of order, Mr. Speaker. I do not wish to challenge your earlier ruling in any way. However, would it be in order for the Secretary of State for Social Services to be asked to attend the debate on Thursday and make a statement about the directions given to the Health Service on Saturday evening? Policemen were taken to a hospital near to the Wapping printing plant, but printers and other people injured in the demonstration were taken to St. Bartholomew's hospital, which is some distance away, and ambulances were prevented from getting to the scene of the police violence against the pickets on Saturday evening. Those are serious matters.
Mr. Speaker: None of those are matters for me.

Nuclear Accidents (Contingency Arrangements)
4.26 pm
Mr. Frank Cook: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the non-existence of the Government's contingency plans for the protection of those at risk following nuclear accidents and the lack of information available to the public."
This matter is specific because it relates to widespread confusion, anxiety and justifiable resentment resulting from everyone's inability to obtain information, counsel or guidance on precautions to be adopted in the current situation. That is particularly so on the part of those engaged in farming in a "grass only" discipline who had already turned out their herds to graze this year.
This matter is important because that inability highlights the ill-prepared nature of the Government's readiness. That is typified by the response I received when I tried to ask the Secretary of State to list the locations where people could have free access to emergency plans and procedures for them to prepare against such radioactive fallout. I was told that one cannot ask a question about something that does not exist. When I went further and asked why no plans existed, I was again told one cannot ask about something that does not exist. One is not to know that does not exist until one finds out.
This matter is urgent because the level of incidence of elements such as tellurium—132, and iodine—131 occurring in such quantities, and the nature of those elements being short-lived but doubly dangerous, means that decisive action is required to prevent the inclusion of affected milk supplies in infant formula milk and school quotas. Perhaps we should finally find a use for the food mountains of Europe.
Is it not ironic that we should criticise the Russians, quite properly, for their inability to provide information about British subjects being exposed to radiation, yet the Department of Health and Social Security refuses access, as it did to me last Friday, to information relating to British subjects consuming the same stuff. I urge you, Mr. Speaker, and the House to agree to adjourn the business of the House to enable a debate to take place on those most urgent and other related matters.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the non-existence of the Government's contingency plans for the protection of those at risk following nuclear accidents and the lack of information available to the public."
I have listened carefully to what the hon. Gentleman said—as, indeed, I listened carefully to the exchanges earlier this afternoon. I regret that I do not consider the matter that the hon. Gentleman has raised to be appropriate for discussion under Standing Order No. 10, and, therefore, I cannot submit his application to the House.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, proceedings on the Motion in the name of the Prime Minister for the Adjournment of the House shall, if not previously concluded, lapse at Seven o'clock.—[Mr. Peter Lloyd.]

Concessionary Television Licences for State Retirement Pensioners
4.31 pm
Mr. Allen McKay: I beg to move,
That leave be given to bring in a Bill to provide for concessionary television licences for State retirement pensioners and others.
In 1982, I presented a similar Bill, upon which the House divided. The Bill was accepted by 187 votes to nil—a clear expression of the will of Parliament on this issue. I presented similar Bills in 1983 and again in 1984, so this is the fourth time that I have done so.
The statutory authority for a concessionary television licence is contained in the Wireless Telegraphy (Broadcast Licence Charges and Exemption) Regulations 1970. An extension of that scheme was introduced in 1978 by the then Home Secretary, my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees). Following representations in 1983 by my hon. Friend the Member for Bolsover (Mr Skinner) and my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley), a further extension was made to provide for physically and mentally disabled persons living in local authority residential accommodation and residents in categories of sheltered homes in which elderly persons were present and already in receipt of a concession.
Each increase in the cost of a television licence makes the position for those who do not receive the concession compared with those who do so much worse. In addition, as expected, the reduction in central Government support to local authorities, plus rate-capping problems, has meant a reduction in the local authority help that used to be available. That is shown by the fact that, of the 17,161 persons receiving local authority help, 12,555 are in Yorkshire and Humberside, 11,518 of whom are in one authority alone—Rotherham. My own authority' s small but welcome contribution suffered because of Government cuts.
Pensioners are debarred from the present national scheme simply because their accommodation does not come within the rules, although the circumstances in which they live are the same as or little different from those of people who are eligible. While 635,000 persons in the United Kingdom benefit from the 5p residential rare concessionary television licence, 4·8 million exclusively pensioner households—some in the public sector, but most in the private-rented or owner-occupied sector—do not. Clearly, that is inequitable, and it is a matter of concern to many right hon. and hon. Members and to all pensioners and pensioner organisations.
Without doubt, the right approach would be to increase pensions to such a level as to enable pensioners to pay the cost of a television licence without a concession, but it is evident that that happy position will not be reached yet. Therefore, action has to be taken by the Government. My Bill makes that possible.
To include in the concessionary scheme all exclusively pensioner households would cost about £220 million and would at the same time protect the present recipients of the concession. To raise that income by increasing the cost of all other licences would be an unfair burden on the unemployed, the sick and other low-income families. However, it could be raised, either by increasing the basic

39
rate of income tax by only 0·2p, or by increasing VAT by only 0·24 per cent. But why not dispense with television licences altogether, thus avoiding all possible anomalies, at a cost of £952·5 million? That could be raised either by increasing the basic rate of income tax by only 0·8p or by increasing VAT by 1 per cent.
There are other ways of raising the income. About 98 per cent. of general households have a television set, but £80 million is not paid because people do not pay their television licence fees. Why should there not be a flat rate for all television licences for all households, except those who do not wish to take part in the scheme? The checking of the other 2 per cent. who say that they do not have a television, but probably have one anyway, would be simpler.
My Bill, if supported by the House and allowed by the Government to proceed, would give us the opportunity to discuss the issue and the means of funding, while protecting present recipients. The Bill is fair and equitable to all, which is not the present position. The Bill may not be allowed to proceed, but my presenting it is a reminder to a future Labour Government, if they are returned to power, that a past Labour Government promised to phase out television licences for state pensioners and others in the lifetime of a Parliament. I am reminding them of that promise.
Question put and agreed to.
Bill ordered to be brought in by Mr. Allen McKay, Mr. Joseph Ashton, Mr. Geoffrey Lofthouse, Mr. William O'Brien, Mr. Alec Woodall, Mr. David Winnick, Mr. Peter Hardy, Mr. Roy Mason, Mr. Terry Patchett and Mr. Dennis Skinner.

CONCESSIONARY TELEVISION LICENCES FOR STATE RETIREMENT PENSIONERS
Mr. Allen McKay accordingly presented a Bill to provide for concessionary television licences for State retirement pensioners and others: And the same was read the First time; and ordered to be read a Second time upon Friday 6 June and to be printed. [Bill 156.]

Prisons
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
Mr. Speaker: Before we move on to this important debate on the situation in Her Majesty's prisons, I remind the House that the debate must finish at 7 o'clock. We have had a later start than I hoped, because of an important statement. I hope that hon. Members will bear that in mind.
4.37 pm
The Secretary of State for the Home Department (Mr. Douglas Hurd): The occasion for this debate is the recent outbreak of riot and destruction in our prisons. Before I sit down I shall bring the House briefly up to date with our assessment of those events and their consequences. What was missing from the question and answer sessions last week, and what I want to give the House today—succinctly, I hope—is an account of how the Government see the future of our prisons and the conditions for those who live and work in them. I hope to cover the size of the prison population, the condition of the prison estate, the resources, in men and money, that are at the disposal of the service, and the systems of management, work organisation and training that serve the prisons. I shall try to slice pieces out of my speech, but inevitably it will have to contain a good deal of matter, and I fear that that will limit the extent to which I shall be able to give way.
I refer, first, to the size of the prison population. As everyone in the House this afternoon knows, the trend has been upwards under recent Governments of both parties. When I became Home Secretary last September, the prison service was grappling with the effects of a sudden and most disturbing surge in numbers. From just over 43,000 at the beginning of November 1984, the prison population had risen by over 5,000 in nine months to a record 48,200 at the beginning of August last year. The Government, at short notice, provided over 2,000 additional places and recruited additional staff to help relieve the hard-pressed local prisons. Lindholme was bought, converted and brought into use in 16 weeks — a remarkable achievement, which went almost unnoticed.
I am glad to say that so far, although things could change, there is little evidence that this year we shall have to face a comparable surge in the population. In recent months, in contrast to the rapid increase during the early part of 1985, the total population has been relatively stable. On 25 April it stood at 47,250, 1,000 lower than the peak reached in early August last year, but I emphasise that we cannot afford to relax or be in the least complacent about the underlying situation.
The House will note that last year's surge was handled without massive recourse to police cells. That was because, between 1984 and 1985, we saw the first fruits of the accelerated programme of prison building. Three new establishments, providing 1,000 places, were opened at Wayland, Thorn Cross and Stocken, and 500 newly built places were brought in last year at existing prisons. The aim of that programme is not just to keep pace with the prison population, but to reduce and then eliminate the grotesque overcrowding in some of our prisons that we found when taking office. Sins of omission often go undetected for a time. I believe that it is one of the

41
unremarked scandals of the period 1974 to 1979 that, while the prisons filled, the Government of the day attempted no serious remedy. They sat tight and hoped that no one would notice, and the prison service is paying the penalty for that today.
That is why we had to set in hand the largest prison-building programme this century. It took time, since we inherited a tiny programme and no preparation for a large-scale programme. Nevertheless, we have made a remarkable start. From 1979–80 to January 1986, total expenditure was £322 million. The building programme includes a total of 18 new prisons. These new prisons will produce more than 8,000 places by the early 1990s, together with a further 5,500 produced by 25 major capital schemes in existing establishments, as well as the opening of Lindholme and of a former open borstal establishment for prison purposes. In addition, schemes either in the prison-building programmes or planned will provide about 10,000 existing places with integral sanitation.
These developments do not only mean improved conditions for prisoners. They also mean better working conditions for staff. Integral sanitation, for example, means that staff no longer have to supervise what by modern standards is the fearful practice of slopping out. Improvements in staff facilities—staff social centres, showers and lockers—are also included in the building programme.
I should now like to consider the scope for reducing the growth in the prison population or, indeed, reducing the population absolutely. I realise that there are many Opposition Members who have placed almost all their emphasis on reducing the prison population. Without going into the whole of the argument, that arguments ignores that we have a judiciary that is independent of the Executive. Parliament sets the framework of the law within which judges make their decisions. My job is not to dictate to the judges, but to ensure that places are available for those whom the courts consider it necessary to commit to custody. Indeed, the public are entitled to know that those whom the courts consider must be committed to custody can be safely and securely contained.
Mr. Robert Kilroy-Silk: Will the right hon. Gentleman give way?
Mr. Hurd: I should like to finish my point and then I shall give way, although I do not intend to give way often.
I cannot allow a situation to arise where I say to the courts, "Here is an offender whom you, having heard the evidence, believe to be guilty and whom you propose to send to prison, but you must not send him to prison because the prisons are too full." A Government who took that line would be rightly and severely condemned.
Mr. Kilroy-Silk: The right hon. Gentleman is correct. No Opposition Member has ever made that point. The right hon. Gentleman, in answer to my previous interventions on this subject, has given the impression that the sole argument for reducing the prison population rests in some way on channelling the discretion of the judiciary. That is not the case. Those of us who have made the case for a substantial and permanent reduction in the prison population over the past decade have put forward several viable means of reducing the population. Those proposals have come from the Conservative Benches as well as from
42
the Opposition. The judiciary could at least help to create a climate more conducive to shorter prison sentences, as the Home Secretary's predecessor and his predecessor's predecessor were successful in doing.
Mr. Hurd: I shall deal with some of the hon. Gentleman's suggestions later in my speech. I hope that the hon. Gentleman's first point is now common ground on both sides of the House. However, I constantly read suggestions that we should impose a limit on the number of people whom the courts should send to prison.
Mr. Gerald Kaufman: The Home Secretary has said that it is unthinkable that the courts should be influenced not to imprison people. Why, therefore, did he authorise a circular to the courts on 30 April in which he advised the courts:
"Where persons on bail are due to appear for summary trial in respect of matters for which they are likely to receive a custodial sentence, it may be desirable to adjourn the proceedings. Courts might also give very careful attention to the matter before imposing periods of immediate or suspended imprisonment in default of payment of such matters as maintenance, fines and rates."
The Secretary of State was telling the courts that, regardless of what they think, they should not send people to prison.
Mr. Hurd: If the right hon. Gentleman reads the circular he will see that it does not deal with disposals. it deals with bail and with the timings of hearings. Specifically, it does not attempt to tell the courts that they must not send people to prison because the prisons are too full.
In relation to the point raised by the hon. Member for Knowsley, North (Mr. Kilroy-Silk), the Government should have a view about the role of prisons and about sentencing as part of their policy for law and order. I have made my views plain. They coincide with those of my predecessor and of the Court of Appeal. Those who commit the worst offences—such as offences of serious violence or drugs trafficking—must expect to spend very long periods in custody. The public expect, and deserve, to be protected from such offenders and to see them receive a just measure of punishment.
For those convicted of less serious offences, however, custody should be used sparingly. I inherited, and intend to continue, a policy of emphasising credible and tough alternatives to imprisonment. We cannot direct the courts to use them, but they must have a full range of non-custodial options available to them; options which are not "soft", but which are practical and effective, and seen to be so. For example, we have had striking success in the expansion of probation and community service orders. The Criminal Justice Act 1982 strengthened the courts' powers to attach specific requirements to the probation order and there has been a significant revival in its use. Community service has grown rapidly from over 13,000 orders in 1979 to nearly 34,000 in 1984. Community service has now been extended throughout England and Wales and is available for all offenders aged 16 or over.
We intend to build on that success and my hon. Friend the Under-Secretary of State may develop that point. The recently published White Paper includes a proposal to strengthen supervision orders on juveniles involving intermediate treatment programmes by backing them with custodial sanctions for breach if they were used as an alternative to custody. We plan also to expand the

43
attendance centre network. We are seeking to reverse the decline in the use of the fine, and we are taking steps to improve the administration of the criminal justice system, which will help, I hope, to keep people out of custody on remand. As the hon. Member for Knowsley, North knows, we are trying to cut delay in the courts and to improve the flow of court business. I hope that the introduction of statutory limits on the time that it takes to bring court proceedings will be a big step forward.
By these and other means—I have mentioned some of the points which the hon. Member for Knowsley, North has advocated—the Government are seeking to take the public and the courts with us in ensuring that those who need to go to prison do so, and that a range of effective alternatives are available for those who do not.
I should like to discuss the question of total resources, not just the resources for the building programme. Since coming to office the Government have substantially and consistently increased spending on the prison service. Between the financial years 1979–80 and 1985–86, expenditure on the prison service rose by 25 per cent. in real terms. Within that total, planned expenditure on the building programme and on redevelopment of the prison estate rose by 173 per cent. in real terms, whereas, under Labour, expenditure on the prison estate went down by 20 per cent. Nor has the additional expenditure on buildings been at the expense of expenditure on staff. Between the financial years 1979–80 and 1985–86 the number of prison officers rose by some 18 per cent.—it now stands at a record level of almost 19,000—while the cost of employing them rose by some 43 per cent. in real terms.
These figures compare, as we established at Question Time last week, with an increase over the same period in the prison population of about 12 per cent.—that is, a rise of 18 per cent. for prison officers, and a 12 per cent. rise in prison population. That is a striking improvement in the ratio between staff and prisoners and it shows the emptiness of the charge that we have been starving the prisons of staff.
Looking to the future, the Government have expressed their commitment in the public expenditure White Paper to give priority continuously to the prison service. The financial provision for 1986–87 at £639 million, represents an increase of about £48 million—that is 8 per cent.—over planned expenditure for 1985–86 and the figures continue upwards for succeeding years.
I am sorry to weary the House with figures. I have gone through some of them quickly to illustrate the scale of the investment that we are making in the prison service, as part of the law and order budget, in both buildings and staff. We have turned round the previous neglect of our penal system and have provided a firm base on which the prison service can build for the future. These increased resources carry with them the responsibility to ensure that the resources are used in such a way as to achieve the best value for the taxpayer's money. We are not satisfied—we cannot be—that this is being achieved at present, particularly in the use of prison staff.
In what I have to say about this I want to make it clear that I am not in any way attacking prison officers or governors. Their job of running prisons can often be difficult and sometimes dangerous. It is a job that is often too little understood by the public at large. Nevertheless, those who follow prison matters closely—that is
44
everyone in the Chamber—knows that the working practices and arrangements in our prisons are far from satisfactory. The pattern of rapidly rising expenditure on prisons which I have described has not been matched to anything like the degree that it should be by improvement in the regimes for inmates. Among the reasons for this are undoubtedly inefficiencies in working practices within prisons.
Mr. Stephen Ross: rose——
Mr. Hurd: No, I have already given way twice and I need to make progress.
Let us consider for example, overtime. The cost of overtime working by prison officers has risen dramatically in recent years. In 1979–80 the cost of overtime was £34·3 million, and in 1985–86 the cash limit for overtime stood at £81·6 million—an increase of 137 per cent. in cash terms. Overtime has now reached the point where it constitutes on average 30 per cent. of prison officers' earnings, and, because overtime is voluntary, some officers are working in excess of 20 to 30 hours overtime per week. That is not good for them or for management. It is not a situation that we can prolong indefinitely.
Efforts to contain and control levels of overtime working are not new. In April 1976, when overtime was averaging 12 hours a week per prison officer, a system was introduced which allocated a budget of hours to each establishment. That system, introduced by the then Labour Government, failed in the face of opposition from the Prison Officers Association. Last year, to exert better control over overtime spending, responsibility for the overtime budget was devolved to the four regional offices of the prison service. This year we are both continuing those arrangements and extending them to cover all pay and pay-related costs of prison staff. This change does not mean that overtime expenditure is being cut. In fact, the cash limit for overtime in the current year—at £87·4 million—represents an increase of about 5 million on last year's limit. The notion that we have been seeking some sort of confrontation by cutting the total of overtime without consultation cannot survive a look at the figures. We need to reassert proper control over spending in our prisons, particularly on overtime, and this lies at the root of the dispute between the Prison Officers Association and the Prison Department.
The Government have never claimed that overtime is unnecessary in the prison service. Conditioned hours are inadequate to cover all tasks, not least because existing shift systems depend on overtime to provide staff cover, particularly at weekends. It is the present levels of overtime that we have to question. Existing systems of attendance and complementing prevent us from using staff in the best way. The shift systems are too rigid, resulting in too many staff attending at some times and too few at others.
It was for this reason that, following extensive discussion with the national executive committee of the Prison Officers Association, we commissioned last year, and announced, a study by a joint team of prison service personnel and outside management consultants to see whether better systems of complementing and attendance for prison officers could be found. The report of that study has just been received. I have not yet had an opportunity to consider it in detail with colleagues. I shall obviously do this urgently, and when I have worked out proposals

45
I intend, given a successful resolution of the present dispute, that they should be the subject of discussion with the Prison Officers Association, as well as with other interested parties. The report justifies the stance of the Government over the inefficiency of existing systems and confirms that an opportunity exists, if new practices can be adopted, for improving dramatically the lot of both inmates and staff. It suggests that there may be a waste of resources, amounting to 15 or 20 per cent. We shall publish the report with our comment on it.
I understand how hard it is to change, and changing working practices is always a difficult process for those involved, particularly when, as in this case, there is such a close relationship between those practices and take-home pay. Like my predecessor, I have made it clear that we are ready to discuss with the Prison Officers Association new systems and procedures, including new pay arrangements, which will continue to provide a fair level of take-home pay, while allowing both prison officers and management to escape from the shackles of dependence on overtime. This is not being done simply out of a desire to get the accounting right, to satisfy the Public Accounts Committee, or to enforce the cash limit. The point goes wider than that.
We are spending, as I have illustrated, record sums on the prisons and employing a record number of staff, but only if that money and those staff are used sensibly will the lot of both prisoners and staff be improved.
Against the background of the record levels of expenditure on the staff and buildings of the prison service which I have described, I think that many hon. Members have found, and perhaps still will find, the current dispute between the Prison Officers Associaton and the Prison Department difficult to understand. The association says that it is concerned about the maintenance of safe manning levels and regimes and seeks the right to determine in negotiation what those manning levels should be. I am as concerned as the POA about the safety of prison officers and their professional standards. I have repeatedly made it clear that management is ready to consult the POA about manning levels. Obviously I cannot concede — no Government could—that the union has a right to determine those levels.
Mr. Robin Corbett: It is not asking for that.
Mr. Hurd: I am coming to that point. In effect that would give the union, not the Government or Parliament, the right to set the budget for the prison service.
In my discussions with them before last Wednesday's events, POA leaders said that they were prepared to accept management's right to manage and that they did not seek to challenge my view that if, at the end of the day, agreement could not be reached on manning levels, management would have to decide them. In the light of those undertakings, and the clear edging towards agreement, it is difficult to understand where lay the POA's continuing problem in accepting my formula for considering these matters. Nevertheless, I welcomed its recognition of management's rights, and in return I set out in my letter of 22 April to the POA's general secretary, Mr. Evans, an agenda for the future. The House will recall that that agenda included a rapid settlement of this year's pay claim, including the outstanding question of a reduction in the working week for prison officers, and the
46
immediate payment of tax compensation on housing allowance for 1985–86, which had been a vexed point. Thirdly, it included bringing forward as fast as possible the work on new shift systems and pay arrangements, which I have already mentioned, for detailed discussion with the POA, with a view to the new arrangements being in place by April next year.
Unfortunately, as the House will also recall, the national executive of the POA felt unable to respond by lifting its industrial action; indeed, even as I spoke with it on Monday last, that action continued in a particularly unacceptable and dangerous form at Gloucester. For my part, I was not, nor am I now, prepared to talk in substance about issues of crucial importance to the future of the prison service under the continuing threat of further industrial action. The national executive of the POA then introduced its overtime ban, with tragic consequences on Wednesday night, about which we all know.
We are still assessing the events of last Wednesday and their consequences, but it is clear that the situation deteriorated rapidly after midday last Wednesday and the issue of the POA's instructions to its members to withdraw co-operation with management and to institute an overtime ban. I reported twice to the House last week on the major disturbances that took place at Lewes, Wymott, Bristol, and Northeye prisons and at Erlestoke youth custody centre. There were lesser incidents at some 12 other prison establishments. Further disruption took place in a number of establishments on Thursday and Friday, but on nothing like the scale of Wednesday night. The number and severity of incidents decreased and by the weekend all was quiet.
By a miracle, no one was seriously injured during the disturbances of last week. Of the 50 or so inmates who made bids to escape, 13 are still unlawfully at large. The worst effects were undoubtedly on the prison estate. Prison buildings were damaged in a large number of establishments. Although most of the damage was fairly minor, there was serious damage at Bristol, Erlestoke, Wymott and Gloucester, and at Northeye the prison has temporarily had to be vacated. In all about 800 prison places were put out of action. I cannot yet give the House an assessment of the total cost of putting things right, but it will certainly run into some millions of pounds.
Since Friday prison staff and contractors have been working as quickly as possible, and by the end of this week all buildings, apart from those at Northeye, will be weatherproof. Where necessary, locks have been changed, doors are being replaced—in some places on a temporary basis—and windows repaired, and I hope that at Northeye we shall have some 50 inmates back in the prison within the next two weeks.
As the House knows, I acknowledge these are extremely serious events, and from the outset I have believed that they should be the subject of an inquiry. The form and scope of this must be compatible with any police investigation into alleged offences. I have invited Her Majesty's Chief Inspector of Prisons, Sir James Hennessy, to conduct an inquiry into the recent disturbances and the handling of them in order to see whether any general lessons need to be learnt. Sir James has agreed to do this. I also take the opportunity to repeat the thanks that I expressed last week on behalf of the whole House to the members of the prison governor grades, those prison staff who remained at their posts and the members of the police and fire services who helped to restore the situation.

47
Following the decision of the POA last Thursday to suspend its industrial action and my own procedural proposal made in the House on Thursday, which it accepted, I am glad to say that useful talks took place at the Home Office last Friday. It was agreed that the suspension of industrial action meant the restoration of normal working. This allowed for the return to duty of those officers who had been suspended.
It was also agreed in the discussions last Friday that a series of further meetings would take place on the lines I had outlined, designed to achieve the simultaneous calling off of industrial action and the discussion of the agenda which I had set out for the future. The next meeting in that series will take place tomorrow. I am sure that the whole House will hope for good progress on the basis set out in my statement last Thursday.
To conclude, we are inevitably and rightly moving into a new phase in the history of the prison service. The service faces many problems and difficulties, which we have not sought to disguise, but it has two relatively new assets of which we have to make the best possible use. The first is the willingness of the Government to invest substantial resources in the service. The second is the realisation, to which I hope we have all come or will come shortly, that by changing to more sensible ways of running prisons further resources can be released.
The question in our minds is not whether change should happen, but of what form it should take and how the benefit should be distributed between prison staff, prison regimes—that is, the way in which prisoners are treated—and the taxpayer. We want to achieve the necessary changes by discussion and co-operation. That is the purpose of our present discussions with the POA. An early end to the threat of industrial action will put the process on a sound footing.
I hope that out of the damage and disaster of Wednesday night will come a fresh understanding, fresh energy and fresh good will. I am grateful to right hon. and hon. Members in all parts of the House who take a personal interest in our prisons; I wish there were more of them. In view of the situation which I have described, sombre though it is in many ways, and in view of the two new assets which I have also described, there are opportunities here as well as problems. I hope that we can work together to turn those opportunities to good account.
5.4 pm
Mr. Gerald Kaufman: Six nights ago the Home Secretary came to the House to announce that arson and anarchy had broken out in 18 prisons and other penal establishments. In making that announcement he was admitting the breakdown of the Government's prisons policy, the absence of a Government penal policy, the consequences of the Government's obdurate and incompetent industrial relations policy and the failure of the Government's much-trumpeted law and order policy. For all of those the Home Secretary himself stands responsible to the House of Commons.
It cannot be doubted that the prison system is inadequate to cope with the burdens placed upon it. The most recent report, issued six months ago, of Her Majesty's Chief Inspector of Prisons stated:
"Overcrowding remained a major problem"
48
and
"The position in local prisons was grim."
It also stated that overcrowding
"seemed, at least in the short term, more likely to get worse than better."
On 11 April of this year, there were 46,687 people held in prison in England and Wales in a system normally capable of accommodating 40,832. That was 2,000 more than at the end of 1985. Because of the overcrowding, over 13,000 prisoners are being held two to a cell and over 4,000 three to a cell, most of them with no access to night sanitation. One fifth of the prison population consists of remand prisoners, some 8,000 persons innocent in law and being held for trial. Nearly 1,500 have been held in that way for six months or more.
Of course, the problems of overcrowded prisons have been with us for many years, under Governments of both parties, but it is clear that the overcrowding is getting worse. Last year, the prison population exceeded that forecast in Home Office projections for 1991. Those projections are being revised upwards all the time.
The present dispute has woken the Government up to the difficulties that loom. They have responded by making absurd mis-statements, of which we heard more this afternoon, about the position which they inherited. Last Thursday, the Prime Minister spoke wildly about what she called
"the Labour Government's neglect of prison buildings".
That same day, against the background of the previous night's debris and disturbances, the Home Secretary flailed about him even more nonsensically, talking about
"the time when no money was being spent either on staff or on prisoners."—[Official Report, 1 May 1986; Vol. 96, c. 1097, 1114.]
I should like to know when that was. We all know that the right hon. Gentleman's grasp of fact is tenuous, but that was extraordinary even by his standards.
When Labour left office, building schemes were in progress to provide 4,100 prison places over a four-year period, with three new prisons to be started. I readily acknowledge that Lord Whitelaw boosted that programme considerably. The problem is that, although, because of him and him alone, the Government launched a major prison building programme, they did not accompany that with implementing a policy for prisons, let alone a penal policy.
Lord Whitelaw outlined the contents of a prisons policy in a debate in the House in 1980 when he said:
"First, we shall increase the capacity and efficiency of the prison service through new building, through improvements in organisation, management and industrial relations"—
yes, improvements in industrial relations—
"and through better use of manpower. Secondly,"—
this is a response to the Home Secretary's implication that this was never meant by his Government—
"we shall take measures designed to reduce the size of the prison population." [Official Report, 1 August 1980; Vol. 989, 1900–1.]
That was what a thoughtful Home Secretary said on these matters. Apart from new building, little if any of what Lord Whitelaw spoke about six years ago has come about. Far from being improved, as he wished, industrial relations are as bad as they could be.
Insofar as the Government now have a policy, it is the policy stated in the 1983 Conservative party manifesto, which said that there must be enough prison places to cope with sentences imposed by the courts.
Mr. Jerry Hayes rose——
Mr. Kaufman: At the present rate, even Lord Whitelaw's building programme will not achieve that. Indeed, as the Financial Times pointed out a couple of weeks ago, the monetary cuts entailed by what the Government call their financial management initiative will, unless the Home Secretary learns sense as a result of last week's events, turn the new prisons into "little more than human warehouses". People are being crammed into Britain's prisons in a random and unplanned way.
Mr.Hayes rose——
Mr. Kaufman: I will not give way at the moment. I must move on a little.
The number of remand prisoners between 1973 and 1983 increased from 4.613 to 8,651, and they now spend an average of 47 days in custody awaiting trial, compared with 23 days in 1970. As Her Majesty's Chief Inspector of Prisons points out, facilities and services for them are "generally the poorest". Her Majesty's chief inspector said that a reduction of prisoners in this category
"would do much to relieve the problems facing the prison service".
but the Government have ignored his recommendation.
Far more of those actually tried and found guilty of offences are being sent to prison. Of males, 15 per cent. were sentenced to immediate imprisonment in 1974. By 1984, this proportion had risen to 20 per cent. In 1983, Britain proportionately imprisoned nearly twice as many as West Germany and Italy, and more than twice as many as Holland and France. Fewer than one in five of those in prison here had committed the really serious crimes involving violence, sex and robbery. In fact, in this country we imprison more people for defaulting on fines then we do for these grave offences.
What is more, as a deterrent, prison is a proven failure. The latest figures show that 58 per cent. of male offenders and 39 per cent. of female offenders were reconvicted within two years of release. For young prisoners aged 17 to 20, the figure was 69 per cent. For detention centre trainees aged 14 to 16, it was 72 per cent. for borstal trainees aged 15 to 16, it was a terrifying 80 per cent. Over 50 per cent. of all prisoners and over 70 per cent. of all young offenders have been imprisoned before. Far from deterring offenders from further crimes, custody is often preparing them to commit further crimes. To put it another way. prison is not working.
The May committee set up by my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), which reported to the present Government, said categorically:
every effort should be made to reduce the inmate populations"
It suggested a re-examination of sentencing policy. Her Majesty's Chief Inspector of Prisons, in his latest report calls for
"action to reduce, first, the time people spend in custody awaiting trial and, second, the average length of sentence for non-violent offenders"
The report goes on to say:
"it seems likely that these measures would make little difference to the deterrent value of sentences generally".
It is fair to say that the more sensible members of this Government, in their more sensible moments, have echoed his view. Lord Whitelaw, drawing on the experience of the previous prison dispute when he was Home Secretary, said:
"One of the things the dispute demonstrated was that it is possible for us to survive with a much lower custodial population than before."
50
The present Home Secretary, before the rush of blood to his head last month, said much the same kind of thing. The problem is that they have to contend with their more atavistic colleagues, such as the Chancellor of the Duchy of Lancaster, who last month chose the church pulpit as his platform to say:
"I believe that sentencing has gone too far in the direction of leniency to deter crime."
The result is that there is no lead from the Government. Courts go on cramming the prisons with inmates and those who have to carry the burden of those overcrowded prisons are the prison officers.
The Home Secretary—he did it again this afternoon—offering the only set of statistics that he knows, with the Prime Minister echoing him, implied that it is all all right because, under their Government, the number of inmates has increased by 12 per cent. while the number of officers has increased by 18 per cent. But that glib juxtaposition ignores the fact that the prison officers carry a much greater burden because so many more thousands of the inmates are on remand, and remand prisoners require extra time and attention.
Her Majesty's Chief Inspector of Prisons explains it very well in his latest report, when he says:
"All these problems were exacerbated by the drain on resources caused by court escort commitments"
Her Majesty's chief inspector goes on to state bleakly:
"Failure to take action will make it increasingly difficult to resist demands for more and ever costlier prison places with the inevitable concomitant of more staff".
It is the cost of the staff, however, that is the real problem, for the Prime Minister slipped up when trying out another statistic last Thursday. At Question Time she claimed that this Government
"have increased spending on the prison service by 85 per cent. in real terms".—[Official Report.1 May 1986; Vol. 96, c. 1097.]
But she got it completely wrong. The fact is that this increase is not in real terms, it is in cash terms. The increase in real terms, as the Home Secretary admitted this afternoon, is much less than half what the Prime Minister claimed it to be. And, of course, the true figure is at the heart of the crisis that led to last Wednesday's disturbances.
The Prime Minister and the Home Secretary can bandy about all the rigged statistics they like, but they still cannot explain why the prison officers voted by 81 per cent. last month to take industrial action, a massive majority in a group of public servants whom, in any other circumstances, the Prime Minister would be the first to applaud to the skies.
Mr. Stephen Ross: Will the right hon. Gentleman agree that the prison officers that he knows, and certainly those in my constituency, are absolutely incensed by the articles in The Sun last Friday, which painted a totally wrong picture of prison officers and their wives?
Mr. Kaufman: Unfortunately, I do not read The Sun so I cannot share the ugly experience which the hon. Gentleman's correspondents have undergone. What I can say is that I have received in the post since this controversy began a considerable number of letters from prison officers which show the facts, some of which I shall try to give to the House. about the problems that they face in doing their work.
Of course, the prison officers know very well that the new type of budgetary regime for their service means that

51
the Government seek to claim every possible credit for the prison building programme while, at the same time, cutting the prison officers' overall earnings in order to help pay for that programme. That is why the Prime Minister and the Home Secretary have launched their discreditable smear campaign against the prison officers, accusing them of swindling the taxpayers through corrupt practices, in order artificially to boost their overtime.
Mr. Hurd: Neither in what I have said today nor in what I have said previously on the matter have I used the word "corrupt" or the word "swindle". I do not believe that either word is in the least relevant to the point that I am making, which is that the prison service is handicapped and hamstrung by a whole lot of practices which prevent us from making proper use of the staff employed.
Mr. Kaufman: I will come to that, but it is a fact that the right hon. Gentleman and the Prime Minister have taken every possible opportunity to talk about the high earnings of prison officers and that the press have been carefully and consistently briefed about the Spanish practices which, it is alleged, are rife among prison officers. If the Home Secretary is saying that he no longer believes that, if he repudiates those unpleasant stories about prison officers, that will help a great deal to clear the air.
But I shall say this much. It may be that a minority of prison officers do exploit the opportunities for overtime, but the fact is that the prison system would break down instantly if sufficient prison officers did not work overtime. That was incontrovertibly proved last Wednesday.
Mr. Corbett: My right hon. Friend talked about Spanish customs. Has he heard allegations that a governor of one prison is involved in the running of his wife's antique business and that a governor of another prison was absent from the prison during a visit by Her Majesty's chief inspector because he was putting a roof on somebody's house for payment?
Mr. Kaufman: I had not heard of that either and I would be unwilling to think anything but the best of prison governors, but if my hon. Friend provides evidence, we shall have to accept it.
The reliance of the prisons on overtime working by prison staffs would have been demonstrated with incalculable consequences for public order if the prison officers had continued their overtime ban over the May bank holiday weekend. That is not because the officers have distorted the system to squeeze overtime out of it, although it is true that on a maximum basic rate of £135·34 a week after 15 years' service a prison officer taking home only basic pay could have difficulty in making ends meet.
The predicament was stated less hysterically and more accurately than by the Prime Minister and the Home Secretary in the annual report of Her Majesty's Chief Inspector of Prisons. He said:
"All the establishments we inspected in 1984 were short of their authorised complement of staff. This in part explains the high levels of overtime that were still being worked…and since overtime is now voluntary, governors are, to this extent at least, dependent on the goodwill of their staff for the functioning of the establishment."
It was the Home Secretary's orders to governors which led to the trampling on that good will and which in its turn
52
nurtured the ill-feeling that led to last week's disturbances. The Home Secretary and the Prime Minister have, in connection with this dispute, been mouthing the slogan that management must have the right to manage. But Her Majesty's chief inspector's chapter on prison staff, which I recommend hon. Members to read, makes it clear that it is management that has been misusing the power to manage. That there is too much overtime among prison officers is indisputable, but the Home Secretary's steps to deal with the problem have made the situation worse.
The signatories of the May report said flatly:
"We consider that it is in the long run undesirable for efficient working to be dependent on the excessive amounts of overtime."
But its solution was certainly not the Government's solution—to stretch the prison officers on the bed of Procrustes and hack away. The report said:
"Ultimate manpower levels should be such that overtime is substantially reduced and, ideally, removed altogether."
It warned:
"We fully recognise the sensitivity of staff to some of the possible effects (for example on their earnings) of changes in these areas. Management should therefore display real tact and understanding as well as determination in dealing with them."
That was the May report, whose recommendations the Prime Minister claimed the Government had fulfilled in full.
The management certainly showed determination, but their version of tact and understanding would have brought discredit on a flat-footed elephant. The Government failed to recognise the sensitivity to which the May report referred. They showed little or no understanding of the strain on prison officers of their difficult and dangerous job.
That strain was described best in a letter to the Home Secretary, a copy of which was sent to me on the other day. It was written by Mrs. P. A. Kelly of Market Harborough, the widow of a prison officer. She said:
"Dear Mr. Hurd, Ref: Prison officers. Two weeks ago my husband died, he was 51 years old. A heart attack and various other medical terms all leading from the heart attack was the cause. He was a conscientious prison officer for 30 years. Only three more years and we could look forward to doing all the things couples plan to do when they retire—but not any more. I blame the long hours and the tension—a life of 80 per cent. prison, and 20 per cent. home life. When I hear on the media the rates of pay, the rates of overtime, I think of the husband I loved and have lost—I think of other officers who have died—what price your pay and your overtime. For once in my Tory life I agree with the Labour M.P. Gerald Kaufman"——
[Interruption.]——
"who said, 'Avoid turning our jails into tinderboxes'. Think of the men who run our prisons every day—they are the ones that know—for Gods sake—PLEASE LISTEN."
That is a letter from the widow of a prison officer. It was men among whom there existed that kind of experience—[Interruption.] I am interested in the way that Conservative Members deride and jeer at that—and background who, three weeks ago, came to the end of their tether and voted 81 per cent. for industrial action, not over pay but over those very manning levels about which Her Majesty's chief inspector and the May committee had warned. In voting under their own rules as well as the Government's legislation, they were, if they will forgive me for saying so, behaving like perfect Thatcherites, because it was the Prime Minister who two years ago on 12 April—about another dispute, of course—said:
"it is important to have a ballot as quickly as possible, especially when that facility is in the union's constitution."—[Official Report, 12 April 1984: Vol. 58, c. 523.]

53
The prison officers held their ballot and it was in their constitution. They did what the Prime Minister said they should do. Seventy-eight per cent. of their total voted, and they voted 81 per cent. for action. The only problem with the Government is that they were in favour of a ballot but against the members acting on what they had voted for. Yet instead of seeking to reach a sensible solution, the Home Secretary issued an ultimatum to the prison officers. He called on them to abandon their industrial action and insisted that, unless they did so, there would be no more talks. This self-proclaimed arbiter of the rule of law ignored—although he claims that he knew about it—a crucial obstacle. The Prison Officers Association was and is required by a High Court ruling to ballot its members before it can abandon this industrial action. It needs a package to put before its members in such a ballot. What the Home Secretary demanded was not a settlement but a surrender.
The Home Secretary sent a letter to all staff and governors saying that no further talks could take place
"against a background of industrial action."
Lord Glenarthur, the junior Minister in charge of prisons, voiced that intransigence with damning precision when he proclaimed:
"All the Home Secretary asked was that the Prison Officers Association call off industrial action so that these discussions could go ahead. They have refused to do this, offering only to instruct their members to take no further action while talks are going on …we cannot talk under threat."
The Home Secretary, exactly a week ago from the Dispatch Box, said:
"The Government cannot conduct talks under the continuing threat of further industrial action in this vital public service…I am sure that discussions can only fruitfully take place if the POA calls off industrial action."—[Official Report, 29 April 1986; Vol. 96, c. 797–9.]
Two days before that, I had called on the Home Secretary to take action to end the dispute. I had warned that the prisons were
"a potential tinderbox, waiting for the spark that could set them alight."
A week ago, with the situation more critical than ever, I used similar words, this time in the House. I said:
"I warn the Home Secretary that with his intransigent bungling in this exceptionally delicate area he is recklessly playing with fire."
The Home Secretary's only response was a weary sigh of aloof disdain, yet the very next day the fires broke out.
When the fires broke out, they were soon almost out of control. One prison was almost completely destroyed. Prisoners escaped, and the Home Secretary announced this afternoon that some of them are still at large. The Home Office could not cope, yet last week, when I asked the Home Secretary about the contingency plans prepared for this eventuality many months ago by the Association of Chief Police Officers, he said sniffily:
"Of course there are contingency plans."—[Official Report,29 April 1986; Vol. 96, c. 798–9.]
Three weeks ago, when the Prison Officers Association ballot result was announced, the right hon. Gentleman said—reassuringly, so it seemed, but complacently in the light of later events—
"The Government are prepared and will respond vigorously as necessary. In doing so, we shall have the safety of the public and the security of prisons as our first concerns."—[Official Report,17 April 1986; Vol. 95, c. 1009.]
Yet he was not prepared. The prisons burned. Some prisoners rioted; others escaped. Public safety was not secure.
54
In the light of his firm promises and failure to honour them, the Home Secretary should carefully consider whether he should remain in office.
The question of the Home Secretary's fitness to continue arises most sharply in his handling of the dispute. The evidence lies in the right hon. Gentleman's statements. Last Thursday, the afternoon after the night before, the Home Secretary said:
"Although some of the violent action by prisoners may have been imitative, there is little doubt that the occasion for it was the overtime ban instituted by the national executive committee of the Prison Officers Association as part of its dispute about manning levels with the Prison Department."
The Home Secretary was sure that the overtime ban was to blame for the riots—but who was to blame for the overtime ban?
Throughout the dispute, the Prison Officers Association declared that it was ready to suspend industrial action in exchange for talks. Throughout, the Home Secretary rejected that offer and demanded the complete abandonment of industrial action before he would talk, even though he now admits that he knew that abandonment was not possible for the POA, since he acknowledges that the POA must ballot to abandon its industrial action and that such a ballot takes 12 days. The POA asked for an end to selective dismissal of its members as a sign of good will on the part of the Home Office. The Home Office flatly refused, and as recently as last Thursday, after the riots, all that the Home Secretary could bleakly say was that the suspended staff
"can lift their own suspension by agreeing to work normally."
That empty offer meant that the staff had to sign a declaration promising to work normally.
Mr. Hurd indicated dissent.
Mr. Kaufman: That is what the Prison Officers Association tells me. If the right hon. Gentleman contradicts it, all that I can say is that, up to a couple of hours ago, it was certainly the belief of the POA.
The POA promised to instruct its members to take no further action while talks were continuing and it asked for an end to suspension of its members. The Home Secretary said no to both. As recently as last Thursday, he was insisting
"We cannot start substantive negotiations until the threat of industrial action has been removed."—[Official Report, 1 May 1986; Vol. 96, c. 1110–1.]
Since then, the POA, as it had always offered to do, suspended industrial action, but it did not, as it could not—even though the Home Secretary had demanded it—remove the threat of industrial action without the prolonged process of a ballot. It could have complied with the Home Secretary's demands only by breaking its rules and defying the High Court. I cannot believe that that is what the Home Secretary wanted, but that was his demand.
Last Friday, the Home Secretary reinstated the 100 prison officers who had been suspended—an action for which the POA had asked and which he had previously refused. He agreed to table fresh proposals on manning levels—an action which he had previously refused to contemplate while industrial action was still in prospect. Tomorrow, he—either he personally or his officials—will get round his ultimatum by holding talks which the Home Office declined to call negotiations.

55
That they will be negotiations is made clear by a statement from Mr. Colin Steel, the chairman of the POA. After Friday's talks, he said:
"We have got to go back to the members. One would hope that by the time we get to that position, it will be a formality. We hope we will have a package that will be suitable."
Mr. Hurd: I remind the right hon. Gentleman that the procedural talks now continuing are taking place exactly on the basis of the suggestion I made in the House on Thursday afternoon. I dealt with suspension and with how discussions would be resumed. I am glad that, despite the right hon. Gentleman's efforts at obfuscation, those procedural suggestions were accepted and what has happened since then to improve the position has happened on that basis.
Mr. Kaufman: Last Thursday afternoon, the Home Secretary said—he can check his words—that the suspended prison officers could unsuspend themselves. What has happened is that he has formally removed suspension from them, which is very different. The Home Secretary said repeatedly in the House and elsewhere that he would not enter into talks with the Prison Officers Association on substantive matters until it abandoned—not suspended—it industrial action. It has not abandoned that industrial action. It cannot do so without a ballot. It has done what it always said it would do—suspended its industrial action. Nevertheless, substantive talks are taking place and will take place tomorrow, despite the Home Secretary's statement that talks could not take place without the action being abandoned.
The fact that the action has not been abandoned is confirmed by what Mr. Steel said:
"We have got to go back to the members. One would hope that by the time we get to that position, it will be a formality. We hope we will have a package that will be suitable."
Such a package is impossible to achieve without genuine negotiations, whatever the Home Secretary chooses to call them to save his face. As the Daily Telegraph generously put it, discussing the suspensions and negotiations:
"There appears to have been a compromise on both these points."
The Home Secretary has rightly climbed down. But why did there have to be riots before he could see sense? If he had only behaved in this way last Tuesday instead of last Friday, there would have been no overtime ban and, on the Secretary of State's analysis, there would have been no riots. The riots were the consequences of the Home Secretary's intransigent bungling. He has drawn back from the edge of the abyss, but that we ever reached the edge of the abyss is his doing. I very much hope that tomorrow's talks will result in a sensible end to the dispute, but after those talks the Home Secretary would do well to consider not only what he has done but what he should do.
The reason for the overcrowding of our prisons and for the grim scenes that we witnessed last week can be found in the record crime wave from which the country is suffering under this Government. The pressure of the crime wave on overstretched police forces has meant that the crime clear-up rate has fallen to only 35 per cent. Even so, the increase in crime and criminals means extra pressure on the prison service, especially since there have
56
been disturbing increases in the worst crimes, involving violence, sex and robbery. The prisons are buckling under the weight of the crime wave.
In a stern leading article, the Financial Times was clear about where the responsibility lies. It stated:
"There could be few more pointed indictments of a Tory administration that came to office seven years ago determined to do something about law and order. Not only has crime continued to rise; the prisons are overflowing and now even the prison officers are rebelling against their terms of service."
Those ugly and financially expensive prison riots will have served one constructive purpose, if, from now on, we are spared the Government's sloganising on law and order.
No Government have ever come to office with more lavish and extavagant promises about upholding law and order; no Government have ever presided over such a disturbing decline in law and order. From dangerous streets to dangerous prisons, that is the grim legacy that this failed Government will leave to their successors.
5.40 pm
Sir Edward Gardner: No Government have ever come into office and not only promised. but fulfilled. a prison-building programme that is without comparison this century. No Government have ever come into office with a Home Secretary who has shown, as my right hon. Friend has shown, such sensitivity and understanding and an ability to deal with the appalling problems now being presented in our prisons.
There are two hard nuts which my right hon. Friend must crack. The difficulties that he faces are formidable, and no one could envy him his task. The first difficulty is the current dispute between management and the Prison Officers Association. I can at least agree with the right hon. Member for Manchester, Gorton (Mr. Kaufman) in hoping that tomorrow will see the conclusion of the dispute.
The central issue has been the question of who has the right to manage—[HON. MEMBERS: "No."] I shall express it in more neutral terms if Opposition Members would find that more acceptable. One of the main issues has been the question of who should have the right to manage. The other issue that attends upon that is whether we can afford the inefficiencies currently to be found in the prison service.
My right hon. Friend referred to a management consultant's report. I have not seen the report, and I doubt whether other hon. Members have seen it. However, over the weekend it was reported that £60 million a year, out of a total and record budget of £639 million, is being wasted through inefficiency. Clearly we cannot afford to allow such a loss to continue. We hope to find a way of dealing with each of the sources of loss, whether it be bad management, restrictive practices or overlapping shifts. Whatever the cause, we must deal with it.
I hope that some good will come out of what happened last week. I hope that the discussions between the Government and the POA will range wider than these narrow but important issues. I, like many other hon. Members, have spoken to prison officers over the years, and they have consistently told us of their dissatisfaction with the unappreciative attitude of the public and the Government of the day towards their duties. There is no doubt that prison officers do a most unattractive and difficult job, looking after some of the most dangerous criminals in conditions that are a positive invitation to violence.

57
I do not want to make a party political point in putting forward a suggestion which I hope will be considered by both the Government and the POA. It is my personal view that it would be of benefit to the POA, the Government, the prison service and the country as a whole if, during the forthcoming talks, consideration was given to the possibility of a no-strike agreement. Such an agreement would, I believe, enhance and increase the status of prison officers. It could be arranged on terms beneficial to them.
I realise that time is short and will deal briefly with the second problem that my right hon. Friend faces, which is overcrowding in our prisons. Unhappily, there is no prospect of that problem being solved merely by the solving of the current dispute. Overcrowding in our prisons is gross and creates intolerable conditions. The sad fact is that, because of what happened last Wednesday night, more than 800 invaluable prison places have been destroyed. We must therefore consider what remedies are available to deal with overcrowding.
The first and obvious remedy is one which the Government have pursued with great vigour, and backed with a great deal of capital—the building of new prisons and the modernisation of old prisons. However, that is not sufficient to deal with the problem. There is no doubt that thousands of people in prison today should not be there. I want to discuss one specific group only, which is prisoners on remand awaiting trial, and of whom there are about 7,000 at present. If we could remove them from our prisons, that would go a long way towards solving the overcrowding. However, I accept that that might be too ambitious. Perhaps we could aim to halve their number.
The Select Committee on Home Affairs has recommended a way to achieve such a reduction, and I congratulate my right hon. Friend on adopting it. It is that an immediate experiment be carried out in our courts along the lines of the system in Scottish law, where people awaiting trial are detained in prison for a statutory period only. In Scotland the period is 110 days, but it may have to be either longer or shorter in England and Wales for administrative reasons. The sooner we can reach a conclusion on adopting that proposal, the better.
When we consider the problem of our prisons and the overcrowding, the questions which must be uppermost in our minds are what is the purpose of our prisons? What is the value of our prisons? Why do we put people in them? We used to answer confidently that we punish by imprisonment and deter others from committing the same type of crime. We could say that we reformed people in prison. We cannot say that any longer. What possible hope have we of reforming prisoners considering the present conditions in which they are kept? It is unrealistic.
The real purpose and value of our prisons is to protect the public from criminals who have committed crimes involving violence and who are therefore a danger to society. That is the paramount aim of imprisonment. The Select Committee on Home Affairs is about to start a major inquiry into our prisons. We shall take into account the valuable papers which have been produced by the all party penal affairs committee. We intend to go to America to study, though not necessarily to follow, the way in which the penal system operates there. I hope that when the committee has finished its report—I hope by Christmas—we shall be able to present to my right hon. Friend the Home Secretary recommendations which may be valuable to him and of value to the prison service.
5.51 pm
Mr. Merlyn Rees: I commend the hon. and learned Member for Fylde (Sir E. Gardner) on his approach. In my latter months as Home Secretary, in the run-up to the general election, we should have had such sensible discussions, but in those days it was all about law and order and locking people up.
As my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said, this debate arises out of what happened last week. Nobody could have been amused or got any political pleasure out of what was seen on television last week. The increasing crime rate is no respecter of general elections, of political rhetoric, of over-simplification, such as short, sharp shocks—I wonder what happened to that—or of oversimplification in the press. The press, at its very best, is good, but most of it is not the slightest bit interested in discussions on the matter. It prefers simplification.
I especially regret yesterday'sSunday Express leader, which castigated prison officers as third rate. I wish whoever wrote that had been in a prison. I wish that person had visited the wives of prison officers in Northern Ireland, prison officers who risk their lives. Last night, we saw on television that those who work in the prisons in Northern Ireland are being affected in their homes — presumably by those who are normally in favour of law and order. Over-simplification gets us nowhere.
The problems of the prisons go back a long time, and they are no respectors of general election dates. The problems will exist after the next general election. The argument is about what will be done.
One of the problems is the size of the prison population. I commend community service, which was started in the days of the Heath Government and has been expanded. I commend intermediate treatment and the changes in parole, although marginal, made by the previous Home Secretary. I commend the work done by voluntary workers. The work carried out by the hon. Member for Cheltenham (Mr. Irving) in this respect is commendable. I shall not touch on the question of remand, which is a major issue. The only way to proceed is radically to cut the size of the prison population.
In Northern Ireland, because there was no public disagreement, we were able to introduce 50 per cent. remission. There is no parole in Northern Ireland. We decided to end detention because we had no prison accommodation. The Army built the H blocks and we had to get people into them and other prison accommodation.
There had to be a radical cut in the size of the prison population. That was easier to implement in Northern Ireland than elsewhere. The judges in Northern Ireland know what is going on. There is no establishment—with a small "e" — to say, "Oh, no, this will upset people." Therefore, the Labour Government introduced the 50 per cent. remission system. Prisoners had to have a record of good behaviour, or else they were not brought into the scheme. Those who offended again went before a judge, and, if the judge so willed, they had to serve the unexpired part of their sentence.
Why did I not do that here? The rest of the United Kingdom is a different place. My hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) put it to me firmly that it would look daft. Others also put it firmly that, in the run-up to the general election, we would he crucified on law and order. The Conservatives had said that law and

59
order would be the policy of a Conservative Government. It was made clear to me that the judiciary would not support what I was doing. If I had introduced the scheme, the tariff would have gone up to match the 50 per cent.
Something of that nature must be done. I recomend to hon. Members the findings of the May report. I am sure that the Home Secretary and the Minister have read it. I set up the committee in December 1978 and it reported to Lord Whitelaw. I do not have the time to run through the recommendations, but they deal with the imprisonment of the mentally disordered, suggest that prison should be avoided for fine and maintenance defaulters and drinkers, and deal with persistent petty offenders. My wife is chairman of a bench and we discuss what should happen to persistent petty offenders. It is no good saying that they should be left alone. In most cases, after the first time they have been put inside, prison is a waste of time. They are filling prison space and it costs money. Because of time, I will not consider the May report further, but it tends to be ignored as time goes on.
The problems in the prisons have already been mentioned. I have a book entitled "The Prison Crisis" by Peter Evans of The Times with a foreword by Sir Robert Mark. That book, which was written in 1980, was sparked off by the May committee report.
The problems in the prisons are not new, but they are worse. As Home Secretary, I was careful not to stand up in the House of Commons and say that the situation could not explode in my face. It may well have done.
The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): The right hon. Gentleman is discussing the problems in the prisons. Why was the annual capital building programme for prisons 20 per cent. less in real terms when he left office than when he took office?
Mr. Rees: The hon. Gentleman should have listened to my right hon. Friend the Member for Gorton. It was not cut in my time. I went to the Treasury and told the Chief Secretary to the Treasury and the civil servants that they could run the prison service themselves. It would be a good idea if the Treasury tried to run the prisons. The junior Minister is wrong, and my right hon. Friend the Member for Gorton showed him to be wrong. He should not be so clever——
Mr.Mellor rose——
Mr. Rees: No; I shall not give way again.
When the May committee reported, I commended Lord Whitelaw for approving a 20 per cent. pay increase for prison officers in 1979 and a further 20 per cent. later. I commend the new prisons, as long as they are intended to replace old ones and are not used to deal with those who commit the list of offences that I have just mentioned.
What has happened to May's recommendations concerning the role of prison officers? The report said that the desire expressed by prison officers to extend their role and to undertake a wider range of duties should be encouraged. I am a member of the Butler Trust, which was set up in memory of "Rab" Butler. Only a few months ago, the work done by people in the prison service was recognised.
The role of prison officers has changed, but if we treat prison officers as turnkeys they will act like turnkeys. One
60
of the problems of prison officers is to increase and professionalise their role. As for recruitment and training, is it still true that training is neither as effective nor as comprehensive as it should be and that, at all levels, it is not given sufficient priority?
There were complicated recommendations concerning pay and allowances, which only those involved in the Prison Department or the prison service understand. What has happened to them? The dependence on overtime has increased.
The May report says that prison officers should have access to the central arbitration tribunal. Has that been done? Is it a possibility now? What has happened?
I was glad to hear the hon. and learned Member for Fylde say that the Select Committee on Home Affairs is to examine prisons and their organisation. I am all in favour of examining prison reform, but not enough thought has been given, outside the Prison Department, which is a very good Department, to running prisons. That was the purpose of the May report. We drew up the committee's terms of reference with that in mind. I hope that its report will again be discussed publicly.
I wish the Home Secretary and the Prison Officers Association well in their meeting next Wednesday. That ought to be the beginning. There will be prison crises as long as prison officers, prison governors, the Prison Department and whoever is Home Secretary have to pretend that we can keep the cork in the bottle. They will not be able to do that. Perhaps we shall have a sensible discussion of the matter in the next general election campaign. But that may be too much to hope for.
6.3 pm
Mr. Charles Irving: It amazes me that there is any surprise that the events of the past week or so have happened. Those of us who have been closely associated with the prison service, the after-care service and other off-shoots have been aware for years that this was brewing. There is nothing new about it—we had prison disruptions in 1974 and 1979.
I am sure that my right hon. friend the Home Secretary has realised that there can be no delay, and that action must be taken to correct critical problems. The cost of the damage done in the disruptions would have contributed substantially to enabling prison officers to carry out their work.
The events of the past week have shown how dangerously close our prison system is to collapse. The dispute takes place against a background of a record number of people—48,000—in prison, gross overcrowding of cells and restrictions on work education and association. In that respect, our prisons are an international as well as a national scandal. No other civilised country has such an appalling record.
The Government have chosen to try to end overcrowding by a large prison building programme involving 16 new prisons at a cost of £350 million. So far, however, new prison places have provided no real relief for overcrowded local prisons and the disgraceful circumstances in remand centres. As fast as new prisons have opened, the courts have filled them with more prisoners.
I remember making a speech on this very subject in 1979, when I urged the then Home Secretary to ensure that one old prison shut as one new prisons opened. Precisely what many of us feared has come about. Even before the

61
dispute, the Home Secretary acknowledged that last year's especially sharp rise in the prison population had jeopardised the Government's hopes of eliminating overcrowding when the current building programme was complete. During the difficulties of the past week, more than 800 places have been lost, as my hon. and learned Friend the Member for Fylde (Sir E. Gardner) said.
Everybody agrees that serious and violent offenders must be imprisoned to protect the public, but we should bear in mind the fact that eight out of 10 of those who we imprison are non-violent offenders. Although some might have committed serious non-violent offences, many have committed relatively minor offences and could perfectly well be dealt with by the many non-custodial measures which are becoming available and which could be substantially increased if the funding was made available.
With an overall reconviction rate of about 60 per cent.—it is even higher for young offenders—our over-use of prisons makes no sense from a penological point of view. All of this is at a cost of more than £256 a week to keep an offender in prison. It makes sense neither from a humanitarian point of view nor from an economic one.
It is ironic that the Home Office is castigating prison officers for wasting relatively limited amounts on unnecessary overtime and ignoring the much larger amounts of taxpayers' money that is being spent on providing new prisons to accommodate ever more prisoners who have been given unnecessary custodial sentences. Last week the parliamentary all-party penal affairs group published a report entitled "The Rising Prison Population", which contains a ten-point programme of proposals to reduce the use of prison. We are sick to death of producing reports, we are tired of hearing learned papers being discussed, while nothing is done. This is how strongly we are beginning to feel. Many of the proposals in the report, which I am sure the Home Secretary will find an opportunity to read, would go a long way to reduce the likelihood that last week's harrowing events will ever be repeated.
This unhappy dispute centres partly on the right to set manning levels within individual prisons. Nobody disputes the right of management to manage, but when the exercise of that right brings anarchy, destruction and danger to life and property, the nature of the management's decision must and should be questioned.
Let us think generally of the situation with regard to pay. Prison officers' pay—let us face it and be honest about it—is far too low for the difficult, isolated and dangerous work that they do. They are not, as we used to term them, warders; they are professional prison officers. The earnings of prison officers are made up to a reasonable level only by overtime—excessive, in my view—that they would prefer not to do if they received a decent rate of pay.
To refresh our memories, officers start at £5,300—hardly a king's ransom—and rise after 15 years to £7,000 or just over. However, for decades Home Office and prison authorities fostered this excessive overtime as a means of keeping the prison system running and keeping staff numbers under control. Given the gross overcrowding of our current prison system and the grave warnings of impending disaster made clear by prison inspectors, governors and independent bodies, it seems a most inopportune time to go into a sudden reversal on the issue of overtime.
62
It would be a gross injustice to prison officers and prisoners alike if the effects of this management decision were drastically to reduce prison officers' earnings. Indeed, it would cause a great deal more trouble. As any competent manager knows, every change or reorganisation requires a substantial investment. The prison system is no different.
To bring our prison system back from the brink of anarchy and to establish it as a reasonably humane system, we need action, and swift action, on the following fronts: a substantial increase in prison officers' basic pay, elimination of restrictive practices, less concentration on the purely security role of prison officers—they are no longer simply turnkeys—safe manning levels and a large reduction in the population of non-violent offenders.
I am grateful to have had this chance to make a short contribution to this important debate. I know that many other hon. Members wish to speak. It is unfortunate to have this short debate on a matter of such importance. I hope that the House and the public at large will give overwhelming support to some of the points that have been raised on both sides of the House.
6.14 pm
Mr. Robert Maclennan: I agree with almost every word uttered by the hon. Member for Cheltenham (Mr. Irving). I hope that the Home Secretary was listening and that the Under-Secretary of State for the Home Department in replying to the debate will answer the points that were made, because in the opening speech there was singularly little recognition of the long-term problem that confronts the prisons in this country today. We heard of the occasion of the dispute, and very little of the causes of the dispute.
The Home Secretary has sometimes paid lip service to the pressures under which the prison service is operating. In a speech to the prison governors on 5 November last he said:
"You have kept the system going while it was being stretched to the outer limits of its capacity in physical and human terms".
The right hon. Gentleman shows little recognition today—or, indeed showed in his utterances last week when he sought to explain his position—of the strain in human terms faced by prison officers.
Having said that, I want to look mostly at the longer-term issues, which I believe the Government have not addressed. Indeed, the Home Secretary again today ducked the whole question of the frequency and duration of custodial sentences. In dealing with this issue, he said that he felt it was not appropriate—I paraphrase for brevity—to interfere with the role of the judiciary and sought, I believe, to misrepresent the position of those who feel that we in this country are badly out of line on sentencing policy and, as a result, have far too many people in prison for too long.
Let us look at the results. The right hon. Gentleman spoke of the neglect of the prison buildings in the previous decade. The fact is that the prison population in the early 1970s was rising at a much slower rate than it is now. In the 1970s, the prison population was rising annually at the rate of 0·8 per cent. Since his Government took office, it has been rising by 1·4 per cent. per annum. His own Department's projections are that this trend will continue, and in the next decade it is anticipated that the prison population will rise by 2·7 per cent. per annum.

63
The consequences are appalling not only for prison officers but for prison inmates, many of whom in this country must be regarded as subject to conditions that are degrading and inhuman within the terms of article 3 of the European convention on human rights. Three particular categories at least are suffering unacceptably. The first category is those on remand. In England the Home Secretary has shown himself, I believe, to be dilatory in dealing with this problem. The experimentation has been going on for too long. Action is needed to get these people before the courts. It may be that the Lord Chancellor's Department is partially responsible for the deployment of our judicial resources, and it falls to him particularly to deal with the Crown courts. The need to take a lesson from the Scottish system is imperative.
There is also the question of fine defaulters. It is absurd and ineffective to imprison so many fine defaulters as are being imprisoned today. There is the question of imprisonment for petty offences, of which the hon. Member for Cheltenham (Mr. Irving) and the right hon. Member for Morley and Leeds, South (Mr. Rees) spoke. I think that the time has come for Parliament to grasp the nettle, to recognise that we must legislate out of existence the custodial response to certain offences; to remove that option.
In practice, some Departments have decriminalised certain offences—notably the Inland Revenue, which tends to pursue its claims in the civil courts rather than to prosecute. It has at least as good a rate of recovery by so doing than by prosecuting.
Responsibility does not lie only with Parliament and the Government. It must be recognised that something is going seriously wrong in our courts. In 1980, the Court of Appeal expressed its view forcefully and clearly when it stated:
"It is no secret that our prisons at the moment are dangerously overcrowded, so much so that sentencing courts must be particularly careful to examine each case to ensure that if a minimum custodial sentence is necessary, sentences are as short as possible and consistent only with the duties to protect the interests of the public and to punish and deter the criminal. Many offenders can be dealt with equally justly and effectively by a sentence of six months' or nine months' imprisonment as by one of eighteen months or three years. What the court can and should do is ask itself whether there is any compelling reason why a short sentence should not be passed."
Notwithstanding the guidance from the Court of Appeal, the Home Office has reported that the recent increase in the prison population has been
"mainly due to a larger number of offenders being dealt with by the Crown court and a large proportion of them being given a custodial sentence. There is also some evidence towards the end of 1984 of an increase in the length of custodial sentences being imposed by the Crown court for some types of offences, which may be a contributory factor."
The Home Secretary took the opportunity today to remind the House of the need for custodial sentences in cases of violence and those of drug trafficking; no one in the House would dissent from that. However, the right hon. Gentleman has not taken the opportunity to talk about the decriminalisation, which has been recommended by Justice, the British branch of the International Commission of Jurists, of many of the 7,000 offences that are called criminal. He has not taken the opportunity to recognise that Parliament and Government set the framework within
64
which judges have to pass sentences and that the judiciary has to take the lead from those who are elected to set the sentencing framework.
The Home Secretary is looking puzzled. either because he is hoping that I shall say something that interferes with what he calls the discretion of the judiciary or because he is not prepared to respond to these matters. The right hon. Gentleman would do well to realise that the problems which exploded last week will recur if he does not tackle the underlying difficulties. He may shuffle off his responsibilities to a successor but the problems will not be dealt with merely by the prison building programme. That programme is necessary to replace existing antiquated and unacceptable prisons, apart from meeting the growing prison population. What the right hon. Gentleman should be examining, and what he said nothing about, are the alternatives to custodial treatment.
Mr. Hurd rose——
Mr. Maclennan: No, I shall not give way.
Mr. Hurd: It is clear that the hon. Gentleman did not listen to my speech.
Mr. Maclennan: I listened to it with great care and I made careful notes.
I am extremely disappointed that the right hon. Gentleman did not touch on the shortage of day care centres. He did not touch upon the possibilities of expanding intermediate treatment. He did not touch on bail verification schemes and other desirable replacements for custodial treatment. He did not deal with these matters with the seriousness that they deserve. He and the Home Office have shown less than sufficient enthusiasm for the options to custody for too long: the consequence is the appalling breakdown of law and order in the prisons, which was brought home to us last week.
It is right that manning levels must be determined by the prison service, by the prison management. That means that decisions cannot be taken by anyone else. However, if prison officers are to be regarded as part of a professional body—that must be the objective—it is only right that they should be closely involved in consultation. It is right that their status should be enhanced, that their basic pay should be increased and that the appalling industrial relations example which the Home Secretary gave last week, should not be repeated.
I hope that the talks that will take place tomorrow will be fruitful and that, as a result of recent bitter experience, there will be a more professional attitude among the wilder elements of the prisoner officers. I hope that the proper aspirations of the members of the Prison Officers Association will be met and that they will continue to provide a service under less trying conditions than they have had to endure for some time.
6.26 pm
Mr. Robert Kilroy-Silk: The events of last week caused a great deal of hardship and anxiety to prisoners, who saw a deterioration in the already poor prison regime; to those who were refused access to prisons and had to endure the appalling conditions of police and court cells; to those prisoners who were intimidated, threatened or beaten by other prisoners because of the prison officers' lack of or abdication of control over the prisons; to prisoners' relatives, who were refused visits; and to local residents, who were concerned

65
about the reports of riots and breakouts and were naturally apprehensive about their own safety. In those circumstances, the decision of the Prison Officers Association to suspend industrial action is to be commended, whatever the rights and wrongs of the issue.
The Home Secretary said again this afternoon that the trigger that set off the industrial action was the prison officers' claim to be able to negotiate safe manning levels and the right hon. Gentleman's insistence that while he would consult he reserved the right for management to manage and to determine appropriate staffing levels. That attitude is proper and acceptable, and with good will, sensitivity and patience on both sides the dispute could have been resolved. The response of David Evans, the general secretary of the POA, to the Home Secretary's letter of 27 April seemed to suggest that agreement on that issue had been arrived at, or at least was near. Local action seemed to undermine that.
That is not the real issue, however, and it is not the issue that we are debating. The real issue, as the Home Secretary has made clear, and as the Prime Minister reiterated in her letter to the prison governors, is the Government's determination to eradicate what they see as excessive overtime and waste in the prison service.
No one, including the POA, prison officers, the prison service and the Labour movement, will do anyone any favours by pretending that there are not abuses of the overtime system and that there are not restrictive practices which should be eliminated. There are several abuses of working practices and the overtime system, and these relate to escort duties, the shift system, weekend workings at overtime rates and the insistence of prison officers that they escort prisoners to education classes and workshops. There are abuses, and they need to be dealt with effectively, but that is not to say that they can be dealt with by the method adopted by the Home Secretary.
The present practices have existed and have been tolerated by successive Governments, and the present Government have tolerated them for the past seven years. Weak management has allowed prison officers to veto several proposals for penal reform, whether it be the abolition of censorship or the installation of pay telephones in category C prisons. Weak management and ineffective Home Office control have not only tolerated, but have encouraged many of the practices that the Home Secretary now wishes to eradicate.
Such practices cannot be eradicated by suddenly holding a pistol to the POA's head. Those practices must be removed over a long period of time through patient negotiation. They must be part of a package that is concerned with improving the pay, working conditions and esteem of prison officers, as well as with increasing their numbers. They must also be attached to a package that includes a substantial reduction in the prison population.
It would be remiss of us to talk about the dispute or the issues surrounding it without placing it within that context. That is the context in which the dispute has arisen. The Home Secretary affects that the problem is new. His naive, simplistic approach that all those who propose solutions to the excessive increase in the prison population wish merely to inhibit the discretion enjoyed by the judiciary is a deliberate misreading of the situation.
Today, the prison population is at a record level. There are 47,000 prisoners in certified normal accommodation for 40,000. More than one third of our prisoners are
66
required to live two or three to a cell that was built for one in Victorian times. They are locked up for 23 hours out of every 24, and are denied proper access to work, education and recreation facilities and, moreover, are denied access to decent sanitation. They live in conditions that make a mockery of the prison service's stated aim to help prisoners to lead a good and useful life. Their conditions deny any notion of minimal standards of human decency and contravene minimum internationally agreed standards for the treatment of prisoners. The dispute, and the tensions and difficulties encountered by prison officers, must be seen in that context.
The problem is not new. The Home Secretary came to the House today, with all his good intent, after seven long years of a Conservative Government who have been warned time and again, by hon. Members on both sides of the House, and by organisations both inside and outside the House, about the spiralling increase in the prison population and the dangers that that poses for standards and for the safety of prisoners and staff. Those dangers were outlined in the expenditure report, published in 1978. They were reiterated in the May committee's report in 1979. They were also repeated in the report of the Home Affairs Committee in 1981 and in the report of our parliamentary penal affairs group which was published in 1980, entitled, "Too Many Prisoners".
Those reports and many others have drawn the attention of successive Home Secretaries to the need for a substantial and permanent reduction in the prison population and for action to be taken quickly if we are to avoid a crisis in our prisons that could endanger the life, health, safety and welfare of prisoners and staff. Successive Conservative Home Secretaries have ignored those warnings and failed to take the sort of measures that have been reiterated today, and which would lead to a reduction in the prison population.
The Home Secretary said that the dispute provided him with an opportunity. So it does, and let us hope that he will take it, not just to ensure that there are decent working conditions for prison officers, to insist that they work in accordance with proper procedures, or to increase their numbers or pay, but to provide a more positive and constructive prison regime. We need a regime that makes some attempt at rehabilitation or reform, but that can be achieved only if the Home Secretary takes immediate and effective action to reduce the prison population.
There is no time to go through the numerous ways in which the prison population could be reduced. The hon. Member for Cheltenham (Mr. Irving) has played an important role in all of our debates, and in seeking penal reform. He mentioned the 10-point programme which was published last week by the penal affairs group. Ten clear, well-argued, well-articulated and well-researched proposals were set out which would lead to a substantial reduction in the prison population. The Home Secretary could activate one of them today. He could activate section 32 of the Criminal Justice Act 1982, which the parliamentary group wrote into the legislation. It would enable him to release short-term, non-violent offenders in the last six months of their sentences, and would thus immediately release about 5,000 prisoners without endangering the public.
That would give the Home Secretary that necessary and essential breathing space in which to renegotiate the terms and conditions of prison officers and to embark upon the creation of that more positive and constructive prison

67
regime. Whichever option the Home Secretary goes for, prison officers, prisons and all those who care about such matters will not forgive him if he does not take with both hands the opportunity to reform our penal system so that we can have safe, decent and civilised conditions for both staff and prisoners.
6.35 pm
Mrs. Elaine Kellett-Bowman: I apologise for not being in the Chamber throughout the debate, but I had an unavoidable appointment to keep.
I rise to pay tribute to the prison staff in my constituency, which has a very unusual prison. It is in the old castle, and physical conditions could hardly be worse. Despite that, over the years every effort has been made to bring a civilised attitude to bear on the running of that gaol. The governor and the prison officers have an excellent relationship, and I have had the good fortune to be a prison visitor there for some years. In a report published only a few months ago Her Majesty's Chief Inspector of Prisons revealed that morale in our prison is exceptionally high.
It is important that people should realise that some prisons are exceptionally well run. Indeed, tribute should be paid to them. Nevertheless, prison officers feel that they have been ill-served over the question of overtime. It is crucial that they should be given higher basic salaries, so that perhaps we could remove some of the overtime. We must alleviate that sense of grievance if happy prisons, like that in Lancaster, are to remain well run.
6.37 pm
Mr. Clive Soley: This all too short debate takes place in the context of the total and abject failure of the Government's law and order policy. That failure is matched only by their failure to create employment. They are the two most disastrous areas of this Government's policies.
I agree with the POA which, in "A Service in Crisis", says:
"the conditions of work for prison officers and the role they are asked to carry out on behalf of society is fettered not only by the physical conditions, but by the total absence of a cohesive strategy on penal affairs."
If my opening comments are wrong, they are wrong only in as much as the Government do not have a policy to collapse. That is the problem for them. As my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) pointed out, the Government were given a positive opportunity with the May report. That report gave the Government an opportunity that no previous Government had. But again they either ducked it or missed it, depending on whether they knew that it existed. Since then, we have had a statement from Her Majesty's Chief Inspector of Prisons, in which he says:
"Our overriding concern during 1984 was, perhaps, that regime opportunities continued to diminish and that overcrowding—a fundamental cause of this and many other evils—seemed, at least in the short term, more likely to get worse than better."
Of course, the crisis exploded last week.
Incidentally, certain hon. Members on both sides of the House belong to the all-party group, which has done very good work on this issue. But the inspector had the following to say about night sanitary arrangements:
68
"The problem is exacerbated by overcrowding, which results in most of these inmates having to use their pots in the presence of one or two other inmates in the confines of a small cell. When the time for slopping out comes the prisoners queue up with their pots for the few toilets on the landing. The stench of urine and excrement pervades the prison. So awful is this procedure that many prisoners become constipated—others prefer to use their pants, hurling them and their contents out of the window when morning comes."
It is important to use the report of Her Majesty's Chief Inspector of Prisons to drive that point home. Some people do not realise the seriousness of the crisis.
The British penal system is one of the worst penal systems in the Western world. The hon. and learned Member for Fylde (Sir E. Gardner) intends to visit the United States. I warn him that the United States copied its penal system from Britain. Britain and the United States imposed their system on West Germany, after Germany's defeat in 1945. The three worst penal systems in the Western world are those of West Germany, the United States and the United Kingdom. I would advise the hon. and learned Gentleman to go to Holland and Sweden, where he would see what can be done with a sensible prison policy. Holland has similar crime and inner-city problems to Britain.
Ms. Jo Richardson: The right hon. Gentleman has just been there.
Mr. Soley: My hon. Friend has just said that the hon. and learned Member for Fylde has been there.
The Home Secretary said that he does not want to tell the courts what to do. He said that it was only Labour Members who wanted to tell the courts what to do. He had better send a note to the House of Lords and tell Lord Whitelaw that he must have crossed the Floor of the House, because Lord Whitelaw does not appear to know that he crossed the Floor of the House. Lord Whitelaw "threatened"—I use the word of Government Members—the courts that if they did not do something about long sentences, he would. On 1 August 1980, he said:
"I believe that a strong consensus is developing that shorter prison sentences are both appropriate and desirable. We now know that a longer sentence is most unlikely to aid a prisoner's rehabilitation in any sense, while the initial impact of imprisonment is quite sufficient to make a lasting impression in the minds of most offenders."
The then Home Secretary went on to talk about the importance of recognising the right of the courts to pass the sentences that they desired. My hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) intervened and asked how long it would be before the Home Secretary—who is now Lord Whitelaw—would intervene. In response, Lord Whitelaw said:
"I shall not be trapped into saying how long I shall give the judiciary…I want to see how this develops."—[Official Report, 1 August 1980; Vol. 989, c. 1907–8.]
If that is not a clear and definite sign that he would intervene if the courts did not respond, the Government had better ask Lord Whitelaw what he did mean. The House is responsible for deciding the length of sentences. The Home Secretary sent out an advice notice to 26,000 judges, recorders, magistrates and clerks of the court telling them to impose fewer sentences at the same time—as my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) pointed out—as the chairman of the Tory party and the Prime Minister were saying, "Give longer sentences." The Government had better decide whose side they are on. They do not seem to know what they want.

69
Has the Home Secretary ever spoken to the chairman of the Tory party about his statements on law and order? If people such as the chairman of the Tory party and the Prime Minister keep saying, "Give longer sentences," would anybody be surprised if the courts ignored the advice from the Home Secretary, simply because the Government were speaking with two voices? If the Government want to reduce the length of prison sentences, they can. The House of Commons recently considered the Public Order Bill which sought to impose a prison sentence for disobeying a police officer's instructions on the roads along which a person could go to attend a demonstration. It is nonsense to get ourselves into such a state. No civilised country would dream of doing anything so stupid. As I said in Committee, and as the hon. Member for Pudsey (Mr. Shaw) accepted, the Bill sought to impose a life sentence on a person taking part in a riot. That is way above anything that any other country has done. As I understand it. the Government are awaiting the outcome of a particular case before they decide to proceed with that measure. The Government must put their house in order.
What do the Government intend to do about Executive release? The provision of Executive release was introduced by the Government to reduce overcrowding in the prisons in a crisis. The present Home Secretary and the previous Home Secretary told us that we have a crisis in our prisons, but they have not used the Executive release provision. Perhaps the Minister will address himself to what the Government intend to use Executive release for and when they intend to use it. If last week's event was not a crisis which justified the use of Executive release, what is?
All I can suggest—the Prison Officers Association knows this—is that it is designed to be used in the context of industrial action. It will be used to try to break the POA, in the same way as the Government tried to break the teachers, the miners and everyone else with whom they disagree. As my right hon. Friend the Member for Gorton indicated, the Government passed legislation insisting on a ballot. That was followed fully by the POA. Therefore, to turn round and accuse the POA of bucking the system is unacceptable.
The House should be reminded of what happened last Wednesday. The complement of staff on duty was that required by the manning instructions of the Government. Overtime was stopped. If the ordinary system had been suitable, it would have worked, but it did not. The Government's failure on the POA claim is that they tried to force the POA to drop all hint of industrial action, despite the ballot. The Government's climb-down—which is welcome—is a recognition that they should have accepted the offer of the POA to withdraw industrial action while negotiations took place.
I conclude with perhaps the most important point of all. Overtime is not desirable as a way of operating our prisons. When I said that the Government had thrown away an opportunity regarding the May report, I meant it. The May report stated that there was a desperate need to restructure prison officersn salaries, working conditions, and so on. The Government, especially the previous Home Secretary, should have created a proper, professional status for the job of prison officer. Prison officers do not want to be just turnkeys. The vast majority of prison officers do not want to rely on overtime. They are prepared to negotiate and discuss a proper, professional salary for the job.
70
If that happened, we could introduce a proper training scheme for prison officers. A prison officer gets 12 weeks basic training, of which the first three are spent working in a prison. An officer is on probation for a year. We must remember that prison officers deal with men and women who, at best, have many emotional and social problems, and, at worst, are sophisticated offenders. In the Northern Ireland conflict people have gone on hunger strikes to the point of killing themselves.
This crisis has given the Government another opportunity. If they duck or miss it again, as they did with the May committee, that will be a criminal mistake for which we shall hold the Government accountable.
6.47 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): I cannot say that I agreed with a great deal of what the right hon. Member for Manchester, Gorton (Mr. Kaufman) said, despite the fine eloquence of his contribution, because he seemed to sacrifice real depth for surface glitter—more like Richard Strauss than Bruckner. The right hon. Gentleman's speech was Brucknerian only in its length.
I agreed with the suggestion of the right hon. Member for Gorton that the problems have been present for many years, under Governments of both parties. I am glad that the right hon. Member for Morley and Leeds, South (Mr. Rees) recognised that. In 1979 the prison population, which numbered 42,500, represented 111 per cent. of certified normal accommodation. Today, at just under 47,000, it represents 113·5 per cent. of certified normal accommodation.
There has been a problem of overcrowding for a long time. It is wrong to suggest that the crisis in the prisons is of recent provenance, due to the over-use of imprisonment by the courts. My hon. and learned Friend the Member for Fylde (Sir E. Gardner) has often put his finger on the real point, which is that the growth in the prison population has been predominantly a growth in remand prisoners. In June 1979 the figure was 6,100, and in March 1986 it was 9,500. That has to do with the confidence that the courts have in the intentions of certain people appearing before them to turn up for trial when called and not to commit further offences when on bail—matters that are, rightly, decisions for courts and not Governments.
Governments can help, as we have sought to do, in a number of material ways; for example, by experimenting with time limits, which bring cases on more quickly and cut out unwarranted delays, especially for those on remand in custody, and by increasing the number of bail hostels and expenditure on the probation service. Since the Conservative party took office that expenditure has increased by 35 per cent. in real terms. The increase in the number of sentenced prisoners has been relatively modest, from 35,700 in the system in June 1979, to 37,100 at the end of March 1986 —an increase of 1,400, which is very much at the margin.
Contrary to the assertion of the hon. Member for Caithness and Sutherland (Mr. Maclennan), the average prison population increased more in the 1970s than it did in the 1980s. It is no good the hon. Gentleman shaking his head. I am giving him the facts. If I am wrong, no doubt he will correct me, but I suspect that he will not need to do so. The average prison population increased between

71
1974 and 1979 14 per cent., and between 1979 and 1985 by 9·5 per cent. Much of the hon. Gentleman's case was a house built on sand.
Between 1979 and 1984 there was a significant increase in the number of sentenced prisoners, which reflected an increase in the number of indictable offences cleared up—250,000 last year with an increase of about 50 per cent. in the business of the Crown court. It is an admission not of failure but of success if more criminals are caught and sentenced. If it is appropriate that they should go to prison, it is a Government's duty to provide prison places so that the courts may so sentence. That is the public's view. In so far as it is not the Labour party's view, it shows that, despite all its efforts to regain the ground on the law and order issue which it has lost over the years, it is still very much at variance with the outlook of the ordinary man on the street.
In 1984, 74,000 people were sentenced to prison, compared with 60,000 in 1979. That was certainly an increase, but, in view of the proper calls for non-custodial sentences, in which we believe when such sentences are appropriate, that is worth setting in its proper context. Taking one non-custodial sentence alone, between 1979 and 1984 the number of sentences to community service passed by the courts increased from 13,000 to 34.000—an increase of 21,000, or 50 per cent. more than the increase in the number of people sent to prison. I should have thought that that showed the Government's success in devising penalties in which the courts had confidence and in providing the resources through the probation service and the probation ancilliaries to implement those sentences.
The Opposition's attacks were well wide of the mark on a number of counts. I was interested to hear the hon. Member for Hammersmith (Mr. Soley) commend the penal system in the Netherlands as one that we should follow. I wonder whether that could be sustained by a visit to Amsterdam to see the law and order position there, or by the observation, which is often made, that in the Netherlands if there is no room in prison for a person sentenced to prison, he goes home and waits for the call to come. Is that the criminal justice system that the Opposition advise?
I cannot help but think that the Opposition's commendation of the completely outmoded approach on which even the Netherlands authorities are turning their backs is, once again, a sign of how out of touch they are. The comparisons made with other European countries fall down on the one country which is perhaps comparable to the United Kingdom—West Germany. The special pleading that somehow the West Germans inherited our penal system does not seem to be anywhere near the mark.
Much of the Opposition's attack was based on the assertion that it is this Government and this Home Secretary who have created a crisis in the prisons. However, in 1979 the Conservative party inherited a rundown prison estate because the last Government, although they knew the problems, failed to do anything about them. Because there has been some dispute about the figures, and because, for the bulk of the debate, the former Home Secretary—the right hon. Member for Morley and Leeds, South—challenged one of my figures, I shall cite the figures so that we can end the argument once and for all. On staff costs, between
72
1974–75 and 1978–79 there was an increase in cash terms from £75 million to £158 million. Because that was the notorious period during which the hon. Member for Caithness and Sutherland was Under-Secretary of State for Prices and Consumer Protection, such as the impact of inflation that an increase of——
Mr. A. J. Beith: So what?
Mr. Mellor: I shall tell the hon. Gentleman. There was an increase of 111 per cent. in cash terms. which amounted to an increase of only 9 per cent. in real terms at the end of that period. However, between 1979–80 and 1985–86, under this Government, there was an increase in cash terms from £194 million to £386 million, which is an increase of 99 per cent. in cash terms and 43 per cent. in real terms. That is a fivefold increase in real terms compared with the so-called achievements of the Labour Government.
Mr. Kaufman: Will the hon. Gentleman give way?
Mr. Mellor: Let me finish the indictment and then the right hon. Gentleman can plead to it.
I come now to the points on new buildings, because the right hon. Member for Morley and Leeds. South commented on that. During the lifetime of the Labour Government there was a decrease of 20 per cent. in real terms in capital expenditure on prison building. The right hon. Gentleman's defence of that period appeared to be confined to his tenure of office, when he denied that there were any cuts. I shall, therefore, cite the figures. Capital expenditure in 1974–75 was £20 million; in 1975–76, £29 million; and—we come to the point where the right hon. Member for Morley and Leeds, South came on the scene—in 1976–77——
Mr. Merlyn Rees: When was that?
Mr. Mellor: In September. In 1976–77, expenditure was £25 million.
Mr. Rees: That was not me.
Mr. Mellor: We are coming to the bit that implicates the right hon. Gentleman. In 1977–78 it was £25 million, and in 1978–79—the right hon. Gentleman cannot say that he was not there——
Mr. Rees: I was there.
Mr. Mellor:—it was £23 million.
Mr. Kaufman rose——
Mr. Mellor: Wait a minute. I am dealing with the master and I shall come later to the apprentice.
The grandiloquent account by the right hon. Member for Morley and Leeds, South of his battles with the Treasury does not match the reality that there was a decrease—I shall give way to him if my figures are wrong—in capital spending, leaving us with a disgraceful prison estate to pick up. During the Labour Government only £122 million was spent on the prisons. We have spent £322 million.
Mr. Kaufman: Now that the hon. Gentleman is dealing with cash terms and real terms, will he repudiate the Prime Minister's false statement last Thursday that
"We have increased spending on the prison service by 85 per cent. in real terms."—[Official Report, 1 May 1986; Vol. 96, c. 1097.]
when the Government have done nothing of the kind, and when the Home Secretary has admitted this afternoon that

73
the expenditure was less than one third of the amount cited by the Prime Minister? Will the hon. Gentleman now be brave and courageous enough to say that last Thursday the Prime Minister misinformed and misled the House?
Mr. Mellor: I am not accountable for what my right hon. Friend says about that. I am giving the House the figures. If, by a slip of the tongue, my right hon. friend the Prime Minister gave the wrong figure, that cannot possibly be the excuse for the fact that, under the Labour Government, there was a decrease just at the time when there should have been an increase, in the prison building programme, while under this Government there has been an increase of 173 per cent. in the amount spent this year compared with 1979–80. For the Labour party to think that a slip of the tongue made during Question Time is an answer to a charge of neglect of the prison estate during the five years in which the Labour party were in government is a sign of the shallowness of its approach to a deeply serious and difficult issue.
Our prison building programme has brought on stream nearly 3,000 new places in the past three years, with the promise of more than 11,000 places to come. That enables us to deal seriously with the real problems of providing a prison system that is appropriate for the present situation. All that increased expenditure needs to be based on a proper and efficient system in the prisons so that those who work in the prisons do so according to modern and not outdated industrial relations practices. That is what the Government are tackling.
Question put, That this House do now adjourn:—
The House divided: Ayes 160, Noes 260.

Divison No. 169]

[7.00 pm

AYES

Alton, David

Dalyell, Tam

Anderson, Donald

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

Ashdown, Paddy

Dixon, Donald

Ashley, Rt Hon Jack

Dobson, Frank

Atkinson, N. (Tottenham)

Dormand, Jack

Banks, Tony (Newham NW)

Douglas, Dick

Barnett, Guy

Dubs, Alfred

Barron, Kevin

Duffy, A. E. P.

Beckett, Mrs Margaret

Dunwoody, Hon Mrs G.

Beith, A. J.

Eadie, Alex

Benn, Rt Hon Tony

Eastham, Ken

Bermingham, Gerald

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

Bidwell, Sydney

Faulds, Andrew

Blair, Anthony

Field, Frank (Birkenhead)

Bray, Dr Jeremy

Fisher, Mark

Brown, Gordon (D'f'mline E)

Foot, Rt Hon Michael

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

Foster, Derek

Buchan, Norman

Foulkes, George

Callaghan, Rt Hon J.

Fraser, J. (Norwood)

Callaghan, Jim (Heyw'd & M)

Freeson, Rt Hon Reginald

Campbell, Ian

Freud, Clement

Campbell-Savours, Dale

George, Bruce

Carter-Jones, Lewis

Gilbert, Rt Hon Dr John

Clark, Dr David (S Shields)

Golding, John

Clarke, Thomas

Gould, Bryan

Clay, Robert

Gourlay, Harry

Clelland, David Gordon

Hamilton, James (M'well N)

Cocks, Rt Hon M. (Bristol S)

Hamilton, W. W. (Fife Central)

Conlan, Bernard

Hancock, Michael

Cook, Frank (Stockton North)

Hardy, Peter

Cook, Robin F. (Livingston)

Harrison, Rt Hon Walter

Corbett, Robin

Hart, Rt Hon Dame Judith

Corbyn, Jeremy

Hattersley, Rt Hon Roy

Cox, Thomas (Tooting)

Heffer, Eric S.

Craigen, J. M.

Hogg, N. (C'nauld & Kilsyth)

Crowther, Stan

Holland, Stuart (Vauxhall)

Cunliffe, Lawrence

Home Robertson, John

Cunningham, Dr John

Hoyle, Douglas

74

Hughes, Robert (Aberdeen N)

Radice, Giles

Hughes, Roy (Newport East)

Randall, Stuart

Janner, Hon Greville

Raynsford, Nick

John, Brynmor

Redmond, Martin

Jones, Barry (Alyn & Deeside)

Rees, Rt Hon M. (Leeds S)

Kaufman, Rt Hon Gerald

Richardson, Ms Jo

Kilroy-Silk, Robert

Roberts, Ernest (Hackney N)

Kinnock, Rt Hon Neil

Robertson, George

Lamond, James

Robinson, G. (Coventry NW)

Leadbitter, Ted

Rogers, Allan

Leighton, Ronald

Rooker, J. W.

Lewis, Ron (Carlisle)

Ross, Ernest (Dundee W)

Lofthouse, Geoffrey

Rowlands, Ted

McCartney, Hugh

Ryman, John

McDonald, Dr Oonagh

Sheerman, Barry

McGuire, Michael

Sheldon, Rt Hon R.

McKay, Allen (Penistone)

Short, Ms Clare (Ladywood)

McKelvey, William

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

Maclennan, Robert

Silkin, Rt Hon J.

McTaggart, Robert

Skinner, Dennis

McWilliam, John

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

Madden, Max

Soley, Clive

Marek, Dr John

Spearing, Nigel

Marshall, David (Shettleston)

Straw, Jack

Martin, Michael

Taylor, Rt Hon John David

Mason, Rt Hon Roy

Thomas, Dr R. (Carmarthen)

Meacher, Michael

Thorne, Stan (Preston)

Mikardo, Ian

Tinn, James

Millan, Rt Hon Bruce

Torney, Tom

Miller, Dr M. S. (E Kilbride)

Wainwright, R.

Mitchell, Austin (G't Grimsby)

Wardell, Gareth (Gower)

Morris, Rt Hon A. (W'shawe)

Wareing, Robert

Morris, Rt Hon J. (Aberavon)

Weetch, Ken

O'Brien, William

White, James

O'Neill, Martin

Wigley, Dafydd

Orme, Rt Hon Stanley

Williams, Rt Hon A.

Park, George

Winnick, David

Parry, Robert

Woodall, Alec

Patchett, Terry

Wrigglesworth, Ian

Pavitt, Laurie

Young, David (Bolton SE)

Pendry, Tom

Penhaligon, David

Tellers for the Ayes:

Pike, Peter

Mr. Sean Hughes and

Powell, Raymond (Ogmore)

Mr. Ron Davies.

Prescott, John

NOES

Aitken, Jonathan

Corrie, John

Alison, Rt Hon Michael

Cranborne, Viscount

Ancram, Michael

Critchley, Julian

Ashby, David

Dickens, Geoffrey

Atkins, Robert (South Ribble)

Dorrell, Stephen

Atkinson, David (B'm'th E)

Douglas-Hamilton, Lord J.

Baker, Nicholas (Dorset N)

Dover, Den

Banks, Robert (Harrogate)

du Cann, Rt Hon Sir Edward

Beaumont-Dark, Anthony

Durant, Tony

Best, Keith

Eyre, Sir Reginald

Biffen, Rt Hon John

Fairbairn, Nicholas

Biggs-Davison, Sir John

Fallon, Michael

Body, Sir Richard

Favell, Anthony

Boscawen, Hon Robert

Fenner, Mrs Peggy

Bottomley, Mrs Virginia

Finsberg, Sir Geoffrey

Brooke, Hon Peter

Forman, Nigel

Buck, Sir Antony

Forsyth, Michael (Stirling)

Burt, Alistair

Fraser, Peter (Angus East)

Butcher, John

Freeman, Roger

Carlisle, Kenneth (Lincoln)

Fry, Peter

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

Gale, Roger

Cash, William

Gardner, Sir Edward (Fylde)

Chalker, Mrs Lynda

Garel-Jones, Tristan

Channon, Rt Hon Paul

Gilmour, Rt Hon Sir Ian

Chapman, Sydney

Glyn, Dr Alan

Chope, Christopher

Goodlad, Alastair

Clark, Sir W. (Croydon S)

Gow, Ian

Clarke, Rt Hon K. (Rushcliffe)

Gower, Sir Raymond

Clegg, Sir Walter

Grant, Sir Anthony

Cockeram, Eric

Gregory, Conal

Colvin, Michael

Griffiths, Sir Eldon

Coombs, Simon

Griffiths, Peter (Portsm'th N)

Cope, John

Grist, Ian

75

Ground, Patrick

Marlow, Antony

Grylls, Michael

Marshall, Michael (Arundel)

Hamilton, Neil (Tatton)

Mather, Carol

Hanley, Jeremy

Maude, Hon Francis

Hannam, John

Mawhinney, Dr Brian

Hargreaves, Kenneth

Maxwell-Hyslop, Robin

Harris, David

Mayhew, Sir Patrick

Harvey, Robert

Mellor, David

Haselhurst, Alan

Merchant, Piers

Havers, Rt Hon Sir Michael

Meyer, Sir Anthony

Hawkins, Sir Paul (N'folk SW)

Mills, Iain (Meriden)

Hayes, J.

Miscampbell, Norman

Hayhoe, Rt Hon Barney

Monro, Sir Hector

Hayward, Robert

Moore, Rt Hon John

Heathcoat-Amory, David

Morris, M. (N'hampton S)

Henderson, Barry

Morrison, Hon C. (Devizes)

Hickmet, Richard

Moynihan, Hon C.

Hicks, Robert

Mudd, David

Higgins, Rt Hon Terence L.

Murphy, Christopher

Hirst, Michael

Needham, Richard

Holland, Sir Philip (Gedling)

Nelson, Anthony

Hordern, Sir Peter

Newton, Tony

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

Nicholls, Patrick

Howell, Rt Hon D. (G'ldford)

Normanton, Tom

Howell, Ralph (Norfolk, N)

Norris, Steven

Hubbard-Miles, Peter

Onslow, Cranley

Hunt, David (Wirral W)

Osborn, Sir John

Hunt, John (Ravensbourne)

Page, Sir John (Harrow W)

Hunter, Andrew

Page, Richard (Herts SW)

Hurd, Rt Hon Douglas

Parkinson, Rt Hon Cecil

Irving, Charles

Patten, Christopher (Bath)

Jackson, Robert

Patten, J. (Oxf W & Abgdn)

Jenkin, Rt Hon Patrick

Pattie, Geoffrey

Jessel, Toby

Pawsey, James

Johnson Smith, Sir Geoffrey

Peacock, Mrs Elizabeth

Jones, Gwilym (Cardiff N)

Portillo, Michael

Jones, Robert (Herts W)

Powell, William (Corby)

Jopling, Rt Hon Michael

Powley, John

Kellett-Bowman, Mrs Elaine

Prentice, Rt Hon Reg

Kershaw, Sir Anthony

Price, Sir David

Key, Robert

Proctor, K. Harvey

King, Roger (B'ham N'field)

Raffan, Keith

Knight, Dame Jill (Edgbaston)

Raison, Rt Hon Timothy

Knox, David

Rathbone, Tim

Lang, Ian

Renton, Tim

Latham, Michael

Rhodes James, Robert

Lawler, Geoffrey

Ridley, Rt Hon Nicholas

Lawrence, Ivan

Ridsdale, Sir Julian

Leigh, Edward (Gainsbor'gh)

Roberts, Wyn (Conwy)

Lennox-Boyd, Hon Mark

Robinson, Mark (N'port W)

Lewis, Sir Kenneth (Stamf'd)

Rost, Peter

Lightbown, David

Rowe, Andrew

Lilley, Peter

Ryder, Richard

Lloyd, Ian (Havant)

Sackville, Hon Thomas

Lloyd, Peter (Fareham)

Sainsbury, Hon Timothy

Lord, Michael

St, John-Stevas, Rt Hon N.

Luce, Rt Hon Richard

Sayeed, Jonathan

Lyell, Nicholas

Shelton, William (Streatham)

McCrindle, Robert

Shepherd, Colin (Hereford)

McCurley, Mrs Anna

Shepherd, Richard (Aldridge)

Macfarlane, Neil

Shersby, Michael

MacGregor, Rt Hon John

Silvester, Fred

MacKay, Andrew (Berkshire)

Sims, Roger

MacKay, John (Argyll & Bute)

Soames, Hon Nicholas

McNair-Wilson, M. (N'bury)

Speed, Keith

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

Speller, Tony

McQuarrie, Albert

Spencer, Derek

Madel, David

Spicer, Jim (Dorset W)

Major, John

Spicer, Michael (S Worcs)

Malins, Humfrey

Squire, Robin

Malone, Gerald

Stanbrook, Ivor

Maples, John

Stanley, Rt Hon John

Marland, Paul

Steen, Anthony

76

Stern, Michael

Waldegrave, Hon William

Stevens, Lewis (Nuneaton)

Walden, George

Stewart, Allan (Eastwood)

Walker, Bill (T'side N)

Stewart, Ian (Hertf'dshire N)

Walker, Rt Hon P. (W'cester)

Stokes, John

Waller, Gary

Stradling Thomas, Sir John

Walters, Dennis

Sumberg, David

Ward, John

Tapsell, Sir Peter

Wardle, C. (Bexhill)

Taylor, John (Solihull)

Warren, Kenneth

Taylor, Teddy (S'end E)

Watts, John

Temple-Morris, Peter

Wells, Bowen (Hertford)

Terlezki, Stefan

Wells, Sir John (Maidstone)

Thomas, Rt Hon Peter

Wheeler, John

Thompson, Donald (Calder V)

Whitney, Raymond

Thompson, Patrick (N'ich N)

Wilkinson, John

Thorne, Neil (Ilford S)

Winterton, Mrs Ann

Thornton, Malcolm

Winterton, Nicholas

Townend, John (Bridlington)

Wolfson, Mark

Townsend, Cyril D, (B'heath)

Wood, Timothy

Trippier, David

Woodcock, Michael

Twinn, Dr Ian

Yeo, Tim

van Straubenzee, Sir W.

Young, Sir George (Acton)

Vaughan, Sir Gerard

Viggers, Peter

Tellers for the Noes:

Waddington, David

Mr. Archie Hamilton and

Wakeham, Rt Hon John

Mr. Michael Neubert.

Question accordingly negatived.
7.12 pm
Mr. Tony Banks: On a point of order, Mr. Speaker. I wonder whether you can advise me and my colleague Members from the London borough of Newham. An election centrepiece going around in the Inner London education authority area, distributed by the Conservative Party, says:
"In Labour-controlled Newham the Council have voted to stop police entering schools to build contacts with young people. This is wrong."
It is not only wrong, but a downright lie. Newham borough council has applied to the courts——
Mr. Speaker: What is the point of order for me?
Mr. Banks: The point of order is this. Newham borough council has applied to the courts and has been granted an injunction against Conservative Central Office distributing that scurrilous piece of propaganda. Conservative Central Office has ignored the injunction. I should like to ask whether it is possible for the Law Officers to come to the House and explain why an injunction granted by the courts is not being enforced by Conservative Central Office——
Mr. Speaker: Order. That is certainly not a matter for me. As the hon. Gentleman well knows, I am responsible for what goes on inside the House. I cannot be held responsible for what goes on outside.
Mr. Banks: I understand, but further to that point of order, this is to save you embarrassment, Mr. Speaker, because Newham borough council has applied to the courts for the committal of the chairman of the Conservative party. Obviously, it would be embarrassing if he was arrested——
Mr. Speaker: Order. That is not a matter for me either.

Orders of the Day
  Finance Bill
    (Clauses Nos. 2, 15, 26 and 80)

      Considered in Committee.
      [MR. HAROLD WALKER in the Chair]
      Ordered,
      That the order in which proceedings in Committee of the Whole House on the Finance Bill are to be taken shall be Clause 26, Clause 15, Clause 2 and Clause 80.—[Mr. Ian Stewart.]

    Clause 26

      RELIEF FOR DONATIONS UNDER PAYROLL DEDUCTION SCHEME
      7.14 pm
      Mr. Tim Yeo: I beg to move amendment No. 6, in page 24, line 26, leave out '£100' and insert '£108'.
      I strongly welcome the clause and its aim of encouraging individual donations by employees. It is one part of a most imaginative package of concessions for charities in the Finance Bill this year. I am sure that it will be welcomed on both sides of the House.
      The purpose of my amendment is both to encourage and to make it simpler for employees who are weekly paid to exploit that valuable concession to the maximum. The present figure of £100 a year amounts to £1·9230769 a week—then my calculator went off the end of the scale. Large numbers of employees might wish to give £1·92 per week and large numbers of employers might welcome making that calculation, but it seems more likely that a figure of £2 would be easier to promote for weekly paid employees. We must remember that the concession in clause 26 will work only if sufficiently large numbers of employers—including, in particular, the people who work in the payroll offices—are happy and find it administratively convenient to operate it.
      I am advised that every few years there is a year in which there are 53 pay days, so a figure of £104 would still not be sufficient to allow employees to pay £2 a week to a charity of their choice. That takes us to £106, but as I am sure my hon. Friend the Economic Secretary will have noticed, the amount in the amendment is £108. That is to take into account the fact that we are very close to allowing monthly paid employees a round figure of £9 a month. That gives us the figure of £108.
      Therefore, I hope that my hon. Friend the Minister will feel able to be sympathetic to the amendment. If it was accepted, much larger sums of money would be channelled into charity through the concession and the voluntary sector would benefit accordingly. In particular, I believe that larger sums would be given by relatively low-paid employees, who are paid by the week.
      Mr. Robert Sheldon: I also welcome clause 26. I noticed the proviso that the Chancellor of the Exchequer set out in his Budget statement, when he said that the VAT concessions that he was making were not an annual event. I suspect that what he had in mind was to produce another focus for charity giving, which is reasonable. The VAT road was producing
      78
      more and more anomalies. I suspect that he was trying to divert attention to more fruitful areas of charity relief. This is a useful one, which one wants to encourage. The idea of tax relief on payroll giving is an imaginative venture, and I look forward to seeing it implemented.
      I am a little concerned about the extension of allowances. There is a danger of following the United States road, whereby one gives so many allowances, and narrows the tax base again and again, which leads to much higher rates of taxation than one would wish. That does not apply in this country. It is possible to make a reasonable exception in the case of charitable relief and I prefer to accept the advantages and virtues of that.
      A new definition of charities will be needed. There has been a big gap in our examination of the various ways in which charities operate. All hon. Members know that charities law is a minefield and an area which has frightened so many legislators. As we move towards granting tax relief, we can no longer delay the need to examine charity law and the anomalies that must be dealt with in due course.
      The provisions for avoidance are necessary. It is especially nasty to have to make provisions for avoidance on charity matters. It would seem that a number of people might confuse the wells of benevolence with the murky waters of greed. It is sad that these anti-avoidance provisions are necessary, but I accept that there is a need for them and I hope that they will meet the real requirements in that area. A number of people have set up bogus charities and the problem is that such activities may be on the increase. It may be sad, but these anti-avoidance provisions are necessary.
      I know that the Chancellor of the Exchequer used to be interested in index-linking the sum and it may be that, over a period, the figure of £100 may prove inadequate. That sum might be related to the individual's pay or to a maximum limit and there are various ways of calculating that figure. However, we are in the initial stages and obviously a round figure is appropriate. We can review the progress of the scheme and the Chancellor of the Exchequer will unavoidably, from now on, have to come to the House with new proposals or amendments to existing proposals which we can examine happily in the years to come.
      Mr. Michael Stern: I congratulate my hon. Friend the Member for Suffolk, South (Mr. Yeo) on moving this extremely sensible amendment. Many hon. Members are aware that in dealing with this new concept of payroll deduction, ordinary employees will be encouraged to consider reordering their affairs and taking a fresh look at regular charitable giving. They will be encouraged to do that by their employers only if the discipline is convenient.
      I believe that the effect of the figure of £100 set out in the clause will be to limit the deduction to £52. Most modern payroll schemes, especially computerised schemes, manage pence with some difficulty. As far as the employee is concerned, round sum of pounds per week. will be much more convenient for him and will meet little resistance from his employer. It is possible that some will go for £1·50 a week, and therefore the effective maximum for those on weekly pay will be £78 per annum. I am sure that my hon. Friend the Minister cannot be responsible for this, but I detect a little sleight of hand somewhere from the back of the Treasury.

      79
      My right hon. Friend the Chancellor of the Exchequer's intention in his Budget speech was to maximise charitable giving to a level that could be recorded in terms of revenue. However, I wonder whether, in making that calculation, someone somewhere did not think that by drafting the clause in its present form they would effectively halve the possible relief.
      I commend the amendment. It will make the charitable deduction scheme more effective and more readily saleable and, subject to the comments of my hon. Friend the Economic Secretary to the Treasury, it could operate at very little, if any, extra cost.
      Mr. William Powell: Like my hon. Friends the Members for Suffolk, South (Mr. Yeo) and for Bristol, North-West (Mr. Stern) and the right hon. Member for Ashton-under-Lyne, (Mr. Sheldon), I welcome the steps taken by my right hon. Friend the Chancellor of the Exchequer in the Budget to make donations to charity much easier than they have been in the past through the fiscal means, embodied in the clause. I also welcome the amendment introduced by my hon. Friend the Member for Suffolk, South. I should like to know why the Treasury has determined that £100 is the correct level at which to set the maximum allowed under the scheme.
      The administrative costs of the scheme will be considerable. No one should underestimate the difficulties which employer and employee will have to face before they can take advantage of the concession made by the £100 limit. I should like to consider some of the hurdles which will have to be crossed by all those responsible for the administration of the scheme.
      First, the employer's professional advisers will have to meet him to explain the scheme in detail. Many small firms without great expertise in their wages departments may have employees who wish to take advantage of the scheme, so it will be necessary to ensure that the employer, who may employ only one, two or three people, understands the way in which the scheme can be administered.
      When the scheme has been explained to him by his professional advisers, the employer will have to devise a scheme which suits his particular circumstances and liaise with the wages office to ensure that the scheme can be implemented. The scheme must then be explained in detail to the employees, many of whom will have little idea of its taxation implications. Eventually employees will need to give authority for payroll deductions in writing. If the payroll is computerised, the programme will have to be rewritten. If it is not computerised, considerable additional time will be spent administering the scheme in the wages office. The employer will have to liaise with organisations like the Charities Aid Foundation to agree the scheme and set up the necessary procedures, including the periodic payments to charities.
      Procedures for administering schemes will have to be set up for those employees leaving or joining the employer during the course of a fiscal year, because the £100 deduction is per employee per year, and the employer will have to ensure that a joining employee has not already utilised the year's entitlement. Corresponding complications may arise for an employee who is leaving an employer.
      80
      There will also be difficulties in establishing the employee's entitlement to a deduction if that employee has multiple employments. An employee who has not revealed his multiple employments may well be deterred from joining the scheme.
      Full records will have to be maintained for the inspection of the Inland Revenue, as required. Tax deduction cards will probably be needed to note the deductions given, and the end of year Inland Revenue return—form B35—may also need to show details of the deductions.
      The scheme is bound to involve administrative costs, which may be fairly considerable to the employer. As, for the vast majority of the work force, the relief will be £29 per annum—that is, £100 at the basic rate of 29 per cent.—the employer may conclude that the tax savings and incentives involved are not worth the administrative costs. All those matters must be considered.
      It is against that background that I commend the amendment. I also take this opportunity to invite my hon. Friend the Economic Secretary to explain why the level was set at £100, and whether he feels that, in setting such a low figure, there might be a disincentive to take advantage of the scheme, which I am sure is widely welcomed in the House and by the nation.
      7.30 pm
      Mr. Tony Blair: We shall have an opportunity to debate clause 26 overall later in our debates on the Finance Bill, when we debate clause stand part. As the House will know, we welcome the payroll provision, in particular because it seems to us to open up charitable giving to many more people than before. Previously, through deeds of covenant over a four-year period, people were entitled to give and get tax relief, but that was a more sophisticated form of donation, and the payroll scheme should open up giving to a much broader spectrum of people.
      The purpose of the amendment, as I understand it, is to ensure that, if there are difficulties because of the fractions of money that will be paid over to charities on a weekly or a monthly basis, such difficulties do not result in the levelling down of the amount of money given but rather in the full provision being taken advantage of. At the moment, if the full £100 relief were to be given, in a 52-week year, that would result in a weekly payment of £1.92·3, which is not a happy figure for employers to have to pay out. In a 53-week year, it would be £1.88·6, and would work out on a monthly basis at £4.34·7. The figure of £108 is reached by saying that, if we round the figure up a bit, it should be about £2 a week, and if it were £2 a week in a 52-week year, it would be £104 and £2 a week in a 53-week year would be £106. To provide for monthly payments, the figure has been rounded up to a multiple of 12, which is how we get £108.
      The Minister should tell us whether he believes that there will be any significant disincentive to paying the maximum of £100 because of the problems of computation that will arise, and of employers having to deduct such fractions. In addition, what would the extra cost be for increasing the relief from £100 to £108? We support the payroll deduction and are sympathetic to the amendment. We should like to see from what the Minister says whether there are problems that could be avoided by making the

      81
      figure £108. That does not seem a round figure, but in the way in which the scheme will operate, it is a rounder figure than £100.
      The Economic Secretary to the Treasury (Mr. Ian Stewart): I am grateful to all right hon. and hon. Members who have spoken for enabling us to begin the Committee stage of this year's Finance Bill on such an agreeable and harmonious note.
      Mr. Austin Mitchell: There is something wrong.
      Mr. Stewart: The hon. Member seems to be somewhat disconcerted by this.
      As we are talking about charities, it is appropriate that we should begin in a spirit of co-operation and understanding. Therefore, I welcome the way in which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the hon. Member for Sedgefield (Mr. Blair), and my hon. Friends the Members for Bristol. North-West (Mr. Stern), for Corby (Mr. Powell) and for Suffolk, South (Mr. Yeo), who introduced the amendment, welcomed the concept of the payroll scheme, which we think will widen the scope for contributions to charity in an acceptable way. We are most anxious that it should not be unduly burdensome administratively, to take up a point made by my hon. Friend the Member for Corby.
      Before I answer the specific points, I shall touch briefly on one matter mentioned by the hon. Member for Ashton-under-Lyne. With his long and distinguished experience as a Treasury Minister, he will appreciate that it is necessary in our charities package to include anti-avoidance measures. We always feel inclined to do so, with regret, because of the difficulties of dealing with such technical matters. This subject has attracted a certain amount of comment and anxiety and it might be helpful if I say a few words about that now.
      No one has disputed that abuse has occurred, and I am sure that it is right to take steps to tackle it, but we are determined to ensure that in doing so we do not put genuine charitable work at a disadvantage. There are difficult technical considerations involved here and, as with most measures dealing with abuse, it is not possible to consult before a Budget. We have, however, received a number of representations to the effect that the proposals, as they stand, are likely to cause difficulty for a number of responsible bona fide charities. We are therefore considering these representations most carefully, and the Inland Revenue is consulting about them with the charitable organisations involved.
      Meanwhile, I can give the responsible charities this assurance—that we fully recognise the questions that they have raised, and shall take steps to respond to them, after thorough consultation, during the passage of the Bill. We are as anxious as they are that the potential adverse consequences that they foresee do not occur.
      I appreciate the comments made by my hon. Friend the Member for Suffolk, South when he moved this amendment, which were echoed by other hon. Members, about the competing figures that might be used for this purpose, based on so many weeks or months in the year. The amendment is designed to cope with that problem. However, any monetary limit is to some extent arbitrary. No single figure will provide a convenient round sum per week or month in all circumstances.
      82
      We looked at this most carefully and found, for example, that although, as everybody knows, there will be occasional years in which 53 weekly pay days fall in one tax year, it is also the case that some people are paid fortnightly or every four weeks, so that an extra pay day in any particular year can sometimes mean bringing in up to 56 weeks. That would require a higher figure. However, if the limit were increased to £112 to cover up to 56 weeks at £2 a week, it would not be a round sum per month. Therefore, taking the monthly and weekly figures, it is not possible to arrive at a universally correct figure.
      I can explain why we chose the round sum of £100 as the annual limit. We had it in mind that for many employees that was a substantial figure and would represent a generous contribution to charity. It will be an upper limit and by no means all those who want to contribute to the scheme will contribute that amount, or even close to that amount. It has the great advantage of being a round figure and one that is readily remembered and understood. That is important in getting the new scheme off to a good start. If a substantial number of employees can give up to the £100 limit, the benefit to charities would be considerable.
      The hon. Member for Sedgefield asked me about the cost. It is exceedingly difficult, to the point of impossibility, to quantify small changes in the upper limit, for the good reason that it is exceedingly difficult to quantify the cost of the scheme as a whole before we know better the likely take-up. It will become more apparent over the year, as consultations and discussions take place. We have estimated that the overall cost to the Revenue might be about £20 million in the first year, but that is again based on assumptions about participants and their average rate. I am afraid that I have to decline to be precise about that.
      We shall be looking at the figure of £100 in the light of experience. We shall want to see how the scheme gets going and we shall keep the limit under review from year to year. It would not be sensible to change it now. It would be better for the scheme to be readily comprehensible with a simple round sum of £100, which potential donors can easily understand and remember. I hope that my hon. Friend will withdraw his amendment on the understanding that we accept the valid points about the details of how contributions may be made in practice and that we can review it when we have experience of how the scheme works.
      Mr. Yeo: I welcome very much what the Economic Secretary has said about listening to the charity concerns on the possible adverse consequences of the anti-avoidance provisions elsewhere in the Bill. That will be of relief to many charities which feel that they may otherwise be hit in legitimate fund-raising activities.
      I was far from persuaded by my hon. Friend when he explained how he had arrived at the figure of £100. That is the one figure which is not a round sum in the way any employee is paid; it is not a round weekly, two-weekly, four-weekly or monthly sum. Unless there are employees who are paid annually—I do not believe that there are—£100 is the one figure which the Treasury could have managed to choose which is not a round sum by any method of calculation. Whatever other justification there may be for choosing £100, to claim that it is a round sum is the least convincing.

      83
      However, I appreciate that we have much to learn about how effective the scheme will be. The take-up will depend on quite a few factors, including the administration points raised by my hon. Friend during the debate and, indeed, the success of the charities in selling schemes to employers and employees. So we shall have to learn by experience.
      Before withdrawing my amendment I wish to ask my hon. Friend one question. Will the Inland Revenue be willing to make available statistics about the number of people giving amounts which are close to the upper limit? If we are to argue later for a higher limit, can we have access to information which, as I understand it, will only be in the possession of the Inland Revenue?
      Mr. Ian Stewart: I shall have to invite my hon. Friend to table questions at the appropriate time; we shall see what answer we can give then. Because the arrangements for the scheme will take some time to put in place, it will not become operative until this time next year. Therefore, it will be some time before such evidence as my hon. Friend wants will be available.
      Mr. Yeo: I appreciate that point. Even the charities might not feel that the first full year of operation was a fair basis on which to assess the scheme. It may take two or three years for the scheme to get into its stride. I am grateful for what my hon. Friend has said. When we table questions relating to Inland Revenue statistics, I hope that we shall not be met with such answers as I have come across in the past—that the information is confidential or that it would cost too much to supply it. We shall have to wait to see what happens.
      In the light of what my hon. Friend has said, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Yeo: I beg to move amendment No. 5, in page 24, line 31, at end add—
      '(9) Any approval under this section of a scheme by the Board is not to be unreasonably withheld.'.
      The Chairman: With this it will be convenient to consider amendment No. 7, in page 24, line 31, at end add—
      `(9) Nothing in these provisions shall prevent the agent and the charity from being the same person.'.
      Mr. Yeo: I am sure my hon. Friend is aware of the welcome which clause 26 has had from charities generally. He may also be aware by now of the concern which has been provoked about the practical operation of the proposed payroll donation schemes. That concern emanates from two different sources. First, there are charities which already operate payroll giving schemes; Dr. Barnardo's and the Save the Children Fund are perhaps two of the most distinguished in this category. They already have relationships with established companies and many employees give money net.
      The position of those organisations would be protected by the amendment which has been tabled by my hon. Friend the Member for Kettering (Mr. Freeman). I do not want to trespass on his territory, except to say that I strongly support the sentiment and aim of his amendment. I am anxious that charities which are already involved in successful payroll schemes, in some cases for many years, should not be forced to use an outside agency to process
      84
      a scheme so that the people giving money can get the benefit of the tax deduction. That would be potentially inconvenient and would give rise to further expense.
      7.45 pm
      The second category of charities which is concerned about the practical operation of the concession comprises those which do not yet have in operation payroll deduction schemes with employers, but which hope to do so as a result of the concession. That includes a large number of charities, large and small, national and local. In three or four years we all want to see tens of millions of pounds flowing into charities because of this valuable concession, but if full advantage is to be taken of it a large number of agencies will have to be approved under the provisions of the Bill.
      According to the clause, schemes and agencies have to be approved by the Inland Revenue. I am slightly nervous that it might be convenient, from the point of view of the Inland Revenue, if only a small number, or even a very small number, of agencies and schemes were approved. The administrative convenience of the Inland Revenue must not be allowed to disrupt the successful development of payroll donations.
      The concern of various organisations which have approached me about this has been heightened by recent claims by the Charities Aid Foundation. I welcome the involvement of the Charities Aid Foundation in the concession and I strongly support the initiatives which it has been taking since the Budget. I also support its work generally, but I must take issue with a statement in a leaflet which it published recently, called "Payroll giving—give as you earn", which said:
      "There will be strict rules governing who can be an agency charity but Charities Aid Foundation will be one and probably the principal national agency."
      That claim is neither helpful nor justified. If the Charities Aid Foundation succeeds in becoming the principal national agency over some years in full and free competition with other agencies, that is fine, but it would be unfortunate if the provisions of the Bill were interpreted in such a way as to restrict the establishment of other national agencies under the clause.
      Groups of major charities feel that they could run their own agency on a joint basis as efficiently as any other body. Not only should they be allowed, but they should be encouraged to do so. Some major charities are talking to each other about the establishment of such an agency.
      In addition, local charities may wish to take advantage of the concession. One example is the Ipswich and East Suffolk Spastics Society, of which I have the honour of being president. We might establish a relationship with a major East Anglian company such as Fison. In those circumstances the charity or the company might not want to be obliged to go to a national agency with headquarters in a part of the country well away from Suffolk. It would be more appropriate to have a local agency, based near the charity or the employer. We want to see a network of local agencies; I mean genuinely local agencies and not branches of a national agency.
      All hon. Members want the clause to be successful. Therefore, I hope that my hon. Friend will at least accept the spirit of my amendment. Can he assure us that it is the wish of the Treasury that many payroll schemes will be established and that that will be facilitated by the establishment of a large number of agencies approved by the Inland Revenue? Above all, I ask my hon. Friend for

      85
      an assurance that the Treasury will take steps to ensure that the Inland Revenue does not unreasonably impede the establishment of such agencies.
      I commend my amendment to the Committee.
      Mr. Roger Freeman: The purpose of my amendment which is grouped with the amendment moved by my hon. Friend the Member for Suffolk, South (Mr. Yeo), is to probe the Government's reasons for the technical language in clause 26.
      The scheme is excellent and is warmly to be welcomed. I speak on behalf of many companies, not only in my constituency but nationally, which are enthusiastic about the scheme and will operate it with vigour. My amendment would enable the charities themselves to act as agents for the disbursement of contributions which have been collected by employers from employees, and I envisage that the charities, acting as disbursers of the funds, would perhaps keep a portion for their own charity, the charity designated by the employees, and, as agents, pass on to the other charities the remainder of the amounts collected. I would stress that under the provisions of this clause my amendment, if it proved acceptable, could be operated only with the agreement of the employer—because it is an enabling provision—the Inland Revenue.
      As I read the clause—I look forward to enlightment by my hon. Friend the Economic Secretary—it seems to restrict the agents through whom the amounts collected by employers are ultimately passed on to charities to bodies such as the Charities Aid Foundation, and seems to prevent charities such as those mentioned by the hon. Member for Suffolk, South from performing that task.
      The amendment is supported by Dr. Barnardo's, Save the Children Fund, Help the Aged and a number of other charities. It is important to recognise that some major charities already run collection schemes through company payrolls. The schemes work without tax relief and operate on a net basis rather than on the gross basis proposed by the Bill. Where these collection schemes are operating sensibly they should be allowed to continue. I understand that Dr. Barnardo's runs a payroll scheme for about 12,000 employers and raises about £2 million a year through them. I understand that it has operated the scheme for about 80 years. Save the Children Fund operates a payroll scheme for about 4,500 employers, raising about £500,000 a year, and has done so since 1948. Between those two charities alone, therefore, there are schemes already in existence on a net basis which cover perhaps 1 million employees. A considerable body of expertise has been built up in the operation of these schemes.
      There are three principles for testing the validity and acceptability, not only of my amendment, but of the clause as a whole. I believe that the clause as amended would meet all the tests. The first must be that a payroll deduction scheme is easy for the employer to administer. My hon. Friends the Members for Bristol, North-West (Mr. Stern), and for Corby (Mr. Powell) alluded to the administrative cost of the scheme, but in my conversations, both in my constituency and outside, I have found employers to be enthusiastic about the scheme and prepared to operate it, not only converting an existing net scheme to a gross scheme, but introducing new schemes. It is important, however, that the payroll deduction scheme should be easy to administer.
      86
      Under my amendment it would be up to the employer to decide whether he would use an agent, such as the Charities Aid Foundation, or an existing charity which had been collecting funds for a number of years under the companies payroll deduction scheme and passing on perhaps a portion of the amount collected to other charities. It would be up to the employer to select the easiest and simpliest route. Realistically, we must accept that there will be just one scheme operating in a company and that it will be a gross scheme.
      There should also be maximum freedom of choice for the employee. That already happens at present with deduction schemes. If the amendment were accepted there would be no change, because it would facilitate maximum choice by the employee when it came to asking his employer to decuct an amount, within the limit of the clause, and send it to the charity of his choice.
      Thirdly, I agree with my hon. Friend the hon. Member for Suffolk, South that we must encourage diversity of systems for colleting money for ultimate donation to charities. We should not have a single, uniform, monolithic system. Many new schemes will be set up under clause 26. I welcome the fact that amounts will be collected by the employers and paid over, for example, to the Charities Aid Foundation, but there are existing schemes run by the charities themselves, and where they have proved worth while there seems no reason to disturb them. In those circumstances, the clause should facilitate the continuation of existing schemes.
      Mr. Andrew Rowe (Mid Kent): My hon. Friend the Member for Kettering (Mr. Freeman) has raised in my mind a doubt that was not there before. As I understand it, the intention of the clause is to make it possible for employees to vary the charity to which they pay if the scheme is similar to those run by the Charities Aid Foundation at present. Just because a scheme is running, this should not prevent the employee from choosing the charity to which, out of many, he would like his money sent.
      I should like to reinforce the point that there are enormous dangers in having a limited number of agents. There are even greater dangers in having only one. One of the serious disadvantages of the American system of philanthropy is that it is very often possible for United Way and similar organisations to exclude from the disbursement of money raised through their efforts charities of which they, the organisers, disapprove. This had made it much harder for innovative charities to get off the ground in the United States than is good for the cause of charity. Those charitable organisations which have long experience of running these schemes should be encouraged to continue to do so.
      The Charity Commission does extraordinarily good work in antediluvian circumstances. If we had a properly equipped Charity Commission, it would be quite easy to make administrative distinctions between, for example, charities which were deemed capable, either through experience or other means, of running schemes of this kind and those which were not. I very much hope that we will see a time then the Charity Commission comes into the 20th century and has a computer.
      Mr. Stern: Perhaps I may contribute a word of caution to this remarkably unanimous debate. I was most impressed by the comments of my hon. Friend the Member

      87
      for Suffolk, South (Mr. Yeo) when he referred to the need for this amendment as something which would facilitate local agencies. I think particularly of large companies in my own constituency, such as British Aerospace or Rolls-Royce, which would much prefer to approach a local rather than a national agency.
      It seems to me—this point has not come out in my hon. Friend's comments—that a great advantage of this particular clause will be its encouragement not of the big national charities but of the small local ones—those which have neither the muscle nor the expense money to go in for big national campaigns—which will find through local employers a ready access to additional funding which was previously denied to them by the big battalions.
      On that basis I am a little worried by the suggestion that some of the larger national charities should be confirmed as agencies. I am not wholly set against the idea, and I look forward to the comments of my hon. Friend the Economic Secretary when he replies. However, there are two potential disadvantages. First, in selecting the charity to receive a donation, many employees will take the easy way out. If the agency on every letterhead in relation to the payroll deduction scheme happens to be Barnardo's, there is at least a danger of a boost to the agency charity at the expense of many local charities which could well expect to benefit from a local scheme.
      If existing charities are encouraged to set up agencies—I hope that they will be, because they have considerable expertise in the area—they should do so only on the basis of setting up an agency which is separate from the charity concerned so that the possible advantage of the name of the charity would not appear in the name of the agency.
      I hope that whatever administrative arrangements are made, it will be borne in mind that the employer will also incur costs. Even where payroll deduction schemes are in operation or are to be adapted, there should be no pressure on the employer to go to more than one agent simply because of his employees' choice of charities.
      8 pm
      Mr. Roger Sims: Several charities have been mentioned as supporting the amendment of my hon. Friend the Member for Kettering (Mr. Freeman). May I add to them by mentioning one of the big battalions, the National Society for the Prevention of Cruelty to Children, which which I am closely associated. The society is worried about the possibility that the agents mentioned in the clause may be restricted to one or very few organisations, because that could have several effects. One would be to remove a charity's freedom to market itself. Another would be to remove the freedom of companies to back a charity of their choice.
      My hon. Friend the Member for Suffolk, South (Mr. Yeo) envisaged a local initiative. In fact, that already happens on a national basis. For example, boards of directors of companies may decide to back a particular charity by saying that they will match pound for pound anything that their employees are prepared to give that charity. To go through an agency in the way that is envisaged would not be compatible with such a scheme.
      Presumably, the Charities Aid Foundation would make some sort of charge, as indeed might any agency. Different
      88
      agencies may have different fees. If the giving has to be channeled through only one or two specified agencies, the amount that a charity finally receives may be that much less.
      It could be argued that my hon. Friend's amendment will result in a proliferation of agencies because, according to the book, there are literally thousands of charities. But we are probably talking, at most, of the top 200 in the CAF list and perhaps a handful of local charities. It would be feasible for some charities to get together, along the lines already suggested, and act as an agency. That would not necessarily have the effect envisaged by my hon. Friend the Member for Bristol, North-West (Mr. Stern).
      I hope that my hon. Friend the Economic Secretary will consider that seriously. If he is not at this stage prepared to accept the amendment, I hope that he will at least give some further thought to the ideas that have been put forward, with a view to amending the final scheme so that the agents can be drawn from a fairly wide spectrum.
      Mr. Blair: The regulations that the Government will promulgate will tell us a great deal more than the Bill, but we should have some clear idea of the Government's concept of how the scheme will operate. Will it simply embrace a few charitable collecting agencies or have a much broader scope, or are the Government simply willing to let it run and see what happens? We need to know that, because many charities have expressed concern that they may be unduly limited if they are not also allowed to act as agents.
      I have doubts about some of the points made by the hon. Member for Suffolk. South (Mr. Yeo). At present, the employer will deduct the money and pay it to the agent who will give it to the charity. Whereas the employer will arrange for the agency, for which there will be board approval, the employee will simply tell the employer the amount to be deducted and the employee will presumably nominate to the agent the charities to which he wishes to give.
      One desirable advantage of that scheme is its administrative simplicity for the employer who has one agent for all the employees. Secondly, there is a notion of confidentiality between the employee and the agent about the charities to which he wishes to give. I do not know whether that does or could happen but an employer may want to foist a pet charity on his employees who may then feel in some way constrained if they have to give to a charity that is an agent. The notion of confidentiality is important.
      Thirdly, where as the large charities may want to act as agents, many of the smaller charities could lose out. It would be unfortunate if some of the smaller charities were eased out of the competition by the larger charities. The disadvantage of the scheme as presently envisaged is that Dr. Barnardo's and other charities already have a payroll scheme without tax relief, so why should not they continue to do so? There are also charities—my hon. Friend the Member for Eccles (Mr. Carter-Jones) asked me to mention MENCAP in this connection—that do not operate such a scheme but may want to do so, so why shouldn't they?
      I want to make two points to the Economic Secretary but I shall keep an open mind until he replies. First, is there anything in the provisions to prevent a charity from setting up an agency with the same effect as the amendment? Secondly, is not an important facet of this that we have to

      89
      decide whether, if charities are to be allowed to act as collecting agents, they can simply collect for themselves as agents or whether they have to collect as agents in the proper sense of the term and distribute not merely to themselves but to any other charities that an employee may want to mention?
      Both those points are important in terms of how the Government see the scheme operating. It would only be acceptable—I notice that the hon. Member for Kettering (Mr. Freeman) made the same assumption—for charities to act as agents if they acted properly as agents and were not simply collecting on their own behalf. Even then it would obviously be in their interests that more rather than less money sticks to their fingers as it passes through their hands. I should be obliged if the Minister would give us some information or enlarge our understanding of the exact role which the Government envisage for agents. Will there be many or few agents? If a charity is allowed to become an agent, will donations be confined to that charity or will they he spread over several charities?
      Mr. Ian Stewart: Our relatively short debate on the two linked amendments gave some of my hon. Friends the opportunity to propose ideas—sometimes conflicting ideas—that we must take into account before the arrangements for the agencies are finalised. I welcome the sensible contribution of the hon. Member for Sedgefield (Mr. Blair), who asked some questions which have been in our minds and which, like those of my hon. Friends, must be considered before the schemes and the agencies are set up.
      My hon. Friend the Member for Suffolk, South (Mr. Yeo) hoped that there would be no limitation on the number of companies or agencies taking part out of consideration for the convenience of the Inland Revenue. We do not intend that administrative convenience should limit the number of agencies. We are anxious that as many companies as possible should take part in the scheme and that there should be a range of choices for them in the agencies that they select. I do not exclude the idea of local or regional agencies, so long as they are willing, if requested by participants in that scheme, to make payments to any charity. In many cases, it would be sensible for the local interest to be represented through one agency, and I hope that will rise.
      My hon. Friend the Member for Mid-Kent (Mr. Rowe) said that there could be dangers in establishing only a few agencies. The Government will not specify the number of agencies because the scheme must not be operated by administrative instruction from the Government. It should develop according to the needs and interests of the people taking part. There should be no bar on existing charities acting as agents, provided that they act fairly and without bias as agents for any charity that may wish to be nominated.
      The specific points raised in the amendments are of some interest. Amendment No. 5 refers to the Board of Inland Revenue unreasonably witholding approval of a scheme. Clause 26 already sets out the basic conditions of relief. Clause 27, which is the more technical clause, provides for the Treasury to make regulations governing the grant or withdrawal of approval of schemes by the board. That should enable us to set out the more detailed conditions of approval in the regulations. It will be necessary to ensure that, once the donations have been deducted from the employee's pay and received their tax
      90
      relief, they cannot be returned to the employee and that they are paid over to the agency for the charities within a reasonable time. We shall wish to embody several such practical considerations in the regulations.
      The board's main function in considering schemes for approval will then be to see whether the scheme meets the requirements laid down by the legislation and regulations. Although this point is rather more appropriate to clause 27 than to clause 26, I assure my hon. Friend the Member for Suffolk, South that the board will not withhold approval from schemes without good reason. In any event, a charity could look to the courts for effective redress under existing administrative law. No doubt it would be a cumbersome process, but if in any case the board acted unreasonably, it would be exposed to redress in that way. It is not necessary to amend the Bill in the way that my hon. Friend suggests, but if, on reflection, he wishes to raise the matter again, it may be in order to do so when the Committee considers clause 27. As that will not be for a few weeks, there will be more time to consider the points raised.
      My hon. Friend the Member for Kettering (Mr. Freeman) said that the scheme should be easy and give maximum freedom of choice for the employee. That is right. We do not wish to compel employers, employees or charities to do the Government's bidding. We wish to encourage diversity. Amendment No. 7 deals with a matter that has already been mentioned by Dr. Barnado's, Help the Aged, Save the Children Fund and other larger charities. Perhaps I can outline our approach to the matter.
      8.15 pm
      One condition for tax relief for charitable donations under the new payroll scheme is that the donations should be paid over by the employer to an agency which will distribute them to the charities to which the employees wish them to go. Using agencies in that way has several practical advantages. It makes the scheme easier for the employer to run, because he will not need to make separate payments to individual charities to which employees wish to make donations, nor to check that they are properly registered charities. Instead, the agency would act as a clearing house. Some charities which already run payroll deduction schemes with employers have been rather worried about this. Their fear is that, as the clause stands, their schemes might have to operate through an independent agency if the participants are to get tax relief. At the same time, however, it is important that the employee should be able to use the scheme to make his donations to any charity he wishes. He should not be limited to one charity with which the employer already has a deduction scheme.
      Therefore, our aim is to give all charities a fair chance to benefit from the scheme. Large national charities, although important and deserving, should not be allowed to squeeze out smaller local charities. If a charity such as Dr. Barnado's or Save the Children Fund wishes to fulfil the agency role and pass on donations to other charities at the employees' request, as well as collecting donations for itself, there is no objection in principle to its doing so.
      I stress again that a charity which acts as an agency in that way would have to pass on donations to any charity to which the employees wish to give.
      I accept that the clause as it stands leaves some doubt whether an agency charity can collect donations to itself at the same time as donations to others. We shall reconsider the drafting of the clause and, if necessary

      91
      introduce an amendment to clause 26 on Report. If the matter can be dealt with under clause 27, we can table amendments in Committee.
      I hope that my hon. Friend will accept that assurance and that the Committee will accept that the Government take into account many of the worries and interests that have been expressed. We hope that they can be taken into consideration when the rules and regulations are formulated.
      Mr. Yeo: I welcome my hon. Friend's assurances, especially his clarification of the Government's view that it will be desirable to establish a fair number of agencies. I also welcome the possibility of local and regional agencies. The concessions will probably enable funds to flow into local and regional organisations. I am fairly optimistic that, because of the importance of personal contact between the charity and the donors, there will be opportunities for local organisations to benefit.
      The only discouraging aspect of my hon. Friend's remarks was the suggestion that it may take some weeks for the Committee to reach clause 27. I had hoped that progress would be such that we would reach it very quickly.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Question proposed, That the clause stand part of the Bill.
      Mr. Blair: I must confess that one extraordinary fact that became clear when I studied the matter in detail was the sheer scale of the voluntary sector. For example, there are 150,000 different charities, with an estimated income of between £8 billion and £10 billion a year. That covers income not only from gifts but from grants, fees and other earnings. It is an enormous sector, which receives grants of £350 million a year from local authorities and £180 million a year from Government Departments. Quangos such as the Manpower Services Commission also contribute in total as much as £2 billion a year.
      Estimates of individual giving are uncertain, but the Charities Aid Foundation estimates that it could be about £500 million to £700 million a year, to which must be added gifts from companies. We are discussing a vast business. The payroll provision being introduced in clause 26 will increase the income of charities by another £20 million, which is about 0·2 per cent. of their income. I do not cavil at that, because any increase is welcome, but it is a measure of the voluntary sector that it has such a large income.
      As I have already made clear, we welcome these measures. However, we seek one or two assurances from the Government. The first is that these measures should increase the resources of charities and should not be simply a transfer of burden from the state sector to the voluntary sector. These measures should complement state provision, not be a substitute for it.
      Secondly, we want to be sure that we are increasing the revenue of those charities which pursue genuine charitable objects, and not those which have less to do with charity and more to do with narrow self-interest. We seek an assurance that it is no part of the Government's intention to reduce financial aid to the voluntary sector. If that
      92
      assurance is given now, I shall leave the matter there. The Minister is nodding, so I take that he is giving me that assurance.
      I may have misunderstood what the Financial Times quoted the Financial Secretary as saying during a meeting organised by the Charities Aid Foundation:
      "We prefer that responsibility should rest with the individual, so that the state is involved only where it needs to be."
      If that means that individuals should pursue self-help and not be beneficiaries of state help, I accept that that is an old Conservative canard with which I am happy to live. However, if it means——
      Mrs. Elaine Kellett-Bowman: Why canard?
      Mr. Blair: If the hon. Lady wishes to intervene, I shall give way. I see no reason to answer sedentary interventions.
      Mrs. Kellett-Bowman: Why does the hon. Gentleman refer to a canard?
      Mr. Blair: We believe that self-help would be greatly assisted if there was proper state provision, and that state provision and self-help go hand in hand.
      If the Financial Secretary meant that the beneficiaries of state help should come within the voluntary sector in addition to being state beneficiaries, we are happy to live with that. However, if he meant that the donors should be individuals rather than the state, so that the responsibility for vital services is transferred from the state to the voluntary sector, that is a novel and unacceptable proposition. I see the Minister shaking his head, and I take it that he is giving me the assurance that I seek on that point.
      One aspect that has concerned many people has arisen partly because of the cuts in local authority funding and partly from the publication by the Office of Health Economics of a document entitled "Crisis in Research". This document shows how much medical research has become dependent upon charities, and that charities are increasingly becoming a substitute for proper state provision. I very much hope that those are only straws in the wind. We talk of and argue about privatisation, but voluntarisation, as it is now called, is a novel proposition and it would be wrong to introduce it under the guise of increased Exchequer generosity to charities.
      Mr. William Cash: The hon. Gentleman may be interested to know that a charity is starting up in my constituency because a school that was closed by the Labour county council needs to continue for the sake of children who are suffering from child abuse——
      The Chairman: Order. I hope that the hon. Gentleman will stick to the terms of the clause that the Committee is discussing.
      Mr. Blair: We wish to ensure that charities are not being given something with one hand and having it taken away with the other.
      I very much welcome the Economic Secretary's assurance that the Government will carefully consider representations about their anti-avoidance provisions, which arise under clause 29. I appreciate that we will debate those provisions in much greater detail in Committee, but they affect clause 26 because payroll

      93
      deductions will be made only in respect of charities that qualify. The measures may cause more problems than they solve.
      I wish to make it clear that we fully support the objective of stamping out bogus charities, and we accept the need for anti-avoidance provisions. We are concerned that desirable objectives may be undesirably attained; the purpose is right, but the means of achieving it could cause many problems. I ask the Government to reconsider their proposals well in advance of the detailed debate that we will have in Committee.
      I have formed a view—although I am happy to listen to anything that the Economic Secretary says—that those provisions may catch many innocent charities and fail to catch the guilty. They focus on the method of operation of charities, not on whether charitable objectives are being pursued. There is some confusion about whether the measures are proper anti-avoidance provisions, or whether they are an attempt to redefine charities with bona fide objectives and those without them.
      The Opposition would be happy to open up the debate on what are or are not bona fide objectives. Indeed, many people cannot understand why tax relief is given to private schools that charge fees, or why the taxpayer should subsidise those institutions of privilege. In introducing anti-avoidance provisions the Government have opened up the debate on what are or are not deserving charities. I ask the Government to remember that when we question what should or should not be considered bona fide charities.
      We welcome clause 26. We are pleased with the assurance that this is not part of a desire by the Government to shift responsibility for the proper provision of services from the state to the voluntary sector. We shall monitor the situation carefully. I hope that the Economic Secretary will repeat the assurance he has given that the Government will carefully consider the representations about the anti-avoidance provision. It would be a tragedy if a measure which is basically welcomed by charities ended up causing as many problems as it solved.
      8.30 pm
      Mr. Andrew Rowe: I welcome the clause and all that it means for charities. I hope that one of the consequences of it will be to widen enormously the interest that employees take in charities.
      One of the most useful functions would be to encourage people who give to charity to take an increasing interest in the way in which the charity discharges its responsibilities. The payroll giving will encourage groups to form in the workplace, and those groups may become activists—shareholders—in the charity's performance. That will go some way towards ensuring that the administrative costs do not run out of control and that those who donate approve of the functions that the charity performs. At present there are too many charities still run by a small group of people, often in a traditional way. The functions of the charity are not clearly known by the people who subscribe to it.
      I agree with the hon. Member for Sedgefield (Mr. Blair) that we should do everything in our power to remove any abuse of charitable status. The clause will increase the awareness of any possible abuse. In time it will reduce the need for some charities to depend so heavily on central and local government money. The terrible weakness of depending on the state sector—central Government are
      94
      notable offenders—is that it tends to give its annual grants too late in the year. This makes it extremely difficult for charities to forecast exactly what their income will be. Anything that will make it easier for charities to be independent of state handouts should be welcomed.
      Mr. Austin Mitchell: I welcome the clause, although not for the same reasons as the hon. Member for Mid-Kent (Mr. Rowe).
      The consequences of the clause will be to turn charities much more into business organisations. They will go away from the old, somewhat fuddy-duddy but caring, important role of charities, run on a voluntary, almost casual basis. This allowed people to get involved without expertise, and that was healthy. The clause will professionalise charities. There will be a much more professional means of tapping money, and donations will be made out of salaries.
      We want to consider carefully what is meant by a charity. We should carefully consider what areas are appropriate for charitable activities. Public schools are regarded as charities, but I do not think that the clause will help them because, with present public school fees, it will not enable pupils to buy a packet of crisps. The fact that public schools are regarded as charities suggests a need to review what is a charity. Such a review will be carried out by the Labour Government and it will take away the charitable status of bodies such as public schools.
      Mr. Rowe: Did the hon. Gentleman see the report today that it is cheaper to keep a child at a fee-paying school than at some Inner London education authority schools?
      Mr. Mitchell: It is cheaper to keep a child in prison than at a fee-paying school, but that does not say anything about the advantages of either institution.
      Given the scale of fees, the privilege of keeping children at public schools is one accorded to a narrow, wealthy section of this society. It is wrong that such schools should have the backing of charitable status. It is wrong to subsidise the education of the children at these schools at the expense of the rest of us.
      The charitable sector is active and dynamic. Grimsby is a classic example of a centre of thriving charitable activity and endeavour. Such a centre needs the help provided by the clause. It is welcome and should have been implemented some time ago. The clause will enable our charities to operate on similar lines to the American pattern for charitable donations. It will allow those donations to be made with ease and convenience, which I welcome.
      I cannot help being suspicious, not of Greeks bearing gifts, but of Spartans bearing gifts. The Government's attitude to the welfare state is Spartan. When I consider the clause in the context of the other things that the Government have done to undermine the welfare state, it makes me a mite suspicious. The clause, though it is welcome, important and benign, may be the preparation for shifting the burden of caring and concern from the public sector on to the voluntary charitable sector. The Government can rush forward and state what wonderful things they have done for charity and then state that they will carry further the process of cuts on which they have been engaged for so long.
      My hon. Friend the Member for Sedgefield (Mr. Blair) asked whether this was the prelude to a further trimming

      95
      of the welfare state. I share his suspicion. It is essential that there is basic state provision in a whole range of areas, not just in traditional areas, but where the voluntary charitable sector has been least effective in alleviating the problems.
      The clause will tend to channel money to efficient, well-organised middle-class charities rather than to those which are concerned with the problems of poverty and housing neglect. I do not wish the concentration of charitable activity to be at the expense of the state sector. The Government have cut back in a shameful, shabby, cheese-paring and mean way. Throughout the seven years of Conservative Government the local authorities have been undermined by penalties and by cuts in rate support grant. Now that the Government are supporting the voluntary sector and charitable organisations, we are bound to be a little suspicious of their motives.
      I welcome the clause with those reservations. It is a step towards stimulating and supporting a living, loving, caring and altruistic sector of society which makes life better for many people. Charities provide a range of care and concern which are best summed up as Socialism in action, and that is well deserving of help.
      Mr. Cash: I welcome the clause. I am sure that my right hon. Friend the Financial Secretary to the Treasury will not mind if I refer to his excellent speech on 1 May at the Charities Aid Foundation conference. My right hon. Friend set out the philosophy which underpins this provision. His speech gave a clear explanation of its objectives and in a far more eloquent manner than I could.
      I am concerned about some of the remarks made by Opposition Members. I detected a certain amount of criticism for voluntarisation, but that is what lies at the root of charitable giving. It is important that employees should be involved. It is obvious that the state has an important role to play, but voluntary giving is the essence of community giving and the loving and caring to which the hon. Member for Great Grimsby (Mr. Mitchell) referred.
      I hope that Opposition Members are careful not to denigrate the voluntary aspect of giving, because there was the slightest suggestion of that tonight.
      Mr. Nick Raynsford: I declare an interest. I have worked for a charity for the past 14 years and I am continuing, albeit in a part-time and temporary role, as its employee.
      I welcome clause 26, but I should like to reinforce the anxieties expressed by my hon. Friends the Members for Sedgefield (Mr. Blair) and for Great Grimsby (Mr. Mitchell) about voluntary giving not being seen as an alternative to support from the public sector. I find it a slightly unfortunate coincidence that we are considering the clause when many voluntary organisations are threatened with the loss of staff, or even closure, because of the abolition of the Greater London council and the metropolitan county councils and the restrictions on local authority expenditure.
      In my constituency, I have examples of well respected voluntary organisations—such as Age Concern, the unemployed workers centre, and the law centre, which have done exceptionally good work—which are all at risk of redundancies or closure because of inadequate support from the public sector. Lest it be suggested that public sector support is not healthy for voluntary
      96
      organisations, the Committee should be aware of an article in this week's New Society, which discusses the matter in some detail and which is based on a study funded by the Home Office and published by the Policy Studies Institute.
      According to the article, the study considered what effect statutory grant aid has on the number of paid staff employed, whether it affects the level of voluntary involvement and how it changes the amount of funding obtained from other sources. The evidence is perhaps surprising. It suggests that, far from undermining voluntarism, statutory grant aid has a multiplier effect, which the article identifies. It was found that statutory grant aid led to a greater capacity to obtain more resources from other sources, that it expanded capacity so that the organisation was able to acquire and do more, and that it created a climate of general support for the voluntary sector, which produced a great deal more voluntary activity.
      The study compares two areas. The article stated:
      "The effects of local government grant aid on an organisation's ability to acquire other resources are nicely illustrated in one example of two local Age Concern organisations: one is in an authority which gives relatively little in grant aid to the voluntary sector in general and similarly little to the local Age Concern; the other receives substantially more grant aid from a relatively generous authority."
      Nothing is said about the political complexion of the two authorities, but hon. Members will be aware that more generous support is generally afforded by Labour-controlled authorities, whereas more sparse support is generally given by Conservative-controlled authorities.
      The article continues:
      "The low-funded Age Concern employs three full-time and three part-time workers and involves volunteers giving an estimated 1,000 hours per week … The higher-funded Age Concern employs six full-time and four pan-time workers and involves volunteers who give an estimated 3.000 hours per week."
      In other words, three times the level of voluntary activity is stimulated by local government generosity to the voluntary sector. It is therefore important to be aware of the stimulating effect of generous public sector support on voluntary initiative and the debilitating effect that reliance on purely voluntary donations can have.
      8.45 pm
      A substantial number of voluntary organisations are not popular. They do not pursue causes which the public want to support. Indeed, many of them help some of the most unpopular groups in society, such as drug addicts, alcoholics and others who do not engender support and sympathy. Some public sector support for such organisations is vital to maintain their work.
      Dr. M. S. Miller: Such a psychological phenomenon is well known. Those who help organisations which are doing good stimulate and encourage them. There is no reason to suppose that assistance dampens an organisation's enthusiasm—quite the reverse.
      Mr. Raynsford: I entirely agree. If Conservative Members extend the parallel to economic matters, they will appreciate that a little stimulus and encouragement of the economy can produce considerable benefits, as many of us argue.
      It is important to remember that a healthy voluntary sector meets a range of needs not just popular needs, and ensures proper provision. It depends on generous support from individuals, private donors and the public sector. It

      97
      would be very sad if the clause were seen to be part of a process of continuing restrictions on public sector grants to voluntary organisations or as a process of transferring support from public to private sources.
      Mr. Yeo: I shall not attempt to follow the hon. Member for Fulham (Mr. Raynsford) in his wide-ranging choice of subjects, but I find it rather surprising that, in a debate on a clause which is universally agreed to be likely to stimulate private giving, we have to listen to a lot of moans about organisations that run out of funds presumably because they cannot attract such giving.
      I was also sorry to hear the hon. Member for Great Grimsby (Mr. Mitchell) trying to suggest that there is some conflict between an efficiently run organisation and a caring organisation. I believe that any organisation that is truly caring must care about the efficiency with which it uses its resoures. That is why I was so delighted by what my hon. Friend the Member for Mid-Kent (Mr. Rowe) said. If the clause leads to greater scrutiny by donors and the public of how funds are used, it is to be welcomed, to say nothing of its ability to stimulate private donations.
      The hon. Member for Sedgefield (Mr. Blair) mentioned the 150,000 charities. I should just like to remind the Committee that there is a larger, but unknown, number of charitable organisations. The 150,000 is roughly the number of registrations issued by the Charity Commission, but there are many unregistered charities which will enjoy the tax benefits of the Finance Bill.
      Nobody—not even the Charity Commission—knows how many charities there are in Britain. Indeed, some of the Charity Commission's numbers have been issued to charities that are now defunct, as it will admit if pressed. We have an estimate—£10 billion is a popularly used figure—of the charitable sector's income, but it is only the most vague guesstimate because the requirement for charities to file their accounts is not enforced. We therefore do not have access to the accounts of many charities which enjoy what is effectively a public subsidy through tax concessions.
      There is not even a requirement on some charities to file accounts, to say nothing of the fact that such a requirement would be ignored. I hope that my hon. Friend the Economic Secretary and his colleagues will, in view of the prominence that charities have been given in the Bill, persuade their Home Office colleagues to see whether we can improve the accountability of charitable organisations. The more that we grant tax concessions—I welcome them—the more necessary and desirable it becomes to give the public proper information about how the concessions are being used.
      My second and last point concerns the comment about voluntarisation, which came in the same breath as privatisation. I think it was acknowledged by the hon. Member for Sedgefield that assurances were given from the Conservative Benches that it was not the intention of the Government to use greater private funding of charities as a reason for cutting basic state provision in areas where the state has an obligation to fund. However, I believe that it is important to recognise that there is a form of voluntarisation which is in everybody's interest.
      Many organisations provide services on an agency basis for the state. To give as one example the education of handicapped children, many special schools in the country are run with great expertise and efficiency by voluntary organisations. In my view, it is positively desirable that we
      98
      should encourage more voluntary organisations to provide such services on an agency and competitive basis. There is no merit in saying that all handicapped children who go to a special school should go to a school that is run by a local education authority. There is every advantage in saying that we should have a great plurality and diversity of provision of special education and all sorts of other functions, some by local authorities, some by health authorities, some by education authorities and some by voluntary organisations. If, by encouraging private donations in the voluntary sector, we encourage innovation in the voluntary sector, we will find that this diversity and the plural approach will be promoted.
      Mr. Cash: Will my hon. Friend accept that Henchurch special school in my constituency was closed by the Labour county council and we had to go along the very route that he advocated, which I thoroughly applaud?
      Mr. Yeo: I am most interested in the very important point raised by my hon. Friend.
      The question that I want to ask the Opposition is whether they endorse the process of encouraging voluntary organisations to provide services that will be funded by sponsorship from state authorities, or whether they are opposed to the growth of voluntary activity in that way.
      Mr. Blair: May I make it absolutely clear, if it has not been made clear already—I should have thought that it had been—that we do not in any way oppose voluntary organisations providing these facilities. What we oppose is the state reducing its commitment in order to allow the voluntary organisations to do the state's work for it. If the two grow in tandem, that is excellent. If there is plurality, that is excellent. What there should not be—this is what voluntarisation means—is voluntarisation in the sense that the state reduces its burden and shifts it on to ordinary members of the public.
      Mr. Yeo: I am delighted that the hon. Gentleman has given that assurance. I therefore hope that, when schools are being closed by education authorities because they are voluntary organisations providing education that will receive the full backing of Labour party members in the House and in local authorities throughout the country.
      Mr. David Penhaligon: I believe this to be one of the best clauses of a Finance Bill that Parliament has had the chance to consider for some time. There is no doubt that those who should take the credit are those who have been involved in the long-running campaign to get some relief for charities against the doubling of VAT on their expenditure in 1979. For all that, one regards this as a most welcome addition to the legislation, and I congratulate the Government and Ministers on it.
      I think that criticism is not right at this moment. It is fair to say, when the argument against state provision and voluntary provision is taken into consideration, that some charities take enormous pride in their independence. In a peculiar way, the greatest insult that any Government could give to such charities would be to suggest that they, the Government, should take over a part of the assistance. I know this well from my own locality in regard to one of the more remarkable voluntary services in the country, that provided by the lifeboat men. This service often calls upon the individual concerned to make the ultimate charity donation to the well-being of his fellow human beings, as it is not unknown for lifeboat men to give their own lives,

      99
      yet their fierce independence of Government provision goes back way beyond this Government, the last Government or the Government before that.
      I believe that this may well encourage charities to make provision in addition to the provision that is made by the state. If there is any hint that the Government are hoping to make a reduction in certain areas because of the clause, I suspect that they are in for a disappointment in any case. I suspect that the sums involved relative to the provision of care for the mass of people in Britain are very small.
      For all that, I think that there will be new and fresh ideas, and that public opinion will be given a new freedom to influence events and developments because of the clause. It will be possible to express ideas which Governments may well be forced to follow, because it will have been demonstrated that in particular areas of care these ideas have been successful. It is not difficult to think of examples. There is, for instance, the hospice movement, which was started in the charity area.
      I have no criticism to make of the clause, and I congratulate the Government on introducing it. It is not inconceivable that at some time in the future we may wish to change it a little. Sometimes clauses to Finance Bills have effects other than those originally intended which cannot be imagined by anybody at the time. This can be looked at as the years go by. I hope that the charities will find this effective in increasing their income and that the public will use this new freedom to show the care that I know they have in the development of new ideas. I therefore add the wholehearted approval of the alliance Benches of the clause.
      Mr. Alan Howarth (Straftord-on-Avon): I was encouraged to hear my hon. Friend the Economic Secretary to the Treasury tell the Committee that if clause 26 works as he hopes it will do it will encourage a wide diversity of charitable giving. That theme has been echoed by other hon. Members on both sides of the House, particularly by my hon. Friend the Member for Suffolk, South (Mr. Yeo).
      I was not particularly surprised, but I was concerned to hear the reaffirmation from the Opposition, notably in the speech of the hon. Member for Great Grimsby (Mr. Mitchell), of the intention of the Labour party, if it has the opportunity, to introduce a statutory definition of what is a charity and what are appropriate charitable objects. I understand their argument about abuse. We are agreed, I think, that it is important to find practical ways to tackle abuse.
      The hon. Member for Sedgefield (Mr. Blair) was right to say that the problems of definition are relevant to the working of clause 26, because if clause 29 creates the sort of collateral damage, if I may use that phrase, which many people, including myself, fear, this in turn will impact unfavourably on the operation of clause 26 because people will be unwilling to give if they cannot be assured that tax relief will be available in respect of the charities they wish to support.
      We are concerned to find practical ways to tackle the problem of abuse. It will be no surprise to the Committee, however, if I say that I would be most reluctant to see the Labour party abolishing the charitable status of independent schools. That is an argument which it is entitled to put forward and a point of view that one
      100
      understands. However, it would, in my view, be using a rather heavy blunderbuss and it would be in danger of creating more collateral damage than it would wish to do if it were to set off down the road of trying to achieve a statutory definition of what is a charity. I hope that when the Government come under pressure, which they are now experiencing, and of their own volition come properly to tackle abuse, they will resist the temptation to try to achieve a statutory definition of what is a legitimate or proper charitable activity. That has never been done in our history.
      The Elizabethan Statute of Uses did not define charities. The preamble to the Statute of Uses, in sonorous Elizabethan language, sets out and itemises a list of individual charitable activities and provides examples or cases of what is charitable activity or what are charitable objects. They are instances that were pertinent to those days, and the circumstances that applied then—the help or relief then needed—perhaps no longer apply.
      There are some rather quaint items in the preamble. We no longer think that it is a proper role of charities to engage in building bridges — at least in a literal or physical sense. We no longer see it as a major role of charities to find endowments for spinsters. However, it is my recollection that both instances are set out in the preamble to the Elizabethan Statute of Uses.
      The history of charitable giving and charitable practice in Britain has evolved in case law. There have been no attempts fully to define in statute what is charitable. There have been important judgments—for example, those of Lord McNaghten in the previous century and, much more recently, certain obiter dicta of Lord Hailsham—and these have reinforced the tradition of there not being a statutory definition.
      9 pm
      The great strength and value of the charitable movement has been in its diversity and innovative quality and its capacity to identify new circumstances where charitable giving is needed urgently and would be valued. The virtue of charities, in my judgment, in our contemporary circumstances is that they should complement the welfare state. I accept the arguments advanced by the hon. Member for Fulham (Mr. Raynsford). Charities can be complementary to the welfare state in the sense that they have a flexible, innovative and creative quality. They are able to work with much greater precision and much greater speed of response than the relatively cumbersome, broad-brush approach of statutory organisations. Both charities and statutory organisations are needed, and both should work in fashions that are complementary to each other.
      I commend to Opposition Members a wise remark that was made by Lord Goodman. Of course, the Labour party changes, and it may be that what Lord Goodman says is no longer viewed so forcibly, but he remarked in his study of charities that
      "to define is to confine."
      I think that we have all been anxious to ensure that the clauses that relate to charities should be such as to encourage a new flowering and greater diversity of charitable activity. Therefore, I counsel great caution in attempting a definition, even with a worthwhile purpose lying behind it, for
      "to define is to confine."
      It would be a shame if legislation and policy which would be met with considerable sympathy in all parts of the

      101
      House of Commons were to end up in a limiting definition. I am confident that that will not be the upshot of the Governments legislative activity. However, I was nervous when I heard the hon. Member for Great Grimsby (Mr. Mitchell), and for that reason I decided to contribute to the debate.
      Mr. Ian Stewart: I wish to say plainly that I welcome the uncomplicated way in which the Member for Truro (Mr. Penhaligon) spoke about the clause. It is an important step forward in the provision of resources for charities and I hope, like the hon. Gentleman, that it will have stimulated people's imagination about carrying out charitable causes which they might have felt were impossible because of lack of resources. I hope that the clause will enable them to see their way to undertaking those clauses. In that sense the clause could have a creative contribution as well as an additional one to existing charitable activities as they are now conducted.
      I hope that no Opposition Members are surprised that the Government should introduce such a clause, or the package of measures which were announced in the Budget. The Government have done more to help charities than any previous Administration. Direct support for the latest year amounts to over £200 million, which is more than double the 1979 figure. That represents a substantial increase in real terms even after account has been taken of inflation. We have maintained and increased Government support. I can assure the hon. Member for Sedgefield (Mr. Blair) and others that the measures that we are introducing are not at all prejudicial to funds made available for public service provision. They are additional, and I hope that in many cases they will be complementary.
      The package introduced this year is the most substantial package of measures to help charities to have been included in a single Budget. It marks a further step in the process that we have tried to develop during the past few years in order to improve tax relief for giving. In 1980, we reduced the minimum period for charitable covenants that qualified for tax relief from seven to four years. We also introduced the higher rate income tax relief for charitable covenants, originally with a £3,000 limit. In 1983, that limit was increased to £5,000 and in 1985 it was increased to £10,000. It is now to be removed. Charities generally welcomed those moves, and I think that it is a measure of their success that new charitable deeds of covenant seen by the Inland Revenue increased from just under 600,000 to 1980 to 830,000 in 1985. Tax repayments to charities increased by about 85 per cent. during those years.
      We have also introduced several other measures to encourage the flow of funds from the private sector to voluntary organisations. We removed the limit for capital transfer tax exemption for gifts to charities within one year of death, so freeing gifts and legacies to charities completely from capital transfer tax. We exempted charities from development land tax, before the tax itself was abolished last year. Exemption from stamp duty was introduced on charitable covenants, and on conveyances and transfer of property of all kinds to a charity. In 1983, we introduced tax relief for an employee's salary costs met by an employer during a period of secondment to a charity. All those changes, together with the changes in the Budget and the payroll scheme in clause 26, helped charities in their different ways.
      This year's package includes, of course, arrangements for on-off gifts by companies up to the equivalent of 3 per
      102
      cent. of their annual dividend. It includes some extension of VAT relief in respect of talking books for the blind, the dress allowance for the handicapped, medicinal products and some other items. But it is right that the debate should focus on the payroll scheme, because in many ways that is one of the most interesting and innovative measures to be introduced to help charities. I particularly appreciate the welcome given to it by hon. Members on both sides of the House.
      The hon. Member for Sedgefield alluded to the scale of the voluntary sector. The figures are very impressive. I understand that the annual income of charities is now in excess of £6 billion. The hon. Gentleman said that he thought that £20 million extra as a result of this provision represented a small sum. But we are talking about £20 million in tax relief and not £20 million as being the net effect for the charities. We hope that the figure will be three or four times bigger than that. That judgment is made solely on an assessment of how widely the scheme may be used in its initial stages. If it proves successful, we hope that it will be extended. The Treasury would be willing to see the cost in tax relief increased as the commitment to charitable support also increases.
      My right hon. Friend the Financial Secretary made a speech a few days ago in which he referred to the Government's approach to voluntary giving. Our philosophy is to stimulate charitable support. This measure is designed to that end. After the bit that has been quoted, my right hon. Friend said:
      "In the voluntary sector we see it in the action taken by voluntary organisations up and down the country in many areas of charitable work. Charities operating in a particular field or a particular local area are often better placed to know what the real needs are and how best to tackle them. Of course it isn't just a question of money, because many charities depend heavily on the unpaid voluntary work done by their supporters. But it must be healthy for charities to get their financial and practical support from members of the public and from businesses which take an interest in their work."
      That is complementary to the public provision. There is no question of one substituting for the other.
      The hon. Member for Sedgefield referred to the problems of abuse and anti-avoidance. Consultations are already under way on that subject. I say that for the benefit of my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) also. The questions of abuse concern financial abuse and not charitable objectives. Although the Treasury has many responsibilities, it does not have responsibility for the Charity Commission, or the whole question of charitable objectives. We are anxious that tax relief given to encourage contributions to charities should not be abused for non-charitable purposes. That is the aim of clause 29. Obviously, we shall have to look further at clause 29 in the light of the representations that have been made. I do not know whether the hon. Member for Stratford-on-Avon was in the Chamber earlier when I gave an assurance to that effect. However, it will be recorded in the Official Report.
      My hon. Friend the Member for Mid-Kent (Mr. Rowe) welcomed the fact that the clause would widen the interests of employees in charities generally. I am sure that that is right. It is important to encourage the voluntary sector. Giving creates a direct link and a direct interest in the activities that charities provide. That itself is important. If it leads, as my hon. Friend the Member for Suffolk, South (Mr. Yeo) said, to greater accountability, that will be welcome. As he said, in charitable

      103
      expenditure, as in any other, it is important to get value for money. One is not doing one's best by the people who provide the money if one does not use the money economically and in the best interests of those for whom it is provided.
      I do not want to enter into a long disquisition about voluntarisation. My view is that the best future for charities and public provision of a charitable and social nature is that, wherever possible, they should work in partnership. For a long time, I was treasurer of a charity on which I think the mother of the hon. Member for Fulham (Mr. Raynsford) served. I hope that I have not embarrassed him by saying that.
      Mr. Raynsford indicated dissent.
      Mr. Stewart: Perhaps I am wrong. However, it was a London-based charity. I am glad that the hon. Member for Fulham has taken part in this debate. I think that it was his first contribution to the Committee stage of a finance Bill. I am glad that we have considered the subject of charities. The hon. Member represents a borough in which the charity with which I was concerned was active.
      The welcome which has been given on all sides of the House reflects the fact that, through the payroll scheme, we hope that there will be opportunities for supporting local charities which are identifiable by the employees of local firms. It is important that the national charities carry out their work and that the major charities receive the funds they need. I am sure that I am not the only hon. Member who can think of many deserving local causes which ought to be able to benefit from the payroll scheme, provided that they can approach local employers and make their case known. I hope that bodies such as St. Mary's church in Hitchin, the citizens advice bureau in Letchworth, Knight's Templar school in Baldock, and the Royston branch of the St. John Ambulance Brigade will benefit from these provisions. I hope that my hon. Friends and hon. Members opposite will encourage charitable activities in their constituencies to look to the scheme and to obtain funds which they need to develop and increase their charitable activities in the years ahead. I am glad that the clause has been welcomed in this way, and I commend it to the Committee.
      Question put and agreed to.
      Clause 26 ordered to stand part of the Bill.

    Clause 15

      CHARGE OF INCOME TAX FOR 1986–87
      Question proposed, That the clause stand part of the Bill.
      9.15 pm
      Mr. Jonathan Sayeed: I welcome the clause because it reduces direct taxation yet again. We should not look at it merely as a one-off. We must recognise that, since 1979, direct income tax in the lower tax band has decreased from 33 per cent. to 29 per cent. and has decreased to 60 per cent. in the upper tax band from 83 per cent.—plus the 15 per cent. investment income surcharge where applicable. At the same time, the rise in tax thresholds has been greater than the increase in inflation. This means that there is a greater incentive for people to work and for higher earners to remain in the
      104
      United Kingdom. This is happening against a backcloth of lower inflation, higher productivity and greater efficiency and is to be commended.
      We have heard many plans from the other parties. To gauge the validity of their suggestions, it would be helpful if my right hon. Friend offered some guidance on how these plans would affect the tax bands and tax thresholds as detailed in clause 15. I understand that the Liberal party and Social Democratic party proposals would increase public spending by £10 billion. That could be funded by increasing VAT by 11 per cent. to 26 per cent. A letter sent by the hon. Member for Stockton, South (Mr. Wrigglesworth), who is present, and the hon. Member for Truro (Mr. Penhaligon) who is no longer in the Chamber, to other alliance Members of Parliament states:
      "There are going to be severe public expenditure restraints for some years to come and a number of cherished hopes may have to be delayed.
      The truth is, unless we are prepared to argue for substantially higher taxation, which we do not believe to be feasible, we must be prepared to establish strict priorities for higher spending".
      The parties seem to agree: we do not want higher taxation. What then is higher taxation? Is £10 billion more higher taxation? Are the Labour party's plans for an extra £24 billion higher taxation? How "high" is higher taxation?
      Mr. Ian Wrigglesworth: Just for the record and for accuracy, may I make it clear that the £10 billion is the forecast increase in the fifth year?
      Mr. Sayeed: I was going to come to that point. I should not like to misquote.
      Mr. Alan Howarth: What will happen in the first year?
      Mr. Sayeed: I was going to deal with that point. My hon. Friend has reminded me of the last part of the letter, which states:
      "Real improvements in public sector pay are expensive—a 25 per cent. increase in nurses' pay would cost £750 million per annum; 10 per cent. would cost £300 million…25 per cent. increase in teachers' pay would cost £1·25 billion per annum; 10 per cent. would cost £500 million."
      The letter states that the alliance intends increasing public spending by 2 per cent. a year, which in the fifth year would be an extra £10 billion.
      What are the implications for the tax bands and tax thresholds if the proposals are not financed by an increase in VAT from 15 per cent. to 26 per cent.? I shall help my right hon. Friend the Chief Secretary in answering those questions by pointing out that there are some aspects on which the alliance has said it will not increase spending. No doubt the hon. Member for Stockton, South will tell me if I am wrong, but in an annex to the letter the alliance said that a spending standstill would be imposed on agriculture, law and order, defence and environmental services. I should like my right hon. Friend the Chief Secretary to exclude the extras that some of the more wild promises of the Liberal party and Social Democratic party suggest because the letter from the hon. Member for Stockton, South and the hon. Member for Truro specifically says that the alliance will not increase spending on agriculture, law and order, defence, and environmental services. That is a suggestion from the alliance.
      I would find it helpful if my right hon. Friend could explain the implications of the Labour party proposals on tax threshholds and tax bands. I have heard many different

      105
      figures. I have heard that it will cost £46 billion extra in the first year if the renationalisation plans are put through. Others suggest that it will cost £39 billion, and the usual figure quoted on a year-by-year basis is an extra £24 billion.
      I accept that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has protested that we have our figures wrong. I should like to know whether my right hon Friend has heard of any suggestions he has made to refute those figures, because I have not. I understand that the lower figure, £24 billion, will increase VAT from 15 per cent. to 41 per cent. I believe in the transfer away from direct to indirect taxation. I do not want to see a large increase in taxation. Therefore, will my right hon. Friend tell me the implications for tax thresholds and tax bands of an increase of £24 billion a year by the Labour party if it gets into office?
      Mr. Wrigglesworth: I want to take an entirely different view of this clause from that taken by the hon. Member for Bristol, East (Mr. Sayeed). This reduction of income tax is, in our view, misjudged on two grounds. Firstly, it is regressive and secondly, it is the least cost-effective way of increasing employment and economic activity. That is borne out by the comments which have been made by various expert commentators since the Budget. Typical of those comments were the remarks made by the Institute for Fiscal Studies on this cut in tax. It said:
      "of all the obvious ways of cutting income tax, this is the most regressive."
      Those with the least will get the least. That is good ground on which to oppose the strategy which the Government have decided upon in this clause.
      The evidence shows that less than one quarter of the benefit of tax cuts goes to the poorest half of tax units, as they are inelegantly called, in the working population.
      Mr. Cash: Are there, or have there been, any connections, of which the hon. Gentleman is aware, between the comments of the institute and those of the alliance or the party he represents?
      Mr. Wrigglesworth: The Institute for Fiscal Studies is widely respected by Conservative Members and has been widely quoted and used by Conservative Members over the years. Is the hon. Gentleman seeking to suggest that the institute has a political prejudice which leads it to reach judgments which are not independent or worthy of attention by Members from both sides of the House? There are no connections between that body and members of the alliance. As far as I am aware the body presents its reports and findings to all parties in the House and I know from the comments that it has made to me that it is the institute's intention to continue to do so, irrespective of the parties involved. The hon. Gentleman does it a great disservice by seeking to suggest that there is any link between it and ourselves.
      Single people with an income below £60 a week, under the cut of 1p in the pound, will gain only £0·01 per week as a result of the change in taxation. However, those with gross incomes of between £250 and £300 per week will gain, on average £2·08 per week, while single people on incomes of more than £350 a week will gain almost £2 a week despite the reduction in the real level of the high rate threshold—which, thankfully, is also contained in this clause.
      106
      Single earner couples earning below £60 a week will get nothing as a result of the change, whereas those earning between £250 and £300 a week will get £1·72 and those earning over £350 a week will obtain £2·36. Those figures illustrate the regressive nature of the proposal to cut income tax by 1p in the pound.
      Despite the pre-Budget speculation that relief would be concentrated on the lower paid through the thresholds or that a lower starting rate of tax would be reintroduced., the Chancellor threw out the sweetener of the 1p in the pound cut in the hope of a further cut of 2p next year and moving towards the 25p foreshadowed in the first Budget of the former Chancellor, now the Foreign Secretary, when he came to office.
      Despite those changes, the fact remains that the great majority of taxpayers are paying more than they did in 1978–79 as a proportion of average earnings. The average tax burden of income tax and national insurance remains higher. It is now 21·9 per cent. compared with 20·9 per cent. when the Government came to office. Those figures are for a married couple with two children under 11.
      Moving from the average figures to tax units, as they are inelegantly called, in answers to questions that I and the hon. Member for Birmingham, Perry Barr (Mr. Rooker) have tabled, it has been shown that for a married couple with only the husband working, with two children under 11, only those earning up to £77 a week or above £326 a week are now paying less tax as a proportion of average earnings than when the Government came to power. Some 13·18 million taxpayers as a whole are paying more and some 2·14 million are paying less. Even the Government's boasts about the taxation policies that they have pursued are not true. Broadly speaking, people are paying more tax now than when the Government came to office.
      Mr. Cash: Will the hon. Gentleman explain how his proposals will help in any way? It seems to me that he is suggesting that people should pay more, not less, tax.
      Mr. Wrigglesworth: I am suggesting that the proposals in the clause are entirely misdirected it one wants to help those who are suffering most as a result of the depression in the economy over the past few years—if one wants to help those who are suffering from poverty, the 3·5 million unemployed and those with large families. That is the least effective way to help those who are shouldering the major burden of the Government's economic policies; those who have been thrown out of work, particularly between 1979 and 1981, the years that the Government like to forget, when large sections of manufacturing industry were wiped out, which have not been replaced. As a result, many areas such as my own have 30 per cent. and 40 per cent. unemployment, and 70 per cent. of school leavers cannot get jobs. Those are the people whom the Budget should have helped, not those who are fortunate enough to have employment. This was the wrong priority, desirable though lower tax rates might be for everyone in the working population.
      9.30 pm
      The alliance would like to see lower tax rates in the long term, but with 3·5 million people unemployed, we should help those who are suffering most. The alliance budget proposals contained ways in which lower tax rates could be achieved more cost-effectively than those contained in the clause.

      107
      We oppose the cut in income tax, because that is the least effective way to create employment. It is the most expensive and the most sluggish means of creating jobs. The Treasury model shows that the 1p tax cut in the first year would reduce unemployment by only 6,000. After three years, 40,000 jobs would be created. All the models surveyed by the parliamentary unit at Warwick university showed a much higher public sector borrowing requirement cost per job created, a much smaller first-year impact and a bigger flow into imports and hence into current account deterioration.
      The Government are getting the worst of all worlds by pursuing this course. We have seen a current account deterioration in the balance of payments figures produced last month. I said in my speech on the Budget, and the alliance warned the Government before the Budget, that the fall in oil prices would give the country a major headache in its balance of payments because if the price of our oil exports is cut, inevitably that resource will make a smaller contribution to our balance of payments. The deterioration has already been shown in last month's figures, and it will continue.
      The cut in income tax was the least effective way of creating jobs. Ready reckoners based on the London Business School and the National Institute of Economic and Social Research models show that increases in public capital expenditure — the alliance advocated several ways in which that could be done—and cutting labour costs by reducing employers' national insurance contributions would have considerably greater employment benefits than the method chosen by the Chancellor.
      Before the Budget, the alliance advocated cutting employers' national insurance contributions by 10 per cent. in each of the rate bands. Such a proposal was also put forward by the CBI and by Conservative Members. In addition, the alliance suggested capital and current expenditure by the Government that could have been much more effective in creating jobs. Yet the Government chose to go down the least effective path of creating wealth and jobs by concentrating all the money that they had to give away on the cut in income tax. The Government have had an ideological obsession with reducing personal taxation, of which the principal beneficiaries have been the very rich. For the average taxpayer, the burden is still high.
      The Government have given away 10 times as much through tax cuts to those who work as they have spent on additional job creation methods. In this Budget, £100 million, as against £1 billion for tax cuts, is being diverted to employment creation methods. That is a miserably small amount, compared with the scale of the unemployment problem facing the regions and the central midlands. Many people in those regions are disappointed with the Government's attention to this problem. They are getting a clear message that the Government's policy is cynically to pursue those who have for their votes at the next general election rather than taking care of the havenots—those who do not have the jobs or the resources, and will probably never vote for the Conservative party anyway.
      Mr. Robert B. Jones: The hon. Gentleman is making a strong case for being opposed to the reduction in income tax. Will he vote against this measure?
      Mr. Wrigglesworth: As the hon. Gentleman knows, the alliance voted against this measure in the Budget debate. The clause also contains the changes in the tax thresholds for the upper rate bands, which mercifully have not been increased in line with inflation, and we welcome that. We do not intend to vote against the clause.
      We have made our intention clear. Our reason is central to the difference between the Conservative party—those in charge of the Government—and the Opposition. The majority of people, on all the evidence that we have—we shall see further evidence of this at the polls on Thursday—are more decent and concerned for their fellow citizens, particularly those disadvantaged by unemployment, than are Conservative Members. They will pay the price for their Government's policy in the ballot box not only on Thursday but in future general elections.
      Mr. Alan Howarth: I was glad to see the hon. Member for Truro (Mr. Penhaligon) come into the Chamber to support the hon. Member for Stockton, South (Mr. Wrigglesworth). I was beginning to be apprehensive that the hon. Member for Stockton, South was finding it a lonely business being a member of the alliance. He was bravely advancing arguments for increasing taxation—the more bravely because I am sure that he will have seen a Gallup poll which found that 69 per cent. of Liberal voters regard it as important or very important that there should be a cut in the basic rate of income tax. His posture is heroic, and no doubt that of the hon. Member for Truro will be so as well.
      Given the vehemence of alliance feeling on the subject, it was somewhat surprising to see how thin the alliance presence is in the Chamber. It may be that alliance Members are not here this evening because they are either in Ryedale or Derbyshire, West busy explaining to the electors by how much they will be reducing the rate of income tax if they have the opportunity. It would be no unfamiliar experience to sense a certain discrepancy in what is said by the two alliance parties at different times or by some hon. Members who are here and by other hon. Members who are away campaigning in by-elections. I hope that the hon. Member for Truro, if he catches your eye, Mr. Deputy Speaker, will be able to explain why I am being too cynical.
      However, there is a serious point. My rough calculation is that the cost of increasing public expenditure by £10 billion would mean either, as my hon. Friend the Member for Bristol, East (Mr. Sayeed) pointed out, raising the rate of VAT to 26 per cent. or—although my hon. Friend did not mention this—raising the present basic rate of income tax by 8p to 38p in the pound.
      I am surprised that the hon. Member for Stockton, South believes that to raise VAT to 26 per cent. or the basic rate of income tax to 38p would be a policy helpful for the unemployed. If the basic rate in income tax was increased, it would drive up the unit cost of employment in business, which is one of our main competitive weaknesses. How could that create conditions in which manufacturing or other firms were better able to employ people? That is a difficult argument to follow.
      Mr. Wrigglesworth: I listen with great interest to the hon. Gentleman because he is an expert in these matters. having supported the increases in VAT from 8 per cent. to 15 per cent., he is a little like an alcoholic lecturing us

      109
      on temperance. He knows that there is no way in which we would increase VAT or income tax to the levels that he is proposing.
      Mr. Howarth: The hon. Gentleman, who is always fair-minded, will also recollect that, when VAT was increased to 15 per cent., it was in order to make important reductions in the rates of income tax. Again, this is very important to his argument and to the point at issue between us; it was to shift part of the burden from direct to indirect taxation, thereby giving people in work better incentives to improve economic performance. That is how to make an impact on the unemployment problem that we need to deal with. I do not believe that a high expenditure, high taxation, policy would be good for employment.
      I wish to put to the House two other arguments in the context of my surprise that the alliance parties want to raise taxation burdens, as they say they do, and in support of the Government's policy of lowering the basic rate of income tax. An important argument for raising thresholds as opposed to lowering the basic rate was that that was the most likely way to make a worthwhile impact on the poverty trap. That is no longer the case now that changes in social security policy which the Government are introducing mean that benefits will be related to income after tax. That is a critical contextual change which means that there cannot be any strong remaining argument against the Government's policy of bringing down the basic rate. I am glad that the Government have set off decisively along this road. The basic rate was 33 per cent., it paused at 30 per cent. for some time, and now the Government have set off again decisively towards the 25 per cent. basic rate which I understand is their continuing objective.
      Not only is that the best way to promote improved employment, but there is another important argument in support of a lower basic rate as opposed to higher thresholds. If we are to have democratic discipline on public expenditure, large numbers of people should pay a small amount of tax rather than having society divided into two nations of taxpayers and non-taxpayers. We have seen the problems in local government. If significant numbers of voters do not have to foot the rates bill, they have no objection to local government expenditure rising beyond what is reasonable.
      On democratic, constitutional and economic grounds it makes abundant sense, if we are faced with the choice, to bring down the basic rate of income tax and at the same time to ensure that the legitimate objects of public expenditure, the importance and validity of which we all recognise, are paid for consciously by the largest possible number of people who are, on any reasonable judgment, in a position to pay tax because of the level of their income. Therefore, I very much commend the strategy expressed in clause 15.
      9.45 pm
      Mr. Penhaligon: I always love listening to Members campaigning against public expenditure when public expenditure is suddenly thrust upon their own constituencies. Of all the things that this Government have done, the one that succeeded in aggravating me more than any other was giving development area status to Stratford-on-Avon and leaving out my constituency, given that I am surrounded by 25 per cent. unemployment and am 300 miles from Westminster, and that Stratford knows little of either. It is one of the more remarkable decisions by the
      110
      present Government, yet I do not remember the hon. Member for Stratford-on-Avon (Mr. Howarth) coming to the House and protesting against the expenditure involved in his constituency. No doubt when it is in order, as I recognise that this comment is not in order at the moment, he will welcome the opportunity of catching your eye, Mr. Armstrong, to express his concern about that view.
      It has been said that there are not many alliance Members present, yet 8 per cent. of the parliamentary alliance is here. If that were so for the other parties, there would be 32 Conservative Members, and I can see only 14, and there would be 17 Labour Members. I can see only two of them, and I welcome them both to the debate.
      This is supposed to be a debating chamber, where we argue the merits of our case with enthusiasm, vigour and interest. It is not just a voting Lobby machine. We want to listen to the arguments, and we have made our views on this pretty clear. I have nothing powerful to add to the arguments presented by my hon. Friend the Member for Stockton, South (Mr. Wrigglesworth), because they are, in our view, quite overwhelming. One must make a judgment on each Budget relative to where one is. We could have an argument on how the Government had got where they were when they introduced the last Budget, and we could argue in some detail that there was no need for them to be in the economic difficulties that they faced, but, recognising that they were there, one must make a judgment relative to that.
      Our position is simple. The Chancellor of the Exchequer reached the conclusion that he had £1 billion left over that he could use for some purpose. We reached the conclusion that, given where we were, and not where we would like to think we were, of all the ways that one can imagine using that £1 billion, the Chancellor chose to use it in the way that was least effective in facing the real pressures on the country.
      The biggest single problem in Britain today, certainly for those of us who represent constituencies some distance from London, is unemployment. It is a progressive disease. As it goes on, one sees the public getting used to it, and this is in many ways the biggest problem for the long-term future of Britain. We see developing among great swathes of the community the belief that there will be no work for them ever again. If everyone took exactly the opposite view we might have a great deal of civil disturbance, but the fact that many people are beginning to believe that there will be no work for them again is an erosion of the spirit which, on the whole, has made this nation great. In creating that belief, the Government have a great deal to answer for.
      Let us suppose that the Chancellor is right in thinking that he has £1 billion to spend on something. In our alternative Budget we argued that there would be rather more than that, but let us accept just £1 billion. Every economic review on which we can lay hands suggests that it is difficult to think of a way of spending that £1 billion which would have less effect on the employment difficulties of the country than the one chosen by the Government.
      I have here the figures from the National Institute for Economic and Social Research's review of February of this year. I am an engineer by training and am a litle dubious about the precise nature of these figures that are produced by computer models, but they give one an idea of the thrust and trend of things and one cannot totally dismiss them. The institute believes that in the second year

      111
      the effect of the change in tax will be to cut unemployment by 17,000. It believes that 17,000 jobs will be created by the decison to reduce income tax by 1p in the pound. That is about 26 or 28 jobs per constituency. That is a negligible effect. It is the sort of increase that we have seen in as many weeks, leave alone months, as the terrible statistics have mounted up.
      The same review suggests that if the £1 billion is spent on public expenditure the number will increase to 27,000. One can make it a little more than that if one hones the way in which public expenditure is done, but that is 17,000 as against 27,000. If value added tax were cut by £1 billion, 30,000 jobs would be created, but if the national insurance contribution paid by employers were cut by 10 per cent., as we suggested in our alternative budget, 125,000 jobs would have been created. That would at least have covered up the increase which the Government have allowed over the past four or five months, even if it made no real impact on the mountain which has built up since the Conservative party came to power.
      I do not understand why the Government made the choice that they did. The alliance is in a peculiar position. On the one hand people accuse us of being irresponsible, and on the other they express surprise at our honesty in voting against the reduction in tax. It is rather brave of the Opposition. It certainly shows more bravery than the Labour party demonstrated. Decisions must be made in relation to the present and, as I have explained in some detail to the good electorates of Ryedale and West Derbyshire, if we had that £1 billion we would not have spent it in this way.
      The Government have made a mistake. More than anything else, they have demonstrated that our unemployment is not a matter of chance, something which they did not expect as their economic policies took effect, and that they do not care about unemployment. I do not know what influence the Chief Secretary had on that decision. That is not what my experience over the years in the various matters that we have talked and argued about would have led me to expect. Here, by their own fiscal judgment, the Government had the capacity to spend £1 billion, yet they chose to spend it in the least effective way possible for the greatest social problems that effects Britain. That is amazing. It is a comment on the peculiar last six or seven years of British politics, and it is a comment that is getting through to the British electorate.
      I am not one of those who pretend that the Government have money to spend as if there were no tomorrow, but the Government have made a mistake which they will regret. I hope that by next year's Budget they will take note of public opinion, which I suspect they are as well aware of as we are, and which is expressed when given the opportunity, that, given the state we are in, there is a better way of using that money.
      Of course, if the British people are asked whether they would like to pay less tax, they will say yes. I would not be the least surprised if quite a few people would say, if asked, that they should pay no tax at all, but we all know that a civilised society cannot be run, maintaining standards and giving people an opportunity in life, on that sort of basis. Therefore, I have no hesitation in saying that to reduce income tax by 1p in the pound is fundamentally flawed. It is wrong. It is one of the great mistakes that the Government have made.
      112
      We have already voted against that reduction and if a Division is called we shall no doubt vote against it again, although I am not convinced that that would serve any great purpose.
      Mr. Terry Davis: With clause 15 we come to what I expect the Government would regard as the centrepiece of the Budget. If the phrase had not been so overworked in recent months, I would have described it as a jewel in the crown of this Budget. There is no doubt from the Chancellor of the Exchequer's Budget speech and what has been said subsequently that the Government put all the emphasis of the Budget on the reduction in the standard rate of income tax.
      Indeed, I am surprised that the hon. Member for Bristol, East (Mr. Sayeed) did not make more of it. He spent much time talking about the public expenditure plans of the Labour party and the alliance. I recognise that there is a connection between public expenditure and taxation, but nevertheless the hon. Gentleman should have taken more pride in his own Government's policy.
      It is clear from the Financial Statement and Budget Report that the total cost of £935 million—taking account of advanced corporation tax, which is consequential—is the whole of the Budget and the Finance Bill; everything else is swings and roundabouts. Some people are on both the swings and the roundabouts, and some are on swings but not on roundabouts. There are different effects of different people in different places. We shall pursue the effects of different clauses in Committee, but I wish to make a few important points about this clause.
      First, I question the long-term effects of the Government's strategy. In effect, this tax cut is being financed by asset sales, as is the Government's public expenditure programme. I hope that the Chief Secretary will explain what will happen when all the assets are sold. There has been a great deal of public discussion about the consequences of revenues from North sea oil and gas running down as North sea oil and gas run out, but the sales of assets are bound to come to an end before our reserves of North sea oil and gas are exhausted. The Government must eventually face the critical problem of financing tax cuts in the longer term when all the assets have been sold.
      Secondly, the Labour party welcomes the boost to the economy. However, as the TUC pointed out in its economic analysis several weeks ago, tax cuts are not as cost-effective as public expenditure increases in reducing unemployment. The same amount of money used for a cut in taxes will not bring about the same number of new jobs as would the same amount of increased public expenditure. Indeed, tax cuts are more likely than an increase in public spending to lead to increased savings. They are also more likely to result in increased imports. Therefore, the boost to the economy will be less for every £1 billion of tax cuts than for every £1 billion of increased public expenditure.
      The clause provides for a reduction of 1p in the standard rate of income tax. Although that will cost the Chancellor £935 million, it means little to the individual taxpayer. Indeed, in his Budget speech the Chancellor described the cut as modest. It is important to remind the House about the precise benefits that will be enjoyed by the taxpayer. A married man earning £100 a week whose wife does not work will benefit by 26p a week. If that man earned £150 a week he would benefit by 51p; on £200 a week—

      113
      more likely to be expressed as £10,000 a year—by £1·22 and on £20,000 a year by £3·14. Those are Government figures that have been given in answers to questions and cannot be denied. There are many more people earning £100 or £150 a week than there are earning £20,000 a year, and for them increases of 26p or 51p a week mean very little.
      The benefits are especially small in comparison with the effects of previous Budgets. The Low Pay Unit, in its low pay review, drew attention to the effects of Finance Bills since 1979 on the marginal rate of tax, including national insurance, for those who are low paid, those on average wages and those who would be regarded as highly paid. In 1978–79, a low wage earner was paying as a marginal rate of tax, including national insurance, about 31·5 per cent. Before the Budget the figure was 35 per cent., and the effect of the Budget will be to reduce it only slightly.
      10 pm
      For the person earning average wages, the marginal rate of tax, including national insurance, in 1978—was 39·5 per cent. and it has been reduced to only 39 per cent. as a result of previous Finance Bills.
      The highly paid person has had a high benefit. In 1978 to 1979 that person was paying a marginal rate of tax of 83 per cent. and that marginal rate of tax has been reduced to 60 per cent.
      Mr. Sayeed: Hear, hear.
      Mr. Davis: The hon. Member takes pride in those statistics. He must therefore be taking pride in what can only be described as gross inequality, because it is grossly unequal that a person who is already highly paid should have the benefit of a reduction in his marginal rate of tax from 83 per cent. to 60 per cent. when someone who is low paid has had an increase in the marginal rate of tax. The hon. Member for Bristol, East takes greater pride in those figures than he did during the course of his speech, but we regard them as a scandal.
      The reason why the low paid and average paid people are less likely to benefit is that national insurance contributions must be taken into account. The low paid are worse off and people on average wages are only slightly better off in spite of the reduction in income tax from 33 per cent. to 30 per cent. as a direct result of the offsetting effect of national insurance contributions. The lower rates of tax for highly paid people are not offset by higher contributions to national insurance because there is a ceiling on those contributions, and if the highly paid people are receiving investment income that income is not subject to any national insurance contributions.
      A cut in the basic rate means greater benefits for the higher paid and widens income inequalities. That point has been effectively made, rather surprisingly in my view, by the Confederation of British Industry. It disagrees with the argument advanced by the hon. Member for Bristol, East about a reduction in the tax rate being an incentive. It also disagrees with the claim made by the hon. Member for Stratford-on-Avon (Mr. Howarth) that there are no longer any valid arguments for an alternative to a reduction in the standard rate of income tax.
      I do not think I have ever quoted any statement made by the CBI in the past. However, in its Budget analysis it regarded this clause as a debit and not a credit to the Government. The CBI stated:
      114
      "The personal taxation measures are regressive. The Chancellor's 1p reduction in the basic rate will benefit those at the top end of the first income tax band rather than those at the bottom—where, arguably, the need for incentive is greater. The 1p off the basic rate gives somebody on £6,000 a year a reduction of 0·1 per cent. in their tax burden. For somebody on £16,000 the reduction is 0·6 per cent. More must be done to help enterprise at the lower end."
      For once the CBI and the Child Poverty Action Group agree about something. The Child Poverty Action Group, like the Labour party, would prefer the Government to extend the long-term rate of supplementary benefit to the long-term unemployed. The Child Poverty Action Group. like the Labour party, would also prefer to increase child benefit by £3 a week. The Labour party also wants to increase pensions by £5 a week for a single person and £8 for a married couple. I will not say anything else about that as it would be out of order when discussing clause 15.
      Even within clause 15 the money could have been used differently. The Government could have given higher allowances. The hon. Member for Stratford-on-Avon does not think there is any valid argument left for higher allowances. I must tell him that the Birmingham chamber of industry and commerce, which is not well known as a Socialist bastion, does not agree with him. In its pre-Budget representations, it advocated in effect that there should be higher allowances.
      The London chamber of commerce and industry would go further still. In its pre-Budget representations to the Chancellor, it argued not for a reduction in the standard rate of income tax or higher allowances but for what it described as small income relief similar to the age allowance. The Child Poverty Action Group also argued for that alternative if the Government wanted to use £935 million to alleviate poverty within the tax system. However, those options are not before us, although they would be supported by all Opposition parties, by some Conservative Members and by a wide range of bodies—a genuine consensus—outside the House.
      There is a straightforward choice for the Opposition. Either we vote against the 1p cut in the standard rate of income tax or we do not. The Labour party will not vote against it. We have made it clear that we oppose the Budget strategy. We voted against it and we voted against the Second Reading of the Bill. We believe that the Budget and the Bill, to the extent that it puts the Budget strategy into effect, are wrongheaded and misconceived because they virtually ignore the twin problems of poverty and unemployment. We have made it clear that we would give greater priority to higher pensions, a higher child benefit and higher benefits for the long-term unemployed—those who have been unemployed for more than 12 months. We would help people who are in the greatest need and who have least, and we would do it at the expense of those who have most. We define as those who have most the 5 per cent. of taxpayers who have enjoyed the real benefit of successive Budgets and Finance Bills from the present Government. I refer to the people who pay the higher rates and not the standard rate of income tax and have benefited from cuts in taxation on capital as well.
      We should also be clear that voting against the reduction in the standard rate of income tax tonight, is not voting for higher taxes to be paid by the richest 5 per cent. because, for once, they have been excluded from the 1p reduction. A vote against the reduction will simply be presented, or rather misrepresented, by the Government as a vote against lower taxes for people on lower incomes.

      115
      I am not clear about what the Liberal party and the Social Democratic party plan to do at the end of the debate. I listened to the hon. Member for Truro (Mr. Penhaligon), who described the alliance as brave to have voted against a reduction in the standard rate of income tax previously. It appears, however, that there is a limit to its courage or at least that it recognises that it is mistaken, or perhaps it is just inconsistent. I listened carefully for some explanation of why it does not propose to vote against this proposed reduction tonight. We had an explanation not from the hon. Member for Truro but from his twin, the hon. Member for Stockton, South (Mr. Wrigglesworth), who told us that the alliance would not vote against clause 15 because, unlike the Budget resolution, it ensures that benefit is not given to people on the highest incomes. I ask the hon. Member for Stockton, South to explain now the difference between clause 15 which he will not vote against, and the Budget resolution which he voted against on 24 March.
      Mr. Penhaligon: None at all.
      Mr. Davis: We have a split in the alliance already. The hon. Member for Truro says that there is no difference at all, and he is right, whereas the hon. Member for Stockton, South told us earlier that there is a difference, and he is wrong. There is no difference. The wording is exactly the same. The hon. Member for Stockton, South can wriggle as much as he likes, but he cannot get away from the fact that he claimed that there was a difference when there is none. Perhaps he would like to get to his feet now and tell us the difference. He is avoiding the invitation. I think that we can see where he stands.
      The Labour party prefers the more difficult course of explaining to the electorate that we are not opposed to lower taxes and a higher standard of living for people on low incomes. On the contrary, we want to use the money better and in ways that will give the greatest help to people on the lowest incomes; and we would have done other things to help the people on the lowest incomes, including those who pay the standard rate of income tax.
      The alliance forgets too easily that many people paying the standard rate of income tax are very lowly paid. Many of those paying the standard rate of income tax have incomes that are below the level of supplementary benefit, and the alliance voted against the cut in taxes paid by those people.
      The aim of the Labour pary is to unite working people in the wider sense, including those who need to work and cannot find jobs and those who used to work and have now retired. We refuse to play the game of setting the working poor against the non-working poor. We refuse to jump into the Tory trap with the Liberal party and its allies. We will not oppose this small step towards returning to the lower level of tax to which the low paid were subject at the time of the last Labour Government—a cause supported at the time by the Liberal party and by the hon. Member for Stockton, South in his previous role as a Labour Member of Parliament. It is for them to decide whether they will vote against this tax cut tonight, but the Labour party will not vote against it.
      The Chief Secretary to the Treasury (Mr. John MacGregor): I agree with the hon. Member for Birmingham, Hodge Hill (Mr. Davis) that this is a
      116
      significant part of the Finance Bill. Indeed, the short debate that we have had is in direct contrast to the significance of clause 15 in the Bill as a whole. It is not by any means the only significant part, and we shall debate many other significant parts of the Bill in Committee. Nevertheless, it is a key part of the Bill in terms of the amount of tax forgone in the forthcoming fiscal year and of our overall strategy.
      I wish briefly to remind the Committee of some of the reasons that we put forward for clause 15. In so doing, I intend to refute the comments made by the hon. Member for Stockton, South (Mr. Wrigglesworth).
      First, the record of the Government on tax thresholds is extremely good. As I think is now recognised, we have increased the tax thresholds by 22 per cent in real terms. A good part of that took place in last year's Budget and in the Budget of the year before that. When the hon. Member for Stockton, South talks about the combination of tax changes in this Budget being regressive, I remind him that the arguments are not all one way in relation to thresholds. It is worth bearing in mind that, if the thresholds were raised by the amount that he has in mind, a good proportion of the people who would benefit largely from being taken out of the tax net are single earners and part-time earners. There is no clear argument for saying that one helps the less well-off all the time simply by raising thresholds and not dealing with the basic rate.
      Secondly, there is the argument about international comparisons that I quoted on Second Reading. It is clear now that we do not do at all badly on the thresholds and the starting point of income at which one pays tax; we are, however, out of line on the basic rate.
      Thirdly—this is an important part of the argument—is the question of the self-employed and unincorporated businesses, 90 per cent. of which pay their tax at the basic rate. When one is trying to encourage the self-employed and unincorporated businesses, it is important to recall that the marginal incentive is what matters to them in building up their business. That is why, once again, we are acting on the basic rate.
      This leads me to the main argument for concentrating the bulk of the tax relief this year, over and above indexation, on the basic rate. As the hon. Member for Stockton, South pointed out when quoting some figures given to him in a parliamentary answer, the group that has perhaps least benefited from tax changes in recent years is those in the income bracket of approximately half average earnings to about twice average earnings. It is on that group that the combination of changes most concentrates this year—and rightly so, because I believe that their time has come. It is significant that they are 95 per cent. of all taxpayers.
      There are two important reasons for concentrating on that group this year. First, it is important to consider the marginal rate of tax that individuals are paying and the incentives that are given to them to earn more. It is the basic rate that is the marginal rate for 95 per cent. of all taxpayers and for them, therefore, it is an important fact that their incentives are improved when marginal rates are reduced. Secondly, it is still not desirable that for so many of our fellow citizens on modest incomes so much—38 per cent.—is taken from the pay packet before it reaches the pocket. That is why, notwithstanding the academic experts, our proposal for the basic rate is so

      117
      popular. That is why I suspect that the Opposition parties are in such difficulty in deciding how to play this tax change.
      10.15 pm
      As my hon. Friend the Member for Bristol, East (Mr. Sayeed) rightly said in opening the debate, the reduction in the standard rate has been a continuous process. In our first term, the Government reduced the rate from 33 per cent. to 30 per cent. and it is now to be reduced to 29 per cent, which is halfway to our long-term objective of a standard rate of 25 per cent. There has been a continuous process also for incorporated small businesses—I have already referred to the self-employed and unincorporated businesses. Although there is to be only a 1 per cent. reduction in the small business rate of corporation tax this year, it compares with the 42 per cent. rate that prevailed when the Government came to office. There has been a significant reduction in the rate and, as my hon. Friend the Member for Bristol, East has said, it has been a continuous process.
      The hon. Member for Stockton, South argued that we are showing entirely the wrong priority this year. He endeavoured to show that there have been no real reductions in tax on most incomes since 1979. There was a curious paradox in his argument because he was trying to show that tax should not be reduced this year while complaining that in his view the rate of tax was still at the 1979 level. Income tax liabilities in 1986–87 will be about £8 billion lower than 1978–79 rates and allowances indexed to 1986–87 levels. This means that those earning £5,000 a year or less—modest incomes—have had their tax bills reduced on average by about 19 per cent. under this Government. Everyone will pay less income tax in 1986–87 than under a 1978–79 indexed regime. A married man on average earnings would pay £6·91 more per week in income tax under an indexed 1978–79 regime.
      Mr. Terry Davis: Does the Minister agree that national insurance is an important part of the calculation and should be taken into account, and was taken into account by the previous Chancellor of the Exchequer?
      Mr. MacGregor: I have seen all the figures that have been given in answer to various parliamentary questions on this issue. I accept that we have not yet succeeded in bringing down the combined rate to the level that we would wish. However, the 1p change in the basic rate of tax is a further move in that process.
      It is important to disinguish national insurance contributions from income tax. National insurance contributions are made on a pay-as-you-go basis to pensions, on which we have preserved our election pledges—indeed, we have done more than that. If the hon. Gentleman's intervention reveals the line that he will take, I hope that he will not be so churlish as he was when replying to the debate, but will positively support what we are trying to do in reducing the basic rate of tax this year.
      Mr. Davis: I am sure that the Minister would not wish inadvertently to mislead the House of Commons. He has said that the combined rate has not been reduced by as much as the reduction in income tax. In fact, it has increased for many, especially for those on the lowest incomes.
      Mr. MacGregor: In making comparisons with 1978–79, it is important to take into account increases in earnings and changes in take-home pay. The marginal rate of tax has been reduced from 33 per cent. to 29 per cent.
      Mr. Davis: That has been more than offset.
      Mr. MacGregor: For some, yes. However, the hon. Gentleman will be aware that my right hon. Friend the Chancellor of the Exchequer made changes last year to national insurance contributions to benefit the lower income groups.
      Mr. Davis: For the low-paid and those on average earnings, the marginal rates of income tax and national insurance, when taken together, has not declined. Indeed, it has increased for the low-paid, and the position is the same for those on average earnings.
      Mr. MacGregor: No. The important point is the proportion of income and earnings that is taken away in the combined national insurance contributions and tax. Although the figures have not changed as much as I should like, that is the course that we are following, and that is why we say that the long-term objective is to get the basic rate of income tax down to 25 per cent.
      The hon. Member for Stockton, South, rather surprisingly, said that the principal beneficiaries of the change this year would be the very rich. He must know that we have quite deliberately kept the increase in the thresholds for the higher rates below indexation to ensure that that does not happen this year. Indeed, I join the hon. Member for Hodge Hill in saying that the hon. Gentleman gave a tortuous and remarkable answer when explaining why he was not going to vote against the clause—because he was in favour of the higher rate elements in the clause. I accept that most are not indexed, but there has nevertheless been an increase. Yet again, we have seen a typical example of the hon. Gentleman trying to have it both ways.
      In reality, the hon. Member for Stockton, South does not want to vote against the clause for two reasons: first, he does not want to highlight the fact that the SDP and the Liberals are trying to oppose the 1p reduction in the basic rate; and secondly, he could not muster enough support among his colleagues to vote against it.
      On Second Reading, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that there were five other ways in which the Government could have dealt with the £1 billion-odd that is involved in cutting the basic rate. He listed increasing public expenditure, raising child benefit, raising tax thresholds, introducing a reduced rate band and cutting the basic rate. He then concluded, just like the hon. Member for Hodge Hill, that by far the worst of those options was to cut the basic rate. He seemed to make it clear that he would have preferred any of the other options.
      In view of that, and the whole way in which the hon. Member for Hodge Hill spoke today, it is astonishing that the latter does not intend to vote against the clause. It is even more remarkable that the Labour party has given a pledge not to put the basic rate back to 30p. Thus, although Labour Members rail against it and argue that it is wrong, and the wrong use of priorities, they do not have the courage to fight against it or to put it back to 30p. That shows the paucity of their arguments and the frailty of their attack on the clause.

      119
      In not voting against the clause, the Labour party is accepting that it will forgo more than £1 billion in tax over a full year. Consequently, it is relevant to look at its spending programme my hon. Friend the Member for Bristol, East asked me whether I had received any further suggestions from the Labour party to refute the £24 billion spending programme. The answer is that I have not. The Labour party does not have the courage to vote for higher taxes, but it wants much higher spending.
      Mr. Terry Davis: We are in favour of higher taxes for those who can afford them. We have made it clear that we will recover the £3·6 billion that has been given to the Chief Secretary's rich friends.
      Mr. MacGregor: That £3·6 billion has already been spent many times over.
      Mr. Davis: I have already told the Chief Secretary how we will spend that money. We will spend it on increasing the pension for a married couple by £8 a week, on increasing the pension for a single person by £5 a week, on increasing child benefit by £3 a week and on extending the long-term rate of supplementary benefit to the long-term unemployed. If the Chief Secretary costs that, he will find that that £3·6 billion more than covers it.
      Mr. MacGregor: Of course, that is a long way short of £24 billion. However, I must get on, as I know that the House is anxious to come to a conclusion, and we have debated these issues before.
      The hon. Gentleman has not even costed his £3·6 billion correctly. The hon. Gentleman is talking not about someone's rich friends but about a group who will benefit considerably from the 1p basic rate change. As he knows, that means a marginal rate of 70 per cent. for anyone with a taxable income above £18,600. Those are the people who will have to cough up to meet the cost of the £3·6 billion.
      I turn to the point raised by my hon. Friend the Member for Bristol, East about the SDP and the Liberals. Previously the Liberals had the courage to vote against the 1p reductions. My hon. Friend asked me to look at the size of the expenditure programme that the Liberals and the SDP have put forward. He quoted from a letter which was published in The Times. For the benefit of many of my hon. Friends who were not present in the House, I shall quote from it:
      "It is understood that Alliance leaders have been stung into tough action by the Government's damaging charge that Labour commitments could cost as much as £24,000 million."
      At least the hon. Member for Stockton, South has learned the lesson of the dangers of committing oneself to a heavily overspent programme in a way that the Labour party has not. That stung the hon. Gentleman into consulting his colleagues. I understand that that is what happened. The hon. Gentleman and the hon. Member for Truro (Mr. Penhaligon) sent a joint letter which stated:
      "There are going to be severe public expenditure restraints for some years to come and a number of cherished hopes may have to be delayed.
      The truth is, unless we are prepared to argue for substantially higher taxation, which we do not believe to be feasible, we must be prepared to establish strict priorities for higher spending, to consider phasing in the more expensive changes, to identify areas where savings can be made, and to seek new solutions to problems."
      120
      Is the article in The Times correct? Have the hon. Gentlemen sent a letter to their spending colleagues?
      Mr. Penhaligon: That is the truth.
      Mr. MacGregor: It is now on the record.
      The hon. Member for Truro was kind to me earlier. May I repay the compliment by saying that I always enjoy my debates with him, because at least he is frank and honest. However, I must tell him that some of his hon. Friends are giving him a reply, and it cannot be an encouraging one. This morning, we read in the newspapers that an SDP policy group—perhaps that is only the SDP and is not directed at the hon. Member for Truro—proposes a scheme for distributing shares in nationalised industries free to every member of the public instead of privatising them through a stock market flotation.
      Leaving aside whether that is a sensible way to proceed, we must question, if we give away assets for nothing and continue to tax actual earnings more heavily—that is what the Liberals and the SDP propose—whether people value things when they get them for nothing. It has been made clear in the same article that, in line with the recent injunction by alliance economic spokesmen, policy proposals have to bear in mind the tightness of funds if the alliance parties were to gain a share of power. It is stressed that this spending has yet to be allocated a place in the SDP's overall list of priorities.
      So now we have a new concept, a new way of fudging, of getting out of the gap between spending and raising the tax. The alliance would put forward a proposal, so that everyone would sit up and take notice, and say, "We do not know whether we can afford it." That is typical of the SDP and the Liberal party. They try to be all things to all men but do not face up to the need for real choices.
      The decision by the alliance to oppose the cut this year in the basic rate will not take it far on the road to an extra £10 billion. My hon. Friend the Member for Bristol, East asked what that would be. It represents another 9p on income tax in the fifth year. The other policies which the alliance put forward will not achieve much economic growth. We must still expect a substantial increase in taxes.
      We have tonight seen the Labour party, the Liberal party and the SDP wriggling all over the place to explain why they will not vote against clause 15; they do not know how to explain away their position. Our position is clear. We are in favour of clause 15. We are in favour of the basic rate cut to 29p. We believe that it is right for the economy. That is why I commend the proposal to the House.
      10.30 pm
      Sir Brandon Rhys Williams: I would not wish the Committee to agree that the clause should stand part of the Bill without making two points that I have made many times in recent years. It is easy to see the difficulties of the Opposition parties in finding the courage to vote against a cut in income tax, but I question whether the Government will be able to finance the redistribution of income at the level that the public expect with a further 4 per cent. reduction in the contribution of those in work.
      First, I believe that it is humbug, now that we have put the national insurance contribution on an earnings-related basis, to keep it as a contribution separate from income

      121
      tax. I believe that the income tax and NIC should be combined, not in a single income tax but in a single national insurance contribution, so that the income tax becomes the insurance contribution made by every citizen.
      Secondly—I first made this point in 1971 when I was on the Committee on the Finance Bill—the Government's objectives should be to give every individual the maximum possible incentive to create wealth and to simplify the tax system as much as possible. Therefore, contrary to the comments of the hon. Member for Stockton, South (Mr. Wrigglesworth). I believe that
      122
      the Conservative's Government's objectives should be to abolish higher rate tax altogether. I hope that that remark will be quoted. I hope also that my right hon. and hon. Friends will bear in mind the fact that this would be a reduction in taxation from which everyone would gain and no one would lose.
      Question put and agreed to.
      Clause 15 ordered to stand part of the Bill.
      To report progress and ask leave to sit again.—[Mr. MacGregor.]
      Committee report progress; to sit again tomorrow.

  Power Plant Engineering (Gateshead)
  Motion made, and Question proposed, that this House do now adjourn.—[Mr. Sainsbury.]
  10.32 pm
  Mr. Bernard Conlan: I shall address my comments to particular problems that affect my area, but they concern the whole of the power plant engineering industry. For many years, there has been a general shortage of orders, recurring redundancies, little confidence and a severe drop in the morale of those working in the industry. Those problems affect the industry nationwide.
  In 1984, more than 1,200 people were employed at Northern Engineering Industries' nuclear power plant. Today, 137 people are employed there. That is a substantial decrease. I doubt that the company's viability will continue with such a small workforce at that major plant. This will be the third redundancy announcement since December last year. If the problems continue, the company will bleed to death.
  The problem is not new. Indeed, a Central Policy Review Staff report in 1976 said that the industry faced a serious problem. The report pointed out that the power plant industry faced grave threats and added:
  "There must be a Government commitment to a firm, steady ordering programme, starting as soon as possible, for the home market."
  Little has been done about the problem since that statement was made in 1976.
  The industry is faced with the difficulty that the Sizewell inquiry has been continuing for a long time and that the inspector has not yet reported. If newspaper reports are to be believed, he will not present his report until later this year. It is clear that the inspector's recomendations will be controversial and that the Government—the same would apply to any Government—will not be prepared to tackle the issue until after the next general election. That being so, it is clear that conditions in the industry will continue to get worse, and firms such as that in my constituency will disappear.
  Should this local firm go out of existence—remembering that there have already been 1,200 to 1,300 job losses in Gateshead—the problems for the unemployed in the area and for the town will get worse. It will also present more problems for the nation, because the skilled teams needed to construct the high technology boilers and other equipment that comprise modern power stations will no longer be available. Britain will then have to turn to the Americans or even the Japanese. What a sad day it will be if we, with our proud record in the construction of highly efficient power stations, have to look overseas for our requirements.
  I have for long believed that we should have a sensible mix of nuclear and conventional power stations. The recent tragic events in the Soviet Union should not deter us from pressing ahead with our nuclear programme. Our designs are quite different from theirs, including the station at Chernobyl. The AGRs produced at Gateshead have a safety record second to none, although there are doubts about the safety capacity of the PWRs, and that is the issue at Sizewell. We have only to recall the events at Three-Mile Island to realise that such doubts are well founded. Unless the Government are prepared to take firm
  124
  and positive action to save the industry, we will live to regret the passing of one of the leading and major industries in this country.
  The nuclear power plant of Northern Engineering Industries is possibly one of the most modern in Europe. In 1982 the Prime Minister was responsible for the official opening of the new nuclear facility. I recall that on that occasion, in declaring the new facility opened, she promised the workers—more than 1,200 people then—that they would have a bright and promising future. What hollow words they were. What was the bright and promising future that the Prime Minister promised to the workers in Gateshead a mere four years ago? Nearly 1,200 of those workers have already lost their jobs. Those words sound pretty hollow now in the light of experience.
  At about the same time, in a great roar and fanfare of trumpets, the Government announced that it was their policy to embark on a programme of ordering one new nuclear power station a year up to and including 1991. What has happened to that policy? Not only have the Government not fulfilled that promise; they have not ordered one station. Indeed, the major redundancy in Gateshead occurred in 1984 when work on the Torness and Heysham power stations ran out. The Minister will not want reminding that it was not his Government who provided the work for Gateshead. It was provided by the Labour Government in 1978, who took the initiative and ordered those two new power stations.
  What shallow and hollow words we have heard from the Government about providing work for this important industry. I have carried out some research, and I have found that since 1979, bearing in mind the fact that the Government have not provided work for any one power station, NEI has contributed to Tory party funds—if not to the Tory party funds, it has contributed to the front organisations—more than £200,000. In view of the Government's record for providing work for NEI, the shareholders of that company might consider that the £200,000 has not been cost effective.
  My final plea to the Minister is that he must reappraise the position of this vital industry. Tomorrow the Minister should place on his desk the 1976 report of the Central Policy Review Staff and consider the report's finding that the industry requires a steady improvement.
  10.44 pm
  Mr. David Clelland: People are nervous, if not afraid, as a result of the Chernobyl disaster, and understandably so. The full realisation of the devastating and deadly effects of unleashed nuclear energy has been brought home—literally—by an accident in a part of the world previously unknown to most people. This, following the accident at Three-Mile Island in America and constant doubts surrounding the nuclear installations at home, has quite naturally made people, to say the least, sceptical about the advisability of continuing with the development of nuclear power stations in this country on their very doorsteps.
  Until such time as we are able to convince them—that can only be when we are convinced—that nuclear energy can be not only harnessed but kept harnessed, then why should we expect them calmly to accept future developments of this kind? Despite the continued reassuring noises from Ministers, and the Prime Minister

  125
  herself, all the signs are that the ordering of any new nuclear power stations must be thrown into doubt, or at best delayed, as a result of Chernobyl.
  Where does this leave those who work on the manufacturing and production of power station equipment? That is what they went to know, and an answer for NEI is urgently required. My hon. Friend the Member for Gateshead, East (Mr. Conlan) has already outlined the decline in the work force over the past four years. This followed the official opening of the facility in 1982 by the Prime Minister herself, who on that occasion forecast a secure future for the company.
  The future was not, and is not, secure. More highly skilled men and women will be thrown out of work on Tyneside. Unless and until the Government have the good sense to plan properly for the future energy requirements of the nation, based on fuels and technology that are both plentiful and proven, the electrical engineering industry will be unable to plan and maintain the present skilled work force that has been so badly depleted over the past seven years.
  Even the present functioning nuclear power stations could be providing more work if they were being properly maintained instead of being allowed to fall into disrepair and giving rise to concern. Even so, the skills of the work force at NEI are not entirely restricted to nuclear-related production, and the inventive and technological genius of the technicians are not entirely confined to nuclear energy. They can contribute to the provision and refurbishment of conventional stations and, more important perhaps, to the much needed, but sadly lacking, research into alternative and safe sources of energy.
  The northern region is still reeling under the blow of losing the auxiliary oiler replenishment vessel, which was so badly needed by Swan Hunter. This threatens to aggravate an already record unemployment level, to say nothing of the human suffering that that implies.
  While the local authorities continue to make every effort to preserve and expand employment, by attracting companies such as Nissan and Komatsu, through grants and incentives to new and existing business, every job that they attract is swallowed up by yet more bad news resulting from the Government's neglect to recognise properly the skills that we have, and the contribution that those skills can make to a properly planned future.
  The problems faced by NEI are symptomatic of the problems of the electrical engineering capacity. In the not-too-long-term future, we look forward to the return of a Labour Government that can fully utilise the skills of our people by expanding our economy and planning our energy needs. In the meantime, we look to the Government to cast aside the dogma and begin doing something positive for the industry and the country. I hope that the Minister will give a satisfactory reply to the points that have been raised.
  10.54 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I thank the hon. Members for Gateshead, East (Mr. Conlan) and for Tyne Bridge (Mr. Clelland) for raising a question which is obviously very much in their minds. I shall try to respond to the points that they have raised.
  I was particularly interested to hear the hon. Member for Gateshead, East recount some of the history of the industry. He was right to point out that his remarks were
  126
  geared towards describing the factors which have affected the whole power plant industry and not just one section of it. He was also correct to review the order position and to consider projections for the future.
  The hon. Member for Tyne Bridge referred to a phenomenon which many of us have shared—the need to keep together groups and teams of skilled people so that a capability is not lost to the economy, not just for local but for national reasons. Therefore, I shall consider with them how the United Kingdom power plant industry has developed. We all agree that it has been through a very difficult period, with a low rate of home ordering for more than a decade. I shall begin by reviewing the situation on that front.
  In the 1970s the utilities were commissioning plant at the rate of about 2,000MW per year, and this represented a major workload for the United Kingdom plant manufacturers in the 1960s and the 1970s. Of these orders some 58 per cent. were won by GEC, while some 42 per cent. went to Northern Engineering Industries in the northeast. However, since 1973 only three orders have been placed: the Drax completion coal-fired station and the Heysham II advanced gas-cooled reactor station which were won by NEI, and the Torness AGR station which went to GEC.
  So what are the prospects for the future? Of course, proposals for new generation plant must come from the electricity supply industry. The Government will examine each consent application on its merits. The Scottish boards are unlikely to need new major generating capacity for a number of years.
  Power stations are usually built to provide generating capacity to meet demand, either because existing power stations have reached the end of their economic life and so have to be replaced or because of a net increase in demand. However, Sizewell B pressurised water reactor power station was originally put forward as a substitution project, since the cost of generating power from the proposed new station showed an economic return compared with generation costs from existing power stations. Since Sizewell B was first mooted, demand for power has increased and this has turned the original case for substitution into a requirement for replacement capacity.
  Nevertheless, the Central Electricity Generating Board has stated that it does not intend to seek consent for other new power stations until the outcome of the Sizewell inquiry is known. Sir Frank Layfield has been faced with a formidable task in carrying out the inquiry and in compiling his report. The inquiry was extremely wide-ranging, lasting 340 days—the longest ever planning inquiry in this country. Sir Frank has indicated that he hopes to deliver his report to my right hon. Friend the Secretary of State for Energy in September of this year. My right hon. Friend has said that he will reach a decision as soon as possible after receipt of the report, and arrangements are being made for the Department of Energy to make an urgent examination of the report when it is available.
  As hon. Members have noted this evening, any discussion which mentions nuclear energy must now take note of the Chernobyl disaster in the USSR. Although it is not part of the main topic of this debate, I am sure that hon. Members would wish me to comment. There are three major points to make on the relevance of the disaster to the United Kingdom.

  127
  First, the plant at Chernobyl is unlike any reactor type operating or planned in the United Kingdom, including the existing Magnox and AGR stations and the proposed PWR station. In the United Kingdom our system of licensing for nuclear plants puts safety first, and under that system a station such as Chernobyl would simply not have been found remotely acceptable.
  Secondly, inquiries such as that into Sizewell B are not a feature of life in the Soviet Union. This Government decided that there should be a full public inquiry at Sizewell, at which any body with an argument against nuclear energy was able to put forward the fullest evidence and the fullest reasons for its point of view.
  Thirdly, safety of course is, and will remain, the paramount consideration in the development of nuclear power in this country. Provided nuclear power stations can be built safely, and to time and cost, they offer very real economic benefits through cheaper electricity for both domestic and industrial users.
  If formal consent were granted, Sizewell B would provide the opportunity for major orders for United Kingdom manufacturing industry earlier than any other possible new station. A very high proportion of the hardware would be supplied by British companies; the CEGB has estimated that only 7 per cent. of the total cost of the Sizewell B project would be for contracts placed abroad, and only about half that would be for plant and equipment.
  The CEGB is also considering the possibility of ordering a new coal-fired power station for commissioning in the mid-1990s, but has not yet made a specific application. A reference design for a new type of 900 MW unit — compared with the present largest size in the United Kingdom of 660 MW—which might be used for such a station is being developed by the CEGB, the NCB and manufacturing industry. In more general terms, there will be a need for new power stations to replace existing outdated capacity in the 1990s and beyond.
  Taking all these prospects together, I believe that, in the medium term, the United Kingdom power plant manufacturing industry can look forward to improved business prospects on the home front.
  That having been said, the industry's concern about the home ordering programme is understandable, but the timing of orders must remain the responsibility of the generating boards. I must emphasise that any new power station which was not fully justified on economic grounds could be expected to have an undesirable impact on electricity prices, which would adversely affect both the domestic and industrial user, the power sector included.
  Turning to the overseas market for power plant which is an integral and important component of order prospects, this has naturally been an important part of the activities of United Kingdom companies over the past few years. For example British companies have undertaken major power station projects in the Sudan, in Korea, Hong Kong, South Africa, India and Brazil. There have also been many more minor projects, which still involve substantial United Kingdom content, of which the supply of plant and equipment from United Kingdom factories and the provision of design and engineering services is worth collectively many millions of pounds. Total exports from
  128
  the United Kingdom power generation machinery and equipment sector in 1985 amounted to £675 million, which shows an excellent performance.
  The Government have placed considerable emphasis on helping United Kingdom companies to win business overseas, and especially in developing countries. The financial package is just as important as the price and quality of the equipment offered to overseas clients. The financial expertise of the City has been used by British compaies in the power sector—as by other capital goods exporters—to get together commercial financing on the best possible terms. I pay tribute to the financial services available to our exporters. However, there has been an increasing tendency in recent years for major projects overseas to be won with soft finance. While the Government deplore this growing international trend and would prefer to see an end to mixed credit activity, we are determined that our companies should not be at a disadvantage. Accordingly, the Government announced to the House last November that we intended to provide a new soft fund, in addition to the existing system of grants under the aid and trade provision. Our objective is to double the business won by British industry with the help of mixed credits over the next few years from the present level of about £250 million a year to about £500 million a year.
  Traditionally, the power sector has been a major beneficiary from ATP. From the date of introduction of the scheme in 1977, over 20 projects in the power sector have been won with ATP. This amounts to about 40 per cent. of all the ATP granted to British companies. This large proportion reflects the importance of power projects in infrastructure development. Developing countries cannot progress unless they have adequate, secure and reliable generation of electrical power, with the necessary systems to transmit and distribute that power to industry, to commerce and to domestic customers.
  Although the market for major power projects overseas has been very slack over the past few years, showing a considerable decline from earlier levels, I understand that most commentators in this country and abroad see an increase in activity in the years ahead, reflecting the needs of developing countries. Falling oil prices and the trend towards lower world interest rates will provide an additional boost. The Government will respond by continuing to support the power sector through ATP, including the use of the soft loans facility. It is open to companies in the sector in Gateshead to benefit from our support, as it is to companies elsewhere.
  As the industry has looked increasingly overseas for its livelihood in recent years, so it has become apparent that to compete effectively major investment has been needed to update and improve products, production equipment and methods and the working practices of the industry. The industry has responded with large investment programmes, assisted where necessary by the Government under the provisions of the Industrial Development Act and the Science and Technology Act. Since April 1979 support for the power plant engineering industry throughout the country under the Science and Technology Act has amounted to some £21 million with some £3·5 million of that amount offered to companies in he Gateshead area. With Government assistance at an average of around 25 per cent. this would represent an investment in innovative products and processes of more than £80 million by the industry; and I pay tribute to that.

  129
  This is just the tip of the iceberg. Millions of pounds more have been invested by the industry without recourse to the Government.
  Under the Industrial Development Act and its predecessor, since August 1979 support offered for investment schemes within the power plant engineering industry has amounted to some £24 million, of which £2–5 million has been offered to Gateshead firms. This assistance is specifically aimed at capital regeneration on both regional and national benefit grounds. With an average Government input of some 10 per cent. it means that the industry has invested some £240 million of capital, all aimed at ensuring a competitive product able to win overseas orders on price, delivery and technical excellence.
  130
  As with all Adjournment debates, I have listened carefully to the arguments that have been put forward. I congratulate the hon. Members for Gateshead, East and for Tyne Bridge on raising this important issue at what has transpired to be a topical moment. I fully understand the hon. Gentlemen's reasons for wanting to defend the continuation of those teams of skilled people in their constituencies, and I shall ensure that the points that they have raised tonight are well lodged with my right hon. and hon. Friends at the Department of Trade and Industry and the Department of Energy.
  Question put and agreed to.
  Adjourned accordingly at two minutes past Eleven o'clock.

ATTORNEY-GENERAL
  Crown Court, Cambridge
  Crown Court, Cambridge
  Land Registration
  Land Registration
PRIME MINISTER
  Engagements
  Engagements
  Head of the Civil Service
  Head of the Civil Service
  East Anglia
  East Anglia
  Korean War (Memorial)
  Korean War (Memorial)
  Libya (United States Attack)
  Libya (United States Attack)
  Anglo-Irish Agreement
  Anglo-Irish Agreement
  Dr. Kurt Waldheim
  Dr. Kurt Waldheim
  Maudsley Hospital
  Maudsley Hospital
  Nuclear Weapons
  Nuclear Weapons
  United States Aircraft (Military Operations)
  United States Aircraft (Military Operations)
  Nuclear Fallout
  Nuclear Fallout
TRANSPORT
  Advertising Agencies
  Advertising Agencies
  Vehicle Registration Prefix
  Vehicle Registration Prefix
  Tractors (Driving Licences)
  Tractors (Driving Licences)
  Heathrow-Gatwick Helicopter Link
  Heathrow-Gatwick Helicopter Link
  Channel Tunnel
  Channel Tunnel
SCOTLAND
  Home Helps
  Home Helps
  School Meals
  School Meals
  Roadworks, Caithness
  Roadworks, Caithness
  Advertising Agencies
  Advertising Agencies
  House Condition Survey
  House Condition Survey
  Lochaber
  Lochaber
  Scottish Development Agency (Renfrew)
  Scottish Development Agency (Renfrew)
  Land Tribunal
  Land Tribunal
  Sports Grounds (Rating)
  Sports Grounds (Rating)
  Teachers' Pay
  Teachers' Pay
  Royal Scottish National Hospital
  Royal Scottish National Hospital
  Departmental Staff
  Departmental Staff
  Prison Officers
  Prison Officers
WALES
  Psychiatric Beds
  Psychiatric Beds
  Advertising Agencies
  Advertising Agencies
  Hospital Consultants (Prescriptions)
  Hospital Consultants (Prescriptions)
HOME DEPARTMENT
  Prisoners (Visits)
  Prisoners (Visits)
  Prison Officers
  Prison Officers
  Neighbourhood Watch Schemes
  Neighbourhood Watch Schemes
  Remission
  Remission
  Offensive Weapons
  Offensive Weapons
  Advertising Agencies
  Advertising Agencies
  Community Radio
  Community Radio
  Criminal Injuries Compensation
  Criminal Injuries Compensation
  Weapons (Police Certification)
  Weapons (Police Certification)
  Mr. & Mrs. Robert Stapleton (Documents)
  Mr. & Mrs. Robert Stapleton (Documents)
  British Embassy, Dublin
  British Embassy, Dublin
TRADE AND INDUSTRY
  Car Industry
  Car Industry
  Consumer Protection
  Consumer Protection
  Exchange Rate
  Exchange Rate
  Manufactures
  Manufactures
  Trade Statistics
  Trade Statistics
  BL (Corporate Plan)
  BL (Corporate Plan)
  Multi-fibre Arrangement
  Multi-fibre Arrangement
  Advertising Agencies
  Advertising Agencies
  Indo-Rail Exhibition (Jakarta)
  Indo-Rail Exhibition (Jakarta)
  Mergers
  Mergers
  Export Credit
  Export Credit
  Ultraleisure
  Ultraleisure
  European Regional Development Fund
  European Regional Development Fund
  South Africa
  South Africa
  Shipbuilding (Aid)
  Shipbuilding (Aid)
  Intervention Fund
  Intervention Fund
  United States Export Regulations
  United States Export Regulations
  British Shipbuilders
  British Shipbuilders
  United Kingdom-United States Trade Relations
  United Kingdom-United States Trade Relations
  Strategic Defence Initiative
  Strategic Defence Initiative
  Toys
  Toys
FOREIGN AND COMMONWEALTH AFFAIRS
  British Citizens Abroad (Hostages)
  British Citizens Abroad (Hostages)
  Hong Kong (GATT)
  Hong Kong (GATT)
  Hong Kong
  Hong Kong
  North Atlantic Assembly
  North Atlantic Assembly
EMPLOYMENT
  Advertising Agencies
  Advertising Agencies
  Advertising Agencies
  Advertising Agencies
  Central Regional Council
  Central Regional Council
  Labour Statistics
  Labour Statistics
  Prison Officers (Earnings)
  Prison Officers (Earnings)
  Keyboard Ltd.
  Keyboard Ltd.
NORTHERN IRELAND
  Visitors
  Visitors
  Hotels
  Hotels
  EC Regional Development Fund
  EC Regional Development Fund
  Advertising Agencies
  Advertising Agencies
  Terrorism
  Terrorism
  Intimidation
  Intimidation
  Security Forces (Re-housing)
  Security Forces (Re-housing)
  Royal Ulster Constabulary
  Royal Ulster Constabulary
  NORAID
  NORAID
EDUCATION AND SCIENCE
  Further Education
  Further Education
  General Certificate of Secondary Education
  General Certificate of Secondary Education
  Universities (Freedom of Speech)
  Universities (Freedom of Speech)
  Aberdeen University
  Aberdeen University
  School Buildings
  School Buildings
  Teachers' Dispute
  Teachers' Dispute
  Education (Politicisation)
  Education (Politicisation)
  Higher Education
  Higher Education
  Schools (Midday Supervision)
  Schools (Midday Supervision)
  Nursery Education
  Nursery Education
  Schools (Vandalism and Theft)
  Schools (Vandalism and Theft)
  Teachers (Initial Training)
  Teachers (Initial Training)
  School Books
  School Books
  Teacher Training
  Teacher Training
  Her Majesty's Inspector of Schools (Report)
  Her Majesty's Inspector of Schools (Report)
  Universities (Freedom of Speech)
  Universities (Freedom of Speech)
  School Closures
  School Closures
  Mathematics, Engineering and Science
  Mathematics, Engineering and Science
  School Meals
  School Meals
  Animal Diseases (Research)
  Animal Diseases (Research)
  Expenditure and Examination Results
  Expenditure and Examination Results
  Civil Engineering
  Civil Engineering
  Advanced Further Education
  Advanced Further Education
  Higher Education Spending
  Higher Education Spending
  Advertising Agencies
  Advertising Agencies
  Teachers (Statistics)
  Teachers (Statistics)
  A-level Examinations
  A-level Examinations
  University College, Cardiff
  University College, Cardiff
  Donna de Groot and Stuart Ford
  Donna de Groot and Stuart Ford
  School Meals Census
  School Meals Census
  High Energy Physics
  High Energy Physics
ENVIRONMENT
  Radioactive Waste
  Radioactive Waste
  Radiation
  Radiation
  Derelict Land
  Derelict Land
  Property Services Agency
  Property Services Agency
  Asbestos
  Asbestos
  Communal Heating Systems
  Communal Heating Systems
  Housing (Coventry)
  Housing (Coventry)
  Advertising Agencies
  Advertising Agencies
  Land Sale, Gosport
  Land Sale, Gosport
  Planning Appeals
  Planning Appeals
  Owner-Occupiers
  Owner-Occupiers
  Rates
  Rates
  Expenditure
  Expenditure
  Anglian Water Authority
  Anglian Water Authority
  Housing Statistics
  Housing Statistics
SOCIAL SERVICES
  Jasmine Beckford (Report)
  Jasmine Beckford (Report)
SOCIAL SERVICES
  Limited List Prescribing
  Limited List Prescribing
  NHS (Housing Stock)
  NHS (Housing Stock)
  Benefits (Claimants)
  Benefits (Claimants)
  Supplementary Benefit
  Supplementary Benefit
  Advertising Agencies
  Advertising Agencies
  Hypothermia
  Hypothermia
  Re-establishment Centres
  Re-establishment Centres
  Limb Fitting Service
  Limb Fitting Service
  Disabled People (Motor Cars)
  Disabled People (Motor Cars)
  Informal Carers
  Informal Carers
  Residential Homes
  Residential Homes
  Board and Lodging Payments
  Board and Lodging Payments
  Social Fund
  Social Fund
  Psychiatric Patients, Lincoln
  Psychiatric Patients, Lincoln
  Suicides
  Suicides
  Ethnic Survey
  Ethnic Survey
  National Insurance Contributions
  National Insurance Contributions
  Computers
  Computers
  Supplementary Benefit
  Supplementary Benefit
  Millvale House, Croxteth
  Millvale House, Croxteth
  Private Nursing Homes
  Private Nursing Homes
  Ethnic Minorities (Psychiatric Treatment)
  Ethnic Minorities (Psychiatric Treatment)
  Involuntary Mental Patients
  Involuntary Mental Patients
  Transcultural Psychiatry
  Transcultural Psychiatry
  Family Income Supplement
  Family Income Supplement
  Potassium Iodate (Stocks)
  Potassium Iodate (Stocks)
  Organ Donors (Computer Records)
  Organ Donors (Computer Records)
  Nurses (Pay)
  Nurses (Pay)
  Unemployment Benefit
  Unemployment Benefit
  Mobility Allowance
  Mobility Allowance
  Medical Students
  Medical Students
  Psychiatric Illness (Statistics)
  Psychiatric Illness (Statistics)
  Special Health Authorities
  Special Health Authorities
  Maudsley Hospital
  Maudsley Hospital
  Bethlem Royal Hospital
  Bethlem Royal Hospital
  Mentally Ill Children
  Mentally Ill Children
  Generic Services (UK) Ltd.
  Generic Services (UK) Ltd.
  Residential Accommodation
  Residential Accommodation
  Claims
  Claims
  Regional Health Authorities
  Regional Health Authorities
  Dentistry (Statistics)
  Dentistry (Statistics)
  Dental Treatment (Capitation Fees)
  Dental Treatment (Capitation Fees)
  Dental Patients
  Dental Patients
  Primary Health Care
  Primary Health Care
  Family Practitioner Committees
  Family Practitioner Committees
  Medicines (Costs)
  Medicines (Costs)
  General Practice (Premises)
  General Practice (Premises)
  Doctors
  Doctors
  Patients
  Patients
AGRICULTURE, FISHERIES AND FOOD
  Bonamia Disease
  Bonamia Disease
  Agriculture (Support)
  Agriculture (Support)
  Agricultural Employees
  Agricultural Employees
  Frozen Foods
  Frozen Foods
  European Community Currency Unit
  European Community Currency Unit
  Fishing Industry
  Fishing Industry
  Food Exports
  Food Exports
  Advertising Agencies
  Advertising Agencies
  Levies and World Prices
  Levies and World Prices
  Common Agricultural Policy
  Common Agricultural Policy
  Hill Farming
  Hill Farming
  Agriculture Costs
  Agriculture Costs
  Trichinella Spiralis
  Trichinella Spiralis
  British Sherry
  British Sherry
  Agricultural Holdings
  Agricultural Holdings
  Beef and Butter Intervention Storage
  Beef and Butter Intervention Storage
  Agricultural Expenditure
  Agricultural Expenditure
PRIME MINISTER
  Nuclear Tests (British Service Men)
  Nuclear Tests (British Service Men)
  EC Budget (United Kingdom Contributions)
  EC Budget (United Kingdom Contributions)
NATIONAL FINANCE
  Taxation
  Taxation
  Money Supply
  Money Supply
  Exchange Rates
  Exchange Rates
  Tokyo Summit
  Tokyo Summit
  European Monetary System
  European Monetary System
  National Insurance
  National Insurance
  Advertising Agencies
  Advertising Agencies
  Excise Duties
  Excise Duties
  Value Added Tax
  Value Added Tax
  Agriculture (Expenditure Limits)
  Agriculture (Expenditure Limits)
  EC (Expenditure)
  EC (Expenditure)
  EC (Budget)
  EC (Budget)
  Agriculture (Self-employed Persons)
  Agriculture (Self-employed Persons)
  Farm Incomes
  Farm Incomes
  Income Tax
  Income Tax
DEFENCE
  Plastic Bullets
  Plastic Bullets
  US Military Facilities
  US Military Facilities
  Advertising Agencies
  Advertising Agencies
  Nuclear Weapons-Related Activities (Scotland)
  Nuclear Weapons-Related Activities (Scotland)
  Royal Marines, Arbroath and Locking
  Royal Marines, Arbroath and Locking
  Nuclear Stockpiles, Europe
  Nuclear Stockpiles, Europe
  Exercise Elder Forest
  Exercise Elder Forest
  Universities
  Universities
  Research Contracts
  Research Contracts
  Libya
  Libya
  Nuclear Tests
  Nuclear Tests
  NATO (Defence Planning Committee)
  NATO (Defence Planning Committee)
  Assault Ships
  Assault Ships
  Hospitality
  Hospitality
  Armed United States Personnel
  Armed United States Personnel
ENERGY
  Advertising Agencies
  Advertising Agencies
  Oil Prices
  Oil Prices
  European Demonstration Reprocessing Plant
  European Demonstration Reprocessing Plant
  Plutonium
  Plutonium
  Public Bodies (Official Secrets Act)
  Public Bodies (Official Secrets Act)
  Nuclear Safeguards, Sellafield
  Nuclear Safeguards, Sellafield
  Nuclear Safeguards (Thurso Inquiry)
  Nuclear Safeguards (Thurso Inquiry)

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Liverpool.

Defence Expenditure: Value for Money
Lord Orr-Ewing: 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 progress is being made in obtaining value for money in defence procurement.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, we are continuing to increase the use of competition in defence procurement contracts and actively developing collaborative opportunities with both our European and transatlantic allies.
Lord Orr-Ewing: My Lords, while I thank my noble friend for that reply, can he be a little more specific? Recently I read in the papers that £300 million was saved in the first six months by competitive contracts. Therefore, is it true that we are likely to save £600 million in the year? Is that the sort of aim which the Government are hoping to achieve in the present year?
Lord Glenarthur: My Lords, it is difficult to quantify the savings precisely. The Chief of Defence Procurement has suggested that a 10 per cent. saving overall should be achievable, which would take us rather in excess of the £600 million; it would be more approaching £800 million.
Lord Mayhew: My Lords, can the noble Lord the Minister say what proportion of contracts for defence procurement are by competitive tendering? I think that in the last Defence White Paper the figure was 60 per cent., which was challenged by the Select Committee on Defence. Will the noble Lord say what is the current figure?
Lord Glenarthur: My Lords, the figure for contracts let competitively rose from 38 per cent. in 1983–84 to 47 per cent. in 1984–85. We expect 1985–86 figures to show a further increase. We hold over 300 competitions per month, with an average of five firms in each.
Lord Graham of Edmonton: My Lords, is the noble Lord aware that on 21st March last year, at col. 660 of Hansard, the noble Lord, Lord Trefgarne, said:
"Our policy is to reduce the cost of defence equipment through the maximum use of competition"?.
What are the implications of this policy if it means that foreign companies are successful in obtaining orders when competing against British companies?
Lord Glenarthur: My Lords, competition can help, first, by achieving the best value for money; secondly, by the most efficient use of industrial resources; thirdly, by stimulation of new ideas; and, added to that, greater exports, which of course have a consequence for UK firms being more competitive in world marketplaces.
Lord Jenkins of Putney: My Lords, would not the best way of saving a substantial sum of money on useless expenditure on defence be to cancel Trident?
Lord Hatch of Lusby: My Lords, in relation to defence procurement, is it the case that the Government have added a cancellation sum to their order for the first Trident? Is that an attempt to inhibit a future government in cancelling Trident? Is this part of the Government's way of saving money? It does not seem so to me.
Lord Glenarthur: My Lords, my noble friend Lord Trefgarne and others have answered numerable questions from this Box about Trident. If the noble Lord has a specific question, I am sure that I or my noble friend will be able to answer it.
Lord Hatch of Lusby: My Lords, that is a specific question, which is very topical, as it has arisen only in the last two weeks.
Lord Glenarthur: My Lords, with respect to the noble Lord, the Question on the Order Paper is considerably wider than the narrow question which the noble Lord has asked. If the noble Lord would like to table a specific Question on Trident, it will be answered.
Lord Ironside: My Lords, is my noble friend aware that industry puts a lot of money up front for bidding for contracts? Can my noble friend persuade his right honourable friend that it is very important to award contracts on time, in view of the fact that delay means that industry has to service the borrowings which are put up in order to bid? Will my noble friend please bear that in mind?
Lord Glenarthur: My Lords, I am sure that those concerned with defence procurement will bear that in mind.
Lord Underhill: My Lords, on reflection, does not the noble Lord think that he has been a little hasty in the replies that he has given to my two noble friends, because surely their questions related to obtaining value for money in defence procurement? The noble Lord has not answered their questions.
Lord Glenarthur: My Lords, the Question asked by my noble friend Lord Orr-Ewing goes into the whole matter of value for money in defence procurement. If the noble Lord wishes to ask a particular Question about Trident, which is just one area of defence procurement, the best thing to do would be to put it down and then I can look at it in detail.
Lord Glenamara: My Lords, will the noble Lord say to what extent, if any, unemployment in an area is taken into account in awarding contracts?
Lord Glenarthur: My Lords, contracts for defence equipment involve not just large firms but also small firms. We are doing a great deal to encourage them. We are taking specific steps to encourage them to break into the defence market by simplifying procedures, improving the flow of information, widening contract opportunities, and all that sort of thing, which I should have thought would help in all areas.

EMS: United Kingdom Participation
2.43 p.m.
Lord Soames: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have taken a decision on whether or not to include sterling into the exchange rate mechanism of the EMS during the lifetime of this Parliament.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, no.
Lord Soames: My Lords, I suppose I might have expected such a reply. What I should like to know from my noble friend is this. First, now that the oil price has come a long way down without sterling having suffered, that surely has removed the argument of the petro-currency. On top of that, the relationship between sterling and the deutschemark is satisfactory to sterling now; and, thirdly, it seems to be fairly common knowledge that the Chancellor of the Exchequer, the Foreign Secretary, the governor of the Bank of England and the chairmen of the clearing banks are all in favour. What are the Government waiting for before they make up their minds in a positive fashion?
Lord Young of Graffham: My Lords, this is a matter which is kept under continual review. We do not intend to enter unless there is a clear balance of advantage in favour of us doing so. The views of the Government were stated quite fully by my honourable friend in another place, the economic secretary, when he said in a debate:
"The exchange rate mechanism is a fixed, but adjustable, exchange rate system on Bretton Woods lines intended to promote greater economic convergence between its participants, particularly on inflation. The Government's position on membership has been clear throughout. We will be ready to join the exchange rate mechanism as and when we judge the conditions are right for us to do so."
I do not think I can add to that.
Baroness Seear: My Lords, the Government have told us on innumerable occasions that they will join when they consider that the conditions are right. Will the noble Lord define what the right conditions are?
Lord Young of Graffham: No, my Lords, because I think it would be quite wrong for us to set in advance conditions or circumstances which we consider right. We have to consider the position at the time. I would say to all your Lordships that I have no doubt that had
582
we joined some time ago we would in fact have been worse off than we are today.
Lord O'Brien of Lothbury: My Lords, would it not serve to quieten this interminable debate on the merits or otherwise of joining the exchange rate mechanism and the European monetary system if the Government were at least to define what they would regard as a "right" time for this purpose? Since the debate began we have had all kinds of time, none of which has seemed to be right. It would help us all if the Government were to tell us what a right time is, and how they define it. The debate continues, and distinguished people are in favour of entering the exchange rate mechanism, not least the Economist, whose views I share.
Lord Young of Graffham: My Lords, I appreciate that it is the view of very distinguished people in our society that the Government should, or should not, do different things, and that has always been the case. There is happily but one Government. It is for the Government to make that decision, and the Government will do so when the Government judge that the time is right.
Lord Boothby: My Lords, may I ask the noble Lord whether he realises that for the last 60 years the whole world has suffered from recurrent economic depressions amounting to crises, causing much unemployment and poverty; and that the primary cause of these depressions in every case was the lack of an efficient and viable international monetary system? The noble Lord talks about keeping it under review. It has been kept under review for 60 years. The last serious attempt to tackle the problem was made at the Genoa Conference of 1922 by Mr. Lloyd George, who unfortunately fell from power before he could carry it out. Does the noble Lord not think that the time has come for us to have another stab at it, by joining the EMS, and joining it now?
Lord Young of Graffham: My Lords, if we look back over the last 60 years of human progress we shall find that the world is an infinitely better place than it was 60 years ago in terms of living standards of the average citizen. Of that there can be no doubt. Of course we have unemployment. I hope very much that unemployment will one day be a thing of the past. These are two entirely separate matters. What we must do is, first, to have a sound monetary policy for the United Kingdom; secondly, we must play our part as a full and committed member of Europe. When the two go together, and when we decide it is time to join the exchange rate mechanism, I am sure that the Government will do so at the first possible opportunity.
Lord Campbell of Croy: My Lords, have the Government taken fully into account the opinion of the CBI and others representing British industry and commerce that conditions at present are fortuitously favourable for Britain joining the exchange rate mechanism? Can my noble friend explain why the Government and these other bodies have reached different conclusions?
Lord Young of Graffham: My Lords, it is for the Government to listen to advice, but it is for the Government to make up their own mind, and the Government will do that. Exports and the battle to restore the British economy are about much more than just exchange rates. So far as the CBI is concerned, the CBI knows that it has as much to do with goods being delivered on time, and with quality and design, as it has with simple exchange rates.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that this matter of the EMS is rather esoteric so far as most of us are concerned? Since he will not give the reasons why we should not join, will he give the reasons why he thinks, or why the Government believe, that it has been in our favour not to have joined up to the present time?
Lord Young of Graffham: My Lords, I will clearly give the reason why the Government do not believe that we should join at this time. It is because we do not consider that there is any clear balance of advantage in our doing so today. The moment we do, we shall join.
Lord Soames: My Lords, is my noble friend aware that surely the time has come? We have been arguing about this for a long time, and it is always the same answer—"When the time is right". What is right in this matter? I do not want to repeat my arguments, but this really is not good enough on the part of the Government. Given the present circumstances compared with what they were a year ago, what can be "righter" than today?
Lord Young of Graffham: My Lords, I have no doubt that the same argument was used one year ago and two years ago, but I shall draw all that is said in your Lordships' House to the attention of my right honourable friend the Chancellor.
Lord Stoddart of Swindon: My Lords, with respect to the noble Lord, he really did not answer my question, and I am sorry he did not. I asked him why it had been to our advantage to remain outside the exchange rate mechanism up to date. He should surely be able to tell us that.
Lord Young of Graffham: My Lords, I hardly think this is the time or place for a lecture on economics. In the view of the Government there is no clear balance of advantage at this time for us to join. Until there is we shall not join.
Lord Ezra: My Lords, is the noble Lord aware that it is a source of great mystification to our friends on the Continent why in this particular conjunction we have not joined the exchange rate mechanism? It is a source of great mystification to a large number of people in this country why we are not increasing our links with Europe in this very desirable manner. Will the noble Lord not agree that the Government's total refusal to give us reasons for the present position is very unnerving to those of us who believe that by increasing our links with Europe we shall achieve greater success economically and politically in the world?
Lord Young of Graffham: But, my Lords, we are a full member of the European monetary system. We deposit 20 per cent. of our gold and dollar reserves with the European Monetary Co-operation Fund. We participate fully in all discussions; but what we have not done at the present time is to deem that the time is right to join the exchange rate mechanism. I have no doubt at all that that time will come.
Lord Morris: My Lords, does my noble friend agree that joining the European exchange rate mechanism is a harmonisation of the greatest importance which must be done with the greatest care, for until wage levels, net effective incomes and gross domestic products are in harmony it is difficult to harmonise? In fact, to harmonise where there is no harmony is, I suggest, dangerous.
Lord Young of Graffham: Yes, my Lords, I look forward to the day when we can say that unit labour costs in British industry are fully competitive with those of our European competitors.

Hong Kong and British Citizenship
2.54 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 representations they have received from the Council of Hong Kong Indian Associations about the grant of British citizenship and the right of abode in Britain to British Dependent Territory citizens, and what replies they have given.
Lord Glenarthur: My Lords, the Government received and considered very carefully representations from the council that British citizenship should be granted to those British Dependent Territories citizens who are not ethnically Chinese and who would otherwise be stateless in 1997. But as my right honourable friend the Home Secretary announced on 23rd April, we have concluded that it would not be right to grant this request. The arrangements we have made guarantee people's continued right to live in Hong Kong and will ensure that neither they, their children nor their grandchildren need fear statelessness.
Lord Molloy: My Lords, is the noble Lord the Minister aware that when they conducted their negotiations with the Chinese Government this Government quite rightly deserved the fulsome praise of both Houses of Parliament for the manner in which they did so? Is he further aware that due to their myopia in negotiating with regard to the Chinese minorities the Government stand the possibility of being ridiculed because of their unbelievable attitude to the minorities? They have granted two of the requests and they have been wholly acceptable to the Hong Kong people as a whole. The new passports requiring no visas are fine; the former servicemen who will require and will obtain British citizenship—all

585
these things are admirable. Why, then, have the Government turned their face against the ethnic minorities who, despite what the Minister has said here, despite what Mr. Douglas Hurd has said, know full well that come 1997 with the new BN(O) passport they will be stateless, notwithstanding the massive service they have given to Hong Kong and to Great Britain?
Lord Glenarthur: My Lords, British citizenship does not properly reflect the position of the ethnic minorities in Hong Kong, nor can it secure their position there. Their future in Hong Kong can be secured, as I think the noble Lord was indicating, only by the agreement with the Chinese Government and this guarantees them the right to live in Hong Kong. All British Dependent Territories citizens connected with Hong Kong will up to July 1997 have the right to be British Nationals (Overseas), but any who do not do so, or whose children or grandchildren later risk statelessness, can become British overseas citizens. This properly reflects their position in Hong Kong. It would be wrong to treat them differently from the many thousands of other British overseas citizens throughout the world, and that is not necessary in order to give them what they say they want. The two things they say they want are an accepted nationality status and a home in Hong Kong, both of which they have.
Baroness Phillips: My Lords, bearing in mind that so many of these Indians went to live in Hong Kong at the direct invitation of former British governments, surely it ill behoves us to leave them in this situation when we come to the time when there are apparently still very elastic guarantees which we made with the Red Chinese. Will not the Government reconsider the situation of this quite small number of citizens?
Lord Glenarthur: My Lords, as I have indicated, we have considered them with great care. We have recognised and fully met our responsibilities to the people of Hong Kong, including those British Dependent Territories citizens who are not ethnically Chinese. The noble Baroness will be aware that we shall be debating this matter in about a week's time.
Lord Mackie of Benshie: My Lords, if the Minister is so confident about the agreement with the Chinese and so confident that these people will be treated properly when Hong Kong passes to the Chinese Government, why will he not give those people who went there because it was British, who have done extremely well and who are rich and able a fall-back position of a British passport?
Lord Glenarthur: My Lords, of course we appreciate the concerns of the minority communities who are not ethnically Chinese. There is no question of any British Dependent Territories citizen becoming stateless as a result of the agreement. The draft order makes provisions to prevent this, not only for those who were British Dependent Territories citizens before 1st June 1997, but also for their children and their grandchildren born on or after that date. That is fully
586
in accordance with our international obligations to relieve statelessness.
Lord Mackie of Benshie: My Lords, will the Minister then say where these British overseas citizens will be welcome? In which countries will they be welcome to live if an unsatisfactory situation develops?
Lord Glenarthur: My Lords, I believe that that is a matter which would be looked at internationally. However, I do not think that it does any good to assume that an agreement that has been reached between those concerned over the future of Hong Kong is likely to go wrong in the way the noble Lord suggests that it might.
Lord Mishcon: My Lords, will the noble Lord the Minister and the House forgive me for putting this question, having entered the Chamber a little late? Will the noble Lord the Minister, as he has recognised already, note that there is to be a debate on this very serious matter on Friday week? Will he therefore take it that the fact I am not disputing some of the statements he has made does not mean that we shall not be having a very full debate on that occasion?
Lord Glenarthur: My Lords, I realise that we probably shall have a very full debate on that occasion. It may be best to discuss it more fully then.
Lord Molloy: My Lords, the noble Lord the Minister says that there has to be international discussion. Will he now tell the House with what other nations this Government will be discussing the position of the 10,000 Hong Kong Indians who went there at the behest of our Government? They are simply asking to be treated like all the other folk in Hong Kong—they support the Government 100 per cent.—so that they do not become stateless in 1997. Businessmen will not wish to take away the assets they have accrued.
Furthermore, will the Minister not agree that they will be compelled to take their case to the European Commission of Human Rights and will probably win? If the Government do not consider this question again, they will undo all the wonderful good work they did when they first negotiated with the Chinese Government. The British people will not worry because they are prepared to stand by these 10,000 Indian people who are recognisably part and parcel of Hong Kong which this Government intends to let down.
Lord Glenarthur: My Lords, I realise that the noble Lord feels passionately about this. However, we are to debate the matter in due course and perhaps it would be more appropriate then to give the noble Lord a fuller answer.

Business
3 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Elton will, with the leave of the House, repeat a Statement that is to be made in another place on Chernobyl (Monitoring).

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

Animals (Scientific Procedures) Bill [H.L.]
3.1 p.m.
Lord Glenarthur: My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Lord Glenarthur.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[References are to (Bill 75) as first printed for the Commons]
1 Clause 2, page 3, line 2, after ("use") insert ("the place where it is killed is a designated establishment").
Lord Glenarthur: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 1.
This amendment, which was moved in another place with the full support of the Government, sets out to deal in a satisfactory way with the killing of animals in the wild for scientific purposes. As the Bill left your Lordships' House, Clause 2(7) provided that the killing of an animal should be a regulated procedure if the killing were carried out for experimental or other scientific use, and the method was not one of the standard humane methods specified in Schedule 1 to the Bill.
This provision was very satisfactory so far as concerns the great majority of the killing of animals carried out for scientific use—killing which is going to take place in laboratories. We have separately tightened up the detailed arrangements as respects killing in all kinds of establishments designated under the Bill, and we shall come to consider that presently in connection with Amendments Nos. 7, 14 and 22. The issue here is what should be done about the small amount of killing of animals carried out for a scientific purpose in the wild. I understand, for example, that the Nature Conservancy Council and some other research bodies carry out the shooting of birds in order to monitor pesticide residues or to study diet.
Clearly, it would not be sensible to try to apply to animals in the wild the system of controls over killing which this Bill introduces and which is geared to the controlled environment of the laboratory. The circumstances are markedly different and many of the controls would be difficult or impossible to adhere to. We should also end up in the rather strange position of imposing restrictions on the shooting of birds for science, but not for the huntsman's food. The amendment, by exempting from control the killing of
588
animals in the wild, avoids these potential anomalies and I accordingly commend it to the House. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Glenarthur.)
On Question, Motion agreed to.

COMMONS AMENDMENT
2 Clause 4, page 3, line 37, leave out ("qualifications") and insert ("biological or other relevant qualifications and of the")
Lord Glenarthur: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 2.
This amendment was moved by the Government in another place in order to respond to the view expressed in discussion in Committee that the Bill should point up the particular significance of qualifications in biological subjects when it comes to considering applications for personal licences under the Bill. Clause 4(3) of the Bill, as your Lordships will recall, deals with the situation where a sponsor is required for a personal licence application, and Clause 4(3)(b) lists the things which the sponsor must have knowledge of—the applicant's qualifications, training, experience and character. This amendment alters the subsection so that the sponsor is required to have knowledge of the,
"biological or other relevant qualifications and of the training, experience and character of the applicant".
This is a worthwhile change, and I have no doubt it will be well received by your Lordships because several noble Lords emphasised the importance of the qualifications of personal licensees in our earlier debates.
I believe that it is a useful amendment, and I commend it to the House
Moved. That this House do agree with the Commons in the said amendment—(Lord Glenarthur).
On Question, Motion agreed to.

COMMONS AMENDMENT
3 Clause 5, page 4, line 36, at end insert—
("(4A) The Secretary of State shall not grant a project licence unless he is satisfied that the applicant has given adequate consideration to the feasibility of achieving the purpose of the programme to be specified in the licence by means not involving the use of protected animals.")
Viscount Davidson: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 3.
This amendment concerns possibly the single most important principle behind this Bill: the use of alternative techniques which do not involve living animals of the type protected by the Bill. During Committee stage and Report stage in this House we had a very full and useful discussion of these issues during debate on amendments which sought to incorporate a reference to this point in the Bill. It will be no surprise to your Lordships that the debate on this matter was also full and vigorous during the Bill's consideration in another place. It was cogently argued that the Bill should include a reference to the fact that granting of a project licence will only take place after the Secretary of State

589
has satisfied himself that the applicant has given careful consideration to the use of alternatives, and to whether suitable techniques of this sort exist which would enable the work to be carried out.
At Committee stage in another place the Government gave a commitment to introduce an amendment on these lines and the amendment which we are now considering was brought forward at Report stage in fulfilment of that commitment. The amendment was widely welcomed in another place and I am sure that it will be equally welcomed by your Lordships' House. The amendment inserts into the Bill a clear requirement for the important question of alternatives to be given the prominence which it deserves in the consideration of project applications. I commend it to the House.
Moved, That this House do agree with the Commons in the said amendment.—(Viscount Davidson.)
Lord Mishcon: My Lords, the noble Lord the Minister correctly anticipated that this would be a very welcome amendment in this House, as indeed it was in another place. One remembers the debates upon this which took place. The noble Lord has described them very accurately with the appropriate adjectives.
They were very forceful debates and now this amendment appears in order that there is writ large in the Bill that the Secretary of State must take into account all other alternatives before granting a project licence. We certainly approve this amendment from these Benches.
Lord Houghton of Sowerby: My Lords, in supporting the Motion that we should approve the Commons amendment, I should like to say that this amendment includes in the Bill a proviso that it was always intended should be borne in mind by the Secretary of State in granting project licences. But so many people have wanted to see additional safeguards in the Bill, and these are the additions that are being made for that purpose.
We all agree that the hope for many animals in laboratories is the discovery of alternatives to their use; and much work is being done to find these alternatives. They are not as easy to discover or to use as many people think. Nevertheless, work is being done and should continue to be done. We bear in mind that the Government have made grants towards research to find these alternatives. I think it is only fair to the original drafter of the Bill to say that it was never intended that the existence of alternatives should be ignored or not inquired into. However, this amendent makes it clear beyond any doubt that, in granting these licences, the Secretary of State must be satisfied that there are no feasible alternatives. That is a comfort to a great many people who wanted to see this in the Bill itself.
Much doubt has been expressed in different quarters about the genuineness of the administrative scrutiny which will be applied by the Secretary of State to the various provisions of this Bill when it becomes an Act of Parliament. It should be said that not only will the Secretary of State, of his own responsibility, wish to
590
exercise to the full the power of surveillance, consideration and authority which are given to him under this Bill, but we must bear in mind that there will be a procedures committee—to which we shall refer later on—which is a committee of great importance and authority. A later amendment will strengthen very greatly its powers of investigation. That committee will be there all the time to keep an eye on what is happening and may decide for itself to investigate anything which it feels needs further inquiry.
I therefore warmly support this amendment. With one exception (when we come to the amendment relating to Clause 14) all the amendments strengthen the Bill and are welcomed by those of us who have been watching the Bill so closely for so long and who wish to see it improved even further from when it left your Lordships' House.
The Earl of Halsbury: My Lords, I do not oppose this amendment. I simply regard it as largely otiose and as applying a greater burden of administrative work on the Secretary of State. It is accepted by everyone that alternative methods are cheaper and most of them evolve as a by-product of research on animals. I do not believe that it will make very much difference to the state of play, except that there are always grey areas and a lot of time and administrative effort can be spent in placing a particular proposal at its appropriate point on the spectrum of grey.
Lord Melchett: My Lords, I think I moved an amendment which had a very similar purpose to this when we debated the Bill here; so I very warmly welcome the fact that in another place the Government have amended the Bill in this way. It is quite right—if I may pick up a point made by the noble Earl—that sometimes administrative effort should be spent in ensuring that in the grey area that he mentioned the maximum number of experiments on animals do not take place and the maximum number of alternatives to the use of animals are employed. I think that the amendment is important for that very reason. I know it was always intended that this should be done. It makes a great deal of difference—and we shall see it making a great deal of difference over the years—to have this written into the face of the Bill. I am delighted to see it there.
I have one question which really picks up something mentioned by my noble friend Lord Houghton. Perhaps the noble Lord will write to me if I have this wrong. However, I presume that the actual detailed implementation of this—the day-to-day oversight—will be something for which the Home Office inspectorate will be responsible. I do not wish to delay the proceedings now and so I am quite happy to leave it there. Perhaps the noble Viscount will drop me a line if what I have said is wrong, and will explain exactly how it will work.
Viscount Davidson: My Lords, the answer is that the inspectorate will be in charge of it. So that saves a stamp! I am most grateful to the noble Lords, Lord Mishcon, Lord Houghton and Lord Melchett, for their welcome of this amendment. All I can say to the noble Earl, Lord Halsbury, is that I note the caveat he

591
expressed. I do not think there is anything more of use that I can say.
On Question, Motion agreed to.

COMMONS AMENDMENTS
4 Clause 10, page 8, line 1, leave out first ("a") and insert ("an inviolable").
5 line 4, after ("must") insert ("in every case").
Lord Glenarthur: My Lords, I beg to move that this House do agree with the Commons in their Amendments Nos. 4 and 5. Your Lordships will recall the earlier discussions in this House on the crucial provision in Clause 10(2)(b), requiring all personal licences to contain a condition placing an absolute upper limit on the degree of pain or distress any animal may be permitted to suffer, and requiring that an animal suffering to that degree must be immediately and humanely killed regardless of the importance or likely benefit of the procedures in which it is being used. The House agreed to an amendment to Clause 10(2)(b), making it clear that this referred to what is known as the "termination" condition, a condition specifying the circumstances in which an animal's suffering must be brought to an immediate end.
These further amendments to Clause 10(2)(b) arise from a desire to reinforce this crucial provision, first, by specifying that it is "inviolable"—that is, it overrides all other considerations and cannot be waived whatever the circumstances—and, secondly, by making clear that it must be put into effect in every case where the circumstances specified in the condition obtain. The Government believe that these are worthwhile amendments which will make licensees aware of the overriding importance of the duty imposed on them by the termination condition, and which will further reassure the public that there is a point beyond which no animal may be permitted to continue in pain or distress. I believe that these amendments will also be welcomed by your Lordships, and perhaps in particular by the noble Lord, Lord Melchett, who raised the idea of including the word "inviolable" (or was it "inviolate" at that stage?) during the debates that we had in Committee.
The exact words of the termination condition are not spelt out in the Bill. That would be inappropriate because it would prevent further strengthening of the condition in the light of future developments or to remedy any defect or loophole that the wording subsequently revealed. The condition is, however, spelt out in the draft guidance note: Condition B4 in Annex C to the draft. These amendments signal very clearly the force of the termination condition and I am sure will be welcomed by your Lordships. I accordingly commend them to the House and I beg to move.
Moved, That this House do agree with the Commons in the said amendments.—(Lord Glenarthur.)
On Question, Motion agreed to.

COMMONS AMENDMENT
6 Clause 10, page 8, line 17, at end insert ("but no exception shall be made from the condition required by paragraph (a) above unless the Secretary of State is satisfied that no animal suitable for the purpose of the programme specified in the licence can be obtained in accordance with that condition.")
3.15 p.m.
Lord Glenarthur: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 6. This amendment touches upon a concern which was very fully debated in this House and in another place. In our discussions in Committee, the noble Lord, Lord Melchett, raised the question of the source of dogs and cats used in experiments. He said that there was concern that stolen pet dogs and cats found their way into laboratories for experiments and he proposed an amendment to Clause 10, as it then stood, to provide for measures to prevent the possibility of stolen pets being used. We had a further useful discussion of this issue at Report stage and I undertook to look at the possibility of amending the Bill to take account of this concern. Noble Lords will recall that I brought forward an amendment at Third Reading which provided that, unless an exception is allowed, all cats and dogs used under licence must have been bred and obtained from a designated breeding establishment. This valuable tightening of the Bill was welcomed on all sides of your Lordships' House.
Not surprisingly, considering the concern which exists about the possible use of stolen pets, this matter was explored further during the Bill's passage in another place. Concern was expressed that the provision in Clause 10(3), which allows the Secretary of State to grant an exception to the control in Clause 10(3)(a), should be tightly drawn so as to prevent the use of non-purpose-bred dogs and cats where there is no clear scientific reason for their use and to prevent their use just on ground of cheapness. There was also concern that the exception provision might provide a loophole through which stolen pets could still find their ways to laboratories. The Government undertook further to amend Clause 10(3) so to accommodate these sensible concerns, and Amendment No. 6, which we are considering, was brought forward and accepted at Report stage in another place.
The amendment has been very carefully worded following considerable thought on our part so as to exclude convenience of supply or cheapness as justifiable reasons for the Secretary of State granting an exception. The wording is, however, such as to leave open the possibility of an exception being granted in circumstances where the supply of purpose-bred animals has dried up. This is an important safeguard. It would clearly be very wrong if important work were to be cancelled or abandoned because of a shortfall in the supply of purpose-bred dogs or cats. Such a shortfall could come about quite easily through, for example, an outbreak of cat influenza. In such circumstances we must retain the flexibility to authorise the use of non-purpose-bred animals, on an exceptional basis, and the wording of the amendment allows this.
I should make it clear that in every case where an exception is to be granted, the Home Secretary will have to be satisfied that there is no animal suitable for the purpose of the programme of work which can be obtained through a designated breeding establishment at which it has been bred. This means that an exception will be granted only where there is a clear requirement for a particular type of animal which is

593
not available in designated breeding establishments. This covers a number of possibilities. The most likely case is where the diseases of a particular type of animal are to be studied. I should like to emphasise, however, that we are very well aware of the sensitivity of this issue, and indeed we share the concern which has led to these changes to the Bill. Because of this, I can assure the House that every application for an exception will be given particularly rigorous scrutiny, and only when we are fully satisfied that an exception is justified will we grant it.
I believe that this amendment provides a valuable tightening to a very worthwhile provision of the Bill. I commend it to your Lordships and I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Glenarthur.)
Lord Mishcon: My Lords, I only rise in order to pay tribute to my noble friend Lord Melchett for the part that he played in getting this amendment before the House today.
Lord Melchett: My Lords, as the noble Lord said, I raised this matter when we were considering the Bill. I was still concerned about the two matters that he mentioned—the convenience of supply and the cheapness of pet cats and dogs which had not been specially bred. The Government have very much strengthened the amendment which we made in this House and have probably gone so far as is practical in the Bill to put an end to the very great concern which has been expressed by many members of the public, particularly to the RSPCA, about the problem of stolen pet cats and dogs being used in experiments. I now hope that we can look forward to seeing the Home Office inspectorate and voluntary organisations like the RSPCA implementing this new law as firmly and as effectively as possible to remove completely any grounds for worry by members of the public. But I very much welcome what the Government have done.
On Question, Motion agreed to.

COMMONS AMENDMENT
7 Clause 10, page 8, line 36, at end insert—
("(5A) The conditions of a certificate issued under section 6 or 7 above shall include conditions requiring the holder of the certificate—

(a) to secure that a person competent to kill animals in the manner specified by conditions imposed in accordance with subsection (5) above will be available to do so; and

(b) to keep records as respects the source and disposal of and otherwise relating to the animals kept at the establishment for experimental or other scientific purposes or, as the case may be, bred or kept for breeding there or kept there for the purposes of being supplied for use in regulated procedures.").

Viscount Davidson: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7.
This amendment achieves two purposes, and both the provisions contained in the new subsection it introduces into Clause 10 will, I believe, be welcomed by your Lordships. The first matter is dealt with in paragraph (a) of the new subsection. This places a
594
requirement on all establishments designated under the Bill, whether they keep animals for breeding or supply, or for use in procedures, to have available a person competent to kill any surplus animals In the manner specified in the certificate conditions for use at the establishment concerned as provided for in the existing Clause 10(5).
The killing of animals in the course of, or at the end of, a series of procedures is already tightly control led in the Bill through the provisions in Clauses 2(7), 6(6) and 15(1) and through the amended Schedule 1 which we shall consider shortly. This new provision introduces a necessary additional safeguard in relation to the killing of animals not so used. The provision of adequate controls on the killing of all animals in designated establishments was a matter raised by several noble Lords in earlier debates, including the noble Lord, Lord Melchett, and the noble Lord, Lord Beaumont of Whitley. It is a matter the Government are very concerned should be properly dealt with, and this amendment sets the seal on the comprehensive arrangements to which I have already referred.
The second matter dealt with in this amendment is the keeping of records. Paragraph (b) of the new subsection (5A) in Clause 10 requires all designated establishments to be subject to a condition obliging them to maintain records of the source and disposal of all animals in their care, as well as other matters. In the case of scientific procedure establishments, for example, records of all procedures carried out on a particular animal must be scrupulously maintained. It is most important that the Secretary of State, through his inspectors, should have access to detailed records of this kind, and they will be an essential aid to ensuring that the requirements of the law and of licence and certificate conditions are adhered to, particularly as respects the source of animals which is a matter of such concern. I commend the amendment to the House. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Viscount Davidson.)
On Question, Motion agreed to.

COMMONS AMENDMENT
8 Clause 12, page 9, line 26, after ("scientific") insert ("or other appropriate").
Lord Glenarthur: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 8. This amendment makes a small but useful change to the provisions dealing with the making of representations following a proposal to refuse a licence or certificate or to vary or revoke a licence or certificate.
During consideration of the Bill in another place, the suggestion was made that this part of the Bill—that is Clause 12(5)—should be widened so that, where appropriate, the Secretary of State should be able to appoint not only someone with scientific qualifications but also someone with animal welfare qualifications. After considering this matter, we came to the view that there was considerable merit in this suggestion but that the change to the Bill could be made even wider so that others with any other relevant qualifications might be

595
appointed, depending upon the circumstances. It seemed to us right to build in the widest measure of flexibility and Amendment No. 8 does that. In drawing up this amendment we followed the advice of the British Veterinary Association. This, again, is a valuable change and I commend the amendment to the House. I beg to move.
Moved, That this House do agree with the Commons in the said amendment—(Lord Glenarthur.)
On Question, Motion agreed to.

COMMONS AMENDMENT
9 Clause 13, page 9, line 45, leave out ("may") and insert ("shall").
Viscount Davidson: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 9. Clause 13 of the Bill provides for the Secretary of State to suspend the operation of a licence or certificates, if he considers it urgently necessary for the welfare of any protected animals that this should be done. This is an enabling provision and therefore the wording of the Bill provided that the Secretary of State "may" suspend licences or certificates where it appears to him to be urgently necessary to do so. During consideration of the Bill in another place, it was suggested that the word "may" could with advantage be altered to "shall". It was felt that the word "may" sat rather unhappily with the situation envisaged by the clause in which the Secretary of State is of the opinion that urgent action is necessary. We accept that view and therefore accepted Amendment No. 9 in the terms in which it is now before the House. This is a drafting change, but a worthwhile one and I commend the amendment to your Lordships. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Viscount Davidson.)
Lord Houghton of Sowerby: My Lords, the difference between "may" and "shall" is one of the bugbears of the statute law and of parliamentary debate. I do not know how many hours I have spent in both Houses of Parliament debating the difference between "may" and "shall". I think we need an Act of Parliament to resolve this difficulty in the statute law and to declare once and for all that "may" means "shall" and that there is no further argument to be conducted about it. Anyway, in this case "may" has been translated into "shall". Of course, we know that it meant "shall" all the time, but I need not pursue it any further.
Lord Scarman: My Lords, I should like to say this to the noble Lord. If the word "shall" is used, the judges will interpret it as "may". If the word "may" is used, the judges will interpret it as "shall".
On Question, Motion agreed to.

COMMONS AMENDMENT
10 Clause 14, page 10, line 21, leave out ("any") and insert ("a particular").
Lord Glenarthur: My Lords, I beg to move that the House do agree with the Commons in their
596
Amendment No. 10. It may be convenient if, at the same time, I speak to Amendments Nos. 12 and 13.
These drafting amendments are designed to remove the difficulty which many people have found in interpreting the phrase:
"a series of regulated procedures for any purpose".
This phrase occurs twice in Clause 14 and also in Clause 15. The phrase arose from our difficulty in drafting as a result of the move away from the concept of an experiment to use of the concept of a regulated procedure. In making this change, we have had to overcome the difficulties in defining a project of work which would normally come under the term "experiment". The phrase:
"a series of regulated procedures for any purpose"
was therefore invented to cover this point; but we quite understand the difficulties of interpretation of this and the concern arising from the fact that it gives the impression of a series without end. That is not what we intended and to remedy this these three amendments insert the words "a particular" in place of the word "any" in Clause 14 and also in Clause 15 where the phrase occurs. The phrase, as amended, therefore reads:
"a series of regulated procedures for a particular purpose".
I think that this is much clearer and I hope that your Lordships will agree. I beg to move.
Moved, That this House do agree with the Commons in their Amendment No. 10—(Lord Glenarthur.)
On Question, Motion agreed to.
3.30 p.m.

COMMONS AMENDMENT
11 Page 10, line 31, at end insert—
("; or

(c) the animal is under general anaesthesia throughout the further procedures and not allowed to recover consciousness."

Lord Glenarthur: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11.
We move now to one of the most difficult and finely balanced issues raised by this Bill—the subject of the re-use of animals. Your Lordships will recall that we had a very full and vigorous debate on this matter at Committee and at Report. The House will not have been surprised that debate on this issue was equally vigorous in another place.
The amendment which is before us today was considered at Committee stage in another place and accepted there after a Division on which there was a free vote. An attempt was made to remove the amendment at Report stage but this was defeated on a Division. The amendment alters Clause 14 so as to permit re-use, but only with specific consent of the Secretary of State and only where the animal is under general anaesthesia from which it never recovers consciousness. Your Lordships will recall that the original restrictions in Clause 14 were inserted in the Bill in fulfilment of the commitment given in the 1985 White Paper. In the 1983 White Paper, we had proposed that there should be permitted a limited re-

597
use of those animals which had been given an anaesthetic and allowed to recover consciousness. That proposal was widely misunderstood and attacked and we therefore altered the proposals in the 1985 White Paper.
I should make it clear at the outset that I fully understand the sincere and well thought out views which are held by both sides on this issue. It was because we recognised the nature of the problem and the great sensitivity involved that we adopted a neutral stance during the Committee stage discussion of the matter in another place. However, I must recommend to the House that this amendment be retained as part of the Bill.
The argument in favour of re-use is that it would reduce the number of animals used in experimental procedures. And the form of words adopted in Amendment No. 11 would also ensure that there was no possibility whatsoever of an animal experiencing pain as a result of its re-use, because it would be under terminal anaesthesia during the second period of use. This potential for a reduction in the use of animals is clearly an important feature. The animal welfare group, FRAME, has pointed out that implementation of Clause 14 as it was before amendment would have meant, for example, that two healthy dogs could be given terminal anaesthesia in the same laboratory on the same day; the first because it had previously been used in a procedure which had required anaesthesia; and the second because it would be illegal to carry out an experiment on the first dog in the interval between loss of consciousness and death.
All told, the reduction in the use of animals might not be large. But it is surely common ground that any reduction in the use of animals is to be welcomed, provided that it is not achieved at the expense of suffering elsewhere. A further important point is that it seems likely that re-use will have its impact mainly on the larger animals such as cats, dogs and non-human primates, for all of which we feel an understandable and particular concern. I realise that there are sincerely held views on the other side of this debate. There is the idea that an animal might be forced to endure repeated experimentation stretching on and on. And there is concern that an animal may be left, perhaps in pain, for long periods between the end of the first use and the start of the second and final use. Worries of this sort have been recklessly played upon by the irresponsible branches of the extremist animal welfare movement.
I can well understand these concerns. However, I should point out that the first of them—that animals may be endlessly re-used—cannot arise under this amendment, since the second use must be carried out under anaesthetic from which the animal never recovers. This also ensures that the animal suffers no pain during re-use.
As to the concern about the period which may elapse before re-use is started, this too I well understand. However, the effect of the amendment is that re-use could take place only with the express permission of the Secretary of State. This gives us full control over the circumstances in which re-use occurs. We will exercise this control very strictly. We have prepared draft standard conditions which tightly limit
598
the time interval. We have already agreed this draft with the Committee for the Reform of Animal Experimentation, the British Veterinary Association, and the Fund for the Replacement of Animals in Medical Experiments, and are now going to circulate it to the advisory committee. We will permit re-use only if the animal has not suffered severe or lasting harm and is in a good state of general health. We will not allow an animal to be re-used if it is suffering pain during the interval between the first use and the second.
I believe that this amendment to the Bill achieves a worthwhile improvement. Re-use will be permitted only after the most careful scrutiny and will be subject to stringent guidelines, which will be submitted to the Animal Procedures Committee for approval and will be made available to your Lordships' House and to the general public. I believe that this is the best solution. I am aware that it is a difficult situation but I believe that what we have achieved here is right in all the circumstances. I commend the amendment to the House. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Glenarthur.)
On Question, Motion agreed to.

COMMONS AMENDMENT
12 Page 10, line 34, leave out ("any") and insert ("a particular").
Lord Glenarthur: My Lords, I beg to move Amendment No. 12.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Glenarthur.)
On Question, Motion agreed to.
Clause 15 [Killing animals at conclusion of regulated procedures]:

COMMONS AMENDMENT
13 Page 11, line 3, leave out ("any") and insert ("a particular").
Lord Glenarthur: My Lords, I spoke to Amendment No. 13 with Commons Amendment No. 10. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Glenarthur.)
On Question, Motion agreed to.

COMMONS AMENDMENT
14 Page 11, line 9, leave out ("his personal licence") and insert ("the personal licence of the person by whom the animal is killed").
Viscount Davidson: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 14.
The purpose of this drafting amendment is to correct a defect in the requirements for killing an animal at the end of a series of procedures for which provision is made in Clause 15. As the Bill was originally drafted the clause required the person who carried out the procedures, or the last of the series of

599
procedures, to cause the animal to be immediately killed, either by one of the standard humane methods listed in Schedule 1 or by a method authorised by his personal licence. The problem with this was that it took no account of the fact that the person whose duty it is to ensure that the animal is killed will not always be the person who actually carries out the killing. What is important is that the person who kills the animal should use either a Schedule 1 method or a method which is authorised in his personal licence and therefore established as one which he is competent to perform. This amendment makes the necessary adjustment to Clause 15(1), and I commend the amendment to your Lordships' House. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Viscount Davidson.)
On Question, Motion agreed to.
Clause 20 [Functions of the Committee]:

COMMONS AMENDMENT
15 Page 13, line 23, leave out from ("as") to end of line 24 and insert ("the Committee may determine or as may be referred to the Committee by the Secretary of State").
Lord Glenarthur: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 15.
This amendment fulfils a commitment given by the Government at the Committee stage of the Bill in another place. During the Committee stage discussion it was suggested to us that the earlier drafting of Clause 20(1) implied a very deferential status for suggestions emanating from the Animal Procedures Committee as to the work which it should carry out in order to fulfil its task of advising the Secretary of State on the working of the Bill. A number of suggestions were made as to how the drafting might be improved and we undertook to bring forward a suitable amendment at Report stage. The amendment before your Lordships' House is the amendment which we brought forward and which was accepted in another place. With the incorporation of the amendment, Clause 20(1) makes it quite clear that the committee will be able to put forward ideas for its work, in addition to the ideas which may be referred to it by the Secretary of State. Throughout the passage of this Bill we have made clear the very great importance which we attach to the work of the Animal Procedures Committee and the crucial role which we see it playing in ensuring that the Bill works as we hope it will. This amendment is further evidence of that commitment. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Glenarthur.)
Lord Houghton of Sowerby: My Lords, I referred to this amendment earlier on and I rise just for a moment or two to stress its importance.
This amendment establishes the complete independence of the Animal Procedures Committee. I remind your Lordships of the original text of Clause 20(1):
"It shall be the duty of the Animal Procedures Committee to advise the Secretary of State on such matters concerned with this Act and his functions under it as he may refer to them either of his own motion or at the Committee's request".
600
This amendment provides for the committee to determine for itself what matters it may wish to deal with in addition to those being referred by the Secretary of State himself. I should like to see this in the terms of reference of all advisory committees and others appointed to give Ministers the benefit of advice and experience. But I am happy that it has been done in this case because of the importance that we attach to the functions of the committee alongside this elaborate apparatus of administrative responsibility and authority by the Secretary of State.
I welcome this especially. The House may recall that it is one of the matters that I said (probably at the time of Third Reading of the Bill in your Lordships'House) should receive attention in another place. It has, and here it is.
On Question, Motion agreed to.

Soviet Nuclear Accident: UK Monitoring
3.40 p.m.
The Minister of State, Department of the Environment (Lord Elton): My Lords, with the leave of your Lordships I shall now repeat a Statement that is being made in another place by my right honourable friend the Secretary of State for the Environment. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement about the arrangements for monitoring the effects in the United Kingdom of the accident at Chernobyl, and the results obtained.
"As soon as news of the accident was received, the standing arrangements for monitoring air, water and foodstuffs, particularly milk, were stepped up. The departments mainly concerned are the Department of the Environment and the Ministry of Agriculture, Fisheries and Food, and the Scottish and Welsh Offices, which have been working closely with the National Radiological Protection Board. Samples have been taken daily, and since last Friday, 2nd May, daily bulletins have been issued by the NRPB after consultation with government departments. In addition, my right honourable friend the Minister of Agriculture, Fisheries and Food has set up an incident room from which advice on foodstuffs is available for members of the public.
"The remnants of the cloud from Chernobyl arrived over the United Kingdom on 2nd May. As a result, an increase in the normal background level of radiation was found in air samples taken at various parts of the country over the weekend. The levels found were nowhere near the levels at which there is any hazard to health, and more recent samples show that the levels in air are now falling rapidly as the cloud has moved away.
"As a result of heavy rain in the northern part of England and Wales, and in parts of Scotland, the levels of radiation in samples of rain water were found to be at a level where it was appropriate to warn people against drinking neat fresh rain water over long periods; this might apply to a few farmers in remote parts, and possibly to some campers. There would be no hazard if the recently fallen rain

601
were diluted with rain water already collected in water butts, or by streams, wells or reservoirs.
"The levels of radiation in piped water are less than one-hundredth of the level at which any special action would be needed.
"My right honourable friend the Minister of Agriculture, Fisheries and Food is responsible for monitoring and control of foodstuffs. I understand that samples of milk and fresh produce have shown amounts of radioactivity which are below the level at which action ought to be considered. Levels of radiation are now likely to decline over the next few days.
"I should stress that in judging whether the levels of radiation found require any special action we act in accordance with international recommendations published by the International Commission on Radiological Protection.
"My right honourable friend the Secretary of State for Social Services is also keeping a close watch on imports of food into the United Kingdom from Russia and Poland that was despatched after 26th April 1986.
"The House will see from what I have said that the effects of the cloud have already been assessed and that none presents a risk to health in the United Kingdom. Extensive monitoring will continue, and its results will be made available to the public and to the House."
My Lords, that concludes the Statement.
Baroness David: My Lords, I should like to thank the Minister for repeating the Statement made by his right honourable friend in another place. However, I should like to make a slight protest about the time that the Statement arrived. It was delivered to this Front Bench at 3.33 p.m., which is not quite good enough, particularly when on hearing the Statement we find that it does not tell us a great deal that we did not already know from the newspapers.
The public needs to know exactly which department has the main responsibility for informing the public and for monitoring. We understand that MAFF is responsible for monitoring air, water and foodstuffs, particularly milk, but I believe that some department should have overall responsibility for telling the public exactly what they can and cannot do. It is public confidence that needs to be built up.
We are glad to have the reassurance that there is no tremendous danger and that if people are sensible, they will be perfectly all right. However, we have criticised the Russians for not making the disaster known to neighbouring countries, and I believe that we ourselves should be very careful to make sure that the public is informed as fully as possible. Surely it would be better that one department should have overall responsibility.
How is the public to be given continuous advice? Which department will do that? What additional monitoring and analysis have the Government set in motion following contamination in the British environment? The Statement declares that:
602
"The Minister of Agriculture, Fisheries and Food has set up an incident room from which advice on foodstuffs is available for members of the public".
That does not seem to me to be quite good enough. Information should be broadcast to the public, so that they will know; they should not have to ring up somewhere to find out what is happening.
We are told in the penultimate paragraph of the Statement that,
"The Secretary of State for Social Services is also keeping a close watch on imports of food".
We need a little more explanation about that aspect. My plea is that the public should be given the hard facts and should know what they ought to do and ought not to do. They should know also where that information is to be found and from which department it is coming.
Baroness Robson of Kiddington: My Lords, I join the noble Baroness, Lady David, in thanking the Minister for repeating the Statement made in another place. I join her also in objecting to the timing of the delivery of the Statement. I cannot remember whether I have before responded to a Statement on behalf of these Benches, but I was always under the impression that one had at least 20 minutes to half-an-hour to consider what one's contribution should be.
I take this opportunity, on behalf of these Benches and, I am sure, on behalf of every Member of your Lordships' House, to express sympathy for the citizens of the Ukraine and the people who have suffered as a result of this ghastly catastrophe.
The USSR has been accused of excessive secrecy, which criticism I wholeheartedly support. However, we must be very careful because I wonder to what extent there has been secrecy within our own nuclear industry in the past. For instance, I happened to see in the newspapers that an accident or a leak, however small, occurred at Dungeness last week. It did not seem to me that that information was published with the utmost urgency.
I should like to ask the Government whether they had expected such high levels of radiation to spread as far as this country when the accident seemed to be such a long way away. In the light of the Government's Statement that,
"The remnants of the cloud … arrived over the United Kingdom on 2nd May",
I ask at what stage did they activate our monitoring system? Was it activated the moment that we heard about the accident, or was there a certain feeling that the radiation was not going to reach us?
I wish to coment also on the impact of the accident on the Sizewell inquiry. One hopes that a report of the Sizewell inquiry will be published as soon as possible, even if it contains not the full result of the inquiry but the major recommendations, so that we may have a full debate in this country, based on the lessons that have been learned from the USSR.
The accident at Chernobyl is the most horrible to have happened in the nuclear power industry. It has highlighted the dangers to our generation, to people in Poland, and to people in Scandinavia. We in this country have been slightly more fortunate. But quite apart from the problems and dangers of Chernobyl, in

603
the light of that accident, we must consider the problems and dangers that we are building up for future generations, until, if ever, we find an acceptable means of disposing of long-life nuclear waste.
Lord Elton: My Lords, I am grateful to both noble Baronesses for their reception of the Statement. I can only apologise personally for the lack of lead time for the Statement. The fact is that the Statement was not available until literally a few moments before it reached the Opposition Front Benches. On reflection it might have been better if I had departed from the normal convention of the House, which is to make the Statement as soon as possible after the Secretary of State has spoken in another place, and had given the noble Baronesses time to digest the information. As it was, I followed what I understood to be the conventions of the House and took the first available opportunity.
I should like to agree at the outset with the extension of sympathy by the noble Baroness, Lady Robson, to the people exposed to these anxieties, not only in the Soviet Union but in other countries in Europe that have been or may be affected.
Perhaps I may now take the other points raised in sequence. I believe that the procedures that we now have are effective in keeping the public informed and reassured as to what is going on. The respective departments are responsible for their own aspects of monitoring and control but my own department, the Department of the Environment, is the co-ordinating department and it will be for us to ensure that information is continuously available. The noble Baroness, Lady David, has already referred to the information room at the Ministry of Agriculture, Fisheries and Food, but information is released both by us and by the national board direct to the national press.
I was asked about additional monitoring. There are about 20 radiological installations throughout the country. All of them increased their activity immediately the hazard became known. There was no hesitation about that for either procedural or presentational reasons. The watch at the ports is conducted by the Department of Health and Social Security, which has put a hold order on all imports described in the principal Statement. They are held until samples have been checked and cleared in Ministry of Agriculture laboratories. Until that time they cannot leave the ports.
I take note of what the noble Baroness said about procedures relating to the Sizewell inquiry. I do not doubt that there will be much to digest when this incident is behind us. That will be one consideration, because we shall be using this as a valuable opportunity to review the effectiveness of the procedures we are now going through and any bearing that they should have on policy.
That brings me, I think finally, to the question asked about the possibility of secrecy. I think it was the noble Baroness, Lady David, who said that she had recently read something in the papers. I think the noble Baroness is referring to a report about an alleged incident at Dungeness. The Health and Safety Executive advised that the incident at Dungeness A
604
power station which occurred on 31st March had no significant safety implications for the public or, indeed, for the personnel on the site. Therefore, there was no requirement for the incident to be reported under the arrangements for the early reporting of nuclear incidents to Ministers, as announced by my right honourable friend the Member for Croydon, Central on 26th July 1982. Nevertheless, the Central Electricity Generating Board did inform the Health and Safety Executive and Her Majesty's Radiochemical Inspectorate at the time of the event; so there was no question of secrecy.
Lord Lloyd of Kilgerran: My Lords, the Minister referred to the Sizewell inquiry. Can the Minister indicate whether or not the Sizewell inquiry report will now be postponed so that the chairman can take further evidence in view of this great disaster? If I may say so, I also congratulate the monitoring systems for coming into play so quickly in the United Kingdom.
Lord Elton: My Lords, I am not at present aware that the recent events will have a bearing on the Sizewell inquiry but, as I said, that is something we should consider when we have the wisdom of hindsight.
Lord Jenkins of Putney: My Lords, has the noble Lord any information about the radiological content of the cloud? As he is aware, all products of nuclear fission are lethal—and some are more lethal than others. Can the noble Lord say whether, for example, there is any evidence of plutonium?
Lord Elton: My Lords, I think I am not qualified to be drawn into the detail of the technicalities. I can say that the principal ingredient, and that which is the basis of our monitoring, is radioiodine and that the safety levels regarded as tolerable are reduced if there are other components in the fallout.
Lord Chalfont: My Lords, in the light of this accident, which may yet prove to be even more serious than we suspect, does the Minister draw any useful conclusions from the fact that most of the protests against it in this country have taken place against our own Department of Energy rather than against the Soviet Embassy? Will the Minister care to speculate on what would be happening in Grosvenor Square now if this accident and the secrecy surrounding it had taken place in the United States of America?
Lord Elton: My Lords, I am always advised not to answer hypothetical questions, but nevertheless I find this one rather tempting.
The Earl of Halsbury: My Lords, should we not regard our end of this tragedy as a pioneering field exercise on how we should arrange matters in a more serious set of circumstances? I do not doubt that much will be learnt from the incident but is not this the position? From our point of view nothing of significance has happened or is going to happen; there is nothing that the public need to know or to do from the standpoint of any immediate action which is at all likely to be taking place except for a few campers and farmers in northern Scotland who are invited not to

605
drink undiluted rainwater and to collect their water from diluted rainwater in ponds and lochs.
Lord Elton: My Lords, I am most grateful to the noble Earl for his intervention. I regard this occasion as a very valuable opportunity of forcing Ministers and officials to actually see the necessary muscles being flexed against a day when, it is to be hoped, they will never be required to use them. I do not think I should say what the Scots normally dilute their water with.
The Earl of Onslow: My Lords, is it not true that the Russians have several more nuclear reactors of the same type? Unless we know more details and have more information we shall be continually frightened by the precedent of actual damage as opposed to the fear of potential damage which has happened on the other side of the Atlantic. It is essential for us to ask the Russians for the maximum amount of information and at the same time tell the Russians that we will do anything we can to help them out of a position dictated by pride. We need to help the Russians as much as we possibly can to stop such a ghastly incident happening again. With publicity and with open government this becomes more possible. That is what happens in America but it does not happen in Russia.
Lord Elton: My Lords, help from this country is, of course, freely available to the Soviet Union if it wants it for this purpose. Beyond that I think I should only say that this incident has brought to all of us, in a very real sense, the fact that we now live in a community of nations on a very small planet on which the conduct of each affects all.
Lord Stoddart of Swindon: My Lords, may I revert to the question asked by the noble Lord, Lord Lloyd of Kilgerran, about the Sizewell Inquiry? I do so particularly in relation to the unusually complacent attitude taken by the noble Earl, Lord Halsbury. Can the Minister confirm that the Sizewell Inquiry is due to report in September: but would it not be right, and can we not have the assurance, that the inspector will now be asked to take into account what happened at Chernobyl? We must particularly bear in mind that the Sizewell reactor, although not of an identical or even, perhaps, similar type, is nevertheless a lightwater reactor as opposed to a gas-cooled reactor. That is an important point and I hope the noble Lord will take it on board.
Lord Elton: My Lords, I am also always careful to take on board anything that is said to me at this Dispatch Box in discussion of a Statement in another place. As to the technology of the proposed plant at Sizewell, I think I can safely assure the noble Lord opposite that the plant will not suffer from the same design weaknesses as those we believe to have affected the plant in Russia—but, of course, I do not know the design of that plant, only that it was unshielded. That is a mistake which I do not think we shall make. The inquiry is due to conclude by the end of the year, and we intend to publish its findings in due course.
Lord Mackie of Benshie: My Lords, I wonder whether the Minister can tell us how the level of
606
radiation in this country following this accident compares with the level of radiation during the time of the air testing of nuclear weapons.
Lord Elton: Not without notice, my Lords, but I shall be very happy to find out and put my answer in the Library in the form of a letter to the noble Lord.
Viscount Massereene and Ferrard: My Lords, I wonder whether the Minister can tell us, following a disaster similar to the one that has occurred in the Ukraine, how long such a nuclear cloud may drift around before dispersing. Does he have any information on how it is affected by temperature or rain? Do we have any information on that? Presumably it will have to disperse some time. Does the Minister know?
Lord Elton: My Lords, the cloud is weakened by dispersal as it travels within the pattern of the air stream, which can be monitored by the meteorological services. It is weakened by fall-out of the particles from it and by the radiological decay of those particles whether or not they have fallen.
Lord Tordoff: My Lords, can the noble Lord the Minister give us any indication as to whether there is any continuing emission from the derelict power station, in which case we could have further incidents of this sort?
Lord Elton: My Lords, I have no first-hand evidence of what is going on at present in Russia. I do not doubt that my right honourable friend the Secretary of State for the Foreign and Commonwealth Office is pursuing that matter with the Russians at this moment.
Lord Stodart of Leaston: My Lords, with regard to the water in the far north of Scotland that people are supposed not to drink, even when laced with the famous medicament with which they usually lace it, can my noble friend say how quickly monitoring of water is carried out in that area? Does it take some time, or is there a monitoring station fairly near?
Lord Elton: My Lords, the monitoring takes place at least every 24 hours.

Animals (Scientific Procedures) Bill [H.L.]
4.4 p.m.
Consideration of Commons amendments resumed.

COMMONS AMENDMENT
16 Clause 21, page 14, line 3, leave out ("may") and insert ("shall").
Viscount Davidson: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 16.
I do not propose to become involved in a debate with the noble Lord, Lord Houghton of Sowerby, as to whether "shall" should equal "may" or whether "may" should equal "shall", but I certainly took note of the succinct comment of the noble and learned Lord, Lord Scarman. Suffice it to say that I am sure that several noble Lords from all parts of the House will be particularly pleased to see this small but significant change in the Bill.
During your Lordships' consideration of the Bill at Committee and Report stages I was urged, especially by the noble Lords, Lord Melchett, Lord Beaumont of

607
Whitley and Lord Airedale, to agree to the substitution of "shall" for "may" in Clause 21(2), which provides for codes of practice relating to the care and accommodation of protected animals and their use in regulated procedures. At that stage we were somewhat reluctant to make such a change, merely because our initial intention was not to issue codes ourselves but to approve those being prepared by experts working under the joint auspices of the Royal Society and the Universities Federation for Animal Welfare. However, after further consideration and in view of the strong and sustained representations made to us on this point, we decided that it would be desirable for the Secretary of State to have this obligation placed upon him, thus ensuring that whatever else happens there will be codes of practice issued under the Secretary of State's name. The amendment, I should add, rightly does not prevent us from approving codes of practice issued by other persons, in addition to those that we must issue ourselves. One way or another, we shall certainly want to take full advantage of the painstaking work being carried out by the Royal Society working party, which I understand is making good progress.
Together with the amendments to the same clause which we shall come to next, this amendment, if anything, still further enhances the status of the codes of practice which will provide very necessary guidance to licensees and others on the standards of care, accommodation and other matters expected of them by the Secretary of State. I commend the amendment to the House. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Viscount Davidson.)
Lord Mishcon: My Lords, I wonder whether this is the appropriate time and place to mention the matter of "may" and "shall" in a little more detail. If it is not, then as usual my words will fall upon infertile ground. I should like to say that there are many lawyers and non-lawyers in this House who have taken up their own time and that of other Members of your Lordships' House in arguing that "shall" is mandatory and "may" is permissive.
The noble and learned Lord, Lord Diplock, with the authority that he carries, said that the judges will always interpret "may" as if it were "shall" and "shall" as if it were "may". While I am indebted to him for the clarity and brevity of his remark, it seemed to me to predicate to the House a very difficult proposition. I only ask at this stage for the matter to be considered, if someone takes the trouble to read the Official Report. It would save a great deal of time and trouble if an authoritative statement could be made to the effect that in the drafting of legislation it makes not a scrap of difference whether one says "may" or "shall" because both those words are imperative. If that were possible, I believe that there would be clarity in your Lordships' House where at present there is doubt.
Lord Campbell of Alloway: My Lords, I think that perhaps the noble and learned Lord, Lord Scarman—not the noble and learned Lord, Lord Diplock—was making an observation which was not serious. I agree that the matter certainly requires
608
clarification if it was intended as a serious observation, but I did not understand it as such.
Lord Boyd-Carpenter: My Lords, it was a joke, was it not?
Lord Campbell of Alloway: I thought it was a joke, my Lords.
Lord Mishcon: My Lords, I crave the leave of the House to apologise for mentioning the revered name of the noble and learned Lord, Lord Diplock, when I meant to say the name of the equally revered (but, thank heavens, with us) noble and learned Lord, Lord Scarman. I believe it was never the habit of the noble and learned Lord to make a jocular remark which might be misinterpreted. He never did it on the Bench, and he has never done it in this House, though we always appreciate his wit. I think that he really meant what he said. We really ought to know whether he did or did not mean it.
Lord Houghton of Sowerby: My Lords, I do not want to prolong this discussion at all but perhaps I may put forward a layman's view of this matter. I always understood that if an Act of Parliament lays down that a Minister "shall" do something then failure to do that can be met by a charge of breach of statutory duty; but if it were said that he "may" do something and he fails to do it, he cannot be so charged. The obligation is there but the statutory duty is not quite there. Is this the explanation, or need we not bother?
Viscount Davidson: My Lords, as a very simple layman I certainly am not competent to enter these lists either as a combatant or a referee, but I am sure that what has been said will be noted in the appropriate quarters.
On Question, Motion agreed to.

COMMONS AMENDMENTS
17 Clause 21, page 14, line 5, at end insert—
("(2A) The Secretary of State shall consult the Animal Procedures Committee before publishing or altering any information under subsection (1) above or issuing, approving, altering or approving any alteration in any code issued or approved under subsection (2) above.
(2B) A failure on the part of any person to comply with any provision of a code issued or approved under subsection (2) above shall not of itself render that person liable to criminal or civil proceedings but—

(a) any such code shall be admissible in evidence in any such proceedings; and

(b) if any of its provisions appears to the court conducting the proceedings to be relevant to any question arising in the proceedings it shall be taken into account in determining that question.

(2C) The Secretary of State shall lay before Parliament—

(a) copies of any information published or code issued by him under subsection (1) or (2) above and of any alteration made by him in any such information or code; and

(b) copies of any code approved by him under subsection (2) above and of any alteration approved by him in any such code;

and if either House of Parliament passes a resolution requiring the information, code or alteration mentioned in paragraph (a) above, or the approval mentioned in paragraph (b) above, to be withdrawn the Secretary of State shall withdraw it accordingly; and where he withdraws information published or a code issued by him or his

609
approval of a code he shall publish information or issue or approve a code, as the case may be, in substitution for the information or code previously published, issued or approved.
(2D) No resolution shall be passed by either House under subsection (2C) above in respect of any information, code or alteration alter the end of the period of forty days beginning with the day on which a copy of the information, code or alteration was laid before that House; but for the purposes of this subsection no account shall be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.")
18 line 6, after ("publish") insert ("and lay before Parliament")
19 line 10, leave out subsection (4).
Lord Glenarthur: My Lords, I beg to move that the House do agree with the Commons in Amendments Nos. 17, 18 and 19 en bloc.
These three amendments are linked. Together they make much more detailed provision for the procedures governing the production and publication of the guidance and codes of practice provided for in Clause 21(1) and 21(2), as well as clarifying the status of the codes of practice in legal proceedings.
Amendment No. 17 is the substantive amendment, and it inserts four new subsections into Clause 21. Subsection (2A) requires the Animal Procedures Committee to be consulted before guidance or codes of practice are issued or altered under Clause 21. It was suggested to us that there would be value in placing this obligation on the Secretary of State. It ensures that the Animal Procedures Committee is fully involved in scrutinising the guidance and codes of practice which underpin the new controls in the Bill and in monitoring any proposed changes to them.
Subsection (2B) fulfils an undertaking that I gave on behalf of the Government at Third Reading in your Lordships' House to clarify on the face of the Bill the status of the codes of practice in relation to legal proceedings. The new subsection provides that failure to comply with a provision of the codes is not of itself a basis for criminal or civil proceedings. However, the codes are to be admissible in evidence in proceedings, and any provision in them which appears relevant to the court shall be taken into account. This is a helpful clarification, and much of the credit for bringing it about must go to various noble Lords, perhaps notably the noble Lord, Lord Airedale, who argued for it tenaciously and skilfully at an earlier stage.
The purpose of the subsections (2C) and (2D) is to provide an opportunity for closer scrutiny by Parliament of the guidance on the operation of the Act and the codes of practice, to which I have already referred. The amendment provides for the note of guidance and also codes of practice which may be issued or approved to be laid before Parliament and to be subject to the negative resolution procedure. The same procedures are also to apply whenever the guidance is altered or any alteration is made or approved in a code of practice. If one of these documents is required to be withdrawn by a resolution of either House, my right honourable friend is obliged to withdraw it and to lay a new document in its place.
Amendments Nos. 18 and 19 are consequential on the insertion of new subsections (2B), (2C) and (2D) in
610
Clause 21. Amendment No. 18 provides for the statistical information which is required to be published under subsection (3) to be laid before Parliament, but in this instance no special procedure for scrutiny is required since the statistics are in the nature of a record. Amendment No. 19 deletes subsection (4) of Clause 21 which is made redundant by the reorganisation of the other provisions in the clause.
These are substantial amendments whose effect is to enable Parliament to exercise a close and continuing watch over the operation of the legislation in the years ahead. The guidance and codes of practice, whose important role has often been alluded to in our debates, may not be published or altered without the opportunity for Parliament to study and, if necessary, debate what is proposed. Together with the new requirement to consult the Animal Procedures Committee and the clarification of the status of codes of practice in legal proceedings, these changes add up to a worthwhile series of amendments and I commend them to your Lordships.
Moved, That this House do agree with the Commons in the said amendments.—(Lord Glenarthur.)
Lord Campbell of Alloway: My Lords, noble Lords may well wish to take note that this set of Commons amendments, Nos. 17 to 19, directly reflects the influence of the revisory role of your Lordships' House; this as exercised in the course of debate on amendments moved by the noble Lords, Lord Melchett and Lord Airedale, but on which there was no Division. It is a matter on which those noble Lords in particular, my noble friend the Minister and indeed the Government are much to be congratulated.
This set of amendments affords essential clarification of the status of codes of practice concerned with the care of protected animals and their use for regulated procedures. It is a code which when the Bill left your Lordships' House was a code of mere guidance, without legal effect, as the marginal gloss to Clause 21 still, in error, indicates. As I understand subsection (2B) in Amendment No. 17, it returns to your Lordships' House for approval, but as a code which if relevant has to be taken into account in all courts of first instance and on appeal in all revisory courts; and the internal nexus with contraventions of the Bill is also established.
The code now serves as an aid to primary legislation and as such is a type of subordinate legislation. Hence the inclusion of subsections (2C) and (2D) to protect and preserve the legislative role of Parliament as it affects subordinate legislation within the established constitutional framework. There is mandatory consultation under subsection (2A) and that can be enforced by judicial review.
Although it would not be customary to resolve for withdrawal, and although amendments cannot be made, the sanction of a resolution for withdrawal remains effective by resort to the usual channels. Your Lordships may well consider that the swift action of the Government—the revision of the status of this code—is not only commendable but merits a measure of enthusiastic acclaim.
4.15 p.m.
The Earl of Halsbury: My Lords, it is not my intention to initiate a process of ping-pong by dividing the House against Amendment No. 17. I nevertheless deplore it. The Act as it was represented an agreement between two groups of people, both of them reasonable. The genuine animal lovers—whose leader in your Lordships' House has always been acknowledged to be my friend, the noble Lord, Lord Houghton of Sowerby, and I, for many years representing the reasonably-minded animal experimenters in laboratories who are by no means indifferent to animal welfare—came together on the basis of trusting one another and getting our close colleagues to meet to work out a scheme to recommend to the Government how such things should best be managed.
But there is a third group of people involved—the militants, who are a mixed bag. They consist of those who are so obsessed with the suffering of animals in laboratories that they are unmindful of the suffering of animals elsewhere or the suffering of human beings under all circumstances; those who are professional protesters and who will protest against anything without the slightest interest in what it is they are protesting against; and lastly those representing an infiltration by the "nasty brigade" who move them in the direction of violence—the militants.
Amendment No. 17 gives a permanent parliamentary footing for that militant tendency. I do not of course mean Militant Tendency in the political and trade union sense. Your Lordships and the other place will be permanently troubled by interventions to modify the law. It will not be treated as res judicata—a pronouncement by Parliament that will in the normal course of events perhaps be taken under review, and it may be in 20 or 30 years' time, with discretion to the Minister to exercise a certain pliability over what he will allow. It will be the subject of permanent pressure for your Lordships' House and for the other place, and neither House will manage it well because they will not be sufficiently well informed on the detail to be able to intervene in the decision effectively.
The question of whether codes of guidance should be issued by a Minister or written into a Bill has been the subject of innumerable debates in your Lordships' House in one context after another. The case can be put simply. If one wants a code of guidance it should be drafted by a Minister with power to vary it. If one builds it into the Bill we have something that cannot be varied and there would have to be another Bill which must await parliamentary time to come before the legislature.
I do not believe that the amendment represents a reasonable alternative to either of those. I think that it will entail continuous intermeddling by pressure groups with detailed issues which Parliament is not well qualified to decide and to which it does not have the time to give attention.
Lord Henderson of Brompton: My Lords, I should like to enter a note of disssent to what was stated by the noble Earl, Lord Halsbury. I hope that things will not work out as he suggests. I have nothing but praise for the amendments, and I congratulate the Government on introducing them in the House of Commons. As
612
stated in another place, the question of the proper legal status of statutory codes of conduct has exercised this House for a great many months. Here, we find that the Government have responded in full measure to the persistent efforts of the noble Lord, Lord Campbell of Alloway, and others to try to get this matter right not merely in the Bill we are discussing but also in other measures that come before us. If the Government intend to pursue this line, as I hope they will, in other Bills, there will be no need for codes of practice to be scrutinised so rigorously as now happens in your Lordships' House.
It is important that codes of practice should be clarified in relation to legal proceedings, for legal proceedings are bound to take place. It is of the utmost importance that the courts and all those involved should know exactly what is the intention of the Act. That is why I welcome so much these amendments and also the previous amendment, Amendment No. 16, moved to this clause.
I should like to ask the Minister two questions. I apologise for the fact that I have not given him notice of them. I am particularly concerned about subsection (2C). I welcome the fact that the subsection provides for either House of Parliament to resolve that any information, code or alteration published and laid before Parliament by the Minister shall be withdrawn, and that the Secretary of State, in that event, shall withdraw it accordingly. This is, to my mind, a great improvement in our statutory procedures for subordinate legislation. I do not recall any previous piece of legislation in which this precise formula has been used. Until now when there has been subordinate legislation subject to the negative procedure it has been necessary for anyone who wished to question it to pray against it—to pray that it be annulled or that it be not made in the form in which it had been laid.
Here, it seems to me, we have a great improvement. There is not the confrontation of the annulment procedure. Instead, there is a requirement for withdrawal, clearly, so that the Minister can take into account what either House has said, without the element of confrontation implicit in the annulment procedure. I welcome very much this procedural innovation which is of considerable importance. I should like to know whether this is the first occasion on which it is to be used. If so, I would wish to congratulate the Minister on it.
Secondly, it is not clear to me, although the amendments themselves may be clear, whether if the Minister withdraws, in accordance with a resolution of either House, and then re-lays, the instrument that he lays a second time is also subject to the possibility of a resolution to withdraw by either House of Parliament. I would be very grateful if the noble Lord could answer those two questions.
I believe, however, that the proposals we are discussing today are a substantial improvement and a response, as the noble Lord, Lord Campbell of Alloway, said, to persistent questioning in this House. I hope very much that this will have a pervasive influence on future statutes containing subordinate legislation on codes of practice.
Lord Houghton of Sowerby: My Lords, I should like, first, to welcome the comments of the noble Lord,

613
Lord Campbell of Alloway, who has taken a special interest in the status of codes of practice which are being increasingly used as part of the machinery of the law and of government. One day, no doubt, we shall have some more formal way of defining what shall happen to codes of conduct and codes of practice and how they may be dealt with. The noble Earl, Lord Halsbury, sounded a note to which I do not object. The noble Earl came very close to proving that politics is the art of the possible. His remarks suggested that we were probably coming very close indeed to some of the sensitive nerves of parts of the scientific world. Nevertheless, the Minister needed no real persuading, if I may say so, about what is proposed. It was welcomed by the tripartite group of advisers who have been called into consultation by the Minister from time to time.
Within this field of action and administration much is bound to be hidden from the public. The public have a great concern about what goes on in the laboratories. But for all sorts of reasons, most of them good, one cannot admit the public to witness what goes on in the laboratories in the same way that many people may witness what goes on in hospitals. So the public concern, now written into the Bill, has to be entrusted to someone who will see that it is properly implemented and suitably administered. Who will do that? I have been keen about transferring accountability as well as responsibility to the Secretary of State. I have also been keen to establish the responsibility of Parliament in this matter. The public concern is perhaps more fully entrusted, to their satisfaction, to Parliament than to the authority given to a Minister. This enables Parliament in both Houses to scrutinise and to raise questions upon any proposals or changes that the Secretary of State wishes to make in the code of conduct that he lays before Parliament for attention. That is important.
I have said to people who criticise the Bill—there has been plenty of criticism—that, first, we had to get animals into politics in order to achieve anything at all but that, secondly, we want to get animals into parliamentary democracy, with some responsibility fixed upon Parliament. Here it is, not only in the present connection but in any debate that Parliament may have from time to time on reports of the Secretary of State on the discharge of his responsibilities. I hope that this responsibility will not be abused either in another place or here. I trust that matters raised will be those of genuine concern and that the approach to them will be constructive and understanding. I believe that I saw the noble Earl, Lord Halsbury, shaking his head for a moment. Both of us know what strong, emotional and militant forces lie in the background to this problem; we know that. From time to time the newspapers are not lacking in presenting the potentialities for militant action, or indeed in giving publicity to those that actually take place. It is a very dangerous and emotive area of public concern, and we have to be careful how it is handled.
Nevertheless, that is no reason for not putting the matter firmly in the hands of Parliament. It is Parliament's responsibility. I hope that Parliament will not regard it as just another reserve power which they do not trouble to use, that everything goes by on
614
the nod, and that sort of thing. Here is the opportunity for matters to be raised under the negative procedure. It does not require the Government to come to both Houses for a positive approval of what they do. Very often that is unnecessarily provocative of debate and criticism. The negative procedure leaves it to those who have concern in either House to raise the matter in accordance with the procedures laid down.
I cannot comment on some of the procedural matters raised by the noble Lord, Lord Henderson of Brompton, whose experience and knowledge in this field is unparalleled. However, from my own experience, I think that this is a very good provision in the Bill. It was inserted in the Bill by general agreement, and those people believed, as I do, that it strengthened the position of Parliament in relation to the use of animals in laboratories. That is something which was undertaken on behalf of the public, which the public should appreciate and they should be content for this supervision to be exercised by their representatives in Parliament.
4.30 p.m.
Lord Melchett: My Lords, as I was one of those who moved amendments to this effect when we debated the Bill initially, I very warmly welcome the changes which the Government made in another place, and, not for the first time, I very strongly disagree with what the noble Earl, Lord Halsbury, had to say.
The noble Earl mentioned three groups with an interest in this legislation. He omitted a fourth— the general public. There are people outside Parliament and the particular interest groups that he mentioned who have followed this legislation with great interest. I believe that there is clear evidence that increasing numbers of people find all experiments on animals morally repugnant, which is a view I myself share.
This legislation does not yet reflect what I believe to be the general public's view of experiments on animals, but it moves some way towards recognising it. These amendments are a significant step in that direction and are very welcome because they will allow continuing oversight of what is done under this legislation. If this legislation is to work, and to be seen to work successfully by those outside Parliament and the outside interest groups, in my view it must lead to a continuing relentless decline in the number of experiments on animals, in the degree of suffering inflicted on animals, and, in view of the "re-use" clause which has now been inserted in the Bill, it must particularly lead to a decrease in the number of animals involved in experimentation.
I believe that these amendments would help in that. There is a tremendous job to be done, not just by the scientists involved—and many of them will play their part—the animal welfare organisations and the Home Office, but by the general public taking an interest in what is done under this legislation to ensure that it works to achieve those objectives, as I hope it will.
Lord Mishcon: My Lords, my intervention will be brief, but it follows that the, as one would expect, interesting contribution by the noble Lord, Lord Henderson of Brompton, in asking the question whether, if information, a code or anything else under

615
subsection (2A) is withdrawn, the new code, information, or whatever it be, issued is subject to the same procedure. I very much hope that the noble Lord the Minister will say that it is, and one would imagine that it comes within the definition.
My question is in furtherance of that. I was considering very carefully whether or not I ought to put down an amendment for clarification, and I decided that, very likely, it would be contrary to the wishes of the House because no one wants this Bill to be held up. However, the following is the point that occurred to me.
When we deal with statutory orders and instruments we are in the habit of a procedure where we either affirm or negative but we do not amend—we are not allowed to. Unless there are reasoned resolutions for withdrawal placed before either House of Parliament, one is likely to run into the following difficulty. One Member of your Lordships' House may say that he objects to line 1 or paragraph (a) of the code. Another Member may say that he does not object at all to line 1 or paragraph (a) of the code, but that he objects to section 3 or line 4 of the code. If we do not have a reasoned resolution a vote will be taken for the withdrawal of the code, information or whatever it may be.
It seems to me that the Minister is then left in the impossible position of not knowing whether the House has called for the withdrawal because of the objection of Member A or the objection of Member B, or because other Members of the House who did not speak at all do not like the whole code. Therefore, I merely ask whether a procedure can be laid down without our amending this Bill—which I do not want to do; I do not want to suggest an amendment to the Commons amendment—whereby a reasoned resolution for withdrawal will have to be given before the House and voted on, so that the poor Secretary of State knows why the code, information or whatever it may be, has been withdrawn by the wish of the House.
Lord Glenarthur: My Lords, I am grateful to my noble friend Lord Campbell of Alloway for his welcome to this addition to the Bill. I am grateful for the comments which he let me have about it in writing beforehand. I am glad that it finds favour both with my noble friend and with the noble Lord, Lord Henderson of Brompton.
My noble friend Lord Campbell mentioned the question of the note in the margin; I believe he referred to it as the "marginal gloss". My noble friend has raised an interesting point. We looked at what I believe is called the shoulder note when preparing the amendments to Clause 21. We considered that the words in the note were still apt to describe in general terms the contents of the clause as amended. The note itself is not part of the clause. It is intended to give the reader only an indication—my noble friend may call it a flavour—of the contents of the clause without describing it in detail. A more detailed shoulder note would tend to repeat the contents of the clause, and to some extent that would defeat its purpose.
I very much agree with the noble Lord, Lord Houghton of Sowerby, when he answered some of the points raised by the noble Earl, Lord Halsbury, about
616
the peculiar sensitivities of this particular Bill. I know that the noble Earl, with his vast experience of similar legislation, will realise just how important it is to get this absolutely right. I agree with the noble Lord, Lord Houghton, when he said that it was important—and he referred to the consultation that has been going on—that every possible step should be taken in order to try to get this Bill onto the statute book.
I believe that the noble Earl's fears, that it would lead either to a permanent pressurisation for change in the way that he imagined or that it would result in a permanent parliamentary footing for those who sought, by some rather extreme methods to try to achieve change, are groundless. I do not believe that that will be the case. This new clause goes a long way towards satisfying not just parliamentary but also public approval for the changes that the Bill proposes to make.
In answer to the first question of the noble Lord, Lord Henderson, I am advised that subsection (2C) is paralleled in the Mental Health Act 1983. Precisely which part of the Mental Health Act 1983 I cannot tell him, but in that Act he will find something similar. As regards the second version also being subject to the procedure, I can assure both the noble Lord, Lord Henderson, and the noble Lord, Lord Mishcon, that, yes, that is the case.
The amendment does not itself allow either House to amend the proposed code. It must either reject it or not, as the case may be, which I believe is one of the points that the noble Lord, Lord Mishcon, made. If the code is rejected, the Secretary of State will of course note what has been said. Whether a reasoned amendment is possible is a procedural matter, I am advised, for either House to decide.
We are getting into the realm of procedural matters in a way that I am quite unqualified to answer; but I understand that it would be possible to do it in the way that I have just described. If I can help the noble Lord further after reading carefully the point he has just made by writing to him about it, and of course copying that information to others concerned about it, I hope that that will meet his concern.
Lord Mishcon: My Lords, with the leave of the House, I should like to say that I am most grateful to the noble Lord the Minister. It was a little unfair of me, because I should have given him notice of this question and I was not able to do so. I shall be delighted if he takes up the matter and writes to me, and either says that my fears in regard to the Secretary of State not knowing why the thing had been withdrawn, if there is a diversity of view in the House, are groundless, or if not whether some procedure will be hit upon. We do not want to take up any more time on the point now.
Lord Glenarthur: My Lords, I am grateful. I shall certainly do what the noble Lord suggests. I am grateful to the noble Lord, Lord Melchett, and others for commenting. I believe that this is a worthwhile change, and I beg to move.
Lord Campbell of Alloway: My Lords, with the leave of the House, and before the noble Lord sits down, perhaps I may say on a procedural point that I took the same point unofficially as the noble Lord,

617
Lord Mishcon, has taken. I have been advised that it is the sanction of withdrawal that can operate, according to the customs of the House through the usual channels, so that the resolution is not pressed to a withdrawal resolution, and the Minister then has an opportunity of studying what was said in debate. That apparently, so I am advised, works.
Lord Mishcon: My Lords, the mysteries of the procedure of your Lordships' House know no end.
On Question, Motion agreed to.

COMMONS AMENDMENT
20 Clause 25, page 15, line 32, leave out ("necessary by force") and insert ("need be by such force as is reasonably necessary")
Viscount Davidson: My Lords, I beg to move that the House do agree with the Commons in Amendment No. 20.
During the Committee stage discussion of the Bill in another place it was suggested that the provision for a power of entry contained in Clause 25 should be amended slightly. As originally drafted, the clause made reference to a warrant authorising a constable to enter a place, "if necessary by force". The suggestion made was that it might be helpful to insert the word "reasonable" into this formulation, so as to emphasise that the power of entry only allows the use of as much force as is necessary to achieve the legal ends. We felt that this was a helpful and sensible suggestion, and at Report stage in another place brought forward the amendment which is now before your Lordships. I commend this amendment to the House.
Moved, That this House do agree with the Commons in the said amendment.—(Viscount Davidson.)
On Question, Motion agreed to.

COMMONS AMENDMENT
21 Clause 29, page 17, line 24, leave out subsection (4) and insert—
("(4) In section 20(5) above for the reference to Parliament there shall be substituted a reference to the Northern Ireland Assembly and in section 21 above—

(a) for the references to Parliament or either House of Parliament there shall be substituted references to the Assembly;

(b) in subsection (2C) after the word "if" there shall be inserted the words "within the statutory period (within the meaning of the Interpretation Act (Northern Ireland) 1954)"; and

(c) subsection (2D) shall be omitted.").

Lord Glenarthur: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 21. This is a purely technical amendment.
Moved, That this House do agree with the Commons in the said amendment—(Lord Glenarthur.)
On Question, Motion agreed to.

COMMONS AMENDMENT
22 Schedule 1, page 19, leave out lines 5 to 43 and insert—
("A. Animals other than foetal, larval and embryonic forms

1. Overdose of anaesthetic suitable for the species—

(i) by injection.

(i) All animals.

(ii) by inhalation.

(ii) All animals up to 1 kg bodyweight except reptiles, diving birds and diving mammals.

(iii) by immersion.

(iii) Fishes Amphibia up to 250 g bodyweight.

(Followed by destruction of the brain in cold-blooded vertebrates and by exsanguination or by dislocation of the neck, in warm-blooded vertebrates except where rigor mortis has been confirmed).

2. Dislocation of the neck.

Rodents up to 500 g bodyweight other than guinea-pigs.

(Followed by destruction of the brain in fishes).

Guinea-pigs and lagomorphs up to 1 kg in bodyweight.

Birds up to 3 kg bodyweight.

Fishes up to 250 g bodyweight.

3. Concussion by striking the back of the head.

Rodents up to 1 kg bodyweight.

Birds up to 250 g bodyweight. Fishes.

(Followed by exsanguination or dislocation of the neck in rodents and birds and destruction of the brain in fishes).

4. Decapitation followed by destruction of the brain

Cold-blooded vertebrates.

5. Exposure to carbon dioxide in a rising concentration using a suitable technique followed by exsanguination or by dislocation of the neck except where rigor mortis has been confirmed.

Rodents over 10 days of age up to 1½ kg bodyweight.

Birds over 1 week of age up to 3 kg bodyweight.

B. Foetal, larval and embryonic forms

1. Overdose of anaesthetic suitable for the species—

(i) by injection.

(i) All animals.

(ii) by immersion.

(ii) Fishes Amphibia.

2. Decapitation.

Mammals.").

Lord Glenarthur: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 22. This amendment introduces a number of improvements to Schedule 1 of the Bill. I understand that these changes are welcomed by the British Veterinary Association and by the Universities Federation for Animal Welfare, and indeed were drawn up in consultation with these bodies. I do not think it is necessary for me to go into the technical changes here which deal respectively with methods of killing suitable for use on animals other than foetal, larval or embryonic forms (A), and with methods of killing suitable for use on foetal, larval or embryonic forms (B).
The contents of this schedule are not fixed for all time. We shall keep this important subject of killing under close review and shall not hesitate to propose further amendments to the schedule if this becomes necessary. In any case, this is not an exhaustive list of humane methods of killing laboratory animals: there are many others. However, in our judgment and that

619
of our expert advisers, the others require some skills and therefore need to be controlled through the licensing system. I beg to move.
Moved, That this House do agree with the Commons in the said amendment—(Lord Glenarthur.)
4.45 p.m.
Lord Houghton of Sowerby: My Lords, as this is the final amendment with which we have to deal this afternoon, and in supporting that we should agree with the Commons in this amendment, I should like, before we part with the Bill for the Royal Assent, to express my great appreciation of the co-operation on a number of sides of the House in the compilation of the Bill and in discussing the amendments dealt with in another place.
This has again been a fruitful form of collaboration between the Secretary of State and his Ministers and those who have taken upon themselves the responsibility of representing responsible opinion in the animal welfare and professional sides of this discussion. I hope when this Bill reaches the statute book it will have a satisfactory future. I also hope many of the misgivings people are expressing about this Bill will be removed by the experience that we have of it. I certainly hope that Parliament will continue to take an interest in the workings of this measure for years to come, and will look back on the time that we have spent on it as being one of the historic periods of constructive work in both Houses of Parliament.
Lord Auckland: My Lords, I believe that this Bill has accomplished one important achievement. It has virtually united the pharmaceutical industry, the chemical industry, and all the industries concerned with the manufacture of many of the products to be used under the Bill with many of the animal welfare societies. I believe that the noble Lord, Lord Houghton of Sowerby, my noble friend the Minister and my honourable friend the Member for Putney have had much to do with this happy situation. At a time when there is much legislation which is extremely controversial, it is an achievement of both Houses of Parliament to get on the statute book a piece of legislation which really is important.
Lord Mishcon: My Lords, at times like these courtesies flow, from Bench to Bench, and it is right that they should do so. I should like from these Benches to pay my tribute to the noble Lord, Lord Glenarthur, as well as to the noble Viscount, Lord Davidson, for having handled this Bill with great charm and great clarity of mind.
I am glad that a tribute was paid to my noble friend Lord Houghton of Sowerby. He is rather accustomed to them on any occasion when animals are mentioned. I am not going to say that he is not entitled equally to a tribute upon other subjects; but this of course is the one dearest to his heart. I should also like to pay tribute to the constructive work done in all stages of this Bill by my noble friend Lord Melchett.
I do not think it would be proper for me to end this list of thanks without mentioning the noble Earl, Lord
620
Halsbury, who behind the scenes, and indeed in front of the stage, has done much to make this Bill possible, representing with such authority and distinction the interests that he does.
Lord Glenarthur: My Lords, with the leave of the House, I merely join with those who have expressed a farewell to this Bill now that it is about to receive Royal Assent. It has been a Bill which both my noble friend Lord Davidson and I have enjoyed doing in your Lordships' House. That is very much due to the manner in which it has been tackled, and, particularly, to the way that the noble Lord, Lord Houghton of Sowerby, and his considerable team of advisers, have helped my right honourable friend Mr. Mellor and myself, and everybody associated with it, in bringing it forward in the calm way in which we have been able to develop it as the past few weeks and months have gone by. When it was introduced it was represented as the first change for nearly 100 years, and to that extent it is significant. I, too, think that the noble Earl, Lord Halsbury, will be pleased at last to see something for which he has worked for so long finally reach the statute book. I am grateful to all your Lordships.
On Question, Motion agreed to.

Agriculture Bill
4.50 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move that this Bill be now read a second time.
These are significant times for the agriculture industry—times of change for which the industry needs to plan. This change can be divided into two aspects which dominate this Bill. Firstly, there is the shape of the industry itself. New technologies and the new pressures of over-production and reduced margins make some reassessment necessary. Secondly, there is the ever-increasing awareness of the needs of the environment. The aim of this Bill is to develop a partnership between the Government and the agriculture industry so that together we can not only respond to these changes but also bring some of them about.
The first aspect, then, of this need for change relates to the shape of the agricultural industry itself. With each passing month, it seems, we face new demands and new pressures, which seem greater than those that went before. We are often told how the industry needs to turn more to the market and must change with the times.
This leads to difficult questions for the Government's advisory services. How best can advice be adapted to the new pressures facing the industry? How can the partnership between ADAS and the industry which has been so successful to date be maintained and strengthened in future years? On which subjects should advisory effort be concentrated, and how can advisory services improve the speed and flexibility of response to changing needs? There are no instant answers to all these questions, but one thing is clear. The best way of finding out what the industry wants and values is to enable it to choose the services it will pay for.

621
Clause 1 accordingly enables the Government to make available a considerably wider range of advice on agricultural and rural matters than has previously been the case, and puts on a common footing the various existing provisions relating to advisory services. Because the scope of the clause has to be drafted in wide terms to enable ADAS to respond to requirements that cannot be foreseen at present, it would not be appropriate to make these requirements mandatory, as in the legislation it replaces. ADAS needs to be able to move resources quickly into newly-developing areas of interest to the industry and out of areas in which the industry is no longer interested.
The clause will also make it possible to charge for advisory services. This will enable farmers to have the clearest possible say in the kinds of services they receive. That is crucial, at a time when the agricultural industry is facing a period of unprecedented change. There is no point in providing services that farmers do not value or which are no longer relevant to their needs. However, I should like to repeat here the firm commitment which was given when the clause was discussed in another place. There are no plans to charge for the kind of advice now given to farmers on conservation, rural diversification or animal welfare matters.
Clauses 2 and 3 of the Bill are based on the same principle; namely, that the beneficiaries of a service should be aware of, and contribute towards, the cost of its provision. Clause 2 will enable the cost of enforcing seeds regulations to be taken into account when fees are set to recover the cost of official seed certification services. All the costs incurred in actually certifying seed are already fully recovered at the present time, but this clause will allow expenditure on the important task of policing certification also to be recouped.
Clause 3 deals with the powers that are being sought to charge for certain plant health work. Producers already make a contribution to the cost of plant health work, which benefits the environment as well as the farming industry, by taking preventative measures and by bearing the costs when a pest or a disease is found and a crop has to be destroyed. There are, however, two areas of plant health work where we are providing services which are of clear benefit to growers and others. Accordingly, Clause 3 seeks to amend the Plant Health Act 1967 by inserting a new clause which gives the power to set fees and charges to pay for work done in connection with the issue of export certificates and import licences.
Exactly the same principles apply to our agricultural research and development effort. It must have a clear direction and purpose, so that it meets the needs of the industry as effectively as possible and allows Government to discharge their own responsibilities in areas which only Government can fund. Here again, the industry is now being asked to take decisions which will help determine the future shape of the R & D effort in agriculture. Each sector is considering what research and development it wishes to see undertaken on its own account and so to contribute to the total effort. The Government will still be contributing nearly £200 million on United Kingdom agricultural and food research and development in 1987–88, but new contributions from industry would mean that the
622
industry itself would have a much greater say in the overall programme. This Bill provides mechanisms to help the relevant sectors participate in this process.
Therefore Clauses 4 to 6, through some limited changes to the Cereals Marketing Act 1965, provide the widest possible scope for the cereals sector as a whole—and other arable sectors, if that is the industry's wish—to play a larger role in the areas of research and development and marketing, through the Home-Grown Cereals Authority. It remains for the industry itself to decide whether to raise additional funds for this purpose and on what specific projects such money should be spent. I am heartened by the progress which I understand has been made in devising a programme for the authority to pursue, and I am convinced that it is strongly in the interests of all sectors of the industry for this to be endorsed.
Similarly, Clause 7 introduces important additional flexibility into the membership arrangements and levy powers of the Meat and Livestock Commission.
The Government have always recognised that marketing is vital to the modern agricultural industry, which is why we set up Food from Britain. However, we must get the emphasis right. We do not want good marketing to be, as it were, imposed upon the industry, but to become a characteristic of it. That is why we hope that the industry will choose to use the fund-raising mechanisms in the clauses I have described to fund Food from Britain as well as other forms of marketing.
We have made it clear that for the Government's part we are ready to continue funding Food from Britain for a further three years when the initial pump priming funds of £14 million run out next year. Those additional funds will be on a £1 for £2 basis with the industry up to a maximum Government contribution of £2½ million a year provided the industry comes up with £3 million a year for its part. The Food and Drink Federation and the meat industry have so far agreed to make contributions to Food from Britain, but more money is needed and I hope the industry generally will not lose this opportunity to secure the long-term future of our national marketing organisation. Given the prospect of an increasing industry commitment to Food from Britain, it is right that we should make changes to its constitutional and financial framework to reflect a different pattern of funding. Clause 8 introduces these changes and will extend the size of the council to allow Ministers to appoint members from a wider cross-section of interests.
In one case where a sectoral body does not have the support of the industry, the Government, in keeping with their desire to work in partnership with the industry, have decided to remove the body concerned. Clause 9 will therefore provide for abolition of the Eggs Authority. The authority has, for many years, been a source of division within the industry. My right honourable friend therefore invited the noble Lord, Lord Peyton, to chair a small committee to review the authority. That committee concluded that the authority should be wound up, and Clause 9 will carry that recommendation into effect. I should like to take this opportunity to pay tribute to my noble friend Lord Peyton for the thoroughness, speed and brevity with which he tackled his review.

623
One important addition to the Bill in another place emphasises how important it is to allow the industry to react and respond to change. Clause 11 and Schedule 1 are intended to deal with one of the consequences of the introduction of milk quotas. In the last two years quotas have acquired a value; tenants can see this value reflected in the sale prices and rental values of land with quota attached, as opposed to land without quota. However, because quotas are linked with the land a tenant who retires or moves to another farm cannot sell the quota or take it with him. Hitherto, he has not been able to obtain any recognition of the efforts he has made to building up the level of milk production on which the quota is based. Being unable to realise any part of the quota value for themselves has led to a very real sense of injustice among tenants.
It was because of this that my right honourable friend held intensive discussions with the National Farmers' Union and the Country Landowners' Association to try to devise a system of compensation for tenants which would be reasonable and fair to all concerned. However, it did not prove possible to reach agreement. The Government decided that in this situation it was our responsibility to design a system which would strike a fair balance between landlords and tenants, and to introduce legislation accordingly.
In Schedule 1 we have set out a framework within which landlords and tenants will, we hope, in the great majority of cases be able to agree on the amount of compensation due. In the absence of agreement, arbitration will take place. In designing this system it was necessary to strike a balance between, on the one hand, providing very detailed guidance which would leave the arbitrators with little discretion, and, on the other hand, providing only very vague guidance which could lead to unpredictable results with similar cases being given different treatment. We believe that we have struck the right balance. On the one hand we have not, as was suggested in some quarters, specified that tenants should normally receive a particular share of the quota. It seemed to us that the starting off point should be the specific circumstances of each holding, rather than an arbitrary figure plucked from the air. On the other hand, we have provided a basic structure which we believe will ensure that similar cases receive similar treatment.
The fundamental philosophy behind the provisions in Schedule I is that tenants who have put in a great deal of effort should do well in this compensation matter, whereas those who have let their farms run down should not.
Part I of the schedule establishes which tenants will have a right to compensation at the end of their tenancies. Normally it is those who were on the holdings on 2nd April 1984 and to whom quota was allocated by the Minister. Special provision is made for statutory successions, where the compensation would not be payable at the end of the original tenancy, but instead the right passes to the statutory successor.
Part II of the schedule sets out how the payment is to be calculated. The assessment will be based on the concept of a "standard quota". This will normally be calculated by multiplying the number of hectares used for dairying on the holding by a standard yield of milk
624
per hectare. If the tenant has more than this standard quota, he will receive the full value of the excess. This is intended as recognition of the results of his managerial enterprise and skill. He will also receive a share—which in the schedule is called the tenant's fraction—of the standard quota determined by the relative values of his inputs into the enterprise, compared with those of the landlord. Where a tenant has less than the standard quota he will receive a share of his actual quota determined in the same way in relation to his and his landlord's inputs, but the compensation will be reduced proportionately to the amount by which he has fallen short of the standard quota. This abatement will recognise the fact that this tenant is leaving on the holding a lower quota than the landlord might have expected.
In recognition of a number of concerns expressed in another place I am pleased to say that at the next stage of the Bill in your Lordships' House we will be tabling an amendment which will remove the 20 per cent. restriction on variations in standard quota and will make other related adjustments. Although the details have yet to be worked out, we believe that the amendment we propose to make will meet the main concerns which have been expressed and will allow greater flexibility for individual circumstances to be taken into account.
The other main subject of the Bill is care for the environment. Increasingly, all sectors of the community have come to realise how vital it is to protect our natural heritage. This cannot be dismissed as a mere fashion. Nor is the desire to protect the environment really a new one. In recent years government policies on agriculture have been developed to reflect this wider concern. Many of the activities in which agricultural departments are involved now reflect our wider concerns for conservation and the social and economic interest of rural areas. The success of such policies depends on the development of a partnership between government, the industry, and other interests in the countryside. The Bill is seeking to develop this process.
Clause 12 of the Bill recognises this vital shift of emphasis in the development and implementation of agricultural policies. It imposes on agriculture Ministers a duty to seek to achieve a reasonable balance between the interests of agriculture, conservation, recreation and the social and economic needs of rural areas. This new duty would establish in law a policy which recognises the vital role that farmers play in preserving the social fabric and natural beauty of our countryside. The Government realise that finding the right balance between the many and varied countryside interests is by no means an easy task. However, our record in recent years I think demonstrates our determination to try to find that balance. Clause 12 will establish more clearly than ever before this aim, which underlies all of the ministry's functions in the countryside.
The commitment enshrined in Clause 12 is not an idle one. It will result in practical measures, such as those contained in Clause 13. This clause implements arrangements for which my right honourable friend the Minister fought very hard in the Community negotiations and which will have a significant beneficial effect on our countryside. It will enable us to

625
set up environmentally sensitive areas in which farmers will be offered payments for maintaining or adopting farming practices which help to conserve the special landscape and habitat features of those areas.
Equally, we have taken steps to do away with an anomaly from the past. Clause 14—and I am glad at this stage to be able to acknowledge the part which the noble Baroness, Lady Nicol, played last year in pressing the case for this amendment—ensures that all capital grant applications in respect of national parks, the Broads Authority and sites of special scientific interest are now to be fully covered by consultation arrangements with the Nature Conservancy Council and national park authorities.
This Bill is about choice, about allowing those responsible to pursue what is best. On the one hand it gives the farming industry the opportunity to influence its future direction and gives it the flexibility to adapt that direction with changing times. On the other hand, it emphatically states that there must be a balance between all the interests of the countryside. The Bill reflects the Government's determination to allow neither the industry nor their own services to drift and to ensure the best future that we can plan for the agriculture industry and for the nation. I commend the Bill to your Lordships' House and I beg to move.
Moved, That the Bill be now read a second time.—(Lord Belstead.)
5.10 p.m.
Lord John-Mackie: My Lords, the noble Lord, Lord Belstead, is very good at putting across a Bill like this. He does it so extraordinarily well that one is almost forced to agree with him sometimes. I must congratulate him on the way he managed, in a few sentences almost, to put across the ten pages of Schedule 1. I am obliged to him because it does help me a little to understand what on earth the Government are trying to do in this case.
I should like to be as short as possible: there are 20 odd speakers, and time is getting on. This Bill started over six months ago with 11 clauses and a couple of schedules taking up 14 pages. It now appears in front of us six months later with 16 clauses and three schedules taking up 28 pages. I suppose one could say that the Government have not been idle in that time. That may be, but to take nearly three months from the end of the Committee stage in another place to bring this Bill here is, I think, a bit much. Quite frankly, many of us had almost forgotten it was in existence; but here it is at last.
The acceptance of this Bill publicly on the part of the various facets of agriculture has been quite qualified. Few, if any, like the first three clauses, where the emphasis, although the noble Lord would probably say otherwise, is on the charging for advice by ADAS. Of course we are pleased at the extension of the services and goods mentioned by the Minister, and I will say a word or two more about Clauses 1, 2 and 3 later. Clauses 4 to 8 are amendments to various Acts from 1964 to 1968, with which I had a lot to do when I was in the Ministry. In changing times, no doubt some of these are, as the Minister said, necessary, but they will need to be looked at fairly closely in Committee. Clauses 9 and 10 abolish the Eggs
626
Authority, as the noble Lord said, on the advice of the noble Lord, Lord Peyton, and his two committee colleagues. Clause 11—a mere seven lines—carries a schedule (Schedule 1) of ten closely-written pages.
The noble Lord, Lord Belstead, explained it, as I said, in a few sentences and he did it well, but I think it will need a lot more explaining than that. The main thing it does is to explain how the compensation is to be arrived at between landlord and tenant if the CLA and the NFU cannot agree on the value of a milk quota at the end of a tenancy. I shall also be saying something about that matter later.
Clauses 12, 13 and 14 deal with conservation. In many quarters these three clauses make up for their grave doubts about the rest of the Bill. The CLA and NFU give these three clauses their blessing, with minor reservations, and of course the conservation and environmental societies are looking forward to the various provisions being carried out. I am just as keen a conservationist as most people. I have done a lot of conservation work, and I should like to point out to the conservationists that the land of our country is the basic raw material for the production of food and wood. From that production farmers and foresters have to make a living, maintain and pay a labour force on the land and, which is equally important, purchase and maintain equipment and goods from ancillary industries which also have to make a living and to pay and maintain a labour force. I cannot emphasise that point too strongly. Into that picture of what we do on the land, conservation and the environment can be fitted—but it has to be that way round and not vice versa. I would emphasise that very strongly indeed.
Quite frankly, I have difficulty in visualising how ESAs are going to be managed, and so have many other people, I believe. If, for example, we had in an ESA an outbreak of aphids (we had such an outbreak not many years ago in my own area) which could completely destroy a whole crop of wheat, and a pesticide spray was forbidden because of the risk of killing ladybirds, how would the farmer be compensated there? The same could apply to forestry in the case of spraying for moths and so on which destroys trees. There could be a restriction on the use of nitrogen.
I could give other examples. I sat at a dinner the other day beside a lady who had a tremendous antipathy to the growing of oilseed rape. I have come across it in other places as well. So there will have to be a better understanding of farmers' problems before their co-operation will be complete on this issue. There are many questions to ask about ESAs before this Bill reaches the statute book.
If I may turn now to Clause 1, this Government have been in power for seven years with adequate and, indeed, excessive majorities. For the first four years or so farmers were encouraged to go on producing more. "Go ahead: it saves import costs", one Minister told us. During that time, rumour, backed up by some statistics, had it, that farmers were making plenty of money. Yet during that time they got all their advice free. There was never, or very little, word that they should pay for it. Over the last two or so years the scene has changed very much indeed, as the noble Lord, Lord Belstead, said. Prices have come down,

627
and the noble Earl, Lord Ferrers, treated us to a speech a few weeks ago in which he very ably pointed out what had happened in cereal-growing areas. He pointed out that costs have gone up although of course there has been a welcome reduction in oil prices recently. However, that is not going to do everything.
This year's Price Review from the European Community puts on levies, quality restrictions and an intervention timetable, all of which lower our returns even further. Add to that last year's disastrous harvest—and quite frankly in some ways I think another bad one is looming: I did a trip through East Anglia this weekend, all the way up to Norfolk one way and back home again down the other, and I was amazed at the amount of bare land that still remains unbroken or where the crops have gone in just this last week.
We must alter our thinking and our attitude to conservation and the environment. We have to reduce our production, maybe take land out of cropping altogether and find other ways of making a living from our land and buildings. All that will need a lot of advice and guidance, but what do the Government do in these circumstances to help in this dramatically altered situation? Again, I emphasise that it is a dramatically altered situation. Apart from closing down a lot of research stations, increasing charges for a lot of statutory work and a so-called efficiency drive which will probably mean a loss of up to 400 jobs in ADAS, plus probably closing five veterinary investigation centres—after all that they are now to make us pay for advice.
Even if they had sat down to think of the most irrational thing they could do, I doubt whether they could have bettered this proposal. We are told that it is going to collect £5 million—probably between £20 and £25 per farmer countrywide. We hear a report that dog licences bring in something like £750,000 but that it costs £3 million to collect the money. Before the whole apparatus for collecting this £5 million is set up, we should consider that we might have the same picture. If the Government are hell-bent on being stupid, surely they should look for a simple way to do it. A small levy collected by the MMB, the HGCA, the MLC, the PMB—and of course, if they had left the Eggs Authority alone, it could have collected some as well—and so on, would raise the money. Farmers would then feel free to ask advice where they needed it. This particularly applies to small farmers in remote areas, and I cannot emphasise that too much. A lot of people think of farming as being done by East Anglian barley barons, and so on. I should like to point out that the average size farm in this country is 160 to 180 acres. There are 250,000 farms altogether, and a lot of these will not be able to afford the advice which they so rightly need under the changed conditions.
The very comprehensive advice provided by ADAS has been of inestimable value to these people and to farmers in general, and its impartiality and independence has added to that value. This cannot be obtained from commercial advice. I am not against commercial advice. I have a lot of friends in the commercial world who have advisers, but they all have a bias in favour of what they are selling, and the impartial advice of ADAS has been of invaluable help to farming.
628
Leaving aside the principle of the charges, there appear to be enormous difficulties in deciding how much to charge and when to charge. There will be no charge for conservation, but there could be a combined visit—and what does the adviser do then? Also, there are all the expenses of setting up an accountancy system. There will be bad debts. I can see first-class advisers having to waste their valuable time on the trivia of commercialism.
Having dealt with the physical side, I should now like to come to the emotional side. We have dedicated people at ADAS, and it is almost impossible to state how much harm will be done through the demoralising effect of what is going on there and at the research institutes. I plead with the Government to abandon this whole idea, which is just for the sake of being able to charge £5 million for advice.
Taking a look at the clauses in the middle of the Bill, Clauses 2 and 3 have to do with recouping costs and increasing fees, all adding to the costs of the industry. I hope we can have some estimate of what these might be. Clauses 4, 5 and 6 deal with some changes in the Home-Grown Cereals Authority which have our approval. The two clauses dealing with the MLC alter the numbers on the commission and give it power to levy to raise cash for other uses. I hope that my suggestion of a small levy to help pay for ADAS will be included in this.
As I said earlier, Clauses 9 and 10 abolish the Eggs Authority. This is being done on the advice of a committee chaired by the noble Lord, Lord Peyton. I have read the conclusions in the report. As the noble Lord, Lord Belstead, said, it is a very concise and short report, but I have had time to read only the conclusions, and I am not fully convinced about this move. But I know the noble Lord, Lord Peyton, well. He is a reasonably sensible man, so I hope that no harm is being done here.
I now come to the clause on compensation for milk quotas. This has caused a fair amount of heart-burning, as we all know, the reason being that quotas were given a value. There is no doubt that when quotas came in two years ago the whole situation had not been thought through before launching them on the milk industry. I made that point in a speech in July 1984, but I readily admit that I did not anticipate the trouble that this would ultimately cause.
In the proposed outgoers' scheme, a figure of 27p a litre, or thereby, was mentioned. This has now been reduced, as we heard in the debate a couple of weeks ago, to 18p, but even this figure gives a total value in the region of £3,400 million for all the milk that is produced under quota in this country, and it is half as much again if we take the first figure. A 60-cow dairy farm with a quota of 300,000 litres is, in theory, worth an extra £54,000. I wonder how a banker would react. All this has created a situation between landlord and tenant that the Government are attempting to solve with Clause 11 and Schedule 1. As a well-known Doric poet put it, I am going to leave it,
"to fouk wi' better thoombs than me to red this ravelled snorl."
I hope that the noble Lord, Lord Middleton, will be able to help when he speaks.
There is a lot more that one could say about this Bill. There is a lot of information missing, particularly from

629
Clause 1 and Clauses 12, 13 and 14. I know the argument that you cannot put detail into a Bill, but these four clauses—and the Minister emphasised this today—bring a completely new picture to the agricultural scene. We have been told very little about how the charges for advice will be operated. We have no idea what is the final objective in repect of ESAs. There are arguments that the whole country is environmentally sensitive, but not everybody has the same idea of an environmentally sensitive area. The advice will come from the Nature Conservancy Council and the Countryside Commission, but they are controlled by the environment Minister. I hope that he is on better terms with the Minister of Agriculture than he was a few months ago at Oxford. Then the Treasury come into the picture. Who advises them on environmental matters? It will be an intensely interesting Committee stage on this Bill.
Before I sit down, I should like to make a final point. The charity aid bodies that are interested in aid to developing countries—Oxfam, Christian Aid and so on—have written to me, and no doubt to many other noble Lords, because they would like some commitment that the surpluses that are produced in this country and in the EC will not be used to distort the agricultural economies of the countries that are receiving aid. In the other place, it was asked that a clause or a subsection be added to cover this point. I have studied their brief and I do not think that this Bill is the place for it, although I have every sympathy with their ideas. I just thought I should mention that before I sat down.
5.17 p.m.
Lord Walston: My Lords, the noble Lord, Lord Belstead, may be surprised to hear me say that I greet this Bill with praise, albeit with faint praise. He told us that its object is to develop a partnership between government and farmers—a very desirable objective. I cannot honestly see it developing any greater or better partnership than there is at the present time. I shall not go into details, but while I agree with Clauses 4 to 6 on the Home-Grown Cereals Authority, I cannot see that altering the membership from a minimum of 21 and a maximum of 23 to a minimum of 12 and a maximum of 21 will do a great deal to develop a partnership between government and farmers. Also, I cannot see that altering the number of people on the Meat and Livestock Commission from a maximum of 15 to a maximum of 10 will do that; nor will altering the number of people looking after Food from Britain achieve that purpose.
While I hold no particular brief for the Eggs Authority and am prepared to go along with the recommendations of the Peyton Committee, I do not see that this—I am referring to Clauses 4 to 9—will have any effect whatsoever, other than a rather minor one of tidying up a slightly untidy situation. So I certainly do not complain, but I cannot greet the clauses with anything other than the faintest of faint praise.
I move on to Clause 11 and the schedules. I should like to make one minor point here. I suspect that there is an almost insignificant misprint on page 17, but as
630
Bills before this House should be read with the greatest of care I mention it as much as anything to show hat I have read it with care. Page 17, line 19, states,
"the milk quota was transferred as the former tenant bore (or its treated as having borne)".
I suspect that it means,
"is treated as having borne".
Possibly my copy of the Bill is unusual, but in future copies perhaps that could be put right.
Having said that, I shall say little more than that the proposals are enormously complicated. Even reading the schedule with the greatest of care I find it very hard, as did the noble Lord, Lord John-Mackie, to understand how this is all going to be worked out. In my view it is impossible to legislate for this very complicated matter. There are very many variations both in locality and in personal conditions, and inevitably it is far better to leave it to an arbitrator to decide. We have a very well worked out arbitration system in this country to deal with disputes or disagreements between landlords and tenants. I think that, as this Bill provides, it is reasonable and right that it should be left to the arbitrator, but I should be happier if the arbitrator's hands were not tied to some extent in the way (as I understand it) the Bill is attempting to tie them under the guise of giving guidance. I think it is also a matter for argument as to how the standard quota is calculated. That can give rise to a great deal of argument. I am not happy about the schedule in particular, and I look forward with hope to the amendments which the noble Lord has told us will be presented at Committee stage.
I turn now to Clause 12. I, too, have received the document to which the noble Lord, Lord John-Mackie, referred. While I do not go along with it to the extent of thinking that a clause could well be inserted into the Bill to deal with the matter of the third world, it is important in the present atmosphere that when one is talking about the job of the Minister of Agriculture it should not be simply under the heading of conservation, as it is in Clause 12.
While obviously the first job of the Minister of Agriculture—historically, if for no other reason—is,
"the promotion and maintenance of a stable and efficient agricultural industry",
I should like to see more emphasis given to the other three considerations:
"(b) the economic and social interests of rural areas; (c) the conservation and enhancement of the natural beauty and amenity of the countryside … and (d) the promotion of the enjoyment of the countryside by the public".
I should like to see those considerations promoted to the extent of making it quite clear that they are all responsibilities of the Minister of Agriculture which are growing rapidly and that they are not just, as in the past, to be relegated to some poor relation status. While I would not go so far as to say that they are completely equal in standing to the job of food production, they are of very rapidly growing significance.
I also suggest that another point of significance in any policy put forward by the Minister of Agriculture for the agricultural industry is his duty to take account of world trade. We are hearing a great deal of this now. At Tokyo a great deal of time was spent discussing this

631
matter of world trade—the effect of production within the United Kingdom on the patterns of world trade, the disposal of surpluses and so on. At the same time I should like to see some mention made of the needs of the third world both as consumers of food and as exporters of food and agricultural products.
I move on to Clause 13 and to the environmentally sensitive areas. One is struck by various questions as one reads the clause. It is an important clause, and on the whole a good and useful one. I should like to ask the Minister whether production grants, which exist already in the instance of land drainage, will remain in these areas. There could be a certain amount of conflict if a farmer can apply and receive from the Ministry of Agriculture a grant for drainage in an area which it has been decided should be conserved largely because of the high water table. It would be interesting to know whether the compensation presently payable under the loss of profits arrangements will still remain in these areas.
The department says that in the first instance five or six areas will be designated. I hope that the Minister will be able to assure us that this is only a first slice. I agree that it is wise to go slowly and that the department should not designate more than it can properly look after, and should not bite off more slices than it can properly chew. But I hope that as its digestion improves and its knowledge of how to organise and manage these areas increases, further areas will be so designated.
Mention has been made by the noble Lord, Lord John-Mackie, of the role of the Treasury. We have to accept that the Treasury has the final say, not in the areas to be designated—not even in the number of areas—but in the amount of money that is available to deal adequately with these areas. I should be very unhappy if the Treasury felt that it could put a limit on the number of areas designated, although obviously it could put a limit on the amount of money spent on those designated areas. How will these management regimes be set up? They have a vital part to play in the environmentally sensitive areas. I hope very much that the Nature Conservancy Council and the Countryside Commission will not only be consulted if the Minister so wishes but that they will have a statutory right to be consulted in the form of management that should be undertaken in the environmentally sensitive areas.
On that subject, I hope noble Lords will bear with me if I read an extract from the view of the noble Lord, Lord Montagu of Beaulieu, the chairman of English Heritage, the Historic Buildings and Monuments Commission for England, who unfortunately is abroad at the present time and therefore cannot take part in this debate, as I am sure he otherwise would have done. I shall not read all of the noble Lord's observations to your Lordships, but he writes:
"In general, English Heritage very much welcomes the step forward in the interests of conservation which these provisions represent. We also, with the conservation bodies, welcome the specific duty which the Bill in Clause 12 places on the Minister to have regard to conservation interests in exercising agricultural functions, although we would wish for a specific reference to archaeological interests in this clause, to balance the reference in Clause 13. The Bill inevitably leaves unanswered a good many questions about precisely how the new system will work, and in particular how it will relate to policies already developed by the other agencies, including English Heritage, for conservation of the countryside and features within it. The English Heritage will be
632
pressing for ministerial assurances that there will be adequate consultation over the practical implementation of the scheme. The Bill represents very much a first step in the right direction. Like all foundations, it will need careful building up to achieve the right effect".
Those are the views of the noble Lord, Lord Montagu of Beaulieu, and I certainly go along with them.
Finally, I come to what I believe we all agree is the most important part of this Bill; that is, Clause 1, dealing with ADAS. Here, I find myself in disagreement with the noble Lord, Lord John-Mackie, which I must say is a rather unusual situation. I believe that it is perfectly right in principle for farmers to pay for advice that increases their efficiency and their profits, and so I cannot disagree with the principle of Clause 1. I add in parenthesis that I do not think that farmers should be expected to pay for visits from officials and inspectors under statutory requirements, any more than visits from health inspectors or from whoever it may be to food shops and factories are the subject of a payment. If the Government wish, as is their privilege, to have inspections carried out, then I do not think that farmers should be expected to pay for them.
Having said that I think it is right in principle that farmers should pay for advice, I go along with the noble Lord, Lord John-Mackie—and I emphasise this as strongly as I can to the Minister—that it is impossible to distinguish between the efficiency advice and the environmental advice. For it to be done properly, the same person must give it, and he must be giving it, especially in respect of environmental advice, all the time.
A farmer does not say to himself, "I will call out ADAS and ask the inspector to look at my barley, because it is going yellow, and see what advice he can give", and then, a few weeks later, or a few days later, say to himself, "I must call out ADAS and ask them to come and give me some advice on the environment". What the farmer does is to say to the ADAS officer, "Can you tell me what is happening about my barley?". If he is a good ADAS man—and they almost all are—then the adviser will tell the farmer that he must do this and that, and will add, "Why not plant a few trees at the bottom there, where you will never get a very good crop? Why not put in some hedgerow timber? Why not clean out your ditch?", or whatever it may be. The officer will give such advice at the same time.
If those functions are now to be completely separated, then one will not have the environmental advice being given. All one will have is a farmer calling out ADAS to say that he wants some advice on the environment and then adding, "By the way, can you tell me what I ought to do about my barley?"—hoping that the officer's call will go down on the time sheet or the log sheet as an environmental call and not as a technical advisory visit.
For those reasons, if for no others, I do not believe that the proposed scheme will work. I suggest also that if it were to work then there is a very great danger that farmers will give up calling upon ADAS, in spite of its disinterested advice, but will obtain advice instead from their suppliers of chemicals, fertilisers, feeding stuffs and so on. That is good advice always, but one cannot forget that such advisers are paid out of the profits of the companies that are employing them. It is

633
very difficult to give completely objective advice in those circumstances.
That in itself is bad enough, but the effect on ADAS of that sort of change is already being felt. I do not imagine that many people who know of the situation would disagree with me when I say that morale in ADAS is low—lower than it has been for a very long time. Many centres, many stations, have been closed. There has been the loss of 800 ADAS officials since 1981, and 20 per cent. of jobs will have gone by 1987. That is another factor to be taken into account and to be given a great deal of thought.
Finally, what is a "reasonable charge", as mentioned in the Bill? I do not know how one calculates what is a reasonable charge. Is it based on time, or on the cost of the office and the overheads? Does one have a little timeclock going, or a stopwatch, and check it all out in one's day book? Is a reasonable charge based on that for competing advice; the same price that others would charge for commercial advice? How does one arrive at that figure? Is it based on what the farmer would pay?—and I suggest that the farmer will pay little if anything for it. It is all very well to talk vaguely in a political speech or in a conversation around the dinner table about reasonable charges, but when one is to put them into operation and into an Act of Parliament, one must be far more specific if "reasonable charge" is to have any meaning at all.
The same applies to the £5 million that has been mentioned as coming from that operation, without any regard or any figures being given as to how that money is to be produced or how much the charge of collection would be. So I believe that Clause 1 on ADAS is a very serious mistake in the Bill. As to the rest of the Bill, some of it is definitely good, and some of it is certainly not bad but without any great relevance. However, I believe that most of us who have any knowledge of farming must agree that Clause 1 itself makes the Bill a far less valuable Bill than it otherwise might have been.
5.48 p.m.
Earl Ferrers: My Lords, it is always a pleasure to follow the noble Lord, Lord Walston, especially when he says, as he did at the outset, that he is going to praise the Government. That is an occurrence of such rarity that I almost felt compelled to ask for a hearing aid. I congratulate my noble friend Lord Belstead for having introduced this Bill. I cannot help but feel a tinge of sorrow that ADAS is to be made to charge for its services, other than those that are socially or environmentally important. But at a time when increased production from agriculture is not now required, it is difficult to justify the expenditure of public funds on showing farmers, free of charge, how to increase the efficiency of their businesses. However, I have a great deal of sympathy for the noble Lord, Lord John-Mackie, when he says that there will be plenty of people who will want to go to ADAS for advice such as, "Where do we go from here?".
We should remember this. One of the least-noticed aspects of ADAS is the link that it created and administered, by which the results of new research was transmitted and relayed into practical
634
application—not just to farmers but to other professional advisers as well. I pay tribute to the members of ADAS, not only for their knowledge but also for their professionalism, as well as their friendship. They never tell farmers what to do from a dictatorial height; they would not get very far if they tried. But they do get alongside farmers as friends and advise them. Because that advice was free, farmers were happy to accept it. Now that it has to be paid for, I fear that that advice will not be so readily sought. I fear that the relationship between ADAS and the farmer may be distanced. I fear that ADAS may be wondering what it is supposed to do. I question what will happen to the transmission of scientific and other new knowledge.
Of course, the whole trouble is that agriculture is going through such an unprecedentedly difficult time. All previously accepted conventions and objectives have been stood on their heads. On the one hand, we see outputs, surpluses and the cost of the common agricultural policy rising, and clearly these have to be curtailed. On the other hand, the farmer sees costs rising but prices and returns lowering, and the Government insisting that they must get lower still. The farmer sees this as the way to ruin—which it is. He is alarmed. Meanwhile, the conservationists have appeared, as it were, like an army of hobgoblins in the middle of the night to tell him that he has all his priorities wrong, anyhow, and that it is not food that is wanted now but that conservation and environment are the in things. The farmer is left bemused; yet all he has done is to respond to the call of successive governments over the past 40 years to produce food and become efficient—which he has and the nation has benefited.
The noble Lord, Lord Wilson of Rievaulx, when he was Prime Minister said that if output per man in British industry had increased as much as it had in British agriculture the nation would not be facing as many problems as it then was. He was right. But things have changed radically and in a few years. The requirements of agriculture are different now to what they were even five years ago. The industry must be prepared to change and it must be given time to change.
It was Dean Acheson who said after the war that Britain had lost an empire and had not yet found a role. In some ways British agriculture is like that now. It has lost its objective of producing food and has not yet found its new role. It must be given time to adapt to its new role, whatever that may be. If one wants to stop a battleship it goes on for a mile after one has put the engines into reverse. Agriculture is like that. That colourful character, the late Mr. Nubar Gulbenkian, who was not known for being impecunious, had as his motorcar a London taxi. When asked whether he liked it he replied, "It is wonderful. It can turn round on a sixpence—whatever that may be." Agriculture is not like that. It cannot be spun round. It must be given time to readjust.
Conservation is important. I only hope that we shall be careful not to fall into the trap of segregating, on the one hand, farmers and, on the other, conservationists. On the whole, most farmers are interested in conservation and are frequently the ones who do it.

635
Agriculture and conservation need not be incompatible. They usually do, and certainly should, go together. What has been achieved over the past five years is evidence of that. There has been a sea change in attitude over conservation, not just by the public and by the enthusiasts but by the farming community as well. Long may that continue. I hope that the environmentally sensitive areas which are in the Bill will be seen as yet another step and yet another obligation on agriculture to look after the countryside in a way which recognises the interests of others. I hope that those who are interested in conservation, from whatever aspect that may be, will see this as yet another recognition of their concern and will find satisfaction in that.
As this is an agriculture Bill I hope I shall be permitted to say this. As the Government grapple to keep the cost of the common agricultural policy in bounds they should not be content just to lower prices. This will leave, as I suggested two weeks ago, a devastated countryside and a ruined industry. I believe that this would be economically, socially and strategically unacceptable. The Government should consider set-aside land. It is just as justifiable to pay farmers not to cultivate their land as it is to pay them, as provided for in the Bill, to look after environmentally sensitive areas in a particular way.
Agriculture is not just farmers. A whole host of other industries depend for their existence on agriculture. The agricultural engineering industry is an important one. It consists of very small units. That industry is also going through a difficult time. It is not often realised that more than 90 per cent. of agricultural machinery enterprises employ fewer than 50 people. There are only 20 machinery companies which employ more than 100 people. Half of what is produced by the agricultural machinery business is exported. The other half is sold to British farmers.
If 500 acres is considered to be the minimum viable acreage where investment in machinery will bring a worthwhile return, then the United Kingdom agricultural engineering business can be said to rely on 14,000 farmers. I merely say to your Lordships, "Let agriculture run down then see what happens to that industry and to the small companies and their exports." These companies depend on a sound home market for their existence. It is not insignificant that even the Tokyo summit agreement, announced today, referred particularly to the importance of small businesses.
We ought to export; and not only the industries peripheral to agriculture but agriculture as well. That is what Food from Britain was set up to do—to aid the promotion at home and abroad of British food. Its constitution and funding is adjusted in Clause 8 of the Bill. I should declare an interest as being a member of the council of Food from Britain. Somehow our competitors seem to be so much better than are we at exporting. If one goes into a restaurant and asks for mineral water like a Pavlov reaction every time the waiter says "Perrier?" The word "Perrier" has become almost synonymous with mineral water in the same way as one refers to a Hoover instead of an electric suction sweeper or a Thermos instead of a vacuum flask. As a result, French Perrier water has 62 per cent. of the British mineral water market. What is wrong
636
with Ashbourne water? I happen to like it. I always ask for it but it is frequently unavailable. In the part of the country from where I come deliveries are infrequent—about once every three weeks. Perrier water of course is always there.
It is marketing which is so often where we fail and not the product. In a major promotion in north-west Germany, Food from Britain sold three container-loads of Highland Spring water, worth £10,000; so the Germans wanted it. That was merely one of 50 products involved in that promotion which turned over £2 million in two weeks. Food from Britain has been very successful in a very short time, in my view, starting from nothing despite constant criticism. We in Britain have an unrivalled ability to knock every new venture whenever one starts without giving it a chance.
In the two years from 1983 to 1985 exports of British food and drink worldwide increased by 3 per cent. But in the areas where Food from Britain concentrated its efforts, the results have been spectacular. In France over the same period British exports of food and drink went up not by 3 per cent. but by 9 per cent. In America, exports went up by 10 per cent. Food alone exported to America went up by 19 per cent. Exports of food and drink to Germany went up by 23 per cent. In September of last year Monoprix of France held a Scottish fortnight in 45 hypermarkets and supermarkets throughout France. Among other products, they sold 5,500 lamb carcasses, 11 tonnes of cheese, 230,000 bottles of beer and, believe it or not, 42,750 bottles of whisky. That was £1.3 million of extra export business which was generated in that fortnight last September in France.
In March of this year a British promotion was held on German railways which went on for a month. It took place in 135 inter-city restaurant cars and 15 inter-city hotels. It is the first time that British bacon has been available throughout Germany. That work with a Scottish producer has seen his sales of smoked salmon in France increase from £20,000 in 1983 to an anticipated £1 million in 1986.
I venture to suggest that these are real successes, though I hasten to add that they have nothing whatsoever to do with me. This is what is wanted. I have no hesitation in saying that to set up Food from Britain was a right and brave thing to do, but equally I have no hesitation in saying that I am appalled at the dalliance of the industry in funding it. Since its inception three years ago everyone has known that as from 5th April this year the industry will have to be responsible for partially funding Food from Britain. Instead of producing nearly £5 million, as they did last year, the Government will produce only £3 million this year and £2 million next year. They were to produce nothing in the following year, but they have now agreed to make more funds available.
The method of funding by the industry was being considered at the end of 1985, but each time, because of indecision or lack of will, the deadline has had to be extended. Now Food from Britain is already a month into the new financial year and no one knows how or whether, and, if so, in what amounts, the funding from industry will appear. I think that it would be a disaster for it to fail. Every time the subject is mentioned an astonishing ritual dance is performed by the potential

637
contributors, with each one saying that they are sure that their sector in the end will provide money; but when the question is put, "Are you prepared to contribute to Food from Britain this year and how much?", like fish they all slide away. I remember when I was a child we used to play a game called pass the parcel, and the whole idea was to make sure that you did not land up holding it when the music stopped.
Everyone looks to the other, but no organisation can go on like this. Patience is fine; so is tolerance and so is understanding, of which there has been plenty, but this is a business which has to be funded, and funded for the benefit of British agriculture and British business as a whole. For one reason and another, some understandable and some not, the funders have so far failed to commit themselves. No budget can be made and, still less, adhered to; the milk, meat, cereals, and food and drink industry are the potential funders, and any one of those sectors by not contributing can finish Food from Britain for everyone else.
I fear that there are too many vested interests at stake. There are too many people who fear that Food from Britain might do something that they are doing or do somebody else out of a job. Some parts of the industry say, "We will pay for our share of the deficit". That is not the way to fund an organisation. Some say, "We will pay Food from Britain to do work for us on a contract basis". That is not the way to fund an organisation. The cereals people say, "We must have a poll"—to raise 5p per tonne on cereals. Frankly, the document which the Home Grown Cereals Authority has put out to accompany the voting paper needs to be seen to be believed. It is lengthy, awash with figures that go to three places of decimals, and unintelligible. It promises more staff, more committees, more advisers and more expenditure. The document could not really have been better designed to secure a "No" vote if it had tried. All this is to raise a levy of 5p per tonne, when the Ministers' negotiations in Brussels have imposed a levy of £3 per tonne at a stroke. All this is to raise a levy of 5p per tonne, when in Germany they raised a levy of 60p and in France a levy of £5 per tonne. If the British agriculture industry does not back up Food from Britain, frankly it does not deserve to have it and what is more, it will not have it.
What a bizarre comment it would be on the situation facing agriculture today if Food from Britain were to be wound up and the £5 million offered by the Government for the next two years were to be returned to them. What a message for agriculture to give to the Government at this of all times: "We do not want Food from Britain and you can keep your money". If that happens, the responsibility can lie only with the leaders of the industry and the agricultural bureaucracy with which they are inevitably involved, but it will be British agriculture which will suffer. The Milk Marketing Board will still be there; the Meat and Livestock Commission will still be there; the Home Grown Cereals Authority will still be there; so will the Perrier water and so will the French, German and Danish food and all the rest. It will be the British who, as usual, will suffer.
I recognise that the concept of Food from Britain is revolutionary in Britain. We are moving from an
638
independent activity by various boards and organisations, which have been created since 1947, to a co-ordinated activity. That is a very large step. But let us remember that, while in this country we fund our organisation to the tune of about £5 million, Sopexa in France funds theirs to the tune of about £30 million and CMA in Germany funds theirs to the tune of about £35 million. Those two organisations—CMA in Germany and Sopexa in France—were set up later than our boards and did not have the problems of persuading strong, independent bodies to work together and give up some of their independence. I recognise the difficulty that this creates for us in Britain.
It is really a curious reflection that for the last 20 years the leaders of the agricultural industry have been trying to persuade farmers to give up some of their independence and to co-operate together—and how the farmers have squealed! Now, it is the leaders themselves who are having to be persuaded to do the same thing—and they are not half making a meal of it! There has been a substantial change in the attitudes of the major interests in the last few months and I only hope that this will continue and that a method of correctly and adequately funding this organisation will be found, and in time, because I believe it is badly needed.
6.8 p.m.
Lord Stanley of Alderley: My Lords, I hope that my noble friend Lord Ferrers will forgive me if I do not follow him down the Food from Britain path, for the reasons which I gave in the House when he promoted that Bill. Though there is quite a lot of good in this Bill, I fear that there is really a lot of tidying up work to do. I address this remark to my noble kinsman the Chief Whip to try—probably pointlessly—to curb his impatience when we go into Committee. My remark is certainly not addressed to my noble friend Lord Belstead who, as your Lordships know, will always do his utmost to accommodate sensible suggestions.
My shopping list for this Bill will include the following. First, like the noble Lord, Lord John-Mackie, I should like more details regarding the future of ADAS; in particular, a long-term commitment to continue the service and no charging for statutory duties or new duties such as conservation or diversification. I am somewhat at variance with the noble Lord and with the noble Lord, Lord Walston, in that my impression, certainly from the younger members of ADAS, is that they are responding exceptionally well to the challenge that is put before them but they badly and urgently need advice as to where they have to go.
Secondly, there must be a recognition that by commercialising ADAS there is bound to be a conflict of interest similar to that experienced between Plessey and BT when that organisation was privatised. For instance, ministry vets will be put in a difficult position trying not to breach professional etiquette, yet wanting ADAS to provide the most efficient service. The problem will be particularly difficult in the sheep and beef sectors where 99 per cent. of the work of general practitioners consists of acting as middlemen in supplying prescription-only drugs.

639
As a sheep farmer my first reaction is to say, "Let ADAS and its veterinary service have complete control without resorting to the private practitioner, thus providing the sort of service that my noble friend Lord Belstead said we should expect". But as a countryman I do not want to see the country vet practice die, and it is certainly under pressure today.
Thirdly, I come to milk quotas. I hope that your Lordships will allow me to make that most irritating of remarks, "If I was you, governor, I wouldn't have started from here anyhow", in the hope of warning all those, including my noble friend Lord Ferrers, who continue to advocate quotas and suchlike for other commodities. The milk quotas are causing much friction between landlord and tenant, which is a situation that I dislike intensely, as I am sure does my noble friend Lord Middleton. All I say at this stage is that the Government admendment is ghastly. It is a lawyer's paradise. It is my intention, with your Lordships' permission, in Committee to try to simplify it by allowing valuers much more freedom of action. I hope that your Lordships and my noble friend Lord Belstead will not think that that is a conceited remark. But, as other noble Lords have said, I think that we should try to do that.
The Government amendment, for instance, does not take into account the position of the tenant who perhaps came into a derelict holding and milked in a bail; or indeed the tenant who is most likely to be in a less favoured area and who practises a low input-low output system, which I thought we were all trying to encourage today due to the surplus situation. As I understand it, in both those situations 99 per cent. of the value of the quota should go to the tenant, but it will not. In case my noble friend Lord Middleton turns round to scowl at me for forgetting the landlord, I assure him that I do not. On many occasions the landlord should be entitled to 99 per cent. of that quota, even though under the Government's amendment the tenant would probably be entitled to his bit of super-quota. I hope therefore that with your Lordships' normal good sense, calm and fairness we can improve the Government's amendment. I know that we can count on the help of my noble friend Lord Belstead.
Fourthly, there are the environmentally sensitive areas. I am not against them, but being somewhat of a cynic I can hear the taxpayer saying, "For years we paid those farmers to produce what we did not want, and now the devious lot have managed to get us to pay them for doing nothing". Apart from that long-term fear, I congratulate those who promoted the idea. I am most anxious to see it work, but in order for that to happen it is essential to get the nitty-gritty correct. In this context that means adequate payments to farmers and adequate supervision of those payments, which was a matter raised by the noble Lord, Lord John-Mackie. I should like an assurance from my noble friend Lord Belstead that the Government will generously fund the supervisory staff and the conservation objectives in those areas.
I am worried about that aspect. Although the Halvergate experiment was successful, it was far simpler than that proposed in future ESAs. In Halvergate the objective was to keep pasture from becoming weak. In the new ESAs the objectives will be
640
far more complicated, varying from region to region and indeed from farm to farm. To be successful ESAs will require a lot of funding and supervision. I liked the comment of the noble Lord, Lord John-Mackie, about whether the Treasury was involved. But if there is one thing that is more expensive than wine, women and song, it is conservation, and I hope that the Treasury realises that.
6.14 p.m.
Lord Stodart of Leaston: My Lords, I shall try to be brief and essentially agricultural because many other noble Lords will speak on the conservation and sensitive area aspects of the Bill. We heard a most excellent tribute to Food from Britain and the clause that involves that from my noble friend Lord Ferrers. Anyone who had been to food fairs abroad will have noticed enviously the stalls, stands and even pavilions of the Italians, the French and the Germans. At least that was my experience some years ago. One felt that the British effort was not as good as one wished.
I can say this in less than a moment, but it may be of interest to noble Lords to know that without a body called the Highlands and Islands Development Board there may have been no British representation. It had almost unlimited power to spend public money promoting the sale of Scottish goods. A memory that I retain to this day is of when I was at the Ministry of Agriculture and paid a visit to a food fair in Paris, I think. A scowl of fury was vented on me by the noble Lord, Lord Mackie of Benshie, for my daring to go to one stall that was selling cheese while he was trying to compete at the other stall that was selling cheese.
I wish to dwell only on Clauses 1 and 11. Unlike the noble Lord, Lord John-Mackie, I am bound to say that I have no great objection in principle to paying for advice, and I am not a barley baron. If one has to pay for something, one tends to value it a bit more. But much will depend on how reasonable the charges are, which is a point that has already been made. I do not know what has happened in England, but since charges were introduced for soil analysis, the number of analyses, certainly in Scotland, has dropped substantially. That is not a good thing, unless of course it is a way to run down agricultural production. The last time that I had my farm analysed was about two years ago and the cost was between £100 and £150, whereas prior to that it had cost nothing. I do not know what it will be today if it was £150 three years ago. But again we come back to the reasonableness of the charges.
The other matter that causes me concern is whether staff will be available to give the advice. Both the Scottish National Farmers' Union and the East of Scotland College of Agriculture have put out documents that say that the budget of the Scottish advisory services is to be cut by 41 per cent., compared with a 20 per cent. cut for England and Wales. I am bound plaintively to ask why. Have we been cosseted in Scotland, or has the system been extravagantly run? There has been continuous dialogue as to the relative merits of the advisory system in England and Wales compared to that based on the various colleges in Scotland. A great many people south of the Border have paid high tribute to the Scottish system. It surprises me that the cut in the budget for Scotland is

641
to be double that for England and Wales. I know that that is a question outside the immediate field of my noble friend's responsibilities, but I should very much like an answer to it.
Lord Walston: My Lords, as someone from the deep south, may I suggest to the noble Lord that the reason could be that Scottish farmers are so much better at taking advice and following it that they need it much less now than we do in our part of the country?
Lord Stodart of Leaston: My Lords, that is perhaps an answer that I shall be receiving from the Front Bench. It is one that my noble friend may be inspired to give. So far as provision for research and development goes, there is a great deal of apprehension, certainly in Scotland, and I daresay also in England and Wales. Rumours fly about as to who is to be cut, when they are going to be cut and where they are going to be cut. One finds agricultural correspondents of reputable newspapers constructing hit lists and broadcasting them on early morning farming programmes. The last that I heard was that the Animal Breeding Research Organisation and the Hill Farming Research Organisation were to go. We know that the latter is being amalgamated with the Macaulay Institute. But there is great controversy as to where it is to be settled. I hope that a decision can be made soon.
Of course, Ministers cannot win. If there is no consultation, they are called autocratic. If they do consult, then, almost inevitably, uncertainty takes over during the consultation period. To come back to the advisory services, I have a definite preference, in company with the noble Lords, Lord John-Mackie and Lord Walston, for the independent college services in Scotland as against the commercials. Again, with the budget cuts that have been announced, uncertainty about the future may be causing staff to leave. Now is a most unfortunate time for this to happen. Never has there been a time, going back over many years, when advice is so badly needed in respect of the numbers who should continue farming.
I should like to give your Lordships a personal experience. It is exactly 20 years since a Mr. Brian Pearl, whose name will be familiar to the noble Lord, Lord John-Mackie, and who was at the time on the staff of the East of Scotland College, came to Leaston to tell me how to stop losing money. It is perhaps ironical, looking back, that his advice, backed up by costings, was basically to concentrate on cereals rather than on beef and sheep. Ever since then an upland farm at anything from between 700 feet to 1,000 feet that had consisted of 600 acres of grass and 150 acres of grain has grown 300 acres of wheat, oats and barley on a five-course rotation of three years of grain and two years of grass. In that way, as Mr. Pearl forecast, it made a bit more, or, perhaps, I should say, for propaganda purposes, lost a bit less money.
But now let us watch what happens. I agree with the noble Lord, Lord John-Mackie, that we have to try to make a living. If a college adviser comes out to see me at reasonable expense, the very first question that I know I shall ask him—it comes naturally—is, "Can I force my yields up?" The first thought is whether I can
642
grow a bit more. A large crop at a smaller price is always very much better than a small crop at a high price. I remember saying exactly that to a fellow Member of another place about 20 years ago as we were walking across the Park. His business was making shirts in Birmingham. On hearing what I have just said, his response was, "You must be mad. If keeping lambs does not pay you, do as I do. If we cannot make money out of shirts, we stop making them."
Alas, farming does not work like that. Two tonnes an acre off my farm will be no good. Beef is in surplus and lamb will be in surplus before long. Consumption figures of red meat are down. Beef has dropped from 521bs. a head in 1975 to 401bs. a head today. Mutton and lamb are down from 181bs. to 151bs. Therefore, the traditional options are no longer available. The second question to my adviser will be to ask whether I can reduce my inputs, chiefly fertiliser and sprays, and be content with lower yields. I have read the comments made by my noble friend Lord Radnor a fortnight ago. He described himself as a low-input producer. The trouble is that I cannot make the figures meet. Therefore, self-interest makes me a quota man until my noble friend can reveal what he has in mind as an alternative use for my kind of land.
Forestry is obvious. I heard the noble Lord, Lord Walston, make some comments about the Treasury. My heart bleeds in respect of what the Treasury will say when my noble friend goes along and puts to it what, in my view, is a thoroughly sensible proposition. At the level of imports of timber products that now exists the Treasury should perhaps pay so much a year for cash flow purposes to sustain income over the first 20 or 30 years in respect of large areas of upland land. That is obvious. There was, I believe, reference the other day to fallow land—not exactly needed on a farm with grass rotation, but possible. And what is precisely meant—because I really do not know—by taking land out of production? I visualise my farm growing bracken thistles and day nettles—a great weed. It is time that we had a lead, even in broad terms, as to where we are expected to go.
In the excellent debate that took place a fortnight ago the use of the price mechanism was the popular choice. But, with great respect to your Lordships, the devastating results of this approach, if carried out too quickly, were faced squarely only by my noble friend Lord Ferrers and by the noble Lord, Lord Walston. I thought that my noble friend was going to quote Winston Churchill this afternoon when he appealed for time in any change that takes place. It was, I believe, Winston Churchill who said, somewhat trenchantly, that before you could put a railway engine into reverse, you had first, if it was going forward, to bring it to a stop.
Clause 11 deals with the division of milk quotas. I believe, frankly, that the schedule is so complex that one can, in any observation that one makes, only go by what was stated in another place. What makes it even more difficult is that my noble friend has already announced that amendments are to be made to it in the course of the Committee stage. Like my noble friend Lord Stanley of Alderley, I am immensely sad at what seemed to be the apparently entrenched positions adopted by landlords and tenants. I am neither.

643
Therefore an owner-occupier may qualify as being objective, or it may damn one for knowing absolutely nothing about the problems.
In my own mind I am quite certain that, in view of the huge variety of tenancies, the most enormous flexibility is needed. I think that there must be some guidelines. I do not think that we can leave it totally to the arbitrator. However, it is total and absolute nonsense to suggest that either side should receive zero. Therefore, clearly there must be guidelines.
In another place I thought that Mr. Charles Morrison gave an interesting example. He said, "Suppose someone went and put what was called a Hosier milk bail up on the Wiltshire Downs". I do not agree with Mr. Morrison here, but he thought that the owner of that bail, the tenant, should receive 100 per cent. because the landlord had provided absolutely nothing. I think that the landlord has provided something; he has provided the land on which the bail would stand.
Again, one can only go from what one has read of the debate in another place, but if it is the case that the parameters seem to be that a tenant can receive between zero and 66 per cent., whereas a landlord can receive between 33 per cent. and 100 per cent., I am afraid that they lean far too heavily against the tenant who, on many occasions will, I believe, be entitled to a good deal more than 66 per cent.
6.33 p.m.
Baroness White: My Lords, in this expert company I would not regard myself as competent to comment upon Clauses 4 to 11 of the Bill, and still less upon Schedule 1, though I had a good deal of sympathy for the comments on Clause 8 made by the noble Earl, Lord Ferrers, about Food from Britain. I wish the noble Earl further success. I do not recognise myself as one of the hobgoblins of the noble Earl, Lord Ferrers, but I shall comment briefly on some of the clauses which one might regard as being of particular concern to conservationists, environmentalists, or to whatever derogatory terms we are entitled.
I think that I should start by welcoming Clause 12, and particularly the comprehensive scope envisaged for its implementation. Your Lordships will have noticed that it reads:
"In discharging any functions connected with agriculture in relation to any land the Minister shall … have regard to and endeavour to achieve a reasonable balance between the following considerations",
and the four considerations are set out in the clause and I think cover all our main concerns. I would simply say that while we welcome this clause, declarations of intent can mean little or much, and we shall watch with close attention how this will work out in practice. Possibly the Minister can let us know what steps have been taken to ensure that the balance described in the clause will be adequately observed not only by his own department but also by the various committees, quangos, and so on which serve or advise his ministry. However, we welcome the clause. It is a declaration for which we have waited for some time. It was not included in Private Members' Bills which were brought forward from another place, so we are particularly happy that it is now included officially, with Government support, in the Bill before us.
644
Having extended that welcome to Clause 12, I must say that one is correspondingly disappointed at what seems to many of us to be the very narrow, parsimonious attitude of the Government which is suggested in Clause 1. The provisions of this clause replace the existing obligations of the Minister to provide free advice not only under various agricultural statutes but also under Section 41 of the Wildlife and Countryside Act 1981. I think that one can fully understand that for certain functions which could bring to a farmer some direct commercial advantage it may be proper to charge a reasonable fee. Although it is not specifically confirmed in this clause, provision is made for enabling free advice still to be given by ADAS on environmental or conservation matters. This should be brought out much more clearly on the face of the Bill.
However, then one asks oneself, as I thought the noble Lord, Lord Walston, did very clearly: where does the distinction begin and end? In the light of Clause 12, to which I have just referred when I mentioned maintaining the balance, what one really needs is that considerations of landscape value, protection of flora and fauna and so on should permeate agricultural advice and should not necessarily be segregated in the way suggested by this distinction. Unless the required advice is very site-specific or directly functionable—such as how best to build a traditional stone wall—it could be a tiresome and time-wasting argument as to whether or not the advice requested comes into the free-of-charge provisions.
Furthermore, particularly if ADAS is to charge the going rate, some farmers may well be persuaded to turn to private commercial operators or salesmen who will be under no obligation to observe this balance between environmental or social considerations and the direct agricultural ones.
I am sorry that I arrived a few minutes late and possibly the noble Lord the Minister may have touched on this matter, though judging by the subsequent speeches, I doubt it. How is this attitude to be secured if the advice is to be given primarily commercially? As we have already been reminded, commercial firms may offer free advice in order to further their sales of agro-chemicals, farm machinery, road-building services, pond-digging expertise, or what have you. However, the really serious aspect of this is surely that, once the relationship with ADAS is damaged or diminished, what could be a most encouraging partnership in the new situation in agriculture may not develop. It has worked in the past for food production; it is doubtful whether it will work anything like as effectively in the future for either conservation or the equally, if not more, important subsection of Clause 1 dealing with any,
"enterprise of benefit to the rural economy",
whether or not agricultural.
I am sure that many of us will entirely sympathise with the notes of the National Farmers' Union which we have received, and particularly with the sentiments expressed there that,
"at a time of intense change the need is for more research and more advice to farmers, not less".

645
I shall not touch on the cuts in agricultural or related research, as that is the subject of a debate to be initiated by my noble friend Lady Nicol next week. However, I would reiterate that these quite savage cuts in ADAS manpower—with further cuts announced only recently—are disheartening in the extreme. I am perhaps even more concerned with the health of the rural economy than with conservation, not least in the uplands and less-favoured areas, of which we have so high a proportion in Wales. But the two elements are interdependent in important respects. Neither a coniferous blanket nor an untended wilderness will bring beauty or happiness to our Welsh hills and rural areas. The staff of ADAS are familiar with the groundwork conditions from which other activities must in the future develop, and to go on cutting down their numbers is criminally irresponsible.
I now wish to turn briefly to one item not in the Bill and to another which is, namely, landscape conservation orders and environmentally sensitive areas. Needless to say, most people with the interests that I share welcome the concept of environmentally sensitive areas and would join in the congratulations to the Minister for having succeeded in persuading his European partners that such measures would be desirable and acceptable, although one recognises some of the problems which are bound to arise and also some of the possible conflicts to which the noble Lord, Lord Walston, in particular, has drawn our attention. Nevertheless, the concept is in itself a good one and an important and interesting one.
We are disappointed to learn in Wales in particular that we may have only one of these environmentally sensitive areas designated in the Principality. That may or may not be true. Perhaps the Minister can tell us. I think they started with a long list of 56, which was then reduced to about a dozen, and it now seems to be shrinking even more and more. Rumour also tells us that it will probably be the Lleyn peninsula, but there are other areas in Wales possibly even more deserving; the Cambrian mountains, for example, where I should have thought that the agricultural equation might be even more deserving of the kind of treatment proposed under these suggestions.
However admirable environmentally sensitive area designations may be, they are clearly not going to comprise all the landscape areas which deserve some protection even on a much more restricted scale. Therefore, some of us are particularly concerned that reference should be made in the Bill to the need for the lesser but important provision of landscape conservation orders made by local authorities.
These were discussed by the House of Commons Select Committee under the chairmanship of Sir Hugh Rossi. In their response to that committee's report, the Government agreed to consider the matter further. But surely there is a real urgency about this because unless a place can be found in this Bill for such an improvement, who knows when the next legislative opportunity will occur?
This brings me to a final comment which is the sense of unease that we feel at the picking out of various types of designated area (increasing the number and complexity of designation) for particular attention, to the exclusion of other areas which are not designated.
646
The selectivity can be wide, as in a national park, or much narrower, but it seems to be becoming of increasing importance whether the area is formally designated or not.
For example, in the Housing and Planning Bill, which has just reached us from another place, there is a reference in Part II to simplified planning zones. I do not wish to discuss the merits or demerits of this concept except that it adds "SPZ" to the series of initials we have to try to memorise. But these will not be established in "specified environmentally sensitive areas"—a description which in that Bill covers green belts and conservation areas, as well as national parks or areas of outstanding natural beauty. One appreciates the need for some selectivity; but all the more need then for a safety net like the proposed landscape conservation orders to catch individual situations not otherwise provided for.
I hope that in his winding up we may have some comment from the Minister about these matters which are of concern to a number of us. Time is going on and I shall not comment further on the Bill, except to say that as with most other Members of your Lordships' House one gives it a modified welcome.
6.45 p.m.
Lord Middleton: My Lords, had we been discussing this Bill as it was after its Committee stage in another place it would have had my unqualified support; but, as my noble friend Lord Belstead reminded us in his clear introduction, the new Clause 11 and its 10-page schedule of unbelievable complexity were inserted into the Bill at Report stage. It could not be examined in Committee but was debated one evening on the final day of its passage through the Commons on 17th April.
By introducing in this way an amendment which, to judge from my mail, has already caused deep division in the farming industry, I fear that the Government may be laying themselves open to criticism for repeating some of the mistakes that were made in 1976. Noble Lords will remember that what happened then was that an ill-digested, complicated and very controversial amendment introducing succession provisions was tagged on to an Agriculture (Miscellaneous Provisions) Bill at a very late stage in the Commons.
The industry was divided. A measure was forced through which did great damage to the landlord and tenant system in agriculture, and so an attempt had to be made by this Government to repair the damage by means of the agriculture holdings Act of 1984, after great trouble was taken to draft legislation that was broadly acceptable to the industry and to the professions.
I am not saying that Clause 11 and its schedule are in quite the same category as the 1976 succession provisions. In this case the intention behind the amendment is praiseworthy and sensible. But some of its effects could be damaging to that very landlord and tenant system which this Government have rightly been so keen to rescue. It would be a tragedy if the Government, with the best intentions, promoted a measure in such a form that its long-term effects were the opposite of those which had been intended.

647
I am wholly in favour of what the Government are trying to do by Clause 11. Where a tenant has by his skill, by his hard work or by investment, enhanced the value of his landlord's property, then he should be rewarded. This principle was enshrined in the compensation provisions of the old holdings Act of 1948. They have long been accepted by landlords and tenants as fair. The professional valuers have no difficulty in applying them in practice. They work.
The Government, through Clause 11, are—quite correctly in my view—trying to bring compensation for tenants' improvements up to date. The aim is to legislate to cover the case of an efficient dairy farmer who, at the end of this tenancy, leaves his farm with a milk quota larger than average.
But, as we all know, and as I think the noble Lord, Lord Walston, reminded us, no farm in the United Kingdom is similar in all respects to any other farm. Every dairy business is different, and the respective contributions of landlord and tenant are infinitely variable. It is not surprising therefore that in attempting to codify a basis of valuation that will cover a vast number of different cases, the Government have produced this immensely complicated schedule to Clause 11.
This is not the time to examine the Schedule in detail. Suffice it to say that after a series of paragraphs instructing valuers how to arrive at what is called a "standard quota", the calculation of which will depend on an arbitrary figure of yield per cow to be promulgated in an order by the Minister, we then have a page of schedules devoted to what is called the "tenant's fraction". The first paragraph of page 20 provides an example of what valuers will have to try to understand.
The Minister at Report stage on 17th April (at col. 1951 of Hansard) said:
"In preparing the proposals, I have been greatly assisted by the contribution of ideas from the Royal Institution of Chartered Surveyors and the Central Association of Agricultural Valuers."
Schedule 1, if we leave it unaltered, must, as my noble friend Lord Stanley has suggested, surely provide a fertile field in which the professions may safely graze for a very long time.
The fact that a schedule to an Agriculture Bill is lengthy and convoluted will not in itself do damage to the landlord and tenant system to which the Government have so rightly given support in their 1984 legislation. The risk to the landlord-tenant system from this Bill, if we leave it as it is, is that the proposed basis of valuation in conjunction with the Minister's proposed scale (by which a standard quota is to be measured) may produce amounts of compensation that while highly satisfactory to the outgoing tenant, may be crippling for his ingoing successor. The Government's record of encouraging young entrants into agriculture is very good. I beg them not to spoil it.
I am no great expert in agricultural holdings law, but I believe that existing legislation is perfectly adequate with perhaps a little adaptation to cover the case of the tenants' milk quota. The old 1948 Act, now consolidated into the Agriculture Holdings Act 1986, provided that where a tenant had damaged the reversionary interests of the landlord he could be
648
dilapidated. It provided also that where a tenant's high farming had been beneficial to the holding so that the value of the holding had increased during the tenancy, then the tenant would be entitled on quitting to obtain from the landlord compensation equal to the increase. It is set out extraordinarily simply in Section 70 and valuers have operated it for 38 years.
I hope that when we come to the Committee stage we can do what could not be done in another place which is to look closely at Clause 11 and its terrible schedule. With other noble Lords who have spoken I hope that we can find a less cumbersome way of compensating a good dairy farmer when he retires. I am encouraged by what my noble friend Lord Stanley of Alderley has said that agreement on a method may not be too difficult.
As for the other parts of the Bill, I have little comment to make except perhaps this. While I applaud the recognition by the Government in Clause 12 of the need for balance in the exercise of the Minister's functions, it worries me slightly when I see such subjective concepts as "natural beauty" and "amenity" drafted into the wording of legislation. Some people wish to see a landscape covered with trees; others prefer it totally bare.
A public inquiry was held not very long ago about a proposed routing of huge 120 feet high electricity pylons across some very attractive countryside. The objectors were many and vocal. Only one witness was thoroughly in favour of this controversial development. He was a retired Admiral who said he would be immensely happy to see these structures from his house stretching away into the distance as they would remind him of the grand fleet at sea in line ahead.
6.54 p.m.
Baroness Elliot of Harwood: My Lords, this has been a most interesting debate and it will, I am quite sure, continue to be so up to the end because all of us who are speaking today have different experiences of the agriculture industry. We are all united in our desire to see that it prospers. Listening to the debate, on the whole there is not a tremendous difference in the methods in which we would really like to operate. If your Lordships agree, I shall not talk about the problems which my noble friend Lord Middleton, who is a great expert on these things, has so brilliantly outlined. I am not an expert and I know little about the problems of the quota in the milk industry. But I should like to speak about one or two of the other matters that have arisen.
I should very much like to congratulate the Minister on the way he presented the Bill and the clear and simple manner in which he explained its many clauses. The first clause, concerning the provision of agriculture services and goods, is excellent. It puts forward the whole basis upon which this new agriculture Bill will be carried on. I entirely support that.
I should like to say one word about Clause 12, which is as the noble Baroness, Lady White, said, almost a new clause in an agriculture Bill. The two particular provisions I should like to mention are subsection (1) (a) and (b):
"the promotion and maintenance of a stable and efficient agricultural industry"—

649
that is in a clause concerned with conservation—and:
"the economic and social interests of rural areas."
Both those are of enormous importance. This clause is one which I am sure will be satisfactory and will keep a balance between what is economic in agricultural production and what is conservation-related. Here, as my noble friend Lord Middleton said, the balance may be difficult between someone who objects strongly to putting up electrical pylons and someone else who thinks the pylons very attractive. I am not keen about pylons, but that is neither here nor there. Clearly there are difficulties and different ways in which these matters will be thought of.
We have organisations which are able to give good advice to people. The Nature Conservancy has already been mentioned. Co-operation between the conservationists and the farmers is not impossible. As I read it, the Bill will give grant aid or compensation to the farmer if he is severely hampered by being prevented from developing his land as he wants to. That is only fair.
Clauses 13 and 14 are of great importance. I should like the Minister to assure us that the compensation and the consultation will be absolutely fair to the farmer as well as to those who are concerned about conservation.
I should like to say one word in support of what my noble friend Lord Ferrers said about Food from Britain. He has put the case very well indeed. I had hoped this organisation to help sell food from Britain all over the world might have brought in more demand and more success, though it has done a lot. Those who have organised the work have done very well, but the organisation has not done as much as some of us had hoped. The fact is that some parts of the farming industry have really not supported it on the scale they ought to have done. I have a bee in my bonnet about selling, but I believe we do not think enough about how to sell the goods that we produce. Each year as time goes on we improve our production, but we must somehow get across to the public here and abroad in the EC that our goods are as good or better than anyone else's and we must sell them. This is what Food from Britain was set up to do. It would be a tragedy if, because we do not give it enough support, it comes to an end.
We have had many discussions in this debate and elsewhere about how to vary agricultural production and the use of land due to overproduction of certain items. I do not think this applies in the United Kingdom as much as it does in other parts of the world. But it is true, and under the new Bill there will be aid for ancillary farm-based businesses or crafts, as they are described in one of the clauses. That could include social activities, the development of the tourist industry—although at the moment we are suffering a horrible knock in tourism as a result of something over which we have no control: I hope that that will pass over—and helping small farms to vary their production and develop catering for the tourist trade in the countryside. This will all be encouraged in the Bill. It is therefore up to us to try to see what we can do to use the opportunities which this Bill gives us.
650
I speak from long experience and personal interest, and I am in favour of the extension of the less developed areas for grant aid. I am sure that will be of great advantage at least in making the land attractive for those people who go hiking, rambling, riding or touring.
I have one criticism which many people have made of this Bill. That is the large reduction in many organisations such as ADAS and those specialising in all forms of research development. To date we have had excellent advice and services from agricultural research institutes. Naturally I know the Scottish ones better than the English, but I cannot speak too highly of them. They have been a tremendous asset to all of us who farm, very often in difficult areas, and who need their help from time to time. They have meant a great deal to farmers and to the industry. The cuts which are being asked for today are very severe indeed, and might produce such severe alterations that we should all suffer greatly from what is being advocated in this Bill.
I think that it is only fair that we should pay some amount. I am perfectly prepared to pay for advice when I ask for it. But I want to get the best advice. I do not want to pay for something that is not good enough. So far I cannot speak too highly of the way in which these different institutions have helped our industry.
My noble friend Lord Stodart put it much better than I can. He has had long experience in the department. However, I hope that the Government may think again before they reduce the many research stations and put out of work about 20 per cent. of the skilled personnel in those organisations. It would be a terrible waste. With less and less advice available I can see a lot of enterprises also going to waste. I would hope very much that the Government will think again before these very drastic cuts.
One paper I received stated that the cuts would amount to £40 million. This will stop new developments; the finding of cures, for instance, for diseases of plants or animals; it will waste a lot of trained personnel who, if we want to get them back at some period—as we may well do—will not be there. This is my most severe criticism of the Bill, I hope that the Minister will think again about this matter before it is too late and before any irreparable damage is done.
I note that my noble friend Lord Stodart, like many of us, is worried. We are saying to ourselves, "What is the future plan for agriculture?" It is not easy to state. No doubt many of us have ideas. They may all be different. But I am sure that the need is there. We must not exaggerate overproduction. We could have one or two bad winters and a lot of our cereal production would automatically be no longer available.
The Earl of Onslow: Or another Chernobyl, my Lords.
Baroness Elliot of Harwood: My Lords, absolutely. I do not want to play down the fact that there is overproduction. We know that there is. But let us consider that much production depends on the conditions in which we are all working. One might have very hard winters for two or three years running,

651
in which case one would not have this overproduction. Therefore, while I entirely agree that we have to think very seriously about overproduction, let us also remember that there will be times when it will be not so great, and that we might have six months' store to use which might not be sufficient. Let us not be too depressed about it. I think there will always be a need for production. There will always be a need for the care of the land. We have to find the best way to produce and the best way to use what we grow and sell it, and still to continue our great industry.
7.5 p.m.
Lord Moran: My Lords, I was greatly impressed by the account given by the noble Earl, Lord Ferrers, of the successes of Food from Britain. I hope that his powerful appeal for support from the industry will be heeded.
But my principal reason for speaking in this debate is that I want to say how much I welcome Clause 12, requiring Ministers to seek a reasonable balance between the needs of farming and conservation. The wording of the clause seems to me excellent. A year ago, when I spoke on the Second Reading of the Wildlife and Countryside (Amendment) Bill, I argued that,
"what is needed is a fundamental rectification of the balance towards preserving the countryside",
and that it was,
"only common sense that the Government should accept the obligation … to take account of conservation and the environment".
At Committee stage I supported an amendment in that sense moved by the noble Lord, Lord Buxton, and I was sorry that it was resisted by the Government. I am therefore delighted that 12 months later the Government themselves should be presenting us with a very similar clause. This seems to me to give us exactly what we wanted and it is a milestone in the history of conservation in this country—as far as I know the first such change in the responsibilities of the MAFF since it was set up in 1919.
Of course, much—indeed everything—will depend upon how the new duties are carried out. I hope, for example, that in the light of the new approach the MAFF may be prepared to reintroduce the prior notification arrangements for capital grants so that their impact on the environment can be assessed. But I accept the Government's good faith. I am sure that their conversion to an active belief in the importance of conservation is genuine. I hope from now on that we shall see this all-important balance between farming and conservation reflected in all aspects of policy and applied by the ministry's staff at every level.
I should also like to say a brief word about Clause 13 of the Bill. I do not much like the name "environmentally sensitive areas". As the Council for the Preservation of Rural England has rightly pointed out, a great deal of our countryside, not just half a dozen small areas, is environmentally sensitive. Its suggested name, "Conservation farming areas" seems better. But this is clearly a well-intentioned initiative by the Government, which has been welcomed by the main conservation bodies. For the first time the MAFF is taking responsibility for funding methods of farming designed not to damage the environment. But since we
652
insist that we must pay farmers not to do such damage and will not contemplate subjecting them, like others, to some form of planning control we are left with the problem of money. A point I made last year on the Wildlife and Countryside (Amendment) Bill was that our adherence to the voluntary system seemed likely to lead to vast expenditure. In this case the Minister has said in another place that there is no Community money to implement our schemes, that initially the Government will provide £6 million—a small sum when measured against the sums we spend on storing unwanted farm produce—for only five or six areas and that,
"any extension will depend on the availability of cash at the time".
This does not sound promising, but there are many other areas which cry out for such treatment. The Countryside Commission, I believe, put forward a list of 46 suitable areas, and farmers who enter the scheme clearly need some assurance that it will not be merely temporary. The scheme ought obviously to be extended and ideally to cover the whole country.
The noble Lord, Lord Walston, asked the Minister about existing production grants. In the ESAs these may come from both the MAFF and the Forestry Commission. I would imagine that they should be phased out in the chosen areas; otherwise we might still be giving grants for drainage or afforestation in areas chosen as particularly important because they are wetlands or open moor. I hope the Minister can also assure the House that these areas will be properly managed by competent and adequate staff, in full consultation with the Nature Conservancy Council and the Countryside Commission.
Clause 13, as at present worded, does not seem to cover forestry. May I ask the Minister whether it is true that damaging large-scale forestry operations might take place within an ESA? If so, it seems to me important that forestry operations should be brought within the scope of the Bill. This may be especially important in Wales, where I believe that all the short-listed areas could be affected by forestry. Nothing is sadder than to see so much open hill and moorland with its merlins and curlew, giving way to sitka spruce. According to the Royal Society for the Protection of Birds, in the Cambrian mountains over a dozen forestry grant applications have come forward in the last 18 months. Private forestry companies, I believe, can avoid scrutiny by planting without grant, and they have done this on some occasions recently. So I think it important that Clause 13 should specifically cover forestry operations.
I understand the logic of Clause 1 and I think it is not unreasonable that ADAS should charge for its admirable farming advice. But I think the charges ought to be moderate; otherwise farmers may shy away from ADAS and so not receive the free conservation advice. They will be thrown back on advisory services offered by those with specific commercial interests, like the agro-chemical industry or the makers of farm machinery.
Finally, Clause 14, bringing Community farm grants within the scope of the Wildlife and Countryside Act is much to be welcomed.
There are therefore some questions to be answered, but in general the conservation aspects of the Bill mark

653
a substantial step forward. Above all, I welcome the requirement to balance the needs of farming and conservation.
7.12 p.m.
Lord Forbes: My Lords, I shall begin by declaring an interest because I have now been a tenant farmer for 36 years. I should like to welcome this Bill in general, and, like the noble Lord, Lord Moran, especially Clause 12, which imposes a duty on Ministers to achieve a balance between agriculture, economic and social interests and conservation. I believe that the interpretation of this clause could have far-reaching effects on the rural areas.
I am going to confine my remarks mainly to the upland areas, but further north than the area covered by my noble friend Lord Stodart. I shall refer mainly to the uplands of the north-east of Scotland because it is there that I have seen great changes in the farming pattern during my lifetime. Before the war the land was mainly used for the rearing of cattle and sheep and the growing of some corn. Then during the war years some dairy farms were started up on the low ground. It was during the 1970s that the really big change came about, when grain went progressively further and further up the hillsides, at the expense of livestock. Today it looks as if the winds of change are about to blow and that horn may once more replace corn in much of the uplands.
The replacement of grain by livestock and other land uses must be right for the uplands. I would, however, add a word of caution about forestry. Undoubtedly it is an excellent alternative land use, but unfortunately it is a long-term investment, especially in the north-east of Scotland, because it takes 25 years before timber provides any income. Also, unlike livestock, it does riot hold the rural population.
It is the holding of the rural populations which will have to be considered under Clause 12 (1) (b) when dealing with the economic and social interests of the rural areas. In this connection there is no doubt that it is livestock which provides the main anchor against depopulation because although people can be transported from a distance to work in the woods, when it comes to calving a cow or looking after livestock people have to live on the spot.
Then there is the question of conservation, which, rightly, is receiving considerable importance today. Our countryside and our wildlife have been handed down to us. It is up to us to care for them so that others in the future can enjoy them. In many upland areas today it is difficult to scratch a living by pure farming. Thus there is scope for the encouragement of some conservation by financial incentives. we have magnificent conservation areas and places which are of national importance, such as our national parks and a host of other places. What is wanted now is a mass of really small areas, consisting of just an acre or two, dotted about all over the country, just for the encouragement of flora and fauna: a little area of bog as a habitat for water-loving birds; a small copse of thicket for roe deer; a tiny patch of ground where wild flowers will grow in profusion.
654
That is what is needed now, so that people living in towns and villages have areas within easy reach where they can enjoy the wildlife, fauna and flora. Today too much land is under cultivation. The problem could be greatly eased if masses of tiny areas all over the country were given over to some form of conservation. These tiny areas would in themselves add up to a substantial acreage to be taken out of cultivation.
Then there is the question of the balance of interests. Great care will have to be taken to maintain a sound social structure. Possibly the most worrying aspect here is the future of the uplands, where depopulation of the resident population, as opposed to week-enders, is likely to become a cascade in the near future unless something is done urgently. Farming in some upland areas, notably the north-east of Scotland, is in dire trouble, largely due to the appalling weather last year—the worst weather in living memory. The weather, Coupled with narrowing margins, has had a disastrous effect on farming enterprises in the north-east of Scotland which were previously really sound enterprises.
I have heard it said that given a good summer this year it is amazing how quickly farming in the north-east of Scotland will bounce back into the black again. This view is absolutely irresponsible, as can be proved by anyone who has taken the trouble to do their sums. With the knock-on effects of last year's disaster, it will be impossible to get back into the black this year. Pastures were ruined by animals walking about in mud up to their bellies, and only last week a vet told me he had never known such a spate of deaths and infertility problems among livestock due to the atrocious weather, lack of sunshine and very low-quality winter fodder. Last year's disaster is still with us and is being made worse by a very late spring and increased bank borrowings.
For the social structure of the uplands to survive the threat of depopulation, the livestock sector in these areas must be given further encouragement. One way to do this would be to enlarge the less favoured areas with a much wider stroke of the brush to cover all land that is difficult to farm owing to soil, climate, geographic situation and other such considerations. I hope that when the Minister comes to reply he will give an assurance that increased assistance will be given to those farmers in the uplands and less favoured areas.
There is no doubt that Clause 12 will give Ministers an excellent opportunity to create conditions so that the correct balance between agricultural, economic and social interests can be achieved in the upland areas. Corn should recede down the hill while much of the acreage released should carry livestock. In addition, there will still be room for some diversification, including the growing of timber and the creation of small conservation areas.
Changes there must be, and for that reason I also welcome Clause 1, which enables Ministers to give help over marketing, diversification and conservation. There are many areas in the country where help and advice will be needed over diversification, because in areas like the north-east of Scotland it is difficult to move away from the traditional cropping and stocking owing to climatic and geographic limitations. When I

655
left Aberdeenshire this morning, there were snow patches on the low hills, the high hills were covered in snow and yesterday afternoon the temperature was six degrees Celsius where I live.
Turning to marketing, one finds that in the past most farmers have been very much production oriented. Now, like other businesses, they have to market as well as produce goods. Any diversification or change into other fields of agriculture will require considerable research. Here I am surprised that Her Majesty's Government have been cutting down on research. There may be a legitimate case for cuts in the advisory services: however, research is a different matter. Research is long-term requiring expertise, specialist equipment and, above all, finance, all of which the individual farmer cannot provide.
Then there is Clause 11, on which my only comment is, "No comment", not because it does not affect Scotland but because I have a herd of 250 milking cows and anything I say on the value of milk quotas will largely be biased. Make no mistake, my Lords: the future of the uplands depends on the prosperity of farming in those areas. If farming in the uplands is not prosperous, our uplands areas will become depopulated; that is a certainty.
Finally, I warmly welcome this Bill and wish it a speedy passage to the statute book. Of course, the real test will come in the future, as it will depend on how the Act is interpreted and how it is made use of by Ministers.
7.24 p.m.
Lord Craigton: My Lords, the widening of MAFF's responsibilities under Clause 12 and the environmentally sensitive areas under Clause 13 is a major step forward, and I follow the congratulations given to Her Majesty's Government by the noble Lord, Lord Moran, and the noble Baroness, Lady White. For the first time, income support for farmers in certain areas will be partly divorced from increased food production and will be made conditional on good environmental practice, of which my noble friend Lord Forbes spoke with great authority. Although initially Clause 13 is to have a narrow application, I hope the Minister will say, as the noble Lord, Lord Walston, asked him to, that the intention is to see support of this type available to farmers across the whole countryside.
The days will come when the nation will have to seek other ways of using farmland which is no longer needed for food production, and this has been mentioned by several speakers. It is surely our duty to ensure that this Bill, when enacted, is a help and not a hindrance in arriving at the correct solution for each separate plot of land thrown vacant from food production. There will be a separate solution for each particular plot. The noble Lord, Lord Stodart, said that vacant land will be replaced by forestry. In the all-party conservation committee just the other day we heard the NCC telling us about their publication dealing with this very point—what is to be done with land that is thrown vacant from food production. Any of your Lordships who are members of the all-party conservation committee will get a good report of that speech in the circular.
656
I have a few constructive suggestions for the improvement of this Bill, and I hope that they will be thought to be more worthwhile when considered in this long-term and wider context. In Clause 13, the powers of the Minister seem to me to be unnecessarily limited. For example, he cannot, as the noble Lord, Lord Moran, said, control damaging afforestation methods on the site. Why is that? It is because the definition of "agricultural" is limited to woodlands as an ancillary use on the farm. Again, he can only require or promote the protection of buildings and living things in an area to the extent that they are being damaged, or can be improved, by agricultural methods. This is a ridiculously limited scope for doing the job properly.
Again—and this is almost in the form of a question —Clause 12, which overrides all agricultural functions, includes the promotion of enjoyment of the countryside. Ought not that promotion of enjoyment of the countryside also to be in Clause 13? Finally, if, for example, the Government's countryside and nature guardians recommend steps for improving a building, such steps are limited by having to be taken only by adopting a particular agricultural method, which seems to limit the scope far too much.
In drafting Clause 13 the MAFF are taking an important step in active participation in measures and policies that are not strictly agricultural. The limiting factor in the drafting of this Bill is that the only tool to achieve anything is agricultural methods within the meaning of the 1947 Agriculture Act and the 1948 Agriculture (Scotland) Act. This can easily be amended—I hope to put down an amendment—by referring in Clause 13 to agricultural "or other appropriate measures". Indeed, in relation to Clause 12, the more I think of it the more forcibly I ask myself whether the Minister, in carrying out his new, wider and welcome objects, will not have to have the present definition of agriculture amended, As I read it, in order to carry out the requirements of Clause 12 he will need wider powers.
I have one other point. There is cause for concern in subsection (6) of Clause 13. Having taken the advice of the Department of the Environment bodies, the Minister designates the area and lays down provisions also to meet the DoE's suggestions. What happens under the Bill as at present framed when a farmer has acted on the advice of a private consultant—and, as we have heard already, a private consultant is under no obligation to give conservation advice—and the advice of that private consultant endangers the purpose of the provisions? Or what happens when some new and unforeseen conservation problem arises? Under the Bill the DoE advisers have no standing. They are consulted in the first place, and that is that. Even if they are allowed to be consulted, which is essential, as I read the Bill the Minister has no powers to amend the provisions. The DoE advisers must remain on the scene and their advice must be heard and acted on if the Minister agrees.
My final very short point has already been mentioned by the noble Lord, Lord Moran. Clause 13 will be applied to areas most suitable for the scheme as enacted. They will certainly not be the most environmentally sensitive areas. The CPRE has suggested

657
calling them conservation farming areas. The noble Lord, Lord Moran, did not say whether he agreed, but I think I do.
7.31 p.m.
The Earl of Dundee: My Lords, although the provisions of this Bill have had a mixed reception, there would of course be general agreement that the nature and balance of incentives given to farmers should always be subject to review from one time to another; and thus implicitly it would be accepted that these reviews should occur whenever one set of circumstances gives way to another—such as the scarcity of food and supplies which prevailed at the time of the 1944 and 1947 Agriculture Acts compared with recent Common Market food surpluses which form the background to proposed legislation now.
However, while the re-emphasis on conservation contained in the Bill is widely supported as following from the present condition of over-production, it has not been equally conceded, as noble Lords have already reminded us, that just because farmers overproduce collectively they should now be required to suffer individually by paying for some goods and services which hitherto have been free. Yet how do farmers stand to be affected by the present draft of the Bill; and if at all adversely, what type of amendments may now be called for?
First, there is the distinction between principle and detail. If all farmers could easily afford the new charges, it might still be objected in principle that any charges should be made at all. And although the accompanying argument would hardly be very compelling, that principle might always be defended in spite of the context of over-production and even in the event of a universal ease of ability to pay. But on a point of detail, if while most farmers might afford to pay quite easily a certain number could do so only with difficulty, then there would be a case either for exempting the latter from charges altogether or else for enabling them to pay at reduced rates. Perhaps the best balance will come from a clarification of "reasonable charges", but as my noble friend Lord Stodart and the noble Lord, Lord Walston, have pointed out, these have not as yet been sufficiently explained.
The noble Lords, Lord Walston and Lord Moran, mentioned another difficulty which arises if we accept the allegation that the Bill's conservation measure introduces a conflict of incentives to the farmer. In theory, at least, this conflict exists whenever the Ministry of Agriculture would continue to pay production grants to producers who are operating within so-called environmentally sensitive areas. Can my noble friend the Minister say what plans he and his department may have to resolve or minimise such a conflict, either during the passage of this Bill or at some later stage? Equally, can he indicate what steps the Government are prepared to take to remove or mitigate the impact of charges on those farmers less able to afford them?
Turning to the interests of the consumer, there is of course a parallel inference to be drawn from overproduction. If everyone has more than enough to eat, then all the greater emphasis can be put on the aim of
658
achieving quality rather than quantity. Regarding the quality of food available on the market and irrespective of marginal price differentials, there has in fact been increasing consumer demand for a wider choice which takes note both of particular foods themselves and of how these have been grown and processed. What bearing therefore does this type of demand have on production processing and marketing?
On what is grown, there is certainly no good reason for discouraging traditional produce such as butter, milk and beef. Yet this may be a point which would cause people to have mixed feelings. If medical opinion were to be constant and undivided, then at least we could know definitely what to avoid. But if doctors keep changing their opinions about which foods are good or bad in themselves, then, although no doubt in moderation, we might as well always eat what we like. This is really quite a satisfactory state of affairs. It removes the need for awkward and irrevocable decisions, and many of your Lordships will agree with me that life would hardly be the same if certain foods, such as roast beef and Stilton cheese, were to be out of favour for a long while.
On the other hand, how foods are grown and processed is an entirely different point. Recently there has been significant demand for produce which has been grown organically as distinct from that subjected at various stages to chemicals and artificial stimulants. The signs are that many more people would wish to benefit from a choice if relevant differences in the production process were communicated through better advertising and promotion. While over-production can mean that the farmer is able to pay more attention to conservation, it also means that the consumer should be able to benefit from a wider choice of healthy food. In this respect can my noble friend the Minister reveal what initiatives the Government are prepared to take to encourage organically grown produce free from chemicals and to help stimulate further consumer demand through advertising and in other areas?
Then there is the effect of the Bill on improved conservation and amenity in the countryside, to which Clauses 12 and 13 are directed. One objection has been that the current propositions are on a very small scale compared with what is recommended by the Countryside Commission and Nature Conservancy Council. The noble Baroness, Lady White, pointed out that the original number of designated areas was quite high and then it came to be whittled down. Will the early evidence of the success of this exercise be able to generate more public funds? And apart from that, do the Government now plan to give any direct incentives to assist the useful work which is being carried out by the forestry and farming wildlife groups and other voluntary conservation bodies?
This Bill is to be welcomed insofar as it attempts to bring British agriculture up to date and reflects the fact that the CAP has now been taken into the environmental field through a British initiative. While overproduction leads to problems of mountains rather than molehills, it can also present many exciting opportunities. Clearly these should be taken whenever possible to achieve diversification of land use by the grower, healthier food for the consumer and, not least

659
for all concerned, greater enjoyment of the countryside.
7.37 p.m.
Lord Melchett: My Lords, I should like to start by saying a word about the environmentally sensitive areas in Clause 13. Needless to say, along with, I think, everyone else who has spoken, I warmly welcome this clause of the Bill. There is not a great deal left to say about it as a number of noble Lords have touched on the subject but I want to echo what has already been said by the noble Lord, Lord Moran, and others about the name of these areas. "Environmentally sensitive areas" seems a complete misnomer. "Conservation farming areas" would be much better.
That might prevent someone like the noble Lord, Lord Stanley of Alderley, from falling into the trap which he did of suggesting that in these areas farmers would be paid for doing nothing. The noble Lord suggested that the public would object to that. Payment for doing nothing was a feature of the Wildlife and Countryside Act 1981. In these conservation farming areas farmers will be paid for farming in a particular way that benefits the environment. I do not think there will be any public opposition to that—indeed there will be overwhelming public rejoicing, as there has been in both Houses of Parliament and from all political parties.
The noble Lord, Lord Stanley of Alderley, also suggested that these areas would be very expensive and he said that the Treasury should not forget it. But I understand that just today the Countryside Commission and the Nature Conservancy Council produced a report detailing their recommendations on which areas should be included in the first group of areas to be designated under Clause 13. They reckon that they could manage to get 14 areas in England and Wales—my noble friend Lady White will be pleased to hear that that includes five in Wales—for a maximum sum when the scheme is fully running of £9.25 million.
As I understand it, the Government are prepared to commit £6 million in the first year of the scheme, and the Countryside Commission seems to be of the opinion that that would be sufficient for 14 areas initially, not six. We would need to look at the detail of what level of payments was being provided for, but it shows that areas can be designated under Clause 13 at a not excessive sum of money. I hope that the Government will be able to agree to all 14 areas being designated initially, given the modest costs for which it appears it will be possible to do that.
It is worth remembering that it is not very long ago that the noble Lord, Lord Belstead, appeared before at least one if not two Select Committees of your Lordships' House, arguing very fiercely that such a payment could never be made by the Ministry of Agriculture; that it would be contrary not only to the Treaty of Rome but to everything that everyone who loved the countryside held dear. There has been a dramatic conversion. I welcome it, and the noble Lord has played a considerable part in changing the Government's policy. All of us who care about the countryside are grateful for that.
660
I am afraid, however, that that conversion has not been an easy one and there are still signs of resistance to the new policy. For example, I find it quite extraordinary that in Clause 13(2) the Treasury should be involved in deciding which areas should be designated under that clause. In Clause 13, the Treasury are not being set up to provide some overall amount of public expenditure that will be involved, but apparently they will be tramping round West Penrith, the Orkneys and the Cambrian mountains looking at fields, orchids and sedges to decide whether this field should be in an environmentally sensitive area and that one out of it, and so on. That is a perfectly ludicrous proposition. I cannot imagine what on earth the Treasury are doing, notifying areas of the countryside as being environmentally sensitive or not. I sincerely hope that the noble Lord, Lord Belstead, despite what he will no doubt be briefed to say, will be with us in spirit when we move an amendment to delete that part of the Bill—and I am sure that his colleagues in the Ministry will.
There are, as other noble Lords have mentioned, problems as to what happens if somebody in an environmentally sensitive area does not play ball with the concept. It is possible to imagine a whole area being destroyed by the actions of one, two or three landowners or farmers in the middle of it—particularly in the case of a wetlands area, an area notified for its high water table, which could be effectively destroyed by one or two people undertaking a drainage scheme.
Similarly, an area of moorland could be totally negated from any environmental value if a large block of forestry were to be established in the middle of it—even if many farmers in the area had not gone in for afforestation. Clearly, it must be right that there should be controls over such destructive activities in a notified environmentally sensitive area, for the benefit of the other farmers and landowners who will be receiving public money to farm in an environmentally sensitive way.
It seems to me vital also that the Nature Conservancy Council and the Countryside Commission, who have played such a major role in identifying areas to be notified, should be closely involved in the management of what I hope will shortly be called conservation farming areas.
Before I sit down, I want to say a few words about matters that have not been mentioned to any great extent so far in the debate. I want first to comment on Clause 12, which I warmly welcome being included in the legislation. It is a clause that a number of us argued should be included in a Bill that came before your Lordships' House last year. Again, it is one where there has been a considerable conversion on the Government's side, which I very much welcome.
I stress to the noble Lord, Lord Belstead, although I am sure he is aware of this, that many people are expecting new initiatives as a result of Clause 12, and I shall simply point to things that are already happening as being evidence that the effectiveness of the clause in a Bill that is not yet an Act of Parliament will be very unsatisfactory.

661
I suggest one way in which your Lordships could help the Government implement Clause 12(1)(d), which refers to the need to promote,
"the enjoyment of the countryside by the public".
It seems to me that with the introduction of payments for conservation farming in environmentally sensitive areas, the Government will be putting right one of the major mistakes made by Parliament and the Government in the Wildlife and Countryside Act, where we went in for a system of trying to secure nature conservation by a very weak series of controls while the financial inducements were all pushing in the other direction. Now we have some financial inducements pushing in the right direction, and that is very welcome.
However, we made another mistake in the Wildlife and Countryside Act, which was to change the law to allow beef bulls to be grazed with cows and heifers on fields crossed by public rights of way. Since we made that change in the law, the Health and Safety Executive has issued advice contradicting what was said by the Government when the Wildlife and Countryside Bill was being debated.
The executive has now said that all bulls are unpredictable and that no bull that might be a danger should be placed in a field which is crossed by public rights of way. That means, so far as I can see, that any farmer putting a bull in a field crossed by a public right of way is in breach of the Health and Safety at Work Act. We therefore have two Acts of Parliament in conflict with each other. I hope that in order to promote the enjoyment of the countryside by the public, as Clause 12(1)(d) suggests that both the Government and the Ministery of Agriculture should do, we will be able to change that particular part of the Wildlife and Countryside Act when we reach the Committee stage of this Bill.
I want finally to say a word about the approach to agriculture that the Government have adopted, not only in this legislation but more generally. At the start of this long debate, the noble Lord, Lord Belstead, spoke about this Bill creating a partnership between government and farmers. I, as much as anybody else who has lived in the countryside and who has been involved in farming, have always been taught that the Agriculture Act 1947 created a partnership between government and farmers; a partnership that has been continued under governments of different political parties very successfully for many years.
It seems to me that that partnership only started to break down—and I believe that it has broken down now—in the past five, six or seven years, in a period when political dogma has been allowed to intrude into agricultural policy. The Government set about a piece of socialist legislation from 1947 that provided for state finance for agriculture, many state controls, marketing boards, state-funded research, state-funded guidance, and advice for farmers. Those are all provisions that noble Lords on both sides of the House have said during this debate that they felt were important and should be retained, and which they are concerned about losing in this Bill. Those provisions have all been under steady attack for many years now.
When prior approval for agricultural grant aid was removed, the Government assured your Lordships'
662
House, in a long debate on an amendment that I put down to an order, that ADAS staff would not be cut but that they would be redirected into areas such as conservation advice. As the House has already heard in this debate, there have been massive cuts in ADAS over the past few years and no redirection into conservation advice of the kind that we were promised then. There has been some increase but no stopping of the cuts, as we were told there would be. There have also been cuts in the research capability and in many other areas of support for agriculture that the Agriculture Act 1947 established.
There have also been the cuts in capital grant aid without any really significant switching of funding into the new kinds of grant and development for which so many people have been arguing for so long, and for which Clause 13 of this Bill at long last represents a very modest step towards.
Nevertheless, the fundamental approach that the Government have adopted has been a monetarist one. It has been to remove state support and state funding for the agricultural industry that the 1947 Act established, and which successive governments have supported. That is why the partnership between farming and the Government has broken down, and I do not believe that this Bill will do enough to re-establish that partnership. The general attitude that is exemplified by the Treasury's odd appearance in Clause 13, which I have already mentioned, continues to dominate the Government's approach.
For example, after a great deal of pressure, the Government took on board the concept of environmentally sensitive areas. They went to Europe and secured a notable victory. But they do not seem to have pursued it. They are not trying to make policy once again. The UK is reacting to policy initiatives from Europe rather than leading the way, which in this field in particular I think we could.
The noble Earl, Lord Dundee, has already mentioned that the Government are doing nothing to promote organic farming. In Germany, there are three state-run research farms already converted to organic farming. There are more than 1,000 farms that are farming organically. There is state research, and so on, going into organic farming there. In this country, the Ministry of Agriculture does not have a single experimental husbandry farm undertaking organic work, despite years of pressure. The ministry has buried a report on organic farming, and so on and so forth. The ministry is still looking backwards, with the Treasury breathing over its shoulder not just in respect of ESAs but also in respect of every other aspect of agricultural policy. That is why I believe that we still have a long way to go before we re-establish the partnership between government and farming that all of us want to see.
7.50 p.m.
The Earl of Radnor: My Lords, I should like to congratulate my noble friend the Minister on putting this Bill before us so clearly. To me it is rather like a farming rotation: it darts from subject to subject and it is intended—indeed, it is—to be in keeping with the times and with what one wants to be accomplished.

663
However, like my rotations, it is probably not executed always perfectly and there is probably quite a lot of work that we can do on this Bill later, as I think my noble friend Lord Stanley mentioned.
We are getting through this debate, and most matters have been referred to. Some noble Lords have spoken on their own particular subject, and some have covered the whole Bill. However, to my immense surprise nobody has mentioned what I think I have noticed walking through this debate—the spectre of rural unemployment. We have talked about the environment—and no one, least of all myself, hardly dares be anything except an environmentalist these days. Conservation is, in a way, a bandwagon—a very proper one—which I very much go along with, but it is not always compatible with work and with work-people in the countryside, and they are as much part of the environment as are rabbits, butterflies, trees or whatever. Therefore, we must keep in mind, as we consider this Bill, that we should put as a top priority the retention of as many people working in the countryside as we possibly can. This must be done even if it is at the expense of sacrificing one or two of these recent sacred cows of the environment that are talked about so much and about which we have so many laws.
When we are referring to Clauses 12 and 13, which are concerned with working the environment into farming and with designating areas of special beauty to be looked after in a special way and, I gather, to be paid for by the European Community (not all a bonus, because I suppose we put the money there in the first place), I confess that I am a little confused as to how this slots in with all the other things now going on in that respect—tree preservation orders, listed buildings and sites of special scientific interest. There are a number of strictures which are put upon farmers over quite large areas, and, if he will pardon my stupidity, I should like my noble friend to clarify whether these new areas sweep away all the existing strictures or whether, like a hat, they are placed on top of everything to complicate the issue and bring in more bureaucratic control, which is not necessarily compatible to the objectives that many noble Lords would like to achieve.
If I may, I should like to work backwards through the Bill. I must strongly refer to the whole question of milk quotas. I would not dream of mentioning this in any detail after the very clear exposition of my noble friend Lord Middleton and the remarks made by my noble friend Lord Stanley of Alderley, but it horrified me to read that schedule. It will perhaps be an embarrassment to all of us if that ever gets on to the statute book. I think that my noble friend Lord Middleton probably has a very good idea in suggesting that we should cast our eyes backwards to the Agricultural Holdings Act 1986 and look at that closely to see whether it is not possible to do something that is a great deal clearer, which does not rely so much on supposition and which does not take into consideration the types of dairy farming that might have been practised, the type of farm on which it might have been practised and that sort of thing. On the face of it, that seems to encourage people, if they want a good pay-out at the end of the day, to go for
664
high production. In point of fact that is one of the things we are told (and rightly so) are not required.
To jump now to the beginning of the Bill and payment for advice, I must admit that I see nothing wrong in that. I do not think that it would be right, in this day and age, for farmers to go on expecting to receive their advice free. I do not think it right that they should go on expecting not to pay for certain statutory duties that have to be done as outlined in this Bill. What I do sympathise with immensely is the rundown of ADAS. I do not know whether its morale is good or whether it is bad. I cannot possibly believe that it is good. I think that is a sorrow to all of us who have worked with it. I hope that those who are out of jobs will find suitable employment elsewhere.
As regards the various authorities mentioned in the Bill, there is a certain amount of juggling with numbers. I noticed this particularly with Food from Britain, which I believe I am right in saying without referring to the Bill is to have more people. I hope that, if that is so, it will extend the optimism that my noble friend Lord Ferrers put to us, that more people will now join in and that this increased representation anticipates that other lines of endeavour will be represented by Food from Britain.
I feel that in this area it is quite difficult for the individual to contemplate selling abroad. I wonder exactly what Food from Britain does as well as promotion. Promotion is obviously of prime importance. It is the details that always worry me. I have tried a small amount of exporting, but have totally failed on very simple aspects. To start with there is the language barrier, and then there are licences, transport, health regulations, and so on. I am talking about exporting fish. I hope that Food from Britain will be looking at that aspect as well as straight promotion at fairs throughout Europe.
As regards the duties of, in particular, the Home-Grown Cereals Authority, I note that they have been expanded from marketing to production and marketing. I see here a little hope that the authority might feel inclined to use what influence it has with us farmers to teach us a little about farming at very low cost. It is in this area that I see the best hope of keeping people on the land. I should like to see as much land as possible kept under cultivation, but that it should grow less and yet the margin should be maintained as best it possibly can. That is the path I would take, and that is where I hope the Home-Grown Cereals Authority will play some part.
I think it is a useful Bill. It had to happen at this time. I think with a little bit of luck and the help of my noble friend Lord Middleton we will get it back to what apparently it was when it came to your Lordships' Chamber. Like the noble Baroness, Lady White, I give the Bill a qualified welcome.
8 p.m.
Earl Peel: I also should like to join with other noble Lords in welcoming this Bill. I think that if any criticism is to be made, it is that perhaps there is a shortage of detail, but I exclude from that remark the schedule pertaining to milk quotas, which I think goes rather the other way. I do not wish to say anything about milk quotas. I do not for a moment pretend to

665
understand the schedules, but there I am in good company with other noble Lords. We have heard what I might describe as two agricultural heavyweights from this side of the House, my noble friends Lord Middleton and Lord Stanley, also criticising this part of the Bill, so I think I can assume that when we come to the Committee stage we shall have a long debate on this particular clause.
Moving on to other parts of the Bill, it is gratifying to see an ever-increasing acceptance from the Government that neither agricultural production nor the social needs of the rural environment nor conservation can any longer be seen in isolation. I wonder whether this is not heralding the day when we shall see a Minister for rural affairs, which I think many of us would see as an advantage.
I very much welcome Clause 12 of the Bill. I remember only too well when my noble friend Lord Buxton last year moved a similar amendment to the Wildlife and Countryside (Amendment) Bill. I gave it my support then. Though it is somewhat differently worded now, I support this clause in exactly the same way. However, I think we shall have to wait and see what real commitment the Government are prepared to give in carrying out effectively these new responsibilities. For example, will capital grants, which are contrary to the best interests of conservation, be rejected by the Ministry of Agriculture in the future?
I hope that this clause will allow the Ministry of Agriculture to come to terms with some of the abuses which exist within the HLCA systems. My noble friend the Minister knows my feelings about this matter and we have had correspondence about it in the past, but I think that it is perhaps a pity that the problems to which I refer have not been sorted out before the ESAs have come about. The whole ESA principle is basically an extension of the HLCA system and the Commons Registration Act of 1965. This is not working, and I urge the Minister to take another look at it.
Moving on to Clause 13 relating to ESAs themselves, I suppose I should declare an interest because I think some of my land is on the short list to be included within an ESA. I congratulate my right honourable friend the Minister upon achieving what I think we all hope will prove to be a real breakthrough in the effective integration of rural needs. I wish this scheme every possible success, but I think it is important that we do not rush it, that we take it carefully with a small number to begin with, which must be the right approach to ensure that ESAs work effectively.
One point that I should like to make was also mentioned by the noble Lord, Lord Melchett, in reference to something which my noble friend Lord Stanley said, which was that we would be paying farmers to do nothing. That is not the case, of course. We shall be asking them to farm in a particular way, but simply reducing stock numbers does not mean that they will be doing nothing; after all, good husbandry can go equally well with reduced stock numbers.
I am aware of the considerable debate that took place in another place regarding the arrangements
666
pertaining to ESAs and whether they should be directed solely towards the tenant or towards the landlord as well. I know the Minister has made it clear that such arrangements would be made with the tenant, but with an obligation on the tenant to notify the landlord. There are degrees of notification, and I believe that the landlord should and indeed will want to be involved in discussions at the very earliest stage. As the owner of the land, he is likely to want to know how his land is to be farmed and it is important that any such agreement should not stifle his ability to negotiate a free market rent. The important thing about this whole ESA system is that it must be fair to both sides.
Another point I should like to raise concerning ESAs is the question of compensation. I appreciate that there will be different rates of compensation in different ESAs, but I ask the Minister the question: Will there be differing rates within each ESA? After all, within existing management agreements there are different rates, and I should have thought that a blanket rate or one single rate within ESAs simply will not generate the necessary incentive for ESAs to work effectively.
The noble Lord, Lord Moran, and other noble Lords raised the question of forestry. I, too, ask my noble friend whether in fact forestry will be included in ESA designations. The impact of forestry on the countryside is perhaps the greatest of all changes that affect the aesthetic value of such land, but I would go further and if I may I should like to extend the forestry debate outside the remit of this Bill because I think that the time has come when the Government will have to have another look at the whole question of forestry. Personally, I believe—and I accept that many noble friends on this side of the House will not agree with me—that over and above certain acreages forestry should now be brought under planning control.
I also wonder whether we are not very far from a situation in which we shall have to consider some form of zoning in the upland areas under which certain activities will be given priority over others, although of course there will always be the opportunity for integration to some extent. With regard to forestry in the uplands, we are witnessing as a result of the tax incentive schemes that are available trees being planted in quite ridiculous places which I doubt very much will ever yield a productive crop. Therefore I again urge the Government to look closely at the whole question of forestry in the uplands and to give it their urgent consideration.
Returning to the Bill, it is possible that in the near future we may find a farmer who is working land which is in a national park, in an ESA. Part of his land may well have been designated within the moor and heath area under the Wildlife and Countryside Act. He may be involved with a managment agreement and may well have the odd SSSI thrown in, and to top it all he may soon be subjected to a Landscape Area Special Development Order. He has probably spent a great deal of time over the last few months, or years, as the case may be, discussing these designations with the various people responsible for them. He may have a great deal of difficulty in being able to tell one from the other, because as far as I can see most of them have

667
beards—apart from the girls, that is. Perhaps he thinks, "What am I going to do, given all these restrictions and all the red tape around my neck?" He may say, "I shall go to my friend the ADAS officer, the man with the cloth cap and wellingtons, who I can talk to". Then what? He may well be told in the future that he will be charged for this service.
I really believe, and other noble Lords have affirmed this as well, that Clause 1 is a retrograde step. After all, European governments create and dictate the agricultural policy and, if they expect farmers to adapt to this policy, then surely the service offered to farmers must be free and must be effective.
Other noble Lords have mentioned the demise of the research side. That too concerns me greatly. It is often the small farmer who needs the service most who is least likely to be able to pay, and the pressures on him at the moment are considerable. We shall come back to this in Committee, but it concerns me greatly.
Despite my comments, like other noble Lords I welcome the Bill and congratulate the Government on bringing it forward.
8.10 p.m.
Earl De La Warr: My Lords, I shall speak about the Bill for only a couple of minutes because I want then to range over wider aspects of farming. I can give a cautious welcome to the provisions that enable ADAS to make charges. I say "cautious" because I am concerned, as I am sure my noble friend is, to see that it is not thereby dispersed, as it is a body with considerable skill and experience.
I fully support the concept of management schemes in environmentally sensitive areas. Like the noble Lord, Lord Walston, I hope that it is only a beginning, and we shall see the system grow into something much larger.
Finally on the Bill itself, let me say a quick word, and perhaps a contentious one, about the outgoing farmer scheme and quotas. I do not understand how it creates an asset to tell a tenant farmer who has milked his cows for 20 years that he is liable to a levy on everything that he produces (over 90 per cent. of what he produced in 1983), as has been done in the past few years. That goes further to the heart of the question than perhaps any other speech has done. I have no doubt that the noble Lord, Lord Mackie of Benshie, will help me to get my thoughts in order. I look forward to hearing from him, but at the moment to me it is the logic of the looking glass.
I want now to turn to the farming outlook and the finances of the industry. In the Second Reading debate on the Bill in another place my honourable friend the Member for Hereford, Mr. Shepherd, referred to a letter that he had had from a farmer friend in the constituency; he was a good farmer, so he said. He wrote about the unpalatable fact that farming is going into a deep recession which will lead to further depopulation of the countryside and increased rural unemployment. I entirely agree. I add only that I believe that the recession has only just begun.
I do not want to pour out a large number of figures or statistics to your Lordships. But as noble Lords will know, farm incomes in 1985 were 43 per cent. down
668
on the previous year and in real terms no less than 22 per cent. down on the previous worst year since the war, 1980. Perhaps what gives us more of an indication is what has happened with bank lending over the past 10 years. Bank lending to farming has gone up inexorably from £1 billion nine years ago to over £5½ billion today. Since 1980 in real terms it has gone up by 45 per cent. Last year, partly because of high interest rates, bank interest went up by as much as £100 million to a total of £700 million. It is not given to us to know what proportion of that is money lent for new investment and what proportion is roll-up of interest due, merely adding to the existing overdraft; the classical primrose path for any business. But I guess that a good deal is for that reason.
No industry has ever gone on for long producing unwanted goods, and farmers are no exception to that rule. We have to realise that pressures on farmers are bound to increase, whatever the nature of the pressure. It may be in the form of reduced prices or it may be in the form of reduced outputs, either by quotas or by managed set-asides. For the farmer the effect is exactly the same. All such pressures reduce his revenue, and most of that will go almost direct to the bottom line. I fear that many farmers cannot survive.
The other day I was looking at some work by the farm management services of the Milk Marketing Board which looks at the total costing of farms. It produced remarkable figures. Of a sample of 800 farms, 50 per cent. were unable to pay their interest because they had negative cash flows. The bottom 25 per cent. had fixed costs so inflated by finance charges that they can never hope to get out from under. Let me read a comment at the end of the report. Referring to the bottom 25 per cent., it states:
"This is the major problem area where improvements in gross margins or in cutting [fixed] costs are unlikely to solve the chronic problems of the business. They will all be making losses with large cash deficits".
It states that some farms may be able to sell off assets such as a house or some land but,
"for others … the best course of action is to sell up",
and the realistic farmer will make the bold decision before it is too late. That does not indicate that 25 per cent. of all farms in the country are in that sorry state, but it must indicate that a frighteningly large percentage can take no further pressures of the type that I have mentioned.
I shall not present your Lordships with further figures, but I believe that we must never let up on our understanding of how frail is the financial plight of far too many farmers in this country. I fear for many producers of beef, for many of our small dairy farmers and, above all, for the smaller cereal producers who are producing cereals on the lower quality of grade 3 land and are thus operating on substandard profit margins.
A very large number of farmers—not all of them small ones—will, I believe, be moving out of farming. Some will go due to bankruptcy, but many more, I believe, by choice. This is not a happy thing to have to say. I look to see, over the next five years or more, fewer farms in this country. I look to see less land in production, particularly less cereal land at the lower end of grade 3. This could amount to as much as half a million hectares. I look to see fewer people employed

669
in farming, the other side of the unemployment penny. This is a point already made by my noble friend Lord Radnor.
I look to see further changes, as a result, in the infrastructure—the disappearance of farm roads, and farm houses and farm cottages being separated from the land. There is something about that which is irrevocable. I farm myself in the Weald, one-third of which, perhaps surprisingly, is grade 4 and the rest grade 3 land. Some of us can already see what I have been describing. We can see poor fields with unkempt hedges and thistles growing. It is not a happy sight. It is not a sight that one would have seen 10 years ago. But it has all happened before. It happened in the 1870s and again in the 1920s. It was, I believe, the noble Lord, Lord John-Mackie, who said in a debate not long ago that his father said that he had had so many crises in his lifetime that he doubted whether there was one left.
All industries go through recessions. This industry is no exception. Farming is never comfortable. I took great heart, however, from the typically stalwart speech of my noble friend Lady Elliot of Harwood. Like her, my anxiety for the future is combined with an overwhelming faith in the skill and stoicism and, when the chips are down, the flexibility of the British farmer.
8.23 p.m.
Lord Hunt: My Lords, I have to start the few words that I wish to contribute with an apology. I was kept outside your Lordships' Chamber for the duration of about seven-and-a-half speeches by an inescapable engagement in connection with the environment or conservation. I have therefore missed a great many of the valuable contributions that have been made. I shall do my best, however, not to repeat what I think may already have been stated. I have, of course, paid careful attention to those speeches made since I returned to the Chamber.
My noble friend Lord Walston began his speech—it was at that point that I had to leave—by giving faint praise to the Bill. I gather that a number of noble Lords and the noble Baroness, Lady White, have given it a qualified welcome. I should like to be slightly warmer in my feelings about the Bill than is indicated by those adjectives. I should like to pay credit where, I believe, credit is due. This Bill has its origins, I believe, in a distinguished report by your Lordships' Select Committee on the European Communities which dealt with agriculture and the environment under the chairmanship of the noble Lord, Lord Greenhill. There is no doubt that credit is due to that report. Credit is also very much due to the Minister of Agriculture, Mr. Jopling, and no less to the noble Lord, Lord Belstead, for their historic role—I use that adjective advisedly—in Brussels. Everyone knows the outcome of that. I would therefore pay tribute where it is due.
I am unable to follow the noble Earl, Lord De La Warr, for the simple reason that while I am a countryman at heart, I am not a farmer. I listened with tremendous interest and some concern to what the noble Earl said. My contribution will be limited to those clauses of the Bill that deal primarily with environmental matters and Article 19 of the agricul
670
tural structures directive of the EC regulation that is their inspiration. I shall therefore concentrate on Clause 12. I believe that the Bill will be seen as historic in years to come. It is unique in a long line of legislation on agriculture in placing responsibilities upon the Ministry of Agriculture, Fisheries and Food for environmental protection and for requiring the Minister to achieve a reasonable balance—I underline the word—between that responsibility and that of agricultural production.
The word "balance" goes to the heart of the Bill. That having been said, much will depend on how this new policy is put into practice; I stress the word "new". I was concerned to read in the record of the Committee stage of the Bill in another place that Mr. John Gummer averred that this was not a new departure. His words, which I am, I think, entitled to quote, were:
"What we propose is the recognition of what is already being done".
I would not dissent from the fact that a great deal is already happening in that sense. We are concerned with the exceptions. I was concerned after hearing the spokesman from the Labour Front Bench, the noble Lord, Lord John-Mackie, that an agricultural heavyweight—I use the description, following mention by the noble Earl, Lord Peel, of heavyweights on his side of the House, entirely in a professional and political sense—should throw his weight down, as I saw it, to tip the balance extremely heavily towards agriculture. It is balance that we need. Such an attitude could mean that nothing beneficial will come from Clause 12 of the Bill. I would therefore welcome the Minister's reassurance on this point. How do the Government intend to interpret and to implement this policy? I was interested to hear the views and the suggestions of the noble Lord, Lord Melchett, in that connection.
In regard to Clause 1, to which reference has, I suppose, been made by every speaker, I reiterate the point that it is both undesirable and, I would say, impracticable to separate free advice by ADAS about conservation from agricultural advice that may have to be paid for. The noble Lord, Lord Belstead, used, I believe, the word "possible", but I should like to hear his clarification of that point. Conservation and the need to balance that aspect of rural land use with that of agriculture means that both, surely, must be perceived in an integral sense and not as two separate parts. The fact that advice may be provided on different financial terms makes for accounting complications and may also inhibit requests for, and provision of, advice about conservation, especially requests from small farmers. I noted with interest the words of Mr. Jopling at Second Reading in another place on 25th November, when he said at col. 622, in referring to the Secretary of State for the Environment:
"I greatly value this visible sign of the shared interests of myself and my right honourable friend the Secretary of State".
How real will that be if this first sign of a shared interest and responsibility for the environment is flawed by separate arrangements for financing advice? And how are those interests to be shared between the two departments? This is a matter of intense interest and great importance. Perhaps the Minister will enlighten us.

671
I also noted from debates at the Committee stage in another place that for advice on agricultural matters ADAS may have to compete commercially with the private sector. Is it not at least likely that private consultants will be called in by many farmers, perhaps more than before, instead of ADAS? Of course, the former, the commercial consultants, have no responsibility, perhaps no interest and no special knowledge in offering advice on conservation. The logic for providing free advice on both agriculture and conservation by ADAS seems to me to be inexorable.
I turn to Clause 13 and, like other noble Lords, I especially welcome this clause. I note with approval the Government's intention to begin, to use Mr. Jopling's adverb, "warily" with a few pilot schemes in order to gain knowledge and experience in the management of and the resources required to make a success of the ESAs. The ESAs must succeed and a cautious beginning is a sine qua non for the success and, even more important, the extension of these specially protected areas. That I think was a point made by the noble Earl, Lord Peel.
However, is the choice of only six areas sufficient? Does it match the urgency of the situation, given the danger of harmful development in other key areas already recommended by the Countryside Commission and the Nature Conservancy Council? Of the 13 which they selected in their short list, at a glance I would have said that they are all of equal merit. Those selected areas would appear to have equally strong claims and, as it is, more than half of them will have to wait a matter of years before they are designated. To give one example, we have seen on Exmoor in the 1970s, and subsequently in other national parks, how much irretrievable harm can be done in a matter of a few years. The need for designation is therefore wide and urgent. Having said that, I still say that it is wise to start on a limited basis.
I shall not touch on the financial matters concerning the funding of ESAs because that point has already been covered. However, there is one further and final point which I should like to put to your Lordships about ESAs which seems to me to be crucially important. This scheme could be undermined by a few farmers in one ESA, or even by one farmer who refused to co-operate, who declined the opportunity to enter into a management agreement and proceeded with environmentally damaging development on his land. For instance, it might take the form of tree planting in an upland area within an ESA as part of his plan to diversify his farming in the wake of restrictions imposed by the farm surplus situation. We have had examples of refusals to accept MAFF grants in connection with the national parks over the last few years.
This has been mentioned, but I repeat it: what about the Forestry Commission's felling and planting plans, over which there is still no control whatever? At the Committee stage in another place the Minister, Mr. John Gummer, made great play about his powers to require the commission to consult, for instance, the National Parks Authority before going ahead with its plans.
However, consultation falls far short of restricting operations which may be environmentally harmful.
672
Surely the success of this scheme of ESAs cannot be put at risk on this account. Does it not strengthen the case, which has been argued over a number of years going back to the Porchester Report on Exmoor in the 1970s, for fallback powers to be held in reserve for use as a last resort, available to the Countryside Commission and to Ministers, as is already the case with the Nature Conservancy Council under Sections 28 and 29 of the Wildlife and Countryside Act 1981?
I am all for the voluntary approach preferred by the Government, but not to the extent of risking the success of the ESA scheme. Therefore, perhaps the Minister would say something about landscape conservation orders which the Government undertook to consider following a recommendation in another place of the Select Committee on Agriculture and the Environment last year.
8.35 p.m.
Lord Mackie of Benshie: My Lords, when I saw that 22 speakers were on the list to speak, my heart sank, but I have listened to nearly all of them, apart from a short break for lubrication, and I have enjoyed and been much impressed by what has been said. The debate has shown a real and genuine concern for the whole of the countryside and for the environment in which most of us live, and has not been concerned with our personal financial position.
There have been some notable speeches. The noble Earl, Lord De LaWarr, was teasing me in the bar about some trivial remark that he intended to make; then he went and made a notable speech, which I greatly enjoyed and which went right to the heart of the problem. Then, I have seldom agreed more with my noble kinsman, not that we disagree about much when it comes to farming matters.
I was sorry that my noble friend Lord Hunt was disappointed in the heavyweights and what they said, but he must understand that we are concerned with the environment in which we live and with the people who live and work there. They are at grave risk and that is the point which the noble Earl, Lord De La Warr, and the noble Earl, Lord Radnor, raised—rural unemployment. We are facing masses of it at present. We are in an appalling position as an industry and we have only just started to see it.
In this country we have a surplus 5 million tonnes of grain; on the Continent they have 18 million tonnes. These are ridiculous figures for surpluses. Above all, we have a budget in the EC which is running out of cash. Therefore, without any doubt, agriculture is in a desperate position here and must be looked at.
It is true that the conservation measures are excellent, but they will not solve the agricultural problem. When it comes to giving advice, of course the 14,000 farmers whom the noble Earl, Lord Ferrers, mentioned who have 500 acres or more can pay for it. They are the people who normally pay quite happily for advice. But many of the people on whom we shall depend to keep an environment in the countryside are unable to pay for advice, or are unwilling to pay for it, but, to be slightly complicated, will need advice to enable them to pay for it.
Therefore, we start with a situation where farming is facing desperate times and now the Government say

673
they want more of our money in return for advice. In my view it is illogical, because the advice will be needed by us all. It will be needed by the people on the good land who will have to grow extra crops in order to maintain their farms and hedges. I could not have planted the daffodils along my roadside unless there was a bob or two in it. By scratching for every penny or making a loss there will be no daffodils planted at all. So far as I can see, this Bill does very little to help.
Turning to Clause 13 and matters of conservation, I am extremely worried. Indeed, the noble Lord, Lord Melchett, is worried about this clause concerning the Treasury. The Treasury always behaves like this. It should give a block grant and say, "That is all you will get", but it keeps hold of every little thing; it always wants to check on what is going on and interfere in matters which are not really its business. It is still at it, and of course this will not be a little thing. If we are going to do well and maintain agriculture reasonably well, then the good land has to be well farmed, with the best technical advice, the best R and D and everything of that nature, and people of ability involved in it.
The small farmers, the farmers in the hills and the uplands, are going to have to be supported. That money has to come from somewhere. The only place that it can come from is from a saving on the EC budget by the people on the good land producing grain, for example, at less money by more competent means. The money we save in export subsidies can then be put in sufficient quantities into the countryside to save it.
I am glad that this Bill is introduced in this House by the noble Lord, Lord Belstead. He listens, and in addition to listening he is not afraid to say that he will do something about it. I am sure that, with the array of advice he has from his own Back-Benchers, he will be listening extremely hard and thinking hard how he can introduce some sense into the Bill.
The most important clause is Clause 12, where it says that one of the considerations is "the economic and social interests of rural areas". That is what we are about at the present time. We have to preserve those interests. That means people. The greatest thing that we need to preserve in the countryside is the people who live there. It will only be done by a wide spread of interests.
I was in agreement with the noble Earl, Lord Ferrers, that we have to market well, and of course we have to pay for it. But that is not enough in the countryside. In the countryside we have to do a lot of other things. The noble Lord, Lord Stodart, was unkind enough to refer to my cheese that I was trying to flog in Paris. I had this cheese from Caithness. It was good cheese, but it was the wrong concept for the area.
I regret to tell your Lordships that though I did a right thing in the area—I went into the hotel business with a good chap and I made some money out of that—I lost the lot in cheese, which I should never have been producing in that area. I say that to show that planning is enormously important. One should be promoting the things in the countryside which are natural to that countryside. If the Government want to do something about the bad land which will have to come out of production and go into extensive grazing and/or trees, then they will have to produce a scheme
674
and a lot of money in order to give people an income where the trees are growing.
They want to promote the look of the countryside by building walls. I have built my stone walls around the outside of my farm (they were all built up in the good days), but the inside is still pretty rocky, and, if the noble Lord, Lord Belstead, would like me to build up walls to improve the look, then he will have to give me nearly a 100 per cent. grant to do it, because one cannot pay a part of it unless one is making some money.
This is being gone about in an extraordinary way. It is not that I am wishing to criticise the Government, because this is a totally non-party matter. Quotas are a nonsense, because every time you set a quota somebody loses money. A quota cannot save you money. You might as well get your cut in a straightforward way, because every time you have a quota some other hydra raises its head: you cut that off and then it pops out somewhere else because it is artificial. The noble Lord knows perfectly well where the value of a quota comes from, because the value is there and it is there probably because the man who has produced a lot of milk has a higher quota.
The Government would do well to listen to the advice coming from behind them. Their PR has not been very good either. Whoever heard of a phrase better calculated to raise resentment than "the tenant's fraction"? It makes you think of the widow's mite. If the PR is not right it means that the thinking is not right. I know plenty of tenants in some of the traditional areas who do not deserve a penny for their quotas because the landlord has put up the buildings, the land is traditionally let but he has kept them up. I know plenty of places too where the landlord has done absolutely nothing. The tenant has put up the buildings, he has bought the cows, and brought the land up, and everything else. We have the vehicle in an excellent set of valuators to simplify this Bill enormously, and I am certain that we must do it.
There are many heads to the Bill. The main thing about it is that it brings in the concept of the Ministry of Agriculture co-operating with other Ministries to keep up the countryside as a viable area. That is the main thing, but it will take a lot more money and thought. The Bill has the makings of something that could be used if the Government have the will to do it and can get the cash, and can organise the EC, but it is only a start and there is a rocky road ahead.
8.46 p.m.
Lord Gallacher: My Lords, I shall confine myself mostly to Clauses 4 to 8 of the Bill. Fortuitously they are the clauses about which I know a little, and they are also the clauses which, despite 20 speeches, have been least discussed. The first question I should like to ask is whether the Home Grown Cereals Authority and the Meat and Livestock Commission, described in the Bill as "non-departmental public bodies" are really in the best statutory form for the tasks they are called upon to undertake in this Bill, and which they will certainly have to discharge in the future?
On occasions like this, when we are partially amending the rules for bodies like this, we should ask ourselves whether, if they were to become, for example, marketing boards or, better still, statututory

675
producer co-operatives—which is the guise in which the Milk Marketing Board now describes itself; quite properly since they have introduced the principle of one member, one vote—a change of legal format would not enable these bodies to discharge their obligations more effectively, and perhaps at the same time please Brussels by reason of the fact that they had lost this peculiar British character of non-departmental public bodies.
I am prompted to ask in this connection, in view of the reduction in the size of the membership of the Home Grown Cereals Authority proposed in the Bill, whether growers and users are satisfied with their present representation on the authority, and whether following the reduction they will still consider their representation adequate, and also whether the method of appointment of people to the authority is acceptable to both growers and users.
I should be interested to know from the Minister whether the Home Grown Cereals Authority is to be the body responsible for collecting the proposed co-responsibility levy of 3 per cent. included in this year's EC price settlement, which I understand is to run for a period of five years. Will this levy be collected by that authority? If so, will its collection costs be met by the EC? Also, is there any prospect, as is hoped, that the Home Grown Cereals Authority might share in the proceeds of the co-responsibility levy that I have just described?
The Meat and Livestock Commission caters for a diverse industry. So much so that reconciling interests in the meat industry presents the Meat and Livestock Commission with what is a nearly impossible task. For example, 24 organisations have to be consulted in respect of the appointment of seven out of the 10 present commissioners of the MLC.
That leads me to ask also whether a narrow range of functions for the MLC will not enable the Commission to work better? Conditions in the meat industry have changed remarkably since the Act of 1967. We were not then a member of the European Community, and I ask myself, and I ask the Minister, whether there is not a case for a review of the Meat and Livestock Commission's total operations to take account of the many changes in the industry since the commission was established. In this connection also I note an increase in the number of commissioners proposed for the MLC from 10 to 15, and I wonder whether this is designed to achieve more "flexibility", which is the word used in the Explanatory Memorandum about Clause 7.
Clause 7 also provides for consultation about levy schemes. Does this not already take place? I can remember when I used to earn my living that I was for ever consulted by the Meat and Livestock Commission about levy schemes, and I wonder what is meant by that under the present proposals. In particular, how will the Meat and Livestock Commission adjust,
"the proportion of levy from a particular sector of the meat and livestock industry for a particular purpose"
given the diversity and the controversy which sometimes surrounds the Commission's operations? That is a phrase which I think will need clarification.
Has any consideration been given to the sales of poultry? If so, which body is responsible for the
676
poultry industry, growing as it is by reason of the competition it is currently offering to red meat? I would ask whether there is now a good working relationship between the Meat and Livestock Commission and the Food from Britain organisation and whether there is any duplication of effort and resources between these two organisations?
When Food from Britain was established three years ago some of us were well aware that we would quickly reach a point of controversy. The noble Earl, Lord Ferrers, described that in some detail for us this afternoon. The organisation was created in rather a hurry. There was no problem about establishing it when the Minister of Agriculture kindly and generously agreed to pay the whole cost of operating the organisation. Now, however, that Ministry of Agriculture funding is being tapered (I think it is still generous) and the industry is expected to self-fund to an ever-increasing degree, the conflicts which were latent three years ago are now beginning to emerge. To some extent they represent vested interests because there are many bodies which, long before the Food for Britain organisation was thought of, undertook what they believed to be a useful task in promoting British food both here and abroad.
In this connection, can one ask whether the increase in the membership of Food from Britain from 15 to 21 is designed to give seats to organisations and bodies from whom Food for Britain expects to get funding? Under Clause 8 perhaps the Minister can tell us what conditions the Minister envisages on grants and loans to Food from Britain. One of the questions which has never been asked about the organisation is whether it sees itself mainly as a generic advertiser and quality mark promoter, or will Food from Britain get into the market place in its own right particularly in the European Community? If, as a former retailer, I can make a suggestion to Food from Britain it would be that it should explore the possibility of collaboration between food manufacturers and major retailers in establishing a permanent Food from Britain presence through a chain of shops in the Community's major cities, including the secondment of top people from food manufacturers and food retailers in order to establish such a chain. That secondment might be acceptable to those organisations and to Food from Britain in lieu of a cash contribution, because it seems to me that if we are to make any impression with Food from Britain in these markets we need a permanent presence of the kind that I have described. A permanent presence might also help us to overcome the problem—which is no problem in Britain but which is a problem to promoting food abroad—of the growth of own brands which are meaningful to British consumers but which must surely have little significance for Continental consumers.
If Food from Britain goes through a bad patch or, regrettably, has to be wound up, what about work concerning the Agricultural and Horticultural Co-operative Movement? When Food from Britain was established, that body was taken under the wing of Food from Britain and we were given assurances at the time that in no sense would its work be diminished. I think it is fair to say that that has been so during the past three years. Nevertheless, grants for agricultural and horticultural co-operation have been reduced

677
from 2nd May this year, although the reduction coincided with an assurance that the reduced grants will be paid for at least a period of five years. It is important that the development of agricultural and horticultural co-operation in Britain should continue and should not be allowed to die with the adversity which Food from Britain is currently experiencing.
Turning briefly to the environment, may I thank the Minister for the reference he made to my noble friend Lady Nicol regarding her work in seeking approvals for capital grant applications. I have noted the designation of a short list of 14 environmentally sensitive areas with the actual choice to be made in consultation with the Department of the Environment. This enables me to put yet another question to the Minister; namely, the role of the body known as the Whitehall Green Policy Unit whose existence was described in The Times on May Day this year. To whom will that body report? It seems to be an effort by Whitehall, and indeed by Government, to take seriously the propaganda which now exists in favour of the environment and to do something constructive and cohesive about it. I think its existence must be taken note of and taken account of not only in this Bill but in future developments concerning the environmentally sensitive areas.
Clause 13 implements EC Regulation 797/85 and the Minister of Agriculture deserves credit for achieving this regulation. What about current proposals by the Community, however, for socio-structures in agriculture? Your Lordships' Select Committee on Community Affairs is about to address itself to this question. It seems to me to raise even bigger issues than environmentally sensitive areas, although inevitably consideration of socio-structures in agriculture will touch upon this question.
One cannot help but repeat to the noble Lord the Minister that the fundamental question in all this is the future of land use in Britain including those areas where alternative land use is available and could take place without detriment to the environment but with considerable financial advantage to the country as a whole. As I see it, Clauses 1 and 11 and Schedule 1 are the areas of controversy in the Bill and this was fully evidenced in the speeches that we have heard this afternoon and tonight. For that reason, and for others, we shall follow the Committee stage of the Bill with interest and we hope to put down a few amendments ourselves in the expectation that, as always, the noble Lord the Minister will give them every possible consideration.
8.57 p.m.
Lord Belstead: My Lords, when the noble Lord, Lord John-Mackie, spoke at the beginning of the debate this afternoon he said that the gap between the Committee stage in another place and the time when the Bill had come now to your Lordships' House had made many people almost forget that the Bill existed. But the number of your Lordships who have taken part in this afternoon's very interesting debate and the quality of the speeches show that your Lordships have remembered well enough the main features of this comparatively short but important Bill. They are features to which undoubtedly we shall be returning when we come to Committee stage.
678
I should like simply to say at the beginning of my reply that I am grateful for all the speeches that have been made by your Lordships on this Second Reading, even though the noble Lord, Lord Mackie of Benshie, almost in an aside, said that he felt there was a rocky road ahead. I do not think the noble Lord was referring to the Committee stage, but more to the general agricultural scene. I hope that the Committee stage will not be rocky, although I am sure from the speeches that have been made that it will be very thorough.
I ask your Lordships at the beginning of my reply to forgive me if I do not deal with everything that has been raised. The speech that we have just heard from the noble Lord, Lord Gallacher—who speaks from considerable experience of the meat industry—is a good example of the important but detailed points which can and should be raised on this Bill, but which I think if I attempted to reply to all of them would keep us here well into the night. I shall do my best, but your Lordships will perhaps acquit me of discourtesy if I am unable to deal with them all.
The first question, essentially, which was put to me was: why charge for advice? It was, in essence, the noble Lord, Lord John-Mackie, who asked that. In this context I was grateful that my noble friend Lord Ferrers recorded his belief that the agricultural industry is facing a period of radical change. This afternoon my noble friend (I have heard him speaking previously on the same subject) expressed his deep concern about the way some of those changes are leading us. However, this must lead us inevitably to the conclusion that in order to meet a new and challenging situation we have to ensure that we have the best advisory services that we can provide. This means that they must be tailored to the requirements of the industry, that they provide what farmers want, and that they can be adapted to meet changing needs; and charging will ensure that ADAS provides farmers with what they want, and value.
The noble Lord, Lord Walston, my noble friend Lord Stodart of Leaston and my noble friend Lady Elliot, to mention only three of your Lordships, all said, as I understood them, that in principle they had no objection to charging for advisory services—a practice which has existed in many of our competitor states in the European Community for several years. However, so that I do not misrepresent my noble friends and the noble Lords opposite who said that, I realise that all three noble Lords and others made it very clear that they will look critically at the way in which charges are introduced.
Many of your Lordships referred to the fact that Clause 1 is not making the advice given under that clause mandatory, but permissive. I was very grateful to my noble friend Lady Elliot for saying that she thought that Clause 1 was an excellent clause. In that context I would say that the clause covers a wider range of ADAS services than those which we have to provide at the moment under existing legislation. Clause 1 is intended to provide ADAS with greater flexibility and the ability to respond to what the industry wants. I would only add that if ADAS were required by statute to provide advice on every single issue falling within the scope of Clause 1, all at the same time, this could seriously hinder the speed and

679
the flexibility of the advisory service response to market forces.
I recognise that concern was expressed during the debate by the noble Lords, Lord Hunt and Lord Walston, that the move to a permissive power could be interpreted—I am not quite sure that the noble Lords put it in this way, but I think that this is what they meant—as being a reduction in the Government's commitment under the 1981 Wildlife and Countryside Act to provide advice on conservation and related matters. If those noble Lords and others of your Lordships think that, I beg you to consider that that concern does not take into account the statutory duties which will now be laid on Ministers by Clause 12, if your Lordships' House agrees to that clause. I repeat what I said to your Lordships at the beginning of this debate; that is, the undertaking given in another place that we have no plans to charge for the kind of advice now given to farmers on conservation, rural diversification or animal welfare matters.
Your Lordships asked me some detailed questions about this first clause of the Bill. The noble Lord, Lord John-Mackie, said that, bearing in mind the cost of collecting ADAS charges, the money could be raised by a system of levies. The noble Lord was indeed critical of choosing this moment to introduce charging for the advisory services. I shall not go over that second point again. We genuinely believe that by charging for services farmers will show what they need and value. We also believe that the market place, not levies, can provide the right signals from the farming community. With regard to the cost of collecting charges—which the noble Lord mentioned—I would emphasise that we are aiming to keep the costs of collection to the minimum and to avoid as far as possible extra administrative work falling on ADAS officers, whom we all want to be in the field doing the work for which they are trained.
My noble friend Lord Stanley of Alderley was worried that the state veterinary service might squeeze out commercial veterinary practices. I would say to my noble friend that we believe there is no question of that happening. The services which ADAS intends to introduce will complement rather than compete with private veterinary practices. This is a matter upon which we intend to keep a very close eye indeed.
My noble friend Lord Stodart of Leaston asked me a direct question. The essence of that question was: why have the reductions in the advisory services in Scotland been greater than the reductions south of the Border? The 1984 public expenditure White Paper forecast the expenditure reductions for the next financial year, 1987–88. For ADAS, they amount to £16½ million so far as England and Wales are concerned and £3½ million for Scotland, which amount to the same proportion of expenditure on advice and promotion of £40 million for England and Wales and £8.3 million for Scotland. The proportionate reductions are the same both sides of the Border.
Baroness White: My Lords, perhaps I might interrupt the Minister for one moment before he leaves this matter. Could he deal with the point raised by a number of Lords about free advice upon questions of environment and charges in respect of
680
other questions, and how one distinguishes between the two?
Lord Belstead: My Lords, there is a difficulty, I feel, here. I hope that we can go into this in more detail in Committee. As I understood speeches being made—not least from the noble Baroness and the noble Lord, Lord Hunt—both were saying that if one had the situation which is in the Bill, where there is no statutory provision for free environmental advice, this is not desirable because one would not give integrated advice. My understanding of the situation is the exact opposite. A statutory right to free advice, I suggest, could make it impossible to provide integrated advice without the risk of a sterile argument on almost every occasion as to whether or not the advice which was being given to the individual farmer should be free by statute. Advice on conservation would have to be split off into a completely separate category, and this, we feel, would not benefit the farmer or the environment. I think this is something we need to come back to, but I am simply saying that if you start putting in statute the fact that consultation should be free, you have to decide in statute where the dividing line is to be drawn. That could lead us into difficulties, but this is something we must come back to at Committee stage.
Turning now to milk quotas, the noble Lord, Lord John-Mackie, was critical of the fact that the Bill had been held up while this matter was being considered. I would just say that the complicated schedule which has been brought forward this evening during our Second Reading debate from the other place is of course the result of a long period of discussion with representatives of landlords and tenants. That did not lead to agreement, and in the end the Government felt they had to bring forward proposals; otherwise tenants would get no compensation at all.
I should just like to say that our minds are by no means closed in relation to the details of the calculations contained in that long schedule. I should like to think that is shown by the decision, to which I referred at the beginning of my remarks, to table amendments which we hope will meet many of the concerns which have been expressed, particularly about marginal land farmers, and will allow the arbitration increased flexibility to take individual circumstances into account.
Your Lordships asked several detailed questions. My noble friend Lord Stodart wished it to be possible for the tenant to get more than about 66 per cent. of the quota, which he felt would be the ceiling. Perhaps I may just underline the fact that no minimum or maximum percentages are laid down in the Bill. Individual circumstances have to be taken into account under the schedule, and the more so because of the amendments which I announced that we would bring forward at the next stage of the Bill, when we can return to this particular subject. My noble friend Lord Stanley put a very similar point, and again I say to him that our minds are by no means closed on the details of these calculations.
The noble Lord, Lord Middleton, raised a rather different point. With his great experience in these matters my noble friend said he felt that the Agricultural Holdings Act was adequate for dealing with milk quotas. I hesitate to cross swords with my noble friend,

681
but your Lordships will remember that that is legislation which deals with physical improvements to the land and not with anything like milk quotas. To have amended the holdings Act for this purpose would have meant we would have tried to apply the Act to a situation for which it was never intended and with which we think it would really not be adequate to deal. But, once again, we can return to this (and I have no doubt we will) when we reach the next state of the Bill.
Finally, I come to all the matters concerning conservation which your Lordships have raised. I should like to thank the noble Lords, Lord Moran and Lord Hunt, who were particularly generous—many other of your Lordships were also generous—in the welcome they gave to Clause 12. Several of your Lordships asked: what difference is Clause 12 going to make? The noble Lord, Lord Hunt, moved on to that point quite swiftly, as did my noble friend Lord Radnor, and I understand why. I would say that I believe Clause 12 will ensure that whenever policy is being formulated or advice given by the agricultural departments, full account will be taken of the diverse interests in the countryside and a proper balance will have to be struck between them.
The noble Lord quoted a statement made by my right honourable friend the Minister of State in another place that this clause is a recognition of what is already being done. I share and support that view of my right honourable friend, but that does not mean that the Ministry of Agriculture will not continue to develop and improve policies concerning both agriculture and the environment. We are going to have to do so.
My noble friend Lord Radnor asked: is this clause going to be a bit of bureaucracy which will overlay other things which are being done already? Clause 12 imposes—perhaps it is right for me to say formalises—the duty to balance the interests of conservation and enjoyment of the countryside with those of promoting agriculture and economic and rural interests in rural areas. In a sense that is a cap, in that it is an overall duty. Of course, we do not think it will necessarily be the last measure concerning both agriculture and the environment. We also hope very much that it will not lead to increased bureaucratic controls in the countryside, except where these are necessary for the protection of the countryside.
Then your Lordships asked questions about grant. The noble Lords, Lord Walston and Lord Melchett, among others, asked the straight question as to whether there would be capital grants in environmentally sensitive areas. In the vast majority of cases I am sure that we shall continue to grant aid farm capital investments in ESAs, since grant aided capital improvements can, we hope, have a good effect on an individual holding and not an adverse environmental impact. But, of course, there will be cases in which it may appear that a grant aided capital investment could be environmentally damaging or run counter to the objectives of ESA designation. In these cases we shall want to look more carefully at grant applications to ensure that what we pay out of one pocket is not being undermined by what we pay out of the other.
The noble Lord, Lord Moran, said to the Government: bring back prior notification. I think the
682
noble Lord will be pleased to hear that, in fact, we already have taken powers, at the time of the agricultural improvements scheme, which was the new type of grant brought in last autumn, to enable us to reduce or withhold grants on investments which have destroyed or damaged the natural beauty and amenity of the countryside to an extent which cannot be justified by any resulting agricultural benefit, and, if necessary, we shall be able to use that power in environmentally sensitive areas—
Lord Walston: My Lords, may I interrupt the noble Lord for a moment just to clarify this rather important point? Am I right in thinking, particularly from his last sentence, that in designated areas grant will still be available as it has been in the past, but will be withheld if, in the opinion of the ministry, it is detrimental to the environment?
Lord Belstead: My Lords, it will indeed. I am saying that it is our intention that grants will be available, and I am saying that in the circumstances which I have endeavoured to outline there will be powers to withhold grant.
However, some of your Lordships then went a step further. The noble Baroness, Lady White, and the noble Lord, Lord Hunt, talked specifically about landscape conservation orders, and my noble friend Lord Craigton, in a very interesting speech, raised the need for some mechanism to guard against the farmer who deliberately farms in opposition to the concept of an environmentally sensitive area, even though he is living in one.
It is true that the Government agreed to consider the possibility of legislation on landscape conservation orders. It is a difficult question. I recognise that some areas, both within and outside existing designated areas, deserve protection. But this can, I suggest, be provided by other means, such as management agreements under Section 39, and the Government are still considering the possibility of action on landscape conservation orders. But I do not think it would be right to consider inserting any provision in this Bill at this stage in a hurry. I am therefore inviting your Lordships to come back in a rather more leisurely way and to discuss this again at the next stage of the Bill.
Then my noble friend Lord Stanley made a statement which several of your Lordships picked up, not least my noble friend Lord Peel. My noble friend warned—I think understandably—as a farmer about the dangers of the perception of the general public that farmers would be paid for doing nothing. I think that is the way in which my noble friend Lord Stanley put it. My noble friend Lord Stanley is well aware, as are all your Lordships, that we are talking in designated areas—and that will include environmentally sensitive areas—about positive management; doing things which will positively contribute to the way in which an area is supposed to be run. I think I shall just leave that point there.
If your Lordships will forgive me at this hour, I am not going to say anything about forestry because I know that we are going to return to it. I also know from the way your Lordships have made your speeches that you understand very well the difficulty which the

683
Government are in, so far as legislation is concerned, in that forestry falls outside the Treaty of Rome as regards the definition of "agriculture".
But I want just to say a word on what I think was an important point raised by the noble Lord, Lord Walston, about consultation, as I think the noble Lord put it, with the Nature Conservancy Council and the Countryside Commission, and indeed other organisations as well. The clause on environmentally sensitive areas places a statutory duty to seek the advice of the Countryside Commission and the Nature Conservancy Council on Ministers, including, of course, my right honourable friend the Secretary of State for the Environment, as well as my right honourable friend the Minister of Agriculture when we are dealing with the selection of areas for designation.
They—that is to say, the Nature Conservancy Council and the Countryside Commission—in their turn will have consulted widely and have filtered further valuable advice through their own organisations for the Government to hear in order to decide on our designations. However, in addition to that, there is the question about the setting up of the arrangements for environmentally sensitive areas, which I think was in the mind of the noble Lord and of the noble Lord, Lord Melchett—what we call management prescriptions. It is true that no bodies have been singled out in the clause for statutory consultation on management prescriptions, and there is a simple reason for this. The Countryside Commission and the Nature Conservancy Council are, quite clearly, those with the expertise on which areas are important from an environmental point of view. But when it comes to the management prescriptions, although the Nature Conservancy Council and the Countryside Commission have an important input and indeed have already provided us with detailed advice which we are considering carefully, there are others who have an interest or expertise on which we should like also to draw directly. I am referring here to local authorities, English Heritage, the farmers themselves, voluntary conservation bodies and so on. It is for that reason that we have not designated particular bodies so far as consultation on the management prescriptions, which I know is a very live issue, is concerned.
If I may, I would just draw to a close by trying to answer two or three quick questions of the noble Lord, Lord Gallacher, and then one about Food from Britain. The noble Lord asked me about the collection of the coresponsibility levy by the Home-Grown Cereals Authority, a matter on which the details have not yet been settled. The noble Lord also asked me
684
whether the status of the Home-Grown Cereals Authority, and indeed the Meat and Livestock Commission, was approved of by the European Commission. That, in essence, is what the noble Lord said.
There is no reason to believe that we are going to have to change these bodies to please anybody at all. I think that they are firmly entrenched and, so far as the representation on both of them is concerned, I know of no complaints. But, of course, there are the changes in the Bill to which the noble Lord drew attention and which we shall be able to discuss when we come to those clauses.
Perhaps finally I may refer to what is possibly the most important thing of all, and it is in the Bill; that is, the importance of the funding of Food from Britain, to which my noble friends Lord Ferrers and Lady Elliot characteristically drew attention. On this may I just say that I was most grateful to my noble friend Lord Ferrers for giving some very arresting figures about the splendid increases in food and drink exports in areas which have been promoted by Food from Britain.
The Government believe that we must play our part in funding Food from Britain in the future, and the moment has now come, if I may echo my noble friend, when the industry must make up its mind as to whether it wants a national marketing organisation and will make a firm commitment of the funds that are needed. The food industry and the meat sector have already pledged some money for Food from Britain, but the total is well short of what is needed. The noble Lord, Lord Gallacher, asked me whether the size of the council for Food from Britain is being expanded in order to recognise the increased interest, as we hope there will be, in Food from Britain from the industry; the answer is, yes.
I should like to say thank you again to your Lordships for taking part in this debate. It is a short but an important Bill. I hope that I have covered most of the points which have been raised, but we shall be returning to many of them in Committee. To assist the House in preparation for the next stage I shall, if it is acceptable to your Lordships, make available in the Printed Paper Office explanatory notes on the clauses of the Bill and a textual memorandum containing for ease of reference the legislation which is referred to in the Bill as affected by its provisions. I hope that these will be of use. In the meantime, the Government will consider very carefully everything that has been said in this debate. Once more, I beg to move that the Bill be now read a second time.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Gliding: Control of Airspace
9.24 p.m.
The Earl of Kinnoull The Earl of Kinnoull rose to ask Her Majesty's Government whether they will make a Statement on the control of airspace for gliding, in particular the Upper Heyford area.
The noble Earl said: My Lords, following that powerful and fascinating debate on agriculture, I should like to ask the House to turn its attention now to the subject of airspace at Upper Heyford airfield. It is a subject that has won recent publicity for reasons different from those I shall discuss tonight. In raising the subject perhaps I may briefly describe the background to my Question and then the purpose of seeking an illuminating Statement from my noble friend on behalf of the Government.
As your Lordships' House will know, gliding is a popular, adventurous and skilful sport in this country, where there are more than 10,000 civilian glider pilots and 5,000 military pilots. I understand that there are among them 10 stalwart Members of your Lordships' House and, I suspect, Black Rod in his former days. My personal claim to gliding is very limited; one launch that, after daring to open my eyes, I found exhilarating and enjoyable.
It is a sport in which, despite the physical land limitations of our small islands, our busy air space, and our notorious weather, Britain has excelled over many years. Britain won the world championship in 1976, 1978 and 1980, and indeed the French championship in 1977. The sport is administered, with the blessing of the Civil Aviation Authority, by the British Gliding Association. Its duties include not only the training and licensing of pilots, but also the certification of the airworthiness of craft.
I may add that the record of safety for gliding in Britain is second to none, compared particularly with other countries. The credit for that is due not only to the standard insisted upon by the British Gliding Association in the training of pilots but also to the high degree of professional proficiency of the National Air Traffic Service. As the House will know, that body is jointly operated by the civil and military authorities. Indeed, we owe a great deal to that body, even if its handling of the Upper Heyford issued was not, in my opinion, exemplary.
I may add that despite the smallness of our islands and our busy air routes, Britain still maintains a commendable theme of freedom of the skies that is largely made possible by voluntary controls, self discipline, and self preservation by the smaller aircraft. It relies remarkably little on the inflexible legislative procedures of the air navigation orders—indeed, less so than other countries.
There are of course air traffic zones tightly controlled around our civil airports and the major military air bases. However, there are other zones around airfields that are less restrictive, including the radar advisory zone operated on a voluntary basis. Up until 10th April this year, it was that category which Upper Heyford airfield used.
Upper Heyford airfield lies in Oxfordshire and is geographically at about the centre of England. In
686
consequence of that, it obviously attracts a very busy air space of light civil aircraft including gliders, hang gliders, microlights and balloonists. For 13 years, its airfield has been the home of the 20th Tactical Wing of the 3rd US Air Force. For 13 years, the F-111 has been based there, operating within the environment of those light aircraft.
I understand that about one year ago, the United States Air Force came to the view that the present system of air space control—or lack of it, in their opinion and judgment—had become an unacceptable risk, leading to the possibility of an air collision between an F-111 and a small light aircraft within the airfield zone—particularly since such light aircraft often arrive without notice, with no radio contact, and even not showing up on any radar screen.
Tonight, I do not blame the United States Air Force for their caution for safety, particularly as the F-111 aircraft is known for its very poor vision for pilots. However, I submit that their caution has led to an over-reaction, when one sees that in the past 13 years, of eight reported near misses involving gliders within the zone of the airfield, none was in Category A, deemed to be actual risk of collision.
Although I have no criticism of the United States Air Force, I do have criticism to make of the National Air Traffic Service, for what I believe has been a mishandling of the whole situation. Following the view of the United States Air Force being expresssed to the military authorities in Britain, a study was set up by the National Air Traffic Service which apparently identified a significant flight safety risk of collision, especially for gliders, around this airfield. But, despite this important study affecting the users, no figures or evidence have ever been produced. I hope that my noble friend will tonight give us an assurance that these figures will be published. I should say that there were three studies and I refer to the first study in particular, which is the critical one. I hope that my noble friend will tonight give us that assurance because it is very material to the objectives of certain of the users.
Two meetings for users of the airspace were held last October and November under the authority of the National Air Traffic Service. The outcome, in the view of the British Gliding Association, was that a decision was imposed. The option chosen by NATS was the establishment of a 208-mile radio area, or zone, twice as big as a similar zone for Brize Norton airfield, which is a major Royal Air Force establishment, and four times as big as that at most of the other Royal Air Force airfields. Under Rule 36A of the Air Traffic Control Regulations the conditions were laid down that this would be for a twelve-month trial period and that all gliders, other than three local gliding clubs, would have to fit radios to suit Band 129 in order to be able to contact air traffic control at the airfield. The three lucky local gliding clubs who would not have to do this would simply have to call up the air traffic control, as would the hang gliders, the balloonists and the microlights. As I said, this statutory duty commenced on 10th April this year. It is operative on weekdays but excludes weekends and public Bank holidays.
The criticism of the British Gliding Association of the decision by NATS was on three issues. First, and

687
one must remember that it is a responsible body—there was a lack of proper information available at the time of the October and November discussions. It was an emotive subject and the particular lack of information related to the near-misses. This is very important information which is critical to the issue. Two schedules were produced by NATS, neither of which apparently tallied with the other. Perhaps my noble friend can explain that in his reply.
The second criticism was the lack of proper consultation about what the trial period would prove. This mishmash of exemptions by the users, with some having to be fitted with radios and others simply ringing the air traffic control, was, in the view of the British Gliding Association, likely to prove a valueless operation. The third criticism was that NATS produced a major overreaction in the size of the radio zone being imposed around Upper Heyford.
The consequence of this decision is that not only will 90 per cent. of gliders outside the three local clubs be excluded from this zone until they have the new radios fitted—I am told it can take up to three months or even longer to have this done—but also Band 129, which has been chosen and allocated, is already under severe strain at the airfield. To my mind, perhaps the most serious consequence is the inevitable increase in the traffic diverted from the airfield zone to a fairly narrow four-mile gap between the airfield zone at Upper Heyford and Brize Norton. This passage passes over Kidlington airfield, which is a particularly active trainer pilot airfield and an area in which a lot of inexperienced pilots are flying, and then over Weston on the Green, which of course is the parachute centre. I am told that already there is far greater traffic congestion in this narrow bottleneck area than in Upper Heyford. I hope that my noble friend can give an assurance that the Government will monitor this situation and that this narrow passage will be widened if necessary.
Beside asking my noble friend what useful experience is likely to come out of the trial period, I should also like to ask him what will happen at the end of the trial period. Are there to be further consultations among users and is information gathered during the trial period to be made available to them? Is a reduction in the size of the Upper Heyford zone also a possible option?
For those not involved in air recreational sport it may seem that the Upper Heyford issue is a storm in a teacup. However, I submit that there are two issues of substance beyond the argument of air safety. The first is that Rule 36A regarding mandatory radio calls has been brought in and this gives us a glimpse of the massive powers that lie within the Air Navigation Order 1983, with its 98 sections and 13 schedules. There is no appeal procedure and no parliamentary consent is required in this large piece of secondary legislation. The Member for North Tayside in another place recently stated very effectively that the lack of parliamentary control in such large orders should be reconsidered. I hope that my noble friend will consider this when he comes to reply.
Secondly, the handling by NATS of the current Upper Heyford issue is frankly disturbing and
688
distressing. For instance, it is disturbing to find that a brief prepared by this body summarising the case in what, from such an authority, one assumes is an unbiased way, is angrily challenged both on detail and content by the British Gliding Association, which is itself a responsible national body and approved as such.
One asks why NATS has put itself into this position. I must remind the House that it is not the first time that the British Gliding Association has had to defend its territory as regards the freedom of the skies. It happened in Scotland, where it involved Leuchars airfield. In that case, again owing largely to the active parliamentary efforts of the Member for North Tayside, the Minister came down in favour of the British Gliding Association. I hope that at the conclusion of this 12-month period in Upper Heyford a better solution will be found than at present lies in Rule 36A of the Air Navigation Order.
9.38 p.m.
Lord Graham of Edmonton: My Lords, when I came to look at the subject of the debate this evening I was struck by the fact that I speak from this particular place on defence and on sport, and I wondered what my colleagues were doing in giving me a brief either on defence or on sport. I think it is a brief on the defence of sport, because the noble Lord, Lord Trefgarne, appears in his ministerial role at some stage—not that the problem started from his visit, but certainly the solution to the problem that we are now considering flowed from his proper ministerial interest in the matter. I am delighted to see with us tonight the noble Earl, Lord Caithness, who introduces a third dimension, that of transport, because, of course, that is his specialism.
I have no great animus in this matter. I listened carefully to what was clearly not a wholly unbiased but a very fair speech (and that. perhaps, is the understatement of the year!) though it may be outshone by the defence that the Minister will make. But I have benefited enormously from listening to the speech; and I have also read some of the background and the newspaper comments. The noble Earl fairly pointed out the local reaction. There have been letters and articles, particularly in the local press but also nationally. I do not think that airspace control is an irritating subject. It may be petrifyingly real for those involved: not only the people in the aircraft, but others over a wide area. It is a proper subject to be aired.
The burden of what I wish to say is this. I have a sense of unease about a small body being pushed around and getting short shrift from "big brother", whoever it may be, whether the ministry, the United States Air Force or any other body.
However, the noble Earl opened my eyes to the stature and standing of the British Gliding Association. I assume that its 10,000 members include men and women, as that is the way in which that sport has developed. We are not talking about a sexist organisation but a body of sports people who need to be encouraged and who are prepared to spend a lot of their own money. To the best of my knowledge, they

689
do not call on the public purse. They are well organised and they take their job seriously. They have the blessing of the CAA, and they undertake licensing and training and set airworthiness standards. They are concerned to provide a framework for this peaceful sport, so that those who wish to follow it may do it properly and in safety.
This 208-mile zone, as the noble Earl said, is perhaps the first exclusive zone to be declared since the Falklands, and therefore it merits our consideration. I have heard what has been said so far. In effect, it is set by the American authority, because it is concerned about the possibility of accidents and damage. I am told that the track record at the American air base is considerably worse than the projected accident rate for glider collision. I have seen statistics to show the possibility of one accident in 830 years. Play is made in some of the documents that I have seen that there could be an accident next year and another the year after. By their nature, accidents can happen like that.
But I am also told that 13 F-111s have been lost from Upper Heyford in the past 13 years. I assume that the word "lost" means that they have been involved in accidents and damaged or destroyed, and not that they have disappeared off the face of the earth. It is a bit rich for an authority under whose management, or mismanagement, 13 aircraft have been lost in 13 years to try to keep out of the zone a simple, light pleasure activity that may cause one accident in 830 years. I have been struck, in what I have read and also in listening to what we have heard tonight, by some contradictions—
The Earl of Kinnoull: My Lords, the noble Lord is giving us a very interesting briefing. When he says that 13 aircraft were lost in the last 13 years, is he talking of the zone in which they were lost or their loss through misadventure?
Lord Graham of Edmonton: My Lords, they were not lost within the zone. I wish the House to appreciate the quality of the management and the skill of those who point to the need for keeping out glider pilots and glider organisations because of the manner in which they have managed their resources. No doubt the Minister is well aware of the background. I am told, however, that this is USAF Upper Heyford data. If it is disputed, I can only say that it is the advice that I have been given. It is fair to say that F.111s have been very much in the news of late and much interest is therefore taken in them. We have been advised through briefings from the MoD to MPs who are, in effect, the public, who include parliamentarians like ourselves, that the F.111, in its landing or take-off attitude, is widely known to have poor visibility through its canopy. The pilots have therefore to rely on their instruments and advice from air traffic control to detect and to avoid other airspace users. These are, I am told, the words of the MoD. I find this incredible. I put it to the Minister that if, as is suggested, pilots have to rely on instruments and air traffic control advice because they cannot see out of the F.111s this means that the aircraft could not be certified and would not be much use as a fighter. Perhaps the Minister can say tonight or can write to me later to say how, if this is so, the MoD was able to advise MPs.
690
I want the Minister not only to deal with that issue but also to examine some other conflicts that arise from the information that is available. The MoD says that there is a real risk of mid-air collision between military aircraft and unidentified gliders. The noble Earl the Minister has been asked by the noble Earl, Lord Kinnoull, to state what the record is. We do not doubt the Minister. We ask simply to see the colour of his money and to see the evidence upon which these statements are made. This is a sophisticated assembly. We understand that it would be nice, clean and tidy if there were fewer of these aircraft about. However, that is not good enough. For 13 years, without accident, they have been able to live side by side. So the Minister must say a little more about the matter.
We are also told in the documentation about a study that is going on. We want to know a little more about the study. We wish to know, too, what steps the Minister and the ministry have taken to try to get the United States Air Force to examine its practices. Surely the USAF would be concerned about accidents between two American planes as well as about accidents involving one of its aircraft and a British glider. We want to know what the ministry has done to raise the issue of flying in formation pairs. That is, I understand, the practice.
I believe that the noble Earl, Lord Kinnoull, said that 90 per cent. of those from outside the local clubs will be adversely affected; I do not say catastrophically affected, but they have to get the radio; they have to wait and pay money. I am of course concerned about the US Air Force and I deeply respect all that it is doing. However, my prime concern is the British sport and the sportsmen. I have had sight of a letter from the British Gliding Association to Mr. Michael Spicer, who I deeply respect from my knowledge of him in another place. I want the Minister and those advising him in this debate to give me some answers to this letter. Mr. Spicer was told:
"It is not correct to state … that, 'with the exception of the BGA the members of the Working Group acknowledged the flight safety hazard and recognised that action had to be taken' ".
That is a categorical statement that those bodies were all as one. The British Gliding Association states:
"With the exception of the AOPA all other civilian recreational bodies … the British Hang Gliding Association, the British Balloon and Airship Association and the British Microlight Aircraft Association … protested that it was not necessary".
The impression is given two or three times that somehow or other the British Gliding Association is out on a limb, that it is pursuing something which other people do not want. Yet the evidence I have here is that the association has not so much isolated itself, but has been isolated in a form of words and documentation. Therefore, I believe that the noble Earl, Lord Kinnoull, has certainly legitimately raised the sense of unease that this matter has been dealt with not quite fairly.
At the end of the day the Minister will ask: what are you asking me to do? I am asking the Minister to listen very carefully and sincerely, as he always does, to legitimate grievances. The issue would not be on the Order Paper tonight if people outside this House did not think that it needed an airing. They want redress; they want an opportunity to examine whether or not this is the best way of doing it. They also want the

691
opportunity to appeal against decisions. Decisions are taken which will or will not give exemptions, and they want to feel that they are part and parcel of a proper judicial process. I am not talking about courts of law; I am talking about trying to satisfy all interests.
I think that the American authorities have made very heavy weather of this and I believe that a too hasty decision has been taken by the noble Lord, Lord Trefgarne. For the best of motives the noble Lord has come to this conclusion and the arrangements appear to have been worked out. Incidentally, I was told that fewer than a third of those people who took the decisions on this particular method were civilian or representatives of sport organisations; two-thirds were what I would call service oriented and therefore capable of being malleable if someone said, "This is what we would like".
I know that the Minister will have come well briefed, but if he cannot answer some of my points, I shall understand. However, there are those outside the House who have asked us to raise legitimate questions, and I look forward to the answers.
9.49 p.m.
'The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, first, I am very grateful to my noble friend Lord Kinnoull for having raised the question of airspace control and gliding because it concerns aviation safety. As I am sure the House will agree, safety is something which deeply concerns us all and should always be foremost in our minds.
As my noble friend said, there can be no doubt that United Kingdom airspace is safe. Latest statistics show that the number of risk-bearing air misses to commercial flights has decreased, while the data for non-commercial aircraft does not show a significant change.
This is despite a significant increase in the amount of air traffic. But aviation is ever changing and what is satisfactory today may not be tomorrow, and it is incumbent upon those responsible for safety to be alert to the need for change and to make improvements where they are necessary.
The duty of ensuring that all aircraft can fly safely in Britain's crowded airspace rests with National Air Traffic Services, NATS, as my noble friend said, a joint Civil Aviation Authority and Ministry of Defence organisation. With relation to Upper Heyford, it is not an American authority that calls the shots, it is the CAA/MoD organisation, NATS. The effectiveness of this joint organisation is reflected in the good safety levels which I have already mentioned.
The Controller of NATS is appointed jointly by my right honourable friend the Secretary of State for Defence and the Chairman of the CAA, and with the consent of the Secretary of State for Transport. They must satisfy themselves that the NATS are discharging properly the responsibilities which Parliament has entrusted to them. But these responsibilities must not be usurped. As I am sure the House recognises, the expertise in this area rests with NATS, not with politicians and their officials.
692
In exercising their duty to secure the safe operation of aircraft, NATS must consider the interest of all airspace users, civil or military, professional or private, from the simplest hang-glider to a crowded jumbo jet carrying several hundred pasengers. This is achieved through the involvement of the National Air Traffic Management Advisory Committee, known as NATMAC. This committee, comprising 27 members, was formed to create a regular and formalised means of dialogue between the NATS and all the various airspace users. It consists of representatives from a very broad cross-section of the aviation community. Of course, the requirements of different airspace users often conflict and it is seldom, if ever, possible to achieve solutions which satisfy the widely disparate requirements of them all. However, great efforts are made to achieve equitable compromises which have majority support and which ensure the continued efficient use of the limited airspace available.
General regulations covering the conduct of flying within the United Kingdom airspace are published in the Air Navigation Order and Rules of the Air and Air Traffic Control Regulations 1985, and all aircraft, including gliders, are bound by these rules. However, the unique performance of the glider has been recognised and some relaxations have been made in favour of the gliding community. For example, in airways—corridors of airspace along which the majority of passenger carrying airliners fly—all flying is totally controlled, but, nevertheless, gliders are free to cross an airway provided that they remain in visual flight and clear of cloud. Moreover, in some airways, sharing arrangements exist which allow gliders access for soaring when airline traffic is low. These arrangements work very well in Airway Amber 1 North of Manchester, and in Airway Blue 22 in Scotland. In the latter case, an operational concession was given to gliders operating from the important Portmoak gliding site, such that at weekends when soaring conditions are favourable airways traffic is re-routed via an alternative airway, specially created for the purpose. I hope that the noble Lord, Lord Graham of Edmonton, will realise the lengths we have gone to try to incorporate the gliders into a crowded airspace.
Outside areas of regulated airspace—that is, in free airspace—there are no constraints or restrictions on gliders other than that they must comply with the general rules and regulations I have mentioned. The rules which apply in visual conditions are designed to ensure efficient and effective separation between aircraft whose flight paths are in conflict, and can be summarised as "See and Avoid". More stringent rules apply in instrument flight conditions; such as in poor visibility or while flying in cloud.
Lord Graham of Edmonton: My Lords, the size of this zone is almost comparable to that which surrounds Heathrow. If the Minister is concerned with safety, would he also acknowledge that as one excludes gliders from the area then immediately outside the area there is built up a volume of traffic which is greater than is proper? So as one takes away the possible danger inside, one is helping to create further problems on the perimeter.
The Earl of Caithness: My Lords, the noble Lord is hasty tonight. Perhaps he wants me to finish in a hurry, but I was coming to his point in a minute.
I now turn to the problem of Upper Heyford specifically, as mentioned by the noble Lord. Lord Graham of Edmonton. The airspace around this major military airfield has been heavily congested since the 1960s. Due to possible flight safety hazards caused by the heavy congestion in this area, two major airspace reviews were carried out in 1974 and 1977, and these sought to improve flight safety in this busy airspace. These reviews resulted in an expansion of the already established Upper Heyford Radar Advisory Service Zone to 520 square miles. Within this zone it was mandatory for all military aircraft to obtain an air traffic service from Upper Heyford air traffic control. But for civil aircraft this requirement was only voluntary. Consequently, and I regret to say for their own reasons, many did not avail themselves of the safety service available. Thus the identity and intentions of a large number of aircraft flying within the zone were unknown to the ATC.
We must all appreciate the hazards this can cause. Official statistics show that since 1982 there have now been seven airmiss reports in the area covered by the radar surveillance zone. The increasing number of these unknown aircraft in the area led to renewed concern regarding the flight safety of all those who fly in this airspace, and another airspace review was carried out by NATS and the United States Air Force. This concluded that, despite previous measures taken to improve the situation, the large number of unknown aircraft operating in the vicinity of Upper Heyford still represented a grave flight safety risk. The review's recommended solution, which could have prevented aircraft from entering the area, was considered too restrictive. Therefore, NATS formed a working group, comprised of representatives of all interested airspace users, to review all flight operations in the vicinity of Upper Heyford and to suggest improvements. Airspace review reports are produced for the experts concerned and are used in the consultative process. The review was presented to all members of the working group. The working group agreed that it was necessary to improve flight safety in the Upper Heyford area, and because any solution required the support and participation of all airspace users, the solution should be legally enforceable.
That takes me to the point that my noble friend Lord Kinnoull raised, about there possibly being no general agreement within the working group, and this is tangential to the point made by the noble Lord, Lord Graham of Edmonton, that the BTA were being pushed around. There are 15 members within the working group. As I understand it, with the exception of the BTA the members of the working group acknowledged the flight safety hazard and recognised that action had to be taken. The British Hang Gliding Association and the British Microlight Aircraft Association were also in agreement with the proposed procedures, provided that these included agreed means of permitting access by their members' aircraft. Subsequently, the British Aircraft Users' Association, the British Microlight Aircraft Association, the British Hang Gliding Association, the Aircraft Owners and Pilots Association, the British Balloon and Airship
694
Club, the Air Transport Operators Association and the large independent airlines, have all written to the Government or NATS in support of this trial. Therefore, I find it difficult to agree with the noble Lord, Lord Graham of Edmonton, that one particular member of the group is being pushed around.
Lord Graham of Edmonton: My Lords, of course I accept completely what the Minister has said. However, I shall send to him the correspondence that I have seen where a number of the bodies which the Minister has said have written in support are party to contrary views to that, having expressed it in some other way. I appreciate that the Minister is in receipt of information that he has been given; I am in receipt of information that I have been given.
The Earl of Caithness: My Lords, I look forward to receiving the information of the noble Lord. I shall do my best to satisfy him on these points, and I think it probably is the right way to proceed if he agrees with that.
After considerable discussion the working group agreed that the problem could be largely alleviated by establishing a "known" airspace environment around Upper Heyford. All aircraft intending to fly in the area would be required to make a radio call to Upper Heyford ATC. The working group decided—and it was not imposed, as my noble friend indicated; they decided and agreed it voluntarily—that this airspace would be designated as the Upper Heyford mandatory radio area, known as UHMRA. The size of the UHMRA is 260 square miles. May I remind the House that this is half the area of the radar advisory service zone which has now been disestablished. The comments of the noble Lord that we might reduce the area have therefore already been taken care of, but I shall look at his point again. The UHMRA exists only during the notified hours, during weekdays, and therefore all aircraft are able to fly freely in the area during weekends, British and American public holidays.
Providing an aircraft complies with the published regulations pertaining to the UHMRA, entry into the area is guaranteed. Additionally, there are special arrangements for non-radio aircraft based within the area, and special provisions have been made for microlight aircraft, hang gliders and balloons. These arrangements have been achieved after wide-ranging consultations between NATS and all interested parties represented on the National Air Traffic Management Advisory Committee. It is the responsibility of the pilot to ensure that his aircraft is properly equipped with radio equipment. However, as an exceptional measure to assist glider pilots, NATS has arranged an exemption for glider pilots to operate on the ATC frequency without holding a radio licence.
To test the efficiency of the proposed solutions a year-long trial of the new procedures started last month—as my noble friend said—to coincide with the usual seasonal increase in leisure aviation. NATS will monitor the effects on airspace users through trial reports, ATC reports and routine monitoring. After six months NATS will collate reports on the trial for submission to NATMAC. Either then or at the end of the trial, NATS, in conjunction with NATMAC, will

695
consider whether the procedures are an effective solution to the problem and should be retained, or whether they should be modified.
Lord Graham of Edmonton: My Lords, will the noble Lord allow me to intervene? If one of the problems is an unidentified aircraft which could have caused accidents, how is one able to lay blame on the fact that the unidentified aircraft was a glider? If at the end of the six months one looks at the record, and if it is similar to the record of previous periods, where one has unidentified aircraft likely to cause risks, how is one able to say in the future, any more than in the past, that the planes causing the risks are gliders?
The Earl of Caithness: My Lords, as I understand it there are a number of unidentified aircraft that come up on the screen, but when these aircraft are identified it is then determined whether or not they are gliders. There are in the reports a breakdown between the gliders, which sometimes can be motorised (in which case the British Gliding Association say they are not gliders because they are motorised), or civil aircraft.
Lord Graham of Edmonton: My Lords, the noble Earl glided over that very nicely.
The Earl of Caithness: My Lords, as the noble Lord, Lord Graham of Edmonton, will know, it is sometimes extremely difficult to pick up a glider on a radar or to see it visually against a cloud background because of its design and natural colour.
Neither NATS nor Parliament can ever take lightly the safety of aviation in this country. The standards of airspace safety which NATS achieve are good, but it must see that those standards can be maintained today and tomorrow. Inevitably in doing so it will not be able to satisfy the demands of all airspace users, but it will always seek a balance which is acceptable to the majority. However, where one party or another feels that their interests have not been adequately catered for the solution is not for the matter to be referred on appeal to the Secretary of State as my noble friend suggested. Although there is a vested interest in this case, I do not beleive that the company is in the right position to pronounce on such matters, for the very good reason that the expertise necessary to weigh the merits of the competing claims is in the CAA and the final decision must rest with that authority. I believe that no responsible Secretary of State would seek to overturn a decision reached by the authority in matters such as these, in which issues of safety are at stake.
The United Kingdom is almost unique in having within one agency responsibility for all aircraft using our crowded airspace. That arrangment works, and works extremely well, as the safety record shows. I believe that we must not disturb the arrangements by seeking to take away from NATS' responsibility matters in which it, and it alone, is expert or by seeking to undermine it in any way.

Greater Manchester (Light Rapid Transport System) Bill [H.L.]
Committed to an Unopposed Bill Committee.

Isle of Wight Bill
Reported from the Unopposed Bill Committee with amendments.
House adjourned at ten minutes past ten o'clock.

  LIVERPOOL CORONER: TOXICOLOGICAL EXAMINATIONS
  LIVERPOOL CORONER: TOXICOLOGICAL EXAMINATIONS
  VIDEO RECORDINGS ACT 1984: AUTHORITY'S REPORT
  VIDEO RECORDINGS ACT 1984: AUTHORITY'S REPORT
  PRISON GOVERNORS: PROMOTION FROM PRISON OFFICERS
  PRISON GOVERNORS: PROMOTION FROM PRISON OFFICERS
  PRISON OFFICERS: COURT ESCORT DUTIES
  PRISON OFFICERS: COURT ESCORT DUTIES
  PROBATION HOSTEL COSTS
  PROBATION HOSTEL COSTS
  CONDOMINIUM LAW: WORKING GROUP
  CONDOMINIUM LAW: WORKING GROUP
  NORTH ATLANTIC ASSEMBLY: UK DELEGATION
  NORTH ATLANTIC ASSEMBLY: UK DELEGATION
  SDI: FOREIGN SECRETARY'S SPEECH, MARCH 1985
  SDI: FOREIGN SECRETARY'S SPEECH, MARCH 1985