Sitting of 19 May 1986

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    ISLE OF WIGHT BILL
    Lords amendments agreed to.
Oral Answers to Questions
  TRANSPORT

    Road Price Index
    Mr. Wattsasked the Secretary of State for Transport how the road price index has changed in relation to the retail prices index in each of the last five years.
    The Secretary of State for Transport (Mr. Nicholas Ridley): Road prices have fallen, relative to the retail prices index by about 25 per cent. since 1980. This means that we are getting more road for our money. The supporting yearly figures have been placed in the Library of the House.
    Mr. Watts: I thank my right hon. Friend for his encouraging reply. Is he aware that the director-general of the Federation of Civil Engineering Contractors recently commented that he viewed the health of the industry with some rapture? Does my right hon. Friend agree with that assessment, and to what extent is his Department responsible for it?
    Mr. Ridley: I am delighted to hear that our policies are causing rapture. I confirm that he have increased spending on roads by 25 per cent., and that there has been a 30 per cent. increase in value for money. That is why we have such a massive roads programme, whose benefits can be seen in all parts of the country.
    Mr. Peter Bruinvels: Does that mean that more money has been spent on roads and that the programme for building new roads has been substantially increased and improved since 1951? Will funds be made available to widen the M25 between junctions 8 and 10?
    Mr. Ridley: I should point out that the relevant date is not 1951 but 1980. The road output price index has hardly increased during the past six years. That means that we are getting the same cash prices, despite inflation over six years. I am studying the south-west quadrant of the M25 to discover the cause of the congestion, but I was not aware of any problems between junctions 8 and 10.
    Mr. Flannery: Does not the immense transfer of traffic from rail to road mean more pollution, more policing and more blockages all over the country? Are not the Government following a quite reactionary policy, given that, for example, the railways cause no pollution?
    Mr. Ridley: The hon. Gentleman should know that we are coping well with the increased traffic on our roads. Indeed, the programme that I have just set out explains just how well we have coped with it. I believe that people want roads, because motorists want to travel in their cars. It is up to shippers to decide on the cheapest and most convenient form of carriage for their goods. A little freedom in this area, as in others, is well worth while.

    M3-M27 Link
    Mr. David Atkinsonasked the Secretary of State for Transport when he expects the M3-M27 motorway link to be completed.
    The Parliamentary Under-Secretary of State for Transport (Mr. Peter Bottomley): We await the inspector's report on the final section of the M3. This section of the route from Bar End to Bassett may be completed by 1989.
    Mr. Atkinson: Business commuters and tourists to Dorset will welcome that day, but in the meantime is my hon. Friend satisfied with the safety of the existing link, the A33 Eastleigh bypass which The Economist recently described as a "death trap"?
    Mr. Bottomley: People rightly draw attention to dangers on our roads. We recognise the concern that exists, and have agreed to extend the central reserve crash barrier near Ironbridge at Crompton. Barriers on the rest of the Otterbourne to Chandlers Ford bypass would probably not be justified for the short period of use involved before the M3 extension is completed.
    Mr. John Browne: Does my hon. Friend accept that the completion of that stretch of motorway has serious implications for the noble and ancient city of Winchester? Will he ask the Secretary of State to warn his Cabinet colleagues that there must be an unusual degree of expenditure in order to protect the environment and to prevent irreparable damage being done to the city? I am thinking, for example, of the construction of a tunnel to the south and south-east of St. Catherine's hill in order to protect this beautiful city, which is important and historic both nationally and internationally?
    Mr. Bottomley: My hon. Friend has made his local anxieties plain and I am sure that his message will have been heard.

    National Bus Company
    Mr. Pikeasked the Secretary of State for Transport what recent representations he has received regarding the privatisation of the National Bus Company.
    Mr. Ridley: I have received a number of representations, mostly on behalf of groups of local managers and employees who welcome the forthcoming privatisation of NBC's subsidiaries and wish to gain controlling interests in their local companies.
    Mr. Pike: Does the Secretary of State accept that if the NBC must be privatised the services would be better protected if it were privatised as a whole and not split up? Would that not protect both services and jobs?
    Mr. Ridley: I do not agree with the hon. Gentleman. We discussed the issue often enough in Committee. Already over 50 management teams have expressed interest in buying the subsidiaries, out of the 65 companies involved. Having that number of different companies, together with other private operators, such as the municipal and passenger transport executive operators, will provide that element of competition which has been lacking in bus services and will give a much better deal to the passengers. After all, that is what it is all about.
    Mr. Stephen Ross: When does the Secretary of State expect to announce the acceptance of a bid for one of the companies by a management-work force buyer?
    Mr. Ridley: Currently four bids are at an advanced stage of negotiation with the NBC. I cannot say when the negotiations will be complete, but so far as I am aware no bus company management is being held up by NBC in its efforts to purchase the company. I shall announce to the House the details of sales as and when they take place.
    Mr. Beaumont-Dark: Is my right hon. Friend aware that many of us think that privatising any service is good
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    so long as it not only puts money into the Exchequer but helps the service? Does he understand, as I do, that one of the great ideas behind privatisation was that the difficult services would be improved? Does he agree that the scheme would fail if some services turned out to be worse than they are now? Will my right hon. Friend guarantee that services will improve?
    Mr. Ridley: Well in advance of the deregulation and the tendering for routes, which has not yet happened, in many cities services have already improved. Mini-buses are being introduced on a large scale. We can do all that without the Act being in force, so how much more will we be able to do when it is in force?
    Mr. Campbell-Savours: Will not deregulation and privatisation result in the loss of thousands of routes?
    Mrs. Kellett-Bowman: No.
    Mr. Campbell-Savours: Well, the people of Ryedale believed that. Do the Government now intend to change course? Do they accept that the people of Ryedale said no and that they want the restoration of proper policies?
    Mr. Ridley: I accept that the hon. Gentleman and his hon. Friends, along with members of the alliance, succeeded to some extent in awakening people's fears that only the registered mileage would be run, but everyone concerned knows that that is not the full truth. The whole of the tendered services are involved. Local councils have 10 per cent. more cash provision to subsidise those tendered services than they had last year, and they have to subsidise only 25 per cent. of routes instead of the 100 per cent. that they did before.
    Mr. Gow: Does not the privatisation of individual companies give employees and passengers an opportunity to become shareholders? What steps will my right hon. Friend take to encourage them to take that opportunity?
    Mr. Ridley: My hon. Friend is right. As is the case in the Isle of Wight, there is considerable enthusiasm for buying a local bus company. I have made it clear throughout the passage of the legislation that we would give some preference to employees and managers if they sought to buy their company. That is being translated into effect as the sales take place. I believe that the measure will spread ownership widely as well as improve passenger services.
    Mr. Robert Hughes: Why does the Secretary of State not face the facts concerning both the National Bus Company and other bus company services? Does he realise that the early morning mileage of NBC services is down by 37 per cent., that evening mileage is down by 48 per cent., and that Sunday mileage is down by 53 per cent.? National Welsh intends to withdraw completely its children's concessionary fare. Is that not the clearest indication possible that the right hon. Gentleman's policy is failing? It is no excuse to say, "Wait until October, when everything will be confirmed."
    Mr. Ridley: When will the hon. Gentleman wake up to the fact that he is telling only half the story? He knows perfectly well that to get half the Sunday services on 75 per cent. of all routes for no subsidy leaves more subsidy to provide the other half.

    British Rail Engineering Ltd.
    Mr. Martinasked the Secretary of State for Transport when he last discussed with the management of British Rail the effects of British Railways Board procurement policy on BREL.
    The Minister of State, Department of Transport (Mr. David Mitchell): My right hon. Friend has discussed this with the chairman, but the BR Board's procurement policy and its specific effect on British Rail Engineering Ltd. remain matters for management decision.
    Mr. Martin: I have met the Minister, the deputy director of BR and of BREL, all of whom have stated that there will always be a presence in the Springburn railway engineering workshops, small though they are. Will the Minister help to dampen the rumours recorded in newspapers since Friday that there will be complete closure of the Springburn workshops, which, if true, means that people have been telling me lies for the past 18 months?
    Mr. Mitchell: I am sure that the hon. Gentleman agrees that proposals which affect employment should be discussed first with the unions. There is to be a meeting tomorrow between British Rail and its unions to discuss its proposals as they affect BREL.
    Mr. Coombs: Will my hon. Friend give an estimate of the number of new jobs that have been created as a result of the Government's major investment programme in British Rail? Will he also say whether any jobs have gone overseas as a result of the programme?
    Mr. Mitchell: I do not know the precise number of jobs, but I can tell the House that £2·5 billion has been invested by British Rail since the Conservative party came to office. Virtually all that money has been spent in the United Kingdom, thus creating a large number of jobs. I do not have the specific number. I shall write to my hon. Friend.
    Mr. Bagier: Is the hon. Gentleman saying that Ministers know nothing about the contents of the statement to be made tomorrow? Is the hon. Gentleman prepared to admit that the weakend's rumours are based on facts and that there are to be massive cuts in BREL? How much of that has been brought about by pressure from Ministers in order to get rid of the part of the industry that is not paying, and to get the other half ready for privatisation?
    Mr. Mitchell: The changes that British Rail proposes to make about BREL are matters for discussion between the management and the unions. I am sure that the hon. Gentleman, as a good trade unionist, recognises that it is right that the proposals should first be disclosed to the unions that represent the men involved. My right hon. Friend the Secretary of State hopes to make a statement in the House tomorrow.
    Mr. Donald Stewart: Is the Minister aware that the Springburn works have a reputation not only in Scotland and the United Kingdom generally, but world wide? Is he further aware that, quite apart from the hundreds of jobs that might go, its closure would be a black mark against engineering in the United Kingdom throughout the world? Will he come clean with the House and say what the Government intend to do about the works?
    Mr. Mitchell: The distribution of work between one rail works and another is entirely a matter for the BREL management. As BR announced earlier this year. it intends to change the pattern of its maintainance work so that works, including Springburn, will be associated directly with the maintainance work of the areas and regions in which they operate.
    Mr. Sackville: Is my hon. Friend aware of the recent announcement of substantial and unexpected losses at the BREL foundry at Norwich'? Will he confirm that he is aware of the foundry's importance to employment in the town and that he is keeping the situation under review?
    Mr. Mitchell: I can assure my hon. Friend. I have been to Horwich and seen what has been happening there. I have also been involved in the increasing effort to provide employment there and at Shildon, where a major part of the rail works has been closed. I shall of course keep what my hon. Friend said in mind.
    Mrs. Dunwoody: Will the Minister have the honesty to admit that it is his policy that is causing BREL to retract at this speed? Can he give the House any idea how many of the BREL workshops have to close before he will lift a finger to protect the thousands of jobs involved in this engineering industry?
    Mr. Mitchell: The hon. Lady is quite wrong to say that that is my policy or the Government's policy. Let me make the cause absolutely clear. It is the result of massive investment in new rolling stock that we have acceded to BR's request to make. If there is investment in new rolling stock, less maintainance is required. There is no point in keeping maintainance capacity when there is no demand for it.
    Mr. Adley: Although I acknowledge the investment that the Government have authorised in BR, will my hon. Friend nevertheless look at the legislation was passed as long ago as 1929 under which the Government authorised expenditure to alleviate unemployment by the acquisition, by Britain's then private railways, of locomotives and rolling stock and by vast numbers of schemes to improve the permanent way and safety? Is my hon. Friend convinced that social circumstances today are any different from social circumstances then with regard to these jobs?
    Mr. Mitchell: The resources that BR devotes to rolling stock and track maintenance are a matter for BR. It wants to achieve the most cost-effective service possible to persuade passengers to use the railways rather than the roads. It can attract passengers only if it runs an efficient and cost-effective service. That must be a management decision.
    Mr. Snape: Does the Minister agree that the Department of Transport's policy of minimum resources for BR means that the existing intercity fleet is not big enough to meet demand, that the excessive demands on BR rolling stock are leading to the bad punctuality figures that are filling our newspapers, that in Wolverton, Eastleigh, Doncaster and Glasgow up to 4,000 people will lose their jobs as a result of an announcement that is to be made tomorrow, and that tomorrow we expect to see the organ grinder at the Dispatch Box accounting for his bankrupt philosophies rather than hiding, as he usually does, behind the jacket, if not the skirts, of the Minister of State?
    Mr. Mitchell: The hon. Gentleman has rather overrun himself. I have never worn a skirt in my life. What the hon. Gentleman said about minimum resources for BR is arrant nonsense. The maintenance requirements are down because of the massive investment in new rolling stock.
    Mr. Martin: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    Freight (Grants)
    Mr. Leadbitterasked the Secretary of State for Transport what was the cash limit for grants under section 8 of the Railways Act 1974 for the years 1979 to 1986, inclusive; and what was the total sum authorised for section 8 expenditure in those years.
    Mr. David Mitchell: The total cash limit for all freight facilities grants in the period 1979–80 to 1985–86 inclusive was £65·5 million. In the same period total expenditure was £43·8 million, which includes £1·4 million for waterway grants. All figures relate to England, Scotland and Wales.
    Mr. Leadbitter: Will the Minister give some precise information about this year? It is suggested that the authorisation limits have now been reached and that any further applications under section 8 will not be accepted. Is that the position? Will the Minister clarify what the position is this year so that the industry may know what response to expect from its applications?
    Mr. Mitchell: The cash limit for this year is £7·3 million. I shall be surprised if we have claims that equal that amount.
    Dr. Marek: Will the Minister categorically state that the applications in the pipeline will be processed and that any new applications that might be forthcoming to his Department in the next three or four weeks will not be held up or grant refused because of a lack of money?
    Mr. Mitchell: I have no reason to believe that there will be rationing through lack of money. Throughout the period to which I referred the claims have never equalled the amount of money that has been available. In both the past two years I have approved record numbers of grants.

    Channel Tunnel
    Mr. Adleyasked the Secretary of State for Transport if he will make a statement on his latest discussions with interested parties concerning the Channel tunnel project.
    Mr. Ridley: We hold frequent discussions with the concessionaires, the French Government, local authorities and other interested groups, particularly in Kent.
    Mr. Adley: I understand the opposition of certain hon. Members from Kent and of the Transport and General Workers Union, which is perfectly respectable. However, does my right hon. Friend agree that it is altogether different to find commercial interests such as Sealink deliberately trying to thwart the will of the House in this matter? As the project has, I believe, received the support of all the Opposition parties, will my right hon. Friend ensure that they are kept fully informed and that he takes them along with him in all the steps he needs to take to get the Bill through the House?
    Mr. Ridley: It is for hon. Members to decide what they do and say in Committees and in the House. In response to my hon. Friend, I must point out that there are about £800 million worth of railway orders involved in the Channel tunnel project, and every week that the Bill does not get through the House is a week in which those orders cannot find their way into the workshops of the country to remedy such problems as we were discussing earlier.
    Incidentally, I welcome my hon. Friend back to the House. I hear that he has not been well, and we are all glad to see him back.
    Mr. Boyes: Will the Secretary of State inform interested parties that on 1 May, during business questions the Leader of the House told me that he was considering setting up a Committee to look at the opposed private Bill procedure? Will the Secretary of State say that he will take into consideration any recommendations by that Committee, thereby encouraging a more open and democratic decision-making process on thiss unnecessary, unacceptable and unwanted project?
    Mr. Ridley: Although that question is not remotely a matter for me in my responsibilities, I must make it clear that I would welcome the setting up of the inquiry referred to by the hon. Gentleman. I believe that there is a great deal that we can do to improve procedures in that area. I only hope that it will be possible for the Channel tunnel and other such schemes to get through the House in reasonably good order so that we can contribute to creating jobs throughout the country.
    Mr. Soames: When my right hon. Friend is considering the Channel tunnel project, will he bear in mind the shambles that has been caused on the M25 by the inaccuracy of the planning of officials in his Department? What confidence can my right hon. Friend have in the forecast traffic levels for the Channel tunnel project?
    Mr. Ridley: Forecasting is always a hazardous business. It may be that 12 years ago those who forecast and planned parts of the M25 underestimated it. However, I am not sure that it is right to prejudge the nature of the cause of the congestion on the M25. It may be due to traffic signing or badly designed junctions. That is not quite the same thing as a shortage of capacity.
    Mr. Dalyell: What estimate has been made of the effect of delay on jobs, which are likely to be lost? What have the French had to say about what is going on in the House of Commons?
    Mr. Ridley: The hon. Gentleman will know that about 65,000 man-years of employment are involved in the project, and every week that it is delayed is a week when that employment does not find its way to the factories and workshops of Britain.
    In response to his second question, I think that it would be difficult to explain to a Frenchman, in my appallingly bad French, the processes that cause us to take so long to do what the French say they can do in three months.
    Mr. Baldry: Does my right hon. Friend not think it strange that those who constantly urge and exhort us to spend more on infrastructure are always in the vanguard of those who oppose any specific infrastructure project, whether it be the Channel tunnel or the building of a new motorway?
    Mr. Ridley: My hon. Friend is absolutely right. I have had three experience of that — Stansted airport, the

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    Okehampton bypass and the London docklands light railway. Now there is the Channel tunnel. They are all major infrastructure projects involving thousands of jobs, and on every occasion Opposition Members have voted against them.
    Mr. Robert Hughes: Will the Secretary of State be a bit more forthcoming? He constantly repeats at the Dispatch Box the number of jobs involved, yet when he is asked specifically to provide Government machinery to make sure that the jobs come to England, Scotland and Wales, he says that it is nothing to do with him. If he wants his bread buttered on both sides, and jam as well, the fact is that he has the responsibility for ensuring that, and he must take it. Otherwise, people will listen with some scepticism to his protestations about wanting the jobs.
    Mr. Ridley: The hon. Gentleman knows full well that I do not have the power to direct a private organisation, such as Eurotunnel, as to where it should place its contracts. Indeed, it would be against the European Community rules if I were to seek to do so. On the other hand, the hon. Gentleman knows perfectly well that massive opportunities exist for British firms, and I have no doubt that with their keenness and effectiveness they will secure more than their fair share.
    Mr. Meadowcroft: What is the Secretary of State's current estimate of when work is likely to commence on the Channel tunnel? Will there be genuine new through routes across London when the tunnel is open, which will be essential if I am to convince my constituents that the tunnel is not just for the south-east of England?
    Mr. Ridley: I cannot answer the hon. Gentleman's first question about when work will start on the tunnel, because that would be to prejudge the time that Parliament will take to consider the legislation, but I can assure him that the Channel Tunnel Group wishes to start as soon as Royal Assent is given. The hon. Gentleman will know that, on the best estimate, the tunnel might not be operative until 1993. British Rail is actively pursuing ways of opening up the tunnel not only to all points east of Calais but to all points north and west of Dover. It will put forward its plans in due course.
    Mr. Thurnham: Does my right hon. Friend agree that the project should provide many thousands of jobs among suppliers of equipment and materials, particularly in the north of England, and that any delay is to be deplored?
    Mr. Ridley: My hon. Friend is absolutely right. It is a massive infrastructure programme, involving large numbers of jobs, which will be distributed equally all over the country. All regions will benefit.

    Bus Lanes
    Mr. Dubsasked the Secretary of State for Transport if he will investigate the effectiveness of bus lanes in London on roads for which he is responsible.
    Mr. Peter Bottomley: Yes, Sir.
    Mr. Dubs: Does the Minister agree that buses in London benefit a great deal from having clear bus lanes? May I ask him, yet again, to look at the bus lane in Park lane? If the Minister were to go down there on a Monday to Friday at any time when the bus lane is in operation, he would find it filled with vehicles that use it as a parking lane.
    Mr. Bottomley: I have to report to the House that I have been down Park lane on a bus. I took a sandwich with me, and it was unfinished when I reached the other end. Unlike frogs, which eat with their eyes closed, I had mine open. Neither the bus nor the other traffic was held up.
    Mr. Higgins: Will my hon. Friend take overall responsibility for all roads with bus lanes and other unnecessary obstructions — for example, those at the Aldwych and on Westminster bridge? Why do we have what looks like a new parking lot for buses on Westminster bridge, because of the curious obstruction at its far end?
    Mr. Bottomley: As the suggestion comes from my right hon. Friend, I must take it seriously. Like the first inhabitants of Burkina Faso, the land of the wise men, otherwise known as Upper Volta, I might wonder whether it is right to take all those powers into my Department's hands. I have to report that I have been across Westminster bridge and down Aldwych and the Strand and I was not held up by the traffic.
    Mr. Tony Banks: Is the Minister aware that London Regional Transport estimates that bus lanes in London saved £9·9 million last year? Is that not a good reason for extending the bus lane network across London, because it would speed the flow of traffic through London? Is he further aware that a recent reply from the Secretary of State for the Environment revealed that the Department issued 429 parking tickets last year to civil servants who ignored bus lanes and double yellow lines? Will he encourage civil servants to park properly, so that buses and other traffic can be speeded up?
    Mr. Bottomley: We can do many things with statistics. We can say that Anne Boleyn had six fingers or that 18 per cent. of people share their baths. However, it is more important to consider each bus lane to see whether it is worth while.

    Heavy Goods Vehicles (Driver Tests)
    Mr. Evennettasked the Secretary of State for Transport what changes he proposes to make to the fees charged for the heavy goods vehicle driver tests.
    Mr. Ridley: I have been consulting industry about proposals to unify the time allotted and fees charged for heavy goods vehicle and public service vehicle driving tests. The effect would be a common test time of 90 minutes and a common fee of £40. For heavy goods vehicle tests, this is a reduction of £25. I shall shortly be inviting the House to approve regulations to make the new lower fee effective from 1 July 1986.
    Mr. Evennett: I thank my right hon. Friend for his reply. How much does he envisage the reduced fees will save the freight industry per annum?
    Mr. Ridley: The figure is about £1 million. I shall be interested to know whether the major reduction in the fee will receive as much publicity as it would have done if it had been an increase.

    M25 (Epping Forest)
    Sir John Biggs-Davisonasked the Secretary of State for Transport if he will pay an official visit to those parts of the Epping Forest constituency where residents suffer from noise and lighting from the M25.
    Mr. Peter Bottomley: My right hon. Friend has already done so by opening it. I shall visit it too.
    Sir John Biggs-Davison: Is my hon. Friend aware that my constituents will be grateful for the fact that he will be seeing for himself how far his Department's undertaking on landscaping, tree planting and lighting have been carried out? Will he take the opportunity to meet some of the sufferers in places such as Theydon Garnon, Roundhills and Woodbine Close?
    Mr. Bottomley: Yes, Sir.

    Pedestrian Crossings
    Mr. Nicholas Bakerasked the Secretary of State for Transport what representations he has received from highway authority associations about the criteria for the provision of pedestrian crossings.
    Mr. Peter Bottomley: We are considering suggestions that greater allowance should be made for the needs and safety of school children.
    Mr. Baker: My hon. Friend's answer will be welcomed. Will he encourage local highway authorities not to stick rigidly to criteria based on numbers of traffic or pedestrians, but to be more flexible in their approach, taking into account the speed of traffic as well as numbers and especially the needs of the community and the need to get the two halves of the community together?
    Mr. Bottomley: The key point which my hon. Friend makes and which I support, is that guidelines should be correct, and local authorities should use them appropriately.

    Tolled Crossings
    Mr. Roy Hughesasked the Secretary of State for Transport if he will now respond to the report of the Transport Committee on tolled crossings, H.C. 250–1, published on 19 February.
    Mr. Ridley: I am considering the report, which was published on 12 March. I shall respond as soon as possible.
    Mr. Hughes: Before going ahead with his proposal in October this year to appeal against the High Court decision to reject his decision to increase tolls on the Severn bridge by 150 per cent., will the right hon. Gentleman consider the horrific unemployment in Wales? If he does, he will be more likely to respond positively to the recommendations of the Select Committee.
    Mr. Ridley: It would be wrong to prejudge my response to the Select Committee report and to comment on matters before the Appeal Court in relation to the Severn bridge tolls. I fear that the hon. Gentleman must be disappointed in his desire to know my views on those matters.
    Mr. Hickmet: What did my right hon. Friend mean when he told the Select Committee that the Humber bridge was an exceptional problem? Does he concur with the report of the Select Committee that the Humber bridge is in an impossible financial situation and is losing more than £20 million a year, which is the deficit over income? Does he agree that the time has come to abolish the toll on this bridge, which is increasingly used by fewer and fewer people?
    Mr. Ridley: I agree that the circumstances in which the Humber bridge was built were indeed exceptional. It is the only example of the cost of winning a by-election that is known to this House. I fear that it falls to the Conservative Government to sort out this problem, and for some time I have asked the Humber Bridge Board to put forward proposals for discussion. It has just asked for a meeting, and that will be held as soon as possible to determine the best way forward.

  ATTORNEY-GENERAL

    Mr. Derry Mainwairing Knight
    Mr. Greenwayasked the Attorney-General on what date it was decided to prosecute Mr. Derry Mainwairing Knight; and if he will make a statement.
    The Attorney-General (Sir Michael Havers): The Director of Public Prosecutions decided to prosecute Mr. Derry Mainwairing Knight on 20 May 1985.
    Mr. Greenway: Is my right hon. and learned Friend aware of estimates that the "Satan trial", which lasted 36 days, cost up to £500,000 and that some lawyers were paid as much as £30,000 in fees? Does he share my concern that for some people the cost of justice looks too high?
    The Attorney-General: The figure of £500,000 is a gross exaggeration. I have made preliminary inquiries, but I do not yet have the full figures. A number of lawyers, both solicitors and banisters, would not agree with my hon. Friend's second point.

    Legal Aid
    Mr. Nicholas Brownasked the Attorney-General if he will make a statement on Her Majesty's Government's present review of legal aid funding.
    Mr. Dubsasked the Attorney-General if he will publish the results of the legal aid efficiency scrutiny.
    The Solicitor-General (Sir Patrick Mayhew): The report is expected in about a month's time. It will be published as soon as this can conveniently be arranged.
    Mr. Brown: I am grateful to the Solicitor-General for that promise to publish the report of the Treasury efficiency unit. Will he give an assurance that in their search for savings and extra money for the profession the Government will protect the interests of the consumers of legal services under the legal aid system? Does he acknowledge the now widespread fear that we are getting a second-class service for the most vulnerable sectors of the community?
    The Solicitor-General: I do not acknowledge the latter part of the question, nor would the Lord Chancellor. The scrutiny was set up with no preconceived ideas, but it is of concern to everyone, especially taxpayers, that the cost of legal aid in real terms has doubled since 1979.
    Mr. Dubs: I welcome the decision to publish the report. Does the Solicitor-General agree that efficiency is only one of several matters of concern about the legal aid system, and that many people believe that a wider ranging review of the scheme would have been of benefit both to the legal profession and to people who depend upon legal aid?
    The Solicitor-General: I agree that efficiency is very important, but it is not the whole story.
    Mr. Hickmet: Does my hon. and learned Friend agree that one of the great deficiencies of the legal aid system is the fact that if the litigant has an income below a certain level legal aid is forthcoming but that consequently a vast section of the public come into an income category which means that they are not able to obtain legal aid, even though at the same time, because of legal costs, they are unable to prosecute or defend cases?
    The Solicitor-General: I think that litigation should generally be avoided. The fact remains that very nearly 80 per cent. of our fellow countrymen who receive legal aid do so free of contribution. That is a substantial preponderance.
    Mr. Janner: Does the hon. and learned Gentleman accept that the question he was asked was absolutely right, because there is no justice in this country for the vast majority of people who do not qualify for legal aid and cannot afford to go to court without it? What will he do to increase legal aid so that ordinary people with ordinary incomes can get ordinary justice from our courts, so that they do not remain like the Waldorf hotel—open to all?
    The Solicitor-General: In legal aid, as elsewhere, the more one does, the more one may do. The Lord Chancellor has a very good record in the extension of the availability of legal aid. For example, legal aid has been extended to patients appearing before mental health review tribunals, and there is now the 24-hour duty solicitor scheme for all suspects held at police stations. People have had to wait for a Conservative Government before that has been achieved. Therefore, I do not feel that the implicit criticism of the Lord Chancellor is justified.
    Mr. Meadowcroft: Does the Solicitor-General accept that some of those denied access to legal aid are bitter at their inability to go to court and defend themselves? Has he ever considered linking legal aid to the law centre provision so that there is some balance between the two which would enable more people to take part in the legal process?
    The Solicitor-General: I expect that it is my fault, but I have not followed the later part of the hon. Gentleman's question. Apart from a few exceptions, law centres are not funded from Government funds, and it is right that they should not be. I quite understand that somebody outside the financial limits for legal aid may wish that he were within them. However, there must be a limit to the amount spent on legal aid. I repeat that twice the sum in real terms is being spent this year than was spent in 1979.
    Mr. Ryman: Can the Government do something to protect people who are sued by a legally-aided plaintiff, spend a great deal of time and money defending the case and cannot recover their costs? I have always thought that the provision is unfair. I believe that many people in the legal profession think it is wrong that a non-legally aided person who defends a case and wins can never recover the costs against the legal aid fund. Are the Government looking into that?
    The Solicitor-General: I acknowledge the sense of injustice that is apparent, but I cannot hold out any prospect of a change in the rules. Legal aid committees
    14
    should pay careful attention, as I believe they do, to the merits of a proposed case before granting legal aid certificates.

    Terrorism (Treason Charges)
    Sir John Biggs-Davisonasked the Attorney-General why no charges of treason have been brought against alleged terrorists; and if he will make a statement.
    The Attorney-General: While treason remains available for an appropriate case, there are substantial problems in bringing a prosecution based on the language of a statute designed for the different circumstances of more than six centuries ago. The common law remedy of murder, coupled with legislation on explosives and firearms, has proved both appropriate and effective for all recent cases.
    Sir John Biggs-Davison: Is my right hon. and learned Friend aware that I do not find his answer wholly convincing, having regard to the recent announcement on this matter by the Lord Chancellor?
    The Attorney-General: I know of my hon. Friend's great interest in this matter. I think that there was an early-day motion in his name on the subject some 12 years ago. One must realise that the 600-year-old statute is couched in such archaic language that it would be difficult to prove all the necessary ingredients of the crime and for a modern jury to come to grips with the terminology. It should be remembered that the Act was originally intended to deal with rival claimants to the throne in the 14th century, or where the country was at war with a foreign power. Fortunately, those conditions do not prevail today.
    Mr. Merlyn Rees: In view of that answer, why does the head of the judiciary, the Lord Chancellor, keep suggesting the use of the Act?
    The Attorney-General: The Lord Chancellor was speaking in his personal capacity. As the House will know, the only people who have ministerial responsibility to this House for prosecutions are my hon. and learned Friend and myself.
    Mr. Stokes: As there is a capital penalty for crimes of treason, arson of the royal dockyards and certain other crimes, which I shall riot specify, would a not be convenient to add terrorism to the list? Regarding history, surely the dangers now are greater, but the penalties seem weaker.
    The Attorney-General: The penalties would be the same under the Treason (Felony) Act 1848, for example, but, as I said in my initial answer, the Treason Act 1351 remains available in appropriate circumstances.
    Mr. John Morris: Will the Attorney-General confirm that there have been no cases of peacetime treason this century? Was he confirming a moment ago that constitutionally responsibility for prosecution is his and that the Lord Chancellor, while head of the judiciary, has no role in it? If the Lord Chancellor's recent speech at Grantham was a criticism that no treason charges were preferred in the Knightsbridge bomb case, which he gave as an example, will the Attorney-General remind the Lord Chancellor that, while we would all condemn any act of terrorism, the House, on a free vote, rejected the restoration of capital punishment for terrorist murder?
    The Attorney-General: The right hon. and learned Gentleman is right. The constitutional position remains the same.

  OVERSEAS DEVELOPMENT

    Aid Levels
    Mr. Jannerasked the Secretary of State for Foreign and Commonwealth Affairs what are the total levels of aid planned for the current financial year for (a) countries of the Commonwealth and (b) other countries.
    The Minister for Overseas Development (Mr. Timothy Raison): From bilateral country programmes, about £440 million and £110 million, respectively.
    Mr. Janner: In the light of the proposed financial aid to Commonwealth countries during the coming financial year, why are the Government proposing to reduce, however slightly, aid to India, when the need is growing? Why, when considering the implementation of the retrospective terms of adjustment, are other countries to be freed from the responsibility of repaying loans incurred before 1975, when Her Majesty's Government are to insist upon India meeting its loans, thereby making our aid worth about half its paper value?
    Mr. Raison: We have a special arrangement over retrospective terms adjustment with India, which includes our extremely valuable poverty focus element. We shall continue to provide India with far and away the largest of our bilateral programmes.
    Sir Anthony Kershaw: Does not India get the best deal from us of any country? Are not the needs of all countries equally claimant and difficult to decide against?
    Mr. Raison: I have a difficult job in allocating aid. My hon. Friend is right. Our programme to India is of great importance, and it is highly regarded by the Indians themselves.
    Mr. Ashby: Does my right hon. Friend welcome Mr. Geldof's efforts through Sport Aid, and what are the Government doing to help Sport Aid?
    Mr. Raison: Like everybody, I greatly welcome and admire what is happening through Sport Aid, as I did the efforts of Live Aid and Band Aid. The money provided by the latter two, £26 million, to help with the emergency in Africa was a valuable addition to the £190 million provided by the British Government over the past two years. We are funding the offices from which Sport Aid is organised.

    International Fund for Agricultural Development
    Mr. Tom Clarkeasked the Secretary of State for Foreign and Commonwealth Affairs if he will estimate the share of contracts granted to United Kingdom countries by the International Fund for Agricultural Development as a percentage of the total number of external contracts offered by the organisation since its inception.
    Mr. Raison: By the end of 1984, 5·6 percent. by value of IFAD's total spending was on British goods and services. We won 21 per cent. of procurement placed outside the benefiting countries.
    Mr. Clarke: How does the Minister defend the Government's astonishing attitude to the special fund for sub-Saharan Africa, in view of the fact that this country obtained 47 per cent. of non-local contracts, in spite of competition from Germany, the United States, Japan and other countries? Why are the Government being so insensitive to the agricultural needs of the area, as well as throwing away jobs?
    Mr. Raison: We are playing our full part in the replenishment of IFAD. I see the merits of the special fund, but the more we provide to multilateral agencies, the less we can provide for bilateral aid. Our bilateral aid is largely a tied programme, and it is highly effective. I am not anxious to see it whittled away.
    Mr. Beith: Will we not lose contracts for British firms if we do not contribute to the special programme? Is not the record of the IFAD programme in giving aid directly to agricultural production good, and does it not compare favourably with much of our direct aid?
    Mr. Raison: That programme does not yet have a record, because it has not yet come into being. Only a limited number of countries are subscribing to it. If we switch money from the bilateral to the multilateral programme, we shall lose the return on the bilateral programme, even though we make it up on the multilateral spending.

    Sub-Saharan Countries
    Mr. Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will report progress on co-ordination with other countries to ensure a concerted programme to help sub-Saharan African countries with their agricultural development programmes.
    Mr. Raison: There is widespread acceptance among bilateral and multilateral donors that their efforts in agricultural development and in other sectors should be co-ordinated, in support of policies agreed with recipient countries. I expect that the United Nations Special Session on Africa later this month will also focus attention on this subject.
    Mr. Chapman: I accept that there are good and logical reasons why this country should not contribute to the special IFAD fund, for the reasons that my right hon. Friend has given. Nevertheless, does he agree that co-ordination between donor countries is vital if we are to remove the scourge of famine from sub-Saharan countries? Can my right hon. Friend provide examples of co-ordination, and will he assure the House that the United Kingdom Government will play a leading part in the United Nations Special Session to deal with agricultural development in Africa?
    Mr. Raison: I assure my hon. Friend that we shall be very active in the United Nations Special Session. My right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs plans to attend, and so do I. As for co-ordination, we have already played a very prominent part in backing the efforts of the World Bank consultative groups, the United Nations development programme round tables, other World Bank activities and a variety of donor co-ordinating efforts, particularly those which are carried on in recipient countries.
    Mr. Deakins: What prevents Britain from spending a greater proportion of its aid to sub-Saharan Africa on rural and agricultural development? Is there a policy block, or is it just that that is the way things have been done in the past and it is very difficult to change them?
    Mr. Raison: I am ready to consider proposals for increased and further agricultural aid, because I agree with the hon. Gentleman that it is very important. However, one has to remember that it is a question not only of this country accepting proposals but of the recipient Governments making a commitment to agricultural proposals as opposed to others.

    Voluntary Agencies
    Mr. Stuart Hollandasked the Secretary of State for Foreign and Commonwealth Affairs whether he intends to make increased provision to the voluntary agencies concerned with development over the next three years.
    Mr. Raison: The voluntary agencies provide very cost-effective aid to some of the poorest communities in the developing world. Our support for the agencies has increased considerably in recent years, and I expect to continue to offer them substantial financial support in the future.
    Mr. Holland: Will the Minister come clean about how much he will contribute, because he did not in his reply say how much that might be? Does he intend at least to keep the increase in contributions in line with inflation? If not, in effect there will be a real cut. Despite all that he has said about his support for such excellent intitiatives as Sport Aid, if the Government's contributions to voluntary agencies cannot be increased in real terms, Sport Aid is the privatisation of what should be the Government's support policy.
    Mr. Raison: It is not the Government's practice to publish detailed figures for three years ahead. If the hon. Gentleman looks at our record in the voluntary sector since 1979, he will find that our support for the British volunteer programme has increased by no less than 101 per cent. in real terms and that our support for the joint funding scheme has increased, again in real terms, by 41 per cent. That represents a major increase in support to the voluntary sector.
    Mr. Forman: Does my right hon. Friend accept that many of his right hon. and hon. Friends think that to increase the provision for the voluntary agencies is a most cost-effective way of using the funds that are available for the aid programme? Does he take heart from the paragraph in the Tokyo summit declaration that makes it clear that the Prime Minister and all the other Heads of Government are committed to maintaining and, where appropriate, increasing official aid from this country and from the other countries involved?
    Mr. Raison: I am grateful to my hon. Friend for his remarks about the Government's support for the voluntary sector. I have already said that our support has been outstanding. I, too, was heartened by the Tokyo summit communiqué.

    Equatorial and Tropical Forests
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs what is his policy towards aid projects which affect the conservation of equatorial and tropical forests.
    Mr. Raison: Our policy is to support the wise use and replenishment of the forests. In doing so we have accepted the Food and Agriculture Organisation's tropical forest action plan as a valuable framework for our actions.
    Mr. Spearing: I thank the Minister for that reply. 'Will he assure the House that special attention will be given where there is objection to any aid project for which he is responsible which does not comply with the criteria that he has laid down? What action are Her Majesty's Government taking in respect of aid projects from other countries which do not meet the criteria which he outlined?
    Mr. Raison: I accept that it is important that our aid projects should have full regard to environmental and human factors. As I have told the House, I have made representations to the president of the World Bank stressing our belief in the importance of giving proper regard to the environmental factors in respect of other aid programmes; and, of course, we are happy to discuss that with our fellow donors through the various means of donor co-ordination.

    Public Expenditure (Aid)
    Mr. Altonasked the Secretary of State for Foreign and Commonwealth Affairs what proportion of total public expenditure was spent on overseas aid in 1985.
    Mr. Raison: For the financial year 1985–86 provisional figures indicate that overseas aid accounted for 0·84 per cent. of total public expenditure.
    Mr. Alton: I thank the Minister for that reply. Will he confirm that as a percentage of GDP that is a lower precentage than in the late 1970s, and, despite Live Aid, Band Aid and the famine in africa, we are spending less now in real terms than we were then? Do the Government have any plans for increasing the amount of money spent on overseas aid?
    Mr. Raison: There has been a fall in percentage terms since 1979. On the other hand, the aid programme is now broadly stable as a proportion of planned public expenditure, and we have had an increase in real terms this year over last year.

    South Africa
    3.31 pm
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): With permission, Mr. Speaker, I should like to make a statement on South African incursions into Botswana, Zambia and Zimbabwe.
    As the House knows, a number of locations in Botswana, Zambia and Zimbabwe were attacked early this morning. The South African defence forces have acknowledged that they were responsible for these attacks, full details of which are not yet available.
    My hon. Friend the Member for Wallasey (Mrs. Chalker) has already summoned the South African chargé to ask for an urgent explanation. She expressed to him our grave concern. Our ambassador in South Africa has been instructed to seek an early call on the South African Foreign Minister.
    Our high commissioners in Gabarone, Lusaka and Harare have been instructed to convey to their host Governments the British Government's concern at these attacks and to seek further details about them, including any indication of casualties.
    We have always made plain our opposition to cross-border violence and have consistently condemned the resort to force by South Africa against her neighbours. Today's attacks by the South African defence forces represent a plain violation of the sovereignty of three fellow Commonwealth countries It is particularly' deplorable that they should have taken place while the Commonwealth Group of Eminent Persons were in South Africa, seeking to promote a process of dialogue which would lead to the ending of apartheid, in the context of a suspension of violence on all sides. Today's events underline the urgent need for just such a suspension of violence.
    Mr. Donald Anderson: Yet again the South African Government have committed acts of aggression against front-line states. Yet again the sovereignty of independent Commonwealth Governments has been infringed by acts of state terrorism by the South African Government. Following President Botha's speech last Thursday, when he spoke against meddling foreigners, does that not show that South Africa is rejecting possibly its last chance of proceeding to a relatively bloodless evolution to majority rule via the mediation of the Eminent Persons Group, which, after all, our Prime Minister put forward at Nassau last October as a means, in her isolation, of preventing effective sanctions against South Africa?
    President Botha, by this raid, has sent us a clear message. What a limp message the Foreign Secretary has sent in reply. Is the Foreign Secretary aware that Bishop Tutu has just said that the world awaits what the Prime Minister and President Reagan will do now, as always in the past the Prime Minister and President Reagan have vetoed mandatory sanctions against South Africa?
    Does the Foreign Secretary not recognise that because of what happened at the Tokyo summit, and because of our isolated stance at the Luxembourg meeting last September with EEC Foreign Ministers and our isolated stance at the Commonwealth Heads of Government meeting in Nassau last October, we are perceived in the world as South
    20
    Africa's best friend? The Foreign Secretary proposes to show our disapproval of this incursion by' asking the Minister of State to wag her finger at the South African chargé d'affaires. This is an absurdly weak response, but how typical of the Government.
    Will the right hon. and learned Gentleman now take the lead in seeking the full implementation of the range of measures agreed at Luxembourg in September and at Nassau in October? In the letter and spirit of Luxembourg, how can he justify the South African military attachés accredited to Britain remaining en poste in London? In the light of the decision at Nassau last October, how can we still allow the importation of Krugerrands? Will he now send to President Botha a message that he will understand? What better reason than this aggression is there for immediately proceeding with selective sanctions against South Africa?
    Sir Geoffrey Howe: I can understand the indignation that the hon. Member for Swansea, East (Mr. Anderson) seeks to express in his questions. I deny absolutely the suggestion that the Government have adopted an isolated stance. We have condemned apartheid, and shall continue to condemn it, without reservation, and we wish it to be abolished as soon as possible. We wish that abolition to be achieved without the condemnation of all the peoples of South Africa to a bloodbath of violence. For that reason, the Prime Minister and the Government were able to take the lead at Nassau and in the European Community in promoting an effective opportunity for a peaceful solution through the Commonwealth Eminent Persons Group. When it has suited them, Opposition Members have been only too willing to endorse the legitimacy and effectiveness of that group. Let us start from the common ground.
    We wish to bring about an early end to apartheid in South Africa. We wish that to be brought about by peaceful means, and the Eminent Persons Group is the most effective instrument devised so far for achieving that. As I said in my statement, it is for that reason that we regret this series of attacks. I have described as particularly deplorable the fact that they are taking place at this time. [Interruption.] If Opposition Members wished to address themselves seriously to trying to bring about what is necessary, they should stop shouting about it in their present absurd fashion. We have made our condemnation clear and will consider with our partners what further action may be necessary. Our objective will be to bring about a suspension of violence and a cessation of apartheid as soon as possible.
    Sir John Biggs-Davison: Should not our judgment of these matters be based, not on the merits or demerits of African Governments, but on international law? What is the international law on these matters? Was the air strike against terrorists in Tunisia consistent with international law?
    Mr. Geoffrey Howe: My hon. Friend raises the matter of the air strike against Tunisia. He will recollect that we condemned that air strike without hesitation as having no foundation in international law.
    Sir John Biggs-Davison: Libya.
    Sir Geoffrey Howe: My hon. Friend said Tunisia.
    Sir John Biggs-Davison: I apologise, I meant Libya.
    Sir Geoffrey Howe: Libya was quite different. There we had the plainest possible conclusion that state-directed terrorism was promoted, organised, sustained and directed by the Libyan Government, and it was universally recognised and condemned as such. That must be distinguished from what is happening in this case. One cannot conclude that any of the three Governments concerned have been promoting or inspiring, still less directing, terrorism in South Africa. In addition, we know that the Government of Botswana are at this moment considering with the South African Government means of curtailing terrorism. The circumstances could not be more different.
    Dr. David Owen: The whole House will join the Foreign Secretary in condemning this attack — [HON. MEMBERS: "No."] — this outrageous attack, particularly as it is not justifiable in international law. I am glad, at least, that the Foreign Secretary has not given us a justification in terms of article 51. Will he recognise that he will have to come before the House and the Security Council and agree now to a package of sanctions against South Africa? That is the logic of the present position. The South Africans deliberately undermined the Commonwealth peace initiative. That must now be met with sanctions, which must involve a banning of air flights to and from South Africa and a banning of new investment in South Africa.
    Sir Geoffrey Howe: I understand the point of view expressed by the right hon. Gentleman, but I do not depart from what I have said about the deplorable nature and timing of what has taken place, particularly because of the powerful efforts that my right hon. Friend the Prime Minister and others have made in trying to promote the work of the Commonwealth Eminent Persons Group. However, it is too early to come to a judgment on what action should be taken. Certainly the situation is very serious.
    Mr. Jerry Wiggin: What representations has my right hon. and learned Friend made to the Governments of the three Commonwealth countries concerned against the quite open and flagrant harbouring of Communist-assisted terrorists?
    Sir Geoffrey Howe: We have made plain our position over a very long period of time. We are opposed to cross-frontier violence of any kind, from whatever country, in southern Africa. Equally I must make it plain to my hon Friend that there is no evidence comparable to that cited in other cases that the front-line Commonwealth Governments concerned have been involved in the promotion, direction or inspiration of terrorism. Certainly there is nothing whatever to justify unprovoked attacks of this kind from South Africa.
    Mr. Merlyn Rees: May we come back to the point about international law? Is the Foreign Secretary saying on behalf of the Government that these violations of sovereignty are wrong and that the violation of the sovereignty of Libya, using aircraft from this country, was right?
    Sir Geoffrey Howe: I have already said in my statement that the attacks by the South African defence forces represent a plain violation of the sovereignty of three fellow Commonwealth countries, and they are to be deplored. I have made it plain to the House on other
    22
    occasions, and do so again, that in the case of Libya—a totally different case from this—there was the plainest possible evidence of a Government directing and promoting state-sponsored terrorism and attacks on innocent targets. In the case of Libya there is plain evidence of state-sponsored terrorism, but there is no evidence of that kind in this case.
    Mr. Tim Rathbone: Will my right hon. and learned Friend accept that there might be a more balanced view on this matter if the Government were in touch with the ANC and were able to talk to it and find out the reactions, not only from the terrorist parts of that organisation, but from the nationalist parts?
    Sir Geoffrey Howe: It was for that reason that we took steps to authorise contacts with the ANC at the time of my visit to Lusaka earlier this year and subsequently.
    Mr. Tom Clarke: Will the Foreign Secretary accept that those of us, including my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who visited Gabarone last summer, after that infamous raid, and who saw rooms where young children had been shot in their own beds, regard South Africa as the focus of evil in the international society? Does not what has happened call for more than mere words and platitudes? Will the Foreign Secretary join the three Commonwealth countries concerned in demanding sanctions as the only real response to this outrage?
    Sir Geoffrey Howe: I entirely sympathise with the point expressed by the hon. Gentleman and by his hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) about the way in which the incident is bound to be seen in Botswana. I have discussed the earlier incident there on more than one occasion with my opposite number, the Botswanan Foreign Minister, and I know that throughout the earlier part of this year Botswana was engaged in discussions with the South African Government, through a joint commission and other means, about methods of preventing the risk of terrorist action across their frontier. In those circumstances, with a meeting of the joint commission due to take place at the end of this week, I have already deplored this action, particularly with reference to Botswana.
    Mr. Eric Forth (Mid-Worcestershire): My right hon. and learned Friend will recall that our American friends and allies persuaded us that Libya had mounted terrorist attacks from its territory, which justified an attack in turn on Libya. What opportunity has he given our South African friends to tell us of their evidence of terrorist attacks mounted on them from the three countries concerned?
    Sir Geoffrey Howe: We have, of course, been in touch with the South African Government on earlier occasions—
    Mr. Forth: This time.
    Sir Geoffrey Howe: Today, my hon. Friend the Minister of State has been in touch with the South African charge in London. I cannot emphasise too strongly the lack of similarity between the two events. There is almost universal recognition of sustained, direct, proclaimed Libyan state-sponsored terrorist attacks on innocent people outside that country. The two cases are as different as chalk from cheese.
    Mr. David Winnick: Leaving aside the fellow travellers of the South African regime who are sitting on the Tory Benches, do not the raids once again demonstrate that the South Africans have no more intention of observing international law than of respecting human and political rights in South Africa? When will the Foreign Secretary realise that a gentle rebuke now and again of the South African authorities is not sufficient? Much stronger action is required. When will the British Government face their responsibilities and recognise that far more effective measures including economic sanctions, are required against that apartheid regime?
    Sir Geoffrey Howe: If the matter were only one tenth as simple as the hon. Gentleman implies! The Prime Minister and I have made it plain to the South African Government on many occasions that there is an urgent need for them to take the necessary steps to bring apartheid to an end. To that end, with the support of Commonwealth and European Governments, we have promoted the energetic work of the Commonwealth Eminent Persons Group. We have invested a lot of effort in that exercise, and that is why we join the whole House in deploring the attacks that have taken place today.
    Mr. Richard Alexander: If terrorist raids had taken place from those three Commonwealth countries against South Africa's sovereign territory, it would surely have been with the connivance, at the very least, of their Governments.
    Sir Geoffrey Howe: I have already said that there is no evidence that any violence by the ANC or anybody else in South Arica is sanctioned, still less directed, by the authorities in Botswana, Zambia and Zimbabwe. At the very time when the attack took place, contacts were made between the Governments of Botswana and South Africa with a view to a further meeting of the joint commission directed towards joint action against such activity.
    Mr. Guy Barnett: Did the Foreign Secretary notice that when President Masire of Botswana surveyed the damage done by the brutality of South African troops he described the action as being "completely unprovoked and unwarranted"? He asked:
    "What have we done to deserve this?"
    Does that not sound like a cry for help to fellow Commonwealth countries? What practical contribution will the Government make to the Government of Botswana in order to repair some of the damage done by South African troops?
    Sir Geoffrey Howe: I have not yet seen the President's observation, but I can well understand why he made it. We shall have to consider that question, and several other matters arising out of it.
    Mr. Hugh Dykes: Is my right hon. and learned Friend aware that the fact that he has made a statement is appreciated in all parts of the House, especially as the United Kingdom Government is in a difficult position, which deserves some sympathy, but do not the raids conclusively show that the regime in Pretoria is not only extremely dislikable, but stupid? After all, it has perpetrated an act that will make it far more difficult for the Eminent Persons Group to reach a successful conclusion. Is there any prospect of this Government, as a leading Government in the Commonwealth, and as they are taking over the EEC presidency on 1 July, making sure
    24
    that there are renewed initiatives? Is my right hon. and learned Friend still hopeful that the Eminent Persons Group will be successful? Has not the day been brought inevitably closer when full sanctions will be imposed against Pretoria?
    Sir Geoffrey Howe: The Commonwealth Eminent Persons Group, the Governments concerned, and others, are bound now to consider how far, and in what way—if at all — the group can continue to play a part. We believe that it should be possible for it to play an important role in the search for a settlement, but obviously this series of raids underlines the urgency of its work. We have made absolutely plain to the South African Government our view of the gravity of the action that they have taken.
    Mr. A. J. Beith: Is it not likely that the raids will make it impossible for the CEPG to continue its work, and that the raids might have been designed for that purpose? If that work comes to an end, will that not represent a decisive change in the circumstances under which the Prime Minister said in Bermuda that she was not prepared to contemplate sanctions? Does the Foreign Secretary accept that the British Government's attitude must be completely reassessed if those circumstances arise?
    Sir Geoffrey Howe: I shall not undertake a reassessment of the Government's attitude in the House of Commons this afternoon. It is plain from what I have said already that the attacks, when the Commonwealth group is in South Africa, are to be particularly deplored. Plainly, they make a substantial difference to the atmosphere in which the group has been trying to do its work. We still believe that it is important to try, if it is humanly possible, to promote a peaceful solution to the troubles of southern Africa.
    Several Hon. Members rose—
    Mr. Speaker: Order. I have to take into account subsequent business being under the guillotine. I shall allow questions to continue until 4 o'clock, and then we must move on.
    Mr. Robert Adley: I welcome my right hon. and learned Friend's decision to make a statement today, and I welcome what he said. Will he please note that his description of state terrorism as perpetrated by the South Africans seems to be a more accurate use of such a phrase than on other occasions on which it has been used recently by Her Majesty's Government? Will my right hon. and learned Friend confirm that the South Africans have put themselves in exactly the same position as the Soviet Union in Afghanistan, the Vietnamese in Kampuchia and the Israelis in the Lebanon, Jordan, Egypt and Syria, in that they have deliberately invaded and occupied a neighbouring country because they do not like the nature of the regime there?
    Sir Geoffrey Howe: I have made plain our condemnation of the action. I urge my hon. Friend not to press his analogies too far, because what is plainly different is that incursions have taken place into three countries, but no attempt at occupation has been made. That is totally different from my hon. Friend's examples.
    Mr. Ted Leadbitter: The Secretary of State has said several times that he has condemned the action. The interesting question to put to him now is

    25
    simply this: if that is all that he is to do, what impact will that condemnation have on President Botha, and what impression will that condemnation, without any other action, have upon the Commonwealth countries affected?
    Sir Geoffrey Howe: If that were all that happened, the hon. Gentleman's question might have some sense in it. We are speaking less than 12 hours after the incident took place. I have already made it plain that we shall have to assess the situation carefully—not only on our own—with a view to deciding whether any further action is appropriate.
    Mr. John Stokes: Is my right hon. and learned Friend aware that Government Members understand the difficulties, particularly in view of our membership of the Commonwealth, but how long are this Government and country planning to behave towards South Africa as if we were a sort of nanny? Surely that independent nation should pursue its own salvation in its own way? Pious protests from us might be counter-productive.
    Sir Geoffrey Howe: There is no question of our proceeding as a "sort of nanny". We have important political and economic relations with South Africa, and a large number of British citizens are resident there. We have had historic connections over many years and a profound interest in the prospects of peace in southern Africa. For those reasons, we rightly interest ourselves in the future of that country.
    Mrs. Gwyneth Dunwoody: Is the Foreign Secretary not aware that this violent and brutal attack when the Commonwealth group of personages are in South Africa is no accident but is a deliberate policy of destabilisation? Those of us who saw the brutal attacks on people who had nothing to do with politics and the murder of a six-year-old in the street know exactly the degree of savagery of which the South Africans are capable. The right hon. and learned Gentleman must do more than talk.
    Sir Geoffrey Howe: I understand the hon. Lady's concern. We are all totally affronted and shocked by violence and savagery, in whatever form. For that reason, we have consistently called for a way forward in South Africa in the context of a suspension of violence on all sides. For that reason also, I have already made plain the extent to which we deplore the fact that the action took place while the Commonwealth group was in South Africa.
    Mr. John Browne: Does my right hon. and learned Friend accept that the ANC is heavily infiltrated by Soviet Marxist forces, which are anti-democratic, and are fulfilling a role of world terror? The raids emphasise only too clearly that the chances of a peaceful solution in South Africa are fast running out. Does my right hon. and learned Friend accept that the chances of a peaceful solution are based on power sharing that will protect minorities, and that such a solution has been adopted in the past by Switzerland, where the power is based on cantons? Does he believe that such a solution is applicable to South Africa? If so, will he agree to push for one?
    Sir Geoffrey Howe: Despite our close interest in the future of South Africa, we have, I think rightly, refrained from seeking to offer detailed prescriptions for the constitutional future of that country.
    Mr. Andrew Faulds: The right hon. and learned Gentleman has obviously heard of Libya, because he agreed to this country's bases being used in an attack on that country. Does the right hon. and learned Gentleman realise that had the British Government attempted to say no, Reagan would have gone ahead in any case?
    When will he stop trying to differentiate between state terrorism, whether launched by South Africa. Israel or America, in countries such as Libya and against a possible foe such as Nicaragua?
    Sir Geoffrey Howe: I can understand how anyone might be tempted to draw parallels and comparisons within the wide number of examples cited by the hon. Gentleman. It is not possible to lump them together in one general categorisation.
    Mr. Harry Greenway: Will my right hon. and learned Friend draw the attention of advocates of sanctions to the experience of the Wilson Government in the late 1960s, when they tried to impose sanctions against Rhodesia and failed completely, especially in respect of oil?
    Sir Geoffrey Howe: That is one of the reasons why our view of sanctions has always been as we have expressed it many times.
    Mr. David Young: Will the Secretary of State take on board the fact that, in the eyes of the world, we are on trial? The Commonwealth is looking at us to see to what degree we put words in place of action. The terrorists in South Africa, who are nothing but a lot of terrorist wolves, recognise a dead sheep when they see one.
    Sir Geoffrey Howe: I cannot accept the absurd proposition with which the hon. Gentleman started his question.
    Mr. Tom Sackville: Does my right hon. and learned Friend agree that the South Africans would be better advised to try to learn something from the remarkable reconciliation and co-existence between blacks and whites in Zimbabwe than to try to disrupt the whole region through such an attack?
    Sir Geoffrey Howe: My hon. Friend has made an entirely valid point.
    Mr. Tony Banks: As the Government in Harare have made it clear that Zimbabwe is not being used for attacks on South Africa, is the Secretary of State prepared to accept any requests from the Government of Zimbabwe, or of any Commonwealth country to erect British anti-aircraft missile systems around the capital cities? Is the right hon. and learned Gentleman prepared to send British military advisers to those countries to safeguard territorial integrity?
    Sir Geoffrey Howe: The points raised by the hon. Gentleman went a good deal further than the conclusions that we have drawn from our discussions.
    Mr. Tony Marlow: Will my right hon. and learned Friend expand on his answer to our hon. Friend the Member for Christchurch (Mr Adley) concerning the fact that the operation today is a lesser evil than the Israeli incursion into Lebanon? When my right hon. and learned Friend considers what action to take—

    27
    if he considers taking action—will he bear in mind the action that was taken in respect of the Israeli invasion of Lebanon?
    Sir Geoffrey Howe: I can understand why my hon. Friend attempted to draw every kind of parallel. It is not easy to deal with the matter in any sensible fashion at this length. The fact is that the Israeli invasion of Lebanon involved both an invasion and an occupation of Lebanon. That is to be distinguished from the incidents taking place today, however deplorable they may be.
    Mr. Martin Flannery: Does the right hon. and learned Gentleman agree that, to defend an indefensible regime, the South African Government are now thrashing round wildly in a way which is utterly unaceptable to the civilised world and which, I hope, is unacceptable to us, although it has massive backing on the Conservative Benches, as has been shown clearly today? Will he realise that platitudes give aid and comfort to the Pretoria Government, and that only when some action such as sanctions is taken, and only when the right hon. and learned Gentleman gets President Reagan to do something rather than helping UNITA, will South Africa be stopped from bombing places around them, bombing Angola and occupying Namibia, contrary to the wishes of the United Nations?
    Sir Geoffrey Howe: I have already made clear our view that these actions are a plain violation of the sovereignty of neighbouring countries and that they are especially deplorable in these circumstances. We shall have to consider what further action may be necessary. I am not prepared, however, to endorse the proposition offered by the hon. Gentleman and to align any of my hon. Friends with support for the apartheid regime, which is condemned and deplored on both sides of the House.
    Mr. Nicholas Fairbairn: Assuming that the attacks had not been against these
    28
    military camps, but from them and against South Africa, would my right hon. and learned Friend have made a statement, and, if so, what would it have been?
    Sir Geoffrey Howe: I am not able to follow my hon. and learned Friend's reference to attacks from and against South Africa. It seems to me to be a confusion of thought.
    Mr. Tam Dalyell: Will the Foreign Secretary reconsider his answer to my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees)? He said that Libya was as different from South Africa as chalk is from cheese. Is it not a fact that the Federal police in Germany—the Bundeskriminalamt—has said that it has found no connection whatever between the pretext for the bomb in Berlin and the Libyan connection and that Herr Lochte in Hamburg, the head of the Verfassungschutz who is in a position to know, has said that he—
    Mr. Speaker: Order. The hon. Gentleman's question must be related to South Africa.
    Mr. Dalyell: It is related to a statement by the Foreign Secretary which is just not true. He said—
    Mr. Speaker: Order. I have given the hon. Gentleman a good chance. He must get his question in order.
    Mr. Dalyell: The Foreign Secretary should not be allowed to get away with things that are factually inaccurate when answering my right hon. Friend the Member for Morley and Leeds, South. The fact is that a man who is in a position to know in the Verfassungschutz has said that he excludes any connection. It is intolerable that the Foreign Secretary should come to the House and by sleight of hand make statements for which there is no factual backing.
    Mr. Speaker: Order. I think that we have heard enough for the Foreign Secretary to make a brief reply if he wishes.
    Sir Geoffrey Howe: I do not.

    Social Security Bill (Allocation of Time)
    Ordered,
    That the Reports [6th and 15th May] of the Business Committee he now considered. —[Mr. Lennox-Boyd.]
    Report considered accordingly.
    Question, That this House doth agree with the Committee in its resolutions, put forthwith, pursuant to Standing Order No. 45 (Business Committee) and agreed to
    Following are the reports of the Business Committee:
    That—

    (1) The order in which proceedings on consideration are taken shall be New Clauses, amendments to Clauses Nos. 1 and 2, Schedule No. 1, Clauses Nos 3 to 6, Schedule No. 2, Clauses Nos. 7 to 36, Schedule No. 3, Clauses Nos. 37 to 46, Schedule No. 4, Clauses Nos. 47 to 49, Schedule No. 5, Clauses Nos. 50 to 63, Schedule No. 6, Clauses Nos. 64 to 68, Schedule No. 7, Clauses Nos. 69 to 73, Schedule No. 8, Clauses Nos. 74 to 77, Schedules Nos. 9 and 10, Clauses Nos. 78 to 81 and New Schedules.

    (2) The allotted days which under the Order [15th April) are given to the proceedings on consideration and Third Reading shall be allotted in the manner shown in the Table set out below and, subject to the provisions of that Order, each part of the proceedings shall be brought to a conclusion at the time specified in the third column of that Table.

    TABLE

    Allotted day

    Proceedings

    Time for conclusion of proceedings

    First day

    Consideration

    Midnight

    Second day

    Consideration

    8 pm

    Third Reading

    10 pm

    That the Resolution of the Committee reported to the House on 6th May be varied by substituting the following provisions for those in the Table at the end of that Resolution:—

    TABLE

    Allotted day

    Proceedings

    Time for conclusion of proceedings

    First day

    New Clauses

    7 pm

    Amendment up to the end of Clause 18

    9 pm

    Amendments up to the end of Clause 21

    10.30 pm

    Amendments up to the end of Clause 27

    Midnight

    Second Day

    Amendments up to the end of Clause 33

    6 pm

    Amendments up to the end of Clause 42

    7 pm

    Remaining proceedings on consideration

    8 pm

    Third Reading

    10 pm

  Orders of the Day

    Social Security Bill
    [IST ALLOTTED DAY]
    As amended (in the Standing Committee), considered.
    4.5 pm
    Mrs. Margaret Beckett: On a point of order, Mr. Speaker. I am not sure whether this is the right time to raise this matter, but I am sure that you will tell me if it is not.
    Since the Business Committee met to consider the order in which the Bill would be debated and the way in which it would be taken, there have been two important developments. First, the Government have tabled a new clause which reschedules a debate which would have come tomorrow. Secondly, the Government have made an important announcement, of which we had no warning, which makes a difference to the length of a debate which might otherwise have been proposed and possibly accepted. I wonder whether there is any possibility of the Business Committee reconvening to consider the order — I refer to its doing so much later tonight, not immediately.
    Mr. Speaker: It might have been a little easier for me if the hon. Lady had raised her point of order before I had put the Question on the motion. I shall look carefully at my selection tomorrow, hopefully to meet the hon. Lady's point. Will that help?
    Mrs. Beckett: I am not sure that it will unless starred amendments are taken. I apologise. I had intended to raise the matter earlier, but we were discussing at what point to raise the matter when you put the Question on the motion. I apologise. That was my fault.
    Mr. Speaker: I shall look carefully at any starred amendments tomorrow and I hope that that will help the House.
    Mr. Archy Kirkwood: On a point of order, Mr. Speaker. The Clerks have laboured hard and honourably, but my name has slipped to the tail of amendment No. 60 and I wonder whether, for the avoidance of doubt, it could be removed in due course.
    Mr. Speaker: I shall ensure that it is.

    Social Security Bill

      New Clause 20
      ACTUARIAL TABLES
      '(1) Regulations prescribing actuarial tables for the purposes of any of the provisions to which this section applies—

      (a) shall be made only after consultation with the Government Actuary; and

      (b) shall not be made unless a draft of them has been laid before Parliament and approved by a resolution of each House.

      (2) This section applies—

      (a) to sections 44, 44ZA, 44A and 45 of the Social Security Pensions Act 1975; and

      (b) to section 5 above.

      (3) The tables—

      (a) shall embody whatever appears to the Secretary of State to be the best practical estimate of the average cost, expressed in actuarial terms and relative to a

      31
      given period, of making such provision as is mentioned in section 44(5)(a) or (b), 44ZA(11)(b), 44A(3) or 45(2) of the Social Security Pensions Act 1975 or in section 5(12)(b) above, as the case may be; and

      (b) shall assume for any period an average yield on investments which is not less than the average increase during that period in the general level of earnings obtaining in Great Britain,

      but the regulations may provide for them to be adjusted according to whatever is from time to time the actual yield on prescribed investments or the average yield, as shown in prescribed published indices, on prescribed classes of investments.
      (4) The Secretary of State may from time to time, and shall when required by subsection (6) below, lay before each House of Parliament—

      (a) a report by the Government Actuary on any changes in the factors affecting any of the actuarial tables prescribed for the purposes of any of the provisions to which this section applies; and

      (b) a report by the Secretary of State stating whether he considers that the regulations ought to be altered in view of the Government Actuary's report and, if so, what alterations he proposes.

      (5) The changes referred to in subsection (4)(a) above are, in the case of the first report under that paragraph, changes since the last report under section 46(3)(a) of the Social Security Pensions Act 1975 and, in the case of a subsequent report under this section, changes since the preparation of the last such report.
      (6) The Secretary of State shall lay the first report under this section not later than 6th April 1987 and subsequent reports at intervals of not more than five years.
      (7) If in a report under this section the Secretary of State proposes alterations in the regulations, he shall prepare and lay before each House of Parliament with the report draft regulations giving effect to the regulations and to be in force—

      (a) from the beginning of such tax year as may be specified in the regulations not earlier than the second tax year after that in which the regulations are made; or

      (b) where it appears to him to be expedient for reasons of urgency, an earlier date not earlier than the date on which the regulations are made.

      (8) If the draft regulations are approved by resolution of each House, the Secretary of State shall make the regulations in the form of the draft.' [Mr Major.]
      Brought up, and read the First time.
      The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to take Government amendments Nos. 18, 34, 117 and 133.
      Mr. Major: I hope and believe that we can commence the Report stage on a non-contentious note in regard to policy.
      There are circumstances in which it is desirable for premiums to be paid to the state effectively to buy people back into the state earnings-related pension scheme as if they had never been contracted out. That would happen, for example, when schemes ended, and the provision is wholly beneficial.
      The cost of the premium is calculated by using actuarial tables that are prescribed under section 46 of the Social Security Pensions Act 1975. The new clause replaces section 46. All the provisions concerned refer to the cost of providing a guaranteed minimum pension. The actuarial tables include adjustments that are aimed at ensuring that schemes make neither a profit nor a loss as a result of changes in market yields on investments over the period of employment. The new clause reflects that more explicitly, as set out in subsection (3). It also eliminates the need to produce two sets of tables for each type of
      32
      premium, which was required by the previous wording. It also allows the regulations to be made at a time other than the quinquennial review of the contracted out rebate, although I reassure the House that the quinquennial review will continue.
      The new clause deals with existing premiums and those proposed in clause 5 and schedule 2 for protected rights premiums. The amendments in this group are consequential repeals and deletions and lead to what should be a simplification and improvement of present provisions.
      Mr. Michael Stern: I am grateful to my hon. Friend for his explanation of the new
      clause.
      The actuarial profession has featured increasingly frequently in debates on social security legislation, and it has been put to me by a few members of that profession that they are beginning to feel somewhat over-regulated.
      I wonder whether my hon. Friend would care at some stage to bring together all the provisions in the Social Security Act 1985 and its accompanying regulations, and what will be the Social Security Act 1986 and its accompanying regulations, which will be published in the next few years, to show the extent to which he is attempting to vary standard practice in the profession.
      Mr. Major: My hon. Friend has raised a detailed, technical and interesting point. I understand the observations that he has made on behalf of the actuarial profession. I cannot give him a commitment to respond as he requests, but we will consider the matter carefully.
      Mrs. Beckett: We appreciate the Government's deciding to pursue this course, and especially the proposal that the draft order should be laid before the House. That will give us more of an opportunity to scrutinise what is proposed.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

      New Clause 21
      CROWN EMPLOYMENT
      '(1) A person who is employed by or under the Crown shall be treated as an employed earner for the purposes of sections 1 to 15 above.
      (2) A person who is serving as a member of Her Majesty's forces shall, while he is so serving, be treated for the purposes of sections 1 to 15 above as an employed earner in respect of his membership of those forces.
      (3) The provisions of this Act relating to family credit apply in relation to persons employed by or under the Crown as they apply in relation to persons employed otherwise than by or under the Crown.
      (4) Subject to subsection (5) below, the provisions of Part V of this Act apply in relation to persons employed by or under the Crown as they apply in relation to persons employed otherwise than by or under the Crown.
      (5) The provisions of that Part of this Act do not apply in relation to persons serving as members of Her Majesty's forces, in their capacity as such.
      (6) For the purposes of this section Her Majesty's forces shall he taken to consist of such establishments and organisations as may be prescribed, being establishments and organisations in which persons serve under the control of the Defence Council.'. [Mr. Major.]
      Brought up, and read the First time.
      Mr. Major: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to consider the following:

      33
      Government new clause 22—Application of Parts I and V to special cases.
      Government amendment No. 56.
      Mr. Major: Amendment No. 56 deletes the present clause 16 and enables it to be replaced by clauses 21 and 22 respectively. Clause 16 dealt with Crown employment and requires replacement following changes to the Bill made in Committee. In particular the introduction of statutory maternity pay in part V of the Bill meant that we were faced with either having a second clause dealing with Crown employment or, alternatively, removing the existing provision in clause 16 and introducing a new provision. We have chosen to do the latter as the neater way of achieving our aim. That is the substance of this grouping.
      As the House will know, it is normal in social security legislation to apply to Crown employees and members of Her Majesty's forces only those provisions that affect them through their contracts of service where that would be in their best interests. Where it is more advantageous for them to be excluded from the general arrangements that is also generally and traditionally done. For this Bill we are sure that it is right that these groups should be able to participate in the new personal pension scheme arrangements and also in family credit. Consequently, subsections 1 to 3 of the new clause will make that possible.
      I should say, in order to eliminate questions, that income support in this regard is not relevant since members of the forces are in full-time employment and special arrangements will exist for rental assistance for service men and women in Crown property. Therefore, housing benefit is also excluded. The special assistance is broadly similar to rent allowances.
      Statutory maternity pay is also excluded. For many years it has been the arrangement that members of Her Majesty's forces are excluded from sickness benefit and, in more recent years, from statutory sick pay as well as maternity allowance. There is nothing malign or difficult about this proposition. It is because there are alternative arrangements made for them which are far more convenient for all concerned. It is for that reason only that we have decide to excluded members of Her Majesty's forces from statutory maternity pay and to continue their exclusion from maternity allowance. Subsections (4) and (5) of new clause 21 effectively include Crown employees for these benefits but excludes members of Her Majesty's forces.
      New clause 22 gives the Secretary of State powers to make regulations to modify the pension provisions of part I and statutory maternity pay so as to make them suitable for mariners, airmen, people outside Great Britain and workers on oil rigs. In seeking the powers, the Government are simply ensuring that regulations can be made, if necessary, to iron out any awkwardness that might arise in adapting the personal pensions and maternity pay proposals for those people who are not employed in conventional jobs on mainland Britain. It repeats the provision which was formerly in clause 16 of the Bill for pensions purposes and it follows the wording of section 22 of the Social Security and Housing Benefits Act 1982, which made the same provision for statutory sick pay.
      I should emphasise again that there is no special reference to income-related benefits in new clause 22
      34
      since, whatever special protection may be necessary, can be made under other powers in the Bill. The new clauses do not enter any fresh note of contention into our proceedings and I commend them to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

      New Clause 22
      APPLICATION OF PARTS I AND V TO SPECIAL CASES
      '(1) Regulations may modify Parts I and V of this Act, in such mariner as the Secretary of State thinks proper, in application to any person who is, has been, or is to be—

      (a) employed on board any ship, vessel, hovercraft or aircraft;

      (b) outside Great Britain at any prescribed time or in any prescribed circumstances; or

      (c) in prescribed employment in connection with continental shelf operations.

      (2) Regulations under subsection (1) above may in particular provide—

      (a) for any provision of either of those Parts of this Act to apply to any such person, notwithstanding that it would not otherwise apply;

      (b) for any such provision not to apply to any such person. notwithstanding that it would otherwise apply,

      (c) for excepting any such person from the application of any such provision where he neither is domiciled nor has a place of residence in any part of Great Britain;

      (d) for the taking of evidence, for the purposes of the determination of arty question arising under any such provision, in a country or territory outside Great Britain, by a British consular official or such other person as may be determined.

      (3) In this section `continental shelf operations" means any activities which, if paragraphs (a) and (d) of subsection (6) of section 23 of the Oil and Gas (Enterprise) Act 1982 (application of civil law to certain off-shore activities) were omitted would nevertheless fall within subsection (2) of that section.'. —[Mr. Major.]
      Brought up, read the First and Second time, and added to the Bill.

      New Clause 29
      EARNINGS FACTORS
      'The Social Security Act 1975 and the Social Security (Miscellaneous Provisions) Act 1977 shall be amended in accordance with Schedule (Earnings factors) to this Act in relation to earnings factors.'. —[Mr. Major.]
      Brought up, and read the First time.
      4.15 pm
      Mr. Major: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to take Government amendments Nos. 144 to 148 and Government amendment 143.
      Mr. Major: New clause 29 is a fiendishly complex provision for which the hon. Member for Derby, South (Mrs. Beckett) can take part of the blame or credit, according to her own inclination. The hon. Lady teased my hon. Friend the Minister for Social Security in Committee with the complexity of the provisions that had to be introduced last year following the 1985 Budget changes in national insurance contributions. I could understand why she did so and, I recall, she did so rather effectively. She will be glad to know that we are now introducing new clause 29 and its accompanying schedule,

      35
      which will greatly simplify the position. Let no one, least of all the hon. Lady, doubt that we are a listening Government in this respect.
      At present, both flat rate and earnings-related benefit depend on an individual's earnings in any one year on which national insurance contributions are payable. However, the legislation is cast in terms of contributions and that is what employers and the Department of Health and Social Security computers record. To make the link between contributions and earnings, the Social Security Act 1975 and the Social Security Pensions Act 1975 use a device called earnings factors as a multiplier to derive from contributions paid a figure approximating to the earnings on which they were payable. The earnings factors then become the buildings blocks of benefit entitlement. The House may well think that this is a tortuous way round, and I agree. However, that is what the legislation at present does.
      The introduction in the 1985 Budget of lower rate contribution bands without any alteration in benefit entitlement did, as the hon. Member for Derby, South (Mrs. Beckett) intimated in Committee, throw considerable complexity in what was already complicated machinery. Because differential rates of contribution are paid for those with different levels of earnings the value of contributions now gives no exact indication of the earnings to which they relate and hence, the amount of benefit entitlement. Without modification that would have meant that people with lower earnings, whom the national insurance contribution concessions were intended to help, would lose benefit entitlement.
      To overcome that problem we introduced, as a temporary expedient in 1985, regulations to allow the earnings factors to be boosted. They were rather complex regulations, but they were introduced so that no one would lose out on benefit. That was intended only as a temporary expedient until the primary legislation could be amended. New clause 29 and its schedule now seek to derive earnings factors directly from the earnings on which class 1 contributions are payable and thus avoid the need for the boosting regulations we currently have. Therefore, to that extent only is it a deregulatory measure. I think that it will be generally welcomed in the House, without exception.
      Unfortunately, the House does not have visual aids. Were it to have them I would be able to show an immensely large and complex set of regulations which we hope, in due course, will no longer be needed. Social security legislation tends to complexity, if not opacity, too. Regulations expressed entirely in algebraic formulae do nothing to make the law understandable to those affected by it or those administering it, with the possible exception of my hon. Friend the Member for Bristol, North-West (Mr. Stern) who showed a remarkable facility for such regulations in Committee. This amendment will remove the need for the artificial boosting arrangements and will enable earnings factors to be calculated more simply. Contributors will still have the advantage of lower rate contributions if they have low earnings, and their earnings-related benefit will link directly to their earnings, as was the case before last year's budget changes.
      Therefore, this new clause enshrines the beneficial effect of the reduced rates of national insurance contributions. I hope that the House will agree that this is a sensible amendment which ties up the loose ends left
      36
      over from the 1985 contribution changes. It is a change which we would have included in last year's Social Security Act, if there had been sufficient time to sort out the details of this rather lengthy amendment, which would simplify life for employers and for the DHSS. Moreover, it will reintroduce precision into the calculation of earnings factors. The present boosting regulations are, for all their complexity, clumsy and are no more than a stop-gap. They were never believed to be more than that. Beneficiaries will continue to receive the benefit to which their contributions properly entitle them. Therefore, I commend the new clause to the House together with amendments Nos. 143 to 148 inclusive, which are technical, and consequential.
      Mrs. Beckett: The Minister suggested that the existence of this new clause shows that this is a listening Government. It appears to me that its necessity shows the danger of listening to the Treasury, since it was clearly the Department's inability to convince the Treasury of the problems which might arise from the way in which the national insurance contributions were hastily shoved into last year's Bill which has led to the problem. However, we are glad to see it resolved to a degree at least, especially if it makes regulations less complex.
      Mr. Stern: Echoing the comments of the hon. Member for Derby, South (Mrs. Beckett), one is delighted to hear that this is a listening Government. However, from my hon. Friend the Minister's introduction to the clause I would suggest that the Government do not always listen to their own Department.
      The Inland Revenue is currently carrying out a review of the complex area of the extent to which benefits should be included in earnings for national insurance purposes. The results of the review are not expected for some months, if not longer. I entirely welcome the intention of my hon. Friend the Minister in the new clause, not only to simplify the present complex regulations, but to bring the simplification in from April 1987, but I wonder whether he is underestimating the complexity that already exists, and the extent to which any regulations introduced at this stage in connection with earnings will be outdated in the near future by Inland Revenue practice. I commend my hon. Friend's effort, but I wonder whether it is not a little premature.
      Mr. Roger Freeman: I concur with my hon. Friend the Member for Bristol, North-West (Mr. Stern) in his comment about the complexity of the regulations. I did not have the honour to serve on the Standing Committee that examined the Bill, much to my regret, but surely my hon. Friend's general point is right, that for the ordinary member of a pension fund—either a member of an occupational pension fund, or an employee who merely has the benefit of having made national insurance contributions enabling him to receive the basic state pension or the earnings-related state pension — the calculation of some of those figures is almost beyond comprehension.
      I should like to make a suggestion to the Minister, because it is difficult to explain complicated issues such as those in new clause 29 in relation to the calculation of earnings factors. We expect literature from the Government about the specific provisions for portable pensions, which are greatly to be welcomed, and which the House has already dealt with in two earlier new clauses.

      37
      I urge the Government, particularly the Department of Health and Social Security, to be extremely clear and brief in the publications and advice offered not only to employers, who have the responsibility for making many of the calculations involved, including those entailed in new clause 29, but to employees, such as those in occupational pension schemes.
      Those employees will shortly be faced with the important decision about whether to opt out of or join an occupational pension scheme, and will want to know exactly how they will be affected by the calculation of the guaranteed minimum pension, for example. The effective date for the 2 per cent. incentive payment that is to be made to those who establish their own personal pensions has already been reached—the scheme has run from 1 January this year. Therefore, important decisions will have to be taken, and it is important that all Government documents and advice given by the DHSS and Ministers to employers and employees is crystal clear.
      Mr. Stern: I should like to reinforce my hon. Friend's point. From his accountancy background, which he shares with me, does he agree that the definition of "earnings" has exercised the courts for about 100 years, and that it is generally acknowledged that no satisfactory definition yet exists? In the light of that, does he agree that, given that we are now importing the same difficulty into social security regulations as already exists in taxation law, we are stepping into a minefield in which we need to go extremely carefully?
      Mr. Freeman: My hon. Friend is absolutely right. With respect to my colleagues, I find that few understand the basis of calculation of the guaranteed minimum pension. Earlier this afternoon we debated the effect on the actuarial profession, which is being consulted not only about the actuarial tables involved in an earlier new clause, but about other provisions, for example, the precise requirements to be laid upon the trustees of occupational pension funds in calculating transfer values. Those actuarial calculations are extremely complex. I am sure that my hon. Friend will agree that we should pay tribute to the actuarial profession for its contribution so far to the deliberations not only on the Bill but on some of the proposed regulations to be issued under it.
      I support my hon. Friend the Member for Bristol, North-West in his main point, about the documents to be issued by the Government later this year in relation to the calculation of earnings factor and also the advantages and disadvantages of personal pensions. I hope that the regulations and explanatory documents will be as clear as I know the Government can make them. This will be an important decision for many people. I hope that the Government will take that point on board.
      Mr. Major: I entirely understand the blandishments of my hon. Friend the Member for Kettering (Mr. Freeman), and will consider them. I agree that seeking to provide simplicity in Government communications is necessary and throughly desirable, particularly in complex areas. We have engaged consultants to advise on a whole range of communications, including pensions. I should like to précis their brief in a single word—simplicity. I hope that that thought will commend itself to my hon. Friends the Members for Kettering and for Bristol, North-West
      38
      (Mr. Stern). We entirely understand what underpins their remarks, and we shall attempt to meet them as far as we can.
      Employers will not be involved in calculations under new clause 29. They will merely have to record the amount of earnings on which contributions have been paid. It will not affect personal pensions. The definition of "earnings", to which my hon. Friend the Member for Kettering referred, will be the definition that is already used for contributions.
      My hon. Friend the Member for Bristol, North-West, referred to the Inland Revenue review. He may have misread the intent of the regulations, as I am advised that they will not be affected by the review that is now being carried out by the Inland Revenue. Here, we enter an extremely arcane area. It might be most appropriate if I were to write and set out to my hon. Friend precisely why we believe that the Inland Revenue review will not be germane to the regulations.
      Mr. Stern: I am grateful to my hon. Friend for his comments and his offer, but his comments are a little surprising. I shall await his letter with greater interest given that I think that the Inland Revenue review strikes at the heart of what my hon. Friend is trying to do. The review is trying to determine which earnings, in the form of non-cash earnings, should or should not rank for national insurance contributions. Given that we are discussing earnings factors that will be based on the earnings that rank for contributions, I am surprised to learn from my hon. Friend that the review is not germane, but I shall await his letter with great interest.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

      New Clause 30
      REVIEWS
      '(1) A social fund officer—

      (a) shall review a determination made under this Part of this Act by himself or some other social fund officer, if an application for a review is made to him within such time and in suet form and manner as may be prescribed by or on behalf of the person who applied for the social fund payment to which the determination relates; and

      (b) may review such a determination in such other circumstances as he thinks fit;

      and may exercise on a review any power exercisable by an officer under section 33 above.
      (2) The power to review a determination conferred on a social fund officer by subsection (1) above includes power to review a determination made by a social fund officer on a previous review.
      (3) On an application made by or on behalf of the person to whom a determination relates within such time and in such form and manner as may be prescribed a determination of a social fund officer which has been reviewed shall be further reviewed by a social fund inspector, and the Secretary of State shall appoint officers to be so called for the purpose of conducting such reviews.
      (4) On a review a social fund inspector shall have the following powers—

      (a) power to confirm the determination made by the social fund officer;

      (b) power to make any determination which a social fund officer could have made;

      (c) power to refer the matter to a social fund officer for determination.

      (5) In determining a question on a review a social fund officer or social fund inspector shall have regard, subject to subsection (6) below, to all the circumstances of the case and, in particular, to the matters specified in section 33(9)(a) to (e) above.
      (6) An officer or inspector shall determine any question on a review in accordance with any general directions issued by the Secretary of State under section 33(10) above and any general directions issued by him with regard to reviews and in determining any such question shall take account of any general guidance issued by him under that subsection or with regard to reviews.
      (7) Directions under this section may specify—

      (a) the circumstances in which a determination is to be reviewed; and

      (b) the manner in which a review is to be conducted: — [Mr. Newton.]

      Brought up, and read the First time.
      The Minister for Social Security (Mr. Antony Newton): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to take the following: Amendment (a) to the proposed new clause, in subsection 1(b) leave out
      "such other circumstances as he thinks fit"
      and insert "prescribed circumstances".
      New clause 15—Appeal against social fund officers' determination—

      `(1) A claimant may appeal against any determination made by a social fund officer under this Part of this Act.

      (2) Any appeal under subsection (1) above shall be to a social security appeal tribunal under the procedure laid down in sections 100, 101 and 104 of the Social Security Act 1975 and section 15 of the Social Security Act 1980, and any reference to "adjudication officer" in those sections shall be construed as including reference to a social fund officer.

      (3) Section 33(12) of this Act shall only be operative insofar as any determinations made under that section comply with the procedure established in subsection (2) above.'.

      New clause 16 — Appeals against housing benefit determination—

      `(1) A person who has claimed housing benefit may appeal against any determination of that claim.

      (2) Any appeal under subsection (1) above shall be to a social security appeal tribunal under the procedure laid down in sections 100, 101 and 104 of the Social Security Act 1975 and section 15 of the Social Security Act 1980, and any reference to "adjudication officer" in those sections shall be construed as including reference to the appropriate authority responsible for administering housing benefit under section 28 of this Act.

      (3) Section 29(3) of this Act shall only be operative insofar as any regulations made under that section comply with the procedure established in subsection (2) above.'.

      New clause 27 — Determinations by Social Fund Officers (Appeals) —

      `(1) The Secretary of State shall make arrangements for appeals against determinations by Social Fund officers to be heard by inspectors acting as his deputies.

      (2) The recommendations of the inspectors (and the final decisions of the Secretary of State, if different) shall be communicated to the appellant in writing.

      (3) The Secretary of State shall present to Parliament an annual report on the operation of the Social Fund and the appeals procedure.'.

      (5)Amendment No. 155, in clause 33, page 40, line 37, after 'shall', insert 'in the last instance'.
      No. 156, in page 40, line 38, at end insert
      `(2A) Sections 100, 101 and 104 of the Social Security Act 1975 relating to a claimant's rights of appeal shall apply to decisions taken by the Social Fund Officers.'.
      No. 158, in clause 49, page 55, line 7, at end insert—
      '(9) Regulations shall provide for a claimant or applicant to have a right of appeal to a social security appeal tribunal constituted under the Social Security Act 1975 against

      (a) any determination or direction (including a determination to refuse to review a determination or direction) of a social fund officer under section 33 of this Act.

      40

      (b) any determination of a local authority (including a determination to refuse to review a determination) relating to housing benefit.'.

      Government Amendment No. 162.
      Amendment No. 80, in clause 33, page 42, line 3, at end add
      'but shall in all cases provide for an appeal to a person independent from the Social Fund Officer who made or refused the award in question'.
      4.30 pm
      Mr. Newton: The new clause deals with the important subject of the review of social fund decisions. It was extensively debated in Committee. It seeks to make a response to the debate in Committee along the lines of my comments in Committee, and taking into account the views of hon. Members on both sides of the Committee.
      It might be sensible if I started by outlining formally the provisions of the new clause. It provides for review by a social fund officer of determinations made under clause 33, either on application or on behalf of the person to whom the determination relates, or when he feels that the circumstances justify that. The clause provides that there can be a further review—this point specifically reflects the anxieties expressed in Committee—by a social fund inspector. It sets out the powers of the social fund inspector and provides that a social fund officer or inspector shall be subject to the directions and guidance issued by the Secretary of State.
      Subsection (1) provides that a social fund officer shall review a determination of an application in the prescribed manner and time by, or on behalf of, the person to whom the determination relates. He can also review a determination if the circumstances justify that. The subsection also provides that when reviewing a case the social fund officer continues to exercise his usual powers under clause 33.
      With regard to the use of the regulation-making power, it is intended that, as the regulations provide for adjudication of weekly social security benefits, the regulations will set out time limits within which an application may be made, and details such as the application being made in writing.
      Subsection (2) provides that the ability to review a determination applies also to one that has already been reviewed. Subsection (3) provides that when a determination has been reviewed by a social fund officer, if a further application is made within the prescribed manner and time, it will be further reviewed by a social fund inspector. These inspectors will be appointed under the subsection. The use of the regulation-making powers will be in line with that which I have already described under subsection (1).
      Subsection (4) describes the powers of a social fund inspector. These state that he can confirm the determination, make a determination which a social fund officer might have made, or refer the matter to a social fund officer to determine. Subsection (5) provides that, subject to the following subsection, social fund officers and inspectors, when reviewing a determination, shall have regard to all the circumstances of a case and specifically to the matters referred to in subsection (9) of clause 33.
      Subsection (6) provides that social fund officers and inspectors shall be subject to general directions and guidance issued by the Secretary of State under subsection (10) of clause 33. These can include specific guidance and

      41
      directions on reviews. Subsection (7) provides that the Secretary of State can issue directions on the circumstances in which cases are to be reviewed and on the procedures of review.
      In an attempt to save time, I should like briefly to refer to Government amendment No. 162, which is part of the group of amendments that we are discussing. The amendment seeks out to leave out subsection (12) of clause 33. It is consequential on the proposition of the new clause and leaves out from clause 33 the previous provision which enables the Secretary of State to issue directions on the procedure as to how a review shall be conducted. That provision has been overtaken by the tabling of the extensive new clause.
      Mr. David Winnick: Will the Minister tell the House where the social fund officer will be based? Will he be based in the office where the original decision was made, or will that have been taken at regional level? Will the Minister also say where the inspectors will be based? However inadequate the Opposition consider the review to be, what rights will the person making the appeal—if it can he described as such—possess? Will he be able to appear in person before the social fund officer, or will he be represented?
      Mr. Newton: I shall come to some of the points which the hon. Gentleman has raised in my description of the provisions of the proposed new clause.
      Before technically describing the clause, I said at the outset that the procedure under which a person unhappy with the decision of a social fund officer can seek a review was the subject of considerable discussion in Committee. I shall not rehearse now the arguments that were expressed in Committee on that subject, although I accept that I may need to do that as the debate progresses. The arguments in Committee led us to the conclusion that the adjudication machinery appropriate to a regulated system of benefit, and specifically appropriate to the regulated system of weekly rates of benefit, was not appropriate for the essentially discretionary decision-making machinery that we have proposed for the social fund.
      It has always been our intention—I hope that this was clear in Committee—that there should be clear and proper rights for those who felt that the decision by a social fund officer in respect of possible payments by way of grant or loan under the social fund was wrong to have that decision properly reviewed and re-examined. One clearly significant point which gives greater emphasis to that in the new clause is that the clause confirms a clear statutory right for the claimant to require the social fund officer to review the decision if application is made. We would intend to set out in regulations the procedures for that right to be exercised.
      We have considered the fact that the procedure for review must reflect the specific nature of the social fund and the fact that it is not based on a set of regulations. We believe that the review procedures should be within the same general framework as the fund and operate consistently with the way in which the original decision was taken. We therefore suggest that the logical procedure for review—this covers one of the points raised by the hon. Member for Walsall, North (Mr. Winnick) —should initially be at the local office level at which the original decision was taken. This has the advantage, which is part of the advantage that we see for the social fund
      42
      mechanism as a whole, that the review will he close to the point of the decision and the person undertaking the review will himself or herself be aware of the local circumstances and the considerations affecting the social fund in the office where the decision was taken. There will therefore be a greater chance of a quick and flexible response.
      Under the new clause we propose that the review at the local level should still be the first mechanism for the review of decisions. As I said in Committee, at greater length than I intend to repeat this afternoon, that will do no more than build on the procedure that already exists in relation to nearly all social security decisions. If a query is raised, the first step is normally for the person who took the decision or someone senior to that person in the local office, or possibly both these people, to take a further look at that decision. In other words, when an appeal is lodged within the system, the first step is that the decision is re-examined.
      In the case of single payments, under the present system twice as many appeals have their decisions revised at that stage without ever reaching the formal appeal machinery. They are reviewed when the appeal comes in. Twice as many decisions are revised at that stage as are successful if they go on to be heard by an appeal tribunal. In practice, many decisions are reviewed as a result of an appeal being entered and never go to appeal. We would envisage that that would be part and parcel of the process. There should be an initial review at the same level as is the case for social security decisions.
      Mrs. Elaine Kellett-Bowman: If, at the end of a financial year, when the fund is perhaps almost exhausted, will there be any danger that an officer will be reviewing cases with one eye over his shoulder, so to speak, to see whether there is any money in the kitty?
      Mr. Newton: My hon. Friend raises a legitimate point, but it concerns the different and somewhat wider question of the budgeting arrangements. We have made it clear that in drawing up the budget proposals for the social fund our aim, particularly in the early stages, will be to proceed with flexibility. We expect to have arrangements for reserves at various levels rather than a completely rigid allocation down to every level of the system ab initio. It is to that point, rather than to the reviews, that my hon. Friend's remarks are directed. I acknowledge the importance of the point that she raised, but it is slightly aside from the review process that we are specifically discussing.
      Mr. Seamus Mallon: I take the Minister's point about the number of cases that are reviewed before the rates tribunal; but does he accept that. by and large, such reviews are carried out as a result of representations made by outside agencies — such as citizens advice bureaux, politicians who are doing their job properly or trade unions—and that such an independent element will not be involved if the new clause is agreed to?
      Mr. Newton: I am not absolutely sure that I understand the hon. Gentleman's point. I accept that questions about social security benefit decisions are raised by a variety of people. Sometimes they are raised by the claimants themselves, sometimes by the claimants with advice from a wide variety of people, and sometimes by others on behalf of the claimant—be it citizens advice bureaux,

      43
      Members of Parliament, local councillors or a variety of others, including social workers, probation officers and so on who, in one way or another, come into contact with the claimant.
      There is no suggestion that timplow system will be different in that respect. It will still be open to a wide variety of people to raise questions about a decision, and in our expectation the response of the local office will be precisely the same as under the present system. In other words, if questions are raised, the first stage is to take another look at the decision that has been made.
      Mr. Andrew Bowden: Will my hon. Friend confirm that, if a request for review is unsuccessful, the applicant will get a written report explaining why the application was not successful? If such an applicant took his case to a Member of Parliament, who then took it to a Minister, would that Minister agree to review it at that stage?
      Mr. Newton: My hon. Friend brings me to the next points that I wish to raise. I have described what normally happens in social security decision-making and the extent to which decisions are reviewed as a result of an application to appeal. That is an important part of understanding the problem that we face as well as the working of the system.
      I was about to say that we have listened carefully to the arguments that have been put during the continuing consultation since the publication of the White Paper and the Bill. Not least, we listened to what was said by hon. Members on both sides of the Committee about the fact that, alongside the process of review—including formal review by a senior officer within the local office—there had to be some clearly established machinery that was separate from and outside the normal management chain of the administration of the social security system. In other words, it was argued that, whether or not the process of review within a local office was satisfactory, there should be a more clearly distinct mechanism for review to provide the kind of confidence that hon. Members felt was necessary to show that an element of independence was being applied.
      As I said in Committee, we were impressed by the constructive way in which a number of hon. Members on both sides—not least my hon. Friend the Member for Halifax (Mr. Galley) and others—tabled an amendment calling for the establishment of a group of social fund inspectors who would be independent of ordinary line management, in order to bring this additional element of independence to the review of social fund decisions.
      4.45 pm
      Essentially that is what we have sought to provide in the new clause. We have provided for a further review by this body of social fund inspectors. They will be officials of the Department, and the new clause provides for their appointment — [Interruption.] Perhaps hon. Members will allow me to continue, as it may be more sensible if they make their speeches, so that I can reply to them more systematically at a later stage.
      These officers will be officials of the Department, and the new clause provides for their appointment by the Secretary of State. They will not be attached to one local office, nor will they operate within the management chain.
      44
      They will therefore provide a check that is precisely related to the concern that was expressed in Committee —that a revised confined to local office level would be thought to be, even it were not the case, merely the local office manager confirming the decision taken earlier by his own staff.
      Like the social fund officers, the inspectors will also be subject to the directions and guidance of the Secretary of State and will need to pay regard to the same kind of criteria as the social fund officers. I am sure that my hon. Friends will at least agree that that is the only way in which this will make sense, given the nature of the fund, which is not a regulated system which is appropriate to the normal form of adjudication mechanism.
      The House will also note that an inspector is given three powers. First, he can confirm the decision. Secondly, he can refer the case back to the social fund officer for him to redetermine. For example, that procedure will be followed where the inspector feels that on the evidence before him he cannot endorse the decision, but is not in a position to make a final determination on the case. Thirdly—this is essential to avoid the possible yo-yo effect if the only power were to refer the decision back —he can also determine a case in the same way as a social fund officer. The inspector's decision would then be substituted for the disputed decision.
      I am anxious to keep my remarks brief, because I recognise that hon. Members will wish to raise a number of points. I hope the House will recognise that the new clause provides the kind of procedure that was urged in Committee, especially by some of my hon. Friends. It goes considerably beyond what was in the Bill in the first place, and that is right. It provides a statutory right to request a review, and a further review if it is felt that the first review is still unsatisfactory. Most important of all, it creates a new tier of reviewing such decisions that is outside the local office and the normal social security management chain. It is a significant and important response to the concerns that have been expressed, and I commend it to the House.
      Mrs. Beckett: The Minister has given a whole range of reasons for the proposals in new clause 30 — all except the one that most hon. Members who served in Committee believed to be the real reason. In a sense the hon. Member for Lancaster (Mrs. Kellett-Bowman) put her finger on the point when she asked about cash limits.
      Many aspects of the social fund have caused widespread anxiety both inside and outside the House. They include the facts that it is discretionary and that it may provide loans rather than grants, and the size of its budget. However, the two aspects which have caused most anxiety and which are inextricably linked are the twin issues of cash limits and the way in which appeals against decisions made under the social fund will be considered. They are inextricably interlinked because the more we listened and studied the arguments in Committee, the more the essential problem seemed to be that, if the Government conceded a right of independent appeal, each case must perforce be considered by those who serve on the independent appeal body on its merits and as a request for help, and the cash limits, which are so crucial to the Government's proposals and so much a part of what they seek to do, could not bite.
      The Government have introduced this compromise proposal to give the impression of more independence—

      45
      at least the matter is not confined solely to a local office —but without there being a right of true independence through a judgment being made outside the' local office and the Department within which the decision has been made. The sum left in the fund and the time of year will be crucial. In Committee, the Minister argued that one of the advantages of the social fund was its local nature, so there was no need for an independent right of appeal. He has now conceded that it would be seen to be unjust if the fund were maintained purely at a local level, but he is not prepared to concede a fully independent appeal procedure, because that would breach the principle of cash limits.
      We are extremely worried about the scope and implications of the proposal, and therefore about the appeal procedure which will be applied. People—for example, refugees—often need help urgently. The death grant and maternity grant will be dealt with under the social fund, although they will not be subject to cash limits in the same way,. At present all those areas of decision-making carry the right of appeal to an independent tribunal.
      The hon. Member for Newry and Armagh (Mr. Mallon) asked how people could appeal to their Member of Parliament, as they do now, and obtain some sort of review or appeal procedure in that way. That will not apply in the same way because the Secretary of State will not be involved in the decisions and will not be able to overturn them. The local office, which will be at the root of decision-making, will be blamed and will carry the responsibility. As a cosmetic gesture, the Government are introducing a system of inspectors.
      When my hon. Friend the Member for Walsall, North (Mr. Winnick) pressed the Minister to say exactly how local the appeal procedure would be, the Minister's answer was not particularly clear. I think that the person who reviews the case will not be in the local office, so there will be some opportunity for the case to be reviewed by someone who is not necessarily in the immediate vicinity. However, the case will not be reviewed by anyone who has any considerations in mind other than the Department's guidelines and interests. That person will be a civil servant with an innate tendency to back his colleagues who made the decision, and not someone outside.
      The right of appeal which is being withdrawn has existed for more than 50 years, as the Government have been reminded more than once, but not too often. This is a major withdrawal of a civil and legal right. It has been said that under the present procedures some reviews and appeals succeed prior to an appeal hearing before a tribunal. In Committee, the Minister conceded, as he has today in effect conceded, that many cases which succeed before the appeal comes to a hearing do so because the officer involved knows that it will go to a tribunal. Therefore, he takes a further look at the case, because naturally, he does not wish to lose the case before a tribunal. In 1984, some 19,000 cases were successfully reviewed in that way.
      If there is no right to an independent tribunal beyond the initial decision, that pressure will be substantially reduced, if not removed altogether. Some 8,000 cases were overturned by tribunals, which is a success rate of between 20 and 25 per cent. The new clause means that the possibility of an independent review will be lost, and that 8,000 people will more than likely not have their decision beneficially reviewed and overturned.
      46
      The Government's comments and justifications for trying to abolish the right of appeal have been interesting, but weak. In the Green Paper they suggested:
      "The present appeal arrangements … can have a sledgehammer effect. The full weight of legal consideration can be brought to bear on matters which may involve small sums."
      What are small sums to those in well-paid work can be crucial to individual claimants, especially the long-term unemployed whose income is already below the poverty line. The fact that they are small sums in general terms and in the scope of the Government's Budget does not mean that they are not desperately important to the individuals who make claims and have them reviewed.
      In the White Paper the Government said:
      "The decisions which turn on whether or not it is reasonable to give or deny help in a particular case lend themselves far less readily to a separate external assessment than do matters which turn on more specific criteria."
      The existing social security appeal tribunals already deal with such matters and must interpret words, such as "reasonable", which occur frequently in social security regulations. The Government sought to argue that independent appeals were not feasible because the decisions would be discretionary.
      The Council on Tribunals, which is the expert body on these proposals, has made it absolutely clear that it does not accept almost any aspect—not a jot or tittle—of the Government's argument. Some months ago, after much consultation with the Secretary of State, it took the exceptional step of publishing a strong report, criticizing the way in which the Government intended to proceed. It states:
      "It is perfectly feasible to have independent appeals against discretionary decisions, as is shown by the system which operated before 1980 and by other appeal systems. In some ways it is even more important with discretionary decisions."
      We wholeheartedly endorse that point of view.
      Through amendment (a) we have sought to make a minor change in the Government's proposals. In Committee, we asked for the power to overturn decisions to be granted to whatever review system may exist. We asked for it to be made plain that if an independent right of appeal existed and the Government proposed to introduce a social fund inspectorate, the inspector would have the power to overturn the initial decision. That is contained in the new clause, but, as the new clause is drafted far too wide, it will allow the withdrawal of an award which had already been made for any reason, good or bad.
      As the new clause is drafted, there is no scope for any restriction to be placed on the nature of the decision to overturn, or on the reasons for it to be taken. For that reason we propose amendment (a) to new clause 30, which allows, for example, for the grounds on which a decision might be overturned to be prescribed and, indeed, prevents the withdrawal of a payment, if an unfavourable decision should be made. Otherwise, an applicant could not rely on an award that had been made.
      The main point of criticism remains unsatisfied by the new clause. The review procedure being devised will not be independent and will be seen not to be independent.
      Control is what matters most to the Government—in particular, control of cash limits. Neither Ministers nor an independent authority will have the right to overturn this decision. The cash limits will prevail. I quote again from the words of the Council on Tribunals:
      "The people most affected by this proposal are among the most vulnerable in society. Very good reasons are needed before

      47
      abolition of the right to an independent appeal in such circumstances … It is for these reasons that we are so critical of the proposal"—
      which is highly retrograde. The council urged that this proposal should be reconsidered, and the right of independent appeal retained. We urged this in Committee and we continue to urge it in the House.
      5 pm
      Mr. Roy Galley: New clause 30 is greatly to be welcomed and my hon. Friend the Minister has responded flexibly and sensibly to the strong volume and quality of arguments put to him in Committee. He has accepted the essential point that we were trying to press upon him. The hon. Member for Derby, South (Mrs. Beckett) was less than gracious in her response to this concession.
      Some of the points of concern that I raised in Committee are not dealt with by the new clause. Nevertheless, the remarks of my hon. Friend the Minister have overcome some of my concerns and anxieties. It would have been preferable to put some other provisions in the new clause and on the face of the Bill; I hope that in any regulations made under the new clause my hon. Friend will be able to go a little further than he has done today to bolster confidence in the new appeal system. His intentions are in the right direction and his heart is in the right place.
      My hon. Friend has not quite accepted the principle that the appeal shall be to the Secretary of State, with the social fund inspectors acting as deputies of the Secretary of State, which would make them at one more remove from the management structure than the new clause suggests. I agree that my hon. Friend has accepted that the social fund inspectors shall be, in large measure, independent of the local and regional management structure, and that is vital. It would have been preferable to have a system more akin to town and country planning, where there is an appeal with an independent inspector, employed by the Secretary of State, but nevertheless independent of him, against a local decision.
      New clause 30 goes a long way to meet that system, but not as far as new clause 27, which would have given greater confidence to appellants and those involved in appealing against social fund decisions, in the quality of the decisions that were made. It would have eased some of the enormous responsibility that social fund officers will have to shoulder as a result of the powers being given to them by Parliament under the Bill.
      I hope that it will be possible, as the appeals system develops, for my hon. Friend to introduce regulations to provide that decisions will be in writing, with the reasons for them fully set out. I hope also that it will be possible for appellants to obtain a hearing, with a friend or representative accompanying them if they so wish, and for the social fund officer to defend his decision at the hearing.
      I understand why my hon. Friend does not wish to have the whole panoply of a tribunal system, and perhaps by this openness we may be moving towards such a position. However, it would give more confidence if there were the ability to challenge decisions and to hear the arguments of those most intimately connected with the proceedings when the appeal decision was being made. The rights of
      48
      the appellant are not clearly set out in the new clause, and I hope that as the system evolves those rights will become more clear.
      It is suggested that there should be established an annual report to Parliament on the operation of both the social fund and the appeal procedure, so that again there is openness and confidence in the way that the system is handled. My right hon. Friend the Secretary of State may be prepared to do this on a voluntary basis without it being written on the face of the Bill, but it would be useful, if no more, to have a report to the House setting out how many applications and appeals there have been, what responses there have been, and how decisions were reached. Although it is not immediately germane to the new clause, there would be more confidence in the expenditure and cash-limiting elements to which my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) referred. We need to know in monetary terms how the fund is working and whether the system of back-up resources is being handled appropriately by the Department.
      I welcome the new clause, but I hope that it will be possible, under the regulations, for my hon. Friend to go a little further to bolster confidence in the appeals system, which we welcome.
      Mr. Kirkwood: It would be churlish not to recognise that the Government have made some movement in the direction of the sentiments expressed in Committee, where debates were both useful and constructive. However, I am sorry to have to tell the Minister that if the clause is pushed to a Division, I shall vote against it. The system is still not adequate.
      First, the need for an independent system in the review process has not been displaced by the proposals. Claimants need an environment for telling their story which is entirely separate from the DHSS, which takes the initial decision. I can tell a short story from my practical experience to show why that should be so. I used to be an honorary advisor to the citizens advice bureau in Hawick and we had a good young volunteer counsellor who was a conscientious DHSS officer. By chance, one day a claimant came into the CAB straight from the DHSS, steam coming out of his ears because of the treatment that he had had under the system. He ran into the young CAB counsellor who was the same person who had seen him in the DHSS office. The discussion in the CAB was full of sweetness and light, and the claimant was helped considerably because he was out of the context of the DHSS and being given advice from the CAB. The Government system will allow no circumstances where such things can happen.
      Will the review process whereby a social fund inspector refers back a decision, to be reviewed again, be published and made available to advisors, claimants and others? It is essential that that should take place, to try to build up a picture of how the review procedure that has been announced in new clause 30 is working.
      Secondly, I have severe worries, based on the experience of the special case officers since 1980. This small highly trained cadre of DHSS officials has been under tremendous pressure. If the Minister expects the social fund inspector that he is creating, through new clause 30, to function under that pressure, the social fund review process will fall apart at the seams. How many

      49
      inspectors does the Minister consider will be needed to operate new clause 30? How much time will they have, and what training can they expect to receive?
      On the principle of the need for an appeal, the nature and quality of the decisions taken by inspectors is vital. The Green Paper advanced three main reasons against an independent system: first, that it was basically inappropriate; secondly, that it was a sledgehammer approach; and, thirdly, that it would involve inordinate delay. Those reasons were all discredited in Committee.
      An independent review is essential for four reasons: first, it considers the substance of the matter and the decision taken; secondly, it reviews the facts—a very important process—on which the initial decision was based; thirdly, it produces an element of quality control and introduces some consistency and a cross-check on decisions taken by social fund officers; and, fourthly, and most important, it offers the applicants or claimants a review that will take the heat out of the matter.
      I accept that a management review might be able to deal with the first three essential features, but I underline the fact that the prospect of an applicant or a claimant being told that if he does not like the decision he can take it to an independent appeal process would defuse any problems. That has been my experience in many cases.
      The Green Paper's claim that an independent review is inappropriate is wrong. There is an element of discretion in the system. Words such as "reasonable", "appropriate" and "thinks fit" abound in some single payment regulations, and at present the adjudication officers must pick their way through the regulations using their discretion against the background of the guidance, the statutory instruments and the policy statements issued from head office. A move to discretion is nothing like enough justification for removing such cases from the tribunal system.
      As the hon. Member for Derby, South (Mrs. Beckett) said on the sledgehammer argument, the sums of money involved may not be large in arithmetical terms, but there are broader social and political objectives in the set-up which an independent tribunal and appeal process creates. The sledgehammer argument is not conclusive for that reason.
      The delay argument is also weak, if not irrelevant. The social security appeal tribunals do not produce unreasonable delays. If there are any delays in the tribunals, recent research shows that they are caused in the DHSS offices and are not the fault of the independent appeal tribunals. More recent research shows that similar delays occur where appeals are disposed of administratively. There are delays when administrative proceedings take place to review decisions. Those delays will be made considerably worse if not enough social fund officers and inspectors are made available to conduct the in-house reviews.
      Tribunals can take decisions in principle to be implemented if resources are available. The Government could easily have taken that option. They should have left the independent appeal procedure in place. I accept that a major anxiety in the Minister of State's mind, if not in his mouth, is the money restraint, but the Government could have adopted the suggestion that I have just made.
      The Minister will need stronger arguments before he can persuade me that new clause 30 is supportable. The hon. Member for Derby, South mentioned the persuasive arguments of the Council on Tribunals.
      50
      Will the Minister consider new clause 16, which relates to the housing benefit appeal process? We discussed the possibility of the Government's bringing housing benefit into the independent appeal process. Will the Minister say something about that?
      Sir Geoffrey Finsberg: When I read the Bill for the first time, I was worried that there appeared to be no form of appeal in such cases. When I met deputations on the subject, I understood the worries which were affecting people. I read the standing Committee reports and found a wide divergence of view, not so much about whether there should be an appeal, but about the nature of the appeal that should be inserted in the Bill. I tabled amendment No. 80 to try to get an appeal independent of the originator of a decision.
      5.15 pm
      I observed that the Association of Metropolitan Authorities briefing said that my amendment should be regarded with caution. I am grateful that the AMA should think it worthy of comment. The association could have telephoned me, as a previous deputy chairman of the Association of Municipal Corporations, but it chose not to do so.
      Like the hon. Member for Derby, South (Mrs. Beckett), I have read the special report from the Council on Tribunals, but I have also read the council's annual reports. Hardly a report goes by without the council criticising some aspect of Government policy that impinges upon its work. The only difference on this occasion is that it has taken the trouble to issue a special report. It is not the first time that it has cri6cised Governments of all colours during the past 15 years, so I do not place as much credence upon its remarks as the hon. Lady did.
      I tabled the amendment in that form because of my experience when working as a Housing Minister on the right-to-buy legislation, which provided for an appeal against the district valuer's determination. That appeal was to be to another member of the staff of the district valuer. During the four years that the legislation has been in place, I know of no complaint that the reviewing district valuer merely followed the advice of his colleague. As a former DHSS Minister, I consider it rotten of Opposition Members to say that DHSS officials would whitewash the decision of a colleague just because they come from the same Department. That may be how Transport House works; it is not the way in which the DHSS works. It has a large body of loyal, dedicated officials who are determined to do a good job and not just rubber-stamp the views of their colleagues.
      Having said that, I can appreciate the Minister's difficulty. I examined with as much care and understanding as I could the somewhat complex new clause that he has tabled to try to understand exactly what he means and to see whether it goes some way towards providing the second view of a case for which so many people have asked.
      The deputations that I have met wanted a proper second look at cases. If the Minister is not prepared to have a wholly independent review, with all the accompanying paraphernalia of setting up a new panel completely separately staffed, which might become cumbersome and bureaucratic, he has found an acceptable compromise. It is not the best by any means, but it is acceptable. Provided that hon. Members do not denigrate DHSS staff who are

      51
      asked to review the working of the social fund, and say that they will not be independent, I believe that my right hon. Friend has found a way through the difficulty which will satisfy most people.
      Reference has been made to an annual report and to the figures that might be made available. Legislation is on the statute book that covers a wide variety of DHSS subjects. If, after a year or so, it were found that the new clause was not providing adequately for a proper review, there would be plenty of opportunity to change it. We ought to go along the road that my right hon. Friend has suggested. Therefore, I do not intend to press amendment No. 80. I shall support the new clause.
      Mr. Mallon: This is the first time that I have had the opportunity to speak on the Bill. Therefore, I am tempted to say everything that I should like to say about it, but I shall resist the temptation and will try to deal only with the way in which it will affect Northern Ireland. Circumstances are different in Northern Ireland; 26 per cent. of all household incomes there are derived from social security payments. In my constituency, 25 per cent. of the people are unemployed. Single payments in Northern Ireland amount to £25·5 million. In my constituency alone they account for £2·5 million. I shall consider the implications of the new clause against that background.
      I am worried most of all about the lack of an independent review. That is very' difficult to accept. I spent many years dealing with social security problems and found that the person who is properly represented at a tribunal has a much better chance of succeeding than the person who is not properly represented. That is a proven fact. It is also a proven fact that the person who receives good advice is much more likely to succeed. We deserve an answer to the question: at what stage will an independent input be available? At what stage will it be possible to avail oneself of the expertise that is available from citizens advice bureaux, trade unions, interested politicians and various other sources?
      I pay tribute to the managers of Northern Ireland's social security offices for the way in which they have administered the single payments. However, it is interesting to note that when people applied for single payments and sought political assistance to obtain them, it was found in a large number of cases that another type of social security payment was available to them but that they were not claiming it. The benefit of the independent input and review will be lost in the implementation of the discretionary loan system or social fund system.
      This is a crucial factor. We should not consider only how it will operate in the case of those who make a claim. We have to consider the implications for those who do not make a claim. There is a new type of need in our society. I call it the "lace curtain poor". Those who have tremendous pride and who have never had to go to a social security office will not like the discretionary system. Therefore, they will not ask for a loan or for charity from that system.
      The begging stigma is to be introduced into a statutory entitlement. For that reason, many people who are entitled to assistance, and who receive it if they obtain help from an independent source, will not receive it if the independent source no longer exists. Therefore, we must
      52
      remove the begging stigma from the term "social fund", or "discretionary loan system", or whatever name is eventually accepted by the public at large.
      The absence of an independent tribunal is a grave mistake. Area boards have been created in Northern Ireland. By and large, they do a very good job. They administer efficiently social security, education and various other aspects. If, however, the Minister says that no appeal can be made to him because a "crunch" problem is a matter for the area board, the individual will have no ultimate arbiter. The area board will take the decision. There will be no ultimate arbiter and no ultimate right of appeal to a tribunal. The independent element will no longer exist.
      Something has happened already in Northern Ireland which I do not like. There has been an increase in the number of applications for licences to lend money. I repeat that I live in an area where a great many people depend upon social security payments. The new clause will encourage the loan sharks in Northern Ireland. The absence of an independent tribunal will edge many people towards asking for a loan from the independent loan merchants rather than from the social fund.
      I see that right hon. and hon. Members are shaking their heads. However, very many people, especially those who have never asked for social security because their pride will not allow them to do so, are getting into the hands of the loan sharks. That will happen increasingly because of this one element in the Bill. I discussed this matter early today with someone whose views I do not fully share. However, he made a very apt remark. He said, "It is the difference between being mugged and having your pockets picked." I hope that we shall be able to avoid both.
      Mr. Stern: I am grateful to you, Mr. Deputy Speaker, for the opportunity to make a brief contribution to the debate on this new clause. I shall be brief. Many of the hon. Members who served on the Standing Committee had an opportunity to contribute to the debate that gave rise to new clause 30. Therefore, we are grateful for the opportunity to hear the comments of other hon. Members — for example, the hon. Member for Newry and Armagh (Mr. Mallon). I appreciated his comments about loan sharks, but he was a little unfair to the Government in suggesting that the Bill would contribute to the increase in their numbers. The Bill is at least a year and a half away from implementation. Nevertheless, that is important in areas where there is a high level of dependence on social security, and it is something that we shall have to look at closely in the regulation of the Bill because it is an ever-present danger.
      5.30 pm
      I welcome new clause 30 because it follows from an undertaking given by my hon. Friend the Minister in Committee and it meets my objections to the clause as originally drafted. The hon. Member for Derby, South (Mrs. Beckett) dealt briefly with the fact that the clause, unlike formal appeal systems, recognises one essential fact of the social fund system. A decision by a social fund commissioner or a decision on a review by an inspector or other official will not be based on a fixed view of the facts, or even on a correction of a view of the facts, but will be an expression of opinion.
      I was accused by the hon. Member for Birkenhead (Mr. Field), who, unfortunately, is not in his seat, of metaphysics when I raised that matter in Committee. Any

      53
      decision based on opinion is just as good as and no better than anyone else's. The fact that we are setting up a review system rather than an appeal system recognises that at the end of the day we shall merely be substituting one opinion for another—or not, as the case may be—rather than attempting to apply precedent or a finer view of the facts than those that were applied to the original decision.
      I welcome the new clause because it is a full and fair recognition of the fact that an appeal system would be inappropriate for a social fund, and at the same time it gives the maximum opportunity for the factors put forward by the claimant to be taken into account. Throughout our legal system that distinction between a fresh look at the facts and a fresh look at the law relating to those facts is applied. It is in the High Court where the jury sits that the facts are finally decided. The whole purpose of the appeal system, as I understand it—I am not a lawyer—is to look at the way in which the law is applied to those facts rather than to take a fresh look at the facts. That is the system that we have at the moment in social security. We are replacing that with an opportunity to look again not at the law but at the facts.
      I should like my hon. Friend the Minister to clarify one point which, again, follows from a point made in Committee. It has been generally welcomed that the inspector will be independent of the social fund officer whose decision is being reviewed. But one question that was left open in Committee, to which I ask my hon. Friend to return, is how far, within the social security network, the inspector will be removed from the social fund officer who took the original decision. For example, I see every advantage in an expert on housing benefits in Newcastle being called in to review a social fund decision in Cornwall and vice versa.
      The one point that worries me about an internal review system is the extent to which the ethos and methods of operation of a particular local social fund and its officers will carry over into the review decisions made by the inspectors. We need to use the breadth of the facilities of the DHSS, which, after all, is the largest spending Government Department, to make sure that the inspector's remit in any decision on the social fund is as far removed from that of the social fund officer as possible. Indeed, I hope that in the administration of new clause 30 there will be a positive instruction to social security officers that they should not bring in as an inspector on a particular social fund anyone who has any other connections with that social fund or, indeed, the area.
      Subject to that, I welcome the new clause. In introducing the new clause my hon. Friend has shown himself to be responsive to the worries that were expressed about the original clause and he has produced a system which will meet those worries.
      Mr. David Winnick: New clause 30 must be seen against the background of the social fund and the proposals which, as we know, give a great deal of discretion to the local DHSS office, the cash-limited social fund and, in many cases, the loans which are replacing the present practice. Understandably, we consider the social fund itself to be an onslaught on the poorest section of our community. That point has been made time and time again by Labour Members.
      The new clause in no way deals adequately with the need for an independent appeal. The social fund officer is bound to be seen as part of an administration within the
      54
      local office. In reply to an intervention of mine, the Minister said that the social fund officer would be based in that office. Clearly, he or she will be seen as part of the normal administration. Therefore, the refusal will come from the local office and a decision to turn down a claimant's appeal will come from the same office. In the eyes of the claimant there will be no distinction.
      Mr. Newton: There may simply be a semantic confusion here. The social fund officer is the name given in the new system for what is the adjudication officer in the existing system and, by definition, in the local office. There is no change, other than a change of nomenclature. However, the inspector would not be in the local office.
      Mr. Winnick: I take that point, but the first stage will clearly be to someone based in the local office.
      The new clause, it should be remembered, has been put forward only after repeated criticisms. The Government did not intend to do anything of the kind. However, they now recognise that the original provision was totally inadequate.
      I repeat my earlier question. Will the claimant whose application for assistance has been turned down be able to see the social fund officer, or will there be only written communications? If the claimant can be seen, can he take along someone to represent himself? That is important.
      The social fund inspector is also part of the DHSS machinery. The Minister has just told us that the social fund inspector will not be based in the local office, but that is no substitute for an independent appeal. To use the old cliché which nevertheless remains true, justice not only needs to be done but needs to be seen to be done. Those whose review is turned down by a social fund inspector will only come to the conclusion that there has been no independent review of the claim, merely one by the regional machinery of the DHSS.
      I stress that we are dealing with matters of tremendous concern to many claimants. Hardly a single week goes by when I do not receive letters from constituents on supplementary benefit who require assistance on essential items such as furniture, bedding and clothes. Those are matters of crucial importance to such people. We can debate what the Minister has referred to as a matter of semantics, whether it is a social fund officer or otherwise, but this is a matter which concerns the poorest in our community. They do not want to be in that state. Many are forced to apply for essentials because they are unemployed and, like those in my part of the world, have no opportunity of getting a job.
      If a claim is turned down there should be every opportunity for that claim to be looked at properly, and for that to be done there needs to be—as there is now— proper independent machinery to assess whether the refusal was justified. Like my hon. Friends, I believe that what is proposed is in no way an adequate substitute for what has hitherto been a form of independent machinery.
      Many of our fellow citizens are now forced to live in widespread poverty. That should be a cause of great anxiety to us all, although I wonder whether it is of much concern to Government Members, including the Front Bench. Who would have thought just a few years ago that so many people with no other means of support would have had to apply for single payments for furniture and clothing and the like? It is an indictment of Government

      55
      policies that in the last seven years many more people have been forced to live in those circumstances than was previously the case.
      All that the Opposition can do is to spotlight the difficulties faced by many of our constituents and also to press as now for a system under which there is a reasonable chance for the people who need such help to receive it. If a claim is turned down the claimant must be able to appeal in a proper way. I agree with my hon. Friends that new clause 30 is no substitute for that which we have been seeking, and there is every reason to reject it.
      Mr. Lewis Stevens: I should like to thank my right hon. Friend the Minister for introducing new clause 30 and for moving a long way towards the point made on the Government side of the Committee about some form of review over and above that of local officers. The new clause moves a long way towards that, but perhaps not quite as far as some of us had anticipated. It is important, as the clause lays down, that the social security inspector carrying out the second stage of a review should be seen as quite divorced from the local office and should be accepted as someone distinctly outside the normal DHSS claims machinery. That meets most of the worry that we had. It is important that someone who is a specialist within those functions related to the social fund can make decisions quite independently of the local office. That will give considerable confidence to those people who had, as they thought, a just claim that had been turned down at some stage of the procedure.
      It is important to consider for the future the point made by other hon. Members about the representation of people during the various stages of the initial application. Many people need some sort of support, either formal support from a legal representative or from an organisation or even in some cases merely from members of the family. That needs to be spelt out in the regulations that will eventually appear, because we need to know exactly who can help these people and can meet the inspector, the Secretary of State or the social fund review officer. I hope that will become part of the procedure for looking at these cases. It is not quite fair for some members of the Opposition to dismiss an inspector by saying that because he would be an employee of the DHSS he could not look properly at cases. The hon. Member for Walsall, North (Mr. Winnick) said he was anxious that cases should be looked at properly.
      Mr. Winnick: Independently.
      Mr. Stevens: The hon. Member said properly, and it can be done quite properly within the scheme suggested by the Minister in the new clause. An officer who is dealing with cases time and again and looking at the social fund and becoming an expert on it, can look properly at a specific case and make a decision which is fully in the interests of the people concerned. It will not be a biased decision, as has been suggested, made purely in the interests of the Department. To suggest that is a slight upon the DHSS officials. It is not right to suggest that they do not exercise care and attention.
      Mr. Winnick: In no way could my remarks be seen as a criticism of DHSS officials. My criticism was of Government policies and was not intended as a slight to
      56
      those who are forced to carry out Government policies. If the hon. Member is keen to see that everything should be looked at properly perhaps he could explain why he is not in favour of an independent review.
      Mr. Stevens: Perhaps I cannot explain that fully, but the assumption that all tribunals, because they have some independent magic about them, necessarily perform the task in every case successfully and better than an employed officer is false. Many tribunals do not work as satisfactorily as they should. There have been cases where there was as much criticism after the result of a tribunal as there was of any decision made in the courts.
      5.45 pm
      Within the scheme that the Minister has suggested, there is the possibility that we could have a slicker operation than has been seen in many tribunals. The tribunal system does not always work and tribunals can become routine in the way they deal with cases just as individuals can become routine in making judgments. Tribunals do not have the magic that has been suggested — that merely because they are independent they are always successful.
      When the scheme is working I hope that the Minister will look carefully at the possibility of the advertising that needs to be carried out about exactly what the procedures are. Such advertising is needed both for claimants and for officials in the Department. Despite a lot of work, the DHSS still suffers from a lack of understanding about how to set about various procedures. We are debating a new and extensive Bill, and I hope that the rules about the social fund and the reviews of appeals by claimants against decisions will be made simple and clear for the claimants and for the Department so that the scheme can be operated successfully. As I said before, the clause does not go quite as far as some of us had hoped, but I thank the Minister for moving towards what we were seeking in terms of a review outside the Department's local office area. New clause 30 meets that point and perhaps with care and a careful look at the procedures we will have a system that is satisfactory and helpful. It must be helpful to those who ask for their cases to be reviewed.
      Mr. Charles Kennedy: I know that some hon. Members, including myself, are anxious to have a chance to debate child benefits and the cold climate allowance, and I shall therefore be brief. I endorse everything that was said by my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood). I share with him a reluctance to be churlish, but it is inevitable to be so. I am not convinced by what the Minister said because I do not believe that the Minister was convinced by his own argument. From the time some months ago when the reviews and initial reports were announced and presented, the Minister has argued against any form of review or appeal. Now he tries to sound convincing or to be convinced himself, and to do that he has had to discard all those arguments or turn them on their heads.
      There is no internal consistency in the case that the Minister tried to advance. That is because, as has already been noted in the debate, the Council on Tribunals has said that the Government are removing a right of independent appeal which has existed in law for 50 years. The Minister himself highlighted the central conundrum: that a regulatory system is to be replaced by a discretionary

      57
      system. He told us that the review mechanism he is introducing confers on claimants clear statutory rights. There can be clear statutory rights for people in a regulated system, but there can be no such thing as clear statutory rights for people under a system based on human discretion. That has the logic of trying to compare Locke to Leviathan, which is what the Minister did in his speech.
      There is a need for an independent appeal. The compromise that the Minister is hailing is nothing of the sort; it is a cosmetic effort, attempting to dress up an inadequate and unsatisfactory system. The new clause should be defeated and the Minister should be made to go away, think again and come hack with a proper system that respects human decency.
      Mrs. Virginia Bottomley: The debate highlights the fact that our social security system has lost all sense of proportion. After all, we are discussing appeals about single payments and not about the basic rate of income, which is where our energies should be directed.
      Frogs may sleep with their eyes shut, but hon. Members should not close their eyes to what has been happening to single payments, which have more than doubled in the past year. There may have been great enthusiasm among those interested in lodging appeals and going through the tribunal system to see whether, for example, someone who, like Anne Boleyn, has six fingers can have a special payment for his or her needs or difficulties, but the system is losing all sense of proportion.
      Having been involved for many years as a social worker with the complexities of our social security system, and knowing that many people find it extremely difficult to understand, I believe that continuing with the existing cumbersome mechanism is out of all proportion to what needs to be done. I greatly welcome the introduction of the social fund, which will allow greater discretionary power and local flexibility. Opposition Members cannot have it both ways. If we go for a regulatory system, we cannot have the flexibility and local variation which others, including myself, would value. More fundamentally, I believe that the fact that so much energy is going into the administration of single payments detracts from the underlying need to have an adequate basic income maintenance system, with premiums for those with special difficulties.
      I applaud the Minister for having introduced the new clause and I welcome the words of my hon. Friend the Member for Hampstead and Highgate (Sir. G. Finsberg) who said that it was possible and acceptable for social security officers to act independently within the system. The new clause will clear up the expectations and rights of claimants and will introduce an element of proportionality into a system which has recently been losing all sense of proportion and cannot be said to be serving the claimants whom we all hope to help.
      Mr. Geoffrey Lofthouse: A serious situation is developing in my area and, I am sure, in many other parts of the country. In the area covered by the Wakefield metropolitan council, a backlog of single payment applications has been building up and the situation has become so serious that one area office has had to advertise in the local press asking people to be patient because it cannot deal with all the single payment applications.
      My worry is that pressure will build up and the officers will be pushed into making unfair decisions because they
      58
      do not have enough time to consider cases properly. The thousands of people whose cases are awaiting decisions should have an independent appeal procedure.
      I have heard from an old gentleman who says that he has not had a new suit for 20 years and that, although he takes size 8 shoes he is having to wear size 9 shoes, which he buys at the market. A dear old lady of 83 told me that she has never applied for social security, but now needs some clothing to make her feel respectable when she goes out. Another lady aged 80 told me that she has been saving money to go on only the third holiday of her life, but is now having to spend it on household necessities.
      Those applications and many others are in the queue at social security offices. If they are turned down because officers do not have time to look into them, there should be a right of appeal. We believe that there ought to be a safeguard, and I hope that the Government will share our view.
      Mr. Newton: I, too, will try to be brief, and I hope that the House will understand the reasons for that.
      A number of comments, especially those by the hon. Member for Derby, South (Mrs. Beckett) and other Opposition Members, have been directed to the basic proposition whether there should be an appeal to the independent appeal tribunals that we have for the present regulated system and will have for the regulated parts of the system in future. We went over that ground exhaustively in Committee and it would be wrong for me to rehearse all the arguments, especially given the time constraints faced by the House.
      However, I ask the House to consider whether, after all the trouble that we have gone to in trying to improve—I think that it is widely acknowledged that we have succeeded—the appeal tribunals which take decisions within sets of regulations passed by Parliament, to improve the legal quality of those decisions by importing legal chairmen and to relate the system more closely to a regulated system, we would be doing anyone a favour by asking those tribunals to take a completely different decision, not within regulations passed by Parliament. but under directions and guidelines, including budgetary guidelines, made by the Secretary of State.
      I suspect that it would be a cause of anxiety if we asked tribunals to do two different jobs, and it might undermine some of the improvements that we have made in their work. I know that some hon Members do not accept that view, but it cannot be dismissed.
      I also ask hon. Members to bear in mind the fact that part of the background to the move to a regulated system in respect of single payments and other parts of the system in 1980 was dissatisfaction with the way in which the previous discretionary system, with appeals to the previous supplementary benefit appeals tribunals —which were not subject to the discretionary guidelines of the Supplementary Benefits Commission—was working and the extent to which it was leading to variable decision-making throughout the country. The previous Government found the position so unsatisfactory that they set up the social assistance review in the late 1970s which led t, s into the present, more regulated, system.
      I shall look into the points made by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) about the working of the single payments system in his area. En the past few weeks my right hon. Friend the Secretary of State

      59
      has announced a substantial increase in the number of DHSS staff throughout the country, and that may encourage the hon. Gentleman.
      The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) asked me about his new clause 16 and housing benefit appeals. He will know what I said in Committee, and that I held out the possibility of making some sort of amendment on Report. However, I think he will acknowledge that I spoke in very cautious terms. As it would be necessary to talk the matter through with the local authority associations, particularly as those who make housing benefit decisions at present are not adjudication officers, and as there are clearly several very difficult issues to be resolved, I did not think it right to bring forward an amendment on Report. That is not to say that I have forgotten the problem or dismissed it. We are continuing to look at it very carefully, as I understand the points made by hon. Members on both sides of the Committee.
      6 pm
      I think that there is a little misunderstanding between hon. Member for Newry and Armagh (Mr. Mallon) and me. I recognise that he does not entirely agree with me, but I repeat that there is no reason why our proposals should deprive people of the type of independent advice that they get from bodies outside the Department, which will, and can, operate regardless of the review or appeal mechanism within the Department. There will continue to be a role for citizens advice bureaux, Members of Parliament and others within whatever system we have.
      I was asked several questions, not least by my hon. Friend the Member for Halifax (Mr. Galley), about what notification of the review would be given to people. I assure my hon. Friend that those seeking a review will receive a formal notification, by which I mean a written notification, of the outcome of the review, both at local level and following a review by a social fund inspector. Procedures for that will be set out in directions. We envisage that the review by a social fund officer will be on the basis of the person seeking the review being able to be heard and to take a representative with him.
      Several hon. Members, including my hon. Friend the Member for Bristol, North-West (Mr. Stern), asked about inspectors. The intention is for inspectors to be stationed at regional level, and at a significant distance from the local office.
      I think that I have touched, albeit briefly, on most of the points raised in the debate. I hope that hon. Members will understand if I have been unable to respond to them all, but I shall read the debate carefully afterwards.
      Mrs. Beckett: The Minister referred again to the fact that people objected to the discretionary system that existed before the present system of single payments with statutory regulations. He is perfectly well aware that people objected, not to the method of the appeal, but to the discretionary nature of the system. Yet that is what the Minister is restoring, without even the benefit of a right of appeal to an independent body.
      The only other observation that I have time to make involves a point made by the hon. Member for Surrey, South-West (Mrs. Bottomley). She referred rather unkindly to Members of Parliament closing their eyes to the fact that the number of single payments has increased.
      60
      Opposition Members are very conscious of the way in which the number has increased. We deplore the fact that this is due to increased poverty and to the vastly increased level of unemployment. It is extraordinary that she should chide hon. Members about closing their eyes to the facts, when she apparently is quite content to close her eyes to the observations made by the Council on Tribunals and to the removal of an independent right of appeal that has existed for 50 years.
      Mrs. Virginia Bottomley: Does the hon. Lady agree that a disproportionate amount of energy goes into fighting over single payments compared with the amount that should be going into discussing the basic rate? That is particularly true given the small number of people who claim single ayments and the proportion of the budget that goes towards them. There is an unfair mechanism within the social security system. We should be talking about basic rates of income support rather than about single payments.
      Mrs. Beckett: I accept that we should be talking about basic rates of income support. Indeed, Opposition Members do talk about that. Next time the Opposition table an amendment on extending the long-term rate of supplementary benefit or the equivalent, for the long-term unemployed, I hope that the hon. Lady will come into the Lobby with us. We would certainly appreciate that.
      We would very much like to press this matter to a Division, but we have one reason for not doing so. Since the timetable motion was agreed, the Government have tabled two new clauses, including this one, which have substantially pre-empted time which might otherwise have been devoted to major debates. We are most anxious to reach new clause 1, so we shall not take 15 minutes for a vote. However, that is our only reason for not dividing the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

      New Clause 31
      ENTITLEMENT TO MOBILITY ALLOWANCE-GENERAL
      `(1) In paragraph (a) of section 37A(2) of the Social Security Act 1975 (duration of inability or virtual inability to walk for the purposes of entitlement to mobility allowance) for the words "time when a claim for the allowance is received by the Secretary of State" there shall be substituted the words "relevant date".
      (2) The following subsections shall be inserted after that subsection—
      "(2A) Subject to subsection (2B) below, in subsection (2)(a) above "the relevant date" means the date on which the claimant's inability or virtual inability to walk commenced or the date on which his claim was received or treated as received by the Secretary of State, whichever is the later.
      (2B) Where—

      (a) a claimant is awarded an allowance for a period; and

      (b) he subsequently claims an allowance for a further period;

      the relevant date is the first date not earlier than the end of the period for which the allowance was awarded on which the claimant was unable or virtually unable to walk.
      (2C) Regulations may make provision

      (a) for permitting an award on a claim for a mobility allowance to be made either as from the date on which the claim is received by the Secretary of State for a period beginning after that date subject to the condition that the person in respect

      61
      of whom the claim is made satisfies the prescribed requirements for entitlement when benefit becomes payable under the award;

      (b) for the review of any such award if those requirements are found not to have satisfied.'.

      (3) Section 37A(7) (under which, except so far as may be provided by regulations, the question of a person's entitlement to a mobility allowance falls to be determined as at the time when a claim for the allowance is received by the Secretary of State) shall cease to have effect.
      (4) Where—

      (a) it has been determined that a person was entitled to mobility allowance; and

      (b) the claim should have been determined as at the date when it was received by the Secretary of State, but was determined as at a later date.

      the fact that the claim was determined as at that date shall not invalidate the determination.'—[Mr. Newton.]
      Brought up, and read the First time.
      Mr. Newton: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to discuss the following: new clause 5—Removal of Age Barrier to Mobility Allowance—
      `() From and after this Act, no application for Mobility Allowance shall be treated as ineligible solely on the ground that the applicant had not established a claim prior to the age of 66 years.'.
      New clause 23—Mobility allowance—
      'At the end of section 37A(1) of the Social Security Act 1975 there shall he inserted the words "or unable to make progress on foot in an intended direction, unaided by another person, without risk or substantial danger to oneself or others".'.
      New clause 24 — Mobility allowance: ability to walk—
      `()After section 37A(2) of the Social Security Act 1975 there shall be inserted
      "(2A) In determining whether a person is unable, or virtually unable, to walk, account shall be taken of

      (a) the distance, speed, time and manner in which he can make progress on foot without severe discomfort;

      (b) the need for guidance or assistance;

      (c) the ability to conceive and achieve a desired destination.".'.

      New clause 25 — Mobility allowance: mental handicap—
      () After section 37A(2) of the Social Security Act 1975 there shall be inserted:
      "(2A) An applicant shall be entitled to consideration for mobility allowance, notwithstanding an ability to undertake the physical movements of walking, if, because of mental or physical disorder, he cannot control the destination to which he moves without the guidance or assistance of another person.".'.
      Government amendments Nos. 187, 188 and 186.
      Mr. Newton: I hope that I will be in order if I spend a few moments explaining the reasons behind the new clause and then describe its provisions briefly.
      The existing legislation for mobility allowance ties consideration of a person's entitlement to the allowance to the date that his claim is received. If the conditions are not satisfied on that date, they cannot be considered on any other date and the claim fails.
      There has been some uncertainty about the matter, and last year a tribunal of social security commissioners held that medical appeal tribunals, the highest of the independent adjudicating appeal authorities, could consider whether a claimant satisfied the medical conditions for the allowance from a date later than the date of his claim. If he did, the allowance could be awarded from that later date. Following that decision, a number of
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      claimants were awarded the allowance in that way. That was then followed by an event in the Court of Appeal earlier this year, when the court overruled the commissioners' decision and held that entitlement could be considered only as at the date of claim.
      We are introducing this legislation in order to re-establish the commissioners' view against the finding of the Court of Appeal. We do not in any way criticise the Court of Appeal, but it found that the law was something that we did not wish it to be. I am sure that the House shares our view. The new clause is intended to put the matter back to where the commissioners left it
      The new clause restores the power of medical appeal tribunals to decide medical conditions from a later date, extends that power of later-date determination to the other independent adjudicating authorities dealing with mobility allowance claims, and enables regulations to be made permitting the allowance to be awarded from the first date, the date of claim or a later date, on which the conditions for entitlement are satisfied. That means that claimants who are not found unable or virtually unable to walk as at the date of claim, but whose ability to walk is deteriorating, can be found to satisfy this condition at a later date and can be awarded the allowance from that date.
      In that way, the need for such claimants—most hon. Members will have come across this problem—to make repeated claims in the hope that one will be received on the day that they are unable or virtually unable to walk will be removed. The new clause will also enable more claims to be dealt with successfully and speedily by the lower tiers of the independent adjudication system. I hope that the House realises that that will be of benefit to mobility allowance claimants generally.
      I shall give a brief outline of the new clause. Subsection (1) changes the time from which, as a condition of entitlement to mobility allowance, the period of 12 months or more over which inability or virtual inability to walk is likely to persist, has to be reckoned. That is to bring this entitlement condition into line with the other changes proposed.
      Subsection (2) inserts three new subsections in section 57A of the Social Security Act 1975. New subsections (2A) and (2B) define the "relevant date" of the start of the 12-month period in relation to first claims and renewal claims. New subsection (2C) enables the introduction of regulations to allow mobility allowance to be awarded from a date later than the date of claim.
      Subsection (3) repeals section 37(A)(7) of the Social Security Act 1975, which at present limits consideration of a person's entitlement to the date when his claim is received.
      Subsection (4) validates retrospectively awards of mobility allowance made from a date later than the date of claim following the decision of the social security commissioners.
      Government amendments Nos. 187, 188 and 186 are all consequential on the introduction of the new clause. The new clause is a modest proposal which falls a good deal short of some of the other new clauses that Opposition Members have tabled. However, I hope that it will at least be seen as an unqualified goody, and that, for once, I shall get a modest pat on the back for introducing the measure.
      Mr. Jack Ashley: New clause 23 is necessary because of the continued controversy about

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      eligibility for mobility allowance. The Department, its commissioners, the House of Lords and many lawyers are in endless dispute over the existing law and regulations and what they mean. Costly time is being wasted and, more importantly, this terrible confusion and uncertainty is resulting in many severely disabled people being deprived of mobility allowance when they should be receiving it.
      The fundamental controversy is about what is meant by the phrase
      "unable or virtually unable to walk."
      It has been held that there is a distinction between cannot walk and will not walk. One gives eligibility and the other does not.
      The mother of the 12-year-old severely mentally handicapped boy who featured in the "Link" television programme on the subject would find legal mumbo-jumbo laughable but tragic. Her child is so strong that he has pulled her to the ground. He has the ability to walk, but his frequent random refusal to do so makes it more difficult to cope with him. He is a strong, powerful young man, and it is much more difficult to cope with him than with a child whose disability weakens or confines him to a wheelchair. But that boy and his mother are refused the mobility allowance.
      A social security commissioner, with the subsequent approval of the House of Lords, held that if the legislation intended to include the inability to direct one's walking, it would have done so. The new clause responds to that. It clarifies the situation and makes it clear that the mobility allowance is about the social loss of being unable to walk in an intended direction rather than the physical loss of being unable to put one leg in front of the other.
      The mobility allowance grew out of the three-wheeler car provision, which shows that its intended, if unspecified, aim was to enable people to go from A to B. Being
      "unable or virtually unable to walk"
      should have been a convenient means of identifying those requiring help to get from A to B. It has proved to be a net with a larger holes through which deserving cases easily fall.
      Many mentally handicapped people—those who are autistic, hyperactive or blind or who have other handicaps such as deafness or mental handicap—are quite unable to move in any intended direction without personal care and attention which is sometimes extremely demanding. Yet they often do not receive mobility allowance, and if they have received it they are at risk of losing it.
      The new clause provides for the mobility allowance to go to those who are unable to make progress on foot in an intended direction without risk of substantial danger to themselves or to others. It will clarify the eligibility provisions for mobility allowance and ensure that those who desperately need the allowance will receive it.
      6.15 pm
      Mr. John Hannam: I congratulate my hon. Friend the Minister for Social Security on his concession in the Government new clause. I support the three new clauses which seek to amend an unsatisfactory arrangement. Most hon. Members will have received representations from constituents who have been refused mobility allowance on the judgment that they are able to walk satisfactorily and therefore do not require it.
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      It is easy for hon. Members to judge, by looking at and talking to constituents, that they are able to walk and are therefore ineligible for the allowance. We usually advise such people to come back after six months if their conditions worsen. However, we have received representations from those who suffer from severe sensory or mental handicaps which make it impossible for them to walk properly without assistance. When such people are refused mobility allowance, we must conclude that something is drastically wrong with the qualifying conditions in the regulations.
      The problem lies in the interpretation of the words "to walk". Our new clauses seek to remove the anomalies which surround the literal interpretation of those words. They are designed to extend the meaning to cover what was originally intended by the mobility allowance regulations to help disabled and handicapped people who are
      "unable to make progress on foot … without risk or substantial danger to oneself or others."
      Mr. Andrew Rowe (Mid-Kent): Does my hon. Friend agree that this affects not only the award of mobility allowance? I am taking up a case against an ambulance authority which refuses to provide an ambulance for people who are capable of putting one foot before the other but have little ability to determine in which direction they should go.
      Mr. Hannam: That highlights the anomaly in the interpretation of the legislation.
      The numbers involved are not large, but we should try to help the sensory or mentally impaired. The right hon. Member for Stoke-on-Trent, Central (Mr. Ashley) referred to the difficulty and the hon. Member for Caernarfon (Mr. Wigley), in his new clause refers to the mentally handicapped. No one has greater knowledge of their problems than he. However, other small groups are desperately in need of our help, particularly the deaf and blind, the blind and mentally handicapped and autistic children.
      In recent years some deaf and blind persons have properly been granted the mobility allowance in some areas. In other areas people with the same handicaps have been refused mobility allowance. That discrimination is unacceptable.
      Mr. Peter Thurnham: Does my hon. Friend agree that one of the most difficult examples is of someone who has been granted the mobility allowance and then loses it? People are unable to understand why the allowance is taken away, because the medical evidence has not changed.
      Mr. Hannam: I was about to discuss that. Organisations such as SENSE, which represent the deaf-blind, tell me that officials say that no decision can be made until test cases have proceeded through the courts. The recent House of Lords test case has resulted in further confusion. People who have been granted mobility allowance are being turned down when they try to renew it.
      The present regulations are based on an unstable, unsure and unacceptable basis. A rejigging of the regulations must be worked out so that it is clearly shown that the inability of a person to achieve reasonable mobility without help must be the criterion for the granting of mobility allowance. I hope that my hon. Friend the

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      Minister, who has done so much for the disabled, will heed the call of all organisations representing disabled people and do something to sort out this serious anomaly in the system.
      Mr. Dafydd Wigley: I support and lend weight to the comments made by the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) and the hon. Member for Exeter (Mr. Hannam) for the Minister for Social Security to continue along the lines on which he introduced the debate, to respond to problems with the working of the mobility allowance and to look at the specific points that have been raised. I will not talk about the problem of people between the ages of 65 and 75 and of those above 75 years, which new clause 5 deals with, other than to mention, as a benchmark, that there is reason for dissatisfaction. I will not talk—as the hon. Member for Exeter did—about the real problems of blind people and blind people with other disabilities.
      Some people who need assistance have not received it. I refer to those who suffer from mental handicap, to which new clauses 24 and 25 relate. I have concentrated on that area because there has been a tremendous amount of uncertainty and people have lost out. There appears to have been a move backwards. On 11 June last year, the Under-Secretary of State for Health and Social Security, the hon. Member for Wycombe (Mr. Whitney), wrote to me, saying:
      "there have been difficulties in recent times over the interpretation of the qualifying conditions for the allowance. The case-law has been in an unsatisfactory state because there have been doubts about the extent to which the need for assistance from another person whilst walking could be taken into account."
      The problem goes back at least to the case from Worcester, of which the Minister will be aware, R(M)2/78. That led to the amendment of regulations in 1979 to clarify the qualifying conditions. That is when factors such as distance, speed, length of time and manner were introduced, and they are featured in my new clause. In other words, I am trying to get back to what we thought we had established in 1979.
      Unfortunately, the Lees case came forward and raised the question of the ability to perform the physical act of walking, rather than the ability to make purposeful use of walking. That is the differentiation to which reference has been made. In a letter dated 11 November, the Under-Secretary of State for Health and Social Security, the hon. Member for Huntingdon (Mr. Major), said:
      "The application of the judgment in cases where there are behavioural limitations on a claimant's walking ability has evidently raised a point of law of special difficulty."
      He continued:
      "When the Commissioners have given their decision, we will then decide whether there is anything further we need to do to clarify the situation."
      The tribunal of commissioners gave its decision in CM/173/85. It appears that only those whose behavioural difficulties cause frequent interruptions to the physical act of walking will qualify. That was a move backwards. The Under-Secretary's letter continued:
      "I hope that the background which I have described shows that the intention of the allowance, and the basic qualifying conditions, remain as they have always been."
      That is not so. The qualifying conditions are not the same as they have always been. When my two boys were alive, they received a mobility allowance, not because they could not undertake the physical act of walking but because they could not go in a meaningful direction. If they were alive and were to apply for a mobility allowance now—I see
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      similar cases to theirs—they would not receive it. Some people who were eligible a few years ago are not eligible now. The law has become an utter tangle. I hope that at the very least, the Minister will undertake to bring forward a remedy to ensure that the people who deserve and need mobility allowance will receive it.
      Mr. Thurnham: The matter goes back some time. In an Adjournment debate on 13 November 1984, the Minister for Social Security promised to review the guidelines pending the Lees case, which had riot at that stage been announced. I put a question to him and he was kind enough to answer it on 10 April this year. He said that recent decisions had clarified the law and should help adjudicating authorities. However, it does not seem to me that matters have been clarified. In fact, in a telephone call to a local DHSS office on 8 April, two days before the answer was given, I was told that the Department did not know how to interpret the Lees decision, and things seemed to be completely up in the air. I ask the Minister to consider the matter further and perhaps undertake to bring in further amendments when the Bill goes to another place. There is great confusion. I draw the Minister's attention to early-day motions 656 and 847 which I tabled and which have been supported by hon. Members on both sides of the House. I hope that the Minister will offer some help in this area.
      I should declare a personal and a constituency interest in the matter. The constituency interest arises in the case of Daniel Heaton, aged 9½ years, who was granted mobility allowance in a decision made on 12 December 1984. The medical appeal tribunal granted the allowance for two years only, on the basis that within the next year or two years he would be admitted to a residential home on a permanent basis, whereupon the benefit to be derived from an allowance would be uncertain. When I corresponded about the case with my hon. Friend the Under-Secretary of State for Health and Social Security, the hon. Member for Huntingdon (Mr. Major), he said that the possibility of admission to a residential home should not have been a relevant factor as it would not have affected entitlement to the allowance. The Heatons are now confused, because the allowance has not been continued, despite the fact that further medical examinations have shown that Daniel Heaton's position medically is the same as it was.
      Daniel was re-examined by a general practitioner on 25 November last year. The adjudicating officer referred him to the medical board. The medical board examined him on 12 January 1986, but again the adjudicating officer decided to refer the case to the medical appeal tribunal. In March this year, the Heatons were told by the tribunal that no date could be set for a hearing until the Lees decision had been clarified by a tribunal of commissioners. The tribunal of commissioners made a decision the day before the letter was sent. Presumably, that would have helped to clarify the position.
      My constituent, Daniel's mother, is in a state of complete confusion. She wrote to me saying:
      "they are making us go through all the hearings we went through last year."
      It is impossible for my constituent to see the need for that when the medical evidence is the same as it was earlier. Obviously, the costs incurred by the Heatons in looking after Daniel are based on the fact that they would receive the allowance. The Minister will he aware of the costs

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      incurred if a child such as Daniel were to go into a residential home. The fact that it was mentioned earlier should be borne in mind in asking for further guidance to be given in such cases.
      The confusion is confirmed by the number of people who have written stating that it is a difficult and contentious area. I received a letter from the Spastics Society dated 16 May, which stated:
      "it is particularly unfair that those who have physical disabilities in their legs should qualify for the allowance, whilst others who though in theory are able to 'walk' cannot do so because of a mental handicap or a combination of disabilities cannot qualify."
      The Spastics Society went on to say that the Lees case seems to have added to the confusion. I think that the society helped to word some of the amendments which are on the Amendment Paper.
      I draw the Minister's attention to a letter which was sent to him by the Disability Alliance and refer him to the number of people who have signed the letter. The letter from the Disability Alliance was signed by the Campaign for People with Mental Handicaps, the Child Poverty Action Group, Down's Children's Association, the Royal Society for Mentally Handicapped Children and Adults, the National Association for Mental Health, the National Autistic Society, the National Federation for the Blind, the National League of the Blind and Disabled, the Royal Association for Disability and Rehabilitation, the Royal National Institute for the Blind, the National Deaf-Blind and Rubella Association. If all those organisations are as concerned as they say they are about the need for better guidance. I earnestly request my hon. Friend the Minister to see whether he can provide further clarification outside the Bill or as part of it through an amendment introduced in another place.
      Mr. Kevin Barron: I support new clauses 23, 24 and 25 and the removal from section 37 of the Social Security Act 1975 of the anomalies regarding mobility allowance.
      The evidence has been presented well today. I am sorry that the Minister chose to help only in a small way and in another respect, and did not clear up the anomaly. Hon. Members on both sides of the House will know of people who have been refused mobility allowance because they suffer non-physical handicaps. They might have gone to a medical officer and been refused mobility allowance because they have normal gait.
      I had such a case, which ended up at the regional medical appeal tribunal. I represented the people concerned and we won. We argued that the family, with an eight-year-old daughter, as she was then, ought to have mobility allowance to help her and the whole family. The father and the mother were unemployed and they had two other children. Although we won the case, there was initially an objection by the Minister to the appeal going in their favour. Next year, or the year after, however, when the matter comes up again, we do not know whether the family will be able to receive the help.
      The Minister is presenting major changes in the law, but he has missed a golden opportunity to amend the 1975 Act fairly and properly so that people with other than physical handicaps are no longer discriminated against.
      6.30 pm
      Mr. Galley: When moving the motion, That the new clause 31 be read a Second time, my hon. Friend the Minister for Social Security suggested several minor, technical, but helpful and useful changes to mobility allowance, and it is singularly graceless of the Opposition not to have referred to those improvements.
      There are, nevertheless, serious worries about mobility allowance, and I should like to emphasise some of the arguments that have already been made so that my hon. friend the Minister is fully aware of the breadth of concern about the elegibility criteria for the allowance.
      There will always be some definition problems and borderline cases, however the legislation is written, but it is clear that the current criteria about being unable, or virtually unable, to walk are not adequate to determine whether somebody should be eligible for mobility allowance.
      We all have constituents whom any layman would say are unable to walk. We all have constituents who obviously need some assistance with mobility but who, because of the interpretation of definitions, are not entitled to mobility allowance. It is important that my hon. Friend the Minister should give us an assurance that he will reconsider the matter. I understand that he may not be able to accept new clauses 23, 24 and 25 now, but they embrace important considerations which I hope he will examine to see whether we can improve the wording of the eligibility criteria.
      None of the new clauses will open the floodgates to people who would, by reasonable criteria, be ineligible. The numbers will be small and it would be a sensitive response to a small problem for my hon. Friend to give us an assurance that he will re-examine the definitional problems.
      The hon. Member for Caernarfon (Mr. Wigley) spoke to new clause 5. There is an important principle here and, as we are having a rare debate on mobility allowance, we should not skate over the fact that somebody who has passed his or her 66th birthday is not entitled to claim mobility allowance although his or her need for it may be as significant as that of somebody who was recently 65—or more so.
      A number—I do not wish to exaggerate—of elderly people have considerable difficulty with mobility and are beleaguered in their homes. There is little help for people aged over 66 who are immobile. The elderly have growing expectations in terms of mobility, activity and the richness of life, so we must consider such groups who are significantly disadvantaged because of lack of mobility.
      Such a change obviously has resource implications, and I can understand my right hon. and hon. Friends being anxious about ramifications to the tune of some £300 million for the social security budget arising from significant changes in eligibility for mobility allowance for people aged over 66. I am not asking my hon. Friend to accept the principle and go ahead straight away; merely that he should give greater thought to the mobility needs of elderly people when no other source of help is available.
      There might come a time when we have the resources to allow a wider interpretation of the mobility allowance for elderly people.
      Mrs. Renée Short: We shall need a change of Government before that happens.
      Mr. Galley: The hon. Lady often interrupts me in the Social Services Select Committee, and she is doing it again now. That comment was unworthy of her and inaccurate.
      New clause 5 has significant resource implications, but improvements in social security have come one by one. The hon. Member for Eccles (Mr. Carter-Jones) is fond of telling us that he is in favour of what he calls the salami approach of improvements for the disabled. He argues that improvements come slice by slice. I hope my hon. Friend will consider that extending the mobility allowance to the over-65s should be the next improving slice.
      Mr. Gordon Wilson: I should like to speak in support of new clause 5. I do not have to say too much about the generality, as the hon. Member for Halifax (Mr. Galley) has just urged the Minister for Social Security to take account of the needs of the elderly.
      I should like to spotlight another anomaly. Is there any reason why people who have not applied for mobility allowance should not be eligible between the ages of 65 and 75, when people who have received it before the age of 66 are able to have it, provided that the medical criteria are satisfied, until they are 75? I cannot understand why that should happen.
      I should like to give the example of an injustice which was brought to my attention. Someone consulted his general practitioner about four years ago when he was still under 65. The general practitioner failed to diagnose a medical condition and, by the time it was diagnosed and a specialist had confirmed it, the gentleman had lost his claim to mobility allowance, He applied, went to the tribunal and got a lot of sympathy. However, he did not get any money at the end of the day. The people concerned feel very strongly about this injustice.
      A letter from the consultant physician said that he suffered from chronic bronchitis and emphysema and was significantly disabled to the point where he was breathless after walking a short distance on level ground. The letter said:
      "His illness represents one which has progresed slowly over a period of years. He is markedly disabled now but was significantly disabled several years ago before he reached the age of 65. I can most strongly support his claim for Mobility Allowance on Medical grounds."
      That is what the consultant physician said, and the tribunal agreed. However, he did not succeed in his claim, simply because he was over 65. I do not see how the Minister can justify this dreadful situation anyway. I hope that he will do something this evening to give some hope to the elderly who are disabled and immobile.
      Mrs. Edwina Currie: There is no doubt that mobility allowance is one of the most useful, best understood and widely used of all the benefits that have been introduced in recent years. I hope that it will not put anybody's back up on Conservative Benches if I say that and pay tribute to those elsewhere who took the time and trouble to introduce it. However, I confess to a sense of disappointment that my right hon. Friend the Secretary of State has not yet managed to make major progress on the entitlement to mobility allowance of mentally handicapped people.
      My right hon. Friend will recall debating with me late one night, I think it was in 1984, the case of Shelley and Russell Tulloch, who are my constituents in Melbourne near Derby. They are mentally handicapped adults
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      suffering from a congenital disease which was not discovered until after the younger one was born. The disease means that they have progressively become more mentally handicapped and increasingly difficult to manage. They are cared for by devoted parents who have applied for mobility allowance and who raised the question with me. After several attempts they were eventually granted the mobility allowance and the DHSS then appealed against the decision and took the case to higher authorities, at which point they were refused mobility allowance.
      The family receives a great deal of help and assistance. The two young people receive non-contributory invalidity pension, the family has the assistance of Derbyshire social services and they have access to a day centre and training centre. There is no doubt that the fact that the young people are mentally handicapped and quite severely restricted in what they can do is known and noted and is very much a part of all the assessments that have been done of the family. When I debated the case with my right hon. Friend, the family were sufficiently devoted to come down to listen to what was being said and advise me.
      Therefore, I take a close interest in the subject and I hope that the day may come when both sides of the House can welcome the opportunity for mobility allowance to be paid not only to people who cannot walk, but to those with other problems.
      If Shelley and Russell were here now they could walk through this Chamber as readily as anybody—that is, if they could understand what the Chamber was and what was being asked of them. They could manage to put one foot in front of the other. There is no doubt about that, although their ability so to do is becoming increasingly restricted. They would need to be on somebody's arm. They would need to be assisted and aided, not by a walking stick, a frame or a zimmer, but by a caring person, especially a relative or someone they could trust in order to make progress of any kind, even of a few yards. It is impossible for them to travel or use public transport unaided or to use the minibus without an escort. Therefore, it follows that they need help with transport.
      Some years ago when I was involved in social services in Birmingham we were able to make use of a different piece of legislation to aid such people. We were able to grant bus passes to such people under the transport legislation of 1976. That gave us greater leeway. Apart from anything else, it gave more power to local councillors and, provided we kept within the broad letter of the legislation, we were able to decide whether we felt that someone would benefit from a bus pass. There were occasions when we watched somebody walk into the office to see whether we thought he needed a bus pass. We always watched them from the window as they walked out again because we were well aware that some people would abuse the system.
      We were able to use this facility to grant assistance to families with mentally handicapped members. We were quite sure that the wording of that legislation enabled us to use our power to pay the transport authority for a free bus pass so that a mentally handicapped person could use it and be assisted in that way. I hope that my right hon. and hon. Friends will explore the ways in which local authorities can use their powers and see whether they could be extended in some way to mentally handicapped people.

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      6.45 pm
      Various additional criteria for deciding whether someone should claim mobility allowance are proposed in the new clauses, especially that of the hon. Member for Caernarfon (Mr. Wigley) with which I have a great deal of sympathy. I am sure that my right hon. Friend the Secretary of State would agree that the current criteria are restrictive and increasingly seem old-fashioned. A disabled person is now recognised not just as someone who cannot walk very well. These days we regard as disabled those who cannot make as full use of facilities as the rest of us can, and somebody who is mentally handicapped, not just physically handicapped.
      Although the legislation was not written all that long ago, in the days when it was written, when mental handicap was beginning to be recognised as a problem for which the whole community should be responsible, a very large proportion of the mentally handicapped people, such as Shelley and Russell Tulloch, would have been in institutions. Therefore, there would have been no need for them to have mobility allowance or to try to find ways of living in society. They no longer go into institutions, and the whole thrust of our policy is to get them out of them and into the community. Therefore, it behoves us, in so far as we can, to ensure that they have the same rights as everybody else in the community and that their disability enables and entitles them to the same sort of help.
      A full review of disability is currently under way. I have asked and pleaded in this House before that we should include the mentally handicapped in the general word disability. I believe that my right hon. and hon. Friends have taken careful note of that. I hope that the day will come when they will feel able to add criteria to the granting of mobility allowance which will recognise that walking unaided does not just mean walking without a stick. It may also mean needing to walk with an escort. Travelling unaided may mean not just being able to get on the bus by oneself but perhaps requiring some assistance and guidance and an escort at all times in order to be able to do that. Therefore, I hope that in the current review the question of mobility allowance is being looked at seriously and that at some point we may look forward to proposals by my right hon. and hon. Friends on the Front Bench in order to allow the payment of this important and valuable benefit to those who are mentally handicapped and could make use of it.
      Mr. Alfred Morris: Time is at a premium and I shall be studiedly brief. My main concern is with new clause 23 and the others so ably explained by my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) and the hon. Member for Exeter (Mr. Hannam). There is now widespread and increasing concern about current restrictions on entitlement to mobility allowance. It has been put to the House strongly again today by the Spastics Society. The Society's concern is shared by many other organisations. What seems particularly unfair to the organisations is that those who have physical disabilities in their legs qualify for the allowance while others, who in theory are able to walk but cannot do so because of a mental handicap or a combination of disabilities, do not. That rankles also with the families of many disabled children.
      There has been reference to the legal confusion which surrounds entitlement to the allowance. To some extent that confusion stems from various interpretations of the
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      verb "to walk". It is argued that the needs of many disabled people could be met if "to walk" was defined in the regulations as meaning:
      "to make progress on foot in an intended direction, unaided by another person, without risk or substantial danger to oneself or others".
      Those are the words of new clause 23.
      This would be a simple amendment to introduce, and would clarify the current confusion. It would also remove an anomaly that causes considerable distress to severely disabled people and those who care for them.
      The mobility allowance is a child of which many people have claimed paternity, such has been its success. Having legislated for the allowance, and having then moved regulations that extended it to some people with mental handicaps, I very much hope that our plea will be accepted. Certainly, if everyone who has claimed paternity were now to vote for the redefinition that we are seeking, there could be no doubt whatever that it would be approved.
      Mr. Eric Forth (Mid-Worcestershire): I should like to add a few words, as someone who has listened to the debate and who was not privileged to be on the Committee. Therefore, I hope that my words will carry a slightly different emphasis from the words of those who served many long hours in Committee and with whose views Ministers are familiar.
      I ask why we should risk giving any impression that we are not willing and prepared to give the maximum help to those in society who most need it. I favour concentrating that help and the resources that are available most on those who are least able to help themselves. That category is headed by the disabled. In using the word "disabled", I agree with all my hon. Friends and Opposition Members who have given the widest possible definition of "disablement" in this context, because I believe that if we allow the law and regulations to continue, as they have in the past, to be drawn in the most narrow way and therefore to seek to exclude people from the category of those who need help, we are open and vulnerable to criticism—and rightly so.
      I say that the more so because I believe that it is that category of people in society who, in many ways, are the most easily enumerated and quantified. We should be able to identify them very well, with regard to the age limit and physical disabilities; we should be able to quantify them and therefore make estimates and allowances of the resources required to give them the help that they need and deserve.
      I agree with the point that was made by the hon. Member for Caernarfon (Mr. Wigley) about the age limit. In that category more than any other we are well able to identify those who would qualify were we to change the ridiculous regulations, and therefore build into our estimates of the resources coming under this heading what was required to give those people the help that they need. That is an easy case. A more difficult case is one that requires a definition of mobility or immobility, or the ability to walk. Again, I agree with many Opposition Members and my hon. Friends. Surely in that case we should be able to make the definition more generous rather than narrower. Even if we did that, we should still be able to quantify with reasonable accuracy the number of people who might qualify for the benefits, assistance and help.
      On these occasions, I am always the first to say to people who want more resources for any aspect of social

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      security services: where would the money come from? I am prepared, in a rare act of generosity, to offer my hon. Friends some advice and guidance. I am referring to the next new clause that we shall discuss, which is about child benefit.
      I give a small trailer to my speech by telling Ministers that we could start to find the resources required by not giving child benefit to those who do not need it. In other words, why should we give child benefit to the relatively well off when there are disabled people and people in genuine need of help and resources, people who deserve the resources of the social services much more than do wealthy people with children? My positive and helpful suggestion to my hon. Friend the Minister is along these lines. I believe that we could legitimately transfer to where they are needed a large quantity of resources presently going to where they are not. I support what all Opposition Members and my hon. Friends have said on this important subject.
      Mr. Christopher Chope: I welcome new clause 31, which seems to introduce common sense into an area where the Court of Appeal has intervened and threatened an over-legalistic approach. I am sympathetic towards the common sense expressed in new clauses 23 to 25. It seems to me that one can or cannot walk. One could ask someone in the street whether he realised that the following person is not eligible for mobility allowance—someone who is
      "unable to make progress on foot in an intended direction, unaided by another person. without risk or substantial danger to oneself or others".
      I think that the man in the street would be extremely surprised at that.
      I am also sympathetic to the concept in new clause 5. If someone reaches the age of 68 and is unable to get around by himself, it is odd that his entitlement to mobility allowance depends on whether he was able to get around by himself at the age of 65. That is another anomaly that the Government should examine.
      Mr. Newton: This has been an important debate. However, there has been very little discussion of the proposition with which we started — the relatively modest but generally welcome new clause that I moved. The debate has ranged across many broader issues, as I expected, following the court decisions to which reference had been made.
      Before I comment on what hon. Members on both sides of the House have said, I should like to say a word about the Heaton case which was raised by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham). He will understand that it would not be appropriate for me to attempt to discuss the details of an individual case at length on the Floor of the House, certainly not in present circumstances. I should make it clear that on the initial claim, as my hon. Friend knows, the independent adjudicating authorities decided to make an award for two years only. They do not have to give reasons for that. The fact that the claimant was going into residential accommodation should not have been a factor, as payment of the allowance is not affected by that. My understanding is that there has been no final decision on the case to which my hon. Friend referred. It is still before a medical appeal tribunal.
      The major issue that has been raised by hon. Members is related to new clause 23 and the two other new clauses
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      of similar character, including the one tabled by the hon. Member for Caernarfon (Mr. Wigley). There is also the slightly different issue raised by the hon. Member for Dundee, East (Mr. Wilson) in his new clause 5.
      The House will be aware that since mobility allowance was introduced in 1976 by the then Labour Government — indeed, by the right hon. Member for Manchester, Wythenshawe (Mr. Morris)—the basic qualification has been the inability or virtual inability to walk. New clause 23—as well as new clauses 24 and 25—is directed to the meaning of the phrase "virtual inability to walk" as interpreted by the House of Lords in the Lees case, and by the social security commissioners in the Hilton case.
      In the case of Christine Lees, as the House will be aware, the judgment of the House of Lords was that the ability to walk referred to locomotion, not to the ability to direct one's steps to a desired destination. In the case of Mark Hilton, the decision of the tribunal of social security commissioners showed that mentally handicapped people, despite their physical ability to walk, can be entitled to mobility allowance if they are affected by what the commissioners describe as
      "temporary paralysis as far as walking is concerned",
      which has a physical cause.
      I acknowledge that the views expressed by a number of organisations outside the House and by some hon. Members tonight—
      Mr. Michael Meacher: On a point of order, Mr. Speaker. Can you advise me whether it is in order, when the guillotine motion falls at 7 o'clock, for the Opposition to move new clause 1 formally, to secure a vote on the clause? It is clear that there has been a filibuster by the Government on the new clause to prevent a clear humiliation by a vote on this important issue, which will now not be debated.
      Mr. Speaker: I have no authority to do as the hon. Gentleman wishes. If the Minister were to resume his seat before 7 o'clock and there was time to move the new clause, that would be a different matter.
      Mr. Newton: I recognise the difficulty, but I stress that I spoke for only a short time in moving the new clause less than one hour ago. The issues that have been raised are extremely important and complicated, and there is much anxiety outside the House—
      It being Seven o'clock, MR. SPEAKER proceeded, pursuant to the Order [15 April] and the Resolution this day, to put forthwith the Question already proposed from the Chair.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.
      Mr. Meacher: Further to my earlier point of order, Mr. Speaker. Would it be in order now for the Opposition to move new clause 1 formally to allow a vote on the matter? There has already been a great deal of discussion on this matter. We believe that it is proper that the House should have the opportunity to declare a view on this crucial issue. Can there now be a vote on new clause 1?
      Mr. Speaker: I am sorry to disappoint the hon. Gentleman, but I am bound by the rules of the House and I have no authority to go beyond the guillotine motion that has been agreed by the House.
      Mr. Barron: Further to that point of order, Mr. Speaker. We have just had a debate on new clause 31,

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      which totalled 57 minutes. Forty-three minutes were used by the Government Benches for speeches to filibuster and stop us getting to new clause 1. This is a disgraceful state of affairs. The Minister spoke for 11 minutes. The hon. Member for Mid-Worcestershire (Mr. Forth) spoke about child benefit, knowing that we would not get to new clause 1 because he was filibustering.
      Mr. Speaker: I cannot recognise a filibuster. Hon. Members who have spoken have done so very briefly.
      Mrs. Kellett-Bowman: Further to that point of order, Mr. Speaker. May I add my words to those of Opposition Members who are disgusted at the way in which the discussion on child benefits in new clause 1 has been avoided.
      Mr. Speaker: There is always the chance of such sadness when a guillotine motion is in force.

      Clause 1
      MINIMUM CONTRIBUTIONS TO PERSONAL PENSION SCHEMES
      Mr. Major: I beg to move amendment No. 1 in page 1, line 15, leave out from 'election' to 'and' in line 16 and insert
      'which is still operative that her liability in respect of primary Class 1 contributions shall be a liability to contribute at a reduced rate'.
      Mr. Speaker: Before we discuss Government amendment No. 1, it would be right for me to tell the House that I have reconsidered my provisional selection of amendments. I have selected amendment No. 206 in the name of the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and his hon. Friends. This amendment will fall for debate immediately after Government amendment No. 59, that is, after the 9 o'clock guillotine.
      Mr. Harry Cohen: On a point of order, Mr. Speaker. In view of the importance of the comments which have been made about child benefit and the fact that you have just added to your selection of amendments to be discussed, will you consider adding the debate on child benefit under new clause I later in the evening so that the House can give a view on the matter?
      Mr. Speaker: The hon. Gentleman has been a member of this House for long enough to know that we move forward and not backwards in this place.
      Mr. Major: This is a drafting amendment which clarifies the intent of subsection (1)(b) of clause 1 which states that married women and widows who have opted to pay reduced rates of national insurance contributions are excluded from receiving the contracted-out rebate. This is not a piece of miscellaneous beastliness but simply reflects the fact that they are not covered by SERPS and consequently have no SERPS pension to contract out of. It would therefore be extremely odd to pay a rebate. I draw to the attention of the House that an optant who wishes the DHSS to pay minimum contributions to her personal pension will first need to end her election.
      Amendment agreed to.
      Mr. Major: I beg to move amendment No. 189, in page 2, line 12, at end insert—
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      `(4A) If the Secretary of State pays art amount by way of minimum contributions which he is not required to pay, he may recover it from the person to whom he paid it or from any person in respect of whom he paid it.
      (4B) If he pays in respect of an earner an amount by way of minimum contributions which he is required to pay, but does not pay it to the trustees or managers of the earner's chosen scheme, he may recover it from the person to whom he paid it or from the earner.'
      Mr. Speaker: With this it will be convenient to discuss Government amendments Nos. 190, 191 and 194.
      Mr. Major: These amendments ensure that the Secretary of State has a legal right to recover any wrong payments of minimum contributions through the contracted-out rebate under clause 1 or incentive payments—the 2 per cent. incentive under clause 7—and to restore to the national insurance fund the amounts recovered. They also clarify that regulations under the Social Security Act 1975 can enable amounts owed by a person to the Secretary of State to be offset against a refund of overpaid national insurance contributions to that person.
      I shall give examples of how this will work if pressed, but it is a fairly straightforward and non-contentious proposal and, for the present, I merely commend the amendments to the House.
      Amendment agreed to.
      Mr. Major: I beg to move amendment No. 2, in page 2, line 30, leave out from 'date' to end of line 32 and insert
      'some other appropriate scheme is the earner's chosen scheme'.
      This is a drafting amendment which is required for clarification because clause 3 does not provide for exceptions to clause 1 as the existing words may be read to suggest. The substituted words in amendment No. 2 achieve the intended effect that a person cannot nominate a personal pension scheme to receive his minimum contributions from DHSS Newcastle without cancelling a previous nomination which is still valid.
      Amendment agree to.

    Schedule 1
    APPROPRIATE PERSONAL PENSION SCHEMES
    Mr. Major: I beg to move amendment No. 192, in page 82, line 9, leave out pargraph 2 and insert—
    '2. The Secretary of State may prescribe descriptions of persons by whom or bodies by which a scheme may be established and, if he does so, a scheme may only be established by a person or body of a prescribed description.'.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to discuss Government amendment No. 193.
    Mr. Major: Paragraph of schedue 1 provides a power to prescribe who may establish personal pension schemes. The amendments extend that power, adding a general power enabling requirements to be placed on personal pension schemes as a condition of them becoming appropriate to receive minimum contributions from the DHSS Newcastle. The amendments also reword paragraph 2 so that the Secretary of State need not exercise the power given there to prescribe who may establish a personal pension scheme if that proves unnecessary to enable the new providers—unit trusts, banks and building societies—to participate in personal pensions.
    Our intention is to use the power in the new paragraph 5(b) set out in amendment No. 193, to make regulations

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    about the form and nature of appropriate personal pension schemes. For example, they are likely to specify that schemes which are authorised unit trusts under the financial services legislation, or which offer special kinds of contract under insurance company legislation, may be appropriate. That approach will enable us to ensure that the investor protection provisions that apply to existing forms of investment business will apply automatically to personal pension schemes receiving the minimum contributions.
    We had a lengthy and interesting debate in Committee about investor protection and we regard that as critically important in the provision of pensions. I am sure that that view is supported by all hon. Members. Together with other legislation, for example the Building Societies Bill, the proposed regulations will show that the route for the new providers to become involved in the provision of personal pensions is by setting up or by being associated with suitable forms of investment business offering such pensions.
    Amendment agreed to.
    Mr. Newton: I beg to move amendment No. 3, in page 82, line 11 leave out paragraph 3.
    Mr. Deputy Speaker: With this it will be convenient also to discuss Government amendments Nos. 5, 8, 24 and 25.
    Mr. Newton: These amendments meet a point that was raised by Opposition Members during the Committee stage. The Government undertook to discuss these points with the parliamentary draftsmen. The amendments ensure that the minimum contributions to a personal pension scheme and the corresponding minimum payments and incentive payments to a money purchase occupational scheme are used for the benefit of the member concerned. That anxiety was expressed in an amendment in Committee. The amendment also paves the way for other amendments to clause 6 and schedule 2 which meet a related point raised in Committee by my hon. Friend the Member for Bristol, North-West (Mr. Stern).
    Appropriate personal pension schemes and money purchase contracted-out occupational pension schemes will not, as the Bill presently states, have to provide only money purchase benefits. They will also be able to provide some defined benefits provided that the minimum contributions are applied — subject to permitted administrative charges—to providing money purchase benefits. I hope that that explanation will assist the House to form a favourable view of the matter.
    Mrs. Beckett: I listened with interest to the Minister's explanation of the reasons for the amendment, and the debate affords an opportunity to the Opposition to draw attention to a couple of defects that we still see in the scheme.
    The Minister said that the amendment would allow occupational pension schemes to give defined benefits as well as only money purchase benefits, which might have been the case previously. We are concerned that the part of the Bill that is now being amended will allow schemes to be contracted out on the basis of minimum contributions rather than, as in the past, on the basis of the much higher standard of defined benefits.
    Most people who were anxious when the Government proposed the abolition of SERPS might have felt some
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    sense of relief that they now propose only to modify that scheme. But such relief will rapidly evaporate once it is realised that as a quid pro quo for having a modified earnings-related pension scheme within the state sector the standards that occupational pension schemes are expected to meet are significantly lowered. Rather than merely making the state pension worse, the Government have effectively lowered pensions right across the board, but, as that is the clear intention of their overall policy, I suppose we should not be surprised.
    The Minister also said that another intention of the amendments was to try to ensure that benefits were more definitely devoted to the interests of the member. That goes to the heart of our concern about the proposal to introduce personal pensions.
    In Committee it was noteworthy that all the amendments that sought to introduce some guarantee—even insurance—that people would not be able to sign away all their pension rights, thereby finding themselves destitute when they retired, were repulsed. The Government made it very clear that personal pensions were a risk — although they described it as an opportunity—and that the full burden of that risk should be borne by the individual who chose to take out a personal pension. To be completely fair to the Government, that was made plain in their first consultative document, but it has been far from the forefront of their remarks ever since.
    Mr. Freeman: As I did not serve on the Committee I did not have the benefit of hearing the arguments that I am sure the hon. Lady deployed with great skill. However, I am concerned about the line of her argument. She has expressed fears — which I do not share — about the introduction of personal pensions. This is a marvellous opportunity to encourage those who are not already in occupational pension schemes to make provision for themselves. Will the hon. Lady enlighten us by explaining the risk that she thinks will be borne by those who take out personal pensions? Perhaps she will bear in mind that before such a pension is taken out there are restrictions on those who may offer such schemes and limitations on the amount and timing of the benefit to be received. The hon. Lady should also bear in mind that those already in occupational pension schemes might think carefully about withdrawing from such generous schemes, particularly those which are non-contributory.
    Mrs. Beckett: I am grateful to the hon. Gentleman, who has led me to my next point. I shall tell him why the Opposition and others are concerned about personal pensions and why some of the major insurance companies have expressed reservations. I can do no better than quote the CBI. The hon. Gentleman may not have much sympathy with my views, but I am sure that he sympathises with the view of the CBI. It states that relying solely on personal pensions could leave people and their families less well off and inadequately provided for in later years because they do not provide a pension based on final salary or average earnings, as would an occupational pension; they do not include discretionary increases to keep pace with inflation; and they do not provide life assurance, and so on. The CBI also draws attention to the danger that younger employees may be tempted to leave their occupational pension schemes. When we are young, we are less worried about our pension provision and are

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    much more likely to be tempted by cash in the hand. Many people are extremely concerned about the dangers that could be incurred as a result of unwise investments.
    7.15 pm
    There are other problems, as well as the possibility of not getting an adequate pension because of poor investments. The Minister said that it was intended to try to obtain better value for money, but he must be aware that the overheads of personal pension schemes are likely to be substantially higher than those of occupational pension schemes, and infinitely higher than those of SERPS, which is the most efficient way of providing a good pension and good value for money. After all the things that they have said, it is extraordinary that a Conservative Government should be insisting on people getting poor value for their investments.
    There is the danger that people may be misled into taking out personal pensions, without realising the risks that they will incur. I draw the attention of the House to an advertisement that appeared shortly after we finished debating these matters in Committee. It is almost as misleading as an advertisement for pensions could be. It says that SERPS is unfair and poor value for money. That is totally untrue. Even Conservative Members would not argue that. They would complain that it is too good value for money, which is why it must be reduced. The advertisement lists all the advantages that would accrue to someone setting up or taking out a personal pension.
    One of the most disturbing things about that advertisement is that it is placed by a company which has in its title the word "Crown". Its logo is very like the HMSO logo. It looks very much like a Government-sponsored advertisement. But it is a misleading attempt to draw someone into taking out a personal pension that might well be to his or her disadvantage. I know that the Government intend to control misleading advertising, and the sooner they start the better.
    We are also concerned about what is likely to happen at a time when unemployment is high and is likely to remain high even when, after the next election, we have a Government who will bend all their efforts towards reducing it.
    In Committee we discussed whether the value of someone's personal pension would be treated in the same way as other insurance policies are now—for example, whether as a capital resource it would deprive someone of entitlement to income support, housing benefit, and so on. I am not sure whether the Minister has wholly met that concern, but we will not know what the dangers are until we see how the value of personal pensions is assessed.
    I am much more concerned about the fact that someone who is unemployed is unlikely to be able to maintain the contributions. People will then be in danger of effectively losing all of their supplementary pension entitlement.
    The hon. Member for Kettering (Mr. Freeman) spoke of the opportunity of encouraging people who have no occupational pension. But if, having taken out such a pension, they become unemployed for a sustained period and are forced to give up the scheme to which they have contributed, they will then have no state earnings-related supplement and no occupational pension supplement either. That is a serious danger that the Government have effectively ignored.
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    Later amendments deal with what the Government call a 2 per cent. incentive, but what we call a 2 per cent. bribe. The proposal to give people extra contributions to attract them into such schemes is particularly invidious because those people are in serious danger of providing themselves with an inadequate pension. It seems wrong for the Government to seek to give someone a cash incentive which will ultimately leave that person in poverty in retirement.
    I shall draw attention to the observations of the United Kingdom steering committee on superannuation about what are and what are not advantageous proposals and what is and what is not in the public interest. During the Committee stage, and again on report, that committee wrote saying that its views have not changed. It draws attention to the fact that, the Secretary of State has claimed that the proposals will foster industrywide schemes, but that it believes that damage could accrue to industrywide schemes, especially specialised ones for the police and firemen.
    In Committee the Minister said that no one in the police or the fire service would be so unwise as to leave an occupational pension scheme, and we hope that no one will do so. However, those who represent the police and firemen and their pension schemes are worried about the temptation to do so. They draw attention to the fact that contributions to the police scheme are 11 per cent. per annum for men and 8 per cent. per annum for women, and 10·75 per cent. per annum for both male and female fire fighters. Those figures represent considerable sums. such as would cover the cost of running a car. They think it is likely that some young people will be tempted to take out proposals of the type envisaged in this section of the Bill. Our anxiety, like theirs, remains unassuaged by our discussions in Committee.
    Although we shall not vote against the amendment, we believe that it is right to express our anxiety at the damage that the Government are doing to pension provisions.
    Mr. Freeman: I did not have the benefit of listening to the arguments of the hon. Member for Derby, South (Mrs. Beckett) in Committee, but I disagree with two of her criticisms of the provisions for personal pensions in this amendment, with which I agree.
    The hon. Lady cited the anxiety of the Confederation of British Industry, which I believe is misplaced. I have read the article in question. If I have understood her summary of the argument correctly, it is that if an individual leaves an occupational pensions scheme and makes a money purchase provision for his personal pension, it would not be as good as a final salary or defined benefit scheme. That misses two points.
    First, about 11 million employees — a goodly proportion of whom are admittedly on extremely low pay, such as married women who work, and for whom discussion of the provision of a personal pension is not entirely appropriate—are not covered by occupational pension schemes. Therefore, the introduction of personal pensions is a major breakthrough which will be popular with the electorate during the next few years and as the schemes get going. Those who are not covered by occupational pension schemes will mainly be attracted to personal pension schemes. Therefore, The CBI's argument is not relevant to them. Surely the objective is to bring in as many people as possible who have no provision made for them by their employer, perhaps

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    because they work in a small firm or for an employer who does not have a final salary scheme. Many small and medium firms have money purchase schemes only and do not have defined benefit and final salary schemes.
    Mrs. Beckett: I take the hon. Gentleman's point but I am sure he will recall the two arguments expressed by those worried about personal pension schemes. He said that many people did not have occupational pensions. We do not think it matters what type of pension one has, so long as it ensures an adequate income. We do not agree with the Secretary of State that sticking a different label on a rose makes it smell different. We believe that a poor occupational pension is disadvantageous. The hon. Gentleman also pointed to the stop in growth of occupational pensions. He will be aware that it is widely believed that, as the state scheme has been so good, there is no need for an expansion of occupational pension schemes.
    Mr. Freeman: My experience does not bear out what the hon. Lady says. It is wholly at variance with hers.
    Some analysis is needed of the central point of the hon. Lady's speech. She expressed the fear that some people would leave a relatively good occupational pension scheme which provides two thirds of final salary after 40 years of service and an indexed pension or one increased by a minimum of 5 per cent. per annum. She feared that people nearing retirement might be induced away from the relatively generous benefits of that scheme and seek to make their personal pension provision, ending up worse off than if they had remained in the occupational pension scheme.
    The fallacy of that argument is the implicit belief in a relatively high rate of inflation. The hon. Lady will agree that if one assumes that inflation will remain below 5 per cent. and an economic growth of 2 to 3 per cent. per annum, a money purchase scheme will provide adequate benefits compared with the best occupational pension scheme on a final salary basis. One would be substantially worse off only if there was a high rate of inflation. The Government's proposal contains the implicit assumption that inflation has been licked, thus providing the economic background for pension provision with inflation under control and sustained economic growth.
    We must consider the young person who leaves, or never joins, an occupational pension scheme, and makes his own personal pension provision. It must be remembered that we are not dealing with an economy where a person joins an employer at 18 and stays until he retires. We must deal with a flexible employment career where a person is in employment, is unemployed temporarily, and moves to a different employer. Gone are the days when a person joins an employer and remains with the company for the whole of his working life.
    I hope that before a young person opts out or decides not to join a generous occupational pension scheme, he will think carefully about it. He may decide not to join, based on a correct assessment of all the facts. Earlier I alluded to my belief that the literature presented by employers and those selling personal pensions should be clear and enable those who are considering them to reflect properly and with due regard to the seriousness of their decision. The legislation that the Government have enacted, coupled with the Financial Services Bill, fulfils those objectives.
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    The second objection of the hon. Member for Derby, South concerned what she described as the unemployment problem. We have unemployment problems, as dc many other countries in the Western world, but she must distinguish between the long-term unemployed and those who are moving out of employment temporarily and will go back into other employment.
    I grant that there is a problem in pension provision for the long-term unemployed. However, those who move out of employment for a few months before finding other employment, and who are making provision for their personal pension under a money purchase scheme, will find that when they go back into employment they can probably increase their contributions for a short time up to the Inland Revenue limits. That will allow them to catch up for the period when they were not making provision. Therefore, when it comes to retirement, their prevision will be adequate. The results of the original clause and the amendments now tabled to it are wise and beneficial and will be popular with the electorate.
    7.30 pm
    Mr. Newton: The hon. Member for Derby, South (Mrs. Beckett) ranged widely in her comments and made almost a Second Reading speech. I hope that she will not expect me to respond in the same way to everything that she said.
    Once again, in the Opposition's response to these amendments, which are quite modest in themselves, we have had a clear illustration of how they dislike offering people a wider choice in making provision for themselves and their pensions. The experience of the past 10 or 20 years shows that such behaviour will carry a penalty, in that it will make it more likely that people who should have access to occupational or personal pensions will not have such access, simply because schemes in which they could participate will not be there. We believe that it Js right to open up those choices, for the reasons on which my hon. Friend the Member for Kettering (Mr. Freeman), with his particular expertise, touched.
    We have to accept that many purchase schemes cannot, by definition, give the same guarantees that can, at least purportedly, be given by the state earnings-related pension scheme. Its ability to deliver depends on the capacity and willingness of future generations of taxpayers and contributors to find the money. We accept that there is a different balance of considerations for purchase schemes, occupational money purchase schemes and personal pension schemes. I hope the hon. Lady will at least acknowledge that although she talks relentlessly as if it were all downside risk, a good money purchase scheme or personal pension scheme will bring significant additional rewards for those who have made that choice. We simply think that those opportunities should be made available.
    I shall not proceed further down that almost Second Reading line of argument, but will move on to some more particular issues raised by the hon. Lady. Money purchase schemes, both occupational and personal pensions, will have to provide widows' and widowers' benefits in circumstances which parallel those required from salary-related schemes. The hon. Lady seems not to have sufficiently appreciated that point.
    The hon. Lady spoke about representations on behalf of some of the local government schemes. We have already made it clear that we do not expect people in good occupational schemes to leave them and take personal

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    pensions, and that would apply to the special pension schemes for policemen and firemen, which provide rapid accrual. It is significant that the examples quoted by the hon. Lady are all from the public sector, which returns us to my earlier point. Without the option of money purchase contracted out, there is no real prospect of the sort of growth in private-sector, industrywide schemes which we, and many others, would wish to see. As I understand what the hon. Lady was saying, she was not seeking to attack or resist our amendments, but rather to use them as a peg on which to hang some wider points. I commend the amendments to the House.
    Mrs. Beckett: With the leave of the House, Mr. Deputy Speaker, I shall make a few brief observations on what the Minister said.
    It still remains significant that the Government have refused at any stage to accept any proposal that people should have any minimal guarantee. In their consultation document, the Government said that if a personal pension scheme failed to provide people with adequate income, that would be hard luck. They did not phrase it quite like that, but that is what they meant.
    Both the Minister and the hon. Member for Kettering (Mr. Freeman) asked how anybody could think that people might get poor pensions. I draw the Minister's attention to the fact that when the Government initially put forward these proposals, everyone throughout the pensions world, and everyone who wrote to us or whom we consulted, could not understand why the Government were making these proposals, because they were likely to provide so much lower pensions than SERPS. Much of the comment on the Minister's consultation document drew attention to that fact. Therefore, it is not merely the Opposition who think that people are likely to get a lower pension as a result of these changes.
    The Minister talked about the way in which the Government wanted to extend freedom. That is an objective with which we agree. They want to extend the freedom to make people destitute in their old age. We see no qualms of conscience in resisting that.
    Amendment agreed to.
    Mr. Major: I beg to move amendment No. 4, in page 82, line 25 after 'member', insert—
    `(aa) of any income or capital gain arising from the investment of payments such as are mentioned in paragraph (a) above;'.
    In Committee hon. Members were concerned, as are the Government, to ensure fair and proper control of administrative charges. The amendment extends the power to control such charges in respect of personal pension schemes and contracted-out money purchase occupational schemes. The practical effect is to include in the controls any deductions from income and capital gains arising from investment of members' contribution. As the House will know, there is already a power in schedule 1(5) to control charges deducted direct from contributions or benefits.
    This new power is entirely beneficial to the potential holders of pensions. Without the extended power it might not be possible to make effective regulations controlling the administrative charges on schemes offering benefit in the form of a declared interest or bonus, for example with a with-profits insurance contract. In such cases, the
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    charges are not explicity or overtly deducted from contributions or benefits, but are taken into account in deciding what benefits or returns are declared.
    I must emphasise again, as we made clear in Committee, that all the power of schedule 1(5) may be kept in reserve if we are satisfied that the combined effect of disclosure and extra competition will be sufficient to keep charges down to reasonable levels. Equally, if we are not sure that that will happen, we shall not hesitate to exercise the power from the outset. The amendment ensures that the power will serve as a catch-all should we need to use it.
    Amendment agreed to
    Amendments made; No. 5, in page 82, line 31 at end insert—
    '5A.—(1) Subject to sub-paragraph (2) below, all minimum contributions which are paid to a scheme in respect of one of its members must be applied so as to provide money purchase benefits for or in respect of that member, except so far as they are used—

    (a) to defray the administrative expenses of the scheme; or

    (b) to pay commission.

    (2) If regulations are made under paragraph 5 above, minimum contributions may be used in any way which the regulations permit, but not in any way not so permitted except to provide money purchase benefits for or in respect of the member.'.
    No. 193, in page 82, line 31 at end insert—
    `5B. A scheme must satisfy such other requirements as may be prescribed.'.
    No. 6, in page 82, line 35 after `rights', insert 'to money purchase benefits'.
    No. 7, in page 82, line 38 after 'his', insert `to money purchase benefits'.
    No. 8, in page 83, line 7, after `member', insert `to money purchase benefits'.—[Mr. Major.]
    Mr. Newton: I beg to move amendment No. 9, in page 83, line 9, leave out 'or' and insert `and'.
    Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 10, 14, 15, 16, 17, 30, 31, 32, 33 and 106.
    Mr. Newton: Amendments Nos. 9 and 10 are minor drafting amendments. The Bill as drafted provides power to require that the protected rights which result from the minimum contributions to a personal pension scheme are calculated in a way approved by an actuary, and power to prescribe who may act in that capacity. it will not always be an actuary who is the appropriate person to ensure that the protected rights are calculated properly. In many money purchase schemes, it is more likely to be an accountant or auditor. The amendments generalise the power in the Bill, so that "persons" can be prescribed for this purpose. They also correct some minor drafting errors, bringing the wording into line with similar provisions about the calculation of transfer values in paragraph 14 of schedule 1 A to the Social Security Pensions Act.
    Amendments Nos. 14 to 17 and 30 to 33, among other things, meet a query which was raised by Opposition Members about the drafting of clause 5(9). They clarify the fact that someone other than the member himself or herself can top up the amount of a protected rights premium. They also correct other unintended effects of the drafting so that, where a person wishes to top up the premium, he need not include the value of his other rights

    85
    in the scheme if he does not want to; nor will he be obliged to make a topping-up payment just because he has expressed a wish to do so.
    These are matters of some complexity, but I hope that the House will accept that the amendments are moved in good will with the aim of doing good, and will accept my brief explanation.
    Amendment agreed to.
    Amendment made: No. 10, in page 83, leave out lines 11 to 21 arid insert—
    '(5) The power to make regulations conferred by sub-paragraph (4) above includes power to provide that protected rights such as are mentioned in sub-paragraph (2) above are to be calculated and verified in such manner as may be approved in particular cases—

    (a) by prescribed persons; or

    (b) by persons with prescribed professional qualifications or experience; or

    (c) by persons approved by the Secretary of State, and power to provide that they shall be calculated and verified in accordance with guidance prepared by a prescribed body.'.—[Mr. Major.]

    Mr. Major: I beg to move amendment No. 11, in page 83, line 26 leave out 'only'.
    Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendment No. 12.
    Mr. Major: Amendments Nos. 11 and 12 reorganise the order and wording of paragraph 8 of schedule 1 to ensure that it works properly as intended. They meet a point which was made by Opposition Members in Committee by clarifying that the pension or annuity paid to a widow or widower in respect of a person's protected rights in a scheme is subject to the same conditions as the pension or annuity paid to the member.
    That will be generally welcome to the Opposition. It responds to the anxiety that they expressed in Committee, and I commend the amendments to the House.
    Amendment agreed to.
    Amendment made: No. 12, in page 83, line 31, leave out from beginning to end of line 15 on page 84 and insert
    `or
    (b) in such circumstances and subject to such conditions as may be prescribed, by the making of a transfer payment—

    (i) to another personal pension scheme; or

    (ii) to an occupational pension scheme, where the scheme to which the payment is made satisfies such requirements as may be prescribed.

    (1A) If—

    (a) the rules of the scheme do not provide for a pension; or

    (b) the member so elects,

    effect may be given to protected rights by the purchase by the scheme of an annuity which—

    (i) complies with the requirements of sub-paragraphs (2) and (3) below; and

    (ii) satisfies such conditions as may be prescribed. (1B) If the annual rate at commencement—

    (1B) If the annual rate at commencement—

    (a) of a pension under sub-paragraph (1) above; or

    (b) of an annuity under sub-paragraph (1A) above, would not exceed a prescribed amount, effect may be given to protected rights by the provision of a lump sum calculated in a manner satisfactory to the Occupational Pensions Board by reference to the amount of the pension or annuity and payable on the date on which the member attains pensionable age or on such later date as has been agreed by him.

    (IC) If the member has died without effect being given to protected rights under sub-paragraphs (1), (1A) or (1B) above, effect may be given to them in such manner as may be prescribed.
    (1D) No transaction is to be taken to give effect to protected rights unless it falls within this paragraph.
    (1E) Effect need not be given to protected rights if they have been extinguished by the payment of a personal pension protected rights premium.
    (2) A pension or annuity complies with this sub-paragraph if—

    (a) it commences—

    (i) on the date on which the member attains pensionable age; or

    (ii) on such later date as has been agreed by him, and continues until the date of his death.

    (b) in a case where the member dies while it is payable to him and is survived by a widow or widower—

    (i) it is payable to the widow or widower in prescribed circumstances and for the prescribed period at an annual rate which at any given time is one-half of the rate at which it would have been payable to the member if the member had been living at that time; or

    (ii) where that annual rate would not exceed a prescribed amount, a lump sum calculated in a manner satisfactory to the Occupational Pensions Board is provided in lieu of it.'.—[Major.]

    Clause 3
    AMOUNT OF MINIMUM CONTRIBUTIONS
    Mr. Kirkwood: I beg to move amendment No. 160, in page 4, line 10, at beginning insert
    'subject to subsection (5) below'.
    Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 161, in page 5, line 4 at end insert—
    '(5) Subsection 1(b) above does not apply in respect of an earner who is a non-qualifying earner.
    (6) Regulations may provide for—

    (a) notice that an earner is a non-qualifying earner to be given to the Secretary of State by such person, in such manner and within such time as may be prescribed;

    (b) such additional modifications to the definition of "connected employer" as may be prescribed.

    (7) In subsections (5) and (6) above—
    "non-qualifying earner" means, in relatior to a tax week, an earner who at any time after 31st December, 1985 but before that tax week—

    (a) has elected to cease to be a member of a relevant scheme which is contracted-out in relation to his employment; or

    (b) does not fall within (a) above, has ceased to be a member of a relevant scheme which was contracted-out in relation to his employment but receives within six months of such cessation an offer of membership made by or on behalf of the trustees or managers of a related scheme by reference to which his employment would be contracted-out employment (if he accepted that offer) and does not within one month of its being made accept that offer.

    "relevant scheme" means an occupational pension scheme which is a contracted-out scheme under Part III of the Social Security Pensions Act 1975.
    "related scheme" means, where an earner has ceased to be a member of a relevant scheme which was contracted-out in relation to his employment, a relevant scheme which is for the time being specified in a contracting-out certificate issued to—

    (a) the person who was the employer of the earner in relation to his first period of employment; or

    (b) a connected employer,

    as a scheme by reference to which the earner's employment would be contracted-out employment if he became a member of that scheme
    connected employer" has the meaning given to it for the purposes of section 51A of the Social Security Pensions Act 1975 with such modifications as may be prescribed.'.
    Mr. Kirkwood: The House will realise that the amendments seek to change the Government's proposals to introduce an incentive for persons to move into personal pension schemes. The purpose of my amendment is straightforward. It is to restrict that 2 per cent. incentive—or, as some might describe it, bribe—to cases that I consider to be of genuine concern to the state. That means employees who are accruing benefits under SERPS and, therefore, increasing the state's long-term liabilities. The amendment seeks to do that by creating a new category of non-qualifying earners, or earners to whom the incentive will not be paid. Non-qualifying earners are people who opt for an appropriate personal pension although they are currently contracted out of SERPS and accruing guaranteed minimum pensions under contracted-out schemes.
    To pay the 2 per cent. incentive, or bribe, as required by clause 3 would be wrong for three reasons. First, the decision that people who are in that position must take is between an occupational pension scheme and a personal pension plan. It will not affect the long-term liabilities of the state earnings-related pension. It is essentially a choice between two forms of private sector saving. It is legitimate for people to make up their minds about that, but incentives funded by the state will merely upset the free market economy and the forces of free competition. It is strange for the Government — we rehearsed these arguments in Committee — to deny the free market economy and the forces of free competition.
    7.45 pm
    Secondly, the incentive is wrong because it is payable from the national insurance fund, which is contributed to by everyone through national insurance contributions and is effectively taxpayers' money. At a time when insufficient resources are available for all the demands placed on the social security system, it is wrong in principle and reprehensibly wasteful to use some of those resources to sway private sector decisions which will not reduce the state's liabilities.
    Thirdly, it is wrong to introduce the incentive because, whatever view one has of personal pensions — I am prepared to countenance them—there is a risk in taking out a personal pension contract. The rewards may be great, but in some cases the losses would seem fairly difficult to bear, especially for dependants and spouses, who may lose the minimum of the death benefits payable under contracted-out schemes. It is risky to induce people by means of an incentive payable from state funds to give up a guaranteed minimum pension.
    I believe that the amendment is legally permissible—at least I would not like to think there was a technical reason for refusing it — but it has an additional advantage in that it brings the incentive under clause 3, which is payable to those opting for personal pensions, more closely into line with that available in clause 7, which is payable to members of newly contracted-out occupational pension schemes. It is clear from examining the details of the clause 7 incentive that it is payable only where the member has not, since the beginning of this year, already been contracted out in the employment concerned under another occupational scheme. Therefore, it is intended only to persuade employers to take out of SERPS those employees who are accruing SERPS benefits.
    88
    The Government will be aware that they have caused much worry in the occupational pensions industry. I favour personal pension schemes, and it is right for people to have that choice, but I do not share the Government's confidence that occupational schemes can thole the results of the incentive, which puts them at a massive disadvantage.
    The occupational pensions industry is also worried about the restructuring effects of some company plans and schemes that may accrue from some of the take-up of the personal pension plans. The Secretary of State may become a victim of his success because if many people dive out of their present occupational schemes into personal pensions, it may destabilise the occupational pensions industry. That would be a retrograde step. The Government actuary may have underestimated the take-up of the scheme. If that is so, it would put at risk some of the valuable and good occupational pension schemes. That would be a retrograde step.
    Therefore, I hope that the Secretary of State will look carefully at the amendment. It is drafted with as much precision as possible. It seeks not to damage either personal schemes or occupational schemes, but to redress the imbalance and unfairness that I submit will be created by the introduction of the 2 per cent. incentive. I hope that the Government will look very carefully at this amendment.
    The Secretary of State for Social Services (Mr. Norman Fowler): The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said that he would broadly countenance personal pensions, which I interpreted as Liberal language for support, but then he made it quite clear that he favours the concept of personal pensions.
    The effect of his amendment would be to withhold the 2 per cent. incentive addition to personal pensions held by people who, since 1 January 1986, have opted to leave a contracted-out occupational scheme, or have refused to join one within six months of leaving another contracted-out scheme that is operated by the same or an associated employer. I shall deal in a moment with why I am not entirely happy with that formulation.
    We believe that it is important to give people the new option of a personal pension. At present the only alternative to remaining fully within the state earnings-related pension scheme is to belong to a salary-related occupational scheme. That option is open only to half of the work force. There are still "two nations" in pensions. That has been the case for the last 20 years. There are those who get a pension from their jobs and there are those who have no alternative but the state system.
    The provisions in the Bill will do a great deal to change that. It will be easier and more attractive for employers to provide schemes. They will be able to contract out without the open-ended commitment of providing the salary-related pension which must not deter many small employers. The rules for contracting out will be made much simpler for those who want to offer salary-related pensions.
    However, even those improvements do not go far enough. They will not give a pensions choice to everyone. Even with these reforms and changes, not all employers will offer schemes. In any event, occupational schemes may not be the best option for some people. To make choice for all a reality, we are seeking to allow people to contract out of the state scheme by choosing an individual

    89
    personal pension scheme with which to save for their retirement. The Bill will provide everyone with the opportunity to choose a personal pension and the type of body with which they want to save. It will give them some say in how their savings are invested and, above all, it will provide them with the scheme that suits them best.
    Most of those who are now in schemes are expected to stay in them. The market research that we carried out in 1983–84 showed a high level of satisfaction among scheme members, but many of those without an occupational pension, and others — such as those who expect to change their job frequently — will want to take advantage of the opportunity that personal pensions offer. For that reason, we have put forward personal pensions. The concept of personal pensions is accepted and recognised not just by the hon. Member for Roxburgh and Berwickshire but by the public and commentators generally.
    The 2 per cent. incentive payment, which is the guts of this amendment, is a small feature of the strategy to encourage the expansion of occupational schemes. When we reach clause 7, we shall explain why we think that an incentive is necessary to ensure the expansion of occupational schemes.
    Much the same reason lies behind our approach to personal pensions. Employees who are not in an occupational scheme already have access to a sort of personal pension—the so-called section 226 retirement annuity contract. However, its take-up has been very disappointing. Less than 5 per cent. of the employees who are not in schemes have taken out a section 226 policy, despite very generous tax treatment and the wide range of schemes that are on offer.
    There are features of the section 226 schemes that limit their attraction. They cannot be contracted out from SERPS and employers cannot contribute to them. The personal pensions that are provided for in the Bill will have a substantial edge on section 226 policies on both counts. They will be contracted out from SERPS, and we made it clear in the White Paper that the tax rules will allow employers to contribute to them. These improvements will make personal pensions a much more attractive investment than section 226 policies. However, we believe that something extra will still be needed to set the ball rolling. That is the reason for the 2 per cent. incentive.
    I do not believe that anyone has seriously argued that the 2 per cent. incentive will not be effective. The concern of the hon. Member for Roxburgh and Berwickshire, and of other hon. Members, is that it will be too effective. The hon. Gentleman referred to me as being the prisoner of my own success. The arguments that have been put forward at length tonight by various pensions industry spokesmen have been directed mainly at the fact that, as clause 3 stands, the 2 per cent. incentive will go to everybody with a personal pension, whether or not they were previously in a contracted-out occupational scheme.
    It has been claimed that this incentive will pose a serious threat to occupational schemes. Those claims are very much overdone, and I made my views clear in Committee. I view the claims made with a great deal of scepticism. I find it hard to believe that employees will be tempted out of a good occupational scheme just to take advantage not only of a modest incentive—2 per cent.—but of a temporary incentive, because it lasts only for five years. Employees may have other reasons for preferring a personal pension, such as the expectation that
    90
    they will frequently change their jobs. If they left an occupational scheme, they might be giving up the promise of pension contributions from their employer and they would have no statutory right of return to their employer's scheme. That is a matter that they will have to weigh in the balance.
    I acknowledge that there still fears in the pensions industry that the incentive will damage existing occupational schemes—for example, by tempting young employees out of occupational schemes. Those who take that view also voice doubts about the strength and sincerity of the Government's commitment to existing occupational schemes. Throughout the pensions inquiry we made it absolutely clear how strongly we value occupational schemes and how much we are indebted to them for the progress that has been made. It has never remotely been part of the Government's policy or approach to threaten their stability. Everything in the Social Security Act 1985—especially the improvements for early leavers—and the new requirements and options for occupational schemes in the Bill should considerably strengthen occupational schemes.
    I do not want to close the door to any change, and I shall think about what has been said. However, as it stands, the amendment is unacceptable. It would be far too rigid in its application. It would deny the incentive payment to someone who was in a contracted-out scheme for just a week — to someone who literally had joined a contracted-out scheme, had been a member of it for just a week and had then decided he had made the wrong decision and that he wanted to opt for a personal pension. I do not believe that the hon. Gentleman would want that kind of inflexibility to be incorporated in the Bill. I shall certainly think about what the hon. Member for Roxburgh and Berwickshire has said. He has made clear his support for the concept of personal pensions. I welcome that, and I believe that it will be a fresh and attractive option to the British public.
    Amendment negatived.

    Clause 5
    PERSONAL PENSION PROTECTED RIGHTS PREMIUM
    8 pm
    Mr. Major: I beg to move amendment No. 13, in page 6, line 12, after 'under', insert `section 52C of or'.
    Mr. Deputy Speaker: With this it will he convenient to take Government amendments Nos. 29 and 103.
    Mr. Major: Amendment No. 13 and the associated amendments are purely technical amendments which correct a possible inconsistency in the discharge of liability given to trustees or managers of schemes when a member's rights to benefits are secured by an insurance policy or annuity contract. The amendments make it clear that the purchase of such policies or contracts will also discharge trustees or managers of liability for the payment of state scheme premiums.
    Amendment agreed to.
    Amendments made: No. 14, in page 6, line 17, leave out
    'Subject to subsection (9) below'.
    No. 15, in page 6, line 21, leave out subsections (9) and (10).
    No. 16, in page 7, line 17, after 'premium', insert

    91
    `together with, if the person in respect of whom it falls to be paid gives notice to the prescribed person within the prescribed period—

    (i) the cash equivalent, calculated and verified in the prescribed manner and paid to the Secretary of State within the prescribed period, of any other rights which he has under the scheme and specifies in the notice, and

    (ii) the amount of any voluntary contribution paid to the Secretary of State within the prescribed period by, or in respect of, the person concerned.'.

    No. 17, in page 7, line 30, at end insert—
    '(15A) The power to make regulations conferred by subsections (8) and (12) above includes power to provide that cash equivalents are to be calculated and verified in such manner as may be approved in particular cases—

    (a) by prescribed persons;

    (b) by persons with prescribed professional qualifications or experience; or

    (c) by persons approved by the Secretary of State,

    and power to provide that they shall be calculated and verified in accordance with guidance prepared by a prescribed body.'.
    No. 18, in page 7, line 41. leave out subsections (17) to (19).—[Mr. Major.]

    Clause 6
    MONEY PURCHASE OCCUPATIONAL PENSION SCHEMES
    Mr. Major: I beg to move amendment No. 19, in page 8, line 21, leave out from 'effect' to end of line 24 and insert
    `to make amendments of the Social Security Pensions Act 1975 in relation to the contracting-out of schemes which provide money purchase benefits'.
    Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 20 to 23, 26 to 28, 35 and 38.
    Mr. Major: Amendment No. 19, with the extensive selection that follows it, appears at first glimpse rather daunting, but, in reality, it is not. The amendments simply make a number of drafting changes to clause 6 and schedule 2 so as to allow occupational pension schemes which provide money purchase and defined benefits to contract out by satisfying the money purchase conditions.
    I am grateful to my hon. Friend the Member for Bristol. North-West (Mr. Stern) for raising in Committee the position of such schemes. I explained at that time that we had received representations from the pensions industry on the same subject and we recognise that there is a clear case for allowing such schemes to contract out either by providing guarenteed minimum pensions, as they would have to do now, or by satisfying the new money purchase conditions. I said then that many detailed drafing amendments would be needed to achieve that object. The amendments in front of us are clear evidence that that supposition was correct.
    The amendments also have the virtue of meeting the point made by the hon. Member for Derby, South (Mrs. Beckett) that money purchase contracted-out schemes should not be exempt from section 40(1) of the Pensions Act. That section required that a contracted-out scheme is financed at least in part by the employer. I promised that we would consider what the hon. Lady said about that. When we did we found that it made good sense. I am grateful to the hon. Lady. I commend the amendment to the House.
    Amendment agreed to.

    Schedule 2
    MONEY PURCHASE OCCUPATIONAL PENSION SCHEMES
    Amendment made: No. 20, in page 85, leave out lines 34 and 35 and insert
    'an occupational pension scheme which, in relation to the earner's employment, is a money purchase contracted-out scheme, then, for the purposes of this section'.
    No. 21, in page 86, line 17, leave out from `to' to 'scheme' in line 19 and insert
    'a money purchase contracted-out'.
    No. 22, in page 87, line 30, leave out paragraph 5.
    No. 23, in page 88, line 2, leave out from 'schems)' to end of line 11 and insert—

    '(a) in subsection (2), the words "or it satisfies subsection (2A) below." shall be inserted after paragraph (b) (but not as part of it);

    (b) the following subsections shall be inserted after that subsection—

    "(2A) An occupational pension scheme satisfies that subsection only if—

    (a) the requirements imposed by or by virtue of Schedule 1 to the Social Security Act 1986, modified under subsection (2B) below, are satisfied in its case;

    (aa) it complies with section 40(1) below; and'.

    No. 24, in line 25 leave out 'and' and insert—
    `(aa) that for the references in paragraph 5A to all minimum contributions there shall be substituted references to all minimum payments (within the meaning of the Social Security Pensions Act 1975) and any payments by the Secretary of State under section 7 of this Act.'.
    No. 25, in line 33 leave out from 'the' to 'which' in line 34 and insert 'member and any rights of the member to money purchase benefits'.
    No. 26, line 43, at end insert—
    '(2C) A contracting-out certificate shall state whether the scheme is contracted-out by virtue of subsection (2) or subsection (2A) above; and where a scheme satisfies both of those subsections the trustees or managers, in their application for a certificate, shall specify one of the subsections as the subsection by virtue of which they desire the scheme to be contracted-out.
    (2D) A scheme which has been contracted-out by virtue of one of those subsections may not become contracted-out by reason of the other, except in prescribed circumstances.'.
    No. 27, line 43, at end insert—
    '6A.—(1) The words "which is not a money purchase contracted-out scheme" shall be inserted after the words "occupational pension scheme" in—

    (a) section 33(1);

    (b) section 36(1);

    (c) sections 40(3) and (4);

    (d) section 41A(1);

    (e) section 42(1);

    (f) section 44(1);

    (g) section 44A(1);

    (h) section 45(1);

    (j) section 51;

    (k) paragraphs 4(1) and (2) of Schedule 2.

    (2) If section 9 above comes into force after this paragraph, the amendment to section 36(1) made by sub-paragraph (1) above shall be made in the subsection both as amended by section 9 above and as unamended.
    (3) The words "or a money purchase contracted-out scheme" shall be inserted after the words "public service pension scheme" in—

    (a) section 40(2);

    (b) section 41(1);

    (c) section 41E(1).'.

    No. 28, line 45 leave out from 'a' to end of line 46 and insert
    'scheme which is or has been a money purchase contracted-out scheme'.
    No. 29, in page 89, line 20 after 'under', insert 'section 52C of or'.
    No. 30, in line 32 leave out 'Subject to subsection (8) below,'.
    No. 31, in line 37 leave out from beginning to end of line 6 on page 90.
    No. 32, in page 90, line 32 after 'premium', insert 'together with, if the person in respect of whom it falls to be paid gives notice to the prescribed person within the prescribed period—

    (i) the cash equivalent, calculated and verified in the prescribed manner, and paid to the Secretary of State within the prescribed period, of any other rights which he has under the scheme and specifies in the notice; and

    (ii) the amount of any voluntary contribution paid to the Secretary of State within the prescribed period by, or in respect of, the person concerned,'.

    No. 33, in line 47 at end insert—
    '(14A) The power to make regulations conferred by subsections (7) and (11) above includes power to provide that cash equivalents are to he calculated and verified in such manner as may be approved in particular cases—

    (a) by prescribed persons;

    (b) by persons with prescribed professional qualifications or experience; or

    (c) by persons approved by the Secretary of State,

    and power to provide that they shall be calculated and verified in accordance with guidance prepared by a prescribed body.'.
    No. 34, in page 91 leave out lines 10 to 30.
    No. 35, in page 91, line 46 leave out from beginning to end of line 25 on page 92 and insert—
    '(a) the following paragraph shall be substituted for subsection (1)(b)—
    "(b) there has not been a payment—

    (i) of a premium under section 44 above in respect of each person entitled to receive, or having accrued rights to, guaranteed minimum pensions under the scheme; or

    (ii) a premium under section 44ZA above in respect of each person who has protected rights under it or is entitled to any benefit giving effect to protected rights under it;";

    (b) in subsection (2)(a) after the word "above" there shall be inserted the words "or, by virtue of subsections (2A) and (2B) of section 32 above, paragraph 9(1) of Schedule 1 to the Social Security Act 1986"; and
    (c) in subsection (5), "32" shall be substituted for "33".
    10. At the end of subsection (3) of section 50 (alteration of rules of contracted-out schemes) there shall be added the words "or any person has protected rights under it or is entitled to any benefit giving effect to protected rights under it".'.—[Mr. Major]
    Mr. Major: I beg to move amendment No. 36, in page 92, line 26, at end insert—
    '() the following definition shall be inserted after the definition of "accrued rights"—"'average salary benefits' means benefits the rate or amount of which is calculated by reference to a member's average salary over the period of service on which the benefits are based;";'.
    Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 37, 94, 96 and 104.
    Mr. Major: The effect of amendment No. 36 and the related amendments is to alter the definition of "money purchase benefits" in all the places where it appears in the Bill and in the Pensions Act 1975 so as to ensure that it does not include "average salary benefit".
    A few schemes provide what are known as "unrevalued average salary benefits", where members pay a percentage of their earnings as a contribution, and the benefits are then calculated as a straightforward multiple of those contributions. These are not "money purchase benefits" in
    94
    the sense we intend in the new pension arrangements provided by this Bill, because they are fixed in value and there is no element of investment return. In effect they are salary-related benefits.
    These amendments make sure that they are excluded from the definition of "money pruchase benefits", so that—for example—they are not satisfactory benefits for the purpose of money purchase contracting-out, and minumum contributions cannot be channelled into this kind of benefit.
    Amendment agreed to.
    Amendments made: No. 37, in page 92, line 35, at end insert
    'other than average salary benefits;'.
    No. 38, in line 36 leave out from 'purchase' to end of line 38 and insert
    '"contracted-out scheme" means an occupational pension scheme which is contracted-out by virtue of satisfying section 32(2A) above'.—[Mr. Major.]

    Clause 7
    SCHEMES BECOMING CONTRACTED OUT BETWEEN 1986 AND 1993
    Mr. Major: I beg to move amendment No. 39, in page 8, line 25, after 'below', insert
    'and except in such cases as may be prescribed'.
    The amendment provides a power to make exceptions to the circumstances in which the 2 per cent. incentive payment will be made to newly contracted-out occupational pension schemes.
    At present the Bill provides in clause 7 for the incentive payment to go to schemes which are newly contracted-out since January 1986 in respect of each job they cover which is also newly contracted-out since then. The incentive will apply for the five years, April 1988 to April 1993, as the House will be well aware.
    There are cases where it will not be appropriate to make the payment. For example, it will not be appropriate where there might be a business take-over of a firm which had a contracted-out scheme for its employees. This might result in employments and a scheme which were newly contracted-out in the strict legal sense, but which were really the same jobs as before. It would not be appropriate to pay the incentive in this case. I think that I will carry all hon. Members with me in that observation.
    The amendment provides the power to clarify that position beyond doubt, and I commend it to the House.
    Amendment agreed to.
    Sir David Price: I beg to move amendment No. 195, in page 8, leave out from end of line 28 to first 'the' in line 30.
    Mr. Deputy Speaker: With this it will be convenient to take amendment No. 196, in page 8, leave out lines 37 to 40.
    Sir David Price: As the House will appreciate, these are probing amendments. They follow logically from the amendments moved by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). They are, as it were, the other side of the coin. They are an alternative method of dealing with the problems that he identified, to which my right hon. Friend the Secretary of State responded with sympathy and understanding, and even with a promise that the last word had not been said on that. It is in that spirit that I can be remarkably brief, which will be to the relief of the entire House.

    95
    The purpose of my amendment is to offer a subsidy to all those who contract out of SERPS, whether they go to the occupational scheme or the personal pension scheme. In other words, the amendment takes up my right hon. Friend's concern about those people who have neither an occupational pension scheme nor a personal pension scheme. We know, as he pointed out in his Green Paper, that that has been a static situation for the past 10 years. All of us who care about the second pension want to see that opportunity opened up further. Part of the purpose of this Report stage is to throw out to my right hon. Friend different methods by which that can be achieved.
    If my amendments were to be accepted they would avoid discrimination against those employees who have already joined occupational schemes. They would also avoid the undermining of such schemes, which in many cases have been set up with great care to ensure that members get the best possible pensions in later years.
    The hon. Gentleman dwelt a little on that point. I shall not detain the House on it. I am sure that my right hon. Friend and his Department know my point. There is a feeling in the occupational pensions industry that particularly young members of this scheme could leave their existing scheme, go into a personal pension scheme and find themselves in the long run worse off, although in the short run they might contribute less. The House will understand that retirement is probably a more real matter to me than to the hon. Gentleman, who, I suspect, is a year or two lighter than I am. One should reflect on the measure of the scope of a pension scheme.
    I think that most hon. Members would feel that any form of occupational or personal pension scheme should provide for a proper pension. Ideally, the best way is based on final salary or average earnings. It should include discretionary increases to keep pace with inflation. It should provide life assurance benefit, which is a new practice that has come in more recently. It should allow for earlier retirement, and it should provide widow's benefit. Those are the sorts of features that most of us today expect to see in pension schemes.
    The case has not been made for discriminating in the incentive between either the occupational or the personal scheme. The object of my amendments is simply to raise the possibility that it would be better to give the incentive to both rather than to discriminate purely in favour of the personal scheme.
    Mr. Fowler: There is no difference of opinion between my hon. Friend and me, because we both want to encourage the maximum number of good occupational pensions. The effect that my hon. Friend intends to achieve by this amendment seems to be that all members of all contracted-out occupational pension schemes should be able to qualify for the 2 per cent. incentive payment which is at the moment intended only for new schemes and newly contracted-out jobs. I am afraid I have to use the time-honoured phrase that the amendment is technically defective and would not achieve what is desired.
    We estimate that at the moment the 2 per cent. incentive for pensions might cost about £60 million per year under our proposals. We further estimate that the amendment would increase the cost to about £1·5 billion per year and would mean nearly 1 percentage point more on national
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    insurance contributions. For that variety of reasons I must upstage my hon. Friend and tell him that I am not able to accede to his request.
    I think I have made it clear to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) that I do not want to close the door on any change in the area of the 2 per cent. incentive. I shall reflect not only on what he has said, but on what my hon. Friend has said, and especially on the principle of what my hon. Friend has set forward. Perhaps my hon. Friend will understand if I advise the House to resist his amendment.
    Sir David Price: Given the spirit of my right hon. Friend's reply, and in the knowledge that I am probably being rather more generous than usual in pushing my luck with the Treasury, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Amendment made: No. 190, in page 9, line 46 (Clause 7], at end add—
    `(7) If the Secretary of State makes a payment under this section which he is not required to make, he may recover the amount of the payment from the person to whom he paid it or from any person in respect of whom he paid it.
    (8) If he makes in respect of an earner a payment under this section he is required to make, but does not make it to the trustees or managers to whom he is required to make it, he may recover the amount of the payment from the person to whom he paid it or from the earner.'.— [Mr. Fowler.]

    Clause 9
    GUARANTEED MINIMUM PENSIONS
    Mr. Major: I beg to move amendment No. 40, in page 10, line 31 leave out first 'subsection' and insert 'subsections'.
    Mr. Deputy Speaker: With this we may take Government amendment No. 41.
    Mr. Major: This amendment relates to the growth of guaranteed minimum pensions when receipt of the pension is postponed beyond the normal retirement age. The amendment ensures that when those increments are calculated they are based on the value of the guaranteed minimum pension as increased annually by the lesser of 3 per cent. or the increase in prices during the period in which it was postponed, and not on its value at pension age. This corresponds with the arrangements for SERPS increments. It has always been the intention that the increments would be worked out in this way, but the amendment puts the matter beyond doubt. It is a wholly beneficent amendment for pensioners.
    Amendment agreed to.
    Amendment made: No. 41, in page 10, line 37, at end insert—
    '(6B) Where one or more orders have come into force under section 37A below during the period for which the commencement of a guaranteed minimum pension is postponed, the amount of the pension for any week in that period shall be determined as if the order or orders had come into force before the beginning of the period.'.—[Mr. Major.]
    Mr. Newton: I beg to move amendment No. 42, in page 11, line 36, at end insert '() section 26(2);'.
    Mr. Deputy Speaker: With this we may take Government amendments Nos. 43 to 45.
    Mr. Newton: This technical amendment ensures that the definition of a guaranteed minimum pension in section

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    26(2) of the Social Security Pensions Act 1975 is widened to cover widowers as a result of the introduction of widowers' guaranteed minimum pensions by clause 9(3).
    Perhaps I might also say a brief word about amendments Nos. 43, 44 and 45. The intention of amendment No. 43 is to make it clear that schemes are not required to increase the rate of guaranteed minimum pension under clause 9(7) for periods before pensionable age or date of widowhood. Arrangements already exist for protecting the value of guaranteed minimum pensions before those times.
    As guaranteed minimum pension increases will take place from the beginning of a tax year, but the uprating of state pensions will not take place until the first Monday of a tax year, the guaranteed minimum pension increase will, in some years, be a week earlier than the state scheme uprating. This amendment ensures that where this happens the pensioner's SERPS pension is not reduced on account of the guaranteed minimum pension increase until his SERPS entitlement has been uprated. This will prevent his net SERPS pension temporarily going down.
    Amendment No. 45 is a minor technical amendment. It simply widens the scope of the cross reference in subsection (7) of new section 37 so that it refers to the whole section rather than to subsection (3). That sounds rather like the ultimate drafting amendment.
    Amendment agreed to.
    Amendments made: No. 43, in page 12, line 38, leave out from 'rate' to end of line 41 and insert
    'of that part of guaranteed minimum pensions which is attributable to earnings factors for the tax year 1988–89 and subsequent tax years for—

    (a) earners who have attained pensionable age; and

    (b) widows and widowers.'.

    No. 44, in page 13, line 10, at end insert—
    '(6A) Where the benefits mentioned in sections 16(2B). 28(7A) and 59(1A) of the Social Security Act 1975 and section 29(1) above are not increased on the day on which an order under this section takes effect, the order shall be treated for the purposes of those subsections as not taking effect until the day on which the benefits mentioned in them are next increased.'.
    No. 45, in page 13, line 13, leave out 'subsection (3) above' and insert 'this section'.—[Mr. Newton.]
    8.15 pm
    Mr. Major: I beg to move amendment No. 46, in page 14, line 5, leave out
    'increase the rate of pensions under the scheme'
    and insert
    'make an increase in the rate of pensions currently payable to the members of the scheme who have attained pensionable age or to the widows or widowers of members'.
    Mr. Deputy Speaker: With this we may take Government amendments Nos. 47 and 48.
    Mr. Major: These technical amendments correct defects in drafting and clarify the arrangements for annual increases of guaranteed minimum pensions, with particular regard to those occupational pension schemes which already provide increases in the rates of their pensions, so that they do not have to provide two separate increases in a year.
    Amendment agreed to.
    Amendments made: No. 47, in page 14, line 9, leave out
    'in that tax year to make under this section'
    and insert
    'to make under this section in the tax year 1990–91'.
    No. 48, in page 14, line 10, leave out from 'Where' to `the' in line 12 and insert
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    'the trustees or managers of such a scheme make an increase otherwise than in pursuance of this section in a tax year subsequent to 1989–90, they may deduct the amount of'.—[Mr. Major.]
    Mr. Newton: I beg to move amendment No. 49, in page 14, line 15, at end insert—
    '(8) In section 59 of that Act (increase of official pensions) the following subsection shall be inserted after subsection (5) —
    "(5A) Nothing in section 37A(12) or (13) above authorises any deduction from an increase in the rate of an official pension under this section.".
    (9) In section 59A of that Act (modification of effect of section 59(5)) the following subsection shall be inserted after subsection (2)—
    "(2A) Where in any tax year—

    (a) an increase is calculated in accordance with a direction under this section; and

    (b) the amount by reference to which the increase is calculated, or any part of it is increased in that tax year under section 37A above,

    the increase calculated in accordance with the direction shall be reduced by the amount of the increase under section 37A above.".'.
    This is a technical amendment which ensures that special arrangements which currently apply to the inflation proofing of the guaranteed minimum pension element of a public service pension continue to work when public service schemes become responsible for increasing the GMP by up to 3 per cent. under clause 9(7). The amendment ensures that the public service pensioner will continue to receive full inflation proofing of his occupational pension.
    Amendment agreed to.
    Mr. Major: I beg to move, amendment No. 50, in page 14, line 15, at end insert—
    '(14) Where by virtue of subsection (12) or (13) above guaranteed minimum pensions are not required to be increased in pursuance of this section, their amount shall be calculated for any purpose as if they had been so increased.'.
    The purpose of this amendment is to make it clear that although schemes need not increase the GMPs separately from the remainder of the occupational pension, the GMP's value shall nevertheless be calculated, for all purposes, as if it had been separately increased each year.
    The reason for the amendment is to make it clear to contracted out occupational schemes that although they need not increase GMPs in April of each year if they have already provided for an increase in the rate of pension in the preceding year, the pension from then on must always include the GMP element as increased in line with the lesser of the RPI or 3 per cent. This will also be the amount that will be deducted from the pensioner's SERPS pension and the amount that a scheme must secure or buy back from the state scheme if they cease to be contracted out.
    Amendment agreed to.

    Clause 11
    CONTRIBUTIONS
    Mr. Newton: I beg to move amendment No. 51, in page 14, line 21 leave out from 'prescribed,' to end of line 26 and insert
    `and except so far as is necessary to ensure that a personal or occupational pension scheme has, or may be expected to qualify for, tax-exemption or tax-approval, the rules of the scheme—
    (a) must not impose, or allow any person to impose, any upper or lower limit on the contributions which may be paid by a member and which are additional to the contributions that must be paid as a condition of membership of the scheme;'.

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    This is a drafting amendment which replaces some of the opening words of clause 11. The Inland Revenue applies limits to the total amount of benefit a person can receive from a pension scheme, as well as to the contributions he can make to it. It is therefore necessary to allow both these kinds of limit to constrain the otherwise unlimited "additional voluntary contribution" facility which schemes will now be required to provide. As currently drafted, clause 11 would allow only the Revenue contribution limits to be observed.
    The amendment also improves the drafting of clause 11(1)(a) to achieve the intended effect that, apart from complying with Revenue requirements, the rules of a pension scheme must not impose, or allow anyone to impose, an upper or lower limit on the additional voluntary contributions which may be paid.
    Amendment agreed to.

    Clause 14
    TERMS OF CONTRACTS OF SERVICE RELATING TO MEMBERSHIP
    Mr. Major: I beg to move amendment No. 52, in page 17, line 13, after `made)', insert
    'or any rule of a personal or occupational pension scheme'.
    Mr. Deputy Speaker: With this we may take Government amendments Nos. 53 to 55.
    Mr. Major: The amendments make drafting changes to clause 14, which liberates employees from compulsory membership of an occupational pension scheme. In Committee my hon. Friend the Minister for Social Security said that we were discussing the wording of the clause with the parliamentary draftsman to ensure that it achieved our intention. The amendments are the result of that discussion.
    The amendments tighten up the wording in three ways. First, they ensure that scheme rules, as well as contracts of service, cannot provide for compulsory membership of a pension scheme. Secondly, they ensure that, subject to any prescribed exceptions, the rules or contract cannot insist that the employee belongs to any pension scheme at all, personal or occupational. Thirdly, the amendments to clause 14(2) ensure that the clause could not have the unintended and unwelcome effect of requiring an employer to increase pay in lieu of pension contributions for an employee who decides not to join his scheme.
    Amendment agreed to.
    Amendments made: No. 53, in page 17, line 14, after 'of', insert
    'a personal or occupational pension scheme, of'.
    No. 54, in page 17, line 24, after 'required', insert
    ', when he would not otherwise be'.
    No. 55, in page 17, line 26, leave out
    'when he would not otherwise be so required'.—[Mr. Major.]

    APPLICATION TO SPECIAL CASES
    Amendment made: No. 56, in page 18, line 11, leave out clause 16.—[Mr. Major.]

    Clause 17
    RETIREMENT PENSIONS
    Mrs. Beckett: I beg to move amendment No. 57, in page 19, line 12, leave out clause 17.
    Mr. Deputy Speaker: With this, we may take amendment No. 58, in page 20, line 14, after 'cases', insert
    'which shall include unemployed people'.
    Mrs. Beckett: If we had to pick out the most obnoxious aspect of the clause—and, given the time constraints, we can pick out only one aspect—we would say that the most disadvantageous proposal is the change not merely away from the calculation of pensions on the basis of the 20 best years of earnings but right away from that to the calculation of pensions on the basis of earnings over a person's whole working life.
    I have never fully understood, nor do I recall having heard an argument on the matter from the Government, why if, as they argue—we do not accept their argument—one of the reasons why SERPS is so expensive is the 20-years provision, they did not merely increase it to a degree without going as far as the increase proposed in clause 17.
    The intention in making SERPS dependent on the best 20 years of earnings was a redistributive intention, aimed at benefiting people who, on the whole, did not enjoy a good pension entitlement. For example, the earnings of manual workers tend to reduce as they get older and it was suggested that they should be allowed to have a pension that was more related to the peak years of their earnings than would be the case under the scheme such as that proposed by the Government. Another example are women who take years out of the employment market and get a better pension by using the earnings of their best 20 years rather than the earnings over their whole working life.
    We are very worried about the implications of the Government's proposals and we are convinced that they will lead to far more pensioners being dependent on what we must learn to call income support. The Government have said in a parliamentary answer that about 1 million pensioners will still be dependent on supplementary benefits at the end of the century. We firmly believe that the number in that equivalent position — below the poverty line with their pension entitlement — will be significantly higher than 1 million after the Bill becomes law. We are encouraged in that supposition by the fact that the Government say that it is too difficult to answer all the questions that we have tabled on the subject, no matter how we have phrased them.
    A person who starts work after the Bill becomes law and is never unemployed or sick will find that the pension to which he would have been entitled before this measure became an Act will be halved. Indeed, that person's pension entitlement will be so reduced from what it would otherwise have been that, even on the Government's own figures, it is likely to be substantially less than even the basic state pension alone is worth today. We have substantial ammunition for our contention that the Government are returning pensioners to the poverty from which the scheme was designed in 1975 to rescue them — an intention which Conservatives supported at the time, but from which the Government have resiled.

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    People who have many years of unemployment will see their pensions reduced even more than the halving that is implicit in the Bill. Figures show the impact of the Government's proposals on someone who is unemployed for the comparatively short time of three years or six years. Obviously, those are much longer periods than any of us would find acceptable, but when we see the thousands of young people who have never had a job since they left school, one has to wonder how realistic it is to assume that they will be unemployed for as short a period as three years or six years over their whole working lives.
    Let us examine the case of a man who was 27 in November 1985 and who earns £120 a week for 23 years and £80 a week for another 23 years—perhaps because he is a manual worker and his earning capacity declines as he gets older—and has three years unemployment at some point in his working life. His additional pension will be reduced from £51·70 to £21·70. In other words, a young man now in the labour market who is unemployed for two or three years, could work for 46 years and still lose 58 per cent. of the additional pension to which he would otherwise be entitled. I am sure that that proposition would be greeted with amazement, shock and dismay by any of our constituents.
    If that man spent six years unemployed, he would receive only £19·70 — a loss of 62 per cent. of the pension to which he would otherwise be entitled. Those are significant sums and they demonstrate the impact of unemployment on a person's pension entitlement.
    Let us now examine the case of a woman who was 27 in 1985 and earns £80 a week for 24 years and £40 a week for 12 years and who, for eight years—for whatever reason—has no earnings. Her additional pension will drop from £17·70 to £9·70—a loss of 45 per cent. If she spent another six years unemployed her expected £15·70 would become £7·70—a loss of 51 per cent. We are talking about substantially reduced pensions which will be further dramatically reduced by the problems of unemployment which are so prevalent.
    In addition to the implications for people who are unemployed. women who work part-time are likely to lose substantially under the Bill. Women who work part-time, but have earnings above the lower earnings limit, will not be able to benefit from the home responsibility premium, and will not be covered by being out of the work force altogether, but will have the years in which they have part-time earnings taken into account—adding to their years in the work force, but incorporating lower earnings because they are working only part-time. Proportionately, they will lose substantially. The disabled are also likely to be losers. When we raised this point in Committee, the Minister said that half the women now in part-time work earned less than the lower earnings limit. He was good enough to say that that might not be a good thing. That may sound as though it is not too bad, but he failed to point out that although half of the women in part-time work would not be affected because their earnings were so low, 2·25 million women in part-time work would still be affected, and would see their pension entitlement reduced.
    8.30 pm
    Mr. Major: Many of those women would be in receipt of child benefit and would be receiving, therefore, home responsibilities protection. That should be borne in mind.
    Mrs. Beckett: That may be so, but it is not clear how many women will be affected. The figure of 2·25 million
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    is so substantial that obviously many women will be losers. At present, 40 per cent. of elderly women live at, or below, the supplementary benefit level. Millions more pensioners will be living at or below the poverty line as a result of the Bill, and as a result, in particular. of these provisions. Moreover, a significant number of them will be women. Instead of seeking to improve the clause, we have sought to delete it, as it contains proposals that are unbelievably damaging to the pension entitlement and standard of living of future pensioners.
    The Government's proposals seem to tie in well with the Government's other actions, with their intention to keep wages low, and with their attacks on the trade unions. Apparently, they want to return to the days when ordinary working people spent much of their lives in fear of unemployment, sickness, a lack of decent housing or not being able to educate their children properly. This provision returns us to the days when people lived in fear. They will start wondering how long they will live, how they will eke out their savings and how they will manage in their retirement. There is no doubt in our minds that the Bill returns us to the days of poverty pensioners.
    Mr. Jim Lester: I would not go as far as the hon. Member for Derby, South (Mrs. Beckett) in her opposition to the clause. As we know, the Bill changes the calculation of the additional payment under SERPS from the best 20 years to a lifetime's average earnings. The present scheme only requires contributions over 20 years for a full additional pension, but now contributions will be required over a lifetime. Therefore, those who, for any reason, spend years out of the work force could be disadvantaged. Indeed, in many parts of the country, such as the east and west midlands, unemployment is endemic. The new provision is therefore of considerable concern. Anyone who left the work force could be disadvantaged if he retired after 1998.
    The Government have acknowledged that some categories should be protected. For example, they say that they will protect the position of married women and lone parents, and that special arrangements will be made for those who take time away from work to bring up children. I am glad to say that similar protection will be given to disabled people and to those who are not earning money because they are looking after them. That is fine, but I have tabled my amendment because unemployed people will not be afforded the same protection.
    I have enormous respect for my hon. Friend the Minister of State. In Committee, he said:
    "Therefore while I do not in any way suggest that there may not be a problem in relation to this group in the early part of the next century, I think that it is a problem which can sensibly be examined in relation to the unemployment problems that exist at that time and is not one which we need to settle at this time."—[Official Report, Standing Committee B; 25 February 1986, c. 439.]
    I take exception to that. Obviously, we are trying to look a long way ahead. But my hon. Friend the Minister admitted that the Government sometimes had to make forward commitments, not least in respect of social security and pensions. He said that of necessity they had to be considered in the long term. I hope to persuade my hon. Friend to give a public commitment that the unemployed will have their situation taken into account when the time comes.
    The House should not accept that people are unemployed through their own deficiencies. The majority

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    of those who are unemployed have been made redundant. Consequently, I cannot see why those retiring should be additionally disadvantaged because they happen to come from an area of high unemployment. It is quite unacceptable to me that the 4,028 unemployed people in Broxstowe should be treated differently from those in the constituency of my hon. Friend the Member for Crawley (Mr. Soames), where far fewer people are unemployed. Why should people be additionally disadvantaged in retirement because they work in Cornwall, where the highest rates of unemployment were found in March to be 28·4 per cent. in Newquay, as against 5·6 per cent. in Crawley?
    Under the Bill, standard national insurance contributions are credited towards the basic state pension. Unemployed people can receive those credits. Thus, the Bill does not exclude them in the sense that the credits will not be allowed. The difference is in the earnings-related element. I should be delighted if the Government would correct my understanding that they intend to exclude the credits at a later regulatory stage. At this stage, I should like a commitment from my hon. Friend the Minister that he will not exclude unemployed people in terms of a special calculation for the period that they are unemployed.
    If the Government do not make that change, many people may be disadvantaged. Figures have been extrapolated for the number of those who may be unemployed for more than a year. They are based on the Department of Employment Gazette 1986. For 1996, the figure is 757,924; for the year 2006, the figure is 786,260; and for the year 2016, the figure is 1,160,667. Thus we are talking about substantial numbers. Unless the Government give a commitment to take into account a period of unemployment, just as married women and the disabled are taken into account, the unemployed may be materially disadvantaged.
    Among those unemployed people whose pension rights will be reduced may be older men and women in their fifties who have little chance of further employment before retirement. Some men who accept voluntary or forced retirement at 60 will be able to claim the lower rate pensioner premium in income support until they qualify for the basic state pension at 65. Their entitlement to the full basic pension will not be affected by years without work, but as each year goes by they will know that the expected additional pension will decrease. That is in sharp contrast to many people in occupational, contracted-out pensions who will receive a full pension after 40 years and the qualifying conditions for the basic rate pension will ensure that, for those whose working life is 41 years or more, the full pension can be received after a working life minus five years.
    The Prime Minister said at Perth that unemployment was an issue and a dragon to be slain. The Government have done many things to ease unemployment through training schemes and community programmes, but that will count as little if the Bill discriminates against the unemployed in relation to the state earnings-related pension. I request that the Minister responds positively to the amendment because not only is it in the interests of my party but, more materially, in the interests of the unemployed.
    Mr. Kirkwood: I listened carefully to the heartfelt plea by the hon. Member for Broxtowe (Mr. Lester) and I sympathise with his argument. I am sure that he will agree that the proposition is an inevitable consequence of any earnings-related scheme being attached to pension provision. That was one of the reasons why in 1975 when the original Bill was put together my former friends took the view that the earnings-related component was wrong because of the anomalies and costs. Eleven years later some of the chickens have come to roost because demographic changes have caused arguments about costs and anomalies. We have taken that view since 1965, and the alliance has thought the same in the last five years.
    I attempted to able amendments in Committee to persuade the Government to consider making the earnings-related element of the scheme proposed in clause 17 more redistributive and to work out a formula that would mitigate the earnings-related component. My argument was that if one was a director of ICI one could gain more from the state earnings-related pension scheme than a shop-floor worker could. Not surprisingly, the Government rejected that proposition, so we must face clause 17. The hon. Member for Derby, South (Mrs. Beckett) suggested that we should throw out clause 17. I sympathise with much of what she said, but I do not think that we should throw out the whole of clause 17. That would be throwing out the baby with the bath water.
    The Government are wrong to suggest the propositions in clause 17 against the background of the existing state pension level. The schemes in the Bill do nothing to alleviate the lot of basic state pensioners. Their lot will not be improved so long as we insist upon indexing their benefits only to the increase in prices, because they will fall behind earnings and outpace inflation over the next 15 or 20 years until SERPS comes into effect. Any proposal from any Administration should change the pension provision only after they had provided a basic state pension upon which people can live sensibly. The basic state pension does not allow that.
    We came forward with a plan to utilise the contracted-out rebate which could have financed substantial increases in the basic state pension. That did not find favour with the Government and our idea was rejected.
    8.45 pm
    The Social Democratic and Liberal parties are aware of the importance of having consensus about the way forward. If anything derived from the 1975 proposals, it was that they were agreed—with the exception of one dissenting voice — and that there was a reasonable prospect of the pensions industry settling down and prospering.
    That consensus is broken. We have fallen over backwards to achieve that consensus. I say to the Government that, even at this late stage, there must be some arrangement whereby the major political divisions can be bridged. I continue to be interested in talking about that possibility. Against that faint hope, I fear that we are faced with the deep blue sea, because if the amendment is pressed to a Division I regret that I shall have to advise my hon. Friends to abstain and vote neither for the abolition of clause 17 nor for the Government's new clause.
    Mr. Major: The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) gave a qualified welcome to some of our provisions, so I shall refrain from making

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    any remarks about the firm smack of decision in the alliance upon a clause which is a central part of the Bill's pensions provisions. Without any mockery, I must say to the hon. Gentleman that I am grateful to him for his qualified acceptance of reality. I commend his speech for the future, because I am sure that it will sit well with his being a prominent member of the Liberal party for some years to come.
    I recognise the strong feelings aroused by the changes in the state earnings-related pension scheme. It was reflected, although in a lower key than we might have expected a few months ago, in some of the speeches this evening. Our original proposition was for greater changes. Our current propositions are substantially different from those which originally saw the light of day in the Green Paper. [Interruption] I shall not be tempted by interruptions, because of the limited time available.
    The speech by the hon. Member for Derby, South (Mrs. Beckett) was a sustained plea for the status quo, irrespective of the probable effects, of the costs and of the difficulties, all of which have been exposed in debates over recent months. If we were to adopt amendment No. 57, to delete clause 17, the Bill would leave in place all the costly and over-generous features of SERPS which make it a commitment to the future which no responsible Government of any party could leave untouched. We would, in practice, be leaving open a blank cheque for future national insurance contributors. The very real threat that concerns us deeply is that of a future Government needing to break faith with future generations of pensioners if today's promises cannot be met. That is not a tolerable, let alone an attractive, proposition. I shall return, in good time, to some of the detailed points made by the hon. Lady.
    The amendment clearly illustrates the carefree "wait and see" approach of the Opposition compared with what we regard as our realistic and responsible approach.
    Mrs. Beckett: It is appropriate at this point to remind the hon. Gentleman that, because the Government have broken the link between pensions and prices, if they do nothing to SERPS and accept our amendment, the basic pension and the state earnings-related pension will steadily decline in value until they go back to the level of the basic pension now. The Government have already ruined the pension scheme. They are now compounding the felony.
    Mr. Major: We are not ruining it. We are placing it in a position in which it can be sustained so that pensioners may have security in future, not the possiblity of promises that may or may not be met by a future Government. It is all too easy to be irresponsible and say, "Wait and see," or, worse still, claim, as the hon. Member for Oldham, West (Mr. Meacher) has done occasionally, that there is not and there never will be a problem. I am bound to say that I regard that as a Scarlett O'Hara option. I shall explain precisely what that means. Whenever Scarlett O'Hara faced difficulties, she said, "I will think about that tomorrow." That is the Opposition's point of view. Whenever there is a difficulty, they say that they will think about it tomorrow. They will not plan for it today. It is wholly irresponsible to take such a view.
    It is not an easy option to make changes in SERPS. It is not, as the hon. Lady sought to demonstrate in recent months, necessarily a popular option to make changes in SERPS. We made the changes after careful and prolonged
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    study, because we concluded, in the interests of a Long-term, sustainable pension scheme that future generations could make, that we must take action now. None of us, not least my right hon. Friend the Secretary of State for Social Services, is under any illusion whatever that we would have had a much more comfortable time had we decided to adopt the "wait and see" approach that is so attractive to the Opposition.
    The fact is that pensions are long-term commitments, and the time for action and decision is now. People must be given time and opportunity to make additional or alternative provision for their retirement. The way in which SERPS works means that every year of delay leaves people clocking up expensive rights which must be honoured in future.
    It is relevant—I shall not dwell on the point for too long — that, if the amendment were to succeed and SERPS were left unchanged, the Government Actuary's modest assumptions show that costs would take off quite dramatically next century. By 2033, SERPS would be costing £25·5 billion compared with £200 million today. To put that another way, the combined cost of basic pension and SERPS pension as at today's prices would rise from £16 billion now to £49 billion by 2033. The Opposition have from time to time said that they are not perturbed by the potential impact of that increase on national insurance contributions. The Opposition may regard that as a defensible proposition, but we are in no doubt that the working population and employers may see it entirely differently.
    Other factors are involved in the changing cost scenario. The vast increase in expenditure would come at a time when there would be over 3·5 million more pensioners. Yet the number of workers supporting them is expected, on demographic figures, to remain approximately the same. The "pay-as-you-go" principle—that is undeniable from whatever point of view one has — means that there is no way of making advance provision to pay for SERPS promises. Advance funding is not a realistic option for a state-run scheme. By 2033, instead of there being 2·3 contributors to every pensioner, as there are today, there are expected to be only 1·6 contributors to every pensioner. That adds up to a substantial problem.
    I should also make it clear — perhaps not least because the Opposition decline to be swayed by cost arguments — that it is not just an argument about affordability. They must accept, even more crucially, that it is one about priorities. Even if SERPS were to continue unchecked and unchanged, with the cost implications I have outlined, there would be another practical effect. The practical effect would be that the pre-emption of such a huge amount for pensions would severely constrain future spending options of future Governments at a time when the pressure from the elderly for other services, such as health, social services and housing, is bound to increase, apart from the increasing demands of science and demography.
    The Green Paper made a convincing case for the total abolition of SERPS. We took account of the substantial body of opinion which favoured modifying rather than abolishing the scheme. In the White Paper, we concluded that our aims could be met by modifications rather than by abolition, provided it went hand in hand with realistic encouragement to extend occupational and personal pension coverage. The proposals embodied in clauses 9, 17 and 18 will reduce the emerging costs of SERPS by half

    107
    in 2033, bringing it down to about £12·5 billion. The commitment for future contributors will be set at a more acceptable level. We are cutting out—the hon. Member for Derby, South and my hon. Friend the Member for Broxtowe touched on this — some of the more extravagant features of the scheme while still providing a worthwhile second pension.
    The proposals in clause 17 should cut more than £10 billion from the emerging cost of SERPS by 2033. Over half of that comes from the most extravagant and badly targeted feature of the scheme—the 20 best years rule. That was invented with worthy enough motives. It was intended to protect mothers and other people with years out of the work force. Its main effect would come from topping up the pensions of people in good occupational pension schemes, where the guaranteed minimum was always intended to be continued on lifetime average earnings. Most people who favoured modifying SERPS took the view that the 20 best years rule was overgenerous.
    The hon. Lady asked whether we had considered increasing the 20 best years rule to an undisclosed future number of years—perhaps 30 years. We did consider extending the number of years, but to do so would simply reimpose—although perhaps not so badly—the poor targeting of the 20 best years. The beneficial results would apply without discrimination to everybody in SERPS so that, like the 20 best years, much of the cost would go on topping up good occupational schemes and there would also be all the anomalies which there would be with the 20 best years rule.
    My hon. Friend the Member for Broxtowe, who introduced amendment No. 58, spoke, as he always does, with considerable understanding of and compassion for the position of our fellow citizens who are unemployed. Before I turn to that aspect of his remarks, I thank my hon. Friend for his support for many of the forms of protection that are available for people in SERPS, although I understand his concern and the thrust of his speech that the unemployed are not included.
    I appreciate my hon. Friend's desire to see unemployed people specifically covered by the special protection provided by clause 17(3) for people who would have benefited from the 20 best years rule. He is obviously worried that unemployed people may be worse off if they retire after 1998. As we made clear in Committee, the abolition of the best 20 years rule will not begin to have any effect on people's state pensions until the end of the century, by which time many of today's long-term unemployed will have retired.
    We do not at present propose to extend to unemployed people the special protection that we intend to provide for people who spend time out of the work force because of disablement or for some other reason. Those contingencies tend to be much longer term and cover a larger proportion of the working life than periods of unemployment. It is right that we should make clear now our intention to protect people in those circumstances.
    As for what my hon. Friend said about unemployment, bearing in mind the difficulties with predicting unemployment levels and patterns accurately, we feel that it is better to wait until nearer the time when the SERPS
    108
    changes begin to take effect, when we, or our successors in government, will have a clearer measure of the extent of the problem if there should prove to be one.
    I can reassure my hon. Friend that any regulations needed to extend the protection may be made at any time until 1999. As we explained in Committee, we have ensured that the power in clause 17 is sufficiently wide to enable protection to be extended to any group of people deemed to be deserving of special treatment without the need for new primary legislation. I hope that my hon. Friend will welcome that enabling power.
    If protection is extended to unemployed people, the Department's records are held in such a way as to make it possible to identify anybody who is entitled to contribution credits for unemployment since 1978. I hope that my hon. Friend will find that reassuring.
    The hon. Member for Derby, South spoke of part-time—
    It being Nine o'clock, MR. SPEAKER proceeded, pursuant to the Order [15 April] and the Resolution this day, to put forthwith the Question already proposed from the Chair.
    The House divided: Ayes 175, Noes 331.

    Division No. 184]

    [9.00 pm

    AYES

    Adams, Allen (Paisley N)

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

    Anderson, Donald

    Deakins, Eric

    Archer, Rt Hon Peter

    Dewar, Donald

    Ashby, David

    Dixon, Donald

    Ashton, Joe

    Dormand, Jack

    Atkinson, N. (Tottenham)

    Douglas, Dick

    Bagier, Gordon A. T.

    Dubs, Alfred

    Barnett, Guy

    Duffy, A. E. P.

    Barron, Kevin

    Dunwoody, Hon Mrs G.

    Beckett, Mrs Margaret

    Eadie, Alex

    Bell, Stuart

    Eastham, Ken

    Benn, Rt Hon Tony

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

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

    Evans, John (St. Helens N)

    Bermingham, Gerald

    Fatchett, Derek

    Bidwell, Sydney

    Faulds, Andrew

    Blair, Anthony

    Fields, T. (L'pool Broad Gn)

    Boothroyd, Miss Betty

    Fisher, Mark

    Boyes, Roland

    Flannery, Martin

    Bray, Dr Jeremy

    Foot, Rt Hon Michael

    Brown, Gordon (D'f'mline E)

    Forrester, John

    Brown, Hugh D. (Provan)

    Foster, Derek

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

    Foulkes, George

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

    Fraser, J. (Norwood)

    Brown, Ron (E'burgh, Leith)

    Freeson, Rt Hon Reginald

    Buchan, Norman

    Garrett, W. E.

    Caborn, Richard

    George, Bruce

    Callaghan, Jim (Heyw'd & M)

    Gilbert, Rt Hon Dr John

    Campbell, Ian

    Godman, Dr Norman

    Campbell-Savours, Dale

    Golding, John

    Canavan, Dennis

    Gould, Bryan

    Clark, Dr David (S Shields)

    Gourlay, Harry

    Clarke, Thomas

    Hamilton, W. W. (Fife Central)

    Clay, Robert

    Hardy, Peter

    Clelland, David Gordon

    Heffer, Eric S.

    Clwyd, Mrs Ann

    Hogg, N. (C'nauld & Kilsyth)

    Cocks, Rt Hon M. (Bristol S)

    Holland, Stuart (Vauxhall)

    Cohen, Harry

    Home Robertson, John

    Coleman, Donald

    Hoyle, Douglas

    Conlan, Bernard

    Hughes, Dr Mark (Durham)

    Cook, Frank (Stockton North)

    Hughes, Robert (Aberdeen N)

    Cook, Robin F. (Livingston)

    Hughes, Roy (Newport East)

    Corbett, Robin

    Hughes, Sean (Knowsley S)

    Corbyn, Jeremy

    Janner, Hon Greville

    Craigen, J. M.

    John, Brynmor

    Crowther, Stan

    Kilroy-Silk, Robert

    Cunliffe, Lawrence

    Lambie, David

    Cunningham, Dr John

    Leadbitter, Ted

    Dalyell, Tarn

    Leighton, Ronald

    Davies, Rt Hon Denzil (L'lli)

    Lewis, Terence (Worsley)

    109

    Litherland, Robert

    Roberts, Allan (Bootle)

    Lloyd, Tony (Stretford)

    Roberts, Ernest (Hackney N)

    Lofthouse, Geoffrey

    Robertson, George

    McCartney, Hugh

    Robinson, G. (Coventry NW)

    McDonald, Dr Oonagh

    Rooker, J. W.

    McGuire, Michael

    Ross, Ernest (Dundee W)

    McKay. Allen (Penistone)

    Rowlands, Ted

    McKelvey, William

    Sedgemore, Brian

    MacKenzie, Rt Hon Gregor

    Sheldon, Rt Hon R.

    McNamara, Kevin

    Shore, Rt Hon Peter

    McTaggart, Robert

    Short, Ms Clare (Ladywood)

    McWilliam, John

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

    Maddén, Max

    Silkin, Rt Hon J.

    Marek, Dr John

    Skinner, Dennis

    Marshall, David (Shettleston)

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

    Martin, Michael

    Soley, Clive

    Mason, Rt Hon Roy

    Spearing, Nigel

    Maxton, John

    Stott, Roger

    Meacher, Michael

    Strang, Gavin

    Michie, William

    Straw, Jack

    Mikardo, Ian

    Thomas, Dafydd (Merioneth)

    Millan, Rt Hon Bruce

    Thomas, Dr R. (Carmarthen)

    Morris, Rt Hon A. (W'shawe)

    Thompson, J. (Wansbeck)

    Morris, Rt Hon J. (Aberavon)

    Thorne, Stan (Preston)

    Oakes, Rt Hon Gordon

    Tinn, James

    O'Neill, Martin

    Torney, Tom

    Orme, Rt Hon Stanley

    Wardell, Gareth (Gower)

    Park, George

    Wareing, Robert

    Parry, Robert

    Welsh, Michael

    Patchett, Terry

    White, James

    Pavitt, Laurie

    Wigley, Dafydd

    Pendry, Tom

    Williams, Rt Hon A.

    Pike, Peter

    Wilson, Gordon

    Powell, Raymond (Ogmore)

    Winnick, David

    Prescott, John

    Woodall, Alec

    Radice, Giles

    Young, David (Bolton SE)

    Randall, Stuart

    Raynsford, Nick

    Tellers for the Ayes:

    Redmond, Martin

    Mr. Frank Haynes and Mr. James Hamilton.

    Rees, Rt Hon M. (Leeds S)

    Richardson, Ms Jo

    NOES

    Aitken, Jonathan

    Budgen, Nick

    Alexander, Richard

    Burt, Alistair

    Alison, Rt Hon Michael

    Butcher, John

    Amess, David

    Butler, Rt Hon Sir Adam

    Ancram, Michael

    Butterfill, John

    Arnold, Tom

    Carlisle, John (Luton N)

    Ashby, David

    Carlisle, Kenneth (Lincoln)

    Atkins, Rt Hon Sir H.

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

    Atkinson, David (B'm'th E)

    Carttiss, Michael

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

    Cash, William

    Baker, Nicholas (Dorset N)

    Chalker, Mrs Lynda

    Baldry, Tony

    Channon, Rt Hon Paul

    Banks, Robert (Harrogate)

    Chapman, Sydney

    Batiste, Spencer

    Chope, Christopher

    Beaumont-Dark, Anthony

    Churchill, W. S.

    Bendall, Vivian

    Clark, Dr Michael (Rochford)

    Benyon, William

    Clark, Sir W. (Croydon S)

    Best, Keith

    Clegg, Sir Walter

    Bevan, David Gilroy

    Cockeram, Eric

    Biggs-Davison, Sir John

    Colvin, Michael

    Blackburn, John

    Coombs, Simon

    Blaker, Rt Hon Sir Peter

    Cope, John

    Body, Sir Richard

    Cormack, Patrick

    Bonsor, Sir Nicholas

    Corrie, John

    Bottomley, Peter

    Couchman, James

    Bottomley, Mrs Virginia

    Cranborne, Viscount

    Bowden, Gerald (Duiwich)

    Crouch, David

    Boyson, Dr Rhodes

    Currie, Mrs Edwina

    Brandon-Bravo, Martin

    Dickens, Geoffrey

    Brinton, Tim

    Dicks, Terry

    Brittan, Rt Hon Leon

    Dorrell, Stephen

    Brooke, Hon Peter

    Dover, Den

    Browne, John

    du Cann, Rt Hon Sir Edward

    Bruinvels, Peter

    Durant, Tony

    Bryan, Sir Paul

    Dykes, Hugh

    Buchanan-Smith, Rt Hon A.

    Edwards, Rt Hon N. (P'broke)

    Buck, Sir Antony

    Eggar, Tim

    110

    Emery, Sir Peter

    Kershaw, Sir Anthony

    Evennett, David

    Key, Robert

    Eyre, Sir Reginald

    King, Roger (B'ham N'field)

    Fairbairn, Nicholas

    Knight, Greg (Derby N)

    Fallon, Michael

    Knight, Dame Jill (Edgbaston)

    Farr, Sir John

    Knowles, Michael

    Favell, Anthony

    Knox, David

    Fenner, Mrs Peggy

    Lamont, Norman

    Finsberg, Sir Geoffrey

    Lang, Ian

    Fletcher, Alexander

    Latham, Michael

    Fookes, Miss Janet

    Lawler, Geoffrey

    Forman, Nigel

    Lawrence, Ivan

    Forsyth, Michael (Stirling)

    Lee, John (Pendle)

    Forth, Eric

    Lennox-Boyd, Hon Mark

    Fowler, Rt Hon Norman

    Lester, Jim

    Fox, Marcus

    Lewis, Sir Kenneth (Stamf'd)

    Franks, Cecil

    Lightbown, David

    Fraser, Peter (Angus East)

    Lilley, Peter

    Freeman, Roger

    Lloyd, Ian (Havant)

    Fry, Peter

    Lloyd, Peter (Fareham)

    Galley, Roy

    Lord, Michael

    Gardiner, George (Reigate)

    Luce, Rt Hon Richard

    Gardner, Sir Edward (Fylde)

    Lyell, Nicholas

    Garel-Jones, Tristan

    McCrindle, Robert

    Gilmour, Rt Hon Sir Ian

    McCurley, Mrs Anna

    Glyn, Dr Alan

    Macfarlane, Neil

    Goodhart, Sir Philip

    MacGregor, Rt Hon John

    Goodlad, Alastair

    MacKay, John (Argyll & Bute)

    Gorst, John

    Maclean, David John

    Gow, Ian

    McLoughlin, Patrick

    Gower, Sir Raymond

    McNair-Wilson, M. (N'bury)

    Grant, Sir Anthony

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

    Gregory, Conal

    McQuarrie, Albert

    Griffiths, Peter (Portsm'th N)

    Madel, David

    Grist, Ian

    Major, John

    Grylls, Michael

    Malins, Humfrey

    Gummer, Rt Hon John S

    Malone, Gerald

    Hamilton, Hon A. (Epsom)

    Maples, John

    Hamilton, Neil (Tatton)

    Marland, Paul

    Hampson, Dr Keith

    Marlow, Antony

    Hanley, Jeremy

    Marshall, Michael (Arundel)

    Hannam, John

    Mates, Michael

    Hargreaves, Kenneth

    Maude, Hon Francis

    Harris, David

    Mawhinney, Dr Brian

    Harvey, Robert

    Maxwell-Hyslop, Robin

    Havers, Rt Hon Sir Michael

    Mayhew, Sir Patrick

    Hawkins, C. (High Peak)

    Mellor, David

    Hawkins, Sir Paul (N'folk SW)

    Merchant, Piers

    Hawksley, Warren

    Miller, Hal (B'grove)

    Hayes, J.

    Mills, Iain (Meriden)

    Hayhoe, Rt Hon Barney

    Miscampbell, Norman

    Heathcoat-Amory, David

    Mitchell, David (Hants NW)

    Heddle, John

    Moate, Roger

    Hickmet, Richard

    Monro, Sir Hector

    Hicks, Robert

    Montgomery, Sir Fergus

    Higgins, Rt Hon Terence L.

    Morris, M. (N'hampton S)

    Hill, James

    Morrison, Hon C. (Devizes)

    Hind, Kenneth

    Morrison, Hon P. (Chester)

    Hirst, Michael

    Moynihan, Hon C.

    Hogg, Hon Douglas (Gr'th'm)

    Murphy, Christopher

    Holland, Sir Philip (Gedling)

    Neale, Gerrard

    Holt, Richard

    Needham, Richard

    Hordern, Sir Peter

    Nelson, Anthony

    Howard, Michael

    Neubert, Michael

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

    Newton, Tony

    Howell, Rt Hon D. (G'ldford)

    Nicholls, Patrick

    Howell, Ralph (Norfolk, N)

    Normanton, Tom

    Hubbard-Miles, Peter

    Onslow, Cranley

    Hunt, David (Wirral W)

    Oppenheim, Phillip

    Hunt, John (Ravensbourne)

    Oppenheim, Rt Hon Mrs S.

    Hunter, Andrew

    Osborn, Sir John

    Hurd, Rt Hon Douglas

    Ottaway, Richard

    Jackson, Robert

    Page, Sir John (Harrow W)

    Jessel, Toby

    Page, Richard (Herts SW)

    Johnson Smith, Sir Geoffrey

    Parkinson, Rt Hon Cecil

    Jones, Gwilym (Cardiff N)

    Patten, J. (Oxf W & Abgdn)

    Jones, Robert (Herts W)

    Pattie, Geoffrey

    Jopling, Rt Hon Michael

    Pawsey, James

    Joseph, Rt Hon Sir Keith

    Peacock, Mrs Elizabeth

    Kellett-Bowman, Mrs Elaine

    Percival, Rt Hon Sir Ian

    111

    Pollock, Alexander

    Stokes, John

    Porter, Barry

    Stradling Thomas, Sir John

    Portillo, Michael

    Sumberg, David

    Powell, William (Corby)

    Taylor, John (Solihull)

    Powley, John

    Taylor, Teddy (S'end E)

    Prentice, Rt Hon Reg

    Tebbit, Rt Hon Norman

    Price, Sir David

    Temple-Morris, Peter

    Proctor, K. Harvey

    Thomas, Rt Hon Peter

    Pym, Rt Hon Francis

    Thompson, Donald (Calder V)

    Raffan, Keith

    Thompson, Patrick (N'ich N)

    Raison, Rt Hon Timothy

    Thorne, Neil (Ilford S)

    Rathbone, Tim

    Thurnham, Peter

    Rees, Rt Hon Peter (Dover)

    Townend, John (Bridlington)

    Rhys Williams, Sir Brandon

    Townsend, Cyril D. (B'heath)

    Ridley, Rt Hon Nicholas

    Tracey, Richard

    Rippon, Rt Hon Geoffrey

    Trippier, David

    Roberts, Wyn (Conwy)

    Trotter, Neville

    Rossi, Sir Hugh

    Twinn, Dr Ian

    Rost, Peter

    van Straubenzee, Sir W.

    Rowe, Andrew

    Vaughan, Sir Gerard

    Rumbold, Mrs Angela

    Viggers, Peter

    Ryder, Richard

    Waddington, David

    Sackville, Hon Thomas

    Wakeham, Rt Hon John

    Sainsbury, Hon Timothy

    Waldegrave, Hon William

    St. John-Stevas, Rt Hon N.

    Walker, Rt Hon P. (W'cester)

    Sayeed, Jonathan

    Waller, Gary

    Scott, Nicholas

    Walters, Dennis

    Shaw, Giles (Pudsey)

    Ward, John

    Shaw, Sir Michael (Scarb')

    Wardle, C. (Bexhill)

    Shelton, William (Streatham)

    Warren, Kenneth

    Shepherd, Colin (Hereford)

    Watson, John

    Shepherd, Richard (Aldridge)

    Watts, John

    Shields, Mrs Elizabeth

    Wells, Bowen (Hertford)

    Silvester, Fred

    Wells, Sir John (Maidstone)

    Sims, Roger

    Wheeler, John

    Smith, Tim (Beaconsfield)

    Whitfield, John

    Soames, Hon Nicholas

    Whitney, Raymond

    Speed, Keith

    Wiggin, Jerry

    Speller, Tony

    Wilkinson, John

    Spencer, Derek

    Winterton, Mrs Ann

    Spicer, Jim (Dorset W)

    Winterton, Nicholas

    Spicer, Michael (S Worcs)

    Wolfson, Mark

    Squire, Robin

    Wood, Timothy

    Stanbrook, Ivor

    Woodcock, Michael

    Stanley, Rt Hon John

    Yeo, Tim

    Steen, Anthony

    Young, Sir George (Acton)

    Stern, Michael

    Younger, Rt Hon George

    Stevens, Lewis (Nuneaton)

    Stewart, Allan (Eastwood)

    Tellers for the Noes:

    Stewart, Andrew (Sherwood)

    Mr. Carol Mather and Mr. Robert Boscawen.

    Stewart, Ian (Hertf'dshire N)

    Question accordingly negatived.

    Clause 19
    INCOME RELA ED BENEFI S
    Mr. Major: I beg o move amendment No. 59, in page 22, line 17 a end insert—
    '(1A) he Secretary of S a e shall make copies of schemes prescribed under subsection (1)(a) or (b) above available for public inspection a local offices of he Department of Heal h and Social Security a all reasonable hours without payment.'.
    This is an entirely benevolent amendment, which we have introduced in response to an undertaking given by my hon. Friend he Minister for Social Security to the hon. Member for Derby, South (Mrs. Beckett) in Committee. I brings income support and family credit into line with housing benefit, by ensuring that copies of the two schemes are readily available for inspection by members of the public a he Department's local offices. I hope that the House will welcome that and I commend the amendment to the House.
    Amendment agreed to.
    9.15 pm
    Mr. Alfred Morris: I beg to move amendment No. 206, in page 22, line 17 at end insert—
    '(1A) The scheme prescribed in subsection (1)(a) above shall include a weekly payment of a community care addition to disabled or elderly people or in respect of disabled children or other disabled or elderly dependants in need of care and attention.
    (1B) Regulations shall provide that payments of community care additions made under subsection (IA) shall be payable at a rate that shall be determined by reference to:

    (a)The needs of he claimant in relation o his proper welfare and need for care and attention in a dwelling which he occupies or is to occupy as his home or in which he resides or is to reside as a member of a family; and

    the extent to which other benefits or payments that are payable under Part II or Part III of this Act fail to meet those needs.

    (1C) Payments made under subsection (IA) shall be payable in addition o any attendance allowance and mobility allowance that may be in payment.'.
    I do so in my name and those of right hon. and hon. Members on both sides of the House. For all of them I thank you most warmly, Mr. Speaker, for having selected what was unavoidably a starred amendment.
    The seventh report of the Select Committee on Social Services noted, and the Minister for Social Security agreed, that no premium for disability can cover the highest sums of additional requirements that individual disabled people in most need now receive. A small survey of the Disablement Income Group's existing case load has shown that payments for additional requirements range from 13 per cent. to 30 per cent. of a severely disabled claimant's total benefit income.
    Notable among the payments for additional requirements that cannot be covered by the proposed premium is that for domestic assistance, a weekly payment that can now amount to £44·90 a week Plus, of course, any employee's national insurance contributions. This crucially important benefit helps to keep many severely disabled people out of institutions. The payments now made will not be met by he social fund, despite the suggestion that the fund will be a means of helping to meet community care needs. Such needs cannot be met because the social fund will not cover regular payments. Moreover, the social fund is a wholly unsuitable vehicle for giving financial help to disabled people.
    As DIG stated in its response to the Green Paper, there are grave defects in he concept and details of the social fund, more particularly in relation to disabled people. In applying cash limits, the operation of the fund will introduce a new and undesirable concept into the social security benefit system. Instead of meeting all financial needs on the basis of pre-determined criteria, some financial needs in future will be me according to the availability of pre-allocated resources.
    The absence of a satisfactory appeal system will inevitably lead to injustices and bad relations locally between staff and clients. The local management of the fund will also lead to variations of treatment throughout the country, thus compounding existing variations in respect of the provision of services under the Chronically Sick and Disabled Persons Act 1970. Help for disabled people should depend on need, not on where they live, and the Bill shows a most worrying lack of understanding of what care in the community for severely disabled people really involves.

    113
    The amendment introduces a community care addition to augment the proposed inadequate basic income support payment and disablement premium. This addition would be to help meet the regular financial needs of disabled people trying to live outside institutions.
    Three examples from the current case load of the organisations that work to help disabled people illustrate the problems that will result if the amendment is no agreed. None of the three examples is extreme. There are many others showing potential losses of £40, £50 and even £60 a week.
    My first example is that of Miss Y who lives in a Sussex village. She is paralysed from the neck down following a road accident. She requires help with virtually all aspects of personal care. Miss Y was looked after by her elderly mother who became progressively more frail and unable to cope. Miss Y consequently had to spend weekends in bed before employing a domestic assistant. After intervention by DIG, her entitlement to a domestic assistance allowance of £20 a week was established. Her weekly income from supplementary benefits is £64·20, comprising £37·50 long-term rate, £5·45 for heating requirements, £1·25 laundry requirement and £20 domestic assistance allowance. Under the proposed income support scheme, she would receive £30·60 weekly rate and £12·25 disability premium — a total of only £42·85. That is a loss of £21·35. If Miss Y qualifies for the full rate of domestic assistance of £47·20, as DIG thinks probable, the loss to her would be £48·55.
    My second example is that of Mr. S who graduated from university in 1984. He is 24 years old and confined to a wheelchair. He needs help with washing, dressing and toilet, and must also be turned in bed at frequent intervals during the night. He receives the higher rate attendance allowance and the following amounts of supplementary benefit: long-term rate of £35·70, domestic care allowance of £40. minus available scale margin of £1, leaving him with £74·70. Under income support this would be reduced to personal allowances of £24 and disabled person's premium of £12·25, giving a total of £36·25. This young man's home care costs him more than £70 a week. Without maintenance in real terms of his current income from supplementary benefit, he would no longer be able to remain living in the community and will have to move into residential care.
    Thirdly, I turn to Miss A, who is 20 years old and, due to her disabilities, is confined to an electric wheelchair. She has very little strength or length of reach in her arms. She needs help in washing, dressing and using the toilet. She receives attendance allowance. Her present supplementary benefit weekly payment is as follows: long-term rate £35·70, domestic care allowance £44·90, diet allowance £3·60, heating allowance £5·20, bathing addition £1·50, minus available scale margin of £1, giving a total of £89·90. Under the income support proposals she would receive personal allowance of £24 and disabled person's premium of £12·25, giving a total of £36·25. Miss A left full-time education in 1984 and was de ermined to take her rightful place in the community. Her live-in care attendance costs currently amount to £40 per week plus board and lodging. So how can anyone, in these circumstances, retain his or her independence under his Bill as it now stands?
    It is the contention of every major organisation of and for disabled people in his country that it would cost more
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    in public expenditure terms to fund these three people, and very many others like them, in residential care than it would cost to maintain their benefits in real terms.
    Le me spell out the point in sharper terms. the Spastics Society provides residential care for severely disabled people at a cost of between £233 and £288·50 per week. Of these amounts, the DHSS currently pays £180 per week per person. This sum far exceeds the amount of supplementary benefit received in my three examples, who are all severely disabled but just managing to remain in the community. That is why the Spastics Society has put it to me that
    Independent living will no longer be possible for many severely disabled people if they are expected to live or. less money than they do now. It is our belief that by, in effect, reducing the incomes of such people … the Government will defeat its own objectives of 'Care in the Community'. The alternative will lead to considerably higher public expenditure."
    For the Government to reject this amendment would thus be self-defeating as well as inhumane. All hon. Members know that disabled people crave nothing more than to live independently and, wherever possible. in their own homes. Many will incontrovertibly he forced into institutions unless the Bill is amended. I implore both the House and the Minister to accept amendment No. 206. Let us a least all agree that there will be no point in sloganising about caring for severely disabled people in the community, ever again, if hey reject this amendment tonight.
    Mr. Hannam: This is a crucial debate for the most severely disabled members of our society, and I am extremely grateful to you, Mr. Speaker, for accepting our amendment.
    I am surprised that we are having to debate this matter, because it is a longtime since the all-party disablement group first began to express anxiety and to discuss with the various disability organisations the implications of the social security review, especially for severely disabled people. Under the present system severely disabled people receive a range of additional payments to cover the additional costs of living. However, they, or at least those who come into the scheme in future, will lose some of those benefits.
    Throughout last year my hon. Friend the Minister has signified his acceptance and knowledge of the matter and of the need to find a satisfactory solution. In our discussions with the group and to her organisations he has repeatedly implied that the Government hope to come up with a scheme to solve the problem. I sincerely hope that that proposal will not be long in coming. Indeed, I hope that it may be forthcoming tonight.
    The number in the group is no large. The Government estimate that we are talking about a total of 4,600 people who are severely disabled and are likely to lose by these proposals in the Bill. We cannot be sure that the figure is completely accurate. Indeed, they may be more than that. We are not talking about large numbers, and we are certainly not asking the Government for a large sum. Moreover, under the present system these severely handicapped people are judged to be in need of the various additional allowances that they receive.
    The righ hon. Member for Manchester, Wythenshawe (Mr. Morris) illustrated the type of people whom we want to help and who will suffer under these proposals. I have a further example. A married woman has a 14-year-old son who has multiple sclerosis and is chairbound. The family

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    receive a total of £109·55, whereas under income support that figure would be reduced to £81·10. Multiple sclerosis is a deteriorating condition, and in future additional allowances will be required. Certainly the family could not cope with any loss in their present income.
    All present recipients will continue to receive the existing level of allowances under the transitional arrangements, but those allowances will not keep pace with inflation as time goes by. Therefore, even existing recipients will suffer a steady erosion of their support income. I know that my hon. Friend the Minister recognises the problem, and has suggested that it can be met under the provisions of the social fund. However, there are a number of difficulties with this, as he knows. I would be much better to tackle the problem and to meet the financial needs of severely disabled people through income support schemes, as our amendment proposes.
    If we mean to encourage severely disabled people to live in the community, it is essential to provide them with the independence that they must have. If this is not done, they will have to resort to institutional or residential care or to residential homes, and we know what the cost of that will amount to.
    The present arrangements in the Bill mean that existing recipients of disablement benefits will continue to receive them as long as they do not visit hospital, but if they have to do so for further treatment, they will lose entitlement and will go on to the income support, which will be far less. There is an anomaly that we must resolve. New claimants will only have the disability premium, which for most severely disabled people will be inadequate to live on.
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    All the disability organisations have made strong representations on both these counts, as has the all-party group, to my hon. Friend the Minister, and I hope that we can have some sign of how he in ends o rectify the situation. He has shown by his replies that he recognises the problem and wants to do something about it. I am sure that he would not want to force people back into institutions at the same time as encouraging them to go out into the community, which is the Government's policy.
    There is a clear need for a regular, guaranteed payment each week, and our amendment will provide for a community care addition to be paid through the income support scheme to disabled or elderly people. It will be a weekly payment, and regulations will determine the rate of the payment, by reference to

    "(a) the needs of he claimant in relation to his proper welfare and need for care and attention in a dwelling which he occupies or is to occupy as his home or in which he resides or is to reside as a member of a family; and

    (b) the extent to which other benefits or payments that are payable under Part II or Part III of his Act fail to meet those needs."

    It is important that this is a weekly payment. Disabled people must be able to budget adequately for their day-to-day needs. For example, they need to pay for attendance, laundry, special diet and their additional heating, needs. They must know that they will be able to meet all those additional expenses if they are to continue to live at home.This is an important aspect of the community care addition, and I do no see a payment from the social fund being able to meet this requirement.
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    It is also essential that the community care addition is no open to discretion. If a disabled person is to continue to live in the community, he must be able to plan ahead. For instance, he needs to know that he will be able to meet the cost of an attendant in the long term, and any other domestic assistance that he may require. It would be impossible if his addition were subject to the discretion of a social fund officer every so often and he had no absolute knowledge of what he was entitled to. Faced with such uncertainty, many people would have no alternative but to live in an institution. It is obviously important that the regulations establishing the rate are flexible enough to allow for the varying needs of people with a progressive or intermittent disability, but people must know what they are entitled to and know that they will always be entitled to that.
    We recognise that it is intended for the social fund to meet various community care needs. For that reason, we have included subsection (b)so that account can be given to the extent to which the social fund meets those needs. However, at this stage we cannot see how the social fund will be suited to give a regular, guaranteed cash payment to enable severely disabled people to live independently in the community. Severely disabled people need this over and above any other back-up support that may be provided through the social fund.
    Our principal contention in the all-party group is that we wan disabled people to live in the community and we must ensure that they are entitled to sufficient means to be able to do this. In the longterm, it is both cost-effective and care efficient to give people sufficient cash to prevent them from having to live in an institution. The amendment emphasises the importance of this. It says that payments shall be made to meet the requirements of a disabled person living a home. I commend it to the House. I hope that the Government will be able to accept it.
    Mr. Jack Ashley: I endorse the constructive comments of my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) and those of the hon. Member for Exeter (Mr. Hannam), both of whom do such splendid work for the disabled.
    This amendment is vital. Without it, the most severely disabled people will lose the most. Simply to replace the flexible and sensitive additional payments under the supplementary benefit system with just one level of disability premium is an inflexible and insensitive decision. I do not believe that it is possible simply to average the needs of severely disabled people in this way. None of them is average. All of them are individuals and they should be assessed as individuals. Failure to assess and recognise their individuality is the hallmark of the unimaginative.
    It is impossible seriously to doubt the claim that, without cash from the community care addition, the severely disabled will be forced into institutions. Failure to recognise this fact is the hallmark of the illiterate, who cannot read case histories. It is also the hallmark of the innumerate, who cannot do simple sums, because the figures are there for all to see.
    Without this amendment, the most severely disabled lose from a few pounds to over £50 a week. That money has helped to keep many of them out of institutions. Without it, and without the community care addition that we recommend, they may be forced into institutions. If they are forced into institutions, the Government will have

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    to pay very heavily. Of course, the disabled will pay far more heavily because they are severely affected by being forced into institutions.
    Those of us who know severely disabled people know that they fight very hard for their independence and that they cherish it. If they are forced into institutions, they find that their independence is eroded and that it is insulting, demeaning and demoralising. That is why this Government, or any Government, at all costs should avoid forcing the severely disabled into institutions. To force, to impel or to compel one severely disabled person into an institution against his will is the hallmark of a ruthless person. I am not accusing the Minister, but I am saying that to force any severely disabled person against his will into an institution, simply for lack of cash, is the hallmark of a ruthless person.
    It is completely false to suggest, as I understand the Minister has suggested, that in the attendance allowance and the mobility allowance the most severely disabled people already have a premium, in the way that we understand it. It is wrong to make that claim. These essential allowances are made for a quite different purpose. It was never intended, either by the former Minister, or by the former Government, or by Parliament, that the cash from these allowances should be used for needs which ought to be met by supplementary benefit. I do not believe that that is in ended by his Government.
    However, the allowances are inadequate, in any case. The full attendance allowance for a very severely disabled person is a mere £30 a week. To qualify for the full allowance, those people must have constant care, day and night. Care costs some £2·50 per hour. There is nothing cheaper than that, even in poor areas. Therefore, £30 a week will pay for some 12 hours for someone needing constant care day and night who is severely disabled and unable to help herself or himself. That is quite wrong.
    Another poppycock suggestion that has been made by some Ministers— the Minister will have the chance to answer this if he thinks that I am doing him or the Government an injustice — is that severely disabled people can rely upon the social fund for their individual needs. That is rubbish because that fund does not provide weekly payments. It is limited and here will be enormous local variations. The difficulties of severely disabled people are far too intense for them to be left to flounder at the mercy of local officials.
    I conclude by suggesting that the unique problems of severely disabled people must be met by unique payments. Those payments should be in the form of the community care addition which has been suggested and spelt out in the amendment. I make it clear that this is not simply a financial test for the Government. This is a major moral test, requiring a specific and categoric response. An affirmative answer from the Minister would help to allay he anxieties of severely disabled people. Silence or an evasive answer will be unforgivable.
    Mr. Tim Yeo: I endorse what the right hon. Members for Manchester, Wythenshawe (Mr. Morris) and for Stoke-on-Trent, South (Mr. Ashley) and my hon. Friend the Member for Exeter (Mr. Hannam) have said. It is beyond doubt that a number of people will be financially worse off under the new proposed income support scheme. When my hon. Friend the Minister came to the Select Committee on Social Services to answer
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    questions about the proposals in the Bill, he assured us that, quite apart from protecting people during the transitional phase, there was the social fund.
    The social fund rests on a discretionary element which undermines the main objective of severely disabled people. The severely disabled are a group with whom I have had close personal contacts in the past five years. The overwhelming conclusion that I reached after working with a number of severely disabled people, with whom I developed a close relationship, was that of all the aspirations which they treasure, independence, which everyone else takes for granted, was the one which they held in the highest esteem.
    Nothing will undermine the independence of the severely disabled more than a feeling that their financial provision from the state is based upon some kind of discretionary handout element. It is critical to the feeling of dignity independence and self-respect, which I hope that the Government wish every British citizen to enjoy, that any financial benefits which they receive, and will need in order to maintain their present standard of living, should be paid as of right.
    This group of people is not enormous, so the cost of the necessary provision is not high. The Government do not wish to demean this group of people who have many other disadvantages. I cannot believe that they would wish to do so especially now. My hon. Friend the Minister, with this considerable knowledge and widely recognised sensitivity to the aspirations of disabled people, will see the merits of the amendment, and I commend it strongly to him.
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    Mr. Dafydd Wigley: I, too, support the amendment. From the large volume of correspondence that we received when he Bill was in Committee and until Reports age, there is no doubt that the matter touches a raw nerve and that more people are worried about it than are worried about almost any other part of the Bill There are many areas of concern in the Bill, but many organisations, as well as the right hon. Members for Manchester, Wythenshawe (Mr. Morris) and for Stoke-on- Trent, South (Mr. Ashley) and the hon. Member for Exeter (Mr. Hannam), have highlighted examples of individuals who stand to lose substantial sums.
    Of course, I am aware from discussions in Committee that those individuals will be safeguarded by some provisions, but a person in an identical position who develops a disability later will not receive the support that people get now. To that extent, the Bill is inevitably a major step backwards.
    We are not talking about small sums. Examples have been quoted of reductions of between £10 and £50 a week. That makes all the difference between being able to care and not being able to care. Although the Government have an understandable commitment to the voluntary sector, I do not believe that they intend to move away from paid services for people who clearly need them to saying, "It will have to be done for free by volunteers."
    Mr. Newton indicated dissent.
    Mr. Wigley: The Minister shakes his head. I accept that that is no his intention, but that will be the effect of the Bill.

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    In Committee and today we have heard about the Government's three proposals for making up the loss. Much emphasis was placed on the social fund. However, it is discretionary, inconsistent and uncertain. It will vary from area to area. It is cash-limited, and many local officers will not have the necessary expertise in profound handicap. That is one reason why the mobility allowance and attendance allowance schemes end to be administered from centres, not from local offices. People who need reliable, consistent services will have to depend upon ad hoc, day- o-day, hand- o-mouth services according to the resources that are available. It is ironic that we are discussing this in the context of a Social Security Bill when the proposal is profoundly anti-social and provides insecurity for disabled people.
    The evidence that we have received from many people points in the same direction. In its most recent memorandum to me, The Association of Directors of Social Services stated:
    "The most unacceptable aspect of the premium for the sick and disabled is that those with the highest needs will be amongst the highest losers. Those with disabilities that may prevent them from working but have no extra costs related to ill-health will receive the same benefit as a severely disabled person with high costs … The combined lack of support to carers and restricted help to the most severely disabled of claimants will result in the breakdown of much home-based care. If the Government has a genuine commitment to community care, adequate incomes for those in the community is the firs step."
    That underlines the depth of feeling among the professionals in this area.
    The right hon. Member for Stoke-on-Trent, South mentioned the other two palliatives that the Government have suggested to help severely disabled people — mobility allowance and attendance allowance. The Minister mentioned this in Committee on 11 March. But those two benefits are geared specifically for functions—mobility allowance to the ability to get around, and attendance allowance, as the right hon. Gentleman graphically illustrated, to the profound needs of those who qualify for them. These should not be regarded as making up for the loss of the provisions in current enactments. Taking away those provisions will leave a group of people in considerable doubt and insecurity about their future.
    The Government are showing a brazen and insensitive attitude to disabled people.
    Dr. Norman A. Godman: I seem to recall the Minister for Social Security talking about lump sum or intermittent payments being made to someone who leaves hospital with, say, severe brain damage or severe disablement. Surely there must be regular, adequate weekly payments.
    Mr. Wigley: Absolutely. That is not to say that there is no need for lump sum payments, but they will not make up for the regular, consistent availability of resources. I know from personal experience and from the experience of many friends and associates who have faced disability that there is a need for a person who can help consistently and regularly. That can be ensured only when resources are available to pay that person so that he or she will be available for certain hours on certain days, come rain or shine. If the resources are not available, paid people will
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    not be taken on to help with that work. No one would dare risk taking on those people and, therefore, the infrastructure that enables disabled people to remain in the community would be in danger of collapsing.
    I do not think that the Minister in ended having to defend that sort of possibility. I urge him to realise that if the Government's words about their commitment to care in the community are to mean anything, they must look again at this matter.
    Mr. Galley: I must be clear from our debates in Committee and on Report that firm arrangements will have to be made for the small groups of severely disabled people who may be disadvantaged as a result of the withdrawal of single payments.
    In Committee we spoke of groups of perhaps 2,000 or 4,000 people who can accumulate significant single payments, particularly those for domestic care and attendance. Those debates ended to concentrate on the social fund and not on an addition to income support.
    However one approaches the matter, there may be difficulties of definition and interpretation of terms such as "community care" and to other wide phrases such as those in the amendment, and, indeed, those in the amendment that I tabled to the social fund provision in Committee. It is abundantly clear that some method must be found to overcome the problem.
    The social fund may be a better, more appropriate and flexible way of dealing with the problem. The right hon. Member for Stoke-on-Trent, South (Mr. Ashley) is wrong to say that it is rubbish to suggest using the social fund. It may be an appropriate way of solving the problem flexibly and sensibly. However, we need — tonight, if possible—assurances from the Government about how the social fund will be operated to meet these needs.
    From the Green Paper onwards, it has always been intended that an element for community care needs will be included in the social fund. The details have remained extremely sketchy, and perhaps there is still some thinking to be done, but I hope that my hon. Friend the Minister for Social Security will come to a conclusion in the near future about how the community care element of the social fund will be operated to give some security and confidence to severely disabled people who would lose out under the system that is currently proposed. There must be consistency between local areas. I hope that we shall not have to use the appeals procedure every time to achieve that consistency.
    The hon. Member for Caernarfon (Mr. Wigley) mentioned the problem of social fund officers having the medical or social work expertise to make the appropriate assessments for payments. One solution might be to set aside community care money within the social fund that could be operated voluntarily by experts who are somewhat independent of the Department. We need a firm, clear and secure arrangement, which involves regular, intermediate or instalment payments. I believe that my hon. Friend the Minister made some concessions to us on that point in Committee and that he is moving towards some regularity of payment. Indeed, there is an amendment that may take us in that direction and give us more flexibility.
    I turn again to the problems of the terminally ill and to the difficulties that they often face when claiming, for example, attendance allowance. Hon. Members should

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    remember the 26-week rule and the bureaucratic difficulties of obtaining such aid. Community care must take the needs of the terminally ill into account. I would be counter-productive if my hon. Friend did no make arrangements to keep people in the community with security of funding. The alternative is institutionalisation,
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    which is expensive, unnecessary, wrong for the person concerned and counter to Government policy. Therefore, some arrangements must be made for the sake of the individuals concerned and in the interest of the Government themselves.
    Mr. Kennedy: On this crucial issue, the mood of the House during this short debate is reminiscent of the mood during the debate on the Disabled Persons (Services, Consultation and Representation) Bill, or Tom Clarke Bill, which successfully passed through the House. Good sense and good will was apparent then, too, on both sides of the House. More importantly, generous, welcome and sensible commitments were made by he Minister.
    I shall be brief. We have seen good sense and good will. Let us hope that, even if we cannot obtain an absolute commitment from the Government, they will a least say that they are aware of the difficulty and will take steps to remedy it, if not tonight, then in the other place. In an earlier debate, in which I spoke just about as briefly, we discussed some form of appeal mechanism or independent review for the social fund. Some of us strongly opposed the measure, while some Conservative Members, perhaps understandably, welcomed it. Nevertheless, they expressed the hope that the Minister would go further. The difficulty highlighted in that debate must be multiplied a least tenfold in his debate, given the category of citizen involved. A fit and healthy person who enjoys his independence and the hings that perhaps we take for granted, will have difficulty with the social fund, how to appeal, and so on. How will people who see others enjoy independence and want to achieve it themselves react to the provisions? I find the thought distressing.
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    As the hon. Member for Halifax (Mr. Galley) said, the logic of the measure runs counter to Government policy. The amount of money to be spent in terms of the numbers involved cannot disrupt Government policy, because it will not significantly affect the amount of money allocated to income support.
    I hope that the Minister will be as constructive, generous and correct as he was that Friday morning a few weeks ago when we debated and passed the disabled persons measure. That did much in terms of needs and rights for disabled people. The amendment seeks to preserve and protect the needs and rights of severely disabled people.
    The Minister said that the social fund appeals mechanism conferred rights. The rights involved in his amendment are more fundamental than the right to an independent appeal. We are talking about the right to support under the legislation to give disabled people a sense of independence and security. I support the spirit and detail of what has been said about the amendment.
    Mr. Fred Silvester: I did not serve on the Committee on the Bill and so I am treading an area where other hon. Members spent many hours in discussion. I support the amendment. I hope that the Minister will address two crucial issues. Since we published the Green Paper concern has been expressed about those who are particularly dependent upon state benefit because of the multiplicity of their disabilities and their need for special support. The Government have said that they will consider the matter, which they recognise as important. We are now at the eleventh hour and we need a response. The Minister must make it clear that the Government intend to write greater safeguards in to the Bill.
    No one has suggested that the sums lost will involve the current holders of benefits. They are to be lost by people
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    of like kind in future. It is not suggested that economies should be made at the expense of current recipients. It is not suggested that people in receipt of such benefits do not need them.
    People have had benefits which we, by definition, agree that they need but which we know from the evidence are to be taken away from them and which the Government do not wish to take from them. We seem to be on all fours, but the Bill does not provide the security or knowledge that people require.
    I doubt whether the measure serves the Government's purpose because the social fund was setup to sweep together the multiplicity of applications covering a range of social security needs and to provide a mechanism so that people could get into the fund from time to time as needs arise. We are talking about a group of people whose needs are known for a long period, where the payment is not an individual or periodic payment but a continuous payment. If we know now that those continuous payments are needed at the present level or at that which we can afford, why can we no provide a means in the Bill whereby a continuous payment is made in future?
    It seems to me that, from the definition in the Green Paper, the social fund is not a sensible means by which to make the payment. It will complicate the administration of the social fund, which will not be to the benefit of the reform. We should provide a continuous means of income support for severely disabled people, administered by people who consider individual cases and know a lot of detail about disability, who will arrive at what they regard as a reasonable, continuous sum. We should use that highly concentrated and highly developed expertise for that purpose. I hope that the Government will find a way of providing an additional mechanism for continuous support outside the social fund that will give to the people concerned the sense of security that they so severely desire.
    Mr. Tom Clarke: The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) was most reassuring, because I rise with some trepidation in the knowledge that no only has the House heard some informed speeches, including that of the hon. Gentleman and those of hon. Members who have served on the important Committee, but that of my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) and those of members of the all-party disablement group, including my right hon. Friend the Member for Stoke-on- Trent, South (Mr. Ashley) and the hon. Member for Exeter (Mr. Hannam). They demonstrated to me during the passage of the Disabled Persons (Services, Consultation and Representation) Bill that it is one of the most effective groups in the House. Certainly, it is the best informed group in the House. Without wishing to be patronising, I think that the Minister for Social Security would be well advised to listen to the advice of that group, especially when the advice is as unanimous as it would appear to be regarding the clause.
    When the House discussed that Bill, hon. Members and I received correspondence which showed that the whole issue of community care, and how we as a society respond to it, is one of the most vital matters that disabled people face. This debate gives us an opportunity to ask the fundamental question: what does community care mean? What explanation do we offer when people ask about community care? How can we possibly have community

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    care in any meaningful sense if as the correspondence we all received suggests, we are not providing the resources which are essential if only to maintain the dignity of so many people who have given so much to our community. There is not the emphasis on care which the House would like to see.
    I support the amendment. I support it in the knowledge that we are dealing with about 4,600 people, which is the tip of the iceberg. The problems run far more deeply than we realise, but that it is right to accept that if people have to face the problem and the reality of disability, no just day after day but hour after hour, and if the problem grows with age, we should not impose the worry of how to pay for the next laundry bill or whether their heating charges will be so high that they cannot turn up their heaters, and in so doing act in conflict with the medical advice that they have been given.
    Additional community care recognition as advocated in the amendment represents a step forward. On the basis of representations that have been made to me and other hon. Members, I regret that such a facility has no existed before. I would be quite wrong to introduce any element of discretion into his Bill. Our method of dealing with these matters seems patchy in the extreme. Some of the people who did not agree that we should be doing a bit more than we are about carers seemed to come from parts of the country where carers were most in need of assistance, where ordinary domestic circumstances were so compelling that some of the information left us stunned. There is a challenge to try to do something as the amendment suggests.
    I agree that the choice is often between a reasonable approach—giving a bit of assistance to people who have done a sterling job, usually without complain — or opening the door to institutional care. We have two objections to the later. First, it is wrong for people to be compelled to go to institutions when it can be avoided and, secondly, community care with real meaning is something that we want to encourage.
    It seems insulting in the extreme to wave the banner of community care, knowing that it means that the House is washing its hands of the problem and saying that, if resources are necessary, they will have to be found elsewhere. There is a feeling of pride among the folks who we are discussing, and rightly so. I would be wrong for us to attempt to diminish that pride. I refer to pride in individual achievement and pride in spreading limited resources, and even spreading limited affection.
    There is a dignity there which the House should be encouraging. I know of the Minister's interest in these matters and I do not want to be insulting about this role. My regret is that the ability that the displays is being spent on matters such as this. He is capable of a much more constructive and helpful contribution and I am sorry that he has been chained to such legislation.
    With the amendment, however, the Minister has a chance to redeem himself, and I urge him to take that opportunity. Yesterday's The Sunday Times carried a profile of a very good friend of all of us—Mr. Brian Rix. It said that Mr. Rix will be advising the Prime Minister's advisers on Thursday on how the Government might be presented as more caring. I have not had an opportunity to have a word with Mr. Rix, but, knowing him, I suspect that he is likely to tell the Government that they could take a step in that direction by accepting the minor proposal in the amendment and by showing the
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    House and the country that, for once, they will encourage a new approach and that they believe that there is a place in society for those who ignore the concept that we should consider the price of everything and the value of nothing.
    Mr. Cohen: When I was at the shops this morning I saw a constituent of mine who is now in a wheelchair. I went over to speak to him, and he said "I'm finished". He meant that he would not walk again, but, chillingly, he mean much more than that. It was a sad assessment of his prospects in our current society.
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    People with disabilities can be helped to gain independence and contribute to society. Their hopes and aspirations for a full life are much the same as the rest of us. A caring society helps them to overcome the obstacles put in their way. My constituent assessed that we do not have much of a caring society and that those obstacles will finish him off. That was his instinctive feeling.
    Disabled people have a right to live a useful life in the community. They have a right to a decent income, which is essential for heir dignity and independence. My constituent and others like him who are disabled have a right to say, "I shall carry on, despite my disability", not to be forced to say "I'm finished."
    I welcomed the amendment to pay the community care addition as a weekly payment to the disabled. There is a clear correlation between poverty, low income and disability. The payment of this weekly benefit will help to tackle poverty and allow the disabled to build a life in the community with dignity.
    In the amendment there is also recognition of the role of some of the carers. They pay a high cost in stress for the job that they do. A recent survey showed 68 per cent. suffering physical illness, 48 per cent. suffering mental stress and many of them living in poverty and social isolation. A caring state should be encouraging the carers. They are the real community carers. That same survey showed that if 5 per cent. of them sopped working, the cost to the health and social services budge would double. Therefore, it is in the state's interest that carers should be encouraged with benefits of this type.
    Real community care does cost money. The Government want to do it on the cheap as an excuse for cuts. That is extremely short-sighted. If they do that, thousands of people will be thrust into the community without support. In those circumstances, many more of them will feel that they are finished, as does my constituent. I support the amendment.
    Dr. Godman: I warmly support the amendment. I remind the Minister that in Committee I mentioned the plight of some of my constituents who are serverely disabled and pointed out to him that some of them receive upwards of £20 by way of clothing allowances, let alone to her allowances. At one point during the Committee's deliberations the Minister replied that my constituents who are suffering from disabilities are covered by the transitional protection.
    I seems that people already on supplementary benefit will have the existing benefit protected, but only in cash terms. That means i will become steadily more inadequate to meet their needs. That point was repeatedly raised in Committee, but to my mind no solution was ever offered. Worse still, anyone who stops drawing benefit, even for a week or two-for example, because of admission to

    127
    hospital—may well lose even that form of protection. I should like to hear what the Minister has to say about the threat of the loss of protection.
    I should like to ask the Minister whether he and his officials have had time to reflect on his remarks about lump sums or intermittent sums given to those leaving hospital in a severely disabled condition. I recognise some of the problems associated with weekly additions, but what is needed is an adequate weekly income with, on occasion, some additional lump or intermittent sums, to use the Minister's words. I would welcome answers to those two questions when the Minister replies.
    Mr. Newton: Once again, the importance of the debate has left me relatively little time to respond to all the points that have been made, but first I should like to acknowledge the importance that I and the Government attach to this subject, which has been reflected in the debate.
    I should like to remind the House of something that could have been overlooked by anyone listening to the debate. Our proposals for the new income support scheme incorporate a significant number of improvements for the overwhelming majority of those classified as long-term sick and disabled, currently for supplementary benefit purposes, and under the Bill, under the income support scheme. People will receive the proposed disablement premium automatically where they are receiving a qualifying benefit such as attendance allowance or severe disablement allowance. Unlike the current position with the long-term rate, receipt by a partner of one of those benefits would passport the family as a whole to extra help.
    In cases where we retain time on benefit rules to deal with cases of people who are unable to work because of ill health or disability but who do not, for whatever reason, receive one of the qualifying benefits, we have, in effect, halved the qualifying period to 28 weeks instead of one year before they receive the premium rate. Those arrangements are consistent with criteria that we already adopt in other long-term sickness and disability benefits.
    It is also important to remember that our proposals on equal treatment should make it easier for a disabled partner to qualify the whole family for extra help. We are also proposing significant improvements in the treatment of part-time earnings of disabled people. This touches on the point raised by several hon. Members — we are committed to continuing the disregard of attendance and mobility allowance.
    This is not a point that I wish to labour too much, because of the shortness of time, but I must remind the House that, on the figures that we have published in the technical annex, illustrative though they are, we estimate that there will be an increase in expenditure of over £50 million a year for those eligible for the disability premium —in other words, £50 million a year overall for those who are classified as long-term sick and disabled. It is clear to anyone who has studied those illustrative figures in the technical annex that, on that basis, the great majority of long-term sick and disabled people would gain or face no change as a result of the proposals. The average improvement across the group as a whole, after allowing for everything in the illustrative figures — the least favourable way of looking at the figures—would be an increase of £4·60 per week.
    128
    That is an important part of the background to the issue, but I would not want to minimise or dismiss the genuine concern that has been expressed about the relatively small numbers of people receiving relatively large amounts of supplementary benefit in the form of some of the present additional requirements, particularly the domestic assistance addition, which must be the basis of much of what has been said by hon. Members on both sides of the House.
    From the debates in Committee, I think that the House, those who were members of the Committee and those who have studied the Committee proceedings, will know that from the information available the numbers involved with the specific problem on which the debate has focused are undoubtedly—and I emphasise that this does not dismiss the problem but puts it into perspective—quite small in comparison to the hundreds of thousands who receive supplementary benefits and the tens of thousands of long term sick and disabled people on supplementary benefit. From the latest information available—admittedly this is out of date—there were some 2,400 payments of the domestic assistance addition and the average payment was not at the level of £40, £50 or £60 a week that some hon. Members have referred to, rather there was an average payment of £3·59 a week. I accept that that information dates back to December 1983, but it shows the nature of the problem and the ease with which it can be exaggerated.
    Whether or not that problem can be exaggerated, that does not mean that it is not an important problem for those affected by the arrangements. It does not minimise the extent to which the Government are concerned to find a solution. However, I cannot accept that the amendment is a solution to the problem, because, in effect, it would entail going away from the basic structure of the Government's income support proposals, with all the advantages that they bring to the great majority of long-term sick and disabled people. The amendment would lead us straight back to the present tangle of weekly additional rquirements. Under these, we try to assess, for example, how many baths people need to take a week, peoples' laundry needs and all the other details that come into these matters.
    Those hon. Members who have spoken must recognise that we will either have the simpler and clearer structure of income support without the great tangle of additional requirements, with all the problems that that entails, or we will maintain that structure and have something similar to the present tangle. That would inescapably mean that many of the people that I have described as "gainers" would have their gains removed by the maintenance of the present structure.
    I hope that the House would recognise that if I were to come forward and say that the Government were abandoning the proposed disability premium and the many important elements of the proposed new structure, I would receive no thanks. Those who would expect to gain from the proposals would suddenly find that they would not. It is inconsistent with the basic nature of the Government's proposals to start tacking back on to the simplified structure that we are proposing, the weekly additional requirements proposed in the amendment.
    I hope that the House and my hon. Friend the Member for Suffolk, South (Mr. Yeo) will recognise that the notion that the amendment's proposal is in some way significantly different from a discretionary way of dealing

    129
    with the problem, whether through the social fund or in some other way, is far fetched if one considers the wording of the amendment. The amendment refers to
    "The needs of a claimant in relation to his proper welfare and needs for care and attention."
    That cannot be settled by a clerical officer in a DHSS local office on the basis of some handbook of regulations. That is essentially a discretionary assessment of the needs and requirements of a severely disabled person. That is a social work assessment. That is the kind of approach that we are trying to build into the system through the operation of the social fund and through the more trained staff that we would expect to have within the social fund.
    I would ask hon. Members to accept that what they are proposing through the amendment is not a continued regulated entitlement, it is simply the writing of what purports to be a regulation which includes a discretionary social work decision within it. It would require discretionary social work or social fund assessments to make it work.
    In response to the requests from my hon. Friends and others, I cannot tell the House that we have yet found a certain way of solving the problems that have been described. We will need to assess the implications of the more up to date information on the receipt of additional requirements as it becomes available.
    The House will know that we have been asked by disability organisations to consider proposals for improving transitional protection. That picks up a point raised by the hon. Member for Greenock and Port Glasgow (Dr. Godman). We have said that we shall look at what some of those organisations have said about improving transitional protection. We shall also want to consider the extent to which the social fund has a role to play in that area, and at some aspects of the developing debate about the Disabled Persons (Services, Consultation and Representation) Bill. Indeed, I must ask the hon. Member for Monklands, West (Mr. Clarke) to consider how far the principles and purposes of his Bill would be undermined by a proposal which enabled local authorities to pass all responsibility for—
    It being half past Ten 0' Clock, MR. SPEAKER proceeded, pursuant to the Order [15 April] and the Resolution this day, to put forthwith the Question already proposed from the Chair.
    The House divided: Ayes 193, Noes 333.

    Division No. 185]

    [10.30 pm

    AYES

    Adams, Allen (Paisley N)

    Bray, Dr Jeremy

    Alton, David

    Brown, Gordon (D'f'mline E)

    Anderson, Donald

    Brown, Hugh D. (Provan)

    Archer, Rt Hon Peter

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

    Ashley, Rt Hon Jack

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

    Ashton, Joe

    Buchan, Norman

    Atkinson, N. (Tottenham)

    Caborn, Richard

    Bagier, Gordon A. T.

    Callaghan, Jim (Heyw'd & M)

    Banks, Tony (Newham NW)

    Campbell, Ian

    Barnett, Guy

    Campbell-Savours, Dale

    Barron, Kevin

    Canavan, Dennis

    Beckett, Mrs Margaret

    Cartwright, John

    Beith, A. J.

    Clark, Dr David (S Shields)

    Bell, Stuart

    Clarke, Thomas

    Benn, Rt Hon Tony

    Clay, Robert

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

    Clelland, David Gordon

    Bermingham, Gerald

    Clwyd, Mrs Ann

    Bidwell, Sydney

    Cocks, Rt Hon M. (Bristol S)

    Blair, Anthony

    Cohen, Harry

    Boothroyd, Miss Betty

    Coleman, Donald

    Boyes, Roland

    Conlan, Bernard

    130

    Cook, Frank (Stockton North)

    McNamara, Kevin

    Cook, Robin F. (Livingston)

    McTaggart, Robert

    Corbett, Robin

    McWilliam, John

    Corbyn, Jeremy

    Madden, Max

    Cox, Thomas (Tooting)

    Marek, Dr John

    Craigen, J. M.

    Marshall, David (Shettleston)

    Crowther, Stan

    Martin, Michael

    Cunliffe, Lawrence

    Mason, Rt Hon Roy

    Cunningham, Dr John

    Maxton, John

    Dalyell, Tam

    Meacher, Michael

    Davies, Rt Hon Denzil (L'lli)

    Meadowcroft, Michael

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

    Michie, William

    Deakins, Eric

    Mikardo, Ian

    Dewar, Donald

    Millan, Rt Hon Bruce

    Dixon, Donald

    Morris, Rt Hon A. (W'shawe)

    Dobson, Frank

    Morris, Rt Hon J. (Aberavon)

    Dormand, Jack

    Oakes, Rt Hon Gordon

    Douglas, Dick

    O'Neill, Martin

    Dubs, Alfred

    Orme, Rt Hon Stanley

    Duffy, A. E. P.

    Park, George

    Dunwoody, Hon Mrs G.

    Parry, Robert

    Eadie, Alex

    Patchett, Terry

    Eastham, Ken

    Pavitt, Laurie

    Edwards, Bob (Wh'mpt'n SE)

    Pendry, Tom

    Evans, John (St. Helens N)

    Pike, Peter

    Fatchett, Derek

    Prescott, John

    Faulds, Andrew

    Radice, Giles

    Fields, T. (L'pool Broad Gn)

    Randall, Stuart

    Fisher, Mark

    Raynsford, Nick

    Flannery, Martin

    Redmond, Martin

    Foot, Rt Hon Michael

    Rees, Rt Hon M. (Leeds S)

    Forrester, John

    Richardson, Ms Jo

    Foster, Derek

    Roberts, Allan (Bootle)

    Foulkes, George

    Roberts, Ernest (Hackney N)

    Fraser, J. (Norwood)

    Robertson, George

    Freeson, Rt Hon Reginald

    Robinson, G. (Coventry NW)

    Freud, Clement

    Rogers, Allan

    Garrett, W. E.

    Rooker, J. W.

    George, Bruce

    Ross, Ernest (Dundee W)

    Gilbert, Rt Hon Dr John

    Rowlands, Ted

    Godman, Dr Norman

    Sedgemore, Brian

    Golding, John

    Sheldon, Rt Hon R.

    Gould, Bryan

    Shields, Mrs Elizabeth

    Gourlay, Harry

    Shore, Rt Hon Peter

    Hamilton, James (M'well N)

    Short, Ms Clare (Ladywood)

    Hamilton, W. W. (Fife Central)

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

    Hardy, Peter

    Silkin, Rt Hon J.

    Heffer, Eric S.

    Skinner, Dennis

    Hogg, N. (C'nauld & Kilsyth)

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

    Holland, Stuart (Vauxhall)

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

    Home Robertson, John

    Soley, Clive

    Howells, Geraint

    Spearing, Nigel

    Hoyle, Douglas

    Steel, Rt Hon David

    Hughes, Dr Mark (Durham)

    Stott, Roger

    Hughes, Robert (Aberdeen N)

    Strang, Gavin

    Hughes, Roy (Newport East)

    Straw, Jack

    Hughes, Sean (Knowsley S)

    Thomas, Dafydd (Merioneth)

    Hume, John

    Thomas, Dr R. (Carmarthen)

    Janner, Hon Greville

    Thompson, J. (Wansbeck)

    Jenkins, Rt Hon Roy (Hillh'd)

    Thome, Stan (Preston)

    John, Brynmor

    Tinn, James

    Jones, Barry (Alyn & Deeside)

    Torney, Tom

    Kennedy, Charles

    Wallace, James

    Kilroy-Silk, Robert

    Wardell, Gareth (Gower)

    Kirkwood, Archy

    Wareing, Robert

    Lambie, David

    Welsh, Michael

    Lead bitter, Ted

    White, James

    Leighton, Ronald

    Wigley, Dafydd

    Lewis, Terence (Worsley)

    Williams, Rt Hon A.

    Litherland, Robert

    Wilson, Gordon

    Lloyd, Tony (Stretford)

    Winnick, David

    Lofthouse, Geoffrey

    Woodall, Alec

    McCartney, Hugh

    Young, David (Bolton SE)

    McDonald, Dr Oonagh

    McGuire, Michael

    Tellers for the Ayes:

    McKay, Allen (Penistone)

    Mr. Ray Powell and Mr. Frank Haynes.

    McKelvey, William

    MacKenzie, Rt Hon Gregor

    131

    NOES

    Adley, Robert

    Fairbairn, Nicholas

    Aitken, Jonathan

    Fallon, Michael

    Alexander, Richard

    Farr, Sir John

    Alison, Rt Hon Michael

    Favell, Anthony

    Amess, David

    Fenner, Mrs Peggy

    Ancram, Michael

    Finsberg, Sir Geoffrey

    Arnold, Tom

    Fletcher, Alexander

    Ashby, David

    Fookes, Miss Janet

    Atkins, Rt Hon Sir H.

    Forman, Nigel

    Atkinson, David (B'm'th E)

    Forsyth, Michael (Stirling)

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

    Forth, Eric

    Baker, Nicholas (Dorset N)

    Fowler, Rt Hon Norman

    Baldry, Tony

    Fox, Marcus

    Banks, Robert (Harrogate)

    Franks, Cecil

    Batiste, Spencer

    Fraser, Peter (Angus East)

    Beaumont-Dark, Anthony

    Freeman, Roger

    Bendall, Vivian

    Fry, Peter

    Benyon, William

    Galley, Roy

    Best, Keith

    Gardiner, George (Reigate)

    Bevan, David Gilroy

    Gardner, Sir Edward (Fylde)

    Biffen, Rt Hon John

    Garel-Jones, Tristan

    Biggs-Davison, Sir John

    Gilmour, Rt Hon Sir Ian

    Blackburn, John

    Glyn, Dr Alan

    Blaker, Rt Hon Sir Peter

    Goodhart, Sir Philip

    Body, Sir Richard

    Goodlad, Alastair

    Bonsor, Sir Nicholas

    Gorst, John

    Bottomley, Peter

    Gow, Ian

    Bottomley, Mrs Virginia

    Gower, Sir Raymond

    Bowden, Gerald (Dulwich)

    Grant, Sir Anthony

    Boyson, Dr Rhodes

    Greenway, Harry

    Brandon-Bravo, Martin

    Gregory, Conal

    Brinton, Tim

    Griffiths, Peter (Portsm'th N)

    Brittan, Rt Hon Leon

    Grist, Ian

    Brooke, Hon Peter

    Ground, Patrick

    Browne, John

    Grylls, Michael

    Bruinvels, Peter

    Gummer, Rt Hon John S

    Bryan, Sir Paul

    Hamilton, Hon A. (Epsom)

    Buchanan-Smith, Rt Hon A.

    Hamilton, Neil (Tatton)

    Buck, Sir Antony

    Hampson, Dr Keith

    Budgen, Nick

    Hanley, Jeremy

    Burt, Alistair

    Hargreaves, Kenneth

    Butcher, John

    Harris, David

    Butler, Rt Hon Sir Adam

    Havers, Rt Hon Sir Michael

    Butterfill, John

    Hawkins, C. (High Peak)

    Carlisle, John (Luton N)

    Hawkins, Sir Paul (N'folk SW)

    Carlisle, Kenneth (Lincoln)

    Hawksley, Warren

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

    Hayes, J.

    Carttiss, Michael

    Hayhoe, Rt Hon Barney

    Cash, William

    Heathcoat-Amory, David

    Channon, Rt Hon Paul

    Heddle, John

    Chapman, Sydney

    Hickmet, Richard

    Chope, Christopher

    Hicks, Robert

    Churchill, W. S.

    Higgins, Rt Hon Terence L.

    Clark, Dr Michael (Rochford)

    Hill, James

    Clark, Sir W. (Croydon S)

    Hind, Kenneth

    Clegg, Sir Walter

    Hirst, Michael

    Cockeram, Eric

    Hogg, Hon Douglas (Gr'th'm)

    Colvin, Michael

    Holland, Sir Philip (Gedling)

    Coombs, Simon

    Holt, Richard

    Cope, John

    Howard, Michael

    Cormack, Patrick

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

    Corrie, John

    Howell, Rt Hon D. (G'ldford)

    Couchman, James

    Howell, Ralph (Norfolk, N)

    Cranborne, Viscount

    Hubbard-Miles, Peter

    Critchley, Julian

    Hunt, David (Wirral W)

    Crouch, David

    Hunt, John (Ravensbourne)

    Currie, Mrs Edwina

    Hunter, Andrew

    Dickens, Geoffrey

    Hurd, Rt Hon Douglas

    Dicks, Terry

    Jackson, Robert

    Dorrell, Stephen

    Jessel, Toby

    Dover, Den

    Johnson Smith, Sir Geoffrey

    du Cann, Rt Hon Sir Edward

    Jones, Gwilym (Cardiff N)

    Durant, Tony

    Jones, Robert (Herts W)

    Dykes, Hugh

    Jopling, Rt Hon Michael

    Edwards, Rt Hon N. (P'broke)

    Joseph, Rt Hon Sir Keith

    Eggar, Tim

    Kershaw, Sir Anthony

    Emery, Sir Peter

    Key, Robert

    Evennett, David

    King, Roger (B'ham N'field)

    Eyre, Sir Reginald

    Knight, Greg (Derby N)

    132

    Knight, Dame Jill (Edgbaston)

    Powell, William (Corby)

    Knowles, Michael

    Powley, John

    Knox, David

    Prentice, Rt Hon Reg

    Lamont, Norman

    Price, Sir David

    Lang, Ian

    Proctor, K. Harvey

    Latham, Michael

    Pym, Rt Hon Francis

    Lawler, Geoffrey

    Raffan, Keith

    Lawrence, Ivan

    Raison, Rt Hon Timothy

    Lee, John (Pendle)

    Rathbone, Tim

    Lennox-Boyd, Hon Mark

    Rees, Rt Hon Peter (Dover)

    Lester, Jim

    Rhodes James, Robert

    Lewis, Sir Kenneth (Stamf'd)

    Ridley, Rt Hon Nicholas

    Lightbown, David

    Rippon, Rt Hon Geoffrey

    Lilley, Peter

    Roberts, Wyn (Conwy)

    Lloyd, Ian (Havant)

    Roe, Mrs Marion

    Lloyd, Peter (Fareham)

    Rossi, Sir Hugh

    Lord, Michael

    Rost, Peter

    Luce, Rt Hon Richard

    Rowe, Andrew

    Lyell, Nicholas

    Rumbold, Mrs Angela

    McCrindle, Robert

    Ryder, Richard

    McCurley, Mrs Anna

    Sackville, Hon Thomas

    Macfarlane, Neil

    Sainsbury, Hon Timothy

    MacGregor, Rt Hon John

    St. John-Stevas, Rt Hon N.

    MacKay, John (Argyll & Bute)

    Sayeed, Jonathan

    Maclean, David John

    Scott, Nicholas

    McLoughlin, Patrick

    Shaw, Giles (Pudsey)

    McNair-Wilson, M. (N'bury)

    Shaw, Sir Michael (Scarb')

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

    Shelton, William (Streatham)

    McQuarrie, Albert

    Shepherd, Colin (Hereford)

    Madel, David

    Shepherd, Richard (Aldridge)

    Major, John

    Sims, Roger

    Malins, Humfrey

    Skeet, Sir Trevor

    Malone, Gerald

    Smith, Tim (Beaconsfield)

    Maples, John

    Soames, Hon Nicholas

    Marland, Paul

    Speed, Keith

    Marlow, Antony

    Speller, Tony

    Marshall, Michael (Arundel)

    Spencer, Derek

    Mates, Michael

    Spicer, Jim (Dorset W)

    Maude, Hon Francis

    Spicer, Michael (S Worcs)

    Mawhinney, Dr Brian

    Squire, Robin

    Maxwell-Hyslop, Robin

    Stanbrook, Ivor

    Mayhew, Sir Patrick

    Stanley, Rt Hon John

    Mellor, David

    Steen, Anthony

    Merchant, Piers

    Stern, Michael

    Miller, Hal (B'grove)

    Stevens, Lewis (Nuneaton)

    Mills, Iain (Meriden)

    Stewart, Allan (Eastwood)

    Miscampbell, Norman

    Stewart, Andrew (Sherwood)

    Mitchell, David (Hants NW)

    Stewart, Ian (Hertf'dshire N)

    Moate, Roger

    Stokes, John

    Monro, Sir Hector

    Stradling Thomas, Sir John

    Montgomery, Sir Fergus

    Sumberg, David

    Moore, Rt Hon John

    Taylor, John (Solihull)

    Morris, M. (N'hampton S)

    Taylor, Teddy (S'end E)

    Morrison, Hon C. (Devizes)

    Tebbit, Rt Hon Norman

    Morrison, Hon P. (Chester)

    Temple-Morris, Peter

    Moynihan, Hon C.

    Thomas, Rt Hon Peter

    Murphy, Christopher

    Thompson, Donald (Calder V)

    Neale, Gerrard

    Thompson, Patrick (N'ich N)

    Needham, Richard

    Thorne, Neil (llford S)

    Nelson, Anthony

    Thurnham, Peter

    Neubert, Michael

    Townend, John (Bridlington)

    Newton, Tony

    Townsend, Cyril D. (B'heath)

    Nicholls, Patrick

    Tracey, Richard

    Normanton, Tom

    Trippier, David

    Onslow, Cranley

    Trotter, Neville

    Oppenheim, Phillip

    Twinn, Dr Ian

    Oppenheim, Rt Hon Mrs S.

    van Straubenzee, Sir W.

    Osborn, Sir John

    Vaughan, Sir Gerard

    Ottaway, Richard

    Viggers, Peter

    Page, Sir John (Harrow W)

    Waddington, David

    Page, Richard (Herts SW)

    Wakeham, Rt Hon John

    Patten, Christopher (Bath)

    Waldegrave, Hon William

    Patten, J. (Oxf W & Abgdn)

    Walden, George

    Pattie, Geoffrey

    Walker, Rt Hon P. (W'cester)

    Pawsey, James

    Wall, Sir Patrick

    Peacock, Mrs Elizabeth

    Waller, Gary

    Percival, Rt Hon Sir Ian

    Ward, John

    Pollock, Alexander

    Wardle, C. (Bexhill)

    Porter, Barry

    Warren, Kenneth

    Portillo, Michael

    Watson, John

    133

    Watts, John

    Wolfson, Mark

    Wells, Bowen (Hertford)

    Wood, Timothy

    Wells, Sir John (Maidstone)

    Woodcock, Michael

    Wheeler, John

    Young, Sir George (Acton)

    Whitfield, John

    Younger, Rt Hon George

    Whitney, Raymond

    Wiggin, Jerry

    Tellers for the Noes:

    Wilkinson, John

    Mr. Carol Mather and Mr. Robert Boscawen.

    Winterton, Mrs Ann

    Winterton, Nicholas

    Question accordingly negatived.
    Mr. Deputy Speaker (Mr. Harold Walker): I am now required to put the Question on the outstanding Government amendment in this group, namely, amendment No. 62.

  Clause 21
    INCOME SUPPORT
    Amendment made: No. 62, in page 26, line 11, leave out subsection (4).—[Mr. Newton.]
  Clause 23

    RECOVERY OF EXPENDITURE ON BENEFIT FROM PERSON LIABLE FOR MAINTENANCE
    Mr. Major: I beg to move amendment No. 63, in page 29, line 32, leave out 'subsection' and insert 'subsections (2), (3) and
    Mr. Deputy Speaker: With this it will be convenient to consider Government amendments Nos. 64 to 67 and 135.
    Mr. Major: Amendment No. 63 and the related amendments in this particular grouping are consequential amendments stemming from the passage of the Law Reform (Parent and Child) (Scotland) Act 1986. The effect of the Scottish Act is to remove the legal differences between legitimate and illegitimate children without conferring parental rights automatically on the fathers of all illegitimate children. I do not propose to deal with the contents of that Act. I shall say no more than that these amendments amend the Bill to take account of changes in the law in Scotland which deal with illegitimacy.
    Amendment agreed to.
    Amendment made: No. 64, in page 29, line 35, at end insert—
    '(9) On an application under subsection (1) above a court in Scotland may make a finding as to the parentage of a child for the purpose of establishing whether a person is, for the purposes of this section and section 25 below, liable to maintain him.'. —[Mr. Newton.]

  Clause 24
    AFFILIATION ORDERS
    Amendment made: No. 65, in page 30, line 41, leave out subsection (6).—[Mr. Major.]
  Clause 25

    FAILURE TO MAINTAIN—GENERAL
    Amendments made: No. 66, in page 32, line 9, leave out from 'father' to '; and' in line 10.
    No. 67, in page 32, line 12, at end insert—
    134
    '(4A) Subsection (4) above does not apply to Scotland, and in the application of Subsection (3) above to Scotland any reference to children shall be construed as a reference to children whether or not their parents have ever been married to one another.'.—[Mr. Major.]

  Clause 27

    PAYMENT AND RECOVERY OF FAMILY CREDIT
    Mr. Robin Squire: I beg to move amendment No. 68, in page 34, line 4, leave from beginning to `by' in line 5.
    Mr. Deputy Speaker: With this, it will be convenient to consider the following amendments: No. 69, in page 34, line 4, after `employer', insert
    'at the request of the claimant and, if he is a member of a married or unmarried couple, the other member'.
    No. 70, in page 34, line 7. leave out paragraph (b).
    Mr. Squire: The effect of these amendments is to return to the existing principle relating to those on family income supplement, namely that support for low income families is paid by the DHSS to the stay-at-home parent, who is usually the mother.
    I have read about the Herculean labours of my hon. Friend the Member for Kensington (Sir B. Rhys Williams) in Committee—
    Mr. Jeremy Corbyn: What about the rest of us?
    Mr. Squire: I take the hon. Gentleman's point. Other hon. Members also played their part. However, I am sure that the hon. Gentleman will readily concede that the labours of my hon. Friend the Member for Kensington of which I speak were indeed prodigious. They were well directed and my hon. Friend made his case in Committee. Unfortunately, he lost the amendment concerned by a single vote. I am grateful for the opportunity this evening further to put the case and I trust that this time we shall be more successful. I am urging the status quo upon my right hon. and hon. Friends. I can hardly think of a more Conservative principle than that.
    To summarise my three main bones of contention, they are these. First, I believe that the Government's proposals, as drafted, will place a considerable administrative burden upon employers in general, particularly small employers. Secondly, as a direct consequence, particularly for small employers, there will be a reduced take-up, because some employers will not wish to become involved in benefit matters with their employers. Thirdly, I believe it to be a retrograde step to cease payments to the mother or caring parent. If we had had our expected debate on child benefit earlier this evening, I should have expected my hon. Friend the Minister forcefully defend the right for benefit to be paid to the caring parent. There is a more than strong argument that family credit should be treated in exactly the same way.
    Let me illustrate first the effect on employers by quoting some of the many submissions which my right hon. Friend the Secretary of State has received. The Confederation of British Industry was clear. It said:
    "The CBI does not consider that it is essential or appropriate for the proposed family credit to be paid by employers. Members do not believe the 'pay packet' is the proper vehicle for social security benefits; it is more appropriate for social security benefits be paid separately to wages and identified as money paid by the Government … Under this proposal there would be no

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    great administrative saving to the Government as the DHSS would undertake assessment of entitlement. Indeed, there would therefore be a duplication of effort."
    The Institute of Directors said simply:
    "Our one concern with the proposal for family credit to be paid through the employee's pay packet is the additional administrative burden this may place on employers."
    The National Farmers Union said that it
    "runs entirely contrary to initiatives from other Government departments to reduce the legislative and administrative burden imposed on business by the Government. The proposed family credit scheme will especially affect employers with small workforces, such as farmers, who do not have the time or personnel to spare to devote to such administrative tasks."
    The National Federation of Self-Employed and Small Businesses said:
    "From the employer's point of view, the fact that women do not receive the benefit and that child benefit may decrease will do nothing to increase the harmony of employee employer relationships when employers are responsible for meeting part of the needs of the family. In view of the above, we therefore see the proposed family credit benefit as a retrograde step for both employees and employers alike … it will just complicate the employment relationship."
    Those are hardly ringing tones of endorsement.
    As it happens, large employers will probably be able to handle the scheme, although I question whether they should be required to do so. More interesting comments, dealing with the effectiveness of the DHSS, have come from the National Association of Citizens Advice Bureaux which said:
    "The proposal to involve both the DHSS and the employer in the payment of family credit will simply serve to exacerbate the very worst elements of the FIS scheme and of means-tested benefits generally. For example, employees will still be required to apply to the DHSS who will be responsible for the assessment of entitlement to family credit. The DHSS will then have to liaise with the employer over payment. The extra administration required will increase the burden on already overworked local DHSS office staff."
    There can be few hon. Members who do not recall the problems in recent years—housing benefit being one obvious example—where a benefit or payment has been required to be linked up to two or more points of contact prior to payment. It was an interesting time. That is the fairest way that I can put it. I dread that we may be setting up here a repeat performance and I urge my hon. Friends to think carefully before they support it.
    In a sense, an even worse comment came from the same quarter. The NACAB said:
    "The scheme is open to substantial abuse by some unscrupulous employers who may be unwilling to administer it."
    It gave an example from its Prescot office and I urge hon. Members to bear this in mind. That office approached a local shopkeeper to test his reactions to the family credit proposals and the following conversation was reported:
    "I said employers would be asked to pay family credit to those entitled although the DHSS would work out the amounts to be paid. If that was the case, he said, without any prompting from me, he would enquire how old the children were if he was taking on new staff, and favour either young girls or older women to avoid the problem as he felt he had quite enough paperwork already and had no desire to probe into his employees' private lives. I discussed with him the possibility of discrimination against people with school-age children being illegal and he gave me an inscrutable look and said it would be difficult to prove if you worded your advert fairly broadly".
    Thus, rather than helping to alleviate unemployment amongst people with family responsibilities, family credit could aggravate their employment problems.
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    The last quote on this subject is from the same source, the National Association of Citizens Advice Bureaux, and it touches on the question of the confidentiality of employers and employees. The association said:
    "The lack of confidentiality implied by the involvement of the employer in the payment of benefit, the additional strain which this would place on a sometimes tenuous employee/employer relationship, the stigma associated with being on benefit and everyone knowing about it, as well as a reluctance by loyal employees to place an additional burden on hard-pressed employers, will undoubtedly serve to limit the take up of the new family credit."
    I now turn to the matter of the cessation of the payment of benefit to the mother which, in most cases, would flow from the proposals. This breaks virtually a 10-year cross party agreement on the payment of benefit. I regret that break. It also breaks what I see as the natural link with child benefit that we have rightfully confirmed and which my right hon. Friend regularly affirms will remain payable to the mother. On this issue equally hostile comments have come in. The National Council of Women of Great Britain said:
    "We take great exception to the statement that a disincentive to work and self-help has been 'exacerbated by the way that child benefit and FIS are paid, normally to the wife, so that wage earners may not be fully aware of total income which their family is receiving.' We stress that in many cases it is the wives who are not aware of total income the family is receiving."
    The National Federation of Women's Institutes said:
    "The strongest feeling in this area was over the proposal to enclose family credit in the pay packet of the main wage-earner, usually the husband. A very large majority of members were adamant that family credit should be paid to the mother, either in her pay packet or through the Post Office if she is not working.
    This issue brought almost unanimous protest from our members. It is vital that family credit should be paid to the mother, as happens now with family income supplement."
    Finally, the National Association of Citizens Advice Bureaux said:
    "The payment of family credit through the wage packet to the chief breadwinner rather than by order book to the principal carer (usually the mother) has been greeted with shock by the bureaux. This move will mean the transfer of essential income from the woman to the man, and in many cases, the loss of benefit to the children. This will have dangerous consequences."
    Mr. Nicholas Winterton: I know that my hon. Friend has done a great deal of research into this and allied subjects. In order to present a balance in his argument, could he tell us if any body or organisation has made representations to him in support of the proposal contained in the Bill?
    Mr. Squire: My hon. Friend the Member for Macclesfield (Mr. Winterton) has asked a revealing question. I am led to believe that the one submission that unreservedly supports the Government on the subject is the Monday Club. That is a grouping which I can best describe as not always identified with a caring approach to social matters of this ilk. The important point that my hon. Friend rightly makes is that a wide range of organisations, many of which are traditionally seen as supporters or at least friendly to our party, are hostile to this proposal. Only last week nine of these organisations, including the CBI and the National Farmers Union and others consisting of what I would term our Government's traditional supporters, wrote to my right hon. Friend expressing their deep anxiety. Also last week, even the Scottish Conservative party conference passed a motion congratulating the Government on the social security proposals but asking them to reconsider those for the family credit scheme. From all sides comes the cry, "Think again." I move the

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    amendments in the fervent hope that the Government, my Government, will react to the red warning lights ahead before it is too late.
    11 pm
    Mr. Meacher: I support the hon. Member for Hornchurch (Mr. Squire), but I intend to widen the argument beyond the restrictive dimension of the impact on employers.
    I endorse the argument so strongly and effectively put in Committee on an amendment that was lost by only one vote. I pay tribute to the general work done in Committee by the hon. Member for Kensington (Sir B. Rhys Williams) and to his support for the case.
    First, there is a case against payment through the pay packet. That is a deviation from the principle that has been widely supported throughout the country and accepted within the Conservative party that benefits for children should be paid directly to the parent who has regular, day-to-day responsibility for looking after the child. In most cases where there are two-parent families, the change will mean payments being made to the father, which will undoubtedly lead to greater hidden porverty among children and mothers in families where the income is not shared fairly. We know that, regrettably, there are many such families. The change will also deprive women at home of an important source of independent income, as many surveys have repeatedly shown.
    The Government's proposal is also likely to reduce take-up, because, contrary to what the Government have said, workers do not like their employers being involved in claims for means-tested benefits. Ministers tried to contest that argument in Committee, but it was widely felt by other members of the Committee that they were not convincing when they said that confidentiality should not be a problem.
    Although employers will not receive personal information about their employees, they will inevitably know who is receiving the benefit and the amount that he is receiving. Even if the employees' fears are irrational, they are certainly real enough and could influence their willingness to claim.
    The change will also create an administrative burden for employers, especially small employers.
    Mr. Stern: Will the hon. Gentleman comment on a matter that was not raised in Committee? Every employer receives a PAYE code number for each employee and, following the simplification of PAYE in the past few years, it is not too difficult for an experienced employer to work out the make-up of any code number and ascertain, for example, how much maintenance an employee is paying his ex-wife.
    Mr. Meacher: That is a very Jesuitical argument. I do not think that many employers will spend time and energy going through code numbers to detect payments that might be made for maintenance of a spouse or for any other similar purpose. If the hon. Gentleman is trying to suggest that because that can be done for other purposes there will be no disadvantage if family credit is paid through the pay packet, his argument does not succeed.
    The CBI said in March that it could not see that any improvement in take-up was likely to result from the Govenment's proposals. We believe that they will certainly result in a lower take-up.
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    The change is not designed to cope with frequent job changes, which, unfortunately, are a characteristic of thelow-paid, or with frequently changing employment patterns. I am delighted that the hon. Member for Macclesfield (Mr. Winterton) asked about the responses to the Green Paper. An analysis undertaken by the Child Poverty Action Group revealed that only one organisation — the Monday Club — unequivocally supported the Government's proposal.
    Employers are, I think, universally against the proposal. The Association of Independent Businesses called it
    "an unwelcome development … Increasing the burden to an employer should not be the tool through which integration is achieved".
    The National Federation of Self-Employed and Small Businesses—an organisation dear to the hearts of many Conservative Members — has dubbed it madness and argued that
    "from the employer's point of view, the fact that women do not receive the benefit and that child benefit may decrease will do nothing to increase the harmony of employee-employer relationships when employers are responsible for meeting part of the needs of the family … We therefore see the proposed family credit benefit as a retrograde step for both employees and employers alike."
    I shall take up briefly some of the arguments advanced by Ministers in Committee. I do not know whether the Secretary of State will repeat them, but I want to make it clear that we have not so far found any of the Ministers' arguments convincing. First, they said that family credit should be compared with supplementary benefit and that no one would suggest that children's supplementary benefit rates should be paid to the mother. Family credit and child benefit are alternative ways of assisting working families with children, and that is the relevant comparison. Even if comparison is made with supplementary benefit, family credit, unlike supplementary benefit, is confined to families with children. Surely it is valid to suppose that all of it is intended to meet children's needs. That is the distinction and that is why the comparison with supplementary benefit is not correct.
    Secondly, Ministers have said that payment to the mother is patronising and denies that parenthood is a shared responsibility. The Opposition agree that parenthood is a shared responsibility, but the reality is still that primarily mothers take the main responsibility, and in two-parent families the family income supplement is essentially a benefit for families where the mother stays at home. It is no more patronising for the law to encourage payment to be made direct to the caring parent than for it to decree that payment must be made through the pay packet to help low-paid workers to be more aware of the total family income, which is the main motive behind the Government's move.
    Thirdly, Ministers have said that mothers who work 24 hours or more a week will be able to receive the credit. That is so, but it will affect only about one in 10 of mothers in two-parent families. It is precisely in those families where the mother does not have a wage of her own that direct payment of benefit to her is most important
    Fourthly, Ministers argued that the Government's proposal is a step on the road towards integration of the tax and benefit system. The Green Paper on the reform of personal taxation makes it clear that there is no intention of wider integration of the tax and benefit systems. But even if tax and benefit were integrated, that would not be

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    incompatible with direct payment of family credit to the mother. That argument was accepted by the Select Committee that considered tax credit and by the 1970 Conservative Government. Even if it were the intention eventually to pay family credit automatically through PAYE, there is no reason why payment through the pay packet should start now, with all the attendant disadvantages and none of the advantages of an integrated scheme. In so far as there will be an illusion of integration as family credit appears as an offset against national insurance and PAYE on the wage slip, it will reduce the likelihood of the money being earmarked for the children.
    I turn to the real motive behind the Government's proposal, to which Ministers referred obliquely when they said that it would increase low-paid workers' awareness of total family income and therefore help tackle the unemployment trap. That is what it is all about. It is not a DHSS motive at all: it is a Treasury motive which the Government seek to impose for Treasury reasons. The aim is to make people accept work for low wages. It is nothing to do with family poverty and nothing to do with a policy of remedying the difficulties of low-paid workers. It has everything to do with pushing down wages even lower. That is why we oppose the proposal, why I hope that Government Members will support the hon. Member for Hornchurch—I give him credit for his amendment—and why we reject this retrograde step.
    Mr. Andrew Rowe (Mid-Kent): Every time I think that I shall be persuaded by the Opposition, I have only to listen to the hon. Member for Oldham, West (Mr. Meacher) to find my faith in what I was about to say rudely shaken. However, I must say again that the small businesses and the people who do not have the time or cash to join the relevant organisations are distressed by the thought that yet another function formerly discharged by central bureaucracy is to be discharged at their own hand. It is ironic that the Government have rightly paraded as one of the great triumphs of policy the creation of hundreds of thousands of small companies in the last two years. Every 100 firms which began on the enterprise alliance created 99 new jobs.
    Companies of that size not only do not want the additional paper work which would result from such schemes, but their perception is tharge if they make a mistake in the administration of the scheme they will lay themselves open not only to inspection but to the law. There are quite enough perceived and real impediments to setting up a small business for that to be an additional disincentive.
    Many small firms are teetering on the brink each day. They might have to go in the end. They might employ two or three people and many in charge are at an age when it is not easy to adapt to change and they are frightened of additional burdens. They might decide to bring forward by three or four years the day when they put up the shutters with the consequent loss of employment which we cannot afford at this time.
    I am practical enough to know that it is improbable that at this late state the Government will be able to reverse all that they said in Committee, although I hope that they will. At least may we have an assurance that the Government will look at the matter carefully and, if events turn out as I fear, that they will reverse the policy?
    Mr. Kirkwood: I agree with the tone adopted by the hon. Member for Mid-Kent (Mr. Rowe) because I think that hon. Members should pause and consider exactly what is happening to small business men. In Committee the Government relied heavily on the argument that statutory sick pay was a useful model, as was statutory maternity pay. They argued that businesses could cope. with no difficulty.
    In my experience, that is wrong. My constituency contains a high proportion of small businesses. There is a fear and misgiving about the administrative burden that the proposal will impose upon their daily lives. Government Members should think carefully before they support the Government on this matter.
    I have some sympathy with some of the family credit changes in other directions, but is irrelevant and unneccessary to pay it in the proposed fashion. It is not beyond the wit of man to retain the Government's family credit scheme—if that is what they are minded to do— without this method of payment. That point should be borne in mind by hon. Members opposite when they vote. They are inflicting agony and additional adminstrative burdens on many traditional supporters of the Conservative party, but they are not necessarily striking at the Government's main intention to introduce a family credit system.
    My additional fear about the system that the Government propose is that it will necessarily, de facto and in principle, affect the take-up provisions. We were told by the Government that there is a 50 per cent. take-up of family income supplement. Hon. Members on both sides of the House agree that the level of take-up is too low. The Government estimate that family credit will have a take-up rate of 60 per cent. I think that that figure is still too low. The figure of 60 per cent. is an optimistic one.
    I endorse what the hon. Member for Oldham, West (Mr. Meacher) has said thus far about the problems of the employee-employer relationship—an employee and an employer discussing intimately the details of family credit —and confidentiality. In my part of the world—I do not know about other Members' areas; the position may be different in their part of the world—it is a anathema for many employees to discuss such details with their employer. Because of their pride they would rather do without. That may be wrong, but it is a fact. We are not talking about substantial sums of money. Often, family credit payments will be only £2·50 or thereabouts.
    I ask hon. Members opposite to put themselves in the position of an employee having to approach his employer every 26 weeks and saying, "My assessment unit is so many people and my income is so much," and so on. I do not believe for one moment that take-up will not be affected. History will prove either me or the Government right. The Government will be lucky to achieve their target of 60 per cent. If they do not achieve it, the whole basis of their argument about family credit will be vitiated. Any benefit that the Government wish to accrue from the proposal will go straight out of the window. That is an important argument.
    I served on the Standing Committee. I was deeply impressed by the number of organisations which responded to the proposal. The organisations, which included the Salvation Army where not those normally associated with political lobbying. The organisations

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    represented an unholy coalition of all sorts of people— from political lobbyists down, or up, depending on how one looks at it.
    If the Conservative party intends to go down that road in the face of such opposition from people who are not necessarily involved in the day-to-day political process, it is making a sad mistake. For those reasons, I think that the Government should be forced to change their position— not that it will result in the Government losing the proposal, because that is not necessary. The Government could change the detail of implementing the proposal in a way that would satisfy everybody by accepting the amendment moved by the hon. Member for Hornchurch (Mr. Squire).
    Mrs. Kellett-BowmanI am very happy to support my hon. Friend the Member for Hornchurch (Mr. Squire).
    I am the more uneasy about the proposals on family credit, because we were prevented earlier this evening from discussing the proposals for child benefit. We cannot therefore be sure that child benefit will not shrink. If it does, it will be all the more important for family credit to be paid to the mother or normally caring parent. The overwhelming majority — about 90 per cent. — of families that would receive the benefit depend on the single income of the father.
    The Lancashire Federation of Women's Institute— down-to-earth women, sensible and exceedingly well informed—say firmly:
    "at best, giving family credit to the father will be an inconvenience for mothers; at worst, it may mean she will not receive the money at all."
    It would be tragic if women were deprived of an independent source of income.
    Some years ago, when discussing a rather different system of taxation, we were astounded at the number of women in all walks of life, from professors' wives to the lowest income families, who had no independent income except family allowance, as it then was. It would be deeply regrettable if we degenerated to that again. I therefore hope that the House will consider carefully and support the amendment.
    Mrs. Renée Short: The House will know that the Social Services Select Committee examined the Green Paper, the White Paper and then the Bill when it was published, and that we published our report in time for the work of the Standing Committee. It is a matter of great regret that so little attention was apparently paid to our recommendations.
    The Select Committee supported an integrated system of tax and child credits, but said that there was no reason why family credit, which replaces family income supplement for low-income families, should not be paid direct to the caring parent. We also drew attention to the complexities inherent in payment through the employer. An employee might change jobs, be laid off because of a shortage of work, become redundant or be on strike. All of that was discussed, as was the potential effect on the level of wages of paying family credit through the employer.
    I was pleased to see the hon. Member for Kensington (Sir B. Rhys Williams) propose an amendment in Committee to enable family credit to be paid direct to the person normally entitled to claim child benefit. That really means preserving the status quo. The amendment was defeated. I regret that that defeat was brought about by the
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    defection of a member of the Standing Committee who is a member of the Select Committee and by a member of the Standing Committee who is a former member of the Select Committee. The Opposition would have carried the amendment if those two hon. Members who, needless to say they are Conservative Members, had remained constant and true to the decisions of the Select Committee, to which their names were attached.
    In Standing Committee the Minister gave no indication that the Government would change their proposal to pay family credit through employers, but I understand that he gave an undertaking to look at the details, although I do not know how far that will take us. The Government's present proposal is deplorable. It is against women, against mothers and dismally retrograde in every respect. I hope that the House will throw it out and see that the Select Committee's proposal is supported.
    Mr. Winterton: I am grateful to the hon. Lady, who is a distinguished member of the Social Services Select Committee, of which I also happen to be a member, for giving way. Perhaps she should emphasise the fact that the thoughts, considerations, recommendations and conclusions of the Select Committee were representative of all parties in the House. Perhaps she agrees that it would be better if Governments allowed Select Committees to put their conclusions and recommendations on major legislation such as this to the Government before they reach fixed conclusions which are widely opposed throughout the country, even by people who traditionally support the Conservative party.
    Mrs. Short: I agree with the distinguished co-member of the Committee. All the members supported the Select Committee's recommendations. The House surely knows that there is a majority of Conservative Members on the Committee, and several parties are represented, but we were unanimous.
    It is a matter of great regret that the Secretary of State and Ministers do not pay more attention to united and unanimous reports from Select Committees, especially when, as I say, there is a majority of Conservative Members on the Committee. It is nonsense that so much time and effort are wasted in this way, when Secretaries of State could make their jobs much easier if they would follow our proposals.
    Mr. Keith Best (Ynys Môn): It sadly looks as though my right hon. Friend the Secretary of State will be standing all alone against the barrage of opposition from both sides of the House. I wondered whether I should rise to support him, but then I thought again. I thought again because, although I am always much persuaded by what my right hon. Friend has to say—I await with eager anticipation the words that I know that he will utter from the Dispatch Box in order to turn the barrage of dissension into a victory —I looked at the degree of opposition to this measure. My grave concern is that the good idea of family credit is likely to be hoisted on the petard of that opposition.
    I can live with the opposition of the catholic bishop's conference. That does not bother me very much. I can even live with the opposition of the Commission for Racial Equality. I can certainly live with the opposition of the Equal Opportunities Commission. I find it a little more difficult to live with the opposition of the National Association of Citizens Advice Bureaux. One may say that that is a constituency point because I have a citizens advice

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    bureau in my constituency. I wonder how many hon. Member do not have such a bureau in their constituency. I can live with the opposition of the Church of Scotland as that does not apply to me particularly. The Confederation of British Industry is not always regarded as the staunchest supporter of the Government in a somewhat confused way so perhaps one can discount that and I can certainly live with the opposition of the Institute of Directors.
    However, I am in grave difficulty with the National Farmers Union because of all the farmers in my constituency and I am in grave difficulty with the opposition of the National Federation of Self-employed and Small Businesses Ltd and with the National Federation of Women's Institutes. [Interruption.] My hon. Friend the Member for Harlow (Mr. Hayes) obviously has knowledge of that institution. Finally, I speak as a member of the Bar. How could I possibly rail against the opposition of the Law Society, my very bread and butter in an alternative profession?
    I am troubled by the sheer administrative burden that this is likely to bring about more than by all the opposition and all the points that have validly been made by hon. Members from both sides of the House. I shall put my right hon. Friend the Secretary of State out of his misery soon because I shall be sitting down so that he can rise. I hope that he will address his mind to that administrative burden when he comes to the Dispatch Box.
    To have to employ a lot of extra civil servants to check whether the DHSS is assessing the matter correctly, to pass it on to the employers, and then check on the employers to see whether they are making the right calculations and see that the recalcitrant employers are brought to book, apart from all the burdens that are being placed on the employers, seems to be contrary to the concept that the Government have courageously entertained throughout the past seven years. That concept is to cut the administrative burden, particularly in areas of social welfare, to ensure that the benefits go to the recipient rather than being spent on the administration. The proposal will create a bureaucratic mess of unparalleled proportions, by creating two bodies responsible for the administration of one benefit rather than one.
    I await my right hon. Friend the Secretary of State rising at the Dispatch Box and persuading me otherwise. He is a most persuasive speaker, but in the event of him not being able to do so, the general opposition of the bodies that I have mentioned, together with the views expressed by hon. Members on both sides of the House, must be persuasive in a way that defies all opposition.
    11.30 pm
    Mr. Corbyn: It is surprising to find Conservative Members working themselves up into a lather in defence of small businesses, when they are not prepared to criticise the fundamental nature of the family credit proposals and the poverty that they will bring with them. They seem to be trying to cash in on a bit of compassion on the issue without being prepared to attack the basis of the proposals. My hon. Friend the Member for Oldham, West (Mr. Meacher) was correct when he said that the proposals are, in effect, masking low wages. That is the issue that should be addressed.
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    It is important that the amendment be accepted, because if the proposals go through in their present form, there will be interference by employers in the social benefits that their employees get, which is serious. Much more serious is the proposal that the benefit should in most cases be paid to the man who is likely to be earning the money. Therefore, it is unlikely to get to the woman, and it is even less likely to get to the children at the end of the day—[Interruption.] If the hon. Member for Gillingham (Mr. Couchman) wishes to speak, I am sure that he has a tongue in his head. There is no need to mumble. It is clear that the losers will be the children.
    Dame Jill Knight: I want to press the hon. Gentleman on one point. Does he really think that it is unlikely that the fathers would pass on the money? I can imagine that it would happen in some cases, but I am concerned that he feels that it is unlikely.
    Mr. Corbyn: All the evidence in the past has been that when benefit is paid to the male parent, it is not passed on through the family network. I am saying not that all those men are particularly evil or greedy, but that all the other pressures of paying rent, rates and other bills will tend to take first place, and the children will lose out at the end of the day. If the hon. Lady looks at past evidence and representations that have been made by a wide range of organisations, she will be forced to agree that the Secretary of State's proposals in that respect are extremely bad.
    There is a further area that I hope the Secretary of State will be prepared to consider, because he did not give a satisfactory answer in Committee. I refer to the administration of the system. As has been said, many small companies strongly object to having this piece of administration thrust upon them. I object because it is wrong that it should be done through the employer; it should be done by the Secretary of State. I object also because the sheer inefficiency of many small companies will mean that benefit is unlikely to be paid.
    There is another serious aspect. Small businesses, particularly in industries such as the clothing industry, go out of business with monotonous regularity in areas such as mine. If the business goes bust on a Friday afternoon, and no wages can be paid to the workers, what happens to the family credit, which may not be paid until several weeks afterwards, when all the liquidation has been sorted out? That might seem a small point to some Conservative Members, but it is very important to people in my constituency. I hope that the Secretary of State will understand that the massive opposition to this proposal comes from those who are concerned about the cost of administration in this rather cock-eyed way and from those who are more fundamentally concerned that the benefit will not get through.
    When the benefits were originally paid via women, to ensure that they reached the children, that was an important step forward. We are turning our backs on the past 20 years of social service legislation with this proposal, as with so much else in this particularly nasty Bill.
    Mr. Geoffrey Dickens: I am sure that every sensible and reasonable person outside the House of Commons would believe that the best way of getting a benefit that is intended to help children is through the mother. Whether we like it or not, the majority of fathers would try to ensure that the benefit

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    reached the children. However, there are some families —for example, fathers in disadvantaged areas—where the father's self-discipline is modest. Often, this has to be said and we should not mince words about this, that money would go to the betting office or to the pub and would not get to the mother or the child. We must think very deeply about the operation of the benefit.
    We cannot dismiss the fact that we are putting a further burden on small businesses. I belong to a party that has boasted, year in, year out, that it would take the burdens off businesses, that it would water down the paper work and make it easier for people to run a business without having the Government on their backs. However, we are here again proposing to put a further burden on business which will prevent people from earning a living and from giving other people a living within their companies. The amendment proposes another burden that businesses could do without.
    I am sure that hon. Members have not received such large post bags from companies and the confederation of British industry, which is so opposed to this form of legislation. I do not disagree with the reform of the welfare state system. We would all agree that the system should no longer be universal. We should make it selective so that the benefit goes to those in most need. That is right and correct and all hon. Members would support that.
    Mr. Deputy Speaker (Mr. Harold Walker): I hope that the hon. Gentleman will address himself to the amendment. He is going very wide of it in his speech.
    Mr. Dickens: If Beveridge had been sitting in the Chamber tonight, he would have agreed with my comments.
    In conclusion, if we want to benefit the children, we should ensure that the money goes to the mother. By and large, the children will have more of a sporting chance of receiving that benefit if it goes through the mother than if it were paid through the father's pay packet where he has to tell the company all his business to achieve the benefit and where the company must do the paper work to ensure that the benefit at least starts from the right direction. That is my view of the matter.
    Mr. Bill Michie: I, too, shall be brief, because this is a controversial clause and amendment in a controversial Bill, which we have been fighting in Committee almost day and night.
    Many Conservative Back Bench Members have spoken about small business men, and I notice that we are talking about the effects not on small businesses but on small business men. I understand that there may be problems of administration and additional cost, but what about the families? We are interested in the problems that the provison is likely to cause families. We are not necessarily criticising men and saying that they are irresponsible. Obviously, problems are likely to arise because of the pressures put on them.
    The most crucial point is the transfer of child benefit from women to men. The child benefit scheme will not compensate for the lack of school meals, and charges for school meals vary greatly. That will cause problems. If I am a good lad today, Mr. Deputy Speaker, I shall no doubt be allowed to speak about school meals tomorrow.
    Some individual employers but not all, are likely to pay low wages and top them up with benefits because of inducements. It will be difficult for some employees to
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    work out whether their wages are as good as they should be compared with the national average because they must take those benefits into consideration. We need clarification. What happens to employees with two part-time jobs, to those who are laid off, to those whose marriages break up, and to those who have a succession of jobs? We need proper answers to those questions.
    It has been said that the various circumstances which I have just described are a nightmare for administration, but we are worried that they will be a nightmare for many British families.
    Mr. Kennedy: I support the amendment proposed by the hon. Member for Hornchurch (Mr. Squire).
    It is an anomaly for the Government to argue the need to lift the burden from small businesses while introducing a move such as this with all its consequences of bureaucracy, paperwork, overheads and time for small businesses. That must be obvious to the Secretary of State.
    Both sides of the House have pointed to the sense of ensuring that payments earmarked for children go specifically to the caring parent, which nine times of out 10 is the mother. That is surely overwhelmingly self evident and something which the Government should support.
    Finally, the hon. Gentleman said that the only representation he was aware of in support of the Government's proposal was from the Monday Club, and that at the weekend the Scottish Tory party, a soon to be extinct species, had said in a debate on the social security reviews that while it welcomed the reviews, this was one point on which it would agree wih the hon. Gentleman.
    Surely at this late hour Conservative Members can follow the advice of the Leader of the House and vote for a balanced ticket by supporting the hon. Gentleman.
    Mr. John Browne: I rise briefly to support the amendment in the name of my hon. Friend the Member for Hornchurch (Mr. Squire).
    I understood a fundamental principle of Conservative thought on social security to be that child benefit should be paid directly to the parent with day-to-day care of the child, who more often than not is the mother. The proposal will mean that in two parent families, in particular, the payment will more often be paid to the father. That will result in considerable hidden poverty for children and mothers in families where the income is not shared fairly.
    The other main reason why I object to the proposal relates to the additional administrative burden on employers. As chairman of the Conservative small business Back Bench committee, I am appalled at the proposal. I simply cannot support it. It is an administrative burden, which is a disincentive to the small business in particular. A recent study showed that the largest disincentive to new small businesses is not the lack of capital, or taxation but administrative burdens, particularly through Government legislation. The proposed change would be a classic example. Furthermore, it is a disincentive not just to smaller businesses but to all employers, and so a disincentive to employment in general.
    I support my right hon. Friend the Secretary of State in nearly all his main aims in social security and its revamping. I beg him to make a commitment that he will re-examine the mechanics of this proposed arrangement.
    11.45 pm
    Ms. Jo Richardson: The one thing that the Government did not do in our debates in Committee, and have not done throughout the argument that has been going on since the Green and White Papers were produced, is to say why payments should be made through the pay packet instead of the way that they are paid now. The Government's arguments in Committee focused more on countering our case, and that of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), than on making a case for the change. This is mystifying.
    On Second Reading the Minister said that it was an astonishing fact that so many organisations were against the change. It is not astonishing. Everybody is against it, except the Secretary of State, but he will not explain why he is taking away this bit of support for women in the family and giving it to the men. It is all the more mystifying because the Government have so frequently confirmed that they will not change the system of paying child benefit, and that they support and praise the system of payment that puts money into the pocket of the mother rather than of the father. If it is good enough for child benefit, why is it not good enough for family income?
    Most of the speeches that have been made tonight have concentrated on the disadvantages and the worries that will come to employers, and we all accept that that will happen. There is a missing element, and we have to point to the fact that, let alone the woman as the mother, the woman as a woman should be regarded as a person in her own right. One of the points about her collecting the family credit is that not only will she direct it to where it is of most use in the family, but she will have a bit of financial independence by helping to redistribute the income within the family.
    Several hon. Members have referred to the problem for far too many women who not only do not get the money for the housekeeping from their husbands, but very often do not know what the husband earns. If all the family credit goes through the pay packet, women will be in a much worse position. My hon. Friend the Member for Sheffield, Heeley (Mr. Michie) said that it would be a nightmare, and that sums up what will happen to women if this proposal goes through. I urge Conservative right hon. and hon. Members—I know that I have no need to do that to those on this side of the House—to support the amendment.
    Mr. Fowler: This has been an important debate, and I congratulate my hon. Friend the Member for Hornchurch (Mr. Squire) on the way in which he moved the amendment. I hope that what I say will meet his concerns and those expressed by my hon. Friends the Members for Mid-Kent (Mr. Rowe), for Lancaster (Mrs. Kellett-Bowman), for Littleborough and Saddleworth (Mr. Dickens) and for Winchester (Mr. Browne) and by the hon. Members for Ross, Cromarty and Skye (Mr. Kennedy) and for Barking (Ms. Richardson).
    Mr. Best: What about Ynys Môn?
    Mr. Fowler: And my hon. Friend the Member for Ynys Môn (Mr. Best). My diffidence about the pronunciation was the only reason for leaving it out.
    I begin by mentioning the background to the family credit proposals and highlighting one point that has not been made in the debate — the important areas of
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    agreement that exist. There is widespread agreement with the Government's central proposition that we should direct more help to low-income families with children. That analysis of need was set out in the Green Paper. The Green Paper proposals, which have been carried through into the Bill, were to meet the evidence of need through several strategies—by the continuation of child benefit, by a new family premium in income support and by a new expanded and improved family credit.
    There are three points of agreement. The first is that greater priority should be given to providing help for low-income families. Family credit will provide extra help. We estimate that it will reach about twice as many families as did family income supplement. More than 400,000 families will benefit, compared with about 200,000 now, and expenditure will, broadly, double.
    Secondly, family credit will significantly help with another of the Government's objectives, which is to improve the poverty and unemployment traps. By calculating the entitlement on the basis of net income after tax and national insurance, we shall effectively end the absurd position where an increase in gross earnings can leave a family worse off overall. That cannot be justified. By closer structural alignment with income support, it tackles the unemployment trap and provides better incentives to take work. Those central objectives have been widely welcomed, and the Social Security Advisory Committee, in its response to the Green Paper, concluded:
    "We agree with the Government's decision to concentrate extra help for children on low-income families, and in principle we welcome the attempt to expand the assistance given to people in work and to eliminate the worst of the poverty trap."
    Thirdly, there is widespread agreement on the inadequacies of the family income supplement. It was introduced about 15 years ago as a temporary stop-gap measure. It has served that purpose, and most people now agree that it should be replaced. The drawbacks of FIS are well established. There is poor take-up, its structure is not aligned with supplementary benefit, and it is assessed on gross rather than net income, which has created the more absurd examples of the poverty trap where families can be left worse off as a result of increased effort and higher pay.
    Those are some of the deficiencies of the present system. Our broad aims and objectives have been widely welcomed. The disagreement that has been expressed in this debate relates to the mechanism of how we achieve those goals. My basic point is that this debate has been about the mechanism of achieving the goals. There is no dispute about the fact that we wish to achieve those goals.
    One advantage that we wish to establish in proposing that family credit should be paid with wages is a link between the credit and work. Sometimes, it is too easy for someone considering taking a job, perhaps at relatively low wages, to consider simply the wages and the deductions from pay for tax and contributions.
    Another advantage is that payment with wages represents a step towards a closer alignment of the tax and benefit systems, a step which I am urged constantly to take. One of the absurdities of family income supplement is that members of one and the same family can be paying tax and other contributions to the state with one hand, while receiving income-related help from the state with the other. By paying the credit with wages, this unnecessary roundabout can be ended. We estimate that in practice about 60 per cent. of family credit recipients would simply

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    have their tax and contributions offset, in whole or in part. In about 40 per cent. of cases they would receive a net payment.
    Two further criticisms have been levelled against this mechanism during the debate: that payment with wages means payment to the man, and that it will mean additional work for employers and that will be unacceptable. I recognise those concerns and the depth of feeling, and I have no desire to minimise or to belittle them. However, I should remind the House that, even with payment with wages, many of the recipients of family credit will be women. About a quarter of the total will be working wives in two-parent families. In most cases, however, the partner in full-time work will be the husband. I appreciate the concern about whether he will hand over sufficient of the extra income to provide for the child. My personal view is the same as that of the hon. Member for Oldham, West (Mr. Meacher), that parenthood is a joint responsibility and, in all but exceptional cases, a joint activity. Mothers will continue to receive child benefit. I repeat that point, because sometimes it has been misunderstood.
    The Government will do everything that they can to avoid placing unnecessary burdens on employers, and we shall seek to change the system. Nevertheless, I appreciate the worries and the anxieties about how family credit should be paid. I take them even more seriously when they are expressed by my hon. Friend the Member for Hornchurch, who supports the family credit system. Therefore, I am prepared to reconsider the mechanism by which family credit is paid. I propose to invite to new discussions a number of organisations which are closely affected. They include the CBI, the National Federation of Self Employed and Small Businesses, the Equal Opportunities Commission and the Women's National Commission. My aim will be to examine whether we can agree a way forward. The discussions will take place speedily, so that time for amendment can be found in another place.
    I am prepared to undertake to reconsider this question. I do so on the basis that the Government stand by the concept of giving extra help to the children of families on low incomes. That is the essential purpose of family credit. More money will be spent, and more families will
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    be helped. That is essential, and I believe that it has the support of the House. I hope that my hon. Friend will accept my undertakings.
    Mr. Squire: It would be churlish of me not to rise to thank my right hon. Friend for his comments and for the way in which he made them. I think that he will have carried with him virtually every right hon. and hon. Member. I was prepared to put the matter to a vote, but in the circumstances and in the interests of arriving at the right answer I believe that I ought to seek the leave of the House to withdraw the amendment.
    Mr. Meacher: Before we complete the debate, will the Secretary of State clarify what he meant when he said that he proposed to review the matter? Will he review the fundamental point that we are all making, that family credit should be paid to the mother, or will he review whether it should be paid through the wage packet but in such a way as not to cause an administrative burden on the employer? Is it the first or the second?
    Mr. Fowler: I am prepared to examine from the beginning the mechanism whereby family credit is paid. I understand and appreciate the point that it should be paid to the mother. There is also the point about whether there should be a choice, as the hon. Gentleman's amendment states, or whether no payment should be allowed through the wage packet at all—
    It being Twelve midnight, MR. DEPUTY SPEAKER proceeded, pursuant to the Order [15 April] and the Resolution this day, to put forthwith the Question already proposed from the Chair.
    Amendment negatived.
    Amendment made: No. 71, in page 35, line 22, at end insert
    'and "employer", in relation to any person, means a person who under section 4 of the Social Security Act 1975 (liability to pay Class 1 contributions) is, or but for subsection (2)(b) of that section (exclusion of liability where earnings are below lower earnings limit) would be, liable to pay secondary Class 1 contributions in relation to any earnings (within the meaning of that Act) of the first-mentioned person'. — [Mr. Fowler.]
    Further consideration of the Bill adjourned. — [Mr. Boscawen.]
    Bill, as amended (in the Standing Committee), to be further considered this day.

  PETITIONS

    Social Security Reform
    12.1 am
    Mr. Tom Pendry: I beg to ask leave formally to present a petition on behalf of some 1,000 people in my constituency who live on just one housing estate, Hattersley, in the borough of Tameside in Greater Manchester. They are profoundly disturbed at the prospect of changes in the social benefit scheme as a result of proposed legislation currently before the House of Commons.
    The petition showeth
    That legislation based on the "Reform of Social Security— Programme for Action" White Paper would be extremely detrimental to the residents of the United Kingdom who are in receipt of Social Security benefits. Wherefore your petitioners pray that your Honourable House do not pass legislation arising out of the "Reform of Social Security" White Paper. And your petitioners, as in duty bound, will ever pray etc.
    To lie upon the Table.
    12.2 am
    Mr. Michael Meacher: I beg to present a petition which has been collected in my constituency of Oldham which includes 2,500 signatures. I also have a further batch of petitions which have been collected from all other parts of the country, totalling about 7,500 signatures, making 10,000 in all, from people who are equally concerned about the Social Security Bill. I repeat their words;
    Wherefore your petitioners pray that your Honourable House do not pass legislation arising out of the "Reform of Social Security" White Paper.
    The grounds that the petitioners give for the collection of the signatures and the protest that it represents are that legislation based on the reform of the social security "Programme for Action" White Paper would be extremely detrimental to the residents of the United Kingdom who are in receipt of social security benefit. I would add that that includes those who are in receipt of pensions, housing benefit and child benefit, as well as supplementary benefit.
    To lie upon the Table.

  Sports Clubs (Rates)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
  12.3 am
  Mr. Michael Forsyth: I wish to raise the important matter of the burden of rates on Scottish amateur sports clubs. I want to begin by expressing my gratitude to Alex Kilgour of the Kirkcaldy rugby club, Alan Grosset, the chairman of the Scottish Sports Association, and Bill Mann of Glasgow Academicals and Western Baths. They have been tireless in providing help and assistance to me and I pay tribute to the way in which they have campaigned in the interests of small clubs throughout Scotland. Scottish clubs are being suffocated by the rating system. The burden on them exceeds £5 million and to put that in context, it compares with the total Government subvention to the Scottish Sports Council of £4·3 million. These rates are a tax on the development of the sporting potential and the recreation of young men and women in Scotland.
  Clubs north of the border are disproportionately hit because of the valuation methods being used. It has been estimated that clubs in Scotland pay six to seven times as much as those in England and Wales. Perhaps I could give some examples. Kirkcaldy rugby club, a small club in the middle of a council park, is paying rates of £5,500 per annum. Bristol rugby club is England's largest with a ground capacity of 15,000 and it pays £4,500. Northampton and Leicester, which are major clubs by any standard, are paying £2,651 and £3,500 respectively. A comparable club to Kirkcaldy would be Keighley, and it pays £640 less a 50 per cent. rebate granted by the local authority.
  It is worth noting that in England clubs enjoy derating regardless of whether they have licensed premises, and local authorities seem to take a more enlightened view. Kirkcaldy pays more in rates in one month than Keighley pays in a year. To put it further into context, Watford football club in the English first division pays only £1,000 more than Kirkcaldy amateur rugby club. The Perthshire cricket club is also in a council park and pays £18,500 per annum in rates. Lords cricket ground, the headquarters of the game, has a huge pavilion, a dining complex, an indoor cricket school, squash courts, a museum and seating for 25,000 spectators. It is located in a 15-acre site in central London and pays £25,700, a mere 30 per cent. more than Perthshire cricket club.
  The Western Baths club in Glasgow is paying £19,500, yet the RAC in Pall Mall is 10 times as large and pays £35,000. Glasgow Academicals has three rugby pitches and pays £16,500. London Scottish in Richmond has seven pitches and premises twice the size of Glasgow Academicals and pays only £5,900 in rates. I am not speaking just about the well-known activities. Ardrossan indoor bowling club pays £16,500 while Darlington indoor bowling club which is approximately the same size pays £5,500. Abercorn tennis club in Edinburgh pays £6,500 and has five tennis courts, three squash courts and a pavilion. Winchester tennis and squash club has 19 tennis courts, eight squash courts and a pavilion and pays £3,000.
  According to some sources in Scotland, there is little rental evidence and assessors are inclined to use the contractors' principle to determine valuations. An estimate is made of the capital value of property and a percentage

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  is taken to arrive at a rental value. The effect of the application of this principle in Scotland is devastating. In England, some weight is attached to revenue factors. For example, infrequent use because sport by its very nature is a part time activity, the effect of climate on use and the number of people who derive benefit from the facilities are all taken into account. In Scotland, no account is taken of these factors, nor is account taken of how the capital is raised, whether by fund raising, grants or donations. People making donations to sport do not look for a return on their capital, yet the assessors look at the assets with the view that they do.
  So far I have quoted rates payable and no doubt my hon. Friend will point to the responsibility of high-spending Labour councils. As he knows, I share his view on that matter, but that cannot account for clubs having to pay five to six times as much as their counterparts in the south. Even if rateable values are considered and an adjustment made for the absence of a revaluation in England, the injustice is manifest. Troon tennis club has six courts and a rateable value of £2,250. Grove tennis club in Essex with five courts has a rateable value of £95. The indoor bowling club at Lanark has a rateable value of £22,500. The indoor bowling club in Carlisle, which is similar and which was built at the same time, has a rateable value of £2,000. Those examples show variations of 10 times and 20 times, where variations of four times might be expected as a result of the fact that there has been no revaluation in England.
  I hope that my hon. Friend the Minister will accept that the method of revaluation in Scotland has produced rateable values that are unfair, unrealistic and wholly out of line with the rest of the United Kingdom.
  Mr. Dennis Canavan: The hon. Member makes a good case in relation to the grotesque inequalities between the rating valuation of sports grounds in Scotland and in England. No one can deny that fact, and the injustice has been perpetuated and possibly reinforced by this wicked Tory Government, but will the hon. Gentleman at least have the decency to congratulate some local authorities, including his own — Stirling district council—on using their income from the rating system to try to improve sports facilities in their areas? For example, Stirling council has supported the excellent Stirling district sports council and a range of sport facilities in the district.
  Mr. Forsyth: I am grateful to the hon. Gentleman. I should emphasise that there are no party divisions in this matter, which enjoys support across the board. I shall come on to the record of Central region.
  My hon. Friend the Minister recognised the unfair nature of the methods of valuation in Scotland in section 19 of the Rating and Valuation (Amendment) (Scotland) Act 1984, but, as he must know, the weight of opinion expressed by the Assessors Association, the Sports Council and professional advisers is that section 19 is ineffective. While my hon. Friend adopts a wait-and-see policy, clubs are reaching onerous settlements with valuers, making it harder for others to use section 19 which restricts the use of English comparators to circumstances where there is no comparative evidence in Scotland or where such evidence is not adequate — whatever that means.
  While clubs run by volunteers and their professional advisers struggle to find meaningful comparisons with
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  England and Wales, taking into account the effects of revaluations, they continue to suffer serious financial problems.
  Wade Academy FP had loans from the Scottish rugby football union rescheduled. Its clubhouse consists of two cottages knocked together and its rates are £2,500. Strathmore rugby club has laid off staff and has riot yet paid its rates. Many others are in the same boat, with staff being laid off and the energies of leaders being diverted to fund-raising rather than training our youngsters. Be in no doubt, Mr. Deputy Speaker, that, if we lose these amateur clubs, the whole recreation structure in Scotland, which has already been damaged by the teachers' strike, will collapse and the burden will fall on local government and the state.
  I welcome the commitment in the Green Paper, which I hope that my hon. Friend will reiterate, to eliminate cross-border anomalies, but our clubs cannot wait that long. Interim help is required. Discretion is given to local authorities to give relief up to 100 per cent. to amateur sports clubs, and in case my hon. Friend is worried about opening Pandora's box a clear definition of that term has been produced by the sports associations.
  Unfortunately, few local authorities grant relief for sports clubs if they have a licence. In answer to the point made by the hon. Member for Falkirk, West (Mr. Canavan), that is particularly true in Lothian, Fife, Central and Strathclyde regions. Ironically, only miners' welfare clubs enjoy 50 per cent. derating as of right. The local authorities argue that they would be subsidising alcohol and that it would be unfair competition.
  The clubs are in a Catch-22 situation. If they give up their bars they will upset their members who wish to have a social drink after a game and lose income that they need to pay the rates, even if those are reduced as a result of their sacrifice.
  As for unfair competition, few, if any, clubs could be considered as competing with other licensed premises, especially following the Licensing (Scotland) Act 1976 which removed any advantage in opening hours. Most clubs probably open their bars only on training nights and after matches at weekends. In any case, clubs are rated far more highly per square foot per pound of turnover than are commercial licensed premises. Small wonder that the representatives of the licensed trade in Fife have expressed their support for derating. In England, where derating is common place, the clubs have an advantage when it comes to opening hours. In Northern Ireland, sports clubs are granted relief of 65 per cent. of the value of the property associated with the sporting element of the club, excluding the bar area. This might be a compromise for my hon. Friend to consider.
  I ask my hon. Friend to meet COSLA to secure agreement from the local authorities to exercise their discretionary powers for 50 per cent. derating of sports clubs, or 65 per cent. if they wish to follow the Northern Ireland example. I am led to believe that the cost will be about £2 million, but the cost of inaction will be very much higher and will be met by the youth of our country. Given good will and flexibility on my hon. Friend's part in considering the rate support grant, I am sure that an interim solution could be found.
  Mr. Roy Jenkins rose—
  Mr. Donald Dewar rose—
  Sir Hector Monro rose—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Earlier in this Parliament Mr. Speaker established that any Member who seeks to contribute to an Adjournment debate should have the consent of the Member who initiated the debate and that of the Minister who was to reply. Does the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) have the consent of the hon. Member for Stirling (Mr. Forsyth) and that of the Minister?
  Mr. Michael Forsyth indicated dissent.
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram)indicated dissent.
  Mr. Roy Jenkins: No, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Does the hon. Member for Glasgow, Garscadden (Mr. Dewar) have their consent?
  Mr. Dewar: I understand so, yes, but I shall pass, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Does the hon. Member for Dumfries (Sir H. Monro) have the consent of the hon. Member for Stirling and that of the Minister?
  Sir Hector Monro: Yes, I have, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Very well.
  12.17 am
  Sir Hector Monro: I am delighted to support the strong case that has been made by my hon. Friend the Member for Stirling (Mr. Forsyth), who has highlighted the major anomalies of clubs in Scotland, England and Wales. For over 20 years I have been pressing the case for mandatory derating of 50 per cent. in Scotland. There is derating in Northern Ireland and a voluntary system is frequently found to exist in England and Wales. I had great hopes that the Rating and Valuation (Amendment) (Scotland) Act 1984 would remove the anomalies, but they appear still to exist.
  My hon. Friend the Member for Stirling has referred to the enormous differences in rating between similar clubs in Scotland and England. We must accept that the hopes for the 1984 Act have not yet been realised, and I hope that tonight my hon. Friend the Under-Secretary of State will try to explain why they have not. Rugby, cricket, bowls, tennis and other sports clubs are now in a desperate plight and facing a real financial crisis.
  Where has the procedure failed? The assessors are entirely independent, but they must have guidance on the operation of the 1984 Act. Does the fault lie with the appeals procedure? Has anyone reached that procedure? Unless the Act is shown to work, our efforts in Committee —many Members on both sides of the Committee spoke in support of the intended change—will have been in vain and we shall all be very disappointed.
  Even though there is an allowance of 10 per cent. while a case is being considered for appeal, 90 per cent. of the demand must be paid, and much of that percentage will be overdue by now. In the time that is left to him, I hope that my hon. Friend can explain in detail how the clubs should proceed if they are to obtain any benefit from the Act. I hope that he will tell us what advice the Government have been able to give to the assessors and local government generally, with local appeal courts being run by local authorities. Have the land courts been given advice on how the legislation should work? It has not
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  worked yet and many of us are desperately concerned, as are those who represent sport and recreation. We know that sport and recreation do so much for Scotland and local authorities are absolved from providing the most excellent facilities that are presently provided by private enterprise.
  12.19 am
  Mr. Donald Dewar: First, I congratulate the hon. Member for Stirling (Mr. Forsyth) on raising this important topic, which commands concern in every part of the House. The fact that many of my colleagues are in their places to listen to the debate underlines that concern. There is a long history to the matter. I have always felt that section 19 of the 1984 Act was a doubtful ally for sports clubs in Scotland. In a letter to me of 22 April the Minister took a cautious line about the prospects for that legislative innovation. The Minister said that it was largely untried and made it clear that it was up to the courts to decide. He ended his letter on a hopeful note—I stress this—by saying:
  "If adjustments are shown to be needed further changes in the appeals system will be considered."
  It is clear that there is no likelihood of redress for a number of reasons, which I cannot go into in the brief time at my disposal, but I hope that the Minister will look carefully at any changes which might be necessary, because a solution must be found to some grotesque anomalies.
  I endorse the plea by the hon. Member for Stirling that negotiations be opened with COSLA about some form of immediate and short-term help, perhaps by using the discretionary powers open to local authorities for rating relief.
  I hope that the Minister will not think that I am being partisan when I say that it is essential that further Government support be given in this climate of financial stringency. Some accommodation will have to be made in the rate support grant, or in some other form of Government aid. I hope that the Minister will look generously on any approaches.
  The Opposition would offer the Government strong support if they tried to find a solution. The search for that solution should be pushed energetically, given the difficulties facing so many sports clubs at present.
  12.22 am
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I am grateful for the opportunity to respond to representations about the valuation and rating of sports clubs in Scotland. This is of considerable concern to my hon. Friend the Member for Stirling (Mr. Forsyth) and I congratulate him on securing this debate. I am aware from personal discussions and from the numerous letters which my right hon. and learned Friend the Secretary of State for Scotland has received that hon. Members on both sides of the House are worried about the rates burden on some sports clubs.
  It is important to remember that some of the smaller sports clubs, be they rugby, football, cricket, bowling, or whatever, have a significant social role to play in providing facilities which promote recreation in the communities which they serve. I wholeheartedly endorse that and applaud the efforts of the many ordinary club members who give voluntarily of their time, labour and money to help run amateur sports clubs. Their contribution to the well-being of local communities is not to be valued

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  lightly, and we in the Government have no wish to see these clubs hindered or prevented from functioning by an over-high burden of local taxation.
  The Government's practical concern for ratepayers has been shown, apart from the emergency measures that we took last year to introduce revaluation rebates, by our commitment in the Green Paper, "Paying for Local Government" to a better, simpler and fairer system of local government finance.
  The consultation period in which we invite responses to this Paper does not end until 31 July. I shall be particularly interested to see the comments which sports clubs submit. The fact that the present valuation and rating systems in Great Britain can lead to differences of the kind that my hon. Friend the Member for Stirling has highlighted today was one of the reasons why the Government have tackled the very difficult task of doing something about local taxation. I am confident that the Green Paper proposals will help sports clubs in Scotland, and we are moving as quickly as possible to bring them into effect. Although it may not be immediately apparent that the Green Paper addresses itself to the problems faced by sports clubs, it does address itself to the widespread complaints voiced by various groups of non-domestic ratepayers over recent months. In particular, the Scottish chapter of the paper explains that the Government see advantage in moving in time to a common non-domestic poundage in all areas and suggests that it may be desirable to harmonise valuation procedures to provide for a common standard, thereby meeting one of the sports clubs' complaints and the points raised by my hon. Friend tonight.
  Inevitably this will take some time to achieve, but in the interim the Government propose to control increases in existing non-domestic rates by linking them to some general index of price movements. This will protect all non-domestic ratepayers by removing control of their rate poundage from high-spending local authorities and offering a guarantee of stability in the scale of future rate demands upon them.
  I appreciate that there is a much more immediate problem. We are very concerned with the difficulties presently facing sports clubs. We are watching the situation closely and looking to see whether anything can be done. However, Government action would require primary legislation. Even were that possible, it would not provide an immediate solution. We must ask ourselves: what are the options available now?
  The problem of rates on sporting facilities has been with us for some time. Hon. Members will recall that, during the passage of the Local Government and Planning (Scotland) Act 1982, the question arose of extending mandatory rating relief to genuine voluntary organisations. That initiative led to a thorough review of the provisions pertaining to mandatory and discretionary rating relief, with particular reference to the position of local clubs which provide facilities for participation in recreational activities.
  Discussions took place at that time with bodies representative of sporting organisations, including the Scottish Sports Council. The review also involved the Convention of Scottish Local Authorities and a working party of Scottish Office and local authority officials. The conclusion, which was accepted by my right hon. and learned Friend's predecessor in office, was that the provisions for discretionary relief worked reasonably
  158
  satisfactorily and should not be altered. The decision was influenced by the advantages of leaving discretionary relief in the hands of local authorities, which are. after all, best qualified to administer it. Another strong argument against making the relief mandatory was the practical difficulty of turning a local discretion to favour some deserving clubs into a uniform obligation to relieve a whole class.
  It is as well to be clear that the present provisions for discretionary rates relief are just as wide today as they were when the review was concluded in 1983. Section 4(5)(c) of the Local Government (Financial Provisions, Etc.) (Scotland) Act 1962 enables Scottish rating authorities to reduce or even to remit in full rates in respect of
  "any lands and heritages occupied for the purpose of a club, society or other organisation not established or conducted for profit and which are wholly or mainly used for the purposes of recreation."
  In simple language, that allows each Scottish regional and islands council to remit part or all of the rates paid by non-profit-making recreational clubs in their area.
  Mr. Roy Jenkins rose—
  Mr. Ancram: The right hon. Gentleman knows that I normally give way to him, but the debate is constrained in terms of time, and I have a lot of ground to cover. I shall not give way.
  Rating authorities are already statutorily empowered to reduce or completely remit the rates payable by rugby, cricket, bowling, and other clubs. The authorities must simply satisfy themselves that the clubs are
  "not established or conducted for profit"
  and are
  "wholly or mainly used for the purposes of recreation."
  Each rating authority has total discretion as to how it applies the provision within its own area. It is hoped that the case for relief, which was so well made in the House tonight, and the good work done by local sports clubs, will be brought to the attention of rating authorities and that they will give the matter serious consideration.
  My hon. Friend the Member for Stirling asked whether I would be prepared to talk to COSLA. I should be happy to talk to COSLA about the way in which authorities are operating their discretionary powers to grant rate relief, and the matter could be placed on the agenda for the next round of regular meetings to be held in about a month's time.
  The Government consider it right that the rating authorities should retain the discretion to give this relief. The authorities are, after all. best placed to judge whether and how much relief should be given to individual clubs in their own areas. The legislation does not specifically disqualify from relief those clubs with licensed bars on their premises, although I understand that some rating authorities do not grant relief to such clubs.
  It may be that rating authorities also feel that, as some clubs derive considerable income from their bars, the statutory requirement that relief be available only to premises
  "wholly or mainly used for the purposes of recreation"
  should persuade them not to offer such clubs relief. Certainly, if this local discretion were to be replaced by a prescribed level of mandatory relief, I have no doubt that the class of recreation club to qualify for it would have to be more strictly defined. No doubt the possibility of seeming to promote unfair competition for the local

  159
  licensed trade would weigh heavily in hon. Members' minds. Also to be borne in mind in any considertion of changing from discretionary to mandatory rating relief is that any increase in the total amount of the relief is likely to increase other ratepayers' bills. Revenue lost through rating relief has, after all, to be made up in other ways.
  During the past year or so, sports clubs of various kinds have expressed anxiety about rates burdens. For example, Scottish senior football clubs, under the able leadership of the late Mr. Desmond White, chairman of Celtic football club, publicised the level of their rates bills and compared them with those of English league clubs. The Government had in the meantime acted to help by means of section 19 of the Rating and Valuation (Amendment) (Scotland) Act 1984, which enabled Scottish ratepayer valuation appeals to make comparisons with subjects in England if inadequate rental evidence for the type of subject in question existed in Scotland.
  Hon. Members who experienced the long and sometimes difficult passage of what is now the 1984 Act may remember that the main reason for section 19 was that a strong case had been made to the effect that premises valued other than by comparison with rental values were more harshly treated in Scotland than south of the border. My hon. Friend the Member for Stirling illustrated that again tonight. Ultimately, the relevance of section 19 to any appeal case must be for the appeals court to decide.
  Any complacency that I might have been tempted into has been overtaken by the representations made by other sporting bodies. Rugby clubs have been particularly and understandably vociferous recently, and I am sure that many hon. Members will have been impressed, as I was, by the representations made by the Kirkcaldy rugby football club and Glasgow Academicals club. I am sorry that I was unable to attend a meeting organised by the Kirkcaldy club's treasurer, Mr. Alex Kilgour, in March. I sent my regrets.
  There is one small note of caution that I should like to add about appeals which have yet to be heard. I understand that many of the sports clubs involved in representations
  160
  to my right hon. and learned Friend the Secretary of State or me, including Kirkcaldy RFC and Glasgow Academicals, have lodged appeals with the assessor against their rateable values. Clubs that have appealed will have an opportunity to argue their case fully before, in the first place, the local valuation appeal committee and, if they are still dissatisfied, the Lands Valuation Appeal Court.
  It is important to maintain the essential independence of the appeal system, and since appeals which have not yet been heard are in effect sub judice, it would not be proper for me to comment on particular cases. Some clubs which have appealed have told me that it might be some time before their appeals are heard. I have advised them, and I do so again tonight, to use, if necessary, a provision which was introduced in 1984 to accelerate appeal hearings — regulation 5(3) of the Valuation Appeal Committee Procedure (Scotland) Regulations 1984.
  The regulation enables an appellant to request the local appeal committee to hear his case within a specified period, which, for practical purposes, must be not less than 35 days from the date of the request. We expressly designed the regulation to help those who might suffer from a long delay. Until an appeal is determined, only 90 per cent. of rates are payable, but a rating authority is allowed to enter an agreement with a person bringing an appeal to pay less than 90 per cent., and appellant clubs under financial pressure might be advised to press their rating authority to exercise its discretion in that way.
  I hope that rating authorities, in their desire to promote the well-being of communities in their area, will welcome the opportunity which the discretion gives them to encourage the activities which amateur sports clubs provide.
  I welcome the debate because it has given us a chance to examine the position—
  The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-seven minutes to One o'clock.

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

Royal Wedding Stamp Issue
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is intended to issue a special stamp to mark the marriage of Prince Andrew and Miss Sarah Ferguson on 23rd July and, if so, whether they will, if necessary, recommend to the chairman of the Post Office that 12p stamps be included.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, special stamp issues are a matter for the Post Office, which has announced that it will be making a special stamp issue to celebrate the Royal Wedding. I understand that this will include a 12 pence stamp.
Baroness Burton of Coventry: My Lords, is the Minister aware that I left this Question on the Order Paper because, although I knew the answer, I wanted to have the opportunity of thanking the chairman of the Post Office for having done this? May I hope that the Government will also thank the chairman of the Post Office? I also express the hope that for other special issues 12 penny stamps will also be included.
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Baroness for the first part of her supplementary question and I shall certainly be pleased to pass her gratitude on to the chairman and the board of the Post Office. As regards the second part of her supplementary question, I have to confess that
2
I can offer no hope of 12 pence stamps being included in special issues, other than at Christmas, for the reasons which I have explained to your Lordships' House on a number of occasions.
Baroness Burton of Coventry: My Lords, is it not a pity that the Government cannot just be generous and thank the chairman of the Post Office for having done this?
Lord Lucas of Chilworth: My Lords, as I said originally, I shall convey the gratitude of the noble Baroness to the chairman and the board of the Post Office, adding to it, of course, the Government's thanks. On the second point, I can offer no hope because the Post Office board has indicated, as I have done to your Lordships' House, that there were problems associated with 12 pence stamp issues on other occasions.

US Nuclear Missiles, Molesworth: Control
2.38 p.m.
Lord Kennet: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will now make the proposed deployment of US nuclear missiles at Molesworth subject to physical dual control.
The Minister of State for Defence Support (Lord Trefgarne): No, my Lords. We are entirely satisfied with the effectiveness of existing arrangements.
Lord Kennet: My Lords, will not the Government at last take the opportunity presented by the arrival of the second contingent of United States cruise missiles at Molesworth to do the right thing? It is what an enormous majority of people have wanted all along and what was done by the Macmillan Government way back in the days of the Thors and Titans; namely, to have physical dual control as well as political dual control.
Lord Trefgarne: My Lords, there is no need to proceed as the noble Lord suggests because, as I have said on a number of occasions, the effect of present arrangements is that no nuclear weapon will ever be fired from British facilities without the agreement of the British Prime Minister.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that while he may believe what he has just said, no one else does? The problem is that recent events have shown that without operational control the government of this country have no influence over the matter at all. Will the Minister not take note of the arrival of the noble Lord, Lord Kennet, in this cause, which I have been pressing for so long? With such valuable additional help and having regard to recent events, will he not think again and ask his colleagues to reconsider the position? Does not the Minister agree that it is very important that this country should have control over missiles which are fired from its own soil?
Lord Trefgarne: My Lords, I reject the proposition that recent events have done other than wholly endorse the satisfactory arrangements now in place.
Lord Boston of Faversham: My Lords, can the Minister say whether there are any nuclear weapons in this country which are subject to physical dual control? If that is not the case, why not?
Lord Trefgarne: My Lords, as far as I know there are no nuclear weapons in this country subject to physical dual control. The answer as to why they are not is that the alternative existing arrangements are entirely satisfactory.

Chemical Weapons: Control
2.41 p.m.
Lord Kennet: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, if they agree to the stationing of US chemical weapons in this country in time of crisis or war, they will require physical dual control.
Lord Trefgarne: My Lords, any deployment of chemical weapons to the United Kingdom at any time would require the consent of Her Majesty's Government. If such a request were ever to be received, it would be a matter for decision by the British Government of the day, in the light of all the circumstances prevailing at the time.
Lord Kennet: My Lords, in view of the reported fact that the United States army is at present training its men in the use of binary chemical weapons of the kind which would be brought here in a crisis, and that it is also training its troops in chemical warfare with the use of real nerve gas—I repeat, real nerve gas—to give them confidence in their gas masks, will the Government take the opportunity to consider whether it might not be advantageous to proclaim now that if
4
and when such weapons are stationed here (and all sides of the House hope they will never have to be) they will be under dual key?
Lord Trefgarne: My Lords, the noble Lord said that such weapons would be brought here in a time of crisis. That would be a matter for the government of the day and I am afraid that I am not in a position to bind future governments or, for that matter, to bind the present Government in regard to what is a hypothetical situation.
Lord Molloy: My Lords, in so far as successive governments have set a supreme example by having nothing to do with chemical weapons, may I ask whether that is still the policy of Her Majesty's Government? In the event of another country wishing to station chemical weapons in this country for use elsewhere, would it not be right and proper that Parliament should immediately be informed in order to obtain its opinion on whether such an act should be embarked upon?
Lord Trefgarne: My Lords, the view of the Government on this matter has been reflected on a number of occasions and during a number of debates, notably in your Lordships' House. The essence of government policy is to ensure a worldwide ban on these weapons, and we are working to that end in Geneva.
Lord Boston of Faversham: My Lords, can the Minister say whether Her Majesty's Government are contemplating any agreement with the United States along the lines of the one reported to have been made between Chancellor Kohl of West Germany and the United States, which I understand to be that West Germany would be prepared to station binary weapons on its soil at a time of imminent crisis? Can the Minister say further whether the Prime Minister has given an undertaking to Chancellor Kohl along those lines, and if so how can that be squared with his statement of government policy on 3rd May last year that we are not contemplating resuming possession of these weapons?
Lord Trefgarne: My Lords, the policy of the British Government remains exactly as it was when I referred to this matter earlier in your Lordships' House.
Lord Kennet: My Lords, may I ask the Minister whether this would be a convenient opportunity to consult with the noble Lord, Lord Glenarthur, who is sitting beside him, on the question of binding future governments, in view of the generous way in which the noble Lord, Lord Glenarthur, on Friday last proclaimed an obligation on future governments to look after certain citizens of Hong Kong in the right way?
Lord Trefgarne: My Lords, if the noble Lord imagines that he will be a member of some future government and wants to accept Conservative Government policy in advance, I should be happy to agree with him.
Lord Boston of Faversham; My Lords, I hope that your Lordships will forgive me for returning to the Dispatch Box. However, does the answer given by the noble Lord to my last supplementary question mean that no such undertaking has been given by the Prime Minister or any member of the Government to Chancellor Kohl?
Lord Trefgarne: My Lords, I can confirm that we have received no request from the United States Government along the lines hypothecated by the noble Lord.
Lord Mayhew: My Lords, can the noble Lord tell us the terms of the agreement that I understand has been reached at NATO that these weapons will not be deployed in Europe?
Lord Trefgarne: My Lords, no, I do not believe that any such agreement has been reached in NATO. I understand that what has happened is that a draft force goal has been agreed to but that it has yet to be agreed by NATO defence Ministers.
Lord Rea: My Lords, can the noble Lord the Minister say what the Government's position will be at the meeting of the NATO defence Ministers later this week on whether or not a force goal should be agreed? Before it can permit the production of this new generation of chemical weapons, the United States Congress has to see that the force goal has been agreed by the NATO nations.
Lord Trefgarne: My Lords, we shall be supporting that defence goal.

Emergency Powers: Need for Legislation
2.45 p.m.
Lord Jenkins of Putney: 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 agreed with the United States Government that in emergency Her Majesty's Government will use powers known to the United States Government but not known to Parliament and whether these powers include the enforcement of military law, the conscription of labour and compulsory evacuation of homes.
Lord Trefgarne: My Lords, I refer the noble Lord to my Written Answer on 8th May when I told him that there have been no such agreements with the United States Government. The content and introduction of any emergency powers would be for consideration by the Government and Parliament of the day, having regard to all the circumstances at the time.
Lord Jenkins of Putney: My Lords, the noble Lord in his usual evasive manner says that there is no such agreement. However, is he aware that his colleague in another place has confirmed that there is such an arrangement and that an agreement is no less an
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agreement when it is called an arrangement? Is he also aware that his office has a copy of three draft emergency Bills? Is he further aware that the ground areas provided in those Bills have been discussed with the United States authorities? Is he still further aware that regulations to be issued under those three Bills have been drafted, though the Bills themselves have not been placed before Parliament? Finally, is he aware that under those Bills 15 detailed plans have been drafted, yet none of these has come before Parliament and none of them has been confirmed by Parliament? Does he know that such an arrangement, whether he calls it an agreement or not, is an absolute disgrace?
Lord Trefgarne: My Lords, the question on the Order Paper tabled by the noble Lord suggests that there has been some agreement with the United States Government to confer certain powers upon them under certain circumstances. I said then and I say now that there is no such agreement.
Lord Mellish: My Lords, is the Minister aware that in fact this Question is a lot of nonsense? Is he further aware that of course everybody knows that legislation has already been prepared in the event of an emergency arising and that it would be exactly the same as that which was produced when Winston Churchill was Prime Minister and supported by Ernest Bevin and Clem Attlee and others, when emergency powers were brought in to control manpower, and so on. That is what one expects any sensible government to do in a state of emergency. What is all this rubbish?
Lord Trefgarne: My Lords, the noble Lord is quite correct. Any responsible government will want to consider the appropriate powers that they ought to take in times of great tension, crisis or war.
Lord Kinnaird: My Lords, apart from the understanding that I thought we had in this House, that supplementary questions should be kept to one and not extend to two, three or four, can the Minister tell us how closely our debates and certain statements made in this House are read in Moscow?
Lord Trefgarne: My Lords, I was once told that the Hansard of your Lordships' House received careful scrutiny in the Kremlin; but how true that is I cannot say.
Lord Jenkins of Putney: My Lords, is the noble Lord the Minister aware that the noble Lord who has just spoken from this side of the House ought to be sitting on the other side of the House? Is he further aware that the agreements, though they are called arrangements, have been confirmed to be in existence by his colleague in another place and that it is entirely disgraceful that what his colleague calls an "arrangement" should be reached specifically with the United States forces without either House being informed of the matter?
Lord Trefgarne: My Lords, I can only assure the noble Lord again that there is no agreement or arrangement to confer the sort of powers that are referred to in the noble Lord's Question upon the United States Government or any other government.
Lord Mellish: My Lords, is the Minister aware that the only reason I made my intervention was because I have nothing but admiration and pride for a man like Ernest Bevin who did what he did at the beginning of the war because he was a great patriot? I am sure that somebody would follow him and do exactly the same if an emergency arose. I am proud to have known that man, which is something I cannot say of some people I know.
Lord Molloy: My Lords, in the situation that has been referred to by the noble Lord, Lord Mellish, Great Britain stood alone against the Nazi forces. There was no United States agreement to come to our aid or help us nor was there any other nation involved. Can the Minister please tell the House whether it would be necessary for the United States Congress to give approval if such a situation were to arise and their forces had the powers that are mentioned in the Question asked by my noble friend Lord Jenkins of Putney? Can the noble Lord tell us, or will he at least find out for us, whether the United States Congress would agree to such action by their military forces in another nation's land?
Lord Trefgarne: My Lords, experience leads me to suppose that to anticipate the views of the United States Congress, or for that matter the British Parliament, in a hypothetical situation would be unwise. But on the earlier part of the noble Lord's observation, I am happy to feel that in any future conflict (which I hope will not occur) we shall have the support of the United States and our NATO allies.

Business
The Earl of Swinton: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lady Young will, with the leave of the House, repeat a Statement that is being made in another place on South Africa.
It may be for the convenience of the House if I announce that the Committee stage of the Gas Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Second Readings of the Corneal Tissue Bill and the British Shipbuilders (Borrowing Powers) Bill will be taken.

Ullapool Harbour Order Confirmation Bill
Read a third time, and passed.

Armed Forces Bill
2.51 p.m.
Lord Trefgarne: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Trefgarne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clauses 1 to 3 agreed to.
Clause 4 [Elimination of distinctions between certain offences]:
On Question, Whether Clause 4 shall stand part of the Bill?
Lord Graham of Edmonton: Before we allow Clause 4 to stand part of the Bill I intend to raise with the Minister a matter of crucial significance for many outside the Chamber. As the Marshalled List shows, Amendment No. 1 stands in my name, but I have been advised that its terms do not fall within the proper rules of debate; in other words, it is out of order. Therefore it is not my intention to move it. But this Question provides me, and I believe many others, with the opportuniy to look, in essence, at the matters raised in that amendment.
Clause 4 is entitled:
"Elimination of distinctions between certain offences".
Subsection (2) states:
"In section 69 of each of the 1955 Acts and in section 39 of the 1957 Act (conduct or neglect to the prejudice of good order and military discipline), for the words 'of any conduct or neglect' there shall be substituted the words, 'whether by any act or omission or otherwise, of conduct' ".
Members of the Committee who follow these matters will be aware that for a number of years there has been concern or agitation over the question of Crown immunity. The ability of the Crown, by virtue of an Act, to plead that its servants are not to be held liable for damage, injury or death to servicemen in peacetime needs to be reviewed. When speaking to this matter I am sure that the Minister will give us his advice on the current position of such a review.
I simply want to tell the noble Lord that there is widespread support for the provisions in the clause but that many would wish that it went beyond them. The Committee will be aware that in another place there has been steadily mounting concern on an all-party basis. Those who volunteer—because we have an all-volunteer service and there are no conscripts—are often placed in intolerable and indeed tragic circumstances by virtue of the present state of the law.
I have here—and the Minister and his advisers will be well aware of it—an Early Day Motion put down in another place. We all recognise that that procedure is simply a device or a peg on which to hang an opinion. The history and subsequent effect are limited. But the Minister will be aware that more than 130 Members of another place put down their names to Early Day Motion 450, which says that the current state of the law in respect of compensation for acts committed against servicemen needs to be reviewed. That refers to Section 10 of the Crown Proceedings Act 1947, as does my amendment.
This is not a party matter. I took the trouble to look through the list of those who put their names to the Motion asking for a change in the law and in the compensation. Thirty-seven members of the noble Lord's party are satisfied that a change needs to be made. The long list includes ex-Cabinet Ministers who have lent their names to the Motion, new Members, and a great many knights who are long-serving Members who have followed such matters for a long time. It also includes many members of the SDP and the Liberal Party, and a great many from my side.

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No one in this House can be satisfied with the present position. Since at least 1983 the Minister and his colleagues have said that the compensation for servicemen who suffer injury and for the parents or other next of kin in the case of death requires review. I am satisfied that he will present to us the result of that review as early as possible. In the meantime we have to live with some very distressing facts.
The subject was given a good airing in an Adjournment Debate by my right honourable friend Jack Ashley. It was supported by others. I know also that the Minister was present earlier this year at a meeting that was held on an all-party basis. The honourable Member Ian Grist was also there and he has expressed the strong view that if the matter came to the Floor of the Commons there would be wide support for it.
3 p.m.
What is it that I am asking the Minister to express sympathy with? The position is encapsulated in an extract from an Adjournment Debate that took place on 26th March 1985, when Mr. Jack Ashley asked the other place to listen carefully to a letter that he had received from a lady. The extract reads:
"'Jonathan is dead. He sustained 60 per cent. burns when a Seacat missile was fired by mistake. He was our son. He was just eighteen years old and he died before we could reach him. Steven was seventeen years old. He was thrown from an R.A.F. truck, or was he? No-one seems to know for certain. He was irreparably brain damaged anyway, and died within a few hours. Kevin took rather longer about it. When he was found floating face downwards in a vat of lethal cleaning fluid he was seventeen years old. When he finally died he was twenty one years old and he weighed less than four stone.
There is nothing you can do for Jonathan or Steven or Kevin, but you can help those who have been injured. You can also help to ensure that greater care is taken in the training of all young servicemen'."—[0fficial Report, Commons, 26/3/85; col. 238.]
The noble Lord the Minister and his advisers, who keep closely in touch with such matters, will be well aware of a Yorkshire television programme "In the line of duty" in which those cases and others were given prominence. I do not want to anticipate the final report of the Minister, but I wish him to take on board the injustice felt at the differences in the rights and responsibilities of civilians and the rights and responsibilities of those who serve in the armed forces.
I appreciate that there are differences, but we are talking about 17 and 18 year-olds. I recognise that they have a contract and that the services pay a great deal of attention to this matter. I wonder how much attention is paid to the fact that when a tragedy of the kind that I have outlined takes place the ability of servicemen to have recourse to the law is limited. I am sure that the noble Lord the Minister will tell us that there are other ways in which a distressed and aggrieved serviceman and his family can obtain redress. When the 1947 Act was put on the statute book questions were asked about what the servicemen would get for giving up their right to sue. There are lump payments and pensions. I have seen correspondence that the noble Lord has had with Members of another place in which he fairly points out that some of the figures that I have given are not the totality of the support which such people receive. I am not making a political point.
I hope that the Committee will allow me to quote what Mr. Anthony Lester, QC, an eminent man who is respected in these matters, said in that television programme.
The Countess of Mar: I am sorry to interrupt the noble Lord, but I thought we were debating whether Clause 4 should stand part of the Bill. What he is speaking about seems to bear no relevance to the elimination of distinctions between certain offences. It sounds as though he is talking about compensation. There is nothing in the Bill that covers compensation. Could he please elucidate?
Lord Graham of Edmonton: I do not know whether the noble Countess was here when I first rose to my feet, when I said that it was my intention to deal head on with that issue in Amendment No. 1. However, the amendment that I have tabled is due to follow the debate on Clause 4, which substitutes the words:
"whether by any act or omission or otherwise, of conduct".
The cases that I am using to illustrate my point can be argued to be due to the "act or omission or otherwise" in the conduct of members of the armed services. In those circumstances, should we not use this opportunity to hear from the noble Lord the Minister where we are in respect of the review of the rights of servicemen to take the Crown to court? I should be grateful if the Committee will bear with me over a matter which deeply concerns not merely the limited number of cases that have been drawn to my attention but to many others.
In the television programme to which I have referred Anthony Lester said:
"You find a man involved in a motor accident in Germany, to take an example I know well, a man of 50 with a very promising career in the RAF, in hospital for five months, seriously disabled, but not so seriously that he has to be retired from the air force. As a result, he gets no pension of any kind because he hasn't yet retired, and not a penny for him or his dependants. Another example: a man goes into an RAF hospital, really in civilian conditions—we are not talking about field stations or the front line in wartime, an operation which goes wrong. He says it is the fault of the surgeon. He may be right, he may be wrong. Now, if it happens to you or to me we could sue for negligence and expect to get damages if we could prove our case, but that man is receiving a pension worth about 60 per cent. of the total he could possibly recover and he and his wife are in quite terrible circumstances without any funds at all."
We are rewording the provision which relates to members of the services who are covered by the Armed Forces Bill and which the Committee is asked to approve today. We are asked to agree to a form of words which will include:
"whether by any act or omission or otherwise, of conduct."
I should be grateful if the noble Lord the Minister recognises that this is a valid opportunity to deal with that matter.
I think the noble Lord is also aware of other Early Day Motions. Early Day Motion 212 relates to compensation for service personnel at nuclear tests. That is a matter of current debate. It will be seen, when these matters are considered fully, that there are some members of the armed forces who carry some responsibility in these matters. The provision I am talking to is:
"whether by any act or omission or otherwise, of conduct."

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Many aggrieved ex-servicemen will feel they are entitled to pursue their interests in these matters in another way.
I hope that the noble Lord and the Committee appreciate that we are talking about a Government statement which says that wherever possible they wish members of the armed forces to have equality with the civilian population. The civilian courts have taken on many new responsibilities. Later, we shall be asking the Committee to approve a similar reform of courts martial. We are asking whether the noble Lord the Minister has anything helpful to say at this stage to people outside your Lordships' House. The noble Lord knows, and the Committee will appreciate, that much more can be said about individual cases, but I believe that I have said sufficient to allow the noble Lord to be helpful to the Committee.
Lord Denning: May I say a word about this matter? I am doubtful whether it is legitimate in this debate to bring in this subject for discussion. Perhaps, as I have had some experience of the Crown Proceedings Act 1947, and knew the situation before, I may tell your Lordships what the position was. Before 1947 there was a maxim in the law which said, "The Crown can do no wrong". As a result, if a government lorry careered down a street and knocked down a bystander, that bystander could not sue the Crown or the government department in tort for damages.
We got round it a little in a particular case. Soon after the war a mine exploded on the sea shore near Criccieth. Those injured wanted to sue the government department. The House of Lords had to say that the Crown could do no wrong and that there could be no remedy. To remedy that we had in 1947 the Crown Proceedings Act that made it lawful for any citizen who was injured by the negligence of a government department or its servants on the road or anywhere else to sue for damages the same as anyone else. The government department was just as liable as any other concern.
There was, however, in Section 10 an exception to the new law—an exception that related to the forces of the Crown. If there was an accident in the training field—say, for instance, that a vehicle ran over a man and injured him, or a mine exploded by accident—Section 10 stated that the individual who was injured had no right of action for damages provided that the Minister certified that it was attributable to his service. If it was attributable to his service, he was treated just as any man injured in the war or suffering from a disease due to the war who, under the Royal warrant, received his pension. I was the nominated judge for the war pension appeals in all their numerous numbers in 1945 and 1946. I heard the appeals of our soldiers injured and wounded in the war and the appeals of those who were sick. The Ministry of Pensions did the job very well. Its awards were given. Some appeals came to me. The relatives of those killed in the war and those who were injured were well treated.
What is the position being raised today? It is said that pensions under the Royal warrant are to go. Those men have to sue and to prove negligence. They have to face a claim against them for contributory negligence,
12
and unless they prove negligence by, say, a driver, they get nothing. This will be like ordinary civil litigation where a man injured in any way has to prove negligence. He can be met by cross-claims that he has not proved negligence or that he has been guilty of contributory negligence. Those experiences are very harmful to society. The important report of the Royal Commission of Lord Pearson and his colleagues recommended that instead of all this litigation for compensation it would be much better to do away with the litigation and controversies about negligence and have a pension or weekly award. In the experience of the Royal Commission and many lawyers it is far better that the injured person should have a good pension than a lump sum that may do him no good at all. That is the issue. The question is whether the Royal warrant procedure should go, whether the pension procedures for those who are injured should go, or whether all the pensions, where there is no need to prove negligence, should be taken away and the injured person left to go to a court of law.
I have tried to show that this is a wide question and really not fit for determination at the Committee stage of a Bill such as that now before us. It is an issue that requires long and reasoned debate by Parliament before a decision can be reached.
3.15 p.m.
Baroness Turner of Camden: I rise to support the comments made by my noble friend on the matter of Crown immunity. There is a strong case for repeal of a provision that has, I understand, existed since 1947 and that provides for total immunity to any legal action or claim for damages where negligence has resulted in serious injury or death of a member of the armed services. I understand very well the reasons why my noble friend's amendment has been ruled out of order as not apposite to the Bill. I should, however, like to hear the views of the Minister on what has been said.
There has been substantial agitation for a change in the law on the issue of Crown immunity. I have been supplied with instances, as has my noble friend, Lord Graham. I should like to refer to one, because it relates to the compensation aspect. It is the case of a young man called Martin Ketterick, was was descending a cliff as part of his training when the instructor cut through the supporting rope. He fell onto his back and is now completely paralysed. It is a case that, had it occurred in civilian life, could conceivably have attracted damages if there has been a case at common law. What happened in the case of Martin Ketterick, however, is that he was invalided out of the Marines with a gratuity of £3,553 and an invalidity pension of £47 a week. It is estimated that pensions paid in this way in total over a lifetime are approximately one-third of the awards that could be claimed if such a case was successful in the courts and if a lump sum was paid.
It is not only young people injured while taking part in a training programme in the armed forces who have got into this situation. As the Committee knows, I am a trade union official. Our union has been approached from time to time for assistance by union members who believe that they are currently suffering physical damage as a result of their experiences while working

13
in jobs attached to HM forces. The most notable example concerns individuals who were involved in the atom bomb tests in the Pacific back in the 1950s. A number of these people believe strongly that they suffered radiation damage. They have appealed for suport to the union of which they are now members. I have to tell your Lordships' Committee, however, that it has proved impossible to get these cases off the ground at all because of the doctrine of Crown immunity. Had these individuals been damaged in this way while in normal civilian employment, they would almost certainly have been able to sue at common law and almost certainly would have been able to look forward, I believe, to substantial damages.
At least it should be possible to amend the law to cover those not on combatant duties. It is surely unacceptable that where serious injuries are sustained the families and the individuals concerned should have no compensation of a kind that they might expect had they been injured in civilian life.
I realise that this is not an appropriate point for an amendment to the Bill. I understand the reasons for that. I would, however, join my noble friend in asking the Minister to look at the situation. It is being looked at in another place. I know that there is agitation going on about the whole issue of Crown immunity. I would therefore be grateful for a response by the Minister.
Lord Campbell of Alloway: I hope that the Committee will allow a brief word of total and unqualified support for the advice that the noble and learned Lord, Lord Denning, has given from his experience. It would be wrong to depart from the warrant procedure that works reasonably well. There may be hard cases here and there, but in general it works well and works fairly. To expose applicants to a negligence action has serious disadvantages. At all events this is a matter of very important principle which warrants, as the noble and learned Lord has said, far deeper and more leisurely discussion than could ever be afforded in this Chamber.
Lord Mayhew: May I begin by apologising to the noble Lord, Lord Graham, for not being present during the opening sentences of his speech. I gather that there was some procedural difficulty. Whether, had I heard it, I should have understood it, I do not know. However, it seems to be in order to discuss Amendment No. 1, whatever the ruling may have been.
I should like to say how impressed I have been—and think my noble friends would agree with me—with the case made out by the noble Lord, Lord Graham, and by the noble and learned Lord, Lord Denning. It seems that the substance of this question is simply not capable of being contested. I am not at all surprised to have heard from the noble Lord, Lord Graham, of the very wide all-party support for the point of view that he put forward. Equally, however, it is clear that this is a huge subject of enormous importance. It is my guess that the Minister will say that there is a departmental inquiry. Perhaps we should study very carefully the report of the Ministry of Defence on this question before reaching a decision—whether it is in or out of order at the Committee stage of this Bill.
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I note that at the Select Committee the Labour speakers did not go so far as the amendment of the noble Lord; Lord Graham. The recommendation of the Labour Party at the Select Committee was that:
"as a matter of urgency, the Department should expedite its inquiries and that its report be published before the end of this Session of Parliament with a view to introducing any necessary amending legislation to Section 10 of the Crown Proceedings Act in the next Session of Parliament".
This seems to me a good line to take. I feel this more strongly having listened to the debate. I believe that this would correspond with the views of my noble friends. After all, the present situation was accepted by successive governments for a long period of time. It seems to me that we should consider this extremely carefully and address ourselves to it as soon as the Ministry of Defence reports. That does not mean that the ministry should not expedite its report. Perhaps the Minister will state when the report is due and whether it will be published. In the light of that, perhaps we can take a later decision.
Lord Trefgarne: It is perhaps a pity that the noble Lord, Lord Mayhew, was not in his place when this debate started because he would then have learned that the noble and learned Lord, Lord Denning, did not for a moment agree with the noble Lord, Lord Graham. Indeed, the noble and learned Lord was right to point to some of the difficulties and complexities of this matter.
It is not a simple and straightforward matter for one moment, as I myself have been made aware during the course of the inquiry that is now under way. I am not the chairman of the inquiry but I am the Minister responsible for these matters within the Ministry of Defence. In the first instance the inquiry will report to me and then to my right honourable friends. This inquiry is a comprehensive one. It has been under way for a little while and will certainly be completed just as soon as possible, and an announcement will then be made.
I am very sorry that it is not possible for me to go further this afternoon. I well understand the wide range of views that have been expressed on this matter. They are views which have come from both ends of the political spectrum and from a wide range of opinion outside Parliament as well. The Government are certainly taking all these views into account, and when we have the benefit of the study to which I have referred—which we hope to complete just as soon as possible—then an announcement will be made. I am afraid that I cannot be specific as to when that will be, but we well understand the anxiety which people feel in this matter.
Having said that, I believe that everyone would agree that we should not speed up the inquiry to the extent that we get an inadequate or wrong answer. I am sorry that I cannot be precise as to when the inquiry will be completed or when we shall be able to make an announcement following that inquiry, but I shall certainly undertake that we shall do both as soon as possible.
Lord Shepherd: May I ask the noble Lord whether it would be the intention of the Government to publish, shall I say, the results of the inquiry, so that

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we can have a better understanding of the difficulties to which, clearly, the noble and learned Lord, Lord Denning, referred? There is a deep sense of anxiety and injustice that is felt by many others. I think that your Lordships would benefit more from seeing a report on the matter than from merely a statement by the Government.
Lord Trefgarne: If I may be allowed to answer the noble Lord on that point, the study that is going on and the documents which will flow from it will be in the nature of advice to Ministers. As the noble Lord will appreciate, advice to Ministers is not normally published. However, having said that, we shall certainly want to give as much information as possible about our decision when we reach it, and the basis upon which we reach that decision. I do not think the noble Lord will have any cause for complaint about the quantity of information we shall make available at that time.
Lord Elwyn-Jones: Can the noble Lord give some approximate idea when this is likely to be? I appreciate the difficulties. It covers a very wide field. Is it contemplated that there shall be a Green or White Paper beforehand, or a decision to legislate? How does the noble Lord see the future of this matter? It obviously is of very considerable public concern. I note the hope that was expressed by my noble friend Lord Shepherd that there would be the publication of an informed paper, or whatever it may be, on this matter. It raises many wide issues.
Can the Minister and his colleagues think again about this? I know that there is a way of using Green Papers as a delaying stratagem. I make no admissions, of course, about any previous administration, but it has been known to happen. However, time is of importance in this matter. These sad cases are happening, and injustices are being brought about. I therefore ask two questions. First, when is it likely that there will be a conclusion? Secondly, can there not be some public information given beforehand by the Government?
Lord Trefgarne: Such information as I have so far on this matter leads me to understand that this is a much more complicated matter than we had at first imagined. When it comes to announcing some conclusion—and I am afraid that I cannot be specific on when that will be—I think the conclusion will be fairly straightforward. It will be either to abolish the present arrangements, to repeal the present protection that the Ministry of Defence and the armed forces enjoy in this matter, or to leave matters more or less where they are. Although there are a number of compromise possibilities that have been canvassed, they, too, present enormous complexities and difficulties. For that reason, they are not particularly attractive.
Added to that, we have to offset whatever new arrangements we might wish to set in place with the benefit of the existing arrangements. I think that the noble and learned Lord, Lord Denning, underlined those very effectively when he pointed out that under the present arrangements members of the armed
16
forces, sadly injured, do not have to prove negligence and do not have to go to court at all to get the benefit of the payments we make in terms both of bounty and of future pensions.
There are those who say that the present arrangements are as attractive as they should be and that any future arrangements, given the uncertainties that they would inevitably involve, would be a good deal less beneficial to those sadly injured in these circumstances. These are the types of complexity that we are having to consider and to juggle with. I hope that noble Lords will therefore bear with me if I say that it is not possible for me to be specific now. It is a matter which is addressing Ministers' minds on regular occasions.
One noble Lord mentioned that an important delegation attended on my right honourable friend the Secretary of State for Defence not long ago. I was there on that occasion and listened very carefully to the views that were expressed.
3.30 p.m.
Lord Graham of Edmonton: Because this is the Committee stage I am entitled to make a few more observations. I am grateful to the Minister, and for the forbearance and tolerance of the Chamber, which recognises that this is a very important matter. The Minister provides us with the reason why we should not let this opportunity go by. He talks in terms of reporting "just as soon as possible", but that kind of language—this is not meant to be offensive—has been used frequently over the past period.
There are people outside who are not looking at this as academically as we are, even though our hearts may be full. They are the people who are suffering, or whose families are suffering, or whose parents are bereaved and bereft. I make no apologies to the Committee and nor, I believe, does the Committee expect me to make an apology for using this opportunity. The last thing I seek is for the Committee to come to a conclusion, but the mere fact that we have stirred the issue I think will mean that the next time it does come forward we shall at least be a little better prepared.
I have to say to the noble and learned Lord, Lord Denning, that he seemed to me to present the argument as one of either pension or the opportunity to sue. You cannot have it both ways. There are people who are employed in the public service who do have it both ways. The police and the firemen are able to get a pension and still have the right to sue the Crown. If I am wrong, of course I shall be put right. The noble and learned Lord, Lord Denning, may do it now or later and so may anyone else, but the records which I have read in preparation for this debate have told me that what is happening is that there are members of the public services—not the armed services, but those that you and I would say are at least as entitled to protection because they take risks on our behalf—and the police and the firemen have been quoted to me. What we are saying is that what is good enough for the police and the firemen ought to be good enough for members of the armed forces who take risks who actually engage in the exercises which they do which are as lifelike as possible, and who then find they are in some difficulty.

17
Let me tell the Committee of my own personal experience, not during peacetime but in wartime. Mr. Ketterick was mentioned in the case described by my noble friend Lady Turner. That gentleman was in the Royal Marines and so was I. During the war in the Royal Marines in the pursuit of making myself ready for armed conflict I went through what was called a live ammunition exercise in Wales, at the foot of Llanberis. During the course of that live ammunition exercise I received Bren gun bullets through my back and my legs. I did not have any right to compensation and nor did I expect to because it occurred under conditions of war, but if the same thing had happened in peacetime I should certainly say to a serviceman who, through no fault of his own and perhaps by the negligence of his fellows, was injured, perhaps by virtue of this clause and due to the negligence of some people in the armed forces, that he would be entitled to take to court the fact that his circumstance was due to an error in carrying out proper safeguards and precautions, etc.
What in fact we are saying to the Minister (and there are many people outside) is that that in fact is what we want. May I remind the Minister also that in the Early Day Motion the names are Mr. Jack Ashley, Sir David Price, Mr. Paddy Ashdown, Mr. Roy Mason, Mr. John Hannam and Mr. Gordon Oakes? Members of the Committee who follow these things know that that is as all-party a body as one can get. The other names are the same, but what is important is that the Motion they want concerns those engaged in non-combatant duties and they want to make retrospective provision for the date of passing of the Act. This is what we are saying. We are concerned not only about the future but also about the terrible and tragic cases coming to our attention.
However, I am satisfied that the Minister has gone as far as he can. I very much hope that he will not simply say that he and his colleagues are watching this and are looking at it. I do appreciate the complexities. The Minister is quite right and no solution is likely to find universal favour. There will be some saying that this does not take account of their circumstances and some saying that they are entitled to that, but all I am saying is that the present position is wrong and Clause 4 allows us an opportunity to raise the matter. Certainly it would not be my intention to do other than to allow Clause 4 to stand part of the Bill.
Clause 4 agreed to.
Viscount Long: My Lords, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.

South Africa
3.35 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, with the leave of the House I shall now repeat a Statement on the South African incursions into Botswana, Zambia and Zimbabwe which is being made in another place by my honourable friend the Secretary of State, Sir Geoffrey Howe. The Statement is as follows:
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"As the House knows, a number of locations in Botswana, Zambia and Zimbabwe were attacked early this morning. The South African Defence Forces have acknowledged that they were responsible for these attacks, full details of which are not yet available.
"My honourable friend the Member for Wallasey has already summoned the South African Chargé to ask for an urgent explanation. She expressed to him our grave concern. Our Ambassador in South Africa has been instructed to seek an early call on the South African Foreign Minister.
"Our High Commissioners in Gabarone, Lusaka and Harare have been instructed to convey to their host governments the British Government's concern at these attacks, and to seek further details about them, including any indication of casualties
"We have always made plain our opposition to cross-border violence and have consistently condemned the resort to force by South Africa against her neighbours. Today's attacks by the South African Defence Forces represent a plain violation of the sovereignty of three fellow Commonwealth countries. It is particularly deplorable that they should have taken place while the Commonwealth Group of Eminent Persons were in South Africa, seeking to promote a process of dialogue which would lead to the ending of apartheid in the context of a suspension of violence on all sides. Today's events underline the urgent need for just such a suspension of violence."
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Baroness for repeating the Statement. We note and support the action taken by Her Majesty's Government in conveying their grave concern to the South African Government and in their sympathetic gesture to the affected governments. I should like to ask the noble Baroness two short questions. She referred to the Group of Eminent Persons. Would she not agree that this deplorable action could undermind the efforts of the group and that President Kaunda is right when he said today that these raids by South Africa could well be the object of the exercise? Secondly, could she give an assurance that these criminal acts of violence will be borne in mind when Her Majesty's Government discuss what further action is to be taken in concert with other Commonwealth governments when the six months from the date of the Nassau conference expires next month?
Lord Kennet: My Lords, we entirely endorse what has been said by the Leader of the Labour Opposition. The reaction of the Government to these raids is obviously absolutely right. They have asked for an urgent explanation, expressed grave concern, expressed opposition to the cross-border violence, which is the correct general point, and have called it a plain violation of sovereignty.
The South African Government of course carried out these raids because they thought that the premises they intended to strike were being used for terrorist actions inside South Africa. Whether that is right or not we cannot tell, but it is only six weeks since

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another government carried out armed raids on premises in the capital city of a foreign country and they did so from bases in this country. They were not subject to protest or reproof. The American ambassador was not sent for. When will the Government overhaul their double standard in this matter, because they are becoming a laughingstock around the world?
Baroness Young: My Lords, I should like to thank the noble Lord, Lord Cledwyn, for the way in which he has received this very serious Statement, and to thank the noble Lord, Lord Kennet, for what he said on the British Government's reaction to this matter. The noble Lord, Lord Cledwyn, raised two questions in particular. As regards the Group of Eminent Persons, they are of course a group of eminent individuals operating independently, so it will be for them to decide how these raids affect their mission. However, as I have made clear, the fact of the raids underlines the importance and urgency of working for a peaceful settlement in South Africa.
On the noble Lord's second point about any action that might be taken in addition to the measures that were introduced after the Commonwealth Heads of Government meeting in Nassau last October, following upon that we are of course not committed to any further acts at all. I have no doubt, however, that the raid will have been noted and will be considered.
I cannot accept the point that the noble Lord, Lord Kennet, made about double standards by the Government or indeed in the activities of the United States. Libya was a case on its own. There was the plainest possible evidence that a government was promoting and defending terrorist attacks on innocent targets. There is no evidence that violence by the ANC in South Africa is sanctioned, still less directed, by the authorities in Botswana, Zambia or Zimbabwe. Indeed, Botswana has close contacts, which are still continuing, with the South Africans on joint control of terrorism. Therefore, there is no comparison at all.
Lord Bottomley: My Lords, have the Government considered consulting other members of the Commonwealth and making a joint protest to the South Africa Government?
Baroness Young: My Lords, this point has not been considered, but I note what the noble Lord, Lord Bottomley, says.
Baroness Jeger: My Lords, in view of the Statement, which we on this side much appreciate, may we take it that if the three countries concerned take this matter to the Security Council, Her Majesty's Government will support them? Secondly, does the noble Baroness, the Minister, recall that just after the last raid on Gabarone there was a mission from the Commonwealth Parliamentary Association, of which I happen to be a member? When I asked to see the wounded terrorists in Princess Marina Hospital in Gabarone, I found there a little girl who was five years' old and who had a hip so injured that the doctors think that she will never walk again. I found her in a state of total shock because she had witnessed her little brother and grandfather being killed; her grandmother was
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wounded and in the same hospital. That was the total bag of the terrorists.
When the noble Baroness is having discussions with South African representatives, will she emphasise to them that when they attack built-up areas of cities, like Gabarone, it is impossible to avoid killing and injuring innocent men, women and children? Not only is this morally outrageous, but it is totally counterproductive from their point of view. Not only does it alienate all civilised people, but it means that any remnants of moderate black opinion in Southern Africa are completely destroyed.
3.45 p.m.
Baroness Young: Yes, my Lords. I am quite sure that the point which the noble Baroness, Lady Jeger, makes about the sufferings of people as a consequence of these raids is very true, and as she said as a member of a CPA delegation in Gabarone she will have witnessed it herself. It is for those reasons, as well as the political reasons, that the Statement is couched in the very firm language that it is.
On the first point that the noble Baroness made about Security Council resolutions, she will be aware of course that raids in earlier years by the South African Government into neighbouring territories have been the subject of Security Council resolutions, and that the British Government have of course condemned these raids.
Lord Boyd-Carpenter: My Lords, will my noble friend confirm that it does South Africa's neighbours no service to equate them with Libya?
Baroness Young: Yes, my Lords, I am glad to confirm that and to make yet again the point that there is no comparison in these two cases.
Lord Hatch of Lusby: My Lords, is the noble Baroness aware that I have had long contact with each of the three areas—not just the countries—that have been bombed during the past few hours? Is the noble Baroness aware that the Statement she has made will sound very mealy-mouthed to the people who have now been suffering for years from this kind of naked aggression? It is not an incursion, which is the word used in the Statement. Is it not an insufficient word to state that Her Majesty's Government are "concerned" about these raids? Do they not utterly condemn them?
Perhaps I may ask the noble Baroness whether she is able to answer two straight questions. First, does she not agree that this naked aggression should be met by Her Majesty's Government using their influence as a member of the Commonwealth to call an immediate meeting of Commonwealth representatives to consider calling off immediately the activities of the Group of Eminent Persons? Secondly, can Her Majesty's Government tell the House today what military assistance has been offered to the three Commonwealth countries that have been attacked by a foreign power? Finally, agreeing with the noble Lord, Lord Kennet, who never suggested that the three Commonwealth countries could be equated with Libya, is this not an example, not of state-supported terrorism, but of state-responsible terrorism?
Baroness Young: My Lords, I cannot accept that this is a weak Statement. As the noble Lord will see when he has the opportunity to read it in full in the record, the Statement in fact says:
"We have always made plain our opposition to cross-border violence and have consistently condemned the resort to force by South Africa against her neighours".
That seems to me to set out very plainly our position.
As regards the Commonwealth, as I have already explained to the noble Lord, Lord Cledwyn, the Group of Eminent Persons is acting independently and it would not be for the Government to instruct them. We accept that it is their strength that they are acting independently, and in the light of today's events, it will be for them to take a decision as to what they might or might not do. So far as military assistance is concerned, we have not been approached by any of the three countries involved for military assistance.
Lord Gridley: My Lords, can my noble friend the Minister say whether there has yet been time to receive a report from the High Commissioner at Harare about these events? In all the circumstances, would it not be better to treat this very serious question in a conciliatory, temperate and quiet manner for the time being?
Baroness Young: Yes, my Lords, my noble friend is quite right; we have not yet received the detailed information from any of our High Commissioners in the three countries involved. Nor indeed have we heard from our Ambassador in Pretoria. No doubt when we have the full information we shall be in a better position to assess what actually has happened.
Lord Pagel of Northampton: My Lords, regarding the Group of Eminent Persons from the Commonwealth, have they not already received the advice of Mr. Botha to mind their own business? Secondly, is there any doubt that when a country—whether it be Libya or anybody else—entertains terrorists for the purpose of chivying their neighbours, the neighbours are perfectly entitled under international law to take the action which South Africa very properly took today?
Baroness Young: My Lords, on the first question that the noble Lord, Lord Paget, asked, the Group of Eminent Persons has, we believe, had opportunities to talk to a great many people in South Africa, including members of the South African Government, as we believe this to be a valuable exercise. So far as his second point is concerned, may I make it clear that we oppose violence in South Africa wherever it may come from, but we cannot condone the attacks by South Africa on three sovereign states.
Viscount Mountgarret: My Lords, may I ask my noble friend whether Her Majesty's Government will, when considering their feelings and attitudes to South Africa, bear in mind the fact that South Africa was, is, and I hope will be, a staunch ally of the Western alliance? Will my noble friend remember the part that South Africa played under the leadership of General Smuts, that wonderful man, and not ignore the assistance that has been given by South Africa in the past to this country?
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Will the Government also bear in mind that there are many countries at the moment in the world which perpetrate other acts which offend human principles; not least one may say the rape of Afghanistan by the Russians? If everything can be borne in principle and in balance, perhaps we might not be carried away too much by emotive issues on certain things which South Africa, for various reasons of their own, may feel they have to do although they may offend some principles of your Lordships' House.
Baroness Young: My Lords, I take the point that my noble friend makes about the past history of South Africa. We are, however, in the situation in which these acts of aggression have in fact been committed by the South African Government, and I would only say to him, out of consistency, that we have completely condemned the Russian invasion of Afghanistan, as of course we deplore the Israeli raid on Tunis, and our attitudes have been consistent in this regard.
Lord Hatch of Lusby: My Lords, can the noble Baroness clear up a couple of points in her answer to me? First, is it not the case that it was the Commonwealth Heads of Government Conference which appointed the Eminent Persons Group? Would it not now be quite consistent for the Comonwealth representatives to meet immediately in this crisis in order to suggest that that group can no longer perform its task, and that if it continues, it would appear to be following Her Majesty's Government's line of appeasement of South Africa? Secondly, while I hear the noble Baroness say that Her Majesty's Government have received no requests for military assistance, what I asked was whether Her Majesty's Government have offered any military assistance to three Commonwealth Governments being attacked by a foreign power?
Baroness Young: My Lords, the idea of a Group of Eminent Persons was one of the results of the Commonwealth Heads of Government meeting, but of course the fact that it was set up, the fact that those in it act as individuals operating independently, means that it is for them to decide what attitude they will take in the light of the raids today. The answer to the noble Lord's second point is that we have not been approached for military assistance, but, as I am sure the noble Lord will be aware, Botswana is one of several African countries which benefit from British training schemes for their armed forces.
Lord Paget of Northampton: My Lords, surely there should be some evenness in all this? We object to American delegations going over to interview the IRA and then telling us how to govern our territories. Are not the South Africans in exactly the same position with this alleged Commonwealth group? Secondly, how on earth do we distinguish America's action against terrorists in Libya, with which we collaborated, from the South Africans' action against terrorists in Southern Africa? Both were sovereign countries. Surely the law is quite the same in both?
Baroness Young: My Lords, I should like to make it clear that the United States Government do not

23
support the activities of the IRA—and I think that we should make that quite clear—and have condemned those activities.
Lord Paget of Northampton: Groups of Americans did.
Baroness Young: My Lords, we are talking about the United States Government. No doubt individuals within that country have differing views, as they do in any democratic society. On the second point of the noble Lord, as I made clear, Libya was a case of its own; and we do not accept that Article 51 can properly be invoked in the case of the South African actions.
Lord Soames: My Lords, is my noble friend aware that when I visited Zimbabwe in the early part of this year there had recently been a mine explosion just over the border in South Africa? This made both the Prime Minister and the Government of Zimbabwe extremely angry, because they have said consistently both in private and public that they did not wish their territories, nor did they intend to allow their territories, to be used for raids on South Africa.
I am astonished to hear that in the view of the South African Government this has happened recently. When my noble friend is in touch with our ambassador in Pretoria perhaps she will be so good as to ask him specifically whether the raids were made out of Zimbabwe recently; apparently this is considered by the South African Government to be a reprisal.
Baroness Young: My Lords, I should like to thank my noble friend Lord Soames for that helpful intervention. He speaks with great knowledge, and recent knowledge, of events in Zimbabwe. I shall certainly see that the point that he has made is conveyed to my right honourable and learned friend. I was of course aware that the Zimbabwean Government had denied the use of their territory by terrorists.

Armed Forces Bill
3.58 p.m.
House again in Committee.
[Amendment No. 1 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 2:
After Clause 4, insert the following new clause:
("Campaign against drug abuse and alcohol abuse.
. In section 43 of the 1955 Acts and section 28 of the 1957 Act (drunkenness), there shall be inserted the following subsection—
"(3) It shall be a duty of the Secretary of State to ensure that there is an effective and continuing campaign directed at those to whom this Act applies which publicises the dangers of drug abuse and alcohol abuse.".")
The noble Lord said: I rise to move Amendment No. 2. The Committee will appreciate that the Government have a good record on recognising the problem of drug and alcohol abuse. It is in order to seek to amend Section 43 of the 1955 Act—which in the margin relates to "drunkenness"—that I rise to
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move the amendment in my name on the Marshalled List. The Minister will appreciate that what I am seeking to do is to lay on the Government a duty to make it more positive that they recognise the realities.
The record of the select Committee on the Armed Forces Bill is my text for a great many of the matters that I raise. The Minister will be aware that on Second Reading I indicated that I would do this. It is not a matter on which I would seek to divide the Committee, but I believe the Minister should take the opportunity to explain as fully as possible the concern of the Minister of Defence for that for which we have a responsibility.
I refer to page 179 of the Select Committee on the Armed Services. We find an interesting contribution by Brigadier Peck. In item 624 he was asked by my honourable friend Dr. Godman:
"Alcohol and tobacco kill more people than other drugs. What education programme do you have, given that these are socially approved drugs and that no one is barred from access to them in the Armed Forces, what education programmes do you have for young Service personnel … in terms of warning them off these more dangerous and yet socially approved drugs?"
Brigadier Peck then said:
"whenever anybody joins a unit whatever definition that unit has, he would"—
not "is" but "would"—
"be made aware of the requirement to maintain a high standard of personal discipline. That would be explained to him. He would be educated in the general sense that commanders are expected to educate their young".
Then there was a contribution on the same matter and the discussion certainly contained no animus. Under paragraph 626 Air Vice-Marshall Campbell said:
"We do not have a specific education team, although the drug abuse lectures always start with an explanation that alcohol is a drug".
As the Committee will appreciate, unlike drug abuse the social acceptability of alcohol negates the need for clandestine use of drink and the true scale of any problem is therefore likely to be more accurately ascertainable once the new system is in operation. The factors which make the services a potential risk area for drug abuse—off-duty boredom, separations, stress and peer group pressure—apply equally to excess drinking. I do not want to exaggerate, although I believe there is a tendency for the ministry, perhaps for proper reasons, not to be fulsome in indicating the size of problems of this kind.
At Second Reading I quoted from an item in the Sunday Times dated 27th April. The part that I did not quote I believe is germane to this debate:
"A tri-service body on drug abuse prevention, that includes lawyers, educationalists, doctors and the military police, has been set up to monitor the problem and make recommendations on improvements in education, prevention and detection. The RAF has increased the number of its drugs education officers from one to five".
When we appreciate that each year we seek to recruit about 30,000 men and women to deal with the requirements of the services and that of the total of our armed services about 87,000—that is, about 27 per cent. of the total—are aged 21 or under, then we, representing some kind of stewardship over the welfare of young servicemen, have a right to hear from the Government what they are doing positively to meet a

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menace which, quite frankly, all of us are sad about and which clearly is not a matter just for the armed services. There are the prison services; and throughout society the problem is increasingly not just one of drugs but also of alcohol and other abuse. One thinks of the solvent abuse syndrome which has come on to the scene in the last five to 10 years. I should like the Minister to tell the Committee what he and his colleagues are doing to deal with this very difficult problem.
The recommendation which is part of the Armed Services report, recommendation No. 6, hangs on the peg of the Government response to the 1981 Select Committee. As the Committee is aware, we are debating a Bill of a type which is dealt with every five years. In 1981 the Select Committee said:
"We believe that drug abuse in the armed forces might be kept under better control if the other two services were to use specialist teams in this way and recommend that this possibility be explored before the 1986 Armed Forces Bill is introduced".
I am asking the Minister whether he can satisfy us that the best practice, which has been proved to be moderately successful in one service, is used by the others. The Minister will be aware that as long as 12 months ago the Minister of State announced in the continuation order debate on 27th June that a tri-service drug prevention group had been set up in March 1985. I am asking the Minister to tell us what progress has been made and with what success? I do not want figures about the number of people convicted, because these are tragedies in themselves. I want the Minister to satisfy the Committee that he is seized of our responsibility to deal with these matters not only on behalf of the servicemen, but also on behalf of parents and society. I beg to move.
Lord Denning: I should not think we need a statute on this. Cannot we leave it to the commanding officer?
Lord Trefgarne: I say at once that we take this matter very seriously. The services draw their recruits from society as a whole and they do, therefore, to some extent reflect the trends in that society. Thus they cannot hope entirely to escape problems such as drug and alcohol abuse. So far as alcohol abuse is concerned, the statistics are not readily available, but there is no evidence that alcoholism is a significantly greater problem in the services than in society generally. Statistics on drug abuse are carefully monitored, and I am glad to say that at this stage drug abuse is not considered to be a major problem.
Nevertheless, the services are well aware of the great dangers of both drug and alcohol abuse. Service chiefs rightly fear the debilitating influences of both drugs and alcohol and the effects these would have on the health, efficiency and discipline of our armed forces. As a result a comprehensive programme of measures has been instituted to combat these evils. This programme involves anti-abuse education including films, lectures and demonstrations—indeed, I have myself seen some of the new films on drug abuse that have recently been made and which will in due course he circulated to the fleet and elsewhere—measures to improve the prevention and detection of drug abuse, and the provision of medical remedial treatment.
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The campaign against the evils of alcohol and drug abuse is regularly reviewed. In recent months, for example, the Navy has set up a special alcohol education team and progress here will be carefully reviewed by the other two services. Furthermore, the whole range of anti-drug measures has recently been brought under the scope of a new tri-service drug abuse prevention sub-committee, to which the noble Lord referred. One of the steps it has been considering to combat drug abuse is the use of urinalysis equipment for drug detection. Indeed, as the noble Lord may know, I recently saw some of that equipment in action, and we shall be making our requirements known shortly. It is hoped in due course to be able to procure some equipment of that kind. It is intended that such equipment should be used as an additional aid to investigation in specific cases where there is a reasonable suspicion of drug abuse.
Steps have also been taken to improve the statistical basis for recording the incidence of drug abuse within the services so that trends can be carefully monitored. Perhaps I may add at this stage that it is clear that the incidence of drug abuse in the armed forces is way below the incidence of drug abuse in the community at large.
I and my colleagues are most concerned about the dual threat to the services presented by these evils, as indeed are the service chiefs. I hope that I have been able to persuade the Committee that every attempt has been made to combat this threat and that our methods of doing so are regularly reviewed and updated. In the light of that assurance, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Graham of Edmonton: I certainly intend to withdraw my amendment. The last thing that I would say is that the Minister is sanguine. I appreciate from what he said that steps are being taken. But, despite that, the Minister is aware that the number of British servicemen convicted of drug-related offences in military and civil courts has risen from 122 in 1982 to 353 in 1984. The Minister might say that that is a better record than in civilian life—that is, a doubling. It may very well be so; but it is a matter for concern. The item which I have read from the Sunday Times, which is validated, talks in terms of the figures for 1985 and 1986 showing a continuing increase.
They can still show an increase despite all the good efforts that the Minister and his colleagues are making. I do not agree that this is a matter which should just be left to the commanding officer. It is a responsibility of your Lordships' House to tell every commanding officer by way of primary legislation that we believe that there are responsibilities here. When we are endeavouring, as I am in relation to this amendment, to ensure that there is an effective and continuing campaign, what we are really saying is that we must never forget our responsibilities to the young people, to their parents and to society.
The Minister will appreciate, because I keep coming back particularly to the question of drugs, that I would never cavil at expenditure which is directly related to an attempt both to educate, which is difficult to quantify, or to eradicate or rehabilitate people who are unfortunately affected by drugs. It is not my intention

27
to press this matter to a Division. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.15 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 3:
After Clause 4, insert the following new clause:
("Offence of discrimination on sectarian grounds.
.—(1) After section 69 of the Air Force Act 1955 (conduct to prejudice of air-force discipline), there shall be inserted the following section—
>"69A. Any person subject to air-force law who acts or conducts himself in a manner which is discriminatory on sectarian grounds shall be guilty of a disciplinary offence."
(2) After section 69 of the Army Act 1955 (conduct to prejudice military discipline), there shall be inserted the following section—
"69A. Any person subject to military law who acts or conducts himself in a manner which is discriminatory on sectarian grounds shall be guilty of a disciplinary offence."
(3) After section 41 of the 1957 Act (aiding and abetting of naval offence), there shall be inserted the following section—
"41A. Every person subject to this Act who acts or conducts himself in a manner which is discriminatory on sectarian grounds shall be guilty of a disciplinary offence.".")
The noble Lord said: I beg to move Amendment No. 3 which the rubric indicates as dealing with the offence of discrimination on sectarian grounds. Those who have read with care the proceedings of the Select Committee on the Armed Forces Bill will understand that there was, to say the least, a hiatus in the Committee at the refusal of the majority on party lines to accede to the introduction of a witness who the minority side felt could help the Committee in respect of this matter. I think that that was rather sad. Clearly, we are talking here directly on this matter of sectarianism in respect primarily of the Northern Ireland situation—not explicitly of course; there may be other Members who wish to talk about this. I simply want to say to the Committee what a Member in another place, Mr. Mallon, had indicated that he would have been wanting to talk to if the matter which the memorandum dealt with (and which was received) had allowed him so to do.
This is what the Select Committee (which in effect we are discussing with our items today) had to say on page 257 under paragraph 12a.
"There are a number of examples which show what I mean when I describe the UDR as sectarian. (i) The UDR has had a proven involvement in loyalist paramilitary groupings, for example, the Miami show band murders, and the case of the Skankill Butchers both involved members of the UDR. (ii) Membership of the Orange Order and the Black Perceptory, an example of which is the charging of two men of the UDR following marching in Portadown in the summer of 1985. (iii) Open involvement in Unionist politics. There are for example members of the UDR who have been members of "Armagh District Council".
There is a great deal else. What I want the Minister to talk to us about in this amendment is, first of all, the status of the UDR as covered by this Bill; and, secondly, what actions the Government take in general, certainly over particular allegations of that kind, to make sure that the kind of discrimination which I am talking about in my amendment are—if not stamped out; and we all understand the realities in Northern Ireland—at least, so far as possible, not tolerated.
At Report stage of the Bill, my honourable friend Mr. McNamara not only relied on the evidence of Mr. Mallon, but he also introduced other evidence from the parish priest at Bessbrook, Newry, in County Down. He said:
" 'In my recent parish of Carrickmore, County Tyrone, I had reason to make representations on behalf of two of my parishioners at their request when they claimed that they were ill-treated by men from the UDR'."
Then he goes on to make those allegations. He does not simply say that they were bad acts by members of the armed services; he makes allusions to a sectarian aspect of it. The Minister would be helpful to the Committee if he gave us the benefit of his observations on the matter. I beg to move.
Lord Trefgarne: I want to stress right at the outset that discrimination by members of the armed forces on any grounds, whether of race, religion, colour or anything else, during dealings with other servicemen or with members of the public would not be tolerated. If it were to take place, it would be viewed extremely seriously and dealt with accordingly. Service law already contains a number of offences under which racial or religious discrimination would be an offence wherever it took place. Any conduct to the prejudice of good order and discipline under which any act of racial or religious discrimination would fall is an offence.
Moreover, anyone subject to service law commits an offence when he uses threatening, abusive or provocative words or behaviour. On 1st March this year the code of practice for the treatment and questioning of persons by the service police under the Police and Criminal Evidence Act 1984 came into effect and I should like to quote the following paragraph:
"Discriminatory behaviour on the grounds of a person's ethnic or national origin may render a service policeman, like any other member of the armed forces, liable to disciplinary action".
Taking into account all the safeguards that I have outlined, the provisions of which extend beyond those proposed in this amendment, I do not consider that the noble Lord's amendment would usefully assist in the prevention of discrimination in the armed forces. Having said that, our aims, I am sure, are absolutely parallel in this matter, and in the light of this I hope that the noble Lord will not wish to press his amendment.
Lord Graham of Edmonton: I do not intend to press the amendment. The Minister has had the opportunity to explain not just to the Committee but to the wider world outside that the Government (to the same extent that it is possible) do not agree to any extent with discrimination whether it is on sectarian or any other grounds. I am quite certain that the question of race relations, as well as equal opportunities and other rights which are enjoyed are equally applicable and are made available to members of the armed services. Certainly those outside your Lordships' Chamber, having heard the Minister, should recognise that if they know of instances, and have evidence to support those instances, which they believe are contrary to what the Minister has said, they have a responsibility not only to those who come to them with complaints but also to the Minister and to the Government in

29
order that they can deal with those matters. In the circumstances I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 4:
After Clause 4, insert the following new clause:
("Abolition of the death penalty.
Punishments
.—(1) In subsection (1) of section 24 (aiding the enemy), subsection (1) of section 25 (communication with the enemy), subsection (1) of section 31 (mutiny) and paragraph (i) of section 32 (failure to suppress a mutiny) of each of the 1955 Acts, for the words "death or any other" there shall be substituted the word "any".
(2) In section 2 (misconduct in action and assistance to the enemy), section 4 (obstruction of operations), section 5 (aiding the enemy), section 9 (mutiny) and section 10 (failure to suppress a mutiny) of the 1957 Act, for the words "death or any less' there shall be substituted the word "any".
(3) In subsection (2) of sections 71 (punishment of officers) and 72 (punishment of other ranks) of each of the 1955 Acts and subsection (1) of section 43 (scale of punishments) of the 1957, Act, paragraph (a) shall be omitted.
(4) Section 121 of each of the 1955 Acts and sections 78, 79 and 80 of the 1957 Act (execution of sentence of death) shall be omitted.").
The noble Lord said: This amendment concerns the abolition of the death penalty. I beg to move the amendment, always conscious that amendments drafted in opposition—bereft as we are of the panoply of assistance which is available to the Minister in the MoD and from the various sections—may very well have defects in them. However, the purpose of this amendment is clear. We seek to apply to members of the armed services the same law as is applied to or enjoyed by the civilian population. We rely very heavily for the extended debate that we shall certainly not be having here today on the matters which are being teased out and which will be dealt with when we look at the special report from the Select Committee. I believe it may help your Lordships if, in looking at my amendments, I could simply say:
"In subsection (1) of section 24 (aiding the enemy), subsection (1) of section 25 (communication with the enemy)",
and then take out the words,
"shall, on conviction by court-martial, be liable to suffer death or any other punishment."
What I am doing in fact is seeking to take out the words "death or any other", so that the passage would read, "to suffer punishment".
The matters with which your Lordships who are present here today are more conversant than I am, having argued about them, are quite clear. Section 24 has the heading, "Aiding the enemy". Section 24(1) says:
"Any person subject to military law who with intent to assist the enemy:

(a) abandons or delivers up any place or post which it is his duty to defend, or induces any person to abandon or deliver up any place or post which it is that person's duty to defend, or

(b) does any act calculated to imperil the success of operations of Her Majesty's forces, of any forces co-operating therewith or of any part of any of those forces, or

(c) having been made a prisoner of war, serves with or aids the enemy in the prosecution of hostilities or of measures calculated to influence morale, or in any other manner whatsoever not authorised by international usage, or

30

(d) furnishes the enemy with arms or ammunition or with supplies of any description, or

(e) harbours or protects an enemy not being a prisoner of war, shall, on conviction by court-martial, be liable to suffer death or any other punishment provided by this Act."

The case I am asking the Committee to accept is that capital punishment, the death penalty, has ceased to apply outside the armed forces in this country for many years. I am asking your Lordships to treat members of the armed forces in a similar way. Some of your Lordships may say that is essential and crucial, I do not intend to go over the great arguments—and they are great arguments—for or against the death penalty, because there are Members in this Chamber who are far better qualified than I am to argue for or against. However, I should like to draw the attention of your Lordships to exchanges which took place before the Select Committee. I quote from Question 396:
"396. I understand it is the policy that the death penalty would not be applied in peacetime?
(Lieutenant General Sir John Chapple.) Correct.
397. And yet the death penalty remains on the statute book? (Lieutenant General Sir John Chapple.) Correct.
398. Do I assume, therefore, that the statute remains as it is because the policy might change?
(Lieutenant General Sir John Chapple.) Yes.
(Mr Facer.) I think partly that and partly the difficulty of defining the point at which peace becomes war. There is considerable difficulty in this area."
I would refer now to an exchange which occurred in Question 452, which reads:
"452. So that in what is effectively a peacetime situation soldiers can be executed either in the United Kingdom or in Northern Ireland or, indeed, anywhere in the world, under one of these four headings?
(Mr Facer.) It has been made clear that it is not the intention for the death penalty to be invoked in peacetime. We are talking, therefore, about a situation that could not occur."
We also have a later exchange with Mr. Bermingham, who, following the same series of questions, said:
"463. Yes. The current policy is that no-one is to be executed, therefore currently no-one would be executed. I think that logically follows?
(Mr Facer.) Yes.
464. But it is possible at this moment in time, even though we are in a peacetime situation, for a British serviceman to be sentenced to death for one of these five offences if the offence occurs either in the United Kingdom, Northern Ireland, Belize, Gibraltar—anywhere where there is a British serviceman currently stationed, and he is liable for one of these five offences, if the court sees fit, to be sentenced to death?
(Mr Facer.) That is so.
(Mr Stuart-Smith.) The reality of the matter is that, as far as I am aware, there has been no such charge since the end of the 1945 war. Whether or not it was done in Korea I do not know. I cannot say with certainty there has been no death penalty imposed.
465. If charges have not been brought since 1945—and we have been through every type of conflict since then—Malaya, Borneo, Korea, Aden, Egypt, Cyprus, West Africa, East Africa, the South Atlantic and Northern Ireland—why do you still need it?
(Lieutenant General Sir John Chapple.) We need a good deterrent."
There you come back to the arguments about the value or the validity of the death penalty. I do not wish to say anything unkind about the ministry witness, but he said that one of the reasons why we need it is that it is a good deterrent.
We are members of the NATO community, and in that sense we need to have due regard to what our NATO allies do, because I assume they are as concerned as we are with the integrity of our defence and security systems. In a supplementary memorandum supplied by the MoD, on Wednesday, 12th February, the committee was told that Denmark, France, Norway, the Netherlands, the Federal Republic of Germany, Luxembourg and Portugal have abolished the death penalty completely. Spain retains the death penalty for use in wartime only. In Belgium, Canada, Greece, Turkey, Italy and the United States of America the death penalty is available as a sentence on servicemen in peace and in war.
The variations, the reasons and the peculiarities of each country's application of the death penalty are far too long to weary your Lordships with at this time. However, I would say that in 1986, in the light of what has been said in your Lordships' Chamber and in another place and in view of the current state of our law as applied to civilians, particularly in what we term an "all-volunteer armed service", I think it is about time we brought the law of this country as applied to our armed forces up to and alongside the same range of punishments as are available to those in civilian life.
Finally, I should like to mention the lack of seriousness of the nature of the five reasons.
I speak as an ex-serviceman and as someone who would certainly be very willing at any time to defend my country in any manner possible. I am not a pacifist and I can appreciate the seriousness of the situation. But I am talking of what I believe is the enlightened attitude of the British people, not just the attitude of the majority of our NATO allies, and the availability of the death penalty for servicemen who commit those crimes is not acceptable in 1986. I beg to move.
4.30 p.m.
Lord Denning: I think that most of us will have much sympathy with this amendment. There is no reason in principle for distinguishing between military law and our ordinary criminal law. We all know that capital punishment has been abolished for even the most heinous crimes, such as putting a bomb on an aeroplane and killing 300 or more people, kidnapping and the like. Many of us would feel that there ought to be capital punishment, but it has gone and it will not be restored. Should the position be different in the military field?
In the ordinary way, high treason still carries the death penalty, and high treason is still committed in Northern Ireland by those who levy war against the Queen and her realm, as well as against the Grand Hotel at Brighton. But that high treason has not been prosecuted and the charge is murder, which does not carry the death penalty.
If that is the position in the other parts of the law, is it logical or right to keep it for our servicemen? The clause applies not only in wartime but in peacetime, but does not history show how many people—whom others would forgive—deserted in wartime and were punished accordingly? Is there not a strong case for
32
removing the death penalty in these cases also, rather than to have inconsistency in the law?
Lord Elwyn-Jones: I rise to support the amendment and to agree with what the noble and learned Lord, Lord Denning, has just said. The inconsistency between abolition of the death penalty in the most grievous cases where death has been caused in the ordinary civil field and retaining it in the armed forces in regard to breaches of military discipline would be intolerable and unjust. What would be of interest, certainly to me and perhaps to the Committee, would be to know whether in the last war, from 1939 to 1945, there were, in practice, any death penalties carried out.
At the end of the war, I had the responsibility of being a Judge Advocate and I remember one famous mutiny trial where there was a refusal to pass the death sentence. I had better not go into more detail than that; otherwise, I shall be breaking the oath of secrecy. But if there was a case in the last war it would surprise me. The Minister has now indicated that there may have been a case or two and they would have been quite contrary to the feelings of those in the armed forces at the time. That is all I can properly say.
But at any rate, as a matter of consistency, the death penalty should go. I venture to think that we should be the only country in Europe, even in conditions of military law, retaining the death penalty. As the noble and learned Lord has said, high treason is something that is remote and not enforced. For instance, murdering the Lord Chancellor in the exercise of his duty—he is not here to be worried by this information—carries not only the death penalty but the penalty of beheading. That was the mediaeval law which is still the law of this country. Whether that will comfort the present Lord Chancellor—it certainly did not comfort me in any way—is, of course, another matter. But, seriously, it is time this went out of the code of military law as well, and I hope that the Committee will approve and carry the new clause.
Lord Mayhew: Logic seems to be wholly on the side of those who are seeking to amend the Act and the difficulties of the practical application of the Act, too. We might conceivably arrange a hanging or even a shooting, but a beheading as recommended by the Act for the murderer of a Lord Chancellor would present quite exceptional difficulties of an ethical, political and humanitarian kind.
This is a familiar debate on which views are constantly expressed in both directions within each party. That is the case today—certainly with my noble friends and myself—and I am speaking for myself when I say that I find the logic on one side. But, at the same time, one can argue both ways about the fact that it is inconceivable to use this penalty, it has never been used and it has never been invoked since the end of the war in 1945. It could be argued that is therefore out of date and should be removed, but it could also be argued that it has served as an extremely effective deterrent.
The one thing that reassures me is that we no longer apply the death penalty to a whole range of military offences to which it was applied earlier. We have grown up in a literary tradition. We have read books and poems and we have witnessed plays in which the

33
execution of soldiers was carried out for acts of cowardice or desertion. We are not, of course, discussing those now. We are discussing only the possible hypothetical use of the death penalty in cases of active assistance to the enemy and of deliberate treachery. Therefore, I think it is not a matter on which it is easy to be dogmatic on one side or the other.
Lord Kennet: May I rise on a point of information? It would greatly assist some of us if the Minister could give an authoritative list of the democratic countries which retain the death penalty in their armed forces and those which do not.
Lord Trefgarne: May I say at the outset that I do not have all that information in front of me, but I shall be happy to try to find it and let the noble Lord have it. That means that a copy of my letter to the noble Lord will go automatically to the Library.
May I at the outset confirm my nod to the noble and learned Lord, Lord Elwyn-Jones, about events during the second world war? There were, I understand, three officers who were executed in this way during the second world war. All three cases took place in 1942 and I understand arose from the same incident.
It might be helpful if I now begin by setting out the provisions in the Service Discipline Acts under which the death penalty could still be applied. The first and most fundamental point is that the death penalty can only be applied where the offence is committed with the deliberate intention of assisting the enemy or, where mutiny is concerned, with the deliberate intent to avoid or impede operations against the enemy.
Where this deliberate intention of assisting the enemy or avoiding or impeding operations against the enemy is present, there are now only five offences in the Service Discipline Acts that carry the death penalty as the maximum penalty available. These are misconduct in action, assisting the enemy, obstructing operations, mutiny and failure to suppress mutiny.
I have just been reminded that I did not quite get it right when I was replying to the noble and learned Lord, Lord Elwyn-Jones, just now. It is indeed the case that three people were executed during the second world war for offences arising out of the same incident, but they were not, I understand, officers as I inadvertently led your Lordships to imagine just now.
But, returning to the main issue, the 1981 Select Committee of another place looked at these five offences in some detail and accepted that the death penalty should be retained as the ultimate punishment where there was a deliberate intention to assist the enemy. I should stress that we are talking only about a maximum discretionary punishment. For these five service offences the death penalty is never mandatory.
We also looked very carefully at the question of retaining the death penalty in relation to these five offences and we concluded that we should. The issue was also examined by the 1986 Select Committee of another place which took both oral and written evidence on the subject. The noble Lord, Lord Graham, referred to that during the course of his remarks. Its conclusion, rightly in my view, is that no change should be made. I must stress that the death penalty could be applied to a serviceman only in
34
circumstances where the offence is tantamount to the civilian criminal offence of treason, for which capital punishment is still mandatory.
Treasonable activity within the ranks of the armed forces in war would undoubtedly be a crime of the utmost seriousness. If committed, it would almost certainly lead directly to the loss of the lives of other servicemen performing their operational duties bravely and trusting in the loyalty of those serving with them. The service chiefs are unanimous and clear that it is right to retain the death penalty for offences tantamount to treason and the Government share that view. The noble Lord, Lord Mayhew, towards the end of his remarks indicated that this was a matter of more than usual complexity and difficulty, and I hope therefore that the noble Lord will not wish to press his amendment on this occasion.
Lord Graham of Edmonton: I am obliged to the noble Lord the Minister for his remarks, but I am somewhat puzzled because I am still unclear as to the extent to which mutiny is capable of being defined or understood. In my view what the Minister has said is not on all fours with the words that appear in the 1955 Act.
I come back to the case that I made at the beginning. We are concerned to have in the Bill something that does not act as a deterrent, but which has meaning and purpose. This Chamber is well experienced not only in looking at changes over 40 years but also in not wanting the law to be brought into disrepute. As the noble and learned Lord, Lord Denning, said, we are talking in terms of horrendous situations. I take the Minister's point about a serviceman who, by an act of the kind that is listed, causes the death of his comrades in whatever circumstances; certainly when they are relying upon him that is an absolutely horrendous crime. But as the noble and learned Lord, Lord Denning, pointed out, these days there are equally horrendous crimes carried out by civilians which do not carry the death penalty. What the Minister has to prove is that in the circumstances in which members of the armed forces are serving they need to be treated separately. So far as I am concerned this is a right and proper time to test the view of the Committee and I intend to press the amendment.
4.44 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 76; Not-Contents, 116.

DIVISION NO. 1

CONTENTS

Amherst, E.

David, B. [Teller.]

Ardwick, L.

Davies of Penrhys, L.

Banks, L.

Denington, B.

Birk, B.

Denning, L.

Blease, L.

Donaldson of Kingsbridge, L.

Boston of Faversham, L.

Elwyn-Jones, L.

Bottomley, L.

Ennals, L.

Bruce of Donington, L.

Ewart-Biggs, B.

Caradon, L.

Falkender, B.

Carmichael of Kelvingrove, L.

Feversham, L.

Cledwyn of Penrhos, L.

Fitt, L.

35

Gallacher, L. [Teller.]

Paget of Northampton, L.

Galpern, L.

Phillips, B.

Graham of Edmonton, L.

Prys-Davies, L.

Grimond, L.

Ritchie of Dundee, L.

Hampton, L.

Rochester, L.

Harris of Greenwich, L.

Seear, B.

Hatch of Lusby, L.

Shepherd, L.

Henderson of Brompton, L.

Silkin of Dulwich, L.

Houghton of Sowerby, L.

Stallard, L.

Hughes, L.

Stedman, B.

Hunt, L.

Stewart of Fulham, L.

Jeger, B.

Stoddart of Swindon, L.

Jenkins of Putney, L.

Strabolgi, L.

John-Mackie, L.

Taylor of Blackburn, L.

Kennet, L.

Taylor of Gryfe, L.

Kilbracken, L.

Taylor of Mansfield, L.

Listowel, E.

Tordoff, L.

Llewelyn-Davies of Hastoe, B.

Underhill, L.

Lloyd of Kilgerran, L.

Wallace of Coslany, L.

Lockwood, B.

Walston, L.

Longford, E.

Wells-Pestell, L.

Lovell-Davis, L.

Whaddon, L.

Masham of Ilton, B.

White, B.

Mishcon, L.

Wigoder, L.

Molloy, L.

Willis, L.

Mulley, L.

Winchilsea and Nottingham, E.

Nicol, B.

Oram, L.

NOT-CONTENTS

Alexander of Tunis, E.

Hooper, B.

Alport, L.

Hunter of Newington, L.

Arran, E.

Hylton-Foster, B.

Attlee, E.

Ilchester, E.

Belhaven and Stenton, L.

Kimball, L.

Bellwin, L.

Kinloss, Ly.

Belstead, L.

Kinnaird, L.

Bessborough, E.

Lane-Fox, B.

Blake, L.

Lauderdale, E.

Boyd-Carpenter, L.

Lawrence, L.

Brabazon of Tara, L.

Layton, L.

Brougham and Vaux, L.

Long, V.

Broxbourne, L.

Lucas of Chilworth, L.

Bruce-Gardyne, L.

Lurgan, L.

Buckinghamshire, E.

Lyell, L.

Butterworth, L.

Macleod of Borve, B.

Caithness, E.

Macpherson of Drumochter, L.

Cameron of Lochbroom, L.

Campbell of Alloway, L.

Mancroft, L.

Campbell of Croy, L.

Manton, L.

Constantine of Stanmore, L.

Mar, C.

Cox, B.

Margadale, L.

Crawshaw of Aintree, L.

Marley, L.

Cromartie, E.

Maude of Stratford-upon-Avon, L.

Cross, V.

Cullen of Ashbourne, L.

Merrivale, L.

Davidson, V.

Mersey, V.

Dilhorne, V.

Mountgarret, V.

Donegall, M.

Murton of Lindisfarne, L.

Dowding, L.

Newall, L.

Drumalbyn, L.

Orkney, E.

Eden of Winton, L.

Orr-Ewing, L.

Ellen borough, L.

Pender, L.

Elliot of Harwood, B.

Plummer of St Marylebone, L.

Elliott of Morpeth, L.

Elton, L.

Porritt, L.

Faithfull, B.

Portland, D.

Ferrers, E.

Rankeillour, L.

Fortescue, E.

Renton, L.

Fraser of Kilmorack, L.

Rodney, L.

Gainford, L.

St. Aldwyn, E.

Gibson-Watt, L.

Saint Brides, L.

Glanusk, L.

St. Davids, V.

Glenarthur, L.

Sanderson of Bowden, L.

Gray of Contin, L.

Sandford, L.

Grey, E.

Sandys, L.

Gridley, L.

Savile, L.

Hampden, V.

Sempill, Ly.

Hanworth, V.

Shannon, E.

Holderness, L.

Skelmersdale, L. [Teller.]

Hood, V.

Soames, L.

36

Sudeley, L.

Vivian, L.

Swansea, L.

Ward of Witley, V.

Swinfen, L.

Westbury, L.

Swinton, E. [Teller.]

Whitelaw, V.

Thorneycroft, L.

Wise, L.

Trefgarne, L.

Wynford, L.

Trumpington, B.

Young, B.

Vaux of Harrowden, L.

Zouche of Haryngworth, L.

Vickers, B.

Resolved in the negative, and amendment disagreed to accordingly.
4.53 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 5:
After Clause 4, insert the following new clause:
("Abolition of exemption of Services Acts under Sexual Offences Bill 1967.
. After section 19 of the 1981 Act, there shall be inserted the following section—
"19A. Subsection (5) of section 1 of the Sexual Offences Act 1967 shall cease to have effect.".").
The noble Lord said: This amendment seeks, as do a number of other amendments in my name, to apply to members of the armed forces the same conditions, rights and freedoms, wherever possible, as are currently enjoyed by those who are not members of the armed forces. This amendment seeks to apply all the conditions contained within the Sexual Offences Act 1967 to the armed forces.
Again, we are indebted to an extremely useful range of arguments that were deployed in the committee. I make no party point and certainly no party animus was raised in that committee; just as there is none in this House and in the other place whenever the question of sexual freedom or the way in which sexual offences are held to be criminal acts are discussed. I am certain that the same will apply during our discussions in this Committee.
I summarise for the benefit of the Committee the arguments that were put by the Ministry of Defence experts. Let me say that we are not arguing about what they said but about what the committee did; because the majority of the committee accepted their arguments. I believe I have been guilty more than once of saying that what I was opposing was what the MoD witnesses said, whereas, quite properly, I am now arguing against the conclusions of the committee.
They are summarised in a number of ways. First, one of the reasons given why members of the armed forces need to be treated separately is that they live in closed communities. Apparently they are the only people who live in closed communities, but that is one of the central arguments used—that there are conditions, an ambience, an environment which are peculiar to the armed services which are not applicable elsewhere. Secondly, the argument is that one needs to have an arrangement whereby there is absolute trust and confidence between all ranks. I should have thought that there needs to be absolute trust and confidence between all levels of management and in a hierarchal society; not merely in the armed forces but in many other organisations. However, one of the arguments put forward is that one needs to respect and build upon, not destroy, absolute trust and confidence. The other argument was that the potentially destructive influence of homosexual

37
practices should be excluded from the environment. If one looks at the words, that is given as the basic reason.
I intend to deploy my arguments by making several quotations, and this raises one of the aspects of the Bill which causes me the greatest puzzlement. It is very difficult, reading the statements of the witnesses—and it is upon the evidence of the witnesses that the committee came to its conclusions—to believe that one is on the same wavelength when going from one page to another. They shift all over the place. There is no black and white or hard and fast way to look at the matter. If one looks at the evidence one can become very confused. For example, the chairman of the committee said to Mr. Stuart-Smith:
"Is homosexuality as such, as opposed to homosexual acts, illegal under the Armed Forces law?"
The answer is "no", it is not illegal per se, to be a declared homosexual. It is not even illegal in some circumstances to be a practising homosexual because, as evidence shows, exceptions are made.
The question of disclosure, the question of consideration, the question of punishment—if that is the right word—when these matters come forward is a matter of judgment. One commanding officer may well come to a different conclusion from another. In some of the evidence which is attached to the report given by some of the organisations—and I respect the fact that they are much closer to these issues because they speak to the people who have been aggrieved and badly treated—one can see that there is a variety of ways in which the services seek to react to a revealed set of circumstances.
On page 183 of the committee's report Mr. McNamara asked:
"When you say that most persons convicted of an offence would be discharged, what would be the exceptions when a person would be maintained in the Service?"
Mr. Facer replied:
"It would depend very much on the nature of the offence."
In other words, one can make a subjective judgment. It depends; it is what one determines. I assume that this means that the view that is held by an individual with authority and power can apply differently in the same circumstances. Mr. Facer used the words "it would depend very much on the nature"; so one then gets into the argument of who precisely and exactly defines what is the nature of the offence.
Then Mr. McNamara asked:
"What are the circumstances, then, whereby a person who has been found guilty under service law of a homosexual offence would be retained?"
In other words, it is not an offence to be homosexual. We now know that it is not an offence to commit a homosexual act under some circumstances. Mr. Facer said:
"Well, there might be cases where the offender was a relatively young Serviceman where he made perhaps a voluntary confession that he indulged in some homosexual practice which was perhaps not of the most serious kind".
One has to apply one's own assessment of what is meant by the phrase "not of the most serious kind". I shall be told by the Minister whether I am right or wrong, but apparently someone, perhaps the
38
commanding officer, exercises judgment in those circumstances. Mr. Facer continued:
"It is very difficult again to be hypothetical because each case is considered in the circumstances of the case".
So each case is considered separately. We all know that, where there is only one arbiter or where the law is capable of being interpreted or applied in different ways, it is inevitable that for the same crime (if that is what it is) different levels of punishment will be meted out.
I should like to draw the attention of the Committee to some more words of Mr. McNamara:
"You say that the 'nature of service operations means that absolute trust and confidence within and between all ranks is essential and any activities, such as homosexual practices, which might disrupt such trust and confidence must be avoided'. That is one of your main arguments? Why do you not court martial for adultery between a serving man and perhaps the wife of another serving man, or between husbands, putting it in the other context?".
Mr. Stuart-Smith said:
"In certain circumstances, where there was a rank of difference"—
in other words, it depends not on the act but on the differentiation between the rank of those involved—
"I would not be prepared to say a charge would not be brought on the basis of conduct prejudicial to good order and military discipline".
There is the gravamen. In fact the charge ought to be,
"conduct prejudicial to good order and military discipline"
not whether a man is homosexual or a practising homosexual; but in whatever circumstances, whatever the conduct, whether that conduct is held to be prejudicial to good order and military discipline.
5 p.m.
If we are concerned with trust and confidence, which is one of the bases on which this view is held, we all know very well that the grave matters of disunity, distress, distrust and lack of confidence can be brought about by sexual acts which are not homosexual in nature. They can be sexual acts between a man and a woman; and one party may not necessarily be a serving officer, non-commissioned or otherwise. One may be a civilian. Those involved may be two members of the armed services, or the act may involve a man and the wife of another serving officer. So we have an enormous confusion as to precisely who and what are caught or held to be liable under this particular criterion.
I turn now to the point that I was making earlier about the relationship being a criminal offence. Mr. McNamara asked:
"I accept that entirely, and there would be reason for charging a person with conduct prejudicial to good order and military discipline, but why not charge him with conduct prejudicial to good order and military discipline; why make homosexuality per se as a relationship a criminal offence?"
Mr. Facer replied that the offences were not defined as "homosexuality" but that they were defined in a slightly different way and Mr. Stuart-Smith said that they were defined as "disgraceful conduct of an indecent kind".
So, something which is legal and permissible outside the armed forces—homosexuality between two consenting adults in private—when it takes place between one or two members of the armed forces is

39
held to be disgraceful conduct of an indecent kind. In simple equity, let alone in justice and humanity, I believe that we ought not to tolerate a situation in which that is the law of the land. As far as I am concerned there is a conflict; other members of the Committee who take part in this debate will clearly have their own personal points of view. Let me say again that this evidence is crucial. Mr. McNamara, a member of the Committee, asked:
"I am not saying that I necessarily disagree with that as a definition of such acts, but what I am asking is why you treat it as an offence when you can treat it in other ways? You are taking action and saying that purely and simply it is an offence. It is an offence if he is a member of the Armed Forces but not if he is a civilian; if he does it away from his place of duty it is an offence, or if he does it in private it is an offence; if he does it with somebody who has no association with the Armed Forces at all it is an offence. Why?"
Mr. Facer replied:
"There is an argument here for deterrence; we are trying to prevent actions which are detrimental to service discipline and operational effectiveness, and the existence of the specific provision is helpful in this respect."
I know that the Committee clearly has its own views on this matter, as indeed on other matters. We are the people who can retain the law or change it. We can change it by accepting my amendment. I simply plead in aid the evidence that was given to the committee by the National Council of Civil Liberties on this issue, who said:
"Homosexual acts are an offence for members of the armed forces, an anomaly, when compared to the law relating to the rest of society. Homosexual men and women often face harassment both official and unofficial. The organisations At Ease and Campaign for Homosexual Equality have details of individual cases where a person suspected of being homosexual has had his or her possessions and lockers searched by the Military Police and diaries and letters taken and the names therein recorded. Such harassment can have a profoundly disturbing effect on the individual under suspicion. Recently a 21 year-old private in the King's Regiment was convicted and jailed for life after strangling a friend who had threatened to tell the army about their homosexual affair. Sentences of 9 months imprisonment for merely having a homosexual affair are not unknown. Such conduct would not be punishable under the general law.
In the NCCL's view there is no justification whatsoever for the persecution under military law of homosexual men and women. We have stressed that civil liberties for servicemen should not differ from those of civilians without good reason".
I am satisfied not only by my own predilection for the arguments—which I have studied perhaps with rather less care than I should have wished before coming to the Committee—but also on the basis of the evidence put before the Committee. In the light of the current law, which as I understand it is not seriously challenged in either House, I cannot believe that a case has been made out for maintaining the non-application of the law to members of the armed forces. That is why I have put forward my amendment. I beg to move.
Lord Denning: Throughout history society has condemned homosexuality. Those members of the Committee who know the Bible will remember Lot's wife and how the vengeance and punishment of God came down on the cities of Sodom and Gomorrah—and sodomy has remained the name given to this offence. At common law it was called the abominable crime of buggery. I have tried non-commissioned officers and sentenced them to three years for it, because, certainly in the armed forces, it is detrimental
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to discipline and good order, destructive of morality and certainly to be condemned.
In the law, all that was altered in 1967. I remember it, and the debates that we had on it. Section 1 of the 1967 Act states:
"a homosexual act in private shall not be an offence provided that the parties consent thereto and have attained the age of twenty-one years".
Is that to apply to the Army, Navy and Air Force? Is the only difference to be whether the man is just over or just under 21, when the sergeant or the sergeant-major may be 29, with these youngsters being 19, 20 or 21? We are getting into ridiculous distinctions.
I am pretty sure—and I have known many of them—that generals, admirals and air vice-marshals would certainly retain the offence. It is necessary to maintain the morale, the sense of dignity and the efficiency of the armed forces. I hope that the amendment will not be accepted.
Lord Mayhew: Once again the noble Lord, Lord Graham, has moved an amendment which I think he will agree is not a party matter. Any remarks that I may make now are simply on my own behalf. The first point that I would dispute in his admirable introduction, with great respect, is where he implied that there is no environment peculiar to the armed forces; that somehow the same atmosphere must exist in civilian as in service life. I believe that there is a profound difference in the atmosphere and environment of service life. We cannot get away from that. The armed forces are for a particular purpose, and they must be efficient for that purpose. They cannot necessarily be a mirror of our civilian society and fulfil the purpose for which we maintain them. That affects the issue that we are discussing on the amendment.
I agree with the noble Lord in that I do not believe that the Ministry of Defence witnesses to the Select Committee made out a very logical or persuasive case. We are discussing what kind of homosexual relationship or conduct, if any, should be permissible which is not prejudicial to good order and discipline. We all agree that homosexual behaviour and relationships which are prejudicial to good order and discipline are already dealt with, and no one is arguing about that at all. I think the noble Lord is raising the question of homosexual behaviour or relationships which are not prejudicial, and is asking: should they be permissible?
As a serviceman, I find it almost impossible to conceive of an open homosexual relationship or homosexual conduct which would not be prejudicial to good order and discipline. I am sure that many of us here would have had experience of active service as servicemen. I am speaking entirely for myself, but I cannot believe that most servicemen on active service would want to share their crowded billets with a pair of either heterosexual or homosexual lovers. I do not believe it, and I think that that is a perfectly reasonable attitude. It is not a matter of prejudice: it is simply a matter of common sense. It is what I would have felt myself.
I should like to hear from the noble Lord what is the homosexual relationship or conduct which is not prejudicial and which he thinks should be allowed. As

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a serviceman I find it difficult to envisage that. However discreet the heterosexual or homosexual relationship was, in conditions of active service it would be disruptive, would create tensions and would not be wanted. I ask myself whether the armed forces want us to move the amendment. I have no evidence of that at all. What I still know about the armed services suggests to me that they would not wish this amendment to be passed. That being so, on what grounds are we to impose our views on these matters on the armed services? With the most liberal interpretation possible, I do not think that this is a genuinely liberal amendment.
5.15 p.m.
Lord Marshall of Leeds: I very much admired the speech of the noble Lord, Lord Mayhew. Anyone who is attracted to the idea by some correlation between civilian life and life in the armed forces is severely misleading himself. In civilian life a person has the right to refuse to do something that someone else asks him to do. In the services one cannot without retribution refuse to carry out the terms of an order. Life is very different in civilian life from that in the armed forces.
In 1945 I spent many days defending a WO(1) at general court martial for that alleged offence in respect of nine private soldiers. That offence, of course, was absolutely prejudicial to good order and military discipline. I was fortunate enough to obtain his complete acquittal. I think he had been framed. But it was proper that the prosecution was brought at general court martial. Nothing runs like a virus through the services, or through any other body of men living together, as much as homosexuality. For that reason alone I very much oppose the amendment.
Lord Trefgarne: I think the aim of the noble Lord's amendment is to remove the statutory provision which enables homosexual practices on the part of members of the armed forces to be charged as offences against the service discipline Acts. At present the position is that under the services discipline Acts all homosexual practices involving service personnel continue to be offences regardless of the sex, age or willing consent of those involved. Section 1(5) of the Sexual Offences Act 1967, which otherwise permitted sexual acts between consenting adult males in private, specifically reserves the position.
The exemption of the armed forces was in recognition of the unique circumstances of service life. Servicemen and servicewomen serve in conditions where, both on and off duty, they are unavoidably living in closer proximity and sometimes under stress. In addition, service life, particularly in demanding operational circumstances, requires absolute trust and confidence among all servicemen, based on disciplined and professional relationships. The amendment proposes a more permissive approach to homosexuality which both the services and the Government are clear would not be in the interests of the good discipline or the professional efficiency of the service as a whole.
The Select Committee of another place considered this issue fully, receiving evidence from the Ministry of Defence and bodies in favour of allowing a more
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permissive approach to homosexuality in the armed forces. The committee concluded in paragraph 25 of its report that it would not be wise to change the existing law. The Government agree firmly with that conclusion, and I hope that your Lordships will likewise agree with it.
Lord Graham of Edmonton: I was hoping for at least one supporter, but I did not hear one.
Lord Trefgarne: I am afraid not.
Lord Graham of Edmonton: No, but the arguments deserve to deployed. I was intrigued by the noble and learned Lord, Lord Denning, who disclosed passionately where he stands on the issue. If he had been in this Chamber or in another place in 1967, he would have voted against the law of the land. The impression he gave, which I am sure the Official Report will reveal, was that since 1967 the law has been different from the views of the people. The general feeling was the the act was heinous and intolerable. Since 1967 society has believed that under certain circumstances it is acceptable. We are arguing about whether members of the armed services should be entitled to conduct themselves in the same manner as civilians.
An intriguing point made was about the nature of the closed unit in which homosexuality would be disruptive. The closed unit of 1945 is different from the closed unit of 1985. The nature of the people who serve in it has changed. There are men and women. There are far more women now than men. Far more women were on active service in 1985 than in 1945. I venture to suggest that conduct of a sexual nature—not homosexuality—which might cause disruption goes on in many units. It is known to other people. It occurs between two lovers—one man and one woman; but we are talking about two lovers who are both men.
We are talking about a sexual act between two people in a closed unit—not the barrack room—which is not disruptive. Permissiveness, promiscuity and adultery apparently do not worry people, but the sexual act between two male lovers or two female lovers is apparently not merely likely but certain to damage the viability and fighting capability of a unit. I beg leave to doubt that.
The noble Lord, Lord Mayhew, asked if we know whether the armed services want this change. I have no knowledge of it. We shall be dealing with trade union membership later. As legislators we are made privy to what the armed services want not just on this matter but on a range of other matters.
Earlier I said that a witness had said that one of the reasons for not permitting homosexuality in the forces was that they are a closed society. With respect, I did not say that there were other closed societies; I said merely that the armed services were not the only closed society. Prisons are not governed by laws similar to those relating to the armed services. I stand to be corrected if I am wrong, but I believe that they are in a different category. There are many communities outside the armed services, for example, the universities, which are looked upon as closed communities. The witnesses used the phrase "a closed

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community". In those communities there is freedom for people to act as they wish.
The noble Lord, Lord Mayhew, was right when he said that I was talking about the extent to which one could remove taboos and allow two people, men or women, to act differently from heterosexuals and still not endanger good order and discipline. I appreciate that that matter is not easy to define.
I am grateful to the Committee and to the noble Lord the Minister for having taken part in this short debate. I may well reurn to the issue on Report, but at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 5 to 7 agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 6:
After Clause 7, insert the following new clause:
("Power of Secretary of State to set time limits in relation to preliminary stages of courts-martial proceedings.
. After section 103 of the 1955 Acts and section 58 of the 1957 Act, there shall be inserted the following section—
"(1) Without prejudice to section (Provisions for avoiding delay after arrest) above, the Secretary of State may by regulations make provision, with respect to any specific preliminary stage of proceedings for an offence, as to the maximum period—

(a) to be allowed to the prosecution to complete that stage;

(b) during which the accused may, while awaiting completion of that stage, be detained in military custody in relation to that offence.

(2) The regulations may, in particular—

(a) be made so as to apply only in relation to proceedings instituted in specified areas;

(b) make different provision with respect to proceedings instituted in different areas;

(c) make such provision with respect to the procedure to be followed in courts-martial proceedings as the Secretary of State considers appropriate in consequence of any other provision of the regulations; and

(d) make such transitional provision in relation to proceedings instituted before the commencement of any provision of the regulations as the Secretary of State considers appropriate.

(3) The Defence Council may, at any time before the expiry of a time limit imposed by the regulations, extend, or further extend, that limit if it is satisfied—

(a) that there is good and sufficient cause for doing so; and

(b) that the prosecution has acted with all due expedition.

(4) Where, in relation to any proceedings for an offence, an overall time limit has expired before the completion of the stage of the proceedings to which the limit applies, the accused shall be treated, for all purposes, as having been acquitted of that offence.
(5) Where—

(a) a person escapes from military custody before the expiry of a custody time limit which applies in his case; or

(b) a person who has been released in consequence of the expiry of a custody time limit fails to surrender himself into military custody at the appointed time;

the regulations shall, so far as they provide for any custody time limit in relation to the preliminary stage in question, be disregarded.
(6) Where—

(a) a person escapes from military custody; or

(b) a person who has been released fails to surrender himself into military custody at the appointed time;

the overall time limit which applies in his case in relation to the stage which the proceedings have reached at the time of the escape or, as the case may be, at the appointed time shall, so far as the offence in question is concerned, cease to have effect.
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(7) In this section—

"custody time limit" means a time limit imposed by regulations made under subsection (1)(b) above or, where any such limit has been extended by the Defence Council under subsection (3) above, the limit as so extended;

"overall time limit" means a time limit imposed by regulations made under subsection (1)(a) above or, where any such limit has been extended by the Defence Council under subsection (3) above, the limit as so extended; and

"specified" means specified in the regulations.".").

The noble Lord said: I believe that this amendment will be acceptable to the Minister.
Lord Trefgarne: The noble Lord is wrong.
Lord Graham of Edmonton: Even if I am wrong, I shall continue with my attempt. We are seeking to apply to service life as much as possible of what applies to civilian life. My case was made by the noble Lord, Lord Elton, when on Second Reading of the Prosecution of Offences Bill on 29th November, 1984, he said:
"The third of the principal innovations to be brought about by the Bill gives effect to our commitment to move towards a system of statutory time limits in criminal proceedings. Your Lordships will remember how, throughout the proceedings on the Police and Criminal Evidence Act, we considered a great many difficulties and anomalies, many of which concerned the way in which a suspected offender is taken into the criminal justice system and how he is handled thereafter.
We gave each of these questions our close and detailed attention in turn… Our proposal is to prepare for the development, trial and improvement of a set of statutory limits to the length of time that can be spent on the preliminary (that is to say, the pre-trial stages) of criminal prosecutions. These stages are fairly complex and the considerations can vary widely from case to case. Moreover, the concept that we wish to apply is new to English law…What the Bill does therefore is to set up an order-making power and a framework within which it can be exercised. When that framework is in place, the Home Secretary will use the power in the light of the results of the field trials which he will conduct".—[Official Report, 29/11/84; col. 1016.]
At a later stage of the Bill, on 24th January, the noble Lord, Lord Donaldson, said:
"The effect is a perfectly simple one. It will be a choice between two evils: would you rather have a large number of people kept in prison when they should not be there or would you rather have an approximately similar number of people out on bail for longer than they would otherwise be? It is as simple as that. You can do one or the other. My view is that the evil of keeping in prison people who should not be there is worse than the acknowledged evil of putting people back on bail in order to bring other cases forward".—[Official Report, 24/1/85; col. 418.]
Although the amendment, suggested to me by an eminent outside body, is lengthy, it may contain errors in drafting. In essence I seek to have applied to those who face charges in service life the same law that applies to non-service personnel. I beg to move.
5.30 p.m.
Lord Trefgarne: I appreciate that the noble Lord's intention in putting down this amendment is to bring service law into line with the provisions which apply to the prosecution of offences in England and Wales. As the noble Lord made clear, his amendment is based very closely on Section 22 of the Prosecution of Offences Act 1985. That section enabled the Home Secretary to make regulations concerning time limits for trial in the civilian criminal courts in England and Wales. It was an entirely new departure, since previously there had been no provision to apply time limits of this nature. In this respect, the general

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criminal law differed from service law and regulations which already contain a number of provisions designed to avoid delays in bringing cases to trial and lengthy periods in custody prior to trial. These provisions include regulations which ensure that charges must be investigated quickly without avoidable delay. In the case of the Army and Royal Air Force a person must be brought before his commanding officer and charged within 48 hours of being arrested. This compares with the 96-hour maximum available to the civilian police under the Police and Criminal Evidence Act 1984. There are also provisions which ensure that if an accused person is held for more than eight days without a trial being begun, this fact must be reported to higher authority. In the case of the Army and Royal Air Force there is provision that a person should not be held under arrest for more than 72 days pending trial without permission from higher authority. The higher authority in that case is myself. In the case of the Navy the equivalent provision is for up to 90 days. I stress that these provisions already exist under service law and regulations and their effect is to ensure that trials under service law are not unduly delayed.
I should also explain that these provisions are kept under review and that my department is certainly not averse to the consideration of ways in which these procedures could be improved and strengthened. Consequently I may say that I have found the noble Lord's amendment to be very interesting and I can assure him that it is something that we will wish to keep in mind for the future. However, as he will no doubt be aware, my right honourable friend the Home Secretary has as yet made no regulations under the relevant section of the Prosecution of Offences Act. I understand that trials are at present under way in four selected areas and that these trials will continue until the end of next month. Thereafter the results will be carefully analysed before the next step is determined.
My department will be interested in the outcome of these trials and of any further developments in this area of the civilian criminal law. Once the way ahead in this area is clear we shall of course wish to consider whether to adapt them to the rather different procedures of service law and the best way of doing so, bearing in mind the provisions which already exist in service law. In the meantime I believe that it would be premature to tie service law to procedures reflected in the noble Lord's amendment. These procedures were developed specifically for the civilian criminal law and, as drafted, would be unworkable in relation to service law. With that explanation of our objections to his amendment and my assurance that this is a matter which we shall wish to keep under close review, I hope the noble Lord will feel able to seek leave to withdraw.
Lord Elwyn-Jones: The decision to include in the Prosecution of Offences Act time limits for the bringing of prosecutions was a very important development in our criminal law and our criminal system. The Committee will be reassured by the noble Lord, Lord Trefgarne, saying that in the light of the trials and experimental investigations of how this has worked in the civil field he will be prepared to consider the possible application of the same kind of controls in the field of military law. There are time limits already,
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as the noble Lord has said, in some aspects of military and naval proceedings. I hope that my noble friend will be encouraged by the assurance that what is happening in the civil field will be carefully considered before the next version of the Armed Forces Bill comes up, or possibly before that, in respect of a similar application to proceedings in naval and military courts.
It is intolerable, and has been intolerable in the past, that those awaiting trial can be kept waiting for month after month. Scotland long ago set a limit on the time given to prosecutors. It is important to carry this reform through to the military field. After all, many of these prosecutions result in acquittals. It is not always that the police or the prosecuting authorities get the right man. It is right in principle that what has been done in the civil field should also be sought to be done here. I hope therefore that my noble friend will not press the amendment to a Division.
Lord Graham of Edmonton: My noble and learned friend is right. I am grateful to the Minister for pointing out some good reasons as to why it would be wrong to carry this amendment. If the purpose of bringing this forward is to permit a march on all fours with civilian legislation, we have to provide the appropriate Government Ministers with the opportunity to reflect. I am grateful also to the Minister for saying that at first sight there are perhaps some aspects of the amendment that may commend themselves to Ministers. Those outside the Committee will read what the Minister has said and will guide me as to the actions they might wish to take. My advice to them is that they should not look a gift horse in the mouth. The half promise that we have been given by the Minister that he will look sympathetically at the matter is, I suspect, the best offer that I will be given today. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 8 to 10 agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 7:
After Clause 10, insert the following new clause:
("Non-custodial sentencing.
.—(1) In Schedule 5A to each of the 1955 Acts and Schedule 4A to the 1957 Act, in paragraph 10(1) (custodial orders in respect of offender under 21 but not less than 17 years of age), and subsection (1) of section 71AA of the 1955 Acts and section 43AA of the 1957 Act (young service offenders: custodial orders)—

(a) at beginning insert the words "Subject to paragraph (1A) below,"; and

(b) at end there shall be inserted the paragraph—

"(1A) The Court may not pass a sentence of imprisonment or make an order under paragraph (1) above unless it is of the opinion that no other method of dealing with the offender is appropriate because it appears to the court that he is unable or unwilling to respond to non-custodial penalties, or because a custodial sentence is necessary for the protection of the public or because the offence was so serious that a non-custodial sentence cannot be justified".").
The noble Lord said: The noble Baroness, Lady Faithfull, as always in respect of these matters, is in her place. It was during the passage of the Criminal justice Bill on 22nd June 1982 that the noble Baroness moved an amendment—at five o'clock apparently, according to Hansard—which read:

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"because it appears to the court that he is unable or unwilling to respond to non-custodial penalties or because a custodial sentence is necessary for the protection of the public or because the offence was so serious that a non-custodial sentence cannot be justified".—[Official Report, 22/6/82; col 944.]
Those who have read with care my amendment and those who listened with equal care to the amendment moved by the noble Baroness, Lady Faithfull, will see that this is again an attempt to make the machinery of justice inside the forces the same as it is outside. The noble Baroness will be delighted that what she proposed has now become law, although she could not have been so delighted that she had to divide against the Government on that occasion. However, she carried the day against the Government by 102 votes to 81. I hope very much that the Minister will not be minded to stand in the way of this amendment or I presume in the way of the noble Baroness, Lady Faithfull.
I say with the utmost sincerity that this is a matter, widely understood by many Members in this Chamber, that has to be considered in the light of the prison population and also in the light of current considerations that are going on as to the level of recourse in this country, in comparison with others, to custodial sentences and the consideration of alternatives to custodial sentences in the non-service area. Surely it is not unreasonable for us to attempt to follow the same avenue in the Bill. On page 1526 of the Criminal Justice Act the amendment which the noble Baroness moved is there in the Statute. I very much hope that the Minister will tell us that this is something which he is prepared to consider. I beg to move.
Baroness Faithfull: I must respond to the noble Lord, Lord Graham of Edmonton, and thank him for what he has said. I have given notice of intention to oppose the Question whether Clause 11 stand part of the Bill, and the noble Lord, Lord Mayhew, has done the same. Perhaps I may speak to the two matters—Amendment No. 7 and Clause 11—together rather than speak twice.
As I understand the clause, it gives a court martial or a standing civilian court dealing with children of service families abroad the power for the first time to pass custodial sentences of up to 12 months on boys of 15 and 16. Perhaps I may speak to that.
The noble Lord, Lord Graham, is quite right that I moved an amendment to what is now the Criminal Justice Act 1982. I am very puzzled by the clause in the Bill because it is completely contrary to the policy of the Department of Health and Social Security concerning young people. I am not one who in the other discussions we have had has said that everything in the forces should stand alongside the civilian life. But where children and young people are concerned it is a slightly different matter.
Under the Children and Young Persons Act 1969, the Children Act 1975, and—as the noble Lord, Lord Graham, has said—the Criminal Justice Act 1982 the movement has been away from custodial care towards care in the community, remaining with families and helping families to take the responsibility for their children. This clause in this Bill is completely contrary to the policy put forward by the Department of Health
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and Social Security. May I therefore ask with the utmost diffidence whether the Ministry of Defence has been in touch with the Department of Health and Social Security, and which one—I was going to say—won; or were they not in touch with one another over this clause?
With regard to the well-being of the children, for custodial sentences to be passed, and for children to be brought to England away from the country where their parents are stationed, to a place where the parents and relatives of the child may not be living, would be a great disservice to the childen and would not help those who have committed offences. It is perfectly true that in this country rather than a custodial sentence, we are moving towards projects in the community known as intermediate treatment. The noble Lord, Lord Hunt, has done a great deal of work in this connection. Surely it would not be beyond the wit of man to have intermediate treatment projects in places where our services are stationed? I have not been in the services; I would not know. But perhaps other noble Lords can tell us. In any case, to remove a child from, say, Germany to a youth custody place in England away from relatives or parents does no good to that child. I also admit, quite frankly, that there are children who must be removed. But if that is the case, surely it would be better to have a care order made involving the local authority in the area where the relatives and friends of the family live. That would be a much more sensible way of dealing with a child who must be removed—and there are a few children, honesty compels me to say, who must be removed, but not in this other way.
I therefore very strongly support the amendment of the noble Lord, Lord Graham of Edmonton. I am also speaking to the Question whether Clause 11 stand part of the Bill; I very much hope that my noble friend the Minister agrees.
I see the noble Lord, Lord Glenarthur, sitting on the Front Bench. He well knows the situation with regard to youth custody centres. Perhaps the two noble Lords can get together and agree with the noble Lords, Lord Graham, Lord Mayhew and myself.
5.45 p.m.
Lord Mayhew: I should like to add a few words of support, especially with regard to the all-party move to reject Clause 11. The Government have had a fairly easy afternoon on the whole and now is the opportunity for the noble Lord, Lord Trefgarne, to earn some credit with a very sensible, not very fundamental, improvement to the Bill; namely, leaving out Clause 11.
It is very hard to see why we should now decide to increase the powers for giving custodial sentences to young people to courts-martial and special civilian courts at the very time that we are doing exactly the opposite in the United Kingdom. I understand that in Scotland they have done it for years already. It is an extraordinary moment therefore to bring forward an amendment to increase the powers for giving custodial sentences to persons under 17.
In addition, the number of offenders involved is minute—perhaps two a year. Yet the Government go to all this trouble to amend the Armed Forces Bill at

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this time for that purpose. There is a good deal of feeling that this is a sensible matter on which the Government might make a concession. I would very strongly urge the noble Lord to do so.
Lord Hunt: I have only just picked up the amendments and looked at the Bill, but I feel moved to rise very briefly to support the case made by the noble Baroness in support of the noble Lord, Lord Graham of Edmonton. The point that has not yet been made which is well known to anyone in the penal reform business is the enormously high record of failures of custodial sentences on young people. My own forecast is that by sending young people from their overseas station to a youth custody centre or detention centre in this country is likely to increase the failure rate. Young people would be separated from their families in nearly all cases. I should have thought that it would be possible to devise schemes for intermediate treatment or possibly community service orders in those places so that they remain with their families in the community. I speak from my experience of serving in stations abroad—where I have the edge over the noble Baroness. The range of activities permissible under an intermediate treatment order is so great that one can make some very useful programmes which would be constructive in their effect.
Lord Graham of Edmonton: The noble Baroness, Lady Faithfull clearly trying to be helpful, wrapped together her observations on the amendment which I moved and on the Question whether Clause 11 stand part. I hope that the Minister will deal with them separately. Indeed, we may have to deal with them separately.
Lord Donaldson of Kingsbridge: May I support what has been said from these Benches? I missed the first speech, but I heard the speech from the Liberal Front Bench and the speech of my noble friend Lord Hunt. I want to add my weight to the objection to any proposal which extends sentences for young people anywhere.
Lord Trefgarne: I was planning to deal with both the points made by my noble friend Lady Faithfull, who—spoke to the amendment of the noble Lord, Lord Graham, and subsequently to the Question whether Clause 11 stand part. If the Committee agrees, I shall now reply to both propositions during the course of my remarks.
I am pleased to be able to tell the noble Lord, Lord Graham of Edmonton, that the bulk of his proposed amendment was in fact introduced in the Service Discipline Acts by the 1982 Criminal Justice Act, Schedule 8, paragraphs 3 and 7. As a result, Sections 71AA of the 1955 Acts and 43AA of the 1957 Act provide that a service court shall not impose a custodial order on a young service offender unless it is of the opinion that no other method of dealing with him is appropriate. A similar restriction is in respect of young civilian offenders and is contained in paragraph 10 of Schedule 5A of the 1955 Acts and in Schedule 4A of the 1957 Act.
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I understand that the further wording:
"because it appears to the court that he is unable or unwilling to respond to non-custodial penalties or because a custodial sentence is necessary for the protection of the public or because the offence was so serious that a non-custodial sentence cannot be justified".
is considered inappropriate to service law. This is because service law provides for a form of punishment, service detention, which is not available in the civilian criminal courts. This too is a custodial sentence but not in the sense intended in the wording of the Criminal Justice Act which I have just quoted. To adopt that wording would be to throw confusion on the position of service detention. However, I hope that with this explanation the noble Lord, Lord Graham of Edmonton, will accept that the intention behind his amendment is in fact already fulfilled in that service courts are already bound to impose a custodial sentence on those under 21 only if no other disposal is considered to be appropriate.
May I turn now to the later remarks of my noble friend Lady Faithfull. I know her thoughts were very much in the minds of other noble Lords as well. Clause 11 empowers service courts to impose custodial orders on young males of 15 and 16 years of age. At present, those youngsters under 17 years of age, who commit the most serious crimes such as murder and manslaughter, may be ordered to be detained for as long as the Secretary of State directs. Where their crime is of lesser gravity, but still very serious, the most severe punishment at present available to service courts is the imposition of a reception order, under which the child will be transferred into care in the United Kingdom, perhaps until its 18th or 19th birthday. In a number of cases which have arisen, this has not been felt to be the most appropriate method of disposal, and I dare say my noble friend will agree with that.
I do not want to give the Committee the impression that there is a crime wave among the younger members of the service families overseas; nothing could be further from the truth. However, there are inevitably a small number of cases where it is felt that some form of custody would be appropriate, and Clause 11 provides the power, on similar lines to the Criminal Justice Act 1982, to order the detention of young males of 15 and 16 for up to 12 months. Such sentences would of course be served in the appropriate United Kingdom institutions. No provision is made for the detention of young females because of the absence of any facilities to accommodate them for periods of less than four months. I can assure the Committee that I do not expect this power to detain young males to be used other than extremely sparingly, in the tiny minority of cases where a serious crime, of violence perhaps, has been committed. I can also say that the provision goes no further than the equivalent sections of the Criminal Justice Act 1982.
Members of the Committee have expressed concern that perhaps a court martial is not the most appropriate forum for dealing with juveniles. I am not sure that any of my noble friends specifically referred to that point, but it is a matter which has been raised. I should explain that this is not a new development introduced by Clause 11. Service courts, both courts martial and standing civilian courts, already have such powers to deal with the juveniles and will continue to have them

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whether or not Clause 11 is enacted. The new departure proposed by Clause 11 is the extension of the power to impose a custodial sentence on 15 and 16 year-old males both for courts martial and standing civilian courts. I appreciate, however, that in England and Wales there are special juvenile courts to deal with those under 17, while in Scotland there are children's hearings for those under 16.
In England these courts are composed of specially trained qualified justices, including lay justices. In Scotland the panels are composed entirely of lay members. Members of the Committee will, I am sure, understand that within the service community overseas there would be real difficulty in attempting to create anything equivalent to such courts. It would be extremely difficult, within the relatively small military communities overseas, to identify, train and retain sufficient numbers of people to form such panels. However, we have done what is possible to adapt service courts when dealing with civilians. A court martial dealing with a civilian can include, in the case of a general court martial, up to two civilians. Standing civilian courts, run by a civilian magistrate, were set up specifically to deal with civilians, and in practice these courts deal with most of the juvenile civilian offenders who fall to be dealt with under service law. Noble Lords will wish to be aware that when a standing civilian court is dealing with a juvenile, the magistrate can be advised by up to two lay assessors who may advise him on all matters other than points of law, although they do not have a vote on finding or sentence.
I should also stress that in all service courts great emphasis is laid on ensuring that the accused fully understands what is going on and this particularly applies when the offender is a juvenile. Taken together with the fact that an accused has the unquestioned right to be legally represented and may apply for legal aid on exactly the same grounds and terms as in England, I am satisfied that great efforts are made to ensure that trials under service law are not intimidatory, particularly where juveniles are concerned.
The Select Committee of another place has asked the Ministry of Defence to continue to monitor developments in civilian law so that if the civilian courts' powers to impose custodial sentences on 15 and 16 year-olds are replaced by perhaps residential care orders, we should bring forward proposals to amend service law accordingly.
I am happy to give the assurance that we shall of course take account of any such developments. Our aim, as I have said during Second Reading, is to bring service law as far into line as possible with civilian criminal law, and in the particularly sensitive area of the sentencing of those under 17 we shall be anxious to consider any changes which those responsible for such matters in the civilian criminal courts may wish to make.
My noble friend Lady Faithfull asked specifically whether we had discussed our proposals with the DHSS. I can assure my noble friend that these proposals were discussed with all the relevant departments within government, including the DHSS,
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and their views have been fully taken into account. Incidentally, perhaps I should add that detention centre orders were brought in for civilian defenders by the Act of 1982 and that of course includes those who are males of 15 and 16 years of age. Clause 11 is, to that extent, bringing service law into line with its civilian counterpart.
I hope that I have been able to persuade the Committee that the amendment proposed by the noble Lord, Lord Graham, is not appropriate; and, secondly, that Clause 11 ought to stand part of the Bill.
Baroness Faithfull: My Lords, I wonder whether I can get this point quite clear: do I understand that it is under consideration that care orders may be able to be made in the future, and that this is being considered rather than always using youth custody orders?
Lord Trefgarne: I am not entirely certain in what context my noble friend asks that question; but perhaps I may look into the matter and let her know if I have anything to add.
6 p.m.
Lord Graham of Edmonton: Perhaps the initiative as to whether Clause 11 shall stand part of the Bill lies with the noble Baroness; but I certainly have a view which I shall indicate to the Committee. Regarding the amendment that I moved which initiated this debate, I am satisfied—and I believe that the noble Baroness, Lady Faithfull, will be satisfied—with the caveat that we shall read very carefully what the Minister has said. In fact, our own researches and those outside may satisfy us that substantially the points we sought to be made are already covered. In that case, the Minister and his advisers have done us a good service for which I express my appreciation, and I do not wish to press Amendment No. 7 which I have moved.
However, when it comes to Clause 11, quite frankly, I am genuinely puzzled that the Minister has not even been prepared to say that he will look at our arguments. Despite what NACRO has told me, despite what the Children's Legal Centre has told me and despite what the At Ease organisation has told me—that they see Clause 11 in a different light from that of the Minister and his advisers—he is so certain, and those outside the Committee who advise him are so certain. I am more than willing to press that Clause 11 does not stand part of the Bill, but I am even more anxious not to do so if the Minister is prepared to say that he will read very carefully what has been said.
I understand that it is not possible at a Report stage to move that a clause does not stand part of the Bill. I understood that it was only at a Committee stage that one had that opportunity. In fact, I have now been told that it is possible. However, I would rather try to do this now, reserving the right to do it later on if necessary, although perhaps it may not be necessary.
These organisations have been very careful to point out to us the unsatisfactory nature of the content of Clause 11. I was very taken by the remarks of the noble Lords, Lord Donaldson of Kingsbridge and Lord Hunt, who pointed out the ineffectiveness of the custodial sentence route, which is inscribed in Clause 11. NACRO tells me that despite all the dedicated efforts of staff custodial sentences for this age group are

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strikingly unsatisfactory. It says that 72 per cent. of the juveniles leaving detention centres and 80 per cent. of those leaving youth custody centres are reconvicted within two years. They increase rather than reduce the propensity of young people to commit crimes. Both those noble Lords did not need to read part of a brief, as I have had to. They are aware of all this because of their involvement in trying to assist such young people. We are talking about school children of 15 and 16 years old who may very well be faced with the panoply of a court martial.
It is all very well the Minister saying that courts martial are not intimidatory. There is the matter of care, access to legal representation, etc. I should imagine that a 15- or 16-year old who is involved in a charge of this kind, for which a custodial sentence may be imposed, will feel intimidated even if the best intentions of the Minister are carried out. Therefore, I very much hope that the Minister, with an opportunity at the Committee stage, is prepared to listen to the arguments and allow us to come back at the next stage. Otherwise, at the appropriate stage I shall certainly be minded to move that Clause 11 shall not stand part of the Bill.
Amendment, by leave, withdrawn.
Clause 11 [Extension of power to make custodial orders in relation to civilians]:
On Question, Whether Clause 11 shall stand part of the Bill?
Baroness Faithfull: I am still somewhat worried. There are some children who need to go to youth custody centres: but most of the children, if they must go away from home—and that is the very last resort—would do better with a care order. I should prefer to read Hansard and see what my noble friend the Minister has said. Therefore, I shall not press this now, but I shall raise it at the next stage.
Clause 11 agreed to.
Clause 12 agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 8:
After Clause 12, insert the following new clause:
("Composition of Courts-Martial.
.—(1) After section 89 of the Army Act 1955 there shall be inserted the following section—
"89A. Notwithstanding the provisions of sections 87, 88 and 89 in the case of a general, district, or field general court martial convened to try a person of below commissioned rank, the defendant shall have the right to insist that at least one member of the court-martial is also a person of below commissioned rank.".
(2) After section 89 of the Air Force Act 1955 there shall be inserted the following section—
"89A. Notwithstanding the provisions of sections 87, 88 and 89 in the case of a general, district, or field general court martial convened to try a person of below commissioned rank, the defendant shall have the right to insist that at least one member of the court-martial is also a person of below commissioned rank.".
(3) In section 54 of the Naval Discipline Act 1957, at the end there shall be added the following subsection—
"(9) In the case of a court martial convened to try a person of below commissioned rank, the defendant shall have the right to insist that at least one member of the court-martial is also a person of below commissioned rank.").
The noble Lord said: I beg to move the amendment standing in my name on the Marshalled List. The purpose of this amendment is indicated in the first proposed new section:
"… general court martial convened to try a person of below commissioned rank, the defendant shall have the right to insist that at least one member of the court-martial is also a person of below commissioned rank".
Again, the Minister can put me right, but a court martial is peopled wholly by those of commissioned rank. If the defendant is below commissioned rank—that is, if he is a corporal, as I was in the Royal Marines, a sergeant or an RSM—then it should be laid down as mandatory that a sergeant shall be a member of the court martial. Outside this Committee we often use the phrase that one wishes to be "tried by one's peers". That phrase has a special connotation here. It is not merely a question of being tried by those with whom one has an association, a link, a friendship or an equality of status. We are talking here of those who, from day-to-day living, understand the conditions, the pressures and the many other aspects which a person who is of non-commissioned rank quite clearly bears. If they are not special problems, they are special matters that ought to be taken into account.
I know that when this matter has been looked at before some very important pronouncements have been made. In 1946 there was a report by Lord Justice Lewis. Mr. Justice Lewis, as he was at that time, and his committee, recommended that other ranks should not serve on courts martial. They were against it. However, as regards the report itself, there are some interesting footnotes by Mr. Raymond Blackburn. He is well-known to senior colleagues of mine and others round the Committee from his service in another place. He was a member of that committee, and this is what he said:
"While subscribing to the report as a whole, I regret that on one subject I do not wholly agree with my colleagues on the Committee—namely, on the composition of the court in courts-martial. I believe (1) that a private soldier, lance corporal or corporal or lance bombardier or bombardier should have the right to demand that one corporal or a bombardier should sit on a court-martial composed of three persons trying him or that two corporals should sit on a court-martial composed of five persons trying him".
Now, of course, a great many more people hold the views of Mr. Blackburn, and it is not my intention to weary the Committee with those particular views. I believe that we need to be fair. We are saying that a person who is a non-commissioned officer on a Wednesday is incapable of serving on a court martial, but when he is promoted and becomes a commissioned officer on a Thursday, overnight, ipso facto, he becomes a new man or woman, and he or she then suddenly has the gift; he or she has suddenly had a visitation and is competent and capable.
I know that Mr. Viggers, the Member for Gosport, in another place, argued that officers are peculiarly well-fitted because, besides being gentlemen, in their training as officers they receive a certain veneer. I have news for Mr. Viggers. People are being tried every day in our criminal courts—for instance, at the Old Bailey—where juries pass judgment upon them. The jury listens very carefully; but it does not receive special training. The members of the jury, because of the jury system, are simply brought in off the streets. They are qualified in various ways, but there is not a

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semblance of being trained to try people. And yet officers are capable of trying people at a court martial but non-commissioned officers are not. That requires a big stretch of the imagination.
This is nothing remotely against the capability of commissioned officers, who I understand have thorough training, one aspect of which is in the legal niceties, and particularly of service law. They will know more about the Armed Forces Bill than anyone in this Committee ever will because they have to apply it. I am simply arguing for a movement. The movement is that one ought not exactly to liberalise but to make less hidebound in the future than in the past the composition of courts martial.
I imagine that there are Members of this Committee who are engaged even now from time to time in pleading in the courts. The question of the composition of a jury, the question of ethnic origins, of sex and of background, are all carefully weighed from the point of view of the jury being capable of producing a verdict which is more likely than unlikely to be favourable to your client. What I say is that if you are a non-commissioned officer you would like to feel that there was at least one non-commissioned officer on the court martial.
I am not saying that they are going to bully them, or that they are going to be bullied by the others. I am not even saying that they may be as competent. I am talking in terms of equity and justice, or the appearance of equity and justice. The noble Lord, Lord Mayhew, may well ask me whether I have been prevailed upon by the armed services, and is there an agitation about this. I do not know. I have not detected it. I have read every word of the blue book and the reports in order to be prepared for these debates. I cannot honestly say that there is even a surreptitious agitation from within the services, or from non-commissioned ranks, or in any other way, but I like the sense of what is being sought in this amendment.
I hope that the Minister and people around the Committee will agree that this is something we can look at, even for an experimental period. I am not certain that it will not be welcomed. There could well be a school of thought in the Army, say, where they feel they want to be tried by their officers. In other words, not by their peers, not by those of their own rank, but by superior beings. That may be the situation. I do not know. But I certainly hope that the Minister will take on board the point that I am seeking to make. I beg to move.
Lord Mayhew: The noble Lord, Lord Graham, declared that his purpose is to "liberalise" the courts martial, and of course at that word, like Pavlov's dogs, I salivate. And yet I am not convinced that the amendment would have the effect that he expects. I agree with a good deal. I agree that a non-commissioned or under-commissioned ranked person might well have a more intimate understanding both of the offence and of the accused.
I also rather agree that the training of officers, certainly in my experience, is very rudimentary. I remember being told the rudiments of court martial procedure and military law at the time of
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commissioning, so I am some way with him in what he says. At the same time the assumption behind his amendment is that there are, and have been, unjust convictions by courts martial because they have been composed solely of commissioned officers.
The noble Lord did not put forward any evidence for this. I am personally not acquainted with any evidence. It is important not to make reforms unless there is good evidence that something is wrong. If I had a string of instances, or indeed if I had evidence that there was a feeling in the services that there were these unjust sentences as a result of courts martial being formed wholly of officers, then I should be a great deal more sympathetic. Otherwise, I wonder.
I heard the noble Lord say that it would be some comfort to an offender who was an NCO or a private to know that there was a private or an NCO on the court martial. I must say that when I was in the ranks if I had been summoned to a court martial and told that there was to be an NCO on it, I would have immediately asked, "Which NCO?" If I was told that there was a private on it, I would have asked, "Which private?" This leads me to suspect that an NCO and a private on a court martial might be exposed to rather warmer pressures than an officer. On the whole, I have some reservations about this amendment, and will wait with interest to hear what the Minister has to say.
6.15 p.m.
Lord Marshall of Leeds: Again I find myself in almost total agreement with what the noble Lord, Lord Mayhew, had to say. I think that the noble Lord, Lord Graham, deceives himself a little if he tries to compare the duties of a juryman on the one hand and the duties of a person, whoever he may be, sitting on a field general court martial, a district court martial, or a general court martial. The juryman has the benefit of having the judge, who goes to some great trouble to address the jury before they retire to give their verdict.
It is not quite the same at a court martial, even though in my time on the general court martial a member of the Judge Advocate General's staff invariably sat on the court for the purpose of advising the court on matters of law. This sometimes happened in less serious cases at field general courts martial.
I was concerned with tanks, but my time was very much taken up by being asked to prosecute or defend cases in the field and not in the field. Therefore in the end I was concerned in defending, or prosecuting, every rank from trooper to Major General. I never heard any of them complain that there was not on the particular court martial or general court martial a person of equivalent rank. Had that been the case, and had there been a feeling of dissatisfaction, at least I should have heard it in the number of cases in which I was concerned, both during the war and after the cessation of hostilities in Europe.
Lord Trefgarne: As the noble Lord has made clear, the objective of his amendment is to ensure that one of the members of a court martial should be someone other than an officer, where those of below commissioned rank are being tried. Although the conclusion of the 1946 Lewis Committee was that to widen the composition of courts martial to include those below commissioned rank would neither tend to

57
improve the quality of the court nor the appearance or prospect of justice being done, this issue has been given regular consideration since then.
Following a recommendation by the Select Committee of another place which examined the 1981 Armed Forces Bill, the question of the composition of courts martial has been looked at again in detail. As my right honourable friend the Minister of State for the Armed Forces said in another place, we found no grounds for departing from the conclusions of the Lewis Committee. Morever, there is no evidence of any desire within the non-commissioned ranks of the armed forces for the composition of courts martial to be altered.
Both oral and written evidence was taken from my department by the 1986 Select Committee of another place which inquired particularly into the grounds for saying that there is no discernible pressure for change within the armed forces. I note that the committee's report makes no recommendation for change or even for further consideration of this issue but accepts the validity of the Government's arguments. I believe that the present system works well and enjoys a high degree of respect throughout the services. I hope that the noble Lord will therefore not wish to press his amendment.
May I say before I sit down that when he said that there was a possibility of a man being a non-commissioned officer one day and not being eligible to sit on a court martial, and then becoming commissioned the next day and being able to sit, that is not quite so. You have to have held a commission for two years before you can sit on a district court martial, or three years for a general court martial or for any Royal Naval court martial.
Lord Graham of Edmonton: The noble Lord obviously speaks from experience! I do not know from which side of the table he speaks from, but I take the point.
Taking the point of the noble Lord, Lord Mayhew, there has been a little misunderstanding. To paraphrase Lord Mayhew, he said that if he had to appear before a court martial and was told that there would be a non-commissioned rank on it, he would want to know who it was. If he did not want that person to be there he would not be there, because my amendment talks about the right to insist. If the noble Lord, Lord Mayhew, felt as a non-commissioned ranker that he wished to be tried by all officers (of course he is a Liberal) that would be up to him. I believe the noble Lord, Lord Marshall, talked in terms of rights and insistence. I am saying that it will not be imposed.
Where the person who is to be charged is a non-commissioned officer feels that he would be better served if at least one of those hearing his case is of equivalent rank he would have the right to ask for that. The Minister is absolutely right. I do not speak from evidence. There is no petition or agitation. I simply speak from conviction. I believe it is wrong to talk in terms of a caste society in the services; where the only people who apparently are competent to try others who serve in the services are those of a commissioned rank and that those of a non-commissioned rank are not competent. That is why I was making this case.
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The noble Lord has satisfied me not least because the Select Committee, having heard the arguments, came to the conclusion that there needed to be no change. Thus I am not prepared to press the amendment but beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 13 [Change of place of safety and return to United Kingdom of children in need of care or control]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 9:
Page 12, line 27, at end insert—
("( ) For subsection (4) there shall be substituted the following subsection—
"(4) The grounds which justify the making of such an order are that there is reasonable cause to believe that damage to the child's health or well-being is likely unless he is immediately removed to or detained in a place of protection for the duration of the order.".").
The noble Lord said: I believe that it is the wish of the Committee that Amendments Nos. 9, 10, 11, 12 and 13 should be taken together because they hang together. I shall be dealing in particular with Amendment No. 10, for that I believe is the best one to argue the case contained in this series of amendments. At this stage it will not be my intention to press any of them to a vote, but on this occasion and on others we need to use the very limited opportunity that the Committee has to deal with matters of crucial concern to every serving member of our armed forces. We are concerned with the detection, prevention and treatment of child abuse. As my honourable friend in another place Dr. Godman said, one Jasmine Beckford is one to many. We are engaging the Minister and his advisers in convincing the Committee regarding the arrangements in respect of children who may be within our purview and responsibility. I shall not say I am not concerned with other people's interests, but I am primarily concerned with the interests of the child.
Amendments Nos. 9, 11, 12 and 13 strengthen Amendment No. 10, which is concerned above all else with the primacy of the interests of the child. The 1981 report on the Armed Forces Bill, referring to children at risk, states in paragraph 10, on page 6:
"The grounds on which an order may be made, (e.g. that the child is being ill-treated, exposed to moral danger or beyond control) follow civil legislation".
We are trying to be satisfied, as the Minister satisfied me earlier about the non-custodial sentence availability, that what we have here is on all fours with what is available for civilians. On this we want the Minister to do exactly the same as he did previously.
We also have to hear from the Minister further on the report of the Armed Services Bill which we are now dealing with. Paragraph 16, on pages 8 and 9, reads:
"The procedures under service law for dealing with children at risk are broadly comparable to those under English civilian law. Different procedures, however, operate in Scotland. Under Scots law, a child detained in a place of safety must be brought before a 'children's hearing', composed of 3 lay members, within 1 or 2 days. The hearing has power to appoint a 'safeguarder' to represent the child's interests. Both the child and its parents have the right to be represented at the hearing and to appeal against the hearing's decision".
I believe that the Scottish situation is either broadly or generally what we want here. I am taken by this

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concept of the children's hearing. Anything we can do to try to relate the panoply of the court to the circumstances of the defendant (in this case the child) is likely to be helpful. The report states that the children's panel or hearing was set up under the provisions of the Social Work (Scotland) Act 1968.
I was interested to hear what was the purpose of the hearing—to consider whether there is a conflict between the interests of the child and those of his parents—and that the panel may appoint a safeguarder to represent the child's interests. It is interesting that the case powerfully made in Committee in another place by Dr. Godman was codified into an amendment to the Bill. The amendment was pushed to a Division and there was an equality of votes. The issue powerfully argued by Dr. Norman Godman resulted in a vote of four for and four against. I make no point about parties because a Conservative Member of the Committee joined the Liberal and Labour Members. Dr. Godman is the person particularly concerned with the English child care law.
I should like the Minister to tell us something about the current status of the interdepartmental working party's report to Ministers which figured in the Committee. The purpose of that was to consider place of safety orders, how much they have been used and how much they have been criticised. The special report says a great deal about the ways in which the procedures can be strengthened.
I hope that the Minister will tell us something more about that. The Children's Legal Centre drew my attention to place of safety orders which are enshrined in Clause 13. This is what it said:
"The clause appears to have been drafted without reference to the review's recommendations for changing place of safety order provisions in domestic child care law".
In the report to Ministers of the inter-departmental working party it is recommended that the DHSS with the Ministry of Defence should consider the implications of changes to the main place-of-safety powers, the powers which cover children of families living abroad. If I were in the business of stretching these things out, there is a great deal more information which has been given to me which certainly is very interesting but which I am sure all Members of the Committee will have studied with care. I beg to move the amendment and hope that the Minister can say something sympathetic.
6.30 p.m.
Baroness Faithfull: May I ask the Minister whether, when he is replying, he could help me in regard to care and protection cases? For those children who have been, say, battered and are at risk, there are two stages. There is the stage where it is hoped to help a family to look after its own children and to come to terms with the difficulties within the family. Then there is the stage where a case is taken to court because an offence is alleged to have been committed. What happens in the forces? Is there somebody nominated to whom families can be referred before the case is actually taken to court? I should be most grateful to know.
Lord Trefgarne: Perhaps I may answer my noble friend first before dealing specifically with these amendments. May I say that that is a matter which falls slightly outside the scope of this amendment? If my noble friend will allow me, I shall get the precise information and write to her as soon as I can.
Having said that, I must confess that I am slightly surprised to see this amendment down in the name of the noble Lord, Lord Graham of Edmonton. These amendments to Clause 13 were proposed and thoroughly discussed in another place when my right honourable friend the Minister of State for the Armed Forces explained that although he fully understood that the aims of the proposer were extremely laudable—as indeed they are—his amendments were based on a misunderstanding of the purpose of service place-of-safety procedures. The amendments were then withdrawn and we had thought that that was the end of the matter. Nevertheless, our view of the amendments remains entirely the same and I hope that I can persuade the Committee to deal with the amendments as they were dealt with in another place.
Although the reasons for our rejection were thoroughly gone into in another place, it may be helpful if I rehearse the major points of our arguments today. The first part of the noble Lord's amendment seeks to alter the grounds which justify the making of a place-of-safety order under service law. However, the present provisions, contained in section 14 of the 1981 Armed Forces Act, follow very closely the wording of section 1 of the children and Young Persons Act 1969. I am aware that the proposed amendment derives from the review of child care law which my right honourable friend the Secretary of State for Social Services has in hand. While the proposed new definition might offer certain advantages, it does not seem to me right for the armed forces to move ahead of the civil authorities in this matter; it is proper for us to await the outcome of my right honourable friend's review, when we shall certainly consider very carefully its implications for service law.
Turning to the second amendment, which, I understand, is derived from Scots law, I admit that the proposal might have a certain attraction in child care proceedings. However, service place-of-safety procedures are merely short-term emergency orders which are not dealt with by way of a formal hearing. Since there are no parties to the procedures, there can be no need for the appointment of a safeguarder. Even in Scotland, a safeguarder is only appointed for the children's hearing, not at the initial stage when application is made to a JP or sheriff. This amendment is, I am afraid, wholly inappropriate to service procedures which equate only to this first emergency stage.
I look now at the third amendment. The main points to be made here are that it would be most unlikely that we should ever want to withhold from his parents details of a child's whereabouts under a place-of-safety order. I believe that that is the thrust of the amendment. Nevertheless, there may be occasions, for example, when the child has been subjected to serious abuse by a parent, when we would feel it important to deny the parent access to the child. In such rare cases commanding officers would invariably have administrative

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means at their disposal to select a place of safety under service control that would effectively ensure the exclusion of the parent.
This amendment would not be consistent with either English or Scots civil law, and for these reasons I cannot accept that this is an appropriate matter for legislation at this stage, although I would of course consider any relevant proposals which might emerge from the DHSS review to which I referred just now.
The fourth amendment derives, I think, from a misconception about the type of procedures involved. The sort of provisions envisaged for attendance or representation at hearings and for appeal are of course appropriate where child care proceedings are being considered, and where the child's longer-term future is at stake. But, as I have already explained, service procedures do not deal with care proceedings; they deal only with temporary emergency place-of-safety orders which may only be made overseas.
The noble Lord's amendment goes far beyond the equivalent provisions affecting the initial granting of a place-of-safety order in either England or Scotland so far as attendance, representation and appeal by parents at the initial stage of place-of-safety orders are concerned. However, I should stress that service law in fact already goes further than either English or Scots law in providing that parents have a right wherever practicable to make representations to the commanding officer before the order is made. We do not think it would be right to go any further; to do so would be to risk delaying proceedings while possibly leaving a child in a dangerous situation. This, clearly, would not be acceptable.
I turn now to the fifth and final amendment. Again, I stress that I fear the noble Lord, Lord Graham, has misunderstood the type of procedures involved. Service place-of-safety orders do not involve written applications and formal hearings. They are designed to react swiftly to events where a child is in immediate danger. The noble Lord's proposals for written applications again go far beyond anything in English child care law or indeed in Scots law so far as the initial application to a JP or sheriff is concerned. Our principal objection to this proposal is that it would cause unacceptable delay in removing a child from a source of danger. Of course, where the child is transferred back to the UK and further care proceedings are instituted by the local authorities, the services make arrangements to provide all the necessary supporting evidence and documentation to the UK courts.
I hope and believe that I have said enough to persuade the noble Lord that it would not be right to proceed with these amendments.
Lord Graham of Edmonton: I am grateful to the Minister because, as he points out, the procedure in another place was known to me and, on reflection, perhaps one ought to have left it at that. But I took the view, that, having read the proceedings of the Select Committee, I wanted to take part, to raise matters and to have the assurances which the Minister has given. There are people, and certainly organisations, outside this place who despite what has happened in another place seek to get support for their point of view by
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writing to Members of this House. So we are under an obligation in that respect.
I am most grateful to the Minister for having taken the trouble and care to assure not just those outside but those inside your Lordships' Committee who are, sadly, faced with terrible stories about ways in which due to defects in bureaucracy and defects in the law, the victims are not people like ourselves who can look after themselves, not even adults, but children. As my friend Dr. Norman Godman said, one Jasmine Beckford is one too many.
I am grateful to the Minister. In the light of what he has said, particularly in regard to what action he and his colleagues may take when the report from the DHSS appears, if there is some merit in some of the recommendations I feel sure he will not hesitate to come to the House. In those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10, 11, 12 and 13 not moved.]
Clause 13 agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 14:
After Clause 13, insert the following new clause:
("Report to Parliament on proposals for war time emergency.
.—(1) After section 175 of the Army Act 1955, there shall be inserted the following new section—
"175A. It shall be the duty of the Secretary of State to lay before each House of Parliament from time to time a report on any proposals by him with respect to measures designed to determine the relationship between the army and the civilian population in a transitional period which is expected to lead to an outbreak of war."
(2) After section 175 of the Air Force Act 1955, there shall be inserted the following new Clause—
"175A. It shall be the duty of the Secretary of State to lay before each House of Parliament from time to time a report on any proposals by him with respect to measures designed to determine the relationship between the air force and the civilian population in a transitional period which is expected to lead to an outbreak of war."
(3) After section 131 of the Naval Discipline Act 1957, there shall be inserted the following new Clause—
"131A. It shall be the duty of the Secretary of State to lay before each House of Parliament from time to time a report on any proposals by him with respect to measures designed to determine the relationship between the navy and the civilian population in a transitional period which is expected to lead to an outbreak of war." ")
The noble Lord said: The rubric to this clause refers to a report to Parliament on proposals for war time emergency. Perhaps I may ask, the Committee to look at what was said in the Select Committee on the Armed Forces. This is Mr. Kevin McNamara speaking at page xxiv of the Special Report:
"With regard to possible Emergency Powers for the Armed Forces in a transitional period leading to a possible outbreak of war, the existence of such draft legislation has not been denied; indeed it would be remiss of any Government not to have prepared for such a contingency, however, remote. Long before the circumstances have arisen which would lead to such powers being implemented, Parliament should have an opportunity to examine the proposed primary and secondary legislation in order to be satisfied that a correct balance is struck between the individual's rights and liberties and the needs of the Armed Forces to carry out the tasks assigned to them in such an emergency. In the heightening tension and the pressures of a period leading up to the possible outbreak of another world war, the ability of Parliament carefully and rationally to examine such legislation would be curtailed. It was to protect the citizen from the arbitrary use of powers by the Forces of the Crown

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that the eventually leading to the formation of this Committee were established. It is worthy of note that many of our NATO allies already have such legislation on their statute books.".
My attention has been drawn to an item in the Observer yesterday. I am sure the Minister's advisers will have drawn his attention to it as well, because on page 6 of the paper we see the headline,
"BBC war memo censored by MoD".
That may not be an unusual occurrence. It says,
"The Ministry of Defence has taken steps to suppress evidence of a secret agreement between the Government and the BBC on dealing with news in times of national crisis.".
If indeed such an agreement is made, I should have thought that Parliament should have an opportunity of discussing the matter. It goes on:
"One of the authors of the study, Derrick Mercer, former editor of 'Channel Four News', has been shown an internal MoD memo written in April 1984 and marked 'Restricted'. It revealed that there are 'formal understandings with the BBC Board that in times of crisis it would act responsibly and consult fully with the Government.'
"The implication is that the BBC would co-operate with the Government in the way it handles news, not just in times of nuclear war, but also during periods of tension, perhaps leading up to war. The BBC has always maintained that it is independent from the Government and this is the first time the existence of such an agreement has been revealed."
My amendment is saying that of course the precise details of any such agreement may very well need to be concluded in the utmost secrecy, but surely at some stage this Chamber ought to be made aware in general of the kinds of arrangements which are likely to be made in the event of an emergency.
What we have got, particularly considering the devastating swiftness with which tension becomes war, is a situation where Parliament and this Chamber are bypassed and take no part in a discussion of the details. We may well be told of the major decisions. It is all very well the Minister signifying that this is perhaps not a matter of the utmost importance. It may not be to him or to the MoD at this moment; but the consequences of not being fully aware of what is entailed could well be crucial to those who are affected.
For instance, what is to happen to the civilians who live around the bases? What powers will suddenly be revealed as being in the hands of either a visiting power or even in the hands of our standing forces? How is the environment going to be affected, with the roads and so on, and what will happen in regard to the compulsory acquisition of property? It is an area in which we can either shrug our shoulders and say that we do not need to be consulted or, like myself, not speaking as a parliamentarian, say that we are entitled at least to be told by the Government what kind of arrangements they are going to make. That is the basis on which I move this amendment. I beg to move.
6.45 p.m.
Lord Harmar-Nicholls: I must say that I have not followed the proceedings of the Committee on this point and I have only just come into the Chamber. I have such a respect for the noble Lord, Lord Graham—solid, reliable—but I must say I have never heard a more ridiculous speech than the one he has just made. I mean that. If in a time of crisis we would not expect the BBC to act responsibly (which is what he said) whether or not their actions are based on any
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agreement, and if the BBC (whether implied or on the basis of a document) will not behave responsibly at a time of crisis, then it is time we thought about closing down the BBC. But of course we know that the BBC will do that. Whether or not there is an agreement in general or specific terms I do not know, but if there is, I would not expect it to be blazoned in the headlines.
If we are in a time of crisis—and that is what the whole thing presupposes, when we think about it—there are dangers around and we do not start to advertise in headlines what we are going to do in order to protect our own interests, and those of our country. I do not know anything about this Bill apart from the small scraps that I heard just now. I certainly have not studied this amendment, and I am forming my words purely on the speech which the noble Lord has made in support of his amendment. I think it is quite ridiculous and I should like to feel that we are not going to spend any more time going down that particular road.
Lord Trefgarne: My trouble is that, listening to the speech of the noble Lord, Lord Graham, I could not quite make out to what part of the Long Title his speech referred. Then, turning up the Standing Orders with the help of the Clerk, I find that amendments must be relevant to the subject matter of the Bill and to the clause in respect of which they are proposed. It further says that they must not be inconsistent with the previous decision of the Committee on the same question.
I think the noble Lord's amendment fails on almost all of those counts. He has raised a matter which falls quite outside the scope of this Bill and quite outside the Long Title. I do not really think that in the circumstances I am supposed to reply to it; but if the noble Lord wishes to table a question on the matter, I shall be happy to deal with it.
Lord Graham of Edmonton: The Minister confirms what I feared—that is I was chancing my arm. However, the Table having accepted the amendment and not, as with the earlier amendment, Amendment No. 1, having advised me that it was out of order, I felt it was not unreasonble. The Minister has said that the substance is something on which he is at least prepared to give an answer if I put the matter to him in another way. Of course, I do not propose to press this amendment. However, may I say to the noble Lord, Lord Harmar-Nicholls, that we have had a very useful period of almost four hours really on a matter which is crucial: that is, how our armed forces are going to be guided by a code of discipline which affects not only themselves and their families.
The gravamen of this amendment is that when an emergency occurs it is then too late for this Chamber to debate the governing powers for that emergency. I take the view that this matter is not out of court, although it may be out of the Long Title, in discussing in advance of an emergency the kind of powers which we feel, as a community and as a country, that we want to take. I have listened to what the Minister is mumbling and I deciper it in the most kindly of spirits. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
Clause 14 agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 15:
After Clause 14, insert the following new clause:
("Social Inquiry Reports
. For any case brought before a court martial or a standing civilian court, the court shall have power to call for a social inquiry report to be made where it is considered that to do so would assist the court.")
The noble Lord said: This amendment is concerned with social inquiry reports and I ought not to delay the Committee long. What we are seeking to ensure is that whenever a court martial or a Standing Civilian Court deals with matters on which a social inquiry report would be helpful, just as in other courts such a report is seen to be helpful, it ought to be made available. We are trying to put a court martial on all-fours with a civilian court. We are not saying that there should be a statutory duty. What we are saying is that it ought to be available. Even when a formal social inquiry report is not provided full information as to an offender's character, background and circumstances must already be given to the court, and we are asking the Minister to say whether he considers that a court martial should have power to call for a social inquiry report. I beg to move.
Lord Trefgarne: As the noble Lord has said, his amendment seeks to empower all courts martial and Standing Civilian Courts to call for social inquiry reports to be made. Although he has not included in his proposed clause a definition of the phrase "social inquiry report", I assume he means a report, prepared by a social worker, containing all relevant personal information on an offender to enable the court to decide upon the most appropriate sentence, taking into account the individual's circumstances.
As a result of a recommendation made by the Select Committee of another place which examined the 1981 Bill, we have looked carefully at the sort of information made available to a service court. The Navy already had a system of providing full social inquiry reports on all offenders where this was considered desirable; these reports were provided by the qualified social workers of the naval personal family services. This was possible because of the much smaller numbers of Royal Navy courts martial.
We therefore concentrated on the Army and Royal Air Force, where a rule of procedure laid out the type of personal information which was required to be presented to a court martial. Administrative guidelines have now been introduced which considerably strengthen and broaden the range of this information, so that it now covers family background, finances, education and other relevant circumstances. This information is now routinely provided on all offenders appearing before a court martial. Similar information is also required by a Standing Civilian Court.
We considered further the case of young offenders, where the Select Committee of another place had been particularly concerned about the provision of full social inquiry reports. For such reports we are dependent on the qualified social workers of SSAFA, and in Germany the senior probation officer. Their resources are limited and they do not necessarily extend to all areas where servicemen are currently
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stationed. For that reason we introduced instead a scheme whereby social inquiry reports will be produced wherever practicable on all young servicemen appearing before a court martial on a serious offence. Such reports may also be provided in other appropriate cases. They will further be provided in similar circumstances on all young civilian offenders appearing before a court martial or Standing Civilian Court. This scheme has now been in place for over a year and appears to be working very well.
I hope the Committee will agree, therefore, that within the constraints of available SSAFA support we now operate a system which ensures that full information on every accused is available to service courts with additional formal social inquiry reports on young offenders charged with serious offences. Because of the constraints I think this is as far as we can realistically go, but I should stress that if for any reason a service court is not satisfied with the information available to it on an offender's background, it may call for further details to be provided and it may adjourn while these are prepared. I can assure the Committee that the duty to provide information on all offenders is taken very seriously indeed. I hope that this information will persuade the noble Lord, Lord Graham, not to press his amendment.
Lord Graham of Edmonton: It has persuaded me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 16:
After Clause 14, insert the following new clause:
("Review and Report to Parliament on rules governing membership of trade unions and other bodies.
.—(1) After section 7 of the 1955 Acts and section 131 of the 1957 Act there shall be inserted the following new section—
" .—It shall be a duty of the Secretary of State to make a periodic review of and lay a report before each House of Parliament on the rules governing trade union membership or membership of a professional body by those to whom this Act applies, and the Secretary of State shall take into consideration the practices in this regard of other member countries of the North Atlantic Treaty Organisation." ").
The noble Lord said: This amendment deals with a review and report to Parliament on rules governing membership of trade unions and other bodies. Those who have read the report will be aware that there were some interesting exchanges in the Select Committee. The noble Lord, Lord Mayhew, drew attention on Second Reading to some discussion taking place because I then failed to make a direct reference to the possibility of an amendment along these lines, although I gave notice of substantially all of the other amendments. I am not privy to any agitation, call or concern by the armed services that they want a trade union, but this is the only peg this Chamber and the other place have on which to raise issues. I am only asking the Minister to make a periodic review and to lay a report before each House of Parliament on the rules governing trade union membership.
Assiduous readers of the report will see that the first question to be answered is: is it permissible to be a member of a trade union while a member of the armed services? The answer is, yes; there is no proscription. There is then the question of how active one wants to

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be and what is one stopped from doing? In the case of a serviceman near the end of his service, to what extent are trade unions given an opportunity not necessarily of canvassing for members, but of making their presence known? If one is in the catering corps, the Union of Shop, Distributive and Allied Workers, the General and Municipal Workers, or some other union may be concerned. If one is a carpenter, the Amalgamated Society of Woodworkers may be concerned. If one is an engineer, the AEU may be concerned. I think it is no longer the AUEW; the "W" has gone. One gives access.
Let us look at the experience in other countries. We were told by the MoD in a supplementary annex that Belgium, Denmark, the Federal Republic of Germany, Luxembourg, the Netherlands and Norway have established trade unions. In the case of Belgium there are three unions, one for regular officers, one for conscripted officers and another for NCOs and other ranks. In the Federal Republic of Germany all members of the armed forces are permitted to join a trade union, and the majority are members of the DBV. In the Netherlands officers, NCOs and other ranks have separate associations. I am simply inviting the Minister to tell the Committee whether he thinks it is a good idea that a report should be laid every five years simply to provide each House with an opportunity to discuss trade union membership in the armed forces. I beg to move.
Lord Mayhew: I have a few doubts about the amendment of the noble Lord, Lord Graham. It is true that members of the armed forces can join unions as it is, and they can pay the political levy as it is. This amendment is innocently moved to the effect that the Government should give a report on the state of play, but there is a very strong political implication in the amendment that the Government should also change the rules and we have been told about other countries where the rules are different.
I am doubtful whether the rules should be changed. I doubt very much whether there is any demand—indeed, the noble Lord, Lord Graham, conceded this point—for change from within the armed services. Therefore, one is bound to ask whether this amendment is moved on behalf of the armed services or on behalf of the trade unions, though any suspicions of this kind must be carefully kept in check. Nevertheless, the only meaning behind this amendment must be to facilitate the unionisation of the armed forces. This can be the only reason for it. I doubt whether this is called for or appropriate. After all, the other armed forces to which the noble Lord, Graham, referred, are all conscripted armed forces. There is a much better case for a conscript citizens' army to be highly unionised than is the case for the much smaller highly professional forces that we have in this country. It would be most inappropriate to have a campaign to unionise those forces.
When I listened to the noble Lord, Lord Graham, moving in a most charming manner one amendment after another this afternoon, I had a general feeling that he was envisaging a large citizen's army, highly unionised, egalitarian and gay. This is the sensation that one had when listening to him. Of course, we
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know the noble Lord, Lord Graham. He has made many contributions in the field of defence. We know his genuine dedication to the armed forces and that this is a false impression. Nevertheless, I think the Committee should not pass this amendment. I see no call either on behalf of the armed services or for the good defence of the country for unionising the British services.
7 p.m.
Lord Trefgarne: We are approaching the end of four hours' consideration of this Committee stage, and I know there is other business to follow. I hope the noble Lord will therefore forgive me if I do not speak at any great length—
Lord Ponsonby of Shulbrede: Less injury time for the Statement.
Lord Trefgarne: —on the amendment that he has now proposed. But, needless to say, I share the view of the noble Lord, Lord Mayhew, that this is not an appropriate amendment and I hope that the noble Lord will not seek to press it.
The argument for some form of trade union in the armed forces has been deployed and dismissed on a number of occasions. Perhaps the most important aspect of that argument is the need to ensure that the armed forces do not become politicised and maintain their party political neutrality. That is something which they highly prize and is crucial to the effective discharge of their role.
The noble Lord's amendment seeks to impose on my right honourable friend the Secretary of State a duty periodically to review the Government's policy on these matters and to report to the House. I do not consider that such a thing would be a matter for legislation. Our policy on the subject is of course reconsidered from time to time in the same way as my department reviews a whole range of matters relating to service welfare and discipline. However, there are ample opportunities for noble Lords who are interested to discover whether any change of policy is planned or has been decided upon, either by putting down Questions or during the annual debates on the Service Discipline Continuation Order; or, for that matter, during the consideration of Bills such as this. I therefore consider that specific legislation such as is proposed by the noble Lord would be superfluous, and at this late hour I hope he will see fit to withdraw it.
Lord Graham of Edmonton: I intend to withdraw the amendment. I am disappointed by the dismissive nature of the Minister's comments, and also by those of the noble Lord, Lord Mayhew. If I gave other than the impression that I believe it would be a good thing for trade unions, I am guilty of misleading the Committee. I never said that there is a demand, either from the trade union movement or from the armed forces. When one looks at the experience of other countries one sees invariably that there is a no-strike clause. A range of things is contained in the arrangements which are made. One of the matters that has disappointed me in reading this report is the extent to which the MoD believes there is very little it can learn from experience elsewhere or be told by anybody else.

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That is wrong. The attitude that the MoD has it just about right permeates all these pages.
We have debated some very important issues. I should like to have seen the Ministry and the Minister prepared at least to examine the experience of other countries which are as democratic as ours. I take the point about conscription and all-volunteer forces (there are variations) and about the difference between the armed services and a great factory. I have been very disappointed by some of the responses from the Minister, and in particular by what I detect as the attitude of the MoD.
However, not only is the night young but the stages of the debate have just begun. We have other stages at which amendments can be put down, not only in the light of what the Minister has said but, more importantly, in the light of what the Minister has not said. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
Remaining clauses and schedules agreed to.
House resumed: Bill reported without amendment.
Lord Trefgarne: My Lords, I am not sure what has been agreed for future stages of this Bill, but since no amendments have been agreed to today it would be open to me to move now, That this Report be now received. I should be grateful for the views of the noble Lord.
Lord Graham of Edmonton: My Lords, I certainly would not wish to agree with that, for two reasons. The first is a matter to which I did not refer directly—the report by Mr. Calcutt on the methods of interrogation in respect of airmen in Cyprus. I do not refer to the detail of the case. The Minister knows how disappointed many people are that that report was not available before the concluding stages of the Bill in another place. We were not led to believe—that is right—but we hoped that we would have it before today. Certainly, in the light of that report there may be grounds on which we would put forward amendments.
Secondly, the noble Baroness, Lady Faithfull, and others have said that not only will they want to look at this report but they will want to take guidance from those outside the House who may well have valuable points to make. I certainly would resist, if need be by a vote, a Motion to proceed to Report stage.

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

Business
The Earl of Swinton: My Lords, I beg to move that the Committee stage of the Gas Bill be postponed until after the Second Readings of the Corneal Tissue and British Shipbuilders (Borrowing Powers) Bills.
Moved Accordingly, and, on Question, Motion agreed to.

Corneal Tissue Bill
7.8 p.m.
Lord Cullen of Ashbourne: My Lords, I beg to move that this Bill be now read a second time.
Fortunately for people on the waiting list for eye transplants, my honourable friend Mr. John Hannam was lucky in the ballot in another place for Private Members' Bills, and his Corneal Tissue Bill had a smooth passage with the support of Her Majesty's Government and the other parties. He has asked me to sponsor his Bill in your Lordships' House, and this I gladly do.
The Bill amends the Human Tissue Act 1961 and its Long Title. That Act requires that the removal of organs from bodies for medical purposes can be carried out only by fully registered medical practitioners. This has been a perfectly proper requirement and needs to continue for organs other than eyes or parts of eyes. Nowadays, however, a comparatively simple operation for the removal of eyes can be carried out, as it is in other countries, by eye technicians suitably trained and supervised. The whole purpose of this Bill is to bring that about.
The limited number of ophthalmic surgeons are under great pressure of work and cannot be available by day and by night to interview relatives to get their permission and then remove the eye tissue. This is the reason why hundreds of people are on waiting lists for eye transplants. By adding trained and supervised technicians to ophthalmic surgeons it would be possible to set up eye banks similar to those in the United States and Europe. In this country we currently perform 1,500 to 2,000 grafts annually. In the United States, in 1984, 24,000 corneal removals were carried out, 98 per cent, by eye technicians.
I must stress that the Bill is concerned only with the removal of eye tissue from bodies. The actual graft, a highly skilled and delicate operation, would still be performed only by an ophthalmic surgeon. The cornea is the circular and transparent lens on the front of the eye and is 11 by 13 millimetres in size. When disease, degeneration or injury causes a loss of transparency of the cornea, light fails to get through to the retina and blindness occurs. The operation is to transplant a graft of donor tissue of some 7 by 8 millimetres in size into a recipient hole in the eye.
This Bill enjoys the support of ophthalmic surgeons, the National Health Service, RNIB and Her Majesty's Government. Even more important is the support of hundreds of people facing the prospect of blindness and desperately awaiting transplants. I hope and trust that the House will also support it.
If the Bill is enacted and more corneal tissue is made available, it will be possible to set up eye banks. It is to be hoped that new procedures will make it possible to store corneas for quite a long time. Thus ophthalmic surgeons may soon be able to choose from a well-stocked eye bank corneal tissue suitable for each patient. They are increasingly preferring to use tissue-matched corneas, and this obviously means that there needs to be a greater range, and therefore supply, of donor material available.
There is little that I need to say about the amendments to be moved in Committee. The first

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four are simply drafting amendments. Amendment No. 5, by removing the word "fully" opens the way for Amendment No. 6, which ensures that the person who is instructed to remove the eyes, or parts of eyes, will be a properly trained technician, employed either in the health service or at a hospital ophthalmic unit. Amendment No. 7 explains the separate definitions for the English, Welsh and Scottish health authorities. In the case of Northern Ireland, which country wishes to implement this legislation, the amendment will need to be made by Order in Council. Amendment No. 8 is to remedy a mistake in the Long Title of the printed Bill and brings it into line with the Human Tissue Act 1961.
Finally, I should like to pay a tribute to the Iris Fund and in particular to its director, Mrs. Susanne Burr. The Iris Fund, which, with the support of the DHSS and the South-West Regional Health Authority, in 1983 established the United Kingdom Corneal Transplant Service in Bristol, is promoting this change in legislation—a change which I believe will be of incalculable benefit to very many people in the future. I therefore commend the Bill to your Lordships. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Cullen of Ashbourne.)
7.15 p.m.
Lord Ennals: My Lords, I first congratulate the noble Lord, Lord Cullen, upon introducing this very valuable Bill and echo his tribute to the Iris Fund. I think it shows the role that a voluntary organisation, with dedicated commitment, can play by bringing forward a Bill which we laymen would not have thought of. I should like to add, as the noble Lord, Lord Cullen did, my thanks to Mr. John Hannam, of another place, for having introduced the Bill in the first place.
As the noble Lord, Lord Cullen, said, there are over 1,500 corneal transplant operations in Britain every year. In 1985 the UK Corneal Transplant Service handled 529 corneas, with some 4,500 corneal transplants having been performed nationally since the inception of the UK Corneal Transplant Service in the autumn of 1983. Sadly, there is still a long queue of patients on the waiting list and organ culture may well provide the answer.
Over the whole country, some 4,000 eye grafts have taken place during the past two years, in hospitals as far apart as Bristol to Edinburgh. As many as 1,500 extra transplants a year could take place if this Bill is enacted. The life of eye tissue is very short—a matter of 14 hours from removal to transplantation—so the need for an efficient system is obvious. At present the Human Tissue Act 1961 requires that corneal tissues be removed for the purpose of corneal grafting only by registered medical practitioners. This makes very heavy demands on the valuable and limited time of ophthalmic surgeons. In practice it means they have considerable difficulty in removing corneal tissue from donors who happen to die elsewhere than in hospitals that have an ophthalmic surgery department. In turn, this means that in most departments of ophthalmic surgery corneal grafting is still an emergency
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procedure undertaken only as and when the right sort of corneal tissue becomes available for a particular patient. This often results in the wasteful use of hospital beds and theatre time, heavy additional demands on surgeons and theatre nurses, and uncertainty for patients. If more corneal tissue became available, corneal grafting could become a scheduled procedure and much would be gained.
As the noble Lord, Lord Cullen said, the purpose of this Bill is to enable this task to be done not necessarily by ophthalmic surgeons but by suitably trained technicians. They would be able to operate more quickly and while it would not save lives it might save the eyesight of very many people who at present are waiting, and have been waiting for a long time. We perhaps talk much more about other transplantable organs such as kidneys, hearts and livers but there are some differences. First, in the case of corneal tissue removing, it is a much less complex procedure than for other organs. It does not require the skills of an experienced surgeon. Secondly, the cornea does not deteriorate so quickly. It can safely be removed from a body up to several hours after death.
So far as I can see there are no disadvantages, no unfortunate side effects and no dangers in the Bill now before us. I warmly welcome it and I hope that it will have a rapid and harmonious progress through your Lordships' House.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, St. Cecilia, the patron saint of music and of the blind is said—I beg your pardon!
7.20 p.m.
Lord Rugby: My Lords, I want to congratulate the noble Lord, Lord Cullen of Ashbourne, on introducing this Bill. Am I allowed to make a statement at this point? I thought I was entitled to do so.
Baroness Hooper: My Lords, I think that it is normal practice for noble Lords to inform the House and put their names on the speakers' list so that we know who intends to speak, but there is no reason why the noble Lord should not speak.
Lord Rugby: My Lords, all I have to say is that I feel it is important to look carefully at the wording of the Bill, especially at the word "safeguards". It may so happen that eyes are taken for commercial purposes by fringe medical people and so they could be turned to a commercial purpose. That is all I have to say at the moment. I think that we shall have to wait until the Report stage in order to make quite sure that the correct people will obtain these eyes for medical education and experimentation.
7.22 p.m.
Baroness Trumpington: My Lords, I shall start again. St. Cecilia, the patron saint of music and of the blind, is said to have been given new eyes after she had plucked out her own. The first recorded ophthalmic surgery for the removal of cataracts took place in ancient Egypt. The first successful corneal graft was

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performed in 1886—which was 100 years ago—and the first corneal graft in this country was in 1925.
These are surprising facts, and I am glad to say we have come a long way since then. Today it gives me great pleasure to express the Government's gratitude to my noble friend Lord Cullen of Ashbourne for introducing this important Bill. My noble friend has already explained the purpose of the Bill, and I am glad to record the Government's full support for a measure that will have the effect of facilitating what is now a well-established and accepted procedure, which is very successful in restoring sight to people who are in danger of becoming blind.
Under the provisions of the Human Tissue Act 1961 organs may be removed from a body after death for the purposes of transplantation only by a registered medical practitioner. In the case of most transplantable organs, such as kidneys, hearts, livers and pancreases, this restriction is necessary and it is our intention that it should remain in force. But the removal of corneal tissue is different from the removal of the other organs that I have mentioned in two important respects. The first is that the removal of corneas—as the noble Lord, Lord Ennals, has already mentioned—is a much simpler procedure that does not require the skills of an experienced surgeon; and the other is that corneal tissue is suitable for transplantation even when it is removed several hours after death.
At present the requirement that corneas be removed only by a qualified doctor is a serious constraint on the supply of corneal tissue which is urgently needed for corneal grafting. My noble friend Lord Cullen has referred to the heavy demands on the valuable and limited time of ophthalmic surgeons, and in practice it means that with rare exceptions corneal tissue is removed only from donors who die in hospitals that have ophthalmic surgery departments. This, in turn, means that a high proportion of corneal grafts are performed as emergency procedures as and when the right sort of tissue becomes available, making unnecessary demands on hospital resources and creating uncertainty for patients. If the constraints on the procurement of corneal tissue were to be eased, and the supply increased, much would be gained.
The number of people who die in circumstances where corneal donation is practicable is far in excess of the number of people who die in circumstances that enable them to become potential donors of other organs. Corneal tissue suitable for grafting can be taken from patients in older age groups, and the longer permissible period between death and the removal of the tissue means that tissue can be taken from donors who die in hospital wards and even at home. But under the present requirements it is not possible to profit from these advantages, since the constraining factor is the surgeon's time. The potential benefits will be realised only if more people are permitted to remove corneal tissue, and the comparative simplicity of the procedure means that suitably trained health service staff who are not doctors are capable of doing so. The effect of the Bill will be to permit this.
Yet it would be wrong to allow the removal of corneas from bodies unless the procedure were undertaken competently and sensitively; so certain
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safeguards are needed. The safeguards need to be flexible enough to ensure that the procurement of corneal tissue is not unnecessarily constrained and yet rigid enough to ensure that due regard is given to the safety of patients and the sensitivities of relatives. The Bill provides four safeguards to achieve this balance.
The first is that non-medical staff may remove corneal tissue only if they are acting under a doctor's instructions. This means that non-medical staff may go to distant hospitals and to people's homes to remove corneal tissue, but only if they are acting on the instructions of a doctor; and the doctor would, of course, be professionally accountable for any instructions he gave.
The second safeguard is that the doctor who gives the instructions must satisfy himself that the staff he instructs are suitably qualified and trained. For obvious reasons there are at the moment no recognised qualifications or training courses in this field, and we think that the most appropriate safeguard for ensuring their competence is that responsibility should be laid upon the doctor. I am pleased to say that the medical profession is prepared to accept this. Your Lordships will be interested to know that the United Kingdom Transplant Service in Bristol is preparing a training course on the procurement of corneal tissue which will be run in the event of this Bill becoming law. We have every confidence in the UKTS, and its training course could make an important contribution in getting the new arrangements off the ground.
The third safeguard is that the people who will be permitted to remove corneal tissue must be employees of a health authority. As employees these people will be subject to whatever procedures their employing health authority considers necessary, and this provision will ensure that the procurement of corneal tissue does not become an entrepreneurial activity undertaken outside health authority control. I hope that that meets the point of the noble Lord, Lord Rugby. I should add that we do not see this restriction as presenting an unreasonable constraint on private hospitals. Private hospitals will not be prevented from undertaking corneal grafts; they will be able to obtain the necessary tissue either through making arrangements with a health authority or through their doctors procuring their own corneal tissue as now.
The fourth safeguard is that certification of death will remain very firmly a prerogative of the medical profession. It would be totally wrong for corneal tissue to be removed before death had been properly certified by a doctor, but the doctor who certifies death will not under this provision necessarily have to be the same doctor as the one who gives the instructions for the tissue to be removed.
So I commend the Corneal Tissue Bill to your Lordships' House. Corneal grafting is a procedure that can safeguard or restore people's sight, but it can be performed only if an adequate supply of tissue is available. As things stand the last confirmed number of corneal grafts performed in the UK annually was in the region of 1,200. New techniques are being developed which enable corneal tissue to be successfully stored, but the eye bank to which my noble friend Lord Cullen referred will need to be well stocked, and this will require an increase in supply. The Bill will

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significantly ease the present constraints on supply, and do so in a way that will ensure that the needs of donors and their relatives are properly safeguarded. So patients will benefit, and the National Health Service as a whole will benefit as demands on staff time are reduced and resources allocated more efficiently.
I have been told that two of the sponsors of this Bill in another place, the honourable Members for Richmond and Barnes and Weston-Super-Mare, have had corneal grafts. Their personal experiences may well be shared by Members of your Lordships' House.
In congratulating the noble Lord, Lord Cullen of Ashbourne, I should also like to thank my honourable friend the Member for Exeter who introduced the Bill in another place, and to join with both my noble friend Lord Cullen and the noble Lord, Lord Ennals, in congratulating Miss Susanna Burr of the Iris Fund who did so much of the groundwork in preparing the way. I can assure your Lordships that the Bill has the Government's unqualified support.
Lord Cullen of Ashbourne: My Lords, I am extremely grateful both to the noble Lord, Lord Ennals, and to my noble friend Lady Trumpington for their strong support for the Bill. I am particularly grateful for a lot of additional information that my noble friend gave us about the subject, on which I am by no means an expert. What I hope also is that the noble Lord, Lord Rugby, will have been pleased to hear about the various safeguards that my noble friend mentioned and that as a result of that the Bill may perhaps not be committed and will have a smooth passage through the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

British Shipbuilders (Borrowing Powers) Bill
7.30 p.m.
Lord Lucas of Chilworth: My Lords, I beg to move that this Bill now be read a second time.
This is a very short, technical Bill containing only one operative clause. It is nevertheless very important because it allows British Shipbuilders to increase borrowing limits. British Shipbuilders has a present borrowing limit of £1,200 million, against which it has already borrowed some £1,170 million. The purpose of the Bill is to raise the borrowing limit to £1,300 million with provision to increase the limit further to £1,400 million, subject to affirmative resolution in another place.
The increase in the borrowing limit is needed now because British Shipbuilders' borrowing will approach the £1,200 million limit in the summer. British Shipbuilders can borrow from the Government in the form of public dividend capital and loans and it can also borrow from the market. Borrowing to date is almost entirely in the form of public dividend capital—£1,122 million in that form has been paid to date. Finance is also provided to British Shipbuilders in the form of grants from the intervention fund in
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support of ship prices. I should make it clear, however, that the borrowing limit does not apply to intervention fund grants or to the shipbuilders' redundancy payments scheme.
I think that it may be helpful in commending the Bill to your Lordships if I say something about the current position. The Bill comes at a time when orders for ships are few and world capacity greatly exceeds the level of demand. All the British Shipbuilders yards currently have work in progress. This includes a P & O ferry at Govan, four container ships for Cuba at Smith's Dock, Middlesbrough, and two advanced bulk carriers for a German owner at Austin and Pickersgill. On 25th April the "Stena Seawell", a diving support vessel, was named by my right honourable friend the Prime Minister at Sunderland. This yard has a second diving support vessel, as well as a crane barge for ITM. In the smaller yards, Ferguson Ailsa and Appledore, there are a number of small ships under construction or on order.
All this work is due to be completed by the end of the financial year. Against a target in 1985–86 of 200,000 compensated gross tonnes of new orders, British Shipbuilders secured only 23,000 compensated gross tonnes because the orders simply did not materialise. The world market at the end of 1985 amounted to a total of just over 25 million gross tonnes, the lowest level for three years, and this world situation is not forecast to improve for some years yet. To put the decline of the industry in perspective, it is worth remembering that the peak order book of recent times, that of March 1974, stood at 133 million gross tonnes, which is more than five times the present level.
When this Bill was debated in another place, the Members on the Opposition Benches raised points about this country's public purchasing programme both on the defence and on the civil sides. It may help if I repeat some of the comments that my honourable friend made on that occasion. Other things being equal, an influx of early home orders would be a good thing and could alleviate British Shipbuilders' present difficulties. But other things are very definitely not equal.
To take defence requirements first, British Shipbuilders has worked up a commendable marketing initiative on the FSK 20/20. The corporation's proposals have been studied with interest by the Ministry of Defence. However, there can be no presumption that, when a concept such as the FSK 20/20 is actually offered to the MoD, it is necessarily right in specification and timing for the MoD's needs. My honourable friend the Minister of State for Defence Procurement has clearly stated that the Royal Navy has no requirements at present for the vessel. British Shipbuilders is nevertheless actively seeking overseas possibilities. Your Lordships can be assured that the Government will give it every support in its efforts.
British Shipbuilders is facing a lean future. Orders are scarce but not non-existent, and it will have to fight extremely hard for any that it has a chance of securing. This means cutting costs as far as they will go, and that is why British Shipbuilders last week announced very sweeping rationalisation measures.

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I should say something in this context about the government response to the efforts of British Shipbuilders. The Government will be funding the new British Shipbuilders Enterprise Ltd. to an amount of £5 million; £1·5 million of this will be from the Department of Trade and Industry. This was announced by my right honourable friend the Secretary of State for Trade and Industry last week in another place and by my noble friend Lord Young in your Lordships' House.
My right honourable friend and my noble friend here outlined further measures to alleviate the social and regional problem of the North-East, amounting in total to £9 million. These are benefits to aid redundant shipyard workers.
I now want to go on to the support we give to the industry itself. Credit terms for UK shipowners are intended to provide an incentive for those owners to order in this country. The credit terms match those generally available overseas. The question of whether length of credit terms should be increased was covered in the Report of the European Communities Committee on European Maritime Transport Policy. This report was debated in this House on 2nd May. But I should remind your Lordships that the commission does not look at credit terms in isolation; it looks at credit terms and direct supports together. A change in one would almost certainly lead to a counterbalancing change in the other.
As it is, our direct support mechanism—the intervention fund—stands international comparison as one of the most generous world-wide schemes in the context of direct cost subsidy. All British Shipbuilders' orders facing competition from outside the EC are eligible for this support. The rate is 20·5 per cent. of contract price; in effect, 22·5 per cent., taking account of Shipbuilders' relief. These rates can be increased in exceptional circumstances.
The Government are about to begin discussions on the regime of assistance to follow the EC 5th directive. I assure all noble Lords that we shall be working hard in those discussions to obtain the most helpful arrangements possible for the United Kingdom.
For export orders which contribute to development for the country concerned, the Government are prepared to consider the use of the aid and trade provisions. We are now ready to use that form of assistance for a particular order for China which I hope will be thereby secured.
I shall sum up by saying that the Government intend to continue shipbuilding industry support. Since 1979, British Shipbuilders has received £1,481 million indirect support, including £236 million from the Intervention Fund and £178 million in support under the shipbuilders' redundancy payments scheme. I cannot emphasise sufficiently that it is because of our intention to continue supporting the industry that the Bill has been introduced. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Lucas of Chilworth.)
7.41 p.m.
Lord McIntosh of Haringey: My Lords, it is commonplace in politics that the old saying:
"Those whom the Gods wish to destroy they first make mad"
applies more strongly to governments at the end of their credibility than to almost any other public institution. The Government are at the end of their credibility and in their dealings with the shipbuilding industry over recent years, and particularly over the past few weeks, they have gone beyond the edge of credibility.
It is incredible that a Government can announce British Shipbuilders' decisions in one week which virtually destroy the shipbuilding industry and then, a week later, introduce in this House a Bill designed slightly to extend credit for the corpse.
The noble Lord has referred to the excellent terms which the Government make available to shipbuilding. I noted his words carefully. He said that the credit terms matched those generally available overseas and that they provided one of the most generous worldwide schemes. I note that that attitude towards support for British shipbuilding is not shared by all his honourable friends. Mr. John Butcher has expressed considerable disturbance at the general levels of public support of all Western countries for their shipbuilding industries. He described it as a corrosion. It will be interesting to know where, in what is inevitably a difference of view between the noble Lord and his noble friend, the official government position will land.
If it is true that we provide adequate support for British shipbuilding, why should this country, which has virtually the highest level of defence expenditure as a percentage of gross national produce in the Western world, have such a small shipbuilding industry? Why should a country, with the huge maritime business that we still have, be buying so small a proportion of its ships from its domestic shipbuilding and repair market? I understand that the percentages for Germany, Belgium, France and other Western countries are about 90 per cent. to 95 per cent. of home-registered shipping bought from their own shipbuilding industries whereas in this country the figure is more like 40 per cent.
The noble Lord referred to the fact that British shipbuilding now accounts for perhaps 1 per cent. of the world market whereas in the 1950s the figure was more like 20 per cent. He has referred to the fact that orders in the current financial year of 23,000 compensated gross tonnes are barely over 10 per cent. of the targets set by British Shipbuilders. If Government support is so generous and is comparable with that of other countries, why is our shipbuilding industry in the state that it is, and why is it that a virtual shut-down of the British shipbuilding industry has now been announced?
If any noble Lord should think that I am speaking for myself in this matter, exactly the same sentiment has been expressed recently by Sir Robert Atkinson, the former chairman of British Shipbuilders, who described the Government's policy as being hell bent on closing the whole industry.

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The cost to this country of abandoning the British shipbuilding industry is immense. It is far more than the jobs directly involved. It can be calculated that indirectly we shall lose three additional jobs in the supply industries and the communities involved for every job that is lost in shipbuilding. The shipbuilding communities have been particularly hard hit by the Government's policies and the decline of manufacturing output in this Government's lifetime.
It is not just a matter of neglect; it is a matter of positive vindictiveness in the Government's policy for our shipbuilding industry. After all, it was this Government who, by privatising the naval yards, removed the possibility of cross-subsidy from profitable Navy contracts, and the staggering of work for all our shipbuilding industry by the timing of naval orders.
Some of those possibilities have gone; some remain. It would still be possible for the Government, by advancing orders for vessels such as fishery protection, ancillary defence or ferries, to make some move towards the replenishment of British order books which is desperately needed before the end of this financial year. In those circumstances, the phrase, "fiddling while Rome burns" is too generous to the Government. The idea that it is an adequate response to the British shipbuilding industry's problems to propose the increase in borrowing powers that have been proposed by the noble Lord in moving the Bill is grotesque. It is cynical to suggest that the Government's economic policies are in any way adequate for the needs of British shipbuilding. Although of course we shall not oppose the Bill, I assure the noble Lord that the defence of the British shipbuilding industry is a major concern for the Opposition. A Labour Government will see to it that the vandalism of the previous years is corrected.
Viscount Hanworth: My Lords, it should be said that at least a part of the condition of the shipbuilding industry is due to the unions, demarcation disputes and inefficient methods of working. The same happened in our docks on the Thames. That should never be repeated in another industry. I hope that the lesson has been learnt, but it never seems to be.
7.48 p.m.
Lord Lucas of Chilworth: My Lords, I was glad to hear from the noble Lord, Lord McIntosh of Haringey, that he does not intend to oppose the Bill. Indeed, that would show a vindictiveness which I do not believe that he personally feels towards this Government, nor do I believe that he can possibly sustain the accusation that the Government are vindictive towards the shipbuilding industry.
I am tempted to ask him, when he suggests that the Labour Government will reverse the position: are they going to conjure orders from the air? He will know equally as well as I that there is a surplus capacity of tonnage in the world today which is over twice the amount of world shipbuilding capacity. The general position which he and I have outlined is no different for this country than it is for any other.
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I appreciate that the noble Lord was abroad when my noble friend Lord Young made the Statement in this House. He will no doubt have read Hansard and taken on board the fact that the Swedish shipbuilding industry, for example, is almost non-existent, and that France, Germany and now Japan are in some decline; and even in Korea our understanding is that there is no further new investment going in.
The noble Lord asked why we received only 23,000 compensated gross tonnes against a target of 200,000. The answer is that in the middle of 1985 the world market collapsed. The total world market was reduced. As a result, we received a consequentially lower share. The Government are not hell bent on abandonment. That is absolutely not so; otherwise, we would not have been in the position of agreeing to the suggestions that British Shipbuilders made to us when they reviewed the position. That the scenarios put before the Government by British Shipbuilders were unpalatable, there is no doubt. Their recommendation, and our acceptance of it, was the least that we could do. To support our concern, we introduced the measures that I have outlined.
The noble Lord opposite asked specifically about the fishery protection vessel for the Scottish Office, and two Scottish ferries. I can tell him that we anticipate a response next month. That is about as far as we could go in bringing forward orders. It is no good suggesting to my honourable friend the Minister of State for Defence Procurement that he brings forward the ordering of vessels for which he has no need. The person who pays at the end of the day is, of course, the taxpayer.
As to the remarks of the noble Viscount, Lord Hanworth, yes, one might perhaps have agreed in part with his comments some years ago. I do not believe for one minute that the position obtains today. There has been a remarkable change in all the shipyards; in fact, across the whole range of industrial affairs. I am going to suggest here and now that it is as a result of measures that this Government have brought in that much of that change has occurred. I do not believe that there is anyone working in a shipyard who still continues demarcation disputes or who does not want to achieve the highest possible quality in the shortest possible time for any vessel ordered from his yard.
The Government wish to see a merchant shipbuilding capacity maintained in this country. But orders have to be won in a fierce international market. I give your Lordships the assurance that where those orders are to be won support will be available from Her Majesty's Government. Part of that support is contained in the Bill. I beg to move.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Gas Bill
7.53 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)
Lord Stoddart of Swindon: My Lords, before the House again resolves itself into Committee, I feel that I must make some comment about the time that we are entering upon this business. I must express my concern and, indeed, displeasure that we should be entering upon this Bill, perhaps the most major and most contentious Bill, at eight o'clock in the evening. Noble Lords opposite will know that we expected to enter upon this Bill at a much earlier hour, certainly not later than four o'clock. I simply cannot understand why the Government decided to put down the Armed Forces Bill in front of the Gas Bill.
The Armed Forces Bill, judged by the discussion that took place on it this afternoon, certainly produced a fair amount of contention. It aroused a great deal of interest, as one can see from the number of noble Lords from all sides who spoke. We have lost a lot of time. I do not know until what hour the Government intend to sit tonight. What is certain is that we have lost nearly a day's debate on the Gas Bill.
What is more—noble Lords will understand what I am talking about—we have lost time during an important period when noble Lords may have wanted to be here to vote. Now, of course, they have made their other arrangements and they may have left the premises. That is unfortunate. From the Opposition point of view, I cannot call it a dirty trick, because I am sure that there was no intention to play a dirty trick on the Opposition. But the Government will understand that the Opposition—I mean the whole Opposition—are discontented over what has gone on in relation to the Gas Bill.
I do not intend to divide on the Motion, That the House do resolve itself into Committee. That would perhaps be a little unreasonable. We can perhaps get a couple of hours, or three hours, on it. I am tempted to have a Division. Nevertheless, I want to be reasonable with the Government. I hope that the Government, during discussions that I hope will take place between the usual channels, will also be reasonable with us.
We are entitled to express the views that I have expressed. I hope that the noble Lord, Lord Belstead, the Deputy Leader of the House, who has heard what I have been saying, will consider the matter seriously and will agree that the Opposition have been injured and that discussion of the Bill has been injured, and that when the time comes he will see that proper discussion regarding additional time for the Committee stage of the Bill will be fruitful.
Lord Belstead: My Lords, I quite understand why the noble Lord, Lord Stoddart of Swindon, has spoken about the late start of the Bill. We, indeed, share his regret that the Bill did not start earlier in the afternoon. It was agreed through the usual channels that a Bill would be taken beforehand. That Bill proved, as the noble Lord rightly said, to have attracted more interest than perhaps we had thought.
I have listened carefully to what the noble Lord has said. One matter with which I do not agree is that starting after dinner means that the Bill has been injured. Some of us are at our best after dinner. Let us
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hope that this will be the case as we again discuss the Bill in Committee.
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD WELLS-PESTELL in the Chair.]
Clause 4 [General duties of Secretary of State and Director]:
The Deputy Chairman of Committees (Lord Wells-Pestell): In calling Amendment No. 47, I should remind your Lordships that the debate upon it was adjourned at the previous sitting pursuant to Standing Order No. 55. Unless, therefore, any noble Lord wishes to continue the debate, I shall now put the Question.
8 p.m.
Lord Bruce of Donington: I regret to inform the Committee that I have, in this instance, to continue the debate on Amendment No. 47 because, of course, it was at a very late hour that the amendment was discussed. Precisely because of that the proceedings were somewhat attenuated, and the amendment did not get a thorough airing. The amendment was:
Page 3, line 28, at end insert—
("( ) to ensure that due account is taken of the operations of British manufacturers and suppliers in the procurement policy relating to plant, equipment and appliances of a public gas supplier and to monitor the buying policies of such suppliers in this regard.").
This is one of the most important amendments to the Bill. It seeks to insert into the statute,
"that due account is taken of the operations of British manufacturers and suppliers in the procurement policy relating to plant, equipment and appliances of a public gas supplier and to monitor the buying policies of such suppliers in this regard".
Supplies and materials bought by British Gas in the year 1984–85—no accounts are yet available for the year 1985–86—amounted in total to about £1 billion. That was spent mainly in the United Kingdom for the purchase of all the supplies—other than gas—that are needed by the British gas industry. A very substantial proportion of the spending of £1 billion per annum accounts for a very large amount of employment in the manufacturing industries of this country. When industries were nationally owned—for example, British Telecom—there was always the assurance, which did not require any legislation, that the utmost effort would be made by the management of British Telecom to get most of its supplies from this country. Indeed, as we were told in the Second Reading debate on the British Telecommunications Bill, some 95 per cent. came from the United Kingdom. It did not need any regulation or statute to accomplish that.
One of the great advantages of a nationalised industry is that those who run it, from the managing or governing director down, know perfectly well that they are answerable to both government and Parliament and, through them, to the country. This therefore makes it very easy for them, without having any legislative constraints placed upon them, to follow policies in the purchasing field which they know are in

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the best interests of British industry, in particular of British manufacturing industry, and through industry to the economy at large. The more people are employed in manufacturing industry—as the noble Lord should know very well by now—the more people are employed in those other industries which supply and serve manufacturing industry. The multiplier factor may be as high as two-and-a-half times. In other words, every time a person in the primary industry becomes unemployed it does not create merely one other unemployed person, but probably two-and-a-half because that is the figure generally accepted by economists as being the multiplier factor. This is therefore a matter of very great importance indeed.
The noble Lord, Lord Brabazon of Tara, when he was taxed with this point—true enough, it was almost one o'clock in the morning—delivered himself of the observation:
"Members of the Committee do not need reminding that one of the cornerstones of the Government's philosophy is to create a sound economic base in this country so that real growth and industrial development can take place"—[Official Report, 8/5/86; col. 948.]
He went on to outline the virtues of competition in this matter. But, as if to clinch the point, having said that even if he accepted the amendment we put forward, which made it obligatory upon the successor company, broadly speaking, to buy wherever possible British manufactures, he concluded by saying:
"Finally, perhaps the main reason that I cannot accept this amendment this evening is that such a specific focus on British products would be contrary to Article 30 of the Treaty of Rome. For the reasons that I have given, I must ask the noble Lord to withdraw his amendment".—[col. 949.]
The noble Lord still has time to reconsider this matter if he wishes. He will agree that in order to shorten our proceedings I gave him notice that I would raise this point so that he could seek specific advice. Article 30 of the Treaty of Rome reads as follows:
"Quantitative restrictions on imports and all measures having equivalent effect shall without prejudice to the following provisions be prohibited between Member States".
Article 31 goes on to enlarge upon that.
The question I have to ask the noble Lord on that point is whether he considers that this amendment, if incorporated into the Bill itself, would amount to a "quantitative restriction". If the noble Lord still thinks it does, I would invite him—and this is one of the reasons I gave him notice; there have been oceans of cases before the European Court—to say whether he has any case law which would back up his contention, because it would be very helpful to us to know.
For the moment, however, I am prepared to accept what the noble Lord has said. If I accept what he has said, I ask the Committee to consider what flows from it. It means that Her Majesty's Government know perfectly well that a publicly-owned industry, without any regulations whatsoever, and in the general interests of the British economy, can buy British. But to put restrictions on a private company means that that company, if it is to pursue its short- and medium-term profit, is bound to buy in the open market.
The noble Lord and the Government knew perfectly well at the time they introduced their privatisation Bill
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that the new privatised company would not follow, or could not be compelled to follow, the policies pursued by the publicly owned undertaking. This exposed once again the hollowness of the whole Bill. The Bill has nothing to do with the prosperity of British Gas. It has nothing to do with the welfare of the consumer or the quality of the services. It is a pure money-raising exercise that the Government want to carry through in order to bribe the electorate prior to the election. The fact that they declined to accept the amendment underlines the whole point. If they wanted to be of assistance to British industry why did they deliberately deprive it of the safeguards it had through the existence of the public corporation and throw it to the winds of a private enterprise company responsible to nobody but its shareholders and not bound in any way to give any preference to British-produced manufactures whether they be pipes, appliances, cookers or whatever?
I still hope that at this stage the Government, if they are completely dedicated, as we are told, to the national interest, as a safeguard to British industry as well as the British public, will see the wisdom of accepting this amendment and showing their good faith. Otherwise, the country will know exactly the truth that lies behind their propaganda claim that the whole thing has been done for increased efficiency and the benefit of the consumer. I beg to move.
Lord Taylor of Gryfe: On these Benches I would like to support the amendment that the noble Lord, Lord Bruce of Donington, has so persuasively moved. We have the example of British Telecom before us, and I think that is not reassuring from the point of view of all of us who are concerned about the survival of British manufacturing industry. No such provision was contained in the British Telecom Bill that this House passed, and before British Telecom was privatised some 95 per cent. of its requirements were taken from British industry. Since then a good deal of its ordering of new supplies has been placed in other countries.
Now, it may be said by the Minister that to discriminate in favour of British manufacturing is a violation of the Treaty of Rome, and the noble Lord, Lord Bruce of Donington, dealt with that point, but surely the Treaty of Rome does not limit the capacity of a British-owned industry to work closely with its suppliers in the development of research and development within our country so that almost automatically it becomes the supppliers when bids are invited. This is the case and was the case in the development of System X in the telecommunications industry with British Telecom and GEC and Plessey, who worked together to ensure that Britain had an excellent piece of plant and was competitive in every way.
Now, if British Gas is going to be set free in the proposals of the Bill before us, I do suggest that it is important to British industry, and particularly for the future of the manufacturing sector, that there should be some guidelines to the company so far as the encouragement of British manufacturing is concerned. The nationalised industries as a whole had something like 90 to 95 per cent. procurement from British

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sources and it would be a serious blow to British manufacturing capacities if we were not to advise in this Bill or lay down a marker to the new board of British Gas as to what Parliament would expect them to do in discharging their responsibilities.
I do not think that any agreement of this kind will necessarily featherbed British industry because there are many competitors in the field of supplies in heavy engineering who are supplying the gas industry. It is not a monopoly situation, so the consumer will not be exploited as a result of such arrangements, but I would seriously ask the Government to look at this question in the light of some recent statements we have had on the state of the economy and the steady deterioration in the position of British manufacturing industry, particularly in the engineering section. I would ask them to lay upon the new company some kind of obligation to pay attention to the national welfare in that regard.
8.15 p.m.
Lord Sanderson of Bowden: This is indeed an important point raised from the Opposition Benches and I do not cavil at the point that it is in the interests of all British industry to buy British as much as possible. I look forward to hearing what the Minister has to say about our commitment to the Treaty of Rome and to seeing whether or not a clause of this sort would be breaking that treaty.
However, I did think that British Gas was already a signatory to the Memorandum of Understanding between the United Kingdom Offshore Operators Association and the Government, under which companies in the United Kingdom sector agree to give British suppliers of goods and services full and fair consideration. I do think we have to be careful where we tread in this matter. If I was a director of a company that made appliances for the UK gas industry and I was intent on increasing my business, I should wish to export. I should know (and I have quite a lot of experience of this in my own neck of the woods in the textile trade) that if we did not export we should not survive. I think it is extremely important, and I understand and sympathise with the view that British Gas should buy British and has bought British in every case where it is possible. Indeed great help and assistance has been given by the "Better buy British" campaign in this country, but I do think we want to look very carefully before we actually say to the British Gas Corporation that we insist, as the amendment seems to imply, that it buys British wherever possible.
Lord Bruce-Gardyne: I very much agree with what my noble friend Lord Sanderson was saying and I want to add that I do find the attitude of the Opposition parties somewhat bizarre. We have heard a great deal during the course of the debates on this Bill about the need to protect the consumer from the dangerous intentions of the British Gas Corporation in the private sector. I must admit that I have always felt, and indeed argued at other stages of this Bill, that the real anxiety is more likely to concern the well-being of the suppliers of British Gas and the shareholders of British Gas than the consumers, for whom Sir Denis Rooke
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seems to believe that he undoubtedly knows best. I find it hard to reconcile the proposition which lies behind this amendment with the protestations we have heard from the Opposition parties about the need to defend the consumer.
The noble Lord, Lord Taylor, told us there were ample suppliers and ample competition to ensure that even if this amendment were accepted the consumer would not lose out. If in fact these suppliers can offer the best terms to British Gas in the interests of the consumer, then they will get the business anyway. The assumption behind this amendment must be and can only be that it is important for the consumer to suffer so that the suppliers from British industry can be given a distorted competitive edge in the business.
I so much agree with my noble friend Lord Sanderson that if we go down this road we are inviting reciprocal treatment in our export markets. I am sure that cannot be wise and I must say I hope very much that, whatever may be the considerations under the Treaty of Rome, my noble friend advises your Lordships to resist this particular amendment.
Lord Brabazon of Tara: I will not repeat all the arguments that I used the other evening in dealing with this amendment. Perhaps I may start by going to Article 30 of the Treaty of Rome, which the noble Lord, Lord Bruce of Donington, particularly focused upon. The noble Lord indeed quoted the article, as follows:
"Quantative restrictions on imports and all measures having equivalent effect [and I would like to highlight those words] shall without prejudice to the following provisions be prohibited between member states."
This amendment would require the Secretary of State and the director to exercise their functions under the Bill in the manner best calculated to ensure that due account is taken of the purchasing policy of public gas suppliers in relation to British manufacturers and suppliers. The clear intention of the proposed duty in the amendment is that the Secretary of State and the director should exercise their functions under the Bill differently in relation to two public gas suppliers, who are otherwise in exactly the same position, by favouring one of those gas suppliers who bought all British goods and disadvantaging the other who purchased a mixture of British, French and German goods. The effect of this would be that public gas suppliers would know that, in order to get favourable treatment from the Secretary of State and the director, they had to favour British goods over the goods offered by manufacturers and suppliers in other member states. The imposition of this duty in the Bill would therefore amount to a measure having equivalent effect to a restriction on imports, which is prohibited by Article 30.
Lord Taylor of Gryfe: I should like to ask how far industry in France is supplied from outside France. I have in mind the telecommunications industry, the gas industry and the nuclear industry.
Lord Brabazon of Tara: I do not have an answer to that, but I do not think that that is really the point. At the moment British Gas has a record of about 90 per cent. being supplied by British suppliers and most of that is won in competition and not just because they are British suppliers. I would go further than that. To answer the point made by my noble friend Lord Sanderson, who spoke about British Gas and offshore procurement, I would point out that British Gas is a party to the memorandum of understanding and the code of practice between the UK Offshore Operators Association and the Government under which companies operating on the United Kingdom continental shelf agree to give British suppliers of goods and services a full and fair opportunity to compete for orders. There is therefore no need for any new provision on offshore procurement in the Bill.
As I said last time, British Gas has an excellent record on this. For instance, as regards the Rough Field, 85 per cent. of the £700 million worth of orders generated were placed with British industry. I am sure that Members of the Committee are aware of the role of the Offshore Supplies Office; but if they are not perhaps I may remind them that the office assists in the promotion of the UK offshore supplies industry both at home and abroad. Procurement for the UK continental shelf is monitored to ensure that UK suppliers are given a full opportunity to tender for and win orders on a competitive basis. Taking the whole of the industry—not just what British Gas have done—this has been extremely successful in that in 1985 the total orders for operators was some £3.42 billion and the UK share was 80 per cent. of that.
Returning to the amendment, the noble Lord, Lord Bruce of Donington, asked me whether I had any case law to support this interpretation of Article 30. The answer is that I do not have any at present, but I am advised that that would certainly be the interpretation of this article if it were to come before the courts. I should have thought that that would be fairly obvious from what I have said.
The noble Lord then went on to talk about the supply of cookers, heaters and other appliances. I must tell him, first, that a vast number of cookers and heaters are not even supplied by British Gas; at the moment they are freely available on the open market as it stands, and quite a number of them are already imported. As has already been mentioned during the Committee stage of this Bill, the noble Lord will be aware that early next year the Department of Trade and Industry is proposing to introduce more stringent safety measures on the import of that type of equipment. However, I do not think that that is relevant to this amendment. As I say, a large number of these appliances are already outside the control of British Gas and are brought from elsewhere.
The noble Lord also seeks to compare the position of the present corporation and the new private sector company. This is not what we are debating. The noble Lord proposes to put a restriction in terms of nationality into the statute. We must object to that, and not to the final decisions of the management of British Gas, which already has an excellent record of
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purchase from British firms, and I see no reason why that should not continue.
My noble friend Lord Bruce-Gardyne quite rightly said that the Bill was about promoting efficiency and good value for the customer. I would refer the Committee to just a little further up the page from where it is suggested that the amendment should be made to the Bill, to Clause 4(2)(b). That states that one of the duties of the director and the Secretary of State is:
"to promote efficiency and economy on the part of persons authorised by or under this Part to supply gas".
I am not quite sure how that would necessarily fit in with the amendment proposed by the noble Lord, Lord Bruce of Donington. I am quite certain that British industry can produce the goods to which the noble Lord referred efficiently and economically. However, let us suppose, for example, that British Gas went out to tender for a piece of equipment, and that that equipment produced by a German or French company was cheaper than that offered by British manufacturers. Where would we stand? Does the director insist on his role in Clause 4(2)(b) to promote efficiency and economy, or does he go to the noble Lord's amendment and say that the equipment must be British?
For all those reasons, and for the same reasons as I gave the other evening, I must reject this amendment and hope that the Committee takes the same decision as it did the other night.
Lord Bruce of Donington: I have listened to the noble Lord. He really cannot have it both ways. The amendment that I have put before the Committee does not say that British products shall be preferred; the noble Lord puts words in my mouth which were not there and they certainly are not in the amendment. The amendment simply says:
"to ensure that due account is taken of the operations of British manufacturers and suppliers in the procurement policy".
That is all that is asked for. The noble Lord assures me that that is already the case. Therefore, what is his objection to the amendment? I invite the noble Lord's acute perception as regards this matter. He must know that the policies of a public corporation, responsible as they are to Ministers, to Parliament and ultimately to the people, are essentially long-term as well as short-term ones. A public corporation is not concerned with short-term profit. It may be concerned, and indeed should be concerned, with efficiency and with giving the customer the best possible value. There can be no complaint about British Gas as a public corporation on that account.
One thing that the Government have not been able to do when bringing forward this privatisation Bill is to allege that as a nationalised industry this industry has been inefficient. They have never made that allegation. They dare not so so. In fact, they dare not even attack it on grounds of profitability. It is an industry under public ownership which has taken care of efficiency but which nevertheless at the same time has sought to safeguard its own long-term interests and those of its customers as well as British industry generally.

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The new successor company is a private limited company responsible not to the country, not to a Minister, not to the Government, but only to its shareholders. If the noble Lord were to survey the whole climate of the institutional and indeed private shareholder atmosphere in the City of London today, he would discover—and he knows this perfectly well—what they are after. They are after a short-term buck as quick as they can get it. We are afraid that when this industry is privatised the sheer pressure from the institutions, the pressure of the market in shares itself, will be to seek short-term profit and short-term capital gains.
I should like for a moment to address myself to the remark made by the noble Lord, Lord Bruce-Gardyne. The noble Lord is such an expert in these affairs. With the full knowledge that this bull market on stocks and shares cannot go on indefinitely, you can bet your life that the shareholders of the new British Gas company will seek as quick a buck as possible as long as they can possibly do so. This is what we want to safeguard against, and this is the reason why this amendment is put down. Once again it does not seek preferential treatment. It seeks that "due account is taken". The words are precise. They do not permit of any particular exaggeration.
When are the Government and their supporters going to take the attitude towards their own manufacturing industries in this country that is taken in other countries among their friends in Europe—in France and in Germany—and in Japan, Korea, and anywhere else? They are proud to look after their own industries. They do not mouth this wretched cackle so well beloved of the City that they must stand up to competition wherever it may come from, fair or unfair—in the case of Korea, as the noble Lord knows perfectly well, miserably unfair at that. I am sorry that the noble Lord cannot accept this amendment. A question of principle is involved in it, and the Committee will have to decide which way it is going to go.
8.31 p.m.
On Question, Whether the said amendment (No. 47) shall be agreed to?
Their Lordships divided: Contents, 42; Not-Contents, 60.

DIVISION NO. 2

CONTENTS

Airedale, L.

Kilmarnock, L.

Barnett, L.

Lockwood, B.

Blease, L. [Teller.]

McGregor of Durris, L.

Bruce of Donington, L.

McNair, L.

Carmichael of Kelvingrove, L.

Mar, C.

Cledwyn of Penrhos, L.

Nicol, B.

Crawshaw of Aintree, L.

Phillips, B.

David, B.

Pitt of Hampstead, L.

Dean of Beswick, L.

Prys-Davies, L.

Gallacher, L. [Teller.]

Raglan, L.

Grey, E.

Seear, B.

Hampton, L.

Silkin of Dulwich, L.

Hanworth, V.

Stewart of Fulham, L.

Hatch of Lusby, L.

Stoddart of Swindon, L.

John-Mackie, L.

Taylor of Blackburn, L.

Kilbracken, L.

Taylor of Gryfe, L.

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Tordoff, L.

Williams of Elvel, L.

Underhill, L.

Wilson of Rievaulx, L.

Walston, L.

Winchilsea and Nottingham, E.

Wells-Pestell, L.

Whaddon, L.

Winstanley, L.

White, B.

NOT-CONTENTS

Auckland, L.

Inglewood, L.

Beaverbrook, L.

Kimball, L.

Belstead, L.

Kinloss, Ly.

Brabazon of Tara, L.

Lane-Fox, B.

Brougham and Vaux, L.

Layton, L.

Broxbourne, L.

Lindsey and Abingdon, E.

Bruce-Gardyne, L.

Long, V. [Teller.]

Butterworth, L.

Lucas of Chilworth, L.

Caithness, E.

Lyell, L.

Cameron of Lochbroom, L.

Macleod of Borve, B.

Campbell of Alloway, L.

Marshall of Leeds, L.

Campbell of Croy, L.

Mersey, V.

Cathcart, E.

Middleton, L.

Coleraine, L.

Munster, E.

Cox, B.

Murton of Lindisfarne, L.

Craigavon, V.

Norfolk, D.

Cullen of Ashbourne, L.

Pender, L.

Davidson, V.

Rankeillour, L.

Donegall, M.

Renton, L.

Dundee, E.

Rodney, L.

Elliot of Harwood, B.

St. Aldwyn, E.

Elliott of Morpeth, L.

Sanderson of Bowden, L.

Elton, L.

Sandys, L.

Faithfull, B.

Skelmersdale, L.

Fortescue, E.

Swinton, E. [Teller.]

Gibson-Watt, L.

Torrington, V.

Glenarthur, L.

Trumpington, B.

Gray of Contin, L.

Vaux of Harrowden, L.

Grimston of Westbury, L.

Wynford, L.

Hooper, B.

Ypres, E.

Resolved in the negative, and amendment disagreed to accordingly.
8.39 p.m.
Viscount Hanworth Viscount Hanworth moved Amendment No. 48:
Page 3, line 28, at end insert—
(" ( ) to promote the interests of the purchasers and other users of gas fittings';").
The noble Viscount said: This amendment is to give powers to the Secretary of State,
"to promote the interests of the purchasers and other users of gas fittings".
In 1980 the Monopolies and Mergers Commission published a report on gas appliances. They were concerned that the British Gas Corporation was almost a monopoly in this area. The Government first decided that the corporation should withdraw its retailing operations, but in the event the corporation made the necessary changes itself.
It seems incredible that the Government should not take the power to prevent this happening under privatisation, and should leave no deterrent or remedy except by a complete re-run of the earlier and relatively recent investigation by the commission. The noble Lord the Minister should surely say why, with a privatised industry, the situation which I have described is less likely to arise. Otherwise, surely, logically, he should agree the amendment. I beg to move. The consequential amendments are Nos. 64, 118, 120, 121, 122C, 129C, 134C and 135.
The Minister of State, Scottish Office (Lord Gray of Contin): Perhaps I could get clear with the noble Viscount, who has so succinctly moved Amendment No. 48, that he is also speaking to Amendment No. 48A and Amendment No. 52, which according to my list are grouped with No. 48.
Viscount Hanworth: I certainly was not moving Amendment No. 48A. That is a much more important amendment, and, if it were earlier in the day and we had not just had a Division, it is one that I would certainly have divided upon. This particular amendment is important, but it is nothing like as important as No. 48A.
Lord Gray of Contin: Might I ask the noble Viscount about Amendment No. 52?
Viscount Hanworth: I am not certain. I may not move that amendment.
Lord Gray of Contin: I find it very difficult, even after three years, to get used to the procedures in your Lordships' House and Committee. I understood that the groupings of amendments had been agreed by the usual channels. Perhaps that is not the case. While I am delighted that the noble Viscount has included a very substantial list of consequential amendments, when he announced that list it came as news to me. I had not realised that we were also including those amendments. But I am happy to have them dealt with in that way.
The noble Viscount has tabled his interesting amendment, which seeks to promote the interest of purchasers and users of gas fittings. I imagine that his main interest is in appliances for this purpose, and also to promote competition between fuel suppliers.
The noble Lord will be aware that steps were taken in another place to add a new clause, Clause 33, to the Bill to make it clear that the Gas Consumers Council would be able to investigate complaints relating to gas appliances. It is that body which properly acts as the advocate and promoter of gas consumer interests, and it is right that they should be able to investigate a full range of complaints. But a duty on the Secretary of State and the director would be meaningless. Neither has any functions under the Bill in the area of gas appliances. There is already considerable competition from other firms in the supply and installation of appliances, and normal competition law applies as in any other normal commercial activity. The appliance area of the market is already under the eye of the Director General of Fair Trading, and the normal MMC and OFT controls are perfectly adequate to ensure that the new utility and other suppliers compete on proper terms. There is therefore no reason to give the Secretary of State or Ofgas any functions or duties in this area.
As to the question of promoting competition between fuels, the noble Viscount indicated that he was taking that amendment separately, so I shall deal with that in due course when we reach it. In the meantime, perhaps what I have said will convince the noble Viscount that the amendment which he is
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proposing, Amendment No. 48, is unnecessary. Perhaps he will consider withdrawing it.
Lord Bruce of Donington: Before the noble Lord sits down, I wonder whether he could answer me this question. If he would turn to Clause 4(2)(c) he will see the words:
"to protect the public from dangers arising from the transmission or distribution of gas through pipes"—
and then come the important words—
"or from the use of gas supplied through pipes".
Will the noble Lord inform us whether he still wishes to say that, in those circumstances, within the existing terms of the Bill, the supply of gas has no concern at all with the appliances?
Lord Gray of Contin: I am not suggesting that the supply of gas has no concern at all with the appliances. What I was suggesting was that the terms of this amendment deal principally with appliances as opposed to the supply of gas, and that there are already ways in which this is taken care of. I think I did my best to spell those out for the benefit of the noble Viscount.
Lord Bruce of Donington: But how is gas used unless one sets fire to it when it comes out of the pipe? The word "use" is in the phrase "from the use of gas". It can only be used with an appliance. Surely the noble Lord must agree that, even under his own Bill, there is some concern for the gas supplier with the appliances. It is in his own Bill.
Lord Gray of Contin: I am afraid the noble Lord is getting a little away from the subject we are discussing. The noble Viscount's amendment clearly says:
"to promote the interests of the purchasers and other users of gas fittings".
The noble Lord is widening the argument very considerably by what he is saying. I have dealt with the point raised by the noble Viscount, and I have given him my answer. I suggested to the noble Viscount that perhaps he might be prepared to withdraw his amendment.
As far as the use of gas is concerned, the noble Lord refers to safety in the use of gas. The director has a legitimate interest in this but is not concerned with the regulation of the sale of appliances, which is the subject of this amendment.
Lord Bruce of Donington: The use of appliances.
Lord Gray of Contin: The sale of appliances, not use.
Lord Stoddart of Swindon: Let us take the amendment as it is printed:
"to promote the interests of the purchasers and other users of gas fittings".
I take it that what we mean by "gas fittings" is a whole range of commodities which would attach to the gas main and to the appliance itself. The great problem here is that gas is a highly dangerous, volatile substance, and it is absolutely essential that standards

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relating to fittings are of the best. I believe that that is what the noble Viscount, Lord Hanworth, is getting at: that, in fact, the purchasers of such fittings should be protected against the sale by unscrupulous merchants of inferior fittings.
I believe that that is a proper matter in which the Secretary of State and the director should interest themselves. After all, bad fittings can result in fires, and perhaps even in explosions. That is why it is essential that we have some protection for the consumer within the Bill. I think that that is altogether reasonable.
Viscount Hanworth: I am certainly willing to withdraw this amendment, but I am not wholly satisfied that the Minister has taken the points I was trying to make or that I have taken the points that he was trying to make. So, without any commitment, I would ask him whether, with his advisers, he will read what I said because it seems that things have gone wrong in the past and I do not see what provisions there are in the Bill to prevent them going wrong in the future. That is really the case; and so I would ask him to have another look at what I said and I shall certainly have another look at what he said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Hanworth Viscount Hanworth moved Amendment No. 48A:
Page 3, line 28, at end insert—
("( ) to maintain and promote effective and fair competition between persons engaged in commercial activities connected with the supply of fuel and power.").
The noble Viscount said: This is a much more important amendment and it goes right to the root of the problem of privatising gas. The intention is quite clear from the wording: it is to give the Secretary of State and the Director of Ofgas the power to promote effective and fair competition in the commercial activities between the four main suppliers of fuel and power. In effect, that is between coal, gas, oil and electricity. I would stress that these are only enabling powers. All governments usually like to have enabling powers, but apparently that is not so in this case.
In another place no real arguments were advanced against a similar amendment, and even less so, late at night, on Amendment No. 37 in this Chamber. In fact I then castigated the Minister's reply in rather strong terms for his failure to give any reasons against the amendment. The point is that in the past all governments have tried to keep the four fuels in some sort of balance because no one wants more sudden switches from, say, coal to oil or gas than can be avoided. Today we have a subsidy for coal because the CEGB is obliged to pay about twice as much for coal as it would for other sources. We also have a government levy of £1 billion (or is it £2 billion?) on gas. No doubt the Government will find ways in the future of continuing this; but this amendment is far narrower. What we face after the passage of this Bill are nationalised coal and electricity industries competing against a privatised gas industry. It would be possible for the new owners of the gas industry to
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resort to dubious commercial tactics which could not be matched by their controlled nationalised competitors.
The sale of this would not arise. You have only to refer to the situation which occurred with gas appliances, which I mentioned in my previous amendment. But even more important is the distortion which can result from a misguided short-term pricing policy, as set out in paragraph 47 of the report of the Select Committee on Energy referring to the development and depletion of gas resources.
No doubt the Government's opposition to other amendments on these lines is simply that they do not want to frighten prospective buyers by inserting provisions in the Bill which are relatively undefined. But if the Government insist on privatisation, against the wishes of most people and without any mandate, they really must see that so far as possible it will work in the national interest and in the consumer's interest. Unless the Government can produce some powerful arguments against this amendment, I shall try to introduce it again at the Report stage. I am really sorry that on two occasions (Once in the other place and once the other night) no solid, reasonable argument was put forward by the Government. If they really are afraid that these sorts of provisions are going to make it more difficult to sell off the gas, I would say to them please have the guts to get up and say so. I beg to move.
Lord Gray of Contin: It is correct, of course, that we discussed this amendment with Amendment No. 37 the other night. Indeed, the noble Viscount at that time indicated it was not his intention to move Amendment No. 48A. As I recall, on 8th May at col. 918, he said:
"I have down an amendment, Amendment No. 48A, which is similar to this one. I propose not to move mine but to speak to this one".
However, the noble Viscount is of course perfectly entitled to change his mind. I know that this is a subject in which he has a great interest and of which he has considerable knowledge. Naturally I am only too happy to deal with the matter again now and I hope that I shall be able to persuade him on the third occasion.
Promoting competition between fuels is something which we believe already exists to a very great extent. We believe that the strong and effective competition which exists just now is likely to continue. The Government need no persuasion that in general the best protection for consumers is competition, where the efficient thrive and customers can choose the best fuel for their purposes in the light of the service they receive.
The Gas Bill is not the place to encourage competition between different fuels. Competition is achieved by the stimulus of market forces, and needs no bureaucratic intervention from government. We have of course given the Secretary of State and the director a duty, in Clause 4(2)(d), to enable competition to take place in the contract area of the gas market. I am not sure whether the noble Viscount intended to go beyond that in the amendment which

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we are now discussing, but we believe that a competition duty, of the kind which was accepted in another place, makes sense in the light of the opportunities for competition within gas supply introduced under the provision of the Oil and Gas (Enterprise) Act 1982 and carried forward in this Bill.
No such duty is necessary or appropriate to stimulate competition between fuels. Indeed, it would fall entirely out of the scope of this Bill, and I am sure that we have all read in the press about the negotiations which are taking place outside this building in order to try to ensure the efficiency of a different fuel altogether.
But, so far as this Bill is concerned, we are talking about the gas industry and about the efficiency of that industry. We believe that the competition duty now included in the Bill is the right one and that a duty in respect of purchasers and users of gas appliances, as I said a little earlier, would be inappropriate. The noble Viscount, I think, indicated that if I was unable to convince him on this occasion, he would return to this subject at Report stage, and of course he is absolutely entitled so to do. In the meantime, I would invite him to consider withdrawing this amendment.
Baroness Seear: How can the noble Lord the Minister say that market forces deal with competition between these industries when two of them are under government control on pricing? We know perfectly well that there have been occasions when, as a result of government requirements, prices have been both held down and put up in nationalised industries. Where are market forces in those circumstances?
9 p.m.
Lord Gray of Contin: With respect to the noble Baroness, one has only to consider forms of home central heating to find that there is very considerable competition between fuels. It is not uncommon to hear of a householder changing completely from one fuel to another because he feels that the second fuel might be more economical for his needs.
Baroness Seear: That may well be the case in particular circumstances, but the noble Lord the Minister has not answered my point. You cannot have genuine market forces at work between industries when the pricing of two of them is controlled by what the Government tell them to do. There are no market forces there. It may be the only way to do it and it may be a bad way to do it, but there are no market forces operating.
Lord Stoddart of Swindon: The noble Lord's reply really exposes this Bill for what it is. As my noble friend Lord Bruce of Donington said earlier, this a Bill about getting money to bribe the electorate, because there was no rationality about the replies he gave to the noble Viscount, Lord Hanworth, and the noble
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Baroness, Lady Seear. The noble Lord knows perfectly well that, in the matter of energy, market forces simply cannot be a substitute for an energy policy.
The noble Lord said that there was adequate competition between the fuels and he instanced central heating. But when somebody puts a central heating system into his home it is a heavy capital item. If I, for example, spend £1,500 putting a gas central heating system into my home, it is unlikely that the following year, because electricity prices are marginally lower, I am going to rip out the gas central heating system. After making a capital investment of £1,500, I am not likely to switch over and spend another £1,500 in installing electric storage heaters. The noble Lord knows that what he said is nonsensical and that, in that respect, competition simply cannot exist.
What the noble Viscount, Lord Hanworth, is trying to do is to ensure that there is a fair balance between all the fuel industries, particularly between gas, electricity and coal. He was quite right to suggest that there could be circumstances in which a privatised British Gas could use its monopoly power to gain an unfair share of the market through predatory pricing. It would be able to do that because it was free to operate within this market which the noble Lord talks about, but coal and electricity would not be able to operate within that same market in the same way. That is what the noble Viscount was getting at and it was a highly relevant contribution that he made.
I have said before, and I repeat it now, that the Bill is a nonsense and the Government's adherence to market forces in the pricing of fuels is also a nonsense. How on earth can we make proper decisions about our future energy needs and how those are to be met, unless we are prepared to take all the fuels together? For example, if gas—again using its monopoly power—decided on a predatory pricing policy which could undermine the electricity industry, that in turn would necessitate less coal being taken to burn in power stations and therefore coalmines which would otherwise be viable would be closed down, while others which ought to be open for the long-term good of the energy needs of this country would not be sunk. That is what it is all about and the noble Lord, Lord Gray, knows that.
The unfortunate thing about this Bill and the unfortunate thing about the noble Lord is that, because he has his brief and has to maintain his position in relation to that brief, he will not listen to or accept very reasonable amendments which are put forward from this side of the Committee. I urge the noble Lord to rethink his position and go back to his right honourable friend the Secretary of State and say, "We really are getting some decent arguments from the House of Lords. The House of Lords is getting its teeth into the Bill, so far as it is allowed to get its teeth into the Bill and so far as it is allowed time to get its teeth into the Bill, and it is exposing the weaknesses which were not exposed or which were overruled in the House of Commons". I urge the noble Lord to give better attention than he has done to the very reasonable amendment which has been moved by the noble Viscount, Lord Hanworth.
Lord Sandys: The suggestion was made by the noble Lord, Lord Stoddart, that this is a reasonable amendment. I suggest that this is a very unreasonable one, because we are looking at a world energy situation and three of the fuels concerned have a world energy content. Whether the generation of electricity depends on coal—and let us assume that a proportion of it does—coal is drawn from markets other than our own domestic market. It is drawn from Australia, Poland and many other countries in the world, and to suggest that we can be Little Englanders in this regard is to delude ourselves.
While I have every respect for what the noble Viscount, Lord Hanworth, has suggested, in that the proposition is that there should be some attempt to control the scope of pricing, it is right outside the terms of this Bill and my noble friend has said exactly that. Surely the noble Viscount knows, as we all do, that the pricing of petrol and other fuels depends very largely on the world market.
Viscount Hanworth: I am afraid that that is not quite what I said. What I said was that the Government had, for a long time, tried to keep a reasonable balance in prices between the four fuels. But I then went on to say that this amendment was concerned with a far narrower field and that was to keep fair competition between them. This amendment is concerned only with fair competition and not with fixing prices.
Lord Williams of Elvel: Perhaps I may just add a short word to what the noble Viscount has said. The amendment calls for the Secretary of State, who presumably is responsible across the range of these various fuels,
"to maintain and promote effective and fair competition".
Effective and fair competition means among other things that the advertising which is engaged in by the privatised British Gas Corporation or the coal board should be consistent with what is allowed by companies or organisations which, as the noble Baroness, Lady Seear, pointed out, may be under the control of the Secretary of State.
We saw two or three years ago the intense competition between two nationalised industries—the electricity industry and the gas industry—in advertising. Some of us would like to see that a proper balance is struck between a privatised gas operation advertising in a relatively unrestricted manner and public utilities such as coal and electricity, which I think the noble Lord will agree, and from what he said the other day, will remain in public ownership at least for the time being so that we do not have a total imbalance in exactly the market, as my noble friend Lord Stoddart said, which is the new market where capital investment comes and which will remain unprotected.
All the noble Viscount, Lord Hanworth, is saying is that the Secretary of State in the discharge of his functions should have regard to this and should maintain and make sure that nothing untoward occurs, particularly in the realm of marketing to first-time consumers—I think people are liable to change their minds. In his reply the noble Lord cast aside this aspect. I do not want to follow my noble
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friend Lord Stoddart in a general discussion on energy prices because I do not think that is a very fruitful line at the moment—we shall come to that—but I should like the noble Lord just to respond to the point of marketing by a private British Gas against a public coal board and a public electricity board. This is the point that the noble Baroness, Lady Seear, was making.
Lord Gray of Contin: I have already dealt in some detail with the amendment proposed by the noble Viscount. I respect his view but I am afraid that I disagree with him on this issue. He has said that he may wish to return to this at a later date.
There is a wide philsophical gap between the party opposite and the Government and there is no point in our trying to bridge that because we would not have it any other way. I would suggest that the party opposite is still wedded to an approach of state planning in energy industries—
Lord Williams of Elvel: Perhaps I may—
Lord Gray of Contin: The noble Lord is perhaps trying to dissociate himself from that suggestion—and I am very glad if he is—but the Government do not agree with that and it will always be best to allow market forces—
Lord Williams of Elvel: May I—
Lord Gray of Contin: I was going to deal with the noble Lord's noble friend first.
Lord Williams of Elvel: I do not dissociate myself at all from the views of my noble friends and, if I may say so, the noble Lord the Minister is being slightly mischievous in suggesting that I was doing so. I was trying to concentrate the Minister's mind on a particularly narrow point in order to help him with his thinking, which seems sometimes to be somewhat diffuse. I was concentrating his thinking on the point made by the noble Baroness, Lady Seear, and I was trying to focus that on advertising and marketing as between a public company—a plc—and a nationalised industry.
Lord Gray of Contin: I am sorry if the noble Lord thought that I was mischief-making. That certainly did not enter into my thinking. Nevertheless, I am glad that he has reaffirmed that he is one of them, which is good to know.
Perhaps I may return to the point which was made by the noble Lord, Lord Stoddart. The thinking of the party opposite is always governed by this overall desire to have a state planning system for energy, with everything cut and dry—this source of energy must not do this, and this source must not do that. That is completely alien to our beliefs. We believe that market forces in energy development are in the best interests of the consumer and that consumers should be left to choose for themselves the fuels that are best suited to their own needs. This is the right way to proceed and this is precisely what the Bill will do.
The noble Lord, Lord Williams of Elvel, quite rightly drew my attention to the fact that I had not

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dealt in detail with what the noble Baroness had said. We had an exchange across the Floor but I had not really answered her point. The noble Baroness has identified one of the main reasons why we are seeking to remove the British Gas Corporation from the artificial constraint of government, to enable it to compete unhindered and to expose it to the realistic effect of market forces—
Lord Williams of Elvel: Perhaps I may—
Lord Gray of Contin: I am sorry, the noble Lord must be patient. He may not agree with what I am saying, but I believe that this Bill will be for the benefit of British Gas in the long term and for the benefit of its consumers in the long term.
Baroness Seear: The noble Lord referred to artificial constraints under which British Gas, as a public sector industry, labours. In doing so he is admitting that coal, gas, and electricity are operating under artificial constraints and therefore cannot be in a market relationship to a privatised gas industry. That is what I am trying to say. I could not have put it better.
9.15 p.m.
Lord Gray of Contin: I do not think that it is quite what the noble Baroness was saying. The point I was making in arguing with the noble Baroness is that until now the British Gas Corporation has been very much subject to the views of Ministers, which it will not be once it is privatised. Indeed, that applies to any industry in which energy Ministers, Treasury Ministers, or any other Ministers, are involved. I feel that this is a good move. It is a move in the right direction to relieve the British Gas Corporation from the constraints of ministerial discipline and to let it operate entirely on its own.
The noble Lord, Lord Williams, made a point about marketing. There is no reason for there to be any conflict because one fuel industry is in the public sector and the other is in the private sector. This has been the situation for many years as regards oil and gas, or electricity for that matter. There has not been any difficulty so far as the advertising budgets of the public sector industries are concerned. Indeed, the public sector industries carried out very major advertising campaigns from time to time.
As regards the private sector, obviously oil is the main supplier—or has been until now—in the private sector and it has been able to take on the public sector and to compete very favourably with it. We believe that by removing the constraints of government from the British Gas Corporation the corporation will be able to do even better than it has. I am not suggesting that it has not done well.
Lord Stoddart of Swindon: The noble Lord still has not dealt with the point raised by the noble Baroness, Lady Seear. As I understand it, she wanted to know what will be the situation in relation to a coal industry and an electricity industry which are still under public constraint, and a gas industry freed from that constraint. In other words, one at any rate of the points
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which arises in my mind is what would happen if a privatised gas industry rapaciously exploited the North Sea reserves in order to make quick profits by selling gas at a cheap rate to undermine the other fuel industries?
The other point is this; and the Minister will have to deal with it. If he is in favour of a free market and if he is in favour of competition does that mean that the noble Lord intends to free the Central Electricity Generating Board from the necessity to buy British coal? In other words, is he going to say to the CEGB that it may now buy coal from anywhere in the world? If that is the case, what will happen to our own coal mining industry? How many further coal mines will be closed? How many more miners' jobs will be lost? What are the long-term implications? Those are the questions that the noble Lord must answer. He has not answered them. He is evading those questions. The noble Baroness, Lady Seear, is entitled to a straight answer to her question and I am entitled to an answer to my further questions arising from her question.
Lord Gray of Contin: Perhaps, but not under this amendment.
Viscount Hanworth: I know the noble Lord is doing his best, but his best is no better than it was on Amendment No. 48. He simply does not address himself to the points at issue—namely, fair competition and a reserve power for the Government, but not one that has to be used. We heard all that was said about using the power, but no one is suggesting that it is used like that. Why we should disagree on this matter still utterly defeats me.
The noble Lord goes on talking about market forces, which is nothing more than a red herring. As has been pointed out by almost every speaker tonight, and the noble Lord knows it perfectly well, the gas industry has a levy of £1 billion or more imposed upon it and the CEGB is forced to take coal at uneconomic prices. We are not talking about that; we are talking about fair competition. The noble Lord has said nothing this evening that in any way answers this amendment, which is concerned purely with fair competition and a reserve power.
I do not like bringing these matters back again and again but I think that the Minister ought to go away and produce some reasonable arguments because I cannot see what is between us. Therefore I fear that I shall probably raise this matter once again on Report in the hope that we may obtain some more reasonable reasons for opposing the amendment.
In the meantime, at this time of night—and it is highly unfortunate of course that it should be late, because, if this amendment had come up at the reasonable time of 4 p.m., then I think that, had I divided the Committee (which I had intended to do) we should without any doubt have won this amendment—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 49 to 51 not moved.]
Viscount Hanworth Viscount Hanworth moved Amendment No. 52:
Page 3, line 28, at end insert—
("( ) to promote effective competition between persons engaged in commercial activities connected with the supply or use of gas through pipes.")
The noble Viscount said: This is another amendment which I think would be useful in the Bill. I shall not put it higher than that. I hope that perhaps the noble Lord will take a better view of this amendment than he has of some of the other general amendments that were meant to improve the Bill. I beg to move.
Lord Gray of Contin: The noble Viscount certainly did not give us very much to go on about this amendment, and I think he is probably as short of notes on it as I am. As I explained a little earlier, in the list which I was given the amendment was grouped with Amendments Nos. 48 and 48A, and I therefore think that during the discussion on those two amendments we pretty well covered what I imagine the noble Viscount had in mind in tabling Amendment No. 52. So rather than weary the Committee by going over the arguments again, I think that perhaps the noble Viscount may be prepared to withdraw the amendment.
Viscount Hanworth: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Hanworth Viscount Hanworth moved Amendment No. 52A:
Page 3, line 28, at end insert—
("(3) The functions assigned to the Director referred to in subsection (1) above include in particular those described in sections 7(7)(a), 8, 11(4), 19 to 22, 23, 24, 26, 29, 31, 32(3), 34(1), 34(2), 34(4), 35(1), 36, 37, 38, 39(1), 39(2), 39(4), and in Schedules 1(4), 3(3), 4(2)(2), 4(4)(2) and 5(3)(3), together with those described in sections 7(2), 8(1) and 16 and in Schedule 3(1).")
The noble Viscount said: This amendment covers the idea of putting down clearly all those sections in the Bill which concern the director, so that without reading through the whole Bill his staff and others can see quite clearly what are their duties. It is an unusual thing to do but I think it has some merits, and I therefore beg to move.
Lord Williams of Elvel: The noble Lord, Lord Belstead, when he was replying to an amendment concerning the functions of the director, referred the Committee to Notes on Clauses and particularly to Annex A in the notes on Clause 1, spelling out the duties of the director. Some Members of the Committee on this side were not entirely happy that the duties of the director should be relegated to an annex in Notes on Clauses, which so far as we can see has no particular legal validity. Therefore, the thought (which I think is a proper and sensible thought) emerged that the noble Lord might consider putting the duties of the director fairly and squarely in the Bill rather than relegating them to an annex in Notes on Clauses. I think we should support this amendment.
Lord Gray of Contin: I cannot accept this amendment. I do not believe that it would be right to accept it for several reasons, and I shall try to explain to the Committee why I cannot do so.
The first is because I believe that including a list of functions in Clause 4, as the amendment seeks to do, would not be helpful to the layman, since there are functions on the director relating to other clauses in the Bill which are not listed but which are also important. For example, the principal duties to supply on a public gas supplier under Clauses 9 and 10 are to be monitored and enforced by the director. If the noble Viscount's amendment was included in the Bill, a customer who considered that a public gas supplier had breached one of these duties might be misled into thinking that the director had no role in the matter, since Clauses 9 and 10 are not included in the list of functions. I believe that it is far better for the Bill to stand as it is, and for the functions to speak for themselves.
I also have a second reason why I cannot accept the amendment. This is because it is totally unnecessary. The Bill already sets out quite clearly what the director's functions are. Clause 4 lists duties which the director must use as guidelines when exercising his functions. There can be no doubt as to what those functions are. In addition, it is important to note that the duties set out in Clause 4 guide the Secretary of State as well as the director. It would again risk misleading the layman if one was only to give a list of clauses which referred to the director's functions and failed to give those of the Secretary of State.
I recognise that noble Lords have raised an important point by tabling this amendment and that we should indeed try to set out our legislation in the most helpful way possible for the general public. However, for the reasons that I have stated, I do not think this would be achieved by the amendment, and I hope that the noble Viscount will be prepared to withdraw it.
Viscount Hanworth: I can only say that I wish that the noble Lord had given the same attention to my amendment, Amendment No. 48A, as he has given to this one, which is of little consequence. I am impressed by what he said, and I shall, with pleasure, withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 53:
After Clause 4, insert the following new clause:
("Regional development.
. To achieve the fullest contribution to regional development—

(a) the regional management responsibilities of the Corporation prior to vesting day shall be at least sustained by the successor company and this requirement shall appear in the Memorandum of Association for that company; and

(b) the board of directors of the successor company shall include at least one non-executive director with special responsibility for Scotland, and similarly for each of the distribution regions of England and Wales.")

The noble Lord said: This amendment ought to appeal to the Minister since it concerns regional

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development, with specific reference to Scotland. As will be seen from the three names printed above the amendment, they represent Members of this House who have a deep concern for Scotland and its economic welfare. I am sure that the Minister will understand the anxieties which exist and which were reflected recently in the municipal and local government elections in Scotland, in which there was a complete rejection of the Conservative Government.
That is not because of weaknesses perhaps in the rating system or the health system exclusively, but it reflects a feeling in Scotland that too much is being centralised in London to the disadvantage of regional development in that part of the country. That is true of other parts of the United Kingdom too. That is accentuated not only by the creation of the new privatised, centralised industries. The recent mergers and takeovers in the City tend to centralise economic power and decision-making in London. For that reason, I was encouraged by the Scottish Council (Development and Industry), which is an organisation not unfamiliar to the Minister, to put down this amendment.
9.30 p.m.
The Scottish Council (Development and Industry) is representative of local authorities, banks, industry, the universities and all parts of the commercial and social life of Scotland. In its submission on this amendment it has said that it is not arguing the question of private or public ownership of the gas industry; it is concerned about the tendency to centralise the organisation which may follow the passing of the Bill. It acknowledges that in the House of Lords on Second Reading the noble Lord, Lord Gray, as Government spokesman, gave an assurance that no dilution of existing management automony is intended under the structure post-privatisation, but the council goes on to argue that those assurances are worthwhile in the short run but are not binding on successor governments or, even more importantly, are not binding on successive managements of British Gas plc.
The council points out that in the Airports Bill which is currently before the House there is a specific assurance with regard to the retention of local authority interest in the management structure of BAA. The council argues that it expects that the structure to be proposed will be similarly copied by gas and that we are in great danger of creating a centralised, monolithic management structure if the Bill goes through without any of the suggested commitments.
Scotland is a rather special place, as the noble Lord the Minister well knows. It has only 10 per cent. of the population of this country, but it has 30 per cent. of the country's land mass. It has special problems in the distribution of gas, telecommunications and so on that should be understood, but are not always understood south of the Border.
We do not suggest that any special arrangements should be made for Scotland, but that other regions should be catered for. I had experience for some years as the member of a nationalised industry board. My
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experience in a centralised organisation suggests that it is easy to be superficial about the problems of the regions if all one's might, social and commercial life are centralised in London. I suggest to the noble Lord the Minister that a gesture towards a commitment to regional policy should be acceptable.
During the past year Scotland's regional development grant was cut by 50 per cent. and it is for that reason that there is great resentment, a growth of Scottish nationalism, and a rejection of the Government which indicate a deep unease in Scotland. I suggest to the noble Lord the Minister that that may be to some extent alleviated if the amendment is accepted. I beg to move.
Lord Sanderson of Bowden: I, too, have a great interest in what happens north of the Border, and I have great sympathy with a great deal of what the noble Lord, Lord Taylor of Gryfe, said. I have had a close look at the amendment and under paragraph (a) I agree that,
"the regional management responsibilities of the Corporation prior to vesting day shall be at least sustained by the successor company".
It is important that the noble Lord the Minister should give us an assurance as to that fact.
I take issue with the noble Lord, Lord Taylor of Gryfe, with regard to paragraph (b). The British Gas Corporation, as it is structured, has a board which, I understand from looking at the report and accounts, has six full-time directors plus a chairman and five part-time directors. The noble Lord, Lord Taylor, with his great experience, will realise that this size of board is manageable in any public company. But underneath that, immediately below the board, there are at present regional chairmen. I should like to know from the noble Lord the Minister what is the intention for the future in respect of those regional chairmen. They form, obviously, an important and necessary link between the regions and the central body. It would not be easy but, I suppose, not impossible to have a board of directors that contained 12 non-executive directors each coming from a different region. While fully accepting the important position that Scotland holds and the special problems that is has—I hope that there will be a Scotsman appointed upon merit to the board of the new privatised British Gas—one has to look carefully at the structure of the intended board before going down the road proposed in paragraph (b) of this amendment, although I have a lot of sympathy with paragraph (a).
Lord Gray of Contin: It is useful, I believe, to have a discussion of this sort. I am grateful to the noble Lords who tabled the amendment for giving us the opportunity. I should like to reassure noble Lords that British Gas has no plans to change its regional structure. I can give my noble friend Lord Sanderson the assurance he seeks regarding regional chairmen.
British Gas has, over the years, made considerable investments in extending its facilities around the country in order to provide a supply of gas and associated services as widely as possible. It has created an integrated network which is constantly growing,

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and has involved itself in extensive research in order to maximise the service provided to customers. Indeed it has sought to make the most efficient use of gas and to reduce costs. We all applaud BGC for these efforts.
It is because of the successful, integrated nature of BGC that we are privatising it as a whole, and are carrying over the general and the specific duties to supply. The directors of BGC must carry on these duties irrespective of the area involved, and there is certainly no reason to suppose that, following privatisation, BGC will seek to meet these duties to supply in a way which would demand a different regional structure from that adopted at present. It will, in any event, be for the new BGC plc to decide for itself whether the assets employed by a particular part of the country are ideal for providing an efficient and effective service.
It is our ambition that British Gas should be exposed to normal commercial disciplines in a much more real way than through the central control of Whitehall. This is probably in keeping with what the noble Lord, Lord Taylor, has in mind. Imposing a requirement on the newly privatised company to include in the Memorandum of Association an obligation to maintain the level of regional management responsibility in the way proposed by this new clause would run totally contrary to this ambition and would be an unacceptable and unnecessary fettering of BGC plc's ability to meet its obligations as it sees fit. Moreover, such an amendment would actually prevent BGC plc from reorganising a particular aspect of its regional activities in order to provide a more cost-effective and efficient service to its customers.
Noble Lords have also proposed that the board of directors should include at least one non-executive director to have special responsibility for each of the 12 existing marketing regions. This would be an extremely cumbersome, and, in my view, unnecessary requirement. BGC at present handles its business in Scotland and Wales most sensitively, and I fail to see how this would be improved by the amendment. As a Scot myself, I can confirm the experience of my right honourable friend the Minister of State for Energy that there is absolutely no difficulty in getting matters resolved on a local basis in Scotland. Indeed, anyone who has been in the other place and has had frequently to raise constituency issues on this matter would, I am quite sure, confirm that that is the case.
The way in which British Gas have organised their administration means that consumers in Scotland enjoy benefits of scale as well as recognition of a well-devolved administration. I am perfectly confident that they will continue to enjoy these benefits. Indeed, it is in the best interests of BGC plc that they should. Within the framework of duties and privileges of BGC in this Bill it is vital that the company should be allowed to organise its operations in the way it sees fit. Noble Lords are leading us in the direction of regional differentiations of rigid decentralisation, with all the inefficiencies and losses of economies of scale that that might entail and of a regime of inflexible controls.
I believe that we have struck just about the right balance in the Bill with regard to this. I can assure
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noble Lords that it is certainly our intention that the consumers in Scotland—and Wales, too, although this amendment specifically relates to Scotland—will have the same privileges and opportunities as far as their relationship with the new BGC plc is concerned as they have at present. In view of what I have said, I hope that the noble Lord will be prepared to withdraw his amendment.
Baroness Macleod of Borve: Before the noble Lord sits down, I wonder whether he could confirm that at present BGC is divided—not at board level perhaps, but under board level—into twelve regions. If he agrees with that, can he tell noble Lords whether he would hope that after privatisation those twelve regions would still exist?
Lord Gray of Contin: This will have to be a matter for the new BGC plc, but the present arrangements are working very well and I can see no reason why they would wish to change them. Certainly what they would not wish to do, I am quite sure, is to engage upon a process of centralisation such as the noble Lord, Lord Taylor, suggested, because that would not be in the best interests of the new privatised corporation. However, ultimately that decision must be for the new corporation.
Lord Mackie of Benshie: It is interesting that the noble Lord said that it is an opportunity for discussion. What he has done is to reject the suggestion wholly and completely. To say that the new board must decide for itself, and that he has no doubt it will be sensible, is to go against all the experience we have had of centralised boards so far if there is no statutory obligation on them to cater for the regions. They can of course put up some form of front and centralise even more behind that. But I think that the noble Lord has treated this in a rather cavalier way. He has said that it is up to the new privatised boards to decide for themselves what they will do.
It is scandalous that regional matters—national in the case of Scotland—should be totally ignored in this way, and that the Minister should say that they will decide and that no doubt they will be sensible. It is quite extraordinary that the noble Lord should ignore a body, the Scottish Council, which has done such sterling work for Scotland, and should simply say that he is certain that the privatised board will be sensible. I do not think that this is a proper answer. I very much doubt whether it will be sensible. It is a monopoly.
Lord Gray of Contin: I shall go a little further, if that is what the noble Lord seeks me to do. I shall tell him that British Gas Corporation has told us that it is its intention to keep the 12 regions. However, ultimately at the end of the day, obviously, when a company is being privatised, it must be for the new BGC plc to shoulder that responsibility. But certainly it is its intention to have the 12 regions, exactly as my noble friend Lady Macleod asked me. However, I think it a mistake to write this into legisaltion.
9.45 p.m.
Lord Gallacher: I have listened carefully to the Minister's statement, particularly his opening statement, and I shall certainly read it in detail when it appears in Hansard. But it seemed to me, listening to that statement, that the Minister, while giving an indication that British Gas when it becomes a public limited company will maintain a regional structure such as that which has now, is reserving his options in the matter. He used a phrase about altering the regional structure if such alterations were warranted in order to make the best possible use of assets. That would not be unreasonable for a public limited company to want to do, and I think it is the fact that it may want to do that which is probably giving concern to the Scottish contingent in the Committee this evening and which certainly worries us here so far as the other regions of British Gas are concerned. It ties in, of course, with the fairly adamant refusal of the Government when we asked for regional consumer councils to be preserved, though there the sole authority for rejection was apparently some of the evidence given by the chairman designate of the National Consumer Council to a Select Committee in another place. I think that what is being asked for here is not unreasonable and that given the size and the spread of the business after privatisation some form of regional involvement should be written into the memorandum of association. I think that those who have drafted this amendment have been modest in asking for only a non-executive director; so in that sense he will not carry a great deal of clout so far as the board is concerned. Nevertheless, his regional background and regional experience will be invaluable to the board and I think the Minister might give us a slightly better assurance than he has hitherto so far as Amendment No. 53 is concerned.
Baroness Seear: I think one must challenge the remark of the noble Lord the Minister that once British Gas is privatised you just leave the matter to the good sense of the privatised company. This is a great national asset which is being sold. It is of great importance to the industry and to the private consumer, and surely we are entitled to write certain conditions into the deal being done between the now public industry and the privatised industry. It is not good enough to say that once it is privatised we must leave it to them to decide. That would be fair enough if it was a new company which had been started by private enterprise and was developing from the grass roots, but it is not. This is a great company which has been built up with public money for public purposes. We are now making this big change and we are absolutely entitled to put in conditions as Parliament sees fit. We should not say that it is just like any other private company and it can do what it damn well likes.
Lord Gray of Contin: I have listened carefully to what the noble Lord and noble Baroness have said since I gave my original wind-up to this discussion; but I have said that there is no intention to change the present structure. The centralised management of British Gas has been in place since 1972 and during the last 14 years there has been none of the centralising tendencies which noble Lords have feared and which have been mentioned tonight. I see no reason why
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there should be any now. I am afraid I cannot accept that it would be an advantage and that it would be desirable to write into the Bill the sort of proposals which the noble Lord, Lord Taylor of Gryfe, has suggested.
Lord Stoddart of Swindon: Why not?
Lord Gray of Contin: The noble Lord asks, why not? I know that it is within his philosophy to tie everything up in such a way that it would be strangled before it ever got off the ground; that is Labour philosophy. That is how they work, and I am not likely to be persuaded by any of his suggestions so far as this is concerned. I am listening to the noble Lord, Lord Taylor of Gryfe, who has seen the folly of his ways and has moved elsewhere from the rigid Clause 4 attitude of the party opposite. Mind you, I do not know whether he is very much better off where he is, but at least he thinks he is better off for the time being.
Baroness Seear: I do not share that folly, but I do share that point of view.
Lord Gray of Contin: The noble Baroness has a happy knack of making just the right remark at the right time, and of course I accept what she tells the Committee.
I am afraid that I cannot go further than I have already, and I do not think that this amendment would improve the legislation in any way. If the noble Lord insists on pressing it, I shall ask my noble friends to resist it.
Lord Taylor of Gryfe: I am afraid that the Minister has not given the necessary assurances committing the future board of British Gas, which is what we are talking about. He has paid tribute to the efficiency of British Gas in the past, and to the fact that it has been concerned with decentralisation in its management structure. The noble Lord has also said that in another place, of which he was a Member for a number of years, it was easy to raise questions in connection with British Gas and that he obtained responses from Ministers in connection with British Gas. All that is past.
Lord Gray of Contin: If the noble Lord will give way, I did not mean from Ministers; I meant that as a constituency Member of Parliament it was very easy to raise regional matters within the region, and they were always resolved there.
Lord Taylor of Gryfe: That just proves the point. That was why British Gas was a nationalised body with some public responsibility. We are now talking about the creation of a private limited company which will produce a prospectus which will indicate that, if you buy shares in the company, the profits to be reaped will be handsome in terms of dividend. In that prospectus there is no public commitment nor any social responsibility. The company has a responsibility only to service the shareholders, which is a totally different environment from the environment in which British Gas now operates.

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In connection with this amendment, I do not propose to discuss the basic philosophical question that divides the Committee on nationalisation or privatisation. We are concerned about a commitment to regional policy in the future administration and management structure of this business. As I said earlier, the Airports Bill, which is currently before the House, specifically requires that a management structure will be presented for Government approval before the vesting date. We are now looking at the management structure of this new organisation and, when we are transforming a public monopoly into a private monopoly, we are entitled to write into the articles of association some protection in this regard.
Consequently, I must tell the Minister that I think we should divide the Committee. This is a matter which we shall discuss with the Scottish Council to see what further pressure can be brought to bear at the Report stage. I propose to raise the matter with the Scottish Peers' Association, which did excellent work on the Housing (Scotland) Bill, which I have no doubt the Minister will recall, to see how far we can press this. In the meantime, I move the amendment and suggest that the Committee should divide.
9.54 p.m.
On Question, Whether the said amendment (No. 53) shall be agreed to?
Their Lordships divided: Contents, 22; Not-Contents, 49.

DIVISION NO. 3

CONTENTS

Blease, L.

Raglan, L.

Bruce of Donington, L.

Seear, B.

Crawshaw of Aintree, L.

Silkin of Dulwich, L.

Dean of Beswick, L.

Stoddart of Swindon, L.

Gallacher, L.

Taylor of Gryfe, L.

Hanworth, V.

Tordoff, L.

Hatch of Lusby, L.

Whaddon, L.

Kilmarnock, L.

White, B.

Mackie of Benshie, L. [Teller.]

Williams of Elvel, L.

McNair, L.

Winstanley, L.

Pitt of Hampstead, L.

Ponsonby of Shulbrede, L. [Teller.]

NOT-CONTENTS

Ailesbury, M.

Grimston of Westbury, L.

Beaverbrook, L.

Hooper, B.

Belstead, L.

Inglewood, L.

Blake, L.

Kimball, L.

Brabazon of Tara, L.

Long, V. [Teller.]

Brougham and Vaux, L.

Lucas of Chilworth, L.

Bruce-Gardyne, L.

Lyell, L.

Butterworth, L.

Margudale, L.

Caithness, E.

Marshall of Leeds, L.

Cameron of Lochbroom, L.

Mersey, V.

Campbell of Croy, L.

Munster, E.

Cathcart, E.

Murton of Lindisfarne, L.

Cox, B.

Pender, L.

Craigmyle, L.

Rankeillour L.

Cullen of Ashbourne, L.

Rodney, L.

Davidson, V.

St. Aldwyn, E.

Elliot of Harwood, B.

Sanderson of Bowden, L.

Elliott of Morpeth, L.

Sandys, L.

Elton, L.

Skelmersdale, L.

Erroll of Hale, L.

Swinton, E. [Teller.]

Faithfull, B.

Torrington, V.

Fortescue, E.

Trumpington, B.

Gibson-Watt, L.

Vaux of Harrowden, L.

Glenarthur, L.

Wynford, L.

Gray of Contin, L.

Resolved in the negative, and amendment disagreed to accordingly.
10 p.m.
Clause 5 agreed to.
Clause 6 [Exception to section 5]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 54:
Page 4, line 7, leave out ("either")
The noble Lord said: In rising to move this amendment, it may be convenient also to speak to Amendment No. 55. The purpose of these two amendments is to ensure that the supplier of gas under the clause which we are now considering should have the financial stability required to perform his task. The Bill as at present drafted requires the Secretary of State, if he objects to the proposal from the gas supplier, to notify either that he is of the opinion that the rate of supply would be unlikely to exceed the required rate or that he is unable to form an opinion.
We should like to suggest to the noble Lord the Minister that he adds to paragraphs (a) and (b) the text of Amendment No. 55, the thrust of which is that the proposed supplier of gas should have the requisite financial stability to continue the supply of gas when he has received authorisation (if he does so), and that because of financial instability for whatever cause such a supply of gas is not interrupted.
The amendment really has two points to it. The first is the direct point which is the supplier himself—that he should have the financial means to continue his supply in an adequate manner. The second is a slightly more complex point. The supplier of gas, in circumstances which we cannot at present envisage but which it is possible to envisage, may be part of a group; and other companies in the group of which the supplier is one may fall into financial problems and the supplier himself may be dragged down by the performance of other people in the group. In other words, if you look at the holding company arrangement (if you like) which has a number of subsidiaries, one of which is the gas supplier, if the other subsidiaries go down financially, then the gas supplier himself would go down.
As we interpret it, Clause 6 requires the Secretary of State to look specifically at the gas supplier and not range wider than the supplier himself to look at the group of which the supplier may be a member. I think it is very important that we have a response from the noble Lord the Minister on this point. We should like to see this amendment in; but, if it is not acceptable to the Minister, we should like to have assurances that the Secretary of State will look wider than at the firm itself, the corporate entity itself, which is the proposed gas supplier, and will look at the group of which it may be a member. I beg to move.
Lord Gray of Contin: I recognise that in general the noble Lords are opposed to the introduction of competition into the gas supply business and that their view of the notification provisions introduced under the—
Lord Stoddart of Swindon: Really—
Lord Gray of Contin: No, I shall not give way: I have only just started. I shall give way in a moment. I have just started my remarks. As I was saying, their view of the notification provisions introduced under the Oil and Gas (Enterprise) Act 1982 has not changed.
Clause 6 permits a potential supplier to notify the Secretary of State that he proposes to supply premises with more than 2 million therms a year, without the need for an authorisation and without committing an offence under Clause 5. The exception from authorisation only applies where the Secretary of State is satisfied that the supply is likely to exceed 2 million therms a year, the "required rate". The clause carries foward the provisions of Section 29A of the Gas Act 1972, as introduced by Section 12 of the Oil and Gas (Enterprise) Act 1982.
The rationale behind the provision is that supplies above 2 million therms a year will only be undertaken by companies of substance with considerable experience is handling dangerous substances. Thus not only will they be capable of ensuring that safety arrangements are adequate but will also be of sufficient weight to meet their contractual supply of obligations—I think that is the point the noble Lord, Lord Williams of Elvel, has in mind, if I can have his attention just for a moment—without the application of a test of the kind proposed in the amendment.
The duty on the Secretary of State and the director at Clause 4(1)(b) is similar to the amendment proposed. Clearly, however, the Secretary of State or the director have to take into account a number of considerations in deciding whether to grant an authorisation under Clause 7 or Clause 8; a test as to continuing financial viability is relevant not only in ensuring continuity of supply but also as a guide to the director in exercising his functions under the Bill, not least the operation of price contol in relation to Clause 7 authorisations. No such considerations arise in respect of notified supplies under Clause 6. There have been a number of notifications of supplies of over 2 million therms under the provisions of the Oil and Gas (Enterprise) Act 1982. We believe that the notification provisions serve a useful purpose in promoting competition and that it is right to carry them forward unchanged to Clause 6 of the Bill. Therefore, for those reasons I think that the amendment proposed by the noble Lord, Lord Williams, is unnecessary, and perhaps he would consider withdrawing it.
Lord Williams of Elvel: I am grateful to the noble Lord the Minister for his reply. I wonder whether I could ask him to reply to the second point that I made in speaking to this amendment. I understand that notifications are made and that the Secretary of State has to process them: that is quite proper. I also understand that the Secretary of State has to take all sorts of factors into account. The point that I am really stressing is that notifications may be made by companies which form part of a group. For all sorts of reasons, nothing to do with the company which is making the notification, other parts of the group may get into financial problems and drag with them the notifier. This is the problem—I am afraid I may have put it badly at the time I moved the amendment—that I am trying to get at. The Secretary of State should take into account in considering notifications the financial
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strength of the whole of the group of which the gas supplier forms a part.
Lord Gray of Contin: Yes, that is a very good point; but I think that, on reflection, the noble Lord will agree that it is covered by what I said under Clause 4(1)(b). That is very similar to the amendment which is proposed. The Secretary of State or the director have to take into account a number of considerations in deciding whether to grant an authorisation under Clause 7 or 8. The important part of my answer was that a test as to the continuing financial viability is relevant not only in ensuring continuity of supply but also as a guide to the director in exercising his functions under the Bill. Whether or not a company is of such merit as to justify the confidence of the director in his belief that that company is of continuing financial viability is relevant. So the fact that the company might be part of a group would presumably be taken into account by the director, so far as his consideration of the merit of that company is concerned.
Lord Bruce of Donington: I wonder whether the noble Lord will again take this point on board. He will recall that Clause 5 of the Bill deals with the prohibition of unauthorised supply, and that Clause 6 deals with exceptions to Clause 5. Therefore, it specifically deals with Clause 5, and it stipulates that the supply has to be in excess of 2 million therms a year. I am not at all sure—and I should be glad if the noble Lord would confirm this—that Clause 4(1)(b) overrides Clause 6 in this respect. But even if it does—and this is something that we may have to consider on Report—the point made by my noble friend Lord Williams of Elvel still applies.
We live in a mad world, at the moment, of merger after merger and take-over after take-over, almost to a point where it has now become obscene and is a matter of some grave disquiet in the City itself. All kinds of individuals take over without due regard being paid to their financial resources. The practice of take-overs these days is sometimes to take over on borrowed money which is afterwards recovered from the company taken over by virtue of a whole series of asset strippings. I trust that the noble Lord does not live in a sheltered world and that he knows these things happen.
I do not mind whether it is under Clause 4(1)(b) or Clause 6(1)(c), which would incorporate the amendment put forward by my noble friend, but just how do the Government propose to deal with this kind of situation, which is certainly not a figment of the imagination? It is easily perceptible within the gigantic casino transactions that are taking place week by week. Your Lordships will remember Al Fayed taking over Harrods, of which I warn the noble Lord we shall be hearing a little more later on.
What do the Government propose to do? Where there is a series of mergers and take-overs and one of the firms taken over is a supplier with the full authorisation under Clause 6, just what does happen? Let us say that slipping through the net of the glorious casino some corporation which may be able to bluff the Stock Exchange and the City that it has funds—not that they inquire over much, anyway—acquires a gas

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supplier. It decides that it has to pay off the debts by virtue of which it was able to make the acquisition, and it then decides that it will strip this off anyway—it is no longer interested in it. It may well be that there is a cessation of supply and a financial inability to continue supply. What is the noble Lord going to do about it?
10.15 p.m.
It is all very well referring to the predetermined answer to the question and to the predetermined response to the amendment. Let the noble Lord exercise his independent commonsense. What is going to happen? This is the question that my noble friend Lord Williams of Elvel asked and to which he does not have an answer. Why does not the noble Lord answer it?
Lord Gray of Contin: If the noble Lord, Lord Bruce of Donington, would listen, he would hear answers, but he frequently closes his ears to anything which he does not particularly want to hear. I have answered the noble Lord, Lord Williams, in detail already. Perhaps when the noble Lord reads the record he will find out that I did.
The noble Lord included in his comments a number of matters which were irrelevant to this amendment. He is totally obsessed with take-overs in the City. We get lectures about them almost every day we meet. Of course we are grateful to the noble Lord for giving us the benefit of his great experience as a chartered accountant, but there are many highly successful take-overs—
Lord Bruce of Donington: Hear, hear!
Lord Gray of Contin: —and it is wrong of the noble Lord to suggest that every take-over is of dubious merit because that is not the case. I am sure that the noble Lord advises people from time to time about the merit of a take-over. I am sure that his advice is always good and is taken. I do not always take what he says about take-overs as being gospel.
The noble Lord said that I did not fully answer the noble Lord, Lord Williams, and so I shall revert to what the noble Lord, Lord Williams, asked me and try to make the answer a little more clear. In considering notifications the Secretary of State needs to judge only whether or not the supply is above or below 2 million therms per year. He will not need to consult the duties under Clause 4 in coming to such an objective conclusion. If a company can get through the 2 million-therms-a-year test, it will get authority to supply under Clause 6. But the commercial arrangements are a matter for the parties, which will have to form their own judgment in due course on the merits of a particular deal.
The noble Lord, Lord Bruce, when he asked me how the director would deal with these matters did not raise any new point with which I had not dealt in my previous summing up. I explained that in each case it will be a matter for the director and his staff to determine whether the company in question is of continuing standing. The fact that that company might belong to a group will be, as I explained to the noble Lord, Lord Williams of Elvel, a little earlier, for
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the director to determine; it will be for him to make his own investigations.
Lord Bruce of Donington: The noble Lord is short-circuiting once again. He says "the director". Clause 4 lays the duty on the Secretary of State and the director; it is not only the director.
Lord Gray of Contin: I am not the one who is short-circuiting; it is the noble Lord. This amendment deals with Clause 6. We have moved on from Clause 4 and I referred to Clause 4 only because there is a relationship between them.
Lord Williams of Elvel: Can the noble Lord help me on one point? In his response he said that in considering those who had notified, were in a position to notify, would or might become gas suppliers or are gas suppliers under this clause, the Secretary of State would presumably—I think he used the word "presumably"—consider the other companies of a group of which such a gas supplier might or might not be a member. If the noble Lord can remove the word "presumably" and give us the assurance that the Secretary of State "would" consider the circumstances of other members of a group, that would meet our point.
Lord Gray of Contin: This would be the Secretary of State and the director, and they will use their own means, as they see fit, to examine and explore the financial status of a company. However, I am not going to give the noble Lord that assurance in the middle of an exchange across the Floor during the Committee stage of a Bill. I am too long in the tooth for that.
Lord Stoddart of Swindon: Oh!
Lord Gray of Contin: Yes, "presumably" is a term of speech in some matters. The Secretary of State and the director would examine the situation in the case of a group and I used the term as explanation that presumably they would investigate thoroughly. The director particularly will be very interested. But I am not going to give any assurances without consideration—certainly not.
Lord Williams of Elvel: I fail to see the problem that the noble Lord the Minister has in giving us an assurance that the Secretary of State and the director would look at other companies in a group when assessing the status of a gas supplier; but if he refuses to do so we shall consider the matter and if we feel strongly about it will come back on Report. I am bound to say that what we are asking the Minister to give way on is not very significant but in view of what he said I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 55, 56 and 57 not moved.]
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 58:
Page 4, line 31 leave out from ("receiving") to ("the") in line 33 and insert ("a notification from a gas supplier under subsection (1) above and before making a direction or notification under subsections (1) or (2) above").
The noble Lord said: This amendment stands in the name of myself and my noble friend Lord Gallacher. To some degree this is a probing amendment and I can deal with it briefly.
The amendment seeks to write an element of consultation into the process of non-authorised gas supply. As the clause stands, the Secretary of State is in the position of informing the director and the other interested bodies of a decision made. The amendment seeks to clarify that he must inform the bodies before making a direction or notification, thereby giving them the opportunity to comment.
It seems absurd that all the Secretary of State need do is inform the director, the Health and Safety Executive and,
"any public gas supplier whose authorised area includes the premises or any part of the premises to which the gas supplier's notification relates",
that he is doing something after he has done it. It seems reasonable to me that he should inform them that he is about to do it so that if they wish they can make some comment.
It may be that I have the whole thing wrong. That is why I say that this amendment is in the nature of a probing amendment. Therefore I shall sit down and listen to what the noble Lord, Lord Gray, has to tell me about it. I beg to move.
Lord Gray of Contin: I shall try to explain the position to the noble Lord as best I can. The Bill makes no specific provision for consultation on the question of whether or not to accept a notification or to invalidate a notification because the required rate has not been achieved, but it is open to the Secretary of State to consult the director where he thinks it will be helpful to him to have the director's view on any matter arising under the clause.
As to the role of the Health and Safety Executive, as we have already made clear, the assumption is that where supplies of over 2 million therms a year are concerned the customers are likely to be major companies with their own comprehensive safety arrangements, with the premises subject to inspection under the Health and Safety at Work Act. Such supplies automatically attract the requirements of gas safety legislation. There is no requirement for formal consultation with the Health and Safety Executive under Clause 6 since there are no matters under that clause on which their views would be relevant to a decision of the Secretary of State.
The general purpose of the provision is to promote competition. While it is right that a public gas supplier should be notified of a proposed supply within his authorised area, it would not be right to go beyond this. The noble Lord's amendment would make the provisions of Clause 6 more restrictive. The noble Lord indicated that this amendment was in the nature of a probing amendment, and I shall go a little further and tell him that this would be completely at odds with
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the Government's objectives and the (competition) duty on the Secretary of State and the director at Clause 4(2)(d). So in what I have said, I hope that I have explained to the noble Lord what we seek to do and why I believe that the amendment which he has proposed is not acceptable to the Government. In view of that explanation perhaps he will be prepared to withdraw it.
Lord Stoddart of Swindon: I am not at all sure that I am entirely happy with the reply that the noble Lord has given, but at this late hour I think that my best course will be to read at a later date what he has said, withdraw the amendment and perhaps come back to it at a later stage.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 [Authorisation of public gas suppliers]:
10.30 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 59.
Page 4, line 41, after ("section") insert ("as contained in Schedule (Authorisation to be granted by the Secretary of State for Energy to a public gas supplier under section 7) to this Act").
The noble Lord said: I beg leave to move Amendment No. 59 standing in my own name and that of my noble friend Lord Williams of Elvel. I am afraid that I cannot move this amendment as briefly as I did the last one because this is an important amendment. Indeed, so far as we are concerned, it is a vital amendment. I am extremely put out (if I may put it that way) that this important amendment is being discussed at this time of night. I think that it would have been far better if the Committee could have discussed it when the Chamber was fuller and more Members could have understood just exactly what we were trying to do.
The Committee will know that the BGC operates under statute. It is under the general, though not detailed, control of the Department of Energy and the Treasury, and is ultimately responsible to Parliament for its efficiency and general behaviour. That has been the case since gas was nationalised. But even before then a large part of the gas industry was owned by the municipalities and was therefore under direct public control. In addition, we have the influence of the consumer being brought to bear directly on the BGC through the national council and through the regional councils and their local committees.
Under those circumstances, the BGC has no alternative but to act in the public interest. If it does not do so, Parliament can take positive steps to remedy that position. However, once it is privatised, parliamentary control over the industry becomes virtually non-existent. Although the Secretary of State lays down the conditions of the authorisation, there is no parliamentary input. He does not have to go to Parliament to justify the conditions that he is imposing, nor answer for those that he should impose but is not imposing. Indeed, during the passing of the Bill we cannot discuss the authorisation in any meaningful way and cannot add or delete any conditions, and nor can we amend them in any way.

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That is unacceptable. For that reason we seek to add the authorisation as a schedule to the Bill.
Members of the Committee will notice that the new schedule that we propose is identical to the proposed authorisation—no more, no less. That is not because we believe that the proposed authorisation is satisfactory; we certainly do not. It is far from satisfactory in much that it proposes, and totally unsatisfactory in what it does not propose. I do not intend to embark on a detailed critique of the proposed authorisation. That would be unfair to the Committee and would be a time-consuming exercise. But, for example, we are not satisfied with the price formula, and are certainly not happy that it is likely to operate for only five years. Therefore, if the Committee agrees to the amendment we shall seek at Report stage to strengthen the authorisation by moving amendments at that stage of the Bill.
We are certainly not happy with the situation whereby changes to the authorisation can be made with the consent of the supplier, provided that agreement is reached with the Director General of Ofgas; nor do we believe that the Monopolies and Mergers Commission should necessarily be the final arbiter of alterations to the authorisation. There may be changes which ought to be made but which do not come within the competence of the MMC.
The safest way of proceeding in the public interest is to write the authorisation into the Bill. It may be argued that by so doing we shall remove flexibility and that the procedure for making alterations to the authorisation will be too cumbersome, but I doubt whether that is so. In any event, if the amendment is agreed we can write into the Bill procedures for amendment by Parliament that will be quick and efficient. What is certain is that if the authorisation is in the Bill everyone will know where to find it and will be able to consult it, and Parliament itself will be able to keep a proper watching brief over the conditions under which a powerful, private monopoly operates. We can ask no less, bearing in mind the great change which will take place to this previously publicly-owned industry.
Noble Lords opposite say they are returning the gas industry to private enterprise. It has never been wholly in private hands; there has always been a big public input. From the time it began, the municipalities (the local authorities) have had a great deal of control and ownership of the industry. By the Bill we are, therefore, creating something which is new, not something that is old and is being returned to. The least we can ask for is what is contained in the amendment, which is to see that the licence which the new private monopoly of British Gas will have will be strong enough and that the public, through Parliament, will have some say in how the licence operates and any amendments which may be made to it. I beg to move.
Lord Belstead: I am grateful to the noble Lord, Lord Stoddart, for moving fairly succinctly this long new schedule to the Bill, which is in fact a rewrite, as he explained, of the authorisation which was made available to the Committee soon after Second Reading so that we could all have a good look at it in order to debate it. I welcome that.
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To get myself on the same network as the noble Lord, I realise that we are debating this point late at night, but there will be another opportunity to debate this matter when the noble Lord and his noble friends come to Amendment No. 101BA. The noble Lord referred to wishing to look at how the authorisation is finally revoked. That will also be dealt with under Amendment No. 63B. We shall have more than one bite at this cherry, and I therefore content myself with saying only three things.
Lord Stoddart of Swindon: When I moved Amendment No. 59 I should have said that it might be for the convenience of the Committee if I spoke also to Amendment No. 84A.
Lord Belstead: I am grateful to the noble Lord. I assumed that we were taking Amendment No. 84A as well. I shall content myself with saying only three things. The first is that I am sure that the noble Lord will not mind if I say that there are certain slips of the pen in the drafting of the amendment which make the amendment considerably defective. I say that only because Amendment No. 101BA has the same printing errors. I know that he will be the first to say, if we start crawling over them, that they create defective amendments. I merely say that for the record.
The second point is that I say from my record that we should not forget that this is a licence—an authorisation—which provides some protections for the consumer which have not been seen before in the organisation of the gas industry. I have in mind Condition 6 in the authorisation, which lays down important new conditions for the protection of people with regard to connection charges. I have also in mind Condition 8, which relates to the provision of information to the Gas Consumers Council, where there is a significant new departure from current practices which requires British Gas to meet any reasonable request from the new Gas Consumers Council for information on complaints on gas supply matters. The new Gas Consumers Council will therefore be able properly to investigate those complaints and come to an informed conclusion. Important points are to be found in the new licence, or authorisation.
The third point is that I want to explain why I have difficulty in being able to accept the amendment, persuasive though the noble Lord was. The reason is very simple. It is that the authorisation, we plan, is to be given to British Gas for a period of at least 25 years. It is a long period, I know. But it is to give certainty to gas consumers that they will continue to receive supplies and that they can happily invest in expensive gas appliances such as central heating systems in the knowledge that gas will continue to be available, and to give confidence to investors who will want to know that the business in which they are buying shares will continue to be able to make profitable use of the assets for a reasonable period.
But, given that the authorisation must be for a reasonable period, provision must surely be made for it to be adaptable to meet changing circumstances so that consumers can be protected, not only in the kind of energy market that we have now, but also in whatever markets develop in future years. If we are to

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have sensible flexibility for the future, with respect to noble Lords opposite, it does not make sense to freeze the authorisation in statute. That is what this amendment would do. The consequences of accepting Amendment No. 59, which we are now discussing, together with Amendment No. 84A, would be that once any change was made to the conditions contained in the authorisation granted to British Gas, however minor or uncontroversial a change might be, the authorisation would no longer be that set out in the schedule. Hence, British Gas would no longer be a public gas supplier for the purpose of the Act.
The consequences would be that customers would no longer enjoy the extensive protection given by the provisions in Clauses 9 to 15 and Schedule 5 concerning the right to demand a supply if they are within 25 yards of a main, or the continuation of existing supplies, as contained in Clause 10. In addition, British Gas would lose the old historic operational rights of being allowed to break up roads to put in pipes. In other words, if one wanted to change one dot or comma of the authorisation—if one accepted the amendment—it would mean that one would have to have a new Gas Bill. With respect to noble Lords, I do not think that that is reasonable. For that reason I cannot accept the amendment.
Lord Bruce of Donington: I am very sorry indeed that the noble Lord cannot accept the amendment. Surely the confidence of the investing public, of the consumer, of Parliament and of the people is based on the authorisation to which the noble Lord refers. The noble Lord says that he wants flexibility. But he was careful about this. The noble Lord mentioned only such minor amendments that might be effected—the odd dot or comma. He raised the horrifying prospect of coming back to Parliament to get minor matters corrected. By the same token major alterations to the authorisation could be made under pressure from the company's shareholders, under pressure from the institutions, who might, after two or three years, find that some of the conditions, yes, even the safety conditions, contained within the authorisation were much too onerous and meant that not enough profit was being yielded.
Under the somewhat volatile conditions (if I may use the term in a different context) characteristic of the entire energy market including coal and oil, and with a question mark over nuclear power and all the rest, it is quite likely that after a year or so the institutions which invest in British Gas plc—it will in the main be institutions, although for propaganda purposes we shall have a suitable littering of individual shareholders so that it may be dressed up as people's capitalism or something of that kind—may bring pressure to bear for the authorisation to be altered. There the argument of flexibility will have some force because, instead of having to come back to Parliament for the authorisation of major change, it can be done under what the noble Lord calls flexibility, very quickly, without all the trouble.
This Bill is in part being sold to the electorate, to Parliament and to the investors on the basis of the contents of the draft authorisation—and it is only a draft at the moment. As the noble Lord knows full
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well, there is many a slip 'twixt cup and lip. The final licence to British Telecom was altered from the draft licence before the Bill came into operaton.
What conceivable objection can there be to having its own authorisation drawn up after much consultation with the industry, and after much heart searching by individual Ministers? It may even have gone to Cabinet for all I know, although it is a rare occasion when matters of this kind go to the full Cabinet.
Are we saying that there are circumstances which the noble Lord already envisages which will change the draft authorisation before we go very much further? Surely there has to be some finality about this. I willingly concede that conditions may arise, with or without the pressure of shareholders—though the pressure of shareholders will grow as time passes—where it is quite proper for alterations to be made. We are not talking about commas, or semicolons, or provisions to eliminate "and" and put "but", or matters of that kind. But changing circumstances may produce the necessity for a major review. This ought to be the subject of an amending Bill. In my experience of Parliament in another place and in this place, if the Government require something urgently they normally get it. The existing Government—despite their somewhat precarious position today, to which it is perhaps unkind to refer—could get the matter through another place in a very short time by the sheer volume of votes. There is no problem there. If the amendments are reasonable they coud go through the House and through this Chamber very quickly indeed. Or is the noble Lord assuming that his amendments arising in the future for which he wants flexibility will be so unreasonable that they will be a matter of contentious argument? Surely that will not wash.
We are dealing here with an industry that differs in very significant respects from British Telecom. For example, there are very few physical dangers to which a telephone subscriber is subject. He may occasionally be inconvenienced by lack of maintenance and matters of that kind. He may be inconvenienced by certain breaches of the existing licence of British Telecom. But they are not so vital in terms of the welfare of the individual as any potential relaxation or change of the rules that are incorporated in the authorisation.
I plead with the noble Lord to be reasonable about this. If the Government believe in the authorisation as of now—as they presumably do, otherwise they would not pray it in aid, bring it forward and circulate it—let it be put in the Bill. What is wrong with that? Let the noble Lord explain.
Lord Belstead: I hope the Committee will not think me tedious if I very briefly repeat part of what I have said before. The reason why I part company with what the noble Lord, Lord Bruce of Donington, is saying is simply this. I agree with the noble Lord that there are very important things in the authorisation—and I mention two examples, one being that there are important new safeguards for consumers of gas so far as connection charges are concerned, which is something which is very important, and another being important new provisions giving information-

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gathering powers to the new Consumers' Council, which I think is very important.
However, there are a lot of other important things in this authorisation. On that I agree with the noble Lord. Where, with respect, I disagree with the noble Lord is that if the Government were to accept this amendment it would mean that if any change was made to any of the conditions, however minor or uncontroversial that change might be, the Government of the day would have to come back to Parliament to get a completely new Bill in order to get a new authorisation in order to go on running the gas supply in this country. That is the inevitable consequence of accepting this amendment.
If I may just go on for a second, the noble Lord then raised the spectre of interests (which he did not really specify, but clearly they were supposed to be sinister interests) getting at the authorisation and making changes which would affect the safety of gas. I acquit the noble Lord of not having looked at the Bill because I know he has looked very carefully at the Bill. The part of the Bill I think the noble Lord, with respect, ought to have referred to is the part that we have not yet come to. When we get to Clauses 23 to 27, the Committee will then find that changes to the authorisation—and this is the part of the Bill called "Modification of public gas supplies authorisations"—man only be made if the director makes a reference to the Monopolies and Mergers Commission, and of course that Commission will have to have regard to the very important duties which are laid on my right honourable friend and on the director in Clause 4, which we have dealt with.
In Clause 4 we find that protection for the consumer is put up front, both in terms of gas supply and in terms of pricing, and so with respect to the noble Lord I reject the suggestion that in some way some sinister influences would be able to get at the authorisation and would make changes which would affect the safety of consumers. The Bill has been very carefully drafted, in the part that we will come to, to make sure that that could not happen.
We are going to come, I expect, in 10 days' time to a subsequent amendment, No. 101 BA, when we will be able to go over this ground again. I ask Members of the Committee not to press this amendment this evening, partly because it is, with respect, defective, and most importantly because it would have the effect of creating a situation where, if one then wanted to make the slightest change to the authorisation, it would need a new Bill.
Lord Sandys: I do think that my noble friend has gone as far as it is possible to do. Perhaps it would be a suitable moment to draw the Committee's attention to the fact that in preparing and examining legislation of this nature the Committee have a particular responsibility. Regarding the stability of the statute book, it is a major matter. My noble friend attempted—and he is quite right to do so—to seek that this statute should remain in operation for at least a generation. If we think back to the state of the gas industry 25 years ago and look at it in 1961, and think of the changes within the industry since that time, this is a real reason to have that degree of flexibility.
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Since 1961 the entire operation of North Sea gas has come into being, and changes which were absolutely unheard of have come forward. If we followed the proposal of the noble Lord, Lord Bruce of Donington, we should be forced into a position in which Parliament and naturally your Lordships' House would be obliged, in the course of a number of years, to undertake another primary legislative exercise which would be quite unnecessary.
Lord Stoddart of Swindon: I am most obliged to the noble Lord, Lord Belstead, for the courteous way in which he has dealt with this amendment. As my noble friend Lord Bruce of Donington made quite clear, we do not agree with his reasoning. I say now that I shall not press this amendment tonight; I shall withdraw it, because we should like to look very closely at what the noble Lord has had to say.
However, the noble Lord said that in the proposed authorisation there are protections for consumers not seen before. That may very well be, but protections exist for the consumer under the Gas Act 1972. There is the protection of Parliament itself, and the ability for detailed matters to be discussed by Parliament; and, indeed, there is the relationship between the gas industry and the Minister. Neither the proposed authorisation nor the Bill as a whole is a substitute for what exists at present. It is our view that by this Bill the consumer loses out very considerably, and loses many of the protections which he has by various means at present.
The noble Lord said that the authorisation would be for 25 years. That is in the authorisation itself. I understand that 10 years' notice will have to be given to end that authorisation. Of course, security must be given. I did not want to discuss matters which were in the authorisation; it is the principle about which we are concerned. However, 25 years is a devil of a long time. It is far longer than is given to an independent television company. If my memory serves me correctly, I think that the period there is 15 years, perhaps even less. However, 25 years is a long time, and many things can happen.
The noble Lord said that we shall be freezing the authorisation in the statute. I do not know that we are. The noble Lord seemed to be saying that if we have the authorisation as a schedule to the Bill, because it is a statute we must have a whole new Bill before we can alter that schedule. That clearly is not so. It is possible to have an amending Bill; and, indeed, if the noble Lord accepted this amendment we would co-operate with him in agreeing that the authorisation could be amended by affirmative order. There are all sorts of ways in which we can amend Bills without actually having to have primary legislation and a new Bill. If that is his problem—that, as he says, he fears that he would have to have a new Bill—I am sure that we could meet him on this and I am quite sure that we could write in at a later stage that the schedule, which constitutes the authorisation, could be amended by affirmative order.
The hour is late and I have already said that I shall withdraw the amendment. However, in return for that I wonder whether the noble Lord will have a look in Hansard at what we have said and will think about it between now and the next stage of the Bill. We have

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listened to the noble Lord and we shall read what he has said, and he also should listen closely to, and read, what we have said, because our fears are real and it could be that we can come to some accommodation. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Belstead: We have had a long day and we have just completed an important amendment. I think perhaps this might be a moment when the House might be resumed if your Lordships agree. I beg to move that the House be now resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Marriage (Prohibited Degrees of Relationship) Bill [H.L.]
Returned from the Commons, agreed to.

Isle of Wight Bill
Returned from the Commons with the amendments agreed to.
House adjourned at one minute past eleven o'clock.

  DEER HUNTING IN THE NEW FOREST
  DEER HUNTING IN THE NEW FOREST
  BOARD AND LODGING ALLOWANCES: PAYMENT OF ARREARS
  BOARD AND LODGING ALLOWANCES: PAYMENT OF ARREARS